02/15/2001 03:03 PM House HES
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ALASKA STATE LEGISLATURE
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
February 15, 2001
3:03 p.m.
MEMBERS PRESENT
Representative Fred Dyson, Chair
Representative Peggy Wilson, Vice Chair
Representative John Coghill
Representative Gary Stevens
Representative Vic Kohring
Representative Sharon Cissna
Representative Reggie Joule
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 41
"An Act repealing the termination date of changes made by ch.
87, SLA 1997 and ch. 132, SLA 1998 regarding child support
enforcement and related programs; repealing the nonseverability
provision of ch. 132, SLA 1998; repealing certain requirements
for applicants for hunting and sport fishing licenses or tags,
and for certain hunting permits, to provide social security
numbers for child support enforcement purposes; and providing
for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 41
SHORT TITLE:CHILD SUPPORT ENFORCEMENT/SOC SEC. #
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
01/10/01 0046 (H) READ THE FIRST TIME -
REFERRALS
01/10/01 0046 (H) HES, JUD, FIN
01/10/01 0047 (H) FN1: ZERO(REV)
01/10/01 0047 (H) GOVERNOR'S TRANSMITTAL LETTER
01/25/01 (H) HES AT 3:00 PM CAPITOL 106
01/25/01 (H) Heard & Held
01/25/01 (H) MINUTE(HES)
02/15/01 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
BARBARA MIKLOS, Director
Central Office
Child Support Enforcement Division
Department of Revenue
550 West 7th Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Testified in support of HB 41.
DIANE WENDLANDT, Assistant Attorney General
Commercial Section
Civil Division
Department of Law
1031 West 4th Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Answered questions on HB 41.
AURORA HAUKE, Staff
Senator Lyda Green
Alaska State Legislature
Capitol Building, Room 125
Juneau, Alaska 99801
POSITION STATEMENT: Presented SB 19.
ACTION NARRATIVE
TAPE 01-15, SIDE A
Number 0001
CHAIR FRED DYSON called the House Health, Education and Social
Services Standing Committee meeting to order at 3:03 p.m.
Members present at call to order were Representatives Dyson,
Wilson, Coghill, Stevens, Kohring, Cissna and Joule.
HB 41-CHILD SUPPORT ENFORCEMENT/SOC SEC. #
CHAIR DYSON announced the committee would hear HOUSE BILL NO.
41,"An Act repealing the termination date of changes made by ch.
87, SLA 1997 and ch. 132, SLA 1998 regarding child support
enforcement and related programs; repealing the nonseverability
provision of ch. 132, SLA 1998; repealing certain requirements
for applicants for hunting and sport fishing licenses or tags,
and for certain hunting permits, to provide social security
numbers for child support enforcement purposes; and providing
for an effective date."
CHAIR DYSON remarked that HB 41 is in danger of sunsetting and
the Senate companion bill, SB 19, has made it out of the Senate
Health, Education and Social Services Standing Committee (HES)
with some modifications.
BARBARA MIKLOS, Director, Central Office, Child Support
Enforcement Division (CSED), Department of Revenue, came forth
to discuss HB 41. She stated that changes to the legislation
were based on congressional welfare reform requirements. When
Congress passed welfare reform in 1996 changes were made to the
public assistance system as well as the child support system.
It was Congress' expectation that if people are going to be
taken off of welfare and public assistance there needed to be a
way to get more income for them. Three pieces of legislation
were passed in Alaska in 1996, 1997 and 1998 to meet the
requirements of the federal government and avoid the loss of
federal money for child support and public assistance. When the
legislature, in 1997 and 1998, passed those bills, they included
a sunset clause for 2001. The CSED would like the sunset
provision to be removed so the law can continue. Since the
legislation was passed the CSED has dramatically increased
collections for child support. For instance, in FY (fiscal
year) 1999 CSED was collecting $81 million. In FY 2000 that
increased to $85 million and this year collections are expected
to be between $90 and $92 million. Therefore, there has been a
dramatic increase in the amount of money that's going to Alaskan
families.
Number 0418
MS. MIKLOS said that CSED also provides support for the
government; for instance, if someone were on public assistance
right now his or her child support would be passed on to the
government. But, with a reduction of the welfare rolls more of
the money being collected is going straight to the families.
Today almost 50 percent of the money collected and distributed
by CSED is going to families that were on public assistance.
CHAIR DYSON asked Ms. Miklos if welfare rolls are decreasing due
to the success of other programs. He also asked if CSED is
playing a part in that since increased collections from
respondents or noncustodial parents is successful, which would
help people get off of welfare.
MS. MIKLOS answered absolutely.
CHAIR DYSON asked if she could provide some figures.
MS. MIKLOS replied that 54 percent of those receiving
collections from CSED were at one point in their lives on former
assistance. About 12 percent are on current assistance. She
said she thinks that the reduction in public assistance is
because of the welfare reform legislation, not because of child
support [collections]. However, she expressed the hope that
CSED is keeping people off of public assistance and helping them
to support their families.
CHAIR DYSON asked if the aforementioned figures were CSED's
collections. He also asked how much federal money comes to the
organization.
MS. MIKLOS answered that the figures are CSED's collections and
that CSED's budget is supported by federal funds, which are
around $15 Million.
CHAIR DYSON asked how much of that money is general fund (GF)
money.
Number 0600
MS. MIKLOS replied that CSED has about $3 million in GF program
receipts. The money being collected for people on pubic
assistance is being used to enhance the budget. The CSED only
has about $118,000 of pure GF; they're supported either by the
GF or the money brought in from the public assistance cases.
CHAIR DYSON requested that Ms. Miklos talk about the money being
brought in by public assistance cases.
MS. MIKLOS explained that if someone is on public assistance he
or she is required to cooperate with CSED unless there's danger
to someone, such as a custodial parent or a child. Assuming
that's not the case, the person should let CSED know who the
noncustodial parent is and provide as much information as
possible, then CSED sets up a child support case. The money
collected on those cases is returned to the state government,
with a percentage also going to the federal government.
CHAIR DYSON asked what amount goes to CSED.
MS. MIKLOS replied that money only comes to the CSED through the
General Treasury.
CHAIR DYSON questioned why money CSED collects from a
noncustodial parent shouldn't go to the welfare agency instead
of CSED.
Number 0707
MS. MIKLOS answered that the money did go to the welfare
agencies, but the legislature changed that about two or three
years ago. She explained that part of the federal money that
CSED collects is called incentive money, which was once used to
be based on how many public assistance cases CSED had. Now the
incentives have been changed to performance measures. About
three years ago, nationally, there was a gigantic crash in the
incentive payments brought in, and therefore there was a
gigantic crash in the child support budget. At that time it was
thought that it was better to use the program receipts to shore
up [the CSED] budget. The plan was instigated by the
legislature because CSED had to come in for a large [funding]
supplement. Therefore, having performance measures prevented
that from happening.
CHAIR DYSON asked if there is any financial incentive for CSED
to get more child support cases.
MS. MIKLOS answered no, not at all.
Number 0790
MS. MIKLOS added that the total amount that CSED collects has
not been appropriated; that's based on what the budget is.
Number 0815
REPRESENTATIVE STEVENS recounted that Ms. Miklos mentioned that
the CSED would be collecting $90 million from collections in
2001, of which about $45 million goes to families on public
assistance. He asked how that has changed over the years.
MS. MIKLOS replied that she is unsure of the exact numbers right
now but the trend has been that in the early '70s CSED was set
up to recoup public assistance. Now more of the money is going
directly to the family.
Number 0894
MS. MIKLOS continued that in there's five sections under HB 41.
The first was an intent section. The second section repealed
the sunset and nonseverability provisions that were part of the
1998 legislation. Provisions said that if part of this bill is
found to be unconstitutional, then the entire bill is
unconstitutional. At that time CSED was concerned because the
programs that are defined in the bill are very different. For
example, one could be about how to deal with families and
domestic violence while another could be about the financial
data match program. Sections 4 and 5 are the effective dates
for the various sections. She stated that HB 41 is a simple
piece of legislation that reflects a complex piece of statutes.
Number 0978
MS. MIKLOS explained that the legislation made sure that CSED
had access to various records such as vital statistics, property
records, licensing records and motor vehicle records. Some of
this CSED already had access to voluntarily from the various
agencies, but HB 41 codified it. She said that one of the
things that was not part of the federal requirements, and was a
legislative add-on, was language that said if a person is going
through occupational and driver's license programs and shows
that he or she is meeting the requirements of these programs,
then he or she will not lose those licenses. She noted that
CSED agreed with that.
MS. MIKLOS remarked that another piece of the legislation stated
that the child support agencies in each of the states would be a
central repository for all of the various orders, even if the
agencies were not enforcing those orders. This provides an
opportunity for Alaska to know if there is an order out or if
another state wants to know if there is an order in Alaska. One
of the more minor pieces of legislation, which just changed some
definitions in order to be consistent with the rest of the
states, enhanced some due process requirements. These
requirements mandate CSED and financial institutions to set up a
financial data match program, which will automatically match
CSED's caseloads with caseloads from financial institutions.
Number 1094
MS. MIKLOS continued, stating that the CSED already had income-
withholding requirements. She noted that HB 41 requires that
the child support agency get the check out within two days.
Furthermore, HB 41 shortens the time the employer had to
actually start the withholding to seven days. In terms of
liens, the legislation says that CSED would put full faith and
credit to liens in other states, as long as they followed the
process in Alaska. Moreover, HB 41 requires that the state give
the parties in the case the chance to modify their order every
three years. She stated that HB 41 requires all employers in
the state to report all new hires and rehires within 20 days to
CSED. This piece of legislation, she said she thinks, is the
number one reason the CSED has increased collections. This
information used to be received from the Department of Labor at
the end of a quarter, now CSED receives it much more quickly.
She acknowledged that not all of the employers are complying,
but CSED has taken the position of not being punitive and
working with the employers in order to get them to comply.
MS. MIKLOS pointed out that this legislation clarified who would
enforce the penalties under the law if those on public
assistance did not cooperate and work with CSED. This
legislation changed the way that CSED discloses information on
cases. She informed the committee that the emphasis in Congress
was if the child support agency had information about the
children's whereabouts and the noncustodial parent wanted to
know that, CSED would release that information unless there was
evidence of danger to the family. In the past Alaska's law was
such that CSED would only release the information if somebody
were caught up on his or her child support. She said she thinks
that changing this law put the emphasis on safety and less on
payments.
MS. MIKLOS remarked that this legislation changed the way
paternity orders are done. Alaska has a voluntary paternity
program, where the father may voluntarily sign the birth
certificate at the hospital. However, under HB 41 the father is
now informed of his rights and responsibilities, so by law he is
required to provide child support if his family is not together
or he is not supporting the children. The CSED provides videos
that offer information fathers need on these orders to the
hospitals and the birthing centers.
MS. MIKLOS continued, saying the legislation gave CSED the
ability to seek work orders, which it has chosen to do through
the court only. Many of the requirements of social security
numbers were changed, including requiring people to provide
social security numbers on various applications. This
legislation gave CSED the authority to subpoena financial
records, which had been done through the commission of revenues
authority, and now it is a direct authority. Finally some of
the legislation changed to be consistent with UIFSA, (Uniformed
Interstate Family Support Act). She concluded that this is the
underlying pinning of what HB 41 would unsunset.
CHAIR DYSON asked if a court order from other states would put a
lien on Alaskan property. He also asked if the same
notification requirement would apply with the garnishment of
wages or cease and disperse funds.
Number 1335
DIANE WENDLANDT, Assistant Attorney General, Commercial Section,
Civil Division, Department of Law, replied that the same
requirements apply.
CHAIR DYSON asked what the requirements for notice are.
MS. WENDLANDT answered that seizing a bank account is normally
done through an administrative withholding order. The order is
sent to the bank, and a notice of this is sent to the obligor.
All the information from the bank is sent to the obligor's last
known address. She related her understanding that with bank
sweeps the banks provide notice to their customer once they have
received it, and the bank holds the money for 14 days.
CHAIR DYSON asked if there's a procedure that the respondent can
challenge the out-of-state lien or seize and disperse order.
MS. WENDLANDT responded that before any money is paid out, the
obligor would have an opportunity to contest that withholding
order. The only way this can be done, under Alaskan law, is
through a withholding order issued by a court or by CSED. An
agency from another state could not send a direct withholding
order to a bank, and if a bank were to honor one of those orders
it could be liable to its customer for having done so. The
other state would have to ask CSED to take that action for them
and once CSED and the banks send the notices, the obligor has an
opportunity to attest through the agency. There's an
administrative process by which they contest, or if an obligor
chooses, there's a separate statute that allows him or her to
skip the administrative process and go straight to the Superior
Court.
CHAIR DYSON asked if CSED has a handout that is given to the
obligor.
MS. MIKLOS answered that they give out information, required by
state and federal law, regarding what would happen once the
obligor is involved with CSED. The CSED is also required to
send out information to the obligor if the obligee goes on
public assistance.
CHAIR DYSON asked if the handout was user-friendly.
MS. MIKLOS replied that the CSED is working on making it more
user-friendly.
Number 1498
CHAIR DYSON noted that the handout explains what is happening
and why the state has the right to do this. The handout also
specifies the timelines, and the remedies and rights the
biological parents have at every step of the way.
REPRESENTATIVE STEVENS asked for a clarification of the terms
obligor and obligee.
MS. MIKLOS answered that the obligor is the person who is
obligated to pay the child support, and the obligee is the
person who is the custodial parent.
Number 1590
REPRESENTATIVE COGHILL asked Ms. Miklos to explain the penalties
of not complying with the federal government's incentives.
MS. MIKLOS answered that the penalty is $70 million to the State
of Alaska, which is all the child support funding and public
assistance the State of Alaska receives. What's now excluded is
the money that the state is putting into tribal public
assistance grants.
Number 1697
AURORA HAUKE, Staff, Senator Lyda Green, came forward to address
the CSSB 19 (HES), the companion bill to HB 41. She stated that
the findings and intent language were removed because the
committee didn't feel it was important enough to be placed in
the books. A five-year sunset replaced the provisions that had
to do with social security numbers in licensing and vital
statistic documents, such as death certificates, and court
documents, including dissolution of marriage and divorce. A
five-year sunset provision was also placed on the financial
institution data-matching program. The last change that was
made was if a business failed to comply with the new hire
reporting, it would not be liable in a civil case.
CHAIR DYSON remarked that the social security number issue
concerning privacy is certainly controversial. He asked if this
issue were not revisited in five years would the use of social
security numbers go away.
MS. HAUKE answered that was correct, it would be repealed.
CHAIR DYSON asked if an employer didn't comply was that employer
not subject to a civil action by the recipient of the custodial
parent.
MS. HAUKE answered that was correct.
CHAIR DYSON asked if the employer could still be prosecuted
criminally if he or she didn't comply.
MS. MIKLOS answered that it would be a $10 fine.
CHAIR DYSON asked what constrains an employer to obey the law.
Number 1850
MS. MIKLOS said that CSED has been working with the employers,
who have been doing it on a voluntary basis. Under the old
statute the penalty was $1,000 and then was reduced to $10.
There are still many employers that aren't complying, but the
word is getting out to them and most are very receptive.
REPRESENTATIVE STEVENS asked Ms. Miklos what her reaction is to
the change by the Senate that there be no civil reaction.
MS. MIKLOS said that it wouldn't affect CSED at all; it would
just mean that private parties couldn't use this as a cause for
civil action.
REPRESENTATIVE JOULE asked if civil action was pursued very
often.
MS. MIKLOS replied that it had not been at all, but her
understanding is that this change was added as a protection.
CHAIR DYSON asked if the department feels harmed with what has
been done in Senate HES.
MS. MIKLOS stated that CSED worked with Senator Green, Aurora
[Hauke], and the committee and accepted the changes.
CHAIR DYSON asked whether the deletion of the intent and finding
language had any effect.
MS. MIKLOS said that she doesn't think that made any difference
because the language was just an introduction describing why the
bill was introduced.
REPRESENTATIVE CISSNA asked if the changes would make a
difference with the CSED's collections.
MS. MIKLOS answered that it would not. The difference is that
five years from now CSED will ask to unsunset the changes.
REPRESENTATIVE JOULE asked if, in accepting the changes, CSED
would still be in compliant with the federal government.
MS. MIKLOS answered absolutely.
REPRESENTATIVE COGHILL noted his intention to have that
discussion in two years instead of five. He said that if there
is going to be a sunset, then legislative representatives need
to be aware of what is being done.
REPRESENTATIVE COGHILL stated that he would offer an amendment
to require a certified letter when a case is closed.
Number 2147
CHAIR DYSON called an at-ease at 3:49 p.m. He called the
meeting back to order at 3:52 p.m.
CHAIR DYSON informed the committee that it has the option to
adopt a conceptual amendment incorporating the changes made to
SB 19 in the Senate Health, Education and Social Services
Standing Committee.
REPRESENTATIVE JOULE made a motion that the committee adopt a
conceptual amendment that would incorporate CSSB 19(HES), 22
GS1002\O, into HB 41. [No objection was stated. Therefore,
CSHB 41 mirrors CSSB 19(HES) and thus CSSB 19(HES) was treated
as the committee substitute.]
Number 2222
REPRESENTATIVE COGHILL made a motion to amend the effective date
on page 6, line 3 of [CSHB 41] from "2006" to "2003."
Number 2225
REPRESENTATIVE JOULE objected for the purpose of discussion.
REPRESENTATIVE JOULE inquired as to the implications of the
changes. He asked if this is something that can be done.
MS. MIKLOS answered that CSED would still be in compliance with
federal law for the next two years, until the sunset date. The
major effect on the agency is with the resources needed to move
the bill through again as opposed to focusing on the work that
CSED has to do.
REPRESENTATIVE JOULE acknowledged the desire for the legislature
to know what's going on in the next couple of years. However,
he questioned whether there is another way of doing this without
CSED using other resources.
REPRESENTATIVE COGHILL said if CSED dropped all the requirements
for the social security numbers this year then he'd be
satisfied. He reiterated his desire to keep track of the use of
social security numbers, as an issue, by bringing it before the
legislature every time there is a new body meeting.
REPRESENTATIVE WILSON asked if the social security number or
something else is used when tracking [finding the obligor]
across the nation.
MS. MIKLOS answered generally the social security number is
being tracked.
Number 2310
REPRESENTATIVE WILSON asked if it is a nationwide issue that
makes the social security number necessary.
MS. MIKLOS answered yes.
REPRESENTATIVE COGHILL agreed that it is a nationwide issue, but
noted that many nationwide issues are first dealt with at a
local level.
REPRESENTATIVE STEVENS asked Ms. Miklos whether the removal of
social security numbers would cause difficulties in getting the
right person and getting the payments to the state.
MS. MIKLOS answered absolutely.
CHAIR DYSON commented that when social security numbers were
first instituted in the 30s, as a package deal with the economic
depression, there was a commitment made that they never be used
for any other purpose.
TAPE 01-15, SIDE B
Number 2334
CHAIR DYSON remarked that the fact that they have become an
almost universal identifying number is contrary to the
commitment and promise that was made when it was started.
There's a significant amount of people concerned with both the
use and lack of privacy that comes from [that use]. He stated
that although a couple of people view social security numbers as
being of great value in making sure the right person is found,
there is also a downside.
Number 2298
REPRESENTATIVE CISSNA expressed that finding the obligors to
make sure that they meet their obligations is a very high order
of requirement by the state. She stated that she personally
feels strongly that governmental programs can be held
accountable.
Number 2210
REPRESENTATIVE KOHRING made a motion to amend the [Amendment 2]
so that it would become affective "immediately" as opposed to
"2003".
CHAIR DYSON asked Representative Coghill if he would accept that
as a friendly amendment.
REPRESENTATIVE COGHILL replied no, because the reason for the
amendment is because he thinks it is not realistic for the
legislature to take on a $70 million "animal" this year,
although the issue needs to be continually discussed.
Number 2099
CHAIR DYSON stated that the committee would vote on
Representative Coghill's amendment and then entertain
Representative Kohring's amendment separately.
A roll call was taken. Representative's Dyson, Coghill, Stevens
and Kohring voted in favor of amending the bill.
Representative's Wilson, Cissna and Joule voted against it.
Therefore, Amendment 2 was adopted by the House Health,
Education and Social Services Standing Committee.
Number 2041
REPRESENTATIVE KOHRING restated his amendment, which would
change the effective date from "2003" to "immediately" upon the
passing of the legislation. He stated:
I'm just worried about the use of social security
numbers as being kind of a forerunner to further
invasion of one's privacy and if you believe in some
of the writings of the Bible perhaps it might lead to
something that's close to the reference of 666 which
is the Mark of the Beast. I worry that perhaps this
could also lead to identification to the extent of
even electronic chip related technologies. I am very
concerned about what this could lead to in the future
as far as keeping track of people and taking away
their individual liberties. I think we owe it to our
constituents to put a stop to this thing A.S.A.P and
that's why I would like to see this thing implemented
immediately. And I have many constituents who have
brought this concern to my attention. Frankly there's
some people that I have talked to that intend to leave
Alaska over this issue.
Number 1944
REPRESENTATIVE WILSON asked Ms. Miklos what would happen if this
amendment were on the bill.
MS. MIKLOS answered one, CSED would be out of federal compliance
requirements and two, CSED does use the number to make sure they
have the right person when finding someone.
REPRESENTATIVE JOULE stated that he would object to the motion.
CHAIR DYSON clarified that this refers to page6, line 2,
changing "July 1, 2003" to "immediately".
Number 1883
REPRESENTATIVE KOHRING said he wanted to go on record in noting
his objection. He stated:
I recognize there isn't the political will in this
body here, either in the House or the Senate to pass
it. There's a lot of things that really disappoint me
about this legislature where they don't have the
courage to act on issues that many, in their heart,
know are right but they are too afraid to act because
of political consequences.
REPRESENTATIVE STEVENS in response stated:
With due respect with what the representative has
said, I don't think of myself as someone who is afraid
to act, or feel I am not in compliance with my
constituents. I'm ready to make a decision on this
and resent the implication that somehow I'm fearful in
taking this stance.
CHAIR DYSON expressed there are people who will vote their way
on this issue not, in his opinion, out of fear.
REPRESENTATIVE JOULE stated:
I recognize the importance of each of us having our
own position on things and opinions on things and I
respect that. And that's, I think, the beautiful part
of our system, that we can express those. We should
be able to express those and vote accordingly. And
for those people who do not like this system, believe
me, the right of privacy on both sides of the aisle is
a big issue, and if people are leaving, they are going
back to the Lower 48 they are not running away from
social security numbers and if they are going into
other countries they are going to run into things far
worse than social security.
Number 1800
A roll call was taken. Representatives Coghill and Kohring
voted in favor of amending the bill. Representatives Dyson
Wilson, Stevens, Cissna, and Joule voted against it. Therefore,
Amendment 3 was not accepted by the House Health, Education and
Social Services Standing Committee.
Number 1733
CHAIR DYSON stated that HB 101 would be before the committee on
Tuesday, February 20, 2001.
[HB 41 WAS HEARD AND HELD.]
ADJOURNMENT
Number 1720
There being no further business before the committee, the House
Health, Education and Social Services Standing Committee meeting
was adjourned at 4:20 p.m.
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