Legislature(1995 - 1996)
04/12/1995 09:10 AM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE April 12, 1995 9:10 a.m. MEMBERS PRESENT Senator Lyda Green, Chairman Senator Loren Leman, Vice-Chairman Senator Mike Miller Senator Johnny Ellis Senator Judy Salo MEMBERS ABSENT All members present. COMMITTEE CALENDAR SENATE BILL NO. 115 "An Act relating to the establishment, modification, and enforcement of support orders and the determination of parentage in situations involving more than one state; amending Alaska Rule of Administration 9; amending Alaska Rules of Civil Procedure 79 and 82; and providing for an effective date." SENATE BILL NO. 116 "An Act relating to administrative establishment of paternity and establishing paternity by affidavit; relating to child support enforcement; and providing for an effective date." SENATE BILL NO. 137 "An Act relating to retirement incentive programs for the public employees' retirement system and the teachers' retirement system; relating to separation incentives for certain state employees; and providing for an effective date." SB 138 (TUBERCULOSIS CONTROL) was scheduled, but not taken up this date. PREVIOUS SENATE COMMITTEE ACTION SB 115 - No previous action to record. SB 116 - No previous action to record. SB 137 - No previous action to record. SB 138 - No previous action to record. WITNESS REGISTER Glenda Straube, Director Child Support Enforcement Division Department of Revenue 500 W 7th Avenue, Suite 410 Anchorage, Alaska 99501 POSITION STATEMENT: Discussed SB 115 and SB 116. Art Peterson Uniform Law Commissioner for Alaska 350 N. Franklin Juneau, Alaska 99801 POSITION STATEMENT: Discussed how UIFSA evolved and pointed out the importance of SB 115. Marilyn May, Assistant Attorney General's Office Child Support Enforcement Division 1031 W 4th, No 200 Anchorage, Alaska 99501 POSITION STATEMENT: Reiterated the importance of eliminating multiple court order in SB 115. Offered information regarding back arrears of child support in relation to SB 116. Joan Connors Office of the Ombudsman 333 W 4th, No 305 Anchorage, Alaska 99501 POSITION STATEMENT: Offered information. Stuart Hall, Ombudsman PO Box 113000 Juneau, Alaska 99811-3000 POSITION STATEMENT: Stated support for SB 115 from the Office of the Ombudsman. Bea Hagen, Deputy Ombudsman 250 Cushman Street Fairbanks, Alaska 99707 POSITION STATEMENT: Discussed the importance of direct wage withholding. Art Snowden, Administrative Director Alaska Court System 303 K Street Anchorage, Alaska 99501-2084 POSITION STATEMENT: Supported SB 115. Rebecca Eames, Chief Field Operations Division of Public Assistance Department of Health & Social Services PO Box 240249 Anchorage, Alaska 99524-0249 POSITION STATEMENT: Clarified confusion regarding the amount of child support received by an AFDC family. Rick Krueger PO Box 8172 Ketchikan, Alaska 99901 POSITION STATEMENT: Related his personal experience with CSED. Al Zangri, Chief Bureau of Vital Statistics Department of Health & Social Services PO Box 110675 Juneau, Alaska 99811-0675 POSITION STATEMENT: Supported SB 116. Annalee McConnell, Director Office of Management & Budget Office of the Governor PO Box 110020 Juneau, Alaska 99811-0020 POSITION STATEMENT: Discussed the RIP process under SB 137 and its projected savings. Bob Stalnaker, Director Division of Retirement & Benefits Department of Administration PO Box 110203 Juneau, Alaska 99811-0203 POSITION STATEMENT: Discussed the pay ranges of state positions. Carolyn Floyd, Mayor City of Kodiak PO Box 84 Kodiak, Alaska 99615 POSITION STATEMENT: Suggested an amendment to SB 137. Val Koeberlein, Finance Director City of Homer 491 E Pioneer Avenue Homer, Alaska 99603 POSITION STATEMENT: Agreed with Ms. Floyd's statements. Claudia Douglas National Education Association-Alaska 114 Seward Street Juneau, Alaska POSITION STATEMENT: Supported SB 137. Richard Barlow Mat-Su School Employees HCO 2 Box 7550 A-Z Palmer, Alaska POSITION STATEMENT: Supported SB 137. Bill Munroe Classified Employee of Mat-Su 2950 Mariann's Place Wasilla, Alaska 99654 POSITION STATEMENT: Supported SB 137. Maryjane Murphy University of Alaska PO Box 3185 Homer, Alaska 99603 POSITION STATEMENT: Supported SB 137. Michael Daugherty City of Homer 4060 Heath Street Homer, Alaska 99603 POSITION STATEMENT: Supported SB 137. Gary Bloomquist City of Kodiak PO Box 1397 Kodiak, Alaska 99615 POSITION STATEMENT: Supported SB 137. Corky McCorkle PO Box 1397 Kodiak, Alaska 99615 POSITION STATEMENT: Supported SB 137. Karen Pennington PO Box 5766 Ketchikan, Alaska 99901 POSITION STATEMENT: Supported SB 137. Mike Haddix 83 Mt. Ash Heights Ketchikan, Alaska 99901 POSITION STATEMENT: Supported SB 137. Dale Robbins 3710 Hillside Road Ketchikan, Alaska 99901 POSITION STATEMENT: Supported SB 137. Jackie Kline PO Box 895 Valdez, Alaska 99686 POSITION STATEMENT: Supported SB 137. Jim Chambers, KPCLC PO Box 3386 Soldotna, Alaska 99669 POSITION STATEMENT: Supported SB 137. Carol Baldridge Department of Motor Vehicles PO Box 3773 Soldotna, Alaska 99669 POSITION STATEMENT: Supported SB 137. Chris Rankin, FWP PO Box 2745 Soldotna, Alaska 99669 POSITION STATEMENT: Supported SB 137. Lucy Hope PO Box 870887 Wasilla, Alaska 99687 POSITION STATEMENT: Supported SB 137. ACTION NARRATIVE TAPE 95-30, SIDE A SB 115 UNIFORM INTERSTATE FAMILY SUPPORT ACT Number 002 CHAIRMAN GREEN called the Senate Health, Education and Social Services (HESS) Committee to order at 9:10 a.m. and introduced SB 115 as the first order of business before the committee. GLENDA STRAUBE, Director of the Child Support Enforcement Division (CSED), informed the committee that the Administration has identified as a priority, a welfare package which is cost effective, equitable, and ensures that the needs of children are met. Child support is a critical portion of welfare reform. SB 115 addresses interstate collections which are the most difficult cases in which to collect. She noted that interstate collections comprises 44 percent of the division's caseload. She said that most non-custodial parents know that crossing state lines is the best manner in which to avoid supporting their children. The federal government has recognized this and the Uniform Interstate Family Support Act (UIFSA) has already been passed by approximately 21 states. Most other states will be passing UIFSA this session. SB 115 provides a tool to collect in those interstate cases as well as minimizing the confusion with multiple orders. Ms. Straube explained that SB 115 would end multiple state orders; the bill defines a continuing exclusive jurisdiction state. The bill also provides a long arm jurisdiction allowing the division to reach out-of-state obligors. SB 115 would allow administrative actions in paternity modifications and enforcement of child support orders. In response to Chairman Green, Ms. Straube explained that often the courts have to be involved in particular, when the support order comes from the court. She commented that some states must have everything go through the court. Any time there are modifications to an order which was originally established through the court, those modifications must also go through the court; the court has a tremendous backlog. Ms. Straube explained that CSED uses the same guidelines and rules as the court which is why SB 115 would allow administrative actions in paternity modifications and enforcement of child support orders. Usually when someone is out-of-state, the income withholding takes time and often many individuals have moved on to another job. SB 115 would allow direct income withholding. She noted that there is a portion of the bill which deals with federal forms, computer networks, and others which are all aspects of efficiency. The elimination of the multiple orders alone is reason enough to pass SB 115. Ms. Straube predicted that CSED would increase their collections by approximately $170,000. Number 119 SENATOR LEMAN asked if SB 115 was the same bill that was before the legislature last year and if so, what happened with that bill. GLENDA STRAUBE said that last year's bill did not pass. ART PETERSON, Attorney with Dylan and Finley, informed everyone that he was appearing in his capacity as a Uniform Law Commissioner for Alaska. In response to Senator Leman, SB 115 is the same bill as last year's with a few technical changes. That bill of last year was stuck in committee due to other matters that seemed of higher priority and the bill was never heard again. SENATOR LEMAN inquired as to the significance of the technical changes to the bill; would this create difficulties when applied nationally? ART PETERSON said that if everyone begins from the same base. For example, Alaska has certain drafting requirements which are non-substantive and would not create a significant deviation from the national version. Other states have similar requirements. The greatest degree of uniformity is always attempted in order to achieve the interstate benefit from these acts. SB 115 is practically identical to the national version. Mr. Peterson noted a slight difference in the definition of state which does not specifically refer to Indian tribes however, that issue could be dealt with in other ways. The Chair of the drafting committee of the Uniform Laws Conference indicated that the difference in definition is not a significant deviation that should hold up the act. GLENDA STRAUBE pointed out that the federal government has asked states to pass this act and the Congressional House of Representatives has passed out their welfare reform legislation, including child support. With that passage, UIFSA is being mandated. Number 184 ART PETERSON informed the committee that the drafting committee of the National Conference began work on this issue due to the Congressional action of 1975, 1984, and 1988. The National Conference addressed support guidelines, enforcement procedures, wage withholding, tax intercepts, and credit reporting which are all federally required. As the drafting committee worked on the project, the need for a comprehensive revision of the Uniform Reciprocal Enforcement of Support Act (URESA) became more apparent. Every state and jurisdiction has adopted URESA; now they would all be adopting UIFSA. The main beneficiaries of the adoption of UIFSA would be the children. Mr. Peterson noted that the system would be less confusing, more efficient, and most importantly there would less conflicting court orders. Multiple court orders has been a major problem under URESA. SB 115 assures that a court which obtains jurisdiction would keep that jurisdiction. The more efficient system should benefit the government agencies. With regards to Mr. Peterson's statement that the children would benefit, SENATOR LEMAN asked if the children would actually receive more money or would this be a timing issue? ART PETERSON explained that typically the amount owed by the debtor parent is substantially more than AFDC receipts. Therefore, the child would benefit and benefit earlier without the uncertainty of the current system. SENATOR LEMAN noted that the fiscal notes are prepared with regards to the bill's impact on the state. There is probably a cash flow that far exceeds the amount designated in the fiscal note that would be a benefit to children. GLENDA STRAUBE explained that the fiscal note shows the money that would come back to AFDC, but the fiscal note does not illustrate the money returned to the children. In response to Senator Leman, Ms. Straube said that half of CSED's cases are AFDC which would assume that the other half would be a similar amount. Number 253 MARILYN MAY, Assistant Attorney General for the State of Alaska representing CSED, informed the committee that she had assisted in the drafting of SB 115. She reiterated the importance of eliminating multiple orders with UIFSA. Under UIFSA, one state would have continuing exclusive jurisdiction. UIFSA also sets forth the rules determining which state has the continuing exclusive jurisdiction. Furthermore if an obligor moves to another state, the new state can only enforce the order while the original issuing state still has the continuing exclusive jurisdiction. She reiterated that this bill would eliminate much time and confusion expended in dealing with multiple orders. SB 115 would up date the current situation of the law regarding child support. SENATOR SALO inquired as to the degree that UIFSA would deal with custody determinations. MARILYN MAY informed Senator Salo that UIFSA deals strictly with child support and spousal support, UIFSA does not deal with custody determinations at all. SENATOR SALO asked how the state of jurisdiction portion of SB 115 would affect the Laura Bach case. MARILYN MAY was not familiar with the child support aspects of the Laura Bach case. That case had conflicting multiple court orders from multiple states; that type of situation in a child support setting would be eliminated under UIFSA. SENATOR SALO asked if knowing which state has jurisdiction during custody battles was an issue. GLENDA STRAUBE replied yes, there is similar confusion across state lines with custody battles as well as child support matters. SENATOR SALO inquired as to why that issue had not been dealt with nationally. ART PETERSON mentioned that the National Conference is currently working on a project to revise the Uniform Child Custody Jurisdiction Act which should be completed in 1996. In regards to Senator Leman's earlier question, GLENDA STRAUBE explained that the division would collect $340,000 total, of which half would go to the state. Ms. Straube assumed that if half of the cases were AFDC, then approximately $340,000 goes to the children because that amount would match the AFDC amount. SENATOR LEMAN pointed out that the amount was actually $680,000 per year, but this fist year is half the fiscal year. CHAIRMAN GREEN commented on the potential for the system to become more efficient. JOAN CONNORS, from the Ombudsman's Office, said that Stuart Hall is in Juneau with introductory comments. Number 348 STUART HALL, Ombudsman, informed the committee that the Office of the Ombudsman supported this legislation. He noted that he had addressed a letter to the committee on April 5th. The enactment of this legislation would assist many of those who have sought the help of the Ombudsman regarding CSED. From the fiscal year 1994 to date, the Ombudsman has assisted approximately 1,661 individuals with complaints against CSED with a significant portion of that being custodial parents who rely on CSED to collect child support from an out-of-state parent. Mr. Hall emphasized that the enactment of UIFSA would streamline case establishment which would result in quicker collections. He urged passage of SB 115. BEA HAGEN, Deputy Ombudsman, emphasized the importance of direct wage withholding in other states. Many of the complaints received in the Ombudsman's Office are regarding the lengthy time that CSED takes with wage withholding. Often this is not CSED's fault because the division cannot do this directly, the process can be lengthy. SB 115 would make direct wage withholding possible. ART SNOWDEN, Administrative Director of the Judicial Branch of Government, stated support for this legislation from the Judiciary. The multiple laws among states are complex and can lead to problems. Furthermore, the Judiciary also agrees that the only manner in which to change an order that has been imposed by a judicial officer is to return to court which increases the courts work load. The system in SB 115 would be fairest to all people. SENATOR LEMAN moved that SB 115 be moved out of committee with accompanying fiscal notes. Hearing no objections, it was so ordered. SB 116 PATERNITY; CHILD SUPPORT ENFORCEMENT Number 406 CHAIRMAN GREEN introduced SB 116 as the next order of business before the committee. GLENDA STRAUBE, CSED, stated that SB 116 would provide for the administrative establishment for paternity. Currently, all paternity cases must be handled by the Alaska Court System which is backlogged. CSED does the genetic work and identifies the punitive father, then the case goes to the court. Only after the case returns to CSED can the amount of money owed be determined and collections received. Paternity establishment must be determined before collections can take place. Ms. Straube pointed out that the federal regulations have changed and in order for CSED to conform, CSED must establish 75 percent of their orders in six months and 90 percent of their orders in 12 months. She reiterated that in order to do the orders, paternity must be established first. Establishment of paternity alone could take two and half to three years. She commented that CSED is doing other administrative things in an attempt to solve this problem. Currently, the court portion of this could take up to six months. Under SB 116, CSED would use the same standard as the court which is already the case. She explained that a case is not sent to the court unless it meets the standards set forth in AS 25.20.050. Those standards review if there has been a voluntary acknowledgement or if there is a 95 percent chance or better through the genetic test that the person is the father. SB 116 would still allow due process with the option of judicial review. Ms. Straube reiterated that this legislation would alleviate some of the backlog in the courts. She indicated that most people would not use judicial review if CSED uses the same standards as the court in the establishment of paternity. Currently, there are 3,200 cases in progress regarding the establishment of paternity, approximately 70 percent of those cases are AFDC cases. SB 116 would eliminate at least six months of the process and perhaps even more. Ms. Straube asserted that CSED would not be able to meet the federal standards unless this legislation is passed as well as many in-house and inter- governmental changes. Ms. Straube discussed a scenario in which a child born in wedlock is the child of a third person who acknowledges that he is the father; everyone agrees that the third person is the father. By law, CSED cannot accept those affidavits, only the court can accept those. Currently, those people would have to go to court and file a paternity action. SB 116 would allow CSED to take the word of these three people through affidavit; there are other similar situations in which SB 116 would help. Ms. Straube did not foresee any problems with SB 116 nor the process. SENATOR SALO inquired as to the definition of tribunal. AL ZANGRI, Chief of the Bureau of Vital Statistics for DHSS, directed the committee to page 2, line 18 of the bill. SENATOR SALO asked if the application of this referred to CSED. GLENDA STRAUBE replied yes, CSED is the administrative agency; we would be the tribunal. Number 481 SENATOR SALO expressed concern with the six month period in which a case would sit in the court, but the two years in which it may take to establish parentage would be of more concern. What are some of the things being done to deal with this problem? GLENDA STRAUBE stated that a portion of the governor's welfare reform deals with co-location. The goal is to place people in the public assistance office during intake hours in order to do the affidavits correctly as well as doing the genetic testing. Doing an affidavit through the mail could take up to six months. Ms. Straube noted that the Attorney General's Office is also making some changes to expedite the process on their end. CHAIRMAN GREEN asked if there would be any point in the process in which a persons' rights would be infringed upon. GLENDA STRAUBE clarified that people would have the same rights that they currently do. Currently, the process begins with an informal hearing and then a formal hearing and finally, if the person remains unsatisfied, they could go to court. SENATOR SALO mentioned the possibility of the mother being unwilling to name the father; why would that be? GLENDA STRAUBE informed the committee that of the 3,200 paternity cases, 2,600 of those have names of the father and 639 do not have the father's name. Of those 639 cases without names, 482 are AFDC cases. In her opinion, women do not name the father for reasons ranging from fear to the desire to not have the father be a part of their life. Some women do not feel the need to name the father at a particular time. Ms. Straube also proposed the psychology of protection as another reason not to name the father. SENATOR SALO commented that in all the reasons Ms. Straube had cited the notion that women do not name the father of their children in order to receive more AFDC was not mentioned. GLENDA STRAUBE did not believe that a mother would collect more AFDC if she did not name the father. Ms. Straube explained that the family receives the first $50 of any child support. They would also receive anything over the grant. REBECCA EAMES, representing the Division of Public Assistance, clarified that if the child support exceeds the AFDC needs standard, then the mother would be denied AFDC. If the amount of the child support is less than the AFDC needs standard, the mother would receive $50 and CSED would receive the remainder. Number 538 RICK KRUEGER, testifying from Fairbanks, related his personal experience in which he was notified that CSED was looking for him in 1986. He called CSED and was informed that a woman whom he had not seen in seven years was claiming that he was the father of her child. He cooperated with CSED and filled out the paperwork. CSED said that they would contact Mr. Krueger regarding taking a blood test. Six years later, CSED is taking Mr. Krueger to court for six years of arrears for child support and welfare which total $65,000. He noted that the amount was reduced by half with the help of an attorney. Mr. Krueger said that CSED is currently taking half of his take home pay for the arrears. He explained that he did not have a problem with paying the child support, but he felt that he should only have to pay from the time he received the results of the blood test. He asserted that CSED recognized their fault in this manner, but they did not care and wanted the arrears. CSED is a bureaucracy that is out of control and it does not answer to anyone. He noted that he had talked to various legislators and there seems to be nothing that can be done. Mr. Krueger expressed frustration that his situation took six years when he remained in the same state. In conclusion, Mr. Krueger recommended the state taking responsibility in a timely manner in 90 days. If a mother does not name a father when she applies for welfare, the mother should not receive benefits. The father should be named immediately. CHAIRMAN GREEN asked Mr. Krueger if he was ever informed that he had a child before CSED was in the matter. RICK KRUEGER said he was not and added that he is not on the birth certificate. CHAIRMAN GREEN recognized the concern with late notifications which create large arrearage. That type of situation does seem punitive and unfair, but it is not necessarily the state's responsibility to deal with this. SENATOR SALO pointed out that although one may sympathize with Mr. Krueger, meanwhile someone is raising his child and it takes money to do so. The larger issue here is the care of the child which should be the parents responsibility, but the state should be available for assistance if necessary. GLENDA STRAUBE explained that the lengthy time in which someone could be notified of their child is not in the purview of CSED, it is part of federal regulations. However, the amount of time between any blood test and the establishment of paternity, which SB 116 would help, as well as the time between the establishment of paternity and their notification of the amount owed should be controlled. SENATOR LEMAN said that it did not seem unfair to require the father to participate in raising their child, it is proper. TAPE 95-30, SIDE B Number 590 SENATOR LEMAN indicated that for a woman to name a father years after the child has been born is unfair; the father has been denied the opportunity to be a father for that time. There should be a reasonable amount of time to receive back collection, after that time the back collection would not be possible. Is there such a limitation in federal or state law? GLENDA STRAUBE did not know. In response to Senator Leman, MARILYN MAY did not believe there was a statute of limitations until after the emancipation of the child. She noted that most courts have went back six years from the date the paternity complaint was filed; collection of arrears are allowed that far back. Ms. May did not believe there should be a limitation. When a man has unprotected sex it is his responsibility to know the consequences. It is not appropriate to penalize the child and the mother for the fact that the father did not know and did not check the results of his action. SENATOR LEMAN said that he did not have a problem with the father taking responsibility, but if the father is not informed of his child that is another situation. In this case, the father has lost an opportunity to be a father, even a non-custodial father. He felt that the mother should take on some responsibility with regards to notifying the father of the child. MARILYN MAY reiterated that in most cases the father is held for six years of arrears prior to the time he was notified of the paternity complaint which seems to be the limitation for what the mother can hold the father responsible. Ms. May opposed the penalization of the child, the loss of support of the child, because the mother had waited a certain number of years to inform the father of his child. Ms. May recognized the unfairness to which Senator Leman was speaking however, a greater unfairness would result if a father could escape responsibility for a child entirely. GLENDA STRAUBE specified that these cases often happen because the mother was not on AFDC when it occurred and paternity was not established at the time. The problem begins when the mother goes on AFDC, then CSED takes the case and the mother is required to name the father. In response to Chairman Green, MARILYN MAY clarified that even in a case without AFDC, a mother can apply for services and name an alleged father and go through the paternity establishment process. Ms. May did not know how far back the support award could go; the courts have differed in the allowed arrears prior to the time the mother requested services. Number 518 SENATOR SALO was confused because she thought there was a six year back collection limit. MARILYN MAY said that was true for cases involving AFDC. Ms. May explained that when a mother applies for AFDC she is required to assign her right to collect child support to the state, who requires the mother to name the father. There are no general requirements that a mother must name a father in order to receive AFDC. Ms. May pointed out that there is leverage to make the mother name the father because she could be determined by the court to be non-cooperative. In an AFDC case, the state has the right to the repayment of those benefits that were paid to the mother which is why the courts would go back six years from the claim made by the state. Ms. May offered to check on the information regarding the court's stance in those cases that do not involve AFDC. GLENDA STRAUBE asserted that regardless of the issues that have come up today, this bill would help establish paternity and notify these people faster. SENATOR SALO said that the bill is a step in the right direction in order to alleviate some of the court time involved and make the establishment of paternity an easier process. All the other issues discussed are important to other pieces of legislation. In order to clarify for Chairman Green, GLENDA STRAUBE explained that in AFDC cases back arrears can go back to six years, but in non-AFDC cases the back arrears would depend upon the court. MARILYN MAY agreed and added that most of the courts have not went back for arrears in non-AFDC cases. CHAIRMAN GREEN asked if CSED and AFDC would go after the non- custodial parent on their own for fees that CSED or AFDC did not have anything to do with paying in those years. GLENDA STRAUBE believed that CSED and AFDC would not. Ms. Straube offered to get that information to the committee members. Ms. Straube emphasized that issue does not change SB 116. MARILYN MAY pointed out that administrative establishment of paternity would happen upon the advocation from a mother, custodian or a legal custodian of the child or from the state. The one person missing from that list would be the punitive father who is presumed to be the father of the child by operation of law, if the man and woman are married. In some cases the husband wants paternity disestablished. SB 116 would not allow for that type of case, the bill only addresses the normal establishment of paternity. SENATOR SALO concluded that such cases would remain in the purview of the court. MARILYN MAY said yes, this type of case does not require an administrative establishment of paternity. Such cases could be done in court. Number 441 AL ZANGRI, Bureau of Vital Statistics for DHSS, stated that SB 116 focuses on two primary issues: the three party affidavit and the establishment of the administrative procedure for the establishment of paternity. The three party affidavits recognized are voluntary establishments of paternity by everyone involved. Currently in statute, there are two party voluntary affidavits of paternity that are being used. He informed the committee that approximately 30 percent of the births in Alaska are to single mothers which means that approximately 3,100 children have one named parent. Approximately 1,400 affidavits are processed in voluntary paternity every year. The remaining go through involuntary processes through the court, SB 116 would allow CSED to utilize an administrative procedure. Mr. Zangri noted that the other dissatisfied clients would fall under the three party affidavits. Under current law, three party affidavits cannot establish paternity. Approximately 300 or 400 people are affected by three party affidavits. By the time the Bureau of Vital Statistics receives a call, the client is very upset. Often there is nothing that can be done. When a man and a woman remain married after many years of separation, if the woman has a child by another man, the woman's husband must be placed on the birth certificate and must be give parental rights although, he is not the father. The husband is legally the father of the child. Mr. Zangri discussed various scenarios in which the biological father is not legally recognized as such. The bill would help these situations. The department supports SB 116. GLENDA STRAUBE informed the committee that she could have answers to the committee's questions within an hour. MARILYN MAY stated that CSED does not seek back payments prior to the time of the paternity complaint in cases that do not involve AFDC. If there are cases in which the courts have went back with arrears, then it is very rare and does not represent the norm. GLENDA STRAUBE commented that the reason for that is that AFDC is a federal regulation that CSED does not control. BEA HAGEN informed Mr. Krueger that could call the 800 number for the Office of the Ombudsman in Anchorage since Fairbanks does not have an office. SENATOR LEMAN moved that SB 116 be reported out of committee with individual recommendations. Hearing no objection, it was so ordered. CHAIRMAN GREEN acknowledged that there were people present to testify on SB 137 who were from out of town. She informed everyone that SB 137 would probably not be completed today. The committee took an at ease from 10:19 a.m. to 10:20 a.m. SB 137 RETIREMENT INCENTIVE PROGRAM Number 366 CHAIRMAN GREEN introduced SB 137 as the next order of business before the committee. SENATOR SALO noted that a good portion of SB 137 was in SB 132, therefore, it might be more appropriate to focus on the portions of SB 137 that are not in SB 132. The portion of SB 137 that was not present in SB 132 is the state employees participation in the program. CHAIRMAN GREEN agreed. SENATOR SALO felt that those who wanted to testify would possibly forego their opportunity to testify if they knew that the committee intended to pass the bill out of committee. SENATOR MILLER said that he had an amendment which would authorize the court system to include the executive director in the retirement incentives program (RIP). This provision was in last year's bill, although it is not in the governor's bill this year. He understood that it was the intention of the Chair to move the bill today. Senator Miller moved that Amendment 1 be adopted. Hearing no objection, Amendment 1 was adopted. SENATOR SALO reiterated that SB 132 was passed out of HESS last week which included all the school district employees. SB 137 is essentially the same process of early retirement. Perhaps, the discussion today should focus on the state employees included in SB 137. She noted that the only conflict with SB 137 would be regarding the possibility of the state saving money. Number 321 ANNALEE MCCONNELL, Director of the Office of Management & Budget (OMB), emphasized that this retirement incentive program had been developed differently than past RIPs in order to ensure saving money and helping with the needed downsizing and restructuring. One difference in this RIP is that it is not an across the board program. This RIP is only available if a department has determined that its plans for restructuring, downsizing, and saving money can be accomplished by using the RIP. She explained that RIP would be used in a strategic area with very stringent savings calculations. The calculations would include employer costs, training costs, and specialized equipment costs. Ms. McConnell differentiated between the two scenarios in which RIP would be used. The first scenario would involve a vacant position due to downsizing. She expected that type situation to utilize RIP the most. The savings in that case would be in eliminating the position all together. She clarified that OMB would eliminate the vacant position in the following budget cycle. Another scenario would involve the replacement of a position, but the level of scrutiny would be extremely high in order to ensure real savings. She ensured everyone that the costs taken into account would be very comprehensive in order to have a true savings. Another change to tighten up the savings was to demonstrate the savings in a three year period after the position was replaced versus the five year period of past programs. Ms. McConnell also pointed out that the budget environment currently is very different than the budget environment of prior RIP bills. Furthermore, the need for management tools to accomplish downsizing has changed as well. CHAIRMAN GREEN asked if there were many positions in state government that allow the range of the Department of Corrections in which a position could start at a 11A range and move up to a 15J range; are there some positions that simply begin at a certain range that cannot be changed. ANNALEE MCCONNELL did not know the number of situations with the wide range in pay ranges. Number 234 BOB STALNAKER, Director of the Division of Retirement & Benefits for the Department of Administration, explained that the majority of state positions begin at a 15A going through the longevity step. There are a lot of positions such as a Retirement Specialists who begin as a Retirement Specialist 1 and moves up to a Retirement Specialist 3. He noted that moving up to Retirement Specialist 3 was gained by years of learning the systems and counseling. There are a lot of such positions which seem to be common to many departments in state government. He stated that there was some value to not tying the RIP to the elimination of a position, but replacing the position with a lower paid person. SENATOR SALO agreed and explained that school districts save money by replacing positions with a lower paid person. She noted that eventually, the new hire would move up to the higher range anyway. Senator Salo pointed out that the scrutiny provision was missing from the last bill. She felt that the scrutiny provision improved the bill. SENATOR LEMAN commented that he had voted for a RIP bill in 1989, after which he was not convinced that this program saved money. This RIP is much better and will work if the commitment is honored. He emphasized that the key to the success of the program is the commitment to the program. If a program can be designed and there is commitment to it, then the program could work. Senator Leman would then support such a program. ANNALEE MCCONNELL informed Senator Leman that with regards to her commitment, she has had experience in saying "No". She informed the committee that she was the Director of Management & Budget in Anchorage when the RIP bill came up in the late 1980s. At that time, Anchorage elected not to participate in the RIP. She emphasized that she would not hesitate in saying no if a department's plan does not save money or the savings were too speculative. She explained that since the majority of positions would be eliminated under this RIP, the uncertainty is not so close or speculative. Number 171 SENATOR LEMAN inquired as to the up front costs of RIPs which would pose a concern. BOB STALNAKER pointed out that SB 137 provides that the employer must demonstrate savings. The employer pays the cost by virtue of that savings. Mr. Stalnaker explained that if an employer can show a savings over three years by utilizing RIP, then those costs can be paid over the same three years. There is no front loading; the agencies must maintain within the approved budget. The agencies must take a portion of their savings to pay the RIP costs before the person qualifies. CHAIRMAN GREEN stated that she intended to move SB 137 out of committee today. Those who are not in support of the bill and wish to testify should come forward. Chairman Green informed everyone who had signed up to testify that they would be shown in support of SB 137, unless they wished to speak in opposition to the bill. She proceeded to ask if any of the sites on teleconference wanted to testify. CAROLYN FLOYD, Mayor of the City of Kodiak, informed the committee that Kodiak is facing a real dollar reduction in their budget and they are looking for additional savings. She noted that the committee should have a letter from Kodiak in support of SB 137. She emphasized the need for an amendment that would make eligibility for three years begin July 1, 1995 or not later than October 1, 1995. She explained that this earlier opening date with an extended length of eligibility was due to the increased turnover caused with this program. Under the proposed program, the City of Kodiak would have to hire and train 25 percent of their entire work force, 16 employees would be eligible for early retirement. Many of these positions are a more experienced and knowledgeable level. Furthermore, a longer period would allow the counsel and management the opportunity to evaluate personnel resources and restructure the city's operations. She noted that the reduced hours of vacation had not been calculated which would also affect Kodiak's budget. CHAIRMAN GREEN asked if those comments were included in her letter. CAROLYN FLOYD replied yes. CHAIRMAN GREEN said that suggestion would be passed on to the Finance Committee, the next committee of referral. BOB STALNAKER stated that this concern of Ms. Floyd is an issue for many employers. He pointed out that another difference between SB 132 and SB 137 is that SB 137 includes political subdivisions not just school districts. The delayed process is present in order to provide the most efficient staffing needs so as not to delay retirement or the employers ability to enter necessary contracts. The staffing needs could be reviewed to allow the political subdivisions the same amount of time as the state. Number 072 VAL KOEBERLEIN, the Finance Director for the City of Homer, agreed with Kodiak's comments. The extended time would afford the city the opportunity to restructure. He informed the committee that if Homer had to fill 11 positions all at once, they would still save $370,000 over three years. With the extended time in which some of the positions would be eliminated, the savings would increase to approximately $700,000. SENATOR SALO moved that CS SB 137(HES) be reported out of committee with individual recommendations. SENATOR LEMAN objected in order to point out that the last line on page 1 is repeated on the top of page 2. He recommended that technical problem be noted for clean up. Senator Leman removed his objection. CHAIRMAN GREEN asked if there was further objection. Hearing no further objection, CS SB 137(HES) was moved out of committee with individual recommendations. There being no further business before the committee, the meeting adjourned at 10:44 p.m.