SB 134-CHILD SUPPORT AWARDS    1:31:38 PM Chair Davis announced that the first order of business would be SB 134, Child Support Awards. 1:35:29 PM SENATOR ALBERT KOOKESH, sponsor of SB 134, explained that this measure would put the Child Support Civil Rule 90.3 guidelines into statute. Alaska Supreme Court Civil Rule bills can only be changed every four years. One of the advantages of putting Child Support Civil Rule 90.3 into statue is that it can then be changed at the whim of the legislature. He summarized that SB 134 addresses the amount of money a child could receive through custody cases. DOROTHY SHOCKLEY, staff to Senator Kookesh, reported that SB 134 changes how child support is allocated from a percentage-of- income system for only the non-custodial parent, to an income shares model where both parents' income is used to calculate the amount of child support. The bill came about due to frustrations following the statewide review process of Rule 90.3 in 2008. Ms. Shockley related that she was advised to put the guidelines into statute so that people could have a voice in custody support hearings. The Alaska Supreme Court admitted that it was a substantive law and could be replaced any time. MS. SHOCKELY added that Senator Kookesh's office has received many calls from people who feel there are problems with custody procedures and guidelines. It was suggested that the new guidelines use the income shares model. She noted that 35 states consider the income of both parents in determining child support payments. She said the main goal of the legislation is to give people a voice and to be fair, as well as provide for the child's best interest. 1:38:11 PM CHAIR DAVIS requested a sectional analysis. MS. SHOCKLEY described the information in the sections of the bill. She related that Section 25.28.010 provides guidelines for calculations regarding primary physical custody cases. It also contains an economic table. Section 25.28.020 provides child support guidelines for shared, divided, and hybrid custody awards. Section 25.28.030 provides for a margin of error in the economic table where exceptions to support awards may be needed. Section 25.28.040 addresses health care expenses. Section 25.28.050 provides confidentiality annual income documentation requirements. Section 25.28.060 provides for travel expenses. Section 25.28.070 provides modification to child support awards. Section 25.28.080 addresses third-party custody. Section 25.28.090 provides for dependent tax deductions. Section 25.28.300 is the definitions section. 1:42:55 PM MS. SHOCKLEY read from the following sponsor statement:  SB 134 puts the Child Support Civil Rule 90.3  guidelines into statute. In 1987, the Alaska Supreme  Court enacted Civil Rule 90.3. The Supreme Court  admitted this was a substantive law that the  Legislature could replace at any time. In the 25 years  since then, the legislature has not replaced civil  rule 90.3 with an actual law. This bill proposes to  correct that long-standing deficiency.   One of the major problems with having the child  support guidelines set by a court rule is the people  affected by current guidelines have not had the  opportunity to speak to the individuals with the power  to make changes. Instead every four years they are  encouraged to write letters or testify before a review  committee made up of lawyers and judges who then  submit their recommendations to the Supreme Court  Justices who make the final decisions. With the rule  in statute, individuals will have the opportunity to  speak to lawmakers who have the power to make changes.  Proposals to amend can be made in the future through  the legislative process.   The bill proposes enactment of the current rule into  statute with the exception of how the child support  obligation is calculated. Currently, the non-custodial  parent's support obligation is based solely on his or  her income, without regard to what the other parent  makes. With this bill it will be changed to an income  shares model which calculates support as the share of  each parent's income estimated allocation to the  child, if the original household were intact.   According to 2005 statistics (Legislative Research  Report, November 2010):   Twenty four (24) states establish their child support  guidelines statutorily through their legislature while  16 states use court rule only, and 11 states use a  combination of rule, commission and or agency.   Thirty five (35) states consider the income of both  parents in determining child support payments.   SB 134 changes the word 'court' to 'tribunal' in some  cases back to 'court' and adds number (6) to the  definition in Sec. 25.28.300 (page 18) to read 'tribunal means the superior court or the child  support services agency created in AS 25.27.010.' 1:45:38 PM MS. SHOCKELY noted the removal of a section which ordered one or more grandparent to pay child support. Also removed were sections that dealt with the support order form and the commentary. 1:47:18 PM STACY STEINBERG, Chief Assistant Attorney General, Office of Attorney General, Department of Law, addressed legal issues in SB 134. She stated that the Department of Law does not take a position on the bill. She explained that Section 25.28.040, the health care expenses section, requires a definition of "reasonable cost", which is necessary to meet federal regulations. One option is to define it as "the cost of insurance does not exceed 5 percent of the net monthly income of the parent required to purchase insurance." 1:49:44 PM MS. STEINBERG addressed a federal provision which states that child support cannot be retroactively modified, which is addressed in two sections of SB 134, Section 25.28.050 and Section 25.28.070. The first instance refers to when a parent can request information about the other parent's income. A sentence on page 15, in lines 29 - 31, "If a party has made a reasonable demand for documentation under this subsection, a tribunal may modify a child support arrearage retroactively," violates a federal law on retroactivity. She recommended deleting that sentence. MS. STEINBERG said the second instance where child support cannot be retroactively modified is on page 16, lines 24 and 25. There is a violation of federal law in the sentence, "A tribunal may not modify a child support arrearage retroactively, except as authorized by AS 25.27.1666(d) and AS 25.28.050(b)." This could be corrected by deleting "and AS 25.28.050(b)." MS. STEINBERG addressed the advantages of having a delayed effective date of about a year. The new legislation changes the formula for calculating child support. Potentially, this could result in a large number of modifications. She spoke of court modifications that would be necessary. There are currently about 20,000 existing child support orders, of which half are expected to request some sort of modification. Of those, half would be court modifications and would be an increase of up to 5,000 from 700 a year. Regulations would also need to be changed, which would take time. She suggested a one-year delay for the effective date. 1:55:37 PM MS. STEINBERG addressed a fourth issue. Federal law requires revisions to Child Support Guidelines every four years to ensure that guidelines meet current regulations, reality, and the economy. The revision process is currently conducted by the Court System; however, if SB 134 becomes law, the Court System would no longer be responsible for that service. That is another issue to consider before passage of SB 134. 1:57:33 PM CHAIR DAVIS asked if the sponsor agrees with the changes. CHAIR KOOKESH said he did agree with the changes and pointed out that amendments addressing the changes are forthcoming. He had no problem with a delayed effective date. He stressed the importance of the income share model, which is the ultimate goal of the bill. MS. SHOCKLEY explained the fiscal notes. Child Support Services will need an additional 24 temporary staff for a total of $6 million, $4 million of which would be from federal receipts and $2 million in general fund. The Department of Law fiscal note shows an increase in 19 temporary staff the first year in order to process modifications. 2:00:36 PM CHAIR DAVIS requested more information about the effect of the bill on Court System positions. NANCY MEADE, General Counsel, Alaska Court System, addressed a potential fiscal note from the Alaska Court System. She anticipated a need for temporary employees to address the expected influx of parental requests for modification of custody orders. She said she thought changing the current four-year review responsibility to the legislature would not save the court money because it does not cost money. The Chief Justice appoints an existing sitting judge to chair the review committee, which is comprised of six or seven volunteer attorneys. 2:04:41 PM CHAIR DAVIS suggested that the amendments could be incorporated into a new Senate Health and Social Services Standing Committee CS, which would give departments time to work on fiscal notes. 2:05:58 PM SCOTT CAULDER, testifying on behalf of himself, spoke in favor of the bill. He shared a negative personal experience related to child custody. He referred to a letter from Beth Adams which he said contains excellent suggestions. He thought SB 134 would correct some of the problems with the guidelines and provide greater justice and fairness. He suggested a revision on page 18, lines 18 and 26, to change "shall" to "may". 2:08:42 PM SENATOR KOOKESH called the bill simple, but complicated. He was amazed by the cost of the fiscal notes. He said his intent is to benefit the child and he hoped the fiscal note would not discourage passage of this legislation. He said he would continue to work with the Attorney General's Office on the amendments. He said he had no problem with a delayed fiscal note by the Alaska Court System. 2:10:48 PM SENATOR DYSON asked if there were negative impacts from this type of legislation in any other states and if there was any opposition in Alaska to this bill. SENATOR KOOKESH replied that there had been no opposition to the bill. He said the growing trend is the shared model, as depicted in the bill. SENATOR DYSON asked if there had been any challenging suits in other states. SENATOR KOOKESH didn't think so. CHAIR DAVIS offered to provide that information at the next meeting. SB 134 was heard and held.