SB 134-CHILD SUPPORT AWARDS  2:02:59 PM CHAIR FRENCH announced the consideration of SB 134, "An Act relating to child support awards; and repealing Rule 90.3, Alaska Rules of Civil Procedure." 2:03:19 PM DOROTHY SHOCKLEY, staff to Senator Kookesh, introduced SB 134 by explaining that it puts Court Rule 90.3 into statute, and changes how child support is allocated. The current percentage- of-income model that considers just the income of the non- custodial parent will change to an income share model where both parents' income is used to calculate child support. She noted that a section was removed that ordered a grandparent to pay child support. Sections dealing with the support order form and the commentary were also removed. She explained that the bill came about due to frustration with the child support review process under Court Rule 90.3, because it appeared that people did not have a voice. In 2008 she was told that the best way to change the process was to put the rule into statute. MS. SHOCKELY relayed that the sponsor's office receives a number of calls from people who do not mind paying child support, but feel there are problems with the system. This legislation seeks to give people a voice, be fair, and provide for a child's best interest. 2:05:42 PM SENATOR COGHILL asked for an expanded discussion about the income share model for determining child support. He said he was also interested in looking at ways to include non-monetary things in child support orders. For example, there should be a way to place a value on a contribution of hunting or fishing efforts. 2:07:27 PM DAISY STEVENS, representing herself, Fairbanks, AK, said she always felt that it was unfair for child support to be paid by just one parent. She cited the cases of her two sons and stated full support for changing the standard for calculating child support to include the income of both parents. 2:11:19 PM DIXIE BANNER, representing herself, Wasilla, AK, testified in support of SB 134. She described being penalized in the child support calculation for being a noncustodial parent, and expressed pleasure at not being in the system any longer. 2:14:38 PM MICHELLE BAYLESS, representing herself, Copper Center, AK, expressed sympathy with the previous testimony and said she supports SB 134 if it helps kids. She discussed single parenthood and that noncustodial parents were not required to share the burden. 2:19:28 PM CHAIR FRENCH asked Ms. Shockley if she consulted Legislative Legal about Sections 4 and 5. Section 4 repeals Court Rule 90.3 putting it in statute, and Section 5 addresses the nonapplicability of a two-thirds vote requirement. MS. SHOCKLEY replied Legislative Legal indicated the sections were correct and that they discussed the questions with both the court and the Department of Law. CHAIR FRENCH asked Ms. Meade to explain how changes to Court Rule 90.3 are crafted and how an affected member of the public can get his or her concerns heard. 2:20:34 PM NANCY MEADE, General Counsel, Alaska Court System, Anchorage, AK, explained that in compliance with federal regulations, the state reviews its child support guidelines every four years. The Alaska Supreme Court appoints an eight member committee that meets for about 18 months prior to the four-year deadline to consider whether the Court Rule still results in fair child support awards. She described two ways for the public to comment. At the beginning of the process the meeting is noticed in 32 newspapers statewide and in every courthouse. Comments are submitted and the review committee reads them all before recommending any changes. At that point the proposed changes are noticed and comment is again solicited and thoroughly reviewed. The committee then makes a final decision about any changes. She noted that the process also provides an opportunity for the public to testify telephonically. In addition to the scheduled review, the court rules attorney will consider written and oral suggestions about court rule changes at any time. Those suggestions go to the standing committee on family rules and could eventually go to the Alaska Supreme Court. 2:25:28 PM CHAIR FRENCH asked if the Alaska Supreme Court reviews the proposals or if the review committee has the authority to promulgate the rule change. MS. MEADE replied rule changes absolutely must be promulgated by the court. The review committee prepares a report of recommended changes and the rules attorney, acting as the intermediary, presents the report to the five members of the Alaska Supreme Court along with background information that includes all the public comments. The court then decides whether or not to accept the recommendations. She noted that the last review committee asked the court for interim guidance as to the idea of adopting the income share model, and the court's suggestion was to stick with the percentage of income approach and avoid unnecessary work. CHAIR FRENCH summarized that the idea was dropped when the court expressed little interest in switching to an income share model. MR. MEADE added that the request for guidance was accompanied by a notebook of thoughts on the two approaches and the relative fairness of each one. She discussed the issue of fairness and that it was a matter of perspective unless there was empirical evidence that one model was more fair. CHAIR FRENCH asked what model the court uses when custody is shared equally between the parents. MS. MEADE explained that when custody is shared 50:50, the current rule calls for a calculation of each parent's income with an offset payment that accounts for the difference. In cases where a parent has less than 30 percent custody for one child, the current rule calls for that parent to pay 20 percent of their net income to the custodial parent. 2:31:50 PM CHAIR FRENCH observed that there appears to be ample public input. SENATOR COGHILL asked her to elaborate on the court's discussion and suggestion to stick with the percentage of income model because of fairness. MS. MEADE clarified that the court concluded that the percentage of income approach resulted in child support awards that were appropriate. 2:33:45 PM JOHN MALLONEE, Director, Child Support Services Division (CSSD), Department of Revenue (DOR), offered to answer questions. CHAIR FRENCH asked how many child support orders CSSD monitors. MR. MALLONEE replied the division was actively involved in approximately 48,000 child support cases, but that did not represent the full universe because some do not go to CSSD for enforcement. CHAIR FRENCH asked why a child support order would or would not fall under the jurisdiction of CSSD. MR. MALLONEE explained that one of the parties can ask the court to give the case to CSSD for enforcement or a party can approach CSSD directly asking it do anything from establish paternity to establish a court order to enforce a court order. The agency is able to do all these things administratively. CHAIR FRENCH asked if he had reviewed SB 134. MR. MALLONEE said yes, and their calculations showed that when the combined income is up to $31,000 or $32,000, the noncustodial parent tends to pay more under SB 134 than under the current Rule 90.3. The reverse is true when the combined income is above $31,000 or $32,000; the noncustodial parent tends to pay less under SB 134 than the current Rule 90.3. He clarified that would not apply in every situation. CHAIR FRENCH asked if he had analyzed what would happen to current awards if SB 134 were to pass. MR. MALLONEE explained that because it would be a material change of circumstances, CSSD estimates that more than 20,000 of the current orders would be subject to modification. CHAIR FRENCH asked what the workload is per month. 2:39:26 PM MR. MALLONEE replied the current staff of 14 does about 3,000 modifications in a year. CHAIR FRENCH asked if the bill would potentially create seven years of work. MR. MALLONEE said yes; the fiscal note asks for 24 temporary and 5 permanent positions to accommodate the modifications and the added work to get information from two parties rather than one. CHAIR FRENCH asked if this would affect how the division meets the federal guidelines for child support. MR. MALLONEE answered no; it actually provides more opportunity to meet the federal requirements because each case is subject to modification. SENATOR COGHILL asked how CSSD makes things fair when the noncustodial parent is actually the one caring for the child. MR. MALLONEE explained that the agency can change an order that was established administratively, but cannot make changes to orders produced by the court. Those cases have to go back to the court. SENATOR COGHILL asked how long it takes to change custody. MR. MALLONEE replied it should not take no longer than 30-45 days to change an administrative order, but it takes longer than that to get a new custody order from the court. 2:43:46 PM STACY STEINBERG, Chief Assistant Attorney General, Collections and Support Section, Civil Division, Department of Law, Anchorage, AK, said she was in charge of the section that advises CSSD and represents it in any court actions. CHAIR FRENCH asked if she had any general comments on the bill or the previous testimony. MS. STEINBERG discussed the three formulas for calculating child support under Rule 90.3 in cases of primary custody, shared custody, and divided custody. The primary formula takes a percentage of the noncustodial parent's net income. The shared formula is a more income share approach because both parents' income and the percentage of time each parent has the child is considered. The divided formula is almost a pure offset approach. It applies when each parent has primary custody of at least one child. CHAIR FRENCH asked if she had any comments on the relative fairness of one system compared to the other. MS. STEINBERG said no, but DOL did review the bill looking at the legal requirements under federal law to ensure that CSSD continues to receive federal funds. 2:47:31 PM SENATOR COGHILL asked if the formulas easily accommodate changing family dynamics. MS. STEINBERG confirmed that administrative orders can be changed more quickly than court orders, but that it is incumbent on one or both parents to notify CSSD of a change in custody and ask for the appropriate adjustment. If the order is produced by the court, one or both parents have to go back to the court to get a change of custody. As part of the process the court matches the support amount to the custody arrangement. Court cases move more or less quickly depending on the situation. SENATOR COGHILL said he assumes that would not change if the bill were to become law. MS. STEINBERG said that's correct; the parents would still have to advise the court of the custody change and the court would have to issue a new custody and support orders. Returning to the fairness issue, she suggested that it would be necessary to look at the calculations to see if it was more fair to look at both parents' income. 2:50:53 PM CHAIR FRENCH asked if she had any views on Sections 4 and 5. The repeal of Rule 90.3 and the non-applicability of the two-thirds vote requirement. MS. STEINBERG replied she had not looked at the issue specifically, but her understanding was that those two sections were correct. CHAIR FRENCH said he would check on that a bit more. SENATOR COGHILL said he looked forward to getting more information on the non-applicability section because the constitution says two-thirds vote is necessary for the Legislature to make changes. CHAIR FRENCH said he'd focus on that as well. He asked Ms. Shockley if she had any concluding remarks. 2:51:52 PM MS. SHOCKLEY commented on the 2008 review process and relayed her dismay that just four or five people attended the statewide hearing that lasted just 30 minutes. SENATOR COGHILL discussed the fiscal impact, the possibility of putting the Rule 90.3 in statute without changing the current methodology, and the idea of adding enforcement resources to help people who feel they've been treated unfairly. MS. SHOCKLEY said the legislation that was introduced three years ago put the rule into statute and did not change the model. At that time 35 states used the shared income model. Although every situation is different, there are cases where it is more fair. She cited an example. CHAIR FRENCH held SB 134 in committee.