Legislature(2025 - 2026)BUTROVICH 205
02/05/2025 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| SB12 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 12 | TELECONFERENCED | |
SB 12-PFD/CHILD SUPPORT
1:31:23 PM
CHAIR CLAMAN announced the consideration of SENATE BILL NO. 12
"An Act relating to permanent fund dividends for individuals
owing child support; and relating to applications and
qualifications for permanent fund dividends for individuals
owing child support."
CHAIR CLAMAN said this is the first hearing of SB 12 in the
Senate Judiciary Committee.
1:31:52 PM
SENATOR FORREST DUNBAR, District J, Alaska State Legislature,
Juneau, Alaska, speaking as sponsor, stated that SB 12 would
allow individuals owed child support to apply for permanent fund
dividends (PFDs) on behalf of non-filing parents. He explained
that the bill is intended to address situations in which
parents, whether intentionally or unintentionally, fail to apply
for their PFDs, thereby depriving their children of financial
support. He clarified that while the State already has the
authority to garnish PFDs, SB 12 focuses on cases where a parent
is legally eligible for a PFD but does not submit an
application. He stated that he worked with relevant agencies to
develop a system enabling those owed child support to apply for
these unclaimed PFDs in order to collect what is owed.
1:32:32 PM
SENATOR KIEHL joined the meeting.
1:33:45 PM
SETH TIGARIAN, Staff, Senator Forrest Dunbar, Alaska State
Legislature, Juneau, Alaska, paraphrased the sectional analysis
for SB 12 as follows:
[Original punctuation provided.]
SECTIONAL ANALYSIS
SB 12: PFD CHILD SUPPORT
Section 1: States that a Permanent Fund Dividend (PFD)
garnished for child support counts as a child support
payment.
Section 2: Requires the Child Support Services
Division to send the Department of Revenue a list of
residents behind on child support by March 31 each
year.
Section 3: Adds rules about applying for a PFD:
• Custodial parents may apply for a PFD on behalf of
someone who owes them child support if that person
has not filed.
• Requires the state to submit a PFD application for
someone behind on child support if no one else has
done so by the deadline. The state will distribute
the funds to the person owed support.
Section 4: States that signatures are not required for
PFD applications filed by the state.
Section 5: Provides additional details about filing
and eligibility:
• It lets people applying for someone else's PFD
provide proof that the person is still an Alaska
resident.
• Assumes that someone who previously qualified for a
PFD is still eligible unless proven otherwise.
Section 6: Prohibits donations from PFDs distributed
for child support.
Section 7: Ensures that PFDs claimed for child support
cannot be garnished for other debts.
Sections 8-13: States that certain agencies may not
claim PFDs distributed under these rules.
Section 14: Applies these rules to PFDs for the 2025
qualifying year and beyond.
1:36:15 PM
SENATOR STEVENS asked whether other agencies can garnish the
PFD.
MR. TIGARIAN replied yes. He said the Department of Health
(DOH), the universities, and a couple of other agencies can
garnish the PFD.
1:36:32 PM
SENATOR DUNBAR expressed his belief that SB 12 contains an all-
encompassing list of those agencies. He noted that garnishment
has a priority and child support is top priority. He said that
he would look into whether there are any additional departments,
other than those listed, that could garnish the PFD.
1:37:16 PM
SENATOR MYERS said if he owed child support and filed his own
PFD, the State would garnish it. He asked whether, under current
statute, an individual in that situation would be blocked from
participating in PickClickGive.
SENATOR DUNBAR responded that he was unsure but believed that if
the PFD were subject to one hundred percent garnishment for
child support, participation in PickClickGive would likely be
blocked. He deferred to DOR for their insight.
1:38:10 PM
CHAIR CLAMAN directed the question to DOR.
1:38:24 PM
GENEVIEVE WOJTUSIK, Director, Permanent Fund Dividend Division,
Department of Revenue, Juneau, Alaska, replied that while there
is a priority order, participation in PickClickGive is possible.
She explained that garnishments are applied before charitable
contributions. Therefore, donations may occur if sufficient
funds remain after garnishment.
1:39:16 PM
CHAIR CLAMAN commented that the short answer is that individuals
are not blocked from trying to give their money away, but if you
owe it to somebody else with a higher priority, the donation
will not be very successful.
1:39:24 PM
MS. WOJTUSK replied that is correct.
1:40:36 PM
SENATOR KIEHL asked whether the Permanent Fund Dividend Division
would withhold federal taxes before issuing payment to the
custodial parent. He posed the question in the context of SB 12
passing as written, where the custodial parent files, the
obligor parent does not, and the obligor qualifies for a PFD.
MS. WOJTUSIK replied that the PFD Division would review how
SB 12 affects the priority order and whether child support
garnishments would outrank IRS garnishments.
1:41:28 PM
SENATOR MYERS asked whether DOR works with noncustodial parents
who make a good faith effort to pay through a payment plan, and
whether those individuals may receive all or part of their PFD
if they are actively making such an attempt.
MS. WOJTUSIK deferred to the CSED.
1:42:02 PM
CHAIR CLAMAN directed the question to CSED.
1:42:31 PM
CHRIS TRAN, Director, Division of Child Support Enforcement,
Department of Revenue, Anchorage, Alaska, requested that the
question be repeated.
1:42:47 PM
SENATOR MYERS repeated the question, asking whether the
Department of Revenue works with noncustodial parents who make a
good faith effort to pay through a payment plan, and whether
those individuals may receive all or part of their PFD if they
are actively making such an attempt.
MR. TRAN replied that CSED has an established enforcement
procedure. He explained that if there are arrears, the CSED will
submit the garnishment and collect the PFD. He stated that CSED
does not allow a compromise, settlement, or arrangement that
would permit the noncustodial parent to retain the PFD if there
are arrears on the case.
1:43:55 PM
CHAIR CLAMAN summarized by stating that if an individual owes
money, the PFD will not be coming their way.
1:44:10 PM
SENATOR MYERS referred to page 4, lines 27 29, which reads "an
individual owing child support who has previously qualified for
a dividend remains eligible for the dividend, unless the
individual owing child support provides proof of ineligibility."
He questioned why an individual who is no longer eligible would
bother to notify the State of their ineligibility.
1:45:56 PM
SENATOR DUNBAR replied that the ethos of SB 12 is rooted in
supporting custodial parents who are struggling to care for
their children. He stated that the bill is tilted slightly in
their favor, assuming until proven otherwise, that these funds
will be available to them.
SENATOR DUNBAR noted that the PFD Office does a fairly good job
of tracking down individuals who are not eligible. He
illustrated his position with a rebuttable presumption: the PFD
Office begins with the assumption of eligibility, but if
evidence shows otherwise, the PFD Office is not prohibited from
determining that the individual is ineligible. In such cases,
the custodial parent would, unfortunately, lose access to that
source of financial support for their child.
1:47:22 PM
SENATOR MYERS expressed sympathy for individuals in such
circumstances and explained he has a personal connection to that
type of experience. He shared that he and his wife adopted two
children several years ago. The birth mother was dealing with
personal challenges, and the birth father was no longer
involved. The birth father had not been paying child support and
was intentionally not filing for his PFD to avoid garnishment.
However, after learning of the adoption, he began filing in
hopes of receiving the dividend. The funds, however, were
directed to the adoptive parents rather than to the birth
father.
SENATOR MYERS reiterated his sympathy for constituents in
similar situations; nevertheless, he expressed concerned about
garnishing PFD funds from individuals who are not eligible in
the first place.
1:48:47 PM
CHAIR CLAMAN raised a risk issue and posed a hypothetical
scenario questioning whether it would constitute fraudulent
filing. He described a situation in which a noncustodial parent
owes child support and moves out of state. The custodial parent,
aware of the move, nonetheless submits a PFD application on
behalf of the noncustodial parent. He asked whether such an
application would be considered a fraudulent filing for personal
benefit, even though it is submitted on behalf of another
individual.
1:49:53 PM
SENATOR DUNBAR expressed his belief that is an accurate
interpretation of the law.
SENATOR DUNBAR said he believes the more challenging scenario
for the PFD Division is determining whether an individual is
eligible. For example, whether the person spent the required
number of days in the state during a given year, or whether they
left the state temporarily with intent to return. He noted that
such determinations are often difficult to assess.
SENATOR DUNBAR stated that he is open to technical amendments to
improve the functionality of SB 12. He emphasized that he is not
attached to the bill's specific language and is focused on
achieving its underlying policy goal. The goal is to get funds
into the hands of custodial parents who deserve support in
caring for their children.
SENATOR DUNBAR stated that while he welcomed changes to address
technical challenges in the legislation, the scenario described
by the chair likely cannot be addressed through bill language.
He stated that while he was unsure whether "fraud" was the
correct legal term, such conduct approaches criminality.
1:51:14 PM
CHAIR CLAMAN stated that he tends to view this type of "gaming
the system" as a fairly low risk.
1:51:45 PM
SENATOR KIEHL raised a related question. He noted that in some
child support cases, the parent who owes may choose not to file,
not out of malice but out of avoidance. He described a situation
in which the custodial parent files for the obligor parent's
PFD. He asked whether the obligor parent is effectively
committing PFD fraud through inaction if they know they are
ineligible but take no steps to notify the PFD Division,
including failing to respond because they want nothing to do
with the process.
1:52:41 PM
SENATOR DUNBAR replied that the Department of Law would make the
determination. He stated that the committee is, in effect,
building a record of how it would like the statutes to be
interpreted. He answered that, in his view, simply not applying
for a PFD or even withholding information from the custodial
parent, would not rise to the level of fraud or criminal
conduct.
SENATOR DUNBAR expressed his belief that an individual would
need to take a proactive step, such as knowingly applying for
something they are ineligible for, to trigger those types of
legal consequences. He acknowledged that if the noncustodial
parent is aware that the custodial parent is acting improperly
and does nothing, it is an unfortunate situation. In such a
case, the PFD Division might choose to recover the funds or
possibly bar future eligibility, though he noted that seems
unlikely. He concluded that, in his interpretation, the
noncustodial parent would not have committed fraud absent an
intentional act.
1:53:52 PM
CHAIR CLAMAN commented that under federal law, a false statement
charge requires an actual statement to be made, and that
statement must be material. Therefore, an individual who simply
does not answer the phone in response to residency inquiries
would not be subject to criminal liability, at least under
federal analysis, and likely under state analysis as well.
CHAIR CLAMAN stated that, conversely, if an individual answers
PFD residency questions and provides false information, such as
misrepresenting their place of residency or the number of days
absent from the state, those false statements could subject the
person to criminal liability for making false statements. He
clarified that he was offering a federal law perspective and was
fairly certain that comparable statutes exist in Alaska law.
1:54:49 PM
SENATOR STEVENS stated that he likes the bill and asked for
clarification on how child support arrears are handled over
time. He said that it seems the amount owed for child support
could be considerable compared to the amount of a PFD check. He
posed a scenario in which an individual owes $20,000 per year in
unpaid child support and asked whether those amounts accumulate
year over year. He asked whether such obligations could be
applied retroactively.
1:55:39 PM
SENATOR DUNBAR agreed that the PFD often pales in comparison to
the arrears that build up on child support. He answered that he
doesn't know if CSED can retroactively garnish past PFDs, but
believes garnishment is cumulative in the sense they apply every
year until the arrears are paid off. He expressed his belief
that the CSED works hard to try to pay down the whole debt. He
deferred to Mr. Tran for his further insight.
1:56:23 PM
CHAIR CLAMAN directed the question to Mr. Tran, asking him for
his perspective and insight to the question.
1:56:31 PM
MR. TRAN replied that is correct. He stated that CSED will
continue to pursue and garnish an individual's PFD each year for
accounts that are more than $5 in arrears.
1:57:02 PM
CHAIR CLAMAN announced invited testimony on SB 12.
1:57:25 PM
CHELSEA GREGERSEN, Deputy Director, Alaska Legal Services
Corporation, Palmer, Alaska, testified by invitation in support
of SB 12. She stated that the bill sponsor invited her to
testify regarding the potential impact of SB 12 on Alaska Legal
Services Corporation's (ALSC) client community.
MS. GREGERSEN explained that ALSC is the largest provider of
civil legal aid in Alaska to victims of domestic violence and
sexual assault. All of the families ALSC serves are low income,
and the organization receives many applications for assistance
with family law matters, including child support. She noted that
the obligor in these cases is often also low income and may be
intermittently employed or underemployed, which complicates the
collection of child support. When obligors fall into arrears, it
creates hardship for both parties, particularly when a child
support order cannot be met.
MS. GREGERSEN stated that having another tool to assist in the
collection of child support would benefit ALSC's client
community. These funds go directly toward the care of children
and can help stabilize families. She added that ALSC frequently
encounters cases in which the obligor fails to apply for their
PFD, whether intentionally or unintentionally. SB 12 would
create a mechanism to access those existing funds to pay down
child support debt and reduce the overall amount owed.
1:59:14 PM
LINDSAY KOTALIK, representing self, Anchorage, Alaska, testified
by invitation in support of SB 12. She stated that she has had a
child support order in place since January 2007. Her son will
turn 20 in August, and the order, which ran for 209 months until
high school graduation, was set at $336 per month, totaling just
over $70,000. She noted that this was a low monthly amount,
calculated in 2007 before minimum wage increases. She explained
that she never contacted CSED to increase the amount as her
inability to collect the original amount was an ongoing
frustration for her caseworker and herself.
MS. KOTALIK said that CSED assured her that if her ex-husband
ever applied for a PFD, the State would garnish it.
Unfortunately, the CSED could not compel him to apply. Over the
full term of the child support order, she calculated that the
total amount owed was $70,224. Of that amount, PFD garnishments
could have totaled nearly $27,000, which would have been more
than a third owed on the order. She said if her ex-husband had
applied for the PFD and it been garnished, he most likely would
not have had his driver's license pulled. He lost his license in
2010. The accrued interest amounts to more than $30,000; the
outstanding debt is over $104,000. While the Department of Labor
occasionally garnished small amounts of his income, collections
were minimal. She stated that he crossed the threshold for
criminal [noncompliance] in 2012 when the arrears balance was
$21,000. Since that time, CSED has collected only $68.70.
2:01:35 PM
MS. KOTALIK stated that it would be fraudulent to apply on
behalf of her ex-husband and the State has no authority to do so
either. She said this leaves her no recourse. She said that her
son was never able to benefit from his father's PFD, such as,
making a purchase, paying for a vacation, participating in
school trips, etc. She stated that SB 12 will not be life
changing for her. She explained that her son is an adult, and
she no longer incurs child-related expenses, such as, daycare
and diapers. However, if the legislature passes SB 12, it will
be life-changing for other people facing similar financial
challenges.
MS. KOTALIK expressed support for SB 12 as a tool to help both
custodial and noncustodial parents. She said her son's father,
now 43, regrets his earlier decisions and views the more than
$104,000 in accumulated debt as insurmountable. He has expressed
that he will never be able to remedy the situation.
MS. KOTALIK closed by emphasizing that, according to CSED, the
only remaining potential source of collection is her ex-
husband's future Social Security benefits. She stated that this
is a distressing prospect, as the person most likely to care for
him in old age will be their son. The responsibility will fall
on him. She urged the committee to adopt SB 12, noting that even
small amounts collected through the bill's provisions could have
a meaningful impact on families and prevent long-term
consequences for both parents and children.
2:04:18 PM
LAURA NORTON-CRUZ, representing self, Anchorage, Alaska,
testified by invitation in support of SB 12. She stated that she
is a licensed master social worker and a public health
professional, and typically testifies in a professional
capacity. She noted that she could have spoken about the high
prevalence of financial abuse as a tactic of intimate partner
violence. How coercive control is often used by abusers who
share children with their former partners to continue abuse
after the relationship ends. She added that she could also speak
to the impact these forms of abuse have on children. However,
due to limited time and despite her hesitation and nervousness
about sharing personal matters in a public setting, she stated
that SB 12 is important enough to her that she wished to share
her personal experience.
MS. NORTON-CRUZ shared that her ex-husband owes her $17,000 in
child support. In 2024, he claimed he was too poor to pay, yet
refused her repeated requests to file for his PFD, despite the
fact that this was income he would not need to earn. She stated
that he deliberately avoided filing because he knew the PFD
would be garnished and deposited into her account to support
their children. She emphasized that she had no way, either in
2024 or before the March 31 deadline, to compel him to apply.
She said that even though the amount of the PFD was relatively
small compared to the total cost of raising children, it would
have relieved a significant amount of stress and help support
her children.
2:05:49 PM
MS. NORTON-CRUZ stated that SB 12 appears to be a simple and
commonsense way for the State of Alaska to support custodial
parents and children. She said it would also serve to eliminate
a method of financial abuse used by harmful parents. In
addition, the bill would help custodial parents whose co-parent
may be too disorganized, mentally ill, or incapacitated to apply
for a PFD themselves. She said this is not only her experience,
but also that of her former sisters-in-law. She said ex-
husband's brother has not paid child support or medical expenses
for his daughters for many years and likely owes more than
$50,000. She stated that, as a single mother, it can be
overwhelming to initiate and navigate CSED paperwork. She
asserted that, once that effort is made, custodial parents
should receive every form of garnishment available. She
characterized SB 12 as a commonsense solution and urged the
committee to treat its passage as a matter of urgency.
[CHAIR CLAMAN concluded invited testimony on SB 12.]
2:06:59 PM
CHAIR CLAMAN opened public testimony on SB 12; finding none, he
closed public testimony.
2:07:34 PM
CHAIR CLAMAN raised a question about criminal restitution
orders. He recalled, though he was unsure of the accuracy, that
in cases involving criminal restitution orders, DOR may already
have similar authority to allow individuals owed restitution to
apply for a PFD on behalf of the person who owes them. He
expressed curiosity about whether someone owed restitution could
apply on behalf of an individual refusing to file, and if so,
whether that circumstance should be considered as part of the
same policy solution addressed in SB 12.
2:08:19 PM
MR. TIGARIAN replied that a priority list for PFD garnishments
exists in statute, with child support at the top. He stated his
belief that victim restitution is next in priority and said he
would research and confirm the accuracy of that information.
2:08:51 PM
CHAIR CLAMAN clarified that he had no doubt restitution appears
on the priority list and restated the question. He asked whether
someone owed restitution under a judgment could apply for a PFD
on behalf of the person who owes them, similar to a custodial
parent as proposed under SB 12. He asked whether such a person
would have the authority to apply and initiate payment
collection if the obligor refuses to apply.
2:09:21 PM
SENATOR DUNBAR expressed his belief that the answer is no. He
stated that his office researched this issue and did not find
any provision in state law that allows one party to apply for
another person's PFD. He deferred to the PFD Division for
confirmation.
2:09:41 PM
CHAIR CLAMAN directed the question to Ms. Wojtusik of the PFD
Division, asking whether anyone can apply on behalf of someone
else to get a PFD.
2:09:57 PM
MS WOJTUSIK replied that a person must have power of attorney to
apply on behalf of another adult. She explained that "B"
applications may be submitted for adults when a sponsor holds
power of attorney. She explained that child applications may be
submitted by someone who has custody of the child. However, a
person cannot apply on behalf of another adult without legal
authority through power of attorney.
2:10:36 PM
SENATOR STEVENS applauded the bill, stating that while it only
solves a small part of the problem, it is a step in the right
direction. He referred to the testifier who is owed $104,000 in
child support and remarked that her situation raises the broader
question of why the State is so ineffective at collecting funds
that are desperately needed. He acknowledged that this may be a
question beyond the scope of the bill but expressed interest in
understanding how collections are conducted and what additional
avenues exist to recover these funds.
2:11:22 PM
SENATOR DUNBAR agreed, stating that as a society, not just a
single department, there has been a systemic failure in ensuring
child support is provided. He noted that some of these cases
spiral into seemingly insurmountable problems. He added that,
while it is true in some situations that "you cannot get blood
from a stone," and obligors may not earn enough to pay, the
judiciary is supposed to adjust awards in those cases. He
emphasized that Alaska is uniquely positioned due to the
existence of the PFD, a tool that other states do not have.
While not a silver bullet or a substantial amount of money, the
PFD remains a valuable resource the State can use to assist
custodial parents.
2:12:23 PM
CHAIR CLAMAN expressed his belief that SB 12 proposes an
individual owed child support could apply on the obligors
behalf as long as the obligor remains an Alaska resident. He
said, while it may take years to make any meaningful reduction
in a balance owed, he believes that nothing in this legislation
would prohibit an individual from continuing to apply for the
remainder of the obligors life.
2:13:15 PM
SENATOR STEVENS said it gets carried on to Social Security
garnishments at some point too.
2:13:21 PM
SENATOR MYERS commented that while some obligors genuinely do
not earn much, in other cases, the issue is driven by spite. He
said that in the case he was connected to, he was not the one
owed child support initially and made sure not to imply that.
However, the birth father intentionally avoided formal
employment and failed to apply for the PFD. Instead, he earned
income through extralegal means, conduct that began before the
children were born but was continued, in part, to avoid child
support garnishment. He described it as a horrible situation and
acknowledged that while SB 12 does not fully address such
problems, it helps. He remarked on the extraordinary lengths
some people go in order to avoid paying what they owe.
2:14:36 PM
CHAIR CLAMAN held SB 12 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 12 version A.pdf |
SJUD 2/5/2025 1:30:00 PM |
SB 12 |
| SB 12 Sponsor Statement ver A 1.23.25.pdf |
SJUD 2/5/2025 1:30:00 PM |
SB 12 |
| SB 12 Sectional Analysis ver A 1.23.25.pdf |
SJUD 2/5/2025 1:30:00 PM |
SB 12 |
| SB 12 Fiscal Note FCS-PS 1.31.25.pdf |
SJUD 2/5/2025 1:30:00 PM |
SB 12 |
| SB 12 Fiscal Note DOR-PFD 1.31.25.pdf |
SJUD 2/5/2025 1:30:00 PM |
SB 12 |
| SB 12 Fiscal Note DOR-CSED 1.31.25.pdf |
SJUD 2/5/2025 1:30:00 PM |
SB 12 |
| SB 12 Letter of Opposition - Family Reunion USA 2.5.2025.pdf |
SJUD 2/5/2025 1:30:00 PM |
SB 12 |