Legislature(1995 - 1996)
03/28/1995 02:10 PM Senate L&C
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SL&C 3/28/95
SB 109 CHILD SUPPORT NONPAYMENT/LICENSING BAN
SENATOR KELLY announced SB 109 to be up for consideration, noting
there were many proposed amendments.
SENATOR ELLIS, sponsor, said that welfare reform is a hot topic and
he considers this bill to be one of the most significant things
they could do as policy makers to decrease the welfare roles in the
State of Alaska in terms of the number of case loads and expense.
Currently about 39,000 Alaskan parents owe over $330 million in
uncollected back child support payments. Only 43% of child support
orders in place currently received some payment. It is estimated
that one third of all welfare cases would be unnecessary if obligor
parents would pay the child support they have been ordered to pay.
Nineteen other states have enacted legislation similar to this to
restrict or revoke professional and/or drivers licenses.
When similar legislation was enacted in the state of Maine, 17,400
obligors in arrears were notified they would loose their
professional and/or drivers licenses and within 10 months, Maine
had collected $12.9 million from 10,000 of those people (the state
has a population of approximately 1 million. That is before the
first license was taken away.
The U.S. House of Representatives just passed, in the Clay Shaw
version of welfare reform, a provision requiring states to enact
laws to deny professional licenses, drivers licenses, and also
recreational licenses to folks who are behind in their child
support. He said there seems to be strong bipartisan support for
using this as a way to get people's attention to begin paying.
This amendment passed 426 to 5.
The provisions of SB 109 are modeled after California legislation
with some of the provisions from Maine. It provides means to
collect debts from self employed obligors or people who have been
difficult to reach with the current system, because they are not
subject to wage withholding in many cases.
The bill prevents issuance of renewal of an occupational license or
certificate or drivers license when an applicant is $2,500 or one
year behind on a child support order or judgement.
Number 197
SENATOR ELLIS said the argument has been made about how can a
person pay their child support if their license is taken away and
the answer is that they are not paying it with the license and the
experience of the other 19 states that have experimented with this
is of great success. Almost no one looses a license, because they
all call and make arrangements to pay for their kids.
Additional revenues collected due to enactment of the provisions of
this bill would directly aid families who are currently on public
assistance. The program would be self sufficient through
interagency receipts and currently the federal government, which
already funds 66% of the CSED budget, offers bonuses as incentives
for increased collection.
He said there are significant ramifications for various executive
agencies of government and they have a number of amendments.
SENATOR KELLY asked if anyone there opposed the bill. There was no
response.
CATHERINE REARDON, Director, Division of Occupational Licensing,
commented on two amendments. The first was charging a fee for a
temporary license, and the second concerns making occupational
license fees refundable.
She said the temporary license amendment, labeled A4, permits the
Division of Occupational Licensing and the other licensing entities
within the Department of Commerce to charge a fee for the temporary
license issued because someone is not able to get their full
license when they are on the default list for child support.
Rather than adding a surcharge on to the fees for all licensed
entities in the state, they would charge the person who has the
child support problem.
Number 242
SENATOR SALO moved to adopt amendment A4. There were no objections
and it was so ordered.
MS. REARDON said the second amendment, labeled A3, allows licensing
entities to return the licensing fees to the applicant if they deny
their license. They support this, because currently, if someone
already paid a licensing fee of perhaps $700 and been denied, then
paid their back child support and come back to get their license,
they would have to pay another $700 fee. It is preferable to
refund their money when their license is rejected, charge them for
a temporary license, and if they do become current, they could
apply again.
SENATOR SALO moved to adopt amendment A3. There were no objections
and it was so ordered.
SENATOR KELLY asked staff to find out if this would include a
license to practice law in the State of Alaska.
GLENDA STAUBE, Director, Child Support Enforcement Division (CSED),
explained that A1 relates to the fact that they want to make sure
that the bill not only address people who are not in substantial
compliance with a support order, but also make it clear that they
need to be in compliance with a payment schedule negotiated with
Child Support Enforcement. They also thought it would be a better
bill if they used eight months instead of one month for the $2500
arrearage trigger. This is particularly if someone's amount is only
$100 a month, CSED would have to wait two years before they were
$2500 behind or the obligor could just pay one month out of the
whole year and get away with being "in compliance."
SENATOR KELLY said he sympathized with this legislation, but said
he could see a case where someone could inadvertently fall behind
through losing a job or being a seasonal employee, and then they
lose their license, too. He asked where was the reasonable ground
here. MS. STAUBE explained that the obligor has the right to
administratively apply for a modification based on their income and
secondly, this only suspends their license, the premise being that
the person will come in and talk to them and make a payment
schedule. She stated that people who simply don't have a job and
have no money will not be punished by this bill.
SENATOR SALO commented that there is some flexibility in the
payment schedule. MS. STAUBE agreed with that.
SENATOR SALO moved to adopt amendment 1. There were no objections
and it was so ordered.
Number 306
MS. STAUBE recommended removing all references to commercial
fishing licenses for three reasons: one is they already have the
right to seize their license. Number two is because they also
issue the licenses in rural areas through fee agents and the system
basically wouldn't work very well there. Number three is that they
are already able to obtain child support from people who fish
through their unofficial employers, the processors by sending
withhold and deliver orders to them every fishing season.
SENATOR KELLY clarified that this, then, was not done for political
reasons, but because we already have access to them for the most
part.
SENATOR SALO moved to adopt amendment 2. There were no objections
and it was so ordered.
Number 340
JUANITA HENSLEY, Department of Motor Vehicles, said she looked at
how much money other states were bringing in and related that to
Alaskan statistics and estimated that this would bring in about $4
million per year in AFDC. The state gets to keep half of that.
She predicted they could collect $12 million per year for non AFDC
cases.
JIM NORDLAND, Director, Division of Public Assistance, said that
the administration solidly supports this bill and that it is
written in the Governor's blue print for welfare reform. He said
currently they collect $6 million through Child Support Enforcement
(CSED) that comes back into AFDC. He predicted another $2 - $3
million in receipts.
SENATOR KELLY asked if there was a new law requiring child support
payments to go through CSED. MS. STAUBE replied that not all child
support cases have to come through CSED. She clarified for Senator
Kelly that SB 190 from last year stated that any case under CSED
would automatically fall under the federal mandate of income
withholding, but that doesn't include all child support cases in
the state, only those that were referred to CSED by the court or
that were a part of CSED because of AFDC.
Number 392
SENATOR SALO moved to pass CSSB 109 (L&C) with individual
recommendations. There were no objections and it was so ordered.
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