Legislature(1993 - 1994)
03/22/1994 08:00 AM House STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 482 - EMPLOYMENT INFORMATION PROVIDED TO THE STATE CHAIRMAN VEZEY opened HB 482 for discussion. Number 032 REPRESENTATIVE MARK HANLEY, prime sponsor, addressed HB 482. He said, in 1991, REPRESENTATIVE FRAN ULMER sponsored a bill which would require employers of 20+ employees to submit monthly reports to the Child Support Enforcement Authority (CSED) to help find those people not paying their child support. The intent of this bill was to collect more child support payments, and it was successful. The actual results of the bill were substantially higher than those estimated in its passage, he stated. He explained a sunset clause, ending January 1, 1995, was included in this bill and the intent of HB 482 is to repeal it. REPRESENTATIVE HANLEY outlined the old law was in one section and the new law was in another; therefore HB 482 would provide two effective dates. One date for the new section, and the old law would go into effect on January 1, 1995, at the same time the new law is repealed from the statute. REPRESENTATIVE HANLEY emphasized he had also been skeptical about the burden of the original bill, but in talking to larger companies they have not felt it to be overly burdensome and the results of the additional collections have been positive. REPRESENTATIVE HANLEY emphasized the more money contributed to child support, means less payments the state has to make in aid to families with many children. When families are receiving child support they usually are receiving enough money, whereby they do not need to utilize state services. Number 099 REPRESENTATIVE HARLEY OLBERG stated 50 percent goes to the general fund. He asked if the rest of the money goes to program receipts. Number 104 REPRESENTATIVE HANLEY deferred the question to the next witness. Number 109 CHAIRMAN VEZEY introduced JOHN MALLONEE as the next individual to testify. Number 119 JOHN MALLONEE, DEPUTY DIRECTOR, CHILD SUPPORT ENFORCEMENT DIVISION, DEPARTMENT OF REVENUE, supported HB 482. He responded to CHAIRMAN VEZEY's previous question stating the CSED collects child support money if it is reimbursement for Aid for Families with Dependent Children (AFDC). He stated 50 percent goes to the general fund and 50 percent goes to reimburse the share that AFDC paid. Number 132 CHAIRMAN VEZEY stated the money was child support money, not AFDC money. Number 136 MR. MALLONEE clarified once a family goes on AFDC, they sign over their rights to their child support to the state, up to the amount which they are given grants by AFDC. Number 140 CHAIRMAN VEZEY responded not everyone involved in the program goes on AFDC. Number 141 MR. MALLONEE agreed, money is collected and directly given to those families who do not go on AFDC in the attempt to keep them off AFDC. Number 144 CHAIRMAN VEZEY commented the program is experimental and is set up to affect employers who employ more than 20 people by giving them a monthly reporting requirement. In practice, the program has been implemented on selected employers of 50 or more. He felt if HB 481 were to pass, the base of employers would expand. Number 152 MR. MALLONEE replied HB 482 can be expanded down to include all employers who employ at least 20 individuals. Number 155 CHAIRMAN VEZEY stated all the employers he had talked to indicated the report takes three or more hours to complete every month. Number 158 MR. MALLONEE responded he found that estimation hard to believe. As an accountant, he did not feel information that was readily available on a W-4 or an I-9 would take three or more hours to access on a monthly basis. The whole requirement of actually withholding, which employers are already required to do whether or not the current law sunsets, may take three or more hours depending upon the size of the company. Number 171 CHAIRMAN VEZEY stated the biggest problem employers have is knowing who to withhold from. Statute holds the employer in perpetuity for an employee's withholding order. Records must by kept on all past employees. Number 182 MR. MALLONEE assumed CHAIRMAN VEZEY was referring to the requirement, whereby once a withholding order is delivered to an employer, if that employee leaves and later returns, that withholding order has not been satisfied. Number 186 CHAIRMAN VEZEY felt this requirement would cost the employer the most time to search through the records. Number 189 REPRESENTATIVE OLBERG asked if previous legislation had been heard dealing with that requirement. CHAIRMAN VEZEY answered similar legislation was before the Health, Education & Social Services Committee recently; however, it dealt with a different statute and only had similar language. CHAIRMAN VEZEY felt there were problems with the current child support statutes. He stated, after talking with employers, the aspect of working with CSED that bothers them the most is the unknown liability of having to keep track of every employee they have ever had. He asked if a more reasonable process could be found for the employers. Number 205 MR. MALLONEE replied the process was not unreasonable, because an employer is already required to keep employee records for several years after their employment, e.g., IRS, employee reporting records, tax records, etc.. He noted if there is some question to the records, they may never be subject to a statute of limitations. Number 214 CHAIRMAN VEZEY commented he was not aware of that as an employer. Number 217 MR. MALLONEE stated the CSED did not want to put an unfair burden on employers. Employers argue the CSED has the records available through Department of Labor reporting. This is true, but the CSED cannot access the records until four months after the fact. He emphasized that an individual working in Alaska over the summer, is already gone four months after the fact. Number 230 CHAIRMAN VEZEY inquired if the broadest scope of information would come from hiring dispatch halls. MR. MALLONEE answered information has also been obtained from those sources. Number 237 CHAIRMAN VEZEY asked if statute required the dispatch halls to give the CSED information. Number 238 MR. MALLONEE said he would have to check the statutes for its location, but the CSED had, in fact, issued items to union halls. Number 243 REPRESENTATIVE FRAN ULMER assumed the Department of Revenue would like to continue the program. Number 244 MR. MALLONEE affirmed REPRESENTATIVE ULMER, and reinforced that the program had brought in a large amount of collections in the previous year. The last report by an outside firm he had received about the program, indicated the difference between the control group and the target group was $621,000 last year. Estimates in 1991 stated if the program was expanded to all employers, it could bring in as much as $7.5 million in addition to current collections. Number 258 CHAIRMAN VEZEY stated he would like hear back from MR. MALLONEE on some of the questions he had raised. HB 482 in was held in committee pending more information.