Legislature(1993 - 1994)

03/22/1994 08:00 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  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  1995, at the same time the new law is repealed from the                      
  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                      
  Number 109                                                                   
  CHAIRMAN VEZEY introduced JOHN MALLONEE as the next                          
  individual to testify.                                                       
  Number 119                                                                   
  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                      
  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.                              

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