Legislature(2003 - 2004)
04/19/2004 08:07 AM Senate JUD
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 514-CHILD SUPPORT ENFORCEMENT/ CRIMES
MR. JOHN MAIN, staff to Representative Pete Kott, sponsor of HB
514, told members that HB 514 touches on six major areas of the
child support statutes. First, it raises criminal non-support
from a misdemeanor to a felony. Currently 33 states and the
federal government classify criminal non-support as a felony.
Raising that crime to a felony will give the Child Support
Enforcement Division (CSED) a tool to negotiate for payment of
child support. Individuals sometimes do not pay child support
knowing the penalty is a misdemeanor.
MR. MAIN stated that since 2000, the court has convicted 24
people of non-payment of child support. The difference between a
misdemeanant and a felon is the conduct. CSED is forced to treat
both the individual who owes $5,000 and the individual who owes
$60,000 the same and believes that is unfair. The statute of
limitations for a misdemeanor is five years and 10 years for a
felony. Sentencing is also a major factor: a misdemeanor can
carry up to 10 years of informal probation and one year
suspended sentence; a felony carries up to ten years of formal
probation and a five-year suspended sentence. CSED monitors
people on informal probation, while the Department of
Corrections monitors people on formal probation.
MR. MAIN said the felony charge would apply to parents who owe
at least $10,000 and are in arrears for two years. In
comparison, an individual who steals or conceals $500 worth of
merchandise would also be charged with a class C felony, as
would an individual who defrauds a creditor for $500 or more.
MR. MAIN said HB 514 also makes aiding and abetting in the non-
payment of child support a class C felony. That would apply to
individuals who help a person conceal assets or an employer who
knows an employee owes child support.
The third area of the statute that would be affected applies to
judicial jurisdiction. The change would give the court the
authority to require obligors to pay on an approved payment
plan, to seek work, and to submit permanent fund dividend
applications if they qualify. The bill will allow obligors, who
have struggled for years to pay a large debt, to resume paying
that obligation and reduce the debt through a forgiveness
provision. CSED has been unable to collect about $250 million in
arrears. At the same time, many obligors have been unable to pay
because of the amount of debt that has been imposed upon them.
In some cases, a man might learn that he is a father and that he
owes $30,000 at the same time. That puts a tremendous burden on
that individual and his family. CSED is asking that it be able
to provide those individuals some relief from a large state
debt.
MR. MAIN said the next change in the bill will allow CSED to
establish paternity of the children of victims of rape and
incest for the purpose of collecting child support. CSED
believes that omission was an oversight when the law was
enacted. In those situations, CSED would only establish
paternity if requested by the victims.
The last change pertains to modifications to amounts paid. Right
now, CSED reviews child support obligations every three years
and if the obligor's income has changed 15 percent, the monthly
payment is adjusted. However, the federal government has
determined that CSED must modify the monthly payment amount no
matter how much the obligor's income has changed. As a result,
CSED will not be in compliance with the federal law if this
provision is not adopted and could face the loss of $14 to $17
million in federal funds, which would affect both CSED and the
Temporary Assistance for Needy Families' (TANF) program.
8:30 p.m.
SENATOR OGAN asked Mr. Main how he reconciles creating a crime
for non-payment of debt with the provisions in art. 17 of the
Alaska Constitution, which says there shall be no imprisonment
for debt.
MR. MAIN said that criminal non-support was created in 1971 to
address the fact that children need to be supported. He lamented
the need for child support enforcement and that both parents are
not always involved with their children. He said non-support is
a travesty on society and he sees it as something that should
not be tolerated. He does not believe that imposing penalties
will resolve the problem but it will awaken people to the fact
that if they don't pay, they will not be free. He noted that
this law places a tremendous burden on some people to pay child
support but, at the same time, he hopes those parents who pay
are involved with their children on a regular basis. This bill
will stiffen penalties for those people who are able to support
their children but do not do so and will help those who are
unable to pay due to lack of funds.
SENATOR OGAN said a civil process exists for all other debts. He
then asked if all child support cases are automatically referred
to CSED or whether parents can make arrangements on their own
upon divorce.
MR. MAIN said parties can be exempted from using CSED if a
specific process is used. The parties must petition the court at
the time of divorce to handle the payments between themselves.
In those cases, the payments are routed through CSED for
recordkeeping purposes but CSED takes no enforcement action
unless requested by one of the parties.
CHAIR SEEKINS asked if CSED requires that a minimal amount be
paid for child support by the non-custodial parent.
MR. MAIN said the minimum is $50.
CHAIR SEEKINS asked if a divorcing couple decides to deal with
that payment independent of CSED, and the non-custodial parent
makes no payment for 24 months, that person could be charged
with a felony.
MR. MAIN said the 24-month provision was included in the bill
because some people have the ability to pay but do not even pay
the minimum amount.
CHAIR SEEKINS asked if the 24-months must be consecutive.
MR. MAIN said yes. He noted that when these cases are referred
to the investigative section at CSED, the investigators make
sure that all of the criteria that applies to the civil process
have been met; then the case is referred to the attorney
general. He clarified that the c felony applies to a person who
owes at least $10,000 or is in arrears for 24 months or more.
CHAIR SEEKINS asked if the aggrieved parent would go to CSED or
the attorney general to charge the obligor with a felony.
MR. MAIN said the aggrieved parent would go to CSED, and an
investigation would ensue to determine whether or not to pursue
the case.
CHAIR SEEKINS asked if CSED would give the obligor an
opportunity to pay.
MR. MAIN said the obligor would have been given several
opportunities to pay the funds but when CSED has found a lack of
cooperation and ability to pay, it will turn the case over to
the Department of Law.
CHAIR SEEKINS noted that Mr. Main likened this crime to thievery
and asked if he believes that support payments in arrears have
been stolen from the child.
MR. MAIN said that is the irony because in actuality, it is like
taking money from a child's piggy bank. He said when parents
bring children into the world, those children should expect to
be emotionally and financially supported. A parent who does not
do that places a burden on the state or someone else to do that
job and is taking away something from that child.
CHAIR SEEKINS asked if a non-custodial parent made one payment
after 30 months, a second 24-month cycle would begin.
MR. MAIN was unsure how CSED would deal with that but thought it
might lower the penalty if it chose to charge that individual
for the 30 months of non-payment. He noted that CSED will have
to choose the most egregious cases to deal with.
CHAIR SEEKINS noted the crime is a misdemeanor at 23 months but
a felony at 24 months. He asked if at 24 months the statute of
limitations is expanded to bring a claim against a person.
MR. MAIN said that is correct.
SENATOR OGAN asked about the current sanctions for non-payment
of child support.
MR. MAIN responded that depending on the amount owed, the person
is reported to the credit bureau, can lose a permanent fund
dividend, can lose a driver's license, can have an occupational
license revoked or suspended, and could lose a passport. All of
those things might occur yet an individual may still choose not
to comply.
SENATOR OGAN expressed concern that an obligor would need an
occupational license and driver's license to make a living to
pay the debt and that HB 514 will add another level of
difficulty by making non-payment a felony. He felt that approach
is counterproductive.
SENATOR ELLIS asked for further explanation of the forgiveness
provisions.
MR. MAIN deferred to Ms. Baily.
MS. LANDA BAILY, special assistant to the Department of Revenue,
said that CSHB 514(FIN)am contains some minimum qualifications
for participation in the forgiveness program. Those
qualifications will ensure that only those people who should
qualify do, without compromising collectible state debt. She
noted a proposed amendment had been distributed.
SENATOR ELLIS asked Ms. Baily for a comparison [of the contents
in the proposed amendment] to the approach contained in CSHB
514(FIN)am.
MS. BAILY said CSHB 514(FIN)am says the agency "may", by
regulation, establish procedures..., while the amendment changes
that language to read the agency "shall", by regulation,
establish procedures and standards for forgiveness and arrearage
programs. The second change authorizes withholding payments from
a self-employed person. The third change says for each year a
person participates in the forgiveness program, up to 20 percent
of his or her indebtedness could be forgiven. She said the key
will be to make sure the program does not imperil the federal
incentive funding that requires Alaska to keep a competitive
profile. CSED is largely funded with federal funds and the state
relies on those funds to benefit the children of Alaska. She
added that the amendment also requires CSED to adopt regulations
within nine months of the effective date of the bill.
MS. BAILY maintained that CSED and the commissioner are
committed to a program that addresses non-collectible debt. DOR
needs to know why that debt is uncollectible in order to come up
with tight regulations that will create an effective process.
The amendment will allow CSED to tailor the regulations to get
the right people into the program by looking at employment
opportunities in Alaska and using effective tools already
available in the state.
MR. MAIN explained how the forgiveness program would work.
First, CSED and the obligor must agree to a payment plan after
the obligor has met the criteria. If the obligor complies with
the payment plan, CSED could forgive up to 20 percent [per year]
of the state debt as long as the obligor continues in the
program. As an example of an obligor who might qualify, he
described a man who was not informed he had fathered a child.
The mother had moved to Alaska and applied for public assistance
when the child was born. The father was not named right away but
was eventually found living in Mississippi. He had worked on an
oilrig for three years making about $75,000 per year but was
laid off from that job and took other employment at the minimum
wage. CSED determined the father owed roughly $30,000, primarily
due to the public assistance payments collected by the mother.
The father is unable to pay that amount because he is supporting
another family and is barely making ends meet. Under the
arrearage compromise program, CSED would be able to work with
him and set up a program where he would pay a monthly obligation
and simultaneously have his debt reduced.
TAPE 04-44, SIDE B
SENATOR THERRIAULT asked for clarification of the provision that
allows the court to require the non-custodial parent to work. He
said he sees that as more of a problem for a non-custodial
mother who might remarry. He questioned whether the court could
require the woman to work so that the children could receive a
higher payment.
MR. MAIN said the court could do that. He explained that two
jurisdictions within the state have made different
determinations regarding whether the courts can require
individuals to seek work: one believes it can, the other does
not. That is why that provision is in the bill. He said the
obligor would have to prepare applications, go to interviews and
report that activity to the court.
SENATOR THERRIAULT asked if any penalty exists for a person who
refuses to take any job or quits a series of jobs.
MR. MAIN said the court could impose sanctions against that
individual, such as contempt of court.
CHAIR SEEKINS said in the case of a father who does not know he
has a child, the forgiveness would be limited to the debt owed
to the state for public assistance payments made on behalf of
the child and not for other child support that the state was not
involved in.
MS. BAILY clarified that the forgiveness section addresses
state-owed arrearages only. Those arrearages occur when a child
is in foster care or on public assistance. She then noted that
Diane Wendlandt and John Mallonee were available to answer
questions via teleconference.
MS. DIANE WENDLANDT, Assistant Attorney General, Department of
Law (DOL), said the forgiveness provision in the bill is limited
to state debt because the state would not have the ability to
settle private debts at this time because private debt is owed
to the parent and not to the state.
CHAIR SEEKINS asked if the statute of limitations differs for
private versus state debt.
MS. WENDLANDT said there are some differences but not in terms
of the collection. Once a child support order has been issued,
the custodial parent may continue to collect until that debt is
paid, regardless of whether the debt is state or private.
9:00 a.m.
CHAIR SEEKINS asked how far back the state can go to collect
arrearages if a child is 17 years old when paternity is
determined.
MS. WENDLANDT said under the current statute of limitations, DOL
can go back six years to establish state debt. For private debt,
however, the custodial parent can go back to the date of birth.
SENATOR OGAN asked for a description of the federal compliance
sections of the bill that must pass for the state to receive
federal funds.
MR. MAIN said Section 15 must pass.
CHAIR SEEKINS entertained a motion to consider the proposed
amendment [Amendment 1], which reads as follows.
A M E N D M E N T 1
OFFERED IN THE SENATE JUDICIARY COMMITTEE
TO: CSHB 514(FIN)am
Page 5, Section 12, beginning on line 20, and ending on page 6,
line 18:
Delete all material and insert:
AS 25.27.020(d) is amended by adding new subsections to read:
(f) The agency shall, by regulation, establish procedures
and standards for the forgiveness of an arrearage owed to the
state under AS 25.27.120. The agency may forgive arrears under
this section, with the approval of the commissioner and without
the approval of the Department of Law, if
(1) the obligor
(A) has or obtains employment for which income
withholding is initiated under AS 25.27.250
within 60 days of the date the obligor is
approved for the forgiveness program;
(B) enrolls in and successfully completes an
employment training program approved by the
agency and obtains employment for which income
withholding is initiated under AS 25.27.150
within 30 days after completion of the employment
training program; or
(C) enters into an agreement with the agency for
alternative payment procedures, if the agency
determines that there are unusual circumstances
justifying a waiver of income withholding; and
(2) is in compliance with additional requirements and
limitations imposed by the agency by regulation to assure that a
forgiveness is in the best interest of the child and of the
state; and
(3) the obligor makes monthly payments pursuant to a
payment agreement approved by the agency; if the obligor misses
more than two monthly payments in a calendar year, or more than
two consecutive payments without approval of the agency for good
cause, the obligor will not be eligible to continue in the
arrears forgiveness program under this section.
(g) During each year in which an obligor complies with the
requirements for the forgiveness of an arrearage under (f) of
this section and any regulations adopted by the agency under
that subsection, the agency may forgive up to 20 percent of the
total arrearage owed to the state under AS 25.27.120, including
any interest owed on that debt. For purposes of determining the
amount of the forgiveness, the arrears will be calculated as of
the date the obligor is approved for participation in the
forgiveness program.
(h) The forgiveness program authorized under (f) and (g) of
this section may not be implemented until the agency has adopted
regulations setting standards and procedures. Regulations under
this section must be adopted within nine months after the
effective date of this section. The agency may establish by
regulation requirements and limitations on eligibility in
addition to those stated in (f) and (g) of this section.
SENATOR THERRIAULT moved to adopt Amendment 1.
SENATOR ELLIS objected and asked if the House contemplated
Amendment 1 and rejected it.
MR. MAIN said the House did not consider this particular
language but when DOR told Representative Kott the amendment
would improve CSED's ability to compromise arrearages, he felt
it would be fine. He noted it was not imposed upon Speaker Kott.
The amendment will make the language cleaner, the program more
effective and allow obligors who are burdened by debt to be part
of society again.
SENATOR ELLIS asked if the distinction between the private and
state portion of the debt is that the state debt is only that
portion paid through temporary assistance to needy families so
this will not apply to the amount owed directly to the custodial
parent.
MR. MAIN said that is correct.
SENATOR ELLIS asked why the forgiveness amount is "up to 20
percent." He said that amount will not repair a person's credit
or finances in any way.
MR. MAIN said any number could be used but the goal is to get
the obligor to begin paying ongoing child support. The federal
and state governments believe that as more obligors pay their
ongoing payments, the better those people will feel and will
have relationships with their children. Also, custodial parents
need assurance that they will receive some amount of support on
an ongoing basis. This bill seeks to get those people who are
struggling to make ongoing payments to pay some amount. He said
some people feel they will never get out from under that debt so
this provision will give people the possibility of eventually
being debt free after five years.
SENATOR ELLIS asked for more information on who has a statutory
duty to disclose [regarding the aiding and abetting provision].
MR. MAIN said that would be an employer or individuals who have
knowledge that the person owes child support, such as a current
wife or a bookkeeper. Anyone who receives a withholding order
would be statutorily responsible.
SENATOR FRENCH asked for the citation.
MS. WENDLANDT said the statutes are AS 25.27.060, AS 25.27.085
and AS 25.27.062.
SENATOR ELLIS asked why Amendment 1 includes the words "and
without the approval of the Department of Law,". He asked if the
obligor meets the other requirements, the commissioner would
have the sole authority to grant up to 20 percent forgiveness of
the state debt.
MR. MAIN said the belief is that CSED has a great many qualified
individuals that should be able to approve the forgiveness
without DOL's approval.
SENATOR ELLIS asked if CSED staff will make recommendations to
the commissioner of revenue, who will sign off on them. He said
he does not have a problem with not requiring the approval of
DOL, but he has heard many people argue over the years that CSED
is an agency that needs outside review.
CHAIR SEEKINS said those arguments probably did not relate to
state debt forgiveness.
MS. BAILY added that DOL will help promulgate CSED's regulations
to avoid any problems associated with the public purpose
doctrine or equal protection, regarding who gets to participate,
and to protect the best interests of the children and the state.
SENATOR THERRIAULT asked what incentive this will provide to
prevent people from going into default so that they qualify for
the forgiveness provision.
MS. BAILY said that is why DOR feels it is necessary to make
sure that the best interest of the child and the state is the
statutory direction. She said it is her understanding that no
one wants to create an incentive for an obligor to rack up child
support to qualify for forgiveness but no one wants to punish
those who have lived up to their obligations. DOR believes CSED
can design regulations to really look at who owes, why they owe,
and whether they intentionally did not pay to qualify for
forgiveness of their arrearages. She noted the federal office of
child support enforcement has consistently warned states to not
create that sort of incentive.
SENATOR THERRIAULT asked if the regulations will have some kind
of an income limit so that if a person had a lot of assets, they
would be calculated into the equation.
MS. BAILY said she believes CSED will evaluate model legislation
from other states to see what will work in Alaska. Alaska
differs from other states in terms of employment and
transportation. CSED will also look at a person's health,
whether the person is incarcerated, and whether the person has
drug, alcohol or mental health issues. If so, CSED hopes to tie
into the therapeutic court system and require parenting classes
in some cases.
SENATOR ELLIS withdrew his objection to the adoption of
Amendment 1.
SENATOR FRENCH commented that it appears that the crime of
aiding and abetting must be intentional. A House committee
considered adding the words "intentionally" and "unreasonably,"
but those words do not appear in the CS. He asked for an
explanation.
MR. MAIN said DOL testified [before a House committee] that
adding the word "unreasonably" would create an obstacle to
bringing a case to court.
SENATOR FRENCH said he objects to the drafting style of the CS
because the word "intentionally" appears on line 20 and that
word modifies three subsections. However, the subsections,
particularly the third one, are worded so that a "knowingly"
state of mind could apply. He suggested removing the word
"intentionally" on line 20 and specifying the state of mind in
each subsection.
MR. MAIN said the Criminal Division of DOL reviewed the language
in the CS and felt it was adequate.
MS. WENDLANDT recalled that "unreasonably" was included in a
prior version but prosecutors felt the inclusion of that word
would make prosecuting that crime very difficult.
MS. BAILY added the House Judiciary Committee discussed this
issue, where Anne Carpeneti looked at that closely. She noted
that "unreasonably" would include a lot of people who might not
want to take money away from their existing family, such as a
new spouse, and that would not be unreasonable.
CHAIR SEEKINS commented that Senator French's concern is the
structure of that section. He agreed that language is awkward
and felt Senator French's suggested language is favorable. He
noted his intention to hold the bill and have that section
redrafted.
SENATOR OGAN noted his desire to work with the bill sponsor on
the question of the constitutionality of debtor's prison.
SENATOR FRENCH asked if these cases will be prosecuted by one
prosecutor who works two-thirds of her time on these cases.
MR. MAIN said that is correct.
SENATOR FRENCH pointed to the indeterminate fiscal note and
asked if CSED intends to expand that prosecutor's hours or give
her additional resources. He noted that a felony charge will
require a grand jury hearing, which will drive the cost of
prosecution up. He opined that if she is paid for two-thirds
time, it is unfair to give her a full time caseload. He then
asked for the list of recreational licenses that will be revoked
if a person does not follow this law.
MR. MAIN said recreational licenses are sport fishing and sport
hunting licenses.
SENATOR OGAN repeated his concern that this bill will not let a
person own a business, drive, or feed himself with fish and
game.
CHAIR SEEKINS replied, "With that, I think this is a very
interesting bill. I think the intent is not to allow people to
live large by stealing from their kids and I agree with that."
He then set the bill aside and announced a five-minute recess.
Upon reconvening, the committee took up HB 414.
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