Legislature(1995 - 1996)

03/28/1995 02:10 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 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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