HB 137-PFD/CHILD SUPPORT  4:48:56 PM CHAIR GRAY announced that the next order of business would be HOUSE BILL NO. 137, "An Act relating to permanent fund dividends for individuals owing child support; and relating to applications and qualifications for permanent fund dividends for individuals owing child support." 4:49:10 PM REPRESENTATIVE ASHLEY CARRICK, Alaska State Legislature, as prime sponsor, gave a summary of HB 137, which would allow the state to apply for a Permanent Fund Dividend (PFD) on behalf of eligible residents who are behind on child support and have not filed their own PFD application. CHAIR GRAY expressed his support for the bill and welcomed additional comments from committee members. 4:50:06 PM REPRESENTATIVE VANCE stated her belief that the bill is admirable but concerning. She expressed concern about how the department would determine eligibility with regard to residency and equal protection rights. CHAIR GRAY asked Ms. Nauman to address these concerns. 4:52:45 PM EMILY NAUMAN, Director, Legislative Legal Services, Legislative Affairs Agency (LAA), asked Representative Vance to restate her concerns. 4:53:02 PM REPRESENTATIVE VANCE asked whether the bill would create an equal protection issue by relieving the debt for people who owe child support. MS. NAUMAN explained that the common question in an equal protection case is whether two similarly situated groups of people are treated differently. Notably, in order for a law to be a valid under the state's equal protections test, the law must be reasonable, not arbitrary, and bare a substantial relationship to a legitimate governmental objective. So, relieving the debt of a person who owes child support versus a person who owes some other type of debt would need to be shown as a reasonable government objective, which is being established on the record as the bill moves through the committee process. She added that interests like this are rarely overturned on equal protections grounds. REPRESENTATIVE VANCE asked whether this would create a special privilege for anyone who owes a type of debt that the state should determine them eligible for the PFD and apply for the dividend on their behalf. MS. NAUMAN said this is a policy call, as the legislature could amend the bill to apply to anyone who owes a debt. She added that under current law, there is a mechanism for certain classes of debts to be paid from seized dividends by the Alaska Court System (ACS) and the Department of Revenue (DOR). 4:56:37 PM REPRESENTATIVE VANCE expressed concern that this could be considered an improper taking without due process. MS. NAUMAN said she has no constitutional concerns on this matter. These people are presumably eligible for the dividend and have made an affirmative decision not to apply, so the money is not their property. Nonetheless, she highlighted a concern about a person who could lose benefits in another state if the State of Alaska presumed that person to be a resident of Alaska and mistakenly applied for the PFD on their behalf; additionally, she questioned whether the payment of debt is a legitimate public purpose. 4:59:13 PM REPRESENTATIVE KOPP added historical context with reference to HB 216, which established the restorative justice account to garnish dividends from felons or repeat offenders who are incarcerated. He said this could be considered a taking, but there have been no challenges. He opined that HB 137 is "in the same vein" and viewed it as victim restoration. He posited that the structure of HB 137 had already been laid by previous legislation and asked whether Ms. Nauman concurred. MS. NAUMAN agreed that its similar to the restorative justice account program. The only difference is that there is less variability with the restorative justice account because the incarcerated individuals are known entities, and therefore, there is no application process and DOR simply multiplies the number of people by the amount of the dividend and deposits that into the restorative justice account. 5:04:32 PM REPRESENTATIVE CARRICK noted that on page 2, lines 6-9, the bill would notify both the individual in arrears and the individual owed child support that the dividend application is being filed. At that time, either person may submit evidence of eligibility. In functional practice, the individual owed child support would likely initiate the process by reaching out to the department. Additionally, she pointed out that the PFD is not a person's property until it is applied for. 5:06:14 PM REPRESENTATIVE MINA shared a personal anecdote involving her dividend being garnished for a defaulted car loan. She reasoned that it would make sense to extend that justification for people who owe child support and stated her support for the bill. REPRESENTATIVE VANCE pointed out [HB 216] concerns felons, which is an important distinction. To Representative Carrick, she asked why a person's debt would be absolved without them applying for the dividend and likened it to relieving a "deadbeat" dad's responsibility. She reiterated her opposition to moving the bill out of committee. 5:09:58 PM REPRESENTATIVE EISCHEID stated his support for the bill and shared that one of the primary users of small claims court is payday lenders who go after people who are in arrears. He presumed that there would be a judicial determination of child support, as the person who owes it is in the arrears, as well as a societal interest in meeting the needs of the children whose families are owed child support. He reiterated his support for the bill. 5:11:30 PM REPRESENTATIVE KOPP shard his understanding that on average, some of these parents owe 10 times more than felony level financial crimes, which start at $750. He said the policy call is whether to hold "deadbeat" dads accountable or restore the family unit. Personally, he said he is compelled to help these families in tough situations. 5:13:58 PM REPRESENTATIVE CARRICK expressed her appreciation for the discussion and willingness to take Representative Vance's concerns into consideration. She opined that the bill is narrowly tailored enough to solve this pervasive problem and offered to tailor the language further. 5:14:57 PM REPRESENTATIVE KOPP moved to report HB 137 out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE VANCE objected. She opined that that the person in arrears should be an active participant in paying the debt. REPRESENTATIVE UNDERWOOD opined that the bill is headed in the right direction despite not fully hitting the mark. She expressed her hope that the bill could be further narrowed to ensure that there are no constitutional or other unintentional issues. 5:19:08 PM A roll call vote was taken. Representatives Underwood, Mina, Eischeid, Kopp, and Gray voted in favor of HB 137. Representative Vance voted against it. Therefore, HB 137 was reported out of the House Judiciary Standing Committee by a vote of 5-1. CHAIR GRAY authorized Legislative Legal Services to make any necessary technical or conforming changes.