HOUSE BILL NO. 344 "An Act relating to paternity establishment and to support orders; relating to the crime of criminal nonsupport; relating to divorces, dissolutions, and actions to declare a marriage void; and providing for an effective date." Co-chair Sharp noted that a great deal of work had been done on the Senate version of the legislation (a Senate companion bill) by the Senate Resources Committee (RES), resulting in a CS. JULIE LUCKY, STAFF, SENATOR RICK HALFORD, CHAIR, SENATE RESOURCES COMMITTEE, agreed that a lot of work had been done on the Senate companion bill (SB 252) in Senate RES resulting in changes that were rolled into the CS for HB 344 before the Senate Finance Committee [SCS CSHB 344(FIN)]. Ms. Lucky provided an overview of the changes made. She noted that the first two sections remained the same. Ms. Lucky addressed changes in Section 3, dealing with the revocation of licenses for contempt; Senate RES added drivers and occupational licensing and a definition for recreational licensing. There were concerns that people who relied on sports fishing and hunting licenses for subsistence and personal use would not be able to engage in those activities if licenses were revoked. Both custodial and non-custodial parents had the concern. The committee created a recreational license category in order to conform to the federal mandate (requiring suspension of recreational and sport licenses). The recreational license category would include sport fishing and hunting licenses that were not required for subsistence or personal use. Ms. Lucky turned to changes in Sections 4 and 5, dealing with revocation of licenses for criminal non-support, with the same recreational license definition described in Section 3. Ms. Lucky addressed Sections 6 through 9, dealing with the Department of Fish and Game collecting social security numbers and giving them to the department, which were in the original bill. Ms. Lucky noted that Section 10 was also part of the original bill. The next change was made in Section 21; "sent by first class mail" was omitted, and "serve" was put in. Senate RES was concerned that there was no proof that a person received first-class mail. With the change, people could either serve or use certified mail/return receipt requested. Ms. Lucky turned to Section 23, dealing with employer reporting. She noted that a provision had been put in on the floor of the House to allow employers to report by email; that was taken out, since email was not a secure method of reporting things like social security numbers. The reporting had to be done by first-class mail. Ms. Lucky discussed a change in Sections 23 (d) and 23 (f) made because of confusion during the bill's drafting related to definitions by labor organizations about what it meant to be an employer; the reference to employer organizations was taken out. The civil penalty was changed in Section 23 (f)(1) and 23 (f)(2); the mandate did not require a civil penalty, so the value was reduced to $10 and $100. Ms. Lucky indicated that there was an amendment regarding Section 23 (g), which would otherwise take Alaska out of compliance with the federal act. The error was a drafting error and the amendment would take the section out. Ms. Lucky explained that the last line in Section 24 was reworded for clarity to "as if the subpoena had been issued by a court" so that people could understand that the subpoena would have the same weight. Ms. Lucky directed attention to Sections 25 and 26. There had been a concern that there was not enough time for a putative father to respond; the CS lengthened the time to 30 days for a father to get financial records and 45 days to get genetic testing (if paternity was being reputed). Section 25 had to be changed as well (for consistency) from 20 to 30 days for the financial records. Co-chair Sharp clarified that the original bill had 20- and 30-day requirements; the changes were to 30 days for financial records and 45 days to submit to genetic testing. Ms. Lucky continued that the next change was in Section 31. She noted that Sections 31 through 44 went together but dealt with two different kinds of licensing. Basically, the agency would be allowed to only revoke licenses if someone was found in substantial non-compliance; a best-efforts clause was added to substantial non-compliance. Therefore, an agency could not revoke an occupational or drivers license unless a person was found in substantial non- compliance. The clause was taken out in many sections because it was repetitive. It used to say that the agency could take the license if the person failed to comply with a subpoena; that was put into Section 3 of the bill (related to the courts). Ms. Lucky pointed out that a best-efforts clause to substantial non-compliance was added to Section 42 (c); when someone was found to be making the best efforts they could under their circumstances, they would not be found under substantial non-compliance and would not have their licenses revoked. Ms. Lucky explained that Sections 44 through 52 were the same. Section 53 was added to make the act non-severable; if any section was found to be unconstitutional, the whole act would be found unconstitutional. Co-chair Sharp asked whether there was a strengthening of an item related to contempt orders by the court. Ms. Lucky replied that the item was in Section 3 of HB 344. The Resources Committee had added "the court may suspend, restrict, or revoke a driver's license or a license as defined in AS 25.27.244(f)." The section used to apply only to sport hunting and fishing licenses; by rolling in the driver's and occupational licenses, the state made it so the court would have to find the person in contempt in order to take the licenses away, as opposed to the agency finding the person in contempt. Senator Adams asked whether there was anything in the bill that would make it a crime for any agency employee to sell a list with social security numbers. Ms. Lucky replied that the item was in the Senate version of the bill, but it would have needed a title change to be in the House version, so there was not a provision regarding the sale of the lists of social security numbers. Co-chair Sharp believed there was also reference to penalties or restrictions on the vendor who sold the licenses, but that also would have meant a title change. BARBARA MIKLOS, DIRECTOR, CHILD SUPPORT ENFORCEMENT DIVISION, DEPARTMENT OF REVENUE, explained that the bill had originally been introduced to comply with welfare reform requirements, which were passed in 1996 and amended the year prior by Congress. She stated that the original intent of the legislation was only to comply with welfare reform; there could have been serious penalties to the state of Alaska, including losing all the federal money that went into child support (approximately $13 million) and public assistance (about $63 million). The bill was introduced, and she believed it had been made better as it progressed through the system, including additional protections worked on in Senate HESS and Senate RES. Ms. Miklos emphasized that amending Section (g) on page 10 would bring the legislation into compliance with federal requirements. The Child Support Enforcement Division (CSED) also believed that the bill would correct some of the problems that had been in the previous year's legislation. For example, some of the court documents were public, yet contained social security numbers. She stated that the current bill would make the information confidential. Ms. Miklos reviewed concerns about two provisions in the bill. First, Section 50; CSED had originally requested that the sunset section be repealed, but the section had a sunset of 2001. She emphasized her desire to improve the agency, and she believed the legislation would take time away from her job. Second, there were concerns about non- severability. She stated that CSED believed that the previous piece of legislation did not have anything that was unconstitutional. She did not want the entire piece of legislation to fail because of one possible provision. With those two exceptions, CSED believed the current version of the bill was much improved over the version it had introduced. Co-chair Sharp asked for more information about non- severability. Ms. Miklos replied that if any part was found unconstitutional, it would all go. Senator Torgerson asked whether a provision in the previous year's bill had been found unconstitutional. Ms. Miklos responded that a superior court judge had believed taking a driver's license for non-compliance with child support was unconstitutional; the issue was still in the state supreme court and a decision had not been reached. Senator Torgerson asked whether the issue was the merits of taking the license or the merits of not providing a public defender for the person. DAN BRANCH, DEPARTMENT OF LAW, responded that the issue was the merits. He thought one of the problems would be solved by the present bill; one of the difficulties the court had was that the occupational licensing statute (which was almost identical to the driver's license statute) had a provision that would allow someone to avoid having their license taken away if they could show they made best efforts to keep current with their child support debt. The same provision was not placed in the driver's license revocation statute and the court felt that created two disparate classes. The current bill would take care of the problem by giving someone who was trying to hold onto their driver's license a chance to do so by showing best efforts to make the payments. Senator Torgerson recalled that he had had concerns about the prior year's version of the bill related to other states having the power to come into Alaska and put a lien on personal or real properties or assets without checking with Alaska agencies. He asked whether the current version had the provision. Mr. Branch answered that the current version of the bill contained a provision that would allow another state to record a lien, in the same way CSED could record a lien. That meant that CSED could go to the land recording office and put a notice of lien in the recording for a person with a child support debt who had property. The notice would inform the person and anyone else that money was owed and had to be addressed before the property could be sold. Senator Torgerson asked whether the provision was standard on any lien. Mr. Branch replied that it was. Senator Phillips MOVED to ADOPT CSC CSHB 344(FIN) (version "K") as a working document before the committee. There being no objection, it was so ordered. Senator Phillips MOVED to ADOPT Amendment 1. There being no objection, it was so ordered. Senator Donley MOVED to ADOPT Amendment 2. He explained the amendment would add the contents of SB 306 to the omnibus proposal. He reviewed that SB 306 had been heard by the committee already, had passed the Senate unanimously, and was in the House Judiciary Committee. He added that the bill dealt with some of the same issues that the title covered for HB 344 in that it provided a slightly different system for which a parent could get the income tax deduction in child support cases. The bill put out a system so that someone who wanted to continue to receive the benefit of a tax deduction also had to make child support payments. Failing making the payments would mean that they could not receive the tax deduction. Senator Donley stressed that a title change would not be required. He read part of the title and stressed that SB 306 was the same subject matter. Senator Adams testified that he supported the amendment; however, he stated that he would be more comfortable if there was a legal opinion that SB 306 fit into HB 344. Co-chair Sharp reported that he had held back from putting two sections he wanted into the bill (related to penalties for sale or disclosure of lists) because the items would require a title change. He was hesitant to do anything that would require a title change, because of timing. Co-chair Sharp stated that he would support the amendment as long as there was a letter from the drafter that a title change would not be required. There was a discussion about the issue. Senator Adams stated that the minority did not mind if the amendment was attached. He believed a title change could be done in the Rules Committee if it were needed. Senator Donley noted that HB 344 had an immediate effective date and he wanted the amendment to have a delayed effective date (June 1, 1999) to give the courts a chance to prepare for the change on support orders. There would be a new Section 4. Co-chair Sharp did not believe the proposal would cause a problem with the severability clause. Senator Donley pointed to a general severability clause in statute. There was a discussion about severability clauses. Senator Donley MOVED a conceptual amendment that the drafters could draft the legislation so that it was not subject to the non-severability clause. Co-chair Sharp summarized that Amendment 2 would add separate sections to the bill that would incorporate the items in Amendment 2 with the added effective date of July 1, 1999. Without objection, Amendment 2 as amended was adopted. Co-chair Sharp referred to the zero fiscal notes. Senator Donley MOVED to REPORT SCS CSHB 34(FIN) as amended out of committee with individual recommendations and attached fiscal notes. There being no objection, it was so ordered. SCS CSHB 344(FIN) was REPORTED out of committee with a "do pass" recommendation and with zero fiscal notes by the Department of Administration, the Department of Revenue, and the Department of Community and Regional Affairs Committee.