SB 252 - PATERNITY/CHILD SUPPORT/NONSUPPORT CRIMES BARBARA MIKLOS, Director of the Child Support Enforcement Division (CSED), explained that SB 252 was introduced solely to comply with federal welfare reform requirements. The Personal Responsibility and Work Opportunity Reconciliation Act, commonly known as welfare reform, passed in Congress in 1996. The intent of the Act is to change the welfare system so that it is not viewed as a life long income source, but rather as something temporarily available when people are in need. When Congress passed the Act, it realized people need tools to enable the reform to take place so a great deal of focus was put on child support enforcement provisions. Some of those provisions require legislative changes. SB 154, passed last year, met many of the requirements. Some requirements were put on hold until this year and in the meantime Congress passed technical amendments to the Act. Congress has warned that if this legislation is not enacted, the state could suffer financial penalties in CSED funds and the welfare grant. MS. MIKLOS described the provisions of the bill as follows. The legislation requires all employers to report new hires within 20 days. Existing law only requires larger employers to report. That provision expands the legislation but reduces the penalty for not reporting from $1,000 to $25. SB 252 also gives the Courts authority to revoke sports fishing and hunting licenses in criminal cases or when a person is found in contempt of court. Only a judge may revoke the license and only in those two cases. SB 252 requires social security numbers be placed on drivers' licenses and on hunting and sport fishing licenses. MS. MIKLOS noted Dan Branch of the Department of Law, who drafted SB 252, and Phil Petrie, the Operations Manager of CSED, were available to answer questions. Number 554 SENATOR WARD asked Ms. Miklos to expand on her comment that non- compliance with the federal Act could result in financial penalties to the State. MS. MIKLOS explained the Act contains language that authorizes the Secretary of the Department of Health and Human Services to withhold all federal child support enforcement and welfare program funding for non-compliance. The "could" is because the decision to withhold is left to the discretion of the Secretary. She added the State of Idaho has already received a letter advising it to hold a hearing and take action within 60 days, or federal funds will be withheld. SENATOR WARD questioned whether committee members had a copy of that letter and what specific conditions the State of Idaho has to meet. MS. MIKLOS offered to provide committee members with a copy of the letter. She said the agency is requiring the State of Idaho to pass the provisions of welfare reform but it does not specify which provisions the State of Idaho is out of compliance with. SENATOR WARD asked why the State of Idaho has received that ultimatum and other states that are out of compliance have not. MS. MIKLOS replied last year Idaho's Legislature passed a bill that did not meet all of the requirements of the federal Act and indicated it did not plan to do any more. She thought the reason Alaska has not received similar correspondence is because the Department of Health and Social Services believes Alaska intends to pass legislation this year. SENATOR LEMAN referred to a CSED question and answer document in committee members' packets, and specifically to the question of whether the use of social security numbers in CSED matters serves enough of a compelling state interest to override a person's right to privacy. Senator Leman read the following statement from the document. "The Courts likely will find that any privacy concerns are far outweighed by society's interest in effective child support enforcement." He stated that while he agrees with that statement, he is concerned that the Alaska Courts have handed down two separate rulings in the past week that are very bizarre in the application of the Right to Privacy clause as it links with Equal Protection. He said he has very little confidence in what that court might do in interpreting CSED's use of social security numbers. He thought CSED would have a compelling state interest to protect the right of the child but likewise, so would enhancing the relationship of a child with a parent, but one judge did not agree. He said it concerns him when the courts misinterpret what others find to be common sense. SENATOR WARD maintained the State of Idaho has taken the position that it will go through the administrative hearing process first and should lose no money until that process is complete. He noted he spoke to a few people whose believe the federal government has not articulated its position well enough for states to fully understand the requirements. Number 504 MS. MIKLOS indicated it is her understanding the State of Idaho is working on legislation to meet the requirements, and that maybe both things are occurring simultaneously. She noted the people she spoke with in Idaho were hoping to get legislation through this year. SENATOR WARD asked if she spoke with legislators. MS. MIKLOS answered she spoke with officials in the child support division. SENATOR WARD asked if the State of Idaho will be the first to have an administrative hearing. MS. MIKLOS was not sure. She added that most states have attempted to comply. SENATOR WARD pointed out the State of Idaho wants to have a hearing for the purpose of clarification of the Act's requirements. Number 492 CHAIRMAN WILKEN informed committee members an analysis, prepared by the National Council of State Legislators, was in committee packets. He asked Ms. Miklos to review the letter from the Department of Health and Human Services. MS. MIKLOS stated the letter says Alaska must comply according to the welfare reform legislation. She read excerpts from the letter as follows. "Therefore, a determination that a state IV-D plan is disapproved will result in immediate suspension of all federal payments for the state's child support enforcement programs. ...Alaska received approximately $12.4 million in Title IV-D funding for the administration of its child support program in FY 97 and over $3.2 million in Title IV-D performance related child support incentives. In addition, in order to be eligible for a block grant for Temporary Assistance for Needy Families (TANF), the Act requires the State to certify that it will operate a child support enforcement program under the state plan approved under part D. Therefore, TANF funding would also be jeopardized if the State failed to enact the required child support legislation on a timely basis. Alaska's federal funding for IV-A was approximately $63 million." MS. MIKLOS indicated the total amount of federal funds that could be lost is $78 million. SENATOR WARD questioned whether anyone from the Department of Health and Human Services has notified CSED in writing that even $1 would be eliminated without a hearing. MS. MIKLOS said no. SENATOR WARD stated he does not like blackmail in any form, and he is unsure of the process. He did not think the federal government has adequately defined its mandates and it is approaching the problem on a state-by-state basis. SENATOR GREEN noted the NCSL analysis contains provisions that are not mandated: one in Section 2, one in Sections 4 and 5, and Sections 15 and 17. It also contains a repeal of the sunset clause from last year which is the reason this measure had enough support to pass the Senate. She said she would be hard pressed to support this package. SENATOR WARD thought the committee might need to look at a different package or require an administrative hearing as the State of Idaho has. CHAIRMAN WILKEN stated that unless the HESS committee is willing and able to rewrite this legislation, the bill should be moved to the Judiciary Committee where its legal implications will be analyzed. SENATOR WARD thought the HESS committee would be passing on its duty and right to request a hearing. MS. MIKLOS said if members want to pass the bill on to the Judiciary Committee, she would be glad to write a letter to Senator Ward that explains exactly what is happening in Idaho to clarify this issue. Number 419 SENATOR GREEN stated she does not know what changes have been made and what provisions might be implanted in the bill that might have unintended implications. She noted she is not comfortable passing this legislation on without a clear understanding of it. SENATOR WARD pointed out he understands what SB 252 does, but does not know that the State of Alaska is necessarily required by federal law to comply. The mandate has been implied through correspondence from the Department of Health and Social Services, but the mandate is subject to an action, which is usually a case of federal officials deciding precisely what the state must do. CHAIRMAN WILKEN announced SB 252 would be held in committee to give members more time to discuss the bill's implications with agency staff. SENATOR LEMAN asked Ms. Miklos to provide the committee with an analysis of SB 252 that determines how much of its content was not in last year's bill, and that compares the bill to the federal law. MS. MIKLOS noted she already prepared that material and would provide it to Senator Leman. CHAIRMAN WILKEN informed committee members he was recently contacted by an irate constituent about CSED's handling of his case. Ms. Miklos intervened in the case and the problem was resolved to everyone's satisfaction. He thanked Ms. Miklos and stated she is off on the right foot as CSED's new director.