Legislature(2003 - 2004)
03/08/2004 01:52 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 514 An Act relating to child support modification and enforcement, to the establishment of paternity by the child support enforcement agency, and to the crimes of criminal nonsupport and aiding the nonpayment of child support; amending Rule 90.3, Alaska Rules of Civil Procedure; and providing for an effective date. JOHN MAIN, STAFF TO REPRESENTATIVE PETE KOTT, explained the changes in the Judiciary Committee Substitute for HB 514. [The first part of Mr. Main's testimony did not record.] He said that Section 4 raises aiding and abetting the nonpayment of child support to the felony level. In response to a question by Representative Stoltze, Mr. Main explained that he was formerly the Director of the Child Support Division and that he now works for Speaker Kott. Mr. Main continued discussing the Judiciary version of HB 514. He remarked that a study conducted by Dr. Elaine Sorenson noted that of the $90 billion owed throughout the nation in child support, 70% of the individuals make less than $10 thousand a year. In Alaska, individuals owe about $250-300 million. The bill sponsor would like to give the agency the authority to adjust these arrearages, so that the parent can start making payments and the custodial parent can count on child support coming in monthly. The child support agency would gain in its performance measure of collections, the custodial parent would gain with monthly payments, and the child would gain another reliable parent. Mr. Main explained that under current state law the agency is not allowed to establish paternity for victims of rape or incest, and consequently, the agency cannot establish a child support order. The bill asks that the agency be given that authority whenever a woman requests it. Mr. Main noted that the bill addresses a modification imposed by the federal government to comply with the state plan this legislative session, or lose $14-75 million in federal funds. Representative Croft asked if there is a federal law prohibiting the retroactive modification of child support orders, and in what manner the state's ability to compromise the orders would affect the federal rule. Mr. Main replied that is correct, a state cannot retroactively modify a child support order or arrearage, but a state can forgive the debt. A state does not have to pay the federal portion of the debt if the state does not collect it. Representative Croft asked the practical difference between child support payments that are too high being cut in half versus a cumulative debt being halved. Mr. Main clarified that the agency would create a new order to forgive a hardship debt, as in a default order establishing what could have been paid many years before. The agency does not modify a current order. Representative Croft asked if federal law prevents modifying on-going child support orders. Mr. Main replied that he did not believe so. LANDA BAILY, SPECIAL ASSISTANT AND LEGISLATIVE LIAISON, DEPARTMENT OF REVENUE, stated that HB 514 is a collaborative effort between the Department of Revenue (DOR) and Speaker Kott and his staff. She noted that two of the bill's provisions cause the department concern. Ms. Baily stated that Section 12(f) in the Judiciary Committee Substitute relates to arming the investigators in the Child Support Enforcement Division (CSED). She shared that the department takes seriously the security of its CSED employees and their clients, and the security of the information. Past incidents have led to security measures including bulletproof glass and cardkey entry systems in Anchorage, and emergency response procedures. Other offices around the state also have response procedures, including instructing employees to dial 911. Ms. Baily continued explaining that CSED investigators are commissioned as special officers by the Department of Public Safety to gather documentary evidence for the conviction of the current misdemeanor crime of non-support, or to help the Department of Law obtain court judgments to secure the payment of child support. It is a multi-agency effort involving the departments of Revenue, Law, Public Safety and the court system. Ms. Baily stated that the Department of Revenue works hard to ensure that Alaskan children receive their entitled support. It is a process of working with the documentary evidence, not one of face-to-face encounters with individuals who may become hostile or threatening. Other states arm their investigators and ask them to supervise felony investigations and to make arrests because they are dealing with hostile people on a frequent basis. The intent of Representative Kott is that the investigators carry firearms for self-protection rather than to make arrests. Ms. Baily noted the provision on page 3, line 20 that adds the words "and unreasonably" harmful. She stated that the intent of the bill is to help the department to prosecute, while this may have the opposite effect. Ms. Baily referred to the bill sections pertaining to the compromising of state-owed arrearages, stating that there is a lot of money owed to the state and to children. The department has worked closely with CSED on a pilot program that would help people with a poor payment history to become responsible and make payments to the state and to the custodial parent. The pilot program needs extensive legal analysis to meet constitutional safeguards, and she stated that the current wording may have equal protection problems. Co-Chair Williams stated that he planned to hear both the Judiciary Committee Substitute and the Work Draft versions of HB 514, Representative Stoltze questioned the merits of recreational licensing on page 2, lines 14-16. Ms. Baily was unable to respond. Co-Chair Harris noted on page 1, Sec. 3(d) through page 2, (1) the aggregate amount of accrued monetary child support arrearage totaling $10 thousand. He maintained that it is a lot of money to be in arrears before there is an attempted felony prosecution, and he said, two years without support from the spouse is a very long time. He asked if the sponsor considered making it one year, or less than $10 thousand. Ms. Baily explained that two years is Representative Kott's suggested timeframe. Ms. Baily acknowledged that parents have attested it's very difficult when they're not receiving child support. Mr. Main stated that two years and $10 thousand mirrors the federal child support criminal statute. The statute began in 1992 with $5 thousand and one year of non-payments, which was found insufficient. Co-Chair Harris asked what wasn't sufficient. Mr. Main replied that the misdemeanors were not being investigated. When the CSED tried to get federal attorney to prosecute numerous cases, they were denied. From 2002 to the present, the federal government reviewed 4600 federal cases and prosecuted 450 nationwide felonies across state lines. Through restitution the federal government recovered $18 million. The State of Alaska has submitted several federal felony cases for review that haven't yet been prosecuted. Co-Chair Harris asked if a person would face criminal charges if they made one payment during twenty-four months and owed less than $10 thousand. Mr. Main explained that the issue is inadequate investigative resources to look at all the cases. Currently there are about 14,000 cases owing more than $10,000 or two years in arrears, but he stressed that it doesn't mean that everyone who owes over $10 thousand should be charged with a felony or misdemeanor. TAPE HFC 04 - 51, Side B Mr. Main noted that there are a number of reasons why people cannot afford to pay and may be two years in arrears. Co-Chair Harris asked if the CSED could foreclose on homes or automobiles. Mr. Main affirmed that the CSED has that authority but has chosen not to exercise it. The division has put liens on houses and various properties. The CSED tried to become a co-lien holder on vehicles but the Division of Motor Vehicles (DMV) advised against it. The State of Washington has a successful program requiring a buyer to go through the DMV to get title whenever a car is sold. To his knowledge, the CSED has not foreclosed on homes, but it has gone after airplanes. Due to a manpower shortage, the CSED has not approached seizing property from homes. Co-Chair Harris asked if there is a penalty against an employer who pays "under the table" to avoid a record of salary so the CSED or the courts cannot attach the employee's wages. Mr. Main affirmed that there are both civil and criminal penalties. The civil penalty applies if the employer received a holding order or garnishment order and failed to withhold. In those cases, the employer could be fined the full arrears. In court, the employer could be fined the entire $10 thousand rather than what the individual would have been charged. The criminal penalty involves aiding and abetting the nonpayment of child support, currently a misdemeanor. In response to a question by Co-Chair Harris, Mr. Main stated that charges have been filed. Representative Croft clarified that not paying child support at all is currently criminal nonsupport and a misdemeanor, but when it reaches the two-year limit, it becomes a felony. Representative Croft asked if a violator of misdemeanor nonsupport could lose hunting and fishing licenses. Mr. Main affirmed that a violator could lose up to six months of use of hunting and fishing licenses. Representative Croft asked if this provision is a requirement of federal law. Mr. Main responded that it is a compromise because the federal government mandated that the state seize recreational licenses if a person owes back child support. The Judiciary Committee amendment extended the loss of the hunting or fishing license until the arrears were paid, if the person is convicted of a felony. Representative Joule asked how many of the 14,000 cases become felons. Mr. Main replied, between 3-6 cases per year. Representative Joule questioned the rationale of people losing hunting licenses in rural areas where there may not be jobs, and where obtaining game is good for the family but doesn't translate into a child support payment. He pointed out that if people lost their hunting license, they would be gathering food illegally. Mr. Main pointed to Version U, page 4, section 8, line 18 "the court may suspend, restrict, or revoke," and explained that it does not mean that the court is required to do so. The court would look at the individual's circumstances and whether the license was needed for subsistence to feed the family. Representative Croft stated that the law previously revoked a hunting or fishing license for six months for nonsupport, and asked if it would now be revoked for the duration of the nonsupport. Mr. Main affirmed that the Judiciary Committee had adopted that amendment. Representative Chenault asked the meaning on page 4, line 21, "natural person." Mr. Main was unable to respond. Co-Chair Harris asked if a person would be subject to losing a recreational license forever if that person is currently making payments but also has a great backlog of payments to make up. Mr. Main replied that the court would make that decision, with a recommendation by the Department of Law. The language reads, "the court may suspend, restrict, or revoke." Co-Chair Harris asked why the word "shall" was not used. Ms. Baily pointed out that it is a penalty for criminal nonsupport so the license would not revoked unless the person was actually convicted of either a misdemeanor or a felony. It would not apply to ongoing child support arrearages unless the person was convicted. In response to a question by Representative Stoltze, Mr. Main explained that a conviction would be prosecuted in the courts. In response to a question by Representative Foster, Mr. Main indicated there are four CSED investigators. CO-CHAIR Harris referred to language on page 5, line 5 and asked if the CSED automatically would take the full Permanent Fund dividend (PFD) if an individual were in arrears. JOHN MALLONEE, ACTING DIRECTOR, CHILD SUPPORT ENFORCEMENT DIVISION, DEPARTMENT OF REVENUE explained that if the individual has more than $50 in arrears, the division would attach any portion up to and including the entire amount of the PFD. If the arrears totals more than the amount of the dividend, the entire PFD would be taken. Co-Chair Harris asked if the dividend would be split among multiple children with different parents. Mr. Mallonee affirmed that the dividend would be split among them based on a portion of the arrears. Representative Joule asked whether an individual in arrears who is currently raising another family could use any of the PFD balance for the new family. Mr. Mallonee explained that the dividend comes in primarily against the child support arrears but any balance would go toward on-going child support. MELANIE MILLHORN, DIRECTOR, DIVISION OF RETIREMENT AND BENEFITS, DEPARTMENT OF ADMINISTRATION, stated that the division was asked to look at the legal analysis dated March 2 (copy on file), and to respond to a provision in Section 12 of the Judiciary Committee Substitute. Section 12 would provide peace officer/firefighter retirement service after 20 years for the four CSED positions. The Mercer Actuarial preliminary figures show an increase of 2.84% in the employer contribution rate by the Department of Revenue for personal services. A fiscal note will follow. The annual cost to the department totals $6,208. Representative Hawker questioned whether the language is sufficient to the intent of granting investigators the powers but not the designation of peace officers. Ms. Millhorn commented that the legal analysis looks at the statutory provision and the regulation for peace officers and firefighters, and she admitted uncertainty regarding whether the regulation could withstand challenge. Representative Hawker argued against giving title and authority without commensurate benefits. ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES SECTION, CRIMINAL DIVISION, DEPARTMENT OF LAW, spoke to a minor part of the Judiciary Committee Substitute that was removed from the new work draft. She explained that the addition of two words, "and unreasonably," in the Judiciary Version U, on page 3, line 20 would have made it difficult for attorneys to prosecute people for criminal nonsupport. Ms. Carpeneti was unsure if the sponsor realized that aiding the obligor with nonpayment of child support would interfere with prosecuting for nonpayment of child support. Currently the division has to prove that there is a valid administrative order that the person knows about, and prove that the person intentionally withheld information or knowingly helped to hide assets. She explained that adding the "and unreasonably" standard would be problematic and she doubted that it was the sponsor's intent. Co-Chair Harris pointed out that the words, "and unreasonably" were removed from the new work draft. Representative Croft questioned the language on page 3, Sec. 5(A) of both versions that would make it a misdemeanor to withhold information about an obligor. Ms. Carpeneti explained that the division doesn't prosecute many of these cases, and it applies to employers and second spouses. Representative Croft suggested adding the words, "and unreasonably," under Sec. 5(A), arguing that there could be reasonable situations of a person not wanting to disclose employment or residence information. Ms. Carpeneti replied that she would be more comfortable if that language only modified paragraph(A), but it would add an unreasonable requirement and an additional hardship to existing law. She would prefer that it not be included at all. Representative Croft asked if there is a general misdemeanor penalty if a person does not disclose information to a CSED investigator. Ms. Carpeneti replied, not to her knowledge. Representative Croft questioned the federal requirement to only revoke the recreational license for a major crime and not a misdemeanor. Ms. Carpeneti was unable to fully respond, but commented that it is discretionary and not mandatory. DIANE WENDLANDT, CHIEF ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, VIA TELECONFERENCE, ANCHORAGE, explained the federal requirement is simply that the state has procedures allowing for the suspension of recreational licenses. The federal government doesn't specify how that may be done, although for all other licenses there are general programs through the licensing agencies. A compromise was reached, with the department agreeing to suspend recreational licenses only in cases of civil contempt or criminal nonsupport, which would comply with the federal requirement. Representative Croft asked if the state would violate the federal requirement by suspending the license only for a felony and not a misdemeanor. Ms. Wendlandt answered that it is difficult to know beforehand what the federal government will allow. Representative Foster questioned having the CSED plainclothes officers carrying guns in the twenty-nine villages of his district. He recounted an instance of a national park service employee in Hawaii who was killed with his own gun, and expressed concern that this provision would be asking for trouble in Western Alaska. Mr. Main replied that the provision is intended for the protection of the CSED investigators who don't wear uniforms. In rural areas, the investigators would ask to be accompanied by state troopers or Village Public Safety Officers (VPSOs). To his knowledge, the investigators have gone to areas by road or aircraft but not to the remote villages. Representative Foster questioned the fiscal note for the training of four CSED investigators. He commented that the VPSOs in Hooper Bay are unarmed and face greater dangers than the child support investigators. LT. ALLEN STORY, DIVISION OF ALASKA STATE TROOPERS, DEPARTMENT OF PUBLIC SAFETY, VIA TELECONFERENCE, replied that there is not a fiscal note yet. He commented that the definitions of "peace officer" and "police officer" are used throughout statute to empower different people in differing circumstances. He stated that Representative Foster is correct that police officers would have to be certified by the Alaska Police Standards Council. The costs for attending the Public Safety Academy are $7100 per participant, and another $2700 for an array of firearms and use of force equipment. Representative Foster asked if this is the same argument as the ABC Board wanting to arm their agents. Mr. Story replied that it is not the intent of the current administration to arm the ABC agents. Mr. Main stated that the Child Support Enforcement Division wrote up a fiscal note regarding the training of the investigators, not the Department of Public Safety. Ms. Baily clarified that the new numbers for training will be incorporated into a new fiscal note that the department will provide soon. Representative Chenault reiterated his question of the meaning of the language "natural person" that appears on page 4, lines 21 and 28 of Judiciary Version U. Ms. Carpeneti replied that it means a human being and clarified that there are entities including corporations and partnerships. Representative Chenault doubted that corporations would be issued a recreational license. Ms. Carpeneti stated that this is existing law, and a defendant could be a corporation aiding and abetting failure to pay child support. Representative Chenault argued that this deals with revoking recreational licenses. PETER ECKLUND, STAFF TO REPRESENTATIVE WILLIAMS, explained the changes in the Work Draft 23-S1639\V by first pointing out the language deleted from Judiciary Version U. The words "and unreasonably" were deleted from page 3, line 20. All of Sec. 12 (f)(1) and (2) has been deleted from page 5, line 16, which had designated the investigators as peace officers and allowed them to carry firearms. The work draft also deletes Sec. 12(g) through (i) which was the arrearages section allowing the department to negotiate forgiveness of child support arrearages. Mr. Ecklund explained that the work draft adds a Pilot Program for Child Support Arrearages on page 7, line 10. He noted that if the committee accepts the work draft and the pilot program language, the date that the pilot program would report to the legislature and the Governor should be changed. He suggested changing page 7, line 15, from October 1, 2005 to February 1, 2005. Co-Chair Williams asked if the department supports the changes. Ms. Baily replied that the Department of Revenue supports the changes in the proposed committee substitute, especially the removal of language giving firearm authorization to CSED investigators, and the inclusion of the pilot program and provision to report back to the legislature. In response to a question by Representative Chenault, Ms. Baily replied that the fiscal note would change. She offered that some of the changes in the committee substitute might help allay concerns expressed by the Division of Risk Management and the Tort and Workers' Compensation Section in the Department of Law. She expected a revised fiscal note soon. Representative Hawker asked the sponsor's perspective on the changes. TAPE HFC 04 - 52, Side A In response to a question by Representative Foster, Ms. Baily described the pilot program formulated by the CSED and the Department of Revenue. The program would help people who are not presently paying child support to secure training for employment and reduce the need for state assistance. It would also address arrearages in payment to custodial parent. She stated that Ms. Wendlandt has worked with the department and outlined concerns regarding the pilot program in the Department of Law memorandum dated March 5, 2004 (copy on file.) The program must meet constitutional safeguards. In response to a question by Co-Chair Harris, Co-Chair Williams stated that he would wait to hear from the bill sponsor before adopting the proposed committee substitute. Mr. Main pointed out that the sponsor has not seen the committee substitute. Co-Chair Harris requested a revised fiscal note based on the new version. Representative Stoltze asked for guidance in whether the committee would adopt the work draft Version V, or the Judiciary Committee Substitute. Co-Chair Williams clarified that he was asked by the administration to draft a committee substitute, but it is up to the committee which bill it supports. HB 514 was heard and HELD in Committee for further consideration. The committee took a brief At Ease.