BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1355 (Wright)
          
          Hearing Date:  05/24/2010           Amended: 05/12/2010
          Consultant:  Jacqueline Wong-HernandezPolicy Vote: Judiciary 4-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY: SB 1355 provides that the obligation of a person  
          to pay child support pursuant to an order that is being enforced  
          by a local child support agency under Title IV-D of the Social  
          Security Act is suspended for the period of time in which the  
          obligor is incarcerated or involuntarily institutionalized, with  
          specified exceptions. This bill would require the court to  
          provide notice to the parties of the support obligation  
          suspension at the time the order is issued. This bill would  
          authorize an obligor, upon release from incarceration or  
          involuntary institutionalization, to petition the court for an  
          adjustment of the arrears pursuant to the suspension of the  
          support obligation. These provisions would apply to all child  
          support orders issued and all modifications of child support  
          orders requested on or after January 1, 2011. This bill would  
          also require the Judicial Council to proscribe forms necessary  
          for the implementation of the above-described provisions,  
          including forms for a petition to adjust arrears.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions             2010-11      2011-12       2012-13       
           Fund
           
          Suspension of arrears                Potentially significant  
          decrease in revenue      General     
                                            
          New court petition process                    Unlikely to create  
          new costs                 General*

          New forms                                               Minor  
          and absorbable                         General*

          *Trial Courts Trust Fund
          _________________________________________________________________ 
          ____











          STAFF COMMENTS: This bill may meet the criteria for referral to  
          the Suspense File.
          
          This bill prescribes changes to court processes that are  
          unlikely to present any significant up front costs, and may  
          create workload efficiencies. The potential loss of revenue  
          noted above is as a result of the effects of the new procedure  
          on any child support payments that reimburse the state for aid  
          to recipient families. 

          Under existing federal law, a child support obligor can request  
          a modification to a court order requiring him or her to pay  
          child support, based on a change of circumstances lasting more  
          than 90 days. A change of circumstance could be the loss of a  
          job, the birth of another child (or establishment of paternity),  
          or virtually any circumstance in which the obligor's financial  
          situation may affect the amount of child support expected from  
          him or her. Child support orders are largely based on the  
          obligor's income, ability to pay, and custody arrangement. If a  
          child support order were issued at a time when the obligor was  
          employed full time, and he or she were to subsequently become 
          Page 2
          SB 1355 (Wright)

          unemployed, the obligor could seek a support modification of the  
          child support order after 90 days of unemployment (a financial  
          circumstance change). Until the 91st day, the court order for  
          full support would still stand. 

          This bill would suspend arrears for an obligor incarcerated for  
          more than 30 consecutive days. Currently, if an obligor were  
          incarcerated in a county jail for fewer than 90 days (and then  
          released), he or she would be responsible for paying the full  
          amount of court-ordered child support for the time he or she was  
          incarcerated because the circumstance change lasted fewer than  
          90 days. Because this bill specifically provides that  
          incarceration for more than 30 days would trigger an automatic  
          suspension of the child support order, the 60 day difference  
          between existing federal law and this bill allows for a revenue  
          loss to the custodial parent, and to the state if the state is  
          involved in the support of the child and non-custodial parent.
          
          Existing law allows the state to collect and child support on  
          behalf of a custodial parent enrolled in CalWORKs to offset the  
          aid given to the family. A CalWORKs child support case is opened  
          when a custodial parent applies for and receives CalWORKs  










          benefits. The Department of Social Services (DSS) informs the  
          Department of Child Support Services (DCSS) when CalWORKs  
          benefits are granted, and a child support case is opened by the  
          DCSS. As a condition of receiving CalWORKs benefits, the  
          custodial party automatically assigns all rights to child,  
          spousal, and medical support to the county up to the amount of  
          aid paid. This includes all current and past-due support and  
          continues as long as a family is receiving aid. Any current  
          child support payments which exceed the amount of aid paid will  
          be sent to the custodial party. To the extent that this bill  
          results in decreased support payments to CalWORKs aided  
          families, it creates General Fund costs by not backfilling the  
          aid with child support money collected.

          Many obligors who are eligible for modifications to their child  
          support orders do not know they are eligible, and never seek  
          modifications even though their circumstances have changed. For  
          these individuals, arrears continue to accumulate; they  
          frequently never fully pay their arrears. To the extent that any  
          obligors who were incarcerated or involuntarily  
          institutionalized with no means to pay child support, would have  
          eventually paid arrears which the state had some portion of  
          claim over, this bill could result in a loss of state revenue.  
          These arrears, however, would have been the result of what is  
          functionally an overpayment. Had the individual petitioned the  
          court for a modification of the child support order, allowable  
          under existing law, it would have likely been granted and  
          arrears suspended.


          .