BILL ANALYSIS Ó AB 610 Page 1 Date of Hearing: April 29, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 610 (Jones-Sawyer) - As Amended April 8, 2015 ----------------------------------------------------------------- |Policy |Judiciary |Vote:|9 - 1 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: Yes State Mandated Local Program: NoReimbursable: No SUMMARY: This urgency bill would extend the sunset date from July 1, 2015, to January 1, 2020, of the pilot program to suspend the obligation of a noncustodial parent, in the state child support system, to pay child support, while that parent is incarcerated AB 610 Page 2 or involuntarily institutionalized, unless that parent otherwise has the means to pay support. In addition, the bill would expand the pilot to include all child support cases and would permit the local child support agency to administratively adjust the arrears, provided no party objects. The bill would also require an evaluation of the program be performed, with a report to the legislature. FISCAL EFFECT: 1)One-time minor costs of approximately $100,000 to accommodate changes to the Child Support Enforcement (CSE) System. It is anticipated that this one-time cost is absorbable within existing resources. 2)One-time minor and absorbable costs to Department of Child Support Services (DCSS) to develop new forms and prepare the evaluation report. 3)On-going minor and absorbable costs to the (DCSS) for increased administrative workload to send notifications, file motions, and serve copies. 4)No significant costs to the courts. This bill allows an administrative modification of support awards which potentially reduces the workload on courts. Costs to create/modify forms are minor and absorbable. 5)The suspension of the child support orders for those who are incarcerated is not expected to result in increased revenues and collections; although it may limit the accumulation of child support arrears. The estimated impact on child support arrears will likely have a negligible impact on federal performance incentives earned. AB 610 Page 3 COMMENTS: 1)Purpose. The existing pilot program has not proved very successful at preventing the build-up of uncollectible arrears. Data from DCSS show that very few noncustodial parents sought to have their arrears suspended once out of prison - just 178 petitions were filed - and of those only 14 (or 8 percent) were granted under the pilot program. That program is scheduled to sunset on July 1st of this year. This bill seeks to extend and expand that pilot to apply to all cases, not just cases within the state child support program, and creates a process that allows local child support agencies to administratively adjust any arrears in the hopes that the expanded pilot program can be more successful at helping reducing uncollectible child support and in helping noncustodial parents better support their children. 2)Background. When noncustodial parents are incarcerated, unless they seek a modification of their child support order, their support obligation continues unabated, and interest accrues on the unpaid debt. According to a study of California's child support caseload by the Urban Institute, only about half of incarcerated child support obligors had reported incomes in the two years prior to their incarceration and, of those, their median annual net income was just under $3,000. Their median arrears were $14,564. Researchers have discovered that the build-up of uncollectible child support while an obligor is incarcerated has implications not just for the obligor, but also for the state and the family. A just-released obligor, with a large support debt and few employment prospects, is far more likely to avoid the formal economy and, therefore, pay no child support and have little or no contact with his or her children. In addition, the failure to collect ongoing child AB 610 Page 4 support will result in the state receiving less incentive funding from the federal government. Finally, recidivism rates appear to increase for obligors with large child support debts. 3)Federal Incentive Funding. CDSS earns federal incentive funding based on California's relative performance regarding child support collections as compared to other states and territories. To the extent that suspending child support orders encourages incarcerated noncustodial parents to resume paying child support upon their release, it could result in an increase in the amount of child support that is successfully collected. Furthermore, the accumulation of past due child support, along with the reduction in current support payments reduces the state's performance on federal child support measures This bill, by suspending child support orders and reducing the amount of past due child support, could increase California's performance thereby increasing the amount of federal incentive funding for DCSS. However, based on the pilot program, the estimated impact on federal performance incentives is negligible. 4)Prior Legislation. a) SB 1355 (Wright), Chap. 495, Stats. 2010, created a pilot program to suspend child support when an obligor is incarcerated, which expires on July 1, 2015. b) AB 862 (Bass), 2005, would have required that information and other materials regarding child support modification be distributed to any parent with minor children, while the parent is in the custody of CDCR. This bill was vetoed. c) AB 2245 (Wright), 2002, would have, among other things, required that a child support order be suspended, including any arrearage, interest, or penalty that may accrue, if the support obligor is or was incarcerated in a penal AB 610 Page 5 institution for more than 29 consecutive days, and is without the resources to pay child support. That bill failed passage in the Assembly Judiciary Committee. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081