BILL NUMBER: AB 2440 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 26, 2006
AMENDED IN ASSEMBLY MAY 16, 2006
AMENDED IN ASSEMBLY APRIL 17, 2006
AMENDED IN ASSEMBLY MARCH 30, 2006
INTRODUCED BY Assembly Member Klehs
FEBRUARY 23, 2006
An act to add Section 1714.4 Sections
1714.4 and 1714.41 to the Civil Code, relating to child
support.
LEGISLATIVE COUNSEL'S DIGEST
AB 2440, as amended, Klehs Child support obligations: liability.
Existing law imposes joint and several liability upon a parent or
guardian having custody and control of a minor for the
injury done to another person by the child of that
parent or guardian minor under certain
circumstances.
This bill would impose joint and several liability upon any person
or business entity that knowingly assists a child support obligor
who has an unpaid child support obligation to escape, evade, or avoid
current payment of those unpaid child support obligations. The bill
would also include a related statement of legislative findings and
declarations.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature hereby finds and declares all of the
following:
(a) In California, there were an estimated $19 billion in unpaid
child support obligations as of January 2006.
(b) The failure of a parent to pay child support obligations often
subjects the child and the other parent to a life of poverty or
substandard living conditions, reduced access to medical care, and
diminished educational opportunities.
(c) The failure of a parent to satisfy court-ordered or
court-approved child support obligations depletes the State of
California of one of its most valued resources-- the next generation
of healthy and well-educated Californians.
SEC. 2. Section 1714.4 is added to the Civil Code, to read:
1714.4. (a) Any person or business entity that knowingly assists
a child support obligor who has an unpaid child support obligation to
escape, evade, or avoid paying court-ordered or court-approved child
support shall be jointly and severally liable for 10 times the value
of the assistance provided, such as the fair market value of the
assets transferred or hidden, or the amount of the wages or other
compensation paid to the child support obligor but not reported. The
maximum liability imposed by this section shall not exceed the entire
child support obligation due. Upon the satisfaction of the unpaid
child support obligation, this section shall not apply.
(b) For purposes of this section, actions taken to knowingly
assist a child support obligor to escape, evade, or avoid paying
court-ordered or court-approved child support include , but
are not limited to, any of the following actions:
(1) With actual knowledge of the child support obligation, helping
to hide or transfer assets of the child support obligor.
(2) Hiring or employing the child support obligor as an employee
in a trade or business and failing to timely file a report of new
employees with the California New Employee Registry maintained by the
Employment Development Department.
(3) Engaging the child support obligor as a service provider and
failing to timely file a report with the Employment Development
Department as required by Section 1088.8 of the Unemployment
Insurance Code.
(4) When engaged in a trade or business paying wages or other
forms of compensation for services
rendered by a child support obligor that are not reported
to the Employment Development Department as required, including, but
not limited to, payment in cash or via barter or trade.
with actual knowledge of the child support obligation, helping
to hide or transfer assets of the child support obligor.
(c) This section shall not apply to a financial institution unless
the financial institution has actual knowledge of the child support
obligation and, with that knowledge, knowingly assists the obligor to
escape, evade, or avoid paying the child support obligation.
However, a financial institution with knowledge of an asset transfer
has no duty to inquire into the rightfulness of the transaction, nor
shall it be deemed to have knowingly assisted an obligor to escape,
evade, or avoid paying the child support obligation if that
assistance is provided by an employee or agent of the financial
institution acting outside the terms and conditions of employment or
agency without the actual knowledge of the financial institution.
SEC. 3. Section 1714.41 is added to the
Civil Code , to read:
1714.41. (a) Any person or business entity that knowingly assists
a child support obligor who has an unpaid child support obligation
to escape, evade, or avoid paying court-ordered or court-approved
child support shall be jointly and severally liable for 10 times the
value of the assistance provided, such as the fair market value of
the assets transferred or hidden, or the amount of the wages or other
compensation paid to the child support obligor but not reported. The
maximum liability imposed by this section shall not exceed the
entire child support obligation due. Upon the satisfaction of the
unpaid child support obligation, this section shall not apply.
(b) For purposes of this section, actions taken to knowingly
assist a child support obligor to escape, evade, or avoid paying
court-ordered or court-approved child support include, but are not
limited to, any of the following actions:
(1) Hiring or employing the child support obligor as an employee
in a trade or business and failing to timely file a report of new
employees with the California New Employee Registry maintained by the
Employment Development Department.
(2) Engaging the child support obligor as a service provider and
failing to timely file a report with the Employment Development
Department as required by Section 1088.8 of the Unemployment
Insurance Code.
(3) When engaged in a trade or business paying wages or other
forms of compensation for services rendered by a child support
obligor that are not reported to the Employment Development
Department as required, including, but not limited to, payment in
cash or via barter or trade.