BILL NUMBER: AB 2440	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 14, 2006
	AMENDED IN SENATE  AUGUST 8, 2006
	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 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 that minor under certain circumstances.
   This bill would impose 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 liable for three times the value of the assistance
provided, such as the fair market value of the  obligor's 
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. Any funds
 or assets  collected pursuant to this section shall be paid
to the child support obligee, and shall not reduce the amount of the
unpaid child support obligation. 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, 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 liable for three 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. Any funds  or assets 
collected pursuant to this section shall be paid to the child support
obligee, and shall not reduce the amount of the unpaid child support
obligation. 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  taken when the
individual or entity knew or should have known of the child support
obligation  :
   (1)  With actual knowledge of the child support
obligation, hiring   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)  With actual knowledge of the child support
obligation, engaging   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)  With actual knowledge of the child support
obligation, when   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.