Fiscal impact reports (FIRs)
are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the NM Legislature. The LFC does not assume responsibility
for the accuracy of these reports if they are used for other purposes.
Current FIRs (in HTML & Adobe PDF formats) are available on the
NM Legislative Website (legis.state.nm.us). Adobe PDF versions include all attachments,
whereas HTML versions may not.
Previously issued FIRs and attachments may
also be obtained from the LFC in
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SPONSOR |
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DATE TYPED |
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HB |
392/aHAFC |
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SHORT
TITLE |
Child Support Enforcement Changes |
SB |
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REVENUE
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Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY04 |
FY05 |
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Narrative |
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Relates to SB 48 and HB 470
LFC Files
Responses
Received From
Human
Services Department (HSD)
Office
of the Attorney General (AG)
SUMMARY
Synopsis of HAFC
Amendment
The House Appropriations and Finance Committee
Amendment removes redundant language in Section 56-8-4 Judgments and Decrees- Basis of
Computing Interest relating to interest for unpaid child support computed at
the rate of four percent. Interest rate for delinquent child support of 4%
is covered under Section 40-4-7.3 of the Act.
The bill as amended becomes a duplicate of SB 48.
Synopsis of Original Bill
House Bill 392 proposes to change the
HB392 specifically
provides that a CSED attorney "employed to provide Title IV D services represent
only the department's interests and that no attorney-client relationship exists
between the attorney and another party”.
Significant Issues
The
bill:
q Reduces the Interest
Rate for Delinquent Child Support to 4%;
q Changes the Statute of
Limitations for Paternity (no later than 12 years after the birth of a child);
q
Changes
the Statute of Limitations for Past Child Support Claims (12 years);
q
Establishes
an Arrears Management Program to provide amnesty for child support arrears.
Interest
accrues on delinquent child support at a rate in effect when the support
payment becomes due and shall accrue from the date the support is delinquent
until the date the support is paid or consolidated in a judgment. The current interest rate is 8 ¾ %.
The
manner in which interest rates are calculated creates the following issues:
q Creates
a disincentive for any payment of child support payments because the total
amount (interest plus principal) is difficult to pay-off.
q The
amount of interest owed usually is the limiting factor in license revocation
proceedings for return of the license.
q
Calculation of interest (including
various interest rates) by CSED is an expensive and burdensome process in
conjunction with the judicial proceedings associated with child support.
HSD is given the power
to forgive the interest payment if the department believes it is likely to
result in the collection of more child support.
HSD is also authorized to return suspended licenses to promote increased
collection of delinquent support. The
proposed changes will give HSD tools to work with parents that owe child
support to collect arrears or work-out payment options for non-custodial
parents.
In summary, the
interest rate reduction, Arrears Management Program and statute of limitations
change are all-powerful tools for the CSED to use in negotiating child support
cases.
FISCAL IMPLICATIONS
The amount of interest accrued during State
Fiscal Year 2003 was:
The amount of interest collected and distributed
during State Fiscal Year 2003 was:
With both the reduced interest rates and an
Arrears Management program, it is anticipated that
Additional costs are
as follows:
q
$2,200 programming changes
q
$23,200 public campaign to advertise
changes
The Department should
report through the interim committee process the changes in collections in the
upcoming year in order to evaluate the effect of these changes.
ADMINISTRATIVE IMPLICATIONS
There will be some initial costs associated with
the programming changes to the CSED computer system (the Child Support
Enforcement System-CSES). These are
considered to be very negligible compared to the savings in time for workers in
calculating interest.
If HB392 becomes law,
the CSED will have to develop some formal internal procedures for how field
staff will implement it. The cost of
this will be minimal.
Minimal impact to the
court system will be felt by the proposed changes since the action will mainly
be done by CSED administratively. New
orders would simply follow the new 4% interest rate. The Administrative Office of the Courts can
assist in any training issues that would occur for District Courts in their
regular training schedule.
CONFLICT
A
provision of HB 392 (p. 5, lines 12-13) may conflict with the Parental
Responsibility Act, §§ 40-5A-1 through 40-5A-13.
TECHNICAL ISSUES
AG listed the
following concerns with HB392:
q
A provision of HB 392 (p. 5, lines 12-13)
may conflict with the Parental Responsibility Act, §§ 40-5A-1 through 40-5A-13.
q
An amnesty program for delinquent child
support may implicate Art. IV, Sections 32 and 34 of the
q
Federal
law requires as a condition of receiving federal funding that states provide
assistance in obtaining support for all children for whom support is requested. A child support enforcement action may be
brought on behalf of a family that receives assistance under the Public
Assistance Act or a non-assistance family.
When the state brings the action to enforce child support on behalf of a
family that receives public assistance, the state is seeking, inter alia, reimbursement for the public assistance benefits paid
out to support the child in the absence of child support. Section
q
A child support enforcement action may be
brought on behalf of a non-aid family. Section
BD/yr:dm