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F I S C A L I M P A C T R E P O R T

SPONSOR Park

ORIGINAL DATE

LAST UPDATED

01/29/08

HB 412

SHORT TITLE Revise Basic Child Support Schedule

SB

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

Administrative Office of the Court (AOC)

SUMMARY

Synopsis of Bill

House Bill 412 implements recommendations of the 2007 New Mexico Child Support Guide-

lines Review Commission to be effective July 1, 2008. As a result of its mandated review, the

Commission proposed an overall moderate upgrade to the guidelines table based on economic

data that has become available since the guidelines were last updated in 1994.

In the bill, the guideline order amounts for the lowest Combined Adjusted Gross Income (up to

$1,250 monthly for one child) are reduced between 2.7% and 13.4%. This was due to an in-

crease in the “self support reserve" for very low income brackets to protect these obligors from

undue hardship due to child support obligations.

The medium Combined Adjusted Gross Income (between $1,350 and $8,550 monthly for one

child) brackets are increased between .1% and 5.4%. The bill also extends the table to account

for combined income levels above $8,000 per month, rather than having flat percentages for the

higher income brackets.

The bill contains some cleanup language changes in the text of the §40-4-11.1. Subsection D.(3)

adds “of the parties" to “children," the proper subsection reference is substituted in section E,

House Bill 412 – Page

2

“that parent’s" replaces “his" in section H, and “the paying person’s" replaces “his" in subsec-

tion J. All of these changes are for clarity and do not change the law’s intent or meaning. The

rest of the changes in the bill are to the Basic Child Support Schedule in section K, including the

instruction changes in Worksheets A and B substituting “TANF" for “AFDC" and rounding to

the nearest $50 rather than to the nearest $100.

The Child Support Guidelines are required to be reviewed every four years per NMSA 1978 §40-

4-11.3 and 45 Code of Federal Regulations §302.56. The current child support guidelines are

codified at NMSA 1978 §40-4-11.1. The 2007 New Mexico Child Support Guidelines Review

Commission was comprised of four New Mexico District Judges, one child support Hearing Of-

ficer, attorneys, CSED staff, and an economist who specializes in child support guidelines.

Economic factors taken into consideration in developing the Commission’s recommendation in-

clude child rearing expenditures and tax rates, utilizing several nationally recognized economic

studies to propose changes to New Mexico’s Guidelines Table.

FISCAL IMPLICATIONS

There are no foreseen fiscal impacts to the state but the bill rather changes personal support obli-

gations.

SIGNIFICANT ISSUES

The AOC offers the following background information.

Federal law mandated that states establish child support guidelines as early as 1984, and was

amended in 1988 to require that states review their guidelines at least once every four (4) years

to ensure that their application results in appropriate child support award amounts both at the

time of the first award and when modifications are made. (42 USC 667) These steps served to

increase the adequacy of child support awards generally, while ensuring the fairness of the

awards and improving the efficiency of the courts in making such awards.

New Mexico’s statutory guidelines were initially established in 1988, and amended in 1991 and

1995. The 1995 guidelines are still being used by the courts to determine parental income in or-

der to provide for the child.

Recently, the Guidelines Commission reviewed the 1995 standards with the concern that since

they have not been updated since the mid-1990s, the guidelines do not reflect increase in mini-

mum wage authorized by both the Legislature and Congress last year, as well as other changes in

the economy and the rising cost of living, particularly the cost today of raising a child. HB 412

would make slight decreases in the lowest income brackets, and moderate increases for the re-

maining income levels. The bill would also set graduated amounts for those earning greater than

$8,000. These adjustments to the State’s child support guidelines will better reflect the current

economic conditions.

The purpose of child support is to assist custodial parents in providing for their child’s well be-

ing. The court evaluates each parent’s ability to pay based on actual income, and uses the Child

Support Guidelines to determine the amount each parent must pay to provide for the basic needs

for the child, including health care, educational expenses, and transportation and communication

House Bill 412 – Page

3

for long distance visitation. The court may, however, deviate from the standards applied if the

amount can be shown to be unjust or inappropriate or other hardship exists, and documented in

the court’s decree.

MW/bb