Fiscal Note - SB 0361 - Child Support Enforcement Act
L.R. NO. 0867-07
BILL NO. HCS for SS for SB 361
SUBJECT: Child Support: Federal Mandates
TYPE: Original
DATE: April 27, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue* ($227,807) ($186,112) ($219,502)
Conservation
Commission Fund $0 (Unknown) (Unknown)
Workers'
Compensation
Fund ($22,550) ($24,676) ($25,297)
Child Support
Enforcement Fund $1,663,944 $9,167,200 $13,595,536
Highway Fund** ($31,323) ($28,891) ($29,623)
Total Estimated
Net Effect on All
State Funds $1,382,264 $8,927,521 $13,321,114
*Numerous unknown costs which could exceed $100,000. Unknown income.
**Unknown income.
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Federal $2,593,536 $19,124,236 $28,224,542
Total Estimated
Net Effect on All
Federal Funds $2,593,536 $19,124,236 $28,224,542
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government* $1,183,592 $2,453,680 $3,328,098
City Highway Fund Unknown Unknown Unknown
County Aid Road
Trust Fund Unknown Unknown Unknown
Local School Unknown or Unknown or Unknown or
Districts (Unknown) (Unknown) (Unknown)
Public Community
Colleges (Unknown) (Unknown) (Unknown)
Partial Net Effect
on Local Funds $1,183,592 $2,453,680 $3,328,098
*Unknown income and costs.
FISCAL ANALYSIS
ASSUMPTION
The following agencies do not expect to be fiscally impacted: Department of
Health, Office of the Governor, Highway & Transportation Employees' and
Highway Patrol Retirement System, Local Government Employees Retirement
System, Joint Committee on Public Employee Retirement, Attorney General,
Department of Public Safety, Department of Transportation, State Public
Defender, and Department of Agriculture.
The following agencies did not respond, but based on previous responses on
earlier versions, Oversight assumes no fiscal impact: Missouri Consolidated
Health Care Plan, Lottery Commission, Gaming Commission, Public School
Retirement System and Sheriff's Retirement System.
The Coordinating Board for Higher Education (CBH) did not respond. Oversight
assumes, based on earlier responses, that the fiscal impact would be zero.
An unknown fiscal impact could be experienced by public community colleges if
they participate in job training or education.
The Department of Economic Development (DED), Division of Professional
Registration (DPR) does not expect to be fiscally impacted. The Division of
Motor Carrier & RR Safety does not expect to be fiscally impacted since many
of the division's applications already require a social security number. The
forms which do not require a social security number could easily be changed,
and basically, for no cost since the division should have time to deplete
its' current supply of forms. The division also accepts applications under
the Single State Registration System. This federal program dictates the
forms used for registrations and renewals and currently requires a federal
employee identification number (FEIN). If the carrier does not have a FEIN
then the social security number is included. These forms would not be
changed.
The Department of Natural Resources (DNR) assumes that it could be impacted
by the requirement that the applicant's social security number be included on
applications; that state agencies provide certain information to the
Department of Social Services (DOS); and that an individual's social security
number be provided for withholding purposes within a shorter time frame.
DNR assumes that the reduction in the amount of time to provide the W-4 form
would be minimal. Requiring the social security number for individuals or
sole proprietorships who obtain licenses or permits or determining if a
license has been issued and issuing a notice of suspension, if applicable,
would not create a significant increase in DNR's workload. It was further
assumed that DOS would work with DNR in using its' existing system to obtain
requested information. However, if DNR's existing system needs to be
modified or a new system developed, the DNR would need additional resources.
Oversight assumes that costs would be minimal and would be absorbed with
existing resources.
The Department of Conservation (MDC) assumes that this proposal could result
in a loss of revenue only if the suspension were in effect for more than one
year. Initially, MDC would not lose any revenue because the applicant would
have already purchased the hunting and/or fishing license and paid the
required license fee. Upon suspension, the amount of the license fee would
not be refunded to the applicant. MDC cannot estimate the number of
applicants which would not be able to obtain a hunting and/or fishing license
as a result of the suspension. Therefore, the amount of lost revenue would
be unknown. The MDC assumes other costs would include modification to the
hunting and fishing permit point of sale system to identify suspended permits
and staffing costs to monitor suspended and reinstated permits. Oversight
assumes that these costs would be minimal and could be absorbed with existing
resources. Minimal costs could also be incurred for providing information on
license holders to other states, upon request, and the change in the time
frame for submitting W-4 forms.
The Department of Mental Health (DMH) assumes that it would be impacted, but
the amount would be unknown. DMH assumes that since section 208.055(1)
requires public assistance recipients to cooperate in establishing paternity
and the majority of its' clients are Medicaid and/or IV-A eligible, all DMH
clients with one or more absent parents would need to have information
compiled. DMH currently has a client tracking system, but the system would
need enhancements which could be accomplished with existing staff. DMH
assumes that the "other information" required would result in a loss of
revenue. Without knowing what "other information" would be requested, DMH
cannot determine the forms needed, the number of man hours required or the
specific enhancements needed to the current system. Not only would facility
personnel need access to this information, but so would DMH providers. While
the DMH assumes that not all clients would need to be tracked, it assumes
that the existing system would need modifications in order to project its
collections and variances for the Office of Administration, Division of
Budget & Planning. Information would be needed to help justify the
variances. Oversight assumes that since the proposal provides that the
Department of Social Services would work with any agency in an attempt to
utilize the agency's existing system to obtain "other information", extensive
modifications would not be required for purposes related to this proposal.
DMH assumes that section 208.005 (2) could result in a loss of Medicaid
revenue as well as an increase in revenue in the form of child support
collections. Section 208.005 (2) provides that a person receiving public
assistance under Title IV-A or Medicaid must assign support rights to the
state. Under Medicaid eligibility rules, when a person enters an DMH
inpatient facility, Medicaid would reduce the reimbursement amount to DMH by
the amount of the child support. DMH assumes that this would cause a loss of
Medicaid revenue. Conversely, if DMH collects the child support this would
represent an increase in revenue to DMH. However, the amount of income would
be unknown. The DMH indicates that it would face an apparent conflict as a
result of section 630.210, RSMo, the Federal Welfare Reform Act, and this
proposal if enacted.
Sections 454.1000 through 454.1023 require the suspension and/or revocation
of various licenses if a non-custodial parent is delinquent in child support
payments. DMH assumes that it could potentially be impacted if its' licensed
professionals or providers would lose their licenses for this reason. DMH
and its' providers employ psychiatrists, clinical psychologists, social
workers, substance abuse counselors, registered nurses and licensed practical
nurses all of whom are licensed. The DMH assumes that it would take 3 to 4
months or longer to re-hire one of these individuals, resulting in the loss
of revenue because it would not be able to bill for services. The DMH also
assumes that all Medicaid and Medicare revenues could be at risk since the
Joint Commission of Accreditation for Hospital Organizations requires each
facility to maintain a particular level of nursing staff. Oversight assumes
that DMH would not lose revenue, with the fiscal impact netting to zero. It
was assumed that if DMH loses an employee due to a license suspension, with
the amount of time the suspension existing being unknown, the employee could
be replaced; thus, allowing DMH to provide services.
The Department of Insurance (INS) assumes that in its current form this
proposal would not have a significant fiscal impact. It is expected that
existing resources could be used to absorb additional responsibilities placed
on the INS. However, if the number of licensees in default are greater than
currently estimated, the INS could need to request an increase in staff
and/or expenditure funding. It is assumed that any expenditures would be
paid from the Insurance Dedicated Fund which is financed by license fees set
by statute. These fees are not indexed for inflation so any increased
expenditures paid from this fund would reduce the fund's balance.
The Department of Corrections (DOC) assumes that this proposal could require
changes to various forms and in reporting procedures, resulting in additional
costs. The costs, however, would be minimal.
The Department of Labor & Industrial Relations (DOL), Division of Worker's
Compensation (WC) assumes that it would need one FTE (Clerk Typist III),
resulting in costs of $28,168 in FY98; $27,852 in FY99 and $28,549 in FY00.
Currently, DCSE files liens for out-of-state agencies, but how many are filed
is unknown. WC assumes that section 454.517 would allow an out of state IV-D
agency to file liens directly with it, creating a duplicative process since
DCSE already has the authority to file liens with it. WC has one person
allocated to process these liens. Since the information to generate lien
notices would have to be entered manually rather than electronically, there
would be an increase in processing time and costs. Based on a conversation
with DCSE, currently out of state liens are not received directly, but a
referral is received and then an order to register must be filed. This is
currently being done through DCSE's interstate unit. This proposal would
mandate that liens from out of state be processed in the same manner as
in-state liens. If DCSE receives the out of state liens and acts as a
clearinghouse for WC then WC conceivably wouldn't incur any new costs.
However, if the out of state liens are sent directly to WC costs would be
incurred. For purposes of this fiscal note, Oversight adjusted costs in
accordance with OA guidelines and ranged costs from $0 or $22,550 in FY98;
$24,676 in FY99; and $25,297 in FY00 for one FTE.
The Division of Employment Security (ES) indicates an unknown fiscal impact
based on the language which requires an obligor to participate in a court
approved plan or work activities. The proposal is silent on ES's
involvement, but many of the work activities as defined in the proposal are
provided by ES. ES assumes that additional staff, programming changes and
software could be required. This could result in a negative impact on its
administrative (i.e., federal) funds as well as general revenue.
Additionally, ES assumes that program changes could be required as a result
of child support being deducted from unemployment benefits. The language
contained in section 454.934 may require every part of the order to be
tracked individually.
The Secretary of State (SOS) assumes that four divisions could be impacted by
this proposal, including Administrative Rules, Information Technology,
Securities, and Commissions.
The Division of Child Support Enforcement (DCSE) would be required to
promulgate administrative rules, but the actual number of pages included in
the Missouri Register and Code of State Regulations would be unknown. This
proposal alone may not result in the need for additional personnel, but the
enactment of more than one similar proposals resulting in a minimal fiscal
impact to the SOS could require an increase in the SOS's appropriation for
this purpose. Currently, the SOS is in the process of automating its system
and as long as the SOS is able to remain on track with its information
strategic plan there would be no additional costs related to this proposal.
However, the fiscal impact could be significant if the SOS fails to remain on
target.
Initially, the SOS anticipates the need for 1 FTE (i.e., Licensing Assistant)
related to processing, notifying and record keeping associated with licensure
suspensions of registered broker-dealers, agents, investment advisors and
investment advisor representatives. Pursuant to section 454.1020, the
Securities Division would be required to provide specific licensing
information to DCSE which is currently being provided by an outside vendor.
Information requested by DCSE would have to be processed manually and
provided in a printed format. Assuming 18,872 license suspensions (i.e.,
based on statistical information provided by DCSE in its response to HB 411),
the SOS assumes that it would need additional staff.
The Commissions Division would be fiscally impacted as a result of its
responsibility for appointing and commissioning notaries public. Depending
upon the volume of licensing actions taken, a portion of an FTE (i.e., .5
Clerk Typist II) would be needed to assist in the processing of suspensions
and updating of division records. Also, information requests from DCSE could
increase the SOS's workload. In the absence of the number of actions and
requests anticipated, Oversight assumes that the increase could be absorbed
with existing personnel.
To the extent that this proposal would permit the licensing authority to
refer an obligor who continues to engage in his/her business, occupation or
profession after being suspended to the appropriate prosecuting or circuit
attorney or attorney general, the SOS's legal department could incur costs.
The proposal does not require the SOS to make such referrals, but it was
assumed that referrals would be made by this office. Given the uncertainty
of the number of referrals, the SOS assumed any additional costs resulting
would be absorbed.
The Department of Social Services (DOS), Division of Legal Services (DLS)
estimates costs based on the need for a total of 5 FTE. Three hearing
officers would be needed to conduct child support administrative hearings
related to establishment, modification and enforcement of child support
orders; one staff attorney would be needed to represent Child Support in
litigation generated by the increased number of hearings; and one clerk
typist III to provide clerical support. It was assumed that there would be a
total hearing caseload of 5,930 in FY96. Using DCSE projected percentages of
increase per year (i.e., 5%, 10% and 15%), DLS assumes it would experience an
increase in the number of child support administrative hearings as follows:
FY98 -296; FY99 - 623; and FY00 - 1,027 for a total of 1,946 over the three
year fiscal note period. The FTE would be phased in to meet the anticipated
increase in hearings.
The DOS, Division of Data Processing (DDP) assumes that it would need two FTE
(i.e., Computer Information Specialist III's) to develop the additional
automated external interfaces and perform enhancements to the MACSS. The FTE
would be responsible for analysis, coding and implementation of DCSE system
changes mandated by law as well as assist the project leads in software
development. There are currently 738,000 cases stored in the model II
system. Of this number 295,041 are active cases. Assuming an average
increase of 10% per year in the number of cases additional disk storage space
would be required.
The Division of Child Support Enforcement (DCSE) would be significantly
impacted by this proposal. DCSE assumes increased revenue from new or
expanded location, paternity establishment, expedited process and enforcement
tools. Location tools would increase efficiency of current operations while
paternity establishment and expedited process would allow more orders to be
established and collected. Additionally, DCSE would require additional FTE
for these functions.
DCSE anticipates increasing efficiency as a result of using social security
numbers (SSN) as a location tool. It was assumed that SSN matches would
increase efficiency by 1%; thus, collections would increase by 1%. Based on
this assumption, collections would be $3,287,996 in FY98; $3,781,195 in FY99;
and $4,355,406 in FY00. DCSE anticipates increasing paternity establishments
by 30% (i.e., 5% in FY98, 10% in FY99; and 15% in FY00) over the next three
years, resulting in increased collections. Currently, 28.57% of the 49,070
orders are paying orders. The average monthly payment is $246.86 (i.e.,
collections as of December, 1996, including any arrearage and lump sum
amounts divided by the number of paying cases). Not only does DCSE
anticipate the percentage paying to increase, but the number of orders
established are expected to increase by the same percentages. This scenario
would be applicable to both Temporary Assistance Needy Families (TANF) and
non-TANF cases. The annual increase in collections would be $51,783,815 in
FY98; $75,750,505 in FY99; and $110,873,588 in FY00.
In addition, DCSE anticipates the need for 175 Technicians, 22 Clerk Typist
II's and 22 DCSE Supervisors. The Technicians would be needed to work the
newly active cases while maintaining a quality level of customer service.
DCSE assumes a projected increase in paying orders of 5% per year with the
projected increase in order establishment being 5% in FY98; 10% in FY99; and
15% in FY00. A staffing ratio of 1:8 was used to determine the number of
supervisors and clerical support needed. Costs are assumed to be six months
for FY98 given the time necessary for implementation. FY99 and FY00 would be
full year costs.
The implementation of welfare reform would also require system enhancements
to the automated child support system (MACSS). Total costs are estimated at
$3.0 million with the cost being split 80% federal and 20% Child Support
Enforcement Fund.
The primary enforcement tool for DCSE would be license revocation. In FY96,
there were 86,749 cases, including active TANF, deactivated TANF and non-TANF
cases which met the criteria for collection (i.e., a minimum arrearage of
$1,000 and no income withholding order currently in place). Analysis of the
data revealed that collections were not being received from 87.02% of active
TANF cases; 87.58% of the deactivated TANF cases; and 67.67% of the non-TANF
cases. DCSE assumes that 75% would start paying on their child support
obligation as a result of this enforcement mechanism. Only six month's worth
of collections was assumed for FY98 since it would take some time to get
staff on board and the program operational. To calculate the increased
collections for FY99 and FY00, an average of case openings was calculated
over an eighteen month period of FY96 and the first six months of FY97.
These collections would be distributed to the Child Support Enforcement Fund
(30.73%); federal funds (38.1%); families (25.17%); and counties (6%). Any
funds remaining in the Child Support Enforcement Fund, and not expended for
DCSE operating expenses, would eventually be transferred to General Revenue
(GR).
In addition to increased collections, DCSE expects to incur costs for
additional postage and the need for FTE. NOTE: In previous versions, DCSE
included costs for contract attorneys. However, based on FY98 budget
recommendations these contract costs have been converted to actual FTE.
These cases (i.e., 42,182, 70,304 and 28,122 respectively for the three
fiscal years) would be accessed and sent notification of potential revocation
by certified mail. It was estimated that it would cost $2.52 per case for
postage (a 3% inflationary factor was included in FY99 and FY00) as well as
an additional $.10 per case for paper, envelopes and copies. Total costs
would be $110,518 in FY98; $189,722 in FY99; and $78,165 in FY00.
DCSE also expects to need additional for attorneys to handle the hardship
driver's license cases. Of the eligible cases, it was assumed that 316
individuals would file for a hardship license in FY98 resulting in 2,531 man
hours; 527 in FY99 resulting in 4,218 man hours; and 211 in FY00 resulting in
1,687 man hours. In addition, DCSE would no longer have administrative
authority to revoke a professional license. DCSE would be required to
prepare cases for revocations, file petitions and try the case before the
courts. It was assumed that there would be 20 cases per hour at 80 hours per
case for a total of 1,600 manhours. Using a three year average, DCSE assumes
that it would need two attorneys for these purposes.
DCSE anticipates the need for additional Clerk Typist II's, DCSE Technicians
and DCSE supervisors to process the new cases. Of the total number of cases
expected per year, DCSE estimates that 25% would not respond to letters while
the other 75% would respond to letters either paying a lump sum amount
(2.37%); requesting a hearing (1.63%); or agreeing to a payment schedule
(96%). It was assumed that it would take 1 hour to process the
non-responding case; 2 hours to process a lump sum case; 4 hours for a
hearing case; and 6 hours for a payment schedule case. The total number of
manhours for each category was determined and totalled then divided by 2,080
manhours per technician. Normally, 1 clerical and 1 supervisor would be
needed for every 8 technicians, but DCSE assumed that a portion of the
technicians requested would become part of existing teams. Since the
majority of the cases would occur during the first two fiscal years, DCSE has
averaged the number of FTE needed over the three fiscal years at 62 (i.e., 7
clerical, 54 technicians, and 7 supervisors). Oversight made some
adjustments to expense and equipment costs in accordance with the OA
guidelines and other determinates.
In order to avoid the illegal transfer of property by an obligated parent,
DCSE can direct liens on real and personal property. In FY98, DCSE assumes
there would be 1,080 liens, with a 20% projected growth in the number of
liens per year. DCSE does not direct liens unless the amount is at least
$2,000. Based on these assumptions, annual collections from liens would be
$2,160,000 in FY98; $2,592,000 in FY99; and $3,110,400 in FY00. It was
assumed that 25% would be TANF collections and 75% non-TANF collections.
DCSE also assumes that it would need one Technician, one Clerk Typist III,
and one attorney to ensure that property is not illegally transferred.
Oversight assumes that the Clerk Typist III would provide support for all
three attorneys requested in this fiscal note.
There are 647 financial institutions in Missouri. In order to perform
financial institution account matches DCSE assumes that it would need two
Technicians to analyze the matches. In addition, DCSE assumes it would
incur CPU costs of $2,000 per month. A 3% inflationary factor was assumed
for the following fiscal years.
The proposal requires DCSE to inform new parents of the rights and
responsibilities associated with paternity establishment. DCSE assumes that
a training video would be developed at a cost of $1,000, with the cost per
tape being $2. Fifteen copies would be distributed to each of the 165
hospitals in Missouri. Twenty-five percent of the tapes would need to be
replaced per year.
Currently, DCSE only makes referrals to credit bureaus if the amount of the
arrearage is over $1,000. Under this proposal, a referral could be made
regardless of the amount of the arrearage. DCSE has determined that its'
policy would be to make referrals on arrearages over $500. For purposes of
this fiscal note, DCSE has estimated costs for the number of orders with
arrearages between $501 and $1,000. A 30% increase was assumed over the
three year period.
A one-time cost for interstate federal forms would be incurred. DCSE assumes
that 25,375 (i.e., number of interstate cases) copies of three different
forms would be required. Paper and printing cost per form would be $.10 for
total costs of $7,612.
DCSE anticipates an increase in Uniform Interstate Family Support Act (UIFSA)
income withholdings notices since both parents would have to be notified
under this proposal. It is assumed that MACSS would increase the number of
income withholding orders to 2,500 in FY98; 2,600 in FY99; and 2,704 in FY00.
The average cost for postage and return receipt fee would be $2.52, with a 3%
inflationary factor included in the following fiscal years. Paper, envelopes
and copies would be $.10 per income withholding. Total costs would be $6,550
in FY98; $7,006 in FY99; and $7,497 in FY00.
DCSE assumes that there would be minimal costs associated with the
establishment of the State Directory of New Hires. Oversight assumes these
costs would be absorbed with existing resources. The cost for the State Case
Registry would be zero. This registry could be incorporated into MACSS. No
costs have been included for the disbursement unit since an evaluation
committee would need to be developed first to assess the most efficient way
to handle collections and disbursements. The proposal provides for
reasonable expenses for the committee members. DCSE assumes that these costs
would be absorbed with existing resources.
DCSE anticipates substantial costs related child support abatement. DCSE
assumes that the projected active caseloads for FY98, FY99 and FY00 would
increase 5%, 10% and 15%, respectively. Of the projected caseload, it was
assumed that 50% of the cases would be affected by abatement of child support
during an obligor's parenting time (i.e., 10% of the year). Therefore, child
support collections would be lost on 10% of 154,184 cases in FY98; 169,602
cases in FY99; and 195,042 cases in FY00. Decrease in TANF collections from
abatement of child support obligation would be $5,087,079 in FY98; $6,432,539
in FY99; and $7,468,367 in FY00.
In addition to lost collections, DCSE would require additional FTE to handle
the abatements. It was estimated that a technician would spend an additional
one-half hour per month per case abating support for affected active cases.
DCSE believes this to be a conservative estimate with a child support
technician spending up to two hours per month abating support. At an
additional half-hour per month, this would equate to 925,101 manhours in
FY98; 1,017,612 manhours in FY99; and 1,170,253 manhours in FY00 and the need
for 448, 493, and 567 FTE, respectively. For purposes of this fiscal note,
DCSE assumes a three year average of 503 FTE required to handle abatement of
child support obligations. Corresponding clerical (63 FTE) and supervisory
support (63 FTE) would be required as well.
As adjusted, total costs would be $34,459,340 in FY98; $30,636,544 in FY99;
and $31,249,561 in FY00. Total TANF collections (i.e., collections
distributed based on certain percentages) adjusted for the decreased related
to abatement would be $14,639,448 in FY98; $34,462,128 in FY99; and
$47,999,935 in FY00.
Oversight assumes that the language requiring social security numbers on
applications and renewals for licenses, certificates and permits would have
minimal impact on numerous agencies. It was assumed that the vast majority
of applications for these items already require a social security number. If
not, the existing supply could be depleted in such a manner as not to need
new forms printed immediately. It was assumed that these costs could be
absorbed with existing resources.
Section 454.10115 would allow a licensing authority to charge the obligor a
reasonable fee for the administrative costs associated with taking action
against an obligor's license. Given the responses received from various
agencies that this would not create any substantial increase in the agency's
workload, Oversight assumes that no fees would be assessed against the
obligor.
The Department of Revenue (DOR) assumes that it would be fiscally impacted by
this proposal. Since the proposal would require the suspension/revocation of
a business license for non-payment of child support, DOR, Division of
Taxation assumes that it would need one FTE (i.e., Taxpayer Services
Representative I) to investigate the business locations, serve revocations,
key necessary computer updates, and send notices to the cities and counties
of the business revocations.
Based on a conversation with the Division of Child Support Enforcement, the
Drivers License Bureau (DLB) can anticipate receiving 50 suspension orders in
FY98 and no more than 100 each subsequent year. At this rate, the Bureau
could absorb the increase, but should the volume prove to be more than
expected, it could have a significant impact on the Bureau. The provisions
of this proposal also mandate a $20 reinstatement fee following a driver's
license suspension. DOR assumes there would be no measurable increase in the
Highway Fund, the City Highway Fund, or the County Aid Road Trust Fund.
Since the reinstatement fee would be contingent upon the termination of the
stay, Oversight has shown income to the above referenced funds as unknown.
DOR's Information Systems Division assumes that it would be able to utilize
its' MITS system for the suspended or revoked business licenses. This system
would be able to revoke the business license and terminate the account
without any modifications.
The proposal would require applications and registrations for any motor
vehicle or trailer to contain an applicant identification number. DOR
currently does not have such an identification number. However, based on a
conversation with DOR, it was assumed that existing resources would be used
to absorb any related costs.
DOR estimates total costs of $33,863 in FY98, $31,462 in FY99; and $32,226 in
FY00. Oversight adjusted these totals to reflect an effective date of July
1, 1997, and assumed that rental costs would not be incurred since the one
FTE could be located in an existing facility. As adjusted costs would be
$31,323 in FY98; $28,891 in FY99; and $29,623 in FY00.
MOSERS assumes that this proposal would have no fiscal impact. Sections
104.540, 287.820 and 476.688 provide that any annuity, benefits, funds,
property or rights created or accrued would not be subject to execution,
garnishment, attachment, writ of sequestration or any other claim whatsoever.
This language would preclude the garnishment of a retirement or disability
benefit. However, this proposal would mandate that any disability or
retirement benefit would be subject to withholding. As plan administrator,
MOSERS assumes that it would garnish a disability or retirement benefit if
this proposal were enacted. MOSERS believes that clarification on whether
this requirement is applicable to both public or private pensions would be
helpful.
The Office of Administration (OA), Division of Accounting assumes that it
could be fiscally impacted. The change in the number of days to report a W-4
form would have a minimal impact as would the decrease in the number of
processing days (10 to 7 days) for withholding orders. The decrease in the
number of processing days could require additional staff time, but it would
not be sufficient enough to justify an additional FTE. In HB 1403 (1996), OA
requested an FTE to review incoming child support orders; determine
withholding maximums as it pertains to the issuing state; and determine any
additional withholding codes, if necessary. According to the division, this
FTE could handle the difference in workload resulting from the decrease in
processing days as well as the duties identified in HB 1403, but this FTE has
not been requested yet.
Additionally, as a result of HB 1403, the division made some system
modifications to handle out of state orders. This provision became effective
January, 1997, and to date, the division has only received two orders. The
division assumes, based on the language contained in section 454.934, that
its' system would have to be modified again if the intent is for every part
of the order to be tracked individually. Costs would be $127,000 in FY98;
$27,000 in FY99; and $27,000 in FY00.
The Department of Elementary & Secondary Education (DES) assumes that it
could be fiscally impacted by the provisions which require public assistance
recipients receiving services such as rehabilitation instruction, job
training, education or counseling to cooperate in establishing paternity and
participate in work activities such as vocational education training, job
skills training or attending secondary school. DES assumes that more
applicants could enroll in its' adult vocational education classes. This
would be an unknown cost to the department. More adults could also be
enrolling, part time or temporarily, in a GED program. This cost would be
incurred by the school districts and would be unknown.
The Office of State Courts Administrator (CTS) assumes that since this
proposal would provide DCSE with additional avenues for collecting child
support and because the courts are often involved either through an increase
in the number of cases filed or new duties for clerks, there could be the
potential for a significant impact on the workload of the judiciary. Given
the absence of data from DCSE on the number of times the provisions might
expect to be used, it is not possible to provide an actual estimate of the
fiscal impact. However, the immediate fiscal impact would likely be offset
in the future if a centralized child support collection and disbursement unit
is created. For purposes of this fiscal note, Oversight has shown unknown
costs for FY98 and FY99 and unknown savings for FY00 related to this
component.
The proposal also contains a provision which would grant child support credit
to the non-custodial parent based on visitation time and abate the child
support obligation during visitation periods if no formal order provides for
such time. The CTS assumes that there could be a significant number of
disputes regarding abatement; thus, increasing the workload of the courts.
In FY96, there were more than 360,000 open child support accounts. Even a
small percentage of cases involved in additional disputes would affect the
CTS workload. For purposes of this fiscal note, Oversight has shown an
unknown cost for this component.
The proposal would provide that any employer who intentionally fails to
submit information on an employee as required would be guilty of an
infraction and fined not more than $25 each time. If a conspiracy between
the employer and employee exists the fine would be $200 for each failure to
report, each false report or incomplete report. An employer could also be
fined in an amount not to exceed $500 for discharging, refusing to hire or
otherwise disciplining an employee because of an income withholding order.
The income generated from these fines would go to local school districts.
The amount would be unknown.
The non-custodial parent could be assessed costs and reasonable attorney's
fees if the court determines that the non-custodial parent has an interest in
an affected joint account. The costs assessed in these situations would be
considered court costs and would be considered income at the local level.
However, the amount would be unknown. The attorney's fees would be paid to
the other party involved and are not reflected in the fiscal note.
The City of St. Louis Circuit Attorney assumes that any cost to the city
would be directly related to the number of license suspended by the DCSE.
The cost would be approximately $100 per case. Oversight has shown the costs
as unknown.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
GENERAL REVENUE
Income-Department of Mental Health
Child Support Collections in Lieu of
Medicaid Reimbursements Unknown Unknown Unknown
Savings-Office of State Courts Administrator (CTS)
Decrease in Child Support Activities
After Establishment of Centralized
Disbursement Unit $0 $0 Unknown
Costs-Office of State Courts Administrator (CTS)
Increase in Workload Resulting
from Child Support Mandates (Unknown) (Unknown) $0
Costs-Department of Labor & Industrial Relations
Division of Employment Security (ES)
System Modifications and Work Activities* (Unknown) (Unknown) (Unknown)
Costs-Secretary of State (SOS)
Personal Service (1 FTE) ($19,496) ($19,983) ($20,483)
Fringe Benefits ($5,562) ($5,701) ($5,844)
Expense and Equipment ($4,390) ($309) ($318)
Total Costs-SOS ($29,448) ($25,993) ($26,645)
Costs-Department of Social Services
Division of Legal Services (DLS)
Personal Service (3 FTE) ($29,709) ($68,865) ($90,273)
Fringe Benefits ($8,476) ($19,647) ($25,755)
Expense and Equipment ($13,002) ($26,129) ($30,878)
Total Costs-DLS ($51,188) ($114,640) ($146,905)
Costs-Department of Social Services
Division of Data Processing (DDP)
Personal Service (.40 FTE) ($12,275) ($12,582) ($12,897)
Fringe Benefits ($3,502) ($3,590) ($3,679)
Expense and Equipment ($4,394) ($2,307) ($2,376)
Total Costs-DDP ($20,171) ($18,479) ($18,952)
Costs-Office of Administration (OA)
Division of Accounting
Modifications to Computer System
to Track Components of an Order ($127,000) ($27,000) ($27,000)
Costs-Department of Elementary & Secondary Education (DES)
Increase in Enrollment for Adult
Vocational Education Classes (Unknown) (Unknown) (Unknown)
PARTIAL ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND ($227,807) ($186,112) ($219,502)
*Unknown costs could exceed $100,000.
CONSERVATION COMMISSION FUND
Loss-Department of Conservation (MDC)
Hunting and/or Fishing License Suspended
for More than One Year $0 (Unknown) (Unknown)
PARTIAL ESTIMATED NET EFFECT
ON CONSERVATION COMMISSION
FUND $0 (Unknown) (Unknown)
WORKERS' COMPENSATION FUND
Costs-Department of Labor & Industrial Relations
Division of Workers' Compensation (WC)
Processing of Out of State Liens $0 $0 $0
or or or
($22,550) ($24,676) ($25,297)
ESTIMATED NET EFFECT ON 0 $0 $0
WORKERS' COMPENSATION FUND* or or to
($22,550) ($24,676) ($25,297)
CHILD SUPPORT ENFORCEMENT FUND
Income
Increase in Child Support Collections $6,061,962 $12,566,931 $17,045,409
Costs-Department of Social Services
Division of Child Support Enforcement (DCSE)
Personal Service (99.96 FTE) ($2,132,541) ($2,191,833) ($2,246,629)
Fringe Benefits ($608,414) ($625,330) ($640,963)
Expense and Equipment ($1,057,063) ($582,568) ($562,281)
Total Costs-DCSE ($3,798,018) ($3,399,731) ($3,449,873)
MACSS Enhancements ($600,000) $0 $0
ESTIMATED NET EFFECT ON
CHILD SUPPORT ENFORCEMENT FUND $1,663,944 $9,167,200 $13,595,536
HIGHWAY FUND
Income
Driver's License Reinstatement Fee Unknown Unknown Unknown
Costs-Department of Revenue (DOR)
Division of Taxation
Personal Service (1 FTE) ($20,086) ($20,588) ($21,103)
Fringe Benefits ($6,170) ($6,325) ($6,483)
Expense and Equipment ($5,067) ($1,978) ($2,037)
Total Costs-DOR ($31,323) ($28,891) ($29,623)
ESTIMATED PARTIAL NET
EFFECT ON HIGHWAY FUND ($31,323) ($28,891) ($29,623)
FEDERAL
Income
Increase in Child Support Collections
Fund 610 $7,515,807 $15,580,868 $21,133,423
Fund 162 $4,965,167 $10,293,188 $13,961,372
Costs-Department of Social Services
Division of Child Support Enforcement (DCSE)
Personal Service (194.04 FTE) ($4,139,639) ($4,254,735) ($4,361,103)
Fringe Benefits ($1,181,039) ($1,213,876) ($1,244,233)
Expense and Equipment ($2,051,946) ($1,130,867) ($1,091,487)
Total Costs-DCSE ($7,372,624) ($6,599,478) ($6,696,813)
MACSS Enhancements ($2,400,000) $0 $0
Costs-Department of Labor & Industrial Relations
Division of Employment Security (ES)
System Modifications and Work Activities* (Unknown) (Unknown) (Unknown)
Costs-Department of Social Services
Division of Legal Services (DLS)
Personal Service (2 FTE) ($19,806) ($45,910) ($60,182)
Fringe Benefits ($5,651) ($13,098) ($17,170)
Expense and Equipment ($8,668) ($17,419) ($20,585)
Total Costs-DLS ($34,125) ($76,427) ($97,937)
Costs-Department of Social Services
Division of Data Processing (DDP)
Personal Service (1.60 FTE) ($49,102) ($50,329) ($51,587)
Fringe Benefits ($14,009) ($14,359) ($14,718)
Expense and Equipment ($17,578) ($9,227) ($9,198)
Total Costs-DDP ($80,689) ($73,915) ($75,503)
PARTIAL ESTIMATED NET EFFECT ON
FEDERAL FUNDS $2,593,536 $19,124,236 $28,224,542
*Unknown costs could exceed $100,000.
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
LOCAL GOVERNMENT
Income
Court Costs Assessed Unknown Unknown Unknown
Income
Reimbursement to Counties
for Child Support Activities $1,183,592 $2,453,680 $3,328,098
Costs-St. Louis City Circuit Attorney
License Suspensions* (Unknown) (Unknown) (Unknown)
PARTIAL ESTIMATED NET EFFECT
ON LOCAL GOVERNMENT $1,183,592 $2,453,680 $3,328,098
*Unknown costs.
CITY HIGHWAY FUND
Income
Driver's License Reinstatement Fee Unknown Unknown Unknown
ESTIMATED NET EFFECT ON
CITY HIGHWAY FUND Unknown Unknown Unknown
COUNTY AID ROAD TRUST FUND
Income
Driver's License Reinstatement Fee Unknown Unknown Unknown
ESTIMATED NET EFFECT ON
COUNTY AID ROAD TRUST FUND Unknown Unknown Unknown
LOCAL SCHOOL DISTRICTS
Income
Fines Assessed Unknown Unknown Unknown
Costs
Increase in Enrollment for
GED Program (Unknown) (Unknown) (Unknown)
ESTIMATED NET EFFECT ON Unknown Unknown Unknown
LOCAL SCHOOL DISTRICTS or or or
(Unknown) (Unknown) (Unknown)
PUBLIC COMMUNITY COLLEGES
Costs- Public Community Colleges
Job Training and/or Education (Unknown) (Unknown) (Unknown)
ESTIMATED NET EFFECT ON
PUBLIC COMMUNITY COLLEGES (Unknown) (Unknown) (Unknown)
FISCAL IMPACT - Small Business
This proposal could have a direct fiscal impact on small businesses related
to administrative costs for tracking each component of an income withholding
order separately.
DESCRIPTION
The proposal would make changes to child support enforcement laws to meet new
federal mandates. The primary components include the following:
The name of the husband would be entered on the birth certificate unless
paternity has been established by a court or affidavits have been executed to
the contrary.
The birth certificate of a child born to unmarried parents would not include
the father's name unless there is an acknowledgement of paternity or
paternity has been established by a court or administrative order.
Social security numbers would be included on death certificates; orders
establishing the existence or non-existence of the parent/child relationship;
federal W-4 withholding forms; applications for marriage licenses;
dissolutions; occupational, professional or recreational licenses not under
the Department of Economic Development; liens; other licenses; and
applications for notary publics.
The paternity acknowledgement form, including provisions to change the
child's surname, would be developed by the state registrar and would be
accompanied with oral and written notice of the responsibilities and rights
associated with it.
All rescissions would be filed by the Bureau of Vital Records with a copy
being forwarded to the Division of Child Support Enforcement (DCSE).
The Department of Health (DOH) would be required to offer voluntary paternity
establishment services.
Conditions would be established that a person who has applied for or is
receiving public assistance under Part A or Title IV, Title XIX or the work
first program would be required to meet.
Public assistance would be defined and would not include a non-cash benefit
or a short-term benefit.
A signed acknowledgement of paternity would be considered a legal finding of
paternity and could only be challenged in court based on fraud, duress or
material mistake of fact after a certain time.
Temporary support orders would be issued by the court if there is clear and
convincing evidence establishing a presumption of paternity under section
210.822 or an acknowledgement pursuant to section 210.823.
The right to trial by jury in paternity proceedings would be repealed.
In civil actions copies of any paid or unpaid bills for pregnancy, childbirth
or genetic testing would be admitted as evidence, without third party
foundation, if submitted to all parties not less than seven days prior to
trial, with the copies constituting prima facie evidence of the amounts
incurred.
Federal W-4 or equivalent forms for newly hires would be transmitted to the
Department of Revenue within 20 days or two monthly transmissions if
electronically.
A data base known as the "State Directory of New Hires" would be established
with the Department of Revenue forwarding information, weekly, to the
Division of Child Support Enforcement, the National Directory of New Hires,
other state agencies or contractors of the division.
Penalty provisions would be created for employers who intentionally fail to
submit information on employees required by section 285.300 or 285.304.
Applications and registrations for vehicles and trailers must contain an
applicant identification number.
No insurer could cancel or refuse to renew a policy due to suspension of an
operator's or chauffeur's license due to child support arrearages or failure
to comply with a subpoena.
Marriage license applications must contain the applicant's social security
number, but would be considered a closed record and exempt from public
examination.
The court would enter temporary support orders pending final judicial
determination in dissolutions or separations if there is a clear and
convincing evidence establishing a presumption of paternity.
Child support would be abated for periods of time of 28 consecutive days or
longer if the non-custodial parent is the primary care giver, unless the
court has already considered or provided for visitation.
In proceedings where support could be established or modified for an
applicant or recipient of child support, notice pursuant to Rule 41 of the
Missouri rules of civil procedures would be provided by any other party and a
copy of any order would be mailed by the court within 14 days.
The court would be required to modify support orders in accordance with
Supreme Court guidelines and criteria if the amount in the current order
differs from the amount which would be awarded in accordance with the
guidelines as long as there is no showing of substantial and continuing
change in circumstances.
Child support cases would not be considered transferred if another state
requests assistance, but records would be maintained by the Division of Child
Support Enforcement.
The powers, duties and functions of the Division of Child Support Enforcement
would be expanded including a review every three years or shorter if the
division establishes such.
The director of the Division of Child Support Enforcement would have the
power to administer oaths, issue subpoenas, compel witnesses and to require
the production of books, accounts, documents and evidence.
The Division of Child Support Enforcement would establish a "State Case
Registry".
Child support services could be provided to children, custodial parents,
non-custodial parents and others persons entitled to receive support and
would be provided, under a state plan, to residents of other states on the
same terms as residents of this state.
Procedures would be established for locating and obtaining financial
information as it relates to establishing paternity or establishing,
modifying or enforcing support orders.
If an assignment of support has not been made and physical custody is
relinquishes to a caretaker relative, the Division could direct the obligor
or other payor to change the payee to the caretaker relative or appropriate
state agency.
Procedures would be developed to allow an aggrieved person contesting a
finding of financial responsibility.
The director of the division could enter an order requiring genetic testing,
with refusal to comply constituting civil contempt.
An obligor could be required to pay support in accordance with a court
approved plan or participate in work activities.
Administrative orders filed with the court by DCSE would not need to contain
an attorney signature, as provided by supreme court rule, or require any
further pleadings.
Procedures would be established for conducting reviews of orders.
Procedures for initiating and contesting income withholding orders would be
established.
Penalty provisions would be established related to employer actions with
withholding orders.
The division would enter into agreements with financial institutions to
develop and operate a data match system using automated exchanges at a
reasonable fee.
Procedures would be established for issuing and releasing liens, with penalty
provisions.
Passports could be denied, revoked, suspended or limited due to child support
arrearages.
Periodic reports of non-custodial parents who are delinquent in support and
the amount owed would be reported to consumer reporting agencies.
Notification would be required by an attorney to an applicant or recipient
who is a party to a proceeding, but not represented by an attorney.
A disbursement unit for collections and disbursements would be established
and operated on or before October 1, 1999.
Health benefit plans would be mandated in IV-D cases.
The child support automated system (MACSS) would be installed and operational
by October 1, 1997, for all requirements mandated under federal law up to and
including the Family Support Act of 1988, as amended. The system would be in
accordance with the Personal Responsibility and Work Opportunity
Reconciliation Act, as amended, by October 1, 2000, unless extended under
federal law.
Procedures would be established to determine which child support order (i.e.,
within state or from another state) is controlling.
If a responding state has not enacted the Uniform Interstate Family Support
Act or a substantially similar law or procedure, a tribunal of this state
could issue a certificate or other documents and make findings required by
the law of the responding state.
Procedures would be established to deal with income withholding orders from
other states.
Procedures would be established for registering orders from other states.
Procedures would be established for contesting the validity or enforcement of
a registered order by a non-registering party.
Conditions for modifying orders from other states would be established.
The Governor could request extradition of individuals for non-support.
Sections 454.850 to 454.997 could be cited as the "Uniform Interstate Family
Support Act" with the provisions of this act being severable and becoming
effective July 1, 1997, or upon its passage and approval, whichever occurs
later.
The provisions of sections 454.850 to 454.997 of this proposal would be
severable.
Procedures would be established for suspending an obligor's license with
penalty provisions and for terminating a stay and reinstating a license.
Procedures would be established for hardship or restricted licenses.
All state licensing authorities would be required to provide specified
information to the Division of Child Support Enforcement.
A cooperative agreement would be entered into with the Supreme Court to
obtain a list of persons currently licensed to practice law in this state.
A cooperative agreement would be entered into by DCSE and the Department of
Conservation regarding the suspension of hunting and fishing licenses.
The suspension or other sanctioning of a law license would be permitted for
any person who owes an arrearage in an amount equal to or greater than three
months of support or $2,500, whichever comes first
Every application for a license, certificate or permit or renewal would be
required to contain a social security number.
A court could decline jurisdiction in a modification proceeding if clearly
inconvenient to either party of the proceeding; thus, resulting in a change
of venue.
Any action challenging a rule promulgated pursuant to this act would require
the agency to prove by a preponderance of the evidence that the rule is
valid, authorized by law, not in conflict with law, and not arbitrary or
capricious.
All rules promulgated pursuant to section 486.255 would expire on August 28th
of the year after becoming effective, unless extended by the General Assembly
The provisions of section 486.255 would terminate if legislation amending
section 536.024, RSMo, has been signed into law prior to the effective date
of this act.
This proposal would become effective July 1, 1997, or upon its passage and
approval, whichever occurs later.
This legislation is federally mandated, would not duplicate any other
program, but would require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Health
Department of Social Services
Department of Mental Health
Department of Labor & Industrial Relations
Department of Revenue
Department of Insurance
MOSERS
Highway & Transportation Employees' and Highway Patrol Retirement System
Department of Conservation
Department of Economic Development
Department of Corrections
Office of State Courts Administrator
Office of the Governor
Attorney General
Department of Transportation
Department of Natural Resources
State Public Defender
Department of Elementary & Secondary Education
Department of Public Safety
Department of Agriculture
Joint Committee on Public Employee Retirement
Local Government Employees Retirement System
Secretary of State
Office of Administration
St. Louis City Circuit Attorney
NOT RESPONDING: Missouri Consolidated Health Care Plan, Lottery Commission,
Coordinating Board for Higher Education, Gaming Commission, Public School
Retirement System, Sheriff's Retirement System
This Fiscal Note is not an official copy and should not be quoted or cited.