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Child Support Report - November 1995South Dakota Drivers License Restriction Law Upheld Careful Drafting Can Head Off Legal Challenges DOD Consolidates Garnishment Operation FYI--Census Report: Fewer Americans Moving License Revocation Begins in Texas, Oklahoma, and Indiana FYI--Census Report: Single Parent Growth Rate Stabilizes CSR Bankruptcy Reform Act of 1994 Region II Sponsors Parental Responsibility Media Contest Trainers Praise TOT Course South Dakota Drivers License Restriction Law UpheldReturn to contents In September, 1995 the United States District Court for the Southern District of South Dakota upheld South Dakota Codified Law 32-12-116. This statute restricts the issuance or renewal of an individual's drivers license if the person has accumulated child support arrearages in the sum of $1,000 or more. "When you start taking away the ability and privilege to drive, it tends to get immediate attention." ........David Braun David Braun, Special Assistant Attorney General for the State of South Dakota and lead counsel in defense of the statute, expressed pleasure with the court's decision and said, When you start taking away the ability and privilege to drive, it tends to get immediate attention when other enforcement measures did not. Braun points out that South Dakota's child support collections have increased over 30 percent since implementation of the statute in November, 1993. Although it is not certain how much of this increase may be attributable to the new law, estimates range up to $5 million over the past two years. To date, only seven drivers licenses have been revoked, while approximately 4,000 repayment agreements have been reached with delinquent obligors and numerous lump sum payoffs have been received. In bringing the challenge to a drivers license restriction law, the three plaintiffs in Thompson v. Ellenbecker sought to have the law declared unconstitutional, alleging that it did not provide procedural or substantive due process protection and that it violated the equal protection clause of both the federal and state constitutions. The federal district court rejected the procedural due process challenge, finding that proper notice and the right to a hearing had been provided by the State. The charge that equal protection under the law had been violated also failed, in part, because no suspect classificationsuch as one based on race, sex, or national originwas involved. A suspect classification would have warranted strict scrutiny of the new law. South Dakota merely had to show the federal district court that there was a reasonable nexus, or connection, between denying a drivers license and enforcing the timely payment of child support. Opponents of license restriction laws have concentrated their challenges on the substantive due process issue, i.e., whether or not the state can show that there is a reasonable basis for the statute. "When dealing with legislation that does not infringe upon a fundamental right, all that is required is that the means used bear a rational relationship to a legitimate state interest." ..................Mark Fondacarro The "no nexus" argument, according to Dr. Mark Fondacarro of the University of Nebraska, who has been tracking legal challenges to license restriction and revocation laws, can be summarized as follows: "According to modern substantive due process analysis, when dealing with legislation that does not infringe upon a fundamental right, all that is required is that the means used, in this instance license revocation, bear a rational relationship to a legitimate state interest in this case the collection of child support." Because restricting a drivers license does not involve a fundamental right, the rati onal basis test applies. The court upheld the validity of the South Dakota statute since restriction of a drivers license bears a rational relationship to a legitimate state interest in the nonpayment of child support. Among other things, the state is able to ascertain a delinquent obligor's current address when he or she seeks to obtain or renew a drivers license. South Dakota also argued, and the federal court agreed, that some of the most difficult collection cases facing a IV-D agency involve obligors who, to avoid payment of s upport, move from job to job and from state to state. David Braun is convinced that encouraging compliance with child support orders by way of license restrictions is both an effective and legitimate enforcement remedy. By inhibiting a person's ability to drive with a license restriction statute, the IV-D agency is able to collect child support in many of the most difficult cases. Careful Drafting Can Head Off Legal ChallengesReturn to contents What can a state do when drafting legislation to discourage legal challenges based on substantive due process? In order to satisfy the requirements of the rational basis test, Mark Fondacarro advises that the state's legitimate interests in child support enforcement should be expressed explicitly in the legislative purpose of any license revocation bill. In particular, language encouraging the use of all proven techniques for the enforcement of support orders and encouraging license holders to comply wi th their legal obligations should be stated as specific purposes of the legislation. To minimize procedural due process challenges, he recommends that notice of potential license restrictions be provided to delinquent obligors by certified mail. Ample opportunity to be heard should be provided through both administrative review and the opportunity for judicial review. And hearings should be conducted before licenses are actually revoked or suspended in order to ensure that the constitutional requirements of procedural due process are satisfied. In South Dakota, the state even granted a six-month temporary permit to all delinquent obligors to avoid unnecessary hardship and to allow time for administrative reviews and judicial challenges. According to David Braun, The six month temporary permit is a very good idea for any state considering such legislation. Including some type of temporary license provision also makes it much easier to sell this type of statute to legislators, he adds. DOD Consolidates Garnishment OperationBy: Jack Shaw Return to contents When Congress passed a law in the late 1970s allowing garnishment of federal pay for child support and alimony, fewer than 1,000 cases a year were affected. That figure has jumped to more than 3,500 a month. This has led the Department of Defense to consolidate its garnishment operations at the Defense Finance and Accounting Service (DFAS) in Cleveland. According to Rod Winn, director of the garnishment division, The effort is designed to be cost-effective and provide a standardized rev iew process. For the states sending in income/wage withholding notices, this means reduced check-processing timegood news for custodial parents. Prior to the consolidation of all active duty military child support cases at DFAS-Cleveland, each service reviewed its own orders and had its own policy for making paymentspayments which were often late in arriving. But since October 1, 1995 support orders received by DFAS-Cleveland are processed immediately and notices are sent to the appropriate military pay cen ter to start payments in the first pay cycle available. If you have any questions, contact a DFAS customer service representative at (216) 522-5301. Jack Shaw is Military Liaison in OCSE's Division of Program Operations. He will work with you and your Regional Office staff to help resolve military issues not resolved at the local level. FYI--Census Reports: Fewer Americans MovingReturn to contents [Note: As CSR readers are aware, interstate cases make up about one-third of the child support enforcement caseload. The following information from the Census Bureau may be of interest.] Nearly 43 million U.S. residents moved between March 1993 and March 199426.6 million of them within the same county--the Census Bureau reports. But the 16.7 percent of the population one year old and over who moved was well below the 20.2 percent who moved in 1984-85. Annual mobility rates hovered around 20 percent during most of the 1950s and 1960s. With the exception of the short-term spurt in moving in 1984-85, the percentage of movers has declined gradually over the last quarter of a century. In the previous period from March 1992 to March 1993, 16.8 percent of the population moved. Of the total number of movers in 1993-94, 8 million persons moved between counties in the same state, nearly 7 million moved to another state, and 1.2 million moved to the United States from abroad. Regionally, the Northeast had the lowest overall moving rate (11.6 percent), well below the national rate of 16.7 percent. The West and the South had overall mobility rates higher than the national rate20.2 percent and 18.1 percent, respectively. Fueling the United States' still relatively high mobility rate are the young. More than one-third (35.6 percent) of persons 20-24 years old and 30.7 percent of 25-29 year-olds changed residences during the 12-month period in 1993-94. Moving rates decline with age. The least footloose of any age group in 1993-94 were persons over 75 years old, of whom about 5 percent moved. For information about this report, contact the Census Bureau's Customer Services Branch at (301) 457-4100. License Revocation Begins in Texas, Oklahoma, and IndianaReturn to contents The Texas license suspension law, which took effect September 1, 1995 is proving to be extremely worthwhile, according to Attorney General Dan Morales. Between August 24, 1995, when the first warning letters went out, and October 13 $2.4 million was collected from more than 9,000 noncustodial parents who were sent letters. In the week before the law went into effect, more than $97,000 was collected. The law gives the Office of the Attorney General authority to suspend the professional, driving, and recr eational licenses of parents who are more than 90 days delinquent in child support. The response thus far is encouraging because it means that more children will have the basic necessities they need, Morales said. At the same time it is discouraging because it reveals that many parents do not support their children because they choose not to do so, not because they cannot afford to support them. In preparation for license suspension, the Child Support Division of the Attorney General's Office met with the 5 6 licensing boards and agencies in Texas subject to the new law and explained its procedures. All the agencies received extensive press packets to educate them on the new law, due process requirements to be met by proper service and hearing, and the state's child support enforcement program. On August 24, warning letters were sent to more than 75,000 noncustodial parents. At the same time, a temporary license suspension phone bank was set up in Austin, where specially trained child support enforcement emplo yees staffed 50 telephone lines to answer calls and arrange payment plans from noncustodial parents who received the warning letters. The careful preparation paid off. In the week before the law went into effect, more than $97,000 was collected. The intent, Morales says, is to obtain voluntary compliance. We expect the threat of license suspension to encourage voluntary compliance with the law. The measure of our success will not be based on how many licenses we suspend but on how many noncustodial parents begin to pay. Those who refuse to cooperate will be required to appear before an Administrative Hearing Officer. If a noncustodial parent is found to be delinquent at the hearing and enters into a repayment agreement, the license can be kept subject to suspension. However, if a repayment agreement is not entered, the final order to suspend is sent to the appropriate licensing agency and the license is suspended. Decisions made by administrative judges can be appealed at the district court level. Cases such as those handled by domestic relations offices, private attorneys, and private child support collection agencies, also can be processed for license suspension through the courts. OklahomaEffective November 1, 1995 a new law went into effect that allows for the suspension or revocation of drivers licenses for failure to pay child support. This expands 1993 legislation that allowed for suspension or revocation of professional or occupational licenses.When parents refuse to support their children, society pays the price. ........Paula Wood Under the new statute, drivers licenses are included, as well as any license, certificate, registration, permit, approval, or other similar document issued to an individual by a licensing board to engage in a business, occupation, or profession. When parents refuse to support their children, society pays the price, said Paula Wood, Administrator of Oklahoma's Child Support Enforcement Program. This is another r impress upon those parents who continually ignore their court ordered obligations to support their children, Wood added. The district or administrative court has been granted the authority to enter an order to revoke or suspend a license after the nonpaying parent has been given notice and opportunity for a hearing. The noncustodial parent is given every right of due process, said Wood. Before an order to suspend or revoke a license is entered, the noncustodial parent will be given an opportunity to show the court that he or she does not owe past-due child suppo rt. In cases of undue hardship, the court may place the noncustodial parent on probation. Probation allows the noncustodial parent to continue to practice his or her profession, occupation, or business so long as he or she abides by the probation agreement to make payments. While on probation, if the parent fails to make a payment, the license may be suspended or revoked automatically. When a drivers license is suspended or revoked, the court may modify the order to allow restricted driving privileges. Befo re the modification can occur, the noncustodial parent must pay a modification fee. Some restricted privileges include driving to and from work to maintain employment, going to a hospital or doctor in the event of a medical emergency, or attending a college or university to continue an education. This remedy will provide a means to show parents that when they ignore their financial obligation to their children, they may lose their privileges to drive and practice their business, said Wood. IndianaOn September 26, 1995 Indiana Governor Evan Bayh issued a final warning to noncustodial parents $2,000 in arrears or three months behind in child support payments that they were in danger of losing their drivers or professional licenses for nonpayment of child support. This October, Governor Bayh said, parents who have abandoned their families, disregarded their responsibilities, and cost taxpayers millions of dollars must either start paying or start walking.To avoid losing their licenses, these parents must eithe r pay their debt in full or agree to wage withholding, including arrearages and current support owed. "Parents who have... disregarded their responsibilities ...must either start paying or start walking. .....Governor Bayh" A parent may request a hearing with the state child support division to contest the debt. Prior to license suspension, delinquent parents can either be served with a subpoena personally or contacted and warned by the county prosecutor or one of the appropriate licensing bureaus. FYI--Census Report: Single Parent Growth Rate StabilizesReturn to contents The growth rate of single parents was nearly 4 percent a year in the first half of the 1990s, according to the Census Bureau report, Household and Family Characteristics: March 1994. But that rate, which establishes a trend for the remainder of the present decade, was not significantly different from the rate of the 1980s. There were an estimated 11.4 million single-parents in 1994 about 9.8 million mothers and 1.6 million fathers. Of the 11.4 million, 9 million owned or rented their own home, 1.8 milli n lived in a relative's home, and about 600,000 lived in the home of a nonrelative. About 38 percent of single parents in 1994 had never been married, and roughly the same proportion were divorced. The numerical decline in 2-parent families that began in the 1970s and stabilized in the 1980s appears to have reversed during the first half of the 1990s. There were about 25.1 million married-couple families with children in the United States in 1994, an increase of about 521,000 since 1990, the report said. La rge families (with 3 or more children at home) are not as prevalent as in 1970 but also have shown signs of a slight resurgence. Large families fell from 10.4 million in 1970 to 6.5 million in 1990 but rebounded to 7.1 million in 1994. Census Bureau reports are available for a nominal fee. Orders should be directed to the Bureau's FastFax at 1-900-555-2FAX, the customer service office at (301) 457-411, or the regular fax at (301) 457-3842. CSR Bankruptcy Reform Act of 1994By: Susan Notar Return to contents Over the years, numerous shifts in bankruptcy law have had an impact on child support enforcement proceedings and provided IV-D practitioners with challenges and opportunities. The Bankruptcy Reform Act of 1994 (P.L. 103-94) provides increased protection for debts owed to the children and former spouses of debtors in bankruptcy. Here is information on its child support/domestic law aspects. Question: How does the Act treat paternity establishment and other support actions under the automatic stay pro vision of the Bankruptcy Code? Answer: The Act exempts actions for paternity establishment and those to establish or modify alimony, maintenance, or support from the scope of the automatic stay by amending 11 U.S.C. 362(b)(2). It exempts actions to collect alimony, maintenance, or support from property that is not property of the bankruptcy estate. Accordingly, actions to establish paternity or to establish or modify alimony, maintenance, or support are not subject to the automatic stay in the first place, and, therefore, a child support practitioner need not move for relief from the stay. Before this amendment was enacted child support practitioners generally had to stop paternity and child support order establishment proceedings and could not register judgments or file URESA actions because the stay was in place. Question: Does the Act give greater priority for child support claims when a bankruptcy estate is liquidated? Answer: Yes, it improves the status of claims for debts owed for child support and alim ony or maintenance by amending 11 U.S.C. 507(a). This is important because, as the bankruptcy estate is liquidated and the debtor's funds disbursed, there may not be sufficient funds to satisfy the claims of all creditors. Increasing the priority of child support claims makes it more likely they will be paid. Question: What does it mean when a debt is discharged in bankruptcy, and does the Act provide any exceptions for child support? Answer: A debt that is discharged in bankruptcy is erased. The debtor is given a chance to start anew. Child support debts are generally not dischargeable in bankruptcy. They are excepted," demonstrating a public policy favoring financial responsibility toward children. The Act amends 11 U.S.C. 523 to add a new exception to the discharge for some debts arising out of a divorce decree or separation agreement that are not in the nature of alimony, maintenance, or support. One example is a hold-harmless agreement where one spouse may agree not to hold the other spouse liable f or certain debts incurred during the marriage.The new section applies only to debts incurred in a divorce or separation that are owed to a spouse or a former spouse and permits only a former spouse to assert the exception in an adversarial proceeding. Third parties would not have standing to bring suit under this exception. The Act requires a decision-maker to conduct a balancing test to determine whether the benefit to the debtor spouse of discharging the debts will outweigh the detriment to the nondebtor spouse of not discharging them. Question: Does the Act contain requirements which child support creditors must meet before they may appear in court in bankruptcy proceedings? Answer: When a form is filed that indicates a child support debt is owed, and the status of such debt, the Act allows child support creditors or their representatives to intervene in bankruptcy proceedings without charge and without meeting any special local court rule or requirement for attorney appearances that they may otherwise ha e had to meet (see 11 U.S.C. 547(c)). Question: What provisions does the Act provide with regard to debtors' attempts to avoid liens through bankruptcy procedures? Answer: The Act amends 11 U.S.C. 522(f)(1)(A) to prohibit avoidance of liens through the use of bankruptcy procedures. It endeavors to further the scope of Farrey v. Sanderfoot, 111 S.Ct. 1825, 114 L.Ed. 337 (1991), a somewhat controversial United States Supreme Court case which held that a former husband could not avoid a judicial l e which he previously owned with his wife. The Act should help to improve child support enforcement and make bankruptcy law less of a problem for child support practitioners. For reference material on bankruptcy proceedings see Collier's on Bankruptcy, 1995 edition, which contains the amendments made by the Bankruptcy Reform Act of 1994. Susan Notar is an Attorney in OCSE's Policy Division. Region II Sponsors Parental Responsibility Media ContestBy: Barbara Andrews and Dennis Minkler Return to contents On October 20, 1995 ACF's New York Regional Office held a ceremony to honor 40 students and their teachers from four New Jersey high schools for their award-winning entries in Region II's first Parental Responsibility Teen Media Contest. Eight awards were given in three categories: calendar art, photography, and video. The winning schools were:
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