SENATE BILL NO. 1280

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S1280aa..............................................by JUDICIARY AND RULES
FINANCIAL INSTITUTION DATA MATCH - Amends and adds to existing law relating
to child support enforcement to authorize the Department of Health and
Welfare to establish financial data match with financial institutions; to
govern financial data match for purposes of child or spousal support
enforcement; to define terms; to specify procedure, including grounds for
withholding assets, content, issuance, delivery and acceptance of an asset
withholding order; to specify duties of the financial institutions; to
specify the basis to contest an asset withholding order; and to regulate
the liability of financial institutions.
                                                                        
02/05    Senate intro - 1st rdg - to printing
02/06    Rpt prt - to Jud
02/17    Rpt out - to 14th Ord
03/02    Rpt out amen - to engros
03/03    Rpt engros - 1st rdg - to 2nd rdg as amen
03/04    2nd rdg - to 3rd rdg as amen
03/08    3rd rdg as amen - PASSED - 35-0-0
      AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
      Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes,
      Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge, Malepeai,
      Marley, McKenzie, McWilliams, Noble, Noh, Pearce, Richardson,
      Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Bunderson
    Title apvd - to House
03/09    House intro - 1st rdg - to Health/Wel
03/17    Rpt out - rec d/p - to 2nd rdg
03/18    2nd rdg - to 3rd rdg
03/19    3rd rdg - PASSED - 62-2-6
      AYES -- Andersen, Barraclough, Bayer, Bedke, Bell, Block, Boe, Bolz,
      Campbell, Cannon, Clark, Collins, Crow, Cuddy, Deal, Denney, Douglas,
      Eberle, Ellsworth, Eskridge, Field(18), Field(23), Gagner, Garrett,
      Harwood, Henbest, Jaquet, Jones, Kulczyk, Lake, Langford, Langhorst,
      Martinez, McGeachin, McKague, Meyer, Miller, Mitchell, Moyle,
      Naccarato, Nielsen, Pasley-Stuart, Raybould, Ridinger, Ring, Ringo,
      Roberts, Robison, Rydalch, Sali, Sayler, Schaefer, Shepherd, Shirley,
      Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Wills,
      Mr. Speaker
      NAYS -- Barrett, Wood
      Absent and excused -- Bauer, Black, Bradford, Edmunson, Kellogg,
      Trail
    Floor Sponsor - Sali
    Title apvd - to Senate
03/19    To enrol
03/20    Rpt enrol - Pres signed - Sp signed
03/22    To Governor
03/23    Governor signed
         Session Law Chapter 213
         Effective: 07/01/04

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1280
                                                                        
                              BY JUDICIARY AND RULES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO CHILD SUPPORT ENFORCEMENT; AMENDING SECTION 56-203F,  IDAHO  CODE,
  3        TO REDESIGNATE THE SECTION, TO AUTHORIZE THE DEPARTMENT OF HEALTH AND WEL-
  4        FARE  TO  ESTABLISH A FINANCIAL DATA MATCH PROCESS WITH FINANCIAL INSTITU-
  5        TIONS AND TO SPECIFY THE TERMS AND CONDITIONS  OF  THE  PROCESS;  AMENDING
  6        TITLE 32, IDAHO CODE, BY THE ADDITION OF A NEW CHAPTER 16, TITLE 32, IDAHO
  7        CODE,  TO GOVERN THE FINANCIAL DATA MATCH PROCESS FOR PURPOSES OF CHILD OR
  8        SPOUSAL SUPPORT ENFORCEMENT, TO DEFINE TERMS, TO SPECIFY GROUNDS FOR WITH-
  9        HOLDING ASSETS, TO SPECIFY CONTENT OF AN ASSET WITHHOLDING ORDER, TO  GOV-
 10        ERN  ISSUANCE  OF  THE  ASSET  WITHHOLDING ORDER, TO GOVERN DELIVERY OF AN
 11        ASSET  WITHHOLDING  ORDER  AND  ACCEPTANCE  OF  JURISDICTION,  TO  PROVIDE
 12        REQUIREMENTS FOR NOTICE, TO SPECIFY DUTIES OF THE FINANCIAL  INSTITUTIONS,
 13        TO  GOVERN CONDITIONS WHEN NO REQUEST FOR HEARING IS FILED, TO GOVERN CON-
 14        DITIONS WHEN A REQUEST FOR HEARING TO  CONTEST  AN  ASSET  WITHHOLDING  IS
 15        FILED, TO SPECIFY THE BASIS TO CONTEST AN ASSET WITHHOLDING ORDER, TO GOV-
 16        ERN THE ORDER FROM A HEARING, TO GOVERN CONDITIONS OF DEFAULT AND TO REGU-
 17        LATE THE LIABILITY OF FINANCIAL INSTITUTIONS.
                                                                        
 18    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 19        SECTION  1.  That  Section 56-203F, Idaho Code, be, and the same is hereby
 20    amended to read as follows:
                                                                        
 21        56-203F32-1601.  CHILD SUPPORT ENFORCEMENT --  AGREEMENTS  WITH  FINANCIAL
 22    INSTITUTIONS  DATA  MATCH  PROCESS. (1) The legislature finds that the federal
 23    government has unreasonably mandated that the  department  must  make  certain
 24    agreements  with  financial  institutions  in  this  state for the purposes of
 25    improving the effectiveness of child support enforcement. The legislature also
 26    finds that the current system for child support enforcement in this state  has
 27    historically  performed  well,  and  recent  statutory  changes  have  further
 28    improved  it, and that the mandated system will do little to improve such col-
 29    lections. This section chapter is enacted to bring the state  into  compliance
 30    with  the requirements of P.L. 104-193, sec. 372, and title IV-D of the social
 31    security act and to make the  financial  institution  data  match  process  an
 32    effective  enforcement  tool  for  use in enforcing past due child support and
 33    spousal support.
 34        (2)  The department is hereby authorized to establish a  work  group  com-
 35    prised of shall:
 36        (a)  Representatives  of the types of financial institutions identified in
 37        42 U.S.C. section 669a(d)(1);
 38        (b)  Representatives   of   "public   utilities,"   "cooperatives,"    and
 39        "municipalities" as defined in section 61-332A, Idaho Code, and "telephone
 40        corporations"  as  defined in section 62-603, Idaho Code, and cable compa-
 41        nies as defined in section 61-538, Idaho Code;
 42        (c)  Representatives of the department, which shall comprise no more  than
 43        one-third (1/3) of the total members of the work group.
                                                                        
                                           2
                                                                        
  1        (3)  The work group shall:
  2        (a)  Identify  those  minimum  statutory  changes  and terms of agreements
  3        among the entities represented which are necessary to bring the state into
  4        Establish and maintain a financial institution  data  match  process  with
  5        financial institutions in compliance with 42 U.S.C. section 666(a)(17);
  6        (b)  Define the type of information in the hands of financial institutions
  7        and  utilities which is not otherwise available and pursuant to the agree-
  8        ments with financial institutions which, if available to  the  department,
  9        would  actually  and verifiably improve the effectiveness of child support
 10        collection;
 11        (c)  As a term of each proposed  agreement,  lLimit  authority  to  engage
 12        match  functions  the  matching  process  and  access  to  all information
 13        received to the smallest number of upper management specialized  staff  in
 14        the  department  as  is possible; (d) and dDevelop written protocol within
 15        the department for the foregoing, delineating  which  functions  would  be
 16        performed by which personnel and under what circumstances;
 17        (ed)  Limit  engagement of contracted data match functions matching by the
 18        department to those obligors who are in arrears in an amount equal  to  or
 19        greater than the total support owing for at least ninety (90) days, or two
 20        thousand dollars ($2,000), whichever is less;
 21        (fe)  Provide  for  annual  statistical verification of the improvement to
 22        child support enforcement in this state which results from use of the data
 23        match functions contained in the  proposed  agreements  process  with  the
 24        financial institutions;
 25        (gf)  Design  the  data  match  system process identified herein in such a
 26        manner that it will be the least intrusive, least expensive and most  con-
 27        fidential system process reasonably possible;
 28        (hg)  Develop  a  satisfactory  contract  term  to protect the contracting
 29        entities from legal liability for disclosure of information as  authorized
 30        by  statute  and to protect the public's right of action for wrongful dis-
 31        closure.;
 32        (4h)  The department is authorized to  eEnter  into  agreements  with  the
 33        entities  identified  in subsection (2) of this section financial institu-
 34        tions, and pay reasonable compensation, to such entities,  not  to  exceed
 35        actual  costs incurred by such entity the financial institutions in devel-
 36        oping the data match system process and conducting the data match.
 37        (53)  Terms of an agreement between the department and an entity may  pro-
 38    vide  for  a financial institution shall require the entity financial institu-
 39    tion to provide the following information to the department: on the  name  and
 40    address  of  each obligor who meets the criteria of delinquency as provided in
 41    subsection (3)(e) of this section: name, address and place of  employment,  if
 42    available.  The  information shall only be used for locate purposes identified
 43    in the matching process, the account number(s) or other means  of  identifying
 44    the  asset,  the  amount  and  type  of asset, the state in which the asset is
 45    located, and other information necessary for compliance with federal  require-
 46    ments.
 47        (4)  Assets  identified  under  this  section may be withheld, attached or
 48    garnished as provided by this chapter and otherwise as allowed by law.
 49        (5)  The assets which are subject to this section, regardless of  location
 50    in  this  or  other  states,  are those on deposit with or held by a financial
 51    institution.
 52        (6)  Assets in accounts with the obligor as sole owner or with the obligor
 53    and spouse as the only co-owners, are subject to withholding up to the  lesser
 54    of  one  hundred  percent (100%) of the asset or the amount of arrears owed by
 55    the obligor, as set forth in the asset withholding order plus any fees  pursu-
                                                                        
                                           3
                                                                        
  1    ant to section 32-1608(2), Idaho Code. Assets in other multiple party accounts
  2    are  subject  to withholding up to the lesser of a proportionate amount of the
  3    asset based upon the number of co-owners or the amount of arrears owed by  the
  4    obligor,  as  set forth in the asset withholding order, plus any fees pursuant
  5    to section 32-1608(2), Idaho Code.
  6        (6)  Notwithstanding any other provisions of federal  or  state  law,  any
  7    entity,  or  officer,  agency or employee of the entity, acting in good faith,
  8    shall be immune from any civil or criminal liability for disclosing any infor-
  9    mation to a state child support enforcement agency pursuant to  a  contractual
 10    obligation  arising  under an agreement contemplated in this section or if the
 11    accumulation of such information is required in state or federal law, rule  or
 12    regulation.  An  entity  shall  not  be  required to give notice to an account
 13    holder or customer of the entity  concerning  whom  the  entity  has  provided
 14    information  pursuant  to  this  section.  The state child support enforcement
 15    agency which obtains information from any entity may disclose such information
 16    only for the purpose of, and to the extent necessary to establish,  modify  or
 17    enforce a child support obligation of a delinquent obligor.
                                                                        
 18        SECTION  2.  That Title 32, Idaho Code, be, and the same is hereby amended
 19    by the addition thereto of a NEW CHAPTER, to be known and designated as  Chap-
 20    ter 16, Title 32, Idaho Code, and to read as follows:
                                                                        
 21                                      CHAPTER 16
 22                       FINANCIAL INSTITUTION DATA MATCH PROCESS
                                                                        
 23        32-1602.  DEFINITIONS. As used in this chapter:
 24        (1)  "Arrears"  means  child  or  spousal  support  that is due, owing and
 25    unpaid pursuant to a support order.
 26        (2)  "Asset" means cash or cash value in or of a demand  deposit  account,
 27    checking  or  negotiable  withdrawal  order  account,  savings  account, share
 28    account, share draft account, time deposit account or money market mutual fund
 29    account; and/or negotiable instruments including stocks and bonds,  annuities,
 30    investment accounts or funds, and the cash value of insurance.
 31        (3)  "Asset withholding order" means an administrative order issued by the
 32    department  of  health  and  welfare  to a financial institution requiring the
 33    freezing and surrender of an asset in which an obligor has an interest.
 34        (4)  "Child support" means the obligation, pursuant to a support order, to
 35    provide for the needs of a child, including food,  clothing,  shelter,  educa-
 36    tion, day care and health care. "Child support" also includes reimbursement to
 37    any  agency for medical assistance, assistance paid to families with children,
 38    and interest owed on such support.
 39        (5)  "Co-owner" means a person having  withdrawal  rights  on  a  multiple
 40    party account.
 41        (6)  "Department" means the Idaho department of health and welfare.
 42        (7)  "Financial  institution"  means a bank, credit union or other deposi-
 43    tory institution, benefit association, insurance company,  safe  deposit  com-
 44    pany,  money  market  mutual  fund  and  other  entities  defined in 42 U.S.C.
 45    669a(d)(1).
 46        (8)  "Obligor" means any person obligated by support order to pay child or
 47    spousal support.
 48        (9)  "Owner" means a person or entity who, by the terms  of  the  account,
 49    has  a  present right, subject to a proper request in compliance with terms of
 50    the account, to payment from the account.
 51        (10) "Spousal support" means the obligation, pursuant to a support  order,
 52    to provide for a spouse or a former spouse.
                                                                        
                                           4
                                                                        
  1        (11) "Support  order"  means  a  judgment, decree, or administrative order
  2    from  any state, directing one (1) or more individuals to pay child support or
  3    spousal support.
                                                                        
  4        32-1603.  WITHHOLDING OF ASSETS -- GROUNDS AND ISSUANCE. When the  depart-
  5    ment  receives  information from a data matching process that an obligor is an
  6    owner or co-owner of an asset held by a financial institution, the  department
  7    may  issue  an asset withholding order. Any asset which is subject to a previ-
  8    ously perfected security interest or  right  of  set-off  from  the  financial
  9    institution  is  subject to withholding only as to the unencumbered portion of
 10    the asset.
                                                                        
 11        32-1604.  CONTENT OF ASSET WITHHOLDING ORDER. An asset  withholding  order
 12    shall contain:
 13        (1)  The  name  of  the  obligor  and any known co-owner or multiple party
 14    account holder;
 15        (2)  The address of the obligor as listed in the department's records;
 16        (3)  The account number or other means of identifying the asset subject to
 17    the withholding order;
 18        (4)  The amount of arrears owed by the obligor;
 19        (5)  Other information as determined by the department.
                                                                        
 20        32-1605.  RECEIPT AND ACCEPTANCE OF ASSET WITHHOLDING ORDER. (1)  When  an
 21    asset  withholding  order  is  received by a financial institution pursuant to
 22    this chapter, the financial institution shall  immediately  freeze  the  asset
 23    subject to the withholding order up to the maximum amount as set forth in sec-
 24    tion  32-1601(6),  Idaho  Code.  Financial institutions shall accept the asset
 25    withholding order at any office of the financial institution located  in  this
 26    state,  or at a particular office in this state or another state designated by
 27    the financial institution for the service of attachment,  execution  and  gar-
 28    nishment papers pursuant to section 8-507(b), Idaho Code.
 29        If  the  financial institution has designated a particular office for ser-
 30    vice of attachment, execution  and  garnishment  papers  pursuant  to  section
 31    8-507(b),  Idaho  Code, and the asset withholding order is received by another
 32    office of the financial institution, it is within the discretion of the finan-
 33    cial institution to accept the order and promptly forward  the  order  to  the
 34    designated  office; not accept the order and promptly forward the order to the
 35    designated office; or promptly return it to the  department.  If  a  financial
 36    institution  has  chosen  to  accept  the order at a nondesignated office, the
 37    financial institution's duties pursuant to  section  32-1608(1),  Idaho  Code,
 38    shall  be  effective  upon acceptance at that office, and the time periods for
 39    the financial institution's duties pursuant to subsections (2) and (3) of sec-
 40    tion 32-1608, Idaho Code, shall begin to run upon receipt of the order at  the
 41    designated office.
 42        (2)  Unless otherwise notified by the department pursuant to this chapter,
 43    the  financial  institution  shall  release  the  asset  to the obligor on the
 44    seventy-sixth day after the financial institution receives the asset withhold-
 45    ing order.
 46        (3)  The department shall provide the financial institution with copies of
 47    the order and notice required by section 32-1607, Idaho Code,  to  forward  to
 48    the obligor and any co-owner.
                                                                        
 49        32-1606.  DELIVERY  OF AN ASSET WITHHOLDING ORDER AND ACCEPTANCE OF JURIS-
 50    DICTION. (1)  A financial institution shall accept an asset withholding  order
 51    by  any  form of U.S. mail, commercial mail, delivery service, by facsimile or
                                                                        
                                           5
                                                                        
  1    other electronic form of correspondence. If the  asset  withholding  order  is
  2    delivered  electronically, the effective date shall be the date the electronic
  3    copy is received. An additional copy of the order shall also be  sent  to  the
  4    financial institution by regular mail.
  5        (2)  If  the  financial  institution  elects  to designate an out-of-state
  6    office to accept or process an asset withholding order,  such  election  shall
  7    act as a waiver of any claim of defect in jurisdiction.
                                                                        
  8        32-1607.  NOTICE.  Upon  the issuance of an asset withholding order to the
  9    financial institution, the department shall, within one (1) business day, send
 10    to  the  obligor  by  certified  mail,  at  the  last  known  address  in  the
 11    department's records, a copy of the asset withholding order and a notice  con-
 12    taining the following:
 13        (1)  The obligor's and/or the co-owner's right to a hearing;
 14        (2)  The  request  for  a  hearing  must be in writing and received by the
 15    department within fourteen (14) days after the date of mailing the notice;
 16        (3)  That the asset subject to the withholding order will  be  applied  to
 17    the arrears unless a timely request for hearing is made; and
 18        (4)  That the asset will be released by the department if the obligor pays
 19    the arrears and the current support obligation in full.
                                                                        
 20        32-1608.  DUTIES OF THE FINANCIAL INSTITUTION. (1)  Upon receipt or accep-
 21    tance  of an asset withholding order issued by the department pursuant to this
 22    chapter, the financial institution shall immediately freeze the asset  subject
 23    to  the  withholding  order  up  to the maximum amount as set forth in section
 24    32-1601(6), Idaho Code. The financial institution shall honor the terms of the
 25    account of the said asset, except when the terms conflict with compliance with
 26    this chapter. The financial institution shall freeze, release or surrender the
 27    asset as provided in this chapter.
 28        (2)  The financial institution shall be required to mail, within  two  (2)
 29    business  days,  copies of the asset withholding order and notice, provided by
 30    the department pursuant to section 32-1605(3), Idaho Code, to the obligor  and
 31    to each co-owner, based on the records of the financial institution. A fee not
 32    to  exceed  five  dollars ($5.00) per mailing may be assessed by the financial
 33    institution for sending the required copies of the documents. The fee  can  be
 34    withheld  in  addition to the amount ordered withheld. If funds are inadequate
 35    to cover the amount of the asset withholding order and the fees, the fees  may
 36    be  withheld  from  the  asset  before the remaining balance is applied to the
 37    withholding order.
 38        (3)  The financial institution shall complete and return to the department
 39    any asset verification form provided by the department  within  fourteen  (14)
 40    days from the date of receipt of the asset verification form.
 41        (4)  Upon  notification by the department that the obligor has not filed a
 42    request for hearing within the allowed time, the  financial  institution  will
 43    release  the  asset  promptly  to  the  department by sending the funds to the
 44    department.
                                                                        
 45        32-1609.  NO REQUEST FOR HEARING. If the obligor or  a  co-owner  has  not
 46    filed  a  request  for  hearing  within  fourteen (14) days after the date the
 47    department mailed the notice to the obligor, the department shall  notify  the
 48    financial  institution  and the financial institution shall promptly surrender
 49    the amount of the asset that has been frozen to the department. The department
 50    shall apply this amount to the obligor's arrears.
                                                                        
 51        32-1610.  HEARING TO CONTEST ASSET WITHHOLDING. (1) Within five (5)  busi-
                                                                        
                                           6
                                                                        
  1    ness  days  of  receiving  a  timely  request for hearing, the department will
  2    schedule the administrative hearing date and notify the obligor  and  any  co-
  3    owners  by  mail. Upon receiving the request for hearing, the department shall
  4    notify the financial institution that it must continue to hold the asset until
  5    an order is issued and the department provides instructions for  the  disposi-
  6    tion of the asset pursuant to section 32-1612, Idaho Code.
  7        (2)  The department will hold an administrative hearing within thirty (30)
  8    days from the day the department receives the request for hearing.
                                                                        
  9        32-1611.  BASIS  TO  CONTEST  THE ASSET WITHHOLDING ORDER. The obligor who
 10    owes the support or any co-owner of the asset that is  subject  to  the  asset
 11    withholding  order  may contest the order to withhold. Contests are limited to
 12    the following issues:
 13        (1)  The amount of the arrears;
 14        (2)  The validity of the order; or
 15        (3)  The extent of the obligor's interest in the asset.
 16    Issues that have been previously adjudicated may not be contested.
                                                                        
 17        32-1612.  ORDER FROM HEARING. (1)  The department  shall  issue  an  order
 18    based  upon  the  hearing  that rejects the contest or supports the contest in
 19    whole or part. The parties may file an appeal with the district  court  within
 20    twenty-eight  (28)  days,  notwithstanding  the provisions of section 67-5243,
 21    Idaho Code.
 22        (2)  The department shall notify the  financial  institution  in  writing,
 23    within two (2) business days after the receipt of the order, as to the outcome
 24    of  the  hearing,  and provide instructions to the financial institution as to
 25    the disposition of the asset that has been frozen.
                                                                        
 26        32-1613.  DEFAULT. (1)  The allegations of  the  asset  withholding  order
 27    shall be deemed admitted and the department shall issue an order upholding the
 28    asset  withholding  order  if  the  obligor or co-owner fails to appear at the
 29    hearing without good cause. The default and issuance of any  subsequent  order
 30    shall  be  entered pursuant to the department's rules governing contested case
 31    proceedings.
 32        (2)  The department shall notify the  financial  institution  in  writing,
 33    within  two (2) business days after the receipt of the default order, and pro-
 34    vide instructions to the financial institution as to the  disposition  of  the
 35    asset that has been frozen.
                                                                        
 36        32-1614.  LIABILITY  OF  FINANCIAL  INSTITUTION. Notwithstanding any other
 37    provisions of federal or state law, any  financial  institution,  or  officer,
 38    agent or employee of the financial institution, acting in good faith, shall be
 39    immune  from  all civil and criminal liability for withholding funds, freezing
 40    assets, turning over assets or otherwise complying  or  attempting  to  comply
 41    with  the  provisions  of  this chapter or for disclosing any information to a
 42    state child support enforcement agency pursuant to this chapter.  A  financial
 43    institution  shall  not be required to give notice to any owner or co-owner of
 44    the financial institution concerning whom the financial institution  has  pro-
 45    vided  information pursuant to the data match process. The state child support
 46    enforcement agency which obtains information from  any  financial  institution
 47    may  disclose such information only for the purpose of, and to the extent nec-
 48    essary to establish, modify or enforce a support obligation of an obligor.

Amendment


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                                                     Moved by    Bunderson           
                                                                        
                                                     Seconded by Davis               
                                                                        
                                                                        
                                       IN THE SENATE
                             SENATE AMENDMENT TO S.B. NO. 1280
                                                                        
  1                               AMENDMENTS TO SECTION 2
  2        On page 5 of the printed bill, in line  17,  delete  "and";  in  line  19,
  3    delete "." and insert: "; and"; following line 19, insert:
  4        "(5)  The grounds to contest the asset withholding order:
  5        (a)  The amount of arrears;
  6        (b)  The validity of the order;
  7        (c)  The extent of the obligor's interest in the asset; and
  8        (d)  The  amount which qualifies as a homestead exemption pursuant to sec-
  9        tion 55-1008, Idaho Code.";
 10    on page 6, in line 14, delete "or"; in line 15, delete "." and insert: "; or";
 11    and following line 15, insert:
 12        "(4)  The amount which qualifies as a homestead exemption pursuant to sec-
 13        tion 55-1008, Idaho Code.".

Engrossed Bill (Original Bill with Amendment(s) Incorporated)


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                              SENATE BILL NO. 1280, As Amended
                                                                        
                              BY JUDICIARY AND RULES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO CHILD SUPPORT ENFORCEMENT; AMENDING SECTION 56-203F,  IDAHO  CODE,
  3        TO REDESIGNATE THE SECTION, TO AUTHORIZE THE DEPARTMENT OF HEALTH AND WEL-
  4        FARE  TO  ESTABLISH A FINANCIAL DATA MATCH PROCESS WITH FINANCIAL INSTITU-
  5        TIONS AND TO SPECIFY THE TERMS AND CONDITIONS  OF  THE  PROCESS;  AMENDING
  6        TITLE 32, IDAHO CODE, BY THE ADDITION OF A NEW CHAPTER 16, TITLE 32, IDAHO
  7        CODE,  TO GOVERN THE FINANCIAL DATA MATCH PROCESS FOR PURPOSES OF CHILD OR
  8        SPOUSAL SUPPORT ENFORCEMENT, TO DEFINE TERMS, TO SPECIFY GROUNDS FOR WITH-
  9        HOLDING ASSETS, TO SPECIFY CONTENT OF AN ASSET WITHHOLDING ORDER, TO  GOV-
 10        ERN  ISSUANCE  OF  THE  ASSET  WITHHOLDING ORDER, TO GOVERN DELIVERY OF AN
 11        ASSET  WITHHOLDING  ORDER  AND  ACCEPTANCE  OF  JURISDICTION,  TO  PROVIDE
 12        REQUIREMENTS FOR NOTICE, TO SPECIFY DUTIES OF THE FINANCIAL  INSTITUTIONS,
 13        TO  GOVERN CONDITIONS WHEN NO REQUEST FOR HEARING IS FILED, TO GOVERN CON-
 14        DITIONS WHEN A REQUEST FOR HEARING TO  CONTEST  AN  ASSET  WITHHOLDING  IS
 15        FILED, TO SPECIFY THE BASIS TO CONTEST AN ASSET WITHHOLDING ORDER, TO GOV-
 16        ERN THE ORDER FROM A HEARING, TO GOVERN CONDITIONS OF DEFAULT AND TO REGU-
 17        LATE THE LIABILITY OF FINANCIAL INSTITUTIONS.
                                                                        
 18    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 19        SECTION  1.  That  Section 56-203F, Idaho Code, be, and the same is hereby
 20    amended to read as follows:
                                                                        
 21        56-203F32-1601.  CHILD SUPPORT ENFORCEMENT --  AGREEMENTS  WITH  FINANCIAL
 22    INSTITUTIONS  DATA  MATCH  PROCESS. (1) The legislature finds that the federal
 23    government has unreasonably mandated that the  department  must  make  certain
 24    agreements  with  financial  institutions  in  this  state for the purposes of
 25    improving the effectiveness of child support enforcement. The legislature also
 26    finds that the current system for child support enforcement in this state  has
 27    historically  performed  well,  and  recent  statutory  changes  have  further
 28    improved  it, and that the mandated system will do little to improve such col-
 29    lections. This section chapter is enacted to bring the state  into  compliance
 30    with  the requirements of P.L. 104-193, sec. 372, and title IV-D of the social
 31    security act and to make the  financial  institution  data  match  process  an
 32    effective  enforcement  tool  for  use in enforcing past due child support and
 33    spousal support.
 34        (2)  The department is hereby authorized to establish a  work  group  com-
 35    prised of shall:
 36        (a)  Representatives  of the types of financial institutions identified in
 37        42 U.S.C. section 669a(d)(1);
 38        (b)  Representatives   of   "public   utilities,"   "cooperatives,"    and
 39        "municipalities" as defined in section 61-332A, Idaho Code, and "telephone
 40        corporations"  as  defined in section 62-603, Idaho Code, and cable compa-
 41        nies as defined in section 61-538, Idaho Code;
 42        (c)  Representatives of the department, which shall comprise no more  than
 43        one-third (1/3) of the total members of the work group.
                                                                        
                                           2
                                                                        
  1        (3)  The work group shall:
  2        (a)  Identify  those  minimum  statutory  changes  and terms of agreements
  3        among the entities represented which are necessary to bring the state into
  4        Establish and maintain a financial institution  data  match  process  with
  5        financial institutions in compliance with 42 U.S.C. section 666(a)(17);
  6        (b)  Define the type of information in the hands of financial institutions
  7        and  utilities which is not otherwise available and pursuant to the agree-
  8        ments with financial institutions which, if available to  the  department,
  9        would  actually  and verifiably improve the effectiveness of child support
 10        collection;
 11        (c)  As a term of each proposed  agreement,  lLimit  authority  to  engage
 12        match  functions  the  matching  process  and  access  to  all information
 13        received to the smallest number of upper management specialized  staff  in
 14        the  department  as  is possible; (d) and dDevelop written protocol within
 15        the department for the foregoing, delineating  which  functions  would  be
 16        performed by which personnel and under what circumstances;
 17        (ed)  Limit  engagement of contracted data match functions matching by the
 18        department to those obligors who are in arrears in an amount equal  to  or
 19        greater than the total support owing for at least ninety (90) days, or two
 20        thousand dollars ($2,000), whichever is less;
 21        (fe)  Provide  for  annual  statistical verification of the improvement to
 22        child support enforcement in this state which results from use of the data
 23        match functions contained in the  proposed  agreements  process  with  the
 24        financial institutions;
 25        (gf)  Design  the  data  match  system process identified herein in such a
 26        manner that it will be the least intrusive, least expensive and most  con-
 27        fidential system process reasonably possible;
 28        (hg)  Develop  a  satisfactory  contract  term  to protect the contracting
 29        entities from legal liability for disclosure of information as  authorized
 30        by  statute  and to protect the public's right of action for wrongful dis-
 31        closure.;
 32        (4h)  The department is authorized to  eEnter  into  agreements  with  the
 33        entities  identified  in subsection (2) of this section financial institu-
 34        tions, and pay reasonable compensation, to such entities,  not  to  exceed
 35        actual  costs incurred by such entity the financial institutions in devel-
 36        oping the data match system process and conducting the data match.
 37        (53)  Terms of an agreement between the department and an entity may  pro-
 38    vide  for  a financial institution shall require the entity financial institu-
 39    tion to provide the following information to the department: on the  name  and
 40    address  of  each obligor who meets the criteria of delinquency as provided in
 41    subsection (3)(e) of this section: name, address and place of  employment,  if
 42    available.  The  information shall only be used for locate purposes identified
 43    in the matching process, the account number(s) or other means  of  identifying
 44    the  asset,  the  amount  and  type  of asset, the state in which the asset is
 45    located, and other information necessary for compliance with federal  require-
 46    ments.
 47        (4)  Assets  identified  under  this  section may be withheld, attached or
 48    garnished as provided by this chapter and otherwise as allowed by law.
 49        (5)  The assets which are subject to this section, regardless of  location
 50    in  this  or  other  states,  are those on deposit with or held by a financial
 51    institution.
 52        (6)  Assets in accounts with the obligor as sole owner or with the obligor
 53    and spouse as the only co-owners, are subject to withholding up to the  lesser
 54    of  one  hundred  percent (100%) of the asset or the amount of arrears owed by
 55    the obligor, as set forth in the asset withholding order plus any fees  pursu-
                                                                        
                                           3
                                                                        
  1    ant to section 32-1608(2), Idaho Code. Assets in other multiple party accounts
  2    are  subject  to withholding up to the lesser of a proportionate amount of the
  3    asset based upon the number of co-owners or the amount of arrears owed by  the
  4    obligor,  as  set forth in the asset withholding order, plus any fees pursuant
  5    to section 32-1608(2), Idaho Code.
  6        (6)  Notwithstanding any other provisions of federal  or  state  law,  any
  7    entity,  or  officer,  agency or employee of the entity, acting in good faith,
  8    shall be immune from any civil or criminal liability for disclosing any infor-
  9    mation to a state child support enforcement agency pursuant to  a  contractual
 10    obligation  arising  under an agreement contemplated in this section or if the
 11    accumulation of such information is required in state or federal law, rule  or
 12    regulation.  An  entity  shall  not  be  required to give notice to an account
 13    holder or customer of the entity  concerning  whom  the  entity  has  provided
 14    information  pursuant  to  this  section.  The state child support enforcement
 15    agency which obtains information from any entity may disclose such information
 16    only for the purpose of, and to the extent necessary to establish,  modify  or
 17    enforce a child support obligation of a delinquent obligor.
                                                                        
 18        SECTION  2.  That Title 32, Idaho Code, be, and the same is hereby amended
 19    by the addition thereto of a NEW CHAPTER, to be known and designated as  Chap-
 20    ter 16, Title 32, Idaho Code, and to read as follows:
                                                                        
 21                                      CHAPTER 16
 22                       FINANCIAL INSTITUTION DATA MATCH PROCESS
                                                                        
 23        32-1602.  DEFINITIONS. As used in this chapter:
 24        (1)  "Arrears"  means  child  or  spousal  support  that is due, owing and
 25    unpaid pursuant to a support order.
 26        (2)  "Asset" means cash or cash value in or of a demand  deposit  account,
 27    checking  or  negotiable  withdrawal  order  account,  savings  account, share
 28    account, share draft account, time deposit account or money market mutual fund
 29    account; and/or negotiable instruments including stocks and bonds,  annuities,
 30    investment accounts or funds, and the cash value of insurance.
 31        (3)  "Asset withholding order" means an administrative order issued by the
 32    department  of  health  and  welfare  to a financial institution requiring the
 33    freezing and surrender of an asset in which an obligor has an interest.
 34        (4)  "Child support" means the obligation, pursuant to a support order, to
 35    provide for the needs of a child, including food,  clothing,  shelter,  educa-
 36    tion, day care and health care. "Child support" also includes reimbursement to
 37    any  agency for medical assistance, assistance paid to families with children,
 38    and interest owed on such support.
 39        (5)  "Co-owner" means a person having  withdrawal  rights  on  a  multiple
 40    party account.
 41        (6)  "Department" means the Idaho department of health and welfare.
 42        (7)  "Financial  institution"  means a bank, credit union or other deposi-
 43    tory institution, benefit association, insurance company,  safe  deposit  com-
 44    pany,  money  market  mutual  fund  and  other  entities  defined in 42 U.S.C.
 45    669a(d)(1).
 46        (8)  "Obligor" means any person obligated by support order to pay child or
 47    spousal support.
 48        (9)  "Owner" means a person or entity who, by the terms  of  the  account,
 49    has  a  present right, subject to a proper request in compliance with terms of
 50    the account, to payment from the account.
 51        (10) "Spousal support" means the obligation, pursuant to a support  order,
 52    to provide for a spouse or a former spouse.
                                                                        
                                           4
                                                                        
  1        (11) "Support  order"  means  a  judgment, decree, or administrative order
  2    from  any state, directing one (1) or more individuals to pay child support or
  3    spousal support.
                                                                        
  4        32-1603.  WITHHOLDING OF ASSETS -- GROUNDS AND ISSUANCE. When the  depart-
  5    ment  receives  information from a data matching process that an obligor is an
  6    owner or co-owner of an asset held by a financial institution, the  department
  7    may  issue  an asset withholding order. Any asset which is subject to a previ-
  8    ously perfected security interest or  right  of  set-off  from  the  financial
  9    institution  is  subject to withholding only as to the unencumbered portion of
 10    the asset.
                                                                        
 11        32-1604.  CONTENT OF ASSET WITHHOLDING ORDER. An asset  withholding  order
 12    shall contain:
 13        (1)  The  name  of  the  obligor  and any known co-owner or multiple party
 14    account holder;
 15        (2)  The address of the obligor as listed in the department's records;
 16        (3)  The account number or other means of identifying the asset subject to
 17    the withholding order;
 18        (4)  The amount of arrears owed by the obligor;
 19        (5)  Other information as determined by the department.
                                                                        
 20        32-1605.  RECEIPT AND ACCEPTANCE OF ASSET WITHHOLDING ORDER. (1)  When  an
 21    asset  withholding  order  is  received by a financial institution pursuant to
 22    this chapter, the financial institution shall  immediately  freeze  the  asset
 23    subject to the withholding order up to the maximum amount as set forth in sec-
 24    tion  32-1601(6),  Idaho  Code.  Financial institutions shall accept the asset
 25    withholding order at any office of the financial institution located  in  this
 26    state,  or at a particular office in this state or another state designated by
 27    the financial institution for the service of attachment,  execution  and  gar-
 28    nishment papers pursuant to section 8-507(b), Idaho Code.
 29        If  the  financial institution has designated a particular office for ser-
 30    vice of attachment, execution  and  garnishment  papers  pursuant  to  section
 31    8-507(b),  Idaho  Code, and the asset withholding order is received by another
 32    office of the financial institution, it is within the discretion of the finan-
 33    cial institution to accept the order and promptly forward  the  order  to  the
 34    designated  office; not accept the order and promptly forward the order to the
 35    designated office; or promptly return it to the  department.  If  a  financial
 36    institution  has  chosen  to  accept  the order at a nondesignated office, the
 37    financial institution's duties pursuant to  section  32-1608(1),  Idaho  Code,
 38    shall  be  effective  upon acceptance at that office, and the time periods for
 39    the financial institution's duties pursuant to subsections (2) and (3) of sec-
 40    tion 32-1608, Idaho Code, shall begin to run upon receipt of the order at  the
 41    designated office.
 42        (2)  Unless otherwise notified by the department pursuant to this chapter,
 43    the  financial  institution  shall  release  the  asset  to the obligor on the
 44    seventy-sixth day after the financial institution receives the asset withhold-
 45    ing order.
 46        (3)  The department shall provide the financial institution with copies of
 47    the order and notice required by section 32-1607, Idaho Code,  to  forward  to
 48    the obligor and any co-owner.
                                                                        
 49        32-1606.  DELIVERY  OF AN ASSET WITHHOLDING ORDER AND ACCEPTANCE OF JURIS-
 50    DICTION. (1)  A financial institution shall accept an asset withholding  order
 51    by  any  form of U.S. mail, commercial mail, delivery service, by facsimile or
                                                                        
                                           5
                                                                        
  1    other electronic form of correspondence. If the  asset  withholding  order  is
  2    delivered  electronically, the effective date shall be the date the electronic
  3    copy is received. An additional copy of the order shall also be  sent  to  the
  4    financial institution by regular mail.
  5        (2)  If  the  financial  institution  elects  to designate an out-of-state
  6    office to accept or process an asset withholding order,  such  election  shall
  7    act as a waiver of any claim of defect in jurisdiction.
                                                                        
  8        32-1607.  NOTICE.  Upon  the issuance of an asset withholding order to the
  9    financial institution, the department shall, within one (1) business day, send
 10    to  the  obligor  by  certified  mail,  at  the  last  known  address  in  the
 11    department's records, a copy of the asset withholding order and a notice  con-
 12    taining the following:
 13        (1)  The obligor's and/or the co-owner's right to a hearing;
 14        (2)  The  request  for  a  hearing  must be in writing and received by the
 15    department within fourteen (14) days after the date of mailing the notice;
 16        (3)  That the asset subject to the withholding order will  be  applied  to
 17    the arrears unless a timely request for hearing is made;
 18        (4)  That the asset will be released by the department if the obligor pays
 19    the arrears and the current support obligation in full; and
 20        (5)  The grounds to contest the asset withholding order:
 21        (a)  The amount of arrears;
 22        (b)  The validity of the order;
 23        (c)  The extent of the obligor's interest in the asset; and
 24        (d)  The  amount which qualifies as a homestead exemption pursuant to sec-
 25        tion 55-1008, Idaho Code.
                                                                        
 26        32-1608.  DUTIES OF THE FINANCIAL INSTITUTION. (1)  Upon receipt or accep-
 27    tance of an asset withholding order issued by the department pursuant to  this
 28    chapter,  the financial institution shall immediately freeze the asset subject
 29    to the withholding order up to the maximum amount  as  set  forth  in  section
 30    32-1601(6), Idaho Code. The financial institution shall honor the terms of the
 31    account of the said asset, except when the terms conflict with compliance with
 32    this chapter. The financial institution shall freeze, release or surrender the
 33    asset as provided in this chapter.
 34        (2)  The  financial  institution shall be required to mail, within two (2)
 35    business days, copies of the asset withholding order and notice,  provided  by
 36    the  department pursuant to section 32-1605(3), Idaho Code, to the obligor and
 37    to each co-owner, based on the records of the financial institution. A fee not
 38    to exceed five dollars ($5.00) per mailing may be assessed  by  the  financial
 39    institution  for  sending the required copies of the documents. The fee can be
 40    withheld in addition to the amount ordered withheld. If funds  are  inadequate
 41    to  cover the amount of the asset withholding order and the fees, the fees may
 42    be withheld from the asset before the remaining  balance  is  applied  to  the
 43    withholding order.
 44        (3)  The financial institution shall complete and return to the department
 45    any  asset  verification  form provided by the department within fourteen (14)
 46    days from the date of receipt of the asset verification form.
 47        (4)  Upon notification by the department that the obligor has not filed  a
 48    request  for  hearing  within the allowed time, the financial institution will
 49    release the asset promptly to the department  by  sending  the  funds  to  the
 50    department.
                                                                        
 51        32-1609.  NO  REQUEST  FOR  HEARING.  If the obligor or a co-owner has not
 52    filed a request for hearing within fourteen  (14)  days  after  the  date  the
                                                                        
                                           6
                                                                        
  1    department  mailed  the notice to the obligor, the department shall notify the
  2    financial institution and the financial institution shall  promptly  surrender
  3    the amount of the asset that has been frozen to the department. The department
  4    shall apply this amount to the obligor's arrears.
                                                                        
  5        32-1610.  HEARING  TO CONTEST ASSET WITHHOLDING. (1) Within five (5) busi-
  6    ness days of receiving a timely  request  for  hearing,  the  department  will
  7    schedule  the  administrative  hearing date and notify the obligor and any co-
  8    owners by mail. Upon receiving the request for hearing, the  department  shall
  9    notify the financial institution that it must continue to hold the asset until
 10    an  order  is issued and the department provides instructions for the disposi-
 11    tion of the asset pursuant to section 32-1612, Idaho Code.
 12        (2)  The department will hold an administrative hearing within thirty (30)
 13    days from the day the department receives the request for hearing.
                                                                        
 14        32-1611.  BASIS TO CONTEST THE ASSET WITHHOLDING ORDER.  The  obligor  who
 15    owes  the  support  or  any co-owner of the asset that is subject to the asset
 16    withholding order may contest the order to withhold. Contests are  limited  to
 17    the following issues:
 18        (1)  The amount of the arrears;
 19        (2)  The validity of the order;
 20        (3)  The extent of the obligor's interest in the asset; or
 21        (4)  The  amount which qualifies as a homestead exemption pursuant to sec-
 22    tion 55-1008, Idaho Code.
 23    Issues that have been previously adjudicated may not be contested.
                                                                        
 24        32-1612.  ORDER FROM HEARING. (1)  The department  shall  issue  an  order
 25    based  upon  the  hearing  that rejects the contest or supports the contest in
 26    whole or part. The parties may file an appeal with the district  court  within
 27    twenty-eight  (28)  days,  notwithstanding  the provisions of section 67-5243,
 28    Idaho Code.
 29        (2)  The department shall notify the  financial  institution  in  writing,
 30    within two (2) business days after the receipt of the order, as to the outcome
 31    of  the  hearing,  and provide instructions to the financial institution as to
 32    the disposition of the asset that has been frozen.
                                                                        
 33        32-1613.  DEFAULT. (1)  The allegations of  the  asset  withholding  order
 34    shall be deemed admitted and the department shall issue an order upholding the
 35    asset  withholding  order  if  the  obligor or co-owner fails to appear at the
 36    hearing without good cause. The default and issuance of any  subsequent  order
 37    shall  be  entered pursuant to the department's rules governing contested case
 38    proceedings.
 39        (2)  The department shall notify the  financial  institution  in  writing,
 40    within  two (2) business days after the receipt of the default order, and pro-
 41    vide instructions to the financial institution as to the  disposition  of  the
 42    asset that has been frozen.
                                                                        
 43        32-1614.  LIABILITY  OF  FINANCIAL  INSTITUTION. Notwithstanding any other
 44    provisions of federal or state law, any  financial  institution,  or  officer,
 45    agent or employee of the financial institution, acting in good faith, shall be
 46    immune  from  all civil and criminal liability for withholding funds, freezing
 47    assets, turning over assets or otherwise complying  or  attempting  to  comply
 48    with  the  provisions  of  this chapter or for disclosing any information to a
 49    state child support enforcement agency pursuant to this chapter.  A  financial
 50    institution  shall  not be required to give notice to any owner or co-owner of
                                                                        
                                           7
                                                                        
  1    the financial institution concerning whom the financial institution  has  pro-
  2    vided  information pursuant to the data match process. The state child support
  3    enforcement agency which obtains information from  any  financial  institution
  4    may  disclose such information only for the purpose of, and to the extent nec-
  5    essary to establish, modify or enforce a support obligation of an obligor.

Statement of Purpose / Fiscal Impact


                     STATEMENT  OF  PURPOSE
                           RS 13578C1
Financial Institution Data Match (FIDM) is a requirement under the
Personal Responsibility and Work Opportunity Reconciliation Act
(PRWORA). This federal mandate requires states to obtain financial
account information on parents who are delinquent in paying child
support, and to attach the financial accounts to pay child support
debts. The Bureau of Child Support Operations has developed the
data match, but has been unsuccessful in using it as an enforcement
tool due to the costs and restrictions involved in the garnishment
process. Idaho's garnishment laws are restrictive, as they apply
only to accounts that are located within the State. In addition,
garnishment papers must be filed with the Clerk of the Court and
served by a county Sheriff, taking several weeks for processing.
This proposal revises existing child support statutes to include
the attachment of financial assets by using the well established
administrative process for income withholding. The administrative
process currently provides due process for the obligated parent and
will continue to do so. The professional community accepts the use
of administrative process and can be used across state lines
without the assistance of the Clerk of Court or Sheriff. Expanding
the law to include administrative attachment of financial assets,
will be more efficient and more cost effective. During the last
year, only four garnishments have been done due to the restrictive
process.






                         FISCAL  IMPACT
Effective Date: July 1, 2004 
Cost estimates: 1st year cost - $6,400.00 form development 
                3-5 year annual impact $19,800.00 legal fees. 





CONTACT   
Name:     Kandee Yearsley
Agency:   Department of Health and Welfare
Phone: 334-0620

Statement of Purpose/Fiscal Impact                      S 1280