1.1                          A bill for an act 
  1.2             relating to child support enforcement; amending 
  1.3             Minnesota Statutes 1996, sections 257.64, subdivision 
  1.4             3; 518.551, subdivisions 1 and 9; and 518.615, 
  1.5             subdivision 2; Minnesota Statutes 1997 Supplement, 
  1.6             sections 518.551, subdivision 5b; 518.6111, 
  1.7             subdivision 14; 518.615, subdivision 1; and 552.04, 
  1.8             subdivisions 2, 3, and 4; proposing coding for new law 
  1.9             in Minnesota Statutes, chapter 518. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1996, section 257.64, 
  1.12  subdivision 3, is amended to read: 
  1.13     Subd. 3.  If a party refuses to accept a recommendation 
  1.14  made under subdivision 1 and blood or genetic tests have not 
  1.15  been taken, the court shall require the parties to submit to 
  1.16  blood or genetic tests.  Any objection to blood or genetic 
  1.17  testing results must be made in writing no later than 15 days 
  1.18  before any hearing at which time the results may be introduced 
  1.19  into evidence.  Test results served upon a party must include a 
  1.20  notice of this right to object.  Thereafter the court shall make 
  1.21  an appropriate final recommendation.  If a party refuses to 
  1.22  accept the final recommendation the action shall be set for 
  1.23  trial.  
  1.24     Sec. 2.  Minnesota Statutes 1996, section 518.551, 
  1.25  subdivision 1, is amended to read: 
  1.26     Subdivision 1.  [SCOPE; PAYMENT TO PUBLIC AGENCY.] (a) This 
  1.27  section applies to all proceedings involving an award of child a 
  2.1   support order, including, but not limited to, a support order 
  2.2   establishing an award for past support or reimbursement of 
  2.3   public assistance. 
  2.4      (b) The court shall direct that all payments ordered for 
  2.5   maintenance and support be made to the public agency responsible 
  2.6   for child support enforcement so long as the obligee is 
  2.7   receiving or has applied for public assistance, or has applied 
  2.8   for child support and maintenance collection services.  Public 
  2.9   authorities responsible for child support enforcement may act on 
  2.10  behalf of other public authorities responsible for child support 
  2.11  enforcement.  This includes the authority to represent the legal 
  2.12  interests of or execute documents on behalf of the other public 
  2.13  authority in connection with the establishment, enforcement, and 
  2.14  collection of child support, maintenance, or medical support, 
  2.15  and collection on judgments.  Amounts received by the public 
  2.16  agency responsible for child support enforcement greater than 
  2.17  the amount granted to the obligee shall be remitted to the 
  2.18  obligee.  
  2.19     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
  2.20  518.551, subdivision 5b, is amended to read: 
  2.21     Subd. 5b.  [DETERMINATION OF INCOME.] (a) The parties shall 
  2.22  timely serve and file documentation of earnings and income.  
  2.23  When there is a prehearing conference, the court must receive 
  2.24  the documentation of income at least ten days prior to the 
  2.25  prehearing conference.  Documentation of earnings and income 
  2.26  also includes, but is not limited to, pay stubs for the most 
  2.27  recent three months, employer statements, or statement of 
  2.28  receipts and expenses if self-employed.  Documentation of 
  2.29  earnings and income also includes copies of each parent's most 
  2.30  recent federal tax returns, including W-2 forms, 1099 forms, 
  2.31  reemployment insurance statements, workers' compensation 
  2.32  statements, and all other documents evidencing income as 
  2.33  received that provide verification of income over a longer 
  2.34  period. 
  2.35     (b) In addition to the requirements of paragraph (a), at 
  2.36  any time after an action seeking child support has been 
  3.1   commenced or when a child support order is in effect, a party or 
  3.2   the public authority may require the other party to give them a 
  3.3   copy of the party's most recent federal tax returns that were 
  3.4   filed with the Internal Revenue Service.  The party shall 
  3.5   provide a copy of the tax returns within 30 days of receipt of 
  3.6   the request unless the request is not made in good faith.  A 
  3.7   request under this paragraph may not be made more than once 
  3.8   every two years, in the absence of good cause. 
  3.9      (c) If a parent under the jurisdiction of the court does 
  3.10  not appear at a court hearing after proper notice of the time 
  3.11  and place of the hearing, the court shall set income for that 
  3.12  parent based on credible evidence before the court or in 
  3.13  accordance with paragraph (d).  Credible evidence may include 
  3.14  documentation of current or recent income, testimony of the 
  3.15  other parent concerning recent earnings and income levels, and 
  3.16  the parent's wage reports filed with the Minnesota department of 
  3.17  economic security under section 268.044.  
  3.18     (d) If the court finds that a parent is voluntarily 
  3.19  unemployed or underemployed, child support shall be calculated 
  3.20  based on a determination of imputed income.  A parent is not 
  3.21  considered voluntarily unemployed or underemployed upon a 
  3.22  showing by the parent that the unemployment or underemployment:  
  3.23  (1) is temporary and will ultimately lead to an increase in 
  3.24  income; or (2) represents a bona fide career change that 
  3.25  outweighs the adverse effect of that parent's diminished income 
  3.26  on the child.  Imputed income means the estimated earning 
  3.27  ability of a parent based on the parent's prior earnings 
  3.28  history, education, and job skills, and on availability of jobs 
  3.29  within the community for an individual with the parent's 
  3.30  qualifications.  
  3.31     (e) If the court is unable to determine or estimate the 
  3.32  earning ability of a parent pursuant to paragraph (d), the court 
  3.33  may calculate child support based on full-time employment of 40 
  3.34  hours per week at 150 percent of the federal minimum wage or the 
  3.35  Minnesota minimum wage, whichever is higher.  If the court is 
  3.36  unable to determine or estimate the earning ability of a parent, 
  4.1   any medical support or child care contribution must be 
  4.2   calculated based upon the obligor's proportionate share of the 
  4.3   child care expenses using 40 hours per week at 150 percent of 
  4.4   the federal minimum wage or the Minnesota minimum wage, 
  4.5   whichever is higher.  If a parent is a recipient of public 
  4.6   assistance under section 256.741, or is physically or mentally 
  4.7   incapacitated, it shall be presumed that the parent is not 
  4.8   voluntarily unemployed or underemployed.  
  4.9      (e) (f) Income from self employment is equal to gross 
  4.10  receipts minus ordinary and necessary expenses.  Ordinary and 
  4.11  necessary expenses do not include amounts allowed by the 
  4.12  Internal Revenue Service for accelerated depreciation expenses 
  4.13  or investment tax credits or any other business expenses 
  4.14  determined by the court to be inappropriate for determining 
  4.15  income for purposes of child support.  The person seeking to 
  4.16  deduct an expense, including depreciation, has the burden of 
  4.17  proving, if challenged, that the expense is ordinary and 
  4.18  necessary.  Net income under this section may be different from 
  4.19  taxable income. 
  4.20     Sec. 4.  Minnesota Statutes 1996, section 518.551, 
  4.21  subdivision 9, is amended to read: 
  4.22     Subd. 9.  [ASSIGNMENT OF RIGHTS; JUDGMENT.] The public 
  4.23  agency responsible for child support enforcement is joined as a 
  4.24  party in each case in which rights are assigned under section 
  4.25  256.74 256.741, subdivision 5 2.  The court administrator shall 
  4.26  enter and docket a judgment obtained by operation of law under 
  4.27  section 548.091, subdivision 1, in the name of the public agency 
  4.28  to the extent that the obligation has been assigned.  When 
  4.29  arrearages are reduced to judgment under circumstances in which 
  4.30  section 548.091 is not applicable, the court shall grant 
  4.31  judgment in favor of, and in the name of, the public agency to 
  4.32  the extent that the arrearages are assigned.  After filing 
  4.33  notice of an assignment with the court administrator, who shall 
  4.34  enter the notice in the docket, the public agency may enforce a 
  4.35  judgment entered before the assignment of rights as if the 
  4.36  judgment were granted to it, and in its name, to the extent that 
  5.1   the arrearages in that judgment are assigned. 
  5.2      Sec. 5.  Minnesota Statutes 1997 Supplement, section 
  5.3   518.6111, subdivision 14, is amended to read: 
  5.4      Subd. 14.  [TERMINATION BY THE PUBLIC AUTHORITY.] If the 
  5.5   public authority determines that income withholding is no longer 
  5.6   applicable, the public authority shall notify the obligee and 
  5.7   the obligor of intent to terminate income withholding. 
  5.8      Five days following notification to the obligee and 
  5.9   obligor, the public authority shall issue a notice to the payor 
  5.10  of funds terminating income withholding, without a requirement 
  5.11  for a court order unless the obligee has requested a contested 
  5.12  hearing under section 518.5511, subdivision 4 3a. 
  5.13     Sec. 6.  Minnesota Statutes 1997 Supplement, section 
  5.14  518.615, subdivision 1, is amended to read: 
  5.15     Subdivision 1.  [ORDERS BINDING.] Notices or orders for 
  5.16  income withholding or medical support orders issued pursuant to 
  5.17  sections 518.171 and 518.6111 are binding on the employer, 
  5.18  trustee, or other payor of funds after the order and or notice 
  5.19  of for income withholding or enforcement of medical support has 
  5.20  been served on transmitted pursuant to section 518.6111, 
  5.21  subdivision 17, to the employer, trustee, or payor of funds. 
  5.22     Sec. 7.  Minnesota Statutes 1996, section 518.615, 
  5.23  subdivision 2, is amended to read: 
  5.24     Subd. 2.  [CONTEMPT ACTION.] An obligee or the public 
  5.25  agency responsible for child support enforcement may initiate a 
  5.26  contempt action against an employer, trustee, or payor of funds, 
  5.27  within the action that created the support obligation, by 
  5.28  serving an order to show cause upon the employer, trustee, or 
  5.29  payor of funds.  
  5.30     The employer, trustee, or payor of funds is presumed to be 
  5.31  in contempt: 
  5.32     (1) if the employer, trustee, or payor of funds has 
  5.33  intentionally failed to withhold support after receiving the 
  5.34  order and or notice of for income withholding or notice of 
  5.35  enforcement of medical support; or 
  5.36     (2) upon presentation of pay stubs or similar documentation 
  6.1   showing the employer, trustee, or payor of funds withheld 
  6.2   support and demonstration that the employer, trustee, or payor 
  6.3   of funds intentionally failed to remit support to the agency 
  6.4   responsible for child support enforcement. 
  6.5      Sec. 8.  [518.642] [OVERPAYMENTS.] 
  6.6      If child support or maintenance is not assigned under 
  6.7   section 256.741, and an obligor has overpaid a child support or 
  6.8   maintenance obligation because of a modification or error in the 
  6.9   amount owed, the public authority shall: 
  6.10     (1) apply the amount of the overpayment to reduce the 
  6.11  amount of any child support or maintenance-related arrearages or 
  6.12  debts owed to the obligee; and 
  6.13     (2) if an overpayment exists after the reduction of any 
  6.14  arrearage or debt, reduce the amount of the child support 
  6.15  remitted to the obligee by an amount no greater than 20 percent 
  6.16  of the current monthly support or maintenance obligation and 
  6.17  remit this amount to the obligor until the overpayment is 
  6.18  reduced to zero. 
  6.19     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
  6.20  552.04, subdivision 2, is amended to read: 
  6.21     Subd. 2.  [PROPERTY ATTACHABLE BY SERVICE OF LEVY.] Subject 
  6.22  to the exemptions provided by subdivision 3 and section 550.37, 
  6.23  and any other applicable statute, to the extent the exemptions 
  6.24  apply in cases of child support enforcement, the service by the 
  6.25  public authority of a notice of support judgment levy under this 
  6.26  chapter attaches all nonexempt indebtedness or money due or 
  6.27  belonging to the judgment debtor and owing by the third party or 
  6.28  in the possession or under the control of the third party at the 
  6.29  time of service of the notice of support judgment levy, whether 
  6.30  or not the indebtedness or money has become payable.  The third 
  6.31  party shall not be compelled to pay or deliver the same before 
  6.32  the time specified by any agreement unless the agreement was 
  6.33  fraudulently contracted to defeat an execution levy or other 
  6.34  collection remedy. 
  6.35     Sec. 10.  Minnesota Statutes 1997 Supplement, section 
  6.36  552.04, subdivision 3, is amended to read: 
  7.1      Subd. 3.  [PROPERTY NOT ATTACHABLE EXEMPTIONS.] The 
  7.2   following property is not subject to attachment by a notice of 
  7.3   support judgment levy served under this chapter:  
  7.4      (1) any indebtedness or money due to the judgment debtor, 
  7.5   unless at the time of the service of the notice of support 
  7.6   judgment levy the same is due absolutely or does not depend upon 
  7.7   any contingency; 
  7.8      (2) any judgment owing by the third party to the judgment 
  7.9   debtor, if the third party or the third party's property is 
  7.10  liable on an execution levy upon the judgment; 
  7.11     (3) any debt owing by the third party to the judgment 
  7.12  debtor for which any negotiable instrument has been issued or 
  7.13  endorsed by the third party; 
  7.14     (4) any indebtedness or money due to the judgment debtor 
  7.15  with a cumulative value of less than $10; and 
  7.16     (5) relief based on need.  This includes any form of public 
  7.17  assistance as defined in section 256.741, subdivision 2, 
  7.18  supplemental security income, emergency assistance, or energy 
  7.19  assistance; 
  7.20     (6) that portion of social security benefits (old age, 
  7.21  survivors, or disability insurance) protected pursuant to the 
  7.22  Consumer Credit Protection Act, United States Code, title 15, 
  7.23  section 1673(b); 
  7.24     (7) that portion of reemployment insurance, workers' 
  7.25  compensation, or veteran's benefits protected pursuant to the 
  7.26  Consumer Credit Protection Act, United States Code, title 15, 
  7.27  section 1673(b); 
  7.28     (8) that portion of an accident, disability, or retirement 
  7.29  pension or annuity protected pursuant to the Consumer Credit 
  7.30  Protection Act, United States Code, title 15, section 1673(b); 
  7.31     (9) that portion of life insurance proceeds protected 
  7.32  pursuant to the Consumer Credit Protection Act, United States 
  7.33  Code, title 15, section 1673(b); 
  7.34     (10) the earnings of your minor child and any child support 
  7.35  paid to you; 
  7.36     (11) that portion of money from a claim for damage or 
  8.1   destruction of exempt property (such as household goods, farm 
  8.2   tools, business equipment, a manufactured home, or an automobile)
  8.3   protected pursuant to the Consumer Credit Protection Act, United 
  8.4   States Code, title 15, section 1673(b); and 
  8.5      (12) any disposable earnings, indebtedness, or money that 
  8.6   is exempt under state or federal law to the extent the 
  8.7   exemptions apply in cases of child support enforcement.  
  8.8      Sec. 11.  Minnesota Statutes 1997 Supplement, section 
  8.9   552.04, subdivision 4, is amended to read: 
  8.10     Subd. 4.  [SERVICE OF THIRD PARTY LEVY; NOTICE AND 
  8.11  DISCLOSURE FORMS.] When levying upon money owed to the judgment 
  8.12  debtor by a third party, the public authority shall serve a copy 
  8.13  of the notice of support judgment levy upon the third party 
  8.14  either by registered or certified mail, or by personal service, 
  8.15  or by electronic transmission.  Along with a copy of the notice 
  8.16  of support judgment levy, the public authority shall serve upon 
  8.17  the third party a notice of support judgment levy and disclosure 
  8.18  form that must be substantially in the form set forth below. 
  8.19                 OFFICE OF ADMINISTRATIVE HEARINGS
  8.20                               File No. ...........
  8.21  ........ (Public authority)
  8.22  against                        NOTICE OF SUPPORT JUDGMENT
  8.23  ........ (Judgment Debtor)     LEVY AND DISCLOSURE
  8.24  and                            (OTHER THAN EARNINGS)
  8.25  ........ (Third Party)
  8.26     PLEASE TAKE NOTICE that pursuant to Minnesota Statutes, 
  8.27  chapters 518 and 522, the undersigned, as representative of the 
  8.28  public authority responsible for child support enforcement, 
  8.29  makes demand and levies execution upon all money due and owing 
  8.30  by you to the judgment debtor for the amount of the judgment 
  8.31  specified below.  A copy of the notice of support judgment levy 
  8.32  is enclosed.  The unpaid judgment balance is $...... 
  8.33     In responding to this levy, you are to complete the 
  8.34  attached disclosure form and mail it to the public authority, 
  8.35  together with your check payable to the public authority, for 
  8.36  the nonexempt amount owed by you to the judgment debtor or for 
  8.37  which you are obligated to the judgment debtor, within the time 
  8.38  limits in chapter 552. 
  9.1                        Public Authority
  9.2                         Address
  9.3                         (........)
  9.4                         Phone number
  9.5      
  9.6                              DISCLOSURE
  9.7      On the ... day of ......, 19..., the time of service of the 
  9.8   execution levy herein, there was due and owing the judgment 
  9.9   debtor from the third party the following: 
  9.10     (1) Money.  Enter on the line below any amounts due and 
  9.11  owing the judgment debtor, except earnings, from the third party.
  9.12     ......................... 
  9.13     (2) Setoff.  Enter on the line below the amount of any 
  9.14  setoff, defense, lien, or claim which the third party claims 
  9.15  against the amount set forth on line (1).  State the facts by 
  9.16  which the setoff, defense, lien, or claim is claimed.  (Any 
  9.17  indebtedness to you incurred by the judgment debtor within ten 
  9.18  days prior to the receipt of the first execution levy on a debt 
  9.19  may not be claimed as a setoff, defense, lien, or claim against 
  9.20  the amount set forth on line (1).) 
  9.21     ......................... 
  9.22     (3) Exemption.  Enter on the line below any amounts or 
  9.23  property claimed by the judgment debtor to be exempt from 
  9.24  execution. 
  9.25     ......................... 
  9.26     (4) Adverse Interest.  Enter on the line below any amounts 
  9.27  claimed by other persons by reason of ownership or interest in 
  9.28  the judgment debtor's property. 
  9.29     ......................... 
  9.30     (5) Enter on the line below the total of lines (2), (3), 
  9.31  and (4). 
  9.32     .........................  
  9.33     (6) Enter on the line below the difference obtained (never 
  9.34  less than zero when line (5) is subtracted from the amount on 
  9.35  line (1)).  
  9.36     ......................... 
  9.37     (7) Enter on the line below 100 percent of the amount of 
 10.1   the public authority's claim which remains unpaid.  
 10.2      ......................... 
 10.3      (8) Enter on the line below the lesser of line (6) and line 
 10.4   (7).  You are instructed to remit this amount only if it is $10 
 10.5   or more.  
 10.6      ......................... 
 10.7                             AFFIRMATION
 10.8      I, .......... (person signing Affirmation), am the third 
 10.9   party or I am authorized by the third party to complete this 
 10.10  nonearnings disclosure, and have done so truthfully and to the 
 10.11  best of my knowledge. 
 10.12  Dated:..........                Signature
 10.13                                   ..........
 10.14                                   Title
 10.15                                   ..........
 10.16                                   Telephone Number