NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7951
SPONSOR: Titus TITLE OF BILL: An act to amend the civil practice law and rules and
the social services law, in relation to income withholding for child
support
PURPOSE OF BILL:
This bill promotes government efficiencies for the child support program
in New York. It aligns the payment processing of non-Title IV-D and
Title IV-D income withholding orders,
SUMMARY OF PROVISIONS:
Section 1 would amend Civil Practice Law and Rules (CPLR) § 524 1(a) to
provide a definition for who can be an "issuer" of an income execution.
Section 2 would amend CPLR § 5241(b)(1) to replace the term "creditor"
with issuer.
Section 3 would amend § 5241(c)(1) to specify that the income execution
shall be on a form promulgated by OTDA.
Section 4 would amend CPLR § 5241(d) to replace the term "creditor" with
"issuer".
Section 5 would amend CPLR § 5241(f) to replace the term "creditor" with
"issuer".
Section 6 would amend CPLR § 5241(g) to direct the employer or income
payor to follow the directions provided in the income execution with
regard to information to be included with each payment remitted.
Section 7 would amend CPLR § 5242 (c), (d), (e), (f) and (g). Subdivi-
sion (c) is amended to change "wages" to "income" so that the terminol-
ogy aligns with that used in CPLR § 5241(a) which subdivision is appli-
cable to both CPLR § 5241 and CPLR § 5242. This section directs the
courts, in non-Title IV-D cases, to use the form for income withholding
promulgated by OTDA for such purpose. in tandem with the amendments to
CPLR § 5241, this section requires the form promulgated by OTDA to
comply with the requirements contained in 42 U.S.C. § 666(b) so that it
can be characterized as an income withholding order/notice under that
statute. Where the income deduction order is for child support or
combined child and spousal support orders, the court must serve a copy
of the income deduction order on the employer/income payor, the parties,
and the state disbursement unit. This section requires employers and
income payors to follow the instructions provided on the income
deduction order which requires remittances to be paid to and through the
state disbursement unit in a child support or combined child and spousal
support order and to the creditor in a spousal support only order.
Section 8 would amend Social Services Law § 1 11-b to authorize OTDA or
its fiscal agent to act as the federally-mandated "state disbursement
unit" for the purpose of collecting and disbursing support received from
employers and income payors in non-fV-D cases. It would further amend
the law to align the disbursement timeframe from five to two business
days of receipt as required by federal law.
Section 9 provides that the state disbursement unit shall, during the 30
days prior to the effective date of the bill, provide notice to the
employer or income payor and to the creditor that any income execution
or income deduction order issued prior to such effective date which
requires payments to be remitted through the state disbursement unit
shall be made payable to the state disbursement unit instead of the
creditor on and after such effective date.
Section 10 provides that it will take effect two hundred seventy days
following enactment, except that any rule or regulation necessary for
the timely implementation of this act on its effective date may be
promulgated on or before such date.
EXISTING LAW:
Section 5241 of the CPLR sets forth the procedure and notice require-
ments pertaining to income withholding for purposes of the enforcement
of support obligations. It authorizes the support collection unit (SCU),
sheriff, the clerk of court, or an attorney for the creditor to issue an
execution for support enforcement, commonly called the "income
execution."
Section 5242 of the CPLR authorizes the court to enter an income
deduction order for support enforcement.
Subdivision 14 of section 111-b.of the Social Services Law provides the
authority for OTDA to "receive" and "transmit" support paid pursuant to
any order of child support or combined order for child and spousal
support which the court has ordered to be paid pursuant to an income
deduction order. The department is required to maintain a record of its
receipt and transmission of the support which record is to be supplied
to a party upon request, but shall not furnish any additional services
to enforce the support obligation unless the party seeking enforcement
applies for child support services pursuant to Social Services Law §
111-g.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
STATEMENT IN SUPPORT:
Effective May 31, 2012, a new federally-mandated income withholding form
(known as an "IWO") must be used for income withholding in Title IV-D
cases as well as non-Title IV-D cases initially issued on or after Janu-
ary 1, 1994. This form requires all income withholding in both IV-D and
non-1V-D eases to be paid through the state disbursement unit. The faun
provides only very limited opportunity to add state-specific information
relevant to the income withholding process.
In New York, CPLR § 5241 provides for income withholding by SCUs,
private attorneys, sheriffs and clerks of court through issuance of an
income execution. CPLR § 5242 provides authority for the court to issue
an income deduction order to withhold income for the enforcement of
support obligations. Where. these mechanisms involve income withholding
for the purpose of enforcing a child or combined child and spousal
support obligation, they fall under the federal "IWO" mandates set forth
in 42 U.S.C. §§ 654b(a)(1)(13); 666(a)(1), (a)(8), and (b).
Provisions in state law for non-IV-D income withholding are different
from the IV-D provisions. CPLR § 5242(c)(2) requires employers to remit
payments to OTDA pursuant to the agency's authority to receive and tran-
smit such funds for non-IV-D child support or combined child and spousal
support cases under Social Services Law § 111- b(14). However, CPLR §
5242(c)(2) also specifics that each remittance shall be made payable to
the creditor named in the order. In addition, this section provides that
such remittances are to be made within ten (10) days of the date that
the debtor is paid; however 42 U.S.C. § 666(b)(6) -- which applies to
non-IV-D cases because of 42 U.S.C. § 666(a)(8)(B)(iii)- sets forth a
seven (7) business day requirement.
Directing employers and income payors to follow the instructions on the
form promulgated by OTDA will simplify and streamline procedures by
making the requirement for non-1V-D cases align with the 1V-D case
requirements. Similarly, reducing the timeframe for remittances across
the board to seven (7) business days will assist in simplifying the
process for employers and income payors. More importantly, once statuto-
ry authorization is provided to allow remittances to be made payable to
the state disbursement unit, employers and income payers will be able to
send non-IV-D remittances with W-D remittances, thus allowing for elec-
tronic transmission of funds.
Social Services Law § Ill -b (14) is the authorizing statute for the
"unit" designated by OTDA referenced in CPLR § 5242(0(1) to receive
non-IV-D income withholding. Amendments are necessary to the section to
align with the federal mandate requiring the "state disbursement unit"
to collect and disburse the support received pursuant to federal
distribution rules, i.e., requiring a change from five to two business
days.
BUDGET IMPLICATIONS:
These amendments will ensure compliance with all federal requirements
related to income withholding, thereby avoiding any potential federal
fiscal penalties. The amendments address a technical yet important issue
by aligning the payment processing of non-Title IV-D income withholding
orders with Title fV-D income withholding orders. Although it is antic-
ipated that this wily involve a very small number of cases, there will
be some costs associated with this proposal, particularly related to
systems Changes needed to process the withholding. These costs can be
accommodated within existing appropriations.
EFFECTIVE DATE:
The bill takes effect two hundred seventy days following enactment,
except that any rule or regulation necessary for the timely implementa-
tion on its effective date.may be promulgated on or before such date.
