DAR File No. 40435

Human Services, Recovery Services

Rule R527-35

Non-IV-A Fee Schedule

Notice of Proposed Rule

(Amendment)

DAR File No.: 40435
Filed: 05/17/2016 11:52:00 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

Most recently, in 2016, the Social Services Appropriations Committee heard testimony about the fee and requested the Office of Recovery Services (ORS) to provide them with the figure that would come closest to having no affect on ORS's budget in either new revenue or lost revenue while providing clients with a percentage-based fee to assist those clients receiving very low support amounts. As a result of this testimony, the following changes need to be made to the rule. Section R527-35-1 is being updated to split the authority and purpose section into two separate subsections. A reference to Section 62A-11-111 is being added to Subsection R527-35-1(1), which authorizes the Office of Recovery Services/Child Support Services (ORS/CSS) to create rules necessary for the provision of social services. Additional language is also being added to help clarify the purpose for ORS/CSS collecting fees, which is to finance any costs incurred pursuant to Section 62A-11-104. The annual collection processing fee was not previously a part of this rule, but it is being added to provide a more complete list of the fees that are charged by the office. Also, per legislation, the administrative fee of $5 per payment processed, not to exceed $10 per month, is being updated (effective 07/01/2016) increasing to 6% of the payment processed, not to exceed $12 per month. Additional legal references to laws that support and authorize the state in charging fees to pay for services provided are being added to the Authorizing, and Implemented or Interpreted Law part of the citation block.

Summary of the rule or change:

Subsection R527-35-1(1) is being updated to split the authority and purpose into two separate subsections. The legal reference to Section 62A-11-111 is being added to the authority section, as well as the language stating that the office is authorized to create rules necessary for the provision of social services. Subsection R527-35-1(2) is being updated to add the legal reference to Section 62A-11-104 and the language which states that the office is charged with the duty to utilize fees as one method to finance any costs incurred. In Section R527-35-2, the annual collection processing fee was added as the new subsection (1) and the old number (1) was renumbered to (2). In this same section, further down below the list of fees that have been established by the office, a typo is being fixed: the "a" in "jurisdiction" is deleted. Subsection R527-35-1(3) was updated to change the $5 fee, not to exceed $10 per month, to 6% of the payment amount each time a payment is processed, not to exceed $12. Three new references to Utah Code Annotated laws are being added to the Authorizing, and Implemented or Interpreted Law part of the citation block.

State statutory or constitutional authorization for this rule:

• 45 CFR 302.33
• Section 62A-11-104
• Section 62A-11-107
• Section 62A-11-111
• Subsection 63J-1-504(2)(a)

Anticipated cost or savings to:

the state budget:

The number of cases receiving payments, the amount of the payments, and the status of being subject to the fee varies greatly, making it difficult to determine the exact affect on the state budget. This fee change has been discussed in the 2014, 2015, and 2016 General Sessions. Most recently, in 2016, the Social Services Appropriations Committee heard testimony about the fee and requested ORS to provide them with the figure which would come closest to having no affect on ORS's budget in either new revenue or lost revenue while providing clients with a percentage-based fee to assist those clients receiving very low support amounts. Based on analysis of the three most recent years of payments received and fees charged, the $12/month maximum had the least effect on ORS's budget, not causing a decrease in fee revenue based on previous years, but only providing a small increase; as a result, this amount was approved by the Committee as being satisfactorily "revenue-neutral". Implementing the new fee structure has required ORSIS programming, which has taken place within the existing ORS budget and staff over the past two years. In May 2016, ORS is sending approximately 89,500 notices to clients who could be affected by this change. At $0.47 for first-class mail, this will yield $42,065 in postage costs.

local governments:

Administrative rules of the Office of Recovery Services/Child Support Services (ORS/CSS) do not apply to local government; therefore, there are no anticipated costs or savings for any local businesses due to this amendment.

small businesses:

There are no anticipated costs for small business as a result of this rule. The payment processing fee is assessed only to those individuals applying for services with the office.

persons other than small businesses, businesses, or local governmental entities:

The new fee structure is based on a percentage of the payments received within a month, not to exceed a maximum amount; therefore, each individual will be affected in a different way, depending on the amount of each payment received and the number of payments received within a month. What is presented here is the range of possibilities. Early analysis (applying the new fee structure to prior years' payment histories) indicated that the fees paid would decrease for 11-12% of ORS clients based on the new structure. Decreases could be seen by clients who receive smaller child support payment amounts. (For example, a client who receives the $30 Utah minimum support amount would have previously paid $5 if that payment came in one lump sum each month; under the new structure, that client would pay $1.80.) For the other 88-89% of ORS clients based on the early analysis, it is expected that this will represent an increase in fees. The fee increase could be as small as $0.01; any payment over $83.50 would charge $5.01 in fees compared to the previous $5. The largest potential fee increase is $7 and occurs for any individual who previously received at least $200 in child support within a month in one lump sum payment per month; the previous fee would have been $5 to process one payment regardless of the amount, but the new fee would be the $12 maximum. ORS expects that the most common increase experienced will be $2, which represents the change from the previous $10 maximum to process two or more payments per month to the $12 maximum fee.

Compliance costs for affected persons:

The new fee structure is based on a percentage of the payments received within a month, not to exceed a maximum amount; therefore, each individual will be affected in a different way, depending on the amount of each payment received and the number of payments received within a month. What is presented here is the range of possibilities. Early analysis (applying the new fee structure to prior years? payment histories) indicated that the fees paid would decrease for 11-12% of ORS clients based on the new structure. Decreases could be seen by clients who receive smaller child support payment amounts. (For example, a client who receives the $30.00 Utah minimum support amount would have previously paid $5 if that payment came in one lump sum each month; under the new structure, that client would pay $1.80.) For the other 88 - 89% of ORS clients based on the early analysis, it is expected that this will represent an increase in fees. The fee increase could be as small as $0.01; any payment over $83.50 would charge $5.01 in fees compared to the previous $5. The largest potential fee increase is $7 and occurs for any individual who previously received at least $200 in child support within a month in one lump sum payment per month; the previous fee would have been $5 to process one payment regardless of the amount, but the new fee would be the $12 maximum. ORS expects that the most common increase experienced will be $2, which represents the change from the previous $10.00 maximum to process two or more payments per month to the $12 maximum fee.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no anticipated fiscal impacts to businesses as a result of this rule.

Ann Silverberg Williamson, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Human Services
Recovery Services
515 E 100 S
SALT LAKE CITY, UT 84102-4211

Direct questions regarding this rule to:

• LeAnn Wilber at the above address, by phone at 801-741-7516, by FAX at 801-536-8509, or by Internet E-mail at lwilber@utah.gov
• Julene Robbins at the above address, by phone at 801-538-4521, by FAX at 801-538-3942, or by Internet E-mail at jhjonesrobbins@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/15/2016

This rule may become effective on:

07/22/2016

Authorized by:

Liesa Stockdale, Director

R527. Human Services, Recovery Services.

R527-35. Non-IV-A Fee Schedule.

R527-35-1. Authority and Purpose.

1. The Department of Human Services is authorized to create rules necessary for the provision of social services by Section 62A-11-111. The Office of Recovery Services/Child Support Services (ORS/CSS) is authorized to adopt, amend, and enforce rules by Section 62A-11-107.

2. The purpose of this rule is to provide information regarding the ORS/CSS fee schedule for Non-IV-A cases which is authorized by Federal Regulations found at 45 CFR 302.33. ORS/CSS is responsible for utilizing fees as one method to finance any costs incurred pursuant to Section 62A-11-104. This rule outlines when a fee will be charged and the amount that will be assessed on a case that qualifies for a particular fee.

 

R527-35-2. Non-IV-A Fee Schedule.

Pursuant to 45 CFR 302.33 (2010) the Office of Recovery Services may charge an applicant or recipient of child support services who is not receiving IV-A financial assistance or Medicaid, one or more fees for specific services. These fees are itemized below:

The following fee s, which ha[s]ve been established by the federal government:

1. the Annual Collection Processing Fee for Child Support Services of $25. This fee is charged to the custodial parent who has never received cash assistance. The fee is retained from child support collected on behalf of the custodial parent after $500.00 has been collected within the one year period, October 1 through September 30 each year.

2. the full IRS enforcement fee of $122.50 is charged if a case qualifies for full IRS collection services, the obligee requests those services, and the amount of the child support obligation is certified for those services by the United States Secretary of the Treasury.

The following fees, which have been established by the Office:

1. a Parent Locator Service fee of $20.00. This fee is waived if the case was closed within the last 12 months for the reason CTF (cannot find the non-custodial parent) or AFC (non-custodial parent lives in a foreign jurisdic[a]tion);

2. the cost of genetic testing if the alleged father is excluded as the biological father;

3. an administrative fee of [$5.00 per]6% of the payment amount each time a payment is processed, not to exceed $1[0]2.00 per month;

4. a fee of $25.00, to be paid at the time the obligor's federal tax refund is intercepted to offset a Non-IV-A support arrearage if the refund is $50.00 or more. If the refund is more than $25.00 but less than $50.00, the fee is the refund amount minus $25.00;

5. the Child Support Lien Network (CSLN) fee of $52.00, to be paid at the time the levy is processed.

 

KEY: child support

Date of Enactment or Last Substantive Amendment: [March 27, 2012]2016

Notice of Continuation: November 16, 2015

Authorizing, and Implemented or Interpreted Law: 45 CFR 302.33; 62A-11-104; 62A-11-107; 62A-11-111; 63J-1-504(2)(a)