Chapter 0572

Chapter 572 Oregon Laws 2003

AN ACT

HB 2110

Relating to administration of child support program; creating new provisions; and amending ORS 23.160, 25.010, 25.020, 25.085, 25.125, 25.275, 25.372, 25.396, 25.414, 25.424, 25.610, 25.710, 107.135, 109.015, 109.103, 416.425, 416.435, 419B.406, 419C.597, 657.855 and 659A.885.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 23.160 is amended to read:

23.160. (1) All property, including franchises, or rights or interest therein, of the judgment debtor, shall be liable to an execution, except as provided in this section and in other statutes granting exemptions from execution. If selected and reserved by the judgment debtor or the agent of the judgment debtor at the time of the levy, or as soon thereafter before sale thereof as the same shall be known to the judgment debtor, the following property, or rights or interest therein of the judgment debtor, except as provided in ORS 23.220, shall be exempt from execution:

(a) Books, pictures and musical instruments to the value of $600.

(b) Wearing apparel, jewelry and other personal items to the value of $1,800.

(c) The tools, implements, apparatus, team, harness or library, necessary to enable the judgment debtor to carry on the trade, occupation or profession by which the judgment debtor habitually earns a living, to the value of $3,000.

(d) A vehicle to the value of $1,700. As used in this paragraph “vehicle” includes an automobile, truck, trailer, truck and trailer or other motor vehicle.

(e) Domestic animals and poultry kept for family use, to the total value of $1,000 and food sufficient to support such animals and poultry for 60 days.

(f) Household goods, furniture, radios, a television set and utensils all to the total value of $3,000, if the judgment debtor holds the property primarily for the personal, family or household use of the judgment debtor; provisions actually provided for family use and necessary for the support of a householder and family for 60 days and also 60 days’ supply of fuel.

(g) All property of the state or any county or incorporated city therein, or of any other public or municipal corporation of like character.

(h) All professionally prescribed health aids for the debtor or a dependent of the debtor.

(i) Spousal support, child support, or separate maintenance to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(j) The debtor’s right to receive, or property that is traceable to, an award under any crime victim reparation law.

(k) The debtor’s right to receive, or property that is traceable to, a payment or payments, not to exceed a total of $10,000, on account of personal bodily injury of the debtor or an individual of whom the debtor is a dependent.

(L) The debtor’s right to receive, or property that is traceable to, a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(m) Veterans’ benefits and loans.

(n) The debtor’s right to receive an earned income tax credit under the federal tax laws and any moneys that are traceable to a payment of an earned income tax credit under the federal tax laws.

(o) The debtor’s interest, not to exceed $400 in value, in any personal property. However, this exemption may not be used to increase the amount of any other exemption.

(2) If the property selected or reserved by the judgment debtor as exempt is adjudicated by the court out of which the execution issued to be of a value in excess of that allowed by the appropriate paragraph of subsection (1) of this section, the officer making the levy shall proceed to sell such property. Out of the proceeds of such sale, the officer shall deduct costs of sale and shall pay to the judgment debtor an amount equivalent to the value declared to be exempt by any of the paragraphs of subsection (1) of this section and shall apply the balance of the proceeds of sale on the execution. No sale shall be made under such execution unless the highest bid made exceeds the appropriate exemption claimed and allowed plus costs of sale. If no bid is received in excess of the value allowed by the appropriate paragraph of subsection (1) of this section, the costs of sale shall be borne by the judgment creditor.

(3) If two or more members of a household are judgment debtors, each judgment debtor shall be entitled to claim the exemptions in subsection (1)(a), (b), (c), (d), (j), (k) and (L) of this section in the same or different properties. The exemptions when claimed for the same property shall be combined at the option of the debtors.

(4) Notwithstanding any other provision of law except ORS 657.855, if a writ of garnishment or other execution is issued to collect past due support as defined in ORS 18.600, 75 percent of unemployment compensation benefits, workers’ compensation benefits and other benefits paid to the debtor by the United States, by the state or by a political subdivision of the state are exempt. The exemption related to unemployment compensation benefits provided by this subsection is subject to ORS 657.855. The exemption provided by this subsection applies without regard to whether the payment is made on a periodic basis or in a lump sum, including any lump sum payable pursuant to a settlement or judgment. Notwithstanding subsection (1)(k) of this section, if a payment is made under a settlement or judgment on account of personal bodily injury and the garnishment or other execution is issued to collect past due support as defined in ORS 18.600, the lesser of 75 percent of the payment or $7,500 is exempt.

SECTION 2. ORS 25.010 is amended to read:

25.010. As used in ORS chapters 25, 107, 109[, 110] and 416 and any other statutes providing for support payments or support enforcement procedures, unless the context requires otherwise:

(1) “Administrator” means either the Administrator of the Division of Child Support of the Department of Justice or a district attorney, or the administrator’s or a district attorney’s authorized representative.

(2) “Child support rights” means the right to establish or enforce an obligation imposed or imposable by law to provide support, including but not limited to medical support and an unsatisfied obligation to provide support.

(3) “Department” means the Department of Justice.

(4) “Disposable income” means that part of the income of an individual remaining after the deduction from the income of any amounts required to be withheld by law except laws enforcing spousal or child support and any amounts withheld to pay medical or dental insurance premiums.

(5) “Employer” means any entity or individual who engages an individual to perform work or services for which compensation is given in periodic payments or otherwise.

(6) “Income” is any monetary obligation in excess of $4.99 after the fee described in ORS 25.414 (6) has been deducted that is in the possession of a third party owed to an obligor and includes but is not limited to:

(a) Compensation paid or payable for personal services whether denominated as wages, salary, commission, bonus or otherwise;

(b) Periodic payments pursuant to a pension or retirement program;

(d) Interest payments;

(e) Periodic payments from a trust account;

(f) Any program or contract to provide substitute wages during times of unemployment or disability;

(g) Any payment pursuant to ORS chapter 657; or

(h) Amounts payable to independent contractors.

(7) “Obligee” means a child or caretaker parent or custodian, spouse, former spouse or other dependent person for whose benefit a court or the administrator has ordered a payment of support.

(8) “Obligor” means any person who has been ordered by a court or the administrator to make payments for the support of a child or a caretaker parent or custodian, spouse, former spouse or other dependent person.

(9) “Order to withhold” means an order or other legal process that requires a withholder to withhold support from the income of an obligor.

(10) “Public assistance” has the meaning given that term in ORS 416.400.

[(10)] (11) “Withholder” means any person who disburses income and includes but is not limited to an employer, conservator, trustee or insurer of the obligor.

SECTION 3. ORS 25.020, as amended by section 3, chapter 455, Oregon Laws 2001, section 23, chapter 75, Oregon Laws 2003 (Enrolled House Bill 2526), and section 17a, chapter 73, Oregon Laws 2003 (Enrolled House Bill 2340), is amended to read:

25.020. (1) Support payments for or on behalf of any person, ordered, registered or filed under ORS chapter 25, 107, 108, 109, 110, 416, 419B or 419C, unless otherwise authorized by ORS 25.030, shall be made to the Department of Justice, as the state disbursement unit:

(a) During periods for which support is assigned under ORS 418.032, 418.042, 419B.406 or 419C.597;

(b) As provided by rules adopted under section 2, chapter 73, Oregon Laws 2003 (Enrolled House Bill 2340) [of this 2003 Act], when public assistance [as defined by ORS 411.010] is provided to a person who receives or has a right to receive support payments on the person’s own behalf or on behalf of another person;

(d) For any period during which support enforcement services are provided under ORS 25.080;

(e) When ordered by the court under ORS 419B.400;

(f) When a support order that is entered or modified on or after January 1, 1994, includes a provision requiring the obligor to pay support by income withholding; or

(g) When ordered by the court under any other applicable provision of law.

(2) The Department of Justice shall disburse payments, after lawful deduction of fees and in accordance with applicable statutes and rules, to those persons and entities that are lawfully entitled to receive such payments.

(3)(a) When the administrator is providing support enforcement services under ORS 25.080, the obligee may enter into an agreement with a collection agency, as defined in ORS 697.005, for assistance in collecting child support payments.

(b) The Department of Justice:

(A) Except as otherwise provided in this paragraph, shall disburse support payments, to which the obligee is legally entitled, to the collection agency according to the terms of the agreement between the obligee and the collection agency;

(B) May not disburse moneys to the collection agency before the obligee submits the form referred to in paragraph (c)(A) of this subsection to the department and the department adjusts its support payment records;

(C) May not disburse moneys to the collection agency after 180 days following the date the department adjusts its support payment records as described in subparagraph (B) of this paragraph;

(D) May not disburse moneys to the collection agency if the collection agency violates any provision of this subsection;

(E) Shall credit the obligor’s account for the full amount of each support payment received by the department and disbursed to the collection agency;

(F) Shall develop the form referred to in paragraph (c)(A) of this subsection, which shall include a notice to the obligee printed in type size equal to at least 12-point type that the obligee may be eligible for support enforcement services from the department or the district attorney without paying the interest or fee that is typically charged by a collection agency; and

(G) May use information disclosed by the collection agency to provide support enforcement services under ORS 25.080.

(A) Provide to the department, on a form approved by the department, information about the agreement with the collection agency; and

(B) Promptly notify the department when the agreement is terminated.

(d) The collection agency:

(A) May provide investigative and location services to the obligee and disclose relevant information from those services to the department for purposes of providing support enforcement services under ORS 25.080;

(B) May not charge interest or a fee for its services exceeding 20 percent of each support payment received; and

(C) May not initiate, without written authorization from the department, any enforcement action relating to support payments on which support enforcement services are provided by the department under ORS 25.080.

(4) The Department of Justice may immediately transmit payments received from any obligor who has not previously tendered any payment by a check or instrument that was not paid or was dishonored, to the obligee, without waiting for payment or clearance of the check or instrument received.

(5) The Department of Justice shall notify each obligor and obligee by mail when support payments shall be made to the department and when the obligation to make payments in this manner shall cease.

(6)(a) The administrator shall provide information about a child support account directly to a party to the support order regardless of whether the party is represented by an attorney. As used in this subsection, “information about a child support account” means the:

(A) Date of issuance of the support order.

(B) Amount of the support order.

(D) Dates and amounts of disbursements.

(E) Payee of any disbursements.

(F) Amount of any arrearage.

(G) Source of any collection.

(b) Nothing in this subsection limits the information the administrator may provide by law to a party who is not represented by an attorney.

(7) Any pleading for the entry or modification of a support order must contain a statement that payment of support under a new or modified order will be by income withholding unless an exception to payment by income withholding is granted under ORS 25.396.

(8)(a) Except as provided in paragraph (d) of this subsection, a decree or order establishing paternity or including a provision concerning support shall contain the residence, mailing or contact address, Social Security number, telephone number and driver license number of each party and the name, address and telephone number of all employers of each party.

(b) The decree or order shall also include notice that the obligor and obligee:

(A) Must inform the court and the administrator in writing of any change in the information required by this subsection within 10 days after such change; and

(B) May request that the administrator review the amount of support ordered after two years or at any time upon a substantial change of circumstances.

(c) The administrator may require of the parties any additional information that is necessary for the provision of support enforcement services under ORS 25.080.

(d)(A) Upon a finding, that may be made ex parte, that the health, safety or liberty of a party or child would unreasonably be put at risk by the disclosure of information specified in this subsection or by the disclosure of other information concerning a child or party to a paternity or support proceeding or if an existing order so requires, a court or administrator or administrative law judge, when the proceeding is administrative, shall order that the information not be contained in any document provided to another party or otherwise disclosed to a party other than the state.

(B) The Department of Justice shall adopt rules providing for similar confidentiality for information described in subparagraph (A) of this paragraph that is maintained by an entity providing support enforcement services under ORS 25.080.

(9)(a) Except as otherwise provided in paragraph (b) of this subsection, in any subsequent child support enforcement action, the court or administrator, upon a showing of diligent effort made to locate the obligor or obligee, may deem due process requirements to be met by mailing notice to the last-known residential, mailing or employer address or contact address as provided in ORS 25.085.

(b) Service of an order directing an obligor to appear in a contempt proceeding is subject to ORS 33.015 to 33.155.

(10) Subject to ORS 25.030, this section, to the extent it imposes any duty or function upon the Department of Justice, shall be deemed to supersede any provisions of ORS chapters 107, 108, 109, 110, 416, 419A, 419B and 419C that would otherwise impose the same duties or functions upon the county clerk or the Department of Human Services.

(11) Except as provided for in subsections (12), (13) and (14) of this section, credit [shall] may not be given for payments not made to the Department of Justice as required under subsection (1) of this section.

(12) The Department of Justice shall give credit for payments not made to the department:

(a) When payments are not assigned to this or another state and the obligee and obligor agree in writing that specific payments were made and should be credited;

(b) When payments are assigned to the State of Oregon, the obligor and obligee make sworn written statements that specific payments were made, canceled checks or other substantial evidence is presented to corroborate their statements and the obligee has been given prior written notice of any potential criminal or civil liability that may attach to an admission of the receipt of assigned support;

(c) When payments are assigned to another state and that state verifies that payments not paid to the department were received by the other state; or

(d) As provided by rule adopted under section 2, chapter 73, Oregon Laws 2003 (Enrolled House Bill 2340) [of this 2003 Act].

(13) An obligor may apply to the Department of Justice for credit for payments made other than to the Department of Justice. If the obligee or other state does not provide the agreement, sworn statement or verification required by subsection (12) of this section, credit may be given pursuant to order of an administrative law judge assigned from the Office of Administrative Hearings established under section 3, chapter 849, Oregon Laws 1999, after notice and opportunity to object and be heard are given to both obligor and obligee. Notice shall be served upon the obligee as provided by ORS 25.085. Notice to the obligor may be by regular mail at the address provided in the application for credit. A hearing conducted under this subsection is a contested case hearing and ORS 183.413 to 183.470 apply. Any party may seek a hearing de novo in the circuit court.

(14) Nothing in this section precludes the Department of Justice from giving credit for payments not made to the department when there has been a judicially determined credit or satisfaction or when there has been a satisfaction of support executed by the person to whom support is owed.

(15) The Department of Justice shall adopt rules that:

(a) Direct how support payments that are made through the department are to be applied and distributed; and

(b) Are consistent with federal regulations.

SECTION 4. ORS 25.085 is amended to read:

25.085. (1) In any proceeding under ORS 25.080, service of legal documents upon an obligee may be by regular mail to the address at which the obligee receives public assistance, [as defined in ORS 411.010, or] to an address provided by [an] the obligee on the obligee’s application for child support enforcement services[,] or to any other address given by the obligee. When service is authorized by regular mail under this section, proof of service may be by notation upon the computerized case record made by the person making the mailing. The notation shall set forth the address to which the documents were mailed, the date they were mailed, the description of the documents mailed and the name of the person making the notation. If the documents are returned by the postal service as undeliverable as addressed, that fact shall be noted on the computerized case record. If no new address for service by regular mail can be obtained, service shall be by certified mail, return receipt requested or by personal service upon the obligee.

(2) Notwithstanding any other provision of this chapter or ORS chapter 110 or 416, when a case is referred to this state by a public child support agency of another state for action in this state, there is no requirement that an obligee, present in the initiating state and receiving child support enforcement services from that state, be served in any action taken in this state as a consequence of the interstate referral. In such cases the requirement to serve the obligee that would otherwise apply is satisfied by sending to the initiating agency in the other state, by regular mail, any documents that would otherwise be served upon the obligee.

(3) The appropriate child support agency of the state shall make any mailings to or service upon the obligee that is required by this section.

SECTION 5. ORS 25.125, as amended by section 72, chapter 75, Oregon Laws 2003 (Enrolled House Bill 2526), and section 22a, chapter 73, Oregon Laws 2003 (Enrolled House Bill 2340), is amended to read:

25.125. (1) The Department of Justice may return moneys to an obligor when the department determines that the obligor has paid more moneys than are due under a support obligation. However, when the obligor has an ongoing support obligation, the department may give the obligor credit for the excess amount paid and apply the credit to the future support obligation until the credit is fully used. When the department applies a credit to offset a future support obligation, the department shall so notify the obligee. The notice must inform the obligee that, if the obligee requests, the department will conduct an administrative review to determine if the record keeping and accounting related to the calculation of the credit balance is correct. The department shall conduct the administrative review within 30 days after receiving the request.

(2) An overpayment in favor of the state is created when the Department of Justice, under ORS 25.020, has transmitted moneys received from an obligor to an obligee or a collection agency, a child support agency of another state or an agency of this state and:

(a) The amount transmitted is more than the support obligation requires and the Department of Justice has returned the excess to the obligor under subsection (1) of this section;

(b) The Department of Justice has misapplied moneys received; or

(c) The amount transmitted is attributable in whole or in part to a tax refund offset collection all or part of which has been taken back by the Internal Revenue Service or the Department of Revenue.

(3)(a) The obligee or the agency to whom the moneys were transmitted owes the amount of the overpayment to the state. The Department of Justice shall:

(A) [Shall] Attempt to recover the overpayment if it is cost-effective to do so;

(B) [Shall] Notify the obligee or the agency to whom the overpayment was made that the obligee or agency owes money to the state and specify the amount of the overpayment to be returned to the department; and

(b) If the obligee does not file a timely written objection, the overpayment amount determined by the department is final and the provisions of subsection (4) of this section apply. If the department does not resolve an objection to an obligee’s satisfaction, an administrative law judge assigned from the Office of Administrative Hearings established under section 3, chapter 849, Oregon Laws 1999, shall hear the objection. An order by the administrative law judge is final. An obligee may appeal the decision of an administrative law judge to the circuit court for a hearing de novo.

(c) Notwithstanding paragraph (a) of this subsection, if an agency of this or another state owes the overpayment, the agency shall return the amount of the overpayment to the department without notice and opportunity to object.

(4) The amount of the overpayment specified in subsection (3)(a) of this section is a liquidated debt and a delinquent amount owed to the state. The Department of Justice may recover the debt by obtaining from the obligee a voluntary assignment of a portion of future support payments to be applied to the debt or in any other way permitted by law.

(5)(a) In addition to the debt created under subsection (2) of this section, a debt in favor of the state is created when:

(A) The Department of Justice receives a check for support amounts due from an obligor or withholder subject to an order to withhold under this chapter;

(B) The Department of Justice transmits the amount to the obligee, a child support agency of another state or an agency of this state; and

(b) When a debt is created under paragraph (a) of this subsection, the obligor or withholder who presented the check owes the amount of money specified on the check to the state.

(A) Attempt to recover the debt if it is cost-effective to do so;

(B) Notify the obligor or withholder who presented the check that the obligor or withholder owes the money to the state; and

(d) The amount of the debt specified in paragraph (c) of this subsection is a liquidated debt and a delinquent amount owed to the state. The Department of Justice may recover the debt in any way permitted under law.

(6)(a) When a motion has been filed to terminate, vacate or set aside a support order or to modify a support order [to zero] because of a change in physical custody of the child, the [Department of Justice] administrator may suspend enforcement of the support order if:

(A) Collection of support would result in a credit balance if the motion were granted; [or] and

[(B) The order is being terminated or modified to zero because the obligor has physical custody of the child.]

[(b) When enforcement is to be suspended under this subsection, the obligee shall be notified and may object on the basis that the child is not in the physical custody of the obligor or that the obligee has not consented to the child being in the physical custody of the obligor. When the obligee files an objection under this paragraph, the department may not suspend enforcement.]

(B) The obligee does not object to suspending enforcement of the support order.

(b) The obligee may object under this subsection only on the grounds that:

(A) The child is not in the physical custody of the obligor;

(B) The child is in the physical custody of the obligor without the consent of the obligee; or

(C) A credit balance would not result if the motion were granted.

(c) As used in this subsection, “credit balance” means that payments have been made in excess of all amounts owed by an obligor for ongoing and past due child support.

(7) The Department of Justice shall adopt rules to carry out the provisions of this section.

SECTION 6. ORS 25.275, as amended by section 26a, chapter 73, Oregon Laws 2003 (Enrolled House Bill 2340), and section 75, chapter 75, Oregon Laws 2003 (Enrolled House Bill 2526), is amended to read:

25.275. (1) The Division of Child Support of the Department of Justice shall establish by rule a formula for determining child support awards in any judicial or administrative proceeding. In establishing the formula, the division shall take into consideration the following criteria:

(a) All earnings, income and resources of each parent, including real and personal property;

(b) The earnings history and potential of each parent;

(d) The ability of each parent to borrow;

(e) The educational, physical and emotional needs of the child for whom the support is sought;

(f) The amount of assistance that would be paid to the child under the full standard of need of the state’s IV-A plan;

(g) Preexisting support orders and current dependents; and

[(h) Any Social Security or Veterans’ benefits paid to the child, or to a representative payee administering the funds for the child’s use and benefit, as a result of a parent’s disability or retirement; and]

[(i)] (h) Other reasonable criteria that the division may find to be appropriate.

(2) The formula described in subsection (1) of this section must also comply with the following standards:

(a) The child is entitled to benefit from the income of both parents to the same extent that the child would have benefited had the family unit remained intact or if there had been an intact family unit consisting of both parents and the child.

(b) Both parents should share in the costs of supporting the child in the same proportion as each parent’s income bears to the combined income of both parents.

(3) The formula described in subsection (1) of this section must be designed to ensure, as a minimum, that the child for whom support is sought benefits from the income and resources of the absent parent on an equitable basis in comparison with any other minor children of the absent parent.

(4) The [administrator, an administrative law judge or a court shall reduce or increase the] child support obligation to be paid by the obligor and determined under the formula described in subsection (1) of this section:

(a) May be reduced or increased in consideration of the costs of health insurance incurred by the obligor or obligee, as provided in ORS 25.255.

(b) May be reduced dollar for dollar in consideration of any Social Security or apportioned Veterans’ benefits paid to the child, or to a representative payee administering the funds for the child’s use and benefit, as a result of the obligor’s disability or retirement.

(c) Shall be reduced dollar for dollar in consideration of any Survivors’ and Dependents’ Educational Assistance under 38 U.S.C. chapter 35 paid to the child, or to a representative payee administering the funds for the child’s use and benefit, as a result of the obligor’s disability or retirement.

SECTION 7. ORS 25.372 is amended to read:

25.372. ORS 25.372 to 25.427 [and the amendments to ORS 23.170, 23.175, 23.185 (1999 Edition), 25.010, 25.070, 25.381, 25.384, 29.145 (1999 Edition), 29.147 (1999 Edition), 29.411 (1999 Edition), 29.415 (1999 Edition), 109.015, 238.445, 409.021, 419B.408, 419C.600, 656.234, 657.780, 659.010 (1999 Edition) and 659.121 (1999 Edition) by sections 4 and 22 to 49, chapter 798, Oregon Laws 1993,] apply to current support, arrears and interest on arrears, independently or combined, whether arrears are owed to an obligee, the state or a foreign jurisdiction.

SECTION 8. ORS 25.396, as amended by section 32, chapter 73, Oregon Laws 2003 (Enrolled House Bill 2340), is amended to read:

25.396. [(1) An obligor who is subject to an order to withhold issued under ORS 25.378 (1) may request that withholding be discontinued or not initiated if:]

[(a) All arrearages are paid in full;]

[(b) The obligor has complied with the terms of a previously allowed exemption from withholding; and]

[(c)(A) The obligor and the obligee agree in writing to an alternative arrangement; or]

[(B) A court or the administrator makes a written finding and explanation that there is good cause not to require the withholding.]

(1) When a court or the administrator enters or modifies a support order, the court or administrator may grant an exception to income withholding required under ORS 25.378 if the court or administrator makes a written finding that there is good cause not to require income withholding. Good cause exists when there is proof of timely payment of previously ordered support and when initiating or continuing income withholding would not be in the best interests of the child.

(2) The court or administrator may grant an exception to income withholding required under ORS 25.378 if:

(a) The obligor and obligee at any time agree in writing to an alternative payment method;

(b) When money is owed to the state under the support order, the state agrees in writing to the alternative payment method;

(c) The obligor has paid in full all arrears accrued under the support order;

(d) The obligor has complied with the terms of any previous exception granted under this section; and

(e) The court or administrator accepts the alternative payment method.

(3) Notwithstanding subsection (1) of this section, when child support is currently assigned to the state and the child is in the custody of the Oregon Youth Authority or the Department of Human Services, the state or the obligor may request and the court or administrator may grant an exception from income withholding if:

[(2)(a) The state or the obligor may request that withholding be discontinued or not initiated if:]

[(A) Child support is currently assigned to the state and the child is in the custody of the Oregon Youth Authority or the Department of Human Services;]

[(B)] (a) The order to withhold is a barrier to reunification of the family or rehabilitation of the youth or is prejudicial to the obligor’s ability to provide for another child to whom a duty of support is owed; and

[(C)] (b) The state and the obligor [enter into a written alternative payment agreement] agree in writing to an alternative payment method.

[(b) The Department of Justice shall adopt rules and establish procedures to implement this subsection.]

[(3)(a) The entity to whom the state or an obligor makes a request under subsection (1) or (2) of this section is:]

[(A) The district attorney or the Division of Child Support, whichever is appropriate, when support services are being provided by the entity under ORS 25.080; or]

[(B) In all other cases, the circuit court.]

[(b) When the obligor is making a request concerning withholding for spousal support, the obligor shall make the request to the district attorney or Division of Child Support only if the district attorney or Division of Child Support is enforcing the spousal support order under ORS 25.080 (4)(c) or (d). In all other cases, the obligor shall make the request to the circuit court.]

[(c) Appeal of a decision of the district attorney or the Division of Child Support is to the circuit court for a hearing under ORS 183.484.]

[(4) If money is owed to the state under the support order that is the subject of an agreement under subsection (1)(c)(A) of this section, the state must also be a party to the written agreement. The written agreement must be reviewed and entered in the record by the court or administrator.]

[(5) For purposes of subsection (1) of this section, good cause exists when there is proof of timely payment of previously ordered support in cases involving the modification of support orders and there are no arrearages.]

(4) Exceptions to income withholding described in this section may be granted by the administrator or the court, except that when support enforcement services are being provided under ORS 25.080 the only permissible alternative payment methods are an electronic funds transfer to the Department of Justice or another method permitted under rules adopted under this section.

(5) A party may appeal the administrator’s decision granting or denying an exception under this section to the circuit court in accordance with ORS 183.484.

(6) Income withholding may be terminated only if the conditions set forth in this section are met.

(7) The Department of Justice shall adopt rules and establish procedures to implement this section.

SECTION 9. ORS 25.414 is amended to read:

25.414. (1) The withholder shall withhold from the obligor’s disposable monthly income, other than workers’ compensation under ORS chapter 656 or unemployment compensation under ORS chapter 657, the amount stated in the order to withhold. The entity issuing the order to withhold shall compute this amount subject to the following:

(a) If withholding is for current support only, the amount to be withheld is the amount specified as current support in the support order.

(b) If withholding is for current support and there is an arrearage, the amount to be withheld is 120 percent of the amount specified as current support in the support order.

(A) The amount of the last ordered monthly support.

(B) If there is no last ordered monthly support amount, the monthly support amount used to calculate the arrearage amount specified in the order or judgment for arrearage.

(C) If there is no last ordered monthly support amount and if there was no monthly support amount, an amount calculated under the formula established under ORS 25.275. For purposes of this subparagraph, this calculation shall be based on the obligor’s current monthly gross income or, if the obligor’s current monthly gross income is not known, the Oregon hourly minimum wage converted to a monthly amount based upon a 40-hour workweek, zero income for the obligee, and one joint child, regardless of how many children the parties may actually have. No rebuttals to this calculation may be allowed.

(d) Notwithstanding the amount determined to be withheld under paragraph (c) of this subsection, the obligor must retain disposable monthly income of at least 160 times the applicable federal minimum hourly wage prescribed by section 6 (a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206) or any future minimum hourly wages prescribed in that section.

(2) The amount to be withheld from unemployment compensation under ORS chapter 657 is calculated as follows:

(a) If withholding is for a current support order, regardless of the existence of arrearage, the amount to be withheld is the lesser of:

(A) Twenty-five percent of the benefits paid; or

(B) The current monthly support obligation. The entity issuing the order to withhold may convert the monthly support obligation amount to a percentage to be withheld from each benefits payment. However, the total amount withheld in one month may not exceed 25 percent of the benefits paid in that month or the current monthly support obligation, whichever is less.

(b) If withholding is for arrearage only, the amount to be withheld is the lesser of:

(A) Fifteen percent of the benefits paid; or

(B) The amount of the last ordered monthly support obligation. The entity issuing the order to withhold may convert the last ordered monthly support obligation amount to a percentage to be withheld from each benefits payment. However, the total amount withheld in one month may not exceed 15 percent of the benefits paid in that month or the amount of the last ordered monthly support obligation, whichever is less.

(c) The withholder may not charge or collect a [No] processing fee [shall be charged or collected] when withholding from unemployment compensation.

(3) The amount to be withheld from workers’ compensation under ORS chapter 656 is set forth in ORS 656.234.

(4) Notwithstanding any other provision of this section, when withholding is from a lump sum payment or benefit, including but not limited to retroactive workers’ compensation benefits, lump sum retirement plan disbursements or withdrawals, insurance payments or settlements, severance pay, bonus payments or any other similar payments or benefits that are not periodic recurring income, the amount subject to withholding for payment of a support obligation may not exceed one-fourth of the amount of the lump sum payment or benefit.

(5) Notwithstanding any other provision of this section, [when withholding is only for arrearage assigned to this or another state, the Department of Justice] the administrator may set a lesser amount to be withheld if the obligor demonstrates the withholding is prejudicial to the obligor’s ability to provide for a child the obligor has a duty to support. The Department of [Human Services] Justice shall adopt rules consistent with federal regulations to implement this subsection.

(6) Except as provided in subsection (2) of this section, the withholder may deduct from the obligor’s disposable income a monthly processing fee not to exceed $5. The processing fee is in addition to the amount calculated to be withheld for support, unless the amount to be withheld for support is the maximum allowed under subsection (8) of this section, in which case the fee is deducted from the amount withheld as support.

(7) If there are multiple withholding orders against the same obligor, the amount to be withheld is the sum of each support order calculated independently.

(8) No withholding as calculated under this section, including the processing fee permitted in subsection (6) of this section, shall exceed 50 percent of the obligor’s net disposable income. The limit established in this subsection applies whenever withholding is implemented under this section, whether by a single order or by multiple orders against the same obligor.

(9) When the obligor’s income is not sufficient for the withholder to fully comply with each withholding order, the withholder shall withhold the maximum amount allowed under this section. If all withholding orders for a particular obligor are payable to or through the Department of Justice, the withholder shall pay to the department [of Justice] the income withheld and the department [of Justice] shall determine priorities for allocating income withheld to multiple child support cases relative to that obligor. If one or more of the withholding orders for a particular obligor require payment other than to or through the department [of Justice], the withholder shall use the following to determine priorities for withholding and allocating income withheld to multiple child support cases:

(a) If the amount withheld from the obligor’s income is sufficient to pay the current support due to each case but is not enough to fully comply with the withholding order for each case where past due support is owed, the withholder shall:

(A) Pay to each case the amount of support due for the current month; and

(B) Pay the remainder of the amount withheld in equal amounts to each case where [arrearages are] past due support is owed. However, no case shall receive more than the total amount of current support and past due support owed to that case at the time the payment is made.

(b) If the amount withheld is not sufficient to pay the current support due to each case, each case shall be paid a proportionate share of the amount withheld. The withholder shall determine this for each case by dividing the monthly amount ordered as current support for that case by the combined monthly amount ordered as current support for all cases relative to the same obligor, and multiplying this percentage by the total amount withheld.

(10) An order to withhold income is not subject to the limitations of ORS 23.186.

(11) A withholder shall withhold funds as directed in the order to withhold, except that when a withholder receives an income-withholding order issued by another state, the withholder shall apply the income-withholding law of the state of the obligor’s principal place of employment in determining:

(a) The withholder’s fee for processing an income-withholding order;

(b) The maximum amount permitted to be withheld from the obligor’s income;

(c) The time periods within which the withholder must implement the income-withholding order and forward the child support payment;

(d) The priorities for withholding and allocating income withheld for multiple child support obligees; and

(e) Any withholding terms or conditions not specified in the order.

SECTION 10. ORS 25.424 is amended to read:

25.424. (1) [No] A withholder is not subject to civil liability to an individual or agency for conduct or actions in compliance with an order to withhold if the withholder:

(a) Is served with an order to withhold under ORS 25.402 that is regular on its face; and

(b) Complies with the terms of the order if the order appears to be in compliance with ORS 25.402.

(2) The withholder is liable for all amounts that the withholder fails to withhold or pay as required by the order to withhold or withholds or pays in excess of the amount required by the order to withhold. The holder of support rights, the obligor, the Division of Child Support or a district attorney may bring an action against the withholder:

(a) To recover all amounts that the withholder failed to withhold or pay or withheld or paid in excess of the amount required;

(b) To recover an additional amount as damages not to exceed the amount referred to in paragraph (a) of this subsection; and

(c) If the failure to withhold was willful or the result of gross negligence by the withholder, to have an additional amount imposed as a fine payable to the court not to exceed $250 for each time the withholder failed to withhold or pay or withheld or paid an amount exceeding the amount required and to pay reasonable costs of the action including attorney fees.

(3)(a) An employer commits an unlawful employment practice if the employer discharges an employee, refuses to hire an individual or in any other manner discriminates, retaliates or takes disciplinary action against an obligor because of the entry or service of an order to withhold under ORS 25.378 and 25.402 or because of the obligations or additional obligations that the order imposes upon the employer. An obligor may bring an action [to recover compensatory damages and a civil penalty not to exceed $1,000] under ORS 659A.885 or may file a complaint with the Commissioner of the Bureau of Labor and Industries in the manner provided by ORS 659A.820. [The commissioner may, in addition to the remedies provided for under ORS chapter 659A, impose a civil penalty not to exceed $1,000.] These remedies are in addition to any other remedy available in law or equity.

(b) Paragraph (a) of this subsection does not apply to actions taken by an employer pursuant to any condition of employment required by law.

(4) Nothing in ORS 25.372 to 25.427 precludes an action for contempt for disobedience of a judicial order to withhold.

SECTION 11. ORS 25.610, as amended by section 35, chapter 73, Oregon Laws 2003 (Enrolled House Bill 2340), is amended to read:

25.610. (1) Whenever support enforcement services are being provided and those services are funded in part through Title IV-D of the Social Security Act (42 U.S.C. 651, et seq.), the administrator may request the Department of Revenue, through the Department of Justice or its designee, to collect past due child and spousal support from income tax refunds due to the obligor. The request shall be based upon the payment record maintained under ORS 25.020.

(2) If support payment records have not been maintained as provided in ORS 25.020, then a support payment record may be established under ORS 25.164, 25.167 and 416.429.

(3) The Department of Justice shall adopt rules:

(a) Setting out additional criteria for requests under subsection (1) of this section; and

(b) Directing how any support obligation collected by the Department of Revenue shall be distributed, consistent with federal regulations.

(4) [The obligor and the obligee must be sent a written notice of the intent to apply the refund to the obligor’s support obligation.] Before a request is made to the Department of Revenue under subsection (1) of this section, the Department of Justice shall provide advance written notice to the obligor and the obligee of its intent to refer the case to the Department of Revenue. The notice shall inform the parties:

(a) Of the proposed action;

(b) Of the obligor’s right to request [a hearing to contest] an administrative review of the proposed action; [and]

(c) That [a hearing] an administrative review, if desired, must be requested by the obligor within 30 days of the date of the notice; and

(d) That the only issues that may be considered in the administrative review are:

(A) Whether the obligor is the person who owes the support obligation; and

(B) Whether the amount shown as the past due support is correct.

(5) [Hearings] An administrative review must be requested within 30 days. At the [hearing, no] administrative review, an issue may not be considered if it was previously litigated or if the obligor failed to exercise rights to appear and be heard or to appeal a decision that resulted in the accrual of the arrearage being used as a basis for a request under subsection (1) of this section.

(6) When the Department of Revenue has been requested to collect past due child and spousal support from income tax refunds due to the obligor, the Department of Revenue may not allow the obligor to apply any income tax refund to future taxes of the obligor.

(7) Notwithstanding any other provision of this section, an obligor who is not delinquent in payment of child or spousal support may authorize the Department of Revenue, through the Department of Justice or its designee, to withhold any income tax refund owing to that obligor for the purpose of applying the moneys as a credit to the support account maintained by the Department of Justice.

SECTION 12. ORS 25.710 is amended to read:

25.710. (1) Notwithstanding ORS 25.080, the district attorney, except as provided in subsection (2) of this section, shall continue to enforce support enforcement cases until the Department of Human Services otherwise directs if:

(a) The case was being enforced by the district attorney on October 1, 1985; and

(b) The case involves any arrearages assigned to any government agency.

(2) This section does not apply [where] when the obligor or beneficiary of the support decree or order is receiving any of the following:

(a) [General or] Public assistance [as defined in ORS 411.010]; or

(b) Care, support or services under ORS 418.015.

SECTION 13. ORS 107.135 is amended to read:

107.135. (1) The court may at any time after a decree of annulment or dissolution of marriage or of separation is granted, upon the motion of either party and after service of notice on the other party in the manner provided by ORCP 7, and after notice to the Division of Child Support when required pursuant to subsection (8) of this section:

(a) Set aside, alter or modify [so much] any portion of the decree as may provide for the appointment and duties of trustees, for the custody, parenting time, visitation, support and welfare of the minor children and the children attending school, as defined in ORS 107.108, including any [provisions for] health or life insurance provisions, [or] for the support of a party or for life insurance under ORS 107.820 or 107.830;

(b) Make an order, after service of notice to the other party, providing for the future custody, support and welfare of minor children residing in the state, who, at the time the decree was given, were not residents of the state, or were unknown to the court or were erroneously omitted from the decree;

(d) [Notwithstanding section 84 (2), chapter 827, Oregon Laws 1973, and] After service of notice on the child in the manner provided by law for service of a summons, suspend future support for any child who has ceased to be a child attending school as defined in ORS 107.108; and

(e) Set aside, alter or modify [so much] any portion of the decree as may provide for a property award based on the enhanced earning capacity of a party that was awarded before October 23, 1999. A property award may be set aside, altered or modified under this paragraph:

(A) When the person with the enhanced earning capacity makes a good faith career change that results in less income;

(B) When the income of the person with the enhanced earning capacity decreases due to circumstances beyond the person’s control; or

(2) In a proceeding under this section to reconsider the spousal or child support provisions of the decree, the following provisions apply:

(a) A substantial change in economic circumstances of a party, which may include, but is not limited to, a substantial change in the cost of reasonable and necessary expenses to either party, is sufficient for the court to reconsider its order of support, except that an order of compensatory spousal support may only be modified upon a showing of an involuntary, extraordinary and unanticipated change in circumstances that reduces the earning capacity of the paying spouse.

(b) If the decree provided for a termination or reduction of spousal support at a designated age in anticipation of the commencement of pension, social security or other entitlement payments, and if the obligee is unable to obtain the anticipated entitlement payments, that inability is sufficient change in circumstances for the court to reconsider its order of support.

(c) If social security is considered in lieu of spousal support or partial spousal support, the court shall determine the amount of social security the party is eligible to collect. The court shall take into consideration any pension, retirement or other funds available to either party to effect an equitable distribution between the parties and shall also take into consideration any reduction of entitlement caused by taking early retirement.

(3) In considering under this section whether a change in circumstances exists sufficient for the court to reconsider spousal or child support provisions of a decree, the following provisions apply:

(a) The court or administrator, as defined in ORS 25.010, shall consider income opportunities and benefits of the respective parties from all sources, including but not limited to:

(A) The reasonable opportunity of each party, the obligor and obligee respectively, to acquire future income and assets.

(B) Retirement benefits available to the obligor and to the obligee.

(C) Other benefits to which the obligor is entitled, such as travel benefits, recreational benefits and medical benefits, contrasted with benefits to which the obligee is similarly entitled.

(D) Social Security benefits [received on behalf of a child due to a parent’s] paid to a child, or to a representative payee administering the funds for the child’s use and benefit, as a result of the obligor’s disability or retirement if the benefits:

(i) Were not previously considered in the child support order; or

(ii) Were considered in an action initiated before [March 1, 1999] May 12, 2003.

(E) Apportioned Veterans’ benefits [received on behalf of a child due to a parent’s] or Survivors’ and Dependents’ Educational Assistance under 38 U.S.C. chapter 35 paid to a child, or to a representative payee administering the funds for the child’s use and benefit, as a result of the obligor’s disability or retirement if the benefits:

(i) Were not previously considered in the child support order; or

(ii) Were considered in an action initiated before [October 23, 1999] May 12, 2003.

(b) If the motion for modification is one made by the obligor to reduce or terminate support, and if the obligee opposes the motion, the court shall not find a change in circumstances sufficient for reconsideration of support provisions, if the motion is based upon a reduction of the obligor’s financial status resulting from the obligor’s taking voluntary retirement, partial voluntary retirement or any other voluntary reduction of income or self-imposed curtailment of earning capacity, if it is shown that such action of the obligor was not taken in good faith but was for the primary purpose of avoiding the support obligation. In any subsequent motion for modification, the court shall deny the motion if the sole basis of the motion for modification is the termination of voluntarily taken retirement benefits and the obligor previously has been found not to have acted in good faith.

(c) The court shall consider the following factors in deciding whether the actions of the obligor were not in “good faith”:

(A) Timing of the voluntary retirement or other reduction in financial status to coincide with court action in which the obligee seeks or is granted an increase in spousal support.

(B) Whether all or most of the income producing assets and property were awarded to the obligor, and spousal support in lieu of such property was awarded to the obligee.

(C) Extent of the obligor’s dissipation of funds and assets prior to the voluntary retirement or soon after filing for the change of circumstances based on retirement.

(D) If earned income is reduced and absent dissipation of funds or large gifts, whether the obligor has funds and assets from which the spousal support could have been paid.

(E) Whether the obligor has given gifts of substantial value to others, including a current spouse, to the detriment of the obligor’s ability to meet the preexisting obligation of spousal support.

(4) Upon terminating a duty of spousal support, a court shall make specific findings of the basis for the termination and shall include the findings in the judgment order.

(5) Any modification of child or spousal support granted because of a change of circumstances may be ordered effective retroactive to the date the motion for modification was filed or to any date thereafter.

(6) The decree is a final judgment as to any installment or payment of money that has accrued up to the time either party makes a motion to set aside, alter or modify the decree, and the court does not have the power to set aside, alter or modify such decree, or any portion thereof, that provides for any payment of money, either for minor children or the support of a party, that has accrued prior to the filing of such motion. However:

(a) The court may allow a credit against child support arrearages for periods of time, excluding reasonable parenting time unless otherwise provided by order or decree, during which the obligated parent has physical custody of the child with the knowledge and consent of the custodial parent; and

(b) The court or the administrator, as defined in ORS 25.010, may allow, as provided in the rules of the Child Support Program, a dollar-for-dollar credit against child support arrearages for any lump sum Social Security or Veterans’ benefits paid retroactively to the child, or to a representative payee administering the funds for the child’s use and benefit, as a result of [a parent’s] an obligor’s disability or retirement.

(7) In a proceeding under subsection (1) of this section, the court may assess against either party a reasonable attorney fee and costs for the benefit of the other party. If a party is found to have acted in bad faith, the court shall order that party to pay a reasonable attorney fee and costs of the defending party.

(8) Whenever a motion to establish, modify or terminate child support or satisfy or alter support arrearages is filed and the child support rights of one of the parties or of a child of both of the parties have been assigned to the state, a true copy of the motion shall be served by mail or personal delivery on the Administrator of the Division of Child Support of the Department of Justice or on the branch office providing support services to the county in which the motion is filed.

(9)(a) Except as provided in ORS 109.701 to 109.834, the courts of Oregon, having once acquired personal and subject matter jurisdiction in a domestic relations action, retain such jurisdiction regardless of any change of domicile.

(b) The courts of Oregon, in a proceeding to establish, enforce or modify a child support order, shall recognize the provisions of the federal Full Faith and Credit for Child Support Orders Act (28 U.S.C. 1738B).

(10) In a proceeding under this section to reconsider provisions in a decree relating to custody or parenting time, the court may consider repeated and unreasonable denial of, or interference with, parenting time to be a substantial change of circumstances.

(11) Within 30 days after service of notice under subsection (1) of this section, the party served shall file a written response with the court.

(12)(a) It is the policy of this state:

(A) To encourage the settlement of cases brought under this section; and

(B) For courts to enforce the terms of settlements described in paragraph (b) of this subsection to the fullest extent possible, except when to do so would violate the law or would clearly contravene public policy.

(b) In a proceeding under subsection (1) of this section, the court may enforce the terms set forth in a stipulated order or judgment signed by the parties, an order or judgment resulting from a settlement on the record or an order or judgment incorporating a settlement agreement:

(A) As contract terms using contract remedies;

(B) By imposing any remedy available to enforce an order or judgment, including but not limited to contempt; or

(c) A party may seek to enforce an agreement and obtain remedies described in paragraph (b) of this subsection by filing a motion, serving notice on the other party in the manner provided by ORCP 7 and, if a remedy under paragraph (b)(B) of this subsection is sought, complying with the statutory requirements for that remedy. All claims for relief arising out of the same acts or omissions must be joined in the same proceeding.

(d) Nothing in paragraph (b) or (c) of this subsection limits a party’s ability, in a separate proceeding, to file a motion to modify an order or judgment under subsection (1) of this section or to seek enforcement of an ancillary agreement to the order or judgment.

SECTION 13a. If House Bill 2111 becomes law, section 13 of this 2003 Act (amending ORS 107.135) is repealed and ORS 107.135, as amended by section 4, chapter 116, Oregon Laws 2003 (Enrolled House Bill 2277), and sections 112 and 112a, chapter 576, Oregon Laws 2003 (Enrolled House Bill 2646), is amended to read:

107.135. (1) The court may at any time after a judgment of annulment or dissolution of marriage or of separation is granted, upon the motion of either party and after service of notice on the other party in the manner provided by ORCP 7, and after notice to the Division of Child Support when required under subsection (9) of this section:

(a) Set aside, alter or modify any portion of the judgment that provides for the appointment and duties of trustees, for the custody, parenting time, visitation, support and welfare of the minor children and the children attending school, as defined in ORS 107.108, including any health or life insurance provisions, for the support of a party or for life insurance under ORS 107.820 or 107.830;

(b) Make an order, after service of notice to the other party, providing for the future custody, support and welfare of minor children residing in the state, who, at the time the judgment was given, were not residents of the state, or were unknown to the court or were erroneously omitted from the judgment;

(e) Set aside, alter or modify any portion of the judgment that provides for a property award based on the enhanced earning capacity of a party that was awarded before October 23, 1999. A property award may be set aside, altered or modified under this paragraph:

(A) When the person with the enhanced earning capacity makes a good faith career change that results in less income;

(B) When the income of the person with the enhanced earning capacity decreases due to circumstances beyond the person’s control; or

(2) When a party moves to set aside, alter or modify the child support provisions of the judgment:

(a) The party shall state in the motion, to the extent known:

(A) Whether there is pending in this state or any other jurisdiction any type of support proceeding involving children of the marriage, including one brought under ORS 25.287, 107.431, 109.100, 125.025, 416.400 to 416.470, 419B.400 or 419C.590 or ORS chapter 110; and

(B) Whether there exists in this state or any other jurisdiction a support order, as defined in ORS 110.303, involving children of the marriage, other than the judgment the party is moving to set aside, alter or modify.

(b) The party shall include with the motion a certificate regarding any pending support proceeding and any existing support order other than the judgment the party is moving to set aside, alter or modify. The party shall use a certificate that is in a form established by court rule and include information required by court rule and paragraph (a) of this subsection.

(3) In a proceeding under this section to reconsider the spousal or child support provisions of the judgment, the following provisions apply:

(b) If the judgment provided for a termination or reduction of spousal support at a designated age in anticipation of the commencement of pension, social security or other entitlement payments, and if the obligee is unable to obtain the anticipated entitlement payments, that inability is sufficient change in circumstances for the court to reconsider its order of support.

(4) In considering under this section whether a change in circumstances exists sufficient for the court to reconsider spousal or child support provisions of a judgment, the following provisions apply: