AB449: Bill Text

2001 - 2002 LEGISLATURE

2001 Assembly BILL 449

June 21, 2001 - Introduced by Representatives Musser, Ainsworth, Pettis, F. Lasee, Nass, Gunderson, Stone and Gundrum, cosponsored by Senator George. Referred to Committee on Judiciary.

AB449,1,11 An Act to renumber and amend 767.32 (2); to amend 46.10 (14) (b), 46.10 (14) (c) (intro.), 46.10 (14) (d), 46.247, 48.30 (6) (b), 48.31 (7) (b), 48.33 (4m) (intro.), 48.357 (5m) (a), 48.363 (1) (c), 301.12 (14) (b), 301.12 (14) (c) (intro.), 301.12 (14) (d), 301.12 (14) (g), 767.085 (2) (b), 767.085 (2m) (a) 2., 767.085 (2m) (b), 767.23 (1n), 767.25 (1j), 767.25 (1m) (intro.), 767.25 (1n), 767.295 (2) (c), 767.32 (1) (b) 2., 767.32 (1) (b) 4., 767.32 (2m), 767.45 (7), 767.455 (6), 767.477 (2), 938.30 (6) (b), 938.31 (7) (b), 938.33 (4m) (intro.), 938.357 (5m) (a), 938.363 (1) (c), 948.22 (4) (b) and 948.22 (7) (bm); to repeal and recreate 49.22 (9); and to create 49.22 (10), 767.251, 767.32 (1) (b) 5., 767.32 (1) (b) 6., 767.32 (2) (b) and 767.325 (5r) of the statutes; relating to: calculating child support and creating committees to review the method of calculating child support.

Analysis by the Legislative Reference Bureau

Under current law, in divorces, paternity actions, and other actions affecting the family in which child support is ordered, including actions to revise child support, the court must determine child support payments by using the percentage standard established by administrative rule by the department of workforce development (DWD). The percentage standard is a percentage of the payer's gross monthly income. The percentage of income that the child support payer must pay varies with the number of children to be supported. A payer must pay 17% of his or her gross income for one child, 25% for two children, 29% for three children, 31% for four children, and 34% for five or more children. Except in certain situations, the calculation of child support does not take into account the income of the payee or the amount of time that the payer cares for the child during periods of physical placement ordered by the court.

The rules provide for a special way of calculating child support for a shared-time payer. If the payer has physical placement of a child between 31% and 40% of the time, based on the number of times per year that the parent provides overnight care for the child, the rules provide for a specified reduction in the amount of child support that the payer would be required to pay by calculating support by using the percentage standard alone. (For example, a payer with physical placement of a child for 37% of the time pays 76.69% of the amount that he or she would pay by calculating support by using the percentage standard alone.) Also under the rules, if one parent has physical placement of a child between 41% and 59% of the time and the other parent has physical placement of the child for the remainder of the time, based on the number of times that each provides overnight care, the amount of child support that each parent would pay by using the percentage standard alone is calculated, reduced by a specified percentage depending on the amount of time each parent has physical placement of the child calculating support by and compared with the other parent's similarly calculated and reduced amount of child support. (For example, a parent with physical placement of a child for 46% of the time would be obligated to pay 46.72% of the amount of child support that he or she would be obligated to pay by using the percentage standard alone while the other parent with physical placement for 54% of the time would be obligated to pay 20.08% of the amount calculated by using the percentage standard alone.) The parent with the larger calculated and reduced amount must pay the difference as child support to the other parent.

The rules also provide for a special way of calculating child support for a serial-family payer and for the imputation of income to a payer if the court determines that the payer has unproductive assets or has diverted income into assets to avoid paying child support. If a person who is already obligated to pay child support is later ordered to pay support for another child, from a later marriage or a paternity adjudication for example, the amount of support that the person must pay under the later order is calculated by first reducing the payer's gross income by the amount under the first child support order and then applying the percentage standard to that reduced income amount. Income imputation involves multiplying the net value of the assets by the current six-month treasury bill rate or any other reasonable rate.

Under current law, a court is authorized, upon the request of a party, to modify the amount of child support that would be ordered by using the percentage standard. The court must find that use of the percentage standard is unfair to the child or either of the parties after considering a number of factors, such as the earning capacity of each parent, the desirability that the custodian remain in the home as a full-time parent, and extraordinary travel expenses incurred in exercising physical placement rights.

This bill changes the method of determining the amount of child support to be paid in actions affecting the family, including actions to revise child support. Under the bill, the court must determine each parent's gross income and percentage of physical placement with the child. The bill specifies what the court must include in income, what the court must exclude from income, and what the court must subtract from income in determining each parent's gross income. The bill requires the court to include in a parent's gross income wages that the court determines were paid to other family members for the purpose of diverting income. The court may impute income to a parent if the court determines that the parent has concealed or transferred assets for the purpose of avoiding child support or that the gross incomes of the parents will not adequately provide for the child and there are unproductive assets. The court must impute income based on a 40-hour work week to a parent who is not working at least 40 hours per week if the court determines that the parent is able to work and that work is available in the parent's community. The court determines the percentage of physical placement that a parent has on the basis of the number of days, rather than overnights, that a parent cares for the child in a year. If both parents care for the child on the same day, the court determines the amount of time that each parent cares for the child on that day on a basis that reflects each parent's proportionate share of the total expenses incurred for the child by both parents on that day.

After the court determines each parent's gross income and percentage of physical placement, the court determines each parent's gross monthly child support obligation. How that obligation is determined depends on the combined gross monthly income of the two parents. If the combined gross monthly income of the two parents is equal to or less than $4,000, each parent's gross monthly child support obligation is equal to the percentage standard under current law. That is, if there is one child, each parent's gross monthly child support obligation is 17% of his or her gross monthly income. If the combined gross monthly income of the two parents is greater than $4,000, determining a parent's gross monthly child support obligation is a multi-step process. The court must first determine the combined gross monthly child support obligation of the two parents. For combined gross monthly incomes that do not exceed $20,000, the combined gross monthly child support obligation of the two parents equals a specified amount, depending on the number of children, plus a specified percentage of the combined gross monthly income of the two parents above $4,000. For combined gross monthly incomes that exceed $20,000, the combined gross monthly child support obligation of the two parents equals a specified amount, depending on the number of children, plus a specified percentage of the combined gross monthly income of the two parents above $20,000. Each parent's gross monthly child support obligation is the same percentage of the parents' combined gross monthly child support obligation as that parent's gross income is of the parents' combined gross income. Just as under current law, a parent's gross monthly child support obligation is reduced if the parent is subject to another child support order or is otherwise legally obligated to support one or more other children. Under the bill, however, a parent's gross monthly child support obligation is reduced to a specified percentage of his or her gross monthly child support obligation, depending on the number of other children being supported, rather than reduced by the amount of support being paid for the other children.

After determining each parent's gross monthly child support obligation, the court determines which parent pays support to the other parent and the amount of support to be paid. If the court grants a parent fewer than 55 days of physical placement in a year, that parent pays the amount of his or her gross monthly child support obligation to the other parent. If the court grants at least 55 days of physical placement to each parent, the court multiplies each parent's gross monthly child support obligation by 1.4 and by the other parent's percentage of physical placement. The resulting amount is each parent's net monthly child support obligation. The parent with the larger net monthly child support obligation pays to the other parent the difference between the two net monthly child support obligations. As under current law, the court may upon request modify the amount of support that would be determined by using the method of calculating child support that is provided for in the bill, after considering the same factors as under current law and upon finding that use of the new method is unfair to the child or either of the parties.

The bill also makes a couple of changes related to revisions of child support orders. Under current law, the court may revise the amount of child support under an order only if the court finds that there has been a substantial change in circumstances. The court must use the percentage standard in revising the amount. The bill requires the new method of calculating child support to be used in a revision. Current law specifies a number of situations that constitute rebuttable presumptions of a substantial change in circumstances sufficient to justify a revision. Among those situations is the expiration of 33 months since the date of entry of the last support order, including a revision, unless the order is expressed as a percentage of income rather than as a specific amount. The bill changes this provision so that the expiration of 33 months since the date of entry of the last support order, including a revision, constitutes a rebuttable presumption of a substantial change in circumstances, regardless of how the order is expressed, if the amount of child support calculated by using the new method exceeds the amount under the last order by at least 10% of the amount under the last order or by at least $40 per month. The bill also adds a new situation that constitutes a rebuttable presumption of a substantial change in circumstances: if the amount of child support last ordered was based on the amount of physical placement awarded to the parties, the payer has consistently failed to exercise his or her physical placement rights, and the amount of child support under a revised order, using the new method and based on the actual amount of physical placement that the payer has in the past exercised, exceeds the amount under the last order by at least 15% of the amount under the last order or by at least $60 per month. Additionally, the bill requires a court to delay, until at least 30 days after an order modifying child support is signed, a decision on a parent's motion to modify physical placement if the court determines that the parent is seeking the physical placement modification in response to a motion to modify child support. The delay does not apply, however, if the parent seeking the physical placement modification presents any credible evidence that the current allocation of physical placement will cause irreparable harm to the child.

The bill requires DWD to prepare and make available to judges and other court personnel computer software, as well as tables and instruction manuals, to help with the calculation of child support by the new method provided in the bill.

Finally, federal law requires each state to review, and revise if appropriate, its child support guidelines at least once every four years to ensure that they result in the determination of appropriate child support amounts. The bill requires the secretary of workforce development to create a child support review committee by January 1, 2002, and by January 1 every four years after that, to review the adequacy for supporting children of the new method of calculating child support provided in the bill. The committee must be composed of representatives of the judicial, executive, and legislative branches of state government; of the state bar; and of advocates for children, child support payers, and child support payees. Each committee created must report its findings and legislative recommendations to the joint legislative council and to the federal department of health and human services.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB449, s. 1 Section 1. 46.10 (14) (b) of the statutes is amended to read:

AB449,5,10 46.10 (14) (b) Except as provided in par. (c) and subject to par. (cm), liability of a parent specified in sub. (2) or s. 46.03 (18) for the care and maintenance of the parent's minor child who has been placed by a court order under s. 48.355 or 48.357 in a residential, nonmedical facility such as a group home, foster home, treatment foster home, or child caring institution shall be determined by the court by using the percentage standard established by the department of workforce development under s. 49.22 (9) method of calculating child support under s. 767.251 and by applying the percentage standard method in the manner established by the department under s. 46.247.

AB449, s. 2 Section 2. 46.10 (14) (c) (intro.) of the statutes is amended to read:

AB449,6,5 46.10 (14) (c) (intro.) Upon request by a parent, the court may modify the amount of child support payments determined under par. (b), subject to par. (cm), if, after considering the following factors, the court finds by the greater weight of the credible evidence that the use of the percentage standard method of calculating child support under s. 767.251 is unfair to the child or to either of the parents:

AB449, s. 3 Section 3. 46.10 (14) (d) of the statutes is amended to read:

AB449,6,14 46.10 (14) (d) If the court finds under par. (c) that use of the percentage standard method of calculating child support under s. 767.251 is unfair to the minor child or either of the parents, the court shall state in writing or on the record the amount of support that would be required by using the percentage standard method under s. 767.251, the amount by which the court's order deviates from that amount, its reasons for finding that use of the percentage standard method under s. 767.251 is unfair to the child or the parent, its reasons for the amount of the modification, and the basis for the modification.

AB449, s. 4 Section 4. 46.247 of the statutes is amended to read:

AB449,6,24 46.247 Application of method of calculating child support standard for certain children. For purposes of determining child support under s. 46.10 (14) (b), the department shall promulgate rules related to the application of the standard established by the department of workforce development under s. 49.22 (9) method under s. 767.251 to a child support obligation for the care and maintenance of a child who is placed by a court order under s. 48.355 or 48.357 in a residential, nonmedical facility. The rules shall take into account the needs of any person, including dependent children other than the child, whom either parent is legally obligated to support.

AB449, s. 5 Section 5. 48.30 (6) (b) of the statutes is amended to read:

AB449,7,11 48.30 (6) (b) If it appears to the court that disposition of the case may include placement of the child outside the child's home, the court shall order the child's parent to provide a statement of income, assets, debts, and living expenses to the court or the designated agency under s. 48.33 (1) at least 5 days before the scheduled date of the dispositional hearing or as otherwise ordered by the court. The clerk of court shall provide, without charge, to any parent ordered to provide a statement of income, assets, debts, and living expenses a document setting forth the percentage standard established by the department of workforce development under s. 49.22 (9) method of calculating child support under s. 767.251 and the manner of its application established by the department of health and family services under s. 46.247 and listing the factors that a court may consider under s. 46.10 (14) (c).

AB449, s. 6 Section 6. 48.31 (7) (b) of the statutes is amended to read:

AB449,7,23 48.31 (7) (b) If it appears to the court that disposition of the case may include placement of the child outside the child's home, the court shall order the child's parent to provide a statement of income, assets, debts, and living expenses to the court or the designated agency under s. 48.33 (1) at least 5 days before the scheduled date of the dispositional hearing or as otherwise ordered by the court. The clerk of court shall provide, without charge, to any parent ordered to provide a statement of income, assets, debts, and living expenses a document setting forth the percentage standard established by the department of workforce development under s. 49.22 (9) method of calculating child support under s. 767.251 and the manner of its application established by the department of health and family services under s. 46.247 and listing the factors that a court may consider under s. 46.10 (14) (c).

AB449, s. 7 Section 7. 48.33 (4m) (intro.) of the statutes is amended to read:

AB449,8,6 48.33 (4m) Support recommendations; information to parents. (intro.) In making a recommendation for an amount of child support under sub. (4), the agency shall consider the factors that the court considers under s. 46.10 (14) (c) for deviation from the percentage standard method of calculating child support under s. 767.251. Prior to the dispositional hearing under s. 48.335, the agency shall provide the child's parent with all of the following:

AB449, s. 8 Section 8. 48.357 (5m) (a) of the statutes is amended to read:

AB449,8,20 48.357 (5m) (a) If a proposed change in placement changes a child's placement from a placement in the child's home to a placement outside the child's home, the court shall order the child's parent to provide a statement of income, assets, debts, and living expenses to the court or the person or agency primarily responsible for implementing the dispositional order by a date specified by the court. The clerk of court shall provide, without charge, to any parent ordered to provide a statement of income, assets, debts, and living expenses a document setting forth the percentage standard established by the department of workforce development under s. 49.22 (9) method of calculating child support under s. 767.251 and the manner of its application established by the department of health and family services under s. 46.247 and listing the factors that a court may consider under s. 46.10 (14) (c). If the child is placed outside the child's home, the court shall determine the liability of the parent in the manner provided in s. 46.10 (14).

AB449, s. 9 Section 9. 48.363 (1) (c) of the statutes is amended to read:

AB449,9,7 48.363 (1) (c) If the proposed revision is for a change in the amount of child support to be paid by a parent, the court shall order the child's parent to provide a statement of income, assets, debts, and living expenses to the court and the person or agency primarily responsible for implementing the dispositional order by a date specified by the court. The clerk of court shall provide, without charge, to any parent ordered to provide a statement of income, assets, debts, and living expenses a document setting forth the percentage standard established by the department of workforce development under s. 49.22 (9) method of calculating child support under s. 767.251 and the manner of its application established by the department of health and family services under s. 46.247 and listing the factors that a court may consider under s. 46.10 (14) (c).

AB449, s. 10 Section 10. 49.22 (9) of the statutes is repealed and recreated to read:

AB449,9,12 49.22 (9) The department shall prepare and make available to judges and other court personnel forms, tables, computer software, and instruction manuals or other publications to aid in the calculation of child support by using the method under s. 767.251.

AB449, s. 11 Section 11. 49.22 (10) of the statutes is created to read:

AB449,9,19 49.22 (10) (a) The secretary shall exercise his or her authority under s. 15.04 (1) (c) to create, by January 1, 2002, and by January 1 every 4 years thereafter, a child support committee to review the adequacy to support children of the method of calculating child support under s. 767.251. The committee shall consider current research and economic and case data, as well as any other relevant resources, on the cost of, and expenditures that are necessary for, raising children.

AB449,9,22 (b) The committee shall be composed of representatives of the state's judicial branch, legislative branch, executive branch, and state bar, and of advocates for children, child support payers, and child support payees.

AB449,9,24 (c) No later than January 1, 2003, and no later than January 1 every 4 years thereafter, the committee shall report its findings and legislative and other recommendations to the joint legislative council and to the federal department of health and human services.

AB449, s. 12 Section 12. 301.12 (14) (b) of the statutes is amended to read:

AB449,10,12 301.12 (14) (b) Except as provided in par. (c) and subject to par. (cm), liability of a parent specified in sub. (2) or s. 301.03 (18) for the care and maintenance of the parent's minor child who has been placed by a court order under s. 938.183, 938.355, or 938.357 in a residential, nonmedical facility such as a group home, foster home, treatment foster home, child caring institution, or juvenile correctional institution shall be determined by the court by using the percentage standard established by the department of workforce development under s. 49.22 (9) method of calculating child support under s. 767.251 and by applying the percentage standard method in the manner established by the department under par. (g).

AB449, s. 13 Section 13. 301.12 (14) (c) (intro.) of the statutes is amended to read:

AB449,10,18 301.12 (14) (c) (intro.) Upon request by a parent, the court may modify the amount of child support payments determined under par. (b), subject to par. (cm), if, after considering the following factors, the court finds by the greater weight of the credible evidence that the use of the percentage standard method of calculating child support under s. 767.251 is unfair to the child or to either of the parents:

AB449, s. 14 Section 14. 301.12 (14) (d) of the statutes is amended to read:

AB449,11,2 301.12 (14) (d) If the court finds under par. (c) that use of the percentage standard method of calculating child support under s. 767.251 is unfair to the minor child or either of the parents, the court shall state in writing or on the record the amount of support that would be required by using the percentage standard method under s. 767.251, the amount by which the court's order deviates from that amount, the court's reasons for finding that use of the percentage standard method under s. 767.251 is unfair to the child or the parent, the court's reasons for the amount of the modification, and the basis for the modification.

AB449, s. 15 Section 15. 301.12 (14) (g) of the statutes is amended to read:

AB449,11,11 301.12 (14) (g) For purposes of determining child support under par. (b), the department shall promulgate rules related to the application of the standard established by the department of workforce development under s. 49.22 (9) method under s. 767.251 to a child support obligation for the care and maintenance of a child who is placed by a court order under s. 938.183, 938.355, or 938.357 in a residential, nonmedical facility. The rules shall take into account the needs of any person, including dependent children other than the child, whom either parent is legally obligated to support.

AB449, s. 16 Section 16. 767.085 (2) (b) of the statutes is amended to read:

AB449,11,17 767.085 (2) (b) The clerk of court shall provide without charge, to each person filing a petition requesting child support, a document setting forth the percentage standard established by the department under s. 49.22 (9) method of calculating child support under s. 767.251 and listing the factors which that a court may consider under s. 767.25 (1m).

AB449, s. 17 Section 17. 767.085 (2m) (a) 2. of the statutes is amended to read:

AB449,11,22 767.085 (2m) (a) 2. Shall be accompanied by a document, provided without charge by the clerk of court, setting forth the percentage standard established by the department under s. 49.22 (9) method of calculating child support under s. 767.251 and listing the factors which that a court may consider under s. 767.25 (1m).

AB449, s. 18 Section 18. 767.085 (2m) (b) of the statutes is amended to read:

AB449,12,2 767.085 (2m) (b) If service is by publication, notification regarding s. 948.31 may consist of references to the statute numbers and titles, and information relating to the percentage standard method of calculating child support and the factors need not be provided.

AB449, s. 19 Section 19 . 767.23 (1n) of the statutes is amended to read:

AB449,12,16 767.23 (1n) Before making any temporary order under sub. (1), the court or family court commissioner shall consider those factors that the court is required by this chapter to consider before entering a final judgment on the same subject matter. In making a determination under sub. (1) (a) or (am), the court or family court commissioner shall consider the factors under s. 767.24 (5). If the court or family court commissioner makes a temporary child support order that deviates from the amount of support that would be required by using the percentage standard established by the department under s. 49.22 (9) method of calculating child support under s. 767.251, the court or family court commissioner shall comply with the requirements of s. 767.25 (1n). A temporary order under sub. (1) may be based upon the written stipulation of the parties, subject to the approval of the court or the family court commissioner. Temporary orders made by the family court commissioner may be reviewed by the court as provided in s. 767.13 (6).

AB449, s. 20 Section 20. 767.25 (1j) of the statutes is amended to read:

AB449,12,20 767.25 (1j) Except as provided in sub. (1m), the court shall determine child support payments by using the percentage standard established by the department under s. 49.22 (9) method under s. 767.251.

AB449, s. 21 Section 21. 767.25 (1m) (intro.) of the statutes is amended to read:

AB449,13,2 767.25 (1m) (intro.) Upon request by a party, the court may modify the amount of child support payments determined under sub. (1j) s. 767.251 if, after considering the following factors, the court finds by the greater weight of the credible evidence that use of the percentage standard method under s. 767.251 is unfair to the child or to any of the parties:

AB449, s. 22 Section 22. 767.25 (1n) of the statutes is amended to read:

AB449,13,11 767.25 (1n) If the court finds under sub. (1m) that use of the percentage standard method of calculating child support under s. 767.251 is unfair to the child or the requesting party, the court shall state in writing or on the record the amount of support that would be required by using the percentage standard method under s. 767.251, the amount by which the court's order deviates from that amount, its reasons for finding that use of the percentage standard method under s. 767.251 is unfair to the child or the party, its reasons for the amount of the modification, and the basis for the modification.

AB449, s. 23 Section 23. 767.251 of the statutes is created to read:

AB449,13,15 767.251 Calculation of child support payments. (1) Gross income. For purposes of determining a parent's gross income under this section, all of the following apply:

AB449,13,16 (a) The court shall include as income all of the following:

AB449,13,18 1. Subject to par. (b), all personal income considered gross income for federal income tax purposes.

AB449,13,20 2. Net proceeds from worker's compensation or other personal injury awards intended to replace income.

AB449,13,21 3. Income continuation benefits.

AB449,13,23 4. Voluntary deferred compensation or employee contributions to a profit-sharing or pension account.

AB449,13,24 5. Military allowances and veterans benefits.

AB449,14,2 6. Undistributed income from a closely held corporation if all of the following apply:

AB449,14,3 a. The parent has a majority interest in the corporation.

AB449,14,5 b. The parent may exercise control over, or access the earnings of, the corporation.

AB449,14,6 7. Tax-exempt interest.

AB449,14,7 (b) The court shall exclude from income all of the following:

AB449,14,9 1. Onetime long-term capital gain income from the sale of individual passive investments.

AB449,14,10 2. Onetime capital gain income from the sale of the family home.

AB449,14,11 (c) The court shall subtract from income all of the following:

AB449,14,12 1. Any maintenance paid to the other parent or to a former spouse.

AB449,14,14 2. If the parent is self-employed, one-half of the unemployment tax that the parent pays.

AB449,14,16 3. Business expenses that are allowed as deductions for expenses for tax purposes.

AB449,14,18 4. Business expenses that are not allowed as deductions for expenses for tax purposes but that the court considers necessary for the production of income.