Pennsylvania Act 2006-109 — DOMESTIC RELATIONS CODE (23 PA.C.S.) - INSURANCE PROCEEDS INTERCEPT AND STATE DISBURSEMENT UNIT

Act text

DOMESTIC RELATIONS CODE (23 PA.C.S.) - INSURANCE PROCEEDS INTERCEPT AND
                         STATE DISBURSEMENT UNIT
                 Act of Jul. 7, 2006, P.L. 1055, No. 109              Cl. 23
                             Session of 2006
                               No. 2006-109

     SB 1205

                                  AN ACT

     Amending Title 23 (Domestic Relations) of the Pennsylvania
        Consolidated Statutes, providing for insurance proceeds
        intercept; and further providing for State disbursement unit.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Title 23 of the Pennsylvania Consolidated
     Statutes is amended by adding a section to read:
      § 4308.1.  Collection of overdue support from monetary awards.
        (a)  General rule.--Overdue support shall be a lien by
     operation of law against the net proceeds of any monetary award,
     as defined in subsection (i), owed to an obligor, and
     distribution of any such award shall be stayed in an amount
     equal to the child support lien provided for under this section
     pending payment of the lien. Except as provided in subsection
     (c) or (f), nothing in this section shall provide a basis for a
     paying agent or an insurer to delay payment of a settlement,
     verdict or judgment.
        (b)  General procedure.--Except as provided in subsection
     (f), before the prevailing party or beneficiary can receive the
     proceeds of a monetary award, the prevailing party or
     beneficiary shall provide his attorney with a statement made
     subject to 18 Pa.C.S. § 4904 (relating to unsworn falsification
     to authorities) that includes the prevailing party's or
     beneficiary's full name, mailing address, date of birth and
     Social Security number. The prevailing party or beneficiary
     shall also provide his attorney with written documentation of
     arrears from the Pennsylvania child support enforcement system
     website or, if no arrears exist, written documentation from the
     website indicating no arrears. The attorney shall obtain a copy
     of the prevailing party or beneficiary's statement and a lien
     report from the website at the time of the delivery of the
     release; the lien report shall be dated within 20 days of the
     date of the delivery of the release. In the event that there are
     arrears, the attorney shall make payment of any lien to the
     department's State disbursement unit from the net proceeds of
     any monetary award.
        (c)  Pro se actions.--If the prevailing party or beneficiary
     is not represented by an attorney, he shall provide the
     statement and written documentation of arrears or no arrears
     provided by subsection (b) or (d) to the insurer or other paying
     agent responsible for distribution of the monetary award who
     shall make payment of any lien or disputed lien amount, as
     described in subsection (h), to the department's State
     disbursement unit from the net proceeds of any monetary award.
        (d)  Use of private judgment search companies.--In lieu of
     receiving the statement and written documentation of arrears or
     no arrears provided in subsections (b), (c) and (f), an attorney
     or insurer may use the services of a private judgment search
     company approved by the department, or an insurer may use the
     services of the child support enforcement lien program operated
     through a central reporting agency approved by the department.
     An attorney or insurer may deduct the fee for such a judgment
     search from any payment to the prevailing party or beneficiary.
        (e)  Immunity.--An attorney, insurer or other paying agent
     that makes distribution in accordance with a statement and the
     written documentation required under subsection (b) or the
     report of an approved private judgment search company under
     subsection (d), or an insurer which furnishes information and
     transmits funds under the child support enforcement lien program
     operated through a central reporting agency approved by the
     department, shall be immune from any civil, criminal or
     administrative penalties for making an erroneous distribution.
     Nothing in this section shall give rise to a claim or cause of
     action against an attorney or an insurer by any person who
     asserts he is the intended obligee of the outstanding lien for
     child support.
        (f)  Workers' compensation awards.--With respect to any
     monetary award arising under the act of June 2, 1915 (P.L.736,
     No.338), known as the Workers' Compensation Act, or the act of
     June 21, 1939 (P.L.566, No.284), known as The Pennsylvania
     Occupational Disease Act, no order providing for a payment shall
     be entered by the workers' compensation judge unless the
     prevailing party or beneficiary, who is a claimant under either
     or both of the acts, shall provide the judge with a statement
     made subject to 18 Pa.C.S. § 4904 that includes the full name,
     mailing address, date of birth and Social Security number for
     the prevailing party or beneficiary who is a claimant under
     either or both acts. The prevailing party or beneficiary, who is
     a claimant under either or both of the acts shall also provide
     the judge with either written documentation of arrears from the
     Pennsylvania child support enforcement system website or, if no
     arrears exist, written documentation from the website indicating
     no arrears. The judge shall order payment of the lien for
     overdue support to the department's State disbursement unit from
     the net proceeds due the prevailing party or beneficiary who is
     a claimant under either or both acts.
        (g)  Exception.--This section shall not apply to any monetary
     award due to a prevailing party or beneficiary under 12 years of
     age or, in the case of an award under the Workers' Compensation
     Act or The Pennsylvania Occupational Disease Act, a claimant
     under 12 years of age.
        (h)  Escrow.--In the event that there is a dispute as to the
     amount of arrears owed by the prevailing party, beneficiary or
     claimant based on a mistake of fact, the amount in dispute shall
     be placed in escrow in the department's State disbursement unit
     by the prevailing party's or beneficiary's attorney, and the
     escrowed funds shall not be distributed until the dispute is
     resolved. In such event, the distribution of the remaining net
     proceeds of the monetary award shall not be stayed. A mistake of
     fact, as used in this subsection, shall be limited to errors in
     the amount of arrearage or mistaken identity. Upon resolution of
     the dispute, the amount of arrears shall be paid to the
     department's State disbursement unit.
        (i)  Definitions.--As used in this section, the following
     words and phrases shall have the meanings given to them in this
     subsection:
        "Monetary award."  Any portion of a settlement paid as a lump
     sum negotiated in lieu of, or subsequent to the filing of a
     lawsuit for, or any civil judgment or civil arbitration award
     that is paid as a third party claim for bodily injury or death
     under a property and casualty insurance policy, or paid as a
     workers' compensation or occupational disease act award under a
     workers' compensation policy. The term includes self-insurers
     and also applies to property and casualty and workers'
     compensation or occupational disease act policies which are
     issued by an insurer licensed or authorized to do business in
     this Commonwealth. The term does not include a lump sum payable
     through a structured settlement annuity. The term shall apply
     only to those settlements, judgments, civil arbitrations,
     Workers' Compensation Act or The Pennsylvania Occupational
     Disease Act awards which are asserted and resolved in this
     Commonwealth.
        "Net proceeds."  Moneys in excess of $5,000 payable to a
     prevailing party or beneficiary, or in the case of an award
     under the act of June 2, 1915 (P.L.736, No.338), known as the
     Workers' Compensation Act, or the act of June 21, 1939 (P.L.566,
     No.284), known as The Pennsylvania Occupational Disease Act, the
     claimant after payment of attorney fees, witness fees, court
     costs, reasonable litigation expenses, documented unpaid
     expenses incurred for medical treatment causally related to the
     claim, any workers' compensation or occupational disease
     indemnity or medical payment and payments to the medical
     assistance program under sections 1409 and 1412 of the act of
     June 13, 1967 (P.L.31, No.21), known as the Public Welfare Code.
        "Obligee."  The term shall have the meaning provided under
     section 7101(b) (relating to short title of part and
     definitions).
        "Obligor."  The term shall have the meaning provided under
     section 7101(b) (relating to short title of part and
     definitions).
        "Overdue support."  The term shall have the meaning provided
     under section 4302 (relating to definitions).
        Section 2.  Section 4374(b) of Title 23 is amended and the
     section is amended by adding a subsection to read:
      § 4374.  State disbursement unit.
        * * *
        (b)  [Disbursements] Collections and disbursements.--The
     department may require that such collections and disbursements
     of support as the department may specify, including those
     related to persons not receiving public assistance, be processed
     through the State disbursement unit.
            (1)  The State disbursement unit shall use automated
        procedures, electronic processes and computer technology to
        the maximum extent feasible, efficient and economical for the
        collection and disbursement of support payments.
            (2)  If an employer is ordered to withhold income from
        more than one obligor to pay child support and employs 15 or
        more persons, the employer shall make payments to the State
        disbursement unit through electronic payment methods.
            (3)  If an employer has a history of two or more checks
        returned for nonsufficient funds, the employer shall make
        payments to the State disbursement unit through electronic
        funds transfer.
            (4)  An employer that is not required to make payments to
        the State disbursement unit in accordance with this
        subsection may voluntarily remit support payments through
        electronic funds transfer to the State disbursement unit.
        (b.1)  Penalty.--The department may impose a civil penalty of
     up to $1,000 per violation, following notice and hearing, upon
     an employer who willfully fails to comply with the electronic
     funds transfer payment provisions of this section.
        * * *
        Section 3.  This act shall take effect in 60 days.

     APPROVED--The 7th day of July, A. D. 2006.

     EDWARD G. RENDELL