President Deborah L. McNabb Kent County Courthouse 180 Ottawa, NW, Ste. 4400 Grand Rapids, 49503 (616) 632-5144 Vice President Jon T. Ferrier Kent County Courthouse 180 Ottawa, NW, Ste. 4400 Grand Rapids, 49503 (616) 632-5142 Executive Secretary Kenneth D. Randall 42nd Judicial Circuit Midland County 301 W. Main St. Midland, 48640-5183 (989) 832-6803 Recording Secretary Jean L. Dohanyos Oakland County Circuit Court 1200 N. Telegraph Rd., Dept. 452 Pontiac, 48341-0452 (248) 858-0033 Treasurer David T. Elias Macomb County Friend of the Court 40 N. Main, 5th Floor Mt. Clemens, 48043 (810) 469-5754 Immediate Past President Mark D. Sherbow Oakland County Friend of the Court P.O. Box 436012 1200 N. Telegraph Rd., Annex 11 Pontiac, 48341 (248) 975-4448 Board Members Kathleen Oemke Thomas G. Doetsch, Sr. Kathryne A. O'Grady Arthur R. Spears, Jr. Dennis M. Swain Past Presidents Wayne Kristal Jon T. Ferrier Ronald Foon Marie Johnson Hon. Linda Hallmark Wendelyn Machnik Karen Liwienski Vincent Welicka Philip Ingraham Zaira Maio Mark D. Sherbow

December 5, 2003 The Honorable Lauren Hager State Representative S1185 Office Building 124 N. Capitol Lansing, MI 48909 Re: SB 485 Dear Representative Hager:          At our Board of Directors meeting last month, the Referees Association of Michigan (RAM) voted to support the principle of SB 485, presently pending in your Family and Children Services Committee following passage by the House in September.                    SB 485 would amend section 3a of the Support and Parenting Time Enforcement Act (MCL 552.603A) to change the rate of surcharge on support (child and spousal) payments that are past due trom the current 8% annual rate to a rate equal to the adjusted prime rate determined by the department of treasury. While the Referees Association supports a reduction in the rate of the surcharge, we have the following concerns:                    Keeping the surcharge at 8% means that many lower-income payers will find it difficult or impossible to ever pay off an arrearage which doubles every nine years, when only current support payments are made. This results in confiscatory judgments against delinquent payers of support, and insofar as the judgments are uncollectible, they have the impact of portraying the Friend of the Court's (FOC) collection efforts as distortedly futile. Since incentives on which the FOC is partly funded are based on its "efficiency" in collecting ordered support, the burden of being responsible for trying to collect bad debts negatively impacts the FOC's ability to do its job, creating a vicious cycle.                    However, tying the rate of surcharge to prime has the negative consequence of appearing to offer a preferential rate to delinquent payers who are merely avoiding, as opposed to unable to pay, their support debt. Further, it is doubtful that the FOC's computer equipment would be able to handle a changing rate, as opposed to the current, fixed rate of 8%.                    The solution would appear to be to drop the current 8% to something lower, perhaps 3 or 4% per year, to provide a continuing incentive to delinquent payers who are able to retire their debt to retire it promptly, and to allow relief to those delinquent payers who have less or no ability to pay their arrearages at the current 8% surcharge.                    RAM is a Special Purpose Organization recognized by the State Bar of Michigan, founded in 1984. RAM represents over one hundred Circuit Court Referees who serve as judicial officers in the Family Division of the Circuit Court. Our members conduct hearings in domestic relations cases, juvenile/children's cases and personal protection order cases, and make recommended dispositions to the Circuit Court which become court orders unless objections are filed and the Court rejects the recommended dispositions after a hearing is held.                    We would be happy to provide further information or assistance on this and other proposed legislation that affects the area of Family Law, and we thank you for your attention and consideration of our position on SB 485.                                                       Sincerely,                                                       Kenneth D. Randall                                                       Executive Secretary                                                       Referees Association of Michigan