SB 137
Department of Legislative Services
Maryland General Assembly
2020 Session
FISCAL AND POLICY NOTE
Enrolled - Revised
Senate Bill 137 (Senator Cassilly, et al.)
Finance Appropriations
Harford County - State's Attorney's Office and Child Support Administration -
Transfer of Personnel
This bill transfers all the functions, powers, and duties of the child support unit of the
Harford County State’s Attorney’s Office to the Child Support Administration (CSA) of
the Department of Human Services (DHS). The transfer includes all employees of the unit
on June 30, 2020, other than the assistant State’s Attorneys. These employees must remain
members of the Employees’ Pension System (EPS). If appointed by the Office of the
Attorney General (OAG) to continue providing child support enforcement services, the
assistant State’s Attorney positions also transfer. The bill takes effect July 1, 2020.
Fiscal Summary
State Effect: General fund revenues for DHS decrease by $47,300 annually beginning in
FY 2021 from no longer receiving an administrative fee from Harford County. General
fund expenditures for DHS increase by $355,500 in FY 2021, reflecting the State’s share
of child support enforcement costs. The Governor’s proposed FY 2021 budget includes
sufficient funds for the transfer in FY 2021. Future year expenditures reflect elimination of
one-time start-up costs. Federal fund expenditures are not affected, as discussed below.
Pension fund transfers are not reflected, as discussed below.
(in dollars) FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
GF Revenue ($47,300) ($47,300) ($47,300) ($47,300) ($47,300)
GF Expenditure $355,500 $323,800 $331,200 $342,300 $353,800
Net Effect ($402,800) ($371,100) ($378,500) ($389,600) ($401,100)
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: Harford County expenditures decrease by at least $516,200 annually
beginning in FY 2021. Any expenditure decrease is partially offset by payments (1) to any
employees due to the termination of county employment and (2) for the transfer of local
pension liabilities to the State.
Small Business Effect: None.
Analysis
Bill Summary: Each Harford County employee transferred to CSA on July 1, 2020, must
be given a position commensurate with the employee’s salary grade at the time of the
transfer. Each transferred employee must also be given State service credit for years of
county employment for the purposes of seniority, including the determination of leave
accumulation as well as layoff rights. Harford County must pay each employee any
compensation due upon termination of county employment as of June 30, 2020.
All employer contributions and interest made by Harford County on behalf of employees
transferred under the bill must be transferred within the accumulation fund for EPS from
the municipal pool to the State pool. An actuarial valuation must be performed by the
actuary designated by the Board of Trustees for the State Retirement and Pension System
(SRPS).
Current Law/Background: CSA may enter into cooperative reimbursement agreements
with local governments that wish to carry out child support enforcement within their
jurisdiction. Under cooperative agreements, the local agency undertaking the child support
function receives the 66% federal match for expenses it incurs for completing this function.
The federal funds are budgeted within CSA as the State child support agency.
A county or circuit court under a cooperative agreement may request that the responsibility
for support enforcement be transferred to CSA. Such a request must be made by
September 1 of the year preceding the fiscal year for which responsibility will be
transferred. Harford County has requested that its enforcement function be transferred to
CSA. DHS advises that the child support function in four other counties (Calvert,
Frederick, St. Mary’s, and Somerset) remains part of the local State’s Attorney’s Office.
Pension Transfers
If a member of a State or local retirement or pension system transfers to another State or
local retirement or pension system because of an involuntary transfer of the member’s unit
to another employer, all the employer contributions on behalf of the member and interest
on those contributions must be transferred to the new system. The amount to be transferred
must be determined by an actuarial valuation.
State Revenues: Harford County currently pays DHS an annual administrative fee of
approximately $47,295 for child support functions in the State’s Attorney’s Office. By
transferring the functions of child support enforcement to CSA, Harford County no longer
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pays the fee, so general fund revenues decrease by approximately $47,295 annually
beginning in fiscal 2021.
State Expenditures: This estimate assumes OAG appoints the three assistant
State’s Attorneys who currently provide child support services in Harford County in order
for operations to continue. Additionally, DHS advises that nine other employees currently
carrying out child support enforcement are transferred to CSA under the bill. Accordingly,
general fund expenditures increase by $355,469 in fiscal 2021, which reflects the general
fund share of the costs associated with transferring 12 employees. The Governor’s
proposed 2021 budget contains funding for these 12 positions. Expenditures associated
with these transferred positions total $1.0 million (34% general funds/66% federal funds).
However, under the bill, DHS continues to receive matching federal funds for child support
functions. Rather than passing the funds through to Harford County to use for child support
operations, it instead retains them once the duties of the office become a State function.
The fiscal 2021 budget includes federal funding for child support services in
Harford County of approximately $690,000. Accordingly, federal funds are not affected.
Harford County is a participating governmental unit (PGU) in SRPS, so all current
Harford County employees of the State’s Attorney’s Office who become DHS employees
should already be members of either the Alternate Contributory Pension Selection Plan or
the Reformed Contributory Pension Benefit within EPS. Thus, the bill should not affect
the State Retirement Agency. Pension liabilities associated with the transferred personnel
shift from being local to State liabilities, but under provisions of State pension law that
apply under the bill, transfers between State and local pension systems are generally
considered to have no net effect on State or local liabilities. The State Retirement Agency
can perform the actuarial valuation with existing resources.
Local Expenditures: Harford County estimates that its expenditures decrease by at
least $516,183 annually beginning in fiscal 2021 once it is relieved of the obligation to pay
its share of child support operations. This estimate reflects $414,773 of personnel savings
from transferring the positions to DHS, along with other operating expenses of $101,410,
which includes office space funded completely by the county and the administrative fee
paid to DHS. In fiscal 2021 only, any expenditure decrease associated with no longer
providing child support operations is offset by the amount of any compensation owed to
employees due to the termination of county employment.
Harford County is a PGU in SRPS, so all current Harford County employees of the State’s
Attorney’s Office who become DHS employees should already be members of either the
Alternate Contributory Pension Selection Plan or the Reformed Contributory Pension
Benefit within EPS. However, a transfer from a PGU to the State plan is considered a
transfer under current law even though both plans are part of SRPS. Thus, because the
transfer is an involuntary transfer resulting from the transfer of the unit, employer
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contributions made on behalf of the employees by Harford County must transfer to the
State EPS plan. An actuarial valuation is necessary to determine the amount of the transfer;
as the employer contribution for PGU employers is substantially lower than for the State
EPS plan (the fiscal 2021 EPS employer contribution rates are 6.71% for PGUs and 20.71%
for the State), it is likely that Harford County’s employer contribution will increase to cover
the additional pension liability for affected employees.
Additional Information
Prior Introductions: None.
Designated Cross File: HB 407 (Harford County Delegation) - Appropriations.
Information Source(s): Harford County; Maryland State’s Attorneys’ Association;
Department of Budget and Management; Department of Human Services; State Retirement
Agency; Department of Legislative Services
Fiscal Note History: First Reader - February 4, 2020
rh/mcr Third Reader - March 13, 2020
Revised - Amendment(s) - March 13, 2020
Revised - Updated Information - March 13, 2020
Revised - Correction - March 13, 2020
Enrolled - March 31, 2020
Revised - Amendment(s) - March 31, 2020
Analysis by: Heather N. MacDonagh Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 137/ Page 4


Statutes affected:
Text - First - Harford County - State's Attorney's Office and Child Support Administration - Transfer of Personnel: 10-117 Family Law
Text - Third - Harford County - State's Attorney's Office and Child Support Administration - Transfer of Personnel: 10-117 Family Law
Text - Enrolled - Harford County - State's Attorney's Office and Child Support Administration - Transfer of Personnel: 10-117 Family Law