[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3130 Enrolled Bill (ENR)]

        H.R.3130

                       One Hundred Fifth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-
                                  eight


                                 An Act


 
To provide for an alternative penalty procedure for States that fail to 
   meet Federal child support data processing requirements, to reform 
 Federal incentive payments for effective child support performance, to 
 provide for a more flexible penalty procedure for States that violate 
   interjurisdictional adoption requirements, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Child Support Performance and 
Incentive Act of 1998''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

           TITLE I--CHILD SUPPORT DATA PROCESSING REQUIREMENTS

Sec. 101. Alternative penalty procedure.
Sec. 102. Authority to waive single statewide automated data processing 
          and information retrieval system requirement.

                TITLE II--CHILD SUPPORT INCENTIVE SYSTEM

Sec. 201. Incentive payments to States.

                     TITLE III--ADOPTION PROVISIONS

Sec. 301. More flexible penalty procedure to be applied for failing to 
          permit interjurisdictional adoption.

                         TITLE IV--MISCELLANEOUS

Sec. 401. Elimination of barriers to the effective establishment and 
          enforcement of medical child support.
Sec. 402. Safeguard of new employee information.
Sec. 403. Limitations on use of TANF funds for matching under certain 
          Federal transportation program.
Sec. 404. Clarification of meaning of high-volume automated 
          administrative enforcement of child support in interstate 
          cases.
Sec. 405. General Accounting Office reports.
Sec. 406. Data matching by multistate financial institutions.
Sec. 407. Elimination of unnecessary data reporting.
Sec. 408. Clarification of eligibility under welfare-to-work programs.
Sec. 409. Study of feasibility of implementing immigration provisions of 
          H.R. 3130, as passed by the House of Representatives on March 
          5, 1998.
Sec. 410. Technical corrections.

          TITLE I--CHILD SUPPORT DATA PROCESSING REQUIREMENTS

SEC. 101. ALTERNATIVE PENALTY PROCEDURE.

    (a) In General.--Section 455(a) of the Social Security Act (42 
U.S.C. 655(a)) is amended by adding at the end the following:
    ``(4)(A)(i) If--
        ``(I) the Secretary determines that a State plan under section 
    454 would (in the absence of this paragraph) be disapproved for the 
    failure of the State to comply with a particular subparagraph of 
    section 454(24), and that the State has made and is continuing to 
    make a good faith effort to so comply; and
        ``(II) the State has submitted to the Secretary a corrective 
    compliance plan that describes how, by when, and at what cost the 
    State will achieve such compliance, which has been approved by the 
    Secretary,
then the Secretary shall not disapprove the State plan under section 
454, and the Secretary shall reduce the amount otherwise payable to the 
State under paragraph (1)(A) of this subsection for the fiscal year by 
the penalty amount.
    ``(ii) All failures of a State during a fiscal year to comply with 
any of the requirements referred to in the same subparagraph of section 
454(24) shall be considered a single failure of the State to comply 
with that subparagraph during the fiscal year for purposes of this 
paragraph.
    ``(B) In this paragraph:
        ``(i) The term `penalty amount' means, with respect to a 
    failure of a State to comply with a subparagraph of section 
    454(24)--
            ``(I) 4 percent of the penalty base, in the case of the 
        first fiscal year in which such a failure by the State occurs 
        (regardless of whether a penalty is imposed under this 
        paragraph with respect to the failure);
            ``(II) 8 percent of the penalty base, in the case of the 
        second such fiscal year;
            ``(III) 16 percent of the penalty base, in the case of the 
        third such fiscal year;
            ``(IV) 25 percent of the penalty base, in the case of the 
        fourth such fiscal year; or
            ``(V) 30 percent of the penalty base, in the case of the 
        fifth or any subsequent such fiscal year.
        ``(ii) The term `penalty base' means, with respect to a failure 
    of a State to comply with a subparagraph of section 454(24) during 
    a fiscal year, the amount otherwise payable to the State under 
    paragraph (1)(A) of this subsection for the preceding fiscal year.
    ``(C)(i) The Secretary shall waive a penalty under this paragraph 
for any failure of a State to comply with section 454(24)(A) during 
fiscal year 1998 if--
        ``(I) on or before August 1, 1998, the State has submitted to 
    the Secretary a request that the Secretary certify the State as 
    having met the requirements of such section;
        ``(II) the Secretary subsequently provides the certification as 
    a result of a timely review conducted pursuant to the request; and
        ``(III) the State has not failed such a review.
    ``(ii) If a State with respect to which a reduction is made under 
this paragraph for a fiscal year with respect to a failure to comply 
with a subparagraph of section 454(24) achieves compliance with such 
subparagraph by the beginning of the succeeding fiscal year, the 
Secretary shall increase the amount otherwise payable to the State 
under paragraph (1)(A) of this subsection for the succeeding fiscal 
year by an amount equal to 90 percent of the reduction for the fiscal 
year.
    ``(D) The Secretary may not impose a penalty under this paragraph 
against a State with respect to a failure to comply with section 
454(24)(B) for a fiscal year if the Secretary is required to impose a 
penalty under this paragraph against the State with respect to a 
failure to comply with section 454(24)(A) for the fiscal year.''.
    (b) Inapplicability of Penalty Under TANF Program.--Section 
409(a)(8)(A)(i)(III) of such Act (42 U.S.C. 609(a)(8)(A)(i)(III)) is 
amended by inserting ``(other than section 454(24))'' before the 
semicolon.

SEC. 102. AUTHORITY TO WAIVE SINGLE STATEWIDE AUTOMATED DATA PROCESSING 
              AND INFORMATION RETRIEVAL SYSTEM REQUIREMENT.

    (a) In General.--Section 452(d)(3) of the Social Security Act (42 
U.S.C. 652(d)(3)) is amended to read as follows:
    ``(3) The Secretary may waive any requirement of paragraph (1) or 
any condition specified under section 454(16), and shall waive the 
single statewide system requirement under sections 454(16) and 454A, 
with respect to a State if--
        ``(A) the State demonstrates to the satisfaction of the 
    Secretary that the State has or can develop an alternative system 
    or systems that enable the State--
            ``(i) for purposes of section 409(a)(8), to achieve the 
        paternity establishment percentages (as defined in section 
        452(g)(2)) and other performance measures that may be 
        established by the Secretary;
            ``(ii) to submit data under section 454(15)(B) that is 
        complete and reliable;
            ``(iii) to substantially comply with the requirements of 
        this part; and
            ``(iv) in the case of a request to waive the single 
        statewide system requirement, to--
                ``(I) meet all functional requirements of sections 
            454(16) and 454A;
                ``(II) ensure that calculation of distributions meets 
            the requirements of section 457 and accounts for 
            distributions to children in different families or in 
            different States or sub-State jurisdictions, and for 
            distributions to other States;
                ``(III) ensure that there is only one point of contact 
            in the State which provides seamless case processing for 
            all interstate case processing and coordinated, automated 
            intrastate case management;
                ``(IV) ensure that standardized data elements, forms, 
            and definitions are used throughout the State;
                ``(V) complete the alternative system in no more time 
            than it would take to complete a single statewide system 
            that meets such requirement; and
                ``(VI) process child support cases as quickly, 
            efficiently, and effectively as such cases would be 
            processed through a single statewide system that meets such 
            requirement;
        ``(B)(i) the waiver meets the criteria of paragraphs (1), (2), 
    and (3) of section 1115(c); or
        ``(ii) the State provides assurances to the Secretary that 
    steps will be taken to otherwise improve the State's child support 
    enforcement program; and
        ``(C) in the case of a request to waive the single statewide 
    system requirement, the State has submitted to the Secretary 
    separate estimates of the total cost of a single statewide system 
    that meets such requirement, and of any such alternative system or 
    systems, which shall include estimates of the cost of developing 
    and completing the system and of operating and maintaining the 
    system for 5 years, and the Secretary has agreed with the 
    estimates.''.
    (b) Payments to States.--Section 455(a)(1) of such Act (42 U.S.C. 
655(a)(1)) is amended--
        (1) by striking ``and'' at the end of subparagraph (B);
        (2) by striking the semicolon at the end of subparagraph (C) 
    and inserting ``, and''; and
        (3) by inserting after subparagraph (C) the following:
        ``(D) equal to 66 percent of the sums expended by the State 
    during the quarter for an alternative statewide system for which a 
    waiver has been granted under section 452(d)(3), but only to the 
    extent that the total of the sums so expended by the State on or 
    after the date of the enactment of this subparagraph does not 
    exceed the least total cost estimate submitted by the State 
    pursuant to section 452(d)(3)(C) in the request for the waiver;''.

                TITLE II--CHILD SUPPORT INCENTIVE SYSTEM

SEC. 201. INCENTIVE PAYMENTS TO STATES.

    (a) In General.--Part D of title IV of the Social Security Act (42 
U.S.C. 651-669) is amended by inserting after section 458 the 
following:

``SEC. 458A. INCENTIVE PAYMENTS TO STATES.

    ``(a) In General.--In addition to any other payment under this 
part, the Secretary shall, subject to subsection (f), make an incentive 
payment to each State for each fiscal year in an amount determined 
under subsection (b).
    ``(b) Amount of Incentive Payment.--
        ``(1) In general.--The incentive payment for a State for a 
    fiscal year is equal to the incentive payment pool for the fiscal 
    year, multiplied by the State incentive payment share for the 
    fiscal year.
        ``(2) Incentive payment pool.--
            ``(A) In general.--In paragraph (1), the term `incentive 
        payment pool' means--
                ``(i) $422,000,000 for fiscal year 2000;
                ``(ii) $429,000,000 for fiscal year 2001;
                ``(iii) $450,000,000 for fiscal year 2002;
                ``(iv) $461,000,000 for fiscal year 2003;
                ``(v) $454,000,000 for fiscal year 2004;
                ``(vi) $446,000,000 for fiscal year 2005;
                ``(vii) $458,000,000 for fiscal year 2006;
                ``(viii) $471,000,000 for fiscal year 2007;
                ``(ix) $483,000,000 for fiscal year 2008; and
                ``(x) for any succeeding fiscal year, the amount of the 
            incentive payment pool for the fiscal year that precedes 
            such succeeding fiscal year, multiplied by the percentage 
            (if any) by which the CPI for such preceding fiscal year 
            exceeds the CPI for the second preceding fiscal year.
            ``(B) CPI.--For purposes of subparagraph (A), the CPI for a 
        fiscal year is the average of the Consumer Price Index for the 
        12-month period ending on September 30 of the fiscal year. As 
        used in the preceding sentence, the term `Consumer Price Index' 
        means the last Consumer Price Index for all-urban consumers 
        published by the Department of Labor.
        ``(3) State incentive payment share.--In paragraph (1), the 
    term `State incentive payment share' means, with respect to a 
    fiscal year--
            ``(A) the incentive base amount for the State for the 
        fiscal year; divided by
            ``(B) the sum of the incentive base amounts for all of the 
        States for the fiscal year.
        ``(4) Incentive base amount.--In paragraph (3), the term 
    `incentive base amount' means, with respect to a State and a fiscal 
    year, the sum of the applicable percentages (determined in 
    accordance with paragraph (6)) multiplied by the corresponding 
    maximum incentive base amounts for the State for the fiscal year, 
    with respect to each of the following measures of State performance 
    for the fiscal year:
            ``(A) The paternity establishment performance level.
            ``(B) The support order performance level.
            ``(C) The current payment performance level.
            ``(D) The arrearage payment performance level.
            ``(E) The cost-effectiveness performance level.
        ``(5) Maximum incentive base amount.--
            ``(A) In general.--For purposes of paragraph (4), the 
        maximum incentive base amount for a State for a fiscal year 
        is--
                ``(i) with respect to the performance measures 
            described in subparagraphs (A), (B), and (C) of paragraph 
            (4), the State collections base for the fiscal year; and
                ``(ii) with respect to the performance measures 
            described in subparagraphs (D) and (E) of paragraph (4), 75 
            percent of the State collections base for the fiscal year.
            ``(B) Data required to be complete and reliable.--
        Notwithstanding subparagraph (A), the maximum incentive base 
        amount for a State for a fiscal year with respect to a 
        performance measure described in paragraph (4) is zero, unless 
        the Secretary determines, on the basis of an audit performed 
        under section 452(a)(4)(C)(i), that the data which the State 
        submitted pursuant to section 454(15)(B) for the fiscal year 
        and which is used to determine the performance level involved 
        is complete and reliable.
            ``(C) State collections base.--For purposes of subparagraph 
        (A), the State collections base for a fiscal year is equal to 
        the sum of--
                ``(i) 2 times the sum of--

                    ``(I) the total amount of support collected during 
                the fiscal year under the State plan approved under 
                this part in cases in which the support obligation 
                involved is required to be assigned to the State 
                pursuant to part A or E of this title or title XIX; and
                    ``(II) the total amount of support collected during 
                the fiscal year under the State plan approved under 
                this part in cases in which the support obligation 
                involved was so assigned but, at the time of 
                collection, is not required to be so assigned; and

                ``(ii) the total amount of support collected during the 
            fiscal year under the State plan approved under this part 
            in all other cases.
        ``(6) Determination of applicable percentages based on 
    performance levels.--
            ``(A) Paternity establishment.--
                ``(i) Determination of paternity establishment 
            performance level.--The paternity establishment performance 
            level for a State for a fiscal year is, at the option of 
            the State, the IV-D paternity establishment percentage 
            determined under section 452(g)(2)(A) or the statewide 
            paternity establishment percentage determined under section 
            452(g)(2)(B).
                ``(ii) Determination of applicable percentage.--The 
            applicable percentage with respect to a State's paternity 
            establishment performance level is as follows:
---------------------------------------------------------------------------
  

------------------------------------------------------------------------
``If the paternity establishment performance level is:                  
-------------------------------------------------------  The applicable 
            At least:                 But less than:     percentage is: 
------------------------------------------------------------------------
80%..............................  ...................         100      
79%..............................  80%................         98       
78%..............................  79%................         96       
77%..............................  78%................         94       
76%..............................  77%................         92       
75%..............................  76%................         90       
74%..............................  75%................         88       
73%..............................  74%................         86       
72%..............................  73%................         84       
71%..............................  72%................         82       
70%..............................  71%................         80       
69%..............................  70%................         79       
68%..............................  69%................         78       
67%..............................  68%................         77       
66%..............................  67%................         76       
65%..............................  66%................         75       
64%..............................  65%................         74       
63%..............................  64%................         73       
62%..............................  63%................         72       
61%..............................  62%................         71       
60%..............................  61%................         70       
59%..............................  60%................         69       
58%..............................  59%................         68       
57%..............................  58%................         67       
56%..............................  57%................         66       
55%..............................  56%................         65       
54%..............................  55%................         64       
53%..............................  54%................         63       
52%..............................  53%................         62       
51%..............................  52%................         61       
50%..............................  51%................         60       
0%...............................  50%................         0.       
------------------------------------------------------------------------

            Notwithstanding the preceding sentence, if the paternity 
            establishment performance level of a State for a fiscal 
            year is less than 50 percent but exceeds by at least 10 
            percentage points the paternity establishment performance 
            level of the State for the immediately preceding fiscal 
            year, then the applicable percentage with respect to the 
            State's paternity establishment performance level is 50 
            percent.
            ``(B) Establishment of child support orders.--
                ``(i) Determination of support order performance 
            level.--The support order performance level for a State for 
            a fiscal year is the percentage of the total number of 
            cases under the State plan approved under this part in 
            which there is a support order during the fiscal year.
                ``(ii) Determination of applicable percentage.--The 
            applicable percentage with respect to a State's support 
            order performance level is as follows:
---------------------------------------------------------------------------
  

------------------------------------------------------------------------
     ``If the support order performance level is:                       
-------------------------------------------------------  The applicable 
            At least:                 But less than:     percentage is: 
------------------------------------------------------------------------
80%..............................  ...................         100      
79%..............................  80%................         98       
78%..............................  79%................         96       
77%..............................  78%................         94       
76%..............................  77%................         92       
75%..............................  76%................         90       
74%..............................  75%................         88       
73%..............................  74%................         86       
72%..............................  73%................         84       
71%..............................  72%................         82       
70%..............................  71%................         80       
69%..............................  70%................         79       
68%..............................  69%................         78       
67%..............................  68%................         77       
66%..............................  67%................         76       
65%..............................  66%................         75       
64%..............................  65%................         74       
63%..............................  64%................         73       
62%..............................  63%................         72       
61%..............................  62%................         71       
60%..............................  61%................         70       
59%..............................  60%................         69       
58%..............................  59%................         68       
57%..............................  58%................         67       
56%..............................  57%................         66       
55%..............................  56%................         65       
54%..............................  55%................         64       
53%..............................  54%................         63       
52%..............................  53%................         62       
51%..............................  52%................         61       
50%..............................  51%................         60       
0%...............................  50%................         0.       
------------------------------------------------------------------------

            Notwithstanding the preceding sentence, if the support 
            order performance level of a State for a fiscal year is 
            less than 50 percent but exceeds by at least 5 percentage 
            points the support order performance level of the State for 
            the immediately preceding fiscal year, then the applicable 
            percentage with respect to the State's support order 
            performance level is 50 percent.
            ``(C) Collections on current child support due.--
                ``(i) Determination of current payment performance 
            level.--The current payment performance level for a State 
            for a fiscal year is equal to the total amount of current 
            support collected during the fiscal year under the State 
            plan approved under this part divided by the total amount 
            of current support owed during the fiscal year in all cases 
            under the State plan, expressed as a percentage.
                ``(ii) Determination of applicable percentage.--The 
            applicable percentage with respect to a State's current 
            payment performance level is as follows:
---------------------------------------------------------------------------
  

------------------------------------------------------------------------
    ``If the current payment performance level is:                      
-------------------------------------------------------  The applicable 
            At least:                 But less than:     percentage is: 
------------------------------------------------------------------------
80%..............................  ...................         100      
79%..............................  80%................         98       
78%..............................  79%................         96       
77%..............................  78%................         94       
76%..............................  77%................         92       
75%..............................  76%................         90       
74%..............................  75%................         88       
73%..............................  74%................         86       
72%..............................  73%................         84       
71%..............................  72%................         82       
70%..............................  71%................         80       
69%..............................  70%................         79       
68%..............................  69%................         78       
67%..............................  68%................         77       
66%..............................  67%................         76       
65%..............................  66%................         75       
64%..............................  65%................         74       
63%..............................  64%................         73       
62%..............................  63%................         72       
61%..............................  62%................         71       
60%..............................  61%................         70       
59%..............................  60%................         69       
58%..............................  59%................         68       
57%..............................  58%................         67       
56%..............................  57%................         66       
55%..............................  56%................         65       
54%..............................  55%................         64       
53%..............................  54%................         63       
52%..............................  53%................         62       
51%..............................  52%................         61       
50%..............................  51%................         60       
49%..............................  50%................         59       
48%..............................  49%................         58       
47%..............................  48%................         57       
46%..............................  47%................         56       
45%..............................  46%................         55       
44%..............................  45%................         54       
43%..............................  44%................         53       
42%..............................  43%................         52       
41%..............................  42%................         51       
40%..............................  41%................         50       
0%...............................  40%................         0.       
------------------------------------------------------------------------

            Notwithstanding the preceding sentence, if the current 
            payment performance level of a State for a fiscal year is 
            less than 40 percent but exceeds by at least 5 percentage 
            points the current payment performance level of the State 
            for the immediately preceding fiscal year, then the 
            applicable percentage with respect to the State's current 
            payment performance level is 50 percent.
            ``(D) Collections on child support arrearages.--
                ``(i) Determination of arrearage payment performance 
            level.--The arrearage payment performance level for a State 
            for a fiscal year is equal to the total number of cases 
            under the State plan approved under this part in which 
            payments of past-due child support were received during the 
            fiscal year and part or all of the payments were 
            distributed to the family to whom the past-due child 
            support was owed (or, if all past-due child support owed to 
            the family was, at the time of receipt, subject to an 
            assignment to the State, part or all of the payments were 
            retained by the State) divided by the total number of cases 
            under the State plan in which there is past-due child 
            support, expressed as a percentage.
                ``(ii) Determination of applicable percentage.--The 
            applicable percentage with respect to a State's arrearage 
            payment performance level is as follows:
---------------------------------------------------------------------------
  

------------------------------------------------------------------------
   ``If the arrearage payment performance level is:                     
-------------------------------------------------------  The applicable 
            At least:                 But less than:     percentage is: 
------------------------------------------------------------------------
80%..............................  ...................         100      
79%..............................  80%................         98       
78%..............................  79%................         96       
77%..............................  78%................         94       
76%..............................  77%................         92       
75%..............................  76%................         90       
74%..............................  75%................         88       
73%..............................  74%................         86       
72%..............................  73%................         84       
71%..............................  72%................         82       
70%..............................  71%................         80       
69%..............................  70%................         79       
68%..............................  69%................         78       
67%..............................  68%................         77       
66%..............................  67%................         76       
65%..............................  66%................         75       
64%..............................  65%................         74       
63%..............................  64%................         73       
62%..............................  63%................         72       
61%..............................  62%................         71       
60%..............................  61%................         70       
59%..............................  60%................         69       
58%..............................  59%................         68       
57%..............................  58%................         67       
56%..............................  57%................         66       
55%..............................  56%................         65       
54%..............................  55%................         64       
53%..............................  54%................         63       
52%..............................  53%................         62       
51%..............................  52%................         61       
50%..............................  51%................         60       
49%..............................  50%................         59       
48%..............................  49%................         58       
47%..............................  48%................         57       
46%..............................  47%................         56       
45%..............................  46%................         55       
44%..............................  45%................         54       
43%..............................  44%................         53       
42%..............................  43%................         52       
41%..............................  42%................         51       
40%..............................  41%................         50       
0%...............................  40%................         0.       
------------------------------------------------------------------------

            Notwithstanding the preceding sentence, if the arrearage 
            payment performance level of a State for a fiscal year is 
            less than 40 percent but exceeds by at least 5 percentage 
            points the arrearage payment performance level of the State 
            for the immediately preceding fiscal year, then the 
            applicable percentage with respect to the State's arrearage 
            payment performance level is 50 percent.
            ``(E) Cost-effectiveness.--
                ``(i) Determination of cost-effectiveness performance 
            level.--The cost-effectiveness performance level for a 
            State for a fiscal year is equal to the total amount 
            collected during the fiscal year under the State plan 
            approved under this part divided by the total amount 
            expended during the fiscal year under the State plan, 
            expressed as a ratio.
                ``(ii) Determination of applicable percentage.--The 
            applicable percentage with respect to a State's cost-
            effectiveness performance level is as follows:
---------------------------------------------------------------------------
  

------------------------------------------------------------------------
   ``If the cost-effectiveness performance level is:                    
-------------------------------------------------------  The applicable 
            At least:                 But less than:     percentage is: 
------------------------------------------------------------------------
5.00.............................  ...................         100      
4.50.............................  4.99...............         90       
4.00.............................  4.50...............         80       
3.50.............................  4.00...............         70       
3.00.............................  3.50...............         60       
2.50.............................  3.00...............         50       
2.00.............................  2.50...............         40       
0.00.............................  2.00...............         0.       
------------------------------------------------------------------------

    ``(c) Treatment of Interstate Collections.--In computing incentive 
payments under this section, support which is collected by a State at 
the request of another State shall be treated as having been collected 
in full by both States, and any amounts expended by a State in carrying 
out a special project assisted under section 455(e) shall be excluded.
    ``(d) Administrative Provisions.--The amounts of the incentive 
payments to be made to the States under this section for a fiscal year 
shall be estimated by the Secretary at/or before the beginning of the 
fiscal year on the basis of the best information available. The 
Secretary shall make the payments for the fiscal year, on a quarterly 
basis (with each quarterly payment being made no later than the 
beginning of the quarter involved), in the amounts so estimated, 
reduced or increased to the extent of any overpayments or underpayments 
which the Secretary determines were made under this section to the 
States involved for prior periods and with respect to which adjustment 
has not already been made under this subsection. Upon the making of any 
estimate by the Secretary under the preceding sentence, any 
appropriations available for payments under this section are deemed 
obligated.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary governing the calculation of incentive payments 
under this section, including directions for excluding from the 
calculations certain closed cases and cases over which the States do 
not have jurisdiction.
    ``(f) Reinvestment.--A State to which a payment is made under this 
section shall expend the full amount of the payment to supplement, and 
not supplant, other funds used by the State--
        ``(1) to carry out the State plan approved under this part; or
        ``(2) for any activity (including cost-effective contracts with 
    local agencies) approved by the Secretary, whether or not the 
    expenditures for the activity are eligible for reimbursement under 
    this part, which may contribute to improving the effectiveness or 
    efficiency of the State program operated under this part.''.
    (b) Transition Rule.--Notwithstanding any other provision of law--
        (1) for fiscal year 2000, the Secretary shall reduce by one-
    third the amount otherwise payable to a State under section 458 of 
    the Social Security Act, and shall reduce by two-thirds the amount 
    otherwise payable to a State under section 458A of such Act; and
        (2) for fiscal year 2001, the Secretary shall reduce by two-
    thirds the amount otherwise payable to a State under section 458 of 
    the Social Security Act, and shall reduce by one-third the amount 
    otherwise payable to a State under section 458A of such Act.
    (c) Regulations.--Within 9 months after the date of the enactment 
of this section, the Secretary of Health and Human Services shall 
prescribe regulations governing the implementation of section 458A of 
the Social Security Act when such section takes effect and the 
implementation of subsection (b) of this section.
    (d) Studies.--
        (1) General review of new incentive payment system.--
            (A) In general.--The Secretary of Health and Human Services 
        shall conduct a study of the implementation of the incentive 
        payment system established by section 458A of the Social 
        Security Act, in order to identify the problems and successes 
        of the system.
            (B) Reports to the congress.--
                (i) Report on variations in state performance 
            attributable to demographic variables.--Not later than 
            October 1, 2000, the Secretary shall submit to the Congress 
            a report that identifies any demographic or economic 
            variables that account for differences in the performance 
            levels achieved by the States with respect to the 
            performance measures used in the system, and contains the 
            recommendations of the Secretary for such adjustments to 
            the system as may be necessary to ensure that the relative 
            performance of States is measured from a baseline that 
            takes account of any such variables.
                (ii) Interim report.--Not later than March 1, 2001, the 
            Secretary shall submit to the Congress an interim report 
            that contains the findings of the study required by 
            subparagraph (A).
                (iii) Final report.--Not later than October 1, 2003, 
            the Secretary shall submit to the Congress a final report 
            that contains the final findings of the study required by 
            subparagraph (A). The report shall include any 
            recommendations for changes in the system that the 
            Secretary determines would improve the operation of the 
            child support enforcement program.
        (2) Development of medical support incentive.--
            (A) In general.--The Secretary of Health and Human 
        Services, in consultation with State directors of programs 
        operated under part D of title IV of the Social Security Act 
        and representatives of children potentially eligible for 
        medical support, shall develop a performance measure based on 
        the effectiveness of States in establishing and enforcing 
        medical support obligations, and shall make recommendations for 
        the incorporation of the measure, in a revenue neutral manner, 
        into the incentive payment system established by section 458A 
        of the Social Security Act.
            (B) Report.--Not later than October 1, 1999, the Secretary 
        shall submit to the Congress a report that describes the 
        performance measure and contains the recommendations required 
        by subparagraph (A).
    (e) Technical Amendments.--
        (1) In general.--Section 341 of the Personal Responsibility and 
    Work Opportunity Reconciliation Act of 1996 (42 U.S.C. 658 note) is 
    amended--
            (A) by striking subsection (a) and redesignating 
        subsections (b), (c), and (d) as subsections (a), (b), and (c), 
        respectively; and
            (B) in subsection (c) (as so redesignated)--
                (i) by striking paragraph (1) and inserting the 
            following:
        ``(1) Conforming amendments to present system.--The amendments 
    made by subsection (a) of this section shall become effective with 
    respect to a State as of the date the amendments made by section 
    103(a) (without regard to section 116(a)(2)) first apply to the 
    State.''; and
                (ii) in paragraph (2), by striking ``(c)'' and 
            inserting ``(b)''.
        (2) Effective date.--The amendments made by this subsection 
    shall take effect as if included in the enactment of section 341 of 
    the Personal Responsibility and Work Opportunity Reconciliation Act 
    of 1996.
    (f) Elimination of Predecessor Incentive Payment System.--
        (1) Repeal.--Section 458 of the Social Security Act (42 U.S.C. 
    658) is repealed.
        (2) Conforming amendments.--
            (A) Section 458A of the Social Security Act, as added by 
        section 201(a) of this Act, is redesignated as section 458.
            (B) Section 455(a)(4)(C)(iii) of such Act (42 U.S.C. 
        655(a)(4)(C)(iii)), as added by section 101(a) of this Act, is 
        amended--
                (i) by striking ``458A(b)(4)'' and inserting 
            ``458(b)(4)'';
                (ii) by striking ``458A(b)(6)'' and inserting 
            ``458(b)(6)''; and
                (iii) by striking ``458A(b)(5)(B)'' and inserting 
            ``458(b)(5)(B)''.
            (C) Subsection (d)(1) of this section is amended by 
        striking ``458A'' and inserting ``458''.
        (3) Effective date.--The amendments made by this subsection 
    shall take effect on October 1, 2001.
    (g) General Effective Date.--Except as otherwise provided in this 
section, the amendments made by this section shall take effect on 
October 1, 1999.

                     TITLE III--ADOPTION PROVISIONS

SEC. 301. MORE FLEXIBLE PENALTY PROCEDURE TO BE APPLIED FOR FAILING TO 
              PERMIT INTERJURISDICTIONAL ADOPTION.

    (a) Conversion of Funding Ban Into State Plan Requirement.--Section 
471(a) of the Social Security Act (42 U.S.C. 671(a)) is amended--
        (1) by striking ``and'' at the end of paragraph (21);
        (2) by striking the period at the end of paragraph (22) and 
    inserting ``; and''; and
        (3) by adding at the end the following:
        ``(23) provides that the State shall not--
            ``(A) deny or delay the placement of a child for adoption 
        when an approved family is available outside of the 
        jurisdiction with responsibility for handling the case of the 
        child; or
            ``(B) fail to grant an opportunity for a fair hearing, as 
        described in paragraph (12), to an individual whose allegation 
        of a violation of subparagraph (A) of this paragraph is denied 
        by the State or not acted upon by the State with reasonable 
        promptness.''.
    (b) Penalty for Noncompliance.--Section 474(d) of such Act (42 
U.S.C. 674(d)) is amended in each of paragraphs (1) and (2) by striking 
``section 471(a)(18)'' and inserting ``paragraph (18) or (23) of 
section 471(a)''.
    (c) Conforming Amendment.--Section 474 of such Act (42 U.S.C. 674) 
is amended by striking subsection (e).
    (d) Retroactivity.--The amendments made by this section shall take 
effect as if included in the enactment of section 202 of the Adoption 
and Safe Families Act of 1997 (Public Law 105-89; 111 Stat. 2125).

                        TITLE IV--MISCELLANEOUS

SEC. 401. ELIMINATION OF BARRIERS TO THE EFFECTIVE ESTABLISHMENT AND 
              ENFORCEMENT OF MEDICAL CHILD SUPPORT.

    (a) Study on Effectiveness of Enforcement of Medical Support by 
State Agencies.--
        (1) Medical child support working group.--Within 60 days after 
    the date of the enactment of this Act, the Secretary of Health and 
    Human Services and the Secretary of Labor shall jointly establish a 
    Medical Child Support Working Group. The purpose of the Working 
    Group shall be to identify the impediments to the effective 
    enforcement of medical support by State agencies administering the 
    programs operated pursuant to part D of title IV of the Social 
    Security Act.
        (2) Membership.--The Working Group shall consist of not more 
    than 30 members and shall be composed of representatives of--
            (A) the Department of Labor;
            (B) the Department of Health and Human Services;
            (C) State directors of programs under part D of title IV of 
        the Social Security Act;
            (D) State directors of the Medicaid program under title XIX 
        of the Social Security Act;
            (E) employers, including owners of small businesses and 
        their trade or industry representatives and certified human 
        resource and payroll professionals;
            (F) plan administrators and plan sponsors of group health 
        plans (as defined in section 607(1) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1167(1));
            (G) children potentially eligible for medical support, such 
        as child advocacy organizations;
            (H) State medical child support programs; and
            (I) organizations representing State child support 
        programs.
        (3) Compensation.--The members shall serve without 
    compensation.
        (4) Administrative support.--The Department of Health and Human 
    Services and the Department of Labor shall jointly provide 
    appropriate administrative support to the Working Group, including 
    technical assistance. The Working Group may use the services and 
    facilities of either such Department, with or without 
    reimbursement, as jointly determined by such Departments.
        (5) Report.--
            (A) Report by working group to the secretaries.--Not later 
        than 18 months after the date of the enactment of this Act, the 
        Working Group shall submit to the Secretary of Labor and the 
        Secretary of Health and Human Services a report containing 
        recommendations for appropriate measures to address the 
        impediments to the effective enforcement of medical support by 
        State agencies administering the programs operated pursuant to 
        part D of title IV of the Social Security Act identified by the 
        Working Group, including--
                (i) recommendations based on assessments of the form 
            and content of the National Medical Support Notice, as 
            issued under interim regulations;
                (ii) appropriate measures that establish the priority 
            of withholding of child support obligations, medical 
            support obligations, arrearages in such obligations, and in 
            the case of a medical support obligation, the employee's 
            portion of any health care coverage premium, by such State 
            agencies in light of the restrictions on garnishment 
            provided under title III of the Consumer Credit Protection 
            Act (15 U.S.C. 1671-1677);
                (iii) appropriate procedures for coordinating the 
            provision, enforcement, and transition of health care 
            coverage under the State programs operated pursuant to part 
            D of title IV of the Social Security Act and titles XIX and 
            XXI of such Act;
                (iv) appropriate measures to improve the availability 
            of alternate types of medical support that are aside from 
            health coverage offered through the noncustodial parent's 
            health plan and unrelated to the noncustodial parent's 
            employer, including measures that establish a noncustodial 
            parent's responsibility to share the cost of premiums, co-
            payments, deductibles, or payments for services not covered 
            under a child's existing health coverage;
                (v) recommendations on whether reasonable cost should 
            remain a consideration under section 452(f) of the Social 
            Security Act; and
                (vi) appropriate measures for eliminating any other 
            impediments to the effective enforcement of medical support 
            orders that the Working Group deems necessary.
            (B) Report by secretaries to the congress.--Not later than 
        2 months after receipt of the report pursuant to subparagraph 
        (A), the Secretaries shall jointly submit a report to each 
        House of the Congress regarding the recommendations contained 
        in the report under subparagraph (A).
        (6) Termination.--The Working Group shall terminate 30 days 
    after the date of the issuance of its report under paragraph (5).
    (b) Promulgation of National Medical Support Notice.--
        (1) In general.--The Secretary of Health and Human Services and 
    the Secretary of Labor shall jointly develop and promulgate by 
    regulation a National Medical Support Notice, to be issued by 
    States as a means of enforcing the health care coverage provisions 
    in a child support order.
        (2) Requirements.--The National Medical Support Notice shall--
            (A) conform with the requirements which apply to medical 
        child support orders under section 609(a)(3) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1169(a)(3)) 
        in connection with group health plans (subject to section 
        609(a)(4) of such Act), irrespective of whether the group 
        health plan is covered under section 4 of such Act;
            (B) conform with the requirements of part D of title IV of 
        the Social Security Act; and
            (C) include a separate and easily severable employer 
        withholding notice, informing the employer of--
                (i) applicable provisions of State law requiring the 
            employer to withhold any employee contributions due under 
            any group health plan in connection with coverage required 
            to be provided under such order;
                (ii) the duration of the withholding requirement;
                (iii) the applicability of limitations on any such 
            withholding under title III of the Consumer Credit 
            Protection Act;
                (iv) the applicability of any prioritization required 
            under State law between amounts to be withheld for purposes 
            of cash support and amounts to be withheld for purposes of 
            medical support, in cases where available funds are 
            insufficient for full withholding for both purposes; and
                (v) the name and telephone number of the appropriate 
            unit or division to contact at the State agency regarding 
            the National Medical Support Notice.
        (3) Procedures.--The regulations promulgated pursuant to 
    paragraph (1) shall include appropriate procedures for the 
    transmission of the National Medical Support Notice to employers by 
    State agencies administering the programs operated pursuant to part 
    D of title IV of the Social Security Act.
        (4) Interim regulations.--Not later than 10 months after the 
    date of the enactment of this Act, the Secretaries shall issue 
    interim regulations providing for the National Medical Support 
    Notice.
        (5) Final regulations.--Not later than 1 year after the 
    issuance of the interim regulations under paragraph (4), the 
    Secretary of Health and Human Services and the Secretary of Labor 
    shall jointly issue final regulations providing for the National 
    Medical Support Notice.
    (c) Required Use by States of National Medical Support Notices.--
        (1) State procedures.--Section 466(a)(19) of the Social 
    Security Act (42 U.S.C. 666(a)(19)) is amended to read as follows:
        ``(19) Health care coverage.--Procedures under which--
            ``(A) effective as provided in section 401(c)(3) of the 
        Child Support Performance and Incentive Act of 1998, all child 
        support orders enforced pursuant to this part which include a 
        provision for the health care coverage of the child are 
        enforced, where appropriate, through the use of the National 
        Medical Support Notice promulgated pursuant to section 401(b) 
        of the Child Support Performance and Incentive Act of 1998 (and 
        referred to in section 609(a)(5)(C) of the Employee Retirement 
        Income Security Act of 1974 in connection with group health 
        plans covered under title I of such Act, in section 
        401(e)(3)(C) of the Child Support Performance and Incentive Act 
        of 1998 in connection with State or local group health plans, 
        and in section 401(f)(5)(C) of such Act in connection with 
        church group health plans);
            ``(B) unless alternative coverage is allowed for in any 
        order of the court (or other entity issuing the child support 
        order), in any case in which a noncustodial parent is required 
        under the child support order to provide such health care 
        coverage and the employer of such noncustodial parent is known 
        to the State agency--
                ``(i) the State agency uses the National Medical 
            Support Notice to transfer notice of the provision for the 
            health care coverage of the child to the employer;
                ``(ii) within 20 business days after the date of the 
            National Medical Support Notice, the employer is required 
            to transfer the Notice, excluding the severable employer 
            withholding notice described in section 401(b)(2)(C) of the 
            Child Support Performance and Incentive Act of 1998, to the 
            appropriate plan providing any such health care coverage 
            for which the child is eligible;
                ``(iii) in any case in which the noncustodial parent is 
            a newly hired employee entered in the State Directory of 
            New Hires pursuant to section 453A(e), the State agency 
            provides, where appropriate, the National Medical Support 
            Notice, together with an income withholding notice issued 
            pursuant to section 466(b), within two days after the date 
            of the entry of such employee in such Directory; and
                ``(iv) in any case in which the employment of the 
            noncustodial parent with any employer who has received a 
            National Medical Support Notice is terminated, such 
            employer is required to notify the State agency of such 
            termination; and
            ``(C) any liability of the noncustodial parent to such plan 
        for employee contributions which are required under such plan 
        for enrollment of the child is effectively subject to 
        appropriate enforcement, unless the noncustodial parent 
        contests such enforcement based on a mistake of fact.''.
        (2) Conforming amendments.--Section 452(f) of such Act (42 
    U.S.C. 652(f)) is amended in the first sentence--
            (A) by striking ``petition for the inclusion of'' and 
        inserting ``include''; and
            (B) by inserting ``and enforce medical support'' before 
        ``whenever''.
        (3) Effective date.--The amendments made by this subsection 
    shall be effective with respect to periods beginning on or after 
    the later of--
            (A) October 1, 2001; or
            (B) the effective date of laws enacted by the legislature 
        of such State implementing such amendments,
    but in no event later than the first day of the first calendar 
    quarter beginning after the close of the first regular session of 
    the State legislature that begins after the date of the enactment 
    of this Act. For purposes of the preceding sentence, in the case of 
    a State that has a 2-year legislative session, each year of such 
    session shall be deemed to be a separate regular session of the 
    State legislature.
    (d) National Medical Support Notice Deemed under ERISA a Qualified 
Medical Child Support Order.--Section 609(a)(5) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1169(a)(5)) is 
amended by adding at the end the following:
            ``(C) National medical support notice deemed to be a 
        qualified medical child support order.--
                ``(i) In general.--If the plan administrator of a group 
            health plan which is maintained by the employer of a 
            noncustodial parent of a child or to which such an employer 
            contributes receives an appropriately completed National 
            Medical Support Notice promulgated pursuant to section 
            401(b) of the Child Support Performance and Incentive Act 
            of 1998 in the case of such child, and the Notice meets the 
            requirements of paragraphs (3) and (4), the Notice shall be 
            deemed to be a qualified medical child support order in the 
            case of such child.
                ``(ii) Enrollment of child in plan.--In any case in 
            which an appropriately completed National Medical Support 
            Notice is issued in the case of a child of a participant 
            under a group health plan who is a noncustodial parent of 
            the child, and the Notice is deemed under clause (i) to be 
            a qualified medical child support order, the plan 
            administrator, within 40 business days after the date of 
            the Notice, shall--

                    ``(I) notify the State agency issuing the Notice 
                with respect to such child whether coverage of the 
                child is available under the terms of the plan and, if 
                so, whether such child is covered under the plan and 
                either the effective date of the coverage or, if 
                necessary, any steps to be taken by the custodial 
                parent (or by the official of a State or political 
                subdivision thereof substituted for the name of such 
                child pursuant to paragraph (3)(A)) to effectuate the 
                coverage; and
                    ``(II) provide to the custodial parent (or such 
                substituted official) a description of the coverage 
                available and any forms or documents necessary to 
                effectuate such coverage.

                ``(iii) Rule of construction.--Nothing in this 
            subparagraph shall be construed as requiring a group health 
            plan, upon receipt of a National Medical Support Notice, to 
            provide benefits under the plan (or eligibility for such 
            benefits) in addition to benefits (or eligibility for 
            benefits) provided under the terms of the plan as of 
            immediately before receipt of such Notice.''.
    (e) National Medical Support Notices for State or Local 
Governmental Group Health Plans.--
        (1) In general.--Each State or local governmental group health 
    plan shall provide benefits in accordance with the applicable 
    requirements of any National Medical Support Notice.
        (2) Enrollment of child in plan.--In any case in which an 
    appropriately completed National Medical Support Notice is issued 
    in the case of a child of a participant under a State or local 
    governmental group health plan who is a noncustodial parent of the 
    child, the plan administrator, within 40 business days after the 
    date of the Notice, shall--
            (A) notify the State agency issuing the Notice with respect 
        to such child whether coverage of the child is available under 
        the terms of the plan and, if so, whether such child is covered 
        under the plan and either the effective date of the coverage or 
        any steps necessary to be taken by the custodial parent (or by 
        any official of a State or political subdivision thereof 
        substituted in the Notice for the name of such child in 
        accordance with procedures appliable under subsection (b)(2) of 
        this section) to effectuate the coverage; and
            (B) provide to the custodial parent (or such substituted 
        official) a description of the coverage available and any forms 
        or documents necessary to effectuate such coverage.
        (3) Rule of construction.--Nothing in this subsection shall be 
    construed as requiring a State or local governmental group health 
    plan, upon receipt of a National Medical Support Notice, to provide 
    benefits under the plan (or eligibility for such benefits) in 
    addition to benefits (or eligibility for benefits) provided under 
    the terms of the plan as of immediately before receipt of such 
    Notice.
        (4) Definitions.--For purposes of this subsection--
            (A) State or local governmental group health plan.--The 
        term ``State or local governmental group health plan'' means a 
        group health plan which is established or maintained for its 
        employees by the government of any State, any political 
        subdivision of a State, or any agency or instrumentality of 
        either of the foregoing.
            (B) Alternate recipient.--The term ``alternate recipient'' 
        means any child of a participant who is recognized under a 
        National Medical Support Notice as having a right to enrollment 
        under a State or local governmental group health plan with 
        respect to such participant.
            (C) Group health plan.--The term ``group health plan'' has 
        the meaning provided in section 607(1) of the Employee 
        Retirement Income Security Act of 1974.
            (D) State.--The term ``State'' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, 
        Guam, and American Samoa.
            (E) Other terms.--The terms ``participant'' and 
        ``administrator'' shall have the meanings provided such terms, 
        respectively, by paragraphs (7) and (16) of section 3 of the 
        Employee Retirement Income Security Act of 1974.
        (5) Effective date.--The provisions of this subsection shall 
    take effect on the date of the issuance of interim regulations 
    pursuant to subsection (b)(4) of this section.
    (f) Qualified Medical Child Support Orders and National Medical 
Support Notices for Church Plans.--
        (1) In general.--Each church group health plan shall provide 
    benefits in accordance with the applicable requirements of any 
    qualified medical child support order. A qualified medical child 
    support order with respect to any participant or beneficiary shall 
    be deemed to apply to each such group health plan which has 
    received such order, from which the participant or beneficiary is 
    eligible to receive benefits, and with respect to which the 
    requirements of paragraph (4) are met.
        (2) Definitions.--For purposes of this subsection--
            (A) Church group health plan.--The term ``church group 
        health plan'' means a group health plan which is a church plan.
            (B) Qualified medical child support order.--The term 
        ``qualified medical child support order'' means a medical child 
        support order--
                (i) which creates or recognizes the existence of an 
            alternate recipient's right to, or assigns to an alternate 
            recipient the right to, receive benefits for which a 
            participant or beneficiary is eligible under a church group 
            health plan; and
                (ii) with respect to which the requirements of 
            paragraphs (3) and (4) are met.
            (C) Medical child support order.--The term ``medical child 
        support order'' means any judgment, decree, or order (including 
        approval of a settlement agreement) which--
                (i) provides for child support with respect to a child 
            of a participant under a church group health plan or 
            provides for health benefit coverage to such a child, is 
            made pursuant to a State domestic relations law (including 
            a community property law), and relates to benefits under 
            such plan; or
                (ii) is made pursuant to a law relating to medical 
            child support described in section 1908 of the Social 
            Security Act (as added by section 13822 of the Omnibus 
            Budget Reconciliation Act of 1993) with respect to a church 
            group health plan,
        if such judgment, decree, or order: (I) is issued by a court of 
        competent jurisdiction; or (II) is issued through an 
        administrative process established under State law and has the 
        force and effect of law under applicable State law. For 
        purposes of this paragraph, an administrative notice which is 
        issued pursuant to an administrative process referred to in 
        subclause (II) of the preceding sentence and which has the 
        effect of an order described in clause (i) or (ii) of the 
        preceding sentence shall be treated as such an order.
            (D) Alternate recipient.--The term ``alternate recipient'' 
        means any child of a participant who is recognized under a 
        medical child support order as having a right to enrollment 
        under a church group health plan with respect to such 
        participant.
            (E) Group health plan.--The term ``group health plan'' has 
        the meaning provided in section 607(1) of the Employee 
        Retirement Income Security Act of 1974.
            (F) State.--The term ``State'' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, 
        Guam, and American Samoa.
            (G) Other terms.--The terms ``participant'', 
        ``beneficiary'', ``administrator'', and ``church plan'' shall 
        have the meanings provided such terms, respectively, by 
        paragraphs (7), (8), (16), and (33) of section 3 of the 
        Employee Retirement Income Security Act of 1974.
        (3) Information to be included in qualified order.--A medical 
    child support order meets the requirements of this paragraph only 
    if such order clearly specifies--
            (A) the name and the last known mailing address (if any) of 
        the participant and the name and mailing address of each 
        alternate recipient covered by the order, except that, to the 
        extent provided in the order, the name and mailing address of 
        an official of a State or a political subdivision thereof may 
        be substituted for the mailing address of any such alternate 
        recipient;
            (B) a reasonable description of the type of coverage to be 
        provided to each such alternate recipient, or the manner in 
        which such type of coverage is to be determined; and
            (C) the period to which such order applies.
        (4) Restriction on new types or forms of benefits.--A medical 
    child support order meets the requirements of this paragraph only 
    if such order does not require a church group health plan to 
    provide any type or form of benefit, or any option, not otherwise 
    provided under the plan, except to the extent necessary to meet the 
    requirements of a law relating to medical child support described 
    in section 1908 of the Social Security Act (as added by section 
    13822 of the Omnibus Budget Reconciliation Act of 1993).
        (5) Procedural requirements.--
            (A) Timely notifications and determinations.--In the case 
        of any medical child support order received by a church group 
        health plan--
                (i) the plan administrator shall promptly notify the 
            participant and each alternate recipient of the receipt of 
            such order and the plan's procedures for determining 
            whether medical child support orders are qualified medical 
            child support orders; and
                (ii) within a reasonable period after receipt of such 
            order, the plan administrator shall determine whether such 
            order is a qualified medical child support order and notify 
            the participant and each alternate recipient of such 
            determination.
            (B) Establishment of procedures for determining qualified 
        status of orders.--Each church group health plan shall 
        establish reasonable procedures to determine whether medical 
        child support orders are qualified medical child support orders 
        and to administer the provision of benefits under such 
        qualified orders. Such procedures--
                (i) shall be in writing;
                (ii) shall provide for the notification of each person 
            specified in a medical child support order as eligible to 
            receive benefits under the plan (at the address included in 
            the medical child support order) of such procedures 
            promptly upon receipt by the plan of the medical child 
            support order; and
                (iii) shall permit an alternate recipient to designate 
            a representative for receipt of copies of notices that are 
            sent to the alternate recipient with respect to a medical 
            child support order.
            (C) National medical support notice deemed to be a 
        qualified medical child support order.--
                (i) In general.--If the plan administrator of any 
            church group health plan which is maintained by the 
            employer of a noncustodial parent of a child or to which 
            such an employer contributes receives an appropriately 
            completed National Medical Support Notice promulgated 
            pursuant to subsection (b) of this section in the case of 
            such child, and the Notice meets the requirements of 
            paragraphs (3) and (4) of this subsection, the Notice shall 
            be deemed to be a qualified medical child support order in 
            the case of such child.
                (ii) Enrollment of child in plan.--In any case in which 
            an appropriately completed National Medical Support Notice 
            is issued in the case of a child of a participant under a 
            church group health plan who is a noncustodial parent of 
            the child, and the Notice is deemed under clause (i) to be 
            a qualified medical child support order, the plan 
            administrator, within 40 business days after the date of 
            the Notice, shall--

                    (I) notify the State agency issuing the Notice with 
                respect to such child whether coverage of the child is 
                available under the terms of the plan and, if so, 
                whether such child is covered under the plan and either 
                the effective date of the coverage or any steps 
                necessary to be taken by the custodial parent (or by 
                the official of a State or political subdivision 
                thereof substituted for the name of such child pursuant 
                to paragraph (3)(A)) to effectuate the coverage; and
                    (II) provide to the custodial parent (or such 
                substituted official) a description of the coverage 
                available and any forms or documents necessary to 
                effectuate such coverage.

                (iii) Rule of construction.--Nothing in this 
            subparagraph shall be construed as requiring a church group 
            health plan, upon receipt of a National Medical Support 
            Notice, to provide benefits under the plan (or eligibility 
            for such benefits) in addition to benefits (or eligibility 
            for benefits) provided under the terms of the plan as of 
            immediately before receipt of such Notice.
        (6) Direct provision of benefits provided to alternate 
    recipients.--Any payment for benefits made by a church group health 
    plan pursuant to a medical child support order in reimbursement for 
    expenses paid by an alternate recipient or an alternate recipient's 
    custodial parent or legal guardian shall be made to the alternate 
    recipient or the alternate recipient's custodial parent or legal 
    guardian.
        (7) Payment to state official treated as satisfaction of plan's 
    obligation to make payment to alternate recipient.--Payment of 
    benefits by a church group health plan to an official of a State or 
    a political subdivision thereof whose name and address have been 
    substituted for the address of an alternate recipient in a medical 
    child support order, pursuant to paragraph (3)(A), shall be 
    treated, for purposes of this subsection and part D of title IV of 
    the Social Security Act, as payment of benefits to the alternate 
    recipient.
        (8) Effective date.--The provisions of this subsection shall 
    take effect on the date of the issuance of interim regulations 
    pursuant to subsection (b)(4) of this section.
    (g) Report and Recommendations Regarding the Enforcement of 
Qualified Medical Child Support Orders.--Not later than 8 months after 
the issuance of the report to the Congress pursuant to subsection 
(a)(5), the Secretary of Health and Human Services and the Secretary of 
Labor shall jointly submit to each House of the Congress a report 
containing recommendations for appropriate legislation to improve the 
effectiveness of, and enforcement of, qualified medical child support 
orders under the provisions of subsection (f) of this section and 
section 609(a) of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1169(a)).
    (h) Technical Corrections.--
        (1) Amendment relating to public law 104-266.--
            (A) In general.--Subsection (f) of section 101 of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1021(f)) is repealed.
            (B) Effective date.--The amendment made by subparagraph (A) 
        shall take effect as if included in the enactment of the Act 
        entitled ``An Act to repeal the Medicare and Medicaid Coverage 
        Data Bank'', approved October 2, 1996 (Public Law 104-226; 110 
        Stat. 3033).
        (2) Amendments relating to public law 103-66.--
            (A) In general.--(i) Section 4301(c)(4)(A) of the Omnibus 
        Budget Reconciliation Act of 1993 (Public Law 103-66; 107 Stat. 
        377) is amended by striking ``subsection (b)(7)(D)'' and 
        inserting ``subsection (b)(7)''.
            (ii) Section 514(b)(7) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1144(b)(7)) is amended by 
        striking ``enforced by'' and inserting ``they apply to''.
            (iii) Section 609(a)(2)(B)(ii) of such Act (29 U.S.C. 
        1169(a)(2)(B)(ii)) is amended by striking ``enforces'' and 
        inserting ``is made pursuant to''.
            (B) Child defined.--Section 609(a)(2) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1169(a)(2)) 
        is amended by adding at the end the following:
            ``(D) Child.--The term `child' includes any child adopted 
        by, or placed for adoption with, a participant of a group 
        health plan.''.
            (C) Effective date.--The amendments made by subparagraph 
        (A) shall be effective as if included in the enactment of 
        section 4301(c)(4)(A) of the Omnibus Budget Reconciliation Act 
        of 1993.
        (3) Amendment related to public law 105-33.--
            (A) In general.--Section 609(a)(9) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1169(a)(9)) 
        is amended by striking ``the name and address'' and inserting 
        ``the address''.
            (B) Effective date.--The amendment made by subparagraph (A) 
        shall be effective as if included in the enactment of section 
        5611(b) of the Balanced Budget Act of 1997.

SEC. 402. SAFEGUARD OF NEW EMPLOYEE INFORMATION.

    (a) Penalty for Unauthorized Access, Disclosure, or Use of 
Information.--Section 453(l) of the Social Security Act (42 U.S.C. 
653(l)) is amended--
        (1) by striking ``Information'' and inserting the following:
        ``(1) In general.--Information''; and
        (2) by adding at the end the following:
        ``(2) Penalty for misuse of information in the national 
    directory of new hires.--The Secretary shall require the imposition 
    of an administrative penalty (up to and including dismissal from 
    employment), and a fine of $1,000, for each act of unauthorized 
    access to, disclosure of, or use of, information in the National 
    Directory of New Hires established under subsection (i) by any 
    officer or employee of the United States who knowingly and 
    willfully violates this paragraph.''.
    (b) Limits on Retention of Data in the National Directory of New 
Hires.--Section 453(i)(2) of such Act (42 U.S.C. 653(i)(2)) is amended 
to read as follows:
        ``(2) Data entry and deletion requirements.--
            ``(A) In general.--Information provided pursuant to section 
        453A(g)(2) shall be entered into the data base maintained by 
        the National Directory of New Hires within two business days 
        after receipt, and shall be deleted from the data base 24 
        months after the date of entry.
            ``(B) 12-month limit on access to wage and unemployment 
        compensation information.--The Secretary shall not have access 
        for child support enforcement purposes to information in the 
        National Directory of New Hires that is provided pursuant to 
        section 453A(g)(2)(B), if 12 months has elapsed since the date 
        the information is so provided and there has not been a match 
        resulting from the use of such information in any information 
        comparison under this subsection.
            ``(C) Retention of data for research purposes.--
        Notwithstanding subparagraphs (A) and (B), the Secretary may 
        retain such samples of data entered in the National Directory 
        of New Hires as the Secretary may find necessary to assist in 
        carrying out subsection (j)(5).''.
    (c) Notice of Purposes for Which Wage and Salary Data are to be 
Used.--Within 90 days after the date of the enactment of this Act, the 
Secretary of Health and Human Services shall notify the Committee on 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate of the specific purposes for which the new hire 
and the wage and unemployment compensation information in the National 
Directory of New Hires is to be used. At least 30 days before such 
information is to be used for a purpose not specified in the notice 
provided pursuant to the preceding sentence, the Secretary shall notify 
the Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate of such purpose.
    (d) Report by the Secretary.--Within 3 years after the date of the 
enactment of this Act, the Secretary of Health and Human Services shall 
submit to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate a report on 
the accuracy of the data maintained by the National Directory of New 
Hires pursuant to section 453(i) of the Social Security Act, and the 
effectiveness of the procedures designed to provide for the security of 
such data.
    (e) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2000.

SEC. 403. LIMITATIONS ON USE OF TANF FUNDS FOR MATCHING UNDER CERTAIN 
              FEDERAL TRANSPORTATION PROGRAM.

    (a) In General.--Section 404 of the Social Security Act (42 U.S.C. 
604) is amended by adding at the end the following:
    ``(k) Limitations on Use of Grant for Matching Under Certain 
Federal Transportation Program.--
        ``(1) Use limitations.--A State to which a grant is made under 
    section 403 may not use any part of the grant to match funds made 
    available under section 3037 of the Transportation Equity Act for 
    the 21st Century, unless--
            ``(A) the grant is used for new or expanded transportation 
        services (and not for construction) that benefit individuals 
        described in subparagraph (C), and not to subsidize current 
        operating costs;
            ``(B) the grant is used to supplement and not supplant 
        other State expenditures on transportation;
            ``(C) the preponderance of the benefits derived from such 
        use of the grant accrues to individuals who are--
                ``(i) recipients of assistance under the State program 
            funded under this part;
                ``(ii) former recipients of such assistance;
                ``(iii) noncustodial parents who are described in item 
            (aa) or (bb) of section 403(a)(5)(C)(ii)(II); and
                ``(iv) low-income individuals who are at risk of 
            qualifying for such assistance; and
            ``(D) the services provided through such use of the grant 
        promote the ability of such recipients to engage in work 
        activities (as defined in section 407(d)).
        ``(2) Amount limitation.--From a grant made to a State under 
    section 403(a), the amount that a State uses to match funds 
    described in paragraph (1) of this subsection shall not exceed the 
    amount (if any) by which 30 percent of the total amount of the 
    grant exceeds the amount (if any) of the grant that is used by the 
    State to carry out any State program described in subsection (d)(1) 
    of this section.
        ``(3) Rule of interpretation.--The provision by a State of a 
    transportation benefit under a program conducted under section 3037 
    of the Transportation Equity Act for the 21st Century, to an 
    individual who is not otherwise a recipient of assistance under the 
    State program funded under this part, using funds from a grant made 
    under section 403(a) of this Act, shall not be considered to be the 
    provision of assistance to the individual under the State program 
    funded under this part.''.
    (b) Report to the Congress.--Not later than 2 years after the date 
of the enactment of this Act, the Secretary of Transportation, in 
consultation with the Secretary of Health and Human Services, shall 
submit to the Committees on Ways and Means and on Transportation and 
Infrastructure of the House of Representatives and the Committees on 
Finance and on Environment and Public Works of the Senate a report 
that--
        (1) describes the manner in which funds made available under 
    section 3037 of the Transportation Equity Act for the 21st Century 
    have been used;
        (2) describes whether such uses of such funds has improved 
    transportation services for low-income individuals; and
        (3) contains such other relevant information as may be 
    appropriate.

SEC. 404. CLARIFICATION OF MEANING OF HIGH-VOLUME AUTOMATED 
              ADMINISTRATIVE ENFORCEMENT OF CHILD SUPPORT IN INTERSTATE 
              CASES.

    (a) In General.--Section 466(a)(14)(B) of the Social Security Act 
(42 U.S.C. 666(a)(14)(B)) is amended to read as follows:
            ``(B) High-volume automated administrative enforcement.--In 
        this part, the term `high-volume automated administrative 
        enforcement', in interstate cases, means, on request of another 
        State, the identification by a State, through automated data 
        matches with financial institutions and other entities where 
        assets may be found, of assets owned by persons who owe child 
        support in other States, and the seizure of such assets by the 
        State, through levy or other appropriate processes.''.
    (b) Retroactivity.--The amendment made by subsection (a) shall take 
effect as if included in the enactment of section 5550 of the Balanced 
Budget Act of 1997 (Public Law 105-33; 111 Stat. 633).

SEC. 405. GENERAL ACCOUNTING OFFICE REPORTS.

    (a) Report On Feasibility of Instant Check System.--Not later than 
December 31, 1998, the Comptroller General of the United States shall 
report to the Committee on Finance of the Senate and the Committee on 
Ways and Means of the House of Representatives on the feasibility and 
cost of creating and maintaining a nationwide instant child support 
order check system under which an employer would be able to determine 
whether a newly hired employee is required to provide support under a 
child support order.
    (b) Report On Implementation and Use of Child Support Databases.--
Not later than December 31, 1998, the Comptroller General of the United 
States shall report to the Committee on Finance of the Senate and the 
Committee on Ways and Means of the House of Representatives on the 
implementation of the Federal Parent Locater Service (including the 
Federal Case Registry of Child Support Orders and the National 
Directory of New Hires) established under section 453 of the Social 
Security Act (42 U.S.C. 653) and the State Directory of New Hires 
established under section 453A of such Act (42 U.S.C. 653a). The report 
shall include a detailed discussion of the purposes for which, and the 
manner in which, the information maintained in such databases has been 
used, and an examination as to whether such databases are subject to 
adequate safeguards to protect the privacy of the individuals with 
respect to whom information is reported and maintained.

SEC. 406. DATA MATCHING BY MULTISTATE FINANCIAL INSTITUTIONS.

    (a) Use of Federal Parent Locator Service.--Section 
466(a)(17)(A)(i) of the Social Security Act (42 U.S.C. 
666(a)(17)(A)(i)) is amended by inserting ``and the Federal Parent 
Locator Service in the case of financial institutions doing business in 
two or more States,'' before ``a data match system''.
    (b) Facilitation of Agreements.--Section 452 of such Act (42 U.S.C. 
652) is amended by adding at the end the following:
    ``(l) The Secretary, through the Federal Parent Locator Service, 
may aid State agencies providing services under State programs operated 
pursuant to this part and financial institutions doing business in two 
or more States in reaching agreements regarding the receipt from such 
institutions, and the transfer to the State agencies, of information 
that may be provided pursuant to section 466(a)(17)(A)(i), except that 
any State that, as of the date of the enactment of this subsection, is 
conducting data matches pursuant to section 466(a)(17)(A)(i) shall have 
until January 1, 2000, to allow the Secretary to obtain such 
information from such institutions that are operating in the State. For 
purposes of section 1113(d) of the Right to Financial Privacy Act of 
1978, a disclosure pursuant to this subsection shall be considered a 
disclosure pursuant to a Federal statute.''.
    (c) Protection Against Liability.--Section 469A(a) of such Act (42 
U.S.C. 669a(a)) is amended by inserting ``, or for disclosing any such 
record to the Federal Parent Locator Service pursuant to section 
466(a)(17)(A)'' before the period.

SEC. 407. ELIMINATION OF UNNECESSARY DATA REPORTING.

    (a) In General.--Section 469 of the Social Security Act (42 U.S.C. 
669) is amended--
        (1) by striking all that precedes subsection (c) and inserting 
    the following:

``SEC. 469. COLLECTION AND REPORTING OF CHILD SUPPORT ENFORCEMENT DATA.

    ``(a) In General.--With respect to each type of service described 
in subsection (b), the Secretary shall collect and maintain up-to-date 
statistics, by State, and on a fiscal year basis, on--
        ``(1) the number of cases in the caseload of the State agency 
    administering the plan approved under this part in which the 
    service is needed; and
        ``(2) the number of such cases in which the service has 
    actually been provided.
    ``(b) Types of Services.--The statistics required by subsection (a) 
shall be separately stated with respect to paternity establishment 
services and child support obligation establishment services.
    ``(c) Types of Service Recipients.--The statistics required by 
subsection (a) shall be separately stated with respect to--
        ``(1) recipients of assistance under a State program funded 
    under part A or of payments or services under a State plan approved 
    under part E; and
        ``(2) individuals who are not such recipients.''; and
        (2) in subsection (c), by striking ``(c)'' and inserting ``(d) 
    Rule of Interpretation.--''.
    (b) Conforming Amendment.--Section 452(a)(10) of such Act (42 
U.S.C. 652(a)(10)) is amended--
        (1) by adding ``and'' at the end of subparagraph (H); and
        (2) by striking subparagraph (I) and redesignating subparagraph 
    (J) as subparagraph (I).
    (c) Effective Date.--The amendments made by this section shall 
apply to information maintained with respect to fiscal year 1995 or any 
succeeding fiscal year.

SEC. 408. CLARIFICATION OF ELIGIBILITY UNDER WELFARE-TO-WORK PROGRAMS.

    Section 403(a)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
603(a)(5)(C)(ii)) is amended--
        (1) in the matter preceding subclause (I) by striking ``of 
    minors whose custodial parent is such a recipient'';
        (2) in subclause (I), by inserting ``or the noncustodial 
    parent'' after ``recipient''; and
        (3) in subclause (II), by striking ``The individual--'' and 
    inserting ``The recipient or the minor children of the non- 
    custodial parent--''.

SEC. 409. STUDY OF FEASIBILITY OF IMPLEMENTING IMMIGRATION PROVISIONS 
              OF H.R. 3130, AS PASSED BY THE HOUSE OF REPRESENTATIVES 
              ON MARCH 5, 1998.

    (a) Study.--The Secretary of Health and Human Services, in 
consultation with the Immigration and Naturalization Service, shall 
conduct a study to determine the feasibility of the provisions of title 
V of H.R. 3130, as passed by the House of Representatives on March 5, 
1998, were such provisions to become law, especially whether it would 
be feasible for the Immigration and Naturalization Service to implement 
effectively the requirements of such provisions.
    (b) Report to the Congress.--Within 6 months after the date of the 
enactment of this Act, the Secretary of Health and Human Services shall 
submit to the Committees on Ways and Means and on the Judiciary of the 
House of Representatives and the Committees on Finance and on the 
Judiciary of the Senate a report on the results of the study required 
by subsection (a).

SEC. 410. TECHNICAL CORRECTIONS.

    (a) Section 413(g)(1) of the Social Security Act (42 U.S.C. 
613(g)(1)) is amended by striking ``Economic and Educational 
Opportunities'' and inserting ``Education and the Workforce''.
    (b) Section 422(b)(2) of the Social Security Act (42 U.S.C. 
622(b)(2)) is amended by striking ``under under'' and inserting 
``under''.
    (c) Section 432(a)(8) of the Social Security Act (42 U.S.C. 
632(a)(8)) is amended by adding ``; and'' at the end.
    (d) Section 453(a)(2) of the Social Security Act (42 U.S.C. 
653(a)(2)) is amended--
        (1) by striking ``parentage,'' and inserting ``parentage or'';
        (2) by striking ``or making or enforcing child custody or 
    visitation orders,''; and
        (3) in subparagraph (A), by decreasing the indentation of 
    clause (iv) by 2 ems.
    (e)(1) Section 5557(b) of the Balanced Budget Act of 1997 (42 
U.S.C. 608 note) is amended by adding at the end the following: ``The 
amendment made by section 5536(1)(A) shall not take effect with respect 
to a State until October 1, 2000, or such earlier date as the State may 
select.''.
    (2) The amendment made by paragraph (1) shall take effect as if 
included in the enactment of section 5557 of the Balanced Budget Act of 
1997 (Public Law 105-33; 111 Stat. 637).
    (f) Section 473A(c)(2)(B) of the Social Security Act (42 U.S.C. 
673b(c)(2)(B)) is amended--
        (1) by striking ``November 30, 1997'' and inserting ``April 30, 
    1998''; and
        (2) by striking ``March 1, 1998'' and inserting ``July 1, 
    1998''.
    (g) Section 474(a) of the Social Security Act (42 U.S.C. 674(a)) is 
amended by striking ``(subject to the limitations imposed by subsection 
(b))''.
    (h) Section 232 of the Social Security Act Amendments of 1994 (42 
U.S.C. 1314a) is amended--
        (1) in subsection (b)(3)(D), by striking ``Energy and''; and
        (2) in subsection (d)(4), by striking ``(b)(3)(C)'' and 
    inserting ``(b)(3)''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.