[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3130 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 3130

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, and 
   to provide for a more flexible penalty procedure for States that 
           violate interjurisdictional adoption requirements.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 28, 1998

  Mr. Shaw (for himself and Mr. Levin) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
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, and 
   to provide for a more flexible penalty procedure for States that 
           violate interjurisdictional adoption requirements.

    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.
Sec. 302. 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) 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 comply with section 
        454(24)(A), 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 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.
    ``(B) In this paragraph:
            ``(i) The term `penalty amount' means, with respect to a 
        failure of a State to comply with section 454(24)--
                    ``(I) 4 percent of the penalty base, in the case of 
                the 1st fiscal year in which such a failure by the 
                State occurs;
                    ``(II) 8 percent of the penalty base, in the case 
                of the 2nd such fiscal year;
                    ``(III) 16 percent of the penalty base, in the case 
                of the 3rd such fiscal year; or
                    ``(IV) 20 percent of the penalty base, in the case 
                of the 4th or any subsequent such fiscal year.
            ``(ii) The term `penalty base' means, with respect to a 
        failure of a State to comply with 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) by December 31, 1997, 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 has provided the certification as a 
        result of a 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 achieves compliance with section 
454(24)(A) 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 75 percent of the reduction for the fiscal 
year.
    ``(iii) The Secretary shall reduce the amount of any reduction 
that, in the absence of this clause, would be required to be made under 
this paragraph by reason of the failure of a State to achieve 
compliance with section 454(24)(B) during the fiscal year, by an amount 
equal to 20 percent of the amount of the otherwise required reduction, 
for each State performance measure described in section 458A(b)(4) with 
respect to which the applicable percentage under section 458A(b)(6) for 
the fiscal year is 100 percent, if the Secretary has made the 
determination described in section 458A(b)(5)(B) with respect to the 
State for the fiscal year.
    ``(D) The preceding provisions of this paragraph (except for 
subparagraph (C)(i)) shall apply, separately and independently, to a 
failure to comply with section 454(24)(B) in the same manner in which 
the preceding provisions apply to a failure to comply with section 
454(24)(A).''.
    (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 1 point 
                        of contact in the State 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) $439,000,000 for fiscal year 2000;
                            ``(ii) $446,000,000 for fiscal year 2001;
                            ``(iii) $468,000,000 for fiscal year 2002;
                            ``(iv) $479,000,000 for fiscal year 2003;
                            ``(v) $473,000,000 for fiscal year 2004;
                            ``(vi) $465,000,000 for fiscal year 2005;
                            ``(vii) $478,000,000 for fiscal year 2006;
                            ``(viii) $490,000,000 for fiscal year 2007; 
                        and
                            ``(ix) 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 2nd 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--
            ``(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 which 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 \1/
        3\ the amount otherwise payable to a State under section 458 of 
        the Social Security Act, and shall reduce by \2/3\ the amount 
        otherwise payable to a State under section 458A of such Act; 
        and
            (2) for fiscal year 2001, the Secretary shall reduce by \2/
        3\ the amount otherwise payable to a State under section 458 of 
        the Social Security Act, and shall reduce by \1/3\ 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 section 
        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 (42 
                U.S.C. 658a) is redesignated as section 458.
                    (B) 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) Section 474(d) of the Social Security Act (42 U.S.C. 674(d)) is 
amended in each of paragraphs (1) and (2) by inserting ``or subsection 
(e) of this section'' after ``section 471(a)(18)''.
    (b) Section 474(e) of such Act (42 U.S.C. 674(e)) is amended--
            (1) by striking all that precedes paragraph (1) and 
        inserting the following:
    ``(e) As a condition of receiving funds under this part, a State 
shall not--'';
            (2) in paragraph (1), by striking ``denied or delayed'' and 
        inserting ``deny or delay''; and
            (3) in paragraph (2), by striking ``failed'' and inserting 
        ``fail''.
    (c) Retroactivity.--The amendments made by this section shall take 
effect as if included in section 202(b) of the Adoption and Safe 
Families Act of 1997.

SEC. 302. TECHNICAL CORRECTIONS.

    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''.
                                 <all>