[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2288 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2288

To amend the Internal Revenue Code of 1986 and the Social Security Act 
to repeal provisions relating to the State enforcement of child support 
  obligations and the disbursement of such support and to require the 
 Internal Revenue Service to collect and disburse such support through 
                   wage withholding and other means.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 23, 2000

  Mr. Abraham introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 and the Social Security Act 
to repeal provisions relating to the State enforcement of child support 
  obligations and the disbursement of such support and to require the 
 Internal Revenue Service to collect and disburse such support through 
                   wage withholding and other means.

    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 ``Compassion for Children and Child 
Support Enforcement Act of 1999''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Over one quarter of the Nation's children live in a 
        household where only one of their parents is present.
            (2) Forty percent of these children are not yet eligible 
        for child support because paternity has not been established or 
        a support order has not been issued.
            (3) Sixty percent of these children have a support order, 
        but only half actually receive any support.
            (4) Of those with orders, half receive the full amount 
        ordered, one-quarter receive some of the amount ordered; and 
        one-quarter receive nothing. The problem of nonpayment is 
        particularly acute in cases where the parents live in different 
        States. Today, approximately one-third of all cases are 
        interstate in nature.
            (5) As a result, too many children live in poverty or near 
        poverty and are unable to have the kind of childhood which 
        allows them to grow into healthy, productive citizens. Studies 
        show that, in many families where child support is not paid, 
        children go hungry, lose access to health care, lack 
        appropriate winter clothing and can't participate in school 
        activities. Their families often face a housing crisis, and 
        inability to afford child care creates many latch-key children.
            (6) To show compassion for these children by establishing 
        and enforcing child support awards for them is a high national 
        priority.
            (7) To undertake this task would require a huge commitment 
        of judicial time and resources. While all cases take time and 
        resources, interstate cases involve the time and resources of 
        two or more jurisdictions and are, therefore, particularly 
        troubling.
            (8) This commitment of resources would be unnecessary if 
        better, nonjudicial ways could be found for handling some of 
        these matters.
            (9) The Department of the Treasury is in a unique position 
        to help address these problems. By taking over responsibility 
        for enforcing all child support orders through routine 
        withholding of support from obligated parents and use of the 
        enforcement tools at its disposal to collect from recalcitrant 
        obligors, the Department of the Treasury would greatly reduce 
        the need for judicial resources of the States that are now 
        devoted to child support enforcement.
            (10) This, in turn, would free up judicial resources to 
        focus on establishing paternity and support orders and lead to 
        a vastly improved child support enforcement system.
            (11) Moving child support enforcement responsibilities to 
        the Department of the Treasury will enhance the role of the 
        Federal judiciary and the Department of Justice in prosecuting 
        truly egregious cases of failure to pay child support.

SEC. 3. ASSIGNMENT TO INTERNAL REVENUE SERVICE OF RIGHT TO COLLECT 
              CHILD SUPPORT; AVAILABILITY OF CHILD SUPPORT INFORMATION 
              TO THE INTERNAL REVENUE SERVICE; NOTICE TO PARENTS OF 
              SUPPORT COLLECTION AND DISBURSEMENT OPTIONS.

    (a) Assignment to Internal Revenue Service of Right To Collect 
Child Support.--Section 466(a) of the Social Security Act (42 U.S.C. 
666(a)) is amended by inserting after paragraph (19) the following:
            ``(20) Procedures which--
                    ``(A) require any individual with the right to 
                collect child support pursuant to an order issued or 
                modified in the State (whether before or after the 
                effective date of this paragraph) to be presumed to 
                have assigned to the Internal Revenue Service the right 
                to collect such support, unless the individual 
                affirmatively elects to retain such right at any time; 
                and
                    ``(B) allow any individual who has made the 
                election referred to in subparagraph (A) to rescind or 
                revive such election at any time.''.
    (b) Transmission of Child Support Information to the Federal Case 
Registry of Child Support Orders.--
            (1) In general.--Section 466(a) of the Social Security Act 
        (42 U.S.C. 666(a)), as amended by subsection (a) of this 
        section, is amended by inserting after paragraph (20) the 
        following:
            ``(21)(A) Procedures which require any State court or 
        administrative agency that issues or modifies (or has issued or 
        modified) a child support order to transmit an abstract of the 
        order to the Federal Case Registry of Child Support Orders 
        established under section 453(h), on the later of--
                    ``(i) the date the order is issued or modified; or
                    ``(ii) the effective date of this paragraph.
            ``(B)(i) The abstract of a child support order shall 
        include a record of--
                    ``(I) the amount of monthly (or other periodic) 
                support owed under the order, and other amounts 
                (including arrearages, interest or late payment 
                penalties, and fees) due or overdue under the order;
                    ``(II) any amount described in subclause (I) that 
                has been collected by a State;
                    ``(III) the distribution by a State of such 
                collected amounts;
                    ``(IV) the birth date of any child for whom the 
                order requires the provision of support; and
                    ``(V) any action which has been taken to enforce 
                the order.
            ``(ii) The abstract of a child support order shall use 
        standardized data elements for both parents (such as names, 
        social security numbers and other uniform identification 
        numbers, dates of birth, and case identification numbers), and 
        contain such other information (such as on case status) as the 
        Secretary may require.
            ``(C) Such procedures shall require the State agency 
        administering the State program under this part to notify the 
        Federal Case Registry of Child Support Orders of any expiration 
        of any child support order an abstract of which has been 
        transmitted by the State pursuant to subparagraph (A).''.
            (2) Conforming amendment.--Section 453(h)(1) of such Act 
        (42 U.S.C. 653(h)(1)) is amended by striking ``abstracts of 
        support orders and other information described in paragraph (2) 
        with respect to each case in each State case registry 
        maintained pursuant to section 454A(e), as furnished (and 
        regularly updated), pursuant to section 454A(f), by State 
        agencies administering programs under this part'' and inserting 
        ``child support order abstracts transmitted pursuant to section 
        466(a)(21) and other information described in paragraph (2) 
        with respect to each case in the registry''.
    (c) Notice to Parents of Support Collection and Disbursement 
Options.--Section 466(a)(20) of the Social Security Act (42 U.S.C. 
666(a)(20)), as added by subsection (a) of this section, is amended--
            (1) by striking ``and'' at the end of subparagraph (A);
            (2) by striking the period at the end of subparagraph (B) 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(C) require that, at the time a suport order is 
                issued or modified in the State, the parties to the 
                order are provided with notice of how collection and 
                disbursement of support pursuant to the order will be 
                made if the election referred to in subparagraph (A) is 
                not made, and to whom to address any complaints or 
                questions regarding such collections or 
                disbursements.''.

SEC. 4. COLLECTION AND DISBURSEMENT OF CHILD SUPPORT BY INTERNAL 
              REVENUE SERVICE.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 
(relating to miscellaneous provisions) is amended by adding at the end 
thereof the following new sections:

``SEC. 7527. COLLECTION OF CHILD SUPPORT.

    ``(a) Employee To Notify Employer of Child Support Obligation.--
            ``(1) In general.--Each employee shall specify, on each 
        withholding certificate furnished to such employee's employer--
                    ``(A) the monthly amount (if any) of each child 
                support obligation of such employee, and
                    ``(B) the TIN of the individual to whom each such 
                obligation is owed.
            ``(2) When certificate filed.--In addition to the other 
        required times for filing a withholding certificate, a new 
        withholding certificate shall be filed within 30 days after the 
        date of any court or administrative order which changes the 
        information specified under paragraph (1).
            ``(3) Period certificate in effect.--Any specification 
        under paragraph (1) shall continue in effect until another 
        withholding certificate takes effect which specifies a change 
        in the information specified under paragraph (1).
            ``(4) Authority to specify smaller child support amount.--
        In the case of an employee who is employed by more than 1 
        employer for any period, such employee may specify less than 
        the monthly amount described in paragraph (1)(A) to each such 
        employer so long as the total of the amounts specified to all 
        such employers is not less than such monthly amount.
    ``(b) Certain Obligations Exempt.--This section shall not apply to 
a child support obligation for any month if the individual to whom such 
obligation is owed has so notified the Secretary and the individual 
owing such obligation more than 30 business days before the beginning 
of such month.
    ``(c) Employer Obligations.--
            ``(1) Requirement to deduct and withhold.--
                    ``(A) In general.--Every employer who receives a 
                certificate under subsection (a) that specifies that 
                the employee has a child support obligation for any 
                month shall deduct and withhold from the wages (as 
                defined in section 3401(a)) paid by such employer to 
                such employee during each month that such certificate 
                is in effect an additional amount equal to the amount 
                of such obligation or such other amount as may be 
                specified by the Secretary under subsection (d).
                    ``(B) Limitation on aggregate withholding.--In no 
                event shall an employer deduct and withhold under this 
                section from a payment of wages an amount in excess of 
                the amount of such payment which would be permitted to 
                be garnished under section 303(b) of the Consumer 
                Credit Protection Act.
            ``(2) Notice to secretary.--
                    ``(A) In general.--Every employer who receives a 
                withholding certificate shall, within 30 business days 
                after such receipt, submit a copy of such certificate 
                to the Secretary.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to any withholding certificate if--
                            ``(i) a previous withholding certificate is 
                        in effect with the employer, and
                            ``(ii) the information shown on the new 
                        certificate with respect to child support is 
                        the same as the information with respect to 
                        child support shown on the certificate in 
                        effect.
            ``(3) When withholding obligation takes effect.--Any 
        withholding obligation with respect to a child support 
        obligation of an employee shall commence with the first payment 
        of wages after the certificate is furnished.
    ``(d) Secretary To Verify Amount of Child Support Obligation.--
            ``(1) Verification of information specified on withholding 
        certificates.--Within 20 business days after receiving a 
        withholding certificate of any employee, or a notice from any 
        person claiming that an employee is delinquent in making any 
        payment pursuant to a child support obligation, the Secretary 
        shall determine whether the information available to the 
        Federal Case Registry of Child Support Orders established under 
        section 453(h) of the Social Security Act indicates that such 
        employee has a child support obligation.
            ``(2) Employer notified if increased withholding is 
        required.--If the Secretary determines that an employee's child 
        support obligation is greater than the amount (if any) shown on 
        the withholding certificate in effect with respect to such 
        employee, the Secretary shall, within 20 business days after 
        such determination, notify the employer to whom such 
        certificate was furnished of the correct amount of such 
        obligation, and such amount shall apply in lieu of the amount 
        (if any) specified by the employee with respect to payments of 
        wages by the employer after the date the employer receives such 
        notice.
            ``(3) Determination of correct amount.--In making the 
        determination under paragraph (2), the Secretary shall take 
        into account whether the employee is an employee of more than 1 
        employer and shall appropriately adjust the amount of the 
        required withholding from each such employer.
    ``(e) Child Support Obligations Required To Be Paid With Income Tax 
Return.--
            ``(1) In general.--The child support obligation of any 
        individual for months ending with or within any taxable year 
        shall be paid--
                    ``(A) not later than the last date (determined 
                without regard to extensions) prescribed for filing his 
                return of tax imposed by chapter 1 for such taxable 
                year, and
                    ``(B)(i) if such return is filed not later than 
                such date, with such return, or
                    ``(ii) in any case not described in clause (i), in 
                such manner as the Secretary may by regulations 
                prescribe.
            ``(2) Credit for amount previously paid.--The amount 
        required to be paid by an individual under paragraph (1) shall 
        be reduced by the sum of--
                    ``(A) the amount collected under this section with 
                respect to periods during the taxable year, plus
                    ``(B) the amount (if any) paid by such individual 
                under section 6654 by reason of subsection (f)(3) 
                thereof for such taxable year.
    ``(f) Failure To Pay Amount Owing.--
            ``(1) Collection authority.--If an individual fails to pay 
        the full amount required to be paid under subsection (e) on or 
        before the due date for such payment, the Secretary shall 
        assess and collect the unpaid amount in the same manner, with 
        the same powers, and subject to the same limitations applicable 
        to a tax imposed by subtitle C the collection of which would be 
        jeopardized by delay.
            ``(2) Shortfall in payments.--For purposes of paragraph (1) 
        and subsection (i), if the taxpayer would have a deficiency for 
        the taxable year were the amount required to be paid under 
        subsection (e) treated as tax imposed by chapter 1, such 
        deficiency shall be treated as attributable to a failure to pay 
        the full amount required to be paid under subsection (e) to the 
        extent thereof.
    ``(g) Credit or Refund for Withheld Child Support in Excess of 
Actual Obligation.--There shall be allowed as a credit against the 
taxes imposed by subtitle A for the taxable year an amount equal to the 
excess (if any) of--
            ``(1) the aggregate of the amounts described in 
        subparagraphs (A) and (B) of subsection (e)(2), over
            ``(2) the actual child support obligation of the taxpayer 
        for such taxable year.
The credit allowed by this subsection shall be treated for purposes of 
this title as allowed by subpart C of part IV of subchapter A of 
chapter 1.
    ``(h) Child Support Treated as Taxes.--
            ``(1) In general.--For purposes of penalties and interest 
        related to failure to deduct and withhold taxes, amounts 
        required to be deducted and withheld under this section shall 
        be treated as taxes imposed by chapter 24.
            ``(2) Other rules.--Rules similar to the rules of sections 
        3403, 3404, 3501, 3502, 3504, and 3505 shall apply with respect 
        to child support obligations required to be deducted and 
        withheld.
            ``(3) Special rule for collections.--For purposes of 
        collecting any unpaid amount which is required to be paid under 
        this section--
                    ``(A) paragraphs (4), (6), and (8) of section 
                6334(a) (relating to property exempt from levy) shall 
                not apply, and
                    ``(B) there shall be exempt from levy so much of 
                the salary, wages, or other income of an individual as 
                is being withheld therefrom in garnishment pursuant to 
                a judgment entered by a court of competent jurisdiction 
                for the support of his minor children.
    ``(i) Treatment of Arrearages Under Child Support Obligations Not 
Subject to Section for Prior Period.--If--
            ``(1) this section did not apply to any child support 
        obligation by reason of subsection (b) for any prior period, 
        and
            ``(2) there is a legally enforceable past-due amount under 
        such obligation for such period,
then such past-due amount (and any penalties and interest with respect 
to such amount as of the close of such period) shall be treated for 
purposes of this section as owed for the first month that this section 
applies to such obligation.
    ``(j) Definitions and Special Rules.--
            ``(1) Definitions.--For purposes of this section--
                    ``(A) Withholding certificate.--The term 
                `withholding certificate' means the withholding 
                exemption certificate used for purposes of chapter 24.
                    ``(B) Business day.--The term `business day' means 
                any day other than a Saturday, Sunday, or legal holiday 
                (as defined in section 7503).
            ``(2) Timely mailing.--Any notice under subsection (c)(2) 
        or (d)(2) which is delivered by United States mail shall be 
        treated as given on the date of the United States postmark 
        stamped on the cover in which such notice is mailed.
    ``(k) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section.''

``SEC. 7528. DISBURSEMENT OF CHILD SUPPORT COLLECTIONS.

    ``As soon as practicable after the Secretary receives an amount 
paid under section 7527 that is attributable to a child support 
obligation owed with respect to a family, the Secretary shall, using 
information in the Federal Case Registry of Child Support Orders 
established under section 453(h) of the Social Security Act, ascertain 
the identity of the family and distribute the amount as follows:
            ``(1) Families receiving assistance.--In the case of a 
        family receiving assistance from a State, the Secretary shall--
                    ``(A) pay to the State the State share of the 
                amount so collected; and
                    ``(B) retain, or distribute to the family, the 
                Federal share of the amount so collected.
        In no event shall the total of the amounts paid to the State 
        with respect to a family and the amounts retained by the 
        Federal Government with respect to the family, under this 
        paragraph, exceed the total of the amounts that have been paid 
        to the family as assistance by the State, except that the total 
        amount distributed to families under this paragraph during a 
        fiscal year shall not exceed the total of the amounts paid 
        under section 7527 during the fiscal year minus any credits 
        allowed under section 7527(g) during the fiscal year.
            ``(2) Families that formerly received assistance.--In the 
        case of a family that formerly received assistance from a 
        State:
                    ``(A) Current support payments.--To the extent that 
                the amount so collected does not exceed the amount 
                required to be paid to the family for the month in 
                which collected, the Secretary shall distribute the 
                amount so collected to the family.
                    ``(B) Payments of arrearages.--To the extent that 
                the amount so collected exceeds the amount required to 
                be paid to the family for the month in which collected, 
                the Secretary shall distribute the amount so collected 
as follows:
                            ``(i) Distribution of arrearages that 
                        accrued after the family ceased to receive 
                        assistance.--
                                    ``(I) Pre-effective date.--Except 
                                as provided in subclause (II), the 
                                provisions of this section (other than 
                                subsection (b)(1)) as in effect and 
                                applied on the day before the date of 
                                the enactment of section 302 of the 
                                Personal Responsibility and Work 
                                Opportunity Act Reconciliation of 1996 
                                shall apply with respect to the 
                                distribution of support arrearages 
                                that--
                                            ``(aa) accrued after the 
                                        family ceased to receive 
                                        assistance from the State, and
                                            ``(bb) are collected before 
                                        the 1st day of the 1st fiscal 
                                        year that begins after the 
                                        effective date of this section.
                                    ``(II) Post-effective date.--With 
                                respect to the amount so collected on 
                                or after the 1st day of the 1st fiscal 
                                year that begins after the effective 
                                date of this section:
                                            ``(aa) In general.--The 
                                        Secretary shall first 
                                        distribute the amount so 
                                        collected (other than any 
                                        amount described in clause 
                                        (iv)) to the family to the 
                                        extent necessary to satisfy any 
                                        support arrearages with respect 
                                        to the family that accrued 
                                        after the family ceased to 
                                        receive assistance from the 
                                        State.
                                            ``(bb) Reimbursement of 
                                        governments for assistance 
                                        provided to the family.--After 
                                        the application of division 
                                        (aa) and clause (ii)(II)(aa) 
                                        with respect to the amount so 
                                        collected, the Secretary shall 
                                        retain the Federal share of 
the amount so collected, and pay to the State the State share of the 
amount so collected, but only to the extent necessary to reimburse 
amounts paid to the family as assistance by the State.
                                            ``(cc) Distribution of the 
                                        remainder to the family.--To 
                                        the extent that neither 
                                        division (aa) nor division (bb) 
                                        applies to the amount so 
                                        collected, the Secretary shall 
                                        distribute the amount to the 
                                        family.
                            ``(ii) Distribution of arrearages that 
                        accrued before the family received 
                        assistance.--
                                    ``(I) Pre-effective date.--Except 
                                as provided in subclause (II), the 
                                provisions of this section (other than 
                                subsection (b)(1)) as in effect and 
                                applied on the day before the date of 
                                the enactment of section 302 of the 
                                Personal Responsibility and Work 
                                Opportunity Reconciliation Act of 1996 
                                shall apply with respect to the 
                                distribution of support arrearages 
                                that--
                                            ``(aa) accrued before the 
                                        family received assistance from 
                                        the State; and
                                            ``(bb) are collected before 
                                        the 1st day of the 1st fiscal 
                                        year that begins after the 
                                        effective date of this section.
                                    ``(II) Post-effective date.--With 
                                respect to the amount so collected on 
                                or after the 1st day of the 1st fiscal 
                                year that begins after the effective 
                                date of this section:
                                            ``(aa) In general.--The 
                                        Secretary shall first 
                                        distribute the amount so 
                                        collected (other than any 
                                        amount described in clause 
                                        (iv)) to the family to the 
                                        extent necessary to satisfy any 
                                        support arrearages with respect 
                                        to the family that accrued 
                                        before the family received 
                                        assistance from the State.
                                            ``(bb) Reimbursement of 
                                        governments for assistance 
                                        provided to the family.--After 
                                        the application of clause 
                                        (i)(II)(aa) and division (aa) 
                                        of this subclause with respect 
                                        to the amount so collected, the 
                                        Secretary shall retain the 
                                        Federal share of the amount so 
                                        collected, and pay to the State 
                                        the State share of the amount 
                                        so collected, but only to the 
                                        extent necessary to reimburse 
                                        amounts paid to the family as 
                                        assistance by the State.
                                            ``(cc) Distribution of the 
                                        remainder to the family.--To 
                                        the extent that neither 
                                        division (aa) nor division (bb) 
                                        applies to the amount so 
                                        collected, the Secretary shall 
                                        distribute the amount to the 
                                        family.
                            ``(iii) Distribution of arrearages that 
                        accrued while the family received assistance.--
                        In the case of a family described in this 
                        subparagraph, paragraph (1) shall apply with 
                        respect to the distribution of support 
                        arrearages that accrued while the family 
                        received assistance from the State.
                            ``(iv) Ordering rules for distributions.--
                        For purposes of this subparagraph, unless an 
                        earlier effective date is required by this 
                        section, effective October 1, 2000, the 
                        Secretary shall treat any support arrearages 
                        collected as accruing in the following order:
                                    ``(I) To the period after the 
                                family ceased to receive assistance 
                                from the State.
                                    ``(II) To the period before the 
                                family received assistance from the 
                                State.
                                    ``(III) To the period while the 
                                family was receiving assistance from 
                                the State.
            ``(3) Families that never received assistance.--In the case 
        of any other family, the Secretary shall distribute the amount 
        so collected to the family.
    ``(b) Definitions.--As used in this section:
            ``(1) Assistance.--The term `assistance' means, with 
        respect to a State--
                    ``(A) assistance under a State program funded under 
                part A of title IV of the Social Security Act; or
                    ``(B) foster care maintenance payments under a 
                State plan approved under part E of title IV of the 
                Social Security Act.
            ``(2) Federal share.--The term `Federal share' means that 
        portion of the amount collected resulting from the application 
        of the Federal medical assistance percentage in effect for the 
        fiscal year in which the amount is collected.
            ``(3) Federal medical assistance percentage.--The term 
        `Federal medical assistance percentage' means--
                    ``(A) the Federal medical assistance percentage (as 
                defined in section 1118 of the Social Security Act), in 
                the case of Puerto Rico, the Virgin Islands, Guam, and 
                American Samoa; or
                    ``(B) the Federal medical assistance percentage (as 
                defined in section 1905(b) of such Act, as in effect on 
                September 30, 1996) in the case of any other State.
            ``(4) State share.--The term `State share' means 100 
        percent minus the Federal share.''.
    (b) Withheld Child Support To Be Shown on W-2.--Subsection (a) of 
section 6051 of such Code is amended by striking ``and'' at the end of 
paragraph (10), by striking the period at the end of paragraph (11) and 
inserting ``, and'', and by inserting after paragraph (11) the 
following new paragraph:
            ``(12) the total amount deducted and withheld as a child 
        support obligation under section 7527(c).''
    (c) Application of Estimated Tax.--
            (1) In general.--Subsection (f) of section 6654 of such 
        Code (relating to failure by individual to pay estimated income 
        tax) is amended by striking ``minus'' at the end of paragraph 
        (2) and inserting ``plus'', by redesignating paragraph (3) as 
        paragraph (4), and by inserting after paragraph (2) the 
        following new paragraph:
            ``(3) the aggregate amount of the child support obligations 
        of the taxpayer for months ending with or within the taxable 
        year (other than such an obligation for any month for which 
        section 7527 does not apply to such obligation), minus''.
            (2) Paragraph (1) of section 6654(d) of such Code is 
        amended by adding at the end the following new subparagraph:
                    ``(D) Determination of required annual payment for 
                taxpayers required to pay child support.--In the case 
                of a taxpayer who is required under section 7527 to pay 
                a child support obligation (as defined in section 7527) 
                for any month ending with or within the taxable year, 
                the required annual payment shall be the sum of--
                            ``(i) the amount determined under 
                        subparagraph (B) without regard to subsection 
                        (f)(3), plus
                            ``(ii) the aggregate amount described in 
                        subsection (f)(3).''
            (3) Credit for withheld amounts, etc.--Subsection (g) of 
        section 6654 of such Code is amended by adding at the end the 
        following new paragraph:
            ``(3) Child support obligations.--For purposes of applying 
        this section, the amounts collected under section 7527 shall be 
        deemed to be a payment of the amount described in subsection 
        (f)(3) on the date such amounts were actually withheld or paid, 
        as the case may be.''
    (d) Penalty for False Information on Withholding Certificate.--
Section 7205 of such Code (relating to fraudulent withholding exemption 
certificate or failure to supply information) is amended by adding at 
the end the following new subsection:
    ``(c) Withholding of Child Support Obligations.--If any individual 
willfully makes a false statement under section 7527(a), then such 
individual shall, in addition to any other penalty provided by law, 
upon conviction thereof, be fined not more than $1,000, or imprisoned 
not more than 1 year, or both.''
    (e) New Withholding Certificate Required.--Not later than 90 days 
after the effective date of this Act, each employee who has a child 
support obligation to which section 7527 of the Internal Revenue Code 
of 1986 (as added by this section) applies shall furnish a new 
withholding certificate to each of such employee's employers. A 
certificate required under the preceding sentence shall be treated as 
required under such section 7527.
    (f) Repeal of Offset of Past-Due Support Against Overpayments.--
            (1) Section 6402 of such Code is amended by striking 
        subsections (c) and (h) and by redesignating subsections (d), 
        (e), (f), (g), and (i) as subsections (c), (d), (e), (f), and 
        (g), respectively.
            (2) Subsection (a) of section 6402 of such Code is amended 
        by striking ``subsections (c), (d), or (e)'' and inserting 
        ``subsection (c) or (d)''.
            (3) Subsection (c) of section 6402 of such Code (as 
        redesignated by paragraph (1)) is amended--
                    (A) by striking ``(other than past-due support 
                subject to the provisions of subsection (c))'' in 
                paragraph (1),
                    (B) by striking ``after such overpayment is reduced 
                pursuant to subsection (c) with respect to past-due 
                support collected pursuant to an assignment under 
                section 402(a)(26) of the Social Security Act and'' in 
                paragraph (2).
            (4) Subsection (d) of section 6402 of such Code is amended 
        by striking ``subsections (c) or (d)'' and inserting 
        ``subsection (c)''.
            (5) Subsection (e) of section 6402 of such Code (as 
        redesignated by paragraph (1)) is amended by striking ``or 
        (d)''.
    (g) Repeal of Collection of Past-Due Support.--Section 6305 of such 
Code is hereby repealed.
    (h) Clerical Amendments.--
            (1) The table of sections for subchapter A of chapter 64 of 
        such Code is amended by striking the item relating to section 
        6305.
            (2) The table of sections for chapter 77 of such Code is 
        amended by adding at the end thereof the following new item:

                              ``Sec. 7527. Collection of child support.
                              ``Sec. 7528. Disbursement of child 
                                        support collections.''
    (i) Use of Parent Locator Service.--Section 453(a) of the Social 
Security Act (42 U.S.C. 653(a)) is amended by inserting ``or the 
Internal Revenue Service'' before ``information as''.

SEC. 5. ELIMINATION OF PROVISIONS OF LAW RELATING TO STATE ENFORCEMENT 
              OF CHILD SUPPORT OBLIGATIONS OTHER THAN MEDICAL SUPPORT 
              OBLIGATIONS.

    (a) Amendment of the Social Security Act.--Except as otherwise 
expressly provided, wherever in this section an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Social Security Act.
    (b) Amendments to Section 451.--Section 451 (42 U.S.C. 651) is 
amended--
            (1) by inserting ``medical'' before ``support 
        obligations'';
            (2) by striking ``obtaining child and spousal support'' and 
        inserting ``establishing child and spousal support 
        obligations''; and
            (3) by striking ``obtaining support'' and inserting 
        ``establishing such obligations and obtaining medical 
        support''.
    (c) Amendments to Section 452.--Section 452 (42 U.S.C. 652) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``obtaining child 
                support and support for the spouse (or former spouse) 
                with whom the noncustodial parent's child is living'' 
                and inserting ``establishing child and spousal support 
                obligations of noncustodial parents and obtaining 
                medical support from noncustodial parents'';
                    (B) in paragraph (4)--
                            (i) in subparagraph (A)--
                                    (I) by striking ``454(15)(B)'' and 
                                inserting ``454(11)(B)''; and
                                    (II) by striking ``and section 
                                458'';
                            (ii) in subparagraph (B), by striking 
                        ``454(15)(A)'' and inserting ``454(11)(A)''; 
                        and
                            (iii) in subparagraph (C)--
                                    (I) in clause (i), by striking 
                                ``subsection (g) of this section and 
                                section 458'' and inserting 
                                ``subsection (e) of this section''; and
                                    (II) in clause (ii), by striking 
                                ``--'' and all that follows and 
                                inserting ``whether Federal and other 
                                funds made available to carry out the 
                                State program are being appropriately 
                                expended, and are properly and fully 
                                accounted for;''
                    (C) in paragraph (7), by striking ``collecting 
                child and spousal support'' and inserting 
                ``establishing child and spousal support obligations 
                and collecting child and spousal medical support'';
                    (D) in paragraph (8)--
                            (i) by inserting ``the medical support 
                        requirements of'' before ``court'' the 1st 
                        place such term appears; and
                            (ii) by inserting ``medical support 
                        requirements of'' before ``court'' the 2nd 
                        place such term appears; and
                            (iii) by striking ``such order'' and 
                        inserting ``such requirements'';
                    (E) in paragraph (10)--
                            (i) by striking ``, but not be limited to'' 
                        and all that follows through the end of 
                        subparagraph (A) and inserting ``include--
                    ``(A) total program costs set forth in sufficient 
                detail to show the cost to the States and the Federal 
                Government, and an identification of the financial 
                impact of this part;'';
                            (ii) in subparagraph (C)--
                                    (I) in the matter preceding clause 
                                (i), by striking ``collect support'' 
                                and insert ``receive support'';
                                    (II) in clause (iii), by striking 
                                ``support was collected'' and inserting 
                                ``medical support was provided''; and
                                    (III) by striking clauses (iv) 
                                through (vii) and inserting the 
                                following:
                            ``(iv) the total amount of medical support 
                        provided as a result of State action;''; and
                            ``(v) the number of child support cases 
                        filed in each State in the fiscal year;''; and
                            (iii) in subparagraph (G)--
                                    (I) by striking ``and on use of the 
                                Internal Revenue Service for 
                                collections'' and inserting ``to obtain 
                                medical support''; and
                                    (II) by striking ``on which 
                                collections were made'' and inserting 
                                ``with respect to which medical support 
                                was provided''; and
                    (F) by striking paragraph (6) and redesignating 
                paragraphs (7) through (11) as paragraphs (6) through 
                (10), respectively;
            (2) in subsections (d) and (e), by striking ``454(16)'' 
        each place such term appears and inserting ``454(12)'';
            (3) in subsection (h)--
                    (A) by striking ``and enforcing support orders'' 
                and inserting ``support orders and enforcing the 
                medical support requirements of such orders''; and
                    (B) by striking ``and collect child support 
                awards'' and inserting ``child support orders and 
                obtain medical support under such orders'';
            (4) effective October 1, 1997, in subsection (k), by 
        striking ``454(31)'' and inserting ``454(24)''; and
            (5) by striking subsections (b), (c), and (i) and 
        redesignating subsections (d) through (h), (j), and (effective 
        October 1, 1997) (k) as subsections (b) through (h), 
        respectively.
    (d) Amendment to Section 453.--Section 453(b) (42 U.S.C. 653(b)) is 
amended by striking ``454(26)'' and inserting ``454(18)''.
    (e) Amendments to Section 454.--Section 454 (42 U.S.C. 654) is 
amended--
            (1) by striking paragraph (4) and inserting the following:
            ``(4) provide that the State will provide services relating 
        to the establishment of paternity or the establishment or 
        modification of child support obligations, or the enforcement 
        of the medical support provisions of such obligations, as 
        appropriate, under the State plan with respect to--
                    ``(A) each child for whom (i) assistance is 
                provided under the State program funded under part A of 
                this title, (ii) benefits or services for foster care 
                maintenance are provided under the State program funded 
                under part E of this title, (iii) medical assistance is 
                provided under the State plan approved under title XIX, 
                or (iv) cooperation is required pursuant to section 
                6(l) of the Food Stamp Act of 1977 (7 U.S.C. 2015(l)), 
                unless, in accordance with paragraph (21), good cause 
                or other exceptions exist; and
                    ``(B) any other child, if an individual applies for 
                such services with respect to the child;'';
            (2) in paragraph (6), by striking subparagraph (C) and 
        redesignating subparagraphs (D) and (E) as subparagraphs (C) 
        and (D), respectively;
            (3) in paragraph (9)--
                    (A) in subparagraph (E), by striking ``452(a)(11) 
                for income withholding, imposition of liens, and'' and 
                inserting ``452(a)(10) for''; and
                    (B) by striking subparagraph (C) and redesignating 
                subparagraphs (D) and (E) as subparagraphs (C) and (D), 
                respectively;
            (4) in paragraph (13), by striking ``collecting support 
        payments'' and inserting ``obtaining medical support pursuant 
        to such orders'';
            (5) in paragraph (15)(B)--
                    (A) by striking ``(16)'' and inserting ``(12)''; 
                and
                    (B) by striking ``sections 452(g) and 458'' and 
                inserting ``section 452(e)'';
            (6) in paragraph (16)--
                    (A) by striking ``452(d)'' and inserting 
                ``452(b)''; and
                    (B) by inserting ``medical'' before ``support 
                enforcement'';
            (7) in paragraph (19), by inserting ``medical'' before 
        ``support'' each place such term appears;
            (8) in paragraph (21)(A), by striking ``466(e)'' and 
        inserting ``466(c)'';
            (9) in paragraph (23), by striking ``enforcement'';
            (10) in paragraph (25), by striking ``(6)(B)'' and 
        inserting ``(5)(B)'';
            (11) in paragraph (29), by striking ``, modifying, or 
        enforcing'' and inserting ``or modifying'';
            (12) in paragraph (31)--
                    (A) by striking ``452(k)'' and inserting 
                ``452(h)''; and
                    (B) by adding ``and'' at the end;
            (13) by striking ``and'' at the end of paragraph (32) and 
        inserting a period; and
            (14) by striking paragraphs (5), (10), (11), (18), (21), 
        (22), (27), and (33), and the last sentence, and redesignating 
        paragraphs (6), (7), (8), (9), (13), (14), (15), (16), (17), 
        (19), (20), (23), (24), (25), (26), (27), (28), (29), (30), 
        (31), and (32) as paragraphs (5) through (25), respectively.
    (f) Amendments to Section 454A.--Section 454A (42 U.S.C. 654a) is 
amended--
            (1) in subsection (c)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``incentive payments and penalty adjustments 
                under sections 452(g) and 458'' and inserting ``penalty 
                adjustments under section 452(e)''; and
                    (B) in paragraph (1)(A), by striking ``and child 
                support enforcement'';
            (2) by striking subsections (e) and (g);
            (3) in subsection (f), by striking paragraph (1) and 
        redesignating paragraphs (2), (3), and (4) as paragraphs (1), 
        (2), and (3), respectively;
            (4) in subsection (h), by striking ``466(c)'' and inserting 
        ``466(b)''; and
            (5) by redesignating subsections (f) and (h) as subsections 
        (e) and (f), respectively.
    (g) Repeal of Section 454B.--Section 454B (42 U.S.C. 654b) is 
repealed.
    (h) Amendments to Section 455.--Section 455 (42 U.S.C. 655) is 
amended--
            (1) in subsection (a)(3), by striking ``454(16)'' each 
        place such term appears and inserting ``454(12)'';
            (2) in subsection (d), by striking ``the amount of child 
        support collected and disbursed and''; and
            (3) by striking subsection (e) and (b) (as added by section 
        375(b) of the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996).
    (i) Amendments to Section 456.--Section 456(a) (42 U.S.C. 656(a)) 
is amended--
            (1) in paragraph (1), by striking the 2nd sentence;
            (2) in paragraph (2), by striking ``, and'' at the end and 
        inserting a period; and
            (3) in paragraph (3), by striking ``amounts'' and inserting 
        ``medical support''.
    (j) Repeal of Sections 457 and 458.--Sections 457 and 458 (42 
U.S.C. 657 and 658) are repealed.
    (k) Repeal of Section Providing New Incentive Payments to States.--
            (1) If this section becomes law before October 1, 1999, 
        then section 201 of the Child Support Performance and Incentive 
        Act of 1998 is repealed.
            (2) If this section becomes law on or after October 1, 
        1999, then section 458A of the Social Security Act is repealed.
    (l) Amendments to New Section 459.--Section 459 (42 U.S.C. 659) is 
amended--
            (1) in subsection (a), by striking ``enacted pursuant to 
        subsections (a)(1) and (b) of section 466 and regulations of 
        the Secretary under such subsections,'';
            (2) in subsection (b), by striking ``subsections (a)(1) and 
        (b) of section 466'' and inserting ``State law'';
            (3) in subsection (c)(2)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``subsections (a)(1) and (b) of section 466'' 
                and inserting ``State law''; and
                    (B) in subparagraph (B), by striking ``section 
                466'' and inserting ``State law''; and
            (4) in subsection (d), by striking ``--'' and all that 
        follows through ``and (2)'' and inserting ``, such moneys''.
    (m) Amendment to Section 460.--Section 460 (42 U.S.C. 660) is 
amended by striking ``452(a)(8)'' and inserting ``452(a)(7)''.
    (n) Repeal of Section 464.--Section 464 (42 U.S.C. 664) is 
repealed.
    (o) Amendments to Section 466.--Section 466 (42 U.S.C. 666) is 
amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``454(20)(A)'' and inserting ``454(15)(A)'';
                    (B) in paragraph (2)--
                            (i) in the 1st sentence--
                                    (I) by striking ``(c)'' and 
                                inserting ``(b)''; and
                                    (II) by striking ``establishing, 
                                modifying, and enforcing'' and 
                                inserting ``establishing and modifying 
                                support obligations and enforcing 
                                medical''; and
                            (ii) in the 2nd sentence--
                                    (I) by inserting ``of medical 
                                support obligations'' after 
                                ``enforcement''; and
                                    (II) by striking ``(d)'' and 
                                inserting ``(c)'';
                    (C) in paragraph (5)--
                            (i) in subparagraph (B)(i), by striking 
                        ``454(29)'' and inserting ``454(22)''; and
                            (ii) in subparagraph (C)(iv), by striking 
                        ``452(a)(7)'' and inserting ``452(a)(6)'';
                    (D) in paragraph (9), by striking ``(2)'' and 
                inserting ``(1)'';
                    (E) in paragraph (19), by striking ``enforced'' and 
                inserting ``with respect to which services are 
                requested'';
                    (F) in the matter following paragraph (19)--
                            (i) by striking ``454(20)(B)'' and 
                        inserting ``454(15)(B)''; and
                            (ii) by striking ``paragraphs (3), (4), 
                        (6), (7), and (15)'' and inserting ``paragraph 
                        (15)''; and
                    (G) by striking paragraphs (1), (3), (4), (6), (7), 
                (8), (14), and (17) and redesignating paragraphs (2), 
                (5), (9), (10), (11), (12), (13), (15) through (19), 
                (20) (as added by section 3(a) of this Act), and (21) 
                (as added by section 3(b)(1) of this Act) as paragraphs 
                (1) through (14), respectively;
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) in the matter preceding subparagraph 
                        (A), by striking ``establishment, modification, 
                        or enforcement'' and inserting ``establishment 
                        or modification of support orders, or 
                        enforcement of the medical support provisions 
                        of such orders'';
                            (ii) in subparagraph (A), by striking 
                        ``466(a)(5)'' and inserting ``466(a)(2)'';
                            (iii) in subparagraph (D)(ii), by striking 
                        ``--'' and all that follows through ``(II)''; 
                        and
                            (iv) by striking subparagraphs (B), (E), 
                        (F), and (G) and redesignating subparagraphs 
                        (C), (D), and (H) as subparagraphs (B), (C), 
                        and (D), respectively; and
                    (B) in paragraph (2)--
                            (i) by striking ``(a)(2)'' and inserting 
                        ``(a)(1)''; and
                            (ii) by striking ``establish, modify, or 
                        enforce support orders'' and inserting 
                        ``establish or modify support orders or enforce 
                        the medical support provisions of such 
                        orders'';
            (3) in subsection (d)--
                    (A) by inserting ``medical'' before ``support''; 
                and
                    (B) by striking ``enforcement'';
            (4) in subsection (e), by inserting ``medical'' after ``to 
        include'';
            (5) in subsection (f), by inserting ``but shall not have in 
        effect any provision of Article 5 or 6 of such Act, including 
        any such amendments'' before the period;
            (6) in subsection (g), by striking ``454(20)(A)'' and 
        inserting ``454(15)(A)''; and
            (7) by striking subsection (b) and redesignating 
        subsections (c) through (g) as subsections (b) through (f), 
        respectively.
    (p) Amendment to Section 468.--Section 468 (42 U.S.C. 668) is 
amended by striking ``enforcement''.
    (q) Amendments to Section 469.--Section 469 (42 U.S.C. 669) is 
amended--
            (1) in the section heading, by striking ``enforcement'';
            (2) in subsection (a)(1), by striking ``enforcement''; and
            (3) in subsection (b)(4), by inserting ``the medical 
        support provisions of'' before ``an established''.
    (r) Amendments to Section 469A.--Section 469A (42 U.S.C. 669a) is 
amended--
            (1) in subsection (a), by striking ``enforcement''; and
            (2) in subsection (b)--
                    (A) in the heading, by striking ``Enforcement''; 
                and
                    (B) by striking ``establishing, modifying, or 
                enforcing a child support obligation'' and inserting 
                ``establishing or modifying a child support obligation 
                or enforcing the medical support provisions of such an 
                obligation''.
    (s) Amendments to the Balanced Budget and Emergency Deficit Control 
Act of 1985.--Section 256(f) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 (2 U.S.C. 906(f)) is amended--
            (1) in the heading, by striking ``Enforcement''; and
            (2) by striking ``sections 455 and 458'' and inserting 
        ``section 455''.
    (t) Amendment to Title 5, United States Code.--Section 
552a(a)(8)(B)(iv)(III) of title 5, United States Code, as amended by 
section 110(w) of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996, is amended by striking ``, 464,''.
    (u) Amendment to Title 10, United States Code.--Section 1408(d)(1) 
of title 10, United States Code, is amended in the 1st sentence by 
striking ``State disbursement unit established pursuant to section 454B 
of the Social Security Act or other''.

SEC. 6. CRIMINAL PENALTIES FOR WILLFUL FAILURE TO PAY CHILD SUPPORT 
              REQUIRED TO BE PAID TO THE INTERNAL REVENUE SERVICE.

    Section 228 of title 18, United States Code, is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Offense.--Any person who willfully fails to pay Federal 
income tax owed by reason of section 7527 of the Internal Revenue Code 
of 1986, if the underlying support obligation has remained unpaid for a 
period longer than 2 years, or is greater than $10,000, shall be 
punished as provided in subsection (c).''; and
            (2) in subsection (c)--
                    (A) in paragraph (1), by striking ``(a)(1)'' and 
                inserting ``(a)''; and
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) in the case of a second or subsequent offense under 
        subsection (a), a fine under this title, imprisonment for not 
        more than 2 years, or both.''.

SEC. 7. IMPLEMENTATION PLAN.

    Not later than 6 months after the date of the enactment of this 
Act, the Secretary of the Treasury shall submit to the Congress a plan 
for implementing the amendments made by this Act.

SEC. 8. PROSECUTION AND JUDICIAL IMPACT STUDY.

    Not later than 1 year after the date of the enactment of this Act, 
the Attorney General shall submit to the Committee on the Judiciary of 
the House of Representatives and the Committee on the Judiciary of the 
Senate a study which details the impact the amendments made by this Act 
have had on the Department of Justice and the Federal courts, including 
on workload, personnel staffing, and budget resources.

SEC. 9. EFFECTIVE DATE.

    The amendments and repeals made by this Act shall take effect on 
the 1st day of the 1st calendar month that begins after the 2-year 
period that begins with the date of the enactment of this Act.
                                 <all>