[Congressional Record Volume 144, Number 41 (Thursday, April 2, 1998)]
[Senate]
[Pages S3183-S3185]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          CHILD SUPPORT PERFORMANCE AND INCENTIVE ACT OF 1998

  Ms. COLLINS. I ask unanimous consent that the Finance Committee be 
discharged from further consideration of H.R. 3130, and, further, that 
the Senate proceed to its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       A bill (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, to provide 
     for a more flexible penalty procedure for States that violate 
     interjurisdicational adoption requirements, to amend the 
     Immigration and Nationality Act to make certain aliens 
     determined to be delinquent in the payment of child support 
     inadmissible and ineligible for naturalization, and for other 
     purposes.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the bill.


                           amendment no. 2286

  Ms. COLLINS. Senator Roth has a substitute amendment at desk and I 
ask for its consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Maine [Ms. Collins], for Mr. Roth, 
     proposes an amendment numbered 2286.

  Ms. COLLINS. I ask unanimous consent that the reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Ms. COLLINS. I ask unanimous consent that the amendment be agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 2286) was agreed to.
  Mr. ROTH. Mr. President, on behalf of the Finance Committee, I am 
joining with Senator Moynihan and others today to bring H.R. 3130, the 
Child Support Performance and Incentive Act of 1998, before the Senate. 
This important bill passed the House of Representatives earlier this 
month by a vote of 414 to 1.
  When a bill passes the House by that wide of a margin, it is either 
noncontroversial, of limited national significance, or an extremely 
important piece of legislation with broad and deep support. H.R. 3130 
clearly falls within this last category.
  The work on this legislation began shortly after the ``Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996'' was 
signed into law. The 1996 welfare reform act required the Secretary of 
Health and Human Services to recommend to Congress a new, budget-
neutral performance-based incentive system for the child support 
enforcement program. H.R. 3130 incorporates those recommendations which 
were developed in consultation with 26 representatives of state and 
local child support enforcement systems. The new incentive program is 
the centerpiece of this bill.
  Under current law, the Federal Government returns more than $400 
million per year in child support collections to the states as 
incentive payments. But this incentive structure has been criticized 
for years as weak and inadequate. All States, regardless of actual 
performance, receive some incentive payments. But for more than a 
decade, performance has not been tied to the national goals of the 
program.
  H.R. 3130 breaks with the past and creates five categories in which 
state performance will be evaluated and rewarded.
  The States will be measured according to their performance in 
paternity establishment, establishment of court orders, collections of 
current child support payments, collections on past due payments, and 
cost effectiveness.
  The legislation also requires the Secretary of Health and Human 
Services to make a future recommendation on adding another performance 
measure on medical support orders. Let me particularly thank Senator 
Rockefeller for his work in designing a strategy to overcome the 
inherent barriers to medical support orders.
  The new incentive structure is an important development not only for 
the child support enforcement system but also as a model for improving 
accountability and performance in government.
  The second important feature of this bill is to provide for an 
alternative penalty procedure for those states that have failed to meet 
federal child support data processing requirements. Less than half of 
the States have been certified as in compliance. Without this change, 
states face not only the loss of their entire child support grant, but 
all of their funds in the Temporary Assistance for Needy Families 
program as well.

[[Page S3184]]

  Such a result would obviously be crippling to a state and would 
ultimately hurt the very families these programs are intended to help.
  Under the new alternative penalty procedures, those states which will 
not come into compliance this year will face a penalty of four percent 
of their child support funds.
  This penalty would double each year in the following two years and 
would reach 30 percent in the fourth year a state failed to come into 
compliance. These penalties are tough but fair.
  Under the Finance amendment, states will not face a penalty in the 
year in which they come into compliance. And states which come into 
compliance with the first two years after penalties have been imposed 
can have the penalty from the prior year reduced.
  H.R. 3130 also provides additional flexibility to the states in how 
they design their automated systems.
  In looking back over the history of automation, we find there were a 
number of mistakes made at both the federal and state levels which 
contributed to the delay in getting these systems operational. The 
child support enforcement system is a prime example of what can happen 
when regulations fail to keep pace with real world practices.
  H.R. 3130 recognizes the advances in technologies and allows states 
to take advantage of these improvements. It properly refocuses federal 
policy on function and results rather than on rigid rules.
  All of these changes will work together to get the states in 
compliance as quickly as possible. This will mean the child support 
enforcement system will work better for the families who depend on 
child support.
  H.R. 3130 also makes a correction in how penalties are applied under 
the new ``Adoption and Safe Families Act of 1997'' which became law 
last November. It is vitally important that the states be held 
accountable for assisting the children in foster care.
  A child should not be denied the opportunity to be adopted into a 
loving and caring family simply because the prospective parents live in 
the next county.
  When the Department of Health and Human Services issues regulations 
on how the new penalties are enforced, it should, of course, provide 
the states with the opportunity to present evidence of how it complies 
with the new law. The review of this new requirement must be a fair and 
complete assessment of whether the law is being met.
  Mr. President, this is indeed an important, bipartisan bill which 
will prove itself to pay dividends for America's families. I urge its 
adoption.
  I ask unanimous consent a summary be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Summary of H.R. 3130, ``The Child Support Performance and Incentive Act 
            of 1998'' With Senate Modifications, March 1998


                 Title I: Alternative Penalty Procedure

       Eligibility for alternative penalty. A state which is not 
     in compliance with federal data processing requirements may 
     enter into a corrective compliance plan with the Secretary of 
     Health and Human Services. The plan must describe how, by 
     when, and at what cost the state will achieve compliance. For 
     failing to achieve compliance, a state would be penalized 4 
     percent of its federal administrative grant under the Title 
     IV-D program beginning in FY 1998. The penalty will increase 
     to 8 percent for the second year of noncompliance; 16 percent 
     for the third year; and 30 percent for the fourth year and 
     each subsequent year. A state is subject to a single 
     reduction in a fiscal year.
       Penalty waiver. A state is not penalized in the fiscal year 
     in which it achieves compliance. A state will not be subject 
     to a higher penalty as a result of a delay by HHS to conduct 
     a review.
       Penalty forgiveness. In the first two year period in which 
     a penalty is applied, HHS shall reduce the penalty from the 
     immediately preceding year when compliance is achieved. For 
     example, the 4 percent penalty for FY 1998 will be reduced by 
     20 percent if compliance is achieved in FY 1999. The 8 
     percent penalty for 1999 will be reduced by 20 percent if 
     compliance is achieved in FY 2000. There is no forgiveness 
     for the previous year after the second year.
       Penalty reduction for good performance. In the case of the 
     1996 welfare reform requirements, a state which fails to 
     comply in a fiscal year could have its penalty for that year 
     reduced by 20 percent for each performance measure under the 
     new incentive system provided in Title II for which it 
     achieves its maximum score.
       Expansion of waiver provision. The authority of the 
     Secretary to waive certain data processing requirements and 
     to provide federal funding for a wider range of state data 
     systems activities would be expanded to include waiving the 
     single statewide system requirement under certain 
     conditions and providing federal funds to develop and 
     enhance local systems which are linked to state systems. 
     To qualify, a state would have to demonstrate that it can 
     develop an alternative system that: can help the state 
     meet the paternity establishment requirement and other 
     performance measures; can submit required data to HHS that 
     is complete and reliable; substantially complies with all 
     requirements of the child support enforcement program; 
     achieves all the functional capacity for automatic data 
     processing outlined in the statute; meets the requirements 
     for distributing collections to families and governments, 
     including cases in which support is owed to more than one 
     family or more than one government; has only one point of 
     contact for both interstate cases (which provides seamless 
     case processing) and intrastate case management; is based 
     on standardized data elements, forms, and definitions that 
     are used throughout the state; can be operational in no 
     more time than it would take to achieve an operational 
     single statewide system; and can process child support 
     cases as quickly, efficiently, and effectively as would be 
     possible with a single statewide system.
       Federal payments under waiver. In addition to the various 
     waiver requirements described above, and to the requirements 
     in current law, the state would have to submit to the 
     Secretary separate estimates of the costs to develop and 
     implement a single statewide system and the alternative 
     system being proposed by the state plus the costs of 
     operating and maintaining these systems for five years from 
     the date of implementation. The Secretary would have to agree 
     with the estimates. If a state elects to operate such an 
     alternative system, the state would be paid the 66 percent 
     federal administration reimbursement only on expenditures 
     that did not exceed the estimated cost of the single 
     statewide system.


                TITLE II. Child Support Incentive System

       Amount of incentive payments. The incentive payment for a 
     state for a given year would be calculated by multiplying the 
     incentive payment pool for the year by the state's share for 
     the year. The incentive payment pool would be:

     FY 2000: $422 million
     FY 2001: $429 million
     FY 2002: $450 million
     FY 2003: $461 million
     FY 2004: $454 million
     FY 2005: $446 million
     FY 2006: $458 million
     FY 2007: $471 million
     FY 2008: $483 million
       After 2008, the incentive payment pool would increase each 
     year by the inflation rate.
       Performance measures. The incentive payments would be based 
     on five performance measures: paternity establishment, 
     establishment of support orders, collections on current 
     payments, collections on past due payments (arrearages), and 
     cost effectiveness.
       Treatment of interstate collections. In computing incentive 
     payments, supported collected by the state at the request of 
     another state would be treated as having been collected by 
     both states.
       Regulations. The Secretary would be required to prescribe 
     regulations necessary to implement the incentive payment 
     program within nine months of the date of enactment.
       Reinvestment. States would be required to spend child 
     support incentive payments to carry out their child support 
     enforcement program or to conduct activities approved by the 
     Secretary which may contribute to improving the effectiveness 
     or efficiency of the state child support enforcement program. 
     In so doing, states would have to supplement and not supplant 
     other funds used by the state to conduct its child support 
     enforcement program.
       Transition rule. The new incentive program would be phased 
     in over two years beginning in FY 2000. In FY 2000, \1/3\ of 
     each state's incentive payment would be based on the new 
     incentive system and \2/3\ on the old system. In FY 2001, \2/
     3\ of the payment will be based on the new system; and in 
     2002, the incentive payment will be based entirely on the new 
     system.
       General effective date. Except for the elimination of the 
     current incentive program, the amendments would take 
     effect on October 1, 1999.


                     Title III: Adoption Provisions

       More flexible penalty procedure to be applied for failing 
     to permit interjurisdictional adoption. Under the ``Adoption 
     and Safe Families Act of 1997, a state is at risk of losing 
     its entire IV-E grant for violating the new requirements on 
     interjurisdictional adoptions. This provision allows the 
     states to enter into a corrective compliance plan and reduces 
     the penalty to 2 percent for the first violation, 3 percent 
     for the second violation, and 5 percent for the third and 
     subsequent violations.


                   Title IV: Miscellaneous Provisions

       Elimination of barriers to the effective establishment and 
     enforcement of medical child support. This provision is 
     intended to eliminate the existing barriers to effective 
     enforcement of medical support in three ways.

[[Page S3185]]

     First, it requires the Secretaries of HHS and Labor to design 
     and implement a Standardized Medical Support Notice. State 
     child support agencies will be required to use this 
     standardized form to communicate the issuance of a medical 
     support order, and employers will be required to accept the 
     form as a ``Qualified Medical Support Order'' under ERISA. 
     Second, the Secretaries will jointly establish a medical 
     support working group to identify and make recommendations 
     for the removal of other barriers to effective medical 
     support. Third, the Secretary of Labor is required to submit 
     a report containing recommendations for any additional ERISA 
     changes necessary to improve medical support enforcement.
       Safeguard of new employee information. This provision 
     imposes a fine of $1,000 for each act of unauthorized access 
     to, disclosure of, or use of information in the National 
     Directory of New Hires. It also requires that data entered 
     into the National Director of New Hires be deleted 24 months 
     after date of entry for individuals who have a child support 
     order. For an individual who does not have a child support 
     order, the data must be deleted after 12 months.
       General Accounting Office study on program improvements. 
     The General Accounting Office (GAO) is required to report to 
     Congress on the feasibility of implementing an instant check 
     system for employers to use in identifying individuals with 
     child support orders. The report is also to include a review 
     of the use of the Federal Parent Locater Service, 
     including the Federal Case Registry of Child Support 
     Orders and the National Directory of New Hires, and the 
     adequacy of privacy protections.
       Technical and conforming amendments. There are several 
     technical and conforming amendments made. The two most 
     noteworthy amendments deal with data collection in the 
     calculation of the adopting incentive payments and collection 
     of Social Security numbers and are described below.
       (1) The new provision would give the states an additional 
     five months to report data needed to calculate adoption 
     incentive payments and the Secretary an additional four 
     months to approve the data.
       (2) The 1996 welfare reform law requires states to collect 
     Social Security numbers on applications for state licenses 
     for purposes of matching in child support cases by January 1, 
     1998. The ``Illegal Immigration Reform and Immigration 
     Responsibility Act of 1996'' required states to collect 
     Social Security numbers on applications for state licenses 
     for purposes of checking the identity of immigrants by 
     October 1, 2000. This amendment would conform the differing 
     requirements by changing the date for child support cases to 
     October 1, 2000, or such earlier date as the state selects.
       Title V of the House bill regarding immigration provisions 
     is not included in the substitute.


                comparison of senate and house penalties

       Example of a state with $100 million IV-D grant:
       1. Penalties faced if compliance is achieved in 1998: (Year 
     1) (Assumes did not submit December 31, 1997 letter to HHS).

                                 House

     FY 1998: $1 million ($4 million reduced by 75%)
       Total: $1 million

                                 Senate

     FY 1998: $0
       Total: $0

       2. Penalties faced if compliance is achieved in 1999: (Year 
     2).

                                 House

     FY 1998: $4 million
     FY 1999: $2 million ($8 million reduced by 75%)
       Total: $6 million

                                 Senate

     FY 1998: $3.2 million ($4 million reduced by 20%)
     FY 1999: $0
       Total: $3.2 million

       3. Penalties faced if compliance is achieved in FY 2000: 
     (Year 3).

                                 House

     FY 1998: $4 million
     FY 1999: $8 million
     FY 2000: $4 million ($16 million reduced by 75%)
       Total: $16 million

                                 Senate

     FY 1998: $4 million
     FY 1999: $6.4 million ($8 million reduced by 20%)
     FY 2000: $0
       Total: $10.4 million

       4. Penalties faced if compliance is achieved in 2001: (Year 
     4).

                                 House

     FY 1998: $4 million
     FY 1999: $8 million
     FY 2000: $16 million
     FY 2001: $5 million ($20 million reduced by 75%)
       Total: $33 million

                                 Senate

     FY 1998: $4 million
     FY 1999: $8 million
     FY 2000: $16 million
     FY 2001: $0
       Total: $26 million

       5. Penalties faced if compliance is achieved in 2002: (Year 
     5).

                                 House

     FY 1998: $4 million
     FY 1999: $8 million
     FY 2000: $16 million
     FY 2001: $20 million
     FY 2002: $5 million ($20 million reduced by 75%)
       Total: $53 million

                                 Senate

     FY 1998: $4 million
     FY 1999: $8 million
     FY 2000: $16 million
     FY 2001: $30 million
     FY 2002: $0
       Total: $58 million


                     adoption and safe families act

  Mr. COATS. Mr. President, I note that the ``Child Support Performance 
and Incentive Act of 1998'' contains a provision which amends the 
``Adoption and Safe Families Act of 1997.'' This provision deals with 
how the provision on elimination of geographic barriers to adoption is 
enforced. It is my understanding that this amendment does not affect 
the other provisions in the new law on reasonable efforts or the 
termination of parental rights.
  It is my understanding that the purpose of the new law was to clarify 
federal policy regarding the protection of children in foster care. The 
adoption law makes clear that the health and safety of children must 
always be of paramount concern in any decision affecting the removal of 
children from their homes or the reunification of children with their 
families.
  To receive foster care and adoption assistance funds, States are 
generally required to make reasonable efforts to maintain children in 
their own homes or to reunify children and families when possible. 
However, it is my understanding that under the new law, the federal 
government does not require States to make such efforts in cases where 
a court finds that a parent has killed or assaulted a child or 
subjected the child to extreme forms of abuse or neglect. At the same 
time, the new law does not prevent a State from making efforts to 
preserve or reunify a family in such cases, as long as the child's 
health and safety are the paramount considerations. Is my understanding 
correct?
  Mr. ROTH. Yes, that is correct. In addition, the adoption law 
establishes a new requirement that States must initiate termination of 
parental rights proceedings in specific cases that are outlined in the 
law. However, the law only requires States to initiate such proceedings 
and does not mandate the outcome. Moreover, the law provides that 
States are not required to initiate termination of parental rights in 
certain cases, including when there is a compelling reason to conclude 
that such proceedings would not be in the child's best interest. Thus, 
the State retains the discretion to make case-by-case determinations 
regarding whether to seek termination of parental rights.
  Ms. COLLINS. I ask unanimous consent that the bill be deemed read a 
third time and passed, that the title amendment be agreed to, and the 
motion to reconsider be laid upon the table, and any statements 
relating to the bill appear at this point in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (H.R. 3130) was deemed read the third time and passed.
  The title was amended so as to read:

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

                          ____________________