[Congressional Record Volume 148, Number 72 (Wednesday, June 5, 2002)]
[Extensions of Remarks]
[Pages E945-E946]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               THE CHILD SUPPORT REINVESTMENT ACT OF 2002

                                 ______
                                 

                         HON. ROBERT T. MATSUI

                             of california

                    in the house of representatives

                         Tuesday, June 4, 2002

  Mr. MATSUI. Mr. Speaker, today I am offering a bill to modify the way 
in which penalties are imposed on states that are attempting to comply 
with child support system computer automation requirements.
  Child support automation penalties provided an effective and 
necessary impetus for my home state of California to make important 
changes in their child support program. But, now these penalties have 
become an obstacle to meeting the objectives of the revamped system and 
should be modified.
  The Child Support Reinvestment Act would do two important things. 
First, it would change the base year that the penalty is calculated on. 
This would remove the disincentive for states to increase investments 
in their child support program because these increases would no longer 
be reflected in the calculation of the penalty. Second, the bill would 
allow increasing amounts of these penalties to be reinvested in the 
child support program if the state increases spending by specified 
percentages.
  My bill is supported by the National Women's Law Center and the 
Center for Law and Social Policy. In addition, ACES, the Association 
for Children for Enforcement Support, and the California Chapter of the 
National Organization for Women is supporting this legislation. Mr. 
Speaker, I would like to include the letters of support from these 
organizations in the record.
  California has made significant strides and is on target to have a 
fully automated child support system in 2005. They have also invested 
considerable money in improving collections and customer service. Last 
year, California collected $2 billion in child support, sending two-
thirds of this money directly to families. This progress, however, is 
being jeopardized by ongoing and increasing federal penalties. 
Unfortunately, it is the children in families who receive child support 
that suffer. My bill would correct this problem.

                                      The Association for Children


                             for Enforcement of Support, Inc.,

                                         Toledo, OH, June 4, 2002.
     Hon. Robert Matsui,
     Rayburn House Office Building,
     Washington, DC.
       Dear Representative Matsui: The Association for Children of 
     Support (ACES) would like to offer its support for your 
     proposed modifications to the current calculation of child 
     support automation penalties. Your legislation, the Child 
     Support Reinvestment Act of 2002, would remove the 
     disincentive to states, like California, to invest additional 
     dollars in their child support system. The penalties imposed 
     on the child support program in California were necessary and 
     provided the encouragement needed by the state to change the 
     system. We believe that California's significant progress, 
     increasing collection rates, and improved customer service 
     warrant reasonable changes in the child support computer 
     automation statute. Particularly, we support your bill, 
     because it would change the way penalties are calculated by 
     redefining the penalty base to avoid penalizing the sate for 
     their increased investment in the child support program. We 
     also support the provision that would permit the reinvestment 
     of a portion of the penalties in the child support system.
       ACES believes that it is mothers and children who 
     ultimately suffer if the bill is not enacted. Thank you for 
     your leadership.
           Sincerely,

                                             Geraldine Jensen,

                           President, Association for Children for
                                           Enforcement of Support.

                                  ____
                                  

                              National Organization for Women,

                                     Sacramento, CA, May 14, 2002.
     Hon. William M. Thomas,
     Chair, House Ways and Means Committee,
     Washington, DC.
       Dear Congress Member Thomas: The California National 
     Organization for Women (CANOW) urges you to help alleviate a 
     situation which, if left unmitigated, will lead to injury of 
     thousands of California's families. We are asking for your 
     help in easing the penalties imposed upon California because 
     of missed deadlines on child support automation.
       The penalties imposed upon the child support program in 
     California were necessary and acted as a catalyst for change 
     in the system. In 1999, California's child support system 
     faced a major reform. Since the change, policies in the state 
     are innovative and collections are on the rise. Customer 
     service efforts have improved tenfold and greater efforts to 
     reduce automation problems have resulted in record high 
     collections in some counties. These heroic efforts were made 
     in response to the public scrutiny of state child support 
     policies and procedures. Public scrutiny of the system 
     resulted directly from imposition of federal penalties. 
     Therefore, the penalties served their purpose and change has 
     resulted.
       Now that California has revamped its child support system 
     and is spending nearly $1 billion to automate, child support 
     penalties are becoming obstructive. Because of the penalty 
     structure, the state is being penalized for spending more 
     money to improve child support. Instead, we need the penalty 
     system to be flexible--at least allowing penalties to serve 
     the purpose of motivating positive change rather than 
     imposing punishment just because it was observed and although 
     it no longer makes sense.
       If we allow the penalty structure to remain as is, we will 
     see a loss of these newly gained services. The new child 
     support department will lose too many resources as money from 
     the program is siphoned to pay penalties. Mothers and 
     children will be the ultimate

[[Page E946]]

     losers as less effort is put into collecting and enforcing 
     child support. CANOW supports a policy that would establish a 
     penalty base that does not increase when more money is spent 
     by the state to improve the program. Also, CANOW believes 
     that an allowance for reinvestment of the penalty dollars to 
     improvement of child support enforcement is a worthwhile 
     venture.
       Please help CANOW to alleviate the potential suffering of 
     millions by restoring equity to the child support automation 
     computer penalty structure. Current economic times demand 
     that we rethink the effects of punitive measures from years 
     past.
           Sincerely,
                                                   Melanie Snider,
                                       CANOW Legislative Advocate.

                                  ____
                                  

         Center for Law and Social Policy and National Women's Law 
           Center,
                                                    March 5, 2002.
     Hon. William Thomas,
     U.S. Representative, Committee on Ways and Means, Longworth 
         House Office Building, Washington, DC.
       Dear Chairman Thomas: The Center for Law and Social Policy 
     and the National Women's Law Center support the State of 
     California's request for modifications in the computer 
     penalties incurred by the state--and we support reform of the 
     child support distribution rules--in order to continue the 
     significant progress that California has made in recent years 
     to improve its child support program and get more child 
     support to families.
       As explained in more detail below, we recommend a change in 
     the way penalties are calculated, by redefining the penalty 
     base to avoid penalizing California for having increased its 
     investment in its child support program. We also support a 
     change that would permit California to reinvest in its child 
     support program the computer penalties incurred by the state 
     because of its delay in implementing a statewide system under 
     the Family Support Act of 1998 (FSA). We believe that 
     California's progress in restructuring its child support 
     program and implementing a new generation of computer 
     technology are unique circumstances that justify reasonable 
     modifications in the FSA computer penalty statute. However, 
     we do not support forgiveness or waiver of the penalty, nor 
     do we support reinvestment of child support penalties 
     incurred for reasons other than noncompliance with FSA 
     computer requirements.
       We also hope you will cosponsor S. 916 and S. 918, which 
     would reform child support distribution rules, simplify 
     California's systems development, and get more child support 
     to former and current welfare families. We urge you to get 
     help get child support distribution reform passed this year.
     Modifying Computer Penalties
       In 1998, Congress enacted an alternative computer penalty 
     in lieu of withdrawing full federal funds from state TANF and 
     child support programs for states that fail to meet child 
     support computer system deadlines. The statute creates an 
     alternative penalty available to states making good faith to 
     comply with the automated system requirements and submitting 
     a corrective action plan. The penalties escalate over time: 
     the first year penalty is 4 percent of federal child support 
     matching funds; the second year penalty is 8 percent; the 
     third year penalty is 16 percent; the fourth year penalty is 
     25 percent, and the fifth and subsequent years' penalty is 30 
     percent. The percentage is applied to the ``penalty base'': 
     the amount payable to the state in the previous year as 
     federal reimbursement for state administrative expenditures 
     in the child support program (the 66% federal match). Thus, a 
     state like California that substantially increased its 
     investment in the child support program each year faces not 
     only escalating percentages, but an increasing penalty base.
       We each provided extensive technical assistance to the 
     House Committee on Ways and Means as it developed the penalty 
     language. The specific intent of the alternative penalty was 
     not to punish noncompliant states, but instead to spur those 
     states to address political issues within the states that 
     were impeding system development. Congress did not anticipate 
     that states would incur penalties for more than three or four 
     years. To date, all but two states, California and South 
     Carolina, have received or requested certification of Family 
     Support Act systems compliance.
       Although California is not yet in compliance, it responded 
     to the alternative penalty in the way intended by Congress. 
     After Congress adopted the alternative penalty, the 
     California legislature restructured the state child support 
     program by (1) creating an independent state child support 
     agency, (2) reorganizing the program at the county level, (3) 
     engaging in an ambitious top-to-bottom review of child 
     support policies and practices, (4) revamping its computer 
     development and procurement plans, and (5) substantially 
     increasing state funding levels. We think these changes are 
     producing positive and enduring results for families. 
     However, because California has not yet completed its 
     computer system, it will continue to face computer penalties 
     for several years to come.
       We support two changes in the alternative penalty 
     applicable to FSA system requirements. First, we agree with 
     California that the statutory definition of the base 
     unintentionally penalizes the state for increased investments 
     in the child support program. As the state puts more money 
     into the program, the penalty base and penalty increase. We 
     think the base should be adjusted to reflect a fixed year.
       Second, we support a change that would allow the state to 
     reinvest the penalty in its child support program in a fair 
     and reasonable way. Given California's strenuous efforts to 
     improve its child support program since enactment of the 
     alternative penalty, we think it is counterproductive to 
     continue to withdraw penalty funds from the program, 
     particularly at a time when state budgets are experiencing 
     severe shortfalls. Several studies establish a direct link 
     between child support program performance and adequate 
     finding levels. We are particularly concerned that 
     California's system development decisions could be 
     compromised if the state is required to continue to pay its 
     substantial penalties to the federal government.
     Child Support Distribution Reform
       It is also important that California have the authority to 
     avoid programming existing distribution rules in the 
     development of its new system. Problems with automating 
     complicated rules have been cited by federal and state 
     administrators as a cause of system development delays and 
     costs. And one expert, Policy Studies, Inc., estimates that 
     once the rules are implemented, 6 to 8 percent of all child 
     support program costs--up to $360 million per year--are spent 
     maintaining them.
       About half of the support arrears collected for families 
     who have left welfare are not paid to the families, but 
     instead are kept by the government as reimbursement for 
     welfare costs. By paying the support to families, 
     distribution reform would help families make the transition 
     off of welfare and stay off. Research from the Wisconsin 
     pass-through demonstration finds that when child support 
     directly benefits their children and is not kept by the 
     government, fathers are more willing to establish paternity 
     and pay support for their children.
       We urge you support both California penalty relief and 
     distribution reform this year.
           Sincerely,

                                               Vicki Turetsky,

                                            Senior Staff Attorney,
                                 Center for Law and Social Policy.

                                               Joan Entmacher,

                         Vice President, Family Economic Security,
                                      National Women's Law Center.

     

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