[Congressional Record (Bound Edition), Volume 145 (1999), Part 19]
[Senate]
[Pages 27845-27847]
[From the U.S. Government Publishing Office, www.gpo.gov]



             CHILD SUPPORT MISCELLANEOUS AMENDMENTS OF 1999

  Mr. HAGEL. Mr. President, I ask unanimous consent that the Senate now 
proceed to the immediate consideration of S. 1844 introduced earlier 
today by Senators Roth, Moynihan, and others.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 1844) to amend Part D of title IV of the Social 
     Security Act to provide for an alternative penalty procedure 
     with respect to compliance with requirements for a State 
     disbursement unit.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. ROTH. Mr. President, I rise today to introduce the Child Support 
Miscellaneous Amendments of 1999. This legislation is co-sponsored by 
Senators Moynihan, Voinovich, Feinstein, Roberts, Boxer, Enzi, Thomas, 
Gramm, and Kerrey.
  This bill would provide a more appropriate penalty for States that 
have not met the deadline for establishing a State Disbursement Unit 
(SDU). The 1996 welfare reform law (P. L. 104-193) made a number of 
important changes to the nation's child support system, including a 
requirement that States establish and operate a State Disbursement Unit 
(SDU) to receive child support payments and distribute the money in 
accord with State child support distribution rules. In general, States 
had until October 1st of this year to establish an SDU.
  States that have not met this deadline will lose all Federal funds 
for the administration of their child support enforcement programs, and 
also may be in jeopardy of losing Temporary Assistance for Needy 
Families (TANF) funds.
  Although most States have met the deadline, for various reasons about 
seven States may not. This bill provides that States may apply for an 
alternative smaller, graduated penalty, as described in the 
``Description of the Child Support Miscellaneous Amendments of 1999.''
  Mr. President, I ask unanimous consent that a description of the bill 
be printed in the Record following my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. ROTH. Moreover, this legislation provides that any penalty will 
be waived if a State establishes an SDU within six months of the 
original deadline, that is, by April 1, 2000. If a State misses the 
April 1st date but establishes an SDU within a year of the deadline, 
that is, by September 30, 2000, the penalty shall be limited to one 
percent of child support funds for the fiscal year.
  Mr. President, in my view this alternative penalty system is more 
suitable for technology-related program requirements, where States may 
be moving towards compliance but need additional time. Indeed, the 
proposed legislation follows similar changes made last year in 
providing an alternative penalty for States that did not meet the 
deadline for establishing an automated statewide data system for child 
support. In this regard, the proposed legislation would provide for a 
single penalty for a State that does not meet either the automated data 
system or SDU requirements.
  The Congressional Budget Office has found this legislation has no 
cost.
  I urge the support of all Senators.

                             Exhibit No. 1

   DESCRIPTION OF THE CHILD SUPPORT MISCELLANEOUS AMENDMENTS OF 1999


                              present law

       The 1996 welfare reform law (P.L. 104-193) required States 
     to establish and operate a State Disbursement Unit (SDU) to 
     receive child support payments and distribute the money in 
     accord with State child support distribution rules. The SDU 
     may be operated by a single State agency, two of more State 
     agencies under a regional cooperative agreement, or by a 
     contractor responsible to the State agency. Alternatively, 
     the SDU may be established by linking local disbursement 
     units, such as counties, under an agreement with the 
     Secretary of Health and Human Services. States that processed 
     receipt of child support payments through their courts at the 
     time of enactment of the 1996 welfare reform law enacted had 
     until October 1, 1999, to operate an SDU. States that did not 
     process child support payments through the courts were 
     required to be operating an SDU by October 1, 1998.
       The penalty for not meeting the SDU requirement is the loss 
     of all Federal child support payments. States receive Federal 
     funds for child support enforcement administration according 
     to a matching formula. Furthermore, if a state cannot certify 
     that it has an approved child support enforcement plan--
     including an SDU--when it renews its

[[Page 27846]]

     Temporary Assistance for Needy Families (TANF) plan (i.e., 
     every 27 months), it is not eligible for TANF funds.


                        Explanation of Provision

       States not operating an approved State Disbursement Unit 
     (SDU) by October 1, 1999, may apply to the Secretary for an 
     alternative penalty. To qualify for the alternative penalty, 
     the Secretary must find that the State has made and is 
     continuing to make a good faith effort to comply, and the 
     State must submit a corrective plan by April 1, 2000. If 
     these conditions are fulfilled, the Secretary must not 
     disapprove the State child support enforcement plan. Instead, 
     the Secretary must reduce the amount the State would 
     otherwise have received in Federal child support payments by 
     the alternative penalty amount for the fiscal year.
       The alternative penalty amount is equal to: 4 percent of 
     the penalty base in the first fiscal year; 8 percent in the 
     second fiscal year; 16 percent in the third fiscal year; 25 
     percent in the fourth fiscal year; and 30 percent in the 
     fifth and subsequent fiscal years. The penalty base is 
     defined as the Federal administrative reimbursement for child 
     support enforcement (i.e., the 66 percent Federal matching 
     funds) that otherwise would have been payable to the State in 
     the previous fiscal year.
       If a State that is subject to a penalty has an approved SDU 
     on or before April 1, 2000, the Secretary shall waive the 
     penalty. If a State that is subject to a penalty achieves 
     compliance after April 1, 2000, and on or before September 
     30, 2000, the penalty amount shall be 1 percent of the 
     penalty base.
       In addition, the Secretary may not impose a penalty against 
     a State for a fiscal year for which the State has already 
     been penalized for noncompliance with respect to the 
     automated data processing system requirement, as provided 
     under Section 455 of the Social Security Act.
       The loss of Temporary Assistance to Needy Families block 
     grant funds by a State for failure to substantially comply 
     with one or more of the IV-D requirements is not applicable 
     with respect to the SDU requirements (or the automated 
     systems requirement).


                             Effective Date

       October 1, 1999.

  Mr. MOYNIHAN. Mr. President, I rise today in support of this 
technical, yet necessary, legislation, the Child Support Miscellaneous 
Amendments of 1999. We live in a nation with an ever-increasing number 
of single mothers. About one-third (32.8%) of all children born in the 
United States last year were born outside of marriage. At a minimum, we 
need a comprehensive and effective child support system to see to it 
that non-custodial parents--often fathers--provide for these children.
  Maintaining a central unit for disbursing and collecting child 
support payments in each state is essential. This eases the burden on 
the business community, whose cooperation we need. Unfortunately, a 
handful of states appear to have missed the statutory deadline for 
having such a central unit in operation. Under current law, all Federal 
funding for the child support programs in these states will be 
withdrawn.
  This is too harsh of a penalty. States are missing the deadline 
because they are simply behind schedule in their procurement effort or 
because of a broader failing in the computer systems undergirding their 
child support programs. This legislation would provide an alternative, 
more modest, financial penalty for those states which are late in 
meeting the deadline. For those states suffering a general failure of 
their child support computer systems it would not impose a penalty 
because those states have already been penalized.
  I thank the Chairman for his work on this matter, simple one of 
reasonable program administration.
  Mr. BAYH. Mr. President, today I rise as an original cosponsor of the 
Child Support Miscellaneous Amendments of 1999. This bill will provide 
states, such as Indiana with additional time to either obtain a waiver 
from the Department of Health and Human Services or comply with the 
state disbursement unit requirement without being penalized. It is 
important that states are provided with sufficient time to determine 
what system will allow them to collect and disburse child support 
payments most efficiently.
  For many states the most economical and administratively efficient 
means of delivering and collecting child support payments is to comply 
with the requirement and create a central state disbursement unit. 
However, the Department of Health and Human Services has recognized 
some exceptions to that general rule and granted those states a waiver. 
The State of Indiana has applied for a waiver but is awaiting the 
Secretary's determination of whether or not to grant the waiver 
request. This legislation will allow Indiana, and the other states in a 
similar predicament, the time they need to determine what system works 
best for them. In addition, the penalty these states face will be 
reduced. States will not be in jeopardy of losing all of their 
administrative dollars for child support collection.
  Without this legislation, the State of Indiana could lose as much as 
$33.5 million, undermining the state's ability to collect child 
support. While child support collection affects the budgets of the 
Federal and State Governments, it most importantly affects the children 
for whom it is intended. The system was designed so children would at 
least have the economic support of both their parents.
  It is important that Congress continue to find ways to collect child 
support owed to children from noncustodial parents. Child support 
administrative dollars help states accomplish that goal.
  There are other steps Congress can take to reconnect noncustodial 
parents with their children and encourage them to pay child support. As 
we continue to discuss the intricacies of child support collection, the 
need for a child to have the emotional and financial support of both 
parents should be incorporated into the discussion. I look forward to 
having that discussion in the near future.
  I thank Senator Roth and Senator Moynihan for their leadership on 
this issue and for acknowledging the need to provide states with more 
time to implement a child support collection and disbursement system 
that works. I urge my colleagues to support this legislation.
  Mr. HAGEL. Mr. President, I ask unanimous consent that the bill be 
read a third time and passed, the motion to reconsider be laid upon the 
table, and any statements relating to the bill be printed in the 
Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 1844) was read the third time and passed, as follows:

                                S. 1844

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

     SECTION. 1. SHORT TITLE.

       This Act may be cited as the ``Child Support Miscellaneous 
     Amendments of 1999''.

     SEC. 2. ALTERNATIVE PENALTY PROCEDURE RELATING TO COMPLIANCE 
                   WITH REQUIREMENTS RELATING TO STATE 
                   DISBURSEMENT UNIT.

       (a) In General.--Section 455(a) of the Social Security Act 
     (42 U.S.C. 655(a)) is amended by adding at the end the 
     following:
       ``(5)(A)(i) If--
       ``(I) the Secretary determines that a State plan under 
     section 454 would (in the absence of this paragraph) be 
     disapproved for the failure of the State to comply with 
     subparagraphs (A) and (B)(i) of section 454(27), and that the 
     State has made and is continuing to make a good faith effort 
     to so comply; and
       ``(II) the State has submitted to the Secretary, not later 
     than April 1, 2000, a corrective compliance plan that 
     describes how, by when, and at what cost the State will 
     achieve such compliance, which has been approved by the 
     Secretary,

     then the Secretary shall not disapprove the State plan under 
     section 454, and the Secretary shall reduce the amount 
     otherwise payable to the State under paragraph (1)(A) of this 
     subsection for the fiscal year by the penalty amount.
       ``(ii) All failures of a State during a fiscal year to 
     comply with any of the requirements of section 454B shall be 
     considered a single failure of the State to comply with 
     section 454(27)(A) during the fiscal year for purposes of 
     this paragraph.
       ``(B) In this paragraph:
       ``(i) The term `penalty amount' means, with respect to a 
     failure of a State to comply with subparagraphs (A) and 
     (B)(i) of section 454(27)--
       ``(I) 4 percent of the penalty base, in the case of the 1st 
     fiscal year in which such a failure by the State occurs 
     (regardless of whether a penalty is imposed in that fiscal 
     year under this paragraph with respect to the failure), 
     except as provided in subparagraph (C)(ii);
       ``(II) 8 percent of the penalty base, in the case of the 
     2nd such fiscal year;
       ``(III) 16 percent of the penalty base, in the case of the 
     3rd such fiscal year;
       ``(IV) 25 percent of the penalty base, in the case of the 
     4th such fiscal year; or

[[Page 27847]]

       ``(V) 30 percent of the penalty base, in the case of the 
     5th or any subsequent such fiscal year.
       ``(ii) The term `penalty base' means, with respect to a 
     failure of a State to comply with subparagraphs (A) and 
     (B)(i) of section 454(27) during a fiscal year, the amount 
     other wise payable to the State under paragraph (1)(A) of 
     this subsection for the preceding fiscal year.
       ``(C)(i) The Secretary shall waive all penalties imposed 
     against a State under this paragraph for any failure of the 
     State to comply with subparagraphs (A) and (B)(i) of section 
     454(27) if the Secretary determines that, before April 1, 
     2000, the State has achieved such compliance.
       ``(ii) If a State with respect to which a reduction is 
     required to be made under this paragraph with respect to a 
     failure to comply with subparagraphs (A) and (B)(i) of 
     section 454(27) achieves compliance with such section on or 
     after April 1, 2000, and on or before September 30, 2000, 
     then the penalty amount applicable to the State shall be 1 
     percent of the penalty base with respect to the failure 
     involved.
       ``(D) The Secretary may not impose a penalty under this 
     paragraph against a State for a fiscal year for which the 
     amount otherwise payable to the State under paragraph (1)(A) 
     of this subsection is reduced under paragraph (4) for failure 
     to comply with section 454(24)(A).''.
       (b) Inapplicability of Penalty Under TANF Program.--Section 
     409(a)(8)(A)(i)(III) of such Act (42 U.S.C. 
     609(a)(8)(A)(i)(III)) is amended by striking ``section 
     454(24)'' and inserting ``paragraph (24) or (27)(A) of 
     section 454''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 1999.

                          ____________________