[Federal Register Volume 61, Number 19 (Monday, January 29, 1996)]
[Proposed Rules]
[Pages 2774-2781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1254]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Parts 301, 302, 303, 304, 306 and 307

RIN 0970-AB57


Child Support Enforcement Program; State Plan Approval and Grant 
Procedures, State Plan Requirements, Standards for Program Operations, 
Federal Financial Participation and Optional Cooperative Agreements for 
Medical Support Enforcement Computerized Support Enforcement Systems

AGENCY: Office of Child Support Enforcement (OCSE).

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule would amend Federal regulations governing 
procedures for making information available to consumer reporting 
agencies (CRAs). These provisions implement the requirements of section 
212 of the Social Security Act Amendments of 1994 (Pub. L. 103-432) 
which require States to adopt procedures for periodic reporting of 
information to CRAs, effective October 1, 1995. This proposed rule 
would implement Public Law 104-35 which was enacted on October 12, 1995 
which revises section 454(24) of the Social Security Act. 

[[Page 2775]]

    In addition, it would revise or remove regulations, in part or 
whole, in response to the President's Memorandum of March 4, 1995 to 
heads of Departments and Agencies which announced a government-wide 
Regulatory Reinvention Initiative to reduce or eliminate burdens on 
States, other governmental agencies or the private sector.

DATES: Consideration will be given to comments received by March 29, 
1996.

ADDRESSES: Send comments to Director, Office of Child Support 
Enforcement, Administration for Children and Families, 370 L'Enfant 
Promenade, SW., 4th floor, Washington, DC 20447. Attention: Director, 
Policy and Planning Division, Mail Stop: OCSE/DPP. Comments will be 
available for public inspection Monday through Friday, 8:30 a.m. to 
5:00 p.m. on the 4th floor of the Department's offices at the above 
address.

FOR FURTHER INFORMATION CONTACT: Policy Branch, OCSE, specifically:
    Tom Killmurray (202) 401-4677 regarding mandatary reporting of 
child support information to consumer reporting agencies;
    Marilyn R. Cohen (202) 401-5366 regarding all other regulatory 
revisions.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The information collection requirement regarding submittal of the 
State plan preprint page was approved by the Office of Management and 
Budget under OMB control number 0960-0385. State plan preprint page 
revisions necessitated by this proposed rule will be submitted to OMB 
for approval. Otherwise, this rule does not require information 
collection activities and, therefore, no additional approvals are 
necessary under the Paperwork Reduction Act of 1980 (Pub. L. 96-511).

Statutory Authority

    These proposed regulations are published under the authority of 
section 466(a) of the Social Security Act (the Act), as amended by the 
Social Security Act Amendments of 1994. Section 466(a)(7), as amended, 
requires States to have procedures which establish periodic reporting 
of child support arrearage information to CRAs. The statutory effective 
date for required reporting of child support information in certain 
cases to consumer reporting agencies is October 1, 1995. The name of 
any parent who owes overdue support and is at least two months 
delinquent in the payment of support and the amount of such delinquency 
must be reported to CRAs.
    Section 466(a)(7) contains three exceptions to the periodic 
reporting requirement. First, if the amount of the overdue support 
involved in any case is less than $1,000, information regarding such 
amount shall be made available only at the option of the State. 
Secondly, any information with respect to an absent parent shall be 
made available under such procedures, only after notice has been sent 
to such absent parent of the proposed action, and such absent parent 
has been given a reasonable opportunity to contest the accuracy of such 
information (and after full compliance with all procedural due process 
requirements of the State). Finally, such information shall not be made 
available to a CRA which the State determines does not have sufficient 
capability to make systematic and timely use of such information, or an 
entity which has not furnished evidence satisfactory to the State that 
the entity is a CRA.
    This regulation is also proposed under the authority granted to the 
Secretary by section 1102 of the Act. Section 1102 of the Act requires 
the Secretary to publish regulations that may be necessary for the 
efficient administration of the functions for which she is responsible 
under the Act. In accordance with the Presidential directive to 
executive branch regulatory agencies to identify existing regulations 
that are redundant or obsolete, OCSE has examined Part 300 of Title 45, 
Code of Federal Regulations to evaluate those areas where regulations 
should be removed.

Background

    The Child Support Enforcement Amendments of 1984 (Pub. L. 98-378) 
featured provisions that required critical improvements in State and 
local child support enforcement programs. Making child support 
delinquency information available to credit bureaus upon their request 
was one of the statutorily prescribed procedures required of States by 
the 1984 amendments.
    Reporting overdue child support owed by obligors to consumer 
reporting agencies (CRAs) is an effective enforcement technique that 
has several benefits. It creates an incentive for obligors to make 
prompt and consistent payments, because delinquent payment information 
could negatively impact their credit history, thus endangering their 
purchasing power. Credit reporting may be particularly effective in 
cases involving self-employed obligors, which can be among the most 
challenging cases to work. Because many self-employed obligors are 
highly dependent on credit to operate their businesses, impeding their 
credit or purchasing power may deter noncompliance.
    The addition of information about unpaid child support on 
individual credit records may make it less likely for obligors to incur 
other debts which could interfere with their ability to pay child 
support. Finally, reporting of child support delinquencies may help 
child support recipients obtain credit. Child support information is 
often used to substantiate income by custodial parents attempting to 
obtain credit. CRAs may use the information reported by IV-D agencies 
to verify overdue child support and subsequent payment information.
    Much of the expansion of credit reporting was due to enactment of 
the Child Support Enforcement Amendments of 1984, which mandated that 
States respond to CRA requests for information on obligors who are 
$1,000 or more in arrears and reside in the State. Most States have 
gone beyond the legal requirement and are routinely reporting 
information to CRAs.
    In addition, the Ted Weiss Act of 1992 (Pub. L. 102-537) amended 
the Fair Credit Reporting Act (15 U.S.C. 1681a[f]) to require consumer 
credit reporting agencies to include in consumer reports information, 
no more than seven years old, on overdue child support when provided by 
child support enforcement agencies, or received otherwise and verified 
by any local, State or Federal agency.
    Currently, approximately 40 States operate routine periodic credit 
reporting processes, without the necessity of a request from the credit 
bureau. Most of the States report information to CRAs if arrearages 
reach or exceed $1,000; several report arrearages of lesser accruals. 
California has no minimum amount, and in fact, reports all ordered 
child support to credit bureaus irrespective of a delinquency. Under 
the proposed rule, States will have the flexibility to decide what 
``periodic'' reporting is; some States may report monthly, others may 
report quarterly. The majority of States report information to CRAs on 
a monthly basis, a few others on a bimonthly or annual basis. The 
method of reporting varies. Thirty-six States report in an automated 
manner, using, for example, tape matches; nine States provide 
information manually; several States employ a combination of both 
reporting methods.
    The President and Congress decided to improve this enforcement tool 
with the Social Security Act Amendments of 1994 (Pub. L. 103-432). 
These reforms are based on successful State practices as well as a 
recommendation by the U.S.

[[Page 2776]]

Commission on Interstate Child Support in its comprehensive report to 
the Congress, ``Supporting our Children: A Blueprint for Reform.'' 
Because Congress added the mandate to section 466(a) of the Act, 
reporting to credit bureaus is a requirement which States must meet as 
a condition of State plan approval under section 454 of the Act.
    This proposed rule is also in response to the President's 
Memorandum of March 4, 1995 to heads of Departments and Agencies which 
announced a government-wide Regulatory Reinvention Initiative to reduce 
or eliminate mandated burdens on States, other governmental agencies or 
the private sector.
    The Presidential Memorandum required agencies, by June 1, 1995, to 
conduct a page-by-page review of all regulations to eliminate or revise 
those that are outdated or otherwise in need of reform. OCSE conducted 
such a review, resulting in the proposed revisions, set forth in this 
document. Both substantive and technical changes are proposed including 
recodification such as renumbering and terminology revisions.
    In our analysis of existing regulations, we took a cautionary 
approach recognizing that significant legislation to overhaul the 
welfare system, including major reform to the child support enforcement 
program, is actively pending before the 104th Congress. Accordingly, 
numerous existing rules will potentially be affected. We have deferred 
recommending any changes in existing rules which may be impacted by 
enactment of an incipient legislative change. However, we consider the 
changes in this proposed rule as only the first part of our response to 
the President's Regulation Reinvention Initiative. We will work with 
our partners to identify additional regulations which should be 
reevaluated given the new direction of regulatory reinvention.

Description of Regulatory Provisions

    We propose to make technical revisions, including recodification, 
to the following regulations, in addition to amending section 303.105, 
``Procedures for making information available to consumer reporting 
agencies''.

Section 301.1  General Definitions

    We propose that the specified years for Applicable matching rate of 
``1983 through 1987, 70 percent, FY 1988 and FY 1989, 68%,'' referenced 
in section 301.1 be removed as such dates have passed.

Section 301.15  Grants

    We propose two technical revisions in this section. Part of the 
mailing address in paragraph (a)(1) should be updated by replacing, 
``Social and Rehabilitation Service, Attention: Finance Division, 
Washington, DC 20201'' with ``Administration for Children and Families, 
Office of Program Support, Division of Formula, Entitlement and Block 
Grants, 370 L'Enfant Promenade, SW., Washington, DC 20447.'' In 
addition, we propose to replace the phrase, ``Subpart G Matching and 
Cost Sharing'' with ``45 CFR 74.23 Cost Sharing or Matching'' and 
replace the phrase ``Subpart I Financial Reporting Requirements'' with 
``45 CFR 74.52 Financial Reporting'' in paragraph (e). We propose this 
latter revision to coincide with substantial revisions of 45 CFR Part 
74 by DHHS August 25, 1994 (59 FR 43760).

Section 302.15  Reports and Maintenance of Records

    This rule implements section 454(10) of the Act which does not 
specify use of microfilm for record retention. We propose that 
paragraph (b) ``Conditions for Optional Use of Microfilm Copies,'' be 
removed as microfilm use is obsolete due to automatic case tracking and 
electronic filing capability. The proposed change will result in the 
following: Paragraph (a) will be without designation, paragraphs (a)(1) 
and (a)(2) will be redesignated (a) and (b), and roman numerals (i) 
through (vii) will be redesignated as arabic numbers (1) through (7), 
respectively. Removal of the microfilm reference does not preclude 
States from continuing to use microfilm as an information storage 
medium.

Section 302.33  Services to Individuals Not Receiving AFDC or Title IV-
E  Foster Care Assistance

    We propose to remove paragraph (c)(1), Application Fee, as it 
refers to requirements in effect prior to October 1, 1985, which date 
has passed. Thus, paragraph (2) will be renumbered as paragraph (1) and 
paragraph (3) will be renumbered as paragraph (2). In addition, we 
propose to remove paragraph (e) Assignment. Because a State is not 
required to take an assignment but has discretion to do so, this 
section is being removed as a ``non-mandatory'' aspect of existing 
rules. Removal of this subsection does not preclude a State from taking 
an assignment of rights from a non-AFDC recipient of IV-D services if 
necessary under State law or practice in order to deliver program 
service.

Section 302.34  Cooperative Arrangements

    The authorities for this rule are sections 1102 and 454(7) of the 
Act. We propose to remove paragraph (b). As the result of the passage 
of time, cooperative agreements should meet Sec. 303.107 criteria at 
this time. This revision would leave paragraph (a) without designation. 
We further propose to revise the first sentence of the remaining 
paragraph by adding ``under Sec. 303.107'' after ``cooperative 
arrangements.''

Section 302.36  Provision of Services in Interstate IV-D Cases

    The authorities for this rule are section 454(9) of the Act which 
addresses standards prescribed by the Secretary and section 1102 of the 
Act which addresses the Secretarial authority to issue regulations 
necessary for program administration. These requirements were placed in 
regulation to clarify that States are required to provide all necessary 
IV-D services in interstate cases. However, we propose to remove 
paragraphs (a)(1) through (a)(5), to eliminate repeating 
Sec. 303.7(c)(7), explicit provisions which specify the various 
functional responsibilities by the responding State. This does not 
alter the requirement for provision of services; it merely removes 
unnecessary text referenced elsewhere. This proposed revision would 
remove ``for:'' at the end of paragraph (a) and subparagraphs (a)(1) 
through (a)(5), thus ending the paragraph with the word, ``chapter.''

Section 302.37  Distribution of Support Payments

    This rule implements section 454(11) of the Act. We propose to 
remove it because it references Secs. 302.32 and 302.51 which duplicate 
this section.

Section 302.54  Notice of Collection of Assigned Support

    This rule implements section 454(5) of the Act which does not 
specify dates. Therefore, we propose to remove paragraph (a) which is 
obsolete as it specifies requirements in effect until December 31, 
1992, which event has now passed.
    Thus, paragraph (b) would be redesignated paragraph (a) and 
paragraph (c) would be redesignated paragraph (b), respectively.
    We also propose to revise paragraph (b)(2) by adding the word, 
``collected'' after the second mention of ``support'' to read as 
follows: ``The monthly notice must list separately payments collected 
from each absent parent when more than one absent parent owes support 
to the family and must indicate the 

[[Page 2777]]
amount of current support collected, the amount of arrearages collected 
and the amount of support collected which was paid to the family.'' 
This addition is made to clarify that it is the amount actually 
collected, not the amount owed that must be included in the notice, and 
will be consistent with the statutory language at section 454(5)(A) of 
the Act.
    Section 302.54(c)(1)(i) specifies one of the grounds upon which a 
State may be granted a waiver to permit the issuance of quarterly, 
rather than monthly, notices of the amount of support collected. 
Waivers granted under this criterion were based upon the State's lack 
of a computerized support enforcement system consistent with Federal 
requirements or the lack of an automated system that is able to 
generate monthly notices. Such waivers were valid through September 30, 
1995. On October 12, 1995, Public Law 104-35 was signed into law, which 
revised Section 454(24) of the Social Security Act. The revised statute 
extends the date by which States will have in effect, and approved by 
the Secretary, a operational automated data processing and information 
retrieval system meeting all requirements of Federal law from October 
1, 1995 to October 1, 1997. Because waivers available under 
Sec. 302.54(c)(1)(i) are linked to the deadline by which States must 
have operational automated systems, we propose to revise the date 
clause to read ``Until September 30, 1997,''. Any automated system 
developed to meet the Federal requirements for a certified 
comprehensive Statewide system must produce mandated monthly notices of 
collections. States with previous waivers that expired September 30, 
1995 can apply for extension of the waiver if the State does not have a 
computerized support enforcement system consistent with Federal 
requirements or lacks an automated system that is able to generate 
monthly notices. Extension of waivers will be granted as part of the 
State plan approval process.

Section 302.70  Required State Laws

    Section 466(a) of the Act requires a State to enact laws providing 
for these new requirements. Consistent with implementation of the 
Family Support Act requirements, however, States may implement 
provisions using regulation, procedure, or court rule, instead of law, 
if such regulation, procedure, or rule has the same force and effect 
under State law on the parties to whom they apply.
    We propose to revise section 302.70(a)(7) to reflect the statutory 
amendment which mandates reporting of certain child support arrearage 
information to credit reporting agencies. Each IV-D State plan 
requirement remains effective on the date indicated by the statute or 
implementing regulation.

Section 302.85  Mandatory Computerized Support Enforcement System

    On October 12, 1995, Public Law 104-35 was signed into law, which 
revises Section 454(24) of the Social Security Act. The revised statute 
extends the date by which States will have in effect, and approved by 
the Secretary, an operational automated data processing and information 
retrieval system meeting all requirements of Federal law from October 
1, 1995 to October 1, 1997. Because the deadline by which States must 
have operational automated systems has been changed, we propose to 
remove the date in paragraph (a)(2) ``October 1, 1995'' and replace it 
with ``October 1, 1997.''

Section 303.10  Procedures for Case Assessment and Prioritization

    This rule was issued under authority of section 1102 of the Act, as 
part of implementation of the Child Support Enforcement Amendments of 
1984 (Pub. L. 98-378). We propose to remove this section because case 
assessment and prioritization procedures are permissive and standards 
for an effective program at 45 CFR Part 303 require the State to 
provide necessary IV-D services in all cases in an efficient and 
effective manner. Therefore, it is not necessary to place this 
information in regulation.

Section 303.31  Securing and Enforcing Medical Support Obligations

    This rule implements section 452(f) of the Act. We propose to 
replace references to ``Sec. 306.50(a)'' with ``Sec. 303.30'' in 
paragraphs (b)(6) and (b)(7). This technical change is required to 
correct a clerical error. Revisions to Secs. 303.30 and 303.31 set 
forth in the final rule issued March 8, 1991 did not make these 
technical changes.

Section 303.73  Applications to Use The Courts of the United States to 
Enforce Court Orders

    This regulation is based on sections 452(a)(8) and 460 of the Act. 
An Action Transmittal (AT) issued February 6, 1976 (OCSE-AT-76-1) and 
revised May 12, 1976 (OCSE-AT-76-8) covers paragraphs (a) and (b) of 
the regulation. Since the requirements in this regulation are 
infrequently used, it is sufficient for users to follow guidance in the 
AT. The AT gives express instructions for submitting cases for 
consideration for referral to Federal court. Paragraph (c) is 
unnecessary to be placed in regulation as it merely specifies internal 
instructions to the Regional Office.
    Therefore, we propose to revise the end of the introductory portion 
of paragraph (a) by removing, ``to demonstrate that'' and completing 
the paragraph by adding, ``in accordance with instructions issued by 
the Office,'' thus removing paragraphs (a)(1) through (c).

Section 303.100   Procedures for Wage or Income Withholding

    In the administration of wage or income withholding, 
Sec. 303.100(g)(3) requires that effective October 1, 1995, States must 
be capable of receiving withheld amounts and accounting information 
which are electronically transmitted by the employer to the State. This 
effective date for electronic funds transfer capability was directly 
linked to the date by which States are required to have operational 
automated child support enforcement systems. On October 12, 1995, 
Public Law 104-35 was signed into law, which revises Section 454(24) of 
the Social Security Act. The revised statute extends the date by which 
States will have in effect, and approved by the Secretary, an 
operational automated data processing and information retrieval system 
meeting all requirements of Federal law from October 1, 1995 to October 
1, 1997. Because the deadline by which States must have operational 
automated systems has been changed, we propose to revise the 
introductory clause in paragraph (g)(3) to remove the phrase 
``Effective October 1, 1995,'' and replace it with ``Effective October 
1, 1997,''.

Section 303.105  Procedures for Making Information Available to 
Consumer Reporting Agencies

    We propose to implement the requirements of amended section 
466(a)(7) by revising the heading of 45 CFR 303.105, Procedures for 
making information available to consumer reporting agencies, to read: 
``Procedures for periodic reporting of information to consumer 
reporting agencies.''
    Under Sec. 303.105(a), the definition of ``consumer reporting 
agency'' remains the same. The definition, which mirrors the language 
in the Fair Credit Reporting Act (15 U.S.C. 1681a[f]), has not been 
changed.
    We propose to revise paragraph (b), to specify that States must use 
this procedure when a non-custodial absent parent owes overdue support 
exceeding $1,000 and is at least two months in arrears. The provision 
of information by 

[[Page 2778]]
IV-D agencies is no longer triggered by the request of a CRA, but is 
now required to be reported under the above criteria. The use of such 
procedures is optional to the State in cases where the absent parent 
owes less than $1,000 in arrears. Allowing for optional reporting in 
cases of less than $1,000 in arrears is in keeping with the Federal/
State partnership in administering child support enforcement and 
allowing for maximum State flexibility.
    States may wish to take advantage of reporting when a non-custodial 
parent owes overdue support less than $1,000 because many child support 
orders have low monthly payment amounts. Otherwise, several months 
arrearage could result before triggering reporting at the $1,000 
threshold. Some States, including California, have found it beneficial 
to report all child support accounts to CRAs for such reasons as ease 
of administration and conformance to the credit reporting industry 
standard of reporting all debt and payment information. In order to 
give States maximum flexibility, there are no further requirements 
regarding the frequency or manner in which delinquent support 
information is shared with CRAs. This flexibility is also intended to 
allow for uninterrupted reporting in States where current procedures 
may already meet the new requirement.
    The cases in which information is sent to the CRA may be further 
limited by the State through the use of State guidelines (45 CFR 
303.105(b)). Criteria may be developed to determine which cases are 
inappropriate for reporting to CRAs. For example, State developed 
guidelines might exclude the reporting of cases where abuse or violence 
has been threatened or has occurred.
    In addition, we propose to revise paragraph (b) by removing the 
second sentence specifying that State guidelines should be made 
generally available to the public as to when use or application of 
reporting child support arrearages to credit reporting agencies would 
not carry out the purposes of the program or would be otherwise 
inappropriate in the circumstances. We are proposing this revision 
since the statute mandates reporting of all cases which qualify based 
on arrearages and expressly specifies the bases for exceptions. 
Guidelines for not submitting cases are no longer appropriate.
    We invite State comments on any existing reporting criteria they 
may use. Comments received on this subject will be widely disseminated 
because examples may be helpful to other States in formulating their 
own guidelines.
    In accordance with section 466(a)(7)(C) of the Act, under proposed 
paragraph (c) of section 303.105, States are required to withhold 
information from a CRA which does not have sufficient capability to 
make accurate use of the information in a systematic and timely manner. 
In order to maximize flexibility, States will be free to use their own 
criteria in determining what constitutes a ``systematic and timely'' 
use of the reported information under amended section 466(a)(7)(C) of 
the Act. States are also required to withhold information from an 
entity which has not furnished satisfactory evidence to the State that 
it is a CRA.
    Under amended section 466(a)(7) of the Act, the provision which 
allowed for a fee for furnishing such information to be imposed on the 
requesting CRA by the State has been deleted. Therefore, we propose 
that the corresponding text involving the optional fee under the 
existing Sec. 303.105(c) be removed.
    In accordance with section 466(a)(7)(b) of the Act, paragraph (d) 
requires the State to provide the noncustodial parent an advance notice 
and an opportunity to contest the accuracy of this information. 
Paragraph (e) requires the State to comply with all applicable 
procedural due process requirements of the State before releasing the 
information. The requirements imposed in paragraphs (d) and (e) have 
been required by the statute since it was enacted in 1984 and were not 
amended. Therefore, paragraph (d) and (e) remain unchanged by this 
proposed rule.
    To ensure that this proposed rule maximizes State flexibility, we 
generally have not proposed to add regulatory requirements that go 
beyond statutory requirements. However, there is one area where we 
believe additional Federal regulatory guidance is needed--credit 
reporting in interstate cases. Because interstate cases involve 
interaction between one or more States, there is a need for national 
standards to ensure uniformity and clarity.
    The statute does not address which State (initiating or responding) 
should report to credit bureaus in interstate cases. Based on input 
that we have received from several States, Federal guidance is needed 
in this area to avoid duplication, confusion, and double-reporting. For 
example, if both the initiating and responding States report arrears 
owed under a child support order in a case, both reports may appear on 
the obligor's credit record. As a result, the credit record would 
indicate that the obligor owes two separate debts to two different 
child support agencies, when in fact the two reports are for the same 
arrearage. Such misleading double-reporting creates unnecessary 
duplication of effort for child support agencies, generates time-
consuming inquiries and complaints, and is unfair to obligors.
    To address these problems, we are proposing new paragraph (f) in 
Sec. 303.105 which provides: for cases where an initiating State 
requests, in accordance with Sec. 303.7(b), a responding State to 
enforce a support order, the responding State will report to consumer 
reporting agencies. The initiating State will not report.
    We are proposing that the responding State be responsible for 
credit reporting since it is usually the State that implements 
enforcement remedies (except for Federal income tax refund offset which 
is implemented by the initiating State). The responding State can 
coordinate credit reporting with the other enforcement techniques that 
it is using. In addition, the responding State may have the most up-to-
date payment and location information about the obligor. Finally, since 
the obligor often lives in the responding State, the responding State 
is more likely to report to credit reporting agencies which focus on 
the area where the obligor lives. Many credit reporting agencies only 
maintain records for certain localities and regions, and even a major 
credit bureau may have more complete information for individuals in a 
particular region of the country.
    Credit reporting in interstate cases where there are multiple 
support orders governing the same period of time can be particularly 
complex. Under the Uniform Reciprocal Enforcement of Support Act 
(URESA), interstate proceedings are considered ``new'' proceedings, 
even if a valid, enforceable support order already exists. As a result, 
multiple, yet valid, orders in varying amounts in different States have 
been entered for the same children. If arrearages owed for the same 
period of time under more than one order are reported to credit 
agencies, the obligor will appear to owe multiple debts even though, 
under State law, an obligor receives credit under all orders for any 
payment made. Therefore, the reporting of arrears under multiple orders 
exaggerates the amount that the obligor actually owes.
    The Uniform Interstate Family Support Act (UIFSA) and the Full 
Faith and Credit for Child Support Orders Act (Pub. L. 103-383) will 
eventually alleviate the multiple order problem. These laws, which 
together limit the ability of a State to enter or modify an order if a 
valid order already exists, will replace multiple orders with a system 

[[Page 2779]]
under which only one support order is effective at any one time. 
However, this transition will take a matter of years--until all of the 
children with multiple orders emancipate. We welcome comments 
concerning possible ways to address this multiple order problem.
    In addition, we welcome comments regarding the general issue of 
credit reporting in interstate cases, particularly whether there is a 
need for Federal regulation in this area and whether you agree with our 
proposal.
    Finally, in addition to reporting information to CRAs, States 
routinely obtain valuable location information from CRAs. The 
requirements of this section do not preclude a State from obtaining 
information from CRAs. Many States already reap the benefits of using 
CRAs as a source of valuable information. States may make requests of 
consumer reporting agencies for such purposes as location of non-
custodial parents, location of assets, and determination of ability to 
pay support.

Section 304.10  General Administrative Requirements

    We propose to replace the parenthetical phrase, ``(with the 
exception of Subpart G, Matching and Cost Sharing and Subpart I, 
Financial Reporting Requirements)'' with ``(with the exception of 45 
CFR 74.23, Cost Sharing or Matching and 45 CFR 74.52, Financial 
Reporting).'' We are proposing this revision to coincide with 
substantial revisions of 45 CFR Part 74 by DHHS August 25, 1994 (59 FR 
43760).

Section 304.20  Availability and Rate of Federal Financial 
Participation

    We propose to make several technical revisions to update and 
correct this section. In paragraph (b)(1)(iii), we propose to replace 
the phrase ``Subpart P'' with ``* * * in accordance with the 
Procurement Standards found in 45 CFR 74.40 et. seq..'' We are 
proposing this revision to coincide with substantial revisions of 45 
CFR Part 74 by DHHS August 25, 1994 (59 FR 43760) because the 
regulation is applicable to both agencies. In paragraph (b)(1)(vi), we 
propose to change the reference from ``Sec. 302.16'' to 
``Sec. 304.15.'' We propose this technical revision because Sec. 304.15 
is a cross-reference to the DHHS regulations on cost allocation at 45 
CFR Part 95, Subpart E which replaced 45 CFR 302.16. In paragraph 
(b)(3)(iv), we propose to replace ``attachment'' with ``withholding'', 
in order to make the terminology consistent with the enactment of the 
Child Support Enforcement Amendments of 1984 (Pub. L. 98-378) which 
created a new section 466 of the Act including paragraph (a)(1) and (b) 
for ``wage withholding'' and implementing regulations at 45 CFR 
303.100. In paragraph (b)(8), we propose to correct a clerical error by 
replacing ``Sec. 302.2'' with ``Sec. 303.2.'' Finally, in paragraph 
(b)(11), we propose to remove ``Part 306, Subpart B, of this chapter'' 
and replace with ``sections 303.30 and 303.31''. We are proposing this 
technical fix to update this section to reflect the revision made in 
1990 to redesignate Part 306 Subpart B as sections 303.30 and 303.31.

Section 304.95  State Commissions on Child Support

    This rule was required by section 15 of Public Law 98-378 to be 
implemented by December 1, 1984 with a report of findings and 
recommendations to the Governor by October 1, 1985. We propose to 
remove this section as the requirement for a State to have a Commission 
on Child Support as a condition of eligibility for Federal funding 
expired on October 1, 1985. Although it is no longer mandatory, nothing 
precludes a State from having such a Commission.

Part 306  Optional Cooperative Agreements for Medical Support 
Enforcement; Section 306.0 Scope of This Part, Section 306.2 
Cooperative Agreement, Section 306.10 Functions To Be Performed under a 
Cooperative Agreement, Section 306.11 Administrative Requirements of 
Cooperative Agreements, Section 306.20 Prior Approval of Cooperative 
Agreements, Section 306.21 Subsidiary Cooperative Agreements With 
Courts and Law Enforcement Officials, Section 306.22 Purchase of 
Service Agreements, and Section 306.30 Source of Funds

    Cooperative agreements for medical support enforcement was first 
added to the IV-D regulations (Part 306) in the February 11, 1980 joint 
final rule by the Health Care Financing Administration (HCFA) and OCSE 
implementing section 11 of Public Law 95-142 which added a new section 
1912 to the Social Security Act. Section 1912 authorized the Third 
Party Liability (TPL) program in the Medicaid agency and required the 
State to require Medicaid recipients, as a condition of Medicaid 
eligibility, to assign their support rights to any medical support and 
to cooperate with the State in establishing paternity and obtaining 
third party payments. Section 1912 also required the State plan to 
provide for the State Medicaid agency to make cooperative agreements 
with the State IV-D agency, and other appropriate agencies, courts, and 
law enforcement officials to assist in the TPL program, with an 
incentive payment to political subdivision, other State, or other 
entity that makes the TPL collection.
    As a result of an increasing degree of responsibility for IV-D 
agencies to perform medical support functions, very few of the 
functions listed in Sec. 306.10 continue to be optional. Many of the 
requirements listed as ``optional'' for IV-D agencies to perform under 
agreements with State Medicaid agencies have become mandatory under 
title IV-D (e.g., obtain sufficient health insurance information, 
Sec. 303.30; secure health insurance coverage, Sec. 303.31). This 
leaves only two optional procedures in Sec. 306.10 ((f) file insurance 
claims and (h) take direct action to recover TPL).
    We propose that Part 306 be removed and reserved. This will give 
States flexibility to enter into cooperative agreements with Medicaid 
agencies to perform activities which are beyond the mandatory medical 
support activities of the IV-D program. Cooperative agreements for 
medical support enforcement is a statutory requirement mandated on the 
Health Care Financing Administration (HCFA) which was placed in 
regulation at 42 CFR 433.152 but optional for IV-D. This proposed 
removal will not affect the continuation of existing cooperative 
agreements or formulation of future agreements between State child 
support agencies and State Medicaid agencies.

Section 307.5  Mandatory Computerized Support Enforcement Systems

    On October 12, 1995, Public Law 104-35 was signed into law, which 
revises Section 454(24) of the Social Security Act. The revised statute 
extends the date by which States will have in effect, and approved by 
the Secretary, an operational automated data processing and information 
retrieval system meeting all requirements of Federal law from October 
1, 1995 to October 1, 1997. Because the deadline by which States must 
have operational automated systems has been changed, we propose to 
remove the date in paragraph (a) ``October 1, 1995'' and replace it 
with ``October 1, 1997.''

Section 307.15  Approval of Advance Planning Documents for Computerized 
Support Enforcement Systems

    On October 12, 1995, Public Law 104-35 was signed into law, which 
revises Section 454(24) of the Social Security Act. The revised statute 
extends the date by which States will have in effect, and approved by 
the Secretary, an operational automated data processing 

[[Page 2780]]
and information retrieval system meeting all requirements of Federal 
law from October 1, 1995 to October 1, 1997. Because the deadline by 
which States must have operational automated systems has been changed, 
we propose to remove the date in paragraph (b)(2) ``October 1, 1995'' 
and replace it with ``October 1, 1997.''

Regulatory Flexibility Analysis

    The Secretary certifies, under 5 U.S.C. 605(b), as enacted by the 
Regulatory Flexibility Act (Pub. L. 96-354), that this proposed 
regulation will not result in a significant impact on a substantial 
number of small entities. The primary impact is on State governments 
and individuals and results from restating the provisions of the 
statute. State governments are not considered small entities under the 
Act.

Regulatory Impact Analysis

    Executive Order 12866 requires that regulations be reviewed to 
ensure that they are consistent with the priorities and principles set 
forth in the Executive Order. The Department has determined that this 
rule is consistent with these priorities and principles. No costs are 
associated with this rule as it merely ensures consistency between the 
statute and regulations.

List of Subjects

45 CFR Part 301

    Child support, Grant programs/social programs.

45 CFR Part 302

    Child support, Grant programs/social programs, Reporting and 
recordkeeping requirements.

45 CFR Parts 303 and 304

    Child support, Grant programs/social programs, Reporting and 
recordkeeping requirements.

45 CFR Part 306

    Child support, Grant programs/social programs, Medicaid.

45 CFR Part 307

    Child support, Grant programs/social programs, Computerized support 
enforcement systems.

(Catalog of Federal Domestic Assistance Programs No. 93.563, Child 
Support Enforcement Program)

    Dated: December 1, 1995.
Mary Jo Bane,
Assistant Secretary for Children and Families.
    For the reasons discussed above, we propose to amend title 45 
chapter III of the Code of Federal Regulations as follows:

PART 301--STATE PLAN APPROVAL AND GRANT PROCEDURES

    1. The authority citation for Part 301 continues to read as set 
forth below:

    Authority: 42 U.S.C. 651 through 658, 660, 664, 666, 667, 1301, 
and 1302.

    2. Section 301.1 is amended by revising the definition for 
``Applicable matching rate'' to read as follows:


Sec. 301.1  General definitions.

* * * * *
    Applicable matching rate means the rate of Federal funding of State 
IV-D programs' administrative costs for the appropriate fiscal year. 
The applicable matching rate for FY 1990 and thereafter is 66 percent.
* * * * *


Sec. 301.15  [Amended]

    3. In 301.15, paragraph (a)(1) is amended by revising ``Social and 
Rehabilitation Service, Attention: Finance Division, Washington, DC 
20201'' to read ``Administration for Children and Families, Office of 
Program Support, Division of Formula, Entitlement and Block Grants, 370 
L'Enfant Promenade, S.W., Washington, D.C. 20447'' and paragraph (e) is 
amended by revising, ``Subpart G Matching and Cost Sharing'' to read 
``45 CFR 74.23 Cost Sharing or Matching'' and revising ``Subpart I 
Financial Reporting Requirements'' to read ``45 CFR 74.52 Financial 
Reporting.''
PART 302--STATE PLAN REQUIREMENTS
    4. The authority citation for Part 302 continues to read as 
follows:

    Authority: 42 U.S.C. 651 through 658, 664, 666, 667, 1302, 
1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), 1396(k).


Sec. 302.15  [Amended]

    5. In section 302.15, paragraph (b) is removed and paragraphs (a) 
introductory text, (a)(1) introductory text, (a)(1)(i) through (vii) 
and (2) are redesignated as Sec. 302.15 introductory text, (a) 
introductory text, (a)(1) through (7) and (b) respectively.


Sec. 302.33  [Amended]

    6. In section 302.33, paragraph (c)(1) is removed, paragraphs 
(c)(2) and (c)(3) are redesignated as (c)(1) and (c)(2), and paragraph 
(e) is removed.


Sec. 302.34  [Amended]

    7. In section 302.34, paragraph (b) is removed, paragraph (a) is 
amended by removing the paragraph designation and by adding ``under 
Sec. 303.107'' after ``cooperative arrangements'' in the first 
sentence.


Sec. 302.36  [Amended]

    8. In section 302.36, paragraph (a) introductory text is amended by 
removing ``for:'' and inserting a period in its place at the end of the 
paragraph and removing paragraphs (a)(1) through (a)(5).


Sec. 302.37  [Removed]

    9. Section 302.37 is removed.
    10. In section 302.54, paragraph (a) is removed, paragraphs (b) and 
(c) are redesignated (a) and (b), respectively, the reference to 
``Until September 30, 1995'' in new designated paragraph (b)(1)(i) is 
revised to read ``Until September 30, 1997'', and newly designated 
paragraph (a)(2) is revised to read as follows:


Sec. 302.54  Notice of collection of assigned support.

* * * * *
    (a) * * *
    (2) The monthly notice must list separately payments collected from 
each absent parent when more than one absent parent owes support to the 
family and must indicate the amount of current support collected, the 
amount of arrearages collected and the amount of support collected 
which was paid to the family.
* * * * *
    11. Section 302.70(a)(7) is revised to read as follows:


Sec. 302.70  Required State laws.

    (a) * * *
    (7) Procedures which require the State to periodically report 
information regarding the amount of overdue support owed by an absent 
parent to consumer reporting agencies in accordance with Sec. 303.105 
of this chapter;
* * * * *


Sec. 302.85  [Amended]

    12. In Section 302.85, reference to ``October 1, 1995'' in 
paragraph (a)(2) is revised to read ``October 1, 1997.''

PART 303--STANDARDS FOR PROGRAM OPERATIONS

    13. The authority citation for Part 303 continues to read as 
follows:

    Authority: 42 U.S.C. 651 through 658, 660, 663, 664, 666, 667, 
1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), and 1396(k).


Sec. 303.10  [Removed]

    14. Section 303.10 is removed.


Sec. 303.31  [Amended]

    15. In 303.31, reference to ``Sec. 306.50(a)'' is revised to read 
Sec. 303.30 in paragraphs (b)(6) and (b)(7).
    16. Section 303.73 is revised to read as follows: 
    
[[Page 2781]]



Sec. 303.73  Applications to use the courts of the United States to 
enforce court orders.

    The IV-D agency may apply to the Secretary for permission to use a 
United States district court to enforce a support order of a court of 
competent jurisdiction against an absent parent who is present in 
another State if the IV-D agency can furnish evidence in accordance 
with instructions issued by the office.


Sec. 303.100  [Amended]

    17. In section 303.100, reference to ``October 1, 1995'' in 
paragraph (g)(3) is revised to read ``October 1, 1997.''
    18-19. Section 303.105 is amended by revising the section heading 
and paragraphs (b) and (c) and adding new paragraph (f) to read as 
follows:


Sec. 303.105  Procedures for periodic reporting of information to 
consumer reporting agencies.

* * * * *
    (b) For cases in which the amount of overdue support exceeds $1,000 
and is at least two months in arrears, the IV-D agency must have in 
effect procedures to periodically report the name of the absent parent 
and the amount of arrears to consumer reporting agencies.
    (c) The information shall not be made available to a consumer 
reporting agency which:
    (1) the State determines does not have sufficient capability to 
make use of the information in a systematic and timely manner; or
    (2) has not furnished satisfactory evidence to the State that it is 
a consumer reporting agency.
* * * * *
    (f) Interstate. For cases where an initiating State requests, in 
accordance with Sec. 303.7(b), a responding State to enforce a support 
order, the responding State will report to consumer reporting agencies 
in accordance with this section. The initiating State will not report.

PART 304--FEDERAL FINANCIAL PARTICIPATION

    20. The authority citation for Part 304 continues to read as 
follows:

    Authority: 42 U.S.C. 651 through 655, 657, 1302, 1396a(a)(25), 
1396b(d)(2), 1396b(o), 1396(p), and 1396(k).


Sec. 304.10  [Amended]

    21. In section 304.10, the parenthetical phrase ``(with the 
exception of Subpart G, Matching and Cost Sharing and Subpart I, 
Financial Reporting Requirements)'' is revised to read ``(with the 
exception of 45 CFR 74.23, Cost Sharing or Matching and 45 CFR 74.52, 
Financial Reporting).''


Sec. 304.20  [Amended]

    22. In section 304.20, paragraph (b)(1)(iii) introductory text is 
amended by replacing ``Subpart P'' with ``in accordance with the 
Procurement Standards found in 45 CFR 74.40 et seq.'', paragraph 
(b)(1)(vi) is amended by revising the reference to ``Sec. 302.16'' to 
read ``Sec. 304.15'', paragraph (b)(3)(iv) is amended by revising the 
term ``attachment'' to read ``withholding;'', paragraph (b)(8) is 
amended by revising the reference ``Sec. 302.2'' to read ``Sec. 303.2'' 
and, paragraph (b)(11) is amended by revising ``Part 306, Subpart B, of 
this chapter'' to read ``sections 303.30 and 303.31''.


Sec. 304.95  [Removed]

    23. Section 304.95 is removed.

PART 306--OPTIONAL COOPERATIVE AGREEMENTS FOR MEDICAL SUPPORT 
ENFORCEMENT--[REMOVED AND RESERVED]

    24. Part 306 is removed and reserved.

PART 307--COMPUTERIZED SUPPORT ENFORCEMENT SYSTEMS

    25. The authority citation for part 307 continues to read as 
follows:

    Authority: 42 U.S.C. 652 through 658, 664, 666, 667, and 1302.


Sec. 307.5  [Amended]

    26. In section 307.5, reference to ``October 1, 1995'' in paragraph 
(a) is revised to read ``October 1, 1997.''


Sec. 307.15  [Amended]

    27. In section 307.15, reference to ``October 1, 1995'' in 
paragraph (b)(2) is revised to read ``October 1, 1997.''

[FR Doc. 96-1254 Filed 1-26-96; 8:45 am]
BILLING CODE 4150-04-P