[Federal Register Volume 63, Number 40 (Monday, March 2, 1998)]
[Proposed Rules]
[Pages 10173-10179]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5181]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 307

RIN 0970--AB71


Automated Data Processing Funding Limitation for Child Support 
Enforcement Systems

AGENCY: Office of State Systems (OSS), OPS, ACF, HHS.

ACTION: Notice of Proposed rulemaking.

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SUMMARY: The Federal share of funding available at an 80 percent 
matching rate for child support enforcement automated systems changes 
resulting from the Personal Responsibility and Work Opportunity 
Reconciliation Act is limited to a total of $400,000,000 for fiscal 
years 1996 through 2001. This proposed rule responds to the requirement 
that the Secretary of Health and Human Services issue regulations which 
specify a formula for allocating this sum among the States, Territories 
and eligible systems.

DATES: Consideration will be given to written comments received by May 
1, 1998.

ADDRESSES: Address comments to: Administration for Children and 
Families, Department of Health and Human Services, 370 L'Enfant 
Promenade, SW, Washington, DC, 20447. Attention: Mark Ragan, Director, 
Office of State Systems.

    Comments will be available for public inspection Monday through 
Friday, 8 a.m. to 4:30 p.m. on the third floor of the Department's 
offices at 200 Independence Avenue, SW, Washington, DC, 20201.

FOR FURTHER INFORMATION CONTACT: Helen H. Smith, (202) 690-6639.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    This proposed rule does not require information collection 
activities and, therefore, no approvals are necessary under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). In a separate 
transmittal, however, the Administration for Children and Families is 
submitting for approval the information collection activities under 45 
CFR Sec. 307.15 which is referenced in this proposed rule.

Statutory Authority

    These proposed regulations are published under the authority of the 
Social Security Act (the Act), as amended by the Personal 
Responsibility and Work Opportunity Reconciliation Act (PRWORA; Pub. L. 
104-193) and section 5555 of the Balanced Budget Act of 1997 (Pub. L. 
105-33). Section 344(b) of Pub. L. 104-193 amends section 455(a) of the 
Act to provide enhanced Federal matching for approved development and 
implementation costs of automated child support enforcement systems.
    Section 344(b)(2) of PRWORA establishes a temporary limitation on 
payments under the special Federal matching rate of 80 percent. The 
Secretary of Health and Human Services may not pay more than 
$400,000,000 in the aggregate for approved systems development and 
implementation costs in fiscal years 1996 through 2001. Under this 
section the Secretary is also required to prescribe in regulation a 
formula for allocating the available $400,000,000 among the States. 
According to section 344(b)(2)(C) the formula for allocating the 
specified funds among the States shall take into account the relative 
size of State IV-D caseloads and the level of automation required to 
meet the IV-D automated data processing requirements. Section 5555 of 
The Balanced Budget Act of 1997 amends the requirements in this section 
of PRWORA to include certain systems in the allocation formula.

Regulatory Provisions

Background

    With the enactment of the Family Support Act of 1988 (Pub. L. 100-
485), States were required to have an operational child support 
enforcement system, certified by the Office of Child Support 
Enforcement (OCSE) as meeting the requirements specified in that 
statute and implementing regulations, no later than October 1, 1995. 
(Pub. L. 104-85 subsequently extended this deadline to October 1, 
1997.) PRWORA specifies new requirements in section 454A of the Act 
which must be included in a State child support enforcement

[[Page 10174]]

system no later than October 1, 2000. The new automation requirements 
require State systems to perform functions including: Controlling and 
accounting of Federal, State and local funds to carry out the child 
support enforcement program; maintaining data necessary to meet Federal 
reporting requirements; maintaining data on State performance for 
calculation of performance indicators; safeguarding of the integrity 
and security of data in the automated system; developing a State case 
registry; performing data matches; and providing expedited 
administrative procedures. (PRWORA requires the establishment of State 
New Hire and State Disbursement Units but does not require them to be 
an integrated part of the Statewide automated child support system.)
    For fiscal years 1996 through 2001, the Department of Health and 
Human Services (HHS) will reimburse 80 percent of approved State 
expenditures for development and implementation of automated systems 
which meet the requirements of section 454(16) of the Act as in effect 
on September 30, 1996 (i.e., Family Support Act requirements which must 
be completed by October 1, 1997), the amended section 454(16), and new 
section 454A of the Act. The Federal share of reimbursement to States 
is limited to an aggregate total of $400,000,000. Once a State reaches 
its allocated share of the $400,000,000, Federal funding remains 
available at the 66 percent rate for additional approved expenditures 
incurred in developing and implementing child support enforcement 
systems. Child Support Enforcement Action Transmittal 96-10 (OCSE-AT-
96-10) provides instructions for submitting claims for Federal 
reimbursement at the 80 percent rate.
    PRWORA requires the Secretary of Health and Human Services to issue 
regulations which specify a formula for allocating the $400,000,000 
available at 80 percent FFP among the States and Territories. The 
Balanced Budget Act Amendments add specified systems to the entities 
included in the formula. The allocation formula must take into account 
the relative size of State and systems IV-D (child support enforcement) 
caseloads and the level of automation needed to meet title IV-D 
automated data processing requirements. Accordingly, we propose to 
revise 45 CFR Part 307 to include conforming changes and to add 
Sec. 307.31.

Conditions That Must Be Met for 80 Percent Federal Financial 
Participation

    Pub. L. 104-193 provides enhanced funds to complete development of 
child support enforcement systems which meet the requirements of both 
the Family Support Act and PRWORA. From this we conclude that no change 
in the conditions for receipt of funds was anticipated by Congress. 
Thus, we propose to retain in 45 CFR 307.31 the same conditions for 
receipt funds at 80 percent FFP which appear at Sec. 307.30 (a), (b), 
(c), and (d) and apply to claims for FFP at the 90 percent rate.
    Throughout this notice of proposed rulemaking we use ``State'' as 
the inclusive term for States, Territories and approved systems as 
described in 42 U.S.C. 655(a)(3)(B)(iii) (section 455(a)(3)(B)(iii) of 
the Act) as added to the Act by section 5555 of the Balanced Budget Act 
of 1997 (Pub. L. 105-33). The technical amendments to section 
455(a)(3)(B) of the Act changed the entities included in the allocation 
formula by adding ``system'' to States and Territories. For purposes of 
this proposed rule, a system eligible for enhanced funding is a system 
approved by the Secretary to receive funding at the 90 percent rate for 
the purpose of developing a system that meets the requirements of 
section 454(16) of the Act (42 U.S.C. 654(16)) (as in effect on and 
after September 30, 1995) and section 454A of the Act (42 U.S.C. 654A), 
including a system that received funding for this purpose pursuant to a 
waiver under section 1115(a) of the Act (42 U.S.C. 1315(a)). We believe 
that the Los Angeles County child support enforcement system is the 
only non-State system which meets these requirements.
    Therefore, the proposed Sec. 307.31(a) provides that until 
September 30, 2001, Federal financial participation (FFP) is available 
at the 80 percent rate for expenditures for the planning, design, 
development, installation, or enhancement of a child support 
enforcement system meeting the requirements described in Secs. 307.5 
and 307.10. To receive Federal reimbursement: (1) A State must have an 
approved advance planning document (APD); (2) the system must meet the 
requirements of Sec. 307.10; (3) OCSE must determine that the 
expenditures are consistent with the APD; (4) OCSE must also determine 
that the computerized support enforcement system is designed 
effectively and efficiently and will improve the management and 
administration of the State IV-D plan; (5) the State IV-D agency must 
agree in writing to use the system for a period of time which is 
consistent with the APD approved by OCSE; and (6) the State or local 
government must have ownership rights in any software, software 
modifications and associated documentation that is designed, developed, 
installed or enhanced with Federal funds.
    In proposed Sec. 307.31(b) the requirements for FFP at the 80 
percent rate in the costs of hardware and proprietary software are the 
same as the requirements at the 90 percent rate. Until September 30, 
2001, FFP at the 80 percent rate is available in expenditures for the 
rental or purchase of hardware for the planning, design, development, 
installation, or enhancement of a computerized support enforcement 
system as described in Sec. 307.10. FFP at the 80 percent rate is 
available until September 30, 2001, for the rental or purchase of 
proprietary operating/vendor software necessary for the operation of 
hardware during the planning, design, development, installation, 
enhancement or operation of a child support enforcement system in 
accordance with the OCSE guideline entitled ``Automated Systems for 
Child Support Enforcement: A Guide for States.'' FFP at the 80 percent 
rate is not available, however, for proprietary application software 
developed specifically for a computerized support enforcement system.
    With proposed Sec. 307.31(c), the Department of Health and Human 
Services continues to reserve a royalty-free, non-exclusive and 
irrevocable license to reproduce, publish or otherwise use, and to 
authorize others to use for Federal Government purposes, software, 
software modifications, and documentation developed under Sec. 307.10. 
This license permits the Department to authorize the use of software, 
software modifications and documentation developed under Sec. 307.10 in 
another project or activity funded by the Federal Government.
    Proposed Sec. 307.31(d) reiterates the consequences of suspension 
of the APD. If OCSE suspends approval of an APD during the planning, 
design, development, installation, enhancement or operation of the 
system, FFP is disallowed as of the date the State failed to comply 
substantially with the approved APD. FFP at the 80 percent and 
applicable matching rates is not available for any expenditure incurred 
under the APD after the date of the suspension until the date OCSE 
determines that the State has taken the actions specified in the notice 
of suspension. OCSE will notify the State in writing upon making such a 
determination.

[[Page 10175]]

    Note that for conformance, we propose to add to Sec. 307.40(a) of 
the regulation a reference to ``Sec. 307.31(d).''
    As required in section 344(a)(3) of PRWORA, the Administration for 
Children and Families is developing Federal regulations for the 
implementation of the child support enforcement systems requirements 
mandated by section 454A of the Social Security Act and listed in the 
background section above. We anticipate issuing proposed rules in the 
near future which will revise 45 CFR Part 307 to reflect these 
requirements.
    These regulations specify the conditions that States must meet in 
order to receive funding (both enhanced and regular) and certification. 
Under these rules, we will set out provisions to: ensure the 
coordination of Federal financial participation and States' progress 
toward implementing PRWORA system requirements; hold States accountable 
for ensuring that their automation plans are effectively designed and 
implemented; and, enable States to produce the results envisioned under 
PRWORA. Because of the interrelationship between these two rules, ACF 
will assess comments on both rules and issue final rules in a 
coordinated manner.
    In addition, ACF will revise the existing OCSE publication, 
``Automated Systems for Child Support Enforcement: A Guide for States'' 
through the issuance of a series of action transmittals to explain the 
new and revised child support enforcement system functional 
requirements. Each action transmittal will be circulated in draft form 
for review and comment by the States before a final document is issued.

Limitation on Payments to States

    Section 344(b)(2) of PRWORA limits the Federal share of payments at 
the 80 percent rate to $400,000,000 over fiscal years 1996 through 
2001. The proposed Sec. 307.31(e) therefore provides that FFP at the 80 
percent rate may not exceed $400,000,000 in the aggregate for fiscal 
years 1996 through 2001.
    We include the amount of the funding limitation in the regulation 
because it caps the funds available to each State at the special 
matching rate. The statute requires an allocation of the available 
$400,000,000 based on a formula established by the Secretary, HHS.
    State implementation of all automated systems requirements enacted 
with the Family Support Act of 1988 is to be accomplished by October 1, 
1997. Subsequent requirements enacted with or before PRWORA must be met 
by October 1, 2000. For fiscal years 1996 through 2001, the FFP rate 
for the provisions of this section is 80 percent. Although system 
implementation must be completed no later than October 1, 2000, Federal 
funds at the 80 percent FFP rate remain available through September 30, 
2001, to accommodate contractually mandated ``holdback'' payments and 
other system implementation-related expenses.
    As indicated above, FFP at the 80 percent rate is available only 
for expenditures made by a State on or before September 30, 2001, for 
system development and implementation activities which meet all 
statutory and regulatory requirements. Under section 1132 of the Act 
and Federal regulations at 45 CFR part 95, subpart A, States have two 
years from the end of a quarter in which an expenditure is made to file 
a claim for Federal funding for that cost. Therefore, approved system 
implementation expenditures made in 2001 may be claimed for Federal 
funding at the 80 percent FFP rate as late as 2003.

Allocation Formula

    Section 344(b)(2)(C) of PRWORA requires the Secretary to allocate 
by formula the $400,000,000 available at the 80 percent FFP rate. This 
section specifies that the formula take into account the relative size 
of State IV-D caseloads and the level of automation needed to meet 
applicable automatic data processing requirements. The legislative 
history does not elaborate on the meaning of these factors.
    The allocation formula proposed in this section is the product of 
consultation with a wide range of stakeholders. We sought information 
from child support enforcement systems experts, financial experts, 
economists, State IV-D directors, and national associations. Before 
drafting regulations we asked States to suggest approaches for 
allocating the available Federal share of the funds. In a number of 
open forums we sought suggestions for the allocation formula. An 
internal working group considered the information from States, reviewed 
the suggestions, then developed the proposed allocation formula.
    Simply stated, the proposed formula first allots a base amount of 
$2,000,000 to each State to take into account the level of automation 
needed to meet the automated data processing requirements of title IV-
D. The formula, then, allots an additional amount to States based on 
both their reported IV-D caseload and their potential caseload based on 
Census data on children living with one parent.
    As indicated earlier, we use ``State'' as the inclusive term for 
States, Territories and systems described in 42 U.S.C. 
655(a)(3)(B)(iii) (455(a)(3)(B)(iii) of the Act) as amended by section 
5555 of the Balanced Budget Act of 1997. The technical amendments to 
section 455(a)(3)(B) of the Act changed the entities included in the 
allocation formula by adding ``system'' to States. As noted earlier, we 
believe that the Los Angeles County child support enforcement system is 
the only non-State system which meets the requirements specified in 
section 455(a)(3)(B)(iii) of the Act.
    Before considering a base level of funding, we examined several 
approaches for taking into account States' level of automation. First, 
we contemplated allocating funds based on the certification status of a 
State's child support enforcement automated system. However, we were 
advised of several flaws in this approach: it does not reflect current 
automation needs; it could reward States that are behind schedule and 
not certified for Family Support Act standards by giving them a larger 
allocation to meet PRWORA requirements and complete their statewide 
automated systems; and, it could advantage States with certified but 
obsolete systems. We then considered establishing a ranking system 
based on dollars invested in systems to date. This approach is 
problematic because it penalizes States that were early developers of 
child support enforcement systems and it does not address the new 
requirements. We also considered grading States' systems on a set of 
criteria, but we came to believe that this was an overly complex 
approach with numerous and subjective variables.
    As an alternative, several States suggested that the formula 
allocate a base amount to each State to take into account the level of 
automation. This is the approach we are proposing in the following 
formula.
    Using a funding base and then varying the allocation by current and 
potential caseload reflects the flexibility States have, and have had, 
in designing their systems. Each State develops its system to meet its 
particular needs. Thus, each State's system development plan takes into 
account factors such as: caseload size; organization (county 
administered, state-administered, court involvement); State and local 
business practices for case processing and management; the process for 
setting and enforcing orders (court or administrative process); 
responsiveness and capacity of its contractors; State planning process; 
availability of State funding and resources.

[[Page 10176]]

    A number of areas common to all State systems will need additional 
investment in order to meet the new PRWORA requirements. Primarily, the 
increased systems costs are associated with changes in distribution, 
performance indicators, reporting, interfaces and case management, the 
State Case Registry and wage withholding activities on non-IV-D cases. 
Therefore, we believe it is reasonable to allocate a base amount to 
each State.
    A base level of funding for each State takes into account the level 
of automation by recognizing that all States have similar costs for 
planning, design, programming and development regardless of the size of 
their caseloads. A minimum amount is provided to each State to ensure 
support for a State's development effort. In order to treat States 
fairly in determining this minimum level of funding, we looked to our 
experience with basic project costs (e.g., planning, design, 
programming, and development). We believe a base amount of $2,000,000 
per State fairly represents the start-up costs which are common to all 
States. Table 2 in Appendix A shows the distribution of the base amount 
to each State, Territory and Los Angeles County.
    States suggested various percentages of the available funds which 
should be set aside to distribute as equal base amounts to each State. 
Obviously, as the portion of the funds designated for the base amount 
increases, the portion available to distribute based on relative 
caseload size decreases. Changes in the portion set aside for minimum 
funding to each State could advantage or disadvantage some States 
(e.g., allocating a larger percentage of funds to a base amount 
advantages States with small caseloads). Allocating a minimum of 
$2,000,000 to each State accounts for a little over one-quarter of the 
$400,000,000 available from federal funds. As discussed in the 
following paragraphs, our proposal for taking into account the relative 
size of State IV-D caseloads in the allocation formula also considers 
the scope of changes that States must make in their child support 
enforcement systems to meet PRWORA requirements. Therefore, we believe 
that using one-quarter of the available funds for the base amount is 
reasonable.
    In addition to the base level of funding which takes into account 
States' levels of automation, the proposed allocation formula's 
calculation of relative caseload size also addresses the changes that 
States must make in their child support enforcement systems in order to 
meet PRWORA requirements. Section 311 of PRWORA mandates that child 
support enforcement systems include information on all new and modified 
child support orders in the State as of October 1, 1998 as well as 
information on all cases receiving services under title IV-D. 
Effectively, this increases the potential child support enforcement 
caseload maintained on a State's automated system to include almost all 
children in a State who are not living with both parents. Since the 
majority of States must increase their automated systems capacity 
because of this expanding caseload, the use of a census factor based on 
the size of the child population not living with both parents helps 
take into account the need for additional capacity building.
    With this in mind, the proposed formula allocates the remaining 
funds, after the base amount is assigned to each State, by an 
Allocation Factor. A Caseload Factor and a Census Factor are averaged 
to yield the Allocation Factor. Table 1 shows by State the calculation 
of the Allocation Factor from caseload and census data.
    At this time caseload and census data are not available for Los 
Angeles County. Therefore, the tables in appendix A show a base amount 
allocated to Los Angeles County and blank cells for the caseload factor 
and the census factor. With a base amount assigned for Los Angeles 
County, we can calculate the total remaining funds available for 
allocation among the other States. California's caseload factor and 
census factor represent the total for the State, including Los Angeles 
County. The California IV-D agency and the Los Angeles County IV-D 
agency have been asked to provide us with caseload and census data, as 
described below, showing Los Angeles County's share of the California 
total.
    The Caseload Factor is the ratio of the six-year average IV-D 
caseload as reported by a State to the OCSE for fiscal years 1990-1995 
to the total six-year average caseload in all States for the same 
period. States differ in the percentage of total child support cases 
which receive IV-D services and thus, are included in the IV-D system. 
For example, some States routinely include all court-ordered support 
cases in the child support enforcement system. In addition, all States 
have some duplication in their caseload count due to interstate cases. 
To compensate for counting variations, we propose averaging the 
caseloads as reported by States for fiscal years 1990-1995. We 
considered using shorter periods for averaging, (e.g., 2 years, 4 
years) but we decided on the period from 1990-1995 because it minimizes 
variations in each State's reported caseload.
    The Census Factor is the ratio of the number of children in a State 
with one parent living elsewhere as reported in the 1992 Current 
Population Survey-Child Support Supplement to the total number of such 
children in all States. Data will be taken from the most recent Current 
Population Survey-Child Support Supplement, which is a national survey 
conducted by the Census Bureau every two years. We propose to use 
census data on children with one parent living elsewhere because this 
represents the maximum number of children living in the State who could 
potentially receive services from the IV-D program.

    Note: It is also the same data set required by statute to 
determine the allotments for the Access and Visitation Grants which 
the OCSE will issue to the States under section 391 of PRWORA.

    Therefore, the proposed Sec. 307.31(f) provides that payments to 
individual States will be equal to the sum of a $2,000,000 base amount 
and an additional amount as determined by the Allocation Factor. The 
Allocation Factor is an average of the Caseload and Census Factors 
which yields the percentage that is used to calculate a State's 
allocation of the $400,000,000 (less the amounts set aside for the 
base).
    Table 1 shows by State the Caseload Factors and the Census Factors 
and the calculation of the Allocation Factor. Table 2 displays the 
amount each State would be allotted from the $400,000,000 under the 
proposed allocation formula. The tables are printed in Attachment A at 
the end of this NPRM.

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.

Regulatory Flexibility Analysis

    Consistent with the Regulatory Flexibility Act (Pub. L. 96-354) 
which requires the Federal Government to anticipate and reduce the 
impact of rules and paperwork requirements on small business and other 
small entities, the Secretary certifies that this rule has no 
significant effect on a substantial number of small entities. The 
primary impact of this proposed regulation is on State governments. 
State governments are not considered small entities under the Act. 
Therefore, a regulatory flexibility analysis is not required.

[[Page 10177]]

Unfunded Mandates Act

    The Department has determined that this proposed rule is not a 
significant regulatory action within the meaning of the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4).

List of Subjects in 45 CFR Part 307

    Child support, Computer technology, Grant programs--social 
programs.

(Catalog of Federal Domestic Assistance Program No. 93.023, Child 
Support Enforcement Program)

    Dated: September 19, 1997.
Olivia A. Golden,
Principal Deputy Assistant Secretary for Children and Families.
    Approved: November 5, 1997.
Donna E. Shalala,
Secretary, Department of Health and Human Services.

    For the reasons set forth in the preamble, 45 CFR part 307 is 
proposed to be amended as follows:

PART 307--COMPUTERIZED SUPPORT ENFORCEMENT SYSTEMS

    1. The authority citation for part 307 is revised to read as 
follows:

    Authority: 42 U.S.C. 652 through 658, 664, 666 through 669A, and 
1302.

    2. A new Sec. 307.31 is added to read as follows:


Sec. 307.31  Federal financial participation at the 80 percent rate for 
computerized support enforcement systems.

    (a) Conditions that must be met for 80 percent FFP. Until September 
30, 2001, Federal financial participation is available at the 80 
percent rate to States, Territories and systems defined in 42 U.S.C. 
655(a)(3)(B)(iii) (455(a)(3)(B)(iii) of the Act) (hereafter referred to 
as ``States'') for expenditures for the planning, design, development, 
installation, or enhancement of a computerized support enforcement 
system meeting the requirements as described in Secs. 307.5 and 307.10 
of this part or 42 U.S.C 654(16) (454(16) of the Act), if:
    (1) The Office has approved an APD in accordance with Sec. 307.15 
of this part;
    (2) The Office determines that the system meets the requirements 
specified in Sec. 307.10, or 42 U.S.C 654(16) (454(16) of the Act);
    (3) The Office determines that the expenditures incurred are 
consistent with the approved APD;
    (4) The Office determines that the computerized support enforcement 
system is designed effectively and efficiently and will improve the 
management and administration of the State IV-D plan;
    (5) The State IV-D agency agrees in writing to use the system for a 
period of time which is consistent with the APD approved by the Office; 
and
    (6) The State or local government has ownership rights in software, 
software modifications and associated documentation that is designed, 
developed, installed or enhanced under this section subject to the 
Department of Health and Human Services license specified in paragraph 
(c) of this section.
    (b) Federal financial participation in the costs of hardware and 
proprietary software. (1) Until September 30, 2001, FFP at the 80 
percent rate is available for expenditures for the rental or purchase 
of hardware for the planning, design, development, installation, or 
enhancement of a computerized support enforcement system as described 
in Sec. 307.10 or 42 U.S.C 654(16) (454(16) of the Act).
    (2) Until September 30, 2001, FFP at the 80 percent rate is 
available for the rental or purchase of proprietary operating/vendor 
software necessary for the operation of hardware during the planning, 
design, development, installation, enhancement or operation of a 
computerized support enforcement system in accordance with the OCSE 
guideline entitled ``Automated Systems for Child Support Enforcement: A 
Guide for States.'' FFP at the 80 percent rate is not available for 
proprietary application software developed specifically for a 
computerized support enforcement system. (See Sec. 307.35 regarding 
reimbursement at the applicable matching rate.)
    (c) HHS rights to software. The Department of Health and Human 
Services reserves a royalty-free, non-exclusive and irrevocable license 
to reproduce, publish or otherwise use, and to authorize others to use 
for Federal government purposes, software, software modifications, and 
documentation developed under Sec. 307.10 or 42 U.S.C 654(16) (454(16) 
of the Act). This license would permit the Department to authorize the 
use of software, software modifications and documentation developed 
under Sec. 307.10 or 42 U.S.C 654(16) (454(16) of the Act) in another 
project or activity funded by the Federal government.
    (d) Consequences of suspension of the APD. If the Office suspends 
approval of an APD in accordance with Sec. 307.40 during the planning, 
design, development, installation, enhancement or operation of the 
system:
    (1) The Office shall disallow FFP as of the date the State failed 
to comply substantially with the approved APD; and
    (2) FFP at the 80 percent and applicable matching rates is not 
available in any expenditure incurred under the APD after the date of 
the suspension until the date the Office determines that the State has 
taken the actions specified in the notice of suspension described in 
Sec. 307.40(a) of this part. The Office will notify the State in 
writing upon making such a determination.
    (e) Limitation on 80 percent funding. Federal financial 
participation at the 80 percent rate may not exceed $400,000,000 in the 
aggregate for fiscal years 1996 through 2001.
    (f) Allocation formula. Payments at the 80 percent rate to 
individual States, Territories and systems defined in 42 U.S.C. 
Sec. 655(a)(3)(B)(iii) (455(a)(3)(B)(iii) of the Act) (hereafter 
referred to as ``States'') will be equal to the sum of:
    (1) A base amount of $2,000,000; and
    (2) An additional amount defined as the Allocation Factor computed 
as follows:
    (i) Allocation Factor--an average of the Caseload and Census 
Factors which yields the percentage that is used to calculate a State's 
allocation of the funds available, less amounts set aside pursuant to 
paragraph (f)(1) of this section.
    (ii) Caseload Factor--a ratio of the six-year average IV-D caseload 
as reported by a State for fiscal years 1990 through 1995 to the total 
six-year average IV-D caseload in all States for the same period;
    (iii) Census Factor--a ratio of the number of children in a State 
with one parent living elsewhere as reported in the 1992 Current 
Population Survey--Child Support Supplement to the total number of such 
children in all States.
    3. In Sec. 307.40 paragraph (a)(1) is amended by adding 
``Sec. 307.31(d)'' at the end of the last sentence. The addition reads 
as follows:


Sec. 307.40  Suspension of approval of advance planning documents for 
computerized support enforcement systems.

    (a) * * * Federal funding will be disallowed as described in 
Sec. 307.30(d) and Sec. 307.31(d).
* * * * *

Appendix A--Proposed Allocation Tables

    Note: Appendix A will not be codified in Title 45 of the Code of 
Federal Regulations.

[[Page 10178]]



                    Table 1.--Calculation of Allocation Factor From Caseload and Census Data                    
----------------------------------------------------------------------------------------------------------------
                                                  Caseload 6      % of      Census--92                Allocation
                                                   yr avg.      caseload     children   % of census     factor  
----------------------------------------------------------------------------------------------------------------
Alabama........................................      290,391         1.81      345,570         1.84         1.83
Alaska.........................................       42,954         0.27       27,765         0.15         0.20
Arizona........................................      240,814         1.50      271,870         1.45         1.47
Arkansas.......................................      111,852         0.70      187,640         1.00         0.86
California.....................................    1,682,256        10.48    2,178,600        11.60        11.09
Los Angeles County*............................            0         0.00            0         0.00         0.00
Colorado.......................................      166,360         1.04      182,320         0.97         1.00
Connecticut....................................      167,175         1.04      242,910         1.29         1.18
Delaware.......................................       44,417         0.28       68,966         0.37         0.33
District of Columbia...........................       78,327         0.49       61,788         0.33         0.40
Florida........................................      795,006         4.95    1,043,100         5.56         5.28
Georgia........................................      460,993         2.87      428,450         2.28         2.55
Guam...........................................        5,788         0.04        6,772         0.04         0.04
Hawaii.........................................       59,662         0.37       79,211         0.42         0.40
Idaho..........................................       50,243         0.31       70,539         0.38         0.35
Illinois.......................................      695,072         4.33      879,600         4.68         4.52
Indiana........................................      610,335         3.80      690,510         3.68         3.74
Iowa...........................................      137,349         0.86      174,860         0.93         0.90
Kansas.........................................      115,061         0.72      227,530         1.21         0.98
Kentucky.......................................      259,739         1.62      362,530         1.93         1.79
Louisiana......................................      258,556         1.61      402,430         2.14         1.90
Maine..........................................       64,203         0.40       70,932         0.38         0.39
Maryland.......................................      310,502         1.94      366,710         1.95         1.94
Massachusetts..................................      234,721         1.46      336,030         1.79         1.64
Michigan.......................................    1,239,750         7.73      757,680         4.04         5.74
Minnesota......................................      195,708         1.22      357,550         1.90         1.59
Mississippi....................................      254,350         1.59      268,880         1.43         1.50
Missouri.......................................      312,990         1.95      339,170         1.81         1.87
Montana........................................       29,676         0.18       55,911         0.30         0.25
Nebraska.......................................      118,598         0.74       90,157         0.48         0.60
Nevada.........................................       64,867         0.40       80,703         0.43         0.42
New Hampshire..................................       38,461         0.24       56,581         0.30         0.27
New Jersey.....................................      530,061         3.30      395,560         2.11         2.66
New Mexico.....................................       64,995         0.41      138,260         0.74         0.58
New York.......................................    1,053,781         6.57    1,363,500         7.26         6.94
North Carolina.................................      381,598         2.38      457,280         2.44         2.41
North Dakota...................................       31,981         0.20       32,165         0.17         0.18
Ohio...........................................      879,306         5.48      785,450         4.18         4.78
Oklahoma.......................................      117,380         0.73      200,790         1.07         0.91
Oregon.........................................      221,282         1.38      222,130         1.18         1.27
Pennsylvania...................................      851,155         5.30      696,690         3.71         4.45
Puerto Rico....................................      184,548         1.15      215,949         1.15         1.15
Rhode Island...................................       70,281         0.44       44,712         0.24         0.33
South Carolina.................................      186,716         1.16      254,370         1.35         1.27
South Dakota...................................       25,440         0.16       48,647         0.26         0.21
Tennessee......................................      486,970         3.03      394,230         2.10         2.53
Texas..........................................      641,667         4.00    1,377,600         7.34         5.80
Utah...........................................       79,955         0.50      142,460         0.76         0.64
Vermont........................................       18,577         0.12       40,292         0.21         0.17
Virgin Islands.................................       10,704         0.07       12,525         0.07         0.07
Virginia.......................................      300,239         1.87      379,510         2.02         1.95
Washington.....................................      294,085         1.83      346,700         1.85         1.84
West Virginia..................................       83,599         0.52      111,830         0.60         0.56
Wisconsin......................................      365,825         2.28      374,170         1.99         2.13
Wyoming........................................       29,279         0.18       27,763         0.15         0.16
----------------------------------------------------------------------------------------------------------------
      Totals...................................   16,045,594       100.00   18,775,849       100.00       100.00
----------------------------------------------------------------------------------------------------------------
*Currently Los Angeles County data are included in California's data.                                           


                                 Table 2.--Proposed Allocation of Child Support Enforcement Funds Available at 80% EFFP                                 
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                                                                                       Federal calculations                                             
                                                              Allocation ------------------------------------------------   Total State                 
                                                                factor                       Allocated     Total Federal       share           Total    
                                                              (percent)     Base amount      remainder         share                                    
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama....................................................         1.83      $2,000,000      $5,296,411      $7,296,411      $1,824,103      $9,120,514
Alaska.....................................................         0.20       2,000,000         588,959       2,588,959         647,240       3,236,199
Arizona....................................................         1.47       2,000,000       4,269,736       6,269,736       1,567,434       7,837,170
Arkansas...................................................         0.86       2,000,000       2,494,226       4,494,226       1,123,556       5,617,782
California.................................................        11.09       2,000,000      32,153,986      34,153,986       8,538,496      42,692,482

[[Page 10179]]

                                                                                                                                                        
Los Angeles County*........................................         0.00       2,000,000               0       2,000,000         500,000       2,500,000
Colorado...................................................         1.00       2,000,000       2,903,875       4,903,875       1,225,969       6,129,843
Connecticut................................................         1.18       2,000,000       3,415,271       5,415,271       1,353,818       6,769,088
Delaware...................................................         0.33       2,000,000         944,272       2,944,272         736,068       3,680,340
District of Columbia.......................................         0.40       2,000,000       1,166,907       3,166,907         791,727       3,958,634
Florida....................................................         5.28       2,000,000      15,308,115      17,308,115       4,327,029      21,635,143
Georgia....................................................         2.55       2,000,000       7,407,463       9,407,463       2,351,866      11,759,329
Guam.......................................................         0.04       2,000,000         104,603       2,104,603         526,151       2,630,754
Hawaii.....................................................         0.40       2,000,000       1,156,560       3,156,560         789,140       3,945,699
Idaho......................................................         0.35       2,000,000       1,005,900       3,005,900         751,475       3,757,375
Illinois...................................................         4,52       2,000,000      13,114,182      15,114,182       3,778,545      18,892,727
Indiana....................................................         3.74       2,000,000      10,833,701      12,833,701       3,208,425      16,042,126
Iowa.......................................................         0.90       2,000,000       2,600,140       4,600,140       1,150,035       5,750,174
Kansas.....................................................         0.98       2,000,000       2,853,168       4,853,168       1,213,292       6,066,460
Kentucky...................................................         1.79       2,000,000       5,182,378       7,182,378       1,795,594       8,977,972
Louisiana..................................................         1.90       2,000,000       5,504,825       7,504,825       1,876,206       9,381,031
Maine......................................................         0.39       2,000,000       1,125,430       3,125,430         781,358       3,906,788
Maryland...................................................         1.94       2,000,000       5,639,961       7,639,961       1,909,990       9,549,951
Massachusetts..............................................         1.64       2,000,000       4,753,331       6,753,331       1,688,333       8,441,663
Michigan...................................................         5.74       2,000,000      16,635,003      18,635,003       4,658,751      23,293,753
Minnesota..................................................         1.59       2,000,000       4,607,640       6,607,640       1,651,910       8,259,550
Mississippi................................................         1.50       2,000,000       4,357,564       6,357,564       1,589,391       7,946,954
Missouri...................................................         1.87       2,000,000       5,431,316       7,431,316       1,857,829       9,289,145
Montana....................................................         0.25       2,000,000         712,782       2,712,782         678,195       3,390,977
Nebraska...................................................         0.60       2,000,000       1,738,551       3,738,551         934,638       4,673,189
Nevada.....................................................         0.42       2,000,000       1,212,336       3,212,336         803,084       4,015,420
New Hampshire..............................................         0.27       2,000,000         791,530       2,791,530         697,883       3,489,413
New Jersey.................................................         2.66       2,000,000       7,708,758       9,708,758       2,427,190      12,135,948
New Mexico.................................................         0.58       2,000,000       1,692,749       3,692,749         923,187       4,615,936
New York...................................................         6.94       2,000,000      20,131,601      22,131,601       5,532,900      27,664,501
North Carolina.............................................         2.41       2,000,000       6,986,341       8,986,341       2,246,585      11,232,926
North Dakota...............................................         0.18       2,000,000         534,222       2,534,222         633,556       3,167,778
Ohio.......................................................         4.78       2,000,000      13,864,421      15,864,421       3,966,105      19,830,526
Oklahoma...................................................         0.91       2,000,000       2,649,783       4,649,783       1,162,446       5,812,228
Oregon.....................................................         1.27       2,000,000       3,692,822       5,692,822       1,423,205       7,116,027
Pennsylvania...............................................         4.45       2,000,000      12,890,767      14,890,767       3,722,692      18,613,458
Puerto Rico................................................         1.15       2,000,000       3,335,419       5,335,419       1,333,855       6,669,273
Rhode Island...............................................         0.33       2,000,000         957,681       2,957,681         739,420       3,697,101
South Carolina.............................................         1.27       2,000,000       3,673,449       5,673,449       1,418,362       7,091,811
South Dakota...............................................         0.21       2,000,000         617,014       2,617,014         654,254       3,271,268
Tennessee..................................................         2.53       2,000,000       7,338,813       9,338,813       2,334,703      11,673,516
Texas......................................................         5.80       2,000,000      16,816,864      18,816,864       4,704,216      23,521,080
Utah.......................................................         0.64       2,000,000       1,852,320       3,852,320         963,080       4,815,400
Vermont....................................................         0.17       2,000,000         490,273       2,490,273         622,568       3,112,841
Virgin Islands.............................................         0.07       2,000,000         193,459       2,193,459         548,365       2,741,823
Virginia...................................................         1.95       2,000,000       5,661,088       7,661,088       1,915,272       9,576,360
Washington.................................................         1.84       2,000,000       5,336,587       7,336,587       1,834,147       9,170,733
West Virginia..............................................         0.56       2,000,000       1,627,568       3,627,568         906,892       4,534,460
Wisconsin..................................................         2.13       2,000,000       6,162,828       8,162,828       2,040,707      10,203,534
Wyoming....................................................         0.16       2,000,000         475,057       2,475,057         618,764       3,093,822
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                                                                  100.00     110,000,000     290,000,000     400,000,000     100,000,000     500,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Included in California's allocated remainder.                                                                                                          

[FR Doc. 98-5181 Filed 2-27-98; 8:45 am]
BILLING CODE 4184-01-P