[Federal Register Volume 63, Number 57 (Wednesday, March 25, 1998)]
[Proposed Rules]
[Pages 14402-14414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7714]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Parts 302, 304 and 307

RIN 0970-AB70


Computerized Support Enforcement Systems

AGENCY: Office of Child Support Enforcement (OCSE), ACF, HHS.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: These proposed regulations would implement provisions of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 
(PRWORA), related to child support enforcement program automation. 
Under PRWORA, States must have in effect a statewide automated data 
processing and information retrieval system which by October 1, 1997, 
meets all the requirements of title IV-D of the Social Security Act 
enacted on or before the date of enactment of the Family Support Act of 
1988, and by October 1, 2000, meets all the title IV-D requirements 
enacted under PRWORA. The law further provides that the October 1, 
2000, deadline for systems enhancements will be delayed if HHS does not 
issue final regulations by August 22, 1998.

DATES: Consideration will be given to written comments received by May 
11, 1998. We have reduced the standard 60-day comment period specified 
in E.O. 12866 to 45 days in recognition of the statutory deadline of 
August 22, 1998 for issuing final rules and the necessity of providing 
States with the required guidance as soon as practicable to facilitate 
their development or enhancement of systems.

ADDRESSES: Address comments to: Administration for Children and 
Families, Department of Health and Human Services, 370 L'Enfant 
Promenade, S.W., Washington D.C. 20447. Attention: Norman L. Thompson, 
Associate Deputy Director for Automation and Special Projects, Office 
of Child Support Enforcement.
    Comments will be available for public inspection Monday through 
Friday, 8 a.m. to 4:30 p.m. on the fourth floor of the Department's 
offices at the address mentioned above.

FOR FURTHER INFORMATION CONTACT: Betsy Matheson at (202) 401-7386.

SUPPLEMENTARY INFORMATION:

Statutory Authority

    These proposed regulations are published under the authority of 
several provisions of the Social Security Act, as amended by the 
Personal Responsibility and Work Opportunity Reconciliation Act of 
1996. Sections 454(16), 454(24), 454A and 455(a)(3)(A) of the Act (42 
U.S.C. 654(16), (24), 654A, and 655(a)(3)(A)), contain new requirements 
for automated data processing and information retrieval systems to 
carry out the State's IV-D State plan. Other sections, such as section 
453 of the Act (42 U.S.C. 653) specify data that the system must 
furnish or impose safeguarding and disclosure requirements that the 
system must meet.
    These proposed regulations are also published under the general 
authority of section 1102 (42 U.S.C. 1302) of the Act which requires 
the Secretary to publish regulations that may be necessary for the 
efficient administration of the provisions for which she is responsible 
under the Act.

Background

    Full and complete automation is pivotal to improving the 
performance of the nation's child support program. With a current 
national caseload of 20 million, caseworkers are dependent on enhanced 
technology and increased automation to keep up with the massive volume 
of information and transactions critical to future success in providing 
support to children.
    While most States have sought some level of child support program 
automation since the inception of the program, it wasn't until 
enactment of the Family Support Act of 1988 (Pub. L. 100-485), that 
program automation became a title IV-D State plan requirement. The 
Family Support Act required that States have in operation by October 1, 
1995, a certified statewide system. (This date was subsequently 
extended to October 1, 1997, under Pub. L. 104-35).
    These systems are to be statewide, operational, comprehensive, 
integrated, efficient, and effective. They are required to provide for 
case initiation; interface with other systems to obtain information to 
locate parents; aid in paternity establishment efforts by tracking, 
monitoring, and reporting on State efforts; monitor compliance with 
support orders and initiate enforcement action; update and maintain 
case records; process payments and distribute support; meet reporting 
requirements and address security and privacy issues.
    Under PRWORA, States must build on this comprehensive automated 
foundation to implement the programmatic enhancements the law included 
for strengthening child support enforcement, including new enforcement 
tools and a shift in child support distribution requirements to a 
family-first policy. By October 1, 2000, States must have in place an 
automated statewide system that meets all the requirements and performs 
all the functions specified in PRWORA. This requirement recognizes that 
case processing changes and Federal and State legislative enhancements 
to State IV-D programs have little impact without proper automated 
support. The October 1, 2000 date is a completion date for the entire 
system, however certain requirements and functions must be met prior to 
that date. We have included those statutory effective dates in the 
regulations.
    Accordingly, this rule proposes to set forth in regulations the 
framework for automation that State systems must have in place by the 
October 1, 2000, deadline. Our approach in developing these proposed 
rules was to adhere as closely as possible to the statute. We believe 
this approach is essential to ensuring that the proposed rules are well 
received, allowing the final regulation to be issued by the statutory 
deadline of August 22, 1998. The State deadline for completing these 
systems enhancements is delayed by one day for each day, if any, that 
we miss the statutory deadline for regulating. We believe this would be 
an unconscionable position--PRWORA compliant systems are intended to 
have a substantial impact on States' ability to protect the support 
rights of children, and it is essential that these changes are made 
without delay.
    In addition, we believe the statute provides a proper and straight-
forward

[[Page 14403]]

functional framework to support ACF's certification standards. These 
standards are outlined in a document entitled, ``Automated Systems for 
Child Support Enforcement: A Guide for States (the Guide).'' Concurrent 
with publishing these rules and in partnership with State child support 
agencies, we are updating the Guide to reflect the changes made by 
PRWORA. In particular, we are focusing on ways to measure system 
standards that support program outcomes most effectively.
    The draft Guide will be disseminated to States and other interested 
parties for comment through an Action Transmittal (AT). After reviewing 
the comments received, we will issue an AT with final systems 
functional requirements.
    We have, however, proposed several changes in these regulations to 
strengthen the process for approving and monitoring State activity 
under Advanced Planning Documents (APDs) by codifying and building on 
several existing practices and authorities relevant to systems 
oversight in regulation. We believe this is necessary to ensure that 
child support systems meet the critical needs of the program as 
envisioned under the Family Support Act of 1988 and the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996.
    As is current practice, once ACF determines, through a 
certification review, that a Computerized Support Enforcement System 
(CSES) meets these standards throughout the State, the CSES is 
certified by ACF. Certification may be granted in two stages. The first 
stage, level 1 certification, is granted when a State system meets all 
functional requirements in 45 CFR 307.10, as specified in the Guide, 
and is installed and operational in a pilot or multiple pilot location 
and; level 2 certification is granted when statewide installation of 
the functionally comprehensive system is complete and the system is 
operational.

PRWORA Automation Enhancements

    As indicated above, the Family Support Act laid the foundation for 
comprehensive automated systems. The PRWORA requirements build on this 
base to ensure these systems support the new tools and other 
programmatic enhancements the law included to strengthen child support 
enforcement.
    PRWORA added a new section 454A to the Act to house all functional 
requirements that State systems must meet, both from the Family Support 
Act and from PRWORA. Those emanating from PRWORA include:
     Functional requirements specified by the Secretary related 
to management of the program (454A(b))
     Calculation of performance indicators (454A(c))
     Information integrity and security requirements (454A(d))
     Development of a State case registry (454A(e))
     Expanded information comparisons and other disclosures of 
information (454A(f)), including to the Federal case registry of child 
support orders and the Federal Parent Locator Service (FPLS) and with 
other agencies in the State, agencies of other States and interstate 
information networks, as necessary and appropriate.
     Collection and distribution of support payments (454A(g)), 
including facilitating the State's centralized collection and 
disbursement unit and modifications to meet the revised distribution 
requirements.
     Expedited Administrative Procedures (454A(h))
    Each of these is discussed in greater detail in the section of this 
preamble entitled, Proposed Regulatory Changes.
    To assist States in meeting these mandates for enhancement to their 
statewide automated systems, Congress provided an additional amount of 
Federal funding available at the 80 percent rate for the planning, 
design, development, installation or enhancement of statewide, 
automated systems. Section 344(b)(2) of PRWORA places a cap on the 
Federal share of funding available at 80 percent enhanced Federal 
Financial participation. This 80 percent funding is available to meet 
the automation requirements of the Family Support Act as well as the 
new automation requirements of PRWORA. PRWORA also revised section 
455(a)(3) of the Act to restore 90 percent Federal funding for 
completing Family Support Act systems on a limited basis.

Proposed Regulatory Changes

State Plan Requirements (Part 302)

    To implement the statutory changes, we first propose to revise the 
regulations at 45 CFR 302.85, ``Mandatory computerized support 
enforcement systems.'' Current 45 CFR 302.85(a) provides that if the 
State did not have in effect by October 13, 1988 a computerized support 
enforcement system that meets the requirements of Sec. 307.10, the 
State must submit an Advanced Planning Document (APD) for such a system 
to the Secretary by October 1, 1991, and have an operational system in 
effect by October 1, 1995.
    Section 454(24) of the Act, as amended by PRWORA, provides that the 
State must have in effect a computerized support enforcement system 
which by October 1, 1997 meets all IV-D requirements in effect as of 
the date of enactment (October 13, 1988) of the Family Support Act of 
1988, including all IV-D requirements in PRWORA. In addition, the State 
must have a CSES which by October 1, 2000 meets all IV-D requirements 
in effect as of the date of enactment (August 22, 1996) of PRWORA, 
including all IV-D requirements in that Act.
    Thus, the proposed Sec. 302.85(a) of the regulations would 
reiterate the current statutory requirements for mandatory automated 
systems for support enforcement. Proposed Sec. 302.85(a)(1) would 
include the requirement under existing paragraph (a) that the system be 
developed in accordance with Secs. 307.5 and 307.10 of the regulations 
and the OCSE guidelines entitled ``Automated Systems for Child Support 
Enforcement: A Guide for States.'' In addition, the proposed 
Sec. 302.85(a)(2) would require that, by October 1, 2000, a system 
meeting PRWORA requirements be developed in accordance with Secs. 307.5 
and 307.11 of the regulations and the OCSE guidelines referenced above.

Change in Federal Financial Participation (Part 304)

    To make part 304 regulations consistent with the statute, we 
propose to amend 45 CFR 304.20, ``Availability and rate of Federal 
financial participation,'' at paragraph (c) to provide that FFP at the 
90 percent rate for the planning, design, development, installation and 
enhancement of computerized support enforcement systems that meet the 
requirement of Sec. 307.30(a) is only available until September 30, 
1997. (See the discussion below regarding revised Sec. 307.30(a).)

Computerized Support Enforcement Systems (Part 307)

    We propose to amend 45 CFR part 307, Computerized support 
enforcement systems, throughout to conform part 307 to the changes 
required by sections 454, 454A, and 455(a) of the Act, as amended by 
PRWORA and the proposed revisions to 45 CFR 302.85, which were 
discussed earlier.
    We propose to revise the title of Sec. 307.10 to read ``Functional 
requirements for computerized support enforcement systems in operation 
by October 1, 1997'', and add titles for two new sections, 
``Sec. 307.11 Functional requirements for computerized support 
enforcement systems in operation by October 1, 2000'' and ``Sec. 307.13 
Security

[[Page 14404]]

and Confidentiality of computerized support enforcement systems in 
operation by October 1, 2000'', to reflect these changes.
    We propose to revise Sec. 307.0, ``Scope of this part'', to reflect 
the new requirements of sections 454, 454A, 455(a) of the Act, as 
amended, and section 344(a)(3) of PRWORA regarding statewide automated 
CSESs. This would be accomplished by referencing the new statutory 
language in the introductory section and by adding a new paragraph (c) 
which would refer to the security and confidentiality requirements for 
CSESs. Accordingly, current paragraphs (c) through (h) would be 
redesignated as paragraphs (d) through (i).
    In Sec. 307.1, ``Definitions'', we propose to add the definition of 
``Business day'' as defined in the new section 454A(g)(2) of the Act. 
Accordingly, current paragraphs (b) through (j) would be redesignated 
as paragraphs (c) through (k). In addition, we propose in the 
redesignated paragraphs (d) and (g) to replace the citation 
``Sec. 307.10'' with the citations ``Secs. 307.10, or 307.11'' to 
reflect the regulatory changes proposed below.

Mandatory Computerized Support Enforcement Systems

    We propose to amend 45 CFR 307.5, Mandatory computerized support 
enforcement systems, as follows:
    Currently, paragraphs (a) and (b) are outdated and reflect 
deadlines mandated by the Family Support Act on APD submittal 
requirements and timeframes. To reflect the amended section 454(24) of 
the Act, we propose to eliminate paragraphs (a) and (b) in their 
entirety, to replace paragraph (a) and to renumber paragraphs (c) 
through (h) as (b) through (g).
    We propose adding a paragraph (a)(1) to provide that each State 
must have in effect by October 1, 1997, an operational computerized 
support enforcement system which meets the requirements in 45 CFR 
302.85(a)(1) related to the Family Support Act of 1988 requirements and 
to provide that OCSE will review the systems to certify that these 
requirements are met. Under paragraph (a)(2), we propose to require 
each State to have in effect, by October 1, 2000, an operational 
computerized support enforcement system which meets the requirements in 
45 CFR 302.85(a)(2) related to PRWORA requirements and to provide that 
OCSE will review the systems to certify that these requirements are 
met.
    In addition, under paragraph (d), the reference to ``Sec. 307.10'' 
would be replaced by ``Secs. 307.10 or 307.11.''

Functional Requirements for Computerized Support Enforcement Systems

    To reflect the statutory changes, the title of Sec. 307.10 
``Functional requirements for computerized support enforcement 
systems.'' would be revised to read ``Functional requirements for 
computerized support enforcement systems in operation by October 1, 
1997.'' to better reflect the content of the regulation. In the 
introductory language, the citation ``Sec. 302.85(a)'' would be 
replaced by the citation ``Sec. 302.85(a)(1)'' to reflect proposed 
changes made earlier in the regulations. The citation ``AFDC'' would be 
replaced by the citation ``TANF'' (Temporary Assistance for Needy 
Families) in paragraph (b)(10). Paragraph (b)(14) would be deleted 
because the requirement for electronic data exchange with the title IV-
F program (Job Opportunities and Basic Skills Training Program) is no 
longer operative since under PRWORA States had to eliminate their IV-F 
programs by July 1, 1997. Current paragraphs (b)(15) and (16) would be 
redesignated as paragraphs (b)(14) and (15).
    We propose to add a new regulation at 45 CFR 307.11, ``Functional 
requirements for computerized support enforcement systems in operation 
by October 1, 2000,'' which reiterates the new statutory requirements 
in sections 454(16) and 454A of the Act, as discussed below.
    The introductory language of proposed Sec. 307.11 would specify 
that each State's computerized support enforcement system established 
and operated under the title IV-D State plan at Sec. 302.85(a)(2) must 
meet the requirements in this regulation. As proposed in paragraph (a), 
the CSES in operation by October 1, 2000 must be planned, designed, 
developed, installed or enhanced and operated in accordance with an 
initial and annually updated APD approved under Sec. 307.15 of the 
regulations. If the State elects to enhance its existing CSES to meet 
PRWORA requirements, it has the option of submitting either a separate 
APD or combining the Family Support Act and PRWORA requirements in one 
APD update. If the State elects to develop a new CSES, a separate 
implementation APD must be submitted.
    We propose in paragraph (b) that the CSES control, account for, and 
monitor all the factors in the support collection and paternity 
determination process under the State plan which, at a minimum, include 
the factors in the regulation. Under the proposed paragraph (b)(1), the 
system must control, account for, and monitor the activities in 
Sec. 307.10(b) of the regulations which a CSES in operation by October 
1, 1997, must meet, except those activities in paragraphs (b)(3), (8), 
and (11) of Sec. 307.10. These reporting, financial accountability, and 
security activities are replaced by similar or expanded provisions 
discussed later in this preamble that reflect statutory changes from 
PRWORA.
    We propose in paragraph (b)(2) to describe the tasks that the 
computerized support enforcement system must have the capacity to 
perform with the frequency and in the manner required under or by the 
regulations that implement title IV-D of the Act. Paragraph (b)(2)(i) 
requires the CSES to perform the functions discussed below and any 
other functions the Secretary of HHS may specify related to the 
management of the State IV-D program. We are not proposing to add 
additional management-related functional requirements other than those 
currently specified or provided in the statute.
    Under the proposed paragraph (b)(2)(i)(A), the system must control 
and account for the use of Federal, State, and local funds in carrying 
out the State's IV-D program either directly or through an interface 
with State financial management and expenditure information systems. 
Some States currently meet this requirement by maintaining and 
accessing IV-D cost data on a State financial management and 
expenditure system. Since the statute does not specifically address 
meeting this requirement through an interface with a State financial 
management and expenditure information system, we propose to continue 
to allow the States to meet the financial accountability requirements 
through an interface.
    Paragraph (b)(2)(i)(B) would require the system to maintain the 
data necessary to meet Federal reporting requirements for the IV-D 
program on a timely basis as prescribed by the Office of Child Support 
Enforcement. This proposal is similar to the functional requirements at 
Sec. 307.10(b)(3) that a system must meet by October 1, 1997.
    Paragraph (b)(2)(ii)(A), as proposed, requires the CSES to enable 
the Secretary of HHS to determine State incentive payments and penalty 
adjustments required by sections 452(g) and 458 of the Act through the 
use of automated processes to: (1) Maintain the necessary data for 
paternity establishment and child support enforcement activities in the 
State, and (2) calculate the paternity establishment percentage for the 
State for each fiscal year. Under this requirement, the

[[Page 14405]]

system must maintain the necessary data and calculate for each fiscal 
year the State's paternity establishment percentage under section 
452(g) of the Act. The system must also maintain the data necessary to 
determine State incentive payments under section 458 of the Act. In 
addition, under paragraph (b)(1), the State will continue to be 
required to compute and distribute incentive payments to political 
subdivisions in accordance with Sec. 307.10(b)(6) of the regulations.
    Proposed paragraph (b)(2)(ii)(B) would require the system to enable 
the Secretary to determine State incentive payments and penalty 
adjustments required by sections 452(g) and 458 of the Act by having in 
place system controls to ensure: (1) The completeness, and reliability 
of, and ready access to, the data on State performance for paternity 
establishment and child support enforcement activities in the State, 
and (2) the accuracy of the paternity establishment percentage for the 
State for each fiscal year. Under this provision, the system controls 
apply to data related to the calculation of the State's paternity 
establishment percentage, and the calculation of incentive payments. 
Data regarding the paternity establishment percentage and incentive 
payments is reported to the Federal government in accordance with 
instructions issued by OCSE.
    Proposed paragraph (b)(2)(iii) requires the system to have controls 
(e.g., passwords, or blocking of fields) to ensure strict adherence to 
the systems security policies described in Sec. 307.13(a) of the 
regulations. Under the proposed Sec. 307.13(a) discussed later in this 
preamble, the State IV-D agency must have written policies concerning 
access to data by IV-D agency personnel, and sharing of data with other 
persons.
    Under the proposed paragraph (b)(3), the system must control, 
account for, and monitor the activities described in PRWORA not 
otherwise addressed in this part. As indicated previously, we plan to 
address the detailed systems functional requirements related to title 
IV-D program requirements modified or added by PRWORA in the Guide 
which we are in the process of revising and reissuing to the States.
    Proposed paragraph (c) would require that the system, to the extent 
feasible, assist and facilitate the collection and disbursement of 
support payments through the State disbursement unit, operated under 
section 454B of the Act. Under paragraph (c)(1), the system must 
transmit orders and notices to employers and other debtors for the 
withholding of income: (1) Within 2 business days after the receipt of 
notice of income, and the income source subject to withholding from the 
court, another State, an employer, the Federal Parent Locator Service, 
or another source recognized by the State, and (2) using uniform 
formats prescribed by the Secretary. On January 27, 1998, OCSE issued a 
model wage withholding form (Approval 0970-0154) for use in 
implementing wage withholding (OCSE Action Transmittal 98-03).
    The proposed paragraph (c)(2) would require the system to monitor 
accounts, on an ongoing basis, to identify promptly failures to make 
support payments in a timely manner. Paragraph (c)(3), as proposed, 
requires the system to automatically use enforcement procedures, 
including enforcement procedures under section 466(c) of the Act, if 
support payments are not made in a timely manner. These procedures 
include Federal and State income tax refund offset, intercepting 
unemployment compensation insurance benefits, intercepting or seizing 
other benefits through State or local governments, intercepting or 
seizing judgments, settlements, or lottery winnings, attaching and 
seizing assets of the obligor held in financial institutions, attaching 
public and private retirement funds, and imposing liens in accordance 
with section 466(a)(4) of the Act.
    Proposed paragraph (d) requires that, to the maximum extent 
feasible, the system must be used to implement the expedited 
administrative procedures required by section 466(c) of the Act. These 
procedures include: ordering genetic testing for the purpose of 
establishing paternity under section 466(a)(5) of the Act; issuing a 
subpoena of financial or other information to establish, modify, or 
enforce a support order; requesting information from an employer 
regarding employment, compensation, and benefits of an employee or 
contractor; accessing records maintained in automated data bases such 
as records maintained by other State and local government agencies 
described in section 466(c)(1)(D) of the Act and certain records 
maintained by private entities regarding custodial and non-custodial 
parents described in section 466(c)(1)(D) of the Act; increasing the 
amount of monthly support payments to include an amount for support 
arrears; and changing the payee to the appropriate government entity 
when support has been assigned to the State, or required to be paid 
through the State disbursement unit.
    The proposed paragraph (e) requires the State to establish a State 
case registry (SCR) which must be a component of the computerized child 
support enforcement system. This registry is essentially a directory of 
electronic case records or files. Proposed paragraph (e)(1) contains 
definitions which relate to terms used in this section.
    Proposed paragraph (e)(2) describes the records which the registry 
must contain. Under the proposed paragraph (e)(2)(i), the registry must 
contain a record of every case receiving child support enforcement 
services under an approved State plan. Under the proposed paragraph 
(e)(2)(ii), the registry must contain a record of every support order 
established or modified in the State on or after October 1, 1998. Under 
the proposed paragraph (e)(3) each record must include standardized 
data elements for each participant. These data elements include the 
name(s), social security number(s), date of birth, case identification 
number(s), data elements required under paragraph (f)(1) of this 
section for the operation of the Federal case registry (FCR) and any 
other data elements required by the Secretary and set forth in 
instructions issued by the Office.
    Under the proposed paragraph (e)(4), each record must include 
payment data for every case receiving services under the IV-D State 
plan that has a support order in effect. Under this proposed provision, 
the payment data must include the following information: (1) Monthly 
(or other frequency) support owed under the order, (2) other amounts 
due or overdue under the order including arrearages, interest or late 
payment penalties and fees, (3) any amount described in paragraph 
(e)(4)(i) and (ii) of this section that has been collected, (4) the 
distribution of such collected amounts, (5) the birth date and, 
beginning no later than October 1, 1999, the name and social security 
number of any child for whom the order requires the provision of 
support, and (6) the amount of any lien imposed under the order in 
accordance with section 466(a)(4) of the Act.
    Under paragraph (e)(5), the State using the CSES must establish and 
update, maintain, and regularly monitor case records in the State case 
registry for cases receiving services under the State plan. We have not 
defined ``regularly.'' We invite public comment as to whether 
timeframes or other standards should be set for the monitoring and 
updating of records and if so what timeframes and standards would be 
applied. To ensure that information on an established IV-D case is up 
to date, the State must regularly update the record to make changes to 
the status of a case, the status of and information about the

[[Page 14406]]

participants of a case, and the other data contained in the case 
record.
    Under the proposal, this would include the following: (1) 
Information on administrative actions and administrative and judicial 
proceedings and orders related to paternity and support, (2) 
information obtained from comparison with Federal, State or local 
sources of information, (3) information on support collections and 
distributions, and (4) any other relevant information.
    Under the proposed paragraph (e)(6), the State is authorized to 
meet the requirement in paragraph (e)(2)(ii) of this section which 
would require the State case registry to have a record of every support 
order established or modified in the State on or after October 1, 1998, 
by linking local case registries of support orders through an automated 
information network. However, linked local case registries established 
in the State's computerized support enforcement system must meet all 
other requirements in paragraph (e) of this section.
    Under proposed paragraph (f), the State must use the computerized 
support enforcement system to extract information, at such times, and 
in such standardized format or formats, as required by the Secretary, 
for the purposes of sharing and comparing information and receiving 
information from other data bases and information comparison services 
to obtain or provide information necessary to enable the State, other 
States, the Office of Child Support Enforcement or other Federal 
agencies to carry out the requirements of the Child Support Enforcement 
program. The use and disclosure of certain data is subject to the 
requirements of section 6103 of the Internal Revenue Code and the 
system must meet the security and safeguarding requirements for such 
data specified by the Internal Revenue Service. (See IRS Publication 
1075 entitled ``The Information Security Guidelines for Federal, State 
and Local Agencies.'') The system must also comply with safeguarding 
and disclosure requirements specified in the Act. Timeframes not 
specified in Federal law regarding the transmission of information will 
be developed in consultation with the States and appropriate Federal 
and State workgroup(s). We invite public comment on whether these 
matters should be addressed in the regulation and if so, what 
timeframes should be imposed. The comparisons and sharing of 
information include the activities specified below.
    Under proposed paragraph (f)(1), effective October 1, 1998, the 
State must furnish information to the Federal case registry, including 
updates as necessary and notices of expiration of support orders, 
except that States have until October 1, 1999, to furnish child data. 
We invite public comment as to whether timeframes for the submission of 
data on new cases or orders and for the submission of updated 
information should be specified and if so, what are appropriate 
standards.
    Section 453(h)(2) and (3) of the Act require the inclusion of child 
data in the FCR and provides the Secretary of Treasury with access to 
FCR data for the purpose of administering those sections of the 
Internal Revenue Code of 1986 which grant tax benefits based on the 
support or residence of children, such as the Earned Income Tax 
Program. Under the proposal, the State must provide to the FCR the 
following data elements on participants: (1) State Federal Information 
Processing Standard (FIPS) and optionally, county code; (2) State case 
identification number; (3) State member identification number; (4) case 
type (IV-D, non-IV-D); (5) social security number and any necessary 
alternative social security numbers; (6) name, including first, middle, 
last name and any necessary alternative names; (7) sex (optional); (8) 
date of birth; (9) participant (custodial party, non-custodial parent, 
putative father, child); (10) family violence indicator (domestic 
violence or child abuse); (11) indication of an order; (12) locate 
request type (optional); (13) locate source (optional), and (14) any 
other information as the Secretary may require as set forth in 
instructions issued by the Office.
    These data elements were developed in consultation with a workgroup 
comprising individuals from the State and the Federal level. The 
primary reason that only these data elements were selected for 
inclusion in the FCR is that they are static in nature, thereby 
requiring less update and maintenance. The intent of the FCR is to 
serve as a ``pointer'' system to quickly notify States of other States 
that have an interest and/or information on a participant. State 
automated child support systems will have more detailed data elements 
on participants. Upon receiving information from the FCR regarding 
participants in another State or States, States will be expected to use 
the Child Support Enforcement Network (CSENet) to ascertain any 
additional information on a participant that the State may need.
    The information we are proposing to require under this paragraph 
implements section 453(h) requirements for establishment and 
maintenance of an automated Federal Case Registry of Support Orders.
    With respect to domestic violence information identified in item 10 
above and addressed under paragraph (f)(1)(x) of this proposal, section 
453(b)(2) of the Act states that no information in the Federal Parent 
Locator Service shall be disclosed to any person if the State has 
notified the Secretary that the State has reasonable evidence of 
domestic violence or child abuse and the disclosure of such information 
could be harmful to the custodial parent or the child of such parent. 
Unless otherwise specified in section 453(b)(2), OCSE will not disclose 
any information on a participant in a IV-D case or non-IV-D support 
order to any person if the State has included a ``family violence'' 
indicator on such participant.
    Under proposed paragraph (f)(2), the CSES must request and exchange 
information with the Federal parent locator service for the purposes 
specified in section 453 of the Act. As stipulated in statute, the 
Secretary will not disclose information received under section 453 of 
the Act when to do so would contravene the national policy or security 
interests of the United States or the confidentiality of census data or 
as indicated above if the Secretary has received notice of reasonable 
evidence of domestic violence or child abuse and the disclosure of such 
information could be harmful to the custodial parent or the child of 
such parent.
    Under proposed paragraph (f)(3), the CSES must exchange information 
with State agencies, both within and outside of the State, 
administering programs under title IV-A and title XIX of the Act, as 
necessary to perform State agency responsibilities under the Child 
Support Enforcement program.
    Under the proposed paragraph (f)(4), the CSES must exchange 
information with other agencies of the State, and agencies of other 
States, and interstate information networks, as necessary and 
appropriate, to assist the State and other States in carrying out the 
Child Support Enforcement program.

Security and Confidentiality for Computerized Support Enforcement 
Systems

    With the mandates of the Family Support Act of 1988, and most 
recently of PRWORA, State public assistance agencies have been given 
additional tools to locate individuals involved in child support cases 
and visitation and custody orders and their assets. These tools are 
used in conjunction with or operate through the State's automated

[[Page 14407]]

data processing (ADP) system. With the use of these Automated Data 
Processing (ADP) systems, and the data they maintain and manipulate, 
come inevitable concerns about the security and privacy of the 
sensitive and confidential personal, demographic, and financial 
information resident in these systems. In order to protect this 
information, our regulations require that States must have policies and 
procedures in place to ensure the integrity and validity of their 
automated data processing systems.
    Under current rules, States must conduct reviews of automated 
systems to ensure their security and assess vulnerability, and maintain 
reports of those reviews for HHS to examine should circumstances 
warrant. Further, Federal OCSE certification requirements for automated 
child support systems likewise have specific requirements and 
objectives relative to physical and operational security, and of the 
privacy of the data those systems maintain. In addition, numerous 
Federal and State agencies that share data with States' child support 
agencies also impose varying degrees of regulatory restriction on the 
availability, privacy, security and use of the data exchanged. A 
primary example is the restrictions imposed by the U.S. Department of 
Treasury's Internal Revenue Service on the income tax refund and 1099 
program information provided to States' child support agencies.
    Language in PRWORA further strengthens these security requirements, 
clearly addressing the concerns all Americans have for the privacy of 
personal information while recognizing the need for effective program 
administration.
    We are proposing to reiterate statutory requirements in section 
454A(d) of the Act addressing security and privacy issues by adding new 
regulations at 45 CFR 307.13, ``Security and confidentiality for 
computerized support enforcement systems in operation after October 1, 
1997.''
    Proposed paragraph (a) would require the State IV-D agency to have 
safeguards on the integrity, accuracy, completeness of, access to, and 
use of data in the CSES, including written policies concerning access 
to data by IV-D agency personnel and sharing of data with other 
persons. Under proposed paragraph (a)(1), these policies must address 
access to and use of data to the extent necessary to carry out the IV-D 
program. This includes the access to and use of data by any individual 
involved in the IV-D program, including personnel providing IV-D 
services under a cooperative or purchase-of-service agreement or other 
arrangement.
    Under the proposed paragraph (a)(2), these policies must specify 
the data that may be used for particular IV-D program purposes, and the 
personnel permitted access to such data. This provision applies to all 
personnel who have access to data on the CSES.
    Under the proposed paragraph (a)(3) these policies must specify the 
non-IV-D purposes for which and the non-IV-D persons to whom data may 
be disclosed.
    Paragraph (b), as proposed, would require the State IV-D agency to 
monitor routine access and use of the computerized support enforcement 
system through methods such as audit trails and feedback mechanisms to 
guard against and identify unauthorized access or use. States have 
flexibility in meeting this requirement, so long as the IV-D agency 
monitors routine access and use of the system.
    Proposed paragraph (c) would require the State IV-D agency to have 
procedures to ensure that all personnel, including State and local 
staff and contractors, who may have access to or be required to use 
confidential program data in the CSES are: (1) Informed of applicable 
requirements and penalties, including those in section 6103 of the 
Internal Revenue Service Code, and (2) adequately trained in security 
procedures. Under this requirement, State procedures must address 
Federal and State safeguarding requirements, including the safeguarding 
of information regulations at 45 CFR 303.21 and 303.70(d)(2), and the 
security and safeguarding requirements for data obtained from the 
Internal Revenue Service. (See IRS publication 1075, entitled ``Tax 
Information Security Guidelines for Federal, State and Local 
Agencies.'' This publication was sent to the IV-D agency in each State 
by OCSE.)
    Finally, paragraph (d) would require the IV-D agency to have 
administrative penalties, including dismissal from employment, for 
unauthorized access to, disclosure or use of confidential information. 
The intent of Congress in PRWORA is clear with regard to systems and 
data security: we must ensure that adequate safeguards are in place to 
protect the privacy of those we serve. In drafting these regulations, 
we have attempted to err on the side of comprehensiveness when 
addressing the needs of security in our automated data processing 
systems, but to do so without injecting a greater Federal presence in 
the operation of States' child support enforcement systems. To that 
end, we are seeking comments from all sectors of the child support 
program, not just those concerned with the operation of States' 
automated data processing systems. Further, we are seeking comment in 
all areas of computer systems security and data privacy relative to 
these proposed regulations, be it the safety and security of data 
center operations and equipment, personnel security, data availability 
and access within the program, and the control of data gathered from 
and shared with outside agencies. We are also interested in whether 
these proposed regulations should be more prescriptive in all or part, 
relative to security and privacy, or whether there are other venues to 
ensure and/or strengthen data and systems security, such as through 
formal written guidance manuals, enhanced system certification 
requirements, action transmittals, training, or a more visible Federal 
presence and oversight in this area.

Approval of Advance Planning Documents

    The regulations at 45 CFR 307.15 speak to certain APD requirements 
specific to CSE automated system development and we are proposing in 
these rules to make conforming amendments to address the changes made 
by PRWORA and as indicated previously, to codify certain existing 
requirements and authorities related to APD and APDU oversight. 
Specifically we are proposing to revise 45 CFR 307.15, ``Approval of 
advance planning documents for computerized support enforcement 
systems,'' to reflect new functional requirements the State must meet 
by October 1, 2000.
    Currently, paragraph (b)(2) requires that the APD specify how the 
objectives of the system will be carried out throughout the State, 
including a projection of how the proposed single State system will 
meet the functional requirements and encompass all political 
subdivisions of the State by October 1, 1997.
    Federal law now requires each State to have in operation by October 
1, 1997, a statewide CSES that meets specified functional requirements, 
and a statewide system that also meets additional functional 
requirements by October 1, 2000. Therefore, the proposed paragraph 
(b)(2) would require that the APD specify how the objectives of a CSES 
that meets the functional requirements in Sec. 307.10 of the 
regulations, or the functional requirements in Sec. 307.11 of the 
regulations, will be carried out throughout the State including a 
projection of how the proposed system

[[Page 14408]]

will meet the functional requirements and encompass all political 
subdivisions of the State by October 1, 1997, or also meet the 
additional functional requirements and encompass all political 
subdivisions of the State by October 1, 2000.
    Under this proposal, the State may submit a separate APD for each 
group of functional requirements. The State may also update its current 
APD for the development and implementation of a system to meet the 
October 1, 1997, requirements in order to address the functional 
requirements that must be met by October 1, 2000. We also propose to 
replace the citation ``Sec. 307.10'' with the citations ``Secs. 307.10, 
or 307.11'' where it appears in paragraphs (a), (b), and (c).
    A number of States experienced difficulty in developing systems 
that complied with Family Support Act requirements and, as a 
consequence, failed to meet the October 1, 1997, deadline for having 
such systems in place. As a result, OCSE has reviewed the Federal and 
State experience over the past several years and based on that review, 
we are putting into place administratively a number of improvements in 
the Federal and State oversight process. In addition, we are proposing 
several changes to these regulations that will strengthen the oversight 
and management of CSE systems development projects.
    Continuing a trend begun last year, we will be more aggressively 
monitoring State CSE development efforts. We intend to conduct on-site 
technical assistance visits and reviews in all States this year, as we 
did last year. States whose system development efforts are lagging will 
receive multiple visits. We are in the process of procuring the 
services of one or more contractors to augment our ability to monitor 
States progress and provide project assistance.
    In addition, we will be more closely reviewing State APD and APDU 
submissions. One area of focus will be on the resources available to: 
(1) Monitor the progress of systems development efforts, (2) assess 
deliverables, and (3) take corrective action if the project goes 
astray. Using our current regulatory authority, we will not approve a 
State's APD unless we are convinced that adequate resources and a well 
conceived project management approach are available for these purposes, 
as well as for the systems design and implementation processes.
    Most States already retain Quality Assurance assistance, using 
either contractors or State staff. We will not approve a State's APD 
unless it evidences adequate quality assurance services. These services 
may be procured from the private sector, or may be provided by State 
staff, e.g., a State's information technology office, State auditor, 
State data center, etc. States with a history of troubled systems 
development efforts will have to rigorously demonstrate that such 
resources are available to the project and are integrated into the 
project's management. We will require that all reports prepared by a 
State's quality assurance provider be submitted directly to OCSE at the 
same time they are submitted to the State's project management.
    Further, we intend to more systematically determine and monitor key 
milestones in States' CSE systems development efforts, and to more 
closely tie project funding to those milestones. Systems should be 
implemented in phased, successive modules as narrow in scope and brief 
in duration as practicable, each of which serves a specific part of the 
overall child support mission and delivers a measurable benefit 
independent of future modules. To that end, we are proposing to add 
language to Sec. 307.15(b)(9) to clarify that the APD must contain an 
estimated schedule of life-cycle milestones and project deliverables 
(modules) related to the description of estimated expenditures by 
category. We would also include in the proposed regulation a list of 
milestones which must be addressed as provided in the ``DHHS State 
Systems Guide'' (September 1996). These life cycle milestones should 
include, where applicable, developing the general and/or detailed 
system designs, preparing solicitations and awarding contracts for 
contractor support services, hardware and software, developing a 
conversion plan, test management plan, installation plan, facilities 
management plan, training plan, user's manuals, and security and 
contingency plans; converting and testing data, developing, modifying 
or converting software, testing software, training staff, installing, 
testing and accepting systems. Specifically, we are proposing that the 
APD must include milestones relative to the size, complexity and cost 
of the project and at a minimum address: Requirements analysis, program 
design, procurement and project management.
    We will treat seriously States' failure to meet critical milestones 
and deliverables or to report promptly and fully on their progress 
toward meeting those milestones. We will approach these problems in 
several ways. States shall reduce risk by using, when possible, fully-
tested pilots, simulations or prototypes that accurately model the 
full-scale system; establish clear measures and accountability for 
project progress, and secure substantial worker involvement and buy-in 
throughout the project.
    With respect to funding, we will generally provide funding under an 
approved APD only for the most immediate milestones and funding related 
to achievement of later milestones will be contingent upon the 
successful completion of antecedent milestones. For States with proven 
track records in CSE systems development, we will continue our practice 
of providing funding approval on an annual basis. Since current 
regulations provide sufficient authority to limit funding in this way, 
we are not proposing any additional regulatory changes but rather 
reaffirming in this preamble management practices which we will follow 
under existing authority.
    In addition, we are proposing to revise Sec. 307.15(b)(10) to 
expand the requirements for an implementation plan and backup 
procedures. This proposed language would require certain States to 
obtain independent validation and verification services (IV&V). These 
States would include those: (1) That do not have in place a statewide 
automated child support enforcement system that meets the requirements 
of the FSA of 1988; (2) States which fail to meet a critical milestone, 
as identified in their APDs; (3) States which fail to timely and 
completely submit APD updates; (4) States whose APD indicates the need 
for a total system redesign; (5) States developing systems under 
waivers pursuant to section 452(d)(3) of the Social Security Act or, 
(6) States whose system development efforts we determine are at risk of 
failure, significant delay, or significant cost overrun.
    With respect to this last item, we would point out that Year 2000 
systems compliance is critical to State child support enforcement 
program automation efforts. Accordingly, the requirement above would 
apply to States which are not Year 2000 compliant and which do not have 
an existing assessment and monitoring mechanism in place. We would 
consider any such state at serious risk of systems failure.
    OCSE will carefully review States' system development efforts, 
using States' APD and APDU submissions, other documentation, on-site 
reviews and monitoring, etc., relating to States' efforts to meet 
PRWORA requirements. Based on this review, OCSE may

[[Page 14409]]

determine that a State must obtain Independent Validation and 
Verification (IV&V) services and will so require as a condition of its 
approval of the State's APD and associated funding or contract-related 
documents. OCSE is in the process of hiring an Independent Validation 
and Verification (IV&V) contractor to assist in making this 
determination.
    Independent validation and verification efforts must be conducted 
by an entity that is independent from the State. We would only provide 
very limited exceptions to this requirement based on a State's request. 
For example, we would consider an exception in a situation where a 
State has an existing IV&V provider in place which is independent of 
the child support agency (or other entity responsible for systems 
development), which meets all criteria set forth in these rule and 
where the State's systems development efforts are on track as a result.
    The independent validation and verification provider must:
     Develop a project workplan. The plan must be provided 
directly to OCSE at the same time it is given to the State.
     Review and make recommendations on both the management of 
the project, both State and vendor, and the technical aspects of the 
project. The results of this analysis must be provided directly to OCSE 
at the same time it is given to the State.
     Consult with all stakeholders and assess the user 
involvement and buy-in regarding system functionality and the system's 
ability to meet program needs.
     Conduct an analysis of past project performance (schedule, 
budget) sufficient to identify and make recommendations for 
improvement.
     Provide a risk management assessment and capacity planning 
services.
     Develop performance metrics which allow tracking of 
project completion against milestones set by the State.
    The RFP and contract for selecting the IV&V provider must be 
submitted to OCSE for prior approval and must include the experience 
and skills of the key personnel proposed for the IV&V analysis. In 
addition, the contract must specify by name the key personnel who 
actually will work on the project.
    ACF recognizes that many States already have obtained IV&V 
services. OCSE will review those arrangements to determine if they meet 
the criteria specified above.
    The requirement that a State obtain an IV&V provider if it 
significantly misses one or more milestones in their APD is intended to 
assist the State in obtaining an independent assessment of their system 
development project. The IV&V provider will make an independent 
assessment and recommendations for addressing the systemic problems 
that resulted in the missed milestones before the situation reaches the 
point where suspension of the State's APD and associated Federal 
funding approval is necessary. Any reports prepared by an IV&V provider 
must be submitted to OCSE at the same time they are submitted to the 
State's project manager.
    In addition, if a State fails to meet milestones in its APD, OCSE 
may fully or partially suspend the APD and associated funding. OCSE 
currently has authority under 45 CFR 307.40 to suspend a State's APD if 
``the system ceases to comply substantially with the criteria, 
requirements, and other provision of the APD * * *'' This action may 
include suspension of future systems efforts under the APD until 
satisfactory corrective action is taken. In such cases, funding for 
current efforts, i.e., those not affected by the suspension, would 
continue to be available, although OCSE would closely monitor such 
expenditures. In more serious cases, suspension would involve cessation 
of all Federal funds for the project until such time as the State 
completed corrective action.
    We invite comments on this approach as well as suggestions for 
alternative actions for addressing missed milestones.
    Related to this discussion, the Department has recently been 
discussing with our partners, including State staff, representatives of 
the corporate community, and other Federal agencies, the need to re-
examine the processes associated with development of State systems. 
Many issues and concerns have been raised in these discussions, 
including the contracting process and risk sharing among the partners.
    There is broad consensus among the partners that a re-examination 
of the processes associated with development of State systems is 
necessary. DHHS is committed to moving forward with this process with 
the goal of implementing changes that will facilitate and improve State 
system development efforts. We would expect that this process would 
build upon a recent effort, termed the ``Information Technology 
Partnership,'' which resulted in changes in policies regarding system 
transfers, depreciation and expensing, and increases in the thresholds 
for prior Federal approval of certain APDs and contracts.

Review and Certification of Mandatory Automated Systems

    We are proposing to revise 45 CFR 307.25, ``Review and 
certification of computerized support enforcement systems,'' by 
replacing the citation ``Sec. 307.10'' with the citations 
``Secs. 307.10, or 307.11'' in the introductory language to reflect 
other changes made in this document.

FFP Availability

    We are proposing to revise Sec. 307.30, ``Federal financial 
participation at the 90 percent rate for computerized support 
enforcement systems'', to reflect changes made to section 455(a)(3) of 
the Act by section 344(b)(1) of PRWORA regarding the limited extension 
of 90 percent Federal financial participation.
    Currently, paragraph (a) of the regulation provides that, until 
September 30, 1995, Federal financial participation was available at 
the 90 percent rate in expenditures for the planning, design, 
development, installation or enhancement of a computerized support 
enforcement system as described in Secs. 307.5 and 307.10, if specific 
conditions are met. Federal law extends the availability of FFP at the 
90 percent rate until September 30, 1997, for such activities included 
in an approved APD or APDU submitted on or before September 30, 1995.
    Therefore, proposed paragraph (a) would specify that financial 
participation is available at the 90 percent rate for expenditures made 
during Federal fiscal years 1996 and 1997 for the planning, design, 
development, installation or enhancement of a CSES as described in 
Secs. 307.5 and 307.10, but limited to the amount in an APD or APDU 
submitted on or before September 30, 1995, and approved by OCSE.
    Currently, paragraph (b) provides that Federal funding at the 90 
percent rate is available in expenditures for the rental or purchase of 
hardware and proprietary operating/vendor software during the planning, 
design, development, installation, enhancement or operation of a CSES 
described in Secs. 307.5 and 307.10.
    To reflect the statutory changes discussed earlier, paragraph 
(b)(1), as proposed, would provide Federal funding at the 90 percent 
rate until September 30, 1997, on a limited basis in accordance with 
paragraph (a) of this section for such expenditures.
    Similarly, under proposed paragraph (b)(2), FFP is available at the 
90 percent rate until September 30, 1997, for expenditures for the 
rental or purchase

[[Page 14410]]

of proprietary operating/vendor software necessary for the operation of 
hardware during the planning, design, development, installation or 
enhancement of a computerized support enforcement system in accordance 
with the limitations in paragraph (a) of this section, and the OCSE 
guideline entitled ``Automated Systems for Child Support Enforcement: A 
Guide for States.'' FFP at the 90 percent rate remains unavailable for 
proprietary applications software developed specifically for a CSES. 
(See OCSE-AT-96-10 dated December 23, 1996 regarding the procedures for 
requesting and claiming 90 percent Federal funding.)
    ACF has issued proposed regulations at 63 FR 10173, on March 2, 
1998, to implement the provisions in section 455(a)(3)(B) of the Act, 
regarding the availability and allocation of Federal funding at the 80 
percent rate for Statewide systems.
    With respect to regular funding, we are proposing to amend 45 CFR 
307.35, ``Federal financial participation at the applicable matching 
rate for computerized support enforcement systems'', by replacing the 
citation ``Sec. 307.10'' with the citations ``Secs. 307.10, or 307.11'' 
in paragraph (a) to reflect other changes made in this document.

Suspension of APD Approval

    Similar to the above, we are proposing to amend 45 CFR 307.40, 
``Suspension of approval of advance planning document for computerized 
support enforcement systems'', to make a conforming change to replace 
the citation ``Sec. 307.10'' with the citations ``Secs. 307.10, or 
307.11'' in paragraph (a) to reflect other changes made in this 
document.

Executive Order 12866

    Executive Order 12866 requires that regulations be drafted to 
ensure that they are consistent with the priorities and principles set 
forth in the Executive Order. The Department has determined that this 
proposed rule is consistent with these priorities and principles. The 
proposed changes in this rule, including IV-D State plan amendments, 
new functional requirements for CSESs, and limited extension of 90 
percent Federal funding, reiterate the language in the statute, and do 
not add any non-statutory requirements.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (Pub. L. 96-354) requires the 
Federal government to anticipate and reduce the impact of regulations 
and paperwork requirements on small entities. The Secretary certifies 
that these proposed regulations will not have a significant economic 
impact on a substantial number of small entities because the primary 
impact of these regulations is on State governments.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995, Public Law 104-13, all 
Departments are required to submit to the Office of Management and 
Budget (OMB) for review and approval any reporting or recordkeeping 
requirements inherent in a proposed or final rule. Interested parties 
may comment to OMB on these recordkeeping requirements as described 
below. This NPRM contains information collection requirements in 
Secs. 302.85(a)(1) and (2), 307.11 (e) and (f), 307.13(a) and (c), and 
307.15(b)(2) which the Department has submitted to OMB for its review.
    More specifically, Secs. 302.85(a)(1) and (2) include IV-D State 
plan amendments; Secs. 307.11(e) and (f) include procedures for 
establishing a State Case Registry (SCR) and for providing information 
to the Federal Case Registry (FCR), Sec. 307.13(a) includes written 
policies concerning access to data by IV-D agency personnel and sharing 
of data with other persons to carry out IV-D program activities, 
Sec. 307.13(c) includes procedures that all personnel with access to or 
use of confidential data in the CSES be informed of applicable 
requirements and penalties, and receive training in security 
procedures, and Sec. 307.15 describes several requirements for an 
advance planning document for a Statewide computerized support 
enforcement system.
    The respondents to the information collection requirements in this 
rule are the State child support enforcement agencies of the 50 States, 
the District of Columbia, Guam, Puerto Rico, and the Virgin Islands. 
The respondents also include the courts that handle family, juvenile, 
and/or domestic relations cases within the 50 States, the District of 
Columbia, Guam, Puerto Rico, and the Virgin Islands. The Department 
requires this collection of information: (1) To determine compliance 
with the requirements for a Statewide computerized support enforcement 
system; (2) to determine State compliance with statutory requirements 
regarding informing IV-D personnel of integrity and security 
requirements for data maintained in the CSES; and (3) for States to 
make funding requests through advance planning documents, and APD 
updates.
    These information collection requirements will impose the estimated 
total annual burden on the States described in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                          Responses      Average                
                  Information collection                     Number of       per       burden per   Total annual
                                                            respondents   respondent    response       burden   
----------------------------------------------------------------------------------------------------------------
302.85(a) (1) and (2).....................................           27            1          .5            13.5
307.11(f)(1)..............................................           54  ...........       114.17        6,165  
307.11(f)(1)..............................................           54            1        46.27        2,499  
307.11(f)(1)..............................................           54      162,963          .083     730,400  
307.11(f)(1)..............................................           54           52         1.41        3,959  
307.11(e)(2)(ii)..........................................           54       25,200          .046      62,597  
307.11(e)(1)(ii)..........................................        3,045          447          .029      39,472  
307.13 (a) and (c)........................................           27            1        16.7           451  
307.15 (APD)..............................................         9.33            1       240           2,239  
307.15 (APDU).............................................        62.33            1        60           3,740  
                                                           -----------------------------------------------------
      Total...............................................  ...........  ...........  ............     851,535.5
----------------------------------------------------------------------------------------------------------------

    The Administration for Children and Families will consider comments 
by the public on the proposed information collection in:
     Evaluating whether the proposed collections are necessary 
for the proper performance of the functions of ACF, including whether 
the information will have practical utility;
     Evaluating the accuracy of ACF's estimate of the burden of 
the proposed

[[Page 14411]]

collection of information, including the validity of the methodology 
and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collection of information on 
those who have to respond, including the use of appropriate automated, 
electronic, mechanical, or other technology to permit electronic 
submission of responses.
    OMB is required to make a decision concerning the collection of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment is best assured of having its full effect if OMB 
receives it within 30 days of publication. Written comments to OMB for 
the proposed information collection should be sent directly to the 
following: Office of Management and Budget, Paperwork Reduction 
Project, 725 17th Street, NW., Washington, DC 20503, Attn: Ms. Wendy 
Taylor.

List of Subjects

45 CFR Part 302

    Child support, Grant programs--social programs, Reporting and 
recordkeeping requirements, Unemployment compensation.

45 CFR Part 304

    Child support, Grant programs--social programs, Penalties, 
Reporting and recordkeeping requirements, Unemployment compensation.

45 CFR Part 307

    Child support, Grant programs--social programs, Computer 
technology, Reporting and recordkeeping requirements.

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

    Dated: March 6, 1998.
Olivia A. Golden,
Assistant Secretary for Children and Families.

    Approved: March 17, 1998.
Donna E. Shalala,
Secretary, Department of Health and Human Services.

    For the reasons set forth in the preamble, 45 CFR parts 302, 304 
and 307 are proposed to be amended as set forth below.

PART 302--STATE PLAN REQUIREMENTS

    1. The authority citation for part 302 continues to read as 
follows:

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


Sec. 302.85  [Amended]

    2. Section 302.85 is amended by revising paragraph (a) to read as 
follows:
* * * * *
    (a) General. The State plan shall provide that the State will have 
in effect a computerized support enforcement system:
    (1) By October 1, 1997, which meets all the requirements of title 
IV-D of the Act which were enacted on or before the date of enactment 
of the Family Support Act of 1988 in accordance with Sec. 307.5 and 
Sec. 307.10 of this chapter and the OCSE guideline entitled ``Automated 
Systems for Child Support Enforcement: A Guide for States.'' This guide 
is available from the Child Support Information Systems Division, 
Office of State Systems, ACF, 370 L'Enfant Promenade, SW., Washington, 
DC 20447; and
    (2) By October 1, 2000, which meets all the requirements of title 
IV-D of the Act enacted on or before the date of enactment of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 
in accordance with Sec. 307.5 and Sec. 307.11 of this chapter and the 
OCSE guideline referenced in paragraph (a)(1) of this section.
* * * * *

PART 304--FEDERAL FINANCIAL PARTICIPATION

    1. 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), 1396b(p), and 1396(k).


Sec. 304.20  [Amended]

    2. In Sec. 304.20, reference to ``Until September 30, 1995'' in 
paragraph (c) is revised to read ``Until September 30, 1997''.

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.


Sec. 307.0  [Amended]

    2. Section 307.0 is amended by revising the introductory text; 
redesignating paragraphs (c) through (h) as paragraphs (d) through (i); 
and adding a new paragraph (c) to read as follows:
* * * * *
    This part implements sections 452(d) and (e), 454(16) and (24) and 
454A, and 455(a)(1)(A) and (B), and (a)(3)(A) of the Act which 
prescribe:
* * * * *
    (c) Security and confidentiality requirements for computerized 
support enforcement systems;
* * * * *


Sec. 307.1  [Amended]

    3. Section 307.1 is amended by redesignating paragraphs (b) through 
(j) as paragraphs (c) through (k); replacing the citation 
``Sec. 307.10'' with the citations ``Secs. 307.10, or 307.11'' in the 
newly designated paragraphs (d) and (g); and adding a new paragraph (b) 
to read as follows:
* * * * *
    (b) Business day means a day on which State offices are open for 
business.
* * * * *


Sec. 307.5  [Amended]

    4. Section 307.5 is amended by removing paragraphs (a) and (b); 
redesignating paragraphs (c) through (h) as paragraphs (b) through (g); 
replacing the citation ``Sec. 307.10'' with the citations 
``Secs. 307.10, or 307.11'' in the newly redesignated paragraph (d); 
and adding a new paragraph (a) to read as follows:
* * * * *
    (a) Basic requirement.
    (1) By October 1, 1997, each State must have in effect an 
operational computerized support enforcement system, which meets 
Federal requirements under Sec. 302.85(a)(1). OCSE will review each 
system to certify that these requirements are met; and
    (2) By October 1, 2000, each State must have in effect an 
operational computerized support enforcement system, which meets 
Federal requirements under Sec. 302.85(a)(2). OCSE will review each 
system to certify that these requirements are met.
* * * * *
    5. Section 307.10 is amended in the introductory text by replacing 
the citation ``Sec. 302.85(a)'' with the citation 
``Sec. 302.85(a)(1)''; replacing ``AFDC'' with ``TANF'' in paragraph 
(b)(10); removing paragraph (b)(14); redesignating paragraphs (b)(15) 
and (16) as paragraphs (b)(14) and (15); and revising the section 
heading to read as follows:


Sec. 307.10  Functional requirements for computerized support 
enforcement systems in operation by October 1, 1997.

* * * * *
    6. Section 307.11 is added to read as follows:

[[Page 14412]]

Sec. 307.11  Functional requirements for computerized support 
enforcement systems in operation by October 1, 2000.

    At a minimum, each State's computerized support enforcement system 
established and operated under the title IV-D State plan at 
Sec. 302.85(a)(2) must:
    (a) Be planned, designed, developed, installed or enhanced, and 
operated in accordance with an initial and annually updated APD 
approved under Sec. 307.15 of this part;
    (b) Control, account for, and monitor all the factors in the 
support collection and paternity determination processes under the 
State plan. At a minimum, this includes the following:
    (1) The activities described in Sec. 307.10, except paragraphs 
(b)(3), (8) and (11); and
    (2) The capability to perform the following tasks with the 
frequency and in the manner required under, or by this chapter:
    (i) Program Requirements. Performing such functions as the 
Secretary may specify related to management of the State IV-D program 
under this chapter including:
    (A) Controlling and accounting for the use of Federal, State and 
local funds in carrying out the program either directly or through an 
interface with State financial management and expenditure information; 
and
    (B) Maintaining the data necessary to meet Federal reporting 
requirements under this chapter in a timely basis as prescribed by the 
Office;
    (ii) Allocation of Performance Indicators. Enabling the Secretary 
to determine the incentive payments and penalty adjustments required by 
sections 452(g) and 458 of the Act by:
    (A) Using automated processes to:
    (1) Maintain the requisite data on State performance for paternity 
establishment and child support enforcement activities in the State; 
and
    (2) Calculate the paternity establishment percentage for the State 
for each fiscal year;
    (B) Having in place system controls to ensure the completeness, and 
reliability of, and ready access to, the data described in paragraph 
(b)(2)(i)(A)(1) of this section, and the accuracy of the calculation 
described in paragraph (b)(2)(i)(A)(2) of this section; and
    (iii) System Controls: Having systems controls (e. g., passwords or 
blocking of fields) to ensure strict adherence to the policies 
described in Sec. 307.13(a); and
    (3) Activities described in Title III of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 not 
otherwise addressed in this part.
    (c) Collection and Disbursement of Support Payments. To the maximum 
extent feasible, assist and facilitate the collection and disbursement 
of support payments through the State disbursement unit operated under 
section 454B of the Act through the performance of functions which, at 
a minimum, include the following:
    (1) Transmission of orders and notices to employers and other 
debtors for the withholding of income:
    (i) Within 2 business days after receipt of notice of income, and 
the income source subject to withholding from a court, another State, 
an employer, the Federal Parent Locator Service, or another source 
recognized by the State; and
    (ii) Using uniform formats prescribed by the Secretary;
    (2) Ongoing monitoring to promptly identify failures to make timely 
payment of support; and
    (3) Automatic use of enforcement procedures, including procedures 
under section 466(c) of the Act if payments are not timely;
    (d) Expedited Administrative Procedures. To the maximum extent 
feasible, be used to implement the expedited administrative procedures 
required by section 466(c) of the Act.
    (e) State Case Registry. Have a State case registry that meets the 
requirements of this paragraph.
    (1) Definitions. When used in this paragraph and paragraph (f) of 
this section, the following definitions shall apply.
    (i) Participant means an individual who owes or is owed support or 
with respect to or on behalf of whom a support obligation is sought to 
be established or other individual connected to an order of support or 
a child support case being enforced.
    (ii) Participant type means the custodial party, non-custodial 
parent, putative father, or child, associated with a case or support 
order contained in the Federal case registry.
    (iii) locate request type refers to the purpose of the request for 
locate services to the Federal case registry. For example, paternity 
establishment, parental kidnapping or custody and visitation.
    (iv) locate source type refers to the external sources a locate 
submitter desires the Federal case registry to match against.
    (2) The State case registry shall contain a record of:
    (i) Every case receiving child support enforcement services under 
an approved State plan; and
    (ii) Every support order established or modified in the State on or 
after October 1, 1998.
    (3) Standardized data elements shall be included for each 
participant. These data elements shall include:
    (i) Names;
    (ii) Social security numbers;
    (iii) Dates of birth;
    (iv) Case identification numbers;
    (v) Other uniform identification numbers;
    (vi) Data elements required under paragraph (f)(1) of this section 
necessary for the operation of the Federal case registry; and
    (vii) Any other information that the Secretary may require as set 
forth in instructions issued by the Office.
    (4) The record shall include information for every case in the 
State case registry receiving services under an approved State plan 
that has a support order in effect. The information must include:
    (i) The amount of monthly (or other frequency) support owed under 
the order;
    (ii) Other amounts due or overdue under the order including 
arrearages, interest or late payment penalties and fees;
    (iii) Any amounts described in paragraph (e)(4)(i) and (ii) of this 
section that have been collected;
    (iv) The distribution of such collected amounts;
    (v) The birth date and, beginning no later than October 1, 1999, 
the name and social security number of any child for whom the order 
requires the provision of support; and
    (vi) The amount of any lien imposed in accordance with section 
466(a)(4) of the Act to enforce the order.
    (5) Establish and update, maintain, and regularly monitor case 
records in the State case registry for cases receiving services under 
the State plan. To ensure information on an established IV-D case is up 
to date, the State should regularly update the system to make changes 
to the status of a case, the participants of a case, and the data 
contained in the case record. This includes the following:
    (i) Information on administrative actions and administrative and 
judicial proceedings and orders related to paternity and support;
    (ii) Information obtained from comparison with Federal, State or 
local sources of information;
    (iii) Information on support collections and distributions; and
    (iv) Any other relevant information.
    (6) States may link local case registries of support orders through 
an automated information network in meeting paragraph (e)(2)(ii) of 
this section provided that all other requirements of this paragraph are 
met.
    (f) Information Comparison and other Disclosure of Information. 
Extract

[[Page 14413]]

information, at such times and in such standardized format or formats, 
as may be required by the Secretary, for purposes of sharing and 
comparing with, and receiving information from, other data bases and 
information comparison services, to obtain or provide information 
necessary to enable the State, other States, the Office or other 
Federal agencies to carry out this chapter. As applicable, these 
comparisons and disclosures must comply with the requirements of 
section 6103 of the Internal Revenue Code of 1986 and the requirements 
of section 453 of the Act. The comparisons and sharing of information 
include:
    (1) Effective October 1, 1998, (or for the child data, not later 
than October 1, 1999 the State furnishing the following information to 
the Federal case registry, including updates as necessary and notices 
of expiration of support orders, on participants in cases receiving 
services under the State plan, and in non-IV-D support orders 
established or modified on or after October 1, 1998:
    (i) State Federal Information Processing Standard (FIPS) code and 
optionally, county code;
    (ii) State case identification number;
    (iii) State member identification number;
    (iv) Case type (IV-D, non-IV-D);
    (v) Social security number and any necessary alternative social 
security numbers;
    (vi) Name, including first, middle, last name and any necessary 
alternative names;
    (vii) Sex (optional);
    (viii) Date of birth;
    (ix) Participant type (custodial party, non-custodial parent, 
putative father, child);
    (x) Family violence indicator (domestic violence or child abuse);
    (xi) Indication of an order;
    (xii) Locate request type (optional);
    (xiii) Locate source (optional); and
    (xiv) Any other information the Secretary may require as set forth 
in instructions issued by the Office.
    (2) Requesting or exchanging information with the Federal parent 
locator service for the purposes specified in section 453 of the Act;
    (3) Exchanging information with State agencies, both within and 
outside of the State, administering programs under titles IV-A and XIX 
of the Act, as necessary to perform State agency responsibilities under 
this chapter and under such programs; and
    (4) Exchanging information with other agencies of the State, and 
agencies of other States, and interstate information networks, as 
necessary and appropriate, to assist the State and other States in 
carrying out the purposes of this chapter.
    7. Section 307.13 is added to read as follows:


Sec. 307.13  Security and Confidentiality for computerized support 
enforcement systems in operation after October 1, 1997.

    The State IV-D agency shall:
    (a) Information Integrity and Security. Have safeguards on the 
integrity, accuracy, completeness of, access to, and use of data in the 
computerized support enforcement system. These safeguards shall include 
written policies concerning access to data by IV-D agency personnel, 
and the sharing of data with other persons to:
    (1) Permit access to and use of data to the extent necessary to 
carry out the State IV-D program under this chapter; and
    (2) Specify the data which may be used for particular IV-D program 
purposes, and the personnel permitted access to such data;
    (3) Limit access and disclosure to non-IV-D personnel or for Non-
IV-D program purposes as authorized by Federal law.
    (b) Monitoring of access. Monitor routine access to and use of the 
computerized support enforcement system through methods such as audit 
trails and feedback mechanisms to guard against, and promptly identify 
unauthorized access or use;
    (c) Training and Information. Have procedures to ensure that all 
personnel, including State and local staff and contractors, who may 
have access to or be required to use confidential program data in the 
computerized support enforcement system are:
    (1) Informed of applicable requirements and penalties, including 
those in section 6103 of the Internal Revenue Service Code and section 
453 of the Act; and
    (2) Adequately trained in security procedures; and
    (d) Penalties. Have administrative penalties, including dismissal 
from employment, for unauthorized access to, disclosure or use of 
confidential information.


Sec. 307.15  [Amended]

    8. Section 307.15 is amended by replacing the citation 
``Sec. 307.10'' with the citations ``Secs. 307.10, or 307.11'' in 
paragraphs (a), (b), and (c); and revising paragraph (b)(2), (b)(9) and 
(b)(10) to read as follows:
* * * * *
    (b) * * *
    (2) The APD must specify how the objectives of the computerized 
support enforcement system in Secs. 307.10, or 307.11 will be carried 
out throughout the State; this includes a projection of how the 
proposed system will meet the functional requirements of Secs. 307.10, 
or 307.11 and how the single State system will encompass all political 
subdivisions in the State by October 1, 1997, or October 1, 2000 
respectively.
* * * * *
    (9) The APD must contain a proposed budget and schedule of life-
cycle milestones relative to the size, complexity and cost of the 
project which at a minimum address requirements analysis, program 
design, procurement and project management; and, a description of 
estimated expenditures by category and amount for:
    (i) Items that are eligible for funding at the enhanced matching 
rate, and
    (ii) items related to developing and operating the system that are 
eligible for Federal funding at the applicable matching rate;
    (10) The APD must contain an implementation plan and backup 
procedures to handle possible failures in system planning, design, 
development, installation or enhancement.
    (i) These backup procedures must include provision for independent 
validation and verification (IV&V) analysis of a State's system 
development effort in the case of States:
    (A) that do not have in place a statewide automated child support 
enforcement system that meets the requirements of the FSA of 1988;
    (B) States which fail to meet a critical milestone, as identified 
in their APDs;
    (C) States which fail to timely and completely submit APD updates;
    (D) States whose APD indicates the need for a total system 
redesign;
    (E) States developing systems under waivers pursuant to section 
452(d)(3) of the Social Security Act; or,
    (F) States whose system development efforts we determine are at 
risk of failure, significant delay, or significant cost overrun.
    (ii) Independent validation and verification efforts must be 
conducted by an entity that is independent from the state (unless the 
State receives an exception from OCSE) and the entity selected must:
    (A) Develop a project workplan. The plan must be provided directly 
to OCSE at the same time it is given to the State.
    (B) Review and make recommendations on both the management of the 
project, both State and vendor, and the technical aspects of the 
project. The IV&V provider must provide the results of its analysis 
directly to OCSE at the same time it reports to the State.

[[Page 14414]]

    (C) Consult with all stakeholders and assess the user involvement 
and buy-in regarding system functionality and the system's ability to 
meet program needs.
    (D) Conduct an analysis of past project performance sufficient to 
identify and make recommendations for improvement.
    (E) Provide a risk management assessment and capacity planning 
services.
    (F) Develop performance metrics which allow tracking project 
completion against milestones set by the State.
    (iii) The RFP and contract for selecting the IV&V provider (or 
similar documents if IV&V services are provided by other State 
agencies) must include the experience and skills of the key personnel 
proposed for the IV&V analysis and specify by name the key personnel 
who actually will work on the project and must be submitted to OCSE for 
prior approval.
* * * * *


Sec. 307.25  [Amended]

    9. Section 307.25 is amended by replacing the citation 
``Sec. 307.10'' with the citations ``Secs. 307.10, or 307.11'' in the 
introductory text.
    10. Section 307.30 is amended by revising paragraph (a) 
introductory text and paragraph (b) to read as follows:
* * * * *
    (a) Conditions that must be met for FFP. During Federal fiscal 
years 1996, and 1997, Federal financial participation is available at 
the 90 percent rate in expenditures for the planning, design, 
development, installation or enhancement of a computerized support 
enforcement system as described in Secs. 307.5 and 307.10 of this 
chapter limited to the amount in an advance planning document, or APDU 
submitted on or before September 30, 1995, and approved by OCSE if:
* * * * *
    (b) Federal financial participation in the costs of hardware and 
proprietary software. (1) Until September 30, 1997, FFP at the 90 
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 in accordance with the limitation in paragraph (a) of 
this section.
    (2) Until September 30, 1997, FFP at the 90 percent rate is 
available for expenditures for the rental or purchase of proprietary 
operating/vendor software necessary for the operation of hardware 
during the planning, design, development, installation or enhancement 
of a computerized support enforcement system in accordance with the 
limitation in paragraph (a) of this section, and the OCSE guideline 
entitled ``Automated Systems for Child Support Enforcement: A Guide for 
States.'' FFP at the 90 percent rate is not available for proprietary 
application software developed specifically for a computerized support 
enforcement system. (See Sec. 307.35 of this part regarding 
reimbursement at the applicable matching rate.)
* * * * *


Sec. 307.35  [Amended]

    11. Section 307.35 is amended by replacing the citation 
``Sec. 307.10'' with the citations ``Secs. 307.10, or 307.11'' in 
paragraph (a).


Sec. 307.40  [Amended]

    12. Section 307.40 is amended by replacing the citation 
``Sec. 307.10'' with the citations ``Secs. 307.10, or 307.11'' in 
paragraph (a).

[FR Doc. 98-7714 Filed 3-24-98; 8:45 am]
BILLING CODE 4150-04-P