[Federal Register Volume 63, Number 162 (Friday, August 21, 1998)]
[Rules and Regulations]
[Pages 44795-44817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22276]


=======================================================================
-----------------------------------------------------------------------

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: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule implements 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.

EFFECTIVE DATE: This rule is effective August 21, 1998.

FOR FURTHER INFORMATION CONTACT: Robin Rushton (202) 690-1244.

SUPPLEMENTARY INFORMATION:

Statutory Authority

    This regulation is published under the authority of several 
provisions of the Social Security Act (the Act), as amended by the 
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 
(PRWORA). 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 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.
    This regulation is 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.
    Under PRWORA, States must build on existing automation efforts 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.
    These requirements 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)).
    We issued proposed rules in the Federal Register on March 25, 1998, 
(63 FR 14402) setting forth the framework for automation that State 
systems must have in place by the October 1, 2000, deadline. Thirty 
letters from State agencies and other interested parties were received 
as a result. While the vast majority of these comments did not

[[Page 44796]]

necessitate changes to the rule, we did make modifications in the 
preamble discussion and/or the regulation primarily in the following 
areas as a result of the comments received:
     Sec. 307.11(f), Federal Case Registry Data Elements.
     Sec. 307.15, Independent Verification and Validation.
    These changes and several others of a clarifying nature are 
explained in detail in the following section, Regulatory Provisions. A 
discussion of all the comments received and our responses follows in 
the preamble under the Response to Comments section.

Regulatory Provisions

State Plan Requirements (Part 302)

    To implement the statutory changes, we revised 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. In addition, the State must have a Computerized Support 
Enforcement System (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.
    Section 302.85(a) of the final regulations reiterates the statutory 
requirements for mandatory automated systems for support enforcement. 
Section 302.85(a)(1) includes 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, Sec. 302.85(a)(2) requires 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 Act as amended by 
PRWORA, Sec. 304.20 is amended 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.

Computerized Support Enforcement Systems (Part 307)

    Computerized support enforcement systems is amended 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 revisions to 45 CFR 
302.85, which were discussed earlier.
    The title of Sec. 307.10 is revised to read ``Functional 
requirements for computerized support enforcement systems in operation 
by October 1, 1997'', and to 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 
and Confidentiality of computerized support enforcement systems in 
operation by October 1, 2000'' to reflect these changes.
    Section 307.0, ``Scope of this part,'' is revised 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. 
New statutory language is referenced in the introductory section and a 
new paragraph (c) is added to refer to the security and confidentiality 
requirements for CSESs. Paragraphs (c) through (h) are redesignated as 
paragraphs (d) through (i).
    In Sec. 307.1, ``Definitions'', the definition of ``Business day'' 
has been added as defined in the new section 454A(g)(2) of the Act. 
Accordingly, paragraphs (b) through (j) are redesignated as paragraphs 
(c) through (k). In addition, in the redesignated paragraphs (d) and 
(g), the citation ``Sec. 307.10'' is replaced with the citations 
``Secs. 307.10, or 307.11'' to reflect the regulatory changes made 
below.

Mandatory Computerized Support Enforcement Systems

    Mandatory computerized support enforcement systems at 45 CFR 307.5 
is amended as follows:
    To reflect the amended section 454(24) of the Act, paragraphs (a) 
and (b) are eliminated in their entirety and a new paragraph (a) is 
added. Paragraphs (c) through (h) are redesignated as (b) through (g).
    Paragraph (a)(1) provides 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 that OCSE will review the 
systems to certify that these requirements are met. Under paragraph 
(a)(2), each State is required 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.
    In addition, under paragraph (d), the reference to ``Section 
307.10'' is replaced by ``Sections 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.'' is revised to read ``Functional requirements for 
computerized support enforcement systems in operation by October 1, 
1997.'' In the introductory language, the citation ``Sec. 302.85(a)'' 
is replaced by the citation ``Sec. 302.85(a)(1) to reflect changes made 
earlier in the regulations. The citation ``AFDC'' is replaced with the 
citation ``TANF'' (Temporary Assistance for Needy Families) in 
paragraph (b)(10).
    Paragraph (b)(14) is 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. Paragraphs 
(b)(15) and (16) are redesignated as paragraphs (b)(14) and (15).
    A new Sec. 307.11, ``Functional requirements for computerized 
support enforcement systems in operation by October 1, 2000,'' is added 
and reiterates the statutory requirements in sections 454(16) and 454A 
of the Act, as discussed below.
    The introductory language of Sec. 307.11 specifies 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. Under paragraph (a), the CSES in 
operation by October 1, 2000 must be planned, designed, developed, 
installed or enhanced and operated in accordance

[[Page 44797]]

with an initial and annually updated APD approved under Sec. 307.15 of 
the regulations. As explained in the proposed rule, if a 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 a State 
elects to develop a new CSES, a separate implementation APD must be 
submitted.
    Under paragraph (b), the CSES must 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 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.
    Paragraph (b)(2) describes 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.
    Under 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. States can 
meet the financial accountability requirements through an interface. 
This provision is intended to provide States flexibility to continue 
existing practices which may be in place including the use of an 
auxiliary system. We have added reference to the use of auxiliary 
systems in the regulatory language.
    Paragraph (b)(2)(i)(B) requires that the system 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 requirement 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) 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 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.
    Paragraph (b)(2)(ii)(B) requires 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.
    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 Sec. 307.13(a), 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 paragraph (b)(3), the system must control, account for, and 
monitor the activities in the Act added by PRWORA not otherwise 
addressed in this part. Paragraph (c) requires 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.
    Paragraph (c)(2) requires the system to monitor accounts, on an 
ongoing basis, to identify promptly failures to make support payments 
in a timely manner. Paragraph (c)(3) 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.
    Paragraph (d) requires that, to the maximum extent feasible, the 
system 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.
    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. Paragraph (e)(1)

[[Page 44798]]

contains definitions of terms used in this section.
    Paragraph (e)(2) describes the records which the registry must 
contain. Under paragraph (e)(2)(i), the registry must contain a record 
of every case receiving child support enforcement services under an 
approved State plan. Under 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 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) 
and other uniform identification numbers, data elements required under 
paragraph (f)(1) of this section for the operation of the Federal case 
registry (FCR), issuing State of an order, and any other data elements 
required by the Secretary. In response to comments on the proposed 
rule, we added ``the issuing State of the order.'' We made this change 
because as commenters correctly pointed out, information on the issuing 
State of the order is essential in processing interstate cases.
    Under 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 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. In the 
proposed rule, we invited 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. As 
noted in the response to comments found later in this preamble, while 
many commenters responded to this request, the responses varied widely. 
Therefore, we are not adding timeframes to this section of the 
regulation.
    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 participants 
of a case, and the other data contained in the case record. This 
includes: (1) Information on administrative and judicial 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. In the proposed rule, we included reference to 
``administrative actions and proceedings'' under item (1) above. We 
have deleted this language in response to comments on the proposed rule 
pointing out that the information in orders is most useful and while 
relevant to the Statewide system, other information on actions and 
proceedings would not be meaningful for purposes of the case registry.
    Under the paragraph (e)(6), the State is authorized to meet the 
requirement in paragraph (e)(2)(ii) of this section which requires 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 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. The system must also comply with safeguarding 
and disclosure requirements specified in the Act.
    Under paragraph (f)(1), effective October 1, 1998, the State must 
furnish information in the State case registry to the Federal case 
registry. To ensure the effective implementation of the Federal case 
registry, required data elements on IV-D cases must be reported by 
October 1, 1998, to be followed by initial non-IV-D submissions on or 
before January 1, 1999. States 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 certain child data. In the proposed rule, we invited 
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. While we clarified the above dates, with two 
exceptions we have not added additional timeframes because there was no 
indication that this would be helpful. With respect to the exceptions 
noted, commenters noted that it was especially important that the 
Family Violence indicator and the Federal case registry information be 
up-to-date and therefore, we have added a requirement that the Family 
Violence indicator and the Federal case registry information be updated 
within five business days of receipt by the IV-D agency of new or 
changed information, including information which would necessitate 
adding or removing a Family Violence indicator.
    Sections 453(h)(2) and (3) of the Act requires the inclusion of 
child data in the Federal case registry and provide the Secretary of 
the Treasury with access to Federal case registry 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 this rule, States must provide to the Federal case registry 
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 type (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.

[[Page 44799]]

    With respect to domestic violence information identified in item 10 
above and addressed under paragraph (f)(1)(x) of this rule, 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. 
OCSE will not disclose any information on a participant in a IV-D case 
or non-IV-D support order to any person unless otherwise specified in 
section 453(b)(2), if the State has included a ``family violence'' 
indicator on such participant.
    Section 453(b)(2) of the Act provides that a court may have access 
to information in a case when a participant in the case has been 
identified with a Family Violence indicator. This section provides that 
disclosure to a court or agent of the court, may occur if, upon receipt 
of the information, the court or agent of the court determines whether 
disclosure beyond the court could be harmful to the parent or the child 
and, if the court makes such a determination, the court or its agent 
shall not make such disclosure.
    Accordingly, under 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 the 
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 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 title IV-A, title IV-D and 
title XIX.
    Under the 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.
    With the use of these automated data processing (ADP) systems, and 
the data they maintain and manipulate, come concerns about the security 
and privacy of the 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.
    This rule reiterates 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.''
    Paragraph (a) requires 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 
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 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.
    In response to a comment, we have revised the language in the 
proposed rule under paragraph (a)(3) to cover the disclosure of 
information to State agencies administering programs under titles IV-A 
and XIX of the Act. Pursuant to section 454A(f)(3) of the Act, State 
IV-D agencies are required to exchange information with State IV-A and 
XIX agencies as necessary to carry out the title IV-A, and XIX 
programs. As drafted in the NPRM, this provision did not clearly 
identify the specific disclosures of information that were authorized 
and therefore, was confusing.
    Paragraph (b) requires 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.
    Paragraph (c) requires 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 and the security and safeguarding 
requirements for data obtained from the Internal Revenue Service.
    Finally, paragraph (d) requires the IV-D agency to have 
administrative penalties, including dismissal from employment, for 
unauthorized access to, disclosure or use of confidential information. 
In the proposed rule we solicited comments on all areas of computer 
systems security and data privacy relative to these regulations. We 
received relatively little input on this section of the proposed rules. 
One commenter asked that timeframes be added so that nothing would be 
left to State discretion, another indicated that the level of 
rulemaking was adequate and a couple of others asked that we limit 
rulemaking to the statute. Given this array of positions, and the fact 
that we heard no strong reaction to this section we are not making 
changes to the language in the proposed rule.

Approval of Advance Planning Documents

    The regulations at 45 CFR 307.15 speak to certain APD requirements 
specific to CSE automated system development. These rules make 
conforming amendments to address the changes made by PRWORA and to 
codify certain existing requirements and authorities related to APD and 
APDU oversight. We revised 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.

[[Page 44800]]

    Prior to this final rule, paragraph (b)(2) required 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. This paragraph 
is revised to 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 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.
    States 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 replaced 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. In response, we have made several changes in 
these regulations to strengthen the oversight and management of CSE 
systems development projects.
    First, we will aggressively monitor State CSE development efforts 
and as stated in the proposed rule 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 more closely review 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. 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. 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. All reports prepared by a 
State's quality assurance provider must be submitted directly to OCSE 
at the same time they are submitted to the State's project management.
    This rule provides for more systematic determinations and 
monitoring of key milestones in States' CSE systems development 
efforts, and more closely ties 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. Specifically, we 
added 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. The regulation includes a list of milestones 
which must be addressed as provided in the September 1996 ``DHHS State 
Systems Guide''.
    (OCSE will issue an addendum to the Guide to provide more 
information on milestones.) 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, users' manuals, and security and contingency plans; 
converting and testing data; developing, modifying or converting 
software; testing software; training staff; and, installing, testing 
and accepting systems. Specifically, we are requiring 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, securing substantial worker involvement and user 
buy-in throughout the project.
    With respect to funding, we will generally provide funding under an 
approved APD only for the most immediate milestones; 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, in Sec. 307.15(b)(10) we have expanded the 
requirements for an implementation plan and backup procedures to 
require certain States to obtain independent validation and 
verification services (IV&V). These States 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) which fail 
to meet a critical milestone, as identified in their APDs; (3) which 
fail to timely and completely submit APD updates; (4) whose APD 
indicates the need for a total system redesign; (5) developing systems 
under waivers pursuant to section 452(d)(3) of the Social Security Act; 
or, (6) 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.
    Also with respect to this last item, OCSE will carefully review 
States' system development efforts, using States' APD and APDU 
submissions, other documentation, on-site reviews

[[Page 44801]]

and monitoring, etc., relating to States' efforts to meet PRWORA 
requirements. Based on this review, OCSE will determine the type and 
scope of Independent Validation and Verification (IV&V) services that a 
State must utilize and will so require such IV&V services as a 
condition of its approval of the State's APD and associated funding or 
contract-related documents. As indicated in the proposed rule, OCSE has 
obtained the services of a 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 rules and 
where the State's systems development efforts are on track as a result.
    The independent validation and verification provider must:
     Develop a project work plan. 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 they are given to the State.
     Consult with all stakeholders and assess 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 
and as indicated in the proposed rule, 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. The responsibility, authority and 
accountability for successful completion of systems' projects rests 
with the designated single and separate State child support agency. 
OCSE also has a need to receive these independent validation and 
verification reports in a timely manner to fulfill their program 
stewardship and oversight responsibilities. As a general rule, OCSE 
will seek State reaction before acting upon any report submitted 
directly to us from a State-level IV&V contractor to avoid the 
possibility of acting upon misconceptions and erroneous data.
    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. In response to this proposal, several 
commenters recommended the use of a corrective action plan as an 
alternative reaction to a missed milestone. Another commenter raised 
the concern that a link between project funding and a missed milestone 
will further delay implementation. We believe the existing language 
provides sufficient flexibility to address these comments. As indicated 
above, funding would cease only in the most serious cases.
    As indicated in the Response to Comments section of this preamble, 
we received a number of comments on this requirement. We continue to 
believe that IV&V services will be necessary in some instances to 
ensure efficient and timely program automation.
    However, we also want to ensure that such assistance does not 
undermine or duplicate State efforts. When a trigger under these rules 
is reached pointing to the need for an IV&V provider, OCSE will, in 
close consultation with the States, assess the type and scope of IV&V 
services a State must utilize. The assessment will include whether OCSE 
through its Federal IV&V contracts can provide the independent review 
needed or whether the State will need to obtain its own IV&V services. 
Given OCSE's limited resources and the limited size of our IV&V 
contract, the independent reviews provided under the Federal IV&V 
contract are expected to be few in number and for smaller-scale, not 
lengthy IV&V reviews.

Review and Certification of Mandatory Automated Systems

    We revised 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 also revised 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.
    Paragraph (a) specifies 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.
    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.
    Paragraph (b)(1) specifies that Federal funding at the 90 percent 
rate is available until September 30, 1997, on a limited basis in 
accordance with paragraph (a) of this section for such expenditures.

[[Page 44802]]

    Similarly, under paragraph (b)(2), FFP is available at the 90 
percent rate until September 30, 1997, 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 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 is issuing regulations simultaneously 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 amended 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.

Response to Comments

    We received comments from a total of 30 commenters on the proposed 
rule published in the Federal Register March 25, 1998 (63 FR 14462) 
from State agencies and other interested parties. Specific comments and 
our response follows.

General Comments

    1. Comment: One commenter expressed concern that the regulation 
simply mirrored the statute and asked when States could anticipate 
further clarification.
    Response: We believe the statute provides a clear and adequate 
framework within which to regulate. However, the certification guide 
provides further explanation of the statutory and regulatory 
requirements for States' CSES certification. This guide was shared with 
all States on April 8, 1998, via OCSE AT-98-13 and was distributed at 
three OCSE-sponsored systems conferences held in March, 1998. The guide 
may also be downloaded from OCSE's Internet site (ftp://
ftp.acf.dhhs.gov/pub/oss/cse/csecert.exe).
    2. Comment: The FSA 1988 requirements called for a description in 
the APD of a cost-to-benefit measurement methodology that the State 
intended to use in the project. A commenter suggested that a 
confirmation on what OCSE's expectations are in this regard for PRWORA 
system certification would be helpful.
    Response: OCSE-AT-96-10 provides guidance in this area that may be 
helpful to the commenter. Specifically, the guidance explains that 
States that choose to enhance their existing FSA '88 certified system 
have the option of continuing to utilize that cost-benefit analysis, or 
to close out that project when the benefits exceed the cost and 
establish a new cost-benefit analysis for the PRWORA project.

State Plan Requirements (Part 302)

    1. Comment: One commenter questioned why the Certification Guide is 
needed in light of the regulations and suggested that it be eliminated. 
A couple of other commenters agreed with this suggestion. The first 
commenter went on to say that if the Guide is published, it should be 
incorporated in the rules so that it is available at the time of rule 
promulgation. Another commenter urged prompt release of the Guide in 
final form.
    Response: This rule does not initiate reference to the Guide in 
regulations but rather continues the procedures that have been in place 
since the Family Support Act automation requirements were implemented. 
As such, this rule merely updates the reference to speak to the 
Certification Guide which incorporates PRWORA requirements and 
recommendations made by a State/Federal workgroup established for this 
purpose. The Guide was disseminated to States (OCSE-AT-98-13) on April 
8, 1998, and is posted on OCSE's Web site. It also was disseminated at 
the March 1998 Systems conferences. The Certification Guide for PRWORA 
will be finalized in conjunction with these final automation 
regulations.
    2. Comment: One commenter noted that the preamble discussion of the 
State plan requirements incorrectly stated that section 454(24) of the 
Act provides that States have in effect by October 1, 1997 all IV-D 
requirements in PRWORA.
    Response: The commenter correctly pointed out a mistake in the 
preamble which we have fixed. The reference should have cited the 
October 1, 1997, deadline in reference to the Family Support Act 
automation requirements, not the automation requirements added by 
PRWORA.

Computerized Support Enforcement Systems (Part 307)

Functional Requirements for Computerized Support Enforcement Systems 
(Sec. 307.11)
    1. Comment: One commenter recommended that we limit any additional 
functional requirements to those required by statute or added by the 
Secretary after consultation with State IV-D Directors, noting that 
this would continue the collaborative, partnership process being 
promoted by OCSE.
    Response: We will continue to consult with the States in developing 
additional functional requirements for child support automated systems. 
We appreciate the collaborative, partnership process evidenced by the 
Federal/State workgroup that developed the functional requirements for 
automated systems in the Revised Certification Guide and the workgroups 
associated with the Expanded Federal Parent Locator Service.
    2. Comment: One commenter asked for clarification of the 
requirement that the system ``control, account for, and monitor the 
activities described in PRWORA not otherwise addressed in this part.''
    Response: The State/Federal certification work group has reviewed 
the existing certification requirements and has determined that 
existing functional requirements in the Guide related to Family Support 
Act requirements are sufficient for PRWORA requirements. Specifically, 
the Guide provides for the system to update and maintain in the 
automated case record all information, facts, events and transactions 
necessary to describe a case and all actions taken with respect to a 
case. The system must perform case monitoring to ensure that case 
actions are accomplished within required time frames. The system must 
maintain information required to prepare Federal reports, must generate 
reports to assist in case management and processing, and must ensure 
and maintain the accuracy of data.
    3. Comment: One commenter questioned the inclusion of language from 
section 454(16) of the Act and our

[[Page 44803]]

authority to regulate based on this language. The commenter asked that 
the first sentence of Sec. 307.11(b) be deleted, recognizing that it 
derives from section 454(16) of the Act, ``State plan for child and 
spousal support,'' not from section 454A of the Act, ``Automated data 
processing'' and that the list of ADP tasks be limited to those under 
section 454A of the Act.
    Response: The commenter is correct that this provision is from 
section 454(16) of the Act. However, that section speaks to the State 
plan requirement for automated systems for child support and thus is 
relevant to this rulemaking. The discussion of statutory authority for 
this rulemaking indicates that the rule implements new requirements 
found under sections 454(16), 454(24), 454A and 455(a)(3)(A) of the 
Act. We would also point out with respect to the first sentence, that 
this is not a new provision but rather is identical to the language in 
the prior rules for implementing the Family Support Act.
    4. Comment: Two commenters expressed concern that the requirement 
that the system control and account for the use of Federal, State and 
local funds directly or through an interface with State financial 
management and expenditure information went beyond the statute and 
would be difficult to implement.
    Response: The statute provides under section 454A(b) that the 
system perform functions including controlling and accounting for 
Federal, State and local funds and implies that this function is to be 
part of the statewide system. Our intent in regulating this provision 
is to provide maximum flexibility and permit States to continue to meet 
the financial accountability requirements through an auxiliary system. 
In fact, most of the systems we have seen do have this type of 
interface. However, we agree that an interface would not always be 
required and did not intend to require an interface when one wasn't 
necessary. We've modified the language in the regulation accordingly.
    5. Comment: Two commenters asked whether the intent of the 
requirement that States maintain the necessary data for paternity 
establishment and child support enforcement activities in the State for 
each fiscal year is that the system maintain out-of-wedlock birth 
statistics?
    Response: We do not require States to maintain out-of-wedlock birth 
statistics in the CSES. These statistics may be maintained by another 
State agency, such as State Vital Statistics agencies. However, the 
State IV-D agency must have access to this data to ensure accurate 
calculation of the paternity establishment standard and to meet Federal 
reporting requirements.
    6. Comment: One commenter pointed out that the requirement for the 
system to ``allocate'' performance indicators should actually be that 
the system ``calculate'' the indicators.
    Response: The commenter is correct and we have revised the 
regulation accordingly.
    7. Comment: One commenter suggested that since the PRWORA incentive 
formula is still unknown, the requirement for the system to compute 
performance indicators be excluded from the October 1, 2000 deadline.
    Response: The requirement that the system compute performance 
indicators used for incentives speaks to requirements for computing 
incentives under the existing incentive formula as well as the formula 
enacted by the Congress in Pub. L. 105-200.
    8. Comment: One commenter asked for clarification of the reference 
to ``other benefits'' in the statute at section 466(c) which speaks to 
enforcement procedures including Federal and State income tax refund 
offset, intercepting unemployment compensation insurance benefits, 
intercepting or seizing other benefits through State or local 
governments.
    Response: ``Other benefits'' as referenced in the statute merely 
refers to any other benefits that may be seized under State law to 
enforce child support beyond what is specifically referenced in the 
Act.
    9. Comment: One commenter requested clarification of the 
requirement that the State case registry be a component of the 
statewide automated system.
    Response: Section 454A(e) of the Act requires that the automated 
system of each State include a registry to be known as the State case 
registry and contain a record of each case in which services are being 
provided under title IV-D and each support order entered or modified on 
or after October 1, 1998. The section further provides that non-IV-D 
orders may be maintained on a linked registry of support orders. The 
IV-D agency is responsible for ensuring that the State case registry 
functionality for non-IV-D orders is met, regardless of whether the 
State opts to meet the non-IV-D order requirements through the 
Statewide automated system or through an automated network of local 
linkages.
    10. Comment: We received a number of comments in response to our 
solicitation of views regarding whether time frames or other standards 
should be set for the monitoring and updating of records in the State 
case registry (SCR) and, if these should be set, what time frames and 
standards would be applied.
    Commenters stated that factors such as the size of the caseload, 
the status of pending automation and the cost effectiveness of updating 
and monitoring may impact a States capability to update the State case 
registry. Many commenters suggested that present regulatory time frames 
were adequate to update and monitor the State case registry. Others 
noted time frames should be included in the Certification Guide.
    Additional commenters recommended specific time frames pointing out 
that States may adopt varying approaches to updating and monitoring if 
these requirements are not specifically delineated in regulation.
    Response: There was no clear preponderance of comments on this 
issue. In the absence of a distinct standard being recommended by those 
commenting on these regulations, no additional regulations will be 
promulgated with respect to time frames. Those time lines which are 
prescribed by the System Certification Guide will remain in effect.
    11. Comment: Comments regarding updating and monitoring of the 
Federal case registry were also solicited. Comments ranged from 
requiring updates weekly, to no regulation whatsoever.
    Response: Due to the great disparity of comments, we chose to allow 
States flexibility to determine when to update data in the State case 
registry. However, for national consistency and accuracy of Federal 
case registry data, we chose to impose the requirement of updating data 
in the Federal case registry within five (5) business days.
    12. Comment: One comment recommended changing the definition of 
``Participant'' to more clearly include paternity orders.
    Response: We agree with this position and have amended the 
definition as follows: (i) Participant means an individual who owes or 
is owed a duty of support, imposed or imposable by law, or with respect 
to or on behalf of whom a duty of support is sought to be, established, 
or who is an individual connected to an order of support or a child 
support case being enforced.
    13. Comment: One commenter recommended the definition of 
participant be amended by deleting the reference to custodial party and 
inserting in its place the word custodian, because of the legal 
implications the word party may have.
    Response: The term custodial party is used to encompass not only 
parents, but

[[Page 44804]]

also others who may have physical custody of a child, but not 
necessarily legal custody. This term is defined in a variety of 
documents which have been issued with respect to the design and 
implementation of State case registries and the Federal case registry. 
To introduce another term at this point would be confusing and 
counterproductive.
    14. Comment: We received a suggestion to amend the definition of 
``locate request type'' to more accurately reflect that a locate may be 
used for paternity and support establishment purposes.
    Response: We agree with this position and have inserted the words 
``or support'' in the definition.
    15. Comment: A comment was received requesting greater detail on 
what records must be included in the State case registry.
    Response: 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.
    16. Comment: Several commenters expressed concern about gathering 
non-IV-D information for inclusion in State case registries. It was 
recommended the regulation provide a phase-in approach with regard to 
non-IV-D information.
    Response: The Federal case registry will be operational on October 
1, 1998, and capable of accepting information on all IV-D cases and all 
orders entered or modified on or after that date. In order to ensure 
the effective implementation of State case registries and the Federal 
case registry, the Secretary is planning a staggered schedule for the 
initial submissions to the Federal case registry. The reporting of the 
required data elements on IV-D cases will begin on October 1, 1998, to 
be followed by initial non-IV-D submissions on or before January 1, 
1999. We successfully implemented the National Directory of New Hires 
by using a similar approach of staggering new hire and quarterly wage 
submissions.
    17. Comment: One commenter requested guidance on the way in which 
non-IV-D information is to be added to a State case registry.
    Response: The request for guidance on the manner in which non-IV-D 
information is to be added to the State case registry exceeds the 
purpose of these regulations. The purpose of these regulations is to 
provide the provisions necessary for implementation of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 as it 
relates to child support enforcement program automation. However, the 
Office of Child Support Enforcement is committed to providing technical 
assistance and guidance on collecting and maintaining of non-IV-D data. 
Information on this issue may be found in the Federal case registry 
Implementation Guide, Chapter 3--State case registry.
    18. Comment: One commenter asked if Federal financial participation 
was available for gathering and maintaining non-IV-D case payment data 
if the State determines a unified system to maintain such data was 
determined to be economical.
    Response: Section 454A(e)(4) of the Act provides that payment 
records shall be maintained for each case record in the State case 
registry with respect to which services are being provided under the 
State plan. The statutory language limits the necessity of maintaining 
payment information to IV-D cases. Therefore, we cannot provide Federal 
financial participation to extend this to the maintenance of this 
information on non-IV-D cases.
    19. Comment: Many commenters were concerned with the statement that 
the State case registry and Federal case registry data elements include 
``any other information the Secretary may require as set forth in 
instructions issued by the Office.'' Most of these commenters expressed 
the position that only those established data elements be included in 
the regulation. There was also concern that data elements be set prior 
to October 1, 1998.
    Response: Those data elements presently delineated in the 
regulation are the only ones required on October 1, 1998, to be 
reported to the Federal case registry. Through working with States to 
identify their needs, additional data elements may become necessary to 
assist States in processing child support cases. The primary reason for 
allowing the Secretary to adopt additional data elements is to maintain 
flexibility to respond to States' requests for enhancements in the 
Federal case registry. If the Secretary requires additional data 
elements in the future, States will be given adequate notice of the 
changes and ample time to make the necessary system changes.
    20. Comment: A couple of commenters asked for clarification of the 
minimum data elements necessary for support orders on both the State 
case registry and the Federal case registry.
    Response: The data elements contained in the regulation at 
paragraphs (e)(3) and (f)(1) are required for IV-D cases and for 
support orders which are entered or modified on or after October 1, 
1998. The data elements listed at paragraph (e)(4) are only required 
for IV-D cases with support orders in effect.
    21. Comment: Commenters also suggested that in addition to the data 
element listing the existence of an order, that we should also include 
the State where the order was issued. Commenters generally felt the 
State where the order was issued was critical information for Uniform 
Interstate Family Support Act (UIFSA) and the Full Faith and Credit for 
Child Support Orders Act purposes. Many commenters also expressed the 
belief that federal legislation mandated the issuing State of an order 
be included as a data element on the Federal case registry.
    Response: We agree that inclusion of the State where the order was 
entered is necessary in case processing for UIFSA and Full Faith and 
Credit for Child Support Orders Act purposes. We have added this to the 
list of required data elements which a State must maintain on the State 
case registry.
    However, the Federal case registry serves as a pointer system to 
States and is not intended to contain all of the data with respect to a 
case or order maintained in the State case registry. Therefore, the 
Federal case registry will only carry an indication of whether an order 
exists and not the State where the order was entered. 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. By including a State case registry data element for the State 
that issued the order, we ensure that CSEnet will be able to quickly 
process automated transactions of order information for UIFSA purposes.
    22. Comment: One commenter requested clarification of the 
distinction between the amounts of support arrears and the amount of a 
lien since by definition support arrears become liens by operation of 
law.
    Response: We agree with the commenter that inclusion of both the 
amount of the arrears and the amount of a lien as data elements in the 
State case registry creates a degree of confusion since these amounts 
may be identical. However, pursuant to section 466(a)(4) of the Act, 
the amount of arrears in a case becomes a lien only if the non-
custodial parent owns real or personal property in the State or resides 
in the State. Thus, where a non-custodial parent does not reside or own 
property in the State enforcing the support obligation or if the value 
of real property owned in the State is less than the amount of arrears 
owed, the amount of arrears will differ from the amount of

[[Page 44805]]

liens. Section 454A(e) requires both amounts to be listed as State case 
registry data elements.
    23. Comment: One commenter requested that the list of standard data 
elements for the State case registry include administrative and 
judicial orders, rather than administrative and judicial proceedings. 
The commenter was of the opinion that it is more useful to limit the 
information on the case registry to this data.
    Response: We agree with the commenter. The data elements have been 
amended to reflect that information on administrative and judicial 
orders related to paternity and support be included as a data element 
in place of information on administrative actions and administrative 
and judicial proceedings and orders related to paternity and support.
    24. Comment: A commenter requested clarification of the distinction 
between disbursement and distribution.
    Response: Distribution is the allocation or apportionment of a 
support collection. Disbursement is the actual dispensing or paying out 
of the collection. Action Transmittal 97-13 provides a more detailed 
discussion of the distinction between disbursement and distribution.
    25. Comment: A comment was received requesting clarification of the 
meaning of ``sharing and comparing with and receiving information from 
other data bases and information comparisons services to obtain or 
provide information necessary to enable the State, other States, the 
Office or other Federal agencies to carry out this chapter.'' The 
assumption is this section expands the base of agencies and individuals 
with access to information.
    Response: The intent of the introductory language of Sec. 307.11(f) 
is to ensure the automated system has the capacity to share, compare 
and receive information from other data bases as expressly authorized 
by title IV-D of the Act. See, for example, sections 454A(f) and 
466(c)(1)(D) of the Act. Except as provided under sections 454A(f)(3), 
453 and 463, these exchanges are for the purposes of obtaining 
information necessary to carry out the Child Support Enforcement 
program under title IV-D of the Act. As a result of these comparisons, 
the IV-D agency is obtaining information, not releasing information. 
Thus, this section does not generally expand the base of agencies or 
individuals with access to information. Information sharing activities 
in the statewide automated system must be conducted in full compliance 
with the safeguarding provisions of Sec. 307.13, section 453 of the 
Act, and section 6103 of the Internal Revenue Code of 1986.
    26. Comment: We received a comment asking for clarification of the 
requirement that information be exchanged with State agencies both 
within the State and with agencies in other States. More particularly, 
the commenter asked whether the requirement for an exchange of data 
with agencies in other States was a CSEnet transaction or a direct 
exchange from the IV-D agency in one State with the IV-A agency or XIX 
agency in another State.
    Response: States' systems must be able to use CSEnet to exchange 
data with IV-D agencies in other States. CSEnet may not be used to 
exchange data with IV-A or XIX agencies in other States. Such exchanges 
may be accomplished through direct exchanges or through their-in-State 
title IV-A and XIX agencies.
    27. Comment: We received a comment requesting explicit detail be 
provided with respect to the requirement that certain data was subject 
to the requirements of the Internal Revenue Code of 1986.
    Response: The term ``certain data'' refers to taxpayer return 
information obtained from the Internal Revenue Service. That 
information is subject to the prohibitions contained in section 6103 of 
the Internal Revenue Code of 1986. Return information is defined as ``a 
taxpayer's identity, the nature, source, or amount of his income, 
payments, receipts, deductions, exemptions, credits, assets, 
liabilities, net worth, tax liability, tax withheld, deficiencies, over 
assessments, or tax payments, whether the taxpayer's return was, is 
being, or will be examined or subject to other investigation or 
processing, or any other data, received by, recorded by, prepared by, 
furnished to, or collected by the Secretary with respect to a return or 
with respect to the determination of the existence, or possible 
existence, of liability (or the amount thereof) of any person under 
this title for any tax, penalty, interest, fine, forfeiture, or other 
imposition, or offense, and any part of any written determination or 
any background file document relating to such written determination 
which is not open to public inspection.''
    28. Comment: It was recommended by one commenter that all 
references to IRS publications be eliminated and the regulation reflect 
that security standards will be set following consultation between the 
Secretary and the IRS.
    Response: We do not agree with this recommendation. IRS Publication 
1075 entitled ``The Information Security Guidelines for Federal, State 
and Local Agencies'' was referenced to assist States in ensuring 
compliance with IRS requirements.
    29. Comment: Commenters requested greater detail be provided with 
regard to updating information reported by a State to the Federal case 
registry, particularly as it relates to the notice of expiration of a 
support order.
    Response: The definition of expiration of a support order is 
determined under State law. States are required to notify the Federal 
case registry when an order expires pursuant to State law. It is 
critical to keep data current in both the State case registry and the 
Federal case registry. The primary intent of the Federal case registry 
is to act as a ``pointer'' system in notifying States of other States 
which may have an interest and/or information on a participant.
    30. Comment: We received a number of comments on the need for 
greater detail and guidance to States on the issue of a Family Violence 
indicator as a data element. Commenters suggested criteria be 
established to guide States on the placement of this indicator and to 
offer courts guidance on the process whereby they can release 
information despite the presence of a Family Violence indicator on a 
person contained within the Federal case registry. One commenter 
suggested there was a need to provide direction on how and when to 
update the Family Violence indicator.
    Other commenters requested a definition be provided for what 
constitutes reasonable evidence of domestic violence as that phrase is 
used within the statute and this regulation. One commenter also 
expressed the difficulty States would have in collecting Family 
Violence indicators on orders or cases which are not receiving services 
under the State plan. One commenter also suggested adding the Family 
Violence indicator as a data element to the State case registry.
    Response: The purpose of these regulations is to provide the 
provisions necessary for implementation of the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996 as it relates to child 
support enforcement program automation. The request for additional 
guidance with respect to a Family Violence indicator is beyond the 
scope of these regulations. A definition of reasonable evidence will 
depend primarily on State law. However, the Office of Child Support 
Enforcement is committed to providing technical assistance and guidance 
on the issue of the Family Violence indicator. An Action Transmittal on 
the issue is forthcoming. It will assist States

[[Page 44806]]

in addressing outstanding questions such as placement of the Family 
Violence indicator, the process for court access to Federal case 
registry information on a person to whom a Family Violence indicator 
has been attached and the necessity for updating a case when the 
circumstances for the placement of the indicator changes. In addition, 
OCSE is preparing a compilation of State laws and policies regarding 
the criteria and placement for the Family Violence indicator. OCSE is 
also participating in the Department of Health and Human Services 
Violence Against Women Act Steering Committee and has disseminated 
multiple resources to States regarding family violence. OCSE's Domestic 
Violence liaison, Susan Notar, may be contacted for further information 
on this subject at (202) 401-9370.
    We agree that it is appropriate to include the Family Violence 
indicator as a data element within the State case registry for purposes 
of reporting the Family Violence indicator to the Federal case 
registry. This data element is already required pursuant to 
Sec. 307.11(e)(3)(vi) which states that the State case registry shall 
contain all data elements required under Sec. 307.11(f)(1) of this 
section for the operation of the Federal case registry.
    31. Comment: We received comments expressing concern over the lack 
of access to information by a court when a Family Violence indicator is 
present. The comment also suggested updates to the Family Violence 
indicator occur every two (2) days.
    Response: Sections 453(b)(2)(A) and (B) of the Act provide that a 
court may have access to information as permissible under 453 and 463 
of the Act, in a case when a participant in the case has been 
identified with a Family Violence indicator. These sections provide 
that disclosure to a court, as defined in 453(c)(2) and 463(d)(2) of 
the Act, or the agent of the court, may occur if upon receipt of the 
information the court, or agent of the court, determines whether 
disclosure beyond the court could be harmful to the parent or the child 
and, if the court makes such a determination, the court and its agents 
shall not make such disclosure. At the time of the disclosure of this 
information to the court, the court making the request shall also be 
notified of the State which placed the Family Violence indicator on a 
participant. The State which made the determination that caused the 
indicator to be placed on a participant shall also be informed that 
another State's court has requested the Family Violence indicator be 
overridden.
    While we agree the Family Violence indicator is of such a sensitive 
nature that it requires regular updating, we believe that updating this 
every two (2) days is unrealistic. To accommodate the necessity of 
updating this data element, we have added a requirement in 
Sec. 307.11(f)(1)(x) requiring the Family Violence indicator be updated 
within five (5) business days of receipt by the IV-D agency of 
information which would cause the IV-D agency to add or remove a Family 
Violence indicator.
    32. Comment: Several commenters requested clarification of the 
definition of a support order and the order indicator.
    Response: A support order is defined in section 453(p) of the Act 
as ``a judgment, decree, or order, whether temporary, final, or subject 
to modification, issued by a court or an administrative agency of 
competent jurisdiction, for the support and maintenance of a child, 
including a child who has attained the age of majority under the law of 
the issuing State, or of the parent with whom the child is living, 
which provides for monetary support, health care, arrearages, or 
reimbursement, and which may include related costs and fees, interest 
and penalties, income withholding, attorney fees, and other relief''.
    The order indicator data element will be marked ``Yes'' if a State 
knows of the existence of an order (as defined above), whether the 
order was issued by the reporting State or another State.
    33. Comment: A comment was received suggesting that if the purpose 
of the Federal case registry was to act as a pointer system to quickly 
notify States of other States that have an interest and/or information 
on a participant, the regulations clarify that only interstate cases 
are to be submitted to the Federal case registry.
    Response: Section 453(h) of the Act provides that the Federal case 
registry shall include abstracts of support orders and other 
information with respect to each case and order in each State case 
registry. The State case registry is required by the Act to contain 
records with respect to each case in which services are being provided 
by the State agency under the approved State plan and each support 
order established or modified in the State on or after October 1, 1998. 
The reporting requirements of the Act clearly indicate all cases and 
orders entered or modified on or after October 1, 1998, be included in 
the State and the required data elements on each be reported to the 
Federal case registry. There is no stipulation that this only be 
interstate cases.
Security and Confidentiality for Computerized Support Enforcement 
Systems (Sec. 307.13)
    1. Comment: One commenter supported the need for adequate 
safeguards for security data but was concerned that the use of employee 
dismissal is subject to collective bargaining agreements and other 
constraints and recommended allowing States to determine for themselves 
what the administrative penalties should be.
    Response: We believe the regulatory reference to administrative 
penalties provides wide State flexibility for identifying appropriate 
State sanctions. However, security and confidentiality of the 
information is paramount to the integrity of the system and as such 
administrative sanctions must include dismissal of employees in 
appropriate cases.
    2. Comment: One commenter expressed the view that the section on 
privacy and confidentiality was difficult to follow and questioned the 
intent of Sec. 307.13(a)(3), limiting access and disclosure to non-IV-D 
personnel or for Non-IV-D program purposes as authorized by Federal 
Law.
    Response: We have reviewed the language identified by the commenter 
and agree that it is confusing. Paragraph (a)(3) was designed to cover 
the disclosure of information to State agencies administering programs 
under titles IV-A and XIX of the Act which is authorized under section 
454A(f)(3) of the Act. We have revised paragraph (a)(3) to more closely 
track the language of the statutory provision. Information disclosures 
to State agencies administering title IV-A or XIX programs are subject 
to the safeguarding provisions of section 453 of the Act to the extent 
that the disclosure involves information obtained from the FPLS and 
section 6103 of the Internal Revenue Code of 1986. The following table 
clarifies access to FPLS information as specified in sections 453 and 
463 of the Act:

[[Page 44807]]



                                           Access to FPLS Information                                           
----------------------------------------------------------------------------------------------------------------
         Who                    Why                    How                    What               Exceptions     
----------------------------------------------------------------------------------------------------------------
Agent/Attorney of a    Establish paternity,   Request filed in       Information            Disclosure would    
 State who has          establish, modify or   accordance with        (including SSN,        contravene national
 authority/duty to      enforce child          regulations, 45 CFR    address, and name,     policy or security 
 collect child          support obligations.   Sec.  303.70.          address and FEIN of    interests of the   
 support and spousal   Sec.  453(a)           Only SPLS can request   employer) on, or       US, or             
 support, which may                            information from       facilitating the       confidentiality of 
 include a State IV-D                          FPLS.                  discovery of, the      census data.       
 agency.                                      --Must contain          location of any       Notification from   
Resident parent,                               specified              individual--           State of reasonable
 legal guardian,                               information           --Who is under an       evidence of child  
 attorney or agent of                          including              obligation to pay      abuse or domestic  
 a child not                                   attestation.           child support,         violence.          
 receiving IV-A                               --Fee must be paid.    --Against whom a       Sec.  453(b)        
 benefits.                                    Sec.  453(d)            child support                             
453(c)                                                                obligation is                             
                                                                      sought,                                   
                                                                     --To whom a child                          
                                                                      support obligation                        
                                                                      is owed,                                  
                                                                     --Who has or may have                      
                                                                      parental rights with                      
                                                                      respect to a child.                       
                                                                     Information on the                         
                                                                      individual's wages,                       
                                                                      other income from,                        
                                                                      and benefits of                           
                                                                      employment                                
                                                                      (including health                         
                                                                      care coverage).                           
                                                                     Information on the                         
                                                                      type, status,                             
                                                                      location and amount                       
                                                                      of any assets of, or                      
                                                                      debts owed by or to,                      
                                                                      the individual.                           
                                                                     Sec.  453(a)                               
State Agency that is   To administer such     Same as above.         Same as above.         Same as above.      
 administering a        program.              Sec.  453(d)           Sec.  453(a)           Sec.  453(b).       
 program operated      Sec.  453(a)                                                                             
 under a State Plan                                                                                             
 under subpart 1 of                                                                                             
 part B or a State                                                                                              
 plan approved under                                                                                            
 subpart 2 of part B                                                                                            
 or under part E.                                                                                               
Sec.  453(c)                                                                                                    
Court (or agent of     Establish paternity,   Request filed in       Same as above, except  However, upon       
 the court) with        establish, modify or   accordance with        can get it despite     notification that  
 authority to issue     enforce child          regulations. Sec.      child abuse or         FPLS has received  
 an order against an    support obligations.   453(b)                 domestic violence      notice of child    
 NCP for child         Sec.  453(a)           Request must be         notification.          abuse or domestic  
 support, or to serve                          processed through     Sec.  453(b)            violence, court    
 as the initiating                             the SPLS, 45 CFR                              must determine     
 court in an action                            Sec.  303.70                                  whether disclosure 
 to seek a child                              SPLS may process                               of the information 
 support order.                                request from court                            to any other person
Sec.  453(c)                                   to FPLS. 45 CFR Sec.                          would be harmful.  
                                                302.35(c)(2)                                Sec.  453(b)        
                                                                                            Above restrictions  
                                                                                             on information that
                                                                                             would compromise   
                                                                                             national security  
                                                                                             etc. still apply.  
Agent/Attorney of a    Make or enforce a      Request filed in       Most recent address    Disclosure would    
 State who has the      child custody or       accordance with        and place of           contravene national
 authority/duty to      visitation             regulations.           employment of parent   policy or security 
 enforce a child        determination.        State agency receives   or child.              interests of the   
 custody or            Enforce any federal     request and           Sec.  463(c)            US, or             
 visitation             or State law           transmits it to                               confidentiality of 
 determination.         regarding taking or    Secretary.                                    census data.       
Agent/Attorney of the   restraint of a        Sec.  463(b)-45 CFR                           Notification from   
 US or a State who      child.                 Sec.  302.35                                  State of reasonable
 has authority/duty    Sec.  463(a)           SPLS made request to                           evidence of child  
 to investigate,                               FPLS in standard                              abuse or domestic  
 enforce or prosecute                          format. SPLS shall                            violence.          
 the unlawful taking                           identify these cases                         Sec.  463(c)        
 or restraint of a                             to distinguish them                                              
 child.                                        from other requests.                                             
Sec.  463(d)(2)                               45 CFR Sec.  303.15                                               

[[Page 44808]]

                                                                                                                
Court (or agent of     Same as above.         Request filed in       Same as above, except  However, no         
 court) with           Sec.  463(a)            accordance with        can get it despite     disclosure shall be
 jurisdiction to make                          regulations. Sec.      notice of child        made to anyone     
 or enforce a child                            463(c)                 abuse or domestic      else. However, upon
 custody or                                   Request must be         violence.              notification that  
 visitation                                    processed through     Sec.  463(c)            FPLS has received  
 determination.                                the SPLS. 45 CFR                              notice of child    
Sec.  463(d)(2)                                Sec.  303.70                                  abuse or domestic  
                                              SPLS may process                               violence, and      
                                               request from court                            receipt of         
                                               to FPLS. 45 CFR Sec.                          information the    
                                                303.35                                       court must         
                                              SPLS makes request to                          determine whether  
                                               FPLS in standard                              disclosure of the  
                                               format. SPLS shall                            information to any 
                                               identify these cases                          other person would 
                                               to distinguish them                           be harmful.        
                                               from other requests.                         Sec.  463(c)        
                                               Upon receipt of                              Above restrictions  
                                               response from FPLS,                           on information that
                                               SPLS shall send                               would compromise   
                                               information directly                          national security  
                                               to the requester,                             still apply.       
                                               then destroy                                                     
                                               information related                                              
                                               to the request. 45                                               
                                               CFR Sec.  303.15                                                 
US Central Authority   Locate any parent or   Upon request,          Most recent address    Restrictions under  
 (under the Hague       child on behalf of     pursuant to            and place of           Sec.  453 (national
 convention on          an applicant to        agreement between      employment.            security etc.,     
 international child    central authority in   Secretary of DHHS     Sec.  463(e)            domestic violence).
 abduction).            a child abduction      and the central                              Sec.  453(b) and    
Sec.  463(e)            case.                  authority.                                    Sec.  463(c)       
                       Sec.  463(e)           No fee may be                                                     
                                               charged.                                                         
                                              Sec.  463(e)                                                      
Secretary of the       Administration of      Pursuant to            FCR data and NDNH                          
 Treasury               federal tax laws.      procedures developed   data.                                     
Sec.  453(h)(3) and    Sec.  453(h)(3) and     between the           Sec.  453(h)(3) and                        
 (i)(3)                 (i)(3)                 Secretary of           (i)(3)                                    
                                               Treasury and DHHS.                                               
Social Security        Verification.          Pursuant to procedure  FPLS data.                                 
 Administration        Sec.  453(j)(1)         developed between     Sec.  453(j)(1)                            
Sec.  453(j)(1)        For any purpose.        the Social Security   NDNH data.                                 
Sec.  453(j)(4)        Sec.  453(j)(4)         Administration and    Sec.  453(j)(4)                            
                                               DHHS.                                                            
State IV-D agencies    Location of            Every 2 business days  FPLS matches.          Disclosure would    
Sec.  453(j) (2) and    individual in          information           Sec.  453(j) (2) and    contravene national
 (3)                    paternity or child     comparison in NDNH     (3)                    policy or security 
                        support case.          with the FCR and                              interest of the US,
                       Sec.  453(j)(2)         report back to                                or confidentiality 
                       Administration of IV-   States within 2                               of census data.    
                        D program.             business days after                          Notification from   
                       Sec.  453(j)(3)         a match is                                    State of reasonable
                                               discovered. This                              evidence of child  
                                               would be an                                   abuse or domestic  
                                               automatic match with                          violence.          
                                               the statewide                                Sec.  453(b)        
                                               automated system.                                                
                                              Sec.  453(j)(2)(A & B                                             
                                               )                                                                
                                              When the Secretary                                                
                                               determines a data                                                
                                               match would be                                                   
                                               necessary to carry                                               
                                               out the purposes of                                              
                                               the IV-D program.                                                
                                              Sec.  453(j)(3)                                                   
Researchers.           Research purposes      At Secretary's         Data in each           Personal identifiers
Sec.  453(j)(5)         found by the           discretion.            component of the       removed.           
                        Secretary to be       Sec.  453(j)(5)         FPLS.                 Sec.  453(j)(5)     
                        likely to contribute                                                                    
                        to achieving                                                                            
                        purposes of IV-A or                                                                     
                        IV-D programs.                                                                          
                       Sec.  453(j)(5)                                                                          
State IV-A agencies.   Administration of IV-  When the Secretary     FPLS matches.          Disclosure would    
Sec.  453(j)(3)         A program.             determines a data     Sec.  453(j)(3)         contravene national
                       Sec.  453(j)(3)         match would be                                policy or security 
                                               necessary to carry                            interests of the   
                                               out the purposes of                           US, or             
                                               the IV-A program.                             confidentiality of 
                                              Sec.  453(j)(3)                                census data.       
                                                                                            Notification from   
                                                                                             State of reasonable
                                                                                             evidence of child  
                                                                                             abuse or domestic  
                                                                                             violence.          
                                                                                            Sec.  453(b)        
----------------------------------------------------------------------------------------------------------------


[[Page 44809]]

Approval of Advance Planning Documents (Sec. 307.15)
    1. Comment: One commenter asked for clarification of the phrase, 
``how the single State system will encompass all political 
jurisdictions in the State by October 1, 1997, or October 1, 2000, 
respectively.'' The commenter asked for clarification of how all 
political subdivisions in the State are to be included and, with 
respect to the date, whether this means that as long as States have 
IV&V consultants in place and comply with the APD requirements there 
will not be a federal review until after October 1, 2000?
    Response: The requirement that the system cover all political 
subdivisions of the State was part of the Family Support Act automation 
rules published October 14, 1992; this is not a new requirement. With 
respect to the October 1, 2000 date, this is a reference to the date 
when the State must meet the new automated system requirements of 
PRWORA. We reserve the right to conduct at any time reviews of CSE 
systems funded by FFP and plan to increase on-site technical assistance 
related to automated CSE systems.
    2. Comment: One commenter suggested that we eliminate the 
requirement that ``adequate resources'' be provided in line with the 
Federal resource limitation, i.e., the cap on enhanced funding.
    Response: While PRWORA did cap the amount of FFP reimbursable at 
the 80 percent matching rate at $400 million, FFP at the regular 66 
percent rate continues to be open-ended. The investment by both the 
Federal and State government necessitates the need for States to 
allocate sufficient resources to properly manage a project of this 
size, complexity and importance; we are making no change to this 
requirement.
    3. Comment: A couple of commenters questioned the APD approval 
process and recommended that the process be eliminated and that a new 
approach be adopted. One of these commenters suggested a State-Federal 
partnership to examine and develop an effective new process. The other 
comment suggested we substitute a very limited planning section to the 
State plan describing how Federal funding will be used to support the 
statutory requirement.
    Response: The Advanced Planning Document procedures are not limited 
to automated systems for Child Support Enforcement. The child support 
systems requirements are based on the APD requirements of 45 CFR part 
95 and are used by Food and Nutrition Service for Food Stamps, HCFA for 
Medicaid, and ACF for IV-A (prior to TANF), Child Welfare and Child 
Care programs.
    Since 1981, of the $3.2 billion expended on developing and 
implementing child support automated systems over the last 17 years, 
the Federal government has provided $2.5 billion for development of 
child support automated systems, a considerable investment. While the 
amount of enhanced (80%) funding is capped, there is no limitation on 
the amount of expenditures for systems development at the 66 percent 
rate, still a considerable investment by the Federal government. The 
other Federal programs which have no enhanced funding and whose level 
of regular rate FFP is 50 percent still require States to adhere to APD 
procedures and certification reviews.
    We believe we have a fiduciary responsibility to oversee and 
monitor this considerable financial investment in automated systems for 
child support. The commenters blamed APD procedures for past systems 
development failures, but various independent entities, including the 
General Accounting Office during their evaluation of CSE systems 
development, have cited the need for more, not less, monitoring and 
oversight of the States by the Federal government through the APD 
process. The importance of automation to child support enforcement 
cannot be over emphasized.
    4. Comment: One commenter expressed appreciation for Federal 
efforts to have a more substantial presence in assisting and monitoring 
State's development projects. An automated system is a major tool in 
tracking and enforcing child support and must be efficiently developed. 
The commenter agrees with the proposal to require a State to obtain 
IV&V when certain APD requirements are not met, stating that a well 
organized work plan and schedule based on the critical path method must 
be used in development of an automation effort of this size and 
complexity.
    Another commenter, commenting as a State with a proven successful 
track record, indicated that they understand the intent of the quality 
assurance process, backup procedure, and IV&V as outlined but raised 
concerns that it may prove to be process-intensive and distracting if 
too hard a line is taken requiring proven states to provide this level 
of detail. The commenter raised concern that the potential 
repercussions include causing disruption to management of the project, 
escalation of development costs and delay.
    Other commenters asked what was meant by projects going astray and 
in what form corrective action will take place? Other commenters were 
also concerned about the requirement that quality assurance providers 
reports be submitted directly to OCSE because they believe State 
project management should have an opportunity to correct misperceptions 
or erroneous data prior to submittal. These commenters and another were 
concerned that this approach will delay State's progress while awaiting 
approval and additional funding and strongly recommend that steps be 
taken to ensure this does not occur. They further recommended that if a 
time period is necessary for OCSE to receive the report, it be 30 days 
after the State has received the report from the QA vendor.
    Still another commenter suggested a collaborative approach between 
the State and the IV&V to ensure progress is not impeded due to 
miscommunication between the vendor and the State. Such collaboration 
could ensure that Federal needs of monitoring and validating system 
development efforts are met, while State's efforts at timely completion 
of automation requirements are not impeded.
    Response: 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 
rules and where the State's systems development efforts are on track as 
a result.
    The requirement that OCSE receive the QA and IV&V reports 
simultaneous with a State should have no impact on State systems 
development progress since funding approval is not tied to these 
reports. Further, the State is free to correct any misconceptions or 
erroneous data in the QA or IV&V reports submitted, but delaying the 
reports for 30 days or editing them before submittal to OCSE defeats 
the purpose of OCSE's receiving the reports, i.e., early identification 
of problems. We would clarify that while we require quarterly progress 
reports, we encourage more frequent communication, especially during 
critical system development phases.
    5. Comment: One commenter raised concerns about the statement in 
the preamble that States will be required to reduce risk by using, when 
possible,

[[Page 44810]]

fully tested pilots, simulations or prototypes. The commenter expressed 
the belief that each of the items were key factors in the delay of 
State's ability to finalize system development under the Family Support 
Act and led to significant cost overruns.
    Other commenters expressed the view that these regulations are an 
unnecessary burden on States and will not enhance either the system 
development or system quality assurance process. In fact, the 
commenters said, this requirement may even delay systems 
implementation.
    We received one recommendation that the requirement for an 
independent validation and verification (IV&V) provider not be tied to 
past project performance. The commenter stated that a more efficient 
use of resources is to concentrate the IV&V review on the merits of the 
existing APD and related project plans.
    Another commenter shared the view that if sufficient time is given, 
the IV & V requirement is not overly burdensome.
    Several commenters were concerned that the cost of this item was 
never considered in the allocation of the enhanced funding and States 
required to procure these services will have an unexpected financial 
burden placed on them. One of these commenters went on to suggest that 
it should be up to the State to determine the appropriate corrective 
action, where an IV & V would be only one option.
    Reponse: The suggestions enumerated in the preamble are common best 
practices recommended by all successful information technology efforts. 
We are concerned that commenters believe that ``establishing clear 
measures, worker involvement and buy-in'' are delaying factors. They 
should be an essential part of any information technology system 
development effort. Without these procedures, the systems project has a 
high probability of failure and delay.
    However, we recognize that many States have already obtained IV & V 
services or conducted the type of review that the proposed IV & V 
requirement was intended to address. We also recognize that the IV & V 
services requirement must be structured to avoid delaying the project. 
When a State's action or inaction triggers the need for IV & V services 
as specified in Sec. 307.11, we will, in close consultation with the 
States, assess the value, need for, and type of IV & V services.
    OCSE has recently acquired an IV & V service contract. While this 
contract is not meant to substitute for effective State IV & V reviews, 
the Federal IV & V contractors may be utilized in some situations. The 
assessment will include whether OCSE through its Federal IV & V 
contractors can provide the independent review needed or whether the 
State will need to obtain its own IV & V services.
    6. Comment: One commenter questioned why States already under 
penalty for missing certification, i.e. the States that have lost all 
Federal funding, need APD approval since they have no further Federal 
dollars to lose. The commenter believes this would result in such 
States being penalized twice.
    Response: While several States have received letters of intent to 
disapprove their State plans because of their failure to meet the 
October 1, 1997 statutory deadline for State automated system 
certification, all States receiving such notices have requested a 
predecisional hearing. Until such time as a hearing is concluded and 
HHS reaches a final decision, those States will continue to receive 
Federal funds for child support, including funds for system development 
to complete those CSE systems. While those States continue to receive 
Federal funds for systems development and other APD services, Federal 
APD requirements continue to apply.
    7. Comment: one commenter pointed out that there are various 
reasons for missing milestones, citing policy changes as a major 
factor. Another factor is that PRWORA included enormous automation 
requirements, yet the resource allocation is diminishing almost 
simultaneously. The commenter suggests that the best action for missed 
milestones is a corrective action plan agreed upon by State and Federal 
representatives.
    Related to this, another commenter suggested this requirement be 
changed to require the submittal of a revised APDU, as soon as the 
State is ``off-plan'' if it has missed milestones. Further, OCSE should 
work with the State and their QA service provider to reach agreement on 
the corrective actions necessary to assure continued progress and 
continued funding. If the Federal agency review of this new APDU does 
not result in approval of the revised approach, then funding could be 
reduced or eliminated.
    Response: Current regulations require States missing significant 
milestones to submit to ACF for approval a revised schedule and budget 
in an As-Needed APDU. Current regulations also provide that OCSE may 
suspend system development funding when a State ceases to comply 
substantially with its APD. The rule adds additional tools and 
flexibility to assist States whose systems development efforts are 
experiencing difficulty, such as obtaining IV & V services, short of 
cutting off all funding.
    8. Comment: One commenter questioned the need for IV & V when 
determining the need for system redesign, stating that the decision is 
based on State administration and operational needs and APD approval is 
already required.
    Response: The final rule cites as a trigger for an IV & V a total 
redesign of the automated CSE system (i.e. replacing existing automated 
system with new system). We believe that an independent assessment of 
the system project can bring valuable new insight into the process.
    9. Comment: One commenter thought the language on Federal oversight 
was confusing. The commenter noted that it appears that OCSE may be 
requiring States to acquire IV & V in addition to their QA service 
provider and questioned the requirement that OCSE has approval 
authority over the contract and the contractor's key personnel. While 
several commenters agreed with the requirement for the acquisition of a 
QA service provider and the need to share specified QA status reports, 
they do not agree that another layer of review should be added.
    Response: Current regulations require prior Federal approval of 
contracts or contract amendments over certain thresholds. Because of 
the importance of this activity to system development, the proposed 
regulations provide for prior approval for IV&V contracts regardless of 
threshold, if the need for IV&V is triggered by one of the events cited 
in the regulation.
    The final rule enumerates what the IV&V contract the State enters 
into should have regarding key personnel. That information is intended 
to assist the State in maintaining those key personnel bid by the 
vendor on the contract; there is no intent for the Federal government 
to judge the key personnel proposed in the State's IV&V contract.
    10. Comment: One commenter raised concerns about the requirement 
that the IV&V vendor consult with all stakeholders and assess user 
involvement and buy-in and recommended eliminating the word ``all.'' 
The commenter indicated agreement that buy-in is critical to success, 
but stated that attaining consensus from ``all'' interested parties in 
any process that involves as many divergent stakeholders as child 
support does is not possible. The commenter suggested that removal of 
the word all makes this requirement something that can be done.

[[Page 44811]]

    Response: We have not changed the language because we believe that 
the regulation is clear that the IV&V provider must consult with all 
stakeholders, but not necessarily consult with each and every member of 
a stakeholder group (i.e. every clerk or the court, or every 
caseworker) nor does it require the IV&V provider to achieve consensus 
among ``all'' stakeholders.
    11. Comment: One commenter asked how States will be evaluated to 
determine significant delay or cost overruns? The commenter suggested 
that we specify the measure to avoid arbitrary measures.
    Response: We recognize that all system development projects require 
some level of schedule and budget revisions. The Implementation Advance 
Planning Document addresses these topics and requires an estimated 
schedule and budget which is revised annually or requires an as-needed 
update. A significant delay is one which affects a State's ability to 
meet the statutory deadlines in PRWORA. Current regulations at 45 CFR 
95.611(c)(2)(ii) require an explanation for significant (10%) cost 
increases from the previous year and also require States to explain 
slippage in terms of causes and effect on the overall implementation 
schedule. For example, for enhanced FFP, Sec. 95.611(c)(2)(ii) requires 
States to submit an as-needed APDU when there is a projected increase 
of $100,000 or 10 percent of the project costs, whichever is less, or a 
schedule extension of more than 60 days for major milestones.
    12. Comment: Two commenters pointed out that milestones can be 
missed due to circumstances beyond the control of the State (i.e. 
delayed issuance of requirements, changes in requirements, 
underestimation of changes required due to unknown factors). One of the 
commenters recommended that States be allowed to correct project plans 
to modify milestone due dates within reason. The commenter asked for 
clarification of the procedures that will be used to monitor the 
completion of milestones and be assured that progress will not be 
impeded by the monitoring and approval process. The commenter 
encouraged that funding loss not be threatened without first allowing 
some room for corrective action by the State.
    Response: We believe the APD process and the As-Needed APDU process 
already provide the State with the opportunity for corrective action. 
The procedures that will be used to monitor include reports from the 
State, quarterly reports from the State's QA vendor, ongoing 
communications, and on-site monitoring from OCSE staff.
    13. Comment: One commenter suggested that the list of milestones be 
a guide or recommendation and that the actual milestones and 
deliverables to be included in the APD should be negotiable and based 
on individual State needs and current status.
    Response: We agree with this position. Traditional life cycle 
methodologies will form the basis of milestones for any State, but we 
are open to negotiating modifications with States to address individual 
State needs and circumstances.
    14. Comment: Several commenters charged that the APD and APDU 
process as it currently exists is extremely burdensome and will become 
more so with the implementation of this rule. The record keeping which 
is necessary to annually update the APD is very complex. The commenters 
indicated that the data needed for the APD is not usually part of the 
normal operations of the IV-D agency, especially after system 
implementation, and keeping up with all the data needed for the update 
requires staff who are dedicated to this type of recording. Since 
enhanced funding is no longer available for operation of a certified 
system, a couple of these commenters thought it unreasonable to 
continue to require an annual update of the APD. One commenter 
suggested that while elimination of the process would be ideal, at best 
the APD should be simplified.
    Response: Enhanced funding is not the trigger for annual update of 
the APDU. This requirement applies to all State automated systems 
development activities, including those funded at the regular matching 
rate. However, we are in full agreement with the goal to simplify the 
approval process where possible and appropriate. As mentioned in the 
preamble, revisions to the APD process affect other programs. We will 
continue to work with our Federal and State partners to develop 
innovative ideas and approaches and plan to convene meetings to address 
this issue.
    15. Comment: A couple of commenters asked how suspending the APD 
and associated funding assists States in achieving the goal of systems 
development. The commenter suggested that a more productive approach 
might be to provide States experiencing difficulties with technical 
assistance.
    Response: One purpose of the rule is to give us and States 
additional tools and options for dealing with systems development 
efforts which are experiencing difficulties. We would agree with the 
commenter that suspending funding would not always be the most 
productive course of action. We certainly agree that technical 
assistance can be productive in assisting States experiencing 
difficulties and we are committed to providing such assistance.
    The rule also gives us and States a better framework for designing 
and monitoring system development efforts and facilitates the early 
identification of difficulties. This should assist us and States in 
taking appropriate corrective action before more punitive measures, 
such as suspension of funding, become necessary. However, this rule 
leaves in place the current regulatory provision that if OCSE finds a 
State substantially out of compliance with its APD, it must totally 
suspend all associated funding. The proposal refers to ACF's approval 
of funds under an approved APD and the intent is to continue to provide 
some funding for limited, specific functions under the APD to assist 
the State in addressing the areas of the APD that are out of 
compliance.
    16. Comment: Commenters also thought it unclear how a State can 
identify a failure and a backup procedure since there is no explanation 
defining at what point a situation becomes a failure, or at what point 
a backup procedure is to be implemented, and who makes those 
determinations. The commenter further questioned how a State can 
account for failures and backup procedures in its projected timetable 
when the State does not know what failure may occur and when that 
failure may occur.
    Response: The State, in planning an information technology project 
of the size and complexity of most CSE projects, develops risk 
management factors that help in identifying possible risks of failure. 
Current regulations require the inclusion of backup procedures in a 
State's APD. The final rule expands on that requirement by listing six 
circumstances that would trigger the need for a specific type of backup 
procedure, viz, obtaining IV&V services. The first five trigger points 
are self-explanatory. The sixth trigger point is based on ACF's 
traditional oversight and monitoring role over ACF-funded State 
automated systems.
    17. Comment: Several comments pointed out that the statute does not 
require an IV&V and questioned whether this wasn't an unfunded mandate. 
These commenters and others suggested that the provision be eliminated. 
One commenter stated that although the States are being required to 
obtain IV&V, it appears that the State-level IV&V will be doing Federal 
monitoring, that the so-called State-level

[[Page 44812]]

IV&V will actually be controlled at the Federal level. The commenter 
asked if this was the intent.
    Response: Obtaining IV&V to review a troubled system is good 
business practice and has been utilized by numerous State systems as 
they encountered the very problems enumerated in this proposed 
regulation. OCSE will obtain its own IV&V contractor which will be 
assisting the Federal government in its oversight and monitoring role. 
The State IV&V is not intended to substitute for Federal monitoring. 
Rather, it is a mechanism whereby a State, and by extension the Federal 
government, can obtain objective analysis and recommendations to deal 
with serious system development issues. Funding for IV&V services is 
available to States at the applicable (66%) FFP rate.
    18. Comment: One commenter noted that CSES are the only mandated, 
automated state systems that must pass certification requirements which 
not only detail what the systems should do, but in many cases, how they 
should do it. The commenter went on to say that the certification 
requirements do not take into account the business practices of the 
States, or successful program performance. The commenter and several 
others suggested that the systems certification process needs to be 
more flexible, less focused on systems detail and take into account 
overall program performance of the State.
    Response: Child support differs from other Federally funded 
programs in at least two respects. The first is that OCSE reimburses 
States for a higher share of costs--both systems development and 
administrative costs, than do other Federal programs. With the Federal 
government funding 66 to 80 percent of costs, one of OCSE's objectives 
is to ensure that States use automation to the greatest extent 
practicable in order to keep program costs in line. The second 
distinction is that approximately one-third of child support cases 
involve more than one State. Having some consistency in terminology and 
practices across State automated systems is critical if this portion of 
the caseload is to be handled efficiently and effectively. The 
specificity of automation requirements is a reflection of the 
programmatic provisions of the CSE authorizing statute; and under 
current financing arrangements, States in the aggregate reap a 
substantial financial return from the Program and stand to gain even 
more as effectiveness and efficiency improve due to automation.
    In developing the certification guide for PRWORA requirements, OCSE 
heavily involved States early on in the process via a Federal/State 
work group. One of the guiding principles followed by this Federal/
State work group was to avoid prescriptive requirements and micro-
management of the functionality of the State's CSE system. Comparison 
of those sections of the certification guide related to PRWORA with 
those sections related to Family Support Act requirements will show 
that we've substantially reduced the prescriptiveness and detail.
    19. Comment: One commenter recommended that States be permitted to 
have flexibility in plan development for projects rather than be 
restricted to phased successive models as narrow in scope and brief in 
duration as practicable.
    Response: Use of life cycle methodology for system development is 
considered good business practice. However, we agree that the process 
should be commensurate with the size and scope of the development 
effort. OCSE recognizes, for example, that for States that choose to 
enhance their existing Family Support Act certified CSE systems to meet 
the new PRWORA system requirements, the milestones and project 
methodologies may differ from traditional life cycle methodologies 
associated with building entirely new systems. The utilization of the 
traditional life cycle methodologies should be commensurate with the 
size, scope, complexity and risk of the enhancement. If a State feels 
that using traditional life cycle methodologies is inappropriate to its 
project, it should contact OCSE and discuss alternatives.
    20. Comment: One commenter suggested that it might help if the 
Federal government had a group of State resources that were familiar 
with these projects and they groomed them as a team to go into a State, 
do the evaluation, etc., at Federal expense.
    Similarly, another commenter suggested that we consider the 
practicality of developing a mentoring or coaching arrangement where 
the more proven States would be joined with other States which may be 
struggling with their system development effort to share ideas and 
brainstorm solutions to obstacles.
    Response: OCSE has been supportive of the ``peer-to-peer'' 
assistance approach and will consider funding State systems experts to 
assist other States in system development. For example, West Virginia, 
Puerto Rico, Virginia, Iowa and Washington State have all lent the 
expertise of their CSE systems staff to assist other States. ACF 
intends to follow-up on the suggestion for a resource directory and 
specialized training as a method of improving technical assistance to 
States. State staff certainly would bring a practical hands-on 
expertise and experience to the project. However, with all States 
working to meet the same statutory deadlines, OCSE does not believe 
that the States can spare the time and resources needed to substitute 
entirely for independent validation and verification of State systems 
development.
    21. Comment: One commenter noted that the automation requirements 
of PRWORA require significantly more data sharing between the States 
and with DHHS but that unfortunately, the Family Support Act of 1988 
mandated that all States IV-D systems have certain functionality, it 
did not require that these systems have common protocol and data 
structures. According to the commenter, this first became a problem as 
States brought up CSENet and experienced numerous errors in exchanging 
case information and will continue to be a significant problem with the 
Federal case registry process. In addition, there are no common 
definitions for some of the basic data elements involved: e.g., case, 
Family Violence indicator, etc. Common definitions must be established 
and adhered to by all States for effective communication between the 
disparate systems.
    Response: We acknowledge that PRWORA requires increased data 
sharing between States and that neither the statute nor regulations 
require that statewide CSE systems have common protocols and data 
structures. In these rules, we have attempted to strike a balance 
between providing common definitions, standardized data elements, and 
uniform transmission protocols and maintaining States' flexibility in 
designing systems that meet their business needs. OCSE, as required by 
statute, has recently specified common definitions and data reporting 
forms for Federal reporting purposes that will become effective October 
1, 1998. In both CSENet and FCR, we are working with State work groups 
to develop valid transaction tables, ``Good Manners Guides,'' and 
implementation and interface guidance documents to assist States in 
exchanging data without intruding on a State's prerogative to design 
its statewide CSE systems to best meet its needs.
FFP Availability (Sec. 307.30)
    1. Comment: One commenter requested clarification on whether the 80 
percent match includes costs of developing policies and procedures and 
training. The commenter recommended

[[Page 44813]]

that if the response is affirmative that this be made explicit in 
guidance.
    Response: Training is not eligible for enhanced Federal financial 
participation. This funding limitation was applicable to 90% enhanced 
funding and did not change under PRWORA for 80% funding. Only training 
for trainers is eligible for enhanced matching; training of staff is 
reimbursable at the normal 66 percent matching rate.
    2. Comment: One commenter asked that we modify software and 
ownership rights regulations so ownership rights are option. The 
commenter suggested that we should act as a model to ``* * * test a 
more flexible approach that is used widely in other areas of government 
* * * .''
    Response: This is not a new requirement, nor is it unique to child 
support enforcement. It is a restatement of current regulations that 
apply to all automated systems, not just CSE. Over the course of the 
last few years, through various interagency workgroups and research 
efforts and public-private partnerships (such as the Human Service 
Information Technology Advisory Group), we have examined the issue of 
Federal software rights in licenses, and State and local government 
software ownership. Our conclusion consistently has been that the 
Federal policy in this area, as stated in Federal regulations at 45 CFR 
95.617, and as restated in our child support automation regulations at 
45 CFR 307.30, is appropriate and best protects the Federal interest in 
CSE and other Federal systems development efforts. We are unfamiliar 
with any other, ``* * * approach that is used widely in other areas of 
government * * *'' as stated by the commenter.
    This policy does not apply to ``* * * proprietary operating/vendor 
software packages (e.g., ADABASE or TOTAL) which are provided at 
established catalog or market prices and sold or leased to the general 
public * * *'', nor is it applicable to commercial off-the-shelf 
software because these types of software are not unique to public 
assistance programs.

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 
rule is consistent with these priorities and principles. The changes in 
this rule include IV-D State plan amendments, new functional 
requirements for CSESs, and limited extension of 90 percent Federal 
funding.

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 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, Pub. L. 104-13, all 
Departments are required to submit the Office of Management and Budget 
(OMB) for review and approval any reporting or recordkeeping 
requirements inherent in a proposed or final rule.
    When an OMB control number is issued, it will be published in the 
Federal Register as required by law. This final rule 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.

----------------------------------------------------------------------------------------------------------------
                                                    Number of     Responses per  Average burden    Total annual 
             Information collection                respondents     respondent     per 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               2239  
307.15 (APDU)..................................           62.33               1          60               3740  
                                                ----------------------------------------------------------------
    Total......................................  ..............  ..............  ..............        851,535.5
----------------------------------------------------------------------------------------------------------------


[[Page 44814]]

    The Administration for Children and Families invited comments by 
the public in the proposed rule on the 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 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.
    No comments were received on this information collection on the 
associated estimated burden hours. An agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control number.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1532) requires that a covered agency prepare a budgetary impact 
statement before promulgating a rule that includes and Federal mandate 
that may result in the expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year.
    We have determined that this rule will not impose a mandate that 
will result in the expenditure by State, local and Tribal governments, 
in the aggregate, or by the private sector, of more than $100 million 
in any one year. Accordingly, we have not prepared a budgetary impact 
statement, specifically addressed the regulatory alternatives 
considered, or prepared a plan for informing and advising any 
significantly or uniquely impacted small government.

Congressional Review of Rulemaking

    This rule is not a ``major'' rule as defined in Chapter 8 of 5 
U.S.C.

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: June 30, 1998.
Olivia A. Golden,
Assistant Secretary for Children and Families.

    Approved: July 28, 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 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, 
1396(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, Pub. L. 100-485, in accordance with 
Secs. 307.5 and 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, Pub. L. 104-193, in accordance with Secs. 307.5 and 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), 
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 ``Sec. 307.10, or Sec. 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 
``Sec. 307.10, or Sec. 307.11'' in the newly redesignated paragraph 
(b); and adding a new paragraph (a) to read as follows:
* * * * *
    (a) Basic requirement. (1) By October 1, 1997, each State must have 
in effect

[[Page 44815]]

an operational computerized support enforcement system, which meets 
Federal requirements under Sec. 302.85(a)(1) of this chapter, 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) of this chapter. OCSE will 
review each system to certify that these requirements are met.
* * * * *


Sec. 307.10  [Amended]

    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:


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) of this chapter 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, through an 
auxiliary system 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) Calculation 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 the Act that were added by the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 
104-193, 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 a duty of 
support, imposed or imposable by law, or with respect to or on behalf 
of whom a duty of support is sought to be established, or who is an 
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 State or Federal case registry.
    (iii) locate request type refers to the purpose of the request for 
additional matching services on information sent to the Federal case 
registry, for example, a IV-D locate (paternity or support 
establishment or support enforcement), parental kidnapping or custody 
and visitation.
    (iv) locate source type refers to the external sources a locate 
submitter desires the information sent to the Federal case registry to 
also be matched against.
    (2) The State case registry shall contain a record of:
    (i) Every IV-D 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;
    (vii) Issuing State of an order; and
    (viii) Any other information that the Secretary may require.
    (4) The record required under paragraph (e)(2) of this section 
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,

[[Page 44816]]

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 and judicial orders related to 
paternity and support;
    (ii) Information obtained from comparisons 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 Comparisons and other Disclosures of Information. 
Extract 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) furnishing the following information to the 
Federal case registry on participants in cases receiving services under 
the State plan and in support orders established or modified on or 
after October 1, 1998, and providing updates of such information within 
five (5) business days of receipt by the IV-D agency of new or changed, 
information, including information which would necessitate adding or 
removing a Family Violence indicator and notices of the expiration of 
support orders:
    (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 of the Secretary may require.
    (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; and
    (3) Permit access to and use of data for purposes of exchanging 
information with State agencies administering programs under titles IV-
A and XIX of the Act to the extent necessary to carry out State agency 
responsibilities under such programs in accordance with section 
454A(f)(3) of the Act.
    (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 ``Sec. 307.10, or Sec. 307.11'' in 
paragraphs (a), (b), introductory text, (b)(1), (b)(5), (b)(7), 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 Sec. 307.10, or Sec. 307.11 will be 
carried out throughout the State; this includes a projection of how the 
proposed system will meet the functional requirements of Sec. 307.10, 
or Sec. 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,

[[Page 44817]]

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.
    (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 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 ``Sec. 307.10, or Sec. 307.11'' in 
the introductory text.


Sec. 307.30  [Amended]

    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 the 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 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. 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 ``Sec. 307.10, or Sec. 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 ``307.10, or Sec. 307.11'' in 
paragraph (a).

[FR Doc. 98-22276 Filed 8-20-98; 8:45 am]
BILLING CODE 4150-04-P