[Federal Register Volume 64, Number 195 (Friday, October 8, 1999)]
[Proposed Rules]
[Pages 55102-55110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25901]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 308

RIN 0970-AB96


State Self-Assessment Review and Report

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: These proposed regulations would implement a provision of the 
Social Security Act added by the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 (PRWORA), which requires each 
State to annually assess the performance of its own child support 
enforcement program and to provide a report of the findings to the 
Secretary of the Department of Health and Human Services (DHHS).

DATES: Consideration will be given to written comments received by 
December 7, 1999.

ADDRESSES: Send comments to: Administration for Children and Families, 
Department of Health and Human Services, 370 L'Enfant Promenade, S.W., 
Washington D.C. 20447. Attention: Division of Policy and Planning, 
Office of Child Support Enforcement. Comments will be available for 
public inspection Monday through Friday, 8:00 a.m. to 4:30 p.m. on the 
fourth floor of the Department's offices at the address mentioned 
above.
    You may also transmit written comments electronically via the 
Internet. To transmit comments electronically, or download an 
electronic version of the proposed rule, you should access the 
Administration for Children and Families Welfare Reform Home Page at 
``http://www.acf.dhhs.gov/hypernews/'' and follow the instructions 
provided.

FOR FURTHER INFORMATION CONTACT: Jan Rothstein, Division of Policy & 
Planning, OCSE, telephone number: (202) 401-5073, fax: (202) 401-3444, 
e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

State Self-Assessment Review and Report

Statutory Authority

    These proposed regulations are published under the authority of the 
Social Security Act (the Act), as amended by the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 (Pub. L. 
104-193). Section 454(15)(A) of the Act (42 U.S.C. 654(15)(A)) contains 
a requirement for each State to annually assess the performance of the 
State's child support enforcement program under title IV-D of the Act 
in accordance with standards specified by the Secretary, and to provide 
a report of the findings to the Secretary.
    These proposed regulations are also published under the general 
authority of section 1102 of the Act (42 U.S.C. 1302) authorizing the 
Secretary to publish regulations necessary for the efficient 
administration of the title IV-D program.

Background

    Prior to PRWORA, Federal law specified that States that had been 
audited and found not to be in substantial compliance with Federal 
requirements were subject to a financial penalty of between 1 and 5 
percent of the State's funding under the title IV-A program. These 
audits were performed every 3 years. The penalty could be held in 
abeyance for up to one year to allow States the opportunity to 
implement corrective actions to remedy the program deficiency. At the 
end of the corrective action period, a follow-up audit was conducted. 
If the follow-up audit showed that the deficiency had been corrected, 
the penalty was rescinded. Section 342(b) of PRWORA revised section 
452(a)(4) of the Act, and

[[Page 55103]]

Federal audit requirements were changed to focus on data reliability 
and to assess performance outcomes instead of determining compliance 
with process steps.
    At the same time, section 342(a) of PRWORA amended the Act by 
adding a new section 454(15)(A) of the Act to require each State to 
conduct an annual review of its Child Support Enforcement (IV-D) 
program to determine if Federal requirements are being met and to 
provide an annual report to the Secretary of DHHS on the findings. The 
changes to sections 452 and 454(a)(15) mean that the Federal 
government's audit responsibilities now focus primarily on results and 
fiscal accountability while States are to focus on the responsibilities 
for child support service delivery in accordance with Federal mandates. 
The annual self-assessment's purpose is to give a State the opportunity 
to assess whether it is meeting Federal requirements for providing 
child support services and providing the best services possible to 
those in need of them. It is to be used as a management tool, to help a 
State evaluate its program and assess its performance. These self 
reviews are not tied to fiscal sanctions. Financial penalties, like 
incentive rewards, will be based on program results.
    Section 454(15)(A) of the Act also requires the Secretary to 
establish standards and procedures for the State to use in conducting 
the annual review. These proposed rules convey the Secretary's 
standards and procedures for the States' self-assessment reviews.
    The requirements in this proposed rule would be effective 
prospectively from the effective date of the final rule. The review 
period for the first self-assessment would end no later than 12 months 
after the effective date of the final regulations. Subsequent annual 
review periods would end every 12 months thereafter. The first self-
assessment report would be due no later than six months after the end 
of the review period and each 12-month review period thereafter. If a 
State fails to submit a self-assessment report, the DHHS Office of 
Child Support Enforcement (OCSE) would work with that State to try to 
resolve any issues that might be preventing the State from submitting a 
self-assessment report. However, if a State fails to make a good faith 
effort to resolve any barriers and submit a self-assessment report, we 
would begin taking the steps necessary to disapprove the State plan 
pursuant to sections 452(a)(3) and 455(a) of the Act and sections 
301.10 and 301.13 of this chapter.
    In the development of this Notice of Proposed Rulemaking, OCSE used 
as its starting point the objectives outlined in the OCSE strategic 
plan, which was endorsed by the States on February 28, 1995. The 
strategic plan is available at www.acf.dhhs.gov/programs/cse/new/
spwith.htm. The three goals in the strategic plan and their 
corresponding objectives are as follows:
     All children have parentage established--to increase 
establishment of paternities, particularly those established within one 
year of birth;
     All children in IV-D cases have financial and medical 
support orders--to increase the percentage of IV-D cases with orders 
for financial support, and to increase the percentage of cases with 
orders for medical support; and
     All children in IV-D cases receive financial and medical 
support from both parents--to increase the collection rate, to increase 
the percentage of cases where health insurance coverage is obtained 
after being ordered, to increase the percentage of cases with 
appropriate and up-to-date support orders, and to make the process more 
efficient and responsive.
    This approach is useful because it guarantees that all States have 
the same goals and objectives for their self-assessment reviews and 
that those goals and objectives are all focused on improving the lot of 
America's children.
    OCSE also believes that the self-assessment process should not 
duplicate Federal audits that will be conducted by the OCSE Division of 
Audit (i.e., data reliability reviews, limited cost reviews and 
administrative cost audits) and should focus on agreed-upon goals. 
Similarly, the self-assessment reviews should not duplicate other types 
of program reviews such as automated systems certification reviews.
    Following the enactment of PRWORA and to ensure broad input, OCSE 
consulted with a wide variety of program stakeholders to get 
recommendations on how to proceed. These recommendations addressed: the 
criteria to be covered in annual reports to the Secretary; the 
methodology for reviewing the criteria; and an approach for reporting 
the results of these reviews. OCSE considered these recommendations in 
developing these proposed rules.
    OCSE received suggestions on self-assessment reviews at national 
and regional meetings, including the American Public Human Services 
Association, formerly known as the American Public Welfare Association 
(APWA) and the National Child Support Enforcement Association (NCSEA). 
In addition, several child support advocacy groups informally provided 
comments. Comments were also solicited from State IV-D directors and 
incorporated as deemed appropriate.
    In addition, OCSE contracted with BDM, Inc., a consulting group, to 
survey existing self-assessment efforts in selected States and make 
recommendations for developing and implementing self-assessment 
reviews. OCSE also took these recommendations into consideration in the 
development of these proposed rules.
    On March 31, 1998, OCSE issued Action Transmittal-98-12 to provide 
the States preliminary guidance on the self-assessment review process 
pending publication of this proposed rule. This action transmittal: 
provides a practical methodology for implementing the self-assessment 
process, covers required and optional program compliance criteria, 
presents the Federal role in the process as required by the statute, 
and suggests a reporting format. OCSE has appointed Amy Guzierjka to an 
Intergovernmental Personnel Act (IPA) assignment from the State of 
Massachusetts, to serve as the audit liaison to assist States in 
complying with the self-assessment requirements. Ms. Guzierjka has 
extensive experience in this area at the State level.
    These proposed rules would promulgate the Secretary's requirements 
for State self-assessment reviews and annual reports. We invite public 
comment concerning the proposed standards and procedures required of 
States in conducting the reviews and reporting to the Secretary.

Overview of the Self-Assessment Review

    The self-assessment review process proposed in this rule would 
consist of an annual State-conducted self-assessment of its IV-D 
program, and annual reporting of the results to the Commissioner, OCSE 
and Regional Offices as designees of the Secretary. Staff in the 
Regional Offices will review the self-assessment reports and work with 
the States if corrective action is necessary.
    OCSE proposes that the State self-assessment review consist of 
three categories: Required Program Compliance Criteria, Program 
Direction, and Program Service Enhancements. The first category would 
be mandatory for inclusion in a State's annual self-assessment review 
and report. The second and third categories would be optional for 
inclusion in a State's self-assessment review and report.
    The Required Program Compliance category draws upon selected areas 
of the child support program that have previously been covered by 
Federal

[[Page 55104]]

audits and which are addressed in regulations in Parts 302 and 303. 
These criteria represent the current program requirements that most 
directly relate to the major child support functions and which must be 
monitored to assess program performance. These criteria also bear a 
direct correlation to the goals and objectives set forth in OCSE's 
strategic plan and the 15 outcome measurements in that plan. These 
criteria would represent the minimum that States would be required to 
include in their self-assessment reviews and in their reports to the 
Secretary. A State would be able to modify the review requirements by 
imposing higher standards on itself or evaluating additional Federal or 
State requirements; however, a State would be required to document its 
review scope in its annual report. Nothing precludes States from 
expanding their reviews to include other program areas. A State may 
wish to expand the review to accommodate its specific management needs. 
Again, we envision these reviews as serving as management tools for the 
States. A State should feel free to modify them to best suit its 
program needs.
    Federal financial participation (FFP) would be available to 
reimburse States for the cost of carrying out all three categories of 
self-assessment. States may add additional optional information to the 
information listed in categories 1, 2, and 3. FFP would also be 
available for gathering and reporting this additional optional 
information.

Federal Role

    The Federal role in the self-assessment review process would be to 
receive reports submitted pursuant to section 452(a)(4)(B) of the Act 
and, as appropriate, provide to the States comments, recommendations 
for additional or alternative corrective action, and provide any 
technical assistance that a State may need. We propose that the Federal 
involvement include, but not be limited to: approving IV-D State plan 
amendments certifying that the State has a self-assessment review 
process; providing review requirements, guidelines, instructions and 
methodologies for the review to the State; responding to requests for 
help from the State; providing interpretation of compliance standards; 
developing continuing partnerships; reviewing and providing appropriate 
comments on self-assessment reports; developing a self-assessment 
review module; overseeing the implementation of the self-assessment 
process in the States; periodically analyzing self-assessment reports 
to identify `best practices' to be shared with other States and 
providing comments and recommendations regarding the appropriateness of 
proposed corrective action or alternative correction action.
    The Office of Child Support Enforcement is publishing a separate 
proposed rule regarding performance incentives and penalties. As 
indicated in that rule, results from State self-assessments may serve 
as a basis for more in-depth audits.

Description of Regulatory Provisions

    We are proposing to implement the statutory requirement that a 
State annually assess the performance of its IV-D program and submit a 
report of the findings to the Secretary by adding a new Part 308, 
``Annual State Self-Assessment Review and Report'' to existing rules in 
Chapter III governing the child support enforcement program under title 
IV-D of the Act.
    Proposed section 308.0 sets the scope of the regulation and 
specifies it is applicable only to the annual State self-assessment 
review and report process.
    Proposed section 308.1 provides the components of the self-
assessment implementation methodology that States must use including 
organizational placement, sampling, scope of review, the review period, 
and reporting.
    Proposed section 308.1(a) addresses options for the organizational 
placement of the self-assessment function. Ideally, the organizational 
placement would be within the IV-D agency. This would enable the agency 
to draw on the experience of IV-D staff who have the skills and 
qualifications needed to analyze the program, an important element of a 
meaningful self-assessment of the program. However, we recognize that 
this is not always possible. Therefore, the proposed regulations allow 
the self-assessment unit to be placed within the title IV-D agency's 
umbrella agency, or another State agency. Alternatively, a State may 
consider privatizing or contracting out the self-assessment function. 
However, regardless of the location of this function, the IV-D agency 
must maintain the responsibility and control for all reviews, review 
findings and the content of the annual report.
    Proposed section 308.1(b) specifies that a State must either review 
all of its cases or conduct sampling which meets the criteria 
specified. Due to the differences in administrative structures in 
States, we believe it would be inappropriate for OCSE to prescribe a 
single sampling formula for universal use by all States. Instead, under 
proposed paragraph (b), a State would have discretion in designing its 
own sampling methodologies that could be tailored to meet individual 
State needs. However, under proposed paragraphs (b)(2) and (3), each 
State must maintain a minimum confidence level of 90 percent for each 
criterion, select statistically valid samples, and assure that there 
are no portions of the IV-D case universe omitted from the sample 
selection process.
    The following checklist has been developed to provide guidance in 
the form of a series of steps that should be taken during the 
development and application of a sampling methodology. This checklist 
is not intended as a definitive pronouncement or mandate from OCSE, but 
only as a guide outlining a generic sampling approach. We provide it 
for reference and guidance only.
    1. Define the reason(s) for collecting and evaluating the data: 
i.e. each State must evaluate its performance with regard to each 
required program compliance criterion set forth in proposed section 
308.2.
    2. Plan the data collection method(s):
    a. Identify the criteria to be evaluated (refer to proposed section 
308.2).
    b. Select a method of data collection/evaluation.
    c. Establish a minimally acceptable level of performance.
    d. Set a desired confidence level.
    e. Choose a method of random selection (e.g., simple random 
selection or systematic random selection).
    3. Collect required data: After selecting the sample cases, obtain 
the case files and/or the pertinent computer records or data elements.
    4. Process the collected data: Evaluate each case for each 
criterion to determine if the desired action was taken. Tabulate the 
results of the sample or samples.
    5. Analyze the data. Quantify results and statistically evaluate 
the results obtained.
    6. Present the results for each criterion in a tabular format and 
provide a narrative explanation of the results obtained.
    Proposed section 308.1(c) relates to the scope of the self-
assessment review. This paragraph would require a State to review all 
required criteria articulated in section 308.2 on a yearly basis. We 
considered accommodating some States who have not had the experience in 
conducting these types of reviews by allowing reviews for some of the 
criteria on a rotational basis rather than annual reviews on all 
required criteria by all States. We decided that if we permitted 
reviews of some of the required criteria on a rotational basis, the 
results would lose meaning and not be comparable to prior years. 
Therefore, we propose that

[[Page 55105]]

each State would be required to review all criteria under section 308.2 
on a yearly basis.
    Proposed section 308.1(d) would provide for a 12-month review 
period, ending no later than 12 months after the effective date of this 
final rule and each 12 month period thereafter. We believe the proposed 
12-month review period is consistent with prior audit review periods 
and allows enough time to evaluate the case processing timeframes in 
Part 303. We also believe that it is not necessary for all States to 
match each other's review periods, provided that the case samples 
selected are from the period that will be reviewed and reflected in the 
report. Self-assessment reviews can be conducted in one of two ways: 
historically or incrementally. Using the historical approach, a State 
would not begin its self-assessment review until the end of the period 
to be reviewed.
    Using the incremental approach, a State would select cases from 
several periods during the review period and add the results to provide 
a picture of performance for the entire period. The State should draw a 
separate sample for each incremental review period. The incremental 
approach would enable the State to spread its review effort over time 
and make more efficient use of available resources because the sample 
size could be smaller, while allowing the State to identify problem 
areas and take corrective action prior to the end of the review period. 
For those States who review their case samples incrementally, the cases 
selected must be reviewed and evaluated for the actions required at the 
beginning of the review period.
    Proposed section 308.1(e) would address the contents of the annual 
reports and require copies to be sent to the Commissioner, OCSE and 
applicable Regional Offices. We propose that the State submit its 
written report no later than 6 months after the end of the review 
period. For example, if the review period ends September 30, 2000, the 
first report would be due by March 31, 2001.
    Proposed section 308.2 lists and provides descriptions of the 
required program compliance criteria. In all cases, States must have 
the required procedures specified in the regulations. In this section 
we are also proposing to require States to use benchmarks for 
performance that are identical to those that were required when 
previous Federal audit standards were in place. The benchmarks for 
determining the adequacy of performance are still, we believe, 
appropriate under the new system of self-assessment reviews. States can 
use the benchmarks to determine if corrective action is necessary if 
they fail to meet one or more benchmarks. We propose that reviews of 
closed cases should demonstrate that appropriate action was taken in 90 
percent of the cases reviewed. We further propose that reviews of the 
other required program criteria should show that appropriate action was 
taken in 75 percent of the cases reviewed.
    Proposed section 308.2(a) would require reviews of closed IV-D 
cases to determine whether the case met one or more Federal case 
closure criteria under section 303.11.
    Proposed section 308.2(b)(1) would require the review of State 
actions to establish paternity and support orders. A case would meet 
the review requirement if an order for support was required and 
established during the review period, notwithstanding the relevant 
timeframes. Section 308.2(b)(2) addresses the necessary procedures to 
follow when an order was required but not established during the review 
period.
    Proposed section 308.2(c) would require the review of State actions 
to enforce child support orders. If income withholding was appropriate, 
a case would meet the review requirement if it was received during the 
review period, notwithstanding the mandatory timeframes. A review of 
the enforcement of orders would include all cases in which an ongoing 
income withholding is in place, as well as those cases in which new or 
repeated enforcement actions were required during the review period.
    Proposed section 308.2(d) describes reviews of the disbursement of 
collections, requiring the implementation of a State Disbursement Unit 
(SDU) effective October 1, 1998, or on October 1, 1999, for those 
States in which the local courts are disbursing collections. This 
review would include a determination of whether States are complying 
with the 2-day requirement for disbursing certain collections. The 
statute had two effective dates but we anticipate that final rulemaking 
would be published after October 1, 1999, the date on which all States 
have to have an SDU in effect and therefore, we have not included any 
reference to the effective dates in the proposed rule.
    Proposed section 308.2(e) would require reviews of securing and 
enforcing medical support orders. This would include measuring whether 
the requirements were met for: including a medical support provision in 
all new orders; taking steps to determine whether reasonable health 
insurance is available when health insurance is included in the order; 
informing the Medicaid agency when coverage was obtained; determining 
whether the custodial parent was informed of policy information when 
coverage has been obtained; determining whether employers are informing 
the State of lapses in coverage; and determining whether the State 
transferred notice of the health care provision to a new employer when 
a noncustodial parent changed employment. The forthcoming national 
medical support notice has the potential to vastly improve establishing 
and enforcing medical support orders. Once it becomes available, States 
should be using it and reviewing for its application in appropriate 
cases.
    Proposed section 308.2(f) addresses the review and adjustment of 
orders. A case would meet the review requirement if it was reviewed and 
met the conditions for adjustment notwithstanding the applicable 
timeframes. An examination of the review and adjustment criterion would 
include reviews of assistance cases, review of cases where adjustments 
were not necessary, quarterly repeated location efforts, notices to the 
custodial and non-custodial parents informing them of their rights to 
request reviews within 180 days of determining that a review should be 
conducted, and reviews of whether both parties were given 30 days to 
contest adjustments if the cost-of-living or automated methods had been 
utilized.
    Proposed section 308.2(g) addresses the interstate services. The 
review criterion would include the initiating State's responsibility to 
refer cases to the responding State within 20 days of determining that 
the noncustodial parent is in another State pursuant to section 
303.7(b)(2); providing responses to the responding State with requested 
additional information within 30 calendar days of the request pursuant 
to section 303.7(b)(4); notifying the responding State of new 
information within 10 working days pursuant to section 303.7(b)(5); and 
sending a request for review of a child support order within 20 
calendar days after receiving a request for review and adjustment under 
the Uniform Interstate Family Support Act (UIFSA) pursuant to section 
303.7(b)(6).
    Reviews would also include determining compliance with 
responsibilities of the responding State in interstate cases, including 
central registry requirements for review of submitted documentation for 
completeness, forwarding the case to the State Parent Locator Service 
for locate services, acknowledgment of the receipt

[[Page 55106]]

of the case and request for missing documentation from the initiating 
State, and whether the IV-D agency in the initiating State was informed 
of where the case was sent for action. The review would also determine 
whether the central registry responded to inquiries from other States 
within 5 working days of receipt of a request for a case status review 
pursuant to section 303.7(a)(4).
    Section 308.2(b), (c), and (f) contain language that previously 
appeared in former section 305.20(d) relative to certain missed 
timeframes. As we stated in the preamble to the final rule revising 
Federal audit regulations in child support (59 FR 66204), the State 
should not be penalized when timeframes are missed in a case if a 
successful result is achieved (paternity or a support order is 
established, an order is adjusted, income is withheld, or a collection 
is made), since these results are the main goals of the child support 
enforcement program. We emphasize that all timeframes, including those 
for paternity establishment, support order establishment, review and 
adjustment, and income withholding, are still Federal requirements that 
States must meet.
    Other timeframes that would actually be reviewed for compliance 
would include: 10 days to forward the case upon locating the non-
custodial parent in a different jurisdiction pursuant to section 
303.7(c)(5) and (6); 2 business days to forward any support payments 
collected to the initiating State pursuant to section 303.7(c)(7)(iv); 
and 10 working days to notify the initiating State upon receipt of new 
information pursuant to section 303.7(c)(9).
    Proposed section 308.2(h) addresses the proposed timeframes 
applicable to the expedited processes criterion pursuant to section 
303.101(b)(2)(i) and in keeping with previous definitions of 
substantial compliance in former section 305.20, we are proposing a 
benchmark of 75 percent for the number of cases to be completed within 
6 months and a benchmark of 90 percent for the number of cases to be 
completed within one year. The 75 and 90 percent benchmark standards 
would apply to the establishment of orders from the date of service of 
process to the time of disposition.
    Proposed section 308.3 lists and describes the proposed optional 
program areas of review, which would include program direction and 
program service enhancements. Proposed section 308.3(a) pertains to the 
review of State program direction.
    The first optional category, Program Direction, is envisioned as an 
analysis of the relationships between case results relating to program 
compliance areas, and performance and program outcome indicators. While 
this review category is optional, by including the information, States 
have the opportunity to demonstrate how they are trying to manage their 
resources to achieve the best performance possible. This evaluation 
should explain the data and how the State adjusted its resources and 
processes to meet goals and improve performance. In this section, 
States are encouraged to discuss new laws and enforcement techniques, 
etc., that are contributing to increased performance. Barriers to 
success, such as State statutes, may also be discussed in this section.
    Proposed section 308.3(b) pertaining to the optional review of 
State program service enhancements is envisioned as a report of 
practices initiated by the State that are contributing to improving 
program performance and customer service.
    Examples would include improvement of client services through the 
use of expanded office hours, kiosks, internet, and voice response 
systems. This is an opportunity for a State to promote its programs and 
innovative practices. Some examples of innovative activities that a 
State may elect to discuss in the report include such things as: steps 
taken to make the program more efficient and effective; efforts to 
improve client services; demonstration projects testing creative new 
ways of doing business; collaborative efforts being taken with partners 
and customers; innovative practices which have resulted in improved 
program performance; actions taken to improve public image; and access/
visitation projects initiated to improve non-custodial parents' 
involvement with the children. A State should also discuss in this 
review area whether the State has a process for timely dissemination of 
applications for IV-D services in cases that are not receiving public 
assistance, when requested, and child support program information to 
recipients referred to the IV-D program, as required by section 
303.2(a).

Executive Order 12866

    Executive Order 12866 requires that regulations be drafted to 
ensure that they are consistent with the priorities and principles set 
forth in the Executive Order. The Department has determined that this 
proposed rule is consistent with these priorities and principles. The 
proposed changes in this rule contain the Secretary's standards for 
State self-assessment reviews that largely replace previously required 
mandatory Federal audits.

Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal agencies to determine whether a proposed 
policy or regulation may affect family well-being. If the agency's 
conclusion is affirmative, then the agency must prepare an impact 
assessment addressing seven criteria specified in the law. These 
proposed regulations will not have an impact on family well-being as 
defined in the legislation.

Regulatory Flexibility Analysis

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

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995, Public Law 104-13, all 
Departments are required to submit to the Office of Management and 
Budget (OMB) for review and approval any reporting or recordkeeping 
requirements inherent in a proposed or final rule. Interested parties 
may comment to OMB on these reporting requirements as described below. 
This NPRM contains reporting requirements in Part 308, which the 
Department has submitted, to OMB for its review.
    Section 308.1(e) contains a requirement that a State report the 
results of annual self-assessment reviews to the appropriate OCSE 
Regional Office and to the Commissioner of OCSE. The information 
submitted must be sufficient to measure State compliance with Federal 
requirements for expedited procedures and to determine whether the 
program is in compliance with title IV-D requirements and case 
processing timeframes. The results of the report will be disseminated 
via ``best practices'' to other States and also be used to determine if 
technical assistance is needed and the use of resources to meet goals. 
The State plan preprint page for this requirement (page 2.15, Federal 
and State Reviews and Audits) was approved by OMB July 7, 1997 under 
OMB Number 0970-0017.
    Respondents: State child support enforcement agencies of the 50 
States,

[[Page 55107]]

the District of Columbia, Guam, Puerto Rico, and the Virgin Islands.
    This information collection requirement will impose the estimated 
total annual burden on the States described in the table below:

----------------------------------------------------------------------------------------------------------------
                                                                                 Average burden
           Information collection                Number of      Responses per      hours per       Total annual
                                                respondents       respondent        response       burden hours
----------------------------------------------------------------------------------------------------------------
Section 308.1...............................              54                1            3,866          208,764
----------------------------------------------------------------------------------------------------------------

    The Administration for Children and Families (ACF) will consider 
comments by the public on the proposed information collection in order 
to evaluate the accuracy of ACF's estimate of the burden of the 
proposed collection of information. Comments by the public on this 
proposed collection of information will be considered in the following 
areas:
     Evaluating the accuracy of the ACF's estimate of the 
burden of the proposed collection[s] 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 are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technology, e.g., 
permitting electronic submission of responses.
    OMB is required to make a decision concerning the collection of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment to the Department on the proposed 
regulations. Written comments to OMB for the proposed information 
collection should be sent directly to the following: Office of 
Management and Budget, Paperwork Reduction Project, 725 17th Street, 
N.W., Washington, D.C. 20503, Attn: Desk Officer for the Administration 
for Children and Families.

Unfunded Mandates Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that a covered agency prepare a budgetary impact statement before 
promulgating a rule that includes any 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. If a covered agency must prepare a budgetary impact statement, 
section 205 further requires that it select the most cost-effective and 
least burdensome alternative that achieves the objectives of the rule 
and is consistent with the statutory requirements. In addition, section 
203 requires a plan for informing and advising any small government 
that may be significantly or uniquely impacted by the proposed rule.
    We have determined that the proposed rule will not 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

    This proposed rule is not a major rule as defined in 5 U.S.C., 
Chapter 8.

List of Subjects in Part 308

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

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

    Dated: April 20, 1999.
Olivia A. Golden,
Assistant Secretary for Children and Families.
    Approved: June 14, 1999.
Donna E. Shalala,
Secretary, Department of Health and Human Services.

    For the reasons set forth in the preamble, we propose to amend 45 
CFR Chapter III by adding a new part 308 as set forth below:

PART 308--ANNUAL STATE SELF-ASSESSMENT REVIEW AND REPORT

Sec.
308.0  Scope.
308.1  Self-assessment implementation methodology.
308.2  Required program compliance criteria.
308.3  Optional program areas of review.

    Authority: 42 U.S.C. 654 (15)(a) and 1302.


Sec. 308.0  Scope.

    This part establishes standards and criteria for the State self-
assessment review and report process required under section 454(15)(A) 
of the Act.


Sec. 308.1  Self-assessment implementation methodology.

    (a) Organizational placement. A State must:
    (1) Establish a self-assessment unit within the title IV-D agency, 
another State agency, or within the umbrella agency containing the IV-D 
agency; or
    (2) Privatize the self-assessment functions provided that the IV-D 
agency maintains responsibility for and control of the results produced 
and contents of the annual report.
    (b) Sampling. A State must either review all of its cases or 
conduct sampling which meets the following conditions:
    (1) The sampling methodology maintains a minimum confidence level 
of 90 percent for each criterion;
    (2) The State selects statistically valid samples of cases from the 
IV-D program universe of cases; and
    (3) The State establishes procedures for the design of samples and 
assures that no portions of the IV-D case universe are omitted from the 
sample selection process.
    (c) Scope of review. A State must conduct an annual review covering 
all of the required criteria in Sec. 308.2.
    (d) Review period. Each review period must cover a 12-month period. 
The first review period shall end no later than 12 months after the 
effective date of the final rule, and subsequent reviews shall cover 
each 12-month period thereafter.
    (e) Reporting. (1) The State must provide a report of the results 
of the self-assessment review to the appropriate OCSE Regional Office, 
with a copy to the Commissioner of OCSE, no later than 6 months after 
the end of the review period.
    (2) The report must include, but is not limited to:
    (i) An executive summary, including a summary of the mandatory 
program criteria findings;
    (ii) A description of optional program areas covered by the review;
    (iii) A description of sampling methodology used, if applicable;
    (iv) The results of the self-assessment reviews; and
    (v) Any corrective actions proposed and/or taken.

[[Page 55108]]

Sec. 308.2  Required program compliance criteria.

    (a) Case closure. (1) The State must have and use procedures for 
case closure pursuant to Sec. 303.11 of this chapter in at least 90 
percent of the closed cases reviewed.
    (2) If a IV-D case was closed during the review period, the State 
must determine whether the case met requirements pursuant to 
Sec. 303.11 of this chapter.
    (b) Establishment of paternity and support order. The State must 
have and use procedures required in this paragraph in at least 75 
percent of the cases reviewed.
    (1) If an order for support is required and established during the 
review period, the case meets the requirements, notwithstanding the 
timeframes for: establishment of cases as specified in Sec. 303.2(b) of 
this chapter; provision of services in interstate IV-D cases per 
Sec. 303.7(a), (b), (c)(4) through (6), and (c) (8) and (9) of this 
chapter; and location and support order establishment under 
Secs. 303.3(b)(3) and (5), and 303.4(d) of this chapter.
    (2) If an order was required, but not established during the review 
period, the State must determine the last required action and determine 
whether the action was taken within the appropriate timeframe. The 
following is a list of possible last actions:
    (i) Opening a case within 20 days pursuant to Sec. 303.2(b) of this 
chapter;
    (ii) If location activities are necessary, using all appropriate 
sources within 75 days pursuant to Sec. 303.3(b)(3) of this chapter. 
This includes all the following locate sources as appropriate: 
custodial parent, Federal Parent Locator Service, U.S. Postal Service, 
State employment security agency, employment data, Department of Motor 
Vehicles, and credit bureaus;
    (iii) Repeating location attempts quarterly and when new 
information is received in accordance with Sec. 303.3(b)(5) of this 
chapter;
    (iv) Establishing an order or completing service of process 
necessary to commence proceedings to establish a support order, or if 
applicable, paternity, within 90 days of locating the non-custodial 
parent, or documenting unsuccessful attempts to serve process in 
accordance with the State's guidelines defining diligent efforts 
pursuant to Secs. 303.3(c) and 303.4(d) of this chapter.
    (c) Enforcement of orders. A State must have and use procedures 
required under this paragraph in at least 75 percent of the cases 
reviewed. Enforcement cases include cases in which ongoing income 
withholding is in place as well as cases in which new or repeated 
enforcement actions were required during the review period.
    (1) If income withholding was appropriate and a withholding 
collection was received during the last quarter of the review period 
and the case was submitted for Federal and State income tax refund 
offset, if appropriate, the case meets the requirements of 
Sec. 303.6(c)(3) of this chapter, notwithstanding the timeframes for: 
establishment of cases in Sec. 303.2(b) of this chapter; provision of 
services in interstate IV-D cases under Sec. 303.7(a), (b), (c)(4) 
through (6), and (c) (8) and (9) of this chapter; and location and 
income withholding in Secs. 303.3(b)(3) and (5), and 303.100 of this 
chapter.
    (2) If income withholding was not appropriate, and an enforcement 
collection was received during the review period, and the case was 
submitted for Federal and State income tax refund offset, if 
appropriate, then the case meets the requirements of Sec. 303.6(c)(3) 
of this chapter, notwithstanding the timeframes for: establishment of 
cases in Sec. 303.2(b) of this chapter; provision of services in 
interstate IV-D cases under Sec. 303.7(a), (b), (c)(4) through (6) and 
(c) (8) and (9) of this chapter; and location and enforcement of 
support obligations in Secs. 303.3(b)(3) and (5), and 303.6 of this 
chapter.
    (3) If an order needed enforcement during the review period, but 
income was not withheld or other collections were not received (when 
income withholding could not be implemented), the State must determine 
the last required action and determine whether the action was taken 
within the appropriate timeframes. The following is a list of possible 
last required actions:
    (i) If location activities are necessary, using all appropriate 
location sources within 75 days pursuant to Sec. 303.3(b)(3) of this 
chapter. This includes, at a minimum, all of the following locate 
sources as appropriate: custodial parent, Federal Parent Locator 
Service (FPLS), State employment security agency, Department of motor 
vehicles, and credit bureaus;
    (ii) Repeating attempts to locate quarterly and when new 
information is received pursuant to Sec. 303.3(b)(5) of this chapter;
    (iii) If there is no immediate income withholding order, initiating 
income withholding upon identifying a delinquency equal to one month's 
arrears, in accordance with Sec. 303.100(c) of this chapter;
    (iv) If immediate income withholding is ordered, sending a notice 
to the employer within 15 calendar days of the date the support order 
was entered, if the employer was known, or within 2 business days after 
the date information regarding a newly hired employee is entered into 
the State Directory of New Hires, whichever occurs later in accordance 
with Sec. 303.100(e)(2) of this chapter and section 453A(g)(1) of the 
Act;
    (v) If income withholding is not appropriate or cannot be 
implemented, taking an appropriate enforcement action (other than 
Federal and State income tax refund offset), unless service of process 
is necessary, within no more than 30 days of identifying a delinquency 
or identifying the location the non-custodial parent, whichever occurs 
later in accordance with Sec. 303.6(c)(2) of this chapter;
    (vi) If income withholding is not appropriate or cannot be 
implemented and service of process is needed, taking an appropriate 
enforcement action (other than Federal and State income tax refund 
offset), within no more than 60 days of identifying a delinquency or 
locating the non-custodial parent, whichever occurs later, or 
documenting unsuccessful attempts to serve process in accordance with 
the State's guidelines for defining diligent efforts and 
Sec. 303.6(c)(2)of this chapter;
    (vii) If the case has arrearages, submitting the case for Federal 
and State income tax refund offset during the review period, if 
appropriate, in accordance with Sec. Sec. 303.72, 303.102 and 
303.6(c)(3) of this chapter.
    (d) Disbursement of collections. A State must have and use 
procedures required in this paragraph in at least 75 percent of the 
cases reviewed.
    (1) States must implement a State Disbursement Unit by the 
statutory deadline applicable to that State.
    (2) States must determine whether disbursements of collections 
received in the previous quarter were made within 2 business days after 
receipt by the State Disbursement Unit from the employer or other 
source of periodic income in accordance with section 457(a) of the Act, 
if sufficient information identifying the payee is provided pursuant to 
section 454B(c) of the Act.
    (3) States may delay the distribution of collections toward 
arrearages until resolution of any timely appeals with respect to such 
arrearages pursuant to section 454B(c)(2) of the Act.
    (e) Securing and enforcing medical support orders. A State must 
have and use procedures required under this paragraph in at least 75 
percent of the cases reviewed. A State must:
    (1) Determine whether all support orders established during the 
review period included medical support. If not,

[[Page 55109]]

determine whether medical support was included in the petition for 
support to the court or administrative authority pursuant to 
Sec. 466(a)(19) of the Act and Sec. 303.31(b)(1) of this chapter.
    (2) If a requirement for medical support is included in the order, 
determine whether steps were taken to determine if reasonable health 
insurance was available pursuant to Sec. 303.31(a)(1) and (b)(7) of 
this chapter.
    (3) If reasonable health insurance was available, but not obtained, 
determine whether steps were taken to enforce the order pursuant to 
Sec. 303.31(b)(7) of this chapter.
    (4) Determine whether the IV-D agency informed the Medicaid agency 
that coverage had been obtained when health insurance was obtained 
during the review period pursuant to Sec. 303.31(b)(6) of this chapter.
    (5) Determine whether the custodial parent was provided with 
information regarding the policy when health insurance was obtained 
pursuant to Sec. 303.31(b)(5) of this chapter.
    (6) Determine whether the State requested employers providing 
health coverage to inform the State of lapses in coverage pursuant to 
Sec. 303.31(b)(9) of this chapter.
    (7) Determine whether the State transferred notice of the health 
care provision to a new employer when a noncustodial parent was ordered 
to provide health insurance coverage and changed employment and the new 
employer provides health care coverage.
    (f) Review and adjustment of orders. A State must have and use 
procedures required under this paragraph in at least 75 percent of the 
cases reviewed.
    (1) If a case has been reviewed and meets the conditions for 
adjustment under State laws and procedures and Sec. 303.8 of this 
chapter and the order is adjusted or a determination is made as a 
result of a review during the self-assessment period that an adjustment 
is not needed in accordance with the State's guidelines for setting 
child support awards, the State will be considered to have taken 
appropriate action in that case, notwithstanding the timeframes for: 
establishment of cases in Sec. 303.2(b) of this chapter; provision of 
services in interstate IV-D cases under Sec. 303.7(a), (b), (c)(4) 
through (6), and (c) (8) and (9) of this chapter; and location and 
review and adjustment of support orders contained in Secs. 303.3(b)(3) 
and (5), and 303.8 of this chapter.
    (2) If a case has not been reviewed, the State must determine the 
last required action and determine whether the action was taken within 
the appropriate timeframe. The following is a list of possible last 
actions:
    (i) If locate is necessary to conduct a review, using all 
appropriate location sources within 75 days of opening the case 
pursuant to Sec. 303.3(b)(3) of this chapter. This includes all the 
following locate sources as appropriate: custodial parent, FPLS, U.S. 
Postal Service, State employment security agency, unemployment data, 
Department of Motor Vehicles, and credit bureaus;
    (ii) Repeating location attempts quarterly and when new information 
is received pursuant to Sec. 303.3(b)(5) of this chapter;
    (iii) Providing the custodial and non-custodial parents notices, 
not less often then once every three years, informing them of their 
right to request the State to review and, if appropriate, adjust the 
order;
    (iv) The first notice may be included in the order pursuant to 
Sec. 466(a)(10)(C) of the Act. After the initial notice, the State must 
periodically (at least once every 3 years) send notices to both 
parents;
    (v) Within 180 calendar days of receiving a request for a review or 
locating the non-requesting parent, whichever occurs later, conducting 
a review of the order and adjusting the order or determining that the 
order should not be adjusted pursuant to Sec. 303.8(e) of this chapter;
    (vi) If an adjustment was made during the review period using cost 
of living or automated methods, giving both parties 30 days to contest 
any adjustment to that support order pursuant to Sec. 466(a)(10)(A)(ii) 
of the Act.
    (g) Interstate services. A State must have and use procedures 
required under this paragraph in at least 75 percent of the cases 
reviewed. For all interstate cases requiring services during the review 
period, determine the last required action and determine whether the 
action was taken during the appropriate timeframe:
    (1) Initiating interstate cases:
    (i) Except when using the State's long-arm statute for establishing 
paternity, within 20 calendar days of determining that the non-
custodial parent is in another State and, if appropriate, receipt of 
any necessary information needed to process the case, referring that 
case to the responding State's interstate central registry for action 
pursuant to Sec. 303.7(b)(2) of this chapter.
    (ii) If additional information is requested, providing the 
responding State's central registry with requested additional 
information within 30 calendar days of the request pursuant to 
Sec. 303.7(b)(4) of this chapter.
    (iii) Upon receipt of new information on a case, notifying the 
responding State of that information within 10 working days pursuant to 
Sec. 303.7(b)(5) of this chapter.
    (iv) Within 20 calendar days after receiving a request for review 
and adjustment) pursuant to Sec. 303.7(b)(6) of this chapter.
    (2) Responding interstate cases:
    (i) Within 10 working days of receipt of an interstate IV-D case, 
the central registry reviewing submitted documentation for 
completeness, forwarding the case to the State Parent Locator Service 
(PLS) for locate or to the appropriate agency for processing, 
acknowledging receipt of the case and requesting any missing 
documentation from the initiating State, and informing the IV-D agency 
in the initiating State where the case was sent for action, pursuant to 
Sec. 303.7(a)(2) of this chapter.
    (ii) The Central registry responding to inquiries from other States 
within 5 working days of a receipt of request for case status review 
pursuant to Sec. 303.7(a)(4) of this chapter.
    (iii) Within 10 days of locating the non-custodial parent in a 
different jurisdiction or State, forwarding the case in accordance with 
Federal requirements pursuant to Sec. 303.7(c)(5) and (6) of this 
chapter.
    (iv) Within 2 business days of receipt of collections, forwarding 
any support payments to the initiating State pursuant to 
Sec. 454B(c)(1) of the Act.
    (v) Within 10 working days of receipt of new information notifying 
the initiating State of that new information pursuant to 
Sec. 303.7(c)(9) of this chapter.
    (h) Expedited processes. The State must have and use procedures 
required under this paragraph in the amounts specified in this 
paragraph in the cases reviewed for the expedited processes criterion.
    (1) In IV-D cases needing support orders established, regardless of 
whether paternity has been established, action to establish support 
orders must be completed from the date of service of process to the 
time of disposition within the following timeframes pursuant to 
Sec. 303.101(b)(2)(i) of this chapter:
    (i) 75 percent in 6 months; and
    (ii) 90 percent in 12 months.
    (2) States may count as a success for the 6-month standard cases 
where the IV-D agency uses long-arm jurisdiction and disposition occurs 
within 12 months of service of process on the alleged father or non-
custodial parent.


Sec. 308.3  Optional program areas of review.

    (a) Program direction. A State may include a program direction 
review in its self-assessment for the purpose of analyzing the 
relationships between case results relating to program compliance 
areas, and performance and

[[Page 55110]]

program outcome indicators. This review is an opportunity for States to 
demonstrate how they are trying to manage their resources to achieve 
the best performance possible. A program direction analysis could 
describe the following:
    (1) Initiatives that resulted in improved and achievable 
performance accompanied with supporting data;
    (2) Barriers impeding progress; and
    (3) Efforts to improve performance.
    (b) Program service enhancement. A State may include a program 
service enhancement report in its self-assessment that describes 
initiatives put into practice that improved program performance and 
customer service. This is an opportunity for States to promote their 
programs and innovative practices. Some examples of innovative 
activities that States may elect to discuss in the report include:
    (1) Steps taken to make the program more efficient and effective;
    (2) Efforts to improve client services;
    (3) Demonstration projects testing creative new ways of doing 
business;
    (4) Collaborative efforts being taken with partners and customers;
    (5) Innovative practices which have resulted in improved program 
performance;
    (6) Actions taken to improve public image; and
    (7) Access/visitation projects initiated to improve non-custodial 
parents' involvement with the children.
    (c) A State may provide any of the optional information in 
paragraphs (a) and (b) of this section in narrative form.

[FR Doc. 99-25901 Filed 10-7-99; 8:45 am]
BILLING CODE 4184-01-P