[Federal Register Volume 68, Number 91 (Monday, May 12, 2003)]
[Rules and Regulations]
[Pages 25293-25305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11223]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

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

RIN 0970-AB81


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

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

ACTION: Final rule.

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SUMMARY: This final rule responds to comments on, and makes technical 
corrections to, interim final child support enforcement regulations 
published in the Federal Register on February 9, 1999.
    The 1999 interim final rule eliminated regulations, in whole or in 
part, that were rendered obsolete by, or inconsistent with, welfare 
reform legislation and a series of related laws that followed.

DATES: These regulations are effective on June 11, 2003.

FOR FURTHER INFORMATION CONTACT: Eileen Brooks, Deputy Director, Policy 
Division, OCSE, (202) 401-5369, [email protected].

SUPPLEMENTARY INFORMATION: 

Statutory Authority

    These regulations are published under the authority granted to the 
Secretary by section 1102 of the Social Security Act (the Act). Section 
1102 of the Act requires the Secretary to publish regulations that may 
be necessary for the efficient administration of the functions for 
which he is responsible under the Act.

Interim Final Regulatory Provisions

    Interim final regulations published on February 9, 1999 (64 FR 
6237) amended Child Support Enforcement program regulations throughout 
45 CFR chapter III for conformity with statutory changes enacted in 
concert with welfare reform. The 1999 regulatory document amended: 
Sec. Sec.  301.1, 302.12, 302.31, 302.32, 302.34, 302.35, 302.50, 
302.51, 302.52, 302.54, 302.70, 302.75, 302.80, 303.3, 303.5, 303.7, 
303.8, 303.15, 303.20, 303.30, 303.31, 303.70, 303.71, 303.72, 303.100, 
303.101, 303.102, 304.12, 304.20, 304.21, 304.26, 304.29, and 304.40 
and made nomenclature edits throughout parts 301, 302, 303, and 304. In 
addition, the 1999 interim final rule removed Sec. Sec.  302.57, 
303.21, 303.80, 303.103, 303.105, and former part 305, which were 
wholly rendered obsolete by, or inconsistent with, statutory changes 
resulting from welfare reform and related follow-up legislation. These 
statutes are: Public Law 104-193, the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 (PRWORA); Public Law 105-33, the 
Balanced Budget Act of 1997 (BBA); Public Law 105-89, the Adoption and 
Safe Families Act of 1997 (ASFA); and Public Law 105-200, the Child 
Support Performance and Incentive Act of 1998 (CSPIA).

Response to Comments and Changes to 1999 Interim Final Rule

    We received comments from over 20 representatives of Federal, State 
and local agencies, national organizations, advocacy groups, and 
private citizens on the interim final rule published on February 9, 
1999 in the Federal Register (64 FR 6237). We appreciate the care that 
commenters took in their reviews. No comments were received on the 
request for comments on the information collection activity published 
on July 16, 1999 in the Federal Register (64 FR 38444).
    This final rule includes changes made throughout Child Support 
Enforcement regulations in response to comments we received in the 1999 
document. It also includes additional technical corrections identified 
after publication of the 1999 interim final rule that are of a nature 
that we believe would not require additional comment, such as changes 
in punctuation or spelling.

General

    1. Comment: We received one comment recommending that the rule be 
issued formatted with strikeouts and underlines indicating removals and 
additions from the current regulation.
    Response: The Federal Register's publication policy does not allow 
issuance of regulations with strikeouts and underlines. The annually-
updated version of the Code of Federal Regulations (CFR) contains all 
final revisions to child support program regulations revised as of 
October 1 of each year. The Government Printing Office web site at 
www.gpo.gov includes the latest available version of the CFR.
    2. Comment: We received a comment that we were inconsistent by 
removing some regulations but adding language in other regulations.
    Response: The interim final rule was drafted to minimize 
restatement of statutory language in Federal regulations. Therefore, we 
only added language needed for conformity with statutory language. In 
some cases, the inconsistency between the regulation and PRWORA was so 
great that the regulation was removed. In response to comments received 
and to avoid confusion, we have incorporated some statutory 
requirements in the Federal regulations (e.g., see Sec.  303.8, Review 
and adjustment of child support orders). In addition, because the rule 
was issued as an Interim Final Rule, instead of a Notice of Proposed 
Rulemaking, it was limited to those changes that were required by 
statute and were non-discretionary. Changes involving policy choices 
will be issued through separate rulemaking.
    3. Comment: We received several comments indicating that we missed 
nomenclature changes needed in various sections of the regulations. For 
example, changes were needed to replace ``absent'' parent with 
``noncustodial'' parent and to correct ``an'' noncustodial to ``a'' 
noncustodial parent.
    Response: We have made these straightforward corrections to the 
regulations throughout parts 301 through 304 and 307 and will not 
repeat these comments and responses individually as we discuss each 
changed regulation.
    4. Comment: We received comments on several sections of the 
regulations that were not included in the interim final rule.
    Response: We are unable to address these comments in this final 
rule, but will retain them for consideration in any future revisions to 
those sections.

General Definitions--Sec.  301.1

    1. Comment: One commenter said that the definitions for ``overdue 
support'' and ``past-due support'' create

[[Page 25294]]

confusion and legal problems for the program. ``Overdue support means a 
delinquency * * *'' and ``Past-due support means the amount of support 
* * * which has not been paid.'' Lack of clarity in these definitions 
and in use of the term ``delinquency'' in the regulations leaves 
interpretation of these terms to local courts. The commenter cites 
court rulings that: (1) Preclude use of Federal income tax refund 
offset when an individual is current in his court-ordered repayment 
plan; (2) past-due support is created by default in performance rather 
than by the existence of outstanding arrears; and (3) arrearages 
resulting from the retroactive application of the support order do not 
constitute past-due support subject to the Federal income tax refund 
intercept.
    Response: These regulatory definitions restate the definitions used 
in the Act and were not changed by any recent amendments to the Act. 
``Overdue support'' is a term defined in section 466(e) of the Act and 
is applicable to section 466 remedies. It was added when that section 
on mandatory State enforcement laws was first included in title IV-D by 
the 1984 amendments to the Act. The term ``past-due support'' is 
defined in section 464(c) of the Act and used in sections 454(6) and 
454(18) and throughout section 464 to refer to delinquencies qualifying 
for Federal income tax refund offset. Because these are statutory 
definitions with particular meanings and applications, we have not 
altered them. According to Black's Law Dictionary, the term 
``delinquent'' means due and unpaid at the time appointed by law. In 
the case of child support, a judgment for unpaid support or an 
arrearage amount would be a delinquency. Delinquency is used in these 
regulations as a general term to distinguish current support from other 
support.
    2. Comment: One commenter suggested that, under definitions, the 
term ``non-title IV-A Medicaid recipient'' be amended to ``non-IV-A 
Medicaid recipient''.
    Response: We agree and have made this revision. The term ``Non-
title IV-A Medicaid Recipient'' is revised by removing ``Non-title IV-
A'' and replacing it with ``Non-IV-A''.

Single and Separate Organizational Unit--Sec.  302.12

    1. Comment: One commenter noted that paragraph (a)(1)(i) deletes 
reference to Sec.  205.100 although there has been no amendment to that 
section. The commenter also indicated that the word ``other'' should be 
removed from paragraph (a)(1)(ii) for clarity.
    Response: Section 205.100 is obsolete with respect to title IV-A as 
reauthorized under welfare reform. It is still permissible for the IV-D 
agency to be located within any agency designated to administer title 
IV-A, but there is no longer a requirement for a single State agency in 
the Temporary Assistance for Needy Families (TANF) program. Therefore, 
the word ``other'' in newly-designated paragraph (a)(1)(ii) is 
appropriate.

Establishing Paternity and Securing Support--Sec.  302.31

    1. Comment: One commenter noted that the preamble to the interim 
final rule said that we were removing Sec.  302.31(a)(4), but it was 
not removed. This reference appeared in the discussion of Sec.  303.80.
    Response: Reference to removal of Sec.  302.31(a)(4) was incorrect. 
The content of Sec.  302.31(a)(3) was removed and paragraph (a)(3) was 
reserved by the interim final rule. Because we have no plans to use the 
reserved paragraph (a)(3), we are deleting it in this final rule and 
have made a technical correction redesignating paragraph (a)(4) as 
(a)(3).

Collection and Disbursement of Support Payments by the IV-D Agency--
Sec.  302.32

    1. Comment: Two commenters indicated that disbursement timeframes 
in paragraphs (b)(1), (2) and (3) should start from the date of receipt 
by the State disbursement unit (SDU), pursuant to section 454B(c) of 
the Act.
    Response: We agree with these comments and have revised the 
paragraphs, as needed, to make them consistent with the statute. We 
will revise paragraph (b)(1) by substituting ``date'' for ``initial 
point''. Paragraph (b)(1) already has the language ``receipt by the 
SDU''. We will revise paragraphs (b)(2)(ii), (b)(2)(iii) and (b)(3)(i) 
by changing references to receipt by the State to reference receipt by 
the SDU.
    2. Comment: One commenter questioned if the language in Sec.  
302.32(b)(2)(i) ``(other than payments sent to the family from the 
State share of assigned collections)'' is in reference to States that 
pass through part of or all of the collection in TANF cases. Another 
commenter indicated that, regarding paragraph (b)(2)(i), collections in 
TANF cases cannot be disbursed to the family within 2 business days of 
receipt by the SDU or of the end of the month of receipt. The County 
Welfare Department must first determine total assistance paid to the 
family for the month. The commenter indicated that it is impossible to 
determine if a pass-through or other support payment is available to 
the family until the total assistance paid to the family during the 
month is known. Once the total assistance paid is provided to the IV-D 
agency after the end of the month, the IV-D agency conducts the welfare 
payment distribution process to determine if the family is entitled to 
a pass-through or other support payment. The commenter requests that 
the regulations be amended so that States be allowed to make these 
payments within 2 business days of the determination of the amount of 
support payable to the family after the end of the month.
    Response: The language quoted by the first commenter does refer to 
payments that States pass through to families. Section 454B of the Act, 
entitled Collection and Disbursement of Support Payments, requires the 
SDU to ``distribute all amounts payable under section 457(a) within 2 
business days after receipt from the employer or other source or 
periodic income, if sufficient information identifying the payee is 
provided.'' Addressing the issue raised by the second commenter goes 
beyond a technical change to the regulations and therefore cannot be 
dealt with in this document. We will consider these comments in future 
proposed rulemaking on this section.
    3. Comment: One commenter asked that, since the SDU does not 
receive and disburse Federal income tax refund intercepts, could we 
include reference in paragraph (b)(2)(iv) to other entities (e.g., IV-D 
agencies) that may receive and disburse them?
    Response: The commenter is correct that Federal income tax refund 
offset collections are not necessarily sent to the SDU; they are sent 
to an account designated by the State IV-D agency for receipt of these 
monies. However, payments made to the family from these funds must be 
disbursed by the SDU, therefore we have not made this change to the 
regulation.
    4. Comment: The commenter also asked whether we plan to include in 
the regulations information from OCSE-AT-98-24 on the definition of 
``assistance paid to the family''.
    Response: Since this definition is addressed in existing agency 
issuances, we do not believe it is necessary to capture it in 
regulation. Please note that OCSE-AT-99-10 revised the definition of 
assistance for child support purposes in OCSE-AT-98-24, for consistency 
with the final TANF regulations.

State Parent Locator Service--Sec.  302.35

    1. Comment: One commenter requested that the preamble clarify that 
reference to the removal of medical support obligations from Sec.  
302.35(c)(1), which addresses appropriate requests to

[[Page 25295]]

the State parent locator service for use of the Federal Parent Locator 
Service, is merely a technical change because the language is obsolete 
and that the change has no substantive effect on the use of the SPLS or 
FPLS to collect medical support.
    Response: We agree. The deletion of ``or medical support 
obligations if an agreement is in effect under Sec.  306.2 of this 
chapter'' in Sec.  302.35(c)(1) has no substantive effect on the use of 
the SPLS or FPLS to collect medical support under the IV-D program. The 
language was deleted because former Part 306 governing optional 
cooperative agreements between IV-D and Medicaid agencies is no longer 
in effect.
    2. Comment: One commenter requested that in Sec.  302.35(c)(4) the 
phrase ``parental kidnapping or child custody or visitation'' cases be 
used because it is consistent with other sections of the statute and 
regulations.
    Response: We agree and have changed the terminology to reflect the 
order of wording elsewhere in regulations. We are amending paragraph 
(c)(4) by removing '', visitation'' and adding, ``or visitation'' after 
``custody'' to conform to changes to section 463(a)(2) of the Act 
defining persons authorized to access the FPLS for custody or 
visitation purposes.
    3. Comment: One commenter suggested that States need more guidance 
on the role of the SPLS under PRWORA, including the appropriate use of 
State databases to respond to requests, how to address family violence 
concerns, and ``locate-only'' requests in non-IV-D support cases. The 
commenter indicated that there has been an increase in the number of 
``locate-only'' requests submitted to the SPLS and States have concerns 
about appropriately verifying and responding to these requests. The 
commenter suggested that the Secretary provide further guidance to 
ensure that the vast amount of data now available through the SPLS and 
FPLS is properly safeguarded.
    Response: We agree that these issues are very important and we have 
already issued guidance. In DCL-00-36, dated March 15, 2000, OCSE 
published a summary list of current statutory citations, regulatory 
citations, and OCSE policy documents covering authorized requests for 
FPLS information and information from statewide child support 
enforcement systems. Key documents include: AT-99-09, dated June 16, 
1999, on safeguarding of FPLS information; AT-98-27, dated September 
17, 1998 and DCL-98-122, dated November 25, 1998, on the family 
violence indicator; AT-98-26, dated August 25, 1998, forwarding final 
regulations implementing statewide automated systems requirements; PIQ-
98-05, dated August 12, 1998, on requests for FPLS information for 
making or enforcing a child custody or visitation determination; and 
PIQ-98-02, dated May 18, 1998 on court access to FPLS information. 
Other important OCSE documents are: The Federal Case Registry Interface 
Guidance Document, Section 6.7 Request for Locate; and the Automated 
Systems for Child Support Enforcement: A Guide for States, outlining 
system certification requirements.
    To gather additional information on States' needs in this area, 
OCSE convened a work group to review current policy on the locate 
function and safeguarding of information handled by State IV-D 
agencies. The group met for 7 months in 2001 and provided very useful 
guidance to OCSE regarding States' concerns. We are currently 
developing proposed regulations on the SPLS and safeguarding of State 
information in order to address these issues. We are also developing 
guidance to States on use of the FPLS in non-IV-D child support cases.
    In addition to the above, in reviewing Sec.  302.35, we identified 
an error in wording in paragraph (c)(2), which refers to ``any agency'' 
of a court that may request FPLS information. We are making a technical 
correction to this paragraph by replacing ``agency'' with ``agent'' to 
reflect the statutory language from which this provision is derived.

Provision of Service in Interstate IV-D Cases--Sec.  302.36

    1. Comment: One commenter noted that Sec.  303.7(b)(3) references 
``Federally-approved interstate forms'' and suggested that a provision 
should be added to Sec.  302.36 to require use of Federally approved 
interstate forms per section 454(9)(E) of the Act.
    Response: We do not generally include statutory references in the 
regulations except where necessary for understanding the requirements. 
Since Sec.  302.36 requires the State to provide interstate services in 
accordance with the requirements of Sec.  303.7, and Sec.  303.7 
requires use of the Federally-approved interstate forms, we do not 
believe that an additional reference to the forms requirement is needed 
in regulation.

Assignment of Rights--Sec.  302.50

    1. Comment: Several commenters suggested we change the title 
``Assignment of rights'' for clarity. One suggested ``Obligations with 
assigned rights'' and the other suggested ``Assignment of rights to 
support obligations''.
    Response: We agree that ``Assignment of rights'' is confusing and 
are revising the title of this section to ``Assignment of rights to 
support'' because an individual assigns his or her rights to support, 
not to the support obligation itself. This language is consistent with 
language used in the regulation section.
    In addition, in reviewing this section, we identified misplaced 
punctuation. To correct this, we are amending paragraph (b)(2) by 
replacing ``; or'' at the end of the paragraph with a period.

Distribution of Support Collections--Sec.  302.51

    1. Comment: A State commenter raised concerns about revisions to 
procedures for distribution of State tax intercept collections. The 
State has a high State income tax and realizes significant collections 
from State tax intercept. Federal and State tax intercept, while having 
different thresholds for collection, have previously been distributed 
to satisfy arrearages. OCSE-AT-97-17 indicated that States can decide 
distribution order where section 457 of the Act is silent.
    Response: Section 457 of the Act only provides one exception to 
applying collections first to satisfy the current support obligation. 
Section 457(a)(2)(B)(iv) of the Act requires that Federal income tax 
refund offset collections must be applied first to satisfy arrearages. 
Therefore, there is no discretion in Federal law to allow State income 
tax refund offset collections to be distributed like Federal income tax 
refund offsets. To clarify, however, OCSE-AT-97-17 states that States 
may satisfy different categories of assigned arrearages in any order 
because section 457 is silent in this regard. It does not allow States 
to choose whether to apply a collection to arrearages rather than 
current support.
    In reviewing this section, we identified an incorrect citation to 
section 457 of the Act. To correct it, we are amending Sec.  
302.51(a)(3) by inserting ``B'' in the citation so that it reads 
``section 457(a)(2)(B)(iv)''.
    2. Comment: One commenter suggested that we amend the regulation to 
be consistent with OCSE-AT-97-17, Q & A 41, to allow States to hold 
future payments until the due date or immediately pay them to the 
family in former assistance cases.
    Response: Section 302.51(b), which was formerly Sec.  302.51(c), 
addresses the distribution or allocation of collections to satisfy 
future support in current assistance cases and prohibits a State from 
applying or distributing those

[[Page 25296]]

collections to satisfy future support unless all assigned current and 
past-due support is paid. Q & A 41 of OCSE-AT-97-17 is not consistent 
with disbursement timeframes in section 454B of the Act and will be 
revised. Any collection in a former or never assistance case that is 
owed to the family must be sent to the family within 2 business days of 
receipt in the SDU. This would include future payments owed to the 
family. The 2-day time frame was required by PRWORA, which also 
required IV-D agencies to establish SDUs. Since the February 9, 1999 
publication of the interim final regulation, implementation of the SDUs 
has allowed States to comply with the 2-day requirement without 
difficulty.
    3. Comment: One commenter indicated that the requirement under 
paragraph (a)(4)(iii) to contact the employer when the employer fails 
to report the date of withholding is burdensome and jeopardizes 
disbursement within 2 days of receipt of the collection. The commenter 
indicated that the State should use the date of the employer's check or 
it should be left at State option to contact the employer.
    Response: Pursuant to section 454B(c) of the Act, the date of 
collection for amounts collected and distributed is the date of receipt 
by the SDU. However, States have the option of deeming the date of 
withholding to be the date of collection when the current support is 
withheld by an employer in the month when due and received by the SDU 
in a month other than the month when due. Therefore, States are not 
required to use the date of withholding as the date of collection for 
distribution purposes. If a IV-D agency opts to use the date of 
withholding and an employer fails to supply that date, Sec.  
302.51(a)(4)(iii) allows the State to reconstruct the date either by 
contacting the employer or comparing the actual amounts collected with 
the pay schedule in the order. Thus, the State may reconstruct the date 
of withholding without contacting the employer.
    4. Comment: Two commenters indicated that the preamble language 
describing changes to paragraph (a)(4) which defines the date of 
collection for distribution purposes is not consistent with the change 
made in the regulation itself.
    Response: We agree that there is a discrepancy between the preamble 
and the regulation in paragraphs (a)(4)(i) and (ii). The preamble 
omitted the effective date of the new definition of date of collection. 
The regulatory language is correct: ``Effective October 1, 1998 (or 
October 1, 1999 if applicable) except with respect to those collections 
addressed under paragraph (a)(3) of this section and except as 
specified under paragraph (a)(4)(ii) of this section, with respect to 
amounts collected and distributed under title IV-D of the Act, the date 
of collection for distribution purposes in all IV-D cases is the date 
of receipt in the State disbursement unit established under section 
454B of the Act.''
    5. Comment: One commenter indicated that former paragraph (b)(5) 
that read ``if the amount collected is in excess of the amounts 
required to be distributed under paragraph (b)(1) through (4) of this 
section, such excess shall be paid to the family'' should be retained. 
The commenter suggested that due to revisions to paragraphs (b)(1) and 
(b)(3), this paragraph needs rewording to retain its original intent.
    Response: Section 302.51(b)(5) was deleted because it referred to 
paragraphs (b)(1) through (4) which were removed because of changes to 
the distribution rules pursuant to PRWORA. We deleted provisions 
inconsistent with the new section 457 of the Act and made a conscious 
decision not to repeat the statutory requirements in the regulations. 
However, the basic principle of ensuring that the State never retains 
more assigned support collections than the total amount of assistance 
paid to the custodial parent is still in effect. This provision is 
found in section 457(a)(1)(B) of the Act (see also two Action 
Transmittals on distribution, OCSE-AT-97-17 and OCSE-AT-98-24).

Notice of Collection of Assigned Support--Sec.  302.54

    1. Comment: One commenter pointed out some inconsistencies in the 
interim final rule: paragraph (a)(1) refers to ``conditions in 
paragraph (c)'', but former paragraph (c) was deleted; paragraph 
(b)(1)(ii) refers to ``information required under paragraph (b)(2)'', 
but that information is now in paragraph (a); and paragraph (b)(2) 
refers to paragraphs (b)(1) and (b)(2), which are now paragraphs (a)(1) 
and (2).
    Response: We agree with this commenter. A final rule which 
eliminated certain regulatory requirements was issued on December 20, 
1996 in the Federal Register (61 FR 67235). That rule removed paragraph 
(a) and redesignated paragraphs (b) and (c) as (a) and (b). At that 
time, we neglected to make corresponding changes in later references to 
these redesignated paragraphs.
    Therefore, we are now making the following technical corrections: 
in paragraph (a)(1), we are revising ``paragraph (c)'' to read 
``paragraph (b)''; in paragraph (b)(1)(ii), we are revising ``paragraph 
(b)(2)'' to read ``paragraph (a)''; and in paragraph (b)(2), we are 
revising ``(b)(1)'' to read ``(a)(1)'' and ``(b)(2)'' to read 
``(a)(2)''.


Sec.  302.65  Withholding of Unemployment Compensation.

    In reviewing the regulations for corrections missed in the interim 
final rule, we found a typographical error in Sec.  302.65. To correct 
this, we are making a technical change to correct the spelling of 
``criteria'' in paragraph (c)(7).

Required State Laws--Sec.  302.70

    1. Comment: Two commenters pointed out that since Sec. Sec.  
303.103 and 303.105 are eliminated, references to them in paragraphs 
(a)(4) and (7) should be eliminated.
    Response: We agree and are deleting these references. In addition 
to the changes raised by commenters, we are making a similar technical 
correction to paragraph (c) by replacing ``Sec. Sec.  303.100 through 
303.105 of this chapter'' with ``Sec. Sec.  303.100 through 303.102 and 
Sec.  303.104 of this chapter''.
    2. Comment: Two commenters noted that paragraph (a)(5)(ii) refers 
to obsolete ``Sec. Sec.  232.40 through 232.49 of this title'' and 
should be changed to refer to section 454(29) of the Act.
    Response: We have deleted the regulatory references in that clause 
and added the reference to section 454(29) of the Act.
    3. Comment: One commenter recommended that we remove paragraphs 
(a)(1) through (a)(11) as they restate the provisions of the Act but 
retain introductory language in paragraph (a).
    Response: Paragraphs (a)(1) through (11) not only restate 
provisions in section 466 of the Act, they also cross-reference related 
requirements in Part 303 of the regulations. We are looking at the best 
way to present these requirements and will address any needed changes 
during future revisions to this section.
    4. Comment: One commenter noted that we should replace ``wages'' 
with ``income'' in paragraph (a)(8).
    Response: We have made this technical revision for consistency with 
section 466(a)(1) and (b) of the Act.

Procedures for the Imposition of Late Payment Fees on Noncustodial 
Parents Who Owe Overdue Support--Sec.  302.75

    1. Comment: A commenter noted that paragraph (b)(6) refers to Sec.  
305.50, which no longer exists.
    Response: The reference to Sec.  305.50 in the interim final 
regulation was a typographical error. In paragraph (b)(6),

[[Page 25297]]

we are correcting the citation by changing ``Sec.  305.50'' to ``Sec.  
304.50''.

Mandatory Computerized Support Enforcement System--Sec.  302.85

    1. Comment: A commenter suggested editing paragraph (b)(2), 
governing the conditions for waiver of certain automated systems 
requirements, because it refers to 45 CFR part 305 which was removed 
and reserved by the interim final rule.
    Response: Since publication of the interim final rule, a new part 
305 was added to the regulations. Section 305.63 of this part contains 
requirements for determining substantial compliance with title IV-D of 
the Act as a result of an audit conducted under Sec.  305.60. Thus, we 
are not changing the reference to part 305 in this section.

Location of Noncustodial Parents--Sec.  303.3

    1. Comment: With the expanded Federal Parent Locator Service 
(FPLS), States submit cases in their State Case Registries to the 
Federal Case Registry (FCR). When a new case is submitted to the FCR, 
it is matched proactively with other data in the FPLS and States 
receive locate information automatically. Now that this proactive 
matching occurs, the commenter asked if there is still a need for 
States to submit cases quarterly to the FPLS for locate? Also, is it 
still necessary to access all appropriate location sources, including 
the FPLS, within 75 calendar days of determining that location is 
necessary and to make repeated locate attempts, including transmitting 
cases to the FPLS, when new information becomes available on a case?
    Response: Proactive matching between the FCR and the National 
Directory of New Hires (NDNH) occurs each time new information is added 
to an FCR or NDNH record on an individual. The proactive match 
information is sent electronically to State IV-D agencies daily when a 
match occurs to link a IV-D case with newly provided information. This 
is a major enhancement to program locate processes and leads to 
location of individuals sought in many child support cases. Further 
location attempts may remain necessary in cases where people are self-
employed, employed but not reported, unemployed but not receiving 
unemployment compensation, or employed outside the United States by 
entities that do not report to the FPLS. In addition, location efforts 
are needed to find assets, debts, and other information that enables an 
agency to proceed with a case even though proactive match information 
is provided on new hires, quarterly wages and unemployment 
compensation. OCSE has issued PIQ-01-02, dated February 28, 2001, to 
address these changes. The PIQ indicates States are not required to 
submit cases to the FPLS for searches of other locate sources, but OCSE 
encourages this if the State has reason to believe that an FPLS query 
may be helpful. States are not required to submit cases to the FPLS 
quarterly, nor are they required to make repeated locate attempts to 
the FPLS, when new information becomes available, since constant 
updating of FCR and NDNH databases and ongoing proactive matching are 
in place.

Establishment of Paternity--Sec.  303.5

    1. Comment: A commenter noted that this section is amended to 
include administrative orders for genetic testing. As amended, the 
language eliminates reference to certain paternity actions taken in 
court. The commenter asked if we intend to drop the requirement for the 
child support agency to obtain an order for repayment of costs for 
genetic tests if the tests were ordered as part of a court process.
    Response: In Sec.  303.5(d)(2) we deleted ``legal'' to indicate 
that a contested paternity case is any action in which the issue of 
paternity may be raised under State law and one party denies paternity. 
The action may occur through an administrative or judicial process. The 
amendment deleting ``legal'' did not eliminate court actions.
    2. Comment: Two commenters asked whether the phrase in paragraph 
(c) which reads ``and use through competitive procurement 
laboratories'' is correct.
    Response: This phrase is accurate. States must follow competitive 
procurement practices, consistent with requirements at 45 CFR part 74, 
and use accredited laboratories that perform legally and medically 
acceptable genetic tests at reasonable cost, consistent with 
requirements at section 466(a)(5)(F) of the Act.
    3. Comment: One commenter noted that the use of the phrase 
``alleged father who has denied paternity'' in paragraph (e)(3) is 
inconsistent with section 466(a)(5)(B)(ii)(I) of the Act which requires 
recoupment from the alleged father if paternity is established, whether 
or not he denies paternity.
    Response: Section 466(a)(5)(B)(ii)(I) of the Act provides for 
recoupment at State option only in contested cases where the agency has 
to order genetic tests and paternity is established. The commenter 
raises issues that go beyond the scope of this technical rulemaking. We 
will consider this comment in future revisions to this section through 
proposed rulemaking.

Provision of Services in Interstate IV-D Cases--Sec.  303.7

    1. Comment: Several commenters noted that the preamble to the 
interim final rule (64 FR 6241) indicates paragraph (b)(1) is amended 
to require States to use their long-arm statute to establish paternity, 
but there is no corresponding requirement in the regulation itself.
    Response: We have corrected this error by revising paragraph (b)(1) 
to read: ``Use its long-arm statute to establish paternity, when 
appropriate.'' As indicated in the preamble to the interim final rule, 
all States have long-arm paternity establishment authority under UIFSA.
    2. Comment: One commenter suggested changing ``wage withholding to 
``income withholding'' in paragraph (b)(2).
    Response: We agree and have made this change for consistency with 
section 466(a)(1) and (b) of the Act which refer to income withholding.
    3. Comment: One commenter noted that the preamble indicated that 
regulatory references in paragraphs (c)(7)(ii) and (iii) were placed in 
the correct numerical order, but there was no corresponding change in 
the regulation itself.
    Response: We have made these changes, as intended in the interim 
final rule. In paragraph (c)(7)(ii) we are correcting ``Sec. Sec.  
303.4 and 303.101 of this part and Sec.  303.31 of this chapter'' to 
read ``Sec. Sec.  303.4, 303.31 and 303.101 of this part''. Similarly, 
in paragraph (c)(7)(iii) we are correcting ``Sec. Sec.  303.6 and 
303.100 through 303.102 and 303.104 of this part and Sec.  303.31 of 
this chapter'' to read ``Sec. Sec.  303.6, 303.31, 303.100 through 
303.102, and 303.104 of this part''.
    4. Comment: Several commenters suggested that Sec.  303.7(c)(7)(iv) 
be revised to require the IV-D agency to forward payments to the 
initiating State within 2 business days of the date of receipt in the 
State Disbursement Unit of the responding State.
    Response: We agree that this suggestion is consistent with section 
454B of the Act, which requires SDUs to disburse certain amounts within 
2 business days of receipt, but it is not required by statute and 
therefore not included in this rulemaking. The 2-day time frame applies 
only to collections from employers and collections of other periodic 
income. Collections that do not result from periodic income, such as 
tax refund offsets, lottery winning intercept, or levies of assets, are 
not required to be

[[Page 25298]]

distributed within 2 days, as there may be appeals of these types of 
collections. We will consider changes to time frames applicable to 
interstate cases in the next revision to Sec.  303.7 under a Notice of 
Proposed Rulemaking.

Review and Adjustment of Child Support Orders--Sec.  303.8

    1. Comment: There were two comments concerning definitions for 
``review'' and ``adjustment'' that were in the former Sec.  303.8. One 
commenter suggested that we retain the former definitions of ``review'' 
and ``adjustment'', but rename them as ``guidelines review'' and 
``guidelines adjustment''. The commenter made this suggestion because 
most States will continue with guideline reviews.
    The second commenter believed that the language for this section 
might be construed to mandate administrative reviews. The commenter 
suggested that we amend the regulation by including a process for 
challenging a proposed adjustment or determination, apart from the 
review that takes place in the judicial setting. The commenter believes 
that if their State complies with the new provisions, there would be no 
proposed order or adjustment. In the commenter's State, a litigant 
files a motion with the court, the court rules on the motion; and 
either party can appeal the order.
    Response: We agree with these comments. We have reinstated the 
terms ``review'' and ``adjustment'' from the former Sec.  303.8(a)(1) 
and (3) as applicable to guidelines reviews only.
    Reinstating the definition of ``review'' also clarifies that 
reviews are not mandated to be conducted only by administrative 
process. The definition for ``review'' includes ``proceeding before a 
court, quasi-judicial process, or administrative body''.
    2. Comment: One commenter was concerned that the 15-day timeframe 
to determine whether to conduct a review was eliminated.
    Response: The 15-day timeframe to determine whether or not to 
conduct a review was removed because it conflicts with the requirement 
that States review, at least once every 3 years, any case upon receipt 
of a request for review.
    3. Comment: We received a few comments about notices. Two 
commenters questioned whether the requirement to provide the notice of 
the right to request a review is met by placing such notice in the 
order. Another commenter asked, in a case with multiple orders, which 
State sends the notice of the right to request a review and the notice 
of the results of the review. A fourth commenter asked when to send 
these notices and how to implement this requirement since each case has 
a different date of application, different date of review, and States 
vary in frequency permitted between reviews.
    Response: Section 466(a)(10)(C) of the Act requires the State to 
provide notice to each parent subject to the order not less than once 
every 3 years informing them of their right to request the State to 
review and, if appropriate, adjust the order pursuant to this 
paragraph. The paragraph also states that the notice may be included in 
the order. Including the notice in the order merely takes care of the 
first year requirement; the triennial requirement must still be 
fulfilled.
    With respect to cases with multiple orders, the State that is 
working the case should send the notice of the right to request a 
review, or if it issues an order, may include the notice in the order. 
Notice of the right to request a review must be sent every 3 years 
thereafter if the State continues to work the case. Any State that 
conducts a review must send the notice of the results of the review. A 
review conducted in a case with multiple orders would include a 
determination of the controlling order and reconciliation of all 
arrearages under the orders in accordance with the Uniform Interstate 
Family Support Act (UIFSA). Once a controlling order determination is 
made, UIFSA governs who has jurisdiction to adjust or modify the 
controlling order.
    Since section 466(a)(10)(C) was effective October 1, 1996, States 
should have notice procedures in place. Each State has authority to 
meet this requirement in a manner that is most efficient for its system 
and resources. Notices can be sent all at one time or on a staggered 
basis according to the State's own procedures.
    4. Comment: There were two comments regarding the use of thresholds 
and change of circumstances. One commenter noted that an Office of 
Inspector General report indicated that 40 States maintained the 
requirement to meet thresholds showing a substantial change in 
circumstances before a review is conducted or an adjustment is made, 
which they use regardless of the frequency of reviews. The commenter 
asked whether thresholds for the 3-year reviews upon request could be 
less prohibitive than the thresholds for reviews that are conducted 
more frequently that require a substantial change of circumstances. 
Another commenter thought that even the 3-year reviews should require a 
substantial change in circumstances since it is required by the more 
frequent reviews.
    Response: States may not require proof or a showing of a change in 
circumstances in a 3-year review upon request. Under section 
466(a)(10)(A)(iii) of the Act, and upon request, 3-year reviews, and 
adjustment, if appropriate, are automatic, without any proof of a 
change of circumstances. If a party desires a review sooner than once 
every 3 years, the party must show a substantial change of 
circumstances for an adjustment of the order, consistent with section 
466(a)(10)(B) of the Act.
    In reviewing Sec.  303.8 and the comments received, we determined 
that the changes made by the interim final rule were not fully 
reflective of the statutory requirements in section 466(a)(10) of the 
Act and that this was leading to confusion about what States must do to 
meet the requirements. Therefore, in addition to reinstating the 
definitions for ``review'' and ``adjustment'' from the original 
regulation in response to comments, we have decided to replace the 
paragraph (b) language published in the interim final rule with the 
language in the statute at section 466(a)(10) of the Act. We are 
revising paragraph (c) to clarify that States may use a quantitative 
standard only in cases involving the use of automated methods in 
accordance with section 466(a)(10)(A)(i)(III) of the Act. That section 
alone refers to orders being ``eligible for adjustment,'' recognizing 
there might be some standard set to determine eligibility for 
adjustment. The other two methods of review (guidelines and cost-of-
living) do not contain this language. Sections 303.8(a) and (d) through 
(f) remain as published in the interim final rule. A summary of the 
changes to this section follows.
    We are revising paragraph (b)(1) by restating the requirements of 
section 466(a)(10)(A)(I)(i) of the Act that the State must have 
procedures under which reviews are performed every 3 years upon request 
of either parent or, in the case of an assignment under part A, upon 
the request of the State agency, taking into account the best interests 
of the child. For clarity, and consistency with section 466(a)(10) of 
the Act, paragraph (b)(1)(i) is added to the regulation to explain 
guideline reviews; paragraph (b)(1)(ii) is added to explain cost of 
living adjustment (COLA) reviews; and paragraph (b)(1)(iii) is added to 
explain the automated reviews. These three subparagraphs repeat the 
statutory requirements of section 466(a)(10)(A)(i)(I)-(III).
    Current paragraph (b)(2) of the regulation is redesignated as 
paragraph (b)(6) and revised to be consistent with the statute, as 
discussed below.
    We are adding a new paragraph (b)(2) which restates section 
466(a)(10)(A)(ii)

[[Page 25299]]

of the Act, to specify that either party may contest an adjustment 
within 30 days after the date of the notice of the adjustment in the 
case of a COLA or automated review by making a request for a guideline 
review, and adjustment, if appropriate.
    We are reinstating former definitions for ``adjustment'' and 
``review'' in a new paragraph (b)(3) for use in guideline reviews only, 
in response to comments.
    We are restating section 466(a)(10)(A)(iii) of the Act in a new 
paragraph (b)(4), which specifies that adjustments under guideline 
reviews do not require proof or showing of a change in circumstances.
    We are adding new paragraph (b)(5) to restate section 466(a)(10)(B) 
of the Act regarding making a request for a review outside the 3-year 
cycle. If the requesting party demonstrates a substantial change in 
circumstances, the State must adjust the order in accordance with its 
guidelines.
    We are redesignating former paragraph (b)(2) as new paragraph 
(b)(6) and revising it to restate section 466(a)(10)(C) of the Act 
regarding notice not less than once every 3 years informing parents of 
their right to request a review. We have retained the provision in the 
current regulation that the notice must specify the place and manner in 
which the request should be made.
    Paragraph (c) is amended by adding a paragraph title and the words 
``using automated methods under paragraph (b)(1)(iii)'' to indicate 
that the reasonable quantitative standard for determining adequate 
grounds for petitioning for adjustment of the order applies only when 
the review is done using automated methods, as required under section 
466(a)(10)(A)(i)(III) of the Act.
    Paragraphs (d) through (f) are unchanged with the exception of the 
technical changes of adding a title to paragraph (d), changing the 
words ``to petition for'' to ``initiate an'' in paragraph (d) and 
substituting ``must'' for ``will'' in paragraph (f).

Agreements To Use the Federal Parent Locator Service (FPLS) in Parental 
Kidnapping and Child Custody Cases--Sec.  303.15

    1. Comment: One commenter thought that paragraph (a)(1) which 
defines authorized persons should be revised consistent with changes 
made by the Adoption and Safe Families Act of 1997 (ASFA).
    Response: ASFA amended section 453 of the Act by adding title IV-B 
and title IV-E agencies to the list of authorized persons to whom FPLS 
information may be disclosed for the purpose of establishing parentage. 
Section 302.35(c) already includes these authorized persons, in 
accordance with ASFA amendments to section 453 of the Act. ASFA did not 
amend the list of authorized persons in section 463 of the Act, which 
governs the regulations at Sec.  303.15.
    We amended this section, but failed to amend the title. We are 
revising the section title to reflect the addition of ``visitation'' 
determinations as an authorized purpose of the agreements. We are also 
making technical changes in paragraph (a)(1)(i) by replacing the period 
at the end with a semicolon and in paragraph (a)(1)(ii) by replacing 
``visistation'' with ``visitation'' and by adding ``or'' after the 
semi-colon.

Minimum Organizational and Staffing Requirements--Sec.  303.20

    1. Comment: One commenter noted that paragraph (e)(3) refers to 
parts 220, 222 and 226 of 45 CFR chapter II, which no longer exist.
    Response: We agree with the commenter and have removed the 
reference to the obsolete regulations.
    2. Comment: One commenter noted that paragraph (g) remains although 
it refers to part 305, which was removed.
    Response: Requirements governing audits to determine substantial 
compliance with title IV-D requirements under section 452(a)(4) of the 
Act were placed back in part 305 by final regulations governing 
incentives and penalties published December 27, 2000 (see OCSE-AT-01-
01). Therefore, the reference to part 305 is accurate.

Safeguarding Information--Sec.  303.21

    1. Comment: Commenters expressed varied opinions regarding 
removing, retaining or revising this regulation. One commenter 
recommended that we retain this regulation as the following will be 
lost: (1) Paragraphs (a)(1) and (3) limit the sharing of information; 
(2) paragraph (a)(4) clarifies that information may be shared with 
officials charged with investigating physical, mental, or sexual abuse; 
and (3) paragraph (b) prohibits disclosure of case specific identifying 
information to legislative bodies. The new language of section 454(26) 
of the Act is not as precise and does not clarify what would be 
unauthorized. Moreover, the commenter noted that Sec.  307.13 deals 
only with information in the States' computerized databases. The 
commenter believes it is important to retain privacy rights of IV-D 
participants.
    Another commenter agreed that the regulation was inconsistent with 
PRWORA and should be deleted or substantially revised. The commenter 
encourages the Secretary to issue an updated regulation to replace this 
regulation as soon as possible. States' access to information has been 
vastly expanded under PRWORA and States need guidance on use of data 
and disclosure of information, including dealing with the family 
violence indicator.
    A third commenter indicated that eliminating paragraph (b) while 
OCSE works on its new regulation might result in broader disclosure to 
legislative bodies during this time of intensive study of TANF and 
child support enforcement programs.
    Response: We are maintaining our decision to delete this regulation 
because it was not responsive to the post-welfare reform environment. 
It protected information only on applicants and recipients of IV-D 
services. It did not protect information that IV-D agencies have on 
noncustodial parents and children, nor did it protect information that 
IV-D agencies now have on persons who may not be involved in a IV-D 
case, such as new hires, wage earners and individuals receiving 
unemployment compensation. Section 454(26) of the Act requires States 
to have safeguards in effect to protect all confidential information 
handled by the State agency. It further prohibits release of 
information under certain circumstances such as when there is a 
protective order in place. The regulation allowed broader disclosure of 
some information that is no longer permitted under the Act. Release of 
personal information to legislative bodies is not permitted under 
section 454(26) of the Act, which requires States to protect 
confidential information in their possession.
    A work group of State and Federal members met in 2001 to discuss 
the types of issues that need to be addressed in publication of a 
proposed replacement regulation, which is now under development. We 
recognize the importance of protecting the privacy of data handled by 
IV-D agencies. Despite the deletion of Sec.  303.21, certain 
safeguarding requirements remain in effect that cover States' automated 
systems. For example, final rules issued August 3, 1998 (63 FR 44795) 
on Statewide automated systems address safeguarding of information 
contained in the States' child support databases.

Securing and Enforcing Medical Support Obligations--Sec.  303.31

    1. Comment: Several commenters asked whether the IV-D agency is 
required to enforce an order which requires the noncustodial parent to

[[Page 25300]]

provide health insurance in instances where the custodial parent 
already provides such coverage and does not want the noncustodial 
parent's coverage. One of the commenters suggested allowing a waiver of 
the requirement to enforce the noncustodial parent's coverage. The 
commenter suggested that the waiver could include petitioning the court 
or administrative authority to include the custodial parent's coverage 
in the order, and pursuing coverage from the noncustodial parent only 
if the custodial parent does not have coverage other than Medicaid.
    Response: If a support order requires a noncustodial parent to 
provide health insurance coverage, the only way for a IV-D agency to 
avoid enforcing that order is a change to the order. There is no 
authority under sections 466(a)(19) or 452(f) of the Act to waive the 
requirement to enforce noncustodial parents' health insurance coverage. 
Section 452(f) requires the Secretary of HHS to issue regulations 
requiring IV-D agencies to include medical support as part of any child 
support order and to enforce medical support whenever health care 
coverage is available to the noncustodial parent at a reasonable cost. 
Section 466(a)(19) of the Act requires the use of the National Medical 
Support Notice (NMSN) to enforce an order that contains a requirement 
for health care coverage. Unless the order allows for alternative 
coverage, a IV-D agency must send the NMSN to the noncustodial parent's 
employer, if known, as required in section 466(a)(19) of the Act and 
Sec.  303.32, published December 27, 2000 and effective March 27, 2001 
(see OCSE-AT-01-02).
    2. Comment: Two commenters indicated that regulations should assure 
that all orders include health insurance, consistent with section 
452(f) of the Act. Another commenter recommended that we revise 
paragraphs (b)(1), (2), and (4) to delete any references to 
``petition'', just as CSPIA deleted the reference to ``petition'' in 
section 452(f) of the Act.
    Response: We agree that CSPIA required the Secretary, in section 
452(f), to issue regulations requiring IV-D agencies to include medical 
support as part of any child support order. Separate regulations will 
be issued that offer the public an opportunity for comment.

Requests by the State Parent Locator Service (SPLS) for Information 
From the Federal Parent Locator Service (FPLS)--Sec.  303.70

    1. Comment: One commenter suggested we revise paragraph (d)(1) by 
replacing ``to obtain information or to facilitate the discovery of any 
individual'' with ``to obtain information on, or to facilitate the 
discovery of, the location of any individual''. The commenter noted 
that paragraph (d)(1) does not track section 453(a)(3) of the Act which 
states that the FPLS may be used for the purpose of enforcing any 
Federal or State law with respect to the unlawful taking or restraint 
of a child. The commenter expressed concern if the change to paragraph 
(e)(1)(i), which governs fees for use of the FPLS, means that IV-D 
agencies will be charged fees for cases other than just non-IV-A, 
locate only, and parental kidnapping/child custody cases. The commenter 
indicated that IV-D agencies should not have to pay fees for use of the 
FPLS in IV-A cases. Finally, the commenter proposed that the paragraph 
(e)(1)(iii) cite should be to section 453(k)(3) of the Act, not to 
section 453(k) of the Act.
    Response: We did not make the revision described in the first 
comment. While the regulation language is not exact, we believe it 
generally covers the requirement. We agree with the commenter's second 
comment and have added ``Federal or'' before ``State'' for consistency 
with the statute. Regarding the commenter's third concern about being 
charged additional fees for use of the FPLS, PRWORA changed the 
requirements on FPLS fees and now States must pay for all information 
received from the FPLS pursuant to section 453(k)(3) of the Act. (See 
DCL-00-73, dated June 28, 2000, which explains OCSE's charges to States 
for using the FPLS.) We agree with the commenter's final point and have 
revised paragraph (e)(1)(iii) by citing section 453(k)(3) of the Act.

Requests for Collection of Past-Due Support by Federal Tax Refund 
Offset--Sec.  303.72

    1. Comment: One commenter noted three instances of ``Secretary of 
the Treasury'' that should be replaced by ``Secretary of the U. S. 
Treasury''.
    Response: We agree with the comment and made this change throughout 
the section. In addition, we are making a technical change by revising 
``an title IV-A'' to ``a title IV-A'' in paragraph (a)(3)(iv). Finally, 
paragraph (h)(3) is amended to delete the language ``fSecretary of the 
U.S. Treasuryt'' which was included in the paragraph in error.

Procedures for Income Withholding--Sec.  303.100

    1. Comment: Several commenters noted that some references to 
``wages'' have not been replaced by ``income''.
    Response: We will make these changes in paragraphs (e)(1)(i) and 
(g).
    2. Comment: One commenter noted that the preamble does not explain 
that paragraphs (h)(5)(i) through (iii), (6) and (7) have been deleted 
or why.
    Response: The interim final rule explained that former paragraph 
(h) was redesignated as paragraph (f) and revised to provide updated 
standards for program operations for both the traditional two-state 
interstate income withholding remedy and UIFSA's new one-state direct 
income withholding remedy. Former paragraphs (h)(5)(i)-(iii) were 
deleted because PRWORA revised section 466(b)(4) of the Act to remove 
the requirements for an advance notice in cases of initiated income 
withholding. We did not intend to delete former paragraphs (h)(6) and 
(7), which govern due process and which State law governs in interstate 
withholding situations. Since these paragraphs were inadvertently 
omitted in the interim final rule, they are reinstated in this 
regulation and redesignated as paragraphs (f)(4) and (5).
    3. Comment: One commenter noted that throughout this section the 
term ``wages'' is replaced with the term ``income'', but the term 
``employer'' was not similarly expanded upon. The continued use of the 
term ``employer'' seems to limit the impact of the requirements 
provided in this section to income derived only from employers.
    Response: Use of the term ``employer'' is consistent with its use 
in section 466(b) of the Act.
    4. Comment: One commenter asked whether the 14-day implementation 
time frame has been eliminated in paragraph (e)(1)(ix). If it has been 
eliminated, can State laws provide a time frame for employers to 
implement income withholding?
    Response: The 14-day time frame was tied to the advance notice to 
the noncustodial parent that was eliminated by PRWORA. Section 
466(b)(6)(A)(i) of the Act and Sec.  303.100(e)(1)(ix) state that 
employers must pay the withheld amount to the SDU within 7 business 
days after the date the amount would have been paid or credited to the 
employee.
    5. Comment: One commenter noted that Basic Housing Allowances/
separate rations are not taxable and should not be included in income 
withholding; only basic pay should be included.
    Response: Our regulations at Sec.  302.56 say that a State shall 
have procedures for setting guidelines and that the guidelines must 
take into consideration all earnings and income of the noncustodial 
parent. Basic housing allowances and rations are not excluded from the 
definition of income subject to

[[Page 25301]]

withholding under section 466(b)(8) of the Act.
    6. Comment: Two commenters pointed out a conflict between Sec.  
303.100(e)(2) and (3) that require income withholding notices to 
employers to be issued within 15 calendar days while Federal law at 
section 454A(g)(1)(A)(i) of the Act requires notices to be sent to 
employers within 2 business days. This commenter asked whether there 
are actually 2 different requirements.
    Response: Sections 453A(g)(1) of the Act requires the State to 
transmit an income withholding notice to an employer within 2 business 
days after the date information regarding a newly hired employee is 
entered into the State Directory of New Hires. Section 454A(g)(1)(A)(i) 
of the Act and implementing regulations at Sec.  307.11(c)(1)(i) 
require the statewide automated system to transmit income withholding 
orders and notices to employers and other debtors 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. 
Under these provisions, the 2-day time frame for sending a withholding 
order or notice applies only to situations in which the State Directory 
of New Hires or the statewide automated system receives notice of the 
new hire or income source subject to withholding. We have revised 
paragraphs (e)(2) and (3) to include reference to the 2-day timeframe 
for sending the withholding notice as described above and retained the 
15-day time frame in the current regulation for other situations where 
notification is not received by the State Directory of New Hires or the 
automated system.
    7. Comment: One commenter noted that the reference to ``paragraph 
(f)(1) of this section'' in paragraph (e)(4) is in error. The correct 
reference should be to ``paragraph (e)(1)''.
    Response: We agree with the commenter and in response to this 
technical error have made the correction to paragraph (e)(4) by 
replacing the citation ``paragraph (f)(1) of this section'' with 
``paragraph (e)(1) of this section''.

Expedited Processes--Sec.  303.101

    1. Comment: A commenter recommended that paragraph (b)(2) be 
revised to reference review and adjustment timeframes at Sec.  
303.8(e).
    Response: As currently written, Sec.  303.101 provides for 
expedited processes for establishing and enforcing support orders. The 
commenter suggests a modification to this section to add expedited 
review and adjustment of orders. We consider this to be a substantive 
change that is not appropriate for this technical rulemaking. We will 
consider this comment in any future revision to this section.
    We are making a technical correction in paragraph (a) of this 
section by inserting a period after ``Definition''.

Collection of Overdue Support by State Income Tax Refund Offset--Sec.  
303.102

    1. Comment: One commenter noted in Sec.  303.102(a)(1) the word 
``or'' needs to be inserted following ``section 408(a)(3) of the Act''.
    Response: We agree with this comment. In Sec.  303.102(a)(1), we 
are making a technical correction by inserting the word ``or'' 
following ``section 408(a)(3) of the Act''. In addition, we are making 
an editorial change to the language of paragraph (g)(1) because, as it 
currently reads, subparagraph (ii) is a sentence fragment with no 
subject.

Procedures for the Imposition of Liens against Real and Personal 
Property--Sec.  303.103

    1. Comment: One commenter suggested that Federal guidance regarding 
implementing lien requirements is necessary.
    Response: To clarify the issue of direct imposition of liens across 
State lines, we issued OCSE-PIQ-99-06 on August 16, 1999. We believe 
further guidance in this area is more appropriate through development 
of technical assistance publications and examples of model practices 
used by States. Current information on State lien and levy laws may be 
found on the OCSE Web site at ``www.acf.dhhs.gov/programs/cse''. Click 
on ``Online Interstate Roster and Referral Guide (IRG)'', then click on 
a particular State, and then click on ``View State FIDM Information'' 
for a matrix of lien information specific to each State.

Availability and Rate of Federal Financial Participation--Sec.  304.20

    1. Comment: One commenter suggested that paragraph (b)(1)(iii)(C) 
be revised to include ``Indian Tribes or Tribal Organizations'' as 
added in Sec.  302.34. Section 304.20(b)(1)(iii)(C) cross-references 
Sec.  302.34.
    Response: We agree with the commenter. We have revised Sec.  
304.20(b)(1)(iii)(C) to read: ``Cooperation with courts, law 
enforcement officials, and Indian Tribes or Tribal organizations 
pursuant to Sec.  302.34 of this chapter.''
    2. Comment: One commenter indicated that paragraphs (b)(1)(viii)(C) 
and (ix)(C) were removed because the IV-A agency no longer determines 
cooperation. The commenter suggests that these paragraphs be reinstated 
and revised, as there is still an exchange of information between IV-D 
and IV-A about cooperation determinations made by the IV-D agency. 
Section 304.20(b)(1)(ix) prior paragraph (D) was removed for the same 
reasons and it should also be reinstated and revised.
    Response: In Sec.  304.20, paragraphs (b)(1)(viii)(C) and 
(b)(1)(ix)(C) were removed because of the transfer of responsibility 
for determining cooperation from the IV-A agency and the Medicaid 
agency to the IV-D agency. Therefore, agreements are no longer 
necessary. Any activity associated with the IV-D agency's determination 
of cooperation under section 454(29) of the Act is an allowable cost 
under the IV-D program.

Determination of Federal Share of Collections--Sec.  304.26

    1. Comment: One commenter indicated that regulations for the 
determination of the Federal share of collections are confusing. The 
commenter recommends deleting ``to the extent of its participation in 
the financing of the title IV-A and title IV-E payments'' in paragraph 
(a) and indicating that the Federal share be determined pursuant to 
section 457(c)(2) of the Act.
    Response: We agree and revised paragraph (a) by deleting the 
confusing language and adding that, in computing the Federal share of 
support collections for assistance made under titles IV-A and IV-E, the 
State must use the Federal medical assistance percentage (FMAP) in 
effect for the fiscal year in which the amount is distributed, as 
defined in section 457(c)(3) of the Act.
    2. Comment: One commenter notes that the 4th, 5th and 6th sentences 
of the preamble description are inaccurate and should be replaced with: 
``Section 457(c)(3)(A) defines the FMAP rate to be 75 percent in the 
case of Puerto Rico, the Virgin Islands, Guam and American Samoa. 
Section 457(c)(3)(B) specifies that the FMAP rates as defined at 
section 1905(b) of the Act be used for any other State.'' The commenter 
also suggests that we revise paragraph (a) by removing ``to the extent 
of its participation in the financing of the title IV-A and title IV-E 
payment'' and add ``the Federal share of the support collections'' in 
its place and revise the next sentence to read: ``In computing the 
Federal share of support collections for assistance made under titles 
IV-A

[[Page 25302]]

and IV-E, the State shall use the Federal medical assistance percentage 
(FMAP) in effect for the fiscal year in which the amount is distributed 
as defined in sections 457(c)(3) and 1905(b) of the Act.''
    Response: We agree with the commenter and have included these 
changes with minor editorial modifications. We are revising paragraph 
(a) of this section to be consistent with the revised language of 
sections 457(c)(2) and (3) of the Act that specifies the use of the 
Federal Medical Assistance Percentage (FMAP) formula in calculating the 
Federal share of child support collections. Section 457(c)(2) specifies 
that the Federal share of collections is the portion of the amount 
collected resulting from the application of the FMAP in effect for the 
fiscal year in which the amount is distributed. Section 457(c)(3)(A) 
defines the FMAP rate to be 75 percent for Puerto Rico, the Virgin 
Islands, Guam, and America Samoa. Section 457(c)(3)(B) specifies that 
the FMAP rates for any other State are as defined in section 1905(b) of 
the Act, as in effect on September 30, 1995.

Repayment of Federal Funds by Installments--Sec.  304.40

    1. Comment: One commenter suggests that in the last sentence of 
paragraph (b)(3), we delete ``Quarterly Statement of Expenditures (SRA-
OA-41) reports'' and replace it with ``Quarterly Report of Expenditures 
and Estimates''.
    Response: We agree with the commenter and are updating the 
reference to the form since the name of the form has changed. We are 
amending paragraph (b)(3) of this section by removing ``Quarterly 
Statement of Expenditures (SRA-OA-41) reports'' and replacing it with 
``Quarterly Report of Expenditures and Estimates''.

Definitions--307.1

    In paragraph (c) we are replacing ``non-AFDC'' with ``non-IV-A'' to 
eliminate the obsolete reference to the old AFDC program.

Functional Requirements for Computerized Support Enforcement Systems in 
Operation by October 1, 1997--Sec.  307.10

    We have made technical corrections in paragraphs (b)(10) and 
(b)(14)(ii) and (iii) to correct two typographical errors and change 
``AFDC'' to ``IV-A''.

Paperwork Reduction Act

    Information collection requirements of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3507 (d)) were fulfilled for this final rule. All 
required State plan preprints were approved by OMB on March 5, 2003 
under OMB No. 0970-0017. Also new forms were approved as OMB Nos. 0970-
0085 on December 5, 2000 (Standard Interstate Forms), 0970-0152 on 
March 27, 2001 (Lien and Subpoena Forms), and 0970-0154 on March 7, 
2001 (Income Withholding Form). Technical corrections were made to the 
Lien Form, which was reissued in May 2002, but no new information 
collection was required by the change. An additional information 
collection burden consisted of updating the State plan by removing the 
State plan preprint page for Section 3.12, Payment of Support through 
the IV-D agency or Other Entity. This was required because 45 CFR 
302.57, Procedures for payment of support through the IV-D agency or 
other entity, was removed by the interim final rule. OMB approved this 
information collection burden on September 13, 1999 under OMB No. 0970-
0017. Otherwise, this rule does not require information collection 
activities, and, therefore, no additional approvals are necessary under 
the Paperwork Reduction Act.

Regulatory Flexibility Analysis

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

Regulatory Impact Analysis

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

Unfunded Mandates Reform Act of 1995

    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 governments 
that may be significantly or uniquely impacted by the final rule.
    We have determined that the final 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 governments.

Congressional Review

    This final rule is not a major rule as defined in 5 U.S.C. chapter 
8.

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 regulations may affect family well being. If the agency's 
determination is affirmative, then the agency must prepare an impact 
assessment addressing seven criteria specified in the law. These 
regulations will not have an impact on family well being as defined in 
the legislation. This regulation merely aligns existing Federal 
regulations with Federal legislation and, like the Federal legislation, 
will positively impact families needing support.

Executive Order 13132

    Executive Order 13132 on Federalism applies to policies that have 
Federalism implications, defined as ``regulations, legislative comments 
or proposed legislation, and other policy statements or actions that 
have substantial direct effects on the States, or on the distributions 
of power and responsibilities among the various levels of government''. 
This rule does not have Federalism implications for State or local 
governments as defined in the Executive Order.

List of Subjects

45 CFR Part 301

    Child support, Grant programs/social programs.

45 CFR Part 302

    Child support, Grant programs/social programs, Reporting and record 
keeping requirements.

[[Page 25303]]

45 CFR Parts 303 and 304

    Child support, Grant programs/social programs, Reporting and record 
keeping requirements.

45 CFR Part 307

    Child support, Computer technology, Grant programs/social programs, 
Reporting and record keeping requirements.


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

    Dated: October 28, 2002.
Wade F. Horn,
Assistant Secretary for Children and Families.
    Approved: January 30, 2003.
Tommy G. Thompson,
Secretary.

0
For the reasons discussed above, we are adopting the interim final rule 
published at 64 FR 6237, February 9, 1999, amending 45 CFR parts 301, 
302, 303, 304, and 307 as a final rule with the following changes:

PART 301--STATE PLAN APPROVAL AND GRANT PROCEDURES

0
1. The authority citation for part 301 continues to read as follows:

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


Sec.  301.1  [Amended]

0
2. Sec.  301.1 is amended as follows:
    (a) In the definition ``Non-title IV-A Medicaid recipient'', the 
words ``Non-title IV-A'' in the heading are revised to read ``Non-IV-
A'';
    (b) The definition for ``Overdue support'' is amended by removing 
``absent parent's'' and adding ``noncustodial parent's'' in its place; 
and
    (c) The definition for ``State PLS'' is amended by removing 
``absent'' before ``parents''.

PART 302--STATE PLAN REQUIREMENTS

0
3. The authority citation for part 302 is revised to read as follows:

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


Sec.  302.31  [Amended]

0
4. In Sec.  302.31, reserved paragraph (a)(3) is removed and paragraph 
(a)(4) is redesignated as paragraph (a)(3).


Sec.  302.32  [Amended]

0
5. In Sec.  302.32:
0
a. Paragraph (b)(1) is amended by revising ``initial point'' to read 
``date'';
0
b. Paragraph (b)(2)(ii) is amended by revising ``initial receipt in the 
State'' to read ``receipt by the SDU'';
0
c. Paragraph (b)(2)(iii) is amended by revising ``initially received in 
the State'' to read ``received by the SDU''; and
0
d. Paragraph (b)(3)(i) is amended by revising ``initial receipt in the 
State'' to read ``receipt by the SDU''.


Sec.  302.35  [Amended]

0
6. In Sec.  302.35:
0
a. Paragraph (c)(2) is amended by revising ``an noncustodial parent'' 
to read ``a noncustodial parent and by revising ``agency'' to read 
``agent''; and
0
b. Paragraph (c)(4) is amended by removing ``, visitation'' and adding 
``or visitation'' after ``custody''.


Sec.  302.50  Assignment of rights to support.

0
7. In Sec.  302.50:
0
a. The heading is revised;
0
b. Paragraph (b)(2) is amended by removing ``; or'' at the end of the 
paragraph and adding a ``.''.


Sec.  302.51  [Amended]

0
8. In Sec.  302.51, paragraph (a)(3) is amended by revising ``section 
457(a)(2)(iv) of the Act'' to read ``section 457(a)(2)(B)(iv) of the 
Act''.


Sec.  302.54  [Amended]

0
9. In Sec.  302.54:
0
a. In paragraph (a)(1), the citation ``paragraph (c)'' is removed and 
``paragraph (b)'' is added in its place;
0
b. In paragraph (b)(1)(ii), ``paragraph (b)(2)'' is removed and 
``paragraph (a)'' is added in its place; and
0
c. In paragraph (b)(2), ``(b)(1)'' is removed and ``(a)(1)'' is added 
in its place and ``(b)(2)'' is removed and ``(a)(2)'' is added in its 
place.


Sec.  302.65  [Amended]

0
10. In Sec.  302.65, paragraph (c)(7) is amended by removing 
``critieria'' and adding ``criteria'' in its place.


Sec.  302.70  [Amended]

0
11. In Sec.  302.70:
0
a. Paragraph (a)(4) is amended by removing ``Sec.  303.103 of this 
chapter'';
0
b. Paragraph (a)(5)(ii) is amended by removing ``under Sec. Sec.  
232.40 through 232.49 of this title'' or 42 CFR 433.147'' and adding 
``under section 454(29) of the Act'';
0
c. Paragraph (a)(6) is amended by removing ``an noncustodial parent'' 
and adding ``a noncustodial parent'';
0
d. Paragraph (a)(7) is amended by removing ``an noncustodial parent'' 
and adding ``a noncustodial parent'' in its place, and by removing ``, 
in accordance with Sec.  303.105 of this chapter'';
0
e. Paragraph (a)(8) is amended by removing ``wages'' and adding 
``income'' in its place;
0
f. Paragraph (c) is amended by removing ``Sec. Sec.  303.100 through 
303.105 of this chapter'' and adding ``Sec. Sec.  303.100 through 
303.102 and Sec.  303.104 of this chapter'' in its place.


Sec.  302.75  [Amended]

0
12. In Sec.  302.75, paragraph (b)(6) is amended by removing ``Sec.  
305.50'' and adding ``Sec.  304.50'' in its place.

PART 303--STANDARDS FOR PROGRAM OPERATIONS

0
13. The authority citation for part 303 continues to read as follows:

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


Sec.  303.7  [Amended]

0
14. In Sec.  303.7:
0
a. Paragraph (b)(1) is revised to read as follows:
* * * * *
    (b) * * *
0
(1) Use its long arm statute to establish paternity, when appropriate.;
* * * * *
0
b. Paragraph (b)(2) is amended by revising ``wage'' to read ``income'';
0
c. Paragraph (c)(7)(ii) is amended by removing ``Sec. Sec.  303.4 and 
303.101 of this part and Sec.  303.31 of this chapter'' and adding 
``Sec. Sec.  303.4, 303.31 and 303.101 of this part'' in its place;
0
d. Paragraph (c)(7)(iii) is amended by removing ``Sec. Sec.  303.6 and 
303.100 through 303.102 and 303.104 of this part and Sec.  303.31 of 
this chapter'' and adding ``Sec. Sec.  303.6, 303.31, 303.100 through 
303.102, and 303.104 of this part'' in its place;

0
15. Section 303.8 is revised to read as follows:


Sec.  303.8  Review and adjustment of child support orders.

    (a) Definition. For purposes of this section, Parent includes any 
custodial parent or noncustodial parent (or for purposes of requesting 
a review, any other person or entity who may have standing to request 
an adjustment to the child support order).
    (b) Required procedures. Pursuant to section 466(a)(10) of the Act, 
when providing services under this chapter:
    (1) The State must have procedures under which, every 3 years (or 
such shorter cycle as the State may determine), upon the request of 
either parent, or, if there is an assignment under part A, upon the 
request of the State agency under the State plan or of either parent, 
the State shall with respect to a support order being enforced under 
this part, taking into account the best interests of the child 
involved:

[[Page 25304]]

    (i) Review and, if appropriate, adjust the order in accordance with 
the guidelines established pursuant to section 467(a) of the Act if the 
amount of the child support award under the order differs from the 
amount that would be awarded in accordance with the guidelines;
    (ii) Apply a cost-of-living adjustment to the order in accordance 
with a formula developed by the State; or
    (iii) Use automated methods (including automated comparisons with 
wage or State income tax data) to identify orders eligible for review, 
conduct the review, identify orders eligible for adjustment, and apply 
the appropriate adjustment to the orders eligible for adjustment under 
any threshold that may be established by the State.
    (2) If the State elects to conduct the review under paragraph 
(b)(1)(ii) or (iii) of this section, the State must have procedures 
which permit either party to contest the adjustment, within 30 days 
after the date of the notice of the adjustment, by making a request for 
review and, if appropriate, adjustment of the order in accordance with 
the child support guidelines established pursuant to section 467(a) of 
the Act.
    (3) If the State conducts a guideline review under paragraph 
(b)(1)(i) of this section:
    (i) Review means an objective evaluation, conducted through a 
proceeding before a court, quasi-judicial process, or administrative 
body or agency, of information necessary for application of the State's 
guidelines for support to determine:
    (A) The appropriate support award amount; and
    (B) The need to provide for the child's health care needs in the 
order through health insurance coverage or other means.
    (ii) Adjustment applies only to the child support provisions of the 
order, and means:
    (A) An upward or downward change in the amount of child support 
based upon an application of State guidelines for setting and adjusting 
child support awards; and/or
    (B) Provision for the child's health care needs, through health 
insurance coverage or other means.
    (4) The State must have procedures which provide that any 
adjustment under paragraph (b)(1)(i) of this section shall be made 
without a requirement for proof or showing of a change in 
circumstances.
    (5) The State must have procedures under which, in the case of a 
request for a review, and if appropriate, an adjustment outside the 3-
year cycle (or such shorter cycle as the State may determine) under 
paragraph (b)(1) of this section, the State shall review and, if the 
requesting party demonstrates a substantial change in circumstances, 
adjust the order in accordance with the guidelines established pursuant 
to section 467(a) of the Act.
    (6) The State must provide notice not less than once every 3 years 
to the parents subject to the order informing the parents of their 
right to request the State to review and, if appropriate, adjust the 
order consistent with this section. The notice must specify the place 
and manner in which the request should be made. The initial notice may 
be included in the order.
    (c) Standard for adequate grounds. The State may establish a 
reasonable quantitative standard based upon either a fixed dollar 
amount or percentage, or both, as a basis for determining whether an 
inconsistency between the existent child support award amount and the 
amount of support determined as a result of a review using automated 
methods under paragraph (b)(1)(iii) of this section is adequate grounds 
for petitioning for adjustment of the order.
    (d) Health care needs must be adequate basis. The need to provide 
for the child's health care needs in the order, through health 
insurance or other means, must be an adequate basis under State law to 
initiate an adjustment of an order, regardless of whether an adjustment 
in the amount of child support is necessary. In no event shall the 
eligibility for or receipt of Medicaid be considered to meet the need 
to provide for the child's health care needs in the order.
    (e) Timeframes for review and adjustment. Within 180 calendar days 
of receiving a request for a review or locating the non-requesting 
parent, whichever occurs later, a State must: Conduct a review of the 
order and adjust the order or determine that the order should not be 
adjusted, in accordance with this section.
    (f) Interstate review and adjustment. (1) In interstate cases, the 
State with legal authority to adjust the order must conduct the review 
and adjust the order pursuant to this section.
    (2) The applicable laws and procedures for review and adjustment of 
child support orders, including the State guidelines for setting child 
support awards, established in accordance with Sec.  302.56 of this 
chapter, are those of the State in which the review and adjustment, or 
determination that there be no adjustment, takes place.


Sec.  303.15  [Amended]

0
16. In Sec.  303.15:
0
a. The section heading is amended by adding ``or visitation'' after 
``custody''.
0
b. Paragraph (a)(1)(i) is amended by removing the period at the end and 
adding a semicolon.
0
c. Paragraph (a)(1)(ii) is amended by removing ``visistation'' and 
adding ``visitation'', and by adding ``or'' after ``;''.


Sec.  303.20  [Amended]

0
17. In Sec.  303.20:
0
a. Paragraphs (c)(3), (4) and (5) are amended by removing ``an 
noncustodial parent'' and adding ``a noncustodial parent'' in its 
place; and
0
b. Paragraph (e)(3) is amended by removing ``pursuant to parts 220, 222 
and 226 of this title or carried out''.


Sec.  303.31  [Amended]

0
18. In Sec.  303.31, paragraph (a)(2) is amended by removing ``an 
noncustodial parent'' and adding ``a noncustodial parent'' in its 
place.


Sec.  303.70  [Amended]

0
19. In Sec.  303.70:
0
a. Paragraph (d)(1) is amended by adding ``Federal or'' after ``in 
accordance with section 453(a)(3) of the Act for enforcing a''; and
0
b. Paragraph (e)(1)(iii) is amended by removing ``453(k)'' and adding 
``453(k)(3)'' in its place.


Sec.  303.72  [Amended]

0
20. In Sec.  303.72:
0
a. Paragraph (a)(3)(iv) is amended by removing ``an title IV-A'' and 
adding ``a title IV-A'' in its place;
0
b. Paragraphs (a)(6), (c)(2), (c)(4), (h)(5) and (h)(6)(i) are amended 
by removing ``Secretary of the Treasury'' and adding ``Secretary of the 
U.S. Treasury'' in its place;
0
c. Paragraph (e)(1) and (f)(1) are amended by revising ``an 
noncustodial parent'' to read ``a noncustodial parent''; and
0
d. Paragraph (h)(3) is amended by removing ``fSecretary of the U.S. 
Treasuryt''.


Sec.  303.73  [Amended]

0
21. In Sec.  303.73, ``an noncustodial parent'' is revised to read ``a 
noncustodial parent'' and ``IV7-D'' is revised to read ``IV-D''.


0
22. In Sec.  303.100:
0
a. Paragraphs (b)(1) and (e)(1)(v) are amended by revising ``an 
noncustodial parent'' to read ``a noncustodial parent'';
0
b. Paragraph (b)(1)(i) is amended by revising ``absent'' to read 
``noncustodial'' each time it appears;
0
c. Paragraphs (e)(1)(i) and (g) are amended by removing ``wages'' and 
adding ``income'' in its place;

[[Page 25305]]

0
d. Paragraph (e)(2) is amended by removing ``wage'';
0
e. Paragraphs (e)(2) and (e)(3) are amended by removing each occurrence 
of ``15 calendar days'' and adding ``2 business days of the date the 
State's computerized support enforcement system receives notice of 
income and income source from a court, another State, an employer, the 
Federal Parent Locator Service, or another source recognized by the 
State, or the date information regarding a newly hired employee is 
entered into the State Directory of New Hires, or if information is not 
received by the State's computerized support enforcement system or its 
State Directory of New Hires, within 15 calendar days'' in its place;
0
f. Paragraph (e)(4) is amended by removing ``paragraph (f)(1) of this 
section'' and adding ``paragraph (e)(1) of this section'' in its place; 
and
0
g. Adding new paragraphs (f)(4) and (5) to read as follows:


Sec.  303.100  Procedures for income withholding.

* * * * *
    (f) * * *
    (4) The withholding must be carried out in full compliance with all 
procedural due process requirements of the State in which the 
noncustodial parent is employed.
    (5) Except with respect to when withholding must be implemented 
which is controlled by the State where the support order was entered, 
the law and procedures of the State in which the noncustodial parent is 
employed shall apply.
* * * * *


Sec.  303.101  [Amended]

0
23. Section 303.101(a) is amended by adding a period after 
``Definition''.


Sec.  303.102  [Amended]

0
24. In Sec.  303.102:
0
a. Paragraph (a)(1) is amended by adding ``or'' following ``section 
408(a)(3) of the Act'';
0
b. Paragraph (c)(1) is amended by revising ``an noncustodial parent'' 
to read ``a noncustodial parent''; and
0
c. Paragraphs (g)(1), introductory text, and (g)(1)(i) are revised to 
read as follows:


Sec.  303.102  Collection of overdue support by State income tax refund 
offset.

* * * * *
    (g) Distribution of collections. (1) The State must distribute 
collections received as a result of State income tax refund offset:
    (i) In accordance with section 457 of the Act and Sec. Sec.  302.51 
and 302.52 of this chapter; and
* * * * *

PART 304--FEDERAL FINANCIAL PARTICIPATION

0
25. 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]

0
26. In Sec.  304.20:
0
a. Paragraph (b)(1)(iii)(C) is amended by adding ``, and Indian Tribes 
or Tribal organizations'' after ``officials''; and
0
b. Paragraph (b)(5)(iv) is amended by revising ``an noncustodial 
parent'' to read ``a noncustodial parent''.


0
27. Section 304.26(a) is revised to read as follows:


Sec.  304.26  Determination of Federal share of collections.

    (a) From the amounts of support collected by the State and retained 
as reimbursement for title IV-A payments and foster care maintenance 
payments under title IV-E, the State shall reimburse the Federal 
government the Federal share of the support collections. In computing 
the Federal share of support collections for assistance payments made 
under titles IV-A and IV-E, the State shall use the Federal medical 
assistance percentage in effect for the fiscal year in which the amount 
is distributed. The Federal medical assistance percentage is:
    (1) 75 percent for Puerto Rico, the Virgin Islands, Guam, and 
American Samoa; and
    (2) As defined in section 1905(b) of the Act as in effect on 
September 30, 1995, for any other State.
* * * * *


Sec.  304.40  [Amended]

0
28. In Sec.  304.40, paragraph (b)(3) is amended by removing the 
phrase, ``Quarterly Statement of Expenditures (SRA-OA-41) reports'' 
from the last sentence and adding ``Quarterly Report of Expenditures 
and Estimates'' in its place.

PART 307--COMPUTERIZED SUPPORT ENFORCEMENT SYSTEMS

0
29. The authority citation for part 307 continues to read as follows:

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


Sec.  307.1  [Amended]

0
30. Section 307.1 is amended in paragraph (c) by revising ``non-AFDC'' 
to read ``non-IV-A''.


Sec.  307.10  [Amended]

0
31. In Sec.  307.10:
0
a. In paragraph (b)(10), ``AFDC'' is revised to read ``IV-A'';
0
b. In paragraph (b)(14)(ii), ``ant'' is revised to read ``and''; and
0
c. In paragraph (b)(14)(iii), ``VI-D'' is revised to read ``IV-D''.

[FR Doc. 03-11223 Filed 5-9-03; 8:45 am]
BILLING CODE 4184-01-U