[Federal Register Volume 79, Number 221 (Monday, November 17, 2014)]
[Proposed Rules]
[Pages 68548-68587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-26822]
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Vol. 79
Monday,
No. 221
November 17, 2014
Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
42 CFR Part 433
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Administration for Children and Families
45 CFR Parts 301, 302, 303, et al.
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Flexibility, Efficiency, and Modernization in Child Support
Enforcement Programs; Proposed Rule
Federal Register / Vol. 79 , No. 221 / Monday, November 17, 2014 /
Proposed Rules
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 433
[CMS-2343-P]
RIN 0938-AR92
Administration for Children and Families
45 CFR Parts 301, 302, 303, 304, 305, 307, 308, and 309
RIN 0970-AC50
Flexibility, Efficiency, and Modernization in Child Support
Enforcement Programs
AGENCY: Office of Child Support Enforcement (OCSE), Administration for
Children and Families (ACF) and the Centers for Medicare & Medicaid
Services (CMS), Department of Health and Human Services (HHS).
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: This NPRM is intended to carry out the President's directives
in Executive Order 13563: Improving Regulation and Regulatory Review.
The NPRM proposes revisions to make Child Support Enforcement program
operations and enforcement procedures more flexible, more effective,
and more efficient by recognizing the strength of existing state
enforcement programs, advancements in technology that can enable
improved collection rates, and the move toward electronic communication
and document management. This NPRM proposes to improve and simplify
program operations, and remove outmoded limitations to program
innovations to better serve families. In addition, changes are proposed
to clarify and correct technical provisions in existing regulations.
DATES: Consideration will be given to comments received by January 16,
2015.
ADDRESSES: You may transmit written comments electronically via the
Internet at http://www.regulations.gov. This approach is our preferred
method for receiving comments. To download an electronic version of the
rule, you may access http://www.regulations.gov and follow the provided
instructions.
Additionally, you may send comments via United States Postal
Service to: Office of Child Support Enforcement, Administration for
Children and Families, Department of Health and Human Services,
Attention: Director, Division of Policy, Mail Stop: OCSE/DP, 370
L'Enfant Promenade SW., Washington, DC 20447.
You also may send comments via overnight service to: Office of
Child Support Enforcement, Administration for Children and Families,
Department of Health and Human Services, Attention: Director, Policy
Division, Mail Stop: OCSE/DP, 901 D Street SW., Washington, DC 20447.
You also may submit comments by facsimile to (202) 260-5980.
Comments will be available for public inspection. To schedule an
appointment, please call (202) 401-9271.
FOR FURTHER INFORMATION CONTACT: Anne Miller, Division of Policy, OCSE,
telephone (202) 401-1467, email: [email protected] or Barbara
Addison, Division of Policy, OCSE, telephone (202) 401-5742, email:
[email protected]. Deaf and hearing impaired individuals may
call the Federal Dual Party Relay Service at 1-800-877-8339 between 8
a.m. and 7 p.m. Eastern Standard Time.
SUPPLEMENTARY INFORMATION:
Submission of Comments
Comments should be specific, address issues raised by the proposed
rule, propose alternatives where appropriate, explain reasons for any
objections or recommended changes, and reference the specific action of
the proposed rule that is being addressed. Additionally, we will be
interested in comments that indicate agreement with changed or new
proposals. We will not acknowledge receipt of the comments we receive.
However, we will review and consider all comments that are germane and
are received during the comment period. We will respond to these
comments in the preamble to the Final Rule.
Statutory Authority
This NPRM is published under the authority granted to the Secretary
of the Department of Health and Human Services by section 1102 of the
Social Security Act (Act), 42 U.S.C. 1302. Section 1102 of the Act
authorizes the Secretary to publish regulations, not inconsistent with
the Act, which may be necessary for the efficient administration of the
functions for which the Secretary is responsible under the Act.
This proposed rule is published in accordance with the following
sections of the Act: section 451 Appropriation, section 452 Duties of
the Secretary, section 453 Federal Parent Locator Service, section 454
State Plan for Child and Spousal Support, section 454A Automated Data
Processing, section 454B Collection and Disbursement of Support
Payments, section 455 Payment to States, section 456 Support
Obligations, section 457 Distribution of Collected Support, section 458
Incentive Payments to States, section 459 Consent by the United States
to Income Withholding, Garnishment, and Similar Proceedings for
Enforcement of Child Support and Alimony Obligations, section 460 Civil
Actions to Enforce Support Obligations, section 464 Collection of Past-
due Support From Federal Tax Refunds, section 466 Requirement of
Statutorily Prescribed Procedures to Improve Effectiveness of Child
Support Enforcement, and section 467 State Guidelines for Child Support
Awards.
Background
The Child Support Enforcement program is intended to ensure that
noncustodial parents provide financial support for their children.
Child support payments play an important role in reducing child
poverty, lifting approximately one million families out of poverty each
year. In 2012, the Child Support Enforcement program collected $27.7
billion in support payments for the families in State and Tribal
caseloads. During this same period, 82 percent of the cases had support
orders, and nearly 72 percent of cases with orders had at least some
payments during the year.
The proposed rule makes changes to strengthen the Child Support
Enforcement program and update current practices in order to increase
regular, on-time payments to families, increase the number of
noncustodial parents working and supporting their children, and reduce
the accumulation of unpaid child support arrears. These changes remove
regulatory barriers to cost-effective approaches for improving
enforcement consistent with the current knowledge and practices in the
field, and informed by many successful state-led innovations. In
addition, given that three-fourths of child support payments are
collected by employers through income withholding, this proposed rule
standardizes and streamlines payment processing so that employers are
not unduly burdened by this otherwise highly effective support
enforcement tool. The rule also removes outdated barriers to electronic
communication and document management, updating existing child support
regulations which frequently limit methods of storing or communicating
information to a written or paper format. Finally, the proposed rule
updates the program to reflect the recent Supreme Court decision in
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Turner v. Rogers, 564 U.S. _, 131 S Ct. 2507 (2011).
Executive Order 13563 directs agencies to increase retrospective
analysis of existing rules to determine whether they should be
modified, streamlined, expanded, or repealed so as to make the agency's
regulatory program more effective or less burdensome in achieving
regulatory objectives.\1\ In response to Executive Order 13563, OCSE
conducted a comprehensive review of existing regulations to improve
program flexibility, efficiency, and responsiveness; promote
technological and programmatic innovation; and update outmoded ways of
doing business. Some of these regulations have not been updated in a
generation. Proposed regulatory improvements include: (1) Procedures to
promote program flexibility, efficiency, and modernization; (2) updates
to account for advances in technology; and (3) technical corrections.
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\1\ Available at: http://www.whitehouse.gov/the-press-office/2011/01/18/improving-regulation-and-regulatory-review-executive-order. Also, the OMB Memorandum related to Executive Order 13563 is
available at: http://www.whitehouse.gov/sites/default/files/omb/memoranda/2011/m11-10.pdf.
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Before drafting the proposed rules, OCSE consulted with States,
Tribes, employers, and other stakeholders. The National Council of
Child Support Directors voluntarily established a subcommittee that
would provide OCSE with cost saving proposals. We also sought Tribal
input in a formal fashion as discussed in the Tribal Impact Statement.
These efforts helped OCSE to: Identify regulations where we could
encourage noncustodial parents to assume more personal responsibility;
increase State and employer flexibility to better serve families;
improve program effectiveness, efficiency, and innovation; streamline
intergovernmental case processing; improve customer service; and remove
barriers identified by employers, States, and families that impede
efficient and timely child support payments. We also identified
obsolete and outmoded requirements and technical fixes that are needed.
This proposed rule recognizes and incorporates policies and practices
that reflect the progress and positive results that have resulted from
successful program implementation by States and Tribes.
The section-by-section discussion below provides greater detail on
the provisions of the proposed rule. All references to regulations are
related to 45 CFR Part 300, except as specified in sections relating to
the CMS regulations (42 CFR part 433).
Effective Date and Potential Impact on State Law
In this NPRM, some of the proposed regulatory provisions would
require a State to submit revised State plan pages and/or enact new
State laws. A State may meet these requirements through enactment of
State law, regulations (including court rules), and/or procedures that
ensure compliance with Federal law. In this NPRM, we specifically seek
public comment on the actions a State will need to take to ensure
compliance with the proposed provisions. We are especially interested
in the steps necessary to implement proposed provisions in Sec. Sec.
302.32, 302.38, 302.56, 303.6, 303.8, 303.11, and 303.100.
In addition, we seek public comment on the amount of time a State
will need to take these actions and to implement the proposed
provisions in this NPRM. We request comment on whether a general
effective date of one year after publication of the final rule will be
sufficient, for most changes, with the exception of Sec. 302.56(a),
where we have proposed that a State meet the guidelines requirements
within one year after completion of the State's next quadrennial review
of its guidelines.
When new State plan requirements were enacted in the past, and
additional State legislation was required, in order for the State's
Title IV-D plan to remain in compliance, Congress provided that the
State must enact the needed legislation by the first day of the second
calendar quarter beginning after the close of the first regular session
of the State legislature that begins after the effective date of the
regulation. If the State had a 2-year legislative session, each year of
the session was considered a separate regular session of the State
legislature. We are inviting comments concerning which of the proposed
changes in this NPRM may require State legislation and may warrant a
similar delay in the effective date.
Tribal Impact Statement
In this NPRM, OCSE proposes to update existing State case closure
rules in order to deliver more efficient child support services to
families. There were no Tribal IV-D programs when case closure
regulations were initially written in 1989. Today there are over 50
fully operational Tribal IV-D programs. Because our proposed updates
could have an impact on these programs, we invited Tribal leaders to
engage in written consultation via a ``Dear Tribal Leader Letter,''
dated April 28, 2011. We specifically sought comments on how we could
encourage efficient case transfer between a State and a Tribal IV-D
program.\2\
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\2\ Available at: http://www.acf.hhs.gov/programs/cse/pol/DCL/2011/dcl-11-07.htm.
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In addition to written consultation, we engaged in a face-to-face
consultation with Tribal leaders at the ACF Tribal Consultation Session
on August 18, 2011 and March 6, 2012. We also invited Tribal leaders to
participate in an additional day of consultation and dialogue, on
August 19, 2011, to address any issues specific to Tribal child
support.\3\ Finally, in 2011, OCSE met with Tribal IV-D directors, on
January 12-13, 2011, February 23-24, 2011, and March 10-11, 2011, to
discuss Medicaid reimbursement cases that involve enrolled Tribal
members or those otherwise eligible for enrollment. Our efforts to
engage Tribal leaders throughout this NPRM process proved to be
beneficial. Tribal leaders provided valuable comments that helped us
formulate proposed regulatory language.\4\
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\3\ Available at: https://www.federalregister.gov/articles/2011/07/19/2011-18096/notice-of-meeting-administration-for-native-americans#p-8.
\4\ For a detailed description of these proposed changes, please
see the Case Closure section.
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We would like to emphasize that case closure regulations proposed
in this NPRM are only applicable to State IV-D agencies. However,
during tribal consultation held previously, we consulted with tribes
regarding a proposal to all State child support agencies to close a
case when the case is opened due solely to a Medicaid referral for
medical support enforcement of a case involving an IHS-eligible child.
We encourage all interested parties, including Tribes, to provide
comments regarding this portion of the regulations during the public
comment period. We will review and consider all comments, before we
issue a final rule.
In addition to updating case closure regulations, we propose
several technical corrections to existing Tribal regulations. These
proposed corrections should have little to no impact on Tribal IV-D
programs.
Section-by-Section Discussion of the Provisions of This Proposed Rule
This NPRM proposes: (1) Procedures to promote program flexibility,
efficiency, and modernization; (2) updates to account for advances in
technology; and (3) technical corrections. The following is a
discussion of all the regulatory provisions included in this NPRM.
Please note the provisions are discussed in order by category. Because
this is a lengthy NPRM, we present the proposed revisions in these
three categories to
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assist the reader in understanding the major concepts and rationale for
the changes.
Topic 1: Procedures To Promote Program Flexibility, Efficiency and
Modernization (Sec. Sec. 302.32; 302.33; 302.38; 302.56; 302.70;
302.76; 303.3; 303.6; 303.8; 303.11; 303.31; 303.72; 303.100; 304.20;
304.23; and 307.11)
Section 302.32: Collection and Disbursement of Support Payments by the
IV-D Agency
The Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 (PRWORA) (Pub. L. 104-193) centralized payment processing
through the creation of State Disbursement Units (SDUs) and
standardized income withholding provisions by requiring use of a
uniform income withholding form. In the 1990s and 2000s, OCSE and State
child support agencies partnered closely with employer and payroll
organizations to implement the 1996 reforms. These collaborative
efforts have been instrumental in streamlining the process for
employers and ensuring that children receive billions of dollars in
child support annually. Currently, over two-thirds of child support
payments ($23 billion dollars in FY 2012) are collected by employers
through income withholding, an enforcement tool which is, by far, the
most effective remedy for ensuring that noncustodial parents are held
accountable. While the overall framework for the processing and
disbursing of child support payments is sound, the proposed rule
addresses four ongoing concerns raised by employers, families, and
States that hinder efficient income withholding and payment
disbursement procedures: (1) State processing of income withholding
payments on non-IV-D orders through the SDU; (2) SDU disbursement of
child support payments directly to the family; (3) use of the Income
Withholding for Support form; and (4) transmission of income
withholding payments directly to the appropriate SDU.
Section 302.32 describes requirements for State IV-D agencies
regarding the collection and disbursement of support payments. In its
current form, this section provides narrow guidance on specific
disbursement timeframes for IV-D cases and clarifies that, with respect
to a case where the family is receiving TANF and has assigned rights to
child support, payments must go to the SDU and not directly to the
family.
A challenge for employers processing income withholding payments
for child support is the interaction with SDUs, specifically in regard
to payments on non-IV-D cases. An SDU is a State payment processing
unit that receives and disburses payments collected on child support
orders in both IV-D and non-IV-D cases. Employers are required by law
to send all income withholding payments to the SDU designated on the
OMB-approved Income Withholding for Support form. The State must
receive the payments, determine the distribution of funds using their
statewide automated system, and disburse the funds through the SDU to
the appropriate payee. While this payment process is largely automatic
and seamless, particularly with payments on IV-D cases, some employers
have encountered problems when sending payments to SDUs in a few States
on non-IV-D cases.
Federal law requires SDUs to collect and disburse payments under
orders in both IV-D cases and in non-IV-D cases in which the support
order was initially issued on or after January 1, 1994, and the income
of the noncustodial parent is subject to withholding pursuant to
section 466(a)(8)(B) of the Act. In order to process these non-IV-D
income withholding payments, SDUs must have access to basic information
about the non-IV-D orders. To this end, section 454A(e) of the Act
requires each State to maintain or have access to information about
non-IV-D orders in its State Case Registry (SCR), which is a part of
its statewide automated system. The SCR contains records on IV-D cases
and on non-IV-D orders established or modified in the State on or after
October 1, 1998. The State then uses the information on non-IV-D orders
to identify any incoming non-IV-D payments and to handle their
disbursement through the SDU. Data in the SCR, as part of the State's
automated system, must be used to facilitate the collection and
disbursement of child support payments through the SDU.\5\
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\5\ For further information, see AT-98-08, Policy Questions and
Responses Regarding the State Case Registry and the Federal Case
Registry of Child Support Orders under sections 453(h) and 454A(e)
of the Social Security Act, available at: http://www.acf.hhs.gov/programs/cse/pol/AT/1998/at-9808.htm.
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Despite these statutory requirements to process non-IV-D income
withholding payments automatically, employers have complained that a
small number of States are not in compliance with these requirements
and that some SDUs do not maintain information about non-IV-D orders
prior to the employer sending payment to the SDU. In such cases, upon
receipt of non-IV-D income withholding payments from employers, these
States are contacting employers and custodial parents asking for
additional information, forms, or documents before they process a
payment on non-IV-D orders, increasing the burden on employers and
families. In some instances, a few States are refusing to process the
non-IV-D income withholding payments and returning the funds to
employers. These returned or delayed payments result in confusion,
customer service complaints, and added expense and paperwork for the
employer. This practice also adversely impacts noncustodial parents
trying to meet their financial obligations and ultimately delays child
support from reaching families.
Because States have some latitude in how they meet the requirements
for managing their IV-D programs and structuring their statewide
automated systems, the reasons States have trouble processing non-IV-D
payments are likely to be diverse. In some situations, the problems may
be traced to a State not fulfilling their responsibility for processing
non-IV-D payments, while in others it may be associated with data
processing procedures or certain characteristics of their statewide
automated systems. For example, the problem may be related to:
Challenges in the automated computer interface between State agencies
and courts; delays in the original transfer of non-IV-D order
information from the courts to the SCR; the sharing of non-IV-D order
data between the SCR and the SDU; or the number and type of non-IV-D
data elements in the SCR.
To address employer problems with States not processing payments on
non-IV-D orders through their SDUs, we propose to set forth in Sec.
302.32 the basic requirements for SDUs, as stated in section 454B of
the Act. Specifically, we propose revising Sec. 302.32(a) with
language similar to section 454B(1) of the Act to describe the State's
responsibility to establish and operate a SDU. Under proposed paragraph
(a), a IV-D agency must establish and operate a SDU for the collection
and disbursement of payments under support orders in all cases enforced
under the title IV-D plan and in all cases not being enforced under the
IV-D plan in which the support order is initially issued in the State
on or after January 1, 1994, and in which the income of the
noncustodial parent is subject to withholding pursuant to section
466(a)(8)(B) of the Act. We propose a conforming change by deleting the
existing language in paragraph (a). The existing paragraph (a) is a
holdover regulatory provision from the Aid to Families with Dependent
Children Program and addresses child support payments which are
collected for a recipient of assistance under the
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State's title IV-A plan. This language is no longer needed because it
is subsumed under the new proposed paragraph (a) which states that
payments in all IV-D cases must be made to the SDU.
In the past, OCSE refrained from regulating SDU requirements
because we considered the statute to be self-implementing. We noted
that we would reconsider this position if a need arose.\6\ Because of
the problems with non-IV-D payment processing, we believe that rules
are needed. The regulatory approach we are proposing is predicated on
the belief that States are returning or delaying non-IV-D payments for
diverse reasons. Therefore, we believe a regulatory approach that is
more general and less prescriptive is appropriate. While our aim is to
dispel any confusion over the requirements, this approach will allow
States flexibility to identify and remove the barriers to non-IV-D
payment processing as they might occur uniquely in each State. We note,
however, that there is no Federal statutory authority for States to
require custodial parents or employers to provide information and data
on non-IV-D orders as a condition to process these payments. We
especially are interested in hearing from States and the public whether
the general approach in the regulations will effectively address the
problems with SDU payment processing on non-IV-D orders, and if there
are additional problematic issues regarding SDU payment processing this
rulemaking can or should address.
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\6\ For further information, see AT-97-13, Collection and
Disbursement of Support Payments, available at: http://www.acf.hhs.gov/programs/cse/pol/AT/1997/at-9713.htm.
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As a final note on this proposal, over the years States have raised
the question of whether FFP is available for activities in non-IV-D
cases. In 2010 OCSE issued PIQ-10-01, ``Federal Financial Participation
and non-IV-D activities,'' \7\ to expand on earlier SDU policy issued
in Action Transmittal, AT-97-13, ``Collection and Disbursement of
Support Payments.'' PIQ-10-01 states that FFP is available for the non-
IV-D case data requirements and payment processing required by the
Social Security Act. In general, FFP is available for the submission
and maintenance of data in the SCR with respect to non-IV-D support
orders established or modified on or after October 1, 1998; the receipt
and disbursement of collections through income withholding for child
support orders initially issued in the State on or after January 1,
1994; and the required reporting to OCSE of non-IV-D financial and
statistical information. See OCSE-PIQ-10-01 for more information. We
believe the clarification of FFP availability will mitigate States'
cost concerns related to this proposed provision.
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\7\ Available at: http://www.acf.hhs.gov/programs/cse/pol/PIQ/2010/piq-10-01.htm.
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Section 302.33: Services to Individuals Not Receiving Title IV-A
Assistance
Current Sec. 302.33(a)(4) requires that whenever a family is no
longer eligible for assistance under a State's TANF, foster care, and/
or Medicaid programs, the IV-D agency must notify the family, within 5
working days of the notification of ineligibility, that child support
services will continue, without application, unless the family notifies
the agency to the contrary. In certain situations, we believe that
automatic continuation of child support services can be inappropriate
for the family, such as once a child has been reunified with the family
or the child has aged out of foster care. Therefore, based on a request
from a joint child support/child welfare workgroup, we propose an
efficiency change in Sec. 302.33(a)(4).
We propose to eliminate ``title IV-E foster care'' from the first
sentence in Sec. 302.33(a)(4) and to add to that provision stating
that the requirement to notify the family within 5 working days that
services will be continued, unless the family notifies the IV-D agency
to the contrary, also applies when a child is no longer eligible for
IV-E foster care, but only in those cases that the IV-D agency
determines that such services and notice would be appropriate. This
proposed revision provides State IV-D agencies with additional
flexibility to determine whether notice to a family in which a child no
longer receives foster care maintenance payments is appropriate and
whether to close the case. We believe that these revisions will
simplify the notification process in post-foster care cases,
recognizing that continued child support enforcement may be
inappropriate, for example, once foster care cases are closed due to
family reunification or when children age out of foster care. However,
existing arrearages in these IV-D referral cases would remain an
obligation owed to the State and collectible under all applicable State
laws and processes pursuant to section 456 of the Act and 45 CFR
302.50(c).
At the request of States, we propose to provide each State the
option to elect in its State plan to allow an individual parent who
files an application the flexibility to select child support services
from a menu of service options to better meet the needs of the
families. Currently, a parent who applies for services has to accept
the full range of services.
We propose to add a new paragraph (a)(6) that indicates that the
State would elect in its State plan whether or not it provides
applicants under subparagraph (a)(1)(i) the option to request limited
services. This rule provides the State with authority to allow either
the custodial or the noncustodial parent to request specific child
support services tailored to the family's circumstances. In addition,
we believe that limited services will result in increased customer
satisfaction; help fathers assume more personal responsibility; help to
make enforcement services more successful and efficient; and respond to
families' needs. We believe that this will give States increased
flexibility to be responsive to the family.
Under this proposal, for example, a State could elect to allow an
applicant for services to request paternity establishment services
only. Based on the State's procedures, if an unwed mother lived with
the biological father of a child, he could request paternity
establishment services only. Having paternity legally established may
provide the biological father a sense of personal responsibility for
the child. This would benefit the unwed parents since genetic testing
could be done at a reduced rate, and would benefit the child if
paternity is established by clarifying birth records and establishing
possible eligibility for dependents' benefits. Additionally, if the
parents separate in the future, it would be easier for the State child
support agency to establish and enforce a support obligation. In the
Child Support Enforcement program, this menu of service options is
called ``limited services.'' The child support community has discussed
this approach for many years as a positive strategy to tailor services
to serve families.
If the State chooses this option, it would be required to define
how this process would be implemented and establish and use procedures
that would specify what limited services are allowed and under what
circumstances. Additionally, the State's procedures would require that
a limited services applicant requesting enforcement services must
receive all appropriate mandatory enforcement services, such as the
Federal Tax Refund Offset, income withholding, and credit bureau
reporting. This provision also states that an application would be
considered full-service unless the parent specifically applies for
limited services in accordance with the State's procedures, and if one
parent specifically requests limited services
[[Page 68552]]
and the other parent requests full services, the case will
automatically receive full services. Also, for all limited service
applicants, the State would be required to charge the application and
service fees required under paragraphs (c) and (e) of the section, and
may recover costs in accordance with paragraph (d) of this section if
the State has chosen this option in its State plan. Finally, the State
must also include information in its application form on the range of
available services, consequences of selecting a limited service, and an
explanation that the case will be closed when the limited service is
completed.
Before a State chooses to implement these new criteria, it would
need to ensure that its automated system can be easily modified so that
it can effectively manage its caseloads regarding what services are
requested. Also, if a State provides this option, the State would have
flexibility on how it implements these proposed changes. The State must
ensure that these changes are made in a consistent manner in accordance
with its State plan. The State could also choose to implement this
option for one or two services, and expand this as it gains experience
in implementing these changes.
We believe that as States modernize their statewide automated
systems, this option will be easier for States to implement and to
manage in their caseloads, and at the same time will provide them
additional flexibility to provide child support services that meet the
needs of families. We expect limited services can be a cost-effective
way to provide efficient and targeted services while avoiding
expenditures on unnecessary and unproductive services.
Also, the State must ensure that an application is received from
the applicant documenting what limited services are being requested.
Regarding the fees for a limited-services application, the State may
choose to charge the same fees as a full-service application. However,
the fees must be charged in accordance with paragraphs (c) and (e) of
this section, and if the State chooses to recover costs, it must be
done in accordance with paragraph (d) of this section.
Finally, we are cognizant of the risk of domestic violence in the
general operation of the child support program, and in particular as
related to this proposed limited services provision. The child support
program has required domestic violence safeguards in Sec. 303.21(e)
and we will continue to work with States and advocates to ensure that
best practices are in place to safeguard the affected parties. OCSE
also has a major domestic violence initiative underway to identify and
promote effective practices to support families. We invite comments on
whether there are additional domestic violence safeguards that should
be put in place with respect to the limited services options.
Section 302.38: Payments to the Family
This proposed rule addresses concerns raised by States and families
about the difficulties that families encounter when child support
payments are disbursed directly to private collection agencies,
bypassing the custodial families to whom the money is owed. Unlike
private firms that contract with State child support agencies, private
collection agencies contract directly with custodial parents for the
collection of child support and are not affiliated with the State IV-D
program. While earlier OCSE policy guidance did not preclude State IV-D
programs from disbursing child support collections to private
collection agencies if requested by the custodial parent-payee, OCSE
now believes that disbursement of child support collections from SDUs
to private collection agencies instead of directly to families puts the
government in the role of indirectly enforcing private contracts and is
not in the best interests of families and children.
Numerous consumer complaints and litigation have highlighted the
questionable practices of many private collection agencies. These
practices include deceptive advertising; perpetual service contracts
that require direct payment to the company and prohibit cancellation;
falsely representing the business as a government office; using
official-looking documents to pressure employers to redirect support
withheld from employees' paychecks; demanding payments from
grandparents; demanding payments that are not owed from noncustodial
parents; and other allegedly deceptive and abusive tactics.\8\ OCSE's
intent is not to regulate private collection agencies, but rather to
ensure that child support programs are not facilitating, and the
taxpayer is not subsidizing, the sometimes inappropriate business
practices of private collection agencies not under contract to States.
In order to provide protections for families and fulfill the intent of
the founding child support legislation and subsequent policy, we
propose that child support payments owed and payable to families be
disbursed directly, and only, to families.
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\8\ These practices are described in various consumer complaints
and letters to State consumer agencies, as well as in GAO report,
Child Support Enforcement--Clear Guidance Would Help Ensure Proper
Access to Information and Use of Wage Withholding by Private Firms,
GAO-02-349 (2002), available at: http://www.gao.gov/new.items/d02349.pdf.
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Such private collection agencies enter into contracts with
custodial parents to collect child support, but are not subject to the
same contractual or regulatory oversight as State IV-D agencies and
other private firms that have contracts with States to carry out public
child support functions. Many states contract with private firms to
provide various child support services. These private firms act on
behalf of the State IV-D agency and must comply with the same statutes
and regulations as the State IV-D program. Moreover, the Federal Trade
Commission has determined that child support private collection
agencies are not subject to the Fair Debt Collection Practices Act, 15
U.S.C. 1692-1692p, administered by the Federal Trade Commission because
child support debt is not considered consumer debt.\9\
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\9\ Mabe v. G.C. Services Limited Partnership, 32 F. 3d 86 (4th
Cir. 1994), available at: http://scholar.google.com/scholar_case?case=16399759672854246032&q=Mabe+v.+G.C.+Services+Ltd.+Partnership&hl=en&as_sdt=2,9&as_vis=1.
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Since the Child Support Enforcement program was created over 30
years ago, the statutory framework for payment processing imposed on
States the requirement that collections owed to the family should be
paid to the family. Section 457 of the Act, Distribution of Collected
Support, requires the State to track and distribute payments, and
clearly indicates that money owed to the family is paid to the family,
unless the family received TANF assistance and has assigned its rights
to support to the State as reimbursement. In accordance with section
457 of the Act, the portion of the support owed to the family must be
distributed ``to the family'' and not to any other party.
Section 454(11)(B) of the Act reinforces the requirement that
payments are made to families. According to this provision, States must
provide in their State child support enforcement plans that any
payments required to be made to a family pursuant to section 457 must
be made to ``the resident parent, legal guardian, or caretaker relative
having custody of or responsibility for the child or children''
(emphasis added). The law is clear that payments due to families are to
be disbursed from SDUs to the individual with responsibility to protect
and further the child's best interests.
On December 29, 2010, ACF published final regulations in the
Federal Register (75 FR 81894) for
[[Page 68553]]
Safeguarding Child Support Information (Safeguarding rule) by
distinguishing between individuals who have a legal and fiduciary
obligation to protect a child's best interests and those who do
not.\10\ Specifically, the Safeguarding rule clarified that each of the
categories of individuals authorized to receive child support
information under section 453(c)(3) of the Act, has ``a relationship
with the child that imposes an intrinsic responsibility to assure
protection of the child's welfare and interests.'' The rule excludes
those ``with a pecuniary interest of their own that may be inconsistent
with the child's best interests'' from receiving confidential
information contained in the Federal and State Parent Locator Service.
According to the standard set in the Safeguarding rule, therefore,
private collection agencies, with their financial self-interest and no
fiduciary duty to serve the children's best interests, are not
authorized to receive protected child support information.
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\10\ The 2010 Safeguarding final rule is available at: http://www.acf.hhs.gov/programs/cse/pol/AT/2010/at-10-12.htm.
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Because the categories of individuals authorized to receive
information, as listed in section 453(c)(3) of the Act (``the resident
parent, legal guardian, attorney, or agent of the child''),
significantly overlap with the entities authorized to receive payment
disbursement in section 454(11)(B) of the Act (``the resident parent,
legal guardian, or caretaker relative having custody of or
responsibility for the child or children''), the definitions used in
the Safeguarding regulation are directly analogous to the discussion in
this proposed rule.
The Safeguarding rule notes that a ``resident parent'' lives with
the child and provides the child's day-to-day care. Further, an
individual who has been appointed by court order as a child's ``legal
guardian'' is legally responsible for the child's care and has a legal
obligation to act in the child's best interest. The Safeguarding rule
further notes that a ``caretaker relative'' is a longstanding term used
in the TANF program and its predecessor program, Aid to Families with
Dependent Children (AFDC), to refer to those relatives responsible for
the day-to-day care of children and who are eligible to apply for cash
assistance for needy families, regardless of the existence of a legal
custody order or legal guardianship status.
Each of these individuals has a relationship with the child that
imposes responsibility to assure protection of the child's welfare,
while private collection agencies historically do not, even if those
companies employ attorneys. Therefore, consistent with the specific
statutory descriptions of authorized individuals, as well as the
general standards set forth in the Safeguarding rule, this proposed
rule would require that any payments made under Sec. Sec. 302.32 and
302.51 would be made directly to the resident parent, legal guardian,
or caretaker relative and not to a private collection agency with a
contractual agreement with the family.
The primary goal of the Child Support Enforcement program is to
ensure that families benefit directly from child support payments. This
family-first perspective is intended to ensure families' self-
sufficiency and strengthen parents' commitment to supporting their
children. On the one hand, this approach is a shift from child
support's earlier focus on welfare reimbursement and cost recovery for
Federal and State governments; on the other hand, it is consistent with
the original principle that payments due to families who never received
welfare are disbursed to families directly. Congress affirmed these
family-first principles when it passed the Deficit Reduction Act of
2005 (DRA). Known as ``family first distribution,'' the purpose of
section 7301(b) of the DRA is, ``Increasing child support payments to
families and simplifying child support distribution rules''.\11\
Section 7301 of the DRA modified the rules of distribution and
assignment of section 457 of the Act, and provided a set of options for
States which, if adopted, would result in 100 percent of payments to
families who are receiving or have received welfare assistance. The
DRA's family-first approach clearly discourages redirecting payments to
any individuals or entities other than families. In 2012, more than 94
percent of child support collected by the IV-D program was paid to
families.\12\
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\11\ For further information, see Public Law No. 109-171, Title
VII, Subtitle C, Section 7301 (2006), available at: http://www.gpo.gov/fdsys/pkg/PLAW-109publ171/pdf/PLAW-109publ171.pdf.
\12\ For further information, see OCSE's FY 2012 Preliminary
Report, Table P-1 available at: http://www.acf.hhs.gov/programs/css/resource/fy2012-preliminary-report-table-p-1. The figure was
calculated by adding total payments to families, medical support,
and the amount passed through to families for a total of $26.1
billion distributed to families. This figure represents 94.2 percent
of total collections in the amount of $27.7 billion.
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In sum, based on the intent of the original child support
legislation and the more recent ``family-first'' policies, we propose
to revise Sec. 302.38, ``Payments to the family,'' by inserting the
word ``directly'' before the phrase ``to the resident parent, legal
guardian, or caretaker relative.'' This proposed change will address
concerns regarding disbursement of payments directly to the family. The
purpose is to require SDUs to disburse child support payments directly
to the intended beneficiary and not to divert those payments to another
entity such as a private collection agency or other creditor of the
custodial parent. The proposed change does not preclude a custodial
parent from entering into a contractual relationship with a private
collection agency for the collection of child support. Also, the
proposed change is not intended to affect or change a State's current
practices regarding electronic disbursements of child support payments.
Disbursement of a child support payment to a custodial parent's bank
account is a direct payment to the family. In addition, please note
that this provision applies to payments that are due to the family;
this provision does not preclude a State from sending payments for
distribution and disbursement to initiating agencies on
intergovernmental actions. We ask specifically for comments on whether
the proposed regulations will affect State laws that permit the child
support payment to be sent to other individuals/entities, such as a
conservator or private attorney representing the custodial parent and
child, with a legal and fiduciary duty to act in the child's best
interest.
Section 302.56: Guidelines for Setting Child Support Awards
We also propose to update Federal regulations in Sec. 302.56 that
address State guidelines for setting child support awards. A number of
these proposed changes are intended to ensure that parents meet their
child support obligations and to assist States in complying with the
U.S. Supreme Court decision in Turner v. Rogers, 564 U.S. __--, 131 S
Ct. 2507 (2011). Consistent child support payments can help custodial
families achieve economic stability, which is especially important to
the millions of low- and moderate-income families served by the Child
Support Enforcement program.\13\ However, basic fairness requires that
child support obligations reflect an obligor's actual ability to pay
them.
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\13\ For further information, see Carl Formoso, Child Support
Enforcement: Net Impacts on Work and Welfare Outcomes pre- & post-
PRWORA, Washington State Division of Child Support (2000), available
at: http://www.dshs.wa.gov/pdf/esa/dcs/reports/csepolicybrief.pdf.
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A growing body of research finds that compliance with child support
orders in some States, regardless of income level, declines when the
support obligation is
[[Page 68554]]
set above 15-20 percent of the obligor's income, and that orders for
excessive amounts result in lower, not higher, child support
payments.\14\ States like California and Washington have found that the
direct result of establishing support obligations that exceed the
ability of obligors to meet them is unpaid arrearages. Most arrearages
are owed by noncustodial parents with earnings under $10,000 and are
uncollectible.\15\ Research finds that high arrearages substantially
reduce the formal earnings of noncustodial parents and child support
payments in economically disadvantaged families, while reducing
unmanageable arrearages can increase payments.\16\ Accumulation of high
arrearage balances is often associated with incarceration, because
parents have little to no ability to earn income while they are
incarcerated, and little ability to pay off the arrearages when
released due to lack of employment.\17\
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\14\ Mark Takayesu, How Do Child Support Order Amounts Affect
Payments and Compliance? Orange County, CA Department of Child
Support Services, (Oct. 2011), available at: http://ncsea.omnibooksonline.com/2012policyforum/data/papers/PV_1.pdf#page=1; and Carl Formoso, Determining the Composition and
Collectability of Child Support Arrearages, Volume 1: The
Longitudinal Analysis (2003), available at: http://www.dshs.wa.gov/pdf/esa/dcs/reports/cvol1prn.pdf. See also HHS Office of Inspector
General report, The Establishment of Child Support Orders for Low
Income Non-custodial Parents, OEI-05-99-00390, (2000), available at:
http://oig.hhs.gov/oei/reports/oei-05-99-00390.pdf.
\15\ For further information, see Elaine Sorensen, Liliana
Sousa, and Simon Schaner's report, Assessing Child Support Arrears
in Nine Large States and the Nation (2007), available at: http://aspe.hhs.gov/hsp/07/assessing-CS-debt/.
\16\ For further information, see Carolyn J. Heinrich, Brett C.
Burkhardt, and Hilary M. Shager, Reducing Child Support Debt and Its
Consequences: Can Forgiveness Benefit All? (2010), available at:
http://www.irp.wisc.edu/research/childsup/cspolicy/pdfs/2007-09/FamiliesForward_3_19_10.pdf; Maria Cancian, Carolyn Heinrich, and
Yiyoon Chung, Does Debt Discourage Employment and Payment of Child
Support? (2009), available at: http://www.irp.wisc.edu/publications/dps/pdfs/dp136609.pdf; and Harry Holzer, Paul Offner, and Elaine
Sorensen, Declining Employment Among Young Black Less-Educated Men:
The Role Of Incarceration and Child Support (2004), available at:
http://www.urban.org/uploadedpdf/411035_declining_employment.pdf.
\17\ For further information, see Carmen Solomon-Fears, Gene
Falk, and Adrienne L. Fernandes-Alcantara, Child Well-Being and
Noncustodial Fathers (2013), Congressional Research Service. See
also Amanda Geller, Irwin Garfinkel, and Bruce Western. The Effects
of Incarceration on Employment and Wages: An Analysis of the Fragile
Families Survey (2006), Center for Research on Child Wellbeing.
Working Paper # 2006-01-FF. available at: http://www.saferfoundation.org/files/documents/Princeton-Effect%20of%20Incarceration%20on%20Employment%20and%20Wages.pdf.
Also, the Report of the Re-Entry Policy Council, Charting the Safe
and Successful Return of Prisoners to the Community, Council of
State Governments, Reentry Policy Council, January 2005, Policy
Statement 13, available at: http://reentrypolicy.org/Report/About.
For further background, see Jessica Pearson's article, Building Debt
While Doing Time: Child Support and Incarceration, Judges' Journal,
American Bar Association, no. 1, vol. 43 (Winter 2004), available
at: http://peerta.acf.hhs.gov/uploadedFiles/BuildingDebt.pdf.
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As a condition of State IV-D plan approval, section 467 of the Act
requires a State to establish guidelines for child support awards
issued in the State. Existing regulations provide a State with
discretion to design its child support guidelines within the parameters
of Sec. 302.56. Currently, under Sec. 302.56(c)(1), guidelines must
take into consideration all earnings and income of the noncustodial
parent.
Research suggests that setting an accurate order based upon the
ability to pay improves the chances that noncustodial parents will
continue to pay over time. Compliance with support orders is strongly
linked to ability to pay. Many low-income noncustodial parents do not
meet their child support obligations because they do not earn enough to
pay what is ordered.\18\ The HHS Office of the Inspector General
concluded that child support orders set for low income parents are
ineffective in generating child support payments when set too high
relative to ability to pay, finding that compliance is significantly
lower when a monthly order is more than 20 percent of a parent's income
than when it is 15 percent or less.\19\ Similarly, studies conducted in
Washington and California found that, regardless of income level,
arrearages are unlikely to accumulate if the support obligation is no
more than 20 percent of earnings, or lower.\20\
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\18\ Michelle Ganow Jones, Options to Help Low-Income
Noncustodial Parents Manage Their Child Support Debt (2002),
available at http://76.12.61.196/publications/optionstohelplowincomeIN.htm.
\19\ For further information, see HHS OIG report, The
Establishment of Child Support Orders for Low Income Non-custodial
Parents, OEI-05-99-00390 (2000), available at: http://oig.hhs.gov/oei/reports/oei-05-99-00390.pdf.
\20\ Carl Formoso, Determining the Composition and
Collectability of Child Support Arrearages, Volume 1: The
Longitudinal Analysis (2003), available at: http://www.dshs.wa.gov/pdf/esa/dcs/reports/cvol1prn.pdf. Mark Takayesu, How Do Child
Support Orders Affect Payments and Compliance? Orange County, CA
Department of Child Support Services (Oct. 2011), available at:
http://ncsea.omnibooksonline.com/2012policyforum/data/papers/PV_1.pdf#page=1.
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Setting child support orders that reflect an actual ability to pay
is crucial to encouraging compliance, increasing accountability for
making regular payments, and discouraging uncollectible arrearages. On
January 30, 2013, the National Child Support Enforcement Association
issued a policy statement indicating that: ``As a general rule, child
support guidelines and orders should reflect actual income of parents
and be changed proactively to ensure current support orders reflect
current circumstances of the parents and to encourage regular child
support payments. Presumed or default orders should occur only in
limited circumstances.'' \21\ Many States have programs to ensure that
child support orders are based on the ability to pay. As of September
2011, at least 21 States and the District of Columbia were operating
programs designed to ensure that child support orders reflect current
earnings when orders are initially established and are modified when
earnings change.\22\ For example, Idaho operates a Default Reduction
Project, Arizona conducts modification workshops, Kentucky developed
on-line assistance for parents to modify their orders, and Texas offers
enhanced Web site assistance for modifying orders to match reduced
income. In addition, as of April 2011, 38 States and the District of
Columbia did not treat incarceration as ``voluntary unemployment,'' a
legal barrier to modifying orders to reflect actual income.\23\
Evidence shows that engaging both parents in the order establishment
process is likely to result in more accurate order setting, avoiding
default orders, avoiding the unnecessary build-up of arrearages, and
increasing parental commitment to regularly pay child support.\24\
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\21\ The National Child Support Enforcement Association policy
statement, Setting Current Support Based on Ability to Pay, dated
January 30, 2013, is available at: http://www.ncsea.org/documents/Ability_to_Pay-final.pdf.
\22\ Department of Health and Human Services, Office of Child
Support Enforcement, State Child Support Agencies with Programs to
Ensure that Child Support Orders Reflect Current Earnings (2012),
available at: http://www.acf.hhs.gov/programs/css/resource/state-child-support-agencies-with-programs-to-ensure-that-child-support.
\23\ Thirty two States allow for an order modification when
noncustodial parents are incarcerated and six other states do not
have a legal bar against such modifications. See Department of
Health and Human Services, Office of Child Support Enforcement,
``Voluntary Unemployment,'' Imputed Income, and Modification Laws
and Policies for Incarcerated Noncustodial Parents (2012), Project
of Avoid Increasing Delinquencies, Child Support Fact Sheet,
available at: http://www.acf.hhs.gov/sites/default/files/ocse/paid_no4_companion.pdf.
\24\ See Elaine Sorensen and Tess Tannehill, Preventing Child
Support Arrears in Texas by Improving Front-end Processes (2006),
available at: http://www.urban.org/UploadedPDF/411829_child_support_arrears.pdf; Center for Policy Research,
Reducing Child Support Default Orders in Colorado (2007), Colorado
Division of Child Support Enforcement, Final Report for Grant No.
90FD0080, available at: https://childsupport.state.co.us/siteuser/do/vfs/Read?file=/cm:Publications/cm:Reports/cm:Colorado_x0020_Default_x0020_Project_x0020_Final_x0020_Report.pdf;
and Kelly Macatangay, Anton H. Westveld, Brian Kunkel, Intervening
for Success.(2012) Final Report for Grant No. 90FD0136.
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[[Page 68555]]
If States are unable to obtain data on the earnings and income of
the noncustodial parent in a child support proceeding, many States
impute the noncustodial parent's income. In some cases, imputation of
income is based on an analysis of a parent's specific education,
skills, and work experience,\25\ while in other cases, imputation of
income is standardized based on full-time, full-year work at minimum or
median wage, particularly if a noncustodial parent is not working, or
there is no available income information.
---------------------------------------------------------------------------
\25\ See PIQ-00-03, State IV-D Program Flexibility with Respect
to Low Income Obligors--Imputing Income; Setting Child Support
Orders and Retroactive Support; Compromising Arrearages; Referral to
Work-Related Programs and Other Non-traditional Approaches to
Securing Support, available at http://www.acf.hhs.gov/programs/cse/pol/PIQ/2000/piq-00-03.htm.
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However, research suggests that support orders based on imputed
income often go unpaid because they are set beyond the ability of
parents to pay them. The result is high uncollectible arrears balances
that can provide a disincentive for obligors to maintain employment in
the regular economy. Inaccurate support orders also can help fuel
resentment toward the child support system and a sense of injustice
that can decrease willingness to comply with the law.\26\ The research
supports the conclusion that accurate support orders that reflect a
noncustodial parent's actual income are more likely to result in
compliance with the order, make child support a more reliable source of
income for children, and reduce uncollectible child support
arrearages.\27\
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\26\ Christy Visher and Shannon Courtney, Cleveland Prisoners'
Experience Returning Home, Urban Institute (2006), available at
http://www.urban.org/UploadedPDF/311359_cleveland_prisoners.pdf.
Also, Maureen R. Waller and Robert Plotnick, Effective Child Support
Policy for Low-Income Families: Evidence from Street Level Research,
Journal of Policy Analysis and Management (2001), available at:
http://www.jstor.org/stable/3325595.
\27\ For further information, see the report, The Story Behind
the Numbers: Understanding and Managing Child Support Debt, OCSE
Study (2008), available at: www.acf.hhs.gov/programs/cse/pol/IM/2008/im-08-05a.pdf.
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Before child support programs were computerized, imputation of
income was used as the basis for establishing support obligations
because limited information was available to decision-makers. Today,
however, States have access to multiple interstate data systems,
including the State and National Directories of New Hires as well as
the Financial Institution Data Match (FIDM) and Multistate Financial
Institution Data Match (MSFIDM), that can verify when a noncustodial
parent has a new job, is claiming unemployment insurance benefits, or
has quarterly wage information available. Data, not assumptions, are a
more accurate method of determining the income and resources of
noncustodial parents.
Accordingly, we propose to modernize standard practices for setting
child support awards in order to set more accurate orders based on
actual income. To address these changes, we propose a revision to Sec.
302.56(a) to provide a State with sufficient time to address the
revised requirements of Sec. 302.56. Specifically, we propose that a
State meet the requirements of Sec. 302.56 within one year after
completion of its next quadrennial review of its guidelines pursuant to
Sec. 302.56(e).
We propose to amend current Sec. 302.56(c)(1) to require
guidelines to take into consideration a noncustodial parent's
``actual'' earnings and income rather than ``all'' earnings and income.
We believe this amendment will afford a State greater flexibility to
set accurate orders that reflect a noncustodial parent's actual ability
to pay support. The proposed revision will reflect common practice in
some States and encourage operational updating in others. We
specifically invite public comments on this proposed change.
Additionally, we propose a new criterion as Sec. 302.56(c)(4). We
propose that State guidelines take into consideration the noncustodial
parent's subsistence needs (as defined by the State in its guidelines)
and provide that amounts ordered for support be based upon available
data related to the parent's actual earnings, income, assets, or other
evidence of ability to pay, such as testimony that income or assets are
not consistent with a noncustodial parent's current standard of living.
``Subsistence'' is defined in the Merriam-Webster dictionary as, ``the
minimum (as of food and shelter) necessary to support life.'' \28\ A
number of States incorporate a self-support reserve into their
guidelines to recognize the noncustodial parents' subsistence needs.
See PIQ-00-03 (September 14, 2000).\29\ For example, New Jersey defines
a self-support reserve as the amount of income that the State
determines is necessary to ensure that a noncustodial parent ``has
sufficient income to maintain a basic subsistence level and the
incentive to work so that child support can be paid.'' \30\ This
reserve amount is either disregarded or used to adjust the child
support obligation so the noncustodial parent is able to meet his basic
needs. The goal of this proposal is to establish an accurate child
support order and obtain compliance with the order based upon the real
circumstances of the parties and the best interests of the child. The
IV-D agency must use the guidelines and take into consideration the
obligated parent's ability to pay, or justify the deviation from the
application of the guidelines. See PIQ-07-01 (February 6, 2007)
(requiring similar considerations in the recoupment of medical expenses
or birthing expenses owed to a State).\31\
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\28\ See http://www.merriam-webster.com/.
\29\ PIQ-00-03, State IV-D Program Flexibility with Respect to
Low Income Obligors--Imputing Income; Setting Child Support Orders
and Retroactive Support; Compromising Arrearages; Referral to Work-
Related Programs and Other Non-traditional Approaches to Securing
Support, available at: http://www.acf.hhs.gov/programs/css/resource/state-iv-d-program-flexibility-low-income-obligors.
\30\ Rules Governing the Courts of New Jersey, Appendix IX-A
Considerations in the Use of Child Support Guidelines, Section 7.h.,
Self-Support Reserve, available at: http://www.judiciary.state.nj.us/csguide/app9a.pdf.
\31\ PIQ-07-01, Use of Federal Income Tax Refund Offset Program
to recoup medical expenses or birthing expenses owed to a State,
available at: http://www.acf.hhs.gov/programs/css/resource/tax-refund-to-recoup-medical-or-birthing-expenses-owed-to-state.
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The proposed regulation in Sec. 302.56(c)(4) allows a State to
impute income where the noncustodial parent's lifestyle is inconsistent
with earnings or income and where there is evidence of income or assets
beyond those identified. We recognize, however, that some noncustodial
parents may not make support payments because they are unwilling to do
so. An example of this would be a noncustodial parent who, despite good
educational credentials and marketable job skills, simply refuses to
work. In this situation the court may deviate from the guidelines. We
specifically invite comments on this provision.
We also propose a new criterion as Sec. 302.56(c)(5) to prohibit
the treatment of incarceration as ``voluntary unemployment.'' While the
treatment of incarceration as voluntary unemployment used to be a
common State guidelines policy, no more than a dozen States still
maintain this policy. Treating incarceration as voluntary unemployment
means that income is imputed and precludes modification of support
orders. The research suggests that many incarcerated parents often
leave prison with an average of $15,000-$30,000 or more in unpaid child
support, with no means to pay
[[Page 68556]]
upon release.\32\ The research also indicates that orders that are
unrealistically high may undermine stable employment and family
relationships, encourage participation in the underground economy, and
increase recidivism.\33\ We want to highlight and to specifically
invite public comments on this provision.
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\32\ See Esther Griswold and Jessica Pearson, ``Twelve Reasons
for Collaboration Between Departments of Correction and Child
Support Enforcement Agencies,'' Corrections Today (2003 which is
available at: http://www.thefreelibrary.com/Twelve+reasons+for+collaboration+between+departments+of+correction...-a0123688074; Jessica Pearson, ``Building Debt While Doing Time:
Child Support and Incarceration,'' Judges' Journal (2004), which is
available at: https://peerta.acf.hhs.gov/uploadedfiles/buildingdebt.pdf; Nancy Thoennes, Child Support Profile:
Massachusetts Incarcerated and Paroled Parents (2002), which is
available at: http://cntrpolres.qwestoffice.net/reports/profile%20of%20CS%20among%20incarcerated%20&%20paroled%20parents.pdf;
and Pamela Ovwigho, Correne Saunders, and Catherine Born. The
Intersection of Incarceration & Child support: A snapshot of
Maryland's Caseload (2005), which is available at: http://www.familywelfare.umaryland.edu/reports1/incarceration.pdf. See also
Federal Interagency Reentry Council, Reentry Myth Buster on Child
Support (2011), available at: http://www.nationalreentryresourcecenter.org/documents/0000/1063/Reentry_Council_Mythbuster_Child_Support.pdf.
\33\ U.S. Department of Health and Human Services, Office of
Child Support Enforcement, Incarceration, reentry and Child Support
Issues: National and State Research Overview (2006), available at:
http://www.acf.hhs.gov/programs/cse/pubs/2006/reports/incarceration_report.pdf.
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Additionally, we propose a new criterion as Sec. 302.56(h) that
will allow a State to recognize parenting time provisions when both
parents have agreed to the parenting time provisions or pursuant to
State guidelines. Parenting time is a legally distinct and separate
right from the child support obligation. Nonetheless, in practical
terms, parenting time is an important corollary to child support
establishment because the child support agency, or finder of fact,
needs information about the parenting time arrangements in order for
the guideline amount to be effectively calculated. For the proposed
parenting time provision, we want to emphasize that this is a minor
change to existing regulations and merely allows a court or child
support agency to include a parenting time agreement into the child
support order when both parents have agreed to the parenting time
provisions.
Including both the calculation of support and the amount of
parenting time in the support order at the same time increases
efficiency, and reduces the burdens on parents of being involved in
multiple administrative or judicial processes at minimal cost to the
child support program. When a State has adopted child support
guidelines that incorporate parenting time, the parenting time is
integral to the support order calculation. ``State child support
guidelines that incorporate parenting time'' refers to those States
that have guidelines which incorporate allowances (or credits) for the
amount of time children spend with both parents in the calculation of
the child support order amount.
This new parenting time provision is not intended to require State
IV-D agencies to undertake new activities. IV-D program costs must be
minimal and incidental to IV-D establishment activities and would not
have any impact on the Federal budget. Our proposed regulation is
intended simply to allow the inclusion of an uncontested and agreed
upon parenting time provision incidental to the establishment of a
child support order when convenient to the parties, IV-D agency and
court to do so. We believe that this provision will reflect the current
practice in some States and will encourage program flexibility in
others. We specifically invite comments on this provision.
Finally, we propose to redesignate current Sec. 302.56(h) as Sec.
302.56(i) and to revise this section. Current Sec. 302.56(h) addresses
the data that a State must consider as part of the review of a State's
guidelines pursuant to Sec. 302.56(e) and requires that the analysis
of the data must be used in the guidelines review to ensure that
deviations from the guidelines are limited. We propose adding a new
sentence at the end of this provision stating that deviations from the
presumptive child support amount may be based on factors established by
the State. Reasons for deviating from the guidelines in the best
interest of children often include extraordinary medical expenses, and/
or educational costs of additional dependents.
Section 302.70: Required State Laws
We propose changes to existing rules in section 302.70 to improve
efficiency of state programs. OCSE has statutory authority to grant a
State an exemption from implementing one or more of the laws and
procedures required under section 466 of the Act if a State can
demonstrate to the satisfaction of the Secretary that adoption of any
one or all of the required laws and procedures will not increase the
effectiveness and efficiency of the State's Child Support Enforcement
program. Additionally, OCSE may grant an exemption if a State has and
uses a similar procedure which does not fully comply with the mandate,
law, or procedure and the State shows evidence that implementation of
the mandatory procedure would not increase the efficiency and
effectiveness of the State's existing procedure. In the past, OCSE has
granted such State exemptions for a period up to 3 years. However, we
believe that changing the time period to 5 years would reduce paperwork
while ensuring sufficient accountability and oversight.
We also propose to amend the provision in Sec. 302.70(d)(2) that
allows a State to request extensions of its IV-D State plan exemptions
every 3 years. OCSE believes that the requirement to request an
extension every 3 years is unnecessary and that a 5-year review would
be more appropriate. There are two reasons for this proposed change.
First, OCSE reviews and analyzes initial exemption requests thoroughly
to ensure that the statutory requirements pursuant to section 466(d) of
the Act are met. Second, in over 20 years of reviewing extension
requests for approved exemptions, OCSE has never denied an extension
request. This proposed amendment to request extensions of IV-D State
plan exemptions every 5 years will not change OCSE's authority to
review and to revoke a State's exemption at any time, but it will
promote efficiency by reducing the burden imposed on States submitting
exemption extension requests.
Section 302.76: Job Services
The evidence from recent research studies, including rigorous
analyses of Texas' NCP Choices and the New York's Strengthening
Families Through Stronger Fathers Initiative, indicates that child
support-coordinated work programs can be an effective method of
increasing child support payments to families.\34\ Although many State
Child Support Enforcement programs have entered into local or statewide
partnerships to provide noncustodial parent employment activities, the
cost of work activities provided under an individual work plan has not
been allowed as a IV-D reimbursable cost.\35\
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\34\ For further information, see Daniel Schroeder and Nicholas
Doughty's report, Texas Non-Custodial Parent Choices: Program Impact
Analysis (2009), available at https://www.texasattorneygeneral.gov/cs/ofi/ncp_choices_program_impact.pdf. Also, Kye Lippold, Austin
Nichols, and Elaine Sorensen's report, Strengthening Families
Through Stronger Fathers: Final Impact Report for the Pilot
Employment Programs (2011), available at: http://www.urban.org/uploadedpdf/412442-Strengthening-Families-Through-Stronger-Fathers.pdf.
\35\ See OCSE AT-97-10, Question and Answer 4, under
Miscellaneous, available at: http://www.acf.hhs.gov/programs/cse/pol/AT/1997/at-9710.htm; OCSE PIQ-98-03, available at: http://www.dshs.wa.gov/pdf/esa/dcs/reports/OCSE_PIQ_90_99.pdf; and OCSE AT
00-08, Question and Answer 17, available at: http://www.acf.hhs.gov/programs/css/resource/collaborative-efforts-between-iv-d-agencies-and-welfare-to-work.
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[[Page 68557]]
Section 454(13) of the Act requires that the state plan must
``provide that the State will comply with such other requirements and
standards as the Secretary determines to be necessary to the
establishment of an effective program for locating noncustodial
parents, establishing paternity, obtaining support orders, and
collecting support payments.'' Pursuant to section 454(13) of the Act,
we propose to add a new optional State plan provision, Sec. 302.76,
Job Services. The proposal permits the State to provide certain
specified job services to eligible noncustodial parents pursuant to
Sec. 303.6(c)(5). If the State chooses this option, the state plan
must include a description of the job services and eligibility
criteria.
Section 303.3: Location of Noncustodial Parents in IV-D Cases
Section 303.3 requires IV-D agencies to attempt to locate all
noncustodial parents or sources of information or assets where that
information is necessary. In addition to the Federal Parent Locator
Service, the existing regulation lists appropriate locate sources,
including ``police, parole, and probation records.'' The proposed
change to Sec. 303.3(b)(1) specifically adds ``corrections
institutions'' to this list.
This proposed change will encourage child support agencies to use
the available locate tools already at their disposal to identify
incarcerated noncustodial parents and assure that their orders are
appropriate.
Section 303.6: Enforcement of Support Obligations
In addition to the State guidelines changes, we propose to update
Federal regulations in Sec. 303.6 requiring States to have procedures
in place ensuring that civil contempt proceedings take into
consideration the subsistence needs of the noncustodial parent.
We believe our effort to modernize current practices in this
program area will encourage noncustodial parents to comply with child
support orders, maintain legitimate employment, and minimize the
accumulation of unpaid child support arrearages. This will ultimately
help noncustodial parents to better fulfill their financial
responsibilities toward their children.
Existing Sec. 303.6(c) requires that the IV-D agency must maintain
and use an effective system for enforcing a child support obligation by
complying with the provisions in existing Sec. 303.6(c)(1) through
(4). The IV-D agency must use this enforcement system for all cases
referred to the IV-D agency or applying for services under Sec. 302.33
in which a child support order has been established.
To ensure that the low-income noncustodial parent is able to comply
with the court order, we propose to redesignate paragraph (c)(4) to
(c)(5) and add new paragraph (c)(4) requiring States to have procedures
in place ensuring that in civil contempt proceedings, such enforcement
activities take into consideration the noncustodial parent's
subsistence level and income. In addition, we encourage States to
develop procedures to take into account the noncustodial parent's
subsistence level in other child support enforcement procedures such as
credit bureau reporting, license revocation, State tax refund offset,
and liens. Some States have reported that they are already doing this
based on discretionary needs-based analysis that the States have
developed for implementing several of these enforcement tools. We
invite comments on whether OCSE should regulate having procedures for
considering the noncustodial parent's subsistence level for other
enforcement activities in the future.
In addition, we propose in new paragraph (c)(4) that the IV-D
agency must ensure, in a civil contempt proceeding, that a purge amount
the noncustodial parent must pay in order to avoid incarceration takes
into consideration actual earnings and income and the subsistence needs
of the noncustodial parent. In addition, we propose that a purge amount
must be based upon a written evidentiary finding that the noncustodial
parent has the actual means to pay the amount from his or her current
income or assets. This proposal will assure a fundamentally fair
determination of whether a noncustodial parent is able to comply with
the court order in a child support civil contempt proceeding that can
lead to jail time. This proposed provision is intended to assist States
seeking to add due process protections in accordance with the U.S.
Supreme Court's recent decision in Turner v. Rogers, 564 U.S. _, 131 S
Ct. at 2507 (2011), which noted that civil contempt proceedings must
assure a ``fundamentally fair determination . . . whether the
supporting parent is able to comply with the support order.'' As noted
in Turner, ``A court may not impose punishment in a civil contempt
proceeding when it is clearly established that the alleged contemnor is
unable to comply with the terms of the order.'' Turner, 131 S. Ct. at
2516, quoting Hicks v. Feiock, 485 U.S. 624, 638, n. 9.
Under this provision, a court would not be allowed to set a
standardized purge payment amount in a IV-D case, including a fixed
dollar amount, a fixed percentage of the arrearage, or a fixed number
of monthly payments, unless the provisions of proposed Sec.
303.6(c)(4) are met. Under proposed Sec. 303.6(c)(4), a IV-D agency,
for example, could implement procedures to assist the court in its
determination, for example, by pre-screening cases to determine whether
the case is appropriate for a contempt proceeding. The issue is not the
use of contempt procedures per se, but contempt orders that, if not
satisfied, can lead to jail time. While some States routinely use show
cause or contempt proceedings, jail is not a typical outcome. We
believe the proposed provision will provide safeguards to reduce the
risk of erroneous deprivation of liberty in a child support civil
contempt case. We note that a contempt order may not be monetary, but
instead may require certain actions by the obligor, such as obtaining
employment or participation in job search or other work activities. So
long as the obligor has the present ability to do what is ordered of
him or her, HHS believes such an order would appear to comply with the
Turner decision.
In an effort to make the program more effective and to increase
regular child support payments, we propose program standards related to
providing certain job services for eligible noncustodial parents
responsible for paying child support. These services are designed to
complement traditional enforcement tools and to help noncustodial
parents find suitable employment opportunities so they can support
their children.
Stable child support collections depend on the economic stability
of the noncustodial parent. In fact, over 70 percent of child support
collections are made through wage withholding by employers.\36\ So
while the child support program works well for those parents who have
steady incomes through regular employment or other means, it has been
less effective for the 20 to 30 percent of noncustodial parents who
have a limited ability to pay child support because of their limited
[[Page 68558]]
earnings.\37\ For example, 70 percent of unpaid child support debt is
owed by parents with no or low reported earnings.\38\ Many poor
noncustodial parents, however, have little or no connection to the
formal labor market and therefore cannot pay consistent support.\39\
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\36\ DCL-13-16, OCSE Preliminary FY 2012 Data Report, is
available at: http://www.acf.hhs.gov/programs/css/resource/fy-12-preliminary-data-report-announcement.
\37\ For further information, see Elaine Sorensen and Chava
Zibman's report, Poor Dads Who Don't Pay Child Support: Deadbeats or
Disadvantaged? (2001), available at: http://www.urban.org/UploadedPDF/anf_b30.pdf.
\38\ For further information, see Elaine Sorensen, Liliana
Sousa, and Simon Schaner's report, Assessing Child Support Arrears
in Nine Large States and the Nation (2007), available at: http://aspe.hhs.gov/hsp/07/assessing-CS-debt/.
\39\ For further information, see Elaine Sorensen and Helen
Oliver's report, Policy Reforms are Needed to Increase Child Support
from Poor Fathers (2002), available at: http://www.urban.org/uploadedPDF/410477.pdf.
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Traditional enforcement tools often prove ineffective in getting
unemployed noncustodial parents to pay child support.\40\ In most
cases, offering job services is a more effective approach for
increasing the ability of unemployed noncustodial parents to get and
keep a job and to pay child support on a regular basis, while holding
parents accountable for supporting their children. As of February 2014,
30 States and the District of Columbia are operating 77 work-oriented
programs for noncustodial parents with active child support agency
involvement. Three of these States are operating statewide programs--
Georgia, Maryland, and North Dakota. Many other States are operating
programs in multiple counties. We estimate that roughly 30,000
noncustodial parents were served by these programs in 2013. Many of
these programs are associated with better child support and employment
outcomes, and evaluations show they usually lead to increased support
payments.\41\
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\40\ For further information, see Maria Cancian, Daniel R.
Meyer, and Eunhee Han's article, Child Support: Responsible
Fatherhood and the Quid Pro Quo (2011), The ANNALS of the American
Academy of Political and Social Science 635:140.
\41\ U.S. Department of Health and Human Services,
Administration for Children and Families, Office of Child Support
Enforcement, Work-Oriented Programs for Noncustodial Parents with
Active Child Support Agency Involvement (2014), available at:
https://www.acf.hhs.gov/sites/default/files/programs/css/work_oriented_programs_for_non_custodial_parents_2014.pdf.
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These programs build on a long history of national demonstrations
providing employment services to noncustodial parents. The Parents'
Fair Share (PFS) demonstration in the 1990s tested a comprehensive
employment program designed to improve child support payments and other
outcomes for unemployed noncustodial parents with children receiving
public assistance. The evaluation of PFS found that this intervention
increased reliable child support payments.\42\ Subsequent
demonstrations or initiatives included the OCSE Responsible Fatherhood
Programs (1998-2000), Partners for Fragile Families (2000-2003),
Welfare-to-Work funded programs (1998-2004), and the Fathers at Work
Demonstration (2003-2007). All of these programs aimed at increasing
low-income parents' earnings and their child support payments, as well
as increasing their involvement in their children's lives.\43\ These
programs tended to generate appreciable gains in child support
payments.
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\42\ For further information, see Fred Doolittle, Virginia Knox,
Cynthia Miller, and Sharon Rowser's report, Building Opportunities,
Enforcing Obligations: Implementation and Interim Impacts of
Parents' Fair Share (1998), available at: http://www.mdrc.org/sites/default/files/full_38.pdf.
\43\ For further information, see Sarah Avellar, M. Robin Dion,
Andrew Clarkwest, Heather Zaveri, Subuhi Asheer, Kelley Borradaile,
Megan Hague Angus, Timothy Novak, Julie Redline, and Marykate
Zukiewicz's report, Catalog of Research: Programs for Low-Income
Fathers (2011), OPRE Report # 2011-20, available at: http://www.acf.hhs.gov/programs/opre/resource/catalog-of-research-programs-for-low-income-fathers.
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We propose to add Sec. 303.6(c)(5) to provide program standards
related to the proposed optional State plan provision for job services
for noncustodial parents owing child support through the IV-D program
that are reasonably expected to increase child support payments. Our
proposed job services program standards emphasize rapid labor force
attachment and job retention strategies rather than long-term career
development. While there are other contexts in which services to
promote access to better jobs and careers are important, we have
determined that in the context of unemployed noncustodial parents with
child support responsibilities, federal matching funds should be
limited to those services best calculated to lead to rapid employment
entry and employment retention. States may determine whether to provide
job services and how to design an evidence-informed employment program
that improves child support outcomes. State child support work-oriented
programs have implemented a number of promising strategies such as
tiered employment, sectoral strategies, and job-driven training--
training with a focus on business and labor market needs. Allowable job
services are limited to those services which will help noncustodial
parents find and maintain work so they can pay consistent and ongoing
child support payments.
To be eligible for job services, we propose that the noncustodial
parent must have a IV-D case, have a current child support order, be
unemployed or not making regular child support payments, not be
receiving TANF assistance or assistance funded with State dollars
counting toward TANF maintenance of effort, not be enrolled in a
Supplemental Nutrition Assistance Program Employment and Training
program under 7 CFR 273.7 and 273.24, not be receiving the same job
services from Workforce Investment Act (WIA) under 20 CFR part 652 and
parts 660-671, and not be receiving a Federal Pell Grant under 34 CFR
part 690. The State child support agency may set additional eligibility
criteria.
We propose that allowable job services (for which FFP will be
available under Sec. 304.20(b)(3)(ix)) include:
Job search assistance;
job readiness training;
job development and job placement services;
skills assessments to facilitate job placement;
job retention services;
certificate programs and other skills training directly
related to employment, which may include activities to improve literacy
and basic skills, such as programs to complete high school or a General
Education Development (GED) certificate, as long as they are included
in the same job services plan; and
work supports such as transportation assistance, uniforms,
or tools.
We have included a focused set of job services based on rigorous
research that shows positive effects of these types of services on the
employment of noncustodial parents and their child support
payments.\44\ This package includes certificate programs and other
skills training directly related to employment. Previous successful
programs have included a package of services including certificate
programs and skills training, which only minimally increase the cost of
this provision. We specifically invite comment on our proposed
eligibility
[[Page 68559]]
criteria and the list of allowable job services.
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\44\ For further information, see Daniel Schroeder and Nicholas
Doughty's report, Texas Non-Custodial Parent Choices: Program Impact
Analysis (2009), available at https://www.texasattorneygeneral.gov/cs/ofi/ncp_choices_program_impact.pdf. Also, Kye Lippold, Austin
Nichols, and Elaine Sorensen's report, Strengthening Families
Through Stronger Fathers: Final Impact Report for the Pilot
Employment Programs (2011), available at: http://www.urban.org/uploadedpdf/412442-Strengthening-Families-Through-Stronger-Fathers.pdf.
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Subsidized employment is not included as an allowable job service
above, but we ask for comment regarding its inclusion here. Subsidized
employment programs provide jobs to people who cannot find employment
in the regular labor market and use public funds to pay all or some of
their wages. Evaluations of subsidized employment programs suggest that
they are effective at providing jobs in the short term and can have
valuable ancillary benefits, including reduced welfare receipt and
recidivism among ex-offenders.\45\ However, including subsidized
employment in a jobs program can increase the cost of the program, and
our principal focus here is on low-cost job services. We invite
comments on the effectiveness of including subsidized employment as an
allowable job service, including experience and evidence of the cost-
effectiveness of using this strategy to improve regular child support
payment from low-income parents, and if allowed, options we might
consider for limiting the costs of subsidized jobs efforts, such as
limits on the length or amount of the subsidy. Since payment of child
support obligations is the goal of job services in child support, we
also ask for comments on the potential implications of withholding
child support from IV-D funded subsidized wages.
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\45\ For further information, see Cindy Redcross, Megan
Millenky, Timothy Rudd, and Valerie Levshin. ``More than a Job:
Final Results from the Evaluation of the Center for Employment
Opportunities (CEO) Transitional Jobs Program,'' OPRE Report 2011-18
(January 2012) available at: http://www.acf.hhs.gov/sites/default/files/opre/more_than_job.pdf. In addition, see Dan Bloom, Sarah
Rich, Cindy Redcross, Erin Jacobs, Jennifer Yahner, and Nancy
Pindus. ``Alternative Welfare-to-Work Strategies for the Hard-to-
Employ: Testing Transitional Jobs and Pre-Employment Services in
Philadelphia,'' MDRC, (October 2009), available at: http://www.acf.hhs.gov/programs/opre/resource/alternative-welfare-to-work-strategies-for-the-hard-to-employ-testing.
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Section 303.8: Review and Adjustment of Child Support Orders
Effective review and adjustment of child support orders is an
important step in ensuring that noncustodial parents comply with their
child support obligations. Without an effective system to change child
support orders to reflect actual ability to pay, arrears will
accumulate. The unnecessary accrual of arrears is harmful because it
hinders payment of regular support payments, leads to uncollectible
debt, limits work opportunities for noncustodial parents, and
interferes with parent-child relationships.\46\ To address the needs of
families with a parent in prison, numerous States, including Missouri,
Nevada, Oklahoma, Texas, and West Virginia, already communicate with
incarcerated parents about review and adjustment policies and the
importance of requesting modification of their child support
orders.\47\
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\46\ For further information, see Carolyn J. Heinrich, Brett C.
Burkhardt, and Hilary M. Shager, Reducing Child Support Debt and Its
Consequences: Can Forgiveness Benefit All? (2010), available at:
http://www.irp.wisc.edu/research/childsup/cspolicy/pdfs/2007-09/FamiliesForward_3_19_10.pdf.
\47\ For further information, see Department of Health and Human
Services, Office of Child Support Enforcement, ``Voluntary
Unemployment,'' Imputed Income, and Modification Laws and Policies
for Incarcerated Noncustodial Parents (2012), Project of Avoid
Increasing Delinquencies--Child Support Fact Sheet, available at:
http://www.acf.hhs.gov/sites/default/files/ocse/paid_no4_companion.pdf.
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Section 466(a)(10) of the Act requires a State to have in effect
laws requiring the use of procedures for review and adjustment of child
support orders. Existing regulations in Sec. 303.8 specify the
requirements that a State must meet with respect to seeking adjustments
to child support orders in IV-D cases. The current regulation
establishes both a required system for review and adjustment for cases
with assignments under part A of the Act and a means of accessing the
review and adjustment process for other cases based upon a request from
either parent. We propose to redesignate Sec. 303.8(b)(2) through
(b)(5) as (b)(3) through (b)(6). Also, we propose to add a new
paragraph (b)(2) that would allow the child support agency to elect in
its State plan the option to initiate the review of a child support
order and seek to adjust the order, if appropriate, after being
notified that a noncustodial parent will be incarcerated for more than
90 days. This review would not need a specific request, provided both
parents had received notice. In electing this State plan option, the
State may also need to consider whether further changes to State laws
are required to implement this procedure. In most States, incarcerated
parents must take affirmative steps to have their orders modified. We
have found that very few incarcerated parents petition for a
modification, even though their order could be suspended during
incarceration. As a result, by the time that noncustodial parents are
released from prisons, their child support arrearages have grown to
very high levels, and may help drive the noncustodial parents into the
underground economy to avoid paying support and may create an
additional barrier to parent-child contact.\48\ A number of States,
including Arizona, California, Michigan, Vermont, and the District of
Columbia permit their child support agency to initiate review and
adjustment upon notification that the noncustodial parent has been
incarcerated.\49\ During the first year of implementing this new
procedure, one State was able to modify over 300 orders resulting in an
average of $5,156 in arrearages being avoided per case.\50\ We
specifically invite comments on this provision, including any
experiences commenters have had in trying to adjust orders for
incarcerated noncustodial parents.
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\48\ For further information, see the Report of the Re-Entry
Policy Council: Charting the Safe and Successful Return of Prisoners
to the Community, available at: http://www.reentrypolicy.org/publications/1694;file. See also Carmen Solomon-Fears, Gene Falk,
and Adrienne L. Fernandes-Alcantara, Child Well-Being and
Noncustodial Fathers (2013), Congressional Research Service.
\49\ In 2012, Vermont enacted Senate Bill 203 that allows the
child support program to file a motion to modify child support if a
party is incarcerated from more than 90 days. For information about
the other jurisdictions, see Department of Health and Human
Services, Office of Child Support Enforcement, ``Voluntary
Unemployment,'' Imputed Income, and Modification Laws and Policies
for Incarcerated Noncustodial Parents (2012), Project of Avoid
Increasing Delinquencies--Child Support Fact Sheet, available at:
http://www.acf.hhs.gov/sites/default/files/ocse/paid_no4_companion.pdf.
\50\ For further information, see the final report on Modifying
Orders for DC Prisoners: An 1115 Demonstration Project (2006),
abstract available at: http://archive.acf.hhs.gov/programs/cse/grants/abstracts/by_state.html.
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In addition, we propose to redesignate existing Sec. 303.8(b)(6)
which requires notice ``not less than once every three years,'' to
Sec. 303.8(b)(7) and (b)(7)(i) and to add a new paragraph (b)(7)(ii)
to add that a notice of the right to request a review and adjustment is
also required when the IV-D agency has knowledge that a parent is
incarcerated. Alabama and Texas provide inmates with information about
the child support program and the steps needed to request a review of
their child support order.\51\ Providing notice is a necessary first
step in informing both parents of the ability to request a modification
of their order when a parent has been incarcerated.
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\51\ For further information, see Department of Health and Human
Services, Office of Child Support Enforcement, ``Voluntary
Unemployment,'' Imputed Income, and Modification Laws and Policies
for Incarcerated Noncustodial Parents (2012), Project of Avoid
Increasing Delinquencies--Child Support Fact Sheet, available at:
http://www.acf.hhs.gov/sites/default/files/ocse/paid_no4_companion.pdf.
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In addition, Sec. 303.8 specifies requirements that a State must
meet with respect to seeking adjustments to child support orders in IV-
D cases. Existing paragraph (d) of this section specifies that if the
review indicates the
[[Page 68560]]
need to provide for the health care needs of the children in the order,
such a need must constitute adequate justification under State law to
petition for adjustment of the order, regardless of whether an
adjustment in the amount of child support is necessary. Existing
paragraph (d) restricts consideration of Medicaid as medical support.
Since current OCSE policy does not consider the eligibility for or
receipt of Medicaid to meet the health care needs of the child(ren),
States are required to include private health insurance or establish a
cash medical support order to address the child(ren)'s health care
needs pursuant to Sec. 303.31(b). Although this has been a
longstanding policy,\52\ we realize that our existing regulation
restricts existing State flexibility available under the current
statute and that it is no longer appropriate to restrict Medicaid,
CHIP, and other coverage plans available in the State as part of
medical support. In order to provide a State with flexibility to
establish and enforce medical support obligations whenever a parent has
access to health care coverage--private or public--at a reasonable
cost, consistent with section 452(f) of the Act, OCSE proposes to
delete the last sentence of paragraph (d) of Sec. 303.8 which
prohibits Medicaid from being considered medical support.
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\52\ For further information, see AT-91-02, http://www.acf.hhs.gov/programs/cse/pol/AT/1991/at-9102.htm, AT-92-02,
http://www.acf.hhs.gov/programs/cse/pol/AT/1992/at-9202.htm, AT-92-
12, http://www.acf.hhs.gov/programs/cse/pol/AT/1992/at-9212.htm, and
AT-08-08, http://www.acf.hhs.gov/programs/cse/pol/AT/2008/at-08-08.htm.
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Section 303.11: Case Closure Criteria
Case closure, Sec. 303.11, is another area where changes in
existing regulations will increase program flexibility, effectiveness,
and efficiency. Case closure regulations were initially promulgated in
1989. Since then, advances in technology have greatly increased the
likelihood that if State IV-D agencies have sufficient information
about a noncustodial parent, they can generally locate the noncustodial
parents and find legitimate income and assets.
The goal of the proposed case closure regulations is to direct
resources for cases where collections are possible and to ensure that
families have more control over whether to receive child support
services. Under current case closure regulations, States are not
permitted to close cases except under certain narrow and specific
circumstances. This can mean that a State may be required to keep a
case open for decades, well after the child has emancipated, and
regardless of whether the family wants continued services. State case
closure procedures are automated and subject to audits.
The National Council of Child Support Directors provided OCSE with
recommendations for improving the effectiveness and efficiency of the
case closure criteria, while at the same time, ensuring that resources
are directed to working cases and that children receive services
whenever there is any reasonable likelihood for collections in the
future. Additionally, we sought Tribal input in a formal fashion as
discussed in the Tribal Impact Statement.
The proposals in this regulation are intended to carry out good
customer service and management practices in order to provide needed
services where there is any reasonable chance to successfully work a
case. The proposed regulation also ensures that safeguards are in place
to keep recipients apprised of case closure actions. Cases are not
closed without taking into consideration any new information provided
by the affected parties.
Section 454(4)(A)(ii) of the Act requires a State to provide IV-D
services to any individual who files an application for services. In
addition, sections 408(a)(3) and 454(29) of the Act require TANF
assistance recipients to assign their rights to child support and to
cooperate with the child support program in obtaining support. Existing
regulations allow a State to close IV-D cases only under certain
restricted circumstances even when the State is no longer able to
provide effective and productive child support services. In all cases
where case closure is proposed, recipients of child support services
are given notice of the intent to close the case and are provided an
opportunity to respond with information and to request that the case be
kept open or, after the case is closed, to reopen the case.
In an effort to modernize our regulations, we propose several new
case closure criteria and revisions to existing criteria in Sec.
303.11 that are intended to provide families with effective child
support enforcement services, promote State flexibility, and ensure the
efficient use of State and Federal resources. While the NPRM expands
the number of case closure criteria, it also strengthens the case
closure notice provisions to ensure that recipients are kept apprised
of case closure actions and understand how to request additional
services. The proposals in this regulation aim to balance good
management and workable administrative decisions with providing needed
services, always erring in favor of including any case in which there
is a reasonable chance of success.
In Sec. 303.11(b), we propose to clarify that a IV-D agency is not
required to close a case that is otherwise eligible to be closed under
that section. Case closure regulations are designed to give a State the
option to close cases, if certain conditions are met, and to provide a
State flexibility to manage its caseload. If a State elects to close a
case under one of these provisions, we propose the State maintain
supporting documentation for its decision in the case record. We
emphasize that closing a case will not affect the legality of the
underlying order. The child support order, including any payment or
installment of support such as arrearages due under the order, remains
in effect and legally binding.
We propose a new criterion as Sec. 303.11(b)(2) that will allow a
State to close cases where there is no current support order and all
arrearages are owed to the State. This provision is intended to afford
the State more resources to enforce those cases where debt is owed to
families rather than to the State.
We propose a new criterion as Sec. 303.11(b)(3) that will allow
the IV-D agency to close arrearages-only cases against low-income
senior citizens who are entering or have entered long-term care
placement, and whose children have already reached majority age. In
addition, these noncustodial parents must have no income or assets
available above the subsistence level that could be levied or attached
for support. The first generation of orders in the IV-D program was
issued more than 35 years ago. We recognize that a portion of our
noncustodial parent population is aging, many of whom may depend on
fixed incomes. Old child support debt, carried well after the children
have become adults and sometimes parents themselves, could pose a
barrier for aging parents to obtain affordable housing, basic income,
and health care. We believe enforcement efforts against these
noncustodial parents are not only ineffective, but are also an
inefficient way to expend child support resources. We would like to
hear from States and other stakeholders about their experiences working
with low-income, aging noncustodial parents, and receive
recommendations for this rule.
OCSE has redesignated Sec. 303.11(b)(2) as (b)(4) and proposes to
add a new criterion as Sec. 303.11(b)(5) which allows a State to close
cases when the noncustodial parent is either living with the minor
children as the primary caregiver or is a part of an intact two-parent
household, and the IV-D agency
[[Page 68561]]
has determined that services either are not appropriate or are no
longer appropriate. This provision is intended to address situations
where parents reconcile so services are no longer needed, as well as
intact two-parent families where one parent works or is seeking work
out of State and child support services were never needed. We have also
redesignated paragraph (b)(3) as (b)(6).
When States have made repeated efforts over time to locate
noncustodial parents, and those efforts are unsuccessful because of
inadequate identifying or location information, States should be
allowed to close those cases and to focus efforts on productive cases.
Current Sec. 303.11(b)(4)(i) permits a State to close cases that have
identifying information, like full names, dates of birth, and verified
Social Security Numbers, after 3 years, in which locate efforts have
been exhausted. For those cases with sufficient identifying information
and with enhanced locate tools, such as the National Directory of New
Hires (NDNH) that provides current data on new hires and quarterly wage
data and the Federal Case Registry (FCR), as well as tax information
from the Internal Revenue Service and financial information from
financial institutions data match, State experience has been that if a
State is able to locate parents and assets, it is generally within 2
years. Moreover, the NDNH data are only retained for 2 years. Given
that, we propose to redesignate paragraph (b)(4) as paragraph (b)(7)
and to revise the 3-year locate period in newly designated Sec.
303.11(b)(7)(i) to a 2-year locate period. Given the low success rate
for collections after 2 years, the extra time and resources that would
have been used to locate may be better used to enforce other cases
where appropriate.
Similarly, under current Sec. 303.11(b)(4)(ii), a State is allowed
to close cases after 1 year if it does not have sufficient identifying
information, such as a date of birth or a verified Social Security
Number, to initiate an automated locate effort. For the same reasons
noted in the previous paragraph, we propose changing the locate period
from a 1-year period to a 6-month period in proposed Sec.
303.11(b)(7)(ii).
Also, proposed Sec. 303.11(b)(7)(iii) adds a provision to allow a
State to close cases after a 1-year period when there is sufficient
information to initiate an automated locate effort, such as full names
and dates of birth, but locate interfaces are unable to verify Social
Security Numbers. OCSE implemented an interface between its Federal
Parent Locator Service (FPLS) and the Social Security Administration's
Enumeration Verification System (EVS) in 1996. FPLS is a computerized
national location network that provides States with the most timely,
accurate information available to locate noncustodial parents for the
purpose of establishing or enforcing child support orders. The EVS
system is an automated process to verify, correct, and identify Social
Security Numbers. It supports the correct identification of individuals
when incomplete or duplicate Social Security Numbers are found in child
support enforcement records. States are required to use EVS and to
obtain as much pertinent information as possible from custodial
parents. However, if after 1 year neither EVS nor FPLS are able to
verify Social Security Numbers, OCSE believes that case closure is
warranted. Without sufficient information to use enhanced locate tools
like EVS and the FPLS, locate efforts are futile and work time may be
better allocated to other areas of enforcement.
Current Sec. 303.11(b)(5) lists a limited number of circumstances
under which a State may close cases if it determines a noncustodial
parent cannot pay support for the duration of the child's minority. We
propose to redesignate the existing provision as Sec. 303.11(b)(8) and
to add the phrase ``the child has reached the age of majority'' to the
first subparagraph under the proposed provision. This will allow a
State to close both current support and arrearages-only cases if the
circumstances described in proposed (b)(8) are met. We have also
revised the proposed language by moving the phrase, ``and shows no
evidence of support potential'' earlier in the paragraph to clarify
that this condition applies to all of the circumstances described in
proposed (b)(8). The current provision also allows a State to close
cases in which the noncustodial parent has been incarcerated ``with no
chance for parole'' and has no income or assets above the subsistence
level, which could be levied or attached for support. We believe the
``no chance for parole'' requirement unduly restricts a State's
flexibility to determine that the child support case is unproductive
and should be closed. Therefore, we propose to eliminate the phrase
``with no chance for parole.'' We also propose to add a new provision
that will allow a State to close cases in which the noncustodial parent
cannot pay support and shows no evidence of support potential despite
multiple referrals for services over a 5-year period, which have not
been successful. A State will have the discretion to determine what
services are appropriate and available under State law. Finally, we
have added that these cases can only be closed under proposed (b)(8) if
the noncustodial parent's does not have income or assets ``above the
subsistence level.'' We believe that the IV-D agency should only pursue
enforcement on these cases if the noncustodial parent has income or
assets above the subsistence level (as defined by the State).
We have also added a new criterion Sec. 303.11(b)(9) to allow a
State to close a case when a noncustodial parent's sole income is from
Supplemental Security Income (SSI) payments made pursuant to sections
1601 et seq., of title XVI of the Act, 42 U.S.C. 1381, et seq., from
both SSI and benefits pursuant to title II of the Act, or from other
needs-based benefits. We are including the concurrent SSI/title II
beneficiary in this proposal, because the noncustodial parent's income
level is low enough to be eligible for SSI. Therefore, we believe that
these cases should be closed since they would be unproductive for the
IV-D agency to pursue. Additionally, we seek comments on whether
additional guidance is warranted to strengthen protection of SSI, e.g.,
requiring enhanced notice provisions recognizing these exceptions to
garnishment. We have also redesignated existing paragraphs (b)(6)-
(b)(8) as paragraphs (b)(10)-(b)(12).
As previously discussed, we proposed under Sec. 302.33(a)(6) to
allow a State to offer limited child support services. Currently, there
is no corresponding provision that allows a State to close these cases
opened under Sec. 302.33(a)(6), without first waiting for the
recipient of services to request case closure. Therefore, we propose a
new criterion Sec. 303.11(b)(13) that will allow the State to close a
non-IV-A case after a limited service under Sec. 302.33(a)(6) has been
completed without providing the notice under Sec. 303.11(d)(1).
(Section 302.33(a)(6) requires that the individual be notified when
applying for limited service(s) that the case will be closed after the
limited service is completed.) However, after the case is closed, the
IV-D agency must notify the recipient in accordance with Sec.
303.11(d)(6). We have also redesignated current paragraph (b)(9) to
(b)(14).
In non-IV-A cases, or cases where the custodial parent and/or
child(ren) does not receive cash assistance from the State, the State
is required to distribute child support payments to the recipient of
child support services. Although many State child support programs
distribute payments through debit cards, it remains extremely important
for the
[[Page 68562]]
recipient of services to keep the State informed of his or her current
mailing address to ensure that the case can be processed effectively.
If a State is unable to contact a recipient of services, current Sec.
303.11(b)(10) requires the State to make an attempt of at least one
letter sent by first-class mail to the recipient's last known address
within 60 calendar days before beginning the process of case closure.
If the attempt fails and the State does not hear from the recipient of
services within the 60 days, under current paragraph (c), the State
must then send another letter to inform the recipient of services of
its intent to close the case in 60 days. In situations where the letter
sent in the first attempt is returned by the Postal Service as
undeliverable with no forwarding address, the State must still wait the
full 60 days from the date the letter was mailed before sending the 60-
day case closure notice. We intend to streamline the case closure
process by eliminating the 60-day wait requirement under proposed Sec.
303.11(b)(15). We consider it to be more efficient to allow a State to
attempt to contact the recipient of services through at least two
different methods. With today's technology, there are many different
options when it comes to notifying clients, such as first-class mail,
electronic mail, text messaging, and telephone calls. A State will have
discretion to determine what methods are most appropriate on a case-by-
case basis. As emphasized in Action Transmittal 10-11, ``Alternative
Methods to Meet the Monthly Requirement,'' however, the underlying
policy goal is effective notice.
We redesignated existing paragraphs (b)(11)-(b)(14) as (b)(16)-
(b)(19) and propose a new criterion at Sec. 303.11(b)(20) to provide a
State with flexibility to close cases referred inappropriately by the
IV-A, IV-E, and Medicaid programs. We encourage State IV-D agencies and
assistance programs, like IV-A, IV-E, and Medicaid, to work together to
define referral criteria to ensure only appropriate cases are referred
to the IV-D agency. The term appropriate is used in the regulation
because section 454(4)(A) of the Act requires IV-D agencies to provide
services ``as appropriate.'' Primarily due to automated interfaces
between programs, a very small number of cases referred to the IV-D
agency are plainly inappropriate for child support enforcement
services, but existing regulations do not provide State IV-D agencies
with a basis for closing such cases. We believe that these programs and
child support agencies work hard to communicate regularly and
effectively to assist each other in updating their respective case
information to ensure that referrals are made appropriately.
However, there are rare instances when a State inadvertently opens
cases inappropriately referred for child support services. Therefore,
we recommend a new criterion that will allow a IV-D agency to close a
case that has been opened to establish or enforce child support because
of an inappropriate referral from another assistance program.
For example, in assistance cases which are referred for IV-D
services, both parents may be living at home and functioning as an
intact family although the parents are not married and paternity has
not been established. Since both parents are living with their child,
and there is no noncustodial parent, the IV-D agency may determine that
pursuing the case is not appropriate for child support enforcement.
Another example could be an intact family that is eligible for TANF. A
married parent applied for TANF, while the other parent has left the
area to find work. Since the family continues to function as an intact
family, although one parent is away for economic reasons, the IV-D
agency may determine that it is detrimental to the family to pursue
child support. In these circumstances, we believe the IV-D agency
should be in communication with the IV-A agency to ensure that the
decision to close the IV-D case will not be viewed by the IV-A agency
as noncooperation by the recipient of services.
Another example of an inappropriate referral would be for a family
receiving a non-recurring, short-term TANF benefit that does not fall
within the definition of TANF assistance under Sec. 260.31 as required
by existing law and policy \53\ that was unnecessarily referred to the
IV-D program in error. In cases where there is no legal authority to
require an assignment and the case was inappropriately opened by the
IV-D agency, we believe that the IV-D agency should be able to close
the case.
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\53\ For further information, see AT-98-24, August 19, 1998,
available at: http://www.acf.hhs.gov/programs/cse/pol/AT/1998/at-9824.htm.
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Also, in IV-E cases which are referred to the IV-D agency, there
may be cases where children are expected to be in foster care for only
a short time before being reunited with their family or before adoption
proceedings are finalized. The IV-D agency may determine that it is not
appropriate to pursue child support. Finally, as discussed above in
proposed Sec. 302.33(a)(4), we provide State IV-D agencies with
additional flexibility to determine whether notice to a family in which
a child no longer receives foster care maintenance payments is
appropriate.
While we believe that inappropriate referrals are limited in
number, we believe a State should have the flexibility to close these
cases on a case-by-case basis under proposed Sec. 303.11(b)(20). We
specifically seek public comment on whether the proposed provision in
Sec. 303.11(b)(20) effectively addresses the rare circumstance where
an inappropriate referral may have been made or whether the language is
too broad. We are interested in the pros and cons of this proposal and
if you have any additional suggested criteria or revisions to ensure
that a State is accorded the flexibility to close cases where
inappropriate referrals have been made.
In addition, we plan to update case closure regulations to
encourage efficient case transfer between State and Tribal IV-D
programs. Originally, when case closure regulations were written in
1989, there were no Tribal IV-D programs. Presently, there are over 50
fully operational Tribal IV-D programs. We invited Tribal leaders to
engage in both written and face-to-face consultations to discuss issues
and proposed solutions related to intergovernmental coordination. We
also met with Tribal IV-D directors in several sessions around the
country to have a conversation regarding Tribal Medical Child Support.
We specifically discussed case transfer and case closure issues that
will require a State IV-D agency to close Medicaid reimbursement cases
that involve children receiving services from the Indian Health Service
(IHS) when appropriate. We also discussed case transfer and case
closure issues with State child support directors. As a result of these
efforts, we received comments that helped us develop this NPRM.\54\
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\54\ See Tribal Impact Statement in preamble.
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In recent years, OCSE received a number of inquiries asking whether
a State IV-D agency may close a case that has been transferred to a
Tribal IV-D program and under what circumstances. OCSE responded to
those inquiries in Policy Interpretation Question Tribal (PIQT) 05-
01.\55\ PIQT 05-01 clarified that a State may transfer a case to a
Tribe if the custodial parent wishes to receive services from the
Tribal IV-D agency rather than from the State IV-D agency, and requests
that the case be transferred or consents to the transfer. The guidance
stated that such transfers,
[[Page 68563]]
at the request of or with the consent of the custodial parent, may be
appropriate if there are no assigned arrearages owed to the State. In
other words, under existing policy, a State could close and transfer
cases to Tribes only if there were no assigned arrearages owed to a
State that required the State to maintain an open IV-D case. Similarly,
if a Tribe had a current case but the parent requested that it be
transferred to a State IV-D program and the Tribe no longer had an
interest in the action, the Tribe could close and transfer the case to
the State IV-D program. The current policy does not address cases where
there is no current assignment. The State may transfer such cases to a
Tribal IV-D agency for appropriate action.
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\55\ Available at: http://www.acf.hhs.gov/programs/cse/pol/PIQT/2005/piqt-05-01.htm.
---------------------------------------------------------------------------
Proposed Sec. 303.11(b)(21) will permit a State the flexibility to
close the case if it has been transferred to a Tribal IV-D agency,
regardless of whether there is a State assignment. It will also allow a
State to reduce data management demands by eliminating duplicate and
outdated cases and to better allocate its limited resources to other
enforcement activities. Before a case can be transferred to a Tribal
IV-D agency, we propose that either the recipient of services must
request the transfer or the State must notify the recipient that the
case will be transferred to the Tribal IV-D agency and obtain the
recipient's consent. We also propose that a State deems consent if the
recipient does not respond to a notice to transfer within 60 calendar
days from the date notice was provided. Although not a condition of
eligibility, some Tribal IV-D applications for services contain a box
that may be checked to affirm a Tribal applicant's consent to have the
case transferred from a State IV-D agency to a Tribal IV-D agency. This
may be regarded as sufficient proof of consent for transferring and
closing the case. We specifically request comments from States, Tribes,
and other stakeholders on this additional flexibility for States to
transfer and close cases notwithstanding a State assignment, and will
consider all comments and recommendations received before issuing the
final rule. Finally, we propose the State notify the recipient that the
case has been transferred to the Tribal IV-D agency.
A State has the authority to accept less than the full payment of
state-assigned arrearages on the same grounds that exist for compromise
and settlement of any other judgment owed to the State.\56\ Therefore,
a State may enter into an agreement with a Tribal IV-D agency to permit
the Tribe to compromise any state-assigned arrearages.
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\56\ For further information see PIQ-00-03, available at: http://www.acf.hhs.gov/programs/cse/pol/PIQ/2000/piq-00-03.htm, and PIQ-
99-03, available at http://www.acf.hhs.gov/programs/cse/pol/PIQ/1999/piq-9903.htm.
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Any State debt owed under the pre-existing order remains in effect
and legally binding. Once a case is closed and transferred to a Tribal
IV-D program, the Tribal IV-D program will continue to adhere to
Federal regulations and must extend the full range of services under
its IV-D plan as required by Sec. 309.120(a). We strongly urge the
State and the Tribe to work together in these instances to reach
agreement on steps to take that will result in effective
intergovernmental cooperation, smooth case transfer, less confusion
about case ownership, and ongoing support payments to families,
including the possibility of compromising arrearages permanently
assigned to the State and/or entering into repayment agreements.
We believe there is little likelihood a State can successfully
perform IV-D functions in many Tribal cases, especially in cases with
default child support orders. Although some child support enforcement
services have been provided through cooperative agreements between
Tribes and States and have helped bring child support services to some
Tribal families, Indian families may experience some difficulty in
getting IV-D services from State IV-D programs.
One reason is because the authority of State and local government
is either limited or nonexistent within much of Tribal territory, while
jurisdiction is concurrent in other areas, as in States that adhere to
Public Law 83-280. In addition, practical obstacles exist to State
enforcement against Tribal members, particularly those low-income
obligors who lack formal employment or who work in a tribally-owned
business. Finally, Tribal IV-D programs incorporate certain tools and
procedures not available to State IV-D programs, such as policies
permitting in-kind support payments or traditionally-based dispute
resolution procedures.
In order to better serve Indian families, we propose a new criteria
under Sec. 303.11(c) that will require a State IV-D agency to close a
Medicaid reimbursement referral based solely upon health care services,
including contract health services, provided through an Indian Health
Program. The IHS is responsible for providing health care to American
Indians and Alaska Natives under the Snyder Act. See 25 U.S.C. 13
(providing that the Bureau of Indian Affairs (BIA) will expend funds as
appropriated for, among other things, the ``conservation of health'' of
Indians); 42 U.S.C. 2001(a) (transferring the responsibility for Indian
health care from BIA to IHS). IHS provides such care directly through
federal facilities and clinics, and also contracts and compacts with
Indian tribes and tribal organizations to provide care pursuant to the
Indian Self Determination and Education Assistance Act (ISDEAA), Pub.
L. No. 93-638 (codified at 25 U.S.C. 458aaa-18(b)). In addition, the
Snyder Act authorizes IHS to pay for medical care provided to IHS
beneficiaries by other public and private providers as contract health
services (CHS). The term ``Indian Health Program,'' defined at 25
U.S.C. 1603(12), encompasses the different ways health care is provided
to American Indians and Alaska Natives.
Pursuant to 25 U.S.C. 1621e, IHS and Indian tribes seek to ensure
maximum resources to perform this responsibility, and require
individuals with third party insurance pay for health care services
provided to IHS-eligible individuals through health programs
administered under IHS authority, including contract health services
(CHS). Third party payers or alternate resources include Medicaid,
private insurance, or other health benefits coverage for individuals
who receive health care services through such programs. An IHS-eligible
patient is not considered a third party payer, and his/her resources
are not considered to be alternate resources under 25 U.S.C. 1621e.
Likewise, the parents of an IHS-eligible minor are not considered
alternate resources under 25 U.S.C. 1621e. Custodial and noncustodial
parents of IHS-eligible patients (or their resources) should not be
distinguishable for purposes of payment. In other words, the IHS will
not seek payment from noncustodial parents of IHS-eligible children who
receive health care services provided through Indian Health Programs.
Consistent with the IHS authority, the Centers for Medicare &
Medicaid Services (CMS) propose conforming changes to Medicaid policy
concerning third party liability and medical support with respect to
IHS-eligible children who receive health services, including CHS,
through an Indian Health Program. Under existing IHS policy,
noncustodial parents are not considered liable third parties and their
assets are not available for medical support for such services.
Recognizing that the IHS has primary responsibility for determining the
medical support obligations from Indian families for services provided
through Indian Health Programs, CMS proposes to amend 42 CFR
433.152(b)(1), consistent with IHS policy, to require that State
Medicaid agencies not refer
[[Page 68564]]
cases for medical support enforcement services when the Medicaid
referral is based solely upon health care services, including contract
health services, provided through an Indian Health Program (as defined
at 25 U.S.C. 1603(12)) to a child who is eligible for health care
services from the Indian Health Service (IHS). This policy remedies the
current inequity of holding noncustodial parents personally liable for
services provided through the Indian Health Programs to IHS-eligible
families that qualify for Medicaid, while not holding noncustodial
parents personally liable for the same services for IHS-eligible
families that do not qualify for Medicaid. Research indicates that most
noncustodial parents of IHS-eligible children who qualify for Medicaid
have difficulty meeting their child support obligations.\57\ Requiring
them, but not parents of children who do not qualify for Medicaid, to
use their personal resources to pay for health care provided through
Indian Health Programs is unreasonable. To be clear, CMS, like IHS,
will continue to require that State agencies seek reimbursement from
any private insurance or other health care coverage purchased for the
child, including coverage purchased by the noncustodial parent out of
the parent's personal assets. The proposed revision to 42 CFR
433.152(b)(1) also eliminates reference to 45 CFR Part 306 which was
repealed in 1996.
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\57\ For further information, see Laudan Y. Aron's report,
Health Care Coverage Among Child Support-Eligible Children (December
2002), available at http://aspe.hhs.gov/hsp/CSE-health-ben02/index.htm; Laura Wheaton's report, Nonresident Fathers: To What
Extent Do They Have Access to Private Health Insurance?, available
at http://fatherhood.hhs.gov/ncp-health00/index.htm; Cara James,
Karyn Schwartz and Julia Berndt, A Profile of American Indians and
Alaska Natives and Their Health Coverage (June 2000), available at:
http://www.kff.org/minorityhealth/7977.cfm; Sorensen, Elaine, A
National Profile of Nonresident Fathers and Their Ability to Pay
Child Support (1997), available at: http://www.jstor.org/stable/10.2307/353782; Elaine Sorensen, Liliana Sousa, and Simon Schaner,
Assessing Child Support Arrears in Nine Large States and the Nation
(2007), available at: http://aspe.hhs.gov/hsp/07/assessing-CS-debt/;
and U.S. Department of Interior, Bureau of Indian Affairs, 2005
American Indian Population and Labor Force Report, available at:
http://www.bia.gov/cs/groups/public/documents/text/idc-001719.pdf.
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In light of the IHS's policy, OCSE and CMS propose that State
Medicaid agencies not refer such cases and that IV-D agencies that
receive Medicaid reimbursement referrals based solely on health care
services, including contract health services, provided to IHS-eligible
children through an Indian Health Program, will be required to close
such cases, as these cases will have been inappropriately referred.
Pursuant to IHS' policy and CMS' proposed policy, there would be no
medical child support reimbursement obligation to pursue against any
custodial or noncustodial parents, and any recovery from insurance
policies would be outside the scope of the State IV-D agencies'
authority. It is our understanding that such Medicaid referrals are
common. The proposed corresponding child support case closure rule will
make clear that State IV-D agencies should not seek medical child
support based on the Medicaid referrals.
Finally, we propose to redesignate existing Sec. 303.11(c) as
Sec. 303.11(d) and to reorganize the provisions into subparagraphs for
clarity.
Under Sec. 303.11(d)(1) and (2), we also propose conforming
changes to address renumbered and proposed provisions that either
require notice to the recipient of services or, the initiating agency
in an intergovernmental case that meet the criteria for closure, 60
calendar days prior to closing the case of the State's intent to close
the case. In addition, we have added a proposal in Sec. 303.11(d)(4)
for a case meeting the criteria for closure in paragraph (b)(20) or (c)
that the IV-D agency must notify the referring agency, in a record, 60
calendar days prior to closure of the case of the State's intent to
close the case. Additionally, we propose in Sec. 303.11(d)(5) that if
the referring agency does not respond to the notice or does not provide
information demonstrating that child support services are needed for
the case, the IV-D agency may close the case. However, when the case is
closed, the IV-D agency must notify the recipient of services that the
case was closed under proposed paragraph (d)(6).
In Sec. 303.11(d)(6), we are also proposing a new requirement for
cases closed pursuant to paragraphs (b)(13) and (d)(5). The State must
notify the recipient that the case has been closed within 30 calendar
days of closing the case. This notice must also provide information
regarding reapplying for additional child support services and the
consequences of receiving IV-D services, including any State fees, cost
recovery, and distribution policies. If the recipient reapplies for
child support services in a case that was closed pursuant to paragraph
(b)(13), the recipient will complete a new application for IV-D
services and pay any applicable fee. If the recipient reapplies for
services in a case that was closed pursuant to paragraph (d)(5), the
recipient will complete a new application for IV-D services but will
not be charged a fee since the case was originally opened through an
inappropriate referral. We specifically seek comments related to these
post-closure notices.
It is important to note that after a IV-D agency has closed a case
pursuant to the procedures outlined in Sec. 303.11, the former
recipient of services may reapply for services at any time pursuant to
the last sentence of existing Sec. 303.11(c), which we propose to make
a new subparagraph and redesignate as Sec. 303.11(d)(7). Given that a
State will have more discretion to close unproductive cases under the
proposed rule, we request comments on redesignated Sec. 303.11(d)(7)
and whether the language is sufficiently clear to ensure that a former
recipient of services is able to reapply for and open a IV-D case.
Finally, we redesignated existing paragraph (d) as proposed paragraph
(e).
Section 303.31: Securing and Enforcing Medical Support Obligations
While the child support program has long been involved with
securing health care coverage for children, in the past, we have
focused narrowly on private coverage available through a noncustodial
parent's employer rather than taking full advantage of the many
coverage options available to children. However, the Deficit Reduction
Act of 2005 (DRA) (Pub. L. 109-171) made significant improvements to
medical child support by emphasizing the importance of securing health
care coverage. The DRA provided that the child support agency may look
to either or both parents to provide medical support, including health
care coverage and cash payments to defray the child's health care
costs. The DRA recognized that custodial families are a common, and in
many cases, a preferred source of insurance coverage for their children
because it is often simpler for children to be on the same policy as
their residential parent. The DRA also acknowledged that the cost of
coverage is a critical consideration. However, existing medical support
regulations focus narrowly on private insurance and do not allow
families the opportunity to choose from the full range of health care
coverage options that may be available to them.
In general, families in the Child Support Enforcement program have
limited access to employer-sponsored private insurance and are
disproportionately eligible for Medicaid and the Children's Health
Insurance Program (CHIP).\58\ A national research
[[Page 68565]]
study in the late 1990s, the most recent study of its kind, determined
that half of noncustodial parents who were not currently covering their
children did not have access to employer-sponsored family coverage at
all, before even considering cost.\59\ Since 1999, the average cost of
private family coverage has nearly tripled.\60\
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\58\ For further information, see Laudan Y. Aron's report,
Health Care Coverage Among Child Support-Eligible Children (2002),
available at http://aspe.hhs.gov/hsp/CSE-health-ben02/index.htm.
\59\ For further information, see Laura Wheaton's report,
Nonresident Fathers: To What Extent Do They Have Access to Private
Health Insurance? (2000), available at http://fatherhood.hhs.gov/ncp-health00/index.htm.
\60\ In 1999, the average premium for family coverage was $5,791
per year. In 2013, the average premium for family coverage was
$16,351 per year. For further information, see Kaiser/HRET Survey of
Employer-Sponsored Health Benefits, 2013, Exhibit 1.11, available
at: http://kff.org/report-section/ehbs-2013-section-1/.
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An analysis of selected States finds that issuing a National
Medical Support Notice to the noncustodial parent's employer results in
the child being enrolled in a health plan only 10 to 23 percent of the
time. Therefore, although States have worked hard and committed
substantial resources toward increasing the percentage of child support
orders that include medical support from 60 percent to 80 percent since
2002, medical support is actually provided as ordered in only 30
percent of cases.\61\ While employer-sponsored and other private
insurance is important for children who have access to it, most
uninsured children in custodial families (79 percent) are eligible for
Medicaid or CHIP. Therefore, to make sure that children get the
coverage they need, the child support system needs to be in a position
to take advantage of the full range of coverage options.
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\61\ Center for Policy Research, Medical Child Support:
Strategies Implemented by States, Prepared under Office of Child
Support Enforcement Grant #08-C0067 to Texas Office of the Assistant
Attorney Division of Child Support (2009).
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OCSE proposes to amend Sec. 303.31 to provide a State with
flexibility to permit parents to meet their medical support obligations
by providing health care coverage or payments for medical expenses that
are reasonable in cost and best meet the health care needs of the
child. Section 303.31 is amended by removing restrictions that exclude
the consideration of Medicaid, CHIP, and other State health programs as
part of medical support and by providing greater flexibility to a State
in defining the reasonable cost of health insurance. In accordance with
section 452(f) of the Act, the proposed changes provide a State with
options to define medical support to include private health insurance,
other health care coverage options such as Medicaid, CHIP, or other
coverage plans available in the State, and cash medical support.
In Sec. 303.31(a)(2) we propose to clarify that health insurance
includes public and private insurance. This is a clarification, as
``health insurance'' already includes both public and private coverage.
In Sec. 303.31(a)(3) we propose to omit the requirement that the
cost of health insurance be measured based on the marginal cost of
adding the child to the policy. In situations in which a parent may be
required to purchase a family health insurance policy, it may be
appropriate to consider the full cost the parent must pay for the
coverage when determining if the coverage is reasonable in cost.
Therefore, this proposed change gives a State additional flexibility to
define reasonable medical support obligations.
Next, Sec. 303.31(b) requires the State IV-D agency to petition
the court for private health insurance that is reasonable in cost. OCSE
proposes to remove the limitation in paragraphs (b)(1), (2), (3)(i),
and (4) restricting this to private health insurance to allow a State
to take advantage of both private and public health insurance options
to meet children's health care needs, and emphasize the role of state
child support guidelines in setting child support orders that address
how parents will share the costs associated with covering their child.
OCSE particularly requests comments regarding the IV-D program's role
in carrying out its medical support statutory responsibilities,
including the roles of cost allocation between parents and enrolling
children in coverage.
Section 303.72: Requests for Collection of Past-Due Support by Federal
Tax Refund Offset
The Federal Tax Refund Offset Program was enacted into law to
collect past-due child support payments from the Federal tax refunds of
parents who have been ordered to pay child support. A State is required
to submit all cases that meet the criteria for the Federal Tax Refund
Offset to OCSE for collection. In addition, under current OCSE
regulations, a State must notify any other State that is enforcing the
same case when that case is submitted for offset and when the
initiating State receives an offset. However, according to the current
Department of Treasury regulations, an initiating State is only
required to notify other States if it receives an offset.\62\
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\62\ See 31 CFR 285.3(c)(6).
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In order to make the regulatory requirements for the Federal Tax
Refund Offset more streamlined and more efficient, OCSE proposes to
modify its notice requirements to make them consistent with those of
the Department of Treasury. The proposed modification will eliminate a
mandate that inundates States with unnecessary case file information
and ultimately will make program management procedures in this area
more efficient.
States are required to submit all cases that meet specific criteria
for Federal Income Tax Refund Offset for collection through the Federal
Tax Refund Offset program. The Federal Tax Refund Offset program is a
collaborative effort between OCSE, the Department of the Treasury, and
State IV-D agencies.
Current OCSE regulations at Sec. 303.72(d)(1) require a State, in
interstate situations, to notify any other State involved in enforcing
the support order when it submits the case for offset and when the
State receives the offset amount. However, the United States Treasury
regulations at 31 CFR 285.3(c)(6) only require a State to notify any
other State involved in enforcing the child support order when it
receives the offset payment. In order to align these regulations with
those of the United States Treasury, OCSE proposes to amend Sec.
303.72(d)(1) by eliminating the phrase, ``when it submits an interstate
case for offset.''
State IV-D agencies have shared that when a State certifies and
submits an interstate case for tax refund offset, the information is
not particularly helpful to any other State involved in enforcing the
support order. If a responding State needs to know that a case has been
submitted for tax refund offset, this information is usually available
through the Federal Collections application or the QUICK application
\63\ accessed through the State Services Portal.\64\ For those States
that have programmed for the transaction, this information may also be
received through the Child Support Enforcement Network (CSENet) \65\
transaction that was developed to serve this purpose. OCSE believes
that by discontinuing the
[[Page 68566]]
requirement for a State to notify other States involved in enforcing a
support order when it submits an interstate case for tax refund offset,
a State will not inundate other States with unnecessary information and
will ultimately save both time and resources.
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\63\ QUICK stands for Query Interstate Cases for Kids. It is a
secure web application that allows child support workers to view
financial, case status, and case activities information in another
State's child support case in real time.
\64\ State Services Portal is an OCSE Internet-based
infrastructure that supports State worker access to child support
services via a secure, single sign-on interface. A State worker can
access multiple applications through this system.
\65\ Child Support Enforcement Network or CSENet, provides a
standardized format for State Child Support systems to generate and
process automated interstate child support information.
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Section 303.100: Procedures for Income Withholding
Recognizing that over two-thirds of child support payments are
collected by employers through income withholding, we propose to
standardize and streamline income withholding rules. These proposals
will increase child support collections and ensure that employers are
not unduly burdened by this highly effective enforcement tool. We
propose making changes in Sec. 303.100 to address two of the problems
employers have encountered in efficiently executing their
responsibilities for income withholding: The inconsistent use of the
OMB-approved Income Withholding for Support form and the transmission
of payments on non-IV-D orders to the appropriate SDU.
Child support payment processing has changed dramatically in the
past 30 years. In the 1970s, child support payments were paid by
noncustodial parents, primarily in cash or by check, directly to courts
or local child support agencies. In the 1980s and early 1990s, Congress
passed a series of laws that expanded and strengthened employer income
withholding as an enforcement tool. The Child Support Enforcement
Amendments of 1984 (Pub. L. 98-378), for example, added required
procedures for mandatory income withholding, and the Family Support Act
of 1988 (Pub. L. 100-485) required automatic income withholding for
most child support orders. As States and employers implemented the
income withholding provisions, they encountered barriers to payment
processing. A 1992 General Accounting Office (now the Government
Accountability Office) (GAO) report, Interstate Child Support: Wage
Withholding Not Fulfilling Expectations, highlighted pervasive problems
with the system in place. According to the GAO report, the lack of
uniform withholding procedures across States and counties, the failure
of timely service of withholding orders, and the tendency of States to
involve the courts or require additional procedures in the process
hampered effectiveness. These problems were compounded in interstate
cases.\66\ Similarly, a 1991 Office of Inspector General report on the
employer experience with income withholding found that employers were
encountering difficulties implementing income withholding in an
environment where State standards and procedures were confusing and
varied from State to State.\67\
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\66\ Government Accountability Office, Wage Withholding Not
Fulfilling Expectations, HRD-92-65BR (1992), available at: http://www.gao.gov/products/HRD-92-65BR.
\67\ U.S. Department of Health and Human Services, Office of
Inspector General, An Employer Perspective: Fragmentation of State
Practices Impair Ability of Employers to Effectively Implement Wage
Withholding Process (1991).
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In response to employer requests to minimize employer burden,
PRWORA included new provisions to strengthen income withholding,
including standardizing procedures.\68\ Specifically, section
466(b)(6)(A)(ii) of the Act requires that the notice given to the
employer for income withholding in all IV-D cases shall be ``in a
standard format prescribed by the Secretary, and contain only such
information as may be necessary for the employer to comply with the
withholding order.'' Section 466(a)(8)(B)(iii) of the Act requires that
section 466(b)(6)(A)(ii) of the Act be applicable also to non-IV-D
income withholding orders. In addition, section 454A(g)(1)(A)(ii) of
the Act requires that a State transmit orders and notices for income
withholding to employers (and other income withholders) using uniform
formats prescribed by the Secretary. As noted by the GAO in its 2002
report, these provisions clearly require all individuals and entities
to use the form developed by the Secretary of HHS to notify employers
of the income withholding order for child support in all IV-D and non-
IV-D cases.\69\
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\68\ For further information, see the Committee on Ways and
Means, U.S. House of Representatives, Summary of Welfare Reforms
Made by Public Law 104-193, Nov. 6, 1996, available at: http://www.access.gpo.gov/congress/wm015.txt, Section 314.
\69\ The GAO report, Child Support Enforcement: Clear Guidance
Would Help Ensure Proper Access to Information and Use of Wage
Withholding by Private Firms, GAO-02-349 (2002), available at:
http://www.gao.gov/new.items/d02349.pdf.
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In response to the PRWORA directive to prescribe a standard format
for income withholding, the Secretary of HHS developed the OMB-approved
Income Withholding for Support (IWO) form (also referred to as the OMB-
approved form). The interim final rule, 45 CFR 303.100(e)(1), issued on
February 9, 1999, implemented section 466(b)(6)(A)(ii) of the Act
requiring the use of the OMB-approved form (OMB 0970-0154). The
preamble to the rule states as follows:
Paragraph (f) [of 45 CFR 303.100] is redesignated as paragraph
(e). We are revising new paragraph (e)(1) by adding ``using the
standard Federal format'' after the word ``notice''. We are making
this revision to conform to section 466(b)(6)(A)(iii) of the Act
(sic), which requires the States to issue income withholding notices
in a standard format prescribed by the Secretary. On January 27,
1998, the Office of Child Support Enforcement distributed this
standard income withholding form to the States in OCSE-AT-98-03 (OMB
No. 0970-0154).\70\
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\70\ 64 Fed. Reg. 6237, 6244 (Feb. 9, 1999) (original quote
incorrectly refers to section 466(b)(6)(A)(iii), however, reference
is to requirements of section 466(b)(6)(A)(ii); see also AT-99-01,
February 10, 1999, available at: http://www.acf.hhs.gov/programs/cse/pol/AT/1999/at-9901.htm.
The OMB-approved form, though used consistently by State IV-D
agencies, is not used universally in non-IV-D cases by other entities,
which is contrary to the requirement in section 466(b)(6)(A) of the
Act. OCSE issued policy in 1999, 2001, and 2003 to clarify the
requirements for issuing and complying with the OMB-approved form and
complying with the child support order in OCSE PIQ-99-02, ``Order/
Notice to Withhold Income for Child Support,'' \71\ OCSE PIQ-01-01,
``Clarification on Use of the Federal Order/Notice to Withhold Income
for Child Support,'' \72\ and OCSE PIQ-03-03, ``Requirements for
Issuing and Complying with the Federal Income Withholding Form.'' \73\
These policies made it clear that the OMB-approved form must be used in
all income withholding cases. Despite this guidance, employers continue
to raise concerns to OCSE that they routinely receive court documents
and divorce decrees with income withholding instructions that are
frequently difficult to understand and are not accompanied by the OMB-
approved form.
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\71\ Available at: http://www.acf.hhs.gov/programs/cse/pol/PIQ/1999/piq-9902.htm.
\72\ Available at: http://www.acf.hhs.gov/programs/cse/pol/PIQ/2001/piq-01-01.htm.
\73\ Available at: http://www.acf.hhs.gov/programs/cse/pol/PIQ/2003/piq-03-03.htm.
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Upon receipt of the OMB-approved form, the employer must determine
if the form is regular on its face, meaning the employer determines
that the sender has correctly followed the instructions on the form.
Failure of individuals, private attorneys, and even some courts and
States to use the OMB-approved form results in confusion, delays, and
costly data processing for employers. To address this problem, we
propose clarifications in two places in the regulations. Currently,
Sec. 303.100(e) requires a State to use ``the standard Federal
format'' when sending notice to employers to initiate income
withholding on IV-D cases. In order to be as clear as possible, we
propose
[[Page 68567]]
changing this phrase to ``the required OMB-approved Income Withholding
for Support form.''
We also propose requiring the use of the OMB-approved form in a new
provision. In order to ensure that employers receive this standard form
when processing income withholding, regardless of the type of entity
sending the income withholding request and regardless of whether the
case is IV-D or non-IV-D, we propose adding a new paragraph (h) under
Sec. 303.100 titled ``Notice to employers in all child support
orders,'' which imposes this requirement.
While the language in the OMB-approved Income Withholding for
Support form must appear verbatim when transmitted to an employer, OCSE
recognizes and accepts that the variety of form-generation tools used
may result in minor formatting variations to the OMB-approved form
(e.g., inability to generate check boxes, different fonts, shading, and
spacing). Variations to the form that are not acceptable, however,
include addition or deletion of data or altering the general location
of information on the OMB-approved form. State laws may require States
to provide employers and obligees with certain state-specific income
withholding provisions. In these situations, States may include this
information on the OMB-approved form in the section for Additional
Information as directed in the instructions on the use of the form.
The second payment processing issue addressed in this section is
the transmission of income withholding payments from employers to SDUs.
Sections 454B and 466(b)(5) of the Act require employers to send income
withholding payments to the appropriate SDU, regardless of whether the
case is IV-D or non-IV-D. However, OCSE has received ongoing complaints
from employers about income withholding orders that instruct the
employer to send child support payments to individuals or entities
other than the SDU. The most common examples, particularly in respect
to non-IV-D cases, include instructions to send income withholding
payments to custodial parents, courts, private collection agencies, or
private attorneys.
Bypassing the SDU in the income withholding process creates a
significant burden on employers because these income withholding
payments must be processed manually. In addition, when payments are
diverted from the SDU, noncustodial parents do not receive proper
credit for the portion of income withheld to pay for child support,
payments to families are delayed, and confusion related to payment
allocation is created, particularly in multiple-family scenarios.
Under current Sec. 303.100(e)(1)(ii), employers are required to
send all payments on IV-D cases to the SDU, however, income withholding
payments on non-IV-D orders are not addressed in the rule. Therefore,
we propose to state explicitly under new paragraph Sec. 303.100(i),
that income withholding payments on non-IV-D cases must be directed
through the SDU.
Section 304.20: Availability and Rate of Federal Financial
Participation
We recognize that existing child support regulations governing
expenditures subject to Federal financial participation (FFP) are out
of date and do not reflect a growing body of research that supports the
effectiveness of a range of strategies that can help strengthen the
ability and willingness of noncustodial parents to support their
children. Accordingly, we propose to amend the regulations to increase
the flexibility of State IV-D agencies to receive Federal reimbursement
for cost-effective practices that increase the effectiveness of
standard enforcement activities. As the program has evolved over the
past decade, many State Child Support Enforcement programs have already
implemented these strategies.
Additionally, there is some uncertainty among some States about
what expenditures are eligible for Federal reimbursement. To update old
regulations, respond to State requests to allow Federal reimbursement
for a broader range of activities that can increase collections, and
address the uncertainty about allowability of expenditures, the
proposed rule clarifies that FFP is available for necessary and
reasonable expenditures properly attributed to the Child Support
Enforcement program for services and activities designed to carry out
the title IV-D State plan, including obtaining child support, locating
noncustodial parents, and establishing paternity.
Research supports a range of cost-effective strategies that can
help move nonpaying cases into paying status and increase regular
payments.\74\ Over the past decade, State, Tribal, and local Child
Support Enforcement programs have updated their program policies,
practices, and strategies to collect more child support payments for
families by addressing some of the underlying reasons for nonpayment.
For example, 21 States set child support obligations based on current
earnings and modify the order when earnings change; 44 States
compromise child support debt owed to the State; and 38 States have
eliminated any legal standard that treats incarceration as ``voluntary
unemployment.'' In addition, a number of States, such as Texas,
Tennessee, and Oregon, recognizing the relationship between payment of
child support and playing an active parenting role, address parenting
time as part of their State child support guidelines.
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\74\ For further information, see Kye Lippold and Elaine
Sorensen, Strengthening Families Through Stronger Fathers: Final
Impact Report for the Pilot Employment Programs (2011), available
at: http://www.urban.org/UploadedPDF/412442-Strengthening-Families-
Through-Stronger-Fathers.pdf; Daniel Schroeder and Nicholas Doughty,
Texas Non-Custodial Parent Choices: Program Impact Analysis (2009),
available at: http://www.utexas.edu/research/cshr/pubs/pdf/NCP_Choices_Final_Sep_03_2009.pdf; and Center for Policy Research
and Policy Studies, Inc., Child Access and Visitation Programs:
Participant Outcomes: Program Analysis (2007), available at: http://www.acf.hhs.gov/programs/cse/pol/DCL/2007/dcl-07-15a.pdf.
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As States have begun to incorporate programs and activities to
supplement their law enforcement practices for enforcing child support,
we recognize that existing child support regulations governing the
availability of FFP for child support expenditures, Sec. Sec. 304.20-
304.23, are out of date. Federal financial participation represents the
Federal match available to reimburse a portion of the State's
operational expenditures incurred under the State IV-D plan.
Currently, the regulations do not consistently recognize the range
of cost-effective approaches to increasing collections that complement
traditional and often costly law enforcement practices such as contempt
hearings, criminal prosecution, and jail. While there continues to be a
role for these traditional law enforcement practices, the NPRM
increases State flexibility within existing statutory authority to
implement and receive reimbursement for necessary and reasonable
activities properly attributed to the Child Support Enforcement program
that complement standard automated tools and improve program outcomes.
For the most part, the existing rules governing FFP were
promulgated more than 30 years ago before modern program models were
developed. These rules are formulated as a specific and limited list of
``necessary'' activities for which FFP is available. The existing rules
do not clearly state that FFP also is available for activities to carry
out the State plan that may not be on the list but are within the
program's statutory authority and are otherwise reasonable and properly
attributed to the Child Support Enforcement program. For
[[Page 68568]]
many years, States have regularly claimed and received reimbursement
for such expenditures, but there continues to be some lingering
uncertainty about whether FFP is available. Accordingly, we propose to
amend the rules to make the standard clear that FFP is available for
``necessary and reasonable expenditures properly attributed to the
Child Support Enforcement program, including but not limited'' to the
activities listed in the rule.
We are specifically requesting comments regarding the allowability
of FFP for using electronic monitoring systems for child support
purposes. These electronic monitoring systems may enable the
noncustodial parent, cited for contempt of court for non-payment of
support, to work and pay child support as an alternative to
incarceration. If the noncustodial parent is allowed to work, the
family continues to receive needed income, and the accumulation of
additional arrearages is avoided. We are interested in comments on how
and under what circumstances child support programs would propose to
use electronic monitoring devices for child support program purposes.
Additionally, we are soliciting comments regarding the desirability to
provide Federal reimbursement under the title IV-D program for the use
of electronic monitoring systems in child support cases.
We propose to amend subparagraph (a)(1) of Sec. 304.20 to clarify
that FFP is available for expenditures for child support services and
activities necessary and reasonable to carry out the title IV-D State
plan. This change reflects the OMB Cost Principles for State, Local,
and Indian Tribal Governments (OMB Circular A-87), published at 2 CFR
part 225.\75\ Appendix A to 2 CFR part 225 indicates that a State must
ensure the funds are used in compliance with all applicable Federal
statutory and regulatory provisions, costs are reasonable and necessary
for operating these programs, and funds are not used for general
expenses required to carry out other responsibilities of the State and
its subrecipients. Additionally, the Appendix indicates that for costs
to be allowable, they must be necessary and reasonable for proper and
efficient performance and administration of Federal awards. It further
defines that a cost is reasonable if, in its nature and amount, it does
not exceed that which would be incurred by a prudent person under the
circumstances prevailing at the time the decision was made to incur the
cost.
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\75\ Available at: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title02/2cfr225_main_02.tpl.
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We also propose revisions to paragraph (b) of this section to
specify that FFP is available for necessary and reasonable expenditures
which are properly attributed to the Child Support program, such as
development and dissemination of educational materials about the child
support program, child support educators or liaisons, child support
case management, domestic violence safeguards, referrals to other
programs, and other cost-effective activities to help carry out the
State plan.
We propose changes to Sec. 304.20(b)(1)(viii)-(ix) which address
the establishment of agreements with other agencies administering the
titles IV-D, IV-E, XIX, and XXI programs, to recognize activities
related to cross-program coordination, client referrals, and data
sharing when authorized by law. The proposed provisions include minor
technical changes and specify the criteria necessary for these
agreements. Proposed Sec. 304.20(b)(1)(viii)(D) and (E) add to the
list of criteria procedures to be used to coordinate services and
agreements to exchange data as authorized by law. Proposed Sec.
304.20(b)(1)(ix) specifies that FFP is also available for the
establishment of agreements with the CHIP program, along with the
Medicaid program. Proposed revisions to Sec. 304.20(b)(1)(ix)(B)
clarify that a criterion for the agreement is the procedures to be used
to coordinate services. Proposed revisions to Sec. 304.20(b)(1)(ix)(C)
specify that the criteria for agreements with Medicaid and CHIP
agencies include provisions related to the exchange of data as
authorized by law.
For reasons cited above, we propose to amend Sec. 304.20(b)(2) by
clarifying that FFP is available for services and activities for the
establishment of paternity, including but not limited to the specific
activities listed in Sec. 304.20(b)(2). We propose to add educational
and outreach activities to Sec. 304.20(b)(2)(vii) to clarify that FFP
is available for IV-D agencies to educate the public and to develop and
disseminate information on voluntary paternity establishment. We also
propose to amend Sec. 304.20(b)(3) by clarifying that FFP is available
for services and activities for the establishment and enforcement of
support obligations includes but is not limited to the specific
activities listed in Sec. 304.20(b)(3).
We are proposing to redesignate existing Sec. 304.20(b)(3)(v) as
Sec. 304.20(b)(3)(viii). We have added a paragraph (b)(3)(v) to allow
FFP for bus fare or other minor transportation expenses to allow
participation by parents in child support proceedings and related
activities such as genetic testing appointments.
In addition, we have specifically included new rule provisions
under paragraph (b)(3)(vi) to authorize FFP for activities designed
both to increase parents' pro se access to child support proceedings
and to encourage States to develop nonadversarial dispute resolution
alternatives to a standard adjudicative hearing. The outcome of a child
support proceeding has a substantial impact on parents' financial
circumstances and, in some States that conduct civil contempt
proceedings, can result in jail time and loss of liberty for
noncustodial parents. It is highly important to encourage informed
participation by both parents in those proceedings. Most custodial and
noncustodial parents in the IV-D caseload are not represented by
private attorneys and are attempting to navigate legal proceedings on a
pro se basis. At the same time, many States have sought to reduce the
adversarial nature of child support proceedings in order to positively
engage both parents, reduce conflict between the parents which can be
harmful to their children, and increase compliance with support orders
and customer satisfaction. In addition, resolving cases outside the
court system can help reduce delays, and save money and court time.
Thus, we have added paragraph (b)(3)(vi) to recognize that FFP is
available to increase pro se access to adjudicative and alternative
dispute resolution processes in IV-D cases.
We also propose to add paragraph (b)(3)(vii) to allow FFP for de
minimis costs associated with the inclusion of parenting time
provisions entered as part of a child support order and incidental to a
child support enforcement proceeding. Under State laws, child support
and child access rights are legally separate and independent rights and
responsibilities. While Congress has authorized the IV-D program to
establish child support, and not to resolve child access disputes, we
have concluded that the mere inclusion of a parenting time provision in
a IV-D order when all parties are present at the proceeding and
willingly agree to the provision should be allowed when the activity is
incidental to the child support proceeding and the added cost is de
minimis or nonexistent.
In light of the research showing appreciable gains in child support
payments when job services are made available to unemployed
noncustodial
[[Page 68569]]
parents, we propose to add paragraph (b)(3)(ix) to allow FFP for
certain job services for noncustodial parents owing child support
through the IV-D program that are reasonably expected to increase child
support payments. Many State and local child support programs have
developed partnerships to provide employment services for parents using
a variety of funding streams, such as incentive payments, grants, TANF
and Workforce Investment Act (WIA) funding, and private funding.
However, State child support agencies have expressed concern that
existing funding sources are inadequate to maintain a sufficient level
of services on an ongoing basis and at scale. The paucity of
sustainable resources available for noncustodial parent employment
programs have limited child support agencies and courts trying to
collect support from unemployed parents, leaving them with few
effective options for securing child support for the children who need
it.
OCSE anticipates that most State child support agencies will
purchase job services by entering into contracts with private and
community-based employment, fatherhood, and prisoner re-entry programs,
community action agencies, community colleges, or other service
providers to deliver allowable job services, rather than offer the
services in-house. However, this does not preclude a child support
agency from providing job services to noncustodial parents directly. In
addition, OCSE encourages child support agencies to develop and
maintain partnerships with TANF, SNAP, workforce agencies, including
Workforce Investment Boards, and American Job Centers to offer
available job services to noncustodial parents whenever those resources
are available. We also encourage State child support agencies to use
all available resources with other organizations that can offer
additional employment and training activities beyond those allowed
under our rule.
We propose to delete ``and'' at the end of Sec. 304.20(b)(9) and
to add ``and'' at the end of Sec. 304.20(b)(11). Finally, we propose a
new paragraph (b)(12) to allow FFP for the educational and outreach
activities intended to inform the public, parents and family members,
and young people who are not yet parents about the Child Support
Enforcement program, responsible parenting and co-parenting, family
budgeting, and other financial consequences of raising children when
the parents are not married to each other. We believe that these
educational and outreach activities are cost-effective strategies to
teach the public about the financial and emotional consequences of
parenting and provide information about child support services that may
be properly attributed to the child support program.
Section 304.23: Expenditures for Which Federal Financial Participation
Is Not Available
For paragraph (d), we are proposing to add ``State and county
employees and court personnel'' as a technical clarification that
Federal financial participation is not available for the education and
training of personnel, but this provision does not apply to other types
of education and training activities (such as those provided to
parents, which are addressed in other rules). We will continue to pay
FFP for the short-term training provided to IV-D staff, as well as
reasonable and essential short-term training related to hospital-based
voluntary paternity acknowledgment programs pursuant to Sec.
304.20(b)(2)(viii) and reasonable and essential short-term training of
court and law enforcement staff assigned on a full or part time basis
to support enforcement functions under the cooperative agreement
pursuant to Sec. 304.21(a)(2).
AT-81-18, ``Definition of Short Term Training,'' dated September
11, 1981, defines ``short-term training'' to be any training that would
directly improve an individual's ability to perform his or her current
job or another IV-D-related job.\76\ However, short-term training is
not related to providing a general education for an individual or
training that is taken for the sole purpose of earning credit hours
toward a degree or certificate. FFP is available under the above
definition of short-term training regardless of the source of the
training.
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\76\ Available at: http://www.acf.hhs.gov/programs/cse/pol/AT/1981/at-8118.htm.
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Section 307.11: Functional Requirements for Computerized Support
Enforcement Systems in Operation by October 1, 2000
As discussed previously in the NPRM under the Case Closure section,
Section 459(h) of the Act provides that only benefits that are based
upon employment remuneration are subject to child support garnishment.
Supplemental Security Income (SSI) is a means-tested program that is
not based upon remuneration from employment. Federal policy on child
support garnishments recognizes these exceptions by clearly directing
child support agencies not to collect against SSI benefits (either
directly or from bank accounts). Currently OCSE estimates that about
three percent of noncustodial IV-D parents are currently receiving SSI.
Most State IV-D agencies, including California, Florida, Ohio, and
Pennsylvania, have front-end procedures in place to prevent garnishment
of exempt benefits, and all State IV-D agencies have back-end
procedures in place to correct improper garnishments. To our knowledge,
improper State garnishment is very rare. However, the harm to the
beneficiaries can be severe. We think it is important to have
procedures in place to ensure that these noncustodial beneficiaries do
not have their SSI or other needs-based benefits garnished, and if
these benefits are incorrectly garnished, to ensure that the funds are
quickly refunded. In this NPRM, we are proposing to strengthen our
policies and incorporate provisions to provide additional safeguards so
low-income noncustodial parents' financial accounts are not garnished
when they are only receiving these exempt benefits, which retain their
character as exempt even after being deposited.
We propose a minor editing revision to paragraph (c)(3) and add a
new provision under subparagraph (c)(3)(i) to require a IV-D agency to
develop automated procedures in its statewide computerized support
enforcement system to identify cases which have been previously
identified as involving a noncustodial parent who is a recipient of SSI
to prevent automatic garnishment of the noncustodial parent's financial
account. We propose to extend similar protection to recipients of
concurrent SSI and benefits under title II as we believe these
noncustodial parents are in similar financial straits. The State must
review these noncustodial parents' financial accounts to determine
whether there are available assets above subsistence level available to
garnish, other than SSI or concurrent SSI and benefits under title II
of the Act. We believe that these new procedures will provide
safeguards for the beneficiary to ensure that his or her SSI or
concurrent SSI and benefits under title II of the Act are not
inappropriately garnished.
We are also adding a new subparagraph (c)(3)(ii) to require a IV-D
agency to have automated procedures in place to return funds to a
noncustodial parent within 2 days after the agency determines that SSI
or concurrent SSI and benefits under title II of the Act in the account
have been incorrectly garnished. We believe that if SSI or concurrent
SSI and benefits under title II of the Act have been garnished from a
noncustodial parent's financial account, the IV-D agency
[[Page 68570]]
needs to have procedures to refund the monies quickly so that it does
not cause undue economic hardship. We recognize there may be situations
in which the noncustodial parent's SSI or concurrent SSI and benefits
under title II of the Act are garnished because the IV-D agency was not
aware the recipient was receiving these benefits until after the
beneficiary's bank account is garnished. However, if this occurs, we
believe that it is imperative that the refund is sent to the
noncustodial parent within 2 days. We specifically seek comments on
whether this time frame is reasonable, and ways that OCSE might be able
to assist State IV-D agencies in meeting these requirements.
SSI accounts managed by representative payees (individuals or
organization appointed by SSA to receive benefits for someone who
cannot manage or direct someone else to manage his or her benefits) are
clearly identified by the financial institution as representative payee
accounts, with the beneficiary having sole ownership of the funds in
the account. The representative payee is identified as a financial
agent on the account, and does not have an ownership interest in the
account. Therefore the SSI beneficiaries with representative payees
would be covered by the same protections and safeguards against bank
account garnishment as an account held directly by the beneficiary.
Request for Comments on Undistributed and Abandoned Collections
A paramount policy goal for child support agencies is to distribute
the child support collection to the family, and failing diligent
efforts to do so, to return the payment to the noncustodial parent.
Therefore, it is important for OCSE to ensure that State child support
agencies are making concerted efforts to proactively locate the
custodial parent or noncustodial parent, as well as making efforts to
ensure that all collections are distributed. Therefore, in this NPRM,
we ask State child support agencies to provide specific comments,
including information about their policies and procedures related to
both undistributable and abandoned child support collections and the
efforts that States take both through the State child support agency
and the State treasury office to maximize the probability that families
receive the collections, or if that result cannot be achieved, that the
payment is returned to the noncustodial parent.
Topic 2: Updates To Account for Advances in Technology Sec. Sec.
301.1, 301.13, 302.33, 302.34, 302.50, 302.65, 302.70, 302.85, 303.2,
303.5, 303.11, 303.31, 304.21, 304.40, 305.64, 305.66, and 307.5
As discussed earlier in the preamble, the second set of revisions
proposed in this regulation encompasses updates to remove barriers to
electronic communication and document management. Throughout the
regulation, where appropriate, we propose removing the words
``written'' and ``in writing'' and inserting ``record'' or ``in a
record.'' These simple changes will allow OCSE, States, and others the
flexibility to use cost-saving and efficient technologies, such as
email or electronic document storage, wherever possible. The proposed
revisions to the regulation do not require a State to use electronic
records for the specified purpose, but instead provide a State with the
option to use electronic records, in accordance with State laws and
procedures.
The definition of ``record'' we propose in this regulation is taken
from UIFSA 2001, section 102(15). The UIFSA drafters adopted the
definition from another uniform law, the Uniform Electronic
Transactions Act (1999). ```Record' means information that is inscribed
on a tangible medium or that is stored in an electronic or other medium
and is retrievable in perceivable form.'' The Uniform Electronic
Transactions Act describes this definition further:
This is a standard definition designed to embrace all means of
communicating or storing information except human memory. It
includes any method for storing or communicating information,
including ``writings.'' A record need not be indestructible or
permanent, but the term does not include oral or other
communications which are not stored or preserved by some means.
Information that has not been retained other than through human
memory does not qualify as a record. As in the case of the terms
``writing'' or ``written,'' the term ``record'' does not establish
the purposes, permitted uses or legal effect which a record may have
under any particular provision of substantive law. ABA Report on Use
of the Term ``Record,'' October 1, 1996.\77\
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\77\ See comments to the Uniform Electronic Transactions Act
(1999), section 2, Definitions, available at: http://www.law.upenn.edu/bll/archives/ulc/uecicta/eta1299.htm.
Substituting the phrase ``in a record'' for ``in writing'' allows
more flexibility for electronic options by preventing a record from
being automatically denied legal effect or enforceability just because
it is in an electronic format. In addition, the use of the word
``record'' is designed to be technologically neutral; the word equates
an electronic signature with a hand signature and an electronic
document (whether scanned or created electronically) with a paper
document. It neither means that electronic documents or electronic
signatures will be required, nor will it affect any Federal
requirements for what documents must contain to be valid or
enforceable, such as a signature.
We are aware that not everyone has access to the latest technology.
For that reason, wherever individual members of the public are
involved, we generally have not proposed removing requirements that the
information is provided in a written format. However, we invite
comments on this approach and whether individual members of the public
should be provided the option to request information ``in writing'' or
``in a record'', such as emails, text messaging, voice mails. In
addition, we have not changed regulatory language where written formats
are required by statute. We request comments on this approach as well,
in general or referencing specific provisions.
Finally, we acknowledge that some of the proposed revisions to
insert the term ``record'' may seem awkward. We propose using the term
``record'' because it maximizes flexibility and reflects terminology
currently accepted within the child support community; however, we
invite comments on this approach generally and request specific
suggestions for alternatives. An example of an alternative approach
might be for OCSE to define the terms ``written'' or ``in writing'' in
the regulations to include electronic formats. OCSE could then leave
the existing regulatory language as is. This alternative approach would
provide States the option to use electronic formats as may be permitted
or limited by State law procedures and requirements.
Part 301 (Sec. Sec. 301.1 and 301.13): State Plan Approval and Grant
Procedures
We propose to make changes to two sections in part 301, ``State
Plan Approval and Grant Procedures.'' First, in Sec. 301.1, we propose
amending the definition of ``Procedures'' by changing the phrase
``written instructions'' to ``instructions in a record.'' This will
allow instructions set forth under the State's child support plan to be
made in a perceivable form that is not limited to a written format.
In addition, we propose inserting the definition for the term
``record'' (as discussed above). The use of the term ``record'' is
broader than the term ``written'' and encompasses different
[[Page 68571]]
ways of storing information, including, for example, in a written or an
electronic document.
The first sentence of the introductory paragraph of Sec. 301.13,
``Approval of State plans and amendments,'' describes the State plan as
consisting of written documents furnished by the State to cover its
Child Support Enforcement program under title IV-D of the Act. We
propose replacing the words ``written documents'' with the word
``records.'' The intent of this change is to allow for electronic
submission, transmission, and storage of the State child support plan.
When a State submits State child support plans electronically, it must
ensure electronic signatures accompany the documents.
Paragraphs (e) and (f), ``Prompt approval of the State plan'' and
``Prompt approval of plan amendments,'' respectively, discuss the
deadline by which OCSE must make a determination on a State plan or
State plan amendments submitted by the State, and allow for the OCSE
regional program office and the State to agree to an extension on the
deadline in ``a written agreement.'' We propose changing the words ``a
written agreement'' in both provisions to ``an agreement, which is
reflected in a record.'' These changes will enable OCSE regional
program offices to secure from IV-D agencies agreements to extend an
approval deadline for either a State plan or State plan amendments in
an electronic record format. In addition, we propose a technical change
to paragraph (f) to change ``Regional Commissioner'' to ``Regional
Office'' for consistency with Sec. 301.13.
Part 302 (Sec. Sec. 302.33, 302.34, 302.50, 302.65, 302.70, and
302.85): State Plan Requirements
We propose to make changes to several sections in part 302, ``State
Plan Requirements.'' First, Sec. 302.33(d)(2), which discusses the
recovery of State costs of providing services in nonassistance cases,
requires a State to develop a written methodology to determine
standardized costs which are as close to actual costs as is possible.
We propose changing the phrase ``written methodology'' to
``methodology, which is reflected in a record.'' This proposed change
will afford a State record-keeping flexibility in developing a
methodology for recovering standardized costs.
Currently, the first sentence under Sec. 302.34 requires a State
to enter into written agreements for cooperative arrangements under
Sec. 303.107 with appropriate courts, law enforcement officials,
Indian tribes, or tribal organizations. We propose editing the phrase
``written agreements'' to read ``agreements, which are reflected in a
record.'' This will ensure that any cooperative arrangements entered
into by the IV-D agency can be agreed upon in a record and will not be
limited to a written format. This amendment does not change any of the
requirements for the document to be legally effective or enforceable,
such as a signature.
Next, Sec. 302.50 describes State requirements for the assignment
of rights to support. Paragraph (b)(2) of that section requires a State
to determine ``in writing'' the amount of an obligation, if there is no
court or administrative order. We propose replacing the word
``writing'' with ``a record'' so that the State has greater flexibility
in the format of this amount determination, according to its own State
laws and guidelines procedures.
We also propose changes in Sec. 302.65, ``Withholding of
unemployment compensation.'' Paragraph (b) requires a State IV-D agency
to enter into a written agreement with the SESA [State employment
security agency] in its State for the purpose of withholding
unemployment compensation from individuals with unmet support
obligations.\78\ We propose amending the sentence by changing the
phrase ``a written agreement'' to ``an agreement, which is reflected in
a record'' and as previously explained in footnote 76, replace SESA
with SWA. Additionally, Sec. 302.65(c)(3) requires State IV-D agencies
to establish and use written criteria for selecting cases to pursue via
the withholding of unemployment compensation for support purposes. We
propose changing the words ``written criteria'' to ``criteria, which
are reflected in a record.'' These changes will establish that the
agreements States develop with SESAs and the criteria for selecting
cases in which to pursue withholding unemployment compensation are not
limited to written agreements or written criteria. Again, these
amendments do not impact any of the requirements for the documents to
be legally effective or enforceable, such as a signature.
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\78\ Please note, as discussed under Topic 3, Technical
Corrections, we also propose replacing the State employment security
agency (SESA) with State workforce agency (SWA) in this section and
Sec. Sec. 303.3 and 308.2.
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In Sec. 302.70, ``Required State laws,'' paragraph (a)(5)
describes the procedures for paternity establishment. Paragraph
(a)(5)(v) discusses requirements for objecting to genetic testing
results and states that if no objection is made, a written report of
the test results is admissible as evidence of paternity without the
need for foundation testimony or other proof of authenticity or
accuracy. We propose changing the phrase ``a written report of the test
results'' to ``a report of the test results, which is reflected in a
record.'' We believe this change will provide greater flexibility and
efficiency in admitting evidence of paternity. Please note that in this
same provision, we have not proposed to eliminate the phrase ``in
writing'' in the requirement that any objection to genetic testing
results must be made in writing within a specified number of days
before any hearing at which such results may be introduced into
evidence. In this instance, the phrase ``in writing'' is statutorily
prescribed, according to section 466(a)(5)(F)(ii) of the Act.
The final proposed change under State Plan Requirements is in Sec.
302.85 on the ``Mandatory computerized support enforcement system.'' In
the section describing the basis for OCSE to grant State waivers in
regard to the mandatory computerized system, one of the requirements,
described under Sec. 302.85(b)(2)(ii), mandates the State to provide
written assurances that steps will be taken to otherwise improve the
State's Child Support Enforcement program. We propose amending Sec.
302.85(b)(2)(ii) by changing the phrase ``written assurances'' to
``assurances, which are reflected in a record.'' This change will
provide a State the option of communicating with OCSE electronically
when providing the required assurances under this provision.
Part 303 (Sec. Sec. 303.2, 303.5, 303.11, and 303.31): Standards for
Program Operations
We are proposing to make amendments to several provisions in part
303, ``Standards for Program Operations.'' In Sec. 303.2,
``Establishment of cases and maintenance of case records,'' the
regulation requires, under Sec. 303.2(a)(2), that the State IV-D
agency send an application to an individual within no more than five
working days of a written or telephone request. We propose replacing
the phrase ``a written or telephone request'' with ``a request made by
telephone or in a record,'' in order to allow for any requests for
applications that are received by telephone or transmitted
electronically, for example, by email or text.
In this same section, we also propose changes to the requirements
for applications for IV-D services, under Sec. 303.2(a)(3). Currently,
this section defines an application as a written document provided by
the State which . . . is signed by the individual
[[Page 68572]]
applying for IV-D services. We propose lifting the restriction that
applications only be in a written or paper format by replacing the
phrase ``written document'' with ``record.'' We also propose amending
the regulatory language to allow for electronic signature by inserting
the phrase ``electronically or otherwise'' after the word
``signature.'' The proposed sentence would state that an application is
a record that is provided or used by the State which indicates that the
individual is applying for child support enforcement services under the
State's title IV-D program and is signed, electronically or otherwise,
by the individual applying for IV-D services.
These proposed changes are in accordance with PIQ 09-02, which
allows States to use electronic signatures on applications, as long as
it is allowable under State law.\79\ As noted in PIQ 09-02, the
appropriateness of the use of electronic signatures must be carefully
determined by States. In making this determination, States should
consider the reliability of electronic signature technology and the
risk of fraud and abuse, among other factors.
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\79\ Available at: http://www.acf.hhs.gov/programs/cse/pol/PIQ/2009/piq-09-02.htm.
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Section 303.5 describes program standards for paternity
establishment. Subparagraph (g)(6) of that section requires the State
to provide training, guidance, and ``written instructions'' regarding
voluntary acknowledgment of paternity to hospitals, birth record
agencies, and other entities that participate in the State's voluntary
acknowledgment program. We propose changing the phrase ``written
instructions'' to ``instructions, which are reflected in a record.''
This change will allow a State the flexibility to provide program
instructions in electronic formats, in addition to, or in place of,
written instructions.
Next, we propose a change to the requirements for the closure of
IV-D cases, under proposed Sec. 303.11(d). This provision describes
the process by which a State must notify service recipients, or, in
regard to intergovernmental IV-D cases, the process by which responding
agencies must notify initiating agencies, of their intent to close a
case. The provision requires this notification be ``in writing.'' In
order to allow for greater efficiency and flexibility, we propose
allowing electronic notification in the instance of intergovernmental
IV-D case closure when the responding agency is communicating with the
initiating agency. However, we do not propose changing the ``written''
notification requirement from a State to the recipient of services,
because of our general approach not to remove written requirements
where members of the public are involved, as described earlier.
However, we invite comments on this approach and whether a recipient of
services should be provided the option to request the case closure
notice ``in writing'' or ``in a record'', such as emails, text
messaging, voice mails.
Next, we propose amending the introductory language in Sec.
303.31(b)(3) by changing the phrase ``written criteria'' to ``criteria,
which are reflected in a record,'' so that criteria established to
identify cases where there is a high potential for obtaining medical
support can be either in an electronic or written format.
Part 304 (Sec. Sec. 304.21 and 304.40): Federal Financial
Participation
We propose two changes to part 304, ``Federal Financial
Participation (FFP).'' Under Sec. 304.21, ``Federal financial
participation in the costs of cooperative arrangements with courts and
law enforcement officials,'' the regulations describe activities, under
Sec. 304.21(a), that are eligible for FFP reimbursement, provided they
are ``performed under written agreement.'' We propose amending this
section by changing the words ``written agreement'' to ``agreement,
which is reflected in a record,'' to provide flexibility in the format
of the agreements between a State and courts or law enforcement
officials.
In addition, Sec. 304.40, ``Repayment of Federal funds by
installments,'' describes the procedures the State must follow in order
to repay unallowable FFP funds to the Federal Government in
installments. Section 304.40(a)(2) requires a State to notify the OCSE
Regional Office in writing of its intent to make installment
repayments. We propose changing the phrase ``in writing'' to ``in a
record.'' This change will give a State the option of notifying the
Regional Office electronically of its intent to repay Federal funds in
installments.
Part 305 (Sec. Sec. 305.64 and 305.66): Program Performance Measures,
Standards, Financial Incentives, and Penalties
Under part 305, ``Program Performance Measures, Standards,
Financial Incentives, and Penalties,'' we propose changes to Sec. Sec.
305.64 and 305.66. First, in Sec. 305.64, ``Audit procedures and State
comments,'' a State may submit ``written comments'' in response to the
interim audit report within a specified timeframe under Sec.
305.64(c). We propose changing ``written comments'' to ``comments,
which are reflected in a record,'' allowing IV-D agencies to submit
comments on an interim audit report in a perceivable format other than
in a written format, if appropriate. In this same provision, Sec.
305.64(c), we also propose a change to omit the phrase ``by certified
mail'' from the second sentence of this paragraph since OCSE currently
sends these reports electronically and by overnight mail.
An additional proposed change affects Sec. 305.66, ``Notice,
corrective action year, and imposition of penalty.'' Under Sec.
305.66(a), if a State is found to be subject to a penalty, OCSE ``will
notify the State in writing of such finding.'' We propose to replace
``in writing'' with ``in a record'' so that OCSE can notify the State
that it is subject to a penalty in a perceivable or electronic format,
not just in a written format.
Part 307 (Sec. 307.5): Computerized Support Enforcement Systems
In this section on proposed updates for advancements in technology,
we propose one change to part 307, ``Computerized Support Enforcement
Systems.'' In the section on mandatory systems, Sec. 307.5, one of the
three conditions for a waiver of any functional systems requirement or
for a waiver of any conditions for APD approval is the State provides
written assurance that steps will be taken to otherwise improve the
State's Child Support Enforcement program, Sec. 307.5(c)(3). We
propose amending this section by changing ``written assurance'' to
``assurance, which is reflected in a record,'' so that a State can
provide assurance in a perceivable format other than a written format,
if it so chooses.
Topic 3: Technical Corrections (Sec. Sec. 301.15; 302.14; 302.15;
302.32; 302.34; 302.65; 302.70; 303.3; 303.7; 303.11; 304.10; 304.12;
304.20; 304.21; 304.23; 304.25; 304.26; 305.35; 305.63; 308.2; 309.85;
309.130; 309.145; and 309.160)
We propose a number of technical corrections that update, clarify,
revise, or delete existing regulations to ensure that the child support
enforcement regulations are accurate, aligned, and up-to-date.
Section 301.15: Grants
State agencies that administer the Child Support Enforcement
Program under Title IV-D of the Act are required to provide information
each fiscal quarter to OCSE concerning administrative expenditures and
the
[[Page 68573]]
receipt and disposition of child support payments from noncustodial
parents. The enactment of PRWORA changed a number of the requirements
affecting financial data needs. In September 1997, Form ACF-396 was
introduced and approved by OMB for interim use for the reporting of
expenditures, estimates, and projections while OCSE continued its
review of the newly-enacted statutory changes. During that time, and as
a result of the efforts of a Federal-State partnership representing all
interested parties and individuals, new financial reporting forms were
developed. These forms provide OCSE with the information needed to
complete its various financial and reporting responsibilities with
minimal collection and reporting burden on State agencies. The new
reporting forms, the OCSE-396A and the OCSE-34A, replaced all previous
form versions.
State IV-D agencies are required to report quarterly expenditures
and collections using Forms OCSE-396A and OCSE-34A, respectively. The
information collected on these reporting forms is used to compute State
quarterly grant awards and annual incentive payments. These forms
provide valuable information on State program finances.
Currently, Sec. 301.15 does not reference the new forms and
ultimately relies on outdated reporting requirements. In order to bring
that section into alignment with current program operations, we propose
to rename paragraph (a) Financial reporting forms and to delete
subparagraph (3). We also propose to replace subparagraph (1) Time and
place and subparagraph (2) Description of forms with definitions of
Form OCSE-396A and Form OCSE-34A, respectively.
We also propose to rename paragraph (b) Review as Submission,
review, and approval and to add under paragraph (b) the following: (1)
Manner of submission; (2) Schedule of submission; and (3) Review and
approval. Current Sec. 301.15(a)(1) indicates that the expenditure
report has to be submitted 30 days following the end of a fiscal
quarter, but the estimate for a grant has to be submitted within 45
days prior to the period of the estimate. Additionally, the current
reporting instructions for the expenditure and collections reports
require States to submit the forms no later than 30 days following the
end of each fiscal quarter. We are proposing, therefore, that the
Schedule of submission section be modified so that the financial forms
must be submitted no later than 45 days following the end of each
fiscal quarter. This will be a change of policy for the expenditure and
collections reports and will require revision to the instructions for
the reports, if the proposal is accepted. This proposed modification
will afford a State more time to submit its financial reports. The
other revisions in this paragraph reflect the current operating
procedures and processes that are currently in place.
Additionally, we propose to revise paragraph (c) Grant award by
deleting its existing language and replacing that language with three
subparagraphs (1) Award documents; (2) Award calculation; and (3)
Access to funds. Finally, we also propose to delete paragraph (d)
Letter of credit payment system and replace it with a new provision
describing administrative requirements, titled General requirements.
These revisions are proposed to align the regulations with the current
operating procedures.
Section 302.14: Fiscal Policies and Accountability
In 1988, the Department implemented the common rule at 45 CFR part
92. The common rule expanded the scope of 45 CFR part 92 to include
nonentitlement grant programs, and to remove such programs from the
scope of part 74 but did not include entitlement programs like Child
Support Enforcement.
In 2003, the Department revised its grants management regulations
in order to bring its entitlement programs, like Child Support
Enforcement, under the same regulations that already applied to
nonentitlement programs for grants and cooperative agreements to State,
Tribal, and local governments. Thus, the reference to part 74 has been
erroneous since DHHS transferred the administrative requirements for
title IV-D grant programs from 45 CFR part 74 to 45 CFR part 92 in
2003.\80\ Therefore, we propose to replace the reference to part 74
under Sec. 302.14 with reference to part 92. For consistency, as
discussed below, we will also replace all references to part 74 with
part 92, as appropriate, in 9 other provisions throughout the child
support regulations, Sec. Sec. 302.15, 303.11, 304.10, 304.20, 304.25,
309.85, 309.130, 309.145, and 309.160.
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\80\ See 45 CFR parts 74 and 92: Uniform Administrative
Requirements for Awards and Subawards to Institutions of Higher
Education, Hospitals, Other Nonprofit Organizations, and Commercial
Organizations; and Certain Grants and Agreements with States, Local
Governments and Indian Tribal Governments and Uniform Administrative
Requirements for Grants and Cooperative agreements to State and
Local Governments, 68 FR 52843, September 8, 2003, available at:
http://edocket.access.gpo.gov/2003/pdf/03-22513.pdf.
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Section 302.15: Reports and Maintenance of Records
Section 302.15(a) references part 74. We propose to replace that
reference with a reference to part 92.
Section 302.32: Collection and Disbursement of Support Payments by the
IV-D Agency
Because the dates contained in the introductory paragraph are
outdated, we propose to update by removing the introductory paragraph.
We also propose to revise paragraph (b) to replace ``State Disbursement
Unit (SDU)'' with ``SDU.'' In addition, we propose to replace an
incorrect cross reference in paragraph (b)(1) from Sec.
303.7(c)(7)(iv) to Sec. 303.7(d)(6)(v).
Section 302.34: Cooperative Arrangements
We propose to clarify that the term law enforcement officials
includes ``district attorneys, attorneys general, and similar public
attorneys and prosecutors,'' and to add ``corrections officials'' to
the list of entities with which a State may enter into agreements for
cooperative arrangements. This addition encourages Child Support
Enforcement agencies to collaborate with corrections institutions and
community corrections officials (probation and parole agencies).
Section 302.65: Withholding of Unemployment Compensation
We propose to replace the term ``State employment security agency''
with ``State workforce agency,'' and the term ``SESA'' with ``SWA''
throughout this regulation for consistency with the terminology used by
the Department of Labor.
Section 302.70: Required State Laws
We propose making a technical correction under Sec. 302.70,
``Required State laws,'' to paragraph (a)(8). Under this paragraph, the
State plan must provide that a State has laws and implements procedures
under which all child support orders issued or modified in the State
include an income withholding provision, so that the withholding remedy
will be available if arrearages occur without the necessity of filing
an application for IV-D services in accordance with Sec. 303.100(i).
We propose to replace the incorrect cross reference to Sec. 303.100(i)
with Sec. 303.100(g).
Section 303.3: Location of Noncustodial Parents in IV-D Case
In paragraph (b)(5), we propose to replace the term ``State
employment security'' with ``State workforce.'' As
[[Page 68574]]
discussed above, this change is for consistency with the terminology
that is now used by the Department of Labor.
Section 303.7: Provision of Services in Intergovernmental IV-D Cases
Under this proposed rule, as discussed under Topic 1, paragraphs in
Sec. 303.11 are renumbered. We propose to make conforming changes to
paragraph (d)(10) of this section to update the cross references.
Additionally, the final intergovernmental child support regulation,
published in the Federal Register on July 2, 2010 and effective on
January 3, 2011, inadvertently omitted reference to the $25 annual fee
in Sec. 303.7. To address this, we propose to add paragraph (f),
Imposition and reporting of annual $25 fee in interstate cases, to
provide that the title IV-D agency in the initiating State must impose
and report the annual $25 fee in accordance with Sec. 302.33(e).
Section 303.11: Case Closure Criteria
In existing Sec. 303.11(b)(2), which has been redesignated as
Sec. 303.11(b)(4), we propose to replace the outdated term ``putative
father'' with the term ``alleged father.'' We also propose to replace
the outdated term ``putative father'' with the term ``alleged father''
in existing Sec. 303.11(b)(3)(ii), which has been redesignated as
Sec. 303.11(b)(6)(ii), and to remove the word ``or'' at the end of the
sentence. In addition, we propose to add the word ``or'' to the end of
proposed Sec. 303.11(b)(6)(iii). Finally, in Sec. 303.11(d), we
propose to replace the reference to part 74 with a reference to part 92
as previously discussed.
Section 304.10: General Administrative Requirements
Section 304.10 references 45 CFR part 74 in three instances. We
propose to replace these references with corresponding reference to
part 92.
Section 304.12: Incentive Payments
We propose to delete outdated paragraphs Sec. 304.12(c)(4) and (5)
as they applied to fiscal years 1985, 1986, and 1987.
Section 304.20: Availability and Rate of Federal Financial
Participation
Section 304.20(b)(1)(iii) references part 74. For reasons described
earlier, we propose to replace that reference with a reference to 45
CFR 92.36(b). Additionally, we propose to delete Sec. 304.20(c) and
(d) as they apply to fiscal years 1997 and 1998 and are out of date.
Section 304.21: Federal Financial Participation in the Costs of
Cooperative Arrangements With Courts and Law Enforcement Officials
We propose to clarify in paragraph (a) that the term law
enforcement officials includes ``corrections officials,'' to be
consistent with Sec. 302.34.
Section 304.21(a)(1) lists activities for which FFP at the
applicable matching rate is available in the costs of cooperative
agreements with appropriate courts and law enforcement officials. We
propose to modify the section to include a reference to Sec.
304.20(b)(11), regarding medical support activities.
Section 304.23: Expenditures for Which Federal Financial Participation
Is Not Available
Federal financial participation is the portion of a State's
operational expenditures that is paid by a Federal match and is
available for necessary expenditures incurred under the State plan.
Section 304.23(a) lists various programs for which FFP is not available
for administering these programs. We propose to add the following
programs to the list: Titles IV-B, which administers the Child Welfare
Program; IV-E, which administers the Foster Care Program; and XXI,
which administers the Children's Health Insurance Program (CHIP) of the
Act; and the Supplemental Nutrition Assistance Program (SNAP), which is
administered under 7 U.S.C. Chapter 51. These additions are technical
corrections intended to ensure that the regulations are updated and to
clarify that child support FFP is not allowed for carrying out these
programs' responsibilities.
We also propose to repeal Sec. 304.23(g). Language regarding
medical support enforcement cooperative agreements was first added to
the IV-D regulations in 1977 because section 1912 of the Act required
the State Medicaid agencies to have cooperative agreements with the IV-
D agencies to implement the Third party Liability program. Paragraph
(g) was originally intended to prohibit child support FFP for
cooperative agreements, under part 306, between child support and
Medicaid agencies. However, Sec. 304.23(g) is no longer necessary
since the child support agencies now have increased responsibilities
related to medical support enforcement activities as a result of PRWORA
in 1996, which required States to enact a provision for health care
coverage in all orders established or enforced by the child support
agency. Today, OCSE does not require IV-D agencies to enter into
agreements with the State Medicaid agencies.
Section 304.25: Treatment of Expenditures; Due Date
Section 304.25(a) references part 74. We propose to replace that
reference with a reference to part 92.
Additionally, we propose to modify Sec. 304.25(b). Section
304.25(b) requires a State to submit quarterly statements of
expenditures under Sec. 301.15 30 days after the end of the quarter.
We propose to modify the number of days from 30 to 45. This proposed
modification will afford a State more time to submit quarterly
statements of expenditures.
Section 304.26: Determination of Federal Share of Collections
Additionally, OCSE proposes to make a technical correction to Sec.
304.26(a)(1) by amending the Federal medical assistance percentage with
respect to the distribution of child support collections for Title IV-E
Foster Care cases in the U.S. territories and the District of Columbia.
Section 457(c) of the Act indicates that the Federal medical assistance
percentage rate for child support collections retained by Puerto Rico,
the Virgin Islands, Guam, and American Samoa to reimburse TANF
assistance is 75 percent. However, this rate does not apply to IV-E
collections. The Federal medical assistance percentage rate for Foster
Care maintenance payments in Puerto Rico, the Virgin Islands, Guam, the
Northern Mariana Islands, and American Samoa is 55 percent, according
to section 1905(b) of the Act. (This rate was 50 percent until January
1, 2011.) Therefore, we propose amending Sec. 304.26(a)(1) to clarify
that the Federal medical assistance percentage rate for the
distribution of child support collections to reimburse IV-E collections
is 55 percent for Puerto Rico, the Virgin Islands, Guam, the Northern
Mariana Islands, and American Samoa according to section 1905(a) of the
Act and implementing regulations at 45 CFR 302.52(b)(1) and (3). In
addition, we also propose a technical fix to this provision to specify
that the Federal medical assistance percentage rate to reimburse IV-E
collections for the District of Columbia is 70 percent, according to
section 1905(b)(3) of the Act. Please note that this rule only applies
to States and other U.S. jurisdictions operating IV-D programs. This
currently includes Puerto Rico, Guam, Virgin Islands, and the District
of Columbia.
We also propose to delete paragraphs (b) and (c) of Sec. 304.26.
Those paragraphs require incentive and hold harmless payments to be
made from the Federal
[[Page 68575]]
share of collections. This requirement is outdated. Incentive and hold
harmless payments are no longer paid from the Federal share of
collections.
Section 305.35: Reinvestment
We are proposing several technical changes to this section. A key
provision of the Child Support Performance and Incentive Act of 1998 is
that State IV-D agencies are required to reinvest the amount of Federal
incentive payments received into their child support program. Section
458(f) of the Act provides that incentive funding shall be used to
supplement rather than supplant existing funding. In order to ensure
that this requirement is met in future years, OCSE promulgated
regulations at 45 CFR 305.35 establishing a baseline level of funding
that a State would be required to maintain. Although the regulations
established a methodology for determining the baseline funding, States
are uncertain about how to calculate their current spending level so
that they could compare it to the baseline and evaluate their
compliance with the statutory requirement.
In response to comments in the Final Rule, published on December
27, 2000 (65 FR 82177) regarding compliance with the prohibition of
supplanting funds, we indicated that OCSE staff would have a role in
monitoring this requirement. This was also addressed in AT-01-04,
``Reinvestment of Child Support Incentive Payments.'' \81\ OCSE
proposes adding this language to the regulation in order to clarify the
potential consequences.
---------------------------------------------------------------------------
\81\ Available at: http://www.acf.hhs.gov/programs/cse/pol/AT/2001/at-01-04.htm.
---------------------------------------------------------------------------
OCSE proposes adding language that would clarify the definition of
State Current Spending Level for purposes of determining if the State
has met or fulfilled the baseline expenditures level. This will ensure
that a State does not supplant their baseline expenditure level with
Federal incentive payments. OCSE is specifically soliciting comments
regarding this definition.
To clarify the potential consequences of a State not maintaining
the baseline expenditure level, we propose amending 45 CFR 305.35(d) by
adding a sentence to the end of the paragraph to read: ``Non-compliance
will result in disallowances of incentive amounts equal to the amount
of funds supplanted.''
We propose redesignating paragraph (e) as paragraph (f) and adding
a new paragraph (e) to clarify how the State Current Spending Level
should be calculated. Using the Form OCSE-396A, ``Child Support
Enforcement Program Expenditure Report,'' the State Current Spending
Level will be calculated by determining the State Share of Total
Expenditures Claimed for all four quarters of the fiscal year minus
State Share of IV-D Administrative Expenditures Made Using Funds
Received as Incentive Payments for all four quarters of the fiscal
year, plus the Fees for the Use of the Federal Parent Locator Service
(FPLS) for all four quarters of the fiscal year.
The equation for calculating the State Share of Total Expenditures
Claimed is: Total Expenditures Claimed for the Current Quarter and the
Prior Quarter Adjustments minus the Federal Share of Total Expenditures
Claimed for the Current Quarter and Prior Quarter Adjustments. Using
the Form OCSE-396A, this equation can also be translated as:
State Share of Expenditure = Line 7 (Columns A + C) - Line 7 (Columns B
+ D) for all four quarters of the fiscal year.
The equation for calculating the State Share of IV-D Administrative
Expenditures Made Using Funds Received as Incentive Payments is:
IV-D Administrative Expenditures Made Using Funds Received as
Incentive Payments for the Current Quarter and the Prior Quarter
Adjustments minus the Federal Share of IV-D Administrative Expenditures
Made Using Funds Received as Incentive Payments for the Current Quarter
and Prior Quarter Adjustments. Using the Form OCSE-396A, this equation
can also be translated as:
State Share of IV-D Administrative Expenditures Made Using Funds
Received as Incentive Payments = Line 1a (Columns A + C) - Line 1a
(Columns B + D) for all four quarters of the fiscal year.
The Fees for the Use of the FPLS can be computed by adding the FPLS
fees claimed for all four quarters of the fiscal year. Using the Form
OCSE-396A, this equation can also be translated as:
Fees for the Use of the FPLS = Line 10 (Columns B) for all four
quarters of the fiscal year.
Section 305.63: Standards for Determining Substantial Compliance With
IV-D Requirements
Section 305.63(d) erroneously cross references paragraph (b). We
propose to replace that cross reference with a reference to paragraph
(c). Our proposed revision will make this section consistent with the
final rule on intergovernmental child support cases.
Section 308.2: Required Program Compliance Criteria
The term ``State employment security agency'' is removed wherever
it appears and replaced by ``State workforce agency.'' This change is
for consistency with the terminology used by the Department of Labor,
as discussed earlier. In addition, in subparagraph (c)(3)(i), we have
capitalized Department of Motor Vehicles and used the section symbol
for consistency.
Section 309.85: What records must a tribe or tribal organization agree
to maintain in a Tribal IV-D plan?
Section 309.85(b) references part 74. We propose to replace that
reference with a reference to part 92.
Section 309.130: How will Tribal IV-D programs be funded and what forms
are required?
Section 309.130(b)(3) references Standard Form (SF) 269A,
``Financial Status Report (Short Form).'' That form is obsolete. We
propose to replace that reference with a reference to SF 425, ``Federal
Financial Report,'' which is the new OMB approved form. To be
consistent with our proposed change of Sec. 301.15(b)(2), we also
propose in this section to change the reporting due date requirements
for the OCSE-34A, ``Quarterly Report of Collections.'' This proposed
modification will afford Tribes the same amount of time as States to
submit reporting data. We are not making a similar due date change for
the SF-425 report since this is determined by OMB.
Section 309 references part 74 in paragraphs (d)(3) and (h). We
propose to replace these references with references to part 92.
Section 309.145: What costs are allowable for Tribal IV-D programs
carried out under Sec. 309.65(a) of this part?
Section 309.145(a)(3) references part 74. We propose to replace
that reference with a reference to part 92.
Section 309.160: How will OCSE determine if Tribal IV-D program funds
are appropriately expended?
This section references part 74. We propose to replace that
reference with a reference to part 92.
Paperwork Reduction Act
Under the Paperwork Reduction Act (Pub. L. 104-13), all Departments
are required to submit to OMB for review and approval any reporting or
recordkeeping requirements inherent in a proposed or final rule. There
are seven new requirements as a result of these
[[Page 68576]]
regulations. These new regulatory requirements are one-time system
enhancements to the statewide child support system. The description and
total estimated burden for the changes are described in the chart
below.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Average burden hours National National state
Section and purpose Instrument respondents: 54 per response Total cost federal share share
--------------------------------------------------------------------------------------------------------------------------------------------------------
Added requirement under Sec. Systems Modification. One-time system 300 hours x $100 per $1,620,000 $1,069,200 $550,800
302.33 to generate notices. enhancement. 54 States to modify
statewide child
support system.
Added optional requirement under Systems Modification. One-time system 5,000 hours x $100 13,500,000 8,910,000 4,590,000
Sec. 302.33 for revised enhancement. per 27 States to
applications for limited services. modify statewide
child support system.
Added requirement under Sec. Systems Modification. One-time system 200 hours x $100 x 54 1,080,000 712,800 367,200
303.8 for notice of the right to enhancement. States.
request review and adjustment when
parent is incarcerated.
Added optional requirement under Systems Modification. One-time system 1,000 hours x $100 x 2,700,000 1,782,000 918,000
Sec. 303.11 for notice to enhancement. 27 States.
recipient when case closed because
limited service has been completed.
Added requirement under Sec. System Modification.. One-time system 500 hours x $100 x 54 2,700,000 1,782,000 918,000
303.11 for notice because the enhancement. States.
referring agency does not respond
to a notice or does not provide
information demonstrating that
services are needed.
Under Sec. 303.72 discontinue Systems Modification. One-time system 500 hours x $100 x 54 2,700,000 1,782,000 918,000
notice requirement for interstate enhancement. States.
tax refund offset.
Under Sec. 307.11 develop Systems Modification. One-time system 400 hours x $100 x 54 2,160,000 1,425,600 734,400
automated procedures to identify enhancement. States.
the recipient of Supplemental
Security Income (SSI).
Under 42 CFR 433.152, regarding State plan amendment. One time for 54 State 2 hours x $36.63 x 54 3,956.04 1,978.02 1,978.02
state plan amendments. Medicaid Programs, States.
(which includes DC
and 3 territories).
Under 42 CFR 433.152, regarding Cooperative agreement ..................... 10 hours x $36.63 x 19,780.20 9,890.10 9,890.10
cooperative agreements. 54 States.
-----------------------------------------------
Totals......................... ..................... ..................... ..................... 26,483,736.24 17,475,468.12 9,008,268.12
--------------------------------------------------------------------------------------------------------------------------------------------------------
Part 302 contains information collection requirements as required
by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Although we
believe that the States will have to submit revised Child Support State
plan pages for Sec. Sec. 302.33, 302.56, and 302.70, we do not
estimate any additional burden on the ``State Plan for Child Support
Collection and Establishment of Paternity Under Title IV-D of the
Social Security Act,'' and the State Plan Transmittal Form [OMB 0970-
0017], which were reauthorized until July 31, 2014. When these forms
were submitted for reauthorization, we had estimated that each State
would be submitting eight State plan preprint pages annually as a
result of changes in regulations, policies, and/or procedures.
Additionally, various forms are discussed for use in different
processes. None of these discussions are new burdens. For example Sec.
303.11 clarifies the current regulation that states are required to use
the Income Withholding Order (IWO) form. Use of the OMB-approved form
is already required. The OMB Control # is 0970-0154 which expires on
06/30/2014. Section 303.35 clarifies that the OCSE-396A is used to
calculate the state current spending level. This form is an OMB-
approved form, Control # 0970-0181 which expires on 05/31/2017.
Finally, there has been an update from use of form SF 269A to SF 425.
This is a technical update with no addition burden. SF425 is an OMB-
approved form Control #0348-0061 which expires 2/28/2015.
With regard to the proposed requirements for cooperative agreements
for third party collections under 42 CFR 433.152, Medicaid State plan
amendments will be required as well as amendments to state cooperative
agreements. The one-time burden associated with the requirements under
Sec. 433.152 is the time and effort it would take each of the 54 State
Medicaid Programs, which includes the District of Columbia and 3
territories, to submit State plan amendments and amend their
cooperative agreements.
Specifically, we estimate that it will take each State 2 hours to
amend their state plans and 10 hours to amend their cooperative
agreements. We estimate 12 total annual hours at a total estimated cost
of $23,736.24 with a State share of $11,868.12. CMS reimburses States
for 50 percent of the administrative costs incurred to administer the
Medicaid State plan.
In deriving these figures, we used the hourly rate of $36.63/hour
for a GS-13-3 working in the Washington DC Baltimore area according to
the calendar year 2013 federal pay scale.
Besides what is addressed above, no additional information
collection burdens, as described in the Paperwork Reduction Act of 1995
(44 U.S.C. 3507(d)), are imposed by this proposed regulation.
ACF and CMS will consider comments by the public on this proposed
collection of information in the following areas:
1. Evaluating whether the proposed collection is necessary for the
proper performance of the functions of ACF and CMS, including whether
the information will have practical utility;
[[Page 68577]]
2. Evaluating the accuracy of ACF's and CMS' estimates of the
proposed collection of information, including the validity of the
methodology and assumptions used;
3. Enhancing the quality, usefulness, and clarity of the
information to be collected; and
4. 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, either by fax to 202-395-6974 or by email to
[email protected]. Please mark faxes and emails to the
attention of the desk officer for ACF.
Regulatory Flexibility Analysis
The Secretary certifies, under 5 U.S.C. 605(b), and enacted by the
Regulatory Flexibility Act (Pub. L. 96-354), that this proposed
regulation will not result in a significant impact on a substantial
number of small entities. The primary impact is on State Governments.
State Governments are not considered small entities under the Act.
Regulatory Impact Analysis
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if the
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity.) Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, harmonizing rules, and of promoting
flexibility. While there are some costs associated with these
regulations, they are not economically significant as defined under
E.O. 12866. However, the regulation is significant and has been
reviewed by OMB.
Within the NPRM an area with associated Federal costs is modifying
the child support statewide automated system for one-time system
enhancements to accommodate new requirements such as notices,
applications, and identifying noncustodial parents receiving SSI. This
proposal has an approximately $26,484,000 cost. There is a cost of
$26,460,000 to modify statewide IV-D systems for the 54 (with an
assumption that 27 States will implement the optional requirements)
States or Territories at a cost of $100 an hour. A cost of
approximately $24,000 is designated to CMS' costs for State plan
amendments and cooperative agreements. Another area associated with
Federal costs is that of job services. We propose to allow FFP for
certain job services for noncustodial parents responsible for paying
child support. The estimated total average annual net cost (over the
first five years) of the job services proposal is $26,096,596 with
$18,592,939 as the Federal cost. Thus, the total net cost of the NPRM
is $52,580,596. These proposed regulations, along with proposed changes
in recognition of technological advances, will improve the delivery of
child support services, support the efforts of noncustodial parents to
provide for their children, and improve the efficiency of operations.
Unfunded Mandates Reform 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, Tribal and local Governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year. This $100 million threshold was based on 1995 dollars. The
current threshold, adjusted for inflation is $141 million. This
proposed rule would not impose a mandate that will result in the
expenditure by State, local, and Tribal Governments, in the aggregate,
or by the private sector, of more than $141 million in any one year.
Congressional Review
This notice of proposed rulemaking is not a major rule as defined
in 5 U.S.C. Chapter 8.
Assessment of Federal Regulation and Policies on Families
Section 654 of the Treasury and General Government Appropriations
Act of 1999 requires Federal agencies to determine whether a policy or
regulation may negatively 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. The required
review of the regulations and policies to determine their effect on
family well-being has been completed, and this rule will have a
positive impact on family well-being as defined in the legislation by
proposing evidence-informed policies and practices that help to ensure
that noncustodial parents support their children more consistently and
reliably as they grow up.
Executive Order 13132
Executive Order 13132 prohibits an agency from publishing any rule
that has federalism implications if the rule either imposes substantial
direct compliance costs on State and local governments and is not
required by statute, or the rule preempts State law, unless the agency
meets the consultation and funding requirements of section 6 of the
Executive Order. We do not believe the regulation has federalism impact
as defined in the Executive Order. However, consistent with Executive
Order 13132, the Department specifically solicits comments from State
and local government officials on this proposed rule.
List of Subjects
42 CFR Part 433
Administrative practice and procedure, Child support, Claims, Grant
programs--health, Medicaid, Reporting and recordkeeping requirements.
45 CFR Part 301
Child support, State plan approval and grant procedures.
45 CFR Part 302
Child support, State plan requirements.
45 CFR Part 303
Child support, Standards for program operations.
45 CFR Part 304
Child support, Federal financial participation.
45 CFR Part 305
Child support, Program performance measures, Standards, Financial
incentives, Penalties.
45 CFR Part 307
Child support, Computerized support enforcement systems.
45 CFR Part 308
Child support, Annual State self-assessment review and report.
[[Page 68578]]
45 CFR Part 309
Child support, Grant programs--social programs, Indians, Reporting
and recordkeeping requirements.
(Catalog of Federal Domestic Assistance Programs No. 93.563, Child
Support Enforcement Program.)
Dated: August 26, 2014.
Mark Greenberg,
Acting Assistant Secretary for Children and Families.
Dated: September 16, 2014.
Marilyn Tavenner,
Administrator for the Centers for Medicare & Medicaid Services.
Approved: September 29, 2014.
Sylvia M. Burwell,
Secretary of Health and Human Services.
For the reasons discussed above, the Department of Health and Human
Services proposes the following changes to 42 CFR Part 433 and 45 CFR
Chapter III as set forth below:
Centers for Medicare and Medicaid Services
42 CFR Chapter IV
PART 433--STATE FISCAL ADMINISTRATION
0
1. The authority citation for part 433 is revised to read as follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
0
2. Section 433.152 is amended by revising paragraph (b) to read as
follows:
Sec. 433.152 Requirements for cooperative agreements for third party
collections.
* * * * *
(b) Agreements with title IV-D agencies must specify that:
(1) The Medicaid agency may not refer a case for medical support
enforcement when the following criteria have been met:
(i) The Medicaid referral is based solely upon health care
services, including contract health services, provided through an
Indian Health Program (as defined at 25 U.S.C. 1603(12)) to a child who
is eligible for health care services from the Indian Health Service
(IHS).
(ii) [Reserved]
(2) The Medicaid agency will provide reimbursement to the IV-D
agency only for those child support services performed that are not
reimbursable by the Office of Child Support Enforcement under title IV-
D of the Act and that are necessary for the collection of amounts for
the Medicaid program.
Administration for Children and Families
45 CFR Chapter III
PART 301--STATE PLAN APPROVAL AND GRANT PROCEDURES
0
3. The authority citation for part 301 continues to read as follows:
Authority: 42 U.S.C. 651 through 658, 659a, 660, 664, 666, 667,
1301, and 1302.
0
4. Amend Sec. 301.1 by revising the first sentence of the definition
of ``Procedures'' and adding the definition of ``Record'' in
alphabetical order to read as follows:
Sec. 301.1 General definitions.
* * * * *
Procedures means a set of instructions in a record which describe
in detail the step by step actions to be taken by child support
enforcement personnel in the performance of a specific function under
the State's IV-D plan. * * *
* * * * *
Record means information that is inscribed on a tangible medium or
that is stored in an electronic or other medium and is retrievable in
perceivable form.
* * * * *
0
5. Amend Sec. 301.13 by revising the first sentence of the
introductory text and paragraphs (e) and (f) to read as follows:
Sec. 301.13 Approval of State plans and amendments.
The State plan consists of records furnished by the State to cover
its Child Support Enforcement program under title IV-D of the Act. * *
*
* * * * *
(e) Prompt approval of the State plan. The determination as to
whether the State plan submitted for approval conforms to the
requirements for approval under the Act and regulations issued pursuant
thereto shall be made promptly and not later than the 90th day
following the date on which the plan submittal is received in OCSE
Regional Program Office, unless the Regional Office has secured from
the IV-D agency an agreement, which is reflected in a record, to extend
that period.
(f) Prompt approval of plan amendments. Any amendment of an
approved State plan may, at the option of the State, be considered as a
submission of a new State plan. If the State requests that such
amendments be so considered, the determination as to its conformity
with the requirements for approval shall be made promptly and not later
than the 90th day following the date on which such a request is
received in the Regional Office with respect to an amendment that has
been received in such office, unless the Regional Office has secured
from the State agency an agreement, which is reflected in a record, to
extend that period.
* * * * *
0
6. Amend Sec. 301.15 by revising paragraphs (a), (b), (c), and (d),
and by removing paragraph (e) to read as follows:
Sec. 301.15 Grants.
* * * * *
(a) Financial reporting forms. (1) Form OCSE-396A: Child Support
Enforcement Program Expenditure Report. States submit this form
quarterly to report the actual amount of State and Federal Share of
title IV-D program expenditures and program income of the current
quarter and to report the estimated amount of the State and Federal
share of title IV-D program expenditures for the next quarter. This
form is completed in accordance with published instructions. The
signature of the authorized State program official on this document
certifies that the reported expenditures and estimates are accurate and
that the State has or will have the necessary State share of estimated
program expenditures available when needed.
(2) Form OCSE-34A: Child Support Enforcement Program Collection
Report. States submit this form quarterly to report the State and
Federal share of child support collections received, distributed,
disbursed, and remaining undistributed under the title IV-D program.
This form is completed in accordance with published instructions. The
signature of the authorized State program official on this document
certifies that the reported amounts are accurate. The Federal share of
actual program expenditures and collections and the Federal share of
estimated program expenditures reported on Form OCSE-396A and the
Federal share of child support collections reported on Form OCSE-34A
are used in the computation of quarterly grant awards issued to the
State.
(b) Submission, review, and approval. (1) Manner of submission. The
Administration for Children and Families (ACF) maintains an On-line
Data Collection (OLDC) system available to every State. States must use
OLDC to submit reporting information electronically. To use OLDC, a
State must request access from the ACF Office of Grants Management and
use an approved digital signature.
(2) Schedule of submission. Forms OCSE-396A and OCSE-34A must be
electronically submitted no later than 45
[[Page 68579]]
days following the end of the each fiscal quarter. No submission,
revisions, or adjustments of the financial reports submitted for any
quarter of the fiscal year will be accepted by OCSE later than December
31, 3 months after the end of the fiscal year.
(3) Review and approval. The data submitted on Forms OCSE-396A and
OCSE-34A are subject to analysis and review by the Regional Grants
Officer in the appropriate ACF Regional Office and approval by the
Director, Office of Grants Management, in the ACF central office. In
the course of this analysis, review, and approval process, any reported
program expenditures that cannot be determined to be allowable are
subject to the deferral procedures found at 45 CFR 201.15 or the
disallowance process found at 45 CFR 304.29 and 201.14 and 45 CFR part
16.
(c) Grant award. (1) Award documents. The grant award consists of a
signed award letter and an accompanying ``Computation of Grant Award''
to detail the award calculation.
(2) Award calculation. The quarterly grant award is based on the
information submitted by the State on the financial reporting forms and
consists of:
(i) An advance of funds for the next quarter, based on the State's
approved estimate; and
(ii) The reconciliation of the advance provided for the current
quarter, based on the State's approved expenditures.
(3) Access to funds. A copy of the grant documents are provided to
the HHS Division of Payment Management, which maintains the Payment
Management System (PMS). The State is able to request a drawdown of
funds from PMS through a commercial bank and the Federal Reserve System
against a continuing letter of credit. The letter of credit system for
payment of advances of Federal funds was established pursuant to
Treasury Department regulations. (Circular No. 1075).
(d) General requirements. A copy of the Terms and Conditions
applicable to this program is available to the State annually. In
general, the following Federal regulations govern the administration of
this program:
(1) 2 CFR part 225, ``Cost Principles for State, Local and Indian
Tribal Governments (OMB Circular A-87);''
(2) 45 CFR part 92, ``Uniform Administrative Requirements for
Grants and Cooperative Agreements to State, Local, and Tribal
Governments,'' with the following exceptions:
(i) 45 CFR 92.24, ``Matching or cost sharing;'' and
(ii) 45 CFR 92.41, ``Financial reporting;'' and
(3) 45 CFR part 95, ``General Administration--Grant Programs
(Public Assistance, Medical Assistance and State Children's Health
Insurance Programs).''
PART 302--STATE PLAN REQUIREMENTS
0
7. The authority citation for part 302 continues to read as follows:
Authority: 42 U.S.C. 651 through 658, 659a, 660, 664, 666, 667,
1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), and 1396(k).
0
8. Revise Sec. 302.14 to read as follows:
Sec. 302.14 Fiscal policies and accountability.
The State plan shall provide that the IV-D agency, in discharging
its fiscal accountability, will maintain an accounting system and
supporting fiscal records adequate to assure that claims for Federal
funds are in accord with applicable Federal requirements. The retention
and custodial requirements for these records are prescribed in 45 CFR
part 92.
0
9. Amend Sec. 302.15 by revising paragraph (a)(7), redesignating the
undesignated concluding paragraph of paragraph (a) as paragraph (a)(8),
and revising newly redesignated paragraph (a)(8) to read as follows:
Sec. 302.15 Reports and maintenance of records.
* * * * *
(a) * * *
(7) Statistical, fiscal, and other records necessary for reporting
and accountability required by the Secretary.
(8) The retention and custodial requirements for the records in
this section are prescribed in 45 CFR part 92.
* * * * *
0
10. Amend Sec. 302.32 by revising the introductory text, paragraph
(a), paragraph (b) introductory text, and paragraph (b)(1) to read as
follows:
Sec. 302.32 Collection and disbursement of support payments by the
IV-D Agency.
The State plan shall provide that:
(a) The IV-D agency must establish and operate a State Disbursement
Unit (SDU) for the collection and disbursement of payments under
support orders--
(1) In all cases being enforced under the State IV-D plan; and
(2) In all cases not being enforced under the State IV-D plan in
which the support order is initially issued in the State on or after
January 1, 1994, and in which the income of the noncustodial parent is
subject to withholding pursuant to section 466(a)(8)(B) of the Act.
(b) Timeframes for disbursement of support payments by SDUs under
section 454B of the Act.
(1) In interstate IV-D cases, amounts collected by the responding
State on behalf of the initiating State must be forwarded to the
initiating State within 2 business days of the date of receipt by the
SDU in the responding State, in accordance with Sec. 303.7(d)(6)(v) of
this chapter.
* * * * *
0
11. Amend Sec. 302.33 by revising paragraph (a)(4), adding paragraph
(a)(6), and revising the first sentence of paragraph (d)(2) to read as
follows:
Sec. 302.33 Services to individuals not receiving title IV-A
assistance.
(a) * * *
(4) Whenever a family is no longer eligible for assistance under
the State's title IV-A and Medicaid programs, the IV-D agency must
notify the family, within 5 working days of the notification of
ineligibility, that IV-D services will be continued unless the family
notifies the IV-D agency that it no longer wants services but instead
wants to close the case. This notice must inform the family of the
benefits and consequences of continuing to receive IV-D services,
including the available services and the State's fees, cost recovery
and distribution policies. This requirement to notify the family that
services will be continued, unless the family notifies the IV-D agency
to the contrary, also applies when a child is no longer eligible for
IV-E foster care, but only in those cases that the IV-D agency
determines that such services and notice would be appropriate.
* * * * *
(6) The State may elect in its State plan to allow an individual
under paragraph (a)(1)(i) of this section who files an application to
request limited services. If the State chooses this option, the State
must define how this process will be implemented and must establish and
use procedures, which are reflected in a record, that specifies when
and what limited services will be allowed. The State's procedures must
require that a limited services applicant requesting enforcement
services will receive all mandatory enforcement services, if
appropriate, including income withholding, Federal Tax Refund Offset,
and credit bureau reporting. An application will be considered full-
service unless the parent specifically applies for limited services in
accordance with the State's procedures. If one parent specifically
requests limited services and the other parent requests full services,
the case will automatically receive full services. The
[[Page 68580]]
State will be required to charge the application and service fees
required under paragraphs (c) and (e) of this section for a limited
service, and may recover costs in accordance with paragraph (d) of this
section if the State has chosen this option in its State plan. The
State must provide the applicant an application form with information
on the range of available services, consequences of selecting a limited
service, and an explanation that the case will be closed when the
limited service is completed.
* * * * *
(d) * * *
(2) A State that recovers standardized costs under paragraph (d)(1)
of this section shall develop a methodology, which is reflected in a
record, to determine standardized costs which are as close to actual
costs as is possible. * * *
* * * * *
0
12. Amend Sec. 302.34 by revising the first sentence to read as
follows:
Sec. 302.34 Cooperative arrangements.
The State plan shall provide that the State will enter into
agreements, which are reflected in a record, for cooperative
arrangements under Sec. 303.107 of this chapter with appropriate
courts; law enforcement officials, such as district attorneys,
attorneys general, and similar public attorneys and prosecutors;
corrections officials; Indian tribes or tribal organizations. * * *
* * * * *
0
13. Revise Sec. 302.38 to read as follows:
Sec. 302.38 Payments to the family.
The State plan shall provide that any payment required to be made
under Sec. Sec. 302.32 and 302.51 to a family will be made directly to
the resident parent, legal guardian, or caretaker relative having
custody of or responsibility for the child or children.
0
14. Amend Sec. 302.50 by revising paragraph (b)(2) to read as follows:
Sec. 302.50 Assignment of rights to support.
* * * * *
(b) * * *
(2) If there is no court or administrative order, an amount
determined in a record by the IV-D agency as part of the legal process
referred to in paragraph (a)(2) of this section in accordance with the
requirements of Sec. 302.56.
* * * * *
0
15. Revise Sec. 302.56 to read as follows:
Sec. 302.56 Guidelines for setting child support awards.
(a) Within one year after completion of the State's next
quadrennial review of its guidelines, pursuant to Sec. 302.56(e), as a
condition of approval of its State plan, the State must establish one
set of guidelines by law or by judicial or administrative action for
setting and modifying child support award amounts within the State that
meet the requirements in this section.
(b) The State must have procedures for making the guidelines
available to all persons in the State whose duty it is to set child
support award amounts.
(c) The guidelines established under paragraph (a) of this section
must at a minimum:
(1) Take into consideration actual earnings and income of the
noncustodial parent;
(2) Be based on specific descriptive and numeric criteria and
result in a computation of the support obligation;
(3) Address how the parents will provide for the child(ren)'s
health care needs through health insurance coverage and/or through cash
medical support in accordance with Sec. 303.31 of this chapter;
(4) Take into consideration the noncustodial parent's subsistence
needs and provide that any amount ordered for support be based upon
available data related to the parent's actual earnings, income, assets,
or other evidence of ability to pay, such as testimony that income or
assets are not consistent with a noncustodial parent's current standard
of living; and
(5) Provide that incarceration may not be treated as voluntary
unemployment in establishing or modifying support orders.
(d) The State must include a copy of the guidelines in its State
plan.
(e) The State must review, and revise, if appropriate, the
guidelines established under paragraph (a) of this section at least
once every four years to ensure that their application results in the
determination of appropriate child support award amounts.
(f) The State must provide that there will be a rebuttable
presumption, in any judicial or administrative proceeding for the award
of child support, that the amount of the award which would result from
the application of guidelines established under paragraph (a) of this
section is the correct amount of child support to be awarded.
(g) A written finding or specific finding on the record of a
judicial or administrative proceeding for the award of child support
that the application of the guidelines established under paragraph (a)
of this section would be unjust or inappropriate in a particular case
will be sufficient to rebut the presumption in that case, as determined
under criteria established by the State. Such criteria must take into
consideration the best interests of the child. Findings that rebut the
guidelines shall state the amount of support that would have been
required under the guidelines and include a justification of why the
order varies from the guidelines.
(h) Child support awards established under paragraph (a) of this
section may recognize parenting time provisions pursuant to State child
support guidelines or when both parents have agreed to the parenting
time provisions.
(i) As part of the review of a State's guidelines required under
paragraph (e) of this section, a State must consider economic data on
the cost of raising children and analyze case data, gathered through
sampling or other methods, on the application of, and deviations from,
the guidelines. The analysis of the data must be used in the State's
review of the guidelines to ensure that deviations from the guidelines
are limited. Deviation from the presumptive child support amount may be
based on factors established by the State.
0
16. Amend Sec. 302.65 by:
0
a. In paragraph (a), removing the definition of ``State employment
security agency'';
0
b. In paragraph (a), adding the definition of ``State workforce
agency'' in alphabetical order;
0
c. Removing the term ``SESA'' wherever it appears and adding in its
place the term ``SWA'' in paragraphs (c)(1), (2), and (5) through (7);
and
0
d. Revising paragraphs (b) and (c)(3).
The revisions and additions read as follows.
Sec. 302.65 Withholding of unemployment compensation.
* * * * *
(a) * * *
State workforce agency or SWA means the State agency charged with
the administration of the State unemployment compensation laws in
accordance with title III of the Act.
* * * * *
(b) Agreement. The State IV-D agency shall enter into an agreement,
which is reflected in a record, with the SWA in its State for the
purpose of withholding unemployment compensation from individuals with
unmet support obligations being enforced by the IV-D agency. The IV-D
agency shall agree only to a withholding program that it expects to be
cost-effective and to reimbursement for the SWA's actual, incremental
costs of providing services to the IV-D agency.
(c) * * *
(3) Establish and use criteria, which are reflected in a record,
for selecting
[[Page 68581]]
cases to pursue via the withholding of unemployment compensation for
support purposes. These criteria must be designed to insure maximum
case selection and minimal discretion in the selection process.
* * * * *
0
17. Amend Sec. 302.70, by revising paragraphs (a)(5)(v), (a)(8), and
the first sentence of paragraph (d)(2) to read as follows:
Sec. 302.70 Required State laws.
(a) * * *
(5) * * *
(v) Procedures which provide that any objection to genetic testing
results must be made in writing within a specified number of days
before any hearing at which such results may be introduced into
evidence; and if no objection is made, a report of the test results,
which is reflected in a record, is admissible as evidence of paternity
without the need for foundation testimony or other proof of
authenticity or accuracy;
* * * * *
(8) Procedures under which all child support orders which are
issued or modified in the State will include provision for withholding
from income, in order to assure that withholding as a means of
collecting child support is available if arrearages occur without the
necessity of filing an application for services under Sec. 302.33, in
accordance with Sec. 303.100(g) of this chapter.
* * * * *
(d) * * *
(2) Basis for granting exemption. The Secretary will grant a State,
or political subdivision in the case of section 466(a)(2) of the Act,
an exemption from any of the requirements of paragraph (a) of this
section for a period not to exceed 5 years if the State demonstrates
that compliance would not increase the effectiveness and efficiency of
its Child Support Enforcement program. * * *
* * * * *
0
18. Section 302.76 is added to read as follows:
Sec. 302.76 Job services.
The State plan may provide for job services for eligible
noncustodial parents pursuant to Sec. 303.6(c)(5) of this chapter. If
the State chooses this option, the State plan must include a
description of the job services and the eligibility criteria.
0
19. Amend Sec. 302.85 by revising paragraph (b)(2)(ii) to read as
follows:
Sec. 302.85 Mandatory computerized support enforcement system.
* * * * *
(b) * * *
(2) * * *
(ii) The State provides assurances, which are reflected in a
record, that steps will be taken to otherwise improve the State's Child
Support Enforcement program.
PART 303--STANDARDS FOR PROGRAM OPERATIONS
0
20. The authority citation for part 303 is revised to read as follows:
Authority: 42 U.S.C. 651 through 658, 659a, 660, 663, 664, 666,
667, 1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), 1396(k),
and 25 U.S.C. 1603(12) and 1621e.
0
21. Amend Sec. 303.2 by revising the first sentence of paragraph
(a)(2) and revising paragraph (a)(3) to read as follows:
Sec. 303.2 Establishment of cases and maintenance of case records.
(a) * * *
(2) When an individual requests an application for IV-D services,
provide an application to the individual on the day the individual
makes a request in person or send an application to the individual
within no more than 5 working days of a request made by telephone or in
a record. * * *
(3) Accept an application as filed on the day it and the
application fee are received. An application is a record that is
provided or used by the State which indicates that the individual is
applying for child support enforcement services under the State's title
IV-D program and is signed, electronically or otherwise, by the
individual applying for IV-D services.
* * * * *
Sec. 303.3 [Amended]
0
22. Amend Sec. 303.3 by:
0
a. In paragraph (b)(1), adding ``corrections institutions;'' after
``unions;'' and before ``fraternal organizations;''; and
0
b. In paragraph (b)(5), removing the term ``State employment security''
and adding the term ``State workforce'' in its place.
0
23. Amend Sec. 303.5 by revising paragraph (g)(6) to read as follows:
Sec. 303.5 Establishment of paternity.
* * * * *
(g) * * *
(6) The State must provide training, guidance, and instructions,
which are reflected in a record, regarding voluntary acknowledgment of
paternity, as necessary to operate the voluntary paternity
establishment services in the hospitals, State birth record agencies,
and other entities designated by the State and participating in the
State's voluntary paternity establishment program.
* * * * *
0
24. Amend Sec. 303.6 by:
0
a. Removing ``and'' at the end of paragraph (c)(3);
0
b. Redesignating paragraph (c)(4) as paragraph (c)(6); and
0
c. Adding paragraphs (c)(4) and (5).
The revision and addition read as follows:
Sec. 303.6 Enforcement of support obligations.
* * * * *
(c) * * *
(4) Having procedures ensuring that enforcement activity in civil
contempt proceedings takes into consideration the subsistence needs of
the noncustodial parent, and ensures that a purge amount the
noncustodial parent must pay in order to avoid incarceration takes into
consideration actual earnings and income and the subsistence needs of
the noncustodial parent. A purge amount must be based upon a written
evidentiary finding that the noncustodial parent has the actual means
to pay the amount from his or her current income or assets; and
(5) As elected by the State in Sec. 302.76 of this chapter,
provide job services to eligible noncustodial parents. In addition to
eligibility criteria which may be set by the IV-D agency, the
noncustodial parent must have a IV-D case, have a current child support
order, be unemployed or not making regular child support payments, not
be receiving TANF assistance or assistance funded with State dollars
counting toward TANF maintenance of effort, not be enrolled in a
Supplemental Nutrition Assistance Program Employment and Training
program under 7 CFR 273.7 and 273.24, not be receiving the same job
services under Workforce Investment Act (WIA) under 20 CFR parts 652
and 660 through 671, and not be receiving a Federal Pell Grant under 34
CFR part 690. These job services may include:
(i) Job search assistance;
(ii) Job readiness training;
(iii) Job development and job placement services;
(iv) Skills assessments to facilitate job placement;
(v) Job retention services;
(vi) Certificate programs and other skills training directly
related to employment, which may include activities to improve literacy
and basic skills, such as programs to complete high school or a General
Education Development (GED) certificate, as long as they are included
in the same job services plan; and
[[Page 68582]]
(vii) Work supports, such as transportation assistance, uniforms,
and tools.
* * * * *
0
25. Amend Sec. 303.7 by revising paragraph (d)(10) and adding
paragraph (f) to read as follows:
Sec. 303.7 Provision of services in intergovernmental IV-D cases.
* * * * *
(d) * * *
(10) Notify the initiating agency when a case is closed pursuant to
Sec. Sec. 303.11(b)(17) through (19) and 303.7(d)(9).
* * * * *
(f) Imposition and reporting of annual $25 fee in interstate cases.
The title IV-D agency in the initiating State must impose and report
the annual $25 fee in accordance with Sec. 302.33(e) of this chapter.
0
26. Amend Sec. 303.8 by:
0
a. Redesignating paragraphs (b)(2) through (6) as paragraphs (b)(3)
through (7), respectively;
0
b. Adding paragraph (b)(2); and
0
c. Revising newly redesignated paragraph (b)(7) and paragraph (d).
The addition and revision read as follows:
Sec. 303.8 Review and adjustment of child support orders.
* * * * *
(b) * * *
(2) The State may elect in its State plan to initiate review of an
order, after being notified that a noncustodial parent will be
incarcerated for more than 90 days and without the need for a specific
request, and, upon notice to both parents, adjust the order, if
appropriate, pursuant to paragraph (b)(1)(i) of this section.
* * * * *
(7) The State must provide notice--
(i) Not less than once every 3 years to both 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.
(ii) If the State has not elected paragraph (b)(2) of this section,
when the IV-D agency learns that a noncustodial parent is incarcerated,
to the incarcerated noncustodial parent and the custodial parent
informing them of the right to request the State to review and, upon
request, to adjust the order consistent with this section. The notice
must specify, at a minimum, the place and manner in which the request
should be made.
* * * * *
(d) Health care needs must be an 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.
* * * * *
0
27. Revise Sec. 303.11 to read as follows:
Sec. 303.11 Case closure criteria.
(a) The IV-D agency shall establish a system for case closure.
(b) The IV-D agency may elect to close a case if the case meets at
least one of the following criteria and supporting documentation for
the case closure decision is maintained in the case record:
(1) There is no longer a current support order and arrearages are
under $500 or unenforceable under State law;
(2) There is no longer a current support order and all arrearages
in the case are assigned to the State;
(3) There is no longer a current support order, the children have
reached the age of majority, the noncustodial parent is entering or has
entered long-term care arrangements (such as a residential care
facility or home health care), and the noncustodial parent has no
income or assets available above the subsistence level that could be
levied or attached for support;
(4) The noncustodial parent or alleged father is deceased and no
further action, including a levy against the estate, can be taken;
(5) The noncustodial parent is living with the minor child (as the
primary caregiver or in an intact two parent household), and the IV-D
agency has determined that services are not appropriate;
(6) Paternity cannot be established because:
(i) The child is at least 18 years old and action to establish
paternity is barred by a statute of limitations which meets the
requirements of Sec. 302.70(a)(5) of this chapter;
(ii) A genetic test or a court or administrative process has
excluded the alleged father and no other alleged father can be
identified;
(iii) In accordance with Sec. 303.5(b), the IV-D agency has
determined that it would not be in the best interests of the child to
establish paternity in a case involving incest or forcible rape, or in
any case where legal proceedings for adoption are pending; or
(iv) The identity of the biological father is unknown and cannot be
identified after diligent efforts, including at least one interview by
the IV-D agency with the recipient of services;
(7) The noncustodial parent's location is unknown, and the State
has made diligent efforts using multiple sources, in accordance with
Sec. 303.3, all of which have been unsuccessful, to locate the
noncustodial parent:
(i) Over a 2-year period when there is sufficient information to
initiate an automated locate effort; or
(ii) Over a 6-month period when there is not sufficient information
to initiate an automated locate effort; or
(iii) After a 1-year period when there is sufficient information to
initiate an automated locate effort, but locate interfaces are unable
to verify a Social Security Number;
(8) The IV-D agency has determined that throughout the duration of
the child's minority (or after the child has reached the age of
majority), the noncustodial parent cannot pay support and shows no
evidence of support potential because the parent has been
institutionalized in a psychiatric facility, is incarcerated, has a
medically-verified total and permanent disability, or has had multiple
referrals for services by the State over a 5-year period which have
been unsuccessful. The State must also determine that the noncustodial
parent has no income or assets available above the subsistence level
that could be levied or attached for support;
(9) The noncustodial parent's sole income is from:
(i) Supplemental Security Income (SSI) payments made pursuant to
sections 1601 et seq., of title XVI of the Act, 42 U.S.C. 1381 et seq.;
(ii) both SSI and benefits under title II of the Act; or
(iii) other needs-based benefits not subject to garnishment;
(10) The noncustodial parent is a citizen of, and lives in, a
foreign country, does not work for the Federal government or a company
with headquarters or offices in the United States, and has no reachable
domestic income or assets; and State has been unable to establish
reciprocity with the country;
(11) The IV-D agency has provided location-only services as
requested under Sec. 302.35(c)(3) of this chapter;
(12) The non-IV-A recipient of services requests closure of a case
and there is no assignment to the State of medical support under 42 CFR
433.146 or of arrearages which accrued under a support order;
[[Page 68583]]
(13) The IV-D agency has completed a limited service under Sec.
302.33(a)(6) of this chapter;
(14) There has been a finding by the responsible State agency of
good cause or other exceptions to cooperation with the IV-D agency and
the State or local assistance program, such as IV-A, IV-D, IV-E, and
Medicaid, which has determined that support enforcement may not proceed
without risk of harm to the child or caretaker relative;
(15) In a non-IV-A case receiving services under Sec.
302.33(a)(1)(i) or (iii) of this chapter, or under Sec.
302.33(a)(1)(ii) when cooperation with the IV-D agency is not required
of the recipient of services, the IV-D agency is unable to contact the
recipient of services despite a good faith effort to contact the
recipient through at least two different methods;
(16) In a non-IV-A case receiving services under Sec.
302.33(a)(1)(i) or (iii) of this chapter, or under Sec.
302.33(a)(1)(ii) when cooperation with the IV-D agency is not required
of the recipient of services, the IV-D agency documents the
circumstances of the recipient's noncooperation and an action by the
recipient of services is essential for the next step in providing IV-D
services;
(17) The IV-D agency documents failure by the initiating agency to
take an action which is essential for the next step in providing
services;
(18) The initiating agency has notified the responding State that
the initiating State has closed its case under Sec. 303.7(c)(11);
(19) The initiating agency has notified the responding State that
its intergovernmental services are no longer needed;
(20) Another assistance program, including IV-A, IV-E, and Medicaid
has referred a case to the IV-D agency that is inappropriate to
establish, enforce, or continue to enforce a child support order and
the custodial or noncustodial parent has not applied for services; or
(21) The case has been transferred to a Tribal IV-D agency and the
State IV-D agency has complied with the following procedures:
(i) Before transferring the case to a Tribal IV-D agency:
(A) The recipient of services requested the State to transfer its
case to the Tribal IV-D agency; or
(B) The IV-D agency has notified the recipient of services of its
intent to transfer the case to the Tribal IV-D agency and the recipient
did not respond to the notice to transfer the case within 60 calendar
days from the date notice was provided;
(ii) The IV-D agency completely and fully transferred the case; and
(iii) The IV-D agency notified the recipient of services that the
case has been transferred to the Tribal IV-D agency.
(c) The IV-D agency must close a case and maintain supporting
documentation for the case closure decision when the following criteria
have been met:
(1) The child is eligible for health care services from the Indian
Health Service (IHS); and
(2) The IV-D case was opened because of a Medicaid referral based
solely upon health care services, including contract health services,
provided through an Indian Health Program (as defined at 25 U.S.C.
1603(12)).
(d) The IV-D agency must have the following requirements for case
closure notification and case reopening:
(1) In cases meeting the criteria in paragraphs (b)(1) through (10)
and (b)(15) through (16) of this section, the State must notify the
recipient of services in writing 60 calendar days prior to closure of
the case of the State's intent to close the case.
(2) In an intergovernmental case meeting the criteria for closure
under paragraph (b)(17) of this section, the responding State must
notify the initiating agency, in a record, 60 calendar days prior to
closure of the case of the State's intent to close the case.
(3) The case must be kept open if the recipient of services, or the
initiating agency supplies information in response to the notice
provided under paragraph (d)(1) or (2) of this section which could lead
to the establishment of paternity or a support order or enforcement of
an order, or, in the instance of paragraph (b)(15) of this section, if
contact is reestablished with the recipient of services.
(4) In a case meeting the criteria for closure in paragraph (b)(20)
or (c) of this section, the IV-D agency must notify the referring
agency, in a record, 60 calendar days prior to closure of the case of
the State's intent to close the case.
(5) If the referring agency does not respond to the notice provided
under paragraph (d)(4) of this section, or does not provide information
that indicates that child support services are needed for the case, the
IV-D agency may close the case.
(6) For cases closed pursuant to paragraphs (b)(13) and (d)(5) of
this section, the State must notify the recipient that the case has
been closed within 30 calendar days of closing the case. This notice
must also provide information regarding reapplying for child support
services and the consequences of receiving services, including any
State fees, cost recovery, and distribution policies. If the recipient
reapplies for child support services in a case that was closed pursuant
to paragraph (b)(13) of this section, the recipient will complete a new
application for IV-D services and pay any applicable fee. If the
recipient reapplies for services in a case that was closed pursuant to
(d)(5), the recipient will complete a new application for IV-D services
but will not be charged a fee.
(7) If the case is closed, the former recipient of services may
request at a later date that the case be reopened if there is a change
in circumstances which could lead to the establishment of paternity or
a support order or enforcement of an order by completing a new
application for IV-D services and paying any applicable application
fee.
(e) The IV-D agency must retain all records for cases closed
pursuant to this section for a minimum of three years, in accordance
with 45 CFR part 92.
0
28. Amend Sec. 303.31 by revising paragraphs (a)(2), (a)(3), (b)(1),
(b)(2), (b)(3) introductory text, (b)(3)(i), and (b)(4) to read as
follows:
Sec. 303.31 Securing and enforcing medical support obligations.
(a) * * *
(2) Health insurance includes fee for service, health maintenance
organization, preferred provider organization, and other types of
private and public coverage which is available to either parent, under
which medical services could be provided to the dependent child(ren).
(3) Cash medical support or the cost of health insurance is
considered reasonable in cost if the cost to the parent responsible for
providing medical support does not exceed five percent of his or her
gross income or, at State option, a reasonable alternative income-based
numeric standard defined in State law, regulations, or court rule
having the force of law or State child support guidelines adopted in
accordance with Sec. 302.56(c) of this chapter.
(b) * * *
(1) Petition the court or administrative authority to:
(i) Include health insurance that is accessible to the child(ren),
as defined by the State, and is available to the parent responsible for
providing medical support at reasonable cost, as defined under
paragraph (a)(3) of this section, in new or modified court or
administrative orders for support; and
(ii) Determine how to allocate the cost of coverage between the
parents.
[[Page 68584]]
(2) If health insurance described in paragraph (b)(1) of this
section is not available at the time the order is entered or modified,
petition to include cash medical support in new or modified orders
until such time as health insurance, that is accessible and reasonable
in cost as defined under paragraph (a)(3) of this section, becomes
available. In appropriate cases, as defined by the State, cash medical
support may be sought in addition to health insurance coverage.
(3) Establish criteria, which are reflected in a record, to
identify orders that do not address the health care needs of children
based on--
(i) Evidence that health insurance may be available to either
parent at reasonable cost, as defined under paragraph (a)(3) of this
section; and
* * * * *
(4) Petition the court or administrative authority to modify
support orders, in accordance with State child support guidelines, for
cases identified in paragraph (b)(3) of this section to include health
insurance and/or cash medical support in accordance with paragraphs
(b)(1) and (2) of this section.
* * * * *
0
29. Amend Sec. 303.72 by revising paragraph (d)(1) to read as follows:
Sec. 303.72 Requests for collection of past-due support by Federal
tax refund offset.
* * * * *
(d) * * *
(1) The State referring past-due support for offset must, in
interstate situations, notify any other State involved in enforcing the
support order when it receives the offset amount from the Secretary of
the U.S. Treasury.
* * * * *
0
30. Amend Sec. 303.100 by revising paragraph (e)(1) introductory text
and adding paragraphs (h) and (i) to read as follows:
Sec. 303.100 Procedures for income withholding.
* * * * *
(e) Notice to the employer for immediate and initiated withholding.
(1) To initiate withholding, the State must send the noncustodial
parent's employer a notice using the required OMB-approved Income
Withholding for Support form that includes the following:
* * * * *
(h) Notice to employers in all child support orders. The notice to
employers in all child support orders must be on an OMB-approved Income
Withholding for Support form.
(i) Payments sent to the SDU in child support order not enforced
under the State IV-D plan. Income withholding payments made under child
support orders initially issued in the State on or after January 1,
1994 that are not being enforced under the State IV-D plan must be sent
to the State Disbursement Unit for disbursement to the family in
accordance with sections 454B and 466(a)(8) and (b)(5) of the Act and
Sec. 302.32(a) of this chapter.
PART 304--FEDERAL FINANCIAL PARTICIPATION
0
31. The authority 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).
0
32. Revise Sec. 304.10 to read as follows:
Sec. 304.10 General administrative requirements.
As a condition for Federal financial participation, the provisions
of part 92 of this title (with the exception of 45 CFR 92.24, Matching
or Cost Sharing and 45 CFR 92.41, Financial Reporting) establishing
uniform administrative requirements and cost principles shall apply to
all grants made to States under this part.
Sec. 304.12 [Amended]
0
33. Amend Sec. 304.12 by removing paragraphs (c)(4) and (5).
0
34. Amend Sec. 304.20 by:
0
a. Revising paragraphs (a)(1), (b) introductory text, (b)(1)(iii)
introductory text, (b)(1)(viii) introductory text, (b)(1)(viii)(A),
(b)(1)(ix), (b)(2) introductory text, (b)(2)(vii), (b)(3) introductory
text, and (b)(11);
0
b. Removing the ``.'' at the end of paragraph (b)(1)(viii)(C) and
adding a ``;'' in its place;
0
c. Redesignating paragraph (b)(3)(v) as paragraph (b)(3)(viii);
0
d. Adding paragraphs (b)(1)(viii)(D), (b)(1)(viii)(E), (b)(3)(v)
through (vii), (b)(3)(ix), and (b)(12);
0
e. Removing ``and'' at the end of paragraph (b)(9); and
0
f. Removing paragraphs (c) and (d).
The additions and revisions read as follows:
Sec. 304.20 Availability and rate of Federal financial participation.
(a) * * *
(1) Necessary and reasonable expenditures for child support
services and activities to carry out the State title IV-D plan;
* * * * *
(b) Services and activities for which Federal financial
participation will be available will be those made to carry out the
title IV-D State plan, including obtaining child support, locating
noncustodial parents, and establishing paternity, that are determined
by the Secretary to be necessary and reasonable expenditures properly
attributed to the Child Support Enforcement program, including, but not
limited to the following:
(1) * * *
(iii) The establishment of all necessary agreements with other
Federal, State, and local agencies or private providers to carry out
Child Support Enforcement program activities in accordance with
Procurement Standards, 45 CFR 92.36(b). These agreements may include:
* * * * *
(viii) The establishment of agreements with agencies administering
the State's title IV-A and IV-E plans including criteria for:
(A) Referring cases to and from the IV-D agency;
* * * * *
(D) The procedures to be used to coordinate services; and
(E) Agreements to exchange data as authorized by law.
(ix) The establishment of agreements with State agencies
administering Medicaid or CHIP, including criteria for:
(A) Referring cases to and from the IV-D agency;
(B) The procedures to be used to coordinate services; and
(C) Agreements to exchange data as authorized by law.
(2) The establishment of paternity, including, but not limited to:
* * * * *
(vii) Developing and providing to parents and family members,
hospitals, State birth records agencies, and other entities designated
by the State and participating in the State's voluntary paternity
establishment program, under Sec. 303.5(g) of this chapter,
educational and outreach activities, written and audiovisual materials
about paternity establishment and forms necessary to voluntarily
acknowledge paternity; and
* * * * *
(3) The establishment and enforcement of support obligations
including, but not limited to:
* * * * *
(v) Bus fare or other minor transportation expenses to enable
custodial or noncustodial parties to participate in child support
proceedings and related activities;
(vi) Services to increase pro se access to adjudicative and
alternative dispute resolution processes in IV-D cases;
(vii) De minimis costs associated with the inclusion of parenting
time provisions entered as part of a child
[[Page 68585]]
support order and incidental to a child support enforcement proceeding;
* * * * *
(ix) Job services activities pursuant to Sec. 303.6(c)(5) of this
chapter.
* * * * *
(11) Medical support activities as specified in Sec. Sec. 303.30,
303.31, and 303.32 of this chapter; and
(12) Educational and outreach activities intended to inform the
public, parents and family members, and young people who are not yet
parents about the Child Support Enforcement program, responsible
parenting and co-parenting, family budgeting, and other financial
consequences of raising children when the parents are not married to
each other.
0
35. Amend Sec. 304.21 by revising paragraphs (a) introductory text and
(a)(1) to read as follows:
Sec. 304.21 Federal financial participation in the costs of
cooperative arrangements with courts and law enforcement officials.
(a) General. Subject to the conditions and limitations specified in
this part, Federal financial participation (FFP) at the applicable
matching rate is available in the costs of cooperative agreements with
appropriate courts and law enforcement officials in accordance with the
requirements of Sec. 302.34 of this chapter. Law enforcement officials
means district attorneys, attorneys general, similar public attorneys
and prosecutors and their staff, and corrections officials. When
performed under agreement, which is reflected in a record, costs of the
following activities are subject to reimbursement:
(1) The activities, including administration of such activities,
specified in Sec. 304.20(b)(2) through (8) and (b)(11);
* * * * *
0
36. Revise Sec. 304.23 to read as follows:
Sec. 304.23 Expenditures for which Federal financial participation is
not available.
Federal financial participation at the applicable matching rate is
not available for:
(a) Activities related to administering titles I, IV-A, IV-B, IV-E,
X, XIV, XVI, XIX, XX, or XXI of the Act or 7 U.S.C. Chapter 51.
(b) Purchased support enforcement services which are not secured in
accordance with Sec. 304.22.
(c) Construction and major renovations.
(d) Education and training programs and educational services for
State and county employees and court personnel except direct cost of
short term training provided to IV-D agency staff or pursuant to
Sec. Sec. 304.20(b)(2)(viii) and 304.21.
(e) Any expenditures which have been reimbursed by fees collected
as required by this chapter.
(f) Any costs of those caseworkers described in Sec. 303.20(e) of
this chapter.
(g) Any expenditures made to carry out an agreement under Sec.
303.15 of this chapter.
(h) The costs of counsel for indigent defendants in IV-D actions.
(i) The costs of guardians ad litem in IV-D actions.
Sec. 304.25 [Amended]
0
37. Amend Sec. 304.25 by:
0
a. In paragraph (a), removing the reference ``part 74'' and adding the
reference ``part 92'' in its place; and
0
b. In paragraph (b), removing ``30 days'' and adding ``45 days'' in its
place.
0
38. Amend Sec. 304.26 by revising paragraph (a)(1), removing and
reserving paragraph (b), and removing paragraph (c) to read as follows:
Sec. 304.26 Determination of Federal share of collections.
(a) * * *
(1) 75 percent for Puerto Rico, the Virgin Islands, Guam, and
American Samoa for the distribution of retained IV-A collections; 55
percent for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana
Islands, and American Samoa for the distribution of retained IV-E
collections; 70 percent for the District of Columbia for the
distribution of retained IV-E collections; and
* * * * *
0
39. Amend Sec. 304.40 by revising paragraph (a)(2) to read as follows:
Sec. 304.40 Repayment of Federal funds by installments.
(a) * * *
(2) The State has notified the OCSE Regional Office in a record of
its intent to make installment repayments. Such notice must be given
prior to the time repayment of the total was otherwise due.
* * * * *
PART 305--PROGRAM PERFORMANCE MEASURES, STANDARDS, FINANCIAL
INCENTIVES, AND PENALTIES
0
40. The authority for part 305 is revised to read as follows:
Authority: 42 U.S.C. 609(a)(8), 652(a)(4) and (g), 658a, and
1302.
0
41. Amend Sec. 305.35 by:
0
a. In paragraph (d), adding a sentence to the end of the paragraph;
0
b. Redesignating paragraph (e) as paragraph (f); and
0
c. Adding paragraph (e).
The revision and addition read as follows:
Sec. 305.35 Reinvestment.
* * * * *
(d) * * * Non-compliance will result in disallowances of incentive
amounts equal to the amount of funds supplanted.
(e) Using the Form OCSE-396A, ``Child Support Enforcement Program
Expenditure Report,'' the State Current Spending Level will be
calculated by determining the State Share of Total Expenditures Claimed
for all four quarters of the fiscal year minus State Share of IV-D
Administrative Expenditures Made Using Funds Received as Incentive
Payments for all four quarters of the fiscal year, plus the Federal
Parent Locator Service (FPLS) fees for all four quarters of the fiscal
year.
(1) The State Share of Expenditures claimed is: Total Expenditures
Claimed for the Current Quarter and the Prior Quarter Adjustments minus
the Federal Share of Total Expenditures Claimed for the Current Quarter
and Prior Quarter Adjustments claimed on the Form OCSE-396A for all
four quarter of the fiscal year.
(2) The State Share of IV-D Administrative Expenditures Made Using
Funds Received as Incentive Payments is: IV-D Administrative
Expenditures Made Using Funds Received as Incentive Payments for the
Current Quarter and the Prior Quarter Adjustments minus the Federal
Share of IV-D Administrative Expenditures Made Using Funds Received as
Incentive Payments for the Current Quarter and Prior Quarter
Adjustments claimed on the Form OCSE-396A for all four quarters of the
fiscal year.
(3) The Fees for the Use of the Federal Parent Locator Service
(FPLS) can be computed by adding the FPLS fees claimed on the Form
OCSE-396A for all four quarters of the fiscal year.
* * * * *
0
42. Amend Sec. 305.63 by revising paragraph (d) introductory text to
read as follows:
Sec. 305.63 Standards for determining substantial compliance with IV-
D requirements.
* * * * *
(d) With respect to the 75 percent standard in paragraph (c) of
this section:
* * * * *
0
43. Amend Sec. 305.64 by revising the second sentence of paragraph (c)
to read as follows:
[[Page 68586]]
Sec. 305.64 Audit procedures and State comments.
* * * * *
(c) * * * Within a specified timeframe from the date the report was
sent, the IV-D agency may submit comments, which are reflected in a
record, on any part of the report which the IV-D agency believes is in
error. * * *
0
44. Amend Sec. 305.66 by revising paragraph (a) to read as follows:
Sec. 305.66 Notice, corrective action year, and imposition of
penalty.
(a) If a State is found by the Secretary to be subject to a penalty
as described in Sec. 305.61, the OCSE will notify the State, in a
record, of such finding.
* * * * *
PART 307--COMPUTERIZED SUPPORT ENFORCEMENT SYSTEMS
0
45. The authority for part 307 continues to read as follows:
Authority: 42 U.S.C. 652 through 658, 664, 666 through 669A,
and 1302.
0
46. Amend Sec. 307.5 by revising paragraph (c)(3) to read as follows:
Sec. 307.5 Mandatory computerized support enforcement systems.
* * * * *
(c) * * *
(3) The State provides assurance, which is reflected in a record,
that steps will be taken to otherwise improve the State's Child Support
Enforcement program.
* * * * *
0
47. Amend Sec. 307.11 by revising paragraph (c)(3) to read as follows:
Sec. 307.11 Functional requirements for computerized support
enforcement systems in operation by October 1, 2000.
* * * * *
(c) * * *
(3) Automatic use of enforcement procedures, including those under
section 466(c) of the Act if payments are not timely, and the following
procedures:
(i) Identify cases which have been previously identified as
involving a noncustodial parent who is a recipient of SSI or concurrent
SSI and benefits under title II of the Act, to prevent garnishment of
the noncustodial parent's financial account; and
(ii) Return funds to a noncustodial parent, within 2 days after the
agency determines that SSI or concurrent SSI and benefits under title
II of the Act, in the noncustodial parent's financial account have been
incorrectly garnished.
* * * * *
PART 308--ANNUAL STATE SELF-ASSESSMENT REVIEW AND REPORT
0
48. The authority for part 308 continues to read as follows:
Authority: 42 U.S.C. 654(15)(A) and 1302.
0
49. Amend Sec. 308.2 by revising paragraphs (b)(2)(ii), (c)(3)(i), and
(f)(2)(i) to read as follows:
Sec. 308.2 Required program compliance criteria.
* * * * *
(b) * * *
(2) * * *
(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 and State Parent Locator Services, U.S.
Postal Service, State workforce agency, employment data, Department of
Motor Vehicles, and credit bureaus;
* * * * *
(c) * * *
(3) * * *
(i) If location activities are necessary, using all appropriate
location sources within 75 days pursuant to Sec. 303.3(b)(3) of this
chapter. Location sources include: Custodial parent, Federal and State
Parent Locator Services, U.S. Postal Service, State workforce agency,
Department of Motor Vehicles, and credit bureaus;
* * * * *
(f) * * *
(2) * * *
(i) If location 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. Location sources
include: Custodial parent, Federal and State Parent Locator Services,
U.S. Postal Service, State workforce agency, unemployment data,
Department of Motor Vehicles, and credit bureaus;
* * * * *
PART 309--TRIBAL CHILD SUPPORT ENFORCEMENT (IV-D) PROGRAM
0
50. The authority for part 309 is revised to read as follows:
Authority: 42 U.S.C. 655(f) and 1302.
0
51. Amend Sec. 309.85 by revising paragraph (b) to read as follows:
Sec. 309.85 What records must a Tribe or Tribal organization agree to
maintain in a Tribal IV-D plan?
* * * * *
(b) The Tribal IV-D agency will comply with the retention and
access requirements at 45 CFR 92.42, including the requirement that
records be retained for at least 3 years.
0
52. Amend Sec. 309.130 by revising paragraphs (b)(3), (b)(4), (d)(3),
and (h) to read as follows:
Sec. 309.130 How will Tribal IV-D programs be funded and what forms
are required?
* * * * *
(b) * * *
(3) SF 425, ``Federal Financial Report,'' to be submitted quarterly
within 30 days after the end of each of the first three quarters of the
funding period and within 30 days after the end of each of the first
three quarters of the liquidation period. The final report for each
period is due within 90 days after the end of the fourth quarter of
both the funding and the liquidation period; and
(4) Form OCSE-34A, ``Quarterly Report of Collections'' must be
submitted no later than 45 days following the end of each fiscal
quarter. No revisions or adjustments of the financial reports submitted
for any quarter of the fiscal year will be accepted by OCSE later than
December 31, 3 months after the end of the fiscal year.
* * * * *
(d) * * *
(3) The non-federal share of program expenditures must be provided
either with cash or with in-kind contributions and must meet the
requirements found in 45 CFR 92.24.
* * * * *
(h) Grant administration requirements. The provisions of part 92 of
this title, establishing uniform administrative requirements and cost
principles, shall apply to all grants made to Tribes and Tribal
organizations under this part.
0
53. Amend Sec. 309.145 by revising paragraph (a)(3) introductory text
to read as follows:
Sec. 309.145 What costs are allowable for Tribal IV-D programs
carried out under Sec. 309.65(a) of this part?
* * * * *
(a) * * *
(3) Establishment of all necessary agreements with other Tribal,
State, and local agencies or private providers for the provision of
child support enforcement services in accordance with Procurement
Standards found in 45 CFR part 92. These agreements may include:
* * * * *
0
54. Amend Sec. 309.160 by revising the first sentence to read as
follows:
[[Page 68587]]
Sec. 309.160 How will OCSE determine if Tribal IV-D program funds are
appropriately expended?
OCSE will rely on audits required by OMB Circular A-133, ``Audits
of States, Local Governments, and Non-Profit Organizations'' and 45 CFR
part 92. * * *
* * * * *
[FR Doc. 2014-26822 Filed 11-13-14; 8:45 am]
BILLING CODE 4184-01-P