[Federal Register Volume 81, Number 244 (Tuesday, December 20, 2016)]
[Rules and Regulations]
[Pages 93492-93569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-29598]
[[Page 93491]]
Vol. 81
Tuesday,
No. 244
December 20, 2016
Part VII
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 433
Administration for Children and Families
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45 CFR Parts 301, 302, 303, et al.
Flexibility, Efficiency, and Modernization in Child Support Enforcement
Programs; Final Rule
Federal Register / Vol. 81 , No. 244 / Tuesday, December 20, 2016 /
Rules and Regulations
[[Page 93492]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 433
[CMS-2343-F]
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: Final rule.
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SUMMARY: This rule is intended to carry out the President's directives
in Executive Order 13563: Improving Regulation and Regulatory Review.
The final rule will 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 final rule will improve and simplify program
operations, and remove outmoded limitations to program innovations to
better serve families. In addition, the final rule clarifies and
corrects technical provisions in existing regulations. The rule makes
significant changes to the regulations on case closure, child support
guidelines, and medical support enforcement. It will improve child
support collection rates because support orders will reflect the
noncustodial parent's ability to pay support, and more noncustodial
parents will support their children.
DATES: This final rule is effective on January 19, 2017. States may
comply any time after the effective date, but before the final
compliance date, except for the amendment to Sec. 433.152, which is
effective on January 20, 2017. The compliance dates, or the dates that
States must comply with the final rule, vary for the various sections
of the Federal regulations. The reasons for delaying compliance dates
include State legislative changes, system modifications, avoiding the
need for a special guidelines commission review, etc.
The compliance date, or the date by which the States must follow
the rule, will be February 21, 2017 except, as noted below:
Guidelines for setting child support orders [Sec.
302.56(a)-(g)], Establishment of support obligations [Sec. 303.4], and
Review and adjustment of child support orders [Sec. 303.8(c) and (d)]:
The compliance date is 1 year after completion of the first quadrennial
review of the State's guidelines that commences more than 1 year after
publication of the final rule.
The requirements for reviewing guidelines for setting
child support awards [Sec. 302.56(h)]: The compliance date is for the
first quadrennial review of the guidelines commencing after the State's
guidelines have initially been revised under this final rule.
Continuation of service for IV-E cases [Sec.
302.33(a)(4)], Location of noncustodial parents in IV-D cases [Sec.
303.3], Mandatory notice under Review and adjustment of child support
orders [Sec. 303.8(b)(7)(ii)], Mandatory provisions of Case closure
criteria [Sec. 303.11(c) and (d)], and Functional requirements for
computerized support enforcement systems in operation by October 1,
2000 [Sec. 307.11(c)(3)(i) and (ii)]: The compliance date is 1 year
from date of publication of the final rule, or December 20, 2017.
However, if State law changes are needed, then the compliance date will
be 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 final rule.
Optional provisions (such as Paternity-only Limited
Service [Sec. 302.33(a)(6)], Case closure criteria [Sec. 303.11(b)],
Review and adjustment of child support orders [Sec. 303.8(b)(2)],
Availability and rate of Federal financial participation [Sec.
304.20], and Topic 2 Revisions): There is no specific compliance date
for optional provisions.
Payments to the family [Sec. 302.38], Enforcement of
support obligations [Sec. 303.6(c)(4)], and Securing and enforcing
medical support obligations [Sec. 303.31]: If State law revisions are
needed, the compliance date is 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 State law revisions are not needed, the compliance date
is 60 days after publication of the final rule.
Collection and disbursement of support payments by the IV-
D agency [Sec. 302.32], Required State laws [Sec. 302.70], Procedures
for income withholding [Sec. 303.100], Expenditures for which Federal
financial participation is not available [Sec. 304.23], and Topic 3
revisions: The compliance date is the same as the effective date for
the regulation since these revisions reflect existing requirements.
FOR FURTHER INFORMATION CONTACT: The OCSE Division of Policy and
Training at [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 time.
SUPPLEMENTARY INFORMATION:
I. Statutory Authority
This final rule 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. Additionally, the Secretary has authority under section
452(a)(1) of the Act to ``establish such standards for State programs
for locating noncustodial parents, establishing paternity, and
obtaining child support . . . as he[she] determines to be necessary to
assure that such programs will be effective.'' Rules promulgated under
section 452(a)(1) must meet two conditions. First, the Secretary's
designee must find that the rule meets one of the statutory objectives
of ``locating noncustodial parents, establishing paternity, and
obtaining child support.'' Second, the Secretary's designee must
determine that the rule is necessary to ``assure that such programs
will be effective.''
Section 454(13) requires a State plan to ``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 and provide that
information requests by parents who are residents of other States be
treated with the same priority as requests by parents who are residents
of the State submitting the plan.''
This final rule is published in accordance with the following
sections of the Act: Section 451--Appropriation;
[[Page 93493]]
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--Payments 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 459A--International support enforcement; 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.
II. Background
The Child Support Enforcement program was established to hold
noncustodial parents accountable for providing financial support for
their children. Child support payments play an important role in
reducing child poverty, lifting approximately one million people out of
poverty each year. In 2014, the Child Support Enforcement program
collected $28.2 billion in child support payments for the families in
State and Tribal caseloads. During this same period, 85 percent of the
cases had child support orders, and nearly 71 percent of cases with
support orders had at least some payments during the year. For current
support, 64 percent of current collections are collected on time every
month.
This final rule makes changes to strengthen the Child Support
Enforcement program and update current practices in order to increase
regular, on-time payments to all 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 almost three-fourths of child support payments are
collected by employers through income withholding, this 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 rule updates the
program to reflect the recent Supreme Court decision in 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 identify
ways to improve program flexibility, efficiency, and responsiveness;
promote technological and programmatic innovation; and update outmoded
ways of doing business. Some of these regulations had not been updated
in a generation. 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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This final rule recognizes and incorporates policies and practices
that reflect the progress and positive results from successful program
implementation by States and Tribes.
The section-by-section discussion below provides greater detail on
the provisions of the rule. All references to regulations are related
to 45 CFR Chapter III, except as specified in sections relating to the
CMS regulations (42 CFR part 433). In general, this final rule only
affects regulations governing State IV-D programs, and does not impact
Tribal IV-D program rules under 45 CFR part 309, except for some minor
technical changes.
III. Summary Descriptions of the Regulatory Provisions
The following is a summary of the regulatory provisions included in
the final rule and how these provisions differ from what was initially
included in the Notice of Proposed Rulemaking (NPRM). The NPRM was
published in the Federal Register on November 17, 2014 (79 FR 68548
through 68587). The comment period ended January 16, 2015. We received
more than 2,000 sets of public comments. Although the NPRM was strongly
supported, we received numerous comments on specific provisions. We
made a number of adjustments to the final rule in response to those
comments.
This final rule includes (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 rule.
Please note the provisions are discussed in order by category. We
present the revisions in these three categories to 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;
303.3; 303.4; 303.6; 303.8; 303.11 (Including revisions to 42 CFR
433.152); 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
Section 302.32 mirrors Federal law which requires State
Disbursement Units (SDUs) to collect and disburse child support
payments in accordance with support orders in IV-D cases. Additionally,
SDUs must collect and disburse child support payments 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 in accordance with section 466(a)(8)(B) of the Act. The
provision also specifies timeframes for the disbursement of support
payments.
Paragraph (a) describes the basic IV-D State plan requirement that
each State must establish and operate an SDU for the collection and
disbursement of child support payments.
Paragraphs (a)(1) and (2) identify the types of child support cases
for which support payments must be collected and disbursed through the
SDU. Paragraph (a)(1) specifies that support payments under support
orders in all cases under the State IV-D plan must be collected and
disbursed through the SDU. Paragraph (a)(2) requires that support
payments under support orders in all cases not being enforced under the
State IV-D plan (non-IV-D cases) in which the support order is
initially issued in the State on or after January 1, 1994, and
[[Page 93494]]
in which the income of the noncustodial parent is subject to
withholding in accordance with section 466(a)(8)(B) of the Act must be
collected and disbursed through the SDU.
Paragraph (b) is introductory language preceding timeframes for
disbursement of various types of child support collections. Paragraph
(b)(1) requires that in intergovernmental IV-D cases, child support
collected on behalf of the initiating agency must be forwarded to the
initiating agency within 2 business days of the date of receipt by the
SDU in the responding State. The provision also includes an updated
reference to the intergovernmental child support regulations at Sec.
303.7(d)(6)(v) of this chapter. In response to comments regarding
paragraph (b)(1), in the final rule we changed the term interstate to
intergovernmental. We also used the term initiating agency instead of
initiating State, recognizing that intergovernmental IV-D cases may be
initiated by Tribal or foreign child support programs and not only
States.
Section 302.33--Services to Individuals Not Receiving Title IV-A
Assistance
Section 302.33(a)(4) requires that whenever a family is no longer
eligible for State's Title IV-A and Medicaid assistance, 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 notification requirement
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.
Under Sec. 302.33(a)(6), the State has the option of providing
limited services for paternity-only services in intrastate cases to any
applicant who requests such services. In response to comments, we
narrowed the scope of limited services to paternity-only intrastate
cases, instead of allowing a wide range of limited services. Although
several commenters expressed support for increasing the flexibility of
services offered to applicants, the revisions are based on other
comments expressing concerns about the difficulty and cost for States
to implement a menu of limited services in the context of
intergovernmental enforcement. Some commenters also expressed concerns
about how limited enforcement services options might impact Federal
reporting and the performance measures used for incentive payments.
In the preamble to the NPRM, OCSE specifically requested feedback
from commenters regarding whether there are additional domestic
violence safeguards that should be put in place with respect to limited
services. Some commenters emphasized the need for domestic violence
safeguards in this area. In response to these commenters, we added
language to the final rule requiring States to include domestic
violence safeguards when establishing and using paternity-only limited
services procedures.
Section 302.38--Payments to the Family
Section 302.38 reinforces the requirements found in section
454(11)(B) of the Act. The provision in the rule requires that a
State's IV-D 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, caretaker relative having custody
of or responsibility for the child or children, conservator
representing the custodial parent and child directly with a legal and
fiduciary duty, or alternate caretaker designated in a record by the
custodial parent. An alternate caretaker is a nonrelative caretaker who
is designated in a record by the custodial parent to take care of the
children for a temporary time period. Based on comments received, we
added ``judicially-appointed conservator with a legal and fiduciary
duty to the custodial parent and the child'' and ``alternate caretaker
designated in a record by the custodial parent'' to the list of
individuals to whom payments can be made. We also clarified what is
meant by an alternate caretaker.
Section 302.56--Guidelines for Setting Child Support Orders
Section 302.56(a) requires each State to establish one set of
guidelines by law or by judicial or administrative action for setting
and modifying child support order amounts within 1 year after
completion of the State's next quadrennial review of its child support
guidelines, that commences more than 1 year after publication of the
final rule, in accordance with Sec. 302.56(e), as a condition of
approval of its State plan. Considering public comments requesting
additional time to implement revised guidelines, we added ``that
commences more than 1 year after publication of the final rule'' to
provide more time to do research and prepare for those States that have
a quadrennial review that would initiate shortly after the issuance of
this final rule.
Section 302.56(b) requires the State to have procedures for making
guidelines available to all persons in the State. Based on comments, we
removed the phrase ``whose duty it is to set child support award
amounts'' at the end of the sentence.
The introductory paragraph for section 302.56(c) indicates the
minimum requirements for child support guidelines. Paragraph (c)(1)
indicates that child support guidelines must provide the child support
order is based on the noncustodial parent's earnings, income, and other
evidence of ability to pay that: (i) Takes into consideration all
earnings and income of the noncustodial parent (and at the State's
discretion, the custodial parent); (ii) takes into consideration the
basic subsistence needs of the noncustodial parent (and at the State's
discretion, the custodial parent and children) who has a limited
ability to pay by incorporating a low-income adjustment, such as a
self-support reserve or some other method determined by the State; and
(iii) if imputation of income is authorized, takes into consideration
the specific circumstances of the noncustodial parent (and at the
State's discretion, the custodial parent) to the extent known,
including such factors as the noncustodial parent's assets, residence,
employment and earnings history, job skills, educational attainment,
literacy, age, health, criminal record and other employment barriers,
and record of seeking work, as well as the local job market, the
availability of employers willing to hire the noncustodial parent,
prevailing earnings level in the local community, and other relevant
background factors in the case.
Responding to comments, we made major revisions in paragraph
(c)(1). We moved the phrase ``and other evidence of ability to pay''
from paragraph (c)(4) to paragraph (c)(1) based on comments to require
child support guidelines to provide that the child support order is
based on the noncustodial parent's earnings, income, and other evidence
of ability to pay. This provision codifies the basic guidelines
standard for setting order amounts, reflecting OCSE's longstanding
interpretation of statutory guidelines requirements (See AT-93-04 and
PIQ-00-03).\2\
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\2\ AT-93-04, available at http://www.acf.hhs.gov/programs/css/resource/presumptive-guidelines-establishment-support-unreimbursed-assistance and PIQ-00-03, available at: http://www.acf.hhs.gov/programs/css/resource/state-iv-d-program-flexibility-low-income-obligors.
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[[Page 93495]]
In paragraph (c)(1)(i), based on comments, we retained ``all income
and earnings'' and did not change ``all'' to ``actual'' income and
earnings as we had proposed in the NPRM. Based on comments, we also
added ``(and at the State's discretion, the custodial parent).''
Based on comments, we made the following revisions in paragraph
(c)(1). We revised proposed paragraph (c)(4) and redesignated it as
(c)(1)(ii). We added ``basic'' before subsistence needs to clarify
scope. We also added ``(and at the State's discretion, the custodial
parent and children),'' giving States the option of considering the
custodial parent's and children's basic subsistence needs in addition
to the subsistence needs of the noncustodial parent. We also granted
more flexibility to States in how they will consider basic subsistence
needs by adding ``who has a limited ability to pay by incorporating a
low-income adjustment, such as a self-support reserve or some other
method determined by the State.'' We also removed language from the
NPRM that the guidelines ``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.'' We also added paragraph (c)(1)(iii)
related to imputed income.
We redesignated proposed paragraph (c)(3) as (c)(2). This provision
requires that State child support guidelines address how the parents
will provide for the child's health care needs through private or
public health care coverage and/or through cash medical support. To
conform to other medical support revisions in this final rule, we
replaced ``health insurance coverage'' in the NPRM with ``private or
public health care coverage.'' Based on comments, we also removed ``in
accordance with Sec. 303.31 of this chapter'' that was in the NPRM
because Sec. 303.31 only pertains to IV-D cases and this provision of
the rule applies to both IV-D and non-IV-D cases.
OCSE redesignated proposed paragraph (c)(5) as paragraph (c)(3) in
the final rule. This paragraph prohibits the treatment of incarceration
as ``voluntary unemployment'' when establishing or modifying support
orders because State policies that treat incarceration as voluntary
unemployment effectively block application of the Federal review and
adjustment law in section 466(a)(10) of the Act. This section of the
Act requires review, and if appropriate, adjustment of an order upward
or downward upon a showing of a substantial change in circumstances.
This rule redesignated proposed paragraph (c)(2) as (c)(4), which
requires that the guidelines be based on specific descriptive and
numeric criteria and result in a computation of the support obligation.
Paragraph (d) requires States to include a copy of the guidelines in
the State plan. Paragraph (e) requires that each State review, and
revise its guidelines, if appropriate, at least once every 4 years to
ensure that their application results in the determination of
appropriate child support order amounts. Responding to comments, we
added a sentence that requires each State to publish on the Internet
and make accessible to the public all reports of the child support
guidelines reviewing body, the membership of the reviewing body, the
effective date of the guidelines, and the date of the next quadrennial
review.
Paragraph (f) requires States to provide for a rebuttable
presumption, in any judicial or administrative proceeding for the
establishment and modification of a child support order, that the
amount of the order which would result from the application of the
child support guidelines established under paragraph (a) is the correct
amount of child support to be ordered. We made a minor technical
revision to both paragraphs (f) and (g) to specify that these
paragraphs apply to the establishment and modification of a child
support order.
Under paragraph (g) in this rule, a written or specific finding on
the record of a judicial or administrative proceeding for the
establishment or modification of a child support order that the
application of the child support 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 child support guidelines shall state the amount of support
that would have been required under the guidelines and include a
justification of why the child support order varies from the
guidelines.
In response to comments, we deleted proposed paragraph (h), which
would have allowed States to recognize parenting time provisions in
child support orders pursuant to State guidelines or when both parents
have agreed to the parenting time provisions.
In the final rule, we redesignated proposed paragraph (i) as
paragraph (h) and subdivided this paragraph into paragraphs (h)(1)
through (h)(3) to make it easier to read. Paragraph (h)(1) requires, as
part of the review of a State's child support guidelines required under
paragraph (e) of this section, that a State must consider economic data
on the cost of raising children, labor market data (such as
unemployment rates, employment rates, hours worked, and earnings) by
occupation and skill-level for the State and local job markets, the
impact of guideline policies and amounts on custodial and noncustodial
parents who have family incomes below 200 percent of the Federal
poverty level, and factors that influence employment rates among
noncustodial parents and compliance with current support orders. Based
on comments, we added all of the factors to the existing requirement to
consider the economic data on the cost of raising children.
Paragraph (h)(2) requires the State to analyze case data, gathered
through sampling or other methods, on the application of and deviations
from the child support guidelines, as well as the rates of default and
imputed child support orders and orders determined using the low-income
adjustment required under paragraph (c)(1)(ii) of this section. The
analysis must also include a comparison of payments on child support
orders by case characteristics, including whether the order was entered
by default, based on imputed income, or determined using the low-income
adjustment required under paragraph (c)(1)(ii). The analysis of the
data must be used in the State's review of the child support guidelines
to ensure that deviations from the guidelines are limited and guideline
amounts are appropriate based on criteria established by the State
under paragraph (g). Based on comments, we added ``as well as the rates
of default and imputed child support orders and orders determined using
the low-income adjustment required under paragraph (c)(1)(ii) of this
section.'' We also added ``and guideline amounts are appropriate based
on criteria established by the State under paragraph (g).''
Considering public comments, we added the provisions in paragraph
(h)(3) that the State's review of the child support guidelines must
provide a meaningful opportunity for public input, including input from
low-income custodial and noncustodial parents and their
representatives. The State must also obtain the views and advice of the
State child support agency funded under title IV-D.
Finally, OCSE made a technical change in the title and throughout
this
[[Page 93496]]
section to replace ``award'' with ``order.''
Section 302.70--Required State Laws
Section 302.70(d)(2) provides the basis for granting an exemption
from any of the State law requirements discussed in paragraph (a) of
this section and extends the exemption period from 3 to 5 years.
In this section, OCSE maintains the authority to review and to
revoke a State's exemption at any time [paragraphs (d)(2) and (3)].
States may also request an extension of an exemption 90 days prior to
the end of the exemption period [paragraph (d)(4)].
Section 302.76--Job Services
This proposed provision received overwhelming support from states,
Members of Congress, and the public, but it also was opposed by some
Members of Congress who did not think the provision should be included
in the final rule. While we appreciate the support the commenters
expressed, we think allowing for federal IV-D reimbursement for job
services needs further study and would be ripe for implementation at a
later time. Therefore, we are not proceeding with finalizing the
proposed provisions at Sec. Sec. 302.76, 303.6(c)(5), and
304.20(b)(viii).
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 income and/or assets where that
information is necessary. Paragraph (b)(1) requires States to use
appropriate location sources such as the Federal PLS; interstate
location networks; local officials and employees administering public
assistance, general assistance, medical assistance, Supplemental
Nutrition Assistance Program (SNAP), and social services (whether such
individuals are employed by the State or a political subdivision);
relatives and friends of the noncustodial parent; current or past
employers; electronic communications and Internet service providers;
utility companies; the U.S. Postal Service; financial institutions;
unions; corrections institutions; fraternal organizations; police,
parole, and probation records if appropriate; and State agencies and
departments, as authorized by State law, including those departments
which maintain records of public assistance, wages and employment,
unemployment insurance, income taxation, driver's licenses, vehicle
registration, and criminal records and other sources.
In response to comments, we made the following technical revisions
to the list of locate sources in paragraph (b)(1): Changing ``food
stamps'' to Supplemental Nutrition Assistance Program (SNAP); adding
``utility companies;'' changing ``the local telephone company'' to
``electronic communications and Internet service providers ;'' and
changing ``financial references'' to ``financial institutions.''
Section 303.4--Establishment of Support Obligations
The NPRM did not include any revisions to Sec. 303.4; however,
because we had numerous comments related to the general applicability
of State guidelines, we moved the requirements specifically related to
State IV-D agencies to Sec. 303.4. We also had many comments related
to the IV-D agency responsibilities in determining the noncustodial
parent's income and imputation of income when establishing child
support orders. Following this line of comments, we made revisions to
Sec. 303.4 that require State IV-D agencies to implement and use
procedures in IV-D cases related to applying the guidelines regulation.
To address several comments received in response to proposed changes to
Sec. 302.56 regarding establishment of support orders and imputation
of income, we revised this section to address requirements for the
State IV-D agencies when establishing support orders in IV-D cases that
would not be applicable to non-IV-D cases.
In Sec. 303.4(b), States are required to use appropriate State
statutes, procedures, and legal processes in establishing and modifying
support obligation in accordance with Sec. 302.56 of this chapter. We
added ``procedures,'' as well as ``and modifying,'' to the former
paragraph. We also replaced ``pursuant to'' with ``in accordance with''
in this same paragraph.
We also added paragraphs (b)(1) through (b)(4) to provide
additional requirements that State IV-D agencies must meet in
establishing and modifying support obligations. Paragraph (b)(1)
requires States to take reasonable steps to develop a sufficient
factual basis for the support obligation, through such means as
investigations, case conferencing, interviews with both parties, appear
and disclose procedures, parent questionnaires, testimony, and
electronic data sources. Paragraph (b)(2) requires States to gather
information regarding the earnings and income of the noncustodial
parent and, when earning and income information is unavailable in a
case, gather available information about the specific circumstances of
the noncustodial parent, including such factors as listed under Sec.
302.56(c)(iii).
Additionally, paragraph (b)(3) requires basing the support
obligation or recommended support obligation amount on the earnings and
income of the noncustodial parent whenever available. If evidence of
earnings and income is not available or insufficient to use as the
measure of the noncustodial parent's ability to pay, then the support
obligation or recommended support obligation amount should be based on
available information about the specific circumstances of the
noncustodial parent, including such factors as those listed under Sec.
302.56(c)(iii).
Finally, paragraph (b)(4) requires documenting the factual basis
for the support obligation or the recommended support obligation in the
case record.
Sec. 303.6--Enforcement of Support Obligations
In the final rule, we amended Sec. 303.6(c)(4) to require States
to establish guidelines for the use of civil contempt citations in IV-D
cases. The guidelines must include requirements that the IV-D agency
must screen the case for information regarding the noncustodial
parent's ability to pay or otherwise comply with the order. The IV-D
agency must also provide the court with such information regarding the
noncustodial parent's ability to pay, which may assist the court in
making a factual determination regarding the noncustodial parent's
ability to pay the purge amount or comply with the purge conditions.
Finally, the IV-D agency must provide clear notice to the noncustodial
parent that ability to pay constitutes the critical question in the
civil contempt action.
We amended Sec. 303.6 to remove ``and'' at the end of paragraph
(c)(3) and redesignated paragraph (c)(4) as paragraph (c)(5). We made
significant revisions to the NPRM for the final rule based on comments.
As a result of comments, we revised the proposed new paragraph (c)(4)
to require that State IV-D agencies must establish guidelines for the
use of civil contempt citations in IV-D cases.
Based on these comments, we deleted the entire proposed paragraph
(c)(4) that would have required procedures that would ensure that
enforcement activity in civil contempt proceedings takes into
consideration the subsistence needs of the noncustodial parent, and
ensure 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. We also
[[Page 93497]]
deleted 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.
Instead we added that IV-D agency must provide the court with such
information regarding the noncustodial parent's ability to pay, which
may assist the court in making a factual determination regarding the
noncustodial parent's ability to pay the purge amount or comply with
the purge conditions. Finally, the IV-D agency must provide clear
notice to the noncustodial parent that ability to pay constitutes the
critical question in the civil contempt action. The Response to
Comments section for Civil Contempt Proceedings [Sec. 303.6(c)(4)]
provides further details on the reasons for these revisions.
Section 303.8--Review and Adjustment of Child Support Orders
We redesignated former Sec. 303.8(b)(2) through (5) as (b)(3)
through (6). A new paragraph (b)(2) allows the IV-D agency to elect in
its State plan the option to initiate the review of a child support
order, after learning that a noncustodial parent will be incarcerated
for more than 180 calendar days, without the need for a specific
request, and upon notice to both parents, review and, if appropriate,
adjust the order, in accordance with paragraph (b)(1)(i) of this
section. Based on comments, we revised the proposed regulatory language
``after being notified'' to ``after learning'' and increased the number
of days from 90 to 180 days. We also added the word ``calendar'' after
``180'' to distinguish between calendar and business days.
In addition, we redesignated former paragraph (b)(6) which requires
notice ``not less than once every three years,'' to paragraphs (b)(7)
and (b)(7)(i). We added a new paragraph (b)(7)(ii) that indicates if a
State has not elected to initiate review without the need for a
specific request under paragraph (b)(2) of this section, within 15
business days of when the IV-D agency learns that the noncustodial
parent will be incarcerated for more than 180 calendar days, the IV-D
agency must send a notice to both parents informing them of the right
to request a review and, if appropriate, adjust the order. The notice
must specify, at minimum, the place and manner in which the parents
must make the request for review.
Based on comments, we revised the proposed language in paragraph
(b)(2) to: Add that the IV-D agency must send the notice within 15
business days of learning that the noncustodial parent will be
incarcerated, add an incarceration timeframe of more than 180 calendar
days to be consistent with paragraph (b)(2); and replace the phrase
``upon request'' with ``if appropriate.'' We also revised the proposed
provision to use the phrase ``both parents'' instead of ``incarcerated
noncustodial parent and the custodial parent'' for consistency with
paragraphs (b)(7)(i) and (ii). In response to comments, we added a
sentence at the end of paragraph (b)(7)(ii), based on comments, that
recognizes existing comparable State law or rule that modifies child
support obligations upon incarceration of the noncustodial parent.
Based on comments, we added a sentence to paragraph (c) to address
incarceration as a significant change in circumstance when determining
the standard for adequate grounds for petitioning review and adjustment
of a child support order.
Finally, OCSE amends Sec. 303.8(d) to make conforming changes with
our revisions in Sec. 303.31 to remove a previous requirement that,
for purposes of review or adjustment of a child support order, a
child's eligibility for Medicaid could not be considered sufficient to
meet the child's health care needs. The final rule indicates that the
need to provide for the child's health care needs in an 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.
Section 303.11--Case Closure Criteria
Section 303.11(b) adds language 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 in paragraph (b) 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
criteria, the State must maintain supporting documentation for its
decision in the case record.
Paragraph (b)(1) indicates that a case may be closed when there is
no longer a current support order and arrearages are under $500 or
unenforceable under State law. New paragraph (b)(2) adds a case closure
criterion to permit a State to close a case where there is no current
support order and all arrearages are owed to the State.
Paragraph (b)(3) adds a criterion to allow the IV-D agency to close
an arrearages-only case against a noncustodial parent who is entering
or has entered long-term care placement, and whose children have
reached the age of majority if the noncustodial parent has no income or
assets available above the subsistence level that could be levied or
attached for support.
Paragraph (b)(4) permits closure of a case when the noncustodial
parent or alleged father is deceased and no further action, including a
levy against the estate, can be taken. Paragraph (b)(5) adds a
criterion to allow a State to close a case 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 has
determined that services either are not appropriate or are no longer
appropriate. We added ``or no longer appropriate'' to the proposed
language as a technical revision.
Paragraph (b)(6) indicates that a case may be closed when paternity
cannot be established because: (i) The child is at least 18 years old
and an action to establish paternity is barred by a statute of
limitations that meets the requirements of Sec. 302.70(a)(5) of this
chapter; (ii) a genetic test or a court or an 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 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. Minor technical changes were
made to this paragraph.
Paragraph (b)(7) allows case closure when 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: Over a 2-year
period when there is sufficient information to initiate an automated
locate effort; over a 6-month period when there is not sufficient
information to initiate an automated locate effort; or 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.
Paragraph (b)(8) states that case closure is permitted when a 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
[[Page 93498]]
evidence of support potential because the parent has been
institutionalized in a psychiatric facility, is incarcerated, or has a
medically-verified total and permanent disability. 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. Based on comments, we deleted from the NPRM ``or has had
multiple referrals for services by the State over a 5-year period which
have been unsuccessful.''
Section 303.11(b)(9) adds a new case closure criterion to permit a
State to close a case when a noncustodial parent's sole income is (i)
from Supplemental Security Income (SSI) payments, or (ii) from both SSI
payments and Social Security Disability Insurance (SSDI) benefits under
title II of the Act. In paragraph (b)(9)(ii), we added ``payments''
after ``SSI'' and, in response to comments, clarified that SSDI is the
Title II benefit. Also, in paragraph (b)(9)(iii), we deleted the phrase
``or other needs-based benefits'' because these benefits may have
limited duration and do not reflect a determination of an inability to
work. In the absence of a disability that impairs the ability to work,
the ability of the noncustodial parent to work and earn income may also
fluctuate with time. Thus, it is important for the child support
agencies to take efforts on these cases to remove the barriers to
nonpayment and build the capacity of the noncustodial parents to pay by
using tools such as referring noncustodial parents for employment
services provided by another State program or community-based
organization.
Paragraph (b)(10) allows case closure when 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
there is no Federal or State reciprocity with the country. The final
rule makes a technical change in this paragraph to clarify that
reciprocity with a country could be through either a Federal or State
treaty or reciprocal agreement. We added ``treaty or'' to the proposed
language as a technical change.
Paragraph (b)(11) permits case closure if the IV-D agency has
provided location-only services as requested under Sec. 302.35(c)(3)
of this chapter.
Paragraph (b)(12) indicates that a case may be closed where the
non-IV-A recipient of services requests closure 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. Paragraph (b)(13) adds
a criterion to allow the State to close a non-IV-A case after
completion of a paternity-only limited service under Sec. 302.33(a)(6)
without providing the notice in accordance with Sec. 303.11(d)(4).
Paragraph (b)(14) states that case closure is allowed if there has
been a finding by the IV-D agency, or at the option of the State, 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-E, SNAP, and Medicaid, which has determined
that support enforcement may not proceed without risk of harm to the
child or caretaker relative. We added ``IV-D agency, or at the option
of the State, by the'' as a technical change because this tracks the
language of the statute. In response to comments, we also added SNAP to
the list of assistance programs referenced in this paragraph.
Paragraph (b)(15) allows case closure 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, when 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.
Paragraph (b)(16) also permits closure when the IV-D agency
documents the circumstances of the recipient's noncooperation and an
action by the recipient is essential for the next step in providing IV-
D services 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.
Paragraphs (b)(17) through (b)(19) identify the case closure
criteria when the responding State IV-D agency may close a case.
Paragraph (b)(17) allows the responding agency to close a case when it
documents failure by the initiating agency to take an action that is
essential for the next step in providing services. We revised ``IV-D''
agency from the NPRM to ``responding'' agency to make the language more
consistent with paragraphs (b)(18) and (b)(19). We also made a small
editorial change for plain English to this paragraph.
Paragraph (b)(18) also allows the responding IV-D agency to close a
case when the initiating agency has notified the responding State that
the initiating State has closed its case under Sec. 303.7(c)(11).
Paragraph (b)(19) indicates that the responding State may close a
case if the initiating agency has notified the responding State that
its intergovernmental services are no longer needed.
Paragraph (b)(20) adds a new criterion to provide a State with
flexibility to close a case referred inappropriately by the IV-A, IV-E,
SNAP, and Medicaid programs. In response to comments, SNAP is added to
the list of referring agencies.
Paragraph (b)(21) adds a criterion to permit a State flexibility to
close a case if the State has transferred it to a Tribal IV-D agency,
regardless of whether there is a State assignment of arrears, based on
the following procedures. First, before transferring the case to a
Tribal IV-D agency and closing the State's case, either the recipient
of services requested the State to transfer its case and close the
State's case or the IV-D agency notified the recipient of its intent to
transfer the case to the Tribal IV-D agency and the recipient did not
respond to the notice within 60 calendar days of the date of the
notice. Next, the State IV-D agency completely and fully transferred
and closed the case. Third, the State IV-D agency notified the
recipient that the case has been transferred to the Tribal IV-D agency
and closed. Finally, paragraph (b)(21)(iv) indicates that if the Tribal
IV-D agency has a State-Tribal agreement approved by OCSE to transfer
and close case, this agreement must include a provision for obtaining
the consent from the recipient of services to transfer and close the
case.
Responding to comments, we added ``including a case with arrears
assigned to the State'' to the introductory sentence of paragraph
(b)(21). We also clarified that the case transfer process includes
transfer and closure. As a technical change, we added ``State'' before
IV-D agency throughout this paragraph to clarify which IV-D agency had
the responsibility. In response to comments, the rule added paragraph
(b)(21)(iv) related to allowing a permissible case transfer in
accordance with an OCSE-approved State-Tribal agreement that includes
consent from the recipient of services.
Paragraph (c) adds a criterion to require a State IV-D agency to
close a Medicaid reimbursement referral based solely upon health care
services provided through an Indian Health Service Program, including
through the Purchased/Referred Care program. Unlike the case closure
criteria under paragraph (b), which are permissive, the case closure
criterion under paragraph (c) is mandatory. In the final rule, we
[[Page 93499]]
replaced ``contract health services'' with ``the Purchased/Referred
Care program'' because the Indian Health Service (IHS) program was
formally renamed.
In this joint rule, we also amend 42 CFR 433.152(b)(1), consistent
with IHS policy, to require that State Medicaid agencies not refer
cases for medical support enforcement services when the Medicaid
referral is based solely upon health care services, including the
Purchased/Referred Care program, 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 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. The revision to 42 CFR 433.152(b)(1) also
eliminates reference to 45 CFR part 306, which was repealed in 1996.
In the final rule, paragraphs (d)(1) through (3) had minor
stylistic edits from the NPRM. Paragraph (d)(1) requires that a State
must notify the recipient of services in writing 60 calendar days prior
to closing a case of the State's intent to close the case meeting the
criteria in paragraphs (b)(1) through (10) and (b)(15) through (16) of
this section. Paragraph (d)(2) adds provisions that in an
intergovernmental case meeting the criteria for closure under paragraph
(b)(17), the responding State must notify the initiating agency 60
calendar days prior to closing the case of the State's intent to close
the case.
Paragraph (d)(3) states that 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), which
could lead to paternity or support being established or an order being
enforced, or, in the instance of paragraph (b)(15) of this section, if
contact is reestablished with the recipient of services.
Based on comments, we removed proposed paragraphs (d)(4) and (5)
regarding the notice requirements for inappropriate referrals under
paragraphs (b)(20) and (c).
Section 303.11(d)(4), which was proposed as (d)(6) in the NPRM,
requires that for a case to be closed in accordance with paragraph
(b)(13), 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. This paragraph also specifies the notice content and
lists steps the recipient must take if the recipient reapplies for
child support services. Responding to comments, we revised the proposed
language to require the notice prior to closure rather than after the
limited services case has been closed. We also removed references to
proposed paragraph (d)(5) and changed the number of days to 60 calendar
days from 30 calendar days.
Section 303.11(d)(5) permits a former recipient of services to re-
open a closed IV-D case by reapplying for IV-D services.
Finally, paragraph (e) requires a IV-D agency to retain all records
for cases closed for a minimum of 3 years.
Section 303.31--Securing and Enforcing Medical Support Obligations
In this final rule OCSE amends 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. In paragraph (a)(2), we clarify that health care coverage
includes public and private insurance.
In paragraph (a)(3), we delete the requirement that the cost of
health insurance be measured based on the marginal cost of adding the
child to the policy. Therefore, this 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 or administrative authority to include health care coverage
that is accessible to the parent and can be obtained for the child at a
reasonable cost. OCSE removes the limitation in paragraphs (b)(1) and
(2), (3)(i), and (4) restricting this to private health insurance to
allow a State to take advantage of both private and public health care
coverage 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. We also made an editorial change in paragraph
(b)(1)(ii).
Section 303.72--Requests for Collection of Past-Due Support by Federal
Tax Refund Offset
To be consistent with Department of Treasury regulations at 31 CFR
285.3(c)(6), the rule amends Sec. 303.72(d)(1) to require the
initiating State to notify other States only if it receives an offset
amount. This change amends the former Sec. 303.72(d)(1) by eliminating
the phrase, ``when it submits an interstate case for offset.''
Section 303.100--Procedures for Income Withholding
We are adding a new paragraph (h) in section 303.100(e) to require
use of the Office of Management and Budget (OMB) approved form to
implement withholding for all child support orders regardless of
whether the case is IV-D or non-IV-D. Section 303.100(e) clarifies that
``the required OMB-approved Income Withholding for Support form'' must
be used when sending notice to employers to initiate income withholding
for child support. Finally, the rule adds a new paragraph (i), which
explicitly states that income withholding payments on non-IV-D cases
must be directed through the State Disbursement Unit.
Section 304.20--Availability and Rate of Federal Financial
Participation
In the final rule, we are amending Sec. 304.20 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. We amend Sec. 304.20(a)(1) to clarify that
Federal financial participation (FFP) is available for expenditures for
child support services and activities that are necessary and reasonable
to carry out the State title IV-D plan. This change reflects 45 CFR
part 75, ``Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards,'' subpart E--Cost Principles,
which all State child support agencies must use in determining the
allowable costs of work performed under Federal grants.
In paragraph (b), we added the phrase ``including but not limited
to'' to make clear that FFP is available for, but not limited to, the
activities listed in the regulation, consistent with OMB cost
principles that allow for expenditures that are necessary and
reasonable and can be attributed to the child support enforcement
program.
Paragraphs (b)(1)(viii) and (ix) address the establishment of
agreements with other agencies administering the titles IV-D, IV-E, XIX
(Medicaid), and XXI (Children's Health Insurance Program (CHIP))
programs, to recognize activities related to cross-program
coordination, client referrals, and data sharing when authorized by
law. The provisions also include minor technical changes and specify
the criteria States may include in these agreements. In paragraphs
(b)(1)(viii)(A) and (b)(1)(ix)(A), we are adding ``and from'' before
IV-D agency to provide States more flexibility to refer a case to and
from the IV-D agency
[[Page 93500]]
when working with these Federal programs.
For agreements with IV-A and IV-E agencies under paragraph
(b)(1)(viii), we added paragraphs (b)(1)(viii)(D) and (E) to the list
of criteria to include procedures to coordinate services and agreements
to exchange data as authorized by law, respectively. The rule also adds
these two new criteria under paragraph (b)(1)(ix) for agreements with
State agencies administering Medicaid or CHIP programs as paragraphs
(b)(1)(ix)(B) and (C).
In response to comments, under paragraph (b)(1)(ix), we added
``appropriate'' before criteria to provide States greater flexibility
in which criteria or activities to include in their agreements with
Medicaid or CHIP agencies. Also based on comments, we retained the
provision regarding the transfer of assigned medical support
collections to the Medicaid agency now at paragraph (b)(1)(ix)(D), and
formerly at paragraph (b)(1)(ix)(C).
Section 304.20(b)(2) clarifies that FFP is available for services
and activities for the establishment of paternity including, but not
limited to the specific activities listed in paragraph (b)(2). The rule
adds educational and outreach activities to Sec. 304.20(b)(2)(vii) to
explain that FFP is available for IV-D agencies to educate the public
and to develop and disseminate information on voluntary paternity
establishment.
In accordance with the requirement in section 454(23) of the Act to
regularly and frequently publicize the availability of child support
enforcement services, including voluntary paternity services, paragraph
(b)(3) clarifies that FFP is available for services and activities for
the establishment and enforcement of support obligations including, but
not limited to the specific activities listed in paragraph (b)(3). The
rule adds allowable services and activities under paragraph (b)(3)
related to the establishment and enforcement of support obligations. A
new paragraph (b)(3)(v) allows 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. We redesignated the former Sec. 304.20(b)(3)(v) as Sec.
304.20(b)(3)(vii).
In addition, new paragraph (b)(3)(vi) recognizes that FFP is
available to increase pro se access to adjudicative and alternative
dispute resolution processes in IV-D cases related to the provision of
child support services. We added a clarification in the final rule that
this paragraph only applies when the expenses are related to the
provision of child support services.
In response to comments, we deleted the proposed paragraph
(b)(3)(vii), which would have specifically allowed States to claim FFP
for ``de minimis'' costs for including parenting time provisions in
child support orders. (For further details, see Comment/Response 9 in
Sec. 304.20.)
We also made minor editorial changes in paragraph (b)(5)(v) by
deleting ``;'' and adding ``.'' at the end of the paragraph, and in
paragraphs (b)(9) and proposed (b)(11) by deleting ``; and'' and adding
``.'' at the end of the sentence.
Finally, we added 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.
Section 304.23--Expenditures for Which Federal Financial Participation
Is Not Available
Section 304.23(a) through (c) of the rule indicates that 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; and (c) construction and major
renovations.
For Sec. 304.23(d), we added ``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 except direct costs of short-term training provided to IV-D
agency staff in accordance with Sec. 304.20(b)(2)(vii) and Sec.
304.21. This provision does not apply to other types of education and
training activities (such as those provided to parents that are
addressed in other rules) in this part. We also made a minor editorial
change from the proposed language.
The final rule also clarifies that FFP is not available for any
expenditures which have been reimbursed by fees collected as required
by this chapter (Sec. 304.23(e)); any costs of those caseworkers
described in Sec. 303.20(e) of this chapter (Sec. 304.23(f)); any
expenditures made to carry out an agreement under Sec. 303.15 of this
chapter (Sec. 304.23(g)); and the costs of counsel for indigent
defendants in IV-D actions (Sec. 304.23(h)).
Paragraph (i) indicates that FFP is prohibited for any expenditures
for the jailing of parents in child support enforcement cases. In the
NPRM, OCSE inadvertently removed this restriction; however, we are
correcting this error in the final rule. As a result, proposed
paragraph (i), which addresses that costs of guardians ad litem are
prohibited in IV-D actions, was redesignated as paragraph (j).
Section 307.11--Functional Requirements for Computerized Support
Enforcement Systems in Operation by October 1, 2000
In the final rule, we amend Sec. 307.11(c)(3)(i) to include
provisions requiring States to build automatic processes designed to
preclude garnishing financial accounts of noncustodial parents who are
recipients of Supplemental Security Income (SSI) payments or
individuals concurrently receiving both SSI and Social Security
Disability Insurance (SSDI) benefits under title II of the Act. We also
amended Sec. 307.11(c)(3)(ii) to provide that funds must be returned
to a noncustodial parent's financial account, within 5 business days
after the agency determines that SSI payments or concurrent SSI
payments and SSDI benefits under title II of the Act, have been
inappropriately garnished. Responding to comments, we increased the
timeframe from 2 days in the NPRM to 5 business days.
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)
In this final rule, the revisions remove barriers to using
electronic communication and document management. Throughout the
regulation, where appropriate, we removed the words ``written'' and
``in writing'' and insert ``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 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'' used in this final regulation is taken
from the Uniform Interstate Family Support Act (UIFSA) 2008, section
102(20). The
[[Page 93501]]
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.\3\
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\3\ See comments to the Uniform Electronic Transactions Act
(1999), section 2, Definitions, available at: http://www.uniformlaws.org/Act.aspx?title=Electronic%20Transactions%20Act
(quoting ABA Report on Use of the Term ``Record,'' October 1, 1996).
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 are not removing requirements that the
information is provided in a written, paper format [i.e., pre-offset
notices to obligors for Federal tax refund offset (Sec. 303.72(e)(1)].
In addition, we are not changing regulatory language where written
formats are required by statute.
Section 301.1--General Definitions
This final rule amends the definition of ``Procedures'' in Sec.
301.1 by changing the phrase ``written set of instructions'' to
``instructions in a record.'' This will allow instructions set forth
under the State's child support plan to be made in an electronic form
that is retrievable and perceivable within the meaning of the Uniform
Electronic Transactions Act, and is not limited to a written format.
In addition, we are inserting the definition for the term
``record'' in this section. The use of the term ``record'' is broader
than the term ``written'' and encompasses different ways of storing
information, including, for example, in a written or an electronic
document.
Section 301.13--Approval of State Plans and Amendments
In the first sentence of the introductory paragraph of Sec.
301.13, we replace 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 a new State child support plan or plan
amendment(s) electronically, it must ensure electronic signature(s)
accompany the document(s).
In paragraphs (e) and (f) of this section, ``Prompt approval of the
State plan'' and ``Prompt approval of plan amendments,'' respectively,
we change 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
amendment(s) in an electronic record format. In addition, we are making
a technical change to paragraph (f) to change ``Regional Commissioner''
to ``Regional Office'' for consistency with other references to the
``Regional Office'' in this section.
Section 302.33--Services to Individuals Not Receiving Title IV-A
Assistance
In Sec. 302.33(d)(2), we change the phrase ``written methodology''
to ``methodology, which is reflected in a record.'' This change will
afford a State record-keeping flexibility in maintaining the
methodology developed for recovering standardized costs.
Section 302.34--Cooperative Arrangements
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. The rule edits 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 maintained in a manner that is not 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.
Section 302.50--Assignment of Rights to Support
In this final rule, we replace the word ``writing'' with the term
``a record'' in Sec. 302.50(b)(2) so the State has greater flexibility
in determining the format of the obligation amount, when there is no
court or administrative order, and such amount is based on other legal
process established under State law in accordance with State guidelines
procedures.
Section 302.65--Withholding of Unemployment Compensation
This rule amends Sec. 302.65(b) by changing the phrase ``a written
agreement'' to ``an agreement, which is reflected in a record.''
Additionally, in paragraph (c)(3), we replaced the words ``written
criteria'' with ``criteria, which are reflected in a record.'' These
changes will establish that the agreements States develop with State
workforce agencies (SWAs) and the criteria for selecting cases in which
to pursue withholding of 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.
Section 302.70--Required State Laws
Section 302.70(a)(5) describes the procedures for paternity
establishment. In the final rule, paragraph (a)(5)(v) discusses
requirements for objecting to genetic testing results and states that
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. We are changing the phrase ``a written report of the test
results'' to ``a report of the test results, which is reflected in a
record'' to provide greater flexibility and efficiency in admitting
evidence of paternity. Please note that in this same paragraph, we are
not eliminating the phrase ``in writing'' in the requirement regarding
the notice to parents about the consequences of acknowledging
paternity, paragraph (a)(5)(iii), and 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, paragraph (a)(5)(v). In these instances,
the phrase ``in writing'' is statutorily prescribed, according to
[[Page 93502]]
sections 466(a)(5)(C)(i) and 466(a)(5)(F)(ii) of the Act, respectively.
Section 302.85--Mandatory Computerized Support Enforcement System
This section describes the basis for OCSE to grant State waivers in
regard to the mandatory computerized support enforcement system.
Section 302.85(b)(2)(ii) requires the State to provide assurances,
which are reflected in a record, that steps will be taken to otherwise
improve the State's IV-D program. This change provides a State the
option of communicating with OCSE electronically, rather than only in
writing, when providing the required assurances under this provision.
Section 303.2--Establishment of Cases and Maintenance of Case Records
In this rule, Sec. 303.2(a)(2), requires the State IV-D agency to
send an application to an individual within no more than 5 working days
of a request received by telephone or in a record. We are replacing the
phrase ``a written or telephone request'' with ``a request received 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 message. In response to
comments, we also changed the word ``made'' to ``received'' to clarify
when the 5 working day timeframe begins.
Under paragraph (a)(3), the rule changes the requirements for
applications for IV-D services, to define an application as a record
provided by the State which is signed, electronically or otherwise, by
the individual applying for IV-D services. We are lifting the
restriction that applications only be in a written or paper format, as
well as allowing for electronic signature, by inserting the phrase
``electronically or otherwise'' after the word ``signature.'' The
acceptance of electronic signature is in accordance with PIQ 09-02,\4\
which allows States to use electronic signatures on applications, as
long as it is allowable under State law. 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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\4\ PIQ-09-02 is available at: http://www.acf.hhs.gov/programs/css/resource/use-of-electronic-signatures-on-applications-for-iv-d-services.
---------------------------------------------------------------------------
Section 303.5--Establishment of Paternity
Section 303.5(g)(6) requires the State to provide training,
guidance, and instructions, which are reflected in a record, regarding
voluntary acknowledgment of paternity to hospitals, birth record
agencies, and other entities that participate in the State's voluntary
acknowledgment program. The rule changes the phrase ``written
instructions'' to ``instructions, which are reflected in a record'' to
allow a State the flexibility to provide program instructions in
electronic formats, in addition to, or in place of, written
instructions.
Section 303.11--Case Closure Criteria
Paragraph (d) describes the requirements for case closure
notification and case reopening. Paragraph (d)(1) indicates that for
cases meeting the case closure requirements in paragraphs (b)(1)
through (10) and (b)(15) and (16) of this section, the State must
notify service recipients in writing 60 calendar days prior to closure
of the cases of the State's intent to close a case.
In order to allow for greater efficiency and flexibility, paragraph
(d)(2) allows electronic notification in the instance of
intergovernmental IV-D case closure when the responding agency is
communicating with the initiating agency.
Paragraph (b)(4) states that for cases to be closed in accordance
with paragraph (b)(13), 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. In response to comments, we added
the phrase ``in writing'' to clarify how the notices should be sent to
the recipient.
We are not changing the State's ``written'' notification
requirements to the recipients of services because of our general
approach not to remove requirements to provide formal notices for all
applicants and recipients of services in writing. However, as discussed
in response to comments under Sec. 303.11, Case Closure Criteria
section in Topic I of this rule, we added paragraph (d)(6) for notices
required under paragraphs (d)(1) and (4), if the recipient of services
specifically authorizes consent for electronic notifications, the IV-D
agency may elect to notify the recipient of services electronically of
the State's intent to close the case. The IV-D agency is required to
maintain documentation of the recipient's consent in the case record.
Section 303.31--Securing and Enforcing Medical Support Obligations
We amend 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.
Section 304.21--Federal Financial Participation in the Costs of
Cooperative Arrangements With Courts and Law Enforcement Officials
This rule amends paragraph (a) of Sec. 304.21 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.
Section 304.40--Repayment of Federal Funds by Installments
Section 304.40(a)(2) requires a State to notify the OCSE Regional
Office in a record of its intent to make installment repayments. We are
changing the phrase ``in writing'' to ``in a record'' to give a State
the option of notifying the Regional Office electronically of its
intent to repay Federal funds in installments.
Section 305.64--Audit Procedures and State Comments
In Sec. 305.64(c), we removed the phrase ``by certified mail''
from the second sentence of this paragraph since OCSE currently sends
these reports electronically and by overnight mail. In this same
paragraph, we change ``written comments'' to ``comments, which are
reflected in a record,'' allowing IV-D agencies to submit comments on
an interim audit report in an electronic format, if appropriate.
Section 305.66--Notice, Corrective Action Year, and Imposition of
Penalty
Paragraph Sec. 305.66(a) replaces ``in writing'' with ``in a
record'' so that OCSE can notify the State that it is subject to a
penalty in an electronic format, not just in a written format.
Section 307.5--Mandatory Computerized Support Enforcement Systems
The rule amends paragraph (c)(3) of Sec. 307.5 by changing
``written assurance'' to ``assurance, which is reflected in a record,''
so that a State can provide assurance in an electronic format, if it so
chooses.
[[Page 93503]]
Topic 3: Technical Corrections (Sec. Sec. 301.15; 302.14; 302.15;
302.32; 302.34; 302.65; 302.70; 302.85; 303.3; 303.7; 303.11; 304.10;
304.12; 304.20; 304.21; 304.23; 304.25; 304.26; 305.35; 305.36; 305.63;
308.2; 309.85; 309.115; 309.130; 309.145; and 309.160)
We made a number of technical corrections that update, clarify,
revise, or delete former regulations to ensure that the child support
enforcement regulations are accurate, aligned, and up-to-date. In the
NPRM, we proposed to update or replace obsolete references to
administrative regulations by replacing 45 CFR part 74 with 45 CFR part
92 throughout the child support regulations. However, an Interim Final
Rule effective December 26, 2014 (79 FR 75871),\5\ issued jointly by
OMB, HHS, and a number of Federal agencies, implements for all Federal
award-making agencies the final guidance ``Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal
Awards'' (Uniform Guidance) published by the Office of Management and
Budget (OMB) on December 26, 2013. The Interim Final Rule is necessary
in order to incorporate the Uniform Guidance into regulation at 45 CFR
75 and thus bring into effect the Uniform Guidance as required by OMB.
The Uniform Guidance in part 75 supersedes and streamlines requirements
from several OMB circulars, including OMB Circulars A-87 and A-133 and
applies to all HHS grantees, including State and Tribal child support
programs funded under title IV-D of the Act.
---------------------------------------------------------------------------
\5\ The Uniform Guidance interim final rule is available at:
http://www.gpo.gov/fdsys/pkg/FR-2014-12-19/pdf/2014-28697.pdf.
---------------------------------------------------------------------------
Additionally, HHS issued an Interim Final Rule, effective January
20, 2016 (81 FR 3004),\6\ that contains technical amendments to HHS
regulations regarding the Uniform Guidance. The regulatory content
updates cross-references within HHS regulations to replace part 74 with
part 75.
---------------------------------------------------------------------------
\6\ The Uniform Guidance HHS technical corrections are available
at: https://www.gpo.gov/fdsys/pkg/FR-2016-01-20/pdf/2015-32101.pdf.
---------------------------------------------------------------------------
Therefore, it is no longer necessary to make the proposed revisions
and we will delete these proposed revisions in the final rule, except
as otherwise noted.
Section 301.15--Grants
This rule renames paragraph (a) as Financial reporting forms and
deletes paragraph (a)(3). We are replacing paragraph (a)(1) Time and
place and paragraph (a)(2) Description of forms with the title and
description of Form OCSE-396 and Form OCSE-34, respectively. In
response to comments, we eliminated the ``A'' from the forms OCSE-396A
and Form OCSE-34A to reflect the current title of these forms.
We are also renaming paragraph (b) Review as Submission, review,
and approval and adding under paragraph (b) the following paragraphs:
(b)(1) Manner of submission; (b)(2) Schedule of submission; and (b)(3)
Review and approval. To provide a State more time to submit its
financial reports, we are modifying the Schedule of submission
paragraph to require the financial forms be submitted no later than 45
days following the end of each fiscal quarter. Further revisions in
this paragraph reflect the current operating procedures and processes
that are currently in place.
Additionally, we are revising paragraph (c) Grant award by deleting
its former language and replacing it with three paragraphs (c)(1) Award
documents; (c)(2) Award calculation; and (c)(3) Access to funds.
Finally, we are also deleting paragraphs (d) Letter of credit
payment system and redesignating paragraph (e) General administrative
requirements as paragraph (d) and revising this paragraph to add a
reference to part 95 of this title, establishing general administrative
requirements for grant programs, moving ``with the following
exceptions'' to the end of the paragraph, and adding paragraph levels:
(1) 45 CFR 75.306, Cost sharing or matching; and (2) 45 CFR 75.341,
Financial reporting.
In the NPRM, we had incorrectly added reference to parts 74 and 95
as exceptions. In this rule, we are correcting this paragraph by adding
the reference to part 95 in paragraph (d) and indicating that this part
establishes general administrative requirements for grants. We also
moved the phrase ``with the following exceptions'' to the end of the
paragraph to make it easier to understand.
In paragraph (d), as discussed in the introductory paragraph of
Topic 3 in this section, the rule deletes the proposed revision in the
NPRM to reference part 92. However, we are updating the Interim Final
Rule technical corrections discussed in the introductory paragraph of
Topic 3 to add paragraph levels for the regulatory cites that are
excluded. Specifically, we added ``(1)'' before 45 CFR 75.306, and
added ``,'' before the title, Cost sharing or matching and added
``(2)'' before 45 CFR 75.341 and added ``,'' before the title,
Financial reporting.
Section 302.14--Fiscal Policies and Accountability
As discussed in the introductory paragraph of Topic 3 in this
section, we are deleting our proposed revision in the NPRM related to
updating the reference to part 74 since this has been corrected.
However, we are updating the reference in Sec. 302.14 from 45 CFR 75
to 45 CFR 75.361 through 75.370 to specifically address the retention
and custodial requirements for the fiscal records.
Section 302.15--Reports and Maintenance of Records
For clarity, we are redesignating the undesignated concluding
paragraph of this section as Sec. 302.15(a)(8). In paragraph (a)(8),
as discussed in the introductory paragraph of Topic 3 in this section,
we are deleting our proposed revision in the NPRM related to updating
the reference to part 74 since this has been corrected. However, we are
updating the reference in paragraph (8) from 45 CFR 75 to 45 CFR 75.361
through 45 CFR 75.370 to specifically address the retention and
custodial requirements of the records.
Section 302.32--Collection and Disbursement of Support Payments by the
IV-D Agency
In this final rule, we remove the outdated timeframes in the
introductory paragraph. We also revise paragraph (b) to replace ``State
Disbursement Unit (SDU)'' with ``SDU'' because the term was defined in
paragraph (a). In response to comments, we replaced ``interstate'' with
``intergovernmental'' and ``initiating State'' with ``initiating
agency.'' Finally, we 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
In the final rule we are clarifying that the term law enforcement
officials includes ``district attorneys, attorneys general, and similar
public attorneys and prosecutors,'' and adding ``corrections
officials'' to the list of entities with which a State may enter into
agreements for cooperative arrangements.
Section 302.65-- Withholding of Unemployment Compensation
We 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.
[[Page 93504]]
Section 302.70--Required State Laws
We are making a technical correction in paragraph (a)(8) by
revising the cross-reference to Sec. 303.100(g).
Section 302.85--Mandatory Computerized Support Enforcement System
We are making a technical correction in paragraph (a)(1) by
removing an out-of-date address. To be more user-friendly, we are
indicating that the guide is available on the OCSE Web site.
Section 303.3--Location of Noncustodial Parents in IV-D Cases
In paragraph (b)(5), we are replacing the term ``State employment
security'' with ``State workforce'' for consistency with revisions made
elsewhere in the final rule.
Section 303.7--Provision of Services in Intergovernmental IV-D Cases
Under this rule, as discussed under Topic 1, we renumber paragraphs
in Sec. 303.11 and update the cross references in paragraph (d)(10).
Additionally, we 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). This provision was added in the
final rule related to the Deficit Reduction Act of 2005 (73 FR 74898,
dated December 9, 2008), but it had been inadvertently omitted in the
final intergovernmental child support regulation, published in the
Federal Register on July 2, 2010 and effective on January 3, 2011.
Finally, we are making a conforming technical change to add Sec.
302.38 to the list of regulatory sections cited related to the
initiating State IV-D responsibilities to distribute and disburse any
support collections received. This technical change was not proposed in
the NPRM, but was recommended by a commenter.
Section 303.11--Case Closure
We are making several technical changes to Sec. 303.11, in
addition to the numerous changes discussed under topics 1 and 2 of the
final rule. In redesignated paragraphs (b)(4) and (b)(6)(ii), formerly
paragraphs (b)(2) and (b)(3)(ii), respectively, we replace the outdated
term ``putative father'' with the term ``alleged father.'' We also
remove the word ``or'' at the end of the sentence in paragraph
(b)(6)(ii) and add the word ``or'' to the end of the new paragraph
(b)(6)(iii). Finally, in paragraph (e) we are updating our reference to
45 CFR 75.361.
As discussed earlier in the introductory paragraph of Topic 3 in
this section, we are deleting our proposed revision in the NPRM related
to updating the reference to part 74 since this has been corrected.
However, we are updating the reference in paragraph (e) from 45 CFR 75
to 45 CFR 75.361 to specifically address the 3-year retention
requirements for records.
Section 304.10--General Administrative Requirements
We are adding after 45 CFR 75.306 ``, Cost sharing or matching''
and after 45 CFR 75.341 ``, Financial reporting''.
As discussed earlier in the introductory paragraph of Topic 3 in
this section, we are deleting our proposed revision in the NPRM related
to updating the reference to part 74 since this has been corrected.
However, we are adding the titles for clarity for 45 CFR 75.306 through
75.341.
Section 304.12--Incentive Payments
In the final rule, we delete outdated paragraphs 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
In Sec. 304.20(b)(1)(iii), we revised the language to allow FFP
for 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. Additionally, we deleted paragraphs (c) and (d), which apply
to fiscal years 1997 and 1998.
As discussed in the introductory paragraph of Topic 3 in this
section, we are deleting our proposed revision in the NPRM related to
updating the reference to part 74 since this has been corrected.
Section 304.21--Federal Financial Participation in the Costs of
Cooperative Arrangements With Courts and Law Enforcement Officials
We are clarifying 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
modified this section to include a reference to Sec. 304.20(b)(11),
regarding medical support activities.
In response to comments, we further revised Sec. 304.21(a)(1) to
cross reference Sec. 304.20(b)(12) which allows FFP for education and
outreach activities provided by the courts and law enforcement
officials through cooperative agreements.
Section 304.23--Expenditures for Which Federal Financial Participation
Is Not Available
Section 304.23(a) lists various programs for which FFP is not
available for administering these programs. We add the following Social
Security Act programs to the list: Title IV-B, the Child Welfare
Program; Title IV-E, the Foster Care Program; and Title XXI, the
Children's Health Insurance Program (CHIP). We also add SNAP, which is
administered under 7 U.S.C. Chapter 51.
In addition, we delete Sec. 304.23(g) of the former rule because
it is outdated. Paragraph (h) is redesignated as (g).
Section 304.25--Treatment of Expenditures; Due Date
In Sec. 304.25(b), we lengthen the timeframe from 30 to 45 days
after the end of the quarter for States to submit quarterly statements
of expenditures under Sec. 301.15.
As discussed in the introductory paragraph of Topic 3 in this
section, we are deleting our proposed revision in the NPRM related to
updating the reference to part 74 since this has been corrected.
Section 304.26--Determination of Federal Share of Collections
In this rule, Sec. 304.26(a)(1) clarifies that the Federal medical
assistance percentage rate is 75 percent for the distribution of
retained IV-A collection. This paragraph also adds that the Federal
medical assistance percentage rate is 55 percent for the distribution
of retained IV-E Foster Care Program collections for Puerto Rico, the
Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa
and 70 percent of retained IV-E collections for the District of
Columbia. We also delete paragraphs (b) and (c) of the former rule
related to incentive and hold harmless payments to be made from the
Federal share of collections because this requirement is outdated.
Section 305.35--Reinvestment
Section 305.35 requires State IV-D agencies to reinvest the amount
of Federal incentive payments received into their child support
programs. We are making several technical changes to this section.
To clarify the potential consequences of a State not maintaining
the baseline expenditure level, we are amending paragraph (d) by adding
a sentence to
[[Page 93505]]
the end of the paragraph to read: ``Non-compliance will result in
disallowances of incentive amounts equal to the amount of funds
supplanted.''
We redesignated paragraph (e) as paragraph (f) and added a new
paragraph (e) to clarify how the State Current Spending Level should be
calculated. Using the Form OCSE-396, ``Child Support Enforcement
Program Financial 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.
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-396, 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-396, 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 on the Form OCSE-396 for all four quarters of the fiscal
year. Using the Form OCSE-396, 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 305.36--Incentive Phase-In
While we did not propose changes to this section in the NPRM, in
response to comments, we deleted this section in the final rule since
it is outdated.
Section 305.63--Standards for Determining Substantial Compliance with
IV-D Requirements
Section 305.63(d) erroneously cross references paragraph (b). We
replace that cross reference with a reference to paragraph (c).
Section 308.2--Required Program Compliance Criteria
The term ``State employment security agency'' is removed wherever
it appeared and is replaced by ``State workforce agency.'' In addition,
in subparagraph (c)(3)(i), we capitalize Department of Motor Vehicles
and use 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?
As discussed in the introductory paragraph of Topic 3 in this
section, we are deleting our proposed revision in the NPRM related to
updating the reference to part 74 since this has been corrected.
Section 309.115--What procedures governing the distribution of child
support must a Tribe or Tribal organization include in a Tribal IV-D
Plan?
We are making two technical changes, not originally proposed in the
NPRM, by fixing the reference in paragraph (b)(2) from ``Sec. 9.120''
to ``Sec. 309.120'' and in paragraph (c)(2) from ``303.52'' to
``302.52.''
Section 309.130--How will Tribal IV-D programs be funded and what forms
are required?
We update Sec. 309.130(b)(3) to reference Standard Form (SF) 425,
``Federal Financial Report,'' which is the new OMB approved form. In
response to comments, in paragraph (b)(4), we eliminated the ``A'' from
Form OCSE-34A to reflect the current title of the form. Additionally,
in paragraph (b)(4), to be consistent with revision to Sec.
301.15(b)(2), we revise the submission requirements for the OCSE-34,
``Quarterly Report of Collections,'' including extending the due date
from 30 to 45 days from the end of the fiscal quarter.
In paragraphs (d)(3) and (h), as discussed in the introductory
paragraph of Topic 3 in this section, we are deleting our proposed
revision in the NPRM related to updating the reference to part 74 since
this has been corrected.
Section 309.145--What costs are allowable for Tribal IV-D programs
carried out under 309.65(a) of this part?
As discussed in the introductory paragraph of Topic 3 in this
section, we are deleting our proposed revision in the NPRM related to
updating the reference to part 74 since this has been corrected.
However, because this paragraph addresses the Procurement Standards,
for clarity we are updating our reference from 45 CFR 75 to specify 45
CFR 75.326 through 75.340.
Section 309.160--How will OCSE determine if Tribal IV-D program funds
are appropriately expended?
As discussed in the introductory paragraph of Topic 3 in this
section, we are deleting our proposed revision in the NPRM related to
updating the reference to part 74 since this has been corrected.
However, we are updating the reference to the audit requirements by
adding ``, Subpart F--Audit Requirements under'' after 45 CFR part 75.
IV. Response to Comments
We received 2,077 sets of comments from States, Tribes, and other
interested individuals. We posted 2,017 sets of comments on
www.regulations.gov; 60 sets of comments were not posted because they
were either not related to the NPRM or contained personally
identifiable information.
Using a text analytic software technology, we were able to detect
duplicate and near duplicate documents. Of the 2,077 set of comments,
we identified 1,679 sets of comments that were received from either
mass-mail campaigns (when commenters provided the same or similar
responses from the members of the same organization) or were duplicate
responses (when the same commenter submitted the same response more
than once).
The comments we received were from the following groups:
34 State child support agencies;
10 Tribes or Tribal organizations
9 National or State child support organizations;
6 judicial district offices;
5 counties/local child support offices;
2 judicial organizations;
2 prosecuting attorney office or organization;
50 organizations such as community-based, fatherhood,
research, domestic violence, access to justice, parent, re-entry, court
reform, and employment services organizations; and
Remaining comments from private citizens representing
custodial and
[[Page 93506]]
noncustodial parents, former child support workers, attorneys, a
retired judge, etc.
Although we had a range of comments on specific provisions, the
NPRM was strongly supported by State agencies, court associations,
advocacy groups, parent groups, and researchers, and reflected broad
consensus in the field. In drafting the final rule, we closely reviewed
the comments and made a number of adjustments to the final rule in
response to comments.
DATES:
1. Comment: While many commenters appreciated OCSE's suggestion
that the proposed effective date for Guidelines for setting child
support awards (Sec. 302.56) coincides with the next quadrennial
review, States whose quadrennial review will commence shortly after the
rule is finalized will need time to conduct further analysis and
research on implementation issues and potential system changes. They
recommended an additional extension of one year. In other words, the
guideline changes would be required to be in effect within one year
after completion of the first quadrennial review of its guidelines that
commences more than one year after the adoption of the final rule.
Response: We agree with this suggestion and have made this change
in the compliance date for Sec. 302.56.
2. Comment: Some commenters expressed concerns regarding the length
of time needed to implement the revisions in the final rule. A few
commenters thought that one year would be adequate, while others
believed that a 2-year effective date would be more reasonable period
because of the significant changes in State law and policy, as well as
numerous system changes will be needed. A few commenters believed that
more than 2 years would be necessary to implement some of the
revisions.
Response: While we understand the complexity of implementing
several of the revisions in the final rule, there are some revisions
that can be implemented immediately upon issuance of this final rule.
Also, many of the revisions are optional requirements, so the
compliance dates can vary State by State as the child support agencies
elects to implement the optional rules, or allow Federal financial
participation (FFP) for additional allowable expenditures. As a result,
we are varying the compliance dates for the various Federal
requirements. Generally, the compliance date for the final rule will be
within 60 days after publication. However, if State law revisions are
needed, the compliance date will be 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
final rule.
In response to comments, the final rule also revises the effective
date for Establishment of support obligations (Sec. 303.4) and Review
and adjustment of support order (Sec. 303.8) to allow States adequate
time to incorporate the new rule requirements into the State's
guidelines and order enforcement and modification procedures. For
implementing the revisions under Sec. 302.56(a) through (g), Sec.
303.4, and Sec. 303.8, the compliance date will be one year after
completion of the first quadrennial review of its guidelines that
commences more than one year after the adoption of the final rule.
3. Comment: A few commenters thought they would need more than one
year to implement the Case Closure (Sec. 303.11) because they need
time to make legislative changes, substantial programming enhancements,
and policy changes.
Response: Because many of the changes for Case Closure are optional
requirements, we have made the compliance date 60 days after enactment
of the final rule. For the mandatory changes required under Sec.
303.11(c) and (d), we have extended the compliance date for these
provisions to be one year from date of issuance of the final rule.
However, if State law changes are needed, then the compliance date will
be 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 final rule.
4. Comment: Several commenters requested that if States will no
longer be held harmless from complying with the 2008 medical support
final rules upon issuance of the final rule, the effective date for
Sec. 303.31 should take this into consideration.
Response: For the medical support provisions under Sec. 303.31,
the compliance date for the new Sec. 303.31 provisions will be 60 days
from the date of the final rule unless statutory changes are required.
If State law revisions are needed, the compliance date is 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. We believe that this is sufficient
time for the States to implement the new revisions in Sec. 303.31.
Upon issuance of this rule, OCSE will work with States in developing
guidance related to the new rule requirements and AT-10-02.
Topic 1: Procedures To Promote Program Flexibility, Efficiency, and
Modernization (Sec. Sec. 302.32; 302.33; 302.38; 302.56; 302.70;
303.3; 303.4; 303.6; 303.8; 303.11 (Including Revisions to 42 CFR
433.152); 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
1. Comment: A few commenters suggested that the ongoing issues and
concerns raised by employers should be addressed through guidance and
outreach to specific States rather than a proposed regulation, given
that only a few States are noncompliant. Another commenter suggested
that States and OCSE make additional efforts to educate parents, family
law lawyers, and judges about the State Disbursement Unit (SDU) law.
Response: Although this requirement has been a Federal law for
almost two decades, issues persist. OCSE's Employer Services team has
provided extensive technical assistance related to persistent
noncompliance issues. Additionally, OCSE regularly holds employer
symposia to bring together child support professionals and employers to
identify issues of mutual concerns and work on ways to resolve these
issues. In addition to providing continued outreach, technical
assistance, and policy guidance to all stakeholders, we find it is
necessary to regulate this requirement.
2. Comment: One commenter suggested that SDUs be required to
continue processing spousal support payments after their associated
child support payments are released. The commenter indicated that under
current practice, spousal payments are paid through the SDU when they
are included with child support payments. Once the child support
payment ends, the SDU ceases processing the spousal support payments.
Having the SDU continue to process such spousal payments will ensure
that there is no disruption in payments to the custodial parent.
Another commenter requested that the final rule clarify that an Income
Withholding Order (IWO) and/or payment through the SDU for maintenance-
only cases is not allowed.
Response: In accordance with PIQ-11-01,\7\ if the child support
portion of a support order that includes spousal
[[Page 93507]]
support ends, the IV-D case may continue to qualify for collection
services at State option. If a State chooses to continue IV-D
collection services for the spousal support portion of the support
order, it may continue to collect spousal support through the income
withholding process with receipt and disbursement of support
collections through the SDU. However, we want to clarify that FFP for
enforcement of spousal support-only cases beyond collection and
disbursement of payments is not eligible for FFP under title IV-D.
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\7\ PIQ-11-01 is available at: http://www.acf.hhs.gov/programs/css/resource/spousal-support-only-cases.
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Additionally, in accordance with Sec. 303.72(a)(3)(i), past-due
spousal support is only eligible for Federal tax refund offset in cases
where the parent is living with the child and the spousal support and
child support obligations are included in the same support order. OCSE
Action Transmittal (AT) 10-04 \8\ also indicates that past-due spousal
support-only cases certified for any of the Federal collection and
enforcement programs (i.e., Federal tax refund and administrative
offset, passport denial, multistate financial institution data match,
and insurance match) are only eligible when the parent is living with
the child.
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\8\ AT-10-04 is available at: http://www.acf.hhs.gov/programs/css/resource/collection-and-enforcement-of-past-due-child-support-obligations.
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For reporting purposes on the OCSE-157, Child Support Enforcement
Annual Data Report, once the child is emancipated or otherwise no
longer involved, the State has the option of whether or not to continue
to collect spousal support through the income withholding process with
receipt and disbursement of support collections for these spousal
support only cases. States that opt to continue to collect spousal
support through income withholding must report the income withholding
collections received and disbursed on these spousal support-only cases
for all lines that apply.
3. Comment: One commenter suggested that OCSE mandate that non-IV-D
families that seek to have child support payments processed through the
SDU must sign up for limited payment processing-only services. This
would enable States to assist these families and provide authorization
for States to work the cases. In addition, this would strengthen the
IV-D program overall by offering a broader service, collecting more
support, and assisting more families in the way they request.
Response: The final rule only allows the States the option to
provide paternity-only limited services, and we decided not to include
an option in this rule for families to sign up for limited payment
processing-only services at this time due to complex administrative
issues related to interstate cases.
4. Comment: One commenter indicated that while IV-D programs, SDUs,
and employers should not pass off their responsibilities for having
order and location information by relying on parents for the
information, they should be able to ask parents for information as a
last resort.
Response: There is no prohibition against a IV-D program asking
parents for information to ensure the prompt disbursement of support
payments.
5. Comment: One commenter requested that OCSE revisit OCSE-PIQ-10-
01 \9\ to allow Federal financial participation (FFP) for non-employer-
processed payments on non-IV-D orders. The commenter believed that
expanding the IV-D program to process other non-IV-D payments, not just
income withholding cases, would be more efficient because the IV-D
program would not have to obtain payment records from counties when a
case moves from non-IV-D to IV-D status. In addition, directing the
obligor to make payments to one location would likely lead to greater
compliance with the order.
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\9\ PIQ-10-01 is available at: http://www.acf.hhs.gov/programs/css/resource/federal-financial-participation-and-non-iv-d-activities.
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Response: OCSE appreciates this comment; however, under 45 CFR
304.20(b), FFP is limited to services and activities under the approved
title IV-D State plan which are determined by the Secretary to be
necessary expenditures properly attributable to the IV-D program.
6. Comment: One commenter suggested that Sec. 302.32(b)(1) be
changed to replace ``interstate'' with ``intergovernmental'' and
``State'' with ``agency.''
Response: OCSE agrees, with the first suggested change, and revised
Sec. 302.32(b)(1) by replacing the word ``interstate'' with the word
``intergovernmental.'' Additionally, we have revised the term
initiating State to initiating agency, since intergovernmental IV-D
cases may be initiated by Tribal or foreign child support programs.
However, we retained the phrase ``responding State,'' since only States
are required to meet the 2 day timeframe for forwarding collections
under paragraph (b)(1).
7. Comment: One commenter asked about the IV-D procedure when the
support payment has insufficient identifying information resulting in
an undistributed and often unidentified collection until the case
information is provided. Another commenter's State does not have a
working interface with the court system, and wanted to know how the
State can process payments if they do not have a copy of the order. An
additional commenter indicated that direct referrals of non-IV-D child
support orders to the IV-D agency would result in a large number of
orders that cannot be registered until further identifying information
is received from the parties or their attorneys.
Response: We acknowledge that States sometimes need to hold support
payments until they receive the needed case information. We encourage
States to work with courts and attorneys to develop processes that
ensure that complete case information is received expeditiously and
support payments can be disbursed within statutory timeframes.
In addition, sometimes it may be necessary to perform routine
location services if the non-IV-D custodial parent has an invalid
address and undistributable payments. As indicated in PIQ-10-01,\10\
Question and response 9, FFP is available for location services in non-
IV-D cases only if location services are used to locate the custodial
parent for disbursement of a collection. FFP is not available for non-
IV-D cases if location services are used to establish and/or enforce a
support order.
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\10\ PIQ-10-01 is available at: http://www.acf.hhs.gov/programs/css/resource/federal-financial-participation-and-non-iv-d-activities.
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Section 454B(b) of the Act requires that the ``State disbursement
unit shall use automated procedures, electronic processes, and
computer-driven technology . . . for the collection and disbursement of
support payments. . . .'' This includes the use of automated location
services to locate the custodial parent for prompt disbursement of
support payments. IV-D agencies are not responsible for providing other
services or taking enforcement actions in non-IV-D cases. In some
instances, the State may have to go back to the party and request the
information the State needs to disburse the support payments.
8. Comment: One commenter asked if one-time costs incurred by the
courts to permit the electronic exchange of non-IV-D information with
the State case registry (e.g., through portal or interface) would be
eligible for FFP.
Response: Yes, FFP is available for the courts to provide
information to the
[[Page 93508]]
SDU. OCSE-Action Transmittal (AT) 97-13 \11\ indicates that:
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\11\ AT-97-13 is available at: http://www.acf.hhs.gov/programs/css/resource/collection-and-disbursement-of-support-payments.
FFP . . . is available for the cost of establishing an automated
interface with the non-IV-D systems to transmit data to the State
CSE automated system. . . . The costs associated with establishing
and maintaining the State Case Registry and the SDU, including the
costs of maintaining non-IV-D support order records in the State
case registry and necessary identification and [support] payment
information in the State Disbursement Unit, are eligible for
reimbursement at the applicable rate of FFP. FFP is available for
the cost of converting non-IV-D case information (not payment
records) necessary to process collections required to be paid
---------------------------------------------------------------------------
through the SDU.
9. Comment: Two commenters asked if this provision will apply to
all child support payments.
Response: This provision applies to child support payments in all
IV-D cases and in non-IV-D cases 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 in
accordance with sections 454B, 454(27), and 466(a)(8)(B) of the Act.
10. Comment: One commenter asked who is responsible for obtaining
information on non-IV-D cases in a purely private matter.
Response: It is the State's responsibility to secure the
information needed to disburse support payments in non-IV-D cases.
11. Comment: One commenter requested clarification about the term
``maintenance.'' The commenter suggested that it should be very broad
to include all actions and information gathering to ensure compliance.
Response: The NPRM indicates that FFP is generally available for
the submission and maintenance of data in the State Case Registry (SCR)
with respect to non-IV-D support orders established or modified on or
after October 1, 1998. Maintenance in this context refers to updating
the support order information in the SCR as needed.
PIQ-10-01 states that FFP is available for the costs of entering
into the SCR the data elements listed in the regulations under Sec.
307.11(e)(3) and (f)(1). Specifically, Sec. 307.11(e)(3) specifies the
following data elements for each participant in the case: Name, social
security number, date of birth, case identification number, other
uniform identification number, data elements required under paragraph
(f)(1) of this section necessary for the operation of the Federal case
registry, issuing State of an order, and any other information that the
Secretary may require. Section 307.11(f)(1) indicates the additional
elements required for the Federal Case Registry, which include the
following data elements: State Federal Information Processing Standard
(FIPS) code and optionally county code; State case identification
number; State member identification number; case type (IV-D, non-IV-D);
social security number and any necessary alternative social security
number; name including first, middle, and last name and any alternative
name; sex (optional); date of birth; participant type (custodial party,
noncustodial parent, putative father, child); family violence indicator
(domestic violence or child abuse); indication of an order; locate
request type (optional); locate source (optional); and any other
information that the Secretary may require.
FFP is available for the State child support agency to update
address changes as reported by the non-IV-D custodial parent and
noncustodial parent to ensure prompt disbursement of support payments.
12. Comment: One commenter stated that this provision does not
address Tribal use of their own income withholding form, as Tribal
entities without a IV-D program do not currently use the OMB-approved
Income Withholding for Support form, and Tribal employers do not
consistently honor the Federal form.
Response: While the Uniform Interstate Family Support Act (UIFSA)
compels an employer subject to State jurisdiction to honor an income
withholding order sent directly from another State or an Indian Tribe,
Tribes are not subject to UIFSA. However, the Full Faith and Credit for
Child Support Orders Act (FFCCSOA), 28 U.S.C. 1738B, requires Tribes to
enforce child support orders made by a court or administrative agency
that had appropriate jurisdiction and afforded the parties a reasonable
opportunity to be heard. This would include enforcement of orders
providing for income withholding.
The regulation at Sec. 309.110(d) of this chapter states that the
income withholding must be carried out in compliance with the
procedural due process requirements established by the Tribe or Tribal
organization. Accordingly, Tribes may conduct preliminary reviews of
foreign orders to ensure that the court or administrative authority
properly entered the order, but such processing of orders must be done
expeditiously to ensure that orders are promptly served on employers
within the Tribe's jurisdiction in accordance with the regulations at
Sec. 309.110(n). In accordance with Sec. 309.110(j), the only basis
for contesting a withholding order is a mistake of fact, which means an
error in the amount of current or overdue support or in the identity of
the alleged noncustodial parent.
While the regulations do not require Tribes to have laws and
procedures which mandate that employers subject to the Tribe's
jurisdiction must honor direct income withholding orders from another
State or Tribe, a Tribe may choose to permit direct withholding as a
matter of administrative efficiency or comity between the Tribe and
other Tribes and States.
As indicated in PIQT-05-04,\12\ Tribes that do not receive funding
to operate IV-D programs are not required to use or recognize the OMB-
approved Income Withholding for Support form. However, the Tribal child
support regulation at Sec. 309.110(l) requires Tribes that receive
Federal funding to operate IV-D programs to use and recognize the OMB-
approved form.
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\12\ PIQT-05-04 is available at: http://www.acf.hhs.gov/programs/css/resource/state-iv-d-agencies-use-of-federal-income-withholding-form.
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13. Comment: One commenter was concerned that the proposed
provision does not sufficiently incorporate Tribal IV-D programs into
the calculus. While a case and its corresponding child support order
that was entered in the State courts may be a non-IV-D case for the
State, this same case may be a IV-D case in the Tribal IV-D caseload.
The Tribal IV-D agency may have served the employer with an income
withholding for support order and directed the employer to send
payments to the Tribe. The commenter suggested that the rule be
broadened to acknowledge the appropriateness of employers sending
payments to Tribal IV-D agencies or Tribal SDUs; otherwise State IV-D
agencies may resist transferring such cases and/or support orders to
Tribal IV-D agencies.
Response: This issue arises when a Tribe is enforcing an underlying
State child support order. In those instances, the IWO issued by the
Tribe often incorrectly indicates that remittance should be made to the
Tribe instead of to the SDU of the order-issuing State, in accordance
with Sec. 309.115(d). The instructions for the OMB-approved IWO form,
however, may cause confusion by referring generically to the ``order.''
The instructions read: ``Payments are forwarded to the SDU in each
State, unless the order was issued by a Tribal CSE agency. If the order
was issued by a Tribal CSE agency, the employer/income withholder must
follow the
[[Page 93509]]
remittance instructions on the form.'' The term ``order'' in these
instructions refers to the underlying State support order and not the
tribal IWO. Tribes have interpreted these instructions, however, as
meaning that payment is to be remitted to the Tribe.
Because the IWO is an OMB-approved form, OCSE will consider
reviewing these issues further and clarifying the form and instructions
to the form in future revisions. In addition, we will continue to
provide technical assistance to Tribes so that the remittance section
of the IWO form is completed correctly and in accordance with existing
regulations.
14. Comment: One commenter stated that the proposal to require
States to distribute non-IV-D payments the same as IV-D payments fails
to address the impact of this policy on the Federal performance
measures by which the States derive incentive payments. The commenter
noted that this requirement diverts State resources to process and
collect non-IV-D payments that do not affect the State's overall
performance, and detracts from work on IV-D cases.
Response: The requirement for SDUs to process non-IV-D income
withholding collections is required by title IV-D of the Act as amended
by the Personal Responsibility and Work Opportunity Reconciliation Act
of 1996. In addition, the performance incentive measures were mandated
by the Child Support Performance and Incentive Act of 1998. Since the
definition of the performance measures are a statutory requirement,
OCSE does not have authority to revise how these measures are
calculated.
15. Comment: One commenter noted that in his State, the county
clerks are allowed to implement and manage their own case management
and e-filing systems. There is neither statewide authority nor any law
that creates a centralized authority that could mandate that a
particular system or system requirements are put in place for
implementing this requirement. Because of this, there is no standard
process to digitally and automatically transmit case information on
non-IV-D domestic cases to the IV-D agency. Another commenter asserted
that, in her State, local child support agencies are not privy to
information on the establishment of non-IV-D court orders and such
information is not entered into the State's automated child support
enforcement system.
Response: The requirement that support payments made through income
withholding on non-IV-D cases be processed through the SDU has been in
place for over 20 years. It is important that States work with courts
to set up processes that are efficient and that States follow Federal
income withholding and SDU requirements. Over the years OCSE has
provided technical assistance to States and will continue to do so upon
request.
Section 302.33--Services to Individuals Not Receiving Title IV-A
Assistance Former Child Welfare Recipients: Sec. 302.33(a)(4)
1. Comment: One commenter urged OCSE to clarify that, when a State
has opted to implement the limited services option authorized in Sec.
302.33(a)(6), the notice to former recipients of State assistance under
Sec. 302.33(a)(4) shall include information about the family's option
of seeking limited services rather than the binary option of continuing
full services or closing the case.
Response: In the final rule, paternity establishment is the only
limited service available to individuals receiving child support
services. States may include this option in their notice, but it is not
required.
2. Comment: One commenter stated that further language may be
needed to determine if this flexibility applies to both Federal and
State foster care scenarios. In addition, the commenter noted that
closing foster care cases with arrears owed to the State may result in
unintended negative consequences if the cases are later reopened with
arrears balances and interest still owing (if applicable).
Response: The Federal government does not have authority to
regulate the State-funded foster care program (other than to define
child support family distribution requirements under section 457 of the
Act.) Therefore, this regulation applies to federally-funded foster
care cases. However, States have discretion to apply this language to
State-funded foster care cases as well. If there is no longer a current
support order and arrearages are under $500 or unenforceable under
State law, the State may close the case pursuant to 45 CFR
303.11(b)(1). If there is no longer a current support order and all
arrearages in the case are assigned to the State, the case may be
closed pursuant to 45 CFR 303.11(b)(2). Additionally, for arrears
assigned to the State, the State has the authority to compromise the
arrearages. It is the State, and not the Federal government, that has
the authority to compromise the arrearages since the State has the
financial interest in the money.
3. Comment: One commenter asked if the State is still required to
collect assigned child support when a child is no longer eligible for
IV-E foster care services and the IV-D agency determines closure is
appropriate. The commenter indicated that it would reduce strain on a
newly reunified family if the State could stop collecting the assigned
arrears.
Response: In this situation, the case has been referred by the IV-E
agency and can be closed in accordance with Sec. 303.11(b)(20) if the
IV-D agency determines that it is inappropriate to continue to enforce
the order.
4. Comment: According to one commenter, the wording of the
provision suggests that if both the custodial parent and the
noncustodial parent owe arrears to the State foster care agency
pursuant to a valid support order, and then the child is returned to
the custodial parent's home, enforcement would discontinue against the
custodial parent, but not the noncustodial parent.
Response: In this scenario, there are two orders, one for the
custodial parent, who was referred to the IV-D agency when the child
was removed from the home, and one for the noncustodial parent. For the
custodial parent that was referred and to whom the child is being
returned, the IV-D agency can close the case pursuant to Sec.
303.11(b)(20) of this chapter once the parent resumes custody of the
child. For the noncustodial parent, the case should remain open if
there is an order for current support and arrearages.
5. Comment: One commenter asked that consideration also be given to
allowing States to close cases instead of continuing services to former
Medicaid-only cases in which the IV-D agency determines that continued
services would be inappropriate.
Response: OCSE appreciates this comment; however, we need to gather
additional information before proposing this change.
6. Comment: One commenter recommended that OCSE clarify how States
determine whether child support services continue to be appropriate for
the family once the child is no longer eligible for foster care.
Specifically, the commenter suggested additional language that would
permit States to establish in regulation, rule, or procedure a category
of cases that, based on criteria chosen by the IV-D agency, would not
be appropriate for continued services.
Response: States have discretion to establish criteria for
determining when continued services and notice are not appropriate.
Limited Services: Sec. 302.33(a)(6)
1. Comment: We received a substantial amount of feedback
[[Page 93510]]
regarding the concept of limited services. Most of the commenters
expressed support for offering limited services to applicants. A number
of commenters indicated that allowing parents to have more ability to
select the services they need would make the child support program more
family-friendly and increase program efficiency. In particular,
commenters identified the need to offer paternity establishment as a
limited service. However, commenters also raised various implementation
concerns about limited services, including challenges in the context of
intergovernmental cases, the range and types of limited services
options offered, the need for domestic violence safeguards, system
programming needs, and reporting and performance issues. With regard to
offering limited services in interstate cases, commenters raised issues
such as difficulty in tracking which limited services are offered by
each State and the ability of a responding State to accommodate an
intergovernmental limited services request. Some commenters were also
confused regarding which types of limited enforcement services would be
offered and how competing limited enforcement services requests between
parties would be handled.
Response: We are persuaded that the potential intergovernmental
challenges involved with implementing a menu of limited enforcement
services warrants rolling back the scope of the option proposed in the
NPRM. We decided to move forward by only giving States the option to
offer paternity establishment as a limited service in an intrastate
case. In response to these and other concerns addressed above by
commenters, we amended Sec. 302.33(a)(6). This paragraph indicates
that 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
paternity-only limited services in an intrastate case. If the State
chooses this option, the State must define how this process will be
implemented and must establish and use procedures, including domestic
violence safeguards, which are reflected in a record, that specify when
paternity-only limited services will be available. An application will
be considered full-service unless the parent specifically applies for
paternity-only limited services in accordance with the State's
procedures. If one parent specifically requests paternity-only limited
services and the other parent in the State requests full services, the
case will automatically receive full services. The State will be
required to charge the application and service fees required under
paragraphs (c) and (e) of this section for paternity-only limited
services cases, 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 availability of paternity-only limited services,
consequences of selecting this limited service, and an explanation that
the case will be closed when the limited service is completed.
2. Comment: Commenters raised concerns regarding what would happen
if an applicant in an intrastate case applied for and was receiving
limited services and one of the parties later moved out of state and
that State did not include the option to provide limited services in
its State plan.
Response: As noted above, in response to comments we narrowed the
scope of limited services to paternity establishment services only and
only in intrastate cases. Therefore, if, during the course of providing
paternity-only limited services, one of the parties moves out of state,
the State may pursue paternity establishment using long-arm \13\
procedures. If this is not appropriate, then the State should contact
the applicant to determine whether to pursue a full-services
intergovernmental case.
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\13\ Long-arm'' refers to State laws that allow the State to
exercise personal jurisdiction over an out-of-state defendant in
situations when the defendant has had sufficient minimum contacts
with the State.
---------------------------------------------------------------------------
3. Comment: One commenter noted that the language in paragraph
(a)(6) reads as if the option of limited services is available only to
nonpublic assistance recipients, i.e., those eligible under paragraph
(a)(1)(i). The commenter asked for clarification regarding whether the
intent of this language is to disallow the option of limited services
to former Medicaid, former TANF, and/or former IV-E foster care
recipients.
Response: After reviewing the regulatory text, we think that it is
clear that the intent of this provision to allow those individuals
under Sec. 302.33(a)(1)(i) who file an application for IV-D services
to request and receive paternity-only limited services. Further,
paternity-only limited services are restricted to intrastate cases
only. An individual who has been receiving IV-D services and is no
longer eligible for assistance under title IV-A, IV-E foster care, or
Medicaid programs and has not had paternity established while his/her
case was open under paragraphs (a)(1)(ii) or (iii), may choose to close
his/her existing case once he/she is no longer receiving public
assistance and may submit a new application under paragraph (a)(1)(i)
for paternity-only limited services, along with any applicable fees.
4. Comment: A few commenters opposed the inclusion of paternity-
only limited services in the provision because applicants may simply
request closure of their case with the State child support agency after
genetic testing results are provided. Another commenter felt that
paternity-only services should not be offered because, if a support
order is not obtained, we are neglecting one of the key tenants of our
mission statement to obtain meaningful support for the child. This
commenter also noted that establishing the support order at the time
paternity is determined will likely result in more accurate income
information and less default orders, as initial cooperation has already
been gained from the noncustodial parent.
Response: We disagree with the comments that paternity-only
services should not be offered because of the possibility of case
closure. While some State child support agencies may currently have
policies that allow applicants to request closure of their case after
obtaining genetic testing results, other State child support agencies'
policies do not allow the applicants to request closure of their cases
until after an order for paternity and support has been legally
established or determination made that paternity cannot be established.
The addition of this rule provides all States with the authority to
allow either the custodial or the noncustodial parent to request
paternity-only services without also requiring the establishment of an
order for support, thus giving States increased flexibility to be
responsive to a family's specific circumstances.
We also disagree with the notion that paternity-only services
should not be offered in cases where there is to be no support order
established. While we acknowledge that establishing a child support
order at the time paternity is determined may result in more accurate
income information and less default orders, provided that there is
continued cooperation from the noncustodial parent, there are benefits
to paternity determination even if a support order is not established.
A key component of encouraging responsible parenting is accomplished
through the establishment of paternity for a child. Whether or not an
unwed biological father is currently living with the biological mother
and children in an intact household, he has no legal standing as the
children's father unless paternity is legally established.
[[Page 93511]]
Establishing paternity also serves to clarify the birth record of the
child and establishes possible eligibility for dependents' benefits--
all without subjecting the intact family unit to an unwanted and
unnecessary order for child support.
5. Comment: In regard to the requirement under paragraph (a)(6)
that a case will automatically receive full services in the event that
one parent specifically requests paternity-only limited services and
the other parent requests full services, one commenter asked who, in
this instance, would be the applicant and who could close the case or
request a change in services. Another commenter asked whether a new
case would be opened when a request is made to change from limited
services to full services, or if the existing case would instead be
modified.
Response: If a State chooses to offer a paternity-only limited
services option, the State must define how this process will be
implemented. The State must establish and follow policy and procedures
regarding appropriate case management protocol when applications from
both parties are received with differing requests for services or when
a case is moving from paternity-only limited services to a full
services case.
6. Comment: Several commenters requested clarification regarding
how an application for full services should be handled when received
after a case was previously opened for limited services only. Questions
were posed such as: Would a new application be required? Would an
additional full application fee be required or would it be a reduced
fee for the subsequent application? Does this decision change if it is
the same parent now requesting full services versus if it is the other
parent making the subsequent request?
Response: As we indicated above in the discussion of how States
should handle competing applications received from both parties in a
case, it is up to each State child support agency to determine specific
paternity-only limited services policy and procedures. Although a full
new application may not be necessary, States are encouraged to require
some type of written documentation (for example, an addendum to the
original application) when a subsequent request is made to change a
case previously opened for paternity-only limited services to a full-
services case.
7. Comment: One commenter voiced concern that the changing of an
applicant's limited services selection may cause disruption in the
streamlined delivery of services, causing delays and increased staff
time. For example, if paternity-only limited services were requested
and the applicant later requests full services before the paternity
establishment process has been completed, the State child support
agency would be required to amend, re-serve, and refile the summons and
complaint to include the establishment of child support. Several
commenters expressed concern over potential system programming
difficulty and costs associated with offering limited services, stating
that system changes may be problematic for State child support agencies
with older systems and may require longer than one year to complete.
Finally, one commenter noted that, as current statutes and procedures
are designed around a full-service approach to establishment and
enforcement, it will be necessary for States to review their current
laws to determine if a limited services option can be provided within
existing judicial framework or whether statutory changes may be
required to accommodate a limited services option.
Response: If a State chooses to offer paternity-only limited
services as an option, that State has the ability to make provisions in
its policies and procedures regarding how to address changes that
applicants make in service selections. Additionally, if a State chooses
to offer this option, the State has flexibility in how and when to
implement the changes. In this rule, OCSE has not mandated if, how, or
when States should upgrade the functionality of their automated child
support enforcement systems to accommodate a paternity-only limited
services option. As indicated in the preamble to the NPRM, as States
modernize their statewide automated systems, it will be easier to
implement and manage paternity-only limited services in their
caseloads, and at the same time will provide States additional
flexibility to offer child support services that meet the needs of
modern families. Finally, as State child support programs continue to
evolve to provide services that are tailored to meet the needs of
modern families, OCSE will continue to provide outreach and technical
assistance on an individual basis to States needing support with the
passage and implementation of necessary statutory changes.
8. Comment: One commenter was concerned that if a father applies
for paternity-only limited services and the mother does not want to
cooperate, there would be nothing further a State could do to compel
her to comply and thus the State could never close the case since the
paternity-only limited service will not have been completed.
Response: We disagree. It is common practice for State child
support agencies to file a judicial motion requesting the court's
assistance when a custodial parent refuses to cooperate with the
paternity establishment process. A court order requiring the custodial
parent to cooperate with genetic testing may then be issued, and
contempt of court sanctions are possible if the custodial parent
continues to be noncompliant. However, prior to taking the above
actions, we encourage State child support agencies to work with
custodial parents to explain the benefits of having paternity
established for their children, unless there is good cause for refusal
to cooperate, such as domestic violence, as discussed later in this
section (see Comment/Response 12).
9. Comment: One commenter suggested that a pamphlet or some other
document accompany child support applications to provide information on
the paternity-only limited services option. The commenter felt that
providing this information on a separate but accompanying document
would be more effective than if it were to appear in the application
itself.
Response: States electing to provide paternity-only services are
required under Sec. 302.33(a)(6) to provide applicants with
information on the availability of paternity-only limited services, the
consequences of selecting this limited service, and an explanation that
the case will be closed when the limited service is completed.
Providing information on the application about paternity-only limited
services is necessary to document that the applicant has obtained this
information and requested this service. However, a State may supplement
the information on the application with a brochure, pamphlet, or any
other type of document that the applicant could maintain if the State
believes that this is a better way to convey the information.
10. Comment: One State inquired whether Federal financial
participation (FFP) will be available for States to make the necessary
system changes to support the implementation of limited services.
Response: Yes. As outlined in 45 CFR 307.35, FFP at the applicable
matching rate is available for computerized support enforcement system
expenditures related to, among other things, system enhancements
related to the establishment of paternity. Section 304.20 of this final
rule also clarifies that FFP is available for necessary and reasonable
expenditures properly
[[Page 93512]]
attributed to the Child Support Enforcement program for services and
activities to carry out the title IV-D State plan, including obtaining
child support, locating noncustodial parents, and establishing
paternity.
11. Comment: There were a number of comments from States expressing
concern over how limited services would affect reporting requirements
and performance measures. More specifically, questions were raised
regarding how paternity-only cases may impact the order establishment
performance measure and whether paternity-only cases will be excluded
from the case count for the total number of ``Cases Open at the End of
the Fiscal Year'' denominator for that measure.
Response: We recognize that reporting changes on the OCSE-157
report may be necessary to accommodate the addition of a paternity-only
limited services option so that these cases do not negatively impact
the support order establishment performance measure. OCSE will work to
implement the necessary changes to the form after this rule is
published as final.
12. Comment: Several commenters expressed the need for sound
domestic violence safeguards when offering limited services. One
commenter specifically suggested that language be added to the
regulation requiring the inclusion of domestic violence safeguards when
States establish procedures for paternity-only limited services. One
commenter raised the possibility that a parent could be pressured or
coerced by the other parent into pursuing paternity-only limited
services but no support order so that there would be no responsibility
for supporting the child. Another commenter felt that offering
paternity-only limited services may be a barrier that keeps a custodial
parent and child in an abusive relationship, requiring the custodial
parent to take some later affirmative step in requesting and obtaining
a support order and thus potentially provoking his or her abuser. Other
commenters recommended that OCSE work with domestic violence experts to
develop procedures and training resources, and that State child support
agencies be required to assess domestic violence status multiple times
throughout the life of a case versus the current practice, which
typically occurs only at the beginning of a case. A few commenters
recommended practices that child support workers could take to mitigate
potential domestic violence issues. One commenter asked whether there
are good cause procedures that would be applicable in nonpublic
assistance cases. For example, if a noncustodial parent requests
paternity-only services but the custodial parent does not wish to
comply due to domestic violence concerns, and it is a nonpublic
assistance case, would the State child support agency then be
responsible for determining if the paternity-only limited service
should be denied?
Response: OCSE appreciates commenters' concern for the safety of
domestic violence victims. We encourage States to consider developing
domestic violence safeguards throughout every step in case processing.
In response to these specific comments, we amended the final regulation
at Sec. 302.33(a)(6) to require that States include domestic violence
safeguards when establishing and using limited services processes and
procedures. As discussed in the preamble to the NPRM, OCSE is acutely
aware of the risk of domestic violence in the general operation of the
child support program and, in particular, as it relates to this limited
services provision. Supporting families who have experienced domestic
violence is essential to a successful child support program. All State
child support agencies are required, under Sec. 303.21(e), to
establish domestic violence safeguards pertaining to the disclosure of
information and these procedures must be followed for paternity-only
limited services cases, as well. In addition, IM-14-03 \14\ provides an
array of resources and tools child support programs can use to help
victims safely and confidentially obtain child support services. It
includes training tools for child support professionals, emphasizes the
critical role of confidentiality, and describes existing domestic
violence resources for parents, child support professionals, and the
courts. The IM also outlines the importance of, and opportunities for,
collaboration with domestic violence programs and coalitions as a means
to improve the safe, efficient delivery of child support services.
Child support establishment and enforcement can heighten the risk of
domestic violence.\15\ OCSE coordinates closely with ACF's Family and
Youth Services Bureau (FYSB) to support implementation of recognized
domestic violence protocols in child support programs and to conduct
training and technical assistance. OCSE is committed to continuing to
work with FYSB, States, and advocates to ensure that best practices are
in place to safeguard the families we serve.
---------------------------------------------------------------------------
\14\ Available at: http://www.acf.hhs.gov/programs/css/resource/ocse-domestic-violence-awareness-month.
\15\ Pearson, Jessica and Esther Ann Griswold, ``Child Support
Policies and Domestic Violence,'' Public Welfare, (Winter 1997),
preview available at: https://www.questia.com/magazine/1G1-19354300/child-support-policies-and-domestic-violence; and Pearson, Jessica
and Esther Ann Griswold, Child Support Policies And Domestic
Violence: A Preliminary Look at Client Experiences with Good Cause
Exemptions to Child Support Cooperation Requirements, prepared under
a grant from the Federal Office of Child Support Enforcement (Grant
No. 90-FF-0027) to the Colorado Department of Human Services for the
Model Office Project, Center for Policy Research, January 1997,
available at: https://childsupport.state.co.us/siteuser/do/vfs/Read?file=/cm:Publications/cm:Reports/cm:Model_x0020_Office_x0020_Project_x0020_Grant/cm:Child_x0020_support_x0020_policies_x0020_and_x0020_dv.pdf.
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By identifying and responding effectively to domestic violence,
providing safe opportunities to disclose domestic violence, and
developing safe and confidential responses to domestic violence, child
support programs can put the safety of families and program staff at
the forefront of child support work. There are a number of points of
heightened domestic violence risks during the establishment and
enforcement process, and States should be providing domestic violence
safeguards throughout the process. We encourage States to work with
their local domestic violence programs and coalitions to establish
appropriate safeguards. It is the responsibility of each State to
ensure that their domestic violence provisions are adequate for both
paternity-only limited services and full services application requests.
Historically, the custodial parent has typically been the applicant
for State child support services. However, in providing an avenue for
fathers to establish paternity for their child, we recognize that the
potential exists for a noncustodial father to apply for paternity-only
limited services without the cooperation or consent of the custodial
parent mother due to domestic violence concerns. Clearly, it is never
OCSE's intent to create a dangerous situation for a parent who is a
victim of domestic violence. Although Federal law is silent on this
specific scenario, there is nothing in Federal statute or regulation
that would preclude States from developing additional policies and
procedures to address the safety needs of custodial parents in non-
public assistance cases who are found to have good cause for refusing
to cooperate with the State child support agency in establishing
paternity, or for whom the State child support agency determines it is
against the best interest of the child to pursue paternity issues.
Under section 454(29) of the Act, it is up to each State to define the
criteria for ``good cause'' and to choose which
[[Page 93513]]
agency will determine if the good cause exception is warranted. Section
303.11(b)(14) provides that a good cause determination can be made by
either the IV-A, IV-D, IV-E, Medicaid or SNAP agency. Section
305.2(a)(1) reiterates this, declaring that the count of children in
establishing paternity performance levels shall not include ``. . . any
child whose parent is found to have good cause for refusing to
cooperate with the State agency in establishing paternity, or for whom
the State agency determines it is against the best interest of the
child to pursue paternity issues.'' Lastly, Sec. 302.31(b) and (c)
mandate that the State child support agency suspend all activities to
establish paternity or secure support until notified of a final
determination by the appropriate agency, and will not undertake to
establish paternity or secure support in any case for which it receives
notice that there has been a finding of good cause unless there has
been a determination that support enforcement may safely proceed
without the participation of the caretaker or other relative.
Section 302.38--Payments to the Family
1. Comment: One commenter stated that by preventing assignments to
attorneys, we could limit custodial parents' ability to find legal
representation. Another commenter stated that the NPRM as written
appears to prohibit the disbursement of payments to anyone other than
the payee. Several commenters suggested that the provision be changed
so that disbursements to a third party, such as a private attorney or
conservator representing custodial parents in child support collection
actions or relatives or guardians, are authorized at the request of the
custodial parent. Another commenter stated that States should retain
the right to send payments to a conservator or private attorney
representing the custodial parent and child with a legal fiduciary duty
to act in the child's best interest.
Response: OCSE agrees that States should retain the right to send
payments to a judicially-appointed conservator with a legal and
fiduciary duty to the custodial parent and the child; however, we do
not view private attorneys in this same category, particularly when
collecting fees. Based on the American Bar Association Model Code of
Professional Responsibility, many States disfavor contingency fees in
child support cases because they would reduce support to the child and
could adversely affect family relationship.
We have revised Sec. 302.38 to expand the list of entities to whom
child support payments under Sec. Sec. 302.32 and 302.51 can be made.
The provision now requires that a State's IV-D 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, caretaker relative having custody of or responsibility for
the child or children, judicially-appointed conservator with a legal
and fiduciary duty to the custodial parent and the child, or alternate
caretaker designated in a record by the custodial parent. An alternate
caretaker is a nonrelative caretaker who is designated in a record by
the custodial parent to take care of the children for a temporary time
period.
2. Comment: One commenter believed that private attorneys should be
in the same category as a collection agency.
Response: We agree. Therefore, this rule does not authorize
payments to be made directly to a private attorney or a private
collection agency.
3. Comment: Several commenters recommended that we modernize the
rule to refer to caretaker rather than relative caretaker to
accommodate nonrelative caretakers and guardians. In addition, the
commenters recommended expanding the definition of ``to a family''
because custodial parents may need the ability to designate an
alternate recipient in situations where doing so may benefit the
family, which is common. Another commenter asked if OCSE meant to
disallow situations in which the mother requests payments be directed
to caretakers who are not relatives and not legal guardians.
Response: OCSE agrees and updated the language in Sec. 302.38 to
include an alternate caretaker designated in a record by the custodial
parent in those circumstances when the parent does not obtain a formal
court order to change custody, for example, before going into the
hospital or jail, or being deployed. An alternate caretaker is a
nonrelative caretaker who is designated in a record by the custodial
parent to take care of the children for a temporary time period.
4. Comment: One commenter asked that we clarify that payments must
be made to the resident parent, legal guardian, or caretaker relative
who is the petitioner or named custodial parent obligee in the petition
for support and the support order. According to the commenters, this
would ensure that the proposed revision to Sec. 302.38 is not read as
authority for State IV-D agencies to unilaterally amend the obligee in
a child support case when custody changes.
Response: This provision only addresses a IV-D agency's
requirements when disbursing child support payments. Section 302.38
does not authorize child support agencies to unilaterally change a
child support order when custody changes. State laws govern such
changes.
5. Comment: Two commenters suggested changing the language to
specifically prohibit disbursements to private collection agencies if
that is the sole intent.
Response: Section 454(11)(A) and (B) of the Act clearly provides
that a State plan for child support must provide that amounts collected
as support shall be distributed as provided in section 457; and provide
that any payment required to be made under section 456 or 457 to a
family shall be made to the resident parent, legal guardian, or
caretaker relative having custody of or responsibility for the child or
children. The intent of this rule is to disburse child support payments
directly to families.
Our 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, potentially inappropriate business
practices of some private collection agencies not under contract to
States. In addition, the ethics codes of most state bar associations
prohibit private attorneys from taking fees from current child support,
and several prohibit fees from arrears on public policy grounds. In
order to provide protections for families and fulfill the intent of the
original child support legislation and subsequent amendments, Sec.
302.38 requires that child support payments owed and payable to
families be disbursed directly to families.
6. Comment: One commenter suggested changing case closure
provisions to authorize case closure if the IV-D applicant contracts
with a private collection agency or there is no longer a resident
parent, legal guardian, or caretaker to whom the IV-D agency can
disburse payments.
Response: We do not agree that the case closure provisions should
be changed to authorize case closure if the IV-D applicant contracts
with a private collection agency because there is no prohibition
against a custodial parent contracting with a private collection
agency. If there is no longer a resident parent, legal guardian, or
caretaker relative having custody of or responsibility for the child or
children, judicially-appointed conservator with a legal and fiduciary
duty to the custodial parent and the child, or alternate caretaker
designated in a record by the custodial parent to whom the IV-D agency
can disburse payments, the State
[[Page 93514]]
may close the case if it meets any of the case closure criteria in
Sec. 303.11(b).
7. Comment: Two commenters suggested that OCSE encourage States to
help custodial parents obtain bank accounts so they can avoid predatory
fees from check-cashing businesses and not lose considerable shares of
their payments to fees.
Response: We support States' issuance of debit cards, which will
help custodial parents avoid predatory fees from check-cashing
businesses. We encourage States to provide training or technical
assistance to custodial and noncustodial parents to improve financial
literacy, financial management, and financial responsibility.
8. Comment: One commenter suggested OCSE should clarify that IV-D
agencies are not responsible to confirm that payments deposited
directly to bank accounts are bank accounts under the control of the
parent or caretaker. If the parent enrolls in direct deposit, the IV-D
agency permits it without further confirmation.
Response: Child support agencies are not required to confirm that
the bank accounts, to which the State sends payments, are under the
control of the parent or caretaker. We are not making this a new
requirement. However, States are required to establish a mechanism to
identify payments through the SDU that are going to private collection
agencies. See Comments/Responses 15 and 16.
9. Comment: One commenter suggested that the rule requires States
to presume that the TANF recipient is the legal guardian in such
instances.
Response: We disagree. The State determines whether the TANF
recipient is the legal guardian.
10. Comment: Several commenters were concerned with the use of the
term ``directly'' and felt it may cause issues with the arrangements
that families have in order to care for their children. Some commenters
feel that the proposed regulation omits other, less formal, requests
from custodial parents to disburse funds to a relative or family friend
with whom the child may be living on a temporary basis. Several
commenters recommended that OCSE not use the term ``directly.''
Response: We have expanded the list of entities to whom child
support payments under Sec. Sec. 302.32 and 302.51 can be made to
allow for alternate caretakers designated in writing or in a record by
custodial parents.
11. Comment: One commenter suggested that a clear definition of the
term ``private collection agency'' should be provided by OCSE for
purposes of uniformity.
Response: OCSE notes that the Department of Treasury defines a
private collection agency as a private sector company specializing in
the collection of delinquent debt. A private collection agency will
attempt to find and contact a debtor by searching various databases,
making telephone calls, and sending collection letters. Once the debtor
is located and contacted, the private collection agency will encourage
the debtor to satisfy the debt.\16\
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\16\ Further information is available at: https://www.fiscal.treasury.gov/fsservices/gov/debtColl/dms/xservg/pca/debt_pca.htm.
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12. Comment: One commenter asked that OCSE address the treatment of
interstate/Uniform Interstate Family Support Act (UIFSA) cases where
money is sent to the initiating State's SDU and international cases,
which may order support payment directly to the child and/or to other
caretaker situations.
Response: In interstate cases, Sec. 303.7(d)(6)(v) requires the
responding State IV-D agency to collect and forward child support
payments to the location specified by the initiating agency. The
initiating State IV-D agency must specify its SDU as the location for
receiving payments in intergovernmental cases in accordance with
section 454B of the Act and Sec. 303.7(d)(6)(v) and is responsible for
distributing and disbursing child support payments in accordance with
Sec. 303.7(c)(10) and as directed in Sec. 302.38 in the same manner
it handles intrastate cases.
Similarly, in an international case where the State is enforcing
and collecting child support payments (in accordance with section
454(32) and 459A of the Act) as the responding State IV-D agency, the
payment processing requirements in Sec. 303.7(d)(6)(v) apply. State
IV-D agencies, as responding agencies in international child support
cases, are required to forward child support payments ``to the location
specified by the initiating agency.'' The term ``initiating agency'' is
defined in Sec. 301.1 to include an agency of a country that is either
a foreign reciprocating country or a country with which the State has
entered into a reciprocal arrangement and in which an individual has
applied for or is receiving child support enforcement services. In
international cases, the Central Authority or its designee in the
foreign country will identify where payments should be sent, for
example, to the Central Authority, court, custodial parent, caretaker,
emancipated child, etc. In these cases, the responding State IV-D
agency satisfies title IV-D requirements by collecting and forwarding
collections as directed by the Central Authority in the foreign country
in accordance with Sec. 303.7(d)(6)(v).
13. Comment: The commenter asked that OCSE clarify if this
provision only applies to IV-D agencies and if it applies to child
support payments that are subject to income withholding, not subject to
income withholding, or both.
Response: This provision applies to all payments that flow through
the SDU.
14. Comment: One commenter asked how States should handle existing
cases that have been set up to send payments to the private collection
agencies. For example, should States now ignore the contracts and
alternate payee forms submitted by the collection agencies and send any
collections directly to the custodial parent? Another commenter asked
if States will be obligated to notify obligees that the IV-D agency
will no longer disburse his/her payments to a private collection agency
as the obligee previously. One commenter indicated that requiring
disbursement directly to a family is contrary to existing contracts
that custodial parents have signed with private collection agencies.
Response: It is not the responsibility of the child support agency
to enforce private contracts. Private contracts are between the parent
and the private entity. State child support agencies should notify
obligees that the agency will no longer disburse child support
collections to private collection agencies. However, the custodial
parent can negotiate with private collection agencies, as this
provision only deals with the child support agency's disbursement of
child support collections. Once the SDU disburses the child support
collections to the obligee, the obligee still has the ability to pay
the private collection agency's fees for contractual services.
15. Comment: One commenter asked for detail on how local child
support agencies might identify cases in which the payment is being
disbursed to a private collection agency and how they would identify
the collection agency.
Response: Each State will be required to set up its own mechanisms
to identify cases in which the payment is being disbursed to a private
collection agency and to identify the collection agency.
16. Comment: One commenter expressed concern that it will be
difficult for States to ensure that payments are made directly to the
family for non-IV-D SDU cases.
Response: States are required to ensure that payments are made
directly to the family for all non-IV-D
[[Page 93515]]
collections being disbursed by the SDU. States should put the necessary
policies and procedures in place to ensure that this provision is
followed in all applicable cases. States need to develop procedures to
obtain information from the custodial parents to ensure that payments
for non-IV-D cases are sent directly to the family.
17. Comment: A few commenters opposed the provision, indicating
that they had personal experience working with private collection
agencies, and proposed that custodial parents should be able to choose
where their child support payments are disbursed. One commenter
indicated that some States have laws that allow a private collection
agency to contract directly with a custodial parent.
Response: This provision does not prohibit custodial parents from
entering into agreements with private collection agencies. As noted
above, the rule does not prevent companies from charging and collecting
fees for services rendered. Parents may pay private collection agencies
directly for provided services once they receive disbursement of their
child support payments.
Section 302.56--Guidelines for Setting Child Support Orders
General Comments
1. Comment: Several commenters requested public hearings around the
country on the proposed changes to the child support guidelines so
noncustodial parents could get their chance to tell OCSE what they
think.
Response: While the Administrative Procedures Act provides agencies
with discretion on whether to hold public hearings, OCSE determined
that the opportunity to submit written comments during the comment
period provided effective opportunity for public input. Therefore, OCSE
did not hold hearings on the NPRM. We received over 2,000 sets of
comments from State and county agencies, child support organizations,
court associations, advocacy groups, parent groups, researchers,
noncustodial parents, and custodial parents, which we carefully
considered in developing this final rule.
2. Comment: Several commenters suggested that at high incomes,
there should be a fixed dollar cap on child support orders. Their
rationale for the dollar cap is that it would reduce conflict, reduce
the need to hire lawyers and other professionals, and ultimately
increase resources available for the children. Also, they indicated
that many studies show that reasonable amounts of child support are
more likely to be paid regularly and the amount of unpaid arrearages
will be substantially reduced. Another commenter suggested that the
maximum amount of the support obligation should be no more than 20
percent of the obligor's income.
Response: We do not agree that the Federal government should set a
cap (either a fixed dollar amount or a maximum percentage rate) on
child support payments. States determine the numeric criteria included
in their guidelines.
3. Comment: A few commenters proposed that guidelines should call
for prompt modification of existing child support orders upon filing of
a complaint for modification, if there has been a significant change of
circumstances. They thought that ``significant change of
circumstances'' should be defined to include a change in the income and
earnings of either parent of 5 percent or more.
Response: The commenters are correct that Federal statute, section
466(a)(10) of the Act, requires review and, if appropriate, adjustment
of a child support order upon request of either parent if there is a
substantial change of circumstances. However, the NPRM did not propose
a change to the existing provision in Sec. 303.8(c) that the ``State
may establish a reasonable quantitative standard based upon either a
fixed dollar amount or percentage, or both. . . .'' OCSE already has
established timeframes for review and adjustment in Sec. 303.8(e),
which indicates that within 180 calendar days of receiving a request
for a review or locating the non-requesting parent, whichever occurs
later, a State must conduct a review of the child support order and
adjust the order upward or downward, upon a showing that there has been
a substantial change of circumstances, in accordance with this section.
We encourage States to streamline their procedures in order to promptly
modify child support orders upward or downward when there are
significant changes of circumstances.
4. Comment: Several commenters proposed that guidelines should
terminate child support at age 19 or upon graduation from secondary
school, whichever occurs earlier. One commenter added that one
exception should be if the child who is the subject of the order has
special medical or educational needs. The commenter also thought that
State statutes providing for the support of older children of intact
marriages should be applied identically to parents who are not married.
One commenter further explained that married parents are under no legal
obligation in most States to support their children beyond age 19,
except in extraordinary circumstances. This commenter questioned why
any State has an interest in mandating support for children of divorced
and separated parents up to age 23, but not for those of married
parents; the commenter found such requirements discriminatory on their
face. The commenter also stated that when he last checked, 33 States
terminate the child support obligation upon the child's attaining age
19.
Response: While we understand the commenters' point, States have
discretion and flexibility in defining the age of emancipation for
child support orders. In accordance with the Child Support Enforcement
Amendments of 1984, Congress has mandated that States must have
procedures that permit the establishment of the paternity of any child
at any time prior to such child's 18th birthday. However, it is a
matter to be determined by the State in accordance with State law.
Compliance Date [Sec. 302.56(a)]
1. Comment: While many commenters appreciated that OCSE's proposed
revision in Sec. 302.56(a) coincided with the next quadrennial review,
for States whose quadrennial reviews commence shortly after the rule is
finalized, the commenters indicated that they needed additional time to
conduct further analysis and research on implementation issues and
potential system changes. They recommended an additional extension of 1
year. In other words, the guideline changes would be required to be in
effect within 1 year after completion of the first quadrennial review
of its guidelines that commences more than 1 year after the publication
of the final rule.
Response: We agree with this suggestion and have made this change
in Sec. 302.56(a). We understand that States will need additional time
to do research and prepare for the quadrennial review based on the
revisions in the final rule. Therefore, we are revising the language in
paragraph (a) to indicate that within 1 year after completion of the
State's next quadrennial review of its child support guidelines, that
commences more than 1 year after publication of the final rule, in
accordance with 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 order amounts within the State that meet the requirements in
this section.
2. Comment: A few commenters recommended a faster implementation
date than what was proposed in the
[[Page 93516]]
NPRM. They recommended that the new revisions be effective ``within 1
year after publication of the final rule.''
Response: As a result of the final rule, States must review, and if
necessary, revise their guidelines. A 1-year implementation date would
be unrealistic since it would be a time-consuming and costly process
for States to review their guidelines outside of the required 4-year
review cycle. We believe that the revisions will require the States to
do extensive research and analysis of case data, economic factors, and
other factors in developing guidelines that meet the revised Federal
requirements.
3. Comment: A few other commenters recommended that States would
need two quadrennial reviews to implement the final rule. They thought
that one quadrennial review period was not sufficient time to obtain
new data, complete new economic studies based on that data, build new
guidelines tables, and enact the required legislation to approve the
new tables.
Response: A two-quadrennial review period, or 8 years, is an
unreasonable length of time to delay implementation of these new
revisions. States should implement the guidelines, review and
adjustment, and civil contempt provisions within a reasonable period of
time to ensure that child support orders do not exceed a noncustodial
parent's ability to pay. Most commenters either agreed that conforming
guidelines during the next quadrennial review was sufficient time, or
commented that the implementation period should be shorter.
Availability of the Guidelines [Sec. 302.56(b)]
1. Comment: We had many commenters suggest that the guidelines be
made available to all persons in the State who request them, rather
than only to the persons in the State whose duty it is to set child
support award amounts. They thought that the guidelines are a matter of
enormous public and individual import and therefore must be freely
available to all who request them.
Response: We agree that child support guidelines should be readily
available to all persons in the State through such means as posting on
their Web sites, child support brochures, or some other method for
disseminating educational materials. In fact, most States already make
their guidelines available on their Web sites. We also agree that
principles of government transparency would indicate that the
guidelines should be available to the general public since the
guidelines impact citizen rights and responsibilities. As a result, we
have removed the phrase ``whose duty it is to set child support award
amounts'' from the end of the sentence in Sec. 302.56(b).
Ability To Pay [Sec. 302.56(c)(1)]
1. Comment: Many commenters agreed that guidelines should result in
child support orders based on the noncustodial parent's ability to pay.
One commenter indicated that setting right-sized orders is as much an
art as it is a science. Each State has its own set of constituencies
and circumstances that influence how guidelines are set. The commenters
also thought that the court should have the ability to look at all
factors, including the lifestyle of the noncustodial parent, testimony
provided in court, previous work history, education and training, and
any information provided by the custodial parent. They thought the
proposed regulation limited the discretion of the court, and could have
a negative impact on the program.
Response: The ``ability to pay'' standard for setting orders has
been Federal policy for almost 25 years,\17\ and many existing State
guidelines explicitly incorporate the ``ability to pay'' standard.
Consistent with comments, we have redrafted the rule to codify this
standard. We also added language that States consider the noncustodial
parent's specific circumstances in making an ability to pay
determination when evidence of income is limited, and added language
more clearly articulating the basis upon which States may use imputed
income to calculate an order. These revisions are discussed in more
detail below.
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\17\ AT-93-04, available at: http://www.acf.hhs.gov/programs/css/resource/presumptive-guidelines-establishment-support-unreimbursed-assistance and PIQ-00-03, available at: http://www.acf.hhs.gov/programs/css/resource/state-iv-d-program-flexibility-low-income-obligors.
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Over time, we have observed a trend among some States to reduce
their case investigation efforts and to impose high standard minimum
orders without developing any evidence or factual basis for the child
support ordered amount. Our rule is designed to address the concern
that in some jurisdictions, orders for the lowest income noncustodial
parents are not set based upon a factual inquiry into the noncustodial
parent's income and ability to pay, but instead are routinely set based
upon a standardized amount well above the means of those parents to pay
it. The Federal child support guidelines statute requires guidelines
that result in ``appropriate child support award'' and is based on the
fundamental principle that each child support order should take into
consideration the noncustodial parent's ability to pay.\18\ Therefore,
we have codified this longstanding policy guidance as the leading
guidelines principle in Sec. 302.56(c)(1).
---------------------------------------------------------------------------
\18\ Section 467(a) of the Social Security Act, 42 U.S.C.
667(a).
---------------------------------------------------------------------------
Research suggests that setting an accurate child support order
based upon the noncustodial parent's ability to pay improves the
chances that the noncustodial parent will continue to pay over
time.\19\ Compliance with support orders is strongly linked to actual
income and ability to pay.\20\ Many low-income noncustodial parents do
not meet their child support obligations because they do not earn
enough to pay what is ordered.\21\ Orders set beyond a noncustodial
parents' ability to pay can result in a number of deleterious effects,
including unmanageable debt, reduced low-wage employment, increased
underground activities, crime, incarceration, recidivism, and reduced
contact with their children.\22\ Research consistently finds that
orders set too high are associated with less consistent payments, lower
compliance, and increased child support debt.\23\ In fact,
[[Page 93517]]
studies find that orders set above 15 to 20 percent of a noncustodial
parent's income increases the likelihood that the noncustodial parent
will pay less support and pay less consistently, resulting in increased
arrears.\24\ The conclusion from this research is that families do not
benefit from orders that noncustodial parents cannot comply with
because of their limited income. High orders do not translate to higher
payments when the noncustodial parent has limited income.\25\
---------------------------------------------------------------------------
\19\ HHS Office of Inspector General, 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\ Meyer, Daniel, R. Yoonsook Ha, and Mei[hyphen]Chen Hu, ``Do
High Child Support Orders Discourage Child Support Payments?''
Social Service Review, (2008), 82(1): 93-118; Huang, Chien-Chung,
Ronald B. Mincy, and Irwin Garfinkel, ``Child Support Obligations
and Low-Income Fathers'' Journal of Marriage and Family, (2005),
67(5): 1213-1225.
\21\ Kathryn Edin and Timothy J. Nelson, Doing the Best I Can:
Fatherhood in the Inner City, University of California Press,
(2013); Pearson, Jessica, Nancy Thoennes, Lanae Davis, Jane C.
Venohr, David A. Price, and Tracy Griffith, 2003, OCSE responsible
fatherhood programs: Client characteristics and program outcomes,
available at: http://www.frpn.org/file/61/download?token=CNMvAIQn.
\22\ Pamela Holcomb, Kathryn Edin, Jeffrey Max, Alford Young,
Jr., Angela Valdovinos D'Angelo, Daniel Friend, Elizabeth Clary,
Waldo E. Johnson, Jr. (2015), In Their Own Voices: The Hopes and
Struggles of Responsible Fatherhood Program Participants in the
Parents and Children Together Evaluation. Report submitted to the
Office of Planning, Research, and Evaluation. OPRE Report #2015-67
available at: http://www.acf.hhs.gov/programs/opre/resource/in-their-voices-hopes-struggles-responsible-fatherhood-parents-children-evaluation; and Maureen Waller and Robert Plotnick. (2001).
``Effective child support policy for low-income families: Evidence
from street level research'' Journal of Policy Analysis and
Management 20(1): 89-110.
\23\ Meyer, Daniel, R. Yoonsook Ha, and Mei[hyphen]Chen Hu
(2008) ``Do High Child Support Orders Discourage Child Support
Payments?'' Social Service Review, 82(1): 93-118; Huang, Chien-
Chung, Ronald B. Mincy, and Irwin Garfinkel. (2005) ``Child Support
Obligations and Low-Income Fathers'' Journal of Marriage and Family,
67(5): 1213-1225; Carl Formoso, Determining the Composition and
Collectibility of Child Support Arrearages: Final Report, Volume 1:
The Longitudinal Analysis, Washington State Division of Child
Support (2003), available at: https://www.dshs.wa.gov/sites/default/files/ESA/dcs/documents/cvol1prn.pdf; Mark Takayesu, How Do Child
Support Order Amounts Affect Payments and Compliance? Orange County,
CA Department of Child Support Services, (2011), available at:
http://ywcss.com/sites/default/files/pdf-resource/how_do_child_support_orders_affect_payments_and_compliance.pdf.
\24\ HHS Office of Inspector General, 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; Carl Formoso, Determining the Composition and
Collectibility of Child Support Arrearages: Final Report, Volume 1:
The Longitudinal Analysis, Washington State Division of Child
Support (2003), available at: https://www.dshs.wa.gov/sites/default/files/ESA/dcs/documents/cvol1prn.pdf; and Mark Takayesu, How Do
Child Support Order Amounts Affect Payments and Compliance? Orange
County, CA Department of Child Support Services, (2011), available
at: http://ywcss.com/sites/default/files/pdf-resource/how_do_child_support_orders_affect_payments_and_compliance.pdf.
\25\ National Women's Law Center and the Center on Fathers,
Families, and Public Policy, Dollars and Sense: Improving the
Determination of Child Support Obligations for Low-Income Mothers,
Fathers, and Children (2002), available at: http://www.nwlc.org/sites/default/files/pdfs/CommonGroundDollarsandSense.pdf.
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The final rule added paragraph (c)(1) to provide that the child
support order is based on the noncustodial parent's earnings, income,
and other evidence of ability to pay. Paragraph (c)(1)(iii) requires
consideration of the specific circumstances of the noncustodial parent
when imputing income. This will be discussed in further detail later in
this section.
2. Comment: One commenter recommended that a sentence be added to
the regulation stating that the receipt of Supplemental Security Income
(SSI) or combined SSI and Social Security Disability Income (SSDI)
benefits establishes a prima facie case that the individual does not
have the ability to pay child support unless the presumption of
insufficient means and inability to work is successfully rebutted by
submission of opposing evidence.
Response: When the noncustodial parent is receiving SSI or
concurrent SSI and SSDI benefits, the State has flexibility on whether
and how to address the receipt of such benefits in its guidelines. We
encourage States to consider receipt of SSI and concurrent SSDI
benefits as a part of the circumstances in the case that they will
consider in ensuring that support orders are based on ``ability to
pay.'' In order to receive these benefits, an individual must have a
significant disability that prevents or limits work, and in the case of
SSI (including concurrent receipt), eligibility is also based on an
individual's basic needs. Regardless of whether the State considers SSI
and concurrent SSDI benefits as income for purposes of order
establishment, it may not garnish these benefits in accordance with
Sec. 307.11.
All Income [Sec. 302.56(c)(1)(i)]
1. Comment: Several commenters were opposed to our proposed
revisions in Sec. 302.56(c)(1), which has been redesignated as
paragraph (c)(1)(i) because they questioned the difference between
``actual'' earnings and income and ``all'' earnings and income. They
thought that ``actual'' income was too restrictive. They were concerned
that the NPRM would introduce uncertainty into State guidelines
definitions of ``income'' if the provision requiring ``all income'' to
be considered were eliminated. One commenter asked whether replacing
the term ``all'' with the term ``actual'' prevented States from
considering depreciation as an adjustment to a parent's income. The
commenter thought that the revision would make it difficult to
determine the income of contractors and the self-employed. Other
commenters thought that our proposed revision only allowed
consideration of the use of the noncustodial parent's ``actual'' income
in calculating child support obligations, in other words, the State
could never use imputed income, but would be limited to actual income
in every factual situation, despite evidence of ability to pay.
Response: Based on the comments that we received on proposed
paragraph (c)(1), redesignated as paragraph (c)(1)(i), we did not make
the proposed revision, but instead codified the longstanding guidelines
standard that orders be based upon ``earnings, income, and other
evidence of ability to pay.'' We also retained the provision in the
former rule to require consideration of ``all earnings and income'' in
paragraph (c)(1). To be clear, the guidelines must provide that orders
must be based upon evidence of the noncustodial parent's earnings and
income and other evidence of ability to pay in the specific case. In
addition, the guidelines must provide that if income is imputed, the
amount must reflect the specific circumstances of the noncustodial
parent to the extent known, and may not order a standard amount imposed
in lieu of fact-gathering in the specific case. The expectation is that
in IV-D cases, the IV-D agency will investigate each case sufficiently
to base orders on evidence of the noncustodial parent's ability to pay.
Orders issued in IV-D cases should not reflect a lower threshold of
evidence than applied in private cases represented by legal counsel.
2. Comment: One commenter requested clarification regarding what
constitutes ``actual'' earnings and income in the proposed paragraph
(c)(1). For example, would it be permissible under the proposed
regulatory revisions for a noncustodial parent to allocate a greater
percentage of his/her earnings as voluntary contributions to a deferred
compensation plan and thereby minimize ``actual'' earnings? Many
commenters suggested that the Federal government define income as the
Federal Adjusted Gross Income, while others suggested that we consider
the household income of the custodial parent. Other commenters
suggested that Smith-Ostler orders \26\ be eliminated or better reflect
the tax consequences of the payor. One commenter also suggested that
the noncustodial parent's ability to pay be calculated after mandatory
deductions, such as taxes. Another commenter was concerned about how
actual earnings and income would be determined and what benefits,
resources, and sources of income would be considered for the purpose of
this provision.
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\26\ Sometimes one or both parents have income that varies,
fluctuates, or is otherwise unpredictable. When calculating child
support, the court often uses a ``Smith-Ostler order'' to account
for commissions, bonuses, or overtime income. In these cases, the
court will set an amount for child support and issue a Smith-Ostler
order to account for overtime and bonus income. The Smith-Ostler
order will set a fixed percentage of all bonus income to be paid as
additional child support.
---------------------------------------------------------------------------
Response: In response to comments, the final rule requires States
to consider all earnings and income for the noncustodial parent under
paragraph (c)(1)(i), subject to the requirement that orders be based on
earnings, income, and other evidence of ability to pay. We are
establishing only minimum components for child support guidelines.
States have the discretion and responsibility to define earnings and
income, for example in the manner proposed by commenters, since they
are in a better position to evaluate the economic factors within their
States and
[[Page 93518]]
have broad discretion to set guidelines policies.
3. Comment: One commenter suggested that guidelines be required to
take into consideration the assets of the noncustodial parent, in
addition to earnings and income.
Response: We have decided to retain the former language in the rule
that ``all'' earnings and income be taken into consideration in Sec.
302.56(c)(1)(i). This language has been extensively interpreted and
applied in every State for over two decades. Retaining the term ``all
income'' allows States to consider depreciation, deferred income, or
other financial mechanisms used by self-employed noncustodial parents
to adjust their actual income. In addition, we added ``assets'' to the
list of specific circumstances in paragraph (c)(1)(iii) that the State
must consider when the State guidelines authorize imputation of income.
States have discretion to determine whether to add assets or define
which assets should be considered in their child support guidelines as
a basis for determining child support amounts.
4. Comment: Many commenters proposed that actual income and
earnings should be considered for both parents. In support, they
pointed out that the 1988 Advisory Panel on Child Support Guidelines
(on which the original Sec. 302.56 language was based) recommended
that: ``Both parents should share legal responsibility for support of
their children, with the economic responsibility divided between the
parents in proportion to their income.'' This recommendation was never
incorporated into the Federal regulations at Sec. 302.56. The
commenters believed that now was the time to include a requirement to
consider the income and earnings of both parents.
Response: We agree that both noncustodial and custodial parents
have a responsibility to support their children. However, the NPRM did
not propose that States revise this aspect of their child support
guidelines, which impacts the particular guidelines model a State has
adopted. Some States do not explicitly take the custodial parent's
income into account in the guidelines model they have adopted. The NPRM
did not address State guidelines models. Therefore, the adoption of a
guidelines model continues to be a matter of State determination.
However, in Sec. 302.56(c)(1)(i) through (iii), we have added a
parenthetical to indicate that at the State's discretion, the State may
consider the circumstances of the custodial parent if it is required or
applicable in their guidelines computation. We encourage States that
use the income shares model for guidelines, which considers the
custodial parent's earnings and income, to also consider it for
applying Sec. 302.56(c)(1)(i) through (iii).
5. Comment: One commenter indicated that we should require States
to have laws that require the parties (who have the best access to
their own income information) to provide financial data so as to ensure
accurate and appropriate orders.
Response: We have revised Sec. 303.4, Establishment of support
obligations, to require State IV-D agencies to investigate earnings and
income information through a variety of sources, for example, by
expanding data sources and implementing the use of parent
questionnaires, ``appear and disclose'' procedures, and case
conferencing. Often, better investigations would enable States to
obtain more accurate information needed in establishing and modifying
child support orders. We know that many States already have procedures
in place to obtain financial information from the parents. In fact, in
cases where the noncustodial parent does not receive a salary or wages,
income, assets, and standard of living information can often be
obtained directly through contact with both parents. State law may
require the parties to provide this information to the child support
agency.
6. Comment: One commenter stated that instead of changing the laws
on how courts establish child support, the National Directory of New
Hires (NDNH) should provide more timely and accurate information. The
commenter recommended its expansion to include data on Form 1099
payments as well as assets and income sources. The commenter also
stressed the need for States to enforce laws requiring the timely and
complete reporting of information to the State Directory of New Hires
(SDNH). The commenter noted that consistent receipt of this information
would assist IV-D agencies in establishing support based on ``actual''
income.
Response: We appreciate the suggested improvements; however,
expanding the NDNH to include Form 1099 payments requires statutory
changes by Congress. Regarding the SDNH, section 453A of the Social
Security Act authorizes States to impose civil money penalties on
noncomplying employers. Specifically, a State has the option to set a
State civil money penalty which shall not exceed (1) $25 per failure to
meet the requirements of this section with respect to a newly hired
employee; or (2) $500 if, under State law, the failure is the result of
a conspiracy between the employer and the employee to not supply the
required report or to supply a false or incomplete report.
Subsistence Needs of the Noncustodial Parents [Sec. 302.56(c)(1)(ii)]
1. Comment: There were many suggestions related to the requirement
that State guidelines ``[t]ake into consideration the noncustodial
parent's subsistence needs'' in proposed Sec. 302.56(c)(4), which was
redesignated as (c)(1)(ii) in the final rule. Many commenters requested
more guidance on subsistence needs or wanted OCSE to develop an
operational definition. Others asked what the State should do when the
noncustodial parent is making less than the subsistence needs. Many
commenters thought that the States need discretion to carefully weigh
and balance the considerations of low-income obligors and the needs of
the children and the custodial parents' households. Other commenters
requested that OCSE also consider the subsistence needs of the
custodial parent. Some were opposed to the proposed revision because
they did not think that Federal regulations were necessary since many
States already have low-income formulas. However, many more commenters
indicated that we need stronger protections to recognize the
subsistence needs of very poor noncustodial parents.
Response: We considered these comments in revising the NPRM. In the
final rule in paragraph (c)(1)(ii), we require that child support
guidelines must ``[t]ake into consideration the basic subsistence needs
of the noncustodial parent (and at the State's discretion, the
custodial parent and the children) who has a limited ability to pay by
incorporating a low-income adjustment, such as a self-support reserve
or some other method determined by the State.'' A low-income adjustment
is the amount of money a parent owing support needs to support him or
herself at a minimum level. It is intended to ensure that a low-income
parent can meet his or her own basic needs as well as permit continued
employment. A low-income adjustment is a generic term. A self-support
reserve is an example of a low-income adjustment that is commonly used
by the States.
The revision allows States' flexibility to determine the best
approach to adjusting their guidelines to take into consideration the
basic subsistence needs of low-income noncustodial parents. All but
five States have already incorporated such low-income adjustments such
as self-support reserves into their child support
[[Page 93519]]
guidelines.\27\ We encourage States to continue to review their
policies affecting low-income parents during each quadrennial review to
assure that the policies are working as intended.
---------------------------------------------------------------------------
\27\ Venohr, Jane, ``Child Support Guidelines and Guidelines
Reviews: State Differences and Common Issues,'' Family Law
Quarterly, 47(3), Fall 2013, pages 327-352, available at: http://static1.squarespace.com/static/5154a075e4b08f050dc20996/t/54e34dd2e4b04c0eab578456/1424182738603/3fall13_venohr.pdf.
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Our goal is to establish and enforce orders that actually produce
payments for children. Both parents are expected to put their children
first and to take the necessary steps to support them. However, if the
noncustodial parent cannot support his or her own basic subsistence
needs, it is highly unlikely that an order that ignores the need for
basic self-support will actually result in sustainable payments. One of
the unintended, but pernicious, consequences of orders that are not
based on ability to pay is that some noncustodial parents will exit low
wage employment and either avoid the system entirely or turn to the
drug trade or other illegal activities to pay support obligations and
contempt purge payments.\28\ It is not in children's best interests and
counterproductive to have their parents engage in a cycle of
nonpayment, illegal income generation, and incarceration.
---------------------------------------------------------------------------
\28\ Mincy, Ronald et al, Failing Our Fathers: Confronting the
Crisis of Economically Vulnerable Nonresident Fathers, Oxford
University Press, 2014; Kotloff, Lauren, J., Leaving the Street:
Young Fathers Move From Hustling to Legitimate Work, Public/Private
Ventures (2005), available at https://hmrf.acf.hhs.gov/resources/fathers-at-work-initiative-reports/leaving-the-street-young-fathers-move-from-hustling-to-legitimate-work/; and Rich, Lauren, M.,
``Regular and Irregular Earnings of Unwed Fathers: Implications for
Child Support Practices.'' Children and Youth Services Review,
April-May 2001, 23(\4/5\): 353-376, which is available at: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwiq2fW_i8nKAhXEtIMKHabpD5gQFggmMAE&url=http%3A%2F%2Fwww.sciencedirect.com%2Fscience%2Farticle%2Fpii%2FS0190740901001396%2Fpdf%3Fmd5%3D7f4e344844155112ff3e1b55528fbde6%26pid%3D1-s2.0-S0190740901001396-main.pdf&usg=AFQjCNHlcgoC8Zj_abOHen6w2LXDgEtMYA&sig2=LOBYbUWWp2UgHBqV5BD-Og&bvm=bv.112766941,d.dmo.
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2. Comment: A few commenters indicated that they thought State laws
must be flexible enough to address both low-income situations and those
situations where noncustodial parents use creative means to avoid their
responsibility.
Response: We agree with these comments and have revised the child
support guidelines requirements to more clearly reflect some of the
commenters' concerns. The order establishment process must be able to
hold noncustodial parents accountable when they have the means to pay
support but attempt to withhold their resources from their children.
The challenge is distinguishing between cases in which the noncustodial
parent has the means to pay and those in which the noncustodial parent
is unable to pay much. More contact with both parents and investigation
into the facts will help the child support agency learn more about the
noncustodial parent's specific circumstances. Custodial parents can be
a particularly good source of information. Imputation should not serve
as a substitute for fact-gathering.
3. Comment: Several commenters suggested that we define subsistence
needs or low-income in this rule.
Response: OCSE does not agree with this suggestion. States should
use their discretion and flexibility to define these terms based on the
economic and demographic factors in their State.
Imputing Income [Sec. 302.56(c)(1)(iii)]
1. Comment: Many commenters agreed that child support guidelines
should reflect the basic statutory principle that child support orders
are based on the noncustodial parent's ability to pay. However, many
commenters opposed this aspect of the NPRM because they believed we
were eliminating the practice of imputing income to the noncustodial
parent to establish orders. Although our NPRM preamble indicated
otherwise, several commenters thought that imputed income would only be
allowed when a noncustodial parent's standard of living was
inconsistent with reported income. Commenters articulated three types
of circumstances where they believed imputation is appropriate and
grounded in case law: (1) When a parent is voluntarily unemployed, (2)
when there is a discrepancy between reported earnings and standard of
living, and (3) when the noncustodial parent defaults, refusing to show
up or provide financial information to the child support agency. Some
commenters thought that the courts should be able to evaluate the
circumstances of the case when imputing income for the noncustodial
parent.
One commenter referenced the National Child Support Enforcement
Association policy statement, issued on January 30, 2013, that
indicated: ``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.''
Response: There was considerable misunderstanding about the scope
and intent on this aspect of the NPRM. Our intent was to require a
stronger focus on fact-gathering and setting orders based on evidence
of the noncustodial parent's actual income and ability to pay, rather
than based on standard imputed (presumed) \29\ amounts applied across
the board. However, we also intended to recognize certain established
grounds for imputation when evidentiary gaps exist, including voluntary
unemployment and discrepancies between reported income and standard of
living.
---------------------------------------------------------------------------
\29\ OCSE views presumed income and imputed income similarly
since they are both based on fictional income. Therefore, we use
these terms interchangeably.
---------------------------------------------------------------------------
Considering commenters' concerns and suggested revisions, we made
significant revisions in paragraph (c) to clearly articulate the
longstanding requirement that State guidelines must provide that child
support orders are based on the noncustodial parent's earnings, income,
and other evidence of ability to pay. We have also added in paragraph
(c)(1)(iii) providing that when imputation of income is authorized, the
guidelines must take into consideration the specific circumstances of
the noncustodial parent (and at the State's discretion, the custodial
parent) to the extent known.
Presently, some State guidelines allow income to be imputed without
evidence that the noncustodial parent has or can earn a standard amount
of income. Although the original use of imputation was to fill specific
evidentiary gaps in a particular case, over time we have observed a
trend among some States of reducing their case investigation efforts
and imposing high standard minimum child support orders across-the-
board in low-income IV-D cases, setting orders without any evidence of
ability to pay.\30\
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\30\ According to a report recently released by the National
Center for State Courts on civil litigation generally (and not
specifically child support litigation), recent studies have found
widespread instances of judgments entered in high-volume, civil
cases in which the defendant did not receive notice of the complaint
or the plaintiff failed to demonstrate an adequate basis for relief
sought. The report ``strongly endorsed'' by State chief justices, in
July 2016, recommends that courts must implement systems to ensure
that the entry of final judgments complies with basic procedural
requirements for. . .sufficiency of documentation supporting the
relief sought. For further information, see Call to Action:
Achieving Civil Justice for All, Recommendations to the Conference
of Chief Justices by the Civil Justice Improvements Committee, pp.
33-34, available at: https://www.ncsc.org/~/media/Microsites/Files/
Civil-Justice/NCSC-CJI-Report-Web.ashx.
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Many States do take steps to determine the factual circumstances in
a particular case and build an
[[Page 93520]]
evidentiary basis for the order, imputing income on a case-by-case
basis when there is an evidentiary gap. However, some jurisdictions set
high minimum orders across the board in low-income cases, regardless of
available evidence of the noncustodial parent's specific circumstances.
Others do so, except under a very narrow set of circumstances, for
example, a demonstrated disability. In fact, some States impute
standard amounts of income even when there is evidence of involuntary
unemployment, part-time employment, and low earnings.
Overuse of imputed income frequently results in IV-D orders that
are not based on a realistic or fair determination of ability to pay,
leading to unpaid support, uncollectible debt, reduced work effort, and
underground employment. Because such orders are not based on the
noncustodial parent's ability to pay, as required by Federal guidelines
law, they typically do not yield consistent payments to children.
While States have discretion to determine when imputation of income
is appropriate and allowed, section 467 of the Act indicates that ``a
written finding or specific finding that the application of the
guidelines would be unjust or inappropriate in a particular case, as
determined under criteria established by the State, shall be sufficient
to rebut the presumption in that case.'' Thus, we encourage States to
establish deviation criteria when to impute income and document the
deviation in a finding on the record that is rebuttable. Many, but not
all, States currently use deviation criteria and make a rebuttable
finding on the record when they impute income as the basis for an order
in a particular case. Fictional income should not be imputed simply
because the noncustodial parent is low-income, but instead only used in
limited circumstances when the facts of the case justify it.
We revised Sec. 302.56(c)(1) to clarify that the child support
guidelines established under paragraph (a) must provide that the child
support order is based on the noncustodial parent's earnings, income,
and other evidence of ability to pay. The guidelines must take into
consideration all earnings and income, the basic subsistence needs of
the noncustodial parent who has a limited ability to pay, and if income
is being imputed, the specific circumstances of the noncustodial parent
(and at the State's discretion, the custodial parent) to the extent
known, including such factors as the noncustodial parent's assets,
residence, employment and earnings history, job skills, educational
attainment, literacy, age, health, criminal record and other employment
barriers, and record of seeking work, as well as the local job market,
the availability of employers willing to hire the noncustodial parent,
prevailing earnings level in the local community, and other relevant
background factors in the case.
This approach emphasizes the expectation that support orders will
be based upon evidence to the extent available, while recognizing that
in limited circumstances, income imputation allows the decision-maker
to address evidentiary gaps and move forward to set an order. While we
recognize that most State IV-D agencies have limited resources, case
investigation to develop case-specific evidence is a basic program
responsibility. The revised final rule is closely aligned with many of
the comments we received. Imputed or default orders should occur only
in limited circumstances.\31\ We also revised paragraph (c)(1)(iii) to
address concerns about the need for State guidelines to consider the
specific circumstances of the noncustodial parent when imputing income.
---------------------------------------------------------------------------
\31\ 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.
---------------------------------------------------------------------------
2. Comment: Most commenters were concerned that the proposed
revisions in Sec. 302.56(c)(4), which has been redesignated and
revised as paragraph (c)(1), related to exceptions to the ``actual''
income provisions were too vague, restrictive, and did not sufficiently
provide for a broad range of circumstances where it may be appropriate
to impute income, such as when the noncustodial parent is working in
the underground economy or failing to provide sufficient evidence to
the court. Many commenters were concerned that the NPRM curtailed the
ability of States to impute income to ensure support for children. One
commenter supported reducing the use of default orders; however, the
commenter stated that default orders continue to be necessary when the
noncustodial parent refuses to appear and participate, despite multiple
opportunities provided by the court and the IV-D agency. Many
commenters further indicated that while the NPRM did not expressly
prohibit default orders, there appeared to be no ability within the
framework of the rule to impute income based on other types of
evidence--such as the noncustodial parent's past income, employment
history, and/or employment available in the local community. They also
read the NPRM to mean that if the IV-D agency could not obtain current
income information or evidence of current lifestyle, then the NPRM
would prohibit an entry of a support order altogether. These commenters
stated that such a result could give parents with reported income an
incentive to intentionally end employment after being notified of the
support proceedings and refuse to appear in court in order to force a
zero dollar order. They considered this a perverse incentive to avoid
support that was not in the best interest of the child and the family.
While many commenters were in favor of right-sized orders, they
believed the proposed language was too limiting to allow setting a fair
order in many circumstances.
Response: As we have previously discussed in response to comments,
it was not OCSE's intention in the NPRM to limit imputation of income
only to situations where there is evidence that the noncustodial
parent's standard of living is inconsistent with reported income. The
State has the discretion to determine when it is appropriate to impute
income consistent with guidelines requirements. Therefore, we revised
the proposed language in Sec. 302.56(c)(1) to clearly indicate that a
child support order must be based on the noncustodial parent's ability
to pay using evidence of the parent's earnings, income, and other
evidence of ability to pay whenever available. We have also added Sec.
302.56(c)(1)(iii) to indicate that if imputation is authorized in the
State's guidelines, the State's guidelines must require the State to
consider evidence of the noncustodial parent's specific circumstances
in determining the amount of income that may be imputed, including such
factors as the noncustodial parent's assets, residence, employment and
earnings history, job skills, educational attainment, literacy, age,
health, criminal record and other employment barriers, and record of
seeking work, as well as the local job market, the availability of
employers willing to hire the noncustodial parent, prevailing earnings
level in the local community, and other relevant background factors.
If the State IV-D agency has no evidence of earnings and income or
insufficient evidence to use as the measure of the noncustodial
parent's ability to pay, then we have added in Sec. 303.4(b)(3) that
the State's IV-D agency's recommended support obligation amount should
be based on available information about the specific circumstances of
the noncustodial parent, including such factors as those listed in
Sec. 302.56(c)(1)(iii). It is the IV-
[[Page 93521]]
D agency's responsibility to conduct an investigation, including
contact with the custodial parent to seek information. At a minimum,
child support agencies generally will know the noncustodial parent's
address.
Imputed or default orders based on income imputation are disfavored
and should only occur on a limited basis. Imputation does not by any
means ensure support payments for children. In fact, an order based
upon imputed income that is beyond the noncustodial parent's ability to
pay typically results in more unpaid support and other unintended
consequences that do not benefit children.\32\ It is critical for the
integrity of the order-setting process that IV-D agencies put resources
into case-specific investigations and contacting both parents in order
to gather information regarding earnings, income, or other specific
circumstances of the noncustodial parent when evidence of earnings and
income is nonexistent or insufficient.
---------------------------------------------------------------------------
\32\ Cammet, Ann, ``Deadbeats, Deadbrokes, and Prisoners,''
Georgetown Journal on Poverty Law & Policy, 18(2): 127-168, Spring,
2011, which is available at: http://ywcss.com/sites/default/files/u258/deadbeats_deadbrokers_and_prisoners_university_of_las_vegas.pdf;
Brito, Tonya, ``Fathers Behind Bars: Rethinking Child Support Policy
Toward Low-Income Noncustodial Fathers and Their Families, The
Journal of Gender, Race & Justice, 15:617-673, Spring 2012, which is
available at: http://racism.org/index.php?option=com_content&view=article&id=1514:fathersbehindbars&catid=53&Itemid=176&showall=1&limitstart=; and HHS Office of
Inspector General, 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.
---------------------------------------------------------------------------
3. Comment: One commenter supported imputing income, when
appropriate in an individual case, if there was evidence showing that
either parent was employed voluntarily less than 30 hours of week.
Moreover, if the noncustodial parent was gainfully employed for at
least 30 hours per week, this commenter believed that no income should
be imputed to the noncustodial parent if the custodial parent was
working voluntarily less than 30 hours per week. Finally, the commenter
believed that exceptions should be allowable if the custodial parent
had children with special medical or educational needs or children less
than 2 years of age.
Response: We do not agree that these specific suggestions should be
incorporated into Federal rules. The commenter suggests a generic ``30
hour'' rule imposed without a case-by-case review of the specific
circumstances of the noncustodial parent, evidence of the voluntariness
of unemployment or underemployment, and a case-specific determination
of the noncustodial parent's ability to pay. Also, as discussed
previously, States may determine when imputation of income is allowed,
so long as the resulting order considers the factors listed in Sec.
302.56(c)(iii) and reflects a noncustodial parent's ability to pay it.
4. Comment: One commenter was opposed to the proposed Sec.
302.56(c)(4), which has been redesignated and revised as paragraph
(c)(1), because the language would apply to both IV-D and non-IV-D
cases, resulting in imposing substantial revisions on the private bar
and judiciary without justification. Another commenter, noting that
guidelines are used not only by the IV-D agency, but also by the entire
private bar and pro se litigants, was concerned that most private
attorneys would not have access to income reports for the parents.
Another commenter indicated that many of the proposed requirements
contained in the NPRM would not receive full support by non-IV-D
representatives, particularly where the new requirements would have the
effect of reducing and/or limiting the flexibility of attorneys,
parties, and the judicial authority in non-IV-D matters. As an example,
the commenter stated that imposing limitations on imputing income would
affect all family cases and could be seen as a restriction on judicial
authority. Finally, another commenter believed that child support
guidelines have historically been a State issue with much flexibility,
as the guidelines impact both IV-D and non-IV-D cases.
Response: The final rule amends existing OCSE regulations
implementing Federal statutory requirements. State child support
guidelines were adopted pursuant to a title IV-D State plan requirement
and a condition of Federal funding, and specific guidelines
requirements derive from Federal law. Our rule is modeled on the best
practices currently implemented in a number of States to improve order
accuracy and basic fairness, and is based on OCSE's authority to set
standards to establish requirements for effective program operation
under section 452(a)(1) and State plan provision that the State will
comply with such requirements and standards under section 454(13) of
the Act. In promulgating these rules, our primary concern is that in
some jurisdictions, orders are not based on a factual determination of
a particular noncustodial parent's ability to pay, but instead are
based upon on standardized amounts that are routinely imputed to
indigent, typically unrepresented, noncustodial parents.\33\ Imputed
income is fictional income, and without an evidentiary foundation of
ability to pay, orders cannot be considered fair and accurate.
---------------------------------------------------------------------------
\33\ Elaine Sorensen, Liliana Sousa, and Simon Schaner,
Assessing Child Support Arrears in Nine Large States and the Nation
(2007), available at: https://aspe.hhs.gov/basic-report/assessing-child-support-arrears-nine-large-states-and-nation; Mark Takayesu,
How Do Child Support Order Amounts Affect Payments and Compliance?
Orange County, CA Department of Child Support Services, (2011),
available at: http://ywcss.com/sites/default/files/pdf-resource/how_do_child_support_orders_affect_payments_and_compliance.pdf; and
Passarella, Letitia Logan and Catherine E. Born, Imputed Income
Among Noncustodial Parents: Characteristics and Payment Outcomes,
University of Maryland School of Social Work (2014), available at:
http://www.familywelfare.umaryland.edu/cscaseloadspecialreports.htm.
---------------------------------------------------------------------------
Compared to IV-D cases, private cases are more likely to involve
legal counsel, and result in child support orders based on actual
income. When imputed income is used in private cases, it typically is
used in the way originally intended--to fill evidentiary gaps in
specific cases to support a reasonable inference of the noncustodial
parent's ability to pay in situations of voluntary unemployment or
discrepancies in reported income and standard of living. We point out
that private litigants are expected to support their position with
evidence. The majority of the NPRM comments, including comments from
courts and attorneys, support the direction of our rules.
To address the concerns related to the general applicability of
State guidelines, we moved the requirements specifically related to
State IV-D agencies under Sec. 303.4, Establishment of support
obligations, and those requirements related to all cases in the State
under Sec. 302.56, Guidelines for setting child support orders.
Although the NPRM did not include any revisions to Sec. 303.4, we
received numerous comments on IV-D agency responsibilities in
determining the noncustodial parent's income and imputation of income
when establishing child support orders pursuant to Sec. 303.4. Based
on these comments, we made revisions to Sec. 303.4 that result in a
more narrow application of the regulation. We revised Sec. 303.4(b) to
require IV-D agencies to use appropriate State statutes, procedures,
and legal processes in establishing the child support obligation and
assist the decision-maker in accordance with Sec. 302.56 of this
chapter, which must include, at a minimum:
(1) Taking reasonable steps to develop a sufficient factual basis
for the support obligation, through such means as investigations, case
conferencing, interviews with both parties, appear and
[[Page 93522]]
disclose procedures, parent questionnaires, testimony, and electronic
data sources;
(2) Gathering information regarding the earnings and income of the
noncustodial parent and, when earnings and income information is
unavailable or insufficient in a case, gathering available information
about the specific circumstances of the noncustodial parent, including
such factors as those listed under Sec. 302.56(c)(iii);
(3) Basing the support obligation or recommended support obligation
amount on the earnings and income of the noncustodial parent whenever
available. If earnings and income are unavailable or insufficient to
use as the measure of the noncustodial parent's ability to pay, then
the recommended support obligation amount should be based on available
information about the specific circumstances of the noncustodial
parent, including such factors as those listed in Sec. 302.56(c)(iii);
and
(4) Documenting the factual basis for the support obligation or
recommended support obligation in the case record.
IV-D agencies have a basic responsibility to take all necessary
steps to investigate the case and provide the court or administrative
authority information relating to the income, earnings, and other
specific circumstances of the noncustodial parent so that the decision-
maker has an evidentiary foundation for establishing an order amount
based on the noncustodial parent's ability to pay. These required steps
merely specify the standard case review procedures that many States
currently use to investigate and obtain income information for the
parties.
Since the beginning of the program, we have provided FFP to IV-D
agencies undertaking investigation activities involving the development
of evidence, and, when appropriate, bringing court actions for the
establishment and enforcement of support obligations (Sec.
304.20(b)(3)(i)), and determining the amount of the child support
obligation including developing the information needed for a financial
assessment (Sec. 304.20(b)(3)(ii)). However, over time, and as
resources have become more constrained, we have found that some
jurisdictions no longer put resources into case investigation, and
instead rely on standard presumptions and fictional income to set
orders.
It is critical that a IV-D agency conducts investigative work prior
to sending a case to the court since child support agencies have many
tools available to gather the information. There are many procedural
techniques and practices that help facilitate establishing an
appropriate child support order.\34\ Many States have implemented early
intervention, parental engagement, and information-gathering
techniques, and we encourage all States to implement these successful
practices.
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\34\ Setting Appropriate Child Support Orders: Practical
Techniques Used in Child Support Agencies and Judicial Systems in 14
States, Subcommittee Report, National Judicial-Child Support Task
Force, Avoiding Inappropriate Orders Subcommittee, August 2007.
---------------------------------------------------------------------------
The final rule revises regulations governing the State's guidelines
to focus on the fundamental principle that child support obligations
are based on the noncustodial parent's ability to pay. This principle
should be applied to both IV-D and non-IV-D cases in accordance with
the Federal guidelines statute. The revisions have been addressed
throughout this section.
5. Comment: One commenter supported requiring States to consult and
use all data sources available to determine income, such as quarterly
wage and new hire data before imputing income (such as imputing a full-
time minimum wage salary). Commenters also suggested that States be
required to have a methodology for imputing income and to record how
and why imputation was done, similar to the requirement that there be a
finding when an order deviates from the guideline amount. In this way,
imputation would not be prohibited, but would further OCSE's goal to
discourage routine use of imputation without sufficient investigation
or consideration of the facts in a particular case.
Response: As discussed previously, the final rule at Sec.
302.56(g) reflects these comments by providing a framework for
determining the amount of imputed income. A written or specific finding
on the record that application of the guidelines would result in an
inappropriate or unjust order is required to rebut the presumption that
the application of the guidelines results in the correct child support
amount. Findings that rebut the guidelines shall state the amount of
support that would have been required under the guidelines and include
a justification as to why the order varies from the guidelines.
Therefore, support obligations can deviate from guidelines, but the
decision-maker must state the reasons, on the record, that justify the
deviation and consider the factors listed in Sec. 302.56(c)(1)(iii).
Several States treat income imputation as a deviation from the
guidelines, with a finding on the record.
6. Comment: One commenter thought that there was conflict between
the proposed Sec. 302.56(c)(1) requiring that orders be based on
actual income and proposed paragraph (c)(4) requiring that any support
ordered amounts be based on available data related to earnings, income,
assets, or such testimony that income or assets are not consistent with
the noncustodial parent's current standard of living. This commenter
interpreted proposed paragraph (c)(1) as based on ``actual'' income
only, while proposed paragraph (c)(4) appeared to provide for income
imputation if evidence of ability to pay existed. The commenter noted
that the actual income requirement could be used to argue against
income imputation in cases where the parent was capable of earning
income but was voluntarily unemployed or underemployed or where there
was no evidence of income because the parent worked in the underground
economy. The commenter explained that economists estimate that the
underground economy amounts to $2 trillion. This volume and type of
income should not be overlooked in the guidelines calculation. The
commenter further indicated that evidence from a study conducted by
Mincy and Sorensen (1998) found that 34 to 41 percent of young
noncustodial fathers are not paying child support, but are actually
able to pay.\35\
---------------------------------------------------------------------------
\35\ Mincy, Ronald and Elaine J. Sorensen, ``Deadbeat and
Turnips in Child Support Reform,'' Journal of Policy Analysis and
Management, Vol. 17, No. 1 (Winter 1998), pp. 44-51.
---------------------------------------------------------------------------
Response: As we discussed under Comment/Response 1 in this
subsection, States have discretion to determine the criteria on when to
deviate from guidelines. Therefore, we have revised proposed paragraph
Sec. 302.56(c)(4), which is redesignated as paragraphs Sec.
302.56(c)(1)(ii) and (iii).
It is important to note that the referenced study examined all
young noncustodial fathers, not those with a child support order, and
is based on data that are over 25 years old and reflect very different
economic conditions than exist today. Studies that examine noncustodial
parents with an obligation to pay find much lower percentages of
obligors who do not pay and have an ability to pay.\36\
---------------------------------------------------------------------------
\36\ 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/basic-report/assessing-child-support-arrears-nine-large-states-and-nation.
---------------------------------------------------------------------------
7. Comment: One commenter indicated that about half of the States
have guidelines that provide for a floor when imputing income (e.g.,
income realized from full-time employment at
[[Page 93523]]
minimum wage). This commenter was concerned about the presumption that
a parent, at a minimum, is capable of working full-time (or nearly
full-time in some States) at the minimum wage while many low-income
parents cannot get a job or retain steady employment to realize full-
time employment. Therefore, the commenter recommended that we
``prohibit the presumption of a minimum amount of income to a parent in
excess of the parent's actual or potential income as verified or
ascertained using state-determined evidence of income that must include
income data from automated sources available to the IV-D agency in a
IV-D case unless evidence is presented that the parent is voluntarily
unemployed or underemployed and has the capacity to earn the minimum
amount of income presumed or more.''
Response: We considered this suggestion and revised the final rule
to clarify that child support orders must be based on the noncustodial
parent's earnings, income, and other evidence of ability to pay in
Sec. 302.56(c)(1). We revised the rule to indicate that if income is
imputed, the guidelines must provide that the order must be set based
on a consideration of the specific circumstances of the noncustodial
parent.
Section 303.4(b)(3) requires that if information about earnings and
income are not available, the amount of income imputed to the
noncustodial parent must be based on factors listed in
302.56(c)(1)(iii).
8. Comment: One commenter indicated that OCSE should avoid using
the term ``data'' when referring to ``income data'' since this is not a
term common to private family law attorneys. The Merriam-Webster
dictionary defines data as ``that is produced or stored by a
computer.'' However, the most common sources of income verification in
non-IV-D cases are tax returns and paystubs. According to the
commenter, it is arguable whether these sources are stored in a
computer.
Response: In the final rule, we avoided using the term ``data''
when referring to income and earnings.
9. Comment: One commenter stated that in most family law cases,
courts are requiring evidence beyond the testimony of the custodial
parent before it will impute income to a noncustodial parent and are
demanding documentary evidence of the noncustodial parent's income or
assets. The commenter believed that these requirements disadvantage
low-income litigants who do not have the means to prove that a
noncustodial parent has unreported employment (i.e., ``working under
the table'') or is voluntarily participating in an underground economy.
In these instances, the commenter noted, it is the child who is
deprived of his or her basic subsistence because the noncustodial
parent refuses to seek or obtain employment where his or her actual
income and resources can be ascertained.
Response: Taking this comment into consideration, we have revised
the Sec. 303.4 regulatory text, as discussed in Comment/Response 5 in
this subsection, to require the IV-D agency to take appropriate steps
in building the documentary evidence related to the case so that this
evidence can be used by the courts or administrative authorities in
establishing or modifying child support obligations based on the
noncustodial parent's ability to pay.
10. Comment: Several commenters had concerns about the proposed
language in Sec. 302.56(c)(4) related to ``testimony that income or
assets are not consistent with a noncustodial parent's current standard
of living.'' One commenter asked us to define ``testimony'' for those
agencies that use an administrative process rather than a judicial
process to establish and modify orders. This commenter thought that the
proposal would create a substantial burden of proof for child support
agencies. A few commenters thought using the term ``testimony'' implied
that if States wanted to impute income, they would have to take cases
to court if they could not locate any financial history for the
noncustodial parent. The commenters thought this would place an
additional burden on the court system and cause delays in getting cases
processed. For States that use an administrative process, commenters
stated that the requirement would cause delays in case processing as
well as place additional burdens on attorneys and judges. One commenter
asked how agencies would set child support orders in default cases when
there is neither evidence nor testimony from any source with regard to
parents' subsistence needs or actual income. The commenter noted that a
significant number of child support orders for very low-income families
are set by default, and felt that Federal regulations should provide
guidance to States for those situations. Several commenters suggested
using the term ``documentary evidence'' rather than ``testimony.''
Response: The use of ``testimony'' in the NPRM was intended to
illustrate one form of evidence, not to limit evidence to testimony. We
agree that most evidence will be documentary. In setting orders, States
always have at least one piece of information about a noncustodial
parent--they know where the noncustodial parent lives. Residence can
provide some insight about the noncustodial parent's standard of
living. In revising our proposed language for Sec. 302.56 and Sec.
303.4(b), we have used terms that are appropriate for both judicial and
administrative processes.
11. Comment: Several commenters expressed concerns that
substantially limiting the use of imputed income in guideline
calculations would cause delays in the establishment and modification
of child support orders.
Response: In redrafting the guidelines provision, we looked to
comments, existing State guidelines, and State best practices related
to investigation and order-setting. We agree that the final rule may
result in increased time to establish and modify a child support order,
but it will also result in more orders that are legitimately based on a
noncustodial parent's ability to pay, as required by Federal child
support guidelines law and policy. Support orders based on ability to
pay should result in better compliance rates and higher collections
rates, saving time and resources required to enforce orders and
resulting in actual payments to more children. One State told OCSE that
by doing more investigative work to develop the evidence, it has
experienced less conflict between the parents, fewer requests for
hearings, and less time spent on enforcement. As a result, staff has
more time to develop the documentary evidence needed to establish a
child support order based on the noncustodial parent's ability to pay.
12. Comment: Some commenters maintained that imputed income should
only be used as a last resort, when evidence suggests that the
noncustodial parent is voluntarily unemployed or underemployed, or when
the noncustodial parent's reported income or assets is inconsistent
with the parent's standard of living. One commenter specifically noted
that imputing income to a low-income, noncustodial parent who is acting
in good faith often leads to a child support order that is based on
unrealistic expectations and exceeds the noncustodial parent's ability
to pay. This commenter further requested that the State guidelines give
courts and administrative agencies the flexibility to use reliable,
circumstantial evidence to establish and modify child support orders
when traditional income information is not available and the
noncustodial parent is acting in bad faith. The commenter stated this
type of evidence does not lead to orders based on assumptions, but
rather to orders grounded on reasonable inference given
[[Page 93524]]
the evidence presented. This commenter believed that there should be no
automatic use of minimum wage or any other standardized metric to
impute income.
Response: We agree that imputed income should only be used as a
last resort, and that States need to exercise discretion on a case-by-
case basis in determining a low-income noncustodial parent's ability to
pay when evidence of earnings and income is not available. We encourage
States to take this into consideration in developing the criteria for
determining when to impute income.
13. Comment: One commenter indicated that overuse of imputing
income may be avoided by implementing other measures such as: Requiring
that the support obligation not reduce the noncustodial parent's income
below a subsistence level; requiring that all findings related to the
calculation and imputation of income be based on the facts in the court
record; requiring that all findings regarding the calculation or
imputation of income be written and subject to appellate review;
requiring that the court first consider all available direct evidence
of income, earnings, assets or state what steps have been made to
obtain such information before using direct or circumstantial proof of
income or ability to earn; expanding the admissibility of income
information from regular, reliable data sources (such as new hire and
quarterly wage reports); and requiring mandatory financial disclosure
in all cases with appropriate penalties for noncompliance.
Response: We have evaluated research and practice in this area and
have incorporated measures into our regulations to increase
investigation and establish evidence-based orders, rather than
routinely applying presumptions and imputing income. While State laws
establish the admissibility of evidence, this does not lessen the IV-D
agency's responsibility to conduct further investigation when evidence
of earnings and income is not available. We are also aware of several
States that mandate financial disclosure by parents with appropriate
penalties for noncompliance, a practice that is intended to increase
accurate order-setting and decrease overuse of imputation.
14. Comment: One commenter suggested that in cases where the
noncustodial parent has committed acts of domestic violence against the
custodial parent or the children resulting in incarceration or the
issuance of a protected order, the abuser should be subject to a
support order that reflects income imputed to an abuser.
Response: Under the rule, the court or administrative authority has
the discretion to consider the specific circumstances of the case.
However, in doing so, it is important to be clear that establishing,
modifying, or enforcing a child support order is not a form of
punishment for incarcerated noncustodial parents. ``The child support
system is not meant to serve a punitive purpose. Rather, the system is
an economic one, designed to measure the relative contribution each
parent should make--and is capable of making--to share fairly the
economic burdens of child rearing.'' \37\ Incarcerated parents have
been sentenced for the crime they committed and are repaying their debt
to society. Imputing income based upon the nature of the crime is
considered an adverse collateral consequence of incarceration that
imposes additional civil sanctions beyond the criminal sentence. Other
examples of collateral consequences include denial of employment,
housing, public benefits, student loans, and the right to vote. Such
collateral consequences undermine successful reentry and
rehabilitation. In 2011, the U.S. Attorney General wrote to every State
Attorney General asking them to assess their State statutes and
policies imposing collateral consequences to determine if any should be
eliminated.\38\
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\37\ Lambert v. Lambert, Ind. Sup. Ct. (2007).
\38\ White House Fact Sheet, Enhancing the Fairness and
Effectiveness of the Criminal Justice System (July 14, 2015),
available at: https://www.whitehouse.gov/the-press-office/2015/07/14/fact-sheet-enhancing-fairness-and-effectiveness-criminal-justice-system.
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15. Comment: One commenter thought that our proposed provision in
Sec. 302.56(c)(4) would restrict a State's ability to establish child
support orders when the noncustodial parent chose to avoid the legal
process. The commenter further explained that, based on his experience
in local child support operations, this provision would seriously
disadvantage a custodial parent in a case where the noncustodial
parent, despite being afforded due process, refused to participate in
the administrative or judicial process, including fully disclosing
income.
Response: The final rule does not indicate when States are allowed
to impute income; however, the final rule at Sec. 302.56(c)(1)(iii)
indicates that if imputation of income is allowed, the child support
order should be based on the specific circumstances of the noncustodial
parent.
16. Comment: One commenter stated that in one State, they assume
that a noncustodial parent has an ability to pay unless there is
information indicating otherwise, such as receipt of public assistance
benefits, receipt of SSI payments, or a physician's statement
indicating inability to work. The commenter stated that the proposed
regulation would reverse this assumption and instead would presume that
the noncustodial parent has no ability to pay unless data was available
related to the parent's actual earnings, income, or assets, or if there
was testimony that the noncustodial parent's income or assets were not
consistent with the noncustodial parent's standard of living.
Response: The amount of child support ordered should be based on
facts, not assumptions. However, when support orders are based on broad
(or general) assumptions and do not have a factual basis, they often do
not result in payments and the children do not benefit. Such
assumptions can be rooted in a lack of awareness about the availability
of jobs in low-income communities that are open to parents with limited
education and job history. The rule explicitly requires States to
consider these factors in determining the circumstances in which
imputing income is appropriate. In particular, an incarceration record
is an important consideration in determining whether it is reasonable
to impute earnings from a full-time job, as incarceration often serves
as a barrier to employment. One study showed that after release from
jail, formerly incarcerated men were unemployed nine more weeks per
year, their annual earnings were reduced by 40 percent, and hourly
wages were 11 percent less than if they had never been
incarcerated.\39\
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\39\ The Pew Charitable Trusts, Collateral Costs:
Incarceration's Effect on Economic Mobility, September 2010,
available at: http://www.pewtrusts.org/~/media/legacy/uploadedfiles/
pcs_assets/2010/collateralcosts1pdf.pdf.
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Many States work diligently to develop a factual basis for orders.
However, in some jurisdictions, a two-tiered system exists with better-
off noncustodial parents receiving support orders based upon evidence
and a determination of their individual income. Poor, low-skilled
noncustodial parents, usually unrepresented by counsel, receive
standard-issue support orders. Such orders lack a factual basis and are
instead based upon fictional income, assumptions not grounded in
reality, and beliefs that a full-time job is available to anyone who
seeks it. Orders that routinely lack a factual basis and are based upon
standard presumptions erode the sense of procedural fairness and the
legitimacy of the orders, resulting in lower compliance. Thus, it is
critically important that States take
[[Page 93525]]
reasonable efforts to develop a sufficient factual basis for all cases
by fully investigating their cases.
17. Comment: One commenter recommended that the NPRM be revised to
allow States to use imputed income, such as State median wage,
occupational wage rates, or other methods of imputation as defined by
State law, as a last resort when the parent has not provided financial
information and the agency cannot match to automated sources.
Response: Imputing standard amounts in default cases based upon
State median wage or statewide occupational wage rates does not comply
with this rule because it is unlikely to result in an order that a
particular noncustodial parent has the ability to pay. When other
information about the noncustodial parent's ability to pay is not
available, information about residence will often provide the decision-
maker with some basis for making this calculation. In addition,
information provided by the custodial parent can provide the basis for
a reasonable calculation, particularly in situations when the
noncustodial parent fails to participate in the process. OCSE revised
the final rule so that if there is no evidence or insufficient evidence
of earnings and income, or it is inappropriate to use earnings and
income as defined in Sec. 302.56(c)(1), then the State's guidelines
must provide that the State take into consideration the specific
circumstances of the noncustodial parent as delineated in Sec.
302.56(c)(iii) and impute income under criteria developed by the State
based upon the noncustodial parent's ability to pay the amount.
18. Comment: One commenter asked if a person should be ordered to
pay a minimum amount of support regardless of his or her circumstances
to recognize the responsibility for the child's support, with less
regard for the income capacity. The cases that the commenter noted
included incarcerated individuals, minor parents, parents in drug or
alcohol treatment programs, and others. The commenter further explained
that while a strong argument can be made in these cases to set a
minimum amount of support, setting a minimum order could be
problematic. At one end is a token order ($1.00 per month); on the
other hand is a true minimum order (such as $250 per month). This
commenter suggested that these situations not be included in the
``imputation of income'' arguments as they are different. The commenter
was hopeful that the final regulation would leave setting the amount of
a minimum order to State or local discretion and policy.
Response: The foundation of Federal guidelines law and policy is
the establishment of income-based orders. The rule is evidence-based
and codifies longstanding Federal policy that orders must be based upon
a determination of the noncustodial parent's ability to pay. High
minimum orders that are issued across-the-board without regard to the
noncustodial parent's ability to pay the amount do not comply with
these regulations.
19. Comment: One commenter was concerned that the NPRM would unduly
favor those obligors who attempt to avoid their obligations to their
children by failing to respond or hiding assets, as well as favor
incarcerated obligors simply because they are incarcerated.
Response: We do not agree. The final rule requires States to
investigate, not make assumptions. The rule removes a collateral
consequence of incarceration by requiring that orders for incarcerated
parents be set based on the same standard as every other parent:
Ability to pay. We believe our rule will bolster a sense of fair play
and compliance, and increase the likelihood that formerly incarcerated
parents will engage in legitimate work and support their children upon
release.
20. Comment: One commenter indicated that the number of existing
child support orders that are based on imputed income are evidence of
child support agencies' and courts' difficulties with acknowledging the
reality of chronic unemployment and adults with no or very low actual
income.
Response: OCSE also has these concerns and therefore is regulating
to ensure that child support guidelines are based on the noncustodial
parent's ability to pay. Some States need to do a better job in
gathering information about the noncustodial parent's actual income or
income history and developing the circumstantial evidence that can be
used by the courts or the administrative authority in setting the child
support orders.
21. Comment: One commenter indicated that in IV-D cases when the
noncustodial parent's income is unknown and the parent fails to provide
information, one State's law currently requires child support to be
based on ``presumed'' income. This is not ``actual income,'' but the
State's law also requires that the order be set aside as soon as the
noncustodial parent's actual income is determined. The commenter said
that the NPRM references ``presumed'' income as a problem, but it is
never a problem when the law is properly applied. Rather, according to
the commenter, it is an efficient ``locate'' tool that encourages
cooperation while not shifting unnecessary burden to the custodial
parent.
Response: We understand there will be situations where income must
be imputed, but this should only occur after investigative efforts by
the IV-D agency staff. The problem is that some States do not impute
income based on the specific circumstances of the noncustodial parent
to fill evidentiary gaps--instead, imputation has become the standard
practice of first resort in lieu of fact-gathering. While this State's
law sets aside an order when the actual income is determined, we are
concerned that unrealistic and high arrearages will accumulate,
particularly in cases involving indigent, unrepresented noncustodial
parents prior to the order being set aside. When an arrearage
accumulates, it often results in a low compliance rate over the life of
the child support order, which does not benefit the children and
families. For this reason, States should impute income to set child
support order amounts only in limited situations.
22. Comment: Some commenters indicated that in cases where there is
domestic violence, it is particularly important that victims have
access to the full range of tools courts use to argue for imputed
earnings because in these cases, abusers often fail to comply with
discovery, do not provide full disclosure to the courts, and otherwise
engage in bad faith tactics designed to further harass the custodial
parent. The commenters indicated they have found that in domestic
violence cases, the courts routinely impute earnings in cases where the
noncustodial parent is uncooperative for these reasons. Another
commenter also discussed that the NPRM needs to provide judges more
guidance on imputing income, especially in a case involving domestic
violence when one parent refuses to comply with discovery, does not
disclose income, or engages in bad faith tactics.
Response: Domestic violence is one of the specific circumstances of
the noncustodial parent that the State should consider when developing
and investigating the case prior to establishing a support obligation.
In accordance with Sec. 302.56(c), if the State is not able to obtain
any income information for the noncustodial parent, and the parent has
been uncooperative in the State's efforts, then the courts or
administrative authority should attempt to analyze all the specific
circumstances on which to base a child support obligation amount. If
this information is
[[Page 93526]]
not available, the courts or administrative authority may impute income
taking into consideration factors listed in Sec. 302.56(c)(1)(iii)
such as economic data related to the noncustodial parent's residence.
23. Comment: One commenter addressed the statewide standard that
his State had used when imputing income. He commented that his State
used to apply the Federal Minimum Basic Standard Adequate Care (MBSAC)
to impute income. In 2003, that amount was an annual income of $26,400,
yielding an order of $423. In today's dollars that would yield a
presumptive order of $602 per month for one child. The State thought a
responsible low-earnings noncustodial parent, upon learning of such a
high ordered amount, would come forward for a modification. However,
experience showed that the low-earnings noncustodial parents did not
respond that way. Based on a recommendation of the Urban Institute in
2003, the State abandoned the MBSAC standard in favor of a full-time
minimum wage imputation. However, according to the commenter, economic
events since 2003 (a significant decrease in true full-time jobs) would
argue in favor of further reduction of that recommendation.
Response: We agree that States need to evaluate the economic
factors such as unemployment rates, prevalence of full-time job
opportunities available to parents of similar skills and history,
growth of part-time and contingent work. The job market for low-skilled
men and women has changed since the 1990's, and incarceration policies
have impacted the ability of many parents to find work. This is why we
added a requirement that the guidelines committee must review these
types of factors when reviewing their child support guidelines under
Sec. 302.56(h). Based on comments, we revised the final rule at Sec.
302.56(c)(iii) to require that if a State imputes income to a
noncustodial parent, the guidelines must take into consideration the
specific circumstances of the noncustodial parent including factors
listed in Sec. 302.56(c)(1)(iii) even if only one source of
information such as residence is available.
Health Care Needs [Sec. 302.56(c)(2)]
1. Comment: Several commenters recommended that in proposed Sec.
302.56(c)(3), which has been redesignated as Sec. 302.56(c)(2) in the
final rule, we remove the phrase ``in accordance with Sec. 303.31 of
this chapter.'' They indicated that Sec. 303.31 applies only to IV-D
cases while the guidelines must apply to all child support cases, so
the reference is inappropriate. Commenters also indicated that Sec.
303.31 has not yet been revised to align with the provisions of the
Affordable Care Act (ACA). Until this happens, and the related
statutory provisions are revised, the current reference creates
conflicts with ACA provisions.
Response: We agree that because the child support guidelines apply
to all cases, the reference to Sec. 303.31 should be removed since
this section only applies to IV-D cases. Therefore, we made this
revision in the final rule. Additionally, to conform to the changes we
made in the final rule to align Sec. 303.31 with the ACA, we made
conforming changes in Sec. 302.56(c)(2) to reference the health care
needs through ``private or public health care coverage and/or cash
medical support.''
Incarceration as Voluntary Unemployment [Sec. 302.56(c)(3)]
1. Comment: Over 600 commenters supported the proposed Sec.
302.56(c)(5), which has been redesignated as Sec. 302.56(c)(3), to
prohibit the treatment of incarceration as ``voluntary unemployment.''
However, four commenters believed that such a limitation should not
apply where the parent is incarcerated for a crime against the
supported child or custodial parent. Some commenters also thought that
this limitation should not apply where the parent has been incarcerated
for intentional failure to pay child support. These commenters thought
that strong public policy dictates against affording relief to an
obligor who commits a violent crime against the custodial parent or
child, or an obligor who has the means to pay child support but refuses
to do so. The commenters urged OCSE to include these important
exceptions in the final rule. One additional commenter indicated that
support for a policy change in this area was based on the overwhelming
consensus that this is the best practice for families and IV-D
agencies, regardless of where they are located.
Response: We agree with the overwhelming majority of commenters,
and do not make changes in response to the four commenters' suggestion
for an exception based on the nature of the crime. Three-quarters of
States have eliminated treatment of incarceration as voluntary
unemployment in recent years.
As discussed in Comment/Response 13 in the Imputing Income [Sec.
302.56(c)(1)(iii)] subsection, establishing, modifying, or enforcing a
child support order is not a form of punishment for incarcerated
noncustodial parents,\40\ and the collateral consequences of the
treatment of incarceration as voluntary unemployment include
uncollectible debt, reduced employment, and increased recidivism.
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\40\ Lambert v. Lambert, 861 NE. 2nd 1176 (Ind. 2007), available
at: http://www.ai.org/judiciary/opinions/pdf/02220701rts.pdf.
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Per section 466(a)(10) of the Social Security Act, all parents
facing a substantial change of circumstances such as a substantial drop
in income, through a loss of employment or otherwise, are entitled to
request a review, and if appropriate, adjustment of their support
orders. Incarceration surely qualifies as a substantial change in
circumstances, yet State laws and policies--rooted in 19th century
jurisprudence--that treat incarceration as ``voluntary unemployment''
in effect block the application of the statutory review and adjustment
provision. In most cases, this practice results in child support orders
that are unrealistically high, which research indicates undermine
stable employment and family relationships, encourage participation in
the underground economy, and increase recidivism.\41\
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\41\ 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.
---------------------------------------------------------------------------
Despite the significant research on the consequences of continuing
the accrual of support when it is clear there is no ability to pay,
one-quarter of States continue treating incarceration as ``voluntary
unemployment.'' Failing to provide an opportunity for review and
possible adjustment of a child support order when a parent is
incarcerated does not mean that most noncustodial parents will have the
ability to make payments to their children while in prison or after
release.\42\ Studies find that incarcerated parents leave prison with
an average of $15,000 to $30,000 or more in unpaid child support, with
no means to pay upon release.\43\ Not
[[Page 93527]]
considering incarceration as a substantial change of circumstances
makes it less likely that noncustodial parents will work and pay
support upon release and more likely that they will recidivate.\44\ As
a result, we have also revised Sec. 303.8(c) to indicate that the
reasonable quantitative standards that the State develops for review
and adjustment must not treat incarceration as a legal bar for
petitioning for and receiving an adjustment of an order.
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\42\ Hager, Eli, ``For men in prison, child support debt becomes
a crushing debt,'' The Washington Post and the Marshall Project,
October 19, 2015, available at: https://www.themarshallproject.org/2015/10/18/for-men-in-prison-child-support-becomes-a-crushing-debt.
\43\ 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://csgjusticecenter.org/courts/publications/building-debt-while-doing-time-child-support-and-incarceration-2/;
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: https://csgjusticecenter.org/documents/0000/1063/Reentry_Council_Mythbuster_Child_Support.pdf.
\44\ Pearson, Jessica, ``Building Debt While Doing Time: Child
Support and Incarceration,'' Judges' Journal 43:1, Winter 2004,
which is available at: https://csdaca.org/wp-content/uploads/resources/1/Research/Arrears/BuildingDebt%20(2).pdf; and Harris,
Alexes, Heather Evans, and Katherine Beckett, ``Drawing Blood from
Stones: Legal Debt and Social Inequality in the Contemporary United
States,'' American Journal of Sociology, 115:6, 1753-1799, May 2010,
which is available at: http://faculty.washington.edu/kbeckett/articles/AJS.pdf.
---------------------------------------------------------------------------
2. Comment: Several commenters believed that the manner by which
the child support system treats incarcerated obligors should be a State
matter, not subject to any mandate. They stated that this is a
significant public policy issue with considerable state-specific case
law that is not appropriate for Federal regulation. Some commenters
believed that reducing obligations was rewarding bad behavior, and it
was not appropriate for the NPRM to attempt to override that State
policy decision. In addition, they noted that the proposal would
ultimately lead to a reduced child support obligation even if the
reason for incarceration was willful failure to pay child support or
some other heinous crime against the child. Other commenters believed
that discretion in how to treat incarceration was at the core of
judicial decision making, as reflected in the State's case law that
almost uniformly affirms lower court rulings denying relief to the
incarcerated obligor.
Response: All but 14 States have eliminated this policy.\45\ In
Lambert v. Lambert, the Indiana Supreme Court found that
``incarceration does not relieve parents of their child support
obligations. On the other hand, in determining support orders, courts
should not impute potential income to an imprisoned parent based on
pre-incarceration wages or other employment related income, but should
rather calculate support based on the actual income and assets
available to the parent.'' \46\ While some States have prior case law
finding that incarceration should be considered voluntary unemployment,
most States have updated case law, guidelines and court rules to allow
for review of the specific facts of the case, and, if appropriate,
adjustment of the order.
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\45\ ``Voluntary Unemployment,'' Imputed Income, and
Modification Laws and Policies for Incarcerated Noncustodial
Parents, PAID--Child Support Fact Sheet #4 (companion piece), June
20, 2012, available at: http://www.acf.hhs.gov/programs/css/resource/voluntary-unemployment-imputed-income-and-modification-laws-and-policies.
\46\ Lambert v. Lambert, 861 NE. 2nd 1176 (Ind. 2007), available
at: http://www.ai.org/judiciary/opinions/pdf/02220701rts.pdf.
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The rule does not provide special treatment for incarcerated
parents. Rather, it requires application of Federal review and
adjustment requirements, including that orders be reviewed and adjusted
upward or downward in all cases upon a showing of any substantial
change in circumstances, including a substantial change in
circumstances due to unemployment or incarceration. Implementation of
Sec. 302.56(c)(3) will ensure that States consider incarceration as a
substantial change of circumstances that warrants the child support
order to be reviewed and, if appropriate, adjusted based on the
noncustodial parent's ability to pay. If an incarcerated parent has
income or assets, these can be taken into consideration in reviewing
the order. However, States should not assume an ability to earn based
on pre-imprisonment wages, particularly since incarceration typically
results in a dramatic drop in income and ability to get a job upon
release.
Moreover, once released, noncustodial parents tend to view the
methods employed to collect support and arrearages as a disincentive to
seek legitimate gainful employment. Research suggests that using
maximum-level income withholding rates and other enforcement mechanisms
tend to discourage employment, particularly among individuals in low
socioeconomic communities.\47\ When combined with the difficulty faced
by formerly incarcerated parents in obtaining employment, there is a
strong incentive to seek work in the ``underground economy'' where it
is difficult for authorities and custodial parents to track earnings
and collect payments.\48\ Research demonstrates that when high support
orders continue through a period of incarceration and thus build
arrearages, the response by the released obligor is to find more
methods of avoiding payment, including a return to crime. It is
unrealistic to expect that most formerly incarcerated parents will be
able to repay high arrearages upon release. To the extent that an order
fails to take into account the real financial capacity of a jailed
parent, the system fails the child by making it more likely that the
child will be deprived of adequate support over the long term.
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\47\ Harry J. Holzer and Paul Offner, ``The Puzzle of Black Male
Unemployment,'' The Public Interest (2004) Spring, 74-84, which is
available at: http://www.nationalaffairs.com/doclib/20080710_20041546thepuzzleofblackmaleunemploymentharryjholzer.pdf;
Harry J. Holzer, Paul Offner, and Elaine Sorensen, ``Declining
Employment among Young Black Less-Educated Men: The Role of
Incarceration and Child Support,'' Journal of Policy Analysis and
Management, (2005) 24(2): 329-35, which is available at: http://www.urban.org/research/publication/declining-employment-among-young-black-less-educated-men/view/full_report.
\48\ Council of State Governments, Report of the Re-Entry Policy
Council: Charting the Safe and Successful Return of Prisoners to the
Community (2005), Justice Center, available at: https://csgjusticecenter.org/reentry/publications/the-report-of-the-re-entry-policy-council-charting-the-safe-and-successful-return-of-prisoners-to-the-community/.
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The child support system is not meant to serve a punitive purpose.
Rather, the system is an economic one, designed to measure the relative
contribution each parent should make--and is capable of making--to
share fairly in the economic burdens of child rearing.\49\ Considering
the existing evidence, imposing high support payments on incarcerated
parents serves as a punitive measure, becomes an additional collateral
consequence of incarceration, and does not serve the best interests of
the child by damaging the parent-child relationship and the prospect
for consistent child support payments in the future.\50\
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\49\ Lambert v. Lambert, 861 NE. 2nd 1176 (Ind. 2007), available
at: http://www.ai.org/judiciary/opinions/pdf/02220701rts.pdf.
\50\ Cammett, Ann, ``Expanding Collateral Sanctions: The Hidden
Costs of Aggressive Child Support Enforcement Against Incarcerated
Parents,'' Georgetown Journal on Poverty Law & Policy, 13:2, 312-
339, Summer 2006, which is available at: http://www.academia.edu/2582076/Expanding_Collateral_Sanctions_The_Hidden_Costs_of_Aggressive_Child_Support_Enforcement_Against_Incarcerated_Parents.
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In 2005, the Council of State Governments, a nonpartisan
association of all three branches of State government, issued the
Report of the Re-Entry Policy Council: Charting the Safe and Successful
Return of Prisoners to the Community, which provided consensus-based
recommendations to improve successful reentry of formerly incarcerated
people into society. Many of these recommendations were subsequently
incorporated into the
[[Page 93528]]
Second Chance Act of 2007 (Pub. L. 110-199).\51\ The report
specifically identified child support obligations, especially
arrearages, as a barrier to successful re-entry into society because
they have a tendency to disrupt family reunification, parent-child
contact, and the employment patterns of formerly incarcerated
parents.\52\
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\51\ The text of the Pub. L. 110-199 is available at: https://www.congress.gov/110/plaws/publ199/PLAW-110publ199.pdf.
\52\ Council of State Governments, Report of the Re-Entry Policy
Council: Charting the Safe and Successful Return of Prisoners to the
Community, Justice Center, 2005, available at: http://www.csgjusticecenter.org/wp-content/uploads/2013/04/1694-11.pdf.
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Marginal Cost To Raise a Child/Adjustment for Parenting Time [Sec.
302.56(c)(4)]
1. Comment: Several commenters suggested that proposed Sec.
302.56(c)(2), which was redesignated in the final rule as Sec.
302.56(c)(4), should be revised to indicate that the guidelines should
be ``based on the statewide median marginal cost for the average family
to raise a first, second, or subsequent child, and result in a
computation of a the support obligation that does not exceed such
median marginal cost by more than 20%.'' One commenter specifically
indicated that they recommended that child support orders be based on
the marginal cost to raise a child rather than parental income. Many
other commenters suggested more detailed revisions related to the
marginal cost to raise children. Some commenters suggested that, as
part of the review of a State's guidelines, a State must consider
economic data on the marginal cost of raising children, and the child
support orders resulting from the guidelines must approximate the
obligor's specified share of such marginal costs. These commenters
believed that the objective is to establish child support orders that
approximate the true cost of supporting children, over and above what
it costs the parents to support themselves. They noted that if the
amount of support ordered is too low, the child suffers. However, they
noted, child support orders that constitute a windfall to the receiving
parent are a potent cause of bitter custody battles, resentment, and
hostility that can last throughout the years of childhood. Moreover,
according to the commenters, if the child support order is too high,
there is a built-in incentive for the parent who expects to win custody
to resist shared parenting.
Response: We do not agree with this suggestion. State child support
guidelines are required to be based on the noncustodial parent's
income, earnings, and other evidence of ability to pay. However, States
have discretion and flexibility in defining the specific descriptive
and numeric criteria used to compute the amount of the child support
obligation. Once a parent's income is ascertained, the rule does not
limit States' flexibility in defining the percentage or amount of
income ordered to be paid as child support, so long as the resulting
order takes into consideration the noncustodial parent's ability to pay
it. State guidelines should not be based on the marginal cost of
raising the child without taking into consideration the noncustodial
parent's ability to pay. This rule only establishes minimum components
for State child support guidelines consistent with Federal law, and
does not impose more specific requirements, that are not inconsistent
with Federal law and regulations.
2. Comment: Many commenters recommended that proposed Sec.
302.56(c)(2), which has been redesignated in the final rule as Sec.
302.56(c)(4), include adjustments for the amount of parenting time each
parent is willing and able to provide.
Response: Currently, child support guidelines in 36 States provide
for adjustments in the child support order for the amount of parenting
time each parent has with the children. While we support this concept
and recognize that in most State guidelines the consideration of
parenting time is part of the support order establishment process,
States are in the best position to determine how to consider parenting
time in calculating the amount of the child support obligation since
the child support guideline formula is at the discretion of the State.
Quadrennial Review [Sec. 302.56(e)]
1. Comment: While most commenters generally supported the
requirement in Sec. 302.56(e), that ``[t]he State must review, and
revise, if appropriate, the guidelines established under paragraph (a)
of this section at least once every 4 years to ensure that their
application results in the determination of appropriate child support
award amounts,'' a few commenters thought that the reports from the
quadrennial review, the effective date of the guidelines, and the date
of the next review should be published on the internet and made
accessible to the public. They also made recommendations regarding who
should be on the reviewing body. They specifically recommended that the
following language be added to this provision indicating that the State
shall publish on the internet and make accessible to the public all
reports of the reviewing body, the membership of the reviewing body,
when the guidelines became effective, and the date of the next
quadrennial review.
These commenters argued that child support guidelines are not a
matter to be developed by a closed group. They viewed guidelines as a
matter of immense public import with huge individual impact on millions
of people. They recommended that the guideline committee include at
least two members of the general public--one advocating for payors and
one advocating for recipients. They believed that this was a first step
towards bringing transparency to the creation of child support
guidelines.
They further commented that no reasonable objection could be raised
to this provision. Commenters also indicated that possible objections
to including members of the general public might be that such people
could lack knowledge of the intricacies of child support or the law,
could advocate for narrow interests, or could be disruptive. Given that
the two members of the public would undoubtedly be outnumbered by those
who traditionally are called upon to write child support guidelines,
fear that these members could control the outcome is unreasonable.
Response: OCSE agrees and we added at the end of Sec. 302.56(e)
the following: ``The State shall publish on the internet and make
accessible to the public all reports of the reviewing body, the
membership of the reviewing body, the effective date of the guidelines,
and the date of the next quadrennial review.'' We also agree that the
quadrennial review process/report should be public information that is
shared.
Regarding the composition of the committee or body conducting the
quadrennial review, we further agree that the quadrennial review should
provide for a meaningful opportunity for participation by citizens and
particularly low-income citizens, representing both custodial and
noncustodial parents. The child support guidelines review body should
also include participation by the child support agency. While we are
not mandating the specific composition of the review body, we are
requiring in Sec. 302.56(h)(3) meaningful opportunity for public
input, including input from low-income custodial and noncustodial
parents and their representatives, and the views and advice of the
State IV-D agency.
[[Page 93529]]
Rebuttable Presumption [Sec. 302.56(f)]
1. Comment: Over 500 commenters from private citizens, most of them
identical comments from mass mailings, proposed that we add language at
the end of Sec. 302.56(f) that indicates that the presumption can be
rebutted successfully with genetic evidence that the obligor is not the
biological parent of the child, and by the lack of written adoption
records, in which case there will be no support obligation.
They commented that this addition is meant to update our support
laws to reflect the power of modern genetics. They cited the directives
in Executive Order 13563 as controlling. Section 5 of that Executive
Order states:
Sec. 5. Science. Consistent with the President's Memorandum for
the Heads of Executive Departments and Agencies, ``Scientific
Integrity'' (March 9, 2009), and its implementing guidance, each
agency shall ensure the objectivity of any scientific and
technological information and processes used to support the agency's
regulatory actions.
The President's 2009 Memorandum referenced therein, states:
To the extent permitted by law, there should be transparency in
the preparation, identification, and use of scientific and
technological information in policymaking.\53\
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\53\ The President's 2009 Memorandum is available at: https://www.whitehouse.gov/the-press-office/memorandum-heads-executive-departments-and-agencies-3-9-09.
The commenters further explained that DNA evidence is indisputable.
They argued that it is time to update Federal regulations so that
support obligations are not imposed on the wrong individuals.
Response: Many States have legal provisions related to parentage in
addition to genetic evidence and evidence of adoption records. Given
how rapidly the fields of genetic testing and assisted reproduction are
changing, OCSE agrees that this area is an appropriate area to review.
However, a full discussion of the issues is required and beyond the
scope of this rule. It is our view that changes to existing Federal
regulations to address this important area would call for a specific
notice in the Federal Register, to allow for a public comment period.
Written Findings [Sec. 302.56(g)]
1. Comment: Some commenters recommended that we qualify in proposed
Sec. 302.56(g) that 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 ``; but in
no event shall the award exceed the limit specified in proposed
paragraph (c)(2) unless the child has special needs as certified and
quantified by a licensed medical doctor.''
Response: We did not make this specific revision to Sec. 302.56(g)
because the paragraph already requires that the criteria must take into
consideration the best interest of the child. States have the
flexibility and discretion to establish such criteria. Therefore,
States may take into consideration a child with special needs as
certified and quantified by a licensed medical doctor.
Parenting Time [Proposed Sec. 302.56(h)]
1. Comment: The majority of commenters supported the proposed Sec.
302.56(h), allowing States to recognize parenting time provisions when
both parents have agreed to the parenting time provision or pursuant to
State guidelines. Many commenters expressed support for improved
coordination between child support and parenting time procedures, and
were supportive of the proposed language. However, some commenters
indicated confusion about the intended scope of the provision and
raised a number of implementation questions. Some comments reflected a
misunderstanding about the extent to which FFP would become available
for parenting time activities and raised questions about cost
allocation. Other commenters questioned the role of the child support
program in creating, monitoring, and enforcing a parenting time order,
and the legal relationship between child support payments and parenting
time. Still other comments expressed concerns regarding the child
support agency's lack of experience in handling complex family issues,
such as domestic violence and encouraged us to take advantage of our
parenting time pilot grant program to develop additional technical
assistance resources. Commenters also sought clarity regarding the
combination of child support and custody or visitation processes and
monitoring compliance with parenting time orders. A number of State
commenters suggested that a new rule was not necessary to affirm the
general principle that States are not required to implement costly and
complex cost allocation plans if such expenditures are de minimis and
incidental to reimbursable child support program activities.
Response: While expressing support for the rule, the commenters
sought clarification about the intent, scope, and implementation of the
proposed provision. Our intention in proposing Sec. 302.56(h) was not
to open up child support funding for a new set of parenting time
activities, which Congress must authorize, or to collapse separate
child support and parenting time legal rights. Our intention was to
acknowledge existing policies and practices in many States, and to
provide a technical clarification that addressed audit and cost
allocation questions arising from current practices in a number of
States.
IV-D program costs related to parenting time arrangements must
continue to be minimal and incidental to IV-D child support order
establishment activities and not have any impact on the Federal budget.
In light of the comments received on the proposed parenting time
provisions and the unintended confusion regarding these proposals, OCSE
determined that new rules are not necessary. Therefore, we deleted the
proposed paragraph (h).
OCSE recognizes that the inclusion of an uncontested and agreed
upon parenting time provision incidental to the establishment of a
child support order aligns with Pub. L. 113-183, ``Preventing Sex
Trafficking and Strengthening Families Act.'' \54\ Section 303 of this
recent law indicated that it is the sense of the Congress that ``(1)
establishing parenting time arrangements when obtaining child support
orders is an important goal which should be accompanied by strong
family violence safeguards; and (2) States should use existing funding
sources to support the establishment of parenting time arrangements,
including child support incentives, Access and Visitation Grants, and
Healthy Marriage Promotion and Responsible Fatherhood Grants.'' Any new
costs related to parenting time provisions would require the State to
identify and dedicate funds separate and apart from IV-D allowable
expenditures consistent with HHS cost principles codified in 45 CFR
part 75, subpart E.
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\54\ Available at: http://www.gpo.gov/fdsys/pkg/PLAW-113publ183/pdf/PLAW-113publ183.pdf.
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Thirty-six States have adopted guidelines that recognize parenting
time arrangements in establishing child support orders. 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. Other States have
parenting time guidelines or have other procedures in place to
coordinate child
[[Page 93530]]
support and parenting time processes. These longstanding practices have
not changed the fact that parenting time is a legally distinct and
separate right from the child support obligation.
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 burden on parents of being involved in
multiple administrative or judicial processes with no cost to the child
support program.
We encourage States to continue to take steps to recognize
parenting time provisions in child support orders when both parents
have agreed to the parenting time provision or in accordance with the
State guidelines when the costs are incidental to the child support
proceeding and there is no cost to the child support program.
Child Support Guidelines Review/Deviation Factors [Sec. 302.56(h)]
1. Comment: While most commenters supported that States should
maintain flexibility in defining deviation factors, one commenter
recommended that proposed Sec. 302.56(i), which has been redesignated
as Sec. 302.56(h), further specify that deviation factors established
by the State must be ``in the best interest of the child.''
Response: We do not agree. This section establishes steps a State
must take when reviewing its child support guidelines. Section
302.56(h)(2) provides that deviation from the presumptive child support
amount may be based on factors established by the State. It is
appropriate for the State to have discretion to establish such factors.
Section 302.56(g) requires that a written finding or specific
finding on the record of a judicial or administrative proceeding for
the establishment or modification of a child support order 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. The requirement in Sec.
302.56(g) relates to how the deviation may be applied on a case-by-case
basis, including having a written finding or finding on the record
justifying the deviation from the child support guidelines.
2. Comment: Many commenters suggested additional factors that the
State must consider during its guideline review such as economic data
on the marginal cost of raising children and an analysis of case data,
by gender, gathered through sampling or other methods, on the
application of, and deviations from, the guidelines. The commenters
thought that an analysis of case data by gender must be used in the
State's review of the guidelines to ensure that gender bias is
declining steadily, and that deviations from the guidelines are
limited. Although not specifically related to this paragraph,
throughout the comments to the proposed guideline regulation,
commenters expressed concerns that: Guidelines needed to consider
economic data on local job markets, guidelines did not take into
consideration low-income noncustodial parents, and the rate of default
orders were increasing inappropriately.
Response: Considering all of the various concerns about how States
were developing criteria for guidelines, we have revised proposed Sec.
302.56(i), which has been redesignated as Sec. 302.56(h), to add
factors that the States must consider when reviewing their guidelines
for the required quadrennial review. We added paragraph (h)(1) to
require that the States consider economic data on the cost of raising
children, labor market data (such as unemployment rates, employment
rates, hours worked, and earnings) by occupation and skill-level for
the State and local job markets, the impact of guideline policies and
amounts on custodial and noncustodial parents who have family incomes
below 200 percent of the Federal poverty level, and factors that
influence employment rates among noncustodial parents and compliance
with current child support orders.
We also added paragraph (h)(2) to require the States to analyze
case data, gathered through sampling or other methods, on the
application of and deviations from the child support guidelines, as
well as the rates of default and imputed orders and orders determined
using the low-income adjustment required under paragraph (c)(1)(ii).
The analysis must also include a comparison of payments on child
support orders by case characteristics, including whether the order was
entered by default, based on imputed income, or determined using the
low-income adjustment required under paragraph (c)(1)(ii). The analysis
of the data must be used in the State's review of the guidelines to
ensure that deviations from the child support guidelines are limited
and guideline amounts are appropriate based on criteria established by
the State under paragraph (g).
3. Comment: Several commenters questioned whether Sec. 302.56(i),
redesignated as Sec. 302.56(h), was necessary. They thought that the
proposed new sentence regarding deviations from child support
guidelines appeared redundant with the reference to rebuttal criteria
in paragraph (f). They suggested that the new language be deleted or
clarified in the final rule.
Response: We carefully reviewed the language to ensure it was not
redundant. Section 302.56(h) lists steps a State must take as part of
its review of the State's guidelines. The analysis of the data must be
used to ensure that deviations are limited and guideline amounts are
appropriate based on criteria established by the State under paragraph
(g). The compliance date is for the first quadrennial review of the
guidelines commencing after the State's guidelines have initially been
revised under this final rule. However, proposed Sec. 302.56(g)
requires a written finding or specific finding on the record of a
judicial or administrative proceeding for the establishment or
modification of a child support order that the application of the
guidelines would be unjust or inappropriate in a particular case in
order to rebut the presumption that the guideline amount is the correct
amount of child support to be awarded.
Section 302.70--Required State Laws
1. Comment: Commenters overwhelmingly supported increasing the
exemption period allowed under section 466(d) of the Act from 3 years
to 5 years; however, one commenter suggested that consideration also be
given to the development of an abridged submission process for
renewals.
Response: OCSE appreciates the suggestion; however, submission of
the required information is statutory. Section 466(d) states that if a
State demonstrates to the satisfaction of the Secretary, through the
presentation to the Secretary of such data pertaining to caseloads,
processing times, administrative costs, and average support
collections, and such other data or estimates as the Secretary may
specify, that the enactment of any law or the use of any procedure or
procedures required by or pursuant to this section will not increase
the effectiveness and efficiency of the State child support enforcement
program, the Secretary may exempt the State, subject to the Secretary's
continuing review and to termination of the exemption should
circumstances change, from the requirement to enact the law or use the
procedure or procedures involved.
[[Page 93531]]
Section 302.76--Job Services
1. Comment: This proposed provision received overwhelming support
from states, Members of Congress, and the public, but it also was
opposed by some Members of Congress who did not think the provision
should be included in the final rule. Many supportive commenters
focused on ways to incorporate employment services for noncustodial
parents within a broader workforce agenda. One commenter suggested that
States that offer job services as part of their child support
enforcement strategy should leverage funds to provide different, but
complementary services while coordinating training costs with other
Federal programs. Several commenters had questions about how States
would coordinate with other Federal job services programs to ensure
efficiency, reduce duplication, cover costs appropriately, and reduce
administrative burden. One commenter suggested allowing braided funding
for providing complementary services under different funding streams.
Response: While we appreciate the support that the commenters
expressed, we think allowing for federal IV-D reimbursement for job
services needs further study and would be ripe for implementation at a
later time. Therefore, we are not proceeding with finalizing the
proposed provisions at Sec. Sec. 302.76, 303.6(c)(5), and
304.20(b)(viii). We encourage State IV-D agencies to leverage other
resources --e.g., job services provided under WIOA, TANF, and SNAP
E&T--when developing strategies to improve consistent on-time payments
of child support. In addition, states interested in providing job
services not eligible for FFP continue to have the ability to submit a
request for a waiver under section 1115 of the Act, or section
458A(f)(2) of the Act with respect to use of incentive funds.
Section 303.3--Location of Noncustodial Parents in IV-D Cases
1. Comment: While many commenters supported the proposed change to
add ``corrections institutions'' to the list of locate sources, one
commenter requested that OCSE specify ``Federal, State, and local''
correctional institutions and that automation be recommended where
possible.
Response: We would like to clarify that that the term ``corrections
officials'' refers to Federal, State, tribal, and local corrections
officials. However, this clarification was not added to the regulatory
text since this is dependent upon what sources are available to the
State for locate purposes. Section 303.3(b)(1) does not address whether
or not the sources should be automated; this is based on availability
of databases in the State and whether the IV-D agency has access to
them.
2. Comment: Another commenter suggested that we add ``utility
companies'' to the list of locate sources. In addition, commenters
recommended the following change in terminologies: ``food stamps'' to
``Supplemental Nutrition Assistance Program (SNAP)''; ``the local
telephone company'' to ``electronic communications and internet service
providers''; and change ``financial references'' to ``financial
institutions.''
Response: We agree with the commenters' suggestions for technical
revisions. Supplemental Nutrition Assistance Program (SNAP) is the
official name of the food stamps program, and the two other revisions
update classifications for communications and financial companies. In
addition, we added utility companies to the list of locate sources
since these companies have been valuable locate sources that many
States use.
3. Comment: One commenter requested OCSE assist IV-D agencies in
working with correctional institutions to identify incarcerated
parents. Incarcerated parents may be hesitant to acknowledge that they
have children or child support orders, possibly due to misinformation
about child support shared among prisoners. Also, people are convicted
and imprisoned under alias names. Because of these challenges, the
commenter stated that State IV-D programs and correctional institutions
need to understand and share each other's data if IV-D programs are to
be successful in locating noncustodial parents in jails or prisons.
Another commenter discussed the challenges in trying to obtain timely
information from county jails.
Response: As a result of their efforts to collaborate, IV-D
programs and correctional institutions often agree that they need to
know more about the parents in each other's caseloads if both programs
are to be successful in accomplishing their missions.\55\ Section
453(e)(2) of the Act authorizes the Secretary of the Department of
Health and Human Services to obtain information from Federal agencies
including the Bureau of Prisons (BOP). OCSE currently has a match with
BOP which covers 99 percent of the prison population. It includes 5,407
correctional facilities, including Federal, State, county, and other
local prisons. The information is provided to States in the Social
Security Administration (SSA) State Verification and Exchange System
(SVES) match--they can receive the information on request and
proactively. Our match, however, does not have all the data a direct
interface could offer States. For example, we do not receive updates on
the release date. The release date is very important to States--and
updates are even more important because they monitor when the
noncustodial parent is released. Release typically triggers order
modifications and enforcement actions. We are going to explore the
option to interface directly with the BOP and/or State facilities in
order to obtain additional or updated information.
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\55\ Jessica Pearson and Esther Ann Griswold, ``Lessons from
Four Projects Dealing with Incarceration and Child Support,''
Corrections Today, July 1, 2005, 67(4): 92-95, which is available
at: http://www.thefreelibrary.com/Lessons+from+four+projects+dealing+with+incarceration+and+child...-a0134293586; U.S. Department of Health and Human Services, Working
with Incarcerated and Released Parents: Lessons from OCSE Grants and
State Programs, 2006, available at www.acf.hhs.gov/programs/css/resource/working_with_incarcerated_resource_guide.pdf; and Council
of State Governments, Report of the Re-entry Policy Council:
Charting the Safe and Successful Return of Prisoners to the
Community. Justice Center, 2005, available at https://csgjusticecenter.org/wp-content/uploads/2013/03/Report-of-the-Reentry-Council.pdf.
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It is a system certification requirement to have automated
interfaces with State sources, when appropriate, feasible, and cost
effective, to obtain locate information, and this includes the
Department of Corrections. We also encourage States to develop
electronic interfaces with child support data being shared with
Federal, State, Tribal, and local corrections institutions to maximize
identification of incarcerated parents and program efficiency, and to
establish practices for serving parents in correctional facilities.
Identifying the fact of incarceration is important to set and keep
support orders consistent with the parent's current ability to pay,
avoid the accumulation of arrears, and increase the likelihood that
support will be consistently paid after release.
4. Comment: Another commenter was concerned that the addition of
corrections institutions to the list of required locate sources will
require an agreement with the corrections institutions in addition to
enhancements to the locate interfaces to match corrections information
with State child support information within the statewide automated
child support enforcement system. If implemented, an understanding of
any local agreements local child support agencies may have with their
local law enforcement
[[Page 93532]]
partners would be appreciated. Also, a few commenters indicated that
this was a list of required locate sources.
Response: In this final rule, as we discussed above, we are
encouraging States to include corrections institutions as a locate
source, but we are not requiring it. This change is intended to
encourage child support agencies to use available locate tools to
identify incarcerated noncustodial parents and ensure that their orders
are appropriate. Additionally, in Sec. 302.34 in this final rule, we
have also added ``corrections officials'' to the list of entities with
which a State may enter into agreements for cooperative arrangements.
This addition encourages child support agencies to collaborate with
corrections institutions and community corrections officials (probation
and parole agencies).
We do not consider the list of appropriate locate sources in Sec.
303.3(b)(1) to be required locate sources, but rather an extensive
nonexclusive list of sources that the State should consider using to
locate noncustodial parents or their sources of income and/or assets
when location is needed to take a necessary action. Additionally, after
the State has determined what locate sources they have access to, the
State will need to determine what locate sources should be used on a
particular case. For example, some locate sources may not be able to be
used if the noncustodial parent's social security number is unknown.
Section 303.6--Enforcement of Support Obligations
Civil Contempt Proceedings [Sec. 303.6(c)(4)]
1. Comment: Many commenters expressed concerns about our proposed
revisions related to civil contempt. These commenters believed that the
proposed requirements went beyond the Turner v. Rogers decision.\56\
One commenter thought a regulation requiring that States must have
procedures requiring that the courts take into consideration the
subsistence needs of the noncustodial parent went beyond the Turner v.
Rogers decision. Several commenters thought that the Turner decision
merely requires a State either to provide legal counsel or alternative
procedural safeguards. These commenters did not believe that any
additional due process safeguards were required if counsel was being
provided to the defendant.
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\56\ 564 U.S._, 131 S Ct. 2507 (2011). The question in Turner
was whether the due process clause of the Fourteenth Amendment of
the U.S. Constitution requires States to provide legal counsel to an
unrepresented indigent defendant person at a child support civil
contempt hearing that could lead to incarceration in circumstances
where neither the custodial parent nor the State was represented by
legal counsel. The U.S. Supreme Court decision held that under those
circumstances, the Fourteenth Amendment does not automatically
require the States to provide counsel if the State has ``in place
alternative procedures that assure a fundamentally fair
determination of the critical incarceration-related question,
whether the supporting parent is able to comply with the court
order.'' The Court found that the Petitioner's incarceration
violated due process because he received neither counsel in the
proceedings nor the benefit of adequate alternative procedures.
---------------------------------------------------------------------------
Response: After careful consideration of the comments, we have
decided to refocus the regulation on the criteria that IV-D agencies
use to determine which cases to refer and how they prepare cases for a
civil contempt proceeding. As the Federal agency responsible for
funding and oversight of State IV-D programs, OCSE has an interest in
ensuring the constitutional principles articulated in Turner are
carried out in the child support program, that child support case
outcomes are just and comport with due process, and that enforcement
proceedings are cost-effective and in the best interest of the child.
The Turner case provides OCSE and State child support programs with an
opportunity to evaluate the appropriate use of civil contempt in
today's IV-D child support program. As the U.S. Supreme Court stated in
Turner, a noncustodial parent's ability to pay constitutes ``the
critical question'' in a civil contempt case, whether the State
provides legal counsel or alternative procedures designed to protect
the indigent obligor's constitutional rights.\57\ Contempt is an
important tool for collection of child support when used in appropriate
cases where evidence exists that the noncustodial parent has the income
and assets to pay the ordered monthly support obligation, but willfully
fails to do so, and the purge amount or conditions are within the
noncustodial parent's ability to pay or meet. The Turner opinion
provides the child support program with a guide for conducting
fundamentally fair and constitutionally acceptable proceedings. The
revisions to Sec. 303.6(c)(4) are designed to reduce the risk of
erroneous deprivation of the noncustodial parent's liberty in IV-D
cases, without imposing significant fiscal or administrative burden on
the State. Accordingly, in response to comments, the final rule
requires that State IV-D agency must maintain and use an effective
system for enforcing the support obligation by establishing guidelines
for the use of civil contempt citations in IV-D cases. The guidelines
must include requirements that the IV-D agency: (i) Screen the case for
information regarding the noncustodial parent's ability to pay or
otherwise comply with the order; (ii) provide the court with such
information regarding the noncustodial parent's ability to pay, or
otherwise comply with the order, which may assist the court in making a
factual determination regarding the noncustodial parent's ability to
pay the purge amount or comply with the purge conditions; and (iii)
provide clear notice to the noncustodial parent that his or her ability
to pay constitutes the critical question in the civil contempt action.
---------------------------------------------------------------------------
\57\ See U.S. Department of Justice, Civil Rights Division,
Office for Access to Justice, Dear Colleague Letter, March 14, 2016,
https://www.justice.gov/crt/file/832461/download, cited in OCSE Dear
Colleague Letter, DCL-16-05, March 21, 2016, http://www.acf.hhs.gov/programs/css/resource/justice-department-annnounces-resources-to-reform-practices.
---------------------------------------------------------------------------
2. Comment: Some commenters felt that our proposed requirement
related to civil contempt infringed on the inherent powers of the
judiciary and would be unenforceable by the IV-D agency. Others
commented that it was a violation of separation of powers. One
commenter thought that the court should be the body to determine the
requirements of Turner decision. Another commenter questioned our
authority to regulate in this area.
Response: As discussed above, we have revised the proposed Sec.
303.6(c)(4) to focus on IV-D agency decisions made at an earlier point
in civil contempt proceedings. The revised Sec. 303.6(c)(4) requires
IV-D agencies to establish guidelines for the appropriate use of
contempt in IV-D cases.
OCSE, IV-D agencies, and courts under cooperative agreements to
carry out the IV-D program are required to ensure that noncustodial
parents receive the due process protections required by the
Constitution. The Federal government has a substantial interest in the
effective and equitable operation of the child support program,
including the use of contempt proceedings in the enforcement of IV-D
cases. In addition, the Secretary of Health and Human Services has
authority under section 452(a)(1) of the Act to ``establish such
standards for locating noncustodial parents, establishing paternity,
and obtaining child support . . . as he determines to be necessary to
assure that such programs will be effective.'' Section 454(13) provides
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,
[[Page 93533]]
obtaining support orders, and collecting support payments.''
Research shows that routine use of civil contempt is
counterproductive to the goals of the child support program.\58\ All
too often it results in the incarceration of noncustodial parents who
are unable to pay to meet their purge requirements.\59\ A study that
examined the Milwaukee County Jail system found that 58 percent of the
individuals incarcerated between 2005 and 2010 for criminal nonsupport
of child support had no reported earnings in the unemployment insurance
system and 75 percent were African-American.\60\ This same study found
that for those noncustodial parents with formal earnings, the average
annual earnings were $4,396, and the average annual child support owed
for all incarcerated noncustodial parents was $4,356.
---------------------------------------------------------------------------
\58\ See Elizabeth G. Patterson, Civil Contempt & the Indigent
Child Support Obligor: The Silent Return of Debtor's Prison, 18
Cornell Journal of Law & Public Policy 95, 126 (2008) (Civil
Contempt), available at: http://www.lawschool.cornell.edu/research/jlpp/upload/patterson.pdf.
\59\ See Rebecca May & Marguerite Roulet, Ctr. for Family Policy
& Practice, A Look at Arrests of Low-Income Fathers for Child
Support Nonpayment: Enforcement, Court and Program Practices, 40
(2005), which is available at: http://www.cffpp.org/publications/LookAtArrests.pdf.
\60\ Cook, Steven, Child Support Enforcement Use of Contempt and
Criminal Nonsupport Charges in Wisconsin, University of Wisconsin,
Institute for Research on Poverty, 2015.
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Incarceration, in turn, means that the noncustodial parent loses
whatever work he or she may have had, further reducing their ability to
pay their child support. Once out, their ability to find work is
negatively affected, resulting in some turning to the underground
economy, which makes it even more difficult to collect child
support.\61\ One study found that incarceration results in 40 percent
lower earnings upon release.\62\ Moreover, contact between the parent
and child is severed, which, generally, is detrimental to the
child.\63\ And the custodial family loses any other form of support
that this parent provided.\64\
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\61\ The Pew Charitable trusts. Collateral Costs:
Incarceration's Effect on Economic Mobility, September 2010,
available at: http://www.pewtrusts.org/~/media/legacy/uploadedfiles/
pcs_assets/2010/collateralcosts1pdf.pdf; and Judi Bartfeld & Daniel
R. Meyer, Child Support Compliance Among Discretionary and
Nondiscretionary Obligors, 77 Soc. Serv. Rev. 347, 364-65 (2003).
\62\ The Pew Charitable trusts. Collateral Costs:
Incarceration's Effect on Economic Mobility, September 2010,
available at: http://www.pewtrusts.org/~/media/legacy/uploadedfiles/
pcs_assets/2010/collateralcosts1pdf.pdf.
\63\ See Amanda Geller, Carey E. Cooper, Irwin Garfinkel, Ofira
Schwartz-Soicher, and Ronald B. Mincy. ``Beyond Absenteeism: Father
Incarceration and Child Development,'' Demography (2012) 49(1): 49-
76.
\64\ Jeremy Travis and Bruce Western, Eds, The Growth of
Incarceration in the United States: Exploring Causes and
Consequences, National Academy of Sciences, 2014.
---------------------------------------------------------------------------
Most States use civil contempt as a last resort option, recognizing
that routine use of this enforcement tool is not cost effective and can
be counterproductive when the noncustodial parent is indigent.\65\
Since the U.S. Supreme Court's decision in Turner v. Rogers, some
States have gone further and implemented significant changes to their
contempt process to further ensure that indigent noncustodial parents
are not wrongly incarcerated for child support debt.\66\ These changes
include implementing case screening, new referral procedures,
developing new information and forms, and requiring specific findings
by the court on the present ability to pay the ordered purge amount to
ensure accurate and defensible orders.\67\
---------------------------------------------------------------------------
\65\ Carmen Solomon-Fears, Alison M. Smith, and Carla Berry,
Child Support Enforcement: Incarceration, As the Last Resort Penalty
For Nonpayment of Support, Congressional Research Service R42389,
2012, which is available at: http://greenbook.waysandmeans.house.gov/sites/greenbook.waysandmeans.house.gov/files/2012/documents/R42389_gb.pdf.
\66\ Mary Pat Gallagher, ``Court Takes Steps To Protect Rights
of Poor Child-Support Delinquents'' New Jersey Law Journal, 2014;
Ethan C. McKinney, ``Contempt After Turner'' Presentation at 2014
Annual Conference, Eastern Regional Interstate Child Support
Association, 2014, which is available at: http://www.ericsa.org/2014-conference-agenda-handouts; Pam Lowry, ``Rebalancing the
Program Through Conversation with All Staff'' Child Support Report
34(10): 1 (October-November 2012), which is available at: http://www.acf.hhs.gov/sites/default/files/programs/css/csr1211.pdf.
\67\ Pamela Lowry and Diane Potts, Illinois Update on Using
Civil Contempt to Collect Child Support; Ethan C. McKinney (2014)
``Contempt After Turner'' Presentation at 2014 Annual Conference,
Eastern Regional Interstate Child Support Association, which is
available at: http://www.ericsa.org/2014-conference-agenda-handouts.
---------------------------------------------------------------------------
Finally, the government's interests also favor additional
procedural safeguards to ensure that only those parents with a present
ability to pay are confined for civil contempt. While the State has a
strong interest in enforcing child support orders, it secures no
benefit from jailing a noncustodial parent who cannot discharge his
obligation. The period of incarceration makes it less, rather than
more, likely that such parent will be able to pay child support.\68\
Meanwhile, the State incurs the substantial expense of confinement.
While child-support recovery efforts once ``followed a business model
predicated on enforcement'' that ``intervened only after debt, at times
substantial, accumulated and often too late for collection to be
successful, let alone of real value to the child,'' experience has
shown that alternative methods--such as order modifications, increased
contact with noncustodial parents, and use of ``automation to detect
non-compliance as early as possible''--are more effective than routine
enforcement through civil contempt.\69\
---------------------------------------------------------------------------
\68\ See Elizabeth G. Patterson, Civil Contempt & the Indigent
Child Support Obligor: The Silent Return of Debtor's Prison, 18
Cornell Journal of Law & Public Policy 95, 126 (2008) (Civil
Contempt), available at: http://www.lawschool.cornell.edu/research/jlpp/upload/patterson.pdf.
\69\ See National Child Support Enforcement, U.S. Dep't of
Health & Human Services, Strategic Plan: FY 2005-2009, at 2, 10
(Strategic Plan), http://www.acf.hhs.gov/programs/css/resource/national-child-support-enforcement-strategic-plan-fy2005-2009.
---------------------------------------------------------------------------
3. Comment: Several commenters expressed concerns that the proposed
requirements related to civil contempt proceedings would reduce the
efficiency and flexibility of the enforcement process through the
courts. One commenter thought that the NPRM would weaken the
enforcement remedy of contempt when used to enforce the obligation of
contemnors who have an ability to arrange payments from assets held by
others, even though the IV-D agency had been unable to affirmatively
show the existence of income and assets. One commenter thought that the
proposed requirements would be overly burdensome in civil contempt
proceedings involving chronic nonpayers. Another commenter thought that
the NPRM would result in increases in court and attorney time necessary
to comply with all of the new requirements or would translate into less
court resources available for other child support actions, such as
establishment and modification actions.
Response: We do not agree with these comments. Based on comments,
the revisions to Sec. 303.6(c)(4) are designed to reduce the risk of
an erroneous deprivation of liberty without imposing significant fiscal
or administrative burden on the State.
Research shows that implementing constitutional due process
safeguards, such as those delineated in the Turner decision, increases
compliance with court orders by increasing litigants' perception of
fair treatment.\70\ Procedural fairness matters to litigants and
influences their behavior. The safeguards included in Turner are
designed to provide procedural fairness.
---------------------------------------------------------------------------
\70\ See Kevin Burke & Steve Leben's report ``Procedural
Fairness: A Key Ingredient in Public Satisfaction,'' A White Paper
of the American Judges Association, Court Review 44:1/2, available
at: http://www.proceduralfairness.org/~/media/Microsites/Files/
procedural-fairness/Burke_Leben.ashx.
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[[Page 93534]]
In Turner, the Court noted ``the routine use of contempt for non-
payment of child support is likely to be an ineffective strategy'' over
the long-term.\71\ Contempt actions are expensive and time consuming
for courts, agencies, and parents, and do not typically result in
ongoing support for children. One State finds that contempt is its
least cost-effective enforcement tool, estimating that collections in
contempt actions barely break even with the costs--for every dollar
spent on contempt proceedings, the State collects $1.26.\72\ Another
State found that when it cut back on its routine use of contempt
hearings and increased use of administrative locate and enforcement
remedies, total collections increased.\73\ Resources put into
investigations, ``appear and disclose'' procedures, parent interviews,
case conferencing, and expanded data sources are generally a more cost-
effective use of Federal and State dollars than using contempt hearings
in order to discover information.
---------------------------------------------------------------------------
\71\ Turner, 131 S. Ct. at 2516 (quoting Brief for United States
as Amicus Curiae at 21-22, and n. 8), available at: http://www.justice.gov/sites/default/files/osg/briefs/2010/01/01/2010-0010.mer.ami.pdf.
\72\ Ann Coffin, Florida's Data Analytics: Compliance of Support
Orders, Presentation to the OCSE Strategic Planning Workgroup on
Measuring Child Support Performance, 2014.
\73\ Lowry, Pamela and Diane Potts, ``Illinois Update On Using
Civil Contempt To Collect Child Support.''
---------------------------------------------------------------------------
States must provide adequate safeguards to ensure that the
noncustodial parent has the ability to comply with the order. The
revised language in paragraph (c)(4) sets out minimum requirements that
IV-D agencies must meet when bringing a civil contempt action involving
parties in a IV-D case and ensures that contempt is used in appropriate
cases where evidence exists that the noncustodial parent has the income
and assets to pay the ordered monthly support obligation, but willfully
fails to do so, and the purge amount or conditions are within the
noncustodial parent's ability to pay or meet.
It is the responsibility of the IV-D agency to ensure that prior to
filing for civil contempt that could result in incarceration, the IV-D
agency has carefully reviewed each case to ascertain whether the facts
would support a finding that the noncustodial parent has the ``actual
and present'' ability to comply with the support order, and the
requested purge amount or condition, and to bring those facts to the
court's attention.\74\ States must also provide clear notice to the
noncustodial parent that his or her ability to pay constitutes the
critical question in the contempt action.
---------------------------------------------------------------------------
\74\ See U.S. Department of Justice, Civil Rights Division,
Office for Access to Justice, Dear Colleague Letter, March 14, 2016,
https://www.justice.gov/crt/file/832461/download, cited in OCSE Dear
Colleague Letter, DCL-16-05, March 21, 2016, http://www.acf.hhs.gov/programs/css/resource/justice-department-annnounces-resources-to-reform-practices.
---------------------------------------------------------------------------
OCSE strongly encourages State child support agencies to consider
some of the innovative alternatives to incarceration put into practice
by a number of States and discussed in OCSE IM-12-01.\75\ In addition,
it is the noncustodial parent, not other relatives, friends, or the
custodial parent, who is responsible for child support based upon his
or her ability to pay it. A procedure that pressures family members and
friends to pay in order to keep the noncustodial parent out of jail is
inconsistent with constitutional principles, damaging to family
relationships, and ultimately ineffective and counterproductive in
obtaining ongoing support for children. As a practical matter, reliance
on relatives and friends likely will not result in regular support
payments for the families.
---------------------------------------------------------------------------
\75\ IM-12-01 is available at: http://www.acf.hhs.gov/programs/css/resource/alternatives-to-incarceration.
---------------------------------------------------------------------------
4. Comment: One commenter indicated that any reference in Sec.
303.6 to the noncustodial parent's subsistence needs or actual
earnings/income should be replaced with a reference to the noncustodial
parent's ability to pay.
Response: In Sec. 303.6(c)(4), we have revised the proposed
language to delete reference to the noncustodial parent's subsistence
needs as a separate determination, and instead reference to the
noncustodial parent's ability to pay the child support order or ability
to comply with the order. However, subsistence needs are an inherent
factor in determining a noncustodial parent's ability to pay. Everyone,
even noncustodial parents, have basic self-support needs, including
food and shelter that cannot be ignored when determining ability to
pay.
5. Comment: One commenter indicated that States do not file
contempt proceedings as fishing expeditions, but rather file them
solely to use the jail power to coerce compliance with a support order
after the agency has exhausted administrative enforcement remedies and
has screened the case for contempt. States often file contempt
proceedings against noncustodial parents who hide income, are willing
to lie in court, work at cash jobs, and have other ways to make
themselves look unable to pay support. The commenter believed that our
proposed requirements would actually serve to limit child support
collections on the tough to collect cases.
Response: State practice related to contempt proceedings varies
widely. We are encouraged that some States are already using
administrative enforcement remedies and case screening prior to
initiating civil contempt proceedings. Contempt actions should be used
selectively in those cases when the facts warrant its use, not
routinely, especially in nonpaying cases where the reason for
nonpayment is low income. Contempt is an important tool for collection
of child support when used in appropriate cases where evidence exists
that the noncustodial parent has the income and assets to pay the
ordered monthly support obligation, but willfully fails to do so, and
the purge amount or conditions are within the noncustodial parent's
ability to pay or meet. However, routine contempt actions and the
threat of jail are not a cost-effective way to conduct discovery. The
Turner opinion provides the child support program with a guide for
conducting fundamentally fair and constitutionally acceptable
proceedings. The revisions to Sec. 303.6(c)(4) are designed to reduce
the risk of erroneous deprivation of the noncustodial parent's liberty
in IV-D cases consistent with the Turner decision, without imposing
significant fiscal or administrative burden on the State.
We agree that filing for contempt may be the right remedy in some
difficult to collect cases--those where there is evidence that the
noncustodial parent has the ability to pay, but chooses to ignore child
support obligations. However, if a case is difficult to collect because
the noncustodial parent lacks the ability to pay support, there are
more effective and less costly tools that meet due process
requirements. Sometimes, the IV-D agency does not have sufficient facts
to determine the difference. We recognize that it is difficult to build
a case. It is our position, however, that State IV-D agencies have the
responsibility to investigate and screen the case for ability to pay
before bringing a civil contempt action that can lead to jail. States
need to develop and implement procedures and protocols for determining
when it is effective to use contempt proceedings in IV-D cases. States
need to ensure that the tools or mechanisms they use to enforce cases
are cost-effective, productive, and in the best interest of the
children.
6. Comment: Several commenters expressed concerns that the proposed
provision related to civil contempt
[[Page 93535]]
proceedings inappropriately shifts the burden of proof. They believed
that the noncustodial parent would no longer have to prove his or her
inability to pay; rather, the IV-D agency would have to prove the
noncustodial parent's ability to pay. Another commenter thought that a
rule shifting the burden to the IV-D agency to show evidence of ability
to pay would necessitate more discovery that would increase the expense
of and slow down the completion of IV-D enforcement judicial actions.
This same commenter indicated that even if the noncustodial parent is
an employee paid in a documented form, the State staff cannot use
records of wages as documentary evidence due to limitations on the use
of workforce wage records by State law.
Response: We appreciate the difficulty of discovering information
regarding ability to pay in some cases. However, State practices
related to the use of contempt actions vary widely. We point out that
many States build cases by using sound investigative practices and
making efforts to talk with both parents before scheduling court
hearings. All States should maximize their use of automated data
sources. Additionally, many States use clear, easy to read forms
seeking financial information from the parents. Other States routinely
interview the parents, either through phone contacts, case
conferencing, or compelled ``appear and disclosure'' administrative
procedures, all of which impose little expense on the State or burden
on the proceedings, but would help increase the accuracy of the court's
determination. These simple, minimally burdensome procedures would
enable the IV-D agency to evaluate whether the noncustodial parent has
the ability to comply with the support obligation.
The final rule does not address burden of proof. Rather, when the
State considers bringing a civil contempt action in a IV-D case that
can result in incarceration, often against an unrepresented, indigent
noncustodial parent, the rule requires the IV-D agency to screen the
case for ability to pay and, if proceeding with the contempt action,
provide such evidence for the court to consider, in conjunction with
any other evidence, in making a factual determination about the
noncustodial parent's ability to pay child support.\76\
---------------------------------------------------------------------------
\76\ See U.S. Department of Justice, Civil Rights Division,
Office for Access to Justice, Dear Colleague Letter, March 14, 2016,
https://www.justice.gov/crt/file/832461/download, cited in OCSE Dear
Colleague Letter, DCL-16-05, March 21, 2016, http://www.acf.hhs.gov/programs/css/resource/justice-department-annnounces-resources-to-reform-practices.
---------------------------------------------------------------------------
7. Comment: One commenter thought that the proposed amendment
related to civil contempt was irreconcilable with the intent and other
terms of Sec. 303.6, which provides State agencies with authority to
take certain enforcement actions. The commenter believed that the
proposed amendment unduly restricts judicial enforcement actions in
civil contempt cases and requested OCSE to strike the proposed
provision.
Response: As we indicated in AT-12-01,\77\ the Federal government
has ``an interest in ensuring the constitutional principles articulated
in Turner are carried out in the child support program, that child
support case outcomes are just and comport with due process, and that
enforcement proceedings are cost-effective and in the best interest of
the children.'' Civil contempt is different from other enforcement
actions. It can lead to a loss of liberty through incarceration. Due
process safeguards related to contempt actions are particularly
important when the noncustodial parent is unrepresented, and has
limited income and education. Too often, civil contempt proceedings are
brought in some jurisdictions to enforce an underlying support order
based on fictitious income that has been imputed to the noncustodial
parent. Additionally, since the noncustodial parents often face
attorneys in court, it is especially important that the State ensures
that appropriate procedural safeguards are provided in IV-D cases
enforced through contempt proceedings. Our objective is to prevent a
cascade of legal consequences that begins with an order based on
imputed income and ends in nonpayment and incarceration. For some
defendants, what is missing at critical points in the process is
evidence of ability to pay. Given the importance of the interest at
stake in civil contempt proceedings, it is especially important that
IV-D case procedures promote a fair hearing and accurate determination
supported by the facts with respect to the key question in the case,
ability to pay, such that any confinement imposed on a noncustodial
parent is remedial rather than punitive.
---------------------------------------------------------------------------
\77\ AT-12-01 is available at: http://www.acf.hhs.gov/programs/css/resource/turner-v-rogers-guidance.
---------------------------------------------------------------------------
8. Comment: One commenter suggested the following revision to our
NPRM: ``Have procedures ensuring that civil contempt proceedings are
initiated after considering the noncustodial parent's ability to earn
income and that parent's subsistence needs, if known. IV-D agencies
shall provide the court with information regarding the noncustodial
parent's ability to comply when requesting a finding of contempt and a
purge amount.''
Response: We agree. The revision to proposed Sec. 303.6(c)(4)
reflects this suggestion but we deleted the reference to the
noncustodial parent's subsistence needs as a separate determination
from ability to pay.
9. Comment: One commenter questioned how to proceed in a case where
there is no evidence that the defendant has the ability to pay either
the ordered amount or the purge amount. Another commenter asked how the
State IV-D agency will initiate a civil contempt if it has no earnings
information on the noncustodial parent.
Response: If the noncustodial parent has no earnings or there is no
evidence that the noncustodial parent has the ability to pay, the IV-D
agency should not initiate civil contempt proceedings, but should
investigate further, consider whether the support obligation should be
modified, and refer the parent to employment or other services when
available. See also the response to Comment 6 above regarding State
strategies and practices for the appropriate use of contempt in IV-D
cases.
10. Comment: What is the process by which a noncustodial parent
would be ordered to participate in an ``alternative to incarceration''
program if his lack of actual income precludes the possibility of
incarceration for contempt?
Response: The language of the rule includes the clause ``ability to
pay or otherwise comply with the order.'' If the order requires the
noncustodial parent to participate in services, and the court finds
based on the evidence, after notice and other safeguards, that the
noncustodial parent is able to comply with the order, the requirements
of the rule have been met. Several child support agency programs have
implemented proactive and early intervention practices to address the
underlying reasons for unpaid child support and avoid the need for
civil contempt proceedings leading to jail time. In OCSE IM-12-01,\78\
we describe promising and evidence-based practices to help States
increase reliable child support payments, improve access to justice to
parents without attorneys, and reduce the need for jail time.
Incarceration may be appropriate in those cases where noncustodial
parents have the means to support their
[[Page 93536]]
children but willfully evade their parental responsibilities by hiding
income and assets. However, several innovative strategies can reduce
the need for routine civil contempt proceedings in cases involving low-
income noncustodial parents, increase ongoing collections, and reduce
costs to the public. Research suggests that such practices can actually
improve compliance with child support orders, increasing both the
amount of child support collected and the consistency of payment.\79\
These practices include early engagement and efforts to contact and
talk with both parents, increasing investigative and locate efforts,
and setting accurate orders based upon the noncustodial parent's actual
income,\80\ improving review and adjustment processes,\81\ developing
debt management programs,\82\ implementing work-oriented programs for
unemployed noncustodial parents who are behind in their child
support,\83\ working with fatherhood and other community based programs
as intermediaries, and encouraging mediation and case conferencing to
resolve issues that interfere with consistent child support
payments.\84\
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\78\ OCSE-IM-12-01 is available at: http://www.acf.hhs.gov/programs/css/resource/alternatives-to-incarceration.
\79\ See Jessica Pearson, Nancy Thoennes, and Lanae Davis, Early
Intervention in Child Support. Center for Policy Research, 2007,
which is available at: http://www.centerforpolicyresearch.org/Publications/tabid/233/Default.aspx.
\80\ Mark Takayesu, How Do Child Support Order Amounts Affect
Payments and Compliance?, Orange County Child Support Services,
2011, which is available at: http://www.wuss.org/proceedings12/37.pdf..
\81\ U.S. Department of Health and Human Services, Using
Automated Data Systems To Establish and Modify Child Support Orders,
November 2006, which is available at: http://www.acf.hhs.gov/sites/default/files/ocse/dcl_07_32a.pdf.
\82\ Carolyn Heinrich, Brett Burkhardt, and Hilary Shager,
Reducing Child Support Debt and Its Consequences: Can Forgiveness
Benefit All?, Journal of Policy Analysis and Management, 30(4); 755-
774, 2011, which is available at: https://www.lafollette.wisc.edu/images/publications/workingpapers/heinrich2010-018.pdf.
\83\ Daniel Schroeder and Nicholas Doughty, Texas Non-Custodial
Parent Choices: Program Impact Analysis, Ray Marshall Center for the
Study of Human Resources, Lyndon B. Johnson School of Public
Affairs, The University of Texas at Austin, 2009, which is available
at: https://www.utexas.edu/research/cshr/pubs/pdf/NCP_Choices_Final_Sep_03_2009.pdf. Also see Kye Lippold and Elaine
Sorensen's report, Strengthening Families Through Stronger Fathers:
Final Impact Report for the Pilot Employment Programs, Urban
Institute, 2011, which is available at: http://www.urban.org/research/publication/strengthening-families-through-stronger-fathers-final-impact-report-pilot-employment-programs/view/full_report.
\84\ Elaine Sorensen and Tess Tannehil, Preventing Child Support
Arrears in Texas by Improving Front-end Processes, Urban Institute,
2006, which is available at: http://www.urban.org/research/publication/preventing-child-support-arrears-texas-improving-front-end-processes/view/full_report.
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Purge Amounts: [Sec. 303.6(c)(4)]
1. Comment: One commenter thought that requiring purges be based on
an evidentiary finding is unnecessary, beyond the scope of Turner, and
has an unintended effect of delaying the efficiency of an expedited
child support proceeding. Two other commenters thought that the
proposed purge language was too restrictive and added unnecessary
complexity to a fairly simple process.
Response: Although we have revised Sec. 303.6(c)(4) significantly
based on our consideration of the comments related to civil contempt,
we do not necessarily agree with the interpretation of Turner presented
in some of these comments. At issue are safeguards of obligors'
constitutionally-protected liberty and property interests. We are
requiring that State IV-D agencies provide the court with available
information, which may assist the court in making a factual
determination regarding the obligor's ability to pay the purge amount
or comply with the purge conditions. As noted in Turner, under
established Supreme Court principles, ``[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.'' \85\ The Court found that the noncustodial
parent's ability to pay constitutes ``the critical question in the
case.'' The revisions to Sec. 303.6(c)(4) require the IV-D agency to
assist the court by providing such information, thereby reducing the
risk of erroneous deprivation of the noncustodial parent's liberty in
IV-D cases, without imposing significant fiscal or administrative
burden on the State.
---------------------------------------------------------------------------
\85\ Turner, 131 S. Ct. at 2516 (quoting Hicks v. Feiock, 485 U.
S. 624, 638, n. 9).
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2. Comment: Several commenters stated that the court makes the
determination of what amount a noncustodial parent must pay to avoid
incarceration. They indicated that the IV-D agency cannot control what
the court ultimately sets as the amount. Two commenters believed that
the proposed requirement related to a purge amount usurped the court's
authority and discretion.
Response: We expect that State courts will adhere with the
constitutional due process principles. However, in most States, it is
the IV-D agency or the court, through cooperative agreement with the
IV-D agency that initiates contempt actions in IV-D cases. Before
filing a contempt action, the IV-D agency has a responsibility to the
parties and to the court to screen the IV-D case for ability to pay,
and if proceeding with the contempt action, provide the court with such
evidence. In addition, the IV-D agency may be able to contribute to
judicial educational efforts to foster awareness of the need to set
purge amounts based on ability to pay and enter an express finding that
the noncustodial parent has the ability to pay the purge amount or
comply with the purge conditions, consistent with the Turner decision.
3. Comment: Several commenters stated that they thought purge
amounts should not be based on actual income. One commenter thought
that the proposed language related to purge amounts disregarded the
many cases in which the noncustodial parent is voluntarily unemployed
and is being provided living expenses by another person; the commenter
thought the language should focus on ``all available income'' instead
of ``actual income.'' Another commenter indicated that the proposed
provision could consistently hamper a judge's ability to enforce child
support orders intended to benefit children. One commenter thought that
requiring IV-D agencies to consider actual earnings prior to filing a
contempt motion or recommending a purge amount limited agencies'
options, especially in regards to parents who work in the underground
economy or refuse to work. This commenter also thought that although a
nonmonetary purge condition requiring participation in a job search or
other similar activity was certainly appropriate in a situation when
there is significant question as to a noncustodial parent's ability to
comply with a financial purge, but the availability of a monetary purge
remained essential for individuals who will only take support
obligations seriously when a monetary purge is set and their freedom is
at risk.
Response: We have revised the proposed language. The revised rule
focuses on ensuring that the State IV-D agency establishes guidelines
for the appropriate use of contempt in IV-D cases to ensure that
constitutional procedural safeguards are provided in all IV-D cases by
requiring that such guidelines include that the State screens the case
for information regarding the obligor's ability to pay or otherwise
comply with the order. The State must also provide the court with such
information regarding the noncustodial parent's ability to pay, or
otherwise comply with the order, to assist the court in making a
factual determination regarding the noncustodial parent's ability to
pay the purge amount or comply with any other purge conditions that may
be set by the court. The State child support agency could provide the
[[Page 93537]]
court with financial information received from financial forms sent to
both parents, automated quarterly wage information from the National
Directory of New Hires, as well as other relevant information that the
State has ascertained through testimony, case conferencing, and
investigations. Alternatively, the State could recommend to the court
alternative purge conditions, such as conducting a job search,
obtaining counseling for substance abuse, or obtaining job
training.\86\ The State must also ensure that the noncustodial parent
is provided clear notice that his or her ability to pay constitutes the
critical question in the contempt action.
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\86\ In Bearden v. Georgia, 461 U.S. 660 (1983), the U.S.
Supreme Court held that a State determines a fine or restitution to
be an appropriate penalty, it may not thereafter imprison a person
solely because he lacked the resources to pay for it, but should
instead consider alternative measures.
---------------------------------------------------------------------------
4. Comment: A few commenters suggested alternative language
proposals to what we had in the NPRM. One commenter suggested that: ``A
purge amount must be based upon a court finding that the noncustodial
parent has the actual means to pay the amount.'' Another suggested
revision included: ``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, including
but not limited to any hidden income or assets of the noncustodial
parent, or upon a written evidentiary finding that the noncustodial
parent has failed to make reasonable and diligent efforts to seek
employment.''
Response: OCSE has considered all of the suggested revisions. We
have incorporated into the revised language a requirement that the
purge amount be based upon the defendant's ``ability to pay,''
consistent with the principles articulated in the Turner decision. We
have also incorporated that information about the circumstances of the
cases be provided to the courts based on the State IV-D efforts related
to screening the case. For specifics related to the revised language,
please see Comment/Response 3 in this section.
Section 303.8--Review and Adjustment of Child Support Orders
1. Comment: A few commenters stated that if incarceration is
recognized as a change in circumstance, then the changes to Sec. 303.8
are not necessary because current Federal law and regulation allow
States to conduct accelerated reviews in circumstances that are
identified by States as the most beneficial.
Response: The revisions in this section are necessary to require
all States to either implement Sec. 303.8(b)(2) or (b)(7)(ii) and
provide more specificity regarding review and adjustment and
incarceration. Section 303.8(b)(2) allows States to elect in their
State plan, the option to initiate review and adjustment, without the
need for a specific request, after learning that the noncustodial
parent is incarcerated for more than 180 calendar days. We encourage
States to implement this proactive approach to ensure that orders are
based on the noncustodial parent's ability to pay during his or her
incarceration. A number of States, including Arizona, California,
Michigan, Vermont, and the District of Columbia have enacted State laws
that permit their child support agency to initiate review and
adjustment upon notification that the noncustodial parent has been
incarcerated.\87\ Additionally, if a State does not elect in its State
plan to implement paragraph (b)(2) of this section, then we are
requiring the State, under paragraph (b)(7)(ii), within 15 business
days of when the IV-D agency learns that a noncustodial parent will be
incarcerated for more than 180 calendar days, to send a notice to both
parents informing them of the right to request the State to review and,
if appropriate, adjust the order, consistent with this section.
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\87\ 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 to 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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Further, we agree that incarceration is a factor in determining a
substantial change in circumstance. As such, we have revised Sec.
303.8(c) to indicate that: (c) . . . [s]uch reasonable quantitative
standard must not exclude incarceration as a basis for determining
whether an inconsistency between the existing child support order
amount and the amount of support determined as a result of a review is
adequate grounds for petitioning for adjustment of the order.
2. Comment: A few commenters noted that section 466(10) of the
Social Security Act (the Act) refers to periodic reviews and
establishes a minimum 3-year review cycle ``or such shorter cycles as
the State may determine'' which empowers the States, not OCSE, to
create exceptions to the 3-year review process.
Response: The Secretary of Health and Human Services has authority
under section 452(a)(1) of the Act to ``establish such standards for
locating noncustodial parents, establishing paternity, and obtaining
child support . . . as he determines to be necessary to assure that
such programs will be effective.'' Section 454(13) provides 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.''
3. Comment: A few commenters asked that we clarify the term
``incarceration'' and specify if it includes individuals who are
sentenced, pending trial, on parole, or in a supervised release program
(e.g., half-way house).
Response: Black's Law Dictionary defines ``incarcerated'' as
confined in a jail or penitentiary. Therefore, the review and
adjustment notification requirements do not include noncustodial
parents who are on parole or in a supervised release program. If the
individual has been sentenced, the State may take steps to implement
the notification requirement if the noncustodial parent will be
incarcerated for more than 180 calendar days.
4. Comment: Many commenters had concerns that the proposed 90-day
timeframe was too short and did not allow enough time to review and
modify an order. Commenters requested the timeframe be increased to at
least 6 months.
Response: Consistent with comments, we have extended the timeframe
to 6 months. The current timeframe for review and adjustment, in Sec.
303.8(e), allows 180 calendar days to conduct the review and, if
appropriate, adjust the support order; therefore, in the final rule, we
have increased the incarceration timeframe to 180 calendar days in
Sec. 303.8(b)(2) and added it to paragraph (b)(7)(ii) to align with
the current review and adjustment timeframe.
5. Comment: A few commenters requested that the provision specify a
timeframe when the child support agency has to initiate the review and
adjustment process after learning of the incarceration.
Response: We agree that a timeframe may advance the review and
modification of the child support order process. Therefore, we revised
proposed Sec. 303.8(b)(7)(ii) to include a timeframe of 15 business
days to initiate the review and adjustment process after
[[Page 93538]]
learning that the noncustodial parent is incarcerated.
6. Comment: One commenter indicated that the proposed Sec.
303.8(b)(7)(ii) requires the State to send notice of the parents' right
to review their order when the IV-D agency learns of the noncustodial
parent's incarceration without any minimum time period. For instance,
the State could learn of the noncustodial parent's incarceration on day
88 of a 90-day sentence and, under the NPRM, the IV-D agency would need
to send notice to both parties even though the potential reason for the
modification ends 2 days later. According to the commenter, the
provision should include a minimum time period before the IV-D agency
is required to give notice of the right to review and any timeframe
should begin only after the State learns of the incarceration.
Regardless of the length of incarceration, it only matters how much
time remains once the State learns of the incarceration, since the
modification can only apply going forward.
Response: The timeframe ``more than 180 calendar days'' in both
Sec. 303.8(b)(2) and (b)(7)(ii) is applicable based on the date the
IV-D agency learns the noncustodial parent is incarcerated. For
instance, if the State learns of the noncustodial parent's
incarceration on day 8 of a 200-day sentence, then this provision would
apply since the noncustodial parent still has 192 days remaining in his
or her sentence. However, if the State learns of the noncustodial
parent's incarceration on day 178 of an 180-day sentence, then this
provision would not apply because the State could not reasonably
complete a review and adjustment process before the parent's release.
7. Comment: A few commenters suggested the requirement to
automatically review and adjust orders, or automatically notify
noncustodial parents of their right to request a review, be expanded to
apply to disabled noncustodial parents receiving SSI, military service
members, and disabled veterans, in addition to incarcerated
noncustodial parents.
Response: The review and adjustment statute at section
466(a)(10)(B) of the Act requires States to review and, if appropriate,
adjust orders following a request by either parent based upon a
substantial change in circumstances--whether due to unemployment,
disability, military service, or incarceration. However, provisions in
Sec. 303.8(b)(2) and (b)(7)(ii) that specifically address automatic
review and adjustment, or automatic notification of the right to a
review and adjustment specifically for incarcerated parents because few
incarcerated parents currently request for their child support orders
to be reviewed and modified. Because incarcerated parents are
involuntarily confined, unlike the other groups of parents mentioned in
the comments, their access to the internet or cell phones often is
restricted due to security concerns. They may not have access to legal
counsel or other community-based resources that could provide timely
information.\88\ In many prisons, incarcerated parents do not know
their rights to request review and adjustment of their orders and
cannot easily contact the child support office. Consequently, their
opportunity to seek information and request a review in time to prevent
the accumulation of unmanageable debts often is limited or non-
existent.\89\
---------------------------------------------------------------------------
\88\ ``Computer use for/by inmates,'' Corrections Compendium 34
(2): 24-31, Summer 2009 http://www.thefreelibrary.com/Computer+use+for%2fby+inmates.-a0208273651.
\89\ Gorgol, Laura E., and Brian A. Sponsler, Ed.D., Unlocking
Potential: Results of a National Survey of Postsecondary Education
in State Prisons, Institute for Higher Education Policy, May 2011,
available at: http://www.ihep.org/research/publications/unlocking-potential-results-national-survey-postsecondary-education-state;
U.S. Department of Health and Human Services, Working with
Incarcerated and Released Parents: Lessons from OCSE Grants and
State Programs, 2006, available at: www.acf.hhs.gov/programs/css/resource/working_with_incarcerated_resource_guide.pdf; and Council
of State Governments, Report of the Re-entry Policy Council:
Charting the Safe and Successful Return of Prisoners to the
Community, Justice Center, 2005, available at https://csgjusticecenter.org/wp-content/uploads/2013/03/Report-of-the-Reentry-Council.pdf.
---------------------------------------------------------------------------
Research finds that many incarcerated parents do not understand the
child support system and do not know their rights.\90\ Most
incarcerated people prior to incarceration lack a high-school diploma
and are functionally illiterate.\91\ It is important that noncustodial
parents know about their right to request a review and adjustment early
in their prison term because of the direct relationship among
unmanageable child support debt, unemployment, nonpayment, and
recidivism. Because of this, many State child support programs have
implemented outreach strategies designed to educate incarcerated
parents of their rights to request reviews of their support orders.
---------------------------------------------------------------------------
\90\ Jessica Pearson and Esther Ann Griswold, ``Lessons from
Four Projects Dealing with Incarceration and Child Support,''
Corrections Today, July 1, 2005, 67(4): 92-95, which is available
at: http://www.thefreelibrary.com/Lessons+from+four+projects+dealing+with+incarceration+and+child...-a0134293586 and Council of State Governments, Report of the Re-entry
Policy Council: Charting the Safe and Successful Return of Prisoners
to the Community, Justice Center, 2005, available at https://csgjusticecenter.org/wp-content/uploads/2013/03/Report-of-the-Reentry-Council.pdf.
\91\ Harlow, Caroline Wolf Ph.D., Bureau of Justice Statistics
Special Report: Education and Correctional Populations, U.S.
Department of Justice (September 2003), available at: https://www.bjs.gov/content/pub/pdf/ecp.pdf; and Literacy Behind Prisoner
Walls, National Center for Education Statistics, U.S. Department of
Education, Office of Educational Research and Improvement (1994),
available at: http://nces.ed.gov/pubs94/94102.pdf.
---------------------------------------------------------------------------
At the same time, the rule does not preclude States from using
automatic review and adjustment, or automatic notices regarding the
right to request a review and adjustment, in other situations, such as
for disabled noncustodial parents receiving SSI, military service
members, and disabled veterans who experience a substantial change in
circumstances.
8. Comment: Several commenters indicated that changes to State
statutes, administrative rules, and court rules will be required to be
in compliance with this provision. Specifically, one commenter
suggested OCSE align Sec. 302.56, Guidelines for setting child support
orders and this section.
Response: We agree that Sec. Sec. 302.56 and 303.8 are closely
related and both sections may require State statutes, administrative
rules, and court rules changes; therefore, we are delaying the date by
which the States must be in compliance with changes to these sections.
The compliance date for these provisions will be within 1 year after
completion of the State's next quadrennial review of its guidelines,
that commences more than 1 year after publication of the final rule, in
accordance with Sec. 302.56(e), as a condition of approval of its
State plan.
9. Comment: Multiple commenters believed the provision should
exclude persons incarcerated as a result of nonpayment of child
support, a crime committed against any child, or a crime committed
against a party in the child support case.
Response: We do not agree. As discussed in Comment/Response 14 in
Sec. 302.56(d)--Imputing Income subsection, the child support program
is not an extension of the criminal justice system. Establishing,
modifying, or enforcing a child support order is not a form of
punishment for incarcerated noncustodial parents. Parents have a
statutory right to request a review and adjustment of their orders
based on a substantial change of circumstances.
10. Comment: Several commenters noted there is no corresponding
requirement in Sec. 303.8 to notify the parties of the right to
request a review when the obligor has been released from incarceration.
[[Page 93539]]
Response: States have the flexibility to develop procedures for
shorter cycles to review and adjust, if appropriate, the child support
order, including notice to the parties upon release from incarceration.
We strongly encourage States to review child support orders after the
noncustodial parent is released to determine whether the parent has
been able to obtain employment and to set the orders based on the
noncustodial parent's ability to pay. States should not automatically
reinstate the order established prior to incarceration because it may
no longer be based on the noncustodial parent's ability to pay,
especially if the noncustodial parent is not able to find a job or find
a job similar to pre-incarceration employment. A recent study found
that incarceration results in 40 percent lower earnings upon
release.\92\ Instead, the order should be reviewed and adjusted
according to the State's guidelines under Sec. 302.56.
---------------------------------------------------------------------------
\92\ The Pew Charitable Trusts, Collateral Costs:
Incarceration's Effect on Economic Mobility, September 2010,
available at: http://www.pewtrusts.org/~/media/legacy/uploadedfiles/
pcs_assets/2010/collateralcosts1pdf.pdf.
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11. Comment: A few commenters expressed concern that learning of
noncustodial parents' incarceration or locating noncustodial parents in
correctional facilities would require some sort of interface with
Federal, State, local, and private prisons.\93\ According to the
commenters, the new requirements also presume that there would be some
sort of Federal match with Federal prisons. A few commenters also asked
whether they had to actively seek out incarcerated noncustodial parents
for review and adjustment and send notifications as required in
paragraph (b)(7)(ii), as this may be difficult since inmates move to
different facilities throughout their incarceration.
---------------------------------------------------------------------------
\93\ Private prison or for-profit prison is a place in which
individuals are physically confined or incarcerated by a third party
that is contracted by a government agency.
---------------------------------------------------------------------------
Response: We encourage, but are not requiring, States to actively
establish and maintain partnerships with Federal, State, local, and
private prisons to conduct matches to locate, as well as to educate
incarcerated parents about the child support program. As discussed in
more detail in Comment/Response 3 in Sec. 303.3--Location of
Noncustodial Parents in IV-D Cases, currently, section 453(e)(2) of the
Act authorizes the Secretary of the Department of Health and Human
Services to obtain information from Federal agencies including the
Bureau of Prisons (BOP). However, this match does not provide States
with needed information regarding release dates. We are going to
explore the option to interface directly with the BOP and/or State
facilities in order to obtain additional or updated information. We
encourage States to develop electronic interfaces with corrections
institutions to maximize identification of incarcerated parents and
program efficiency.
12. Comment: A commenter stated that ``upon request'' in proposed
Sec. 303.8(b)(7)(ii) is unnecessary because it implies that a party
must request an adjustment following completion of the review.
Response: We agree and have replaced ``upon request'' with ``if
appropriate.'' This revision aligns paragraph (b)(7)(ii) with the
language in paragraph (b)(2).
13. Comment: One commenter indicated that, under one State's law,
arrears that accrued during incarceration are modified as needed after
the parent is released.
Response: Section 466(a)(9)(c) of the Act prohibits retroactive
modification of child support orders except that such procedures may
permit modification with respect to any period when there is a petition
pending for modification, but only from the date that notice of such
petition has been given to the parties. In situations where a parent
requests a review and adjustment of the order, States may modify, if
appropriate, the order back to the date the request is made to avoid
the accumulation of arrearages. States need to ensure that their State
laws are consistent with the provisions of the Act.
14. Comment: A commenter requested that OCSE provide guidance on
whether a State that is taking steps under Sec. 303.11(b)(8) to close
a case due to the incarceration status of the noncustodial parent
should first modify the child support obligation.
Response: Closing a case does not affect the legality of the
underlying child support order and the order, including any payment or
installment of support such as payment on arrearages due under the
order, remains in effect and legally binding. Therefore, based on the
reasons that a case is being closed, it may be appropriate in a
specific case for the IV-D agency to take steps to review and adjust an
order, if appropriate, prior to closing the child support case. See
Comment/Response 5 in Sec. 303.11, Case Closure Criteria.
15. Comment: A couple of commenters stated that it is too time
consuming and costly to close a case under Sec. 303.11(b)(8) and then
initiate a new case once a parent is released.
Response: The review and adjustment revisions under Sec. 303.8 are
not intended to encourage States to close cases when the noncustodial
parent is incarcerated and reopen them when parents are out of prison.
Rather, the provisions pertain to child support order review and
adjustment when the noncustodial parent is incarcerated and based on
the parent's ability to pay. Cases should not be closed under Sec.
303.11(b)(8) when the noncustodial parent is incarcerated and then
reopened when the noncustodial parent is released. A case can only be
closed under Sec. 303.11(b)(8) if the noncustodial parent is
incarcerated throughout the duration of the child's minority (or after
the child has reached the age of majority) and there is no income or
assets available above the subsistence level that could be levied or
attached. If the noncustodial parent is incarcerated for only a limited
period of time, the case should not be closed. States can only close
cases in accordance with the criteria under Sec. 303.11(b) and (c).
16. Comment: Multiple commenters feel there should still be a
burden of proof and believe that just because the noncustodial parent
is incarcerated does not mean that the noncustodial parent has no
resources. The parent's ability to pay may change multiple times while
incarcerated, for example, when the parent is on work release.
Response: Some States automatically reduce a support order when a
parent is incarcerated, while other States consider incarceration as
one factor in determining whether to adjust a support order.\94\ States
should apply their child support guidelines, based on the noncustodial
parent's ability to pay, and determine whether the parent has income or
assets available that could be levied or attached for support, whether
or not a parent is incarcerated.
---------------------------------------------------------------------------
\94\ Jennifer L. Noyes, Maria Cancian, and Laura Cuesta, Holding
Child Support Orders of Incarcerated Payers in Abeyance: Final
Evaluation Report, 2012, available at: http://www.irp.wisc.edu/research/childsup/cspolicy/pdfs/2009-11/Task1_CS2009-11-MPP-Report.pdf; in addition, see related PowerPoint presentation
available at http://www.irp.wisc.edu/research/childsup/cspolicy/pdfs/2009-11/Task1-CS2009-11-MPP-PPT.pdf
---------------------------------------------------------------------------
17. Comment: A few commenters noted that if the notification in
Sec. 303.8(b)(7)(ii) is separate and distinct from the 3-year review,
this will require a system change and incur costs.
Response: We agree this will require a State to make a minor system
change; these costs were considered in the development of this rule.
18. Comment: Several commenters indicated that the requirement in
Sec. 303.8(b)(7)(ii) is redundant since their existing State statute,
administrative rules, and court rules allow for the
[[Page 93540]]
modification of a child support obligation upon incarceration by
operation of law.
Response: We agree. Therefore, we added a sentence to the end of
Sec. 303.8(b)(7)(ii) to acknowledge that neither the notice nor a
review is required under this paragraph if the State has a comparable
State law or rule that modifies a child support obligation upon
incarceration by operation of State law.
19. Comment: One commenter expressed concern with the NPRM at Sec.
303.8(d) indicating a need for a threshold for when to review and
adjust an order for health care needs similar to those used by States
to require a review and adjustment for the child support awards.
Without these thresholds, the commenter suggests that State child
support agencies will face heavy workloads to modify these orders.
Response: OCSE has historically left the particular criteria for
support order modifications up to States and their child support
guidelines. However, when an order lacks a medical support provision,
the situation warrants immediate attention for modification to remedy
the medical support issue. By removing the sentence in Sec. 303.8(d)
which previously required States to review and adjust support orders to
address health care coverage for child(ren) eligible for or receiving
Medicaid benefits, we are making the requirement for review and
adjustment less restrictive.
20. Comment: Several commenters indicated that the proposed
revision in Sec. 303.8(d) will require significant legislative,
guidelines, and policy changes which will impact on its ability to
implement this revision.
Response: We understand the commenters concerns that this will
require changes. Therefore, we have made the effective dates for this
section the same as the dates for Guidelines for setting child support
awards. For further details see Comment/Response 2 in the Dates
section.
21. Comment: Some commenters expressed their dissatisfaction with
the deletion of the last sentence in Sec. 303.8(d) feeling that it was
an inadequate approach to aligning child support regulations fully with
the Affordable Care Act.
Response: OCSE recognizes the tensions between the Social Security
Act and provisions in the ACA when it comes to medical support. We
aligned our regulatory requirements as closely as possible with the ACA
within existing authority. In this particular section, we simply
removed the last sentence in paragraph (d), which conflicted with the
ACA notion of what constitutes medical coverage and to conform to our
revisions in Sec. 303.31. The final regulations allow States more
flexibility to coordinate medical support practices with the
requirements of the ACA.
22. Comment: One State expressed the need for clarification on
whether the proposed changes require the State to modify the language
in an order to indicate that Medicaid coverage was sufficient for
meeting the child's medical needs.
Response: Eliminating the provision that indicates that Medicaid
cannot be considered sufficient does not necessarily mean that Medicaid
must be considered sufficient in every case. There are circumstances in
which Medicaid coverage may not be sufficient to meet a child's full
needs. Therefore, OCSE has chosen not to prescribe how State child
support agencies address medical support provisions in their orders.
However, OCSE encourages States to consider adopting a broad medical
support provision that encompasses all of the medical coverage options
available to families under the ACA.
23. Comment: One State concluded their comment by requesting OCSE
wait to modify medical support regulations until the time that the
Social Security Act is consistent with the ACA.
Response: While we understand the frustration in the child support
community regarding the inconsistencies between the ACA and the Social
Security Act regarding medical enforcement, we have tried to align our
regulations as much as possible with the new policy environment under
the ACA, consistent with title IV-D. However, sections 452(f) and
466(a)(19) of the Social Security Act require specific medical support
activities to be performed by State child support agencies.
24. Comment: One commenter opposed the proposed changes to the
regulations in Sec. 303.8(d) citing that private insurance should be
enforced when it becomes available to an obligated parent and the
child(ren) is(are) receiving public forms of coverage like Medicaid.
Response: See Comment/Response 2 in Sec. 303.31, Securing and
Enforcing Medical Support Obligations of this final rule.
Section 303.11--Case Closure Criteria (Including 45 CFR 433.152(b)(1))
1. Comment: Several commenters indicated their preference for
keeping case closure optional, especially for a State that recoups
assigned arrears. Some commenters expressed concerns about how the
greater flexibility to close cases would impact intergovernmental
consistency and program performance. A few commenters recommended
making case closure mandatory or requiring States to have a process for
examining their cases to determine if they meet one of the case closure
criteria and then consider closing them.
Response: The goal of the case closure regulation is not to mandate
that cases be closed, but rather to clarify conditions under which
States may close cases. The changes to the case closure regulation
allows a State to direct resources to cases where collections are
possible and to ensure that families have more control over whether to
receive child support services. A decision to close a case is linked
with notice to the recipient of services of the intent to close the
case and an opportunity to respond with information or a request that
the case be kept open.
OCSE has determined that this final rule strikes the appropriate
balance between providing States with additional flexibility in closing
cases that are unlikely to result in successful child support actions
and ensuring families receive effective child support enforcement
services. We do not agree with the commenters' concerns that the
expanded case closure criteria will put some States at a competitive
disadvantage. States make many decisions that affect their performance
rates. For example, one State might charge interest and another might
not or one State might adopt family-first distributions and another
might not. The decision to close or not close cases with assigned
arrears is at the State's discretion. As we indicated in the NPRM, the
National Council of Child Support Directors provided OCSE with
recommendations for improving the effectiveness and efficiency of the
case closure criteria, ensuring that resources are directed to working
cases and that children receive services whenever there is any
reasonable likelihood for collections in the future. Since case closure
is permissive, a State has the discretion to develop a process for
examining its cases to determine whether case closure is warranted.
2. Comment: One commenter recommended that OCSE limit case closure
to intrastate cases and a decision by the UIFSA initiating State.
Another commenter indicated that the responding State should not
enforce an intergovernmental case that the initiating State would close
if it were an intrastate case.
[[Page 93541]]
Response: A State has the authority to determine when and whether
to close its cases, both intrastate and intergovernmental cases, under
Sec. 303.11. The responding State may not unilaterally or
automatically close its responding case. Rather, the initiating State
makes the case management decisions on its own cases, including its
initiating intergovernmental cases. A responding State may only close a
case under the following circumstances: If it can document
noncooperation by the initiating agency, and provides proper notice to
the initiating agency per paragraph (b)(17); if it is notified that the
initiating State has closed its case per paragraph (b)(18); or if it is
notified that the initiating agency no longer needs its services per
paragraph (b)(19).
3. Comment: A few commenters recommended adding a closure criterion
for when a State no longer has legal jurisdiction in a case.
Response: We disagree with this suggestion because the State must
keep the case open to provide IV-D services, such as to disburse child
support payments when the custodial parent resides in the State.
4. Comment: One commenter recommended deleting the proposed
requirement to maintain supporting documentation in the case record per
Sec. 303.11(b) and allowing a State the flexibility to maintain
information as it determines appropriate.
Response: OCSE disagrees with this recommendation. The requirement
to keep supporting documentation on the case closure decision in a case
record is necessary because it documents whether the case has been
closed appropriately and is evaluated as part of the State's annual
self-assessment reviews.
5. Comment: A commenter requested clarification on whether Sec.
303.11(b)(2) applies to a case in which the recipient of services does
not want the State to collect recipient-owed arrears and there are
state-owed arrearages. Another commenter requested clarification on
using this provision when it conflicts with State law on collecting
state-owed arrears. Another commenter requested guidance on how to
address custodial parent-owed arrears (i.e., unassigned debt) and
noncooperation with the State IV-D agency. Another commenter disagreed
that the State IV-D agency needs approval from TANF or IV-E to close
the case that has an assignment owed to them.
Response: The State cannot use Sec. 303.11(b)(2) to close a case
that has arrearages owed to the State and the recipient of services
(i.e., assigned and unassigned debt). If the arrearages are under $500
and there is no longer a current support order, the State may close the
case in accordance with paragraph (b)(1). Unassigned debt is settled
only at the discretion of the custodial parent by a specific agreement
of the parties. Without this agreement, the State cannot compromise or
remove unassigned debt owed to the custodial parent. When the recipient
of services no longer wants IV-D services, the State may close the case
if it meets one of the case closure criteria under Sec. 303.11. Case
closure does 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
after a case is closed. Since the case closure criterion is optional,
States always have the discretion to keep cases open when there is an
assignment or arrears owed to the State. The decision of whether to
close a case belongs to the State IV-D agency.
6. Comment: Several commenters recommended that OCSE describe the
difference between case closure and order modification, and encourage
States to modify orders to zero before closure pursuant to Sec. Sec.
303.11(b)(5), (8), and (9) to avoid the accrual of arrearages if the
case is reopened.
Response: These case closure provisions provide States with the
flexibility to close uncollectible cases and to direct resources for
cases where collections are possible. When appropriate and after
determining whether the custodial parent wants to continue the case,
the State should consider reviewing and, if appropriate under
Sec. Sec. 303.8 and 302.56, adjusting the order to stop the accrual of
uncollectible debt before closing the case under the appropriate case
closure criterion. Although the IV-D case is closed and no longer
receiving IV-D services, the custodial parent may still pursue
enforcement of the support obligation separately.
7. Comment: Several commenters requested that OCSE define certain
terms used in Sec. Sec. 303.11(b)(3) and (b)(8) and describe the
required documentation to justify closure. One commenter requested
clarification on how States should determine the cost of the care
facility and whether to factor that cost and the receipt of SSA into
the subsistence level under Sec. 303.11(b)(3). The same commenter also
questioned whether the State should investigate or consider the
possibility of retirement plans or financial institution assets and how
to treat combined income (e.g., partial disability, VA disability).
Another commenter questioned whether Sec. 303.11(b)(3) included aging
noncustodial parents requiring minimal services such as meal
preparation or housekeeping. Another commenter questioned whether the
provision for senior citizens might create a special right for a
specific group of noncustodial parents.
Response: OCSE does not plan to define subsistence level, home
health care, or residential facility in the rule. States have the
flexibility and discretion to define these terms. However, please note
that we reference ``subsistence level'' in Sec. 303.11 in a consistent
manner. As we indicated in PIQ-08-02,\95\ States have the discretion to
determine the appropriate methods for verifying whether a case meets
the conditions for case closure. States should use basic audit
standards to determine how to document that a case meets the criteria
for closure. If a State finds that the noncustodial parent has income
or assets which may be levied or attached for support, then the case
must remain open. We disagree with the comment that a case closure
provision that targets low-income residents of long-term care provides
them with a special right. There have been reported instances of old
child support debt, carried well after the children have become adults
and sometimes parents themselves, posing a barrier for aging parents to
obtain assisted housing, basic income, and health care. We believe
enforcement efforts against these noncustodial parents, who have no
income or assets available above the subsistence level that could be
levied or attached for support, are not only ineffective, but are also
an inefficient way to expend child support resources. Case closure is
permissive and the decision should be done on a case-by-case basis.
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\95\ PIQ-08-02 is available at: http://www.acf.hhs.gov/programs/css/resource/noncustodial-receiving-ssi-benefits-and-unable-to-pay-child-support.
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8. Comment: One commenter suggested Sec. 303.11(b)(3) be expanded
to include additional programs that serve individuals with significant
and long-term disabilities and limited income or employment prospects,
such as noncustodial parents who are receiving Adult Protective
Services.
Response: We are not expanding Sec. 303.11(b)(3) to include
additional programs because there are other case closure criteria, such
as paragraph (b)(8) that allows cases to be closed when the
noncustodial parent has a medically-verified total and permanent
disability that will occur throughout the duration of the child's
minority (or after the child has reached the age of majority) if there
[[Page 93542]]
is no income or assets available that could be levied or attached for
support, or paragraph (a)(9) relating to when the noncustodial parent's
income is from SSI payments or from concurrent SSI payments and SSDI
benefits.
9. Comment: One commenter questioned whether an intact two-parent
family referred in Sec. 303.11(b)(5) includes a family that receives
TANF or that has one parent in prison. Another commenter recommended
deleting the phrase ``intact two-parent'' since ``primary caregiver''
was sufficient.
Response: There is no child support eligibility when the family is
intact, whether or not the parent is temporarily physically away from
the family, for example, when one of the parents has found work in
another State. When the State IV-D agency receives a referral involving
an intact two-parent family, the State may close the case based on the
criterion under Sec. 303.11(b)(20). We do not agree with the
recommendation to delete ``intact two-parent'' household because we
believe that it addresses the situation when the custodial and
noncustodial parent continue to function as an intact family or
reconciles, whereas the primary caregiver addresses the situation when
the noncustodial parent becomes the custodial parent.
10. Comment: One commenter questioned whether a State could close a
case in accordance with Sec. 303.11(b)(5) when there is a current
support obligation or arrearage due. Another commenter requested
clarification on how a State should address a case where the custodial
parent in an intact two-parent family wants to keep the case open.
Response: A State may close a case under Sec. 303.11(b)(5) when
there is current support and/or an arrearage due. However, when the
recipient of services wants to continue receiving IV-D services, the
case must remain open.
11. Comment: One commenter questioned whether legal or physical
custody was sufficient to determine that the noncustodial parent is the
primary caregiver, particularly for audit purposes.
Response: A State has the discretion to determine the circumstances
in which a case meets the conditions for closure in accordance with
Sec. 303.11.
12. Comment: Many commenters questioned whether States had the
discretion to add more restrictive language to the case closure
criteria, such as no payments received in the previous six months. A
few commenters requested clarification on whether States have the
flexibility to use longer periods for locating noncustodial parents
than the times specified in Sec. 303.11(b)(7).
Response: Yes, States have such flexibility. As we stated in OCSE
AT-99-04 \96\ and AT-89-15,\97\ there is nothing to prohibit a State
from establishing criteria that make it harder to close a case than
those established under Sec. 303.11. For example, a State may specify
a timeframe in which no payments are received before closing a case to
ensure that all viable cases remain open. The State also has
flexibility to use longer periods for locating noncustodial parents
than the times specified in Sec. 303.11(b)(7). The case closure
provision sets the minimum criteria for determining when a case is
eligible for closure.
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\96\ AT-99-04 is available at: http://www.acf.hhs.gov/programs/css/resource/final-rule-case-closure-criteria-45-cfr-part-303.
\97\ AT-89-15 is available at: http://www.acf.hhs.gov/programs/css/resource/standards-for-program-operations.
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13. Comment: One commenter requested clarification about verifying
the Social Security Number (SSN) per Sec. 303.11(b)(7)(iii) and
handling new leads that do not result in locating the noncustodial
parent.
Response: Although the State has sufficient information to initiate
an automated locate effort, locate interfaces (e.g., Federal Parent
Locator Service (FPLS) and Enumeration and Verification System (EVS))
may not be able to confirm or correct the SSN-name combination for the
person sent. As we stated in the Case Closure Criteria Final Rule, 64
FR 11814, March 10, 1999, Comment/Response 5,\98\ States are required
to comply with Federal locate requirements in Sec. 303.3 and make a
serious and meaningful attempt to identify the biological father (or
any individual sought by the IV-D agency). If the State has made a
diligent effort using multiple sources in accordance with Sec. 303.3,
all of which have been unsuccessful to locate the noncustodial parent,
then the State may close the case in accordance with Sec.
303.11(b)(7).
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\98\ This is available at: http://www.acf.hhs.gov/programs/css/resource/final-rule-case-closure-criteria-45-cfr-part-303.
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14. Comment: Because the case closure provision Sec. 303.11(b)(7)
shortens the length of time for locate attempts, one commenter
recommended expanding locate resources to include verification of
Individual Tax Identification Numbers (ITINs), driver's licenses, or
other unique identifiers.
Response: An analysis is currently underway to assess whether
private sources can identify locate information and/or individuals with
ITINs and locate information associated with ITINs. Additionally, OCSE
is evaluating the possibility of using ITINs to obtain locate
information from current FPLS locate sources, such as Multistate
Financial Institution Data Match (MSFIDM).
15. Comment: One commenter recommended removing the language
``child has reached the age of majority'' in Sec. 303.11(b)(8) and
replacing it with ``after support is no longer due.'' Many commenters
requested clarification regarding what OCSE meant by multiple referrals
for services. One commenter thought that this criterion was too
ambiguous. One commenter opposed adding multiple referrals for service
as a case closure criterion and another commenter recommended removing
the requirement for multiple referrals for services.
Response: OCSE disagrees with the first suggestion regarding the
child reaching the age of majority since the language as written
conveys the intent of the provision under Sec. 303.11(b)(8). However,
because of the confusion and opposition regarding the multiple referral
case closure criterion, we have removed this from the proposed
criterion in paragraph (b)(8).
16. Comment: Several commenters requested clarification regarding
the documentation needed to justify case closure based on disability in
accordance with Sec. 303.11(b)(8).
Response: In OCSE PIQ-08-02,\99\ we indicate that States have the
discretion to determine what circumstances can result in a ``medically
verified total and permanent disability'' in accordance with Sec.
303.11(b)(8). States also have the discretion to determine appropriate
methods of medically verifying that a disability is total and
permanent. Refer to PIQ-04-03 \100\ for information regarding how
States may access Health Insurance Portability and Accountability Act
(HIPAA) privacy-protected information when the agency has issued a
National Medical Support Notice. The State can also request the
noncustodial parent to obtain his or her medical records in accordance
with 45 CFR 164.524(b).
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\99\ PIQ-08-02 is available at: http://www.acf.hhs.gov/programs/css/resource/noncustodial-receiving-ssi-benefits-and-unable-to-pay-child-support.
\100\ PIQ-04-03 is available at: http://www.acf.hhs.gov/programs/css/resource/medical-support-enforcement-under-iv-d-program-phi-hipaa.
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17. Comment: One commenter recommended that OCSE create a separate
case closure criterion for incarceration and requested clarification
about how to treat partial disability.
[[Page 93543]]
Response: We disagree with creating a separate case closure
criterion for incarceration. We note that incarceration has been
included as a criterion with psychiatric institutionalization and
medically-verified total and permanent disability since the
promulgation of the Federal case closure regulation on August 4, 1989.
A State may not close a case under Sec. 303.11(b)(8) based on the
noncustodial parent's partial disability. The State should determine
whether such a case meets another case closure criteria under Sec.
303.11.
18. Comment: One commenter recommended removing the language
``needs-based'' and replacing it with ``means-tested'' in Sec.
303.11(b)(9)(iii). Another commenter requested clarification on using
the receipt of needs-based benefits as the basis for case closure,
asking whether such benefits pertain to federally-funded programs,
TANF, or time-limited benefits.
Response: Both ``needs-based benefits'' and ``means-tested
benefits'' are the same. However, upon further consideration, we
deleted ``needs-based benefits'' because these benefits are often time-
limited and are not permanent. In the absence of a disability that
impairs the ability to work, the ability of a parent to work and earn
income may also fluctuate with time. Therefore, it is important for the
child support agencies to take efforts on these cases to remove the
barriers to nonpayment and build the capacity of the noncustodial
parents to pay by using tools such as referring noncustodial parents to
employment services provided by another State program or community-
based organization.
19. Comment: Several commenters indicated that title II benefits
are subject to income withholding and recommend that receipt of such
benefits not be the basis for closing cases.
Response: There is a misunderstanding regarding how we are
addressing title II benefits in this criterion. Title II benefits, such
as Social Security Disability Insurance (SSDI) benefits, are considered
remuneration from employment (based on how many work credits the person
has earned during his or her time in the workforce), and therefore, the
benefits may be garnished for child support directly from the Federal
payor as authorized under section 459(h)(1)(A)(ii)(I) of the Social
Security Act (see DCL-13-06; PIQ-09-01; DCL-00-103).\101\ However, the
case closure criterion at Sec. 303.11(b)(9)(ii) only addresses a
noncustodial parent who is receiving concurrent Supplemental Security
Income (SSI) and SSDI benefits under title II of the Act, which means
the disabled noncustodial parent qualifies for means-tested SSI
benefits on the basis of his or her income and assets, but also
qualifies for SSDI benefits. In that case, the Social Security
Administration pays a combination of benefits up to the SSI benefit
level. Concurrent benefits are means-tested on the same basis as SSI
benefits. In other words, a concurrent SSI and SSDI beneficiary has no
more income, and is no better off, than a beneficiary receiving SSI
alone. A beneficiary of concurrent benefits has equally low income and
an equal inability to pay support as an SSI recipient. Given that a
noncustodial parent who is eligible for concurrent benefits meets SSI
means-tested criteria and receives the same benefit amount as an SSI
beneficiary, it is appropriate to close these cases on the same basis
as an SSI case. Under Sec. 303.11(b)(9)(ii), States have the
flexibility to close such cases. As a result of comments, we added in
paragraph (b)(9)(ii) the phrase ``Social Security Disability Insurance
(SSDI)'' before benefits under title II. For further explanation
regarding these concurrent benefits, please see Comment/Response 3 in
Sec. 307.11, Functional Requirements for Computerized Support
Enforcement Systems in Operation by October 1, 2000.
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\101\ DCL-13-06 is available at: http://www.acf.hhs.gov/programs/css/resource/garnishment-of-supplemental-security-income-benefits; PIQ-09-01 is available at: http://www.acf.hhs.gov/programs/css/resource/garnishment-of-federal-payments-for-child-support-obligations; DCL-00-103 is available at: http://www.acf.hhs.gov/programs/css/resource/attachment-of-social-security-benefits.
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20. Comment: One commenter suggested that OCSE instruct the Social
Security Administration (SSA) not to honor Income Withholding Orders
(IWOs) against SSI benefits, similar to how the VA will not honor IWOs
against service-connected disability benefits.
Response: SSA does not implement IWOs for individuals who are
receiving SSI benefits.
21. Comment: One commenter questioned whether a State is permitted
to close a case under Sec. 303.11(b)(9) without establishing a child
support order when the noncustodial parent is receiving SSI.
Response: Yes, the case may be closed. If the noncustodial parent's
only income is SSI, the State may close the case under paragraph (b)(9)
without establishing a support order because SSI is not subject to
garnishment. Additionally, the State can close a case at any time that
it meets a case closure criterion regardless of where the case is in
the child support process.
However, this does not preclude a State from establishing a $0
support order (based on inability to pay), which could be modified
later if the noncustodial parent went off SSI and began work or
inherited assets. If States choose to establish an order prior to
closing a case under Sec. 303.4, States should use caution about
establishing an order based on imputed income or a minimum ordered
amount (other than $0) because the child support order, including any
payment or installment of support such as arrearages due under the
order, remains in effect and legally binding after a case is closed. In
these cases, we are allowing States to close cases when the
noncustodial parent's income is SSI because SSI is not subject to
garnishment.
22. Comment: Many commenters recommended sending closure notices
under Sec. 303.11(d)(6) in a limited services case to the recipient
before the limited service case closes, not after. They stated that the
earlier notice would be more effective and less burdensome on both the
recipient and the IV-D agency, would allow the recipient to contact the
IV-D agency should he/she have any questions or disagree with case
closure, and would make it easier to address any issues prior to case
closure.
Response: We are persuaded that giving advance notice of case
closure when a limited service under Sec. 302.33(a)(6) has been
completed will eliminate potential confusion or case closure issues and
will maintain uniformity with existing case closure processes that
require a 60 calendar day advance notice. Therefore, the final rule at
Sec. 303.11(d)(4) requires that for cases closed under paragraph
(b)(13) of this section, the IV-D agency must send a written notice to
the recipient of services 60 days prior to closure of the case of the
State's intent to close the case.
23. Comment: Some commenters asked for clarification regarding when
a paternity-only limited services case is considered completed and can
be closed under Sec. 303.11(b)(13). They asked whether the case would
be considered completed after an Acknowledgment of Paternity has been
signed, after genetic testing has been completed and results obtained,
after a court order establishing paternity has been entered, or after a
birth certificate has been amended to reflect the new legal father.
Response: We acknowledge that there may be varying opinions on when
paternity-only services should be
[[Page 93544]]
considered completed and the limited services case closed. We therefore
recommend that States make this determination individually according to
when paternity is legally determined under applicable State law.
24. Comment: One commenter was concerned that if a parent refuses
to cooperate with genetic testing in a paternity-only limited services
case, States will not have the ability to close that case under Sec.
303.11(b)(13) because the limited service will never be completed.
Response: IV-D agencies typically have methods of recourse when a
parent refuses to cooperate with genetic testing. This usually involves
a court's ordering the parent to submit to genetic testing; if the
parent remains uncooperative, the parent may be found in contempt of
that court order. Additionally, we encourage States to screen for
domestic violence before initiating a paternity testing enforcement
action. OCSE defers to States' existing legal process and operating
procedures to address this situation.
25. Comment: One State commented that system changes to implement a
new limited services closure code per Sec. 303.11(b)(13) would be cost
prohibitive.
Response: As discussed in this final rule, paternity-only limited
service is optional.
26. Comment: Two commenters questioned the removal of SNAP from the
list of assistance programs described in Sec. 303.11(b)(14) and
recommended OCSE include it in the provision.
Response: We concur with these comments and have added SNAP to the
list of assistance programs referenced in both paragraphs (b)(14) and
(20).
27. Comment: One commenter questioned whether Sec. 303.11(b)(15)
applies to cases when payments are being disbursed on an unpinned debit
card and the funds have not been spent.
Response: Yes. Although many State child support programs
distribute payments through debit cards, it remains extremely important
for the recipient of services to keep the State informed of his or her
current mailing address to ensure that the case can be processed
effectively. When the State disburses payments on an unpinned debit
card and is unable to contact the custodial parent, the State should
make a good faith effort to contact the recipient of services through
at least two different methods to ensure that the child support
payments are properly disbursed and received by the family. If the
criteria under Sec. 303.11(b)(15) are met, the State may close the
case.
28. Comment: A few commenters expressed concerns about the
requirement for two different methods of communication and recommended
that OCSE require only one method of communication under Sec.
303.11(b)(15).
Response: We disagree with this recommendation. With today's
technology, there are many different options to notify clients, such as
first-class mail, electronic mail, text messaging, and telephone calls.
The best notice to recipients of IV-D services is information provided
through multiple methods. For example, a voice message and a text
message count as two different methods of communication. However, we
understand the difficulty in meeting the requirement to use two
different methods of communication when the State child support agency
has incomplete, inaccurate, or outdated contact information for the
recipient of services. When the State only has an outdated or
inaccurate address, the State IV-D agency should send the case closure
notice to the last known address (see OCSE AT-93-03 and AT-99-04).\102\
Additionally, under Sec. 303.6(d)(6) with the specific consent of the
recipient of services, States are permitted to use electronic means to
send case closure notices.
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\102\ AT-93-03 is available at: http://www.acf.hhs.gov/programs/css/resource/clarification-of-case-closure-criteria; AT-99-04 is
available at: http://www.acf.hhs.gov/programs/css/resource/final-rule-case-closure-criteria-45-cfr-part-303.
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29. Comment: One commenter questioned whether Sec. 303.11(b)(20)
only applied to the assistance programs described in the provision. Two
commenters requested guidance for determining an inappropriate referral
and additional examples.
Response: Section 303.11(b)(20) is not limited to the assistance
programs listed as examples. In addition to IV-A, IV-E, SNAP, and
Medicaid, the State has the flexibility to close a case referred from
other means-tested assistance programs if the IV-D agency deems it
inappropriate to establish, enforce, or continue to enforce a child
support order in the case and the custodial parent has not applied for
IV-D services. Section 454(4)(A) of the Act requires State IV-D
agencies to provide services as appropriate. A State should determine
whether child support enforcement services are appropriate in a
referred case, as it would with any other case. This provision provides
States with the flexibility to close inappropriate referrals on a case-
by-case basis. Case closure is permissive. Our understanding is that
inappropriate referrals are limited in number. An example of an
inappropriate TANF, Medicaid, etc. referral is one involving an intact
family where there is no parent living apart or a widowed custodial
parent.
30. Comment: One commenter suggested OCSE include language to
indicate that a IV-A agency should not consider case closure under
Sec. 303.11(b)(20) as noncooperation by the recipient of services.
Response: As indicated in the NPRM, the State IV-D agency should
communicate 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.
31. Comment: Several commenters indicated that the proposed Sec.
303.11(b)(21) was too restrictive, based on outdated guidance (e.g.,
PIQT-05-01), and hindered the case transfer processes established
through existing State-Tribal agreements. One commenter suggested
expanding the provision to including case transfer processes developed
under OCSE approved State-Tribal agreements.
Response: OCSE acknowledges the concerns expressed in these
comments. We developed the guidance in PIQT-05-01\103\ in the early
stages of the Tribal IV-D program. The final rule builds upon and
revises this guidance to increase the flexibility for the transfer and
closure of cases between State and Tribal IV-D programs. However, we
retain the consent requirement of the recipient of services. The
recipient of services must provide his or her consent to transfer and
close the case because, as both a member of the Tribe and a resident of
the State, the recipient has the right to determine the agency that
provides the IV-D services. However, based on comments, we have added
Sec. 303.11(b)(21)(iv) to address State-Tribal agreements regarding
the transfer and closure of cases. OCSE must review and approve these
State-Tribal agreements and they must include consent from the
recipient of services to transfer the case. The agreements should also
address enforcement of state-owed arrears, repayment agreements, and
arrears adjustment and compromise when applicable. Any State debt owed
under the preexisting order remains in effect and legally binding. Once
the case is transferred and closed, Tribal IV-D programs must extend
the full range of services under their IV-D plan as required by Sec.
309.120(a). As such, a Tribe must enforce any state-owed debt
[[Page 93545]]
when there is not an agreement to permit the Tribe to compromise any
state-assigned arrearages.
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\103\ PIQT-05-01 is available at: http://www.acf.hhs.gov/programs/css/resource/transfer-of-cases-to-tribal-iv-d-agencies-case-closure-criteria.
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32. Comment: Several commenters described the problems with or
importance of requiring consent from the recipient of service to
transfer of the case to the Tribe. Other commenters questioned the
exclusion of consent from the other party involved in the IV-D case and
suggested removing the consent requirement under Sec. 303.11(b)(21).
Response: Under section 454(4) of the Act, the IV-D agency is
required to provide services related to the establishment of paternity
or the establishment, modification, or enforcement of child support
obligations when (1) an individual applies for, and receives, certain
forms of public assistance (TANF, IV-E foster care, medical assistance
under Title XIX, and when cooperation with IV-D is required of a SNAP
recipient), unless good cause or another exception to cooperation with
IV-D exists; or (2) an individual files an application for IV-D
services. Once a IV-D case is established, the recipient of services is
the individual who either received the aforementioned form of public
assistance or applied for IV-D services. As a tribal member and State
resident, the recipient of services has the right to decide whether to
continue receiving services from the State or to begin receiving
services from the Tribal IV-D agency. Therefore, the State IV-D agency
must obtain the recipient of services' consent before transferring the
recipient's case to a Tribal IV-D agency and then closing the State
case. There is no requirement that the other party or parent also
consent to the transfer and closure of the case when requested by the
recipient of services.
33. Comment: One commenter questioned whether Sec. 303.11(b)(21)
would resolve all of the issues regarding when a State IV-D agency
should transfer versus refer a case to a Tribal IV-D agency. Another
commenter requested OCSE to define the process for transferring cases
from a State IV-D agency to a Tribal IV-D agency.
Response: OCSE encourages State and Tribal IV-D agencies to work
together to resolve the various issues around transferring or referring
cases that involve Tribal members, particularly when there are arrears
owed to the State, and to develop specific procedures for transferring
cases based on the case closure requirements found in the regulations
at Sec. 303.11. When there are arrears owed to the State, a State IV-D
agency may decide to only refer the case to a Tribal IV-D agency for
assistance in securing current support and arrears owed to the family
and/or arrears owed to the State. In this circumstance, the State and
Tribe would each have an intergovernmental case involving the same
participants. When the recipient of services requests that his or her
case be transferred to a Tribal IV-D agency and there are State-owed
arrears, the State should inform the recipient of the State's
discretion to transfer or refer the case when there is a State
assignment and of the State's decision. However, if the recipient of
services requests that the case be transferred to a Tribal IV-D agency
and there are no State arrears, then the State must transfer the case
to the Tribe.
34. Comment: Several commenters described the problems regarding
the notice requirements of Sec. 303.11(b)(21). Some recommended a
shorter timeframe for the recipient of services to respond and
elimination of the second notice that indicates closure under Sec.
303.11(b)(21)(B).
Response: Notices act as important safeguards that keep the
recipient of services informed of case closure actions. They provide
the opportunity for the recipient to respond with information and to
request that the case be kept open or, after the case is closed, to
reopen the case. The 60-calendar day timeframe is consistent with the
notice response timeframe that has been required under Federal case
closure regulations since the original final rule was promulgated on
August 4, 1989. The 60-calendar day timeframe has worked well for over
26 years and it would not be appropriate to change it at this time.
However, a State IV-D agency may send the final notice of transfer and
closure when, or immediately before, it closes the case, as long as the
60-day timeframe for a response has been met. The final notice should
provide the contact information of the Tribal IV-D agency receiving the
case.
35. Comment: A few commenters described issues related to Public
Law 280 and the transfer of legal jurisdiction between State and Tribal
courts. They requested the case closure regulation address these
jurisdictional issues.
Response: It is inappropriate to address in the Federal case
closure regulation the complex issues around jurisdiction and Public
Law 280. State and Tribal IV-D programs are in the best position to
address and resolve these issues in their State-Tribal agreements.
36. Comment: One commenter questioned whether a State IV-D agency
could still provide Federal Tax Refund Offset services on a case that
has been transferred to a Tribal IV-D agency and closed by the State
IV-D agency.
Response: It is OCSE's position that transfer of a case to a Tribal
IV-D agency and closure of that case by the State does not preclude the
State from submitting that case for Federal Tax Refund Offset when a
Tribal IV-D agency submits the case under a State-Tribal agreement for
Federal Tax Refund Offset in accordance with OCSE PIQT-07-02.\104\
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\104\ PIQT-07-02 is available at: http://www.acf.hhs.gov/programs/css/resource/state-automated-systems-costs-service-agreements.
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37. Comment: One commenter indicated that Sec. 303.11(b)(21) does
not specify that a State IV-D agency may transfer a case to a Tribal
IV-D agency regardless of whether there are arrears owed to the State.
Response: Section 303.11(b)(21) has been revised to explicitly
allow the State IV-D agency to transfer cases that have arrears owed to
the State. The State has the discretion to transfer the case to the
Tribal IV-D agency when there are state-owed arrears. When such cases
are transferred, the Tribe must extend the full range of services under
its IV-D plan as required by Sec. 309.120(a) and enforce the state-
assigned arrearages.
38. Comment: One commenter urged OCSE not to use the word
``transfer'' since a case cannot be considered transferred until the
original State no longer has an open case.
Response: This suggestion was not incorporated into the regulation.
However, Sec. 303.11(b)(21) has been revised to include, where
appropriate, the word ``close'' to explicitly indicate the closure of
the case with the State. This revision makes it clear that case
transfer involves transferring the case to the Tribal IV-D agency and
then closing the case with the State.
39. Comment: One commenter asked whether Sec. 303.11(c) prohibits
a State IV-D agency from providing full services, including medical
support, to an Indian Health Service (IHS) Medicaid recipient who
requests a full service IV-D case.
Response: Based on the revisions to the Centers for Medicare and
Medicaid Services (CMS) regulations, which are also in this final rule,
State IV-D agencies should no longer be sent referrals for these cases.
Indians may receive health care services without charge from the IHS.
To receive State IV-D services, an IHS eligible recipient would need to
apply for IV-D services. However, no medical support enforcement
services need to be provided to the extent that the individual is
receiving all needed care through the IHS. At the time of application,
if the State is aware that the applicant is a Medicaid recipient, then
[[Page 93546]]
the State should not charge an application fee per Sec. 302.33(a)(2).
The provision of Sec. 303.11(c) would not apply for the custodial
parent with IHS-eligible children who applies directly with the State
child support agency to receive all child support services.
40. Comment: One commenter suggested that OCSE revise the language
in Sec. 303.11(c)(2) to read, ``The IV-D case was opened as a non-IV-A
Medicaid referral. . . .'' This would ensure consistency with the case-
type language in Sec. 302.33(a)(1)(ii). Additionally, the same
commenter questioned the value added by the following language in the
same paragraph and suggested removing it, ``. . . health care services,
including the Purchased/Referred Care program, provided through an
Indian Health Program (as defined at 25 U.S.C. 1603(12))''.
Response: OCSE does not agree with these suggestions to revise the
regulatory text. The regulatory text makes it clear that this case
closure provision is related to Medicaid referrals based solely upon
health care services provided through an Indian Health Program (as
defined at 25 U.S.C. 1603(12), including through the Purchased/Referred
Care program. However, we would like to clarify that this case type is
consistent with the case type language in Sec. 302.33(a)(1)(ii). OCSE
retained the language in this paragraph to ensure consistency between
the language in Sec. 303.11(c)(2) and the revised Medicaid regulations
at 42 CFR 433.152(b)(1)(i).
41. Comment: One commenter suggested that OCSE change the mandatory
closure criterion in Sec. 303.11(c) to an optional closure criterion.
Response: We disagree with this suggestion. Section 303.11(c)
describes the circumstances under which a State IV-D agency must close
a case. This provision makes it clear that State IV-D agencies should
not seek medical support when the child is eligible for health care
services from IHS and the case is a Medicaid referral based solely upon
such health services. In order to better serve Indian families, Sec.
303.11(c) requires a State IV-D agency to close a Medicaid
reimbursement referral based solely upon health care services provided
through an Indian Health Program, including through the Purchased/
Referred Care program.
The IHS is responsible for providing health care to American
Indians and Alaska Natives under the Snyder Act. See 25 U.S.C. Section
13 (providing that the Bureau of Indian Affairs (BIA) will expend funds
as appropriated for, among other things, the ``conservation of health''
of Indians); and 42 U.S.C. Section 2001(a) (transferring the
responsibility for Indian health care from BIA to IHS). The 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), Public Law 93-638 (25 U.S.C. 450 et seq.). In
addition, the Snyder Act authorizes IHS to pay for medical care
provided to IHS beneficiaries by other public and private providers as
the Purchased/Referred Care program. 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.
In light of the IHS's policy, OCSE and CMS require 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 the Purchased/Referred Care program, provided to
IHS-eligible children through an Indian Health Program, be required to
close such cases, as these cases will have been inappropriately
referred. Pursuant to IHS' policy and CMS' 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. This child support case closure rule makes it clear that State
IV-D agencies should not seek medical child support based on such
Medicaid referrals.
42. Comment: One commenter asked whether the proposed revision to
42 CFR 433.152(b)(2) requires the Medicaid agency to reimburse 100
percent of State- or county-funded title IV-D expenditures that are not
reimbursable by OCSE and are not necessary for the collection of
amounts for the Medicaid program.
Response: The proposed changes to 42 CFR 433.152(b)(2) do not
change current regulatory requirements for the Medicaid agency
regarding reimbursement of the IV-D agency.
43. Comment: One commenter indicated that it was unclear what the
following language in 42 CFR 433.152(b)(1)(i) (and repeated in Sec.
303.11) means: 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).
Response: CMS regulation 42 CFR 433(b)(1)(i) refers to Medicaid
referrals from an Indian Health Program, such as programs operated by
the Indian Health Service (IHS) or Tribes and Tribal organizations
under Public Law 93-638 (Indian Self-Determination and Education
Assistance Act). In that instance, the child would need to be eligible
for Medicaid and services from IHS. Medicaid referrals would include
referrals made under the IHS/Tribal Purchased/Referred Care program,
formerly known as Contract Health Services.\105\
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\105\ For more information about the relationship between IHS
and Medicaid, please visit go.cms.gov/AIAN or https://www.cms.gov/Outreach-and-Education/American-Indian-Alaska-Native/AIAN/index.html.
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44. Comment: One commenter asked whether there are any issues that
need to be addressed in the current Medicaid assignment language at 42
CFR 433.145 since there is a prohibition of referral of certain cases.
Response: At this time, the assignment of rights to benefits
requirements in 42 CFR 433.145 is not impacted by the language in Sec.
433.152(b)(1)(i). A State plan must still meet all the requirements
outlined in Sec. 433.145.
45. Comment: One commenter asked whether the placement of the
prohibition of Medicaid referrals in IHS cases in the ``requirements
for cooperative agreements for third party collections'' section (45
CFR 433.152) is appropriate.
Response: Yes, the prohibition against referring a medical support
enforcement case when the Medicaid referral is based on services
received from an Indian Health Program (Sec. 433.152(b)(1)(i)) is
appropriately placed in Sec. 433.152 because the prohibition directly
relates to agreements with title IV-D agencies and third-party
collections, such as Indian Health Programs.
46. Comment: All of the comments received on the notification
requirements under the proposed Sec. Sec. 303.11(d)(4) through (d)(6)
were either opposed to or expressed concerns regarding the pre- and
post-closure notices to the referring agency and the closure notice to
the recipient of services. The commenters indicated that they were
unnecessary and an inefficient use of limited State resources.
Response: We concur with these recommendations and have removed
notification requirements in the proposed Sec. Sec. 303.11(d)(4) and
(d)(5). Additionally, the case closure
[[Page 93547]]
requirement in proposed paragraph (d)(6), redesignated as paragraph
(d)(4) was retained, but the notice requirement of proposed paragraph
(d)(5) was removed. However, if the number of inappropriate referrals
begins to increase, the State IV-D agency should work with the
referring agency, discuss referral policies, and revise such policies
as needed to avoid inappropriate referrals.
47. Comment: One commenter suggested that the notice requirement
under proposed Sec. 303.11(d)(6), redesignated as Sec. 303.11(d)(4),
include location-only cases closed under Sec. 303.11(b)(11) because
such cases could be considered a limited service.
Response: We disagree with this recommendation and have determined
that such a change is not warranted. Location-only cases are often used
when the initiating State is attempting to verify whether or not the
noncustodial parent is living in another State. Often States receiving
these requests do not actually open a case, but only use their
automated locate sources to determine whether the noncustodial parent
lives, works, or has assets in their State.
48. Comment: One commenter indicated that it was unclear what
``recipient'' is referenced in the proposed Sec. 303.11(d)(6).
Response: The rule revised the language in Sec. 303.11(d)(6),
redesignated as Sec. 303.11(d)(4), to clarify the reference to the
recipient of services.
49. Comment: One commenter suggested that the closure notice for
the proposed Sec. 303.11(d)(6), redesignated as Sec. 303.11(d)(4), be
simple, indicating the case has been closed and the recipient of
services should go online or contact the State agency for an
application or additional information.
Response: We disagree with this suggestion because it does not
provide the recipient of services with information regarding
reapplication for services and the consequences of receiving IV-D
services, such as any State fees for services, cost recovery, and
distribution policies. One of the basic responsibilities of a child
support agency is to provide timely, accurate, and understandable
notice to parents about their child support cases.
50. Comment: One commenter suggested that OCSE consider adding
language to the proposed Sec. 303.11(d)(7), redesignated as Sec.
303.11(d)(5), to allow the other parent, as well as the former
recipient of services, to request reopening the IV-D case.
Response: We disagree with this suggestion. In this circumstance,
the other parent has the option to submit an application to receive IV-
D services at any time.
51. Comment: In response to our request for comments in the NPRM
regarding whether a recipient of services should be provided the option
to request case closure notices in a record, such as emails, text
messaging, or voice mail, some commenters requested the ability to
notify the recipient of services by mail or electronic means if the
recipient of services has authorized electronic notifications. We
received no comments in opposition.
Response: In the final rule, for notices under Sec. 303.11(d)(1)
and (4), 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. However, as discussed under Sec. 303.11 in Topic 2 of
the preamble, we considered the commenters' request and added paragraph
(d)(6), which will permit States to issue case closure notifications
electronically for the above-mentioned notices if the recipient of
services specifically authorizes consent to electronic notifications.
The State must keep documentation of the recipient's consent in the
case record.
While an electronic case closure notice may be an appropriate, and
even the preferred, method of notification for many custodial parents,
it may not be an effective means to notify some parents. Many parents
in the child support caseload have limited incomes. They may not have
convenient access to a computer, the internet, or mobile communication.
We revised Sec. 303.11(d)(6) to reflect this flexibility in issuing
electronic notifications.
Section 303.31--Securing and Enforcing Medical Support Obligations
1. Comment: One commenter expressed their understanding that the
proposed revisions in Sec. 303.31 eliminate the need for Medicaid
referrals to the IV-D program.
Response: We disagree. OCSE's policy surrounding Medicaid referrals
has remained consistent over the years: there is no requirement for
State Medicaid agencies to refer all Medicaid cases to the State IV-D
agency.\106\ State child support and Medicaid agencies will need to
continue to work together to refer appropriate cases from Medicaid to
the child support agency for child support services.
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\106\ See OCSE-IM-14-01, available at: http://www.acf.hhs.gov/programs/css/resource/medicaid-referrals-to-the-iv-d-agency; OCSE-
IM-08-03, available at: http://www.acf.hhs.gov/programs/css/resource/guidance-on-referral-of-medicaid-cases-to-title-iv-d-child-support; and OCSE-AT-10-10, available at: http://www.acf.hhs.gov/programs/css/resource/cse-flexibility-to-improve-interoperability-with-medicaid-chip.
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2. Comment: While the majority of comments supported our revisions,
many commenters noted an apparent discrepancy between language used in
the preamble about State flexibility and options concerning the
proposed definition of health insurance in Sec. 303.31(a)(2) and the
definition language in the regulation. Many of these comments concluded
that their reading of both the preamble language and the NPRM suggested
that including public health options, such as Medicaid, was optional
for States in their efforts to meet the health care needs of children.
One commenter specifically recommended that the regulatory text be
revised to indicate that it was a State option to consider public
coverage as health insurance.
Response: We want to clarify that States do not have an option in
distinguishing between private and public forms of health care
coverage. Instead of defining ``health insurance'' as we did in the
NPRM, we are defining ``health care coverage'' since this is the
terminology used in the Social Security Act at sections 452(f) and
466(a)(19). The language in the final rule at Sec. 303.31(a)(2)
includes in the definition of ``health care coverage'' both public and
private forms of health care coverage either of which is sufficient for
meeting health care standards. This approach is consistent with
national health care policies as outlined in the ACA. By including
public coverage such as Medicaid, CHIP, and other State health programs
as part of medical support, this will provide States greater
flexibility to ensure that medical support is being provided for all
children.
3. Comment: Several States commented about their perceived
inconsistency between the five percent reasonable cost standard
traditionally used in child support compared to the eight percent
affordable standard in the ACA. Most of these commenters suggested that
Sec. 303.31(a)(3) be consistent by amending the five percent standard
to eight percent.
Response: We disagree that the regulation needs to be changed. The
existing language in the regulation at Sec. 303.31(a)(3) allows States
to adopt the five percent standard or ``a reasonable alternative
income-based numeric standard'' defined by the State. We encourage
States to examine the difference between the reasonable cost standard
used in the child support regulations and the affordability measure
used in the ACA. Both the percentage and the base are different.
[[Page 93548]]
States are encouraged to consider ways to align these two standards to
avoid confusion among families. For example, a State could choose to
define reasonable cost as 8 percent of a parent's modified adjusted
gross income (MAGI) under paragraph(a)(3) to align the two standards.
The existing language in the regulation allows States to make these
conforming changes to their medical support policies.
4. Comment: One State asked us to clarify how to proceed in
situations where private insurance is available at a reasonable cost,
but is not accessible to the child.
Response: The final regulations at 303.31(b) stipulate that health
care coverage must be both reasonable in cost and accessible to the
child. This paragraph further requires the petition to address both the
reasonable cost and accessibility standards. If these standards are not
met, the ordered parent will not likely meet the requirements of the
order. The child support agency should encourage the parent to seek
affordable health care coverage options through the Health Insurance
Marketplace in the child's State of residence. States are also
encouraged to consider how their cash medical support policies might
address the health care needs of children in these types of situations.
5. Comment: Several commenters expressed the need for OCSE to
further regulate medical provisions in Sec. 303.31(b)(1)(ii) regarding
how to allocate medical costs between the parents.
Response: We do not agree that additional regulations are needed
regarding the allocation of medical costs. While the commenters'
suggestion may work for some States, OCSE has always allowed for States
to have flexibility in how they address the allocation of medical
support since this is often related to the State's guidelines. However,
we have made an editorial revision in Sec. 303.31(b)(1)(ii) to remove
``Determine how to'' from the regulatory language so that the
regulatory provision better reflects OCSE policy.
6. Comment: We received several comments regarding the
applicability of cash medical support in Sec. 303.31(b)(2) given the
passage of the ACA.
Response: Section 466(a)(19)(A) of the Act establishes medical
support requirements including that ``all support orders enforced
pursuant to this part shall include a provision for medical support for
the child to be provided by either or both parents . . .'' This section
of the child support rule implements IV-D agency responsibility when
health care coverage, including both public health care coverage and
private health insurance as defined in Sec. 303.31(a)(2) and described
in Sec. 303.31(b)(1) is not available. However, States have
flexibility in defining when cash medical support or the cost of health
care coverage is considered reasonable in cost under paragraph (a)(3).
Some States may choose not to use the five percent of the noncustodial
parent's gross income. States may elect to develop a reasonable
alternative income-based numeric standard defined in its State law,
regulations, or court rule having the force of law or State child
support guidelines adopted under Sec. 302.56(c). If they elect this
option, they may be able to better align its standard with the ACA.
7. Comment: One comment suggested that proposed Sec. 303.31(b)(3)
should be eliminated because paragraph (b)(1) requires these provisions
in all new and modified orders.
Response: While we agree that Sec. 303.31(b)(1) requires the
health care provision be included in all orders, we recognize the
reality that it may not happen in all situations. When those situations
arise, paragraph (b)(3) provides the foundation to require States to
modify those orders to include the appropriate health care provision.
8. Comment: Some commenters suggested that the proposed definition
for health insurance to include public options poses some questions on
how courts order health insurance coverage. These comments asked for
clarification if courts would be required to compel parents to enroll
children in public forms of health care or enter a finding that the
children are covered by public form of coverage.
Response: How States choose to address health care provisions in
orders will vary from State to State. OCSE has recommended that States
implement broadly-defined medical support language in child support
orders to maximize the health care options available to parents,
children, and families.
9. Comment: Several commenters discussed the issue of data sharing.
Some of these commenters requested the promotion of data sharing
between IV-D and Medicaid, CHIP, Indian Health Service, and the
Federal/State marketplaces. Some noted the need for the exchanges to
modify the application process to gather more information regarding the
absent parent.
Response: OCSE is aware of the need for improved data sharing
between and among the aforementioned programs. We are working to
improve data sharing between State child support agencies, CMS, State
Medicaid agencies, CHIP, and other stakeholder partners. While
currently States have the authority to share information with State
Medicaid and CHIP agencies to assist them in carrying out their
responsibilities and for determining eligibility for program benefits,
we currently do not have authority for data sharing with the Federal/
State marketplaces and the Indian Health Service. This will require
some legislative revisions.
10. Comment: We received numerous inquiries regarding whether the
final passage of this rule affects OCSE's decision to hold States
harmless as outlined in OCSE AT-10-02.
Response: Upon issuance of this rule, OCSE will work with States in
developing guidance related to AT-10-02.\107\
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\107\ AT-10-02 is available at: http://www.acf.hhs.gov/programs/css/resource/holding-states-harmless-for-failure-to-comply-medical-support-final-rule.
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11. Comment: Several States expressed clarification on whether IV-D
agencies would be responsible for issuing a National Medical Support
Notice (NMSN) in situations where a child was receiving Medicaid, and
the obligated parent has private insurance available to them. Some
commenters expressed a workload concern if States were required to
issue the NMSN every time private insurance may become available--
sometimes for short periods of time--to either of the parents.
Response: The NMSN is an enforcement tool. The child support agency
is only required to serve an NMSN on an employer where it is clear that
there is no health coverage being provided for the child(ren) and
employer-offered health insurance has been ordered. Under Sec.
303.32(b), States are not required to use the NMSN when the child(ren)
is covered by a public health care option and there is a court or
administrative order that stipulates alternate health care coverage to
employer-based coverage. Through our revised definition of health care
coverage, if the child is covered through Medicaid, CHIP, or other
State coverage plan, then public forms of coverage are an allowable
form of health care coverage. Additionally, since the implementation of
the ACA, health coverage includes health insurance policies offered
through the Federal or State marketplaces that meet the standards for
providing essential health benefits. We encourage States to include a
provision in child support orders that medical support for the
child(ren) be provided by either or both parents, without specifying
the source of the coverage. In these situations, the child
[[Page 93549]]
support agency would have to assess if it is appropriate to send a NMSN
notice if employer-based health insurance becomes available.
Although this is not a requirement, nothing within the final rule
precludes a State from petitioning for employer-related insurance to be
included in the order in accordance with the State's guidelines if it
is in the best interest of the child, in cases where the child is
receiving public coverage and the employer-related insurance becomes
available at a reasonable cost, is accessible to the family, and the
parent has the ability to pay. We encourage States to develop medical
support policies that fully consider the wide array of health care
options that most benefit children and families.
12. Comment: Some comments suggested that the ACA eliminates the
need for medical enforcement in the child support program. These
commenters requested that child support no longer carry out these
functions.
Response: The ACA neither mandates coverage nor requires that the
IRS enforce mandatory coverage even for families that have coverage
available to them at a reasonable cost. Individuals and families that
have health care coverage available at a reasonable cost may choose not
to obtain coverage and instead pay the applicable tax penalty. Title
IV-D, on the other hand, requires that all child support orders include
a provision for medical support for the child(ren), whether through
public or private health care coverage available at a reasonable cost,
or cash medical support.
13. Comment: Many commenters expressed frustration that the
proposed regulations in the NPRM do not align with the requirements of
the ACA.
Response: Again, OCSE recognizes tensions between the Social
Security Act and provisions in the ACA when it comes to medical
support. We have aligned our regulatory requirements as closely as
possible with the ACA; however, we acknowledge the need for further
statutory and regulatory work to bring these policies together. Until
this occurs, this final rule allows States more flexibility to
coordinate medical support practices with the requirements of the ACA.
In addition, the Administration's FY 2017 Budget proposes a set of
changes to help improve coordination between the ACA and medical
support.
14. Comment: The NPRM requested specific comments regarding the
State child support program's role in carrying out its medical support
statutory responsibilities, including the roles of cost allocation
between parents and enrolling children in coverage.
Response: We received numerous comments regarding the issue of
child support involvement in medical support activities--many of which
were discussed in previous comments in the preamble (for example, see
Comment/Response 12 above). In addition, we received four specific
comments opposing the idea that child support becomes involved with
referring children and families for health care coverage. OCSE
encourages States to review their medical support activities to find
ways to improve health care coverage among children and families. OCSE-
PIQ-12-02 provides information on how child support agencies can
collaborate with other programs to achieve these goals.\108\
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\108\ PIQ-12-02 is available at: http://www.acf.hhs.gov/programs/css/resource/partnering-with-other-programs-and-activities.
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Section 303.72--Requests for Collection of Past-Due Support by Federal
Tax Refund Offset
1. Comment: One commenter stated the proposed change did not go far
enough because this regulation should specify which State in an
interstate case should submit the case for Federal tax refund offset.
Response: Section 303.7(c)(8) establishes requirements for Federal
tax refund offset, including identification of the State that must
submit a case for such offset. Specifically, ``[t]he initiating State
IV-D agency must: . . . Submit all past-due support owed in IV-D cases
that meet the certification requirements under Sec. 303.72 of this
part for Federal tax refund offset.''
Section 303.100--Procedures for Income Withholding
1. Comment: Nearly all State commenters supported the proposed
regulatory changes regarding mandatory use of the OMB-approved Income
Withholding for Support (IWO) form. While these commenters favored
changes addressing the inconsistent use of the OMB-approved IWO form
and the transmission of payments on non-IV-D orders to the appropriate
State Disbursement Unit (SDU), they pointed out that Federal law
already requires use of the OMB-approved form.
Response: While we acknowledge that the use of the OMB-approved
form is already required by Federal law and previously issued policy
and guidance, continued concerns expressed to OCSE by employers
necessitated further clarification in the regulations. States are
required to have laws to ensure compliance with the mandated use of the
OMB-approved IWO form for both IV-D and non-IV-D orders. Some States
work with their State courts' administrative offices, and state bar
associations to provide the approved IWO form for use by the judiciary
and private attorneys. These States also request that other versions of
withholding orders be removed from Web sites and other distribution
methods. We encourage all States to collaborate with their judicial
branch, state bar associations, chambers of commerce, and Tribal Child
Support programs to ensure that all users and employer recipients of
the form are aware of the requirements regarding use of the OMB-
approved IWO form in all income withholding orders issued to employers.
2. Comment: Several commenters questioned what method of
enforcement could be used when private attorneys or courts do not
comply with the regulation, and whether employers should be allowed to
reject an incorrect IWO.
Response: We direct the commenters to the Income Withholding for
Support--Instructions document, available at http://www.acf.hhs.gov/sites/default/files/ocse/omb_0970_0154_instructions.pdf, as well as the
Income Withholding for Support form, available at http://www.acf.hhs.gov/sites/default/files/ocse/omb_0970_0154.pdf. Both of
these documents contain language stating that the IWO must be regular
on its face, meaning that any reasonable person would think the IWO is
valid.
The instructions for the IWO form clarify this term by saying that
an IWO is regular on its face when:
It is payable to the State disbursement unit;
A copy of the underlying child support order containing an
income withholding clause is included, if the IWO is sent by anyone
other than a State/Tribal IV-D agency or a court;
The amount to withhold is a dollar amount;
The text of the form has not been changed and invalid
information has not been entered;
The order of the text on the OMB-approved IWO form has not
been changed, and
OMB 0970-0154 is listed on the form; and
It contains all of the necessary information to process
the IWO.
The instructions further provide that the employer must reject the
IWO and return it to the sender if, among other things, the sender has
not used the OMB-approved form, the IWO is altered
[[Page 93550]]
or incomplete, or the IWO instructs the employer to send a payment to
an entity other than the State's SDU (for example, to the custodial
party, the court, or an attorney). Employers are valuable and essential
partners to the child support program. OCSE appreciates the challenges
employers face when receiving IWOs that do not comply with the
regulation or IWO instructions and will continue to provide assistance
to States and employers in ensuring compliance with this rule.
3. Comment: One commenter asked that we clarify to States and
employers that using the IWO form in a nontraditional manner in order
to accommodate a State's own process that requires withholding beyond
the monthly child support amount in the underlying order from obligors
with bi-weekly payroll schedules may result in the IWO being rejected
by employers.
Response: We understand the commenter's concern regarding this
practice. However, we disagree that using the IWO form in this manner
is a basis for rejection of the IWO. OCSE is working with States to
ensure income withholding and distribution practices comply with
Federal requirements.
4. Comment: A few commenters requested the inclusion of language in
Sec. 303.100(e) and (h) to clarify that the requirements listed apply
to all income withholding situations and that the use of the OMB-
approved form applies only to withholding to enforce IV-D and non-IV-D
child support orders but does not apply to any other type of
withholding.
Response: We agree with these commenters and affirm that the
requirements listed apply to all IV-D and non-IV-D income withholding
orders, and that the use of the OMB-approved form applies only to IV-D
and non-IV-D child support orders and does not apply to any other type
of withholding, including spousal-only support orders. We are adding
Sec. 303.100(h) to expressly state that the OMB-approved form must be
used for income withholding in all child support orders.
5. Comment: One commenter requested that requirements listed in
Sec. 303.100(e) clarify that income withholding orders are not to
include instructions for an employer to implement in the future (for
example, step-down or step-up payments).
Response: We agree with this commenter that income withholding
orders are not to include instructions for an employer to implement in
the future. Changes in the amount of income withholding require an
amended IWO be sent to the employer reflecting the new terms for income
withholding in the case. However, the rule does not amend the
requirements listed in Sec. 303.100(e).
6. Comment: One commenter suggested the regulation reference more
generic title such as ``the standard OMB-approved form,'' rather the
current form title ``Income Withholding for Support'' because of the
possibility of a change to the form's title in the future.
Response: We disagree. The language in the regulation regarding the
IWO form is sufficiently clear.
7. Comment: One commenter recommended the regulation state that the
notice may be electronic and that the e-IWO form is an OMB-approved
form.
Response: In accordance with Section 306 of Public Law 113-183,
Preventing Sex Trafficking and Strengthening Families Act, States must
use the OCSE e-IWO process when an employer elects to receive IWOs
electronically. Further guidance can be found in OCSE AT-14-12.\109\ At
this time, we do not think it is necessary to revise the regulations
since the statute is clear.
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\109\ AT-14-12 is available at: http://www.acf.hhs.gov/programs/css/resource/e-iwo-implementation-and-amendment-of-title-iv-d-State-plan-preprint-page-38-3.
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8. Comment: One commenter requested the creation of a standard
return document to accompany the IWO, which the employer could return
to the sender to indicate any noncompliance with Federal income
withholding requirements. The commenter noted that the most recent
version of the IWO includes language requiring such action, but that
courts, private attorneys, or others may be using prior IWO versions
without such language.
Response: We understand the commenter's desire to provide
information to those issuing income withholding orders regarding the
reason an employer has returned the IWO, especially when an outdated
version of the IWO form is being used that may not include the ``Return
to Sender'' language. While we decline to create an additional form for
this purpose, we note that some employers have addressed this need by
creating a coversheet to accompany any IWO they return, clarifying the
reason(s) for their rejection of the IWO. OCSE has previously
distributed a template of this coversheet to the American Payroll
Association members and to others upon request.
9. Comment: One commenter noted that since Tribal IV-D agencies
enforce child support orders for States and are required to use the
OMB-approved IWO form, employers or States may assume that withheld
payments must go through a State's SDU instead of through the Tribal
IV-D agency.
Response: In accordance with 45 CFR 309.115(d), if there is no TANF
assignment of support rights to the Tribe and the Tribal IV-D agency
has received a request for assistance in collecting support on behalf
of the family from a State or another Tribal IV-D agency under Sec.
309.120, the Tribal IV-D agency must send all support collected to
either the State IV-D agency or the other Tribal IV-D agency for
distribution, as appropriate, except as provided in paragraph (f) of
this section. Paragraph (f) indicates that rather than send collections
to a State or another IV-D agency for distribution, the Tribal IV-D
agency may contact the requesting State or Tribal IV-D agency to
determine appropriate distribution and distribute collections as
directed by the other agency.
10. Comment: One commenter suggested that language be included on
the IWO stating that: ``The order/notice applies to all employers
except Indian Tribes, tribally-owned businesses, or Indian-owned
businesses on a reservation. If you are a Tribe, tribally-owned
business, or Indian-owned business located on a reservation and you
choose to honor the support order and withhold as directed in the
enclosed order/notice, we appreciate your voluntary compliance.'' The
commenter believes that this would serve as a reminder to States and
employers of tribal sovereignty.
Response: We disagree with this comment. Per Sec. 309.90(a)(3) and
Sec. 309.110, Tribal employers under the jurisdiction of a Tribe with
a IV-D program are required to honor income withholding orders and will
be held liable for the accumulated amount the employer should have
withheld from the noncustodial parent's income if they fail to comply
with these provisions.
11. Comment: One commenter requested that the Child Support Portal
process employment terminations for both IV-D and non-IV-D cases. They
explained that currently, employers must first determine whether the
employee termination is in a IV-D case or a non-IV-D case. If it is a
IV-D case, the employer may report the termination electronically. If
it is a non-IV-D case, the employer must report the termination
manually.
Response: The e-IWO process is currently only available for IV-D
cases.
[[Page 93551]]
Section 304.20--Availability and Rate of Federal Financial
Participation
1. Comment: A few commenters asked that we define ``reasonable'' as
used in Sec. 304.20(a)(1).
Response: The term ``reasonable'' is addressed in Subpart E--Cost
Principles found at 45 CFR Part 75--Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for HHS Awards,
and is applicable to grants made to States under this part.
Specifically, Sec. 75.404 indicates 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. The question of reasonableness is
particularly important when the non-Federal entity is predominantly
federally-funded. In determining reasonableness of a given cost,
consideration must be given to: (a) Whether the cost is of a type
generally recognized as ordinary and necessary for the operation of the
non-Federal entity or the proper and efficient performance of the
Federal award; (b) the restraints or requirements imposed by such
factors as: sound business practices; arm's-length bargaining; Federal,
State, local, tribal, and other laws and regulations; and terms and
conditions of the Federal award; (c) market prices for comparable goods
or services for the geographic area; (d) whether the individuals
concerned acted with prudence in the circumstances considering their
responsibilities to the non-Federal entity, its employees, where
applicable its students or membership, the public at large, and the
Federal Government; (e) whether the non-Federal entity significantly
deviates from its established practices and policies regarding the
incurrence of costs, which may unjustifiably increase the Federal
award's cost.
2. Comment: Several commenters asked that OCSE provide specific
services and activities included in Sec. 304.20(a)(1) and (b) for
which FFP is available.
Response: This regulation provides for general categories of
allowable expenditures consistent with HHS cost principles in 45 CFR
part 75, subpart E that allow for matching of expenditures that are
necessary and reasonable and can be attributed to the child support
enforcement program. More specific examples are found in policy
guidance.
3. Comment: A few commenters are concerned that the cost principles
in 2 CFR part 225 will stymie State's flexibility in providing the
services and activities allowed in Sec. 304.20.
Response: The OMB Cost Principles for State, Local, and Indian
Tribal Governments (formerly OMB Circular A-87) are published at 2 CFR
part 200. However, HHS has codified the OMB cost principles in subpart
E of 45 CFR part 75, which apply to all State and local expenditures in
HHS-funded programs. When a State is considering if an expense is
reasonable or allowable, the State should cross-reference the child
support regulations at 45 CFR part 300 and 45 CFR part 75. Part 75
allows the cognizant agency to restrict or broaden funding for
allowable activities or services; therefore, child support regulations
take precedence over 45 CFR part 75. Section 75.420 indicates that
failure to mention a particular item or cost is not intended to imply
that it is either allowable or unallowable; rather, determination as to
allowability in each case should be based on the treatment provided for
similar or related items of cost, and based on the principles described
in Sec. Sec. 75.402 through 75.411. In case of a discrepancy between
the provisions of a specific Federal award and the provisions below,
the Federal award governs. Criteria outlined in Sec. 75.403 must be
applied in determining allowability of costs.
4. Comment: One commenter requested OCSE to consider 90 percent
reimbursement for automation projects finalized in the rule.
Response: We appreciate the comment. However, OCSE has no authority
to increase the FFP rate through the regulatory process. This would
require a statutory change by Congress.
5. Comment: A few commenters asked for clarification regarding the
intent of the proposed change to Sec. 304.20(b)(1)(viii)(A) and if it
suggests the IV-D agency should be helping families determine the need
for public assistance.
Response: This change was not intended to suggest that IV-D
agencies determine a family's need for public assistance. However,
there may be situations where the State IV-D agency determines that it
needs to refer cases to the IV-A or IV-E agency, such as for TANF
assistance, emergency assistance, child welfare services, etc. This
provision provides flexibility to collaborate with other programs in
case the need for a referral arises.
6. Comment: One commenter asked that we explain the differences
between what is allowed for reimbursement for the Medicaid agreements
in Sec. 304.20 and what is not allowed based on Sec. 304.23.
Response: Section 304.20(b)(1)(viii)-(ix) addresses the
availability of FFP for the establishment of agreements with other
agencies administering the title IV-D, IV-E, XIX, and XXI programs for
activities related to cross-program coordination, client referrals, and
data sharing when authorized by law. In this final rule, we removed
Sec. 304.23(g) that prohibited FFP for the costs of cooperative
agreements between IV-D and Medicaid agencies under 45 CFR part 306,
which was removed from the regulations years ago. Section 304.23(g) is
no longer necessary as a result of the enactment of Personal
Responsibility and Work Opportunity Reconciliation Act of 1996, which
required States to include a provision for health care coverage in all
child support orders established or enforced by the IV-D agency. FFP
continues to be available for these medical support activities under
Sec. 304.20(b)(11).
7. Comment: One commenter was concerned that the elimination of
paragraph 304.20(b)(1)(ix)(C) regarding transferring collections from
the IV-D agency to the Medicaid agency prohibits the State from
requiring this activity in the IV-D interagency agreement. However,
because Sec. 302.51 explaining the distribution process was not
amended, States will still have to transfer the support, but will no
longer be able to get FFP for including how to perform this task in an
agreement.
Response: We agree and have retained the former provision regarding
the availability of FFP under an agreement for the transfer of
collections from the IV-D agency to Medicaid in the final regulatory
text at Sec. 304.20(b)(1)(ix)(D).
8. Comment: A few commenters asked for clarification on what child
support proceedings would qualify for bus fare or other minor
transportation expenses as provided in Sec. 304.20(b)(3)(v).
Response: Providing bus passes and gas vouchers are considered
allowable as local transportation assistance in support of providing
child support services. Providing local transportation vouchers can be
a highly cost-effective means to increase participation in child
support interviews, genetic testing, and hearings, and decrease no-
shows and defaults, which increase staff costs and court time, and
reduce compliance.
We also encourage States to consider alternatives to the need to
travel to the child support office or court, such as the use of
technology, including Web applications, video conferences, or
telephonic hearings.
9. Comment: OCSE received several comments related to proposed
Sec. 304.20(b)(3)(vii), which would have allowed ``de minimis'' costs
associated
[[Page 93552]]
with the inclusion of parenting time provisions entered as part of a
child support order and incidental to a child support enforcement
proceeding. The commenters were uncertain about the definition of the
term ``de minimis.''
Response: Black's Law Dictionary defines de minimis as
``insignificant'' or ``not enough to be considered,'' and the Oxford
dictionary defines de minimis as ``too trivial or minor to merit
consideration.'' The de minimis parenting time rule provision was not
intended to open up Federal matching funds for new parenting time
activities. Instead, the rule recognizes current State practice and was
intended as a no-cost technical fix to clarify cost allocation and
audit issues consistent with generally accepted accounting principles.
Currently, 36 States calculate parenting time credits as part of
their child support guidelines, or otherwise provide for standard
parenting time at the time the support order is set. In addition, many
courts recognize voluntary parenting time agreements during child
support hearings when the agreements have been worked out between the
parents ahead of time and the parents simply ask the court to add the
agreements to the support orders.
Congress has not authorized FFP for parenting time activities.
Thus, the proposed provisions regarding parenting time under this
provision and under Sec. 302.56(h), Guidelines for Setting Child
Support Orders, were intended to clarify that States may not charge
parenting time activities to title IV-D but may coordinate parenting
time and child support activities so long as the IV-D program is not
charged additional costs and the State adheres to generally accepted
accounting principles.
In light of the comments received on the proposed parenting time
provisions and the unintended confusion regarding the proposal, OCSE
has deleted the proposed FFP provision in paragraph (b)(3)(vii). See
Comment/Response 2 under Sec. 302.56--Guidelines for Setting Child
Support Orders, Parenting Time: [Proposed Sec. 302.56(h)].
10. Comment: Multiple commenters asked if courts are eligible for
FFP for education and outreach activities intended to inform the public
about the child support enforcement program as referenced in Sec.
304.20(b)(12).
Response: States may enter into cooperative agreements with courts
to provide 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. As such, we have added paragraph (b)(12) to allow these as
FFP eligible activities in cooperative arrangements with courts and law
enforcement officials as cited in Sec. 304.21(a)(1).
11. Comment: One commenter asked that we consider changing the
phrase in Sec. 304.20(b)(12) from ``when the parents are not married''
to ``when the parents do not reside together and share expenses as a
married or unmarried couple.''
Response: We believe the language as originally drafted is more
flexible; therefore, we did not change the regulatory language.
12. Comment: In the NPRM, OCSE specifically asked for feedback
regarding the allowability of FFP for electronic monitoring systems for
child support purposes. We received feedback from several States, child
support organizations, and community based organizations mostly in
support of using electronic monitoring systems as an alternative to
incarceration for child support purposes.
Response: At this time, we are not planning to regulate in this
area since these costs are incurred as part of the general costs of
government, similarly to the costs of incarceration.
Section 304.23--Expenditures for Which Federal Financial Participation
Is Not Available
1. Comment: Related to Sec. 304.23(d), one commenter asked if the
annual firearms qualifications for deputy sheriffs assigned to county
IV-D agencies are considered reasonable and essential short-term
training.
Response: No, firearms qualifications are necessary for all deputy
sheriffs and are therefore considered a general cost of government. In
accordance with 45 CFR 75.444, General costs of government, these costs
for States, local governments, and Indian Tribes are unallowable for
Federal funding.
2. Comment: One commenter asked if reasonable and essential short-
term training includes preapproved college courses that would directly
improve an individual's ability to perform his or her current job or
another IV-D-related job, even if those college courses are also
counted towards credit hours needed to complete the individual's degree
or certificate.
Response: Yes, funding this training has been long-standing OCSE
policy. OCSE Action Transmittal (AT) 81-18\110\ defines the term short-
term training as:
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\110\ AT-81-18 is available at: http://www.acf.hhs.gov/programs/css/resource/definition-of-short-term-training.
. . . any training that would directly improve any individual's
ability to perform his or her current job or another IV-D related
job, does not provide merely a general education for an individual
and is not taken for the sole purpose of earning credit hours toward
a degree or certificate. FFP is available under the above definition
regardless of the source of the training. For example, FFP is
available for short term training provided by State and local IV-D
agencies, or an agency or individual who provides IV-D services
under a cooperative or purchase of service agreement. In addition,
FFP is available for short term training conducted by the multi-
function agency in which the State IV-D agency is located, or by
another State or local agency. Short term training provided by a
contractor (e.g., college, university, professional association,
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etc.) is also eligible for FFP.
3. Comment: Many commenters asked for clarification regarding the
deletion of Sec. 304.23(i). They questioned if the jailing of parents
in child support cases was no longer considered to be ineligible for
FFP.
Response: In the NPRM, existing Sec. 304.23(i) regarding the
prohibition of FFP for ``any expenditures for jailing of parents in
child support enforcement cases'' was inadvertently removed.
Expenditures for jailing of parents in child support enforcement cases
continue to be ineligible for FFP. Therefore, in the final rule, we did
not remove former Sec. 304.23(i), and redesignated proposed paragraph
(i) as paragraph (j).
Section 307.11--Functional Requirements for Computerized Support
Enforcement Systems in Operation by October 1, 2000
1. Comment: We received numerous comments supporting the proposed
regulatory changes placing limitations on garnishing accounts of SSI
recipients. These comments focused on the limited income SSI recipients
have and the detrimental impact inappropriate garnishment poses for
these individuals. However, some commenters questioned the need for the
regulatory change given that in the preamble to the NPRM, we indicated
that these inappropriate garnishments are rare.
Response: While we recognize the rarity of these situations, when
inappropriate garnishments occur, they must be remedied quickly. The
final regulation helps ensure that States will resolve these situations
in a timely manner by promptly refunding
[[Page 93553]]
improperly garnished amounts to noncustodial parents.
2. Comment: Several commenters expressed concern that the NPRM
would require States to invest resources to upgrade their statewide
child support enforcement systems for a small number of cases.
Response: We agree the automated procedures required by the rule
will require States to enhance their State systems' ability to identify
cases where the noncustodial parent is the recipient of protected
Federal benefits. However, system enhancements will help to ensure that
low-income noncustodial parents retain the Federal benefits that are
exempt from child support enforcement and essential to their
livelihood. Regulatory changes by the Department of Treasury require
all Federal benefits to be deposited electronically in a bank account.
This means that SSI recipients no longer have the option to receive
their benefits through a check. This change has increased the risk that
SSI benefits will be improperly withheld by child support agencies.
OCSE has facilitated efforts by the Social Security Administration
(SSA) to share data on recipients of protected Federal benefits with
States through the Federal Parent Locator Service (FPLS). In 2013, OCSE
enhanced its interface with SSA to allow States to match participants
in their caseloads who begin or stop receiving SSI benefits. States
were notified of these additions to the FPLS as part of the FPLS 13-02
release. States may elect to match with the State Verification and
Exchange System (SVES), which supplies both title II and title XVI data
to the States. To date, eighteen States have opted in to receive this
information. States that wish to receive this additional data as part
of their FPLS data matches should contact the OCSE's Division of
Federal Systems for more information.
3. Comment: Several commenters expressed opposition to including
title II benefits in the regulation.
Response: Many of these commenters misinterpreted the NPRM to apply
to noncustodial parent receiving only title II benefits (such as SSDI).
The NPRM only applied to noncustodial parents who were either
recipient[s] of SSI or recipients receiving concurrent SSI and benefits
under title II of the Act. Noncustodial parents meeting these
conditions are experiencing extreme financial difficulties and warrant
further protection from inappropriate garnishments.
In drafting the NPRM, the Department was urged by several
stakeholders to exclude garnishment for ``dual eligibility,'' or
concurrent benefits, such as when the individual is eligible for both
SSI and SSDI, meets the income test for SSI benefits, and would have
received the same amount in SSI-only funds, but for the fact that the
individual qualifies for SSDI benefits as well as SSI benefits. SSDI
provides benefits to disabled or blind persons based on the person's
previous earnings record and Social Security contributions. The SSI
program makes cash assistance payments to aged, blind, and disabled
persons who have limited income and resources regardless of work
history or contributions to Social Security. SSI is a means-tested
program with strict financial limits. SSA uses the term ``concurrent''
when a person is eligible for benefits from both programs. A person can
receive both SSDI and SSI payments, but must meet the requirements of
both programs. In order to receive concurrent SSI and SSDI benefits, a
person must meet the SSI income and assets limits and is limited to the
SSI benefit amount. For example, an individual begins receiving $733 in
SSI monthly benefits. Five months later, he becomes eligible to receive
$550 in SSDI monthly benefits, reducing his SSI payments to $183. His
concurrent benefits are limited to $733 ($550 in SSDI and $183 in SSI,
none of which may be garnished due to the concurrent receipt). If he
had not qualified for SSDI, his SSI benefits would have remained at
$733.\111\ The rule requires States to develop safeguards for the
States to prevent garnishment of exempt benefits. These provisions only
relate to excluding SSI benefits, as well as concurrent SSI and SSDI
benefits under title II.
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\111\ Further information is available at: http://www.ssa.gov/redbook/eng/supportsexample.htm.
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In light of the comments, we want to emphasize that the final rule
makes no changes to our policy regarding recipients of title II
benefits being subject to garnishment as outlined in Section
459(h)(1)(A)(ii)(I) of the Act. OCSE has long held that title II
benefits are subject to garnishment (See DCL 13-06; PIQ-09-01; DCL-00-
103). Title II benefits, such as SSDI benefits, are considered
remuneration from employment, and therefore, State or tribal child
support agencies are allowed to continue to garnish the benefits of
child support directly from the Federal payor as authorized under
459(h).
This final rule only places limitations on garnishments from
financial accounts of concurrent SSI and SSDI beneficiaries. As a
result of comments, we added in Sec. 307.11(c)(3)(i) the phrase
``Social Security Disability Insurance (SSDI)'' before ``benefits under
title II of the Act'' to clarify that we are only addressing when a
noncustodial parent is receiving both SSI and SSDI benefits at the same
time. Similarly, in paragraph (c)(3)(ii), we added the word ``SSDI''
before ``benefits under title II of the Act.''
4. Comment: One commenter asked why OCSE did not rule out any
garnishments for SSI recipients and eliminate the complexity of the
rule.
Response: Section 459(h) of the Act and OCSE policy guidance does
prohibit garnishing financial accounts of SSI beneficiaries. However,
we recognize that in rare instances, these accounts may be
inappropriately garnished by local IV-D agencies if they have not
previously identified that the noncustodial parent is receiving SSI
benefits. The final rule mandates that the State resolve these errors
by requiring that funds are refunded within 5 business days after
determining that the funds were incorrectly garnished.
5. Comment: One commenter supported the rule, but questioned
whether the proposed case closure provisions [(303.11(b)(9)] allow
States to close these types of cases and prevent the need for the
proposed garnishment regulation.
Response: We agree that the case closure provisions allow States
the option to close these types of cases under Sec. 303.11(b)(9).
However, because the closure of these cases using this case closure
criterion is optional, the regulatory changes are necessary to ensure
that disadvantaged noncustodial parents retain protected Federal
benefits.
6. Comment: One commenter requested clarification of the term
``previously identified'' used in Sec. 307.11(c)(3)(i). The commenter
also asked whether this determination could only come from a match with
SSA.
Response: We disagree that the term warrants further definition.
The final rule provides that States proactively identify cases where
the noncustodial parent is a recipient of SSI benefits. A State may
choose to make this determination based on a match with SSA or through
other means determined by the State.
7. Comment: One commenter felt that the NPRM imposed strict
liability on the IV-D agency, but ignores the responsibility of the
financial institution in the garnishment process. Many of the comments
suggested that financial institutions are required to determine whether
an account meets eligibility standards for garnishment based upon
[[Page 93554]]
the sources of deposits into those accounts.
Response: We disagree. DCL 13-06 indicated that the Department of
the Treasury, in conjunction with other Federal agencies, issued an
Interim Final Rule regarding the garnishment of accounts containing
Federal benefit payments. Since issuing that guidance, the Department
of Treasury has finalized the rule. In both the interim and final
versions of the rule, financial institutions are instructed to honor
garnishment orders issued by State child support enforcement agencies
by following standardized procedures ``as if no Federal benefit payment
were present'' \112\ since many Federal benefit payments are not
protected from garnishment for child support under section 459 of the
Act. So long as the IV-D agency uses the proper garnishment form (as
outlined in the regulation), financial institutions are not required to
conduct a ``look back'' review to determine if any funds deposited in
the account consisted of restricted Federal benefits. Under the
regulations, financial institutions do not have any responsibility in
determining the source of funds and responding to the requirements as
outlined in the child support garnishment order. In the event that
funds are garnished inappropriately, the IV-D agency is solely
responsible for resolving an inappropriate garnishment under the
regulation.
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\112\ The Final Rule entitled ``Garnishment of Accounts
Containing Federal Benefit Payments: Final Rule,'' Federal Register,
Volume 78, No 103 (29 May 2013), pp. 32099-3211 is available at:
http://www.gpo.gov/fdsys/pkg/FR-2013-05-29/pdf/2013-12683.pdf and
the Interim Final rule entitled ``Garnishment of Accounts Containing
Federal Benefit Payments: Interim Final Rule'' Federal Register,
Volume 76, No 36 (23 February 2011), pp. 9939-9962 is available at:
http://www.gpo.gov/fdsys/granule/FR-2011-02-23/2011-3782.
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8. Comment: Several commenters expressed their desire for the
Federal government to share in the costs associated with refunding any
previously disbursed funds.
Response: The Federal regulations at 45 CFR 75.426 expressly
prohibits the Federal government from sharing in costs associated with
bad debts and losses.
9. Comment: Several commenters expressed concern that the proposed
regulation places States in the difficult position of trying to recoup
funds disbursed to the custodial parent.
Response: A State is prohibited from garnishing SSI benefits and
must make a SSI recipient whole if it inappropriately garnishes the
benefits. The final rule will reduce the likelihood that the State will
need to recover from the custodial parent support collections
distributed to the family resulting from improper garnishment.
10. Comment: Many States expressed concern with the proposed 2-day
timeframe. Suggestions ranged from changing the timeframe anywhere from
7 days to 30 days. In addition, some commenters requested clarification
whether the timeframe refers to business or calendar days.
Response: We agree that the proposed 2-day timeframe is too short
and that clarification is needed. Based on comments, the final rule
extended the timeframe in Sec. 307.11(c)(3)(ii) from 2 days to 5
business days, which begins when the agency determines that SSI or
concurrent SSI and title II benefits were incorrectly garnished.
Request for Comments on Undistributed and Abandoned Collections
In the NPRM, we asked for specific comments, including information
about States policies and procedures related to undistributed and
abandoned child support collections and the efforts that States take,
both through their child support agencies and the State treasury
offices, to maximize the probability that families receive the
collections, or if that result cannot be achieved that the payments are
returned to the noncustodial parents.
We received several comments on how States deal with undistributed
and abandoned child support payments that indicated that many States
have aggressive procedures and processes in place to try to minimize
undistributed collections. One commenter suggested the creation of a
national work group to study and determine collaboratively policies and
procedures related to undistributed and abandoned child support
collections. One commenter was hopeful that if OCSE shared information
about State practices, States could identify promising practices and
ultimately reduce the amount of undistributed and abandoned support
payments.
At this time, we are not planning to regulate in this area. We will
continue to work with States in providing technical assistance to
ensure that States are making diligent efforts to distribute child
support collections to the family, whenever locate is an issue.
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)
We received numerous comments supporting the revisions to update
the regulations for electronic communications technology under Topic 2
of the rule. We also received a few comments about specific provisions.
We did not receive any comments related to Topic 2 that we needed to
address for the following sections:
Sec. 301.13--Approval of State Plans and Amendments.
Sec. 302.33--Services to Individuals Not Receiving Title IV-A
Assistance
Sec. 302.34--Cooperative Arrangements
Sec. 302.50--Assignment of Rights to Support
Sec. 302.65--Withholding of Unemployment Compensation
Sec. 302.70--Required State Laws
Sec. 302.85--Mandatory Computerized Support Enforcement
System
Sec. 303.5--Establishment of Paternity
Sec. 303.31--Securing and Enforcing Medical Support
Obligations
Sec. 304.21--Federal Financial Participation in the Costs of
Cooperative Arrangements with Courts and Law Enforcement Officials
Sec. 304.40--Repayment of Federal Funds by Installments
Sec. 305.64--Audit Procedures and State Comments
Sec. 305.66--Notice, Corrective Action Year, and Imposition
of Penalty
Sec. 307.5--Mandatory Computerized Support Enforcement
Systems
Section 301.1--General Definitions
1. Comment: One commenter thought it would be clearer to include
``in writing'' or ``written information if requested'' to the
definition of ``record.''
Response: We do not agree that this clarification is needed. The
regulation defines ``record'' as ``information that is inscribed on a
tangible medium or that is stored in an electronic or other medium and
is retrievable in perceivable form.'' This includes documents that are
``in writing.'' As noted in the preamble under Topic 2, the Uniform
Electronic Transactions Act explains that this definition ``includes
any method for storing or communicating information, including
`writings.' ''
2. Comment: Besides adding definitions for procedures and records,
one commenter suggested we added definitions for low income or
subsistence level.
Response: We do not agree that additional definitions are needed.
Each State should have the flexibility and discretion to define these
terms.
Section 303.2--Establishment of Cases and Maintenance of Case Records
1. Comment: One commenter recommended for consistency with
[[Page 93555]]
Sec. 303.2(a)(3) and for clarity for when the 5 working day timeframe
begins, please consider replacing the newly added words ``made by''
with the word ``received'' in Sec. 303.2(a)(2).
Response: We agree and have made the requested change.
Section 303.11--Case Closure Criteria
1. Comment: We invited comments on 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. Three commenters requested the ability to notify the recipient
of services by mail or electronic means if the recipient of services
has authorized electronic notifications.
Response: At this time, we have decided not to provide the State
the flexibility to send case closure notices in a record, such as
emails, text messaging and voice mail to all parents since there was
not overwhelming support to do so. While an electronic case closure
notice may be an appropriate, and even the preferred, method of
notification on a case-by-case basis for some custodial parents, it may
not be an effective means to notify other parents. Many parents in the
child support caseload have limited incomes, and may not have
convenient access to a computer, the internet, or mobile communication.
However, we have added a new Sec. 303.11(d)(6) to allow States to
issue case closure notices under paragraphs (d)(1) and (4)
electronically, on a case-by-case basis, when the recipient of services
consents to electronic notifications. The State must keep documentation
of the recipient's authorization of the consent in the case record.
2. Comment: One commenter inquired why the notice in the proposed
Sec. 303.11(d)(6) is not required to be in writing.
Response: The notice is required to be in writing and we made this
correction in this final rule to Sec. 303.11(d)(4) since the numbering
scheme changed as a result of deleting some notice requirements.
Topic 3: Technical Corrections (Sec. Sec. 301.15; 302.14; 302.15;
302.32; 302.34; 302.35; 302.65; 302.70; 302.85; 303.3; 303.7; 303.11;
304.10; 304.12; 304.20; 304.21; 304.23; 304.25; 304.26; 305.35; 305.36;
305.63; 308.2; 309.85; 309.115; 309.130; 309.145; and 309.160)
In the response to comments below, we only discuss sections for
which we received applicable comments. Overall, 32 commenters mainly
supported our technical revisions, but they had some suggested
revisions or needed clarification on some of the issues. We did not
receive any comments related to the technical corrections that we
needed to address for the following sections:
Sec. 302.14--Fiscal policies and accountability;
Sec. 302.15--Reports and maintenance of records;
Sec. 302.35--State parent locator service;
Sec. 302.65--Withholding of unemployment compensation;
Sec. 302.70--Required State laws;
Sec. 302.85--Mandatory computerized support enforcement
system;
Sec. 303.3--Location of noncustodial parents in IV-D cases;
Sec. 303.7--Provision of services in intergovernmental IV-D
cases;
Sec. 303.11--Case closure criteria;
Sec. 304.10--General administrative requirements;
Sec. 304.12--Incentive payments;
Sec. 304.20--Availability and rate of Federal financial
participation;
Sec. 304.23--Expenditures for which Federal financial
participation is not available;
Sec. 304.25--Treatment of expenditures; due date;
Sec. 304.26--Determination of Federal share of collections;
Sec. 305.63--Standards of determining substantial compliance
with IV-D requirements;
Sec. 309.85--What records must a Tribe or Tribal organization
include in a Tribal IV-D plan;
Sec. 309.130--How will Tribal IV-D programs be funded and
what forms are required?;
Sec. 309.145--What costs are allowable for Tribal IV-D
programs carried out under Sec. 309.65(b) of this part?;
Sec. 309.160--How will OCSE determine whether Tribal IV-D
program funds are appropriately expended?
Section 301.15--Grants
1. Comment: Two commenters suggested that the suffix ``A'' be
eliminated from all references to Form OCSE-396A and OCSE-34A to
reflect the changes made in the ACF Office of Grants Management (OGM)
AT-14-01 and OCSE AT-14-14, Revised Quarterly Financial Reporting
Forms--2014.\113\
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\113\ Available at: http://www.acf.hhs.gov/programs/css/resource/revised-quarterly-financial-reporting-forms-2014.
---------------------------------------------------------------------------
Response: We agree. The suffix ``A'' was deleted to reflect the
recent redesignation of these financial forms in accordance with OGM
AT-14-01 and OCSE-AT-14-14.
2. Comment: One commenter requested clarification on section
301.15(b). When financial reports are submitted through the On-Line
Data Collection system (OLDC), the ``signature of the authorized State
program official'' is an electronic signature. The commenter suggested
that the reference to the signature in paragraph (2) be revised so that
it is clear that the signature is electronic.
Response: We have clarified in both paragraphs (a)(1) and (2) that
the signature of the authorized State program official is a digital
signature since both the OCSE-396 and the OCSE-34 will be submitted
electronically, as indicated in paragraph (b)(1).
3. Comment: One commenter suggested the last sentence of revised
paragraph (a)(2) regarding the data used in the computation of the
quarterly grant awards issued to the States appears to be misplaced and
believes a more appropriate placement is in paragraph (c) Grant Award.
Response: We do not believe this revision is necessary. This
sentence summarizes the purposes of the OCSE-34. Paragraph (c)
indicates that the quarterly grant award is based on the information
submitted by the State on the financial reporting forms and consists of
an advance of funds for the next quarter, reconciliation of the advance
provided for the current quarter, and access to funds.
4. Comment: One commenter requested clarification that technical
correction in 301.15(d)(1) does not reflect 45 CFR part 75 Interim
Final Rule for the Uniform Guidance effective December 26, 2014 since
45 CFR parts 74 and 92 were superseded when HHS adopted promulgated 45
CFR part 75 as indicated in 45 CFR 75.104.
Response: We agree. However, the recent HHS Interim Final Rule,
effective January 20, 2016 (81 FR 3004),\114\ contains technical
amendments to HHS regulations regarding the Uniform Guidance. The
regulatory content updates cross-references within HHS regulations to
replace part 74 with part 75. Therefore, it is no longer necessary to
make the proposed revisions and we will delete these proposed revisions
in the final rule, except as otherwise noted.
---------------------------------------------------------------------------
\114\ The Uniform Guidance HHS technical corrections are
available at: https://www.gpo.gov/fdsys/pkg/FR-2016-01-20/pdf/2015-32101.pdf.
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Section 302.32--Collection and Disbursement of Support Payments by the
IV-D Agency
1. Comment: To be consistent with the definitions in Sec. 303.7
Provision of Services in Interstate IV-D Cases, one commenter suggested
that Sec. 302.32(b)(1)
[[Page 93556]]
be changed to replace ``interstate'' with ``intergovernmental'' and
``initiating State'' with ``initiating agency.''
Response: We agree and have made the proposed revisions in the
final rule.
Section 302.34--Cooperative Arrangements
1. Comment: While many commenters supported our proposed changes,
one commenter requested OCSE develop a definition for corrections
officials. For instance, the commenter asked if the term ``corrections
officials'' includes sheriff departments. One commenter encouraged us
to include community corrections officials.
Response: OCSE is not specifically defining corrections officials
to allow flexibility for the State to define it based on how the State
is organized. However, we would like to clarify that cooperative
arrangements are required for corrections officials at any governmental
level, such as Federal, State, Tribal, and local levels. OCSE
encourages child support agencies to collaborate with Federal, State,
Tribal, and local corrections officials, including community
corrections officials (probation and parole agencies), to provide case
management services, review and adjust support orders, provide
employment services to previously incarcerated noncustodial parents,
etc. The National Institutes of Justice notes that community
corrections programs ``. . . oversee offenders outside of jail or
prison and . . . include probation--correctional supervision within the
community rather than jail or prison--and parole--a period of
conditional, supervised release from prison.'' \115\
---------------------------------------------------------------------------
\115\ National Institutes of Justice, Office of Justice
Programs, DOJ--http://www.nij.gov/topics/corrections/community/pages/welcome.aspx.
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Section 304.21--Federal Financial Participation in the Costs of
Cooperative Arrangements With Courts and Law Enforcement Officials
1. Comment: Commenters requested clarification as to whether the
inclusion of corrections officials in the definition of law enforcement
officials allows the State to sign a cooperative arrangement with a
sheriff to operate a child support warrant task force or to operate a
county jail and receive FFP.
Response: OCSE encourages Child Support Enforcement agencies to
collaborate with corrections institutions and community corrections
officials, such as probation and parole agencies. As noted in our
response to comments under Sec. 302.34, OCSE is not specifically
defining corrections officials to allow flexibility for the State to
define it based on how the State is organized.
Regarding sheriff's costs for a child support warrant task force,
since these costs would relate to reviewing the warrant process to
evaluate the quality, efficiency, effectiveness, and scope of support
enforcement services and securing compliance with the requirements of
the State plan, these costs would be allowable under 45 CFR
304.20(b)(1). However, the State should execute a purchase of service
agreement under Sec. 304.22, rather than a cooperative agreement.
Regarding sheriff's costs for operating a county jail, since we do
not provide FFP related to jailing costs under Sec. 304.23(i), these
costs would not qualify for FFP reimbursement. Section 304.23(i) was
inadvertently left out of the NPRM and is corrected in this final rule.
This is discussed in more detail in Comment/Response 3 in Sec. 304.23,
Expenditures for which Federal Financial Participation Is Not
Available.
2. Comment: Another commenter asked if the costs of forming
cooperative arrangements with courts and corrections officials to
receive notice of incarceration of noncustodial parents triggering
state-initiated review under Sec. 303.8 are included as allowable
expenditures eligible for Federal financial participation.
Response: Yes, these costs would be allowable expenditures related
to improving the State's establishment and enforcement of support
obligations under Sec. 304.20(b)(3).
3. Comment: Another commenter indicated that by adding corrections
officials, they believed that a State could enter into a cooperative
agreement with a community corrections provider, which would enable
electronic monitoring to be funded directly through the local agency
doing the electronic monitoring.
Response: We do not agree with this interpretation. We do not allow
for FFP to be used for electronic monitoring costs since these costs
are a general cost of government and are related to the judicial branch
under 45 CFR 75.444(a)(3).
4. Comment: Multiple commenters asked if courts are eligible for
FFP for education and outreach activities intended to inform the public
about the child support enforcement program.
Response: States may enter into cooperative agreements with courts
to provide 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. As such, we have added to Sec. 304.21(a)(1) a cross-
reference to Sec. 304.20(b)(12).
5. Comment: One commenter asked for clarification on the inclusion
of ``corrections officials'' in Sec. 304.21 and Sec. 302.34.
Response: Please see our response to this comment under Comment/
Response 1 for Sec. 302.34, Cooperative Arrangements under Topic 3.
Section 305.35--Reinvestment
1. Comment: One commenter thought that the proposed formula for
determining State Current Spending Level may not accurately measure a
State's compliance with Sec. 305.35 due to the significant differences
in the timing of expenditures reported on the OCSE-396 for each Federal
fiscal year because approximately 50 percent of total expenditures
reported to OCSE are county-related prior quarter adjustments.
Response: We do not agree that a State's compliance would not
accurately be measured due to expenditure timing differences. As
discussed in ``Instructions for Completion of Form OCSE-396,'' there is
no deadline for spending incentive payments. Incentive payments remain
available to the State until completely expended. Once expended,
however, those expenditures must be reported on Line 1a or 1d, as
applicable, within 2 years, in accordance with section 1132 of the Act.
Expenditures are considered made on the date the payment occurs,
regardless of the date of receipt of the good or performance of the
service. For State-administered expenditures, the date of this
transaction by the State agency governs; for locally-administered
programs, the date of the transaction by the county, city, or other
local agency governs.\116\
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\116\ The Instructions for the OCSE-396 are available at: http://www.acf.hhs.gov/programs/css/resource/instructions-for-ocse-396-quarterly-financial-report.
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2. Comment: A few commenters requested clarification regarding the
applicability of this section to political subdivisions to which the
incentives are provided by the States.
Response: As discussed in both AT-01-01 and AT-01-04,\117\ OCSE
indicated that any payments made to political subdivisions must be used
in
[[Page 93557]]
accordance with the provisions in Sec. 305.35. States are responsible
for ensuring that all components of their child support program must
comply with the reinvestment requirements, including local or county
programs, other State agencies, vendors or other entities that perform
child support services under contract or cooperative agreement with the
State.
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\117\ Available at: http://www.acf.hhs.gov/programs/css/resource/final-rule-on-incentives-penalties-and-audit and http://www.acf.hhs.gov/programs/css/resource/reinvestment-of-child-support-incentive-payments, respectively.
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3. Comment: One commenter believed that our regulation should go
further into requiring that these funds actually be spent. The
commenter thought that localities should not be allowed to ``stock-pile
incentive dollars,'' and should require localities to spend incentives
within 2 years of being earned or submit a long-term spending plan for
our approval. The commenter added that if a local agency receiving
incentive funds does not spend the funds, then these funds should be
forfeited to another local agency in the same community that provides
an approved spending plan. This would foster intra-county cooperation
in the use of funds. It would also allow the agency more directly
involved in the daily enforcement of child support services the
opportunity for a larger share of incentives.
Response: As discussed in the response to Comment/Response 2,
States are responsible for ensuring that all components of their child
support program must comply with the reinvestment requirements,
including local or county programs, other State agencies, vendors, or
other entities that perform child support services under contract or
cooperative agreement with the State. Additionally, as discussed in our
response to Comment/Response 1, there is no deadline for spending
incentive payments. Incentive payments remain available to the State
until completely expended. Once expended, however, those expenditures
must be reported on Line 1a or 1d of the OCSE-396, as applicable,
within 2 years, in accordance with section 1132 of the Act.
4. Comment: One commenter asked if Sec. 305.35 allowed the use of
State IV-D agency and/or other county component current spending level
surpluses to offset State IV-D agency and/or county components with
current spending level deficits in Federal fiscal years where the total
of all components making up the State current spending levels exceeds
the State baseline expenditure level to avoid disallowance of incentive
amounts.
Response: No, a State must expend the full amount of incentive
payments received to supplement, and not supplant, other funds used by
the State to carry out its IV-D program activities or funds for other
activities approved by the Secretary, which may contribute to improving
the effectiveness or efficiency of the State's child support program,
including cost-effective contracts with local agencies.
5. Comment: Several commenters asked questions regarding
clarification on the base year amount and whether the base year amount
needs to be recalculated annually for States and, if applicable,
political subdivisions. One commenter wanted to provide an option to
recalculate the base year amount for the few States that had incentives
included in their base year amount. Another commenter indicated that
the rule needed to be updated to calculate a new base level of funding
since the base level had not been updated for over two decades.
Response: As specified in Sec. 305.35(d), a base amount of
spending was determined by subtracting the amount of incentive funds
received by the State child support program for Fiscal Year 1998 from
the total amount expended by the State in the program for the same
period. Alternatively, States had an option of using the average amount
of the previous three fiscal years (1996, 1997, and 1998) for
determining the base amount. The base amount of State spending must be
maintained in future years.
OCSE calculated the base amount of spending for each State using
1998 expenditure data unless the State notified OCSE that the State
preferred the base amount as an average of the 1996, 1997, and 1998
expenditures. Only five States (Georgia, Mississippi, New Jersey, New
York, and South Dakota) requested the use of the three-year
average.\118\ At this time, we have no plans for updating the base
level.
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\118\ See Dear Colleague Letter (DCL) 01-50, available at:
http://www.acf.hhs.gov/programs/css/resource/base-level-program-expenditures-for-incentive-reinvestment-revised.
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On June 23, 2011, OCSE sent letters to all IV-D Directors reminding
them of the actual amount of their base level expenditures for
incentive reinvestment purposes.
6. Comment: One commenter suggested the following as an alternative
to our proposed changes in Sec. 305.35(d) in the NPRM: ``State
expenditures may not be reduced as a result of the receipt and
reinvestment of incentive payments, but can be reduced under the
baseline as a result of cost savings.''
Response: We do not agree with this proposed change because the
baseline spending level cannot be reduced as a result of cost savings.
As discussed in the final rule on incentive payments to States, 65 FR
82178 (December 27, 2000),\119\ OCSE recognized that ``a fixed base
year could potentially penalize States that reduce costs as a result of
program improvements or cuts in government spending. On the other hand,
we also recognized that a fixed base year would not reflect inflation
or other increases in the costs of personnel or services. Thus, any
negative effects would be lessened over time.''
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\119\ Available at: https://www.gpo.gov/fdsys/pkg/FR-2000-12-27/xml/FR-2000-12-27.xml.
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7. Comment: Several commenters suggested that the suffix ``A'' be
eliminated from all references to Form OCSE-396A and OCSE-34A to
reflect the changes made in OGM AT-14-01 and OCSE AT-14-14.\120\
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\120\ Available at: http://www.acf.hhs.gov/programs/css/resource/revised-quarterly-financial-reporting-forms-2014.
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Response: We agree. The suffix ``A'' was deleted in all references
to OCSE-396A in paragraph (e) to reflect the recent redesignation of
these financial forms in accordance with OGM AT-14-01 and OCSE AT-14-
14.
8. Comment: One commenter thought that the term ``disallowances of
incentive amounts'' was unclear, and suggested that we replace it with
``a reduction in incentives awarded.''
Response: We do not agree with this suggested revision. OCSE has
used the disallowance terminology since Federal fiscal year 2001. It is
technically correct in terms of grants management. OCSE would be making
a disallowance, which may be collected by reducing the State's
incentive payments or State's child support grant payments.
9. Comment: Another commenter believed that a disallowance for a
State not reinvesting the full amount of the incentive payment to
supplement, not supplant, other funds used by the State to carry out
the child support program or to use the funds for other activities,
approved by the Secretary for improving the efficiency and
effectiveness of the program, seems like a harsh penalty. The commenter
suggested that in cases of non-compliance, OCSE should follow the
progressive steps outlined in Sec. 305.66 by providing the State with
a corrective action year.
Response: We do not agree with the suggestion. Section 305.66
outlines the steps taken when a State is found by the Secretary to be
subject to a penalty as described in Sec. 305.61. This section does
not identify incentive funds not being reinvested as a reason that a
State would be subject to a financial penalty. Additionally, we do not
support this change since the financial penalty would be much harsher.
A disallowance
[[Page 93558]]
as proposed would result in penalty amounts from one to five percent of
the State's title IV-A payments.
10. Comment: One commenter believed that our calculation related to
the State Share of Expenditure in paragraph (e)(1) was incorrect. The
commenter thought that the correct calculation should be ``Total
Expenditures less expenditures funded with incentives = the base for
determining the State share. The base for determining the State share
is multiplied by 34% and that result is compared to the required base
level spending.''
Response: We do not agree with this change in our formula. The
formula in the final rule is the formula that we have been using since
2001. The State Share of Expenditures must deduct the Federal Share of
total expenditures claimed for the current quarter and prior quarter
adjustments claimed on the OCSE-396 for all four quarters of the fiscal
year.
Section 305.36--Incentive Phase-In
1. Comment: One commenter requested an additional conforming
revision to delete 45 CFR 305.36 since it was an outdated requirement
from 2002.
Response: We agree with the commenter and have deleted the outdated
provision.
V. Impact Analysis
Paperwork Reduction Act of 1995
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 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[dash]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[dash]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[dash]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[dash]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[dash]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 discontinued Systems Modification. One[dash]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.
Added requirement under Sec. Systems Modification. One[dash]time system 400 hours x $100 x 54 2,160,000 1,425,600 734,400
307.11 develop automated enhancement. States.
procedures to identify the
recipient of Supplemental Security
Income (SSI).
Added requirement for State plan State plan amendment. One time for 54 State 2 hours x $54.08 x 54 5,840.64 2,920.32 2,920.32
page amendment under 42 CFR Medicaid programs, States.
433.152. (which includes DC
and 3 territories).
Added requirement for cooperative Cooperative agreement One time for 54 State 10 hours x $54.08 x 29,203.20 14,601.60 14,601.60
agreements with IV[dash]D agencies Medicaid programs. 54 States.
under 42 CFR 433.152.
----------------------------------------------------------------------
Totals......................... ..................... ..................... 265,248 hrs.......... 26,495,043.84 17,481,121.92 9,013,921.92
--------------------------------------------------------------------------------------------------------------------------------------------------------
Part 302 contains information collection requirements subject to
the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Although
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 June 30, 2017. 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.
None of the forms are new burdens on States. For example Sec.
303.100 clarifies the 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 number is 0970-0154, which expires on
July 31, 2017. Section 303.35 clarifies that the OCSE-396 is used to
calculate the State current spending level. This form is an OMB-
approved form, Control number 0970-0181, which expires on May 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. SF 425 is an OMB-
approved
[[Page 93559]]
form, Control number 0348-0061, which expired on February 28, 2015.
With regard to the 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 will 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 $35,043.84 with a State share of $17,521.92. The Centers for
Medicare and Medicaid Services 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 $54.08/hour,
which is the mean hourly wage of management officials according to 2014
data from the Bureau of Labor Statistics.\121\
---------------------------------------------------------------------------
\121\ The BLS Occupational Employment Statistics 2014 wage data
for management occupations is available at: www.bls.gov/oes/current/oes110000.htm.
---------------------------------------------------------------------------
Other than 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 regulation.
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 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, reducing costs, harmonizing rules, and 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.
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, and CMS State plan
changes. This rule has a total cost of approximate $26,495,044. This
includes a total cost of $26,460,000 to modify statewide IV-D systems
for the 54 States or Territories at a cost of $100 an hour (with an
assumption that 27 States will implement the optional requirements),
with $17,463,600 as the Federal share. In addition, there is a cost of
$35,044 is designated to CMS' costs for State plan amendments and
cooperative agreements, which includes the Federal share of $17,522.
These regulations 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 $146 million. This 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 $146 million in any one year.
Congressional Review
This final rule is not a major rule as defined in 5 U.S.C. Chapter
8.
Assessment of Federal Regulations and Policies on Families
Section 654 of the Treasury and General Government Appropriations
Act of 1999 requires Federal agencies to determine whether a 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
helping to ensure that parents support their children, even when they
reside in separate jurisdictions, and will strengthen personal
responsibility and increase disposable family income.
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 or 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. This final rule does not have federalism impact as
defined in the Executive Order.
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.
45 CFR Part 309
Child support, Grant programs--social programs, Indians, Reporting
and recordkeeping requirements.
[[Page 93560]]
(Catalog of Federal Domestic Assistance Programs No. 93.563, Child
Support Enforcement Program.)
Mark H. Greenberg,
Acting Assistant Secretary for Children and Families.
Andy Slavitt,
Acting Administrator for the Centers for Medicare & Medicaid Services.
Sylvia M. Burwell,
Secretary.
0
For the reasons discussed above, the Department of Health and Human
Services amends 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, effective January 20, 2017 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
provided through an Indian Health Program (as defined at 25 U.S.C.
1603(12)), including through the Purchased/Referred Care program, 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-396: Child Support
Enforcement Program Quarterly Financial 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
digital 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-34: Child Support Enforcement Program Quarterly
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 digital 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-396 and the Federal share of child support
collections reported on Form OCSE-34 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-396 and OCSE-34 must be
electronically submitted no later than 45 days following the end of the
each fiscal quarter. No submission, revisions, or adjustments of the
financial reports submitted for any quarter of a fiscal year will be
accepted by OCSE later than December 31, which is 3 months after the
end of the fiscal year.
[[Page 93561]]
(3) Review and approval. The data submitted on Forms OCSE-396 and
OCSE-34 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 Program Support Center's 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 administrative requirements. The provisions of part 95
of this title, establishing general administrative requirements for
grant programs and part 75 of this title, establishing uniform
administrative requirements and cost principles, shall apply to all
grants made to the States under this part, with the following
exceptions:
(1) 45 CFR 75.306, Cost sharing or matching and
(2) 45 CFR 75.341, Financial reporting.
* * * * *
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
75.361 through 75.370.
0
9. Amend Sec. 302.15 by removing ``and'' at the end of paragraph
(a)(6), revising paragraph (a)(7), and adding 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; and
(8) The retention and custodial requirements for the records in
this section are prescribed in 45 CFR 75.361 through 75.370
* * * * *
0
10. Amend Sec. 302.32 by revising the section heading, introductory
text, and paragraphs (a), (b) introductory text, and (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 in accordance with 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 intergovernmental IV-D cases, amounts collected by the
responding State on behalf of the initiating agency must be forwarded
to the initiating agency 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 paternity-only limited services in an intrastate case. If the
State chooses this option, the State must define how this process will
be implemented and must establish and use procedures, including
domestic violence safeguards, which are reflected in a record, that
specify when paternity-only limited services will be available. An
application will be considered full-service unless the parent
specifically applies for paternity-only limited services in accordance
with the State's procedures. If one parent specifically requests
paternity-only limited services and the other parent requests full
services, the case will automatically receive full services. The State
will be required to charge the application and service fees required
under paragraphs (c) and (e) of this section for paternity-only limited
services, 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 availability of paternity-only limited services, consequences of
selecting this 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
[[Page 93562]]
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; and 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, caretaker relative having custody
of or responsibility for the child or children, judicially-appointed
conservator with a legal and fiduciary duty to the custodial parent and
the child, or alternate caretaker designated in a record by the
custodial parent. An alternate caretaker is a nonrelative caretaker who
is designated in a record by the custodial parent to take care of the
children for a temporary time period.
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 orders.
(a) Within 1 year after completion of the State's next quadrennial
review of its child support guidelines, that commences more than 1 year
after publication of the final rule, in accordance with Sec.
302.56(e), as a condition of approval of its State plan, the State must
establish one set of child support guidelines by law or by judicial or
administrative action for setting and modifying child support order
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.
(c) The child support guidelines established under paragraph (a) of
this section must at a minimum:
(1) Provide that the child support order is based on the
noncustodial parent's earnings, income, and other evidence of ability
to pay that:
(i) Takes into consideration all earnings and income of the
noncustodial parent (and at the State's discretion, the custodial
parent);
(ii) Takes into consideration the basic subsistence needs of the
noncustodial parent (and at the State's discretion, the custodial
parent and children) who has a limited ability to pay by incorporating
a low-income adjustment, such as a self-support reserve or some other
method determined by the State; and
(iii) If imputation of income is authorized, takes into
consideration the specific circumstances of the noncustodial parent
(and at the State's discretion, the custodial parent) to the extent
known, including such factors as the noncustodial parent's assets,
residence, employment and earnings history, job skills, educational
attainment, literacy, age, health, criminal record and other employment
barriers, and record of seeking work, as well as the local job market,
the availability of employers willing to hire the noncustodial parent,
prevailing earnings level in the local community, and other relevant
background factors in the case.
(2) Address how the parents will provide for the child's health
care needs through private or public health care coverage and/or
through cash medical support;
(3) Provide that incarceration may not be treated as voluntary
unemployment in establishing or modifying support orders; and
(4) Be based on specific descriptive and numeric criteria and
result in a computation of the child support obligation.
(d) The State must include a copy of the child support guidelines
in its State plan.
(e) The State must review, and revise, if appropriate, the child
support 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 order amounts. The State
shall publish on the internet and make accessible to the public all
reports of the guidelines reviewing body, the membership of the
reviewing body, the effective date of the guidelines, and the date of
the next quadrennial review.
(f) The State must provide that there will be a rebuttable
presumption, in any judicial or administrative proceeding for the
establishment and modification of a child support order, that the
amount of the order which would result from the application of the
child support guidelines established under paragraph (a) of this
section is the correct amount of child support to be ordered.
(g) A written finding or specific finding on the record of a
judicial or administrative proceeding for the establishment or
modification of a child support order that the application of the child
support 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
child support 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) As part of the review of a State's child support guidelines
required under paragraph (e) of this section, a State must:
(1) Consider economic data on the cost of raising children, labor
market data (such as unemployment rates, employment rates, hours
worked, and earnings) by occupation and skill-level for the State and
local job markets, the impact of guidelines policies and amounts on
custodial and noncustodial parents who have family incomes below 200
percent of the Federal poverty level, and factors that influence
employment rates among noncustodial parents and compliance with child
support orders;
(2) Analyze case data, gathered through sampling or other methods,
on the application of and deviations from the child support guidelines,
as well as the rates of default and imputed child support orders and
orders determined using the low-income adjustment required under
paragraph (c)(1)(ii) of this section. The analysis must also include a
comparison of payments on child support orders by case characteristics,
including whether the order was entered by default, based on imputed
income, or determined using the low-income adjustment required under
paragraph (c)(1)(ii). The analysis of the data must be used in the
State's review of the child support guidelines to ensure that
deviations from the guidelines are limited and guideline amounts are
appropriate based on
[[Page 93563]]
criteria established by the State under paragraph (g); and
(3) Provide a meaningful opportunity for public input, including
input from low-income custodial and noncustodial parents and their
representatives. The State must also obtain the views and advice of the
State child support agency funded under title IV-D of the Act.
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. Revising paragraph (b);
0
d. 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
e. Revising paragraph (c)(3).
The revisions and addition 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 cases to pursue via the withholding of unemployment
compensation for support purposes. These criteria must be designed to
ensure 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. Amend Sec. 302.85 by revising paragraphs (a)(1) and (b)(2)(ii) to
read as follows:
Sec. 302.85 Mandatory computerized support enforcement system.
(a) * * *
(1) * * * This guide is available on the OCSE Web site; and
(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
19. 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
20. 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 received 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.
* * * * *
0
21. Amend Sec. 303.3 by:
0
a. Revising paragraph (b)(1); and
0
b. In paragraph (b)(5), removing the term ``State employment security''
and adding the term ``State workforce'' in its place.
The revision reads as follows:
Sec. 303.3 Location of noncustodial parents in IV-D cases.
* * * * *
(b) * * *
(1) Use appropriate location sources such as the Federal PLS;
interstate location networks; local officials and employees
administering public assistance, general assistance, medical
assistance, Supplemental Nutrition Assistance Program (SNAP) and social
services (whether such individuals are employed by the State or a
political subdivision); relatives and friends of the noncustodial
parent; current or past employers; electronic communications and
internet service providers; utility companies; the U.S. Postal Service;
financial institutions; unions; corrections institutions; fraternal
organizations; police, parole, and probation records if appropriate;
and State agencies and departments, as authorized by State law,
including those departments which maintain records of public
assistance, wages and employment, unemployment insurance, income
taxation, driver's licenses, vehicle registration, and criminal records
and other sources;
* * * * *
0
22. Amend Sec. 303.4 by revising paragraph (b) to read as follows:
Sec. 303.4 Establishment of support obligations.
* * * * *
(b) Use appropriate State statutes, procedures, and legal processes
in establishing and modifying support obligations in accordance with
Sec. 302.56 of this chapter, which must include, at a minimum:
(1) Taking reasonable steps to develop a sufficient factual basis
for the support obligation, through such means as
[[Page 93564]]
investigations, case conferencing, interviews with both parties, appear
and disclose procedures, parent questionnaires, testimony, and
electronic data sources;
(2) Gathering information regarding the earnings and income of the
noncustodial parent and, when earnings and income information is
unavailable or insufficient in a case gathering available information
about the specific circumstances of the noncustodial parent, including
such factors as those listed under Sec. 302.56(c)(1)(iii) of this
chapter;
(3) Basing the support obligation or recommended support obligation
amount on the earnings and income of the noncustodial parent whenever
available. If evidence of earnings and income is unavailable or
insufficient to use as the measure of the noncustodial parent's ability
to pay, then the support obligation or recommended support obligation
amount should be based on available information about the specific
circumstances of the noncustodial parent, including such factors as
those listed in Sec. 302.56(c)(1)(iii) of this chapter.
(4) Documenting the factual basis for the support obligation or the
recommended support obligation in the case record.
* * * * *
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)(5); and
0
c. Adding new paragraph (c)(4).
The addition reads as follows:
Sec. 303.6 Enforcement of support obligations.
* * * * *
(c) * * *
(4) Establishing guidelines for the use of civil contempt citations
in IV-D cases. The guidelines must include requirements that the IV-D
agency:
(i) Screen the case for information regarding the noncustodial
parent's ability to pay or otherwise comply with the order;
(ii) Provide the court with such information regarding the
noncustodial parent's ability to pay, or otherwise comply with the
order, which may assist the court in making a factual determination
regarding the noncustodial parent's ability to pay the purge amount or
comply with the purge conditions; and
(iii) Provide clear notice to the noncustodial parent that his or
her ability to pay constitutes the critical question in the civil
contempt action; and
* * * * *
0
25. Amend Sec. 303.7 by revising paragraphs (c)(10) and (d)(10) and
adding paragraph (f) to read as follows:
Sec. 303.7 Provision of services in intergovernmental IV-D cases.
* * * * *
(c) * * *
(10) Distribute and disburse any support collections received in
accordance with this section and Sec. Sec. 302.32, 302.38, 302.51, and
302.52 of this chapter, sections 454(5), 454B, 457, and 1912 of the
Act, and instructions issued by the Office;
(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 new paragraph (b)(2);
0
c. Revising newly redesignated paragraph (b)(7);
0
d. Adding a sentence at the end of paragraph (c); and
0
e. Revising paragraph (d).
The additions and revisions 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 learning that a noncustodial parent will be incarcerated
for more than 180 calendar days, without the need for a specific
request and, upon notice to both parents, review and, if appropriate,
adjust the order, in accordance with 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 an
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,
within 15 business days of when the IV-D agency learns that a
noncustodial parent will be incarcerated for more than 180 calendar
days, to both parents informing them of the right to request the State
to review and, if appropriate, 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. Neither the notice nor a review is
required under this paragraph if the State has a comparable law or rule
that modifies a child support obligation upon incarceration by
operation of State law.
(c) * * * Such reasonable quantitative standard must not exclude
incarceration as a basis for determining whether an inconsistency
between the existing child support order amount and the amount of
support determined as a result of a review is adequate grounds for
petitioning for adjustment of the order.
(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
[[Page 93565]]
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 or are no
longer appropriate;
(6) Paternity cannot be established because:
(i) The child is at least 18 years old and an action to establish
paternity is barred by a statute of limitations that meets the
requirements of Sec. 302.70(a)(5) of this chapter;
(ii) A genetic test or a court or an 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 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, or has a
medically-verified total and permanent disability. 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 in accordance
with sections 1601 et seq., of title XVI of the Act, 42 U.S.C. 1381 et
seq.; or
(ii) Both SSI payments and Social Security Disability Insurance
(SSDI) benefits under title II of the Act.
(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 there is no Federal or State treaty or
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;
(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 IV-D agency, or at the option
of the State, 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-E, Supplemental Nutrition
Assistance Program (SNAP), and Medicaid, 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 responding agency documents failure by the initiating
agency to take an action that 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, SNAP, 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 IV-D case, including a case with arrears assigned to the
State, 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 State IV-D case to a Tribal IV-D agency
and closing the IV-D case with the State:
(A) The recipient of services requested the State to transfer the
case to the Tribal IV-D agency and close the case with the State; or
(B) The State IV-D agency notified the recipient of services of its
intent to transfer the case to the Tribal IV-D agency and close the
case with the State 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 State IV-D agency completely and fully transferred and
closed the case; and
(iii) The State IV-D agency notified the recipient of services that
the case has been transferred to the Tribal IV-D agency and closed; or
(iv) The Tribal IV-D agency has a State-Tribal agreement approved
by OCSE to transfer and close cases. The State-Tribal agreement must
include a provision for obtaining the consent from the recipient of
services to transfer and close the case.
(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 the Purchased/Referred Care
program, provided through an Indian Health Program (as defined at 25
U.S.C. 1603(12)).
[[Page 93566]]
(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) and (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 that 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) For cases to be closed in accordance with paragraph (b)(13) 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. 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 in accordance with paragraph (b)(13)
of this section, the recipient must complete a new application for IV-D
services and pay any applicable fee.
(5) 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 that 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 fee.
(6) For notices under paragraphs (d)(1) and (4) of this section, if
the recipient of services specifically authorizes consent for
electronic notifications, the IV-D agency may elect to notify the
recipient of services electronically of the State's intent to close the
case. The IV-D agency must maintain documentation of the recipient's
consent in the case record.
(e) The IV-D agency must retain all records for cases closed in
accordance with this section for a minimum of 3 years, in accordance
with 45 CFR 75.361.
0
28. Amend Sec. 303.31 by revising paragraphs (a)(2) and (3), (b)(1)
and (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 care coverage includes fee for service, health
maintenance organization, preferred provider organization, and other
types of private health insurance and public health care coverage 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 care coverage that is accessible to the
child(ren), as defined by the State, and is available to the parent
responsible for providing medical support and can be obtained for the
child at reasonable cost, as defined under paragraph (a)(3) of this
section, in new or modified court or administrative orders for support;
and
(ii) Allocate the cost of coverage between the parents.
(2) If health care coverage 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 care coverage, 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 care 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 care coverage 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
care coverage 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) * * *
(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 employer 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 45 CFR
[[Page 93567]]
part 75 (with the exception of 45 CFR 75.306, Cost sharing or matching
and 45 CFR 75.341, 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, and (b)(1)(viii)(A);
0
b. Removing the ``.'' at the end of paragraph (b)(1)(viii)(C) and
adding a ``;'' in its place;
0
c. Adding paragraphs (b)(1)(viii)(D) and (E);
0
d. Revising paragraphs (b)(1)(ix), (b)(2) introductory text,
(b)(2)(vii), and (b)(3) introductory text;
0
e. Redesignating paragraph (b)(3)(v) as paragraph (b)(3)(vii);
0
f. Adding paragraphs (b)(3)(v) and (vi);
0
g. Removing the semicolon at the end of the paragraph (b)(5)(v) and
adding a period in its place;
0
h. Removing ``; and'' at the end of paragraph (b)(9) and adding a
period in its place;
0
i. Revising paragraph (b)(11);
0
j. Adding paragraph (b)(12); and
0
k. 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
State title IV-D 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 75.326 through 75.340. 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 appropriate criteria for:
(A) Referring cases to and from the IV-D agency;
(B) The procedures to be used to coordinate services;
(C) Agreements to exchange data as authorized by law; and
(D) Transferring collections from the IV-D agency to the Medicaid
agency in accordance with Sec. 302.51(c) of this chapter.
(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 related to
providing child support services; and
* * * * *
(11) Medical support activities as specified in Sec. Sec. 303.30,
303.31, and 303.32 of this chapter.
(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
mean 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), (11), and (12);
* * * * *
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 in accordance with
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) Any expenditures for jailing of parents in child support
enforcement cases.
(j) The costs of guardians ad litem in IV-D actions.
[[Page 93568]]
Sec. 304.25 [Amended]
0
37. Amend Sec. 304.25(b) by 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).
The revision reads 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. Adding a sentence to the end of paragraph (d);
0
b. Redesignating paragraph (e) as paragraph (f); and
0
c. Adding new paragraph (e).
The additions 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-396, ``Child Support Enforcement Program
Quarterly Financial 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-396 for all four
quarters 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-396 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-396 for all four quarters of the fiscal year.
* * * * *
Sec. 305.36 [Removed]
0
42. Remove Sec. 305.36.
0
43. 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
44. Amend Sec. 305.64 by revising the second sentence of paragraph (c)
to read as follows:
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
45. 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
46. 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
47. 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
48. 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 payments or
concurrent SSI payments and Social Security Disability Insurance (SSDI)
benefits under title II of the Act, to prevent garnishment of these
funds from the noncustodial parent's financial account; and
(ii) Return funds to a noncustodial parent, within 5 business days
after the agency determines that SSI payments or concurrent SSI
payments and SSDI 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
49. The authority for part 308 continues to read as follows:
Authority: 42 U.S.C. 654(15)(A) and 1302.
0
50. Amend Sec. 308.2 by revising paragraphs (b)(2)(ii), (c)(3)(i), and
(f)(2)(i) to read as follows:
[[Page 93569]]
Sec. 308.2 Required program compliance criteria.
* * * * *
(b) * * *
(2) * * *
(ii) If location activities are necessary, using all appropriate
sources within 75 days according 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 according 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
51. The authority for part 309 is revised to read as follows:
Authority: 42 U.S.C. 655(f) and 1302.
Sec. 309.115 [Amended]
0
52. Amend Sec. 309.115 by:
0
a. Removing reference to ``Sec. 9.120 of this part'' and adding in its
place ``Sec. 309.120'' in paragraph (b)(2); and
0
b. Removing the reference to ``303.52'' and adding in its place
``302.52'' in paragraph (c)(2).
0
53. Amend Sec. 309.130 by revising paragraphs (b)(3) and (4) 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-34, ``Child Support Enforcement Program Quarterly
Collection Report'' 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, which is 3 months after the
end of the fiscal year.
* * * * *
0
54. 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 75.326 through 75.340. These agreements may
include:
* * * * *
0
55. Amend Sec. 309.160 by revising the first sentence to read as
follows:
Sec. 309.160 How will OCSE determine if Tribal IV-D program funds are
appropriately expended?
OCSE will rely on audits conducted under 45 CFR part 75, Subpart
F--Audit Requirements. * * *
[FR Doc. 2016-29598 Filed 12-19-16; 8:45 am]
BILLING CODE 4120-01-P