[Federal Register Volume 88, Number 133 (Thursday, July 13, 2023)]
[Proposed Rules]
[Pages 44760-44764]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14658]


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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 305

RIN 0970-AC95


Modifications to Performance Standards During Natural Disasters 
and Other Calamities

AGENCY: Office of Child Support Services (OCSS), Administration for 
Children and Families (ACF), Department of Health and Human Services 
(HHS or the Department).

ACTION: Notice of proposed rulemaking.

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

SUMMARY: OCSS proposes to provide temporary relief to states from 
certain child support program performance requirements and penalties 
during natural disasters and other calamities which have a negative 
impact on state child support program operations. The proposed rule 
would provide ACF with ongoing authority to modify performance measure 
requirements when states are affected by natural disasters and other 
calamities that have resulted, or are expected to result, in the 
failure of state child support programs to achieve performance 
standards for paternity establishment, support order establishment, and 
current collections. The proposed rule will enable states to avoid the 
imposition of penalties due to adverse data reliability audit findings 
during, and subsequent to, natural disasters and other calamities, 
including pandemics and declared public health emergencies.

DATES: Consideration will be given to written comments on this notice 
of proposed rulemaking (NPRM) received on or before September 11, 2023.

ADDRESSES: You may submit comments, identified by [docket number and/or 
Regulatory Information Number (RIN) number (0970-AC95)], by one of the 
following methods:
     Federal e-Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Written comments may be submitted to: Office of 
Child Support Services, Attention: Director of Policy and Training, 330 
C Street SW, Washington, DC 20201.
    Instructions: All submissions received must include the agency name 
and docket number or RIN for this rulemaking. All comments received 
will be posted without change to https://www.regulations.gov, including 
any personal information provided.

FOR FURTHER INFORMATION CONTACT: Tricia John, Division of Policy and 
Training, OCSS, telephone (202) 260-7143. Email inquiries to 
[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:

Submission of Comments

    Comments should be specific, address issues raised by the proposed 
rule, and explain reasons for any objections or recommended changes. 
Additionally, we will be interested in comments that indicate agreement 
with the proposal. We will not acknowledge receipt of the comments we 
receive. However, we will review and consider all comments that are 
relevant and are received during the comment period. We will respond to 
these comments in the preamble to the final rule.

Statutory Authority

    This NPRM is published under the authority granted to the Secretary 
of Health and Human Services by section 1102 of the Social Security Act 
(the Act) (42 U.S.C. 1302). Section 1102 of the Act authorizes the 
Secretary to publish regulations, not inconsistent with the Act, as may 
be necessary for the efficient administration of the functions with 
which the Secretary is responsible under the Act. The proposed relief 
from the support order establishment and current support collections 
performance measures may be waived, modified, or suspended through 
rulemaking under section 409(a)(8)(A)(i)(I) of the Act (42 U.S.C. 
609(a)(8)(A)(i)(I)). The proposed relief from the paternity 
establishment percentage (PEP) performance measure and data reliability 
audit requirements related to the PEP under this NPRM is based on 
statutory authority granted under section 452(g)(3)(A) of the Act (42 
U.S.C. 652(g)(3)(A)).

Justification

    The purpose of this proposed rule is to authorize the Secretary to 
provide

[[Page 44761]]

targeted and time-limited relief to states from certain performance 
penalties due to the impact of natural disasters and other calamities 
when such events have a negative impact on state child support program 
operations.
    Through this proposed rule, ACF will have the authority to modify 
the requirements for states to meet the following performance 
standards: the Paternity Establishment Percentage (PEP) performance 
standard of 90 percent under 45 CFR 305.40(a)(1), the support order 
establishment standard of 40 percent under 45 CFR 305.40(a)(2), and the 
current collections performance standard of 35 percent under 45 CFR 
305.40(a)(3). ACF may adjust these performance standards to a lower 
level to avoid imposing financial penalties on states and may also 
modify the requirements to avoid the imposition of penalties due to 
adverse data reliability audit findings. This would provide ACF with 
the flexibility to modify the performance requirements for a time-
limited period during, and subsequent to, natural disasters and other 
calamities.
    The need for rulemaking under the discretionary authority provided 
to the Secretary to modify performance penalty requirements became 
apparent during the COVID-19 pandemic. Due to disruptions to state 
child support program operations and to court operations during the 
COVID-19 pandemic, states experienced significant workload burdens and 
service backlogs. Since the start of the pandemic in early 2020, states 
have appealed for relief from program requirements in order to support 
their operations during the crisis. OCSS is able to provide certain 
flexibilities for administrative requirements under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170) 
(See OCSS Dear Colleague Letter 20-04: Flexibilities for State and 
Tribal Child Support Agencies during COVID-19 Pandemic \1\). However, 
these flexibilities do not extend to relief for financial penalties 
related to performance or adverse data reliability audit findings. 
States are concerned that performance-related financial penalties, 
which are imposed in the form of a reduction to state TANF grants, 
place an undue burden on state budgets and threaten funding that 
supports the very families who are most in need during a time of 
crisis.
---------------------------------------------------------------------------

    \1\ https://www.acf.hhs.gov/css/policy-guidance/flexibilities-state-and-tribal-child-support-agencies-during-covid-19-pandemic.
---------------------------------------------------------------------------

    To address penalty relief due to the impact of the COVID-19 
pandemic, ACF issued a final rule (87 FR 32090) on May 27, 2022, which 
provides states relief from performance penalties by modifying the PEP 
performance requirement from 90 percent to 50 percent for fiscal years 
2020, 2021, and 2022. While the COVID-19 relief rulemaking was 
expedited due to the emergency created by the pandemic, the rulemaking 
effort required over 200 days from the time the NPRM was published in 
2021 until the final rule was published in 2022. Due to the time 
required to accomplish rulemaking, ACF seeks the authority to provide 
relief in similar circumstances through a more streamlined approach, 
not requiring additional rulemaking during each event.
    Without this NPRM, there is no general authority in title IV-D (or 
in other statutory authority) to relieve states from these penalties 
similar to the flexibility provided to the TANF program. The TANF 
program's authority to promulgate such a regulation derives from the 
TANF program statute (42 U.S.C. 609(b)). Without statutory authority 
providing such flexibility to the Secretary regarding IV-D 
requirements, it is not possible to issue a regulation similar to 45 
CFR 262.5 for relief from title IV-D penalties.
    This proposed regulation seeks to provide ACF ongoing authority to 
grant time-limited, targeted flexibilities, allowing ACF to provide 
timely relief to states when natural disasters or other calamities 
significantly affect program operations without having to engage in 
separate rulemaking, and will apply to Federal fiscal year periods 
subsequent to September 30, 2022. This relief would support states who 
might otherwise face penalties for not meeting specific performance 
measure standards or which may fail the data reliability audits.

Background: State Child Support Program Performance Requirements

    Under Title IV-D of the Act, states are required to achieve 
performance levels in paternity establishment, support order 
establishment, and current support collections. Failure to achieve 
required performance levels may lead to penalties assessed as a 
percentage against the state's TANF grant.
    The PEP, support order establishment, and current collections 
performance measures, which are part of the overall performance, audit, 
penalties, and incentives for the child support program, are 
established under 452(g) of the Act and 45 CFR 305.40. Section 
452(a)(4)(C)(i) of the Act requires the Secretary to determine whether 
state-reported data used to determine the performance levels are 
complete and reliable. Additionally, section 409(a)(8)(A) of the Act 
and 45 CFR 305.61(a)(1) include the assessment of a financial penalty 
if there is a failure to achieve the required level of performance or 
an audit determines that the data is incomplete or unreliable.
    The required levels of performance for the PEP, support order 
establishment, and current collections performance measures are set out 
in 45 CFR 305.40:
     The PEP performance level must be at least 90 percent or 
an improvement of 2 to 6 percentage points over the previous year's 
level of performance, below which a state will incur a penalty.
     The support order establishment performance level must be 
at least 40 percent, below which a state will be penalized unless an 
increase of 5 percent over the previous year is achieved.
     The current collections performance level must be at least 
35 percent, below which a state will be penalized unless an increase of 
5 percent over the previous year is achieved.
    Section 409(a)(8)(A)(ii) of the Act and 45 CFR 305.61(a)(2) impose 
automatic corrective action for the subsequent fiscal year. A state 
also must submit complete and reliable data used in the performance 
measure calculations, which will be audited according to 45 CFR 305.60.
    If a state fails to meet the annual performance measure standards, 
or to show improvement in the subsequent year (2 to 6 percentage points 
for the PEP), the amount of the initial penalty will be equal to one to 
two percent of the adjusted State Family Assistance Grant for the 
state's TANF program in accordance with 45 CFR 305.61(c) and (d). A 
penalty against the state's TANF grant will also be imposed if the 
state fails to submit complete and reliable performance measure data 
and there is an adverse data reliability audit finding for a 
performance measure in the subsequent year. The penalty will continue 
to be assessed in accordance with section 409(a)(8)(B) of the Act and 
45 CFR 305.61 until the state is determined to have submitted complete 
and reliable data and achieved the required performance measure 
standards. In accordance with 45 CFR 262.1(e)(1), the state must expend 
additional state funds equal to the amount of the penalty (which will 
not count toward the maintenance-of-effort requirement under TANF) the 
year after the TANF grant penalty is assessed.

[[Page 44762]]

Section-by-Section Discussion of the Provisions of This Proposed Rule

Section 305.61: Penalty for Failure To Meet IV-D Requirements

    We propose to add a new provision to Part 305 (Program Performance 
Measures, Standards, Financial Incentives, and Penalties), to provide 
the Secretary with the authority to provide short-term relief from 
performance requirements related to the PEP, support order 
establishment, and current collections performance standards, when 
states are unable to meet those requirements due to the impact of 
natural disasters or other calamities on state child support program 
operations. We propose adding a new paragraph (f) to Sec.  305.61, 
Penalty for failure to meet IV-D requirements, to provide the Secretary 
with the authority, during and subsequent to natural disasters and 
other calamities, to temporarily modify the performance requirements 
for states to meet the paternity establishment percentage standard of 
90 percent under 45 CFR 305.40(a)(1), the support order establishment 
standard of 40 percent under 45 CFR 305.40(a)(2), and the current 
collections standard of 35 percent under 45 CFR 305.40(a)(3), to a 
lower level to avoid imposing the financial penalty on states. The 
proposed rule would also authorize the Secretary to set aside adverse 
data reliability audit findings under section 452(g) of the Act during 
the same time period.
    The proposed rule would require individual states and territories 
to initiate the request to modify the performance requirements 
specified under section 452(g) of the Act (42 U.S.C. 652(g)) and 45 CFR 
305.40(a)(1), under 45 CFR 305.40(a)(2), or under 45 CFR 305.40(a)(3) 
when a state has experienced a natural disaster or other calamity that 
has or will make compliance with the performance standards 
impracticable. The state may also ask the Secretary to set aside 
adverse data reliability audit findings under section 452(g) of the Act 
(42 U.S.C. 652(g)) and 45 CFR 305.61(a)(1)(ii) for the same time period 
as the time period for which a modification of performance requirements 
is sought.
    A natural disaster or other calamity includes state chief executive 
officer-declared states of emergency, pandemics, events designated by 
the President under the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C. 5170), and declared public health 
emergencies under section 319 of the Public Health Service Act (42 
U.S.C. 247d). The state's chief executive (or his or her designee, this 
title is illustrative only and reflects the position determined by the 
state which holds this authority) must demonstrate, based on available 
data, that such emergency has made the state's ability to attain one or 
more of the performance standards impracticable. The request for relief 
must include a narrative statement which describes both the 
circumstances and justification for the request. The statement should 
also provide information substantiating the impracticability of 
compliance with the standards, including a description of the specific 
conditions caused by the natural disaster or other calamity, including 
preliminary data provided by the state, as required under 45 CFR 
305.32(f), showing reduced performance.
    The request must also include information on the expected duration 
of the conditions that make compliance impracticable and include any 
other documentation or other information that the Secretary may require 
to make a determination regarding relief.
    The state must demonstrate to the satisfaction of the Secretary 
that the natural disaster or other calamity has directly resulted in a 
reduction in performance or is expected to result in a reduction in 
performance, based on data provided by the state.
    The statement and other documentation must demonstrate that the 
state: has not or will not meet one or more existing performance 
requirements, such that a performance penalty would apply; has 
submitted preliminary data to support the statement; and has provided 
all required information. Any additional information must be submitted 
as soon as the adverse effect of the natural disaster or other calamity 
giving rise to the request is known to the state.
    The Secretary will make a determination of the modified performance 
requirements based on preliminary data provided by the state under 45 
CFR 305.32(f) and shall provide written communication to the state of 
the decision and the period for which any modified standards shall 
apply. Relief from the performance requirements will be time-limited, 
based on the data presented by the state, and the Federal fiscal year 
period in which conditions are expected to make compliance 
impracticable.
    We propose providing the Secretary with the authority to provide 
temporary relief to align with the Federal fiscal year timeframes which 
align with the expected duration of the conditions that make compliance 
with the performance requirement impracticable. After the relief 
period, the performance requirements will revert back to the levels 
described under section 452(g) of the Act (42 U.S.C. 652(g)) and 45 CFR 
305.40(a)(1), under 45 CFR 305.40(a)(2), or under 45 CFR 305.40(a)(3), 
and the state will once again be subject to penalties for adverse data 
reliability audit findings related to the performance measures after an 
automatic corrective action year as specified in 45 CFR 305.42. This 
proposed rule will apply to Federal fiscal year periods subsequent to 
September 30, 2022.

Paperwork Reduction Act

    No new information collection requirements would be imposed by this 
proposed regulation.

Regulatory Impact Analysis

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule meets the standards of Executive Order 13563 
because it creates a short-term public benefit, at minimal cost to the 
Federal Government, by not imposing penalties against a state's TANF 
grant, during a time when public assistance funds are critically 
needed.
    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) 
will review all significant rules. OIRA has determined that this NPRM 
is significant and was accordingly reviewed by OMB.

Regulatory Flexibility Analysis

    The Secretary proposes to certify that, under 5 U.S.C. 605(b), as 
enacted by the Regulatory Flexibility Act (Pub. L. 96-354), this 
proposed rule, if finalized, 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 Regulatory Flexibility Act.

[[Page 44763]]

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires 
agencies to prepare an assessment of anticipated costs and benefits 
before issuing any rule that may result in an annual expenditure by 
state, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation). That threshold level is currently approximately $177 
million. This rule does not impose any mandates on state, local, or 
tribal governments, or the private sector, that will exceed this 
threshold in any year.

Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal agencies to determine whether a proposed 
policy or regulation may affect family well-being. If the agency's 
determination is affirmative, then the agency must prepare an impact 
assessment addressing seven criteria specified in the law. ACF believes 
it is not necessary to prepare a family policymaking assessment (see 
Pub. L. 105-277) because this regulation does not impose requirements 
on states or families and thus will not have any impact on family well-
being.

Executive Order 13132

    Executive Order 13132 prohibits an agency from publishing any rule 
that has federalism implications if the rule either imposes substantial 
direct compliance costs on state and local governments and is not 
required by statute, or the rule preempts state law, unless the agency 
meets the consultation and funding requirements of section 6 of the 
Executive Order. This rule does not have federalism impact as defined 
in the Executive Order 13132.
    January Contreras, Assistant Secretary of the Administration for 
Children & Families, approved this document on March 15, 2023.

List of Subjects in 45 CFR Part 305

    Child support, Program performance measures, standards, financial 
incentives, and penalties.

    Dated: July 6, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.

    For the reasons stated in the preamble, the Department of Health 
and Human Services proposes to amend 45 CFR part 305 as set forth 
below:

PART 305--PROGRAM PERFORMANCE MEASURES, STANDARDS, FINANCIAL 
INCENTIVES, AND PENALTIES

0
1. The authority citation for part 305 continues to read as follows:

    Authority:  42 U.S.C. 609(a)(8), 652(a)(4) and (g), 658a, and 
1302.

0
2. Amend Sec.  305.61 by adding new paragraph (f) to read as follows:


Sec.  305.61  Penalty for failure to meet IV-D requirements.

* * * * *
    (f) Authority to modify state requirements to meet paternity 
establishment percentages, support order establishment, or current 
collections performance measure standards during natural disasters and 
other calamities. During, and subsequent to, natural disasters and 
other calamities (e.g., state chief executive officer-declared states 
of emergency, pandemics, events designated by the President under the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5170), and declared public health emergencies under section 319 
of the Public Health Service Act, 42 U.S.C. 247d), the Secretary may 
temporarily modify the performance measure requirements for a state to 
meet the paternity establishment percentage standard of 90 percent 
under section 452(g) of the Act (42 U.S.C. 652(g)) and 45 CFR 
305.40(a)(1), the support order establishment standard of 40 percent 
under 45 CFR 305.40(a)(2), and the current collections standard of 35 
percent under 45 CFR 305.40(a)(3), to lower levels to avoid imposing 
financial performance penalties on states, and may set aside adverse 
data reliability audit findings under section 452(g) of the Act (42 
U.S.C. 652(g)) and 45 CFR 305.61(a)(1)(ii) during the same time period.
    For Federal fiscal years subsequent to September 30, 2022, the 
performance requirements for paternity establishment under section 
452(g) of the Act (42 U.S.C. 652(g)) and 45 CFR 305.40(a)(1), for 
support order establishment under 45 CFR 305.40(a)(2), and for current 
collections under 45 CFR 305.40(a)(3)--may be modified by the Secretary 
to a lower level under the conditions described in this section.
    (1) If a state experiences a natural disaster or other calamity 
(e.g., state chief executive officer-declared states of emergency, 
pandemics, events designated by the President under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170), 
and declared public health emergencies under section 319 of the Public 
Health Service Act, 42 U.S.C. 247d), the state's chief executive 
officer (or his or her designee) may submit to the Secretary a request 
to modify one or more of the performance requirements specified under 
section 452(g) of the Act (42 U.S.C. 652(g)) and 45 CFR 305.40(a)(1), 
under 45 CFR 305.40(a)(2), or under 45 CFR 305.40(a)(3).
    (2) The state may also ask the Secretary to set aside adverse data 
reliability audit findings under section 452(g) of the Act (42 U.S.C. 
652(g)) and 45 CFR 305.61(a)(1)(ii) for the same time period as the 
time period for which a modification of performance requirements is 
sought.
    (3) The request for a modification to the performance requirements 
must be submitted in accordance with the procedures specified in 
paragraphs (f)(4), (5) and (6) of this section. Any request other than 
one submitted with the initial application must be submitted as soon as 
the adverse effect of the natural disaster or other calamity giving 
rise to the request is known to the state.
    (4) A request for a modification of one or more of the performance 
requirements must include the following:
    (i) A narrative statement describing the circumstances and 
justification for the request to modify the state's performance 
requirement;
    (ii) Information substantiating the impracticability of compliance 
with the standards, including a description of the specific conditions 
caused by the natural disaster or other calamity which make compliance 
impracticable, including preliminary data provided by the state, as 
required under 45 CFR 305.32(f), showing reduced performance;
    (iii) Information on the expected duration of the conditions that 
make compliance impracticable; and
    (iv) Any other documentation or other information that the 
Secretary may require to make this determination.
    (5) The state must demonstrate to the satisfaction of the Secretary 
that the natural disaster or other calamity has directly resulted in a 
reduction in performance or is expected to result in a reduction in 
performance, based on data provided by the state. In its request for a 
temporary modification to one or more performance requirements, the 
state must be able to demonstrate that it:
    (i) Has not or will not meet one or more existing performance 
requirements, such that a performance penalty would apply;

[[Page 44764]]

    (ii) Has submitted preliminary data supporting this statement; and
    (iii) Has provided all required information requested by the 
Secretary.
    (6) The Secretary shall provide written communication of the 
decision to modify or decline to modify the performance standards, and 
the period for which any modified standards shall apply, after receipt 
of appropriate written communication from the chief executive officer.
    (i) If approved, a temporary modification in a performance 
requirement will expire on the last day of the Federal fiscal year for 
which it was approved.
    (ii) Adverse findings of data reliability audits of the state's 
performance data under 45 CFR 305.60 as reported during the period in 
which the performance requirement modification is approved will not 
result in a financial penalty pursuant to the state's request as 
specified in paragraph (f)(2) of this section.
    (iii) Unless the state receives a written approval of its 
performance requirement modification request, the performance 
requirements under section 452(g) of the Act (42 U.S.C. 652(g)) and 45 
CFR 305.40(a)(1), under 45 CFR 305.40(a)(2), and under 45 CFR 
305.40(a)(3) remain in effect.
    (iv) If the request for a performance requirement modification is 
denied, the denial is not subject to administrative appeal.

[FR Doc. 2023-14658 Filed 7-12-23; 8:45 am]
BILLING CODE 4184-41-P