For other versions of this document, see http://wikileaks.org/wiki/CRS-RL32258 ------------------------------------------------------------------------------ Order Code RL32258 CRS Report for Congress Received through the CRS Web Child Support Enforcement: Side-by-Side Comparison of Current Law and Two Versions of H.R. 4 (108th Congress) December 22, 2004 Carmen Solomon-Fears Specialist in Social Legislation Domestic Social Policy Division Congressional Research Service ~ The Library of Congress Child Support Enforcement: Side-by-Side Comparison of Current Law and Two Versions of H.R. 4 (108th Congress) Summary During the 108th Congress, the House of Representatives and the Senate Finance Committee approved two different versions of a bill that would have reauthorized and revised the Temporary Assistance for Needy Families (TANF) Block Grant. This legislation, H.R. 4, also included many changes to the Child Support Enforcement (CSE) program. H.R. 4 was passed by the House in February 2003. The Senate Finance Committee reported a substitute version of the bill in September 2003 (S.Rept. 108-162). On March 29-April 1, 2004, the Senate debated H.R. 4; disagreement arose regarding amendments to the bill, and Republicans failed to pass a motion to limit debate. H.R. 4 was not passed by the Senate. Although not identical, both versions of H.R. 4 were similar in focus, direction, and content with respect to the CSE provisions. Both versions of H.R. 4 included provisions that sought to improve the CSE program and raise collections so as to increase the economic independence of former welfare families and provide a stable source of income for all single-parent families with a noncustodial parent. Both versions of the bill provided incentives (in the form of federal cost sharing) to states to direct more of the child support collected on behalf of families to the families themselves, thereby reducing the amount that state and federal governments retain (often referred to as a family-first policy). Under both bills, families currently receiving TANF benefits as well as former TANF recipients would have potentially received a larger share of child support that was collected on their behalf. The approach used by the bills differed significantly, however, with regard to how states would help TANF families receive more child support. Under the House- passed bill, states would have been given federal cost sharing incentives to encourage states to increase (or establish) the amount of child support payments they pass through to TANF families (and disregard in determining TANF benefits). The Senate Finance Committee version of the bill provided federal cost-sharing for the entire amount that the state disregards and passes through to families. Moreover, the House-passed bill provided a more limited amount of federal cost sharing for state pass-through and disregard policies than the Senate Finance Committee bill. Both versions of the bill would have revised some CSE enforcement tools and added others; increased funding for the Federal Parent Locator Service (FPLS); increased funding for federal technical assistance to the states; required states to review child support orders of TANF families every three years; and required that a report be submitted to Congress on undistributed child support collections. The House-passed bill included a provision that would have established a $25 annual user fee for individuals who had never been on TANF but received CSE services and who received at least $500 in any given year. The Senate Finance Committee-approved bill included provisions that would have increased funding for the CSE access and visitation program; and required states to adopt a later version of the Uniform Interstate Family Support Act (UIFSA) so as to facilitate the collection of child support payments in interstate cases. This report will not be updated. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Overview of the Child Support Enforcement Program . . . . . . . . . . . . . . . . . . . . . 1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Enforcement Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 H.R. 4: Major Provisions Related to Child Support Enforcement . . . . . . . . . . . . . 3 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Assignment of Child Support Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Distribution of Child Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 TANF Families . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Former TANF Families . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Expansion of Collection/Enforcement Tools . . . . . . . . . . . . . . . . . . . . . . . . . 7 Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Detailed Comparison of CSE Provisions of the House and Senate Finance Committee Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Assignment of child support rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Federal matching funds for limited pass through of child support payments to families receiving TANF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 State option to pass through all child support payments to families that formerly received TANF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Mandatory review and adjustment of child support orders for families receiving TANF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Mandatory fee for successful child support collection for family that has never received TANF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Report on undistributed child support payments . . . . . . . . . . . . . . . . . . . . . . . . 12 Use of new hire information to assist in administration of unemployment compensation programs . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Decrease in amount of child support arrearage triggering passport denial . . . . . 13 Use of tax refund intercept program to collect past-due child support on behalf of children who are not minors . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Garnishment of compensation paid to veterans for service-connected disabilities in order to enforce child support obligations . . . . . . . . . . . . . . 14 Improving federal debt collection practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Maintenance of technical assistance funding . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Maintenance of Federal Parent Locator Service funding (FPLS) . . . . . . . . . . . . 16 Identification and seizure of assets held by multi-state financial institutions . . . 16 Information comparisons with insurance data . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Tribal access to the Federal Parent Locator Service . . . . . . . . . . . . . . . . . . . . . . 17 Reimbursement of Secretary's costs of information comparisons and disclosure for enforcement of obligations on higher education act loans and grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Technical amendment relating to cooperative agreements between states and Indian tribes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Claims upon longshore and harbor workers' compensation for child support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 State option to use statewide automated data processing and information retrieval system for interstate cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Interception of gambling winnings for child support . . . . . . . . . . . . . . . . . . . . . 20 State law requirement concerning the Uniform Interstate Family Support Act (UIFSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Grants to states for access and visitation programs . . . . . . . . . . . . . . . . . . . . . . 23 Timing of corrective action year for state noncompliance with CSE program requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 List of Tables Table 1. Comparison of Current Law with H.R. 4, "Personal Responsibility, Work, and Family Promotion Act of 2003" as Passed by the House and "Personal Responsibility and Individual Development for Everyone Act (PRIDE)" as Reported by the Senate Finance Committee: Child Support Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Child Support Enforcement: Side-by-Side Comparison of Current Law and Two Versions of H.R. 4 (108th Congress) Introduction During the 108th Congress, the House of Representatives and the Senate Finance Committee approved two different versions of a bill that would have reauthorized and revised the Temporary Assistance for Needy Families (TANF) Block Grant. This legislation, H.R. 4, also included many changes to the Child Support Enforcement (CSE) program, a component of the government's social safety net. In 1996, Congress passed significant changes to the CSE program as part of its reform of welfare. H.R. 4 was passed by the House in February 2003. The Senate Finance Committee reported a substitute version of the bill in September 2003 (S.Rept. 108- 162). On March 29-April 1, 2004, the Senate debated H.R. 4; disagreement arose regarding amendments to the bill, a motion to limit debate was overruled, and the Senate did not vote on passage of the bill. Overview of the Child Support Enforcement Program Background The CSE program, Part D of Title IV of the Social Security Act, was enacted in January 1975 (P.L. 93-647). The CSE program is administered by the Office of Child Support Enforcement (OCSE) in the Department of Health and Human Services (HHS), and funded by general revenues. All 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands operate CSE programs and are entitled to federal matching funds. The following families automatically qualify for CSE services (free of charge): families receiving (or who formerly received) Temporary Assistance to Needy Families (TANF) benefits (Title IV-A), foster care payments, or Medicaid coverage. Collections on behalf of families receiving TANF benefits are used to reimburse state and federal governments for TANF payments made to the family. Other families must apply for CSE services, and states must charge an application fee that cannot exceed $25. Child support collected on behalf of nonwelfare families goes to the family (usually through the state disbursement unit). Between FY1978 and FY2003, child support payments collected by CSE agencies increased from $1 billion in FY1978 to $21.2 billion in FY2003, and the number of children whose paternity was established (or acknowledged) increased by CRS-2 1,274%, from 111,000 to 1.525 million. However, the program still collects only 18% of child support obligations for which it has responsibility and collects payments for only 50% of its caseload. Moreover, OCSE data indicate that in FY2003, paternity had been established or acknowledged for about 77% of the nearly 10 million children on the CSE caseload without legally identified fathers. Total expenditures for the CSE program were $5.213 billion in FY2003; of this total, the federal share of state and local administrative costs of the program was $3.448 billion and the state share was $1.764 billion. The CSE program is estimated to handle at least 50% of all child support cases; the remaining cases are handled by private attorneys, collection agencies, or through mutual agreements between the parents. Services The CSE program provides seven major services on behalf of children: (1) parent location, (2) paternity establishment, (3) establishment of child support orders, (4) review and modification of support orders, (5) collection of support payments, (6) distribution of support payments, and (7) establishment and enforcement of medical support. Enforcement Techniques Collection methods used by CSE agencies include income withholding, intercept of federal and state income tax refunds, intercept of unemployment compensation, liens against property, security bonds, and reporting child support obligations to credit bureaus. All jurisdictions also have civil or criminal contempt- of-court procedures and criminal nonsupport laws. Building on legislation (P.L. 102- 521) enacted in 1992, P.L. 105-187, the Deadbeat Parents Punishment Act of 1998, established two new federal criminal offenses (subject to a two-year maximum prison term) with respect to noncustodial parents who repeatedly fail to financially support children who reside with custodial parents in another state or who flee across state lines to avoid supporting them. P.L. 104-193 required states to implement expedited procedures that allow them to secure assets to satisfy an arrearage by intercepting or seizing periodic or lump sum payments (such as unemployment and workers' compensation), lottery winnings, awards, judgements, or settlements, and assets of the debtor parent held by public or private retirement funds, and financial institutions. It required states to implement procedures under which the state would have authority to withhold, suspend, or restrict use of driver's licenses, professional and occupational licenses, and recreational and sporting licenses of persons who owe past-due support or who fail to comply with subpoenas or warrants relating to paternity or child support proceedings. It also required states to conduct quarterly data matches with financial institutions in the state in order to identify and seize the financial resources of debtor noncustodial parents. P.L. 104-193 authorized the Secretary of State to deny, revoke, or restrict passports of debtor parents. P.L. 104-193 also required states to enact and implement the Uniform Interstate Family Support Act (UIFSA), and expand full faith CRS-3 and credit procedures. P.L. 104-193 also clarified which court has jurisdiction in cases involving multiple child support orders. Financing The federal government currently reimburses each state 66% of the cost of administering its CSE program. It also refunds states 90% of the laboratory costs of establishing paternity. In addition, the federal government pays states an incentive payment to encourage them to operate effective programs. P.L. 104-193 required the HHS Secretary in consultation with the state CSE directors to develop a new cost- neutral system of incentive payments to states. P.L. 105-200, the Child Support Performance and Incentive Act of 1998, established a new cost-neutral incentive payment system.1 The statutory limit of CSE incentive payments for FY2004 is $454 million. H.R. 4: Major Provisions Related to Child Support Enforcement Background Over the years, the CSE program has evolved into a multifaceted program. While cost-recovery still remains an important function of the program, other aspects of the program include service delivery and promotion of self-sufficiency and parental responsibility, even when one of the parents is no longer living in the home. The CSE program has helped strengthen families by securing financial support for children from their noncustodial parent on a consistent and continuing basis and by helping some families to remain self-sufficient and off public assistance by providing the requisite CSE services. Child support payments now are generally recognized as a very important income source for single-parent families. On average, child support constitutes 17% of family income for households that receive it (2001 data). Among poor families who receive it, child support constitutes about 30% of family income (2001 data).2 Both versions of H.R. 4 sought to improve the CSE program and raise collections so as to increase the economic independence of former welfare families and provide a stable source of income for all single-parent families with a noncustodial parent. Although both versions of the bill shared identical objectives with respect to simplifying CSE assignment and distribution rules and strengthening the "family-first" policies started in the 1996 welfare reform law, the approaches used differed. Both versions of the bill revised some CSE enforcement tools and 1 Before FY2002 child support incentive payments were paid out of the federal share of child support collections made on behalf of TANF families. As of Oct. 1, 2001, child support incentive payments are paid with appropriated funds. 2 Elaine Sorensen, Child Support Gains Some Ground, Urban Institute, Snapshots of America's Families III, no. 11, Oct. 2003. CRS-4 added others. The Senate-approved version of H.R. 4 included a larger list of CSE provisions than did the House-passed bill. This section of the report does not discuss all of the CSE provisions included in H.R. 4. For a description of all of the CSE provisions in H.R. 4, as passed by the House and approved by the Senate Finance Committee, see Table 1 in the last section of this report, which provides a side-by-side bill comparison. Assignment of Child Support Rights As a condition of receiving TANF benefits, a family must assign their child support rights to the state. Assignment rules determine who has legal claim on the child support payments owed by the noncustodial parent. The child support assignment covers any child support that accrues while the family receives TANF benefits as well as any child support that accrued before the family started receiving TANF benefits. Assigned child support collections are not paid to families, but rather this revenue is kept by states and the federal government as partial reimbursement for welfare benefits. Nonwelfare families who apply for CSE services do not assign their child support rights to the state and thereby receive all of the child support collected on their behalf. An extremely important feature of the assignment process is the date on which an assignment was entered. If the assignment was entered on or before September 30, 1997, then pre-assistance and during-assistance arrearages are "permanently assigned" to the state. If the assignment was entered on or after October 1, 1997, then only the arrearages which accumulate while the family receives assistance are "permanently assigned." The family's pre-assistance arrearages are "temporarily assigned" and the right to those arrearages goes back to the family when it leaves TANF (unless the arrearages are collected through the federal income tax refund offset program). H.R. 4 as passed by the House did not make any changes regarding the child support assignment rules. In contrast, under H.R. 4 as approved by the Senate Finance Committee, the child support assignment would have only covered any child support that accrued while the family received TANF benefits. This meant that any child support arrearages that accrued before the family started receiving TANF benefits would not have to be assigned to the state (even temporarily) and thereby any child support collected on behalf of the former-TANF family for pre-assistance arrearages would have gone to the family. Distribution of Child Support Distribution rules determine the order in which child support collections are paid in accordance with the assignment rules. In other words, the distribution rules determine which claim is paid first when a child support collection occurs. The order of payment of the child support collection is of tremendous importance because in many cases past-due child support, i.e., arrearages, are never fully paid. CRS-5 TANF Families. While the family receives TANF benefits, the state is permitted to retain any current support and any assigned arrearages it collects up to the cumulative amount of TANF benefits which has been paid to the family. The 1996 welfare law (P.L. 104-193) repealed the $50 required pass through3 and gave states the choice to decide how much, if any, of the state share (some, all, none) of child support payments collected on behalf of TANF families to send the family. States also decide whether to treat child support payments as income to the family. While states have discretion over their share of child support collections, P.L. 104- 193 required states to pay the federal government the federal government's share of child support collections collected on behalf of TANF families. This means that the state, and not the federal government, bears the entire cost of any child support passed through to (and disregarded by) families. As of August 2004, 21 states were continuing the $50 (or higher in several states) pass-through and disregard policy that had been in effect pre-1996.4 Both versions of H.R. 4 would have provided incentives (in the form of federal cost sharing) to states to direct more of the child support collected on behalf of TANF families to the families themselves, as opposed to using such collections to reimburse state and federal coffers for welfare benefits paid to the families (often referred to as a "family-first" policy). However the approaches of the bills differed with respect to the limitation on the federal cost-sharing and whether to help states pay for the current cost of their CSE pass-through and disregard policies or to encourage states to establish such policies or increase the pass-through and disregard already in place. H.R. 4 as passed by the House would have allowed states to increase the amount of collected child support they pay to families receiving TANF benefits and would not have required the state to pay the federal government the federal share of the increased payments. The subsidized child support pass-through payments would have been the amount above any payments the state was making on December 31, 2001. In other words, the House-passed bill intended to increase the amount of child support that was passed through to TANF families (and disregarded) by the state. The House-passed bill would have limited the new payments to the greater of $100 per month or $50 per month more than the state previously was sharing with the family. In order for the federal government to share in the cost of an increase in the child support pass-through, the state would have been required to disregard (i.e., not count) the child support collection paid to the family in determining the family's TANF benefit. 3 Under old law, the first $50 of current monthly child support payments collected on behalf of an AFDC family was given to the family and disregarded as income to the family so that it did not affect the family's AFDC eligibility or benefit status. 4 The 17 states with the $50 pass-through and disregard policy are AK, CA, CT, DE, IL, KY, ME, MA, MI, NJ, NM, NY, PA, RI, TX, VT, and VA. Three states, GA, SC, and TN, pass though and disregard some or all child support for purposes of their "fill-the-gap budgeting" policies. Wisconsin passes through and disregards all child support payments. West Virginia passes through and disregards up to $25 per month. CRS-6 Unlike the House-passed bill, under the bill approved by the Senate Finance Committee the federal government would have shared in the costs of the entire amount of current pass-through and disregard policies used by states. H.R. 4 as approved by the Senate Finance Committee would have allowed states to pay up to $400 per month in child support collected on behalf of a TANF (or foster care) family ($600 per month to a family with two or more children) to the family and would not have required the state to pay the federal government the federal share of those payments. In order for the federal government to share in the cost of the child support pass-through, the state would have been required to disregard (i.e., not count) the child support collection paid to the family in determining the family's TANF benefit. Former TANF Families. Pursuant to the 1996 welfare reform law (P.L. 104- 193), beginning on October 1, 2000, states must distribute to former TANF families the following child support collections first before the state and the federal government are reimbursed (this is often referred to as the "family-first" policy): (1) all current child support, (2) any child support arrearages that accrue after the family leaves TANF (these arrearages are called never-assigned arrearages), plus (3) any arrearages that accrued before the family began receiving TANF benefits.5 (Any child support arrearages that accrue during the time the family is on TANF belong to the state and federal government.) One of the goals of the 1996 welfare reform law with regard to CSE distribution provisions was to create a distribution priority that favored families once they leave the TANF rolls. Thus, generally speaking, under current law, child support that accrues before and after a family receives TANF goes to the family, whereas child support that accrues while the family is receiving TANF goes to the state. This additional family income is expected to reduce dependence on public assistance by both promoting exit from TANF and preventing entry and re-entry to TANF. H.R. 4 as passed by the House would have given states the option of distributing to former TANF families the full amount of child support collected on their behalf (i.e., both current support and all child support arrearages -- including arrearages collected through the federal income tax refund offset program). Under the House- passed bill, the federal government would have shared with the states the costs of paying child support arrearages accrued while the family received TANF as well as costs associated with passing through to the family child support collected through the federal income tax refund offset program, if the state chose the "family-first" option. Similarly, H.R. 4 as approved by the Senate Finance Committee also would have given states the option of distributing to former TANF families the full amount of child support collected on their behalf. Further, the Senate Finance Committee version of the bill would have simplified the CSE distribution process and eliminated 5 As mentioned above, these rules do not apply to child support collections obtained by intercepting federal income tax refunds. If child support arrearages are collected via the federal income tax refund offset program, the law stipulates that the state and federal government are to retain those collections. CRS-7 the special treatment of child support arrearages collected through the federal income tax refund offset program. Like the House-passed bill, the federal government would have shared with the states the costs of paying child support arrearages to the family first. Expansion of Collection/Enforcement Tools Both versions of H.R. 4 included identical or similar provisions with respect to (1) allowing states to access information in the national new hires database to help detect fraud in the unemployment compensation program; (2) lowering the threshold amount for denial of a passport to a noncustodial parent who owes past-due child support; (3) facilitating the collection of child support from Social Security benefits; (4) easing the collection of child support from veterans' benefits; and (5) allowing states to use the federal income tax refund offset program to collect past-due child support for persons not on TANF who are no longer minors. Additional provisions that would have expanded and/or enhanced the ability of states to collect child support payments were contained in the Senate Finance Committee-approved version of H.R. 4. They included (1) authorizing the HHS Secretary to act on behalf of states to seize financial assets (held by a multi-state financial institution) of noncustodial parents who owe child support; (2) authorizing the HHS Secretary to compare information of noncustodial parents who owe past-due child support with information maintained by insurers concerning insurance payments and to furnish any information resulting from a match to CSE agencies so they can pursue child support arrearages; and (3) authorizing the HHS Secretary to compare information obtained from gambling establishments with information on noncustodial parents who owe past-due child support and direct the gambling establishment to withhold from the customer's net winnings any child support that is owed. Other Provisions Both versions of the bill included provisions that would have (1) required states to review and if appropriate adjust child support orders of TANF families every three years; (2) required the HHS Secretary to submit a report to Congress on the procedures states use to locate custodial parents for whom child support has been collected but not yet distributed; (3) established a minimum funding level for technical assistance; and (4) established a minimum funding level for the Federal Parent Locator Service. The House-passed version of H.R. 4 included a provision that would have established a $25 annual fee for individuals who had never been on TANF but received CSE services and who received at least $500 in any given year. The Senate Finance Committee-approved version of H.R. 4 included provisions that would have (1) increased funding for the CSE access and visitation program; (2) designated Indian tribes and tribal organizations as persons authorized to have access to information in the Federal Parent Locator Service; and (3) required states to adopt CRS-8 a later version of the Uniform Interstate Family Support Act (UIFSA) so as to facilitate the collection of child support payments in interstate cases. Detailed Comparison of CSE Provisions of the House and Senate Finance Committee Bills Table 1 provides a detailed and comprehensive comparison of the CSE provisions of the House-passed and Senate Finance Committee reported versions of H.R. 4 (the welfare reauthorization bill) with current law. The table specifies the section number in each of the bills in which the provision is found. As noted earlier, H.R. 4 passed the House but not the Senate during the 108th Congress. There is some concern that the widely favored CSE provisions that were in H.R. 4 were not debated as a separate stand-alone bill. Nevertheless, it seems likely that the 109th Congress will consider the substantive and numerous CSE changes that were included in H.R. 4 as part of any new TANF reauthorization bill. CRS-9 Table 1. Comparison of Current Law with H.R. 4, "Personal Responsibility, Work, and Family Promotion Act of 2003" as Passed by the House and "Personal Responsibility and Individual Development for Everyone Act (PRIDE)" as Reported by the Senate Finance Committee: Child Support Provisions Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) Assignment of child In order to receive benefits TANF recipients No provision. The Committee bill stipulated that the assignment support rights must assign their child support rights to the covers only child support that accrues during the state. The assignment covers any child support period that the family receives TANF. (In other that accrues while the family receives TANF words, pre-assistance arrearages would be and any support that accrued before the family eliminated). [Section 301(a)] began receiving TANF. Any assignment of rights to child support that In addition, the Committee bill would have given was in effect on September 30, 1997 must states the option to discontinue pre-assistance remain in effect. This means that any child assignments in effect on September 30, 1997. If a support collected as a result of the assignment state chose to discontinue the child support is owed to the state and the federal assignment, the state would have given up its legal government. claim to collections based on such arrearages and the state would have distributed the collections to the family. States also would have been given the option to discontinue pre-assistance arrearage assignments in effect after September 30, 1997 and before the implementation date of this provision. If a state chose to discontinue the child support assignment, the state would have given up its legal claim to collections based on such arrearages and the state would distribute the collections to the family. [Section 301(c)] CRS-10 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) Federal matching While the family receives TANF benefits, the Same as current law. Same as current law. funds for limited state is permitted to retain any current child pass through of support payments and any assigned arrearages child support it collects up to the cumulative amount of payments to TANF benefits which has been paid to the families receiving family. In other words, the state can decide TANF how much, if any, of the state share (some, all, none) of the child support payment collected on behalf of TANF families to send to the family. The state is required to pay the federal For TANF families, the House-passed bill required For families who received assistance from the state government the federal share of the child the federal government to waive its share of an (which could include TANF or foster care) the support collected. increase in the child support pass- through (up to Committee bill would have required the federal the greater of $100 per month or $50 over the state's government to waive its share of child support Child support payments collected on behalf of stipulated child support pass- through as of collections passed through to TANF families by the TANF families that are passed through to the December 31, 2001) for families that receive TANF state and disregarded by the state -- up to an family and disregarded by the state count benefits. To obtain the federal matching funds, the amount equal to $400 per month in the case of a toward the TANF MOE (Maintenance-of- state would have had to disregard the amount passed family with one child, and up to $600 per month in Effort) expenditure requirement. through in determining the TANF benefit amount. the case of a family with two or more children. This provision would have applied to amounts Like current law, disregarded pass-through distributed on or after October 1, 2005. [Section amounts would have counted as TANF MOE 301] expenditures. [Section 301(b)] The Committee bill included a provision that allowed states with Section 1115 demonstration waivers (on or before October 1, 1997) related to the child support pass-through provisions to continue to pass through payments to families in accordance with the terms of the waiver. [Section 301(b)] CRS-11 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) State option to pass Current child support payments must be paid The House-passed bill would have given states the The Committee bill would have simplified child through all child to the family if the family is no longer on option of providing families that have left TANF the support distribution rules. It eliminated the special support payments TANF. full amount of the child support collected on their treatment of child support arrearages collected to families that behalf (i.e., both current child support and child through the federal income tax refund offset formerly received With respect to former TANF families: support arrearages). The federal government would program. Therefore, all child support collections TANF Since October 1, 1997, child support have had to share with the states the costs of paying to former TANF families would have gone the arrearages that accrue after the family leaves child support arrearages to the family first. This family first. [Section 301(b)] TANF also are required to be paid to the provision would have applied to amounts distributed family before any monies may be retained by on or after October 1, 2005. [Section 302] To the extent that the arrearage amount payable to the state. a former TANF family in any given month under the Committee bill exceeded the amount that With respect to former TANF families: Since would have been payable to the family under October 1, 2000, child support arrearages that current law, the state would have been able to accrued before the family began receiving elect to have the amount paid to the family TANF also are required to be distributed to the considered an expenditure for Maintenance-of- family first. Effort (MOE) purposes. In addition, the Committee bill amended the CSE State Plan to However, if child support arrearages are include an election by the state to include whether collected through the federal income tax refund it was using the new option to pass through all offset program, the family does not have first arrearage payments to former TANF families claim on the arrearage payments. Such without paying the federal government its share of arrearage payments are retained by the state such collections or whether it had chosen to and the federal government. maintain the current law distribution method. Further, the Committee bill stipulated that no later than six months after the date of enactment of this legislation, the Department Health and Human Services (HHS) Secretary, in consultation with the states, would have been required to establish the procedures to be used to make estimates of excess costs associated with the new funding option. [Section 301(b)] The provisions of Section 301 of this bill would have taken effect October 1, 2007, or earlier at state option (as long as the date was after enactment of this bill). [Section 301(e)] CRS-12 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) Mandatory review Federal law requires that the state have Required states to review and, if appropriate, adjust Same as House-passed bill. [Section 302] and adjustment of procedures under which every three years the child support orders in TANF cases every three child support state review and adjust (if appropriate) child years. This provision would have taken effect on orders for families support orders at the request of either parent, October 1, 2005. [Section 303] receiving TANF and that in the case of TANF families, the state review and update (if appropriate) child support orders at the request of the state CSE agency or of either parent. Mandatory fee for Federal law requires that non-welfare families Required families that had never been on TANF to No provision. successful child must apply for CSE services, and states must pay a $25 annual user fee when child support support collection charge an application fee that cannot exceed enforcement efforts on their behalf were successful for family that has $25. The state may charge the application fee (i.e., at least $500 annually is collected on their never received against the custodial parent, pay the fee out of behalf). Such fees could have been recovered from TANF state funds, or recover it from the noncustodial the custodial parent, the noncustodial parent, or the parent. In addition, states have the option of state (with state funds). This provision would have recovering costs in excess of the application taken effect on October 1, 2004. [Section 304] fee. Such recovery may be from either the custodial parent or the noncustodial parent. Report on No provision. Required that within six months of enactment, the Same as House-passed bill. [Section 303] undistributed child HHS Secretary would have to submit to the House support payments Ways and Means Committee and the Senate Finance Committee a report on the procedures states use to locate custodial parents for whom child support has been collected but not yet distributed. The report would have been required to include an estimate of the total amount of undistributed child support and the average length of time it takes undistributed child support to be distributed. To the extent the Secretary deemed appropriate, the report would have been required to include recommendations as to whether additional procedures should be established at the state or federal level to expedite the payment of undistributed child support. [Section 305] CRS-13 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) Use of new hire Federal law requires all employers in the Authorized State Employment Security Agencies Same as House-passed bill. [Section 304] information to nation to report basic information on every (which are responsible for administering the assist in newly-hired employee to the state. States are Unemployment Compensation program) to request administration of then required to collect all this information in and receive information from the National Directory unemployment the State Directory of New Hires, to use this of New Hires (which includes information from all compensation information to locate noncustodial parents who of the state directories as well as federal employers) programs owe child support and to send a wage via the HHS Secretary in order to help detect fraud withholding order to their employer, and to in the unemployment compensation system. This (within three business days) report all provision would have taken effect on October 1, information in their State Directory of New 2004. [Section 306] Hires to the National Directory of New Hires. Information in the State Directory of New Hires is used by State Employment Security Agencies (the agency that operates the State Unemployment Compensation program) to match against unemployment compensation records to determine whether people drawing unemployment compensation benefits are actually working. (Note that states currently have access to the new hire information only in their own state. Without access to data in the national directory, a state would not receive data regarding recent hires by federal agencies or national corporations that report in another state.) Decrease in amount Federal law stipulates that the HHS Secretary Authorized the denial, revocation, or restriction of Same as House-passed bill. [Section 305] of child support is required to submit to the Secretary of State passports to noncustodial parents whose child arrearage the names of noncustodial parents who have support arrearages exceed $2,500, rather than triggering passport been certified by the state CSE agency as $5,000 as under current law. This provision would denial owing more than $5,000 in past-due child have taken effect on October 1, 2004. [Section 307] support. The Secretary of State has authority to deny, revoke, restrict, or limit passports to noncustodial parents whose child support arrearages exceed $5,000. CRS-14 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) Use of tax refund Federal law prohibits the use of the federal Permitted the federal income tax refund offset Same as House-passed bill. [Section 306] intercept program income tax offset program to recover past-due program to be used to collect arrearages on behalf of to collect past-due child support on behalf of non-welfare cases in non-welfare children who were no longer minors. child support on which the child is not a minor, unless the child This provision would have taken effect on October behalf of children was determined disabled while he or she was a 1, 2005. [Section 308] who are not minors minor and for whom the child support order is still in effect. (Since enactment in 1981 (P.L. 97-35), the federal income tax offset program has been used to collect child support arrearages on behalf of welfare families regardless of whether the children were still minors -- as long as the child support order was in effect.) Garnishment of The disability compensation benefits of Allowed veterans' disability compensation benefits The Committee bill allowed veterans' disability compensation paid veterans are treated differently than most forms to be intercepted (withheld) and paid on a routine compensation benefits to be intercepted (withheld) to veterans for of government payment for purposes of paying basis to the custodial parent if the veteran was 60 and paid on a routine basis to the custodial parent. service-connected child support. Whereas most government days or more in arrears on child support payments. This provision would have prohibited the disabilities in order payments are subject to being automatically Under the House-passed bill, this provision would garnishment of any veteran's disability to enforce child withheld to pay child support, veterans have been prohibited from being used to collect compensation in order to collect alimony, unless support obligations disability compensation is not subject to alimony and no more than 50% of any particular that disability compensation was being paid intercept. Before enactment of P.L. 108-136, disability payment would have been able to be because retirement benefits were being waived. there was one exception to this rule. The withheld. This provision would have taken effect The provision would have taken effect on October exception occurred when veterans had elected on October 1, 2005. [Section 309] 1, 2005. [Section 307] to forego some of their retirement pay in order to collect additional disability payments. The advantage of veterans replacing retirement pay with disability pay is that the disability pay is not subject to taxation. With this exception, the only way to obtain child support payments from veterans' disability compensation was to request that the Secretary of the Veterans Administration intercept the disability compensation and make the child support payments. P.L. 108-136, enacted November 24, 2003, permits veterans to receive both CRS-15 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) military retired pay and veterans' disability compensation. Improving federal Federal law stipulates that any federal agency Expanded the federal administrative offset program Similar to House-passed bill, but only allowed debt collection that is owed a nontax debt (that is more than by allowing Social Security benefits, certain Black Social Security benefits to be offset to collect past- practices 180 days past-due) must notify the Secretary of Lung benefits, and certain Railroad Retirement due child support. [Section 308] the Treasury to obtain an administrative offset Board benefits to be offset to collect past-due child of the debt. The Department of the Treasury support (on behalf of families receiving CSE [Title (or other designated federal disbursing agency) IV-D of the Social Security Act] services) in has the authority to offset Social Security appropriate cases selected by the states. This benefits, certain Black Lung Board benefits, provision would have taken effect on October 1, and certain Railroad Retirement benefits to 2004. [Section 310] collect delinquent debt owed to the United States, subject to an annual $9,000 ($750 per month) exemption. Currently, states have the authority to garnish Social Security benefits for child support payments. But, Social Security payments can only be offset for federal debt recovery. (Thus, under current law child support arrearage payments which are enforced by states cannot be offset from Social Security benefits/payments.) Maintenance of Federal law appropriates an amount equal to Changed the amount available for technical Same as House-passed bill. [Section 309] technical assistance 1% of the federal share of child support assistance funding to an amount equal to 1% of the funding collected on behalf of TANF families the federal share of child support collected or the preceding year for the Secretary to provide to amount appropriated for FY2002, whichever was the states for: information dissemination and greater. [Section 311] technical assistance, training of state and federal staff, staffing studies, and related activities needed to improve CSE programs (including technical assistance concerning state automated CSE systems), and research demonstration and special projects of regional CRS-16 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) or national significance relating to the operation of CSE programs. Such funds are available until they are expended. Maintenance of Federal law appropriates an amount equal to Changed the amount available for the FPLS to an Same as House-passed bill. [Section 310] Federal Parent 2% of the federal share of child support amount equal to 2% of the federal share of child Locator Service collected on behalf of TANF families the support collected or the amount appropriated for funding (FPLS) preceding year for the Secretary to use for FY2002, whichever was greater. Made all funds operation of the FPLS to the extent that the appropriated for this purpose available until costs of the FPLS are not recovered by user expended. [Section 312] fees. Funds that were appropriated for FY1997-FY2001 remain available until expended. Identification and The 1996 welfare reform law required states to No provision. The Committee bill authorized the HHS Secretary, seizure of assets enter into agreements with financial via the FPLS, to assist states to perform data held by multi-state institutions conducting business within their matches comparing information from states and financial state for the purpose of conducting a quarterly participating multi-state financial institutions with institutions data match. The data match is intended to respect to persons owing past-due child support. identify financial accounts (in banks, credit The Committee bill would have authorized the unions, money-market mutual funds, etc.) Secretary via the FPLS to seize assets, held by such belonging to parents who are delinquent in the financial institutions, of noncustodial parents who payment of their child support obligation. In owe child support arrearage payments, by issuing some cases, state law prohibits the placement a notice of a lien or levy and requiring the financial of liens or levies on accounts outside of the institution to freeze and seize assets in accounts in state and some financial institutions only multi-state financial institutions to satisfy child accept liens and levies from the state where the support obligations. The Secretary would have account is located. In 1998, Congress made it been required to transmit any assets seized under easier for multi-state financial institutions to the procedure to the state for accounting and match records by permitting the FPLS to help distribution. The Committee bill stipulated that the them coordinate their information. Secretary must inform affected account holders/ asset holders of their due process rights. (In effect, the Committee bill would have resolved problems of jurisdiction in cases where a state was pursuing an asset in a different state). [Section 311] CRS-17 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) Information No provision. No provision. The Committee bill authorized the HHS Secretary, comparisons with via the FPLS, to compare information of insurance data noncustodial parents who owe past-due child support with information maintained by insurers (or their agents) concerning insurance claims, settlements, awards, and payments; and to furnish any information resulting from a match to the appropriate state CSE agency in order to secure settlements, awards, etc. for payment of past-due child support. The Committee bill stipulated that no insurer would be liable under federal or state law for disclosures made in good faith of this provision. [Section 312] Tribal access to the The FPLS is a national location system No provision. The Committee bill included Indian tribes and Federal Parent operated by the federal Office of Child Support tribal organizations that operate a CSE program as Locator Service Enforcement to assist states in locating "authorized persons." [Section 313] noncustodial parents, putative fathers, and custodial parties for the establishment of paternity and child support obligations, as well as the enforcement and modification of orders for child support, custody and visitation. It also identifies support orders or support cases involving the same parties in different states. The FPLS consists of the Federal Case Registry, Federal Offset Program, Multi-state Financial Institution Data Match, National Directory of New Hires, and the Passport Denial Program. Additionally, the FPLS has access to external sources such as the Internal Revenue Service (IRS), the Social Security Administration (SSA), Department of Veterans Affairs (VA), the Department of Defense (DOD), and the Federal Bureau of Investigation (FBI). The FPLS is only allowed to transmit information in its databases to CRS-18 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) "authorized persons," which include (1) child support enforcement agencies (and their attorneys and agents); (2) courts, (3) the resident parent, legal guardian, attorney, or agent of a child owed child support; and (4) foster care and adoption agencies. Reimbursement of Federal law (P.L. 106-113) authorized the No provision. The Committee bill would have amended the Secretary's costs of Department of Education to have access to the reimbursement of costs provision by eliminating information National Directory of New Hires. The the word additional. Thus, the Secretary of comparisons and provisions were designed to improve the Education would have been required to reimburse disclosure for ability of the Department of Education to the HHS Secretary for any costs incurred by the enforcement of collect on defaulted loans and grant HHS Secretary in providing requested new hires obligations on overpayments made to individuals under Title information. [Section 314] higher education IV of the Higher Education Act of 1965. The act loans and Federal Office of Child Support Enforcement grants (OCSE) and the Department of Education negotiated and implemented a Computer Matching Agreement in December 2000. Under the agreement, the Secretary of Education is required to reimburse the HHS Secretary for the additional costs incurred by the HHS Secretary in furnishing requested information. Technical Federal law requires that any state that has a No provision. The Committee bill would have deleted the amendment child welfare program and that has Indian reference to child welfare programs. [Section 315] relating to country may enter into a cooperative cooperative agreement with an Indian tribe or tribal agreements organization if the tribe demonstrates that it between states and has an established tribal court system with Indian tribes several specific characteristics related to paternity establishment and the establishment and enforcement of child support obligations. The HHS Secretary may make direct payments to Indian tribes and tribal organizations that CRS-19 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) have approved child support enforcement plans. Claims upon The Longshore and Harbor Worker's No provision. The Committee bill would have amended the longshore and Compensation Act is the federal worker's Longshore and Harbor Workers' Compensation harbor workers' compensation law for maritime workers and Act to ensure that longshore or harbor workers compensation for persons working in shipyards and on docks, benefits that were provided by the federal child support ships, and offshore drilling platforms. The Act government or by private insurers were subject to exempts benefits paid by longshore or harbor garnishment for purposes of paying child support employers or their insurers from all claims of obligations. [Section 316] creditors. Thus, Longshore and Harbor Worker's Compensation Act benefits that are paid by longshore or harbor employers or their insurers are not subject to attachment for payment of child support obligations. State option to use The 1996 welfare reform law mandated states No provision. The Committee bill would have allowed an statewide to establish procedures under which the state assisting state to establish a child support interstate automated data would use high-volume automated case based on another state's request for assistance; processing and administrative enforcement, to the same extent and thereby an assisting state would have been able information as used for intrastate cases, in response to a to use the CSE statewide automated data retrieval system for request from another state to enforce a child processing and information retrieval system for interstate cases support order. This provision was designed to interstate cases. [Section 317] enable child support agencies to quickly locate and secure assets held by delinquent noncustodial parents in another state without opening a full-blown interstate child support enforcement case in the other state. The assisting state must use automatic data processing to search various state data bases including financial institutions, license records, employment service data, and state new hire registries, to determine whether information is available regarding a parent who owes a child support obligation, the assisting state is then required to seize any identified assets. This CRS-20 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) provision does not allow states to open/establish a child support interstate case. Interception of Federal law requires states to establish No provision. The Committee bill would have authorized the gambling winnings expedited processes within the state judicial HHS Secretary via the FPLS to intercept gambling for child support system or under administrative processes for winnings of noncustodial parents who owed past- obtaining and enforcing child support orders due child support and transmit those winnings to and determining paternity. These expedited the appropriate state CSE agency for distribution. procedures include giving states authority to The Committee bill defined gambling winnings as secure assets to satisfy payment of past-due the proceeds of a wager that are subject to federal support by seizing or attaching lump-sum tax (e.g., winnings from casinos, horse racing, dog payments from unemployment compensation, racing, jai alai, sweepstakes, parimutuel pools, workers' compensation, judgments, lotteries, etc.). The Secretary would have had to settlements, lotteries, assets held in financial compare information obtained from gambling institutions, and public and private retirement establishments with information on persons who funds. owe past-due support and direct the gambling establishment to withhold from the person's net winnings (i.e., the amount left after withholding amounts for federal taxes) all amounts not exceeding the total amount owed in past-due child support. In addition to the child support arrearage, a processing fee (not to exceed 2% of the child support arrearage amount withheld) would be deducted from the non-custodial parent's winnings. These procedures would have only affected persons who had won enough so that an IRS Form W2-G was required to be issued to report their winnings to the IRS and who owed a child support arrearage payment. The Committee bill stipulated that gambling establishments were prohibited from paying certain individuals any gambling winnings until the gambling establishment has furnished the HHS Secretary certain information so that a data match could be performed to determine if the individuals CRS-21 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) owed past-due child support. If a data match occurred, the gambling establishment was to withhold specified winnings and transfer them to the HHS Secretary at the same time and in the same manner as amounts withheld for federal income tax purposes would have been transferred to the IRS. The Committee bill required the Secretary to promptly transfer gambling winnings to the appropriate state CSE agency. The Committee bill required gambling establishments to provide written notice to the gambler regarding the amount of the withholding, the reason and authority for the withholding, and an explanation of the individual's due process rights, including how the individual could appeal the withholding or the amount of the withholding to the state CSE agency. The Committee bill included non-liability protections for gambling establishments who comply with the provisions related to the withholding of gambling winnings for child support purposes. Gambling establishments that failed to comply with the aforementioned requirements would have been liable for the amount that should have been withheld by the establishment. Indian tribes and tribal organizations would have been required to agree to comply with the aforementioned requirements in order to receive direct child support enforcement funding. [Section 318] CRS-22 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) State law The 1996 welfare reform law (P.L. 104-193) No provision. The Committee bill would have required that each requirement required that on and after January 1, 1998, state's Uniform Interstate Family Support Act concerning the each state must have in effect the Uniform (UIFSA) include any amendments officially Uniform Interstate Interstate Family Support Act (UIFSA), as adopted as of August 2001 by the National Family Support Act approved by the American Bar Association on Conference of Commissioners on Uniform State (UIFSA) February 9, 1993, and as in effect on August Laws. 22, 1996, including any amendments officially adopted as of such date by the National In addition, the Committee bill clarified current Conference of Commissioners on Uniform law by stipulating that a court of a state that has State Laws. established a child support order has continuing, exclusive jurisdiction to modify its order if the Federal law requires states to treat past-due order is the controlling order and the state is the child support obligations as final judgments child's state or the residence of any individual that are entitled to full faith and credit in every contestant; or if the state is not the residence of the state. This means that a person who has a child or an individual contestant, the contestant's child support order in one state does not have consent in a record or in open court that the court to obtain a second order in another state to may continue to exercise jurisdiction to modify its obtain child support due should the order. It also modifies the current rules regarding noncustodial parent move from the issuing the enforcement of modified orders. [Section 319] court's jurisdiction. P.L. 103-383 restricts a state court's ability to modify a child support order issued by another state unless the child and the custodial parent have moved to the state where the modification is sought or have agreed to the modification. The 1996 welfare reform law (P.L. 104-193) clarified the definition of a child's home state, makes several revisions to ensure that the full faith and credit laws can be applied consistently with UIFSA, and clarifies the rules regarding which child support orders states must honor when there is more than one order. CRS-23 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) Grants to states for The 1996 welfare reform law (P.L. 104-193) No provision. The Committee bill would have increased funding access and authorized grants to states (via CSE funding) for Access and Visitation grants from $10 million visitation programs to establish and operate access and visitation annually to $12 million in FY2004, $14 million in programs. The purpose of the grants is to FY2005, $16 million in FY2006, and $20 million facilitate noncustodial parents' access to and annually in FY2007 and each succeeding fiscal visitation of their children. An annual year. The Committee bill would have extended the entitlement of $10 million from the federal Access and Visitation program to Indian tribes and CSE budget account is available to states for tribal organizations that had received direct child these grants. Eligible activities include but are support enforcement payments from the federal not limited to mediation, counseling, government for at least one year. The Committee education, development of parenting plans, bill included a specified amount to be set aside for visitation enforcement, and development of Indian tribes and tribal organizations: $250,000 for guidelines for visitation and alternative FY2004; $600,000 for FY2005; $800,000 for custody arrangements. The allotment formula FY2006; and $1.670 million for FY2007 or any is based on the ratio of the number of children succeeding fiscal year. in the state living with only one biological parent in relation to the total number of such The Committee bill would have increased the children in all states. The amount of the minimum allotment to states from $100,000 in allotment available to a state will be this same fiscal years 1999-2003 to $120,000 in FY2004, ratio to $10 million. The allotments are to be $140,000 in FY2005, $160,000 in FY2006, and adjusted to ensure that there is a minimum $180,000 in FY2007 or any succeeding fiscal year. allotment amount of $50,000 per state for The minimum allotment for Indian tribes and tribal FY1997 and FY1998, and a minimum of organizations would have been $10,000 for a fiscal $100,000 for any year after FY1998. States year. The tribal allotment would not have been may use the grants to create their own able to exceed the minimum state allotment for any programs or to fund programs operated by given fiscal year. courts, local public agencies, or nonprofit organizations. The programs do not need to be The allotment formula for Indian tribes and tribal statewide. States must monitor, evaluate, and organizations that operate child support report on their programs in accord with enforcement programs would have been based on regulations issued by the HHS Secretary. the ratio of the number of children in the tribe or tribal organization living with only one parent in relation to the total number of children living with only one parent in all Indian tribes or tribal organizations. The amount of the allotment available to an Indian tribe or tribal organization CRS-24 Current law H.R. 4 (House-passed) H.R. 4 (Senate Finance Committee) would have been this same ratio to the maximum allotment for Indian tribes and tribal organizations (i.e., $250,000 for FY2004; $600,000 for FY2005; $800,000 for FY2006; and $1.670 million for FY2007 or any succeeding fiscal year). (Pro rata reductions would have been made if they were necessary.) [Section 320] Timing of Federal law requires that audits be conducted No provision. The Committee bill would have changed the timing corrective action at least every three years to determine whether of the corrective action year for states that are year for state the standards and requirements prescribed by found to be in noncompliance of child support noncompliance law and regulations have been met by the enforcement program requirements. The with CSE program child support program of every state. If a state Committee bill would have changed the corrective requirements fails the audit, federal TANF funds must be action year to the fiscal year following the fiscal reduced by an amount equal to at least one but year in which the Secretary made a finding of not more than 2% for the first failure to noncompliance and recommended a corrective comply, at least 2% but not more than 3% for action plan. This change would have been made the second failure, and at least 3% but not retroactively in order to allow the Secretary to treat more than 5% for the third and subsequent all findings of noncompliance consistently. The failures. provision would have taken effect with respect to determinations of state compliance for FY2002 and The HHS Secretary also must review state succeeding fiscal years. [Section 321] reports on compliance with federal requirements and provide states with recommendations for corrective action. The purpose of the audits is to assess the completeness, reliability, and security of data reported for use in calculating the performance indicators and to assess the adequacy of financial management of the state program. Federal law calls for penalties to be imposed against states that fail to comply with a corrective action plan in the succeeding fiscal year. Source: Congressional Research Service. ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-RL32258