DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

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

RIN 0970-AB81

Child Support Enforcement Program;

State Plan Approval and Grant Procedures,

State Plan Requirements,

Standards for Program Operations,

Federal Financial Participation,

Computerized Support Enforcement Systems

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

**ACTION**: Final rule

**SUMMARY:** This final rule responds to comments on, and makes
technical corrections to, interim final child support enforcement
regulations published in the Federal Register on February 9, 1999.

The 1999 interim final rule eliminated regulations, in whole or in part,
that were rendered obsolete by, or inconsistent with, welfare reform
legislation and a series of related laws that followed.

**DATES**: These regulations are effective on \[insert 30 days from date
of publication in the FEDERAL REGISTER\].

**FOR FURTHER INFORMATION CONTACT**: Eileen Brooks, Deputy Director,
Policy Division, OCSE, (202) 401-5369, ebrooks@acf.hhs.gov.

**SUPPLEMENTARY INFORMATION**:

# 

# **Statutory Authority**

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

# **Interim Final Regulatory Provisions**

# 

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

# **Response to Comments and Changes to 1999 Interim Final Rule**

We received comments from over 20 representatives of Federal, State and
local agencies, national organizations, advocacy groups, and private
citizens on the interim final rule published on February 9, 1999 in the
Federal Register (64 FR 6237). We appreciate the care that commenters
took in their reviews. No comments were received on the request for
comments on the information collection activity published on July 16,
1999 in the Federal Register (64 FR 38444).

This final rule includes changes made throughout Child Support
Enforcement regulations in response to comments we received in the 1999
document. It also includes additional technical corrections identified
after publication of the 1999 interim final rule that are of a nature
that we believe would not require additional comment, such as changes in
punctuation or spelling.

*General*

*1. Comment:* We received one comment recommending that the rule be
issued formatted with strikeouts and underlines indicating removals and
additions from the current regulation.

*Response:* The Federal Register's publication policy does not allow
issuance of regulations with strikeouts and underlines. The
annually-updated version of the Code of Federal Regulations (CFR)
contains all final revisions to child support program

regulations revised as of October 1 of each year. The Government
Printing Office web site at [www.gpo.gov](http://www.gpo.gov/) includes
the latest available version of the CFR.

*2. Comment:* We received a comment that we were inconsistent by
removing some regulations but adding language in other regulations.

*Response:* The interim final rule was drafted to minimize restatement
of statutory language in Federal regulations. Therefore, we only added
language needed for conformity with statutory language. In some cases,
the inconsistency between the regulation and PRWORA was so great that
the regulation was removed. In response to comments received and to
avoid confusion, we have incorporated some statutory requirements in the
Federal regulations (e.g., see §303.8, Review and adjustment of child
support orders). In addition, because the rule was issued as an Interim
Final Rule, instead of a Notice of Proposed Rulemaking, it was limited
to those changes that were required by statute and were
non-discretionary. Changes involving policy choices will be issued
through separate rulemaking.

*3. Comment:* We received several comments indicating that we missed
nomenclature changes needed in various sections of the regulations. For
example, changes were needed to replace "absent" parent with
"noncustodial" parent and to correct "an" noncustodial to "a"
noncustodial parent.

Response: We have made these straightforward corrections to the
regulations throughout parts 301 through 304 and 307 and will not repeat
these comments and responses individually as we discuss each changed
regulation.

*4. Comment:* We received comments on several sections of the
regulations that were not included in the interim final rule.

Response: We are unable to address these comments in this final rule,
but will retain them for consideration in any future revisions to those
sections.

#### General Definitions - §301.1

*1. Comment:* One commenter said that the definitions for "overdue
support" and "past-due support" create confusion and legal problems for
the program. "Overdue support means a delinquency..." and "Past-due
support means the amount of support...which has not been paid." Lack of
clarity in these definitions and in use of the term "delinquency" in the
regulations leaves interpretation of these terms to local courts. The
commenter cites court rulings that: (1) preclude use of federal income
tax refund offset when an individual is current in his court-ordered
repayment plan; (2) past-due support is created by default in
performance rather than by the existence of outstanding arrears; and (3)
arrearages resulting from the retroactive application of the support
order do not constitute past-due support subject to the federal income
tax refund intercept.

*Response:* These regulatory definitions restate the definitions used in
the Act and were not changed by any recent amendments to the Act.
"Overdue support" is a term defined in section 466(e) of the Act and is
applicable to section 466 remedies. It was added when that section on
mandatory State enforcement laws was first included in title IV-D by the
1984 amendments to the Act. The term "past-due support" is defined in
section 464(c) of the Act and used in sections 454(6) and 454(18) and
throughout section 464 to refer to delinquencies qualifying for Federal
income tax refund offset. Because these are

statutory definitions with particular meanings and applications, we have
not altered them. According to Black's Law Dictionary, the term
"delinquent" means due and unpaid at the

time appointed by law. In the case of child support, a judgment for
unpaid support or an arrearage amount would be a delinquency.
Delinquency is used in these regulations as a general term to
distinguish current support from other support.

*2. Comment:* One commenter suggested that, under definitions, the term
"non-title IV-A Medicaid recipient" be amended to "non-IV-A Medicaid
recipient".

*Response:* We agree and have made this revision. The term "Non-title
IV-A Medicaid Recipient" is revised by removing "Non-title IV-A" and
replacing it with "Non-IV-A".

*Single and Separate Organizational Unit - §302.12*

*1. Comment:* One commenter noted that paragraph (a)(1)(i) deletes
reference to §205.100 although there has been no amendment to that
section. The commenter also indicated that the word "other" should be
removed from paragraph (a)(1)(ii) for clarity.

*Response:* Section 205.100 is obsolete with respect to title IV-A as
reauthorized under welfare reform. It is still permissible for the IV-D
agency to be located within any agency designated to administer title
IV-A, but there is no longer a requirement for a single State agency in
the Temporary Assistance for Needy Families (TANF) program. Therefore,
the word "other" in newly-designated paragraph (a)(1)(ii) is
appropriate.

## 

*Establishing Paternity and Securing Support - §302.31*

*1. Comment:* One commenter noted that the preamble to the interim final
rule said that we were removing §302.31(a)(4), but it was not removed.
This reference appeared in the discussion of §303.80.

*Response:* Reference to removal of §302.31(a)(4) was incorrect. The
content of §302.31(a)(3) was removed and paragraph (a)(3) was reserved
by the interim final rule. Because we have no plans to use the reserved
paragraph (a)(3), we are deleting it in this final rule and have made a
technical correction redesignating paragraph (a)(4) as (a)(3).

*Collection and Disbursement of Support Payments by the IV-D Agency -
§302.32*

*1. Comment:* Two commenters indicated that disbursement timeframes in
paragraphs (b)(1), (2) and (3) should start from the date of receipt by
the State disbursement unit (SDU), pursuant to section 454B(c) of the
Act.

*Response:* We agree with these comments and have revised the
paragraphs, as needed, to make them consistent with the statute. We will
revise paragraph (b)(1) by substituting "date" for "initial point".
Paragraph (b)(1) already has the language "receipt by the SDU". We will
revise paragraphs (b)(2)(ii), (b)(2)(iii) and (b)(3)(i) by changing
references to receipt by the State to reference receipt by the SDU.

*2. Comment:* One commenter questioned if the language in
§302.32(b)(2)(i) "(other than payments sent to the family from the State
share of assigned collections)" is in reference to States that pass
through part of or all of the collection in TANF cases. Another
commenter indicated that, regarding paragraph (b)(2)(i), collections in
TANF cases cannot be disbursed to the family within 2 business days of
receipt by the SDU or of the end of the month of receipt. The County
Welfare Department must first determine total assistance paid to the
family for the month. The commenter indicated that it is impossible to
determine if a pass-through or other support payment is available to the
family until the total assistance paid to the family during the month is
known. Once the total assistance paid is provided to the IV-D agency
after the end of the month, the IV-D

agency conducts the welfare payment distribution process to determine if
the family is entitled to a pass-through or other support payment. The
commenter requests that the regulations be amended so that States be
allowed to make these payments within 2 business days of the
determination of the amount of support payable to the family after the
end of the month.

*Response:* The language quoted by the first commenter does refer to
payments that States pass through to families. Section 454B of the Act,
entitled Collection and

Disbursement of Support Payments, requires the SDU to "distribute all
amounts payable under section 457(a) within 2 business days after
receipt from the employer or other source or periodic income, if
sufficient information identifying the payee is provided." Addressing
the issue raised by the second commenter goes beyond a technical change
to the regulations and therefore cannot be dealt with in this document.
We will consider these comments in future proposed rulemaking on this
section.

*3. Comment:* One commenter asked that, since the SDU does not receive
and disburse Federal income tax refund intercepts, could we include
reference in paragraph (b)(2)(iv) to other entities (e.g., IV-D
agencies) that may receive and disburse them?

*Response:* The commenter is correct that Federal income tax refund
offset collections are not necessarily sent to the SDU; they are sent to
an account designated by the State IV-D agency for receipt of these
monies. However, payments made to the family from these funds must be
disbursed by the SDU, therefore we have not made this change to the
regulation.

*4. Comment:* The commenter also asked whether we plan to include in the
regulations information from OCSE-AT-98-24 on the definition of
"assistance paid to the family".

*Response:* Since this definition is addressed in existing agency
issuances, we do not believe it is necessary to capture it in
regulation. Please note that OCSE-AT-99-10 revised the definition of
assistance for child support purposes in OCSE-AT-98-24, for consistency
with the final TANF regulations.

## *State Parent Locator Service - §302.35*

1*. Comment:* One commenter requested that the preamble clarify that
reference to the removal of medical support obligations from
§302.35(c)(1), which addresses appropriate requests to the State parent
locator service for use of the Federal Parent Locator Service,

is merely a technical change because the language is obsolete and that
the change has no substantive effect on the use of the SPLS or FPLS to
collect medical support.

*Response:* We agree. The deletion of "or medical support obligations if
an agreement is in effect under §306.2 of this chapter" in §302.35(c)(1)
has no substantive effect on the use of the SPLS or FPLS to collect
medical support under the IV-D program. The language was deleted because
former Part 306 governing optional cooperative agreements between IV-D
and Medicaid agencies is no longer in effect.

2*. Comment:* One commenter requested that in §302.35(c)(4) the phrase
"parental kidnapping or child custody or visitation" cases be used
because it is consistent with other sections of the statute and
regulations.

*Response:* We agree and have changed the terminology to reflect the
order of wording elsewhere in regulations. We are amending paragraph
(c)(4) by removing ", visitation" and adding, \"or visitation\" after
\"custody\" to conform to changes to section 463(a)(2) of the Act
defining persons authorized to access the FPLS for custody or visitation
purposes.

*3. Comment:* One commenter suggested that States need more guidance on
the role of the SPLS under PRWORA, including the appropriate use of
State databases to respond to requests, how to address family violence
concerns, and "locate-only" requests in non-IV-D support cases. The
commenter indicated that there has been an increase in the number of
"locate-only" requests submitted to the SPLS and States have concerns
about

appropriately verifying and responding to these requests. The commenter
suggested that the Secretary provide further guidance to ensure that the
vast amount of data now available through the SPLS and FPLS is properly
safeguarded.

*Response:* We agree that these issues are very important and we have
already issued guidance. In DCL-00-36, dated March 15, 2000, OCSE
published a summary list of current statutory citations, regulatory
citations, and OCSE policy documents covering authorized requests for
FPLS information and information from statewide child support
enforcement systems. Key documents include: AT-99-09, dated June 16,
1999, on safeguarding of FPLS information; AT-98-27, dated September 17,
1998 and DCL-98-122, dated November 25, 1998, on the family violence
indicator; AT-98-26, dated August 25, 1998, forwarding final regulations
implementing statewide automated systems requirements; PIQ-98-05, dated
August 12, 1998, on requests for FPLS information for making or
enforcing a child custody or visitation determination; and PIQ-98-02,
dated

May 18, 1998 on court access to FPLS information. Other important OCSE
documents are: the Federal Case Registry Interface Guidance Document,
Section 6.7 Request for Locate; and the Automated Systems for Child
Support Enforcement: A Guide for States, outlining system certification
requirements.

To gather additional information on States' needs in this area, OCSE
convened a work group to review current policy on the locate function
and safeguarding of information handled by State IV-D agencies. The
group met for 7 months in 2001 and provided very useful guidance to OCSE
regarding States' concerns. We are currently developing

proposed regulations on the SPLS and safeguarding of State information
in order to address these issues. We are also developing guidance to
States on use of the FPLS in non-IV-D child support cases.

In addition to the above, in reviewing §302.35, we identified an error
in wording in paragraph (c)(2), which refers to "any agency" of a court
that may request FPLS information. We are making a technical correction
to this paragraph by replacing \"agency\" with \"agent\" to reflect the
statutory language from which this provision is derived.

*Provision of Service in Interstate IV-D Cases - §302.36*

*1. Comment:* One commenter noted that §303.7(b)(3) references
"Federally-approved interstate forms" and suggested that a provision
should be added to §302.36 to require use of Federally approved
interstate forms per section 454(9)(E) of the Act.

*Response:* We do not generally include statutory references in the
regulations except where necessary for understanding the requirements.
Since §302.36 requires the State to

provide interstate services in accordance with the requirements of
§303.7, and §303.7 requires use of the Federally-approved interstate
forms, we do not believe that an additional reference to the forms
requirement is needed in regulation.

## 

## *Assignment of Rights - §302.50*

*1. Comment:* Several commenters suggested we change the title
\"Assignment of rights\" for clarity. One suggested "Obligations with
assigned rights" and the other suggested "Assignment of rights to
support obligations".

*Response:* We agree that "Assignment of rights" is confusing and are
revising the title of this section to "Assignment of rights to support"
because an individual assigns his or her rights to support, not to the
support obligation itself. This language is consistent with language
used in the regulation section.

In addition, in reviewing this section, we identified misplaced
punctuation. To correct this, we are amending paragraph (b)(2) by
replacing "; or" at the end of the paragraph with a period.

## *Distribution of Support Collections - §302.51*

## 

*1. Comment*: A State commenter raised concerns about revisions to
procedures for distribution of State tax intercept collections. The
State has a high State income tax and realizes significant collections
from State tax intercept. Federal and State tax intercept, while having
different thresholds for collection, have previously been distributed to

## satisfy arrearages. OCSE-AT-97-17 indicated that States can decide distribution order where section 457 of the Act is silent. 

*Response*: Section 457 of the Act only provides one exception to
applying collections [first]{.underline} to satisfy the current support
obligation. Section 457(a)(2)(B)(iv) of the Act requires that Federal
income tax refund offset collections must be applied first to satisfy
arrearages. Therefore, there is no discretion in Federal law to allow
State income tax refund offset collections to be distributed like
Federal income tax refund offsets. To clarify, however, OCSE-AT-97-17
states that States may satisfy different categories of

## assigned arrearages in any order because section 457 is silent in this regard. It does not allow States to choose whether to apply a collection to arrearages rather than current support.

In reviewing this section, we identified an incorrect citation to
section 457 of the Act. To correct it, we are amending §302.51(a)(3) by
inserting "B" in the citation so that it reads "section
457(a)(2)(B)(iv)".

*2. Comment:* One commenter suggested that we amend the regulation to be
consistent with OCSE-AT-97-17, Q & A 41, to allow States to hold future
payments until the due date or immediately pay them to the family in
former assistance cases.

*Response:* Section 302.51(b), which was formerly §302.51(c), addresses
the distribution or allocation of collections to satisfy future support
in current assistance cases and

prohibits a State from applying or distributing those collections to
satisfy future support unless all assigned current and past-due support
is paid. Q & A 41 of OCSE-AT-97-17 is not consistent with disbursement
timeframes in section 454B of the Act and will be revised. Any
collection in a former or never assistance case that is owed to the
family must be sent to the family within 2 business days of receipt in
the SDU. This would include future payments owed to the family. The
2-day time frame was required by PRWORA, which also required IV-D
agencies to establish SDUs. Since the February 9, 1999 publication of
the interim final regulation, implementation of the SDUs has allowed
States to comply with the 2-day requirement without difficulty.

3*. Comment:* One commenter indicated that the requirement under
paragraph (a)(4)(iii) to contact the employer when the employer fails to
report the date of withholding is burdensome and jeopardizes
disbursement within 2 days of receipt of the collection. The

commenter indicated that the State should use the date of the employer's
check or it should be left at State option to contact the employer.

*Response:* Pursuant to section 454B(c) of the Act, the date of
collection for amounts collected and distributed is the date of receipt
by the SDU. However, States have the option of deeming the date of
withholding to be the date of collection when the current support is
withheld by an employer in the month when due and received by the SDU in
a

month other than the month when due. Therefore, States are not required
to use the date of withholding as the date of collection for
distribution purposes. If a IV-D agency opts to use the date of
withholding and an employer fails to supply that date,
§302.51(a)(4)(iii) allows the State to reconstruct the date either by
contacting the employer or comparing the actual amounts collected with
the pay schedule in the order. Thus, the State may reconstruct the date
of withholding without contacting the employer.

*4. Comment:* Two commenters indicated that the preamble language
describing changes to paragraph (a)(4) which defines the date of
collection for distribution purposes is not consistent with the change
made in the regulation itself.

*Response:* We agree that there is a discrepancy between the preamble
and the regulation in paragraphs (a)(4)(i) and (ii). The preamble
omitted the effective date of the new definition of date of collection.
The regulatory language is correct: "Effective October 1, 1998 (or
October 1, 1999 if applicable) except with respect to those collections
addressed under paragraph (a)(3) of this section and except as specified
under paragraph (a)(4)(ii)

of this section, with respect to amounts collected and distributed under
title IV-D of the Act, the date of collection for distribution purposes
in all IV-D cases is the date of receipt in the State disbursement unit
established under section 454B of the Act."

*5. Comment:* One commenter indicated that former paragraph (b)(5) that
read "if the amount collected is in excess of the amounts required to be
distributed under paragraph (b)(1) through (4) of this section, such
excess shall be paid to the family" should be

retained. The commenter suggested that due to revisions to paragraphs
(b)(1) and (b)(3), this paragraph needs rewording to retain its original
intent.

*Response:* Section 302.51(b)(5) was deleted because it referred to
paragraphs (b)(1) through (4) which were removed because of changes to
the distribution rules pursuant to PRWORA. We deleted provisions
inconsistent with the new section 457 of the Act and made a conscious
decision not to repeat the statutory requirements in the regulations.
However, the basic principle of ensuring that the State never retains
more assigned

support collections than the total amount of assistance paid to the
custodial parent is still in effect. This provision is found in section
457(a)(1)(B) of the Act (see also two Action Transmittals on
distribution, OCSE-AT-97-17 and OCSE-AT-98-24).

## *Notice of Collection of Assigned Support - §302.54*

1*. Comment:* One commenter pointed out some inconsistencies in the
interim final rule: paragraph (a)(1) refers to "conditions in paragraph
(c)", but former paragraph (c) was deleted; paragraph (b)(1)(ii) refers
to "information required under paragraph (b)(2)", but

that information is now in paragraph (a); and paragraph (b)(2) refers to
paragraphs (b)(1) and (b)(2), which are now paragraphs (a)(1) and (2)*.*

*Response:* We agree with this commenter. A final rule which eliminated
certain regulatory requirements was issued on December 20, 1996 in the
Federal Register (61 FR 67235). That rule removed paragraph (a) and
redesignated paragraphs (b) and (c) as

\(a\) and (b). At that time, we neglected to make corresponding changes
in later references to these redesignated paragraphs.

Therefore, we are now making the following technical corrections: in
paragraph (a)(1), we are revising "paragraph (c)" to read "paragraph
(b)"; in paragraph (b)(1)(ii), we are revising "paragraph (b)(2)" to
read "paragraph (a)"; and in paragraph (b)(2), we are revising "(b)(1)"
to read "(a)(1)" and "(b)(2)" to read "(a)(2)".

*§302.65 Withholding of Unemployment Compensation.*

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

## *Required State Laws - §302.70*

*1. Comment:* Two commenters pointed out that since §§303.103 and
303.105 are eliminated, references to them in paragraphs (a)(4) and (7)
should be eliminated.

*Response:* We agree and are deleting these references. In addition to
the changes raised by commenters, we are making a similar technical
correction to paragraph (c) by replacing "§§303.100 through 303.105 of
this chapter" with "§§303.100 through 303.102 and §303.104 of this
chapter".

*2. Comment:* Two commenters noted that paragraph (a)(5)(ii) refers to
obsolete "§§232.40 through 232.49 of this title" and should be changed
to refer to section 454(29) of the Act.

*Response:* We have deleted the regulatory references in that clause and
added the reference to section 454(29) of the Act.

*3. Comment:* One commenter recommended that we remove paragraphs (a)(1)
through (a)(11) as they restate the provisions of the Act but retain
introductory language in paragraph (a).

*Response:* Paragraphs (a)(1) through (11) not only restate provisions
in section 466 of the Act, they also cross-reference related
requirements in Part 303 of the regulations. We are looking at the best
way to present these requirements and will address any needed changes
during future revisions to this section.

*4. Comment:* One commenter noted that we should replace "wages" with
"income" in paragraph (a)(8).

*Response:* We have made this technical revision for consistency with
section 466(a)(1) and (b) of the Act.

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

*1. Comment:* A commenter noted that paragraph (b)(6) refers to §305.50,
which no longer exists.

*Response*: The reference to §305.50 in the interim final regulation was
a typographical error. In paragraph (b)(6), we are correcting the
citation by changing "§305.50" to "§304.50".

*Mandatory Computerized Support Enforcement System - §302.85*

*1. Comment:* A commenter suggested editing paragraph (b)(2), governing
the conditions for waiver of certain automated systems requirements,
because it refers to 45 CFR part 305 which was removed and reserved by
the interim final rule.

*Response:* Since publication of the interim final rule, a new part 305
was added to the regulations. Section 305.63 of this part contains
requirements for determining substantial compliance with title IV-D of
the Act as a result of an audit conducted under §305.60.

Thus, we are not changing the reference to part 305 in this section.

*Location of Noncustodial Parents - §303.3*

*1. Comment:* With the expanded Federal Parent Locator Service (FPLS),
States submit cases in their State Case Registries to the Federal Case
Registry (FCR). When a new case is submitted to the FCR, it is matched
proactively with other data in the FPLS and

States receive locate information automatically. Now that this proactive
matching occurs, the commenter asked if there is still a need for States
to submit cases quarterly to the FPLS for locate? Also, is it still
necessary to access all appropriate location sources, including the
FPLS, within 75 calendar days of determining that location is necessary
and to make repeated locate attempts, including transmitting cases to
the FPLS, when new information becomes available on a case?

*Response:* Proactive matching between the FCR and the National
Directory of New Hires (NDNH) occurs each time new information is added
to an FCR or NDNH record on an

individual. The proactive match information is sent electronically to
State IV-D agencies daily when a match occurs to link a IV-D case with
newly provided information. This is a major enhancement to program
locate processes and leads to location of individuals sought in many
child support cases. Further location attempts may remain necessary in
cases where people are self-employed, employed but not reported,
unemployed but not receiving unemployment compensation, or employed
outside the United States by entities that do not report to the FPLS. In
addition, location efforts are needed to find assets, debts, and other
information that enables an agency to proceed with a case even though
proactive match information is provided on new hires, quarterly wages
and

unemployment compensation. OCSE has issued PIQ-01-02, dated February 28,
2001, to address these changes. The PIQ indicates States are not
required to submit cases to the FPLS for searches of other locate
sources, but OCSE encourages this if the State has reason to believe
that an FPLS query may be helpful. States are not required to submit
cases to the FPLS quarterly, nor are they required to make repeated
locate attempts to the

FPLS, when new information becomes available, since constant updating of
FCR and NDNH databases and ongoing proactive matching are in place.

*Establishment of Paternity - §303.5*

*1. Comment:* A commenter noted that this section is amended to include
administrative orders for genetic testing. As amended, the language
eliminates reference to certain

paternity actions taken in court. The commenter asked if we intend to
drop the requirement for the child support agency to obtain an order for
repayment of costs for genetic tests if the tests were ordered as part
of a court process.

*Response:* In §303.5(d)(2) we deleted "legal" to indicate that a
contested paternity case is any action in which the issue of paternity
may be raised under State law and one party denies paternity. The action
may occur through an administrative or judicial process. The amendment
deleting "legal" did not eliminate court actions.

*2. Comment:* Two commenters asked whether the phrase in paragraph (c)
which reads "and use through competitive procurement laboratories" is
correct.

*Response:* This phrase is accurate. States must follow competitive
procurement practices, consistent with requirements at 45 CFR part 74,
and use accredited laboratories that perform legally and medically
acceptable genetic tests at reasonable cost, consistent with
requirements at section 466(a)(5)(F) of the Act.

*3. Comment:* One commenter noted that the use of the phrase \"alleged
father who has denied paternity\" in paragraph (e)(3) is inconsistent
with section 466(a)(5)(B)(ii)(I) of the Act which requires recoupment
from the alleged father if paternity is established, whether or not he
denies paternity.

*Response:* Section 466(a)(5)(B)(ii)(I) of the Act provides for
recoupment at State option only in contested cases where the agency has
to order genetic tests and paternity is established. The commenter
raises issues that go beyond the scope of this technical rulemaking. We
will consider this comment in future revisions to this section through
proposed rulemaking.

*Provision of Services in Interstate IV-D Cases - §303.7*

*1. Comment:* Several commenters noted that the preamble to the interim
final rule (64 FR 6241) indicates paragraph (b)(1) is amended to require
States to use their long-arm statute to establish paternity, but there
is no corresponding requirement in the regulation itself.

*Response:* We have corrected this error by revising paragraph (b)(1) to
read: "Use its long-arm statute to establish paternity, when
appropriate." As indicated in the preamble to the interim final rule,
all States have long-arm paternity establishment authority under UIFSA.

*2. Comment:* One commenter suggested changing "wage withholding to
"income withholding" in paragraph (b)(2).

*Response:* We agree and have made this change for consistency with
section 466(a)(1) and (b) of the Act which refer to income withholding.

*3. Comment:* One commenter noted that the preamble indicated that
regulatory references in paragraphs (c)(7)(ii) and (iii) were placed in
the correct numerical order, but there was no corresponding change in
the regulation itself.

*Response:* We have made these changes, as intended in the interim final
rule. In subparagraph (c)(7)(ii) we are correcting "§§303.4 and 303.101
of this part and §303.31

of this chapter" to read "§§303.4, 303.31 and 303.101 of this part".
Similarly, in subparagraph (c)(7)(iii) we are correcting "§§303.6 and
303.100 through 303.102 and 303.104 of this part and §303.31 of this
chapter" to read "§§303.6, 303.31, 303.100 through 303.102, and 303.104
of this part".

*4. Comment:* Several commenters suggested that §303.7(c)(7)(iv) be
revised to require the IV-D agency to forward payments to the initiating
State within 2 business days of the date of receipt in the State
Disbursement Unit of the responding State.

*Response:* We agree that this suggestion is consistent with section
454B of the Act, which requires SDUs to disburse certain amounts within
2 business days of receipt, but it is not required by statute and
therefore not included in this rulemaking. The 2-day time frame applies
only to collections from employers and collections of other periodic
income. Collections that do not result from periodic income, such as tax
refund offsets, lottery winning intercept, or levies of assets, are not
required to be distributed within 2 days, as there may be appeals of
these types of collections. We will consider changes to time frames
applicable to interstate cases in the next revision to §303.7 under a
Notice of Proposed Rulemaking.

## *Review and Adjustment of Child Support Orders - §303.8*

*1. Comment:* There were two comments concerning definitions for
"review" and "adjustment" that were in the former §303.8. One commenter
suggested that we retain the former definitions of "review" and
"adjustment", but rename them as "guidelines

review" and "guidelines adjustment". The commenter made this suggestion
because most States will continue with guideline reviews.

The second commenter believed that the language for this section might
be construed to mandate administrative reviews. The commenter suggested
that we amend the regulation by including a process for challenging a
proposed adjustment or determination, apart from the review that takes
place in the judicial setting. The commenter believes that if their
State complies with the new provisions, there would be no proposed order
or

adjustment. In the commenter's State, a litigant files a motion with the
court, the court rules on the motion; and either party can appeal the
order.

*Response:* We agree with these comments. We have reinstated the terms
"review" and "adjustment" from the former §303.8(a)(1) and (3) as
applicable to guidelines reviews only.

Reinstating the definition of "review" also clarifies that reviews are
not mandated to be conducted only by administrative process. The
definition for "review" includes "proceeding before a court,
quasi-judicial process, or administrative body".

*2. Comment:* One commenter was concerned that the 15-day timeframe to
determine whether to conduct a review was eliminated.

*Response:* The 15-day timeframe to determine whether or not to conduct
a review was removed because it conflicts with the requirement that
States review, at least once every 3 years, any case upon receipt of a
request for review.

*3. Comment:* We received a few comments about notices. Two commenters
questioned whether the requirement to provide the notice of the right to
request a review is met by placing such notice in the order. Another
commenter asked, in a case with multiple orders, which State sends the
notice of the right to request a review and the notice of the results of
the review. A fourth commenter asked when to send these notices and how
to

implement this requirement since each case has a different date of
application, different date of review, and States vary in frequency
permitted between reviews.

*Response:* Section 466(a)(10)(C) of the Act requires the State to
provide notice to each parent subject to the order not less than once
every 3 years informing them of their right to request the State to
review and, if appropriate, adjust the order pursuant to this paragraph.
The paragraph also states that the notice may be included in the order.
Including the notice in the order merely takes care of the first year
requirement; the triennial requirement must still be fulfilled.

With respect to cases with multiple orders, the State that is working
the case should send the notice of the right to request a review, or if
it issues an order, may include the notice in the order. Notice of the
right to request a review must be sent every 3 years thereafter if the
State continues to work the case. Any State that conducts a review must
send the

notice of the results of the review. A review conducted in a case with
multiple orders would include a determination of the controlling order
and reconciliation of all arrearages under the orders in accordance with
the Uniform Interstate Family Support Act (UIFSA). Once a controlling
order determination is made, UIFSA governs who has jurisdiction to
adjust or modify the controlling order.

Since section 466(a)(10)(C) was effective October 1, 1996, States should
have notice procedures in place. Each State has authority to meet this
requirement in a manner that is most efficient for its system and
resources. Notices can be sent all at one time or on a staggered basis
according to the State\'s own procedures.

*4. Comment:* There were two comments regarding the use of thresholds
and change of circumstances. One commenter noted that an Office of
Inspector General report indicated that 40 States maintained the
requirement to meet thresholds showing a substantial change in
circumstances before a review is conducted or an adjustment is made,
which they use regardless of the frequency of reviews. The commenter
asked whether thresholds for the 3-year reviews upon request could be
less prohibitive than the thresholds for reviews that are conducted more
frequently that require a substantial change of circumstances. Another
commenter thought that even the 3-year reviews

should require a substantial change in circumstances since it is
required by the more frequent reviews.

*Response:* States may not require proof or a showing of a change in
circumstances in a 3-year review upon request. Under section
466(a)(10)(A)(iii) of the Act, and upon request,

3-year reviews, and adjustment, if appropriate, are automatic, without
any proof of a change of circumstances. If a party desires a review
sooner than once every 3 years, the party must show a substantial change
of circumstances for an adjustment of the order, consistent with section
466(a)(10)(B) of the Act.

In reviewing §303.8 and the comments received, we determined that the
changes made by the interim final rule were not fully reflective of the
statutory requirements in section 466(a)(10) of the Act and that this
was leading to confusion about what States must do to

meet the requirements. Therefore, in addition to reinstating the
definitions for "review" and "adjustment" from the original regulation
in response to comments, we have decided to replace the paragraph (b)
language published in the interim final rule with the language in the
statute at section 466(a)(10) of the Act. We are revising paragraph (c)
to clarify that States may use a quantitative standard only in cases
involving the use of automated methods in accordance with section
466(a)(10)(A)(i)(III) of the Act. That section alone refers to orders
being "eligible for adjustment," recognizing there might be some
standard set to determine eligibility for adjustment. The other two
methods of review (guidelines and cost-of-living) do not contain this
language. Sections 303.8 (a) and (d) through (f) remain as published in
the interim final rule. A summary of the changes to this section
follows.

We are revising paragraph (b)(1) by restating the requirements of
section 466(a)(10)(A)(I)(i) of the Act that the State must have
procedures under which reviews are performed every 3 years upon request
of either parent or, in the case of an assignment under part A, upon the
request of the State agency, taking into account the best interests

of the child. For clarity, and consistency with section 466(a)(10) of
the Act, paragraph

(b)(1)(i) is added to the regulation to explain guideline reviews;
paragraph (b)(1)(ii) is added to explain cost of living adjustment
(COLA) reviews; and paragraph (b)(1)(iii) is added to explain the
automated reviews. These three subparagraphs repeat the statutory
requirements of section 466(a)(10)(A)(i)(I)-(III).

Current paragraph (b)(2) of the regulation is redesignated as paragraph
(b)(6) and revised to be consistent with the statute, as discussed
below.

We are adding a new paragraph (b)(2) which restates section
466(a)(10)(A)(ii) of the Act, to specify that either party may contest
an adjustment within 30 days after the date of the notice of the
adjustment in the case of a COLA or automated review by making a request
for a guideline review, and adjustment, if appropriate.

We are reinstating former definitions for "adjustment" and "review" in a
new paragraph (b)(3) for use in guideline reviews only, in response to
comments.

We are restating section 466(a)(10)(A)(iii) of the Act in a new
paragraph (b)(4), which specifies that adjustments under guideline
reviews do not require proof or showing of a change in circumstances.

We are adding new paragraph (b)(5) to restate section 466(a)(10)(B) of
the Act regarding making a request for a review outside the 3-year
cycle. If the requesting party

demonstrates a substantial change in circumstances, the State must
adjust the order in accordance with its guidelines.

We are redesignating former paragraph (b)(2) as new paragraph (b)(6) and
revising it to restate section 466(a)(10)(C) of the Act regarding notice
not less than once every 3 years informing parents of their right to
request a review. We have retained the provision in the current
regulation that the notice must specify the place and manner in which
the request should be made.

Paragraph (c) is amended by adding a paragraph title and the words
"using automated methods under paragraph (b)(1)(iii)" to indicate that
the reasonable quantitative standard for determining adequate grounds
for petitioning for adjustment of the order applies only when the review
is done using automated methods, as required under section
466(a)(10)(A)(i)(III) of the Act.

Paragraphs (d) through (f) are unchanged with the exception of the
technical changes of adding a title to paragraph (d), changing the words
\"to petition for\" to "initiate an" in paragraph (d) and substituting
\"must\" for \"will\" in paragraph (f).

*Agreements to Use the Federal Parent Locator Service (FPLS) in Parental
Kidnapping and Child Custody Cases - §303.15*

*1. Comment:* One commenter thought that paragraph (a)(1) which defines
authorized persons should be revised consistent with changes made by the
Adoption and Safe Families Act of 1997 (ASFA).

*Response:* ASFA amended section 453 of the Act by adding title IV-B and
title IV-E agencies to the list of authorized persons to whom FPLS
information may be disclosed for the purpose of establishing parentage.
Section 302.35(c) already includes these authorized persons, in
accordance with ASFA amendments to section 453 of the Act. ASFA did not
amend the list of authorized persons in section 463 of the Act, which
governs the regulations at §303.15.

We amended this section, but failed to amend the title. We are revising
the section title to reflect the addition of \"visitation\"
determinations as an authorized purpose of the agreements. We are also
making technical changes in paragraph (a)(1)(i) by replacing

the period at the end with a semicolon and in paragraph (a)(1)(ii) by
replacing \"visistation\" with \"visitation\" and by adding "or" after
the semi-colon.

*Minimum Organizational and Staffing Requirements - §303.20*

## 

## *1. Comment:* One commenter noted that paragraph (e)(3) refers to parts 220, 222 and 226 of 45 CFR chapter II, which no longer exist.1. Comment: Two commenters suggested edits in this section. One commenter noted that paragraph (g) remains although it refers to part 305 which was removed. The other commenter noted that paragraph (e)(3) refers to parts 220, 222 and 226 of this title which no longer exist and should be replaced with Federal law.

*Response:* We agree with the commenter and have removed the reference
to the obsolete regulations.

*2. Comment:* One commenter noted that paragraph (g) remains although it
refers to part 305, which was removed.

*Response:* Requirements governing audits to determine substantial
compliance with title IV-D requirements under section 452(a)(4) of the
Act were placed back in part 305 by final regulations governing
incentives and penalties published December 27, 2000

(see OCSE-AT-01-01). Therefore, the reference to part 305 is accurate.

## *Safeguarding Information - §303.21*

*1. Comment:* Commenters expressed varied opinions regarding removing,
retaining or revising this regulation. One commenter recommended that we
retain this regulation as the following will be lost: 1) paragraphs
(a)(1) and (3) limit the sharing of information; 2) paragraph (a)(4)
clarifies that information may be shared with officials charged with
investigating physical, mental, or sexual abuse; and 3) paragraph (b)
prohibits disclosure of case specific identifying information to
legislative bodies. The new language of section 454(26) of the Act is
not as precise and does not clarify what would be

unauthorized. Moreover, the commenter noted that §307.13 deals only with
information in the States' computerized databases. The commenter
believes it is important to retain privacy rights of IV-D participants.

Another commenter agreed that the regulation was inconsistent with
PRWORA and should be deleted or substantially revised. The commenter
encourages the Secretary to

issue an updated regulation to replace this regulation as soon as
possible. States' access to information has been vastly expanded under
PRWORA and States need guidance on use of data and disclosure of
information, including dealing with the family violence indicator.

A third commenter indicated that eliminating paragraph (b) while OCSE
works on its new regulation might result in broader disclosure to
legislative bodies during this time of intensive study of TANF and child
support enforcement programs.

*Response:* We are maintaining our decision to delete this regulation
because it was not responsive to the post-welfare reform environment. It
protected information only on applicants and recipients of IV-D
services. It did not protect information that IV-D agencies have on
noncustodial parents and children, nor did it protect information that
IV-D agencies now have on persons who may not be involved in a IV-D
case, such as new hires, wage earners and individuals receiving
unemployment compensation. Section 454(26) of the Act requires States to
have safeguards in effect to protect all confidential information
handled by the State agency. It further prohibits release of information
under certain circumstances such as when there is a protective order in
place. The regulation

allowed broader disclosure of some information that is no longer
permitted under the Act. Release of personal information to legislative
bodies is not permitted under section 454(26) of the Act, which requires
States to protect confidential information in their possession.

A work group of State and Federal members met in 2001 to discuss the
types of issues that need to be addressed in publication of a proposed
replacement regulation, which is now under development. We recognize the
importance of protecting the privacy of data handled by IV-D agencies.
Despite the deletion of §303.21, certain safeguarding requirements
remain in effect that cover States\' automated systems. For example,
final rules issued August 3, 1998 (63 FR 44795) on Statewide automated
systems address safeguarding of information contained in the States'
child support databases.

## *Securing and Enforcing Medical Support Obligations - §303.31*

## 

## 1. *Comment*: Several commenters asked whether the IV-D agency is required to enforce an order which requires the noncustodial parent to provide health insurance in instances 

where the custodial parent already provides such coverage and does not
want the noncustodial parent's coverage. One of the commenters suggested
allowing a waiver of the requirement to enforce the noncustodial
parent's coverage. The commenter suggested that the waiver could include
petitioning the court or administrative authority to include the
custodial parent's coverage in the order, and pursuing coverage from the
noncustodial parent only if the custodial parent does not have coverage
other than Medicaid.

*Response:* If a support order requires a noncustodial parent to provide
health insurance coverage, the only way for a IV-D agency to avoid
enforcing that order is a change to the order. There is no authority
under sections 466(a)(19) or 452(f) of the Act to waive the requirement
to enforce noncustodial parents\' health insurance coverage. Section
452(f)

requires the Secretary of HHS to issue regulations requiring IV-D
agencies to include medical support as part of any child support order
and to enforce medical support whenever health care coverage is
available to the noncustodial parent at a reasonable cost. Section
466(a)(19) of the Act requires the use of the National Medical Support
Notice (NMSN) to enforce an order that contains a requirement for health
care coverage. Unless the order allows for alternative coverage, a IV-D
agency must send the NMSN to the noncustodial parent\'s employer, if
known, as required in section 466(a)(19) of the Act

and §303.32, published December 27, 2000 and effective March 27, 2001
(see OCSE-AT-01-02).

2\. *Comment:* Two commenters indicated that regulations should assure
that all orders include health insurance, consistent with section 452(f)
of the Act. Another commenter

recommended that we revise paragraphs (b)(1), (2), and (4) to delete any
references to "petition", just as CSPIA deleted the reference to
"petition" in section 452(f) of the Act.

*Response:* We agree that CSPIA required the Secretary, in section
452(f), to issue regulations requiring IV-D agencies to include medical
support as part of any child support order. Separate regulations will be
issued that offer the public an opportunity for comment.

*Requests by the State Parent Locator Service (SPLS) for Information
from the Federal Parent Locator Service (FPLS) - §303.70*

1\. *Comment*: One commenter suggested we revise paragraph (d)(1) by
replacing "to obtain information or to facilitate the discovery of any
individual" with "to obtain information on, or to facilitate the
discovery of, the location of any individual". The commenter noted that
paragraph (d)(1) does not track section 453(a)(3) of the Act which
states that the FPLS may be used for the purpose of enforcing any
[Federal]{.underline} or State law with respect to the unlawful taking
or restraint of a child. The commenter expressed concern if the change
to paragraph (e)(1)(i), which governs fees for use of the FPLS,

means that IV-D agencies will be charged fees for cases other than just
non-IV-A, locate only, and parental kidnapping/child custody cases. The
commenter indicated that IV-D agencies should not have to pay fees for
use of the FPLS in IV-A cases. Finally, the commenter proposed that the
paragraph (e)(1)(iii) cite should be to section 453(k)(3) of the Act,
not to section 453(k) of the Act.

*Response:* We did not make the revision described in the first comment.
While the regulation language is not exact, we believe it generally
covers the requirement. We agree with the commenter's second comment and
have added "Federal or" before "State" for consistency with the statute.
Regarding the commenter's third concern about being charged additional
fees for use of the FPLS, PRWORA changed the requirements on FPLS fees
and now States must pay for all information received from the FPLS
pursuant

to section 453(k)(3) of the Act. (See DCL-00-73, dated June 28, 2000,
which explains OCSE's charges to States for using the FPLS.) We agree
with the commenter's final point and have revised paragraph (e)(1)(iii)
by citing section 453(k)(3) of the Act.

*Requests for Collection of Past-due Support by Federal Tax Refund
Offset - §303.72*

*1. Comment:* One commenter noted three instances of "Secretary of the
Treasury" that should be replaced by "Secretary of the U. S. Treasury".

*Response:* We agree with the comment and made this change throughout
the section. In addition, we are making a technical change by revising
\"an title IV-A\" to \"a title IV-A\"

in paragraph (a)(3)(iv). Finally, paragraph (h)(3) is amended to delete
the language \"fSecretary of the U.S. Treasuryt\" which was included in
the paragraph in error.

*Procedures for Income Withholding - §303.100*

*1. Comment:* Several commenters noted that some references to "wages"
have not been replaced by "income".

*Response:* We will make these changes in paragraphs (e)(1)(i) and (g).

*2. Comment:* One commenter noted that the preamble does not explain
that paragraphs (h)(5)(i) through (iii), (6) and (7) have been deleted
or why.

*Response:* The interim final rule explained that former paragraph (h)
was redesignated as paragraph (f) and revised to provide updated
standards for program operations for both the traditional two-state
interstate income withholding remedy and UIFSA's new one- state direct
income withholding remedy. Former paragraphs (h)(5)(i)-(iii) were
deleted because PRWORA revised section 466(b)(4) of the Act to remove
the requirements for

an advance notice in cases of initiated income withholding. We did not
intend to delete former paragraphs (h)(6) and (7), which govern due
process and which State law governs in interstate withholding
situations. Since these paragraphs were inadvertently omitted in the
interim final rule, they are reinstated in this regulation and
redesignated as paragraphs (f)(4) and (5).

*3. Comment:* One commenter noted that throughout this section the term
"wages" is replaced with the term \"income\", but the term "employer"
was not similarly expanded upon. The continued use of the term
\"employer\" seems to limit the impact of the requirements provided in
this section to income derived only from employers.

*Response:* Use of the term "employer" is consistent with its use in
section 466(b) of the Act.

*4. Comment:* One commenter asked whether the 14-day implementation time
frame has been eliminated in paragraph (e)(1)(ix). If it has been
eliminated, can State laws provide a time frame for employers to
implement income withholding?

*Response:* The 14-day time frame was tied to the advance notice to the
noncustodial parent that was eliminated by PRWORA. Section
466(b)(6)(A)(i) of the Act and §303.100(e)(1)(ix) state that employers
must pay the withheld amount to the SDU within 7 business days after the
date the amount would have been paid or credited to the employee.

*5. Comment:* One commenter noted that Basic Housing Allowances/separate
rations are not taxable and should not be included in income
withholding; only basic pay should be included.

*Response:* Our regulations at §302.56 say that a State shall have
procedures for setting guidelines and that the guidelines must take into
consideration all earnings and income of the noncustodial parent. Basic
housing allowances and rations are not excluded from the definition of
income subject to withholding under section 466(b)(8) of the Act.

*6. Comment:* Two commenters pointed out a conflict between
§303.100(e)(2) and (3) that require income withholding notices to
employers to be issued within 15 calendar days while Federal law at
section 454A(g)(1)(A)(i) of the Act requires notices to be sent to
employers within 2 business days. This commenter asked whether there are
actually 2 different requirements.

*Response:* Sections 453A(g)(1) of the Act requires the State to
transmit an income withholding notice to an employer within 2 business
days after the date information regarding a newly hired employee is
entered into the State Directory of New Hires.

Section 454A(g)(1)(A)(i) of the Act and implementing regulations at
§307.11(c)(1)(i) require the statewide automated system to transmit
income withholding orders and notices to employers and other debtors
within 2 business days after receipt of notice of income and the income
source subject to withholding from a court, another State, an employer,
the Federal Parent Locator Service, or another source recognized by the
State. Under these provisions, the 2-day time frame for sending a
withholding order or notice

applies only to situations in which the State Directory of New Hires or
the statewide automated system receives notice of the new hire or income
source subject to withholding. We have revised paragraphs (e)(2) and (3)
to include reference to the 2-day timeframe for sending the withholding
notice as described above and retained the 15-day time frame in the
current regulation for other situations where notification is not
received by the State Directory of New Hires or the automated system.

*7. Comment:* One commenter noted that the reference to "paragraph
(f)(1) of this section" in paragraph (e)(4) is in error. The correct
reference should be to "paragraph (e)(1)".

*Response:* We agree with the commenter and in response to this
technical error have made the correction to paragraph (e)(4) by
replacing the citation "paragraph (f)(1) of this section" with
"paragraph (e)(1) of this section".

##  

## *Expedited Processes - §303.101*

Expedited processesCSection 303.101

*1. Comment*: A commenter recommended that paragraph (b)(2) be revised
to reference review and adjustment timeframes at §303.8(e).

*Response:* As currently written, §303.101 provides for expedited
processes for establishing and enforcing support orders. The commenter
suggests a modification to this section to add expedited review and
adjustment of orders. We consider this to be a substantive change that
is not appropriate for this technical rulemaking. We will consider this
comment in any future revision to this section.

We are making a technical correction in paragraph (a) of this section by
inserting a period after \"*Definition*\".

*Collection of Overdue Support by State Income Tax Refund Offset -
§303.102*

*1. Comment:* One commenter noted in §303.102(a)(1) the word "or" needs
to be inserted following "section 408(a)(3) of the Act".

*Response:* We agree with this comment. In §303.102(a)(1), we are making
a technical correction by inserting the word "or" following \"section
408(a)(3) of the Act". In addition, we are making an editorial change to
the language of paragraph (g)(1) because, as it currently reads,
subparagraph (ii) is a sentence fragment with no subject.

*Procedures for the Imposition of Liens against Real and Personal
Property - §303.103*

*1.Comment:* One commenter suggested that Federal guidance regarding
implementing lien requirements is necessary.

*Response:* To clarify the issue of direct imposition of liens across
State lines, we issued OCSE-PIQ-99-06 on August 16, 1999. We believe
further guidance in this area is more appropriate through development of
technical assistance publications and examples of model practices used
by States. Current information on State lien and levy laws may be

found on the OCSE web site at \"www.acf.dhhs.gov/programs/cse\". Click
on \"Online Interstate Roster and Referral Guide (IRG)\", then click on
a particular State, and then

click on \"View State FIDM Information\" for a matrix of lien
information specific to each State.

## 

#### Availability and Rate of Federal Financial Participation - §304.20

*1. Comment*: One commenter suggested that paragraph (b)(1)(iii)(C) be
revised to include "Indian Tribes or Tribal Organizations" as added in
§302.34. Section 304.20(b)(1)(iii)(C) cross-references §302.34.

*Response:* We agree with the commenter. We have revised
§304.20(b)(1)(iii)(C) to read: "Cooperation with courts, law enforcement
officials, and Indian Tribes or Tribal organizations pursuant to §302.34
of this chapter."

*2. Comment:* One commenter indicated that paragraphs (b)(1)(viii)(C)
and (ix)(C) were removed because the IV-A agency no longer determines
cooperation. The commenter suggests that these paragraphs be reinstated
and revised, as there is still an exchange of information between IV-D
and IV-A about cooperation determinations made by the IV-D

agency. Section 304.20(b)(1)(ix) prior paragraph (D) was removed for the
same reasons and it should also be reinstated and revised.

*Response:* In §304.20, paragraphs (b)(1)(viii)(C) and (b)(1)(ix)(C)
were removed because of the transfer of responsibility for determining
cooperation from the IV-A agency and the Medicaid agency to the IV-D
agency. Therefore, agreements are no longer necessary. Any activity
associated with the IV-D agency\'s determination of cooperation under
section 454(29) of the Act is an allowable cost under the IV-D program.

*Determination of Federal Share of Collections - §304.26*

*1. Comment:* One commenter indicated that regulations for the
determination of the Federal share of collections are confusing. The
commenter recommends deleting \"to the extent of its participation in
the financing of the title IV-A and title IV-E payments" in paragraph
(a) and indicating that the Federal share be determined pursuant to
section 457(c)(2) of the Act.

*Response:* We agree and revised paragraph (a) by deleting the confusing
language and adding that, in computing the Federal share of support
collections for assistance made under titles IV-A and IV-E, the State
must use the Federal medical assistance percentage (FMAP) in effect for
the fiscal year in which the amount is distributed, as defined in
section 457(c)(3) of the Act.

2*. Comment:* One commenter notes that the 4^th^, 5^th^ and 6^th^
sentences of the preamble description are inaccurate and should be
replaced with: "Section 457(c)(3)(A) defines the FMAP rate to be 75
percent in the case of Puerto Rico, the Virgin Islands, Guam and

American Samoa. Section 457(c)(3)(B) specifies that the FMAP rates as
defined at section 1905(b) of the Act be used for any other State." The
commenter also suggests that we revise paragraph (a) by removing "to the
extent of its participation in the financing of the title IV-A and title
IV-E payment" and add "the Federal share of the support collections" in
its place and revise the next sentence to read: "In computing the
Federal share of support collections for assistance made under titles
IV-A and IV-E, the State shall use the Federal medical assistance
percentage (FMAP) in effect for the fiscal year in which the amount is
distributed as defined in sections 457(c)(3) and 1905(b) of the Act."

*Response:* We agree with the commenter and have included these changes
with minor editorial modifications. We are revising paragraph (a) of
this section to be consistent with the revised language of sections
457(c)(2) and (3) of the Act that specifies the use of the Federal
Medical Assistance Percentage (FMAP) formula in calculating the Federal

share of child support collections. Section 457(c)(2) specifies that the
Federal share of collections is the portion of the amount collected
resulting from the application of the FMAP in effect for the fiscal year
in which the amount is distributed. Section 457(c)(3)(A) defines the
FMAP rate to be 75 percent for Puerto Rico, the Virgin Islands, Guam,
and America Samoa. Section 457(c)(3)(B) specifies that the FMAP rates
for any other State are as defined in section 1905(b) of the Act, as in
effect on September 30, 1995.

*Repayment of Federal Funds by Installments - §304.40*

*1. Comment:* One commenter suggests that in the last sentence of
paragraph (b)(3), we delete "Quarterly Statement of Expenditures
(SRA-OA-41) reports" and replace it with "Quarterly Report of
Expenditures and Estimates".

*Response:* We agree with the commenter and are updating the reference
to the form since the name of the form has changed. We are amending
paragraph (b)(3) of this section by removing "Quarterly Statement of
Expenditures (SRA-OA-41) reports" and replacing it with "Quarterly
Report of Expenditures and Estimates".

#### Definitions -- 307.1

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

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

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

## **Paperwork Reduction Act**

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

# **Regulatory Flexibility Analysis**

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

# 

# **Regulatory Impact Analysis**

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

# **Unfunded Mandates Reform Act of 1995**

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that a
covered agency prepare a budgetary impact statement before promulgating
a rule that includes any Federal mandate that may result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of \$100 million or more in any one year.

If a covered agency must prepare a budgetary impact statement, section
205 further requires that it select the most cost-effective and least
burdensome alternative that achieves the objectives of the rule and is
consistent with the statutory requirements. In addition, section 203
requires a plan for informing and advising any small governments that
may be significantly or uniquely impacted by the final rule.

We have determined that the final rule will not result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of more than \$100 million in any one year.
Accordingly, we have not prepared a budgetary impact statement,
specifically addressed the regulatory alternatives considered, or
prepared a plan for informing and advising any significantly or uniquely
impacted small governments.

# **Congressional Review**

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

**Assessment of Federal Regulations and Policies on Families**

Section 654 of the Treasury and General Government Appropriations Act of
1999 requires Federal agencies to determine whether a proposed policy or
regulations may affect family well being. If the agency\'s determination
is affirmative, then the agency must prepare an impact assessment
addressing seven criteria specified in the law. These regulations will
not have an impact on family well being as defined in the legislation.
This regulation merely aligns existing Federal regulations with Federal
legislation and, like the Federal legislation, will positively impact
families needing support.

##### Executive Order 13132

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

**List of Subjects**

45 CFR part 301

Child support, Grant programs/social programs.

45 CFR part 302

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

45 CFR parts 303 and 304

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

45 CFR part 307

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

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

Dated:

Wade F. Horn, Ph.D.

> Assistant Secretary for Children and Families

Approved:

Tommy G. Thompson

Secretary of Health and Human Services

For the reasons discussed above, we are adopting the interim final rule
published at 64

FR 6237 as a final rule with the following changes to 45 CFR chapter
III, as set forth

below:

# **PART 301\--STATE PLAN APPROVAL AND GRANT PROCEDURES**

1\. The authority citation for part 301 continues to read as set forth
below:

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

**[§301.1 \[Amended\]]{.underline}**

2\. In §301.1: in the definition \"Non-title IV-A Medicaid recipient\",
the words \"Non-title IV-A\" in the title are replaced by \"Non-IV-A\";
the definition for \"Overdue support\" is amended by removing \"absent
parent's\" and adding \"noncustodial parent's\" in its place; and the
definition for \"State PLS\" is amended by removing \"absent\" before
\"parents\".

## **PART 302\--STATE PLAN REQUIREMENTS**

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

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

**[§302.31 \[Amended\]]{.underline}**

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

**[§302.32 \[Amended\]]{.underline}**

5\. In §302.32:

a.  The title of paragraph (b) is amended to read as follows:

**§302.32 Collection and disbursement of support payments by the IV-D
agency.**

\* \* \* \* \*

\(b\) *Timeframes for disbursement of support payments.*

\* \* \* \* \*

b\. Paragraph (b)(1) is amended by removing "initial point" and
replacing it with "date";

c\. Paragraph (b)(2)(ii) is amended by removing \"initial receipt in the
State\" and replacing it with \"receipt by the SDU\";

d\. Paragraph (b)(2)(iii) is amended by removing \"initially received in
the State\" and replacing it with \"received by the SDU\"; and

e\. Paragraph (b)(3)(i) is amended by removing \"initial receipt in the
State\" and replacing it with \"receipt by the SDU\".

**[§302.35 \[Amended\]]{.underline}**

6\. In §302.35:

a\. Paragraph (c)(2) is amended by replacing \"an noncustodial parent\"
with \"a noncustodial parent and by replacing \"agency\" with \"agent\";
and

b\. Paragraph (c)(4) is amended by removing \", visitation\" and adding
\"or visitation\" after \"custody\".

**[§302.50 \[Amended\]]{.underline}**

7\. In §302.50:

a\. The table of contents is amended by changing the title of §302.50 to
read "Assignment of rights to support."

b\. The section title is revised to read as follows:

**§302.50 Assignment of rights to support.**

c\. Paragraph (b)(2) is amended by replacing \"; or\" at the end of the
paragraph with ".".

**[§302.51 \[Amended\]]{.underline}**

8\. In §302.51, paragraph (a)(3) is amended by replacing \"section
457(a)(2)(iv) of the Act\" with \"section 457(a)(2)(B)(iv) of the Act".

**[§302.54 \[Amended\]]{.underline}**

9\. In §302.54:

a.  In paragraph (a)(1), the citation \"paragraph (c)\" is removed and
    \"paragraph (b)\" is added in its place;

b.  In paragraph (b)(1)(ii), \"paragraph (b)(2)\" is removed and
    \"paragraph (a)\" is added in its place; and

c.  In paragraph (b)(2), \"(b)(1)\" is removed and \"(a)(1)\" is added
    in its place and \"(b)(2)\" is removed and \"(a)(2)\" is added in
    its place.

**[§302.65 \[Amended\]]{.underline}**

10\. In §302.65, paragraph (c)(7) is amended by removing \"critieria\"
and replacing it with \"criteria\".

**[§302.70 \[Amended\]]{.underline}**

11\. In §302.70:

a\. Paragraph (a)(4) is amended by removing \"§303.103

of this chapter\";

b\. Paragraph (a)(5)(ii) is amended by removing \"under §§232.40 through
232.49 of this title or 42 CFR 433.147\" and replacing it with \"under
section 454(29) of the Act\";

c\. Paragraph (a)(6) is amended by replacing \"an noncustodial parent\"
with \"a noncustodial parent\";

d\. Paragraph (a)(7) is amended by removing \"an noncustodial parent\"
and adding \"a noncustodial parent\" in its place, and by removing \",
in accordance with §303.105 of this chapter\";

e\. Paragraph (a)(8) is amended by removing \"wages\" and adding
\"income\" in its place;

f\. Paragraph (c) is amended by removing \"§§303.100 through 303.105 of
this chapter\" and adding \"§§303.100 through 303.102 and §303.104 of
this chapter\" in its place.

**[§302.75 \[Amended\]]{.underline}**

12\. In §302.75, paragraph (b)(6) is amended by removing \"§305.50\" and
adding \"§304.50\" in its place.

# **PART 303\--STANDARDS FOR PROGRAM OPERATIONS**

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

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

**[§303.7 \[Amended\]]{.underline}**

14\. In §303.7:

a\. Paragraph (b)(1) is revised to read as follows: \"Use its long arm
statute to establish paternity, when appropriate.\";

b\. Paragraph (b)(2) is amended by replacing \"wage\" with \"income\";

c\. Paragraph (c)(7)(ii) is amended by removing \"§§303.4 and 303.101 of
this part and §303.31 of this chapter\" and adding \"§§303.4, 303.31 and
303.101 of this part\" in its place;

d\. Paragraph (c)(7)(iii) is amended by removing \"§§303.6 and 303.100
through 303.102 and 303.104 of this part and §303.31 of this chapter\"
and adding \"§§303.6, 303.31, 303.100 through 303.102, and 303.104 of
this part\" in its place;

**[§303.8 \[Amended\]]{.underline}**

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

**§303.8 Review and adjustment of child support orders.**

\(a\) *Definition*. For purposes of this section, Parent includes any
custodial parent or noncustodial parent (or for purposes of requesting a
review, any other person or entity who may have standing to request an
adjustment to the child support order).

\(b\) *Required procedures*. Pursuant to section 466(a)(10) of the Act,
when providing services under this chapter:

\(1\) The State must have procedures under which, every 3 years (or such
shorter cycle as the State may determine), upon the request of either
parent, or, if there is an assignment under part A, upon the request of
the State agency under the State plan or of either parent, the State
shall with respect to a support order being enforced under this part,
taking into account the best interests of the child involved:

\(i\) Review and, if appropriate, adjust the order in accordance with
the guidelines established pursuant to section 467(a) of the Act if the
amount of the child support award under the order differs from the
amount that would be awarded in accordance with the guidelines;

\(ii\) Apply a cost-of-living adjustment to the order in accordance with
a formula developed by the State; or

\(iii\) Use automated methods (including automated comparisons with wage
or State income tax data) to identify orders eligible for review,
conduct the review, identify orders eligible for adjustment, and apply
the appropriate adjustment to the orders eligible for adjustment under
any threshold that may be established by the State.

\(2\) If the State elects to conduct the review under paragraph
(b)(1)(ii) or (iii), the State must have procedures which permit either
party to contest the adjustment, within 30 days after the date of the
notice of the adjustment, by making a request for review and, if
appropriate, adjustment of the order in accordance with the child
support guidelines established pursuant to section 467(a) of the Act.

\(3\) If the State conducts a guideline review under paragraph
(b)(1)(i):

\(i\) *Review* means an objective evaluation, conducted through a
proceeding before a court, quasi-judicial process, or administrative
body or agency, of information necessary for application of the State's
guidelines for support to determine:

\(A\) The appropriate support award amount; and

\(B\) The need to provide for the child's health care needs in the order
through health insurance coverage or other means.

\(ii\) *Adjustment* applies only to the child support provisions of the
order, and means:

\(A\) An upward or downward change in the amount of child support based
upon an application of State guidelines for setting and adjusting child
support awards; and/or

\(B\) Provision for the child's health care needs, through health
insurance coverage or other means.

\(4\) The State must have procedures which provide that any adjustment
under paragraph (b)(1)(i) shall be made without a requirement for proof
or showing of a change in circumstances.

\(5\) The State must have procedures under which, in the case of a
request for a review, and if appropriate, an adjustment outside the
3-year cycle (or such shorter cycle as the State may determine) under
paragraph (b)(1), the State shall review and, if the requesting party
demonstrates a substantial change in circumstances, adjust the order in
accordance with the guidelines established pursuant to section 467(a) of
the Act.

\(6\) The State must provide notice not less than once every 3 years to
the parents subject to the order informing the parents of their right to
request the State to review and, if appropriate, adjust the order
consistent with this section. The notice must specify the place and
manner in which the request should be made. The initial notice may be
included in the order.

\(c\) *Standard for adequate grounds*. The State may establish a
reasonable quantitative standard based upon either a fixed dollar amount
or percentage, or both, as a basis for determining whether an
inconsistency between the existent child support award amount and the
amount of support determined as a result of a review using automated
methods under paragraph (b)(1)(iii) is adequate grounds for petitioning
for adjustment of the order.

\(d\) *Health care needs must be adequate basis*. The need to provide
for the child\'s health care needs in the order, through health
insurance or other means, must be an adequate basis under State law to
initiate an adjustment of an order, regardless of whether an adjustment
in the amount of child support is necessary. In no event shall the
eligibility for or receipt of Medicaid be considered to meet the need to
provide for the child\'s health care needs in the order.

\(e\) *Timeframes for review and adjustment*. Within 180 calendar days
of receiving a request for a review or locating the non-requesting
parent, whichever occurs later, a State must: conduct a review of the
order and adjust the order or determine that the order should not be
adjusted, in accordance with this section.

\(f\) *Interstate review and adjustment*. (1) In interstate cases, the
State with legal authority to adjust the order must conduct the review
and adjust the order pursuant to this section.

\(2\) *Applicable laws and procedures*. The applicable laws and
procedures for review and adjustment of child support orders, including
the State guidelines for setting child support awards, established in
accordance with §302.56 of this chapter, are those of the State in which
the review and adjustment, or determination that there be no adjustment,
takes place.

**[§303.15 \[Amended\]]{.underline}**

16\. In §303.15:

a\. The section title is amended by adding \"or visitation\" after
\"custody\".

b\. Paragraph (a)(1)(i) is amended by replacing the period at the end
with a semicolon.

c\. Paragraph (a)(1)(ii) is amended by replacing \"visistation\" with
\"visitation\", and by adding "or" after ";".

**[§303.20 Amended\]]{.underline}**

17\. In §303.20:

a\. Paragraphs (c)(3), (4) and (5) are amended by removing \"an
noncustodial parent\" and adding \"a noncustodial parent\" in its place;
and

b\. Paragraph (e)(3) is amended by removing \"pursuant to parts 220, 222
and 226 of this title or carried out\".

**[§303.31 \[Amended\]]{.underline}**

18\. In §303.31, paragraph (a)(2) is amended by removing \"an
noncustodial parent\" and adding \"a noncustodial parent\" in its place.

**[§303.70 \[Amended\]]{.underline}**

19\. In §303.70:

a\. Paragraph (d)(1) is amended by inserting \"Federal or\" after \"in
accordance with section 453(a)(3) of the Act for enforcing a\"; and

b\. Paragraph (e)(1)(iii) is amended by removing \"453(k)\" and adding
\"453(k)(3)\" in its place.

**[§303.72 \[Amended\]]{.underline}**

20\. In §303.72:

a\. Paragraph (a)(3)(iv) is amended by removing \"an title IV-A\" and
adding \"a title IV-A\" in its place;

b\. Paragraphs (a)(6), (c)(2), (c)(4), (h)(5) and (h)(6)(i) are amended
by removing \"Secretary of the Treasury\" and adding \"Secretary of the
U.S. Treasury\" in its place;

c\. Paragraph (e)(1) and (f)(1) are amended by replacing \"an
noncustodial parent\" with \"a noncustodial parent\"; and

d\. Paragraph (h)(3) is amended by removing \"fSecretary of the U.S.
Treasuryt\".

**[§303.73 \[Amended\]]{.underline}**

21\. In §303.73, \"an noncustodial parent\" is replaced with \"a
noncustodial parent\" and \"IV7-D\" is replaced with \"IV-D\".

**[§303.100 \[Amended\]]{.underline}**

22\. In §303.100:

a\. Paragraphs (b)(1) and (e)(1)(v) are amended by replacing \"an
noncustodial parent\" with \"a noncustodial parent\";

b\. Paragraph (b)(1)(i) is amended by replacing \"absent\" with
\"noncustodial\" each time it appears;

c\. Paragraphs (e)(1)(i) and (g) are amended by removing \"wages\" and
adding \"income\" in its place;

d\. Paragraph (e)(2) is amended by removing \"wage\";

e\. Paragraphs (e)(2) and (e)(3) are amended by removing each occurrence
of \"15 calendar days\" and adding \"2 business days of the date the
State\'s computerized support enforcement system receives notice of
income and income source from a court, another State, an employer, the
Federal Parent Locator Service, or another source recognized by the
State, or the date information regarding a newly hired employee is
entered into the State Directory of New Hires, or if information is not
received by the State\'s computerized support enforcement system or its
State Directory of New Hires, within 15 calendar days\" in its place;

f\. Paragraph (e)(4) is amended by removing \"paragraph (f)(1) of this
section\" and adding \"paragraph (e)(1) of this section\" in its place;
and

g\. Adding new paragraphs (f)(4) and (5) to read as follows:

**§303.100 Procedures for income withholding.**

\* \* \* \* \*

\(f\) \* \* \*

\(4\) The withholding must be carried out in full compliance with all
procedural due process requirements of the State in which the
noncustodial parent is employed.

\(5\) Except with respect to when withholding must be implemented which
is controlled by the State where the support order was entered, the law
and procedures of the State in which the noncustodial parent is employed
shall apply.

\* \* \* \* \*

**[§303.101 \[Amended\]]{.underline}**

23\. Section 303.101(a) is amended by inserting a period after
\"*Definition*\".

**[§303.102 \[Amended\]]{.underline}**

24\. In §303.102:

> a\. Paragraph (a)(1) is amended by adding \"or\" following \"section
> 408(a)(3) of the Act\";

b\. Paragraph (c)(1) is amended by replacing \"an noncustodial parent\"
with \"a noncustodial parent\"; and

> c\. Paragraph (g)(1) is amended to read as follows:

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

\* \* \* \* \*

\(g\) *Distribution of collections*. (1) The State must distribute
collections received as a result of State income tax refund offset:

(i) In accordance with section 457 of the Act and §§302.51 and 302.52 of
    this chapter; and

\* \* \* \* \*

# **PART 304\--FEDERAL FINANCIAL PARTICIPATION**

25\. The authority citation for part 304 continues to read as follows:

Authority: 42 U.S.C. 651 through 655, 657, 1302, 1396a(a)(25),
1396b(d)(2), 1396b(o), 1396b(p), and 1396(k).

**[§304.20 \[Amended\]]{.underline}**

26\. In §304.20:

a\. Paragraph (b)(1)(iii)(C) is amended by adding \", and Indian Tribes
or Tribal organizations\" after \"officials\"; and

b\. Paragraph (b)(5)(iv) is amended by replacing \"an noncustodial
parent\" with \"a noncustodial parent\".

**[§304.26 \[Amended\]]{.underline}**

27\. Section 304.26(a) is amended to read as follows:

**§304.26 Determination of Federal share of collections.**

(a)(1) From the amounts of support collected by the State and retained
as reimbursement for title IV-A payments and foster care maintenance
payments under title IV-E, the State shall reimburse the Federal
government the Federal share of the support collections. In computing
the Federal share of support collections for assistance payments made
under titles IV-A and IV-E, the State shall use the Federal medical
assistance percentage in effect for the fiscal year in which the amount
is distributed. The Federal medical assistance percentage is:

\(i\) 75 percent for Puerto Rico, the Virgin Islands, Guam, and American
Samoa; and

\(ii\) As defined in section 1905(b) of the Act as in effect on
September 30, 1995, for any other State.

\* \* \* \* \*

**[§304.40 \[Amended\]]{.underline}**

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

# **PART 307-COMPUTERIZED SUPPORT ENFORCEMENT SYSTEMS**

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

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

**[§307.1 \[Amended\]]{.underline}**

30\. In paragraph (c), by replacing \"non-AFDC\" with \"non-IV-A\".

**[§307.10 \[Amended\]]{.underline}**

31\. In §307.10:

a\. In paragraph (b)(10), \"AFDC\" is replaced with \"IV-A\";

b\. In paragraph (b)(14)(ii), "ant" is replaced with "and"; and

c\. In paragraph (b)(14)(iii), "VI-D" is replaced with "IV-D".