Child Support Reserve Trust Act

Summary: Requires a State reserve unit to: (1) withhold the net proceeds from the sale or refinancing of real property in the State against which a lien for overdue child support by the seller or refinancer has arisen; (2) hold a certain amount of such proceeds (anticipated future child support) in trust for the benefit of the child or children for whom the person has a support obligation; and (3) apply such amounts to satisfy such overdue child support, if all other available remedies are insufficient to do so.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Child Support Reserve Trust Act''.

SEC. 2. STATE OBLIGATION TO PROVIDE CHILD SUPPORT RESERVE TRUST SYSTEM.

    Section 454 of the Social Security Act (42 U.S.C. 654) is amended--
            (1) in paragraph (32) by striking ``and'' at the end;
            (2) in paragraph (33) by striking the period at the end and 
        inserting ``; and''; and
            (3) by inserting after paragraph (33) the following new 
        paragraph:
            ``(34) provide that, on and after January 1, 2000, the 
        State agency will have in effect a State reserve trust system 
        that meets the requirements of section 454C.''.

SEC. 3. REQUIREMENTS OF CHILD SUPPORT RESERVE TRUST SYSTEM.

    The Social Security Act is amended by inserting after section 454B 
(42 U.S.C. 654b) the following new section:

``SEC. 454C. RESERVE TRUST SYSTEM.

    ``(a) In General.--In order for a State to meet the requirements of 
this section, the State must--
            ``(1) have in effect laws requiring the use of the 
        procedures described in subsection (b); and
            ``(2) establish and operate a unit (which shall be known as 
        the State reserve trust unit) that has authority to carry out, 
        and shall carry out, such laws and procedures.
    ``(b) Required procedures.--The procedures described in this 
subsection are procedures to carry out the following:
            ``(1) Withholding of anticipated future child support.--On 
        any sale or refinancing by a person of any real property in the 
        State against which a lien for amounts of overdue support owed 
        by the person has ever arisen, without regard to whether such 
        lien has ever been extinguished, the State reserve trust unit 
        shall--
                    ``(A) withhold the net proceeds of the person from 
                the sale or refinancing;
                    ``(B) apply the net proceeds withheld under 
                subparagraph (A) to any overdue support owed by the 
                person;
                    ``(C) determine the anticipated future child 
                support of the person;
                    ``(D) hold in trust, for the benefit of the child 
                or children for whom the person has a support 
                obligation, an amount equal to the lesser of--
                            ``(i) the anticipated future child support 
                        determined under subparagraph (C); and
                            ``(ii) the net proceeds withheld under 
                        subparagraph (A), as reduced by any application 
                        of such proceeds under subparagraph (B); and
                    ``(E) distribute to the person any amounts not held 
                in trust under subparagraph (D).
            ``(2) Application of amounts withheld to overdue child 
        support.--If a person owes overdue child support with respect 
        to a child, and the State reserve trust unit holds in trust 
        amounts withheld from the person for the benefit of the child, 
        the State reserve trust unit shall promptly apply such amounts 
        to satisfy such overdue child support, if the State reserve 
        trust unit determines that all other remedies available under 
        the laws of the State are insufficient to satisfy the overdue 
        child support.
            ``(3) Adjustment of amounts withheld.--If the State reserve 
        trust unit holds in trust amounts withheld from a person for 
        the benefit of a child, and the support obligation of the 
        person with respect to the child is adjusted under otherwise 
        available State procedures, the State reserve trust unit shall 
        promptly--
                    ``(A) redetermine the anticipated future child 
                support of the person with respect to the child; and
                    ``(B) if the amounts held in trust are less than 
                the anticipated future child support as redetermined 
                under subparagraph (A), distribute the difference to 
                the person.
            ``(4) Termination of trust.--If the State reserve trust 
        unit holds in trust amounts withheld from a person for the 
        benefit of a child, the State reserve trust unit shall 
        distribute the amounts to the person if--
                    ``(A) the person does not owe overdue child support 
                with respect to the child; and
                    ``(B) the support obligation of the person with 
                respect to the child has finally ceased.
    ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Anticipated future child support.--The term 
        `anticipated future child support' means the present value of 
        each child support payment that will come due under the support 
        obligation of the person, assuming that the support obligation 
        will finally cease solely because the child has attained an age 
        requiring the termination of the support obligation.
            ``(2) Finally cease.--The term `finally cease' means to 
        cease--
                    ``(A) because the person or the child has died;
                    ``(B) because the child has attained an age 
                requiring the termination of the support obligation;
                    ``(C) because the relationship of parent and child 
                has been terminated by a final judicial act, such as an 
                order establishing nonpaternity or an order 
                emancipating the child; or
                    ``(D) because of any other circumstance that 
                results in cessation under State law that is permanent, 
                substantial, and not solely a change in custody.''.