Vol. 79 Monday, 

No. 221 November 17, 2014 

Part III 

Department of Health and Human Services 

Centers for Medicare & Medicaid Services 

42 CFR Part 433 

Administration for Children and Families 

45 CFR Parts 301, 302, 303, et al. 

Flexibility, Efficiency, and Modernization in Child Support Enforcement 

Programs; Proposed Rule 


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68548 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 433 

[CMS–2343–P] 

RIN 0938–AR92 

Administration for Children and 

Families 

45 CFR Parts 301, 302, 303, 304, 305, 

307, 308, and 309 

RIN 0970–AC50 

Flexibility, Efficiency, and 

Modernization in Child Support 

Enforcement Programs 

AGENCY: Office of Child Support 

Enforcement (OCSE), Administration for 

Children and Families (ACF) and the 

Centers for Medicare & Medicaid 

Services (CMS), Department of Health 

and Human Services (HHS). 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: This NPRM is intended to 

carry out the President’s directives in 

Executive Order 13563: Improving 

Regulation and Regulatory Review. The 

NPRM proposes revisions to make Child 

Support Enforcement program 

operations and enforcement procedures 

more flexible, more effective, and more 

efficient by recognizing the strength of 

existing state enforcement programs, 

advancements in technology that can 

enable improved collection rates, and 

the move toward electronic 

communication and document 

management. This NPRM proposes to 

improve and simplify program 

operations, and remove outmoded 

limitations to program innovations to 

better serve families. In addition, 

changes are proposed to clarify and 

correct technical provisions in existing 

regulations. 

DATES: Consideration will be given to 

comments received by January 16, 2015. 

ADDRESSES: You may transmit written 

comments electronically via the Internet 

at http://www.regulations.gov. This 

approach is our preferred method for 

receiving comments. To download an 

electronic version of the rule, you may 

access http://www.regulations.gov and 

follow the provided instructions. 

Additionally, you may send 

comments via United States Postal 

Service to: Office of Child Support 

Enforcement, Administration for 

Children and Families, Department of 

Health and Human Services, Attention: 

Director, Division of Policy, Mail Stop: 

OCSE/DP, 370 L’Enfant Promenade SW., 

Washington, DC 20447. 

You also may send comments via 

overnight service to: Office of Child 

Support Enforcement, Administration 

for Children and Families, Department 

of Health and Human Services, 

Attention: Director, Policy Division, 

Mail Stop: OCSE/DP, 901 D Street SW., 

Washington, DC 20447. 

You also may submit comments by 

facsimile to (202) 260–5980. Comments 

will be available for public inspection. 

To schedule an appointment, please call 

(202) 401–9271. 

FOR FURTHER INFORMATION CONTACT: 

Anne Miller, Division of Policy, OCSE, 

telephone (202) 401–1467, email: 

anne.miller@acf.hhs.gov or Barbara 

Addison, Division of Policy, OCSE, 

telephone (202) 401–5742, email: 

barbara.addison@acf.hhs.gov. Deaf and 

hearing impaired individuals may call 

the Federal Dual Party Relay Service at 

1–800–877–8339 between 8 a.m. and 7 

p.m. Eastern Standard Time. 

SUPPLEMENTARY INFORMATION: 

Submission of Comments 

Comments should be specific, address 

issues raised by the proposed rule, 

propose alternatives where appropriate, 

explain reasons for any objections or 

recommended changes, and reference 

the specific action of the proposed rule 

that is being addressed. Additionally, 

we will be interested in comments that 

indicate agreement with changed or new 

proposals. We will not acknowledge 

receipt of the comments we receive. 

However, we will review and consider 

all comments that are germane and are 

received during the comment period. 

We will respond to these comments in 

the preamble to the Final Rule. 

Statutory Authority 

This NPRM is published under the 

authority granted to the Secretary of the 

Department of Health and Human 

Services by section 1102 of the Social 

Security Act (Act), 42 U.S.C. 1302. 

Section 1102 of the Act authorizes the 

Secretary to publish regulations, not 

inconsistent with the Act, which may be 

necessary for the efficient 

administration of the functions for 

which the Secretary is responsible 

under the Act. 

This proposed rule is published in 

accordance with the following sections 

of the Act: section 451 Appropriation, 

section 452 Duties of the Secretary, 

section 453 Federal Parent Locator 

Service, section 454 State Plan for Child 

and Spousal Support, section 454A 

Automated Data Processing, section 

454B Collection and Disbursement of 

Support Payments, section 455 Payment 

to States, section 456 Support 

Obligations, section 457 Distribution of 

Collected Support, section 458 Incentive 

Payments to States, section 459 Consent 

by the United States to Income 

Withholding, Garnishment, and Similar 

Proceedings for Enforcement of Child 

Support and Alimony Obligations, 

section 460 Civil Actions to Enforce 

Support Obligations, section 464 

Collection of Past-due Support From 

Federal Tax Refunds, section 466 

Requirement of Statutorily Prescribed 

Procedures to Improve Effectiveness of 

Child Support Enforcement, and section 

467 State Guidelines for Child Support 

Awards. 

Background 

The Child Support Enforcement 

program is intended to ensure that 

noncustodial parents provide financial 

support for their children. Child support 

payments play an important role in 

reducing child poverty, lifting 

approximately one million families out 

of poverty each year. In 2012, the Child 

Support Enforcement program collected 

$27.7 billion in support payments for 

the families in State and Tribal 

caseloads. During this same period, 82 

percent of the cases had support orders, 

and nearly 72 percent of cases with 

orders had at least some payments 

during the year. 

The proposed rule makes changes to 

strengthen the Child Support 

Enforcement program and update 

current practices in order to increase 

regular, on-time payments to families, 

increase the number of noncustodial 

parents working and supporting their 

children, and reduce the accumulation 

of unpaid child support arrears. These 

changes remove regulatory barriers to 

cost-effective approaches for improving 

enforcement consistent with the current 

knowledge and practices in the field, 

and informed by many successful stateled innovations. In addition, given that 

three-fourths of child support payments 

are collected by employers through 

income withholding, this proposed rule 

standardizes and streamlines payment 

processing so that employers are not 

unduly burdened by this otherwise 

highly effective support enforcement 

tool. The rule also removes outdated 

barriers to electronic communication 

and document management, updating 

existing child support regulations which 

frequently limit methods of storing or 

communicating information to a written 

or paper format. Finally, the proposed 

rule updates the program to reflect the 

recent Supreme Court decision in 


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Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 68549 

1Available at: http://www.whitehouse.gov/thepress-office/2011/01/18/improving-regulation-andregulatory-review-executive-order. Also, the OMB 

Memorandum related to Executive Order 13563 is 

available at: http://www.whitehouse.gov/sites/

default/files/omb/memoranda/2011/m11-10.pdf. 

2Available at: http://www.acf.hhs.gov/programs/

cse/pol/DCL/2011/dcl-11-07.htm. 

3Available at: https://www.federalregister.gov/

articles/2011/07/19/2011-18096/notice-of-meetingadministration-for-native-americans#p-8. 

4For a detailed description of these proposed 

changes, please see the Case Closure section. 

Turner v. Rogers, 564 U.S. l, 131 S Ct. 

2507 (2011). 

Executive Order 13563 directs 

agencies to increase retrospective 

analysis of existing rules to determine 

whether they should be modified, 

streamlined, expanded, or repealed so 

as to make the agency’s regulatory 

program more effective or less 

burdensome in achieving regulatory 

objectives.1 In response to Executive 

Order 13563, OCSE conducted a 

comprehensive review of existing 

regulations to improve program 

flexibility, efficiency, and 

responsiveness; promote technological 

and programmatic innovation; and 

update outmoded ways of doing 

business. Some of these regulations 

have not been updated in a generation. 

Proposed regulatory improvements 

include: (1) Procedures to promote 

program flexibility, efficiency, and 

modernization; (2) updates to account 

for advances in technology; and (3) 

technical corrections. 

Before drafting the proposed rules, 

OCSE consulted with States, Tribes, 

employers, and other stakeholders. The 

National Council of Child Support 

Directors voluntarily established a 

subcommittee that would provide OCSE 

with cost saving proposals. We also 

sought Tribal input in a formal fashion 

as discussed in the Tribal Impact 

Statement. 

These efforts helped OCSE to: Identify 

regulations where we could encourage 

noncustodial parents to assume more 

personal responsibility; increase State 

and employer flexibility to better serve 

families; improve program effectiveness, 

efficiency, and innovation; streamline 

intergovernmental case processing; 

improve customer service; and remove 

barriers identified by employers, States, 

and families that impede efficient and 

timely child support payments. We also 

identified obsolete and outmoded 

requirements and technical fixes that 

are needed. This proposed rule 

recognizes and incorporates policies 

and practices that reflect the progress 

and positive results that have resulted 

from successful program 

implementation by States and Tribes. 

The section-by-section discussion 

below provides greater detail on the 

provisions of the proposed rule. All 

references to regulations are related to 

45 CFR Part 300, except as specified in 

sections relating to the CMS regulations 

(42 CFR part 433). 

Effective Date and Potential Impact on 

State Law 

In this NPRM, some of the proposed 

regulatory provisions would require a 

State to submit revised State plan pages 

and/or enact new State laws. A State 

may meet these requirements through 

enactment of State law, regulations 

(including court rules), and/or 

procedures that ensure compliance with 

Federal law. In this NPRM, we 

specifically seek public comment on the 

actions a State will need to take to 

ensure compliance with the proposed 

provisions. We are especially interested 

in the steps necessary to implement 

proposed provisions in §§ 302.32, 

302.38, 302.56, 303.6, 303.8, 303.11, and 

303.100. 

In addition, we seek public comment 

on the amount of time a State will need 

to take these actions and to implement 

the proposed provisions in this NPRM. 

We request comment on whether a 

general effective date of one year after 

publication of the final rule will be 

sufficient, for most changes, with the 

exception of § 302.56(a), where we have 

proposed that a State meet the 

guidelines requirements within one year 

after completion of the State’s next 

quadrennial review of its guidelines. 

When new State plan requirements 

were enacted in the past, and additional 

State legislation was required, in order 

for the State’s Title IV–D plan to remain 

in compliance, Congress provided that 

the State must enact the needed 

legislation by the first day of the second 

calendar quarter beginning after the 

close of the first regular session of the 

State legislature that begins after the 

effective date of the regulation. If the 

State had a 2-year legislative session, 

each year of the session was considered 

a separate regular session of the State 

legislature. We are inviting comments 

concerning which of the proposed 

changes in this NPRM may require State 

legislation and may warrant a similar 

delay in the effective date. 

Tribal Impact Statement 

In this NPRM, OCSE proposes to 

update existing State case closure rules 

in order to deliver more efficient child 

support services to families. There were 

no Tribal IV–D programs when case 

closure regulations were initially 

written in 1989. Today there are over 50 

fully operational Tribal IV–D programs. 

Because our proposed updates could 

have an impact on these programs, we 

invited Tribal leaders to engage in 

written consultation via a ‘‘Dear Tribal 

Leader Letter,’’ dated April 28, 2011. We 

specifically sought comments on how 

we could encourage efficient case 

transfer between a State and a Tribal IV– 

D program.2

In addition to written consultation, 

we engaged in a face-to-face 

consultation with Tribal leaders at the 

ACF Tribal Consultation Session on 

August 18, 2011 and March 6, 2012. We 

also invited Tribal leaders to participate 

in an additional day of consultation and 

dialogue, on August 19, 2011, to address 

any issues specific to Tribal child 

support.3 Finally, in 2011, OCSE met 

with Tribal IV–D directors, on January 

12–13, 2011, February 23–24, 2011, and 

March 10–11, 2011, to discuss Medicaid 

reimbursement cases that involve 

enrolled Tribal members or those 

otherwise eligible for enrollment. Our 

efforts to engage Tribal leaders 

throughout this NPRM process proved 

to be beneficial. Tribal leaders provided 

valuable comments that helped us 

formulate proposed regulatory 

language.4

We would like to emphasize that case 

closure regulations proposed in this 

NPRM are only applicable to State IV– 

D agencies. However, during tribal 

consultation held previously, we 

consulted with tribes regarding a 

proposal to all State child support 

agencies to close a case when the case 

is opened due solely to a Medicaid 

referral for medical support enforcement 

of a case involving an IHS-eligible child. 

We encourage all interested parties, 

including Tribes, to provide comments 

regarding this portion of the regulations 

during the public comment period. We 

will review and consider all comments, 

before we issue a final rule. 

In addition to updating case closure 

regulations, we propose several 

technical corrections to existing Tribal 

regulations. These proposed corrections 

should have little to no impact on Tribal 

IV–D programs. 

Section-by-Section Discussion of the 

Provisions of This Proposed Rule 

This NPRM proposes: (1) Procedures 

to promote program flexibility, 

efficiency, and modernization; (2) 

updates to account for advances in 

technology; and (3) technical 

corrections. The following is a 

discussion of all the regulatory 

provisions included in this NPRM. 

Please note the provisions are discussed 

in order by category. Because this is a 

lengthy NPRM, we present the proposed 

revisions in these three categories to 


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68550 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 

5For further information, see AT–98–08, Policy 

Questions and Responses Regarding the State Case 

Registry and the Federal Case Registry of Child 

Support Orders under sections 453(h) and 454A(e) 

of the Social Security Act, available at: http://

www.acf.hhs.gov/programs/cse/pol/AT/1998/at9808.htm. 

assist the reader in understanding the 

major concepts and rationale for the 

changes. 

Topic 1: Procedures To Promote 

Program Flexibility, Efficiency and 

Modernization (§§ 302.32; 302.33; 

302.38; 302.56; 302.70; 302.76; 303.3; 

303.6; 303.8; 303.11; 303.31; 303.72; 

303.100; 304.20; 304.23; and 307.11) 

Section 302.32: Collection and 

Disbursement of Support Payments by 

the IV–D Agency 

The Personal Responsibility and Work 

Opportunity Reconciliation Act of 1996 

(PRWORA) (Pub. L. 104–193) 

centralized payment processing through 

the creation of State Disbursement Units 

(SDUs) and standardized income 

withholding provisions by requiring use 

of a uniform income withholding form. 

In the 1990s and 2000s, OCSE and State 

child support agencies partnered closely 

with employer and payroll 

organizations to implement the 1996 

reforms. These collaborative efforts have 

been instrumental in streamlining the 

process for employers and ensuring that 

children receive billions of dollars in 

child support annually. Currently, over 

two-thirds of child support payments 

($23 billion dollars in FY 2012) are 

collected by employers through income 

withholding, an enforcement tool which 

is, by far, the most effective remedy for 

ensuring that noncustodial parents are 

held accountable. While the overall 

framework for the processing and 

disbursing of child support payments is 

sound, the proposed rule addresses four 

ongoing concerns raised by employers, 

families, and States that hinder efficient 

income withholding and payment 

disbursement procedures: (1) State 

processing of income withholding 

payments on non-IV–D orders through 

the SDU; (2) SDU disbursement of child 

support payments directly to the family; 

(3) use of the Income Withholding for 

Support form; and (4) transmission of 

income withholding payments directly 

to the appropriate SDU. 

Section 302.32 describes requirements 

for State IV–D agencies regarding the 

collection and disbursement of support 

payments. In its current form, this 

section provides narrow guidance on 

specific disbursement timeframes for 

IV–D cases and clarifies that, with 

respect to a case where the family is 

receiving TANF and has assigned rights 

to child support, payments must go to 

the SDU and not directly to the family. 

A challenge for employers processing 

income withholding payments for child 

support is the interaction with SDUs, 

specifically in regard to payments on 

non-IV–D cases. An SDU is a State 

payment processing unit that receives 

and disburses payments collected on 

child support orders in both IV–D and 

non-IV–D cases. Employers are required 

by law to send all income withholding 

payments to the SDU designated on the 

OMB-approved Income Withholding for 

Support form. The State must receive 

the payments, determine the 

distribution of funds using their 

statewide automated system, and 

disburse the funds through the SDU to 

the appropriate payee. While this 

payment process is largely automatic 

and seamless, particularly with 

payments on IV–D cases, some 

employers have encountered problems 

when sending payments to SDUs in a 

few States on non-IV–D cases. 

Federal law requires SDUs to collect 

and disburse payments under orders in 

both IV–D cases and in non-IV–D cases 

in which the support order was initially 

issued on or after January 1, 1994, and 

the income of the noncustodial parent is 

subject to withholding pursuant to 

section 466(a)(8)(B) of the Act. In order 

to process these non-IV–D income 

withholding payments, SDUs must have 

access to basic information about the 

non-IV–D orders. To this end, section 

454A(e) of the Act requires each State to 

maintain or have access to information 

about non-IV–D orders in its State Case 

Registry (SCR), which is a part of its 

statewide automated system. The SCR 

contains records on IV–D cases and on 

non-IV–D orders established or 

modified in the State on or after October 

1, 1998. The State then uses the 

information on non-IV–D orders to 

identify any incoming non-IV–D 

payments and to handle their 

disbursement through the SDU. Data in 

the SCR, as part of the State’s automated 

system, must be used to facilitate the 

collection and disbursement of child 

support payments through the SDU.5

Despite these statutory requirements 

to process non-IV–D income 

withholding payments automatically, 

employers have complained that a small 

number of States are not in compliance 

with these requirements and that some 

SDUs do not maintain information 

about non-IV–D orders prior to the 

employer sending payment to the SDU. 

In such cases, upon receipt of non-IV– 

D income withholding payments from 

employers, these States are contacting 

employers and custodial parents asking 

for additional information, forms, or 

documents before they process a 

payment on non-IV–D orders, increasing 

the burden on employers and families. 

In some instances, a few States are 

refusing to process the non-IV–D 

income withholding payments and 

returning the funds to employers. These 

returned or delayed payments result in 

confusion, customer service complaints, 

and added expense and paperwork for 

the employer. This practice also 

adversely impacts noncustodial parents 

trying to meet their financial obligations 

and ultimately delays child support 

from reaching families. 

Because States have some latitude in 

how they meet the requirements for 

managing their IV–D programs and 

structuring their statewide automated 

systems, the reasons States have trouble 

processing non-IV–D payments are 

likely to be diverse. In some situations, 

the problems may be traced to a State 

not fulfilling their responsibility for 

processing non-IV–D payments, while 

in others it may be associated with data 

processing procedures or certain 

characteristics of their statewide 

automated systems. For example, the 

problem may be related to: Challenges 

in the automated computer interface 

between State agencies and courts; 

delays in the original transfer of non-IV– 

D order information from the courts to 

the SCR; the sharing of non-IV–D order 

data between the SCR and the SDU; or 

the number and type of non-IV–D data 

elements in the SCR. 

To address employer problems with 

States not processing payments on nonIV–D orders through their SDUs, we 

propose to set forth in § 302.32 the basic 

requirements for SDUs, as stated in 

section 454B of the Act. Specifically, we 

propose revising § 302.32(a) with 

language similar to section 454B(1) of 

the Act to describe the State’s 

responsibility to establish and operate a 

SDU. Under proposed paragraph (a), a 

IV–D agency must establish and operate 

a SDU for the collection and 

disbursement of payments under 

support orders in all cases enforced 

under the title IV–D plan and in all 

cases not being enforced under the IV– 

D plan in which the support order is 

initially issued in the State on or after 

January 1, 1994, and in which the 

income of the noncustodial parent is 

subject to withholding pursuant to 

section 466(a)(8)(B) of the Act. We 

propose a conforming change by 

deleting the existing language in 

paragraph (a). The existing paragraph (a) 

is a holdover regulatory provision from 

the Aid to Families with Dependent 

Children Program and addresses child 

support payments which are collected 

for a recipient of assistance under the 


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Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 68551 

6For further information, see AT–97–13, 

Collection and Disbursement of Support Payments, 

available at: http://www.acf.hhs.gov/programs/cse/

pol/AT/1997/at-9713.htm. 7Available at: http://www.acf.hhs.gov/programs/

cse/pol/PIQ/2010/piq-10-01.htm. 

State’s title IV–A plan. This language is 

no longer needed because it is 

subsumed under the new proposed 

paragraph (a) which states that 

payments in all IV–D cases must be 

made to the SDU. 

In the past, OCSE refrained from 

regulating SDU requirements because 

we considered the statute to be selfimplementing. We noted that we would 

reconsider this position if a need arose.6

Because of the problems with non-IV–D 

payment processing, we believe that 

rules are needed. The regulatory 

approach we are proposing is predicated 

on the belief that States are returning or 

delaying non-IV–D payments for diverse 

reasons. Therefore, we believe a 

regulatory approach that is more general 

and less prescriptive is appropriate. 

While our aim is to dispel any 

confusion over the requirements, this 

approach will allow States flexibility to 

identify and remove the barriers to nonIV–D payment processing as they might 

occur uniquely in each State. We note, 

however, that there is no Federal 

statutory authority for States to require 

custodial parents or employers to 

provide information and data on nonIV–D orders as a condition to process 

these payments. We especially are 

interested in hearing from States and the 

public whether the general approach in 

the regulations will effectively address 

the problems with SDU payment 

processing on non-IV–D orders, and if 

there are additional problematic issues 

regarding SDU payment processing this 

rulemaking can or should address. 

As a final note on this proposal, over 

the years States have raised the question 

of whether FFP is available for activities 

in non-IV–D cases. In 2010 OCSE issued 

PIQ–10–01, ‘‘Federal Financial 

Participation and non-IV–D activities,’’ 7

to expand on earlier SDU policy issued 

in Action Transmittal, AT–97–13, 

‘‘Collection and Disbursement of 

Support Payments.’’ PIQ–10–01 states 

that FFP is available for the non-IV–D 

case data requirements and payment 

processing required by the Social 

Security Act. In general, FFP is available 

for the submission and maintenance of 

data in the SCR with respect to non-IV– 

D support orders established or 

modified on or after October 1, 1998; the 

receipt and disbursement of collections 

through income withholding for child 

support orders initially issued in the 

State on or after January 1, 1994; and the 

required reporting to OCSE of non-IV– 

D financial and statistical information. 

See OCSE–PIQ–10–01 for more 

information. We believe the clarification 

of FFP availability will mitigate States’ 

cost concerns related to this proposed 

provision. 

Section 302.33: Services to Individuals 

Not Receiving Title IV–A Assistance 

Current § 302.33(a)(4) requires that 

whenever a family is no longer eligible 

for assistance under a State’s TANF, 

foster care, and/or Medicaid programs, 

the IV–D agency must notify the family, 

within 5 working days of the 

notification of ineligibility, that child 

support services will continue, without 

application, unless the family notifies 

the agency to the contrary. In certain 

situations, we believe that automatic 

continuation of child support services 

can be inappropriate for the family, 

such as once a child has been reunified 

with the family or the child has aged out 

of foster care. Therefore, based on a 

request from a joint child support/child 

welfare workgroup, we propose an 

efficiency change in § 302.33(a)(4). 

We propose to eliminate ‘‘title IV–E 

foster care’’ from the first sentence in 

§ 302.33(a)(4) and to add to that 

provision stating that the requirement to 

notify the family within 5 working days 

that services will be continued, unless 

the family notifies the IV–D agency to 

the contrary, also applies when a child 

is no longer eligible for IV–E foster care, 

but only in those cases that the IV–D 

agency determines that such services 

and notice would be appropriate. This 

proposed revision provides State IV–D 

agencies with additional flexibility to 

determine whether notice to a family in 

which a child no longer receives foster 

care maintenance payments is 

appropriate and whether to close the 

case. We believe that these revisions 

will simplify the notification process in 

post-foster care cases, recognizing that 

continued child support enforcement 

may be inappropriate, for example, once 

foster care cases are closed due to family 

reunification or when children age out 

of foster care. However, existing 

arrearages in these IV–D referral cases 

would remain an obligation owed to the 

State and collectible under all 

applicable State laws and processes 

pursuant to section 456 of the Act and 

45 CFR 302.50(c). 

At the request of States, we propose 

to provide each State the option to elect 

in its State plan to allow an individual 

parent who files an application the 

flexibility to select child support 

services from a menu of service options 

to better meet the needs of the families. 

Currently, a parent who applies for 

services has to accept the full range of 

services. 

We propose to add a new paragraph 

(a)(6) that indicates that the State would 

elect in its State plan whether or not it 

provides applicants under subparagraph 

(a)(1)(i) the option to request limited 

services. This rule provides the State 

with authority to allow either the 

custodial or the noncustodial parent to 

request specific child support services 

tailored to the family’s circumstances. 

In addition, we believe that limited 

services will result in increased 

customer satisfaction; help fathers 

assume more personal responsibility; 

help to make enforcement services more 

successful and efficient; and respond to 

families’ needs. We believe that this will 

give States increased flexibility to be 

responsive to the family. 

Under this proposal, for example, a 

State could elect to allow an applicant 

for services to request paternity 

establishment services only. Based on 

the State’s procedures, if an unwed 

mother lived with the biological father 

of a child, he could request paternity 

establishment services only. Having 

paternity legally established may 

provide the biological father a sense of 

personal responsibility for the child. 

This would benefit the unwed parents 

since genetic testing could be done at a 

reduced rate, and would benefit the 

child if paternity is established by 

clarifying birth records and establishing 

possible eligibility for dependents’ 

benefits. Additionally, if the parents 

separate in the future, it would be easier 

for the State child support agency to 

establish and enforce a support 

obligation. In the Child Support 

Enforcement program, this menu of 

service options is called ‘‘limited 

services.’’ The child support community 

has discussed this approach for many 

years as a positive strategy to tailor 

services to serve families. 

If the State chooses this option, it 

would be required to define how this 

process would be implemented and 

establish and use procedures that would 

specify what limited services are 

allowed and under what circumstances. 

Additionally, the State’s procedures 

would require that a limited services 

applicant requesting enforcement 

services must receive all appropriate 

mandatory enforcement services, such 

as the Federal Tax Refund Offset, 

income withholding, and credit bureau 

reporting. This provision also states that 

an application would be considered 

full-service unless the parent 

specifically applies for limited services 

in accordance with the State’s 

procedures, and if one parent 

specifically requests limited services 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
68552 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 

8These practices are described in various 

consumer complaints and letters to State consumer 

agencies, as well as in GAO report, Child Support 

Enforcement—Clear Guidance Would Help Ensure 

Proper Access to Information and Use of Wage 

Withholding by Private Firms, GAO–02–349 (2002), 

available at: http://www.gao.gov/new.items/

d02349.pdf. 

9 Mabe v. G.C. Services Limited Partnership, 32 F. 

3d 86 (4th Cir. 1994), available at: http://

scholar.google.com/scholar_

case?case=16399759672854246032&

q=Mabe+v.+G.C.+Services+Ltd.+Partnership&

hl=en&as_sdt=2,9&as_vis=1. 

and the other parent requests full 

services, the case will automatically 

receive full services. Also, for all limited 

service applicants, the State would be 

required to charge the application and 

service fees required under paragraphs 

(c) and (e) of the section, and may 

recover costs in accordance with 

paragraph (d) of this section if the State 

has chosen this option in its State plan. 

Finally, the State must also include 

information in its application form on 

the range of available services, 

consequences of selecting a limited 

service, and an explanation that the case 

will be closed when the limited service 

is completed. 

Before a State chooses to implement 

these new criteria, it would need to 

ensure that its automated system can be 

easily modified so that it can effectively 

manage its caseloads regarding what 

services are requested. Also, if a State 

provides this option, the State would 

have flexibility on how it implements 

these proposed changes. The State must 

ensure that these changes are made in 

a consistent manner in accordance with 

its State plan. The State could also 

choose to implement this option for one 

or two services, and expand this as it 

gains experience in implementing these 

changes. 

We believe that as States modernize 

their statewide automated systems, this 

option will be easier for States to 

implement and to manage in their 

caseloads, and at the same time will 

provide them additional flexibility to 

provide child support services that meet 

the needs of families. We expect limited 

services can be a cost-effective way to 

provide efficient and targeted services 

while avoiding expenditures on 

unnecessary and unproductive services. 

Also, the State must ensure that an 

application is received from the 

applicant documenting what limited 

services are being requested. Regarding 

the fees for a limited-services 

application, the State may choose to 

charge the same fees as a full-service 

application. However, the fees must be 

charged in accordance with paragraphs 

(c) and (e) of this section, and if the 

State chooses to recover costs, it must be 

done in accordance with paragraph (d) 

of this section. 

Finally, we are cognizant of the risk 

of domestic violence in the general 

operation of the child support program, 

and in particular as related to this 

proposed limited services provision. 

The child support program has required 

domestic violence safeguards in 

§ 303.21(e) and we will continue to 

work with States and advocates to 

ensure that best practices are in place to 

safeguard the affected parties. OCSE 

also has a major domestic violence 

initiative underway to identify and 

promote effective practices to support 

families. We invite comments on 

whether there are additional domestic 

violence safeguards that should be put 

in place with respect to the limited 

services options. 

Section 302.38: Payments to the Family 

This proposed rule addresses 

concerns raised by States and families 

about the difficulties that families 

encounter when child support payments 

are disbursed directly to private 

collection agencies, bypassing the 

custodial families to whom the money 

is owed. Unlike private firms that 

contract with State child support 

agencies, private collection agencies 

contract directly with custodial parents 

for the collection of child support and 

are not affiliated with the State IV–D 

program. While earlier OCSE policy 

guidance did not preclude State IV–D 

programs from disbursing child support 

collections to private collection agencies 

if requested by the custodial parentpayee, OCSE now believes that 

disbursement of child support 

collections from SDUs to private 

collection agencies instead of directly to 

families puts the government in the role 

of indirectly enforcing private contracts 

and is not in the best interests of 

families and children. 

Numerous consumer complaints and 

litigation have highlighted the 

questionable practices of many private 

collection agencies. These practices 

include deceptive advertising; perpetual 

service contracts that require direct 

payment to the company and prohibit 

cancellation; falsely representing the 

business as a government office; using 

official-looking documents to pressure 

employers to redirect support withheld 

from employees’ paychecks; demanding 

payments from grandparents; 

demanding payments that are not owed 

from noncustodial parents; and other 

allegedly deceptive and abusive tactics.8

OCSE’s intent is not to regulate private 

collection agencies, but rather to ensure 

that child support programs are not 

facilitating, and the taxpayer is not 

subsidizing, the sometimes 

inappropriate business practices of 

private collection agencies not under 

contract to States. In order to provide 

protections for families and fulfill the 

intent of the founding child support 

legislation and subsequent policy, we 

propose that child support payments 

owed and payable to families be 

disbursed directly, and only, to families. 

Such private collection agencies enter 

into contracts with custodial parents to 

collect child support, but are not subject 

to the same contractual or regulatory 

oversight as State IV–D agencies and 

other private firms that have contracts 

with States to carry out public child 

support functions. Many states contract 

with private firms to provide various 

child support services. These private 

firms act on behalf of the State IV–D 

agency and must comply with the same 

statutes and regulations as the State IV– 

D program. Moreover, the Federal Trade 

Commission has determined that child 

support private collection agencies are 

not subject to the Fair Debt Collection 

Practices Act, 15 U.S.C. 1692–1692p, 

administered by the Federal Trade 

Commission because child support debt 

is not considered consumer debt.9

Since the Child Support Enforcement 

program was created over 30 years ago, 

the statutory framework for payment 

processing imposed on States the 

requirement that collections owed to the 

family should be paid to the family. 

Section 457 of the Act, Distribution of 

Collected Support, requires the State to 

track and distribute payments, and 

clearly indicates that money owed to the 

family is paid to the family, unless the 

family received TANF assistance and 

has assigned its rights to support to the 

State as reimbursement. In accordance 

with section 457 of the Act, the portion 

of the support owed to the family must 

be distributed ‘‘to the family’’ and not 

to any other party. 

Section 454(11)(B) of the Act 

reinforces the requirement that 

payments are made to families. 

According to this provision, States must 

provide in their State child support 

enforcement plans that any payments 

required to be made to a family 

pursuant to section 457 must be made 

to ‘‘the resident parent, legal guardian, 

or caretaker relative having custody of 

or responsibility for the child or 

children’’ (emphasis added). The law is 

clear that payments due to families are 

to be disbursed from SDUs to the 

individual with responsibility to protect 

and further the child’s best interests. 

On December 29, 2010, ACF 

published final regulations in the 

Federal Register (75 FR 81894) for 


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10The 2010 Safeguarding final rule is available at: 

http://www.acf.hhs.gov/programs/cse/pol/AT/2010/

at-10-12.htm. 

11For further information, see Public Law No. 

109–171, Title VII, Subtitle C, Section 7301 (2006), 

available at: http://www.gpo.gov/fdsys/pkg/PLAW109publ171/pdf/PLAW-109publ171.pdf. 

12For further information, see OCSE’s FY 2012 

Preliminary Report, Table P–1 available at: http:// 

www.acf.hhs.gov/programs/css/resource/fy2012- 

preliminary-report-table-p-1. The figure was 

calculated by adding total payments to families, 

medical support, and the amount passed through to 

families for a total of $26.1 billion distributed to 

families. This figure represents 94.2 percent of total 

collections in the amount of $27.7 billion. 

13For further information, see Carl Formoso, 

Child Support Enforcement: Net Impacts on Work 

and Welfare Outcomes pre- & post-PRWORA, 

Washington State Division of Child Support (2000), 

available at: http://www.dshs.wa.gov/pdf/esa/dcs/

reports/csepolicybrief.pdf. 

Safeguarding Child Support Information 

(Safeguarding rule) by distinguishing 

between individuals who have a legal 

and fiduciary obligation to protect a 

child’s best interests and those who do 

not.10 Specifically, the Safeguarding 

rule clarified that each of the categories 

of individuals authorized to receive 

child support information under section 

453(c)(3) of the Act, has ‘‘a relationship 

with the child that imposes an intrinsic 

responsibility to assure protection of the 

child’s welfare and interests.’’ The rule 

excludes those ‘‘with a pecuniary 

interest of their own that may be 

inconsistent with the child’s best 

interests’’ from receiving confidential 

information contained in the Federal 

and State Parent Locator Service. 

According to the standard set in the 

Safeguarding rule, therefore, private 

collection agencies, with their financial 

self-interest and no fiduciary duty to 

serve the children’s best interests, are 

not authorized to receive protected 

child support information. 

Because the categories of individuals 

authorized to receive information, as 

listed in section 453(c)(3) of the Act 

(‘‘the resident parent, legal guardian, 

attorney, or agent of the child’’), 

significantly overlap with the entities 

authorized to receive payment 

disbursement in section 454(11)(B) of 

the Act (‘‘the resident parent, legal 

guardian, or caretaker relative having 

custody of or responsibility for the child 

or children’’), the definitions used in the 

Safeguarding regulation are directly 

analogous to the discussion in this 

proposed rule. 

The Safeguarding rule notes that a 

‘‘resident parent’’ lives with the child 

and provides the child’s day-to-day 

care. Further, an individual who has 

been appointed by court order as a 

child’s ‘‘legal guardian’’ is legally 

responsible for the child’s care and has 

a legal obligation to act in the child’s 

best interest. The Safeguarding rule 

further notes that a ‘‘caretaker relative’’ 

is a longstanding term used in the TANF 

program and its predecessor program, 

Aid to Families with Dependent 

Children (AFDC), to refer to those 

relatives responsible for the day-to-day 

care of children and who are eligible to 

apply for cash assistance for needy 

families, regardless of the existence of a 

legal custody order or legal 

guardianship status. 

Each of these individuals has a 

relationship with the child that imposes 

responsibility to assure protection of the 

child’s welfare, while private collection 

agencies historically do not, even if 

those companies employ attorneys. 

Therefore, consistent with the specific 

statutory descriptions of authorized 

individuals, as well as the general 

standards set forth in the Safeguarding 

rule, this proposed rule would require 

that any payments made under 

§§ 302.32 and 302.51 would be made 

directly to the resident parent, legal 

guardian, or caretaker relative and not to 

a private collection agency with a 

contractual agreement with the family. 

The primary goal of the Child Support 

Enforcement program is to ensure that 

families benefit directly from child 

support payments. This family-first 

perspective is intended to ensure 

families’ self-sufficiency and strengthen 

parents’ commitment to supporting their 

children. On the one hand, this 

approach is a shift from child support’s 

earlier focus on welfare reimbursement 

and cost recovery for Federal and State 

governments; on the other hand, it is 

consistent with the original principle 

that payments due to families who 

never received welfare are disbursed to 

families directly. Congress affirmed 

these family-first principles when it 

passed the Deficit Reduction Act of 

2005 (DRA). Known as ‘‘family first 

distribution,’’ the purpose of section 

7301(b) of the DRA is, ‘‘Increasing child 

support payments to families and 

simplifying child support distribution 

rules’’.11 Section 7301 of the DRA 

modified the rules of distribution and 

assignment of section 457 of the Act, 

and provided a set of options for States 

which, if adopted, would result in 100 

percent of payments to families who are 

receiving or have received welfare 

assistance. The DRA’s family-first 

approach clearly discourages redirecting 

payments to any individuals or entities 

other than families. In 2012, more than 

94 percent of child support collected by 

the IV–D program was paid to 

families.12

In sum, based on the intent of the 

original child support legislation and 

the more recent ‘‘family-first’’ policies, 

we propose to revise § 302.38, 

‘‘Payments to the family,’’ by inserting 

the word ‘‘directly’’ before the phrase 

‘‘to the resident parent, legal guardian, 

or caretaker relative.’’ This proposed 

change will address concerns regarding 

disbursement of payments directly to 

the family. The purpose is to require 

SDUs to disburse child support 

payments directly to the intended 

beneficiary and not to divert those 

payments to another entity such as a 

private collection agency or other 

creditor of the custodial parent. The 

proposed change does not preclude a 

custodial parent from entering into a 

contractual relationship with a private 

collection agency for the collection of 

child support. Also, the proposed 

change is not intended to affect or 

change a State’s current practices 

regarding electronic disbursements of 

child support payments. Disbursement 

of a child support payment to a 

custodial parent’s bank account is a 

direct payment to the family. In 

addition, please note that this provision 

applies to payments that are due to the 

family; this provision does not preclude 

a State from sending payments for 

distribution and disbursement to 

initiating agencies on intergovernmental 

actions. We ask specifically for 

comments on whether the proposed 

regulations will affect State laws that 

permit the child support payment to be 

sent to other individuals/entities, such 

as a conservator or private attorney 

representing the custodial parent and 

child, with a legal and fiduciary duty to 

act in the child’s best interest. 

Section 302.56: Guidelines for Setting 

Child Support Awards 

We also propose to update Federal 

regulations in § 302.56 that address 

State guidelines for setting child 

support awards. A number of these 

proposed changes are intended to 

ensure that parents meet their child 

support obligations and to assist States 

in complying with the U.S. Supreme 

Court decision in Turner v. Rogers, 564 

U.S. ___, 131 S Ct. 2507 (2011). 

Consistent child support payments can 

help custodial families achieve 

economic stability, which is especially 

important to the millions of low- and 

moderate-income families served by the 

Child Support Enforcement program.13

However, basic fairness requires that 

child support obligations reflect an 

obligor’s actual ability to pay them. 

A growing body of research finds that 

compliance with child support orders in 

some States, regardless of income level, 

declines when the support obligation is 


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14Mark Takayesu, How Do Child Support Order 

Amounts Affect Payments and Compliance? Orange 

County, CA Department of Child Support Services, 

(Oct. 2011), available at: http://

ncsea.omnibooksonline.com/2012policyforum/

data/papers/PV_1.pdf#page=1; and Carl Formoso, 

Determining the Composition and Collectability of 

Child Support Arrearages, Volume 1: The 

Longitudinal Analysis (2003), available at: http://

www.dshs.wa.gov/pdf/esa/dcs/reports/

cvol1prn.pdf. See also HHS Office of Inspector 

General report, The Establishment of Child Support 

Orders for Low Income Non-custodial Parents, OEI– 

05–99–00390, (2000), available at: http://

oig.hhs.gov/oei/reports/oei-05–99–00390.pdf. 

15For further information, see Elaine Sorensen, 

Liliana Sousa, and Simon Schaner’s report, 

Assessing Child Support Arrears in Nine Large 

States and the Nation (2007), available at: http://

aspe.hhs.gov/hsp/07/assessing-CS-debt/. 

16For further information, see Carolyn J. 

Heinrich, Brett C. Burkhardt, and Hilary M. Shager, 

Reducing Child Support Debt and Its Consequences: 

Can Forgiveness Benefit All? (2010), available at: 

http://www.irp.wisc.edu/research/childsup/

cspolicy/pdfs/2007–09/FamiliesForward_3_19_

10.pdf; Maria Cancian, Carolyn Heinrich, and 

Yiyoon Chung, Does Debt Discourage Employment 

and Payment of Child Support? (2009), available at: 

http://www.irp.wisc.edu/publications/dps/pdfs/

dp136609.pdf; and Harry Holzer, Paul Offner, and 

Elaine Sorensen, Declining Employment Among 

Young Black Less-Educated Men: The Role Of 

Incarceration and Child Support (2004), available 

at: http://www.urban.org/uploadedpdf/411035_

declining_employment.pdf. 

17For further information, see Carmen SolomonFears, Gene Falk, and Adrienne L. FernandesAlcantara, Child Well-Being and Noncustodial 

Fathers (2013), Congressional Research Service. See 

also Amanda Geller, Irwin Garfinkel, and Bruce 

Western. The Effects of Incarceration on 

Employment and Wages: An Analysis of the Fragile 

Families Survey (2006), Center for Research on 

Child Wellbeing. Working Paper # 2006–01–FF. 

available at: http://www.saferfoundation.org/files/

documents/Princeton-Effect%20of%20

Incarceration%20on%20Employment%20and%20

Wages.pdf. Also, the Report of the Re-Entry Policy 

Council, Charting the Safe and Successful Return 

of Prisoners to the Community, Council of State 

Governments, Reentry Policy Council, January 

2005, Policy Statement 13, available at: http://

reentrypolicy.org/Report/About. For further 

background, see Jessica Pearson’s article, Building 

Debt While Doing Time: Child Support and 

Incarceration, Judges’ Journal, American Bar 

Association, no. 1, vol. 43 (Winter 2004), available 

at: http://peerta.acf.hhs.gov/uploadedFiles/Building

Debt.pdf. 

18Michelle Ganow Jones, Options to Help LowIncome Noncustodial Parents Manage Their Child 

Support Debt (2002), available at http://

76.12.61.196/publications/

optionstohelplowincomeIN.htm. 

19For further information, see HHS OIG report, 

The Establishment of Child Support Orders for Low 

Income Non-custodial Parents, OEI–05–99–00390 

(2000), available at: http://oig.hhs.gov/oei/reports/

oei-05-99-00390.pdf. 

20Carl Formoso, Determining the Composition 

and Collectability of Child Support Arrearages, 

Volume 1: The Longitudinal Analysis (2003), 

available at: http://www.dshs.wa.gov/pdf/esa/dcs/

reports/cvol1prn.pdf. Mark Takayesu, How Do 

Child Support Orders Affect Payments and 

Compliance? Orange County, CA Department of 

Child Support Services (Oct. 2011), available at: 

http://ncsea.omnibooksonline.com/

2012policyforum/data/papers/PV_1.pdf#page=1. 

21The National Child Support Enforcement 

Association policy statement, Setting Current 

Support Based on Ability to Pay, dated January 30, 

2013, is available at: http://www.ncsea.org/

documents/Ability_to_Pay-final.pdf. 

22 Department of Health and Human Services, 

Office of Child Support Enforcement, State Child 

Support Agencies with Programs to Ensure that 

Child Support Orders Reflect Current Earnings 

(2012), available at: http://www.acf.hhs.gov/

programs/css/resource/state-child-supportagencies-with-programs-to-ensure-that-childsupport. 

23Thirty two States allow for an order 

modification when noncustodial parents are 

incarcerated and six other states do not have a legal 

bar against such modifications. See Department of 

Health and Human Services, Office of Child 

Support Enforcement, ‘‘Voluntary Unemployment,’’ 

Imputed Income, and Modification Laws and 

Policies for Incarcerated Noncustodial Parents 

(2012), Project of Avoid Increasing Delinquencies, 

Child Support Fact Sheet, available at: http://

www.acf.hhs.gov/sites/default/files/ocse/paid_no4_

companion.pdf. 

24See Elaine Sorensen and Tess Tannehill, 

Preventing Child Support Arrears in Texas by 

Improving Front-end Processes (2006), available at: 

http://www.urban.org/UploadedPDF/411829_child_

support_arrears.pdf; Center for Policy Research, 

Reducing Child Support Default Orders in Colorado 

(2007), Colorado Division of Child Support 

Enforcement, Final Report for Grant No. 90FD0080, 

available at: https://childsupport.state.co.us/

siteuser/do/vfs/Read?file=/cm:Publications/

cm:Reports/cm:Colorado_x0020_Default_x0020_

Project_x0020_Final_x0020_Report.pdf; and Kelly 

Macatangay, Anton H. Westveld, Brian Kunkel, 

set above 15–20 percent of the obligor’s 

income, and that orders for excessive 

amounts result in lower, not higher, 

child support payments.14 States like 

California and Washington have found 

that the direct result of establishing 

support obligations that exceed the 

ability of obligors to meet them is 

unpaid arrearages. Most arrearages are 

owed by noncustodial parents with 

earnings under $10,000 and are 

uncollectible.15 Research finds that high 

arrearages substantially reduce the 

formal earnings of noncustodial parents 

and child support payments in 

economically disadvantaged families, 

while reducing unmanageable 

arrearages can increase payments.16

Accumulation of high arrearage 

balances is often associated with 

incarceration, because parents have 

little to no ability to earn income while 

they are incarcerated, and little ability 

to pay off the arrearages when released 

due to lack of employment.17

As a condition of State IV–D plan 

approval, section 467 of the Act requires 

a State to establish guidelines for child 

support awards issued in the State. 

Existing regulations provide a State with 

discretion to design its child support 

guidelines within the parameters of 

§ 302.56. Currently, under 

§ 302.56(c)(1), guidelines must take into 

consideration all earnings and income 

of the noncustodial parent. 

Research suggests that setting an 

accurate order based upon the ability to 

pay improves the chances that 

noncustodial parents will continue to 

pay over time. Compliance with support 

orders is strongly linked to ability to 

pay. Many low-income noncustodial 

parents do not meet their child support 

obligations because they do not earn 

enough to pay what is ordered.18 The 

HHS Office of the Inspector General 

concluded that child support orders set 

for low income parents are ineffective in 

generating child support payments 

when set too high relative to ability to 

pay, finding that compliance is 

significantly lower when a monthly 

order is more than 20 percent of a 

parent’s income than when it is 15 

percent or less.19 Similarly, studies 

conducted in Washington and California 

found that, regardless of income level, 

arrearages are unlikely to accumulate if 

the support obligation is no more than 

20 percent of earnings, or lower.20

Setting child support orders that 

reflect an actual ability to pay is crucial 

to encouraging compliance, increasing 

accountability for making regular 

payments, and discouraging 

uncollectible arrearages. On January 30, 

2013, the National Child Support 

Enforcement Association issued a policy 

statement indicating that: ‘‘As a general 

rule, child support guidelines and 

orders should reflect actual income of 

parents and be changed proactively to 

ensure current support orders reflect 

current circumstances of the parents 

and to encourage regular child support 

payments. Presumed or default orders 

should occur only in limited 

circumstances.’’ 21 Many States have 

programs to ensure that child support 

orders are based on the ability to pay. 

As of September 2011, at least 21 States 

and the District of Columbia were 

operating programs designed to ensure 

that child support orders reflect current 

earnings when orders are initially 

established and are modified when 

earnings change.22 For example, Idaho 

operates a Default Reduction Project, 

Arizona conducts modification 

workshops, Kentucky developed on-line 

assistance for parents to modify their 

orders, and Texas offers enhanced Web 

site assistance for modifying orders to 

match reduced income. In addition, as 

of April 2011, 38 States and the District 

of Columbia did not treat incarceration 

as ‘‘voluntary unemployment,’’ a legal 

barrier to modifying orders to reflect 

actual income.23 Evidence shows that 

engaging both parents in the order 

establishment process is likely to result 

in more accurate order setting, avoiding 

default orders, avoiding the unnecessary 

build-up of arrearages, and increasing 

parental commitment to regularly pay 

child support.24


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Intervening for Success.(2012) Final Report for 

Grant No. 90FD0136. 

25See PIQ–00–03, State IV–D Program Flexibility 

with Respect to Low Income Obligors—Imputing 

Income; Setting Child Support Orders and 

Retroactive Support; Compromising Arrearages; 

Referral to Work-Related Programs and Other Nontraditional Approaches to Securing Support, 

available at http://www.acf.hhs.gov/programs/cse/

pol/PIQ/2000/piq-00–03.htm. 

26Christy Visher and Shannon Courtney, 

Cleveland Prisoners’ Experience Returning Home, 

Urban Institute (2006), available at http://

www.urban.org/UploadedPDF/311359_cleveland_

prisoners.pdf. Also, Maureen R. Waller and Robert 

Plotnick, Effective Child Support Policy for LowIncome Families: Evidence from Street Level 

Research, Journal of Policy Analysis and 

Management (2001), available at: http://

www.jstor.org/stable/3325595. 

27For further information, see the report, The 

Story Behind the Numbers: Understanding and 

Managing Child Support Debt, OCSE Study (2008), 

available at: www.acf.hhs.gov/programs/cse/pol/IM/ 

2008/im-08–05a.pdf. 

28See http://www.merriam-webster.com/. 

29PIQ–00–03, State IV–D Program Flexibility with 

Respect to Low Income Obligors—Imputing Income; 

Setting Child Support Orders and Retroactive 

Support; Compromising Arrearages; Referral to 

Work-Related Programs and Other Non-traditional 

Approaches to Securing Support, available at: 

http://www.acf.hhs.gov/programs/css/resource/

state-iv-d-program-flexibility-low-income-obligors. 

30Rules Governing the Courts of New Jersey, 

Appendix IX–A Considerations in the Use of Child 

Support Guidelines, Section 7.h., Self-Support 

Reserve, available at: http://

www.judiciary.state.nj.us/csguide/app9a.pdf. 

31PIQ–07–01, Use of Federal Income Tax Refund 

Offset Program to recoup medical expenses or 

birthing expenses owed to a State, available at: 

http://www.acf.hhs.gov/programs/css/resource/taxrefund-to-recoup-medical-or-birthing-expensesowed-to-state. 

If States are unable to obtain data on 

the earnings and income of the 

noncustodial parent in a child support 

proceeding, many States impute the 

noncustodial parent’s income. In some 

cases, imputation of income is based on 

an analysis of a parent’s specific 

education, skills, and work 

experience,25 while in other cases, 

imputation of income is standardized 

based on full-time, full-year work at 

minimum or median wage, particularly 

if a noncustodial parent is not working, 

or there is no available income 

information. 

However, research suggests that 

support orders based on imputed 

income often go unpaid because they 

are set beyond the ability of parents to 

pay them. The result is high 

uncollectible arrears balances that can 

provide a disincentive for obligors to 

maintain employment in the regular 

economy. Inaccurate support orders also 

can help fuel resentment toward the 

child support system and a sense of 

injustice that can decrease willingness 

to comply with the law.26 The research 

supports the conclusion that accurate 

support orders that reflect a 

noncustodial parent’s actual income are 

more likely to result in compliance with 

the order, make child support a more 

reliable source of income for children, 

and reduce uncollectible child support 

arrearages.27

Before child support programs were 

computerized, imputation of income 

was used as the basis for establishing 

support obligations because limited 

information was available to decisionmakers. Today, however, States have 

access to multiple interstate data 

systems, including the State and 

National Directories of New Hires as 

well as the Financial Institution Data 

Match (FIDM) and Multistate Financial 

Institution Data Match (MSFIDM), that 

can verify when a noncustodial parent 

has a new job, is claiming 

unemployment insurance benefits, or 

has quarterly wage information 

available. Data, not assumptions, are a 

more accurate method of determining 

the income and resources of 

noncustodial parents. 

Accordingly, we propose to 

modernize standard practices for setting 

child support awards in order to set 

more accurate orders based on actual 

income. To address these changes, we 

propose a revision to § 302.56(a) to 

provide a State with sufficient time to 

address the revised requirements of 

§ 302.56. Specifically, we propose that a 

State meet the requirements of § 302.56 

within one year after completion of its 

next quadrennial review of its 

guidelines pursuant to § 302.56(e). 

We propose to amend current 

§ 302.56(c)(1) to require guidelines to 

take into consideration a noncustodial 

parent’s ‘‘actual’’ earnings and income 

rather than ‘‘all’’ earnings and income. 

We believe this amendment will afford 

a State greater flexibility to set accurate 

orders that reflect a noncustodial 

parent’s actual ability to pay support. 

The proposed revision will reflect 

common practice in some States and 

encourage operational updating in 

others. We specifically invite public 

comments on this proposed change. 

Additionally, we propose a new 

criterion as § 302.56(c)(4). We propose 

that State guidelines take into 

consideration the noncustodial parent’s 

subsistence needs (as defined by the 

State in its guidelines) and provide that 

amounts ordered for support be based 

upon available data related to the 

parent’s actual earnings, income, assets, 

or other evidence of ability to pay, such 

as testimony that income or assets are 

not consistent with a noncustodial 

parent’s current standard of living. 

‘‘Subsistence’’ is defined in the 

Merriam-Webster dictionary as, ‘‘the 

minimum (as of food and shelter) 

necessary to support life.’’ 28 A number 

of States incorporate a self-support 

reserve into their guidelines to 

recognize the noncustodial parents’ 

subsistence needs. See PIQ–00–03 

(September 14, 2000).29 For example, 

New Jersey defines a self-support 

reserve as the amount of income that the 

State determines is necessary to ensure 

that a noncustodial parent ‘‘has 

sufficient income to maintain a basic 

subsistence level and the incentive to 

work so that child support can be 

paid.’’ 30 This reserve amount is either 

disregarded or used to adjust the child 

support obligation so the noncustodial 

parent is able to meet his basic needs. 

The goal of this proposal is to establish 

an accurate child support order and 

obtain compliance with the order based 

upon the real circumstances of the 

parties and the best interests of the 

child. The IV–D agency must use the 

guidelines and take into consideration 

the obligated parent’s ability to pay, or 

justify the deviation from the 

application of the guidelines. See PIQ– 

07–01 (February 6, 2007) (requiring 

similar considerations in the 

recoupment of medical expenses or 

birthing expenses owed to a State).31

The proposed regulation in 

§ 302.56(c)(4) allows a State to impute 

income where the noncustodial parent’s 

lifestyle is inconsistent with earnings or 

income and where there is evidence of 

income or assets beyond those 

identified. We recognize, however, that 

some noncustodial parents may not 

make support payments because they 

are unwilling to do so. An example of 

this would be a noncustodial parent 

who, despite good educational 

credentials and marketable job skills, 

simply refuses to work. In this situation 

the court may deviate from the 

guidelines. We specifically invite 

comments on this provision. 

We also propose a new criterion as 

§ 302.56(c)(5) to prohibit the treatment 

of incarceration as ‘‘voluntary 

unemployment.’’ While the treatment of 

incarceration as voluntary 

unemployment used to be a common 

State guidelines policy, no more than a 

dozen States still maintain this policy. 

Treating incarceration as voluntary 

unemployment means that income is 

imputed and precludes modification of 

support orders. The research suggests 

that many incarcerated parents often 

leave prison with an average of 

$15,000–$30,000 or more in unpaid 

child support, with no means to pay 


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32See Esther Griswold and Jessica Pearson, 

‘‘Twelve Reasons for Collaboration Between 

Departments of Correction and Child Support 

Enforcement Agencies,’’ Corrections Today (2003 

which is available at: http://

www.thefreelibrary.com/Twelve+reasons+for+

collaboration+between+departments+of+

correction...-a0123688074; Jessica Pearson, 

‘‘Building Debt While Doing Time: Child Support 

and Incarceration,’’ Judges’ Journal (2004), which is 

available at: https://peerta.acf.hhs.gov/uploaded

files/buildingdebt.pdf; Nancy Thoennes, Child 

Support Profile: Massachusetts Incarcerated and 

Paroled Parents (2002), which is available at: 

http://cntrpolres.qwestoffice.net/reports/profile%20

of%20CS%20among%20incarcerated%20&%20

paroled%20parents.pdf; and Pamela Ovwigho, 

Correne Saunders, and Catherine Born. The 

Intersection of Incarceration & Child support: A 

snapshot of Maryland’s Caseload (2005), which is 

available at: http://

www.familywelfare.umaryland.edu/reports1/

incarceration.pdf. See also Federal Interagency 

Reentry Council, Reentry Myth Buster on Child 

Support (2011), available at: http://www.national

reentryresourcecenter.org/documents/0000/1063/

Reentry_Council_Mythbuster_Child_Support.pdf. 

33U.S. Department of Health and Human 

Services, Office of Child Support Enforcement, 

Incarceration, reentry and Child Support Issues: 

National and State Research Overview (2006), 

available at: http://www.acf.hhs.gov/programs/cse/

pubs/2006/reports/incarceration_report.pdf. 

34For further information, see Daniel Schroeder 

and Nicholas Doughty’s report, Texas NonCustodial Parent Choices: Program Impact Analysis 

(2009), available at https://

www.texasattorneygeneral.gov/cs/ofi/ncp_choices_

program_impact.pdf. Also, Kye Lippold, Austin 

Nichols, and Elaine Sorensen’s report, 

Strengthening Families Through Stronger Fathers: 

Final Impact Report for the Pilot Employment 

Programs (2011), available at: http://

www.urban.org/uploadedpdf/412442- 

Strengthening-Families-Through-StrongerFathers.pdf. 

35See OCSE AT–97–10, Question and Answer 4, 

under Miscellaneous, available at: http://

www.acf.hhs.gov/programs/cse/pol/AT/1997/at9710.htm; OCSE PIQ–98–03, available at: http://

upon release.32 The research also 

indicates that orders that are 

unrealistically high may undermine 

stable employment and family 

relationships, encourage participation in 

the underground economy, and increase 

recidivism.33 We want to highlight and 

to specifically invite public comments 

on this provision. 

Additionally, we propose a new 

criterion as § 302.56(h) that will allow a 

State to recognize parenting time 

provisions when both parents have 

agreed to the parenting time provisions 

or pursuant to State guidelines. 

Parenting time is a legally distinct and 

separate right from the child support 

obligation. Nonetheless, in practical 

terms, parenting time is an important 

corollary to child support establishment 

because the child support agency, or 

finder of fact, needs information about 

the parenting time arrangements in 

order for the guideline amount to be 

effectively calculated. For the proposed 

parenting time provision, we want to 

emphasize that this is a minor change to 

existing regulations and merely allows a 

court or child support agency to include 

a parenting time agreement into the 

child support order when both parents 

have agreed to the parenting time 

provisions. 

Including both the calculation of 

support and the amount of parenting 

time in the support order at the same 

time increases efficiency, and reduces 

the burdens on parents of being 

involved in multiple administrative or 

judicial processes at minimal cost to the 

child support program. When a State 

has adopted child support guidelines 

that incorporate parenting time, the 

parenting time is integral to the support 

order calculation. ‘‘State child support 

guidelines that incorporate parenting 

time’’ refers to those States that have 

guidelines which incorporate 

allowances (or credits) for the amount of 

time children spend with both parents 

in the calculation of the child support 

order amount. 

This new parenting time provision is 

not intended to require State IV–D 

agencies to undertake new activities. 

IV–D program costs must be minimal 

and incidental to IV–D establishment 

activities and would not have any 

impact on the Federal budget. Our 

proposed regulation is intended simply 

to allow the inclusion of an uncontested 

and agreed upon parenting time 

provision incidental to the 

establishment of a child support order 

when convenient to the parties, IV–D 

agency and court to do so. We believe 

that this provision will reflect the 

current practice in some States and will 

encourage program flexibility in others. 

We specifically invite comments on this 

provision. 

Finally, we propose to redesignate 

current § 302.56(h) as § 302.56(i) and to 

revise this section. Current § 302.56(h) 

addresses the data that a State must 

consider as part of the review of a 

State’s guidelines pursuant to 

§ 302.56(e) and requires that the 

analysis of the data must be used in the 

guidelines review to ensure that 

deviations from the guidelines are 

limited. We propose adding a new 

sentence at the end of this provision 

stating that deviations from the 

presumptive child support amount may 

be based on factors established by the 

State. Reasons for deviating from the 

guidelines in the best interest of 

children often include extraordinary 

medical expenses, and/or educational 

costs of additional dependents. 

Section 302.70: Required State Laws 

We propose changes to existing rules 

in section 302.70 to improve efficiency 

of state programs. OCSE has statutory 

authority to grant a State an exemption 

from implementing one or more of the 

laws and procedures required under 

section 466 of the Act if a State can 

demonstrate to the satisfaction of the 

Secretary that adoption of any one or all 

of the required laws and procedures will 

not increase the effectiveness and 

efficiency of the State’s Child Support 

Enforcement program. Additionally, 

OCSE may grant an exemption if a State 

has and uses a similar procedure which 

does not fully comply with the mandate, 

law, or procedure and the State shows 

evidence that implementation of the 

mandatory procedure would not 

increase the efficiency and effectiveness 

of the State’s existing procedure. In the 

past, OCSE has granted such State 

exemptions for a period up to 3 years. 

However, we believe that changing the 

time period to 5 years would reduce 

paperwork while ensuring sufficient 

accountability and oversight. 

We also propose to amend the 

provision in § 302.70(d)(2) that allows a 

State to request extensions of its IV–D 

State plan exemptions every 3 years. 

OCSE believes that the requirement to 

request an extension every 3 years is 

unnecessary and that a 5-year review 

would be more appropriate. There are 

two reasons for this proposed change. 

First, OCSE reviews and analyzes initial 

exemption requests thoroughly to 

ensure that the statutory requirements 

pursuant to section 466(d) of the Act are 

met. Second, in over 20 years of 

reviewing extension requests for 

approved exemptions, OCSE has never 

denied an extension request. This 

proposed amendment to request 

extensions of IV–D State plan 

exemptions every 5 years will not 

change OCSE’s authority to review and 

to revoke a State’s exemption at any 

time, but it will promote efficiency by 

reducing the burden imposed on States 

submitting exemption extension 

requests. 

Section 302.76: Job Services 

The evidence from recent research 

studies, including rigorous analyses of 

Texas’ NCP Choices and the New York’s 

Strengthening Families Through 

Stronger Fathers Initiative, indicates 

that child support-coordinated work 

programs can be an effective method of 

increasing child support payments to 

families.34 Although many State Child 

Support Enforcement programs have 

entered into local or statewide 

partnerships to provide noncustodial 

parent employment activities, the cost 

of work activities provided under an 

individual work plan has not been 

allowed as a IV–D reimbursable cost.35


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www.dshs.wa.gov/pdf/esa/dcs/reports/OCSE_PIQ_

90_99.pdf; and OCSE AT 00–08, Question and 

Answer 17, available at: http://www.acf.hhs.gov/

programs/css/resource/collaborative-effortsbetween-iv-d-agencies-and-welfare-to-work. 

36 DCL–13–16, OCSE Preliminary FY 2012 Data 

Report, is available at: http://www.acf.hhs.gov/

programs/css/resource/fy-12-preliminary-datareport-announcement. 

Section 454(13) of the Act requires 

that the state plan must ‘‘provide that 

the State will comply with such other 

requirements and standards as the 

Secretary determines to be necessary to 

the establishment of an effective 

program for locating noncustodial 

parents, establishing paternity, 

obtaining support orders, and collecting 

support payments.’’ Pursuant to section 

454(13) of the Act, we propose to add 

a new optional State plan provision, 

§ 302.76, Job Services. The proposal 

permits the State to provide certain 

specified job services to eligible 

noncustodial parents pursuant to 

§ 303.6(c)(5). If the State chooses this 

option, the state plan must include a 

description of the job services and 

eligibility criteria. 

Section 303.3: Location of Noncustodial 

Parents in IV–D Cases 

Section 303.3 requires IV–D agencies 

to attempt to locate all noncustodial 

parents or sources of information or 

assets where that information is 

necessary. In addition to the Federal 

Parent Locator Service, the existing 

regulation lists appropriate locate 

sources, including ‘‘police, parole, and 

probation records.’’ The proposed 

change to § 303.3(b)(1) specifically adds 

‘‘corrections institutions’’ to this list. 

This proposed change will encourage 

child support agencies to use the 

available locate tools already at their 

disposal to identify incarcerated 

noncustodial parents and assure that 

their orders are appropriate. 

Section 303.6: Enforcement of Support 

Obligations 

In addition to the State guidelines 

changes, we propose to update Federal 

regulations in § 303.6 requiring States to 

have procedures in place ensuring that 

civil contempt proceedings take into 

consideration the subsistence needs of 

the noncustodial parent. 

We believe our effort to modernize 

current practices in this program area 

will encourage noncustodial parents to 

comply with child support orders, 

maintain legitimate employment, and 

minimize the accumulation of unpaid 

child support arrearages. This will 

ultimately help noncustodial parents to 

better fulfill their financial 

responsibilities toward their children. 

Existing § 303.6(c) requires that the 

IV–D agency must maintain and use an 

effective system for enforcing a child 

support obligation by complying with 

the provisions in existing § 303.6(c)(1) 

through (4). The IV–D agency must use 

this enforcement system for all cases 

referred to the IV–D agency or applying 

for services under § 302.33 in which a 

child support order has been 

established. 

To ensure that the low-income 

noncustodial parent is able to comply 

with the court order, we propose to 

redesignate paragraph (c)(4) to (c)(5) and 

add new paragraph (c)(4) requiring 

States to have procedures in place 

ensuring that in civil contempt 

proceedings, such enforcement 

activities take into consideration the 

noncustodial parent’s subsistence level 

and income. In addition, we encourage 

States to develop procedures to take into 

account the noncustodial parent’s 

subsistence level in other child support 

enforcement procedures such as credit 

bureau reporting, license revocation, 

State tax refund offset, and liens. Some 

States have reported that they are 

already doing this based on 

discretionary needs-based analysis that 

the States have developed for 

implementing several of these 

enforcement tools. We invite comments 

on whether OCSE should regulate 

having procedures for considering the 

noncustodial parent’s subsistence level 

for other enforcement activities in the 

future. 

In addition, we propose in new 

paragraph (c)(4) that the IV–D agency 

must ensure, in a civil contempt 

proceeding, that a purge amount the 

noncustodial parent must pay in order 

to avoid incarceration takes into 

consideration actual earnings and 

income and the subsistence needs of the 

noncustodial parent. In addition, we 

propose that a purge amount must be 

based upon a written evidentiary 

finding that the noncustodial parent has 

the actual means to pay the amount 

from his or her current income or assets. 

This proposal will assure a 

fundamentally fair determination of 

whether a noncustodial parent is able to 

comply with the court order in a child 

support civil contempt proceeding that 

can lead to jail time. This proposed 

provision is intended to assist States 

seeking to add due process protections 

in accordance with the U.S. Supreme 

Court’s recent decision in Turner v. 

Rogers, 564 U.S. l, 131 S Ct. at 2507 

(2011), which noted that civil contempt 

proceedings must assure a 

‘‘fundamentally fair determination . . . 

whether the supporting parent is able to 

comply with the support order.’’ As 

noted in Turner, ‘‘A court may not 

impose punishment in a civil contempt 

proceeding when it is clearly 

established that the alleged contemnor 

is unable to comply with the terms of 

the order.’’ Turner, 131 S. Ct. at 2516, 

quoting Hicks v. Feiock, 485 U.S. 624, 

638, n. 9. 

Under this provision, a court would 

not be allowed to set a standardized 

purge payment amount in a IV–D case, 

including a fixed dollar amount, a fixed 

percentage of the arrearage, or a fixed 

number of monthly payments, unless 

the provisions of proposed § 303.6(c)(4) 

are met. Under proposed § 303.6(c)(4), a 

IV–D agency, for example, could 

implement procedures to assist the 

court in its determination, for example, 

by pre-screening cases to determine 

whether the case is appropriate for a 

contempt proceeding. The issue is not 

the use of contempt procedures per se, 

but contempt orders that, if not 

satisfied, can lead to jail time. While 

some States routinely use show cause or 

contempt proceedings, jail is not a 

typical outcome. We believe the 

proposed provision will provide 

safeguards to reduce the risk of 

erroneous deprivation of liberty in a 

child support civil contempt case. We 

note that a contempt order may not be 

monetary, but instead may require 

certain actions by the obligor, such as 

obtaining employment or participation 

in job search or other work activities. So 

long as the obligor has the present 

ability to do what is ordered of him or 

her, HHS believes such an order would 

appear to comply with the Turner 

decision. 

In an effort to make the program more 

effective and to increase regular child 

support payments, we propose program 

standards related to providing certain 

job services for eligible noncustodial 

parents responsible for paying child 

support. These services are designed to 

complement traditional enforcement 

tools and to help noncustodial parents 

find suitable employment opportunities 

so they can support their children. 

Stable child support collections 

depend on the economic stability of the 

noncustodial parent. In fact, over 70 

percent of child support collections are 

made through wage withholding by 

employers.36 So while the child support 

program works well for those parents 

who have steady incomes through 

regular employment or other means, it 

has been less effective for the 20 to 30 

percent of noncustodial parents who 

have a limited ability to pay child 

support because of their limited 


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37For further information, see Elaine Sorensen 

and Chava Zibman’s report, Poor Dads Who Don’t 

Pay Child Support: Deadbeats or Disadvantaged? 

(2001), available at: http://www.urban.org/

UploadedPDF/anf_b30.pdf. 

38For further information, see Elaine Sorensen, 

Liliana Sousa, and Simon Schaner’s report, 

Assessing Child Support Arrears in Nine Large 

States and the Nation (2007), available at: http://

aspe.hhs.gov/hsp/07/assessing-CS-debt/. 

39For further information, see Elaine Sorensen 

and Helen Oliver’s report, Policy Reforms are 

Needed to Increase Child Support from Poor 

Fathers (2002), available at: http://www.urban.org/ 

uploadedPDF/410477.pdf. 

40For further information, see Maria Cancian, 

Daniel R. Meyer, and Eunhee Han’s article, Child 

Support: Responsible Fatherhood and the Quid Pro 

Quo (2011), The ANNALS of the American 

Academy of Political and Social Science 635:140. 

41U.S. Department of Health and Human 

Services, Administration for Children and Families, 

Office of Child Support Enforcement, WorkOriented Programs for Noncustodial Parents with 

Active Child Support Agency Involvement (2014), 

available at: https://www.acf.hhs.gov/sites/default/

files/programs/css/work_oriented_programs_for_

non_custodial_parents_2014.pdf. 

42For further information, see Fred Doolittle, 

Virginia Knox, Cynthia Miller, and Sharon Rowser’s 

report, Building Opportunities, Enforcing 

Obligations: Implementation and Interim Impacts of 

Parents’ Fair Share (1998), available at: http://

www.mdrc.org/sites/default/files/full_38.pdf. 

43For further information, see Sarah Avellar, M. 

Robin Dion, Andrew Clarkwest, Heather Zaveri, 

Subuhi Asheer, Kelley Borradaile, Megan Hague 

Angus, Timothy Novak, Julie Redline, and Marykate 

Zukiewicz’s report, Catalog of Research: Programs 

for Low-Income Fathers (2011), OPRE Report 

# 2011–20, available at: http://www.acf.hhs.gov/

programs/opre/resource/catalog-of-researchprograms-for-low-income-fathers. 

44For further information, see Daniel Schroeder 

and Nicholas Doughty’s report, Texas NonCustodial Parent Choices: Program Impact Analysis 

(2009), available at https://

www.texasattorneygeneral.gov/cs/ofi/ncp_choices_

program_impact.pdf. Also, Kye Lippold, Austin 

Nichols, and Elaine Sorensen’s report, 

Strengthening Families Through Stronger Fathers: 

Final Impact Report for the Pilot Employment 

Programs (2011), available at: http://

www.urban.org/uploadedpdf/412442- 

Strengthening-Families-Through-StrongerFathers.pdf. 

earnings.37 For example, 70 percent of 

unpaid child support debt is owed by 

parents with no or low reported 

earnings.38 Many poor noncustodial 

parents, however, have little or no 

connection to the formal labor market 

and therefore cannot pay consistent 

support.39

Traditional enforcement tools often 

prove ineffective in getting unemployed 

noncustodial parents to pay child 

support.40 In most cases, offering job 

services is a more effective approach for 

increasing the ability of unemployed 

noncustodial parents to get and keep a 

job and to pay child support on a 

regular basis, while holding parents 

accountable for supporting their 

children. As of February 2014, 30 States 

and the District of Columbia are 

operating 77 work-oriented programs for 

noncustodial parents with active child 

support agency involvement. Three of 

these States are operating statewide 

programs—Georgia, Maryland, and 

North Dakota. Many other States are 

operating programs in multiple 

counties. We estimate that roughly 

30,000 noncustodial parents were 

served by these programs in 2013. Many 

of these programs are associated with 

better child support and employment 

outcomes, and evaluations show they 

usually lead to increased support 

payments.41

These programs build on a long 

history of national demonstrations 

providing employment services to 

noncustodial parents. The Parents’ Fair 

Share (PFS) demonstration in the 1990s 

tested a comprehensive employment 

program designed to improve child 

support payments and other outcomes 

for unemployed noncustodial parents 

with children receiving public 

assistance. The evaluation of PFS found 

that this intervention increased reliable 

child support payments.42 Subsequent 

demonstrations or initiatives included 

the OCSE Responsible Fatherhood 

Programs (1998–2000), Partners for 

Fragile Families (2000–2003), Welfareto-Work funded programs (1998–2004), 

and the Fathers at Work Demonstration 

(2003–2007). All of these programs 

aimed at increasing low-income parents’ 

earnings and their child support 

payments, as well as increasing their 

involvement in their children’s lives.43

These programs tended to generate 

appreciable gains in child support 

payments. 

We propose to add § 303.6(c)(5) to 

provide program standards related to 

the proposed optional State plan 

provision for job services for 

noncustodial parents owing child 

support through the IV–D program that 

are reasonably expected to increase 

child support payments. Our proposed 

job services program standards 

emphasize rapid labor force attachment 

and job retention strategies rather than 

long-term career development. While 

there are other contexts in which 

services to promote access to better jobs 

and careers are important, we have 

determined that in the context of 

unemployed noncustodial parents with 

child support responsibilities, federal 

matching funds should be limited to 

those services best calculated to lead to 

rapid employment entry and 

employment retention. States may 

determine whether to provide job 

services and how to design an evidenceinformed employment program that 

improves child support outcomes. State 

child support work-oriented programs 

have implemented a number of 

promising strategies such as tiered 

employment, sectoral strategies, and 

job-driven training—training with a 

focus on business and labor market 

needs. Allowable job services are 

limited to those services which will 

help noncustodial parents find and 

maintain work so they can pay 

consistent and ongoing child support 

payments. 

To be eligible for job services, we 

propose that the noncustodial parent 

must have a IV–D case, have a current 

child support order, be unemployed or 

not making regular child support 

payments, not be receiving TANF 

assistance or assistance funded with 

State dollars counting toward TANF 

maintenance of effort, not be enrolled in 

a Supplemental Nutrition Assistance 

Program Employment and Training 

program under 7 CFR 273.7 and 273.24, 

not be receiving the same job services 

from Workforce Investment Act (WIA) 

under 20 CFR part 652 and parts 660– 

671, and not be receiving a Federal Pell 

Grant under 34 CFR part 690. The State 

child support agency may set additional 

eligibility criteria. 

We propose that allowable job 

services (for which FFP will be available 

under § 304.20(b)(3)(ix)) include: 

• Job search assistance; 

• job readiness training; 

• job development and job placement 

services; 

• skills assessments to facilitate job 

placement; 

• job retention services; 

• certificate programs and other skills 

training directly related to employment, 

which may include activities to improve 

literacy and basic skills, such as 

programs to complete high school or a 

General Education Development (GED) 

certificate, as long as they are included 

in the same job services plan; and 

• work supports such as 

transportation assistance, uniforms, or 

tools. 

We have included a focused set of job 

services based on rigorous research that 

shows positive effects of these types of 

services on the employment of 

noncustodial parents and their child 

support payments.44 This package 

includes certificate programs and other 

skills training directly related to 

employment. Previous successful 

programs have included a package of 

services including certificate programs 

and skills training, which only 

minimally increase the cost of this 

provision. We specifically invite 

comment on our proposed eligibility 


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45For further information, see Cindy Redcross, 

Megan Millenky, Timothy Rudd, and Valerie 

Levshin. ‘‘More than a Job: Final Results from the 

Evaluation of the Center for Employment 

Opportunities (CEO) Transitional Jobs Program,’’ 

OPRE Report 2011–18 (January 2012) available at: 

http://www.acf.hhs.gov/sites/default/files/opre/

more_than_job.pdf. In addition, see Dan Bloom, 

Sarah Rich, Cindy Redcross, Erin Jacobs, Jennifer 

Yahner, and Nancy Pindus. ‘‘Alternative Welfare-toWork Strategies for the Hard-to-Employ: Testing 

Transitional Jobs and Pre-Employment Services in 

Philadelphia,’’ MDRC, (October 2009), available at: 

http://www.acf.hhs.gov/programs/opre/resource/

alternative-welfare-to-work-strategies-for-the-hardto-employ-testing. 

46For further information, see Carolyn J. 

Heinrich, Brett C. Burkhardt, and Hilary M. Shager, 

Reducing Child Support Debt and Its Consequences: 

Can Forgiveness Benefit All? (2010), available at: 

http://www.irp.wisc.edu/research/childsup/

cspolicy/pdfs/2007–09/FamiliesForward_3_19_

10.pdf. 47For further information, see Department of 

Health and Human Services, Office of Child 

Support Enforcement, ‘‘Voluntary Unemployment,’’ 

Imputed Income, and Modification Laws and 

Policies for Incarcerated Noncustodial Parents 

(2012), Project of Avoid Increasing Delinquencies— 

Child Support Fact Sheet, available at: http://

www.acf.hhs.gov/sites/default/files/ocse/paid_no4_

companion.pdf. 

48For further information, see the Report of the 

Re-Entry Policy Council: Charting the Safe and 

Successful Return of Prisoners to the Community, 

available at: http://www.reentrypolicy.org/

publications/1694;file. See also Carmen SolomonFears, Gene Falk, and Adrienne L. FernandesAlcantara, Child Well-Being and Noncustodial 

Fathers (2013), Congressional Research Service. 

49 In 2012, Vermont enacted Senate Bill 203 that 

allows the child support program to file a motion 

to modify child support if a party is incarcerated 

from more than 90 days. For information about the 

other jurisdictions, see Department of Health and 

Human Services, Office of Child Support 

Enforcement, ‘‘Voluntary Unemployment,’’ Imputed 

Income, and Modification Laws and Policies for 

Incarcerated Noncustodial Parents (2012), Project of 

Avoid Increasing Delinquencies—Child Support 

Fact Sheet, available at: http://www.acf.hhs.gov/

sites/default/files/ocse/paid_no4_companion.pdf. 

50For further information, see the final report on 

Modifying Orders for DC Prisoners: An 1115 

Demonstration Project (2006), abstract available at: 

http://archive.acf.hhs.gov/programs/cse/grants/

abstracts/by_state.html. 

51For further information, see Department of 

Health and Human Services, Office of Child 

Support Enforcement, ‘‘Voluntary Unemployment,’’ 

Imputed Income, and Modification Laws and 

Policies for Incarcerated Noncustodial Parents 

(2012), Project of Avoid Increasing Delinquencies— 

Child Support Fact Sheet, available at: http://

www.acf.hhs.gov/sites/default/files/ocse/paid_no4_

companion.pdf. 

criteria and the list of allowable job 

services. 

Subsidized employment is not 

included as an allowable job service 

above, but we ask for comment 

regarding its inclusion here. Subsidized 

employment programs provide jobs to 

people who cannot find employment in 

the regular labor market and use public 

funds to pay all or some of their wages. 

Evaluations of subsidized employment 

programs suggest that they are effective 

at providing jobs in the short term and 

can have valuable ancillary benefits, 

including reduced welfare receipt and 

recidivism among ex-offenders.45

However, including subsidized 

employment in a jobs program can 

increase the cost of the program, and 

our principal focus here is on low-cost 

job services. We invite comments on the 

effectiveness of including subsidized 

employment as an allowable job service, 

including experience and evidence of 

the cost-effectiveness of using this 

strategy to improve regular child 

support payment from low-income 

parents, and if allowed, options we 

might consider for limiting the costs of 

subsidized jobs efforts, such as limits on 

the length or amount of the subsidy. 

Since payment of child support 

obligations is the goal of job services in 

child support, we also ask for comments 

on the potential implications of 

withholding child support from IV–D 

funded subsidized wages. 

Section 303.8: Review and Adjustment 

of Child Support Orders 

Effective review and adjustment of 

child support orders is an important 

step in ensuring that noncustodial 

parents comply with their child support 

obligations. Without an effective system 

to change child support orders to reflect 

actual ability to pay, arrears will 

accumulate. The unnecessary accrual of 

arrears is harmful because it hinders 

payment of regular support payments, 

leads to uncollectible debt, limits work 

opportunities for noncustodial parents, 

and interferes with parent-child 

relationships.46 To address the needs of 

families with a parent in prison, 

numerous States, including Missouri, 

Nevada, Oklahoma, Texas, and West 

Virginia, already communicate with 

incarcerated parents about review and 

adjustment policies and the importance 

of requesting modification of their child 

support orders.47

Section 466(a)(10) of the Act requires 

a State to have in effect laws requiring 

the use of procedures for review and 

adjustment of child support orders. 

Existing regulations in § 303.8 specify 

the requirements that a State must meet 

with respect to seeking adjustments to 

child support orders in IV–D cases. The 

current regulation establishes both a 

required system for review and 

adjustment for cases with assignments 

under part A of the Act and a means of 

accessing the review and adjustment 

process for other cases based upon a 

request from either parent. We propose 

to redesignate § 303.8(b)(2) through 

(b)(5) as (b)(3) through (b)(6). Also, we 

propose to add a new paragraph (b)(2) 

that would allow the child support 

agency to elect in its State plan the 

option to initiate the review of a child 

support order and seek to adjust the 

order, if appropriate, after being notified 

that a noncustodial parent will be 

incarcerated for more than 90 days. This 

review would not need a specific 

request, provided both parents had 

received notice. In electing this State 

plan option, the State may also need to 

consider whether further changes to 

State laws are required to implement 

this procedure. In most States, 

incarcerated parents must take 

affirmative steps to have their orders 

modified. We have found that very few 

incarcerated parents petition for a 

modification, even though their order 

could be suspended during 

incarceration. As a result, by the time 

that noncustodial parents are released 

from prisons, their child support 

arrearages have grown to very high 

levels, and may help drive the 

noncustodial parents into the 

underground economy to avoid paying 

support and may create an additional 

barrier to parent-child contact.48 A 

number of States, including Arizona, 

California, Michigan, Vermont, and the 

District of Columbia permit their child 

support agency to initiate review and 

adjustment upon notification that the 

noncustodial parent has been 

incarcerated.49 During the first year of 

implementing this new procedure, one 

State was able to modify over 300 orders 

resulting in an average of $5,156 in 

arrearages being avoided per case.50 We 

specifically invite comments on this 

provision, including any experiences 

commenters have had in trying to adjust 

orders for incarcerated noncustodial 

parents. 

In addition, we propose to redesignate 

existing § 303.8(b)(6) which requires 

notice ‘‘not less than once every three 

years,’’ to § 303.8(b)(7) and (b)(7)(i) and 

to add a new paragraph (b)(7)(ii) to add 

that a notice of the right to request a 

review and adjustment is also required 

when the IV–D agency has knowledge 

that a parent is incarcerated. Alabama 

and Texas provide inmates with 

information about the child support 

program and the steps needed to request 

a review of their child support order.51

Providing notice is a necessary first step 

in informing both parents of the ability 

to request a modification of their order 

when a parent has been incarcerated. 

In addition, § 303.8 specifies 

requirements that a State must meet 

with respect to seeking adjustments to 

child support orders in IV–D cases. 

Existing paragraph (d) of this section 

specifies that if the review indicates the 


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52For further information, see AT–91–02, http:// 

www.acf.hhs.gov/programs/cse/pol/AT/1991/at9102.htm, AT–92–02, http://www.acf.hhs.gov/

programs/cse/pol/AT/1992/at-9202.htm, AT–92– 

12, http://www.acf.hhs.gov/programs/cse/pol/AT/

1992/at-9212.htm, and AT–08–08, http://

www.acf.hhs.gov/programs/cse/pol/AT/2008/at-08– 

08.htm. 

need to provide for the health care 

needs of the children in the order, such 

a need must constitute adequate 

justification under State law to petition 

for adjustment of the order, regardless of 

whether an adjustment in the amount of 

child support is necessary. Existing 

paragraph (d) restricts consideration of 

Medicaid as medical support. 

Since current OCSE policy does not 

consider the eligibility for or receipt of 

Medicaid to meet the health care needs 

of the child(ren), States are required to 

include private health insurance or 

establish a cash medical support order 

to address the child(ren)’s health care 

needs pursuant to § 303.31(b). Although 

this has been a longstanding policy,52

we realize that our existing regulation 

restricts existing State flexibility 

available under the current statute and 

that it is no longer appropriate to restrict 

Medicaid, CHIP, and other coverage 

plans available in the State as part of 

medical support. In order to provide a 

State with flexibility to establish and 

enforce medical support obligations 

whenever a parent has access to health 

care coverage—private or public—at a 

reasonable cost, consistent with section 

452(f) of the Act, OCSE proposes to 

delete the last sentence of paragraph (d) 

of § 303.8 which prohibits Medicaid 

from being considered medical support. 

Section 303.11: Case Closure Criteria 

Case closure, § 303.11, is another area 

where changes in existing regulations 

will increase program flexibility, 

effectiveness, and efficiency. Case 

closure regulations were initially 

promulgated in 1989. Since then, 

advances in technology have greatly 

increased the likelihood that if State IV– 

D agencies have sufficient information 

about a noncustodial parent, they can 

generally locate the noncustodial 

parents and find legitimate income and 

assets. 

The goal of the proposed case closure 

regulations is to direct resources for 

cases where collections are possible and 

to ensure that families have more 

control over whether to receive child 

support services. Under current case 

closure regulations, States are not 

permitted to close cases except under 

certain narrow and specific 

circumstances. This can mean that a 

State may be required to keep a case 

open for decades, well after the child 

has emancipated, and regardless of 

whether the family wants continued 

services. State case closure procedures 

are automated and subject to audits. 

The National Council of Child 

Support Directors provided OCSE with 

recommendations for improving the 

effectiveness and efficiency of the case 

closure criteria, while at the same time, 

ensuring that resources are directed to 

working cases and that children receive 

services whenever there is any 

reasonable likelihood for collections in 

the future. Additionally, we sought 

Tribal input in a formal fashion as 

discussed in the Tribal Impact 

Statement. 

The proposals in this regulation are 

intended to carry out good customer 

service and management practices in 

order to provide needed services where 

there is any reasonable chance to 

successfully work a case. The proposed 

regulation also ensures that safeguards 

are in place to keep recipients apprised 

of case closure actions. Cases are not 

closed without taking into consideration 

any new information provided by the 

affected parties. 

Section 454(4)(A)(ii) of the Act 

requires a State to provide IV–D services 

to any individual who files an 

application for services. In addition, 

sections 408(a)(3) and 454(29) of the Act 

require TANF assistance recipients to 

assign their rights to child support and 

to cooperate with the child support 

program in obtaining support. Existing 

regulations allow a State to close IV–D 

cases only under certain restricted 

circumstances even when the State is no 

longer able to provide effective and 

productive child support services. In all 

cases where case closure is proposed, 

recipients of child support services are 

given notice of the intent to close the 

case and are provided an opportunity to 

respond with information and to request 

that the case be kept open or, after the 

case is closed, to reopen the case. 

In an effort to modernize our 

regulations, we propose several new 

case closure criteria and revisions to 

existing criteria in § 303.11 that are 

intended to provide families with 

effective child support enforcement 

services, promote State flexibility, and 

ensure the efficient use of State and 

Federal resources. While the NPRM 

expands the number of case closure 

criteria, it also strengthens the case 

closure notice provisions to ensure that 

recipients are kept apprised of case 

closure actions and understand how to 

request additional services. The 

proposals in this regulation aim to 

balance good management and workable 

administrative decisions with providing 

needed services, always erring in favor 

of including any case in which there is 

a reasonable chance of success. 

In § 303.11(b), we propose to clarify 

that a IV–D agency is not required to 

close a case that is otherwise eligible to 

be closed under that section. Case 

closure regulations are designed to give 

a State the option to close cases, if 

certain conditions are met, and to 

provide a State flexibility to manage its 

caseload. If a State elects to close a case 

under one of these provisions, we 

propose the State maintain supporting 

documentation for its decision in the 

case record. We emphasize that closing 

a case will not affect the legality of the 

underlying order. The child support 

order, including any payment or 

installment of support such as 

arrearages due under the order, remains 

in effect and legally binding. 

We propose a new criterion as 

§ 303.11(b)(2) that will allow a State to 

close cases where there is no current 

support order and all arrearages are 

owed to the State. This provision is 

intended to afford the State more 

resources to enforce those cases where 

debt is owed to families rather than to 

the State. 

We propose a new criterion as 

§ 303.11(b)(3) that will allow the IV–D 

agency to close arrearages-only cases 

against low-income senior citizens who 

are entering or have entered long-term 

care placement, and whose children 

have already reached majority age. In 

addition, these noncustodial parents 

must have no income or assets available 

above the subsistence level that could 

be levied or attached for support. The 

first generation of orders in the IV–D 

program was issued more than 35 years 

ago. We recognize that a portion of our 

noncustodial parent population is aging, 

many of whom may depend on fixed 

incomes. Old child support debt, carried 

well after the children have become 

adults and sometimes parents 

themselves, could pose a barrier for 

aging parents to obtain affordable 

housing, basic income, and health care. 

We believe enforcement efforts against 

these noncustodial parents are not only 

ineffective, but are also an inefficient 

way to expend child support resources. 

We would like to hear from States and 

other stakeholders about their 

experiences working with low-income, 

aging noncustodial parents, and receive 

recommendations for this rule. 

OCSE has redesignated § 303.11(b)(2) 

as (b)(4) and proposes to add a new 

criterion as § 303.11(b)(5) which allows 

a State to close cases when the 

noncustodial parent is either living with 

the minor children as the primary 

caregiver or is a part of an intact twoparent household, and the IV–D agency 


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has determined that services either are 

not appropriate or are no longer 

appropriate. This provision is intended 

to address situations where parents 

reconcile so services are no longer 

needed, as well as intact two-parent 

families where one parent works or is 

seeking work out of State and child 

support services were never needed. We 

have also redesignated paragraph (b)(3) 

as (b)(6). 

When States have made repeated 

efforts over time to locate noncustodial 

parents, and those efforts are 

unsuccessful because of inadequate 

identifying or location information, 

States should be allowed to close those 

cases and to focus efforts on productive 

cases. Current § 303.11(b)(4)(i) permits a 

State to close cases that have identifying 

information, like full names, dates of 

birth, and verified Social Security 

Numbers, after 3 years, in which locate 

efforts have been exhausted. For those 

cases with sufficient identifying 

information and with enhanced locate 

tools, such as the National Directory of 

New Hires (NDNH) that provides 

current data on new hires and quarterly 

wage data and the Federal Case Registry 

(FCR), as well as tax information from 

the Internal Revenue Service and 

financial information from financial 

institutions data match, State 

experience has been that if a State is 

able to locate parents and assets, it is 

generally within 2 years. Moreover, the 

NDNH data are only retained for 2 years. 

Given that, we propose to redesignate 

paragraph (b)(4) as paragraph (b)(7) and 

to revise the 3-year locate period in 

newly designated § 303.11(b)(7)(i) to a 2- 

year locate period. Given the low 

success rate for collections after 2 years, 

the extra time and resources that would 

have been used to locate may be better 

used to enforce other cases where 

appropriate. 

Similarly, under current 

§ 303.11(b)(4)(ii), a State is allowed to 

close cases after 1 year if it does not 

have sufficient identifying information, 

such as a date of birth or a verified 

Social Security Number, to initiate an 

automated locate effort. For the same 

reasons noted in the previous 

paragraph, we propose changing the 

locate period from a 1-year period to a 

6-month period in proposed 

§ 303.11(b)(7)(ii). 

Also, proposed § 303.11(b)(7)(iii) adds 

a provision to allow a State to close 

cases after a 1-year period when there is 

sufficient information to initiate an 

automated locate effort, such as full 

names and dates of birth, but locate 

interfaces are unable to verify Social 

Security Numbers. OCSE implemented 

an interface between its Federal Parent 

Locator Service (FPLS) and the Social 

Security Administration’s Enumeration 

Verification System (EVS) in 1996. FPLS 

is a computerized national location 

network that provides States with the 

most timely, accurate information 

available to locate noncustodial parents 

for the purpose of establishing or 

enforcing child support orders. The EVS 

system is an automated process to 

verify, correct, and identify Social 

Security Numbers. It supports the 

correct identification of individuals 

when incomplete or duplicate Social 

Security Numbers are found in child 

support enforcement records. States are 

required to use EVS and to obtain as 

much pertinent information as possible 

from custodial parents. However, if after 

1 year neither EVS nor FPLS are able to 

verify Social Security Numbers, OCSE 

believes that case closure is warranted. 

Without sufficient information to use 

enhanced locate tools like EVS and the 

FPLS, locate efforts are futile and work 

time may be better allocated to other 

areas of enforcement. 

Current § 303.11(b)(5) lists a limited 

number of circumstances under which a 

State may close cases if it determines a 

noncustodial parent cannot pay support 

for the duration of the child’s minority. 

We propose to redesignate the existing 

provision as § 303.11(b)(8) and to add 

the phrase ‘‘the child has reached the 

age of majority’’ to the first 

subparagraph under the proposed 

provision. This will allow a State to 

close both current support and 

arrearages-only cases if the 

circumstances described in proposed 

(b)(8) are met. We have also revised the 

proposed language by moving the 

phrase, ‘‘and shows no evidence of 

support potential’’ earlier in the 

paragraph to clarify that this condition 

applies to all of the circumstances 

described in proposed (b)(8). The 

current provision also allows a State to 

close cases in which the noncustodial 

parent has been incarcerated ‘‘with no 

chance for parole’’ and has no income 

or assets above the subsistence level, 

which could be levied or attached for 

support. We believe the ‘‘no chance for 

parole’’ requirement unduly restricts a 

State’s flexibility to determine that the 

child support case is unproductive and 

should be closed. Therefore, we propose 

to eliminate the phrase ‘‘with no chance 

for parole.’’ We also propose to add a 

new provision that will allow a State to 

close cases in which the noncustodial 

parent cannot pay support and shows 

no evidence of support potential despite 

multiple referrals for services over a 5- 

year period, which have not been 

successful. A State will have the 

discretion to determine what services 

are appropriate and available under 

State law. Finally, we have added that 

these cases can only be closed under 

proposed (b)(8) if the noncustodial 

parent’s does not have income or assets 

‘‘above the subsistence level.’’ We 

believe that the IV–D agency should 

only pursue enforcement on these cases 

if the noncustodial parent has income or 

assets above the subsistence level (as 

defined by the State). 

We have also added a new criterion 

§ 303.11(b)(9) to allow a State to close a 

case when a noncustodial parent’s sole 

income is from Supplemental Security 

Income (SSI) payments made pursuant 

to sections 1601 et seq., of title XVI of 

the Act, 42 U.S.C. 1381, et seq., from 

both SSI and benefits pursuant to title 

II of the Act, or from other needs-based 

benefits. We are including the 

concurrent SSI/title II beneficiary in this 

proposal, because the noncustodial 

parent’s income level is low enough to 

be eligible for SSI. Therefore, we believe 

that these cases should be closed since 

they would be unproductive for the IV– 

D agency to pursue. Additionally, we 

seek comments on whether additional 

guidance is warranted to strengthen 

protection of SSI, e.g., requiring 

enhanced notice provisions recognizing 

these exceptions to garnishment. We 

have also redesignated existing 

paragraphs (b)(6)–(b)(8) as paragraphs 

(b)(10)–(b)(12). 

As previously discussed, we proposed 

under § 302.33(a)(6) to allow a State to 

offer limited child support services. 

Currently, there is no corresponding 

provision that allows a State to close 

these cases opened under § 302.33(a)(6), 

without first waiting for the recipient of 

services to request case closure. 

Therefore, we propose a new criterion 

§ 303.11(b)(13) that will allow the State 

to close a non-IV–A case after a limited 

service under § 302.33(a)(6) has been 

completed without providing the notice 

under § 303.11(d)(1). (Section 

302.33(a)(6) requires that the individual 

be notified when applying for limited 

service(s) that the case will be closed 

after the limited service is completed.) 

However, after the case is closed, the 

IV–D agency must notify the recipient in 

accordance with § 303.11(d)(6). We have 

also redesignated current paragraph 

(b)(9) to (b)(14). 

In non-IV–A cases, or cases where the 

custodial parent and/or child(ren) does 

not receive cash assistance from the 

State, the State is required to distribute 

child support payments to the recipient 

of child support services. Although 

many State child support programs 

distribute payments through debit cards, 

it remains extremely important for the 


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53For further information, see AT–98–24, August 

19, 1998, available at: http://www.acf.hhs.gov/

programs/cse/pol/AT/1998/at-9824.htm. 

54See Tribal Impact Statement in preamble. 

55Available at: http://www.acf.hhs.gov/programs/ 

cse/pol/PIQT/2005/piqt-05-01.htm. 

recipient of services to keep the State 

informed of his or her current mailing 

address to ensure that the case can be 

processed effectively. If a State is unable 

to contact a recipient of services, current 

§ 303.11(b)(10) requires the State to 

make an attempt of at least one letter 

sent by first-class mail to the recipient’s 

last known address within 60 calendar 

days before beginning the process of 

case closure. If the attempt fails and the 

State does not hear from the recipient of 

services within the 60 days, under 

current paragraph (c), the State must 

then send another letter to inform the 

recipient of services of its intent to close 

the case in 60 days. In situations where 

the letter sent in the first attempt is 

returned by the Postal Service as 

undeliverable with no forwarding 

address, the State must still wait the full 

60 days from the date the letter was 

mailed before sending the 60-day case 

closure notice. We intend to streamline 

the case closure process by eliminating 

the 60-day wait requirement under 

proposed § 303.11(b)(15). We consider it 

to be more efficient to allow a State to 

attempt to contact the recipient of 

services through at least two different 

methods. With today’s technology, there 

are many different options when it 

comes to notifying clients, such as firstclass mail, electronic mail, text 

messaging, and telephone calls. A State 

will have discretion to determine what 

methods are most appropriate on a caseby-case basis. As emphasized in Action 

Transmittal 10–11, ‘‘Alternative 

Methods to Meet the Monthly 

Requirement,’’ however, the underlying 

policy goal is effective notice. 

We redesignated existing paragraphs 

(b)(11)–(b)(14) as (b)(16)–(b)(19) and 

propose a new criterion at 

§ 303.11(b)(20) to provide a State with 

flexibility to close cases referred 

inappropriately by the IV–A, IV–E, and 

Medicaid programs. We encourage State 

IV–D agencies and assistance programs, 

like IV–A, IV–E, and Medicaid, to work 

together to define referral criteria to 

ensure only appropriate cases are 

referred to the IV–D agency. The term 

appropriate is used in the regulation 

because section 454(4)(A) of the Act 

requires IV–D agencies to provide 

services ‘‘as appropriate.’’ Primarily due 

to automated interfaces between 

programs, a very small number of cases 

referred to the IV–D agency are plainly 

inappropriate for child support 

enforcement services, but existing 

regulations do not provide State IV–D 

agencies with a basis for closing such 

cases. We believe that these programs 

and child support agencies work hard to 

communicate regularly and effectively 

to assist each other in updating their 

respective case information to ensure 

that referrals are made appropriately. 

However, there are rare instances 

when a State inadvertently opens cases 

inappropriately referred for child 

support services. Therefore, we 

recommend a new criterion that will 

allow a IV–D agency to close a case that 

has been opened to establish or enforce 

child support because of an 

inappropriate referral from another 

assistance program. 

For example, in assistance cases 

which are referred for IV–D services, 

both parents may be living at home and 

functioning as an intact family although 

the parents are not married and 

paternity has not been established. 

Since both parents are living with their 

child, and there is no noncustodial 

parent, the IV–D agency may determine 

that pursuing the case is not appropriate 

for child support enforcement. Another 

example could be an intact family that 

is eligible for TANF. A married parent 

applied for TANF, while the other 

parent has left the area to find work. 

Since the family continues to function 

as an intact family, although one parent 

is away for economic reasons, the IV–D 

agency may determine that it is 

detrimental to the family to pursue 

child support. In these circumstances, 

we believe the IV–D agency should be 

in communication with the IV–A agency 

to ensure that the decision to close the 

IV–D case will not be viewed by the IV– 

A agency as noncooperation by the 

recipient of services. 

Another example of an inappropriate 

referral would be for a family receiving 

a non-recurring, short-term TANF 

benefit that does not fall within the 

definition of TANF assistance under 

§ 260.31 as required by existing law and 

policy 53 that was unnecessarily referred 

to the IV–D program in error. In cases 

where there is no legal authority to 

require an assignment and the case was 

inappropriately opened by the IV–D 

agency, we believe that the IV–D agency 

should be able to close the case. 

Also, in IV–E cases which are referred 

to the IV–D agency, there may be cases 

where children are expected to be in 

foster care for only a short time before 

being reunited with their family or 

before adoption proceedings are 

finalized. The IV–D agency may 

determine that it is not appropriate to 

pursue child support. Finally, as 

discussed above in proposed 

§ 302.33(a)(4), we provide State IV–D 

agencies with additional flexibility to 

determine whether notice to a family in 

which a child no longer receives foster 

care maintenance payments is 

appropriate. 

While we believe that inappropriate 

referrals are limited in number, we 

believe a State should have the 

flexibility to close these cases on a caseby-case basis under proposed 

§ 303.11(b)(20). We specifically seek 

public comment on whether the 

proposed provision in § 303.11(b)(20) 

effectively addresses the rare 

circumstance where an inappropriate 

referral may have been made or whether 

the language is too broad. We are 

interested in the pros and cons of this 

proposal and if you have any additional 

suggested criteria or revisions to ensure 

that a State is accorded the flexibility to 

close cases where inappropriate 

referrals have been made. 

In addition, we plan to update case 

closure regulations to encourage 

efficient case transfer between State and 

Tribal IV–D programs. Originally, when 

case closure regulations were written in 

1989, there were no Tribal IV–D 

programs. Presently, there are over 50 

fully operational Tribal IV–D programs. 

We invited Tribal leaders to engage in 

both written and face-to-face 

consultations to discuss issues and 

proposed solutions related to 

intergovernmental coordination. We 

also met with Tribal IV–D directors in 

several sessions around the country to 

have a conversation regarding Tribal 

Medical Child Support. We specifically 

discussed case transfer and case closure 

issues that will require a State IV–D 

agency to close Medicaid 

reimbursement cases that involve 

children receiving services from the 

Indian Health Service (IHS) when 

appropriate. We also discussed case 

transfer and case closure issues with 

State child support directors. As a result 

of these efforts, we received comments 

that helped us develop this NPRM.54

In recent years, OCSE received a 

number of inquiries asking whether a 

State IV–D agency may close a case that 

has been transferred to a Tribal IV–D 

program and under what circumstances. 

OCSE responded to those inquiries in 

Policy Interpretation Question Tribal 

(PIQT) 05–01.55 PIQT 05–01 clarified 

that a State may transfer a case to a 

Tribe if the custodial parent wishes to 

receive services from the Tribal IV–D 

agency rather than from the State IV–D 

agency, and requests that the case be 

transferred or consents to the transfer. 

The guidance stated that such transfers, 


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56For further information see PIQ–00–03, 

available at: http://www.acf.hhs.gov/programs/cse/

pol/PIQ/2000/piq-00-03.htm, and PIQ–99–03, 

available at http://www.acf.hhs.gov/programs/cse/

pol/PIQ/1999/piq-9903.htm. 

at the request of or with the consent of 

the custodial parent, may be appropriate 

if there are no assigned arrearages owed 

to the State. In other words, under 

existing policy, a State could close and 

transfer cases to Tribes only if there 

were no assigned arrearages owed to a 

State that required the State to maintain 

an open IV–D case. Similarly, if a Tribe 

had a current case but the parent 

requested that it be transferred to a State 

IV–D program and the Tribe no longer 

had an interest in the action, the Tribe 

could close and transfer the case to the 

State IV–D program. The current policy 

does not address cases where there is no 

current assignment. The State may 

transfer such cases to a Tribal IV–D 

agency for appropriate action. 

Proposed § 303.11(b)(21) will permit a 

State the flexibility to close the case if 

it has been transferred to a Tribal IV–D 

agency, regardless of whether there is a 

State assignment. It will also allow a 

State to reduce data management 

demands by eliminating duplicate and 

outdated cases and to better allocate its 

limited resources to other enforcement 

activities. Before a case can be 

transferred to a Tribal IV–D agency, we 

propose that either the recipient of 

services must request the transfer or the 

State must notify the recipient that the 

case will be transferred to the Tribal IV– 

D agency and obtain the recipient’s 

consent. We also propose that a State 

deems consent if the recipient does not 

respond to a notice to transfer within 60 

calendar days from the date notice was 

provided. Although not a condition of 

eligibility, some Tribal IV–D 

applications for services contain a box 

that may be checked to affirm a Tribal 

applicant’s consent to have the case 

transferred from a State IV–D agency to 

a Tribal IV–D agency. This may be 

regarded as sufficient proof of consent 

for transferring and closing the case. We 

specifically request comments from 

States, Tribes, and other stakeholders on 

this additional flexibility for States to 

transfer and close cases notwithstanding 

a State assignment, and will consider all 

comments and recommendations 

received before issuing the final rule. 

Finally, we propose the State notify the 

recipient that the case has been 

transferred to the Tribal IV–D agency. 

A State has the authority to accept 

less than the full payment of stateassigned arrearages on the same grounds 

that exist for compromise and 

settlement of any other judgment owed 

to the State.56 Therefore, a State may 

enter into an agreement with a Tribal 

IV–D agency to permit the Tribe to 

compromise any state-assigned 

arrearages. 

Any State debt owed under the preexisting order remains in effect and 

legally binding. Once a case is closed 

and transferred to a Tribal IV–D 

program, the Tribal IV–D program will 

continue to adhere to Federal 

regulations and must extend the full 

range of services under its IV–D plan as 

required by § 309.120(a). We strongly 

urge the State and the Tribe to work 

together in these instances to reach 

agreement on steps to take that will 

result in effective intergovernmental 

cooperation, smooth case transfer, less 

confusion about case ownership, and 

ongoing support payments to families, 

including the possibility of 

compromising arrearages permanently 

assigned to the State and/or entering 

into repayment agreements. 

We believe there is little likelihood a 

State can successfully perform IV–D 

functions in many Tribal cases, 

especially in cases with default child 

support orders. Although some child 

support enforcement services have been 

provided through cooperative 

agreements between Tribes and States 

and have helped bring child support 

services to some Tribal families, Indian 

families may experience some difficulty 

in getting IV–D services from State IV– 

D programs. 

One reason is because the authority of 

State and local government is either 

limited or nonexistent within much of 

Tribal territory, while jurisdiction is 

concurrent in other areas, as in States 

that adhere to Public Law 83–280. In 

addition, practical obstacles exist to 

State enforcement against Tribal 

members, particularly those low-income 

obligors who lack formal employment or 

who work in a tribally-owned business. 

Finally, Tribal IV–D programs 

incorporate certain tools and procedures 

not available to State IV–D programs, 

such as policies permitting in-kind 

support payments or traditionally-based 

dispute resolution procedures. 

In order to better serve Indian 

families, we propose a new criteria 

under § 303.11(c) that will require a 

State IV–D agency to close a Medicaid 

reimbursement referral based solely 

upon health care services, including 

contract health services, provided 

through an Indian Health Program. The 

IHS is responsible for providing health 

care to American Indians and Alaska 

Natives under the Snyder Act. See 25 

U.S.C. 13 (providing that the Bureau of 

Indian Affairs (BIA) will expend funds 

as appropriated for, among other things, 

the ‘‘conservation of health’’ of Indians); 

42 U.S.C. 2001(a) (transferring the 

responsibility for Indian health care 

from BIA to IHS). IHS provides such 

care directly through federal facilities 

and clinics, and also contracts and 

compacts with Indian tribes and tribal 

organizations to provide care pursuant 

to the Indian Self Determination and 

Education Assistance Act (ISDEAA), 

Pub. L. No. 93–638 (codified at 25 

U.S.C. 458aaa–18(b)). In addition, the 

Snyder Act authorizes IHS to pay for 

medical care provided to IHS 

beneficiaries by other public and private 

providers as contract health services 

(CHS). The term ‘‘Indian Health 

Program,’’ defined at 25 U.S.C. 1603(12), 

encompasses the different ways health 

care is provided to American Indians 

and Alaska Natives. 

Pursuant to 25 U.S.C. 1621e, IHS and 

Indian tribes seek to ensure maximum 

resources to perform this responsibility, 

and require individuals with third party 

insurance pay for health care services 

provided to IHS-eligible individuals 

through health programs administered 

under IHS authority, including contract 

health services (CHS). Third party 

payers or alternate resources include 

Medicaid, private insurance, or other 

health benefits coverage for individuals 

who receive health care services 

through such programs. An IHS-eligible 

patient is not considered a third party 

payer, and his/her resources are not 

considered to be alternate resources 

under 25 U.S.C. 1621e. Likewise, the 

parents of an IHS-eligible minor are not 

considered alternate resources under 25 

U.S.C. 1621e. Custodial and 

noncustodial parents of IHS-eligible 

patients (or their resources) should not 

be distinguishable for purposes of 

payment. In other words, the IHS will 

not seek payment from noncustodial 

parents of IHS-eligible children who 

receive health care services provided 

through Indian Health Programs. 

Consistent with the IHS authority, the 

Centers for Medicare & Medicaid 

Services (CMS) propose conforming 

changes to Medicaid policy concerning 

third party liability and medical support 

with respect to IHS-eligible children 

who receive health services, including 

CHS, through an Indian Health Program. 

Under existing IHS policy, noncustodial 

parents are not considered liable third 

parties and their assets are not available 

for medical support for such services. 

Recognizing that the IHS has primary 

responsibility for determining the 

medical support obligations from Indian 

families for services provided through 

Indian Health Programs, CMS proposes 

to amend 42 CFR 433.152(b)(1), 

consistent with IHS policy, to require 

that State Medicaid agencies not refer 


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57For further information, see Laudan Y. Aron’s 

report, Health Care Coverage Among Child SupportEligible Children (December 2002), available at 

http://aspe.hhs.gov/hsp/CSE-health-ben02/

index.htm; Laura Wheaton’s report, Nonresident 

Fathers: To What Extent Do They Have Access to 

Private Health Insurance?, available at http://

fatherhood.hhs.gov/ncp-health00/index.htm; Cara 

James, Karyn Schwartz and Julia Berndt, A Profile 

of American Indians and Alaska Natives and Their 

Health Coverage (June 2000), available at: http://

www.kff.org/minorityhealth/7977.cfm; Sorensen, 

Elaine, A National Profile of Nonresident Fathers 

and Their Ability to Pay Child Support (1997), 

available at: http://www.jstor.org/stable/10.2307/

353782; Elaine Sorensen, Liliana Sousa, and Simon 

Schaner, Assessing Child Support Arrears in Nine 

Large States and the Nation (2007), available at: 

http://aspe.hhs.gov/hsp/07/assessing-CS-debt/; and 

U.S. Department of Interior, Bureau of Indian 

Affairs, 2005 American Indian Population and 

Labor Force Report, available at: http://

www.bia.gov/cs/groups/public/documents/text/idc001719.pdf. 

58For further information, see Laudan Y. Aron’s 

report, Health Care Coverage Among Child Supportcases for medical support enforcement 

services when the Medicaid referral is 

based solely upon health care services, 

including contract health services, 

provided through an Indian Health 

Program (as defined at 25 U.S.C. 

1603(12)) to a child who is eligible for 

health care services from the Indian 

Health Service (IHS). This policy 

remedies the current inequity of holding 

noncustodial parents personally liable 

for services provided through the Indian 

Health Programs to IHS-eligible families 

that qualify for Medicaid, while not 

holding noncustodial parents personally 

liable for the same services for IHSeligible families that do not qualify for 

Medicaid. Research indicates that most 

noncustodial parents of IHS-eligible 

children who qualify for Medicaid have 

difficulty meeting their child support 

obligations.57 Requiring them, but not 

parents of children who do not qualify 

for Medicaid, to use their personal 

resources to pay for health care 

provided through Indian Health 

Programs is unreasonable. To be clear, 

CMS, like IHS, will continue to require 

that State agencies seek reimbursement 

from any private insurance or other 

health care coverage purchased for the 

child, including coverage purchased by 

the noncustodial parent out of the 

parent’s personal assets. The proposed 

revision to 42 CFR 433.152(b)(1) also 

eliminates reference to 45 CFR Part 306 

which was repealed in 1996. 

In light of the IHS’s policy, OCSE and 

CMS propose that State Medicaid 

agencies not refer such cases and that 

IV–D agencies that receive Medicaid 

reimbursement referrals based solely on 

health care services, including contract 

health services, provided to IHS-eligible 

children through an Indian Health 

Program, will be required to close such 

cases, as these cases will have been 

inappropriately referred. Pursuant to 

IHS’ policy and CMS’ proposed policy, 

there would be no medical child 

support reimbursement obligation to 

pursue against any custodial or 

noncustodial parents, and any recovery 

from insurance policies would be 

outside the scope of the State IV–D 

agencies’ authority. It is our 

understanding that such Medicaid 

referrals are common. The proposed 

corresponding child support case 

closure rule will make clear that State 

IV–D agencies should not seek medical 

child support based on the Medicaid 

referrals. 

Finally, we propose to redesignate 

existing § 303.11(c) as § 303.11(d) and to 

reorganize the provisions into 

subparagraphs for clarity. 

Under § 303.11(d)(1) and (2), we also 

propose conforming changes to address 

renumbered and proposed provisions 

that either require notice to the recipient 

of services or, the initiating agency in an 

intergovernmental case that meet the 

criteria for closure, 60 calendar days 

prior to closing the case of the State’s 

intent to close the case. In addition, we 

have added a proposal in § 303.11(d)(4) 

for a case meeting the criteria for closure 

in paragraph (b)(20) or (c) that the IV– 

D agency must notify the referring 

agency, in a record, 60 calendar days 

prior to closure of the case of the State’s 

intent to close the case. Additionally, 

we propose in § 303.11(d)(5) that if the 

referring agency does not respond to the 

notice or does not provide information 

demonstrating that child support 

services are needed for the case, the IV– 

D agency may close the case. However, 

when the case is closed, the IV–D 

agency must notify the recipient of 

services that the case was closed under 

proposed paragraph (d)(6). 

In § 303.11(d)(6), we are also 

proposing a new requirement for cases 

closed pursuant to paragraphs (b)(13) 

and (d)(5). The State must notify the 

recipient that the case has been closed 

within 30 calendar days of closing the 

case. This notice must also provide 

information regarding reapplying for 

additional child support services and 

the consequences of receiving IV–D 

services, including any State fees, cost 

recovery, and distribution policies. If 

the recipient reapplies for child support 

services in a case that was closed 

pursuant to paragraph (b)(13), the 

recipient will complete a new 

application for IV–D services and pay 

any applicable fee. If the recipient 

reapplies for services in a case that was 

closed pursuant to paragraph (d)(5), the 

recipient will complete a new 

application for IV–D services but will 

not be charged a fee since the case was 

originally opened through an 

inappropriate referral. We specifically 

seek comments related to these postclosure notices. 

It is important to note that after a IV– 

D agency has closed a case pursuant to 

the procedures outlined in § 303.11, the 

former recipient of services may reapply 

for services at any time pursuant to the 

last sentence of existing § 303.11(c), 

which we propose to make a new 

subparagraph and redesignate as 

§ 303.11(d)(7). Given that a State will 

have more discretion to close 

unproductive cases under the proposed 

rule, we request comments on 

redesignated § 303.11(d)(7) and whether 

the language is sufficiently clear to 

ensure that a former recipient of 

services is able to reapply for and open 

a IV–D case. Finally, we redesignated 

existing paragraph (d) as proposed 

paragraph (e). 

Section 303.31: Securing and Enforcing 

Medical Support Obligations 

While the child support program has 

long been involved with securing health 

care coverage for children, in the past, 

we have focused narrowly on private 

coverage available through a 

noncustodial parent’s employer rather 

than taking full advantage of the many 

coverage options available to children. 

However, the Deficit Reduction Act of 

2005 (DRA) (Pub. L. 109–171) made 

significant improvements to medical 

child support by emphasizing the 

importance of securing health care 

coverage. The DRA provided that the 

child support agency may look to either 

or both parents to provide medical 

support, including health care coverage 

and cash payments to defray the child’s 

health care costs. The DRA recognized 

that custodial families are a common, 

and in many cases, a preferred source of 

insurance coverage for their children 

because it is often simpler for children 

to be on the same policy as their 

residential parent. The DRA also 

acknowledged that the cost of coverage 

is a critical consideration. However, 

existing medical support regulations 

focus narrowly on private insurance and 

do not allow families the opportunity to 

choose from the full range of health care 

coverage options that may be available 

to them. 

In general, families in the Child 

Support Enforcement program have 

limited access to employer-sponsored 

private insurance and are 

disproportionately eligible for Medicaid 

and the Children’s Health Insurance 

Program (CHIP).58 A national research 


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Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 68565 

Eligible Children (2002), available at http://

aspe.hhs.gov/hsp/CSE-health-ben02/index.htm. 

59For further information, see Laura Wheaton’s 

report, Nonresident Fathers: To What Extent Do 

They Have Access to Private Health Insurance? 

(2000), available at http://fatherhood.hhs.gov/ncphealth00/index.htm. 

60 In 1999, the average premium for family 

coverage was $5,791 per year. In 2013, the average 

premium for family coverage was $16,351 per year. 

For further information, see Kaiser/HRET Survey of 

Employer-Sponsored Health Benefits, 2013, Exhibit 

1.11, available at: http://kff.org/report-section/ehbs2013-section-1/. 

61Center for Policy Research, Medical Child 

Support: Strategies Implemented by States, 

Prepared under Office of Child Support 

Enforcement Grant #08–C0067 to Texas Office of 

the Assistant Attorney Division of Child Support 

(2009). 62See 31 CFR 285.3(c)(6). 

63QUICK stands for Query Interstate Cases for 

Kids. It is a secure web application that allows 

child support workers to view financial, case status, 

and case activities information in another State’s 

child support case in real time. 

64State Services Portal is an OCSE Internet-based 

infrastructure that supports State worker access to 

child support services via a secure, single sign-on 

interface. A State worker can access multiple 

applications through this system. 

65Child Support Enforcement Network or 

CSENet, provides a standardized format for State 

Child Support systems to generate and process 

automated interstate child support information. 

study in the late 1990s, the most recent 

study of its kind, determined that half 

of noncustodial parents who were not 

currently covering their children did not 

have access to employer-sponsored 

family coverage at all, before even 

considering cost.59 Since 1999, the 

average cost of private family coverage 

has nearly tripled.60

An analysis of selected States finds 

that issuing a National Medical Support 

Notice to the noncustodial parent’s 

employer results in the child being 

enrolled in a health plan only 10 to 23 

percent of the time. Therefore, although 

States have worked hard and committed 

substantial resources toward increasing 

the percentage of child support orders 

that include medical support from 60 

percent to 80 percent since 2002, 

medical support is actually provided as 

ordered in only 30 percent of cases.61

While employer-sponsored and other 

private insurance is important for 

children who have access to it, most 

uninsured children in custodial families 

(79 percent) are eligible for Medicaid or 

CHIP. Therefore, to make sure that 

children get the coverage they need, the 

child support system needs to be in a 

position to take advantage of the full 

range of coverage options. 

OCSE proposes to amend § 303.31 to 

provide a State with flexibility to permit 

parents to meet their medical support 

obligations by providing health care 

coverage or payments for medical 

expenses that are reasonable in cost and 

best meet the health care needs of the 

child. Section 303.31 is amended by 

removing restrictions that exclude the 

consideration of Medicaid, CHIP, and 

other State health programs as part of 

medical support and by providing 

greater flexibility to a State in defining 

the reasonable cost of health insurance. 

In accordance with section 452(f) of the 

Act, the proposed changes provide a 

State with options to define medical 

support to include private health 

insurance, other health care coverage 

options such as Medicaid, CHIP, or 

other coverage plans available in the 

State, and cash medical support. 

In § 303.31(a)(2) we propose to clarify 

that health insurance includes public 

and private insurance. This is a 

clarification, as ‘‘health insurance’’ 

already includes both public and private 

coverage. 

In § 303.31(a)(3) we propose to omit 

the requirement that the cost of health 

insurance be measured based on the 

marginal cost of adding the child to the 

policy. In situations in which a parent 

may be required to purchase a family 

health insurance policy, it may be 

appropriate to consider the full cost the 

parent must pay for the coverage when 

determining if the coverage is 

reasonable in cost. Therefore, this 

proposed change gives a State 

additional flexibility to define 

reasonable medical support obligations. 

Next, § 303.31(b) requires the State 

IV–D agency to petition the court for 

private health insurance that is 

reasonable in cost. OCSE proposes to 

remove the limitation in paragraphs 

(b)(1), (2), (3)(i), and (4) restricting this 

to private health insurance to allow a 

State to take advantage of both private 

and public health insurance options to 

meet children’s health care needs, and 

emphasize the role of state child 

support guidelines in setting child 

support orders that address how parents 

will share the costs associated with 

covering their child. OCSE particularly 

requests comments regarding the IV–D 

program’s role in carrying out its 

medical support statutory 

responsibilities, including the roles of 

cost allocation between parents and 

enrolling children in coverage. 

Section 303.72: Requests for Collection 

of Past-Due Support by Federal Tax 

Refund Offset 

The Federal Tax Refund Offset 

Program was enacted into law to collect 

past-due child support payments from 

the Federal tax refunds of parents who 

have been ordered to pay child support. 

A State is required to submit all cases 

that meet the criteria for the Federal Tax 

Refund Offset to OCSE for collection. In 

addition, under current OCSE 

regulations, a State must notify any 

other State that is enforcing the same 

case when that case is submitted for 

offset and when the initiating State 

receives an offset. However, according 

to the current Department of Treasury 

regulations, an initiating State is only 

required to notify other States if it 

receives an offset.62

In order to make the regulatory 

requirements for the Federal Tax Refund 

Offset more streamlined and more 

efficient, OCSE proposes to modify its 

notice requirements to make them 

consistent with those of the Department 

of Treasury. The proposed modification 

will eliminate a mandate that inundates 

States with unnecessary case file 

information and ultimately will make 

program management procedures in this 

area more efficient. 

States are required to submit all cases 

that meet specific criteria for Federal 

Income Tax Refund Offset for collection 

through the Federal Tax Refund Offset 

program. The Federal Tax Refund Offset 

program is a collaborative effort 

between OCSE, the Department of the 

Treasury, and State IV–D agencies. 

Current OCSE regulations at 

§ 303.72(d)(1) require a State, in 

interstate situations, to notify any other 

State involved in enforcing the support 

order when it submits the case for offset 

and when the State receives the offset 

amount. However, the United States 

Treasury regulations at 31 CFR 

285.3(c)(6) only require a State to notify 

any other State involved in enforcing 

the child support order when it receives 

the offset payment. In order to align 

these regulations with those of the 

United States Treasury, OCSE proposes 

to amend § 303.72(d)(1) by eliminating 

the phrase, ‘‘when it submits an 

interstate case for offset.’’ 

State IV–D agencies have shared that 

when a State certifies and submits an 

interstate case for tax refund offset, the 

information is not particularly helpful 

to any other State involved in enforcing 

the support order. If a responding State 

needs to know that a case has been 

submitted for tax refund offset, this 

information is usually available through 

the Federal Collections application or 

the QUICK application 63 accessed 

through the State Services Portal.64 For 

those States that have programmed for 

the transaction, this information may 

also be received through the Child 

Support Enforcement Network 

(CSENet) 65 transaction that was 

developed to serve this purpose. OCSE 

believes that by discontinuing the 


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66 Government Accountability Office, Wage 

Withholding Not Fulfilling Expectations, HRD–92– 

65BR (1992), available at: http://www.gao.gov/

products/HRD-92-65BR. 

67U.S. Department of Health and Human 

Services, Office of Inspector General, An Employer 

Perspective: Fragmentation of State Practices 

Impair Ability of Employers to Effectively 

Implement Wage Withholding Process (1991). 

68For further information, see the Committee on 

Ways and Means, U.S. House of Representatives, 

Summary of Welfare Reforms Made by Public Law 

104–193, Nov. 6, 1996, available at: http://

www.access.gpo.gov/congress/wm015.txt, Section 

314. 

69The GAO report, Child Support Enforcement: 

Clear Guidance Would Help Ensure Proper Access 

to Information and Use of Wage Withholding by 

Private Firms, GAO–02–349 (2002), available at: 

http://www.gao.gov/new.items/d02349.pdf. 

70 64 Fed. Reg. 6237, 6244 (Feb. 9, 1999) (original 

quote incorrectly refers to section 466(b)(6)(A)(iii), 

however, reference is to requirements of section 

466(b)(6)(A)(ii); see also AT–99–01, February 10, 

1999, available at: http://www.acf.hhs.gov/

programs/cse/pol/AT/1999/at-9901.htm. 

71Available at: http://www.acf.hhs.gov/programs/ 

cse/pol/PIQ/1999/piq-9902.htm. 

72Available at: http://www.acf.hhs.gov/programs/ 

cse/pol/PIQ/2001/piq-01-01.htm. 

73Available at: http://www.acf.hhs.gov/programs/ 

cse/pol/PIQ/2003/piq-03-03.htm. 

requirement for a State to notify other 

States involved in enforcing a support 

order when it submits an interstate case 

for tax refund offset, a State will not 

inundate other States with unnecessary 

information and will ultimately save 

both time and resources. 

Section 303.100: Procedures for Income 

Withholding 

Recognizing that over two-thirds of 

child support payments are collected by 

employers through income withholding, 

we propose to standardize and 

streamline income withholding rules. 

These proposals will increase child 

support collections and ensure that 

employers are not unduly burdened by 

this highly effective enforcement tool. 

We propose making changes in 

§ 303.100 to address two of the 

problems employers have encountered 

in efficiently executing their 

responsibilities for income withholding: 

The inconsistent use of the OMBapproved Income Withholding for 

Support form and the transmission of 

payments on non-IV–D orders to the 

appropriate SDU. 

Child support payment processing has 

changed dramatically in the past 30 

years. In the 1970s, child support 

payments were paid by noncustodial 

parents, primarily in cash or by check, 

directly to courts or local child support 

agencies. In the 1980s and early 1990s, 

Congress passed a series of laws that 

expanded and strengthened employer 

income withholding as an enforcement 

tool. The Child Support Enforcement 

Amendments of 1984 (Pub. L. 98–378), 

for example, added required procedures 

for mandatory income withholding, and 

the Family Support Act of 1988 (Pub. L. 

100–485) required automatic income 

withholding for most child support 

orders. As States and employers 

implemented the income withholding 

provisions, they encountered barriers to 

payment processing. A 1992 General 

Accounting Office (now the Government 

Accountability Office) (GAO) report, 

Interstate Child Support: Wage 

Withholding Not Fulfilling Expectations, 

highlighted pervasive problems with the 

system in place. According to the GAO 

report, the lack of uniform withholding 

procedures across States and counties, 

the failure of timely service of 

withholding orders, and the tendency of 

States to involve the courts or require 

additional procedures in the process 

hampered effectiveness. These problems 

were compounded in interstate cases.66

Similarly, a 1991 Office of Inspector 

General report on the employer 

experience with income withholding 

found that employers were encountering 

difficulties implementing income 

withholding in an environment where 

State standards and procedures were 

confusing and varied from State to 

State.67

In response to employer requests to 

minimize employer burden, PRWORA 

included new provisions to strengthen 

income withholding, including 

standardizing procedures.68

Specifically, section 466(b)(6)(A)(ii) of 

the Act requires that the notice given to 

the employer for income withholding in 

all IV–D cases shall be ‘‘in a standard 

format prescribed by the Secretary, and 

contain only such information as may 

be necessary for the employer to comply 

with the withholding order.’’ Section 

466(a)(8)(B)(iii) of the Act requires that 

section 466(b)(6)(A)(ii) of the Act be 

applicable also to non-IV–D income 

withholding orders. In addition, section 

454A(g)(1)(A)(ii) of the Act requires that 

a State transmit orders and notices for 

income withholding to employers (and 

other income withholders) using 

uniform formats prescribed by the 

Secretary. As noted by the GAO in its 

2002 report, these provisions clearly 

require all individuals and entities to 

use the form developed by the Secretary 

of HHS to notify employers of the 

income withholding order for child 

support in all IV–D and non-IV–D 

cases.69

In response to the PRWORA directive 

to prescribe a standard format for 

income withholding, the Secretary of 

HHS developed the OMB-approved 

Income Withholding for Support (IWO) 

form (also referred to as the OMBapproved form). The interim final rule, 

45 CFR 303.100(e)(1), issued on 

February 9, 1999, implemented section 

466(b)(6)(A)(ii) of the Act requiring the 

use of the OMB-approved form (OMB 

0970–0154). The preamble to the rule 

states as follows: 

Paragraph (f) [of 45 CFR 303.100] is 

redesignated as paragraph (e). We are 

revising new paragraph (e)(1) by adding 

‘‘using the standard Federal format’’ after the 

word ‘‘notice’’. We are making this revision 

to conform to section 466(b)(6)(A)(iii) of the 

Act (sic), which requires the States to issue 

income withholding notices in a standard 

format prescribed by the Secretary. On 

January 27, 1998, the Office of Child Support 

Enforcement distributed this standard 

income withholding form to the States in 

OCSE–AT–98–03 (OMB No. 0970–0154).70

The OMB-approved form, though 

used consistently by State IV–D 

agencies, is not used universally in nonIV–D cases by other entities, which is 

contrary to the requirement in section 

466(b)(6)(A) of the Act. OCSE issued 

policy in 1999, 2001, and 2003 to clarify 

the requirements for issuing and 

complying with the OMB-approved 

form and complying with the child 

support order in OCSE PIQ–99–02, 

‘‘Order/Notice to Withhold Income for 

Child Support,’’ 71 OCSE PIQ–01–01, 

‘‘Clarification on Use of the Federal 

Order/Notice to Withhold Income for 

Child Support,’’ 72 and OCSE PIQ–03– 

03, ‘‘Requirements for Issuing and 

Complying with the Federal Income 

Withholding Form.’’ 73 These policies 

made it clear that the OMB-approved 

form must be used in all income 

withholding cases. Despite this 

guidance, employers continue to raise 

concerns to OCSE that they routinely 

receive court documents and divorce 

decrees with income withholding 

instructions that are frequently difficult 

to understand and are not accompanied 

by the OMB-approved form. 

Upon receipt of the OMB-approved 

form, the employer must determine if 

the form is regular on its face, meaning 

the employer determines that the sender 

has correctly followed the instructions 

on the form. Failure of individuals, 

private attorneys, and even some courts 

and States to use the OMB-approved 

form results in confusion, delays, and 

costly data processing for employers. To 

address this problem, we propose 

clarifications in two places in the 

regulations. Currently, § 303.100(e) 

requires a State to use ‘‘the standard 

Federal format’’ when sending notice to 

employers to initiate income 

withholding on IV–D cases. In order to 

be as clear as possible, we propose 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
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74For further information, see Kye Lippold and 

Elaine Sorensen, Strengthening Families Through 

Stronger Fathers: Final Impact Report for the Pilot 

Employment Programs (2011), available at: http://

www.urban.org/UploadedPDF/412442- 

Strengthening-Families-Through-StrongerFathers.pdf; Daniel Schroeder and Nicholas 

Doughty, Texas Non-Custodial Parent Choices: 

Program Impact Analysis (2009), available at: 

http://www.utexas.edu/research/cshr/pubs/pdf/

NCP_Choices_Final_Sep_03_2009.pdf; and Center 

for Policy Research and Policy Studies, Inc., Child 

Access and Visitation Programs: Participant 

Outcomes: Program Analysis (2007), available at: 

http://www.acf.hhs.gov/programs/cse/pol/DCL/

2007/dcl-07-15a.pdf. 

changing this phrase to ‘‘the required 

OMB-approved Income Withholding for 

Support form.’’ 

We also propose requiring the use of 

the OMB-approved form in a new 

provision. In order to ensure that 

employers receive this standard form 

when processing income withholding, 

regardless of the type of entity sending 

the income withholding request and 

regardless of whether the case is IV–D 

or non-IV–D, we propose adding a new 

paragraph (h) under § 303.100 titled 

‘‘Notice to employers in all child 

support orders,’’ which imposes this 

requirement. 

While the language in the OMBapproved Income Withholding for 

Support form must appear verbatim 

when transmitted to an employer, OCSE 

recognizes and accepts that the variety 

of form-generation tools used may result 

in minor formatting variations to the 

OMB-approved form (e.g., inability to 

generate check boxes, different fonts, 

shading, and spacing). Variations to the 

form that are not acceptable, however, 

include addition or deletion of data or 

altering the general location of 

information on the OMB-approved form. 

State laws may require States to provide 

employers and obligees with certain 

state-specific income withholding 

provisions. In these situations, States 

may include this information on the 

OMB-approved form in the section for 

Additional Information as directed in 

the instructions on the use of the form. 

The second payment processing issue 

addressed in this section is the 

transmission of income withholding 

payments from employers to SDUs. 

Sections 454B and 466(b)(5) of the Act 

require employers to send income 

withholding payments to the 

appropriate SDU, regardless of whether 

the case is IV–D or non-IV–D. However, 

OCSE has received ongoing complaints 

from employers about income 

withholding orders that instruct the 

employer to send child support 

payments to individuals or entities 

other than the SDU. The most common 

examples, particularly in respect to nonIV–D cases, include instructions to send 

income withholding payments to 

custodial parents, courts, private 

collection agencies, or private attorneys. 

Bypassing the SDU in the income 

withholding process creates a 

significant burden on employers 

because these income withholding 

payments must be processed manually. 

In addition, when payments are 

diverted from the SDU, noncustodial 

parents do not receive proper credit for 

the portion of income withheld to pay 

for child support, payments to families 

are delayed, and confusion related to 

payment allocation is created, 

particularly in multiple-family 

scenarios. 

Under current § 303.100(e)(1)(ii), 

employers are required to send all 

payments on IV–D cases to the SDU, 

however, income withholding payments 

on non-IV–D orders are not addressed in 

the rule. Therefore, we propose to state 

explicitly under new paragraph 

§ 303.100(i), that income withholding 

payments on non-IV–D cases must be 

directed through the SDU. 

Section 304.20: Availability and Rate of 

Federal Financial Participation 

We recognize that existing child 

support regulations governing 

expenditures subject to Federal 

financial participation (FFP) are out of 

date and do not reflect a growing body 

of research that supports the 

effectiveness of a range of strategies that 

can help strengthen the ability and 

willingness of noncustodial parents to 

support their children. Accordingly, we 

propose to amend the regulations to 

increase the flexibility of State IV–D 

agencies to receive Federal 

reimbursement for cost-effective 

practices that increase the effectiveness 

of standard enforcement activities. As 

the program has evolved over the past 

decade, many State Child Support 

Enforcement programs have already 

implemented these strategies. 

Additionally, there is some 

uncertainty among some States about 

what expenditures are eligible for 

Federal reimbursement. To update old 

regulations, respond to State requests to 

allow Federal reimbursement for a 

broader range of activities that can 

increase collections, and address the 

uncertainty about allowability of 

expenditures, the proposed rule clarifies 

that FFP is available for necessary and 

reasonable expenditures properly 

attributed to the Child Support 

Enforcement program for services and 

activities designed to carry out the title 

IV–D State plan, including obtaining 

child support, locating noncustodial 

parents, and establishing paternity. 

Research supports a range of costeffective strategies that can help move 

nonpaying cases into paying status and 

increase regular payments.74 Over the 

past decade, State, Tribal, and local 

Child Support Enforcement programs 

have updated their program policies, 

practices, and strategies to collect more 

child support payments for families by 

addressing some of the underlying 

reasons for nonpayment. For example, 

21 States set child support obligations 

based on current earnings and modify 

the order when earnings change; 44 

States compromise child support debt 

owed to the State; and 38 States have 

eliminated any legal standard that treats 

incarceration as ‘‘voluntary 

unemployment.’’ In addition, a number 

of States, such as Texas, Tennessee, and 

Oregon, recognizing the relationship 

between payment of child support and 

playing an active parenting role, address 

parenting time as part of their State 

child support guidelines. 

As States have begun to incorporate 

programs and activities to supplement 

their law enforcement practices for 

enforcing child support, we recognize 

that existing child support regulations 

governing the availability of FFP for 

child support expenditures, §§ 304.20– 

304.23, are out of date. Federal financial 

participation represents the Federal 

match available to reimburse a portion 

of the State’s operational expenditures 

incurred under the State IV–D plan. 

Currently, the regulations do not 

consistently recognize the range of costeffective approaches to increasing 

collections that complement traditional 

and often costly law enforcement 

practices such as contempt hearings, 

criminal prosecution, and jail. While 

there continues to be a role for these 

traditional law enforcement practices, 

the NPRM increases State flexibility 

within existing statutory authority to 

implement and receive reimbursement 

for necessary and reasonable activities 

properly attributed to the Child Support 

Enforcement program that complement 

standard automated tools and improve 

program outcomes. 

For the most part, the existing rules 

governing FFP were promulgated more 

than 30 years ago before modern 

program models were developed. These 

rules are formulated as a specific and 

limited list of ‘‘necessary’’ activities for 

which FFP is available. The existing 

rules do not clearly state that FFP also 

is available for activities to carry out the 

State plan that may not be on the list but 

are within the program’s statutory 

authority and are otherwise reasonable 

and properly attributed to the Child 

Support Enforcement program. For 


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68568 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 

75Available at: http://ecfr.gpoaccess.gov/cgi/t/

text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title02/

2cfr225_main_02.tpl. 

many years, States have regularly 

claimed and received reimbursement for 

such expenditures, but there continues 

to be some lingering uncertainty about 

whether FFP is available. Accordingly, 

we propose to amend the rules to make 

the standard clear that FFP is available 

for ‘‘necessary and reasonable 

expenditures properly attributed to the 

Child Support Enforcement program, 

including but not limited’’ to the 

activities listed in the rule. 

We are specifically requesting 

comments regarding the allowability of 

FFP for using electronic monitoring 

systems for child support purposes. 

These electronic monitoring systems 

may enable the noncustodial parent, 

cited for contempt of court for nonpayment of support, to work and pay 

child support as an alternative to 

incarceration. If the noncustodial parent 

is allowed to work, the family continues 

to receive needed income, and the 

accumulation of additional arrearages is 

avoided. We are interested in comments 

on how and under what circumstances 

child support programs would propose 

to use electronic monitoring devices for 

child support program purposes. 

Additionally, we are soliciting 

comments regarding the desirability to 

provide Federal reimbursement under 

the title IV–D program for the use of 

electronic monitoring systems in child 

support cases. 

We propose to amend subparagraph 

(a)(1) of § 304.20 to clarify that FFP is 

available for expenditures for child 

support services and activities necessary 

and reasonable to carry out the title IV– 

D State plan. This change reflects the 

OMB Cost Principles for State, Local, 

and Indian Tribal Governments (OMB 

Circular A–87), published at 2 CFR part 

225.75 Appendix A to 2 CFR part 225 

indicates that a State must ensure the 

funds are used in compliance with all 

applicable Federal statutory and 

regulatory provisions, costs are 

reasonable and necessary for operating 

these programs, and funds are not used 

for general expenses required to carry 

out other responsibilities of the State 

and its subrecipients. Additionally, the 

Appendix indicates that for costs to be 

allowable, they must be necessary and 

reasonable for proper and efficient 

performance and administration of 

Federal awards. It further defines that a 

cost is reasonable if, in its nature and 

amount, it does not exceed that which 

would be incurred by a prudent person 

under the circumstances prevailing at 

the time the decision was made to incur 

the cost. 

We also propose revisions to 

paragraph (b) of this section to specify 

that FFP is available for necessary and 

reasonable expenditures which are 

properly attributed to the Child Support 

program, such as development and 

dissemination of educational materials 

about the child support program, child 

support educators or liaisons, child 

support case management, domestic 

violence safeguards, referrals to other 

programs, and other cost-effective 

activities to help carry out the State 

plan. 

We propose changes to 

§ 304.20(b)(1)(viii)–(ix) which address 

the establishment of agreements with 

other agencies administering the titles 

IV–D, IV–E, XIX, and XXI programs, to 

recognize activities related to crossprogram coordination, client referrals, 

and data sharing when authorized by 

law. The proposed provisions include 

minor technical changes and specify the 

criteria necessary for these agreements. 

Proposed § 304.20(b)(1)(viii)(D) and (E) 

add to the list of criteria procedures to 

be used to coordinate services and 

agreements to exchange data as 

authorized by law. Proposed 

§ 304.20(b)(1)(ix) specifies that FFP is 

also available for the establishment of 

agreements with the CHIP program, 

along with the Medicaid program. 

Proposed revisions to 

§ 304.20(b)(1)(ix)(B) clarify that a 

criterion for the agreement is the 

procedures to be used to coordinate 

services. Proposed revisions to 

§ 304.20(b)(1)(ix)(C) specify that the 

criteria for agreements with Medicaid 

and CHIP agencies include provisions 

related to the exchange of data as 

authorized by law. 

For reasons cited above, we propose 

to amend § 304.20(b)(2) by clarifying 

that FFP is available for services and 

activities for the establishment of 

paternity, including but not limited to 

the specific activities listed in 

§ 304.20(b)(2). We propose to add 

educational and outreach activities to 

§ 304.20(b)(2)(vii) to clarify that FFP is 

available for IV–D agencies to educate 

the public and to develop and 

disseminate information on voluntary 

paternity establishment. We also 

propose to amend § 304.20(b)(3) by 

clarifying that FFP is available for 

services and activities for the 

establishment and enforcement of 

support obligations includes but is not 

limited to the specific activities listed in 

§ 304.20(b)(3). 

We are proposing to redesignate 

existing § 304.20(b)(3)(v) as 

§ 304.20(b)(3)(viii). We have added a 

paragraph (b)(3)(v) to allow FFP for bus 

fare or other minor transportation 

expenses to allow participation by 

parents in child support proceedings 

and related activities such as genetic 

testing appointments. 

In addition, we have specifically 

included new rule provisions under 

paragraph (b)(3)(vi) to authorize FFP for 

activities designed both to increase 

parents’ pro se access to child support 

proceedings and to encourage States to 

develop nonadversarial dispute 

resolution alternatives to a standard 

adjudicative hearing. The outcome of a 

child support proceeding has a 

substantial impact on parents’ financial 

circumstances and, in some States that 

conduct civil contempt proceedings, can 

result in jail time and loss of liberty for 

noncustodial parents. It is highly 

important to encourage informed 

participation by both parents in those 

proceedings. Most custodial and 

noncustodial parents in the IV–D 

caseload are not represented by private 

attorneys and are attempting to navigate 

legal proceedings on a pro se basis. At 

the same time, many States have sought 

to reduce the adversarial nature of child 

support proceedings in order to 

positively engage both parents, reduce 

conflict between the parents which can 

be harmful to their children, and 

increase compliance with support 

orders and customer satisfaction. In 

addition, resolving cases outside the 

court system can help reduce delays, 

and save money and court time. Thus, 

we have added paragraph (b)(3)(vi) to 

recognize that FFP is available to 

increase pro se access to adjudicative 

and alternative dispute resolution 

processes in IV–D cases. 

We also propose to add paragraph 

(b)(3)(vii) to allow FFP for de minimis 

costs associated with the inclusion of 

parenting time provisions entered as 

part of a child support order and 

incidental to a child support 

enforcement proceeding. Under State 

laws, child support and child access 

rights are legally separate and 

independent rights and responsibilities. 

While Congress has authorized the IV– 

D program to establish child support, 

and not to resolve child access disputes, 

we have concluded that the mere 

inclusion of a parenting time provision 

in a IV–D order when all parties are 

present at the proceeding and willingly 

agree to the provision should be allowed 

when the activity is incidental to the 

child support proceeding and the added 

cost is de minimis or nonexistent. 

In light of the research showing 

appreciable gains in child support 

payments when job services are made 

available to unemployed noncustodial 


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76Available at: http://www.acf.hhs.gov/programs/ 

cse/pol/AT/1981/at-8118.htm. 

parents, we propose to add paragraph 

(b)(3)(ix) to allow FFP for certain job 

services for noncustodial parents owing 

child support through the IV–D program 

that are reasonably expected to increase 

child support payments. Many State and 

local child support programs have 

developed partnerships to provide 

employment services for parents using a 

variety of funding streams, such as 

incentive payments, grants, TANF and 

Workforce Investment Act (WIA) 

funding, and private funding. However, 

State child support agencies have 

expressed concern that existing funding 

sources are inadequate to maintain a 

sufficient level of services on an 

ongoing basis and at scale. The paucity 

of sustainable resources available for 

noncustodial parent employment 

programs have limited child support 

agencies and courts trying to collect 

support from unemployed parents, 

leaving them with few effective options 

for securing child support for the 

children who need it. 

OCSE anticipates that most State 

child support agencies will purchase job 

services by entering into contracts with 

private and community-based 

employment, fatherhood, and prisoner 

re-entry programs, community action 

agencies, community colleges, or other 

service providers to deliver allowable 

job services, rather than offer the 

services in-house. However, this does 

not preclude a child support agency 

from providing job services to 

noncustodial parents directly. In 

addition, OCSE encourages child 

support agencies to develop and 

maintain partnerships with TANF, 

SNAP, workforce agencies, including 

Workforce Investment Boards, and 

American Job Centers to offer available 

job services to noncustodial parents 

whenever those resources are available. 

We also encourage State child support 

agencies to use all available resources 

with other organizations that can offer 

additional employment and training 

activities beyond those allowed under 

our rule. 

We propose to delete ‘‘and’’ at the end 

of § 304.20(b)(9) and to add ‘‘and’’ at the 

end of § 304.20(b)(11). Finally, we 

propose a new paragraph (b)(12) to 

allow FFP for the educational and 

outreach activities intended to inform 

the public, parents and family members, 

and young people who are not yet 

parents about the Child Support 

Enforcement program, responsible 

parenting and co-parenting, family 

budgeting, and other financial 

consequences of raising children when 

the parents are not married to each 

other. We believe that these educational 

and outreach activities are cost-effective 

strategies to teach the public about the 

financial and emotional consequences 

of parenting and provide information 

about child support services that may be 

properly attributed to the child support 

program. 

Section 304.23: Expenditures for Which 

Federal Financial Participation Is Not 

Available 

For paragraph (d), we are proposing to 

add ‘‘State and county employees and 

court personnel’’ as a technical 

clarification that Federal financial 

participation is not available for the 

education and training of personnel, but 

this provision does not apply to other 

types of education and training 

activities (such as those provided to 

parents, which are addressed in other 

rules). We will continue to pay FFP for 

the short-term training provided to IV– 

D staff, as well as reasonable and 

essential short-term training related to 

hospital-based voluntary paternity 

acknowledgment programs pursuant to 

§ 304.20(b)(2)(viii) and reasonable and 

essential short-term training of court 

and law enforcement staff assigned on a 

full or part time basis to support 

enforcement functions under the 

cooperative agreement pursuant to 

§ 304.21(a)(2). 

AT–81–18, ‘‘Definition of Short Term 

Training,’’ dated September 11, 1981, 

defines ‘‘short-term training’’ to be any 

training that would directly improve an 

individual’s ability to perform his or her 

current job or another IV–D-related 

job.76 However, short-term training is 

not related to providing a general 

education for an individual or training 

that is taken for the sole purpose of 

earning credit hours toward a degree or 

certificate. FFP is available under the 

above definition of short-term training 

regardless of the source of the training. 

Section 307.11: Functional 

Requirements for Computerized Support 

Enforcement Systems in Operation by 

October 1, 2000 

As discussed previously in the NPRM 

under the Case Closure section, Section 

459(h) of the Act provides that only 

benefits that are based upon 

employment remuneration are subject to 

child support garnishment. 

Supplemental Security Income (SSI) is a 

means-tested program that is not based 

upon remuneration from employment. 

Federal policy on child support 

garnishments recognizes these 

exceptions by clearly directing child 

support agencies not to collect against 

SSI benefits (either directly or from 

bank accounts). Currently OCSE 

estimates that about three percent of 

noncustodial IV–D parents are currently 

receiving SSI. 

Most State IV–D agencies, including 

California, Florida, Ohio, and 

Pennsylvania, have front-end 

procedures in place to prevent 

garnishment of exempt benefits, and all 

State IV–D agencies have back-end 

procedures in place to correct improper 

garnishments. To our knowledge, 

improper State garnishment is very rare. 

However, the harm to the beneficiaries 

can be severe. We think it is important 

to have procedures in place to ensure 

that these noncustodial beneficiaries do 

not have their SSI or other needs-based 

benefits garnished, and if these benefits 

are incorrectly garnished, to ensure that 

the funds are quickly refunded. In this 

NPRM, we are proposing to strengthen 

our policies and incorporate provisions 

to provide additional safeguards so lowincome noncustodial parents’ financial 

accounts are not garnished when they 

are only receiving these exempt 

benefits, which retain their character as 

exempt even after being deposited. 

We propose a minor editing revision 

to paragraph (c)(3) and add a new 

provision under subparagraph (c)(3)(i) 

to require a IV–D agency to develop 

automated procedures in its statewide 

computerized support enforcement 

system to identify cases which have 

been previously identified as involving 

a noncustodial parent who is a recipient 

of SSI to prevent automatic garnishment 

of the noncustodial parent’s financial 

account. We propose to extend similar 

protection to recipients of concurrent 

SSI and benefits under title II as we 

believe these noncustodial parents are 

in similar financial straits. The State 

must review these noncustodial parents’ 

financial accounts to determine whether 

there are available assets above 

subsistence level available to garnish, 

other than SSI or concurrent SSI and 

benefits under title II of the Act. We 

believe that these new procedures will 

provide safeguards for the beneficiary to 

ensure that his or her SSI or concurrent 

SSI and benefits under title II of the Act 

are not inappropriately garnished. 

We are also adding a new 

subparagraph (c)(3)(ii) to require a IV– 

D agency to have automated procedures 

in place to return funds to a 

noncustodial parent within 2 days after 

the agency determines that SSI or 

concurrent SSI and benefits under title 

II of the Act in the account have been 

incorrectly garnished. We believe that if 

SSI or concurrent SSI and benefits 

under title II of the Act have been 

garnished from a noncustodial parent’s 

financial account, the IV–D agency 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
68570 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 

77See comments to the Uniform Electronic 

Transactions Act (1999), section 2, Definitions, 

available at: http://www.law.upenn.edu/bll/

archives/ulc/uecicta/eta1299.htm. 

needs to have procedures to refund the 

monies quickly so that it does not cause 

undue economic hardship. We 

recognize there may be situations in 

which the noncustodial parent’s SSI or 

concurrent SSI and benefits under title 

II of the Act are garnished because the 

IV–D agency was not aware the 

recipient was receiving these benefits 

until after the beneficiary’s bank 

account is garnished. However, if this 

occurs, we believe that it is imperative 

that the refund is sent to the 

noncustodial parent within 2 days. We 

specifically seek comments on whether 

this time frame is reasonable, and ways 

that OCSE might be able to assist State 

IV–D agencies in meeting these 

requirements. 

SSI accounts managed by 

representative payees (individuals or 

organization appointed by SSA to 

receive benefits for someone who 

cannot manage or direct someone else to 

manage his or her benefits) are clearly 

identified by the financial institution as 

representative payee accounts, with the 

beneficiary having sole ownership of the 

funds in the account. The representative 

payee is identified as a financial agent 

on the account, and does not have an 

ownership interest in the account. 

Therefore the SSI beneficiaries with 

representative payees would be covered 

by the same protections and safeguards 

against bank account garnishment as an 

account held directly by the beneficiary. 

Request for Comments on Undistributed 

and Abandoned Collections 

A paramount policy goal for child 

support agencies is to distribute the 

child support collection to the family, 

and failing diligent efforts to do so, to 

return the payment to the noncustodial 

parent. Therefore, it is important for 

OCSE to ensure that State child support 

agencies are making concerted efforts to 

proactively locate the custodial parent 

or noncustodial parent, as well as 

making efforts to ensure that all 

collections are distributed. Therefore, in 

this NPRM, we ask State child support 

agencies to provide specific comments, 

including information about their 

policies and procedures related to both 

undistributable and abandoned child 

support collections and the efforts that 

States take both through the State child 

support agency and the State treasury 

office to maximize the probability that 

families receive the collections, or if 

that result cannot be achieved, that the 

payment is returned to the noncustodial 

parent. 

Topic 2: Updates To Account for 

Advances in Technology §§ 301.1, 

301.13, 302.33, 302.34, 302.50, 302.65, 

302.70, 302.85, 303.2, 303.5, 303.11, 

303.31, 304.21, 304.40, 305.64, 305.66, 

and 307.5 

As discussed earlier in the preamble, 

the second set of revisions proposed in 

this regulation encompasses updates to 

remove barriers to electronic 

communication and document 

management. Throughout the 

regulation, where appropriate, we 

propose removing the words ‘‘written’’ 

and ‘‘in writing’’ and inserting ‘‘record’’ 

or ‘‘in a record.’’ These simple changes 

will allow OCSE, States, and others the 

flexibility to use cost-saving and 

efficient technologies, such as email or 

electronic document storage, wherever 

possible. The proposed revisions to the 

regulation do not require a State to use 

electronic records for the specified 

purpose, but instead provide a State 

with the option to use electronic 

records, in accordance with State laws 

and procedures. 

The definition of ‘‘record’’ we propose 

in this regulation is taken from UIFSA 

2001, section 102(15). The UIFSA 

drafters adopted the definition from 

another uniform law, the Uniform 

Electronic Transactions Act (1999). 

‘‘‘Record’ means information that is 

inscribed on a tangible medium or that 

is stored in an electronic or other 

medium and is retrievable in 

perceivable form.’’ The Uniform 

Electronic Transactions Act describes 

this definition further: 

This is a standard definition designed to 

embrace all means of communicating or 

storing information except human memory. It 

includes any method for storing or 

communicating information, including 

‘‘writings.’’ A record need not be 

indestructible or permanent, but the term 

does not include oral or other 

communications which are not stored or 

preserved by some means. Information that 

has not been retained other than through 

human memory does not qualify as a record. 

As in the case of the terms ‘‘writing’’ or 

‘‘written,’’ the term ‘‘record’’ does not 

establish the purposes, permitted uses or 

legal effect which a record may have under 

any particular provision of substantive law. 

ABA Report on Use of the Term ‘‘Record,’’ 

October 1, 1996.77

Substituting the phrase ‘‘in a record’’ 

for ‘‘in writing’’ allows more flexibility 

for electronic options by preventing a 

record from being automatically denied 

legal effect or enforceability just because 

it is in an electronic format. In addition, 

the use of the word ‘‘record’’ is designed 

to be technologically neutral; the word 

equates an electronic signature with a 

hand signature and an electronic 

document (whether scanned or created 

electronically) with a paper document. 

It neither means that electronic 

documents or electronic signatures will 

be required, nor will it affect any 

Federal requirements for what 

documents must contain to be valid or 

enforceable, such as a signature. 

We are aware that not everyone has 

access to the latest technology. For that 

reason, wherever individual members of 

the public are involved, we generally 

have not proposed removing 

requirements that the information is 

provided in a written format. However, 

we invite comments on this approach 

and whether individual members of the 

public should be provided the option to 

request information ‘‘in writing’’ or ‘‘in 

a record’’, such as emails, text 

messaging, voice mails. In addition, we 

have not changed regulatory language 

where written formats are required by 

statute. We request comments on this 

approach as well, in general or 

referencing specific provisions. 

Finally, we acknowledge that some of 

the proposed revisions to insert the term 

‘‘record’’ may seem awkward. We 

propose using the term ‘‘record’’ 

because it maximizes flexibility and 

reflects terminology currently accepted 

within the child support community; 

however, we invite comments on this 

approach generally and request specific 

suggestions for alternatives. An example 

of an alternative approach might be for 

OCSE to define the terms ‘‘written’’ or 

‘‘in writing’’ in the regulations to 

include electronic formats. OCSE could 

then leave the existing regulatory 

language as is. This alternative approach 

would provide States the option to use 

electronic formats as may be permitted 

or limited by State law procedures and 

requirements. 

Part 301 (§§ 301.1 and 301.13): State 

Plan Approval and Grant Procedures 

We propose to make changes to two 

sections in part 301, ‘‘State Plan 

Approval and Grant Procedures.’’ First, 

in § 301.1, we propose amending the 

definition of ‘‘Procedures’’ by changing 

the phrase ‘‘written instructions’’ to 

‘‘instructions in a record.’’ This will 

allow instructions set forth under the 

State’s child support plan to be made in 

a perceivable form that is not limited to 

a written format. 

In addition, we propose inserting the 

definition for the term ‘‘record’’ (as 

discussed above). The use of the term 

‘‘record’’ is broader than the term 

‘‘written’’ and encompasses different 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 68571 

78Please note, as discussed under Topic 3, 

Technical Corrections, we also propose replacing 

the State employment security agency (SESA) with 

State workforce agency (SWA) in this section and 

§§ 303.3 and 308.2. 

ways of storing information, including, 

for example, in a written or an 

electronic document. 

The first sentence of the introductory 

paragraph of § 301.13, ‘‘Approval of 

State plans and amendments,’’ describes 

the State plan as consisting of written 

documents furnished by the State to 

cover its Child Support Enforcement 

program under title IV–D of the Act. We 

propose replacing the words ‘‘written 

documents’’ with the word ‘‘records.’’ 

The intent of this change is to allow for 

electronic submission, transmission, 

and storage of the State child support 

plan. When a State submits State child 

support plans electronically, it must 

ensure electronic signatures accompany 

the documents. 

Paragraphs (e) and (f), ‘‘Prompt 

approval of the State plan’’ and ‘‘Prompt 

approval of plan amendments,’’ 

respectively, discuss the deadline by 

which OCSE must make a determination 

on a State plan or State plan 

amendments submitted by the State, 

and allow for the OCSE regional 

program office and the State to agree to 

an extension on the deadline in ‘‘a 

written agreement.’’ We propose 

changing the words ‘‘a written 

agreement’’ in both provisions to ‘‘an 

agreement, which is reflected in a 

record.’’ These changes will enable 

OCSE regional program offices to secure 

from IV–D agencies agreements to 

extend an approval deadline for either 

a State plan or State plan amendments 

in an electronic record format. In 

addition, we propose a technical change 

to paragraph (f) to change ‘‘Regional 

Commissioner’’ to ‘‘Regional Office’’ for 

consistency with § 301.13. 

Part 302 (§§ 302.33, 302.34, 302.50, 

302.65, 302.70, and 302.85): State Plan 

Requirements 

We propose to make changes to 

several sections in part 302, ‘‘State Plan 

Requirements.’’ First, § 302.33(d)(2), 

which discusses the recovery of State 

costs of providing services in 

nonassistance cases, requires a State to 

develop a written methodology to 

determine standardized costs which are 

as close to actual costs as is possible. 

We propose changing the phrase 

‘‘written methodology’’ to 

‘‘methodology, which is reflected in a 

record.’’ This proposed change will 

afford a State record-keeping flexibility 

in developing a methodology for 

recovering standardized costs. 

Currently, the first sentence under 

§ 302.34 requires a State to enter into 

written agreements for cooperative 

arrangements under § 303.107 with 

appropriate courts, law enforcement 

officials, Indian tribes, or tribal 

organizations. We propose editing the 

phrase ‘‘written agreements’’ to read 

‘‘agreements, which are reflected in a 

record.’’ This will ensure that any 

cooperative arrangements entered into 

by the IV–D agency can be agreed upon 

in a record and will not be limited to a 

written format. This amendment does 

not change any of the requirements for 

the document to be legally effective or 

enforceable, such as a signature. 

Next, § 302.50 describes State 

requirements for the assignment of 

rights to support. Paragraph (b)(2) of 

that section requires a State to 

determine ‘‘in writing’’ the amount of an 

obligation, if there is no court or 

administrative order. We propose 

replacing the word ‘‘writing’’ with ‘‘a 

record’’ so that the State has greater 

flexibility in the format of this amount 

determination, according to its own 

State laws and guidelines procedures. 

We also propose changes in § 302.65, 

‘‘Withholding of unemployment 

compensation.’’ Paragraph (b) requires a 

State IV–D agency to enter into a written 

agreement with the SESA [State 

employment security agency] in its State 

for the purpose of withholding 

unemployment compensation from 

individuals with unmet support 

obligations.78 We propose amending the 

sentence by changing the phrase ‘‘a 

written agreement’’ to ‘‘an agreement, 

which is reflected in a record’’ and as 

previously explained in footnote 76, 

replace SESA with SWA. Additionally, 

§ 302.65(c)(3) requires State IV–D 

agencies to establish and use written 

criteria for selecting cases to pursue via 

the withholding of unemployment 

compensation for support purposes. We 

propose changing the words ‘‘written 

criteria’’ to ‘‘criteria, which are reflected 

in a record.’’ These changes will 

establish that the agreements States 

develop with SESAs and the criteria for 

selecting cases in which to pursue 

withholding unemployment 

compensation are not limited to written 

agreements or written criteria. Again, 

these amendments do not impact any of 

the requirements for the documents to 

be legally effective or enforceable, such 

as a signature. 

In § 302.70, ‘‘Required State laws,’’ 

paragraph (a)(5) describes the 

procedures for paternity establishment. 

Paragraph (a)(5)(v) discusses 

requirements for objecting to genetic 

testing results and states that if no 

objection is made, a written report of the 

test results is admissible as evidence of 

paternity without the need for 

foundation testimony or other proof of 

authenticity or accuracy. We propose 

changing the phrase ‘‘a written report of 

the test results’’ to ‘‘a report of the test 

results, which is reflected in a record.’’ 

We believe this change will provide 

greater flexibility and efficiency in 

admitting evidence of paternity. Please 

note that in this same provision, we 

have not proposed to eliminate the 

phrase ‘‘in writing’’ in the requirement 

that any objection to genetic testing 

results must be made in writing within 

a specified number of days before any 

hearing at which such results may be 

introduced into evidence. In this 

instance, the phrase ‘‘in writing’’ is 

statutorily prescribed, according to 

section 466(a)(5)(F)(ii) of the Act. 

The final proposed change under 

State Plan Requirements is in § 302.85 

on the ‘‘Mandatory computerized 

support enforcement system.’’ In the 

section describing the basis for OCSE to 

grant State waivers in regard to the 

mandatory computerized system, one of 

the requirements, described under 

§ 302.85(b)(2)(ii), mandates the State to 

provide written assurances that steps 

will be taken to otherwise improve the 

State’s Child Support Enforcement 

program. We propose amending 

§ 302.85(b)(2)(ii) by changing the phrase 

‘‘written assurances’’ to ‘‘assurances, 

which are reflected in a record.’’ This 

change will provide a State the option 

of communicating with OCSE 

electronically when providing the 

required assurances under this 

provision. 

Part 303 (§§ 303.2, 303.5, 303.11, and 

303.31): Standards for Program 

Operations 

We are proposing to make 

amendments to several provisions in 

part 303, ‘‘Standards for Program 

Operations.’’ In § 303.2, ‘‘Establishment 

of cases and maintenance of case 

records,’’ the regulation requires, under 

§ 303.2(a)(2), that the State IV–D agency 

send an application to an individual 

within no more than five working days 

of a written or telephone request. We 

propose replacing the phrase ‘‘a written 

or telephone request’’ with ‘‘a request 

made by telephone or in a record,’’ in 

order to allow for any requests for 

applications that are received by 

telephone or transmitted electronically, 

for example, by email or text. 

In this same section, we also propose 

changes to the requirements for 

applications for IV–D services, under 

§ 303.2(a)(3). Currently, this section 

defines an application as a written 

document provided by the State which 

. . . is signed by the individual 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
68572 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 

79Available at: http://www.acf.hhs.gov/programs/ 

cse/pol/PIQ/2009/piq-09-02.htm. 

applying for IV–D services. We propose 

lifting the restriction that applications 

only be in a written or paper format by 

replacing the phrase ‘‘written 

document’’ with ‘‘record.’’ We also 

propose amending the regulatory 

language to allow for electronic 

signature by inserting the phrase 

‘‘electronically or otherwise’’ after the 

word ‘‘signature.’’ The proposed 

sentence would state that an application 

is a record that is provided or used by 

the State which indicates that the 

individual is applying for child support 

enforcement services under the State’s 

title IV–D program and is signed, 

electronically or otherwise, by the 

individual applying for IV–D services. 

These proposed changes are in 

accordance with PIQ 09–02, which 

allows States to use electronic 

signatures on applications, as long as it 

is allowable under State law.79 As noted 

in PIQ 09–02, the appropriateness of the 

use of electronic signatures must be 

carefully determined by States. In 

making this determination, States 

should consider the reliability of 

electronic signature technology and the 

risk of fraud and abuse, among other 

factors. 

Section 303.5 describes program 

standards for paternity establishment. 

Subparagraph (g)(6) of that section 

requires the State to provide training, 

guidance, and ‘‘written instructions’’ 

regarding voluntary acknowledgment of 

paternity to hospitals, birth record 

agencies, and other entities that 

participate in the State’s voluntary 

acknowledgment program. We propose 

changing the phrase ‘‘written 

instructions’’ to ‘‘instructions, which are 

reflected in a record.’’ This change will 

allow a State the flexibility to provide 

program instructions in electronic 

formats, in addition to, or in place of, 

written instructions. 

Next, we propose a change to the 

requirements for the closure of IV–D 

cases, under proposed § 303.11(d). This 

provision describes the process by 

which a State must notify service 

recipients, or, in regard to 

intergovernmental IV–D cases, the 

process by which responding agencies 

must notify initiating agencies, of their 

intent to close a case. The provision 

requires this notification be ‘‘in 

writing.’’ In order to allow for greater 

efficiency and flexibility, we propose 

allowing electronic notification in the 

instance of intergovernmental IV–D case 

closure when the responding agency is 

communicating with the initiating 

agency. However, we do not propose 

changing the ‘‘written’’ notification 

requirement from a State to the recipient 

of services, because of our general 

approach not to remove written 

requirements where members of the 

public are involved, as described earlier. 

However, we invite comments on this 

approach and whether a recipient of 

services should be provided the option 

to request the case closure notice ‘‘in 

writing’’ or ‘‘in a record’’, such as 

emails, text messaging, voice mails. 

Next, we propose amending the 

introductory language in § 303.31(b)(3) 

by changing the phrase ‘‘written 

criteria’’ to ‘‘criteria, which are reflected 

in a record,’’ so that criteria established 

to identify cases where there is a high 

potential for obtaining medical support 

can be either in an electronic or written 

format. 

Part 304 (§§ 304.21 and 304.40): Federal 

Financial Participation 

We propose two changes to part 304, 

‘‘Federal Financial Participation (FFP).’’ 

Under § 304.21, ‘‘Federal financial 

participation in the costs of cooperative 

arrangements with courts and law 

enforcement officials,’’ the regulations 

describe activities, under § 304.21(a), 

that are eligible for FFP reimbursement, 

provided they are ‘‘performed under 

written agreement.’’ We propose 

amending this section by changing the 

words ‘‘written agreement’’ to 

‘‘agreement, which is reflected in a 

record,’’ to provide flexibility in the 

format of the agreements between a 

State and courts or law enforcement 

officials. 

In addition, § 304.40, ‘‘Repayment of 

Federal funds by installments,’’ 

describes the procedures the State must 

follow in order to repay unallowable 

FFP funds to the Federal Government in 

installments. Section 304.40(a)(2) 

requires a State to notify the OCSE 

Regional Office in writing of its intent 

to make installment repayments. We 

propose changing the phrase ‘‘in 

writing’’ to ‘‘in a record.’’ This change 

will give a State the option of notifying 

the Regional Office electronically of its 

intent to repay Federal funds in 

installments. 

Part 305 (§§ 305.64 and 305.66): 

Program Performance Measures, 

Standards, Financial Incentives, and 

Penalties 

Under part 305, ‘‘Program 

Performance Measures, Standards, 

Financial Incentives, and Penalties,’’ we 

propose changes to §§ 305.64 and 

305.66. First, in § 305.64, ‘‘Audit 

procedures and State comments,’’ a 

State may submit ‘‘written comments’’ 

in response to the interim audit report 

within a specified timeframe under 

§ 305.64(c). We propose changing 

‘‘written comments’’ to ‘‘comments, 

which are reflected in a record,’’ 

allowing IV–D agencies to submit 

comments on an interim audit report in 

a perceivable format other than in a 

written format, if appropriate. In this 

same provision, § 305.64(c), we also 

propose a change to omit the phrase ‘‘by 

certified mail’’ from the second sentence 

of this paragraph since OCSE currently 

sends these reports electronically and 

by overnight mail. 

An additional proposed change affects 

§ 305.66, ‘‘Notice, corrective action year, 

and imposition of penalty.’’ Under 

§ 305.66(a), if a State is found to be 

subject to a penalty, OCSE ‘‘will notify 

the State in writing of such finding.’’ We 

propose to replace ‘‘in writing’’ with ‘‘in 

a record’’ so that OCSE can notify the 

State that it is subject to a penalty in a 

perceivable or electronic format, not just 

in a written format. 

Part 307 (§ 307.5): Computerized 

Support Enforcement Systems 

In this section on proposed updates 

for advancements in technology, we 

propose one change to part 307, 

‘‘Computerized Support Enforcement 

Systems.’’ In the section on mandatory 

systems, § 307.5, one of the three 

conditions for a waiver of any 

functional systems requirement or for a 

waiver of any conditions for APD 

approval is the State provides written 

assurance that steps will be taken to 

otherwise improve the State’s Child 

Support Enforcement program, 

§ 307.5(c)(3). We propose amending this 

section by changing ‘‘written assurance’’ 

to ‘‘assurance, which is reflected in a 

record,’’ so that a State can provide 

assurance in a perceivable format other 

than a written format, if it so chooses. 

Topic 3: Technical Corrections 

(§§ 301.15; 302.14; 302.15; 302.32; 

302.34; 302.65; 302.70; 303.3; 303.7; 

303.11; 304.10; 304.12; 304.20; 304.21; 

304.23; 304.25; 304.26; 305.35; 305.63; 

308.2; 309.85; 309.130; 309.145; and 

309.160) 

We propose a number of technical 

corrections that update, clarify, revise, 

or delete existing regulations to ensure 

that the child support enforcement 

regulations are accurate, aligned, and 

up-to-date. 

Section 301.15: Grants 

State agencies that administer the 

Child Support Enforcement Program 

under Title IV–D of the Act are required 

to provide information each fiscal 

quarter to OCSE concerning 

administrative expenditures and the 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 68573 

80See 45 CFR parts 74 and 92: Uniform 

Administrative Requirements for Awards and 

Subawards to Institutions of Higher Education, 

Hospitals, Other Nonprofit Organizations, and 

Commercial Organizations; and Certain Grants and 

Agreements with States, Local Governments and 

Indian Tribal Governments and Uniform 

Administrative Requirements for Grants and 

Cooperative agreements to State and Local 

Governments, 68 FR 52843, September 8, 2003, 

available at: http://edocket.access.gpo.gov/2003/

pdf/03-22513.pdf. 

receipt and disposition of child support 

payments from noncustodial parents. 

The enactment of PRWORA changed a 

number of the requirements affecting 

financial data needs. In September 1997, 

Form ACF–396 was introduced and 

approved by OMB for interim use for 

the reporting of expenditures, estimates, 

and projections while OCSE continued 

its review of the newly-enacted 

statutory changes. During that time, and 

as a result of the efforts of a FederalState partnership representing all 

interested parties and individuals, new 

financial reporting forms were 

developed. These forms provide OCSE 

with the information needed to 

complete its various financial and 

reporting responsibilities with minimal 

collection and reporting burden on State 

agencies. The new reporting forms, the 

OCSE–396A and the OCSE–34A, 

replaced all previous form versions. 

State IV–D agencies are required to 

report quarterly expenditures and 

collections using Forms OCSE–396A 

and OCSE–34A, respectively. The 

information collected on these reporting 

forms is used to compute State quarterly 

grant awards and annual incentive 

payments. These forms provide valuable 

information on State program finances. 

Currently, § 301.15 does not reference 

the new forms and ultimately relies on 

outdated reporting requirements. In 

order to bring that section into 

alignment with current program 

operations, we propose to rename 

paragraph (a) Financial reporting forms 

and to delete subparagraph (3). We also 

propose to replace subparagraph (1) 

Time and place and subparagraph (2) 

Description of forms with definitions of 

Form OCSE–396A and Form OCSE– 

34A, respectively. 

We also propose to rename paragraph 

(b) Review as Submission, review, and 

approval and to add under paragraph (b) 

the following: (1) Manner of submission; 

(2) Schedule of submission; and (3) 

Review and approval. Current 

§ 301.15(a)(1) indicates that the 

expenditure report has to be submitted 

30 days following the end of a fiscal 

quarter, but the estimate for a grant has 

to be submitted within 45 days prior to 

the period of the estimate. Additionally, 

the current reporting instructions for the 

expenditure and collections reports 

require States to submit the forms no 

later than 30 days following the end of 

each fiscal quarter. We are proposing, 

therefore, that the Schedule of 

submission section be modified so that 

the financial forms must be submitted 

no later than 45 days following the end 

of each fiscal quarter. This will be a 

change of policy for the expenditure and 

collections reports and will require 

revision to the instructions for the 

reports, if the proposal is accepted. This 

proposed modification will afford a 

State more time to submit its financial 

reports. The other revisions in this 

paragraph reflect the current operating 

procedures and processes that are 

currently in place. 

Additionally, we propose to revise 

paragraph (c) Grant award by deleting 

its existing language and replacing that 

language with three subparagraphs (1) 

Award documents; (2) Award 

calculation; and (3) Access to funds. 

Finally, we also propose to delete 

paragraph (d) Letter of credit payment 

system and replace it with a new 

provision describing administrative 

requirements, titled General 

requirements. These revisions are 

proposed to align the regulations with 

the current operating procedures. 

Section 302.14: Fiscal Policies and 

Accountability 

In 1988, the Department implemented 

the common rule at 45 CFR part 92. The 

common rule expanded the scope of 45 

CFR part 92 to include nonentitlement 

grant programs, and to remove such 

programs from the scope of part 74 but 

did not include entitlement programs 

like Child Support Enforcement. 

In 2003, the Department revised its 

grants management regulations in order 

to bring its entitlement programs, like 

Child Support Enforcement, under the 

same regulations that already applied to 

nonentitlement programs for grants and 

cooperative agreements to State, Tribal, 

and local governments. Thus, the 

reference to part 74 has been erroneous 

since DHHS transferred the 

administrative requirements for title IV– 

D grant programs from 45 CFR part 74 

to 45 CFR part 92 in 2003.80 Therefore, 

we propose to replace the reference to 

part 74 under § 302.14 with reference to 

part 92. For consistency, as discussed 

below, we will also replace all 

references to part 74 with part 92, as 

appropriate, in 9 other provisions 

throughout the child support 

regulations, §§ 302.15, 303.11, 304.10, 

304.20, 304.25, 309.85, 309.130, 

309.145, and 309.160. 

Section 302.15: Reports and 

Maintenance of Records 

Section 302.15(a) references part 74. 

We propose to replace that reference 

with a reference to part 92. 

Section 302.32: Collection and 

Disbursement of Support Payments by 

the IV–D Agency 

Because the dates contained in the 

introductory paragraph are outdated, we 

propose to update by removing the 

introductory paragraph. We also 

propose to revise paragraph (b) to 

replace ‘‘State Disbursement Unit 

(SDU)’’ with ‘‘SDU.’’ In addition, we 

propose to replace an incorrect cross 

reference in paragraph (b)(1) from 

§ 303.7(c)(7)(iv) to § 303.7(d)(6)(v). 

Section 302.34: Cooperative 

Arrangements 

We propose to clarify that the term 

law enforcement officials includes 

‘‘district attorneys, attorneys general, 

and similar public attorneys and 

prosecutors,’’ and to add ‘‘corrections 

officials’’ to the list of entities with 

which a State may enter into agreements 

for cooperative arrangements. This 

addition encourages Child Support 

Enforcement agencies to collaborate 

with corrections institutions and 

community corrections officials 

(probation and parole agencies). 

Section 302.65: Withholding of 

Unemployment Compensation 

We propose to replace the term ‘‘State 

employment security agency’’ with 

‘‘State workforce agency,’’ and the term 

‘‘SESA’’ with ‘‘SWA’’ throughout this 

regulation for consistency with the 

terminology used by the Department of 

Labor. 

Section 302.70: Required State Laws 

We propose making a technical 

correction under § 302.70, ‘‘Required 

State laws,’’ to paragraph (a)(8). Under 

this paragraph, the State plan must 

provide that a State has laws and 

implements procedures under which all 

child support orders issued or modified 

in the State include an income 

withholding provision, so that the 

withholding remedy will be available if 

arrearages occur without the necessity 

of filing an application for IV–D services 

in accordance with § 303.100(i). We 

propose to replace the incorrect cross 

reference to § 303.100(i) with 

§ 303.100(g). 

Section 303.3: Location of Noncustodial 

Parents in IV–D Case 

In paragraph (b)(5), we propose to 

replace the term ‘‘State employment 

security’’ with ‘‘State workforce.’’ As 


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68574 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 

discussed above, this change is for 

consistency with the terminology that is 

now used by the Department of Labor. 

Section 303.7: Provision of Services in 

Intergovernmental IV–D Cases 

Under this proposed rule, as 

discussed under Topic 1, paragraphs in 

§ 303.11 are renumbered. We propose to 

make conforming changes to paragraph 

(d)(10) of this section to update the 

cross references. 

Additionally, the final 

intergovernmental child support 

regulation, published in the Federal 

Register on July 2, 2010 and effective on 

January 3, 2011, inadvertently omitted 

reference to the $25 annual fee in 

§ 303.7. To address this, we propose to 

add paragraph (f), Imposition and 

reporting of annual $25 fee in interstate 

cases, to provide that the title IV–D 

agency in the initiating State must 

impose and report the annual $25 fee in 

accordance with § 302.33(e). 

Section 303.11: Case Closure Criteria 

In existing § 303.11(b)(2), which has 

been redesignated as § 303.11(b)(4), we 

propose to replace the outdated term 

‘‘putative father’’ with the term ‘‘alleged 

father.’’ We also propose to replace the 

outdated term ‘‘putative father’’ with the 

term ‘‘alleged father’’ in existing 

§ 303.11(b)(3)(ii), which has been 

redesignated as § 303.11(b)(6)(ii), and to 

remove the word ‘‘or’’ at the end of the 

sentence. In addition, we propose to add 

the word ‘‘or’’ to the end of proposed 

§ 303.11(b)(6)(iii). Finally, in 

§ 303.11(d), we propose to replace the 

reference to part 74 with a reference to 

part 92 as previously discussed. 

Section 304.10: General Administrative 

Requirements 

Section 304.10 references 45 CFR part 

74 in three instances. We propose to 

replace these references with 

corresponding reference to part 92. 

Section 304.12: Incentive Payments 

We propose to delete outdated 

paragraphs § 304.12(c)(4) and (5) as they 

applied to fiscal years 1985, 1986, and 

1987. 

Section 304.20: Availability and Rate of 

Federal Financial Participation 

Section 304.20(b)(1)(iii) references 

part 74. For reasons described earlier, 

we propose to replace that reference 

with a reference to 45 CFR 92.36(b). 

Additionally, we propose to delete 

§ 304.20(c) and (d) as they apply to 

fiscal years 1997 and 1998 and are out 

of date. 

Section 304.21: Federal Financial 

Participation in the Costs of Cooperative 

Arrangements With Courts and Law 

Enforcement Officials 

We propose to clarify in paragraph (a) 

that the term law enforcement officials 

includes ‘‘corrections officials,’’ to be 

consistent with § 302.34. 

Section 304.21(a)(1) lists activities for 

which FFP at the applicable matching 

rate is available in the costs of 

cooperative agreements with 

appropriate courts and law enforcement 

officials. We propose to modify the 

section to include a reference to 

§ 304.20(b)(11), regarding medical 

support activities. 

Section 304.23: Expenditures for Which 

Federal Financial Participation Is Not 

Available 

Federal financial participation is the 

portion of a State’s operational 

expenditures that is paid by a Federal 

match and is available for necessary 

expenditures incurred under the State 

plan. Section 304.23(a) lists various 

programs for which FFP is not available 

for administering these programs. We 

propose to add the following programs 

to the list: Titles IV–B, which 

administers the Child Welfare Program; 

IV–E, which administers the Foster Care 

Program; and XXI, which administers 

the Children’s Health Insurance 

Program (CHIP) of the Act; and the 

Supplemental Nutrition Assistance 

Program (SNAP), which is administered 

under 7 U.S.C. Chapter 51. These 

additions are technical corrections 

intended to ensure that the regulations 

are updated and to clarify that child 

support FFP is not allowed for carrying 

out these programs’ responsibilities. 

We also propose to repeal § 304.23(g). 

Language regarding medical support 

enforcement cooperative agreements 

was first added to the IV–D regulations 

in 1977 because section 1912 of the Act 

required the State Medicaid agencies to 

have cooperative agreements with the 

IV–D agencies to implement the Third 

party Liability program. Paragraph (g) 

was originally intended to prohibit 

child support FFP for cooperative 

agreements, under part 306, between 

child support and Medicaid agencies. 

However, § 304.23(g) is no longer 

necessary since the child support 

agencies now have increased 

responsibilities related to medical 

support enforcement activities as a 

result of PRWORA in 1996, which 

required States to enact a provision for 

health care coverage in all orders 

established or enforced by the child 

support agency. Today, OCSE does not 

require IV–D agencies to enter into 

agreements with the State Medicaid 

agencies. 

Section 304.25: Treatment of 

Expenditures; Due Date 

Section 304.25(a) references part 74. 

We propose to replace that reference 

with a reference to part 92. 

Additionally, we propose to modify 

§ 304.25(b). Section 304.25(b) requires a 

State to submit quarterly statements of 

expenditures under § 301.15 30 days 

after the end of the quarter. We propose 

to modify the number of days from 30 

to 45. This proposed modification will 

afford a State more time to submit 

quarterly statements of expenditures. 

Section 304.26: Determination of 

Federal Share of Collections 

Additionally, OCSE proposes to make 

a technical correction to § 304.26(a)(1) 

by amending the Federal medical 

assistance percentage with respect to the 

distribution of child support collections 

for Title IV–E Foster Care cases in the 

U.S. territories and the District of 

Columbia. Section 457(c) of the Act 

indicates that the Federal medical 

assistance percentage rate for child 

support collections retained by Puerto 

Rico, the Virgin Islands, Guam, and 

American Samoa to reimburse TANF 

assistance is 75 percent. However, this 

rate does not apply to IV–E collections. 

The Federal medical assistance 

percentage rate for Foster Care 

maintenance payments in Puerto Rico, 

the Virgin Islands, Guam, the Northern 

Mariana Islands, and American Samoa 

is 55 percent, according to section 

1905(b) of the Act. (This rate was 50 

percent until January 1, 2011.) 

Therefore, we propose amending 

§ 304.26(a)(1) to clarify that the Federal 

medical assistance percentage rate for 

the distribution of child support 

collections to reimburse IV–E 

collections is 55 percent for Puerto Rico, 

the Virgin Islands, Guam, the Northern 

Mariana Islands, and American Samoa 

according to section 1905(a) of the Act 

and implementing regulations at 45 CFR 

302.52(b)(1) and (3). In addition, we also 

propose a technical fix to this provision 

to specify that the Federal medical 

assistance percentage rate to reimburse 

IV–E collections for the District of 

Columbia is 70 percent, according to 

section 1905(b)(3) of the Act. Please 

note that this rule only applies to States 

and other U.S. jurisdictions operating 

IV–D programs. This currently includes 

Puerto Rico, Guam, Virgin Islands, and 

the District of Columbia. 

We also propose to delete paragraphs 

(b) and (c) of § 304.26. Those paragraphs 

require incentive and hold harmless 

payments to be made from the Federal 


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Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 68575 

81Available at: http://www.acf.hhs.gov/programs/ 

cse/pol/AT/2001/at-01-04.htm. 

share of collections. This requirement is 

outdated. Incentive and hold harmless 

payments are no longer paid from the 

Federal share of collections. 

Section 305.35: Reinvestment 

We are proposing several technical 

changes to this section. A key provision 

of the Child Support Performance and 

Incentive Act of 1998 is that State IV– 

D agencies are required to reinvest the 

amount of Federal incentive payments 

received into their child support 

program. Section 458(f) of the Act 

provides that incentive funding shall be 

used to supplement rather than 

supplant existing funding. In order to 

ensure that this requirement is met in 

future years, OCSE promulgated 

regulations at 45 CFR 305.35 

establishing a baseline level of funding 

that a State would be required to 

maintain. Although the regulations 

established a methodology for 

determining the baseline funding, States 

are uncertain about how to calculate 

their current spending level so that they 

could compare it to the baseline and 

evaluate their compliance with the 

statutory requirement. 

In response to comments in the Final 

Rule, published on December 27, 2000 

(65 FR 82177) regarding compliance 

with the prohibition of supplanting 

funds, we indicated that OCSE staff 

would have a role in monitoring this 

requirement. This was also addressed in 

AT–01–04, ‘‘Reinvestment of Child 

Support Incentive Payments.’’ 81 OCSE 

proposes adding this language to the 

regulation in order to clarify the 

potential consequences. 

OCSE proposes adding language that 

would clarify the definition of State 

Current Spending Level for purposes of 

determining if the State has met or 

fulfilled the baseline expenditures level. 

This will ensure that a State does not 

supplant their baseline expenditure 

level with Federal incentive payments. 

OCSE is specifically soliciting 

comments regarding this definition. 

To clarify the potential consequences 

of a State not maintaining the baseline 

expenditure level, we propose 

amending 45 CFR 305.35(d) by adding 

a sentence to the end of the paragraph 

to read: ‘‘Non-compliance will result in 

disallowances of incentive amounts 

equal to the amount of funds 

supplanted.’’ 

We propose redesignating paragraph 

(e) as paragraph (f) and adding a new 

paragraph (e) to clarify how the State 

Current Spending Level should be 

calculated. Using the Form OCSE–396A, 

‘‘Child Support Enforcement Program 

Expenditure Report,’’ the State Current 

Spending Level will be calculated by 

determining the State Share of Total 

Expenditures Claimed for all four 

quarters of the fiscal year minus State 

Share of IV–D Administrative 

Expenditures Made Using Funds 

Received as Incentive Payments for all 

four quarters of the fiscal year, plus the 

Fees for the Use of the Federal Parent 

Locator Service (FPLS) for all four 

quarters of the fiscal year. 

The equation for calculating the State 

Share of Total Expenditures Claimed is: 

Total Expenditures Claimed for the 

Current Quarter and the Prior Quarter 

Adjustments minus the Federal Share of 

Total Expenditures Claimed for the 

Current Quarter and Prior Quarter 

Adjustments. Using the Form OCSE– 

396A, this equation can also be 

translated as: 

State Share of Expenditure = Line 7 

(Columns A + C) ¥ Line 7 

(Columns B + D) for all four 

quarters of the fiscal year. 

The equation for calculating the State 

Share of IV–D Administrative 

Expenditures Made Using Funds 

Received as Incentive Payments is: 

IV–D Administrative Expenditures 

Made Using Funds Received as 

Incentive Payments for the Current 

Quarter and the Prior Quarter 

Adjustments minus the Federal Share of 

IV–D Administrative Expenditures 

Made Using Funds Received as 

Incentive Payments for the Current 

Quarter and Prior Quarter Adjustments. 

Using the Form OCSE–396A, this 

equation can also be translated as: 

State Share of IV–D Administrative 

Expenditures Made Using Funds 

Received as Incentive Payments = 

Line 1a (Columns A + C) ¥ Line 1a 

(Columns B + D) for all four 

quarters of the fiscal year. 

The Fees for the Use of the FPLS can 

be computed by adding the FPLS fees 

claimed for all four quarters of the fiscal 

year. Using the Form OCSE–396A, this 

equation can also be translated as: 

Fees for the Use of the FPLS = Line 

10 (Columns B) for all four quarters of 

the fiscal year. 

Section 305.63: Standards for 

Determining Substantial Compliance 

With IV–D Requirements 

Section 305.63(d) erroneously cross 

references paragraph (b). We propose to 

replace that cross reference with a 

reference to paragraph (c). Our proposed 

revision will make this section 

consistent with the final rule on 

intergovernmental child support cases. 

Section 308.2: Required Program 

Compliance Criteria 

The term ‘‘State employment security 

agency’’ is removed wherever it appears 

and replaced by ‘‘State workforce 

agency.’’ This change is for consistency 

with the terminology used by the 

Department of Labor, as discussed 

earlier. In addition, in subparagraph 

(c)(3)(i), we have capitalized 

Department of Motor Vehicles and used 

the section symbol for consistency. 

Section 309.85: What records must a 

tribe or tribal organization agree to 

maintain in a Tribal IV–D plan? 

Section 309.85(b) references part 74. 

We propose to replace that reference 

with a reference to part 92. 

Section 309.130: How will Tribal IV–D 

programs be funded and what forms are 

required? 

Section 309.130(b)(3) references 

Standard Form (SF) 269A, ‘‘Financial 

Status Report (Short Form).’’ That form 

is obsolete. We propose to replace that 

reference with a reference to SF 425, 

‘‘Federal Financial Report,’’ which is 

the new OMB approved form. To be 

consistent with our proposed change of 

§ 301.15(b)(2), we also propose in this 

section to change the reporting due date 

requirements for the OCSE–34A, 

‘‘Quarterly Report of Collections.’’ This 

proposed modification will afford 

Tribes the same amount of time as 

States to submit reporting data. We are 

not making a similar due date change 

for the SF–425 report since this is 

determined by OMB. 

Section 309 references part 74 in 

paragraphs (d)(3) and (h). We propose to 

replace these references with references 

to part 92. 

Section 309.145: What costs are 

allowable for Tribal IV–D programs 

carried out under § 309.65(a) of this 

part? 

Section 309.145(a)(3) references part 

74. We propose to replace that reference 

with a reference to part 92. 

Section 309.160: How will OCSE 

determine if Tribal IV–D program funds 

are appropriately expended? 

This section references part 74. We 

propose to replace that reference with a 

reference to part 92. 

Paperwork Reduction Act 

Under the Paperwork Reduction Act 

(Pub. L. 104–13), all Departments are 

required to submit to OMB for review 

and approval any reporting or 

recordkeeping requirements inherent in 

a proposed or final rule. There are seven 

new requirements as a result of these 


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68576 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 

regulations. These new regulatory 

requirements are one-time system 

enhancements to the statewide child 

support system. The description and 

total estimated burden for the changes 

are described in the chart below. 

Section and purpose Instrument 

Number of 

respondents: 

54 

Average burden hours per response Total cost National federal share National state 

share 

Added requirement under 

§ 302.33 to generate notices.

Systems Modification.One-time system enhancement.300 hours × $100 per 54 

States to modify statewide 

child support system.

$1,620,000 $1,069,200 $550,800 

Added optional requirement 

under § 302.33 for revised 

applications for limited services.

Systems Modification.One-time system enhancement.5,000 hours × $100 per 27 

States to modify statewide 

child support system.

13,500,000 8,910,000 4,590,000 

Added requirement under 

§ 303.8 for notice of the right 

to request review and adjustment when parent is incarcerated.

Systems Modification.One-time system enhancement.200 hours × $100 × 54 States 1,080,000 712,800 367,200 

Added optional requirement 

under § 303.11 for notice to 

recipient when case closed 

because limited service has 

been completed.

Systems Modification.One-time system enhancement.1,000 hours × $100 × 27 

States.

2,700,000 1,782,000 918,000 

Added requirement under 

§ 303.11 for notice because 

the referring agency does 

not respond to a notice or 

does not provide information 

demonstrating that services 

are needed.

System Modification.One-time system enhancement.500 hours × $100 × 54 States 2,700,000 1,782,000 918,000 

Under § 303.72 discontinue 

notice requirement for interstate tax refund offset.

Systems Modification.One-time system enhancement.500 hours × $100 × 54 States 2,700,000 1,782,000 918,000 

Under § 307.11 develop automated procedures to identify 

the recipient of Supplemental Security Income 

(SSI).

Systems Modification.One-time system enhancement.400 hours × $100 × 54 States 2,160,000 1,425,600 734,400 

Under 42 CFR 433.152, regarding state plan amendments.State plan 

amendment.

One time for 54 State Medicaid Programs, (which includes DC and 3 territories).2 hours × $36.63 × 54 States 3,956.04 1,978.02 1,978.02 

Under 42 CFR 433.152, regarding cooperative agreements.Cooperative 

agreement.

............................................ 10 hours × $36.63 × 54 

States.

19,780.20 9,890.10 9,890.10 

Totals ............................... ................... ............................................ ............................................ 26,483,736.24 17,475,468.12 9,008,268.12 

Part 302 contains information 

collection requirements as required by 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3507(d)). Although we 

believe that the States will have to 

submit revised Child Support State plan 

pages for §§ 302.33, 302.56, and 302.70, 

we do not estimate any additional 

burden on the ‘‘State Plan for Child 

Support Collection and Establishment of 

Paternity Under Title IV–D of the Social 

Security Act,’’ and the State Plan 

Transmittal Form [OMB 0970–0017], 

which were reauthorized until July 31, 

2014. When these forms were submitted 

for reauthorization, we had estimated 

that each State would be submitting 

eight State plan preprint pages annually 

as a result of changes in regulations, 

policies, and/or procedures. 

Additionally, various forms are 

discussed for use in different processes. 

None of these discussions are new 

burdens. For example § 303.11 clarifies 

the current regulation that states are 

required to use the Income Withholding 

Order (IWO) form. Use of the OMBapproved form is already required. The 

OMB Control # is 0970–0154 which 

expires on 06/30/2014. Section 303.35 

clarifies that the OCSE–396A is used to 

calculate the state current spending 

level. This form is an OMB-approved 

form, Control # 0970–0181 which 

expires on 05/31/2017. Finally, there 

has been an update from use of form SF 

269A to SF 425. This is a technical 

update with no addition burden. SF425 

is an OMB-approved form Control 

#0348–0061 which expires 2/28/2015. 

With regard to the proposed 

requirements for cooperative agreements 

for third party collections under 42 CFR 

433.152, Medicaid State plan 

amendments will be required as well as 

amendments to state cooperative 

agreements. The one-time burden 

associated with the requirements under 

§ 433.152 is the time and effort it would 

take each of the 54 State Medicaid 

Programs, which includes the District of 

Columbia and 3 territories, to submit 

State plan amendments and amend their 

cooperative agreements. 

Specifically, we estimate that it will 

take each State 2 hours to amend their 

state plans and 10 hours to amend their 

cooperative agreements. We estimate 12 

total annual hours at a total estimated 

cost of $23,736.24 with a State share of 

$11,868.12. CMS reimburses States for 

50 percent of the administrative costs 

incurred to administer the Medicaid 

State plan. 

In deriving these figures, we used the 

hourly rate of $36.63/hour for a GS–13– 

3 working in the Washington DC 

Baltimore area according to the calendar 

year 2013 federal pay scale. 

Besides what is addressed above, no 

additional information collection 

burdens, as described in the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), are imposed by this proposed 

regulation. 

ACF and CMS will consider 

comments by the public on this 

proposed collection of information in 

the following areas: 

1. Evaluating whether the proposed 

collection is necessary for the proper 

performance of the functions of ACF 

and CMS, including whether the 

information will have practical utility; 


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2. Evaluating the accuracy of ACF’s 

and CMS’ estimates of the proposed 

collection of information, including the 

validity of the methodology and 

assumptions used; 

3. Enhancing the quality, usefulness, 

and clarity of the information to be 

collected; and 

4. Minimizing the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technology, e.g., permitting electronic 

submission of responses. 

OMB is required to make a decision 

concerning the collection of information 

contained in these proposed regulations 

between 30 and 60 days after 

publication of this document in the 

Federal Register. Therefore, a comment 

is best assured of having its full effect 

if OMB receives it within 30 days of 

publication. This does not affect the 

deadline for the public to comment to 

the Department on the proposed 

regulations. Written comments to OMB 

for the proposed information collection 

should be sent directly to the following: 

Office of Management and Budget, 

either by fax to 202–395–6974 or by 

email to OIRA_submission@

omb.eop.gov. Please mark faxes and 

emails to the attention of the desk 

officer for ACF. 

Regulatory Flexibility Analysis 

The Secretary certifies, under 5 U.S.C. 

605(b), and enacted by the Regulatory 

Flexibility Act (Pub. L. 96–354), that 

this proposed regulation will not result 

in a significant impact on a substantial 

number of small entities. The primary 

impact is on State Governments. State 

Governments are not considered small 

entities under the Act. 

Regulatory Impact Analysis 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if the regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity.) Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, harmonizing rules, and 

of promoting flexibility. While there are 

some costs associated with these 

regulations, they are not economically 

significant as defined under E.O. 12866. 

However, the regulation is significant 

and has been reviewed by OMB. 

Within the NPRM an area with 

associated Federal costs is modifying 

the child support statewide automated 

system for one-time system 

enhancements to accommodate new 

requirements such as notices, 

applications, and identifying 

noncustodial parents receiving SSI. This 

proposal has an approximately 

$26,484,000 cost. There is a cost of 

$26,460,000 to modify statewide IV–D 

systems for the 54 (with an assumption 

that 27 States will implement the 

optional requirements) States or 

Territories at a cost of $100 an hour. A 

cost of approximately $24,000 is 

designated to CMS’ costs for State plan 

amendments and cooperative 

agreements. Another area associated 

with Federal costs is that of job services. 

We propose to allow FFP for certain job 

services for noncustodial parents 

responsible for paying child support. 

The estimated total average annual net 

cost (over the first five years) of the job 

services proposal is $26,096,596 with 

$18,592,939 as the Federal cost. Thus, 

the total net cost of the NPRM is 

$52,580,596. These proposed 

regulations, along with proposed 

changes in recognition of technological 

advances, will improve the delivery of 

child support services, support the 

efforts of noncustodial parents to 

provide for their children, and improve 

the efficiency of operations. 

Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

that a covered agency prepare a 

budgetary impact statement before 

promulgating a rule that includes any 

Federal mandate that may result in the 

expenditure by State, Tribal and local 

Governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year. This $100 million 

threshold was based on 1995 dollars. 

The current threshold, adjusted for 

inflation is $141 million. This proposed 

rule would not impose a mandate that 

will result in the expenditure by State, 

local, and Tribal Governments, in the 

aggregate, or by the private sector, of 

more than $141 million in any one year. 

Congressional Review 

This notice of proposed rulemaking is 

not a major rule as defined in 5 U.S.C. 

Chapter 8. 

Assessment of Federal Regulation and 

Policies on Families 

Section 654 of the Treasury and 

General Government Appropriations 

Act of 1999 requires Federal agencies to 

determine whether a policy or 

regulation may negatively affect family 

well-being. If the agency’s 

determination is affirmative, then the 

agency must prepare an impact 

assessment addressing seven criteria 

specified in the law. The required 

review of the regulations and policies to 

determine their effect on family wellbeing has been completed, and this rule 

will have a positive impact on family 

well-being as defined in the legislation 

by proposing evidence-informed 

policies and practices that help to 

ensure that noncustodial parents 

support their children more consistently 

and reliably as they grow up. 

Executive Order 13132 

Executive Order 13132 prohibits an 

agency from publishing any rule that 

has federalism implications if the rule 

either imposes substantial direct 

compliance costs on State and local 

governments and is not required by 

statute, or the rule preempts State law, 

unless the agency meets the 

consultation and funding requirements 

of section 6 of the Executive Order. We 

do not believe the regulation has 

federalism impact as defined in the 

Executive Order. However, consistent 

with Executive Order 13132, the 

Department specifically solicits 

comments from State and local 

government officials on this proposed 

rule. 

List of Subjects 

42 CFR Part 433 

Administrative practice and 

procedure, Child support, Claims, Grant 

programs—health, Medicaid, Reporting 

and recordkeeping requirements. 

45 CFR Part 301 

Child support, State plan approval 

and grant procedures. 

45 CFR Part 302 

Child support, State plan 

requirements. 

45 CFR Part 303 

Child support, Standards for program 

operations. 

45 CFR Part 304 

Child support, Federal financial 

participation. 

45 CFR Part 305 

Child support, Program performance 

measures, Standards, Financial 

incentives, Penalties. 

45 CFR Part 307 

Child support, Computerized support 

enforcement systems. 

45 CFR Part 308 

Child support, Annual State selfassessment review and report. 


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68578 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules 

45 CFR Part 309 

Child support, Grant programs— 

social programs, Indians, Reporting and 

recordkeeping requirements. 

(Catalog of Federal Domestic Assistance 

Programs No. 93.563, Child Support 

Enforcement Program.) 

Dated: August 26, 2014. 

Mark Greenberg, 

Acting Assistant Secretary for Children and 

Families. 

Dated: September 16, 2014. 

Marilyn Tavenner, 

Administrator for the Centers for Medicare 

& Medicaid Services. 

Approved: September 29, 2014. 

Sylvia M. Burwell, 

Secretary of Health and Human Services. 

For the reasons discussed above, the 

Department of Health and Human 

Services proposes the following changes 

to 42 CFR Part 433 and 45 CFR Chapter 

III as set forth below: 

Centers for Medicare and Medicaid 

Services 

42 CFR Chapter IV 

PART 433—STATE FISCAL 

ADMINISTRATION 

■ 1. The authority citation for part 433 

is revised to read as follows: 

Authority: Sec. 1102 of the Social Security 

Act (42 U.S.C. 1302). 

■ 2. Section 433.152 is amended by 

revising paragraph (b) to read as follows: 

§ 433.152 Requirements for cooperative 

agreements for third party collections. 

* * * * * 

(b) Agreements with title IV–D 

agencies must specify that: 

(1) The Medicaid agency may not 

refer a case for medical support 

enforcement when the following criteria 

have been met: 

(i) The Medicaid referral is based 

solely upon health care services, 

including contract health services, 

provided through an Indian Health 

Program (as defined at 25 U.S.C. 

1603(12)) to a child who is eligible for 

health care services from the Indian 

Health Service (IHS). 

(ii) [Reserved] 

(2) The Medicaid agency will provide 

reimbursement to the IV–D agency only 

for those child support services 

performed that are not reimbursable by 

the Office of Child Support Enforcement 

under title IV–D of the Act and that are 

necessary for the collection of amounts 

for the Medicaid program. 

Administration for Children and 

Families 

45 CFR Chapter III 

PART 301—STATE PLAN APPROVAL 

AND GRANT PROCEDURES 

■ 3. The authority citation for part 301 

continues to read as follows: 

Authority: 42 U.S.C. 651 through 658, 

659a, 660, 664, 666, 667, 1301, and 1302. 

■ 4. Amend § 301.1 by revising the first 

sentence of the definition of 

‘‘Procedures’’ and adding the definition 

of ‘‘Record’’ in alphabetical order to 

read as follows: 

§ 301.1 General definitions. 

* * * * * 

Procedures means a set of instructions 

in a record which describe in detail the 

step by step actions to be taken by child 

support enforcement personnel in the 

performance of a specific function 

under the State’s IV–D plan. * * * 

* * * * * 

Record means information that is 

inscribed on a tangible medium or that 

is stored in an electronic or other 

medium and is retrievable in 

perceivable form. 

* * * * * 

■ 5. Amend § 301.13 by revising the first 

sentence of the introductory text and 

paragraphs (e) and (f) to read as follows: 

§ 301.13 Approval of State plans and 

amendments. 

The State plan consists of records 

furnished by the State to cover its Child 

Support Enforcement program under 

title IV–D of the Act. * * * 

* * * * * 

(e) Prompt approval of the State plan. 

The determination as to whether the 

State plan submitted for approval 

conforms to the requirements for 

approval under the Act and regulations 

issued pursuant thereto shall be made 

promptly and not later than the 90th 

day following the date on which the 

plan submittal is received in OCSE 

Regional Program Office, unless the 

Regional Office has secured from the 

IV–D agency an agreement, which is 

reflected in a record, to extend that 

period. 

(f) Prompt approval of plan 

amendments. Any amendment of an 

approved State plan may, at the option 

of the State, be considered as a 

submission of a new State plan. If the 

State requests that such amendments be 

so considered, the determination as to 

its conformity with the requirements for 

approval shall be made promptly and 

not later than the 90th day following the 

date on which such a request is received 

in the Regional Office with respect to an 

amendment that has been received in 

such office, unless the Regional Office 

has secured from the State agency an 

agreement, which is reflected in a 

record, to extend that period. 

* * * * * 

■ 6. Amend § 301.15 by revising 

paragraphs (a), (b), (c), and (d), and by 

removing paragraph (e) to read as 

follows: 

§ 301.15 Grants. 

* * * * * 

(a) Financial reporting forms. (1) Form 

OCSE–396A: Child Support 

Enforcement Program Expenditure 

Report. States submit this form quarterly 

to report the actual amount of State and 

Federal Share of title IV–D program 

expenditures and program income of the 

current quarter and to report the 

estimated amount of the State and 

Federal share of title IV–D program 

expenditures for the next quarter. This 

form is completed in accordance with 

published instructions. The signature of 

the authorized State program official on 

this document certifies that the reported 

expenditures and estimates are accurate 

and that the State has or will have the 

necessary State share of estimated 

program expenditures available when 

needed. 

(2) Form OCSE–34A: Child Support 

Enforcement Program Collection Report. 

States submit this form quarterly to 

report the State and Federal share of 

child support collections received, 

distributed, disbursed, and remaining 

undistributed under the title IV–D 

program. This form is completed in 

accordance with published instructions. 

The signature of the authorized State 

program official on this document 

certifies that the reported amounts are 

accurate. The Federal share of actual 

program expenditures and collections 

and the Federal share of estimated 

program expenditures reported on Form 

OCSE–396A and the Federal share of 

child support collections reported on 

Form OCSE–34A are used in the 

computation of quarterly grant awards 

issued to the State. 

(b) Submission, review, and approval. 

(1) Manner of submission. The 

Administration for Children and 

Families (ACF) maintains an On-line 

Data Collection (OLDC) system available 

to every State. States must use OLDC to 

submit reporting information 

electronically. To use OLDC, a State 

must request access from the ACF Office 

of Grants Management and use an 

approved digital signature. 

(2) Schedule of submission. Forms 

OCSE–396A and OCSE–34A must be 

electronically submitted no later than 45 


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days following the end of the each fiscal 

quarter. No submission, revisions, or 

adjustments of the financial reports 

submitted for any quarter of the fiscal 

year will be accepted by OCSE later 

than December 31, 3 months after the 

end of the fiscal year. 

(3) Review and approval. The data 

submitted on Forms OCSE–396A and 

OCSE–34A are subject to analysis and 

review by the Regional Grants Officer in 

the appropriate ACF Regional Office 

and approval by the Director, Office of 

Grants Management, in the ACF central 

office. In the course of this analysis, 

review, and approval process, any 

reported program expenditures that 

cannot be determined to be allowable 

are subject to the deferral procedures 

found at 45 CFR 201.15 or the 

disallowance process found at 45 CFR 

304.29 and 201.14 and 45 CFR part 16. 

(c) Grant award. (1) Award 

documents. The grant award consists of 

a signed award letter and an 

accompanying ‘‘Computation of Grant 

Award’’ to detail the award calculation. 

(2) Award calculation. The quarterly 

grant award is based on the information 

submitted by the State on the financial 

reporting forms and consists of: 

(i) An advance of funds for the next 

quarter, based on the State’s approved 

estimate; and 

(ii) The reconciliation of the advance 

provided for the current quarter, based 

on the State’s approved expenditures. 

(3) Access to funds. A copy of the 

grant documents are provided to the 

HHS Division of Payment Management, 

which maintains the Payment 

Management System (PMS). The State is 

able to request a drawdown of funds 

from PMS through a commercial bank 

and the Federal Reserve System against 

a continuing letter of credit. The letter 

of credit system for payment of 

advances of Federal funds was 

established pursuant to Treasury 

Department regulations. (Circular No. 

1075). 

(d) General requirements. A copy of 

the Terms and Conditions applicable to 

this program is available to the State 

annually. In general, the following 

Federal regulations govern the 

administration of this program: 

(1) 2 CFR part 225, ‘‘Cost Principles 

for State, Local and Indian Tribal 

Governments (OMB Circular A–87);’’ 

(2) 45 CFR part 92, ‘‘Uniform 

Administrative Requirements for Grants 

and Cooperative Agreements to State, 

Local, and Tribal Governments,’’ with 

the following exceptions: 

(i) 45 CFR 92.24, ‘‘Matching or cost 

sharing;’’ and 

(ii) 45 CFR 92.41, ‘‘Financial 

reporting;’’ and 

(3) 45 CFR part 95, ‘‘General 

Administration—Grant Programs 

(Public Assistance, Medical Assistance 

and State Children’s Health Insurance 

Programs).’’ 

PART 302—STATE PLAN 

REQUIREMENTS 

■ 7. The authority citation for part 302 

continues to read as follows: 

Authority: 42 U.S.C. 651 through 658, 

659a, 660, 664, 666, 667, 1302, 1396a(a)(25), 

1396b(d)(2), 1396b(o), 1396b(p), and 1396(k). 

■ 8. Revise § 302.14 to read as follows: 

§ 302.14 Fiscal policies and accountability. 

The State plan shall provide that the 

IV–D agency, in discharging its fiscal 

accountability, will maintain an 

accounting system and supporting fiscal 

records adequate to assure that claims 

for Federal funds are in accord with 

applicable Federal requirements. The 

retention and custodial requirements for 

these records are prescribed in 45 CFR 

part 92. 

■ 9. Amend § 302.15 by revising 

paragraph (a)(7), redesignating the 

undesignated concluding paragraph of 

paragraph (a) as paragraph (a)(8), and 

revising newly redesignated paragraph 

(a)(8) to read as follows: 

§ 302.15 Reports and maintenance of 

records. 

* * * * * 

(a) * * * 

(7) Statistical, fiscal, and other records 

necessary for reporting and 

accountability required by the Secretary. 

(8) The retention and custodial 

requirements for the records in this 

section are prescribed in 45 CFR part 92. 

* * * * * 

■ 10. Amend § 302.32 by revising the 

introductory text, paragraph (a), 

paragraph (b) introductory text, and 

paragraph (b)(1) to read as follows: 

§ 302.32 Collection and disbursement of 

support payments by the IV–D Agency. 

The State plan shall provide that: 

(a) The IV–D agency must establish 

and operate a State Disbursement Unit 

(SDU) for the collection and 

disbursement of payments under 

support orders— 

(1) In all cases being enforced under 

the State IV–D plan; and 

(2) In all cases not being enforced 

under the State IV–D plan in which the 

support order is initially issued in the 

State on or after January 1, 1994, and in 

which the income of the noncustodial 

parent is subject to withholding 

pursuant to section 466(a)(8)(B) of the 

Act. 

(b) Timeframes for disbursement of 

support payments by SDUs under 

section 454B of the Act. 

(1) In interstate IV–D cases, amounts 

collected by the responding State on 

behalf of the initiating State must be 

forwarded to the initiating State within 

2 business days of the date of receipt by 

the SDU in the responding State, in 

accordance with § 303.7(d)(6)(v) of this 

chapter. 

* * * * * 

■ 11. Amend § 302.33 by revising 

paragraph (a)(4), adding paragraph 

(a)(6), and revising the first sentence of 

paragraph (d)(2) to read as follows: 

§ 302.33 Services to individuals not 

receiving title IV–A assistance. 

(a) * * * 

(4) Whenever a family is no longer 

eligible for assistance under the State’s 

title IV–A and Medicaid programs, the 

IV–D agency must notify the family, 

within 5 working days of the 

notification of ineligibility, that IV–D 

services will be continued unless the 

family notifies the IV–D agency that it 

no longer wants services but instead 

wants to close the case. This notice 

must inform the family of the benefits 

and consequences of continuing to 

receive IV–D services, including the 

available services and the State’s fees, 

cost recovery and distribution policies. 

This requirement to notify the family 

that services will be continued, unless 

the family notifies the IV–D agency to 

the contrary, also applies when a child 

is no longer eligible for IV–E foster care, 

but only in those cases that the IV–D 

agency determines that such services 

and notice would be appropriate. 

* * * * * 

(6) The State may elect in its State 

plan to allow an individual under 

paragraph (a)(1)(i) of this section who 

files an application to request limited 

services. If the State chooses this option, 

the State must define how this process 

will be implemented and must establish 

and use procedures, which are reflected 

in a record, that specifies when and 

what limited services will be allowed. 

The State’s procedures must require that 

a limited services applicant requesting 

enforcement services will receive all 

mandatory enforcement services, if 

appropriate, including income 

withholding, Federal Tax Refund Offset, 

and credit bureau reporting. An 

application will be considered fullservice unless the parent specifically 

applies for limited services in 

accordance with the State’s procedures. 

If one parent specifically requests 

limited services and the other parent 

requests full services, the case will 

automatically receive full services. The 


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State will be required to charge the 

application and service fees required 

under paragraphs (c) and (e) of this 

section for a limited service, and may 

recover costs in accordance with 

paragraph (d) of this section if the State 

has chosen this option in its State plan. 

The State must provide the applicant an 

application form with information on 

the range of available services, 

consequences of selecting a limited 

service, and an explanation that the case 

will be closed when the limited service 

is completed. 

* * * * * 

(d) * * * 

(2) A State that recovers standardized 

costs under paragraph (d)(1) of this 

section shall develop a methodology, 

which is reflected in a record, to 

determine standardized costs which are 

as close to actual costs as is possible. 

* * * 

* * * * * 

■ 12. Amend § 302.34 by revising the 

first sentence to read as follows: 

§ 302.34 Cooperative arrangements. 

The State plan shall provide that the 

State will enter into agreements, which 

are reflected in a record, for cooperative 

arrangements under § 303.107 of this 

chapter with appropriate courts; law 

enforcement officials, such as district 

attorneys, attorneys general, and similar 

public attorneys and prosecutors; 

corrections officials; Indian tribes or 

tribal organizations. * * * 

* * * * * 

■ 13. Revise § 302.38 to read as follows: 

§ 302.38 Payments to the family. 

The State plan shall provide that any 

payment required to be made under 

§§ 302.32 and 302.51 to a family will be 

made directly to the resident parent, 

legal guardian, or caretaker relative 

having custody of or responsibility for 

the child or children. 

■ 14. Amend § 302.50 by revising 

paragraph (b)(2) to read as follows: 

§ 302.50 Assignment of rights to support. 

* * * * * 

(b) * * * 

(2) If there is no court or 

administrative order, an amount 

determined in a record by the IV–D 

agency as part of the legal process 

referred to in paragraph (a)(2) of this 

section in accordance with the 

requirements of § 302.56. 

* * * * * 

■ 15. Revise § 302.56 to read as follows: 

§ 302.56 Guidelines for setting child 

support awards. 

(a) Within one year after completion 

of the State’s next quadrennial review of 

its guidelines, pursuant to § 302.56(e), 

as a condition of approval of its State 

plan, the State must establish one set of 

guidelines by law or by judicial or 

administrative action for setting and 

modifying child support award amounts 

within the State that meet the 

requirements in this section. 

(b) The State must have procedures 

for making the guidelines available to 

all persons in the State whose duty it is 

to set child support award amounts. 

(c) The guidelines established under 

paragraph (a) of this section must at a 

minimum: 

(1) Take into consideration actual 

earnings and income of the 

noncustodial parent; 

(2) Be based on specific descriptive 

and numeric criteria and result in a 

computation of the support obligation; 

(3) Address how the parents will 

provide for the child(ren)’s health care 

needs through health insurance 

coverage and/or through cash medical 

support in accordance with § 303.31 of 

this chapter; 

(4) Take into consideration the 

noncustodial parent’s subsistence needs 

and provide that any amount ordered 

for support be based upon available data 

related to the parent’s actual earnings, 

income, assets, or other evidence of 

ability to pay, such as testimony that 

income or assets are not consistent with 

a noncustodial parent’s current standard 

of living; and 

(5) Provide that incarceration may not 

be treated as voluntary unemployment 

in establishing or modifying support 

orders. 

(d) The State must include a copy of 

the guidelines in its State plan. 

(e) The State must review, and revise, 

if appropriate, the guidelines 

established under paragraph (a) of this 

section at least once every four years to 

ensure that their application results in 

the determination of appropriate child 

support award amounts. 

(f) The State must provide that there 

will be a rebuttable presumption, in any 

judicial or administrative proceeding for 

the award of child support, that the 

amount of the award which would 

result from the application of guidelines 

established under paragraph (a) of this 

section is the correct amount of child 

support to be awarded. 

(g) A written finding or specific 

finding on the record of a judicial or 

administrative proceeding for the award 

of child support that the application of 

the guidelines established under 

paragraph (a) of this section would be 

unjust or inappropriate in a particular 

case will be sufficient to rebut the 

presumption in that case, as determined 

under criteria established by the State. 

Such criteria must take into 

consideration the best interests of the 

child. Findings that rebut the guidelines 

shall state the amount of support that 

would have been required under the 

guidelines and include a justification of 

why the order varies from the 

guidelines. 

(h) Child support awards established 

under paragraph (a) of this section may 

recognize parenting time provisions 

pursuant to State child support 

guidelines or when both parents have 

agreed to the parenting time provisions. 

(i) As part of the review of a State’s 

guidelines required under paragraph (e) 

of this section, a State must consider 

economic data on the cost of raising 

children and analyze case data, gathered 

through sampling or other methods, on 

the application of, and deviations from, 

the guidelines. The analysis of the data 

must be used in the State’s review of the 

guidelines to ensure that deviations 

from the guidelines are limited. 

Deviation from the presumptive child 

support amount may be based on factors 

established by the State. 

■ 16. Amend § 302.65 by: 

■ a. In paragraph (a), removing the 

definition of ‘‘State employment 

security agency’’; 

■ b. In paragraph (a), adding the 

definition of ‘‘State workforce agency’’ 

in alphabetical order; 

■ c. Removing the term ‘‘SESA’’ 

wherever it appears and adding in its 

place the term ‘‘SWA’’ in paragraphs 

(c)(1), (2), and (5) through (7); and 

■ d. Revising paragraphs (b) and (c)(3). 

The revisions and additions read as 

follows. 

§ 302.65 Withholding of unemployment 

compensation. 

* * * * * 

(a) * * * 

State workforce agency or SWA means 

the State agency charged with the 

administration of the State 

unemployment compensation laws in 

accordance with title III of the Act. 

* * * * * 

(b) Agreement. The State IV–D agency 

shall enter into an agreement, which is 

reflected in a record, with the SWA in 

its State for the purpose of withholding 

unemployment compensation from 

individuals with unmet support 

obligations being enforced by the IV–D 

agency. The IV–D agency shall agree 

only to a withholding program that it 

expects to be cost-effective and to 

reimbursement for the SWA’s actual, 

incremental costs of providing services 

to the IV–D agency. 

(c) * * * 

(3) Establish and use criteria, which 

are reflected in a record, for selecting 


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cases to pursue via the withholding of 

unemployment compensation for 

support purposes. These criteria must 

be designed to insure maximum case 

selection and minimal discretion in the 

selection process. 

* * * * * 

■ 17. Amend § 302.70, by revising 

paragraphs (a)(5)(v), (a)(8), and the first 

sentence of paragraph (d)(2) to read as 

follows: 

§ 302.70 Required State laws. 

(a) * * * 

(5) * * * 

(v) Procedures which provide that any 

objection to genetic testing results must 

be made in writing within a specified 

number of days before any hearing at 

which such results may be introduced 

into evidence; and if no objection is 

made, a report of the test results, which 

is reflected in a record, is admissible as 

evidence of paternity without the need 

for foundation testimony or other proof 

of authenticity or accuracy; 

* * * * * 

(8) Procedures under which all child 

support orders which are issued or 

modified in the State will include 

provision for withholding from income, 

in order to assure that withholding as a 

means of collecting child support is 

available if arrearages occur without the 

necessity of filing an application for 

services under § 302.33, in accordance 

with § 303.100(g) of this chapter. 

* * * * * 

(d) * * * 

(2) Basis for granting exemption. The 

Secretary will grant a State, or political 

subdivision in the case of section 

466(a)(2) of the Act, an exemption from 

any of the requirements of paragraph (a) 

of this section for a period not to exceed 

5 years if the State demonstrates that 

compliance would not increase the 

effectiveness and efficiency of its Child 

Support Enforcement program. * * * 

* * * * * 

■ 18. Section 302.76 is added to read as 

follows: 

§ 302.76 Job services. 

The State plan may provide for job 

services for eligible noncustodial 

parents pursuant to § 303.6(c)(5) of this 

chapter. If the State chooses this option, 

the State plan must include a 

description of the job services and the 

eligibility criteria. 

■ 19. Amend § 302.85 by revising 

paragraph (b)(2)(ii) to read as follows: 

§ 302.85 Mandatory computerized support 

enforcement system. 

* * * * * 

(b) * * * 

(2) * * * 

(ii) The State provides assurances, 

which are reflected in a record, that 

steps will be taken to otherwise improve 

the State’s Child Support Enforcement 

program. 

PART 303—STANDARDS FOR 

PROGRAM OPERATIONS 

■ 20. The authority citation for part 303 

is revised to read as follows: 

Authority: 42 U.S.C. 651 through 658, 

659a, 660, 663, 664, 666, 667, 1302, 

1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), 

1396(k), and 25 U.S.C. 1603(12) and 1621e. 

■ 21. Amend § 303.2 by revising the first 

sentence of paragraph (a)(2) and revising 

paragraph (a)(3) to read as follows: 

§ 303.2 Establishment of cases and 

maintenance of case records. 

(a) * * * 

(2) When an individual requests an 

application for IV–D services, provide 

an application to the individual on the 

day the individual makes a request in 

person or send an application to the 

individual within no more than 5 

working days of a request made by 

telephone or in a record. * * * 

(3) Accept an application as filed on 

the day it and the application fee are 

received. An application is a record that 

is provided or used by the State which 

indicates that the individual is applying 

for child support enforcement services 

under the State’s title IV–D program and 

is signed, electronically or otherwise, by 

the individual applying for IV–D 

services. 

* * * * * 

§ 303.3 [Amended] 

■ 22. Amend § 303.3 by: 

■ a. In paragraph (b)(1), adding 

‘‘corrections institutions;’’ after 

‘‘unions;’’ and before ‘‘fraternal 

organizations;’’; and 

■ b. In paragraph (b)(5), removing the 

term ‘‘State employment security’’ and 

adding the term ‘‘State workforce’’ in its 

place. 

■ 23. Amend § 303.5 by revising 

paragraph (g)(6) to read as follows: 

§ 303.5 Establishment of paternity. 

* * * * * 

(g) * * * 

(6) The State must provide training, 

guidance, and instructions, which are 

reflected in a record, regarding 

voluntary acknowledgment of paternity, 

as necessary to operate the voluntary 

paternity establishment services in the 

hospitals, State birth record agencies, 

and other entities designated by the 

State and participating in the State’s 

voluntary paternity establishment 

program. 

* * * * * 

■ 24. Amend § 303.6 by: 

■ a. Removing ‘‘and’’ at the end of 

paragraph (c)(3); 

■ b. Redesignating paragraph (c)(4) as 

paragraph (c)(6); and 

■ c. Adding paragraphs (c)(4) and (5). 

The revision and addition read as 

follows: 

§ 303.6 Enforcement of support 

obligations. 

* * * * * 

(c) * * * 

(4) Having procedures ensuring that 

enforcement activity in civil contempt 

proceedings takes into consideration the 

subsistence needs of the noncustodial 

parent, and ensures that a purge amount 

the noncustodial parent must pay in 

order to avoid incarceration takes into 

consideration actual earnings and 

income and the subsistence needs of the 

noncustodial parent. A purge amount 

must be based upon a written 

evidentiary finding that the 

noncustodial parent has the actual 

means to pay the amount from his or her 

current income or assets; and 

(5) As elected by the State in § 302.76 

of this chapter, provide job services to 

eligible noncustodial parents. In 

addition to eligibility criteria which 

may be set by the IV–D agency, the 

noncustodial parent must have a IV–D 

case, have a current child support order, 

be unemployed or not making regular 

child support payments, not be 

receiving TANF assistance or assistance 

funded with State dollars counting 

toward TANF maintenance of effort, not 

be enrolled in a Supplemental Nutrition 

Assistance Program Employment and 

Training program under 7 CFR 273.7 

and 273.24, not be receiving the same 

job services under Workforce 

Investment Act (WIA) under 20 CFR 

parts 652 and 660 through 671, and not 

be receiving a Federal Pell Grant under 

34 CFR part 690. These job services may 

include: 

(i) Job search assistance; 

(ii) Job readiness training; 

(iii) Job development and job 

placement services; 

(iv) Skills assessments to facilitate job 

placement; 

(v) Job retention services; 

(vi) Certificate programs and other 

skills training directly related to 

employment, which may include 

activities to improve literacy and basic 

skills, such as programs to complete 

high school or a General Education 

Development (GED) certificate, as long 

as they are included in the same job 

services plan; and 


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(vii) Work supports, such as 

transportation assistance, uniforms, and 

tools. 

* * * * * 

■ 25. Amend § 303.7 by revising 

paragraph (d)(10) and adding paragraph 

(f) to read as follows: 

§ 303.7 Provision of services in 

intergovernmental IV–D cases. 

* * * * * 

(d) * * * 

(10) Notify the initiating agency when 

a case is closed pursuant to 

§§ 303.11(b)(17) through (19) and 

303.7(d)(9). 

* * * * * 

(f) Imposition and reporting of annual 

$25 fee in interstate cases. The title IV– 

D agency in the initiating State must 

impose and report the annual $25 fee in 

accordance with § 302.33(e) of this 

chapter. 

■ 26. Amend § 303.8 by: 

■ a. Redesignating paragraphs (b)(2) 

through (6) as paragraphs (b)(3) through 

(7), respectively; 

■ b. Adding paragraph (b)(2); and 

■ c. Revising newly redesignated 

paragraph (b)(7) and paragraph (d). 

The addition and revision read as 

follows: 

§ 303.8 Review and adjustment of child 

support orders. 

* * * * * 

(b) * * * 

(2) The State may elect in its State 

plan to initiate review of an order, after 

being notified that a noncustodial 

parent will be incarcerated for more 

than 90 days and without the need for 

a specific request, and, upon notice to 

both parents, adjust the order, if 

appropriate, pursuant to paragraph 

(b)(1)(i) of this section. 

* * * * * 

(7) The State must provide notice— 

(i) Not less than once every 3 years to 

both parents subject to 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. 

(ii) If the State has not elected 

paragraph (b)(2) of this section, when 

the IV–D agency learns that a 

noncustodial parent is incarcerated, to 

the incarcerated noncustodial parent 

and the custodial parent informing them 

of the right to request the State to review 

and, upon request, to adjust the order 

consistent with this section. The notice 

must specify, at a minimum, the place 

and manner in which the request should 

be made. 

* * * * * 

(d) Health care needs must be an 

adequate basis. The need to provide for 

the child’s health care needs in the 

order, through health insurance or other 

means, must be an adequate basis under 

State law to initiate an adjustment of an 

order, regardless of whether an 

adjustment in the amount of child 

support is necessary. 

* * * * * 

■ 27. Revise § 303.11 to read as follows: 

§ 303.11 Case closure criteria. 

(a) The IV–D agency shall establish a 

system for case closure. 

(b) The IV–D agency may elect to 

close a case if the case meets at least one 

of the following criteria and supporting 

documentation for the case closure 

decision is maintained in the case 

record: 

(1) There is no longer a current 

support order and arrearages are under 

$500 or unenforceable under State law; 

(2) There is no longer a current 

support order and all arrearages in the 

case are assigned to the State; 

(3) There is no longer a current 

support order, the children have 

reached the age of majority, the 

noncustodial parent is entering or has 

entered long-term care arrangements 

(such as a residential care facility or 

home health care), and the noncustodial 

parent has no income or assets available 

above the subsistence level that could 

be levied or attached for support; 

(4) The noncustodial parent or alleged 

father is deceased and no further action, 

including a levy against the estate, can 

be taken; 

(5) The noncustodial parent is living 

with the minor child (as the primary 

caregiver or in an intact two parent 

household), and the IV–D agency has 

determined that services are not 

appropriate; 

(6) Paternity cannot be established 

because: 

(i) The child is at least 18 years old 

and action to establish paternity is 

barred by a statute of limitations which 

meets the requirements of § 302.70(a)(5) 

of this chapter; 

(ii) A genetic test or a court or 

administrative process has excluded the 

alleged father and no other alleged 

father can be identified; 

(iii) In accordance with § 303.5(b), the 

IV–D agency has determined that it 

would not be in the best interests of the 

child to establish paternity in a case 

involving incest or forcible rape, or in 

any case where legal proceedings for 

adoption are pending; or 

(iv) The identity of the biological 

father is unknown and cannot be 

identified after diligent efforts, 

including at least one interview by the 

IV–D agency with the recipient of 

services; 

(7) The noncustodial parent’s location 

is unknown, and the State has made 

diligent efforts using multiple sources, 

in accordance with § 303.3, all of which 

have been unsuccessful, to locate the 

noncustodial parent: 

(i) Over a 2-year period when there is 

sufficient information to initiate an 

automated locate effort; or 

(ii) Over a 6-month period when there 

is not sufficient information to initiate 

an automated locate effort; or 

(iii) After a 1-year period when there 

is sufficient information to initiate an 

automated locate effort, but locate 

interfaces are unable to verify a Social 

Security Number; 

(8) The IV–D agency has determined 

that throughout the duration of the 

child’s minority (or after the child has 

reached the age of majority), the 

noncustodial parent cannot pay support 

and shows no evidence of support 

potential because the parent has been 

institutionalized in a psychiatric 

facility, is incarcerated, has a medicallyverified total and permanent disability, 

or has had multiple referrals for services 

by the State over a 5-year period which 

have been unsuccessful. The State must 

also determine that the noncustodial 

parent has no income or assets available 

above the subsistence level that could 

be levied or attached for support; 

(9) The noncustodial parent’s sole 

income is from: 

(i) Supplemental Security Income 

(SSI) payments made pursuant to 

sections 1601 et seq., of title XVI of the 

Act, 42 U.S.C. 1381 et seq.; 

(ii) both SSI and benefits under title 

II of the Act; or 

(iii) other needs-based benefits not 

subject to garnishment; 

(10) The noncustodial parent is a 

citizen of, and lives in, a foreign 

country, does not work for the Federal 

government or a company with 

headquarters or offices in the United 

States, and has no reachable domestic 

income or assets; and State has been 

unable to establish reciprocity with the 

country; 

(11) The IV–D agency has provided 

location-only services as requested 

under § 302.35(c)(3) of this chapter; 

(12) The non–IV–A recipient of 

services requests closure of a case and 

there is no assignment to the State of 

medical support under 42 CFR 433.146 

or of arrearages which accrued under a 

support order; 


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(13) The IV–D agency has completed 

a limited service under § 302.33(a)(6) of 

this chapter; 

(14) There has been a finding by the 

responsible State agency of good cause 

or other exceptions to cooperation with 

the IV–D agency and the State or local 

assistance program, such as IV–A, IV–D, 

IV–E, and Medicaid, which has 

determined that support enforcement 

may not proceed without risk of harm 

to the child or caretaker relative; 

(15) In a non–IV–A case receiving 

services under § 302.33(a)(1)(i) or (iii) of 

this chapter, or under § 302.33(a)(1)(ii) 

when cooperation with the IV–D agency 

is not required of the recipient of 

services, the IV–D agency is unable to 

contact the recipient of services despite 

a good faith effort to contact the 

recipient through at least two different 

methods; 

(16) In a non–IV–A case receiving 

services under § 302.33(a)(1)(i) or (iii) of 

this chapter, or under § 302.33(a)(1)(ii) 

when cooperation with the IV–D agency 

is not required of the recipient of 

services, the IV–D agency documents 

the circumstances of the recipient’s 

noncooperation and an action by the 

recipient of services is essential for the 

next step in providing IV–D services; 

(17) The IV–D agency documents 

failure by the initiating agency to take 

an action which is essential for the next 

step in providing services; 

(18) The initiating agency has notified 

the responding State that the initiating 

State has closed its case under 

§ 303.7(c)(11); 

(19) The initiating agency has notified 

the responding State that its 

intergovernmental services are no longer 

needed; 

(20) Another assistance program, 

including IV–A, IV–E, and Medicaid has 

referred a case to the IV–D agency that 

is inappropriate to establish, enforce, or 

continue to enforce a child support 

order and the custodial or noncustodial 

parent has not applied for services; or 

(21) The case has been transferred to 

a Tribal IV–D agency and the State IV– 

D agency has complied with the 

following procedures: 

(i) Before transferring the case to a 

Tribal IV–D agency: 

(A) The recipient of services 

requested the State to transfer its case to 

the Tribal IV–D agency; or 

(B) The IV–D agency has notified the 

recipient of services of its intent to 

transfer the case to the Tribal IV–D 

agency and the recipient did not 

respond to the notice to transfer the case 

within 60 calendar days from the date 

notice was provided; 

(ii) The IV–D agency completely and 

fully transferred the case; and 

(iii) The IV–D agency notified the 

recipient of services that the case has 

been transferred to the Tribal IV–D 

agency. 

(c) The IV–D agency must close a case 

and maintain supporting documentation 

for the case closure decision when the 

following criteria have been met: 

(1) The child is eligible for health care 

services from the Indian Health Service 

(IHS); and 

(2) The IV–D case was opened 

because of a Medicaid referral based 

solely upon health care services, 

including contract health services, 

provided through an Indian Health 

Program (as defined at 25 U.S.C. 

1603(12)). 

(d) The IV–D agency must have the 

following requirements for case closure 

notification and case reopening: 

(1) In cases meeting the criteria in 

paragraphs (b)(1) through (10) and 

(b)(15) through (16) of this section, the 

State must notify the recipient of 

services in writing 60 calendar days 

prior to closure of the case of the State’s 

intent to close the case. 

(2) In an intergovernmental case 

meeting the criteria for closure under 

paragraph (b)(17) of this section, the 

responding State must notify the 

initiating agency, in a record, 60 

calendar days prior to closure of the 

case of the State’s intent to close the 

case. 

(3) The case must be kept open if the 

recipient of services, or the initiating 

agency supplies information in response 

to the notice provided under paragraph 

(d)(1) or (2) of this section which could 

lead to the establishment of paternity or 

a support order or enforcement of an 

order, or, in the instance of paragraph 

(b)(15) of this section, if contact is 

reestablished with the recipient of 

services. 

(4) In a case meeting the criteria for 

closure in paragraph (b)(20) or (c) of this 

section, the IV–D agency must notify the 

referring agency, in a record, 60 

calendar days prior to closure of the 

case of the State’s intent to close the 

case. 

(5) If the referring agency does not 

respond to the notice provided under 

paragraph (d)(4) of this section, or does 

not provide information that indicates 

that child support services are needed 

for the case, the IV–D agency may close 

the case. 

(6) For cases closed pursuant to 

paragraphs (b)(13) and (d)(5) of this 

section, the State must notify the 

recipient that the case has been closed 

within 30 calendar days of closing the 

case. This notice must also provide 

information regarding reapplying for 

child support services and the 

consequences of receiving services, 

including any State fees, cost recovery, 

and distribution policies. If the recipient 

reapplies for child support services in a 

case that was closed pursuant to 

paragraph (b)(13) of this section, the 

recipient will complete a new 

application for IV–D services and pay 

any applicable fee. If the recipient 

reapplies for services in a case that was 

closed pursuant to (d)(5), the recipient 

will complete a new application for IV– 

D services but will not be charged a fee. 

(7) If the case is closed, the former 

recipient of services may request at a 

later date that the case be reopened if 

there is a change in circumstances 

which could lead to the establishment 

of paternity or a support order or 

enforcement of an order by completing 

a new application for IV–D services and 

paying any applicable application fee. 

(e) The IV–D agency must retain all 

records for cases closed pursuant to this 

section for a minimum of three years, in 

accordance with 45 CFR part 92. 

■ 28. Amend § 303.31 by revising 

paragraphs (a)(2), (a)(3), (b)(1), (b)(2), 

(b)(3) introductory text, (b)(3)(i), and 

(b)(4) to read as follows: 

§ 303.31 Securing and enforcing medical 

support obligations. 

(a) * * * 

(2) Health insurance includes fee for 

service, health maintenance 

organization, preferred provider 

organization, and other types of private 

and public coverage which is available 

to either parent, under which medical 

services could be provided to the 

dependent child(ren). 

(3) Cash medical support or the cost 

of health insurance is considered 

reasonable in cost if the cost to the 

parent responsible for providing 

medical support does not exceed five 

percent of his or her gross income or, at 

State option, a reasonable alternative 

income-based numeric standard defined 

in State law, regulations, or court rule 

having the force of law or State child 

support guidelines adopted in 

accordance with § 302.56(c) of this 

chapter. 

(b) * * * 

(1) Petition the court or administrative 

authority to: 

(i) Include health insurance that is 

accessible to the child(ren), as defined 

by the State, and is available to the 

parent responsible for providing 

medical support at reasonable cost, as 

defined under paragraph (a)(3) of this 

section, in new or modified court or 

administrative orders for support; and 

(ii) Determine how to allocate the cost 

of coverage between the parents. 


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(2) If health insurance described in 

paragraph (b)(1) of this section is not 

available at the time the order is entered 

or modified, petition to include cash 

medical support in new or modified 

orders until such time as health 

insurance, that is accessible and 

reasonable in cost as defined under 

paragraph (a)(3) of this section, becomes 

available. In appropriate cases, as 

defined by the State, cash medical 

support may be sought in addition to 

health insurance coverage. 

(3) Establish criteria, which are 

reflected in a record, to identify orders 

that do not address the health care 

needs of children based on— 

(i) Evidence that health insurance 

may be available to either parent at 

reasonable cost, as defined under 

paragraph (a)(3) of this section; and 

* * * * * 

(4) Petition the court or administrative 

authority to modify support orders, in 

accordance with State child support 

guidelines, for cases identified in 

paragraph (b)(3) of this section to 

include health insurance and/or cash 

medical support in accordance with 

paragraphs (b)(1) and (2) of this section. 

* * * * * 

■ 29. Amend § 303.72 by revising 

paragraph (d)(1) to read as follows: 

§ 303.72 Requests for collection of pastdue support by Federal tax refund offset. 

* * * * * 

(d) * * * 

(1) The State referring past-due 

support for offset must, in interstate 

situations, notify any other State 

involved in enforcing the support order 

when it receives the offset amount from 

the Secretary of the U.S. Treasury. 

* * * * * 

■ 30. Amend § 303.100 by revising 

paragraph (e)(1) introductory text and 

adding paragraphs (h) and (i) to read as 

follows: 

§ 303.100 Procedures for income 

withholding. 

* * * * * 

(e) Notice to the employer for 

immediate and initiated withholding. 

(1) To initiate withholding, the State 

must send the noncustodial parent’s 

employer a notice using the required 

OMB-approved Income Withholding for 

Support form that includes the 

following: 

* * * * * 

(h) Notice to employers in all child 

support orders. The notice to employers 

in all child support orders must be on 

an OMB-approved Income Withholding 

for Support form. 

(i) Payments sent to the SDU in child 

support order not enforced under the 

State IV–D plan. Income withholding 

payments made under child support 

orders initially issued in the State on or 

after January 1, 1994 that are not being 

enforced under the State IV–D plan 

must be sent to the State Disbursement 

Unit for disbursement to the family in 

accordance with sections 454B and 

466(a)(8) and (b)(5) of the Act and 

§ 302.32(a) of this chapter. 

PART 304—FEDERAL FINANCIAL 

PARTICIPATION 

■ 31. The authority for part 304 

continues to read as follows: 

Authority: 42 U.S.C. 651 through 655, 657, 

1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 

1396b(p), and 1396(k). 

■ 32. Revise § 304.10 to read as follows: 

§ 304.10 General administrative 

requirements. 

As a condition for Federal financial 

participation, the provisions of part 92 

of this title (with the exception of 45 

CFR 92.24, Matching or Cost Sharing 

and 45 CFR 92.41, Financial Reporting) 

establishing uniform administrative 

requirements and cost principles shall 

apply to all grants made to States under 

this part. 

§ 304.12 [Amended] 

■ 33. Amend § 304.12 by removing 

paragraphs (c)(4) and (5). 

■ 34. Amend § 304.20 by: 

■ a. Revising paragraphs (a)(1), (b) 

introductory text, (b)(1)(iii) introductory 

text, (b)(1)(viii) introductory text, 

(b)(1)(viii)(A), (b)(1)(ix), (b)(2) 

introductory text, (b)(2)(vii), (b)(3) 

introductory text, and (b)(11); 

■ b. Removing the ‘‘.’’ at the end of 

paragraph (b)(1)(viii)(C) and adding a 

‘‘;’’ in its place; 

■ c. Redesignating paragraph (b)(3)(v) as 

paragraph (b)(3)(viii); 

■ d. Adding paragraphs (b)(1)(viii)(D), 

(b)(1)(viii)(E), (b)(3)(v) through (vii), 

(b)(3)(ix), and (b)(12); 

■ e. Removing ‘‘and’’ at the end of 

paragraph (b)(9); and 

■ f. Removing paragraphs (c) and (d). 

The additions and revisions read as 

follows: 

§ 304.20 Availability and rate of Federal 

financial participation. 

(a) * * * 

(1) Necessary and reasonable 

expenditures for child support services 

and activities to carry out the State title 

IV–D plan; 

* * * * * 

(b) Services and activities for which 

Federal financial participation will be 

available will be those made to carry out 

the title IV–D State plan, including 

obtaining child support, locating 

noncustodial parents, and establishing 

paternity, that are determined by the 

Secretary to be necessary and reasonable 

expenditures properly attributed to the 

Child Support Enforcement program, 

including, but not limited to the 

following: 

(1) * * * 

(iii) The establishment of all 

necessary agreements with other 

Federal, State, and local agencies or 

private providers to carry out Child 

Support Enforcement program activities 

in accordance with Procurement 

Standards, 45 CFR 92.36(b). These 

agreements may include: 

* * * * * 

(viii) The establishment of agreements 

with agencies administering the State’s 

title IV–A and IV–E plans including 

criteria for: 

(A) Referring cases to and from the 

IV–D agency; 

* * * * * 

(D) The procedures to be used to 

coordinate services; and 

(E) Agreements to exchange data as 

authorized by law. 

(ix) The establishment of agreements 

with State agencies administering 

Medicaid or CHIP, including criteria for: 

(A) Referring cases to and from the 

IV–D agency; 

(B) The procedures to be used to 

coordinate services; and 

(C) Agreements to exchange data as 

authorized by law. 

(2) The establishment of paternity, 

including, but not limited to: 

* * * * * 

(vii) Developing and providing to 

parents and family members, hospitals, 

State birth records agencies, and other 

entities designated by the State and 

participating in the State’s voluntary 

paternity establishment program, under 

§ 303.5(g) of this chapter, educational 

and outreach activities, written and 

audiovisual materials about paternity 

establishment and forms necessary to 

voluntarily acknowledge paternity; and 

* * * * * 

(3) The establishment and 

enforcement of support obligations 

including, but not limited to: 

* * * * * 

(v) Bus fare or other minor 

transportation expenses to enable 

custodial or noncustodial parties to 

participate in child support proceedings 

and related activities; 

(vi) Services to increase pro se access 

to adjudicative and alternative dispute 

resolution processes in IV–D cases; 

(vii) De minimis costs associated with 

the inclusion of parenting time 

provisions entered as part of a child 


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support order and incidental to a child 

support enforcement proceeding; 

* * * * * 

(ix) Job services activities pursuant to 

§ 303.6(c)(5) of this chapter. 

* * * * * 

(11) Medical support activities as 

specified in §§ 303.30, 303.31, and 

303.32 of this chapter; and 

(12) Educational and outreach 

activities intended to inform the public, 

parents and family members, and young 

people who are not yet parents about 

the Child Support Enforcement 

program, responsible parenting and coparenting, family budgeting, and other 

financial consequences of raising 

children when the parents are not 

married to each other. 

■ 35. Amend § 304.21 by revising 

paragraphs (a) introductory text and 

(a)(1) to read as follows: 

§ 304.21 Federal financial participation in 

the costs of cooperative arrangements with 

courts and law enforcement officials. 

(a) General. Subject to the conditions 

and limitations specified in this part, 

Federal financial participation (FFP) at 

the applicable matching rate is available 

in the costs of cooperative agreements 

with appropriate courts and law 

enforcement officials in accordance 

with the requirements of § 302.34 of this 

chapter. Law enforcement officials 

means district attorneys, attorneys 

general, similar public attorneys and 

prosecutors and their staff, and 

corrections officials. When performed 

under agreement, which is reflected in 

a record, costs of the following activities 

are subject to reimbursement: 

(1) The activities, including 

administration of such activities, 

specified in § 304.20(b)(2) through (8) 

and (b)(11); 

* * * * * 

■ 36. Revise § 304.23 to read as follows: 

§ 304.23 Expenditures for which Federal 

financial participation is not available. 

Federal financial participation at the 

applicable matching rate is not available 

for: 

(a) Activities related to administering 

titles I, IV–A, IV–B, IV–E, X, XIV, XVI, 

XIX, XX, or XXI of the Act or 7 U.S.C. 

Chapter 51. 

(b) Purchased support enforcement 

services which are not secured in 

accordance with § 304.22. 

(c) Construction and major 

renovations. 

(d) Education and training programs 

and educational services for State and 

county employees and court personnel 

except direct cost of short term training 

provided to IV–D agency staff or 

pursuant to §§ 304.20(b)(2)(viii) and 

304.21. 

(e) Any expenditures which have 

been reimbursed by fees collected as 

required by this chapter. 

(f) Any costs of those caseworkers 

described in § 303.20(e) of this chapter. 

(g) Any expenditures made to carry 

out an agreement under § 303.15 of this 

chapter. 

(h) The costs of counsel for indigent 

defendants in IV–D actions. 

(i) The costs of guardians ad litem in 

IV–D actions. 

§ 304.25 [Amended] 

■ 37. Amend § 304.25 by: 

■ a. In paragraph (a), removing the 

reference ‘‘part 74’’ and adding the 

reference ‘‘part 92’’ in its place; and 

■ b. In paragraph (b), removing ‘‘30 

days’’ and adding ‘‘45 days’’ in its place. 

■ 38. Amend § 304.26 by revising 

paragraph (a)(1), removing and reserving 

paragraph (b), and removing paragraph 

(c) to read as follows: 

§ 304.26 Determination of Federal share of 

collections. 

(a) * * * 

(1) 75 percent for Puerto Rico, the 

Virgin Islands, Guam, and American 

Samoa for the distribution of retained 

IV–A collections; 55 percent for Puerto 

Rico, the Virgin Islands, Guam, the 

Northern Mariana Islands, and 

American Samoa for the distribution of 

retained IV–E collections; 70 percent for 

the District of Columbia for the 

distribution of retained IV–E 

collections; and 

* * * * * 

■ 39. Amend § 304.40 by revising 

paragraph (a)(2) to read as follows: 

§ 304.40 Repayment of Federal funds by 

installments. 

(a) * * * 

(2) The State has notified the OCSE 

Regional Office in a record of its intent 

to make installment repayments. Such 

notice must be given prior to the time 

repayment of the total was otherwise 

due. 

* * * * * 

PART 305—PROGRAM 

PERFORMANCE MEASURES, 

STANDARDS, FINANCIAL 

INCENTIVES, AND PENALTIES 

■ 40. The authority for part 305 is 

revised to read as follows: 

Authority: 42 U.S.C. 609(a)(8), 652(a)(4) 

and (g), 658a, and 1302. 

■ 41. Amend § 305.35 by: 

■ a. In paragraph (d), adding a sentence 

to the end of the paragraph; 

■ b. Redesignating paragraph (e) as 

paragraph (f); and 

■ c. Adding paragraph (e). 

The revision and addition read as 

follows: 

§ 305.35 Reinvestment. 

* * * * * 

(d) * * * Non-compliance will result 

in disallowances of incentive amounts 

equal to the amount of funds 

supplanted. 

(e) Using the Form OCSE–396A, 

‘‘Child Support Enforcement Program 

Expenditure Report,’’ the State Current 

Spending Level will be calculated by 

determining the State Share of Total 

Expenditures Claimed for all four 

quarters of the fiscal year minus State 

Share of IV–D Administrative 

Expenditures Made Using Funds 

Received as Incentive Payments for all 

four quarters of the fiscal year, plus the 

Federal Parent Locator Service (FPLS) 

fees for all four quarters of the fiscal 

year. 

(1) The State Share of Expenditures 

claimed is: Total Expenditures Claimed 

for the Current Quarter and the Prior 

Quarter Adjustments minus the Federal 

Share of Total Expenditures Claimed for 

the Current Quarter and Prior Quarter 

Adjustments claimed on the Form 

OCSE–396A for all four quarter of the 

fiscal year. 

(2) The State Share of IV–D 

Administrative Expenditures Made 

Using Funds Received as Incentive 

Payments is: IV–D Administrative 

Expenditures Made Using Funds 

Received as Incentive Payments for the 

Current Quarter and the Prior Quarter 

Adjustments minus the Federal Share of 

IV–D Administrative Expenditures 

Made Using Funds Received as 

Incentive Payments for the Current 

Quarter and Prior Quarter Adjustments 

claimed on the Form OCSE–396A for all 

four quarters of the fiscal year. 

(3) The Fees for the Use of the Federal 

Parent Locator Service (FPLS) can be 

computed by adding the FPLS fees 

claimed on the Form OCSE–396A for all 

four quarters of the fiscal year. 

* * * * * 

■ 42. Amend § 305.63 by revising 

paragraph (d) introductory text to read 

as follows: 

§ 305.63 Standards for determining 

substantial compliance with IV–D 

requirements. 

* * * * * 

(d) With respect to the 75 percent 

standard in paragraph (c) of this section: 

* * * * * 

■ 43. Amend § 305.64 by revising the 

second sentence of paragraph (c) to read 

as follows: 


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§ 305.64 Audit procedures and State 

comments. 

* * * * * 

(c) * * * Within a specified 

timeframe from the date the report was 

sent, the IV–D agency may submit 

comments, which are reflected in a 

record, on any part of the report which 

the IV–D agency believes is in error. 

* * * 

■ 44. Amend § 305.66 by revising 

paragraph (a) to read as follows: 

§ 305.66 Notice, corrective action year, 

and imposition of penalty. 

(a) If a State is found by the Secretary 

to be subject to a penalty as described 

in § 305.61, the OCSE will notify the 

State, in a record, of such finding. 

* * * * * 

PART 307—COMPUTERIZED 

SUPPORT ENFORCEMENT SYSTEMS 

■ 45. The authority for part 307 

continues to read as follows: 

Authority: 42 U.S.C. 652 through 658, 664, 

666 through 669A, and 1302. 

■ 46. Amend § 307.5 by revising 

paragraph (c)(3) to read as follows: 

§ 307.5 Mandatory computerized support 

enforcement systems. 

* * * * * 

(c) * * * 

(3) The State provides assurance, 

which is reflected in a record, that steps 

will be taken to otherwise improve the 

State’s Child Support Enforcement 

program. 

* * * * * 

■ 47. Amend § 307.11 by revising 

paragraph (c)(3) to read as follows: 

§ 307.11 Functional requirements for 

computerized support enforcement 

systems in operation by October 1, 2000. 

* * * * * 

(c) * * * 

(3) Automatic use of enforcement 

procedures, including those under 

section 466(c) of the Act if payments are 

not timely, and the following 

procedures: 

(i) Identify cases which have been 

previously identified as involving a 

noncustodial parent who is a recipient 

of SSI or concurrent SSI and benefits 

under title II of the Act, to prevent 

garnishment of the noncustodial 

parent’s financial account; and 

(ii) Return funds to a noncustodial 

parent, within 2 days after the agency 

determines that SSI or concurrent SSI 

and benefits under title II of the Act, in 

the noncustodial parent’s financial 

account have been incorrectly 

garnished. 

* * * * * 

PART 308—ANNUAL STATE SELFASSESSMENT REVIEW AND REPORT 

■ 48. The authority for part 308 

continues to read as follows: 

Authority: 42 U.S.C. 654(15)(A) and 1302. 

■ 49. Amend § 308.2 by revising 

paragraphs (b)(2)(ii), (c)(3)(i), and 

(f)(2)(i) to read as follows: 

§ 308.2 Required program compliance 

criteria. 

* * * * * 

(b) * * * 

(2) * * * 

(ii) If location activities are necessary, 

using all appropriate sources within 75 

days pursuant to § 303.3(b)(3) of this 

chapter. This includes all the following 

locate sources as appropriate: Custodial 

parent, Federal and State Parent Locator 

Services, U.S. Postal Service, State 

workforce agency, employment data, 

Department of Motor Vehicles, and 

credit bureaus; 

* * * * * 

(c) * * * 

(3) * * * 

(i) If location activities are necessary, 

using all appropriate location sources 

within 75 days pursuant to § 303.3(b)(3) 

of this chapter. Location sources 

include: Custodial parent, Federal and 

State Parent Locator Services, U.S. 

Postal Service, State workforce agency, 

Department of Motor Vehicles, and 

credit bureaus; 

* * * * * 

(f) * * * 

(2) * * * 

(i) If location is necessary to conduct 

a review, using all appropriate location 

sources within 75 days of opening the 

case pursuant to § 303.3(b)(3) of this 

chapter. Location sources include: 

Custodial parent, Federal and State 

Parent Locator Services, U.S. Postal 

Service, State workforce agency, 

unemployment data, Department of 

Motor Vehicles, and credit bureaus; 

* * * * * 

PART 309—TRIBAL CHILD SUPPORT 

ENFORCEMENT (IV–D) PROGRAM 

■ 50. The authority for part 309 is 

revised to read as follows: 

Authority: 42 U.S.C. 655(f) and 1302. 

■ 51. Amend § 309.85 by revising 

paragraph (b) to read as follows: 

§ 309.85 What records must a Tribe or 

Tribal organization agree to maintain in a 

Tribal IV–D plan? 

* * * * * 

(b) The Tribal IV–D agency will 

comply with the retention and access 

requirements at 45 CFR 92.42, including 

the requirement that records be retained 

for at least 3 years. 

■ 52. Amend § 309.130 by revising 

paragraphs (b)(3), (b)(4), (d)(3), and (h) 

to read as follows: 

§ 309.130 How will Tribal IV–D programs 

be funded and what forms are required? 

* * * * * 

(b) * * * 

(3) SF 425, ‘‘Federal Financial 

Report,’’ to be submitted quarterly 

within 30 days after the end of each of 

the first three quarters of the funding 

period and within 30 days after the end 

of each of the first three quarters of the 

liquidation period. The final report for 

each period is due within 90 days after 

the end of the fourth quarter of both the 

funding and the liquidation period; and 

(4) Form OCSE–34A, ‘‘Quarterly 

Report of Collections’’ must be 

submitted no later than 45 days 

following the end of each fiscal quarter. 

No revisions or adjustments of the 

financial reports submitted for any 

quarter of the fiscal year will be 

accepted by OCSE later than December 

31, 3 months after the end of the fiscal 

year. 

* * * * * 

(d) * * * 

(3) The non-federal share of program 

expenditures must be provided either 

with cash or with in-kind contributions 

and must meet the requirements found 

in 45 CFR 92.24. 

* * * * * 

(h) Grant administration 

requirements. The provisions of part 92 

of this title, establishing uniform 

administrative requirements and cost 

principles, shall apply to all grants 

made to Tribes and Tribal organizations 

under this part. 

■ 53. Amend § 309.145 by revising 

paragraph (a)(3) introductory text to 

read as follows: 

§ 309.145 What costs are allowable for 

Tribal IV–D programs carried out under 

§ 309.65(a) of this part? 

* * * * * 

(a) * * * 

(3) Establishment of all necessary 

agreements with other Tribal, State, and 

local agencies or private providers for 

the provision of child support 

enforcement services in accordance 

with Procurement Standards found in 

45 CFR part 92. These agreements may 

include: 

* * * * * 

■ 54. Amend § 309.160 by revising the 

first sentence to read as follows: 


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§ 309.160 How will OCSE determine if 

Tribal IV–D program funds are appropriately 

expended? 

OCSE will rely on audits required by 

OMB Circular A–133, ‘‘Audits of States, 

Local Governments, and Non-Profit Organizations’’ and 45 CFR 

part 92. * * * 

* * * * * 

[FR Doc. 2014–26822 Filed 11–13–14; 8:45 am] 

BILLING CODE 4184–01–P 


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