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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 321 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                 S. 321

  To provide more child support money to families leaving welfare, to 
 simplify the rules governing the assignment and distribution of child 
   support collected by States on behalf of children, to improve the 
          collection of child support, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            February 8, 2005

 Ms. Snowe (for herself, Mr. Kohl, Mr. Rockefeller, and Ms. Landrieu) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To provide more child support money to families leaving welfare, to 
 simplify the rules governing the assignment and distribution of child 
   support collected by States on behalf of children, to improve the 
          collection of child support, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Child Support Distribution Act of 
2005''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec.  1. Short title.
Sec.  2. Table of contents.
                 TITLE I--DISTRIBUTION OF CHILD SUPPORT

Sec.  101. Distribution of child support collected by States on behalf 
                            of children receiving certain welfare 
                            benefits.
                     TITLE II--EXPANDED ENFORCEMENT

Sec.  201. Decrease in amount of child support arrearage triggering 
                            passport denial.
Sec.  202. Use of tax refund intercept program to collect past-due 
                            child support on behalf of children who are 
                            not minors.
Sec.  203. Garnishment of compensation paid to veterans for service-
                            connected disabilities in order to enforce 
                            child support obligations.
Sec.  204. Mandatory review and adjustment of child support orders for 
                            families receiving TANF.
                        TITLE III--MISCELLANEOUS

Sec.  301. Report on undistributed child support payments.
Sec.  302. Use of new hire information to assist in administration of 
                            unemployment compensation programs.
Sec.  303. Increase in payment rate to States for expenditures for 
                            short-term training of staff of certain 
                            child welfare agencies.
                        TITLE IV--EFFECTIVE DATE

Sec.  401. Effective date.

                 TITLE I--DISTRIBUTION OF CHILD SUPPORT

SEC. 101. DISTRIBUTION OF CHILD SUPPORT COLLECTED BY STATES ON BEHALF 
              OF CHILDREN RECEIVING CERTAIN WELFARE BENEFITS.

    (a) Modification of Rule Requiring Assignment of Support Rights as 
a Condition of Receiving TANF.--Section 408(a)(3) of the Social 
Security Act (42 U.S.C. 608(a)(3)) is amended to read as follows:
            ``(3) No assistance for families not assigning certain 
        support rights to the state.--A State to which a grant is made 
        under section 403 shall require, as a condition of paying 
        assistance to a family under the State program funded under 
        this part, that a member of the family assign to the State any 
        right the family member may have (on behalf of the family 
        member or of any other person for whom the family member has 
        applied for or is receiving such assistance) to support from 
        any other person, not exceeding the total amount of assistance 
        so paid to the family, which accrues during the period that the 
        family receives assistance under the program.''.
    (b) Increasing Child Support Payments to Families and Simplifying 
Child Support Distribution Rules.--
            (1) Distribution rules.--
                    (A) In general.--Section 457(a) of such Act (42 
                U.S.C. 657(a)) is amended to read as follows:
    ``(a) In General.--Subject to subsections (d) and (e), the amounts 
collected on behalf of a family as support by a State pursuant to a 
plan approved under this part shall be distributed as follows:
            ``(1) Families receiving assistance.--In the case of a 
        family receiving assistance from the State, the State shall--
                    ``(A) pay to the Federal Government the Federal 
                share of the amount collected, subject to paragraph 
                (3)(A);
                    ``(B) retain, or pay to the family, the State share 
                of the amount collected, subject to paragraph (3)(B); 
                and
                    ``(C) pay to the family any remaining amount.
            ``(2) Families that formerly received assistance.--In the 
        case of a family that formerly received assistance from the 
        State:
                    ``(A) Current support.--To the extent that the 
                amount collected does not exceed the current support 
                amount, the State shall pay the amount to the family.
                    ``(B) Arrearages.--Except as otherwise provided in 
                an election made under 434(34), to the extent that the 
                amount collected exceeds the current support amount, 
                the State--
                            ``(i) shall first pay to the family the 
                        excess amount, to the extent necessary to 
                        satisfy support arrearages not assigned 
                        pursuant to section 408(a)(3);
                            ``(ii) if the amount collected exceeds the 
                        amount required to be paid to the family under 
                        clause (i), shall--
                                    ``(I) pay to the Federal 
                                Government, the Federal share of the 
                                excess amount described in this clause, 
                                subject to paragraph (3)(A); and
                                    ``(II) retain, or pay to the 
                                family, the State share of the excess 
                                amount described in this clause, 
                                subject to paragraph (3)(B); and
                            ``(iii) shall pay to the family any 
                        remaining amount.
            ``(3) Limitations.--
                    ``(A) Federal reimbursements.--The total of the 
                amounts paid by the State to the Federal Government 
                under paragraphs (1) and (2) of this subsection with 
                respect to a family shall not exceed the Federal share 
                of the amount assigned with respect to the family 
                pursuant to section 408(a)(3).
                    ``(B) State reimbursements.--The total of the 
                amounts retained by the State under paragraphs (1) and 
                (2) of this subsection with respect to a family shall 
                not exceed the State share of the amount assigned with 
respect to the family pursuant to section 408(a)(3).
            ``(4) Families that never received assistance.--In the case 
        of any other family, the State shall pay the amount collected 
        to the family.
            ``(5) Families under certain agreements.--Notwithstanding 
        paragraphs (1) through (3), in the case of an amount collected 
        for a family in accordance with a cooperative agreement under 
        section 454(33), the State shall distribute the amount 
        collected pursuant to the terms of the agreement.
            ``(6) State financing options.--To the extent that the 
        State's share of the amount payable to a family pursuant to 
        paragraph (2)(B) of this subsection exceeds the amount that the 
        State estimates (under procedures approved by the Secretary) 
        would have been payable to the family pursuant to former 
        section 457(a)(2)(B) (as in effect for the State immediately 
        before the date this subsection first applies to the State) if 
        such former section had remained in effect, the State may elect 
        to use the grant made to the State under section 403(a) to pay 
        the amount, or to have the payment considered a qualified State 
        expenditure for purposes of section 409(a)(7), but not both.
            ``(7) State option to pass-through additional support with 
        federal financial participation.--
                    ``(A) Families that formerly received assistance.--
                Notwithstanding paragraph (2)(B)(ii), a State shall not 
                be required to pay to the Federal Government the 
                Federal share of an amount collected on behalf of a 
                family that formerly received assistance under the 
                State program funded under part A, to the extent that 
                the State pays the amount to the family.
                    ``(B) Recipients of tanf for less than 5 years.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (1), in the case of a family that 
                        includes an adult that has received assistance 
                        from the State for not more than 5 years after 
                        the date of enactment of this paragraph, a 
                        State shall not be required to pay to the 
                        Federal Government the Federal share of the 
                        excepted portion (as defined in clause (ii)) of 
                        any amount collected on behalf of such family 
                        during a month to the extent that--
                                    ``(I) the State pays the excepted 
                                portion to the family; and
                                    ``(II) the excepted portion is 
                                disregarded in determining the amount 
                                and type of assistance provided to the 
                                family under such program.
                            ``(ii) Excepted portion defined.--For 
                        purposes of this subparagraph, the term 
                        `excepted portion' means that portion of the 
                        amount collected on behalf of a family during a 
                        month that does not exceed $400 per month, or 
                        in the case of a family that includes 2 or more 
                        children, that does not exceed an amount 
                        established by the State that is not more than 
                        $600 per month.
            ``(8) States with demonstration waivers.--Notwithstanding 
        the preceding paragraphs, in the case of a State that, on the 
        date of enactment of this paragraph, has had in effect since 
        October 1, 1997, a waiver under section 1115 permitting pass-
        through payments of child support collections--
                    ``(A) the State may continue to distribute such 
                payments to families without regard to the expiration 
                date of such waiver; and
                    ``(B) the requirement under paragraph (1) to pay to 
                the Federal Government the Federal share of the amount 
                collected on behalf of a family shall not apply to the 
                extent that--
                            ``(i) the State distributes such amount to 
                        the family; and
                            ``(ii) such amount is disregarded in 
                        determining the amount and type of assistance 
                        paid to the family.''.
                    (B) State plan to include election as to which 
                rules to apply in distributing child support arrearages 
                collected on behalf of families formerly receiving 
                assistance.--Section 454 of such Act (42 U.S.C. 654) is 
                amended--
                            (i) by striking ``and'' at the end of 
                        paragraph (32);
                            (ii) by striking the period at the end of 
                        paragraph (33) and inserting ``; and''; and
                            (iii) by inserting after paragraph (33) the 
                        following:
            ``(34) include an election by the State to apply section 
        457(a)(2)(B) of this Act or former section 457(a)(2)(B) of this 
        Act (as in effect for the State immediately before the date 
        this paragraph first applies to the State) to the distribution 
        of the amounts which are the subject of such sections, and for 
        so long as the State elects to so apply such former section, 
        the amendments made by paragraphs (1) and (2) of subsection (e) 
        of section 101 of the Child Support Distribution Act of 2005 
        shall not apply with respect to the State, notwithstanding 
        subsection (f)(1) of such section 101.''.
                    (C) Approval of estimation procedures.--Not later 
                than the date that is 6 months after the date of 
                enactment of this Act, the Secretary of Health and 
                Human Services, in consultation with the States (as 
                defined for purposes of part D of title IV of the 
                Social Security Act), shall establish the procedures to 
                be used to make the estimate described in section 
                457(a)(6) of such Act.
            (2) Current support amount defined.--Section 457(c) of such 
        Act (42 U.S.C. 657(c)) is amended by adding at the end the 
        following:
            ``(5) Current support amount.--The term `current support 
        amount' means, with respect to amounts collected as support on 
        behalf of a family, the amount designated as the monthly 
        support obligation of the noncustodial parent in the order 
        requiring the support.''.
    (c) Ban on Recovery of Medicaid Costs for Certain Births.--Section 
454 of such Act (42 U.S.C. 654), as amended by subsection (b)(1)(B), is 
amended--
            (1) by striking ``and'' at the end of paragraph (33);
            (2) by striking the period at the end of paragraph (34) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (34) the following:
            ``(35) provide that the State shall not use the State 
        program operated under this part to collect any amount owed to 
        the State by reason of costs incurred under the State plan 
        approved under title XIX for the birth of a child for whom 
        support rights have been assigned pursuant to section 
        408(a)(3), 471(a)(17), or 1912.''.
    (d) State Option To Discontinue Older Support Assignments.--Section 
457(b) (42 U.S.C. 657(b)) is amended to read as follows:
    ``(b) Continuation of Assignments.--
            ``(1) State option to discontinue pre-1997 support 
        assignments.--
                    ``(A) In general.--Any rights to support 
                obligations assigned to a State as a condition of 
                receiving assistance from the State under part A and in 
                effect on September 30, 1997 (or such earlier date on 
                or after August 22, 1996, as the State may choose), may 
                remain assigned after such date.
                    ``(B) Distribution of amounts after assignment 
                discontinuation.--If a State chooses to discontinue the 
                assignment of a support obligation described in 
                subparagraph (A), the State may treat amounts collected 
                pursuant to such assignment as if such amounts had 
                never been assigned and may distribute such amounts to 
                the family in accordance with subsection (a)(4).
            ``(2) State option to discontinue post-1997 assignments.--
                    ``(A) In general.--Any rights to support 
                obligations accruing before the date on which a family 
                first receives assistance under part A that are 
                assigned to a State under that part and in effect 
                before the implementation date of this section may 
                remain assigned after such date.
                    ``(B) Distribution of amounts after assignment 
                discontinuation.--If a State chooses to discontinue the 
                assignment of a support obligation described in 
                subparagraph (A), the State may treat amounts collected 
                pursuant to such assignment as if such amounts had 
                never been assigned and may distribute such amounts to 
                the family in accordance with subsection (a)(4).''.
    (e) Conforming Amendments.--
            (1) Section 404(a) of such Act (42 U.S.C. 604(a)) is 
        amended--
                    (A) by striking ``or'' at the end of paragraph (1);
                    (B) by striking the period at the end of paragraph 
                (2) and inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(3) to fund payment of an amount pursuant to section 
        457(a)(2)(B), but only to the extent that the State properly 
        elects under section 457(a)(6) to use the grant to fund the 
        payment.''.
            (2) Section 409(a)(7)(B)(i) of such Act (42 U.S.C. 
        609(a)(7)(B)(i)) is amended--
                    (A) in subclause (I)(aa), by striking 
                ``457(a)(1)(B)'' and inserting ``457(a)(1)''; and
                    (B) by adding at the end the following:
                                    ``(V) Portions of certain child 
                                support payments collected on behalf of 
                                and distributed to families no longer 
                                receiving assistance.--Any amount paid 
                                by a State pursuant to section 
                                457(a)(2)(B), but only to the extent 
                                that the State properly elects under 
                                section 457(a)(6) to have the payment 
                                considered a qualified State 
                                expenditure.''.
            (3) Section 6402(c) of the Internal Revenue Code of 1986 
        (relating to offset of past-due support against overpayments) 
        is amended--
                    (A) in the first sentence, by striking ``the Social 
                Security Act.'' and inserting ``of such Act.''; and
                    (B) by striking the third sentence and inserting 
                the following: ``The Secretary shall apply a reduction 
                under this subsection first to an amount certified by 
                the State as past due support under section 464 of the 
                Social Security Act before any other reductions allowed 
                by law.''.
    (f) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on October 1, 2008, and shall apply to payments 
        under parts A and D of title IV of the Social Security Act for 
        calendar quarters beginning on or after such date, and without 
        regard to whether regulations to implement such amendments (in 
        the case of State programs operated under such part D) are 
        promulgated by such date.
            (2) State option to accelerate effective date.--In 
        addition, a State may elect to have the amendments made by this 
        section apply to the State and to amounts collected by the 
        State, on and after such date as the State may select that is 
        after the date of enactment of this Act and before October 1, 
        2008.

                     TITLE II--EXPANDED ENFORCEMENT

SEC. 201. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE TRIGGERING 
              PASSPORT DENIAL.

    (a) In General.--Section 452(k)(1) of the Social Security Act (42 
U.S.C. 652(k)(1)) is amended by striking ``$5,000'' and inserting 
``$2,500''.
    (b) Conforming Amendment.--Section 454(31) of the Social Security 
Act (42 U.S.C. 654(31)) is amended by striking ``$5,000'' and inserting 
``$2,500''.

SEC. 202. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT PAST-DUE CHILD 
              SUPPORT ON BEHALF OF CHILDREN WHO ARE NOT MINORS.

    Section 464 of the Social Security Act (42 U.S.C. 664) is amended--
            (1) in subsection (a)(2)(A), by striking ``(as that term is 
        defined for purposes of this paragraph under subsection (c))''; 
        and
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1) Except as provided in 
                        paragraph (2), as used in'' and inserting 
                        ``In''; and
                            (ii) by inserting ``(whether or not a 
                        minor)'' after ``a child'' each place it 
                        appears; and
                    (B) by striking paragraphs (2) and (3).

SEC. 203. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR SERVICE-
              CONNECTED DISABILITIES IN ORDER TO ENFORCE CHILD SUPPORT 
              OBLIGATIONS.

    Section 459(h) of the Social Security Act (42 U.S.C. 659(h)) is 
amended--
            (1) in paragraph (1)(A)(ii)--
                    (A) in subclause (IV), by striking ``or'' after the 
                semicolon;
                    (B) in subclause (V), by inserting ``or'' after the 
                semicolon; and
                    (C) by adding at the end the following:
                                    ``(VI) subject to paragraph (3), 
                                other than periodic benefits or 
                                payments described in subclause (V), by 
                                the Secretary of Veterans Affairs as 
                                compensation for a service-connected 
                                disability paid by the Secretary to a 
                                former member of the Armed Forces;''; 
                                and
            (2) by adding at the end the following:
            ``(3) Limitations with respect to compensation paid to 
        veterans for service-connected disabilities.--
                    ``(A) Alimony and child support.--Subject to 
                subparagraph (B), compensation described in paragraph 
                (1)(A)(ii)(VI) shall not be subject to withholding 
                pursuant to this section--
                            ``(i) for payment of alimony; or
                            ``(ii) for payment of child support if the 
                        individual is fewer than 60 days in arrears in 
                        payment of the support.
                    ``(B) Limitation.--Not more than 50 percent of any 
                payment of compensation described in subparagraph (A) 
                may be withheld pursuant to this section.''.

SEC. 204. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT ORDERS FOR 
              FAMILIES RECEIVING TANF.

    (a) In General.--Section 466(a)(10)(A)(i) of the Social Security 
Act (42 U.S.C. 666(a)(10)(A)(i)) is amended in the matter preceding 
subclause (I)--
            (1) by striking ``parent, or,'' and inserting ``parent 
        or''; and
            (2) by striking ``upon the request of the State agency 
        under the State plan or of either parent,''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2007.

                        TITLE III--MISCELLANEOUS

SEC. 301. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

    Not later than 6 months after the date of enactment of this Act, 
the Secretary of Health and Human Services shall submit to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate a report on the procedures that the 
States use generally to locate custodial parents for whom child support 
has been collected but not yet distributed. The report shall include an 
estimate of the total amount of such undistributed child support and 
the average length of time it takes for such child support to be 
distributed. The Secretary shall include in the report recommendations 
as to whether additional procedures should be established at the 
Federal or State level to expedite the payment of undistributed child 
support.

SEC. 302. USE OF NEW HIRE INFORMATION TO ASSIST IN ADMINISTRATION OF 
              UNEMPLOYMENT COMPENSATION PROGRAMS.

    Section 453(j) of the Social Security Act (42 U.S.C. 653(j)) is 
amended by adding at the end the following:
            ``(7) Information comparisons and disclosure to assist in 
        administration of unemployment compensation programs.--
                    ``(A) In general.--If a State agency responsible 
                for the administration of an unemployment compensation 
                program under Federal or State law transmits to the 
                Secretary the name and social security account number 
                of an individual, the Secretary shall, if the 
                information in the National Directory of New Hires 
                indicates that the individual may be employed, disclose 
                to the State agency the name, address, and employer 
                identification number of any putative employer of the 
                individual, subject to this paragraph.
                    ``(B) Condition on disclosure.--The Secretary shall 
                make a disclosure under subparagraph (A) only to the 
                extent that the Secretary determines that the 
                disclosure would not interfere with the effective 
                operation of the program under this part.
                    ``(C) Use of information.--A State agency may use 
                information provided under this paragraph only for 
                purposes of administering a program referred to in 
                subparagraph (A).''.

SEC. 303. INCREASE IN PAYMENT RATE TO STATES FOR EXPENDITURES FOR 
              SHORT-TERM TRAINING OF STAFF OF CERTAIN CHILD WELFARE 
              AGENCIES.

    Section 474(a)(3)(B) of the Social Security Act (42 U.S.C. 
674(a)(3)(B)) is amended by inserting ``, or State-licensed or State-
approved child welfare agencies providing services,'' after ``child 
care institutions''.

                        TITLE IV--EFFECTIVE DATE

SEC. 401. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this Act, and 
subject to subsection (b), this Act and the amendments made by this Act 
shall take effect on October 1, 2005, and shall apply to payments under 
part D of title IV of the Social Security Act for calendar quarters 
beginning on or after such date, and without regard to whether 
regulations to implement such amendments are promulgated by such date.
    (b) Delay Permitted If State Legislation Required.--In the case of 
a State plan approved under section 454 of the Social Security Act 
which requires State legislation (other than legislation appropriating 
funds) in order for the plan to meet the additional requirements 
imposed by the amendments made by this Act, the State plan shall not be 
regarded as failing to comply with the additional requirements solely 
on the basis of the failure of the plan to meet the additional 
requirements before the first day of the first calendar quarter 
beginning after the close of the first regular session of the State 
legislature that begins after the date of enactment of this Act. For 
purposes of the previous sentence, in the case of a State that has a 2-
year legislative session, each year of such session shall be deemed to 
be a separate regular session of the State legislature.
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