I

104TH CONGRESS

2D SESSION H. R. 3362

To increase access of State child support enforcement agencies to certain

financial information of noncustodial parents, and to encourage States

to improve their enforcement of child support obligations.

IN THE HOUSE OF REPRESENTATIVES

APRIL 30, 1996

Mrs. MALONEY introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Banking and Financial Services, for a period to be subsequently determined

by the Speaker, in each case for consideration of such provisions as fall

within the jurisdiction of the committee concerned

A BILL

To increase access of State child support enforcement agencies to certain financial information of noncustodial parents, and to encourage States to improve their enforcement of child support obligations.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Child Support Enforce5 ment Improvements Act of 1996’’.
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1 SEC. 2. NONLIABILITY FOR DEPOSITORY INSTITUTIONS

2 PROVIDING FINANCIAL RECORDS TO STATE

3 CHILD SUPPORT ENFORCEMENT AGENCIES

4 IN CHILD SUPPORT CASES.

5 (a) IN GENERAL.—Notwithstanding any other provi6 sion of Federal or State law, a depository institution shall

7 not be liable under any Federal or State law to any person

8 for disclosing any financial record of an individual to a

9 State child support enforcement agency attempting to es10 tablish, modify, or enforce a child support obligation of

11 such individual.

12 (b) PROHIBITION OF DISCLOSURE OF FINANCIAL

13 RECORD OBTAINED BY STATE CHILD SUPPORT EN14 FORCEMENT AGENCY.—A State child support enforcement

15 agency which obtains a financial record of an individual

16 from a depository institution pursuant to subsection (a)

17 may disclose such financial record only for the purpose

18 of, and to the extent necessary in, establishing, modifying,

19 or enforcing a child support obligation of such individual.

20 (c) CIVIL DAMAGES FOR UNAUTHORIZED DISCLO21 SURE.—

22 (1) DISCLOSURE BY STATE OFFICER OR EM23 PLOYEE.—If any officer or employee of a State

24 knowingly, or by reason of negligence, discloses a fi25 nancial record of an individual in violation of sub26 section (b), such individual may bring a civil action
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1 for damages against such State in a district court of

2 the United States.

3 (2) NO LIABILITY FOR GOOD FAITH BUT ERRO4 NEOUS INTERPRETATION.—No liability shall arise

5 under this subsection with respect to any disclosure

6 which results from a good faith, but erroneous, in7 terpretation of subsection (b).

8 (3) DAMAGES.—In any action brought under

9 paragraph (1), upon a finding of liability on the part

10 of the defendant, the defendant shall be liable to the

11 plaintiff in an amount equal to the sum of—

12 (A) the greater of—

13 (i) $1,000 for each act of unauthor14 ized disclosure of a financial record with

15 respect to which such defendant is found

16 liable; or

17 (ii) the sum of—

18 (I) the actual damages sustained

19 by the plaintiff as a result of such un20 authorized disclosure; plus

21 (II) in the case of a willful disclo22 sure or a disclosure which is the re23 sult of gross negligence, punitive dam24 ages; plus

25 (B) the costs of the action.
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1 (d) DEFINITIONS.—For purposes of this section:

2 (1) The term ‘‘depository institution’’ means—

3 (A) a depository institution, as defined by

4 section 3(c) of the Federal Deposit Insurance

5 Act;

6 (B) an institution-affiliated party, as de7 fined by section 3(u) of such Act; and

8 (C) any Federal credit union or State cred9 it union, as defined by section 101 of the Fed10 eral Credit Union Act, including an institution11 affiliated party of such a credit union, as de12 fined by section 206(r) of such Act.

13 (2) The term ‘‘financial record’’ has the mean14 ing given such term by section 1101(2) of the Right

15 to Financial Privacy Act of 1978.

16 (3) The term ‘‘State child support enforcement

17 agency’’ means a State agency which administers a

18 State program for establishing and enforcing child

19 support obligations.

20 SEC. 3. ACCESS TO AND USE OF CONSUMER REPORTS BY

21 STATE CHILD SUPPORT ENFORCEMENT

22 AGENCIES IN CHILD SUPPORT CASES.

23 (a) IN GENERAL.—Section 604 of the Fair Credit

24 Reporting Act (15 U.S.C. 1681b) is amended by adding

25 at the end the following:
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1 ‘‘(4) To a State child support enforcement agency

2 that is seeking to establish, modify, or enforce a child sup3 port obligation against the consumer, if—

4 ‘‘(A) the paternity of the consumer for the child

5 to which the obligation relates has been established

6 or acknowledged by the consumer in accordance with

7 State laws under which the obligation arises (if re8 quired by those laws); and

9 ‘‘(B) the State child support enforcement agen10 cy—

11 ‘‘(i) before obtaining the consumer report,

12 provides written notice to the consumer that the

13 State agency intends to obtain a consumer re14 port on the consumer; and

15 ‘‘(ii) certifies to the consumer reporting

16 agency that—

17 ‘‘(I) the requirement in subparagraph

18 (A) has been fulfilled (if applicable); and

19 ‘‘(II) the notice required by clause (i)

20 has been provided.’’.

21 (b) STATE CHILD SUPPORT ENFORCEMENT AGENCY

22 DEFINED.—Section 603 of such Act (15 U.S.C. 1681a)

23 is amended by adding at the end the following new sub24 section:
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1 ‘‘(k) The term ‘State child support enforcement agen2 cy’ means a State agency which administers a State pro3 gram for establishing and enforcing child support obliga4 tions.’’.

5 SEC. 4. HEALTH CARE SUPPORT.

6 (a) INCLUSION IN CHILD SUPPORT ORDERS.—

7 (1) IN GENERAL.—Section 466(a) of the Social

8 Security Act (42 U.S.C. 666(a)) is amended by in9 serting after paragraph (11) the following:

10 ‘‘(12) Not later than the beginning of the 9th

11 calendar month that begins after the date the Sec12 retary prescribes final regulations as provided for in

13 section 467(d)(2):

14 ‘‘(A) Procedures which require any child

15 support order, issued or modified by a court or

16 administrative agency of the State on or after

17 the effective date of guidelines established by

18 the State under section 467(d), to provide for

19 coverage of the health care costs of the child in

20 accordance with such guidelines.

21 ‘‘(B) Procedures which require the expe22 dited consideration and disposition of any alle23 gation of noncompliance with an obligation to

24 cover the health care costs of a child imposed
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1 under a child support order issued or modified

2 in the State.’’.

3 (2) STATE GUIDELINES.—Section 467 of such

4 Act (42 U.S.C. 667) is amended by adding at the

5 end the following:

6 ‘‘(d)(1) Not later than the beginning of the 9th cal7 endar month that begins after the date the Secretary pre8 scribes final regulations in accordance with paragraph (2),

9 each State, as a condition for having its State plan ap10 proved under this part, must establish guidelines for the

11 coverage of the health care costs of children pursuant to

12 child support orders issued or modified in the State, which

13 guidelines shall create a streamlined process that meets

14 the minimum standards established by the Secretary in

15 such regulations.

16 ‘‘(2)(A) The Secretary shall promulgate regulations

17 which set forth minimum standards that any set of guide18 lines established pursuant to paragraph (1) must meet in

19 providing for the coverage of the health care costs of chil20 dren pursuant to child support orders issued or modified

21 in the State, including—

22 ‘‘(i) the contents of such an order with respect

23 to the coverage of such costs;

24 ‘‘(ii) the distribution of responsibility for such

25 costs;
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1 ‘‘(iii) to the extent that such costs are to be

2 covered through health insurance—

3 ‘‘(I) the provision of such insurance;

4 ‘‘(II) the payment of insurance claims; and

5 ‘‘(III) the rights of the noncustodial parent

6 and the custodial parent to insurance informa7 tion;

8 ‘‘(iv) the circumstances under which a provider

9 of health insurance may or may not deny coverage

10 to a child who is the subject of such an order;

11 ‘‘(v) penalties to be imposed on providers of

12 health insurance who fail to comply with the guide13 lines; and

14 ‘‘(vi) how changes in the circumstances of the

15 noncustodial parent and the custodial parent are to

16 be taken into account with respect to the coverage

17 of such costs.

18 ‘‘(B) In developing such standards, the Secretary

19 shall ensure that, in establishing guidelines pursuant to

20 paragraph (1), the State considers the following matters

21 in the following order of importance:

22 ‘‘(i) The best interests of the child.

23 ‘‘(ii) The financial and other circumstances of

24 the parents of the child.

25 ‘‘(iii) Cost-effectiveness.
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1 ‘‘(3) The preceding subsections of this section shall

2 apply in like manner to the guidelines established pursu3 ant to this subsection.’’.

4 (3) REGULATIONS.—

5 (A) PROPOSED REGULATIONS.—Within 9

6 months after the date of the enactment of this

7 Act, the Secretary of Health and Human Serv8 ices shall issue proposed regulations to imple9 ment the amendments made by this subsection.

10 (B) FINAL REGULATIONS.—Within 14

11 months after the date of the enactment of this

12 Act, the Secretary of Health and Human Serv13 ices shall issue final regulations to implement

14 the amendments made by this subsection.

15 (b) INCLUSION IN INCENTIVE PAYMENTS PROGRAM

16 OF DEPENDENT HEALTH INSURANCE PROVIDED DUE TO

17 SUCCESSFUL ENFORCEMENT.—

18 (1) IN GENERAL.—Section 458(b) of the Social

19 Security Act (42 U.S.C. 658(b)) is amended by add20 ing at the end the following:

21 ‘‘(5)(A) For purposes of this section, the successful

22 enforcement by the State of a provision of a support order

23 requiring an absent parent to obtain health insurance for

24 1 or more children shall be considered the collection of
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1 support from the absent parent, without regard to the

2 means by which such support is provided.

3 ‘‘(B) The amount of support collected in any case in

4 which the State successfully enforces a provision of a sup5 port order requiring an absent parent to obtain health in6 surance for 1 or more children shall be the savings to the

7 State from the provision of such health insurance to such

8 children, as determined in accordance with a health insur9 ance savings methodology adopted by the State in accord10 ance with regulations prescribed by the Secretary.’’.

11 (2) REGULATIONS.—Within 6 months after the

12 date of the enactment of this Act, the Secretary of

13 Health and Human Services shall prescribe such

14 regulations as may be necessary to implement the

15 amendment made by paragraph (1).

16 (3) STUDY; REPORT.—

17 (A) STUDY.—The Secretary of Health and

18 Human Services shall conduct a study to deter19 mine the incentives that should be provided to

20 encourage States to enforce obligations of non21 custodial parents to pay (and obtain medical in22 surance coverage with respect to) the reason23 able and necessary health and dental expenses

24 of the children to whom the noncustodial par25 ents owe such obligations.
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1 (B) REPORT.—Not later than 12 months

2 after the date of the enactment of this Act, the

3 Secretary of Health and Human Services shall

4 submit to the Committee on Ways and Means

5 of the House of Representatives and the Com6 mittee on Finance of the Senate the results of

7 the study required by subparagraph (A).

8 SEC. 5. ANNUAL REPORTS ON STATE COMPLIANCE WITH

9 TIME LIMITS WITHIN WHICH STATE MUST

10 PROVIDE CERTAIN CHILD SUPPORT ASSIST11 ANCE.

12 Section 452(a)(10) of the Social Security Act (42

13 U.S.C. 652(a)(10)) is amended—

14 (1) in subparagraph (H), by striking ‘‘and’’;

15 (2) in subparagraph (I), by striking the period

16 and inserting ‘‘; and’’; and

17 (3) by inserting after subparagraph (I) the fol18 lowing:

19 ‘‘(J) compliance, by State, with the stand20 ards established pursuant to subsections (h)

21 and (i).’’.
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1 SEC. 6. WAGES WITHHELD BY EMPLOYERS TO PAY CHILD

2 SUPPORT OBLIGATIONS REQUIRED TO BE

3 PAID TO STATE WITHIN 10 DAYS; LATE PAY4 MENT PENALTY IMPOSED ON EMPLOYERS.

5 (a) IN GENERAL.—Section 466(b)(6)(A) of the Social

6 Security Act (42 U.S.C. 666(b)(6)(A)) is amended—

7 (1) in clause (i), by inserting ‘‘within 10 days

8 after the payment of such wages’’ before ‘‘to the ap9 propriate agency’’; and

10 (2) by adding at the end the following:

11 ‘‘(iii) The State must require any employer who

12 fails to make any payment required in accordance

13 with clause (i) within the 10-day period described

14 therein to pay the State a $1,000 penalty. The State

15 must expend all penalties collected in accordance

16 with this clause for the operation of the State plan

17 approved under section 454, not later than the end

18 of the calendar quarter following the calendar quar19 ter in which collected.’’.

20 (b) EFFECTIVE DATE.—

21 (1) IN GENERAL.—Except as provided in para22 graph (2) of this subsection, the amendments made

23 by subsection (a) of this section shall take effect on

24 the date of the enactment of this Act and apply to

25 wages paid on or after such date and payments

26 under part D of title IV of the Social Security Act
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1 for calendar quarters beginning on or after such

2 date.

3 (2) DELAY PERMITTED IF STATE LEGISLATION

4 REQUIRED.—In the case of a State plan approved

5 under section 454 of the Social Security Act which

6 the Secretary of Health and Human Services deter7 mines requires State legislation (other than legisla8 tion appropriating funds) in order for the plan to

9 meet the additional requirements imposed by the

10 amendments made by subsection (a) of this section,

11 the State plan shall not be regarded as failing to

12 comply with the requirements of such section 454

13 solely on the basis of the failure of the plan to meet

14 such additional requirements before the 1st day of

15 the 1st calendar quarter beginning after the close of

16 the 1st regular session of the State legislature that

17 begins after the date of the enactment of this Act.

18 For purposes of the previous sentence, in the case

19 of a State that has a 2-year legislative session, each

20 year of such session shall be deemed to be a sepa21 rate regular session of the State legislature.

22 SEC. 7. NATIONAL PARENT LOCATOR NETWORK.

23 Section 453 of the Social Security Act (42 U.S.C.

24 653) is amended by adding at the end the following:
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1 ‘‘(g) The Secretary shall expand the Parent Locator

2 Service to establish a national network based on the com3 prehensive statewide child support enforcement systems

4 developed by the States, to—

5 ‘‘(1) allow each State to—

6 ‘‘(A) locate any absent parent who owes

7 child support, for whom a child support obliga8 tion is being established, or for whom an order

9 for visitation is being enforced, by—

10 ‘‘(i) accessing the records of other

11 State agencies and sources of locate infor12 mation directly from one computer system

13 to another; and

14 ‘‘(ii) accessing Federal sources of lo15 cate information in the same fashion;

16 ‘‘(B) access the files of other States to de17 termine whether there are other child support

18 orders involving the same absent parent, and

19 obtain the details of any such order;

20 ‘‘(C) provide for both on-line and batch

21 processing of locate requests, with on-line ac22 cess restricted to cases in which the information

23 is needed immediately (for such reasons as

24 court appearances) and batch processing used
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1 to ‘troll’ data bases to locate individuals or up2 date information periodically; and

3 ‘‘(D) direct locate requests to individual

4 States or Federal agencies, broadcast requests

5 to selected States, or broadcast cases to all

6 States when there is no indication of the source

7 of needed information;

8 ‘‘(2) provide for a maximum of 48-hour turn9 around time for information to be broadcast and re10 turned to a requesting State; and

11 ‘‘(3) provide ready access to courts of the infor12 mation on the network by location of a computer

13 terminal in each court.’’.

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