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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3362 Introduced in House (IH)]

  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.

    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 Enforcement 
Improvements Act of 1996''.

SEC. 2. NONLIABILITY FOR DEPOSITORY INSTITUTIONS PROVIDING FINANCIAL 
              RECORDS TO STATE CHILD SUPPORT ENFORCEMENT AGENCIES IN 
              CHILD SUPPORT CASES.

    (a) In General.--Notwithstanding any other provision of Federal or 
State law, a depository institution shall not be liable under any 
Federal or State law to any person for disclosing any financial record 
of an individual to a State child support enforcement agency attempting 
to establish, modify, or enforce a child support obligation of such 
individual.
    (b) Prohibition of Disclosure of Financial Record Obtained by State 
Child Support Enforcement Agency.--A State child support enforcement 
agency which obtains a financial record of an individual from a 
depository institution pursuant to subsection (a) may disclose such 
financial record only for the purpose of, and to the extent necessary 
in, establishing, modifying, or enforcing a child support obligation of 
such individual.
    (c) Civil Damages for Unauthorized Disclosure.--
            (1) Disclosure by state officer or employee.--If any 
        officer or employee of a State knowingly, or by reason of 
        negligence, discloses a financial record of an individual in 
        violation of subsection (b), such individual may bring a civil 
        action for damages against such State in a district court of 
        the United States.
            (2) No liability for good faith but erroneous 
        interpretation.--No liability shall arise under this subsection 
        with respect to any disclosure which results from a good faith, 
        but erroneous, interpretation of subsection (b).
            (3) Damages.--In any action brought under paragraph (1), 
        upon a finding of liability on the part of the defendant, the 
        defendant shall be liable to the plaintiff in an amount equal 
        to the sum of--
                    (A) the greater of--
                            (i) $1,000 for each act of unauthorized 
                        disclosure of a financial record with respect 
                        to which such defendant is found liable; or
                            (ii) the sum of--
                                    (I) the actual damages sustained by 
                                the plaintiff as a result of such 
                                unauthorized disclosure; plus
                                    (II) in the case of a willful 
                                disclosure or a disclosure which is the 
                                result of gross negligence, punitive 
                                damages; plus
                    (B) the costs of the action.
    (d) Definitions.--For purposes of this section:
            (1) The term ``depository institution'' means--
                    (A) a depository institution, as defined by section 
                3(c) of the Federal Deposit Insurance Act;
                    (B) an institution-affiliated party, as defined by 
                section 3(u) of such Act; and
                    (C) any Federal credit union or State credit union, 
                as defined by section 101 of the Federal Credit Union 
                Act, including an institution-affiliated party of such 
                a credit union, as defined by section 206(r) of such 
                Act.
            (2) The term ``financial record'' has the meaning given 
        such term by section 1101(2) of the Right to Financial Privacy 
        Act of 1978.
            (3) The term ``State child support enforcement agency'' 
        means a State agency which administers a State program for 
        establishing and enforcing child support obligations.

SEC. 3. ACCESS TO AND USE OF CONSUMER REPORTS BY STATE CHILD SUPPORT 
              ENFORCEMENT AGENCIES IN CHILD SUPPORT CASES.

    (a) In General.--Section 604 of the Fair Credit Reporting Act (15 
U.S.C. 1681b) is amended by adding at the end the following:
    ``(4) To a State child support enforcement agency that is seeking 
to establish, modify, or enforce a child support obligation against the 
consumer, if--
            ``(A) the paternity of the consumer for the child to which 
        the obligation relates has been established or acknowledged by 
        the consumer in accordance with State laws under which the 
        obligation arises (if required by those laws); and
            ``(B) the State child support enforcement agency--
                    ``(i) before obtaining the consumer report, 
                provides written notice to the consumer that the State 
                agency intends to obtain a consumer report on the 
                consumer; and
                    ``(ii) certifies to the consumer reporting agency 
                that--
                            ``(I) the requirement in subparagraph (A) 
                        has been fulfilled (if applicable); and
                            ``(II) the notice required by clause (i) 
                        has been provided.''.
    (b) State Child Support Enforcement Agency Defined.--Section 603 of 
such Act (15 U.S.C. 1681a) is amended by adding at the end the 
following new subsection:
    ``(k) The term `State child support enforcement agency' means a 
State agency which administers a State program for establishing and 
enforcing child support obligations.''.

SEC. 4. HEALTH CARE SUPPORT.

    (a) Inclusion in Child Support Orders.--
            (1) In general.--Section 466(a) of the Social Security Act 
        (42 U.S.C. 666(a)) is amended by inserting after paragraph (11) 
        the following:
            ``(12) Not later than the beginning of the 9th calendar 
        month that begins after the date the Secretary prescribes final 
        regulations as provided for in section 467(d)(2):
                    ``(A) Procedures which require any child support 
                order, issued or modified by a court or administrative 
                agency of the State on or after the effective date of 
                guidelines established by the State under section 
                467(d), to provide for coverage of the health care 
                costs of the child in accordance with such guidelines.
                    ``(B) Procedures which require the expedited 
                consideration and disposition of any allegation of 
                noncompliance with an obligation to cover the health 
                care costs of a child imposed under a child support 
                order issued or modified in the State.''.
            (2) State guidelines.--Section 467 of such Act (42 U.S.C. 
        667) is amended by adding at the end the following:
    ``(d)(1) Not later than the beginning of the 9th calendar month 
that begins after the date the Secretary prescribes final regulations 
in accordance with paragraph (2), each State, as a condition for having 
its State plan approved under this part, must establish guidelines for 
the coverage of the health care costs of children pursuant to child 
support orders issued or modified in the State, which guidelines shall 
create a streamlined process that meets the minimum standards 
established by the Secretary in such regulations.
    ``(2)(A) The Secretary shall promulgate regulations which set forth 
minimum standards that any set of guidelines established pursuant to 
paragraph (1) must meet in providing for the coverage of the health 
care costs of children pursuant to child support orders issued or 
modified in the State, including--
            ``(i) the contents of such an order with respect to the 
        coverage of such costs;
            ``(ii) the distribution of responsibility for such costs;
            ``(iii) to the extent that such costs are to be covered 
        through health insurance--
                    ``(I) the provision of such insurance;
                    ``(II) the payment of insurance claims; and
                    ``(III) the rights of the noncustodial parent and 
                the custodial parent to insurance information;
            ``(iv) the circumstances under which a provider of health 
        insurance may or may not deny coverage to a child who is the 
        subject of such an order;
            ``(v) penalties to be imposed on providers of health 
        insurance who fail to comply with the guidelines; and
            ``(vi) how changes in the circumstances of the noncustodial 
        parent and the custodial parent are to be taken into account 
        with respect to the coverage of such costs.
    ``(B) In developing such standards, the Secretary shall ensure 
that, in establishing guidelines pursuant to paragraph (1), the State 
considers the following matters in the following order of importance:
            ``(i) The best interests of the child.
            ``(ii) The financial and other circumstances of the parents 
        of the child.
            ``(iii) Cost-effectiveness.
    ``(3) The preceding subsections of this section shall apply in like 
manner to the guidelines established pursuant to this subsection.''.
            (3) Regulations.--
                    (A) Proposed regulations.--Within 9 months after 
                the date of the enactment of this Act, the Secretary of 
                Health and Human Services shall issue proposed 
                regulations to implement the amendments made by this 
                subsection.
                    (B) Final regulations.--Within 14 months after the 
                date of the enactment of this Act, the Secretary of 
                Health and Human Services shall issue final regulations 
                to implement the amendments made by this subsection.
    (b) Inclusion in Incentive Payments Program of Dependent Health 
Insurance Provided Due to Successful Enforcement.--
            (1) In general.--Section 458(b) of the Social Security Act 
        (42 U.S.C. 658(b)) is amended by adding at the end the 
        following:
    ``(5)(A) For purposes of this section, the successful enforcement 
by the State of a provision of a support order requiring an absent 
parent to obtain health insurance for 1 or more children shall be 
considered the collection of support from the absent parent, without 
regard to the means by which such support is provided.
    ``(B) The amount of support collected in any case in which the 
State successfully enforces a provision of a support order requiring an 
absent parent to obtain health insurance for 1 or more children shall 
be the savings to the State from the provision of such health insurance 
to such children, as determined in accordance with a health insurance 
savings methodology adopted by the State in accordance with regulations 
prescribed by the Secretary.''.
            (2) Regulations.--Within 6 months after the date of the 
        enactment of this Act, the Secretary of Health and Human 
        Services shall prescribe such regulations as may be necessary 
        to implement the amendment made by paragraph (1).
            (3) Study; report.--
                    (A) Study.--The Secretary of Health and Human 
                Services shall conduct a study to determine the 
                incentives that should be provided to encourage States 
                to enforce obligations of noncustodial parents to pay 
                (and obtain medical insurance coverage with respect to) 
                the reasonable and necessary health and dental expenses 
                of the children to whom the noncustodial parents owe 
                such obligations.
                    (B) Report.--Not later than 12 months after the 
                date of the 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 the results of 
                the study required by subparagraph (A).

SEC. 5. ANNUAL REPORTS ON STATE COMPLIANCE WITH TIME LIMITS WITHIN 
              WHICH STATE MUST PROVIDE CERTAIN CHILD SUPPORT 
              ASSISTANCE.

    Section 452(a)(10) of the Social Security Act (42 U.S.C. 
652(a)(10)) is amended--
            (1) in subparagraph (H), by striking ``and'';
            (2) in subparagraph (I), by striking the period and 
        inserting ``; and''; and
            (3) by inserting after subparagraph (I) the following:
                    ``(J) compliance, by State, with the standards 
                established pursuant to subsections (h) and (i).''.

SEC. 6. WAGES WITHHELD BY EMPLOYERS TO PAY CHILD SUPPORT OBLIGATIONS 
              REQUIRED TO BE PAID TO STATE WITHIN 10 DAYS; LATE PAYMENT 
              PENALTY IMPOSED ON EMPLOYERS.

    (a) In General.--Section 466(b)(6)(A) of the Social Security Act 
(42 U.S.C. 666(b)(6)(A)) is amended--
            (1) in clause (i), by inserting ``within 10 days after the 
        payment of such wages'' before ``to the appropriate agency''; 
        and
            (2) by adding at the end the following:
            ``(iii) The State must require any employer who fails to 
        make any payment required in accordance with clause (i) within 
        the 10-day period described therein to pay the State a $1,000 
        penalty. The State must expend all penalties collected in 
        accordance with this clause for the operation of the State plan 
        approved under section 454, not later than the end of the 
        calendar quarter following the calendar quarter in which 
        collected.''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2) of 
        this subsection, the amendments made by subsection (a) of this 
        section shall take effect on the date of the enactment of this 
        Act and apply to wages paid on or after such date and payments 
        under part D of title IV of the Social Security Act for 
        calendar quarters beginning on or after such date.
            (2) Delay permitted if state legislation required.--In the 
        case of a State plan approved under section 454 of the Social 
        Security Act which the Secretary of Health and Human Services 
        determines requires State legislation (other than legislation 
        appropriating funds) in order for the plan to meet the 
        additional requirements imposed by the amendments made by 
        subsection (a) of this section, the State plan shall not be 
        regarded as failing to comply with the requirements of such 
        section 454 solely on the basis of the failure of the plan to 
        meet such additional requirements before the 1st day of the 1st 
        calendar quarter beginning after the close of the 1st regular 
        session of the State legislature that begins after the date of 
        the 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.

SEC. 7. NATIONAL PARENT LOCATOR NETWORK.

    Section 453 of the Social Security Act (42 U.S.C. 653) is amended 
by adding at the end the following:
    ``(g) The Secretary shall expand the Parent Locator Service to 
establish a national network based on the comprehensive statewide child 
support enforcement systems developed by the States, to--
            ``(1) allow each State to--
                    ``(A) locate any absent parent who owes child 
                support, for whom a child support obligation is being 
                established, or for whom an order for visitation is 
                being enforced, by--
                            ``(i) accessing the records of other State 
                        agencies and sources of locate information 
                        directly from one computer system to another; 
                        and
                            ``(ii) accessing Federal sources of locate 
                        information in the same fashion;
                    ``(B) access the files of other States to determine 
                whether there are other child support orders involving 
                the same absent parent, and obtain the details of any 
                such order;
                    ``(C) provide for both on-line and batch processing 
                of locate requests, with on-line access restricted to 
                cases in which the information is needed immediately 
                (for such reasons as court appearances) and batch 
                processing used to `troll' data bases to locate 
                individuals or update information periodically; and
                    ``(D) direct locate requests to individual States 
                or Federal agencies, broadcast requests to selected 
                States, or broadcast cases to all States when there is 
                no indication of the source of needed information;
            ``(2) provide for a maximum of 48-hour turnaround time for 
        information to be broadcast and returned to a requesting State; 
        and
            ``(3) provide ready access to courts of the information on 
        the network by location of a computer terminal in each 
        court.''.
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