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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2194 Introduced in Senate (IS)]

108th CONGRESS
  2d Session
                                S. 2194

 To amend part D of title IV of the Social Security Act to improve the 
          collection of child support, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 11, 2004

  Mr. Cornyn (for himself and Mr. Lieberman) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend part D of title IV of the Social Security Act 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 Improvement Act of 
2004''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of 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. Improved interstate enforcement.
                        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. Improving Federal debt collection practices.
Sec. 304. Maintenance of technical assistance funding.
Sec. 305. Maintenance of Federal parent locator service funding.
Sec. 306. Electronic disbursement of child support payments to 
                            families.
Sec. 307. Optional expansion of State disbursement unit to create a 
                            centralized payment location for all child 
                            support wage withholding.
Sec. 308. Implementation of medical support performance measure.
Sec. 309. Authority to continue State program for monitoring and 
                            enforcement of child support orders.
                        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 the Social 
                Security Act (42 U.S.C. 657(a)) is amended to read as 
                follows:
    ``(a) In General.--Subject to subsections (e) and (f), 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 454(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 have the payment considered a qualified State expenditure 
        for purposes of section 409(a)(7).
            ``(7) State option to pass through additional support with 
        federal financial participation.--
                    ``(A) Families that formerly received assistance.--
                Notwithstanding paragraph (2), 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 from the State to the 
                extent that the State pays the amount to the family.
                    ``(B) Families that currently receive assistance.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (1), in the case of a family that 
                        receives assistance from the State, 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 the Social Security 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 subsection (e) of section 101 of the 
        Child Support Improvement Act of 2004 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 the 
        Social Security 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 the Social Security 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) of the Social Security Act (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 support 
        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 the Social Security 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 clause (i) 
        or (ii) of 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 clause (i) or 
                                (ii) of 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, 2007, 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.--A State may 
        elect to have the amendments made by this section apply to the 
        State and to amounts collected by the State and to payments 
        under parts A and D of title IV of the Social Security Act, on 
        and after such date as the State may select that is after the 
        date of enactment of this Act and before October 1, 2007.

                     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. IMPROVED INTERSTATE ENFORCEMENT.

    (a) In General.--Section 466(f) (42 U.S.C. 666(f)) is amended--
            (1) by striking ``January 1, 1998'' and inserting ``January 
        1, 2005'';
            (2) by striking ``and as in effect on August 22, 1996,''; 
        and
            (3) by striking ``adopted as of such date'' and inserting 
        ``adopted as of August, 2001''.
    (b) Full Faith and Credit for Child Support Orders.--Section 1738B 
of title 28, United States Code, is amended--
            (1) by striking subsection (d) and inserting the following:
    ``(d) Continuing Exclusive Jurisdiction.--
            ``(1) In general.--Subject to paragraph (2), a court of a 
        State that has made a child support order consistent with this 
        section has continuing, exclusive jurisdiction to modify its 
        order if the order is the controlling order and--
                    ``(A) the State is the child's State or the 
                residence of any individual contestant; or
                    ``(B) if the State is not the residence of the 
                child or an individual contestant, the contestants 
                consent in a record or in open court that the court may 
                continue to exercise jurisdiction to modify its order.
            ``(2) Requirement.--A court may not exercise its 
        continuing, exclusive jurisdiction to modify the order if the 
        court of another State, acting in accordance with subsections 
        (e) and (f), has made a modification of the order.'';
            (2) in subsection (e)(2)--
                    (A) in subparagraph (A), by striking ``because'' 
                and all that follows through the semicolon and 
                inserting ``pursuant to paragraph (1) or (2) of 
                subsection (d);'' and
                    (B) in subparagraph (B), by inserting ``with 
                jurisdiction over at least 1 of the individual 
                contestants or that is located in the child's State'' 
                after ``another State'';
            (3) in subsection (f)--
                    (A) in the subsection heading, by striking 
                ``Recognition of Child Support Orders'' and inserting 
                ``Determination of Controlling Child Support Order'';
                    (B) in the matter preceding paragraph (1), by 
                striking ``shall apply'' and all that follows through 
                the colon and inserting ``having personal jurisdiction 
                over both individual contestants shall apply the 
                following rules and by order shall determine which 
                order controls:''
                    (C) in paragraph (1), by striking ``must be'' and 
                inserting ``controls and must be so'';
                    (D) in paragraph (2), by striking ``must be 
                recognized'' and inserting ``controls'';
                    (E) in paragraph (3), by striking ``must be 
                recognized'' each place it appears and inserting 
                ``controls'';
                    (F) in paragraph (4)--
                            (i) by striking ``may'' and inserting 
                        ``shall''; and
                            (ii) by striking ``must be recognized'' and 
                        inserting ``controls''; and
                    (G) by striking paragraph (5);
            (4) by striking subsection (g) and inserting the following:
    ``(g) Enforcement of Modified Orders.--If a child support order 
issued by a court of a State is modified by a court of another State 
which properly assumed jurisdiction, the issuing court--
            ``(1) may enforce its order that was modified only as to 
        arrears and interest accruing before the modification;
            ``(2) may provide appropriate relief for violations of its 
        order which occurred before the effective date of the 
        modification; and
            ``(3) shall recognize the modifying order of the other 
        State for the purpose of enforcement.'';
            (5) in subsection (h)--
                    (A) in paragraph (1), by striking ``and (3)'' and 
                inserting ``, (3), and (4)'';
                    (B) in paragraph (2), by inserting ``the 
                computation and payment of arrearages, and the accrual 
                of interest on the arrearages,'' after ``obligations of 
                support,''; and
                    (C) by adding at the end the following:
            ``(4) Prospective application.--After a court determines 
        which is the controlling order and issues an order 
        consolidating arrears, if any, a court shall prospectively 
        apply the law of the State issuing the controlling order, 
        including that State's law with respect to interest on arrears, 
        current and future support, and consolidated arrears.''; and
            (6) in subsection (i), by inserting ``and subsection (d)(2) 
        does not apply'' after ``issuing State''.

                        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 Finance of the Senate and the Committee on Ways and Means 
of the House of Representatives 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--
            (1) an estimate of the total amount of undistributed child 
        support;
            (2) an estimate of the average length of time it takes 
        undistributed child support to be identified and distributed; 
        and
            (3) recommendations--
                    (A) as to whether additional procedures, including 
                incentives, should be established at the Federal or 
                State level to--
                            (i) reduce the backlog of undistributed 
                        child support;
                            (ii) close cases in compliance with 
                        regulatory standards in which the custodial 
                        parent cannot be located;
                            (iii) expedite the payment of undistributed 
                        child support; and
                            (iv) establish measures to help manage the 
                        growth in the level of undistributed child 
                        support; and
                    (B) for measures to evaluate State performance with 
                respect to undistributed child support payments.

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

    (a) In General.--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).''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2001.

SEC. 303. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

    (a) In General.--Section 3716(h)(3) of title 31, United States 
Code, is amended to read as follows:
    ``(3) In applying this subsection with respect to any debt owed to 
a State, other than past due support being enforced by the State, 
subsection (c)(3)(A) shall not apply. Subsection (c)(3)(A) shall apply 
with respect to past due support being enforced by the State 
notwithstanding any other provision of law, including sections 207 and 
1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), 
section 413(b) of Public Law 91-173 (30 U.S.C. 923(b)), and section 14 
of the Act of August 29, 1935 (45 U.S.C. 231m).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2004.

SEC. 304. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

    Section 452(j) of the Social Security Act (42 U.S.C. 652(j)) is 
amended by inserting ``or the amount appropriated under this paragraph 
for fiscal year 2002, whichever is greater,'' before ``which shall be 
available''.

SEC. 305. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE FUNDING.

    Section 453(o) of the Social Security Act (42 U.S.C. 653(o)) is 
amended--
            (1) in the first sentence, by inserting ``or the amount 
        appropriated under this paragraph for fiscal year 2002, 
        whichever is greater'' before ``, which shall be available''; 
        and
            (2) in the second sentence, by striking ``for each of 
        fiscal years 1997 through 2001''.

SEC. 306. ELECTRONIC DISBURSEMENT OF CHILD SUPPORT PAYMENTS TO 
              FAMILIES.

    Section 454A(g) of the Social Security Act (42 U.S.C. 654a(g)) is 
amended by inserting at the end the following:
            ``(3) Electronic disbursement requirement.--
                    ``(A) In general.--Not later than October 1, 2008, 
                each State disbursement unit operated under section 
                454B shall implement a system to electronically 
                disburse, through direct deposit or a widely accessible 
                card-based system, all child support collections 
                disbursed to families under that section.
                    ``(B) State option to require card-based payment.--
                A State may require a payment recipient to accept 
                payment through a card-based system if the recipient 
                has declined to accept payment by direct deposit or 
                does not have an account to which payment may be made 
                by direct deposit.
                    ``(C) Opt-out.--Notwithstanding subparagraph (A), a 
                State disbursement unit may maintain a nonelectronic 
                system for disbursing child support collections to 
                custodial parents under section 454B after October 1, 
                2008, if the State notifies the Secretary in writing by 
                October 1, 2008, that the State intends to maintain 
                such a system.''.

SEC. 307. OPTIONAL EXPANSION OF STATE DISBURSEMENT UNIT TO CREATE A 
              CENTRALIZED PAYMENT LOCATION FOR ALL CHILD SUPPORT WAGE 
              WITHHOLDING.

    Section 454B(a)(1)(B) of the Social Security Act (42 U.S.C. 
654b(a)(1)(B)) is amended by inserting ``or, at State option, all 
support orders, regardless of date issued,'' after ``in which the 
support order is initially issued in the State on or after January 1, 
1994,''.

SEC. 308. IMPLEMENTATION OF MEDICAL SUPPORT PERFORMANCE MEASURE.

    (a) Deadline for Implementation of Performance Measure.--
            (1) In general.--Subject to paragraphs (2) and (3), the 
        Secretary of Health and Human Services (in this section 
        referred to as the ``Secretary'') shall prescribe regulations 
        to implement the performance measure developed under section 
        201(d)(2)(A) of the Child Support Performance and Incentive Act 
        of 1998 (Public Law 105-200; 112 Stat. 657).
            (2) Requirements.--In prescribing such regulations, the 
        Secretary shall ensure that the performance measure described 
        in paragraph (1) is implemented in such a manner that the 
        measure--
                    (A) is based on reliable and accurate data;
                    (B) ensures the discretion of States, in 
                establishing and enforcing medical support obligations, 
                to consider the forms of public and private health care 
                coverage most appropriate to each individual case; and
                    (C) encourages continual improvement in the 
                effectiveness of States in establishing and enforcing 
                such obligations.
            (3) Deadlines.--
                    (A) Regulations.--The regulations required to be 
                prescribed under paragraph (1) shall take effect not 
                later than 3 years after the date of enactment of this 
                Act.
                    (B) Incorporation into incentive payment system.--
                Not later than 2 years after the date that is the 
                earlier of--
                            (i) the date the regulations required to be 
                        prescribed under paragraph (1) take effect; or
                            (ii) the date that is 3 years after the 
                        date of enactment of this Act,
                the Secretary shall, in a revenue neutral manner, 
                incorporate the regulations required to be prescribed 
                under paragraph (1) into the incentive payment system 
                established by section 458 of the Social Security Act 
                (42 U.S.C. 658a).
    (b) Interim Funding.--
            (1) Increased federal share of expenditures.--During the 
        period described in paragraph (2), the Secretary, 
        notwithstanding section 455(a)(1) of the Social Security Act 
        (42 U.S.C. 655(a)(1)), shall pay to each State for each quarter 
        an amount equal to 90 percent of the total amount expended 
        during the quarter that is attributable to the following:
                    (A) Expenditures for such modification of the 
                statewide automated system as is necessary to 
                facilitate establishing and enforcement of medical 
                support obligations under part D of title IV of the 
                Social Security Act (42 U.S.C. 651 et seq.).
                    (B) Expenditures for the issuance of the National 
                Medical Support Notice on behalf of a child described 
                in section 454(4) and the processing of information 
                received as a result of the issuance of such notice.
                    (C) Expenditures for services to identify potential 
                health care coverage for a child described in section 
                454(4) and to enroll such a child in health care 
                coverage through the issuance of a National Medical 
                Support Notice.
            (2) Period described.--For purposes of paragraph (1), the 
        period described in this paragraph is the period that--
                    (A) begins on the first day of the first quarter 
                that begins at least 1 month after the date of 
                enactment of this Act; and
                    (B) ends on the last day of the first quarter that 
                begins at least 1 year after the date on which the 
                Secretary certifies through a posting to an Internet 
                website, that the regulations required to be prescribed 
                under subsection (a)(1) is incorporated, in accordance 
                with subsection (a)(3)(B), into the incentive payment 
                system established by section 458 of the Social 
                Security Act (42 U.S.C. 658a).

SEC. 309. AUTHORITY TO CONTINUE STATE PROGRAM FOR MONITORING AND 
              ENFORCEMENT OF CHILD SUPPORT ORDERS.

    The Secretary of Health and Human Services shall not require the 
State of Texas, in operating the program established under part D of 
title IV of the Social Security Act, to apply for a waiver from the 
requirements of section 454(4)(A)(ii) of such Act (42 U.S.C. 
654(4)(A)(ii)) to continue to operate the State's program for 
monitoring and enforcement of a court order without the necessity of a 
written application, as in effect on the date of enactment of this Act. 
Such State may continue to operate such program and expand it to 
additional counties, as the State determines necessary, without the 
necessity of applying for a waiver from the Secretary so long as an 
individual to whom the support is owed and who would otherwise have to 
sign a written application for services under such program has an 
opportunity to decline such services.

                        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, 2004, 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.
    (b) Delay Permitted if State Legislation Required.--In the case of 
a State plan approved under section 454 of the Social Security Act (42 
U.S.C. 654) which requires State legislation (other than legislation 
appropriating funds) in order for the plan to meet the additional 
requirements imposed by this Act or 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 the enactment of 
this Act. For purposes of the preceding sentence, in the case of a 
State that has a 2-year legislative session, each year of the session 
shall be considered to be a separate regular session of the State 
legislature.
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