In the Senate of the United States,
April 2, 1998.
Resolved, That the bill from the House of Representa-
tives (H.R. 3130) entitled ‘‘An Act to provide for an alter-
native penalty procedure for States that fail to meet Federal
child support data processing requirements, to reform Fed-
eral incentive payments for effective child support perform-
ance, to provide for a more flexible penalty procedure for
States that violate interjurisdictional adoption requirements,
to amend the Immigration and Nationality Act to make cer-
tain aliens determined to be delinquent in the payment of
child support inadmissible and ineligible for naturalization,
and for other purposes.’’, do pass with the following
AMENDMENTS:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Child Support Perform-
ance and Incentive Act of 1998’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
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Sec. 2. Table of contents.
TITLE I—CHILD SUPPORT DATA PROCESSING REQUIREMENTS
Sec. 101. Alternative penalty procedure.
Sec. 102. Authority to waive single statewide automated data processing and in-
formation retrieval system requirement.
TITLE II—CHILD SUPPORT INCENTIVE SYSTEM
Sec. 201. Incentive payments to States.
TITLE III—ADOPTION PROVISIONS
Sec. 301. More flexible penalty procedure to be applied for failing to permit inter-
jurisdictional adoption.
TITLE IV—MISCELLANEOUS
Sec. 401. Elimination of barriers to the effective establishment and enforcement
of medical child support.
Sec. 402. Safeguard of new employee information.
Sec. 403. Conforming amendments regarding the collection and use of social secu-
rity numbers for purposes of child support enforcement.
Sec. 404. Elimination of definition regarding high-volume automated administra-
tive enforcement of child support.
Sec. 405. General accounting office reports.
Sec. 406. Technical corrections.
TITLE I—CHILD SUPPORT DATA
PROCESSING REQUIREMENTS
SEC. 101. ALTERNATIVE PENALTY PROCEDURE.
(a) IN GENERAL.—Section 455(a) of the Social Secu-
rity Act (42 U.S.C. 655(a)) is amended by adding at the
end the following:
‘‘(4)(A)(i) If—
‘‘(I) the Secretary determines that a State plan
under section 454 would (in the absence of this para-
graph) be disapproved for the failure of the State to
comply with section 454(24)(A), and that the State
has made and is continuing to make a good faith ef-
fort to so comply; and
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‘‘(II) the State has submitted to the Secretary a
corrective compliance plan that describes how, by
when, and at what cost the State will achieve such
compliance, which has been approved by the Sec-
retary,
then the Secretary shall not disapprove the State plan
under section 454, and the Secretary shall reduce the
amount otherwise payable to the State under paragraph
(1)(A) of this subsection for the fiscal year by the penalty
amount.
‘‘(ii) The Secretary may only impose a single reduc-
tion of the amount otherwise payable to the State under
paragraph (1)(A) of this subsection for a fiscal year for the
failure of the State to comply during such fiscal year with
section 454(24)(A) or with any other provision of this part
that imposes a requirement with respect to the establish-
ment or operation of an automated data processing and in-
formation retrieval system.
‘‘(B) In this paragraph:
‘‘(i) The term ‘penalty amount’ means, with re-
spect to a failure of a State to comply with section
454(24)—
‘‘(I) 4 percent of the penalty base, in the
case of the 1st fiscal year in which such a failure
by the State occurs;
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‘‘(II) 8 percent of the penalty base, in the
case of the 2nd such fiscal year;
‘‘(III) 16 percent of the penalty base, in the
case of the 3rd such fiscal year; or
‘‘(IV) 30 percent of the penalty base, in the
case of the 4th or any subsequent such fiscal
year.
‘‘(ii) The term ‘penalty base’ means, with respect
to a failure of a State to comply with section 454(24)
during a fiscal year, the amount otherwise payable to
the State under paragraph (1)(A) of this subsection
for the preceding fiscal year.
‘‘(C)(i) The Secretary shall waive a penalty under this
paragraph for any failure of a State to comply with section
454(24)(A) during a fiscal year if—
‘‘(I) at any time during the fiscal year, the State
has submitted to the Secretary a request that the Sec-
retary certify the State as having met the require-
ments of such section;
‘‘(II) the Secretary subsequently provides the cer-
tification (regardless of whether the certification is
provided in that fiscal year) as a result of a timely
review conducted pursuant to the request; and
‘‘(III) the State has not failed such a review.
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‘‘(D) The preceding provisions of this paragraph (ex-
cept for subparagraph (C)(i)) shall apply, separately and
independently, to a failure to comply with section
454(24)(B) in the same manner in which the preceding pro-
visions apply to a failure to comply with section
454(24)(A).’’.
(b) INAPPLICABILITY OF PENALTY UNDER TANF PRO-
GRAM.—Section 409(a)(8)(A)(i)(III) of such Act (42 U.S.C.
609(a)(8)(A)(i)(III)) is amended by inserting ‘‘(other than
section 454(24))’’ before the semicolon.
SEC. 102. AUTHORITY TO WAIVE SINGLE STATEWIDE AUTO-
MATED DATA PROCESSING AND INFORMA-
TION RETRIEVAL SYSTEM REQUIREMENT.
(a) IN GENERAL.—Section 452(d)(3) of the Social Se-
curity Act (42 U.S.C. 652(d)(3)) is amended to read as fol-
lows:
‘‘(3) The Secretary may waive any requirement of
paragraph (1) or any condition specified under section
454(16), and shall waive the single statewide system re-
quirement under sections 454(16) and 454A, with respect
to a State if—
‘‘(A) the State demonstrates to the satisfaction of
the Secretary that the State has or can develop an al-
ternative system or systems that enable the State—
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‘‘(i) for purposes of section 409(a)(8), to
achieve the paternity establishment percentages
(as defined in section 452(g)(2)) and other per-
formance measures that may be established by
the Secretary;
‘‘(ii) 
to 
submit 
data 
under 
section
454(15)(B) that is complete and reliable;
‘‘(iii) to substantially comply with the re-
quirements of this part; and
‘‘(iv) in the case of a request to waive the
single statewide system requirement, to—
‘‘(I) meet all functional requirements
of sections 454(16) and 454A;
‘‘(II) ensure that calculation of dis-
tributions meets the requirements of section
457 and accounts for distributions to chil-
dren in different families or in different
States or sub-State jurisdictions, and for
distributions to other States;
‘‘(III) ensure that there is only 1 point
of contact in the State which provides seam-
less case processing for all interstate case
processing 
and 
coordinated, 
automated
intrastate case management;
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‘‘(IV) ensure that standardized data
elements, forms, and definitions are used
throughout the State;
‘‘(V) complete the alternative system in
no more time than it would take to complete
a single statewide system that meets such
requirement; and
‘‘(VI) process child support cases as
quickly, efficiently, and effectively as such
cases would be processed through a single
statewide system that meets such require-
ment;
‘‘(B)(i) the waiver meets the criteria of para-
graphs (1), (2), and (3) of section 1115(c); or
‘‘(ii) the State provides assurances to the Sec-
retary that steps will be taken to otherwise improve
the State’s child support enforcement program; and
‘‘(C) in the case of a request to waive the single
statewide system requirement, the State has submitted
to the Secretary separate estimates of the total cost of
a single statewide system that meets such require-
ment, and of any such alternative system or systems,
which shall include estimates of the cost of developing
and completing the system and of operating and
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maintaining the system for 5 years, and the Secretary
has agreed with the estimates.’’.
(b) PAYMENTS TO STATES.—Section 455(a)(1) of such
Act (42 U.S.C. 655(a)(1)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (B);
(2) by striking the semicolon at the end of sub-
paragraph (C) and inserting ‘‘, and’’; and
(3) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) equal to 66 percent of the sums expended
by the State during the quarter for an alternative
statewide system for which a waiver has been granted
under section 452(d)(3), but only to the extent that
the total of the sums so expended by the State on or
after the date of the enactment of this subparagraph
does not exceed the least total cost estimate submitted
by the State pursuant to section 452(d)(3)(C) in the
request for the waiver;’’.
TITLE II—CHILD SUPPORT
INCENTIVE SYSTEM
SEC. 201. INCENTIVE PAYMENTS TO STATES.
(a) IN GENERAL.—Part D of title IV of the Social Se-
curity Act (42 U.S.C. 651–669) is amended by inserting
after section 458 the following:
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‘‘SEC. 458A. INCENTIVE PAYMENTS TO STATES.
‘‘(a) IN GENERAL.—In addition to any other payment
under this part, the Secretary shall, subject to subsection
(f), make an incentive payment to each State for each fiscal
year in an amount determined under subsection (b).
‘‘(b) AMOUNT OF INCENTIVE PAYMENT.—
‘‘(1) IN GENERAL.—The incentive payment for a
State for a fiscal year is equal to the incentive pay-
ment pool for the fiscal year, multiplied by the State
incentive payment share for the fiscal year.
‘‘(2) INCENTIVE PAYMENT POOL.—
‘‘(A) IN GENERAL.—In paragraph (1), the
term ‘incentive payment pool’ means—
‘‘(i) $422,000,000 for fiscal year 2000;
‘‘(ii) $429,000,000 for fiscal year 2001;
‘‘(iii) $450,000,000 for fiscal year
2002;
‘‘(iv) $461,000,000 for fiscal year 2003;
‘‘(v) $454,000,000 for fiscal year 2004;
‘‘(vi) $446,000,000 for fiscal year 2005;
‘‘(vii) $458,000,000 for fiscal year
2006;
‘‘(viii) $471,000,000 for fiscal year
2007;
‘‘(ix) $483,000,000 for fiscal year
2008; and
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‘‘(x) for any succeeding fiscal year, the
amount of the incentive payment pool for
the fiscal year that precedes such succeeding
fiscal year, multiplied by the percentage (if
any) by which the CPI for such preceding
fiscal year exceeds the CPI for the 2nd pre-
ceding fiscal year.
‘‘(B) CPI.—For purposes of subparagraph
(A), the CPI for a fiscal year is the average of
the Consumer Price Index for the 12-month pe-
riod ending on September 30 of the fiscal year.
As used in the preceding sentence, the term ‘Con-
sumer Price Index’ means the last Consumer
Price Index for all-urban consumers published by
the Department of Labor.
‘‘(3) STATE
INCENTIVE
PAYMENT
SHARE.—In
paragraph (1), the term ‘State incentive payment
share’ means, with respect to a fiscal year—
‘‘(A) the incentive base amount for the State
for the fiscal year; divided by
‘‘(B) the sum of the incentive base amounts
for all of the States for the fiscal year.
‘‘(4) INCENTIVE BASE AMOUNT.—In paragraph
(3), the term ‘incentive base amount’ means, with re-
spect to a State and a fiscal year, the sum of the ap-
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plicable percentages (determined in accordance with
paragraph (6)) multiplied by the corresponding maxi-
mum incentive base amounts for the State for the fis-
cal year, with respect to each of the following meas-
ures of State performance for the fiscal year:
‘‘(A) The paternity establishment perform-
ance level.
‘‘(B) The support order performance level.
‘‘(C) The current payment performance
level.
‘‘(D) The arrearage payment performance
level.
‘‘(E) 
The 
cost-effectiveness 
performance
level.
‘‘(5) MAXIMUM INCENTIVE BASE AMOUNT.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (4), the maximum incentive base amount
for a State for a fiscal year is—
‘‘(i) with respect to the performance
measures described in subparagraphs (A),
(B), and (C) of paragraph (4), the State
collections base for the fiscal year; and
‘‘(ii) with respect to the performance
measures described in subparagraphs (D)
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and (E) of paragraph (4), 75 percent of the
State collections base for the fiscal year.
‘‘(B) DATA
REQUIRED
TO
BE
COMPLETE
AND RELIABLE.—Notwithstanding subparagraph
(A), the maximum incentive base amount for a
State for a fiscal year with respect to a perform-
ance measure described in paragraph (4) is zero,
unless the Secretary determines, on the basis of
an 
audit 
performed 
under 
section
452(a)(4)(C)(i), that the data which the State
submitted pursuant to section 454(15)(B) for the
fiscal year and which is used to determine the
performance level involved is complete and reli-
able.
‘‘(C) STATE COLLECTIONS BASE.—For pur-
poses of subparagraph (A), the State collections
base for a fiscal year is equal to the sum of—
‘‘(i) 2 times the sum of—
‘‘(I) the total amount of support
collected during the fiscal year under
the State plan approved under this
part in cases in which the support ob-
ligation involved is required to be as-
signed to the State pursuant to part A
or E of this title or title XIX; and
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‘‘(II) the total amount of support
collected during the fiscal year under
the State plan approved under this
part in cases in which the support ob-
ligation involved was so assigned but,
at the time of collection, is not required
to be so assigned; and
‘‘(ii) the total amount of support col-
lected during the fiscal year under the State
plan approved under this part in all other
cases.
‘‘(6) DETERMINATION OF APPLICABLE PERCENT-
AGES BASED ON PERFORMANCE LEVELS.—
‘‘(A) PATERNITY ESTABLISHMENT.—
‘‘(i) DETERMINATION
OF
PATERNITY
ESTABLISHMENT
PERFORMANCE
LEVEL.—
The paternity establishment performance
level for a State for a fiscal year is, at the
option of the State, the IV–D paternity es-
tablishment percentage determined under
section 452(g)(2)(A) or the statewide pater-
nity establishment percentage determined
under section 452(g)(2)(B).
‘‘(ii) DETERMINATION OF APPLICABLE
PERCENTAGE.—The applicable percentage
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with respect to a State’s paternity establish-
ment performance level is as follows:
‘‘If the paternity establishment per-
formance level is:
The applica-
ble percentage
is:
At least:
But less than:
80% ........................
.................................
100
79% ........................
80% ........................
78% ........................
79% ........................
77% ........................
78% ........................
76% ........................
77% ........................
75% ........................
76% ........................
74% ........................
75% ........................
73% ........................
74% ........................
72% ........................
73% ........................
71% ........................
72% ........................
70% ........................
71% ........................
69% ........................
70% ........................
68% ........................
69% ........................
67% ........................
68% ........................
66% ........................
67% ........................
65% ........................
66% ........................
64% ........................
65% ........................
63% ........................
64% ........................
62% ........................
63% ........................
61% ........................
62% ........................
60% ........................
61% ........................
59% ........................
60% ........................
58% ........................
59% ........................
57% ........................
58% ........................
56% ........................
57% ........................
55% ........................
56% ........................
54% ........................
55% ........................
53% ........................
54% ........................
52% ........................
53% ........................
51% ........................
52% ........................
50% ........................
51% ........................
0% ..........................
50% ........................
0.
Notwithstanding the preceding sentence, if
the paternity establishment performance
level of a State for a fiscal year is less than
50 percent but exceeds by at least 10 per-
centage points the paternity establishment
performance level of the State for the imme-
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diately preceding fiscal year, then the ap-
plicable percentage with respect to the
State’s paternity establishment performance
level is 50 percent.
‘‘(B) ESTABLISHMENT OF CHILD SUPPORT
ORDERS.—
‘‘(i) 
DETERMINATION
OF
SUPPORT
ORDER PERFORMANCE LEVEL.—The support
order performance level for a State for a fis-
cal year is the percentage of the total num-
ber of cases under the State plan approved
under this part in which there is a support
order during the fiscal year.
‘‘(ii) DETERMINATION OF APPLICABLE
PERCENTAGE.—The applicable percentage
with respect to a State’s support order per-
formance level is as follows:
‘‘If the support order performance
level is:
The applica-
ble percentage
is:
At least:
But less than:
80% .........................
..................................
100
79% .........................
80% .........................
78% .........................
79% .........................
77% .........................
78% .........................
76% .........................
77% .........................
75% .........................
76% .........................
74% .........................
75% .........................
73% .........................
74% .........................
72% .........................
73% .........................
71% .........................
72% .........................
70% .........................
71% .........................
69% .........................
70% .........................
68% .........................
69% .........................
67% .........................
68% .........................
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‘‘If the support order performance
level is:
The applica-
ble percentage
is:
At least:
But less than:
66% .........................
67% .........................
65% .........................
66% .........................
64% .........................
65% .........................
63% .........................
64% .........................
62% .........................
63% .........................
61% .........................
62% .........................
60% .........................
61% .........................
59% .........................
60% .........................
58% .........................
59% .........................
57% .........................
58% .........................
56% .........................
57% .........................
55% .........................
56% .........................
54% .........................
55% .........................
53% .........................
54% .........................
52% .........................
53% .........................
51% .........................
52% .........................
50% .........................
51% .........................
0% ...........................
50% .........................
0.
Notwithstanding the preceding sentence, if
the support order performance level of a
State for a fiscal year is less than 50 per-
cent but exceeds by at least 5 percentage
points the support order performance level
of the State for the immediately preceding
fiscal year, then the applicable percentage
with respect to the State’s support order
performance level is 50 percent.
‘‘(C) COLLECTIONS
ON
CURRENT
CHILD
SUPPORT DUE.—
‘‘(i) DETERMINATION
OF
CURRENT
PAYMENT PERFORMANCE LEVEL.—The cur-
rent payment performance level for a State
for a fiscal year is equal to the total
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amount of current support collected during
the fiscal year under the State plan ap-
proved under this part divided by the total
amount of current support owed during the
fiscal year in all cases under the State plan,
expressed as a percentage.
‘‘(ii) DETERMINATION OF APPLICABLE
PERCENTAGE.—The applicable percentage
with respect to a State’s current payment
performance level is as follows:
‘‘If the current payment performance
level is:
The applica-
ble percentage
is:
At least:
But less than:
80% .........................
..................................
100
79% .........................
80% .........................
78% .........................
79% .........................
77% .........................
78% .........................
76% .........................
77% .........................
75% .........................
76% .........................
74% .........................
75% .........................
73% .........................
74% .........................
72% .........................
73% .........................
71% .........................
72% .........................
70% .........................
71% .........................
69% .........................
70% .........................
68% .........................
69% .........................
67% .........................
68% .........................
66% .........................
67% .........................
65% .........................
66% .........................
64% .........................
65% .........................
63% .........................
64% .........................
62% .........................
63% .........................
61% .........................
62% .........................
60% .........................
61% .........................
59% .........................
60% .........................
58% .........................
59% .........................
57% .........................
58% .........................
56% .........................
57% .........................
55% .........................
56% .........................
54% .........................
55% .........................
53% .........................
54% .........................
52% .........................
53% .........................
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‘‘If the current payment performance
level is:
The applica-
ble percentage
is:
At least:
But less than:
51% .........................
52% .........................
50% .........................
51% .........................
49% .........................
50% .........................
48% .........................
49% .........................
47% .........................
48% .........................
46% .........................
47% .........................
45% .........................
46% .........................
44% .........................
45% .........................
43% .........................
44% .........................
42% .........................
43% .........................
41% .........................
42% .........................
40% .........................
41% .........................
0% ...........................
40% .........................
0.
Notwithstanding the preceding sentence, if
the current payment performance level of a
State for a fiscal year is less than 40 per-
cent but exceeds by at least 5 percentage
points the current payment performance
level of the State for the immediately pre-
ceding fiscal year, then the applicable per-
centage with respect to the State’s current
payment performance level is 50 percent.
‘‘(D) COLLECTIONS ON CHILD SUPPORT AR-
REARAGES.—
‘‘(i) DETERMINATION
OF
ARREARAGE
PAYMENT
PERFORMANCE
LEVEL.—The ar-
rearage payment performance level for a
State for a fiscal year is equal to the total
number of cases under the State plan ap-
proved under this part in which payments
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‘‘If the arrearage payment perform-
ance level is:
The applica-
ble percentage
is:
At least:
But less than:
62% .........................
63% .........................
61% .........................
62% .........................
60% .........................
61% .........................
59% .........................
60% .........................
58% .........................
59% .........................
57% .........................
58% .........................
56% .........................
57% .........................
55% .........................
56% .........................
54% .........................
55% .........................
53% .........................
54% .........................
52% .........................
53% .........................
51% .........................
52% .........................
50% .........................
51% .........................
49% .........................
50% .........................
48% .........................
49% .........................
47% .........................
48% .........................
46% .........................
47% .........................
45% .........................
46% .........................
44% .........................
45% .........................
43% .........................
44% .........................
42% .........................
43% .........................
41% .........................
42% .........................
40% .........................
41% .........................
0% ...........................
40% .........................
0.
Notwithstanding the preceding sentence, if
the arrearage payment performance level of
a State for a fiscal year is less than 40 per-
cent but exceeds by at least 5 percentage
points the arrearage payment performance
level of the State for the immediately pre-
ceding fiscal year, then the applicable per-
centage with respect to the State’s arrearage
payment performance level is 50 percent.
‘‘(E) COST-EFFECTIVENESS.—
‘‘(i) DETERMINATION OF COST-EFFEC-
TIVENESS PERFORMANCE LEVEL.—The cost-
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effectiveness performance level for a State
for a fiscal year is equal to the total
amount collected during the fiscal year
under the State plan approved under this
part divided by the total amount expended
during the fiscal year under the State plan,
expressed as a ratio.
‘‘(ii) DETERMINATION OF APPLICABLE
PERCENTAGE.—The applicable percentage
with respect to a State’s cost-effectiveness
performance level is as follows:
‘‘If the cost-effectiveness performance
level is:
The applica-
ble percentage
is:
At least:
But less than:
5.00 ..........................
..................................
100
4.50 ..........................
4.99 ..........................
4.00 ..........................
4.50 ..........................
3.50 ..........................
4.00 ..........................
3.00 ..........................
3.50 ..........................
2.50 ..........................
3.00 ..........................
2.00 ..........................
2.50 ..........................
0.00 ..........................
2.00 ..........................
0.
‘‘(c) TREATMENT OF INTERSTATE COLLECTIONS.—In
computing incentive payments under this section, support
which is collected by a State at the request of another State
shall be treated as having been collected in full by both
States, and any amounts expended by a State in carrying
out a special project assisted under section 455(e) shall be
excluded.
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‘‘(d) ADMINISTRATIVE PROVISIONS.—The amounts of
the incentive payments to be made to the States under this
section for a fiscal year shall be estimated by the Secretary
at or before the beginning of the fiscal year on the basis
of the best information available. The Secretary shall make
the payments for the fiscal year, on a quarterly basis (with
each quarterly payment being made no later than the begin-
ning of the quarter involved), in the amounts so estimated,
reduced or increased to the extent of any overpayments or
underpayments which the Secretary determines were made
under this section to the States involved for prior periods
and with respect to which adjustment has not already been
made under this subsection. Upon the making of any esti-
mate by the Secretary under the preceding sentence, any
appropriations available for payments under this section
are deemed obligated.
‘‘(e) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary governing the calcula-
tion of incentive payments under this section, including di-
rections for excluding from the calculations certain closed
cases and cases over which the States do not have jurisdic-
tion.
‘‘(f) REINVESTMENT.—A State to which a payment is
made under this section shall expend the full amount of the
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payment to supplement, and not supplant, other funds used
by the State—
‘‘(1) to carry out the State plan approved under
this part; or
‘‘(2) for any activity (including cost-effective
contracts with local agencies) approved by the Sec-
retary, whether or not the expenditures for the activ-
ity are eligible for reimbursement under this part,
which may contribute to improving the effectiveness
or efficiency of the State program operated under this
part.’’.
(b) TRANSITION RULE.—Notwithstanding any other
provision of law—
(1) for fiscal year 2000, the Secretary shall re-
duce by 1⁄3 the amount otherwise payable to a State
under section 458 of the Social Security Act, and
shall reduce by 2⁄3 the amount otherwise payable to a
State under section 458A of such Act; and
(2) for fiscal year 2001, the Secretary shall re-
duce by 2⁄3 the amount otherwise payable to a State
under section 458 of the Social Security Act, and
shall reduce by 1⁄3 the amount otherwise payable to a
State under section 458A of such Act.
(c) REGULATIONS.—Within 9 months after the date of
the enactment of this section, the Secretary of Health and
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Human Services shall prescribe regulations governing the
implementation of section 458A of the Social Security Act
when such section takes effect and the implementation of
subsection (b) of this section.
(d) STUDIES.—
(1) GENERAL REVIEW OF NEW INCENTIVE PAY-
MENT SYSTEM.—
(A) IN GENERAL.—The Secretary of Health
and Human Services shall conduct a study of the
implementation of the incentive payment system
established by section 458A of the Social Secu-
rity Act, in order to identify the problems and
successes of the system.
(B) REPORTS TO THE CONGRESS.—
(i) REPORT ON VARIATIONS IN STATE
PERFORMANCE
ATTRIBUTABLE
TO
DEMO-
GRAPHIC VARIABLES.—Not later than Octo-
ber 1, 2000, the Secretary shall submit to
the Congress a report that identifies any de-
mographic or economic variables that ac-
count for differences in the performance lev-
els achieved by the States with respect to the
performance measures used in the system,
and contains the recommendations of the
Secretary for such adjustments to the system
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as may be necessary to ensure that the rel-
ative performance of States is measured
from a baseline that takes account of any
such variables.
(ii) INTERIM REPORT.—Not later than
March 1, 2001, the Secretary shall submit
to the Congress an interim report that con-
tains the findings of the study required by
subparagraph (A).
(iii) FINAL REPORT.—Not later than
October 1, 2003, the Secretary shall submit
to the Congress a final report that contains
the final findings of the study required by
subparagraph (A). The report shall include
any recommendations for changes in the
system that the Secretary determines would
improve the operation of the child support
enforcement program.
(2) DEVELOPMENT OF MEDICAL SUPPORT INCEN-
TIVE.—
(A) IN GENERAL.—The Secretary of Health
and Human Services, in consultation with State
directors of programs operated under part D of
title IV of the Social Security Act and represent-
atives of children potentially eligible for medical
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State as of the date the amendments made by section
103(a) (without regard to section 116(a)(2)) first
apply to the State.’’; and
(ii) in paragraph (2), by striking ‘‘(c)’’
and inserting ‘‘(b)’’.
(2) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect as if included in
the enactment of section 341 of the Personal Respon-
sibility and Work Opportunity Reconciliation Act of
1996.
(f) ELIMINATION OF PREDECESSOR INCENTIVE PAY-
MENT SYSTEM.—
(1) REPEAL.—Section 458 of the Social Security
Act (42 U.S.C. 658) is repealed.
(2) CONFORMING AMENDMENTS.—
(A) Section 458A of the Social Security Act,
as added by section 201(a) of this Act, is redesig-
nated as section 458.
(B) Section 455(a)(4)(C)(iii) of such Act
(42 U.S.C. 655(a)(4)(C)(iii)), as added by sec-
tion 101(a) of this Act, is amended—
(i) by striking ‘‘458A(b)(4)’’ and in-
serting ‘‘458(b)(4)’’;
(ii) by striking ‘‘458A(b)(6)’’ and in-
serting ‘‘458(b)(6)’’; and
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(iii) by striking ‘‘458A(b)(5)(B)’’ and
inserting ‘‘458(b)(5)(B)’’.
(C) Subsection (d)(1) of this section is
amended by striking ‘‘458A’’ and inserting
‘‘458’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect on October 1, 2001.
(g) GENERAL EFFECTIVE DATE.—Except as otherwise
provided in this section, the amendments made by this sec-
tion shall take effect on October 1, 1999.
TITLE III—ADOPTION
PROVISIONS
SEC. 301. MORE FLEXIBLE PENALTY PROCEDURE TO BE AP-
PLIED FOR FAILING TO PERMIT INTERJURIS-
DICTIONAL ADOPTION.
(a) CONVERSION OF FUNDING BAN INTO STATE PLAN
REQUIREMENT.—Section 471(a) of the Social Security Act
(42 U.S.C. 671(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(21);
(2) by striking the period at the end of para-
graph (22) and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(23) provides that the State shall not—
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‘‘(A) deny or delay the placement of a child
for adoption when an approved family is avail-
able outside of the jurisdiction with responsibil-
ity for handling the case of the child; or
‘‘(B) fail to grant an opportunity for a fair
hearing, as described in paragraph (12), to an
individual whose allegation of a violation of sub-
paragraph (A) of this paragraph is denied by the
State or not acted upon by the State with rea-
sonable promptness.’’.
(b) PENALTY FOR NONCOMPLIANCE.—Section 474(d)
of such Act (42 U.S.C. 674(d)) is amended in each of para-
graphs (1) and (2) by striking ‘‘section 471(a)(18)’’ and
inserting ‘‘paragraph (18) or (23) of section 471(a)’’.
(c) CONFORMING AMENDMENT.—Section 474 of such
Act (42 U.S.C. 674) is amended by striking subsection (e).
(d) RETROACTIVITY.—The amendments made by this
section shall take effect as if included in the enactment of
section 202 of the Adoption and Safe Families Act of 1997
(Public Law 105–89; 111 Stat. 2125).
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TITLE IV—MISCELLANEOUS
SEC. 401. ELIMINATION OF BARRIERS TO THE EFFECTIVE
ESTABLISHMENT 
AND 
ENFORCEMENT 
OF
MEDICAL CHILD SUPPORT.
(a) PROMULGATION
OF NATIONAL STANDARDIZED
MEDICAL SUPPORT NOTICE.—Section 452(a) of the Social
Security Act (42 U.S.C. 652(a)) is amended—
(1) in paragraph (10), by striking ‘‘and’’ at the
end;
(2) in paragraph (11), by striking the period
and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(12)(A) develop jointly with the Secretary of
Labor—
‘‘(i) a National Standardized Medical Sup-
port Notice that satisfies the requirements of sec-
tion 609(a)(3) of the Employee Retirement In-
come 
Security 
Act 
of 
1974 
(29 
U.S.C.
1169(a)(3)) and the requirements of this part
and shall be used by States to enforce medical
support orders; and
‘‘(ii) appropriate procedures for the trans-
mission of such Notice to employers by State
agencies administering the program established
under this part;
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‘‘(B) not later than 90 days after the date of en-
actment of this paragraph, establish with the Sec-
retary of Labor, a medical support working group,
not to exceed 20 individuals, that shall—
‘‘(i) identify the impediments to the effective
enforcement of medical support by State agencies
administering the program established under this
part; and
‘‘(ii) be composed of representatives of—
‘‘(I) the Department of Labor;
‘‘(II) the Department of Health and
Human Services;
‘‘(III) State directors of programs
under this part;
‘‘(IV) State directors of the medicaid
program under title XIX;
‘‘(V) employers, including owners of
small businesses;
‘‘(VI) plan administrators and plan
sponsors of group health plans (as defined
in section 607(1) of the Employee Retire-
ment Income Security Act of 1974 (29
U.S.C. 1167(1));
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‘‘(VII) children potentially eligible for
medical support, such as child advocacy or-
ganizations; and
‘‘(VIII) State public welfare programs;
‘‘(C) require the working group established in ac-
cordance with subparagraph (B) to, not later than 18
months after the date of enactment of this paragraph,
submit to the Secretary and Congress a report con-
taining recommendations for appropriate measures to
address the impediments to the effective enforcement
of medical support by State agencies administering
the program established under this part identified by
the working group, including—
‘‘(i) appropriate measures that establish the
priority of withholding of child support obliga-
tions, medical support obligations, arrearages in
such obligations, and, in the case of a medical
support obligation, the employee’s portion of any
health care coverage premium, by the State agen-
cy administering the program established under
this part in light of the restrictions on garnish-
ment provided under title III of the Consumer
Credit Protection Act (15 U.S.C. 1671–1677);
‘‘(ii) appropriate procedures for coordinat-
ing the provision, enforcement, and transition of
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health care coverage under the State programs
established under this part, title XIX, and title
XXI;
‘‘(iii) appropriate measures to improve the
enforcement of alternate types of medical support
that are aside from health coverage offered
through the noncustodial parent’s health plan
and unrelated to the noncustodial parent’s em-
ployer, including measures that establish a non-
custodial parent’s responsibility to share the cost
of a copayment, deductible, or a payment for
services not covered under a child’s existing
health coverage; and
‘‘(iv) appropriate measures for eliminating
any other impediments to the effective enforce-
ment of medical support orders that the working
group deems necessary; and
‘‘(D) issue, under the authority of the Sec-
retary—
‘‘(i) not later than 180 days after the date
of enactment of this paragraph, a proposed regu-
lation that specifies that the National Standard-
ized Medical Support Notice shall be used by
State agencies administering the program under
this part to enforce medical support orders, and
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that includes such procedures for transmission of
the Notice to employers that the Secretary deter-
mines are appropriate; and
‘‘(ii) not later than 1 year after the date of
enactment of this paragraph, a final regulation
that specifies that the National Standardized
Medical Support Notice shall be used by State
agencies administering the program under this
part to enforce medical support orders and the
procedures for the transmission of that Notice to
employers.’’.
(b) REQUIRED USE OF NOTICE BY STATES.—
(1) STATE PROCEDURES.—Section 466(a)(19) of
the Social Security Act (42 U.S.C. 466(a)(19)) is
amended to read as follows:
‘‘(19) HEALTH
CARE
COVERAGE.—Procedures
under which—
‘‘(A) all child support orders enforced pur-
suant to this part include a provision for the
health care coverage of the child that, not later
than October 1, 2000, is enforced, where appro-
priate, through the use of the National Standard-
ized Medical Support Notice promulgated pursu-
ant to section 452(a)(12);
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‘‘(B) in any case in which a noncustodial
parent is required to provide such health care
coverage and the employer of such noncustodial
parent is known to the State agency, the State
agency shall use the National Standardized Med-
ical Support Notice to transfer notice of the pro-
vision for the health care coverage of the child to
the employer in conjunction, where appropriate,
with an income withholding notice within 2
days of the date that information regarding a
newly hired employee is entered in the State Di-
rectory of New Hires pursuant to section
453A(e), and to any subsequent employer if the
parent changes employment or obtains addi-
tional employment and the subsequent employer
of such noncustodial parent is known to the
State agency;
‘‘(C) not later than 7 business days after the
date the National Standardized Medical Support
Notice is issued, the Notice shall operate to enroll
the child in the noncustodial parent’s employer’s
health plan, and to authorize the collection of
any employee contributions required for such en-
rollment, unless the noncustodial parent contests
enforcement of the health care coverage provision
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of the child support order pursuant to the Notice
to the State agency based on mistake of fact; and
‘‘(D) the employer shall, within 21 days
after the date the Notice is issued, notify the
State agency administering the program under
this part whether such health care coverage is
available and, if so, whether the child has been
enrolled in such coverage and the effective date of
the enrollment, and provide to the custodial par-
ent any necessary documentation to provide the
child with coverage.’’.
(2) CONFORMING AMENDMENTS.—Section 452(f)
of the Social Security Act (42 U.S.C. 652(f)) is
amended in the first sentence—
(A) by striking ‘‘petition for the inclusion
of’’ and inserting ‘‘include’’; and
(B) by inserting ‘‘and enforce medical sup-
port’’ before ‘‘whenever’’.
(c) NATIONAL STANDARDIZED MEDICAL SUPPORT NO-
TICE DEEMED A QUALIFIED MEDICAL CHILD SUPPORT
ORDER.—
(1) AMENDMENT TO ERISA.—Section 609(a)(5)
of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1169(a)(5)) is amended by adding at
the end the following:
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‘‘(C) NATIONAL
STANDARDIZED
MEDICAL
SUPPORT NOTICE DEEMED TO BE A QUALIFIED
MEDICAL CHILD SUPPORT ORDER.—If a group
health plan administrator receives a completed
National Standardized Medical Support Notice
promulgated pursuant to section 452(a)(12) of
the Social Security Act (42 U.S.C. 652(a)(13)),
and the notice meets the requirements of para-
graphs (3) and (4), the notice shall, not later
than 7 business days after the date the National
Standardized Medical Support Notice is issued,
be deemed to be a qualified medical child support
order and the plan administrator shall comply
with the notice.’’.
(2) RULE OF CONSTRUCTION.—The amendment
made by paragraph (1) shall not be construed as re-
quiring an employer to provide or expand any health
benefits coverage provided by the employer that the
employer is not, as of the date of enactment of this
section, required to provide, or to modify or change
the eligibility rules applicable to a group health plan
(as defined in section 607(1) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C.
1167(1))).
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(d) REPORT AND RECOMMENDATIONS REGARDING THE
ENFORCEMENT OF QUALIFIED MEDICAL SUPPORT ORDERS
UNDER ERISA.—Not later than 1 year after the date of
enactment of this Act, the Secretary of Labor, in consulta-
tion with the Secretary of Health and Human Services,
shall submit to the Committee on Labor and Human Re-
sources and the Committee on Finance of the Senate, and
the Committee on Education and the Workforce and the
Committee on Ways and Means of the House of Representa-
tives, a report containing recommendations for appropriate
legislation to improve the effectiveness of, and enforcement
of, qualified medical child support orders under the provi-
sions of section 609 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1169).
SEC. 402. SAFEGUARD OF NEW EMPLOYEE INFORMATION.
(a) PENALTY FOR UNAUTHORIZED ACCESS, DISCLO-
SURE, OR USE OF INFORMATION.—Section 453(l) of the So-
cial Security Act (42 U.S.C. 653(l)) is amended—
(1) by striking ‘‘Information’’ and inserting the
following:
‘‘(1) IN GENERAL.—Information’’; and
(2) by adding at the end the following:
‘‘(2) PENALTY FOR MISUSE OF INFORMATION IN
THE NATIONAL DIRECTORY OF NEW HIRES.—The Sec-
retary shall require the imposition of an administra-
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tive penalty (up to and including dismissal from em-
ployment), and a fine of $1,000, for each act of unau-
thorized access to, disclosure of, or use of, information
in the National Directory of New Hires established
under subsection (i) by any officer or employee of the
United States who knowingly and willfully violates
this paragraph.’’.
(b) LIMITS ON RETENTION OF DATA IN THE NATIONAL
DIRECTORY OF NEW HIRES.—Section 453(i)(2) of the So-
cial Security Act (42 U.S.C. 653(i)(2)) is amended to read
as follows:
‘‘(2) DATA
ENTRY
AND
DELETION
REQUIRE-
MENTS.—Information shall be—
‘‘(A) entered into the data base maintained
by the National Directory of New Hires within
2 business days of receipt pursuant to section
453A(g)(2);
‘‘(B) in the case of an individual for whom
an information comparison under subsection (j)
does not reveal a match, deleted from such data
base 12 months after the date of entry; and
‘‘(C) in the case of an individual for whom
an information comparison under subsection (j)
does reveal a match, deleted from such data base
24 months after the date of entry.’’.
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(c) EFFECTIVE DATE.—The amendments made by sub-
sections (a) and (b) shall take effect on January 1, 1999.
SEC. 403. CONFORMING AMENDMENTS REGARDING THE
COLLECTION AND USE OF SOCIAL SECURITY
NUMBERS FOR PURPOSES OF CHILD SUP-
PORT ENFORCEMENT.
(a) 
CONFORMING
AMENDMENTS.—Section
205(c)(2)(C) of the Social Security Act (42 U.S.C.
405(c)(2)(C)) is amended—
(1) in clause (i), by striking ‘‘may require’’ and
inserting ‘‘shall require’’;
(2) in clause (ii)—
(A) by inserting after the 1st sentence the
following: ‘‘In the administration of any law in-
volving the issuance of a marriage certificate or
license, each State shall require each individual
named in the certificate or license to furnish to
the State (or political subdivision thereof), or
any State agency having administrative respon-
sibility for the law involved, the social security
number of the individual.’’; and
(B) by inserting ‘‘or marriage certificate’’
after ‘‘Such numbers shall not be recorded on the
birth certificate’’;
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(3) in clause (vi), by striking ‘‘may’’ and insert-
ing ‘‘shall’’; and
(4) by adding at the end the following:
‘‘(x) An agency of a State (or a political subdivision
thereof) charged with the administration of any law con-
cerning the issuance or renewal of a professional license,
driver’s license, occupational license, or recreational license
shall require each applicant for issuance or renewal of the
license to provide the applicant’s social security number to
the agency for the purpose of administering such laws, and
for the purpose of responding to requests for information
from an agency operating pursuant to part D of title IV.
If a State allows the use of a number other than the social
security number to be used on the face of the document while
the social security number is kept on file at the agency,
the State shall so advise any applicants.
‘‘(xi) All divorce decrees, support orders, and paternity
determinations issued, and all paternity acknowledgments
made, in each State shall include the social security number
of each individual subject to the decree, order, determina-
tion, or acknowledgment in the records relating to the mat-
ter, for the purpose of responding to requests for informa-
tion from an agency operating pursuant to part D of title
IV.’’.
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(b) RETROACTIVITY.—The amendments made by sub-
section (a) shall take effect as if included in the enactment
of section 317 of the Personal Responsibility and Work Op-
portunity Reconciliation Act of 1996 (Public Law 104–193;
110 Stat.2220).
SEC. 404. ELIMINATION OF DEFINITION REGARDING HIGH-
VOLUME AUTOMATED ADMINISTRATIVE EN-
FORCEMENT OF CHILD SUPPORT.
(a) TECHNICAL AMENDMENT.—Section 466(a)(14) of
the Social Security Act (42 U.S.C. 666(a)(14)) is amended
to read as follows:
‘‘(14) HIGH-VOLUME, AUTOMATED ADMINISTRA-
TIVE ENFORCEMENT IN INTERSTATE CASES.—Proce-
dures under which—
‘‘(A) the State shall use high-volume auto-
mated administrative enforcement, to the same
extent as used for intrastate cases, in response to
a request made by another State to enforce sup-
port orders, and shall promptly report the results
of such enforcement procedure to the requesting
State;
‘‘(B) the State may, by electronic or other
means, transmit to another State a request for
assistance in enforcing support orders through
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high-volume, automated administrative enforce-
ment, which request—
‘‘(i) shall include such information as
will enable the State to which the request is
transmitted to compare the information
about the cases to the information in the
data bases of the State; and
‘‘(ii) shall constitute a certification by
the requesting State—
‘‘(I) of the amount of support
under an order the payment of which
is in arrears; and
‘‘(II) that the requesting State has
complied with all procedural due proc-
ess requirements applicable to each
case;
‘‘(C) if the State provides assistance to an-
other State pursuant to this paragraph with re-
spect to a case, neither State shall consider the
case to be transferred to the caseload of such
other State; and
‘‘(D) the State shall maintain records of—
‘‘(i) the number of such requests for as-
sistance received by the State;
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‘‘(ii) the number of cases for which the
State collected support in response to such
a request; and
‘‘(iii) the amount of such collected sup-
port.’’.
(b) RETROACTIVITY.—The amendment made by sub-
section (a) shall take effect as if included in the enactment
of section 5550 of the Balanced Budget Act of 1997 (Public
Law 105–33; 111 Stat. 633).
SEC. 405. GENERAL ACCOUNTING OFFICE REPORTS.
(a) REPORT ON FEASIBILITY OF INSTANT CHECK SYS-
TEM.—Not later than December 31, 1998, the Comptroller
General of the United States shall report to the Committee
on Finance of the Senate and the Committee on Ways and
Means of the House of Representatives on the feasibility and
cost of creating and maintaining a nationwide instant
child support order check system under which an employer
would be able to determine whether a newly hired employee
is required to provide support under a child support order.
(b) REPORT ON IMPLEMENTATION AND USE OF CHILD
SUPPORT DATABASES.—Not later than December 31, 1998,
the Comptroller General of the United States shall report
to the Committee on Finance of the Senate and the Commit-
tee on Ways and Means of the House of Representatives on
the implementation of the Federal Parent Locater Service
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(including the Federal Case Registry of Child Support Or-
ders and the National Directory of New Hires) established
under section 453 of the Social Security Act (42 U.S.C.
653) and the State Directory of New Hires established
under section 453A of such Act (42 U.S.C. 653a). The report
shall include a detailed discussion of the purposes for which,
and the manner in which, the information maintained in
such databases has been used, and an examination as to
whether such databases are subject to adequate safeguards
to protect the privacy of the individuals with respect to
whom information is reported and maintained.
SEC. 406. TECHNICAL CORRECTIONS.
(a) Section 413(g)(1) of the Social Security Act (42
U.S.C. 613(g)(1)) is amended by striking ‘‘Economic and
Educational Opportunities’’ and inserting ‘‘Education and
the Workforce’’.
(b) Section 422(b)(2) of the Social Security Act (42
U.S.C. 622(b)(2)) is amended by striking ‘‘under under’’
and inserting ‘‘under’’.
(c) Section 432(a)(8) of the Social Security Act (42
U.S.C. 632(a)(8)) is amended by adding ‘‘; and’’ at the end.
(d) Section 453(a)(2) of the Social Security Act (42
U.S.C. 653(a)(2)) is amended—
(1) by striking ‘‘parentage,’’ and inserting ‘‘par-
entage or’’;
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(2) by striking ‘‘or making or enforcing child
custody or visitation orders,’’; and
(3) in subparagraph (A), by decreasing the in-
dentation of clause (iv) by 2 ems.
(e)(1) Section 5557(b) of the Balanced Budget Act of
1997 (42 U.S.C. 608 note) is amended by adding at the
end the following: ‘‘The amendment made by section
5536(1)(A) shall not take effect with respect to a State until
October 1, 2000, or such earlier date as the State may se-
lect.’’.
(2) The amendment made by paragraph (1) shall take
effect as if included in the enactment of section 5557 of the
Balanced Budget Act of 1997 (Public Law 105–33; 111
Stat. 637).
(f) Section 473A(c)(2)(B) of the Social Security Act
(42 U.S.C. 673b(c)(2)(B)) is amended—
(1) by striking ‘‘November 30, 1997’’ and insert-
ing ‘‘April 30, 1998’’; and
(2) by striking ‘‘March 1, 1998’’ and inserting
‘‘July 1, 1998’’.
(g) Section 474(a) of the Social Security Act (42
U.S.C. 674(a)) is amended by striking ‘‘(subject to the limi-
tations imposed by subsection (b))’’.
(h) Section 232 of the Social Security Act Amendments
of 1994 (42 U.S.C. 1314a) is amended—
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(1) in subsection (b)(3)(D), by striking ‘‘Energy
and’’; and
(2) in subsection (d)(4), by striking ‘‘(b)(3)(C)’’
and inserting ‘‘(b)(3)’’.
Amend the title so as to read: ‘‘An Act to provide
for an alternative penalty procedure for States that fail
to meet Federal child support data processing require-
ments, to reform Federal incentive payments for effective
child support performance, to provide for a more flexible
penalty procedure for States that violate interjurisdic-
tional adoption requirements, and for other purposes.’’.
Attest:
Secretary.