I
104TH CONGRESS
2D SESSION
H. R. 3362
To increase access of State child support enforcement agencies to certain
financial information of noncustodial parents, and to encourage States
to improve their enforcement of child support obligations.
IN THE HOUSE OF REPRESENTATIVES
APRIL 30, 1996
Mrs. MALONEY introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Bank-
ing and Financial Services, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
A BILL
To increase access of State child support enforcement agen-
cies to certain financial information of noncustodial par-
ents, and to encourage States to improve their enforce-
ment of child support obligations.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Child Support Enforce-
ment Improvements Act of 1996’’.
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SEC. 2. NONLIABILITY FOR DEPOSITORY INSTITUTIONS
PROVIDING FINANCIAL RECORDS TO STATE
CHILD SUPPORT ENFORCEMENT AGENCIES
IN CHILD SUPPORT CASES.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of Federal or State law, a depository institution shall
not be liable under any Federal or State law to any person
for disclosing any financial record of an individual to a
State child support enforcement agency attempting to es-
tablish, modify, or enforce a child support obligation of
such individual.
(b) PROHIBITION
OF DISCLOSURE
OF FINANCIAL
RECORD OBTAINED
BY STATE CHILD SUPPORT EN-
FORCEMENT AGENCY.—A State child support enforcement
agency which obtains a financial record of an individual
from a depository institution pursuant to subsection (a)
may disclose such financial record only for the purpose
of, and to the extent necessary in, establishing, modifying,
or enforcing a child support obligation of such individual.
(c) CIVIL DAMAGES FOR UNAUTHORIZED DISCLO-
SURE.—
(1) DISCLOSURE BY STATE OFFICER OR EM-
PLOYEE.—If any officer or employee of a State
knowingly, or by reason of negligence, discloses a fi-
nancial record of an individual in violation of sub-
section (b), such individual may bring a civil action
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for damages against such State in a district court of
the United States.
(2) NO LIABILITY FOR GOOD FAITH BUT ERRO-
NEOUS
INTERPRETATION.—No liability shall arise
under this subsection with respect to any disclosure
which results from a good faith, but erroneous, in-
terpretation of subsection (b).
(3) DAMAGES.—In any action brought under
paragraph (1), upon a finding of liability on the part
of the defendant, the defendant shall be liable to the
plaintiff in an amount equal to the sum of—
(A) the greater of—
(i) $1,000 for each act of unauthor-
ized disclosure of a financial record with
respect to which such defendant is found
liable; or
(ii) the sum of—
(I) the actual damages sustained
by the plaintiff as a result of such un-
authorized disclosure; plus
(II) in the case of a willful disclo-
sure or a disclosure which is the re-
sult of gross negligence, punitive dam-
ages; plus
(B) the costs of the action.
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(d) DEFINITIONS.—For purposes of this section:
(1) The term ‘‘depository institution’’ means—
(A) a depository institution, as defined by
section 3(c) of the Federal Deposit Insurance
Act;
(B) an institution-affiliated party, as de-
fined by section 3(u) of such Act; and
(C) any Federal credit union or State cred-
it union, as defined by section 101 of the Fed-
eral Credit Union Act, including an institution-
affiliated party of such a credit union, as de-
fined by section 206(r) of such Act.
(2) The term ‘‘financial record’’ has the mean-
ing given such term by section 1101(2) of the Right
to Financial Privacy Act of 1978.
(3) The term ‘‘State child support enforcement
agency’’ means a State agency which administers a
State program for establishing and enforcing child
support obligations.
SEC. 3. ACCESS TO AND USE OF CONSUMER REPORTS BY
STATE 
CHILD 
SUPPORT 
ENFORCEMENT
AGENCIES IN CHILD SUPPORT CASES.
(a) IN GENERAL.—Section 604 of the Fair Credit
Reporting Act (15 U.S.C. 1681b) is amended by adding
at the end the following:
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‘‘(4) To a State child support enforcement agency
that is seeking to establish, modify, or enforce a child sup-
port obligation against the consumer, if—
‘‘(A) the paternity of the consumer for the child
to which the obligation relates has been established
or acknowledged by the consumer in accordance with
State laws under which the obligation arises (if re-
quired by those laws); and
‘‘(B) the State child support enforcement agen-
cy—
‘‘(i) before obtaining the consumer report,
provides written notice to the consumer that the
State agency intends to obtain a consumer re-
port on the consumer; and
‘‘(ii) certifies to the consumer reporting
agency that—
‘‘(I) the requirement in subparagraph
(A) has been fulfilled (if applicable); and
‘‘(II) the notice required by clause (i)
has been provided.’’.
(b) STATE CHILD SUPPORT ENFORCEMENT AGENCY
DEFINED.—Section 603 of such Act (15 U.S.C. 1681a)
is amended by adding at the end the following new sub-
section:
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‘‘(k) The term ‘State child support enforcement agen-
cy’ means a State agency which administers a State pro-
gram for establishing and enforcing child support obliga-
tions.’’.
SEC. 4. HEALTH CARE SUPPORT.
(a) INCLUSION IN CHILD SUPPORT ORDERS.—
(1) IN GENERAL.—Section 466(a) of the Social
Security Act (42 U.S.C. 666(a)) is amended by in-
serting after paragraph (11) the following:
‘‘(12) Not later than the beginning of the 9th
calendar month that begins after the date the Sec-
retary prescribes final regulations as provided for in
section 467(d)(2):
‘‘(A) Procedures which require any child
support order, issued or modified by a court or
administrative agency of the State on or after
the effective date of guidelines established by
the State under section 467(d), to provide for
coverage of the health care costs of the child in
accordance with such guidelines.
‘‘(B) Procedures which require the expe-
dited consideration and disposition of any alle-
gation of noncompliance with an obligation to
cover the health care costs of a child imposed
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under a child support order issued or modified
in the State.’’.
(2) STATE GUIDELINES.—Section 467 of such
Act (42 U.S.C. 667) is amended by adding at the
end the following:
‘‘(d)(1) Not later than the beginning of the 9th cal-
endar month that begins after the date the Secretary pre-
scribes final regulations in accordance with paragraph (2),
each State, as a condition for having its State plan ap-
proved under this part, must establish guidelines for the
coverage of the health care costs of children pursuant to
child support orders issued or modified in the State, which
guidelines shall create a streamlined process that meets
the minimum standards established by the Secretary in
such regulations.
‘‘(2)(A) The Secretary shall promulgate regulations
which set forth minimum standards that any set of guide-
lines established pursuant to paragraph (1) must meet in
providing for the coverage of the health care costs of chil-
dren pursuant to child support orders issued or modified
in the State, including—
‘‘(i) the contents of such an order with respect
to the coverage of such costs;
‘‘(ii) the distribution of responsibility for such
costs;
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‘‘(iii) to the extent that such costs are to be
covered through health insurance—
‘‘(I) the provision of such insurance;
‘‘(II) the payment of insurance claims; and
‘‘(III) the rights of the noncustodial parent
and the custodial parent to insurance informa-
tion;
‘‘(iv) the circumstances under which a provider
of health insurance may or may not deny coverage
to a child who is the subject of such an order;
‘‘(v) penalties to be imposed on providers of
health insurance who fail to comply with the guide-
lines; and
‘‘(vi) how changes in the circumstances of the
noncustodial parent and the custodial parent are to
be taken into account with respect to the coverage
of such costs.
‘‘(B) In developing such standards, the Secretary
shall ensure that, in establishing guidelines pursuant to
paragraph (1), the State considers the following matters
in the following order of importance:
‘‘(i) The best interests of the child.
‘‘(ii) The financial and other circumstances of
the parents of the child.
‘‘(iii) Cost-effectiveness.
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‘‘(3) The preceding subsections of this section shall
apply in like manner to the guidelines established pursu-
ant to this subsection.’’.
(3) REGULATIONS.—
(A) PROPOSED REGULATIONS.—Within 9
months after the date of the enactment of this
Act, the Secretary of Health and Human Serv-
ices shall issue proposed regulations to imple-
ment the amendments made by this subsection.
(B) FINAL
REGULATIONS.—Within 14
months after the date of the enactment of this
Act, the Secretary of Health and Human Serv-
ices shall issue final regulations to implement
the amendments made by this subsection.
(b) INCLUSION IN INCENTIVE PAYMENTS PROGRAM
OF DEPENDENT HEALTH INSURANCE PROVIDED DUE TO
SUCCESSFUL ENFORCEMENT.—
(1) IN GENERAL.—Section 458(b) of the Social
Security Act (42 U.S.C. 658(b)) is amended by add-
ing at the end the following:
‘‘(5)(A) For purposes of this section, the successful
enforcement by the State of a provision of a support order
requiring an absent parent to obtain health insurance for
1 or more children shall be considered the collection of
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support from the absent parent, without regard to the
means by which such support is provided.
‘‘(B) The amount of support collected in any case in
which the State successfully enforces a provision of a sup-
port order requiring an absent parent to obtain health in-
surance for 1 or more children shall be the savings to the
State from the provision of such health insurance to such
children, as determined in accordance with a health insur-
ance savings methodology adopted by the State in accord-
ance with regulations prescribed by the Secretary.’’.
(2) REGULATIONS.—Within 6 months after the
date of the enactment of this Act, the Secretary of
Health and Human Services shall prescribe such
regulations as may be necessary to implement the
amendment made by paragraph (1).
(3) STUDY; REPORT.—
(A) STUDY.—The Secretary of Health and
Human Services shall conduct a study to deter-
mine the incentives that should be provided to
encourage States to enforce obligations of non-
custodial parents to pay (and obtain medical in-
surance coverage with respect to) the reason-
able and necessary health and dental expenses
of the children to whom the noncustodial par-
ents owe such obligations.
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SEC. 6. WAGES WITHHELD BY EMPLOYERS TO PAY CHILD
SUPPORT OBLIGATIONS REQUIRED TO BE
PAID TO STATE WITHIN 10 DAYS; LATE PAY-
MENT PENALTY IMPOSED ON EMPLOYERS.
(a) IN GENERAL.—Section 466(b)(6)(A) of the Social
Security Act (42 U.S.C. 666(b)(6)(A)) is amended—
(1) in clause (i), by inserting ‘‘within 10 days
after the payment of such wages’’ before ‘‘to the ap-
propriate agency’’; and
(2) by adding at the end the following:
‘‘(iii) The State must require any employer who
fails to make any payment required in accordance
with clause (i) within the 10-day period described
therein to pay the State a $1,000 penalty. The State
must expend all penalties collected in accordance
with this clause for the operation of the State plan
approved under section 454, not later than the end
of the calendar quarter following the calendar quar-
ter in which collected.’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2) of this subsection, the amendments made
by subsection (a) of this section shall take effect on
the date of the enactment of this Act and apply to
wages paid on or after such date and payments
under part D of title IV of the Social Security Act
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for calendar quarters beginning on or after such
date.
(2) DELAY PERMITTED IF STATE LEGISLATION
REQUIRED.—In the case of a State plan approved
under section 454 of the Social Security Act which
the Secretary of Health and Human Services deter-
mines requires State legislation (other than legisla-
tion appropriating funds) in order for the plan to
meet the additional requirements imposed by the
amendments made by subsection (a) of this section,
the State plan shall not be regarded as failing to
comply with the requirements of such section 454
solely on the basis of the failure of the plan to meet
such additional requirements before the 1st day of
the 1st calendar quarter beginning after the close of
the 1st regular session of the State legislature that
begins after the date of the enactment of this Act.
For purposes of the previous sentence, in the case
of a State that has a 2-year legislative session, each
year of such session shall be deemed to be a sepa-
rate regular session of the State legislature.
SEC. 7. NATIONAL PARENT LOCATOR NETWORK.
Section 453 of the Social Security Act (42 U.S.C.
653) is amended by adding at the end the following:
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‘‘(g) The Secretary shall expand the Parent Locator
Service to establish a national network based on the com-
prehensive statewide child support enforcement systems
developed by the States, to—
‘‘(1) allow each State to—
‘‘(A) locate any absent parent who owes
child support, for whom a child support obliga-
tion is being established, or for whom an order
for visitation is being enforced, by—
‘‘(i) accessing the records of other
State agencies and sources of locate infor-
mation directly from one computer system
to another; and
‘‘(ii) accessing Federal sources of lo-
cate information in the same fashion;
‘‘(B) access the files of other States to de-
termine whether there are other child support
orders involving the same absent parent, and
obtain the details of any such order;
‘‘(C) provide for both on-line and batch
processing of locate requests, with on-line ac-
cess restricted to cases in which the information
is needed immediately (for such reasons as
court appearances) and batch processing used
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to ‘troll’ data bases to locate individuals or up-
date information periodically; and
‘‘(D) direct locate requests to individual
States or Federal agencies, broadcast requests
to selected States, or broadcast cases to all
States when there is no indication of the source
of needed information;
‘‘(2) provide for a maximum of 48-hour turn-
around time for information to be broadcast and re-
turned to a requesting State; and
‘‘(3) provide ready access to courts of the infor-
mation on the network by location of a computer
terminal in each court.’’.
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