TITLE I—ELIGIBILITY FOR SERV-
ICES; DISTRIBUTION OF PAY-
MENTS
SEC. 101. STATE OBLIGATION TO PROVIDE CHILD SUP-
PORT ENFORCEMENT SERVICES.
(a) STATE PLAN REQUIREMENTS.—Section 454 (42
U.S.C. 654) is amended—
(1) by striking paragraph (4) and inserting the
following new paragraph:
‘‘(4) provide that the State will—
‘‘(A) provide services relating to the estab-
lishment of paternity or the establishment,
modification, or enforcement of child support
obligations, as appropriate, under the plan with
respect to—
‘‘(i) each child for whom (I) assist-
ance is provided under the State program
funded under part A of this title, (II) ben-
efits or services for foster care mainte-
nance are provided under the State pro-
gram funded under part E of this title, or
(III) medical assistance is provided under
the State plan approved under title XIX,
unless, in accordance with paragraph (29),
good cause and other exceptions exist;
‘‘(ii) any other child, if an individual
applies for such services with respect to
the child; and
‘‘(B) enforce any support obligation estab-
lished with respect to—
‘‘(i) a child with respect to whom the
State provides services under the plan; or
‘‘(ii) the custodial parent of such a
child.’’; and
(2) in paragraph (6)—
(A) by striking ‘‘provide that’’ and insert-
ing ‘‘provide that—’’;
(B) by striking subparagraph (A) and in-
serting the following new subparagraph:
‘‘(A) services under the plan shall be made
available to residents of other States on the
same terms as to residents of the State submit-
ting the plan;’’;
(C) in subparagraph (B), by inserting ‘‘on
individuals not receiving assistance under any
State program funded under part A’’ after
‘‘such services shall be imposed’’;
(D) in each of subparagraphs (B), (C),
(D), and (E)—
(i) by indenting the subparagraph in
the same manner as, and aligning the left
margin of the subparagraph with the left
margin of, the matter inserted by subpara-
graph (B) of this paragraph; and
(ii) by striking the final comma and
inserting a semicolon; and
(E) in subparagraph (E), by indenting
each of clauses (i) and (ii) 2 additional ems.
(b) CONTINUATION
OF SERVICES
FOR FAMILIES
CEASING TO RECEIVE ASSISTANCE UNDER THE STATE
PROGRAM FUNDED UNDER PART A.—Section 454 (42
U.S.C. 654) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(23);
(2) by striking the period at the end of para-
graph (24) and inserting ‘‘; and’’; and
(3) by adding after paragraph (24) the follow-
ing new paragraph:
‘‘(25) provide that if a family with respect to
which services are provided under the plan ceases to
receive assistance under the State program funded
under part A, the State shall provide appropriate no-
tice to the family and continue to provide such serv-
ices, subject to the same conditions and on the same
basis as in the case of other individuals to whom
services are furnished under the plan, except that an
application or other request to continue services
shall not be required of such a family and paragraph
(6)(B) shall not apply to the family.’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 452(b) (42 U.S.C. 652(b)) is
amended by 
striking 
‘‘454(6)’’ 
and 
inserting
‘‘454(4)’’.
(2) 
Section 
452(g)(2)(A) 
(42 
U.S.C.
652(g)(2)(A)) is amended by striking ‘‘454(6)’’ each
place it appears and inserting ‘‘454(4)(A)(ii)’’.
(3) 
Section 
466(a)(3)(B) 
(42 
U.S.C.
666(a)(3)(B)) is amended by striking ‘‘in the case of
overdue support which a State has agreed to collect
under section 454(6)’’ and inserting ‘‘in any other
case’’.
(4) Section 466(e) (42 U.S.C. 666(e)) is
amended by striking ‘‘paragraph (4) or (6) of sec-
tion 454’’ and inserting ‘‘section 454(4)’’.
SEC. 102. DISTRIBUTION OF CHILD SUPPORT COLLEC-
TIONS.
(a) IN GENERAL.—Section 457 (42 U.S.C. 657) is
amended to read as follows:
‘‘SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.
‘‘(a) IN GENERAL.—Subject to subsection (e), an
amount 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 so collected; and
‘‘(B) retain, or distribute to the family, the
State share of the amount so collected.
‘‘(2) FAMILIES THAT FORMERLY RECEIVED AS-
SISTANCE.—In the case of a family that formerly re-
ceived assistance from the State:
‘‘(A) CURRENT SUPPORT PAYMENTS.—To
the extent that the amount so collected does not
exceed the amount required to be paid to the
family for the month in which collected, the
State shall distribute the amount so collected to
the family.
‘‘(B) PAYMENTS OF ARREARAGES.—To the
extent that the amount so collected exceeds the
amount required to be paid to the family for
the month in which collected, the State shall
distribute the amount so collected as follows:
‘‘(i) DISTRIBUTION
OF
ARREARAGES
THAT
ACCRUED
AFTER
THE
FAMILY
CEASED TO RECEIVE ASSISTANCE.—
‘‘(I) PRE-OCTOBER 1997.—Except
as provided in subclause (II), the pro-
visions of this section (other than sub-
section (b)(1)) as in effect and applied
on the day before the date of the en-
actment of section 102 of the Child
Support Improvement Act of 1996
shall apply with respect to the dis-
tribution of support arrearages that—
‘‘(aa) accrued after the fam-
ily ceased to receive assistance,
and
‘‘(bb) are collected before
October 1, 1997.
‘‘(II) POST-SEPTEMBER
1997.—
With respect to the amount so col-
lected on or after October 1, 1997 (or
before such date, at the option of the
State)—
‘‘(aa) IN
GENERAL.—The
State shall first distribute the
amount so collected (other than
any amount described in clause
(iv)) to the family to the extent
necessary to satisfy any support
arrearages with respect to the
family that accrued after the
family ceased to receive assist-
ance from the State.
‘‘(bb) REIMBURSEMENT
OF
GOVERNMENTS
FOR
ASSISTANCE
PROVIDED
TO
THE
FAMILY.—
After the application of division
(aa) and clause (ii)(II)(aa) with
respect to the amount so col-
lected, the State shall retain the
State share of the amount so col-
lected, and pay to the Federal
Government the Federal share
(as defined in subsection (c)(2))
of the amount so collected, but
only to the extent necessary to
reimburse amounts paid to the
family as assistance by the State.
‘‘(cc) DISTRIBUTION OF THE
REMAINDER
TO
THE
FAMILY.—
To the extent that neither divi-
sion (aa) nor division (bb) applies
to the amount so collected, the
State shall distribute the amount
to the family.
‘‘(ii) DISTRIBUTION OF ARREARAGES
THAT ACCRUED BEFORE THE FAMILY RE-
CEIVED ASSISTANCE.—
‘‘(I) PRE-OCTOBER 2000.—Except
as provided in subclause (II), the pro-
visions of this section (other than sub-
section (b)(1)) as in effect and applied
on the day before the date of the en-
actment of section 102 of the Child
Support Improvement Act of 1996
shall apply with respect to the dis-
tribution of support arrearages that—
‘‘(aa) accrued before the
family received assistance, and
‘‘(bb) are collected before
October 1, 2000.
‘‘(II) POST-SEPTEMBER
2000.—
Unless, based on the report required
by paragraph (4), the Congress deter-
mines otherwise, with respect to the
amount so collected on or after Octo-
ber 1, 2000 (or before such date, at
the option of the State)—
‘‘(aa) IN
GENERAL.—The
State shall first distribute the
amount so collected (other than
any amount described in clause
(iv)) to the family to the extent
necessary to satisfy any support
arrearages with respect to the
family that accrued before the
family received assistance from
the State.
‘‘(bb) REIMBURSEMENT
OF
GOVERNMENTS
FOR
ASSISTANCE
PROVIDED
TO
THE
FAMILY.—
After the application of clause
(i)(II)(aa) and division (aa) with
respect to the amount so col-
lected, the State shall retain the
State share of the amount so col-
lected, and pay to the Federal
Government the Federal share
(as defined in subsection (c)(2))
of the amount so collected, but
only to the extent necessary to
reimburse amounts paid to the
family as assistance by the State.
‘‘(cc) DISTRIBUTION OF THE
REMAINDER
TO
THE
FAMILY.—
To the extent that neither divi-
sion (aa) nor division (bb) applies
to the amount so collected, the
State shall distribute the amount
to the family.
‘‘(iii) DISTRIBUTION OF ARREARAGES
THAT ACCRUED WHILE THE FAMILY RE-
CEIVED
ASSISTANCE.—In the case of a
family described in this subparagraph, the
provisions of paragraph (1) shall apply
with respect to the distribution of support
arrearages that accrued while the family
received assistance.
‘‘(iv) AMOUNTS
COLLECTED
PURSU-
ANT
TO
SECTION 464.—Notwithstanding
any other provision of this section, any
amount of support collected pursuant to
section 464 shall be retained by the State
to the extent past-due support has been as-
signed to the State as a condition of re-
ceiving assistance from the State, up to the
amount necessary to reimburse the State
for amounts paid to the family as assist-
ance by the State. The State shall pay to
the Federal Government the Federal share
of the amounts so retained. To the extent
the amount collected pursuant to section
464 exceeds the amount so retained, the
State shall distribute the excess to the
family.
‘‘(v) ORDERING RULES FOR DISTRIBU-
TIONS.—For purposes of this subpara-
graph, unless an earlier effective date is re-
quired by this section, effective October 1,
2000, the State shall treat any support ar-
rearages collected as accruing in the fol-
lowing order:
‘‘(I) To the period after the fam-
ily ceased to receive assistance.
‘‘(II) To the period before the
family received assistance.
‘‘(III) To the period while the
family was receiving assistance.
‘‘(3) FAMILIES THAT NEVER RECEIVED ASSIST-
ANCE.—In the case of any other family, the State
shall distribute the amount so collected to the fam-
ily.
‘‘(4) STUDY AND REPORT.—Not later than Oc-
tober 1, 1998, the Secretary shall report to the Con-
gress the Secretary’s findings with respect to—
‘‘(A) whether the distribution of post-as-
sistance arrearages to families has been effec-
tive in moving people off of welfare and keeping
them off of welfare;
‘‘(B) whether early implementation of a
pre-assistance arrearage program by some
States has been effective in moving people off
of welfare and keeping them off of welfare;
‘‘(C) what the overall impact has been of
the amendments made by the Child Support
Improvement Act of 1996 with respect to child
support enforcement in moving people off of
welfare and keeping them off of welfare; and
‘‘(D) based on the information and data
the Secretary has obtained, what changes, if
any, should be made in the policies related to
the distribution of child support arrearages.
‘‘(b) CONTINUATION OF ASSIGNMENTS.—Any rights
to support obligations, which were assigned to a State as
a condition of receiving assistance from the State under
part A and which were in effect on the day before the
date of the enactment of the Child Support Improvement
Act of 1996, shall remain assigned after such date.
‘‘(c) DEFINITIONS.—As used in subsection (a):
‘‘(1) ASSISTANCE.—The term ‘assistance from
the State’ means—
‘‘(A) assistance under the State program
funded under part A or under the State plan
approved under part A of this title (as in effect
on the day before the date of the enactment of
the Child Support Improvement Act of 1996);
or
‘‘(B) benefits under the State plan ap-
proved under part E of this title (as in effect
on the day before the date of the enactment of
the Child Support Improvement Act of 1996).
‘‘(2) FEDERAL
SHARE.—The term ‘Federal
share’ means that portion of the amount collected
resulting from the application of the Federal medical
assistance percentage in effect for the fiscal year in
which the amount is collected.
‘‘(3) FEDERAL MEDICAL ASSISTANCE PERCENT-
AGE.—The term ‘Federal medical assistance per-
centage’ means—
‘‘(A) the Federal medical assistance per-
centage (as defined in section 1118), in the case
of Puerto Rico, the Virgin Islands, Guam, and
American Samoa; or
‘‘(B) the Federal medical assistance per-
centage (as defined in section 1905(b)) in the
case of any other State.
‘‘(4) STATE
SHARE.—The term ‘State share’
means 100 percent minus the Federal share.
‘‘(d) HOLD HARMLESS PROVISION.—If the amounts
collected which could be retained by the State in the fiscal
year (to the extent necessary to reimburse the State for
amounts paid to families as assistance by the State) are
less than the State share of the amounts collected in fiscal
year 1995 (determined in accordance with section 457 as
in effect on the day before the date of the enactment of
the Child Support Improvement Act of 1996), the State
share for the fiscal year shall be an amount equal to the
State share in fiscal year 1995.
‘‘(e) GAP PAYMENTS NOT SUBJECT TO DISTRIBU-
TION UNDER THIS SECTION.—This section shall not
apply to any amount collected on behalf of a family as
support by a State pursuant to a plan approved under this
part if such amount would have been distributed to the
family by the State under section 402(a)(28), as in effect
and applied on the day before the date of the enactment
of section 302 of the Child Support Improvement Act of
1996.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is
amended by striking ‘‘section 457(b)(4) or (d)(3)’’
and inserting ‘‘section 457’’.
(2) Section 454 (42 U.S.C. 654) is amended—
(A) in paragraph (11)—
(i) by striking ‘‘(11)’’ and inserting
‘‘(11)(A)’’; and
(ii) by inserting after the semicolon
‘‘and’’; and
(B) by redesignating paragraph (12) as
subparagraph (B) of paragraph (11).
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall be effective on July 1, 1996, or earlier at the
State’s option.
(2) CONFORMING AMENDMENTS.—The amend-
ments made by subsection (b)(2) shall become effec-
tive on the date of the enactment of this Act.
SEC. 103. PRIVACY SAFEGUARDS.
(a) STATE PLAN REQUIREMENT.—Section 454 (42
U.S.C. 654), as amended by section 101(b) of this Act,
is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(24);
(2) by striking the period at the end of para-
graph (25) and inserting ‘‘; and’’; and
(3) by adding after paragraph (25) the follow-
ing new paragraph:
‘‘(26) will have in effect safeguards, applicable
to all confidential information handled by the State
agency, that are designed to protect the privacy
rights of the parties, including—
‘‘(A) safeguards against unauthorized use
or disclosure of information relating to proceed-
ings or actions to establish paternity, or to es-
tablish or enforce support;
‘‘(B) prohibitions against the release of in-
formation on the whereabouts of 1 party to an-
other party against whom a protective order
with respect to the former party has been en-
tered; and
‘‘(C) prohibitions against the release of in-
formation on the whereabouts of 1 party to an-
other party if the State has reason to believe
that the release of the information may result
in physical or emotional harm to the former
party.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on October 1, 1997.
SEC. 104. RIGHTS TO NOTIFICATION OF HEARINGS.
(a) IN GENERAL.—Section 454 (42 U.S.C. 654), as
amended by section 102(b)(2) of this Act, is amended by
inserting after paragraph (11) the following new para-
graph:
‘‘(12) provide for the establishment of proce-
dures to require the State to provide individuals who
are applying for or receiving services under the State
plan, or who are parties to cases in which services
are being provided under the State plan—
‘‘(A) with notice of all proceedings in
which support obligations might be established
or modified; and
‘‘(B) with a copy of any order establishing
or modifying a child support obligation, or (in
the case of a petition for modification) a notice
of determination that there should be no change
in the amount of the child support award, with-
in 14 days after issuance of such order or de-
termination;’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on October 1, 1997.
TITLE II—LOCATE AND CASE
TRACKING
SEC. 201. STATE CASE REGISTRY.
Section 454A, as added by section 504(a)(2) of this
Act, is amended by adding at the end the following new
subsections:
‘‘(e) STATE CASE REGISTRY.—
‘‘(1) CONTENTS.—The automated system re-
quired by this section shall include a registry (which
shall be known as the ‘State case registry’) that con-
tains records with respect to—
‘‘(A) each case in which services are being
provided by the State agency under the State
plan approved under this part; and
‘‘(B) each support order established or
modified in the State on or after October 1,
1998.
‘‘(2) LINKING
OF
LOCAL
REGISTRIES.—The
State case registry may be established by linking
local case registries of support orders through an
automated information network, subject to this sec-
tion.
‘‘(3) USE
OF
STANDARDIZED
DATA
ELE-
MENTS.—Such records shall use standardized data
elements for both parents (such as names, social se-
curity numbers and other uniform identification
numbers, dates of birth, and case identification
numbers), and contain such other information (such
as on case status) as the Secretary may require.
‘‘(4) PAYMENT RECORDS.—Each case record in
the State case registry with respect to which services
are being provided under the State plan approved
under this part and with respect to which a support
order has been established shall include a record
of—
‘‘(A) the amount of monthly (or other peri-
odic) support owed under the order, and other
amounts (including arrearages, interest or late
payment penalties, and fees) due or overdue
under the order;
‘‘(B) any amount described in subpara-
graph (A) that has been collected;
‘‘(C) the distribution of such collected
amounts;
‘‘(D) the birth date of any child for whom
the order requires the provision of support; and
‘‘(E) the amount of any lien imposed with
respect to the order pursuant to section
466(a)(4).
‘‘(5) UPDATING AND MONITORING.—The State
agency operating the automated system required by
this section shall promptly establish and update,
maintain, and regularly monitor, case records in the
State case registry with respect to which services are
being provided under the State plan approved under
this part, on the basis of—
‘‘(A) information on administrative actions
and administrative and judicial proceedings and
orders relating to paternity and support;
‘‘(B) information obtained from compari-
son with Federal, State, or local sources of in-
formation;
‘‘(C) information on support collections
and distributions; and
‘‘(D) any other relevant information.
‘‘(f) INFORMATION COMPARISONS AND OTHER DIS-
CLOSURES OF INFORMATION.—The State shall use the
automated system required by this section to extract infor-
mation from (at such times, and in such standardized for-
mat or formats, as may be required by the Secretary), to
share and compare information with, and to receive infor-
mation from, other data bases and information compari-
son services, in order to obtain (or provide) information
necessary to enable the State agency (or the Secretary or
other State or Federal agencies) to carry out this part,
subject to section 6103 of the Internal Revenue Code of
1986. Such information comparison activities shall include
the following:
‘‘(1) FEDERAL CASE REGISTRY OF CHILD SUP-
PORT
ORDERS.—Furnishing to the Federal Case
Registry of Child Support Orders established under
section 453(h) (and update as necessary, with infor-
mation including notice of expiration of orders) the
minimum amount of information on child support
cases recorded in the State case registry that is nec-
essary to operate the registry (as specified by the
Secretary in regulations).
‘‘(2) FEDERAL
PARENT
LOCATOR
SERVICE.—
Exchanging information with the Federal Parent
Locator Service for the purposes specified in section
453.
‘‘(3) TEMPORARY
FAMILY
ASSISTANCE
AND
MEDICAID AGENCIES.—Exchanging information with
State agencies (of the State and of other States) ad-
ministering programs funded under part A, pro-
grams operated under State plans approved under
title XIX, and other programs designated by the
Secretary, as necessary to perform State agency re-
sponsibilities under this part and under such pro-
grams.
‘‘(4) INTRASTATE AND INTERSTATE INFORMA-
TION COMPARISONS.—Exchanging information with
other agencies of the State, agencies of other States,
and interstate information networks, as necessary
and appropriate to carry out (or assist other States
to carry out) the purposes of this part.’’.
SEC. 202. COLLECTION AND DISBURSEMENT OF SUPPORT
PAYMENTS.
(a) STATE PLAN REQUIREMENT.—Section 454 (42
U.S.C. 654), as amended by sections 101(b) and 103(a)
of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(25);
(2) by striking the period at the end of para-
graph (26) and inserting ‘‘; and’’; and
(3) by adding after paragraph (26) the follow-
ing new paragraph:
‘‘(27) provide that, on and after October 1,
1998, the State agency will—
‘‘(A) operate a State disbursement unit in
accordance with section 454B; and
‘‘(B) have sufficient State staff (consisting
of State employees) and (at State option) con-
tractors reporting directly to the State agency
to—
‘‘(i) monitor and enforce support col-
lections through the unit in cases being en-
forced by the State pursuant to section
454(4) (including carrying out the auto-
mated data processing responsibilities de-
scribed in section 454A(g)); and
‘‘(ii) take the actions described in sec-
tion 466(c)(1) in appropriate cases.’’.
(b) ESTABLISHMENT
OF
STATE
DISBURSEMENT
UNIT.—Part D of title IV (42 U.S.C. 651–669), as
amended by section 504(a)(2) of this Act, is amended by
inserting after section 454A the following new section:
‘‘SEC. 454B. COLLECTION AND DISBURSEMENT OF SUP-
PORT PAYMENTS.
‘‘(a) STATE DISBURSEMENT UNIT.—
‘‘(1) IN
GENERAL.—In order for a State to
meet the requirements of this section, the State
agency must establish and operate a unit (which
shall be known as the ‘State disbursement unit’) for
the collection and disbursement of payments under
support orders—
‘‘(A) in all cases being enforced by the
State pursuant to section 454(4); and
‘‘(B) in all cases not being enforced by the
State under this part in which the support
order is initially issued in the State on or after
January 1, 1994, and in which the wages of the
noncustodial parent are subject to withholding
pursuant to section 466(a)(8)(B).
‘‘(2) OPERATION.—The State disbursement
unit shall be operated—
‘‘(A) directly by the State agency (or 2 or
more State agencies under a regional coopera-
tive agreement), or (to the extent appropriate)
by a contractor responsible directly to the State
agency; and
‘‘(B) except in cases described in para-
graph (1)(B), in coordination with the auto-
mated system established by the State pursuant
to section 454A.
‘‘(3) 
LINKING
OF
LOCAL
DISBURSEMENT
UNITS.—The State disbursement unit may be estab-
lished by linking local disbursement units through
an automated information network, subject to this
section, if the Secretary agrees that the system will
not cost more nor take more time to establish or op-
erate than a centralized system. In addition, employ-
ers shall be given 1 location to which income with-
holding is sent.
‘‘(b) REQUIRED PROCEDURES.—The State disburse-
ment unit shall use automated procedures, electronic proc-
esses, and computer-driven technology to the maximum
extent feasible, efficient, and economical, for the collection
and disbursement of support payments, including proce-
dures—
‘‘(1) for receipt of payments from parents, em-
ployers, and other States, and for disbursements to
custodial parents and other obligees, the State agen-
cy, and the agencies of other States;
‘‘(2) for accurate identification of payments;
‘‘(3) to ensure prompt disbursement of the cus-
todial parent’s share of any payment; and
‘‘(4) to furnish to any parent, upon request,
timely information on the current status of support
payments under an order requiring payments to be
made by or to the parent.
‘‘(c) TIMING OF DISBURSEMENTS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the State disbursement unit shall distrib-
ute all amounts payable under section 457(a) within
2 business days after receipt from the employer or
other source of periodic income, if sufficient infor-
mation identifying the payee is provided.
‘‘(2) PERMISSIVE
RETENTION
OF
ARREAR-
AGES.—The State disbursement unit may delay the
distribution of collections toward arrearages until
the resolution of any timely appeal with respect to
such arrearages.
‘‘(d) BUSINESS DAY DEFINED.—As used in this sec-
tion, the term ‘business day’ means a day on which State
offices are open for regular business.’’.
(c) USE OF AUTOMATED SYSTEM.—Section 454A, as
added by section 504(a)(2) and as amended by section 201
of this Act, is amended by adding at the end the following
new subsection:
‘‘(g) COLLECTION AND DISTRIBUTION OF SUPPORT
PAYMENTS.—
‘‘(1) IN
GENERAL.—The State shall use the
automated system required by this section, to the
maximum extent feasible, to assist and facilitate the
collection and disbursement of support payments
through the State disbursement unit operated under
section 454B, through the performance of functions,
including, at a minimum—
‘‘(A) transmission of orders and notices to
employers (and other debtors) for the withhold-
ing of wages and other income—
‘‘(i) within 2 business days after re-
ceipt of notice of, and the income source
subject to, such withholding from a court,
another State, an employer, the Federal
Parent Locator Service, or another source
recognized by the State; and
‘‘(ii) using uniform formats prescribed
by the Secretary;
‘‘(B) ongoing monitoring to promptly iden-
tify failures to make timely payment of support;
and
‘‘(C) automatic use of enforcement proce-
dures (including procedures authorized pursu-
ant to section 466(c)) if payments are not time-
ly made.
‘‘(2) BUSINESS
DAY
DEFINED.—As used in
paragraph (1), the term ‘business day’ means a day
on which State offices are open for regular busi-
ness.’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall become effective on October 1, 1998.
(2) LIMITED EXCEPTION TO UNIT HANDLING
PAYMENTS.—Notwithstanding section 454B(b)(1) of
the Social Security Act, as added by this section,
any State which, as of the date of the enactment of
this Act, processes the receipt of child support pay-
ments through local courts, and, as of March 21,
1996, such courts were not funded under part D of
title IV of the Social Security Act, may, at the op-
tion of the State, continue to process through Sep-
tember 30, 1999, such payments through such
courts as processed such payments on or before such
date of enactment.
SEC. 203. STATE DIRECTORY OF NEW HIRES.
(a) STATE PLAN REQUIREMENT.—Section 454 (42
U.S.C. 654), as amended by sections 101(b), 103(a) and
202(a) of this Act, is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(26);
(2) by striking the period at the end of para-
graph (27) and inserting ‘‘; and’’; and
(3) by adding after paragraph (27) the follow-
ing new paragraph:
‘‘(28) provide that, on and after October 1,
1997, the State will operate a State Directory of
New Hires in accordance with section 453A.’’.
(b) STATE DIRECTORY OF NEW HIRES.—Part D of
title IV (42 U.S.C. 651–669) is amended by inserting
after section 453 the following new section:
‘‘SEC. 453A. STATE DIRECTORY OF NEW HIRES.
‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—
‘‘(A) REQUIREMENT
FOR
STATES
THAT
HAVE NO DIRECTORY.—Except as provided in
subparagraph (B), not later than October 1,
1997, each State shall establish an automated
directory (to be known as the ‘State Directory
of New Hires’) which shall contain information
supplied in accordance with subsection (b) by
employers on each newly hired employee.
‘‘(B) STATES WITH NEW HIRE REPORTING
IN EXISTENCE.—A State which has a new hire
reporting law in existence on the date of the en-
actment of this section may continue to operate
under the State law, but the State must meet
the requirements of subsection (g)(2) not later
than October 1, 1997, and the requirements of
this section (other than subsection (g)(2)) not
later than October 1, 1998.
‘‘(2) DEFINITIONS.—As used in this section:
‘‘(A) EMPLOYEE.—The term ‘employee’—
‘‘(i) means an individual who is an
employee within the meaning of chapter 24
of the Internal Revenue Code of 1986; and
‘‘(ii) does not include an employee of
a Federal or State agency performing in-
telligence or counterintelligence functions,
if the head of such agency has determined
that reporting pursuant to paragraph (1)
with respect to the employee could endan-
ger the safety of the employee or com-
promise an ongoing investigation or intel-
ligence mission.
‘‘(B) EMPLOYER.—
‘‘(i) IN
GENERAL.—The term ‘em-
ployer’ has the meaning given such term in
section 3401(d) of the Internal Revenue
Code of 1986 and includes any govern-
mental entity and any labor organization.
‘‘(ii) 
LABOR
ORGANIZATION.—The
term ‘labor organization’ shall have the
meaning given such term in section 2(5) of
the National Labor Relations Act, and in-
cludes any entity (also known as a ‘hiring
hall’) which is used by the organization
and an employer to carry out requirements
described in section 8(f)(3) of such Act of
an agreement between the organization
and the employer.
‘‘(b) EMPLOYER INFORMATION.—
‘‘(1) REPORTING REQUIREMENT.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraphs (B) and (C), each employer shall
furnish to the Directory of New Hires of the
State in which a newly hired employee works, a
report that contains the name, address, and so-
cial security number of the employee, and the
name and address of, and identifying number
assigned under section 6109 of the Internal
Revenue Code of 1986 to, the employer.
‘‘(B) MULTISTATE EMPLOYERS.—An em-
ployer that has employees who are employed in
2 or more States and that transmits reports
magnetically or electronically may comply with
subparagraph (A) by designating 1 State in
which such employer has employees to which
the employer will transmit the report described
in subparagraph (A), and transmitting such re-
port to such State. Any employer that transmits
reports pursuant to this subparagraph shall no-
tify the Secretary in writing as to which State
such employer designates for the purpose of
sending reports.
‘‘(C) FEDERAL
GOVERNMENT
EMPLOY-
ERS.—Any department, agency, or instrumen-
tality of the United States shall comply with
subparagraph (A) by transmitting the report
described in subparagraph (A) to the National
Directory of New Hires established pursuant to
section 453.
‘‘(2) TIMING
OF
REPORT.—Each State may
provide the time within which the report required by
paragraph (1) shall be made with respect to an em-
ployee, but such report shall be made—
‘‘(A) not later than 20 days after the date
the employer hires the employee; or
‘‘(B) in the case of an employer transmit-
ting reports magnetically or electronically, by 2
monthly transmissions (if necessary) not less
than 12 days nor more than 16 days apart.
‘‘(c) REPORTING FORMAT AND METHOD.—Each re-
port required by subsection (b) shall be made on a W–
4 form or, at the option of the employer, an equivalent
form, and may be transmitted by 1st class mail, magneti-
cally, or electronically.
‘‘(d) CIVIL MONEY PENALTIES ON NONCOMPLYING
EMPLOYERS.—The State shall have the option to set a
State civil money penalty which shall be less than—
‘‘(1) $25; or
‘‘(2) $500 if, under State law, the failure is the
result of a conspiracy between the employer and the
employee to not supply the required report or to
supply a false or incomplete report.
‘‘(e) ENTRY OF EMPLOYER INFORMATION.—Infor-
mation shall be entered into the data base maintained by
the State Directory of New Hires within 5 business days
of receipt from an employer pursuant to subsection (b).
‘‘(f) INFORMATION COMPARISONS.—
‘‘(1) IN
GENERAL.—Not later than May 1,
1998, an agency designated by the State shall, di-
rectly or by contract, conduct automated compari-
sons of the social security numbers reported by em-
ployers pursuant to subsection (b) and the social se-
curity numbers appearing in the records of the State
case registry for cases being enforced under the
State plan.
‘‘(2) NOTICE OF MATCH.—When an information
comparison conducted under paragraph (1) reveals a
match with respect to the social security number of
an individual required to provide support under a
support order, the State Directory of New Hires
shall provide the agency administering the State
plan approved under this part of the appropriate
State with the name, address, and social security
number of the employee to whom the social security
number is assigned, and the name and address of,
and identifying number assigned under section 6109
of the Internal Revenue Code of 1986 to, the em-
ployer.
‘‘(g) TRANSMISSION OF INFORMATION.—
‘‘(1) TRANSMISSION
OF
WAGE
WITHHOLDING
NOTICES TO EMPLOYERS.—Within 2 business days
after the date information regarding a newly hired
employee is entered into the State Directory of New
Hires, the State agency enforcing the employee’s
child support obligation shall transmit a notice to
the employer of the employee directing the employer
to withhold from the wages of the employee an
amount equal to the monthly (or other periodic)
child support obligation (including any past due sup-
port obligation) of the employee, unless the employ-
ee’s wages are not subject to withholding pursuant
to section 466(b)(3).
‘‘(2) TRANSMISSIONS TO THE NATIONAL DIREC-
TORY OF NEW HIRES.—
‘‘(A) NEW HIRE INFORMATION.—Within 3
business days after the date information re-
garding a newly hired employee is entered into
the State Directory of New Hires, the State Di-
rectory of New Hires shall furnish the informa-
tion to the National Directory of New Hires.
‘‘(B) WAGE
AND
UNEMPLOYMENT
COM-
PENSATION
INFORMATION.—The State Direc-
tory of New Hires shall, on a quarterly basis,
furnish to the National Directory of New Hires
extracts of the reports required under section
303(a)(6) to be made to the Secretary of Labor
concerning the wages and unemployment com-
pensation paid to individuals, by such dates, in
such format, and containing such information
as the Secretary of Health and Human Services
shall specify in regulations.
‘‘(3) BUSINESS DAY DEFINED.—As used in this
subsection, the term ‘business day’ means a day on
which State offices are open for regular business.
‘‘(h) OTHER USES OF NEW HIRE INFORMATION.—
‘‘(1) LOCATION
OF
CHILD
SUPPORT
OBLI-
GORS.—The agency administering the State plan ap-
proved under this part shall use information received
pursuant to subsection (f)(2) to locate individuals
for purposes of establishing paternity and establish-
ing, modifying, and enforcing child support obliga-
tions.
‘‘(2) VERIFICATION OF ELIGIBILITY FOR CER-
TAIN
PROGRAMS.—A State agency responsible for
administering a program specified in section 1137(b)
shall have access to information reported by employ-
ers pursuant to subsection (b) of this section for
purposes of verifying eligibility for the program.
‘‘(3) ADMINISTRATION OF EMPLOYMENT SECU-
RITY AND WORKERS’ COMPENSATION.—State agen-
cies operating employment security and workers’
compensation programs shall have access to informa-
tion reported by employers pursuant to subsection
(b) for the purposes of administering such pro-
grams.’’.
(c) 
QUARTERLY
WAGE
REPORTING.—Section
1137(a)(3) (42 U.S.C. 1320b–7(a)(3)) is amended—
(1) by inserting ‘‘(including State and local gov-
ernmental entities and labor organizations (as de-
fined in section 453A(a)(2)(B)(iii))’’ after ‘‘employ-
ers’’; and
(2) by inserting ‘‘, and except that no report
shall be filed with respect to an employee of a State
or local agency performing intelligence or counter-
intelligence functions, if the head of such agency has
determined that filing such a report could endanger
the safety of the employee or compromise an ongo-
ing investigation or intelligence mission’’ after
‘‘paragraph (2)’’.
SEC. 204. AMENDMENTS CONCERNING INCOME WITHHOLD-
ING.
(a) MANDATORY INCOME WITHHOLDING.—
(1) 
IN
GENERAL.—Section 
466(a)(1) 
(42
U.S.C. 666(a)(1)) is amended to read as follows:
‘‘(1)(A) Procedures described in subsection (b)
for the withholding from income of amounts payable
as support in cases subject to enforcement under the
State plan.
‘‘(B) Procedures under which the wages of a
person with a support obligation imposed by a sup-
port order issued (or modified) in the State before
October 1, 1996, if not otherwise subject to with-
holding under subsection (b), shall become subject to
withholding as provided in subsection (b) if arrear-
ages occur, without the need for a judicial or admin-
istrative hearing.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 466(b) (42 U.S.C. 666(b)) is
amended in the matter preceding paragraph
(1), by striking ‘‘subsection (a)(1)’’ and insert-
ing ‘‘subsection (a)(1)(A)’’.
(B) 
Section 
466(b)(4) 
(42 
U.S.C.
666(b)(4)) is amended to read as follows:
‘‘(4)(A) Such withholding must be carried out
in full compliance with all procedural due process re-
quirements of the State, and the State must send
notice to each noncustodial parent to whom para-
graph (1) applies—
‘‘(i) that the withholding has commenced;
and
‘‘(ii) of the procedures to follow if the non-
custodial parent desires to contest such with-
holding on the grounds that the withholding or
the amount withheld is improper due to a mis-
take of fact.
‘‘(B) The notice under subparagraph (A) of this
paragraph shall include the information provided to
the employer under paragraph (6)(A).’’.
(C) 
Section 
466(b)(5) 
(42 
U.S.C.
666(b)(5)) is amended by striking all that fol-
lows ‘‘administered by’’ and inserting ‘‘the
State through the State disbursement unit es-
tablished pursuant to section 454B, in accord-
ance with the requirements of section 454B.’’.
(D) Section 466(b)(6)(A) (42 U.S.C.
666(b)(6)(A)) is amended—
(i) in clause (i), by striking ‘‘to the
appropriate agency’’ and all that follows
and inserting ‘‘to the State disbursement
unit within 5 business days after the date
the amount would (but for this subsection)
have been paid or credited to the employee,
for distribution in accordance with this
part. The employer shall comply with the
procedural rules relating to income with-
holding of the State in which the employee
works, regardless of the State where the
notice originates.’’.
(ii) in clause (ii), by inserting ‘‘be in
a standard format prescribed by the Sec-
retary, and’’ after ‘‘shall’’; and
(iii) by adding at the end the follow-
ing new clause:
‘‘(iii) As used in this subparagraph, the term
‘business day’ means a day on which State offices
are open for regular business.’’.
(E) Section 466(b)(6)(D) (42 U.S.C.
666(b)(6)(D)) is amended by striking ‘‘any em-
ployer’’ and all that follows and inserting ‘‘any
employer who—
‘‘(i) discharges from employment, refuses
to employ, or takes disciplinary action against
any noncustodial parent subject to wage with-
holding required by this subsection because of
the existence of such withholding and the obli-
gations or additional obligations which it im-
poses upon the employer; or
‘‘(ii) fails to withhold support from wages
or to pay such amounts to the State disburse-
ment unit in accordance with this subsection.’’.
(F) Section 466(b) (42 U.S.C. 666(b)) is
amended by adding at the end the following
new paragraph:
‘‘(11) Procedures under which the agency ad-
ministering the State plan approved under this part
may execute a withholding order without advance
notice to the obligor, including issuing the withhold-
ing order through electronic means.’’.
order or notice under the laws of the State in which
the obligor works.
SEC. 302. IMPROVEMENTS TO FULL FAITH AND CREDIT
FOR CHILD SUPPORT ORDERS.
Section 1738B of title 28, United States Code, is
amended—
(1) in subsection (a)(2), by striking ‘‘subsection
(e)’’ and inserting ‘‘subsections (e), (f), and (i)’’;
(2) in subsection (b), by inserting after the 2nd
undesignated paragraph the following:
‘‘ ‘child’s home State’ means the State in which
a child lived with a parent or a person acting as par-
ent for at least 6 consecutive months immediately
preceding the time of filing of a petition or com-
parable pleading for support and, if a child is less
than 6 months old, the State in which the child lived
from birth with any of them. A period of temporary
absence of any of them is counted as part of the 6-
month period.’’;
(3) in subsection (c), by inserting ‘‘by a court
of a State’’ before ‘‘is made’’;
(4) in subsection (c)(1), by inserting ‘‘and sub-
sections (e), (f), and (g)’’ after ‘‘located’’;
(5) in subsection (d)—