Child Support Improvement Act of 2004

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

108th CONGRESS
2d Session
S. 2194

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

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

March 11, 2004

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

_______________________________________________________________________

A BILL

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

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Child Support Improvement Act of
2004''.

SEC. 2. TABLE OF CONTENTS.

The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--DISTRIBUTION OF CHILD SUPPORT

Sec. 101. Distribution of child support collected by States on behalf
of children receiving certain welfare
benefits.
TITLE II--EXPANDED ENFORCEMENT

Sec. 201. Decrease in amount of child support arrearage triggering
passport denial.
Sec. 202. Use of tax refund intercept program to collect past-due child
support on behalf of children who are not
minors.
Sec. 203. Garnishment of compensation paid to veterans for service-
connected disabilities in order to enforce
child support obligations.
Sec. 204. Improved interstate enforcement.
TITLE III--MISCELLANEOUS

Sec. 301. Report on undistributed child support payments.
Sec. 302. Use of new hire information to assist in administration of
unemployment compensation programs.
Sec. 303. Improving Federal debt collection practices.
Sec. 304. Maintenance of technical assistance funding.
Sec. 305. Maintenance of Federal parent locator service funding.
Sec. 306. Electronic disbursement of child support payments to
families.
Sec. 307. Optional expansion of State disbursement unit to create a
centralized payment location for all child
support wage withholding.
Sec. 308. Implementation of medical support performance measure.
Sec. 309. Authority to continue State program for monitoring and
enforcement of child support orders.
TITLE IV--EFFECTIVE DATE

Sec. 401. Effective date.

TITLE I--DISTRIBUTION OF CHILD SUPPORT

SEC. 101. DISTRIBUTION OF CHILD SUPPORT COLLECTED BY STATES ON BEHALF
OF CHILDREN RECEIVING CERTAIN WELFARE BENEFITS.

(a) Modification of Rule Requiring Assignment of Support Rights as
a Condition of Receiving TANF.--Section 408(a)(3) of the Social
Security Act (42 U.S.C. 608(a)(3)) is amended to read as follows:
``(3) No assistance for families not assigning certain
support rights to the state.--A State to which a grant is made
under section 403 shall require, as a condition of paying
assistance to a family under the State program funded under
this part, that a member of the family assign to the State any
right the family member may have (on behalf of the family
member or of any other person for whom the family member has
applied for or is receiving such assistance) to support from
any other person, not exceeding the total amount of assistance
so paid to the family, which accrues during the period that the
family receives assistance under the program.''.
(b) Increasing Child Support Payments to Families and Simplifying
Child Support Distribution Rules.--
(1) Distribution rules.--
(A) In general.--Section 457(a) of the Social
Security Act (42 U.S.C. 657(a)) is amended to read as
follows:
``(a) In General.--Subject to subsections (e) and (f), the amounts
collected on behalf of a family as support by a State pursuant to a
plan approved under this part shall be distributed as follows:
``(1) Families receiving assistance.--In the case of a
family receiving assistance from the State, the State shall--
``(A) pay to the Federal Government the Federal
share of the amount collected, subject to paragraph
(3)(A);
``(B) retain, or pay to the family, the State share
of the amount collected, subject to paragraph (3)(B);
and
``(C) pay to the family any remaining amount.
``(2) Families that formerly received assistance.--In the
case of a family that formerly received assistance from the
State:
``(A) Current support.--To the extent that the
amount collected does not exceed the current support
amount, the State shall pay the amount to the family.
``(B) Arrearages.--Except as otherwise provided in
an election made under 454(34), to the extent that the
amount collected exceeds the current support amount,
the State--
``(i) shall first pay to the family the
excess amount, to the extent necessary to
satisfy support arrearages not assigned
pursuant to section 408(a)(3);
``(ii) if the amount collected exceeds the
amount required to be paid to the family under
clause (i), shall--
``(I) pay to the Federal
Government, the Federal share of the
excess amount described in this clause,
subject to paragraph (3)(A); and
``(II) retain, or pay to the
family, the State share of the excess
amount described in this clause,
subject to paragraph (3)(B); and
``(iii) shall pay to the family any
remaining amount.
``(3) Limitations.--
``(A) Federal reimbursements.--The total of the
amounts paid by the State to the Federal Government
under paragraphs (1) and (2) of this subsection with
respect to a family shall not exceed the Federal share
of the amount assigned with respect to the family
pursuant to section 408(a)(3).
``(B) State reimbursements.--The total of the
amounts retained by the State under paragraphs (1) and
(2) of this subsection with respect to a family shall not exceed the
State share of the amount assigned with respect to the family pursuant
to section 408(a)(3).
``(4) Families that never received assistance.--In the case
of any other family, the State shall pay the amount collected
to the family.
``(5) Families under certain agreements.--Notwithstanding
paragraphs (1) through (3), in the case of an amount collected
for a family in accordance with a cooperative agreement under
section 454(33), the State shall distribute the amount
collected pursuant to the terms of the agreement.
``(6) State financing options.--To the extent that the
State's share of the amount payable to a family pursuant to
paragraph (2)(B) of this subsection exceeds the amount that the
State estimates (under procedures approved by the Secretary)
would have been payable to the family pursuant to former
section 457(a)(2)(B) (as in effect for the State immediately
before the date this subsection first applies to the State) if
such former section had remained in effect, the State may elect
to have the payment considered a qualified State expenditure
for purposes of section 409(a)(7).
``(7) State option to pass through additional support with
federal financial participation.--
``(A) Families that formerly received assistance.--
Notwithstanding paragraph (2), a State shall not be
required to pay to the Federal Government the Federal
share of an amount collected on behalf of a family that
formerly received assistance from the State to the
extent that the State pays the amount to the family.
``(B) Families that currently receive assistance.--
``(i) In general.--Notwithstanding
paragraph (1), in the case of a family that
receives assistance from the State, a State
shall not be required to pay to the Federal
Government the Federal share of the excepted
portion (as defined in clause (ii)) of any
amount collected on behalf of such family
during a month to the extent that--
``(I) the State pays the excepted
portion to the family; and
``(II) the excepted portion is
disregarded in determining the amount
and type of assistance provided to the
family under such program.
``(ii) Excepted portion defined.--For
purposes of this subparagraph, the term
`excepted portion' means that portion of the
amount collected on behalf of a family during a
month that does not exceed $400 per month, or
in the case of a family that includes 2 or more
children, that does not exceed an amount
established by the State that is not more than
$600 per month.
``(8) States with demonstration waivers.--Notwithstanding
the preceding paragraphs, in the case of a State that, on the
date of enactment of this paragraph, has had in effect since
October 1, 1997, a waiver under section 1115 permitting pass
through payments of child support collections--
``(A) the State may continue to distribute such
payments to families without regard to the expiration
date of such waiver; and
``(B) the requirement under paragraph (1) to pay to
the Federal Government the Federal share of the amount
collected on behalf of a family shall not apply to the
extent that--
``(i) the State distributes such amount to
the family; and
``(ii) such amount is disregarded in
determining the amount and type of assistance
paid to the family.''.
(B) State plan to include election as to which
rules to apply in distributing child support arrearages
collected on behalf of families formerly receiving
assistance.--Section 454 of the Social Security Act (42
U.S.C. 654) is amended--
(i) by striking ``and'' at the end of
paragraph (32);
(ii) by striking the period at the end of
paragraph (33) and inserting ``; and''; and
(iii) by inserting after paragraph (33) the
following:
``(34) include an election by the State to apply section
457(a)(2)(B) of this Act or former section 457(a)(2)(B) of this
Act (as in effect for the State immediately before the date
this paragraph first applies to the State) to the distribution
of the amounts which are the subject of such sections, and for
so long as the State elects to so apply such former section,
the amendments made by subsection (e) of section 101 of the
Child Support Improvement Act of 2004 shall not apply with
respect to the State, notwithstanding subsection (f)(1) of such
section 101.''.
(C) Approval of estimation procedures.--Not later
than the date that is 6 months after the date of
enactment of this Act, the Secretary of Health and
Human Services, in consultation with the States (as
defined for purposes of part D of title IV of the
Social Security Act), shall establish the procedures to
be used to make the estimate described in section
457(a)(6) of such Act.
(2) Current support amount defined.--Section 457(c) of the
Social Security Act (42 U.S.C. 657(c)) is amended by adding at
the end the following:
``(5) Current support amount.--The term `current support
amount' means, with respect to amounts collected as support on
behalf of a family, the amount designated as the monthly
support obligation of the noncustodial parent in the order
requiring the support.''.
(c) Ban on Recovery of Medicaid Costs for Certain Births.--Section
454 of the Social Security Act (42 U.S.C. 654), as amended by
subsection (b)(1)(B), is amended--
(1) by striking ``and'' at the end of paragraph (33);
(2) by striking the period at the end of paragraph (34) and
inserting ``; and''; and
(3) by inserting after paragraph (34) the following:
``(35) provide that the State shall not use the State
program operated under this part to collect any amount owed to
the State by reason of costs incurred under the State plan
approved under title XIX for the birth of a child for whom
support rights have been assigned pursuant to section
408(a)(3), 471(a)(17), or 1912.''.
(d) State Option To Discontinue Older Support Assignments.--Section
457(b) of the Social Security Act (42 U.S.C. 657(b)) is amended to read
as follows:
``(b) Continuation of Assignments.--
``(1) State option to discontinue pre-1997 support
assignments.--
``(A) In general.--Any rights to support
obligations assigned to a State as a condition of
receiving assistance from the State under part A and in
effect on September 30, 1997 (or such earlier date on
or after August 22, 1996, as the State may choose), may
remain assigned after such date.
``(B) Distribution of amounts after assignment
discontinuation.--If a State chooses to discontinue the
assignment of a support obligation described in
subparagraph (A), the State may treat amounts collected
pursuant to such assignment as if such amounts had
never been assigned and may distribute such amounts to
the family in accordance with subsection (a)(4).
``(2) State option to discontinue post-1997 support
assignments.--
``(A) In general.--Any rights to support
obligations accruing before the date on which a family
first receives assistance under part A that are
assigned to a State under that part and in effect
before the implementation date of this section may
remain assigned after such date.
``(B) Distribution of amounts after assignment
discontinuation.--If a State chooses to discontinue the
assignment of a support obligation described in
subparagraph (A), the State may treat amounts collected
pursuant to such assignment as if such amounts had
never been assigned and may distribute such amounts to
the family in accordance with subsection (a)(4).''.
(e) Conforming Amendments.--
(1) Section 404(a) of the Social Security Act (42 U.S.C.
604(a)) is amended--
(A) by striking ``or'' at the end of paragraph (1);
(B) by striking the period at the end of paragraph
(2) and inserting ``; or''; and
(C) by adding at the end the following:
``(3) to fund payment of an amount pursuant to clause (i)
or (ii) of section 457(a)(2)(B), but only to the extent that
the State properly elects under section 457(a)(6) to use the
grant to fund the payment.''.
(2) Section 409(a)(7)(B)(i) of such Act (42 U.S.C.
609(a)(7)(B)(i)) is amended--
(A) in subclause (I)(aa), by striking
``457(a)(1)(B)'' and inserting ``457(a)(1)''; and
(B) by adding at the end the following:
``(V) Portions of certain child
support payments collected on behalf of
and distributed to families no longer
receiving assistance.--Any amount paid
by a State pursuant to clause (i) or
(ii) of section 457(a)(2)(B), but only
to the extent that the State properly
elects under section 457(a)(6) to have
the payment considered a qualified
State expenditure.''.
(3) Section 6402(c) of the Internal Revenue Code of 1986
(relating to offset of past-due support against overpayments)
is amended--
(A) in the first sentence, by striking ``the Social
Security Act.'' and inserting ``of such Act.''; and
(B) by striking the third sentence and inserting
the following: ``The Secretary shall apply a reduction
under this subsection first to an amount certified by
the State as past due support under section 464 of the
Social Security Act before any other reductions allowed
by law.''.
(f) Effective Date.--
(1) In general.--The amendments made by this section shall
take effect on October 1, 2007, and shall apply to payments
under parts A and D of title IV of the Social Security Act for
calendar quarters beginning on or after such date, and without
regard to whether regulations to implement such amendments (in
the case of State programs operated under such part D) are
promulgated by such date.
(2) State option to accelerate effective date.--A State may
elect to have the amendments made by this section apply to the
State and to amounts collected by the State and to payments
under parts A and D of title IV of the Social Security Act, on
and after such date as the State may select that is after the
date of enactment of this Act and before October 1, 2007.

TITLE II--EXPANDED ENFORCEMENT

SEC. 201. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE TRIGGERING
PASSPORT DENIAL.

(a) In General.--Section 452(k)(1) of the Social Security Act (42
U.S.C. 652(k)(1)) is amended by striking ``$5,000'' and inserting
``$2,500''.
(b) Conforming Amendment.--Section 454(31) of the Social Security
Act (42 U.S.C. 654(31)) is amended by striking ``$5,000'' and inserting
``$2,500''.

SEC. 202. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT PAST-DUE CHILD
SUPPORT ON BEHALF OF CHILDREN WHO ARE NOT MINORS.

Section 464 of the Social Security Act (42 U.S.C. 664) is amended--
(1) in subsection (a)(2)(A), by striking ``(as that term is
defined for purposes of this paragraph under subsection (c))'';
and
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by striking ``(1) Except as provided in
paragraph (2), as used in'' and inserting
``In''; and
(ii) by inserting ``(whether or not a
minor)'' after ``a child'' each place it
appears; and
(B) by striking paragraphs (2) and (3).

SEC. 203. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR SERVICE-
CONNECTED DISABILITIES IN ORDER TO ENFORCE CHILD SUPPORT
OBLIGATIONS.

Section 459(h) of the Social Security Act (42 U.S.C. 659(h)) is
amended--
(1) in paragraph (1)(A)(ii)--
(A) in subclause (IV), by striking ``or'' after the
semicolon;
(B) in subclause (V), by inserting ``or'' after the
semicolon; and
(C) by adding at the end the following:
``(VI) subject to paragraph (3),
other than periodic benefits or
payments described in subclause (V), by
the Secretary of Veterans Affairs as
compensation for a service-connected
disability paid by the Secretary to a
former member of the Armed Forces;'';
and
(2) by adding at the end the following:
``(3) Limitations with respect to compensation paid to
veterans for service-connected disabilities.--
``(A) Alimony and child support.--Subject to
subparagraph (B), compensation described in paragraph
(1)(A)(ii)(VI) shall not be subject to withholding
pursuant to this section--
``(i) for payment of alimony; or
``(ii) for payment of child support if the
individual is fewer than 60 days in arrears in
payment of the support.
``(B) Limitation.--Not more than 50 percent of any
payment of compensation described in subparagraph (A)
may be withheld pursuant to this section.''.

SEC. 204. IMPROVED INTERSTATE ENFORCEMENT.

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

TITLE III--MISCELLANEOUS

SEC. 301. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

Not later than 6 months after the date of enactment of this Act,
the Secretary of Health and Human Services shall submit to the
Committee on Finance of the Senate and the Committee on Ways and Means
of the House of Representatives a report on the procedures that the
States use generally to locate custodial parents for whom child support
has been collected but not yet distributed. The report shall include--
(1) an estimate of the total amount of undistributed child
support;
(2) an estimate of the average length of time it takes
undistributed child support to be identified and distributed;
and
(3) recommendations--
(A) as to whether additional procedures, including
incentives, should be established at the Federal or
State level to--
(i) reduce the backlog of undistributed
child support;
(ii) close cases in compliance with
regulatory standards in which the custodial
parent cannot be located;
(iii) expedite the payment of undistributed
child support; and
(iv) establish measures to help manage the
growth in the level of undistributed child
support; and
(B) for measures to evaluate State performance with
respect to undistributed child support payments.

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

(a) In General.--Section 453(j) of the Social Security Act (42
U.S.C. 653(j)) is amended by adding at the end the following:
``(7) Information comparisons and disclosure to assist in
administration of unemployment compensation programs.--
``(A) In general.--If a State agency responsible
for the administration of an unemployment compensation
program under Federal or State law transmits to the
Secretary the name and social security account number
of an individual, the Secretary shall, if the
information in the National Directory of New Hires
indicates that the individual may be employed, disclose
to the State agency the name, address, and employer
identification number of any putative employer of the
individual, subject to this paragraph.
``(B) Condition on disclosure.--The Secretary shall
make a disclosure under subparagraph (A) only to the
extent that the Secretary determines that the
disclosure would not interfere with the effective
operation of the program under this part.
``(C) Use of information.--A State agency may use
information provided under this paragraph only for
purposes of administering a program referred to in
subparagraph (A).''.
(b) Effective Date.--The amendment made by this section shall take
effect on October 1, 2001.

SEC. 303. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

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

SEC. 304. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

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

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

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

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

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

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

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

SEC. 308. IMPLEMENTATION OF MEDICAL SUPPORT PERFORMANCE MEASURE.

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

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

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

TITLE IV--EFFECTIVE DATE

SEC. 401. EFFECTIVE DATE.

(a) In General.--Except as otherwise provided in this Act, and
subject to subsection (b), this Act and the amendments made by this Act
shall take effect on October 1, 2004, and shall apply to payments under
part D of title IV of the Social Security Act for calendar quarters
beginning on or after such date.
(b) Delay Permitted if State Legislation Required.--In the case of
a State plan approved under section 454 of the Social Security Act (42
U.S.C. 654) which requires State legislation (other than legislation
appropriating funds) in order for the plan to meet the additional
requirements imposed by this Act or the amendments made by this Act,
the State plan shall not be regarded as failing to comply with the
additional requirements solely on the basis of the failure of the plan
to meet the additional requirements before the first day of the first
calendar quarter beginning after the close of the first regular session
of the State legislature that begins after the date of the enactment of
this Act. For purposes of the preceding sentence, in the case of a
State that has a 2-year legislative session, each year of the session
shall be considered to be a separate regular session of the State
legislature.
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