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NPRM: $50 Pass-through; Support Guidelines; Genetic Testing; Paternity Establishment

AT-89-17

Published: September 13, 1989
Information About:
State/Local Child Support Agencies
Topics:
Case Management, Paternity Establishment
Types:
Policy, Action Transmittals (AT), Regulations
Tags:
Child Support Guidelines, Pass-through/Family Distribution

PROPOSED REGULATION

ACTION TRANSMITTAL

OCSE-AT-89-17

September 13, 1989

TO: STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS

SUBJECT:$50 Pass-through; Mandatory Support Guidelines; Mandatory Genetic Testing; Paternity Establishment; Laboratory Testing

ATTACHMENT:The attached proposed regulation implements the requirements of sections 102, 103(a) and (b), 111(b) and (e) and 112 of the Family Support Act of 1988 (P.L. 100-485) by revising current regulations to require payment to the family of the first $50 of child support payments for each month which were made in the month when due; to require that State guidelines be used as a rebuttable presumption of support levels; to require the child and all other parties in a contested paternity case to submit to genetic testing upon request; to specify that the requirement for a State law permitting paternity establishment up to a child's eighteenth birthday also applies to any child for whom a paternity action was previously dismissed under a statute of limitations of less than 18 years; and to provide 90 percent Federal matching for laboratory costs incurred in determining paternity.

REGULATION 45 CFR Parts 302, 303, and 304 REFERENCE:

COMMENT Consideration will be given to written comments

PERIOD:and suggestions received no later than November 13, 1989. Address comments to: Office of Child Support Enforcement, Department of Health and Human Services, 370 L'Enfant Promenade, S.W., Washington, D.C. 20447, Attention: Director, Policy and Planning Division.

INQUIRIES TO: OCSE Regional Representatives

Robert C. Harris

Associate Deputy Director

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Child Support Enforcement

45 CFR Parts 302, 303, and 304

RIN 0970-AA64

Child Support Enforcement Program: $50 Pass-Through; Mandatory Support Guidelines; Mandatory Genetic Testing; Paternity Establishment; Laboratory Testing

AGENCY: Office of Child Support Enforcement (OCSE), HHS.

ACTION: Notice of proposed rulemaking.

SUMMARY: These proposed rules would implement five provisions of the Family Support Act of 1988 (Pub. L. 100-485) signed by the President October 13, 1988, which amend title IV-D of the Social Security Act (the Act), the authority for the child support enforcement program. The provisions amend the Act to require payment to the family and disregard for purposes of eligibility for Aid to Families with Dependent Children (AFDC), the first $50 of child support payments for each month which were made in the month when due; to require that State guidelines be used as a rebuttable presumption of support levels; to require the child and all other parties in a contested paternity case to submit to genetic testing upon request; to specify that the requirement for a State law permitting paternity establishment up to a child's eighteenth birthday also applies to any child for whom a paternity action was previously dismissed under a statute of limitations of less than 18 years; and to provide 90 percent Federal matching for laboratory costs incurred in determining paternity.

DATES: Consideration will be given to comments received by November 13, 1989. It should be noted that the statutory effective dates of certain statutory provisions occur before the end of the comment period on these proposed rules. The statutory provisions are effective as prescribed in the statute regardless of the absence of final implementing regulations.

ADDRESS: Address comments to: Director, Office of Child Support Enforcement, Department of Health and Human Services, 370 L'Enfant Promenade SW., Washington, DC 20447, Attention: Director, Policy and Planning Division. Comments will be available for public inspection Monday through Friday, 8:30 a.m. to 5:00 p.m., on the 4th floor of the Department's office at the above address.

FOR FURTHER INFORMATION CONTACT: Policy Branch, OCSE specifically:

Andrew Hagan (202) 252-5375- $50 pass-through, 90% Federal matching for laboratory costs, and mandatory genetic testing

Craig Hathaway (202) 252-5367- Mandatory guidelines and paternity

establishment until age 18.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

Public reporting burden for the collection of information requirement at 45 CFR 302.58(g) is estimated to be a one-time burden of 20 hours to develop criteria to determine when application of guidelines would be inappropriate. Send comments regarding this burden estimate or any other aspect of this collection of information including suggestions for reducing this burden to the Office of Child Support Enforcement, Family Support Administration, 370 L'Enfant Promenade SW., Washington DC 20447; and to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Washington, DC 20503. OMB has already approved the requirement for State notice to employers concerning wage withholding under 45 CFR 303.100(d) and the requirement for guidelines for setting support awards under 45 CFR 302.58 (OMB approval number O970-0051).

Statutory Authority

These proposed rules are published under the authority of the following provisions of the Act, as amended by Public Law 100-485: Section 457(b)(1) (with respect to the $50 pass-through), section 467(b) (with respect to mandatory support guidelines), section 466(a)(5) (with respect to State laws and procedures requiring parties to submit to genetic testing and State law and procedures for establishment of paternity), and section 455(a)(1) (with respect to 90 percent matching for laboratory testing). The proposed rules are also published under the general authority of section 1102 of the Act, which requires the Secretary to publish regulations that may be necessary for the efficient administration of the functions for which he is responsible under the Act.

Background and Description of Regulatory Provisions

1. Pass-through of Child Support Payments

Section 2640 of the Deficit Reduction Act (Pub. L. 98-369) amended section 457(b)(1) of the Act to require States to pay the first $50 of such amounts collected periodically which represent the monthly support obligation to the AFDC family. The statute also amended section 402(a)(8)(A)(vi) of the Act to require States to disregard "the first $50 of any child support payments received in such month" when determining AFDC eligibility and the amount of the AFDC payment. These changes resulted in AFDC families having up to $50 of additional disposable income each month.

Section 102 of Public Law 100-485 amends sections 402(a)(8) (A)(vi) and 457(b)(1) of the Act, effective January 1, 1989, to clarify that the first $50 of support payments received in a month which was due for a prior month must be paid to the family if paid by the absent parent in the month when due. Under the new law, the AFDC family may not be denied the $50 payment when the absent parent pays support on-time but there is a delay in transmitting the payment from the point of collection to the agency responsible for distribution.

This is consistent with regulations at 45 CFR 302.51(a) (final regulations published on June 8, 1988 (53 FR 21642)), which provide that the date of collection of a child support payment for purposes of distribution is the date on which payment is received by the State IV-D agency or by the legal entity of any State or political subdivision actually making the collection, whichever is earliest. We are expanding the date of collection rule however, with respect to payments made through wage or other income withholding for the reasons noted below.

Public Law 100-485 also made significant changes in the Act affecting requirements for income withholding. Immediate income withholding is required in child support orders issued or modified on or after November 1, 1990, and other changes were made which will ensure that income withholding applies in a majority of cases in the future. (The changes to the Act as a result of Pub. L. 100-485 not addressed in this document will be regulated separately.)

From the inclusion in Public Law 100-485 of the amendments concerning the $50 pass-through, and the amendments which will result in payment cf child support through income withholding in the vast majority of cases, we conclude that the Congress' intent was to apply the $50 pass-through, after January 1, 1989, as of the date of withholding. Therefore, in any case in which an absent parent's child support payment is irrevocably withheld from his or her wages or other income in the month in which the payment was due, even where IV-D agency does not receive the payment until a later month (because the absent parent's employer or other entity withholding income did not promptly forward to the IV-D agency the support withheld), the date of collection, for distribution purposes, will be the date of the withholding. If the State's withholding law includes withholding of other income such as unemployment compensation or pension benefits, the date of collection would be the date of the withholding. In order to implement this statutory requirement, a regulatory amendment is needed to treat the date of witholding from wages or other income as the date of collection for distribution purposes. Amendments are also needed to clarify the applicability of

õ302.51(a) and to ensure reporting by employers of the date of wage withholding and appropriate information exchange in interstate cases, as follows:

Section 3O2.5l- Distribution of Support Collections

Section 302.51(a) requires support collected to be treated first as current support for the month in which it was collectedand excess amounts to be applied to arrearages. It also defines the date of collection for distribution purposes, effective June 9, 1988, as the date on which payment is received by the IV-D agency or the legal entity of any State or political subdivision actually making the collection, whichever is earliest. Finally, õ302.51(a) requires that, in any case in which collections are received by an entity other than the agency responsible for final distribution, the entity must transmit the collection within 10 days of receipt.

There appears to be some misunderstanding about whether

õ302.51(a) applies for distribution purposes in all IV-D cases and, specifically, whether the definition of the date of collection, which determines how amounts collected must be distributed, must be used in determining the appropriate distribution in all IV-D cases, e.g., AFDC and non-AFDC cases, intra- and interstate cases. In addition, some States have asked if the clarification in Public Law 100-485 with respect to payment of the $50 pass-through when payments are made in the month when due applies only to the $50 payment or to distribution of all collections in IV-D cases under õ302.51.

In response to these concerns, accurate distribution in

IV-D cases depends on the date of collection. Therefore, when payments which were made in the month when due are received in a later month by the IV-D agency responsible for final distribution that agency must recompute distribution of all collections for the month in which payments were made on-time, not just the $50 payment.

In response to these concerns, we are revising õ302.51(a) to clarify under the proposed first sentence that, for purposes of distribution in all IV-D cases, amounts collected shall be treated first as payment on the required support obligation for the month in which the support was collected and if any amounts are collected which are in excess of such amounts, these excess amounts shall be treated as amounts which represent payment on the required support obligation for previous months.

For purposes of distribution and redetermining eligibility in AFDC cases, States are required, in OCSE-AT-76-5 (March 11, 1976), to convert to a monthly amount support that is ordered to be paid more frequently than monthly. The proposed second sentence in õ302.51(a) would indicate that, in AFDC cases in which conversion to a monthly amount is necessary, the IV-D agency may round down the converted amount to the next lower whole dollar amount for the purpose of distribution under õ302.51. This is consistent with the method for determining the amount of the assistance payment in 45 CFR 233.20(a)(2)(iv). Conversion is not necessary in other IV-D cases.

We propose to clarify that the third sentence of õ302.51(a) applies in all IV-D cases and to address the date of collection when payments are made through wage or income withholding. Therefore, the third sentence of 45 CFR 302.51(a) would define the date of collection for distribution purposes, effective June 9, 1988, for all IV-D collections, other than those payments made through wage or other income withholding, as the date on which the payment is received by the IV-D agency or the legal entity ofany State or political subdivision actually making the collection, whichever is earliest. Under a new fourth sentence, with respect to payments made through wage or other income withholding and received by the IV-D agency on or after January 1, 1989, the date of collection for distribution purposes would be the date the wages or other income are withheld to meet the support obligation. The last sentence of 45 CFR 302.51(a) would continue to indicate, until the effective date of distribution timeframes regulations published in response to the Family Support Act of 1988, that in any case in which collections are received by an entity other than the agency responsible for final distribution under this section, the entity must transmit the collection within 10 days of receipt.

Section 303.7 Provision of Services in Interstate IV-D Cases

We propose to amend the regulation governing provision of services in interstate IV-D cases (which was published as a final rule on February 22, 1988 (53 FR 5246) and amended June 9, 1988 (53 FR 21642)) to require under õ303.7(c)(7)(iv) the responding State IV-D agency to forward support payments to the location specified by the initiating State IV-D agency no later than 15 calendar days from the date of initial receipt in the responding State. This will clarify that payments must be forwarded to the initiating State timely and will eliminate delays when each entity through which a collection must be sent holds the collection for no legitimate reason. We would point out that this does not include, in wage withholding cases, the time between when the wages are withheld and when they are sent by the employer to the State. The 15-day clock starts only upon receipt by a legal entity of the State. In addition, paragraph (c)(7)(iv) will be revised to require the responding State IV-D agency to inform the initiating State IV-D agency of the date of collection as defined under õ301.51(a).

Section 303.100- Procedures for Wage or Income Witholding

We propose to amend õ303.100 by revising paragraph (d)(1)(ii) to require that the IV-D agency's notice to employers concerning wage withholding state that employers must report to the IV-D agency, or such other individual or entity as the State may direct, at the time they forward support withheld from wages or other income, the date such amounts were withheld from the absent parent's wages.

2. State Guidelines for Child Support Award Amounts

Section 18 of the Child Support Enforcement Amendments of 1984 (Pub L. 98-378) amended title IV-D of the Act to add Section 467 requiring each State, as a condition of State IV-D plan approval, to establish guidelines for child support award amounts within the State. The State must make the guidelines available to all judges and other officials who have the power to determine awards, but the guidelines need not be binding on them.

Section 103 of Public Law 100-485 amends section 467 of the Act to delete the clause that the State guidelines need not be binding upon judges or other officials and to require that the State's guidelines be used to create a rebuttable presumption in any judicial or administrative proceeding for the award of child support that the amount of the award which would result from the application of such guidelines is the correct amount of child support to be awarded. The statute further provides that a written finding or specific finding on the record that application of the guidelines would be unjust or inappropriate in a particular case, as determined under criteria established by the State, shall be sufficient to rebut the presumption in that case. The State must review the guidelines at least every four years to ensure that their application results in the determination of appropriate child support award amounts.

In response to the Child Support Enforcement Amendments of 1984, a number of States implemented mandatory guidelines rather than the advisory guidelines required under the statute. Therefore, some States may already be in compliance with the requirement in Public Law 100-485. However, the concern has been raised that some States may have implemented procedures for using guidelines which are more restrictive than the new requirements. For example, procedures requiring that guidelines be followed in setting all support awards without the possibility of rebuttal appear not to comply with the requirements of the new law. We advise States in this position that changes to their guidelines and accompanying procedures will be necessary to conform to the requirements of Public Law 100-485 unless Congress clarifies an intent to the contrary.

We propose to make the following regulatory changes in response to the requirements under section 103 of Public Law 100-485 outlined above:

Section 302.50- Support Obligations

Under current regulations at õ302.50(b)(2), when there is no court order for support, States are required to establish a support obligation, in an amount determined in writing by the

IV-D agency in accordance with a formula which meets criteria prescribed under õ302.53. We propose to replace the reference to the formula and the criteria under õ302.53 with reference to

õ302.56, Guidelines for setting child support awards. Since guidelines will eliminate the need for such a formula, this is a technical change to conform the requirements for establishing support obligations with the proposed requirement mandating the use of guidelines in setting support amounts.

Section 302.53- Formula for Determining the Amount of the Obligation

Under current regulations at õ302.53, for cases without court orders for support, States must utilize a formula in setting support amounts which takes into consideration a number of criteria. The formula must be designed to ensure that thechild benefits from the income and resources of the absent parent on an equitable basis with other minor children of the parent and must be utilized to determine the required monthly obligation, any arrearages and the amount to be paid periodically against any existing arrearages.

We are proposing to delete õ302.53 in its entirety effective October 13, 1989, to conform to the new requirement mandating the use of child support guidelines in setting all support awards. Because guidelines under õ302.56 must be used, effective October 13, 1989, in any proceeding, judicial or administrative, for the award of support, it is no longer necessary to have a separate formula for setting child support orders administratively. All decision makers will be responsible for using the State's guidelines as a rebuttable presumption of support levels in setting child support award amounts.

Section 3O2.56- Guidelines for Setting Child Support Awards

The Conference Report (Report 100-98) states that judges and other officials must use the "State's guidelines, uniformly applied, as a rebuttable presumption." Therefore, there must be one set of guidelines developed by the State and uniformly applied as a rebuttable presumption in setting all child support awards.

Paragraph (a) of 45 CFR 302.56 requires each State, effective October 1, 1987, to establish guidelines by law or by judicial or administrative action for setting child support award amounts within the State. This paragraph remains unchanged under this proposed rule. Paragraph (b) of this section requires the State to have procedures for making guidelines available to decision makers for advisory purposes. We propose to delete reference in paragraph (b) to the fact that guidelines need not be binding on decision makers because Public Law 100-485 requires that, effective October 13, 1989, guidelines be used by all decision makers as a rebuttable presumption of support levels.

We propose to revise paragraph (c) to require that at a minimum the guidelines established under paragraph (a): (1)

Take into consideration all earnings, income and resources of the absent parent; (2) be based on specific descriptive and numeric criteria and result in a computation of the support obligation (this is required under current paragraph (c)); (3) provide for coverage of the child or children's health care needs and include health insurance when available to either parent at reasonable cost as defined in õ306.51(a); and (4) apply to all child support orders issued in the State.

Recent studies estimated that there are up to 1.4 million children with no health coverage who could have received it had absent parents been instructed to include the children on available employment-based health coverage. Medical care for children without health coverage is a concern of the President. Including health coverage in State guidelines is an important step toward helping these children receive private health coverage.

Children's health coverage can be included in support orders in several ways. Either the absent parent or the custodial parent can cover children with their employment-based or other reasonably priced group coverage. If only one parent has access to employment-based coverage which would include the children, the other parent may be deemed responsible for an appropriate share of the premiums and unreimbursed health care expenses. When neither parent has access to reasonably priced private group health coverage, support orders might specify the parents' liability for health care costs incurred and include a triggering mechanism requiring coverage should it become available.

In a substantial subset of cases, employment-based or other reasonably priced group coverage that could cover the children is available to one parent, but not to the other. In such cases, guidelines would require that coverage will be awarded to the children when available to either parent at reasonable cost. We are evaluating what additional steps would help children receive health coverage under either parents' plans and policies, and welcome suggestions.

We believe that inclusion of these basic elements are essential to developing reasonable, responsible support guidelines. However, we have chosen not to prescribe to States more specific requirements at this time. We believe States are generally in a better position to determine specific considerations for families residing in their jurisdictions. We will closely monitor State guidelines and their application to assure that children's support is met adequately and equitably. If not, more specific requirements may become appropriate.

Paragraph (d) continues to require states to include a copy of the guidelines in the State plan. A new paragraph (e) would be added to require that each State review its guidelines at least once every four years to ensure that their application results in the determination of appropriate child support award amounts, as required in section 103(b) of Public Law 100-485. Congress included this requirement to ensure that guidelines continue to remain equitable over time. A four-year cycle for review will protect the needs of the children for whom support is ordered, guarantee the validity of the guidelines and provide States the opportunity to update the guidelines to meet changing economic and social conditions.

Proposed paragraph (f) would require States, effective October 13, 1989, to provide that there will be a rebuttal presumption, in any judicial or administrative proceeding for the award of child support, that the amount of the award which would result from the application of the guidelines established under paragraph (a) is the correct amount, as required under section 103(a)(3) of Public Law 100-485.

Also in accordance with section 103(a)(3) of the new law, we propose under paragraph (g), to stipulate that a written finding on the record of a proceeding for the award of child support that the use of the guidelines would be inappropriate in a particular case shall be sufficient to rebut the presumption in that case. Such finding must be predicated on criteria established by the State. While development of the specific criteria for rebuttal isbeing left to each State's discretion, we are proposing under this paragraph that the State's criteria must be based on the best interests of the child. We believe that in any proceeding regarding child support, the interests of the child should prevail and determinations not to use the guidelines in a particular case should be the exception rather than the rule. We also propose that written findings that rebut State guidelines clearly state the nature and extent of the variation from the guidelines. In cases where items of value are conveyed in lieu of a portion of the support presumed under the guidelines, that value should be noted. This information will be useful in cases where support orders are appealed and in States' evaluation of the effectiveness of their guidelines.

We are concerned that States obstruct guidelines in such a way as to reasonably limit the number of cases in which the guidelines are rebutted. States should gather data on what proportion of orders are being issued under guidelines and the reasons for rebuttal where the guidelines are not applied. The data should be analyzed by the State in conducting a review of those guidelines and the State should enhance the guidelines as necessary where they find that a disproportionate number of orders have been established in which the guidelines are rebutted. Therefore, in paragraph (h), we are proposing that States should gather such data and use this information to make any revisions as part of their initial review of their guidelines. Data collection should start as soon as possible to assist in any reviews conducted before the statutorily required date in 1993. We plan to publish draft audit regulations for guidelines and other parts of the program within the next six months.

3. State Laws Providing for Paternity Establishment

Section 466(a)(5) of the Act, added by the Child Support Enforcement Amendments of 1984, Public Law 98-378, requires that States have in effect laws requiring the use of procedures which permit the establishment of the paternity of any child at any time prior to such child's eighteenth birthday. The implementing regulation at 45 CFR 3O2.70(a)(5) requires, effective October 1, 1985, that the State plan provide that the State has in effect such a law and has implemented such procedures.

Section 111(b) of Public Law 100-485 amends section 466(a)(5) of the Act by redesignating the above requirement as section 466(a)(5)(A) and adding a new requirement under paragraph (B) to require each State to have in effect laws requiring the use of procedures under which the State is required (except in cases where the individual involved has been found under section 402(a)(26)(B) of the Act to have good cause for refusing to cooperate) to require the child and all other parties in a contested paternity case to submit to genetic tests upon the request of any party, effective November 1, 1989. Further, paragraph (c) of section 111 of Public Law 100-485 amends section 454(6) of the Act to allow States to impose a fee for performing genetic tests on any individual who is not an AFDC recipient. Westrongly encourage the charging of fees for genetic tests in order to discourage frivolous requests for testing.

In addition, section 111(e) of Public Law 100-485 amends section 466(a)(5)(A) of the Act (as amended by section 111(b)), retroactive to August 16, 1984 (the effective date of Public Law 98-378), to provide that the State law requirement permitting the establishment of paternity of any child prior to the child's 18th birthday, also applies to any child for whom paternity has not yet been established and any child for whom a paternity action was brought but dismissed because a statute of limitations of less than 18 years was then in effect in the State.

To address these statutory changes we are proposing the following regulatory amendments:

Section 3O2.70- Required State Laws

We propose to amend 45 CFR 302.70 to reiterate the statutory changes outlined above by revising the introductory language in paragraph (a) regarding effective dates and by revising paragraph (a)(5) to redesignate the current contents as õ302.70(a)(5)(i) and to add at the end thereof "including for any child for whom paternity has not yet been established and any child for whom a paternity action was previously dismissed under a statute of limitations of less than 18 years."

We propose to add a new õ302.70(a)(5)(ii) to require that, effective November 1, 1989, States have in effect laws providing for procedures under which the State is required, except in cases where good cause has been found, to require the child and all other parties in a contested paternity case to submit to genetic tests upon the request of any party.

Section 305.5- Establishment of Paternity

Regulations at õ303.5 set forth requirements States must adhere to in establishing paternity. We propose to amend õ303.5 by adding two new paragraphs to be designated as õõ303.5(d) and (e).

Section 303.5(d) would require, upon the request of any party in a contested paternity case, that all parties submit to genetic testing, unless, in the case of an individual receiving AFDC, there has been a determination of good cause for refusal to cooperate under õõ232.40 through 232.49. Genetic testing should be done promptly after the request is made, notwithstanding the age of the child in early months of infancy. Procedures currently exist which permit testing regardless of the child's age.

Proposed paragraph (e) would provide that the IV-D agency may charge any individual who is not receiving AFDC a reasonable fee for the costs of performing genetic tests. We strongly encourage States to charge fees for genetic tests in order to discourage frivolous requests for testing. The development of a fee payment mechanism would also reduce the incidence of contested cases by reducing frivolous denials or accusations of paternity.

States electing to charge such fees may set a flat fee for genetic tests in an amount not exceeding the actual cost of performing such tests or may establish a fee schedule based onincome. Such fees may be collected from non-AFDC custodial parents or from the absent parent if paternity is substantiated. States electing to charge such fees must ensure that the amount is reasonable so as not to discourage the application of non-AFDC families needing paternity establishment services. Paragraph (e) would also require that, if paternity is established due to genetic test results, the IV-D agency must attempt to obtain a judgment for the costs of the genetic tests from the putative father.

4. Increased Federal Financial Participation for Laboratory Testing to Determine Paternity.

Section 112 of Public Law 100-85 amends section 455(a)(1) of the Act to provide 90 percent Federal matching for States' costs for laboratory testing to determine paternity. The amendment is effective with respect to laboratory costs incurred on or after October 1, 1988. Under prior law, these costs were matched at the applicable rate pursuant to section 455(e) of the Act (68 percent for FY 1988 and 1989).

Section 304.20- Availability and rate of Federal Financial Participation

We propose to amend õ304.20 by adding a new paragraph (d) to specify that 90 percent Federal matching is available for laboratory costs of paternity determination incurred on or after October 1, 1988. This matching rate would be available for laboratory costs incurred in determining paternity in a specific case, including, for example, the costs of obtaining and transporting blood and other samples of genetic material, repeated testing where necessary, analysis of test results, and the costs for expert witnesses in a paternity determination proceeding, when the expert witness costs are included as part of the genetic testing contract. We have decided to include costs for expert witnesses because we believe that such costs are usually included as part of genetic testing contracts and are necessary and reasonable costs for the State to incur in making paternity determinations. The same costs may be excluded, pursuant to section 458(c) of the Act and the implementing regulation at 45 CFR 303.52(b)(4)(iv), in determining a State's incentive payments.

The final regulation on standards for program operations, published on August 4, 1989, require that paternity testing laboratories be selected competitively. Consistent with current Federal requirements, Federal financial participation will be available only for reasonable and necessary costs: costs significantly above market rate are not reasonable. This requirement for competitive selection will also reduce cost to individuals in States that choose to charge fees to the requesting party.

Regulatory Flexibility Analysis

Under the Regulatory Flexibility Act of 1980 (Pub.L.96-354), we are required to prepare a regulatory flexibility analysis for those rules which would have a significant economic impact on a substantial number of small entities. While this regulation requires States tonotify employers that they must indicate the date wages are withheld when forwarding wages to the State, this would not have a significant economic impact on employers because they are already required to comply with wage withholding requests, and supplying this date when forwarding withheld wages would not significantly increase the economic burden placed on them. Because the impact of these regulations is primarily on States, these regulations would not have a significant economic impact on a substantial number of small entities and a regulatory flexibility analysis is not required.

Regulatory Impact Analysis

The Secretary has determined, in accordance with Executive Order 12291, that this rule does not constitute a "major" rule for the following reasons:

(1) The annual effect on the economy would be less than $100 million;

(2) This rule would not result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and

(3) This rule would not result in significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or export markets.

List of Subjects

Parts 302 and 303

Child support, Grant programs-social programs, Reporting and recordkeeping requirements.

45 CFR Part 304

Child support, Grant programs-social programs.

(Catalog of Federal Domestic Assistance Program No. 13.783, Child Support Enforcement Program)

Wayne A. Stanton,

Director, Office of Child Support Enforcement.

Approved: April 10, 1989.

Louis W. Sullivan,

Secretary

For the reasons set out in the preamble, we propose to amend Title 45 Chapter III of the Code of Federal Regulations as follows:

PART 302-STATE PLAN REQUIREMENTS [AMENDED]

1. The authority citation for Part 302 continues to read as follows:

Authority: 42 U.S.C. 651 through 658, 660, 664, 666, 667, 1302, 1396a(a)(25), 1396(d)(2), 1396(o), 1396b(p) and 1396(k).

2. Section 302.50(b)(2) is amended by replacing the words "a formula which meets the criteria prescribed in õ302.53" with the words "the requirements of 302.56".

3. Section 302.51 is amended by revising paragraph (a) to read as follows:

õ302.51 Distribution of support collections.

* * * * *

(a) For purposes of distribution in any IV-D case, amounts collected shall be treated first as payment on the required support obligation for the month in which the support was collected and if any amounts are collected which are in excess of such amount, these excess amounts shall be treated as amounts which represent payment on the required support obligation for previous months. In AFDC cases in which conversion to a monthly amount is necessary, the IV-D agency may round down the converted amount to the next lower whole dollar amount for the purpose of distribution under this section. Effective June 9, 1988, the date of collection for distribution purposes in all IV-D cases, except with respect to those collections addressed under the next sentence of this section, shall be the date on which the payment is received by the IV-D agency or the legal entity of any State or political subdivision actually making the collection, whichever is earliest. With respect to payments made through wage or other income withholding and received by the IV-D agency on or after January 1, 1989, the date of collection for distribution purposes in all IV-D cases shall be the date the wages or other income are withheld to meet the support obligation. Until the effective date of regulations setting distribution timeframes in accordance with the Family Support Act of 1988, in any case in which collections are received by an entity other than the agency responsible for final distribution under this section, the entity must transmit the collection within 10 days of receipt.

4. Section 302.53 is removed.

5. Section 302.56 is amended by revising paragraphs (b) and (c) and adding paragraphs (e), (f), (g) and (h) to read as follows:

õ302.56 Guidelines for setting child support awards.

* * * * * *

(b) The State shall have procedures for making the guidelines available to all persons in the State whose duty it is to set child support award amounts.

(c) The guidelines established under paragraph (a) of this section must at a minimum:

(1) Take into consideration all earnings, income and resources of the absent parent;

(2) Be based on specific descriptive and numeric criteria and result in a computation of the support obligation:

(3) Provide for coverage of the child or children's health careneeds and include health insurance when available to either parent at reasonable cost as defined in õ306.51(a); and

(4) Apply to all orders in the State.

(d) * * *

(e) The State must review the guidelines established under paragraph (a) of this section at least once every 4 years to ensure that their application results in the determination of appropriate child support award amounts.

(f) Effective October 13, 1889, the State must provide that there shall be a rebuttable presumption, in any judicial or administrative proceeding for the award of child support, that the amount of the award which would result from the application of the guidelines established under paragraph (a) of this section is the correct amount of child support to be awarded.

(g) A written finding on the record of a judicial or administrative proceeding for the award of child support that the application of the guidelines established under paragraph (a) of this section would be unjust or inappropriate in a particular case shall be sufficient to rebut the presumption in that case, as determined under criteria established by the State. Such criteria must be based on the best interests of the child. Findings that rebut the guidelines shall state the amount of support that would have been required, how the order varies from the guidelines, including the value of any property or other support awarded in lieu of support presumed by the guidelines, the justification of how the finding serves the best interests of the child, and, in cases where items of value are conveyed in lieu of a portion of the support presumed under the guidelines, the estimated value of items conveyed.

(h) As part of the initial review of a State's guidelines required under paragraph (e) of this section, a State must gather and analyze data regarding the number of cases in which guidelines have been applied, the number in which there has been a deviation from the guidelines, and the reasons for such deviation. The analysis of the data must be used in the State's review of the guidelines to ensure that deviations from the guidelines are limited.

6. Section 302.70(a) is amended by adding the clause "Unless otherwise indicated," at the beginning of the introductory text, and by revising paragraph (a)(5) to read as follows:

õ302.70 Required State Laws

(a)* * *

(5)(i) Procedures for the establishment of paternity for any child at least to the child's 18th birthdays including any child for whom paternity has not yet been established and any child for whom a paternity action was previously dismissed under a statute of limitations of less than 18 years; and

(ii) Effective November 1, 1989, procedures under which the State is required (except in cases there the individual involved has been found under õõ232.40 through 232.49 of this title to have good cause for refusing to cooperate) to require the child and all other parties in a contested paternity case to submit to genetic tests upon the request of any such party, in accordance with õõ330.5 (d) and (e) of this chapter.

* * * * *

PART 303- STANDARDS FOR PROGRAM OPERATIONS

7. The authority citation for part 303 continues to read as follows:

Authority: 42 U.S.C. 651 through 658, 660, 663, 664, 666, 667, 1302, 1396(a)(25), 1396(d)(2), 1396(o), 1396b(p), and 1396(k).

8. Section 303.5 is amended by adding new paragraphs (d) and (e) to read as follows:

õ303.5 Establishment of paternity.

* * * * * *

(d) Upon the request of any party in a contested paternity case, the IV-D agency shall require all parties to submit to genetic tests unless, in the use of an individual receiving aid under the State's title IV-A plan, there has been a determination of good cause for refusal to cooperate under õ232.40 through 232.49 of this title.

(e) The IV-D agency may charge any individual who is not a recipient of aid under the State's title IV-A plan a reasonable fee for the costs of performing genetic tests. If paternity is established as a result of genetic tests, the IV-D agency must attempt to obtain a judgment for the costs of the genetic tests from the putative father.

9. Section 303.7 is amended by revising paragraph (c)(7)(iv) to read as follows:

õ303.7 Provision of services in interstate IV-D cases.

* * * * *

(c) * * *

(7) * * *

(iv) Collecting and monitoring any support payments from the absent parent and forwarding payments to the location specified by the IV-D agency in the initiating State no later than 15 calendar days from the date of initial receipt in the responding State, except with respect to certain Federal tax refund offset collections as specified in õ303.72(h)(5) of this part. The IV-D agency must include sufficient information to identify the case, indicate the date of collection as defined under õ302.51(a) of this title, and include the responding State's identifying code as defined in the Federal Information Processing Standards Publication (FIPS) issued by the National Bureau of Standards or the Worldwide Geographic Location Codes issued by the General Services Administration.

* * * * *

10. Section 303.100(d)(1)(ii) is amended by inserting the bvld õ303.100 Procedures for wage on income withholding. Following words before the semicolon at the end;

* * * * *

õ303.100 Procedures for wage or income withholding.

(d) * * *

(1) * * *

(ii) * * *, and must report to the State (or to such other individual or entity as the State may direct) the date on which the amount was withheld from the absent parent's wages;

* * * * *

PART 304- FEDERAL FINANCIAL PARTICIPATION

11. The authority citation for part 304 continues to read as follows:

Authority: 42 U.S.C. 651 through 655, 657, 1302, 1396a(a)(25), 1396(d)(2), 1396b(o), 1396b(p), and 1396(k).

12. Section 3O4.20 is amended by adding a new paragraph (d), as follows:

õ304.20 Availability and rate of Federal financial participation.

* * * * *

(d) Federal financial participation at the 90 percent rate is available for laboratory costs incurred in determining paternity on or after October 1, 1988, including the costs of obtaining and transporting blood and other samples of genetic material, repeated testing when necessary, analysis of test results, and the costs for expert witnesses in a paternity determination proceeding, but only if the expert witness costs are included as part of the genetic testing contact.

[FR Doc. 89-21327 Filed 9-12-89; 8:45 a,]

BILLING CODE 4190-11-M