< Back to Search

Final Rule: $50 Pass-through; Support Guidelines; Mandatory Genetic Testing; Paternity Establishment

AT-91-02

Published: May 16, 1990
Information About:
State/Local Child Support Agencies
Topics:
Case Management, Paternity Establishment, Review and Modification
Types:
Policy, Action Transmittals (AT), Regulations
Tags:
Child Support Guidelines, Pass-through/Family Distribution

ACTION TRANSMITTAL

OCSE-AT-91-02

May 16, 1990

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

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

ATTACHMENT:Attached is a final rule which implements 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 Federal regulations to require payment to the family, and disregard, for purposes of eligibility for Aid to Families with Dependent Children (AFDC), 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 REFERENCE: 45 CFR PARTS 302, 303, and 304

SUPERSEDED MATERIAL: OCSE-AT-89-17, dated September 13, 1989

EFFECTIVE DATE: May 15, 1991

INQUIRIES TO: OCSE Regional Representatives

Allie Page Matthews

Deputy Director

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Family Support Administration

Office of Child Support Enforcement

RIN 0970-AA64

45 CFR Parts 302, 303, and 304

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

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

ACTION: Final rule

SUMMARY: This final rule implements 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), 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.

DATES: May 15, 1991. It should be noted that the statutory effective dates of certain of these provisions occur before the publication date of these final rules. The statutory provisions are effective on these effective dates, regardless of the absence of final implementing regulations.

FOR FURTHER INFORMATION CONTACT: Policy Branch, OCSE, specifically:

Andrew Hagan (202) 252-5375 -- $50 pass-through, 90% Federal matching for laboratory costs, mandatory genetic testing, and paternity establishment until age 18

Craig Hathaway (202) 252-5367 -- Presumptive guidelines

SUPPLEMENTAL INFORMATION:

Paperwork Reduction Act

Public reporting burden for the information collection requirements 45 CFR 302.56(g) and (h) are estimated to be a one-time burden of 40 hours to develop criteria to determine when application of guidelines would be inappropriate, 10 minutes per case to meet the requirements for findings justifying deviation from the guidelines and a one-time burden of 100 hours to gather data for use in the initial review of a State's guidelines. A notice will be published in the Federal Register when the Office of Management and Budget approves these information collection requirements under section 3507 of the Paperwork Reduction Act.

Statutory Authority

This final rule is published under the authority of the following provisions of the Act, as amended by Pub. L. 100-485: section 457(b)(1) (with respect to the $50 pass-through), section 467(b) (with respect to presumptive 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 the establishment of paternity), and section 455(a)(1) (with respect to 90 percent matching for laboratory testing). The final rule is 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 Pub. L. 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 regulation at 45 CFR 302.51(a) (final regulation published on June 9, 1988 (53 FR 21642)), which provides that the date of collection of a child support payment for purposes of distribution is the date on which payment isreceived 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 expanded the date of collection rule, however, with respect to payments made through wage or other income withholding as indicated below. Regulations were also revised to clarify the applicability of õ302.51(a) and to ensure appropriate information exchange in interstate cases, as follows:

45 CFR 302.51 - Distribution of Support Collections

Under õ302.51(a)(1), for purposes of distribution in IV-D cases, amounts collected, other than collections made through Federal or State income tax refund offset, 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. Under õ302.51(a)(2), in AFDC and title IV-E foster care cases in which conversion to a monthly amount is necessary because support is ordered to be paid other than monthly, the IV-D agency may round off the converted amount to whole dollar amounts for the purpose of distribution under õõ302.51 and 302.52.

Under paragraph (a)(3), amounts collected through Federal or State income tax refund offset must be distributed in accordance with the requirements in õõ303.72(h) and 303.102(g), respectively. Under paragraph (a)(4), 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 must be the date the wages or other income are withheld to meet the support obligation. This is consistent with instructions published by OCSE on November 18, 1988. See OCSE-AT-88-17. If an employer fails or neglects to report the exact date of withholding, the State agency may impute wages to have been withheld in the month wages were due to be withheld in accordance with the court or administrative order.

Effective June 9, 1988, õ302.51(a)(5)(i) defines the date of collection for distribution purposes in all IV-D cases, other than for those payments made through tax refund offset or withholding and addressed under paragraphs (a)(3) and (4), as 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. Under paragraph (a)(5)(ii), effective January 1, 1989, States may use as the date of collection (for collections other than those made through withholding or Federal or State income tax refund offset) either the date of collection as defined under paragraph (a)(5)(i) or the date a payment is mailed, as evidenced by a legible U.S. Postal Service postmark or a legibly dated receipt from a commercial carrier.

The first sentence in õ302.51(b)(1) is revised as follows: Of such amounts as are collected periodically which represent monthly support payments, the first $50 of any payments for amonth received in that month and the first $50 of payments for each prior month received in that month which were made by the absent parent in the month when due, shall be paid to the family.

45 CFR 303.7 - Provision of Services in Interstate IV-D Cases

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)) is amended to require under õ303.7(c)(7)(iv) that the responding State IV-D agency 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. In addition, paragraph (c)(7)(iv) is 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 õ302.51(a) or that the collection was made through State income tax refund offset.

45 CFR 303.100 - Procedures for Wage or Income Withholding

Section 303.100(d)(1)(ii) is amended 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 was required to make the guidelines available to all judges and other officials who have the power to determine awards, but the guidelines were not required to be binding on them.

Section 103 of Pub. L. 100-485 amended section 467 of the Act, effective October 13, 1989, 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 provided 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 childsupport award amounts.

In response to the Child Support Enforcement Amendments of 1984, a number of States implemented presumptive guidelines rather than the advisory guidelines required under the statute. Therefore, some States may already be in compliance with the requirement in Pub. L. 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 Pub. L. 100-485 unless Congress clarifies an intent to the contrary.

Regulations were revised in response to the requirements under section 103 of Pub. L. 100-485 outlined above as follows:

45 CFR 302.50 - Support Obligations

Under former regulation at õ302.50(b)(2), when there was no court order for support, States were 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 replaced the reference to the formula and the criteria under õ302.53 with reference to õ302.56, Guidelines for setting child support awards.

45 CFR 302.53 - Formula for Determining the Amount of the Obligation

Former regulation at õ302.53, which required that, for cases without court orders for support, States must utilize a formula in setting support amounts which takes into consideration a number of criteria, is deleted.

45 CFR 302.56 - Guidelines for Setting Child Support Awards

Paragraph (a) of 45 CFR 302.56 requires each State, effective October 13, 1989, to establish one set of guidelines by law or by judicial or administrative action for establishing and modifying child support award amounts within the State. Paragraph (b) of this section requires the State to have procedures for making guidelines available to all persons in the State whose duty it is to set child support award amounts.

Paragraph (c) requires that at a minimum the guidelines established under paragraph (a): (1) Take into consideration all earnings and income of the absent parent; (2) be based on specific descriptive and numeric criteria and result in a

computation of the support obligation; and (3) provide for coverage of the child(ren)'s health care needs.

Paragraph (d) requires States to include a copy of the guidelines in the State plan. Paragraph (e) requires that each State review and revise, if appropriate, its guidelines at leastonce every four years to ensure that their application results in the determination of appropriate child support award amounts.

Paragraph (f) requires States, effective October 13, 1989, to provide that there will 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) is the correct amount to be awarded.

Under paragraph (g), only a written or specific 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 is being left to each State's discretion, we require under this paragraph that the State's criteria must take into consideration the best interests of the child. The written findings or findings on the record that rebut State guidelines must clearly state the nature and extent of the variation from the guidelines. Under paragraph (h), States must gather data and use this information to make any revisions as part of their review and revision of their guidelines.

3. State Laws Providing for Paternity Establishment

Section 466(a)(5) of the Act, added by the Child Support Enforcement Amendments of 1984, Pub. L. 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 302.70(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 Pub. L. 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 Pub. L. 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.

In addition, section 111(e) of Pub. L. 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 Pub. L. 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 ofless than 18 years was then in effect in the State.

To address these statutory changes we made the following regulatory revisions:

45 CFR 302.70 - Required State Laws

We amended 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 former contents as õ302.70(a)(5)(i) and adding 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 added 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 must, with two exceptions, require the child and all other parties in a contested paternity case to submit to genetic tests upon the request of any party. The exceptions are in AFDC or Medicaid cases in which good cause has been found for refusing to cooperate or, in cases in which, in accordance with õ303.5(b), the IV-D agency has determined that it would not be in the best interest of the child to establish paternity in a case involving incest or forcible rape.

45 CFR 303.5 - Establishment of Paternity

We amended õ303.5 by adding paragraphs (d) and (e). Section 303.5(d)(1) requires, upon the request of any party in a contested paternity case, the IV-D agency to petition the court or administrative authority to require that all parties submit to genetic testing, unless, in the case of an individual receiving AFDC or Medicaid, there has been a determination of good cause for refusal to cooperate under õõ232.40 through 232.49 or 42 CFR 433.147, respectively, or if, in accordance with õ303.5(b), the IV-D agency has determined that it would not be in the best interest of the child to establish paternity in a case involving incest or forcible rape. Under paragraph (d)(2), a contested paternity case is any legal action in which the issue of paternity may be raised under State law and one party denies paternity.

Paragraph (e)(1) provides that the IV-D agency may charge any individual who is not receiving AFDC or Medicaid a reasonable fee for performing genetic tests. Under paragraph (e)(2), any fees charged must be reasonable so as not to discourage those most in need of paternity establishment services from seeking them and may not exceed the actual cost of the genetic tests. Paragraph (e)(3) requires that, if paternity is established and genetic testing is performed, the IV-D agency must attempt to obtain a judgment for the costs of the genetic tests from the party who denied paternity. A parallel change was made to õ303.7(d) to require the responding State IV-D agency to attempt to obtain a judgment for genetic testing costs from the party who denied paternity, instead of the putative father, who may not bethe contesting party in all cases. Paragraph (e)(4) of õ303.5 requires that, if a custodial parent is charged a fee under paragraph (e)(1), the IV-D agency must use any amount recouped under paragraph (e)(3) to reimburse any amount paid by the custodial parent.

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

Section 112 of Pub. L. 100-485 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.

45 CFR 304.20 - Availability and rate of Federal financial participation

We amended 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 is 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. The same costs may be excluded in determining a State's incentive payments, pursuant to section 458(c) of the Act and the implementing regulation at 45 CFR 303.52(b)(4)(iv), which is redesignated as 45 CFR 304.12(b)(4)(iv) effective October 1, 1990 (54 FR 32284).

The final regulation on standards for program operations, published on August 4, 1989, requires 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 costs to individuals in States that choose to charge fees to the requesting party.

Response to Comments

We received 84 comments on the proposed rule published September 13, 1989, in the Federal Register (54 FR 37866). The comments and our responses appear below.

I. Pass-Through of Support Payments

Section 302.51 - Distribution of Support Collections

1. Comment: One commenter asked if the proposed requirement in the first sentence of õ302.51(a) under which any amount collected must be treated first as payment on the current support obligation, would apply in all circumstances and to all collections. The commenter asked if States would be required to distribute collections derived from certain administrative enforcement remedies such as consumer credit reporting, tax refund offset, and imposition of liens first as current support before applying any of the collection to arrearages. The commenter argued that these measures are by definition undertaken to recoup arrears; however, as written, the proposed regulation would seem to include these types of collections. The commenter also asked, if an obligor making payments represents that a sum paid is to be applied for past-due support, may the agency proceed to classify the collection as current support despite the obligor's directions to the contrary? The commenter indicated that this issue may arise in cases where obligors seek to forestall impending administrative enforcement measures by making payments on arrears, at the expense of ongoing current support payments.

Response: With certain exceptions, any support collected must be applied first to satisfy the current support obligation. To remove ambiguity in the proposed regulation, we have revised the first sentence of õ302.51(a) (redesignated as õ302.51(a)(1)) to exclude collections as a result of Federal or State income tax refund offset. By Federal statute at section 464 of the Act and regulation at õ303.72(h), collections made through the intercept of Federal income tax refund offset must be distributed as past-due support, and "date of collection" is irrelevant. Also by Federal statute at section 466(a)(3) of the Act and regulation at õ303.102(g), collections made through the intercept of State income tax refund offset must similarly be distributed as overdue support.

In response to the commenter's last concern, even if an obligor specifies that a payment is intended to satisfy arrearages, the collections must still be distributed, for purposes of title IV-D, in accordance with Federal statute and regulations.

2. Comment: A commenter asked if conversion to a monthly amount in AFDC cases, as referenced in the second sentence of õ302.51(a), is mandatory, and if so, whether a IV-D agency may convert a child support obligation into a monthly amount by using an "actual conversion methodology" (e.g., The absent parent has a weekly support obligation of $20. The monthly support obligation is $80 in a four-week month, and $100 in a five-week month.) Other commenters asked that the final regulation require IV-D agencies to round off dollar amounts below $.50 downward and amounts above $.50 upward, or, alternatively, to leave the requirement as stated in current regulations.

Response: For purposes of distribution and redetermining eligibility in AFDC cases, States are required in OCSE-AT-76-5 dated March 11, 1976, to convert to a monthly amount support that is ordered to be paid more frequently than monthly. Conversion is necessary in AFDC cases to allow the IV-D agency to distributesupport collections in accordance with õ302.51(b)(1) through (3), and the IV-A agency to redetermine the family's eligibility for AFDC in accordance with 45 CFR 232.20(b). Conversion is also necessary in title IV-E foster care cases to allow the IV-D agency to distribute support collections in accordance with õ302.52(b)(1) and (2). Conversion is not required, but allowable, in other IV-D cases.

In order to accomplish the above purposes, the IV-D agency has flexibility regarding the method it uses to convert child support ordered to be paid more frequently than monthly into a monthly amount as required by 45 CFR 302.51(a) and OCSE-AT-76-5.Therefore, the State may use the "actual conversion methodology" suggested above, or any one of the conversion methods set forth on pages 1 and 2 of OCSE-AT-76-5.

We have revised the proposed second sentence of õ302.51(a), which is redesignated as paragraph (a)(4) in this final regulation, to allow the IV-D agency, in AFDC and title IV-E foster care cases in which conversion to a monthly amount is necessary because support is ordered to be paid other than monthly, to round off the converted amount to whole dollar amounts for purposes of distribution under õõ302.51 and 302.52. This is consistent with longstanding Federal policy in previously-existing regulatory language.

3. Comment: A number of commenters stated that the regulation should require that, in cases in which obligors make payments directly to the IV-D agency or its representative, the date of postmark or mailing must be used to determine the month in which the payment was made. They believe Congress clearly intended mailing and not receipt to be the operative date for timely payments.

Response: Current regulations in effect since June 9, 1988 (53 FR 21642) provide that the date of collection 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. This final rule establishes a separate rule with respect to payments in withholding cases, as discussed in more detail in the following comment and response. While we were not convinced by commenters that Congress intended that we should mandate at the Federal level that the date a payment is mailed should be used to determine the month in which the payment is made, we believe that States should be given the option, effective January 1, 1989, to use, on a statewide basis, either: 1) The date a payment is mailed, as evidenced by a legible U. S. Postal Service postmark or a legibly dated receipt from a commercial carrier; or 2) the date of initial receipt by the State IV-D agency or by the legal entity of any State or political subdivision actually making the collection, whichever is earliest. Therefore, we have included that option under õ302.51(a)(5)(ii).

4. Comment: We received many comments expressing concern that the additional burden placed on employers of having to report the date of withholding will further erode States' relationships with employers and that, in any case, it will beimpossible to ensure employers compliance with the requirement unless State statutes are enacted to do so. Commenters believe that State and local agencies are being placed in a no-win situation because they must rely on the hope that the employers provide the date of withholding. These commenters believe that, if the employer does not adhere to the rule, the local and State agency should not be determined to be out of compliance and subject to possible penalties. They urged that, for purposes of uniformity, the date of collection in cases of withholding remain the same as the date of collection for other payments.

Alternatively, other commenters agreed that for support payments made through wage or income withholding, the date of collection for distribution purposes should be the date the wages are irrevocably withheld. One commenter indicated that this requirement is straightforward and in the best interest of the custodial parent. Another commenter recommended that the date of the employer's check or bank draft for the withheld amounts be used to determine the $50 pass-through.

Commenters also requested that there must be some provision for situations where the date is not reported and that the regulation should state "If the date of withholding is unknown, the date of collection shall be the date of receipt by the IV-D agency." Alternatively, a commenter recommended that there be a presumption in the regulation that when the employer fails to specify the date of withholding, withheld amounts forwarded by employers represent timely payment of amounts due since the previous date the employer forwarded withheld amounts.

Other commenters recommended that the regulation be revised to include more specificity with respect to States' responsibility to monitor employer compliance and to obtain relevant employer information. Commenters asked how the date of withholding should be identified and forwarded; whether the IV-D agencies should presume that the payment was made for the previous month; and how this information will be conveyed to clerks or court/depositories so that it can be transferred in an automated fashion with the payments.

Response: Section 102 of Pub. L. 100-485 amended 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 delaying transmitting the payment from the point of collection to the agency responsible for distribution.

Pub. L. 100-485 also made significant changes to 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 the future on a larger scale than heretofore. From the inclusion in Pub. L. 100-485 of the amendments concerning the $50 pass-through, and the amendments which will result in payment of support through income withholding in a greater proportion ofcases, we conclude that the Congress' intent was to apply the $50 pass-through, after January 1, 1989, to any case in which an absent parent's support payment is irrevocably withheld from his or her wages in the month in which the payment was due. In other words, if an employer withholds child support in the month the support was due and subsequently pays that support to the IV-D agency in a later month, the $50 disregard must be credited for the period during which the withholding actually occurred. Use of the date of the employer's check or the date of receipt by the initial point of receipt in the State does not necessarily ensure distribution of the amount withheld as having been paid in the month it was due and withheld.

Section 302.51(a)(4) requires that, 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 must be the date of the withholding. If the employer fails to report the date of withholding, it will be necessary to reconstruct that date by contacting the employer or comparing actual amounts collected with the pay schedule specified in the court or administrative order. This will give States some flexibility in establishing the date of payment when employers fail or neglect to report that information. If the State's withholding law includes withholding of other income such as unemployment compensation or pension benefits and such income is withheld to meet a support obligation, the IV-D agency must use the date of collection as defined in õ302.51(a)(4) to determine accurate distribution of the amount withheld.

States may not simply presume that, when the employer fails to specify the date of withholding, withheld amounts forwarded by employers represent timely payment of amounts due since the previous date the employer forwarded withheld amounts. This would not take into consideration the possibility that wages are withheld irregularly because of lay-offs, employee absences, or sporadic work patterns, for example. The wage withholding order will often include provision for payment of arrears accumulated because of such work interruptions and Congress clearly did not intend pass-through payments to issue when back support is finally paid.

States must ensure that they receive data which allows them to distribute amounts withheld accurately. If the employer fails to supply the date of the withholding, States will have to contact the employer for the date or use other verifying information, such as the underlying order, that ensures distribution of the amount paid for the actual month in which withholding occurred. We do not believe this should present a problem in most withholding cases but encourage States to work with employers to impress upon them the need to report the date of withholding and to assist them in developing the least burdensome means of doing so.

5. Comment: Several commenters objected to the January 1, 1989 effective date of the requirement that, in withholding cases, the date of collection is the date of withholding. One commenter urged that the effective date for this requirement bedelayed for 18 months to allow necessary statutory changes, computer changes and proper notice to employers. Another requested a delayed effective date until 1991. Still another commenter indicated that, if there is evidence of Congressional intent to link "pass-through" payments to the date of withholding, it appears there is sufficient evidence of intent to delay its implementation to November 1, 1990. The commenter also stated that the January 1, 1989 date could be interpreted to be the collection date covered by 53 FR 21642 dated June 9, 1988. Another commenter urged that if recomputation of distribution for purposes other than the $50 pass-through will be required, the effective date should be delayed until 1991. Another commenter recommended that audit criteria established for monitoring this provision take into consideration these implementing issues.

Response: States have been on notice since enactment of Pub. L. 100-485 of the effective dates of its various provisions; the Congress could have made the effective date for the clarification on the $50 pass-through provision the same as for the immediate withholding provision, but it did not choose to do so. In addition, OCSE-AT-88-17, dated November 18, 1988, notified States of the provisions regarding the $50 pass-through payment, establishment of paternity until the child's 18th birthday, and 90 percent Federal funding for laboratory costs in establishing paternity. That Action Transmittal addressed payment of the $50 pass-through in cases in which an absent parent's child support payment is irrevocably withheld from his or her wages in the month in which the payment was due. Specifically, it read "if an employer withholds child support in the month the support was due and subsequently pays that support to the IV-D agency in a later month, the $50 disregard must be credited for the period during which the withholding actually occurred".

We disagree that the January 1, 1989 statutory effective date of section 102 of Pub. L. 100-485 should be construed to apply to the date of collection policy established in the final regulation governing the $50 pass-through published on June 9, 1988 (53 FR 21642). That final regulation provided that the date of collection of a child support payment for purposes of distribution and redetermination of AFDC eligibility 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. Pub. L. 100-485 did not make any change inconsistent with that administrative rule, nor did Congress indicate the implementation of the existing rule should be delayed. States have been on notice of that regulatory requirement, and its effective date, for over two years and should already be distributing collections based on it.

6. Comment: A commenter urged that the explanation of the final regulation clarify that recomputation of distribution is required only for purposes of the $50 pass-through payment. Another commenter argued that, if distribution must be recomputed, adjustments must be made to accounting records. The commenter made all of the following comments: Since it is the norm rather than the exception that a collection is received in amonth later than the month in which the support was paid, child support agencies will be forced to make adjustments on a significant number of cases. If the child support program has an automated system, that system will have to be reprogrammed to handle these adjustments. If the State does not yet have an automated system, additional resources will be required to design and program this capability. Collections and statistical reports would have to be adjusted to reflect the adjustments made when the month in which support was paid differs from the month the collection was received. Applying collections to the month in which they are paid rather than the month in which they are received may significantly complicate the process of redetermining AFDC eligibility when child support collections exceed the grant.

Response: In response to the comment that the recomputation of distribution should only be required for purposes of the $50 pass-through, we are reiterating that accurate distribution of support collections in IV-D cases depends on whether the collection is treated as payment on current or past-due support. Distribution of amounts collected in excess of the first $50 of support collected depends on distribution of that first $50. Under section 457 of the Act, governing distribution of support collections, there is an interrelationship among paragraphs (b)(1) through (4) which does not leave room for separating out paragraph (b)(1) payments, relating to the $50 pass-through, for special distribution. 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 the payments were made on-time, not just the $50 payment.

Some of the statements made by the second commenter may currently be accurate in some States. However, if States forward collections expeditiously after they are received, delays in receiving those collections by entities responsible for final distribution will be limited. In addition, States with automated systems will not necessarily have to reprogram their systems if the system captures two dates with respect to a collection. The first date is the date of collection or payment for the purpose of determining whether a payment is for current support. The second date is the date of initial receipt in the State for the purpose of starting the timeframes for paying amounts collected to families.

We would also point out that accounting records for previous months need not necessarily be adjusted. While amounts received in a month subsequent to the month the payment was made must be distributed accurately based on the date of collection defined in 302.51(a), States need not adjust accounting records of distribution of collections in a previous month. Distribution in previous months is completed. The State would merely have to indicate in the current month's accounting record how collections received in the current month were distributed, including applying collections as current support for a previous month if appropriate based on the date of collection as defined in 302.51(a). In addition, statistical reports are based on whencollections are received by a State and need not be adjusted to reflect when wages were withheld or the date of initial receipt by the responding State in an interstate case.

It is true that adjustments to AFDC eligibility may be necessary when support payments which exceed the AFDC grant amount are paid but not received timely. However, this has always been the case; it is not a consequence of these regulations, although somewhat more frequent retroactive accounting may be required. In most cases, the amount of the payment will not render the family ineligible for AFDC. These rules will, however, ensure that AFDC families, who are entitled to pass-through payments of up to $50 when support is paid on time, receive such payments. Congress ensured this would be the case through enactment of the clarifications in Pub. L. 100-485. Consistent with clear congressional intent, efforts have to be made to expedite and improve the collection and distribution of support payments to ensure accurate distribution.

7. Comment: One commenter indicated that the proposed change to the date of collection definition retains the "date of collection" as the sole trigger for distribution of the $50 pass-through payments and argues that section 102 of Pub. L. 100-485 clearly distinguishes between amounts collected in the month of receipt and amounts collected in excess of the amount owed for the month of receipt. The commenter suggested alternative language for both õõ302.51(a) and (b)(1). The proposed language for õ302.51(a) would require that the month of payment for distribution purposes be the date of withholding, the date of receipt by another IV-D agency or the legal entity of any State or political subdivision, or the postmark date if paid directly through the United States Postal Service, whichever is earliest. The proposed language for õ302.51(b)(1) would include, for purposes of the $50 pass-through payment, reference to amounts received in one month which were paid timely in a previous month.

Response: As indicated earlier, we are allowing, but not requiring, States to use evidence of the date a payment is mailed to determine the date of collection for distribution purposes in cases in which payments are made through the mail. Therefore, while we did not revise õ302.51(a) to include the language suggested by the commenter, use of the date of collection as defined in 302.51(a) will help ensure that collections are distributed accurately.

We did revise õ302.51(b)(1) to refer to payments made in the month when due but received in a later month for consistency with sections 402(a)(8)(A)(vi) and 457(b)(1) of the Act. The first sentence of 302.51(b)(1) is revised to read as follows: "Of such amounts as are collected periodically which represent monthly support payments, the first $50 of any payments for a month received in that month, and the first $50 of payments for each prior month received in that month which were made by the absent parent in the month when due, shall be paid to the family."

8. Comment: Two commenters asked whether the State must distribute monies collected within 15 days of the date the money was withheld from the obligor's pay or within 15 days from the date the clerk received the money from the obligor's employer.

Response: The date of initial receipt of a collection in the State under õ302.32(f), effective October 1, 1990, is used to determine the starting date of the timeframe within which all or part of the collection must be sent to the family. The timeframes for sending support payments to families under õ302.32(f) begin with the date of initial receipt in the State, with certain possible exceptions for collections through Federal and State income tax refund offset.

9. Comment: A comment from a national association representing child support enforcement professionals and agencies stressed that State agencies can only logically distribute payments at the end of each month. The representative argued that it is neither effective nor efficient to distribute several small payments, when the State receives several small payments within any one month for an individual case.

Response: The commenter is referring to a requirement under õõ232.20(d) and 302.32(f) which were published as part of the program standards regulation published in final on August 4, 1989 (54 FR 32284). Although those sections of the regulation were not addressed in the proposed regulation being finalized in this document, we believe there is a need to respond to the commenter's concerns because they are representative of many similar concerns raised with respect to õõ232.20(d) and 302.32(f) since publication of the program standards regulation. We will consider the need for changes to those sections as part of the document currently under development to conform audit regulations to the requirements of the Family Support Act of 1988, including the program standards requirements published in August of 1989.

Effective October 1, 1990, õõ232.20(d) and 302.32(f) establish timeframes within which States must send child support collections to families. The proposed õ302.32(f)(2)(i), published April 19, 1989 (54 FR 15876), would have required States to send any payment under õ302.51(b)(1), i.e., the $50 pass-through payment, to the family within 15 working days of the date of initial receipt in the State. Commenters were quick to point out that this could require as many as four incremental payments during a month if the support was ordered to be paid weekly. In response to the April 19 proposed regulation, most commenters urged that we require States to send payments to AFDC families within 15 days of the end of the month of collection, thereby maintaining consistency with the normal monthly AFDC payment and accounting cycle. To quote the preamble to the final regulation published on August 4, 1989, at 54 FR 32292:

"Almost every comment we received from a State or local IV-D agency objected to the proposal that payments to the AFDC family under õ302.51(b)(1) be made within 15 working days of the date of initial receipt in the State. Commenters strongly urged that IV-D agencies not be required to pay multiple pass-through payments until $50 is collected in cases in which payments are made weekly. Commenters suggested the timeframe for sending the $50 pass-through to families be tied to the end of the month of collection or the date at least $50 is collected. In addition, commenters indicated that, if finalized, the proposal wouldrequire daily distribution of collections which has proven in at least one State to be confusing to AFDC recipients and difficult to administer."

In response to those comments, the final rule at õ302.32(f)(2)(i), published August 4, 1989, requires, effective October 1, 1990:

"when the IV-D agency sends payments to the family under õ302.51(b)(1) of this part, payments to the family must be sent to the family within 15 calendar days of the date of initial receipt in the State of the first $50 of support collected in a month, or, if less than $50 is collected in a month, within 15 calendar days of the end of the month in which the support was collected. When the IV-A agency sends payments to the family under õ302.51(b)(1) of this part, the IV-D agency must forward any amount due the family under õ302.51(b)(1) to the IV-A agency within 15 calendar days of the date of initial receipt in the State of the first $50 of support collected in a month, or, if less than $50 is collected in a month, within 15 calendar days of the end of the month in which the support was collected."

To account for States in which the IV-A agency sends the $50 pass-through payment to the family, õ232.20(d) was amended to require the pass-through payment to be sent to the family within 20 calendar days of initial receipt in the State of the first $50 of support collected, or if less than $50 is collected in a month, within 20 calendar days of the end of the month in which the support was collected. This would allow the IV-A agency an additional 5 days to send the payment to the family.

Since publication of this requirement, States have expressed their strong belief, and have presented data gathered through a national survey conducted by the American Public Welfare Association, that the requirement in the final regulation would, certainly for the next several years, place an unreasonable administrative burden on IV-D agencies with no compelling benefit to families to warrant varying the longstanding practice which ties assistance payments, accounting and distribution of collections in AFDC cases to a monthly cycle. In response to this overwhelming reaction to the requirement in the program standards final rule, buttressed by the survey information, we believe the concerns warrant further consideration.

Therefore, we intend to consider changes to õõ232.20(d) and 302.32(f) as part of the document under development to revise audit requirements for consistency with the Family Support Act of 1988 and program standards requirements. In so doing, we intend that any necessary changes will be made before States are audited for compliance with the program standards requirements.

10. Comment: A commenter indicated that immediate approval of Advanced Planning Documents (APDs) or waiver from prior approval of APDs is necessary to allow States to automate and implement the requirements related to the disregard contained in the proposed rule.

Response: Federal matching funds are available formodifications to automated systems necessary to ensure compliance with these requirements. In addition, a proposed rule is under development which will address the automated systems requirements contained in Pub. L. 100-485, as well as the entire process for review and approval of APDs.

Section 303.7 - Provision of Services in Interstate IV-D Cases

1. Comment: One commenter asked that the requirement that collections in interstate cases be forwarded to the initiating State within 15 calendar days of initial receipt in the responding State be expanded to address legitimate reasons for not forwarding payments timely, i.e., inability to identify parties or match payments with cases, no good address, disputes over the amount.

Response: We believe that most if not all unidentified payments can be identified within the required timeframes for distribution. However, if a payment is made without information which links it to a specific IV-D case and the State after diligent efforts is unable to determine to whom the payment is owed, the State would not be penalized for failing to meet the timeframe for distribution in that case. As soon as the payment is identified, however, the timeframe for transmittal of the payment would apply. We see no reason for a responding State not to have a good address for the location specified by the initiating State IV-D agency where payments should be forwarded. Neither do we share the commenter's concern with respect to disputes over the amount of the collection. These two circumstances do not appear to be legitimate reasons for failing to transmit collections timely.

2. Comment: We received several comments regarding the date of collection in interstate cases. One commenter requested that we clarify that in the absence of information, the initiating State may distribute the $50 pass-through based on the date the responding State forwarded the collection. Another recommended that for purposes of distribution in interstate collection cases involving wage or income withholding, the date of collection for distribution purposes should be the date of initial receipt by the responding State. Finally, another commenter argued that the date of collection in interstate cases should be the date on which the initiating State IV-D agency receives the collection because the IV-D agency should be held accountable only after the collection is under its control.

Response: We believe that responses to previous comments apply to these comments with respect to interstate cases as well. Responding States are required to include the accurate date of collection or indicate that the collection was made through State tax refund offset when collections are forwarded to the initiating State. We did not refer to collections made through Federal income tax refund offset because, effective October 1, 1990, only the initiating State may submit cases for Federal income tax refund offset. (See 54 FR 32303, August 4, 1989.)

Initiating States must distribute the collection as appropriate based on information provided by the respondingState.Initiating States may not use, as suggested by commenters, the date of initial receipt by the responding State in withholding cases, or, in the absence of information from the responding State, the date the collection was forwarded by the responding State.

With respect to the comment that IV-D agencies should be held accountable only after they receive a collection, we reiterate that the date the initiating State receives the collection has no bearing on when the payment was made, which must be determined and used to distribute payments accurately.

State Guidelines for Child Support Award Amounts

A. Section 302.56 - Guidelines for Setting Child Support Awards

Effective date of requirements. - Comment: We received many comments expressing concern that the proposed regulation was published just one month before the statutory effective date of October 13, 1989, and that some proposed requirements would cause undue burden on States which had taken steps in good faith to achieve compliance with the statutory mandate. The preponderance of commenters stated that OCSE should not impose additional requirements through regulation long after those requirements should have been known to States. Most commenters indicated that additional legislative amendments to State laws would be necessary to comply with the proposed regulatory requirements. One commenter asked that OCSE determine States with guidelines in effect as of October 13, 1989, which comply with the provisions of Pub. L. 100-485 to be in compliance with State plan requirements for mandatory guidelines and that States should not be found retroactively out of compliance when the final rule is published. Other commenters argued that States should be given additional time to enact laws or procedures to comply with the proposed requirements and that States should not be required to meet additional requirements until completing their first four-year review of the guidelines.

Response: We do not believe that Congress, in establishing the effective date of October 13, 1989, for these requirements, intended that State compliance be delayed. However, in response to the concerns raised by commenters, we wish to clarify the following. States are required to submit plan amendments by the end of the calendar quarter in which a State plan requirement is effective. Failure to do so could result in disapproval of the State's plan and loss of all Federal funding of the State's IV-D program. States which are determined to have had laws and procedures that were in conformance with the requirements of section 103 of Pub. L. 100-485 as of October 13, 1989 will be given interim approval of their State plan amendments governing mandatory guidelines pending publication of the final rule. A determination of whether a plan amendment may be given interim approval is based on whether or not the State's statutes, rules or procedures which have the force and effect of law meet the explicit provisions of the statute, i.e., any statutory requirement which is clear on its face. Therefore, States arenot required to meet regulatory requirements before those regulatory requirements are published in final form. Upon publication of this rule in final form, States will be required to submit State plan amendments certifying compliance with all mandatory guidelines' requirements, both statutory and regulatory.

One set of guidelines which apply to all orders in the State

1. Comment: One commenter asked if the reference to "setting child support awards" in õ302.56(a) covers modifying existing orders as well as setting initial orders.

Response: Section 467(a) of the Act requires States to establish guidelines for child support award amounts in the State. It does not limit the requirement to setting initial orders. Therefore, the guidelines must be used to establish initial support orders and to modify existing orders. In addition, section 103(c) of Pub. L. 100-485, effective October 13, 1990, requires States to periodically review orders "and adjust such order[s], as appropriate, in accordance with the guidelines established pursuant to section 467(a)." Section 302.56(a) requires, effective October 13, 1989, as a condition for approval of its State plan, a State must establish one set of guidelines by law or by judicial or administrative action for establishing and modifying child support award amounts within the State.

2. Comment: One commenter stated that the requirement that guidelines apply to all orders in the State will significantly change the way its State has previously administered guidelines under the IV-D program. This commenter declared that Pub. L. 100-485 requires only that States establish mandatory guidelines, not a single set of Statewide guidelines.

Response: We believe that the Congress clearly intended that there be one set of guidelines uniformly applied in the State in setting child support award amounts. The Conference Report (Report 100-998, September 28, 1988, p. 92) states, in part, that "...officials must use the States' guidelines, uniformly applied, as a rebuttable presumption." Multiple sets of guidelines cannot be uniformly applied to all cases in the State. In many States, the previous optional or discretionary guidelines were not required to be applied in any jurisdiction within the State, and therefore, their varying and inconsistent application, was irrelevant. The new requirement under section 467(b) of the Act that the amount of support determined under the guidelines "shall be a rebuttable presumption, in any judicial or administrative proceeding for the award of child support," on the other hand, establishes a clear evidentiary standard which it would appear, as a rule of law, must be uniformly applied in all jurisdictions within the State. Therefore, õ302.56(a) requires States to establish one set of guidelines for setting and modifying child support award amounts within the State.

3. Comment: Another commenter objected to the requirement that guidelines apply to all orders in the State, since its State guidelines provide that they apply only to cases where theparents' combined gross income is under $52,000. According to the commenter, above this level of income the incidence of complex financial trade-offs and an equitable distribution of assets is so frequent as to make guidelines inapplicable. The commenter indicated that the State's goal is to have guidelines apply to 75 percent of the State's population based on personal income, and that as income goes up, the income cap below which guidelines apply also goes up. The commenter said that the regulation should be revised to permit States to determine the target population for the guidelines' application as long as all AFDC cases and a majority of non-AFDC cases are included.

Response: As discussed previously, section 467(b) of the Act clearly requires guidelines to be used as a rebuttable presumption in any judicial or administrative proceeding for the award of child support. Therefore, while States may not simply exempt an entire category of cases with incomes above or below a specific dollar level from application of the guidelines, the application of the guidelines in those cases may be rebutted as unjust or inappropriate on a case by case basis, in accordance with State criteria and Federal requirements. However, we caution States that criteria for rebuttal may not be designed to exclude an inordinate number of cases from application of the guidelines, because to do so would clearly contravene the intent of the statute that guidelines be the norm, not the exception, for determining support awards.

We have deleted the separate requirement under proposed õ302.56(c)(4) that guidelines must apply to all orders in the State because it is duplicative of the clear language in õ302.56(a) and (f) that guidelines be used as a rebuttable presumption in any judicial or administrative proceeding for the award of child support, i.e., in establishing and modifying all support awards in the State.

4. Comment: One commenter complained that OCSE, in requiring that guidelines apply to all orders in the State, has not taken into account States which have separate administrative and judicial systems for establishing support awards where different procedures may apply. This commenter felt that requiring the guidelines to apply equally to all orders would eliminate State authority to provide for differences in judicial and administrative systems. Another commenter indicated that requiring a single Statewide guideline ignores the economic realities of large States where diverse economies may dictate different standards.

Response: These requirements do not preclude States from having parallel administrative and judicial systems with procedures which are appropriate to each system. However, these parallel systems must use one common set of guidelines. To allow the guidelines to be applied differently depending on whether a judicial or administrative process is used, would be inequitable and inconsistent with congressional intent, which clearly requires one set of guidelines in the State.

With respect to the comment regarding economic realities oflarge diverse States where differing economies may dictate different standards, we believe even a large State can develop a set of guidelines which adequately addresses economic realities while ensuring equity and an adequate level of support. In fact, a number of large States already have one set of mandatory guidelines in use in setting all orders in the State.

5. Comment: A commenter stated that by requiring a single Statewide guideline OCSE is mandating specific components to be included in guidelines instead of providing technical assistance, as called for in section 467(c) of the Act. The commenter indicated that OCSE is impinging on State authority to set its own policy and that section 467(a) does not require a single Statewide guideline.

Response: As explained previously, section 467 does require one set of guidelines in the State. Further, we believe that the minimum requirements contained in this regulation provides States with great flexibility in establishing guidelines. In addition, OCSE has been providing, and will continue to provide, technical assistance to States in this area.

Minimum Components of Guidelines

1. Comment: Several commenters complained that OCSE, in proposing minimum components under section 302.56(c) for States' guidelines, is imposing requirements that are overly broad, is exceeding Federal authority, and is ignoring congressional intent to allow States flexibility in establishing guidelines.

Response: We are using our authority under section 1102 of the Act to establish these requirements, and believe that, as written, they do not limit States' flexibility to establish guidelines. As stated in the preamble to the proposed rule, we are establishing only minimum components for guidelines and did not impose more specific requirements because States are generally in a better position to determine specific considerations for families residing in their jurisdictions.

2. Comment: Several commenters asked that the regulation require that guidelines establish a minimum amount of support based on the level of Federal foster child guidelines, and be adjusted at each three percent increment of the Consumer Price Index (CPI). They also recommended that the level of support required by the guidelines should be that amount necessary to maintain the child(ren) at the standard of living they would have enjoyed had the marriage or relationship remained intact. These commenters also asked that the regulation prohibit States from exempting those with income above a certain level from application of the guidelines and reducing support amounts below a minimum standard when the obligor takes on the responsibility of additional children, quits a job or becomes a full-time student. Commenters recommended that the minimum standards also address the custodial parent's income in calculating awards. Other commenters asked that the guidelines address child care expenses and circumstances of second families with respect to treatment of income of a new spouse and expenses related to other dependents. Another commenter suggested that States be requiredto ensure that guidelines be reasonably related to economic data on costs of child rearing.

Response: We have established only minimum components for guidelines in this Federal regulation and believe it is appropriate for States to develop guidelines' specifics. However, section 467 of the Act does prohibit States from explicitly limiting application of the guidelines to those with income above or below a specific level; the guidelines must be used as a rebuttable presumption in setting all award amounts in the State. Deviation from the guidelines is allowed only if, based on a written or specific finding on the record, the application of the guidelines would be unjust or inappropriate in a particular case. Therefore, while deviation from the guidelines is allowable in cases with income above a specific level if the above condition is met, States may not categorically excuse cases with income above or below a certain level from application of the guidelines.

While we have not included the other recommendations as part of the required minimum elements of guidelines, we believe that they represent policy options which States could use in constructing guidelines, and encourage States to consider them in establishing and revising their guidelines.

3. Comment: One commenter suggested that we clarify that where a defendant was properly served and fails to appear or to produce financial information, nothing should be construed in the guidelines requirement to prohibit a temporary order, subject to modification based on the production of subsequent information.

Response: We agree with the commenter but do not believe it is necessary to revise the regulation because nothing in the regulation would prohibit a State from entering a temporary order in the circumstances described by the commenter.

4. Comment: Many commenters strongly objected to the inclusion of resources of the absent parent as one of the required components of guidelines. Several commenters complained that the word "resources" was not adequately defined and asked if courts must hire appraisers to assess the value of resources. Others pointed out that availability of resources should be used as a possible factor for rebutting the amount called for by the guidelines. One commenter pointed out that most existing State guidelines are now primarily income-based and deal with resources only insofar as they produce (or are imputed to produce) income. Another commenter stated that the income-shares model for guidelines, which does not address resources, had been adopted by his State partly because it was included as one of a number of models described in a study on guidelines funded by OCSE. One commenter applauded the inclusion of resources, particularly as it would apply to self-employed obligors or obligors who receive commissions. Another commenter supported the use of resources, but recommended that States be given additional time to comply.

Response: We agree with commenters that requiring the inclusion of resources as part of required elements of guidelines would be inconsistent with widely-accepted guidelines' models which do not consider resources and that the existence of valuable resources should more appropriately be used in rebuttingguidelines amounts. Consequently, we have deleted this requirement from õ302.56(c)(1) in the final rule. However, States which currently consider resources as part of their guidelines' formula may continue to do so. Also, States, in developing or revising existing guidelines, may establish elements, including consideration of resources, in addition to the minimum Federal requirements. While supporting studies and technical assistance, OCSE has not and does not now endorse or favor any particular guidelines model, leaving that choice to State discretion.

5. Comment: We received many critical comments regarding the proposal that States' guidelines provide for coverage of the child or children's health care needs, including health insurance when available to either parent at reasonable cost as defined in õ306.51(a). Several commenters felt it was inappropriate to require that the custodial parent provide health insurance coverage under the guidelines. A number of commenters pointed out that it would be necessary to seek legislation, long after the statutory effective date of mandatory guidelines, for the authority to implement this proposed requirement, which could jeopardize the entire guidelines. These commenters urged that the requirement be dropped, or that States, at the very least, not be required to meet this provision until guidelines are revised as a result of the first mandatory four-year review. Several commenters argued that this health care provision is not authorized by either the Child Support Enforcement Amendments of 1984 or Pub. L. 100-485. Others agreed that the medical support requirement, while a positive step forward, could not have reasonably been inferred from the statutory language governing guidelines.

Some commenters emphasized that current Federal regulation at õ306.51 requires States in AFDC or Medicaid-only cases, and with the custodial parent's consent in non-AFDC cases, to petition the court or administrative authority to include health insurance that is available to the absent parent at reasonable cost in new or modified support orders. These commenters argued that addressing health care needs in guidelines is duplicative and unnecessary and that extending this policy to all new and modified orders in the State (not just orders in IV-D cases) is a major change which should be based on a congressional mandate. One commenter, however, indicated that it is especially important to include consideration of children's health care needs, while stressing that States should have discretion in determining how to provide for such needs.

Response: Section 104 of Pub. L. 100-485 requires that all support orders in the State (i.e., orders in non-IV-D as well as IV-D cases) be established using guidelines as a rebuttable presumption that the amount which would result from the application of the guidelines is the correct amount of child support to be awarded. We do not believe that we have exceeded our authority under section 1102 of the Act by requiring State guidelines to take into consideration the child(ren)'s health care needs. Medical support, i.e., providing for a child's health care needs, is an integral part of any child supportaward, and as such, should be addressed as part of the State guidelines for setting all child support award amounts in the State.

The Federal regulation at õ306.51 (to be redesignated as õ303.31 effective October 1, 1990 (54 FR 32264)) does require, unless the custodial parent and child(ren) have satisfactory health insurance other than Medicaid, IV-D agencies to petition for health insurance that is available to the absent parent at reasonable cost in seeking new or modified support orders in IV-D cases. Because we agree with commenters that these requirements should ensure that the resulting order will address the health care needs of the child(ren), we have deleted the proposed requirement that guidelines require support orders to require health insurance when it is available to either parent at reasonable cost. Therefore, õ302.56(c)(3) now requires guidelines to provide for coverage of the child(ren)'s health care needs.

After reviewing comments and the various ways some States have addressed medical support, we have decided not to require health insurance to be included in the guidelines at this time. Section 302.56(c)(3) now requires guidelines to provide for the child(ren)'s health care needs, through health insurance coverage or other means. Some States, for example, have health insurance in their laws that are separate from, but equal to, their guidelines. We will carefully monitor States' progress in including health insurance in child support orders. If States do not show significant progress within a year, we will issue a notice to amend the final rule incorporating health insurance into the guidelines.

Including employer subsidized health insurance at a low cost to the employee is a cost effective way to provide medical support.

Many absent parents have new families; they can often cover their non-custodial children at no added cost to themselves. Additionally, many employers provide family coverage at no or nominal cost to the employee.

Some State guidelines allocate uninsured health costs between parents, without making health insurance a presumption. Omitting health insurance increases the financial risk on both absent and custodial parents. Omitting health insurance also increases work loads for State Medicaid agencies' third party liability units. It is much easier for these agencies to collect from an insurance company than absent parents.

6. Comment: Several commenters asked whether the guidelines themselves need to address health insurance if the State provided a mechanism in another part of State law to accomplish this purpose.

Response: The guidelines themselves must provide for the health care needs of the child(ren) as required under õ302.56(c)(3).

7. Comment: A commenter asked if the proposed requirement means that health care needs and insurance premiums must be factored into the guidelines formula itself or that the judge or referee should be made aware of the need to address such needs inthe order.

Response: States have flexibility to determine how their guidelines will provide for the health care needs of the child(ren) as long as the requirements of õ302.56(c)(3) are met. The health care needs and insurance premiums need not be factored into the formula itself as long as the guidelines in some way address the child's or children's health care needs.

8. Comment: Several commenters suggested that Federal regulations should require non-custodial parents to provide information regarding health insurance coverage, including necessary claim forms and insurance identification numbers, at the time the order is established to ensure that the child benefits from the coverage.

Response: We do not believe that Federal regulations should establish such specific requirements to be addressed in States' guidelines. Therefore, we have not included the suggestion in this regulation. However, it would be appropriate and desirable for non-custodial parents to provide such information. We recommend that States consider the practice suggested, and we will explore other options to achieve the same end.

9. Comment: A commenter asked how the guidelines should provide for coverage of health care needs if health insurance is not available to either parent at a reasonable cost. This commenter asked if the support order should provide for cash payment for medical needs.

Response: The regulation does not specify how health care needs should be addressed, because we want to allow States flexibility to determine policy in this area. Using this discretion, if health insurance is not available, States may choose to require cash payments for medical costs, devise a formula for determining a percentage of medical costs for which either parent is responsible, or adopt other approaches which provide for the health care needs of the child(ren).

10. Comment: A commenter asked if establishment and enforcement of health care obligations would be an allowable IV-D cost.

Response: Yes, Federal funding is available for costs associated with medical support activities required under Federal regulations.

11. Comment: One commenter requested action at the Federal level to remedy situations in which employers, in efforts to reduce costs, have restricted dependent coverage to situations where children reside in the obligor's home. The commenter indicated that the result is that many children are covered only by Medicaid in AFDC cases, and have no coverage at all in non-AFDC cases.

Response: We agree that such restrictions can prevent obligors from providing health insurance coverage which would otherwise be available for their children. However, this problem cannot be addressed in this regulation and would more likely require State or federal legislation to prohibit such practices.

Four-year Review of Guidelines

1. Comment: A commenter asked that the regulation at õ302.56(e) clarify that the guidelines must not only be reviewed, but modified, as appropriate, every four years.

Response: We agree that the intent of four-year review of guidelines is to ensure that the guidelines remain relevant to the needs of children. Consequently, we have added a requirement that guidelines be modified, if appropriate, at least once every four years.

2. Comment: One commenter asked for clarification about when the first four-year review would have to be conducted: four years from October 1, 1987, the discretionary guidelines effective date, or from October 13, 1989, the effective date for mandatory guidelines.

Response: The initial four-year review and revision of guidelines must be completed by October 13, 1993.

Findings that the guidelines amount would be unjust or inappropriate in a particular case

1. Comment: We received many comments regarding the proposed regulatory language at õ302.56(g) which required a written finding on the record to justify the rebuttal of the guidelines in a particular case. These commenters pointed out that the statutory language at section 467(b)(2) provided for "a written finding or specific finding on the record," and argued that Congress intended that not all findings of rebuttal be in written form as long as they are part of the administrative or judicial record. Other commenters pointed out that under most State rules of civil procedure, either party may request written findings.

Response: We agree with these commenters and have added the words "or specific" to õ302.56(g) to clearly reflect the statutory language.

2. Comment: A number of commenters felt that õ302.56(g) should not include language which would allow States to develop criteria for rebuttal. These commenters reasoned that State input should be limited to establishing guidelines which are as comprehensive as possible so that a deviation, or rebuttal, would be rarely needed. They maintained that rebuttal should be determined by the courts, since reasons for rebuttal would be so unusual that no set of criteria could adequately define such reasons. Another commenter stated that developing all-inclusive written criteria is an impossible goal and asked for clarification of the extent and meaning of the requirement that rebuttal be based on criteria established by the State. The commenter urged that the State be required to establish a broad-based set of criteria which allow for actual consideration of the facts in a particular case (i.e., that the findings themselves be specific, not the criteria for rebuttal).

Response: Section 103(a) of Pub. L. 100-485 requires afinding that application of the guidelines would be unjust or inappropriate in a particular case, as determined under criteria determined by the State. Therefore, we cannot delete the requirement from the regulation.

We agree that the guidelines developed by the State should be as comprehensive as possible so as to minimize the number of cases which would be subject to rebuttal. While it is up to States to determine how specific State criteria should be, rebuttal criteria should be established in consultation with the courts and administrative review authorities to ensure fairness in the rebuttal process.

3. Comment: We received many comments regarding our proposed requirement that any criteria for rebuttal must be based on the best interests of the child. Many commenters were critical of this provision because they felt that Congress intended States, not the Federal government, to develop criteria for rebuttal. In addition, commenters stated that the provision was in conflict with the statutory authority that application of the guidelines would be considered unjust or inappropriate in a particular case.These commenters believe that Congress intended that there would be cases where application of the guidelines would be unjust or inappropriate for the obligor and that rebuttals would generally result in amounts below those required under the guidelines. They argued that providing a lesser amount of support would never be in the best interests of the child, while providing a higher support award would always be in the best interest of the child. Several commenters suggested that the language be changed to "State criteria to determine the appropriateness of applying the guidelines should include, but not be limited to, the child's best interests."

Response: Since support awards are established to provide for children's needs, we believe that requiring States to include consideration of the child's best interests is basic to any criteria for rebuttal and, therefore, not inconsistent with congressional intent that States establish criteria for rebuttal.

While we agree that there may be circumstances that warrant an award amount lower than that required by guidelines, we believe that such an award could be justified by the individual case circumstances and still be in the best interests of the child.

We have, however, revised the language in paragraph (g) to require State criteria for rebuttal to take into consideration the best interests of the child. Taken as a whole, the grounds for rebuttal may not be inconsistent with the best interests of the child. This will ensure that the child's best interests are a primary consideration in any decision to deviate from the guidelines amount, while allowing for other valid factors to be considered.

4. Comment: Other commenters were concerned that requiring the criteria for rebuttal to be based on the best interests of the child was not sufficient. They recommended that the regulation specify that States cannot tie support to visitation;that guidelines should not be used in joint custody situations; and that second families of the obligor not constitute grounds for rebuttal.

Response: Since visitation and child support are separate issues and should be considered separately, payment of support should not be conditioned on visitation rights. With respect to joint custody situations, States should consider such arrangements in developing their guidelines and rebuttal criteria. Because the Congress required that guidelines be applied to all orders in the State and directed States to establish rebuttal criteria, we have not revised this regulation to address criteria for rebuttal beyond reference to consideration of the child's best interests. Therefore, it is up to the individual States to consider obligors' second families and non-traditional custody arrangements in developing guidelines and rebuttal criteria.

5. Comment: Many commenters felt that courts would be required to go into too much detail to justify rebuttal, and were concerned that the regulatory requirements for written findings would constitute an undue burden on courts and administrative review authorities. Many were also concerned that, contrary to congressional intent, these burdens would severely limit judicial discretion, create extraordinary workloads and staggering cost increases to taxpayers, and cause lengthier court hearings, findings and orders. In addition, they were concerned that the requirements may result in loss of good will by judges towards guidelines, resulting in lack of compliance. One commenter acknowledged that such strict requirements would limit the circumstances under which the courts will order any variation from the guidelines amount. Others argued that OCSE, by specifying detailed requirements for the content of findings justifying deviation from the guidelines, was usurping a decision process Congress gave to the States by requiring States to establish criteria for such findings. One commenter strongly opposed such strenuous criteria for rebutting guidelines at such a late date and urged that the requirement be delayed at least 6 to 12 months to allow development of procedures.

Many commenters were concerned that including the value of property in the findings to rebut the guidelines, proposed under õ302.56(g), would cause courts serious problems in attempting to ascertain the property value and how it related to other support. Another commenter urged that we eliminate reference in paragraph (g) to "value of any property" 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". The commenter maintained that including this language would encourage judges and attorneys to permit trade-offs between child support amounts and property settlements. The commenter stated that such trade-offs can screen evasion of the guidelines and complicate a periodic review and adjustment process, even if the value of an initial trade-off is clearly stated. Finally, the commenter indicated that this approach is a problematical legal practicesince child support is under the continuing jurisdiction of the court, and is therefore theoretically modifiable at any time, whereas a property settlement cannot be modified retroactively (absent fraud or misrepresentation).

Response: As one commenter acknowledged, the requirements for findings rebutting the guidelines amount are intended to limit the circumstances under which deviations will be allowed. Deviations from the guidelines amount should occur only in a limited number of cases because Congress required guidelines to be applied as a rebuttable presumption in setting support awards. Therefore, deviations from those guidelines should only occur infrequently and then only when judges or other officials can justify them. If deviation is truly warranted, justifying the deviation should certainly be possible.

However, we agree that the regulation as proposed imposed a considerable burden on courts and administrative authorities. We have, therefore, revised paragraph (g) to delete reference to the value of property and items conveyed in lieu of support and now require findings that rebut the guidelines to state the amount of support that would have been required under the guidelines, and include a justification of why the order varies from the guidelines.

6. Comment: A number of commenters were concerned that the requirements for findings of rebuttal would create major problems in cases where both parties reach a stipulated agreement and currently there is no hearing or finding made on the record.

Commenters asked if the requirements in õ302.56(f) and (g), with respect to using guidelines as a rebuttable presumption in any judicial or administrative proceeding for the award of child support and findings justifying deviation from the guidelines, apply to orders reached through stipulated agreement. These commenters maintained that requiring judges or administrative hearing officers to detail a rebuttal of the guidelines in these instances, where both parties agree beforehand, would significantly increase the amount of time spent on such cases, to the detriment of other, more complex cases. The commenters suggested that we add clarifying language that limits application of paragraphs (f) and (g) to matters in which there is a dispute. One commenter suggested that application of the guidelines not be construed to impair the rights of parties to enter into stipulated agreements and orders reached through stipulated agreement not be subject to detailed rebuttal as long as certain conditions designed to protect the children are met. The commenter suggested conditions contained in its State law under which 1) parties acknowledge that they are fully informed of their rights and declare that the children's needs will be adequately met; and 2) rights to support have not been assigned to the State and no public assistance application is pending. The commenter also indicated that under its State law, if the support amount agreed to is below the guidelines amount, no change in circumstances is necessary to obtain a modification.

Response: Under paragraph (f), the State must provide thatthere 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 State's guidelines is the correct amount of child support to be awarded. Paragraph (g) requires a written finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate in a particular case. That finding must state the amount of support that would have been required under the guidelines and must include a justification of why the order varies from the guidelines. We do not believe that support orders entered as a result of stipulated agreements are, or should be, excluded from the requirements of paragraphs (f) and (g). The State's guidelines must be a rebuttable presumption in any award of child support in the State. That includes support obligations ordered by the court or administrative authority as a result of stipulated agreements reached by the parties. Once the court or administrative entity empowered to set support orders enters an enforceable support order, all requirements under õ302.56 apply, regardless of whether or not the amount ordered was reached through stipulated agreement.

We disagree, however, that this should be a burden on the courts. Since the amount indicated under the guidelines must be a rebuttable presumption in any child support order, most obligations reached through stipulated agreements should be in the amount specified under the guidelines. In those instances that they are not, States could require the parties or their representatives to indicate in the agreement the amount that would have been required under the guidelines and a justification of why the amount agreed upon varies from the guidelines. Entering the order and including the rationale for deviation provided by the parties in the record would meet the requirements under paragraphs (f) and (g). In this way, the court or administrative authority's role is limited to a decision, based on the submitted rationale, that the deviation is warranted and that the child's needs will be met.

We agree that application of the guidelines does not impair the rights of parties to enter into stipulated agreements. However, orders entered as a result of stipulated agreements are nevertheless child support orders in the State and subject to the guidelines requirements. In addition, a statement by the parties that they were fully informed of their rights, that they were not coerced into the agreement, or that the children's needs will be adequately met does not satisfy the statutory requirement that guidelines must apply to all orders entered in the State and that the amount indicated by the guidelines must be a rebuttable presumption in ordering support.

We agree with the commenter that modification should be allowed in these cases, regardless of whether or not there is a change in circumstances, if the support award amount agreed to by the parties is below that which is required under the guidelines. Therefore, we encourage States to adopt laws and procedures underwhich inconsistency with the guidelines amount is adequate grounds for modification of such orders upon request. States should also note that section 103(c) of Pub. L. 100-485 requires periodic review of support orders and modification, if appropriate, in accordance with State guidelines for support award amounts, effective October 13, 1990. While final regulations implementing this provision have not yet been published, the statute, on its face, requires modification of support orders which are inconsistent with a State's guidelines.

7. Comment: Several States were concerned regarding the cautionary language in the preamble to the NPRM regarding problems where some States have "more restrictive" procedures with respect to allowing deviations from the guidelines amount. One State believed that the language could be read to bring into question its clear and convincing evidentiary standard for rebuttal of its guidelines. Several other commenters felt that Congress intended to set minimum standards for rebuttal, but not to forbid stronger standards, including the absence of any grounds for rebuttal. The commenter indicated that six States have already adopted standards that do not allow deviations from the guidelines, particularly with regard to administrative orders, or that severely limit deviations.

Response: States have considerable leeway in establishing criteria for rebuttal, as long as these criteria are established by the State and take into consideration the best interests of the child. However, the absence of any grounds for rebuttal would appear to be inconsistent with the statutory language and the intent of Congress that guidelines be used as a rebuttable presumption in the establishment and modification of all orders in the State. Section 467 of the Act does not allow State guidelines which are applied in all cases with no opportunity for rebuttal of the amount indicated under the guidelines.

8. Comment: One commenter indicated that its State law currently requires judges to make written findings of fact when deviations from the guidelines are made. However, this commenter claimed that a review of orders showed that judicial compliance is sporadic, and asked how IV-D agencies can assure compliance by judges who are not under IV-D control.

Response: State law, not the State IV-D agency, compels compliance by judges. However, there may be a need for judicial education to foster awareness of the seriousness of the non-support problem, and IV-D agencies should appeal rulings which are not in conformance with State law regarding application and rebuttal of guidelines. Further, a determination as a result of an audit in the future that the State's IV-D program fails to comply with Federal requirements governing mandatory guidelines could result in assessment of a financial penalty against the State of between one and five percent of Federal funding under the State's AFDC program.

Data collection and analysis for first four-year review of guidelines

1. Comment: Many commenters urged us to delete the requirements for collection and analysis of data regarding the proportion of orders being issued under the guidelines that have been rebutted and the reasons for rebuttal. These commenters strongly objected to this requirement as excessive, inefficient, and an infringement on judicial powers. They argued that it would impose an unreasonable burden on the judicial and administrative systems, including a major financial impact. Many felt that it would necessitate an entirely new system of recordkeeping and that the data would have to be compiled manually for every support order, because, although the number of cases and deviations is measurable, measuring the "reason" for deviation is extremely labor intensive. Other commenters responded that the data collection and analysis would be possible only if statistical sampling techniques were allowed or if additional Federal resources are provided. Another commenter asked if the gathering of data must be from all State jurisdictions, or if States have the flexibility to select a smaller number. One commenter urged that the requirement be deleted and that the focus of the regulation be to require that deviations only be made in unusual cases. The current rule in this commenter's State defines categories for "unusual circumstances" as "clear and convincing evidence that manifest injustice would result". A commenter stated that the proposal failed to recognize that States are fully capable of reviewing and revising guidelines as appropriate to State circumstances.

Response: There is no intent in this regulation to limit judicial discretion. The purpose of establishing guidelines as a rebuttable presumption is to ensure that each State has a consistent policy which provides for adequate support of children. Congress would not have provided for rebuttal of the guidelines' amount if it intended to limit judicial discretion.

In response to the commenter's concern that the regulation focus on limiting deviations and delete data analysis of application of the guidelines, we offer the following. This regulation does limit deviations to unusual circumstances. However, we believe that any legitimate review of guidelines would include analysis of case data on the application of their guidelines, as well as analysis of current economic data on the costs of raising children, to determine if the guidelines are adequate or should be modified in any way and that deviations are limited and justified. Requiring such analysis will ensure informed decision-making as a result of the review process.

While we believe that data analysis is integral to any review and modification of guidelines, we agree that States should determine how to conduct their data gathering and analysis. Consequently, we have revised paragraph (h) to require States, as part of any review of guidelines, to analyze economic data on the costs of raising children and case data, gathered through statistical sampling or otherwise, on application of, and deviations from, the guidelines. Under this approach, States maysample cases within a representative sample of jurisdictions within the State. We believe that this approach would be an efficient use of State resources.

2. Comment: A commenter asked whether the State would be expected to lower guidelines' levels if the data indicates that judges are consistently ordering amounts less than the guidelines. This commenter stated that it is rare for rebuttals to be for higher amounts.

Response: Each State will be responsible for gathering and analyzing data. The State must determine, using its analysis, if the data supports no change, a reduction, or an increase in guidelines' amounts. Guidelines must be revised, if appropriate, based on the State's analysis and decision-making process.

3. Comment: One commenter asked if the review is limited to IV-D cases only, or all cases, and indicated that the IV-D agency lacked authority to gather data on non-IV-D cases.

Response: The gathering and analysis of data, subject to sampling techniques discussed above, must focus on all support awards in the State. How the State meets this requirement is up to the State. However, Federal funding of allowable costs of meeting the requirement will be available.

Paperwork Reduction Act

Comment: One commenter claimed that the Paperwork Reduction Act estimate of 20 hours is totally inadequate and unrealistic because of the increase in documentation necessary for findings justifying deviations from guidelines' amounts. The commenter indicated that the one-time workload does not address the four-year reviews of guidelines, much less that initial review under paragraph (h) includes non-IV-D as well as IV-D cases. Another commenter argued that development of criteria is not a one-time burden and that the data collection requirement has not been addressed.

Response: In response to these comments we have revised the one-time burden associated with establishing criteria for rebuttal to 40 hours and added a burden of 10 minutes per case for findings of rebuttal. We continue to hold that establishment of the rebuttal criteria is a one-time burden, which must be accomplished at the time the guidelines are established. As indicated at the outset of this preamble, comments on these information collection requirements may be submitted to OCSE or OMB. Compliance with these burdens is not required until they are approved by OMB at which time a notice will be published in the Federal Register.With respect to the burden of written findings of rebuttal, we believe the burden is not excessive because deviations from guidelines amounts should be the exception not the rule, and findings and records of judicial or administrative proceedings are already required under State law. The Federal requirements are not specific or extraordinary enough that they would not already be included in findings developed to justify judicial or administrative determinations in awardingchild support. We have estimated the burden as follows. Based on census data, 1.5 million orders were established in the United States in 1989. We estimate rebuttal of the guidelines in only 10 percent of those orders or 150,000 orders a year. Because any records of a hearing to establish a support order would contain the rationale for reaching a specified amount, the main burden placed on States by this rule is to include in the findings the amount that would have been ordered under the guidelines. If the time needed to meet this requirement is approximately 10 minutes per case, the total burden for all States as a result of the requirements for the contents of findings of rebuttal in paragraph (f) would be about 25,000 hours.

In addition, in response to the comment that the 100-hour burden to gather data for analysis of guidelines does not take into consideration the fact that both non-IV-D and IV-D cases must be included, we have retained the 100-hour burden estimate because by allowing sampling, the burden on States should be limited.

III. State Laws Providing for Paternity Establishment

Section 302.70 - Required State Laws.

Comment: One commenter pointed out that a State Supreme Court recently had rendered an opinion that a proposed State law reviving previously dismissed paternity cases would be unconstitutional under the State Constitution. The commenter asked if that State will be required to amend its constitution and what OCSE would do if the State legislature enacts the required law and it is struck down by the State Supreme Court.

Response: Section 466(a)(5) of the Act, as amended by section 111(b) of Pub. L. 100-485, and the implementing regulation at õ302.70(a)(5)(i) require the State to enact legislation and implement procedures for the establishment of paternity for any child at least to the child's 18th birthday, 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. This requirement is effective August 16, 1984, the enactment date of the Child Support Enforcement Amendments of 1984 (Pub. L. 98-378).

A State that does not comply with this State plan requirement, through enactment and implementation of required State laws or approval of an exemption from doing do, in accordance with õ302.70, could be found not to have an approvable State IV-D plan which is a prerequisite to receipt of Federal funding under title IV-D of the Act. Instructions for applying for an exemption are set forth in OCSE-AT-88-19, dated December 22, 1988. The State could also lose a portion of Federal funding under title IV-A of the Act for failure to have an approved State IV-A plan, a condition of which is having an approved State IV-Dplan.

Section 303.5 - Establishment of paternity

1. Comment: Several commenters expressed concern over the provision in õ303.5(d) that the IV-D agency shall require all parties to submit to genetic testing upon the request of any party to the contested paternity. Several commenters requested that we revise õ303.5(d) to require the court or administrative process rather than the IV-D agency to be responsible for requiring the parties to submit to genetic testing. A commenter stated that its State does have a law in effect to meet the requirement in section 111(b) of the Family Support Act of 1988 for requiring the genetic tests upon request but the court rather that the IV-D agency has the authority to compel parties to submit to the genetic tests. Commenters argued that the IV-D agency does not have the authority to order genetic testing; only a judge can impose such an order. The commenter noted that the IV-D agency, however, can (and does) seek such an order. Finally, a commenter suggested we replace in õ303.5(d) the term "the IV-D agency" with the term "the State."

Response: Section 466(a)(5)(B), added by Pub. L. 100-485, requires each State to have in effect laws requiring the use of procedures under which the State is required, with certain exceptions, to require the child and all other parties to submit to genetic tests upon the request of any party, effective November 1, 1989. That requirement is implemented inõ302.70(a)(5)(ii). Therefore, State law must require the State to mandate such testing upon request, and any entity (the court or otherwise) with the authority to order such tests must do so in accordance with State law. However, in response to the commenter's concerns, we revised proposed õ303.5(d) (redesignated as paragraph (d)(1)) to require the IV-D agency to petition the court or administrative process authority to require all parties in a contested paternity case to submit to genetic testing upon the request of any party.

2. Comment: One commenter requested clarification about whether the IV-D agency may request genetic testing of all parties in a contested paternity case or whether requests are limited to the mother, alleged father or child. Another commenter asked if the IV-D agency, when it is a party in a contested paternity case, must submit to genetic tests.

Response: The IV-D agency may be a party to a contested paternity case in IV-D cases, and may request the other parties to submit to genetic testing. The IV-D agency is not required to submit to the genetic testing itself, for obvious reasons.

3. Comment: One commenter recommended that the exemption from genetic testing for AFDC recipients who have been determined to have good cause for failure to cooperate under 45 CFR 232.40 through 232.49 should also include Medicaid recipients who have been determined under 42 CFR 433.147(c) to have good cause for failure to cooperate.

Response: We are using our authority under section 1102 of the Act, which requires the Secretary to make and publish such rules and regulations, not inconsistent with the Act, as may be necessary to the efficient administration of the Act, to revise õõ302.70(a)(5)(ii) and 303.5(d). Therefore, under those paragraphs, the IV-D agency is not required to petition the court or administrative authority to require all parties to a contested paternity case to submit to genetic testing in the case of a Medicaid recipient who, under 42 CFR 433.147, is determined to have good cause for refusing to cooperate. We also clarified in those paragraphs that IV-D agencies need not petition for genetic tests in any case in which it has determined that establishing paternity would not be in the best interest of the child in any case involving incest or forcible rape. This is consistent with the current language in õ303.5(b).

4. Comment: One commenter objected to the requirement that testing should automatically proceed upon "request." The commenter argued that a mere request, without other foundation, cannot suffice as a basis for court-ordered blood testing; such an order requires a preliminary showing of probable cause. The commenter urged that, at the very least, a verified complaint or sworn affidavit signed by the moving party should be required before testing can be ordered.Several commenters requested clarification about whether children who are born in wedlock, or who otherwise have had paternity established, would be exempt from mandatory genetic testing. One commenter requested clarification about whether a State law which presumes paternity for children conceived after the date of a valid marriage would be valid under the proposed rule. Another commenter cited case law under which, once paternity has been established (through acknowledgement, a previous contested case or by describing the child as a marital child in a divorce decree), the father cannot later challenge a child's paternity. This commenter also said that there has been an increasing number of third-party challenges, although courts have been reluctant to allow these challenges. One commenter expressed concern that the requirement for paternity testing not be used as a springboard for requests for testing in the face of contempt or modification proceedings. An additional commenter cited the example where, to overcome the presumption of legitimacy of a child born in wedlock, proof beyond a reasonable doubt is required, so the husband must be tested to exclude the possibility of his paternity of the child before any other alleged father would be tested. The commenter also indicated that the testing may be inappropriate if the husband had been holding himself out as the father and/or if the husband has created a parent-child relationship that constitutespaternity by estoppel.

Several commenters suggested we define "contested paternity action" in the regulation to be any action in which the issue of paternity may be validly raised under State law and explain in the preamble that a "contested paternity action" not include an action in which the issue of paternity is foreclosed by resjudicata or by applicable State law regarding estoppel and presumptions of paternity. One commenter suggested we add the phrase "which is allowable under State law" in õ303.5(d) after "upon the request of any party in a contested paternity case." Another commenter suggested we define a contested paternity case to be a case in which there has been a child born out of wedlock, where the putative father refuses to admit his paternity in the context of a pending administrative or judicial proceeding to adjudicate parentage, and where State law creates neither a presumed father nor a situation giving rise to paternity by estoppel.

Response: In response to these concerns, we added õ303.5(d)(2) under which a contested paternity case is defined as any legal action in which the issue of paternity may be raised under State law and one party disputes paternity.

If paternity has already been established, it stands to reason that no party to the prior paternity action, nor any third party,can later request the IV-D agency to require all parties to submit to genetic testing because there is no contested paternity case. We believe this would preclude a request for genetic testing when a case with paternity already established is in contempt or modification proceedings.

We do not believe that a contested paternity action would include an action in which the issue of paternity is foreclosed by res judicata or by applicable State law regarding estoppel and presumptions of paternity. A State's definition of a contested paternity case as a case in which there has been a child born out of wedlock, where the putative father refuses to admit his paternity in the context of a pending administrative or judicial proceeding to adjudicate parentage, and where State law creates neither a presumed father nor a situation giving rise to paternity by estoppel would be allowable under the regulation. Given differing State laws on this issue, we believe it is best to allow States to define a contested paternity action.

5. Comment: Some commenters asked how the IV-D agency is to proceed with paternity establishment cases in which the AFDC agency has sanctioned the AFDC recipient for failure to cooperate.

Response: The IV-A agency is required, in õ232.45(c), to promptly report to the IV-D agency all cases in which the IV-Agency has determined that there is not good cause for refusing to cooperate. The IV-D agency must then proceed to attempt to establish paternity. If a putative father has been identified, the IV-D agency should petition the court or administrative authority to require all parties to submit to genetic testing.

6. Comment: Several commenters recommended that children

under six months of age be excluded from mandatory genetic testing. Commenters suggested we allow deferral of testing until the child is six months of age if the custodial parent, doctor or the laboratory determines the delay is in the child's best interest. One commenter recommended that the preamble explain that genetic tests should be performed as soon as possible aftera request for such tests, when consistent with scientific standards applicable to the particular test involved. Other commenters pointed out that the immediate genetic testing of infants conflicts with the case processing standards for paternity establishment in Federal regulations which allow a State to wait six months after birth to commence testing and requested we revise the provision to be in line with the program standards final rule.

Response: We realize that the genetic tests used by some States require the child to be at least six months old. At this time, we are not mandating the use of DNA testing which does not require the child to be six months old. Instead, we believe that genetic tests should be performed as soon as possible after a request for such tests, consistent with the scientific standards applicable to the particular test involved.

We would point out that the requirement for mandatory genetic testing under õ303.5(d) does not include a timeframe for performing those tests. However, õ303.5(a)(2), which was published as part of the final program standards regulation in the Federal Register on August 4, 1989 (54 FR 32284) and is effective October 1, 1990, includes the timeframe for paternity establishment, or exclusion of an alleged father as a result of genetic tests, and will permit a delay in genetic testing until the child is six months old. Therefore, we do not believe any change to õ303.5(d) is necessary.

7. Comment: One commenter suggested we revise the cooperation regulations in 45 CFR 232.12 and 42 CFR 433.147(e) to clarify that: 1) the custodial parent would not be held responsible for the refusal to submit to genetic testing by the alleged father or by the child; 2) the custodial parent's refusal to have genetic testing done on a child under six months of age would not be considered failure to cooperate; and 3) the genetic testing must be done at a reasonable time and place with the custodial parent provided transportation costs to the test site.

Response: Revising the AFDC and Medicaid regulations on recipient cooperation in establishing paternity and obtaining support is beyond the scope of this regulation. While it is logical that genetic testing be done at a time and place convenient for the custodial parent, it is up to the individual State to determine genetic testing procedures.

8. Comment: Several commenters requested we require States to enact laws mandating courts to admit genetic test results as evidence in contested paternity cases. Other commenters requested that the genetic tests be admissable in court or administrative proceedings as presumptive evidence of paternity. But another commenter pointed out that genetic test results alone are not necessarily conclusive on the question of paternity, since additional evidence could also be considered, such as evidence concerning the conception date and testimony that the mother and alleged father had a sexual relationship during the period of conception.

Another commenter recommended that the regulation direct theIV-D agency to submit the genetic tests results to the court pursuant to State laws, and that OCSE encourage States to provide for admissibility of genetic test results, since it would be counterproductive to require genetic tests and not allow the admissibility of their results.

Response: Although the House bill would have required the use of a 95 percent probability index from blood tests as a rebuttable presumption of paternity, the Congress did not adopt the provision as part of the Family Support Act of 1988. While we are not requiring States to enact legislation mandating courts to admit genetic tests as presumptive evidence of paternity, we encourage them to do so and agree that it would be counterproductive for courts to require genetic testing and not allow the admissibility of their results.

9. Comment: One commenter asked if an alleged father who is excluded by conventional blood testing could be required to submit to other advanced forms of genetic testing if requested by a party to the action, and if so, under what conditions would the subsequent testing be required.

Response: The State may determine whether the alleged father excluded by conventional blood testing would be required to submit to other advanced forms of genetic testing if so requested by another party to the paternity action. The State's decision would be based upon State law, case law, or the policies and procedures of the agency with authority to compel submission to the tests.

10. Comment: One commenter requested that a mechanism be developed where non-AFDC IV-D applicants who pay for genetic tests be reimbursed if they later go on welfare or medical assistance. Additionally, this commenter requested clarification about whether an individual who is receiving IV-D services and who is on medical assistance would be charged any fees for genetic testing.

Response: In response to the latter comment, we revised the proposed first sentence in õ303.5(e), redesignated as paragraph (e)(1), to exempt Medicaid recipients from the fee for the costs of performing genetic tests, using our authority under section 1102 of the Act to do so.The IV-D agency is required to reimburse non-AFDC IV-D applicants who pay for genetic tests and then later receive AFDC or Medicaid when the costs of the tests are recovered from the party who denied paternity in accordance with õõ303.5(e)(3) and (4).

11. Comment: One commenter suggested that the fee for performing genetic tests should be limited to $25, as is the practice with other parts of the statute where fees are authorized, and that the fee be based upon a sliding scale based on income. The commenter cited court cases where prohibitive fees were found to be unconstitutional if they prevented the mother or the alleged father from using the option of obtaining lab results. One commenter recommended that we encourage, in the preamble, that States which elect to charge a fee should establish a fee schedule, based on the parent's income, that doesnot exceed the actual costs of performing the tests. Several commenters expressed concern that States opting to charge non-AFDC IV-D clients fees for genetic testing could actually discourage paternity establishment and could force some low-income families onto AFDC. Several commenters objected to the language in the preamble that they thought implied that mothers are frivolously taking actions to establish paternity.

Response: Section 454(6) of the Act, which governs provision of IV-D services in non-AFDC cases, imposes statutory limits of $25 for the application fee and $25 for the Federal income tax refund offset process. Section 454(6) of the Act, as revised by Pub. L. 100-485, did not set such a limit for the fee for performing genetic tests, which are more costly than $25, but rather allowed a fee which is in accordance with regulations of the Secretary of HHS. Any individual who is not a recipient of AFDC or Medicaid may be charged the genetic testing fee. In an AFDC or Medicaid case, a State may charge an alleged father, who is not an AFDC or Medicaid recipient himself, the genetic testing fee.

States electing to charge such fees may set a flat fee or may establish a fee schedule based on income. However, we are requiring, under õ303.5(e)(2), that any fee charged must be reasonable so as not to discourage those in need of paternity establishment services and may not exceed the actual costs of the genetic tests.

Finally, we did not intend for commenters to infer that IV-D recipients make frivolous accusations of paternity. As indicated in the preamble to the proposed rule, we believe that charging a fee for genetic tests would reduce the incidence of contested cases by reducing frivolous denials, as well as accusations, of paternity.

12. Comment: One commenter suggested we address the issue of fees where genetic tests are performed on multiple parties, for example, in cases of a third party defendant.

Response: The State's procedures, which must be consistent with õ303.5(e), should address who is responsible for any fees charged in situations of multiple alleged fathers or third party defendants.

13. Comment: Several commenters requested that we require that States pay for genetic tests when the mother and/or alleged father is unable to do so.

Response: States have the option under section 454(6)(D) of the Act whether or not to impose a fee for the genetic tests on any individual not eligible for AFDC. Any fee charged must be applied Statewide. However, as discussed above, we added õ303.5(e)(2) under which any fee charged must be designed so as not to discourage requests by those in need of paternity establishment services and may not exceed the actual costs of the genetic tests.

14. Comment: Several commenters requested that we allow States to charge only 10 percent of the costs of genetic testing since the Federal government pays the other 90 percent as Federalfunding.

Response: While the Congress provided for 90 percent Federal funding of laboratory costs related to paternity establishment in section 112 of Pub. L. 100-485, it authorized States to charge individuals not receiving AFDC a fee for genetic tests in section 111(c) of that law. In so doing, it appears that Congress acknowledged that those who are not receiving public assistance may be held responsible for genetic testing costs.

15. Comment: One commenter requested we revise the last sentence of õ303.5(e) to require the IV-D agency to attempt to obtain a judgment for the costs of the genetic tests from the contesting party because, in some cases it may be the mother who is denying the paternity of the father, and the mother in such a case should be the one against whom the costs should be sought.

Response: We agree that there may be instances in which a mother denies the claim of a man that he is the father of her child and insists upon genetic testing, and the genetic test results indicate that he is the father. Therefore, we have replaced "putative father" with the words "party who denied paternity" in paragraph (e)(3) to ensure that a judgment is sought against the contesting party in these instances. For consistency, we are making a similar change to 303.7(d)(3) which required a responding State IV-D agency to attempt to obtain a judgment for the costs of genetic testing from the putative father if paternity is established in the responding State.

16. Comment: Two commenters requested clarification about whether, when paternity has been established and genetic testing was used, there will be a presumption that paternity was established as a result of genetic tests or the case record will have to state that paternity was established as a result of genetic testing before the IV-D agency is required to pursue a judgment for the costs. One of the commenters recommended we revise õ303.5(e) to require the IV-D agency to attempt to obtain a judgment for the costs of the genetic tests from the putative father in any case where paternity is established and genetic testing was completed, since courts do not establish paternity on the basis of genetic tests alone.

Response: In response to comments, we are requiring under paragraph (e)(3) that the IV-D agency must attempt to obtain a judgment for the costs of the genetic tests from the party who denied paternity in any case in which paternity is established and genetic tests were performed. This revision clarifies that the case record would not need to indicate a presumption that paternity was established as a result of genetic testing before the IV-D agency is required to attempt to obtain a judgment for the costs of the genetic testing.

17. Comment: Several commenters suggested we add specific regulatory language and audit criteria to prevent States from claiming Federal funding for the costs of genetic tests already collected from the mother and/or alleged father. Additionally, several commenters asked if the mother would receive anyreimbursement of fees she paid to the State if the State recouped any of the costs of the genetic tests from the putative father.

Response: Section 304.50 requires the IV-D agency to exclude from its quarterly expenditure claims an amount equal to all fees which are collected during the quarter under the title IV-D State plan and all interest and other income earned during the quarter resulting from services provided under the IV-D State plan. Therefore, States are already precluded from claiming Federal funding for the costs of genetic tests that the State has already collected from the mother and/or alleged father.

In response to the concern that custodial parents be reimbursed for fees paid if genetic test costs are ultimately recouped, we added paragraph (e)(4) that requires the IV-D agency to use any amount recouped under paragraph (e)(3) to reimburse any fee paid by the custodial parent.

18. Comment: Several commenters requested we require that the paternity establishment fees or costs be paid by the alleged father since the genetic tests are part of the defense against paternity.

Response: We are not requiring States to charge only the alleged father the fee for genetic testing. It is up to the State to establish its policy for genetic test fees. However, under õ303.5(e)(3), if paternity is established and genetic tests are performed, the IV-D agency is required to attempt to obtain a judgment for the costs of the genetic tests from the party who denied paternity.19. Comment: Several commenters requested clarification about whether the IV-D agency is required to attempt to obtain a judgment for the costs of the genetic test from the putative father, even if the IV-D agency has opted, under õ302.33(d), to not recover costs. One commenter recommended we allow States the flexibility provided under õ302.33(d) to determine whether or not and from whom to collect costs in these cases. Another commenter wanted the State IV-D agency to be free to negotiate on all relevant factors to reach the best settlement on a case. This commenter also objected to the additional costs of tracking compliance, claiming that the administrative cost would likely negate a good portion of any recovery.

Response: The IV-D agency is required, under õ303.5(e)(3), to attempt to obtain a judgment for the costs of the genetic test from the party who denied paternity if paternity is established and genetic tests were performed, even if the IV-D agency has opted, under õ302.33(d), not to recover costs. Recoupment of the costs of genetic testing under õ303.5(e) is a separate requirement from optional cost recovery in non-AFDC cases under õ302.33(d). The requirement in õ303.5(e)(3) is similar to the requirement in õ303.7(d) under which the responding State in an interstate case must attempt to obtain a judgment for the costs of genetic tests from the party who denied paternity if paternity is established.We do not believe that requiring States to attempt to obtain a judgment for costs will negate a State's ability to negotiate for the best settlement in a case. Further, we believethat responsibility for payment of the costs of genetic testing may deter unwarranted requests for genetic tests from any party contesting paternity, whether it is the alleged father or the mother.

The administrative costs of tracking compliance need not be cumbersome. The State IV-D agency would only need to indicate in the individual case record that a judgment for the costs of genetic testing was entered. Enforcement of that judgment would be required as for any other judgment under State law.

Section 304.20 - Availability and rate of Federal financial participation

1. Comment: Several commenters requested that 90 percent Federal funding be available for expert witness costs as a reasonable program expense whether or not included as a part of the genetic testing contract.

Response: We believe that most genetic testing contracts that are negotiated will address the costs of expert witnesses. We do not believe it is reasonable to reimburse, at the 90 percent Federal matching rate, expert witness fees which are not negotiated as part of the genetic testing contract. Federal funding at the regular matching rate is available for such costs.

2. Comment: One commenter suggested that 90 percent Federal funding should be available for expert witness testimony from persons, not otherwise included in the genetic testing contracts, such as obstetricians, gynecologists, or any other person whose testimony would enhance the probability of obtaining a paternity determination.

Response: Ninety percent Federal funding is not available for all witnesses in a paternity case whose testimony would enhance the probability of obtaining a paternity determination. The Family Support Act of 1988 provides enhanced Federal funding for the laboratory costs of paternity establishment, not for all costs associated with paternity establishment.

3. Comment: One commenter recommended we revise õõ304.20(b)(2)(i)(B) and (iii) by deleting the word "blood" and inserting the word "genetic."

Response: These suggested revisions have already been made in the final regulation for standards for program operations, published in the Federal Register on August 4, 1989 (54 FR 32284), with an effective date of October 1, 1990. However, we have replaced the word "blood" with the word "genetic" wherever it appears in õ303.7(d) in this final rule because we neglected to do so in the proposed rule.

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 thisregulation requires States to notify 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 this regulation is primarily on States, this regulation 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

45 CFR Parts 302 and 303

Child Support, Grant programs--social programs, Reporting and Recordkeeping requirements.

45 CFR Part 304

Child Support, Grant programs-social programs, Federal financial participation.

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

Dated: August 16, 1990

JoAnne B. Barnhart

Director, Office of Child Support Enforcement

Approved: January 28, 1991

Louis W. Sullivan,

Secretary

For the reasons set out in the preamble, Title 45 Chapter III of the Code of Federal Regulations is amended to read 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), 1396b(d)(2), 1396b(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 õ302.56".

3. Section 302.51 is amended by revising paragraph (a) and the first sentence of (b)(1) to read as follows:

õ302.51 Distribution of support collections.

* * * * *

(a)(1) For purposes of distribution in a IV-D case, amounts collected, except as provided under paragraphs (a)(3) of this section, 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.

(2) In AFDC and title IV-E foster care cases in which conversion to a monthly amount is necessary because support is ordered to be paid other than monthly, the IV-D agency may round off the converted amount to whole dollar amounts for the purpose of distribution under this section and õ302.52 of this part.

(3) Amounts collected through Federal and State income tax refund offset must be distributed as arrearages in accordance with õõ303.72(h) and 303.102(g), respectively.

(4) 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 must be the date the wages or other income are withheld to meet the support obligation.

(5) Except with respect to those collections addressed under paragraph (a)(3) and (4) of this section:(i) Effective June 9, 1988, the date of collection for distribution purposes in all IV-D cases 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; and

(ii) Effective January 1, 1989, a State may use on a statewide basis either the definition of the date of collectionin paragraph (a)(5)(i) of this section or the date the payment is mailed, as evidenced by a legible U. S. Postal Service postmark or a legibly dated receipt from a commercial carrier, as the date of collection in all IV-D cases.

(b) * * *

(1) Of such amounts as are collected periodically which represent monthly support payments, the first $50 of any payments for a month received in that month, and the first $50 of payments for each prior month received in that month which were made by the absent parent in the month when due, shall be paid to the family. * * *

* * * * *

4. Section 302.53 is removed effective October 13, 1989.

5. Section 302.56 is revised to read as follows:

õ302.56. Guidelines for setting child support awards.

(a) Effective October 13, 1989, as a condition of approval of its State plan, the State shall establish one set of guidelines by law or by judicial or administrative action for setting and modifying child support award amounts within the State.

(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 and income of the absent parent;

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

(3) Provide for coverage of the child(ren)'s health care needs.

(d) * * *

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

(f) Effective October 13, 1989, 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 or specific 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) 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 take into consideration the best interests of the child. Findings that rebut the guidelines shall state the amount of support that would have been required under the guidelines and include a justification of why the order varies from the guidelines.

(h) As part of the review of a State's guidelines required under paragraph (e) of this section, a State must consider economic data on the cost of raising children and analyze case data, gathered through sampling or other methods, on the application of, and deviations from, the guidelines. 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 revising the introductory language to insert after "Required laws." and before the word "Effective" the clause "Unless otherwise indicated," and by revising subparagraph (a)(5) to read as follows:

õ302.70 Required State laws.

(a) Required laws. Unless otherwise indicated, effective October 1, 1985, * * *

(1) * * *

(5)(i) Procedures for the establishment of paternity for any child at least to the child's 18th birthday, 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 where the individual involved has been found under õõ232.40 through 232.49 of this title or 42 CFR 433.147 to have good cause for refusing to cooperate or if, in accordance with õ303.5(b), the IV-D agency has determined that it would not be in the best interest of the child to establish paternity in a case involving incest or forcible rape) 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 õõ303.5(d) and (e) of this chapter.

* * * * *

PART 303--STANDARDS FOR PROGRAM OPERATIONS [AMENDED]

1. 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, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), and 1396(k).

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

õ303.5 Establishment of paternity.

* * * * *

(d)(1) Upon the request of any party in a contested paternity case, the IV-D agency shall petition the court or administrative authority to require all parties to submit to genetic tests unless, in the case of an individual receiving aid under the State's title IV-A or XIX plan, there has been a determination of good cause for refusal to cooperate under õõ232.40 through 232.49 of this title or 42 CFR 433.147, respectively, or if, in accordance with õ303.5(b), the IV-D agency has determined that it would not be in the best interest of the child to establish paternity in a case involving incest or forcible rape.(2) A contested paternity case is any legal action in which the issue of paternity may be raised under State law and one party denies paternity.

(e)(1) The IV-D agency may charge any individual who is not a recipient of aid under the State's title IV-A or XIX plan a reasonable fee for performing genetic tests.

(2) Any fee charged must be reasonable so as not to discourage those in need of paternity establishment services from seeking them and may not exceed the actual costs of the genetic tests.

(3) If paternity is established and genetic tests were performed, the IV-D agency must attempt to obtain a judgment for the costs of the genetic tests from the party who denied paternity.

(4) If a custodial parent is charged a fee under paragraph (e)(1) of this section, the IV-D agency must use any amount recouped under paragraph (e)(3) of this section to reimburse any amount paid by the custodial parent.

3. Section 303.7(c) is amended by revising paragraph (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. 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 or that the payments were made through State income tax refund offset, and include the responding State's identifying code as defined in the FederalInformation Processing Standards Publication (FIPS) issued by the National Bureau of Standards or the Worldwide Geographic Location Codes issued by the General Services Administration.

* * * * *

4. Section 303.7(d) is amended by replacing the word "blood" with the word "genetic" and the phrase "putative father" with the phrase "party who denied paternity" wherever they appear.

5. Section 303.100(d)(1)(ii) is amended by inserting the 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

1. The authority citation for Part 304 continues to read as follows:

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

2. Section 304.20 is amended by adding after subsection (c) a new subsection (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 contract.

[FR Doc. 91-11289 Filed 5-14-91; 8:45 am]

Billing Code 4180-11-M