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Final Rule: Federal Parent Locator Service Fees

AT-92-01

Published: June 6, 1992
Information About:
State/Local Child Support Agencies
Topics:
Federal Systems, Federal Parent Locator Service (FPLS), Funding, Cost Recovery
Types:
Policy, Action Transmittals (AT), Regulations
Tags:
User Fees

ACTION TRANSMITTAL

OCSE-AT-92-01

July 6, 1992

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

SUBJECT:Federal Parent Locator Service Fees

ATTACHMENT:The attached regulation, published in the Federal Register on June 24, 1992 (57 FR 28103) amends Federal regulations at 45 CFR 303.70, providing for requests by the State parent locator service for information from the Federal Parent Locator Service (FPLS). The regulation requires reimbursement from the States for the use of the FPLS for cases in which there is no required assignment of support rights to the State.

The Office of Child Support Enforcement (OCSE) operates the FPLS as part of its program of assisting States in securing support for children. States have the option to pay the fees themselves or charge the individuals in the case. The user fee is anticipated to be a minimal amount not exceeding $1.00 per request.

The final regulation also revises 45 CFR 303.3, regarding the location of absent parents, by deleting õ303.3(b)(6) which had required IV-D agencies to resubmit to the FPLS the names of absent parents and alleged fathers when their location was the next enforcement step.

There is a typesetting error on page 28110, at the top of the third column. It should read "2. For the reasons set forth in the preamble, we are removing (emphasis added) 45 CFR 303.3(b)(6)."

An Action Transmittal establishing payment procedures will be issued shortly.

EFFECTIVE June 24, 1992.

DATE:

REGULATION 45 CFR 303.3 and 303.70.

REFERENCE:

RELATED OCSE-AT-90-15, dated December 15, 1990.

REFERENCE:

INQUIRIES ACF Regional Administrators

TO:

______________________________

Allie Page Matthews

Deputy Director

Office of Child Support

Enforcement

4150-04

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

Office of Child Support Enforcement

45 CFR Part 303

RIN 0970-AA78

Child Support Enforcement Program;

Federal Parent Locator Service Fees

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

ACTION: Final Rule

SUMMARY: The Office of Child Support Enforcement operates the Federal Parent Locator Service (FPLS) as part of its program of assisting States in securing support for children. We have decided to seek reimbursement from States for use of the FPLS in IV-D cases in which the support rights are not required to be assigned to the State, effective with the publication of this rule in final form. States may pay the fees themselves or charge the individuals involved in the case. The user fee is anticipated to be a minimal amount, not exceeding $1.00 per request.

EFFECTIVE DATE: June 24, 1992.

FOR FURTHER INFORMATION CONTACT: Andrew J. Hagan, Policy and Planning Division, OCSE, (202) 401-5375.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

There are no information collection requirements in this regulation which require approval under the Paperwork Reduction Act.

Statutory Authority

This regulation is published under the authority of sections 453(c)(3), 453(e)(2) and 1102 of the Social Security Act (the Act).

Section 453 of the Act was enacted as part of P.L. 93-647, the Social Services Amendments of 1974. Section 453 established the FPLS and specifies the conditions under which authorized personsmay request information concerning the whereabouts of absent parents. Under section 453(c)(3), "the resident parent, legal guardian, attorney, or agent of a child (other than a child receiving aid under part A of this title) (as determined by regulations prescribed by the Secretary) without regard to the existence of a court order against an absent parent who has a duty to support and maintain any such child" is authorized to request information from the FPLS. Section 453(e)(2) requires that "Whenever such services are furnished to an individual specified in subsection (c)(3), a fee shall be charged such individual. The fee so charged shall be used to reimburse the Secretary or his delegate for the expense of providing such services."

Section 1102 of the Act 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

The FPLS is a computerized network through which States may request location information from Federal and State agencies to find absent parents and/or their employers for purposes of establishing paternity and securing support.

Under the Child Support Enforcement program, each State is required to operate a State parent locator service (SPLS). See regulations at 45 CFR 302.35. The SPLS uses all relevant sources of information available to it in the State, such as unemployment compensation, employer and wage information, tax records, motor vehicle records and property ownership information. In addition, the SPLS has access to the FPLS, which obtains information from Federal and State databases, such as records of the Internal Revenue Service, the Social Security Administration, the Department of Defense, the National Personnel Records Center, the Selective Service, the Department of Veterans Affairs, and the State Employment Security Agencies.

The process of obtaining this location information is carefully controlled under regulations at 45 CFR 303.70 and by program instructions. A State request must come only from SPLS offices and authorized local offices. States must submit an annual certification, signed by the director of the State child support enforcement agency (known as the IV-D agency) or his/her designee attesting that requests are being made solely to locate an individual for Child Support Enforcement program purposes, or in connection with a parental kidnapping and child custody case as authorized by P.L. 96-611. All information obtained through the FPLS must be safeguarded and treated as confidential.

Until now, the FPLS only charged for non-IV-D locate-only andparental kidnapping and child custody cases. (See OCSE-AT-76-3, dated February 13, 1976.)

Changes to Previous Regulations

Fees for use of the FPLS in child support enforcement cases were previously covered in regulations at õ303.70(e)(1), (2), (4) and (5). Under paragraph (e)(1), the State IV-D agency had to pay the fees required under section 453(e)(2) of the Act. Under paragraph (e)(2), the IV-D agency was required to charge the fee to the resident parent, attorney or agent of a child who is not receiving aid under title IV-A of the Act. (Previously, this had been interpreted to mean an individual who has requested locate-only services.) Paragraph (e)(4) required that the fee be reasonable and as close to actual costs as possible so as not to discourage use of services by authorized individuals. Under paragraph (e)(5), the Office of Child Support Enforcement (OCSE) collected the fees from the IV-D agency by an offset of the State's quarterly grant award. Other parts of paragraph (e) cover FPLS fees charged to States for location requests made in parental kidnapping and child custody cases.

In this document, we revised õ303.70(e)(1) to make clear that, effective upon publication, the State must pay the FPLS fee in any child support case in which individuals are not required to assign their support rights to the State. This is consistent with the requirements of section 453(e)(2) of the Act, and the original intent of Congress in 1975, that a fee shall be charged to reimburse the Secretary for the expense of operating the FPLS. Moreover, we are using our authority under section 1102 of the Act to expand the cases not subject to the fee to include, in addition to AFDC cases, other IV-D cases in which an assignment of support rights to the State is required (i.e., IV-E foster care and Medicaid cases).

We revised paragraph (e)(2) to permit the State to charge the resident parent, attorney or agent of a child the fee or to pay the fee itself without charging the individual. This provision in paragraph (e)(2)(i) conforms to Federal policy in previous paragraph (e)(3) on FPLS fees paid in parental kidnapping and child custody cases. The new paragraph (e)(2)(i) gives States the same payment option in all three types of cases (IV-D cases in which no assignment of support rights to the State is required, non-IV-D locate-only cases in which location of an absent parent is the only service requested, and parental kidnapping and child custody cases). Paragraph (e)(2)(ii) allows the IV-D agency to recover the fee from the absent parent in non-IV-D cases and repay the individual requesting information or itself, similar to the option for application fees for non-IV-D cases under õ302.33. Paragraph (e)(2)(iii) provides that the payment of a fee by the IV-D agency is not a reimbursable expense under the IV-D program. Rather, such amounts would be counted asprogram income and, in accordance with õ304.50, would be excluded from quarterly expenditure claims. The previous paragraph (e)(3) was deleted.

We redesignated the previous paragraph (e)(4) as new paragraph (e)(3). It continues to require that fees be reasonable and as close to actual costs as possible so as not to discourage use of the FPLS.

Previous paragraph (e)(5) provided that the Federal government collect the fees from the States by an offset of the quarterly grant awards. This process was contained in previous paragraph (e)(6) and may be summarized as follows:

The Federal government will charge the IV-D agency periodically for the costs of processing requests to use the FPLS. Previously, an additional fee was charged for those cases submitted without a Social Security number (SSN). With the new fee structure, the same per case fee will be charged for cases submitted with or without an SSN.

If a State fails to pay the fees charged, use of the FPLS may be suspended for cases subject to the fees until payment is received. Finally, fees shall be transmitted in the amount and manner prescribed by the OCSE in instructions. The procedures for Federal collection of fees outlined above are contained in a new paragraph (e)(4) that covers fees in applicable child support cases and all parental kidnapping and child custody cases. Previous paragraphs (e)(5) and (6) were deleted.

As explained later in response to comments, we have also revised the standards for program operations regarding location of absent parents, at õ303.3, by deleting õ303.3(b)(6) which had required IV-D agencies to resubmit to the FPLS at least annually cases in which location was needed, previous attempts to locate had failed, and which met the requirements for submittal.

We expect that States have mechanisms in place to collect and transmit the fees with minimal lead time, since they have already developed procedures for handling FPLS user fees in parental kidnapping and child custody and non-IV-D locate-only cases. If any administrative costs are incurred by States in implementing this fee, States may wish to consider such costs when setting their cost recovery procedures, if they have elected in their State plans to recover costs in non-AFDC cases. Based on the number of requests for FPLS services anticipated for FY 1991, we expect to recover approximately 687,000 dollars per year through the charges imposed by this regulation.

Fees Previously in Effect

Most of the billing and payment procedures, extended in thisregulation to all child support cases subject to a fee, had been in effect for parental kidnapping and child custody cases since 1981 when the final regulations on use of the FPLS in parental kidnapping and child custody cases were published. These procedures resulted in a direct payment to the OCSE, through an HHS account, and expedited availability of funds specific to operation of the FPLS.

Under previous policies on use of the FPLS in parental kidnapping and child custody cases (OCSE Action Transmittal 81-12, dated June 15, 1981), we charged a fee of $10 for each request that contained a social security number, and an additional fee of $4 for each request submitted without a social security number. If the social security number could not be found, the $10 fee was not charged since location requests could not be processed without this number. A similar fee was charged for non-IV-D locate-only requests pursuant to OCSE-AT-82-17 (dated November 12, 1982). States were notified by action transmittal in advance of any change in the fee amounts. States are billed on an annual basis to minimize the administration and paperwork connected with this process.

OCSE has reviewed the costs and determined a user fee which is substantially less than was previously charged. We considered the costs of fees charged by the Internal Revenue Service and State Employment Security Agencies, the associated costs of the National Child Support Computer Center, OCSE's related costs, including salary and benefits of OCSE FPLS and systems support personnel, telephones and building costs, mailings, training, personal computer and supplies, the cost of the contractor which provides support to the FPLS, and other relevant costs. We expect the fee to be approximately $1.00 per request.

An Action Transmittal will be issued setting forth fees and procedures for billing and payment for all requests sent to the FPLS in parental kidnapping and child custody cases and cases in which an assignment of support rights to the State is not required. We will review costs periodically and make adjustments to the fee and revise the Action Transmittal, if appropriate. This final regulation supersedes OCSE-AT-76-3.

Response to Comments

We received 65 comments on the Notice of Proposed Rulemaking published in the Federal Register November 15, 1990 (55 FR 47777), including comments from State and local IV-D agencies and child advocacy groups. Comments and our responses are as follows.

STATUTORY AUTHORITY

Comment: One commenter questioned why OCSE should start chargingFPLS fees after 15 years of not charging fees for FPLS services. Three commenters challenged the legal basis for the proposal, claiming that the legislation provided for the FPLS fee to be charged only for parental kidnapping and child custody cases and non-IV-D locate-only cases.

Response: The Social Security Amendments of 1975 (P.L. 93-647), enacted January 4, 1975, established title IV-D of the Act and the FPLS. Section 453(e)(2) provides that: "...Whenever such services are furnished to an individual specified in subsection (c)(3), a fee shall be charged such individual. The fee so charged shall be used to reimburse the Secretary or his delegate for the expense of providing such services." Section 453(c) of the Act specifies the "authorized person" authorized to receive information as to the whereabouts of the absent parent includes "the resident parent, legal guardian, attorney, or agent of a child (other than a child receiving aid under part A of this title)...." (emphasis added). The legislative history of P.L. 93-647, specifically the deliberations of the Senate Committee on Finance (Senate Report 93-1356: page 55), provided that "(i)n the case of parent location services, a fee would be charged in non-welfare cases." Senate Report No. 93-1356 further specified, on page 55, "(t)hat collection activities for non-welfare families are thus envisioned as being self-financing, unless a State decides that it does not want to charge for the cost of the service." The original Federal legislation for child support enforcement services under title IV-D of the Act, P.L. 93-647, required fees for the FPLS be charged in non-IV-D cases. Current economic and budgetary problems warrant the charging of the minimal FPLS fees contained in these regulations.

Comment: One commenter referenced a recent legislative proposal, requiring State child support enforcement agencies to pay for FPLS services, which Congress rejected, as "proof" that we lack legislative authority to charge fees for the use of the FPLS. The same commenter suggested that Federal legislation allows fees only for application, IRS offset, and genetic testing, and that FPLS fees are not authorized. Two commenters suggested that, rather than OCSE charging a fee for each submittal, each State be charged a flat fee for access to the FPLS so that States could plan for a specific amount in its budget tracking systems.

Response: The recent legislative proposal referenced by the commenter was to charge the States fees for use of the FPLS, while this regulation implements the existing statutory requirement that non-IV-D individuals pay fees for access to the FPLS location services. We have not proposed to charge a flat fee to each State for access to the FPLS. Additionally, States have had extensive experience with using the FPLS and should have an adequate basis from which to project future budgetary requirements. Besides, the charging of FPLS fees on the basis of the number of submittals may encourage States to exhaust theirState and local resources before referring a case to the FPLS.

Comment: One commenter suggested that OCSE obtain clearance of the FPLS fee proposal by the IV-D Directors' Policy Committee before the FPLS fee policy is promulgated.

Response: We believe that the procedures required under the Administrative Procedures Act for providing an opportunity for public comment on proposed regulations before the final regulations are published provide sufficient opportunity for public input during the rulemaking process.

CASES SUBJECT TO FPLS FEES

Comment: Several commenters requested clarification about whether former recipients of public assistance would also be exempt from the FPLS fee.

Response: No, former recipients of public assistance are not exempt from the FPLS fee. This regulation, at 45 CFR 303.70(e)(1), requires the IV-D agency to pay the fee in cases other than those in which there is an assignment of support rights as defined in 45 CFR 301.1. Only current recipients of AFDC, non-AFDC Medicaid, and title IV-E foster care services are exempt from the FPLS fee. As with applicants for IV-D services, States have the option to charge the former recipient of public assistance, eligible for IV-D services under 45 CFR 302.33(d)(1)(ii) (as published in the Federal Register on February 26, 1991 (56 FR 7988)), for the costs of the FPLS fee or to absorb the cost of the FPLS fee out of State funds. States may recover the cost of the FPLS fee from the absent parent and reimburse the individual requesting information, or itself, as appropriate.

Comment: Several commenters opposed the proposal distinguishing between cases with Federally-required assignment of support rights to the State and those without such assignment, claiming that the proposal discriminated against those without such assignment and denied those without such assignments due process under the Constitution. One commenter suggested we charge a smaller fee and charge the fee in all cases, including those with Federally-required assignment of support rights to the State, in order to facilitate tracking for billing.

Response: The statute prohibits charging FPLS fees in AFDC cases. Under section 453(c)(3) and 453(e)(2) of the Act, FPLS fees must be charged to the resident parent, legal guardian, attorney, or agent of a child (other than a child receiving aid under title IV-A of the Act).

Comment: Two commenters expressed concern that the charging of FPLS fees for cases without assignment of support rights to theState, coupled with the cap on non-AFDC incentives payments, appears to be encouraging the provision of less services to non-AFDC applicants for IV-D services. Two commenters were "extremely concerned" that the FPLS fees proposal is a "precursor" to additional user fees.

Response: The charging of FPLS fees should not discourage IV-D agencies from providing the full range of IV-D services to all those in need. The nominal fee for submitting a case without a required assignment of support rights to the State can be absorbed by the State or charged to the individual requesting information. States also have the option to recover the cost of the FPLS fee from the absent parent and repay the individual requesting information or itself, as appropriate. Charging FPLS fees in cases without an assignment is consistent with the Congressional intent with respect to the 1975 legislation that non-welfare cases pay for the cost of accessing FPLS location sources.

Comment: The majority of commenters strongly objected to the charging of FPLS fees since the States are also required to access the FPLS in initial location attempts, under 45 CFR 303.3(b)(3), and annually thereafter, under 45 CFR 303.3(b)(6). One commenter suggested that OCSE charge the FPLS fee only for the first FPLS submittal in each case, with subsequent FPLS submittals on the same case being free.

Response: In response to comments, we deleted 45 CFR 303.3(b)(6) which had required States to resubmit appropriate cases annually to the FPLS when location services were still required. States are required, under 45 CFR 303.3(b)(3), to access all appropriate location sources, including transmitting appropriate cases to the FPLS. However, if location information sufficient to take the next appropriate action in a case can be obtained without submittal of the case to the FPLS, submittal would not be necessary. Since the FPLS has a broad range of location sources which are otherwise unavailable to the States, we strongly encourage States to resubmit cases to the FPLS when their efforts to locate the absent parent using their own location resources have been unsuccessful. The Federal regulations, at 45 CFR 303.3(b)(5), still require repeat location attempts where previous attempts failed but adequate identifying and other information exists to meet requirements for submittal. We particularly encourage States to resubmit a case to the FPLS before closing the case due to failure to locate the absent parent.

Comment: Two commenters asked if the same FPLS fee would be charged for FPLS submittals in which location information is needed in parental kidnapping and child custody or non-IV-D locate-only cases.

Response: The FPLS fee will be the same for all parental kidnapping and child custody cases and all non-IV-D locate-only cases.

AMOUNT OF FEE -- IMPACT ON STATES OR INDIVIDUALS:

Comment: Several commenters expressed concern that their States would be unable to afford the costs of the FPLS fees or of establishing a process to recover the costs from the individual requesting information or the absent parent.

Response: As provided in 45 CFR 303.70(e)(2)(i) and (ii), the IV-D agency has the option to charge the costs of the FPLS fees to the person requesting the FPLS information or to pay the cost itself, as well as the option to attempt to recover the cost of the FPLS fee from the absent parent. Federal matching funds are available to the IV-D agency at the prevailing matching rate for the costs of establishing and maintaining the administrative procedures for charging the individual requesting information, and, at State option, recovering the costs from the absent parent and repaying the individual requesting information or itself, as appropriate.

Comment: Two commenters questioned whether the charging of FPLS fees was the most cost-effective way to increase collections under the IV-D program, and suggested that States could improve their collections more efficiently if they used the money instead for hiring additional staff.

Response: The charging of FPLS fees is intended to carry out the intent of Congress that persons not receiving assistance who benefit from the location services of the FPLS should bear the costs. It is not intended to increase collections under the IV-D program. We emphasize that absorbing the cost of the FPLS fees is an option for States, not a requirement. States may charge the individual requesting the information. States also have the option to recover the cost of the FPLS fees from the absent parent and repay the individual requesting information or itself, as appropriate.

Comment: One commenter requested that OCSE allow States to use other location resources from the private sector if these other resources are more cost-effective than the FPLS.

Response: If a State is able to successfully locate the absent parent within the 75-day timeframe required in 45 CFR 303.3(b)(3), using location resources other than the FPLS, then submittal of the case to the FPLS would not be necessary.

Comment: One commenter pointed out that States might be less likely to use the FPLS since fees are being charged. This could lead to a delay in location and possibly to applicants for IV-Dservices becoming eligible for public assistance for lack of child support collections.

Response: Since the Federal regulations, at 45 CFR 303.3(b)(3), require IV-D agencies, within 75 days of determining that location is necessary, to access all appropriate location sources, including the FPLS, States' use of the FPLS should not decrease for appropriate cases. States which aggressively pursue State and local location information may be able to complete location services for many IV-D cases without submitting them to the FPLS, which would reduce their need for FPLS services. Timeframes for providing location services should ensure location services are not delayed.

Comment: The regulations, at 45 CFR 303.70(e)(4)(ii), provide that if a State fails to pay the FPLS fee for cases submitted, FPLS services may be suspended for cases subject to the FPLS fee until the State pays the fees. Two commenters expressed concern that families needing FPLS services would be denied access to the FPLS if their State were under suspension for failure to pay.

Response: We do not expect that States which opt to absorb the cost of the FPLS fees, rather than charging the individual requesting information or recovering the cost from the absent parent, would then refuse to pay the FPLS fee and face suspension. However, a State which fails to meet Federal requirements for use of the FPLS in appropriate cases may be found not to have complied with State plan requirements and could be subject to audit penalties.

Comment: One commenter requested definite information on the amount of the FPLS fee, in order to allow the IV-D agency to adequately plan its budget.

Response: Based upon current operating costs, it is anticipated that, for those cases eligible for a fee, the cost will be approximately $1.00 per case. Each year, the cost will be reassessed and adjusted if necessary. The States will be notified if the fee is changed. The OCSE Annual Report to Congress provides the number of location requests submitted by each State to the FPLS for the last five years. Using this data, the States will be able to project the approximate number of cases they will submit and, therefore, the costs they can expect to incur. Upon request, the FPLS will provide the State with the number of cases submitted last year.

We will charge each State for the number of non-IV-D and parental kidnapping and child custody cases submitted to the FPLS by that State. Again, it is recommended that, whenever appropriate, States exhaust State and local locate resources before referring a case to the FPLS.

Comment: One commenter stated that opposition to the fee could be overcome by granting the commenter direct computer access to the FPLS, which would speed up the receipt of location information. One commenter requested a differential fee structure for the FPLS fees, where submittals by tape exchange would be charged less.

Response: At the request of the State IV-D Director and upon subsequent approval by OCSE, large jurisdictions can obtain direct access to the FPLS. With direct access, the user can expect to receive information from all matches, except those done quarterly, within an average of one to three weeks from the date they submit the case to the FPLS. We are not establishing a differential fee structure since the amount of data processing required and the charges imposed on the FPLS are comparable regardless of the format in which the cases are submitted.

Comment: One commenter requested that the regulation specify a "cap" on the FPLS fee, with any subsequent increase allowable only through the regulatory process.

Response: As has been the case with FPLS fees charged for non-IV-D locate-only cases and for parental kidnapping and child custody cases, we will use the Action Transmittal process when, and if, there is a need for any subsequent revision to the amount of the FPLS fee. While the charging of fees is addressed in regulations, we believe it is appropriate to set the amount of the fees in program instructions. Since the FPLS fees are to cover only the costs to the Federal government of operating the FPLS, the costs will be set accordingly. Some costs (e.g., salaries, equipment, and overhead) are fixed, while others (e.g., computer processing time and agency charges) fluctuate with volume. Continued improvements in the databases and technology will allow the FPLS to be even more efficient, and should limit the need for cost adjustments.

Comment: One commenter expressed concern that the proposed regulation did not specify the amount of the additional FPLS fee to be charged when the submittal does not include a social security number (SSN). One commenter requested clarification about whether the additional fee for cases with no SSN would be charged only in parental kidnapping and child custody cases and non-IV-D locate-only cases or in all IV-D cases without an assignment of support rights to the State. Also, would the FPLS submittal fee be refunded if the case was submitted without a SSN and there is no SSN found?

Response: States will be charged approximately $1.00 per case for all non-IV-D locate-only cases and parental kidnapping and child custody cases submitted to the FPLS. No additional fee will be charged for a case submitted without a SSN. The FPLS fee would not be refunded if the case was submitted without a SSN andno SSN is found, since the FPLS fee is based upon submittal of the case, even when location information is not found.

Comment: One commenter requested clarification about whether there will be an additional fee for processing location submittals through the State Employment Security Administrations (SESAs).

Response: Since the FPLS fee is based on the total costs of operating the FPLS, including the costs of processing location submittals through the SESAs, there is no additional fee for this service.

Comment: One commenter suggested that the present process of offsetting the quarterly OCSE payment to the States, under 45 CFR 303.70(e)(5), is preferable to the proposed billing system.

Response: At present, the commenter's suggested process is not available for charging the States for their FPLS submittals. We are exploring avenues which will allow this option and will notify States of the procedures through the Action Transmittal process.

QUALITY OF FPLS DATA:

Comment: Commenters pointed out that other location information resources, including some Federal sources, are better, cheaper and provide more timely information. Commenters also complained that FPLS data is quite out-of-date by the time the State or local agency receives the information and that the absent parents often have moved already. Additionally, commenters pointed out that other resources are more cost-effective than FPLS, and charge the State IV-D agencies only when the submittal results in a successful location.

One commenter suggested that the FPLS fees should only be assessed if the location information is later verified. One commenter expressed concern regarding the need to improve both the data in the FPLS system and the timeliness of responding to requests, and suggested that FPLS fees should not be charged if more than thirty days pass before the location information is sent to the State or local IV-D agency.

Response: Many State sources provide State level location data that is more current than the national level data provided by the FPLS. If the IV-D agency believes that the absent parent is residing in-state, we encourage the IV-D agency to use their own in-state resources before submitting cases to the FPLS. If the absent parent is not found by using State level sources, the FPLS is the only source for accessing national Federal databases.

The currency of the locate information provided by the FPLS isnot within the control of the FPLS. Rather, the currency of the information is determined by the frequency with which each of the agencies updates its database. Therefore, the currency of the data ranges from very current, such as State Employment Security Agency (SESA) unemployment data and Social Security Administration (SSA) benefit information, to data which are a year old, such as National Personnel Record Center (NPRC) data. The time of year of the request and the frequency with which the source agency allows the FPLS to conduct matches also impacts on the currency of the data. For example, the Internal Revenue Service (IRS) provides the address reported when filing income tax returns. Therefore, address data are very current during and right after Federal income tax returns are filed. The data become progressively less current throughout the year.

The FPLS is continuously looking for additional and more current sources of location information that could be accessed. For example, the quarterly SESA crossmatches implemented in 1990 have provided the most current wage and unemployment data available.

The turnaround time for receipt of information from the FPLS

depends upon how often the agency with location information permits us to conduct a crossmatch and the data processing capabilities of the State or local jurisdiction to whom we forward the information. The FPLS conducts crossmatches weekly with SSA and the IRS, bi-weekly with the Selective Service System (SSS), Department of Defense (DOD) and NPRC, bi-monthly with the Department of Veterans Affairs (DVA), and quarterly with the IRS (for SSN search) and SESAs. The FPLS does not maintain a database of addresses. Information received from the cooperating agencies is passed on to the requesting jurisdiction within days of receipt by the FPLS. Therefore, the average turnaround time from the day of submittal to the FPLS is one to three weeks, with the exception of the quarterly matches. The submitting IV-D agency may experience a longer response time due to the time required by their State data processing staff to process the FPLS tape and forward the information to the local offices.

Comment: Two commenters stated that the FPLS is the least effective source of location information and one commenter suggested that OCSE propose to Congress to abolish the FPLS.

Response: Using the FPLS is the only way that States can access Federal databases. If the absent parent is living out of State, the FPLS may provide the best possible leads available. While the absent parent may not be at the address provided by the FPLS, these leads provide valuable information for the IV-D agency to use in skip tracing. Skip tracing is the process of using whatever information is available to the IV-D agency to develop a plan for locating the absent parent. For example, if the FPLS can only provide former employment information on the absent parent, the IV-D agency should contact the former employer forany additional leads. Or, if the FPLS can only provide a former address, the IV-D agency should contact the U.S. Postal Service, or the former landlord/landlady, for information as to where the absent parent may now live.

In fact, in 1990, States requested the assistance of the FPLS in locating the absent parent and/or his/her employer in over 3 million cases. Location information was provided to the submitting IV-D agencies in 79 percent of the cases submitted with a SSN.

Sometimes data that appears to be out of date may, in fact, provide the best lead available. For example, SSA data is older and updated less frequently than SESA data. However, in conducting an evaluation of SESA data we determined that SSA does provide a good lead in determining in which State the absent parent may reside.

For the SESA evaluation, we submitted the same 100,000 cases to both SSA and 42 participating SESAs. SSA provided addresses on 68,113 cases and the SESAs provided addresses on 46,756 cases. In 23,345 cases, no address was found in either database.

In 38,244 of the 100,000 cases, an address was found by both SSA and the SESAs. In 82 percent of these cases, the address of the absent parent provided by the SESA was in the same State as the address obtained from SSA. Furthermore, in 56 percent of these cases both the SESA and SSA provided addresses for the absent parent that were in the same zip code.

Comment: One commenter recommended that OCSE use the funds generated by the FPLS fees to improve the FPLS database, stating that such an improvement would in part compensate States for the additional costs incurred.

Response: The funds generated by the FPLS fees will cover the costs to the Federal government of operating the FPLS, including the costs of processing the submittals and the fees charged by the agencies for providing the data. The FPLS is continuously researching the feasibility of accessing additional databases and enhancing FPLS operations as the need arises.

CHARGING THE INDIVIDUAL REQUESTING INFORMATION:

Comment: Several commenters pointed out that the IV-D agency would not be able to collect the FPLS fees up front from the individual requesting information since the IV-D agency would not know whether the use of the FPLS would be necessary in a particular case or how many times the case might be referred to FPLS. There would also be an administrative dilemma regarding reimbursing the individual requesting information if the IV-D agency were to collect sufficient money to allow severalsubmittals and then located the absent parent on the first attempt. Two commenters also expressed concern that IV-D agencies would run afoul of the cost recovery requirements, which provide that cost recovery must be done on a case-by-case basis.

Response: States which choose to charge the FPLS fee to the individual requesting location information, rather than to pay the FPLS fee without charging the individual, may charge the individual only when that case is submitted to the FPLS. If the case is later resubmitted, the State may, at that time, again charge the individual requesting information for the FPLS fee. Since additional referrals may not be necessary, it would be inappropriate to charge for multiple submittals on the same absent parent at one time. Likewise, a State that elects to recover the costs of the FPLS fees from the absent parent could recover the costs if the case is submitted to the FPLS. If the case is later resubmitted, the State may attempt to recover the costs for each time the case was submitted.

Comment: Several commenters expressed concern that if the IV-D agency were to bill the individual requesting information and then await payment before submittal of the case to FPLS, the seventy-five day timeframe for location efforts, at 45 CFR 303.3(b)(3), would not be met in many cases. Two other commenters asked whether the IV-D agency would be exempt from referring cases to FPLS if the individual requesting information refused to pay the FPLS fee. Also, two commenters requested clarification about whether the IV-D agency would be allowed to close the IV-D case if the individual requesting information refused to pay the FPLS fee.

Response: States that choose to collect the FPLS fee from the individual requesting information, rather than paying the FPLS fee without charging the individual, would still be responsible for meeting program standards location timeframes in 45 CFR 303.3(b)(3). If the individual requesting information refused to pay the FPLS fee and all other appropriate location efforts (in accordance with 45 CFR 303.3) were unsuccessful, and submittal of the case to the FPLS was the only avenue left, the IV-D agency would be able to close the case under the case closure criterion at 45 CFR 303.11(b)(12). This allows case closure if, in an non-AFDC case, the IV-D agency documents the circumstances of the custodial parent's non-cooperation and an action by the custodial parent is essential for the next step in providing IV-D services. The IV-D agency also must meet the requirements for case closure notification at 45 CFR 303.11(c), including notifying the custodial parent in writing 60 calendar days prior to closure of the case of the State's intent to close the case. The case must be kept open if the custodial parent then cooperates in response to the notice, or reopened after closure at the custodial parent's request if there is a change in circumstances, that is, the custodial parent decides to cooperate.

Comment: Many commenters pointed out that the applicants for IV-D services are often quite poor and would not be able to afford the additional fee. Some commenters suggested that without the assistance of the IV-D agency, many of these families would eventually have to apply for public assistance. One commenter stated that the State would not want to charge the individual requesting information the FPLS fee since the fee might discourage the individual requesting information from applying for IV-D services. Many commenters strongly objected to an additional fee, and demanded that absent parents be charged the cost, since the FPLS process would not be necessary if the absent parents were meeting their responsibilities. Several commenters strongly objected to paying the State IV-D agency any additional fees since these agencies are not effectively pursuing the absent parents in their individual cases.

Response: Each State has the option to charge the individual requesting information or to absorb the cost of the FPLS fee. Each State also has the option to recover the costs of the FPLS fee from the absent parent to repay the individual requesting information or itself, as appropriate. The FPLS fee is paid to OCSE for the costs to the Federal government of operating the FPLS.

Comment : Three commenters indicated that the interstate process would be hindered by the charging of the FPLS fees and requested that OCSE specify that the initiating State is responsible for the costs of the FPLS fees, by either charging the individual requesting information or absorbing the cost itself. One commenter pointed out that there would be particular difficulties in interstate cases if the initiating State were to pay the FPLS fees and the responding State would be responsible for recovering the costs from the absent parent.

Response: Responding States are not required to submit cases to the FPLS (see 45 CFR 303.3(b)(4)). The initiating State submits the case to the FPLS and then, if the absent parent is located in another State, refers the case to the responding State for child support enforcement services. However, if a responding State were to submit a case to the FPLS, the responding State would be charged the FPLS fee. We recognize the difficulties that an initiating State would face in recovering the cost of the FPLS fee from the absent parent. However, recovery of the FPLS fee from the absent parent is only one of the three options a State would have to finance the costs of submitting cases to the FPLS.

COST RECOVERY:

Comment: Many commenters expressed concern that the administrative procedures to recover the FPLS fees from the absent parent or billing the individual requesting informationwould "require complex administrative procedures to perform billing, accounting and revenue functions." One commenter expressed concern that the time, money, and energy for assessing, billing, collecting, and accounting for the FPLS fees would be better spent on more important provision of IV-D services. Many commenters expressed concern that the costs of the FPLS fees recovery process would outweigh the amount of the recovered costs, at both the Federal and State levels. One commenter pointed out that even if the State were to collect the FPLS fee from either of the parents, the IV-D agency would not get that money, which would instead go to the State's general revenue fund.

Response: Each State has the option to absorb the cost of the FPLS fee if the State believes that the cost of the administrative procedures to collect the FPLS fee from the individual requesting information or to recover the cost from the absent parent would not be cost-effective. Federal matching at the prevailing financial reimbursement rate would be available for the costs of developing and operating such administrative procedures. States will have to consider their individual State's policy regarding fees going into the general revenue fund rather than to the IV-D agency when deciding whether to charge the individual requesting information, recover the cost from the absent parent, or absorb the cost of the FPLS fee itself.

Comment: Many commenters questioned whether recovery from the absent parents would be feasible since cost recovery would occur only after the actual child support was collected, and there is no assurance that location would even result in support collections. One commenter pointed out that the cost of getting the fee reduced to a judgment and the other costs, such as tracking the costs, and billing the absent parents, would make the recovery more expensive than the amount that would be recovered.

Response: We agree with the commenter that recovering the fee from absent parents may not be feasible or cost-effective under certain circumstances. States have the option to charge the fee to the individual requesting information or absorb the fee, as well as the option to recover the fee charged from the absent parent. If a State determines that charging the absent parent is not the best approach, it may elect to absorb the fees itself.

Comment: One commenter requested we revise the Federal regulations on the enforcement techniques to allow the use of the enforcement techniques for this cost recovery, and any other recovery of costs.

Response: Statutory prohibitions preclude the use of the Federal income tax refund offset process for the collection of fees from the absent parent. However, the IV-D agency may use the otherenforcement techniques, available under section 466 of the Act and 45 CFR 302.70, for collection of the FPLS fee from the absent parent, if authorized under State law and procedures. The State may also use other enforcement techniques available under State law to recover the fee charged.

Please note that any amount collected from the absent parent must be treated first as a payment on the current support obligation before fees are collected.

PROGRAM INCOME:

Comment: Many commenters suggested that section 455 of the Act requires OCSE to reimburse States for the administrative costs of operating their IV-D programs, and the FPLS fees are administrative costs eligible for Federal reimbursement. One commenter pointed out that the FPLS fees proposal could be seen as comparable to the application fee. One commenter questioned how payment of the FPLS fee can be considered income when expended at submittal of the case to FPLS, when the income would actually not be collected until recouped from the individual. The commenter worried that the fee would be counted a second time when the fee was collected from the individual.

Response: Section 455(a)(1) of the Act requires that "(I)n determining the total amounts expended by any State during a quarter, for purposes of this subsection, there shall be excluded an amount equal to the total of any fees collected or other income resulting from services provided under the plan approved under this part." The FPLS fee is like the IV-D application fee in that, if a State decides to absorb the fee rather than collect it, State funds used to pay the FPLS fee are not program expenditures for purposes of claiming Federal matching funds and are considered as program income. The cost will be incurred when the case is submitted to the FPLS. Any collection of the amount of the fee from the individual requesting information or recovery of the fee from the absent parent would not be counted a second time.

Comment: Some commenters pointed out that although States are prohibited from claiming Federal reimbursement for the costs of paying the FPLS fees, States would expect Federal reimbursement for the administrative costs of developing a system for the billing, payment tracking, and other expenses associated with charging the individual requesting information the FPLS fee or recovering the FPLS fee from the absent parent.

Response: As previously addressed, Federal matching funds at the prevailing rate would be available for the costs of developing and maintaining the administrative procedures of collecting the fee from the individual requesting information or recovering the fee from the absent parent.

Comment: One commenter requested that OCSE allow States to exclude the costs of the FPLS fees from the incentive calculations under 45 CFR 304.12, as is allowed for the costs of genetic tests.

Response: The Child Support Enforcement Amendments of 1984 (P.L. 98-378) amended section 458 of the Act to allow for the exclusion of the costs of genetic testing from State administrative costs in the calculation of the incentive payment. While the costs of genetic testing are considered program expenditures, these regulations, at 45 CFR 303.70(e)(2)(iii), specify that State funds used to pay the fee under section 453(e)(2) are not program expenditures under the State plan. Therefore, the costs of the FPLS fees would not be considered in the incentive calculations under 45 CFR 304.12.

MISCELLANEOUS:

Comment: One commenter suggested that the FPLS fees NPRM was a major rule since the proposal would cause major increase in costs to State and local IV-D agencies.

Response: We do not believe that the regulation should be considered a major rule since the costs of the FPLS fees is expected to be minor, less than a million dollars across the 54 States and jurisdictions. Executive Order 12291 considers a major rule to be one which is likely to have an annual effect on the national economy of $100 million or more.

Comment: Several commenters requested that OCSE delay the effective date of the FPLS fees regulation since some State IV-D agencies would need lead time to request additional budgetary authority from their State legislatures or to develop mechanisms for collecting and transmitting the FPLS fees. Other commenters said they need the lead time to incorporate the accounting requirements for the FPLS fees into their management information systems. Another commenter said they would need the lead time to promulgate their own State regulations to their local IV-D agencies, and that process cannot begin until the Federal regulations are published. One State would be seeking authority to ensure that the fees collected from the individual requesting information or recovered from the absent parent would be earmarked to reimburse the agency rather than go into the State's general revenue fund.

Response: We do not believe that delay in the effective date for the charging of FPLS fees is appropriate. States have been on notice since at least the November 15, 1990, publication of the proposed regulation that OCSE was considering a change to the IV-D regulations to charge for the costs of operating the FPLS.

Regulatory Flexibility Analysis

Under the Regulatory Flexibility Act of 1980 (P.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. Because the impact of these regulations is on States and, at State option, individuals, these regulations would not have a significant economic impact on a substantial number of small entities and a regulatory flexibility analysis is not required.

Regulatory Impact Analysis

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

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

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

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

List of Subjects

Part 303 - Child support, grant programs/social programs, reporting and recordkeeping requirements

[Catalog of Federal Domestic Assistance Program No. 93.023, Child Support Enforcement Program]

Dated:

__________________________

Jo Anne B. Barnhart

Assistant Secretary

for Children and Families

Dated:

__________________________

Louis Sullivan, M.D.

Secretary

PART 303--STANDARDS FOR PROGRAM OPERATIONS

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. For the reasons set forth in the preamble, we are removing 45 CFR 303.3(b)(6). [NOTE: Federal Register of June 24, 1992 said "receiving" rather then "removing," but corrected it in the July 14, 1992 Federal Register.]

3. For the reasons set forth in the preamble, we are amending 45 CFR 303.70(e) to read as follows:

õ303.70 Requests by the State Parent Locator Service (SPLS) for information from the Federal Parent Locator Service (FPLS).

* * * * *

(e)(1) The IV-D agency shall pay the fees required under:

(i) Section 453(e)(2) of the Act in IV-D cases in which there is no assignment of support rights to the State under õ301.1 of this chapter and in non-IV-D locate-only cases in which the location of an absent parent is the only service requested; and

(ii) Section 454(17) of the Act in parental kidnapping and child custody cases.

(2)(i) The IV-D agency may charge an individual requesting information, or pay without charging the individual, the fee required under sections 453(e)(2) and 454(17) of the Act.

(ii) The State may recover the fee required under section 453(e)(2) of the Act from the absent parent who owes a support obligation to a family on whose behalf the IV-D agency is providing services and repay it to the individual requesting information or itself.

(iii) State funds used to pay the fee under section 453(e)(2) of the Act are not program expenditures under the State plan but are program income under õ304.50 of this chapter.

(3) The fees required under sections 453(e)(2) and 454(17) of the Act shall be reasonable and as close to actual costs as possible so as not to discourage use of the FPLS by authorized individuals.

(4)(i) For costs of processing requests for information under sections 453(e)(2) and 454(17) of the Act, the Federal governmentwill charge the IV-D agency periodically. A fee will be charged for submitting a case to the FPLS for location information.

(ii) If a State fails to pay the appropriate fees charged by the Office under this section, the services provided by the FPLS in cases subject to the fees may be suspended until payment is received.

(iii) Fees shall be transmitted in the amount and manner prescribed by the Office in instructions.