< Back to Search

Final Rule: Reduction in Federal Funding Rate; Reduction in Incentive Payments to States and Political Subdivision

AT-83-01

Published: January 7, 1983
Information About:
State/Local Child Support Agencies
Topics:
Funding, Federal Financial Participation (FFP)
Types:
Policy, Action Transmittals (AT), Regulations
Tags:
Cooperative Agreement

REGULATION

ACTION TRANSMITTAL

OCSE-AT-83-1

January 7, 1983

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

SUBJECT: Final Rule - Reduction in Federal Funding Rate; Reduction in Incentive Payments to States and Political Subdivision; Repeal of Expanded Federal Funding in the Costs of Cooperative Agreements With Courts and Law Enforcement Officials

REGULATION

REFERENCE: 45 CFR Part 303, 3O4 and 3O5.

These are final rules which provide for reduced Federal payments to States under the Child Support Enforcement program as follows:

1) Federal funding of State administrative costs is reduced from 75 to 7O percent as of October l, l982;

2) Incentive payments to States and political subdivisions will be reduced from l5 to 12 percent of Aid to Families with Dependent Children collections retained by the State for which both enforcement and collection action has been taken as of October 1, 1983; and

3) Federal funding of the expenditures of courts for support personnel of judges and other individuals who make judicial determinations in child support enforcement cases and the administrative costs incurred on behalf of the support personnel will be eliminated as of October l, 1983.

EFFECTIVE DATES: Changes made by the rule to reduce Federal funding from 75 to 70 percent of a States expenditures are effective October 1, 1982. Changes made by this rule to reduce incentive payments and eliminate funding of certain court costs will be effective October 1, 1983.

SUPERSEDED MATERIAL: OCSE-AT-82-18, dated December 16, 1982, as of October 1, 1983.

INQUIRIES TO: OCSE Regional Representatives.

Deputy Director

Office of Child Support Enforcement

45 CFR Parts 303, 304, and 305

Reduction in Federal funding Rate; Reduction in Incentive Payments to States and Political Subdivisions; Repeal of Expanded Federal Funding In the Costs of Cooperative Agreements with Courts and Law Enforcement Officials

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

ACTION: Final Rule

SUMMARY: This regulation implements section 174 of Pub. L. 97-248, the Tax Equity and Fiscal Responsibility Act of 1982, signed into law on September 3, 1982. Section 174 reduces Federal payments to States under the Child Support Enforcement program. The reductions are in three area: (1) Federal funding of State administrative costs is reduced from 75 to 70 percent effective October 1, 1982; (2) incentive payments to States and political subdivisions are reduced from 15 to 12 percent of Aid to Families with Dependent Children (AFDC) collections retained by the State for which both enforcement and collection action has been taken; and (3) Federal funding of the expenditures of courts for support personnel of judges and other individuals who make judicial determinations in child support enforcement cases and the administrative costs incurred on behalf of the support personnel is eliminated. The latter two reductions are effective October 1, 1983.

EFFECTIVE DATES: Changes made by this rule to reduce Federal funding from 75 percent to 70 percent of a State's expenditures in 45 CFR 303.65, Part 304 and 305.22 are effective October 1, 1982. Changes made by this rule to reduce incentive payments and eliminate funding of certain court costs in 45 CFR 303.52 and 304.21 are effective October 1, 1983.

FOR FURTHER INFORMATION CONTACT:

Pierre Mooney, (301)443-5350.

SUPPLEMENTARY INFORMATION:

Reduction in Federal Funding Rate

Federal funding is available to States for administrative costs incurred pursuant to a State plan approved under title "IV-D of the Social Security Act (the Act). This funding is authorized by section 455(a)(1) of the Act. Section 174 of Pub. L. 97-248 amends section 455(a)(1) by reducing the Federal funding rate from 75 to 70 percent. The new rate applies to amounts expended in quarters beginning on or after October 1, 1982. We are implementing this change by substituting the phrase "70 percent" for the phrase "75 percent" in 45 CFR 303.65 and wherever it appears in Part 304. Also, we are making a conforming change to 163 305.22, State financial participation, to specify that the State share in funding the administrative costs of the program has risen from 25 to 30 percent.

Reduction in Incentive Payments

Under section 458 of the Act, States and political subdivisions that enforce and collect child support receive incentive payments on the collections made on behalf of an AFDC recipient and retained by the State. The incentive payment is a portion of the Federal share of the collection which would otherwise be used to reimburse the Federal government for its contribution toward the AFDC payments made to the recipient. Upon the creation of title IV-D of the Act by Pub. L. 93-647, the incentive payment rate was fixed at 25 percent for the first 12 months for obligations collected and retained by the State and 10 percent thereafter. Pub. L. 95-30 eliminated the variable 25 and 10 percent rates and substituted a flat 15 percent rate effective May 23, 1977. Pub. L. 97-248 reduces the 15 percent rate of incentive payments to 12 percent. This 12 percent rate must be used in calculating the incentives payable for collections made on or after October 1, 1983. We are implementing this change by substituting the phrase "12 percent" for the phrase "15 percent" wherever it appears in 45 CFR 303.52, Incentive payments to States and political subdivisions, which was published as a final rule in the Federal Register on August 27, 1982 (47 FR 37886).

Repeal of Expanded FFP for Court Costs

Section 174(b) of Pub. L. 97-248 reduces Federal funding of court costs related to child support enforcement. Section 404(a) of Pub. L. 96-265, the Social Security Disability Amendments of 1980, amended section 455 of the Act by adding a new paragraph (c). That paragraph expanded Federal funding to include expenditures for the support personnel of judges and other individuals who make judicial determinations in child support enforcement court cases and administrative costs incurred on behalf of those support personnel. States could only claim this expanded Federal funding where expenditures exceeded the funds spent on those same costs during calendar year 1978. To obtain expanded funding States had to reconstruct and document those administrative and personnel costs incurred by courts under the IV-D State plan in that year. Specific costs which were included under this expanded Federal funding were costs of judicial support staff such as bailiffs, stenographers and clerks. Also included were administrative costs incurred on behalf of these support personnel in performing IV-D functions under a cooperative agreement, such as office space, equipment, furnishings, supplies, travel and training. Pub. L. 97-248 repeals this expanded court costs provision effective October 1, 1983. Federal funding for those costs authorized under section 404(a) of Pub. L. 96-265 is available until that date. We are implementing section 174(b) of Pub. L. 97-249 by deleting paragraphs (c), (d) and (e)(2), redesignating paragraphs (e)(1) and (f) as (c) and (d) respectively, and revising paragraph (b) of 45 CFR 304.21, Federal financial participation in the costs of cooperative agreements with courts and law enforcement officials, which was published as a final rule in the Federal Register on November 24, 1982 (47 FR 53014).

Waiver of Proposed Rulemaking

These changes to the regulations are being published in final form. The Administrative Procedure Act, 5 U.S.C. 553(b)(B), provides that, if the Department for good cause finds that a notice of proposed rulemaking is unnecessary, impracticable or contrary to the public interest, it may dispense with such notice.

We find that there is good cause to dispense with proposed rulemaking because these regulations are based on specific statutory provisions in section 174 of Pub. L. 97-248 which leave the agency no discretion with respect to interpretation. A notice of proposed rulemaking, therefore, is unnecessary.

List of Subjects

45 CFR Parts 303 and 304

Child welfare, Grant programs--Social programs.

45 CFR Part 305

Child welfare, Grant programs--Social programs, Accounting.

OMB Clearance

These regulations contain no reporting or recordkeeping requirements involving Office of Management and Budget clearance under the Paperwork Reduction Act of 1980.

Regulatory Burden

OCSE estimates that the revisions specified in this regulation will result in a savings to the Federal government of $64 million in FY 1983, $108 million in FY 1984, and $121 million in FY 1985. However, because the rules adhere strictly to the statutory provisions in section 174 of Pub. L. 97-248, which leave no room for interpretation, the Secretary has determined that the rule does not meet any of the criteria for a major rule under Executive Order 12291, and a regulatory impact analysis is not required.

45 CFR Parts 303, 304 and 305 are amended to read as follows:

PART 303--[AMENDED]

§ 303.52 [Amended]

1. 45 CFR 303.52 is amended by substituting the phrase "12 percent" for "15 percent" wherever it appears.

§ 303.65 [Amended]

2. 45 CFR 303.65 is amended by substituting the phrase "70 percent" for "75 percent" wherever it appears.

PART 304-[AMENDED]

3. 45 CFR Part 304 is amended by substituting the phrase "70 percent" for "75 percent" wherever it appears.

§ 304.21 [Amended]

4. 45 CFR 304.21 is amended by removing paragraphs (c), (d) and (e)(2) and redesignating paragraphs (e)(1) and (f) as (c) and (d), respectively, In addition, paragraph (b) is amended by revising the introductory text of paragraph (b) and paragraph (b)(4) and by adding (b)(5) to read as follows:

§ 304.21 Federal financial participation in the costs of cooperative agreement with

courts and law enforcement officials

* * * * *

(b) Limitations. Federal financial participation is not available in:

* * * *

(4) Office-related costs, such as space, equipment, furnishings and supplies, incurred by judges or other officials who make judicial decisions;

(5) Compensation (salary and fringe benefits), travel and training, and office related costs incurred by administrative and support staffs of judges and other officials who make judicial decisions.

* * * * *

PART 3O5 [AMENDED]

5. 45 CFR 305.22(a) is revised to read as follows:

§ 305.22 State financial participation.

(a) A State must participate financially by incurring 30 percent of the cost of the program: and

* * * * *

Note:--The Secretary has determined that this document is not a major rule as described by Executive Order 12291 because it does not meet any of the criteria set forth in Section 1 of the Executive Order. The Secretary certifies that because these regulations apply to States and will not have significant economic impact on a substantial number of small entities, they do not require a regulatory flexibility analysis as provided in Pub. L. 96-354, the Regulatory Flexibility Act of 1980.

(Sec. 1102 of the Social Security Act (42 U.S.C. 1302))

(Catalog of Federal Domestic Assistance Program No. 13.679, Child Support Enforcement Program).

Dated: October 12, 1982

John A. Svahn,

Director, Office of Child Support Enforcement.

Approved: December 8, 1`982

Richard S. Schweiker,

Secretary

[FR Doc. 82-34881 Filed: 12-22-82: 8:45 am]

Billing Code 4190-11-M