Requesting an Exemption from Laws and Procedures in Section 3 of P.L. 98-378
May 3, 1985
Instructions for Requesting an Exemption from the Mandatory Laws
May 3, 1985
TO: STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS APPROVED UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS
SUBJECT: Instructions for Requesting an Exemption from the Mandatory Laws and Procedures in Section 3 of P.L. 98-378,the Child Support Enforcement Amendments of 1984.
BACKGROUND: Section 3 of P. L. 98-378 amends title IV-D of the Social Security Act (the Act) by adding sections 454(20) and 466. The new State plan provision at section 454(20) requires States to have in effect and use the laws and procedures specified in the new section 466 to improve the effectiveness of child support enforcement programs. However, under the new section 466, States may apply for an exemption from enacting and implementing one or more of these laws and procedures. The requirements from which States may request an exemption are:
1. Withholding of amounts from wages and, at State option, other income of individuals to satisfy support orders (45 CFR 302.70(a)(1) and 303.100);
2. Establishing and enforcing support orders and, at State option, establishing paternity by expedited processes (45 CFR 302.70(a)(2) and 303.101);
3. Obtaining overdue support from State income tax refunds (45 CFR 302.70(a)(3) and 303.102);
4. Imposing liens against real and personal property for amounts of overdue support (45 CFR 302.70(a)(4) and 303.103);
5. Establishing paternity at least up to the child's 18th birthday (45 CFR 302.70(a)(5));
6. Requiring the absent parent to give security, post a bond or give some guarantee to secure payment of overdue support (45 CFR 302.70(a)(6) and 303.104);
7. Making available to consumer reporting agencies, at their request, information regarding the amount of support owed by an absent parent if the amount is more than $1000 (45 CFR 302.70(a)(7) and 303.105);
8. Including a provision for wage withholding in child support orders issued or modified in the State. (45 CFR 302.70(a)(8) and 303.100(h)).
CONTENT: This action transmittal addresses how States should apply for an exemption, establishes two exemption categories to expedite the review and approval process and sets forth standards that will be used by this Office to determine if the State's request for exemption may be granted.
ACTION REQUIRED: To ensure a decision by September 1, 1985, initial requests for exemptions should be submitted to the appropriate Regional Office by June 30, 1985. (See the attachment for details.)
INQUIRIES TO: OCSE Regional Representatives
Office of Child Support Enforcement
Since the inception of the Federal Child Support Enforcement program certain laws and procedures have noticeably increased the efficiency and effectiveness of some States' programs. To improve the nationwide child support effort, Congress identified with the enactment of P.L. 98-378 the particular laws and procedures that were responsible for the success of those State programs. States must implement the procedures specified in the new law by October 1, 1985. However, if a State can demonstrate to the satisfaction of the Secretary that any one, or all, of the required laws and procedures will not increase the effectiveness and efficiency of the State's child support enforcement program, the Secretary may grant the State an exemption from enacting and implementing one or more of the required procedures. With respect to procedures for expedited processes, a State may apply for an exemption for one or more political subdivisions of the State.
States also may request and receive a delay from meeting the October 1, 1985 effective date if the State can demonstrate to the Secretary that it needs legislation to conform the State plan to one or more of the requirements. In such a situation, the State must submit a State plan preprint page which indicates the need for legislation. Because this is a separate process from the exemption process, we will issue a separate Action Transmittal containing instructions for submitting revised preprint pages reflecting the provisions of P.L.98-378. A delay based on the need for State legislation will allow the State to the beginning of the fourth month after the end of the first session of its legislature which ends on or after October 1, 1985 to comply with the mandated laws and procedures in P.L. 98-378 and implementing regulations.
This Action Transmittal addresses requests for exemptions from the requirements of section 466 of the Act only. Please read this material carefully before preparing any requests for exemptions.
II. EXEMPTION PROCESS AND MATERIAL FOR SUBMISSION
States may submit initial requests for exemptions to the appropriate OCSE Regional Office at any time prior to October 1, 1985. However, to ensure decisions by September 1, 1985, States should submit all requests to the Regional Office by June 30, 1985. The designated single State agency (either the State IV-D agency or the umbrella agency within which the State IV-D agency is located) must submit request(s) for exemption(s) to the State governor or his or her designee for review before forwarding the request(s) to the appropriate OCSE Regional Office.
States must submit an original and one copy of each request to the Regional Office. The Regional Office will review the State's submission and will recommend to the Central Office approval or disapproval of the State's exemption request and, if the request is approved, the length of the exemption period. An exemption may be granted for up to three years.
If further materials are needed before a recommendation can be made, the Regional Office will request them from the State in writing. The State must provide the additional material within two weeks from the date of the Regional Office request, unless the Regional Office allows more time. Upon receipt of the requested material, the OCSE Regional Office will determine if the State's submission is complete. If it is complete, the Regional Office will forward its recommendations to OCSE Central Office. However, if the State's submission remains incomplete or insufficient to the point that the review cannot proceed, the Regional Office will recommend disapproval of the State's request.
The Director of OCSE will notify States that their exemption requests have been approved or disapproved and the basis for the decision, including the exemption period. If an exemption request is approved, OCSE's approval letter will specify the exemption period. Disapprovals of requests for exemptions are not subject to administrative appeal.
If the State's initial exemption request is disapproved, the State must implement the procedure by October 1, 1985. The State may be found out of compliance with the State plan requirement at section 454(20) of the Act and implementing regulations at 45 CFR 302.70 if it does not meet the October 1 effective date, unless the State has been granted a delay from implementing the requirement due to the need for State legislation. These delays are the only authorized reason for extensions of the October 1 effective date. Therefore, a State should make every effort to submit initial requests by June 30, 1985 or the earliest date possible so that, if the State's exemption request is disapproved, the State has time to implement the required procedure by October 1, 1985.
All exemptions are subject to review at any time during the exemption period. If circumstances change, an exemption may be terminated by the Director of OCSE. (Section V contains instructions pertaining to disapproval or termination of an exemption.)
States may apply for an extension of an exemption. If the State applies for an extension, it must submit its request 90 days before the end of the exemption period. The State's submission for an extension must address any changes in circumstances from the time of its initial request, especially changes that may affect the efficiency and effectiveness of the State's operation and must contain current data that support the request.
B. Material for Submission
If the State is submitting more than one request for an exemption or more than one request to exempt political subdivisions in the State from implementing expedited processes, we urge the State to submit each request separately. However, the State may submit one package for all its exemption requests if each exemption request and the supporting material that pertains to each request are clearly identified.
1. Cover Letter. The State's cover letter must specify: (a) the mandatory procedure from which the State is requesting an exemption; (b) if the State is requesting an exemption from expedited processes on behalf of political subdivision of the State, the political subdivision for which the request applies; and (c) the exemption category (operational or authority). Sections III and IV define the two exemption categories and establish criteria that must be met in each of the categories.
2. Justification and Documentation. A State must submit the justification and documentation addressed under Sections III and IV, as appropriate, for each exemption request.
III. AUTHORITY EXEMPTION CATEGORY
An authority exemption relieves a State from the requirement to enact a law in connection with a mandatory procedure because the State already complies with the requirements of the mandatory procedure or because the State does not have a State income tax.
There are two bases for granting authority exemptions. First, a State may be granted an authority exemption when it has current procedures, administrative regulations or court rules that have the same effect as and that otherwise meet the requirements of the mandated procedure. For instance, under court rules a State currently uses expedited processes to establish and enforce support orders in IV-D cases. In such a situation, the State must submit a cover letter and a copy of the court rules.
Second, an authority exemption may be granted if the State cannot implement State income tax offset procedures because the State does not have a State income tax. In such a situation, the State need only submit a letter containing a statement that the State does not have a State income tax. If the State enacts a State income tax at some time during the exemption period, the Director of OCSE will revoke the State's exemption which means the State must implement a process for offsetting State income tax refunds of absent parents within the time frame specified in section V or request an operational exemption.
A State need not request an exemption if it has a law in effect that is sufficient to meet the requirements of one of the mandated procedures despite lacking specific reference to child support. For example, if a State has a lien law in effect which can be applied in child support cases, but the law does not specifically provide for imposition of liens to collect child support, the State need not request an exemption from enacting the lien provisions of the new section 466 of the Act. In addition, if the State does not have a statute of limitations for establishing paternity, the State need not enact a law to authorize establishment of paternity up to a child's 18th birthday because it is already in compliance with this requirement.
IV. OPERATIONAL EXEMPTION CATEGORY
An operational exemption authorizes a State not to implement a mandatory procedure or to continue to operate a similar existing procedure which does not comply with all of the requirements in the statute and regulations.
A State must meet different criteria depending upon the type of request.
A. Operational Exemption Not to Implement a Procedure
A State may apply for an exemption from implementing any of the required procedures in section 466(a) of the Act. (A request for an exemption for expedited processes is addressed below under B as a request to continue to operate an existing procedure.) The State must submit:
Evidence that implementation of a particular procedure would not increase the efficiency and effectiveness of the State's Child Support Enforcement program.
To meet this criterion, a State must show why implementation of the particular mandated procedure would not have improved the State's collections-to-expenditures ratios (AFDC collections to total administrative expenditures and non-AFDC collections to total administrative expenditures) for the three fiscal years prior to the year of the request for exemption.
The evidence must include an estimate of:
- the developmental costs of implementing the procedure;
- the costs of operating the procedure compared to the expected collections as a result of implementing the procedure; and
- the staffing needed to operate the procedure.
In addition, the State must compare for a fiscal year period the effectiveness of its current program to the effectiveness of the program were it to implement the procedure, by responding to the following questions, as appropriate. Would the procedure increase the State's:
-ability to process cases, i.e., the average length of time to take action in a case?
-welfare savings by reducing the numbers of AFDC cases?
-number of support orders enforced?
-collections (inter and intra state)?
A State must fully document a request for an operational exemption and define the methodology(ies) used to reach its conclusions, which must be conceptually sound and supported by data that are reliable and representative. Where estimates are used, the State must identify any assumptions made and/or the sampling approach(es) used. In addition, all sampling must be statistically valid, include adequate sample size and take into account sampling error. All inferences should be made at a 95 percent (or greater) level of significance.
B. Operational Exemption to Operate a Similar Existing Procedure
If a State applies for an exemption to operate a similar existing procedure, it must meet the three criteria below. Please pay particular attention to the third criterion, which contains separate requirements for general situations and for expedited processes and income withholding. A State need address only a, b or c of the third criterion.
- A description of the existing procedure, including identification of those parts that conform to the statutory and regulatory requirements and those that do not conform.
To meet this criterion, a State must describe its existing system. The description should address procedures used for the handling and processing of cases. A State may submit guidelines or a manual that adequately describes the existing system. The State must also identify those aspects of the existing procedure that do not conform to the statutory and regulatory requirements.
- Evidence that no category of cases is excluded.
To meet this criterion, a State must attest to the fact by submitting a statement from the State IV-D Director that its existing procedure is used for all categories of IV-D cases, (inter-and intra-state) i.e., AFDC, non-AFDC and foster care cases. Instead of a written statement, a State may submit any portion of its procedures or guidelines that shows that all categories of IV-D cases are processed in the existing system.
3. Evidence that implementation of a mandatory procedure would not increase the efficiency and effectiveness of the State's existing procedure.
(a)To meet this criterion, the State's evidence must include an estimate of:
- the developmental costs of implementing the additional statutory or regulatory requirements;
- the operating costs compared to the collections expected as a result of the additional statutory or regulatory requirements;
- the staffing needed to operate the additional statutory or regulatory requirements.
The statistical requirements previously discussed in the last paragraph under IV.A. must be met.
(b)For expedited processes only evidence that the existing procedure meets the required time standard for processing IV-D cases and that the existing procedure permits all cases requiring action to be processed within a reasonable amount of time.
To receive an exemption from expedited processes for any or all political subdivisions in the State, the State must demonstrate the effectiveness and timeliness of support order issuance and enforcement within the political subdivision. In effect, the State must show that the current system meets the standard contained in the final regulations for expedited processes. This standard has the approval and endorsement of the American Bar Association's House of Delegates and is considered by that group to be an appropriate measure of the time in which domestic relations cases should be completed from case filing to disposition in a judicial system. [By "case filing" we mean the date on which the case is officially acknowledged or action is taken, for example, the date on which the case is given a docket or case number, or notice of support liability is sent or other official action is taken which initiates the process of establishing or enforcing a support obligation. "Disposition" means the date on which a support obligation or enforcement order is officially established and/or recorded].
There are two situations in which States may request an exemption from the expedited processes requirements of the statute and implementing regulations. The State may request an exemption because a court system is currently processing cases expeditiously or because an existing expedited process system (either administrative or expedited judicial process or both) does not comply with all of the requirements of the implementing regulations. In either situation, the State must show that its existing system establishes and enforces support orders within the time frames specified below. If the State's exemption request is for a court system, the State must include paternity cases in its analysis. If the State's exemption request is for an existing expedited process system, the State must include paternity cases in its analysis only if the existing expedited process system handles paternity cases. The time frames for case processing are:
- 90 percent of cases within 3 months;
- 98 percent within 6 months; and
- 100 percent within one year
Some court systems may appear efficient and effective because they only allow the IV-D agency to file a specified number of cases per week or per month. Systems that operate in such a manner do not meet the above standard because they are only processing a limited number of cases. Therefore, a State must attest to the fact that the system does not unduly restrict the flow of cases to the court but permits all cases requiring action to be processed within a reasonable amount of time.
A State may request an exemption from expedited processes throughout the State but it must justify and document its request by submitting data on each of its political subdivisions. In other words, a State may not average processing times of all political subdivisions' systems to meet the time standard set forth above. Instead, the State must demonstrate that the system in each political subdivision meets the standard.
The statistical requirements previously discussed in the last paragraph under IV.A. must be met.
(c)For an exemption from wage withholding on the grounds that the State's existing procedure contains different time frames than those in the statute and regulations, evidence that the State's existing procedure meets the time standard specified below.
A State may be operating a wage withholding system that complies with most of the requirements in 45 CFR 303.100, except the 45-day requirement for resolution of contested cases and/or the requirement that an employer initiate withholding no later than the first pay period which occurs 14 days after the notice to the employer is mailed. The State may request an exemption on the basis that its current withholding system processes a percentage of cases within the time frame set within the following standard. The standard approximates the maximum time frames for initiating withholding from the State's trigger date to the date the employer withholds wages established in the regulations at 45 CFR 303.100. The State's trigger date must be the date in which the arrearage equals the amount of support payable for one month or earlier if provided for by State law or requested by the absent parent.
Contested Cases- 95 percent of cases within 75 days
Uncontested Cases - 95 percent of cases within 45 days
The statistical requirements previously discussed in the last paragraph under IV.A. must be met.
V.TERMINATION OF EXEMPTION OR DISAPPROVAL OF REQUEST FOR EXTENSION
The regulations at 45 CFR 302.70(d) state that if the Secretary revokes an exemption during the exemption period, or does not grant an extension of an exemption, the State must enact the appropriate laws and implement the mandatory practice by the beginning of the fourth month after the end of the first regular, special, budget or other session of the State's legislature which ends after the date the exemption is revoked or the extension is denied. If no State law is necessary, the State must establish and be using the procedure by the beginning of the fourth month after the date the exemption is revoked or the extension is denied.
See also AT-85-17, AT-87-12, AT-89-08