Action Transmittal AT-94-06 - 4

Paternity Establishment and Revision of CSE Audit Regulations Part 4 - Regulatory Impact and Changes
Paternity Establishment and Revision of CSE Audit Regulations (continued)
Regulatory Flexibility Analysis

The Secretary certifies, under 5 U.S.C. 605(b), as enacted by the Regulatory 
Flexibility Act (Pub. L. 96-354), that this regulation will not result in a 
significant impact on a substantial number of small entities.  The primary 
impact is on State governments and individuals, which are not considered small 
entities under the Act.  Also, while OBRA '93 requires States to pass laws 
that may impact hospitals, these regulations do not govern hospitals per se 
and therefore do not have a significant impact on a substantial number of 
small entities.

Regulatory Impact Analysis

Executive Order 12866 requires that regulations be reviewed to ensure that 
they are consistent with the priorities and principles set forth in the 
Executive Order.  The Department has determined that this rule is consistent 
with these priorities and principles.  No costs are associated with this rule 
as it merely ensures consistency between the statute and regulations.

List of Subjects in 45 CFR Parts 301, 302, 303, 304, and 305

Accounting, Child support, Grant programs--social programs, and Reporting and 
recordkeeping requirements.  (Catalog of Federal Domestic Assistance Program 
No. 93.563, Child Support Enforcement Program)

Dated:  July 14, 1994


                                 
      Mary Jo Bane
      Assistant Secretary
        for Children and Families


Approved:  September 7, 1994


                                 
           Donna E. Shalala
           Secretary

For the reasons set out in the preamble, title 45 chapter III of the Code of 
Federal Regulations is amended as follows:

PART 301 -- STATE PLAN APPROVAL AND GRANT PROCEDURES

1.  The authority citation for Part 301 continues to read as set forth below:

Authority:  42 U.S.C. 651 through 658, 660, 664, 666, 667, 1301, and 1302.

2.  Section 301.1 is amended by adding in alphabetical order the definitions 
of "Birthing hospital" and "Procedures":

301.1  General definitions

*    *    *    *    *

Birthing hospital means a hospital that has an obstetric care unit or provides 
obstetric services, or a birthing center associated with a hospital.  A 
birthing center is a facility outside a hospital that provides maternity 
services.

*    *    *    *    *

Procedures means a written set of instructions which describe in detail the 
step by step actions to be taken by child support enforcement personnel in the 
performance of a specific function under the State's IV-D plan.  The IV-D 
agency may issue general instructions on one or more functions, and delegate 
responsibility for the detailed procedures to the office, agency, or political 
subdivision actually performing the function.

*    *    *    *    *

PART 302 -- STATE PLAN REQUIREMENTS

3.  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).

4.  Section 302.70 is amended by revising paragraphs (a), introductory text, 
and (a)(2), and by adding new paragraphs (a)(5)(iii) through (a)(5)(viii) and 
(a)(11) to read as follows:

302.70  Required State laws.

      (a) Required Laws.  The State plan shall provide that, in accordance 
with sections 454(20) and 466 of the Act, the State 
has in effect laws providing for and has implemented the following procedures 
to improve program effectiveness:

*    *    *    *    *

      (2)  Expedited processes to establish paternity and to establish and 
enforce child support orders having the same force and effect as those 
established through full judicial process, in accordance with the requirements 
set forth in 303.101 of this chapter;  

*    *    *    *    * 

      (5) *  *  *

      (iii)  Procedures for a simple civil process for voluntarily 
acknowledging paternity under which the State must provide that the rights and 
responsibilities of acknowledging paternity are explained, and ensure that due 
process safeguards are afforded.  Such procedures must include:

      (A) A hospital-based program in accordance with 303.5(g) for the 
voluntary acknowledgment of paternity during the period immediately before or 
after the birth of a child to an 
unmarried mother, and a requirement that all public and private birthing 
hospitals participate in the hospital-based program defined in 303.5(g)(2); 
and  

      (B) A process for voluntarily acknowledging paternity outside of 
hospitals.


      (iv)  Procedures under which the voluntary acknowledgment of paternity 
creates a rebuttable or, at the option of the State, conclusive presumption of 
paternity, and under which such voluntary acknowledgment is admissible as 
evidence of paternity;

      (v)  Procedures which provide that any objection to genetic testing 
results must be made in writing within a specified number of days before any 
hearing at which such results may be introduced into evidence; and if no 
objection is made, a written report of the test results is admissible as 
evidence of paternity without the need for foundation testimony or other proof 
of authenticity or accuracy;

      (vi)  Procedures which create a rebuttable or, at the option of the 
State, conclusive presumption of paternity upon genetic testing results 
indicating a threshold probability of the alleged father being the father of 
the child; 

      (vii)  Procedures under which a voluntary acknowledgment must be 
recognized as a basis for seeking a support order without requiring any 
further proceedings to establish paternity; and

      (viii)  Procedures requiring a default order to be entered in a 
paternity case upon a showing that process was served on the defendant in 
accordance with State law, that the defendant failed to respond to service in 
accordance with State procedures, and any additional showing required by State 
law.

*    *    *    *    *

      (11)  Procedures under which the State must give full faith and credit 
to a determination of paternity made by any other State, whether established 
through voluntary acknowledgment or through administrative or judicial 
processes.

*    *    *    *    * 

PART 303 -- STANDARDS FOR PROGRAM OPERATIONS

5.  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).

6.  Section 303.4 is amended by revising paragraph (d) and adding paragraph 
(f) to read as follows:  
 
303.4  Establishment of support obligations.

*    *    *    *    *


      (d)  Within 90 calendar days of locating the alleged father or 
noncustodial parent, regardless of whether paternity has been established, 
establish an order for support or complete service of process necessary to 
commence proceedings to establish a support order and, if necessary, paternity 
(or document unsuccessful attempts to serve process, in accordance with the 
State's guidelines defining diligent efforts under 303.3(c)).

*    *    *    *    * 

      (f)  Seek a support order based on a voluntary acknowledgment in 
accordance with 302.70(a)(5)(vii).  

*    *    *    *    *

7.  Section 303.5 is amended by revising paragraph (a) and by adding 
paragraphs (f), (g), and (h) to read as follows:

303.5  Establishment of paternity.

      (a)  For all cases referred to the IV-D agency or applying for services 
under 302.33 of this chapter in which paternity has not been established, the 
IV-D agency must, as appropriate:

      (1)  Provide an alleged father the opportunity to voluntarily 
acknowledge paternity in accordance with 302.70(a)(5)(iii); and

      (2)  Attempt to establish paternity by legal process established under 
State law.

*    *    *    *    *

      (f) The IV-D agency must seek entry of a default order by the court or 
administrative authority in a paternity case by showing that process has been 
served on the defendant in accordance with State law, that the defendant has 
failed to respond to service in accordance with State procedures, and any 
additional showing required by State law, in accordance with 
302.70(a)(5)(viii).

      (g) Hospital-based program.  

      (1) The State must establish, in cooperation with hospitals, a 
hospital-based program in every public and private birthing hospital.  These 
programs must be operational in birthing hospitals statewide no later than 
January 1, 1995 (unless Federal law governing the effective date gives the 
State additional time).  

      (2) During the period immediately before or after the birth of a child 
to an unmarried woman in the hospital, a hospital-based program must, at a 
minimum:

      (i)  Provide to both the mother and alleged father, if he is present in 
the hospital:  (A) written materials about paternity establishment, (B) the 
forms necessary to voluntarily acknowledge paternity, (C) a written 
description of the rights and responsibilities of acknowledging paternity, and 
(D) the opportunity to speak with staff, either by telephone or in person, who 
are trained to clarify information and answer questions about paternity 
establishment; 

      (ii)  Provide the mother and alleged father, if he is present, the 
opportunity to voluntarily acknowledge paternity in the hospital;

      (iii)  Afford due process safeguards; and

      (iv)  Forward completed acknowledgments or copies to the entity 
designated under 303.5(g)(8).

      (3) A hospital-based program need not provide services specified in 
paragraph (g)(2) of this section in cases where the mother or alleged father 
is a minor or a legal action is already pending, if the provision of such 
services is precluded by State law.

      (4) The State must require that a voluntary acknowledgment obtained 
through a hospital-based program be signed by both parents, and that the 
parents' signatures be authenticated by a notary or witness(es).  
      
      (5)  The State must provide to all public and private birthing hospitals 
in the State (i) written materials about paternity establishment, (ii) forms 
necessary to voluntarily acknowledge paternity, and (iii) copies of a written 
description of the rights and responsibilities of acknowledging paternity.

      (6)  The State must provide training, guidance, and written instructions 
regarding voluntary acknowledgment of paternity, as necessary to operate the 
hospital-based program.

      (7)  The State must assess each birthing hospital's program on at least 
an annual basis.

      (8) The State must designate an entity to which hospital-based programs 
must forward completed voluntary acknowledgments or copies in accordance with 
303.5(g)(2)(iv).  Under State procedures, this entity must be responsible for 
promptly recording identifying information about the acknowledgments with a 
statewide database, and the IV-D agency must have timely access to whatever 
identifying information and documentation it needs to determine in accordance 
with 303.5(h) if an acknowledgment has been recorded and to seek a support 
order on the basis of a 
recorded acknowledgment in accordance with 303.4(f). 

      (h)  In IV-D cases needing paternity establishment, the IV-D agency must 
determine if identifying information about a voluntary acknowledgment has been 
recorded in the statewide database in accordance with 303.5(g)(8).

8.  Section 303.101 is amended by revising paragraphs (a), (b), (c)(1) and 
(3), (d)(2) through (4), and (e), and by adding paragraph (d)(5) to read as 
follows:

303.101  Expedited processes.

      (a)  Definition.  Expedited processes means administrative or expedited 
judicial processes or both which increase effectiveness and meet processing 
times specified in paragraph (b)(2) of this section.

      (b)  Basic requirement.  (1) The State must have in effect and use, in 
interstate and intrastate cases, expedited processes as specified under this 
section to establish paternity and to establish and enforce support orders.

      (2)  Under expedited processes:

      (i)  In IV-D cases needing support order establishment, regardless of 
whether paternity has been established, action to 
establish support orders must be completed from the date of service of process 
to the time of disposition within the following timeframes:  (A) 75 percent in 
6 months; and (B) 90 percent in 12 months.

      (ii)  In IV-D cases where a support order has been established, actions 
to enforce the support order must be taken within the timeframes specified in 
303.6(c)(2) and 303.100;

      (iii)  For purposes of the timeframe at 303.101(b)(2)(i), in cases 
where the IV-D agency uses long-arm jurisdiction and disposition occurs within 
12 months of service of process on the alleged father or noncustodial parent, 
the case may be counted as a success within the 6 month tier of the timeframe, 
regardless of when disposition occurs in the 12 month period following service 
of process.

      (iv)  Disposition, as used in paragraphs (b)(2)(i) and (iii) of this 
section, means the date on which a support order is officially established 
and/or recorded or the action is dismissed.  

      (c)  *  *  *

      (1)  Paternities and orders established by means other than full 
judicial process must have the same force and effect under State law as 
paternities and orders established by full judicial process within the State;


*    *    *    *    *

      (3)  The parties must be provided a copy of the voluntary acknowledgment 
of paternity, paternity determination, and/or support order;

*    *    *    *    * 

      (d)  *  *  *

      (2)  Evaluating evidence and making recommendations or decisions to 
establish paternity and to establish and enforce orders;

      (3)  Accepting voluntary acknowledgment of paternity or support 
liability and stipulated agreements setting the amount of support to be paid;

      (4)  Entering default orders upon a showing that process has been served 
on the defendant in accordance with State law, that the defendant failed to 
respond to service in accordance with State procedures, and any additional 
showing required by State law; and

      (5)  Ordering genetic tests in contested paternity cases in accordance 
with 303.5(d)(1).

*    *    *    *    *


      (e)  Exemption for political subdivisions.  A State may request an 
exemption from any of the requirements of this section for a political 
subdivision on the basis of the effectiveness and timeliness of paternity 
establishment, support order issuance or 
enforcement within the political subdivision in accordance with the provisions 
of 302.70(d) of this chapter.

PART 304 -- FEDERAL FINANCIAL PARTICIPATION

9.  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).

10.  Section 304.20 is amended by adding paragraphs (b)(2)(vi) through (viii) 
to read as follows:

304.20  Availability and rate of Federal financial participation.

*    *    *    *    *

      (b) *  *  *

      (2)  The establishment of paternity including:


*    *    *    *    *

      (vi) Payments up to $20 to birthing hospitals and other entities that 
provide prenatal or birthing services for each voluntary acknowledgment 
obtained pursuant to an agreement with the IV-D agency;

      (vii) Developing and providing to birthing hospitals and other entities 
that provide prenatal or birthing services written and audiovisual materials 
about paternity establishment and forms necessary to voluntarily acknowledge 
paternity; and

      (viii) Reasonable and essential short-term training regarding voluntary 
acknowledgment of paternity associated with a State's hospital-based program 
as defined by 303.5(g)(2).

*    *    *    *    *

11.  Section 304.23 is amended by revising paragraph (d) to read:

304.23  Expenditures for which Federal financial participation is not 
available.

*    *    *    *    *

      (d)  Education and training programs and educational services except 
direct cost of short term training provided to IV-D agency staff or pursuant 
to 304.20(b)(2)(viii) and 304.21.

*    *    *    *    *

12.  The authority citation for Part 305 is revised to read as set forth 
below:
    
Authority:  42 U.S.C. 603(h), 604(d), 652(a)(1), (4) and (g), and 1302.

13.  Section 305.0 is revised to read as follows:  

305.0  Scope.

This part implements the requirements in sections 452(a)(4) and 403(h) of the 
Act for an audit, at least once every three years, of the effectiveness of 
State Child Support Enforcement programs under title IV-D and for a possible 
reduction in Federal reimbursement for a State's title IV-A program pursuant 
to sections 403(h) and 404(d) of the Act.  Sections 305.10 through 305.13 
describe the audit.  Section 305.20 sets forth audit criteria and subcriteria 
the Office will use to determine program effectiveness and defines an 
effective program for purposes of an audit.  Section 305.98 sets forth the 
performance indicators the Office will use to determine State IV-D program 
effectiveness.  Section 305.99 provides for the issuance of a notice and 
corrective action period if a State is found by the Secretary not to have an 
effective IV-D program.  Section 305.100 provides for the imposition of a 
penalty if a State is found by the Secretary not to have had an effective 
program and to have failed to take corrective action and achieve substantial 
compliance within the period prescribed by the Secretary.

14.  Section 305.1 is revised to read as follows:  

305.1  Definitions.

The definitions found in 301.1 of this chapter are also applicable to this 
part.

15.  Section 305.10 is amended by revising the last sentence of paragraph (a) 
and paragraph (c)(2) to read as follows:

305.10 Timing and scope of audit.

      (a) *  *  * The audit of each State's program will be a comprehensive 
review using the criteria prescribed in 305.20 and 305.98 of this part.

*    *    *    *    *

      (c)  *  *  *

      (2) Use the audit standards promulgated by the Comptroller General of 
the United States in "Government Auditing Standards."

*    *    *    *    *

16.  Section 305.12 is amended by revising paragraph (a) to read as follows:

305.12 State comments.

      (a) Prior to the start of the actual audit, the Office will hold an 
audit entrance conference with the IV-D agency.  At that conference, the 
Office will explain how the audit will be performed and make any necessary 
arrangements.

*    *    *    *    *

17.   Section 305.20 is revised to read as follows:

305.20 Effective support enforcement program.

      For the purposes of this part and section 403(h) of the Act, in order to 
be found to have an effective program in substantial compliance with the 
requirements of title IV-D of the Act:

      (a) For any audit period which begins on or after December 23, 1994, a 
State must meet the IV-D State plan requirements contained in Part 302 of this 
chapter measured as follows:

      (1) The State must meet the requirements under the following criteria:

      (i) Statewide operations, 302.10;

      (ii)  Reports and maintenance of records, 302.15(a);

      (iii)  Separation of cash handling and accounting functions, 302.20; 
and

      (iv) Notice of collection of assigned support, 302.54.

      (2) The State must have and use procedures required under the following 
criteria in at least 90 percent of the cases reviewed for each criterion:

      (i) Establishment of cases, 303.2(a); and

      (ii)  Case closure criteria, 303.11.

      (3) The State must have and use procedures required under the following 
criteria in at least 75 percent of the cases reviewed for each criterion:

      (i) Collection and distribution of support payments, including:  
collection and distribution of support payments by the IV-D agency under 
302.32(b) and (f); distribution of support collections under 302.51; and 
distribution of support collected in title IV-E foster care maintenance cases 
under 302.52; 

      (ii) Establishment of paternity and support orders, including:  
establishment of a case under 303.2(b); services to individuals not receiving 
AFDC or title IV-E foster care assistance, under 302.33(a)(1) through (4); 
provision of services in interstate IV-D cases under 303.7(a), (b) and 
(c)(1) through (6) and (8) through (10); location of non-custodial parents 
under 303.3; establishment of paternity under 303.5(a) and (f); guidelines 
for setting child support awards under 302.56; and establishment of support 
obligations under 303.4(d), (e) and (f);

      (iii)  Enforcement of support obligations, including, in all appropriate 
cases:  establishment of a case under 303.2(b); services to individuals not 
receiving AFDC or title IV-E foster care assistance, under 302.33(a)(1) 
through (4); provision of services in interstate IV-D cases under 303.7(a), 
(b) and (c)(1) through (6) and (8) through (10); location of non-custodial 
parents under 303.3; enforcement of support obligations under 303.6, 
including submitting once a year all appropriate cases in accordance with 
303.6(c)(3) to State and Federal income tax refund offset; and wage 
withholding under 303.100.  In cases in which wage withholding cannot be 
implemented or is not available and the non-custodial parent has been located, 
States must use or attempt to use at least one enforcement technique available 
under State law in addition to Federal and State tax refund offset, in 
accordance with State laws and procedures and applicable State guidelines 
developed under 302.70(b) of this chapter;

      (iv) Review and adjustment of child support orders, including:  
establishment of a case under 303.2(b); services to individuals not receiving 
AFDC or title IV-E foster care assistance, under 302.33(a)(1) through (4); 
provision of services in interstate IV-D cases under 303.7(a), (b) and 
(c)(1) through (6) and (8) through (10); location of non-custodial parents 
under 303.3; guidelines for setting child support awards under 302.56; and 
review and adjustment of support obligations under 303.8; and

      (v) Medical support, including:  establishment of a case under 
303.2(b); services to individuals not receiving AFDC or title IV-E foster 
care assistance, under 302.33(a)(1) through (4); provision of services in 
interstate IV-D cases under 303.7(a), (b) and (c)(1) through (6) and (8) 
through (10);  location of non-custodial parents under 303.3; securing 
medical support information under 303.30; and securing and enforcing medical 
support obligations under 303.31.

      (4) With respect to the 75 percent standard in 305.20(a)(3):

      (i) Notwithstanding timeframes for establishment of cases in 303.2(b); 
provision of services in interstate IV-D cases under 303.7(a), (b) and 
(c)(4) through (6), (8) and (9); location and support order establishment 
under 303.3(b)(3) and (5), and 303.4(d), if a support order needs to be 
established in a case and an order is established during the audit period in 
accordance with the State's guidelines for setting child support awards, the 
State will be considered to have taken appropriate action in that case for 
audit purposes.

      (ii) Notwithstanding timeframes for establishment of cases in 303.2(b); 
provision of services in interstate IV-D cases under 303.7(a), (b) and 
(c)(4) through (6), (8) and (9); and location and review and adjustment of 
support orders contained in 303.3(b)(3) and (5), and 303.8, if a particular 
case has been reviewed and meets the conditions for adjustment under State 
laws and procedures and 303.8, and the order is adjusted, or a determination 
is made, as a result of a review, during the audit period, that an adjustment 
is not needed, in accordance with the State's guidelines for setting child 
support awards, the State will be considered to have taken appropriate action 
in that case for audit purposes.

      (iii) Notwithstanding timeframes for establishment of cases in 
303.2(b); provision of services in interstate IV-D cases under 303.7(a), 
(b) and (c)(4) through (6), (8) and (9); and location and wage withholding in 
303.3(b)(3) and (5), and 303.100, if wage withholding is appropriate in a 
particular case and wage withholding is implemented and wages are withheld 
during the audit period, the State will be considered to have taken 
appropriate action in that case for audit purposes.

      (iv) Notwithstanding timeframes for establishment of cases in 303.2(b); 
provision of services in interstate IV-D cases under 303.7(a), (b) and 
(c)(4) through (6), (8) and (9); and location and enforcement of support 
obligations in 303.3(b)(3) and (5), and 303.6, if wage withholding is not 
appropriate in a particular case, and the State uses at least one enforcement 
technique available under State law, in addition to Federal and State income 
tax refund offset, which results in a collection received during the audit 
period, the State will be considered to have taken appropriate action in the 
case for audit purposes.

      (5) The State must meet the requirements for expedited processes under 
303.101(b)(2)(i) and (iii), and (e).

      (6) The State must meet the criteria referred to in 305.98(c) of this 
part relating to the performance indicators prescribed in 305.98(a).

18.  Sections 305.21 through 305.57 are removed and reserved.  

305.21-305.57 [Removed and Reserved] 

19.   Section 305.98 is amended by revising the introduction to paragraph (c) 
and paragraph (d) to read as follows:

305.98  Performance indicators and audit criteria.

*    *    *    *    *

      (c) The Office shall use the following procedures and audit criteria to 
measure State performance.

*   *   *

      (d) The scoring system provided in paragraph (c) of this section will be 
described and updated whenever OCSE determines that it is necessary and 
appropriate by the Office in regulations.

20.  Section 305.99 is amended by revising paragraph (b)(2) to 
read as follows:

305.99  Notice and corrective action period.

*    *    *    *    *

      (b)  *  *   *

      (2) Identify any audit criteria listed in 305.20(a)(3) of
this part that the State met only marginally [that is, in 75 to 80 percent of 
cases reviewed for criteria in 305.20(a)(3)];
*    *    *    *    * 

[FR Doc. 94-31313 Filed 12-21-94; 8:45 am]
Billing Code 4150-04-P