NPRM: Consumer Reporting Agencies; Certified Statewide Systems; President's Reform Initiative

ACTION TRANSMITTAL

OCSE-AT-96-02

January 31, 1996

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

SUBJECT: Proposed Rule - Amendments to Federal regulations governing procedures for making information available to Consumer Reporting Agencies; extension of the deadline for certified Statewide systems; and revisions for the President's Reform Initiative.

ATTACHMENT: Attached is a proposed rule, published in the Federal Register on January 29,1996 (61 FR 2774) that would amend Federal regulations governing procedures for making information available to Consumer Reporting Agencies and revise or remove regulations, in part or whole, in response to the President's Memorandum of March 4, 1995 to heads of Departments and Agencies which announced a government-wide Regulatory Reinvention Initiative to reduce or eliminate mandated burdens on States, other governmental agencies or the private sector. In addition, the proposal would extend to October 1, 1997 the deadline for having a certified operational computerized support enforcement system.

REGULATION REFERENCE: 45 CFR Parts 301, 302, 303, 304, 306 and 307.

DATES: Consideration will be given to written comments received by March 29, 1996. Address comments to: Office of Child Support Enforcement, Department of Health and Human Services, 370 L'Enfant Promenade, S.W., Washington, D.C. 20447, Attention: Director, Policy and Planning Division.

INQUIRIES: ACF Regional Administrators

David Gray Ross
Deputy Director
Office of Child Support Enforcement

[Federal Register: January 29, 1996 (Volume 61, Number 19)]
[Proposed Rules]
[Page 2774-2781  (PDF)]
From the Federal Register Online via GPO Access

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Parts 301, 302, 303, 304, 306 and 307
RIN 0970-AB57

Child Support Enforcement Program; State Plan Approval and Grant
Procedures, State Plan Requirements, Standards for Program Operations,
Federal Financial Participation and Optional Cooperative Agreements for
Medical Support Enforcement Computerized Support Enforcement Systems
AGENCY: Office of Child Support Enforcement (OCSE).
ACTION: Notice of proposed rulemaking.
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SUMMARY: This proposed rule would amend Federal regulations governing procedures for making information available to consumer reporting agencies (CRAs). These provisions implement the requirements of section 212 of the Social Security Act Amendments of 1994 (Pub. L. 103-432) which require States to adopt procedures for periodic reporting of information to CRAs, effective October 1, 1995. This proposed rule would implement Public Law 104-35 which was enacted on October 12, 1995 which revises section 454(24) of the Social Security Act.

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In addition, it would revise or remove regulations, in part or whole, in response to the President's Memorandum of March 4, 1995 to heads of Departments and Agencies which announced a government-wide Regulatory Reinvention Initiative to reduce or eliminate burdens on States, other governmental agencies or the private sector.

DATES: Consideration will be given to comments received by March 29,1996.
ADDRESSES: Send comments to Director, Office of Child Support Enforcement, Administration for Children and Families, 370 L'Enfant Promenade, SW., 4th floor, Washington, DC 20447. Attention: Director, Policy and Planning Division, Mail Stop: OCSE/DPP. Comments will be available for public inspection Monday through Friday, 8:30 a.m. to 5:00 p.m. on the 4th floor of the Department's offices at the above address.
FOR FURTHER INFORMATION CONTACT: Policy Branch, OCSE, specifically: Tom Killmurray (202) 401-4677 regarding mandatary reporting of child support information to consumer reporting agencies; Marilyn R. Cohen (202) 401-5366 regarding all other regulatory revisions.

SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The information collection requirement regarding submittal of the State plan preprint page was approved by the Office of Management and Budget under OMB control number 0960-0385. State plan preprint page revisions necessitated by this proposed rule will be submitted to OMB for approval. Otherwise, this rule does not require information collection activities and, therefore, no additional approvals are necessary under the Paperwork Reduction Act of 1980 (Pub. L. 96-511). Statutory Authority
These proposed regulations are published under the authority of section 466(a) of the Social Security Act (the Act), as amended by the Social Security Act Amendments of 1994. Section 466(a)(7), as amended, requires States to have procedures which establish periodic reporting of child support arrearage information to CRAs. The statutory effective date for required reporting of child support information in certain cases to consumer reporting agencies is October 1, 1995. The name of any parent who owes overdue support and is at least two months delinquent in the payment of support and the amount of such delinquency must be reported to CRAs.
Section 466(a)(7) contains three exceptions to the periodic reporting requirement. First, if the amount of the overdue support involved in any case is less than $1,000, information regarding such amount shall be made available only at the option of the State. Secondly, any information with respect to an absent parent shall be made available under such procedures, only after notice has been sent to such absent parent of the proposed action, and such absent parent has been given a reasonable opportunity to contest the accuracy of such information (and after full compliance with all procedural due process requirements of the State). Finally, such information shall not be made available to a CRA which the State determines does not have sufficient capability to make systematic and timely use of such information, or an entity which has not furnished evidence satisfactory to the State that the entity is a CRA.
This regulation is also proposed under the authority granted to the Secretary by section 1102 of the Act. Section 1102 of the Act requires the Secretary to publish regulations that may be necessary for the efficient administration of the functions for which she is responsible under the Act. In accordance with the Presidential directive to executive branch regulatory agencies to identify existing regulations that are redundant or obsolete, OCSE has examined Part 300 of Title 45, Code of Federal Regulations to evaluate those areas where regulations should be removed. Background
The Child Support Enforcement Amendments of 1984 (Pub. L. 98-378) featured provisions that required critical improvements in State and local child support enforcement programs. Making child support delinquency information available to credit bureaus upon their request was one of the statutorily prescribed procedures required of States by the 1984 amendments.
Reporting overdue child support owed by obligors to consumer reporting agencies (CRAs) is an effective enforcement technique that has several benefits. It creates an incentive for obligors to make prompt and consistent payments, because delinquent payment information could negatively impact their credit history, thus endangering their purchasing power. Credit reporting may be particularly effective in cases involving self-employed obligors, which can be among the most challenging cases to work. Because many self-employed obligors are highly dependent on credit to operate their businesses, impeding their credit or purchasing power may deter noncompliance.
The addition of information about unpaid child support on individual credit records may make it less likely for obligors to incur other debts which could interfere with their ability to pay child support. Finally, reporting of child support delinquencies may help child support recipients obtain credit. Child support information is often used to substantiate income by custodial parents attempting to obtain credit. CRAs may use the information reported by IV-D agencies to verify overdue child support and subsequent payment information.
Much of the expansion of credit reporting was due to enactment of the Child Support Enforcement Amendments of 1984, which mandated that States respond to CRA requests for information on obligors who are $1,000 or more in arrears and reside in the State. Most States have gone beyond the legal requirement and are routinely reporting information to CRAs.
In addition, the Ted Weiss Act of 1992 (Pub. L. 102-537) amended the Fair Credit Reporting Act (15 U.S.C. 1681a[f]) to require consumer credit reporting agencies to include in consumer reports information, no more than seven years old, on overdue child support when provided by child support enforcement agencies, or received otherwise and verified by any local, State or Federal agency.
Currently, approximately 40 States operate routine periodic credit reporting processes, without the necessity of a request from the credit bureau. Most of the States report information to CRAs if arrearages reach or exceed $1,000; several report arrearages of lesser accruals. California has no minimum amount, and in fact, reports all ordered child support to credit bureaus irrespective of a delinquency. Under the proposed rule, States will have the flexibility to decide what ``periodic'' reporting is; some States may report monthly, others may report quarterly. The majority of States report information to CRAs on a monthly basis, a few others on a bimonthly or annual basis. The method of reporting varies. Thirty-six States report in an automated manner, using, for example, tape matches; nine States provide information manually; several States employ a combination of both reporting methods.
The President and Congress decided to improve this enforcement tool with the Social Security Act Amendments of 1994 (Pub. L. 103-432). These reforms are based on successful State practices as well as a recommendation by the U.S.

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Commission on Interstate Child Support in its comprehensive report to the Congress, ``Supporting our Children: A Blueprint for Reform.'' Because Congress added the mandate to section 466(a) of the Act, reporting to credit bureaus is a requirement which States must meet as a condition of State plan approval under section 454 of the Act.
This proposed rule is also in response to the President's Memorandum of March 4, 1995 to heads of Departments and Agencies which announced a government-wide Regulatory Reinvention Initiative to reduce or eliminate mandated burdens on States, other governmental agencies or the private sector.
The Presidential Memorandum required agencies, by June 1, 1995, to conduct a page-by-page review of all regulations to eliminate or revise those that are outdated or otherwise in need of reform. OCSE conducted such a review, resulting in the proposed revisions, set forth in this document. Both substantive and technical changes are proposed including recodification such as renumbering and terminology revisions.
In our analysis of existing regulations, we took a cautionary approach recognizing that significant legislation to overhaul the welfare system, including major reform to the child support enforcement program, is actively pending before the 104th Congress. Accordingly, numerous existing rules will potentially be affected. We have deferred recommending any changes in existing rules which may be impacted by enactment of an incipient legislative change. However, we consider the changes in this proposed rule as only the first part of our response to the President's Regulation Reinvention Initiative. We will work with our partners to identify additional regulations which should be reevaluated given the new direction of regulatory reinvention.
Description of Regulatory Provisions
We propose to make technical revisions, including recodification, to the following regulations, in addition to amending section 303.105, ``Procedures for making information available to consumer reporting agencies''.

Section 301.1 General Definitions
We propose that the specified years for Applicable matching rate of ``1983 through 1987, 70 percent, FY 1988 and FY 1989, 68%,'' referenced in section 301.1 be removed as such dates have passed.

Section 301.15 Grants
We propose two technical revisions in this section. Part of the mailing address in paragraph (a)(1) should be updated by replacing, ``Social and Rehabilitation Service, Attention: Finance Division, Washington, DC 20201'' with ``Administration for Children and Families, Office of Program Support, Division of Formula, Entitlement and Block Grants, 370 L'Enfant Promenade, SW., Washington, DC 20447.'' In addition, we propose to replace the phrase, ``Subpart G Matching and Cost Sharing'' with ``45 CFR 74.23 Cost Sharing or Matching'' and replace the phrase ``Subpart I Financial Reporting Requirements'' with ``45 CFR 74.52 Financial Reporting'' in paragraph (e). We propose this latter revision to coincide with substantial revisions of 45 CFR Part 74 by DHHS August 25, 1994 (59 FR 43760).

Section 302.15 Reports and Maintenance of Records
This rule implements section 454(10) of the Act which does not specify use of microfilm for record retention. We propose that paragraph (b) ``Conditions for Optional Use of Microfilm Copies,'' be removed as microfilm use is obsolete due to automatic case tracking and electronic filing capability. The proposed change will result in the following: Paragraph (a) will be without designation, paragraphs (a)(1) and (a)(2) will be redesignated (a) and (b), and roman numerals (i) through (vii) will be redesignated as arabic numbers (1) through (7), respectively. Removal of the microfilm reference does not preclude States from continuing to use microfilm as an information storage medium.

Section 302.33 Services to Individuals Not Receiving AFDC or Title IV-E Foster Care Assistance
We propose to remove paragraph (c)(1), Application Fee, as it refers to requirements in effect prior to October 1, 1985, which date has passed. Thus, paragraph (2) will be renumbered as paragraph (1) and paragraph (3) will be renumbered as paragraph (2). In addition, we propose to remove paragraph (e) Assignment. Because a State is not required to take an assignment but has discretion to do so, this section is being removed as a ``non-mandatory'' aspect of existing rules. Removal of this subsection does not preclude a State from taking an assignment of rights from a non-AFDC recipient of IV-D services if necessary under State law or practice in order to deliver program service.

Section 302.34 Cooperative Arrangements
The authorities for this rule are sections 1102 and 454(7) of the Act. We propose to remove paragraph (b). As the result of the passage of time, cooperative agreements should meet Sec. 303.107 criteria at this time. This revision would leave paragraph (a) without designation. We further propose to revise the first sentence of the remaining paragraph by adding ``under Sec. 303.107'' after ``cooperative arrangements.''

Section 302.36 Provision of Services in Interstate IV-D Cases
The authorities for this rule are section 454(9) of the Act which addresses standards prescribed by the Secretary and section 1102 of the Act which addresses the Secretarial authority to issue regulations necessary for program administration. These requirements were placed in regulation to clarify that States are required to provide all necessary IV-D services in interstate cases. However, we propose to remove paragraphs (a)(1) through (a)(5), to eliminate repeating Sec. 303.7(c)(7), explicit provisions which specify the various functional responsibilities by the responding State. This does not alter the requirement for provision of services; it merely removes unnecessary text referenced elsewhere. This proposed revision would remove ``for:'' at the end of paragraph (a) and subparagraphs (a)(1) through (a)(5), thus ending the paragraph with the word, ``chapter.''

Section 302.37 Distribution of Support Payments
This rule implements section 454(11) of the Act. We propose to remove it because it references Secs. 302.32 and 302.51 which duplicate this section.

Section 302.54 Notice of Collection of Assigned Support
This rule implements section 454(5) of the Act which does not specify dates. Therefore, we propose to remove paragraph (a) which is obsolete as it specifies requirements in effect until December 31, 1992, which event has now passed.
Thus, paragraph (b) would be redesignated paragraph (a) and paragraph (c) would be redesignated paragraph (b), respectively.
We also propose to revise paragraph (b)(2) by adding the word, ``collected'' after the second mention of ``support'' to read as follows: ``The monthly notice must list separately payments collected from each absent parent when more than one absent parent owes support to the family and must indicate the

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amount of current support collected, the amount of arrearages collected and the amount of support collected which was paid to the family.'' This addition is made to clarify that it is the amount actually collected, not the amount owed that must be included in the notice, and will be consistent with the statutory language at section 454(5)(A) of the Act.

Section 302.54(c)(1)(i) specifies one of the grounds upon which a State may be granted a waiver to permit the issuance of quarterly, rather than monthly, notices of the amount of support collected. Waivers granted under this criterion were based upon the State's lack of a computerized support enforcement system consistent with Federal requirements or the lack of an automated system that is able to generate monthly notices. Such waivers were valid through September 30, 1995. On October 12, 1995, Public Law 104-35 was signed into law, which revised Section 454(24) of the Social Security Act. The revised statute extends the date by which States will have in effect, and approved by the Secretary, a operational automated data processing and information retrieval system meeting all requirements of Federal law from October 1, 1995 to October 1, 1997. Because waivers available under Sec. 302.54(c)(1)(i) are linked to the deadline by which States must have operational automated systems, we propose to revise the date clause to read ``Until September 30, 1997,''. Any automated system developed to meet the Federal requirements for a certified comprehensive Statewide system must produce mandated monthly notices of collections. States with previous waivers that expired September 30, 1995 can apply for extension of the waiver if the State does not have a computerized support enforcement system consistent with Federal requirements or lacks an automated system that is able to generate monthly notices. Extension of waivers will be granted as part of the State plan approval process.

Section 302.70 Required State Laws
Section 466(a) of the Act requires a State to enact laws providing for these new requirements. Consistent with implementation of the Family Support Act requirements, however, States may implement provisions using regulation, procedure, or court rule, instead of law, if such regulation, procedure, or rule has the same force and effect under State law on the parties to whom they apply.
We propose to revise section 302.70(a)(7) to reflect the statutory amendment which mandates reporting of certain child support arrearage information to credit reporting agencies. Each IV-D State plan requirement remains effective on the date indicated by the statute or implementing regulation.

Section 302.85 Mandatory Computerized Support Enforcement System
On October 12, 1995, Public Law 104-35 was signed into law, which revises Section 454(24) of the Social Security Act. The revised statute extends the date by which States will have in effect, and approved by the Secretary, an operational automated data processing and information retrieval system meeting all requirements of Federal law from October 1, 1995 to October 1, 1997. Because the deadline by which States must have operational automated systems has been changed, we propose to remove the date in paragraph (a)(2) ``October 1, 1995'' and replace it with ``October 1, 1997.''

Section 303.10 Procedures for Case Assessment and Prioritization
This rule was issued under authority of section 1102 of the Act, as part of implementation of the Child Support Enforcement Amendments of 1984 (Pub. L. 98-378). We propose to remove this section because case assessment and prioritization procedures are permissive and standards for an effective program at 45 CFR Part 303 require the State to provide necessary IV-D services in all cases in an efficient and effective manner. Therefore, it is not necessary to place this information in regulation.

Section 303.31 Securing and Enforcing Medical Support Obligations
This rule implements section 452(f) of the Act. We propose to replace references to ``Sec. 306.50(a)'' with ``Sec. 303.30'' in paragraphs (b)(6) and (b)(7). This technical change is required to correct a clerical error. Revisions to Secs. 303.30 and 303.31 set forth in the final rule issued March 8, 1991 did not make these technical changes.

Section 303.73 Applications to Use The Courts of the United States to Enforce Court Orders
This regulation is based on sections 452(a)(8) and 460 of the Act. An Action Transmittal (AT) issued February 6, 1976 (OCSE-AT-76-1) and revised May 12, 1976 (OCSE-AT-76-8) covers paragraphs (a) and (b) of the regulation. Since the requirements in this regulation are infrequently used, it is sufficient for users to follow guidance in the AT. The AT gives express instructions for submitting cases for consideration for referral to Federal court. Paragraph (c) is unnecessary to be placed in regulation as it merely specifies internal instructions to the Regional Office.
Therefore, we propose to revise the end of the introductory portion of paragraph (a) by removing, ``to demonstrate that'' and completing the paragraph by adding, ``in accordance with instructions issued by the Office,'' thus removing paragraphs (a)(1) through (c).

Section 303.100 Procedures for Wage or Income Withholding
In the administration of wage or income withholding, Sec. 303.100(g)(3) requires that effective October 1, 1995, States must be capable of receiving withheld amounts and accounting information which are electronically transmitted by the employer to the State. This effective date for electronic funds transfer capability was directly linked to the date by which States are required to have operational automated child support enforcement systems. On October 12, 1995, Public Law 104-35 was signed into law, which revises Section 454(24) of the Social Security Act. The revised statute extends the date by which States will have in effect, and approved by the Secretary, an operational automated data processing and information retrieval system meeting all requirements of Federal law from October 1, 1995 to October 1, 1997. Because the deadline by which States must have operational automated systems has been changed, we propose to revise the introductory clause in paragraph (g)(3) to remove the phrase ``Effective October 1, 1995,'' and replace it with ``Effective October 1, 1997,''.

Section 303.105 Procedures for Making Information Available to Consumer Reporting Agencies
We propose to implement the requirements of amended section 466(a)(7) by revising the heading of 45 CFR 303.105, Procedures for making information available to consumer reporting agencies, to read: ``Procedures for periodic reporting of information to consumer reporting agencies.''
Under Sec. 303.105(a), the definition of ``consumer reporting agency'' remains the same. The definition, which mirrors the language in the Fair Credit Reporting Act (15 U.S.C. 1681a[f]), has not been changed.
We propose to revise paragraph (b), to specify that States must use this procedure when a non-custodial absent parent owes overdue support exceeding $1,000 and is at least two months in arrears. The provision of information by

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IV-D agencies is no longer triggered by the request of a CRA, but is now required to be reported under the above criteria. The use of such procedures is optional to the State in cases where the absent parent owes less than $1,000 in arrears. Allowing for optional reporting in cases of less than $1,000 in arrears is in keeping with the Federal/ State partnership in administering child support enforcement and allowing for maximum State flexibility.
States may wish to take advantage of reporting when a non-custodial parent owes overdue support less than $1,000 because many child support orders have low monthly payment amounts. Otherwise, several months arrearage could result before triggering reporting at the $1,000 threshold. Some States, including California, have found it beneficial to report all child support accounts to CRAs for such reasons as ease of administration and conformance to the credit reporting industry standard of reporting all debt and payment information. In order to give States maximum flexibility, there are no further requirements regarding the frequency or manner in which delinquent support information is shared with CRAs. This flexibility is also intended to allow for uninterrupted reporting in States where current procedures may already meet the new requirement.
The cases in which information is sent to the CRA may be further limited by the State through the use of State guidelines (45 CFR 303.105(b)). Criteria may be developed to determine which cases are inappropriate for reporting to CRAs. For example, State developed guidelines might exclude the reporting of cases where abuse or violence has been threatened or has occurred.
In addition, we propose to revise paragraph (b) by removing the second sentence specifying that State guidelines should be made generally available to the public as to when use or application of reporting child support arrearages to credit reporting agencies would not carry out the purposes of the program or would be otherwise inappropriate in the circumstances. We are proposing this revision since the statute mandates reporting of all cases which qualify based on arrearages and expressly specifies the bases for exceptions. Guidelines for not submitting cases are no longer appropriate.
We invite State comments on any existing reporting criteria they may use. Comments received on this subject will be widely disseminated because examples may be helpful to other States in formulating their own guidelines.
In accordance with section 466(a)(7)(C) of the Act, under proposed paragraph (c) of section 303.105, States are required to withhold information from a CRA which does not have sufficient capability to make accurate use of the information in a systematic and timely manner. In order to maximize flexibility, States will be free to use their own criteria in determining what constitutes a ``systematic and timely'' use of the reported information under amended section 466(a)(7)(C) of the Act. States are also required to withhold information from an entity which has not furnished satisfactory evidence to the State that it is a CRA.
Under amended section 466(a)(7) of the Act, the provision which allowed for a fee for furnishing such information to be imposed on the requesting CRA by the State has been deleted. Therefore, we propose that the corresponding text involving the optional fee under the existing Sec. 303.105(c) be removed.
In accordance with section 466(a)(7)(b) of the Act, paragraph (d) requires the State to provide the noncustodial parent an advance notice and an opportunity to contest the accuracy of this information. Paragraph (e) requires the State to comply with all applicable procedural due process requirements of the State before releasing the information. The requirements imposed in paragraphs (d) and (e) have been required by the statute since it was enacted in 1984 and were not amended. Therefore, paragraph (d) and (e) remain unchanged by this proposed rule.
To ensure that this proposed rule maximizes State flexibility, we generally have not proposed to add regulatory requirements that go beyond statutory requirements. However, there is one area where we believe additional Federal regulatory guidance is needed--credit reporting in interstate cases. Because interstate cases involve interaction between one or more States, there is a need for national standards to ensure uniformity and clarity.
The statute does not address which State (initiating or responding) should report to credit bureaus in interstate cases. Based on input that we have received from several States, Federal guidance is needed in this area to avoid duplication, confusion, and double-reporting. For example, if both the initiating and responding States report arrears owed under a child support order in a case, both reports may appear on the obligor's credit record. As a result, the credit record would indicate that the obligor owes two separate debts to two different child support agencies, when in fact the two reports are for the same arrearage. Such misleading double-reporting creates unnecessary duplication of effort for child support agencies, generates time- consuming inquiries and complaints, and is unfair to obligors.
To address these problems, we are proposing new paragraph (f) in Sec. 303.105 which provides: for cases where an initiating State requests, in accordance with Sec. 303.7(b), a responding State to enforce a support order, the responding State will report to consumer reporting agencies. The initiating State will not report.
We are proposing that the responding State be responsible for credit reporting since it is usually the State that implements enforcement remedies (except for Federal income tax refund offset which is implemented by the initiating State). The responding State can coordinate credit reporting with the other enforcement techniques that it is using. In addition, the responding State may have the most up-to- date payment and location information about the obligor. Finally, since the obligor often lives in the responding State, the responding State is more likely to report to credit reporting agencies which focus on the area where the obligor lives. Many credit reporting agencies only maintain records for certain localities and regions, and even a major credit bureau may have more complete information for individuals in a particular region of the country.
Credit reporting in interstate cases where there are multiple support orders governing the same period of time can be particularly complex. Under the Uniform Reciprocal Enforcement of Support Act (URESA), interstate proceedings are considered ``new'' proceedings, even if a valid, enforceable support order already exists. As a result, multiple, yet valid, orders in varying amounts in different States have been entered for the same children. If arrearages owed for the same period of time under more than one order are reported to credit agencies, the obligor will appear to owe multiple debts even though, under State law, an obligor receives credit under all orders for any payment made. Therefore, the reporting of arrears under multiple orders exaggerates the amount that the obligor actually owes.
The Uniform Interstate Family Support Act (UIFSA) and the Full Faith and Credit for Child Support Orders Act (Pub. L. 103-383) will eventually alleviate the multiple order problem. These laws, which together limit the ability of a State to enter or modify an order if a valid order already exists, will replace multiple orders with a system
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under which only one support order is effective at any one time. However, this transition will take a matter of years--until all of the children with multiple orders emancipate. We welcome comments concerning possible ways to address this multiple order problem.
In addition, we welcome comments regarding the general issue of credit reporting in interstate cases, particularly whether there is a need for Federal regulation in this area and whether you agree with our proposal.
Finally, in addition to reporting information to CRAs, States routinely obtain valuable location information from CRAs. The requirements of this section do not preclude a State from obtaining information from CRAs. Many States already reap the benefits of using CRAs as a source of valuable information. States may make requests of consumer reporting agencies for such purposes as location of non-custodial parents, location of assets, and determination of ability to pay support.

Section 304.10 General Administrative Requirements
We propose to replace the parenthetical phrase, ``(with the exception of Subpart G, Matching and Cost Sharing and Subpart I, Financial Reporting Requirements)'' with ``(with the exception of 45 CFR 74.23, Cost Sharing or Matching and 45 CFR 74.52, Financial Reporting).'' We are proposing this revision to coincide with substantial revisions of 45 CFR Part 74 by DHHS August 25, 1994 (59 FR 43760).

Section 304.20 Availability and Rate of Federal Financial Participation
We propose to make several technical revisions to update and correct this section. In paragraph (b)(1)(iii), we propose to replace the phrase ``Subpart P'' with ``* * * in accordance with the Procurement Standards found in 45 CFR 74.40 et. seq..'' We are proposing this revision to coincide with substantial revisions of 45 CFR Part 74 by DHHS August 25, 1994 (59 FR 43760) because the regulation is applicable to both agencies. In paragraph (b)(1)(vi), we propose to change the reference from ``Sec. 302.16'' to ``Sec. 304.15.'' We propose this technical revision because Sec. 304.15 is a cross-reference to the DHHS regulations on cost allocation at 45 CFR Part 95, Subpart E which replaced 45 CFR 302.16. In paragraph (b)(3)(iv), we propose to replace ``attachment'' with ``withholding'', in order to make the terminology consistent with the enactment of the Child Support Enforcement Amendments of 1984 (Pub. L. 98-378) which created a new section 466 of the Act including paragraph (a)(1) and (b) for ``wage withholding'' and implementing regulations at 45 CFR 303.100. In paragraph (b)(8), we propose to correct a clerical error by replacing ``Sec. 302.2'' with ``Sec. 303.2.'' Finally, in paragraph (b)(11), we propose to remove ``Part 306, Subpart B, of this chapter'' and replace with ``sections 303.30 and 303.31''. We are proposing this technical fix to update this section to reflect the revision made in 1990 to redesignate Part 306 Subpart B as sections 303.30 and 303.31.

Section 304.95 State Commissions on Child Support
This rule was required by section 15 of Public Law 98-378 to be implemented by December 1, 1984 with a report of findings and recommendations to the Governor by October 1, 1985. We propose to remove this section as the requirement for a State to have a Commission on Child Support as a condition of eligibility for Federal funding expired on October 1, 1985. Although it is no longer mandatory, nothing precludes a State from having such a Commission.

Part 306 Optional Cooperative Agreements for Medical Support Enforcement; Section 306.0 Scope of This Part, Section 306.2 Cooperative Agreement, Section 306.10 Functions To Be Performed under a Cooperative Agreement, Section 306.11 Administrative Requirements of Cooperative Agreements, Section 306.20 Prior Approval of Cooperative Agreements, Section 306.21 Subsidiary Cooperative Agreements With Courts and Law Enforcement Officials, Section 306.22 Purchase of Service Agreements, and Section 306.30 Source of Funds
Cooperative agreements for medical support enforcement was first added to the IV-D regulations (Part 306) in the February 11, 1980 joint final rule by the Health Care Financing Administration (HCFA) and OCSE implementing section 11 of Public Law 95-142 which added a new section 1912 to the Social Security Act. Section 1912 authorized the Third Party Liability (TPL) program in the Medicaid agency and required the State to require Medicaid recipients, as a condition of Medicaid eligibility, to assign their support rights to any medical support and to cooperate with the State in establishing paternity and obtaining third party payments. Section 1912 also required the State plan to provide for the State Medicaid agency to make cooperative agreements with the State IV-D agency, and other appropriate agencies, courts, and law enforcement officials to assist in the TPL program, with an incentive payment to political subdivision, other State, or other entity that makes the TPL collection.
As a result of an increasing degree of responsibility for IV-D agencies to perform medical support functions, very few of the functions listed in Sec. 306.10 continue to be optional. Many of the requirements listed as ``optional'' for IV-D agencies to perform under agreements with State Medicaid agencies have become mandatory under title IV-D (e.g., obtain sufficient health insurance information, Sec. 303.30; secure health insurance coverage, Sec. 303.31). This leaves only two optional procedures in Sec. 306.10 ((f) file insurance claims and (h) take direct action to recover TPL).
We propose that Part 306 be removed and reserved. This will give States flexibility to enter into cooperative agreements with Medicaid agencies to perform activities which are beyond the mandatory medical support activities of the IV-D program. Cooperative agreements for medical support enforcement is a statutory requirement mandated on the Health Care Financing Administration (HCFA) which was placed in regulation at 42 CFR 433.152 but optional for IV-D. This proposed removal will not affect the continuation of existing cooperative agreements or formulation of future agreements between State child support agencies and State Medicaid agencies.

Section 307.5 Mandatory Computerized Support Enforcement Systems
On October 12, 1995, Public Law 104-35 was signed into law, which revises Section 454(24) of the Social Security Act. The revised statute extends the date by which States will have in effect, and approved by the Secretary, an operational automated data processing and information retrieval system meeting all requirements of Federal law from October 1, 1995 to October 1, 1997. Because the deadline by which States must have operational automated systems has been changed, we propose to remove the date in paragraph (a) ``October 1, 1995'' and replace it with ``October 1, 1997.''

Section 307.15 Approval of Advance Planning Documents for Computerized Support Enforcement Systems
On October 12, 1995, Public Law 104-35 was signed into law, which revises Section 454(24) of the Social Security Act. The revised statute extends the date by which States will have in effect, and approved by the Secretary, an operational automated data processing

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and information retrieval system meeting all requirements of Federal law from October 1, 1995 to October 1, 1997. Because the deadline by which States must have operational automated systems has been changed, we propose to remove the date in paragraph (b)(2) ``October 1, 1995'' and replace it with ``October 1, 1997.''

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 proposed regulation will not result in a significant impact on a substantial number of small entities. The primary impact is on State governments and individuals and results from restating the provisions of the statute. State governments are not considered small entities under the Act.

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
45 CFR Part 301
Child support, Grant programs/social programs.
45 CFR Part 302
Child support, Grant programs/social programs, Reporting and
recordkeeping requirements.
45 CFR Parts 303 and 304
Child support, Grant programs/social programs, Reporting and
recordkeeping requirements.
45 CFR Part 306
Child support, Grant programs/social programs, Medicaid.
45 CFR Part 307
Child support, Grant programs/social programs, Computerized support
enforcement systems.
(Catalog of Federal Domestic Assistance Programs No. 93.563, Child
Support Enforcement Program)

Dated: December 1, 1995.
Mary Jo Bane,
Assistant Secretary for Children and Families.

For the reasons discussed above, we propose to amend title 45 chapter III of the Code of Federal Regulations 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 revising the definition for ``Applicable matching rate'' to read as follows:
Sec. 301.1 General definitions.
* * * * *
Applicable matching rate means the rate of Federal funding of State IV-D programs' administrative costs for the appropriate fiscal year. The applicable matching rate for FY 1990 and thereafter is 66 percent.
* * * * *
Sec. 301.15 [Amended]
3. In 301.15, paragraph (a)(1) is amended by revising ``Social and Rehabilitation Service, Attention: Finance Division, Washington, DC 20201'' to read ``Administration for Children and Families, Office of Program Support, Division of Formula, Entitlement and Block Grants, 370 L'Enfant Promenade, S.W., Washington, D.C. 20447'' and paragraph (e) is amended by revising, ``Subpart G Matching and Cost Sharing'' to read ``45 CFR 74.23 Cost Sharing or Matching'' and revising ``Subpart I Financial Reporting Requirements'' to read ``45 CFR 74.52 Financial Reporting.''

PART 302--STATE PLAN REQUIREMENTS
4. The authority citation for Part 302 continues to read as follows:
Authority: 42 U.S.C. 651 through 658, 664, 666, 667, 1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), 1396(k).
Sec. 302.15 [Amended]
5. In section 302.15, paragraph (b) is removed and paragraphs (a) introductory text, (a)(1) introductory text, (a)(1)(i) through (vii) and (2) are redesignated as Sec. 302.15 introductory text, (a) introductory text, (a)(1) through (7) and (b) respectively.
Sec. 302.33 [Amended]
6. In section 302.33, paragraph (c)(1) is removed, paragraphs (c)(2) and (c)(3) are redesignated as (c)(1) and (c)(2), and paragraph (e) is removed.
Sec. 302.34 [Amended]
7. In section 302.34, paragraph (b) is removed, paragraph (a) is amended by removing the paragraph designation and by adding ``under Sec. 303.107'' after ``cooperative arrangements'' in the first sentence.
Sec. 302.36 [Amended]
8. In section 302.36, paragraph (a) introductory text is amended by removing ``for:'' and inserting a period in its place at the end of the paragraph and removing paragraphs (a)(1) through (a)(5).
Sec. 302.37 [Removed]
9. Section 302.37 is removed.
10. In section 302.54, paragraph (a) is removed, paragraphs (b) and (c) are redesignated (a) and (b), respectively, the reference to ``Until September 30, 1995'' in new designated paragraph (b)(1)(i) is revised to read ``Until September 30, 1997'', and newly designated paragraph (a)(2) is revised to read as follows: Sec. 302.54 Notice of collection of assigned support.
* * * * *
(a) * * *
(2) The monthly notice must list separately payments collected from each absent parent when more than one absent parent owes support to the family and must indicate the amount of current support collected, the amount of arrearages collected and the amount of support collected which was paid to the family.
* * * * *
11. Section 302.70(a)(7) is revised to read as follows:
Sec. 302.70 Required State laws.
(a) * * *
(7) Procedures which require the State to periodically report information regarding the amount of overdue support owed by an absent parent to consumer reporting agencies in accordance with Sec. 303.105 of this chapter;
* * * * *
Sec. 302.85 [Amended]
12. In Section 302.85, reference to ``October 1, 1995'' in paragraph (a)(2) is revised to read ``October 1, 1997.''
PART 303--STANDARDS FOR PROGRAM OPERATIONS
13. 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).
Sec. 303.10 [Removed]
14. Section 303.10 is removed.
Sec. 303.31 [Amended]
15. In 303.31, reference to ``Sec. 306.50(a)'' is revised to read Sec. 303.30 in paragraphs (b)(6) and (b)(7).
16. Section 303.73 is revised to read as follows:

[[Page 2781]]
Sec. 303.73 Applications to use the courts of the United States to enforce court orders.
The IV-D agency may apply to the Secretary for permission to use a United States district court to enforce a support order of a court of competent jurisdiction against an absent parent who is present in another State if the IV-D agency can furnish evidence in accordance with instructions issued by the office.
Sec. 303.100 [Amended]
17. In section 303.100, reference to ``October 1, 1995'' in paragraph (g)(3) is revised to read ``October 1, 1997.''
18-19. Section 303.105 is amended by revising the section heading and paragraphs (b) and (c) and adding new paragraph (f) to read as follows:
Sec. 303.105 Procedures for periodic reporting of information to consumer reporting agencies.
* * * * *
(b) For cases in which the amount of overdue support exceeds $1,000 and is at least two months in arrears, the IV-D agency must have in effect procedures to periodically report the name of the absent parent and the amount of arrears to consumer reporting agencies.
(c) The information shall not be made available to a consumer reporting agency which:
(1) the State determines does not have sufficient capability to make use of the information in a systematic and timely manner; or
(2) has not furnished satisfactory evidence to the State that it is a consumer reporting agency.
* * * * *
(f) Interstate. For cases where an initiating State requests, in accordance with Sec. 303.7(b), a responding State to enforce a support order, the responding State will report to consumer reporting agencies in accordance with this section. The initiating State will not report.

PART 304--FEDERAL FINANCIAL PARTICIPATION
20. 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), 1396(p), and 1396(k).
Sec. 304.10 [Amended]
21. In section 304.10, the parenthetical phrase ``(with the exception of Subpart G, Matching and Cost Sharing and Subpart I, Financial Reporting Requirements)'' is revised to read ``(with the exception of 45 CFR 74.23, Cost Sharing or Matching and 45 CFR 74.52, Financial Reporting).''
Sec. 304.20 [Amended]
22. In section 304.20, paragraph (b)(1)(iii) introductory text is amended by replacing ``Subpart P'' with ``in accordance with the Procurement Standards found in 45 CFR 74.40 et seq.'', paragraph (b)(1)(vi) is amended by revising the reference to ``Sec. 302.16'' to read ``Sec. 304.15'', paragraph (b)(3)(iv) is amended by revising the term ``attachment'' to read ``withholding;'', paragraph (b)(8) is amended by revising the reference ``Sec. 302.2'' to read ``Sec. 303.2'' and, paragraph (b)(11) is amended by revising ``Part 306, Subpart B, of this chapter'' to read ``sections 303.30 and 303.31''.
Sec. 304.95 [Removed]
23. Section 304.95 is removed.

PART 306--OPTIONAL COOPERATIVE AGREEMENTS FOR MEDICAL SUPPORT ENFORCEMENT--[REMOVED AND RESERVED]
24. Part 306 is removed and reserved.

PART 307--COMPUTERIZED SUPPORT ENFORCEMENT SYSTEMS
25. The authority citation for part 307 continues to read as follows:
Authority: 42 U.S.C. 652 through 658, 664, 666, 667, and 1302. Sec. 307.5 [Amended]
26. In section 307.5, reference to ``October 1, 1995'' in paragraph (a) is revised to read ``October 1, 1997.''
Sec. 307.15 [Amended]
27. In section 307.15, reference to ``October 1, 1995'' in paragraph (b)(2) is revised to read ``October 1, 1997.''
[FR Doc. 96-1254 Filed 1-26-96; 8:45 am]
BILLING CODE 4150-04-P