To amend part D of title IV of the Social Security Act to improve the collection of child support, and for other purposes.

July 19, 2004

Mr. KENNEDY of Minnesota (for himself, Mr. DAVIS of Alabama, Mr. BEAUPREZ, Mr. SESSIONS, and Mr. CARDOZA) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To amend part D of title IV of the Social Security Act to improve the collection of child support, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Child Support Improvement Act of 2004'.

SEC. 2. TABLE OF CONTENTS.

The table of contents of this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I--DISTRIBUTION OF CHILD SUPPORT

Sec. 101. Distribution of child support collected by States on behalf of children receiving certain welfare benefits.

TITLE II--EXPANDED ENFORCEMENT

Sec. 201. Decrease in amount of child support arrearage triggering passport denial.

Sec. 202. Use of tax refund intercept program to collect past-due child support on behalf of children who are not minors.

Sec. 203. Garnishment of compensation paid to veterans for service-connected disabilities in order to enforce child support obligations.

Sec. 204. Improved interstate enforcement.

TITLE III--MISCELLANEOUS

Sec. 301. Report on undistributed child support payments.

Sec. 302. Use of new hire information to assist in administration of unemployment compensation programs.

Sec. 303. Improving Federal debt collection practices.

Sec. 304. Maintenance of technical assistance funding.

Sec. 305. Maintenance of Federal parent locator service funding.

Sec. 306. Electronic disbursement of child support payments to families.

Sec. 307. Optional expansion of State disbursement unit to create a centralized payment location for all child support wage withholding.

Sec. 308. Implemention of medical support performance measure.

Sec. 309. Authority to continue State program for monitoring and enforcement of child support orders.

TITLE IV--EFFECTIVE DATE

Sec. 401. Effective date.

TITLE I--DISTRIBUTION OF CHILD SUPPORT

SEC. 101. DISTRIBUTION OF CHILD SUPPORT COLLECTED BY STATES ON BEHALF OF CHILDREN RECEIVING CERTAIN WELFARE BENEFITS.

(a) MODIFICATION OF RULE REQUIRING ASSIGNMENT OF SUPPORT RIGHTS AS A CONDITION OF RECEIVING TANF- Section 408(a)(3) of the Social Security Act (42 U.S.C. 608(a)(3)) is amended to read as follows:

`(3) NO ASSISTANCE FOR FAMILIES NOT ASSIGNING CERTAIN SUPPORT RIGHTS TO THE STATE- A State to which a grant is made under section 403 shall require, as a condition of paying assistance to a family under the State program funded under this part, that a member of the family assign to the State any right the family member may have (on behalf of the family member or of any other person for whom the family member has applied for or is receiving such assistance) to support from any other person, not exceeding the total amount of assistance so paid to the family, which accrues during the period that the family receives assistance under the program.'.

(b) Increasing Child Support Payments to Families and Simplifying Child Support Distribution Rules-

(1) Distribution rules-

(A) IN GENERAL- Section 457(a) of the Social Security Act (42 U.S.C. 657(a)) is amended to read as follows:

`(a) IN GENERAL- Subject to subsections (e) and (f), the amounts collected on behalf of a family as support by a State pursuant to a plan approved under this part shall be distributed as follows:

`(1) FAMILIES RECEIVING ASSISTANCE- In the case of a family receiving assistance from the State, the State shall--

`(A) pay to the Federal Government the Federal share of the amount collected, subject to paragraph (3)(A);

`(B) retain, or pay to the family, the State share of the amount collected, subject to paragraph (3)(B); and

`(C) pay to the family any remaining amount.

`(2) FAMILIES THAT FORMERLY RECEIVED ASSISTANCE- In the case of a family that formerly received assistance from the State:

`(A) CURRENT SUPPORT- To the extent that the amount collected does not exceed the current support amount, the State shall pay the amount to the family.

`(B) ARREARAGES- Except as otherwise provided in an election made under 454(34), to the extent that the amount collected exceeds the current support amount, the State--

`(i) shall first pay to the family the excess amount, to the extent necessary to satisfy support arrearages not assigned pursuant to section 408(a)(3);

`(ii) if the amount collected exceeds the amount required to be paid to the family under clause (i), shall--

`(I) pay to the Federal Government, the Federal share of the excess amount described in this clause, subject to paragraph (3)(A); and

`(II) retain, or pay to the family, the State share of the excess amount described in this clause, subject to paragraph (3)(B); and

`(iii) shall pay to the family any remaining amount.

`(3) Limitations-

`(A) FEDERAL REIMBURSEMENTS- The total of the amounts paid by the State to the Federal Government under paragraphs (1) and (2) of this subsection with respect to a family shall not exceed the Federal share of the amount assigned with respect to the family pursuant to section 408(a)(3).

`(B) STATE REIMBURSEMENTS- The total of the amounts retained by the State under paragraphs (1) and (2) of this subsection with respect to a family shall not exceed the State share of the amount assigned with respect to the family pursuant to section 408(a)(3).

`(4) FAMILIES THAT NEVER RECEIVED ASSISTANCE- In the case of any other family, the State shall pay the amount collected to the family.

`(5) FAMILIES UNDER CERTAIN AGREEMENTS- Notwithstanding paragraphs (1) through (3), in the case of an amount collected for a family in accordance with a cooperative agreement under section 454(33), the State shall distribute the amount collected pursuant to the terms of the agreement.

`(6) State financing options- To the extent that the State's share of the amount payable to a family pursuant to paragraph (2)(B) of this subsection exceeds the amount that the State estimates (under procedures approved by the Secretary) would have been payable to the family pursuant to former section 457(a)(2)(B) (as in effect for the State immediately before the date this subsection first applies to the State) if such former section had remained in effect, the State may elect to have the payment considered a qualified State expenditure for purposes of section 409(a)(7).

`(7) State option to pass through additional support with federal financial participation-

`(A) FAMILIES THAT FORMERLY RECEIVED ASSISTANCE- Notwithstanding paragraph (2), a State shall not be required to pay to the Federal Government the Federal share of an amount collected on behalf of a family that formerly received assistance from the State to the extent that the State pays the amount to the family.

`(B) Families that currently receive assistance-

`(i) IN GENERAL- Notwithstanding paragraph (1), in the case of a family that receives assistance from the State, a State shall not be required to pay to the Federal Government the Federal share of the excepted portion (as defined in clause (ii)) of any amount collected on behalf of such family during a month to the extent that--

`(I) the State pays the excepted portion to the family; and

`(II) the excepted portion is disregarded in determining the amount and type of assistance provided to the family under such program.

`(ii) EXCEPTED PORTION DEFINED- For purposes of this subparagraph, the term `excepted portion' means that portion of the amount collected on behalf of a family during a month that does not exceed $400 per month, or in the case of a family that includes 2 or more children, that does not exceed an amount established by the State that is not more than $600 per month.

`(8) STATES WITH DEMONSTRATION WAIVERS- Notwithstanding the preceding paragraphs, in the case of a State that, on the date of enactment of this paragraph, has had in effect since October 1, 1997, a waiver under section 1115 permitting pass through payments of child support collections--

`(A) the State may continue to distribute such payments to families without regard to the expiration date of such waiver; and

`(B) the requirement under paragraph (1) to pay to the Federal Government the Federal share of the amount collected on behalf of a family shall not apply to the extent that--

`(i) the State distributes such amount to the family; and

`(ii) such amount is disregarded in determining the amount and type of assistance paid to the family.'.

(B) STATE PLAN TO INCLUDE ELECTION AS TO WHICH RULES TO APPLY IN DISTRIBUTING CHILD SUPPORT ARREARAGES COLLECTED ON BEHALF OF FAMILIES FORMERLY RECEIVING ASSISTANCE- Section 454 of the Social Security Act (42 U.S.C. 654) is amended--

(i) by striking `and' at the end of paragraph (32);

(ii) by striking the period at the end of paragraph (33) and inserting `; and'; and

(iii) by inserting after paragraph (33) the following:

`(34) include an election by the State to apply section 457(a)(2)(B) of this Act or former section 457(a)(2)(B) of this Act (as in effect for the State immediately before the date this paragraph first applies to the State) to the distribution of the amounts which are the subject of such sections, and for so long as the State elects to so apply such former section, the amendments made by subsection (e) of section 101 of the Child Support Improvement Act of 2004 shall not apply with respect to the State, notwithstanding subsection (f)(1) of such section 101.'.

(C) APPROVAL OF ESTIMATION PROCEDURES- Not later than the date that is 6 months after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with the States (as defined for purposes of part D of title IV of the Social Security Act), shall establish the procedures to be used to make the estimate described in section 457(a)(6) of such Act.

(2) CURRENT SUPPORT AMOUNT DEFINED- Section 457(c) of the Social Security Act (42 U.S.C. 657(c)) is amended by adding at the end the following:

`(5) CURRENT SUPPORT AMOUNT- The term `current support amount' means, with respect to amounts collected as support on behalf of a family, the amount designated as the monthly support obligation of the noncustodial parent in the order requiring the support.'.

(c) BAN ON RECOVERY OF MEDICAID COSTS FOR CERTAIN BIRTHS- Section 454 of the Social Security Act (42 U.S.C. 654), as amended by subsection (b)(1)(B), is amended--

(1) by striking `and' at the end of paragraph (33);

(2) by striking the period at the end of paragraph (34) and inserting `; and'; and

(3) by inserting after paragraph (34) the following:

`(35) provide that the State shall not use the State program operated under this part to collect any amount owed to the State by reason of costs incurred under the State plan approved under title XIX for the birth of a child for whom support rights have been assigned pursuant to section 408(a)(3), 471(a)(17), or 1912.'.

(d) STATE OPTION TO DISCONTINUE OLDER SUPPORT ASSIGNMENTS- Section 457(b) of the Social Security Act (42 U.S.C. 657(b)) is amended to read as follows:

`(b) CONTINUATION OF ASSIGNMENTS-

`(1) STATE OPTION TO DISCONTINUE PRE-1997 SUPPORT ASSIGNMENTS-

`(A) IN GENERAL- Any rights to support obligations assigned to a State as a condition of receiving assistance from the State under part A and in effect on September 30, 1997 (or such earlier date on or after August 22, 1996, as the State may choose), may remain assigned after such date.

`(B) DISTRIBUTION OF AMOUNTS AFTER ASSIGNMENT DISCONTINUATION- If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected pursuant to such assignment as if such amounts had never been assigned and may distribute such amounts to the family in accordance with subsection (a)(4).

`(2) State option to discontinue post-1997 support assignments-

`(A) IN GENERAL- Any rights to support obligations accruing before the date on which a family first receives assistance under part A that are assigned to a State under that part and in effect before the implementation date of this section may remain assigned after such date.

`(B) DISTRIBUTION OF AMOUNTS AFTER ASSIGNMENT DISCONTINUATION- If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected pursuant to such assignment as if such amounts had never been assigned and may distribute such amounts to the family in accordance with subsection (a)(4).'.

(e) Conforming Amendments-

(1) Section 404(a) of the Social Security Act (42 U.S.C. 604(a)) is amended--

(A) by striking `or' at the end of paragraph (1);

(B) by striking the period at the end of paragraph (2) and inserting `; or'; and

(C) by adding at the end the following:

`(3) to fund payment of an amount pursuant to clause (i) or (ii) of section 457(a)(2)(B), but only to the extent that the State properly elects under section 457(a)(6) to use the grant to fund the payment.'.

(2) Section 409(a)(7)(B)(i) of such Act (42 U.S.C. 609(a)(7)(B)(i)) is amended--

(A) in subclause (I)(aa), by striking `457(a)(1)(B)' and inserting `457(a)(1)'; and

(B) by adding at the end the following:

`(V) PORTIONS OF CERTAIN CHILD SUPPORT PAYMENTS COLLECTED ON BEHALF OF AND DISTRIBUTED TO FAMILIES NO LONGER RECEIVING ASSISTANCE- Any amount paid by a State pursuant to clause (i) or (ii) of section 457(a)(2)(B), but only to the extent that the State properly elects under section 457(a)(6) to have the payment considered a qualified State expenditure.'.

(3) Section 6402(c) of the Internal Revenue Code of 1986 (relating to offset of past-due support against overpayments) is amended--

(A) in the first sentence, by striking `the Social Security Act.' and inserting `of such Act.'; and

(B) by striking the third sentence and inserting the following: `The Secretary shall apply a reduction under this subsection first to an amount certified by the State as past due support under section 464 of the Social Security Act before any other reductions allowed by law.'.

(f) EFFECTIVE DATE-

(1) IN GENERAL- The amendments made by this section shall take effect on October 1, 2007, and shall apply to payments under parts A and D of title IV of the Social Security Act for calendar quarters beginning on or after such date, and without regard to whether regulations to implement such amendments (in the case of State programs operated under such part D) are promulgated by such date.

(2) STATE OPTION TO ACCELERATE EFFECTIVE DATE- A State may elect to have the amendments made by this section apply to the State and to amounts collected by the State and to payments under parts A and D of title IV of the Social Security Act, on and after such date as the State may select that is after the date of enactment of this Act and before October 1, 2007.

TITLE II--EXPANDED ENFORCEMENT

SEC. 201. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE TRIGGERING PASSPORT DENIAL.

(a) IN GENERAL- Section 452(k)(1) of the Social Security Act (42 U.S.C. 652(k)(1)) is amended by striking `$5,000' and inserting `$2,500'.

(b) CONFORMING AMENDMENT- Section 454(31) of the Social Security Act (42 U.S.C. 654(31)) is amended by striking `$5,000' and inserting `$2,500'.

SEC. 202. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT PAST-DUE CHILD SUPPORT ON BEHALF OF CHILDREN WHO ARE NOT MINORS.

Section 464 of the Social Security Act (42 U.S.C. 664) is amended--

(1) in subsection (a)(2)(A), by striking `(as that term is defined for purposes of this paragraph under subsection (c))'; and

(2) in subsection (c)--

(A) in paragraph (1)--

(i) by striking `(1) Except as provided in paragraph (2), as used in'; and inserting `In'; and

(ii) by inserting `(whether or not a minor)' after `a child' each place it appears; and

(B) by striking paragraphs (2) and (3).

SEC. 203. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR SERVICE-CONNECTED DISABILITIES IN ORDER TO ENFORCE CHILD SUPPORT OBLIGATIONS.

Section 459(h) of the Social Security Act (42 U.S.C. 659(h)) is amended--

(1) in paragraph (1)(A)(ii)--

(A) in subclause (IV), by striking `or' after the semicolon;

(B) in subclause (V), by inserting `or' after the semicolon; and

(C) by adding at the end the following:

`(VI) subject to paragraph (3), other than periodic benefits or payments described in subclause (V), by the Secretary of Veterans Affairs as compensation for a service-connected disability paid by the Secretary to a former member of the Armed Forces;'; and

(2) by adding at the end the following:

`(3) LIMITATIONS WITH RESPECT TO COMPENSATION PAID TO VETERANS FOR SERVICE-CONNECTED DISABILITIES-

`(A) ALIMONY AND CHILD SUPPORT- Subject to subparagraph (B), compensation described in paragraph (1)(A)(ii)(VI) shall not be subject to withholding pursuant to this section--

`(i) for payment of alimony; or

`(ii) for payment of child support if the individual is fewer than 60 days in arrears in payment of the support.

`(B) LIMITATION- Not more than 50 percent of any payment of compensation described in subparagraph (A) may be withheld pursuant to this section.'.

SEC. 204. IMPROVED INTERSTATE ENFORCEMENT.

(a) IN GENERAL- Section 466(f) (42 U.S.C. 666(f)) is amended--

(1) by striking `January 1, 1998' and inserting `January 1, 2005';

(2) by striking `and as in effect on August 22, 1996,'; and

(3) by striking `adopted as of such date' and inserting `adopted as of August, 2001'.

(b) FULL FAITH AND CREDIT FOR CHILD SUPPORT ORDERS- Section 1738B of title 28, United States Code, is amended--

(1) by striking subsection (d) and inserting the following:

`(d) CONTINUING EXCLUSIVE JURISDICTION-

`(1) IN GENERAL- Subject to paragraph (2), a court of a State that has made a child support order consistent with this section has continuing, exclusive jurisdiction to modify its order if the order is the controlling order and--

`(A) the State is the child's State or the residence of any individual contestant; or

`(B) if the State is not the residence of the child or an individual contestant, the contestants consent in a record or in open court that the court may continue to exercise jurisdiction to modify its order.

`(2) REQUIREMENT- A court may not exercise its continuing, exclusive jurisdiction to modify the order if the court of another State, acting in accordance with subsections (e) and (f), has made a modification of the order.';

(2) in subsection (e)(2)--

(A) in subparagraph (A), by striking `because' and all that follows through the semi-colon and inserting `pursuant to paragraph (1) or (2) of subsection (d);' and

(B) in subparagraph (B), by inserting `with jurisdiction over at least 1 of the individual contestants or that is located in the child's State' after `another State';

(3) in subsection (f)--

(A) in the subsection heading, by striking `RECOGNITION OF CHILD SUPPORT ORDERS' and inserting `DETERMINATION OF CONTROLLING CHILD SUPPORT ORDER';

(B) in the matter preceding paragraph (1), by striking `shall apply' and all that follows through the colon and inserting `having personal jurisdiction over both individual contestants shall apply the following rules and by order shall determine which order controls:';

(C) in paragraph (1), by striking `must be' and inserting `controls and must be so';

(D) in paragraph (2), by striking `must be recognized' and inserting `controls';

(E) in paragraph (3), by striking `must be recognized' each place it appears and inserting `controls';

(F) in paragraph (4)--

(i) by striking `may' and inserting `shall'; and

(ii) by striking `must be recognized' and inserting `controls'; and

(G) by striking paragraph (5);

(4) by striking subsection (g) and inserting the following:

`(g) ENFORCEMENT OF MODIFIED ORDERS- If a child support order issued by a court of a State is modified by a court of another State which properly assumed jurisdiction, the issuing court--

`(1) may enforce its order that was modified only as to arrears and interest accruing before the modification;

`(2) may provide appropriate relief for violations of its order which occurred before the effective date of the modification; and

`(3) shall recognize the modifying order of the other State for the purpose of enforcement.';

(5) in subsection (h)--

(A) in paragraph (1), by striking `and (3)' and inserting `, (3), and (4)';

(B) in paragraph (2), by inserting `the computation and payment of arrearages, and the accrual of interest on the arrearages,' after `obligations of support,'; and

(C) by adding at the end the following:

`(4) PROSPECTIVE APPLICATION- After a court determines which is the controlling order and issues an order consolidating arrears, if any, a court shall prospectively apply the law of the State issuing the controlling order, including that State's law with respect to interest on arrears, current and future support, and consolidated arrears.'; and

(6) in subsection (i), by inserting `and subsection (d)(2) does not apply' after `issuing State'.

TITLE III--MISCELLANEOUS

SEC. 301. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

Not later than 6 months after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report on the procedures that the States use generally to locate custodial parents for whom child support has been collected but not yet distributed. The report shall include--

(1) an estimate of the total amount of undistributed child support;

(2) an estimate of the average length of time it takes undistributed child support to be identified and distributed; and

(3) recommendations--

(A) as to whether additional procedures, including incentives, should be established at the Federal or State level to--

(i) reduce the backlog of undistributed child support;

(ii) close cases in compliance with regulatory standards in which the custodial parent cannot be located;

(iii) expedite the payment of undistributed child support; and

(iv) establish measures to help manage the growth in the level of undistributed child support; and

(B) for measures to evaluate State performance with respect to undistributed child support payments.

SEC. 302. USE OF NEW HIRE INFORMATION TO ASSIST IN ADMINISTRATION OF UNEMPLOYMENT COMPENSATION PROGRAMS.

(a) IN GENERAL- Section 453(j) of the Social Security Act (42 U.S.C. 653(j)) is amended by adding at the end the following:

`(7) Information comparisons and disclosure to assist in administration of unemployment compensation programs-

`(A) IN GENERAL- If a State agency responsible for the administration of an unemployment compensation program under Federal or State law transmits to the Secretary the name and social security account number of an individual, the Secretary shall, if the information in the National Directory of New Hires indicates that the individual may be employed, disclose to the State agency the name, address, and employer identification number of any putative employer of the individual, subject to this paragraph.

`(B) CONDITION ON DISCLOSURE- The Secretary shall make a disclosure under subparagraph (A) only to the extent that the Secretary determines that the disclosure would not interfere with the effective operation of the program under this part.

`(C) USE OF INFORMATION- A State agency may use information provided under this paragraph only for purposes of administering a program referred to in subparagraph (A).'.

(b) EFFECTIVE DATE- The amendment made by this section shall take effect on October 1, 2001.

SEC. 303. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

(a) IN GENERAL- Section 3716(h)(3) of title 31, United States Code, is amended to read as follows:

`(3) In applying this subsection with respect to any debt owed to a State, other than past due support being enforced by the State, subsection (c)(3)(A) shall not apply. Subsection (c)(3)(A) shall apply with respect to past due support being enforced by the State notwithstanding any other provision of law, including sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), section 413(b) of Public Law 91-173 (30 U.S.C. 923(b)), and section 14 of the Act of August 29, 1935 (45 U.S.C. 231m).'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect on October 1, 2004.

SEC. 304. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

Section 452(j) of the Social Security Act (42 U.S.C. 652(j)) is amended by inserting `or the amount appropriated under this paragraph for fiscal year 2002, whichever is greater,' before `which shall be available'.

SEC. 305. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE FUNDING.

Section 453(o) of the Social Security Act (42 U.S.C. 653(o)) is amended--

(1) in the first sentence, by inserting `or the amount appropriated under this paragraph for fiscal year 2002, whichever is greater' before `, which shall be available'; and

(2) in the second sentence, by striking `for each of fiscal years 1997 through 2001'.

SEC. 306. ELECTRONIC DISBURSEMENT OF CHILD SUPPORT PAYMENTS TO FAMILIES.

Section 454A(g) of the Social Security Act (42 U.S.C. 654a(g)) is amended by inserting at the end the following:

`(3) ELECTRONIC DISBURSEMENT REQUIREMENT-

`(A) IN GENERAL- Not later than October 1, 2008, each State disbursement unit operated under section 454B shall implement a system to electronically disburse, through direct deposit or a widely accessible card-based system, all child support collections disbursed to families under that section.

`(B) STATE OPTION TO REQUIRE CARD-BASED PAYMENT- A State may require a payment recipient to accept payment through a card-based system if the recipient has declined to accept payment by direct deposit or does not have an account to which payment may be made by direct deposit.

`(C) OPT-OUT- Notwithstanding subparagraph (A), a State disbursement unit may maintain a nonelectronic system for disbursing child support collections to custodial parents under section 454B after October 1, 2008, if the State notifies the Secretary in writing by October 1, 2008, that the State intends to maintain such a system.'.

SEC. 307. OPTIONAL EXPANSION OF STATE DISBURSEMENT UNIT TO CREATE A CENTRALIZED PAYMENT LOCATION FOR ALL CHILD SUPPORT WAGE WITHHOLDING.

Section 454B(a)(1)(B) of the Social Security Act (42 U.S.C. 654b(a)(1)(B)) is amended by inserting `or, at State option, all support orders, regardless of date issued,' after `in which the support order is initially issued in the State on or after January 1, 1994,'.

SEC. 308. IMPLEMENTATION OF MEDICAL SUPPORT PERFORMANCE MEASURE.

(a) Deadline for Implementation of Performance Measure-

(1) IN GENERAL- Subject to paragraphs (2) and (3), the Secretary of Health and Human Services (in this section referred to as the `Secretary') shall prescribe regulations to implement the performance measure developed under section 201(d)(2)(A) of the Child Support Performance and Incentive Act of 1998 (Public Law 105-200; 112 Stat. 657).

(2) REQUIREMENTS- In prescribing such regulations, the Secretary shall ensure that the performance measure described in paragraph (1) is implemented in such a manner that the measure--

(A) is based on reliable and accurate data;

(B) ensures the discretion of States, in establishing and enforcing medical support obligations, to consider the forms of public and private health care coverage most appropriate to each individual case; and

(C) encourages continual improvement in the effectiveness of States in establishing and enforcing such obligations.

(3) DEADLINES-

(A) REGULATIONS- The regulations required to be prescribed under paragraph (1) shall take effect not later than 3 years after the date of enactment of this Act.

(B) INCORPORATION INTO INCENTIVE PAYMENT SYSTEM- Not later than 2 years after the date that is the earlier of--

(i) the date the regulations required to be prescribed under paragraph (1) take effect; or

(ii) the date that is 3 years after the date of enactment of this Act,

the Secretary shall, in a revenue neutral manner, incorporate the regulations required to be prescribed under paragraph (1) into the incentive payment system established by section 458 of the Social Security Act (42 U.S.C. 658a).

(b) INTERIM FUNDING-

(1) INCREASED FEDERAL SHARE OF EXPENDITURES- During the period described in paragraph (2), the Secretary, notwithstanding section 455(a)(1) of the Social Security Act (42 U.S.C. 655(a)(1)), shall pay to each State for each quarter an amount equal to 90 percent of the total amount expended during the quarter that is attributable to the following:

(A) Expenditures for such modification of the statewide automated system as is necessary to facilitate establishing and enforcement of medical support obligations under part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.).

(B) Expenditures for the issuance of the National Medical Support Notice on behalf of a child described in section 454(4) and the processing of information received as a result of the issuance of such notice.

(C) Expenditures for services to identify potential health care coverage for a child described in section 454(4) and to enroll such a child in health care coverage through the issuance of a National Medical Support Notice.

(2) PERIOD DESCRIBED- For purposes of paragraph (1), the period described in this paragraph is the period that--

(A) begins on the first day of the first quarter that begins at least 1 month after the date of enactment of this Act; and

(B) ends on the last day of the first quarter that begins at least 1 year after the date on which the Secretary certifies through a posting to an Internet website, that the regulations required to be prescribed under subsection (a)(1) are incorporated, in accordance with subsection (a)(3)(B), into the incentive payment system established by section 458 of the Social Security Act (42 U.S.C. 658a).

SEC. 309. AUTHORITY TO CONTINUE STATE PROGRAM FOR MONITORING AND ENFORCEMENT OF CHILD SUPPORT ORDERS.

The Secretary of Health and Human Services shall not require the State of Texas, in operating the program established under part D of title IV of the Social Security Act, to apply for a waiver from the requirements of section 454(4)(A)(ii) of such Act (42 U.S.C. 654(4)(A)(ii)) to continue to operate the State's program for monitoring and enforcement of a court order without the necessity of a written application, as in effect on the date of enactment of this Act. Such State may continue to operate such program and expand it to additional counties, as the State determines necessary, without the necessity of applying for a waiver from the Secretary so long as an individual to whom the support is owed and who would otherwise have to sign a written application for services under such program has an opportunity to decline such services.

TITLE IV--EFFECTIVE DATE

SEC. 401. EFFECTIVE DATE.

(a) IN GENERAL- Except as otherwise provided in this Act, and subject to subsection (b), this Act and the amendments made by this Act shall take effect on October 1, 2004, and shall apply to payments under part D of title IV of the Social Security Act for calendar quarters beginning on or after such date.

(b) DELAY PERMITTED IF STATE LEGISLATION REQUIRED- In the case of a State plan approved under section 454 of the Social Security Act (42 U.S.C. 654) which requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirements imposed by this Act or the amendments made by this Act, the State plan shall not be regarded as failing to comply with the additional requirements solely on the basis of the failure of the plan to meet the additional requirements before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the preceding sentence, in the case of a State that has a 2-year legislative session, each year of the session shall be considered to be a separate regular session of the State legislature.

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