To amend the Social Security Act to require that anticipated child support be held in trust on the sale or refinancing of certain real property of an obligated parent.

April 21, 2005

Mr. ANDREWS introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Social Security Act to require that anticipated child support be held in trust on the sale or refinancing of certain real property of an obligated parent.

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 Reserve Trust Act'.

SEC. 2. STATE OBLIGATION TO PROVIDE CHILD SUPPORT RESERVE TRUST SYSTEM.

Section 454 of the Social Security Act (42 U.S.C. 654) is amended--

(1) in paragraph (32) by striking `and' at the end;

(2) in paragraph (33) by striking the period at the end and inserting `; and'; and

(3) by inserting after paragraph (33) the following new paragraph:

`(34) provide that, on and after January 1, 2006, the State agency will have in effect a State reserve trust system that meets the requirements of section 454C.'.

SEC. 3. REQUIREMENTS OF CHILD SUPPORT RESERVE TRUST SYSTEM.

The Social Security Act is amended by inserting after section 454B (42 U.S.C. 654b) the following new section:

`SEC. 454C. RESERVE TRUST SYSTEM.

`(a) In General- In order for a State to meet the requirements of this section, the State must--

`(1) have in effect laws requiring the use of the procedures described in subsection (b); and

`(2) establish and operate a unit (which shall be known as the State reserve trust unit) that has authority to carry out, and shall carry out, such laws and procedures.

`(b) Required Procedures- The procedures described in this subsection are procedures to carry out the following:

`(1) WITHHOLDING OF ANTICIPATED FUTURE CHILD SUPPORT- On any sale or refinancing by a person of any real property in the State against which a lien for amounts of overdue support owed by the person has ever arisen, without regard to whether such lien has ever been extinguished, the State reserve trust unit shall--

`(A) withhold the net proceeds of the person from the sale or refinancing;

`(B) apply the net proceeds withheld under subparagraph (A) to any overdue support owed by the person;

`(C) determine the anticipated future child support of the person;

`(D) hold in trust, for the benefit of the child or children for whom the person has a support obligation, an amount equal to the lesser of--

`(i) the anticipated future child support determined under subparagraph (C); and

`(ii) the net proceeds withheld under subparagraph (A), as reduced by any application of such proceeds under subparagraph (B); and

`(E) distribute to the person any amounts not held in trust under subparagraph (D).

`(2) APPLICATION OF AMOUNTS WITHHELD TO OVERDUE CHILD SUPPORT- If a person owes overdue child support with respect to a child, and the State reserve trust unit holds in trust amounts withheld from the person for the benefit of the child, the State reserve trust unit shall promptly apply such amounts to satisfy such overdue child support, if the State reserve trust unit determines that all other remedies available under the laws of the State are insufficient to satisfy the overdue child support.

`(3) ADJUSTMENT OF AMOUNTS WITHHELD- If the State reserve trust unit holds in trust amounts withheld from a person for the benefit of a child, and the support obligation of the person with respect to the child is adjusted under otherwise available State procedures, the State reserve trust unit shall promptly--

`(A) redetermine the anticipated future child support of the person with respect to the child; and

`(B) if the amounts held in trust are less than the anticipated future child support as redetermined under subparagraph (A), distribute the difference to the person.

`(4) TERMINATION OF TRUST- If the State reserve trust unit holds in trust amounts withheld from a person for the benefit of a child, the State reserve trust unit shall distribute the amounts to the person if--

`(A) the person does not owe overdue child support with respect to the child; and

`(B) the support obligation of the person with respect to the child has finally ceased.

`(c) Definitions- For purposes of this section, the following definitions shall apply:

`(1) ANTICIPATED FUTURE CHILD SUPPORT- The term `anticipated future child support' means the present value of each child support payment that will come due under the support obligation of the person, assuming that the support obligation will finally cease solely because the child has attained an age requiring the termination of the support obligation.

`(2) FINALLY CEASE- The term `finally cease' means to cease--

`(A) because the person or the child has died;

`(B) because the child has attained an age requiring the termination of the support obligation;

`(C) because the relationship of parent and child has been terminated by a final judicial act, such as an order establishing nonpaternity or an order emancipating the child; or

`(D) because of any other circumstance that results in cessation under State law that is permanent, substantial, and not solely a change in custody.'.

END