Computerized Support Enforcement Systems

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Parts 302, 304 and 307

RIN 0970-AB70

Computerized Support Enforcement Systems

AGENCY: Office of Child Support Enforcement (OCSE), ACF, HHS.

ACTION: Final rule.

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SUMMARY: This final rule implements provisions of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996

(PRWORA), related to child support enforcement program automation.

Under PRWORA, States must have in effect a statewide automated data

processing and information retrieval system which by October 1, 1997,

meets all the requirements of title IV-D of the Social Security Act

enacted on or before the date of enactment of the Family Support Act of

1988, and by October 1, 2000, meets all the title IV-D requirements

enacted under PRWORA. The law further provides that the October 1,

2000, deadline for systems enhancements will be delayed if HHS does not

issue final regulations by August 22, 1998.

EFFECTIVE DATE: This rule is effective August 21, 1998.

FOR FURTHER INFORMATION CONTACT: Robin Rushton (202) 690-1244.

SUPPLEMENTARY INFORMATION:

Statutory Authority

This regulation is published under the authority of several

provisions of the Social Security Act (the Act), as amended by the

Personal Responsibility and Work Opportunity Reconciliation Act of 1996

(PRWORA). Sections 454(16), 454(24), 454A and 455(a)(3)(A) of the Act

(42 U.S.C. 654(16), (24), 654A, and 655(a)(3)(A)), contain requirements

for automated data processing and information retrieval systems to

carry out the State's IV-D State plan. Other sections, such as section

453 of the Act (42 U.S.C. 653) specify data that the system must

furnish or impose safeguarding and disclosure requirements that the

system must meet.

This regulation is also published under the general authority of

section 1102 (42 U.S.C. 1302) of the Act which requires the Secretary

to publish regulations that may be necessary for the efficient

administration of the provisions for which she is responsible under the

Act.

Background

Full and complete automation is pivotal to improving the

performance of the nation's child support program. With a current

national caseload of 20 million, caseworkers are dependent on enhanced

technology and increased automation to keep up with the massive volume

of information and transactions critical to future success in providing

support to children.

Under PRWORA, States must build on existing automation efforts to

implement the programmatic enhancements the law included for

strengthening child support enforcement, including new enforcement

tools and a shift in child support distribution requirements to a

family-first policy. By October 1, 2000, States must have in place an

automated statewide system that meets all the requirements and performs

all the functions specified in PRWORA.

These requirements include:

Functional requirements specified by the Secretary related

to management of the program (454A(b)).

Calculation of performance indicators (454A(c)).

Information integrity and security requirements (454A(d)).

Development of a State case registry (454A(e)).

Expanded information comparisons and other disclosures of

information (454A(f)), including to the Federal case registry of child

support orders and the Federal Parent Locator Service (FPLS) and with

other agencies in the State, agencies of other States and interstate

information networks, as necessary and appropriate.

Collection and distribution of support payments (454A(g)),

including facilitating the State's centralized collection and

disbursement unit and modifications to meet the revised distribution

requirements.

Expedited Administrative Procedures (454A(h)).

We issued proposed rules in the Federal Register on March 25, 1998,

(63 FR 14402) setting forth the framework for automation that State

systems must have in place by the October 1, 2000, deadline. Thirty

letters from State agencies and other interested parties were received

as a result. While the vast majority of these comments did not

[[Page 44796]]

necessitate changes to the rule, we did make modifications in the

preamble discussion and/or the regulation primarily in the following

areas as a result of the comments received:

Sec. 307.11(f), Federal Case Registry Data Elements.

Sec. 307.15, Independent Verification and Validation.

These changes and several others of a clarifying nature are

explained in detail in the following section, Regulatory Provisions. A

discussion of all the comments received and our responses follows in

the preamble under the Response to Comments section.

Regulatory Provisions

State Plan Requirements (Part 302)

To implement the statutory changes, we revised the regulations at

45 CFR 302.85, ``Mandatory computerized support enforcement systems.''

Current 45 CFR 302.85(a) provides that if the State did not have in

effect by October 13, 1988 a computerized support enforcement system

that meets the requirements of Sec. 307.10, the State must submit an

Advanced Planning Document (APD) for such a system to the Secretary by

October 1, 1991, and have an operational system in effect by October 1,

1995.

Section 454(24) of the Act, as amended by PRWORA, provides that the

State must have in effect a computerized support enforcement system

which by October 1, 1997 meets all IV-D requirements in effect as of

the date of enactment (October 13, 1988) of the Family Support Act of

1988. In addition, the State must have a Computerized Support

Enforcement System (CSES) which by October 1, 2000, meets all IV-D

requirements in effect as of the date of enactment (August 22, 1996) of

PRWORA, including all IV-D requirements in that Act.

Section 302.85(a) of the final regulations reiterates the statutory

requirements for mandatory automated systems for support enforcement.

Section 302.85(a)(1) includes the requirement under existing paragraph

(a) that the system be developed in accordance with Secs. 307.5 and

307.10 of the regulations and the OCSE guidelines entitled ``Automated

Systems for Child Support Enforcement: A Guide for States.'' In

addition, Sec. 302.85(a)(2) requires that, by October 1, 2000, a system

meeting PRWORA requirements be developed in accordance with Secs. 307.5

and 307.11 of the regulations and the OCSE guidelines referenced above.

Change in Federal Financial Participation (Part 304)

To make part 304 regulations consistent with the Act as amended by

PRWORA, Sec. 304.20 is amended at paragraph (c) to provide that FFP at

the 90 percent rate for the planning, design, development, installation

and enhancement of computerized support enforcement systems that meet

the requirement of Sec. 307.30(a) is only available until September 30,

1997.

Computerized Support Enforcement Systems (Part 307)

Computerized support enforcement systems is amended throughout to

conform part 307 to the changes required by sections 454, 454A, and

455(a) of the Act, as amended by PRWORA and the revisions to 45 CFR

302.85, which were discussed earlier.

The title of Sec. 307.10 is revised to read ``Functional

requirements for computerized support enforcement systems in operation

by October 1, 1997'', and to add titles for two new sections, ``Sec.

307.11 Functional requirements for computerized support enforcement

systems in operation by October 1, 2000'' and ``Sec. 307.13 Security

and Confidentiality of computerized support enforcement systems in

operation by October 1, 2000'' to reflect these changes.

Section 307.0, ``Scope of this part,'' is revised to reflect the

new requirements of sections 454, 454A, 455(a) of the Act, as amended,

and section 344(a)(3) of PRWORA regarding statewide automated CSESs.

New statutory language is referenced in the introductory section and a

new paragraph (c) is added to refer to the security and confidentiality

requirements for CSESs. Paragraphs (c) through (h) are redesignated as

paragraphs (d) through (i).

In Sec. 307.1, ``Definitions'', the definition of ``Business day''

has been added as defined in the new section 454A(g)(2) of the Act.

Accordingly, paragraphs (b) through (j) are redesignated as paragraphs

(c) through (k). In addition, in the redesignated paragraphs (d) and

(g), the citation ``Sec. 307.10'' is replaced with the citations

``Secs. 307.10, or 307.11'' to reflect the regulatory changes made

below.

Mandatory Computerized Support Enforcement Systems

Mandatory computerized support enforcement systems at 45 CFR 307.5

is amended as follows:

To reflect the amended section 454(24) of the Act, paragraphs (a)

and (b) are eliminated in their entirety and a new paragraph (a) is

added. Paragraphs (c) through (h) are redesignated as (b) through (g).

Paragraph (a)(1) provides that each State must have in effect by

October 1, 1997, an operational computerized support enforcement system

which meets the requirements in 45 CFR 302.85(a)(1) related to the

Family Support Act of 1988 requirements and that OCSE will review the

systems to certify that these requirements are met. Under paragraph

(a)(2), each State is required to have in effect, by October 1, 2000,

an operational computerized support enforcement system which meets the

requirements in 45 CFR 302.85(a)(2) related to PRWORA requirements.

In addition, under paragraph (d), the reference to ``Section

307.10'' is replaced by ``Sections 307.10 or 307.11.''

Functional Requirements for Computerized Support Enforcement Systems

To reflect the statutory changes, the title of Sec. 307.10

``Functional requirements for computerized support enforcement

systems.'' is revised to read ``Functional requirements for

computerized support enforcement systems in operation by October 1,

1997.'' In the introductory language, the citation ``Sec. 302.85(a)''

is replaced by the citation ``Sec. 302.85(a)(1) to reflect changes made

earlier in the regulations. The citation ``AFDC'' is replaced with the

citation ``TANF'' (Temporary Assistance for Needy Families) in

paragraph (b)(10).

Paragraph (b)(14) is deleted because the requirement for electronic

data exchange with the title IV-F program (Job Opportunities and Basic

Skills Training Program) is no longer operative since under PRWORA

States had to eliminate their IV-F programs by July 1, 1997. Paragraphs

(b)(15) and (16) are redesignated as paragraphs (b)(14) and (15).

A new Sec. 307.11, ``Functional requirements for computerized

support enforcement systems in operation by October 1, 2000,'' is added

and reiterates the statutory requirements in sections 454(16) and 454A

of the Act, as discussed below.

The introductory language of Sec. 307.11 specifies that each

State's computerized support enforcement system established and

operated under the title IV-D State plan at Sec. 302.85(a)(2) must meet

the requirements in this regulation. Under paragraph (a), the CSES in

operation by October 1, 2000 must be planned, designed, developed,

installed or enhanced and operated in accordance

[[Page 44797]]

with an initial and annually updated APD approved under Sec. 307.15 of

the regulations. As explained in the proposed rule, if a State elects

to enhance its existing CSES to meet PRWORA requirements, it has the

option of submitting either a separate APD or combining the Family

Support Act and PRWORA requirements in one APD update. If a State

elects to develop a new CSES, a separate implementation APD must be

submitted.

Under paragraph (b), the CSES must control, account for, and

monitor all the factors in the support collection and paternity

determination process under the State plan which, at a minimum, include

the factors in the regulation. Under paragraph (b)(1), the system must

control, account for, and monitor the activities in Sec. 307.10(b) of

the regulations which a CSES in operation by October 1, 1997, must

meet, except those activities in paragraphs (b)(3), (8), and (11) of

Sec. 307.10. These reporting, financial accountability, and security

activities are replaced by similar or expanded provisions discussed

later in this preamble that reflect statutory changes from PRWORA.

Paragraph (b)(2) describes the tasks that the computerized support

enforcement system must have the capacity to perform with the frequency

and in the manner required under or by the regulations that implement

title IV-D of the Act. Paragraph (b)(2)(i) requires the CSES to perform

the functions discussed below and any other functions the Secretary of

HHS may specify related to the management of the State IV-D program.

Under paragraph (b)(2)(i)(A), the system must control and account

for the use of Federal, State, and local funds in carrying out the

State's IV-D program either directly or through an interface with State

financial management and expenditure information systems. States can

meet the financial accountability requirements through an interface.

This provision is intended to provide States flexibility to continue

existing practices which may be in place including the use of an

auxiliary system. We have added reference to the use of auxiliary

systems in the regulatory language.

Paragraph (b)(2)(i)(B) requires that the system maintain the data

necessary to meet Federal reporting requirements for the IV-D program

on a timely basis as prescribed by the Office of Child Support

Enforcement. This requirement is similar to the functional requirements

at Sec. 307.10(b)(3) that a system must meet by October 1, 1997.

Paragraph (b)(2)(ii)(A) requires the CSES to enable the Secretary

of HHS to determine State incentive payments and penalty adjustments

required by sections 452(g) and 458 of the Act through the use of

automated processes to: (1) Maintain the necessary data for paternity

establishment and child support enforcement activities in the State;

and, (2) calculate the paternity establishment percentage for the State

for each fiscal year. Under this requirement, the system must maintain

the necessary data and calculate for each fiscal year the State's

paternity establishment percentage under section 452(g) of the Act. The

system must also maintain the data necessary to determine State

incentive payments under section 458 of the Act. In addition, under

paragraph (b)(1), the State will continue to be required to compute and

distribute incentive payments to political subdivisions in accordance

with Sec. 307.10(b)(6) of the regulations.

Paragraph (b)(2)(ii)(B) requires the system to enable the Secretary

to determine State incentive payments and penalty adjustments required

by sections 452(g) and 458 of the Act by having in place system

controls to ensure: (1) The completeness, and reliability of, and ready

access to, the data on State performance for paternity establishment

and child support enforcement activities in the State; and, (2) the

accuracy of the paternity establishment percentage for the State for

each fiscal year. Under this provision, the system controls apply to

data related to the calculation of the State's paternity establishment

percentage, and the calculation of incentive payments. Data regarding

the paternity establishment percentage and incentive payments is

reported to the Federal government in accordance with instructions

issued by OCSE.

Paragraph (b)(2)(iii) requires the system to have controls (e.g.,

passwords or blocking of fields) to ensure strict adherence to the

systems security policies described in Sec. 307.13(a) of the

regulations. Under Sec. 307.13(a), the State IV-D agency must have

written policies concerning access to data by IV-D agency personnel and

sharing of data with other persons.

Under paragraph (b)(3), the system must control, account for, and

monitor the activities in the Act added by PRWORA not otherwise

addressed in this part. Paragraph (c) requires that the system, to the

extent feasible, assist and facilitate the collection and disbursement

of support payments through the State disbursement unit operated under

section 454B of the Act. Under paragraph (c)(1), the system must

transmit orders and notices to employers and other debtors for the

withholding of income: (1) Within 2 business days after the receipt of

notice of income, and the income source subject to withholding from the

court, another State, an employer, the Federal Parent Locator Service,

or another source recognized by the State, and (2) using uniform

formats prescribed by the Secretary.

Paragraph (c)(2) requires the system to monitor accounts, on an

ongoing basis, to identify promptly failures to make support payments

in a timely manner. Paragraph (c)(3) requires the system to

automatically use enforcement procedures, including enforcement

procedures under section 466(c) of the Act, if support payments are not

made in a timely manner. These procedures include Federal and State

income tax refund offset, intercepting unemployment compensation

insurance benefits, intercepting or seizing other benefits through

State or local governments, intercepting or seizing judgments,

settlements, or lottery winnings, attaching and seizing assets of the

obligor held in financial institutions, attaching public and private

retirement funds, and imposing liens in accordance with section

466(a)(4) of the Act.

Paragraph (d) requires that, to the maximum extent feasible, the

system be used to implement the expedited administrative procedures

required by section 466(c) of the Act. These procedures include:

ordering genetic testing for the purpose of establishing paternity

under section 466(a)(5) of the Act; issuing a subpoena of financial or

other information to establish, modify, or enforce a support order;

requesting information from an employer regarding employment,

compensation, and benefits of an employee or contractor; accessing

records maintained in automated data bases such as records maintained

by other State and local government agencies described in section

466(c)(1)(D) of the Act and certain records maintained by private

entities regarding custodial and non-custodial parents described in

section 466(c)(1)(D) of the Act; increasing the amount of monthly

support payments to include an amount for support arrears; and,

changing the payee to the appropriate government entity when support

has been assigned to the State, or required to be paid through the

State disbursement unit.

Paragraph (e) requires the State to establish a State case registry

(SCR) which must be a component of the computerized child support

enforcement system. This registry is essentially a directory of

electronic case records or files. Paragraph (e)(1)

[[Page 44798]]

contains definitions of terms used in this section.

Paragraph (e)(2) describes the records which the registry must

contain. Under paragraph (e)(2)(i), the registry must contain a record

of every case receiving child support enforcement services under an

approved State plan. Under paragraph (e)(2)(ii), the registry must

contain a record of every support order established or modified in the

State on or after October 1, 1998.

Under paragraph (e)(3) each record must include standardized data

elements for each participant. These data elements include the name(s),

social security number(s), date of birth, case identification number(s)

and other uniform identification numbers, data elements required under

paragraph (f)(1) of this section for the operation of the Federal case

registry (FCR), issuing State of an order, and any other data elements

required by the Secretary. In response to comments on the proposed

rule, we added ``the issuing State of the order.'' We made this change

because as commenters correctly pointed out, information on the issuing

State of the order is essential in processing interstate cases.

Under paragraph (e)(4), each record must include payment data for

every case receiving services under the IV-D State plan that has a

support order in effect. Under this provision, the payment data must

include the following information: (1) Monthly (or other frequency)

support owed under the order, (2) other amounts due or overdue under

the order including arrearages, interest or late payment penalties and

fees, (3) any amount described in paragraph (e)(4) (i) and (ii) of this

section that has been collected, (4) the distribution of such collected

amounts, (5) the birth date and, beginning no later than October 1,

1999, the name and social security number of any child for whom the

order requires the provision of support, and (6) the amount of any lien

imposed under the order in accordance with section 466(a)(4) of the

Act.

Under paragraph (e)(5), the State using the CSES must establish and

update, maintain, and regularly monitor case records in the State case

registry for cases receiving services under the State plan. In the

proposed rule, we invited public comment as to whether timeframes or

other standards should be set for the monitoring and updating of

records and if so what timeframes and standards would be applied. As

noted in the response to comments found later in this preamble, while

many commenters responded to this request, the responses varied widely.

Therefore, we are not adding timeframes to this section of the

regulation.

To ensure that information on an established IV-D case is up to

date, the State must regularly update the record to make changes to the

status of a case, the status of and information about the participants

of a case, and the other data contained in the case record. This

includes: (1) Information on administrative and judicial orders related

to paternity and support, (2) information obtained from comparison with

Federal, State or local sources of information, (3) information on

support collections and distributions, and (4) any other relevant

information. In the proposed rule, we included reference to

``administrative actions and proceedings'' under item (1) above. We

have deleted this language in response to comments on the proposed rule

pointing out that the information in orders is most useful and while

relevant to the Statewide system, other information on actions and

proceedings would not be meaningful for purposes of the case registry.

Under the paragraph (e)(6), the State is authorized to meet the

requirement in paragraph (e)(2)(ii) of this section which requires the

State case registry to have a record of every support order established

or modified in the State on or after October 1, 1998, by linking local

case registries of support orders through an automated information

network. However, linked local case registries established in the

State's computerized support enforcement system must meet all other

requirements in paragraph (e) of this section.

Under paragraph (f), the State must use the computerized support

enforcement system to extract information at such times and in such

standardized format or formats, as required by the Secretary, for the

purposes of sharing and comparing information and receiving information

from other data bases and information comparison services to obtain or

provide information necessary to enable the State, other States, the

Office of Child Support Enforcement or other Federal agencies to carry

out the requirements of the Child Support Enforcement program. The use

and disclosure of certain data is subject to the requirements of

section 6103 of the Internal Revenue Code and the system must meet the

security and safeguarding requirements for such data specified by the

Internal Revenue Service. The system must also comply with safeguarding

and disclosure requirements specified in the Act.

Under paragraph (f)(1), effective October 1, 1998, the State must

furnish information in the State case registry to the Federal case

registry. To ensure the effective implementation of the Federal case

registry, required data elements on IV-D cases must be reported by

October 1, 1998, to be followed by initial non-IV-D submissions on or

before January 1, 1999. States must furnish information to the Federal

case registry, including updates as necessary, and notices of

expiration of support orders, except that States have until October 1,

1999, to furnish certain child data. In the proposed rule, we invited

public comment as to whether timeframes for the submission of data on

new cases or orders and for the submission of updated information

should be specified. While we clarified the above dates, with two

exceptions we have not added additional timeframes because there was no

indication that this would be helpful. With respect to the exceptions

noted, commenters noted that it was especially important that the

Family Violence indicator and the Federal case registry information be

up-to-date and therefore, we have added a requirement that the Family

Violence indicator and the Federal case registry information be updated

within five business days of receipt by the IV-D agency of new or

changed information, including information which would necessitate

adding or removing a Family Violence indicator.

Sections 453(h)(2) and (3) of the Act requires the inclusion of

child data in the Federal case registry and provide the Secretary of

the Treasury with access to Federal case registry data for the purpose

of administering those sections of the Internal Revenue Code of 1986

which grant tax benefits based on the support or residence of children,

such as the Earned Income Tax Program.

Under this rule, States must provide to the Federal case registry

the following data elements on participants: (1) State Federal

Information Processing Standard (FIPS) and optionally, county code; (2)

State case identification number; (3) State member identification

number; (4) case type (IV-D, non-IV-D); (5) social security number and

any necessary alternative social security numbers; (6) name, including

first, middle, last name and any necessary alternative names; (7) sex

(optional); (8) date of birth; (9) participant type (custodial party,

non-custodial parent, putative father, child); (10) family violence

indicator (domestic violence or child abuse); (11) indication of an

order; (12) locate request type (optional); (13) locate source

(optional), and (14) any other information as the Secretary may

require.

[[Page 44799]]

With respect to domestic violence information identified in item 10

above and addressed under paragraph (f)(1)(x) of this rule, section

453(b)(2) of the Act states that no information in the Federal Parent

Locator Service shall be disclosed to any person if the State has

notified the Secretary that the State has reasonable evidence of

domestic violence or child abuse and the disclosure of such information

could be harmful to the custodial parent or the child of such parent.

OCSE will not disclose any information on a participant in a IV-D case

or non-IV-D support order to any person unless otherwise specified in

section 453(b)(2), if the State has included a ``family violence''

indicator on such participant.

Section 453(b)(2) of the Act provides that a court may have access

to information in a case when a participant in the case has been

identified with a Family Violence indicator. This section provides that

disclosure to a court or agent of the court, may occur if, upon receipt

of the information, the court or agent of the court determines whether

disclosure beyond the court could be harmful to the parent or the child

and, if the court makes such a determination, the court or its agent

shall not make such disclosure.

Accordingly, under paragraph (f)(2), the CSES must request and

exchange information with the Federal parent locator service for the

purposes specified in section 453 of the Act. As stipulated in the

statute, the Secretary will not disclose information received under

section 453 of the Act when to do so would contravene the national

policy or security interests of the United States or the

confidentiality of census data or, as indicated above, if the Secretary

has received notice of reasonable evidence of domestic violence or

child abuse and the disclosure of such information could be harmful to

the custodial parent or the child of such parent.

Under paragraph (f)(3), the CSES must exchange information with

State agencies, both within and outside of the State, administering

programs under title IV-A and title XIX of the Act, as necessary to

perform State agency responsibilities under title IV-A, title IV-D and

title XIX.

Under the paragraph (f)(4), the CSES must exchange information with

other agencies of the State, and agencies of other States, and

interstate information networks, as necessary and appropriate, to

assist the State and other States in carrying out the Child Support

Enforcement program.

Security and Confidentiality for Computerized Support Enforcement

Systems

With the mandates of the Family Support Act of 1988, and most

recently of PRWORA, State public assistance agencies have been given

additional tools to locate individuals involved in child support cases

and visitation and custody orders and their assets.

With the use of these automated data processing (ADP) systems, and

the data they maintain and manipulate, come concerns about the security

and privacy of the information resident in these systems. In order to

protect this information, our regulations require that States must have

policies and procedures in place to ensure the integrity and validity

of their automated data processing systems.

This rule reiterates statutory requirements in section 454A(d) of

the Act addressing security and privacy issues by adding new

regulations at 45 CFR 307.13, ``Security and confidentiality for

computerized support enforcement systems in operation after October 1,

1997.''

Paragraph (a) requires the State IV-D agency to have safeguards on

the integrity, accuracy, completeness of, access to, and use of data in

the CSES, including written policies concerning access to data by IV-D

agency personnel and sharing of data with other persons. Under

paragraph (a)(1), these policies must address access to and use of data

to the extent necessary to carry out the IV-D program. This includes

the access to and use of data by any individual involved in the IV-D

program, including personnel providing IV-D services under a

cooperative or purchase-of-service agreement or other arrangement.

Under paragraph (a)(2), these policies must specify the data that

may be used for particular IV-D program purposes and the personnel

permitted access to such data. This provision applies to all personnel

who have access to data on the CSES.

In response to a comment, we have revised the language in the

proposed rule under paragraph (a)(3) to cover the disclosure of

information to State agencies administering programs under titles IV-A

and XIX of the Act. Pursuant to section 454A(f)(3) of the Act, State

IV-D agencies are required to exchange information with State IV-A and

XIX agencies as necessary to carry out the title IV-A, and XIX

programs. As drafted in the NPRM, this provision did not clearly

identify the specific disclosures of information that were authorized

and therefore, was confusing.

Paragraph (b) requires the State IV-D agency to monitor routine

access and use of the computerized support enforcement system through

methods such as audit trails and feedback mechanisms to guard against

and identify unauthorized access or use. States have flexibility in

meeting this requirement, so long as the IV-D agency monitors routine

access and use of the system.

Paragraph (c) requires the State IV-D agency to have procedures to

ensure that all personnel, including State and local staff and

contractors, who may have access to or be required to use confidential

program data in the CSES are: (1) Informed of applicable requirements

and penalties, including those in section 6103 of the Internal Revenue

Service Code, and (2) adequately trained in security procedures. Under

this requirement, State procedures must address Federal and State

safeguarding requirements and the security and safeguarding

requirements for data obtained from the Internal Revenue Service.

Finally, paragraph (d) requires the IV-D agency to have

administrative penalties, including dismissal from employment, for

unauthorized access to, disclosure or use of confidential information.

In the proposed rule we solicited comments on all areas of computer

systems security and data privacy relative to these regulations. We

received relatively little input on this section of the proposed rules.

One commenter asked that timeframes be added so that nothing would be

left to State discretion, another indicated that the level of

rulemaking was adequate and a couple of others asked that we limit

rulemaking to the statute. Given this array of positions, and the fact

that we heard no strong reaction to this section we are not making

changes to the language in the proposed rule.

Approval of Advance Planning Documents

The regulations at 45 CFR 307.15 speak to certain APD requirements

specific to CSE automated system development. These rules make

conforming amendments to address the changes made by PRWORA and to

codify certain existing requirements and authorities related to APD and

APDU oversight. We revised 45 CFR 307.15, ``Approval of advance

planning documents for computerized support enforcement systems,'' to

reflect new functional requirements the State must meet by October 1,

2000.

[[Page 44800]]

Prior to this final rule, paragraph (b)(2) required that the APD

specify how the objectives of the system will be carried out throughout

the State, including a projection of how the proposed single State

system will meet the functional requirements and encompass all

political subdivisions of the State by October 1, 1997. This paragraph

is revised to require that the APD specify how the objectives of a CSES

that meets the functional requirements in Sec. 307.10 of the

regulations, or the functional requirements in Sec. 307.11 of the

regulations, will be carried out throughout the State including a

projection of how the proposed system will meet the functional

requirements and encompass all political subdivisions of the State by

October 1, 1997, or also meet the additional functional requirements

and encompass all political subdivisions of the State by October 1,

2000.

States may submit a separate APD for each group of functional

requirements. The State may also update its current APD for the

development and implementation of a system to meet the October 1, 1997,

requirements in order to address the functional requirements that must

be met by October 1, 2000. We also replaced the citation ``Sec.

307.10'' with the citations ``Secs. 307.10, or 307.11'' where it

appears in paragraphs (a), (b), and (c).

A number of States experienced difficulty in developing systems

that complied with Family Support Act requirements and, as a

consequence, failed to meet the October 1, 1997, deadline for having

such systems in place. In response, we have made several changes in

these regulations to strengthen the oversight and management of CSE

systems development projects.

First, we will aggressively monitor State CSE development efforts

and as stated in the proposed rule we intend to conduct on-site

technical assistance visits and reviews in all States this year, as we

did last year. States whose system development efforts are lagging will

receive multiple visits. We are in the process of procuring the

services of one or more contractors to augment our ability to monitor

States progress and provide project assistance.

In addition, we will more closely review State APD and APDU

submissions. One area of focus will be on the resources available to:

(1) Monitor the progress of systems development efforts, (2) assess

deliverables, and (3) take corrective action if the project goes

astray. We will not approve a State's APD unless we are convinced that

adequate resources and a well conceived project management approach are

available for these purposes, as well as for the systems design and

implementation processes.

Most States already retain Quality Assurance assistance, using

either contractors or State staff. We will not approve a State's APD

unless it evidences adequate quality assurance services. States with a

history of troubled systems development efforts will have to rigorously

demonstrate that such resources are available to the project and are

integrated into the project's management. All reports prepared by a

State's quality assurance provider must be submitted directly to OCSE

at the same time they are submitted to the State's project management.

This rule provides for more systematic determinations and

monitoring of key milestones in States' CSE systems development

efforts, and more closely ties project funding to those milestones.

Systems should be implemented in phased, successive modules as narrow

in scope and brief in duration as practicable, each of which serves a

specific part of the overall child support mission and delivers a

measurable benefit independent of future modules. Specifically, we

added language to Sec. 307.15(b)(9) to clarify that the APD must

contain an estimated schedule of life-cycle milestones and project

deliverables (modules) related to the description of estimated

expenditures by category. The regulation includes a list of milestones

which must be addressed as provided in the September 1996 ``DHHS State

Systems Guide''.

(OCSE will issue an addendum to the Guide to provide more

information on milestones.) These life cycle milestones should include,

where applicable: Developing the general and/or detailed system

designs; preparing solicitations and awarding contracts for contractor

support services, hardware and software; developing a conversion plan,

test management plan, installation plan, facilities management plan,

training plan, users' manuals, and security and contingency plans;

converting and testing data; developing, modifying or converting

software; testing software; training staff; and, installing, testing

and accepting systems. Specifically, we are requiring that the APD must

include milestones relative to the size, complexity and cost of the

project and at a minimum address: Requirements analysis, program

design, procurement and project management.

We will treat seriously States' failure to meet critical milestones

and deliverables or to report promptly and fully on their progress

toward meeting those milestones. We will approach these problems in

several ways. States shall reduce risk by: Using, when possible, fully-

tested pilots, simulations or prototypes that accurately model the

full-scale system; establish clear measures and accountability for

project progress; and, securing substantial worker involvement and user

buy-in throughout the project.

With respect to funding, we will generally provide funding under an

approved APD only for the most immediate milestones; funding related to

achievement of later milestones will be contingent upon the successful

completion of antecedent milestones. For States with proven track

records in CSE systems development, we will continue our practice of

providing funding approval on an annual basis. Since current

regulations provide sufficient authority to limit funding in this way,

we are not proposing any additional regulatory changes but rather

reaffirming in this preamble management practices which we will follow

under existing authority.

In addition, in Sec. 307.15(b)(10) we have expanded the

requirements for an implementation plan and backup procedures to

require certain States to obtain independent validation and

verification services (IV&V). These States include those: (1) That do

not have in place a statewide automated child support enforcement

system that meets the requirements of the FSA of 1988; (2) which fail

to meet a critical milestone, as identified in their APDs; (3) which

fail to timely and completely submit APD updates; (4) whose APD

indicates the need for a total system redesign; (5) developing systems

under waivers pursuant to section 452(d)(3) of the Social Security Act;

or, (6) whose system development efforts we determine are at risk of

failure, significant delay, or significant cost overrun.

With respect to this last item, we would point out that Year 2000

systems compliance is critical to State child support enforcement

program automation efforts. Accordingly, the requirement above would

apply to States which are not Year 2000 compliant and which do not have

an existing assessment and monitoring mechanism in place. We would

consider any such State at serious risk of systems failure.

Also with respect to this last item, OCSE will carefully review

States' system development efforts, using States' APD and APDU

submissions, other documentation, on-site reviews

[[Page 44801]]

and monitoring, etc., relating to States' efforts to meet PRWORA

requirements. Based on this review, OCSE will determine the type and

scope of Independent Validation and Verification (IV&V) services that a

State must utilize and will so require such IV&V services as a

condition of its approval of the State's APD and associated funding or

contract-related documents. As indicated in the proposed rule, OCSE has

obtained the services of a contractor to assist in making this

determination.

Independent validation and verification efforts must be conducted

by an entity that is independent from the State. We would only provide

very limited exceptions to this requirement based on a State's request.

For example, we would consider an exception in a situation where a

State has an existing IV&V provider in place which is independent of

the child support agency (or other entity responsible for systems

development), which meets all criteria set forth in these rules and

where the State's systems development efforts are on track as a result.

The independent validation and verification provider must:

Develop a project work plan. The plan must be provided

directly to OCSE at the same time it is given to the State.

Review and make recommendations on both the management of

the project, both State and vendor, and the technical aspects of the

project. The results of this analysis must be provided directly to OCSE

at the same time they are given to the State.

Consult with all stakeholders and assess user involvement

and buy-in regarding system functionality and the system's ability to

meet program needs.

Conduct an analysis of past project performance (schedule,

budget) sufficient to identify and make recommendations for

improvement.

Provide a risk management assessment and capacity planning

services.

Develop performance metrics which allow tracking of

project completion against milestones set by the State.

The RFP and contract for selecting the IV&V provider must be

submitted to OCSE for prior approval and must include the experience

and skills of the key personnel proposed for the IV&V analysis. In

addition, the contract must specify by name the key personnel who

actually will work on the project.

ACF recognizes that many States already have obtained IV&V services

and as indicated in the proposed rule, OCSE will review those

arrangements to determine if they meet the criteria specified above.

The requirement that a State obtain an IV&V provider if it

significantly misses one or more milestones in their APD is intended to

assist the State in obtaining an independent assessment of their system

development project. The IV&V provider will make an independent

assessment and recommendations for addressing the systemic problems

that resulted in the missed milestones before the situation reaches the

point where suspension of the State's APD and associated Federal

funding approval is necessary. Any reports prepared by an IV&V provider

must be submitted to OCSE at the same time they are submitted to the

State's project manager. The responsibility, authority and

accountability for successful completion of systems' projects rests

with the designated single and separate State child support agency.

OCSE also has a need to receive these independent validation and

verification reports in a timely manner to fulfill their program

stewardship and oversight responsibilities. As a general rule, OCSE

will seek State reaction before acting upon any report submitted

directly to us from a State-level IV&V contractor to avoid the

possibility of acting upon misconceptions and erroneous data.

In addition, if a State fails to meet milestones in its APD, OCSE

may fully or partially suspend the APD and associated funding. OCSE

currently has authority under 45 CFR 307.40 to suspend a State's APD if

``the system ceases to comply substantially with the criteria,

requirements, and other provision of the APD * * *'' This action may

include suspension of future systems efforts under the APD until

satisfactory corrective action is taken. In such cases, funding for

current efforts, i.e., those not affected by the suspension, would

continue to be available, although OCSE would closely monitor such

expenditures. In more serious cases, suspension would involve cessation

of all Federal funds for the project until such time as the State

completed corrective action. In response to this proposal, several

commenters recommended the use of a corrective action plan as an

alternative reaction to a missed milestone. Another commenter raised

the concern that a link between project funding and a missed milestone

will further delay implementation. We believe the existing language

provides sufficient flexibility to address these comments. As indicated

above, funding would cease only in the most serious cases.

As indicated in the Response to Comments section of this preamble,

we received a number of comments on this requirement. We continue to

believe that IV&V services will be necessary in some instances to

ensure efficient and timely program automation.

However, we also want to ensure that such assistance does not

undermine or duplicate State efforts. When a trigger under these rules

is reached pointing to the need for an IV&V provider, OCSE will, in

close consultation with the States, assess the type and scope of IV&V

services a State must utilize. The assessment will include whether OCSE

through its Federal IV&V contracts can provide the independent review

needed or whether the State will need to obtain its own IV&V services.

Given OCSE's limited resources and the limited size of our IV&V

contract, the independent reviews provided under the Federal IV&V

contract are expected to be few in number and for smaller-scale, not

lengthy IV&V reviews.

Review and Certification of Mandatory Automated Systems

We revised 45 CFR 307.25, ``Review and certification of

computerized support enforcement systems,'' by replacing the citation

``Sec. 307.10'' with the citations ``Secs. 307.10, or 307.11'' in the

introductory language to reflect other changes made in this document.

FFP Availability

We also revised Sec. 307.30, ``Federal financial participation at

the 90 percent rate for computerized support enforcement systems'', to

reflect changes made to section 455(a)(3) of the Act by section

344(b)(1) of PRWORA regarding the limited extension of 90 percent

Federal financial participation.

Paragraph (a) specifies that financial participation is available

at the 90 percent rate for expenditures made during Federal fiscal

years 1996 and 1997 for the planning, design, development, installation

or enhancement of a CSES as described in Secs. 307.5 and 307.10, but

limited to the amount in an APD or APDU submitted on or before

September 30, 1995, and approved by OCSE.

Paragraph (b) provides that Federal funding at the 90 percent rate

is available in expenditures for the rental or purchase of hardware and

proprietary operating/vendor software during the planning, design,

development, installation, enhancement or operation of a CSES described

in Secs. 307.5 and 307.10.

Paragraph (b)(1) specifies that Federal funding at the 90 percent

rate is available until September 30, 1997, on a limited basis in

accordance with paragraph (a) of this section for such expenditures.

[[Page 44802]]

Similarly, under paragraph (b)(2), FFP is available at the 90

percent rate until September 30, 1997, for expenditures for the rental

or purchase of proprietary operating/vendor software necessary for the

operation of hardware during the planning, design, development,

installation or enhancement of a computerized support enforcement

system in accordance with the limitations in paragraph (a) of this

section, and the OCSE guideline entitled ``Automated Systems for Child

Support Enforcement: A Guide for States.'' FFP at the 90 percent rate

remains unavailable for proprietary applications software developed

specifically for a CSES. (See OCSE-AT-96-10 dated December 23, 1996

regarding the procedures for requesting and claiming 90 percent Federal

funding.)

ACF is issuing regulations simultaneously to implement the

provisions in section 455(a)(3)(B) of the Act, regarding the

availability and allocation of Federal funding at the 80 percent rate

for Statewide systems.

With respect to regular funding, we amended 45 CFR 307.35,

``Federal financial participation at the applicable matching rate for

computerized support enforcement systems'', by replacing the citation

``Sec. 307.10'' with the citations ``Secs. 307.10, or 307.11'' in

paragraph (a) to reflect other changes made in this document.

Suspension of APD Approval

Similar to the above, we are proposing to amend 45 CFR 307.40,

``Suspension of approval of advance planning document for computerized

support enforcement systems,'' to make a conforming change to replace

the citation ``Sec. 307.10'' with the citations ``Secs. 307.10, or

307.11'' in paragraph (a) to reflect other changes made in this

document.

Response to Comments

We received comments from a total of 30 commenters on the proposed

rule published in the Federal Register March 25, 1998 (63 FR 14462)

from State agencies and other interested parties. Specific comments and

our response follows.

General Comments

1. Comment: One commenter expressed concern that the regulation

simply mirrored the statute and asked when States could anticipate

further clarification.

Response: We believe the statute provides a clear and adequate

framework within which to regulate. However, the certification guide

provides further explanation of the statutory and regulatory

requirements for States' CSES certification. This guide was shared with

all States on April 8, 1998, via OCSE AT-98-13 and was distributed at

three OCSE-sponsored systems conferences held in March, 1998. The guide

may also be downloaded from OCSE's Internet site (ftp://

ftp.acf.dhhs.gov/pub/oss/cse/csecert.exe).

2. Comment: The FSA 1988 requirements called for a description in

the APD of a cost-to-benefit measurement methodology that the State

intended to use in the project. A commenter suggested that a

confirmation on what OCSE's expectations are in this regard for PRWORA

system certification would be helpful.

Response: OCSE-AT-96-10 provides guidance in this area that may be

helpful to the commenter. Specifically, the guidance explains that

States that choose to enhance their existing FSA '88 certified system

have the option of continuing to utilize that cost-benefit analysis, or

to close out that project when the benefits exceed the cost and

establish a new cost-benefit analysis for the PRWORA project.

State Plan Requirements (Part 302)

1. Comment: One commenter questioned why the Certification Guide is

needed in light of the regulations and suggested that it be eliminated.

A couple of other commenters agreed with this suggestion. The first

commenter went on to say that if the Guide is published, it should be

incorporated in the rules so that it is available at the time of rule

promulgation. Another commenter urged prompt release of the Guide in

final form.

Response: This rule does not initiate reference to the Guide in

regulations but rather continues the procedures that have been in place

since the Family Support Act automation requirements were implemented.

As such, this rule merely updates the reference to speak to the

Certification Guide which incorporates PRWORA requirements and

recommendations made by a State/Federal workgroup established for this

purpose. The Guide was disseminated to States (OCSE-AT-98-13) on April

8, 1998, and is posted on OCSE's Web site. It also was disseminated at

the March 1998 Systems conferences. The Certification Guide for PRWORA

will be finalized in conjunction with these final automation

regulations.

2. Comment: One commenter noted that the preamble discussion of the

State plan requirements incorrectly stated that section 454(24) of the

Act provides that States have in effect by October 1, 1997 all IV-D

requirements in PRWORA.

Response: The commenter correctly pointed out a mistake in the

preamble which we have fixed. The reference should have cited the

October 1, 1997, deadline in reference to the Family Support Act

automation requirements, not the automation requirements added by

PRWORA.

Computerized Support Enforcement Systems (Part 307)

Functional Requirements for Computerized Support Enforcement Systems

(Sec. 307.11)

1. Comment: One commenter recommended that we limit any additional

functional requirements to those required by statute or added by the

Secretary after consultation with State IV-D Directors, noting that

this would continue the collaborative, partnership process being

promoted by OCSE.

Response: We will continue to consult with the States in developing

additional functional requirements for child support automated systems.

We appreciate the collaborative, partnership process evidenced by the

Federal/State workgroup that developed the functional requirements for

automated systems in the Revised Certification Guide and the workgroups

associated with the Expanded Federal Parent Locator Service.

2. Comment: One commenter asked for clarification of the

requirement that the system ``control, account for, and monitor the

activities described in PRWORA not otherwise addressed in this part.''

Response: The State/Federal certification work group has reviewed

the existing certification requirements and has determined that

existing functional requirements in the Guide related to Family Support

Act requirements are sufficient for PRWORA requirements. Specifically,

the Guide provides for the system to update and maintain in the

automated case record all information, facts, events and transactions

necessary to describe a case and all actions taken with respect to a

case. The system must perform case monitoring to ensure that case

actions are accomplished within required time frames. The system must

maintain information required to prepare Federal reports, must generate

reports to assist in case management and processing, and must ensure

and maintain the accuracy of data.

3. Comment: One commenter questioned the inclusion of language from

section 454(16) of the Act and our

[[Page 44803]]

authority to regulate based on this language. The commenter asked that

the first sentence of Sec. 307.11(b) be deleted, recognizing that it

derives from section 454(16) of the Act, ``State plan for child and

spousal support,'' not from section 454A of the Act, ``Automated data

processing'' and that the list of ADP tasks be limited to those under

section 454A of the Act.

Response: The commenter is correct that this provision is from

section 454(16) of the Act. However, that section speaks to the State

plan requirement for automated systems for child support and thus is

relevant to this rulemaking. The discussion of statutory authority for

this rulemaking indicates that the rule implements new requirements

found under sections 454(16), 454(24), 454A and 455(a)(3)(A) of the

Act. We would also point out with respect to the first sentence, that

this is not a new provision but rather is identical to the language in

the prior rules for implementing the Family Support Act.

4. Comment: Two commenters expressed concern that the requirement

that the system control and account for the use of Federal, State and

local funds directly or through an interface with State financial

management and expenditure information went beyond the statute and

would be difficult to implement.

Response: The statute provides under section 454A(b) that the

system perform functions including controlling and accounting for

Federal, State and local funds and implies that this function is to be

part of the statewide system. Our intent in regulating this provision

is to provide maximum flexibility and permit States to continue to meet

the financial accountability requirements through an auxiliary system.

In fact, most of the systems we have seen do have this type of

interface. However, we agree that an interface would not always be

required and did not intend to require an interface when one wasn't

necessary. We've modified the language in the regulation accordingly.

5. Comment: Two commenters asked whether the intent of the

requirement that States maintain the necessary data for paternity

establishment and child support enforcement activities in the State for

each fiscal year is that the system maintain out-of-wedlock birth

statistics?

Response: We do not require States to maintain out-of-wedlock birth

statistics in the CSES. These statistics may be maintained by another

State agency, such as State Vital Statistics agencies. However, the

State IV-D agency must have access to this data to ensure accurate

calculation of the paternity establishment standard and to meet Federal

reporting requirements.

6. Comment: One commenter pointed out that the requirement for the

system to ``allocate'' performance indicators should actually be that

the system ``calculate'' the indicators.

Response: The commenter is correct and we have revised the

regulation accordingly.

7. Comment: One commenter suggested that since the PRWORA incentive

formula is still unknown, the requirement for the system to compute

performance indicators be excluded from the October 1, 2000 deadline.

Response: The requirement that the system compute performance

indicators used for incentives speaks to requirements for computing

incentives under the existing incentive formula as well as the formula

enacted by the Congress in Pub. L. 105-200.

8. Comment: One commenter asked for clarification of the reference

to ``other benefits'' in the statute at section 466(c) which speaks to

enforcement procedures including Federal and State income tax refund

offset, intercepting unemployment compensation insurance benefits,

intercepting or seizing other benefits through State or local

governments.

Response: ``Other benefits'' as referenced in the statute merely

refers to any other benefits that may be seized under State law to

enforce child support beyond what is specifically referenced in the

Act.

9. Comment: One commenter requested clarification of the

requirement that the State case registry be a component of the

statewide automated system.

Response: Section 454A(e) of the Act requires that the automated

system of each State include a registry to be known as the State case

registry and contain a record of each case in which services are being

provided under title IV-D and each support order entered or modified on

or after October 1, 1998. The section further provides that non-IV-D

orders may be maintained on a linked registry of support orders. The

IV-D agency is responsible for ensuring that the State case registry

functionality for non-IV-D orders is met, regardless of whether the

State opts to meet the non-IV-D order requirements through the

Statewide automated system or through an automated network of local

linkages.

10. Comment: We received a number of comments in response to our

solicitation of views regarding whether time frames or other standards

should be set for the monitoring and updating of records in the State

case registry (SCR) and, if these should be set, what time frames and

standards would be applied.

Commenters stated that factors such as the size of the caseload,

the status of pending automation and the cost effectiveness of updating

and monitoring may impact a States capability to update the State case

registry. Many commenters suggested that present regulatory time frames

were adequate to update and monitor the State case registry. Others

noted time frames should be included in the Certification Guide.

Additional commenters recommended specific time frames pointing out

that States may adopt varying approaches to updating and monitoring if

these requirements are not specifically delineated in regulation.

Response: There was no clear preponderance of comments on this

issue. In the absence of a distinct standard being recommended by those

commenting on these regulations, no additional regulations will be

promulgated with respect to time frames. Those time lines which are

prescribed by the System Certification Guide will remain in effect.

11. Comment: Comments regarding updating and monitoring of the

Federal case registry were also solicited. Comments ranged from

requiring updates weekly, to no regulation whatsoever.

Response: Due to the great disparity of comments, we chose to allow

States flexibility to determine when to update data in the State case

registry. However, for national consistency and accuracy of Federal

case registry data, we chose to impose the requirement of updating data

in the Federal case registry within five (5) business days.

12. Comment: One comment recommended changing the definition of

``Participant'' to more clearly include paternity orders.

Response: We agree with this position and have amended the

definition as follows: (i) Participant means an individual who owes or

is owed a duty of support, imposed or imposable by law, or with respect

to or on behalf of whom a duty of support is sought to be, established,

or who is an individual connected to an order of support or a child

support case being enforced.

13. Comment: One commenter recommended the definition of

participant be amended by deleting the reference to custodial party and

inserting in its place the word custodian, because of the legal

implications the word party may have.

Response: The term custodial party is used to encompass not only

parents, but

[[Page 44804]]

also others who may have physical custody of a child, but not

necessarily legal custody. This term is defined in a variety of

documents which have been issued with respect to the design and

implementation of State case registries and the Federal case registry.

To introduce another term at this point would be confusing and

counterproductive.

14. Comment: We received a suggestion to amend the definition of

``locate request type'' to more accurately reflect that a locate may be

used for paternity and support establishment purposes.

Response: We agree with this position and have inserted the words

``or support'' in the definition.

15. Comment: A comment was received requesting greater detail on

what records must be included in the State case registry.

Response: The State case registry shall contain a record of: (i)

Every case receiving child support enforcement services under an

approved State plan and (ii) every support order established or

modified in the State on or after October 1, 1998.

16. Comment: Several commenters expressed concern about gathering

non-IV-D information for inclusion in State case registries. It was

recommended the regulation provide a phase-in approach with regard to

non-IV-D information.

Response: The Federal case registry will be operational on October

1, 1998, and capable of accepting information on all IV-D cases and all

orders entered or modified on or after that date. In order to ensure

the effective implementation of State case registries and the Federal

case registry, the Secretary is planning a staggered schedule for the

initial submissions to the Federal case registry. The reporting of the

required data elements on IV-D cases will begin on October 1, 1998, to

be followed by initial non-IV-D submissions on or before January 1,

1999. We successfully implemented the National Directory of New Hires

by using a similar approach of staggering new hire and quarterly wage

submissions.

17. Comment: One commenter requested guidance on the way in which

non-IV-D information is to be added to a State case registry.

Response: The request for guidance on the manner in which non-IV-D

information is to be added to the State case registry exceeds the

purpose of these regulations. The purpose of these regulations is to

provide the provisions necessary for implementation of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996 as it

relates to child support enforcement program automation. However, the

Office of Child Support Enforcement is committed to providing technical

assistance and guidance on collecting and maintaining of non-IV-D data.

Information on this issue may be found in the Federal case registry

Implementation Guide, Chapter 3--State case registry.

18. Comment: One commenter asked if Federal financial participation

was available for gathering and maintaining non-IV-D case payment data

if the State determines a unified system to maintain such data was

determined to be economical.

Response: Section 454A(e)(4) of the Act provides that payment

records shall be maintained for each case record in the State case

registry with respect to which services are being provided under the

State plan. The statutory language limits the necessity of maintaining

payment information to IV-D cases. Therefore, we cannot provide Federal

financial participation to extend this to the maintenance of this

information on non-IV-D cases.

19. Comment: Many commenters were concerned with the statement that

the State case registry and Federal case registry data elements include

``any other information the Secretary may require as set forth in

instructions issued by the Office.'' Most of these commenters expressed

the position that only those established data elements be included in

the regulation. There was also concern that data elements be set prior

to October 1, 1998.

Response: Those data elements presently delineated in the

regulation are the only ones required on October 1, 1998, to be

reported to the Federal case registry. Through working with States to

identify their needs, additional data elements may become necessary to

assist States in processing child support cases. The primary reason for

allowing the Secretary to adopt additional data elements is to maintain

flexibility to respond to States' requests for enhancements in the

Federal case registry. If the Secretary requires additional data

elements in the future, States will be given adequate notice of the

changes and ample time to make the necessary system changes.

20. Comment: A couple of commenters asked for clarification of the

minimum data elements necessary for support orders on both the State

case registry and the Federal case registry.

Response: The data elements contained in the regulation at

paragraphs (e)(3) and (f)(1) are required for IV-D cases and for

support orders which are entered or modified on or after October 1,

1998. The data elements listed at paragraph (e)(4) are only required

for IV-D cases with support orders in effect.

21. Comment: Commenters also suggested that in addition to the data

element listing the existence of an order, that we should also include

the State where the order was issued. Commenters generally felt the

State where the order was issued was critical information for Uniform

Interstate Family Support Act (UIFSA) and the Full Faith and Credit for

Child Support Orders Act purposes. Many commenters also expressed the

belief that federal legislation mandated the issuing State of an order

be included as a data element on the Federal case registry.

Response: We agree that inclusion of the State where the order was

entered is necessary in case processing for UIFSA and Full Faith and

Credit for Child Support Orders Act purposes. We have added this to the

list of required data elements which a State must maintain on the State

case registry.

However, the Federal case registry serves as a pointer system to

States and is not intended to contain all of the data with respect to a

case or order maintained in the State case registry. Therefore, the

Federal case registry will only carry an indication of whether an order

exists and not the State where the order was entered. States will be

expected to use the Child Support Enforcement Network (CSEnet) to

ascertain any additional information on a participant that the State

may need. By including a State case registry data element for the State

that issued the order, we ensure that CSEnet will be able to quickly

process automated transactions of order information for UIFSA purposes.

22. Comment: One commenter requested clarification of the

distinction between the amounts of support arrears and the amount of a

lien since by definition support arrears become liens by operation of

law.

Response: We agree with the commenter that inclusion of both the

amount of the arrears and the amount of a lien as data elements in the

State case registry creates a degree of confusion since these amounts

may be identical. However, pursuant to section 466(a)(4) of the Act,

the amount of arrears in a case becomes a lien only if the non-

custodial parent owns real or personal property in the State or resides

in the State. Thus, where a non-custodial parent does not reside or own

property in the State enforcing the support obligation or if the value

of real property owned in the State is less than the amount of arrears

owed, the amount of arrears will differ from the amount of

[[Page 44805]]

liens. Section 454A(e) requires both amounts to be listed as State case

registry data elements.

23. Comment: One commenter requested that the list of standard data

elements for the State case registry include administrative and

judicial orders, rather than administrative and judicial proceedings.

The commenter was of the opinion that it is more useful to limit the

information on the case registry to this data.

Response: We agree with the commenter. The data elements have been

amended to reflect that information on administrative and judicial

orders related to paternity and support be included as a data element

in place of information on administrative actions and administrative

and judicial proceedings and orders related to paternity and support.

24. Comment: A commenter requested clarification of the distinction

between disbursement and distribution.

Response: Distribution is the allocation or apportionment of a

support collection. Disbursement is the actual dispensing or paying out

of the collection. Action Transmittal 97-13 provides a more detailed

discussion of the distinction between disbursement and distribution.

25. Comment: A comment was received requesting clarification of the

meaning of ``sharing and comparing with and receiving information from

other data bases and information comparisons services to obtain or

provide information necessary to enable the State, other States, the

Office or other Federal agencies to carry out this chapter.'' The

assumption is this section expands the base of agencies and individuals

with access to information.

Response: The intent of the introductory language of Sec. 307.11(f)

is to ensure the automated system has the capacity to share, compare

and receive information from other data bases as expressly authorized

by title IV-D of the Act. See, for example, sections 454A(f) and

466(c)(1)(D) of the Act. Except as provided under sections 454A(f)(3),

453 and 463, these exchanges are for the purposes of obtaining

information necessary to carry out the Child Support Enforcement

program under title IV-D of the Act. As a result of these comparisons,

the IV-D agency is obtaining information, not releasing information.

Thus, this section does not generally expand the base of agencies or

individuals with access to information. Information sharing activities

in the statewide automated system must be conducted in full compliance

with the safeguarding provisions of Sec. 307.13, section 453 of the

Act, and section 6103 of the Internal Revenue Code of 1986.

26. Comment: We received a comment asking for clarification of the

requirement that information be exchanged with State agencies both

within the State and with agencies in other States. More particularly,

the commenter asked whether the requirement for an exchange of data

with agencies in other States was a CSEnet transaction or a direct

exchange from the IV-D agency in one State with the IV-A agency or XIX

agency in another State.

Response: States' systems must be able to use CSEnet to exchange

data with IV-D agencies in other States. CSEnet may not be used to

exchange data with IV-A or XIX agencies in other States. Such exchanges

may be accomplished through direct exchanges or through their-in-State

title IV-A and XIX agencies.

27. Comment: We received a comment requesting explicit detail be

provided with respect to the requirement that certain data was subject

to the requirements of the Internal Revenue Code of 1986.

Response: The term ``certain data'' refers to taxpayer return

information obtained from the Internal Revenue Service. That

information is subject to the prohibitions contained in section 6103 of

the Internal Revenue Code of 1986. Return information is defined as ``a

taxpayer's identity, the nature, source, or amount of his income,

payments, receipts, deductions, exemptions, credits, assets,

liabilities, net worth, tax liability, tax withheld, deficiencies, over

assessments, or tax payments, whether the taxpayer's return was, is

being, or will be examined or subject to other investigation or

processing, or any other data, received by, recorded by, prepared by,

furnished to, or collected by the Secretary with respect to a return or

with respect to the determination of the existence, or possible

existence, of liability (or the amount thereof) of any person under

this title for any tax, penalty, interest, fine, forfeiture, or other

imposition, or offense, and any part of any written determination or

any background file document relating to such written determination

which is not open to public inspection.''

28. Comment: It was recommended by one commenter that all

references to IRS publications be eliminated and the regulation reflect

that security standards will be set following consultation between the

Secretary and the IRS.

Response: We do not agree with this recommendation. IRS Publication

1075 entitled ``The Information Security Guidelines for Federal, State

and Local Agencies'' was referenced to assist States in ensuring

compliance with IRS requirements.

29. Comment: Commenters requested greater detail be provided with

regard to updating information reported by a State to the Federal case

registry, particularly as it relates to the notice of expiration of a

support order.

Response: The definition of expiration of a support order is

determined under State law. States are required to notify the Federal

case registry when an order expires pursuant to State law. It is

critical to keep data current in both the State case registry and the

Federal case registry. The primary intent of the Federal case registry

is to act as a ``pointer'' system in notifying States of other States

which may have an interest and/or information on a participant.

30. Comment: We received a number of comments on the need for

greater detail and guidance to States on the issue of a Family Violence

indicator as a data element. Commenters suggested criteria be

established to guide States on the placement of this indicator and to

offer courts guidance on the process whereby they can release

information despite the presence of a Family Violence indicator on a

person contained within the Federal case registry. One commenter

suggested there was a need to provide direction on how and when to

update the Family Violence indicator.

Other commenters requested a definition be provided for what

constitutes reasonable evidence of domestic violence as that phrase is

used within the statute and this regulation. One commenter also

expressed the difficulty States would have in collecting Family

Violence indicators on orders or cases which are not receiving services

under the State plan. One commenter also suggested adding the Family

Violence indicator as a data element to the State case registry.

Response: The purpose of these regulations is to provide the

provisions necessary for implementation of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996 as it relates to child

support enforcement program automation. The request for additional

guidance with respect to a Family Violence indicator is beyond the

scope of these regulations. A definition of reasonable evidence will

depend primarily on State law. However, the Office of Child Support

Enforcement is committed to providing technical assistance and guidance

on the issue of the Family Violence indicator. An Action Transmittal on

the issue is forthcoming. It will assist States

[[Page 44806]]

in addressing outstanding questions such as placement of the Family

Violence indicator, the process for court access to Federal case

registry information on a person to whom a Family Violence indicator

has been attached and the necessity for updating a case when the

circumstances for the placement of the indicator changes. In addition,

OCSE is preparing a compilation of State laws and policies regarding

the criteria and placement for the Family Violence indicator. OCSE is

also participating in the Department of Health and Human Services

Violence Against Women Act Steering Committee and has disseminated

multiple resources to States regarding family violence. OCSE's Domestic

Violence liaison, Susan Notar, may be contacted for further information

on this subject at (202) 401-9370.

We agree that it is appropriate to include the Family Violence

indicator as a data element within the State case registry for purposes

of reporting the Family Violence indicator to the Federal case

registry. This data element is already required pursuant to

Sec. 307.11(e)(3)(vi) which states that the State case registry shall

contain all data elements required under Sec. 307.11(f)(1) of this

section for the operation of the Federal case registry.

31. Comment: We received comments expressing concern over the lack

of access to information by a court when a Family Violence indicator is

present. The comment also suggested updates to the Family Violence

indicator occur every two (2) days.

Response: Sections 453(b)(2)(A) and (B) of the Act provide that a

court may have access to information as permissible under 453 and 463

of the Act, in a case when a participant in the case has been

identified with a Family Violence indicator. These sections provide

that disclosure to a court, as defined in 453(c)(2) and 463(d)(2) of

the Act, or the agent of the court, may occur if upon receipt of the

information the court, or agent of the court, determines whether

disclosure beyond the court could be harmful to the parent or the child

and, if the court makes such a determination, the court and its agents

shall not make such disclosure. At the time of the disclosure of this

information to the court, the court making the request shall also be

notified of the State which placed the Family Violence indicator on a

participant. The State which made the determination that caused the

indicator to be placed on a participant shall also be informed that

another State's court has requested the Family Violence indicator be

overridden.

While we agree the Family Violence indicator is of such a sensitive

nature that it requires regular updating, we believe that updating this

every two (2) days is unrealistic. To accommodate the necessity of

updating this data element, we have added a requirement in

Sec. 307.11(f)(1)(x) requiring the Family Violence indicator be updated

within five (5) business days of receipt by the IV-D agency of

information which would cause the IV-D agency to add or remove a Family

Violence indicator.

32. Comment: Several commenters requested clarification of the

definition of a support order and the order indicator.

Response: A support order is defined in section 453(p) of the Act

as ``a judgment, decree, or order, whether temporary, final, or subject

to modification, issued by a court or an administrative agency of

competent jurisdiction, for the support and maintenance of a child,

including a child who has attained the age of majority under the law of

the issuing State, or of the parent with whom the child is living,

which provides for monetary support, health care, arrearages, or

reimbursement, and which may include related costs and fees, interest

and penalties, income withholding, attorney fees, and other relief''.

The order indicator data element will be marked ``Yes'' if a State

knows of the existence of an order (as defined above), whether the

order was issued by the reporting State or another State.

33. Comment: A comment was received suggesting that if the purpose

of the Federal case registry was to act as a pointer system to quickly

notify States of other States that have an interest and/or information

on a participant, the regulations clarify that only interstate cases

are to be submitted to the Federal case registry.

Response: Section 453(h) of the Act provides that the Federal case

registry shall include abstracts of support orders and other

information with respect to each case and order in each State case

registry. The State case registry is required by the Act to contain

records with respect to each case in which services are being provided

by the State agency under the approved State plan and each support

order established or modified in the State on or after October 1, 1998.

The reporting requirements of the Act clearly indicate all cases and

orders entered or modified on or after October 1, 1998, be included in

the State and the required data elements on each be reported to the

Federal case registry. There is no stipulation that this only be

interstate cases.

Security and Confidentiality for Computerized Support Enforcement

Systems (Sec. 307.13)

1. Comment: One commenter supported the need for adequate

safeguards for security data but was concerned that the use of employee

dismissal is subject to collective bargaining agreements and other

constraints and recommended allowing States to determine for themselves

what the administrative penalties should be.

Response: We believe the regulatory reference to administrative

penalties provides wide State flexibility for identifying appropriate

State sanctions. However, security and confidentiality of the

information is paramount to the integrity of the system and as such

administrative sanctions must include dismissal of employees in

appropriate cases.

2. Comment: One commenter expressed the view that the section on

privacy and confidentiality was difficult to follow and questioned the

intent of Sec. 307.13(a)(3), limiting access and disclosure to non-IV-D

personnel or for Non-IV-D program purposes as authorized by Federal

Law.

Response: We have reviewed the language identified by the commenter

and agree that it is confusing. Paragraph (a)(3) was designed to cover

the disclosure of information to State agencies administering programs

under titles IV-A and XIX of the Act which is authorized under section

454A(f)(3) of the Act. We have revised paragraph (a)(3) to more closely

track the language of the statutory provision. Information disclosures

to State agencies administering title IV-A or XIX programs are subject

to the safeguarding provisions of section 453 of the Act to the extent

that the disclosure involves information obtained from the FPLS and

section 6103 of the Internal Revenue Code of 1986. The following table

clarifies access to FPLS information as specified in sections 453 and

463 of the Act:

[[Page 44807]]

Access to FPLS Information

----------------------------------------------------------------------------------------------------------------

Who Why How What Exceptions

----------------------------------------------------------------------------------------------------------------

Agent/Attorney of a Establish paternity, Request filed in Information Disclosure would

State who has establish, modify or accordance with (including SSN, contravene national

authority/duty to enforce child regulations, 45 CFR address, and name, policy or security

collect child support obligations. Sec. 303.70. address and FEIN of interests of the

support and spousal Sec. 453(a) Only SPLS can request employer) on, or US, or

support, which may information from facilitating the confidentiality of

include a State IV-D FPLS. discovery of, the census data.

agency. --Must contain location of any Notification from

Resident parent, specified individual-- State of reasonable

legal guardian, information --Who is under an evidence of child

attorney or agent of including obligation to pay abuse or domestic

a child not attestation. child support, violence.

receiving IV-A --Fee must be paid. --Against whom a Sec. 453(b)

benefits. Sec. 453(d) child support

453(c) obligation is

sought,

--To whom a child

support obligation

is owed,

--Who has or may have

parental rights with

respect to a child.

Information on the

individual's wages,

other income from,

and benefits of

employment

(including health

care coverage).

Information on the

type, status,

location and amount

of any assets of, or

debts owed by or to,

the individual.

Sec. 453(a)

State Agency that is To administer such Same as above. Same as above. Same as above.

administering a program. Sec. 453(d) Sec. 453(a) Sec. 453(b).

program operated Sec. 453(a)

under a State Plan

under subpart 1 of

part B or a State

plan approved under

subpart 2 of part B

or under part E.

Sec. 453(c)

Court (or agent of Establish paternity, Request filed in Same as above, except However, upon

the court) with establish, modify or accordance with can get it despite notification that

authority to issue enforce child regulations. Sec. child abuse or FPLS has received

an order against an support obligations. 453(b) domestic violence notice of child

NCP for child Sec. 453(a) Request must be notification. abuse or domestic

support, or to serve processed through Sec. 453(b) violence, court

as the initiating the SPLS, 45 CFR must determine

court in an action Sec. 303.70 whether disclosure

to seek a child SPLS may process of the information

support order. request from court to any other person

Sec. 453(c) to FPLS. 45 CFR Sec. would be harmful.

302.35(c)(2) Sec. 453(b)

Above restrictions

on information that

would compromise

national security

etc. still apply.

Agent/Attorney of a Make or enforce a Request filed in Most recent address Disclosure would

State who has the child custody or accordance with and place of contravene national

authority/duty to visitation regulations. employment of parent policy or security

enforce a child determination. State agency receives or child. interests of the

custody or Enforce any federal request and Sec. 463(c) US, or

visitation or State law transmits it to confidentiality of

determination. regarding taking or Secretary. census data.

Agent/Attorney of the restraint of a Sec. 463(b)-45 CFR Notification from

US or a State who child. Sec. 302.35 State of reasonable

has authority/duty Sec. 463(a) SPLS made request to evidence of child

to investigate, FPLS in standard abuse or domestic

enforce or prosecute format. SPLS shall violence.

the unlawful taking identify these cases Sec. 463(c)

or restraint of a to distinguish them

child. from other requests.

Sec. 463(d)(2) 45 CFR Sec. 303.15

[[Page 44808]]

Court (or agent of Same as above. Request filed in Same as above, except However, no

court) with Sec. 463(a) accordance with can get it despite disclosure shall be

jurisdiction to make regulations. Sec. notice of child made to anyone

or enforce a child 463(c) abuse or domestic else. However, upon

custody or Request must be violence. notification that

visitation processed through Sec. 463(c) FPLS has received

determination. the SPLS. 45 CFR notice of child

Sec. 463(d)(2) Sec. 303.70 abuse or domestic

SPLS may process violence, and

request from court receipt of

to FPLS. 45 CFR Sec. information the

303.35 court must

SPLS makes request to determine whether

FPLS in standard disclosure of the

format. SPLS shall information to any

identify these cases other person would

to distinguish them be harmful.

from other requests. Sec. 463(c)

Upon receipt of Above restrictions

response from FPLS, on information that

SPLS shall send would compromise

information directly national security

to the requester, still apply.

then destroy

information related

to the request. 45

CFR Sec. 303.15

US Central Authority Locate any parent or Upon request, Most recent address Restrictions under

(under the Hague child on behalf of pursuant to and place of Sec. 453 (national

convention on an applicant to agreement between employment. security etc.,

international child central authority in Secretary of DHHS Sec. 463(e) domestic violence).

abduction). a child abduction and the central Sec. 453(b) and

Sec. 463(e) case. authority. Sec. 463(c)

Sec. 463(e) No fee may be

charged.

Sec. 463(e)

Secretary of the Administration of Pursuant to FCR data and NDNH

Treasury federal tax laws. procedures developed data.

Sec. 453(h)(3) and Sec. 453(h)(3) and between the Sec. 453(h)(3) and

(i)(3) (i)(3) Secretary of (i)(3)

Treasury and DHHS.

Social Security Verification. Pursuant to procedure FPLS data.

Administration Sec. 453(j)(1) developed between Sec. 453(j)(1)

Sec. 453(j)(1) For any purpose. the Social Security NDNH data.

Sec. 453(j)(4) Sec. 453(j)(4) Administration and Sec. 453(j)(4)

DHHS.

State IV-D agencies Location of Every 2 business days FPLS matches. Disclosure would

Sec. 453(j) (2) and individual in information Sec. 453(j) (2) and contravene national

(3) paternity or child comparison in NDNH (3) policy or security

support case. with the FCR and interest of the US,

Sec. 453(j)(2) report back to or confidentiality

Administration of IV- States within 2 of census data.

D program. business days after Notification from

Sec. 453(j)(3) a match is State of reasonable

discovered. This evidence of child

would be an abuse or domestic

automatic match with violence.

the statewide Sec. 453(b)

automated system.

Sec. 453(j)(2)(A & B

)

When the Secretary

determines a data

match would be

necessary to carry

out the purposes of

the IV-D program.

Sec. 453(j)(3)

Researchers. Research purposes At Secretary's Data in each Personal identifiers

Sec. 453(j)(5) found by the discretion. component of the removed.

Secretary to be Sec. 453(j)(5) FPLS. Sec. 453(j)(5)

likely to contribute

to achieving

purposes of IV-A or

IV-D programs.

Sec. 453(j)(5)

State IV-A agencies. Administration of IV- When the Secretary FPLS matches. Disclosure would

Sec. 453(j)(3) A program. determines a data Sec. 453(j)(3) contravene national

Sec. 453(j)(3) match would be policy or security

necessary to carry interests of the

out the purposes of US, or

the IV-A program. confidentiality of

Sec. 453(j)(3) census data.

Notification from

State of reasonable

evidence of child

abuse or domestic

violence.

Sec. 453(b)

----------------------------------------------------------------------------------------------------------------

[[Page 44809]]

Approval of Advance Planning Documents (Sec. 307.15)

1. Comment: One commenter asked for clarification of the phrase,

``how the single State system will encompass all political

jurisdictions in the State by October 1, 1997, or October 1, 2000,

respectively.'' The commenter asked for clarification of how all

political subdivisions in the State are to be included and, with

respect to the date, whether this means that as long as States have

IV&V consultants in place and comply with the APD requirements there

will not be a federal review until after October 1, 2000?

Response: The requirement that the system cover all political

subdivisions of the State was part of the Family Support Act automation

rules published October 14, 1992; this is not a new requirement. With

respect to the October 1, 2000 date, this is a reference to the date

when the State must meet the new automated system requirements of

PRWORA. We reserve the right to conduct at any time reviews of CSE

systems funded by FFP and plan to increase on-site technical assistance

related to automated CSE systems.

2. Comment: One commenter suggested that we eliminate the

requirement that ``adequate resources'' be provided in line with the

Federal resource limitation, i.e., the cap on enhanced funding.

Response: While PRWORA did cap the amount of FFP reimbursable at

the 80 percent matching rate at $400 million, FFP at the regular 66

percent rate continues to be open-ended. The investment by both the

Federal and State government necessitates the need for States to

allocate sufficient resources to properly manage a project of this

size, complexity and importance; we are making no change to this

requirement.

3. Comment: A couple of commenters questioned the APD approval

process and recommended that the process be eliminated and that a new

approach be adopted. One of these commenters suggested a State-Federal

partnership to examine and develop an effective new process. The other

comment suggested we substitute a very limited planning section to the

State plan describing how Federal funding will be used to support the

statutory requirement.

Response: The Advanced Planning Document procedures are not limited

to automated systems for Child Support Enforcement. The child support

systems requirements are based on the APD requirements of 45 CFR part

95 and are used by Food and Nutrition Service for Food Stamps, HCFA for

Medicaid, and ACF for IV-A (prior to TANF), Child Welfare and Child

Care programs.

Since 1981, of the $3.2 billion expended on developing and

implementing child support automated systems over the last 17 years,

the Federal government has provided $2.5 billion for development of

child support automated systems, a considerable investment. While the

amount of enhanced (80%) funding is capped, there is no limitation on

the amount of expenditures for systems development at the 66 percent

rate, still a considerable investment by the Federal government. The

other Federal programs which have no enhanced funding and whose level

of regular rate FFP is 50 percent still require States to adhere to APD

procedures and certification reviews.

We believe we have a fiduciary responsibility to oversee and

monitor this considerable financial investment in automated systems for

child support. The commenters blamed APD procedures for past systems

development failures, but various independent entities, including the

General Accounting Office during their evaluation of CSE systems

development, have cited the need for more, not less, monitoring and

oversight of the States by the Federal government through the APD

process. The importance of automation to child support enforcement

cannot be over emphasized.

4. Comment: One commenter expressed appreciation for Federal

efforts to have a more substantial presence in assisting and monitoring

State's development projects. An automated system is a major tool in

tracking and enforcing child support and must be efficiently developed.

The commenter agrees with the proposal to require a State to obtain

IV&V when certain APD requirements are not met, stating that a well

organized work plan and schedule based on the critical path method must

be used in development of an automation effort of this size and

complexity.

Another commenter, commenting as a State with a proven successful

track record, indicated that they understand the intent of the quality

assurance process, backup procedure, and IV&V as outlined but raised

concerns that it may prove to be process-intensive and distracting if

too hard a line is taken requiring proven states to provide this level

of detail. The commenter raised concern that the potential

repercussions include causing disruption to management of the project,

escalation of development costs and delay.

Other commenters asked what was meant by projects going astray and

in what form corrective action will take place? Other commenters were

also concerned about the requirement that quality assurance providers

reports be submitted directly to OCSE because they believe State

project management should have an opportunity to correct misperceptions

or erroneous data prior to submittal. These commenters and another were

concerned that this approach will delay State's progress while awaiting

approval and additional funding and strongly recommend that steps be

taken to ensure this does not occur. They further recommended that if a

time period is necessary for OCSE to receive the report, it be 30 days

after the State has received the report from the QA vendor.

Still another commenter suggested a collaborative approach between

the State and the IV&V to ensure progress is not impeded due to

miscommunication between the vendor and the State. Such collaboration

could ensure that Federal needs of monitoring and validating system

development efforts are met, while State's efforts at timely completion

of automation requirements are not impeded.

Response: Independent validation and verification efforts must be

conducted by an entity that is independent from the State. We would

only provide very limited exceptions to this requirement based on a

State's request. For example, we would consider an exception in a

situation where a State has an existing IV&V provider in place which is

independent of the child support agency (or other entity responsible

for systems development), which meets all criteria set forth in these

rules and where the State's systems development efforts are on track as

a result.

The requirement that OCSE receive the QA and IV&V reports

simultaneous with a State should have no impact on State systems

development progress since funding approval is not tied to these

reports. Further, the State is free to correct any misconceptions or

erroneous data in the QA or IV&V reports submitted, but delaying the

reports for 30 days or editing them before submittal to OCSE defeats

the purpose of OCSE's receiving the reports, i.e., early identification

of problems. We would clarify that while we require quarterly progress

reports, we encourage more frequent communication, especially during

critical system development phases.

5. Comment: One commenter raised concerns about the statement in

the preamble that States will be required to reduce risk by using, when

possible,

[[Page 44810]]

fully tested pilots, simulations or prototypes. The commenter expressed

the belief that each of the items were key factors in the delay of

State's ability to finalize system development under the Family Support

Act and led to significant cost overruns.

Other commenters expressed the view that these regulations are an

unnecessary burden on States and will not enhance either the system

development or system quality assurance process. In fact, the

commenters said, this requirement may even delay systems

implementation.

We received one recommendation that the requirement for an

independent validation and verification (IV&V) provider not be tied to

past project performance. The commenter stated that a more efficient

use of resources is to concentrate the IV&V review on the merits of the

existing APD and related project plans.

Another commenter shared the view that if sufficient time is given,

the IV & V requirement is not overly burdensome.

Several commenters were concerned that the cost of this item was

never considered in the allocation of the enhanced funding and States

required to procure these services will have an unexpected financial

burden placed on them. One of these commenters went on to suggest that

it should be up to the State to determine the appropriate corrective

action, where an IV & V would be only one option.

Reponse: The suggestions enumerated in the preamble are common best

practices recommended by all successful information technology efforts.

We are concerned that commenters believe that ``establishing clear

measures, worker involvement and buy-in'' are delaying factors. They

should be an essential part of any information technology system

development effort. Without these procedures, the systems project has a

high probability of failure and delay.

However, we recognize that many States have already obtained IV & V

services or conducted the type of review that the proposed IV & V

requirement was intended to address. We also recognize that the IV & V

services requirement must be structured to avoid delaying the project.

When a State's action or inaction triggers the need for IV & V services

as specified in Sec. 307.11, we will, in close consultation with the

States, assess the value, need for, and type of IV & V services.

OCSE has recently acquired an IV & V service contract. While this

contract is not meant to substitute for effective State IV & V reviews,

the Federal IV & V contractors may be utilized in some situations. The

assessment will include whether OCSE through its Federal IV & V

contractors can provide the independent review needed or whether the

State will need to obtain its own IV & V services.

6. Comment: One commenter questioned why States already under

penalty for missing certification, i.e. the States that have lost all

Federal funding, need APD approval since they have no further Federal

dollars to lose. The commenter believes this would result in such

States being penalized twice.

Response: While several States have received letters of intent to

disapprove their State plans because of their failure to meet the

October 1, 1997 statutory deadline for State automated system

certification, all States receiving such notices have requested a

predecisional hearing. Until such time as a hearing is concluded and

HHS reaches a final decision, those States will continue to receive

Federal funds for child support, including funds for system development

to complete those CSE systems. While those States continue to receive

Federal funds for systems development and other APD services, Federal

APD requirements continue to apply.

7. Comment: one commenter pointed out that there are various

reasons for missing milestones, citing policy changes as a major

factor. Another factor is that PRWORA included enormous automation

requirements, yet the resource allocation is diminishing almost

simultaneously. The commenter suggests that the best action for missed

milestones is a corrective action plan agreed upon by State and Federal

representatives.

Related to this, another commenter suggested this requirement be

changed to require the submittal of a revised APDU, as soon as the

State is ``off-plan'' if it has missed milestones. Further, OCSE should

work with the State and their QA service provider to reach agreement on

the corrective actions necessary to assure continued progress and

continued funding. If the Federal agency review of this new APDU does

not result in approval of the revised approach, then funding could be

reduced or eliminated.

Response: Current regulations require States missing significant

milestones to submit to ACF for approval a revised schedule and budget

in an As-Needed APDU. Current regulations also provide that OCSE may

suspend system development funding when a State ceases to comply

substantially with its APD. The rule adds additional tools and

flexibility to assist States whose systems development efforts are

experiencing difficulty, such as obtaining IV & V services, short of

cutting off all funding.

8. Comment: One commenter questioned the need for IV & V when

determining the need for system redesign, stating that the decision is

based on State administration and operational needs and APD approval is

already required.

Response: The final rule cites as a trigger for an IV & V a total

redesign of the automated CSE system (i.e. replacing existing automated

system with new system). We believe that an independent assessment of

the system project can bring valuable new insight into the process.

9. Comment: One commenter thought the language on Federal oversight

was confusing. The commenter noted that it appears that OCSE may be

requiring States to acquire IV & V in addition to their QA service

provider and questioned the requirement that OCSE has approval

authority over the contract and the contractor's key personnel. While

several commenters agreed with the requirement for the acquisition of a

QA service provider and the need to share specified QA status reports,

they do not agree that another layer of review should be added.

Response: Current regulations require prior Federal approval of

contracts or contract amendments over certain thresholds. Because of

the importance of this activity to system development, the proposed

regulations provide for prior approval for IV&V contracts regardless of

threshold, if the need for IV&V is triggered by one of the events cited

in the regulation.

The final rule enumerates what the IV&V contract the State enters

into should have regarding key personnel. That information is intended

to assist the State in maintaining those key personnel bid by the

vendor on the contract; there is no intent for the Federal government

to judge the key personnel proposed in the State's IV&V contract.

10. Comment: One commenter raised concerns about the requirement

that the IV&V vendor consult with all stakeholders and assess user

involvement and buy-in and recommended eliminating the word ``all.''

The commenter indicated agreement that buy-in is critical to success,

but stated that attaining consensus from ``all'' interested parties in

any process that involves as many divergent stakeholders as child

support does is not possible. The commenter suggested that removal of

the word all makes this requirement something that can be done.

[[Page 44811]]

Response: We have not changed the language because we believe that

the regulation is clear that the IV&V provider must consult with all

stakeholders, but not necessarily consult with each and every member of

a stakeholder group (i.e. every clerk or the court, or every

caseworker) nor does it require the IV&V provider to achieve consensus

among ``all'' stakeholders.

11. Comment: One commenter asked how States will be evaluated to

determine significant delay or cost overruns? The commenter suggested

that we specify the measure to avoid arbitrary measures.

Response: We recognize that all system development projects require

some level of schedule and budget revisions. The Implementation Advance

Planning Document addresses these topics and requires an estimated

schedule and budget which is revised annually or requires an as-needed

update. A significant delay is one which affects a State's ability to

meet the statutory deadlines in PRWORA. Current regulations at 45 CFR

95.611(c)(2)(ii) require an explanation for significant (10%) cost

increases from the previous year and also require States to explain

slippage in terms of causes and effect on the overall implementation

schedule. For example, for enhanced FFP, Sec. 95.611(c)(2)(ii) requires

States to submit an as-needed APDU when there is a projected increase

of $100,000 or 10 percent of the project costs, whichever is less, or a

schedule extension of more than 60 days for major milestones.

12. Comment: Two commenters pointed out that milestones can be

missed due to circumstances beyond the control of the State (i.e.

delayed issuance of requirements, changes in requirements,

underestimation of changes required due to unknown factors). One of the

commenters recommended that States be allowed to correct project plans

to modify milestone due dates within reason. The commenter asked for

clarification of the procedures that will be used to monitor the

completion of milestones and be assured that progress will not be

impeded by the monitoring and approval process. The commenter

encouraged that funding loss not be threatened without first allowing

some room for corrective action by the State.

Response: We believe the APD process and the As-Needed APDU process

already provide the State with the opportunity for corrective action.

The procedures that will be used to monitor include reports from the

State, quarterly reports from the State's QA vendor, ongoing

communications, and on-site monitoring from OCSE staff.

13. Comment: One commenter suggested that the list of milestones be

a guide or recommendation and that the actual milestones and

deliverables to be included in the APD should be negotiable and based

on individual State needs and current status.

Response: We agree with this position. Traditional life cycle

methodologies will form the basis of milestones for any State, but we

are open to negotiating modifications with States to address individual

State needs and circumstances.

14. Comment: Several commenters charged that the APD and APDU

process as it currently exists is extremely burdensome and will become

more so with the implementation of this rule. The record keeping which

is necessary to annually update the APD is very complex. The commenters

indicated that the data needed for the APD is not usually part of the

normal operations of the IV-D agency, especially after system

implementation, and keeping up with all the data needed for the update

requires staff who are dedicated to this type of recording. Since

enhanced funding is no longer available for operation of a certified

system, a couple of these commenters thought it unreasonable to

continue to require an annual update of the APD. One commenter

suggested that while elimination of the process would be ideal, at best

the APD should be simplified.

Response: Enhanced funding is not the trigger for annual update of

the APDU. This requirement applies to all State automated systems

development activities, including those funded at the regular matching

rate. However, we are in full agreement with the goal to simplify the

approval process where possible and appropriate. As mentioned in the

preamble, revisions to the APD process affect other programs. We will

continue to work with our Federal and State partners to develop

innovative ideas and approaches and plan to convene meetings to address

this issue.

15. Comment: A couple of commenters asked how suspending the APD

and associated funding assists States in achieving the goal of systems

development. The commenter suggested that a more productive approach

might be to provide States experiencing difficulties with technical

assistance.

Response: One purpose of the rule is to give us and States

additional tools and options for dealing with systems development

efforts which are experiencing difficulties. We would agree with the

commenter that suspending funding would not always be the most

productive course of action. We certainly agree that technical

assistance can be productive in assisting States experiencing

difficulties and we are committed to providing such assistance.

The rule also gives us and States a better framework for designing

and monitoring system development efforts and facilitates the early

identification of difficulties. This should assist us and States in

taking appropriate corrective action before more punitive measures,

such as suspension of funding, become necessary. However, this rule

leaves in place the current regulatory provision that if OCSE finds a

State substantially out of compliance with its APD, it must totally

suspend all associated funding. The proposal refers to ACF's approval

of funds under an approved APD and the intent is to continue to provide

some funding for limited, specific functions under the APD to assist

the State in addressing the areas of the APD that are out of

compliance.

16. Comment: Commenters also thought it unclear how a State can

identify a failure and a backup procedure since there is no explanation

defining at what point a situation becomes a failure, or at what point

a backup procedure is to be implemented, and who makes those

determinations. The commenter further questioned how a State can

account for failures and backup procedures in its projected timetable

when the State does not know what failure may occur and when that

failure may occur.

Response: The State, in planning an information technology project

of the size and complexity of most CSE projects, develops risk

management factors that help in identifying possible risks of failure.

Current regulations require the inclusion of backup procedures in a

State's APD. The final rule expands on that requirement by listing six

circumstances that would trigger the need for a specific type of backup

procedure, viz, obtaining IV&V services. The first five trigger points

are self-explanatory. The sixth trigger point is based on ACF's

traditional oversight and monitoring role over ACF-funded State

automated systems.

17. Comment: Several comments pointed out that the statute does not

require an IV&V and questioned whether this wasn't an unfunded mandate.

These commenters and others suggested that the provision be eliminated.

One commenter stated that although the States are being required to

obtain IV&V, it appears that the State-level IV&V will be doing Federal

monitoring, that the so-called State-level

[[Page 44812]]

IV&V will actually be controlled at the Federal level. The commenter

asked if this was the intent.

Response: Obtaining IV&V to review a troubled system is good

business practice and has been utilized by numerous State systems as

they encountered the very problems enumerated in this proposed

regulation. OCSE will obtain its own IV&V contractor which will be

assisting the Federal government in its oversight and monitoring role.

The State IV&V is not intended to substitute for Federal monitoring.

Rather, it is a mechanism whereby a State, and by extension the Federal

government, can obtain objective analysis and recommendations to deal

with serious system development issues. Funding for IV&V services is

available to States at the applicable (66%) FFP rate.

18. Comment: One commenter noted that CSES are the only mandated,

automated state systems that must pass certification requirements which

not only detail what the systems should do, but in many cases, how they

should do it. The commenter went on to say that the certification

requirements do not take into account the business practices of the

States, or successful program performance. The commenter and several

others suggested that the systems certification process needs to be

more flexible, less focused on systems detail and take into account

overall program performance of the State.

Response: Child support differs from other Federally funded

programs in at least two respects. The first is that OCSE reimburses

States for a higher share of costs--both systems development and

administrative costs, than do other Federal programs. With the Federal

government funding 66 to 80 percent of costs, one of OCSE's objectives

is to ensure that States use automation to the greatest extent

practicable in order to keep program costs in line. The second

distinction is that approximately one-third of child support cases

involve more than one State. Having some consistency in terminology and

practices across State automated systems is critical if this portion of

the caseload is to be handled efficiently and effectively. The

specificity of automation requirements is a reflection of the

programmatic provisions of the CSE authorizing statute; and under

current financing arrangements, States in the aggregate reap a

substantial financial return from the Program and stand to gain even

more as effectiveness and efficiency improve due to automation.

In developing the certification guide for PRWORA requirements, OCSE

heavily involved States early on in the process via a Federal/State

work group. One of the guiding principles followed by this Federal/

State work group was to avoid prescriptive requirements and micro-

management of the functionality of the State's CSE system. Comparison

of those sections of the certification guide related to PRWORA with

those sections related to Family Support Act requirements will show

that we've substantially reduced the prescriptiveness and detail.

19. Comment: One commenter recommended that States be permitted to

have flexibility in plan development for projects rather than be

restricted to phased successive models as narrow in scope and brief in

duration as practicable.

Response: Use of life cycle methodology for system development is

considered good business practice. However, we agree that the process

should be commensurate with the size and scope of the development

effort. OCSE recognizes, for example, that for States that choose to

enhance their existing Family Support Act certified CSE systems to meet

the new PRWORA system requirements, the milestones and project

methodologies may differ from traditional life cycle methodologies

associated with building entirely new systems. The utilization of the

traditional life cycle methodologies should be commensurate with the

size, scope, complexity and risk of the enhancement. If a State feels

that using traditional life cycle methodologies is inappropriate to its

project, it should contact OCSE and discuss alternatives.

20. Comment: One commenter suggested that it might help if the

Federal government had a group of State resources that were familiar

with these projects and they groomed them as a team to go into a State,

do the evaluation, etc., at Federal expense.

Similarly, another commenter suggested that we consider the

practicality of developing a mentoring or coaching arrangement where

the more proven States would be joined with other States which may be

struggling with their system development effort to share ideas and

brainstorm solutions to obstacles.

Response: OCSE has been supportive of the ``peer-to-peer''

assistance approach and will consider funding State systems experts to

assist other States in system development. For example, West Virginia,

Puerto Rico, Virginia, Iowa and Washington State have all lent the

expertise of their CSE systems staff to assist other States. ACF

intends to follow-up on the suggestion for a resource directory and

specialized training as a method of improving technical assistance to

States. State staff certainly would bring a practical hands-on

expertise and experience to the project. However, with all States

working to meet the same statutory deadlines, OCSE does not believe

that the States can spare the time and resources needed to substitute

entirely for independent validation and verification of State systems

development.

21. Comment: One commenter noted that the automation requirements

of PRWORA require significantly more data sharing between the States

and with DHHS but that unfortunately, the Family Support Act of 1988

mandated that all States IV-D systems have certain functionality, it

did not require that these systems have common protocol and data

structures. According to the commenter, this first became a problem as

States brought up CSENet and experienced numerous errors in exchanging

case information and will continue to be a significant problem with the

Federal case registry process. In addition, there are no common

definitions for some of the basic data elements involved: e.g., case,

Family Violence indicator, etc. Common definitions must be established

and adhered to by all States for effective communication between the

disparate systems.

Response: We acknowledge that PRWORA requires increased data

sharing between States and that neither the statute nor regulations

require that statewide CSE systems have common protocols and data

structures. In these rules, we have attempted to strike a balance

between providing common definitions, standardized data elements, and

uniform transmission protocols and maintaining States' flexibility in

designing systems that meet their business needs. OCSE, as required by

statute, has recently specified common definitions and data reporting

forms for Federal reporting purposes that will become effective October

1, 1998. In both CSENet and FCR, we are working with State work groups

to develop valid transaction tables, ``Good Manners Guides,'' and

implementation and interface guidance documents to assist States in

exchanging data without intruding on a State's prerogative to design

its statewide CSE systems to best meet its needs.

FFP Availability (Sec. 307.30)

1. Comment: One commenter requested clarification on whether the 80

percent match includes costs of developing policies and procedures and

training. The commenter recommended

[[Page 44813]]

that if the response is affirmative that this be made explicit in

guidance.

Response: Training is not eligible for enhanced Federal financial

participation. This funding limitation was applicable to 90% enhanced

funding and did not change under PRWORA for 80% funding. Only training

for trainers is eligible for enhanced matching; training of staff is

reimbursable at the normal 66 percent matching rate.

2. Comment: One commenter asked that we modify software and

ownership rights regulations so ownership rights are option. The

commenter suggested that we should act as a model to ``* * * test a

more flexible approach that is used widely in other areas of government

* * * .''

Response: This is not a new requirement, nor is it unique to child

support enforcement. It is a restatement of current regulations that

apply to all automated systems, not just CSE. Over the course of the

last few years, through various interagency workgroups and research

efforts and public-private partnerships (such as the Human Service

Information Technology Advisory Group), we have examined the issue of

Federal software rights in licenses, and State and local government

software ownership. Our conclusion consistently has been that the

Federal policy in this area, as stated in Federal regulations at 45 CFR

95.617, and as restated in our child support automation regulations at

45 CFR 307.30, is appropriate and best protects the Federal interest in

CSE and other Federal systems development efforts. We are unfamiliar

with any other, ``* * * approach that is used widely in other areas of

government * * *'' as stated by the commenter.

This policy does not apply to ``* * * proprietary operating/vendor

software packages (e.g., ADABASE or TOTAL) which are provided at

established catalog or market prices and sold or leased to the general

public * * *'', nor is it applicable to commercial off-the-shelf

software because these types of software are not unique to public

assistance programs.

Executive Order 12866

Executive Order 12866 requires that regulations be drafted 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. The changes in

this rule include IV-D State plan amendments, new functional

requirements for CSESs, and limited extension of 90 percent Federal

funding.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act (Pub. L. 96-354) requires the

Federal government to anticipate and reduce the impact of regulations

and paperwork requirements on small entities. The Secretary certifies

that these regulations will not have a significant economic impact on a

substantial number of small entities because the primary impact of

these regulations is on State governments.

Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995, Pub. L. 104-13, all

Departments are required to submit the Office of Management and Budget

(OMB) for review and approval any reporting or recordkeeping

requirements inherent in a proposed or final rule.

When an OMB control number is issued, it will be published in the

Federal Register as required by law. This final rule contains

information collection requirements in Secs. 302.85(a)(1) and (2),

307.11 (e) and (f), 307.13 (a) and (c), and 307.15(b)(2) which the

Department has submitted to OMB for its review.

More specifically, Secs. 302.85(a) (1) and (2) include IV-D State

plan amendments; Secs. 307.11 (e) and (f) include procedures for

establishing a State case registry (SCR) and for providing information

to the Federal case registry (FCR), Sec. 307.13(a) includes written

policies concerning access to data by IV-D agency personnel and sharing

of data with other persons to carry out IV-D program activities,

Sec. 307.13(c) includes procedures that all personnel with access to or

use of confidential data in the CSES be informed of applicable

requirements and penalties, and receive training in security

procedures, and Sec. 307.15 describes several requirements for an

advance planning document for a Statewide computerized support

enforcement system.

The respondents to the information collection requirements in this

rule are the State child support enforcement agencies of the 50 States,

the District of Columbia, Guam, Puerto Rico, and the Virgin Islands.

The respondents also include the courts that handle family, juvenile,

and/or domestic relations cases within the 50 States, the District of

Columbia, Guam, Puerto Rico, and the Virgin Islands. The Department

requires this collection of information: (1) To determine compliance

with the requirements for a Statewide computerized support enforcement

system; (2) to determine State compliance with statutory requirements

regarding informing IV-D personnel of integrity and security

requirements for data maintained in the CSES; and (3) for States to

make funding requests through advance planning documents, and APD

updates.

These information collection requirements will impose the estimated

total annual burden on the States described in the table below.

----------------------------------------------------------------------------------------------------------------

Number of Responses per Average burden Total annual

Information collection respondents respondent per response burden

----------------------------------------------------------------------------------------------------------------

302.85 (a)(1) and (2).......................... 27 1 .5 13.5

307.11(f)(1)................................... 54 .............. 114.17 6,165

307.11(f)(1)................................... 54 1 46.27 2,499

307.11(f)(1)................................... 54 162,963 .083 730,400

307.11(f)(1)................................... 54 52 1.41 3,959

307.11(e)(2)(ii)............................... 54 25,200 .046 62,597

307.11(e)(1)(ii)............................... 3,045 447 .029 39,472

307.13(a) and (c).............................. 27 1 16.7 451

307.15 (APD)................................... 9.33 1 240 2239

307.15 (APDU).................................. 62.33 1 60 3740

----------------------------------------------------------------

Total...................................... .............. .............. .............. 851,535.5

----------------------------------------------------------------------------------------------------------------

[[Page 44814]]

The Administration for Children and Families invited comments by

the public in the proposed rule on the information collection in:

Evaluating whether the proposed collections are necessary

for the proper performance of the functions of ACF, including whether

the information will have practical utility;

Evaluating the accuracy of ACF's estimate of the burden of

the proposed collection of information, including the validity of the

methodology and assumptions used;

Enhancing the quality, usefulness, and clarity of the

information to be collected; and

Minimizing the burden of the collection of information on

those who have to respond, including the use of appropriate automated,

electronic, mechanical, or other technology to permit electronic

submission of responses.

No comments were received on this information collection on the

associated estimated burden hours. An agency may not conduct or

sponsor, and a person is not required to respond to, a collection of

information unless it displays a currently valid OMB control number.

Unfunded Mandates Reform Act of 1995

Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.

1532) requires that a covered agency prepare a budgetary impact

statement before promulgating a rule that includes and Federal mandate

that may result in the expenditure by State, local, and Tribal

governments, in the aggregate, or by the private sector, of $100

million or more in any one year.

We have determined that this rule will not impose a mandate that

will result in the expenditure by State, local and Tribal governments,

in the aggregate, or by the private sector, of more than $100 million

in any one year. Accordingly, we have not prepared a budgetary impact

statement, specifically addressed the regulatory alternatives

considered, or prepared a plan for informing and advising any

significantly or uniquely impacted small government.

Congressional Review of Rulemaking

This rule is not a ``major'' rule as defined in Chapter 8 of 5

U.S.C.

List of Subjects

45 CFR Part 302

Child support, Grant programs--social programs, Reporting and

recordkeeping requirements, Unemployment compensation.

45 CFR Part 304

Child support, Grant programs--social programs, Penalties,

Reporting and recordkeeping requirements, Unemployment compensation.

45 CFR Part 307

Child support, Grant programs--social programs, Computer

technology, Reporting and recordkeeping requirements.

(Catalog of Federal Domestic Assistance Program No. 93.563, Child

Support Enforcement Program)

Dated: June 30, 1998.

Olivia A. Golden,

Assistant Secretary for Children and Families.

Approved: July 28, 1998.

Donna E. Shalala,

Secretary, Department of Health and Human Services.

For the reasons set forth in the preamble, 45 CFR parts 302, 304,

and 307 are amended as set forth below.

PART 302--STATE PLAN REQUIREMENTS

1. The authority citation for part 302 continues to read as

follows:

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

1396(a)(25), 1396b(d)(2), 1396b(o), 1396b(p) and 1396(k).

Sec. 302.85 [Amended]

2. Section 302.85 is amended by revising paragraph (a) to read as

follows:

* * * * *

(a) General. The State plan shall provide that the State will have

in effect a computerized support enforcement system:

(1) By October 1, 1997, which meets all the requirements of Title

IV-D of the Act which were enacted on or before the date of enactment

of the Family Support Act of 1988, Pub. L. 100-485, in accordance with

Secs. 307.5 and 307.10 of this chapter and the OCSE guideline entitled

``Automated Systems for Child Support Enforcement: A Guide for

States.'' This guide is available from the Child Support Information

Systems Division, Office of State Systems, ACF, 370 L'Enfant Promenade,

SW., Washington, DC 20447; and

(2) By October 1, 2000, which meets all the requirements of title

IV-D of the Act enacted on or before the date of enactment of the

Personal Responsibility and Work Opportunity Reconciliation Act of

1996, Pub. L. 104-193, in accordance with Secs. 307.5 and 307.11 of

this chapter and the OCSE guideline referenced in paragraph (a)(1) of

this section.

* * * * *

PART 304--FEDERAL FINANCIAL PARTICIPATION

1. 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).

Sec. 304.20 [Amended]

2. In Sec. 304.20, reference to ``Until September 30, 1995'' in

paragraph (c) is revised to read ``Until September 30, 1997''.

PART 307--COMPUTERIZED SUPPORT ENFORCEMENT SYSTEMS

1. The authority citation for part 307 is revised to read as

follows:

Authority: 42 U.S.C. 652 through 658, 664, 666 through 669A, and

1302.

Sec. 307.0 [Amended]

2. Section 307.0 is amended by revising the introductory text;

redesignating paragraphs (c) through (h) as paragraphs (d) through (i);

and adding a new paragraph (c) to read as follows:

* * * * *

This part implements sections 452(d) and (e), 454(16) and (24),

454A, and 455(a)(1)(A) and (B), and (a)(3)(A) of the Act which

prescribe:

* * * * *

(c) Security and confidentiality requirements for computerized

support enforcement systems;

* * * * *

Sec. 307.1 [Amended]

3. Section 307.1 is amended by redesignating paragraphs (b) through

(j) as paragraphs (c) through (k); replacing the citation

``Sec. 307.10'' with the citations ``Sec. 307.10, or Sec. 307.11'' in

the newly designated paragraphs (d) and (g); and adding a new paragraph

(b) to read as follows:

* * * * *

(b) Business day means a day on which State offices are open for

business.

* * * * *

Sec. 307.5 [Amended]

4. Section 307.5 is amended by removing paragraphs (a) and (b);

redesignating paragraphs (c) through (h) as paragraphs (b) through (g);

replacing the citation ``Sec. 307.10'' with the citations

``Sec. 307.10, or Sec. 307.11'' in the newly redesignated paragraph

(b); and adding a new paragraph (a) to read as follows:

* * * * *

(a) Basic requirement. (1) By October 1, 1997, each State must have

in effect

[[Page 44815]]

an operational computerized support enforcement system, which meets

Federal requirements under Sec. 302.85(a)(1) of this chapter, OCSE will

review each system to certify that these requirements are met; and

(2) By October 1, 2000, each State must have in effect an

operational computerized support enforcement system, which meets

Federal requirements under Sec. 302.85(a)(2) of this chapter. OCSE will

review each system to certify that these requirements are met.

* * * * *

Sec. 307.10 [Amended]

5. Section 307.10 is amended in the introductory text by replacing

the citation ``Sec. 302.85(a)'' with the citation

``Sec. 302.85(a)(1)''; replacing ``AFDC'' with ``TANF'' in paragraph

(b)(10); removing paragraph (b)(14); redesignating paragraphs (b)(15)

and (16) as paragraphs (b)(14) and (15); and revising the section

heading to read as follows:

Sec. 307.10 Functional requirements for computerized support

enforcement systems in operation by October 1, 1997.

* * * * *

6. Section 307.11 is added to read as follows:

Sec. 307.11 Functional requirements for computerized support

enforcement systems in operation by October 1, 2000.

At a minimum, each State's computerized support enforcement system

established and operated under the title IV-D State plan at

Sec. 302.85(a)(2) of this chapter must:

(a) Be planned, designed, developed, installed or enhanced, and

operated in accordance with an initial and annually updated APD

approved under Sec. 307.15 of this part;

(b) Control, account for, and monitor all the factors in the

support collection and paternity determination processes under the

State plan. At a minimum, this includes the following:

(1) The activities described in Sec. 307.10, except paragraphs

(b)(3), (8) and (11); and

(2) The capability to perform the following tasks with the

frequency and in the manner required under, or by this chapter:

(i) Program requirements. Performing such functions as the

Secretary may specify related to management of the State IV-D program

under this chapter including:

(A) Controlling and accounting for the use of Federal, State and

local funds in carrying out the program either directly, through an

auxiliary system or through an interface with State financial

management and expenditure information; and

(B) Maintaining the data necessary to meet Federal reporting

requirements under this chapter in a timely basis as prescribed by the

Office;

(ii) Calculation of Performance Indicators. Enabling the Secretary

to determine the incentive payments and penalty adjustments required by

sections 452(g) and 458 of the Act by:

(A) Using automated processes to:

(1) Maintain the requisite data on State performance for paternity

establishment and child support enforcement activities in the State;

and

(2) Calculate the paternity establishment percentage for the State

for each fiscal year;

(B) Having in place system controls to ensure the completeness, and

reliability of, and ready access to, the data described in paragraph

(b)(2)(i)(A)(1) of this section, and the accuracy of the calculation

described in paragraph (b)(2)(i)(A)(2) of this section; and

(iii) System Controls: Having systems controls (e.g., passwords or

blocking of fields) to ensure strict adherence to the policies

described in Sec. 307.13(a); and

(3) Activities described in the Act that were added by the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L.

104-193, not otherwise addressed in this part.

(c) Collection and Disbursement of Support Payments. To the maximum

extent feasible, assist and facilitate the collection and disbursement

of support payments through the State disbursement unit operated under

section 454B of the Act through the performance of functions which, at

a minimum, include the following:

(1) Transmission of orders and notices to employers and other

debtors for the withholding of income:

(i) Within 2 business days after receipt of notice of income, and

the income source subject to withholding from a court, another State,

an employer, the Federal Parent Locator Service, or another source

recognized by the State; and

(ii) Using uniform formats prescribed by the Secretary;

(2) Ongoing monitoring to promptly identify failures to make timely

payment of support; and

(3) Automatic use of enforcement procedures, including procedures

under section 466(c) of the Act if payments are not timely;

(d) Expedited Administrative Procedures. To the maximum extent

feasible, be used to implement the expedited administrative procedures

required by section 466(c) of the Act.

(e) State case registry. Have a State case registry that meets the

requirements of this paragraph.

(1) Definitions. When used in this paragraph and paragraph (f) of

this section, the following definitions shall apply.

(i) Participant means an individual who owes or is owed a duty of

support, imposed or imposable by law, or with respect to or on behalf

of whom a duty of support is sought to be established, or who is an

individual connected to an order of support or a child support case

being enforced.

(ii) Participant type means the custodial party, non-custodial

parent, putative father, or child, associated with a case or support

order contained in the State or Federal case registry.

(iii) locate request type refers to the purpose of the request for

additional matching services on information sent to the Federal case

registry, for example, a IV-D locate (paternity or support

establishment or support enforcement), parental kidnapping or custody

and visitation.

(iv) locate source type refers to the external sources a locate

submitter desires the information sent to the Federal case registry to

also be matched against.

(2) The State case registry shall contain a record of:

(i) Every IV-D case receiving child support enforcement services

under an approved State plan; and

(ii) Every support order established or modified in the State on or

after October 1, 1998.

(3) Standardized data elements shall be included for each

participant. These data elements shall include:

(i) Names;

(ii) Social security numbers;

(iii) Dates of birth;

(iv) Case identification numbers;

(v) Other uniform identification numbers;

(vi) Data elements required under paragraph (f)(1) of this section

necessary for the operation of the Federal case registry;

(vii) Issuing State of an order; and

(viii) Any other information that the Secretary may require.

(4) The record required under paragraph (e)(2) of this section

shall include information for every case in the State case registry

receiving services under an approved State plan that has a support

order in effect. The information must include:

(i) The amount of monthly (or other frequency) support owed under

the order;

(ii) Other amounts due or overdue under the order including

arrearages,

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interest or late payment penalties and fees;

(iii) Any amounts described in paragraph (e)(4) (i) and (ii) of

this section that have been collected;

(iv) The distribution of such collected amounts;

(v) The birth date and, beginning no later than October 1, 1999,

the name and social security number of any child for whom the order

requires the provision of support; and

(vi) The amount of any lien imposed in accordance with section

466(a)(4) of the Act to enforce the order.

(5) Establish and update, maintain, and regularly monitor case

records in the State case registry for cases receiving services under

the State plan. To ensure information on an established IV-D case is up

to date, the State should regularly update the system to make changes

to the status of a case, the participants of a case, and the data

contained in the case record. This includes the following:

(i) Information on administrative and judicial orders related to

paternity and support;

(ii) Information obtained from comparisons with Federal, State or

local sources of information;

(iii) Information on support collections and distributions; and

(iv) Any other relevant information.

(6) States may link local case registries of support orders through

an automated information network in meeting paragraph (e)(2)(ii) of

this section provided that all other requirements of this paragraph are

met.

(f) Information Comparisons and other Disclosures of Information.

Extract information, at such times and in such standardized format or

formats, as may be required by the Secretary, for purposes of sharing

and comparing with, and receiving information from, other data bases

and information comparison services, to obtain or provide information

necessary to enable the State, other States, the Office or other

Federal agencies to carry out this chapter. As applicable, these

comparisons and disclosures must comply with the requirements of

section 6103 of the Internal Revenue Code of 1986 and the requirements

of section 453 of the Act. The comparisons and sharing of information

include:

(1) Effective October 1, 1998, (or for the child data, not later

than October 1, 1999) furnishing the following information to the

Federal case registry on participants in cases receiving services under

the State plan and in support orders established or modified on or

after October 1, 1998, and providing updates of such information within

five (5) business days of receipt by the IV-D agency of new or changed,

information, including information which would necessitate adding or

removing a Family Violence indicator and notices of the expiration of

support orders:

(i) State Federal Information Processing Standard (FIPS) code and

optionally, county code;

(ii) State case identification number;

(iii) State member identification number;

(iv) Case type (IV-D, non-IV-D);

(v) Social security number and any necessary alternative social

security numbers;

(vi) Name, including first, middle, last name and any necessary

alternative names;

(vii) Sex (optional);

(viii) Date of birth;

(ix) Participant type (custodial party, non-custodial parent,

putative father, child);

(x) Family violence indicator (domestic violence or child abuse);

(xi) Indication of an order;

(xii) Locate request type (optional);

(xiii) Locate source (optional); and

(xiv) Any other information of the Secretary may require.

(2) Requesting or exchanging information with the Federal parent

locator service for the purposes specified in section 453 of the Act;

(3) Exchanging information with State agencies, both within and

outside of the State, administering programs under titles IV-A and XIX

of the Act, as necessary to perform State agency responsibilities under

this chapter and under such programs; and

(4) Exchanging information with other agencies of the State, and

agencies of other States, and interstate information networks, as

necessary and appropriate, to assist the State and other States in

carrying out the purposes of this chapter.

7. Section 307.13 is added to read as follows:

Sec. 307.13 Security and confidentiality for computerized support

enforcement systems in operation after October 1, 1997.

The State IV-D agency shall:

(a) Information integrity and security. Have safeguards on the

integrity, accuracy, completeness of, access to, and use of data in the

computerized support enforcement system. These safeguards shall include

written policies concerning access to data by IV-D agency personnel,

and the sharing of data with other persons to:

(1) Permit access to and use of data to the extent necessary to

carry out the State IV-D program under this chapter; and

(2) Specify the data which may be used for particular IV-D program

purposes, and the personnel permitted access to such data; and

(3) Permit access to and use of data for purposes of exchanging

information with State agencies administering programs under titles IV-

A and XIX of the Act to the extent necessary to carry out State agency

responsibilities under such programs in accordance with section

454A(f)(3) of the Act.

(b) Monitoring of access. Monitor routine access to and use of the

computerized support enforcement system through methods such as audit

trails and feedback mechanisms to guard against, and promptly identify

unauthorized access or use;

(c) Training and information. Have procedures to ensure that all

personnel, including State and local staff and contractors, who may

have access to or be required to use confidential program data in the

computerized support enforcement system are:

(1) Informed of applicable requirements and penalties, including

those in section 6103 of the Internal Revenue Service Code and section

453 of the Act; and

(2) Adequately trained in security procedures; and

(d) Penalties. Have administrative penalties, including dismissal

from employment, for unauthorized access to, disclosure or use of

confidential information.

* * * * *

Sec. 307.15 [Amended]

8. Section 307.15 is amended by replacing the citation

``Sec. 307.10'' with the citations ``Sec. 307.10, or Sec. 307.11'' in

paragraphs (a), (b), introductory text, (b)(1), (b)(5), (b)(7), and

(c); and revising paragraph (b)(2), (b)(9) and (b)(10) to read as

follows:

* * * * *

(b) * * *

(2) The APD must specify how the objectives of the computerized

support enforcement system in Sec. 307.10, or Sec. 307.11 will be

carried out throughout the State; this includes a projection of how the

proposed system will meet the functional requirements of Sec. 307.10,

or Sec. 307.11 and how the single State system will encompass all

political subdivisions in the State by October 1, 1997, or October 1,

2000 respectively.

* * * * *

(9) The APD must contain a proposed budget and schedule of life-

cycle milestones relative to the size, complexity and cost of the

project which at a minimum address requirements analysis, program

design,

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procurement and project management; and, a description of estimated

expenditures by category and amount for:

(i) Items that are eligible for funding at the enhanced matching

rate, and

(ii) items related to developing and operating the system that are

eligible for Federal funding at the applicable matching rate;

(10) The APD must contain an implementation plan and backup

procedures to handle possible failures in system planning, design,

development, installation or enhancement.

(i) These backup procedures must include provision for independent

validation and verification (IV&V) analysis of a State's system

development effort in the case of States:

(A) that do not have in place a statewide automated child support

enforcement system that meets the requirements of the FSA of 1988;

(B) States which fail to meet a critical milestone, as identified

in their APDs;

(C) States which fail to timely and completely submit APD updates;

(D) States whose APD indicates the need for a total system

redesign;

(E) States developing systems under waivers pursuant to section

452(d)(3) of the Social Security Act; or,

(F) States whose system development efforts we determine are at

risk of failure, significant delay, or significant cost overrun.

(ii) Independent validation and verification efforts must be

conducted by an entity that is independent from the State (unless the

State receives an exception from OCSE) and the entity selected must:

(A) Develop a project workplan. The plan must be provided directly

to OCSE at the same time it is given to the State.

(B) Review and make recommendations on both the management of the

project, both State and vendor, and the technical aspects of the

project. The IV&V provider must provide the results of its analysis

directly to OCSE at the same time it reports to the State.

(C) Consult with all stakeholders and assess the user involvement

and buy-in regarding system functionality and the system's ability to

meet program needs.

(D) Conduct an analysis of past project p

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