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56.   Referral of interstate cases to Federal District Court for enforcement actions

Allows federal courts to have subject matter jurisdiction over any civil action certified by HHS as arising under this title. There are no amount in controversy requirements. 42 U.S.C. § 660.

57.   Reporting of payors who are in arrears to credit bureaus

The IV-D agency must develop procedures-subject to certain safeguards-requiring the agency to report delinquent payors to consumer reporting agencies, including the name of the delinquent payor and the amount of overdue support owed. 42 U.S.C. § 666(a)(7)(A).

Safeguarding procedures must include assurance that the non-custodial parent has been afforded all due process including notice and reasonable opportunity to contest the accuracy of the information. The entity that the state reports to must also furnish evidence that it is a consumer reporting agency. 42 U.S.C. § 666(a)(7)(B)

The Consumer Credit Protection Act requires the credit bureau to give the state IV-D credit report if agency certifies to determine if payor has assets to determine amount of support paid.  Paternity must have been established.  In the past, IV-D could only get credit report if back support was due.  41 U.S.C. § 1673.

58.   Expedited process ( required) on child support case (referees, master, commissioners, or administrative process)

State law:  Supreme Court rules for referee issues.

Federal law requires states to have quasi-judicial or administrative systems to expedite the process for obtaining and enforcing a support order. States re requires to have these expedited process systems for paternity establishment. These requirements can be waived--either statewide or in particular political subdivisions of the state-- if the judicial system is able to process cases expeditiously. 42 U.S.C. § 666(a)(2).

Modification of the order must be processed expeditiously. 42 U.S.C. § 666(a)(2).

State tribunals--whether quasi-judicial, or administrative-- must have statewide jurisdiction over the parties. 42 U.S.C. § 666 (c)(2)(B)(i).

Permitting intra-state case transfers from one tribunal to another without the need to re-file the case or re-serve the respondent. 42 U.S.C. § 666(c)(2)(B)(ii).

Requires states to have high volume automated administrative process to:

-respond to interstate requests to enforce support orders;

-increase monthly support payments on arrears;

-search various databases to determine whether information is available regarding a parent   who owes a child support obligation.  42 U.S.C. §§ 666 (14) (A), 666 (14)(B).

Requires administrative procedures (authority by the state to take action without the necessity of obtaining an order from any other judicial or administrative tribunal) on the following actions:

-genetic testing;

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

-requests to all entities in the state (including for-profit, non-profit, and government employers) to               provide information on the employment of the non-payor and grants the state the ability to sanction failure to respond;

-access to information contained in certain records including birth, death, marriage, tax records, property records, occupational and professional licenses, employment security records, administration of public assistance records, motor vehicle records, and corrections records. 42 U.S.C. § 666 (c)(1), 45 C.F.R. § 303.101.

Best Practices:

This would be a good time for states which have obtained a waiver of the expedited process requirement to examine how these waivers are working and consider whether a move to administrative process should be undertaken . There is a growing body of evidence which suggests that the use of administrative process is more user friendly for both petitioners and respondents, and allows states to process cases more quickly. Moreover, states can receive 66 percent federal funding for administrative process systems while judicial and quasi-judicial systems are eligible for little or no federal funding.

Whichever model is chosen, if they do not already have this power, the entities responsible for expedited processes must be given the authority to modify existing support orders.

If necessary, state law must be amended to provide statewide jurisdiction to the entities responsible for expedited process and to give them authority to transfer cases from one tribunal to another.

State law may also need to be amended to require the parties in any paternity or child support proceeding to file---and periodically update---the information listed in the federal law about their current whereabouts and employment status. State law will also need to be modified to allow tribunals to rely on this information when taking action on the case.

Best Practice: Administrative Process

Each state is required to have an expedited judicial or administrative process system for handling paternity and child support cases. However, there is no specific federal requirement that the state's child support agency(ies) have any particular power to expedite the handling of cases by these judicial or administrative bodies. 42 U.S.C. § 666.

42 U.S.C. § 666(c)  requires states to give a variety of new powers to their state child support enforcement (IV-D) agencies, state IV-D agencies must have the power--without the necessity of obtaining an order from any judicial or administrative body-- to

order genetic testing in contested paternity cases.

issue subpoenas for financial and other information needed to establish, modify or enforce  support orders and enforce penalties for failure to comply with such subpoenas.

require all employers and contractors in the state (including for-profit, non-profit and governmental entities) to promptly provide information about the employment, compensation, and benefits of any employee or contractor and to sanction any employer/contractor who fails to respond to such a request for information.

have access to information in state or local government records including tax, property, licensing, employment, motor vehicle, corrections, public assistance, and vital statistics records.

have access to information of private entities such as financial institutions, cable companies and public utilities.

order income-withholding in cases which meet the statutory requirements.

increase monthly support to include payments on arrears.

change the payee of a support order to the appropriate government entity when the family is receiving public assistance or having its payments processed through the new state Collection and Disbursement Unit.

seize assets in cases where arrears are owed by intercepting unemployment or worker's compensation payments (whether periodic or lump sum), confiscating judgments, settlements or lottery winnings, and  attaching financial assets and retirement funds.

impose liens and force the sale of assets in cases where arrears are owed and distribute the proceeds.

In addition to having and using these provisions in its own cases, the state child support agency must recognize and enforce the authority of other state child support agencies to take these actions. The procedures for taking these actions must comply with due process, including the right to notice, an opportunity to contest, and the right to appeal to an administrative or judicial tribunal.

              State laws need to clarify that these other tribunals must accept the actions of the child support agency in these matters. For example, if an order is increased or a payee changed, the court/agency which issued the order must accept this action and change its records accordingly. If a child support agency orders genetic tests, a court/agency hearing the contested paternity case must accept the test results (if they otherwise meet legal requirements) and not order new ones.

              Because of the doctrine of separation of powers (e.g., the executive branch can't tell the judiciary what to do), it will be easier to implement these child support agency requirements into an administrative process system than into a judicial system because both the IV-D agency and the administrative agency are within the executive branch. For this reason, states which rely on judicial or quasi-judicial process to handle paternity and support matters, may want to move their system into administrative process.

              There are important privacy issues which need to be addressed. Giving line workers in a child support office routine access to the kind of personal information contemplated in THE FEDERAL LAW raises concerns about the possible misuse of information. Protocols have to be built into the system to restrict both who can gather the information and who has access to it once it is gathered.

              many of the actions authorized will require that the affected party be given notice and a pre-action opportunity to contest. These due process protections need to be spelled out and carefully implemented.

59.   Requirements that unemployed non-payors seek work

Federal law 42 U.S.C. 666(a)(15) requires IV-D agencies have the ability to request a "seek work order" against any unemployed parent who is in arrears on his/her support and whose child receives public assistance

The Federal Welfare to Work program includes job training for non-custodial parents so that they have income to pay their support, program requirements are outlined in federal law 42 U.S.C. § 603(a)(5)(C)(ii).

60.   State Disbursement Unit (also known as the Central Payment Registry)

The purpose of this component of the automated system is to collect payments and distribute them efficiently.  Under welfare reform, states are mandated to set up an automated state disbursement unit to collect and disburse payments in all cases established after January 1, 1994.

The interesting twist to this decree is that the states are given some leverage in developing the system, but must also follow strict policy. States are given the option of allowing the State Disbursement Unit (SDU) to be operated by either the IV-D agency, a blend of IV-D agencies, or by linking local disbursement units, or by a private contractor.  What the states cannot do is require employers to send payments to more than one place. 42 U.S.C. §§ 654b(a)(2)(A), 654B(a)(3).

Federal law  requires states  to have in place  a centralized child support payment and disbursement unit which is outlined in federal regulation 42 U.S.C. § 654a, 45 CFR 302.85

                   Money collected from income-withholdings must be processed through the Central Payment Registry on IV-D and non-IV-D cases. 42 U.S.C. § § 654(1), 666 (b)(2).

              This unit must handle collection and disbursement for all IV-D cases and for all other cases in which, on or after January 1, 1994, the state  issued an initial child support order which is being enforced through income-withholding. 42 U.S.C. § 654b(a)(1)(A).

              The unit is required to make maximum use of technology to accept, identify and disburse support payments. 42 U.S.C. § 654b(b).

              The unit must make timely response to requests from parents about the payment status of their case. 42 U.S.C. §654b(b)(4).

              When a payment of current support is made and there is sufficient evidence of who the payee is, the payment  is to be disbursed within 2 business days. 42 U.S.C. § 654b(c).

              Arrears may be held for a longet period of time if they are in dispute. 42 U.S.C. § 654b(c)(2).

              The payment and disbursement unit must also have sufficient staff to monitor all IV-D cases and enforce payment in those cases.  45 C.F.R.  § 303.20

Federal Law allows states to opt for a more localized, computer linked system if the Secretary of HHS determines that such system "will not cost more nor take more time to establish or operate than a centralized system". Even if the state operates such a decentralized system employers must be given one and only one location to which collected support is to be sent.

Best Practice:  There should be a  strong interface between the Central Payment Unit and the New Hire Directory

The unit should activate automated enforcement techniques for cases which go into arrears.

The State should coordinate and integrate the functions of the State's Registry of Orders, New Hire Directory, and Collection and Disbursement Unit. Whenever possible, they should be completely integrated into one entity and use completely compatible technology.

Avoid the option of linking up separate entities to create the Collection and Disbursement Unit. This will be expensive in the short run and even more so in the long run as every new technological advance will have to be replicated by each entity for the system to remain as technologically advanced as required by the new law. Moreover, since only one location can be designated as the place for employers to send payments, that location will have to disburse the payments to the other entities making it highly inefficient and unlikely to be able to meet the federal time frame for disbursing payments.

Develop the system in consultation with large and small employers so that the Collection and Disbursement system is compatible with, and sensitive to, the needs of employers.

As the system is being implemented, provide written and oral assistance to employers so that any problems can be worked out early on.

Develop a 24 hour-a-day, seven day-a-week voice response system (with written back up) so that parents needing information about the payment status of their case can obtain it by phone at any time.

61.   State New Hire Reporting

To alleviate some of the problems with child support collections, federal law now requires that each state operate a computer that will track and match child support cases with newly hired employees, so that income can be attached efficiently and to assure that child support reaches families.  In particular, the law:

 Requires each state to establish an automated State Directory of New Hires, established by 10/1/97.      

 Employers and labor organizations must report the name, address and social security number of each  newly hired employee to the state in which the employee works within 20 days of the date that employee is hired. (Special provisions are made for multi-state employers.)

This may be done on a W-4 form or its equivalent. Employers may send the information by mail, electronically, or magnetically.

 The state must enter the information in the New Hire Directory within 5 days of receipt.

 By May 1, 1998, social security numbers from the New Hire Directory will be matched against social security numbers in the IV-D cases in the State Registry of Child Support Orders. If a match is made, information will be provided to the IV-D agency which, within 2 business days of receiving the information, is to issue an income-withholding order to the employer.

 Within 3 business days of receipt, an abstract of the information entered into the state's  New Hire Directory will be sent to  and entered into the Federal New Hire Directory.

 The state's New Hire Directory periodically furnishes the federal New Hire Directory with wage and unemployment compensation information from the state. In that way, obligated parents and information about their employment can be obtained across state lines.

 States will have to choose the agency which will operate the New Hire Directory.  Most states have used either the IV-D agency or the State Employment Security Agency (SESA).

 Employers who fail to comply will be sanctioned by civil penalty of not more than $25 per failure to meet the requirements of this section with respect to a newly hired employee, or not more than $500 if the failure to comply is the result of a conspiracy between the employer and employee not to supply the required report or to supply false information.

Federal Law: 42 U.S.C. § 653a.

Best Practice: Employers seem more comfortable with the SESA model but it is more efficient to have the IV-D agency run the Directory of New Hires. This reduces the need for different agencies to interface their systems and makes the Directory eligible for IV-D funding.

              Employers should be required to report new hire information as quickly as possible. The federal time frame (20 days) is a maximum. Reporting within 2 or 3 days of hire is preferable, because it maximizes the potential for families to collect support.

              To facilitate matching of new hire information with existing child support orders, all child support orders issued in the state should be deemed IV-D orders. Otherwise, non IV-D cases will not be matched in this new system since a matching process with cases in the Registry of Orders is only required in IV-D cases. Eventually, these non-IV-D families will probably apply for services but the case will have arrears and likely be harder to handle. Moreover, federal funding can be maximized if the case is a IV-D case since the cost of enforcement will be a legitimate IV-D expense.

              Given the amount of information and the number of governmental and non-governmental actors involved, strict privacy protections need to be put in place in the New Hire system.  One key question is how long to retain information on employees for whom there is no immediate child support match. The IV-D agency may want to retain all information for future use, while those concerned about the creation of huge, irrelevant data banks will want the information destroyed immediately. ACES suggests deleting  data after 30 days.

62.   Statewide jurisdiction

Jurisdiction refers to the authority of a court or tribunal to make decisions and have them bind parties.  If a court did not have proper jurisdiction over a party or subject matter, then whatever that court found or ordered would not be binding.  Federal legislation requires that states establish procedures to deal with jurisdictional questions.  In particular, the states are required to develop procedures which:

 -the state IV-D agency and any administrative or judicial tribunal which hears child support and paternity cases exert statewide jurisdiction over the parties; and

-the Case must be transferred between local jurisdictions without the need for any additional filing by the petitioner or service of process upon the respondent to retain jurisdiction over the parties

Federal law 42 U.S.C. §§ 666 (c)(2)(B)(i), (ii).

63.   Subpoenas

Federal law requires states to have administrative process to issue subpoenas for financial and other information needed to establish, modify, or enforce support orders and enforce penalties for failure to comply with such subpoenas. 42 U.S.C. § 666(c)(1).

All courts have subpoena power.

64.   Suspension/ revocation of drivers, professional, and occupational licenses

States are required to have procedures requiring that the social security number of any applicant for a professional license, driver’s license, occupational license, recreational license, or marriage license to be recorded on the application. 42 U.S.C. § 666(a)(13).

States must have procedures in place under which the state has authority to withhold or suspend, or restrict the use of professional, occupational, sporting, recreational and driver’s licenses. 42 U.S.C. § 666 (a)(16).                      

Best Practices: States should develop license suspensions systems which properly interface the

state's licensing bodies with the new State Registry of Child Support Orders and the new State Disbursement Unit. A license suspension program will only be effective if it has the capacity to act quickly whenever there is a default in payment. Moreover, the licensing agencies will have to be able to rely on the data in the Registry of Orders and the Disbursement Unit to verify the existence of an order and any arrears owed under it.

65.   Technical Assistance to States

1% of federal share of collections is appropriated for technical assistance, projects, research and demonstrations. Federal law: 42 U.S.C. § 655(a)(5)(C)(ii).

66.   Use of investigative techniques to determine payor's assets

                 For purposes of establishing paternity, establishing, setting the amount of, modifying, or enforcing child support orders, federal law allows the Federal Parent Locator to be used to determine the identity and location of a parent including the individual’s social security number, most recent address, and the name, address  and employer identification number of the payor's place of employment. 42 U.S.C. § 653(A)(2)..

                See Location of Absent parents

IRS Project 1099. Project 1099 is a cooperative effort involving the State IV-D agency, OCSE, and the Internal Revenue Service (IRS). This project provides information to IV-D agencies to assist in their efforts to locate non-custodial parents for the purpose of establishing and enforcing child support obligations. If there is a match, the IRS may be able to provide the following information:

·         the address of the non-custodial parent;

·         the address of the submitting institution (i.e., bank, brokerage house, State unemployment agency, and employer);

·         wage and salary payments made to the non-custodial parent; and asset information reported by financial institutions and State agencies. Office of Child Support Enforcement, U.S. Department of Health and Human Services, Action Transmittal (AT- 91-04) (1991).

Financial Institution Data Match (FIDM). PRWORA mandated that all States develop a Financial Institution Data Match (FIDM) program. Under the FIDM program, each financial institution doing business in a State must match its list of account holders against the list of delinquent support obligors maintained by the State IV-D agency. This match can provide important information on the assets held by support obligors, as well as provide address information on the obligors successfully matched. 42 U.S.C. § 666(a)(17) (Supp. V 1999).

Multi-state Financial Institution Data Match (MSFIDM). OCSE has established, as a part of the FPLS, a Multi-state Financial Institution Data Match (MSFIDM) program.] Under the program, any financial institution doing business in two or more States may elect to report directly to OCSE rather than to each individual State in which it does business. Working from the data submitted for the Federal Income Tax Refund Offset program, OCSE provides information on delinquent obligors, which the financial institutions match against their accounts. Any matches are returned to OCSE, which then shares the information with the State submitting the obligor's name and Social Security Number. This program can be very useful in locating assets 42 U.S.C. § 652(l) (Supp. V 1999) (allows the Secretary of the U.S. Department of Health and Human Services to assist with FIDM for multi-state financial institutions

Additionally, the agency can access State and local government sources, including vital statistics records, State tax files, property records, motor vehicle administration files, and law enforcement records. States can obtain data from the records of private entities, such as public utilities and cable television companies. They also may seek information held by financial institutions—including the account holder’s location and asset data—through the Financial Institution Data Match,42 U.S.C. § 666(a)(17)] or the use of administrative subpoenas

67.   Visitation/Access

State access and visitation programs to be funded  at $100,000 or lessor of 90% of access program expenditures or formula allotment. 42 U.S.C. § 669b. Other visitation/access laws are controlled by states.

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