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104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-250
_______________________________________________________________________


 
                 2-YEAR EXTENSION OF AUTOMATION DEADLINE

                                _______


 September 19, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


    Mr. Archer, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2288]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 2288) to amend part D of title IV of the Social 
Security Act to extend for 2 years the deadline by which States 
are required to have in effect an automated data processing and 
information retrieval system for use in the administration of 
State plans for child and spousal support, having considered 
the same, report favorably thereon without amendment and 
recommend that the bill do pass.

                            C O N T E N T S

                                                                   Page
I. Introduction..................................................     2
        A. Purpose and Scope.....................................     2
        B. Background and Need for Legislation...................     2
        C. Legislative History...................................     3
II. Explanation of Provisions....................................     4
        Section 1. 2-Year Extension of Automation Deadline.......     4
III. Votes of the Committee......................................     4
IV. Budget Effects of the Bill...................................     5
        A. Committee Estimate of Budgetary Effects...............     5
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures.........................................     5
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................     5
V. Other Matters Required to be Discussed Under the Rules of the 
  House..........................................................     6
        A. Committee Oversight Findings and Recommendations......     6
        B. Summary of Findings and Recommendations of the 
            Government Reform and Oversight Committee............     6
        C. Inflationary Impact Statement.........................     6
VI. Changes in Existing Law Made by the Bill, as Reported........     6

                            I. Introduction

                          a. purpose and scope

    The Committee bill extends the date by which states must 
implement automated data system requirements enacted by the 
Family Support Act of 1988 from October 1, 1995 to October 1, 
1997.

                 b. background and need for legislation

    There is nearly universal agreement that the nation's child 
support enforcement system is less effective than it could and 
should be. The Clinton Administration has recently calculated 
that over $30 billion in potential child support goes unpaid 
each year. If a substantial portion of this money were paid, 
taxpayers would spend less on welfare, the need for elaborate 
and expensive government programs to encourage payment of child 
support would be reduced, and most important, millions of 
children would enjoy an increase in their standard of living 
and many would escape poverty.
    One of the most important elements in an improved child 
support system is automatic data processing. The major overhaul 
of Federal child support laws passed by Congress in the Family 
Support Act of 1988 contained extensive requirements that 
states had to meet in establishing automatic data processing 
systems. More specifically, the state systems had to have the 
capability to: (a) control and monitor the major factors in 
support collection and paternity establishment, (b) provide 
coordination with records of the state Aid to Families and 
Dependent Child program, (c) provide security against 
unauthorized access, (d) facilitate income withholding and 
other collection procedures, and (e) provide management 
information on all child support cases being handled by the 
state IV-D program.
    The Committee on Ways and Means, which played a lead role 
in the development of these data processing requirements, 
realized at the Family Support Act passed that the requirements 
would be difficult to implement. In 1988, few states had 
automated even a significant portion of their child support 
program. To make certain that the Department of Health and 
Human Services (HHS), the private contractors that would help 
states design and implement their systems, and the states 
themselves moved aggressively on the data processing 
requirements, Congress provided states with 90 percent federal 
funding and established October 1, 1995 as the deadline for 
completing the systems.
    Although every state has an approved plan for implementing 
a system that meets all the requirements of the 1988 
legislation, to date only one state has actually finished their 
system and received final approval from HHS. HHS estimates that 
even six months after the deadline, only 18 states will be able 
to meet all the requirements of the 1988 law.
    An informal survey of states, HHS officials, and outside 
observers reveals several factors that contributed to the 
difficulty states have experienced in meeting the October 1, 
1995 deadline. Perhaps the single most important factor was 
that HHS did not publish final regulations that provided 
detailed specifications for the data systems until October 14, 
1992, 4 years after the legislation was signed by President 
Reagan. Thus, states were not given definitive specifications 
for their data systems until 3 years before the systems had to 
be in place and operating. Until the specifications were 
issued, states could neither finalize planning of their systems 
nor sign final agreements with contractors to begin 
implementation. Nearly everyone seems to agree that the 4 year 
lag in issuing regulations was a major cause of states failing 
to meet the October 1, 1995 deadline.
    Other factors mentioned as having contributed to the delay 
were a shortage of technical assistance from HHS, some delays 
in approval of the advance planning documents that states had 
to have approved before they could begin implementing their 
systems, a shortage of qualified vendors with the expertise 
necessary to help states design and implement effective data 
processing systems, and lack of staff in the state child 
support offices who had extensive experience with data systems.
    Given these barriers to timely implementation, many of 
which were beyond the control of the states, the Committee 
believes it would be unfair to impose financial penalties on 
states for failing to meet the October 1, 1995 deadline. All 
the states have a plan in place and are working diligently 
toward implementation of their system. Thus, the Committee, on 
a bipartisan basis, has decided that a 2-year extension of the 
deadline is warranted.
    Although this legislation does not extend the 90 percent 
federal money, it is the intention of the Subcommittee to 
revisit this issue in the context of welfare reform later this 
Fall.

                         c. legislative history

Committee bill

    H.R. 2288 was introduced on September 8, 1995, by Mr. Shaw, 
Chairman of the Subcommittee on Human Resources of the 
Committee on Ways and Means, Mr. Ford, the ranking minority 
member of the Subcommittee, and all Republican and Democrat 
members of the Subcommittee. The bill was marked up by the full 
Committee on Ways and Means on September 12, 1995, at which 
time the Committee ordered it favorably reported by voice vote 
with a quorum present.

Legislative hearings

    The Subcommittee on Human Resources of the Committee on 
Ways and Means held child support enforcement hearings on 
February 6 and June 13, 1995. In addition, a number of 
witnesses during the welfare reform hearings conducted during 
January and February of 1995 made comments or recommendations 
about child support enforcement.
    The Subcommittee heard testimony from Representative Nancy 
Johnson of Connecticut, Representative Barbara Kennelly of 
Connecticut, Representative Henry Hyde of Illinois, 
Representative Marge Roukema of New Jersey, Representative 
Constance Morella of Maryland, Assistant Secretary for Children 
and Families Mary Jo Bane, Assistant Secretary for Planning and 
Evaluation, and Paul Legler from Health and Human Services, and 
others familiar with this issue.
    Many of those who testified this year joined witnesses 
heard by the Committee in previous years in alerting the 
members of the Committee to the problems states were having in 
meeting the October 1, 1995 deadline for automatic data 
processing requirements. Many predicted that very few states 
would meet the deadline.

                     II. Explanation of Provisions

           Section 1. 2-Year Extension of Automation Deadline

                              Present law

    States are now required to complete implementation of 
automatic data processing systems that meet five major federal 
requirements as outlined in section 454(16) of the Social 
Security Act. In order to avoid financial penalties and 
mandatory correction procedures, states must have their systems 
in place by October 1, 1995.

                        Explanation of provision

    The Committee bill extends the deadline for automated data 
systems from October 1, 1995 to October 1, 1997. This change 
gives states an additional 2 years to complete their data 
processing systems.

                           Reasons for change

    To date, only one state has met the data processing 
requirements. HHS has informed the Committee that even 6 months 
after the October 1 deadline, only 18 states will have met the 
requirement. Clearly, there is a problem if only one state is 
able to meet a federal deadline, and if only 18 states can meet 
the requirements even 6 months after the deadline. An informal 
survey of states, HHS officials and interested outside sources 
by Committee staff revealed several reasons for the difficulty 
states are having in meeting the deadline. The most important 
seems to be the fact that final regulations on the data systems 
were not published by HHS until 4 years after the legislation 
passed. Until the final regulations were published, states 
could not begin to implement their systems. Other factors 
mentioned as barriers to implementation were lack of technical 
assistance from HHS, difficulty in finding experienced and 
qualified contractors, and shortage of experienced staff at the 
state level.

                      III. Votes of the Committee

    In compliance with clause 2(l)(2)(B) of rule XI of the 
Rules of the House of Representatives, the following statement 
was made concerning the vote of the Committee in its 
consideration of the bill, H.R. 2288.

                       motion to report the bill

    The bill, H.R. 2288, as introduced, was ordered favorably 
reported by voice vote on September 12, 1995, with a quorum 
present.

                     IV. Budget Effects of the Bill

               a. committee estimate of budgetary effects

    In compliance with clause 7(a) of rule XIII of the Rules of 
the House of Representatives, the following statement is made:
    The Committee agrees with the estimate prepared by the 
Congressional Budget Office (CBO) which is included below.

    b. statement regarding new budget authority and tax expenditures

    In compliance with clause 2(l)(3)(B) of rule XI of the 
Rules of the House of Representatives, the Committee states 
that the Committee bill results in no new budget authority and 
no new tax expenditures.

      c. cost estimate prepared by the congressional budget office

    In compliance with clause 2(l)(3)(C) of rule XI of the 
Rules of the House of Representatives requiring a cost estimate 
prepared by the Congressional Budget Office (CBO), the 
following report prepared by CBO is provided:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 15, 1995
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 2288 as ordered reported by the House Committee 
on Ways and Means on September 12, 1995. CBO estimates that 
enactment of H.R. 2288 would have no effect on the federal 
budget and no impact on the budgets of state and local 
governments. Because enactment of H.R. 2288 would not affect 
direct spending or receipts, pay-as-you-go procedures would not 
apply.
    H.R. 2288 would amend the Social Security Act to extend for 
two years the October 1, 1995 deadline by which states are 
required to have in effect an automated data processing and 
information retrieval (ADP) system for use in the 
administration of the child support enforcement program. 
Because the bill would not extend the 90 percent enhanced 
federal match for ADP systems which automatically expires 
September 30, 1995, the legislation would simply ensure that no 
financial penalty would be applied to a state that had not 
finished its ADP system by October 1, 1995. Because CBO assumes 
that no such penalties would be applied under current law, we 
estimate that the bill would have no effect on the federal 
budget.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sheila Dacey.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

 V. Other Matters Required To be Discussed Under the Rules of the House

          a. committee oversight findings and recommendations

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee on Ways 
and Means reports that the need for this legislation was 
confirmed by the oversight hearings of the Subcommittee on 
Human Resources.
    In the 104th Congress, the Subcommittee on Human Resources 
of the Committee on Ways and Means held a total of two hearings 
on child support enforcement as follows:
    On February 6, 1995, the Subcommittee held a hearing on 
child support enforcement. This hearing focused on how to 
increase the number of non-paying parents who are located as 
well as how to increase the number of paternities established 
and the amount of child support that is paid by non-custodial 
parents.
    On June 13, 1995, the Subcommittee held a hearing on child 
support enforcement and supplemental security income. This 
hearing included financing and state incentive payments, cost 
recovery in the non-AFDC program, distribution of collections, 
new hire reporting, privatization, paternity establishment, and 
automatic data processing.
    In addition, a number of witnesses during the welfare 
reform hearings conducted during January and February of 1995 
made comments or recommendations about child support 
enforcement, alerting the members of the Committee to the 
problems states were having in meeting the October 1, 1995 
deadline for automatic data processing requirements.

b. summary of findings and recommendations of the government reform and 
                          oversight committee

    In compliance with clause 2(l)(3)(D) of rule XI of the 
Rules of the House of Representatives, the Committee states 
that no oversight findings or recommendations have been 
submitted to the Committee on Government Reform and Oversight 
regarding the subject of the bill.

                    c. inflationary impact statement

    In compliance with clause 2(l)(4) of rule XI of the Rules 
of the House of Representatives, the Committee states that the 
provisions of the bill not to have an overall inflationary 
impact on the economy.

       VI. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                  TITLE IV OF THE SOCIAL SECURITY ACT

TITLE IV--GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES WITH 
                CHILDREN AND FOR CHILD-WELFARE SERVICES

          * * * * * * *

          Part D--Child Support and Establishment of Paternity

          * * * * * * *

                        DUTIES OF THE SECRETARY

  Sec. 452. (a) * * *
          * * * * * * *
  (d)(1) Except as provided in paragraph (3), the Secretary 
shall not approve the initial and annually updated advance 
automated data processing planning document, referred to in 
section 454(16), unless he finds that such document, when 
implemented, will generally carry out the objectives of the 
management system referred to in such subsection, and such 
document
          (A) provides for the conduct of, and reflects the 
        results of, requirements analysis studies, which 
        include consideration of the program mission, 
        functions, organization, services, constraints, and 
        current support, of, in, or relating to, such system,
          (B) contains a description of the proposed management 
        system referred to in section [455(a)(1)(B)] 454(16), 
        including a description of information flows, input 
        data, and output reports and uses,
          * * * * * * *
  (2)(A) The Secretary shall through the separate 
organizational unit established pursuant to subsection (a), on 
a continuing basis, review, assess, and inspect the planning, 
design, and operation of, management information systems 
referred to in section [455(a)(1)(B)] 454(16), with a view to 
determining whether, and to what extent, such systems meet and 
continue to meet requirements imposed under paragraph (1) and 
the conditions specified under section 454(16).
  (B) If the Secretary finds with respect to any statewide 
management information system referred to in section 
[455(a)(1)(B)] 454(16) that there is a failure substantially to 
comply with criteria, requirements, and other undertakings, 
prescribed by the advance automated data processing planning 
document theretofore approved by the Secretary with respect to 
such system, then the Secretary shall suspend his approval of 
such document until there is no longer any such failure of such 
system to comply with such criteria, requirements, and other 
undertakings so prescribed.
          * * * * * * *
  (e) The Secretary shall provide such technical assistance to 
States as he determines necessary to assist States to plan, 
design, develop, or install and provide for the security of, 
the management information systems referred to in section 
[455(a)(1)(B)] 454(16).
          * * * * * * *

                STATE PLAN FOR CHILD AND SPOUSAL SUPPORT

  Sec. 454. A State plan for child and spousal support must--
          (1) provide that it shall be in effect in all 
        political subdivisions of the State;
          * * * * * * *
          (24) provide that if the State, as of the date of the 
        enactment of this paragraph, does not have in effect an 
        automated data processing and information retrieval 
        system meeting all of the requirements of paragraph 
        (16), the State--
                  (A) will submit to the Secretary by October 
                1, 1991, for review and approval by the 
                Secretary within 9 months after submittal an 
                advance automated data processing planning 
                document of the type referred to in such 
                paragraph; and
                  (B) will have in effect by October 1, [1995] 
                1997, an operational automated data processing 
                and information retrieval system, meeting all 
                the requirements of that paragraph, which has 
                been approved by the Secretary.
The State may allow the jurisdiction which makes the collection 
involved to retain any application fee under paragraph (6)(B) 
or any late payment fee under paragraph (21).
          * * * * * * *