[Federal Register: December 28, 2004 (Volume 69, Number 248)]
[Rules and Regulations]               
[Page 77659-77661]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de04-14]                         

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 303

 
Child Support Enforcement Program; Reasonable Quantitative 
Standard for Review and Adjustment of Child Support Orders

AGENCY: Office of Child Support Enforcement (OCSE), Health and Human 
Services (HHS).

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule revises existing regulations on review 
and adjustment of child support orders to reinstate a rule which was in 
place since 1993. The change permits States to once again use 
reasonable quantitative standards in adjusting an existing child 
support award amount after conducting a review of the order, regardless 
of the method of review used.

DATES: These regulations are effective December 28, 2004. Consideration 
will be given to comments received February 28, 2005.

ADDRESSES: Send comments to: Office of Child Support Enforcement, 
Administration for Children and Families, 370 L'Enfant Promenade, SW., 
4th floor, Washington, DC 20447. Attention: Director, Division of 
Policy, Mail Stop: OCSE/DP. Comments will be available for public 
inspection Monday through Friday 8:30 a.m. to 5 p.m. on the 4th floor 
of the Department's offices at the above address. To download an 
electronic version of the rule, you may access http://www.regulations.gov.
 You may also transmit written comments 

electronically via the Internet at http://www.regulations.acf.hhs.gov.


FOR FURTHER INFORMATION CONTACT: Elizabeth Matheson, Division of 
Policy, OCSE, 202-401-9386, e-mail: ematheson@acf.hhs.gov. Deaf and 
hearing-impaired individuals may call the Federal Dual Party Relay 
Service at 1-800-877-8339 between 8 a.m. and 7 p.m. eastern time.

SUPPLEMENTARY INFORMATION:

Statutory Authority

    The provisions of this regulation pertaining to review and 
adjustment of child support orders are published under the authority 
granted to the Secretary by section 466(a) of the Social Security Act 
(the Act), 42 U.S.C. 666(a). Section 466(a) requires each State to have 
in effect laws requiring the use of specified procedures, consistent 
with this section of the Act and regulations of the Secretary, to 
increase the effectiveness of the Child Support Enforcement program. 
Review and adjustment of support orders at section 466(a)(10) of the 
Act is one of the required procedures.

Justification for Interim Final Rule

    The Administrative Procedure Act requirements for notice of 
proposed rulemaking do not apply to rules when the agency finds that 
notice is impracticable, unnecessary or contrary to the public 
interest. We find proposed rulemaking unnecessary and contrary to the 
public interest, because the rule is not imposing new requirements or 
burdens on States, but is removing an administrative requirement and 
burden on agencies and families that was added to the technical 
corrections final regulation published in the Federal Register on May 
12, 2003 (68 FR 25293). Without opportunity for public comment, that 
regulation implemented a substantive change to prior policy that was 
not warranted under any intervening amendment to the relevant statute. 
The change required States to adjust an order for support after a 
guidelines review, regardless of the amount by which the existing order 
is found to deviate from the State's support guidelines. The statute, 
as in effect before and after this change, provided that such 
adjustments were only required ``if appropriate.'' Prior to that 
regulation, since 1993, States could apply a reasonable quantitative 
standard for adjustment of an order regardless of the method of their 
review of the order. This regulation reinstates the prior rule with 
opportunity for public comment. Because the regulatory change published 
on May 12 did not allow for public comment, and this rule merely 
reinstates the prior regulation which was issued pursuant to notice and 
comment, advance notice is unnecessary.

Background

1992 Regulations

    Under the authority of sections 466(a)(10) and 1102 of the Act, 
OCSE published regulations on review and adjustment of child support 
orders in 1992. They were effective in October, 1993. In the preamble 
to that regulation, the basis for seeking an adjustment to an order was 
described as paraphrased below.
    In the 1992 regulation, 45 CFR 303.8(d) specified the requirements 
States had to meet in seeking adjustments to child support orders in 
IV-D cases. Paragraph (d)(1) required that an inconsistency between the 
existent child support order amount and the amount of child support 
which resulted from application of the State guidelines must be an 
adequate basis, under State law, for petitioning for an adjustment of 
an order in a IV-D case, whether or not the order was established using 
guidelines.
    Paragraph (d)(2) of the 1992 regulation provided for an exception 
that allowed States to establish a quantitative standard based upon 
either a fixed dollar amount or percentage, or both, as a basis for 
determining whether an inconsistency is adequate grounds for 
petitioning for adjustment of the order. That quantitative standard, or 
threshold, was to be used as a basis for determining whether the 
inconsistency was sufficient to justify proceeding with a petition or 
motion for adjustment of an award, not as a criterion for deciding 
whether to review. Threshold standards were not needed if States 
adjusted all orders regardless of the degree of inconsistency with the 
guidelines. However, thresholds could serve to prevent inundating the 
adjustment process with cases in which the variance was minimal between 
the current order amount and the amount that would result from an 
application of the guidelines.
    The quantitative standard permitted by the 1992 regulation was 
meant to be used as a post-review decision-making tool. It was not 
intended to restrict the use of guidelines in setting and modifying 
support nor to limit the authority of the court or other authority to 
find, in a particular case, that an award based on guidelines was 
unfair or inappropriate. In making any adjustment to the amount of 
support, the judicial or administrative process still had to apply the 
State guidelines. Under regulations at 45 CFR 302.56, Guidelines for 
setting child support awards, the child support award calculated to be 
due under the guidelines was rebuttably presumed to be the correct 
amount of support to be paid.

1997 Action Transmittal

    OCSE issued policy on review and adjustment of orders in OCSE-AT-
97-10 on July 30, 1997, in response to

[[Page 77660]]

provisions of Pub. L. 104-193, the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996, relating to review and 
adjustment. In that action transmittal, OCSE continued to permit States 
to use a reasonable quantitative standard for determining whether or 
not to adjust an order. Pertinent questions and answers from the action 
transmittal are summarized below.
    Q. 4. Does the requirement to ``adjust the order in accordance with 
the guidelines * * * if the amount * * * differs'' preclude a State law 
providing a threshold deviation of, for example, 15% before an 
adjustment is deemed appropriate?
    A. No. Section 466(a)(10)(A)(i)(I) of the Act, as amended by 
section 351 of Pub. L. 104-193, does not preclude a State law from 
providing a threshold deviation before an adjustment of an order is 
appropriate. First of all, according to section 466(a)(10)(A)(i) of the 
Act, the State must take ``into account the best interests of the child 
involved.'' A small reduction in support, or even an increase, because 
of a deviation in the guidelines' amount might not be in the child's 
best interests. Secondly, statute and regulations allow the State to 
adjust the order, or determine that there should be no adjustment, if 
appropriate, in accordance with the State's guidelines for setting 
child support awards. Given the latitude States have to apply cost-of-
living adjustments, or to set thresholds if they use automated methods, 
it was stated that there was similar latitude for States to determine 
that small deviations are ``inappropriate'' for adjustment.
    Given the complexity of the most States'' review and adjustment 
process, as well as State child support guidelines, it may not be in 
the child's best interest for parents, child support agencies, and 
courts to wrangle over very small amounts of money. The application of 
child support guidelines often involves far more than a simple 
calculation of a portion of a parent's income. Both the review process 
and the adjustment process are time-consuming and involve multiple 
parties in most States. Despite authority in the Federal statute, very 
few States have automated review processes in place and about half the 
States have court-based systems for adjusting orders.
    Q. 7. Under section 466(a)(10)(A)(i)(I) of the Act, does ``if 
appropriate'' mean that if a State reviews a case under the 3-year 
cycle provision using State guidelines, it can determine not to adjust 
the order if the inconsistency between the current order and the 
guideline's amount does not meet the ``reasonable quantitative standard 
established by the State''?
    A. Yes. Under section 466(a)(10)(A)(i)(I) of the Act, the language 
``if appropriate, adjust the order'' is consistent with regulations 
which said that, if a State reviews a case under the 3-year cycle 
provision using State guidelines, it can determine not to adjust the 
order if the inconsistency between the current order and the guideline 
amount does not meet the ``reasonable quantitative standard established 
by the State''. Under the regulations, the State could establish a 
reasonable quantitative standard based upon either a fixed dollar 
amount or percentage, or both, as a basis for determining whether an 
inconsistency between the existent child support award amount and the 
amount of support which resulted from application of the guidelines was 
adequate grounds for petitioning for adjustment of the order. 
Therefore, a reasonable quantitative standard could be used to 
determine not to adjust the order.
    Q. 8. Is it only under section 466(a)(10)(A)(i)(III) that a State 
can establish a standard for determining when an adjustment is 
warranted?
    A. No. Under both sections 466(a)(10)(A)(i)(I) (guidelines review) 
and (III) (automated review), as amended by section 351 of Pub. L. 104-
193, it is appropriate for the State to use its threshold standard to 
determine if an adjustment is appropriate.
    Q. 10. Under section 466(a)(10)(A)(ii) of the Act does ``if 
appropriate'' mean that a State can determine not to (re)adjust the 
order if the inconsistency between current and guideline support does 
not merit an adjustment based on the ``reasonable quantitative standard 
established by the State''?
    A. Yes. Under section 466(a)(10)(A)(ii) of the Act (opportunity to 
contest an adjustment), a State can determine not to (re)adjust the 
order if the inconsistency between current and guideline support does 
not merit an adjustment based on the reasonable quantitative standard 
established by the State.

Provisions of the Regulation

    In OCSE-AT-97-10, OCSE said it was working on a regulation to 
eliminate inconsistencies between title IV-D regulations and Pub. L. 
104-193. That regulation was published in the Federal Register on May 
12, 2003. (68 FR 25293). That regulation did not retain the regulatory 
policy described above. Rather, it limited use of the reasonable 
quantitative standard to adjustments in cases that were reviewed by 
automated methods. In the preamble to the May 12 rule, we said: ``We 
are revising paragraph (c) to clarify that States may use a 
quantitative standard only in cases involving the use of automated 
methods in accordance with section 466(a)(10)(A)(i)(III) of the Act. 
That section alone refers to orders being ``eligible for adjustment,'' 
recognizing there might be some standard set to determine eligibility 
for adjustment. The other two methods of review (guidelines and cost-
of-living) do not contain this language. Sections 303.8(a) and (d) 
through (f) remain as published in the interim final rule.''
    The change to paragraph (c) in the May 12 final rule was not 
required by any change in the underlying statute, and it clearly was 
not mandated by Pub. L. 104-193, as the statute was interpreted in 
OCSE-AT-97-10. Nor should the change have been issued in a final rule 
without opportunity for comment. The interim final regulation in 
today's Federal Register reinstates the original rule with opportunity 
for public comment.
    Under this interim rule a State may establish a reasonable 
quantitative standard, based on either a fixed dollar amount or 
percentage, or both, as a basis for determining whether an 
inconsistency between the existent child support award amount and the 
amount of support determined as a result of a review is adequate 
grounds for petitioning for adjustment of the order, regardless of the 
method of review. This interim final rule allows States to manage their 
resources and refrain from unreasonably small order adjustments that 
may be costly and perhaps involve changes to States' automated systems. 
Most States' review and adjustment process, as well as State child 
support guidelines, are complex and lengthy. The application of child 
support guidelines often involves far more than a simple calculation of 
a portion of a parent's income, including decisions with respect to 
child care, health insurance, and extraordinary medical expenses. Both 
the review process and the adjustment process are time-consuming and 
involve multiple parties in most states. Despite authority in the 
Federal statute for automated review and adjustment and cost-of-living 
increases, very few States have these automated review processes in 
place and about half the States have court-based, rather than 
administrative, systems for adjusting orders.
    The rule minimizes the burden, stress and uncertainty families 
would face in opening up the orders to change despite little 
anticipated gain. In addition, the rule reduces complex agency and

[[Page 77661]]

tribunal record-keeping that could lead to errors and lessens the 
burden on employers who would need to respond to constantly adjusting 
income withholding orders to address small differences in the amount 
withheld.
    It is important to note that Sec.  303.8 continues to require 
States to review child support orders at least every 3 years, upon 
request of a parent in any case, and upon request of the State if there 
is an assignment of support rights under title IV-A of the Act, and 
make adjustments, if appropriate, if the reasonable quantitative 
standard for an adjustment is met. Further, under paragraph (b)(5) of 
this section, a State must have procedures under which a parent or 
other person who has standing may request a review and adjustment 
outside the regular 3-year (or shorter) cycle, and if the requesting 
party demonstrates a substantial change in circumstance, the State must 
adjust the order in accordance with its support guidelines.

Paperwork Reduction Act of 1995

    No new information collection requirements are imposed by these 
regulations, nor are any existing requirements changed as a result of 
their promulgation. Therefore, the requirements of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507(d)), regarding reporting and 
record keeping, do not apply.

Regulatory Flexibility Analysis

    The Secretary certifies, under 5 U.S.C. 605(b), as enacted by the 
Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not 
result in a significant impact on a substantial number of small 
entities. The primary impact is on State governments. State governments 
are not considered small entities under the Act.

Regulatory Impact Analysis

    Executive Order 12866 requires that regulations be reviewed 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 because there 
is broad agreement among state IV-D agencies that removal of the 
burden, and reinstatement of prior policy, is necessary. Individuals, 
either those owing or those entitled to receive child support, will not 
be harmed, as only small adjustments (either up or down) in the amount 
of the child support obligation will be avoided. This regulation is 
considered a ``significant regulatory action'' under 3f of the 
Executive Order, and therefore has been reviewed by the Office of 
Management and Budget.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that a covered agency prepare a budgetary impact statement before 
promulgating a rule that includes any 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.
    If a covered agency must prepare a budgetary impact statement, 
section 205 further requires that it select the most cost-effective and 
least burdensome alternative that achieves the objectives of the rule 
and is consistent with the statutory requirements. In addition, section 
203 requires a plan for informing and advising any small governments 
that may be significantly or uniquely impacted by the rule.
    We have determined that the interim final rule will not 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 governments.

Congressional Review

    This regulation is not a major rule as defined in 5 U.S.C. chapter 
8.

Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal agencies to determine whether a proposed 
policy or regulations may affect family well-being. If the agency's 
determination is affirmative, then the agency must prepare an impact 
assessment addressing seven criteria specified in the law. These 
regulations will not have an impact on family well-being as defined in 
the legislation.

Executive Order 13132

    Executive Order 13132 on Federalism applies to policies that have 
Federalism implications, defined as ``regulations, legislative comments 
or proposed legislation, and other policy statements or actions that 
have substantial direct effects on the States, or on the distributions 
of power and responsibilities among the various levels of government''. 
This rule does not have Federalism implications for State or local 
governments as defined in the Executive Order.

List of Subjects in 45 CFR Part 303

    Child support, Grant programs--social programs.

(Catalog of Federal Domestic Assistance Programs No. 93.563, Child 
Support Enforcement Program.)


    Dated: May 25, 2004.
Wade F. Horn,
Assistant Secretary for Children and Families.
    Date Approved: September 29, 2004.
 Tommy G. Thompson,
Secretary of Health and Human Services.

0
For the reasons discussed above, title 45 CFR chapter III is amended as 
follows:

PART 303--STANDARDS FOR PROGRAM OPERATIONS

0
1. The authority citation for part 303 continues to read as follows:


    Authority: 42 U.S.C. 651 through 658, 660, 663, 664, 666, 667, 
1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p) and 1396(k).


Sec.  303.8  [Amended]

0
2. In Sec.  303.8, paragraph (c) is amended by removing ``using 
automated methods under paragraph (b)(1)(iii) of this section''.

[FR Doc. 04-28410 Filed 12-27-04; 8:45 am]

BILLING CODE 4184-01-P