[Extensions of Remarks]
[Pages E945-E946]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

THE CHILD SUPPORT REINVESTMENT ACT OF 2002

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HON. ROBERT T. MATSUI

of california

in the house of representatives

Tuesday, June 4, 2002

Mr. MATSUI. Mr. Speaker, today I am offering a bill to modify the way
in which penalties are imposed on states that are attempting to comply
with child support system computer automation requirements.
Child support automation penalties provided an effective and
necessary impetus for my home state of California to make important
changes in their child support program. But, now these penalties have
become an obstacle to meeting the objectives of the revamped system and
should be modified.
The Child Support Reinvestment Act would do two important things.
First, it would change the base year that the penalty is calculated on.
This would remove the disincentive for states to increase investments
in their child support program because these increases would no longer
be reflected in the calculation of the penalty. Second, the bill would
allow increasing amounts of these penalties to be reinvested in the
child support program if the state increases spending by specified
percentages.
My bill is supported by the National Women's Law Center and the
Center for Law and Social Policy. In addition, ACES, the Association
for Children for Enforcement Support, and the California Chapter of the
National Organization for Women is supporting this legislation. Mr.
Speaker, I would like to include the letters of support from these
organizations in the record.
California has made significant strides and is on target to have a
fully automated child support system in 2005. They have also invested
considerable money in improving collections and customer service. Last
year, California collected $2 billion in child support, sending two-
thirds of this money directly to families. This progress, however, is
being jeopardized by ongoing and increasing federal penalties.
Unfortunately, it is the children in families who receive child support
that suffer. My bill would correct this problem.

The Association for Children

for Enforcement of Support, Inc.,

Toledo, OH, June 4, 2002.
Hon. Robert Matsui,
Rayburn House Office Building,
Washington, DC.
Dear Representative Matsui: The Association for Children of
Support (ACES) would like to offer its support for your
proposed modifications to the current calculation of child
support automation penalties. Your legislation, the Child
Support Reinvestment Act of 2002, would remove the
disincentive to states, like California, to invest additional
dollars in their child support system. The penalties imposed
on the child support program in California were necessary and
provided the encouragement needed by the state to change the
system. We believe that California's significant progress,
increasing collection rates, and improved customer service
warrant reasonable changes in the child support computer
automation statute. Particularly, we support your bill,
because it would change the way penalties are calculated by
redefining the penalty base to avoid penalizing the sate for
their increased investment in the child support program. We
also support the provision that would permit the reinvestment
of a portion of the penalties in the child support system.
ACES believes that it is mothers and children who
ultimately suffer if the bill is not enacted. Thank you for
your leadership.
Sincerely,

Geraldine Jensen,

President, Association for Children for
Enforcement of Support.

____

National Organization for Women,

Sacramento, CA, May 14, 2002.
Hon. William M. Thomas,
Chair, House Ways and Means Committee,
Washington, DC.
Dear Congress Member Thomas: The California National
Organization for Women (CANOW) urges you to help alleviate a
situation which, if left unmitigated, will lead to injury of
thousands of California's families. We are asking for your
help in easing the penalties imposed upon California because
of missed deadlines on child support automation.
The penalties imposed upon the child support program in
California were necessary and acted as a catalyst for change
in the system. In 1999, California's child support system
faced a major reform. Since the change, policies in the state
are innovative and collections are on the rise. Customer
service efforts have improved tenfold and greater efforts to
reduce automation problems have resulted in record high
collections in some counties. These heroic efforts were made
in response to the public scrutiny of state child support
policies and procedures. Public scrutiny of the system
resulted directly from imposition of federal penalties.
Therefore, the penalties served their purpose and change has
resulted.
Now that California has revamped its child support system
and is spending nearly $1 billion to automate, child support
penalties are becoming obstructive. Because of the penalty
structure, the state is being penalized for spending more
money to improve child support. Instead, we need the penalty
system to be flexible--at least allowing penalties to serve
the purpose of motivating positive change rather than
imposing punishment just because it was observed and although
it no longer makes sense.
If we allow the penalty structure to remain as is, we will
see a loss of these newly gained services. The new child
support department will lose too many resources as money from
the program is siphoned to pay penalties. Mothers and
children will be the ultimate

[[Page E946]]

losers as less effort is put into collecting and enforcing
child support. CANOW supports a policy that would establish a
penalty base that does not increase when more money is spent
by the state to improve the program. Also, CANOW believes
that an allowance for reinvestment of the penalty dollars to
improvement of child support enforcement is a worthwhile
venture.
Please help CANOW to alleviate the potential suffering of
millions by restoring equity to the child support automation
computer penalty structure. Current economic times demand
that we rethink the effects of punitive measures from years
past.
Sincerely,
Melanie Snider,
CANOW Legislative Advocate.

____

Center for Law and Social Policy and National Women's Law
Center,
March 5, 2002.
Hon. William Thomas,
U.S. Representative, Committee on Ways and Means, Longworth
House Office Building, Washington, DC.
Dear Chairman Thomas: The Center for Law and Social Policy
and the National Women's Law Center support the State of
California's request for modifications in the computer
penalties incurred by the state--and we support reform of the
child support distribution rules--in order to continue the
significant progress that California has made in recent years
to improve its child support program and get more child
support to families.
As explained in more detail below, we recommend a change in
the way penalties are calculated, by redefining the penalty
base to avoid penalizing California for having increased its
investment in its child support program. We also support a
change that would permit California to reinvest in its child
support program the computer penalties incurred by the state
because of its delay in implementing a statewide system under
the Family Support Act of 1998 (FSA). We believe that
California's progress in restructuring its child support
program and implementing a new generation of computer
technology are unique circumstances that justify reasonable
modifications in the FSA computer penalty statute. However,
we do not support forgiveness or waiver of the penalty, nor
do we support reinvestment of child support penalties
incurred for reasons other than noncompliance with FSA
computer requirements.
We also hope you will cosponsor S. 916 and S. 918, which
would reform child support distribution rules, simplify
California's systems development, and get more child support
to former and current welfare families. We urge you to get
help get child support distribution reform passed this year.
Modifying Computer Penalties
In 1998, Congress enacted an alternative computer penalty
in lieu of withdrawing full federal funds from state TANF and
child support programs for states that fail to meet child
support computer system deadlines. The statute creates an
alternative penalty available to states making good faith to
comply with the automated system requirements and submitting
a corrective action plan. The penalties escalate over time:
the first year penalty is 4 percent of federal child support
matching funds; the second year penalty is 8 percent; the
third year penalty is 16 percent; the fourth year penalty is
25 percent, and the fifth and subsequent years' penalty is 30
percent. The percentage is applied to the ``penalty base'':
the amount payable to the state in the previous year as
federal reimbursement for state administrative expenditures
in the child support program (the 66% federal match). Thus, a
state like California that substantially increased its
investment in the child support program each year faces not
only escalating percentages, but an increasing penalty base.
We each provided extensive technical assistance to the
House Committee on Ways and Means as it developed the penalty
language. The specific intent of the alternative penalty was
not to punish noncompliant states, but instead to spur those
states to address political issues within the states that
were impeding system development. Congress did not anticipate
that states would incur penalties for more than three or four
years. To date, all but two states, California and South
Carolina, have received or requested certification of Family
Support Act systems compliance.
Although California is not yet in compliance, it responded
to the alternative penalty in the way intended by Congress.
After Congress adopted the alternative penalty, the
California legislature restructured the state child support
program by (1) creating an independent state child support
agency, (2) reorganizing the program at the county level, (3)
engaging in an ambitious top-to-bottom review of child
support policies and practices, (4) revamping its computer
development and procurement plans, and (5) substantially
increasing state funding levels. We think these changes are
producing positive and enduring results for families.
However, because California has not yet completed its
computer system, it will continue to face computer penalties
for several years to come.
We support two changes in the alternative penalty
applicable to FSA system requirements. First, we agree with
California that the statutory definition of the base
unintentionally penalizes the state for increased investments
in the child support program. As the state puts more money
into the program, the penalty base and penalty increase. We
think the base should be adjusted to reflect a fixed year.
Second, we support a change that would allow the state to
reinvest the penalty in its child support program in a fair
and reasonable way. Given California's strenuous efforts to
improve its child support program since enactment of the
alternative penalty, we think it is counterproductive to
continue to withdraw penalty funds from the program,
particularly at a time when state budgets are experiencing
severe shortfalls. Several studies establish a direct link
between child support program performance and adequate
finding levels. We are particularly concerned that
California's system development decisions could be
compromised if the state is required to continue to pay its
substantial penalties to the federal government.
Child Support Distribution Reform
It is also important that California have the authority to
avoid programming existing distribution rules in the
development of its new system. Problems with automating
complicated rules have been cited by federal and state
administrators as a cause of system development delays and
costs. And one expert, Policy Studies, Inc., estimates that
once the rules are implemented, 6 to 8 percent of all child
support program costs--up to $360 million per year--are spent
maintaining them.
About half of the support arrears collected for families
who have left welfare are not paid to the families, but
instead are kept by the government as reimbursement for
welfare costs. By paying the support to families,
distribution reform would help families make the transition
off of welfare and stay off. Research from the Wisconsin
pass-through demonstration finds that when child support
directly benefits their children and is not kept by the
government, fathers are more willing to establish paternity
and pay support for their children.
We urge you support both California penalty relief and
distribution reform this year.
Sincerely,

Vicki Turetsky,

Senior Staff Attorney,
Center for Law and Social Policy.

Joan Entmacher,

Vice President, Family Economic Security,
National Women's Law Center.

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