April 4, 2007
The Honorable Wade F. Horn
Administration for Children and Families
370 L'Enfant Promenade, S.W.
Washington, D.C. 20201
RE: State options in implementing Section 7310, Deficit Reduction Act of 2005 (Public Law 109-171)
Dear Assistant Secretary Horn:
I am writing regarding recently proposed regulations from the Office of Child Support Enforcement (OCSE). My state of Iowa is concerned that these regulations will not allow the full range of options for states like Iowa.
The Deficit Reduction Act (DRA) requires payment of an annual $25 fee in each "never-assistance" child support case enforced by the state's Title IV-D child support agency after the agency has collected $500/year for the family. The fee will be used to reimburse program costs for both the federal and state governments. The statute is neutral as to whether to require the custodial parent, the absent parent, or even allow the state pay the fee.
I am informed that policy makers in Iowa have determined that the non-custodial parent should pay the fee. The state legislation, now pending in the Appropriations Committee, provides that the fee be paid by withholding it from child support collections from the absent parent, and then collecting an additional $25 in child support to keep the custodial parent whole. Policy makers in Iowa believe that this is the most efficient manner in which to collect this fee.
However, the Notice of Proposed Rulemaking published by OCSE in the Federal Register on January 24, 2007, has raised concern among officials in Iowa in so much as the options described in the Notice do not appear to allow for this method to collect the fee.
The Notice describes possible methods to have the absent parent pay the fee, including sending a bill to the absent parent, modifying each of those parents' child support orders to include the fee, and then use wage withholding to collect it, or, deducting the fee from a child support payment, if the absent parent has designated a portion of the payment as the annual $25 fee. (See Jan. 24, 2007, Federal Register pages 3096 - 3097.)
These options do not appear to be as effective as what Iowa has proposed. Merely billing the absent parent has resulted in only a 19% collection rate in the past in Iowa. Modifying each parent's child support order would mean the Iowa Department of Human Services and Iowa Courts would have to modify approximately 32,600 child support orders. And, asking absent parents to voluntarily designate or permit a portion of child support collections to be used to pay the fee can mean additional annual collection costs, with no guarantee of compliance, and diminishing net returns from the $8.50 state share.
Can you confirm whether or not the options described in the Federal Register would include the option that Iowa would like to pursue?
I'm enclosing a more detailed explanation of the issue provided by the Iowa Department of Human Services.
Your timely response to this inquiry is appreciated.
Charles E. Grassley
cc: Margo Bean, Commissioner, Office of Child Support Enforcement