
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC658a]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
 SUBCHAPTER 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
 
Sec. 658a. Incentive payments to States


(a) In general

    In addition to any other payment under this part, the Secretary 
shall, subject to subsection (f) of this section, make an incentive 
payment to each State for each fiscal year in an amount determined under 
subsection (b) of this section.

(b) Amount of incentive payment

                           (1) In general

        The incentive payment for a State for a fiscal year is equal to 
    the incentive payment pool for the fiscal year, multiplied by the 
    State incentive payment share for the fiscal year.

                     (2) Incentive payment pool

        (A) In general

            In paragraph (1), the term ``incentive payment pool'' 
        means--
                (i) $422,000,000 for fiscal year 2000;
                (ii) $429,000,000 for fiscal year 2001;
                (iii) $450,000,000 for fiscal year 2002;
                (iv) $461,000,000 for fiscal year 2003;
                (v) $454,000,000 for fiscal year 2004;
                (vi) $446,000,000 for fiscal year 2005;
                (vii) $458,000,000 for fiscal year 2006;
                (viii) $471,000,000 for fiscal year 2007;
                (ix) $483,000,000 for fiscal year 2008; and
                (x) for any succeeding fiscal year, the amount of the 
            incentive payment pool for the fiscal year that precedes 
            such succeeding fiscal year, multiplied by the percentage 
            (if any) by which the CPI for such preceding fiscal year 
            exceeds the CPI for the second preceding fiscal year.

        (B) CPI

            For purposes of subparagraph (A), the CPI for a fiscal year 
        is the average of the Consumer Price Index for the 12-month 
        period ending on September 30 of the fiscal year. As used in the 
        preceding sentence, the term ``Consumer Price Index'' means the 
        last Consumer Price Index for all-urban consumers published by 
        the Department of Labor.

                  (3) State incentive payment share

        In paragraph (1), the term ``State incentive payment share'' 
    means, with respect to a fiscal year--
            (A) the incentive base amount for the State for the fiscal 
        year; divided by
            (B) the sum of the incentive base amounts for all of the 
        States for the fiscal year.

                      (4) Incentive base amount

        In paragraph (3), the term ``incentive base amount'' means, with 
    respect to a State and a fiscal year, the sum of the applicable 
    percentages (determined in accordance with paragraph (6)) multiplied 
    by the corresponding maximum incentive base amounts for the State 
    for the fiscal year, with respect to each of the following measures 
    of State performance for the fiscal year:
            (A) The paternity establishment performance level.
            (B) The support order performance level.
            (C) The current payment performance level.
            (D) The arrearage payment performance level.
            (E) The cost-effectiveness performance level.

                  (5) Maximum incentive base amount

        (A) In general

            For purposes of paragraph (4), the maximum incentive base 
        amount for a State for a fiscal year is--
                (i) with respect to the performance measures described 
            in subparagraphs (A), (B), and (C) of paragraph (4), the 
            State collections base for the fiscal year; and
                (ii) with respect to the performance measures described 
            in subparagraphs (D) and (E) of paragraph (4), 75 percent of 
            the State collections base for the fiscal year.

        (B) Data required to be complete and reliable

            Notwithstanding subparagraph (A), the maximum incentive base 
        amount for a State for a fiscal year with respect to a 
        performance measure described in paragraph (4) is zero, unless 
        the Secretary determines, on the basis of an audit performed 
        under section 652(a)(4)(C)(i) of this title, that the data which 
        the State submitted pursuant to section 654(15)(B) of this title 
        for the fiscal year and which is used to determine the 
        performance level involved is complete and reliable.

        (C) State collections base

            For purposes of subparagraph (A), the State collections base 
        for a fiscal year is equal to the sum of--
                (i) 2 times the sum of--
                    (I) the total amount of support collected during the 
                fiscal year under the State plan approved under this 
                part in cases in which the support obligation involved 
                is required to be assigned to the State pursuant to part 
                A or E of this subchapter or subchapter XIX of this 
                chapter; and
                    (II) the total amount of support collected during 
                the fiscal year under the State plan approved under this 
                part in cases in which the support obligation involved 
                was so assigned but, at the time of collection, is not 
                required to be so assigned; and

                (ii) the total amount of support collected during the 
            fiscal year under the State plan approved under this part in 
            all other cases.

        (6) Determination of applicable percentages based on 
                             performance levels

        (A) Paternity establishment

            (i) Determination of paternity establishment 
                    performance level

                The paternity establishment performance level for a 
            State for a fiscal year is, at the option of the State, the 
            IV-D paternity establishment percentage determined under 
            section 652(g)(2)(A) of this title or the statewide 
            paternity establishment percentage determined under section 
            652(g)(2)(B) of this title.
            (ii) Determination of applicable percentage

                The applicable percentage with respect to a State's 
            paternity establishment performance level is as follows:

------------------------------------------------------------------------
 If the paternity establishment performance level is:
-------------------------------------------------------  The applicable
            At least:                 But less than:     percentage is:
------------------------------------------------------------------------
80%..............................  ...................         100
79%..............................  80%................         98
78%..............................  79%................         96
77%..............................  78%................         94
76%..............................  77%................         92
75%..............................  76%................         90
74%..............................  75%................         88
73%..............................  74%................         86
72%..............................  73%................         84
71%..............................  72%................         82
70%..............................  71%................         80
69%..............................  70%................         79
68%..............................  69%................         78
67%..............................  68%................         77
66%..............................  67%................         76
65%..............................  66%................         75
64%..............................  65%................         74
63%..............................  64%................         73
62%..............................  63%................         72
61%..............................  62%................         71
60%..............................  61%................         70
59%..............................  60%................         69
58%..............................  59%................         68
57%..............................  58%................         67
56%..............................  57%................         66
55%..............................  56%................         65
54%..............................  55%................         64
53%..............................  54%................         63
52%..............................  53%................         62
51%..............................  52%................         61
50%..............................  51%................         60
0%...............................  50%................         0.
------------------------------------------------------------------------

          Notwithstanding the preceding sentence, if the paternity 
            establishment performance level of a State for a fiscal year 
            is less than 50 percent but exceeds by at least 10 
            percentage points the paternity establishment performance 
            level of the State for the immediately preceding fiscal 
            year, then the applicable percentage with respect to the 
            State's paternity establishment performance level is 50 
            percent.

        (B) Establishment of child support orders

            (i) Determination of support order performance level

                The support order performance level for a State for a 
            fiscal year is the percentage of the total number of cases 
            under the State plan approved under this part in which there 
            is a support order during the fiscal year.
            (ii) Determination of applicable percentage

                The applicable percentage with respect to a State's 
            support order performance level is as follows:

------------------------------------------------------------------------
      If the support order performance level is:
-------------------------------------------------------  The applicable
            At least:                 But less than:     percentage is:
------------------------------------------------------------------------
80%..............................  ...................         100
79%..............................  80%................         98
78%..............................  79%................         96
77%..............................  78%................         94
76%..............................  77%................         92
75%..............................  76%................         90
74%..............................  75%................         88
73%..............................  74%................         86
72%..............................  73%................         84
71%..............................  72%................         82
70%..............................  71%................         80
69%..............................  70%................         79
68%..............................  69%................         78
67%..............................  68%................         77
66%..............................  67%................         76
65%..............................  66%................         75
64%..............................  65%................         74
63%..............................  64%................         73
62%..............................  63%................         72
61%..............................  62%................         71
60%..............................  61%................         70
59%..............................  60%................         69
58%..............................  59%................         68
57%..............................  58%................         67
56%..............................  57%................         66
55%..............................  56%................         65
54%..............................  55%................         64
53%..............................  54%................         63
52%..............................  53%................         62
51%..............................  52%................         61
50%..............................  51%................         60
0%...............................  50%................         0.
------------------------------------------------------------------------

          Notwithstanding the preceding sentence, if the support order 
            performance level of a State for a fiscal year is less than 
            50 percent but exceeds by at least 5 percentage points the 
            support order performance level of the State for the 
            immediately preceding fiscal year, then the applicable 
            percentage with respect to the State's support order 
            performance level is 50 percent.

        (C) Collections on current child support due

            (i) Determination of current payment performance 
                    level

                The current payment performance level for a State for a 
            fiscal year is equal to the total amount of current support 
            collected during the fiscal year under the State plan 
            approved under this part divided by the total amount of 
            current support owed during the fiscal year in all cases 
            under the State plan, expressed as a percentage.
            (ii) Determination of applicable percentage

                The applicable percentage with respect to a State's 
            current payment performance level is as follows:

------------------------------------------------------------------------
     If the current payment performance level is:
-------------------------------------------------------  The applicable
            At least:                 But less than:     percentage is:
------------------------------------------------------------------------
80%..............................  ...................         100
79%..............................  80%................         98
78%..............................  79%................         96
77%..............................  78%................         94
76%..............................  77%................         92
75%..............................  76%................         90
74%..............................  75%................         88
73%..............................  74%................         86
72%..............................  73%................         84
71%..............................  72%................         82
70%..............................  71%................         80
69%..............................  70%................         79
68%..............................  69%................         78
67%..............................  68%................         77
66%..............................  67%................         76
65%..............................  66%................         75
64%..............................  65%................         74
63%..............................  64%................         73
62%..............................  63%................         72
61%..............................  62%................         71
60%..............................  61%................         70
59%..............................  60%................         69
58%..............................  59%................         68
57%..............................  58%................         67
56%..............................  57%................         66
55%..............................  56%................         65
54%..............................  55%................         64
53%..............................  54%................         63
52%..............................  53%................         62
51%..............................  52%................         61
50%..............................  51%................         60
49%..............................  50%................         59
48%..............................  49%................         58
47%..............................  48%................         57
46%..............................  47%................         56
45%..............................  46%................         55
44%..............................  45%................         54
43%..............................  44%................         53
42%..............................  43%................         52
41%..............................  42%................         51
40%..............................  41%................         50
0%...............................  40%................         0.
------------------------------------------------------------------------

          Notwithstanding the preceding sentence, if the current payment 
            performance level of a State for a fiscal year is less than 
            40 percent but exceeds by at least 5 percentage points the 
            current payment performance level of the State for the 
            immediately preceding fiscal year, then the applicable 
            percentage with respect to the State's current payment 
            performance level is 50 percent.

        (D) Collections on child support arrearages

            (i) Determination of arrearage payment performance 
                    level

                The arrearage payment performance level for a State for 
            a fiscal year is equal to the total number of cases under 
            the State plan approved under this part in which payments of 
            past-due child support were received during the fiscal year 
            and part or all of the payments were distributed to the 
            family to whom the past-due child support was owed (or, if 
            all past-due child support owed to the family was, at the 
            time of receipt, subject to an assignment to the State, part 
            or all of the payments were retained by the State) divided 
            by the total number of cases under the State plan in which 
            there is past-due child support, expressed as a percentage.
            (ii) Determination of applicable percentage

                The applicable percentage with respect to a State's 
            arrearage payment performance level is as follows:

------------------------------------------------------------------------
    If the arrearage payment performance level is:
-------------------------------------------------------  The applicable
            At least:                 But less than:     percentage is:
------------------------------------------------------------------------
80%..............................  ...................         100
79%..............................  80%................         98
78%..............................  79%................         96
77%..............................  78%................         94
76%..............................  77%................         92
75%..............................  76%................         90
74%..............................  75%................         88
73%..............................  74%................         86
72%..............................  73%................         84
71%..............................  72%................         82
70%..............................  71%................         80
69%..............................  70%................         79
68%..............................  69%................         78
67%..............................  68%................         77
66%..............................  67%................         76
65%..............................  66%................         75
64%..............................  65%................         74
63%..............................  64%................         73
62%..............................  63%................         72
61%..............................  62%................         71
60%..............................  61%................         70
59%..............................  60%................         69
58%..............................  59%................         68
57%..............................  58%................         67
56%..............................  57%................         66
55%..............................  56%................         65
54%..............................  55%................         64
53%..............................  54%................         63
52%..............................  53%................         62
51%..............................  52%................         61
50%..............................  51%................         60
49%..............................  50%................         59
48%..............................  49%................         58
47%..............................  48%................         57
46%..............................  47%................         56
45%..............................  46%................         55
44%..............................  45%................         54
43%..............................  44%................         53
42%..............................  43%................         52
41%..............................  42%................         51
40%..............................  41%................         50
0%...............................  40%................         0.
------------------------------------------------------------------------

          Notwithstanding the preceding sentence, if the arrearage 
            payment performance level of a State for a fiscal year is 
            less than 40 percent but exceeds by at least 5 percentage 
            points the arrearage payment performance level of the State 
            for the immediately preceding fiscal year, then the 
            applicable percentage with respect to the State's arrearage 
            payment performance level is 50 percent.

        (E) Cost-effectiveness

            (i) Determination of cost-effectiveness performance 
                    level

                The cost-effectiveness performance level for a State for 
            a fiscal year is equal to the total amount collected during 
            the fiscal year under the State plan approved under this 
            part divided by the total amount expended during the fiscal 
            year under the State plan, expressed as a ratio.
            (ii) Determination of applicable percentage

                The applicable percentage with respect to a State's 
            cost-effectiveness performance level is as follows:

------------------------------------------------------------------------
    If the cost-effectiveness performance level is:
-------------------------------------------------------  The applicable
            At least:                 But less than:     percentage is:
------------------------------------------------------------------------
5.00.............................  ...................         100
4.50.............................  4.99...............         90
4.00.............................  4.50...............         80
3.50.............................  4.00...............         70
3.00.............................  3.50...............         60
2.50.............................  3.00...............         50
2.00.............................  2.50...............         40
0.00.............................  2.00...............         0.
------------------------------------------------------------------------

(c) Treatment of interstate collections

    In computing incentive payments under this section, support which is 
collected by a State at the request of another State shall be treated as 
having been collected in full by both States, and any amounts expended 
by a State in carrying out a special project assisted under section 
655(e) of this title shall be excluded.

(d) Administrative provisions

    The amounts of the incentive payments to be made to the States under 
this section for a fiscal year shall be estimated by the Secretary at/or 
before the beginning of the fiscal year on the basis of the best 
information available. The Secretary shall make the payments for the 
fiscal year, on a quarterly basis (with each quarterly payment being 
made no later than the beginning of the quarter involved), in the 
amounts so estimated, reduced or increased to the extent of any 
overpayments or underpayments which the Secretary determines were made 
under this section to the States involved for prior periods and with 
respect to which adjustment has not already been made under this 
subsection. Upon the making of any estimate by the Secretary under the 
preceding sentence, any appropriations available for payments under this 
section are deemed obligated.

(e) Regulations

    The Secretary shall prescribe such regulations as may be necessary 
governing the calculation of incentive payments under this section, 
including directions for excluding from the calculations certain closed 
cases and cases over which the States do not have jurisdiction.

(f) Reinvestment

    A State to which a payment is made under this section shall expend 
the full amount of the payment to supplement, and not supplant, other 
funds used by the State--
        (1) to carry out the State plan approved under this part; or
        (2) for any activity (including cost-effective contracts with 
    local agencies) approved by the Secretary, whether or not the 
    expenditures for the activity are eligible for reimbursement under 
    this part, which may contribute to improving the effectiveness or 
    efficiency of the State program operated under this part.

(Aug. 14, 1935, ch. 531, title IV, Sec. 458A, as added Pub. L. 105-200, 
title II, Sec. 201(a), July 16, 1998, 112 Stat. 648.)

                         Renumbering of Section

        Pub. L. 105-200, title II, Sec. 201(f)(2)(A), (3), July 16, 
    1998, 112 Stat. 657, 658, provided that, effective Oct. 1, 2001, 
    this section is renumbered section 458 of act Aug. 14, 1935.

                       References in Text

    Parts A and E of this subchapter, referred to in subsec. 
(b)(5)(C)(i)(I), are classified to sections 601 et seq. and 670 et seq., 
respectively, of this title.


                             Effective Date

    Pub. L. 105-200, title II, Sec. 201(g), July 16, 1998, 112 Stat. 
658, provided that: ``Except as otherwise provided in this section 
[enacting this section, amending this section and sections 652, 655, and 
658 of this title, repealing section 658 of this title, enacting 
provisions set out as notes under this section and sections 652 and 655 
of this title, amending provisions set out as notes under this section 
and sections 652 and 658 of this title, and repealing provisions set out 
as a note under section 658 of this title], the amendments made by this 
section shall take effect on October 1, 1999.''


                               Regulations

    Pub. L. 105-200, title II, Sec. 201(c), July 16, 1998, 112 Stat. 
656, provided that: ``Within 9 months after the date of the enactment of 
this section [July 16, 1998], the Secretary of Health and Human Services 
shall prescribe regulations governing the implementation of section 458A 
of the Social Security Act [this section] when such section takes effect 
and the implementation of subsection (b) of this section [set out as a 
note below].''


                             Transition Rule

    Pub. L. 105-200, title II, Sec. 201(b), July 16, 1998, 112 Stat. 
656, provided that: ``Notwithstanding any other provision of law--
        ``(1) for fiscal year 2000, the Secretary shall reduce by one-
    third the amount otherwise payable to a State under section 458 of 
    the Social Security Act [section 658 of this title], and shall 
    reduce by two-thirds the amount otherwise payable to a State under 
    section 458A of such Act [this section]; and
        ``(2) for fiscal year 2001, the Secretary shall reduce by two-
    thirds the amount otherwise payable to a State under section 458 of 
    the Social Security Act, and shall reduce by one-third the amount 
    otherwise payable to a State under section 458A of such Act.''


                                 Studies

    Pub. L. 105-200, title II, Sec. 201(d), July 16, 1998, 112 Stat. 
656, provided that:
    ``(1) General review of new incentive payment system.--
        ``(A) In general.--The Secretary of Health and Human Services 
    shall conduct a study of the implementation of the incentive payment 
    system established by section 458A of the Social Security Act [this 
    section], in order to identify the problems and successes of the 
    system.
        ``(B) Reports to the congress.--
            ``(i) Report on variations in state performance attributable 
        to demographic variables.--Not later than October 1, 2000, the 
        Secretary shall submit to the Congress a report that identifies 
        any demographic or economic variables that account for 
        differences in the performance levels achieved by the States 
        with respect to the performance measures used in the system, and 
        contains the recommendations of the Secretary for such 
        adjustments to the system as may be necessary to ensure that the 
        relative performance of States is measured from a baseline that 
        takes account of any such variables.
            ``(ii) Interim report.--Not later than March 1, 2001, the 
        Secretary shall submit to the Congress an interim report that 
        contains the findings of the study required by subparagraph (A).
            ``(iii) Final report.--Not later than October 1, 2003, the 
        Secretary shall submit to the Congress a final report that 
        contains the final findings of the study required by 
        subparagraph (A). The report shall include any recommendations 
        for changes in the system that the Secretary determines would 
        improve the operation of the child support enforcement program.
    ``(2) Development of medical support incentive.--
        ``(A) In general.--The Secretary of Health and Human Services, 
    in consultation with State directors of programs operated under part 
    D of title IV of the Social Security Act [this part] and 
    representatives of children potentially eligible for medical 
    support, shall develop a performance measure based on the 
    effectiveness of States in establishing and enforcing medical 
    support obligations, and shall make recommendations for the 
    incorporation of the measure, in a revenue neutral manner, into the 
    incentive payment system established by section 458A of the Social 
    Security Act [this section].
        ``(B) Report.--Not later than October 1, 1999, the Secretary 
    shall submit to the Congress a report that describes the performance 
    measure and contains the recommendations required by subparagraph 
    (A).''
    [Pub. L. 105-200, title II, Sec. 201(f)(2)(C), (3), July 16, 1998, 
112 Stat. 658, provided that, effective Oct. 1, 2001, section 201(d)(1) 
of Pub. L. 105-200, set out above, is amended by substituting ``section 
458'' for ``section 458A''.]
