§658. Incentive payments to States

(a) Purpose; requirement; quarterly payments

In order to encourage and reward State child support enforcement programs which perform in a cost-effective and efficient manner to secure support for all children who have sought assistance in securing support, whether such children reside within the State or elsewhere and whether or not they are eligible for assistance under a program funded under part A of this subchapter, and regardless of the economic circumstances of their parents, the Secretary shall, from support collected which would otherwise represent the Federal share of assistance to families of noncustodial parents, pay to each State for each fiscal year, on a quarterly basis (as described in subsection (e) of this section) beginning with the quarter commencing October 1, 1985, an incentive payment in an amount determined under subsection (b) of this section.

(b) Incentive formula

(1) Except as provided in paragraphs (2), (3), and (4), the incentive payment shall be equal to-

(A) 6 percent of the total amount of support collected under the plan during the fiscal year in cases in which the support obligation involved is assigned to the State pursuant to section 608(a)(4) of this title or section 671(a)(17) of this title (with such total amount for any fiscal year being hereafter referred to in this section as the State's "title IV–A collections" for that year), plus

(B) 6 percent of the total amount of support collected during the fiscal year in all other cases under this part (with such total amount for any fiscal year being hereafter referred to in this section as the State's "non-title IV–A collections" for that year).

(2) If subsection (c) of this section applies with respect to a State's title IV–A collections or non-title IV–A collections for any fiscal year, the percent specified in paragraph (1)(A) or (B) (with respect to such collections) shall be increased to the higher percent determined under such subsection (with respect to such collections) in determining the State's incentive payment under this subsection for that year.

(3) The dollar amount of the portion of the State's incentive payment for any fiscal year which is determined on the basis of its non-title IV–A collections under paragraph (1)(B) (after adjustment under subsection (c) of this section if applicable) shall in no case exceed-

(A) the dollar amount of the portion of such payment which is determined on the basis of its title IV–A collections under paragraph (1)(A) (after adjustment under subsection (c) of this section if applicable) in the case of fiscal year 1986 or 1987;

(B) 105 percent of such dollar amount in the case of fiscal year 1988;

(C) 110 percent of such dollar amount in the case of fiscal year 1989; or

(D) 115 percent of such dollar amount in the case of fiscal year 1990 or any fiscal year thereafter.

(4) The Secretary shall make such additional payments to the State under this part, for fiscal year 1986 or 1987, as may be necessary to assure that the total amount of payments under this section and section 655(a)(1)(A) of this title for such fiscal year is no less than 80 percent of the amount that would have been payable to that State and its political subdivisions for such fiscal year under this section and section 655(a)(1)(A) of this title if those sections (including the amendment made by section 5(c)(2)(A) of the Child Support Enforcement Amendments of 1984) had remained in effect as they were in effect for fiscal year 1985.

(c) Increase in percentage; laboratory costs

If the total amount of a State's title IV–A collections or non-title IV–A collections for any fiscal year bears a ratio to the total amount expended by the State in that year for the operation of its plan approved under section 654 of this title for which payment may be made under section 655 of this title (with the total amount so expended in any fiscal year being hereafter referred to in this section as the State's "combined title IV–A/non-title IV–A administrative costs" for that year) which is equal to or greater than 1.4, the relevant percent specified in subparagraph (A) or (B) of subsection (b)(1) of this section (with respect to such collections) shall be increased to-

(1) 6.5 percent, plus

(2) one-half of 1 percent for each full two-tenths by which such ratio exceeds 1.4;

except that the percent so specified shall in no event be increased (for either title IV–A collections or non-title IV–A collections) to more than 10 percent. For purposes of the preceding sentence, laboratory costs incurred in determining paternity in any fiscal year may at the option of the State be excluded from the State's combined title IV–A/non-title IV–A administrative costs for that year.

(d) Support collected on behalf of individuals residing in another State

In computing incentive payments under this section, support which is collected by one State at the request of another State, including amounts collected under section 666(a)(14) of this title, shall be treated as having been collected in full by each such State, and any amounts expended by the State in carrying out a special project assisted under section 655(e) of this title shall be excluded.

(e) Estimates by Secretary; quarterly payments

The amounts of the incentive payments to be made to the various States under this section for any fiscal year shall be estimated by the Secretary at or before the beginning of such year on the basis of the best information available. The Secretary shall make such payments for such 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 shall be deemed obligated.

(Aug. 14, 1935, ch. 531, title IV, §458, as added Pub. L. 93–647, §101(a), Jan. 4, 1975, 88 Stat. 2357 ; amended Pub. L. 95–30, title V, §503(a), May 23, 1977, 91 Stat. 162 ; Pub. L. 96–272, title III, §307, June 17, 1980, 94 Stat. 531 ; Pub. L. 97–248, title I, §174(c), Sept. 3, 1982, 96 Stat. 403 ; Pub. L. 98–378, §5(a), (c)(2)(A), Aug. 16, 1984, 98 Stat. 1312 , 1314; Pub. L. 99–514, title XVIII, §1883(b)(7), Oct. 22, 1986, 100 Stat. 2917 ; Pub. L. 100–485, title I, §127, Oct. 13, 1988, 102 Stat. 2355 ; Pub. L. 104–193, title III, §§341(a), formerly 341(b), 395(d)(1)(F), Aug. 22, 1996, 110 Stat. 2231 , 2259; Pub. L. 105–33, title V, §5550(b), Aug. 5, 1997, 111 Stat. 634 ; Pub. L. 105–200, title II, §201(e)(1)(A), July 16, 1998, 112 Stat. 657 .)

Repeal of Section

Pub. L. 105–200, title II, §201(f)(1), (3), July 16, 1998, 112 Stat. 657 , 658, provided that, effective Oct. 1, 2001, this section is repealed.

References in Text

Part A of this subchapter, referred to in subsec. (a), is classified to section 601 et seq. of this title.

Title IV–A, referred to in subsecs. (b) and (c), means part A of title IV of act Aug. 14, 1935, ch. 531, which is classified generally to part A (§601 et seq.) of this subchapter.

Section 5(c)(2)(A) of the Child Support Enforcement Amendments of 1984, referred to in subsec. (b)(4), is section 5(c)(2)(A) of Pub. L. 98–378, which amended subsec. (a) of this section. See 1984 Amendment note below.

Amendments

1998-Subsecs. (a) to (c). Pub. L. 105–200, §201(e)(1)(A), amended Pub. L. 104–193, §341(b). See 1996 Amendment notes below.

1997-Subsec. (d). Pub. L. 105–33 inserted ", including amounts collected under section 666(a)(14) of this title," after "another State".

1996-Subsec. (a). Pub. L. 104–193, §395(d)(1)(F), substituted "noncustodial parents" for "absent parents".

Pub. L. 104–193, §341(a)(1), formerly §341(b)(1), as redesignated by Pub. L. 105–200, §201(e)(1)(A), substituted "assistance under a program funded under part A of this subchapter" for "aid to families with dependent children under a State plan approved under part A of this subchapter".

Subsec. (b). Pub. L. 104–193, §341(a)(3), formerly §341(b)(3), as redesignated by Pub. L. 105–200, §201(e)(1)(A), substituted "title IV–A collections" for "AFDC collections" and "non-title IV–A collections" for "non-AFDC collections", wherever appearing.

Subsec. (b)(1)(A). Pub. L. 104–193, §341(a)(2), formerly §341(b)(2), as redesignated by Pub. L. 105–200, §201(e)(1)(A), substituted "section 608(a)(4)" for "section 602(a)(26)".

Subsec. (c). Pub. L. 104–193, §341(a)(3), (4), formerly §341(b)(3), (4), as redesignated by Pub. L. 105–200, §201(e)(1)(A), substituted "title IV–A collections" for "AFDC collections" in two places, "non-title IV–A collections" for "non-AFDC collections" in two places, and "combined title IV–A/non-title IV–A administrative costs" for "combined AFDC/non-AFDC administrative costs" in two places.

1988-Subsec. (d). Pub. L. 100–485 inserted provision that any amounts expended by the State in carrying out a special project assisted under section 655(e) of this title shall be excluded.

1986-Subsec. (d). Pub. L. 99–514 substituted "at the request of" for "on behalf of individuals residing in".

1984-Subsec. (a). Pub. L. 98–378, §5(a), in amending subsec. (a) generally, substituted general provisions relating to payments to States to encourage and reward State child support enforcement programs which perform in a cost-effective and efficient manner for provisions which required payment to States and localities making enforcement and collection of support rights assigned under section 602(a)(26) of this title.

Pub. L. 98–378, §5(c)(2)(A), temporarily substituted "distributed as provided in paragraphs (1), (2), and (4)(A) of section 657(b) of this title" for "distributed as provided in section 657 of this title to reduce or repay assistance payments". See Effective and Termination Dates of 1984 Amendment note below.

Subsec. (b). Pub. L. 98–378, §5(a), in amending subsec. (b) generally, substituted provisions relating to an incentive formula for payments under this section for provisions relating to the allocation of payments among jurisdictions involved in enforcement or collection under this section.

Subsec. (c). Pub. L. 98–378, §5(a), in amending subsec. (c) generally, substituted provisions relating to an increase in percentages of payments under this section and relating to laboratory costs for provisions relating to collection and distribution in accordance with a State plan approved under section 654 of this title.

Subsecs. (d), (e). Pub. L. 98–378, §5(a), in amending section generally, added subsecs. (d) and (e).

1982-Subsec. (a). Pub. L. 97–248 substituted "12 percent" for "15 per centum".

1980-Subsec. (a). Pub. L. 96–272, §307(b), inserted provisions for a State to make enforcement and collection of support rights on its own behalf.

Subsec. (c). Pub. L. 96–272, §307(c), added subsec. (c).

1977-Subsec. (a). Pub. L. 95–30, §503(a)(1), altered formula for arriving at amount to be paid for enforcement and collection of assigned support rights by substituting a formula calling for an amount equal to 15 per centum of any amount collected and required to be distributed as provided in section 657 of this title to reduce or repay assistance payments for a formula calling for an amount equal to 25 per centum of any amount collected (and required to be distributed as provided in section 657 of this title to reduce or repay assistance payments) attributable to the support obligation owed for 12 months and an amount equal to 10 per centum of any amount collected (and required to be distributed as provided in section 657 of this title to reduce or repay assistance payments) attributable to the support obligation owed for any month after the first twelve months for which such collections were made.

Subsec. (b). Pub. L. 95–30, §503(a)(2), substituted "determined under subsection (a) of this section" for "determined under paragraphs (1) and (2) of subsection (a) of this section".

Effective Date of 1998 Amendment

Amendment by section 201(e)(1)(A) of Pub. L. 105–200 effective as if included in the enactment of section 341 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 104–193, see section 201(e)(2) of Pub. L. 105–200, set out as a note under section 652 of this title.

Effective Date of 1997 Amendment

Amendment by Pub. L. 105–33 effective as if included in the enactment of title III of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 104–193, see section 5557 of Pub. L. 105–33, set out as a note under section 608 of this title.

Effective Date of 1996 Amendment

Pub. L. 104–193, title III, §341(c)(1), formerly §341(d)(1), Aug. 22, 1996, 110 Stat. 2233 , as redesignated and amended by Pub. L. 105–200, title II, §201(e)(1)(A), (B)(i), July 16, 1998, 112 Stat. 657 , provided that: "The amendments made by subsection (a) of this section [amending this section] shall become effective with respect to a State as of the date the amendments made by section 103(a) (without regard to section 116(a)(2)) first apply to the State [July 1, 1997; see section 116 of Pub. L. 104–193, set out as an Effective Date note under section 601 of this title]."

For provisions relating to effective date of title III of Pub. L. 104–193, see section 395(a)–(c) of Pub. L. 104–193, set out as a note under section 654 of this title.

Effective and Termination Dates of 1984 Amendment

Section 5(c)(1) of Pub. L. 98–378 provided that: "The amendments made by the preceding provisions of this section [amending this section and section 654 of this title] shall become effective on October 1, 1985."

Section 5(c)(2)(A) of Pub. L. 98–378 provided that the amendment made by such section 5(c)(2)(A) is effective until Sept. 30, 1985.

Effective Date of 1983 Amendment

Amendment by Pub. L. 97–248 applicable with respect to amounts collected on or after Oct. 1, 1983, see section 174(d) of Pub. L. 97–248, set out as a note under section 655 of this title.

Effective Date of 1977 Amendment

Section 503(b) of Pub. L. 95–30 provided that: "The amendments made by subsection (a) [amending this section] shall be applicable with respect to amounts collected on and after October 1, 1977."

Development of New Incentive System

Pub. L. 104–193, title III, §341(a), Aug. 22, 1996, 110 Stat. 2231 , required that Secretary of Health and Human Services, in consultation with State directors, develop new incentive system under this section that would provide additional payments to States based on performance and report to Congress no later than Mar. 1, 1997, prior to repeal by Pub. L. 105–200, title II, §201(e)(1)(A), July 16, 1998, 112 Stat. 657 .

Construction of Reference to Section 657(b) of This Title

Section 5(c)(2)(B) of Pub. L. 98–378 provided that: "The reference to provisions of section 457(b) of the Social Security Act [section 657(b) of this title] in the amendment made by subparagraph (A) of this paragraph [amending this section] is a reference to such provisions as in effect after the effective date of section 2640(b) of the Deficit Reduction Act of 1984 [effective date of section 2640(b) of Pub. L. 98–369, Oct. 1, 1984]."

Section Referred to in Other Sections

This section is referred to in sections 652, 654, 654a, 655 of this title; title 2 section 906.