ASSIGNMENT AND DISTRIBUTION OF CHILD SUPPORT.

SEC. 7301. ASSIGNMENT AND DISTRIBUTION OF CHILD SUPPORT.(a) Modification of Rule Requiring Assignment of Support Rights as a Condition of Receiving TANF.—Section 408(a)(3) (42 U.S.C. 608(a)(3)) is amended to read as follows:“(3) No assistance for families not assigning certain support rights to the state.—A State to which a grant is made under section 403 shall require, as a condition of paying assistance to a family under the State program funded under this part, that a member of the family assign to the State any right the family member may have (on behalf of the family member or of any other person for whom the family member has applied for or is receiving such assistance) to support from any other person, not exceeding the total amount of assistance so paid to the family, which accrues during the period that the family receives assistance under the program.”.(b) Increasing Child Support Payments to Families and Simplifying Child Support Distribution Rules.—(1) Distribution rules.—(A) In general.—Section 457(a) (42 U.S.C. 657(a)) is amended to read as follows:“(a) In General.—Subject to subsections (d) and (e), the amounts collected on behalf of a family as support by a State pursuant to a plan approved under this part shall be distributed as follows:“(1) Families receiving assistance.—In the case of a family receiving assistance from the State, the State shall—“(A) pay to the Federal Government the Federal share of the amount collected, subject to paragraph (3)(A);“(B) retain, or pay to the family, the State share of the amount collected, subject to paragraph (3)(B); and“(C) pay to the family any remaining amount.“(2) Families that formerly received assistance.—In the case of a family that formerly received assistance from the State:“(A) Current support.—To the extent that the amount collected does not exceed the current support amount, the State shall pay the amount to the family.“(B) Arrearages.—Except as otherwise provided in an election made under section 454(34), to the extent that the amount collected exceeds the current support amount, the State—120 STAT. 142“(i) shall first pay to the family the excess amount, to the extent necessary to satisfy support arrearages not assigned pursuant to section 408(a)(3);“(ii) if the amount collected exceeds the amount required to be paid to the family under clause (i), shall—“(I) pay to the Federal Government the Federal share of the excess amount described in this clause, subject to paragraph (3)(A); and“(II) retain, or pay to the family, the State share of the excess amount described in this clause, subject to paragraph (3)(B); and“(iii) shall pay to the family any remaining amount.“(3) Limitations.—“(A) Federal reimbursements.—The total of the amounts paid by the State to the Federal Government under paragraphs (1) and (2) of this subsection with respect to a family shall not exceed the Federal share of the amount assigned with respect to the family pursuant to section 408(a)(3).“(B) State reimbursements.—The total of the amounts retained by the State under paragraphs (1) and (2) of this subsection with respect to a family shall not exceed the State share of the amount assigned with respect to the family pursuant to section 408(a)(3).“(4) Families that never received assistance.—In the case of any other family, the State shall distribute to the family the portion of the amount so collected that remains after withholding any fee pursuant to section 454(6)(B)(ii).“(5) Families under certain agreements.—Notwithstanding paragraphs (1) through (3), in the case of an amount collected for a family in accordance with a cooperative agreement under section 454(33), the State shall distribute the amount collected pursuant to the terms of the agreement.”.(B) State option to pass through additional support with federal financial participation beginning with fiscal year 2009.—(i) In general.—Section 457(a) (42 U.S.C. 657(a)) is amended by adding at the end the following:“(7) State option to pass through additional support with federal financial participation.—“(A) Families that formerly received assistance.—Notwithstanding paragraph (2), a State shall not be required to pay to the Federal Government the Federal share of an amount collected on behalf of a family that formerly received assistance from the State to the extent that the State pays the amount to the family.“(B) Families that currently receive assistance.—“(i) In general.—Notwithstanding paragraph (1), in the case of a family that receives assistance from the State, a State shall not be required to pay to the Federal Government the Federal share of the excepted portion (as defined in clause (ii)) of any amount collected on behalf of such family during a month to the extent that—“(I) the State pays the excepted portion to the family; and120 STAT. 143“(II) the excepted portion is disregarded in determining the amount and type of assistance provided to the family under such program.“(ii) Excepted portion defined.—For purposes of this subparagraph, the term “excepted portion” means that portion of the amount collected on behalf of a family during a month that does not exceed $100 per month, or in the case of a family that includes 2 or more children, that does not exceed an amount established by the State that is not more than $200 per month.”.(ii) Effective date.—The amendment made by clause (i) shall take effect on October 1, 2008.(iii) Redesignation.—Effective October 1, 2009, paragraph (7) of section 457(a) of the Social Security Act (as added by clause (i)) is redesignated as paragraph (6).(C) State plan to include election as to which rules to apply in distributing child support arrearages collected on behalf of families formerly receiving assistance.—Section 454 (42 U.S.C. 654) is amended—(i) by striking “and” at the end of paragraph (32);(ii) by striking the period at the end of paragraph (33) and inserting “; and”; and(iii) by inserting after paragraph (33) the following:“(34) include an election by the State to apply section 457(a)(2)(B) of this Act or former section 457(a)(2)(B) of this Act (as in effect for the State immediately before the date this paragraph first applies to the State) to the distribution of the amounts which are the subject of such sections and, for so long as the State elects to so apply such former section, the amendments made by subsection (b)(1) of section 7301 of the Deficit Reduction Act of 2005 shall not apply with respect to the State, notwithstanding subsection (e) of such section 7301.”.(2) Current support amount defined.—Section 457(c) (42 U.S.C. 657(c)) is amended by adding at the end the following:“(5) Current support amount.—The term ‘current support amount’ means, with respect to amounts collected as support on behalf of a family, the amount designated as the monthly support obligation of the noncustodial parent in the order requiring the support or calculated by the State based on the order.”.(c) State Option To Discontinue Older Support Assignments.—Section 457(b) (42 U.S.C. 657(b)) is amended to read as follows:“(b) Continuation of Assignments.—“(1) State option to discontinue pre-1997 support assignments.—“(A) In general.—Any rights to support obligations assigned to a State as a condition of receiving assistance from the State under part A and in effect on September 30, 1997 (or such earlier date on or after August 22, 1996, as the State may choose), may remain assigned after such date.120 STAT. 144“(B) Distribution of amounts after assignment discontinuation.—If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected pursuant to the assignment as if the amounts had never been assigned and may distribute the amounts to the family in accordance with subsection (a)(4).“(2) State option to discontinue post-1997 assign- ments.—“(A) In general.—Any rights to support obligations accruing before the date on which a family first receives assistance under part A that are assigned to a State under that part and in effect before the implementation date of this section may remain assigned after such date.“(B) Distribution of amounts after assignment discontinuation.—If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected pursuant to the assignment as if the amounts had never been assigned and may distribute the amounts to the family in accordance with subsection (a)(4).”.(d) Conforming Amendments.—Section 6402(c) of the Internal Revenue Code of 1986 (relating to offset of past-due support against overpayments) is amended—(1) in the first sentence, by striking “the Social Security Act.” and inserting “of such Act.”; and(2) by striking the third sentence and inserting the following: “The Secretary shall apply a reduction under this subsection first to an amount certified by the State as past due support under section 464 of the Social Security Act before any other reductions allowed by law.”.(e) Effective Date.—(1) In general.—Except as otherwise provided in this section, the amendments made by the preceding provisions of this section shall take effect on October 1, 2009, and shall apply to payments under parts A and D of title IV of the Social Security Act for calendar quarters beginning on or after such date, and without regard to whether regulations to implement the amendments (in the case of State programs operated under such part D) are promulgated by such date.(2) State option to accelerate effective date.—Notwithstanding paragraph (1), a State may elect to have the amendments made by the preceding provisions of this section apply to the State and to amounts collected by the State (and the payments under parts A and D), on and after such date as the State may select that is not earlier than October 1, 2008, and not later than September 30, 2009.(f) Use of Tax Refund Intercept Program To Collect Past-Due Child Support on Behalf of Children Who Are Not Minors.—(1) In general.—Section 464 (42 U.S.C. 664) is amended—(A) in subsection (a)(2)(A), by striking “(as that term is defined for purposes of this paragraph under subsection (c))”; and(B) in subsection (c)—(i) in paragraph (1)—120 STAT. 145(I) by striking “(1) Except as provided in paragraph (2), as used in” and inserting “In”; and(II) by inserting “(whether or not a minor)” after “a child” each place it appears; and(ii) by striking paragraphs (2) and (3).(2) Effective date.—The amendments made by paragraph (1) shall take effect on October 1, 2007.(g) State Option To Use Statewide Automated Data Processing and Information Retrieval System for Interstate Cases.—Section 466(a)(14)(A)(iii) (42 U.S.C. 666(a)(14)(A)(iii)) is amended by inserting before the semicolon the following: “(but the assisting State may establish a corresponding case based on such other State’s request for assistance)”.