RE: Proposed Interstate Reform Initiative

Dear Mr. Barton:

I have had considerable discussions with North Dakota, and we decided to coordinate our comments on the IRI issues and concerns that we want to make. Consequently, you will recognize quite a bit of similarities in our comments.

While South Dakota promotes improvements for interstate case processing and appreciates the difficult task the IRI workgroup has faced, we believe that the proposed Interstate Reform Initiative model (IRI) will create major changes that exceed the scope of, and do not adequately address, existing problems. The existing problems with interstate case processing could be remedied more easily, more effectively, and with less disruption to the program by minor modifications rather than a reform of this magnitude. It seems apparent to us that while this proposal addresses some of the problems with interstate case processing, ultimately we believe it will cause as many, or more, problems as it will fixes. We oppose the proposed IRI.

We ask that States be given time to more fully implement the provisions of UIFSA, such as controlling order determinations. In addition, there are several other mechanisms and provisions, which will affect interstate case processing that, have yet to be fully implemented. Examples include CSENET and AEI. This should be done first, as well as an analysis of the effects of those mechanisms and provisions, prior to deciding if and how to reform interstate case processing. We feel that to move forward with a vast overhaul at this time is premature.

This correspondence is not intended to be all inclusive of our concerns. Unfortunately, due to other demands on our program, we do not have the time to address the proposal on a point-by-point basis. We hope, however, that this correspondence will provide enough information to give pause to those who are considering making this proposal a reality.

Automated System Considerations
States have worked long and hard to have automated systems which meet federal certification requirements and which are responsive to state program needs. These automated systems do not accommodate many of the concepts under the proposed IRI and thus, there would be substantial system design and programming needs. If this IRI were to be adopted, States must be given realistic implementation timeframes and enhanced federal funding in order to make the changes to the automated system. (However, even with reasonable timeframes and enhanced federal funding, we do not support this proposal.)

The following are some examples of automated system considerations:

• Automated systems would need to support two methods of case processing during the phase-in period. (The model is to be used prospectively and, as we understand it, would be phased in over a two to three year time period. To accommodate this, automated systems would need to concurrently support both old and new methods of case processing.)
  
• Automated systems would have to accommodate limited service requests and actions. We believe the full impact on automated systems to support these requests and actions is not fully appreciated at this point. We do know the impact would be very significant.
  
• Automated systems would have to ensure the Case Manager State's responsibility for distribution would be supported.
  
• Automated systems would need to support the Case Manager State's responsibility to prorate payments to arrears owed to multiple States.
  

1. Limited Services
   

We are strongly opposed to the IRI's concept of limited services. The concept of a quasi-case (for lack of a better term) is not one that we can support.

Currently, a State may request assistance from another State by sending a transmittal #3 to that other State. Such a request does not obligate the receiving State to respond. As we understand, the proposed IRI would eliminate the receiving State's discretion and obligate them to respond to limited service requests.

Perhaps the concept of limited services may make sense for things such as obtaining payment records, obtaining voluntary paternity acknowledgments, or finding out where a lien should be filed. However, IRI is proposing that nearly all interstate actions be taken through a limited service approach, rather than through the current two-state approach. In fact, it seems as if the current two-state approach would be all but eliminated.

It is not clear to us what the true advantages will be to move from our current two-state case processing to limited services. Currently, communication between States is often one of the barriers to effective interstate case processing. Under the proposed IRI, communication would still be vital and necessary. In fact, in many respects, communication between States would be even more important.

Additionally, many enforcement remedies are threshold-driven so that their availability is based upon the amount of the obligor's arrearage. Therefore, a Limited Services State must be aware of the obligor's arrears balance prior to determining if a particular enforcement technique may be applied in a particular case. In some instances, it will also be necessary for a Limited Services State to be kept abreast of the arrears balance so that appropriate subsequent actions may be taken as well. The proposed IRI does not, however, require the Case Manager State to provide updated arrears information to the Limited Services State. For example, if SD is the limited services state for enforcement, and we have a Professional/Drivers License repayment agreement in place and want to revoke for non-payment, we will have to contact the case manager state first to obtain a current payment record to insure it meets our criteria and threshold requirements for revocation. The same would be true for contempt or many other enforcement measures. Recent federal regulations and policies required states to proceed based upon threshold amounts and/or time frames, and other federal requirements mandated automation where possible when those thresholds were met. It appears the IRI concept may be a step backwards from immediate, quick enforcement action when the responding, or limited services state, does not have accurate payment records at its fingertips.

These types of situations will not be unusual. There are many other enforcement remedies in the States where thresholds apply for a variety of enforcement remedies. Case Manager States would be required to inform Limited Service States up to date of arrears balances on a regular basis. Was this contemplated by the IRI workgroup, and if so, how will this occur? If the Case Manager State failed to provide the Limited Service State with arrears information, could the Limited Service State refuse to provide the limited services? We see serious problems for the obligor and the Limited Service State. Finally, we understand that CSENET would be the mechanism used to send and receive updated arrears information between States. Comments regarding CSENET considerations are provided in a later comment.

AEI, in some ways, is a limited service enforcement provision. It seems prudent to wait to see how AEI performs prior to moving into limited services in a broader manner.

If limited services become a reality, many questions must be addressed. For example, do federal timeframes apply to the Limited Service State, or does the Case Manager State continue to be responsible for the timeframes even though a limited services request has been sent? Could Limited Service States be assessed performance penalties?

The two-state method of interstate case processing is effective and steps should be taken to perfect this method before it is effectively eliminated. The current two-state process allows receiving States necessary discretion and accountability when they receive interstate requests for enforcement. In addition, even under the proposed IRI, two-state cases cannot be completely eliminated. Adopting the proposed IRI will unnecessarily eliminate States' discretion and accountability with enforcement requests and will create a dual system of interstate case processing (both two-state and limited services). A single uniform system could be retained and perfected without such drastic reform.

Non-IV-D IRI issues
The IRI proposal appears to be developed with only IV-D cases in mind. In reality, the proposal would impact non-IV-D cases in ways that we believe have not been explored. We believe it is necessary to address IV-D and non IV-D issues together, but as we learned on the August 9, 2000, Region VIII conference call on IRI, non-IV-D IRI issues have not yet been considered.

The following are some examples of non-IV-D case considerations:

• The Case Manager State is defined as the State IV-D agency in which the individual applies or is referred for services as an applicant or recipient of public assistance. By its definition, there is an assumption of the existence of IV-D involvement, yet there is not IV-D involvement in every case. Certainly, UIFSA applies to both IV-D and non-IV-D cases. In non-IV-D cases in which there has never been IV-D involvement, is there a Case Manager State and if so, what entity would perform the services set forth as Case Manager State responsibilities? In non-IV-D cases in which there was IV-D involvement, does there continue to be a Case Manager State even when the case becomes non-IV-D and if so, what entity would perform the services set forth as Case Manager State responsibilities?
  
• We understand that IRI proposes that only the Case Manager State would be allowed to certify arrears for collection through federal tax offset and that the Case Manager State would certify to OCSE all arrears owed, including assigned arrears owed to other States. We further understand that a State with an assigned-arrears-only case could not certify their arrears for federal tax offset. This essentially requires that a State to whom assigned arrears are owed rely upon another to certify those assigned arrears. One example of when this concern would be applicable State follows: If South Dakota has an assigned-arrears-only case, and the Case Manager State is California because the custodial parent applied for non-TANF services (IV-D case), we understand California would certify the arrears owed to South Dakota. It is not clear, however, how South Dakota's assigned arrears would be certified if the custodial parent then requested the California case to be closed (non-IV-D case).
  

Tribal Issues
We are not sure how much consideration has been given to tribal issues throughout the IRI process thus far. We ask, however, that it is ensured that tribal issues are given consideration and, as appropriate, addressed.

1. CSENET Considerations
   

CSENET, when fully implemented and operational, is reportedly supposed to streamline interstate case processing. CSENET is not yet fully implemented and operational. We should wait to see what problems remain after CSENET prior to adopting a vast reform such as IRI.

Also, it seems that much of IRI is premised upon CSENET being fully implemented and operational. There has been a long history of problems with making the existing CSENET functions work and new functions will be required to facilitate the improved interstate communication envisioned by IRI. Both the existing and new functions must be operational when, and if, IRI is implemented. If these functions are not operational, IRI will be in trouble. However, there is no guarantee that States' present problems with CSENET, let alone any new CSENET functions, will be resolved when, and if, IRI is implemented. At this point, it is not realistic to expect CSENET to be the key to making the IRI model successful. Although we believe that CSENET may someday be a useful mechanism, we have limited assurance as to when that will be.

Resolution of Payments and Arrears
It appears before a limited services or responding state will be able to undertake any type of enforcement action that it will first have to obtain a current, accurate payment record of all payments from the case manager state. Regardless of the limited services actions, federal regulations must specify, in detail, procedures to reconcile arrears, and how the controlling order determination is to be made. Otherwise, every state will reconcile the arrears in a different manner.

Scope of IRI
The initial purpose of IRI was to require states to conduct the controlling order analysis and reconcile arrears as required under UIFSA. This is a commendable purpose and does need to be done, but this IRI concept goes much farther than that by creating new concepts like case manager state for collections, disbursements, payment records etc. It also creates new concepts like the controlling order state and the limited services states. If the goal of IRI was to insure controlling order determination and reconciliation of arrears by states under UIFSA, and this is still the goal, they can use their power point slide presentation 12 through 19 (excluding any references to the concept of a case manager state), and stop there. This will accomplish the purpose without delving in these much more far-reaching and problematic areas.

Interest and Fee Issues
The interest & fees issue, and the varying policies and procedures amongst the States, will be an ongoing problem that may never get resolved. Some States would allow interest on unpaid child support, but not require the IV-D agency to collect or account for it, whereas other States would.

Incentives Impact
States may well be at the mercy of the case manager state for collections, disbursements, or requests for enforcement, etc. Due to varying policies and procedures amongst the states on initiation of “appropriate” enforcement activity, a State may end up with poorer performance in the 5 key incentive measures than the current two State process. This could severely impact a State's incentives through no fault of its own. It could also severely impact a State's collections if the case manager state is not distributing collections as it is apparently required to. In particular, the incentive measures and achievement of performance in the current support collections, cases with collections on arrears, and the cost effectiveness ratio could be significantly affected. There will need to be significant federal oversight to ensure distributions are made as required when multiple states have assigned arrears.

Thank you for consideration of South Dakota's comments.

Sincerely,



Terry Walter
Administrator