§ Amends the Texas Family Code, implementing a number of changes, to integrate new federal welfare provisions into Texas statutes on child support. These changes include:

§ distinguishing between a new administrative writ of withholding and a judicial writ of withholding to clarify new administrative procedures of enforcement;

§ requiring employers to enroll children of an eligible employee in dependent health coverage as ordered by the court or if notified through the administrative procedure;

§ allowing a motion for child support enforcement to include a request that the person owing past due child support for a child receiving welfare pay the past due child support or participate in work activities deemed appropriate by the court;

§ redefining a child support lien to include provisions that recognize liens from other states, as well as additional and procedural changes to child support liens;

§ revising income withholding provisions for child support enforcement;

§ authorizing administrative actions by the child support enforcement agency to establish parentage, locate a parent, and enforce child and medical support (actions include administrative subpoenas for financial information, ordering genetic testing, and ordering income withholding);

§ reviewing child support orders once every three years, if the child support deviates by a certain amount from the child support guidelines, and making necessary adjustments to meet support guidelines;

§ establishing the failure of a welfare recipient to provide accurate information on the identity of the mother or father of the child as a basis for the child support agency to determine that a person who receives public assistance (welfare) did not cooperate with the child support agency;

§ providing for administrative subpoenas for individuals, or private or public entities, to furnish information for child support enforcement; and

§ developing a system meeting federal requirements for exchanging data with financial institutions to identify people owing past due child support.

State Case Registry and Disbursement Unit

§ Establishes a state case registry (registry) and a state disbursement unit (unit) required by federal welfare reforms.

§ Requires the registry and unit to maintain records in state child support enforcement cases (IV-D cases) and other cases established or modified on or after October 1, 1998.

§ Mandates the statewide integrated child support enforcement system to be part of the registry and unit.

§ Authorizes the child support agency to enter into contracts and cooperative agreements for establishing and operating the registry and unit.

Directory of New Hires

§ Establishes a state directory of new hires (directory).

§ Requires the child support agency, in cooperation with the Texas Workforce Commission, to develop the directory to which employers will be required to report new hires as of October 1, 1998.

§ Authorizes the child support agency to enter into contracts and cooperative agreements for establishing and operating the directory.

Medical Support Orders

§ Requires an insurer to provide coverage for a covered child who resides outside the insurer's service area, and whose coverage under a policy or plan is required by a medical support order, that is comparable coverage to that provided to other dependents under the policy or plan.

§ Requires the commissioner of insurance to adopt rules no later than January 1, 1998, to define "comparable coverage" in a manner consistent with federal law and that meet requirements to maintain federal Medicaid funding.

§ Allows a possessory conservator of a child to seek medical cost reimbursement directly from the managing conservator's insurer or group hospital plan.

§ Amends Texas' Uniform Interstate Family Support Act to comply with requirements of the Personal Responsibility and Work Opportunity Reconciliation Act in order to retain the federal subsidy for child support enforcement.

§ Allows Dallas County, through its commissioners court or its domestic relations office, if any, to contract with a private entity to enforce, collect, receive, and disburse child support and related payments.

§ Requires the commissioners court or the domestic relations office to include all appropriate terms and conditions in the contract that it deems reasonable to secure the services of the private entity.

§ Authorizes the commissioners court, in order to pay for the privatized program, to assess and collect:

§ a reasonable fee when a divorce or custody suit is filed;

§ a $3 per month fee for collecting the child support; and

§ a $4 per month late fee, if the child support is not paid on time.

§ Prohibits the commissioners court from charging the $3 per month fee if the ordered child support is less than $100 per month.

§ Authorizes the attorney ad litem to call, examine, or cross-examine witnesses.

§ Authorizes the court, during a divorce action, to require the parties to receive counseling on issues that confront children of divorce.

§ Clarifies certain Family Code provisions relating to enforcement and collection of child support, and refines provisions to track federal provisions set forth in federal welfare reform.

§ Requires the clerk of the court to collect certain fees when the suit is filed, and send the fees to the domestic relations office.

§ Authorizes a child support enforcement action which names a defendant to be used by the Texas Crime Information Center and the National Crime Information Center.

§ Authorizes the terms and conditions of community supervision to include the requirement that the respondent pay child support and any child support arrearages.

§ Provides that interest accrues from the date the judge signs the order for the judgment, unless the order contains a statement that the order is rendered on another specific date.

§ Adds a friend of the court to the list of persons authorized to file a request for an order or writ of withholding.

§ Authorizes, rather than requires, the filing of an action, by a friend of the court, to enforce, clarify, or modify a child support or custody order.

§ Authorizes a domestic relations office to hire or contract for attorney's services to assist the office in providing child support enforcement services.

§ States that the provisions on developing a statewide integrated system for child support and medical support enforcement do not limit the ability of the Title IV-D agency to enter into an agreement with a county for the provision of child support enforcement services.

§ Requires the Title IV-D agency to distribute a child support payment received by the agency from an employer within two working days after the date the agency receives the payment.

§ Makes it a Class B misdemeanor if the child support check is unable to be cashed because of a deficiency in the paying account.

§ Authorizes an employer to deduct a monthly administrative fee from an employee's disposable earnings, in addition to the amount required to be withheld for child support. Limits the fee to actual administrative cost or $10, whichever is less.

§ Expands the definition of "missing child" to include a child taken or retained in violation of the terms of a court order for possession of, or access to, the child.

§ Provides that a local law enforcement agency, upon locating a missing child, may take possession of that child, unless the child is subject to the continuing jurisdiction of a district court, and shall deliver the child to a person entitled to possession. If that person is not immediately available, the child shall be delivered to the Department of Protective and Regulatory Services.

§ Adds a person related within the second degree of consanguinity to the biological mother of the child, if the biological mother of the child is deceased, to the list of people allowed to contest the presumption that a man is the biological father of a child.

§ Requires the court to order reasonable visitation rights to either maternal or paternal grandparents of a child when the grandparent meets certain criteria, and access is in the best interest of the child.

§ Establishes specific criteria for a person who may provide family counseling as ordered by the court in child custody cases. Requires the counselor to be a mental health professional and meet other criteria.

§ Authorizes the court to appoint a person the court believes is qualified to conduct the counseling, if a qualified mental health professional is not available.

§ Allows a court to order additional periods of possession or access to a child to compensate for denial of periods of required possession or access and requires the periods to be of the same type and duration as the denied periods. Entitles the person who is denied access to decide the time for the additional possession or access, which must occur within one year of the time denied.

§ Lowers the minimum age from 12 to 10 at which a child is required to be interviewed in a suit in which the issue of managing conservatorship is contested, if requested by a party to the suit.

§ Authorizes the court to interview a child under the same circumstances.

§ Requires an attorney ad litem appointed to represent a child in a parental termination suit to investigate the facts of the case, obtain and review the child's relevant medical, psychological, and school records, and interview all parties to the suit.

§ Authorizes the court to include in a final order of a divorce or custody suit in which a party alleges child abuse or neglect, a finding on whether the party who made the abuse or neglect allegation knew that the allegation was false.

§ Authorizes the court to impose any civil sanction permitted under law, for false allegations.

§ Requires the court to impose a civil penalty not to exceed $500 on the party found to have made a false allegation of child abuse or neglect in a case affecting the parent-child relationship.

§ Authorizes a court to require the withdrawal of money from an inmate's trust fund account to reimburse the Texas Department of Human Services for financial assistance to provide for health needs of an inmate's child.

Review of Child Support Enforcement

§ Provides for a sunset review of the Office of the Attorney General's (OAG) involvement in matters related to child support enforcement, and requires the report to be given to the 76th Legislature.

§ Requires the Sunset Advisory Commission (commission) to select an independent firm with experience in evaluating government programs to conduct a comprehensive analysis of, and to make recommendations to the commission concerning the structure, efficiency, and effectiveness of OAG's involvement in matters relating to child support enforcement.

§ Requires the independent firm to consider and make recommendations whether child support enforcement should remain in the OAG, be privatized, or be transferred to an independent agency.

§ Requires the OAG to pay for the costs of the analysis by the firm.

§ Requires the State Council on Competitive Government (council) to:

§ establish an initiative called "Kids Can't Wait" to increase child support enforcement;

§ identify child support enforcement functions performed by the Title IV-D agency that may be competitively bid, and to make recommendations regarding competitive bidding of child support enforcement functions that are identified, after consulting with the Title IV-D agency;

§ establish guidelines for referral of child support enforcement cases to a contractor;

§ consider the benefits of the state's participation in an electronic parent locator network or similar national service designed to locate parents who owe child support; and

§ study the feasibility of cost recovery options in child support collection actions for children who do not receive public assistance.

Administration and Enforcement

§ Requires the person appointed by the attorney general as the person responsible for managing the Title IV-D agency's child support enforcement duties to report directly to the attorney general.

§ Limits the use of appropriations made to the Title IV-D agency for child support enforcement to be only for the purposes for which the money was appropriated.

§ Requires the Title IV-D agency, as part of the development of a statewide integrated system for child support and medical support enforcement, to establish a pilot program to improve the efficiency of court processing of family welfare cases.

§ Requires the Title IV-D agency to place child support information on the Internet to assist the public in child support matters.

§ Authorizes the Title IV-D agency to pay a contingency fee in a contract or agreement between the agency and a private agency or individual for child support enforcement functions.

§ Requires the Title IV-D agency to develop a program to identify publicly certain child support obligors who are delinquent in the payment of child support.

§ Authorizes the Title IV-D agency to offer a reward to an individual who provides information to the agency that leads to the collection of child support owed by an obligor who is delinquent in paying support.

§ Authorizes, rather than requires, the Title IV-D agency or a court to issue an order suspending a license of an obligor with overdue child support.

§ Requires the state case registry to provide information on the written request of a custodial parent whose case is in the state registry, but the Title IV-D agency is not providing enforcement services; or whose case would not be included under federal law, but who has applied to be in the registry.

§ Requires the Department of Public Safety to include in each notice sent to a driver's license holder a statement advising a holder who is delinquent in the payment of child support to make satisfactory arrangements or face possible driver's license suspension.

§ Updates child support lien and foreclosure provisions.