(a)
If the federal government imposes a penalty on California’s child support program for failure to meet the federal automation requirements, the penalty, for purposes of this chapter, shall be considered a reduction of federal financial participation in county and state administrative costs of the child support program, and shall be allocated to each local child support agency in proportion to its administrative costs. In such a case, the department may hold penalties in abeyance and supplant any dollar reduction to county administrative funding, up to 100 percent of the reduction, subject to the availability of funds in the annual Budget Act. The department and the Department of Finance shall establish criteria under which the penalties may be held in abeyance to each local child support agency. Criteria for which these penalties may be held in abeyance include, but are not limited to, the following: The local child support agency has entered into an AACA with the department; the local child support agency is meeting all due dates in its work plan, including steps to resolve any Year 2000 problems; the local child support agency has resolved any federal distribution requirement problems; and the county is otherwise cooperating in its current automation and AACA requirements and establishing the California Child Support Automation System.
(b)
Any local child support agency that receives a reduction in federal funding as a result of the imposition of a federal penalty shall continue to comply with state and federal law and all requirements of the state plan and plans of cooperation, including the AACA.
(c)
This section shall become operative on July 1, 2004.