(1) In federal fiscal year 2000 and each federal fiscal year thereafter, one hundred percent of the federal incentives received by the state shall be passed through to the county departments. The state board shall promulgate rules specifying performance measures pursuant to which incentives shall be distributed to the county departments.

(2) A county to which a payment is made pursuant to this section shall expend the full amount of the payment to supplement, and not supplant, other funds used by the county department for any of the following purposes:

(a) To carry out the approved state plan; or

(b) For any activity, including cost-effective contracts, approved by the state division of child support enforcement, whether or not the expenditures for the activity are eligible for federal reimbursement, that may contribute to improving the effectiveness or efficiency of the child support program.

(3) If federal incentives paid to any county department are greater than its share of child support administrative costs, then that county department shall demonstrate how the federal incentive money is expended and contributes to the program as defined in paragraph (b) of subsection (2) of this section.

(4) All federal and state incentives paid to counties pursuant to section 26-13-108 shall be divided and distributed to the county departments according to the distribution formula as promulgated in state rule by the state board, to be promulgated no later than January 1, 2000.

(5) The state department shall pay incentives to county departments on a quarterly basis.

(6) This section shall take effect January 1, 2000.