TO:	Honorable Harold V. Dutton, Jr., Chair, House Committee on Juvenile Justice & Family Issues
FROM:	Jerry McGinty, Director, Legislative Budget Board
IN RE:	HB4356 by Talarico (Relating to the dissolution of the Texas Juvenile Justice Department and the creation of the Office of Youth Safety and Rehabilitation.), As Introduced

The bill would amend the Human Resources Code to abolish the Texas Juvenile Justice Department (TJJD) and establish the Office of Youth Safety and Rehabilitation (the Office) within the Health and Human Services Commission (HHSC). According to the provisions of the bill, the Office would be governed and operated by a separate nineteen-member board. The bill would direct the Office to provide funding and disburse grants to local juvenile service providers, provide technical assistance, and establish a plan to improve the juvenile justice system, reduce juvenile commitments to state secure facilities, and increase community resources.

The bill would take effect on September 1, 2024. The bill would direct TJJD to transfer obligations, property, responsibilities, powers, and duties to the Office by September 1, 2030. Under the provisions of the bill, unexpended funds are transferred to the Office. The bill would subject the Office to review by the Sunset Commission.

The fiscal implications of the bill for HHSC cannot be determined due to uncertainty in how the bill would be implemented. The bill would establish the Office within HHSC but would also create a board as the governing body of the Office responsible for operations, therefore the extent of the Office's integration with HHSC is unknown.

According to HHSC, if it is assumed that the Office would be a separate agency under the board that is not administratively attached to HHSC, the bill would result in an estimated loss of $4.0 million in Federal Funds each fiscal year and a cost of $4.0 million in General Revenue each fiscal year due to changes in HHSC's federal cost allocation plan, which would be affected by HHSC's membership in the Office's governing board.

However, if it is assumed the bill would instead establish the Office as a department within HHSC, there would be significant costs to consolidate administrative functions currently at TJJD, but a specific estimate cannot be provided at this time due to uncertainty in the timing and scale of consolidation. In addition, costs related to new functions of the Office, including those related to developing and adopting a plan to improve the juvenile justice system, cannot be estimated due to uncertainty in the specific programs that would be developed and adopted by the new office.

The bill would repeal several chapters of the Human Resources Code related to the administration and general powers and duties of the TJJD Board and TJJD. Based on information from TJJD, the fiscal implications of the bill cannot be determined due to uncertainty in the timing and scale of transfer to the Office. Any fiscal impact would be dependent on any unexpended balances transferred to the Office as directed in the bill. TJJD spent $325.9 million in All Funds in fiscal year 2022, which includes $173.4 million in All Funds for grants and basic supervision funding to local probation departments, $117.3 million in All Funds for the operation of secure facilities, halfway houses, and contract residential placements, and $25.4 million in All Funds for administration and support, Information Resources, and the Office of the Inspector General.

Based on information from the Texas Education Agency and the Texas Facilities Commission, any costs associated with the provision of the bill could be absorbed within existing resources.

Local Government Impact

Local juvenile probation boards and departments may experience a fiscal impact resulting from changes in funding methodology to local probation departments and community service providers, but the extent of that impact cannot be determined.