BILL ANALYSIS H.B. 1863 By: Hilderbran, Stiles, et al 3-29-95 Committee Report (Substitute) BACKGROUND The Aid to Families with Dependent Children (AFDC) program provides cash assistance to families with children who are deprived of financial support due to the absence, death, disability, or unemployment of one or both parents. Approximately 225,000 Texas families receive welfare in Texas, with the typical AFDC family in Texas consisting of a single mother and her two children. Following standards established in federal laws and regulations, states determine a welfare recipient's eligibility and calculate the payment rate. Texas applies one of the most stringent income tests in the nation. While the AFDC family grant averages $388 per month nationally, the average Texas grant amounts to $188 per month, or about $58 per person. Funds for AFDC grants derive from state and federal sources, with state general revenue matched at a rate of 64% federal and 36% state funds. AFDC eligibility also entitles a family to additional public assistance in the form of food stamps, medical assistance (Medicaid), and work skills training or education through the federal Job Opportunities and Basic Training Skills (JOBS) program, and related support services of child care and transportation. All caretakers aged 16-60 must participate in the JOBS program unless have children under the age of three, are attending public school, or are ill or incapacitated themselves or caring for a household member who is ill or incapacitated. Begun in 1990, JOBS serves approximately 39,000 Texas clients each month. The program's funding stems from state and federal sources. Texas, however, has failed to draw down its full allotment in any year. PURPOSE House Bill 1863, as substituted, would establish a new system to encourage families receiving AFDC to move toward self-sufficiency by eliminating barriers to employment and disincentives that currently exist current welfare laws and regulations. This omnibus bill would place a cap on a welfare family's size; require the recipient to meet certain conditions for continued eligibility and sign an agreement of consent; require the state provide job training, education and other services, subject to the availability of funds; incorporate a time-limited approach with regards to a mandatory work program for AFDC families (including transitional benefits), based upon an assessment of each families' needs; strengthen child support enforcement efforts through license suspension for delinquent obligors and intervention for noncustodial parents. The bill also permits local workforce development board to provide job training for AFDC recipients as well as supported employment for people with disabilities through demonstration projects; numerous pilot projects are authorized. Expansion of the state's use of Emergency Assistance funding for mental health, substance abuse, foster care and educational services is authorized. Attempts at integrating eligibility, privatizing certain services, preventing fraud and reducing error are authorized. And finally, the Health & Human Services Comm'n would perform duties relating to approval of workload standards, transfers of funds and strategic plans, leasing of office space, and loan of agency staff would be permitted. RULEMAKING AUTHORITY In Texas, the Department of Human Services (DHS) administers the AFDC program. C.S.H.B. 1863 would expand DHS' authority to amend or adopt rules as necessary to implement the provisions of the bill. C.S.H.B. 1863 grants new rulemaking authority to DHS (or other agencies) in the following sections: SECTIONS 1.02(b) in Sec. 31.003; 1.04 in Sec. 31.010(d); 2.02 in Sec. 31.0031(b)(3),(b)(6), (b)(8), (c)(DHS, in conjunction with TCADA), (d)(DHS, in conjunction with Central Education Agency), and (e), Sec. 31.0033(d); 2.03 in Sec. 11.2093; 2.04 in Sec. 31.015(a)(TCADA), (a)(2)(DHS, in conjunction with TCADA), (b)(by TCADA, in conjunction with DHS); 3.01 in Sec. 31.0065(a); 3.02 in Sec. 31.0035(a); 3.03 in Sec. 32.0255(a)(the bill does not identify the specific agencies that would be involved); 4.01(a) in Sec. 31.012(b) and 4.01(c); 4.03 in Sec. 31.0126(a)(DHS, in cooperation with the state agency charged with primary responsibility for job training, employment, and workforce development) and (c); 5.05(a) in Sec. 76.116 (by the Title IV-D agency); 7.06(c); 7.07(b); 8.10 in Sec. 31.0325(a)(DHS, in conjunction with other appropriate, but unidentified agencies) and (b). SECTION BY SECTION ANALYSIS ARTICLE 1. FAMILY GRANT; SUPPORT SERVICES; PARENTING SKILLS TRAINING; RESOURCE LIMITS SECTION. 1.01. PRIORITY OF ASSISTANCE. Amends Sec. 31.001, Human Resources Code, by directing the Department of Human Services (DHS), in administering aid, to give first priority to unemployed adult recipients in finding and retaining a job. SECTION 1.02. FAMILY GRANT. Amends Sec. 31.003, H.R. Code, as follows: (a) Sec. 31.003. AMOUNT OF FINANCIAL ASSISTANCE. (a) Continues previously delegated rulemaking authority for DHS with regard to the amount of the grant, but prohibits DHS from providing additional AFDC benefits for children born more than 10 months after the family initially becomes eligible for financial assistance. An exception is permitted for a mother who has been off the AFDC rolls for 12 months and reapplies for AFDC. (b) Directs DHS when calculating the amount of the family's grant to make deductions and increase the disregard by $30 if the mother is employed. Strikes provisions (b) and (c) allowing the Dept. to establish grant levels. (b) Sec. 31.003. AMOUNT OF FINANCIAL ASSISTANCE. As an alternative, removes DHS' rulemaking authority to establish a family's grant, and sets the grant in statute at a maximum of $184 per month--or for the support of dependent children in the care of a "payee" rather than a parent, at 70% of the maximum amount--regardless of the number of dependent children in the family. However, allows DHS by rule to set a higher grant level for families headed by a caretaker who has a physical or mental disability. Strikes (b) and (c) allowing DHS to establish grant levels. (c) Subsection (b) would only take effect if a federal court or appellate court rules Subsection (a) to be invalid. (d) Effective date, applies to AFDC paid on or after Sept. 1, 1995. SECTION 1.03. NEEDS ASSESSMENT. Adds new Sec. 31.0095, H.R. Code, instructing DHS to assess each AFDC family's needs and develop an employability plan. SECTION 1.04. SUPPORT SERVICES. Amends Sec. 31.010, H.R. Code, by labeling current provision (a) and adding subsections (b) through (e), as follows: (a) Subject to the availability of funds, requires DHS to provide AFDC recipients and their families with the services needed to achieve independence from public assistance. (b) Requires DHS to consider the needs assessment and employability plan in determining what support services are needed. (c) Lists support services, including job placement, work skills training, education, child care, and transportation, among others. (d) Permits DHS by rule to provide for the implementation of support services. (e) Allows DHS to contract out with any public or private entity for the provision of services. SECTION 1.05. PARENTING SKILLS TRAINING; SAFETY OF CHILDREN. Amends Sec. 31.0135(a), H.R. Code, by requiring DHS, in cooperation with the Education Agency (TEA), Dept. of Protective & Regulatory Services, TX Agricultural Extension Service, or other public or private entity, to develop a parenting skills training program, including topics such as nutrition, budgeting, and physical and emotional safety for children. (b) Requires all AFDC caretakers--not just teen parents--to receive training in parenting skills, as needed. (c) Defines "caretaker relative." SECTION 1.06. TEENAGE PREGNANCY. Amends Sec. 31.0315, H.R. Code, by adding a new subsection (f) which instructs the Title IV-D agency, the Texas Attorney General (AG), to refer to local law enforcement agencies cases of statutory rape which may result in child AFDC recipients. SECTION 1.07. RESOURCE LIMITS FOR AFDC RECIPIENTS. Amends Sec. 31.032, H.R. Code, by adding new subsections (d) and (e) as follows: (d) Lists the resources or assets DHS must exclude when calculating benefits, including a cash amount of $2,000 (or $3,000 if person has disability or elderly person in the household) and fair market value of one motor vehicle, according to a schedule. These limits track the U.S.D.A. regulations for the food stamp program. (e) Permits DHS to adjust standards if the federal regulations are revised. ARTICLE 2. RESPONSIBILITY AGREEMENT. SECTION 2.01. APPLICATION FOR ASSISTANCE. (a) Amends Sec. 31.031, H.R. Code, by adding (c), (d) and (e) as follows: (c) Requires DHS to require that applicants for financial assistance show proof that each AFDC recipient meets certain citizenship and immunization standards. (d) Requires DHS to explain to applicants the work requirements, time limits and other portions of the agreement and the AFDC applicant must sign the agreement. (e) The agreement must list the state's responsibilities and provide case information. (b) Applies to applicants on or after the bill's effective date. SECTION 2.02. RESPONSIBILITY AGREEMENT. (a) Amends Chapter 31, Human Resources Code, by adding new Sections 31.0031, .0032 and .0033 to read as follows: Sec. 31.0031(a) Prohibits DHS from providing AFDC unless applicants comply with every part of the responsibility agreement. (b) Requirements include: (1) cooperating in the determination of a dependent child's paternity; (2) receiving EPSDT and immunizations, if needed and accessible; (3) not quitting a 30-hour-per-week job, according to rules adopted by DHS; (4) participating in activities leading to self-sufficiency, such as education, job placement, volunteering or community service; (5) abstaining from using, selling or possessing marijuana or controlled substances; (6) complying with random screening for illegal drugs, according to DHS rules on testing; (7) attending school regularly; (8) complying with DHS rules on school attendance; (9) attending parenting skills training. (c) Grants DHS, in conjunction with the Texas Commission on Alcohol & Drug Abuse (TCADA), rulemaking authority relating to random screening. (d) Permits DHS, in conjunction with the Central Education Agency (TEA), authority to make rules relating to school attendance requirements. (e) Exempts caretakers of children age 5 and under, if all slots in the JOBS program are filled. However, if slots are available, DHS, by rule, may establish a process to enroll caretakers with younger children. (f) Defines "caretaker relative." Sec. 31.0032. BENEFITS WITHHELD. (a) Permits DHS to withhold the AFDC grant from recipients who do not comply with the terms of the responsibility agreement, unless they can show good cause. (b) Requires DHS to notify the carertaker regarding withholding of benefits. Sec. 31.0033. GOOD CAUSE NONCOMPLIANCE HEARING. (a) Permits recipients to request a hearing to show good cause for noncompliance with the responsibility agreement; (b) Requires DHS to hold a hearing promptly if a timely request is made; (c) Directs DHS to withhold assistance until the recipient comes into compliance with the terms of the agreement; (d) Delegates to DHS rulemaking authority to establish criteria for good cause noncompliance. (Sec. 2.02 continued) (b) Transition language, applying provisions of responsibility agreement to persons who apply for AFDC after the bill's effective date. (c) Requires DHS to have recipients who are renewing AFDC benefits to sign the agreement at renewal time to continue to receive benefits; prohibits DHS from enforcing terms of agreement on person who has not signed. SECTION 2.03. CONFORMING AMENDMENT: MANDATORY SCHOOL ATTENDANCE. Amends Chapter 11 of the Education Code by adding a new Sec. 11.2093 as follows: Sec. 11.2093. ATTENDANCE RECORDS: AFDC RECIPIENTS. Instructs TEA to cooperate with DHS in providing applicants with the records necessary to prove school attendance by dependent children and teen parents, in accordance with rules adopted by DHS. SECTION 2.04. MANDATORY SUBSTANCE ABUSE SCREENING. Amends Chapter 31, H.R. Code by adding new Sec. 31.015 as follows: Sec. 31.015. MANDATORY SUBSTANCE-ABUSE SCREENING. (a) If TCADA determines, under rules adopted by TCADA, that a caretaker is using marijuana or other controlled substances, the recipient must: (1) undergo screening for such dependency and maintain satisfactory progress in an appropriate treatment program, subject to the availability of funds; and (2) comply with rules adopted by DHS in conjunction with the TX Comm'n on Alcohol & Drug Abuse relating to random screening for substance abuse. (b) Grants TCADA the authority to adopt rules, in conjunction with DHS, relating to determination of substance abuse dependency, screening and treatment. (c) Instructs DHS not to provide AFDC benefits to recipients who fail to comply. (d) Defines "caretaker relative." (b) Applies to persons receiving AFDC on or after the bill's effective date. (c) Provides for implementation on a gradual basis from the bill's effective date. ARTICLE 3. TIME-LIMITED AND TRANSITIONAL BENEFITS. SECTION 3.01. TIME-LIMITED BENEFITS. (a) Amends Chapter 31, H.R. Code by adding new Sec. 31.0065 as follows: Sec. 31.0065(a) Instructs DHS to provide AFDC in accordance with the time limits laid out below; permits DHS by rule to make exceptions in cases of personal hardship or community economic factors which prevent recipients from working or when the state cannot provide support services. (b) Directs DHS to limit AFDC and transitional benefits based on recipients' education and prior work experience, as follows: (1) 6 months of cash benefits, 6 months transitional benefits for caretakers who have a high school diploma or equivalent and work experience lasting 18 months or more. (2) 12 months of cash benefits, 6 months transitional benefits for caretakers who have either a high school diploma or equivalent or work experience lasting 18 months or more. (3) 24 months of cash benefits, 12 months transitional benefits for caretakers who have completed three years of high school or worked 6-18 months. (4) 36 months of cash benefits, but no transitional benefits (unless the recipient becomes employed in which case 12 months of transitional benefits are allowed) for caretakers who have less than three years of high school education and less than six months work experience. (c) DHS must perform an in-depth needs assessment when persons in Group (4) apply for AFDC and refer such clients to the appropriate services. However, their time limit does not begin until 12 months after the assessment is completed. (d) Time limits commence when recipients receive notice regarding the work or employment activity. (e) When evaluating a recipient with regard to time-limited benefits, DHS must consider the person's needs assessment and the prevailing local economic/employment conditions. (b) Directs DHS to implement the time limits statewide on a gradual basis. SECTION 3.02. Amends Chapter 31, H.R. Code, by adding Sec. 31.0035 as follows: Sec. 31.0035. TRANSITIONAL CHILD-CARE SERVICES. (a) Requires DHS, by rule, to provide transitional child-care services to persons who are no longer eligible for AFDC because their household income increased due to employment or their time limits were exhausted. (b) Allows DHS to provide prescribed limited benefits according to schedule above or 12 months of benefits. SECTION 3.03. Amends Chapter 32, H.R. Code, by adding Sec. 32.0255 as follows: Sec. 32.0255. TRANSITIONAL MEDICAL ASSISTANCE. (a) Requires the state, without identifying the specific agencies involved, to provide transitional medical assistance (Medicaid) services, in accordance with state rules and federal laws, to persons who are no longer eligible for AFDC because their household income increased due to employment or their time limits were exhausted. (b) Allows DHS to provide prescribed limited benefits according to schedule above or 12 months of benefits. ARTICLE 4. WORK PROGRAMS. SECTION 4.01. EMPLOYMENT OR VOLUNTEER WORK PROGRAM. Amends Sec. 31.012, H.R. Code as follows: Sec. 31.012. MANDATORY WORK OR PARTICIPATION IN EMPLOYMENT ACTIVITIES THROUGH THE JOBS PROGRAM. (a) DHS must require adult AFDC recipients to work not less than 30 hours per week or participate in a JOBS activity not less than 20 hours per week, during any one-month period; strikes provision on discontinuance of federal funds for JOBS program. (b) Permits DHS to make rules to establish good cause noncompliance with the work requirement. (c) Exempts caretakers of children age five and under; but if they choose to volunteer, provides an additional 6 months of transitional benefits as an incentive. (b) Applies work requirements to people receiving AFDC on or after Sept. 1, 1995. (c) Requires DHS to adopt rules relating to good cause noncompliance by Dec. 1, 1995. SECTION 4.02. VOLUNTEER WORK EXPERIENCE PROGRAM. Amends Subsections (a), (b) and (d) of Sec. 31.0125, H. R. Code, continuing DHS' current rulemaking authority to operate the volunteer program, but strikes the word "community" and substitutes "volunteer". (c) Expands the volunteer work experience program to include opportunities in local government offices, the private sector or nonprofit organizations in addition to public entities as sites for recipients to obtain work skills training. Deletes the provision requiring contracting entities to employ at least 250 persons and deletes waiver provision. (b) Applies provisions of volunteer work experience program to recipients on or after Sept. 1, 1995. SECTION 4.03. EMPLOYMENT PROGRAMS. Amends Chapter 31, H.R. Code, by adding new Sec. 31.0126 as follows: Sec. 31.0126. EMPLOYMENT PROGRAMS. (a) Requires DHS, in cooperation with the state agency for workforce development, to develop by rule job programs for AFDC recipients, including work first, business internships, Texas works, community work experience, subsidized employment, and self-employment. (b) Requires DHS to develop work programs in accordance with the federal JOBS program. (c) Requires DHS to adopt rules to establish eligibility criteria for the JOBS program, allowing for certain recipients who may be unable to participate, and provide technical assistance to local workforce development boards. (d) Local workforce development boards would be permitted to implement any of the listed work programs. (e) DHS must submit a waiver application to the federal government to implement local work programs, if required. (f) Defines "local workforce development board." SECTION 4.04. DEMONSTRATION PROJECTS; FUND. Amends Article 5190.7a, V.T.C.S., by adding Sections 4.055-4.057 as follows: Sec. 4.055. DEMONSTRATION PROJECTS. (a) Defines "board" and "workforce development agency." (b) Permits local workforce development boards to establish and operate education and training programs; (c) Requires local boards to submit written program proposals to the state workforce agency; requires workforce agency to approve certain programs. (d) Work programs administered by local boards would be local demonstration projects; local boards must report quarterly on the effectiveness of the projects. (e) Changes would have to be approved by the state workforce agency. Sec. 4.056. CERTAIN PROGRAMS FOR AFDC RECIPIENTS. (a) Directs local workforce boards to adopt programs to enhance AFDC recipients' participation in the JOBS program; the state workforce agency would provide technical assistance as needed. (b) Programs could be adapted by local boards to fit the needs of the recipients residing in the area. (c) Programs would have to be approved by the state workforce agency before implemented. (d) Defines "JOBS training program." Sec. 4.057. REVOLVING FUND ACCOUNT. (a) Creates a special revolving fund account in the state treasury to provide loans to local boards for demonstration projects. (b) Funds in the account would derive from money appropriated by the Legislature, donations, repayment of loans, revenue from state and federal education, training, and job programs, and interest earned. (c) Local boards must repay money borrowed when permanent revenue is available from state and federal education, training and job programs. (d) Govt. Code Secs. 403.094 and 403.095 relating to funds consolidation do not apply. SECTION 4.05. TEEN JOBS PILOT PROGRAM. (a) Instructs TEA, in conjunction with DHS and the Comptroller, to establish pilot projects in at least four school districts to help teenage parents stay in school. (b) Services may include parenting services, child care, transportation, tutorial services, guidance and career counseling, mentor programs, on-the-job training and other allowable relevant services. (c) Requires TEA to report on the project to the Governor and Legislature. (d) This section expires January 1, 1999. SECTION 4.06. FEDERAL WORK HISTORY AND 100-HOUR RULE WAIVER. Directs DHS to reapply for a waiver of federal rules in order to implement Sec. 31.014, H.R. Code, to assist AFDC two-parent families in staying together. ARTICLE 5. CHILD SUPPORT ENFORCEMENT. SECTION 5.01. PRIORITY GIVEN TO AFDC CHILD SUPPORT CASES; SUPPORT FOR CHILDREN IN SUBSTITUTE CARE. Amends Sec. 76.003, H.R. Code, by adding new subsections (g) and (h) as follows: (g) Directs the AG to prioritize AFDC cases when handling child support cases. (h) Instructs the AG to adopt procedures to transfer to the Dept. of Protective & Regulatory Services (DPRS) any child support payments collected for children in the custody of DPRS who would otherwise be eligible for AFDC, in order to help defray the cost of foster care. SECTION 5.02. CONFORMING AMENDMENT: SUBSTITUTE CARE. Amends Sec. 14.05, Family Code, by adding Subsections (k) and (l) as follows: (k) Permits the court to order parents to make child support payments for children in the temporary custody of DPRS. (l) Such payments must be paid to DPRS through the state registry. SECTION 5.03. CONFORMING AMENDMENT: CHILD SUPPORT SERVICES. Amends Chapter 76, H.R. Code, by designating Sections 76.001-76.011 as Subchapter A and adding a new heading, Title IV-D Child Support Services. SECTION 5.04. INTERVENTION ASSISTANCE FOR UNEMPLOYED NONCUSTODIAL PARENTS. Amends Chapter 76, H.R. Code, by adding Sec. 76.012 as follows: Sec. 76.012. UNEMPLOYED NONCUSTODIAL PARENTS. (a) Instructs the AG to refer unemployed noncustodial parents who owe child support for AFDC eligible children to the appropriate state or local intervention assistance programs. (b) Programs may include skills training and job placement, education and literacy, and counseling on substance abuse, parenting skills, life skills and mediation techniques. SECTION 5.05. SUSPENSION OF STATE-ISSUED LICENSES. (a) Amends Chapter 76, H.R. Code, by adding a new Subchapter B as follows: Subchapter B: Suspension of License for Failure To Pay Child Support in Title IV-D Cases Sec. 76.101. DEFINITIONS. Provides definitions of terms used in the subchapter, including "child support agency," "license," (which includes occupational, professional, business, motor vehicle or other regulated or recreational activity), "licensing authority," "order suspending license," "Title IV-D agency" (the Texas Attorney General)(AG) and "Title IV-D case." Sec. 76.102. LICENSING AUTHORITIES SUBJECT TO SUBCHAPTER. Sets out list of 52 state agencies that issue licenses or permits. Sec. 76.103. SUSPENSION OF LICENSE. Directs the Title IV-D agency (AG) to suspend licenses if an obligor (noncustodial parent) owes support for 90 days or more, has agreed to repay the debt, but failed to make payments. Sec. 76.104. PETITION FOR SUSPENSION OF LICENSE. A county or district attorney or other county officer with a cooperative agreement with the AG or the obligee may file a petition to suspend a license with the AG's office of child support enforcement. Contested case proceedings in the Texas Administrative Procedures Act (APA) apply. Sec. 76.105. CONTENTS OF PETITION. Lists details that must be included in a petition. Sec. 76.106. NOTICE. Requires the AG to notify the obligor that his license may be suspended after 60 days, and explain the procedures to be followed by the state and the obligor. Sec. 76.107. HEARING ON PETITION TO SUSPEND LICENSE. Permits obligor to ask for a hearing within 20 days of receiving notice; requires the AG to schedule the hearing promptly; provides that a record of child support payments made constitutes evidence. Sec. 76.108. ORDER SUSPENDING LICENSE. Requires the AG to suspend a license, unless the obligor proves that all arrearages and the current month's child support payments have been made; permits a stay of the suspension if the obligor complies with repayment schedule; requires the AG to forward its order of suspension to the appropriate licensing agency; prohibits obligor from engaging in licensed activity; also suspension or order. Sec. 76.109. DEFAULT ORDER. Requires the AG to consider allegations contained in the petition if the obligor fails to respond to notice, request a hearing or appear. Sec. 76.110. REVIEW OF FINAL ADMINISTRATIVE ORDER. Provides that AG's order to suspend is final, but subject to review under substantial evidence rule in the APA. Sec. 76.111. ACTION BY LICENSING AUTHORITY. Requires the appropriate licensing authority to verify the license, record and report the suspension, and demand surrender of the license, as needed, but permits no additional hearing or modification of the order; disallows refund of licensing funds paid; deems an obligor liable for civil and criminal penalties for engaging in the activity for which the license was suspended; exempts licensing agency from liability; has no affect on other agency licensing authority; supercedes driving license suspensions in other law. Sec. 76.112. MOTION TO REVOKE STAY. The custodial parent, AG or child support agency may revoke the stay or an order suspending a license if the obligor does not comply with the repayment schedule; provides for notice, motions to revoke the stay. Sec. 76.113. VACATING OR STAYING ORDER SUSPENDING LICENSE. The AG may vacate or stay an order to suspend a license if the obligor has paid all delinquent child support or establish satisfactory record; also contains provisions for notice, license reissuance, allows other remedies. Sec. 76.114. FEE BY LICENSING AUTHORITY. Permits a licensing agency to charge a fee to recover the costs of suspending the license. Sec. 76.115. COOPERATION BETWEEN LICENSING AUTHORITIES AND AG. Requires licensing agencies to provide identifying information to the AG about persons holding licenses, and allows cooperative agreements between licensing agencies and the AG; allows AG to adopt implementation schedule. Sec. 76.116. RULES, FORMS, AND PROCEDURES. Requires the AG, as the Title IV-D agency, to make rules implementing this subchapter. (b) Applies the new license suspension subchapter to all child support owed and unpaid on or after Sept. 1, 1995, for AFDC child recipients, and valid licenses on or after that date. ARTICLE 6. FINANCIAL ASSISTANCE THROUGH FEDERAL PROGRAMS. SECTION 6.01. AFDC RECIPIENTS ELIGIBLE FOR FEDERAL PROGRAMS. (a) Amends Art. 4413(502), Revised Statutes, by adding new Sec. 22 as follows: Sec. 22(a). Requires the Health & Human Services Commission to assist AFDC recipients to obtain Supplemental Security Income (SSI) or Social Security Disability Income (SSDI) benefits, if qualified; permits HHSC to delegate this responsibility, contract out or use other cost-effective methods to assist recipients. (b) Requires the state to deduct from a recipient's initial SSI or SSDI lump-sum payment a consultant's fee, plus AFDC payments made by the state to the recipient during the pendency of the SSI/SSDI application. (c) Requires HHSC to set up a planning group composed of DHS, TEA, and the Texas Rehabilitation Commission (TRC) to improve workload coordination between those agencies and assist any consultant. (b) Reporting requirement of the planning group to the Governor and Legislature, by January 15, 1997. SECTION 6.02. EMPLOYMENT OPPORTUNITIES FOR PERSONS WITH DISABILITIES. Amends Chapter 121, H.R. Code, by adding new Secs. 121.0014 and 121.0015 as follows: Sec. 121.0014. VISION STATEMENT. Requires HHSC and all agencies under its umbrella, and state agencies administering workforce development programs to adopt a vision statement, set out in the bill; defines "health & human services agency." Sec. 121.0015. INTERAGENCY WORK GROUP. Creates an interagency work group to implement the action plan from the 1994 Supported Employment Summit, consisting of TEA, Texas Commission for the Blind, Texas Dept. of Mental Health & Mental Retardation (MHMR), and TRC; requires the State Comptroller to monitor the group and report to the Governor and Legislature by Nov. 15, 1996, on its progress. SECTION 6.03. WORK INCENTIVES & SUPPLEMENTAL SECURITY INCOME (SSI). Amends Chapter 111, H.R. Code, by adding new Sec. 111.0205 as follows. Sec. 111.0205. Requires TRC to employ a person to train counselors about using work incentives, and ensure that TRC contractors follow incentives toward supported employment. SECTION 6.04. CONTRACTING FOR SUPPLEMENTAL SECURITY INCOME (SSI). Amends Sec. 533.034 Health & Safety Code by labeling existing provision (a) and adding new subsection (b) as follows: (b) Requires MHMR to ensure that services to clients at local MHMR authorities include information about the work incentive program and supported employment. SECTION 6.05. COMPETITIVE EMPLOYMENT. Amends Sec. 21.510(e), Education Code, by requiring individual transition plans (ITP) for children with disabilities to include a goal of competitive employment as part of their school program, beginning with the 1995-96 school year; requires TEA to study effects of changing ITP for children aged 14 and up and report to the Governor and Legislature. SECTION 6.06. FEDERAL FUNDING: MENTAL HEALTH SERVICES. Amends Chapter 533 of the Health & Safety Code by adding new Sec. 533.046 as follows: Sec. 533.046. FEDERAL FUNDING FOR MENTAL HEALTH SERVICES FOR CHILDREN AND FAMILIES. Requires MHMR to establish an interagency agreement with DHS to amend the state's Emergency Assistance Plan to include mental health emergencies, using local MHMR dollars to draw down the federal match; requires MHMR to allocate 66% of the additional funds to local MHMR authorities. SECTION 6.07. FEDERAL FUNDING: CHEMICAL DEPENDENCY SERVICES. (a) Amends Art. 4413(502), Revised Statutes, by adding new Sec. 10A as follows: Sec. 10A. FEDERAL FUNDING: CHEMICAL DEPENDENCY SERVICES. Requires the Health & Human Services Commission (HHSC) to coordinate with TCADA to include children or caretakers who need chemical dependency treatment in the state's Emergency Assistance Plan. (b) Requires TCADA to study adding chemical dependency treatment as an allowable service in the state's Medicaid plan. SECTION 6.08. FEDERAL FUNDS: FOSTER CARE. (a) Amends Art. 4413(503), Revised Statutes, by adding new Sec. 12A as follows: Sec. 12A. FEDERAL FUNDS FOR CERTAIN CHILDREN. Requires DPRS to classify as a "child in foster care" every child in the state's custody who is placed in a relative's home, for purposes of Medicaid eligibility only; requires DPRS to ensure time studies identify all costs incurred; allows DPRS to use attorney's fees and court charges as expenses in adoption cases in order to draw down a federal match. (b) Instructs DPRS to claim retroactive federal financial participation for legitimate nonrecurring adoption expenses. (c) Permits DPRS to seek a federal waiver if needed, and if denied, requires DPRS to exhaust administrative remedies and judicial review as necessary. SECTION 6.09. FEDERAL TAX CREDIT. Amends Chapter 403, Govt. Code, by adding new Sec. 403.024 as follows: Sec. 403.024. FEDERAL EARNED INCOME TAX CREDIT. Designates the State Comptroller as the lead state agency to promote awareness of the federal earned income tax credit (EITC); directs the Comptroller to recruit other agencies and the Governor's office to coordinate a campaign thereto. ARTICLE 7. ADULT EDUCATION; PILOT PROGRAMS FOR ASSISTANCE. SECTION 7.01. ADULT LEARNING LABS FOR AFDC CLIENTS. Amends Chapter 11, Education Code, by adding new Sec. 11.2093 as follows: Sec. 11.2093. EDUCATE TEXAS PROGRAM. Creates an adult education program for AFDC recipients. Requires TEA, the Texas Higher Education Coordinating Board and state workforce agency to develop a system of adult learning labs in public schools, community colleges, and other sites to provide emergency education and literacy services listed. SECTION 7.02. ELIGIBILITY FOR ADULT LEARNING LABS. Amends Chapter 31, H.R. Code by adding new Sec. 31.0124 as follows: Sec. 31.0124. REFERRAL TO EDUCATIONAL PROGRAMS. Requires DHS to determine recipient's need and eligibility for adult education services, and refer recipients to the Educate Texas program, as appropriate. SECTION 7.03. ADULT LITERACY AND LEARNING PROGRAMS. Amends Chapter 88, Education Code, by adding new Subchapter G as follows: Subchapter G: Texas Center for Adult Literacy & Learning Sec. 88.541. DUTIES OF TEXAS CENTER FOR ADULT LITERACY AND LEARNING. (a) Requires the Center (located at Texas A&M) to evaluate materials for adult literacy instruction, publish a guide and encourage cable companies and other entities to use the materials. (b) Requires the Center to develop voluntary standards for curriculum and workbooks for adult literacy programs, organizing an advisory group as needed, including among others the Dept. of Criminal Justice. (c) Requires the Center to develop workbooks or other materials. (d) Requires the Center to develop promotional materials about adult literacy and distribute samples. SECTION 7.04. LITERACY: ENGLISH AS A SECOND LANGUAGE. Amends Chapter 13, Education Code, by adding Sec. 13.044 as follows: Sec. 13.044. ADULT LITERACY & ENGLISH AS SECOND LANGUAGE CURRICULUM. (a) Requires institutions of higher education with teacher training programs to include a course in teaching adult literacy and English as a second language. (b) Permits institutions to establish internships teaching literacy and English as a second language. SECTION 7.05. PILOT PROGRAM TO ASSIST AFDC CLIENTS IN ACHIEVING SELF- SUFFICIENCY. Instructs DHS to establish a pilot program to provide supported employment to help families become self-sufficient; permits DHS to use fill-the-gap budgeting or 24-month transitional benefits in the pilot; requires DHS to consider using the state's Uniform Group Insurance Program; requires DHS to report to the Governor & 75th and 76th Legislatures about the program's success; defines "fill-the-gap"; expiration date of Sept. 1, 1999. SECTION 7.06. PILOT PROGRAM: EMERGENCY ASSISTANCE FOR NON-AFDC FAMILIES IN CRISIS. Instructs DHS to seek federal funds to establish a pilot of emergency assistance in an area of high unemployment or using electronic benefits transfer (EBT); directs DHS by rule to develop guidelines for cash assistance for families who do not qualify for AFDC but need assistance to divert them from the AFDC rolls; reporting requirement by DHS to the Governor and 75th and 76th Legislatures. SECTION 7.07. PILOT PROGRAM: SAVINGS ACCOUNT FOR AFDC RECIPIENTS. Requires DHS, in conjunction with the state treasurer, to create a pilot project consisting of individual development accounts for AFDC recipients to allow them to accumulate savings in order to sustain self-sufficiency; permits DHS to adopt rules regarding the size of the pilot and amount that may be saved; requires DHS to encourage private sector employers to match funds for employed recipients; reporting requirement by DHS to the Governor and 75th & 76th Legislatures on the program's success; expires Sept. 1, 1999. ARTICLE 8. PRIVATIZATION; INTEGRATED ELIGIBILITY; FRAUD & ERROR PREVENTION; TASK FORCE SECTION 8.01. PRIVATIZATION STUDY. Instructs the Council on Competitive Government to study the costs and benefits of contracting with private entities to determine eligibility for AFDC, assist recipients in finding jobs, and detect fraud in the welfare system; directs other state agencies to cooperate as needed; requires Council to report by January 15, 1997, to the Governor and Legislature. SECTION 8.02. INTEGRATED ELIGIBILITY DETERMINATION. (a) Requires the Health & Human Services Commission (HHSC) to develop and implement a plan for integrated eligibility determination and service delivery by September 1, 1996. (b) Requires the design of the integrated eligibility system to achieve at least a one percent (1%) savings, to be used for further development of the system. (c) Requires HHSC to report savings to local, state and federal agencies. (d) Requires HHSC, in consultation with the State Council on Competitive Government, to consider providing services through a competitive bid process or contracting with local government or others. (e) Requires HHSC to develop by October 1, 1996, a plan to consolidate administrative and service delivery functions to eliminate duplication, with a report due by January 15, 1997, to the Governor and 75th Legislature. SECTION 8.03. STREAMLINING ELIGIBILITY DETERMINATION. Requires HHSC to expand integrated eligibility pilots to include Harris County Hospital District and U.T.M.B.-Galveston, contracting with the two entities and setting performance measures to reduce error rates and to simplify processes and use their software; also requires HHSC to establish standards to automated systems and study privatization of DHS' eligibility services. SECTION 8.04. INTEGRATED SERVICE DELIVERY. Requires HHSC to develop by September 1, 1997, integrated approaches to health and human services delivery, including one-stop service centers, in existing community locations; requires HHSC umbrella agencies to cooperate; expires Sept. 1, 1997. SECTION 8.05. OVERSIGHT GROUP. Creates an oversight group consisting of representatives of the Governor, Lt. Governor, Speaker, State Comptroller, and LBB to oversee HHSC's development and implementation of integrated eligibility and service delivery plans. SECTION 8.06. PUBLIC ASSISTANCE FRAUD OVERSIGHT TASK FORCE. Amends Chapter 21, H.R. Code, by adding Sec. 21.0145 as follows: Sec. 21.0145. PUBLIC ASSISTANCE FRAUD OVERSIGHT TASK FORCE. Creates a task force, consisting of representatives of the AG, Comptroller, Dept. of Public Safety, State Auditor, and DHS, to advise and assist DHS in fraud investigations and collections; provides for chair, meetings, expenses and monthly informational reports. SECTION 8.07. FRAUD PREVENTION. (a) Amends Chapter 22, H.R. Code, to adding Sec. 22.027 as follows: Sec. 22.027. FRAUD PREVENTION. Requires the DHS Inspector General to compile data on fraud prevention and referrals; requires DHS to publicize successful fraud prosecutions, establish a toll-free fraud hotline, and develop a method to identify applicants receiving public assistance in neighboring states; also requires DHS to develop a system to verify auto information through TXDOT and establish a computerized system with the corrections division of the TX Dept. of Criminal Justice preventing inmates from receiving benefits. (b) Requires DHS to evaluate the five-day time limit on investigating fraud cases and consider increasing post-fraud referrals for investigation. SECTION 8.08. PREVENTING FRAUD THROUGH VEHICLE REGISTRATION. Amends Sec. 24, Art. 6687-1, V.T.C.S. by adding new subsection (b) as follows: (b) Adds to the information on the certificate of title to a motor vehicle a person's social security number. SECTION 8.09. VEHICLE REGISTRATION DATABASE. Amends Art. 6675a-17A, V.T.C.S., by amending (b) permitting the release of personal information only for the purpose of determining eligibility for public assistance; and adding new subsection (c), instructing TXDOT to provide a dedicated line to the vehicle registration record database for eligibility determinations. SECTION 8.10. ELECTRONIC IMAGING PROGRAM. (a) Amends Chapter 31, H.R. Code by adding new Section 31.0325 as follows: Sec. 31.0325. ELECTRONIC IMAGING PROGRAM. (a) Requires DHS, in conjunction with other agencies, by rule to develop a welfare fraud prevention program using finger- or photo-imaging techniques. (b) Requires DHS, by rule, to ensure confidentiality of information. (c) Sets up standards DHS must follow in the development and gradual implementation of the program. (d) Requires status reports by DHS to Governor & Legislature. (b) Requires DHS to establish the initial electronic imaging program by January 1, 1996. SECTION 8.11. ERROR-RATE REDUCTION. (a) Amends Chapter 22, H.R. Code, by adding new Sections 22.025 and 22.026 as follows: Sec. 22.025. ERROR-RATE REDUCTION. Requires DHS to set progressive goals for improving its error rates in the AFDC and food stamp programs, developing a schedule to meet the goals; requires quarterly progress reports to the Governor, LBB and task forces; directs DHS to include in its employee evaluations a rating system that emphasizes error-rate reduction, and take disciplinary action, as needed. Sec. 22.026. REDUCTION OF CLIENT FRAUD. Requires DHS to verify errors attributed to client fraud and limit such fraud. (b) and (c) Requires DHS to develop by November 1, 1995, a plan to reduce error rates in the Houston region, with a report due by April 1, 1996. SECTION 8.12. MODIFICATION OF SCREENING & SERVICE DELIVERY. Amends Sec. 33.002, H.R. Code by adding new subsection (g) permitting DHS to modify if necessary the one-day screening process and service delivery for emergency food stamps in order to reduce the state's error rate. SECTION 8.13. TASK FORCE: ELECTRONIC BENEFITS TRANSFERS. Amends Art. 4413(502), Revised Statutes, by adding Sec. 10B as follows: Sec. 10B. INTERAGENCY TASK FORCE ON ELECTRONIC BENEFITS TRANSFERS. Creates a task force composed of representatives of the AG, Comptroller, HHSC, Texas Dept. of Health, DHS, TEC, TRC, two retailers, two banks or ATM owners, and two consumers or advocates, to assist HHSC in adding new benefit programs to the EBT system; provides for chair, meetings, expenses; lists duties of the task force and considerations for program benefits to add. ARTICLE 9. GENERAL PROVISIONS: HEALTH & HUMAN SERVICES AGENCIES. SECTION 9.01. WORKLOAD STANDARDS AND EDUCATION. Instructs HHSC, by Feb. 1, 1996, to develop workload standards and educational requirements to manage client eligibility determinations, phasing out over-qualified staff except for those reviewing fraud and error cases. SECTION 9.02. APPROPRIATIONS, TRANSFERS & REPORTING. Amends Art. 4413(502), Revised Statutes, by adding Sec. 13A and Sec. 13B as follows: Sec. 13A. FEDERAL FUNDS. Subjects any changes to state plans involving the expenditures of federal funds (such as Medicaid, Emergency Assistance, food stamp, etc.) to the approval of HHSC; directs HHSC to evaluate the feasibility of designating itself as the only state agency to receive federal funds; and would permit HHSC to consolidate federal funds to send to local communities to streamline service delivery. Sec. 13B. APPROPRIATIONS AND REPORTING. Requires agencies under the HHSC umbrella to obtain HHSC's approval for annual operating budgets and for transfers between strategies of funds in excess of $1 million; sets up quarterly reporting requirements relating to agency expenditures, beginning Sept. 1, 1995. SECTION 9.03. STRATEGIC PLANS AND UPDATES. Amends Sec. 10(d) of Art. 4413(502), Revised Statutes, continuing HHSC's authority to make rules relating to the submission of strategic plans and updates, but subjects any such plans or updates by the agencies under the HHSC umbrella to HHSC modification or approval. SECTION 9.04. CO-LOCATION OF OFFICES. Amends Sec. 3.08(a) of Art. 4413(505), V.T.C.S. permitting HHSC to co-locate agency offices as leases expire to achieve one-stop service centers, and striking provisions allowing individual agencies to make such determinations; strikes provisions allowing agencies more discretion. SECTION 9.05. LEASING OFFICE SPACE. Amends Sec. 6.031(a) of Art. 601b, V.T.C.S. prohibiting General Services Comm'n to lease space for an HHSC umbrella agency without HHSC approval. SECTION 9.06. AGENCY STAFF. Amends Art. 4413(502), Revised Statutes, by adding new Sec. 23, allowing HHSC to request the assistance of staff from agencies under its umbrella to carry out its functions. ARTICLE 10. REPEALER; WAIVERS; EFFECTIVE DATE; EMERGENCY. SECTION 10.01. Repeals outdated provisions relating to ended pilot programs or interim studies. SECTION 10.02. Permits DHS, the Title IV-D agency (AG) or another agency to seek any federal waiver necessary to implement the provisions of the bill. SECTION 10.03. Effective date September 1, 1995, unless otherwise provided. SECTION 10.04. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE H.B. 1863 was reorganized and rearranged, and sections renumbered, after incorporation of several new provisions in the committee substitute that were not part of the original bill, including the following: the family cap and family grant, support services, parenting skills training and resource limits; the Responsibility Agreement and related provisions; an approach to time-limited benefits based upon recipients' educational background and previous work experience, implemented gradually statewide, rather than the pilot project; mandatory work provision for certain recipients; Child Support Enforcement sections including license suspension. The provisions requiring the Legislature to appropriate all funds to the Health & Human Services Commission were removed by the committee. SUMMARY OF COMMITTEE ACTION In a public hearing of the Human Services Committee on March 8, 1995, the Chairman laid out H.B. 1863 by Reps. Hilderbran and Stiles, and offered a committee substitute. The following witnesses provided testimony on H.B. 1863: Hon. John Sharp, State Comptroller, DeAnn Friedholm, Texas Health & Human Services Comm'n, Robin Herskowitz, Office of the State Comptroller, Patrick Bresette, Center of Public Policy Priorities, Gordon Enos, North American Morpho Systems, Inc., Austin office, Phyllis Coombs, State Comptroller, Judy Denton, Texas Dept. of Human Services. The following witnesses provided testimony for H.B. 1863: Oliver B. McMahan, Jr., Waco, Susan Garnett, ARC of Texas, Austin, Judith Sokolow, Advocacy, Inc., James A. Cooley, Austin. The following witnesses provided testimony against H.B. 1863: Gilbert Gonzales, Jr., Austin, Bob Green, Texas Fathers Alliance, Primary Nurturing Fathers of Texas. The committee substitute was withdrawn and H.B. 1863 was left pending. On March 9, 1995, the Human Services Committee, convened in a formal meeting, took up H.B. 1863 which had been pending. The Chairman laid out a committee substitute. Committee Amendment No. 1 by Krusee was adopted without objection. Committee Amendments No. 2 and No. 3 by Reps. Maxey and Naishtat were adopted without objection. Com. Amendment No. 4 by Reps. Naishtat and Jones failed by a record vote of 4 Ayes and 5 Nays. Com. Amendments No. 5 was adopted on a non-record vote by a vote of 6 Ayes and 3 Nays. Com. Amendment No. 6 was adopted on a non-record vote of 5 Ayes and 4 Nays. Committee Amendment No. 7 by Wohlgemuth was adopted without objection. The committee substitute for H.B. 1863, as amended, was adopted without objection. H.B. 1863 was reported favorably as substituted by a record vote of 9 Ayes, 0 Noes, 0 PNV, and 0 absent. The clerk was instructed to fold the amendments into the bill. In a formal meeting on March 14, 1995, the House Human Services Committee convened and the Chairman announced that the action of the Committee in reporting H.B. 1863 on March 9 was not valid due to the fact that the certified copy was not available. The Chairman laid out H.B. 1863 by Reps. Hilderbran and Stiles and offered a committee substitute. The committee substitute for H.B. 1863 was adopted without objection. H.B. 1863 was reported favorably as substituted by a record vote of 9 Ayes, 0 Nays, 0 PNV, and 0 Absent. On March 28, H.B. 1863 was returned to the Human Services Committee on a point of order. While the committee was convened in a public hearing on March 29, 1995, the Chairman laid out H.B. 1863. No testimony was taken on the bill. Rep. Maxey offered a committee substitute for the bill which was adopted without objection. H.B. 1863 was reported favorably as substituted on a record vote of 6 Ayes, 0 Nays, 0 PNV, and 3 absent.