BILL ANALYSIS C.S.S.B. 793 By: Harris Jurisprudence 5-3-95 Committee Report (Substituted) BACKGROUND 'The office of the attorney general has the responsibility for child support activities for families receiving public assistance. In addition, counties are involved in other child support cases through registries and in some cases enforcement activities. The office's child support division operates under Title IV, Part D of the federal Social Security Act. Every family receiving Aid to Families with Dependent Children (AFDC) or Medicaid and needing paternity or support order establishment, enforcement or medical support services is currently referred to this division. Total caseload for the child support enforcement program grew by 55 percent, from 427,565 cases in 1989 to 664,250 at the end of 1994. The total number of cases is expected to exceed one million by the end of 1997. Child support obligations have been established in less than half of the cases. In a 1995 comptroller's report, a number of recommendations were made suggesting ways to improve collection of child support. These include simplification of the state's hearings process for child support enforcement, creation of a working group including counties to increase collections, taking steps to increase cash medical support payments, and improving information collection in AFDC and child support programs. PURPOSE As proposed, C.S.S.B. 793 transfers the enforcement of certain child support and medical support obligations from the state government to private entities and political subdivisions of the state; sets forth requirements for a statewide child support registry and enforcement system; sets forth requirements for enforcement of medical support to ensure that a child's insurance is not dependent on the parent's marital status and shifts some responsibility for health insurance to the parents and the private sector; provides penalties; and makes an appropriation. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is granted to the attorney general under SECTION 1.01 (Section 231.0011(k), Family Code), to agencies developing the Employer New Hire Reporting program under SECTION 1.05(l), to the Title IV-D agency and the Texas Department of Human Services under SECTION 1.06 (Section 231.305(a), Human Resources Code), and to the Commissioner of Insurance in SECTION 4.01 (Article 3.96-9, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS ARTICLE 1. POWERS AND DUTIES OF ATTORNEY GENERAL SECTION 1.01. Amends Chapter 231, Family Code, by adding Section 231.0011, as follows: Sec. 231.0011. DEVELOPMENT OF STATEWIDE INTEGRATED SYSTEM FOR CHILD SUPPORT AND MEDICAL SUPPORT ENFORCEMENT. (a) Requires the attorney general, as the Title IV-D agency for the state, to have final approval authority on any contract or proposal for delivery of services under this section and, in coordination with the Texas Judicial Council, the Office of Court Administration, the federal Office of Child Support Enforcement, state, county, and local officials, to develop a statewide system for child support and medical support enforcement, employing federal, state, local, and private resources to accomplish certain child support enforcement goals. (b) Requires the attorney general to convene a work group to determine a process and time-table for implementation of a unified registry system (registry) and to identify any barriers to completion of the project. Sets forth entities required to be included in the work group. Requires the work group to report the results to the governor, lieutenant governor, speaker of the house, and the attorney general by January 15, 1996. (c) Requires the attorney general to develop with the work group technical standards for participation in the unified child support system. (d) Requires counties and providers of child support services to be required, as a condition of participation in the unified system, to enter into a contract with the attorney general and comply with all federal requirements for the Title IV-D program, and to maintain at least the current level of funding for activities which are proposed to be included in the integrated child support system. (e) Requires the attorney general to identify federal requirements, apply for federal waivers, and provide information concerning participation in the system to counties and providers of child support services by January 15, 1996. Requires counties to notify the attorney general of resources and options for participation by May 1, 1996. (f) Requires the attorney general to produce a procurement and implementation plan for hardware and software to implement in phases a unified registry and enforcement system. (g) Authorizes the attorney general, effective January 15, 1996, to contract with any county meeting necessary technical system requirements for provision of Title IV-D services in that county. Requires all cases after the contract to be Title IV-D cases. Authorizes any other case in the county to be included as a Title IV-D case, subject to federal requirements and agreement of the county and the attorney general. Authorizes any obligee under a support order to refuse enforcement services unless required to do so pursuant to other law. (h) Requires counties participating in the unified enforcement system to monitor all registry cases and authorizes these counties, subject to the approval of the Title IV-D agency, to provide enforcement services through certain methods. (i) Requires the attorney general to undertake a least-cost review of its child support operations and to use the information to determine what contribution of program funds should be made to the participating counties. Requires the attorney general to develop a cost allocation methodology to assist the counties in identifying contributions which qualify for federal financial participation. (j) Authorizes the attorney general to phase in the registry and enforcement system and requires the requirement to implement the system to be contingent upon the receipt of locally generated funds and reimbursement. Defines "locally generated funds." (k) Requires the attorney general to adopt rules to implement this section. (l) Provides that participation in the statewide integrated child and medical support enforcement system is voluntary, and prohibits anything in this section from being construed to mandate participation. SECTION 1.02. Amends Chapter 231, Family Code, by adding Section 231.113, as follows: Sec. 231.113. ENFORCEMENT OF SUPPORT OBLIGATIONS IN PUBLIC ASSISTANCE CASES. Requires the Title IV-D agency to enforce a child support obligation in a case involving a child who receives financial assistance under Chapter 31, Human Resources Code, by the first anniversary of the date that the agency receives information from the Texas Department of Human Services (department) to assist in the enforcement. SECTION 1.03. Amends Sections 231.109(b) and (d), Family Code, to authorize the Title IV-D agency to contract with private entities to provide services in Title IV-D cases. Deletes a provision authorizing the agency to contract with private attorneys or political subdivisions to represent this state or another state in an action brought under federal law and this chapter. Makes conforming changes. SECTION 1.04. Amends Section 231.202, Family Code, to delete a provision requiring the Title IV-D agency to pay mileage costs incurred by a sheriff or constable when traveling to execute an outstanding warrant or capias. SECTION 1.05. Amends Section 231.304, Family Code, by amending Subsections (b) and (h) and adding Subsections (j)-(m), as follows: (b) Requires the Title IV-D agency, the department, the Workers' Compensation Commission and the Texas Employment Commission to create and develop a voluntary Employer New Hire Reporting (ENHR) program to prevent fraud in the welfare, workers' compensation, and unemployment insurance programs, and locate absent parents who owe child support by reporting information concerning newly hire employees directly to a centralized state database, rather than the child support enforcement program. Requires the employer reporting requirements to be simplified and standardized. (h) Sets forth purposes for which the database is required to make the information available, subject to the approval of involved agencies and federal law. Deletes a provision requiring the Title IV-D agency to retain the information only under certain circumstances. (j) Provides that an employer in the ENHR program is encouraged to report the information about health insurance coverage available through the employer in which a dependent child may be enrolled. (k) Requires the attorney general's office (office) to work closely with certain governmental entities to expand the ENHR program. Sets forth requirements for efforts to expand the program. (l) Authorizes the affected agencies to perform certain actions, including issuing rules, to carry out the purposes of this section. (m) Requires the affected agencies to implement the plan to create the ENHR database using existing funding and considering savings and revenue gains that may result from the use of such system. SECTION 1.06. Amends Chapter 231, Family Code, by adding Section 231.305, as follows: Sec. 231.305. MEMORANDUM OF UNDERSTANDING ON CHILD SUPPORT FOR CHILDREN RECEIVING PUBLIC ASSISTANCE. (a) Requires the Title IV-D agency and the department, by rule, to adopt a memorandum of understanding governing the establishment and enforcement of court-ordered child support in cases involving children who receive aid under Chapter 31. Requires the memorandum to require the attorney general and the department to perform certain actions. (b) Requires the attorney general and the department to semiannually review and update the memorandum. SECTION 1.07. Amends Section 231.209, Family Code, to authorize the Title IV-D agency to pay the costs for mileage or other travel costs incurred by a sheriff or constable when traveling to execute an outstanding warrant or capias. ARTICLE 2. ENFORCEMENT OF CHILD SUPPORT AND MEDICAL SUPPORT OBLIGATIONS SECTION 2.01. Amends Section 102.007, Family Code, to make conforming changes. SECTION 2.02. Amends Chapter 231B, Family Code, by adding Section 231.306, as follows: Sec. 231.306. MAXIMIZING MEDICAL SUPPORT ESTABLISHMENT AND COLLECTION BY THE TITLE IV-D AGENCY. (a) Provides that the Title IV-D agency is encouraged to maximize the collection of medical support and establish cash medical support orders for children eligible for the state Medicaid program without private insurance, on the installation of an automated enforcement system. (b) Defines "medical support." SECTION 2.03. Amends Section 101.005, Family Code, to redefine "child support review officer." SECTION 2.04. Amends Chapter 231E, Family Code, by amending Sections 231.401, 231.402, and 231.405-231.428. Sec. 231.401. Provides that the purpose of the child support review process (review) is to resolve routine child support action through the agreement of the parties or through agreeing to uncontested orders, rather than by negotiation. Sec. 231.402 Deletes provisions requiring mediation to make the review understandable to all parties and encourage agreements. Sec. 231.405. Deletes a provision authorizing a child support agency (agency) to review and assess the financial resources of a child's parent or presumed or alleged father from whom support is requested. Authorizes an administrative action to be initiated by issuing a notice of review to each party entitled to notice, rather than to the parents and to the presumed or alleged father of a child. Sec. 231.406. Sets forth requirements for the notice of review, including informing the recipient that the recipient may refuse to participate or cease participation in the review process, but that the refusal will not prevent the completion of the process or filing of a review order. Makes conforming changes. Sec. 231.407. Deletes a provision requiring three days to be added to the time in which a person is required to respond to the notice if notice is served by mail. Sec. 231.408. Authorizes a court to compel compliance with an administrative subpoena and award attorney's fees and costs to an agency enforcing a subpoena on proof that an entity failed to comply without good cause. Sec. 231.409. New heading: SCHEDULING AND CONDUCTING NEGOTIATION CONFERENCE. (a) Makes no changes. (b) Requires the agency to schedule a negotiation conference on the request of a party. (c) Authorizes a negotiation conference to be conducted by telephone or video conference call as well as in person. Authorizes the conference to be adjourned to permit mediation of issues. Sec. 231.410. Deletes a provision requiring the conference to be held within a certain time period. Sec. 231.411. Authorizes a negotiation conference to be rescheduled or adjourned on the request of any party, at the discretion of the review officer. Sec. 231.412. Requires the review officer to inform the parties of certain information provided in the notice of review, including that a party may request a hearing at any time before the 20th day after the date a petition for confirmation of the order is filed. Deletes provisions requiring the parties to be informed of information regarding a party's right not to participate in the negotiation, to be represented by an attorney, and to have a court hearing. Makes conforming changes. Sec. 231.414. Provides that documentary evidence relied on by the review officer is a sufficient record of the proceedings. Sec. 231.415. Makes conforming and nonsubstantive changes. Sec. 231.416. Authorizes, rather than requires, a new conference to be scheduled or the officer to make a determination that a review order should not be issued and give notice of that determination. Sec. 231.417. (a)-(c) Make no changes. (d) Requires a review order that establishes or modifies an amount or previously ordered support to include the findings required by Section 154.130. (e) Authorizes a review order that is not agreed to by all parties to specify and reserve for the court at the confirmation hearing unresolved issues, among other requirements for the order. Sec. 231.418. Requires the review order to be signed by each party who agrees to the order and to contain the provisions required by Section 231.417, and sets forth requirements for the order, as to each party in agreement with the order, including language for a statement to appear in the order. Sec. 231.420. Requires documentary evidence relied on by the agency to be filed with the clerk, but not to be served on the parties. Makes nonsubstantive changes. Sec. 231.421. (a) Deletes a provision requiring the clerk to sign the endorsement of the date and time on the filing of a petition for confirmation. (b) Makes no changes. (c) Requires the agency, rather than the clerk, to mail to each party that agreed to the order certain information. Requires the agency to file a certificate of service showing the date of the mailing to each party. (d) Deletes a provision requiring the clerk to issue service of citation only if the petition is to conform an order other than an agreed order. Makes conforming changes. (e) Entitles a clerk to collect in a review case the fees authorized in a Title IV-D case. Makes conforming changes. Sec. 231.422. Deletes a provision requiring the agency to attach a copy of a form to request a court hearing to each party's copy of the petition for confirmation of an order. Makes conforming changes. Sec. 231.423. New heading: TIME TO REQUEST A COURT HEARING. Deletes a provision authorizing the court to schedule a hearing if the court finds that confirmation of a review order would not be in the child's best interests. Makes conforming changes. Sec. 231.424. Makes conforming changes. Sec. 231.425. Provides that the request for hearing may limit the scope of the de novo hearing by specifying the issues that are in dispute. Makes conforming changes. Sec. 231.426. Makes conforming changes. Sec. 231.427. Makes a conforming change. Sec. 231.428. New heading: SPECIAL CHILD SUPPORT REVIEW PROCEDURES RELATING TO ESTABLISHMENT OF PARENTAGE. Sets forth child support review procedures relating to establishment of parentage, rather than paternity. Makes conforming changes. Authorizes an agency to file a review order with a request for court-ordered parentage testing if either party fails to participate in the testing. SECTION 2.05. Amends Chapter 231, Family Code, by adding Section 231.431, as follows: Sec. 231.431. STUDY OF CHILD SUPPORT REVIEW PROCESS. Requires the attorney general to conduct a study to determine and compare the cost of child support enforcement through the use of the review process and the cost of enforcement by the attorney general through the use of other enforcement mechanisms in this chapter. Requires the attorney general to report the results to the governor and the legislature by September 1, 1996 and to include recommendations regarding statutory amendments for improving judicial and administrative processes for enforcement. Provides that this section expires September 2, 1996. SECTION 2.06. Amends Section 71.035(a), Government Code, to require the Texas Judicial Council to implement a monthly tracking system to ensure accountability for counties and courts in the statewide system. Requires the district and county clerks to report such information as may be required. Sets forth requirements for the clerks to obtain, report, and store information. ARTICLE 3. INTERAGENCY COOPERATION AND STUDIES SECTION 3.01. INTEGRATED SYSTEM FOR MONITORING IMPLEMENTATION OF THE STATEWIDE CHILD SUPPORT ENFORCEMENT. (a) Sets forth requirements for the attorney general to establish a work group to monitor the progress toward a statewide system and to determine the effect of that effort as it relates to certain goals. (b) Requires the group to report its findings and recommendations to the attorney general, and to notify the governor, the comptroller, and the legislature of the filing by September 1, 1996 and annually thereafter. SECTION 3.02. AGREEMENT FOR CASH INCENTIVES FOR MEDICAL ASSISTANCE. (a) Requires the attorney general and the Texas Department of Health (health department) to negotiate an agreement regarding the payment by the health department of a cash incentive to the Title IV-D agency for each child eligible for Medicaid that the office causes to be enrolled in a private health insurance plan and for payment of a portion of the state share of costs recovered or saved as a result of the Title IV-D agency's efforts. (b) Requires the attorney general and the health department to report to the legislature the results of negotiations by October 1, 1996. SECTION 3.03. STUDY ON MEDICAL SUPPORT. (a) Requires the attorney general, the state medicaid administrator, and the Insurance Commission to initiate a study regarding certain health insurance issues. (b) Requires the attorney general, the state medicaid administrator, and the Insurance Commission, by October 1, 1996, to prepare a report summarizing the results of the study and sets forth a list of parties to whom the study is required to be reported. SECTION 3.04. USE OF PRIVATE ENTITIES TO ASSIST IN CHILD SUPPORT ENFORCEMENT. (a) Provides that the office is encouraged to expand the use of private contractors to perform Title IV-D program functions. (b) Requires the office, by July 1, 1996, to perform a cost analysis for a standardized comparison of activities performed by private firms and the office. Authorizes the Title IV-D agency to consider a contractor if the office costs are higher than private costs. Provides that this section does not limit the authority of the Title IV-D agency to contract for services. (c) Requires the attorney general to coordinate with the Council on Competitive Government and authorizes the attorney general to employ private consultants to develop the methodology and evaluate the activities being considered for privatization. (d) Requires the attorney general to report the results to the governor, comptroller, and the legislature by December 1, 1996. ARTICLE 4. HEALTH INSURANCE SECTION 4.01. Amends Chapter 3, Insurance Code, by adding Subchapter J, as follows: SUBCHAPTER J. MEDICAL CHILD SUPPORT Art. 3.96-1. DEFINITIONS. Defines "child," "child support agency," "custodial parent," "health insurer," "insurer," and "medical assistance." Art. 3.96-2. DENIAL OF ENROLLMENT PROHIBITED. Prohibits an insurer from denying enrollment of a child under the health insurance coverage (coverage) of the child's parent on certain grounds. Art. 3.96-3. ENROLLMENT REQUIRE. (a) Requires the insurer to permit the parent to enroll the child without regard to any enrollment period restriction if a parent eligible for dependent health coverage (eligible parent) is required by order to provide coverage for a child. (b) Requires the insurer to enroll the child on application of a custodial parent of the child, an agency, or the child, if an eligible parent is required to provide coverage and fails to apply to obtain coverage. Art. 3.96-4. CANCELLATION OR NONRENEWAL PROHIBITED. (a) Prohibits an insurer from cancelling or refusing to renew coverage of a child entitled to enrollment unless certain evidence is filed with the insurer. (b) Defines "a child entitled to enrollment or enrolled under this subchapter." Art. 3.96-4.1. NOTICE OF AVAILABILITY OF CONTINUATION OR CONVERSION COVERAGE. Requires the insurer to notify the custodial parent and the agency of the costs and requirements for extending or converting such coverage and to enroll the child on application of a parent, an agency, or the child, if dependent coverage being terminated contains provisions for the continuation or conversion of coverage for the child. Art. 3.96-5. EFFECT OF ASSIGNMENT OF MEDICAL SUPPORT RIGHTS TO STATE AGENCY; INFORMATION. (a) Prohibits an insurer from imposing requirements on a state agency that has been assigned the rights of an individual eligible for medical assistance and health benefits that are different from the requirements applicable to an agent of any other covered individual. (b) Requires an insurer to provide to a state agency providing medical assistance or an agency enforcing medical support information to facilitate reimbursement of medical services provided on behalf of a child. Art. 3.96-6. RIGHTS OF CUSTODIAL PARENT AND ADULT CHILD. (a) Requires an insurer who provides coverage for a child through a parent to provide information to each custodial parent or adult child for the child to obtain benefits through that coverage. (b) Requires the insurer to permit an entity that has medical support rights to submit claims for covered services without the approval of the insured parent. (c) Requires the insurer to make payments on covered claims submitted directly to the entity making the claim. Art. 3.96-7. SERVICE AREA RESTRICTIONS PROHIBITED. Prohibits an insurer from enforcing otherwise applicable provisions that would deny, limit, or reduce payment for claims for a covered child who lives outside the insurer's coverage territory but inside the U.S. Art. 3.96-8. PENALTIES; REMEDIES. Subjects an insurer and provides injured parties to the same penalties and remedies in Section 16, Article 21.21, of this code. Art. 3.96-9. RULES. Requires the Commissioner of Insurance to adopt rules to implement this subchapter and the requirements of 42 U.S.C. Section 1396a(a)(60). SECTION 4.02. Amends Section 101.012, Family Code, to redefine "employer." SECTION 4.03. Amends Section 154.186, Family Code, to delete from the list of entities authorized to send a copy of the order requiring an employee to provide coverage for the child, the local domestic relations office or Title IV-D agency. Deletes provisions specifying the method for sending the copy. Makes conforming changes. SECTION 4.04. Amends Section 154.187, Family Code, by amending Subsection (a), to provide that an order to an employer directing that coverage be provided to a child of an employee is binding on the employer on receipt. Deletes a provision authorizing the employer to enroll the child at the next available enrollment period if the employer is not able to immediately enroll the child. Makes conforming changes. SECTION 4.05. Amends Section 154.187, Family Code, by amending Subsection (c) and adding Subsection (g), to require an employer who fails to enroll a child, fails to withhold or remit premiums or cash medical support, or discriminates in hiring or employment on the basis of a medical support order to be subject to penalties and fines. Makes conforming changes. SECTION 4.06. Amends Section 154.192, Family Code, as follows: Sec. 154.192. New heading: CANCELLATION OR ELIMINATION OF INSURANCE COVERAGE FOR CHILD. Prohibits the employer from cancelling or eliminating coverage of an enrolled child until the employer is provided certain evidence unless the employee ceases to be eligible for dependent coverage or the employer has eliminated dependent health coverage for all employees. SECTION 4.07. Amends Section 154.184, Family Code, to require the employer and the insurer to complete all necessary forms and procedures during the first 31 days after the employer's receipt of the order or to report the reasons coverage cannot be made permanent. Makes conforming and nonsubstantive changes. SECTION 4.08. Amends Section 158.206(a), Family Code, to make conforming changes. ARTICLE 5. EFFECTIVE DATE AND TRANSITION PROVISIONS; EMERGENCY SECTION 5.01. (a) Effective date: September 1, 1995. (b) Makes application of Section 4.01 prospective beginning January 1, 1996. (c) Authorizes the office to exercise the contracting authority granted in Section 1.01 to provide for a phased implementation of the statewide system and requires the office to implement the system to the extent that locally generated funds and federal reimbursement are sufficient to pay for implementation. (d) Authorizes the Office of Court Administration to phase in the monthly report required by Section 2.06 to correspond with the implementation of the statewide system. (e) Requires any affected agency that determines a federal waiver or authorization is necessary for implementation to apply for waivers and requires the provision to take effect when waivers have been granted. Requires a copy of each waiver request to be provided to the governor, the lieutenant governor, and the speaker of the house. (f) Requires all funds received from the federal government as reimbursement for expenses related to the integrated system to be in excess of any amount appropriated to the attorney general by the 74th Legislature and provides that these funds are appropriated to the attorney general for the fiscal years ending August 31, 1996 and August 31, 1997. SECTION 5.02. Requires the attorney general to report to the legislature an estimate of the savings from the expansion of the privatization of enforcement services by December 1, 1996. SECTION 5.03. (a) Requires the attorney general's office, in conjunction with the department, to develop and implement a plan to assign a representative to work with department eligibility workers in department offices or facilities that are located in the same geographic region as offices or facilities of the attorney general. Sets forth requirements for the plan. (b) Requires the attorney general to complete the plan and send a copy of the plan to the governor, the lieutenant governor, and the speaker of the house of representatives by October 1, 1995. (c) Requires the attorney general and the department to prepare the initial memorandum of understanding by December 1, 1995. SECTION 5.04. Makes application of this Act prospective. SECTION 5.05 (a) Provides that Section 3.01 of this Act expires on September 2, 1996. (b) Provides that Sections 3.02 and 3.03 of this Act expire January 1, 1997. SECTION 5.06. Emergency clause.