LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 12, 1995 TO: Honorable Toby Goodman, Chair IN RE: House Bill No. 2664 Committee on Juvenile Justice and By: Goodman Family Issues House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 2664 (relating to the enforcement of certain child support and medical support obligations) this office has determined the following: The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. The bill would amend several sections of the Human Resources Code. It would authorize and strongly encourage the Attorney General to contract with a private attorney, other private entity, or political subdivision of the state to: establish or modify child support obligations; collect child support; or determine paternity. The bill would require that ten percent of AFDC cases in which a support payment is delinquent by one year or more shall be contracted out. The Attorney General would be required, "to the extent possible," to enforce AFDC cases no later than one year from the date of referral. The bill would also require the Attorney General to encourage use of the Employer New Hire Reporting (ENHR) program in the Child Support Division by simplifying employer reporting requirements. The Office of the Attorney General would be required to work closely with the Texas Employment Commission, the Texas Workers' Compensation Commission, the Comptroller of Public Accounts, the Texas Department of Commerce, the Secretary of State, and employer groups, in order to expand the use of the ENHR program, which provides a means for employers to assist in the State's efforts to locate absent parents who owe child support and collect support from those parents by reporting information concerning newly hired and rehired employees directly to the Child Support Enforcement program. The Attorney General and the Department of Human Services would be required to adopt a memorandum of understanding governing the establishment and enforcement of court-ordered child support in AFDC cases. The bill would also amend several sections of the Family Code. On the installation of an automated child support enforcement system, the Office of the Attorney General would be strongly encouraged to maximize the collection of medical support, and to establish cash medical support orders for children eligible for medical assistance under the state Medicaid program for whom private insurance coverage is not available. The Governor, in cooperation with the Office of the Attorney General, would be required to establish a working group to develop strategies to maximize federal assistance for county based child support collection efforts and to reduce the State's child support enforcement non-AFDC caseload. The State's IV-A agency (Department of Human Services) would be required to pay a cash incentive to the IV-D agency (Office of the Attorney General) for Medicaid cases enrolled in medical insurance by Attorney General enforcement action. The Attorney General would be required to provide to the Legislature no later than December 1, 1996 an estimate of the cost savings to the State from expansion of child support privatization contracts. The Attorney General and the Department of Human Services (DHS) would be required to develop and implement a plan to assign one or more child support enforcement officers to work in DHS offices. The Office of Attorney General has identified 224 Full Time Equivalent Employees and a biennial cost of $20,909,194 to implement the provisions of the bill. The amounts indicated below are based on Comptroller of Public Accounts estimates and do not include Office of the Attorney General costs as a requirement of implementation. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Revenue Probable Revenue Probable Cost Out Year Gain to Gain to Child of Child Support General Revenue Support Retained Fund 001 Collections Retained Account 787 Collections Account 787 1996 $4,100,000 $994,000 $48,000 1997 4,600,000 3,288,000 96,000 1998 5,000,000 3,388,000 96,000 1999 5,500,000 3,588,000 96,000 2000 6,100,000 3,788,000 96,000 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. The fiscal implication to units of local government cannot be determined. Source: Comptroller of Public Accounts, Office of the Attorney General LBB Staff: JK, JC, RR