LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 28, 1997
TO: Honorable Harvey Hilderbran, Chair IN RE: House Bill No. 1439
Committee on Human Services By: Hilderbran
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB1439 ( Relating
to use of financial assistance granted to persons with dependent
children.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB1439-As Introduced
Implementing the provisions of the bill would result in a net
impact of $0 to General Revenue Related Funds through the biennium
ending August 31, 1999.
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 add Section 31.0355 to Chapter
31 of the Human Resources Code. The bill would restrict the
use of financial assistance grants, requiring that recipients
use the funds only to purchase goods and services that are considered
essential and necessary for the welfare of the family, including
food, clothing, housing, and health care services. A recipient
of financial assistance who receives the assistance by electronic
benefits transfer (EBT) to an account could not make a cash
withdrawal from the account. An EBT operator that contracts
with the Department of Human Services (DHS) would establish
procedures to restrict purchases of goods and services with
financial assistance in the same manner purchases of items with
benefits under the food stamp program are restricted under the
EBT system. The department would by rule define what constitutes
essential and necessary goods and services and provide for penalties
and sanctions for a recipient or operator who does not comply
with this section. The bill would take effect September 1,
1997, and apply to a person who is receiving financial assistance
under Chapter 31, Human Resources Code, on or after that date,
regardless of the date on which eligibility for that assistance
was determined.
Fiscal Analysis
The bill would have no impact on general revenue funds provided
federal Temporary Assistance for Needy Families (TANF) block
grant funds are available. Estimates of cost relate to the
Department of Human Services contracts with the EBT provider.
It is assumed that any increased workload on the department
could be absorbed by current staff.
Methodolgy
5,000 new point-of-sale (POS) devices would be installed at
public utility offices, public housing locations, telephone
companies, and health care clinics.
13,000 current retailers
and 5,000 new retailers would be trained on the appropriate
use of financial assistance under the revised EBT program.
The
following costs would occur in year one:
$500,000 for project
management
$175,000 for software development /support
$165,000
for retailer/client/staff training and support
$1,000,000
for training materials
$700,000 for postage and shipping
$150,000
for additional disk drives and memory
$6,000,000 for POS equipment
and installation
$600,000 for ongoing POS service and repair
Only
the POS service and repair cost would continue in subsequent
years.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable
Savings/(Cost)
from Federal
Funds :
Contract Costs
0555
1998 ($9,290,500)
1998 (600,000)
2000 (600,000)
2001 (600,000)
2002 (600,000)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 0
2000 0
2001 0
2002 0
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No fiscal implication to units of local government is anticipated.
Source: Agencies: 324 Department of Human Services
LBB Staff: JK ,BB ,PP