LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 28, 1997 TO: Honorable Toby Goodman, Chair IN RE: House Bill No. 3281, Committee Report 1st House, Substituted Committee on Juvenile Justice and Family Issues By: Goodman House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB3281 ( Relating to local court processing for child support cases and to enforcement of child support orders; providing penalties.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB3281-Committee Report 1st House, Substituted Implementing the provisions of the bill would result in a net positive impact of $14,426,000 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. Fiscal Analysis The bill would amend the Government Code, the Family Code, and the Transportation Code to implement initiatives to increase child support enforcement collections in Texas. The bill would establish a pilot program to streamline court processing, enhance child support collections through competition, enhance the Attorney General's "Child Support Evaders" program, and require the Department of Public Safety to include in each notice sent to a driver's license holder, a notice that the driver's license may be suspended if the driver is delinquent in the payment of child support. The bill would partially implement the Texas Performance Review (TPR) recommendations GG12, GG13, GG14, GG15, and GG16 in Disturbing the Peace: The Challenge of Change in Texas Government. Methodolgy The Comptroller of Public Accounts estimates that the pilot program to streamline court processing through a consolidated family law processing system would not be contingent upon implementation of a state case registry and would include federal financial participation based on reinvestment of collections on state-paid foster care by the Office of the Attorney General (OAG). The new case processing system would permit Texas to collect child support for an estimated seven percent of children in care, which would ensure that the pilot project could be funded entirely through child support collections. The Comptroller estimates that there would be a one-time cost to the Child Support Retained Collections Account in fiscal year 1998 and a net gain to this account in subsequent years of $601,000 per fiscal year. The bill would allow child support enforcement functions to be competitively bid to increase the number of cases under court order and to increase total child support collections. By allowing the OAG to pay child support enforcement vendors on a contingency basis, payments could be made without reducing available funds for existing operations. The Comptroller of Public Accounts estimates that the use of private vendors could increase revenue to the Child Support Retained Collections Account by $3,188,000 in fiscal year 1998, $10,467,000 in fiscal year 1999 and $11,577,000 in subsequent fiscal years. The Comptroller estimates that the increase in the number of non-custodial parents located would increase by ten percent, because the use of social security numbers would aid in locating non-custodial parents who are delinquent in child support payments. Approximately one-half of the state's share of collections for recipients of Temporary Assistance for Needy Families (TANF) benefits would be deposited in the Child Support Retained Collections Account. The Comptroller estimates that the gain to this account would be $135,000 in fiscal year 1998 and $270,000 in subsequent fiscal years. Additional child support collections would reimburse the state for grants made under the Temporary Assistance for Needy Families (TANF) program and would be deposited into the Child Support Retained Collections Account in the General Revenue Fund. The public exposure of child support evaders would enhance the agency's search efforts, resulting in increased child support collections. The amount of rewards would be determined by the agency and paid from the Child Support Retained Collections Account in the General Revenue Fund. The Comptroller estimates that the net gain to the Child Support Retained Collections Account would be $44,000 per fiscal year. The bill would require the Sunset Commission to select an independent firm to conduct an analysis of the child support enforcement process in the Office of the Attorney General. The firm conducting the study would make a recommendation to the Sunset Commission, which would be required to report its findings to the 76th Legislature, Regular Session, 1999. The Sunset Commission estimates that this analysis would cost approximately $300,000 to $500,000 in general revenue funds during the 1998-99 biennium. The bill would require that this cost be paid by the Office of the Attorney General out of its regular appropriations. The Department of Public Safety's estimates that its License Issuance Bureau would incur additional postage and envelope costs of $242,506, as a result of sending the advisory notice to those renewing their driver's licenses. One additional Data Entry Operator would be required to offset the added mailing requirements. In fiscal year 1996, there were 3,277,116 driver licenses mailed from the Austin headquarters. 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 Revenue Probable Revenue Probable Probable Change in Number Gain/(Loss) from Gain/(Loss) from Savings/(Cost) Savings/(Cost) of State General Revenue General Revenue from General from State Employees from Fund Fund -- Child Revenue Fund -- Highway Fund FY 1997 Support Retained Child Support Collections Retained Account Collections Account 0001 0001 0001 0006 1998 $300,000 $3,746,000 ($1,002,000) ($281,268) 1.0 1998 601,000 10,783,000 (2,000) (280,470) 1.0 2000 601,000 12,647,000 (2,000) (280,470) 1.0 2001 601,000 12,647,000 (2,000) (280,470) 1.0 2002 601,000 12,647,000 (2,000) (280,470) 1.0 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 $3,044,000 1999 11,382,000 2000 13,246,000 2001 13,246,000 2002 13,246,000 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: 116 Sunset Advisory Commission 405 Department of Public Safety 304 Comptroller of Public Accounts 304 Comptroller of Public Accounts 302 Office of the Attorney General 501 Department of Health 324 Department of Human Services LBB Staff: JK ,CB ,JC