LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 22, 1997 TO: Honorable Toby Goodman, Chair IN RE: Senate Bill No. 29, As Engrossed Committee on Juvenile Justice and Family Issues By: Zaffirini House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB29 ( Relating to the implementation of the child support enforcement provisions of Title III of the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996; providing penalties.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB29-As Engrossed Implementing the provisions of the bill would result in a net negative impact of $(6,875,673) 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 amend sections of the Texas Family Code and the Business and Commerce Code to implement the Title IV-D child support enforcement requirements under the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). This Act requires all states to enact specific federal mandates relating to the administration of the child support enforcement program under Title IV-D of the federal Social Security Act. Fiscal Analysis The bill would require the development of a State Case Registry of all IV-D and non IV-D child support orders entered or modified after October 1, 1998, which would match IV-D cases with a national database. A State Disbursement Unit would be established for the collection and disbursement of child support payments in all IV-D cases and in non IV-D cases in which a support order is subject to income withholding. A State Directory of New Hires, an automated directory containing information provided by employers in the state on all new hires, would be established. The Texas Child Support Enforcement System (TXCSES) would need to be reprogrammed to take into account the elimination of the "$50 disregard" distribution of child support payments received and the need for new interfaces and new enforcement and establishment remedies. Methodolgy The Office of the Attorney General has estimated that the cost of developing a State Case Registry, a State Disbursement Unit and a State Directory of New Hires would be programming and telecommunication costs, including the hiring of additional administrative technicians and contracting with a vendor to create and maintain the required databases. The costs related to these items would be approximately $11,585,770 in fiscal year 1998 and $8,636,739 in fiscal year 1999. Federal funds would amount to sixty-six percent of the cost of funding these initiatives. Costs associated with the TXCSES system would be the costs of programming changes to the system, although the Office of the Attorney General has sufficient resources and employees to effect needed programming changes associated with the TXCSES system without requiring additional resources. 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 Probable Savings/(Cost) Savings/(Cost) from General from Federal Funds Revenue Fund--Child Support Retained Account 0001 0555 1998 ($3,939,182) ($7,646,608) 1998 (2,936,491) (5,700,248) 2000 (1,725,963) (3,350,399) 2001 (1,693,838) (3,288,038) 2002 0 0 Net Impact on General Revenue Related Funds: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 ($3,939,182) 1999 (2,936,491) 2000 (1,725,963) 2001 (1,693,838) 2002 0 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. Impact to local government has been assumed at $204,000 each year from fiscal year 1999 through fiscal year 2002. A registry fee could be established by local governments and federal financial participation could be passed through to counties. Source: Agencies: 304 Comptroller of Public Accounts 302 Office of the Attorney General 405 Department of Public Safety 501 Department of Health LBB Staff: JK ,CB ,BB ,JC