LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 30, 1999 TO: Honorable Toby Goodman, Chair, House Committee on Juvenile Justice & Family Issues FROM: John Keel, Director, Legislative Budget Board IN RE: SB368 by Harris (Relating to court-ordered child support, including the child support enforcement functions of the office of the attorney general and the sunset review of those functions and the implementation of the child support enforcement provisions of the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996; providing civil and criminal penalties.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB368, As Engrossed: positive impact of $2,940,922 through the * * biennium ending August 31, 2001. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $1,470,461 * * 2001 1,470,461 * * 2002 1,470,461 * * 2003 1,470,461 * * 2004 1,470,461 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Savings/(Cost) Revenue Savings/(Cost) Savings/(Cost) * * from Child Gain/(Loss) from TANF from Federal * * Support from Child Federal Funds Funds * * Retained Support 0555 0555 * * Collections in Retained * * the General Collections in * * Revenue Fund the General * * 0001 Revenue Fund * * 0001 * * 2000 $51,825 $1,418,636 $2,118,384 $466,425 * * 2001 51,825 1,418,636 2,118,384 466,425 * * 2002 51,825 1,418,636 2,118,384 466,425 * * 2003 51,825 1,418,636 2,118,384 466,425 * * 2004 51,825 1,418,636 2,118,384 466,425 * *************************************************************************** Fiscal Analysis The bill implements the Sunset Commission recommendations relating to the child support enforcement function at the Office of the Attorney General (OAG). Provisions of the bill would create an interagency work group on child support enforcement, create a county advisory work group, establish an ombudsman program to track complaints, authorize courts to enter temporary orders for child support after a father signs a birth certificate or executes a statement of paternity, and modify the memorandum of understanding (MOU) between the Attorney General and the Department of Human Services (DHS) relating to recipients of Temporary Aid to Needy Families (TANF) and child support collections. The bill would streamline the judicial process by removing the requirement that a referring court countersign child support orders issued by IV-D masters and requires the presiding judges of the administrative judicial regions and the Office of the Court Administration to develop a plan to improve the quality and accountability of the IV-D Masters. The bill would add a new chapter to the Family Code concerning the registration of private child support entities, and establishes the OAG as the entity responsible for the registration of collection entities. The OAG is authorized to collect an application fee for use in administering this chapter. Revenues from the fee would be depositied into a newly created account, the Child Support Registration Account, in the General Revenue Fund. Most of the provisions of the bill could be implemented without a significant cost to the agencies involved. The provisions relating to establishing support orders based on paternity acknowlegements or birth certificates and the provisions relating to the MOU between the OAG and DHS are expected to have a positive fiscal impact. Methodology The OAG estimates that the provisions allowing a court to issue a temporary support order based on a signed birth certificate or paternity acknowledgement would reduce the number of paternity tests administered each year, reducing costs by $518,250 per year. Ten percent of the savings would be from the state's retained collections account in General Revenue, and the other 90% would be from federal child support enforcement funds. These provisions are also projected to result in an increase of $3,479,390 in child support collections, with the state retaining one-third of those increased collections. The other two-thirds would be returned to the federal government. The provisions in the bill relating to the MOU with DHS are expected to result in an increase of $298,602 per year in child support collections, with the state retaining one-third of that amount. The revised MOU is also expected to reduce the amount spent on TANF grants by $2,118,384 per year. Since the OAG's administrative costs of registering and regulating private child support entities is unknown, the amount of fee revenue that would deposited into the Child Support Registration Account cannot be estimated. However, since the fees would be set to cover administrative costs, there should be no net fiscal impact on the state. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 302 Office Of The Attorney General, 304 Comptroller of Public Accounts LBB Staff: JK, MD, PE, SC