LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 5, 2001
TO: Honorable Elliott Naishtat, Chair, House Committee on
Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB43 by McClendon (Relating to the consideration of
income earned by certain recipients of Temporary
Assistance for Needy Families benefits for eligibility
determination purposes.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB43, As Introduced: negative impact of $(25,966,348) through the *
* biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(12,000,550) *
* 2003 (13,965,798) *
* 2004 (15,548,340) *
* 2005 (15,454,969) *
* 2006 (15,801,281) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable *
* Year Savings/(Cost) from Savings/(Cost) from Savings/(Cost) from *
* GR MOE for Temporary GR Match for Federal Funds - *
* Assistance for Needy Medicaid Federal *
* Families 0758 0555 *
* 0759 *
* 2002 $(11,758,895) $(241,655) $(365,519) *
* 2003 (13,656,360) (309,438) (464,707) *
* 2004 (15,238,688) (309,652) (465,834) *
* 2005 (15,145,045) (309,924) (466,245) *
* 2006 (15,491,084) (310,197) (466,656) *
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Given the limited availability of Temporary Assistance for Needy Families
(TANF) federal funds, for the purpose of this fiscal note General
Revenue is assumed as the method of financing. Should additional TANF
federal funds become available, $11,758,895 in FY 2002 and $13,656,360 in
FY 2003 of General Revenue costs assumed above could be financed with
TANF federal funds.
Technology Impact
An estimated $214,500 for 1,950 hours of programming would be required by
the Department of Human Services (DHS) to implement the provisions of
the bill.
Fiscal Analysis
The bill adds a new Section 31.0038 to the Human Resources Code and
repeals Section 31.043. The bill requires DHS to exclude all earned
income in excess of $120 (the work-related expense deduction) for a
recipient of TANF, rather than the current 90% disregard, when
determining eligibility and benefits. The time period of the earned
income disregard is extended from the current four months to six months.
The department may not disregard earned income of a recipient who left
employment voluntarily without good cause while receiving financial
assistance, and the department may not exempt any recipient from
participating in work or employment activities during the period of the
disregard. The bill is effective September 1, 2001.
Methodology
The impact of increasing the earned income disregard from 90% to 100% was
estimated by subtracting the average grant per case from the maximum
grant. It was assumed that the number of clients receiving the earned
income disregard increases 8% in FY 2002 and 25.3% in FY 2003, remaining
level through FY 2006. A retention factor was applied over the period of
the earned income disregard, reflecting current experience of 32.2% of
clients remaining on the caseload through the fourth month.
In addition to the increase for cash assistance, it was assumed that
clients would receive an additional two months of child care at $16.21
per day for 43.5 days. It was also assumed that the client would receive
an additional two months of CHOICES services at $178.83 per month.
Extending the disregard by two months provides clients two additional
months of Medicaid coverage. Medicaid costs reflect insured services,
cost-reimbursed services, vendor drug and medical transportation.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 324 Texas Department of Human Services, 501 Texas
Department of Health, 320 Texas Workforce Commission
LBB Staff: JK, HD, KE