LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 19, 2001 TO: Honorable Elliott Naishtat, Chair, House Committee on Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: HB2631 by Wohlgemuth (Relating to the operation of the financial assistance program.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2631, As Introduced: negative impact of $(11,932,287) 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. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(6,950,398) * * 2003 (4,981,889) * * 2004 (5,289,763) * * 2005 (4,577,125) * * 2006 (5,222,391) * **************************************************** All Funds, Five-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Savings/ Savings/ Savings/ Savings/ Number of * * (Cost) from (Cost) from (Cost) from (Cost) from State * * General General Federal Federal Employees * * Revenue Revenue Funds - Funds - from FY 2001 * * Fund Fund Federal Federal * * 0001 0001 0555 0555 * * 2002 $243,070 $243,069 (41.0) * * $(7,193,468) $(4,303,788) * * 2003 (5,827,299) 845,410 (6,623,626) 845,411 (57.0) * * 2004 (6,135,177) 845,414 (7,352,225) 845,411 (57.0) * * 2005 (5,422,535) 845,410 (8,160,970) 1,691,527 (57.0) * * 2006 (6,019,014) 796,623 (9,058,676) 163,892 (54.0) * *********************************************************************** Given the limited availability of TANF federal funds, for the purposes of this fiscal note, General Revenue is assumed as the method of financing. Should additional TANF federal funds become available, $4,105,037 in FY 2002 and $580,838 in FY 2003 in General Revenue costs assumed above could be financed with TANF federal funds. Fiscal Analysis The bill would add or amend sections of Chapter 31, Human Resources Code. The bill would require a full family sanction be imposed if a recipient failed to comply with any Personal Responsibility Agreement (PRA) requirement, but only after conducting a case review at the client's residence. For child support noncompliance, a full family sanction would be imposed for the TANF recipients' first noncompliance. Before imposing any sanction or full family sanction, a representative of the department would be required to conduct a case review to determine the reasons for the non-compliance and to determine support services that would enable the person or family member to comply or prevent future noncompliance. The bill would require: the Department of Human Services (DHS) to permanently disqualify a TANF recipient if they are convicted of a drug-related felony while they are receiving TANF, unless they meet the requirements stated in the bill; the earned income disregard (EID) be extended from four months to six months for persons participating in employment activities and excludes all earned income up to the maximum gross income limit set by the department; all adults receiving financial assistance to work or participate in an employment activity authorized by federal law; a non-custodial teen parent of a child receiving TANF to participate in parenting skills training, money management classes, and community service work; modifications to the determination of the applicants ownership interest in a vehicle and allows a higher exclusion than is currently allowed; and allowing a two-parent family to satisfy participation requirements through the participation of the primary wage-earner or through the combined participation of both the primary and secondary wage-earners in work or employment activities. Methodology DHS assumed the PRA penalties would reduce the number of staff by 73 in FY 2002, 97 in FY 2003, and 97 to 100 in the later years, and would reduce the amount of TANF grants in FY 2002 by $28.3 million because of lower caseloads; in FY 2003, by $37.8 million and in FY 2004 to FY 2006, $39.5 million to $41.0 million less in TANF grants. The DHS estimate stated the child-support penalties and full family sanction would reduce TANF grants by $425,617 in FY 2002, $554,226 in FY 2003, and $544,000 to $572,000 in the later years. DHS estimated case review would cost $13.6 million in FY 2002 and $13.7 million in FY 2003 for contracted services and require 20 contract managers. DHS estimated the earned income disregard provision would add four staff in FY 2002 and add $4.1 million in TANF grants. In subsequent years DHS estimated it would add four staff and add $4.0 million in grants. DHS estimated Section 7 (vehicles) would add eight staff and $2.9 million in grants in FY 2002. In FY 2003, 16 staff and add $5.6 million in grants, FY 2004 to FY 2006, 18-19 staff and $6.6 million to $7.1 million in TANF grants. The Texas Workforce Commission (TWC) estimated the EID cases in the Choices program would increase and Choices child care costs would also increase. The range for increased costs for the Choices program by TWC was from $4,377,482 in FY 2002, to $5,845,176 in FY 2006. Child care costs estimated by the TWC ranged from $8,630,147 in FY 2002, to $10,813,950 in FY 2006. All costs for the Choices program and child care were from TANF Federal Funds. The table above includes savings to the Medicaid program for reduced TANF clients pursuant to provisions related to PRA penalties in the bill. The table above also includes increased amounts for medical assistance payments for the increase in eligible months to six from four for EID. The increase for EID for FY 2002 is estimated to be $7,149,149 and $11,024,677 for FY 2003 with increases of 11 percent thereafter. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 302 Office of the Attorney General, 320 Texas Workforce Commission, 324 Texas Department of Human Services, 501 Texas Department of Health LBB Staff: JK, HD, ML