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
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.
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

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