LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 21, 2001 TO: Honorable Mike Moncrief, Chair, Senate Committee on Health & Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB42 by Zaffirini (Relating to identifying and addressing the needs of certain recipients of financial assistance and dependent children of recipients of financial assistance.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB42, As Introduced: negative impact of $(11,368,946) 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 $(5,849,491) * * 2003 (5,519,455) * * 2004 (5,431,319) * * 2005 (5,268,963) * * 2006 (5,226,391) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Change in * * Year Savings/(Cost) Savings/(Cost) Savings/(Cost) Number of State * * from GR MOE for from Federal from GR Match Employees from * * Temporary Funds - Federal for Medicaid FY 2001 * * Assistance for 0555 0758 * * Needy Families * * 0759 * * 2002 $(5,865,373) $147,178 $15,882 44.0 * * 2003 (5,543,652) 228,195 24,197 65.0 * * 2004 (5,455,522) 235,190 24,203 66.0 * * 2005 (5,292,057) 227,585 23,094 62.0 * * 2006 (5,248,678) 225,503 22,287 61.0 * *************************************************************************** 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, $5,865,373 in FY 2002 and $5,543,652 in FY 2003 of General Revenue costs assumed above could be financed with TANF federal funds. Technology Impact A case management automation application would need to be developed at the Department of Human Services (DHS), with an estimated cost of 8,000 hours of programming at $880,000 and an additional $90,000 for hardware and software. Fiscal Analysis Section 1 of the bill amends Chapter 31 of the Human Resources Code by adding Section 31.00331 requiring DHS to conduct a case review upon application of a penalty to a TANF recipient for noncompliance with THSteps, school attendance, and parenting skills (effective September 1, 2001). Section 4 amends Chapter 31 by adding Sections 31.001 and 31.0111 requiring DHS to develop and implement a personal needs assessment to identify barriers to achieving self-sufficiency and make appropriate referrals, and to develop and implement a needs assessment for TANF children and make appropriate referrals (effective January 1, 2002). Section 5 of the bill amends Chapter 31 by adding Section 31.0128 requiring DHS and the Texas Workforce Commission (TWC) to develop a Memorandum of Understanding to establish a coordinated case management plan for individuals with significant barriers. Section 6 amends Chapter 31 by adding Section 31.046 requiring DHS to implement a performance-based bonus program to reward local offices that design and implement effective case management tools for identifying and addressing the needs of hardest-to-serve TANF recipients (effective September 1, 2001). Section 7 amends Chapter 302 of the Labor Code by adding Section 302.044 requiring TWC to implement a performance-based bonus program to reward career development centers that design and implement effective case management tools for addressing the needs of TANF recipients (effective September 1, 2001). Methodology DHS determined the number of new penalties in FY 2000 for noncompliance with THSteps, school attendance, and parenting skills. The TANF growth rate was applied, and it was assumed that 15% of cases with penalties will leave the rolls prior to review. It was also assumed that each case review would take ten minutes, and that 10% of clients would comply after the review and referral, thus increasing the grant amount. It was assumed that 50% of cases with a complete review require a personal needs assessment, the assessment takes 30 minutes, and 5% of cases assessed and referred become employed on average three months earlier than if the assessment and referral had not been conducted. On the needs assessment for children, it was assumed that 25% of cases with an eligibility determination will require a needs assessment, and that it would take 15 minutes to conduct the assessment and make referrals. For the performance-based bonus program to reward local offices that design and implement effective case management tools, DHS assumed all rewards would be non-financial. TWC assumed bonuses would be financial and all 28 local workforce development boards (LWDBs) would be eligible, at least one center in each LWDB area would receive a bonus, nine large areas would be eligible for a bonus of $150,000, and 19 smaller areas would be eligible for a bonus of $75,000. TWC also assumed one staff person would be required to conduct evaluations, including on-site reviews. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 529 Health and Human Services Commission, 324 Texas Department of Human Services LBB Staff: JK, HD, KE