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Amend SB 285 by inserting the following new SECTIONS, 
appropriately numbered, and renumber the remaining sections 
appropriately:
	SECTION _____. (a) Section 31.0031, Human Resources Code, is 
amended by amending Subsection (g) and adding Subsection (h) to 
read as follows:
	(g) In this section:                                                    
		(1) "Caretaker [, "caretaker] relative" means a person 
who is listed as a relative eligible to receive assistance under 42 
U.S.C. Section 602(a).
		(2) "Payee" means a person who resides in a household 
with a dependent child and who is within the degree of relationship 
with the child that is required of a caretaker, but whose needs are 
not included in determining the amount of financial assistance 
provided for the person's household.
	(h) The department shall require each payee to sign a bill of 
responsibilities that defines the responsibilities of the state and 
of the payee.  The responsibility agreement must require that a 
payee comply with the requirements of Subsections (d)(1), (2), (5), 
(6), and (7).
	(b) Beginning September 1, 2003, the Texas Department of 
Human Services shall require each payee of financial assistance 
under Chapter 31, Human Resources Code, to enter into a 
responsibility agreement that complies with the requirements of 
Section 31.0031, Human Resources Code, as amended by this section, 
to continue receiving that assistance.  Each payee of financial 
assistance under Chapter 31, Human Resources Code, who received 
that assistance on behalf of a dependent child before September 1, 
2003, must enter into a responsibility agreement that complies with 
the requirements of Section 31.0031, Human Resources Code, as 
amended by this section, not later that the date of the first 
eligibility review that occurs after September 1, 2003.  The 
department may not enforce the terms of the new agreement until the 
payee has an opportunity to enter into the agreement.
	SECTION _____. Section 31.0031(c), Human Resources Code, is 
amended to read as follows:
	(c) The department shall adopt rules governing sanctions and 
penalties under this section to or for:
		(1) a person who fails to cooperate [comply] with each 
applicable requirement of the responsibility agreement prescribed 
by this section; and
		(2) the family of a person who fails to cooperate with 
each applicable requirement of the responsibility agreement.
	SECTION _____. (a) Sections 31.0032, 31.0033, and 31.0034, 
Human Resources Code, are amended to read as follows:
	Sec. 31.0032. PAYMENT OF ASSISTANCE FOR PERFORMANCE
[PENALTIES AND SANCTIONS]. (a) Except as provided by Section 
231.115, Family Code, [as added by Chapter 911, Acts of the 75th 
Legislature, Regular Session, 1997,] if after an investigation the 
department or the Title IV-D agency determines that a person is not 
cooperating [complying] with a requirement of the responsibility 
agreement required under Section 31.0031, the department 
[immediately] shall immediately apply a sanction terminating the 
total amount of financial assistance provided under this chapter to 
or for the person and the person's family [apply appropriate 
sanctions or penalties regarding the assistance provided to or for 
that person under this chapter].
	(a-1) The department shall apply a sanction or penalty 
imposed under Subsection (a) for a period ending when the person 
demonstrates cooperation with the requirement of the 
responsibility agreement for which the sanction was imposed or for 
a one-month period, whichever is longer.
	(b) The department shall immediately notify the caretaker 
relative, second parent, or payee receiving the financial 
assistance if the department will not make the financial assistance 
payment for the period prescribed by the Subsection (a-1) because 
of a person's failure to cooperate with the requirements of the 
responsibility agreement during a month [whether sanctions will be 
applied under this section].
	(c) To the extent allowed by federal law, the Health and Human 
Services Commission or any health and human services agency, as 
defined by Section 531.001, Government Code, may deny medical 
assistance for a person who is eligible for financial assistance 
but to whom that assistance is not paid because of the person's 
failure to cooperate.  Medical assistance to the person's family 
may not be denied for the person's failure to cooperate.  Medical 
assistance may not be denied to a person receiving assistance under 
this chapter who is under the age 19, a pregnant adult, or any other 
person who may not be denied medical assistance under federal law.
	(d) Except as provided by Subsection (c), this [This] section 
does not prohibit the Texas Workforce Commission, the Health and 
Human Services Commission, or any health and human services agency, 
as defined by Section 531.001, Government Code, [department] from 
providing [medical assistance,] child care, or any other related
social or support services for an individual who is eligible for 
financial assistance but to whom that assistance is not paid 
because of the individual's failure to cooperate [subject to 
sanctions or penalties under this chapter].
	(e) The department by rule shall establish procedures to 
determine whether a person has cooperated with the requirements of 
the responsibility agreement.
	Sec. 31.0033. GOOD CAUSE [NONCOMPLIANCE] HEARING FOR FAILURE 
TO COOPERATE. (a) If the department or Title IV-D agency determines 
that a person has failed to cooperate with the requirements of the 
responsibility agreement under Section 31.0031 [penalties and 
sanctions should be applied under Section 31.0032], the person 
determined to have failed to cooperate [not complied] or, if