LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
 
April 25, 2023

TO:
Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services
 
FROM:
Jerry McGinty, Director, Legislative Budget Board
 
IN RE:
SB1871 by Hughes (Relating to the creation of the Texas Empowerment Account pilot program for assisting certain recipients of public benefits in achieving self-sufficiency.), As Introduced


Estimated Two-year Net Impact to General Revenue Related Funds for SB1871, As Introduced : an impact of $0 through the biennium ending August 31, 2025.

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
2024$0
2025$0
2026$0
2027$0
2028$0

All Funds, Five-Year Impact:

Fiscal Year Probable Savings/(Cost) from
Temporary Assistance for Needy Families (TANF)
2024($7,840,500)
2025($6,828,000)
2026$0
2027$0
2028$0


Fiscal Analysis

The bill would amend Human Resources Code by adding Chapter 37, requiring the Comptroller, in collaboration with the Health and Human Services Commission (HHSC), to establish and administer the Texas Empowerment Account Pilot Program to provide up to 1,000 low income families with funding for eligible expenses through individual empowerment accounts. The program would operate for at least 12 months, but not more than 24 months.

The bill would require the Comptroller to establish and administer the Texas Empowerment Account Program Fund as a dedicated account in the General Revenue Fund. The Fund would consist of appropriations, credits, or transfers by the legislature or federal block grants, as well as gifts, grants, donations, and any other money available for the purposes of the pilot program. The Comptroller would be authorized to deduct from the fund an amount not to exceed 3% for the Comptroller, and 5% for participant organizations to cover program administration costs.

The bill lists certain eligibility requirements of families to participate in the pilot program. Annual program assistance amounts allocated to participants would be equal to the financial assistance and supplemental nutrition assistance benefits the participant would receive if they did not participate in the pilot program. Information on these amounts would be provided to the Comptroller by HHSC. The Comptroller would establish an account for each participant to receive program assistance money and provide access to a web-based application for participants to track financial activity in the account.

The bill would require the Comptroller to certify eligible organizations as family service organizations for participation in the pilot program. Certified organizations would facilitate an application process for interested families and enroll them in the pilot program if the families meet certain eligibility requirements and the organization has the capacity to provide services to the family.

The bill would authorize the Comptroller to contract with a private entity to randomly audit participating family service organizations to ensure compliance with program requirements. It would also require the Comptroller to suspend a participants program account if the participant fails to comply with program requirements, which could lead to a permanent closure of the account. Upon receipt of evidence of the fraudulent use of an account, the Comptroller may refer the case to the Attorney General for investigation and prosecution of an offense.

The bill would require the Comptroller, throughout the operation of the program, to collect certain financial, demographic, and socioeconomic information, as well as a cost benefit analysis on program effectiveness, and a statistical analysis of taxpayer revenue spent on the program and state money appropriated per program. This information would be posted on the Comptroller's website quarterly. Upon completion of the program, the Comptroller would use existing resources to conduct a study on the outcomes of the program. 

The bill would require the Comptroller and the executive commissioner of HHSC to adopt rules and procedures necessary to implement, administer, and enforce the provisions in the bill.

This legislation would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either in, with, or outside the Treasury, or create a dedicated revenue source. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.

Methodology

According to HHSC, the agency would incur a one-time technology cost of $1,012,500 to make updates to Texas Integrated Eligibility Redesign System (TIERS)/Eligibility Services Automation to allow the agency to collect and share information about financial assistance recipients required to implement the pilot program. This could be paid for out of the Temporary Assistance for Needy Families (TANF) block grant. Additionally, HHSC estimates the cost to disburse program payments to 1,000 pilot participants would be $6,828,000 per fiscal year. This analysis assumes these amounts could be funded out of the TANF without an appropriation from General Revenue. 

The Comptroller anticipates that any administrative costs resulting from the passage of this bill could  be absorbed using existing resources. Additionally, the OAG anticipates any legal work resulting from the passage of this bill could be absorbed with current resources.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.


Source Agencies:
302 Office of the Attorney General, 304 Comptroller of Public Accounts, 529 Health and Human Services Commission
LBB Staff:
JMc, NPe, LCO, CSmi, NV