The bill would require the Department of Family and Protective Services (DFPS) in cooperation with the Comptroller of Public Accounts to establish and administer a foster child trust account program to hold federal benefits. The bill would require the Comptroller to maintain the account and allow them to contract with financial institutions. The bill would also require DFPS to manage the account and provide the accounting information to the child and the child's legal representative regarding the saving of the child's resources under the program on the date the child is discharged from or otherwise leaves foster care.

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026	($9,732,750)
2027	($9,364,206)
2028	($8,890,341)
2029	($8,890,511)
2030	($8,890,683)

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1	Probable Savings/(Cost) from GR Match For Medicaid 758	Probable Savings/(Cost) from Federal Funds 555	Change in Number of State Employees from FY 2025
2026	($9,726,007)	($6,743)	($88,309)	1.0
2027	($9,359,416)	($4,790)	($61,986)	1.0
2028	($8,888,703)	($1,638)	($14,069)	1.0
2029	($8,888,871)	($1,640)	($14,082)	1.0
2030	($8,889,042)	($1,641)	($14,097)	1.0

Comptroller:
This analysis assumes the Comptroller would require 1.0 Accountant IV Full-Time Equivalent (FTE) to monitor the funds and distribute funds as necessary. Personnel costs associated with the 1.0 FTE are estimated to be $84,000 in General Revenue in each fiscal year. In addition, the Comptroller estimates an annual cost of $2,000 in General Revenue in each fiscal year for investment management fees associated with contracting with a financial institution.

DFPS:
According to DFPS, the agency currently uses children's monthly Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), and Veterans Affairs (VA) benefits to offset the cost of care to foster care providers and Single Source Continuum Contractors under Community-based Care. In fiscal year 2024, DFPS used $8,600,000 of SSI and SSDI benefits to offset the cost of care paid to providers for 1,594 children. Since that funding would now be deposited into the trust account, General Revenue of an equal amount would be needed to offset foster care costs in each fiscal year.

While there is no cost or savings to the state, DFPS noted they currently pass through monthly SSI, SSDI, and VA child benefits to kinship and fictive kin caregivers who are not verified foster placements to support the child. In fiscal year 2024, $2,400,000 was passed through to 591 relative caregivers for 2,296 children. The agency assumes this would result in a loss of an average of $16,000 per child for the kinship and fictive kin caregivers.

Additionally, DFPS stated that older youth and young adults in the Home and Community-Based Services Program (HCS) must have SSI benefits for placement funding. Currently, HCS placements accept SSI funding in lieu of placement cost. DFPS assumes this would likely decrease HCS options for placement for youth in conservatorship and young adults aging out of conservatorship.

Lastly, DFPS currently applies for all children determined to be eligible for SDI benefits and SSI benefits who are not Title IV-E eligible or are Title IV-E with a Basic service level, in order to maximize federal funds. The agency cannot claim Title IV-E funds while also receiving SSI benefits on behalf of a child. DFPS assumes they would be required to apply for SSA and/or VA benefits for all children who are eligible to receive the benefits which would include all Title IV-E eligible children. DFPS assumes the need of 1.0 Human Resources Specialist VI FTE to manage the increased workload of applying for benefits for all eligible children.

Furthermore, DFPS cannot determine loss of Title IV-E due to claiming SSI benefits for children because the agency is uncertain how many of these children will be determined by the Social Security Administration to be SSI eligible. Any loss of Title IV-E would have to be replaced with General Revenue.

Comptroller:
This analysis assumes the Comptroller would incur IT costs of $150,000 in General Revenue in fiscal year 2026 and $75,000 in General Revenue in fiscal year 2027, for 1,500 programming hours to create a database, establish account setup, and tracking of funds. Additional annual costs of $15,000 per fiscal year would be required starting in fiscal year 2028 for ongoing support of the database.

DFPS:
DFPS assumes the need to modify the Information Management Protecting Adults and Children in Texas (IMPACT) system for the creation of an account for each child and the ability to report on ledger activities. It is assumed to modify the system 3.0 System Analyst V Contracted FTEs would be needed in fiscal year 2026 to complete 4,914 hours of work and 2.0 System Analyst Contracted FTEs in fiscal year 2027 to complete 3,276 of work. Technology costs are estimated to be $548,510 in All Funds in fiscal year 2026 and $371,159 in All Funds in fiscal year 2027.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


May 6, 2025

TO:	Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB577 by West (Relating to the establishment of the foster child trust account program.), As Introduced

The digital content on TLO has been updated to align with the accessibility standards required by WCAG 2.1.