HBA-MPM, C.S.H.B. 3639 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3639 By: Naishtat Human Services 4/25/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE In 1995, the 74th Texas Legislature made changes to the Texas welfare system by enacting legislation which imposed time limits on financial assistance, instituted a personal responsibility agreement as a condition of benefits, and increased work requirements. Additionally, the legislation consolidated all employment services into a new state agency, the Texas Workforce Commission (commission), and devolved much responsibility for these programs to local workforce development boards. In the summer of 1996, the United States Congress enacted legislation regarding welfare reform under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. This legislation eliminated the Aid to Families with Dependent Children and replaced it with the Temporary Assistance to Needy Families block grant. This legislation also ended the entitlement to public assistance, added time limits, and work requirements, as well as other policy changes and budget reductions. Because Texas had implemented its own reforms, the state was allowed to continue to follow state policy for time limits and other provisions until March, 2002, at which time the state is required to come into alignment with federal provisions. Texas has experienced a decline in the number of individuals receiving public assistance over the past several years. While many jobs are available, many of these typically pay wages below poverty level and provide few workplace benefits. Additionally, access to child care and other transitional benefits, as well as help with child support collections and other welfare-to-work services, has remained limited. Some individuals may also face multiple barriers to successfully entering the workplace, such as low education skills, substance abuse, or domestic violence. C.S.H.B. 3639 addresses certain policy changes Texas must implement by the year 2002 in order to come into compliance with federal law with respect to public financial assistance. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Department of Human Services (department) in SECTION 1.03 (Sections 31.0039 and 31.014, Human Resources Code), SECTION 2.01 (Section 22.0271, Human Resources Code), and SECTION 5.01 (Section 31.0315, Human Resources Code) and that rulemaking authority previously delegated to the department is modified in SECTION 1 (Section 31.0031, Human Resources Code) of this bill. SECTION BY SECTION ANALYSIS ARTICLE 1. PERSONAL RESPONSIBILITY AND SANCTIONS SECTION 1.01. SANCTIONS FOR NONCOMPLIANCE. (a) Amends Section 31.0031(c), Human Resources Code, as follows: (c) Requires the Texas Department of Human Services (department), subject to the requirements of Section 31.00321, Human Resources Code, to adopt rules governing sanctions and penalties under this section to or for the family of a person who fails to comply with the requirement of the responsibility agreement under Subsection (d), which sets forth all requirements of the responsibility agreement. (b) Amends Sections 31.0032(a) and (c), Human Resources Code, to make conforming changes. (c) Amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.00321, as follows: Sec. 31.00321. PENALTIES AND SANCTIONS FOR NONCOMPLIANCE WITH CERTAIN REQUIREMENTS. (a) Makes this section applicable only to the application of sanctions or penalties to a person who, without good cause as determined by Section 31.0033, Human Resources Code, fails or refuses to comply with a requirement of the responsibility agreement under Section 31.0031(d). (b) Requires the department, on a person's first failure or refusal to comply with a requirement of the responsibility agreement under Section 31.0031(d), Human Resources Code, to reduce the amount of financial assistance provided to or for each adult person in the family who is not in compliance for a period of one month or until each adult member of the family complies, whichever is later. Requires the department, if each adult member of the family has not complied with the requirement under Section 31.0031(d), Human Resources Code, after six months, subject to the requirements of Section 31.003311, Human Resources Code, to terminate the total amount of financial assistance provided to or for the person and the person's family. (c) Requires the department, on a person's second failure or refusal to comply with the requirement of the responsibility agreement under Section 31.0031(d), Human Resources Code, to reduce the amount of financial assistance provided to or for each adult person in the family who is not in compliance for a period of two months or until each adult member of the family complies, whichever is later. Requires the department, if each adult member of the family has not complied with the requirement under Section 31.0031(d), Human Resources Code, after three months, subject to the requirements of Section 31.00331, to terminate the total amount of financial assistance provided to or for the person and the person's family. (d) Requires the department, on a person's third or subsequent failure or refusal to comply with the requirement of the responsibility agreement under Section 31.0031(d), Human Resources Code, subject to the requirements of Section 31.00331, Human Resources Code, to terminate the total amount of financial assistance provided to or for the person and the person's family. (d) Amends Section 31.0033(c), Human Resources Code, to make a conforming change. SECTION 1.02. CASE REVIEW AND COMPLIANCE PLAN. Amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.00331, as follows: Sec. 31.00331. CASE REVIEW AND COMPLIANCE PLAN ON NONCOMPLIANCE WITH CERTAIN REQUIREMENTS. (a) Requires the department, the Texas Workforce Commission (TWC) or a local workforce development board, as appropriate, and, if applicable, the Title IV-D agency to conduct a case review before terminating all financial assistance for a person or the person's family under Section 31.00321, Human Resources Code, to determine reasons for the person's noncompliance and the application of penalties or sanctions against the person or person's family. (b) Provides that the case review under Subsection (a) must include an administrative review of the person's file to determine certain information; document efforts made by the department to contact the person; identify factors contributing to the person's inability to comply; and determine the support services that will enable the person to comply with a requirement. (c) Requires the department to develop a compliance plan for a person based on the case review conducted under this section which may require the person to take specific actions or engage in specific activities as evidence of compliance with a requirement of the responsibility agreement under Section 31.0031(d), Human Resources Code, with which the person has previously not complied. Provides that the compliance plan may also provide referrals to appropriate preventive and support services to address and remove barriers to compliance encountered by the person. (d) Prohibits the department, notwithstanding Section 31.00321, Human Resources Code, from applying a penalty or sanction against a person for noncompliance with a requirement under Section 31.0031(d), Human Resources Code, under certain circumstances. (e) Provides that a person who is sanctioned under Section 31.00321, Human Resources Code, for noncompliance with the requirement of the responsibility agreement under Section 31.0031(d), Human Resources Code, and who finds employment is considered to have met certain criteria and is eligible for certain assistance. (f) Authorizes the department and TWC or a local workforce development board, as appropriate, to contract with community-based organizations, academic institutions, or other appropriate entities to provide services determined necessary in the case review conducted under this section. SECTION 1.03. INELIGIBILITY FOR FINANCIAL ASSISTANCE AND FOOD STAMPS RESULTING FROM CERTAIN DRUG-RELATED FELONY CONVICTIONS. (a) Amends Subchapter A, Chapter 31, Human Resources Code by adding Section 31.0039, as follows: Sec. 31.0039. INELIGIBILITY RESULTING FROM DRUG-RELATED FELONY CONVICTIONS. (a) Provides that a person is permanently ineligible for financial assistance if the person is convicted, for conduct occurring after September 1, 1999, of an offense under federal law or the law of this state or any other state that at the time of the conviction is classified as a felony by the jurisdiction involved and has as an element the manufacture or delivery of a controlled substance, as defined in 21 U.S.C. (Food and Drugs; Drug Abuse Prevention and Control; Definitions), Section 802 and its subsequent amendments. (b) Provides that except as provided by Subsection (d), a person who is convicted for the offense described in Subsection (a) is ineligible for financial assistance until the third anniversary of the date of the person's conviction. (c) Requires the department to require an applicant for financial assistance to indicate in writing whether the applicant or any member of the applicant's household has been convicted of an offense described by Subsection (a) or (b). (d) Provides that a person convicted of an offense described by Subsection (b) is not ineligible under that subsection for financial assistance under certain conditions. (e) Requires the department to adopt rules as necessary to implement this section. (f) Provides that this section does not affect the eligibility for financial assistance of any other member of the household of a person ineligible as a result of a conviction of an offense described by Subsection (a) or (b) or the eligibility of a person convicted of an offense described by Subsection (a) or (b) for a federal benefit specified in 21 U.S.C., Section 862a(f) and its subsequent amendments. (b) Amends Chapter 33, Human Resources Code, by adding Section 33.014, as follows: Sec. 33.014. INELIGIBILITY RESULTING FROM DRUG-RELATED FELONY CONVICTIONS. (a) Provides that a person is permanently ineligible for food stamps if the person is convicted, for conduct occurring after September 1, 1999, of an offense under federal law or the law of this state or any other state that at the time of the conviction is classified as a felony by the jurisdiction involved and has as an element the manufacture or delivery of a controlled substance, as defined in 21 U.S.C., Section 802, and its subsequent amendments. (b) Provides that except as provided by Subsection (d), a person who is convicted, for conduct occurring after September 1, 1999, of an offense under federal law or the law of this state or any other state that at the time of the conviction is classified as a felony by the jurisdiction involved and has as an element the possession or use of a controlled substance, as defined in 21 U.S.C., Section 802 and its subsequent amendments, is ineligible for food stamps until the third anniversary of the person's conviction date. (c) Requires the department to require an applicant for food stamps to indicate in writing whether the applicant or any member of the applicant's household has been convicted of an offense described by Subsection (a) or (b). (d) Provides that a person convicted of an offense described by Subsection (b) is not ineligible under that subsection for food stamps under certain conditions. (e) Requires the department to adopt rules as necessary to implement this section. (f) Provides that this section does not affect the eligibility for food stamps of any other member of the household of a person ineligible as a result of a conviction of an offense described by Subsection (a) or (b) or the eligibility of a person convicted of an offense described by Subsection (a) or (b) for a federal benefit specified in 21 U.S.C., Section 862a(f) and its subsequent amendments. (c) Makes Sections 31.0039 and 33.014, Human Resources Code, as added by this section, applicable only to a person receiving financial assistance under Chapter 31, Human Resources Code, or food stamps under Chapter 33, Human Resources Code, on or after the effective date of the section. SECTION 1.04. STUDY REGARDING ROLE OF SANCTIONS AND INCENTIVES IN IMPROVING PATERNITY ESTABLISHMENT AND CHILD SUPPORT ENFORCEMENT. (a) Requires the department and the attorney general's office to conduct a joint study of existing efforts to establish paternity and collect child support for children in families receiving financial assistance under Chapter 33, Human Resources Code. (b) Provides that the study required by this section must review certain facts and information. (c) Requires the department and attorney general to jointly submit to the 77th Legislature a report based on the study required by this section. Provides that the report must include certain recommendations. ARTICLE 2. WELFARE FRAUD SECTION 2.01. Amends Chapter 22, Human Resources Code, by adding Section 22.0271, Human Resources Code, as follows: Sec. 22.0271. SUBPOENA AUTHORITY: FRAUD INVESTIGATIONS. (a) Authorizes the department to issue a subpoena throughout this state to compel the attendance and testimony of a witness or the production of documents or other evidence relating to an investigation by the department of a potentially fraudulent claim for benefits or other payment under the food stamp or financial assistance program. Authorizes the subpoena to compel attendance or production at the department's offices in Austin or at a place designated by the subpoena. (b) Authorizes the department, by rule, to authorize the Commissioner of Human Services (commissioner) or another department employee or representative to issue a subpoena authorized by this section on the department's behalf. (c) Requires the department to apply for an order directing compliance to the district court of the county in which a person is found, resides, or transacts business, on a person's failure to comply with a subpoena under this section. (d) Provides that a subpoena issued under this section to a financial institution is not subject to Section 30.007 (Production of Financial Institution Records), Civil Practice and Remedies Code. SECTION 2.02 SANCTIONS FOR WELFARE FRAUD. Amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.017, as follows: Sec. 31.017. FRAUD. (a) Prohibits a person, for purposes of establishing or maintaining eligibility of the person and person's family for financial assistance or increasing or preventing a reduction in the amount of assistance, from the following: _making a false or misleading statement; _misrepresenting, concealing, or withholding a fact; or _representing a statement to be true if the person knows it is false. (b) Requires the department, if, after an investigation, it determines a person has violated this section, to notify the person of the alleged violation no later than the 30th day after the investigation is completed and conduct a hearing, or refer the matter to the appropriate district attorney for prosecution. (c) Requires the department, if a hearing officer at an administrative hearing held under this section determines a person has violated this section, to: (1) after the first violation, terminate the total financial assistance provided to or for that person until the first anniversary of termination; (2) after the second violation, terminate the financial assistance provided to or for that person until the second anniversary of the termination; and (3) after the third violation, permanently disqualify the person from receiving financial assistance. (d) Authorizes a person determined to be in violation of this section to appeal the determination by filing a petition in the district court in the county where the violation occurred no later than the 30th day after the decision. (e) Provides that if a person is convicted of an offense under the Penal code for conduct described by this section, the person is permanently disqualified from receiving financial assistance. ARTICLE 3. EMPLOYMENT SECTION 3.01. EARNED INCOME DISREGARDS. (a) Amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.0038, as follows: Sec. 31.0038. EARNED INCOME DISREGARDS FOR EMPLOYMENT. (a) Sets forth the purpose of the earned income disregards benefit. (b) Defines "former recipient of the earned income disregards benefit" for purposes of this section. (c) Prohibits the department, in an adult recipient of financial assistance becomes employed while receiving the assistance, from considering any earned income received by the recipient up to the first six months of employment for purposes of determining the amount of financial assistance granted to the individual for the support of dependent children or whether the family meets household income and resource requirements for financial assistance. (d) Prohibits the department from disregarding under Subsection (c) the earned income of a recipient who left a position of employment voluntarily without good cause in the three-month period immediately preceding the date on which the recipient applied for financial assistance. (e) Prohibits the department from disregarding under Subsection (c) the earned income of a former recipient of the earned income disregards benefit until the first anniversary of the day after the last date on which the former recipient's earned income was disregarded under that subsection. (f) Prohibits the department, during the period the earned income of a recipient is disregarded by the department under Subsection (c), from exempting the recipient from participating in a work or employment activity under Section 31.012, Human Resources Code. (g) Requires the department, in adopting rules under this section, to: (1) ensure that this section is applicable only to recipients with income in an amount not exceeding the maximum gross income limit set by the department under Section 31.003; and (2) promote the purpose described in Subsection (a). (b) Repealer: Section 31.043(a) (Inactive Electronic Benefits Transfer Account), Human Resources Code, as added by Chapter 878, Acts of the 75th Legislature, Regular Session, 1997. This subsection provides that Section 31.043 applies only to an account to which financial assistance provided under this chapter has been transferred under the electronic benefits transfer system for access and use by a recipient of that assistance. SECTION 3.02. POST-EMPLOYMENT ASSESSMENT. Amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.0096, as follows: Sec. 31.0096. POST-EMPLOYMENT ASSESSMENT AND SERVICES. Requires the department and TWC or local workforce development board, as appropriate, to jointly develop a program under which a recipient of financial assistance who obtains employment is assessed after beginning employment to determine the recipient's need for continuing education, training, and other services to promote employment retention and advancement to more highly skilled and compensated employment and provided appropriate services to the extent the services are available. Requires the department to ensure that a recipient of financial assistance obtaining employment receives clear notification of any medical assistance under Chapter 32 (Medical Assistance Program), Human Resources Code, and food stamp benefits under Chapter 33, Human Resources Code, for which the recipient or recipient's family is eligible. SECTION 3.03. WORK REQUIREMENT EXEMPTIONS. (a) Amends Section 31.012(c), Human Resources Code, as follows: (c) Provides that effective January 1, 2000, rather than September 1, 1995, a person is not required to participate in a program under this section until the person's youngest child at the time the person first becomes eligible for assistance reaches the age of three, rather than the age of five. Provides that effective January 1, 2001, rather than September 1, 1997, a person is exempt until the person's youngest child at the time the person first became eligible for assistance reaches the age of two, rather than the age of four. Provides that effective January 1, 2002, a person is exempt until the person's youngest child at the time the person first became eligible for assistance reaches the age of one. Authorizes only one parent to claim an exemption described by this section in a two-parent family. Makes conforming changes. (b) Requires the department, before implementing any provision of Section 31.012, Human Resources Code, as amended by this section, to develop and implement a client education effort targeting clients affected by the changes to that section. Requires the department to inform each client whose exemption status is affected of the pending change, the timeline for the change, and the effect of the change on the client's work requirements and time limits. (c) Requires a state agency, if, before implementing any provision of Section 32.012(c), Human Resources Code, as amended by this section, the agency determines that a waiver or authorization form a federal agency is necessary for implementation, to request the waiver or authorization. Authorizes the agency to delay implementation of the provision until the waiver or authorization is received. (d) Requires the department, if a waiver or authorization requested under Subsection (d) of this section is denied, to develop and implement a plan relating to authorizing exemptions from participation in work or employment activity requirements for certain recipients of Temporary Assistance for Needy Families (TANF) benefits in a way that complies with federal law and regulations. (e) Makes this section prospective to a person receiving financial assistance under Chapter 31, Human Resources Code, on or after the effective date of this section, regardless of the date on which eligibility for assistance was determined. SECTION 3.04. BONUS PROGRAM FOR LOCAL WORKFORCE DEVELOPMENT BOARDS. Amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.013, as follows: Sec. 31.013. PERFORMANCE-BASED BONUS PROGRAM FOR LOCAL WORKFORCE DEVELOPMENT BOARDS. (a) Requires TWC to develop and implement a performance-based bonus program to reward efforts by local workforce development boards in preparing, placing, and maintaining recipients of financial assistance in jobs that pay self-sustaining wages and which allow the recipients to become independent of financial assistance and, if applicable, food stamps. (b) Authorizes TWC to take certain facts into consideration in developing criteria for the bonus program. (c) Requires a local workforce development board to use money provided under this section for expenses relating to education, training, and support services necessary to prepare, place, and maintain recipients of financial assistance in jobs that pay selfsustaining wages. (d) Authorizes TWC to provide for payment of additional amounts to a local workforce development board under the bonus program based on the wage level attained by recipients of financial assistance served by the board and the length of time that those recipients maintain employment. ARTICLE 4. SUPPORT SERVICES SECTION 4.01. PERSONAL NEEDS ASSESSMENT. (a) Amends Section 31.0095, Human Resources Code, as follows: Sec. 31.0095. New title: EMPLOYABILITY NEEDS ASSESSMENT. SECTION 4.01. (b) Amends Section 31.010, Human Resources Code, as follows: Sec. 31.010. NEW TITLE: SUPPORT SERVICES RELATED TO EMPLOYABILITY OF A RECIPIENT. SECTION 4.01 (c) Amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.011, as follows: Sec. 31.011. PERSONAL AND FAMILIAL NEEDS ASSESSMENT AND SUPPORT SERVICES. (a) Requires the department, in cooperation with TWC or a local workforce development board, as appropriate, to assist a recipient of financial assistance in assessing the recipient's skills and the needs, other than employability needs assessed under Section 31.0095, Human Resources Code, of the recipient and the recipient's family that, if addressed would help the recipient and the recipient's family to attain and retain the capability of independence and self-care. (b) Requires the department, based on the needs assessment under this section, to refer the recipient and the recipient's family to appropriate preventive and support services provided by the department or another public or private entity. Authorizes the department to refer a recipient and a recipient's family to certain preventive and support services. SECTION 4.02. NUTRITION ASSISTANCE EDUCATION AND OUTREACH. (a) Amends Section 33.025, Human Resources Code, as follows: Sec. 33.025. NUTRITION EDUCATION AND OUTREACH FOR THOSE ELIGIBLE FOR FOOD STAMPS. Requires the plan of operation under this section, rather than the plan of operation for education and outreach, to ensure that low-income consumers are provided with information materials that include, rather than include "but are not limited to," certain types of information with regard to nutrition and nutritional assistance. Authorizes the plan of operation to include use of public service announcements on radio and television regarding nutritional assistance. Requires the department, in developing and implementing the plan of operation, to enlist the assistance of certain types of public and private nonprofit agencies that operate nutrition education and outreach programs. Makes a conforming change. ARTICLE 5. CHILD SUPPORT SECTION 5.01. INCENTIVE PROGRAM. Amends Section 31.0315, Human Resources Code, by adding Subsection (g), as follows: (g) Authorizes the department, subject to the availability of funds appropriated for that purpose, in cooperation with the Title IV-D agency, to, by rule, develop an incentive program designed to encourage an applicant or an applicant's relatives to cooperate with the requirements of this section. Provides that the program is authorized to include certain financial incentives. SECTION 5.02. DISREGARD OF CHILD SUPPORT. Amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.0041, as follows: Sec. 31.0041. CHILD SUPPORT DISTRIBUTION. (a) Defines "Title IV-D agency" for purposes of this section. (b) Prohibits the department from considering the amount of child support distributed by the Title IV-D agency to a recipient of financial assistance and that would not otherwise disqualify the recipient or recipient's family from receiving the assistance for purposes of determining the amount of financial assistance granted to an individual under this chapter for the support of dependent children or whether the family meets household income and resource requirements for financial assistance under this chapter. SECTION 5.03. OBLIGOR EMPLOYMENT ASSISTANCE. (a) Amends Section 231.115, Family Code, as added by Chapter 165, Acts of the 75th Legislature, Regular Session, 1997, as follows: Sec. 231.115. New title: UNEMPLOYED AND UNDEREMPLOYED OBLIGORS. Deletes "noncustodial parents" from title. Requires the Title IV-D agency to refer to appropriate state and local entities that provide employment services, rather than those which assist unemployed noncustodial parents in gaining employment, any unemployed or underemployed obligor, rather than a noncustodial parent, who is in arrears in court-ordered child support payments. Deletes specific qualifications of a child receiving child support services. Makes conforming changes. (b) Amends Subchapter A, Chapter 302, Labor Code, by adding Section 302.0035, as follows: Sec. 302.0035. EMPLOYMENT ASSISTANCE PROGRAM FOR CERTAIN PARENTS. Requires the division of workforce development of TWC (division) to provide certain employment assistance services to a person referred by the Title IV-D agency under Chapter 31, Family Code. ARTICLE 6. MISCELLANEOUS PROVISIONS SECTION 6.01. ENTITLEMENT TO FINANCIAL ASSISTANCE FROM DATE OF APPLICATION. Amends Section 31.032(b), Human Resources Code, as follows: (b) Provides that an applicant determined to be eligible for assistance is entitled to assistance beginning on the date on which the applicant applied for assistance. Makes a conforming change. SECTION 6.02. CASH WITHDRAWALS UNDER ELECTRONIC BENEFITS TRANSFER. Amends Section 31.0355(b), Human Resources Code, to authorize a recipient to make a cash withdrawal at a provider's point-of-sale terminal in a manner consistent with the provider's general policies for cash withdrawal by customers. SECTION 6.03. INCOME AND RESOURCE REQUIREMENTS APPLICABLE TO MEDICAL ASSISTANCE PROGRAM. Amends Subchapter B, Chapter 32, Human Resources Code, by adding Section 32.0242, as follows: Sec. 32.0242. INCOME AND RESOURCE REQUIREMENTS FOR CERTAIN RECIPIENTS. Requires the department, to the extent authorized by federal law, to determine whether a family meets household income and resource requirements for medical assistance under 42 U.S.C., Section 1396u-1 (Assuring Coverage for Certain Low-Income Families) in the same manner as the department makes household income and resource requirement determinations for financial assistance under Chapter 31, Human Resources Code. Provides that if the method of determining household income and resource requirements under that chapter changes, the change also applies to those requirements for purposes of determining whether a family is eligible for medical assistance described by this section. SECTION 6.04. LEASE AND SUBLEASE OF OFFICE SPACE. Amends Subchapter B, Chapter 531, Government Code, by adding Section 531.051, as follows: Sec. 531.051. LEASES AND SUBLEASES OF CERTAIN OFFICE SPACE. (a) Authorizes a health and human services agency, with the approval of the Health and Human Services Commission or TWC or any other state agency administering employment services programs, to lease or sublease office spaces to or from a private service provider that contracts with the agency to enable agency eligibility and enrollment personnel to work with the provider if certain goals would be achieved. (b) Makes Subchapters D and E (Lease of Public Grounds, Lease of Space in StateOwned Buildings to Private Tenants), Chapter 2165 (State Buildings, Grounds and Property), Government Code, inapplicable to a state agency leasing or subleasing office space to a private service provider under this section. (c) Makes Subchapter B (Procedures for Leasing Space; Lease Contract), Chapter 2167 (Lease of Space for State Agencies), Government Code, inapplicable to a state agency leasing or subleasing office space from a private service provider under this section. (d) Provides that a state agency is delegated the authority to enter into a lease or sublease under this section and authorizes the agency to negotiate the terms of the lease or sublease. (e) Authorizes a stage agency to share business resources with a private service provider entering into a lease or sublease agreement with the agency under this section to the extent authorized by federal law. SECTION 6.05. COLOCATION OF OFFICES OR FACILITIES. (a) Authorizes the attorney general's officer, in conjunction with the department, to develop and implement a plan to colocate offices or facilities located in the same geographic region to enable child support enforcement officers to work with department eligibility personnel to improve the efficiency of the child support collection process in cases involving children receiving financial assistance under Chapter 31, Human Resources Code. (b) Requires the attorney general, if developing a plan with the department under this section, to send a copy of the plan to the governor, the lieutenant governor, and the speaker of the house of representatives no later than the 60th day after the plan is completed. ARTICLE 7. WAIVERS; EFFECTIVE DATE; EMERGENCY SECTION 7.01. WAIVERS. Requires a state agency, if, before implementing any provision of this Act, it determines that a waiver or authorization from a federal agency is necessary or implementation, to request the waiver or authorization, and authorizes the agency to delay implementing that provision until the waiver or authorization is granted. SECTION 7.02. Effective date: September 1, 1999. SECTION 7.03. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3639 differs from the original as follows: The substitute replaces proposed Article I (Personal Responsibility and Sanctions) with entirely new text. For a complete analysis of the new text, please see the Section-by-Section Analysis. The deleted sections of the original are as follows: SECTION 1.01 Two-Step Sanction Process. Sec. 31.00331. Needs Assessment for Noncompliance with Certain Requirements. SECTION 1.02. Ineligibility Resulting from Certain Drug-Related Convictions. Sec. 31.0039. Ineligibility Resulting from Drug-Related Felony Convictions. SECTION 1.03. Study of Effectiveness of Sanctions and Penalties. The substitute makes no changes in proposed Article 2 (Welfare Fraud) of the original. The substitute changes Article 3 (Employment) as follows: The substitute deletes SECTION 3.01 (Child Care Services) of the original and redesignates SECTION 3.02 to SECTION 3.01 of the substitute and makes the following changes: SECTION 3.01. EARNED INCOME DISREGARDS. (a) The substitute modifies proposed Section 31.0038 (Earned Income Disregards for Employment), Human Resources Code, by adding entirely new Subsections (a) and (b), regarding the purpose of the earned income disregards benefit and the definition of "former recipient of the earned income disregards benefit." Redesignates Subsection (a) of the original to Subsection (c) of the substitute, and modifies the proposed language to prohibit the Texas Department of Human Services (department) from considering any, rather than a significant portion of any, earned income received by a recipient of financial assistance up to the first six months of employment, rather than during the first six months of employment. The substitute also adds new Subsections (d)-(f), regarding circumstances under which the department is prohibited from disregarding a recipient's earned income and other prohibitions. The substitute redesignates Subsection (b) of the original to Subsection (g), and modifies this subsection to delete the requirement that the department, in adopting rules under this section, prescribe the portion of a recipient's income that the department may not consider, and to delete the requirement that the department consider in determining the amount to be disregarded under Subsection (a) the total amount the department estimates to be available to provide financial assistance to eligible recipients. The substitute adds the requirement that the department promote the purpose described in Subsection (a). The substitute adds Section (b), which repeals Section 31.043(a), Human Resources Code, as added by Chapter 878, Acts of the 75th Legislature, Regular Session, 1997. See the analysis in this document. SECTION 3.02 POST-EMPLOYMENT ASSESSMENT. Redesignated from SECTION 3.03 of the original. The substitute amends proposed Subchapter A, Chapter 31, Human Resources Code, by modifying added Section 31.0096, as follows: Sec. 31.0096. POST-EMPLOYMENT ASSESSMENT AND SERVICES. (a) The substitute requires a local workforce development board, as appropriate, in addition to the department and the Texas Workforce Commission (TWC) to jointly develop the program under this section. (b) The substitute adds this new subsection to require the department to ensure that a recipient of financial assistance who obtains employment receives clear notification regarding medical assistance and food stamp benefits for which the recipient or recipient's family are eligible. SECTION 3.03. WORK REQUIREMENT EXEMPTIONS. Redesignated from SECTION 3.04 of the original. (a) The substitute modifies proposed amendments to Section 31.012(c), Human Resources Code, to restore language specifying that a person who is the caretaker of a physically or mentally disabled child who requires the caretaker's presence is not required to participate in a program under this section. The substitute provides that effective January 1, 2000, rather than September 1, 1999, a person, rather than a single custodial parent, is not required to participate in a program under this section until the person's, rather than parent's, youngest child at the time the person, rather than parent, first becomes eligible for assistance reaches the age of three, rather than the age of five. Further provides that effective January 1, 2001, rather than September 1, 2000, a person, rather than parent, is exempt until the person's, rather than parent's, youngest child at the time the person, rather than parent, first became eligible for assistance reaches the age of two, rather than the age of four. The substitute further provides that effective January 1, 2002, rather than September 1, 2001, a person, rather than parent, is exempt until the person's, rather than parent's, youngest child at the time the person, rather than parent, first became eligible for assistance reaches the age of one. The substitute further authorizes only one parent to claim an exemption described by this section in a two-parent family and makes conforming changes. The substitute deletes proposed Subsection (f) (definition of "custodial parent"). (b) The substitute adds this new section, relating to certain information the department must provide to clients whose exemption status is affected by pending changes related to the implementation of this section. (c) The substitute adds this new section, which relates to the requirement that a waiver or authorization be obtained prior to implementing this section. Sections (d) and (e) of the substitute are redesignated from Sections (c) and (d) of the original. SECTION 3.04. BONUS PROGRAM FOR LOCAL WORKFORCE DEVELOPMENT BOARDS. The substitute adds this new section, which amends Subchapter A, Chapter 31, Human Resources Code, by adding new Section 31.013 (Performance-Based Bonus Program for Local Workforce Development Boards). See analysis in this document. SECTION 3.05 (Child-Care Study for Persons Losing Work Requirement Exemptions) and SECTION 3.06 (Self-Sufficiency Fund) of the original are deleted from the substitute. SECTION 3.06 of the original added Chapter 309, Human Resources Code. The following proposed sections were deleted: Sec. 309.001. Definitions. Sec. 309.002. Self-Sufficiency Fund. Sec. 309.003. Job-Training Programs. Sec. 309.004. Rulemaking Authority. The substitute makes changes in proposed Article 4 (Support Services) as follows: SECTION 4.01. PERSONAL NEEDS ASSESSMENT. (c) The substitute modifies proposed changes to Subchapter A, Chapter 31, Human Resources Code, as follows: Sec. 31.011. PERSONAL AND FAMILIAL NEEDS ASSESSMENT AND SUPPORT SERVICES. (a) The substitute requires the department, in cooperation with TWC or a local workforce development board, as appropriate, to assist a recipient of financial assistance in assessing the skills and needs of a recipient. (b) The substitute expands the list of programs and services set forth in the original that a recipient and recipient's family may be referred to under this section. SECTION 4.02 (Nutrition Assistance Education and Outreach) of the substitute replaces SECTION 4.02 (Housing Assistance) of the original. Please see the Section-by-Section Analysis in this document for the new text set forth in this section. SECTION 4.03 (Local Transportation Services) of the original is also deleted in the substitute. The deleted proposed sections of the original are as follows: SECTION 4.02: Sec. 31.015. Housing Assistance. SECTION 4.03: Sec. 31.016. Grants for Transportation Services. The substitute modifies Article 5 (Child Support) of the original as follows: SECTION 5.01. INCENTIVE PROGRAM. The substitute modifies Section 31.0315, Human Resources Code, of the original, by making changes to proposed Subsection (g): (g) Authorizes, rather than requires, the department, in cooperation with the Title IV-D agency, to, by rule, develop an incentive program designed to cooperate with the requirements of this provision, subject to the availability of funds appropriated for that purpose. The substitute also expands the incentives set forth in this subsection. SECTION 5.02 (Obligor Employment Assistance) of the original is redesignated to SECTION 5.03. New SECTION 5.02 (Disregard of Child Support) amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.0041 (Child Support Distribution). Please see the Section-bySection Analysis in this document concerning the next text. SECTION 5.03. OBLIGOR EMPLOYMENT ASSISTANCE. Redesignated from SECTION 5.02 of the original. Makes no change. SECTION 5.03 (Distribution of Child Support Payments) of the original is deleted, as well as the following proposed sections: Sec. 231.118. Distribution of Certain Child Support Payments. Sec. 31.0041. Child Support Distribution. Article 6 (Legislative Oversight) of the original is also deleted from the substitute. This article set forth the following proposed sections and titles: SECTION 6.01. Legislative Oversight. Sec. 31.081. Definition. Sec. 31.082. Composition of Committee; Presiding Officer. Sec. 31.083. Committee Powers and Duties. Sec. 31.084. Report. Article 6 (Miscellaneous Provisions) of the substitute is redesignated from Article 7 of the original, and makes the following changes: The substitute deletes SECTION 7.01 (Determination of Amount of Financial Assistance) of the original and redesignates SECTION 7.02 (Entitlement to Financial Assistance from Date of Application) to SECTION 6.01 of the substitute. The substitute makes no changes in this section. SECTION 7.03 (Income and Resource Requirements for Certain Recipients) and SECTION 7.04 (Automatic Review of Children's Eligibility for Medical Assistance) of the original are deleted. These proposed sections set forth the following sections and titles: SECTION 7.03: Sec. 32.0242. Income and Resource Requirements for Certain Recipients. SECTION 7.04: Sec. 32.0251. Eligibility Review for Certain Children. SECTION 6.02 (Cash Withdrawals Under Electronic Benefits Transfer) and SECTION 6.03 (Income and Resource Requirements Applicable to Medical Assistance Program) of the substitute set forth new text. Please see the analysis in this document. SECTIONS 6.04 and 6.05 of the substitute are redesignated from SECTIONS 7.05 and 7.06 of the original. Article 7 (Waivers; Effective Date; Emergency) of the substitute is redesignated from Article 8 of the original.