HBA-MSH, RKM H.B. 165 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 165 By: Keffer Human Services 3/19/2001 Introduced BACKGROUND AND PURPOSE The purpose of the temporary assistance to needy families program (TANF) is to provide financial and medical assistance to needy dependent children and the parents or relatives with whom they are living. Recent efforts aimed at improving the program have focused on ensuring a timely transition off of public assistance into employment. Current law provides that income earned for the first four months of employment while receiving TANF benefits is disregarded in computations of financial need, therefore benefits are not immediately terminated when a person begins employment. A longer disregard period will provide an incentive to work by easing the transition into employment and helping prevent recipients from falling back into poverty. House Bill 165 increases the earned income disregard to six months and provides for increased enforcement and penalties for individuals who violate TANF rules. 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 in SECTION 1 (Sec. 31.0031, Human Resources Code) and SECTION 6 (Sec. 31.0038, Human Resources Code) of this bill. ANALYSIS House Bill 165 amends the Human Resources Code to require the Texas Department of Human Services (DHS) to adopt rules governing sanctions and penalties to or for the family of a person who fails to participate in a work activity (activity) as required by the responsibility agreement for Temporary Assistance for Needy Families. The bill requires the department to impose sanctions and penalties for a person who without good cause for noncompliance as determined by hearing fails or refuses to comply with the activity requirement as follows: _On a person's first failure or refusal to comply, the amount of financial assistance provided to or for each adult family member who is not in compliance is to be reduced for a period of one month or until each adult family member complies, whichever is later. If each adult family member has not complied after three months, the total amount of financial assistance provided to or for the person and the person's family is to be terminated. The bill authorizes a family to reapply for financial assistance one month after the date on which the family's assistance is terminated. _On a person's second failure or refusal to comply, the amount of financial assistance provided to or for each adult family member who is not in compliance is to be reduced for a period of two months or until each adult family member complies, whichever is later. If each adult family member has not complied after three months, the total amount of financial assistance provided to or for the person and the person's family is to be terminated. The bill authorizes a family to reapply for financial assistance two months after the date on which the family's assistance is terminated. _On a person's third or subsequent failure or refusal to comply, the total amount of financial assistance provided to or for the person and the person's family is to be terminated. The bill authorizes a family to reapply for financial assistance six months after the date on which the family's assistance is terminated. The bill requires the department, the Texas Workforce Commission (TWC), or a local workforce development board to conduct a case review not later than the fifth day after the date on which the department reduces the amount of financial assistance provided to determine the reasons for the person's noncompliance and identify and remove any barriers or other factors that contributed to the person's noncompliance. Based on the case review, the bill requires the department, TWC, or local workforce development board to refer the person and the person's family to appropriate preventive and support services provided by local community based organizations, including faith-based organizations. The bill also requires the department to provide preventive and support services if a community-based organization is not available to provide those services. If an adult recipient of financial assistance becomes employed while receiving the assistance, the bill prohibits the department from considering a significant portion of any earned income received by the recipient during the first six months of employment. In adopting rules, the bill requires the department to prescribe the portion of a recipient's income, not to exceed 90 percent, that the department may not consider and ensure that earned income disregards apply only to recipients whose earned income does not exceed the maximum gross income limit set by the department. Additionally, the bill requires the department to consider the total amount the department estimates to be available to provide financial assistance to eligible recipients in determining the amount of earned income to be disregarded. EFFECTIVE DATE September 1, 2001.