HBA-MSH, SEP C.S.H.B. 43 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 43 By: McClendon Human Services 4/24/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE The Temporary Assistance for Needy Families (TANF) program is designed to provide temporary cash assistance to poor single and two-parent families with children as well as support services to transition recipients into the workplace. TANF grants are based upon need and families that receive these grants may also receive food stamps and Medicaid. Currently, certain recipients of TANF benefits receive an earned income disregard for employment. The purpose of an earned income disregard is to allow the families to transition gradually off cash assistance after they have become employed. Presently, the time limit for earned income disregard is 4 months, after which assistance is terminated. A longer time limit will ease the transition into the workplace and toward self-sufficiency. C.S.H.B. 43 extends to six months the time limit for earned income disregard for TANF program recipients. 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 (Section 31.0038, Human Resources Code) of this bill. ANALYSIS C.S.H.B. 43 amends the Human Resources Code to provide that if a recipient of financial aid becomes employed while receiving assistance, the Texas Department of Human Services (DHS) may not consider, for up to the first six months in which income from employment is received, 90 percent of any earned income received by the recipient for the purposes of determining either: _the amount of financial assistance granted to an individual for the support of dependent children; or _whether the family meets income and resource requirements for financial assistance. DHS is prohibited from disregarding the earned income of a recipient who voluntarily and without good cause left a position of employment while receiving financial assistance or during a specific period, to be determined by DHS rule, that immediately precedes the date on which the recipient obtained new employment. DHS is also prohibited from disregarding 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. The bill also prohibits DHS from exempting the recipient from participating in a work or employment activity during the period the earned income of a recipient is disregarded. The bill requires DHS to ensure that adopted rules assist a person in making a successful transition from the receipt of financial assistance to employment and self sufficiency and apply only to recipients who have income in an amount that does not exceed the maximum gross limit set by DHS. This bill also repeals law authorizing fill-the-gap budgeting, a system of budgeting in which benefits are gradually lowered using a percentage of the difference between the standard of need and the countable income to calculate the Temporary Assistance for Needy Families grant benefit. EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 43 modifies the original by prohibiting the Texas Department of Human Services (DHS) from considering 90 percent rather than any earned income in excess of $120 for the purposes of determining the amount of or eligibility for financial assistance.