FISCAL NOTE

Date Requested: February 09, 2017
Time Requested: 07:48 AM
Agency: Health and Human Resources, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
1106 Introduced SB60
CBD Subject: Human Services


FUND(S):

0403 - DIV OF HUMAN SERVICES GENERAL ADMINISTRATION FUND, 8722 - CONS FEDERAL FUNDS DIV HUMAN SERVICES GEN ADMN FD

Sources of Revenue:

General Fund,Other Fund Federal

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The purpose of this bill is to provide for eligibility and fraud requirements for public assistance; defining terms; requiring the Department of Health and Human Resources to implement work requirements for applicants for the Supplemental Nutrition Assistance Program (SNAP); requiring discontinuance of a federal waiver; setting forth what meets work requirements; setting out exceptions to work requirements; providing for a good cause exception; allowing for a federal waiver to meet the requirements of this section; providing for rulemaking for suspension of benefits for noncompliance; providing for an asset test for SNAP benefits; requiring accessing information of various federal, state and miscellaneous sources; prohibiting payment of SNAP benefits in specified instances; requiring cooperation with the Bureau of Child Support Enforcement; requiring a design or establishment of a computerized income, asset and identity verification system for Temporary Assistance to Needy Families (TANF); allowing for contracting with a third-party vendor; setting out required contract terms; requiring accessing information of various federal, state and miscellaneous sources for TANF; requiring identity authentication as a condition to receiving public assistance; requiring a semi-annual case review of all public assistance cases; setting forth notice requirements and the right to a hearing; requiring referrals for fraud, misrepresentation and inadequate documentation; requiring report to the Governor and Legislature; setting forth prohibitions on the use of an electronic benefit transfer card; tracking out- of-state spending of SNAP and TANF benefits and providing for rulemaking.
    Total Department estimates the cost related to this legislation to be $8,080,602 (approximately $5.6M federal and $2.4M state) the first year and $6,570,602 (approximately $4.5M federal and $2.0M state) each subsequent year to cover staff as well as asset verification system. This cost is projected to be offset somewhat in future years due to savings resulting from the asset verification system (net savings of $2.5M with approx. $2.1M Federal and $400K state). These savings are indicated in the estimates section below as well as reflected in the full implementation year column of the graph.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 8,080,602 -2,520,307
Personal Services 0 1,477,978 1,477,978
Current Expenses 0 6,602,624 -3,998,285
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    Total estimated cost for the first year includes salaries and fringes for an additional 40 Economic Service Workers needed to meet requirements of the bill @ $36,949 x 40 workers ($1,477,978). The need for these workers is the additional case load brought on by the required SNAP E&T training for the able bodies adults without dependents (ABAWD). Additionally, this addition of less than 1 Economic Service Worker per expanded county is also necessary to fulfill the bill’s requirement of semi-annual case reviews for all applicants. Federal Regulations require all ABAWDS denied benefits to be referred to Education and Training. This caseload would be absorbed by additional ESW or higher grant payments to the workforce investment board.
    Current expenses includes travel calculated @ 500 miles per employee times travel rate of 53.5 cents times 40 workers ($10,700), document imaging @$400 times 40 workers ($16,000), mailing costs ($147,924), computer costs @$1,000 times 40 workers ($40,000), office furniture costs @$500 times 40 workers ($20,000) and various other costs @$1,000 times 40 workers ($40,000), participant reimbursement ($60,000), and fees for new phone system (phone, equipment and supplies $7,500) and (phone service setup fee $2,500). In subsequent years the costs for furniture, computers, system upgrades and phone system costs will be reduced.
    These positions will be housed at current field offices, therefore no additional rent is added.
    The Department would be required to obtain a new vendor for the data exchanges. This cost is estimated to be $6,258,000 for the implementation year and $4,858,000 each subsequent year. The actual cost is based upon the number of transactions processed, therefore changing the verification to annual versus semi-annual would reduce this amount by half.
    Previous estimates of cost savings related to asset verification for Aged, Blind, Disabled individuals for Medicaid were projected to be $9,090,909 ($2.4M state, $6.6M federal based on FY2018 FMAP).
    



Memorandum


    The Department currently maintains a computerized system that meets many of the provisions set forth in the bill. The current RAPIDS system utilizes multiple data exchanges to verify earned and unearned income, social security numbers, fleeing felons, vital statistics, and citizenship for various different programs available through the Department. The current system alerts workers to discrepancies and allows for notices, investigations, and corrective actions when deemed necessary.
    The requirements to track out-of-state ebt card spending, case reviews and reporting to Governor and Legislature will add additional costs. However, these costs cannot be quantified at this date.
    Currently our federal partners of several of our programs (i.e. Medicaid, TANF, and SNAP) require and/or limit the information sources from which we gather and verify information. Each program has its own policies and requirements. This bill proposes that we verify the laundry list of information from all data bases. This is potentially in violation of the programs federal regulations.
    The Department would be required to obtain a new vendor for the data exchanges. The actual cost would be based on the number of transactions.
    In relation to ebt card spending, currently certain codes identify types of providers. If this would need updated to provide for added types, additional programming costs would be required. To implement restrictions for certain establishments would require negotiation between an entity and ATM/POS vendors they may be utilizing. Cash assistance benefits can be accessed through ATM or cash back at purchase, therefore placing restrictions on specific items causes additional cost to Department, retailers, clients, but does not limit the use of the funds.
    As currently written there are no ramifications for retailers failing to comply with law.
    



    Person submitting Fiscal Note: Bill J. Crouch
    Email Address: dhhrbudgetoffice@wv.gov