The Texas Workforce Commission (Commission) adopts the emergency repeal of Chapter 811. Choices, Subchapter A. General Provisions, §§811.1-811.3, Subchapter B. Access to Choices Services, §§811.11-811.14, Subchapter C. Choices Services, §§811.21-811.30, Subchapter D. Choices Work Activities, §§811.41-811.52, Subchapter E. Support Services and Other Initiatives, §§811.61-811.67, and Subchapter F. Appeals, §§811.71-811.73, and new rules for Chapter 811 Choices, Subchapter A. General Provisions, §§811.1-811.3, Subchapter B. Choices Services Responsibilities, §§811.11-811.16, Subchapter C. Choices Services, §§811.21-811.32, Subchapter D. Choices Work Activities, §§811.41-811.52, Subchapter E. Support Services and Other Initiatives, §§811.61-811.67, and Subchapter F. Appeals, §§811.71-811.73. These rules are adopted concurrent with the proposal of rules for public comment and appear in this issue of the Texas Register .

Purpose. The purpose of these rules is to implement House Bill 2292 enacted by the 78th Legislature, Regular Session, 2003, (HB 2292), which amends, in pertinent parts, Chapter 31, Texas Human Resources Code to incorporate the pay for performance model relating to Temporary Assistance for Needy Families (TANF) cash assistance and Medicaid assistance for the adult(s).

Background: Consistent with federal statutory authority, Chapter 31, Human Resources Code requires that individuals must engage in work activities in order to receive TANF cash assistance and Medicaid assistance for the adult(s) unless exempt from the work activities. The Commission is responsible for the employment and training requirements contained in Chapter 31 through the local workforce development boards (Boards) under Section 302.021(a)(5), Labor Code.

Testimony and legislative debate on HB 2292 centered in part on reinforcing the personal responsibility requirements relating to TANF cash assistance and Medicaid assistance for the adult(s) and to ensure that no state or federal funds are used to pay for assistance to individuals that fail to cooperate. This ensures that families are cooperating in order to receive their cash assistance and supports the principle that the state should not support families who consistently refuse to cooperate.

HB 2292 also strengthened the linkages among the human services agencies by consolidating the twelve existing agencies within five agencies. The Health and Human Services Commission (HHSC), one of the five agencies, will oversee the operations of the remaining four agencies as well as the development of policies and rules. An oversight role of HHSC is to ensure that human services agencies are linking with the Commission to ensure that work opportunities for individuals are maximized and to ensure that individuals are cooperating with their mandatory work requirements. Such linkage ensures that opportunities are maximized to assist recipients obtaining and retaining employment through engaging in work activities where applicable.

The Commission has determined, consistent with the authority granted to states under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), that the definition of work activities includes cooperation with the Responsibility Agreement and the family employment plan. The specific statutory authority rests in 45 USCA Section 607 and is further clarified in the federal regulations interpreting those requirements, which state in part the following: 45 CFR Sections 261.10, relating to what work requirements must an individual meet, 64 Fed. Reg. 17767, (April 12, 1999) states that "the State defines the work activities that meet the [work] requirement." Likewise, the preamble at the same page also states that "[as] stated above, it is the State's prerogative and responsibility to define the activities it considers to meet these requirements...." Specifically, 45 CFR Section 261.12 (b) states that the individual responsibility plan "...should describe the obligations of the individual. These could include going to school, maintaining certain grades, keeping school-aged children in school, immunizing children, going to classes, or doing other things that will help the individual become or remain employed in the private sector." Based on this language and the principle of personal responsibility, the Commission has added a definition of "work activity" to clearly communicate the inclusion of the requirements specified in the Responsibility Agreement.

The current Responsibility Agreement used by the State of Texas requires the following:

*Participation in mandatory work activities;

*Cooperation with child support enforcement efforts to establish paternity and obtain child support;

*Remaining employed and not quitting a job without good cause;

*Maintenance of children's health and dental checkups;

*Maintenance of children's immunizations;

*School attendance, as required;

*Attendance at parenting skills training, when required;

*Abstention from using, possessing, or selling controlled substances;

*Abstention from alcohol abuse; and,

*Truthful representation of the recipient's situation.

Under the pay for performance model, the Legislature requires that a TANF family that does not cooperate with their required work activities will be sanctioned, resulting in the termination of the total amount of TANF cash assistance provided to the family. In addition, the Medicaid assistance for the adult(s) will be denied, unless the adult is under 19 years of age or pregnant.

The sanction period will last a minimum of one month, or until cooperation is demonstrated. If the sanction results from noncooperation with Choices, one month of demonstrated cooperation is required to reinstate receipt of the family's TANF cash assistance.

The Texas Department of Human Services (TDHS) will not reinstate the family's TANF cash assistance until the Texas Workforce Center sends a notification to the local TDHS office indicating that the Choices service requirements are met. Furthermore, if a TANF recipient fails to cooperate for two consecutive months, the family's TANF case will be closed, and the family will be required to reapply for TANF cash assistance. Before certification, the conditional applicant will be required to attend a Workforce Orientation for Applicants (WOA) and to demonstrate one month of cooperation with Choices service requirements. TDHS will not process the family's TANF application until the Texas Workforce Center sends a notification to the local TDHS office indicating that the Choices service requirements were met.

The Commission's intent is to ensure that failure to cooperate is not a result of circumstances that would have prevented Choices participation. Therefore, the Commission will continue to stress the importance of contacting individuals to determine whether a good cause reason for nonparticipation exists.

During the one-month period of demonstrated cooperation, support services will be available as needed. For that reason and consistent with new §31.0032, Human Resources Code as amended by HB 2292, §809.102 relating to Choices Child Care is changed to include that children of sanctioned families and conditional applicants that must demonstrate cooperation prior to the reinstatement of their TANF cash assistance are eligible to receive Choices Child Care.

These changes further align the receipt of cash assistance with employment, similar to the world of work, because employers pay their employees only after working for a specific period of time.

Timely Implementation. First, HB 2292 requires that the TDHS immediately apply a sanction terminating TANF cash assistance to or for a person or the person's family if TDHS or the Title IV-D agency determines that a person is not cooperating with the requirements of the Responsibility Agreement. Likewise, the law provides that the HHSC or any health and human services agency may deny Medicaid assistance effective September 1, 2003 for a person who is eligible for financial assistance, but fails to cooperate with the Responsibility Agreement unless specifically exempted. To effectuate the new law, the Commission's rule changes are required to be in place September 1, 2003.

Effective September 1, 2003, the Boards must notify TDHS of the demonstrated cooperation with Choices services requirements by sanctioned recipients and conditional applicants. Currently, as of July 2003, over 26,000 sanctioned families may be impacted as of September 1, 2003 if they fail to perform. The Boards are also required to develop policies and procedures to ensure that each Texas Workforce Center is prepared to respond to the sanctioned families' and conditional applicants' critical need to demonstrate cooperation with Choices services requirements. The Boards are required to ensure that the Texas Workforce Centers timely notify TDHS of the demonstrated cooperation to ensure that TANF cash assistance and the Medicaid assistance for the adult(s) are issued. If Boards fail to implement such policies, those families cooperating would be in danger of losing TANF cash assistance and the adults' Medicaid assistance. If Boards do not ensure that Texas Workforce Centers have processes in place that allow TANF families to demonstrate cooperation, the continued loss of eligibility for the family's TANF cash assistance and the adults' Medicaid assistance will create an imminent peril to the public health and welfare of the family. The lack of timely policies will impact the families' receipt of cash and medical assistance, which are designed to meet the families' basic needs and health care needs of the adults in the families. Consequently, an emergency rule is necessary to implement the law by the September 1, 2003 effective date.

Second, the law requires that full family sanctions begin on September 1, 2003. The Commission's rule development was dependent upon coordination with the TDHS regarding implementation of the requirements of the new law by September 1, 2003. Due to the required coordination with the TDHS, the Commission's earliest opportunity to take timely action to approve the proposal of rules is August 5, 2003. Due to the posting schedule of the Texas Register , the proposal would be published on August 22, 2003. Accounting for the required thirty-day posting period, the earliest effective date would be September 22, 2003. Because the law requires that sanctions be immediately applied beginning September 1, 2003, an emergency rulemaking is necessary to meet that statutory deadline.

The importance of implementing the bill is expressly intended by the Legislature, effective September 1, 2003, and is paramount to ensuring the effective use of resources for families willing to cooperate with TANF work requirements.

For those reasons, the Commission finds that under Government Code §2001.034, these emergency rules must be adopted on fewer than thirty days of notice. The emergency rules become effective September 1, 2003. Concurrent with the adoption of the emergency rules, the Commission is publishing the proposal of the permanent changes to the rules to provide the public with a thirty-day opportunity to comment and will adopt those rules after considering public comment as soon as feasible following the comment period. The permanent rules will replace the emergency rules.

Although the rules are repealed in full and adopted as new, many of the provisions of the current rules are retained. For a copy of a comparison document of the existing rules with the emergency rules, please see the Commission web page at http://www.twc.state.tx.us/twcinfo/rules/prorules.html. To provide clarity to the rules, throughout the rules, technical modifications are made to update references to "recipients." This is done in conjunction with changes to the Choices definitions to clarify that sanctioned families and conditional applicants are considered mandatory individuals. Following is a more detailed explanation of the rule changes.

Section 811.2 sets forth the definitions relating to Choices services. The following terms are added: "conditional applicant," "mandatory individual," "mandatory recipient," and "sanctioned family." The terms individual, applicant, recipient, and former recipient were reviewed for appropriateness and, if necessary, modified to describe the applicable populations.

The Commission clarifies that a sanctioned family who must demonstrate one month of cooperation in the program month following the family's initial Choices noncooperation may or may not be receiving TANF cash assistance. Due to the TDHS automation schedule, penalties that are received after the TDHS "cut-off" date will not be effective in the following month. For example, in September, the TDHS cut-off date is September 17. If a recipient noncooperates in September and Workforce Center staff submit a penalty request on September 17, the effective date of the full-family sanction will be in November. However, the recipient must demonstrate cooperation throughout the month of October, which is the first program month after the month of noncooperation. During the month of October, the sanctioned family will still be receiving TANF cash assistance, and is considered mandatory; therefore, the sanctioned family will be in the Board's denominator for this month.

The term "work activity" is also added. Because of the fundamental barriers addressed in the Responsibility Agreement, the Commission has determined that inherent to the definition of work are the concepts included in the Responsibility Agreement which support a recipient's continued job readiness. Without cooperation with the Responsibility Agreement, the individual would be hindered in his or her ability to work or retain employment.

Section 811.3 sets forth Choices Service Strategies. The terms applicant, recipient, and former recipient were reviewed for appropriateness and, if necessary, modified to describe the applicable populations.

Section 811.11 sets forth Board Responsibilities. The terms applicant and recipient were reviewed for appropriateness and, if necessary, modified to describe the applicable populations. The rules also require conditional applicants, who must demonstrate one month of cooperation with Choices and attend a WOA, to be enrolled immediately in Choices services.

Section 811.12 sets forth Applicant Responsibilities. The term applicant was reviewed for appropriateness and modified, if necessary, to describe the applicable populations. The rule clarifies that conditional applicants must attend a WOA.

Section 811.13 sets forth Responsibilities of Mandatory Individuals. The terms individual and recipient were reviewed for appropriateness and, if necessary, modified to describe the applicable populations.

Section 811.14 sets forth issues regarding Noncooperation. The provisions contain the same language set forth in §811.11, with the following changes. Timely and reasonable attempts must be made to contact recipients, sanctioned families, and conditional applicants to determine their reasons for noncooperation. If good cause is not determined, these individuals must be notified of their right to appeal. Additionally, recipients who were not in sanction status must be notified of the required procedures to demonstrate one month of cooperation prior to the reinstatement of their family's TANF cash assistance.

Section 811.15 sets forth issues regarding Demonstrated Cooperation. This section sets forth the requirements for sanctioned families and conditional applicants to demonstrate one month of cooperation prior to reinstating their family's TANF cash assistance.

Section 811.16 sets forth Good Cause for Mandatory Individuals. The term recipient was reviewed for appropriateness and, if necessary, modified to describe the applicable populations. Families who must demonstrate one month of cooperation may receive good cause. If good cause is granted, TDHS shall be notified that the family demonstrated cooperation, and the family's TANF cash assistance may be reinstated.

Section 811.21 sets forth General Provisions for Choices services. This section adds language to address the impact of the Fair Labor Standards Act on sanctioned families and conditional applicants who are not receiving TANF cash assistance, and who may be participating in an unpaid work activity. The allowable number of hours in such activities will be based on the household's food stamp allotment divided by the minimum wage.

Section 811.22 sets forth Assessment provisions. The term recipient was reviewed for appropriateness and, if necessary, modified to describe the applicable populations.

Section 811.23 sets forth provisions regarding the Family Employment Plan. The term recipient was reviewed for appropriateness and, if necessary, modified to describe the applicable populations. In addition, new language is added to incorporate the requirements of the Responsibility Agreement in the Family Employment Plan. Adults in TANF families have the responsibility to ensure the health and welfare of their children. This has a direct impact on their ability to obtain and retain employment.

In sections 811.24-811.30 the term recipient was reviewed for appropriateness and, if necessary, modified to describe the applicable populations. Sanctioned families are not subject to the four/six week job search limitation during the month in which they are not receiving TANF cash assistance. The four/six week limitation is only applicable to families who are receiving a TANF cash assistance.

Sections 811.31 and 811.32 set forth Special Provisions regarding Conditional Applicants and Sanctioned Families to require that any job search activities be staff assisted.

Section 811.41 regarding Job Search and Job Readiness Assistance includes a new description of staff-assisted services.

In §§811.45-811.50 the term recipient was reviewed for appropriateness and, if necessary, modified to describe the applicable populations.

Section 811.51 regarding Post-Employment Services was reviewed. The terms recipient and former recipient were modified, if necessary, to describe the applicable populations.

Section 811.61 sets forth Support Services issues. The new language clarifies that any support service classified as cash assistance may only be provided for four months or less to an unemployed individual who is not already receiving cash assistance. This section also contains language to clarify that conditional applicants and sanctioned families may receive necessary support services in order to demonstrate one month of cooperation.

Section 811.63(b) was removed because it applies to all support services, which is now located under §811.63.

Under federal regulations, support services designed to meet a basic need, such as transportation, are classified as cash assistance when provided to an unemployed TANF recipient. The federal regulations do provide for an exception if such services are designed to be short term. Therefore, the rules clarify that these support services are classified as a short-term nonrecurrent benefit-that is, they are designed to last for less than four months and, therefore, are exempt from the federal definition of cash assistance.

For information about the Commission please visit our web page at www.twc.state.tx.us.

Subchapter A. GENERAL PROVISIONS