LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7129 NOTE PREPARED: Jan 8, 2025
BILL NUMBER: HB 1395 BILL AMENDED:
SUBJECT: Drug Testing Requirement for TANF Eligibility.
FIRST AUTHOR: Rep. Davis BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
DEDICATED
XFEDERAL
Summary of Legislation: Routine, Random Drug Tests: The bill provides that as a condition of receiving
Temporary Assistance for Needy Families (TANF), an individual who is at least 18 years of age must submit
to and pass: (1) a drug test at the time the individual applies to receive TANF; and (2) routine, randomly
scheduled drug tests while the individual is receiving TANF (required drug tests). The bill provides that the
testing requirement does not apply to an individual who receives TANF benefits on behalf of a child and does
not receive TANF benefits on the individual's own behalf.
Failed Drug Test: The bill provides that an individual who fails a required drug test is ineligible to receive
TANF benefits until the individual: (1) provides to FSSA evidence that the individual is participating in, or
on a waiting list to participate in, a drug abuse treatment program; and (2) passes two consecutive drug tests.
It also provides for appointment of a representative payee to receive TANF on behalf of a child if the
individual who would otherwise receive TANF on behalf of the child is ineligible for TANF as a result of
failing a required drug test. The bill provides that if an individual fails a required drug test, FSSA shall
withhold the amount of the cost of: (1) the drug test; and (2) any subsequent required drug test; from future
TANF benefits the individual receives.
Notifications and Appeals: The bill requires FSSA to provide to: (1) the Indiana Housing and Community
Development Authority; and (2) any division of FSSA that implements the Supplemental Nutrition
Assistance Program; the name of an individual who fails a required drug test. It provides that FSSA's records
concerning the results of an individual's required drug test may not be admitted against the individual in a
criminal proceeding. The bill also provides for administrative remedies and an appeals process with regard
to the drug testing requirement.
County Offices: This bill requires county offices of the Office of the Secretary of Family and Social Services
(FSSA) to inform TANF applicants of the drug testing requirement. It requires a county office of FSSA to
provide a list of drug abuse treatment programs to an individual who fails a required drug test. Specifies
requirements for a facility that administers a required drug test.
Data Collection: The bill requires FSSA to collect data to assess and prevent discrimination based on race,
HB 1395 1 ethnicity, or sex with regard to the administration of the drug testing requirement.
Definitions: It consolidates overlapping definitions of "TANF" and "TANF program".
Effective Date: July 1, 2025.
Explanation of State Expenditures: The bill will increase state spending for monthly testing of TANF adult
recipients between $388,500 and $2 M per year. Expenditures will be minimally offset by ineligible
recipients paying for the testing from future benefits.
In addition, FSSA could experience an increased workload to designate a representative payee for a child
or route payments on behalf of a child to a representative payee. FSSA will collect and report data, and report
failed drug test results to other programs. FSSA local offices will need to provide additional information to
individuals with failed drug tests. The Office of Administrative Law Proceedings will have increased
workload to hear appeals concerning drug tests. Whether the increased workload requires additional
resources will depend on the number of failed tests.
Additional Information - The estimated cost is based on 2,158 recipients having monthly drug tests at a cost
between $15 and $80 per test. The test cost is based on similar drug testing for county probation units. The
estimated monthly number of adults to be tested is based on the percentage of adults receiving benefits. The
bill requires testing between 20 to 30 days from the previous test related to receipt of TANF benefits.
Explanation of State Revenues:
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Family and Social Services Administration; Office of Administrative Law
Proceedings.
Local Agencies Affected:
Information Sources:
https://www.acf.hhs.gov/ofa/data/characteristics-and-financial-circumstances-tanf-recipients-fiscal-year-
2023, Table 14.
Fiscal Analyst: Karen Rossen, 317-234-2106; Corrin Harvey, 317-234-9438.
HB 1395 2