LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session May 9, 1995 TO: Honorable Judith Zaffirini, Chair IN RE: House Bill No. 865, Committee on Health & Human Services as engrossed Senate By: Maxey, et al. Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 865 (Relating to an increase in federal funding for mental health services for children and families.) this office has determined the following: The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. The bill would require the Department of Mental Health and Mental Retardation (MHMR) to enter into an interagency agreement with the Department of Human Services (DHS) to establish federal funding reimbursement for mental health services for certain Texas families. The bill would require the interagency agreement to amend the eligibility requirements of the Title IVA- Emergency Assistance plan to include mental health emergencies. The agreement would prescribe the procedures the agencies would use to delegate to MHMR and to local mental health and mental retardation authorities the administration of mental health emergency assistance. The bill would require under the interagency agreement that MHMR certify to DHS the nonfederal expenditures for which the state would claim federal reimbursement. DHS would retain responsibility for making final eligibility decisions. The bill would require MHMR to allocate to local mental health and mental retardation authorities 66 percent of the federal funds received. The interagency agreement is needed because DHS is designated as the single state agency for Title IVA-Emergency Assistance funds and state plan. The fiscal estimate assumes that federal funding for emergency assistance under Title IVA of the Social Security Act could be used to fund mental health services. This federal funding source requires that defined emergencies provide assistance to youth and their families. The federal reimbursement rate is 50 percent of the cost of maintenance, services and administration. When the eligibility requirements are written, it is expected that the State will receive additional revenues from Federal Funds. However, there may be some costs that cannot currently be identified related to the costs of services provided after the one-time assistance for emergency services are provided. These additional costs are unknown at this time. Additionally, the Title IV-A program is under review by the Congress. Current versions of legislation have this program becoming a Block Grant program with reduced appropriations. The enactment of such legislation would seriously affect the additional federal fund revenues mentioned above and the savings to the State shown below. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Savings Year from General Revenue Fund 001 1996 $1,095,000 1997 2,191,000 1998 2,191,000 1999 2,191,000 2000 2,191,000 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. The fiscal implication to units of local government cannot be determined. Source: Department of Human Services, Texas Department of Mental Health and Mental Retardation LBB Staff: JK, GT, DF