LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
February 27, 1995
TO: Honorable Kim Brimer IN RE: House BillNo. 1089,
Committee on Business & Industry as amended
House of Representatives By: Brimer, Counts,
Austin, Texas Junell
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
1089 (relating to the continuation and functions of the Texas
Workers' Compensation Commission; providing penalties) 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 Texas Workers' Compensation Commission is subject to the
provisions of the Texas Sunset Act, and unless continued in
existence by the Legislature, will be abolished effective
September 1, 1995.
The amount set forth for the administration of this agency in the
General Appropriations Act, as introduced, (FY 96 = $ 41,861,126;
FY 97 = $ 41,902,297) would be contingent upon passage of HB 1089
or similar legislation. The appropriations would be financed
from the General Revenue Fund, General Revenue Fund -
Consolidated, Federal Funds, Appropriated Receipts, Interagency
Contracts, and Earned Federal Funds and would provide for
approximately 1,266 employees.
The bill would continue the Texas Workers' Compensation
Commission and make several changes to the enabling statute. The
most significant change includes authorizing the risk management
division to review and approve state agency risk management
plans, requiring state agencies to implement and maintain health
and safety programs and return-to-work programs, and defining
individual state agencies as employers for workers' compensation
purposes. The annual savings to the state is estimated to be
$2,970,000 in fiscal year 1996 and $5,940,000 in fiscal year
1997.
The bill would have an impact on special and local funds. These
funds are non-general revenue funds and may include federal funds
controlled by certain agencies or local funds controlled by
universities. State agencies are responsible for identifying
workers' compensation claims paid to employees whose salaries are
funded from these funds and subsequently reimbursing the General
Revenue Fund for that amount. Assuming 12 percent of the total
workers' compensation claims are paid by special and local funds,
it is anticipated that the savings to local and special funds
would be approximately $405,000 in FY 1996 and $810,000 annually
beginning in FY 1997.
The bill would require employers to file a report of injury with
insurance carriers and would require insurance carriers to
electronically file a report of injury with TWCC. This provision
would reduce the number of personnel required for data entry and
would reduce the cost of storing these forms. The annual savings
to the state is estimated to be $122,705.
The bill would strengthen the requirements for persons to serve
as agency ombudsmen. Because of expected turnover, lost
productivity, and additional travel expenses associated with
these new requirements, the annual cost to the state is estimated
to be $77,780.
The bill would also require the TWCC to monitor and evaluate the
performance of doctors in the system and take enforcement action
against doctors who do not meet standards set by the commission.
Because of additional personnel required to perform these new
responsibilities, the annual cost to the state is estimated to be
$46,559 in fiscal year 1996 and $41,559 in fiscal year 1997.
The bill also authorizes the commission to impose an
administrative fine of up to $500 on non-covered employers with
five or more employees who fail to file required reports on
injuries and illnesses. The agency is also authorized to take
administrative action against insurance carriers and health care
providers in the system for certain violations of the Act or
rules without having to establish a pattern of practice. Because
the number of administrative penalties that will be levied and
the amount of the penalties is not known, the fiscal implications
of these provisions cannot be estimated.
The bill would transfer responsibility for conducting
administrative procedure hearings to the State Office of
Administrative Hearings. This provision will involve a shift of
resources from the TWCC to the SOAH, but it is not expected to
result in any overall fiscal impact to the state. It is
anticipated that TWCC will enter into interagency contracts with
SOAH (as do all other agencies receiving services from SOAH) to
receive the administrative procedure hearings from SOAH. The
amounts of the interagency contracts that would be transferred
from TWCC to SOAH have not been determined yet. The reduction in
personnel at TWCC would be offset by the increase in the number
of personnel at SOAH.
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 Probable Savings Probable Cost Out
Year to the General to the of
Revenue Fund 001 General Revenue General Revenue
(Workers' Fund 001 Fund 001
Compensation (Texas Workers' (Texas Workers'
Payments- State Compensation Compensation
Employees) Commission) Commission)
1996 $2,970,000 $122,705 $124,339
1997 5,940,000 122,705 119,339
1998 5,940,000 122,705 119,339
1999 5,940,000 122,705 119,339
2000 5,940,000 122,705 119,339
Fiscal Change in
Year Number of State
Employees from
FY 1995
1996 (5.0)
1997 (5.0)
1998 (5.0)
1999 (5.0)
2000 (5.0)
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
No fiscal implication to units of local government is
anticipated.
Source: Sunset Advisory Commission, Office of the Attorney
General
Workers' Compensation Commission,
LBB Staff: JK, KVO, RR