LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 12, 1995
TO: Honorable Kim Brimer, Chair IN RE: Committee Substitute
Committee on Business & Industry for
House of Representatives HouseBill No.
Austin, Texas 1589
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
1589 (relating to the provision of workers' compensation benefits
for certain state employees and to the creation, powers, and
duties of the State Office of Risk Management) 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 consolidate the state agency risk management
program administered by the Workers' Compensation Commission and
the workers' compensation payments program administered by the
Office of the Attorney General into a newly created agency, the
State Office of Risk Management.
It is assumed that if this bill were to be enacted that
appropriations currently provided to the Workers' Compensation
Commission for risk management and to the Office of the Attorney
General for the administration of the workers' compensation
payments function would be appropriated to the State Office of
Risk Management. The State Office of Risk Management would
experience a one-time start up cost associated with acquiring
computer equipment and office equipment for Division employees.
The bill would require the State Office of Risk Management to
develop and implement a cost allocation program for workers'
compensation payments for certain agencies. Those agencies with
workers' compensation claims which are in excess of the
allocated amount would not be entitled to additional
appropriations to pay such claims, but would be required to pay
the excess claims out of funds appropriated to the agency.
It is anticipated that such a cost allocation program, in
conjunction with the bill's provisions requiring agencies to
implement return to work programs and to maintain injured
workers on the payroll for thirty days, would result in a
significant reduction in the state's cost for workers'
compensation payments.
It is also anticipated that the bill's provisions requiring
injured workers to remain on the state payroll for 30 days would
result in an annual cost reduction in workers' compensation
payments for state employees of approximately $2.5 million in
General Revenue funds. This savings would, however, be offset by
a like increase in salary costs to the affected state agencies.
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 Cost out Probable Savings
Year of to the General
the General Revenue Fund
Revenue (Workers'
Fund 001 Compensation
Payments-State
Employees)
1996 $1,363,184 $0
1997 0 2,300,000
1998 0 4,500,000
1999 0 6,600,000
2000 0 8,600,000
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:
LBB Staff: JK, RJ, KVO, RR