LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 4, 1995
TO: Honorable Kim Brimer, Chair IN RE: House Bill No. 1589
Committee on Business & Industry By: Jackson
House of Representatives
Austin, Texas
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.; Relating to the provision of
workers' compensation benefits for certain state employees) 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 an independent Division of
Risk Management which would be administratively attached to the
Workers' Compensation Commission.
It is assumed that if this bill were to be enacted that
appropriations currently provided to the Office of the Attorney
General for the administration of the workers' compensation
payments function would be appropriated to the Division of Risk
Management. The Division 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 Division 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: Office of the Attorney General, Workers' Compensation
Commission
LBB Staff: JK, RJ, KVO, RR