LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 1, 1997 TO: Honorable Harvey Hilderbran, Chair IN RE: House Bill No. 2409, Committee Report 1st House, Substituted Committee on Human Services By: Coleman House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB2409 ( Relating to creating a licensing program for adult foster care homes.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB2409-Committee Report 1st House, Substituted Implementing the provisions of the bill would result in a net impact of $0 to General Revenue Related Funds through the biennium ending August 31, 1999. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. Fiscal Analysis The bill would create a new state licensing program for adult foster care homes. It would require licensure for any establishment that: 1) provides room and board for a person age 65 or older who is unrelated to the proprietor, 2) received Medicaid reimbursement, and 3) is not otherwise required to be licensed. The bill would require the Department of Human Services (DHS) to issue an adult foster care home license when it finds, after an inspection and investigation, that the minimum standards have been met. The license would be valid for two years and could be renewed. The bill would authorize the Board of Human Services to establish a non-refundable license application fee, and require DHS to set fees sufficient to cover the costs of administering the licensing statute. The bill would authorize DHS to deny, suspend, or revoke an adult foster care home's license after providing notice and the opportunity for a hearing and appeals under Chapter 2001 of the Government Code. It would require DHS to suspend an adult foster care home's license, or order immediate closure, when there is an immediate threat to resident health and safety. It would also require DHS by rule to provide for the relocation of residents when a license is suspended or a home is closed. The effective date for these provisions would be January 1, 1998. Methodolgy DHS estimates that the number of establishments covered by the adult foster care home licensing program would rise from 143 in 1998 to 254 in the year 2002. It is assumed that DHS would inspect each home once a year and that each inspection would require 8 hours of staff time. It is also assumed that the number of complaint investigations would be negligible. The department would need one FTE position to accommodate the additional workload. The department would also need about $14,000 to develop an automated system for the licensing program. It is assumed that DHS would establish a fee to recover the full costs of administering the licensing program. The fee would cost each licensed adult foster care home provider between $200 and $300 annually. First-year costs have been reduced to accommodate the January 1, 1998 effective date for the licensing requirement. The probable fiscal implications of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Five Year Impact: Fiscal Year Probable Probable Revenue Change in Number Savings/(Cost) Gain/(Loss) from of State from General General Revenue Employees from Revenue Fund Fund FY 1997 0001 0001 1998 ($48,663) $48,663 1.0 1998 (43,280) 43,280 1.0 2000 (43,280) 43,280 1.0 2001 (43,280) 43,280 1.0 2002 (43,280) 43,280 1.0 Net Impact on General Revenue Related Funds: The probable fiscal implication to General Revenue related funds during each of the first five years is estimated as follows: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $0 1999 0 2000 0 2001 0 2002 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: Agencies: 324 Department of Human Services LBB Staff: JK ,BB ,NM