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