LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 7, 1997
         
         
      TO: Honorable Harvey Hilderbran, Chair            IN RE:  House Bill No. 2409
          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; 
providing criminal penalties.) this office has detemined the 
following:
         
         Biennial Net Impact to General Revenue Funds by HB2409-As Introduced
         
Implementing the provisions of the bill would result in a net 
negative impact of $(232,561) 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) receives Medicaid reimbursement, 
and 3) is not otherwise required to be licensed.

The bill 
would require the Board of Human Services to adopt rules prescribing 
minimum standards for the health and safety of adult foster 
care home residents.  The rules must include requirements for 
criminal history checks; the reporting of abuse, neglect, mistreatment, 
or exploitation of residents; employee training; and employee 
continuing education.

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 Board of Human Services 
could establish a non-refundable license fee, and DHS could 
also set fees sufficient to cover the costs of administering 
the licensing statute.

The bill would authorize DHS, with 
assistance from the Texas Department on Aging, to: 1) inspect 
adult foster care homes as necessary to assure compliance, 2) 
provide adult foster care home operators with training materials 
and a handbook explaining the rules, and 3) coordinate training 
conferences and workshops with other state agencies.

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 bill 
would require persons to report abuse or neglect of adult foster 
care home residents who are at least 65 years old.  The report 
could be filed with DHS or a local or state law enforcement 
agency.  Law enforcement agencies would be required to refer 
their reports to DHS or another designated agency.  It would 
be a Class A misdemeanor to fail to report abuse and neglect, 
or to make a report that is malicious or reckless.

The bill 
would require DHS or another designated agency to promptly investigate 
reports of abuse or neglect.  The investigation could include 
a visit to the home and an interview with the resident.  DHS 
would be required to file a petition for temporary care and 
protection when immediate removal is necessary to protect a 
resident from further abuse or neglect.

The bill would require 
DHS to maintain a central registry of abuse and neglect reports. 
 It would require licensed adult foster care homes to report 
resident deaths to DHS.  It would also require DHS to correlate 
the reports with death certificate information and to develop 
statistical information about the official causes of death.

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 increase from 
about 250 in 1998 to more than 350 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 in 
1998, and a second FTE position in 1999, to accommodate the 
additional workload.

DHS would need to update existing automation 
systems to maintain the central registry of abuse and neglect 
reports and to develop the statistical information about official 
causes of death.  It is assumed that this could be accomplished 
for less than $30,000.  The department would also need one FTE 
position to handle the workload associated with maintaining 
the central registry and developing the statistical information.

DHS 
does not believe it would be possible to set fees high enough 
to cover the costs of administering the licensing program.  
Each licensed adult foster care home would have to pay an average 
annual fee of nearly $400 to cover the administrative costs, 
and the bill does not require the Board of Human Services or 
the department to set such a fee.
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           Change in Number   
            Savings/(Cost)     of State                                                                   
            from General       Employees from                                                             
            Revenue Fund       FY 1997                                                                    
            0001                                                                                           
       1998        ($111,605)               2.0                                                      
       1998         (120,956)               3.0                                                      
       2000         (115,266)               3.0                                                      
       2001         (115,266)               3.0                                                      
       2002         (115,266)               3.0                                                      
 
 
         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           ($111,605)
               1999            (120,956)
               2000            (115,266)
               2001            (115,266)
               2002            (115,266)
 
Similar annual fiscal implications would continue as long as 
the provisions of the bill are in effect.
          
The bill would require local law enforcement agencies to accept 
reports of abuse or neglect and to refer these reports to DHS 
or another designated agency.  It would require probate and 
county courts to order caretakers or  operators to provide DHS 
with access to residents under certain circumstances.  It would 
also require DHS to file written investigation reports with 
district attorneys and law enforcement agencies.  It is assumed 
that there would be no significant fiscal implications for local 
government from passage of the bill.
          
   Source:            Agencies:   340   Department on Aging
                                         530   Department of Protective and Regulatory Services
                                         324   Department of Human Services
                                         320   Texas Workforce Commission
                                         
                      LBB Staff:   JK ,BB ,NM