LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 17, 1997 TO: Honorable Harvey Hilderbran, Chair IN RE: Senate Bill No. 190, Committee Report 2nd House, Substituted Committee on Human Services By: Naishtat House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB190 ( Relating to the regulation of nursing homes and similar facilities; providing penalties.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB190-Committee Report 2nd House, Substituted Implementing the provisions of the bill would result in a net positive impact of $472,000 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. The bill would amend Chapter 242 of the Health and Safety Code and Chapter 32 of the Human Resources Code to implement a number of changes relating to the regulation of convalescent and nursing homes in Texas. Fiscal Analysis Implementation of two provisions in the bill would result in a gain to the General Revenue fund. The first provision would authorize the Board of Human Services to raise license fees by $100 per facility and $5 per bed. The second provision would authorize the Board of Human Services to establish a background examination fee to defray the department's expenses in considering the background and qualifications of a wide range of individuals associated with license applications. Implementation of several provisions relating to the enforcement program would have no significant fiscal impact. These include provisions that would allow the Office of the Attorney General to investigate unlawful acts when certain conditions are met, use civil investigative demand powers, and file suit in district court to enforce civil investigative demands. The attorney general's office reports that any additional legal work as a result of passage of the bill could be reasonably absorbed with current staff. Other provisions that would have no significant fiscal impact include: requiring the Board of Human Services to adopt a system for prioritizing complaint investigations and actions; expanding the scope of liability to include violations of participation requirements for the state Medicaid program; increasing civil and administrative monetary penalties; and allowing the Department of Human Services to petition for a temporary restraining order when a threatened violation of a state licensing standard poses an immediate threat to resident health and safety. The bill would specify that fees and penalties collected by or on behalf of the department which are deposited to the credit of the General Revenue fund may be appropriated only to the department to administer and enforce the state licensing law. It would also specify that revenues collected by the Office of the Attorney General to pay for costs associated with successful enforcement actions must be deposited to the credit of the General Revenue fund and may be appropriated only to the Department of Human Services and the Office of the Attorney General. The bill would also require the Legislative Budget Board and the State Auditor to jointly prescribe the form and content of annual performance reports that the Office of the Attorney General and the Department of Human Services must prepare. The effective date for the bill is September 1, 1997, and the Board of Human Services must adopt rules to implement the changes in law on or before January 1, 1998. Methodolgy It is assumed that the Board of Human Services would increase licensing fees on September 1, 1997. The Comptroller of Public Accounts estimates that the annual gain to the General Revenue fund would be $236,000. This amount was estimated by applying the proportional fee increase to the average level of nursing home license fee collections in fiscal years 1995 and 1996. It is also assumed that the Board of Human Services would establish a background examination fee equaling the department's expenses, but no data is currently available to calculate these expenses. 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 Revenue Gain/(Loss) from General Revenue Fund 0001 1998 $236,000 1998 236,000 2000 236,000 2001 236,000 2002 236,000 Net Impact on General Revenue Related Funds: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $236,000 1999 236,000 2000 236,000 2001 236,000 2002 236,000 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: Agencies: 302 Office of the Attorney General 304 Comptroller of Public Accounts 324 Department of Human Services LBB Staff: JK ,BB ,NM