LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session February 25, 1997 TO: Honorable Steven Wolens, Chair IN RE: Senate Bill No. 407, As Engrossed Committee on State Affairs By: Harris House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB407 ( Relating to minimum standards, records, suspension or revocation of a license, and administrative penalties for abortion facilities.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB407-As Engrossed 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. The bill relates to minimum standards, suspension and revocation of a license, and administrative penalties for abortion facilities. The bill would allow the Health Department to immediately suspend or revoke a license when the health and safety of persons are threatened, and to assess an administrative penalty against persons who violate Chapter 245 of the Health and Safety Code. Appropriations: The bill would appropriate the following amounts: Fiscal Analysis The bill requires the Department of Health to investigate violations and notify persons alleged to have committed violations. It requires the department to give written notification to the person alleged to have committed violations of penalties assessed and rights to subsequent hearings and judicial review. Persons notified have the right to a hearing on the occurrence of the violation and on the amount of the penalty. Penalties are to be deposited to the general revenue fund. If a hearing is requested, the commissioner of public health shall designate a hearings examiner to conduct the hearing. If the person files an affidavit stating that the person is financially unable to pay the penalty, the department may contest the person's affidavit. If the person does not pay the penalty, the department may refer the matter to the attorney general for collection. The department may assess reasonable costs against a person in an administrative hearing if, as a result of the hearing, the person's license is denied, suspended, or revoked or if the administrative penalties against the person are assessed. If the attorney general brings action against a person or action to enforce an administrative penalty, the attorney general may recover reasonable costs and expenses. Methodolgy According to the Department of Health, the potential fiscal impact of hearing expenses is unknown; and the potential revenue for recovery of costs relating to hearing expenses is unknown. These potential costs and revenues are not included in the estimates in the table below. The Department of Health has identified department costs incurred in the investigation of violations, clinical review, licensure action and administrative penalty recommendations. These activities would be performed by an additional one-half time Nurse V and an additional full time Administrative Technician I. The Department of Health anticipates using its authority to increase licensing fees to cover the costs of these 1.5 FTEs. The Department of Health assumes that the Board of Health would increase license fees by $2,334, from the current level of $1,000 to $3,334 in the first year. Based on a five-year average number of facilities (34 facilities), this increase is assumed to generate $79,356 in the first year to cover the cost of the additional FTEs. The Department expects to adjust downward the fees in subsequent years to equal the costs of the 1.5 FTEs in those years. The Office of the Attorney General estimates 120-200 hours on an administrative appeal of an administrative penalty case, and no more than three cases per fiscal year as a result of the bill. The Office of the Attorney General anticipates that any additional legal work or resources required subsequent to passage of this bill could be reasonably absorbed with current staff. The Comptroller of Public Accounts estimates that there will be no significant fiscal impact related to administrative penalties. 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 Savings/(Cost) Gain/(Loss) from from General General Revenue Revenue Fund Fund 0001 0001 1998 ($79,352) $79,352 1998 (61,400) 61,400 2000 (61,400) 61,400 2001 (61,400) 61,400 2002 (61,400) 61,400 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 significant fiscal implication to units of local government is anticipated. Source: Agencies: 501 Department of Health 302 Office of the Attorney General 304 Comptroller of Public Accounts LBB Staff: JK ,JD ,BB ,MM