LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 29, 1997
         
         
      TO: Honorable Kenneth Armbrister, Chair            IN RE:  Senate Bill No. 1066, Committee Report 1st House, Substituted
          Committee on State Affairs                              By: Zaffirini
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1066 ( relating 
to procurement practices by health and human services agencies, 
by certain other agencies with programs related to health or 
human services, and by certain public and private local providers 
of health or human services.) this office has detemined the 
following:
         
         Biennial Net Impact to General Revenue Funds by SB1066-Committee Report 1st House, Substituted
         
Implementing the provisions of the bill would result in a net 
positive impact of $2,922,441 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 implement Texas Performance Review (TPR) recommendation 
HHS30 in "Disturbing the Peace: The Challenge of Change in Texas 
Government," relating to the use of flexible purchasing practices.
 
Methodolgy
 
The estimates assume that agencies will take three months to 
implement the provisions of the bill.  According to the Comptroller 
of Public Accounts, state agencies with health-related programs 
should be able to achieve about a one percent savings on certain 
procurements, saving approximately $2.0 million in general revenue 
annually. 

The Health and Human Services Commission would 
be required to adopt rules and procedures governing the acquisition 
of goods and services that apply to all health and human services 
agencies.  HHSC would also be required to coordinate the purchasing 
practices of these agencies.  One and a half full-time equivalent 
positions is included as part of the cost to implement these 
provisions.

It is assumed that the other agencies affected 
by the provisions of the bill would be able to implement the 
provisions of the bill within existing resources.  
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           Change in Number   
            Savings/(Cost)     Savings/(Cost)     of State                                                
            from General       from General       Employees from                                          
            Revenue Fund       Revenue Fund       FY 1997                                                 
            0001               0001                                                                        
       1998         ($79,142)        $1,298,000               1.5                                    
       1998          (71,417)         1,775,000               1.5                                    
       2000          (71,417)         1,775,000               1.5                                    
       2001          (71,417)         1,775,000               1.5                                    
       2002          (71,417)         1,775,000               1.5                                    
 
 
         Net Impact on General Revenue Related Funds:
 

 
              Fiscal Year      Probable Net Postive/(Negative)
                               General Revenue Related Funds
                                             Funds
               1998           $1,218,858
               1999            1,703,583
               2000            1,703,583
               2001            1,703,583
               2002            1,703,583
 
Similar annual fiscal implications would continue as long as 
the provisions of the bill are in effect.
          
The bill would amend the Human Resources Code and the Health 
and Safety Code to allow the same flexibility in purchasing 
for public and private Disproportionate Share Program hospitals 
and local providers of health services affiliated with the Department 
of Health and Department of Mental Health and Mental Retardation. 
 These provisions would allow savings to accrue to these local 
entities to the extent that the practices are not in place and 
that the entities adopt these procurement practices.
          
   Source:            Agencies:   501   Department of Health
                                         308   State Auditor's Office
                                         304   Comptroller of Public Accounts
                                         529   Health and Human Services Commission
                                         655   Texas Department of Mental Health and Mental Retardation
                                         303   General Services Commission
                                         302   Office of the Attorney General
                                         453   Workers' Compensation Commission
                                         304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,JD ,AZ