LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 7, 1997 TO: Honorable Judith Zaffirini, Chair IN RE: Senate Bill No. 1159, Committee Report 1st House, Substituted Committee on Health & Human Services By: Carona Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1159 ( Relating to regulating personal care facilities; providing for a civil penalty) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB1159-Committee Report 1st House, Substituted Implementing the provisions of the bill would result in a net positive impact of $6,428 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 authorize the Department of Human Services (DHS) to seek a temporary restraining order when a personal care facility is operating without a license and there is no immediate threat to the health or safety of residents. Current law only authorizes DHS to seek a temporary restraining order for unlicensed activity when there is an immediate threat. The bill would increase the minimum civil penalty for unlicensed activity by a personal care home from $100 to $1,000 per day. It would allow the higher minimum civil penalty to be imposed for violations that accompany the unlicensed activity violation. It would also specify that penalties deposited in the General Revenue fund may only be appropriated to DHS to administer and enforce the licensing statute. The bill would require DHS to refer civil penalty cases to the local district attorney, county attorney, or civil attorney if the Attorney General fails to take action within 30 days of referral. It would also require the local attorneys to file suit in a district court to collect and retain the penalty. The bill would require the Department of Protective and Regulatory Services by rule to adopt a memorandum of understanding with DHS and the Attorney General that: 1) defines responsibilities and coordinates activities concerning personal care home facilities, 2) delineates coordinated procedures for responding to complaints about resident abuse or neglect, substandard conditions, and unlicensed activity, 3) identifies each agency's need for access to information on facilities that are under investigation or a plan of correction, and 4) provides a plan for correcting violations when appropriate. The effective date of the bill would be September 1, 1997. Methodolgy It is assumed that implementation of the bill's provisions would require DHS to investigate 300 additional complaints against unlicensed personal care facilities in 1998, and 200 additional complaints in each subsequent year. It is also assumed that each investigation would require 12 hours of staff time. The department would need 2.3 FTE positions in 1998 and 1.5 FTE positions in subsequent years to accommodate the additional workload. It is assumed that: 1) the minimum civil penalty of $1,000 would be assessed against 95% of the facilities investigated each year, 2) 50% of the assessed penalties would be collected, 3) 100% of the collected penalties would be deposited in the General Revenue fund, and 4) there would be a six-month lag between the imposition and assessment of penalties. It is assumed that implementation of the bill's provision requiring the Department of Protective and Regulatory Services to participate in the memorandum of understanding between DHS and the Attorney General would have no significant fiscal impact. 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 ($116,971) $71,250 2.3 1998 (66,601) 118,750 1.5 2000 (72,291) 95,000 1.5 2001 (72,291) 95,000 1.5 2002 (72,291) 95,000 1.5 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 ($45,721) 1999 52,149 2000 22,709 2001 22,709 2002 22,709 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. The provision requiring DHS to refer civil penalty cases to the local district attorney, county attorney, or city attorney when the Attorney General fails to take action within 30 days could slightly increase local government revenues since the local attorneys would be required to file suit in a district court to collect and retain the penalties. Source: Agencies: 304 Comptroller of Public Accounts 302 Office of the Attorney General LBB Staff: JK ,BB ,NM