LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 16, 1997 TO: Honorable Judith Zaffirini, Chair IN RE: Senate Bill No. 1539 Committee on Health & Human Services By: West, Royce Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1539 ( Relating to the regulation of certain facilities, homes, and agencies that provide child care services and of child care administrators; providing penalties.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB1539-As Introduced Implementing the provisions of the bill would result in a net positive impact of $981,302 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 amend Chapter 42 and Chapter 43 of the Human Resources Code relating to the regulation of child-care facilities and child-care administrators by the Department of Protective and Regulatory Services (PRS). The bill would require PRS to conduct background and criminal history checks on owners, operators, employees, and regular visitors associated with regulated child-care facilities. The requirement would encompass every child-care facility that must be licensed, certified, or registered by PRS, including facilities that provide care, training, custody, treatment, or supervision of children during part or all of the 24-hour day. The bill would require PRS to conduct the background and criminal history checks when an application is filed to operate a child-care facility, and at least once every 24 months after a child-care facility is licensed, certified, or registered. Each check must include a search of child abuse/neglect reports maintained by PRS, and a search of criminal history record information maintained by the Department of Public Safety (DPS). PRS by rule must require each child-care facility to pay a fee that does not exceed the administrative costs the department incurs in conducting the background and criminal history check. Fee revenue would be deposited in the General Revenue fund. The effective date for the bill would be September 1, 1997. Methodolgy PRS reports that it conducted nearly 48,000 background and criminal history checks relating to persons associated with regulated child-care facilities in fiscal year 1996. These checks were conducted at no cost to the facility. It is assumed that implementation of the provision requiring child-care facilities to pay a fee in an amount not to exceed the department's administrative costs would generate new revenue with no additional costs. PRS reports that implementation of the provision requiring background and criminal history checks at least once every 24 months would encompass nearly 29,000 regulated child-care facilities, with the number of persons checked per facility ranging from 2 in a small agency foster family home to 30 in a large child-care institution. It is assumed that implementation of this provision would require PRS to check the background and criminal history of 67,823 persons associated with regulated child-care facilities each year. It is also assumed that most of these checks would not duplicate the department's current workload. PRS estimates that one staff person could search 15,000 records each year. It is assumed that 2% of the child abuse/neglect searches and 1% of the criminal history searches would result in a positive match requiring additional staff time to fully document and act on the case. PRS would need 21.9 additional FTE positions to accommodate the workload associated with the new requirement for biennial background and criminal history checks. First year costs and revenues have been reduced by 25% to give the department time to adopt rules and phase-in the new program. It is assumed that PRS would charge a fee to recover the administrative costs associated with the background and criminal history check requirement. These would include staffing costs, a $1 fee for DPS criminal history searches, and a $24 fee for FBI fingerprint searches (which would be conducted on a very small number of individuals). 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 ($735,559) $1,226,210 16.4 1998 (885,823) 1,376,474 21.9 2000 (853,989) 1,344,640 21.9 2001 (853,989) 1,344,640 21.9 2002 (853,989) 1,344,640 21.9 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 $490,651 1999 490,651 2000 490,651 2001 490,651 2002 490,651 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: 530 Department of Protective and Regulatory Services LBB Staff: JK ,BB ,NM