LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                              March 30, 1999
  
  
          TO:  Honorable Patricia Gray, Chair, House Committee on Public
               Health
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB990  by Dutton (Relating to administrative procedures
               and criminal convictions for welfare  fraud.), As
               Introduced
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB990, As Introduced:  negative impact of $(1,600,478) through the    *
*  biennium ending August 31, 2001.                                      *
*                                                                        *
*  The bill would make no appropriation but could provide the legal      *
*  basis for an appropriation of funds to implement the provisions of    *
*  the bill.                                                             *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2000                           $(534,993)  *
          *       2001                          (1,065,485)  *
          *       2002                          (1,060,985)  *
          *       2003                          (1,060,985)  *
          *       2004                          (1,060,985)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
***********************************************************************
*Fiscal    Probable    Probable    Probable    Probable   Change in    *
* Year     Savings/    Savings/    Savings/    Revenue    Number of    *
*        (Cost) from (Cost) from (Cost) from Gain/(Loss)    State      *
*          General     Federal     Federal       from     Employees    *
*          Revenue      Funds       Funds      General   from FY 1999  *
*            Fund        0555       (TANF)     Revenue                 *
*            0001                    0555        Fund                  *
*                                                0001                  *
*  2000    $(125,493)  $(125,493)  $(167,323)  $(409,500)         6.0  *
*  2001     (246,485)   (246,485)   (328,647)   (819,000)        12.0  *
*  2002     (241,985)   (241,985)   (322,647)   (819,000)        12.0  *
*  2003     (241,985)   (241,985)   (322,647)   (819,000)        12.0  *
*  2004     (241,985)   (241,985)   (322,647)   (819,000)        12.0  *
***********************************************************************
  
Fiscal Analysis
  
The bill would add Section 531.109 to the Government Code, requiring the
Health and Human Services Commission to adopt by rule administrative
procedures to be used by the Commission or an appropriate health and
human services agency in determining whether an individual has engaged
in fraud to obtain or attempt to obtain financial assistance (TANF
grants), food stamps, or medical assistance (Medicaid).  The bill would
require establishment of administrative procedures which require the
Commission or an appropriate health and human services agency to provide
written notice to an individual that the individual which details
pending actions and identifies right to a hearing.  The bill would
require the Commission or an appropriate health and human services
agency to conduct hearings according to the Administrative Procedures
Act.
  
  
Methodology
  
Assumptions:
1)  The bill will require the Department of Human Services to modify the
way fraud hearings are handled, and increase the level of investigation
and review of potentially fraudulent cases.
2)  The bill will require an increase in staff, including one attorneys,
six hearing officers, and four investigators.  (It is assumed
implementation would begin mid-year fiscal year 2000.  Thus FTEs and
expenses have been reduced by one-half in 2000.)  The average annual cost
for an attorney would include $41,016 in salary, fringe benefits
totaling 27.59 percent of salary, $25,000 in travel, and $2,500 in
one-time start-up costs.   The average annual cost for a hearings officer
would include $33,900 in salary, fringe benefits totaling 27.59 percent
of salary, and $2,500 in one-time start-up costs.  The average annual
cost for an investigator would include $29,868 in salary, fringe benefits
totaling 27.59 percent of salary, $50,000 in travel, and $2,500 in
one-time start-up costs.
3)  Court reporting costs would total $20,000 in fiscal year 2000, and
$40,000 in each subsequent year.
4)  Costs would be allocated in the following manner:  10 percent General
Revenue Match for Medicaid, 20 General Revenue Match for Food Stamp
Administration, 10 percent Medicaid federal funds, 20 percent Food Stamp
federal funds for administration, and 40 percent TANF federal funds.
5)  Recoupment of fraudulently obtained benefits would decline by
$409,500 in fiscal year 2000, and by 819,000 in each subsequent year.
  
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   
LBB Staff:         JK, TH, PP, AZ