LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session May 3, 1999 TO: Honorable Bill Ratliff, Chair, Senate Committee on Finance FROM: John Keel, Director, Legislative Budget Board IN RE: HB1676 by Junell (relating to permanent funds for certain public health purposes), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Fundsfor * * HB1676, As Engrossed: $0 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. * * * * The bill would transfer $500 million in tobacco settlement * * receipts, anticipated to be deposited into the General Revenue * * Fund, to five new permanent funds. * ************************************************************************** General Revenue-Related Funds, Six-Year Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 1999 $0 * * 2000 0 * * 2001 0 * * 2002 0 * * 2003 0 * * 2004 0 * **************************************************** All Funds, Six-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Revenue Revenue Savings/ Revenue Number of * * Gain/(Loss) Gain/(Loss) (Cost) from Gain/(Loss) State * * from to Permanent to Employees * * GR-Acct. Permanent Fund for Permanent from FY 1998 * * 5040 Fund for Tobacco Fund for * * Tobacco Tobacco Education & Children & * * Settlement Education & Enforcement Public * * Temporary Enforcement Health * * Hold * * 5040 * * 1999 $200,000,000 $0$125,000,000 0.0 * * $(500,000, * * 000) * * 2000 0 11,200,000 7,000,000 14.0 * * (11,200,000) * * 2001 0 11,200,000 7,000,000 21.0 * * (11,200,000) * * 2002 0 11,200,000 7,000,000 21.0 * * (11,200,000) * * 2003 0 11,200,000 7,000,000 21.0 * * (11,200,000) * * 2004 0 11,200,000 7,000,000 21.0 * * (11,200,000) * *********************************************************************** *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Savings/(Cost) Revenue Savings/(Cost) Revenue * * from Permanent Gain/(Loss) to from Permanent Gain/(Loss) to * * Fund for Permanent Fund Fund for Permanent Fund * * Children & for Emergency Emergency for Rural * * Public Health Medical Medical Health Facility * * Services & Services & Capital * * Trauma Care Trauma Care Improvement * * 1999 $0 $100,000,000 $0 $50,000,000 * * 2000 (7,000,000) 5,600,000 (5,600,000) 2,800,000 * * 2001 (7,000,000) 5,600,000 (5,600,000) 2,800,000 * * 2002 (7,000,000) 5,600,000 (5,600,000) 2,800,000 * * 2003 (7,000,000) 5,600,000 (5,600,000) 2,800,000 * * 2004 (7,000,000) 5,600,000 (5,600,000) 2,800,000 * *************************************************************************** ************************************************************************** *Fiscal Probable Probable Revenue Probable * * Year Savings/(Cost) from Gain/(Loss) to Savings/(Cost) from * * Permanent Fund for Community Hospital Community Hospital * * Rural Health Capital Improvement Capital Improvement * * Facility Capital Fund Fund * * Improvement * * 1999 $0 $25,000,000 $0 * * 2000 (2,800,000) 1,400,000 (1,400,000) * * 2001 (2,800,000) 1,400,000 (1,400,000) * * 2002 (2,800,000) 1,400,000 (1,400,000) * * 2003 (2,800,000) 1,400,000 (1,400,000) * * 2004 (2,800,000) 1,400,000 (1,400,000) * ************************************************************************** Fiscal Analysis The bill would create several special funds in the State Treasury outside the General Revenue Fund. Each would consist of money transferred as directed by the Legislature, gifts and grants contributed to the fund, and interest received from investment of money in the fund. Funds could be appropriated to pay money the federal government determines that the state should repay to the federal government, or that the federal government should recoup from the state in the event of national tobacco legislation. The bill would transfer $200 million to a Permanent Fund for Tobacco Education and Enforcement; interest received could be appropriated to the Department of Health (TDH) for programs to reduce the use of tobacco products. A new Permanent Fund for Children and Public Health would consist of a $125 million transfer; interest received could be appropriated to TDH for children's health care and grants to local communities to address public health priorities. The Permanent Fund for Emergency Medical Services and Trauma Care would receive a transfer of $100 million; interest received could be appropriated to the TDH for programs to provide emergency medical services and trauma care. The bill would transfer $50 million to a new Permanent Fund for Rural Health Facility Capital Improvement; interest received could be appropriated to the Center for Rural Health Initiatives (rural health center). The bill would allow the rural health center to use money appropriated to make grants or low interest loans to certain units of local government for capital improvements to existing public health facilities, to construct new public health facilities, or to purchase capital equipment for public health. The Community Hospital Capital Improvement Fund would receive a $25 million transfer; interest received could be appropriated to TDH to provide grants, loans, or loan guarantees to certain public or nonprofit community hospitals located in urban areas of the state. Methodology Analysis by the Comptroller of Public Accounts assumes that the $500 million to be transferred would come from General Revenue Account 5040-Tobacco Settlement Temporary Hold and would occur in fiscal year 1999. No other transfers of state money, and no gifts or grants were assumed. It is assumed there would no significant loss in General Revenue Fund interest earnings in fiscal year 2000 and no interest earnings loss in 2001 and beyond. It is assumed that the TDH would develop programs to fully expend interest earnings in the permanent funds for Tobacco Education and Enforcement, for Children and Public Health, and for Emergency Medical Services and Trauma Care (an additional 18 FTEs are assumed). It is assumed that the rural health center would develop programs to fully expend interest earnings from the Permanent Fund for Rural Health Facility Capital Improvement (1.5 additional FTEs assumed). It is assumed the TDH would develop programs to fully expend interest earnings from the Community Hospital Capital Improvement Fund (additional 1.5 FTEs is assumed). First-year FTEs were reduced to reflect a phase-in period. Local Government Impact The bill would have a positive impact on units of local government. Estimates assume that local units of government could receive grants through TDH from several of the new funds. Also, the Permanent Fund for Rural Health Facility Capital Improvements would have as a primary beneficiary of grants or loans from the fund local government entities that own or operate a public hospital located in a rural county. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, BB, KF