LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session March 24, 1999 TO: Honorable Patricia Gray, Chair, House Committee on Public Health FROM: John Keel, Director, Legislative Budget Board IN RE: HB2641 by Gray (Relating to the continuation and functions of the Health and Human Services Commission.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2641, As Introduced: positive impact of $470,000 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 continue the Health and Human Services Commission and establish a new sunset date of September 1, 2007. General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(15,000) * * 2001 485,000 * * 2002 2,385,000 * * 2003 2,385,000 * * 2004 2,385,000 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable (Cost) Probable Probable (Cost) Probable * * Year from General Savings from from Federal Savings from * * Revenue Fund General Revenue Funds Federal Funds * * 0001 Fund 0555 0555 * * 0001 * * 2000 $(65,000) $50,000 $65,000 $50,000 * * 2001 (65,000) 550,000 65,000 550,000 * * 2002 (65,000) 2,450,000 65,000 2,450,000 * * 2003 (65,000) 2,450,000 65,000 2,450,000 * * 2004 (65,000) 2,450,000 65,000 2,450,000 * *************************************************************************** Fiscal Analysis The bill would require the Health and Human Services Commission to directly manage business and information systems of health and human services (HHS) agencies. In addition, the bill would require the consolidation of regional support services for HHS agencies. The Sunset Advisory Commission (SAC) reports that these efforts will reduce duplicative efforts in existing management systems. SAC estimates that other bill provisions would assign management control over key agency operations and result in savings to the State. The bill would create a local government advisory committee to assist local entities with federal funding efforts and coordination of services. Reimbursement for travel and other committee related expenses must be authorized in the General Appropriations Act. Methodology Total costs of $130,000 would be required to implement the bill, as estimated by the Sunset Advisory Commission. The costs relate to provisions that would require the Health and Human Services Commission to employ a medical director. Sunset Advisory Commission estimates savings of $100,000 in fiscal year 2000 and $500,000 each subsequent year relating to the cross-agency coordination of on-site and desk auditing of HHS agency contractors. The regional consolidation of HHS agencies' support services is anticipated by SAC to reduce expenditures by $400,000 each year beginning in fiscal year 2001. The consolidation of information technology planning and management is estimated by SAC to reduce expenditures by $200,000 in fiscal year 2001 and $1.0 million each subsequent year. Annual savings after the 2000-01 biennium as estimated by the Sunset Advisory Commission correspond to changes in rate setting ($1.0 million) and Medicaid operations and contracting ($2.0 million). The SAC projects that $10.0 million in additional federal revenue annually will be gained through the required management of federal funds by HHSC beginning in fiscal year 2002. Sunset Advisory Commission reports that staff and other resources necessary for HHSC to perform the duties required by the bill would be derived from existing resources and staffing within the HHS agencies. SAC notes that consolidation of administrative functions should lead to a net reduction in FTEs. Local Government Impact The Sunset Advisory Commission anticipates that an increase in federal funds will be available to local entities due to the creation and efforts of a local government advisory committee. Source Agencies: LBB Staff: JK, TP, AZ