LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 17, 1999 TO: Honorable Eddie Lucio, Chair, Senate Committee on Border Affairs FROM: John Keel, Director, Legislative Budget Board IN RE: SB 1660 by Shapleigh (relating to the establishment and operation of the Border Health Institute), Committee Report 1st House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1660, Committee Report 1st House, Substituted: positive impact * * of $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. * * * * SB 2 currently has $50 million in tobacco settlement receipts * * available in Article XII for this type of purpose. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $0 * * 2001 0 * * 2002 0 * * 2003 0 * * 2004 0 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Change in Number of State * * Year Permanent Funds (Tobacco) Employees from FY 1999 * * Established for Institute * * Members * * 2000 $(296,560) 4.0 * * 2001 (326,216) 5.0 * * 2002 (358,838) 6.0 * * 2003 (394,722) 6.0 * * 2004 (434,194) 6.0 * *************************************************************************** Fiscal Analysis The bill establishes the Border Health Institute (Institute) in El Paso to deliver health care, provide health education, and conduct research affecting public health in the border region. The bill specifies the Institute's membership and administration, assigns the Institute's governing board (board) responsibility for the Institute's operation, financial activities, and any capital improvements, and requires the Institute to prepare an annual audited financial report and status report of each project for the board. The board may employ an executive director and any other staff necessary for the operation of the Institute. Funding for the Institute would come from legislative appropriation and grants from the federal government, or any other public or private entity. The bill requires the Texas Higher Education Coordinating Board (THECB) to prepare an impact statement examining the initial implementation of the bill by January 1, 2001. Methodology This analysis assumes that the costs associated with the bill would be funded from earnings of the permanent endowment funds established by House Bill 1945. The Comptroller of Public Accounts has assumed that money for the new funds would come from General Revenue Account 5040 - Tobacco Settlement Temporary Hold, which holds payments to the state as a result of the January 1998 tobacco lawsuit settlement. The fund transfers would occur in fiscal year 1999. This analysis assumes that expenses associated with the governing board, and staff would be paid out of the earnings of the permanent endowment funds established for The University of Texas at El Paso, Texas Tech University Health Sciences Center and The University of Texas Health Science Center at Houston and that the annual costs of the Institute would not exceed the annual earnings of these funds. Approximately $261,560 is estimated for hiring an executive director, financial officer and support staff, and $35,000 is estimated for operating costs, equipment and travel in fiscal year 2000. Beginning in fiscal year 2001, total costs to the permanent endowment funds would increase by 10 percent in each successive year. The costs of preparing an impact statement on implementing the bill would be absorbed in THECB's general operating expenses. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 501 Department of Health, 720 The University of Texas System Administration, 739 Texas Tech University Health Sciences Center, 781 Higher Education Coordinating Board LBB Staff: JK, DE, LD, CF