LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 28, 2001 TO: Honorable Patricia Gray, Chair, House Committee on Public Health FROM: John Keel, Director, Legislative Budget Board IN RE: HB2419 by Coleman (Relating to charity care requirements for certain hospitals.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2419, As Introduced: negative impact of $(285,626) through the * * biennium ending August 31, 2003. * * * * 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 * * 2002 $(135,115) * * 2003 (150,511) * * 2004 (152,511) * * 2005 (150,511) * * 2006 (150,511) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable (Cost) from General Change in Number of State * * Year Revenue Fund Employees from FY 2001 * * 0001 * * 2002 $(135,115) 2.2 * * 2003 (150,511) 3.0 * * 2004 (152,511) 3.0 * * 2005 (150,511) 3.0 * * 2006 (150,511) 3.0 * *************************************************************************** Technology Impact Three personal computers and related software Fiscal Analysis The bill would require the Department of Health (TDH) to approve the credit of a non-profit hospital or hospital system for expenditures for community benefits, as specified in the provisions of the bill. The bill would require TDH to submit to the Office of the Attorney General and the Comptroller a report containing information for each nonprofit hospital or hospital system. Information in the report could include the amount of charity care provided, amount of government-sponsored indigent care provided, and the amount of community benefits provided. The bill would require TDH to annually publish a manual listing each non-profit hospital in the state with a summary of the charity care policies and community benefits provided by the hospital. The bill would also create the State Access Fund, as a trust account. The bill would specify the composition of fund proceeds to include donations from nonprofit hospitals to help meet state charity care and community benefit requirements; gifts, grants or other donations, and general revenues appropriated by the Legislature. The bill would allow these funds to be used only to finance initiatives to expand access to charity care and community benefits, including administrative costs. The bill would require the Comptroller to select five nonprofit hospitals within the state and conduct, or cause to be conducted, an appraisal of the taxable value of these hospitals. Note: This bill would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either within or outside of the Treasury, or create a dedicated revenue source. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature. Methodology A three month start up period is assumed. TDH indicates three additional FTEs would be need to implement the provisions of the bill. Estimated costs for salary and benefits for the additional FTEs would total $236,658 for the 2002-03 biennium. TDH estimates operating expense would total $12,668 in FY 2002, and $2,415 in FY 2003-06. TDH also estimated other costs would total $5,000 in FY 2002, and $3,500 in FYs 2003-06, and would include printing, production and mailing. The Office of the Comptroller identified a one-time administrative cost of $150,000 to hire specialized consultants to appraise the taxable value of the five nonprofit hospitals selected for the study. It is assumed the cost could be absorbed within the agency's existing resources. Neither the Department of Health nor the Office of the Comptroller projected new revenues in association with the implementation of this bill. Local Government Impact Under provisions of the bill, non-profit hospitals could apply for and receive money from the State Access Fund for charity care and community benefits projects. This would assist local governments with expenditures for indigent health care. Hospitals owned by local governments may qualify for State Access Funds to finance an initiative to expand access to charity care and to provide community benefits. This would have a positive fiscal impact to units of local government. Source Agencies: 304 Comptroller of Public Accounts, 501 Texas Department of Health LBB Staff: JK, HD, RM, DB