LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 16, 2001 TO: Honorable Frank Madla, Chair, Senate Committee on Intergovernmental Relations FROM: John Keel, Director, Legislative Budget Board IN RE: SB740 by Bernsen (Relating to certain diseases or illnesses suffered by a firefighter.), As Introduced ************************************************************************** * No fiscal implication to the State is anticipated. * ************************************************************************** The bill would require a political subdivision, including a home-rule municipality, to reimburse a firefighter in their employ for reasonable medical expenses in the treatment of lung disease or cancer if the disease results in total disability or death or for hypertension or heart disease that results in partial or total disability or death. Under the provisions of the bill, it would be assumed that the firefighter contracted the disease as a result of their firefighter duties if their physical examination on entering or during employment did not reveal any evidence of the illness or disease. If cancer is contracted within five years of having left employment with the fire department, the political subdivision would still be responsible for the medical expenses under the assumption that the cancer was a result of the firefighter's exposure to cancer causing agents on the job. The political subdivision could rebut the claim that the illness or disease was job-related by showing through a preponderance of the evidence that a risk factor, accident, or hazard not associated with firefighting caused the person's illness or disease. Local Government Impact The bill would shift medical compensation for lung and heart disease and cancer contracted by a firefighter from regular medical benefits to worker's compensation, thus shifting the cost from the firefighter and their health insurance provider to the political subdivision. The cities of McKinney and Richardson responded to an inquiry about the potential fiscal impact. A representative from McKinney (population approximately 54,000; firefighter staff of 54) reported that their firefighters had filed 60 worker's compensation claims since 1994, although the majority of those were a result of back injuries and none were related to lung disease, heart disease, or cancer. The cost to the city of the claims that were filed was over $158,000. The city did not have records on how many, if any, firefighters from their department had contracted any of the applicable diseases. The city anticipates that if just one firefighter were to file a worker's compensation claim under the provisions of the bill, the cost to the city would be quite significant. A representative from Richardson (population almost 75,000; firefighter staff of 138) stated that their worker's compensation claims administrator reports the cost associated with treating the diseases listed in the bill usually exceed $100,000 per case. The representative from Richardson estimated, based on existing staff and what would otherwise be the firefighter's out of pocket expense, that the city could potentially experience a loss of $241,500 per year. If a political subdivision were to have to prove the firefighter's lifestyle or other risk factors not related to the job were the cause of the firefighter's illness or disease, the political subdivision would also incur expenses associated with investigating and rebutting the claim. The fiscal impact to political subdivisions that employ firefighters would depend on the number of claims filed and upheld against any rebuttals by the political subdivision; the minimum cost for medical expenses expected per claim would be $100,000. It is anticipated that for all but the largest political subdivisions, this amount would be very difficult to absorb. It is presumed the larger entities, however, with a higher number of firefighting staff and firefighter response calls, would have an increased potential for number of claims and would also find the fiscal impact to be significant, as it would likely be more than $100,000 annually. Source Agencies: 325 Fire Fighters Pension Commission, 411 Texas Commission on Fire Protection LBB Staff: JK, DB