LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session Revision 1 April 23, 2001 TO: Honorable David Cain, Chair, Senate Committee on Administration FROM: John Keel, Director, Legislative Budget Board IN RE: SB844 by Fraser (Relating to assessment of the impact of proposed health care benefit mandates and offer of coverage mandates.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB844, As Introduced: negative impact of $(860,150) 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. * ************************************************************************** This bill creates a impact assessment on health care benefit mandates and offer of coverage mandates to be done by the Legislative Budget Board (LBB). During the legislative session, the LBB would create impact assessments when requested by the chair of a committee. The LBB has 21 days to produce the impact assessment, and the impact assessment is to remain with the bill throughout the legislative process, including submission to the governor. There are certain requirements for the content and creation of the impact assessment. During the interim, the LBB would analyze mandates and offer of coverage mandates that will expire and would make recommendations on the continuation or modification of these mandates and offer of coverage mandates to the Legislature. General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(189,145) * * 2003 (671,005) * * 2004 (191,005) * * 2005 (671,005) * * 2006 (206,005) * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Savings/(Cost) from * * General Revenue Fund * * 0001 * * 2002 $(189,145) * * 2003 (671,005) * * 2004 (191,005) * * 2005 (671,005) * * 2006 (206,005) * ***************************************************** Technology Impact Computer hardware and software for additional FTE's. Fiscal Analysis The requirement that the LBB conduct impact assessments of proposed mandated health benefits or offer of coverage mandates within 21 days will result in costs to the Legislative Budget Board. These costs include additional staff and associated costs, and costs to contract for professional services. The requirement to assess certain health care benefit mandates and offer of coverage mandates during the interim will also result in costs to the LBB. The bill would become effective September 1, 2001. Methodology This estimate assumes that the Legislative Budget Board will hire internal staff before the 78th Legislative session, and would provide impact assessments beginning with the 78th Legislative session (2003). The estimate assumes that data will be available to conduct the assessments, and that the Legislative Budget Board will be able to contract for professional services for the analysis, and would not have to purchase any data. This estimate also assumes that impact assessments will be requested only on bills that contain mandated health benefit proposals or offer of coverage mandates. The estimate for the cost of the impact assessments are calculated as follows: it is assumed that there will be about 30 mandates introduced in each legislative session; that of those 30, about 75 percent will require an impact assessment; that subsequent legislative activity on the bills will require approximately 11 additional updated impact statements; and that each impact assessment will cost $15,000. For the analysis conducted during the interim, it is assumed that there will be no health benefit mandates or offer of coverage mandates that will need to be reviewed in 2002. Thereafter, it is assumed that there will be one review in 2004 and 2 reviews in 2006. The analysis cost for each assessment during the interim is assumed to be $15,000. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 454 Texas Department of Insurance, 327 Employees Retirement System, 304 Comptroller of Public Accounts LBB Staff: JK, SD, AD