LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION

April 30, 2007

TO:	Honorable Patrick M. Rose, Chair, House Committee on Human Services
FROM:	John S. O'Brien, Director, Legislative Budget Board
IN RE:	HB3575 by Rose (Relating to the monitoring and enhancement of health and human services information technology systems.), Committee Report 1st House, Substituted

Estimated Two-year Net Impact to General Revenue Related Funds for HB3575, Committee Report 1st House, Substituted: a negative impact of ($2,289,034) through the biennium ending August 31, 2009.

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
2008	($1,144,517)
2009	($1,144,517)
2010	($1,144,517)
2011	($1,144,517)
2012	$0

All Funds, Five-Year Impact:

Fiscal Year	Probable (Cost) from GENERAL REVENUE FUND 1	Probable (Cost) from GR MATCH FOR MEDICAID 758	Probable (Cost) from GR MATCH FOOD STAMP ADM 8014	Probable (Cost) from FEDERAL FUNDS 555
2008	($32,675)	($609,428)	($502,414)	($1,184,387)
2009	($32,675)	($609,428)	($502,414)	($1,184,387)
2010	($32,675)	($609,428)	($502,414)	($1,184,387)
2011	($32,675)	($609,428)	($502,414)	($1,184,387)
2012	$0	$0	$0	$0

Fiscal Analysis

The bill would amend Chapter 531 of the Government Code by adding Subchapter M which sets out goals for the enhanced eligibility system; requires the Health and Human Services Commission (HHSC) to develop an eligibility transition plan; directs the HHSC Office of Inspector General (OIG) to establish an independent validation and verification program for the eligibility system; directs the quality assurance team to establish a periodic monitoring schedule for the eligibility system; requires HHSC to identify the enhanced eligibility system as a major information resource project; creates a health and human services eligibility system legislative oversight committee; and sets the expiration of the subchapter as September 1, 2011.

The bill would take effect immediately upon two-thirds vote of both houses, or would take effect September 1, 2007.

The fiscal impact of the bill results from the estimated cost for the independent validation and verification contract that OIG may require.

Methodology

The current validation and verification contract has specific purposes and uses, and therefore the agency does not assume it can be modified to suit the purposes of the bill.  HHSC assumes that OIG would require a new contract and that it would cost approximately the same as the cost of the current contract, which is approximately $1.1 million in General Revenue and $1.2 million in Federal Funds per year (including federal Medicaid, TANF and Food Stamp funds).

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

529 Health and Human Services Commission

LBB Staff:

JOB, CL, PP, MB