COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 2809-07
Bill No.: Truly Agreed to and Finally Passed HS for HCS for SCS for SB 810
Subject: Public Assistance: Energy
Type: Original
Date: June 12, 2002
FISCAL SUMMARY
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| General Revenue | ($89,896) to $104,703 | ($112,190) to $130,670 | ($116,679) to $135,897 |
| Escheats | (Unknown) | (Unknown) | (Unknown) |
| Utilicare Stabilization | Unknown | Unknown | Unknown |
| Total Estimated
Net Effect on All State Funds* |
($89,896) to $104,703 | ($112,190) to $130,670 | ($116,679) to $135,897 |
*Does not include possible savings from energy cost savings contracts.
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Federal* | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds* |
$0 | $0 | $0 |
Income and costs of $370,000 to $680,000 offset.
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 11 pages.
ASSUMPTION
UTILICARE PROVISIONS (660.100 to 660.136)
Officials of the Department of Health and Senior Services, the Department of Natural Resources and the Office of the State Treasurer stated that they could perform duties under terms of this proposal with existing resources.
Officials of the Department of Social Services' Division of Family Services (DFS) stated that they anticipate serving an increased number of consumers through the Low Income Energy Assistance Program (LIHEAP). This includes the Energy Assistance Program (EAP) DFS administers at its county offices and the Energy Crisis Intervention Program (ECIP), which is administered by Community Action Agencies, under contract with DFS.
DFS officials assume the proposal would remove restrictions requiring use of all obligated federal emergency funds before using appropriated Utilicare funds, new costs caused by this proposal would be general revenue obligations, and that DFS would continue to contract ECIP to Community Action Agencies.
133,149 households applied for Energy Assistance in FY 2001 and 110,133 households received aid. The average annual payment for Energy Assistance during FY 2001 was $240. The average ECIP payment was $338. DFS officials expect the average annual payment to households under this proposal to be $578.
The federal Division of Energy Assistance estimates that there are 545,559 households in Missouri which have incomes greater than 60% or less of state median income or 150% of the Federal Poverty Level guidelines (FPL). 229,254 of those households have income above 125% of FPL. Therefore 316,305 eligible households have incomes below 125% of the FPL. DFS officials estimate program costs due to this proposal as follows:
110,133 households assisted under current law/316,305 eligible households with incomes below 125% of FPL = 34.8% expected to be found eligible for services.
133,149 applicants\316,305 = 42.1% expected to apply for services.
545,559 x .348 = 189,885 new eligibles
189,885 x $578 average annual house hold payment = $109,736,190 program costs
$109,736,190 - $30,275,648 (federal funds expected) = $79,460,542 General Revenue costs.
ASSUMPTION (continued)
DFS officials anticipate needing new staff to handle increased numbers of applicants:
229,254 potential applicant households with incomes over 125% of FPL x 42.1% expected to apply = 96,516 new applicants.
Currently, the average caseload size for Energy Assistance Technicians is 3,026.
96,516/3,026 = 32 additional EA Technicians needed to maintain service at current levels. (NOTE: EA Technicians work November through April or 6 months of each year.) DFS would not request supervisory or staff support personnel.
Division of Family Services officials note that the proposal changes the definition of elderly from age 65 and over to age 60 and over. They do not yet have an estimate of how many additional households might become eligible due to this change.
They also note that the proposal retains the existing limit on appropriations from the General Revenue Fund and, therefore, would not anticipate the proposal requiring any additional funds.
DIVISION OF ASSETS (660.690)
Department of Social Services' Division of Family Services reported that 180 supplemental nursing care cases were rejected due to income or resources, in FY 2001. They estimate that 63 (35%) of those cases were married couples. They also report that 95.9% of supplemental nursing care patients reside in Residential Care I or II Facilities and 4.1% of those patients reside in Skilled Nursing Facilities. Therefore 60 of the new cases would be in Residential Care Facilities and 3 in Skilled Nursing Facilities.
The Department's Division of Senior Services provides case management services for clients receiving personal care services in Residential Care Facilities. Some of the 60 new cases would require case management; however, those case management services could be absorbed with existing staff at this time.
Division of Assets for RCF Residents:
The proposed legislation will have a fiscal impact on the DMS. More individuals will be Medicaid eligible if the division of assets is applied to persons living in a RCF.
The Division of Family Services estimates there are 64 individuals who would become Medicaid
eligible with the passage of this legislation. This includes 3 individuals who would live in a skilled nursing facility. It should be noted, the proposed legislation does not include Intermediate
ASSUMPTION (continued)
Care Facilities (ICF) and Skilled Nursing Facilities (SNF); however, they are part of the Supplemental Nursing Care program. Cost for residents living in a SNF are included in the fiscal impact. The costs are shown separately.
The cost per eligible is $656.40/month. The average is based on the last three months of actual expenditures - hospital, dental, physician services, personal care and rehabilitation & specialty services. (The RCF resident is not eligible for all home and community services - only personal care.)
RCF residents - 17 RCF I and 44 RCF II = 61 eligibles x $656.40 = $40,040.40 per month.
SNF residents - 3 x $656.40 = $1,969.20 per month.
A 4% inflation factor was applied to both FY 04 and FY 05.
FY 03:
RCF residents - $40,040.40 x 10 months = $400,404
SNF residents - $1,969.20 x 10 months = $19,692
Total $420,096
FY 04:
RCF residents - $41,642.02 x 12 months = $499,704
SNF residents - $2,047.97 x 12 months = $24,576
Total $524,280
FY 05:
RCF residents - $43,307.70 x 12 months = $519,692
SNF residents - $2,129.89 x 12 months = $25,559
Total $545,251
Due to the division of assets for married couples proposed in the legislation, individuals are provided the opportunity to enter an RCF I/II facility over and ICF/SNF nursing facility. We estimate that between 10% and 35% will choose RCF over a nursing facility resulting in a cost avoidance.
63 x 10% = 6.3 individuals or 6
63 x 35% = 22.05 individuals or 22
Medicaid nursing facility costs approximately $30,000 per individual per year.
ASSUMPTION (continued)
FY 03:
10% cost avoidance
SNF/ICF residents to RCF residents - ($30,000 x 6) x 10 months = $150,000
$60,000 - GR (40%)
$90,000 - FF (60%)
35% cost avoidance
SNF/ICF residents to RCF residents - ($30,000/yr x 22) x 10 months = $550,000
$220,000 - GR (40%)
$330,000 - FF (60%)
FY 04:
10% cost avoidance
SNF/ICF residents to RCF residents ($30,000/yr x 6) = $180,000 x 4% inflation = $187,200
$74,880 - GR (40%)
$112,320 - FF (60%)
35% cost avoidance
SNF/ICF residents to RCF residents - ($30,000/yr x 22) = $660,000 x 4% inflation = $686,400
$274,560 - GR(40%)
$411,840 - FF (60%)
FY 05:
10% cost avoidance
SNF/ICF residents to RCF residents ($30,000/yr x 6) = $180,000 x 4% inflation = $187,200 x 4% inflation = $194,688
$77,875 - GR(40%)
$116,813 - FF(60%)
ASSUMPTION (continued)
35% cost avoidance
SNF/ICF residents to RCF residents - ($30,000/yr x 22) = $660,000 x 4% inflation = $686,400 x 4% inflation = $713,856
$285,542 - GR(40%)
$428,14 - FF(60%)
Officials of the Department of Social Services' Division of Family Services stated that they anticipate 64 cases per year which would have been rejected would be accepted into Residential Care I Facilities (17 cases at $156/month + $25 Personal Needs Standard), Residential Care II Facilities (44 cases at $292/month + $25 Personal Needs Standard), and Skilled Nursing Care Facilities (3 cases at $390/month + $25 Personal Needs Standard).
Officials of the Division of Medical Services anticipates additional costs to Medicaid based on cost per eligible of $656.40/month (increased 4% per year for FY 2004 and FY 2005). They also assume that some of the persons turned down for Residential Care Facilities are going into nursing facilities. Since some persons going into nursing facilities would go into Residential Care Facilities (RCFs) instead, there would be a cost savings. Officials figured cost savings at 10% choosing RCFs over nursing facilities and 35% choosing RCFs over nursing facilities. They estimate the actual percentage each year would lie between 10% and 35%.
UTILITY REFUNDS (470.270)
Officials of the State Courts Administrator stated that the proposal would not affect their agency.
Officials of the Department of Social Services' Division of Family Services indicated that the proposal would provide additional resources for Energy Assistance Programs. They do not have information needed to estimate the amount of new funds which would be transferred into the Utilicare Stabilization Fund. However, they estimate that any new funds would be spent.
ENERGY COST SAVING PROVISIONS (8.231, 8.235 and 640.651)
Officials from the Office of Administration - Division of Design and Construction, Department of Higher Education, Department of Elementary and Secondary Education, Department of Health and Senior Services, University of Missouri, Truman State University, Central Missouri State University, and Southwest Missouri State University, in response to a similar proposal, assumed the proposed legislation would have no fiscal impact on their agencies.
ASSUMPTION (continued)
Officials from the Department of Natural Resources assume the proposed legislation would have no direct fiscal impact on their agency.
Oversight assumes the provision in the proposal that requires each guaranteed energy cost saving contract authorized pursuant to RSMo 8.235 to reduce estimated energy consumption by at least twelve percent or reduce the cost of energy and related savings by at least twelve percent will result in an unknown savings to General Revenue.
RESTRICTIONS ON ZONING (Section 1)
Oversight assumes that the restrictions on zoning would not have direct fiscal impact on municipalities.
| FISCAL IMPACT - State Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| GENERAL REVENUE FUND | |||
| Income - Transfer from Utilicare Stabilization Fund | $0 | $0 to Unknown | $0 to Unknown |
| Savings - (COA- Design & Construction) Minimum 12% Energy Reduction in Guaranteed Energy Cost Saving Contracts | Unknown | Unknown | Unknown |
| Department of Social Services | |||
| Cost - Increased Residential Care and Skilled Nursing Facility Cases | ($162,871) | ($203,263) | ($211,394) |
| Savings - Decrease Nursing Facility Cases | $72,975 to $267,574 | $91,073 to $333,933 | $94,715 to $347,291 |
| ESTIMATED NET EFFECT ON GENERAL REVENUE FUND* | ($89,896) to $104,703 | ($112,190) to $130,670 | ($116,679) to $135,897 |
| *Does not include possible transfers from the Utilicare Stabilization Fund or possible savings from guaranteed energy cost savings contracts. | |||
| UTILICARE STABILIZATION FUND | |||
| Income - Refunds of Natural Gas or Electric Rates | Unknown | Unknown | Unknown |
| Cost - Transfer to General Revenue Fund | $0 | ($0 to Unknown) | ($0 to Unknown) |
| ESTIMATED NET EFFECT ON UTILICARE STABILIZATION FUND | Unknown | Unknown | Unknown |
| ESCHEATS FUND | |||
| Loss - Refunds of Natural Gas or Electric Rates | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON ESCHEATS FUND | (Unknown) | (Unknown) | (Unknown) |
| FEDERAL FUNDS | |||
| Income/Loss of Federal Matching Funds | $372,475 to $679,809 | $464,849 to $848,402 | $483,443 to $882,337 |
| Increase/Decrease in Medicaid Spending | ($372,475 to $679,809) | ($464,849 to $848,402) | ($483,443 to $882,443) |
| ESTIMATED NET EFFECT ON FEDERAL FUNDS | $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
Small businesses which sell heating fuels would probably be positively affected as a result of this proposal.
DESCRIPTION
This proposal would change the Utilicare program. Some of the changes are as follows:
1) a household would qualify for Utilicare aid if household income were one hundred and fifty percent (150%) or less of current federal poverty guidelines (currently household income may not exceed 110% of those guidelines) or if household income did not exceed 60% of the state median DESCRIPTION (continued)
income;
2) the $150 limit on payments to eligible households would be repealed;
3) the limit on total payments for cooling assistance in any single cooling season (the lesser of 5% of the amount appropriated to the Utilicare Stabilization Fund for the most recent fiscal year or $500,000) would be removed from law;
4) the limitation on using general revenue for reconnecting or maintaining service to eligible households which have had service disconnected until federal emergency funds for those services have been obligated would be removed;
5) low-income weatherization projects partly funded with utilicare funds, in coordination with Department of Natural Resources' low income weatherization assistance program, would comply with federal guidelines (currently, such projects must have a full energy savings payback period of no more than ten years);
6) Department of Social Services would coordinate all federal heating assistance programs into the Utilicare program; and
7) the sources of income for and uses of the Utilicare Stabilization Fund would be changed.
This proposal would also require the Division of Family Services to do a division of assets for married couples when determining eligibility for supplemental nursing care payments when one
spouse is living in a residential care facility.
This proposal would require the transfer of natural gas or electric rate refunds to the Utilicare Stabilization Fund if the refunds remain unclaimed for five years. Under current law, these funds escheat to the state of Missouri.
Transferred funds that not used for heating or cooling assistance within one year would revert to general revenue.
This proposal would allow the Division of Design and Construction to contract for guaranteed energy cost savings. Contractors must be selected based on experience, capability, past performance and proximity of the firm. This proposal requires each guaranteed energy cost saving contract authorized pursuant to RSMo 8.235 shall reduce estimated energy consumption by at least twelve percent or reduce the cost of energy and related savings by at least twelve percent. This proposal expands the definition of schools to include state colleges and universities which makes them eligible to borrow money for energy conservation projects. This proposal also DESCRIPTION (continued)
expands the length of loans made by the Department of Natural Resources for energy conservation projects to ten years if the useful life of the life of the conservation measure exceeds ten years. Currently, loans may be made for a maximum of eight years.
This proposal would forbid city legislatures from passing zoning laws which would prevent 501(c)(3) from operating retail businesses in any area where other retail businesses are allowed to operate.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. This legislation would not affect Total State Revenue.
SOURCES OF INFORMATION
Department of Natural Resources
Department of Health and Senior Services
Department of Social Services
Mickey Wilson, CPA
Acting Director
June 12, 2002