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F I S C A L I M P A C T R E P O R T

SPONSOR Chasey

ORIGINAL DATE

LAST UPDATED

1-31-2007

HB 353

SHORT TITLE Veterans’ Service Dept. Lung Cancer Detection

SB

ANALYST Dearing

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$1,300.0 Nonrecurring Tobacco Settlement

Program Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring or

Non-Rec

Fund

Affected

Total

*$133.0

Nonrecurring

Tobacco

Settlement

Program Fund

*Please see narrative

Duplicates SB304

Relates to HB89 and HB90

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Veterans’ Services Department (VSD)

SUMMARY

Synopsis of Bill

House Bill 353 appropriates $1.3 million for expenditure in FY08 from the Tobacco Settlement

Program fund to Veterans’ Services department to contract with an organization to provide

validation of diagnostic technology for the early detection of lung cancer. The contract would

provide funding for a longitudinal study administered by the department. The non-invasive

House Bill 353 – Page

2

diagnostic method mentioned in the bill was recently developed in New Mexico. Participants in

the study would number approximately 2500 New Mexico resident veterans.

FISCAL IMPLICATIONS

The appropriation of $1.3 million contained in House Bill 353 is a nonrecurring expense to the

Tobacco Settlement Program fund. Any unexpended or unencumbered balance remaining at the

end of FY08 shall revert to the Tobacco Settlement Program fund.

In addition to the contract’s expense, Veterans’ Services department has stated a need for 2 FTE

in the event that House Bill 353 is enacted. The $1.3 million for programming from the Tobacco

Settlement Program fund is for a nonrecurring study, however, the department does not state

whether additional FTE would be classified as term positions, and whether these would be paid

through the

Tobacco Settlement Program appropriation

.

The estimate of $133 thousand for 2 FTEs to provide budgetary and program oversight to the

department includes an Epidemiologist for oversight of the cancer study, estimated at $27 hourly

with 30 percent benefit costs, and a financial specialist at $22 hourly with 30 percent benefit

costs for budgetary oversight.

SIGNIFICANT ISSUES

Historical data from the National Cancer Institute shows that New Mexico’s mortality rate from

lung and bronchus cancer is significantly higher than the U.S. rates; per 100 thousand

population. According to the department of health, lung cancer is the leading cause of cancer

deaths in both men and women in the US and NM

1

. In general, lung cancer is detected at a point

in the course of the disease where curative methods are no longer successful. In as many as

thirty percent of the cases, by the time lung cancer is detected, it has spread to other organs or

systems. The NM-based contract company’s patented technology, a non-invasive cytology

based assay, is designed for cancer screening of large populations at a reasonable cost.

2

The

National Cancer Institute maintains that existing screening methods for lung cancer are effective

in decreasing mortality.

The National Cancer Institute states that at this point, neither chest X-rays nor spiral CT scans

have been shown to reduce a person's chance of dying from lung cancer. The National Cancer

Institute is conducting a comparison test, the National Lung Screening Trial, to determine

whether one of these methods is preferred for reducing deaths.

At an October Tobacco Settlement Interim Committee meeting the committee adopted a

recommendation for $1.3 million to the Veterans’ department for the first year of the clinical

program for detecting lung cancer in state veterans using a technology developed in New

Mexico.

The proposed language is specific in its criteria for participating contract organization.

1

NM Department of Health, attributed to the NM Cancer Plan, 2002-2006

2

Businesswire; http://biz.yahoo.com/bw/070117/20070117005258.html..v=1

House Bill 353 – Page

3

ADMINISTRATIVE IMPLICATIONS

If House Bill 353 is enacted, Veteran Services department indicates it will need 2 FTEs to

provide budgetary and program oversight. Veterans’ Services would be administrating funding

of the program.

DUPLICATION

House Bill 353 duplicates Senate Bill 304.

RELATIONSHIP

House Bill 353 relates to House Bills 89 and 90. House Bill 89 appropriates $150 thousand from

the general fund to the Indian Affairs department to promote tobacco cessation in southwestern

Cibola County, using traditional health services such as Navajo blessing way teachings, for

residents from the region near the Ramah Navajo community, while House Bill 90 appropriates

$100 thousand for the same purpose. Both proposed bills are recurring appropriations to the

general fund.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

If House Bill 353 is not enacted, there would be no appropriation from the Tobacco Settlement

Program fund for this longitudinal data study.

POSSIBLE QUESTIONS

Would passage of this act possibility violate the anti-donation clause of the New Mexico

Constitution, Article IV., Section 31, Appropriations for Charitable, Educational, etc. purposes.

PD/csd