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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

1-28-2008

HB 394

SHORT TITLE Veterans Lung Cancer Clinical Study

SB

ANALYST Dearing

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$1,300.0 Nonrecurring Tobacco Settlement

Program Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY08

FY09

FY10 3 Year

Total Cost

Recurring or

Non-Rec

Fund

Affected

Total

*$70.0 $70.0 $140.0

Nonrecurring

Tobacco

Settlement

Program Fund

*Please see narrative

Duplicates Senate Bill 404

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Veterans’ Services Department (VSD)

SUMMARY

Synopsis of Bill

House Bill 394 appropriates $1.3 million for expenditure in FY09 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

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

the study would number approximately 2500 New Mexico resident veterans.

House Bill 394 – Page

2

FISCAL IMPLICATIONS

The appropriation of $1.3 million contained in House Bill 394 is a nonrecurring expense to the

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

end of FY09 shall revert to the Tobacco Settlement Program fund.

In addition to the contract’s expense, Veterans’ Services department has stated a need for 1 FTE

in the event that House Bill 394 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 department requested one FTE for a liaison between the contractor and the department; the

estimate of $70 thousand for 1 FTE to provide program oversight to the department includes an

Epidemiologist for oversight of the cancer study, estimated at $27 hourly with 30 percent benefit

costs.

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.

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

ADMINISTRATIVE IMPLICATIONS

If House Bill 394 is enacted, Veteran Services department indicates it will need 1 FTEs to

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

of the program.

DUPLICATION

House Bill 394 duplicates Senate Bill 404.

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 394 – Page

3

RELATIONSHIP

House Bill 394 relates to the HAFC substitute for House Bill 2. The FY09 substitute includes

$50 thousand in general fund for this project for the department.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

If House Bill 394 is not enacted, there would be no appropriation from the Tobacco Settlement

Program fund for this longitudinal data study.

PD/mt