LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                           May 3, 1995



 TO:     Honorable John Smithee, Chair          IN RE: Committee Substitute
         Committee on Insurance                 for
         House of Representatives                              House Bill
         Austin, Texas                          No. 1194










FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
1194 (relating to the establishment, certification, organization,
and regulation of dental provider organizations and dental
provider plans) this office has determined the following:

The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.

The bill would amend the Insurance Code to regulate dental
preferred provider organizations and dental preferred provider
plans.  Under current law, preferred provider organizations and
plans are unregulated by any state authority.  The bill would
require the Department of Insurance to issue certificates of
authority for dental preferred provider organizations and plans
and the bill specifies maximum filing fees for the associated
applications, reports and schedules.  Implementation of the
provisions of the bill would require additional resources for new
Department of Insurance responsibilities, including adoption of
new policy rules, licensing and certification for authority to do
business, and financial solvency examinations and monitoring.

Revenue gains resulting from implementation of the bill cannot be
estimated accurately because the number of dental preferred
provider organizations that would apply for and receive
certification is not known.   However, the Department anticipates    




that the related fees would be set, as provided by the bill, to
cover costs of administering the program with the possible
exception of first year start up costs.  Cost and revenue 
projections are based on an assumption that at least 50 preferred
provider organizations would receive program certification.

The probable fiscal implication of implementing the provisions of
the bill during each of the first  five years following passage
is estimated as follows:
     



            Fiscal  Probable Cost Out   Probable Revenue      Change in    
             Year   of Department of          Gain         Number of State 
                        Insurance       to Department of    Employees from 
                        Operating          Insurance           FY 1995     
                         Fund 036          Operating                       
                     GR Consolidated       Fund 036                        
                                        GR Consolidated                    
                                                                           
          1996                $197,328           $200,000               3.5
          1997                 148,946            175,000               3.0
                                                                           
          1998                 148,946            175,000               3.0
                                                                           
          1999                 148,946            175,000               3.0
          2000                 148,946            175,000               3.0
                                                                           
                                                                           
                                                                           
       Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.

No fiscal implication to units of local government is
anticipated.


Source:   Comptroller of Public Accounts, Department of
Insurance,
                          State Board of Dental Examiners
          LBB Staff: JK, RM, RR