LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 11, 1995
TO: Honorable John T. Smithee, Chair IN RE: House Bill No. 1194
Committee on Insurance By: Berlanga
House of Representatives
Austin, Texas
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 preferred provider organizations and
dental preferred 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 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 bill would create a dedicated revenue source in the State
Treasury. The creation and/or continuation of special funds and
dedicated revenue sources outside the General Revenue Fund could
further restrict the ability of the legislature to appropriate
revenues for general state operating purposes.
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
Fund 036
1996 $197,328 $130,000 3.5
1997 148,946 150,000 3.0
1998 148,946 150,000 3.0
1999 148,946 150,000 3.0
2000 148,946 150,000 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