LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 28, 1995
TO: Honorable John Smithee, Chair IN RE: Committee Substitute
Committee on Insurance for
House of Representatives House Bill
Austin, Texas No. 3111
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
3111 (relating to the delivery of health care by certain
nonprofit health corporations) 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 by adding a new article
to establish a certification process for nonprofit health
corporations. The bill would authorize the Commissioner of
Insurance to adopt necessary rules, establish certification fees
not to exceed actual cost or $1,000, require copies of contracts
to be submitted, and order the filing of monthly reports for the
monitoring of financial security. The bill also provides for the
appointment of a new advisory committee.
Implementation of the provisions of the bill would result in
fiscal implications. Recent information indicates that there are
currently 126 approved nonprofit health corporations, of which
approximately 72 could be expected to seek certification as a
health maintenance organization. Additional agency resources
would be needed for rule adoption proceedings, certifications,
financial monitoring, advisory committee assistance and
compliance enforcement activities. Additional revenue would be
generated from filing fees for certifications and renewals as
well as for the filing of contracts, amendments and other
documents for review and approval.
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 $786,704 $352,500 16.0
1997 652,600 352,000 14.0
1998 550,936 252,000 12.0
1999 550,936 252,000 12.0
2000 550,936 252,000 12.0
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: Department of Insurance
LBB Staff: JK, RM