The    Honorable           R.     T.    Weber,        D. D.S.                      Opinion            No.     H-41
Secretary-Treasurer,                      Texas       State
Board        of Dental      Examiners                                              Re:          The         right    of a Dental
Capital       National         Bank      Bldg.                                                  Association             to regulate
Austin,         Texas     78701                                                                 the     relationship            between
                                                                                                the licensed            dentist,      the
                                                                                                patient,            and a third     party
                                                                                                with whom             the patient      has
                                                                                                contracted            to provide       den-
                                                                                                tal    care         to members        of his
Dear      Dr.     Weber:                                                                        Group.


       You      have    requested         the opinion          of this     office        with     regard            to a suggested
amendment              to the Texas          Non-Profit          Corporation             Act.          Article        1396-2.     OlA(l),
Vernon’s         Texas      Civil       Statutes,        currently        provides             in part        as follows:


                      “Charitable         corporations            may     be formed             for     the
             purpose        of operating            a Dental         Health      Service         Corpor-
             ation      which      service        corporat.ion          will     manage         and
             coordinate           the    relationships         between          the contracting
             dentist,      who will. perform                  the dental         services,            and
             the patient          who will.       receive        such    services          where            such
             patient      is a member             of a group          which       has     contracted
             with      the Dent~al Heal.th            Service        Corporation               to pro-
             vide      dental     care     to members             of that       group      .    . .     .
             A corporation              formed       hereunder           shall     maintain            not
             less      than t.hirt.y percent:            (30%)       of the number              of den-
             tists     actually         engaged      in the practice             of dentistry
             in th,is     state     as pa~rt:icipat,ing          or contracting                den.-
             tists,      and    shal,l file       with    t,he Texas           State    Board          of
             Dent.al      Examiners           each       Septem’ber        the names             and add-
             resses       of all       contract.ing       or participating               dentists.           ”


The     suggested         amendment              would      add rhe foll,owing             language              as Article
1396-2.      OlA(2),       V. T. C.S.:




                                                         p.    166
The     Honorable             Dr.     R.     T.     Weber,          page     2     (H-41)




                       “Nothing        contained            in Article           1396-2.      01 shall        be
             construed              to limit        the authority           of any Dental              Assoc-
             iation       with       at least        70%     of the dentists               legally      en-
             gaged        in the practice                 of Dentistry            in this      State     from
             establishing              a committee              or    council            or unincorporated
             association              or     corporation            with    full     authority         to reg-
             ulate,        contract,           manage,            control        and coordinate               the
             relationship              between            the licensed           dentist,         who will
             perform            the    services,            and the patient                who will         receive
             such        services,           and a third            party        with     whom       the patient
             has       contracted            to provide           dental     care         to members              of
             his       Group.          The     Dental        Association             may      form      a cor-
             poration           for    the above           purposes          under         this    Article
             or    it may         provide           such     services        through          the Texas
             Dental        Association.              ”


      Any     Dental          Health         Service        Corporation             (DHSC)           established           under
Article      1396-2.          OlA(1)        must     maintain          at least          thirty     percent         participation
of all practicing               dentists.            It has       the authority             to contract            with    groups
to provide             dental       care     to members              of such        groups,          care        to be provided
by the participating                   dentists.            Such      DHSC         is,     therefore,            a third    party
given     the authority               to “manage             and coordinate”                 the relationship               bet-
ween      the participating                  dentist        on the one           hand      and the group               member-
patient      on the other.                  The     two     classes         of parties            subject        to its    manage-
ment      enter        that     relationship              voluntarily,            by contractual              agreement.


       The    suggested               amendment             would      allow        the creation            of an organization
(a committee              or     council          or unincorporated                  association            or     corporation)
which     would          have       “full     authority        to regulate,                contract,        manage,          control
and coordinate”                 relationships               among       the designated                parties.            Those     parties
are     of three         classes           rather      than the two              subject      to DHSC            management.


       The    first       subject          party     is    “the      licensed        dentist,         who will         perform        the
services.          ”    Any      dentist       who        is to perform             the     services          to the designated
individuals,             whether            or not he isamember                      of the Dental               Association,          is
to be made              subject       t:o its full         authority        to regulate            and control,.




                                                               p.    167
The     Honorable             Dr.    R.      T.     Weber,              page      3     (H-41)




        The      second       subject        party         is     “the     patient           who will         receive            such         services.          ”


        There        is no requirement                     of any         relationship,                contractual               or    otherwise,,
between          the patient         and the Dental                     Association              to whose            authority           the patient,
in his     relationship             with      his        dentist,         is to be made                 subject.


        The   third       party       subject            to the Association’s                        authority         is that          “third        party
with     whom        the patient            has     contracted                 to provide            dental       care       to members
of his     Group,        ” that       is,    the party             which         provides             the link.between                   the dentist
and the group             member            -patient,             a party         which,         like       the dentist               and patient,
does      not necessarily                  stand     in any contractual                         or    other      relationship                 with        the
Association.


        One      such    third      party         would         therefore              be any         DHSC        organized               under
Article       1396-2.         OlA(l),        V. T. C. S.                The      suggested            amendment                  could        con-
ceivably          subject       a DHSC            of exactly              30%     of the practicing                   dentists           of the
State     and their           patients        to the            “full     authority           to regulate,              contract,              manage,
control       and coordinate”                 their         internal            contractual             relationships                  of a council
established             by a Dental           Association                 made          up exclusively                of the other               70%
of the practicing                dentists          of the State..                It thus        appears          that       the       effect      of the
suggested            amendment              would         be to permit                 a private            sector       of the population
to establish            an      organization               with         independent             powers           to regulate              contrac-
tual     relations           among      other        elements              of the public               with      whom            it stands           in
no contractual               relationship.


        The      creation       of an organization                        so empowered                  would         be in effect               an
attempted            delegation         of legislative                   powers,         in violation            of Art,icle             2,     $1 and
Article       3,     § 1 of the Constitution,                           to a private            organization.                    Such     an attempted
delegation           would      be unconstitutional                        and void.             Trimmier              v.    Carlton,             296       S. W.
1070     (1927);        Texas       National             Guard          Armory           Board         v.    McGraw,              126 S. W. 2d 627
(Tex.     , 1939);        Davis       v.     City        of Lubbock,                  326     S. W. 2d 699            (Tex.,           1959);         Daniel
v.     Tyrrell       & Garth          Inv.        Co.,         93 S. W. 2d 372                (1936);        Brown          v.    Humble              Oil
& Ref.        Co.,       83 S. W. 2d 935                  (1935),         reh.        den.     87 S. W. 2d 1069;                  Calvert            v.
Capital       Southwest             Corp.,          441 S. W. 2d 247                    (Tex.        Civ.App.,           Austin,              1969,       writ   ref.
n. r. e.),       appeal       dismissed,                 397     U. S.         321.


                                                                   Very         truly        yours,




                                                                   JOHN          L.     HILL
                                                                   Attorney             General         of Texas


                                                                 p.      168
The   Honorable    Dr.    R.   T.   Weber,   page   4   (H-41)




APPF$$JED:




DAVID     M.   KENDALL,        Chairman
Opinion   Committee
