Can Texas require nursing home license applicants to disclose their past record?

Plain-English summary

Texas licenses the businesses that run nursing homes. The Department of Health wanted to tighten up that licensing by adopting new rules: anyone applying for a license to operate a nursing facility would have to disclose its history in the business, including whether it had a license denied or revoked before (in Texas or any other state), whether Medicare or Medicaid had ever decertified a facility it ran, and whether it had any criminal convictions. The rules would also let the department turn down an applicant with a "bad track record." Lieutenant Governor Bob Bullock asked the Attorney General a simple legal question: did the Department of Health actually have the authority to adopt those rules?

The Attorney General concluded yes. The starting point is a familiar limit on government agencies: an agency can do only what the legislature has authorized, either expressly or by necessary implication, and it cannot write rules that conflict with the statutes. So the question was whether the legislature had given the Board of Health enough authority. The opinion found that authority in chapter 242 of the Health and Safety Code, the part of the law that governs nursing-home licensing.

Two pieces of chapter 242 did the work. One section lets the board set minimum standards for the qualifications of the people responsible for the care residents receive. Another tells the department to issue a license only when the applicant and the facility meet the chapter's requirements. The opinion read both grants broadly. A rule requiring an applicant to disclose its prior nursing-facility history is just a way for the department to investigate the applicant's qualifications, and a rule letting the department deny a license to an applicant who falls short of the department's standards fits squarely within the instruction to license only qualified applicants. Putting those together, the opinion concluded chapter 242 gave the board enough authority to adopt the proposed rules.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. Texas long-term-care licensing has since been reorganized (regulation of nursing facilities moved among agencies, and is now handled largely by the Health and Human Services Commission rather than the Department of Health), the Administrative Procedure statute cited here (V.T.C.S. art. 6252-13a) was recodified into the Government Code, and the specific Administrative Code sections have been amended, so confirm current law before relying on anything described here.

Background and statutory framework

The question concerned proposed rules published in the Texas Register (proposed sections 145.13 and 145.17 of title 25 of the Texas Administrative Code; Tex. Dep't Health, 17 Tex. Reg. 7314-16 (1992)). If adopted, the rules would require a nursing-facility license applicant to disclose certain information about its prior involvement in operating nursing facilities, including any previous denial or revocation of a license in this or another state, any Medicare or Medicaid decertification of a facility the applicant operated, and any previous criminal convictions; the rules would also authorize the department to deny a license to an applicant with a "bad track record." (As proposed, the rules reached related criminal-history information about persons controlling the facility, the lessor, officers, affiliates, and the facility manager, and the term "facility" was defined to include nursing facilities and certain maternity and mental-retardation facilities; the opinion referred for convenience only to the applicant's past nursing-facility involvement.)

The limits on agency rulemaking. The opinion restated the governing rule: a state administrative agency has only the powers the legislature expressly confers by statute, together with those that can necessarily be implied, and may not promulgate a regulation that imposes burdens, conditions, or restrictions exceeding or inconsistent with statutory provisions (AG Opinion JM-1017 (1989)). Whether a regulation is valid under a specific statutory authorization, or is implicitly authorized to effectuate an expressly granted power, depends on the particular question (AG Opinion H-949 (1977)).

The authority the department invoked. The department relied on V.T.C.S. article 6252-13a, section 5 (the rulemaking procedure the Board of Health must follow, which the opinion said it need not assess here), section 12.001 of the Health and Safety Code, and chapter 242. Section 12.001 gives the board general powers and duties, including, under subsection (a), "general supervision and control over all matters relating to the health of the citizens of this state," and, under subsection (b)(1), authority to adopt rules governing its own procedure and the performance of duties the law imposes on the board, the department, and the Commissioner of Health.

Chapter 242 supplies the authority. The opinion focused on chapter 242, which governs nursing-home licensing. Section 242.032(b) authorizes the department to require evidence from a license applicant that the applicant can comply with the standards and rules adopted or established under the chapter. Section 242.033(a) requires the department to issue a license if it determines that the applicant and facilities meet the chapter's requirements (see also Health & Safety Code § 242.061(a)). Various sections of chapter 242 either set requirements or authorize the board to adopt and enforce regulations a nursing-home licensee must follow (for example, § 242.012(a), adherence to Human Resources Code ch. 102; § 242.037, minimum standards for construction, sanitary conditions, and residents' dietary needs; § 242.039, compliance with the 1985 Code for Safety to Life from Fire in Buildings and Structures; § 242.152, regulation of medication administration). Most significantly, section 242.037(2) authorizes the board to adopt and enforce minimum standards relating to the "qualifications of all" licensed and unlicensed persons responsible for any part of the care given to residents. The opinion concluded this authorization is broad enough to encompass the proposed rules, because they give the department a means to investigate an applicant's qualifications to operate a nursing facility based on the applicant's prior involvement in operating such facilities. And because section 242.033(a) directs the department to license only applicants meeting the chapter's requirements, the opinion concluded that provision is broad enough to support rules empowering the department to deny a license when an applicant's prior involvement shows it does not meet departmental standards. The opinion therefore concluded chapter 242 provides the board sufficient authority to promulgate the proposed regulations.

Common questions

Could the Texas Board of Health adopt these nursing-home licensing rules?
The opinion concluded yes. It found that chapter 242 of the Health and Safety Code gave the board enough authority to require disclosure of an applicant's history and to deny licenses based on a poor track record.

What would the proposed rules have required applicants to disclose?
Their prior involvement in operating nursing facilities, including past license denials or revocations in Texas or another state, Medicare or Medicaid decertifications of facilities they operated, and previous criminal convictions.

Where did the board's authority come from?
Primarily two parts of chapter 242: section 242.037(2), letting the board set minimum standards for the qualifications of persons responsible for resident care, and section 242.033(a), directing the department to license only applicants who meet the chapter's requirements.

Can a state agency adopt any rule it thinks is a good idea?
No. The opinion restated that an agency has only the powers the legislature expressly grants or that are necessarily implied, and cannot adopt rules that conflict with statutes. The rules here were valid because chapter 242 authorized them.

Citations

• V.T.C.S. art. 6252-13a, § 5 (board rulemaking procedure)
• Health & Safety Code § 12.001 (board general powers and duties); ch. 242 (nursing-home licensing); §§ 242.032(b), 242.033(a), 242.061(a) (license-issuance requirements); §§ 242.012(a), 242.037 (incl. (2)), 242.039, 242.152 (minimum standards and required compliance)
• Human Resources Code ch. 102
• 25 T.A.C. §§ 145.13, 145.17 (proposed); §§ 145.2, 145.3, 145.11, 145.12, 145.14, 145.23 (related/repealed sections); Tex. Dep't Health, 17 Tex. Reg. 7311-16 (1992)
• Attorney General Opinions JM-1017 (1989), H-949 (1977)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0201
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1993/dm0201.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; some footnote text quoting proposed regulatory definitions was partly illegible in the scan and is summarized in brackets where noted. The linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

January 28, 1993

Honorable Bob Bullock
Lieutenant Governor of Texas
P.O. Box 12068
Austin, Texas 78711-2068

Opinion No. DM-201

Re: Authority of the Texas Department of Health to enact rules regarding nursing facilities (RQ-465)

Dear Governor Bullock:

You have asked us whether the Texas Department of Health (the department) is legally authorized to enact the regulations currently proposed in the Texas Register. We understand you specifically to ask about proposed sections 145.13 and 145.17 of title 25 of the Texas Administrative Code. See Tex. Dep't Health, 17 Tex. Reg. 7314-16 (1992). If promulgated, these regulations will require an applicant for a license to operate a nursing facility to disclose certain information regarding the applicant's prior involvement in the operation of nursing facilities, including any previous denial or revocation of a license to operate a facility¹ in this or another state, any Medicare or Medicaid decertification of any facility that the applicant operated, and any previous criminal convictions. Further, the proposed regulations will authorize the department to deny a license if the applicant has a "bad track record."²,³

An administrative agency of the state has only those powers that the legislature expressly confers upon the agency by statute, together with those powers that necessarily can be implied from the statute. Attorney General Opinion JM-1017 (1989) (and sources cited therein). An agency may not promulgate a regulation that imposes burdens, conditions, or restrictions that exceed or are inconsistent with statutory provisions. Id. Whether a regulation is valid under some specific statutory authorization or is implicitly authorized to effectuate an expressly granted power depends upon the particular question involved. Attorney General Opinion H-949 (1977) at 2.

The department proposes to promulgate these sections pursuant to the authority granted it in V.T.C.S. article 6252-13a, section 5; section 12.001 of the Health and Safety Code; and chapter 242 of the Health and Safety Code. Article 6252-13a, section 5, V.T.C.S., provides the procedure the Texas Board of Health (the board) must follow to properly adopt regulations. For purposes of this opinion, we need not determine whether, in proposing these regulations, the board has adhered to V.T.C.S. article 6252-13a, section 5.

Section 12.001 of the Health and Safety Code provides the board with general powers and duties. Subsection (a) provides the board with "general supervision and control over all matters relating to the health of the citizens of this state." Subsection (b)(1) authorizes the board to adopt rules to govern its own procedure and the performance of each duty the law imposes on the board, the department, and the Commissioner of Health.

Two provisions in chapter 242 of the Health and Safety Code are particularly relevant to the board's proposed regulations. Section 242.032(b) authorizes the department to require evidence from a license applicant that the applicant will be able to "comply with the standards and rules adopted [or] established under this chapter." Section 242.033(a) requires the department to issue a license if it determines that "the applicant and facilities meet the requirements established under this chapter." See also Health & Safety Code § 242.061(a). In various sections of chapter 242, the legislature either establishes requirements or authorizes the board to adopt and enforce regulations with which a nursing home licensee must comply. See, e.g., Health & Safety Code §§ 242.012(a) (requiring each institution to adhere to Hum. Res. Code ch. 102), 242.037 (authorizing board to adopt and enforce minimum standards relating to various aspects of nursing home administration, including construction of institution, sanitary conditions in and around institution, and dietary needs of each resident), 242.039 (requiring licensee to comply with 1985 edition of Code for Safety to Life from Fire in Buildings and Structures), 242.152 (requiring board to regulate administration of medication); 25 T.A.C. §§ 145.13, 145.14, 145.23.⁴ We assume that to the extent possible an applicant must produce evidence that it can comply with the same statutory requirements as the regulations.

Significantly, section 242.037(2) of the Health and Safety Code authorizes the board to adopt and enforce minimum standards relating to the "qualifications of all" licensed and unlicensed "persons responsible for any part of the care given to the residents." In our opinion, this authorization is broad enough to encompass the proposed regulations, because the regulations provide the department a means by which it can investigate an applicant's qualifications to operate a nursing facility based upon the applicant's prior involvement in the operation of nursing facilities. Furthermore, section 242.033(a) requires the department to issue a license to operate a nursing facility only if the applicant meets "the requirements established under this chapter." We believe this provision is broad enough to encompass the proposed regulations because the regulations empower the department to deny a license to an applicant if, due to the applicant's prior involvement in the operation of nursing facilities, the applicant does not meet departmental standards. In conclusion, therefore, we believe that chapter 242 provides the board sufficient authority to promulgate the proposed regulations.

SUMMARY

The Texas Board of Health is authorized to enact regulations requiring an applicant for a license to operate a nursing facility to disclose certain information regarding the applicant's prior involvement in the operation of nursing facilities. Additionally, the board is authorized to enact regulations that will empower the Texas Department of Health to deny a license based on information the department has received regarding the applicant's prior involvement in the operation of nursing facilities.

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

¹ In the context of the proposed regulations, "facility" includes a nursing facility. Tex. Dep't Health, 17 Tex. Reg. 7311-12 (1992) (to be codified as 25 T.A.C. § 145.3). Proposed section 145.2(b) defines "facility" as [an establishment that provides food, shelter, and nursing care to four or more persons unrelated to the proprietor of the establishment, under the direction and supervision of a physician licensed by the Texas State Board of Medical Examiners or another authorized person; the regulatory text of the definition was partly illegible in the scan]. A nursing facility may be a building, which may contain one or more floors or one or more units, or may be a distinct part of a hospital. Id. at 7311; see also id. at 7312 (to be codified as 25 T.A.C. § 145.3) (defining "nursing facility").

² "Facility" also encompasses a maternity facility and a facility serving persons with mental retardation or a related condition. See id. at 7311 (to be codified as 25 T.A.C. § 145.3) (defining "facility"); id. (to be codified as 25 T.A.C. § 145.2(c), (d)) (defining "maternity facility" and "facility serving persons with mental retardation or related conditions").

³ The proposed regulations also require the applicant to disclose certain criminal history of persons who will control the nursing facility, the facility lessor, officers, affiliates, and facility manager. Tex. Dep't Health, 17 Tex. Reg. 7314 (1992) (to be codified as 25 T.A.C. § 145.13(d)). Additionally, the proposed regulations require or authorize the department to deny an application for a license based on the criminal convictions of the facility manager, affiliate, or license holder. Id. at 7315 (to be codified as 25 T.A.C. § 145.17(e)(1), (2)). For the sake of convenience, we will refer only to the applicant's past involvement in the operation of nursing facilities.

⁴ The department proposes to repeal sections 145.13, 145.14, and 145.23 of title 25, Texas Administrative Code. See Tex. Dep't Health, 17 Tex. Reg. 7312-13 (1992). Apparently, proposed sections 145.11 and 145.12 of title 25 of the Texas Administrative Code will replace the material in the repealed sections. See id. at 7313-14.