Can a Texas hospital district operate a nursing home or long-term care facility and levy taxes to pay for it?

TX AG Opinion GA-0467: Can a hospital district run a long-term care facility and tax for it?

Plain-English summary

State Representative Frank Corte Jr., chairing the House Committee on Defense Affairs and State-Federal Relations, passed along a question from the East Coke County Hospital District. The district wanted to know whether it could operate a long-term health care facility and levy property taxes to maintain and run it.

The Attorney General concluded that it could, and gave two independent reasons.

First, the district's own creating statute. The East Coke County Hospital District was set up in 1969 by House Bill 1462, a special law passed under article IX, section 9 of the Texas Constitution, the provision that lets the legislature create hospital districts and authorize them to tax. That act gave the district's board "complete discretion as to the type of buildings" needed to run an adequate hospital system, and said the system "may include facilities for domiciliary care," "geriatric domiciliary care," "convalescent home facilities," and "any other facilities deemed necessary for hospital care by the directors." The act also let the district levy a tax "for all hospital district purposes," including improvements and additions to the system. Reading those provisions together, the AG said the board could reasonably decide a long-term care facility was necessary and spend tax money on it. An earlier opinion (JM-2, 1983) had already approved a special-law hospital district building and running a nursing home for geriatric care.

Second, a general statute. Health and Safety Code section 285.101 lets certain hospitals and hospital districts "construct, acquire, own, operate" facilities for the care of the elderly or disabled, expressly including "a nursing home or similar long-term care facility." That authority extends to a hospital district created by special law under article IX that sits in a county of 35,000 people or fewer. Coke County had about 3,864 residents in the 2000 census, so the district qualified. A facility authorized by section 285.101 counts as a "hospital district purpose," which is the same standard the district's tax power is tied to.

The opinion also noted, in a footnote, that a separate brief raised questions about the district's indigent-care obligations. The AG declined to address those, because the people who submitted that brief were not officials authorized by statute to request an AG opinion.

Currency note

This opinion was issued in 2006. 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.

The hospital-district powers in Health and Safety Code section 285.101, the population threshold, and the terms of the district's enabling act may have changed since 2006. Anyone weighing a hospital district's authority today should check current law rather than relying on this opinion.

Who this opinion affected (as of 2006)

Hospital district boards: The opinion told them that a district created by special law could, within reasonable discretion, decide a long-term care facility was part of its hospital system and pay for it with district taxes, drawing authority from both its own enabling act and the general statute, Health and Safety Code section 285.101.

Small-county districts in particular: The opinion turned partly on Coke County's small population. Section 285.101 extended the long-term-care authority to article IX special-law districts in counties of 35,000 or fewer, so the population figure mattered to which districts qualified under that general statute.

Residents and taxpayers of such districts: The opinion explained that taxes levied for a long-term care facility fell within "all hospital district purposes," the same purpose limit that governed the district's taxing power generally.

People without standing to request an opinion: The footnote is a reminder that only the officials listed in Government Code sections 402.042 and 402.043 can prompt an AG opinion. The AG declined to reach the indigent-care questions raised by private citizens because section 402.045 bars him from issuing an opinion to a person who is not an authorized requestor.

Common questions

Where did the district get the power to run a long-term care facility?
The opinion identified two sources: the district's 1969 enabling act (House Bill 1462), which gave the board discretion over the buildings its hospital system needs and listed domiciliary, geriatric, and convalescent care among them, and Health and Safety Code section 285.101, a general statute authorizing certain hospital districts to operate a nursing home or similar long-term care facility.

Could the district tax to pay for it?
Yes. The opinion concluded the district could levy taxes "for all hospital district purposes," and that a long-term care facility was such a purpose, so the district could levy and spend taxes to maintain and operate it.

Did the small county population matter?
For the general-statute route, yes. Section 285.101 reached article IX special-law districts located in a county of 35,000 or fewer, and Coke County's population (about 3,864 in 2000) was well under that line, so the district qualified.

Why didn't the opinion address the indigent-care questions someone raised?
Those questions came from a private brief, not from an authorized requestor. The opinion explained that Government Code section 402.045 bars the AG from giving a written opinion to a person who is not among the officials authorized by sections 402.042 and 402.043 to request one, so it did not reach them.

Background and statutory framework

Article IX, section 9 of the Texas Constitution lets the legislature create hospital districts and authorize them to levy taxes or issue bonds (Tex. Const. art. IX, § 9). The East Coke County Hospital District was created under that provision by a 1969 special law, House Bill 1462 (Act of May 24, 1969, 61st Leg., R.S., ch. 444, §§ 1-3, 1969 Tex. Gen. Laws 1485), later amended to let the district contract with physicians and medical corporations (Act of May 12, 1977, 65th Leg., R.S., ch. 249, § 1, 1977 Tex. Gen. Laws 662, 663). The board's authority is read from the plain meaning of the statutory text (Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865-66 (Tex. 1999), a Texas Supreme Court decision).

The enabling act gave the board discretion over the buildings needed for an adequate hospital system and authorized taxes "for all hospital district purposes," and a prior opinion had approved a special-law district operating a nursing home (Tex. Att'y Gen. Op. No. JM-2 (1983)). Independently, Health and Safety Code section 285.101 authorizes certain hospitals and hospital districts to operate "a nursing home or similar long-term care facility," reaching article IX special-law districts in counties of 35,000 or fewer (Tex. Health & Safety Code Ann. § 285.101(b)(1)(A), (a)(1) (Vernon 2001)). The AG declined to address indigent-care questions raised by non-requestors, citing the limits on who may request an opinion (Tex. Gov't Code Ann. §§ 402.042, .043, .045 (Vernon 2005)).

Citations

Statutes:

• Tex. Const. art. IX, § 9
• Act of May 24, 1969, 61st Leg., R.S., ch. 444, §§ 1-3, 1969 Tex. Gen. Laws 1485, amended by Act of May 12, 1977, 65th Leg., R.S., ch. 249, § 1, 1977 Tex. Gen. Laws 662, 663
• Tex. Health & Safety Code Ann. § 285.101(b)(1)(A), (a)(1) (Vernon 2001)
• Tex. Gov't Code Ann. §§ 402.042, .043, .045 (Vernon 2005)

Cases and prior opinions:

• Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865-66 (Tex. 1999)
• Tex. Att'y Gen. Op. No. JM-2 (1983)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0467
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2006/ga0467.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain - the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

September 25, 2006

The Honorable Frank J. Corte Jr.
Chair, Committee on Defense Affairs and State-Federal Relations
Texas House of Representatives
Post Office Box 2910
Austin, Texas 78768-2910

Opinion No. GA-0467

Re: Whether the East Coke County Hospital District is authorized to operate a long-term health care facility and levy taxes for its maintenance and operation (RQ-0467-GA)

Dear Representative Corte:

You ask the following question:

Does the East Coke County Hospital District have the authority to operate a long-term health care facility and levy taxes to maintain and operate said facility?

The East Coke County Hospital District (the "ECCHD") was created pursuant to article IX, section 9 of the Texas Constitution, which permits the legislature to provide for the creation and operation of hospital districts and to authorize them to levy taxes or issue bonds. Hospital districts created pursuant to this constitutional provision assume responsibility for providing medical and hospital care to indigent residents. See TEX. CONST. art. IX, § 9.

In 1969 the legislature adopted House Bill 1462, a special law creating the ECCHD within part of Coke County and authorizing it to levy a tax, subject to approval by the voters. See Act of May 24, 1969, 61st Leg., R.S., ch. 444, §§ 1-3, 1969 Tex. Gen. Laws 1485, amended by Act of May 12, 1977, 65th Leg., R.S., ch. 249, § 1, 1977 Tex. Gen. Laws 662, 663 (authorizing district to contract with physicians, professional associations providing health care, and nonprofit medical corporations). House Bill 1462 vested management and control of the ECCHD in its board of directors and charged the district with establishing a hospital or a hospital system to furnish care to the district's residents, including indigent residents of the district. See Act of May 24, 1969, 61st Leg., R.S., ch. 444, §§ 1-3, 1969 Tex. Gen. Laws 1485, 1485.

We consider whether the ECCHD may operate a long-term health care facility and levy taxes to maintain and operate the facility. The board's authority is to be determined from the plain meaning of the statutory language. See Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865-66 (Tex. 1999). The board must exercise its authority over the hospital district consistently with Texas Constitution article IX, section 9 and with other law defining the district's powers and duties.

House Bill 1462 sets out the district's authority to levy a property tax. The election approving the district's creation authorized the district to levy a tax "not to exceed 75 cents on each $100 valuation, upon all taxable property situated within said district . . . for all hospital district purposes." Act of May 24, 1969, 61st Leg., R.S., ch. 444, § 4(c), 1969 Tex. Gen. Laws 1485, 1486. "The board of directors shall annually levy a tax" to pay the interest on and create a sinking fund for bonds and other obligations it may have issued, provide for the operation and maintenance of the hospital district and the hospital system, and make further improvements and additions to the hospital system. Id. § 13, at 1490-91. The ECCHD thus may levy taxes "for all hospital district purposes," expressly including "improvements and additions" to the hospital system. Id. §§ 4(c), 13, at 1486, 1490-91.

House Bill 1462 gives the ECCHD board "complete discretion as to the type of buildings, both as to number and location, required to establish and maintain an adequate hospital system." Id. § 10, at 1490. "The hospital system may include facilities for domiciliary care of the sick, wounded, and injured, facilities for outpatient clinic or clinics, . . . facilities for geriatric domiciliary care, convalescent home facilities, . . . and any other facilities deemed necessary for hospital care by the directors." Id. The ECCHD thus has broad statutory authority to provide for the facilities of a hospital system. Pursuant to this authority the district board may, in the exercise of reasonable discretion, determine that a long-term health care facility is necessary for hospital care and may spend taxes to maintain and operate that facility. See generally Tex. Att'y Gen. Op. No. JM-2 (1983) (Corrigan Hospital District, established by special law, may build and operate a nursing home to provide geriatric care).

A general law also authorizes the ECCHD to operate a long-term health care facility. Health and Safety Code section 285.101 provides that certain hospitals, hospital districts, and authorities may "construct, acquire, own, operate, enlarge, improve, furnish, or equip . . . [various types of] facilities or services for the care of the elderly or disabled," including "a nursing home or similar long-term care facility." TEX. HEALTH & SAFETY CODE ANN. § 285.101(b)(1)(A) (Vernon 2001). A hospital district created by special law under article IX of the Texas Constitution that is located in a county with a population of 35,000 or less is among the entities that may exercise this authority. See id. § 285.101(a)(1). The ECCHD is a hospital district created by special law under article IX, section 9 and located in a county with a population well under 35,000. Accordingly, section 285.101 authorizes the ECCHD to operate a long-term health care facility. A long-term health care facility established by section 285.101 serves a "hospital district purpose" for which the district may levy and spend taxes. See Act of May 24, 1969, 61st Leg., R.S., ch. 444, § 4(c), 1969 Tex. Gen. Laws 1485, 1486.

SUMMARY

The East Coke County Hospital District, created by special law under article IX, section 9 of the Texas Constitution has authority to operate a long-term health care facility and to levy taxes to maintain and operate this facility.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

KENT C. SULLIVAN
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General, Opinion Committee

Footnotes

1. See Letter from Honorable Frank J. Corte Jr., Chair, Committee on Defense Affairs and State-Federal Relations, Texas House of Representatives, to Honorable Greg Abbott, Attorney General of Texas, at 1 (Mar. 14, 2006) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us). See Letter from Mr. Edward M. Cumbie, President, Board of Directors, East Coke County Hospital District, to Honorable Greg Abbott, Attorney General of Texas, at 1 (Feb. 16, 2006) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us, submitted as part of request letter giving additional information about request).

2. A brief raises additional questions about the district's provision of indigent care. See Letter from Tom and LouAnna Peters, to Opinion Committee, Office of the Attorney General, at 1-2 (Apr. 1, 2006) (on file with the Opinion Committee). Government Code sections 402.042 and 402.043 identify the state and local officials who are authorized to request attorney general opinions, and section 402.045 provides that the attorney general may not give a written opinion to a person who is not an authorized requestor. See TEX. GOV'T CODE ANN. §§ 402.042, .043, .045 (Vernon 2005). Accordingly, we do not address the questions raised in the brief.

3. The population of Coke County was 3,864 in 2000. See BUREAU OF THE CENSUS, U.S. DEP'T OF COMMERCE, 2000 CENSUS OF POPULATION, available at http://quickfacts.census.gov/qfd/states/48/48081.html (State and County Quick Facts) (last visited Sept. 14, 2006).