Could the Titus County Hospital District lease part of its hospital to private doctors for their medical offices?
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This page answers the general question as of 1984. Ezel answers yours: what it means for your facts, under current Texas law, with citations.
Texas AG Opinion JM-258: Hospital Office Leases
Plain-English summary
The Titus County Hospital District asked whether it could lease part of its physical plant to private physicians for less than one year, with rent paid into the hospital's general operating fund. The opinion assumed the doctors would use the space "for offices in which to engage in the private practice of medicine." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
JM-258 answered no. It concluded that the district "lacks authority to lease its facilities for that purpose." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
The opinion treated the district's powers as limited to those supplied by the Texas Constitution and its creating act. Express authority covered facilities "for hospital purposes" and responsibility for "providing medical and hospital care for its needy inhabitants." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Private doctors' offices did not fit those purposes. JM-258 stated: "Whereas laboratory testing is a hospital function, offices for the private practice of medicine are not 'hospital purposes' or the provision of 'medical or hospital care for the needy.'" Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
The proposed lease term and destination of the rent did not change the result. The summary said the district had "neither express nor implied authority" to lease part of its physical plant for private medical offices. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Currency note
This opinion was issued in 1984. 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.
Common questions
Could the hospital district lease rooms to doctors for private medical practices?
No. JM-258 concluded that the Titus County Hospital District had "neither express nor implied authority" for that lease. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Did it matter that the lease would last less than one year?
The request expressly proposed "a term of less than one year," but the opinion still found no authority because the planned use was private office space rather than a hospital purpose. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Did paying the rent into the hospital's operating fund make the lease valid?
No. The request stated that "lease revenues are paid to the hospital's general operating fund," and JM-258 nevertheless concluded that the district lacked authority for the private-office lease. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
What purposes did the district's enabling law authorize?
The opinion identified acquiring and managing facilities "for hospital purposes" and providing "medical and hospital care for the needy residing in the district." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Did JM-258 treat every arrangement with private doctors as unauthorized?
No. It cited Attorney General Opinion M-912, involving laboratory testing performed with hospital equipment, and distinguished that hospital function from private doctors' offices. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Background and statutory framework
The Titus County Hospital District was a county-wide district created by chapter 298 of the Acts of 1963 under article IX, section 9 of the Texas Constitution. The opinion quoted the constitutional authority for hospital districts with facilities "for hospital purposes" and responsibility for care of needy inhabitants. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Chapter 298 authorized the district's creation, establishment, maintenance, and operation, and required it to "assume full responsibility for providing medical and hospital care for the needy residing within the District." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
JM-258 stated that implied powers had to further the district's assigned purposes. It found no express or implied grant permitting use of hospital facilities "as anything other than hospital purposes and the provision of medical hospital care for its needy inhabitants." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Citations and references
- Attorney General Opinion M-171 (1967) supported the statement that a hospital district derived its power from the constitution and its creating act. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
- Attorney General Opinions H-16 and H-31 (1973) addressed the lack of authority to lease county hospital space for private medical offices. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
- Sullivan v. Andrews County, 517 S.W.2d 410 (Tex. Civ. App. - El Paso 1974, writ ref'd n.r.e.), involved "express statutory authority to lease medical facilities." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
- Oak Lawn Preservation Society v. Board of Managers of Dallas County Hospital District, 566 S.W.2d 315, 317 (Tex. Civ. App. - Dallas 1978, writ ref'd n.r.e.), involved a hospital-district lease whose validity was "not an issue determined on appeal." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
- Attorney General Opinion M-912 (1971) involved hospital laboratory testing performed for a private hospital and doctors with hospital equipment. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Source
- Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0258
- Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1984/jm0258.pdf
Original opinion text
Best-effort transcription from a scanned PDF. Minor errors may remain. The linked PDF is authoritative.
The Attorney General of Texas
December 21, 1984
Honorable Ed Howard
Chairman
Subcommittee on Nominations
Texas State Senate
P. O. Box 12068, Capitol Station
Austin, Texas 78711
Opinion No. JM-258
Re: Whether a hospital district created by chapter 298, Acts 1963, Fifty-eighth Legislature, may lease a portion of its physical plant to private physicians
Dear Senator Howard:
The Titus County Hospital District is a county-wide hospital district created by chapter 298, Acts 1963, of the Fifty-eighth Legislature, under authority of article IX, section 9 of the Texas Constitution. You ask whether this hospital district may lease a portion of its physical plant to private physicians for a term of less than one year, provided lease revenues are paid to the hospital's general operating fund. From your question, we assume that the physicians would be leasing the facilities for offices in which to engage in the private practice of medicine. It is our opinion that the Titus County Hospital District lacks authority to lease its facilities for that purpose.
A hospital district derives its power from the constitution and the act creating the district. See Attorney General Opinion M-171 (1967). A special purpose district exercises only the powers that are expressly delegated to it by the legislature or which exist by clear and necessary implication. Powers must further the purpose for which the district is created, and powers which are not expressed and are merely convenient or useful may not be exercised by the district.
Article IX, section 9 of the constitution provides, in part:
Sec. 9. The Legislature may by law provide for the creation, establishment, maintenance and operation of hospital districts composed of one or more counties or all or any part of one or more counties with power to issue bonds for the purchase, construction, acquisition, repair or renovation of buildings and improvements and equipping same, for hospital purposes; providing for the transfer to the hospital district of the title to any land, buildings, improvements and equipment located wholly within the district which may be jointly or separately owned by any city, town or county, providing that any district so created shall assume full responsibility for providing medical and hospital care for its needy inhabitants and. . . . (Emphasis added).
As originally enacted and subsequently amended, chapter 298, Acts 1963, Fifty-eighth Legislature, in pertinent part, provides:
Section 1. In accordance with the provisions of Article IX, Section 9, Constitution of the State of Texas, this Act shall be operative so as to authorize the creation, establishment, maintenance and operation of a Hospital District within the State of Texas, to be known as Titus County Hospital District, and the boundaries of said District shall be coextensive with the boundaries of Titus County (hereinafter referred to as the "County"), and said District shall have the powers and responsibilities provided by the aforesaid Constitutional provision.
Sec. 2. That said District hereby provided for shall assume full responsibility for providing medical and hospital care for the needy residing within the District. . . .
. . . .
Sec. 14. Neither the County nor any city therein shall, after the Hospital District has been organized in pursuance of this Act, levy any tax for hospital purposes; and such Hospital District shall be deemed to have assumed full responsibility for the furnishing of medical and hospital care for the needy and indigent persons residing in said Hospital District from the date that taxes are collected for the Hospital District. (Emphasis added).
The Titus County Hospital District is expressly authorized and directed by article IX, section 9 of the constitution and the enabling statute to acquire and manage physical plant facilities for hospital purposes and to provide medical and hospital care for the needy residing in the district. Implied powers of the district must further the purposes for which the district is created, namely, hospital purposes and medical care of needy inhabitants.
We conclude that the Titus County Hospital District derives from the constitution and enabling statute no express or implied power to lease on any terms a portion of its hospital property for use as private offices for private physicians. This office previously concluded that even when a county had statutory authority to lease a county hospital to be operated as a hospital, the county did not thereby acquire authority to lease portions of its hospital for use as private medical offices. See Attorney General Opinion H-16 (1973). See also Attorney General Opinion H-31 (1973). Cf. Sullivan v. Andrews County, 517 S.W.2d 410 (Tex. Civ. App. - El Paso 1974, writ ref'd n.r.e.) (express statutory authority to lease medical facilities). But see Oak Lawn Preservation Society v. Board of Managers of Dallas County Hospital District, 566 S.W.2d 315, 317 (Tex. Civ. App. - Dallas 1978, writ ref'd n.r.e.) (validity of lease between hospital district and county for use of former hospital as jail not an issue determined on appeal); Attorney General Opinion M-912 (1971) (hospital district with authority to contract with private hospital and doctors for laboratory testing to be performed with hospital laboratory equipment). Whereas laboratory testing is a hospital function, offices for the private practice of medicine are not "hospital purposes" or the provision of "medical or hospital care for the needy."
The powers of the hospital district in question are measured by the terms of article IX, section 9 and chapter 298 of the Fifty-eighth Legislature, which created the district, neither of which contains an express or implied grant of authority to lease hospital facilities for use as anything other than hospital purposes and the provision of medical hospital care for its needy inhabitants.
SUMMARY
The Titus County Hospital District has neither express nor implied authority to lease part of its physical plant to private physicians for use as private medical offices.
Very truly yours,
JIM MATTOX
Attorney General of Texas
TOM GREEN
First Assistant Attorney General
DAVID R. RICHARDS
Executive Assistant Attorney General
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