Could the Texas governor sign HUD nursing-home need certifications after the Texas Health Facilities Commission was abolished?

TX AG Opinion JM-754: Could the governor sign HUD need certifications?

Plain-English summary

Senator Carl Parker asked whether the Texas governor could sign certifications that the U.S. Department of Housing and Urban Development required before insuring mortgages for nursing homes and related facilities.

The question arose after the Texas Health Facilities Commission and its state certificate-of-need program expired in 1985. The opinion explained that the former federal health-planning statute had allowed the federal government and a governor to agree on a state agency to administer the program. Texas had created the Health Facilities Commission as part of that structure, but the commission later ended under the sunset process.

The HUD mortgage-insurance statute required certifications from a state agency designated under one of two federal provisions. The certifications concerned the need for the proposed facility and the existence and enforcement of appropriate licensing and operating standards.

The Attorney General concluded that Texas law could not decide who qualified as the federally designated agency. Even if article 4418h gave the governor relevant state-law powers, the governor could not satisfy the federal requirement unless federal law also recognized him as the agency designated or approved under the cited federal provisions.

The opinion also noted uncertainty about which Texas agency had previously received the federal designation. HUD correspondence had assumed the abolished Health Facilities Commission was the only qualifying agency, but HUD had not independently determined the designation, and the Attorney General had not been told whether that commission or another Texas agency had been designated.

Currency note

This opinion was issued in 1987. 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.

What the opinion said for affected groups in 1987

The governor's office

State-law executive authority did not by itself satisfy a federal statute that assigned certification to a federally designated or approved state agency.

State health agencies

An agency's authority depended on the federal designation process, not simply on performing related health-planning or licensing work under Texas law.

Nursing-home developers and mortgage lenders

HUD mortgage insurance required the federal statutory certifications from the proper state agency. The abolition of the former commission left uncertainty about which Texas entity, if any, could provide them.

HUD and other federal administrators

The opinion distinguished an informal assumption about the former commission from an independently established federal designation.

Common questions

Did the governor automatically inherit the abolished commission's certification power?
No. The opinion said state law alone could not confer authority to make the federal certifications.

What did HUD require the state agency to certify?
The quoted statute required certification of need for the facility and certification that appropriate licensing and operating standards existed and would be applied and enforced.

Could article 4418h, section 1.05 solve the problem?
No. Even if it supplied state-law authority, the federal statute still required the certifier to be the agency approved or designated under federal law.

Was the Texas Health Facilities Commission definitely the federally designated agency?
The opinion did not establish that fact. It said HUD's assumption came from information supplied by past mortgage-insurance applicants rather than an independent designation determination.

Background and legal framework

The opinion traced the former National Health Planning and Resources Development Act of 1974, which created national, regional, and state health-planning arrangements and included state certificate-of-need programs. Texas responded with the Health Planning and Development Act and the Texas Health Facilities Commission.

When the commission expired on September 1, 1985, Texas no longer required state certificates of need under the expired provisions and no state agency retained the commission's state-law issuing authority.

The separate federal mortgage-insurance provision, 12 U.S.C. section 1715w(d)(4)(A), looked to agencies designated under 42 U.S.C. section 291d(a)(1) or former section 300m. The opinion treated that federal designation as the controlling issue.

Citations and references

Federal provisions:

• 12 U.S.C. section 1715w(d)(4)(A), HUD mortgage-insurance certifications
• 42 U.S.C. section 291d, state plans
• Former 42 U.S.C. sections 300k et seq., 300m, and 300m-2
• Former 42 U.S.C. section 1320a-1, Social Security Act section 1122 program
• Public Law 99-660, 100 Stat. 3799

Texas provisions:

• Former article 4418h, V.T.C.S.
• Texas Sunset Act, Acts 1977, 65th Legislature, chapter 735

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0754
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1987/jm0754.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

JIM MATTOX
ATTORNEY GENERAL

July 21, 1987

Honorable Carl A. Parker Opinion No. JM-754

Chairman

Education Committee Re: Whether the governor has the

Texas State Senate authority to sign certificates

P. O. Box 12068 of need required by federal agency

Austin, Texas 78711

Dear Senator Parker:

You ask whether the governor of Texas has the authority to sign certificates of need required by the Department of Housing and Urban Development pursuant to 12 U.S.C. section 1715w(d)(4)(A). Before we can address your specific question, we must explain the history of the National Health Planning and Resources Development Act of 1974, a federal statute that was repealed in 1986, and we must also explain the history of the Texas Health Facilities Commission.

The National Health Planning and Resources Development Act of 1974, 42 U.S.C. §§ 300k et seq. (repealed by Act of Nov. 14, 1986, Pub. L. No. 99-660, 100 Stat. 3799), provided for national, regional, and state health care planning and development. The act authorized the Secretary of Health and Human Services and the governor of a state to enter into an agreement designating a state agency to administer the state administrative program provided for in the federal act. See 42 U.S.C. § 300m(b)(1) (repealed by Act of Nov. 14, 1986, supra). The Secretary could not enter into such an agreement, however, unless he was satisfied that the designated state agency had the authority and resources to administer the state program. See 42 U.S.C. § 300m(b)(1)(B) (repealed by Act of Nov. 14, 1986, supra). If the Secretary and the governor of a particular state failed to reach an agreement designating a state agency to administer the state program, the state could lose certain federal funds. See 42 U.S.C. § 300m(d) (repealed by Act of Nov. 14, 1986, supra).

One of the functions a designated state agency was required to perform was the administration of a state certificate of need program. See 42 U.S.C. § 300m-2(a)(4)(B) (repealed by Act of Nov. 14, 1986, supra). In 1975 the Texas legislature enacted the Health Planning and Development Act, which created the Texas Health Facilities Commission, to implement the National Health Planning and Resources Development Act of 1974. Acts 1975, 64th Leg., ch. 323 at 832; V.T.C.S. art. 4418h, § 1.02. The Health Facilities Commission was given authority to administer a state certificate of need program. V.T.C.S. art. 4418h, § 2.06(1) (expired Sept. 1, 1985). Because the Health Facilities Commission was "administratively attached to the Texas Department of Health Resources," article 4418h, § 2.01, V.T.C.S., it is not clear whether the Department of Health Resources (now the Department of Health) or the Health Facilities Commission itself was intended to be the state agency designated to administer the federal plan. See V.T.C.S. art. 4418h, § 4.01 (naming the Department of Health as the state health planning and development agency for Texas); see generally Final Report of the Sunset Advisory Commission to the Governor of Texas and Members of the Sixty-ninth Legislature (Jan. 1985) (indicating that the Department of Health Resources was intended to be the state agency designated under the federal statute).

The Health Facilities Commission was subject to sunset review in 1985. See Gov't Code §§ 325.001 through 325.021 (sunset law). Because the legislature did not continue the existence of the Health Facilities Commission, the provisions in article 4418h that established the commission and the certificate of need program expired on September 1, 1985. Texas Sunset Act, Acts 1977, 65th Leg., ch. 735, art. 2, § 2.114 at 1848. After the expiration of those provisions there was no longer a requirement under Texas law that health facilities obtain a certificate of need; nor was there a state agency with authority to issue certificates of need.

We now turn to your specific question. You ask whether the governor has authority to sign certificates of need to satisfy the requirements of a federal statute that provides for federal mortgage insurance for nursing homes and certain other health-care facilities. 12 U.S.C. § 1715w. Subsection (d)(4)(A) of that statute provides:

With respect to nursing homes and intermediate care facilities and combined nursing home and intermediate care facilities, the Secretary [of Housing and Urban Development] shall not insure any mortgage under this section unless he has received, from the State agency designated in accordance with section 291d(a)(1) or section 300m of title 42 for the State in which is located the nursing home or intermediate care facility or combined nursing home and intermediate care facility covered by the mortgage, a certification that (i) there is a need for such home or facility or combined home and facility, and (ii) there are in force in such State or in the municipality or other political subdivision of the State in which the proposed home or facility or combined home and facility is to be located reasonable minimum standards of licensure and methods of operation governing it. No such mortgage shall be insured under this section unless the Secretary has received such assurance as he may deem satisfactory from the State agency that such standards will be applied and enforced with respect to any home or facility or combined home and facility located in the State for which mortgage insurance is provided under this section. (Emphasis added).

In short, section 1715w(d)(4)(A) requires an appropriate state agency to make certifications to the Secretary of Housing and Urban Development that there is a need for the facility in question and that the state has appropriate licensing standards for the type of facility in question. Apparently you are using the term "certificate of need" as a shorthand description for the certifications that are to be made by one of the agencies named in section 1715w(d)(4)(A). Your specific question, however, is not whether the governor now has the authority that the Health Facilities Commission had under the now expired provisions of article 4418h, but whether the governor has authority to make the certifications required by the federal government under section 1715w(d)(4)(A).

Under the still extant provisions of article 4418h, the governor has authority to perform certain functions:

(a) As the chief executive and planning officer of this state, the governor is authorized to perform those duties and functions assigned to him by federal law. The governor is authorized to transfer personnel, equipment, records, obligations, appropriations, functions, and duties of his office to another agency.

(b) The governor by executive order may establish a capital expenditure review program in compliance with federal law if the governor finds that such a review program is necessary to prevent the loss of federal funds. The governor's findings, including a brief description of the reason for the findings, must be included in the text of an order issued under this subsection. If necessary, the governor may use any available funds to implement this subsection.

(c) An executive order issued under Subsection (b) of this section expires on the September 1 that follows the next regular session of the legislature that begins after the date the order is issued, unless an earlier date is specified in the order, or unless the governor rescinds the order before that time.

(d) The program established by an executive order issued under Subsection (b) of this section, when authorized by the governor, may negotiate an agreement with the Secretary of Health and Human Services on behalf of the State of Texas to administer a state capital expenditure review program pursuant to Section 1122 of the Social Security Act, the federal rules and regulations promulgated under that Act, and other pertinent federal authority, if after thorough review and study, the governor determines that such a review program would be necessary to prevent the loss of federal funds.

V.T.C.S. art. 4418h, § 1.05. (Subsection (a) was amended and subsections (b), (c), and (d) were added by Acts 1985, 69th Leg., ch. 931 art. 2, § 2 at 3126). See expired V.T.C.S. art. 4418h, § 2.11 (authorizing the Health Facilities Commission to administer a capital expenditure review program pursuant to section 1122 of the Social Security Act, 42 U.S.C. § 1320a-1). Apparently you are asking whether those provisions authorize the governor to make the certifications required under 12 U.S.C. section 1715w(d)(4)(A).

Section 1715w(d)(4)(A) requires those certifications to be made by agencies designated under other federal statutes. The certifications required under section 1715w(d)(4)(A) must be made by either the state agency designated under section 291d(a)(1) of Title 42 of the United States Code or by the state agency designated under section 300m of Title 42. The first of those federal statutes, 42 U.S.C. section 291d(a)(1), is part of a federal grant program for assisting states in constructing and modernizing certain medical facilities. See 42 U.S.C. §§ 291 et seq. Section 291d(a)(1) provides that a state desiring to participate in the program must submit a state plan designating a single state agency as the sole agency for administration of the plan. Any such plan and modification to such a plan must be approved by the Surgeon General. 42 U.S.C. § 291d(b). The other federal statute referred to in section 1715w(d)(4)(A) is 42 U.S.C. section 300m, which was the provision of the now repealed National Health Planning and Resources Development Act of 1974 that authorized the Secretary of Health and Human Services to enter into an agreement with a governor designating a state agency to administer the state administrative program provided for in the federal act. Thus, only a state agency that is the agency approved by the appropriate federal agency under section 291d or agreed to by the appropriate federal agency under section 300m would have authority under federal law to make the certifications required by section 1715w(d)(4)(A). Article 4418h, V.T.C.S., itself cannot give the governor the authority to make the certifications required by section 1715w(d)(4)(A). Thus, even if the governor's powers under section 1.05 of article 4418h, V.T.C.S., included the power to make the certifications required under section 1715w(d)(4)(A) -- and we do not read section 1.05 to give the governor such authority -- the governor could not meet the requirements of section 1715w(d)(4)(A) unless the governor himself happened to be the state agency designated under either section 300m or section 291d(a) of Title 42 of the United States Code.

Correspondence you have submitted with your request leads us to include a caveat in reference to your question. You have submitted a letter from the Department of Housing and Urban Development in which the department informs a Texas mortgage company that because the Health Facilities Commission has been abolished, there is no state agency in Texas that can satisfy the certification requirements of section 1715w(d)(4)(A). Initially, that letter led us to assume that the Health Facilities Commission was the designated state agency under both section 291d and section 300m of Title 42 of the United States Code. Our correspondence with the Department of Housing and Urban Development revealed, however, that the department's assumption that the Health Facilities Commission was the only agency that could satisfy the requirements of section 1715w(d)(4)(A) was based on information it had obtained in the past from persons seeking federal mortgage insurance for Texas facilities. The department apparently had not independently determined what state agency was designated under either of the applicable federal statutes. We have not been informed whether the Health Facilities Commission or any other state agency was ever designated under either applicable federal statute.

As indicated, the answer to your specific question is that the certifications required under section 1715w(d)(4)(A) of Title 12 of the United States Code must be made by an agency approved by the appropriate federal agency. A state statute such as article 4418h, section 1.05, V.T.C.S., cannot by itself confer authority to make those certifications.[1]

[1] If the Department of Human Services and the governor of Texas agreed that the Texas Department of Health, rather than the Health Facilities Commission, would be the designated state agency under section 300m of Title 42 of the United States Code that agreement could have been terminated when the Health Facilities Commission was abolished if the Department no longer met the requirements of section 300m-1. See former 42 U.S.C. § 300m.

SUMMARY

Even if the governor of Texas had authority under state law to make the certifications required under section 1715w(d)(4)(A) of Title 12 of the United States Code, he could not satisfy the requirements of the federal statute unless he was also authorized under federal law to make those certifications.

Very truly yours,

JIM MATTOX

Attorney General of Texas

MARY KELLER

Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY

Special Assistant Attorney General

RICK GILPIN

Chairman, Opinion Committee

Prepared by Sarah Woelk

Assistant Attorney General