Which Texas continuing-care retirement facilities needed certificates of authority, qualified for transition rules, or fell within the new 1987 regulatory act?

Texas AG Opinion JM-895: Who Fell Under Texas's 1987 Continuing-Care Facility Law?

Plain-English summary

State Board of Insurance Chairman Edwin Smith asked how the new Texas Continuing Care Facility Disclosure and Rehabilitation Act applied to facilities that existed or were being developed when the statute took effect on September 1, 1987. He also asked how the statute's definitions treated renewable agreements and different forms of entrance fees.

Section 4(g) directed the commissioner to issue a certificate of authority to a facility that already had residents, was under construction, or had incurred substantial development obligations by the effective date. Those facilities did not have to satisfy section 4(c)'s substantive criteria concerning financial soundness, management competence, and ability to comply. They remained subject to the rest of the act, including suspension and revocation provisions, and generally to board rules other than rules implementing section 4(c).

Section 20 provided delayed disclosure and escrow compliance only for a provider operating a continuing-care facility on September 1, 1987. A facility merely under construction, or one for which the provider had only incurred development obligations, was not yet operating and did not receive that transition treatment. A facility with residents could qualify under both section 4(g) and section 20.

Whether pre-effective-date financial obligations were "substantial" was a fact question for the commissioner. The decision had to be made through the information, hearing, and administrative-law procedures supplied by the statute, not through unfettered discretion.

The agreement's substance determined whether the definition applied. A nominally short or month-to-month agreement could function as a lifetime agreement if its renewal terms effectively produced that result. A payment greater than three months' rent could be an entrance fee even if called a deposit, application fee, or initial fee and even if refundable. A smaller initial payment plus a deferred annual lump sum could also count if the combined payment was consideration for accepting the resident.

Finally, all five elements listed in the statutory definitions had to be present: board, lodging, specified personal and health-related services, an agreement lasting for life or more than one year, and an entrance fee exceeding three months' rent. Form or relabeling could not avoid the act when the substance met the definition.

Currency note

This opinion was issued in 1988. 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

Did an existing or partly developed facility automatically receive a certificate of authority?

Section 4(g) required issuance to a facility with residents, under construction, or backed by substantial development obligations by September 1, 1987. The facility did not have to prove the section 4(c) criteria, but its certificate could still be suspended or revoked under the act.

Did section 4(g) exempt those facilities from the whole statute?

No. It exempted them only from section 4(c)'s substantive certificate criteria. The remaining provisions and generally applicable board rules still applied.

Which facilities received section 20's delayed disclosure and escrow deadlines?

Only facilities already operating and providing continuing care on the effective date. Construction or financial commitments alone did not qualify.

Who decided whether development obligations were substantial?

The insurance commissioner, as a factual determination made through the application information and hearing process required by the statute and administrative procedure law.

Could a month-to-month contract fall under the act?

Possibly. The commissioner or board had to examine the renewal language and the whole agreement. Automatic renewal could make a nominally short agreement function as one lasting for the resident's life.

Did calling a large upfront payment a deposit avoid the entrance-fee definition?

No. If the payment met section 2(3)'s definition, its label and refundability did not remove it from the statute.

Could deferred annual lump sums count toward an entrance fee?

Yes, if they were part of the consideration for accepting the individual as a resident. The definition included an initial or deferred transfer.

Did a facility need every statutory element to be regulated?

Yes. The opinion said all five elements in the definitions had to be present, based on all relevant facts and the agreement's substance.

Background and statutory framework

House Bill 677 of the 70th Legislature enacted article 8876 to regulate continuing-care providers and protect elderly consumers who paid substantial entrance fees for long-term housing and care. The act applied to continuing-care contracts entered on or after September 1, 1987.

Section 3 directed the State Board of Insurance to regulate providers and authorized rules and enforcement actions. Section 4 required certificates of authority. Sections 6 through 9 addressed disclosure statements and entrance-fee and reserve-fund escrow accounts. Other provisions addressed financial supervision, statutory resident rights, civil and criminal penalties, investigations, and equitable enforcement.

Section 4(c) required a hearing and findings on financial soundness, competence, experience, integrity, public interest, and ability to comply. Section 4(g) used mandatory language for facilities occupied, under construction, or supported by substantial development obligations by the effective date. The opinion treated that subsection as a narrow exception from the section 4(c) criteria.

Section 20 applied to a provider operating an existing facility and delayed specified disclosure and escrow requirements. The opinion relied on the statutory definitions of "continuing care facility" and "operate" to limit that transition provision to facilities actually providing care.

The final set of questions turned on section 2. "Continuing care" required board and lodging, personal-care services plus nursing, medical, or other health-related services, an entrance fee, and an agreement effective for life or more than one year. An entrance fee was an initial or deferred transfer of money or property worth more than three months' rent as consideration for accepting a specified resident.

Citations

Statutory authority:

• V.T.C.S. article 8876, sections 2 through 4, 6 through 9, 11, 13, 15 through 18, 20, and 23
• V.T.C.S. article 6252-13a, Administrative Procedure and Texas Register Act

Legislative materials:

• House Bill No. 677, 70th Legislature (1987)
• Texas House Committee on Human Services, Interim Report to the 70th Texas Legislature, "Continuing Care Communities"
• House Human Services Committee, Bill Analysis, H.B. No. 677, 70th Legislature (1987)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-895
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1988/jm0895.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Obvious character-level OCR errors have been corrected, but minor errors may remain; the linked PDF is authoritative.

THE ATTORNEY GENERAL
OF TEXAS

                April 15, 1988

Mr. Edwin J. Smith, Jr. Opinion No. JM-895
Chairman
State Board of Insurance Re: Requirements of House Bill
1110 San Jacinto Blvd. No. 677 of the 70th Legisla-
Austin, Texas 78701 ture, the Texas Continuing
Care Facility Disclosure and
Rehabilitation Act (RQ-1227)

Dear Mr. Smith:

   You ask several questions      concerning    the Texas

Continuing Care Facility Disclosure and Rehabilitation
Act, which was adopted by House Bill No. 677 of the 70th
Legislature and codified as article 8876, V.T.C.S. It
applies to contracts for continuing care entered into on
or after September 1, 1987. V.T.C.S. art. 8876, §23. The
statute authorizes the State Board of Insurance to
regulate continuing care providers. V.T.C.S. art. 8876, §3. A continuing care retirement community provides
housing, board, care, and health related services to
elderly people who do not want to maintain their own homes
but do not need nursing home care. Texas House of
Representatives, Committee on Human Services, Interim
Report to the 70th Texas Legislature, "Continuing Care
Communities," 119, 124. It generally consists of
residential facilities and a health care center and
requires a substantial entrance fee in addition to other
monthly fees in return for an assurance of a continuing
living arrangement throughout retirement. House Human
Services Committee, Bill Analysis, H.B. No. 677, 70th Leg.
(1987). Because of the considerable investment which
continuing care centers require from the elderly, House
Bill No. 677 was written to protect the consumer from loss
of his investment through fraud or mismanagement. Id.

 The statute defines "continuing care" as follows:

   [T]he furnishing, to an individual who is not
   related by consanguinity   or affinity to the
   person furnishing the care, of board and
   lodging,   together   with    personal    care
   services, and    nursing services,     medical



                        p. 4397

Mr. Edwin J. Smith, Jr. - Page 2 (JM-895)

   services, or other health-related   services,
   regardless of whether   or not the services
   and the lodging are provided    at the same
   location, under an agreement   that requires
   the payment of an entrance fee and that     is
   effective either for the life of the indivi-
   dual or for a period of more than one year.

V.T.C.S. art. 8876, §2(2). The article authorizes the
State Board of Insurance to regulate continuing care
providers and to adopt rules and take other action
necessary to administer and enforce the act. V.T.C.S.
art. 8876, 53. Continuing care providers are required to
receive a certificate of authority from the board.
V.T.C.S. art. 8876, §4. Providers must deliver a
disclosure statement to prospective residents before
entering into a contract to provide continuing care and
must also establish an entrance fee escrow account. Id. §§6-9. The commissioner of insurance may place a provider
under supervision if it is bankrupt or otherwise is
financially unable to meet its obligations for continuing
care. Id. §11. There are provisions for rehabilitation
or liquidation. Section 13 gives to

   [e]ach resident receiving care in a portion
   of a facility licensed to provide nursing
   home care, personal    care, or    custodial
   care . . . all statutory rights provided  to
   nursing home, personal care, or custodial
   care residents.

The substantive requirements may be enforced by civil and
criminal penalties and by equitable proceedings. Id. §§15-18.

 You first ask about the applicability of the certi-

ficate of authority requirement. This provision states as
follows:

      Sec. 4. (a) After September 1, 1987, no
   provider shall offer to the public a con-
   tract for continuing  care, or construct   or
   acquire a facility for the purpose         of
   providing continuing care, without obtaining
   a certificate of authority from the board.               ?

      (b) The commissioner    shall promulgate
   rules and regulations    setting  forth the
   information to be submitted by an applicant
   for a certificate of authority.



                       p. 4398


Mr. Edwin J. Smith, Jr. - Page 3    (JM-895)




           (c) The commissioner, upon receipt of an
       application for a certificate of authority,
       shall conduct a hearing on the application
       in accordance     with    the   Administrative
       Procedure and Texas Register Act       (Article
       6252-13a, Vernon's Texas Civil Statutes).
       The commissioner shall grant the application
       if he finds that the applicant or the facil-
       ity is financially     sound: that the comp-
       etence, experience,    and integrity of the
       applicant,   its board of directors,        its
       officers or its management    is such that it
       would be in the interest of the public to
       issue a certificate    of authority; and that
       the applicant is capable of complying      with
       the provisions   of this Act.     The commis-
       sioner may limit issuance of certificates of
       authority  to incorporated     entities.    The
       commissioner shall issue an order approving
       or disapproving the application within      180
       days of filing.

          (d) No certificate   of authority   issued

P by the commissioner shall be transferred to
a third party except upon approval by the
commissioner.

         .(e) No holder of      a certificate    of
       authority shall enter into a contract with a
       third party for management of the facility
       unless the commissioner is notified of such
       contract.

          (f) If a provider:    (1) draws upon its
       entrance fee escrow in an amount greater
       than provided for in Section 8 of this Act:
       (2) draws upon its reserve fund escrow in an
       amount greater than provided for in Section
       9 of this Act; or (3) engages in a wilful
       and intentional violation   of this Act, the
       commissioner, after notice and hearing, may
       suspend or revoke the provider's certificate
       of authority,   in addition to any other
       remedies provided for in this Act.

          (g) The commissioner shall issue a cer-
       tificate of authority to any facility which
       is occupied by one or more residents     on
       September  1, 1987, which    is under con-

P struction on September 1, 1987, or which,

                           p. 4399

Mr. Edwin J. Smith, Jr. - Page 4 (JM-895)

   prior to September   1, 1987,   had incurred
   substantial financial obligations related to
   the development    of a     facility.   Such
   certificates shall be subject to revocation
   or suspension   as provided    for in   this
   section.

V.T.C.S. art. 8876.

 Section 4(a) of article 8876,   V.T.C.S., requires   a

provider to obtain a certificate of authority if he offers
a contract for continuing care or constructs or acquires a
facility for that purpose after September 1, 1987.
Section 4(c) establishes procedures and substantive
requirements governing issuance of certificates of
authority by the insurance commissioner. Section 4(g),
however, states that "the commissioner shall issue a
certificate of authority" (emphasis added) to any facility
which is occupied, under construction, or is the subject
of substantial financial obligations by September 1, 1987.

 You ask whether a facility described  in section 4(g)

is required to meet the criteria of section 4(c) or
whether instead the commissioner must issue a certificate
of authority to such a facility without considering those
criteria.

   Section 4(g) provides an exception from the criteria

in section 4(c) for the three categories of continuing
care facilities it describes. In each category there has
been considerable investment in a facility prior to the
effective date of article 8876. V.T.C.S. art. 8876, §23.
As shown by the use of the mandatory "shall" in section
4(g), these facilities are entitled to receive a certi-
ficate of authority from the commissioner without meeting
the substantive requirements set out in section 4(c).

 Your next question involves the relationship between

section 4(g) of article 8876, V.T.C.S., and section 20,
the transition provision. Section 20 provides as follows:

      Sec. 20.  (a) A provider who operates   a
   continuing care facility that is in exis-
   tence on the effective date of this Act must
   comply with the     disclosure  and   escrow
   requirements  imposed under this Act      as
   provided by this section.

      (b) A provider subject to Subsection (a)
   of this section must file annual revised



                        p. 4400


Mr. Edwin J. Smith, Jr. - Page 5   (JM-895)




       disclosure  statements with the board as
       provided by Section 7 of this Act beginning

P with a statement that covers the provider's
most recent fiscal year that begins on or
after September 1, 1987.

          (c) A provider subject to Subsection (a)
       of this section must comply with the escrow
       requirements imposed under Sections 8 and 9
       of this Act not later than September      1,
       1990. If the commissioner determines that a
       provider subject to Subsection (a) of this
       section is unable to comply with        this
       section after making a good faith effort to
       do so, the commissioner may extend the time
       for compliance  for a reasonable period   of
       time.

           (d) Failure to comply with the require-
       ments of this section constitutes a criminal
       offense under Section 18 of this Act.

     You ask whether the entire act as well as the rules
adopted by the State      Board of Insurance   apply to
facilities described   by section 4(g), or only those
delayed requirements listed in section 20.

     Section 20 applies to continuing care facilities that
are in existence  and are being operated on September     1,
1987, the effective date of the act. House Bill No. 677
as introduced did not include the requirement that con-
tinuing care facilities obtain a certificate    of authority
from the State Board of Insurance.     Bill Analysis,   H.B.
No. 677, m.       Thus, the bill as introduced did not
include any provision  like subsection   4(g) that allowed
certain facilities to receive a certificate     of authority
without making the showing required by section 4(c). The
provision enacted as section 20 of article 8876, V.T.C.S.,
provided the only exception in the original bill        from
compliance with the act's requirements    on its effective
date. Section    4 was added as part of the Committee
Substitute to House Bill No. 677, supra. Section 4(g)
excepts the facilities     it describes    only    from the
substantive requirements  of section 4(c); it does not
authorize  those   facilities   to meet     the    statutory
requirements on the delayed basis outlined in section 20.

     Section 4(g) expressly states that certificates    of
authority given under its provisions "shall be subject to
revocation or suspension as provided for in this section."




                            p. 4401

Mr. Edwin J. Smith, Jr. - Page 6 (JM-895)

V.T.C.S. art. 8876, §4(g). Subsection 4(f) provides for
suspension or revocation of a certificate of authority as
follows:

       (f) If a provider:    (1) draws upon  its
   entrance fee escrow in an amount greater
   than provided for in Section 8 of this Act:
   (2) draws upon its reserve fund escrow     in
   an amount greater than provided       for  in
   Section 9 of this Act: or (3) engages in
   wilful and intentional violation      of this Act     the commissioner,    after notice and
   hearing, may suspend or revoke the pro-
   vider's    certificate   of    authority,  '
   addition to any other remedies provided   f:z
   in this Act.   (Emphasis added.)

V.T.C.S. art. 8876, §4(f). This provision makes clear the
legislature's intent that subsection 4(g) not exempt
facilities from provisions of the act other than that
describing the criteria for a certificate of authority.

 You have not submitted any rules to us, and we can

consider the application of rules to section 4(g) faci-
lities only in general terms. Ordinarily, your rules
applicable to other continuing care facilities would also
apply to section 4(g) facilities, except for rules imple-
menting section 4(c).

  Your third question recognizes that some facilities

will be covered by both the exception in section 4(g) and
the exception in section 20. If a facility is occupied by
one or more residents on September 1, 1987, it will be "in
existence on the effective date" of the act and thus will
be entitled to a certificate of authority under section
4(g) and will also have the benefit of the transition
provision: section 20. You ask whether a facility
described in section 20 includes only a facility occupied
by one or more residents on September 1, 1987, or also
includes a facility which is under construction on
September 1, 1987 and one which, prior to September 1,
1987, had incurred substantial financial obligations
related to the development of the facility.

 Section 20(a) applies to "[a] provider who operates a

continuing care facility that is in existence on the
effective date of this Act. . . .I A "continuing care
facility" is "a place in which a person undertakes to
provide continuing care to an individual.* V.T.C.S. art.
8876, §§2(2), (4). "Operate"is defined as "to perform a

                        p. 4402

,

Mr. Edwin J. Smith, Jr. - Page 7       (JM-895)




function." Webster's   Ninth New Collegiate    Dictionary.
Section 20(a) applies to a facility where a person       is
already providing continuing care as of September 1, 1987.
If the facility is merely under construction, or if the
provider has done no more than incur substantial financial
obligations  toward construction    of a facility,     the
facility cannot be used to provide continuing  care and is
not even in existence.   Section 20(a) does not apply to
the latter two categories of "facility."

     You next ask whether the commissioner,           in imple-
menting section 4(g), has discretion to determine whether
the financial obligations related to the development of a
facility incurred prior to September        1, 1987, are "sub-
stantial." V.T.C.S. art. 8876, §4(g).         Whether financial
obligations incurred are "substantial" is a fact question,
which must be answered       in relevant       cases before a
certificate can be issued.     Section  4(b)   of article 8876,
V.T.C.S., authorizes the commissioner to "promulgate rules
and regulations     setting   forth the information       to be
submitted by an applicant for a certificate of authority."
He is to conduct a hearing on the applications submitted.
V.T.C.S. art. 8876.     The commissioner     has access to the

• information and the procedural framework for deciding
  whether an applicant for a certificate of authority has
  incurred substantial financial obligations toward the
  development of a facility. This determination is not a
  matter for the commissioner's unfettered discretion but
  must be made in accordance with the Administrative
  Procedure and Texas Register Act, article 6252-13a,
  V.T.C.S. V.T.C.S. art. 8876, §4 (c) : see also V.T.C.S.
  art. 6252-13a, §§3(2), (13).

   You finally ask several questions about the defini-
  

  tions of "entrance fee" and "continuing care" in the
  statute. Section 2 provides as follows:

        (2)   'Continuing care' means the fur-
     nishing, to an individual who is not related
     by consanguinity or affinity to the person
     furnishing the care, of board and lodging,
     together with personal care services,     and
     nursing services, medical services, or other
     health-related    services,   regardless   of
     whether or not the services and the lodging
     are provided at the same location, under an
     agreement that requires the payment of an
     entrance fee and that is effective     either
     for the life of the individual or for a
     period of more than one year.
  
                           p. 4403
  

Mr. Edwin J. Smith, Jr. - Page 8 (JM-895)

                                                         -,



        (3) 'Entrance fee' means an initial or
    deferred  transfer   of money,         other
    property valued at an amount in excess     of
    three months' rent, made, or promised to be
    made as full or partial consideration    for
    acceptance by a provider    of a specified
    individual as a resident    in a facility.
    (Emphasis added.)

V.T.C.S. art. 8876, 52.

   You ask:

        Does the use of an agreement that is of
     less than one year's duration, including  a
     month-to-month   contract,  but  which   is
     guaranteed   renewable   by  the  resident,
     subject a facility to regulation under the
     act?

Any renewal provision must be evaluated according to its
language and its function in the context of the whole
contract. For example, a renewal provision which provides
for automatic renewal every month in the absence of notice ?
by the resident or one which provides for renewal on the
receipt of each rent check could in effect be a contract
for the life of the resident. The significance of such
provisions should be determined on a case by case basis by
the commissioner or the board in the exercise of their
enforcement powers under the statute. See V.T.C.S. art.
8876, §§16, 17.

   You next ask:

        Does the charging of an upfront       fee
     greater than the amount of three months'
     rent, but which is called an 'initial fee,'
     'deposit,' or 'application fee' and is fully
     or partially refundable, subject a facility
     to regulation under the act?

If the fee fits the definition found in section 2(3), it
is an entrance fee, even though the provider calls it
something else. The fact that a fee is refundable does
not remove it from the definition of "entrance fee."
Article 8876, V.T.C.S., contemplates that some providers
might charge an entrance fee that is fully or partly
refundable. Section 6(g)(4) requires that a disclosure
statement set out

                         p. 4404

a

Mr. Edwin J. Smith, Jr. - Page 9    (JM-895)

P

       the conditions, if any, under which all or
       part of the entrance fee is refundable    on

• cancellation of the contract by the provider
  or by the resident, or in the event of the
  death of the resident. . . .

  V.T.C.S. art. 8876, §6(g)(4).

   You next ask:
  
        Does the charging of an entrance fee less
     than the amount of three months' rent with
     an additional lump sum fee payable annually,
     the aggregate of which would be greater than
     three months'  rent, subject a facility to
     regulation under the act?
  
   An entrance   fee includes an "initial or deferred
  

  transfer" of money or other property as consideration for
  acceptance of a specified individual as a resident in a
  facility. If the additional lump sum fee is part of the
  consideration for accepting the individual as a resident,
  it is an "entrance fee" even though its payment is
  deferred.

   You next ask:
  
        Does the act impose any duty on the State
     Board of Insurance or the commissioner    to
     review a facility's arrangements    for the
     purpose of determining applicability of the
     act to that facility?
  
   We understand your question to relate to financial
  

  and contractual arrangements of continuing care providers,
  and not to the physical premises of continuing care
  facilities. The statute imposes the following duty on the
  State Board of Insurance:

        Sec. 3. The State Board of Insurance
     shall regulate continuing care providers   as
     provided by this Act.   The board may adopt
     rules and take other action as necessary   to
     administer and enforce this Act.    (Emphasis
     added.)
  

  V.T.C.S. art. 8876, §3. The board has a mandatory duty to
  enforce this statute to protect consumers from the loss of
  investment that might occur through fraud or mismanage-
  ment. We cannot tell you, as a matter of law, how to

                        p. 4405
  

Mr. Edwin J. Smith, Jr. - Page 10 (JM-895)

exercise your powers and carry out your duties under
article 8876, V.T.C.S. That is a matter for the board's
discretion. We note, however, that the board has been
given power to make rules and regulations, as well as
considerable authority to require the submission of
information necessary to carry out its responsibilities.
See. e.g., V.T.C.S. art. 8876, §4(c) (information to be
submitted by an applicant for a certificate of authority):
§§5-7 (recording requirements); §16 (conduct of investiga-
tions, subpoena power). See also V.T.C.S. art. 8876, §§11, 17 (power to act on investigation prompted by complaint).

 We also point out that some provisions state how

particular powers shall be exercised. For example, the
commissioner shall conduct a hearing on an application for
a certificate of authority in accordance with the Adminis-
trative Procedure and Texas Register Act, and shall grant
the certificate on certain fact findings. V.T.C.S. art.
8876, 54(c). In addition, with respect to the requirement
that providers file a disclosure statement and revised
disclosure statements with the State Board of Insurance,

   [t]he commissioner  shall review the dis-
   closure statement for completeness but shall
   not be required to review the disclosure
   statement for accuracy.

V.T.C.S. art. 8876, 57(c).

 Your last question is as follows:

      The definitions  of 'continuing care' and
   'entrance fee' state     five elements   that
   describe the type of facilities to be regu-
   lated under the Act. These five elements  are
   as follows:

         (1)   furnishing board:

         (2)   furnishing lodging:

          (3) furnishing personal care services,
      and either nursing services, medical   ser-
      vices, or other health-related services:

         (4) an agreement that is       effective
      either for the life of an individual or for
      a period of more than one year; and




                         p. 4406

,
c,
Mr. Edwin J. Smith, Jr. - Page 11 (JM-895)
,

               (5) requirements   of an entrance    fee
            (money or property  of value  in excess of
            three months' rent) in the agreement.

         Must a facility meet all five requirements    in
         order to be subject to this act?

  Your question   essentially  tracks the    definitions   of
  "continuing care" and "entrance fee" that are set out in
  the statute.   See V.T.C.S. art. 8876, §2(2), (3).       We
  therefore answer your question in the affirmative:      the
  five elements you set out must be present for a facility
  to be a continuing   care facility subject to regulation
  under the statute.     Whether those five elements      are
  present in a given facility must be decided in the context
  of all relevant facts and circumstances.  Of course, it is
  the substance  of the agreement, not the form, that is
  determined, and subterfuges will not avoid the statute.

                         SUMMARY

             A continuing care facility described   in
        section 4(g) of article 8876, V.T.C.S., is
     entitled to receive a certificate of authority
        without meeting the criteria found in section
        4(c) of that statute. Except for the section
        4(c) criteria,   the entire statute becomes
        applicable on its effective date to section
        4(g) facilities.   If a facility is merely
        under construction on September 1, 1987, or if
        the provider has done no more than incur sub-
        stantial  financial obligations   toward con-
        struction  of a    facility, the    transition
        provision found in section 20 is not applic-
        able to it. The commissioner has authority to
        make the fact findings necessary to implement
        section 4(g) of article 8876, V.T.C.S.




                                      JIM     MATTOX
                                      Attorney General of Texas

  MARY KELLER
  First Assistant Attorney General

  LOU MCCREARY

• Executive Assistant Attorney General

                           p. 4407
  

Mr. Edwin J. Smith, Jr. - Page 12 (JM-895)

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Susan L. Garrison
Assistant Attorney General

                      p. 4408