# The Attorney General of Texas March 15, 1984 JIM MATTOX Attorney General

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### r Ms. Rita Howitz ExecutiveDirector StatePen&o" Review Board P. 0. Box 13498 Austin,Texas 78711 Dear Ms. Howitz: Opinion No. JM-137 Re: Whether a hospital authority must register with the State PensionReview Board

Chapter 12 of title 1lOB.V.T.C.S., imposesvarious requirements on "public retirement systems." Section 12.001(2) of title 1lOB defines sucha systemas:

You have

. a co"ti"ui"g. organized program of service

retirement. disability retirement, or death benefits for officersor employeesof the statez a political subdivision, other than a program providing only workers' compensation benefits, a program administered by the federal government, Of
. . . . (Emphasisadded). asked whether the Richardson Hospital Authority is a "politicalsubdivision"within themeaning of thisprovision. Section 3 of article 4494r. V.T.C.S., authorizes counties to create county hospital authorities, and it expressly provides that suchauthoritiesare "politicalsubdivision[slof this State." On the other hand, section 3 of article 4437e, V.T.C.S., which authorizes cities to create city hospital authorities, such as the Richardson Hospital Authority, does not provide that such authorities are political subdivisions. We must determinewhether the failureof this latter provision to so provide means that the legislature did not intend for city hospital authorities to be classified as political subdivisions, or whether the omission of the words subdivision of this State," "political which appear in section 3 of article 4494r,was a mere oversighton the legislature'spart. Bole" V. Board of Firemen, Policemen and Fire Alarm Operators' Trustees of SanAntonio, 308 S.W.2d 904 (Tex.Civ. App. - SanAntonio 1957,writ ref'd), sets forth the criteria that are generallyused in determining whether a" entity is a "political subdivision." There, the court stated:

p. 583Ms. Rita Horwitz - Page 2 (m-137)

A political subdivisioncontemplates:geographical ares and boundaries, public elections, public officials, taxing power and a general public purpose orbenefit. Id. at 905. The second of these criteria was recently modified sub xentio by the Texas Supreme Court. In Guaranty Petrol= Corporationv. Armstrong, 609 S.W.2d 529, 531 (Tex. 1980). the court, distinguishing between a "political subdivision" and "a department, board or agency of the State," stated that

[mlembers of the governing body of a pollti~cal subdivisionare elected in local elections or are appointedby locallyelectedofficials. (Emphasis added). County hospital authorities clearly meet at least four of these five criteria. They have geographical area and boundaries. V.T.C.S. art. 4494r, 63. Members of theirboards of directorsare appointedby the governingbodies of the counties that created them. Id. 04. Said members are unquestionably "public officials." Finxy, county hospital authorities certainly promote "a general public purpose or benefit." County hospital authorities do not, however, have taxing power; instead, they have bonding authority. Id. 97 et seq. Notwithstanding the fact that county hospital authorities do not technically meet all five of the Bole" and Guaranty "political subdivision"criteria,however, such authorities clearlyare political subdivisions,because section 3 of article 4494r declares that they are. Like a county hospital authority, a city hospital authority has geographicalarea and boundaries, article 4437e. section 3, V.T.C.S., and a board of directors appointedby the city that created it. Id. 64. These directors are certainly "public officials," and the authoritypromotes "a generalpublicpurpose orbenefit." Like county hospital authorities,moreover, cityhospital authoritieshave bonding rather than taxing power. Id. P7 et seq. As noted, however, city hospital authorities are not expressly designated as "political subdivisions."
In our opinion, however, city hospital authorities should be deemed "political subdivisions"within the meaning of section 12.001 of title 1lOB. Only in a very literal sense do such authorities fail tomeet the "taxingpower" criterionof Bole" and Guaranty; one could reasonably argue, moreover, that this criterion is technically met, since bonding authority could be deemed an adequate substitute for taxing power, at least for purposes of this criterion. Even if this criterion is not precisely met, however, to conclude that city hospital authorities are for this reason not political subdivisions

p. 584, - Ms. Rita Horwitz - Page 3 (JM-137)

/4 is, in ourview, to give entirely toomuchweight towhat is at best a

flimsydistinction. Even more compelling is the fact that county and city hospital authorities meet the Bole" and Guaranty "political subdivision" criteria to precisely the same extent. Given this fact and the fact that county and city authorities are otherwise so similar, we can perceive no logical reason why the legislaturewould have wanted to include the former within the ambit of the term "political subdivision"but exclude the latter. We do not believe itwould have intended to subject only the former to the requirementsof chapter 12 of title 1lOB. Section 3 of article 4437e was enacted in 1957. Acts 1957, 55th Leg., ch. 472 at 1379. Section 3 of article 4494r was enacted in 1963. Acts 1963, 58th Leg., ch. 122 at 324. One reasonwhy only the latter mentions "political subdivisions" might be that when the legislature enacted this provision, it simply neglected to amend article 4437e. If section 3 of article 4437e had been enacted after section 3 of article 4494r, we believe the omission of any reference to "political subdivision"would be far more meaningful. Since the reverse occurred,however,we believe it is more likely that when it enacted article 4494r, the legislature simplywas not concernedwith article 4437e and thereforepaidno attention to it. For the foregoing reasons, we conclude that the Richardson Hospital Authority is a "political subdivision"within the meaning of section 12.001of title 1lOB. SUMMARY The Richardson Hospital Authority is a "political subdivision" within the meaning of section 12.001of title llOB,V.T.C.S.

JIM MATTOX AttorneyGeneralof Texas TOM GREEN FirstAssistantAttorneyGeneral DAVID R. RICHARDS ExecutiveAssistantAttorneyGeneral

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Ha. Rita Horwitz - Page 4 (JM-137)

Preparedby Jon Bible AssistantAttorneyGeneral APPROVED: OPINION COMMITTEE Rick Gilpin, Chairman Jon Bible Colin Carl SusanGarrison PatriciaAjnojosa JimNoellinger Nancy Sutton

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