- . . 

The Attorney General of Texas 

September 4, 1980 

MARK WHITE 

Attorney General 

Dr. Lauro F. Cavazcs, President 

Texas Tech University 

Texas Tech University Health 

Sciences Center 

P. 0. Box 4349 

Lubbock, Texas 79409 

Opinion No. MW- 2 3 1 

Re: Whether a state medical 

school is required to obtain a 

certificate of need or an exemption 

certificate from the Texas Health 

Facilities Commission 

Dear President Cavazca: 

You have requested our opinion regarding whether a state medical 

school is required to obtain a certificate of need or an exemption certificate 

from the Texas Health Facilities Commission. Section 3.01(a) of article 

4418h, V.T.C.S., provides: 

Each person must obtain from the commission a 

certificate of need or an exemption certificate in 

accordance with this Act for a.propcsed project to: 

(1) expand or substantially expand a service 

currently offered or provide a service not 

currently offered by the facility; 

(2) construct a new facility or change the bed 

capacity of an existing facility; 

(3) modify an existing facility; 

(4) convert a structure into a health-care facility; 

or 

(5) organize an HMO. 

“Person” is &fined by the statute as: 

an individual, sole proprietorship, charity, trust, 

estate, institution, group, association, firm, joint 

venture, partnership, joint stock company, cooperative, corporation, the state or a political subdivision 

P. 733 
Dr. Lauro F. Cavazos - Page Two (MW-231) 

or instrumentality of the state, the federal government or a 

political subdivision or instrumentality of the federal government, any receiver, trustee, assignee, or other similar 

representative or any other legal entity. 

Section 1.03(14). As to the scope of “facility” for purposes of section 3.01(a), the 

statute states: 

(9) ‘Health-care facility,’ referred to as ‘facility,’ includes, 

regardless of ownership, but is not limited to, a public or 

private hospital, institution, extended care facility, skilled 

nursing facility, intermediate care facility, home health agency, 

outpatient care facility, outpatient surgical and single 

procedure facility, ambulatory healthcare facility, health 

center, family planning clinic, ki&ey disease treatment 

facility, radiation therapy facility, alcoholism and drug treatment facility, health maintenance organization, and other 

specialized facilities where inpatient or outpatient health-care 

services for observation, diagnosis, active treatment, or overnight care for patients with obstetrical, medical, mental or 

psychiatric, surgical, tubercular, alcoholic, chronic, or rehabilitative conditions are provided requiring daily direct supervision 

by a physician or a practitioner of the healing arts, but does not 

include the office of those physicians or practitioners singly or 

in groups in the conduct of their profession. 

Section 1.03(g). 

On its face, article 4418h clearly embraces a state medical school within its 

definition of “person,” as an “instrumentality of the state.” In the definition of “health 

care facility,” no exception is provided for a state medical school, although the offices 

of physicians and practitioners are specifically excluded. Although you contend that 

the application of article 4418h to a state medical school would subject such an 

institution to regulation by the Health Facilities Commission, in addition to regulation 

by its board of regents and by the Coordinating Board of the Texas College and 

University System, we do not believe that such a result is either unreasonable or 

without precedent. In Attorney General Opinion H-464 (1974), for example, this office 

held that the University of Texas might hold a mixed beverage permit from the Texas 

Alcoholic Beverage Commission. 

Inclusion of a state medical school within the ambit of article 4418h, however, 

does not mean that all, or even most, of its activities are subject to regulation by the 

Health Facilities Commission. A certificate of need or an exemption certificate is 

required only when an entity proposes a project within the meaning of s&divisions l-5 

of s§ion (a) of section 3.01(d). Furthermore, a state medical school is not a 

“facility” per se. Only where such an institution proposes the construction, expansion 

or modification of a “facility” within the terms of section 1.03(9) does the requirement 

P. 734 
Dr. Lauro F. Cavazos - Page Three (NW-2311 

arise. The “facility” which is the subject of the proposal must, in accordance with the 

statute, provide: 

inpatient or outpatient health-care services for observation, 

diagnosis, active treatment, or overnight care for patients with 

obstetrical, medical, mental or psychiatric, surgical, tubercular, 

alcoholic, chronic, or rehabilitative conditions. . . requiring 

daily direct supervision by a physician or a practitioner of the 

healing arts. 

Within these limits, we believe that any entity, including a state medical school, 

must obtain a certificate of need or an exemption certificate from the Health Facilities 

Commission for any proposed project covered by s&divisions (l)-(5) of subsection (a) of 

section 3.01. Of course, whether any particular project is included within the scope of the 

Commission’s regulatory power is a fact question to be determined in the first instance by 

the Commission itself. 

SUMMARY 

A state medical school is required to obtain a certificate of 

need or an exemption certificate from the Health Facilities 

Commission before commencing any project included within 

subdivisions (l)-(5) of subsection (a), section 3.01, article 4418h, 

V.T.C.S. Whether any particular project is included within 

those provisions is a fact question to be determined in the first 

instance by the Health Facilities Commission. 

A 

km.e?wh.e?~ 

MARK WHITE 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

Prepared by Rick Gilpin 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

C. Robert Heath, Chairmen 

Jon Bible 

Jerry Cain 

Susan Garrison 

Rick Gilpin 

P. 735