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# 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. Box4349 Lubbock, Texas 79409 Opinion No.MW-231 Re: Whether a state medical school is required to obtain a certificate ofneed oran 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 acertificate ofneed oran 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 bythe facility; (2) construct a new facility or change the bed capacity ofanexisting facility; (3) modify an existing facility; (4) convert astructure into ahealth-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

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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 orany 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 aphysician or apractitioner ofthe healing arts, but does not include the office of those physicians or practitioners singly or ingroups inthe conduct oftheir profession. Section 1.03(g). On its face, article 4418h clearly embraces a state medical school within its definition of “person,” as an “instrumentality ofthe state.” Inthe definition of“health care facility,” no exception isprovided for astate 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, inaddition 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. InAttorney General Opinion H-464 (1974),for example, this office held that the University ofTexas 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, ofits 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 ofsection 1.03(9)does the requirement

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arise. The “facility” which isthe subject of the proposal must, inaccordance with the statute, provide:

inpatient or outpatient health-care services for observation, diagnosis, active treatment, or overnight care for patients with obstetrical, medical, mental orpsychiatric, 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 isincluded within the scope ofthe Commission’s regulatory power isa fact question tobedetermined inthe first instance by the Commission itself. SUMMARY

Astate 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 bythe Health Facilities Commission. A



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MARK WHITE Attorney General ofTexas JOHN W.FAINTER, JR. First Assistant Attorney General Prepared byRick Gilpin Assistant Attorney General APPROVED: OPINION COMMITTEE C.Robert Heath, Chairmen Jon Bible Jerry Cain Susan Garrison Rick Gilpin

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