                        The Attorney                General of Texas
                                          December     11,    1979

MARK WHITE
Attorney General


                   Honorable John J. Kavanagh, M.D.            Opinion No. Mw- 9 6
                   Commissioner
                   Texas Department of Mental Health           Re: Whether      facilities     of the
                     and Mental Retardation                    Department of Mental Health and
                   Box 12666, Capitol Station                  Mental Retardation are authorized
                   Austin, Texas 767R                          to pay application       fees to the
                                                               Health Facilities Commission for
                                                               projects     donated         to    the
                                                               Department.

                   Dear Dr. Kavanagh:

                          You have requested our opinion regarding whether facilities of the
                   Department of Mental Health and Mental Retardation are authorized to pay
                   application fees to the Health Facilities Commission under article 4416h,
                   V.T.C.S.

                        The purpose of article      4416h, the Health Planning and Development
                   Act of 1975, is to insure that

                               appropriate health planning activities be undertaken
                               and implemented and that health-care     services and
                               facilities be provided in a manner that is cost
                               effective and that is compatible with the health-care
                               needs of the various areas and populations ~of the
                               state.

                   V.T.C.S. art. 4416h, S1.02. To achieve this purpose, every “person” must
                   obtain a certificate of need or an exemption certificate from the Health
                   Facilities Commission before commencing any project to:

                               (1) 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;




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Honorable John J. Kavanagh, M.D.       -    Page Two        (tIw-26)



           (4)   convert a structure   into a health-csre     facility;   or

           (5)   organize an HMO which requires a new or modified facility.

V.T.C.S. art. 4416h, S 3.01(a). An applicant is eligible for an exemption certificate under
certain circumstances, as, for example, when “in the case of modification of an existing
facility the total cost of the proposed modification will not exceed $100,000.” V.T.C.S.
art. 441611,S 3.02(aX3). Otherwise, for any project within the terms of section 3.01, the
applicant  must seek a certificate  of need accompanied by the requisite application fee,
which ranges from $25.00 to $3,500.00, depending upon the type and size of the project.
Sections 3.04, 3.05.

        You state that certain capital improvement projects at the Department of Mental
Health and Mental Retardation are undertaken by the volunteer councils of the various
facilities of the department.   No appropriated funds are used in these projects, but they
are donated to the department upon completion.

      Section 3.04(b) of article 4416h states that “[elach application for a certificate of
need must be accompanied by the required application fee,” and section 3.01(a) directs
that “each person” obtain a certificate     of need or an exemption certificate      for any
proposed project listed therein. Section 1.03(14) defines “person” as

           an individual, sole proprietorship, charity, trust, estate, institution,
           group, association, firm, joint venture, partnership,       joint stock
           compsny, cooperative, corporation, the state or a political sub-
           division 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.

It is clear that “person” includes a volunteer council of a facility of the Department of
Mental Health and Mental Retardation.         It is therefore our opinion that a volunteer
council is required to pay the requisite fee to the Health Facilities Commission in order to
undertake a project contemplated by article 4416h. If, however, the Department can gain
a benefit by contracting with the volunteer council to pay the application fee, then the
Department is authorized to pay the fee if it has available funds. Thus, for example, if
the volunteer council agreed to donate a swimming pool or recreation building to the
Department     on the condition that the Department          pay the application   fee, the
Department could enter into such an agreement.

                                           SUMMARY

           A volunteer council of a facility of the Texas Department of
           Mental Health and Mental Retardation      is required to pay the
           appropriate fee to the Health Facilities Commission in order to
           undertake a project contemplated by article 4416h, V.T.C.S. The




                                              P.   298
Honorable John J. Kavanagh, M.D.       -   Page Three    (MW-96)



           Department of Mental Health and Mental Retardation may agree to
           pay the application fee on behalf of the council, if payment of the
           fee results in a benefit to the Department.



                                           xd
                                                MARK     WHITE
                                                Attorney General   of   Texas

JOHN W. FAINTER, JR.
First Assistant Attorney General

TED L. HARTLEY
Executive Assistant Attorney General

Prepared by Rick Gilpin
Ass&ant Attorney General

APPROVED:
OPINION COMMITTEE

C. Robert Heath, Chairman
David B. Brooks
Susan Garrison
Rick Gilpin
William G Reid
Bruce Youngblood




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