Adopted Rules Title 34

TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 16. COMPTROLLER GRANT PROGRAMS

SUBCHAPTER C. TEXAS OPIOID ABATEMENT FUND PROGRAM

The Comptroller of Public Accounts adopts the repeal of §16.222, concerning references, as published in the December 29, 2023, issue of the Texas Register (48 TexReg 8179), because this section is no longer needed. The repeal will not be republished.

This section, which specifies which statutes apply to the statewide opioid settlement agreement, was included in this subchapter because the statutes relating to the statewide opioid settlement agreement and the statutes relating to infrastructure and broadband funding originally used some of the same section numbers and were contained in subchapters that were both entitled "Subchapter R." However, in 2023, the legislature cleared up this issue by renumbering the statutes relating to infrastructure and broadband funding and placing them in new Subchapter S, while keeping the statutes relating to the statewide opioid settlement agreement in Subchapter R.

The comptroller did not received comments regarding adoption of the repeal.

The repeal is adopted under Government Code, §403.511, which authorizes the comptroller to adopt rules necessary to implement Government Code, Chapter 403, Subchapter R, concerning statewide opioid settlement agreements.

The repeal implements Government Code, Chapter 403, Subchapter R.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 27, 2024.

TRD-202400875

Victoria North

General Counsel for Fiscal and Agency Affairs

Comptroller of Public Accounts

Effective date: March 18, 2024

Proposal publication date: December 29, 2023

For further information, please call: (512) 475-2220

34 TAC §16.222

The Comptroller of Public Accounts adopts new §16.222, concerning hospital district allocations, with changes to the proposed text as published in the December 29, 2023, issue of the Texas Register (48 TexReg 8180). The rule will be republished.

The new section governs the Texas Opioid Abatement Council's allocation and distribution of money received from statewide opioid settlement agreements to all hospital districts in Texas under Government Code, §403.508(a)(2), as enacted by Senate Bill 1827, 87th Legislature, R.S., 2021.

Subsection (a) requires the council to make periodic distributions of money allocated to hospital districts.

Subsection (b) describes when money will be distributed to hospital districts by the council.

Subsection (c) provides that the total amount of each distribution of money to hospital districts will be determined by the council.

Subsection (d) explains how the initial distribution of money will be allocated to hospital districts.

Subsection (e) describes how subsequent distributions of money will be allocated to hospital districts.

Subsection (f) lists the specific hospital districts that will be distributed money only from the initial distribution by the council and the amount of money each of the listed hospital districts will receive from the initial distribution.

Subsection (g) lists the specific hospital districts that will be distributed money during the initial and subsequent distributions by the council and the percentage that will be used to calculate the distribution to each of the listed hospital districts.

Subsection (h) allows the council to round amounts of money allocated to individual hospital districts down to the nearest whole dollar. It also requires the council to retain any remaining money caused by rounding for future allocation to hospital districts.

Subsection (i) sets forth the requirements for hospital districts to receive a distribution of money from the council.

Subsection (j) requires money received by a hospital district to be used by the hospital district to remediate the opioid crisis, including providing assistance in one or more of the categories described in §16.201(b) of this subchapter (treatment and coordination of care, prevention and public safety; recovery support services; or workforce development and training); or if a court order or settlement agreement requires the money to be used for one or more specific purposes, for a permissible use provided by that court order or settlement agreement.

Subsection (k) allows the council to cancel a distribution of money to a hospital district and retain the money for future allocation to hospital districts if the hospital district does not satisfy the requirements to receive a distribution of money from the council under subsection (i).

Subsection (l) requires a hospital district that receives a distribution of money from the council to submit periodic reports to the council's director to ensure compliance with the permitted uses of the money distributed. It also allows the council's director to determine the frequency, format, and requirements of the reports.

Subsection (m) allows the council to monitor a hospital district that receives money under this section to ensure compliance with the permissible uses of the money distributed.

Subsection (n) describes the actions the council may take if the council finds that a hospital district has failed to comply with the requirements of subsection (j).

Subsection (o) requires money refunded to the council under subsection (n) to be retained by the council for future allocation to hospital districts under this section.

Subsection (p) provides that, except as otherwise provided in this section, this section and §16.200 of this subchapter are the only provisions in this subchapter that apply to the allocation of money to hospital districts under Government Code, §403.508(a)(2). The comptroller corrected a typographical error in this subsection by changing "§16.200 of subchapter title" to "§16.200 of this subchapter."

The comptroller received comments regarding adoption of the amendment from Bethany (no last name given); the Texas Organization of Rural & County Hospitals (TORCH); and the Teaching Hospitals of Texas (THOT).

Bethany states that, based on her years of experience, "hospitals are not the places to handle the opioid epidemic" because "they are grossly under educated about the patients, the medications, the details of what truly happens to the medically dependent on opioids population and the medically ignored addict population." She believes that this money would be better used "to build the type of education, facility or system to help those at the mercy of this monopolized medicine" and that grants should be made to the family members "who cared, nurtured and gave much more than their time to their loved ones, dependent, or addicted to opioids." The council thanks Bethany for submitting these comments; however, the council is required by law to allocate this money to hospital districts in Texas under Government Code, §403.508(a)(2). Since the council has no authority to change this statutory requirement, no changes to this section are necessary in response to these comments.

TORCH expresses "support for the rule as it relates to hospital district allocations." TORCH adds that they "received nothing but supportive feedback" regarding the rule from their network of rural hospital leaders. The council thanks TORCH for submitting these comments. No changes to this section are necessary in response to these comments.

THOT expresses their appreciation for the work of the council, and staff "in thoughtfully developing these rules" and working with associations such as THOT and TORCH "to create the proposed approach for distributing funding to Texas' hospital districts."

In addition, THOT presents three recommendations. First, THOT "recommends amending §16.222 (i)(1)(B)(i) to allow for funding to offset documented past opioid related costs or make it clear that funding can be used to support existing programs designed to address the opioid crisis, both directly and indirectly." THOT believes this amendment should be made because "the statutory 15% allocation to hospital districts is for past harm caused by the opioid crisis... to be distributed based on the allocation determined by the {c}ouncil" and because creating new remediation programs would be "extremely challenging from an operational perspective" since "the frequency and amount of funding being allocated to hospital districts are unknown." The council declines to make this recommended change because the section already authorizes the use of funds for opioid abatement programs, regardless of when the program was created. This section complies with the Texas constitutional requirement that public funds be used for a public purpose. It is consistent with the Government Code, §403.503 directive for the council to ensure that funds are allocated fairly and spent to remediate the opioid crisis in this state by using efficient and cost-effective methods that are directed to regions of this state experiencing opioid-related harms.

Second, THOT "recommends amending §16.222(k)-(n) to provide explicit criteria and processes for any funding recoupments related to new or existing programs to remediate the opioid crisis." THOT states that, although they "understand and support ensuring fiduciary responsibility and flexibility in use of funds as provided in the proposed rule," "flexibility becomes a liability" if an ability to cure or correct concerns identified with use of funds is not articulated. In response to this comment, the council agrees to make changes to subsection (n) to more fully describe procedures to ensure compliance, including a process for the council to provide written notice to the hospital district of any allegations of noncompliance and a process to provide the hospital district with an opportunity to respond to the allegations before the council determines whether the hospital district has failed to comply with the requirements of subsection (j). The council notes that the statute and this section do not impose a deadline for expending the funds to remediate the opioid crisis. Further, the council is aware that hospital districts in Texas incur significant costs for opioid abatement and will not find it difficult to spend the funds for opioid abatement in the areas of treatment and coordination of care, prevention and public safety, recovery and support services or workforce development and training. In addition. the council declines to amend subsection (m) to require an audit because that subsection authorizes monitoring, which may include an audit, and a new audit specific to this purpose might not be needed in all circumstances.

Third, "THOT supports the {c}omptroller's development, with hospital district input, and use of templates to clarify and consolidate the data and information needed" in subsection (h)(1) concerning resolutions, subsection (i)(2) concerning the authorized official's and hospital district's information, and subsection (l) concerning reports. Although no changes to this section are necessary in response to this comment, the council intends to continue to work with hospital districts to simplify and clarify the allocation process.

The council thanks THOT for submitting these comments.

The new section is adopted under Government Code, §403.511, which authorizes the comptroller to adopt rules necessary to implement Government Code, Chapter 403, Subchapter R, concerning statewide opioid settlement agreements.

The new section implements Government Code, Chapter 403, Subchapter R.

§16.222.Hospital District Allocations.

(a) The council shall make periodic distributions of money allocated to hospital districts under Government Code, §403.508(a)(2).

(b) The council shall distribute money under subsection (a) of this section when, based on the total amount of money to be distributed, the smallest amount of the money that would be allocated to an individual hospital district equals at least $1,000. Additionally, the council may, at the council's discretion, distribute money under subsection (a) of this section when, based on the total amount of money to be distributed, an individual hospital district would receive less than $1000.

(c) The total amount of each distribution of money under subsection (a) of this section shall be determined by the council.

(d) The initial distribution of money under subsection (a) of this section shall be allocated as follows:

(1) to the hospital districts listed in subsection (f) of this section in the dollar amounts listed in that subsection; and

(2) the remainder to the hospital districts listed in subsection (g) of this section in amounts determined by multiplying the percentages listed in that subsection by the remaining amount to be distributed.

(e) Any subsequent distributions of money under subsection (a) of this section shall be allocated to the hospital districts listed in subsection (g) of this section in amounts determined by multiplying the percentages listed in that subsection by the amount to be distributed.

(f) Group One:

Figure: 34 TAC §16.222(f) (.pdf)

(g) Group Two:

Figure: 34 TAC §16.222(g) (.pdf)

(h) Amounts allocated under subsections (d)(2) and (e) of this section may be rounded down to the nearest whole dollar. Any remaining money caused by rounding shall be retained for future allocation to hospital districts under this section.

(i) Prior to, and as a condition of, receiving a distribution of money under subsection (a) of this section, a hospital district listed in subsection (f) or (g) of this section must, for each distribution:

(1) submit to the director a resolution from the hospital district's governing body that:

(A) designates, by name and title, an authorized official who has the authority to act on behalf of the hospital district in all matters related to the distribution, including the authority to sign all official documents related to the distribution;

(B) affirms that the hospital district will use all money received by the hospital district under this section:

(i) to remediate the opioid crisis, including providing assistance in one or more of the categories described in §16.201(b) of this subchapter; or

(ii) if a court order or settlement agreement requires the money to be used for one or more specific purposes, for a permissible use provided by that court order or settlement agreement; and

(C) affirms that, in the event of loss or misuse of grant funds, the hospital district shall return all funds to the council;

(2) submit to the director in a form acceptable to the director:

(A) the authorized official's title, mailing address, telephone number, and email address;

(B) the hospital district's physical address; and

(C) any other documents or information required by the director, including any documents or information required for the secure transfer of money to the hospital district or required by a court order or settlement agreement that applies to all or a portion of the money being distributed;

(3) if there is a change of authorized official, submit to the director a new resolution from the hospital district's governing body that contains the information required under paragraph (1) of this subsection;

(4) notify the director as soon as practicable of any change in the information provided under paragraph (2) of this subsection;

(5) be in compliance with subsection (j) of this section for any prior distributions; and

(6) be in compliance with the reporting requirements in subsection (l) of this section for any prior distributions.

(j) Money received by a hospital district under this section must be used by the hospital district for the purposes described in subsection (i)(1)(B) of this section.

(k) If a hospital district does not satisfy the requirements to receive a distribution under subsection (i) of this section, the distribution to that hospital district may be cancelled and, if cancelled, the money shall be retained by the council for future allocation to hospital districts under this section.

(l) A hospital district that receives a distribution of money under this section must submit periodic reports to the director to ensure that the hospital district complies with subsection (j) of this section. The frequency, format, and requirements of the reports shall be determined at the discretion of the director.

(m) The council may monitor a hospital district that receives money under this section to ensure that the hospital district complies with subsection (j) of this section.

(n) If the council finds that a hospital district has failed to comply with the requirements of subsection (j) of this section, the council may do one or more of the following:

(1) instruct the director to provide the hospital district written notice of the alleged failure to comply;

(2) provide the hospital district with an opportunity to respond;

(3) require the hospital district to cure the failure to comply to the satisfaction of the council;

(4) require the hospital district to refund to the council all or a portion of the money received by the hospital district under this section; and

(5) exercise any other legal remedies available at law.

(o) Money refunded to the council under subsection (n) of this section shall be retained by the council for future allocation to hospital districts under this section.

(p) Except as otherwise provided in this section, this section and §16.200 of this subchapter are the only provisions in this subchapter that apply to the allocation of money to hospital districts under Government Code, §403.508(a)(2).