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Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB2607

Regular Session

Relating to the terms of the members of the board of hospital managers and leasing authority of the Walker County Hospital District.

Government Affairs & Regulatory Compliance Analysis

HB2607: Government Affairs Overview

HB2607 immediately doubles the maximum lease term for Walker County Hospital District assets from 40 to 80 years and establishes four-year, staggered terms for the Board of Managers. Healthcare operators, developers, and financial institutions involved with District property must immediately recalibrate capital planning models and initiate lease renegotiations to secure long-term site control.

Rep. Trey Wharton·House Bill·Regular Session

Low
Low Cost
Effective:2025-06-20
Enforcing Agencies

Walker County Hospital District Board of Managers

Business Impact

Who HB2607 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: low

Standard regulatory changes (effective 2025-06-20). Review during normal business planning.

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Healthcare

Affected business types:

  • Hospitals
  • Healthcare systems
  • Medical practices
  • Health insurance providers
View all healthcare legislation

Key Operational Considerations

  • 1Lease Renegotiation: Review all active ground leases and facility use agreements with the District. The law now authorizes terms up to 80 years.
  • 2Sub-Lease Rights: If you are a prime tenant, amend your master lease to ensure the right to sublease extends through the new maximum term.
  • 3Government Relations: Update your government affairs strategy. Board members now serve four-year terms, requiring a shift from short-term electioneering to long-term relationship management.

Estimated Cost Impact

lowMinimal cost impact anticipated.

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HB2607
Relating to the terms of the members of the board of hospital managers and leasing authority of the Walker County Hospital District.
Low Urgency
Passed with Opposition
House Vote142 - 0
YEA
100% in favor142 voting
Senate Vote30 - 1
YEA
97% in favor31 voting
1
Total Opposition Votes
Cost Impact
Low
Effective
2025-06-20
Enforcing Agencies
Walker County Hospital District ...
Primary Author: Rep. Trey Wharton
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: June 20, 2025 (Immediately Effective).
  • Compliance Deadline: Immediate Action Required for Lease Strategy. While there is no penalty deadline, operators seeking to extend ground leases or facility agreements should file requests before the next fiscal planning cycle begins.
  • Agency Rulemaking: The Walker County Hospital District Board of Managers must update internal bylaws to reflect the four-year term structure. Expect updated leasing policies regarding the 80-year cap to be promulgated within 60-90 days.

Immediate Action Plan

  • 1. Audit Real Estate Portfolio: Identify all assets leased from the Walker County Hospital District.
  • 2. Calculate Capital Impact: Determine the financial benefit of extending current 40-year capped leases to 80 years (e.g., loan collateralization, depreciation).
  • 3. Initiate Board Contact: Submit a formal request to the Board of Managers to open negotiations for lease extensions under the new statutory authority.
  • 4. Update Lender Agreements: Notify lenders holding debt on these facilities; an extended ground lease may improve covenant compliance or borrowing capacity.

Operational Changes Required

Contracts

  • Lease Renegotiation: Review all active ground leases and facility use agreements with the District. The law now authorizes terms up to 80 years.
  • Amortization Schedules: Adjust financial models for capital improvements. The extended term allows for longer amortization periods, potentially making previously unviable infrastructure projects financially feasible.
  • Sub-Lease Rights: If you are a prime tenant, amend your master lease to ensure the right to sublease extends through the new maximum term.

Hiring/Training

  • Government Relations: Update your government affairs strategy. Board members now serve four-year terms, requiring a shift from short-term electioneering to long-term relationship management.

Reporting & Record-Keeping

  • Lease Abstracts: Update legal files to flag all District properties as eligible for 80-year terms.
  • Asset Valuation: Re-evaluate the book value of leasehold interests based on the potential for term extension.

Fees & Costs

  • Legal & Administrative: Budget for legal counsel to draft lease amendments.
  • Consideration: Be prepared for the Board to request updated fair market value appraisals or additional community benefit concessions in exchange for granting the full 80-year term.

Strategic Ambiguities & Considerations

  • "District's Best Interest": The statute authorizes the Board to lease to "any person" on terms the Board considers in the "best interest" of the District. This phrase grants the Board broad discretion.
  • *Warning:* The Board may utilize this discretion to attach non-monetary conditions to lease extensions, such as mandated indigent care levels or specific service line guarantees.
  • Transition of Terms: While the law mandates four-year terms, the specific mechanics of the transition for *sitting* members may be subject to Board interpretation until bylaws are formally amended.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 10, 2025
Passed House
May 1, 2025
Passed Senate
May 19, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsWalker County Hospital DistrictSpecial Districts & AuthoritiesSpecial Districts & Authorities--hospital
03

House Authors

Rep. Trey WhartonRepublican · Primary Author

Senate Sponsor

Sen. Charles SchwertnerRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Trey Wharton

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Related by Topic

View more Walker County Hospital District legislation
Quick Reference

Frequently Asked Questions

Common questions about HB2607

Q

What does Texas HB2607 do?

HB2607 immediately doubles the maximum lease term for Walker County Hospital District assets from 40 to 80 years and establishes four-year, staggered terms for the Board of Managers. Healthcare operators, developers, and financial institutions involved with District property must immediately recalibrate capital planning models and initiate lease renegotiations to secure long-term site control.

Q

Who authored HB2607?

HB2607 was authored by Texas Representative Trey Wharton during the Regular Session.

Q

When was HB2607 signed into law?

HB2607 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB2607?

HB2607 is enforced by Walker County Hospital District Board of Managers.

Q

How significant are the changes in HB2607?

The regulatory priority for HB2607 is rated as "low". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB2607?

The cost impact of HB2607 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB2607 address?

HB2607 addresses topics including walker county hospital district, special districts & authorities and special districts & authorities--hospital.

Q

What are the key dates for HB2607?

Key dates for HB2607: Effective date is 2025-06-20. Consult with legal counsel regarding applicability.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026