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.

LowStandard timeline

Low Cost

Effective:2025-06-20

Enforcing Agencies

Walker County Hospital District Board of Managers

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.

Need Help Understanding Implementation?

Our government affairs experts can walk you through this bill's specific impact on your operations.

Schedule Consultation

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.

Legislative Timeline

This bill's path through the Texas Legislature

TopicsWalker County Hospital District Special Districts & Authorities Special Districts & Authorities--hospital

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

H.B. 2607

By: Wharton

Intergovernmental Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The 62nd Texas Legislature authorized the creation of the Walker County Hospital District, and in 1975, a majority of the voters of Walker County approved the creation of the district in an election. Under current law, the district has full responsibility for providing hospital care for the district's inhabitants and may lease all or parts of the buildings and facilities comprising the hospital system to any person on terms considered to be in the district's best interest, for a term not to exceed forty years. The bill author has informed the committee that the district currently owns undeveloped property that it is not expressly authorized to lease, even though several other hospital districts in Texas are authorized to lease such undeveloped property, and that the district has requested the authority to enter into long-term lease agreements with respect to its undeveloped property in order to spur construction of facilities to be used for hospital purposes. Additionally, while the district's board of managers may already serve four-year terms under applicable Health and Safety Code provisions relating to hospital districts, the district seeks to expressly establish four-year terms for the managers in its enabling legislation, as several other hospital districts have done within their enabling legislation. H.B. 2607 seeks to address these issues by expanding the leasing authority of the Walker County Hospital District, extending the maximum term of a district lease, and establishing that the members of the district's board of hospital managers serve staggered four-year terms.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 2607 amends the Special District Local Laws Code to change the terms of the members of the board of hospital managers of the Walker County Hospital District. Current law establishes staggered two-year terms, unless four-year terms are established under applicable Health and Safety Code provisions, with the terms of two or three managers expiring each year as appropriate, but the bill establishes staggered four-year terms with the terms of two or three managers expiring each even-numbered year as appropriate. The bill also changes the maximum term of a district lease from 40 years to 80 years and, with respect to the district's authority to lease all or part of the buildings and facilities comprising the hospital system to any person on terms considered to be in the district's best interest, revises that authority to authorize the lease of all or part of the district's property, including such buildings and facilities, on those terms.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2025.

House Authors

Rep. Trey WhartonRepublican · Primary Author

Senate Sponsor

Sen. Charles SchwertnerRepublican · Primary Sponsor

Bill Text(with markup)

H.B. No. 2607

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the terms of the members of the board of hospital
	managers and leasing authority of the Walker County Hospital
	District.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 1111.051(b), Special District Local Laws
	Code, is amended to read as follows:
	(b) Managers [~~Unless four-year terms are established under~~
	~~Section 285.081, Health and Safety Code, managers~~] serve staggered
	four-year [~~two-year~~] terms with the terms of two or three managers
	expiring each even-numbered year as appropriate.
	SECTION 2. Section 1111.108(a), Special District Local Laws
	Code, is amended to read as follows:
	(a) The district through the board may lease all or part of
	the district's property, including the buildings and facilities
	comprising the hospital system, to any person on terms considered
	to be in the district's best interest. The term of a lease may not
	exceed 80 [40] years.
	SECTION 3. This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution. If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 28, 2025

TO:	Honorable Cecil Bell, Chair, House Committee on Intergovernmental Affairs

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB2607 by Wharton (Relating to the terms of the members of the board of hospital managers and leasing authority of the Walker County Hospital District.), As Introduced

No fiscal implication to the State is anticipated.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

529 Health and Human Services Commission

LBB Staff:

JMc, SZ, BC, CWi

Related Legislation

Explore more bills from this author and on related topics

Frequently Asked Questions

Common questions about HB2607

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. Implementation Timeline Effective Date: June 20, 2025 (Immediately Effective).

Who authored HB2607?

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

When was HB2607 signed into law?

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

Which agencies enforce HB2607?

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

How urgent is compliance with HB2607?

The compliance urgency for HB2607 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

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.

What topics does HB2607 address?

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

Legislative data provided by LegiScanLast updated: November 25, 2025

Need Strategic Guidance on This Bill?

Need help with Government Relations, Lobbying, or compliance? JD Key Consulting has the expertise you're looking for.