In January of this year, Texas Scorecard posed the question: “Who Is Trying to Tax Granny In 2019?

The question appears to have been answered.

In the opening weeks of the 86th Texas Legislature, lobbyists for nursing homes and their operators shopped around a plan to revive a battle from legislative sessions past. The idea? A tax on residents of nursing home facilities that Republican lawmakers scuttled last session.

However, the issue is back on lawmakers’ docket.

As timid and reluctant as lawmakers were initially to carry the bill, three Republican state representatives have filed it in the Texas House. One Republican and two Democrats have done so in the Texas Senate. Who has decided to revive the pernicious measure for reconsideration?

One that conservatives would expect, State Rep. J.D. Sheffield (R-Gatesville), and one they likely wouldn’t, State Sen. Bryan Hughes (R-Mineola).

The Nursing Facility Reinvestment Allowance (NFRA), more commonly referred to as a “granny tax,” would allow the parent companies to nursing facilities to collect fees and matching federal funds.

Sheffield, who also authored the bill last session, closely mirrors his previous attempt in House Bill 3342 but with a few subtle, albeit less than transformational, changes.

Namely, the bill now includes a penalty of up to $20,000 for poor quality of implementation or nonparticipation.

Sheffield is joined this time by Republican State Reps. John Zerwas (Richmond) and Tom Oliverson (Cypress) as primary authors. All three members physicians by trade, it is noteworthy they are working to implement a tax on the very demographic they would otherwise be most inclined to help.

The Senate version carried by Hughes is a word-for-word clone.

In 2018, the Republican legislators that joined with Democrats to pass the measure through the Texas House took to social media to try and distance themselves from being called “tax raisers” in the Republican primary. By falsely labeling the measure as a mechanism to further boost federal Medicaid reimbursements to nursing home facilities, supporters of the bill mislead voters about the unequal sharing of additional costs associated with staying at a nursing home.

Texas Scorecard wrote the following of the policy back in 2018:

Estimates put the potential losses at primarily private-care homes close to $500,000 annually. And while some point to bill language preventing the tax from being passed through to residents, there’s no guarantee. An analysis by Dr. Deane Waldman, former Chief of Pediatric Cardiology at University of Chicago notes:


“There are loopholes in the wording of HB 2766 that could allow facilities to pass the cost of the tax on to residents. Many would be forced to do so to keep their doors open.”


Adding to the concerns over the Granny Tax are how the funds would be spent. The private Agent Corp. with that responsibility would be spun up by The Texas Health Care Association and other industry groups. Without legislative oversight, accountability simply cannot be ensured, and the expected $800 million collected under the scheme has the potential to invite rampant fraud.


All of this reeks of New Deal-style social engineering that conservatives have rightly opposed for decades. In fact, the Texas GOP Platform plank on Medicaid Reform reminds us that entanglements with federal programs do not comport with limited government principles, plainly stating that “We oppose any further expansion of Medicaid.”

Sheffield’s bill was referred to the Texas House Committee on Human Services on Monday. The bill’s companion, Senate Bill 1050, was referred to the Senate Finance Committee. Two Democrats, State Sens. Juan “Chuy” Hinojosa (McAllen) and Nathan Johnson (Dallas), signed onto the bill as coauthors earlier this week.

Destin Sensky

Destin Sensky serves as a Capitol Correspondent for Texas Scorecard covering the Texas Legislature, working to bring Texans the honest and accurate coverage they need to hold their elected officials in Austin accountable.


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