South Carolina General Assembly
107th Session, 1987-1988

Bill 2139


                    Current Status

Bill Number:               2139
Ratification Number:       288
Act Number                 201
Introducing Body:          House
Subject:                   Definitions under the Hospital Revenue
                           Bond Act
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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A201, R288, H2139)

AN ACT TO AMEND SECTION 44-7-1430, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS UNDER THE HOSPITAL REVENUE BOND ACT, SO AS TO MAKE CHANGES WITH RESPECT TO EXISTING DEFINITIONS, INCLUDING THE ADDITION OF NEW DEFINITIONS; TO AMEND SECTION 44-7-1640, RELATING TO THE CUMULATIVE CONSTRUCTION OF ARTICLE 11 OF CHAPTER 7 OF TITLE 44 REGARDING THE POWERS OF A COUNTY AND RELATING FURTHER TO THE ADOPTION OF A BOND RESOLUTION, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT THE AUTHORIZATION OF AN ISSUE OF BONDS THE PROCEEDS OF WHICH ARE LOANED TO MORE THAN ONE HOSPITAL AGENCY OR PUBLIC AGENCY TO CONSTRUCT OR ACQUIRE HOSPITAL FACILITIES, WHETHER OR NOT THE HOSPITAL FACILITIES ARE LOCATED OR WILL BE LOCATED IN THE JURISDICTION OF ONE OR MORE COUNTIES, MAY BE GOVERNED BY SECTIONS 44-7-1640 THROUGH 44-7-1720; TO AMEND ARTICLE 11 OF CHAPTER 7 OF TITLE 44, RELATING TO THE HOSPITAL REVENUE BOND ACT, BY ADDING SECTIONS 44-7-1650 THROUGH 44-7-1720 SO AS TO PROVIDE, AMONG OTHER THINGS, THAT THE AUTHORIZING ISSUER AND THE PROJECT COUNTY ARE AUTHORIZED AND EMPOWERED TO ENTER INTO AN INTERGOVERNMENTAL LOAN AGREEMENT TO FACILITATE THE FINANCING OF HOSPITAL FACILITIES, THAT PUBLIC AGENCIES AND HOSPITAL AGENCIES ARE EMPOWERED AND AUTHORIZED TO ENTER INTO SUBSIDIARY LOAN AGREEMENTS, AND THAT NEITHER THE MEMBERS OF THE COUNTY BOARD OF THE AUTHORIZING ISSUER OR THE PROJECT COUNTY NOR ANY PERSON EXECUTING ANY BONDS, THE INTERGOVERNMENTAL LOAN AGREEMENT, OR THE SUBSIDIARY LOAN AGREEMENT, ARE LIABLE PERSONALLY ON THE BONDS NOR SUBJECT TO ANY PERSONAL LIABILITY OR ACCOUNTABILITY BY REASON OF THE ISSUANCE OF THE BONDS; AND TO AMEND CHAPTER 21 OF TITLE 6, RELATING TO THE REVENUE BOND ACT FOR UTILITIES, BY ADDING SECTION 6-21-45 SO AS TO PROVIDE THAT, AS USED IN SECTION 6-21-50, THE PHRASE "HOSPITALS, NURSING HOME AND CARE FACILITIES" HAS THE SAME MEANING AS "HOSPITAL FACILITIES" AS DEFINED IN SECTION 44-7-1430.

Be it enacted by the General Assembly of the State of South Carolina:

Findings

SECTION 1. There exists in South Carolina a shortage of modern hospital facilities and a shortage of funds at reasonable rates of interest to finance hospital facilities. It is necessary and desirable to authorize the issuance of bonds so as to decrease the cost of financing hospital facilities by aggregating the capital requirements of hospital agencies and public agencies located in the State.

Definitions changed

SECTION 2. Section 44-7-1430 of the 1976 Code is amended to read:

"Section 44-7-1430. In this article, the following terms have the following meanings, unless the context otherwise requires:

(a) 'Authorizing issuer' means the county issuing bonds pursuant to Section 44-7-1640.

(b) 'Bonds' or 'revenue bonds' include notes, bonds, refunding bonds, and other obligations authorized to be issued by this article.

(c) 'Cost' as applied to hospital facilities means the cost of construction or acquisition; the cost of acquisition of property, including rights in land and other property, both real and personal and improved and unimproved; the cost of demolishing, removing, or relocating any buildings or structures on land so acquired, including the cost of acquiring any land to which the buildings or structures may be moved or relocated; the cost of all machinery, fixed and movable equipment and furnishings; financing charges, interest prior to and during construction and, if considered advisable by the State Board, for a period of not exceeding two years after the estimated date of completion of construction; the cost of engineering and architectural surveys, plans, and specifications; the cost of consulting and legal services and other expenses necessary or incidental to determining the feasibility or practicability of constructing or acquiring the hospital facilities; the cost of administrative and other expenses necessary or incidental to the construction or acquisition of the hospital facilities, and the financing of the construction or acquisition of the hospital facilities, including reasonable provision for working capital and a reserve for debt service; the cost of issuing bonds under this article, including legal fees and printing costs, and the cost of reimbursing any hospital agency any amounts expended for items that would have been proper costs of the hospital facilities within the meaning of this definition had the expenditure been made directly by the county board.

'Cost' also includes monies necessary to refinance or to refund any indebtedness of any 'hospital agency' or any 'public agency' incurred at any time for the purpose of providing hospital facilities.

(d) 'County board' means each of the governing bodies of the counties of the State, and in the event any hospital facilities are located in more than one county, the term 'county board' relates to the governing bodies of the counties in which the hospital facilities are located.

(e) 'Hospital agency' means any person, firm, corporation, association, or partnership whether for profit or not for profit, existing or created at any time and empowered to acquire, by lease or otherwise, operate, and maintain hospital facilities.

(f) 'Hospital facilities' means any one or more buildings, structures, additions, extensions, improvements, or other facilities, whether or not located on the same or contiguous site or sites (and including existing facilities), machinery, equipment, furnishings, or other real or personal property suitable for health care or medical care; and includes, without limitation, general hospitals, chronic diseases, maternity, mental, tuberculosis, and other specialized hospitals; facilities for emergency care, intensive care, and self-care; clinics and outpatient facilities; clinical, pathological, and other laboratories, hospital research facilities; extended care facilities; skilled nursing home facilities; nursing home facilities; retirement home facilities; laundries; residences and training facilities for nurses, interns, physicians, and other staff members; food preparation and food service facilities; administration buildings, central service, and other administrative facilities; communication, computer, and other electronic facilities; fire-fighting facilities; pharmaceutical and recreational facilities; storage space, X-ray, laser, radiotherapy, and other apparatus and equipment; dispensaries; utilities; vehicular parking lots and garages; office facilities for hospital staff members and physicians; and including, without limiting any of the foregoing, any other health and hospital facilities customarily under the jurisdiction of or provided by hospitals, or any combination of the foregoing, with all necessary, convenient, or related interests in land, machinery, apparatus, appliances, equipment, furnishings, appurtenances, site preparation, landscaping, and physical amenities.

(g) 'Intergovernmental loan agreement' means a loan agreement made by and between the authorizing issuer, as one party, and the project county, as the other party, to which bond proceeds are loaned to finance hospital facilities located in the jurisdiction of the project county and whereby the project county agrees to pay to the authorizing issuer or any assignee the sums required to meet the payment of the principal, interest, and redemption premium, if any, on any bonds, the proceeds of which will be used to finance hospital facilities in the jurisdiction of the project county.

(h) 'Loan agreement' means any agreement made by and between any county board as one party and any hospital agency or public agency as the other party or parties by which the hospital agency or public agency agrees to pay to a county or to any assignee of the county the sums required to meet the payment of the principal, interest, and redemption premium, if any, on any bonds. If the county is also the public agency and the hospital facilities are under the jurisdiction of the county board, the loan agreement may be in the form of a resolution adopted by the county board.

(i) 'Project county' means the county, other than the authorizing issuer, to which proceeds of the bonds are loaned to finance hospital facilities.

(j) 'Public agency' means any county, city, town, or hospital district of the State existing or created at any time pursuant to the laws of the State authorized to acquire, by lease or otherwise, operate, and maintain hospital facilities.

(k) 'State Board' means the State Budget and Control Board of South Carolina.

(l) 'Trust indenture' means any agreement pursuant to which any bonds are issued. A trust indenture may also create a mortgage lien or security interest, or a mortgage lien and security interest, to secure bonds issued under the indenture.

(m) 'Subsidiary loan agreement' means a loan agreement between a county and any hospital agency or public agency and includes an agreement between the authorizing issuer and a hospital agency or public agency with respect to hospital facilities located in the jurisdiction of the authorizing issuer."

Authorization of issue of bonds

SECTION 3. Section 44-7-1640 of the 1976 Code is amended to read:

"Section 44-7-1640. (A) Notwithstanding any other provision of this article, the authorization of an issue of bonds the proceeds of which are loaned to more than one hospital agency or public agency to construct or acquire hospital facilities, whether or not the hospital facilities are located or will be located in the jurisdiction of one or more counties, may be governed by Sections 44-7-1640 through 44-7-1720 of this article. The governing body of the authorizing issuer may authorize an issue of bonds for hospital facilities located outside the jurisdiction of the authorizing issuer, provided, hospital facilities will be simultaneously financed under this article in the jurisdiction of the authorizing issuer pursuant to a subsidiary loan agreement. However, no proceeds may be used to acquire or construct hospital facilities in any project county unless an intergovernmental loan agreement is executed between the authorizing issuer and the project county and unless the county board of the project county consents to the intergovernmental loan agreement.

(B) All bonds issued by an authorizing issuer under authority of this article are limited obligations of the authorizing issuer and the project county. The principal, interest, and redemption premiums, if any, on the bonds are payable solely out of the monies to be derived by the authorizing issuer pursuant to one or more intergovernmental loan agreements between the authorizing issuer and the project county or subsidiary loan agreements between the authorizing issuer and a hospital agency or public agency relating to the hospital facilities in the jurisdiction of the authorizing issuer which the bonds are issued to finance or refinance or a subsidiary loan agreement between the project county and the hospital agency or public agency within the jurisdiction of the project county. Bonds and interest coupons issued under authority of this article do not constitute an indebtedness of the authorizing issuer or project county within the meaning of any state constitutional provision or statutory limitation and do not constitute nor give rise to a pecuniary liability of the authorizing issuer or project county or a charge against their general credit or taxing powers, and this fact must be plainly stated on the face of each bond."

Intergovernmental loan agreement; subsidiary loan agreements; etc.

SECTION 4. Article 11 of Chapter 7 of Title 44 is amended by adding:

"Section 44-7-1650. The authorizing issuer and the project county are authorized and empowered to enter into an intergovernmental loan agreement to facilitate the financing of hospital facilities. An intergovernmental loan agreement obligates the project county to make payments to or on account of the authorizing issuer from payments received under one or more subsidiary loan agreements. The intergovernmental loan agreement is a limited obligation of the project county payable solely from the revenues derived under one or more subsidiary loan agreements. The intergovernmental loan agreement does not constitute an indebtedness of the project county within the meaning of any state constitutional provision or statutory limitation and does not constitute nor give rise to a pecuniary liability of the project county or a charge against its general credit or taxing powers, and this fact must be plainly stated in the intergovernmental loan agreement.

Section 44-7-1660. (A) Public agencies and hospital agencies are empowered and authorized to enter into subsidiary loan agreements. Prior to entering into a subsidiary loan agreement pursuant to this article, the county board of the project county or of the authorizing issuer, if the subsidiary loan agreement is between the authorizing issuer and a public agency or hospital agency located in its jurisdiction, shall comply with the following criteria and requirements with respect to hospital facilities located in its jurisdiction; however, the determination of the county board as to its compliance with the criteria and requirements is final and conclusive, subject only to challenge as provided in Section 44-7-1690:

(1) There is a need for the hospital facilities in the area in which the hospital facilities are to be located.

(2) No hospital facilities may be provided for any hospital agency or public agency which is not financially responsible and capable of fulfilling its obligations under the subsidiary loan agreement, including the obligations to make the payments required under the agreement, to operate, repair, and maintain at its own

expense the hospital facilities, and to discharge other responsibilities as may be imposed under the subsidiary loan agreement.

(3) Adequate provision must be made for the payment of the principal of and the interest on the bonds and any necessary reserves for the payment and for the operation, repair, and maintenance of the hospital facilities at the expense of the hospital agency or public agency.

(4) The public facilities, including utilities, and public services necessary for the hospital facilities must be made available.

(5) The county board has given due consideration, upon the advice of counsel, to the impact, if any, of the bonds on the county's present or future financings.

(B) The county board may not enter into a subsidiary loan agreement to finance the acquisition, construction, expansion, equipping, or financing of any hospital facilities until approval of the agreement by the South Carolina Department of Health and Environmental Control as may be required under Article 3 of Chapter 7 of Title 44.

Section 44-7-1670. For the purposes of this article, public agencies may enter into one or more subsidiary loan agreements with a county board to facilitate the financing, acquiring, constructing, improving, enlarging, expanding, equipping, providing, operating, and maintaining of hospital facilities located within the jurisdiction of the county board and pursuant to the subsidiary loan agreement may operate, repair, and maintain hospital facilities and pay the costs of the operation, repair, and maintenance from any funds available for the purpose and the payments required for the operation, repair, and maintenance. However, in making the agreement no county may obligate itself except with respect to any security pledged, mortgaged, or otherwise made available for the securing of the bonds and the application of the revenues from the subsidiary loan agreement nor incur a pecuniary liability or a charge against its general credit or its taxing powers.

Section 44-7-1680. The subsidiary loan agreement must contain the covenants stated in Section 44-7-1520 and may contain other terms and conditions permitted under this article for loan agreements.

Section 44-7-1690. Notice of the approval by a county board of any intergovernmental loan agreement or subsidiary loan agreement must be published at least once in a newspaper having general circulation in each county by the respective county board, prior to the execution of such agreements. With respect to a subsidiary loan agreement, the notice must set forth the action taken by the county board and the South Carolina Department of Health and Environmental Control pursuant to Section 44-7-1660. The intergovernmental loan agreement and subsidiary loan agreement must be filed with the clerk of court of the authorizing issuer and the clerk of court of the project county prior to the issuance of the bonds authorized thereby.

Any interested party may, within twenty days after the date of the publication of the notice, challenge the action taken by the county board of the authorizing issuer or the project county in approving the intergovernmental loan agreement by action de novo in the court of common pleas of the project county or the authorizing issuer.

Any interested party may, within twenty days after the date of the publication of the notice, challenge the action taken by the county board in approving the subsidiary loan agreement or the Department of Health and Environmental Control with respect to the hospital facilities by action de novo in the court of common pleas in any county where the hospital facilities are to be located.

Section 44-7-1700. Neither the members of the county board of the authorizing issuer or the project county nor any person executing any bonds, the intergovernmental loan agreement, or the subsidiary loan agreement, are liable personally on the bonds nor subject to any personal liability or accountability by reason of the issuance of the bonds.

Section 44-7-1710. All of the provisions of this article, except item (b) of Section 44-7-1590, are applicable to the bonds authorized by Section 44-7-1640. The county board of the authorizing issuer may, on behalf of any project county which may subsequently be a party to an intergovernmental loan agreement, undertake all actions required by the county board under this article with respect to the issuance of the bonds and adoption of the petition to the State Board required by Section 44-7-1590.

Section 44-7-1720. This article must not be construed as a restriction or limitation upon any powers which a county might otherwise have under any laws of this State but must be construed as cumulative. The authorization granted in this article may be carried out by a county board acting at a regular or special meeting and without publication of the proceedings by a resolution to become effective upon its adoption at the meeting at which it is presented, notwithstanding any restriction, limitation, or other procedure, imposed upon the county board by any laws of this State."

Meaning of phrase

SECTION 5. Chapter 21 of Title 6 of the 1976 Code is amended by adding:

"Section 6-21-45. As used in Section 6-21-50, the phrase 'hospitals, nursing home and care facilities' has the same meaning as 'hospital facilities' as defined in item (f) of Section 44-7-1430."

Time effective

SECTION 6. This act takes effect upon approval by the Governor.