House Bill 152

AN ACT TO ESTABLISH A RURAL HOSPITAL CAPITAL IMPROVEMENTS REVOLVING LOAN PROGRAM FOR THE PURPOSE OF MAKING LOANS TO RURAL HOSPITALS TO ASSIST THOSE HOSPITALS IN MAKING CAPITAL IMPROVEMENTS TO THEIR FACILITIES; TO PROVIDE THAT THE PROGRAM WILL BE ADMINISTERED BY THE STATE DEPARTMENT OF HEALTH; TO CREATE A SPECIAL FUND IN THE STATE TREASURY TO BE DESIGNATED THE "RURAL HOSPITALS CAPITAL IMPROVEMENTS REVOLVING LOAN FUND"; TO PROVIDE THAT THE REVOLVING FUND WILL BE CREDITED WITH ALL REPAYMENTS OF PRINCIPAL AND INTEREST DERIVED FROM LOANS MADE FROM THE REVOLVING FUND; TO AUTHORIZE THE DEPARTMENT TO MAKE LOANS FROM THE REVOLVING FUND TO RURAL HOSPITALS AS SET FORTH IN A LOAN AGREEMENT IN AN AMOUNT OF NOT MORE THAN FIVE HUNDRED THOUSAND DOLLARS PER LOAN; TO PROVIDE THAT A RURAL HOSPITAL MAY NOT RECEIVE ANOTHER LOAN WITHIN FIVE YEARS AFTER RECEIVING A LOAN FROM THE REVOLVING FUND; TO PRESCRIBE THE POWERS AND DUTIES OF THE DEPARTMENT IN ADMINISTERING THE PROGRAM; TO AUTHORIZE THE ISSUANCE OF STATE GENERAL OBLIGATION BONDS TO PROVIDE MONIES FOR THE REVOLVING FUND; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) There is established a rural hospital capital improvements revolving loan program for the purpose of making loans to rural hospitals to assist those hospitals in making capital improvements to their facilities. The program shall be administered by the State Department of Health, referred to in this section as "department." Loan proceeds may be used by the recipient hospital for planning, professional services, acquisition of personal property, construction, construction-related services, maintenance, and any other reasonable use that the department, in its discretion, may allow. For the purposes of this section, the term "rural hospital" means a licensed hospital that has fifty (50) or fewer licensed beds.

(2) There is created a special fund in the State Treasury to be designated as the "Rural Hospitals Capital Improvements Revolving Loan Fund," referred to in this section as "revolving fund." The revolving fund shall consist of those monies as provided in Sections 2 and 9 of this act and any appropriations, bond proceeds, grants, gifts, donations and any other funds from any source, public or private, designated for deposit into the fund. The revolving fund shall be credited with all repayments of principal and interest derived from loans made from the revolving fund. The revolving fund shall be maintained in perpetuity for the purposes established in this section. Unexpended amounts remaining in the revolving fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned on amounts in the revolving fund shall be deposited to the credit of the fund. Monies in the revolving fund may not be used or expended for any purpose except as authorized under this section, and may be expended only in amounts appropriated by the Legislature. Any monies in the revolving fund may be used to match any federal funds that are available for the same or related purposes for which funds are used and expended under this section. Any federal funds shall be used and expended only in accordance with federal laws, rules and regulations governing the expenditure of those funds.

(3) The department may make loans from the revolving fund to rural hospitals as set forth in a loan agreement in an amount of not more than Five Hundred Thousand Dollars ($500,000.00) per loan, but not to exceed one hundred percent (100%) of eligible project costs as established by the department. A rural hospital may not receive another loan from the revolving fund within five (5) years after receiving a loan from the fund. The interest rate on those loans may vary from time to time and from loan to loan, and will be at or below market interest rates as determined by the department. The department may require funding participation by the rural hospitals or funding from other sources, or otherwise limit the percentage of costs covered by loans from the revolving fund. The department shall act as quickly as is practicable and prudent in deciding on any loan request that it receives.

(4) A rural hospital receiving a loan from the revolving fund must establish a dedicated source of revenue for repayment of the loan. Before a rural hospital may receive a loan, it must have executed with the department a loan agreement evidencing that loan. The loan agreement shall not be construed to prohibit any recipient hospital from prepaying any part or all of the funds received. The repayment schedule in each loan agreement shall provide for (a) monthly payments, (b) semiannual payments, or (c) other periodic payments, the annual total of which shall not exceed the annual total for any other year of the loan by more than fifteen percent (15%). The loan agreement shall provide for the repayment of all funds received from the revolving fund within not more than fifteen (15) years, and any repayment shall begin not later than one (1) year after project completion.

(5) A rural hospital that receives a loan from the revolving fund shall repay that loan by making payments each month to the State Treasurer through the Department of Finance and Administration for and on behalf of the department according to Section 7-7-15, to be credited to the revolving fund. Loan repayments shall be according to a repayment schedule contained in each loan agreement as provided in subsection (4) of this section.

(6) The State Auditor, upon request of the department, shall audit the receipts and expenditures of a rural hospital whose loan repayments appear to be in arrears, and if the Auditor finds that the rural hospital is in arrears in those repayments, the Auditor shall immediately notify the department, which may take any action as may be necessary to enforce the terms of the loan agreement, until such time as the rural hospital is again current in its loan repayments as certified by the Auditor.

(7) Except as otherwise provided in this section, all monies deposited in the revolving fund, including loan repayments and interest earned on those repayments, shall be used only for providing loans to rural hospitals in accordance with the provisions of this section as the department deems appropriate. However, any amounts in the revolving fund may be used by the department to defray the reasonable costs of administering the revolving fund and conducting activities under this section, subject to appropriation by the Legislature.

(8) In administering the program established under this section, the department shall have the following powers and duties:

(a) To supervise the use of all funds made available for the program under this section and Sections 2 through 16 of this act;

(b) To promulgate rules and regulations, to make variances and exceptions thereto, and to establish procedures in accordance with this section, for the implementation of the program;

(d) To requisition monies in the revolving fund and distribute those monies to rural hospitals on a project-by-project basis;

(e) To ensure that the funds made available under this section for projects are distributed among rural hospitals under a priority system established by the department;

(f) To maintain in accordance with generally accepted government accounting standards an accurate record of all monies in the revolving fund made available to rural hospitals under this section and the costs for each project;

(g) To establish policies, procedures and requirements concerning financial capability to repay loans that may be used in approving loans available under this section; and

(h) To file annually with the Legislature a report detailing how monies in the revolving fund were spent during the preceding fiscal year by each rural hospital, the number of projects approved and constructed, and the cost of each project.

SECTION 2. The State Board of Health, at one time, or from time to time, may declare by resolution the necessity for issuance of general obligation bonds of the State of Mississippi to provide funds for all costs incurred or to be incurred by the State Department of Health in assisting rural hospitals in making capital improvements to their facilities as provided in Section 1 of this act. Upon the adoption of a resolution by the board declaring the necessity for the issuance of any part or all of the general obligation bonds authorized by this section, the board shall deliver a certified copy of its resolution or resolutions to the State Bond Commission. Upon receipt of such resolution, the State Bond Commission, in its discretion, may act as the issuing agent, prescribe the form of the bonds, determine the appropriate method for the sale of the bonds, advertise for and accept bids or negotiate the sale of the bonds, issue and sell the tax exempt or taxable bonds so authorized to be sold, and do any and all other things necessary and advisable in connection with the issuance and sale of such bonds. The amount of bonds issued under Sections 2 through 16 of this act shall not exceed Ten Million Dollars ($10,000,000.00), the proceeds of which shall be deposited in the Rural Hospitals Capital Improvements Revolving Fund.

SECTION 3. The principal of and interest on the bonds authorized under Section 2 of this act shall be payable in the manner provided in this section. Such bonds shall bear such date or dates, be in such denomination or denominations, bear interest at such rate or rates (not to exceed the limits set forth in Section 75-17-101), be payable at such place or places within or without the State of Mississippi, shall mature absolutely at such time or times not to exceed twenty-five (25) years from date of issue, be redeemable before maturity at such time or times and upon such terms, with or without premium, shall bear such registration privileges, and shall be substantially in such form, all as shall be determined by resolution of the State Bond Commission.

SECTION 4. The bonds authorized by Section 2 of this act shall be signed by the Chairman of the State Bond Commission, or by his facsimile signature, and the official seal of the State Bond Commission shall be affixed thereto, attested by the Secretary of the State Bond Commission. The interest coupons, if any, to be attached to such bonds may be executed by the facsimile signatures of such officers. Whenever any such bonds shall have been signed by the officials designated to sign the bonds who were in office at the time of such signing but who may have ceased to be such officers before the sale and delivery of such bonds, or who may not have been in office on the date such bonds may bear, the signatures of such officers upon such bonds and coupons shall nevertheless be valid and sufficient for all purposes and have the same effect as if the person so officially signing such bonds had remained in office until their delivery to the purchaser, or had been in office on the date such bonds may bear. However, notwithstanding anything herein to the contrary, such bonds may be issued as provided in the Registered Bond Act of the State of Mississippi.

SECTION 5. All bonds and interest coupons issued under the provisions of Sections 2 through 16 of this act have all the qualities and incidents of negotiable instruments under the provisions of the Uniform Commercial Code, and in exercising the powers granted by Sections 2 through 16 of this act, the State Bond Commission shall not be required to and need not comply with the provisions of the Uniform Commercial Code.

SECTION 6. The State Bond Commission shall act as the issuing agent for the bonds authorized under Sections 2 through 16 of this act, prescribe the form of the bonds, determine the appropriate method for sale of the bonds, advertise for and accept bids or negotiate the sale of the bonds, issue and sell the bonds so authorized to be sold, pay all fees and costs incurred in such issuance and sale, and do all other things necessary and advisable in connection with the issuance and sale of the bonds. The State Bond Commission may pay the costs that are incident to the sale, issuance and delivery of the bonds authorized under Sections 2 through 16 of this act from the proceeds derived from the sale of the bonds. The State Bond Commission shall sell such bonds on sealed bids at public sale or may negotiate the sale of the bonds for such price as it may determine to be for the best interest of the State of Mississippi. All interest accruing on such bonds so issued shall be payable semiannually or annually.

If the bonds are sold on sealed bids at public sale, notice of the sale of any such bonds shall be published at least one time, not less than ten (10) days before the date of sale, and shall be so published in one or more newspapers published or having a general circulation in the City of Jackson, Mississippi, to be selected by the State Bond Commission.

The State Bond Commission, when issuing any bonds under the authority of Sections 2 through 16 of this act, may provide that bonds, at the option of the State of Mississippi, may be called in for payment and redemption at the call price named therein and accrued interest on such date or dates named therein.

SECTION 7. The bonds issued under the provisions of Sections 2 through 16 of this act are general obligations of the State of Mississippi, and for the payment thereof the full faith and credit of the State of Mississippi is irrevocably pledged. If the funds appropriated by the Legislature are insufficient to pay the principal of and interest on such bonds as they become due, then the deficiency shall be paid by the State Treasurer from any funds in the State Treasury not otherwise appropriated. All such bonds shall contain recitals on their faces substantially covering the provisions of this section.

SECTION 8. The State Treasurer is authorized, without further process of law, to certify to the Department of Finance and Administration the necessity for warrants, and the Department of Finance and Administration is authorized and directed to issue such warrants, in such amounts as may be necessary to pay when due the principal of, premium, if any, and interest on, or the accreted value of, all bonds issued under Sections 2 through 16 of this act; and the State Treasurer shall forward the necessary amount to the designated place or places of payment of such bonds in ample time to discharge such bonds, or the interest on the bonds, on their due dates.

SECTION 9. Upon the issuance and sale of bonds under the provisions of Sections 2 through 16 of this act, the State Bond Commission shall transfer the proceeds of any sale or sales of bonds to the Rural Hospitals Capital Improvements Revolving Fund. After such transfer, all investment earnings or interest earned on the proceeds of such bonds shall be deposited to the credit of the revolving fund, and shall be used only for the purposes established in Section 1 of this act. The proceeds of such bonds shall be disbursed solely upon the order of the State Department of Health under such restrictions, if any, as may be contained in the resolution providing for the issuance of the bonds.

SECTION 10. The bonds authorized under Sections 2 through 16 of this act may be issued without any other proceedings or the happening of any other conditions or things other than those proceedings, conditions and things which are specified or required by Sections 2 through 16 of this act. Any resolution providing for the issuance of bonds under the provisions of Sections 2 through 16 of this act shall become effective immediately upon its adoption by the State Bond Commission, and any such resolution may be adopted at any regular or special meeting of the State Bond Commission by a majority of its members.

SECTION 11. The bonds authorized under the authority of Sections 2 through 16 of this act may be validated in the Chancery Court of the First Judicial District of Hinds County, Mississippi, in the manner and with the force and effect provided by Chapter 13, Title 31, Mississippi Code of 1972, for the validation of county, municipal, school district and other bonds. The notice to taxpayers required by such statutes shall be published in a newspaper published or having a general circulation in the City of Jackson, Mississippi.

SECTION 12. Any holder of bonds issued under the provisions of Sections 2 through 16 of this act or of any of the interest coupons pertaining thereto may, either at law or in equity, by suit, action, mandamus or other proceeding, protect and enforce all rights granted under Sections 2 through 16 of this act, or under such resolution, and may enforce and compel performance of all duties required by Sections 2 through 16 of this act to be performed, in order to provide for the payment of bonds and interest thereon.

SECTION 13. All bonds issued under the provisions of Sections 2 through 16 of this act shall be legal investments for trustees and other fiduciaries, and for savings banks, trust companies and insurance companies organized under the laws of the State of Mississippi, and such bonds shall be legal securities which may be deposited with and shall be received by all public officers and bodies of this state and all municipalities and political subdivisions for the purpose of securing the deposit of public funds.

SECTION 14. Bonds issued under the provisions of Sections 2 through 16 of this act and income therefrom shall be exempt from all taxation in the State of Mississippi.

SECTION 15. The proceeds of the bonds issued under the provisions of Sections 2 through 16 of this act shall be used solely for the purposes herein provided, including the costs incident to the issuance and sale of such bonds.

SECTION 16. Sections 2 through 16 of this act shall be deemed to be full and complete authority for the exercise of the powers granted, but Sections 2 through 16 of this act shall not be deemed to repeal or to be in derogation of any existing law of this state.

SECTION 17. This act shall take effect and be in force from and after July 1, 2020.