Bill Summaries: S681 (2019-2020 Session)

Tracking:
  • Summary date: Jul 31 2019 - View summary

    House committee substitute to the 3rd edition makes the following changes.

    Part I.

    Amends new Article 2, Rural Health Care Stabilization Program, to GS Chapter 131A, changing the maturity for loans awarded under the Program to not exceed 20 years (was, not to exceed ten years, with a one-time option to extend the loan for another ten years).

    Part II.

    Restricts the levy of the additional 0.25% sales and use tax allowed under the provisions of Part II until on or after October 1, 2020, if the levy results in a 2.5% county sales and use tax rate.

     


  • Summary date: Jul 24 2019 - View summary

    House committee substitute to the 2nd edition makes the following changes.

    Amends new Article 2, Rural Health Care Stabilization Program, to GS Chapter 131A as follows. Changes the logistics of the Rural Health Care Stabilization Fund (Fund) created by the act. Now provides for the Fund to be a nonreverting special fund in the Office of State Budget and Management and under the custody of the State Treasurer, rather than controlled and under the direction of UNC Health Care. Changes the interest rate and maturity for loans awarded under the Program. Now requires that the interest rate not exceed the interest rate obtained by the State on its most recent general obligation bond offering (previously, required to be below the market rate), and that the maturity not exceed ten years, with the one-time option to extend the loan for another ten years (previously, set maturity at seven years). Changes the effective date of new Article 2 and its conforming changes to the date the act becomes law (was, July 1, 2019).

    Adds the following provisions.

    Amends GS Chapter 105, Article 46 (now, the one-­quarter cent or one-­half cent county sales and use tax), as follows. Requires that taxes levied under the Article be approved in a referendum, as specified. Restricts a referendum to an increase in increment of .25%, and limits the total local sales and use tax rate to 2.5% or 2.75%, as specified. Prohibits holding a referendum on the levy of taxes under the Article within one year from the date of the last preceding election for the same. Makes conforming changes. Now restricts a county's use of the net proceeds of taxes levied under the Article to any public purpose and/or public education purposes, which must be indicated on the ballot question presented at the referendum, as specified. Defines public education purposes to mean (1) public school capital outlay purposes or to retire any of the county's related indebtedness, (2) classroom teacher salary supplements, or (3) financial support of community colleges. Makes conforming changes. 

    Enacts new GS 105-­506.3 to require that taxes under GS Chapter 105, Article 43 (local government sales and use taxes for public transportation), only be levied when the total local sales and use tax rate in the county, including a levy under this article, does not exceed a specified limit (limit is identical to that in new GS Chapter 105, subchapter 105, Article 43, described above).

    Amends GS 105­-164.3(4a) to amend the definition of Combined general rate to mean the sum of: the State's general rate in GS 105­-164.4(a); the sum of the rates of the local sales and use taxes authorized for every county in GS Chapter 105, Articles 39, 40, and 42, or SL 1967­-1096; and half of the maximum rate authorized by GS Chapter 105, Article 46.

    Amends GS 143B-437.01 concerning the Industrial Development Fund Utility Account by expanding the definition of economically distressed county (as it is used in the statute) to mean a county that has one of the 87 highest rankings under GS 143B-437.08, which designates development tiers (was, county that is defined as a development tier one or two area). 

    Makes conforming changes to the act's titles.


  • Summary date: Jun 28 2019 - View summary

    Senate committee substitute to the 1st edition makes the following changes.

    Amends new Article 2, Rural Health Care Stabilization Program, to GS Chapter 131A as follows. Eliminates eligible applicant from the Article's defined terms and makes changes throughout the Article to no longer reference the term. Also eliminates nonprofit agency from the defined terms. Now includes in the defined terms loan, an obligation to pay interest in accordance with the loan agreement. Makes further clarifying and conforming changes to the defined terms. Concerning the administration of the Rural Health Care Stabilization Program (Program), no longer requires UNC Health Care to collaborate with the Local Government Commission (Commission). Makes technical and organizational changes to UNC Health Care's administrative duties and responsibilities, and adds the duty to establish an application period and a process for submitting an application for a loan under the Program and any other duties and responsibilities necessary for the implementation of the Program and enforcement of the loan agreements under the Program. Adds a new provision to exclude UNC Health Care from applying for a loan or being a partner in a partnership that applies for a loan under the Program. Adds that the Commission cannot approve a loan application if the issuance of the loan would result in a material, direct benefit to UNC Health Care at the time the application and Plan are submitted for approval. Removes the Commission's rulemaking authority, now limiting the rulemaking authority concerning Program implementation to UNC Health Care alone.

    Regarding applications for a loan under the Program, allows a public agency, an owner of a health care facility, or a partnership of one or more of those entities, to apply for a loan under the Program to benefit an eligible hospital, as defined, and requires applicants to develop and submit a hospital stabilization plan to UNC Health Care during the application period (substantively similar to the previous application requirements for eligible applicants). Now entitles an applicant disapproved by UNC Health Care to engage a disinterested and qualified third party approved by the Commission to evaluate the applicant's Plan to determine if the applicant demonstrates a financially sustainable health care service model for the community in which the eligible hospital is located, and to subsequently seek Commission approval of the loan based on the written evaluation of its Plan by the third party (previously, provided for an applicant to request the Commission to review UNC Health Care's disapproval recommendation).

    Concerning the award and terms of loans under the Program, requires the Commission to approve all loans under the Program prior to UNC Health Care's awarding the loan. Explicitly states that if the Commission enters an order denying the loan, the proceedings under new Article 2 are at an end. Makes technical and clarifying changes to the conflict of interest provisions. Requires the Commission to review UNC Health Care's recommendations, an applicant's Plan and any other relevant information, as well as the third party evaluation, if applicable. Sets forth additional information the Commission can require the applicant and eligible hospital (if different) to provide for consideration (previously, limited to current and historical financial information). Establishes the following four findings that must be satisfied for the Commission to approve a loan application: (1) that the loan is necessary or expedient; (2) that the amount proposed is adequate and not excessive for the proposed purpose of the loan; (3) that the Plan demonstrates a financially sustainable health care service model for the community in which the eligible hospital is located; and (4) that the applicant's debt management procedures and policies are good, or that reasonable assurances have been given that the debt will be repaid. Regarding the award of loans, requires UNC Health Care to execute the terms of the loan agreement upon approval of the loan by the Commission. Authorizes UNC Health Care, rather than the Commission, to require changes to the governance structure of the eligible hospital. Eliminates the procedure for reconsideration of a loan's modified agreement for approval. Makes further technical, clarifying, and organizational changes.


  • Summary date: Jun 20 2019 - View summary

    Designates GS 131A-1 through GS 131A-25 as Article 1 of GS Chapter 135, the Health Care Facility Finances Act. Directs the Revisor of Statutes to make necessary changes to statutory cross-references. Makes conforming changes to GS 113A-12 (environmental document exemption) and GS 142-15.16 (defining State-supported financing arrangement). 

    Enacts new Article 2, Rural Health Care Stabilization Program, to GS Chapter 131A. Sets forth 11 defined terms. Establishes the Rural Health Care Stabilization Program (Program) to provide loans to eligible applicants for the support of eligible hospitals located in rural areas that are in financial crisis due to operation of oversized and outdated facilities and recent changes to the viability of health care delivery in their communities, with loans to be used to finance construction of new health care facilities or to provide for operations costs during the transition period, or both, including while the construction of new facilities is undertaken. Requires UNC Health Care, in collaboration with the Local Government Commission (Commission), to administer the Program. Sets out specific UNC Health Care responsibilities, including but not limited to assessing Plans submitted by loan applicants and implementing approved loan agreements. Requires UNC Health Care to evaluate the applicant's ability to repay the loan under the proposed Plan and what security interests are necessary to enforce loan repayment. Requires the Commission to review UNC Health Care's recommendations, eligible applicants' Plans, and approve or disapprove the awarding of loans. Establishes the Rural Health Care Stabilization Fund (Fund) under the control and direction of the UNC Health Care System, with funds to be used for loans. The Fund consists of funds appropriated to the Program, funds received as repayment of the principal of or interest on Fund loans, and all interest credited to the Fund by the State Treasurer. Sets out the loan application process and details items that must be included in the applicant's Plan. Requires eligible applicants to develop a hospital stabilization plan for an eligible hospital as part of the loan application. Requires UNC Health Care to evaluate each Plan submitted by an eligible applicant to determine whether the applicant's Plan demonstrates a financially sustainable health care service model for the community in which the eligible hospital is located. Also allows UNC Health Care to assist an eligible applicant with revisions to its Plan. Requires UNC Health Care to notify the eligible applicant and the Commission of its recommendation on whether to approve or disapprove a loan application. Allows, when a loan application is recommended to be disapproved, for an applicant to request that the Commission review UNC Health Care's determination and allows the Commission to approve the applicant for a loan if it finds that the applicant demonstrates a financially sustainable health care service model for the community where the eligible hospital is located. If a loan is approved in this manner, requires UNC Health Care to administer the loan agreement negotiated between the Commission and the applicant. Requires UNC Health Care to disclose to the Commission any potential conflict of interest in its review of an application and Plan. Prohibits the Commission from approving an eligible applicant if the issuance of a loan would result in a material, direct financial benefit to UNC Health Care at the time the application and Plan are submitted to the Commission for its approval. Requires the Commission to consider approval of a loan recommended by UNC Health Care. Allows the Commission to require changes to the governance structure of the eligible hospital in adopting the terms of the loan agreement. Allows the Commission to require eligible applicants and hospitals to provide current and historical financial information in considering the loan. Provides for the Commission to recommend modifications to an agreement denied approval, allowing UNC Health Care to resubmit its recommendations and the Commission to consider the revised recommendations. Requires the Commission to also consider applications submitted which request the Commission’s review of UNC Health Care’s disapproval of the loan application. Makes UNC Health Care responsible for notification of loan awards and conditions. Requires the loan interest rate to be below market rate and the maximum maturity of the loan to be seven years. Requires execution of a debt instrument to evidence the obligation. Requires UNC Health Care to annually publish a report on the Fund by November 1 to cover the preceding year. Requires the report to be publicly available as well as a copy submitted to the specified NCGA committee and division. Details required content of the report, including the Fund balance at the beginning and end of the fiscal year, the amount of revenue and its source credited to the Fund during the fiscal year, the total amount of loans awarded from the Fund, and specified information regarding each loan awarded.

    Amends GS 116-37 to require General Fund appropriations for the Program to be deposited in the Fund with use restricted to the purposes set forth in new Article 2 of GS Chapter 131A. Requires the UNC Health Care System to administer the Program pursuant to new Article 2 in order to further its mission.

    Applies to applications for a loan submitted on or after July 1, 2019.