Bill Summary for S 681 (2019-2020)

Summary date: 

Jun 20 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
Senate Bill 681 (Public) Filed Thursday, June 20, 2019
Intro. by Berger, Tillman.

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Bill 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the support of eligible hospitals located in rural areas that are in financial crisis due to operation of oversized and outdated facilities and recent changes to the viability of health care delivery in their communities, with loans to be used to finance construction of new health care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.

© 2019 School of Government The University of North Carolina at Chapel Hill

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