It is hereby declared to be the public policy of the state of West Virginia and a responsibility of the state of West Virginia, for the benefit of the people of the state and the improvement of their health, welfare and living conditions, to provide hospitals with appropriate means at reasonable cost to maintain, expand, enlarge and establish health care, hospital and other related facilities and to provide hospitals with the ability to refinance indebtedness. This article shall provide a method to enable hospitals to provide or maintain at reasonable cost pursuant to reasonable terms the facilities, structures and services needed to accomplish the purposes of this article, all to the public benefit and good, to the extent and in the manner provided in this article.
The Legislature finds and hereby declares that the responsibility of the state as outlined above cannot be effectively met without the hospital loan program as provided for in this article.
(1) "Authority" means the West Virginia Hospital Finance Authority created by section four of this article, the duties, powers, responsibilities and functions of which are specified in this article;
(2) "Board" means the West Virginia Hospital Finance Board created by section four of this article, which shall manage and control the authority;
(3) "Bond" means a revenue bond issued by the authority to effect the purposes of this article;
(4) "Construction" means and includes new construction, reconstruction, enlargement, improvement and providing furnishings or equipment;
(5) "Direct provider of health care" means a person or organization whose primary current activity is the provision of health care to individuals and includes a licensed or certified physician, osteopath, dentist, nurse, podiatrist or physician's assistant or an organization comprised of these health professionals or employing these health professionals;
(6) "Hospital" means a corporation, association, institution or establishment for the care of those who require medical treatment, which may be a public or private corporation or association, or state-owned or operated establishment and specifically includes nursing homes which are licensed under chapter sixteen of this code or those facilities certified under the Social Security Act as intermediate care facilities for individuals with an intellectual disability;
(7) "Hospital facilities" means any real or personal property suitable and intended for, or incidental or ancillary to, use by a hospital and includes: Outpatient clinics; laboratories; laundries; nurses', doctors' or interns' residences; administration buildings; facilities for research directly involved with hospital care; maintenance, storage or utility facilities; parking lots and garages; and all necessary, useful or related equipment, furnishings and appurtenances and all lands necessary or convenient as a site for the foregoing and specifically includes any capital improvements to any of the foregoing. "Hospital facilities" specifically includes office facilities not less than eighty percent of which are intended for lease to direct providers of health care and which are geographically or functionally related to one or more other hospital facilities, if the authority determines that the financing of the office facilities is necessary to accomplish the purposes of this article;
(8) "Hospital loan" means a loan made by the authority to a hospital and specifically includes financings by the authority for hospital facilities pursuant to lease-purchase agreements, installment sale or other similar agreements;
(9) "Note" means a short-term promise to pay a specified amount of money, payable and secured as provided pursuant to this article and issued by the authority to effect the purposes of this article;
(10) "Project costs" means the total of the reasonable or necessary costs incurred for carrying out the works and undertakings for the acquisition or construction of hospital facilities under this article. "Project costs" includes, but is not limited to, all of the following costs: The costs of acquisition or construction of the hospital facilities; studies and surveys; plans, specifications, architectural and engineering services; legal, organization, marketing or other special services; financing, acquisition, demolition, construction, equipping and site development of new and rehabilitated buildings; rehabilitation, reconstruction, repair or remodeling of existing buildings; interest and carrying charges during construction and before full earnings are achieved and operating expenses before full earnings are achieved or a period of one year following the completion of construction, whichever occurs first; and a reasonable reserve for payment of principal of and interest on bonds or notes of the authority. "Project costs" shall also include reimbursement of a hospital for the foregoing costs expended by a hospital from its own funds or from money borrowed by the hospital for such purposes before issuance and delivery of bonds or notes by the authority for the purpose of providing funds to pay the project costs. "Project costs" also specifically includes the refinancing of any existing debt of a hospital necessary in order to permit the hospital to borrow from the authority and give adequate security for the hospital loan. The determination of the authority with respect to the necessity of refinancing and adequate security for a hospital loan is conclusive;
(11) "Revenue" means any money or thing of value collected by, or paid to, the authority as principal of or interest, charges or other fees on hospital loans or any other collections on hospital loans made by the authority to hospitals to finance, in whole or in part, the acquisition or construction of any hospital facilities or other money or property which is received and may be expended for or pledged as revenues pursuant to this article;
(12) "Veterans skilled nursing facility" means a skilled nursing care facility constructed and operated to serve the needs of veterans of the Armed Forces of the United States who are citizens of this state.
The authority shall be controlled, managed and operated by the seven-member board known as the West Virginia hospital finance board, which is hereby created. The board shall consist of the director of the state department of health and the state treasurer as members ex officio of the board. The other five members of the board shall be appointed by the governor, by and with the advice and consent of the Senate, and shall serve terms of two, three, four, five and six years, respectively. The successor of each such appointed member shall be appointed for a term of six years in the same manner as the original appointments were made, except that any person appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed only for the remainder of such term. No more than three of the appointed board members shall at any one time belong to the same political party. Appointed board members may be reappointed to serve additional terms.
All members of the board shall be citizens of the state. Each appointed member of the board, before entering upon his duties, shall comply with the requirements of article one, chapter six of this code and give bond in the sum of twenty-five thousand dollars in the manner provided in article two, chapter six of this code. The governor may remove any board member for cause as provided in article six, chapter six of this code. The director of the state department of health and the state treasurer may each appoint a deputy to serve as a member of the board in their respective absences. Such deputy shall be a person in the office of the director of the state department of health or the state treasurer, as the case may be, and shall serve at his pleasure.
Four members of the board shall constitute a quorum, and the affirmative vote of four members shall be necessary for any action taken by vote of the board. No vacancy in the membership of the board shall impair the rights of a quorum by such vote to exercise all the rights and perform all the duties of the board and the authority.
Annually, the board shall elect one of its appointed members as chairman and another as vice chairman and shall appoint a secretary-treasurer, who need not be a member of the board. The person appointed as secretary-treasurer, including a board member if he is so appointed, shall give bond in the sum of fifty thousand dollars in the manner provided in article two, chapter six of this code.
Members of the board shall not receive compensation for services but shall be entitled to the necessary expenses, including traveling expenses, incurred in the discharge of their duties. Any payments for compensation and expenses shall be paid from the funds of the authority, after appropriations and authorization by the Legislature, and no liability or obligation shall be incurred by the authority beyond the extent to which moneys are available from funds of the authority.
There shall also be a director of the authority appointed by the board.
The authority is hereby granted, has and may exercise all the powers necessary or appropriate to carry out and effectuate the purposes of this article, including the following:
(a) To sue and be sued in its own name and plead and be impleaded in its own name; to have a seal and alter the same at its pleasure; to make, execute and deliver contracts, indentures, agreements, conveyances and other instruments necessary or convenient to the exercise of its powers; to adopt and, from time to time, amend and repeal bylaws necessary and proper for the legislation of its business and rules and regulations to implement and make effective its powers and duties, such rules and regulations to be promulgated in accordance with the provisions of chapter twenty-nine-a of this code; and to maintain a principal office. Any actions against the authority shall be brought in the circuit court of Kanawha County, in which the principal office of the authority shall be located. When the cost under any contract or agreement to be entered by the authority, other than compensation for personal services, involves an expenditure of more than three thousand dollars, the authority shall make a written contract with the lowest responsible bidder after public notice published as a Class II legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code, the publication area for such publication to be the county wherein the work is to be performed or which is affected by the contract, which notice shall state the general character of the work and the general character of the materials to be furnished, the place where plans and specifications therefor may be examined and the time and place of receiving bids: Provided, That a contract, indenture or agreement for a hospital loan is not subject to the foregoing requirements, and the authority may enter into such contract, indenture or agreement pursuant to negotiation and upon such terms and conditions and for such period as it finds to be reasonable and proper under the circumstances and as necessary to best effectuate the purposes of this article: Provided, however, That a contract or agreement entered into by a hospital to which any hospital loan is made is not subject to the foregoing requirements. The authority may reject any and all bids. A bond with good and sufficient surety, approved by the authority, shall be required of all contractors in an amount equal to at least fifty percent of the contract price, conditioned upon the faithful performance of the contract.
(b) To solicit and accept gifts, grants, loans and other aids from any person, corporation or governmental agency.
(c) To make hospital loans, to participate in the making of hospital loans, to undertake commitments, to execute and be the beneficiary under deeds of trust, to enter into security agreements, to sell hospital loans and the security therefor at public or private sale, to modify or alter hospital loans and security therefor, to discharge hospital loans and security therefor, to order a trustee's sale under a deed of trust or commence an action to protect or enforce a right conferred upon it by a law, deed of trust, hospital loan, contract, indenture or other agreement and to bid for and purchase property which was the subject of a deed of trust at a trustee's sale or at any other sale and to acquire or take possession of that property and in that event complete, administer, pay the principal of and interest on any obligations incurred in connection with such property, dispose of and otherwise deal with the property in a manner necessary or desirable to protect the interest of the authority in the property. The hospital loans made by the authority may be secured by deeds of trust or security agreements, as applicable, or not, as the authority determines.
(d) To lend money to hospitals for the purpose of refinancing any outstanding indebtedness of a hospital if the authority determines the refinancing is necessary to realize the purposes of this article. A hospital loan made pursuant to this subsection shall not exceed the amount of the principal of and interest and redemption premium, if any, on the indebtedness to be refinancedwhich has not been repaid, plus the marketing, financing, legal and other costs incurred in connection with the refinancing and the issuance of bonds or notes of the authority issued in whole or in part to provide funds to make the hospital loan described in this subdivision, including the costs of funding a bond reserve and paying capitalized interest on the bonds or notes for a period not to exceed one year after the issuance of such bonds or notes. The determination of the authority under this subsection shall be conclusive.
(e) To charge, impose and collect fees and charges in connection with its hospital loans, commitments and servicing, including reimbursement of the costs of financing by the authority, service charges, insurance premiums and an allocable share of the operating expenses of the authority and to make provision for increasing the same, if necessary, as the authority determines is reasonable and approved by the board.
(f) To acquire, hold and dispose of real or personal property necessary or appropriate for the accomplishment of the purposes of this article.
(g) To procure insurance against a loss in connection with its property, assets or activities.
(h) To borrow money for its purpose, including its initial operating expense and issue its bonds or notes for the money and provide for the rights of the holders of the bonds or notes and to secure the bonds or notes by a deed of trust on or an assignment or pledge of any or all of its properties, including any part of the security for its hospital loans. The state shall not be liable on any bonds or notes of the authority; the bonds or notes shall not be a debt of the state; and each bond or note shall contain on its face a statement to that effect.
(i) To invest any funds not required for immediate use or disbursement, at its discretion, in any of the following:
(1) Direct obligations of, or obligations the timely payment of the principal of and interest on which is guaranteed by, the United States of America;
(2) Bonds, debentures, notes or other evidences of indebtedness issued by any of the following agencies: Banks for cooperatives; federal intermediate credit banks; federal home loan bank system; Export-Import Bank of the United States; federal farm credit banks; federal land banks; federal financing banks; the Federal National Mortgage Association or the Government National Mortgage Association;
(3) Public housing bonds issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States of America; or temporary notes issued by public agencies or municipalities or preliminary loan notes issued by public agencies or municipalities, in each case fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America;
(4) Certificates of deposit secured by obligations of the type specified in subparagraph (1);
(5) Direct obligations of, or obligations the timely payment of the principal of and interest on which is guaranteed by, the state of West Virginia;
(6) Direct and general obligations of any other state within the territorial United States, to the payment of the principal of and interest on which the full faith and credit of such state is pledged: Provided, That at the time of their purchase, such obligations are rated in either of the two highest rating categories by a nationally recognized bond-rating agency;
(7) Any fixed interest bond, note or debenture of any corporation organized and operating within the United States: Provided, That such corporation has a minimum net worth of fifteen million dollars and its securities or its parent corporation's securities are listed on one or more of the national stock exchanges: Provided, however, That (i) such corporation has earned a profit in eight of the preceding ten fiscal years as reflected in its statements, (ii) such corporation has not defaulted in thepayment of principal of or interest on any of its outstanding funded indebtedness during its preceding ten fiscal years, and (iii) the bonds, notes or debentures of such corporation to be purchased are rated "AA" or the equivalent thereof or better than "AA" or the equivalent thereof by at least two or more nationally recognized rating services such as Standard and Poor's, Dun & Bradstreet or Moody's;
(8) Fully collateralized or insured bankers acceptances or time deposits drawn on and accepted by commercial banks; and
(9) Repurchase agreements of commercial banks or trust companies fully secured by obligations of the type specified in subparagraph (1) and having on the date of such agreement a fair market value equal to at least one hundred percent of the principal amount of such repurchase agreement.
(j) To engage necessary personnel and to engage the services of private consultants for rendering professional and technical assistance and advice.
(k) To establish or increase reserves from moneys received or to be received by the authority to secure or to pay the principal of and interest on bonds issued by the authority pursuant to this article.
(l) To lease, or lease with an option to purchase, to others its real or personal property, including hospitals and hospital facilities, for such rentals and upon such terms and conditions as the authority may deem advisable.
(m) To do all acts necessary and proper to carry out the powers expressly granted to the authority in this article.
(b) The authority periodically may issue renewal notes, may issue bonds to pay notes and, if it considers refunding expedient, to refund or to refund in advance bonds or notes issued by the authority by the issuance of new bonds pursuant to the requirements of section thirteen of this article.
(c) The authority may, upon concurrent resolution passed by the Legislature, authorize the issuance of negotiable bonds and notes in a principal amount which are necessary to provide sufficient funds for the construction, reconstruction, renovation and maintenance of one or more skilled nursing facilities that will only serve the skilled nursing needs of West Virginia veterans who have performed active duty in an active component of the armed forces or performed active service in a reserve component of the armed forces. These bonds issued by the authority may not exceed ten million dollars. The revenues pledged for the repayment of principal and interest of these bonds shall include the net profit of the veterans instant lottery scratch-off game authorized by section nine-a, article twenty-two, chapter twenty-nine of this code excluding all architectural fees and associated project costs transferred pursuant to that section.
(d) Except as may otherwise be expressly provided by the authority, every issue of its notes or bonds shall be special obligations of the authority, payable solely from the property, revenues or other sources of or available to the authority pledges therefor.
(e) The bonds and the notes shall be authorized by resolution of the authority, shall bear the date and shall mature at time or times, in the case of any such note or any renewals thereof, not exceeding seven years from the date of issue of the original note and in the case of any bond not exceeding fifty years from the date of issue, as the resolution may provide. The bonds and notes shall bear interest at rate or rates, be in a denomination, be in a form, either coupon or registered, carry registration privileges, be payable in the medium of payment and at place or places and be subject to the terms of redemption as the authority may authorize. The bonds and notes of the authority may be sold by the authority, at public or private sale, at or not less than the price the authority determines. The bonds and notes are executed by the chairman and vice chairman of the board, both of whom may use facsimile signatures. The official seal of the authority or a facsimile thereof shall be affixed to or printed on each bond and note and attested, manually or by facsimile signature, by the secretary-treasurer of the board, and any coupons attached to any bond or note shall bear the signature or facsimile signature of the chairman of the board. In case any officer whose signature, or a facsimile of whose signature, appears on any bonds, notes or coupons ceases to be an officer before delivery of the bonds or notes, the signature or facsimile is nevertheless sufficient for all purposes the same as if he or she had remained in office until the delivery; and, in case the seal of the authority has been changed after a facsimile has been imprinted on the bonds or notes, the facsimile seal will continue to be sufficient for all purposes.
(f) A resolution authorizing bonds or notes or an issue of bonds or notes under this article may contain provisions, which are a part of the contract with the holders of the bonds or notes, as to any or all of the following:
(1) Pledging and creating a lien on all or any part of the fees and charges made or received or to be received by the authority, all or any part of the moneys received in payment of hospital loans and interest on hospital loans and all or any part of other moneys received or to be received, to secure the payment of the bonds or notes or of any issue of bonds or notes, subject to those agreements with bondholders or noteholders which then exist;
(2) Pledging and creating a lien on all or any part of the assets of the authority, including notes, deeds of trust and obligations securing the assets, to secure the payment of the bonds or notes or of any issue of bonds or notes, subject to those agreements with bondholders or note holders which then exist;
(3) Pledging and creating a lien on any loan, grant or contribution to be received from the federal, state or local government or other source;
(4) The use and disposition of the income from hospital loans owned by the authority and payment of the principal of and interest on hospital loans owned by the authority;
(5) The setting aside of reserves or sinking funds and the regulation and disposition thereof;
(6) Limitations on the purpose to which the proceeds of sale of bonds or notes may be applied and pledging the proceeds to secure the payment of the bonds or notes or of any issue of the bonds or notes;
(7) Limitations on the issuance of additional bonds or notes and the terms upon which additional bonds or notes may be issued and secured;
(8) The procedure by which the terms of a contract with the bondholders or noteholders may be amended or abrogated, the amount of bonds or notes the holders of which must consent thereto and the manner in which the consent may be given; and
(9) Vesting in a trustee or trustees the property, rights, powers, remedies and duties which the authority considers necessary or convenient.
(b) The resolution authorizing the bonds or notes shall provide that such bonds or notes shall contain a recital that they are issued pursuant to this article, which recital shall be conclusive evidence of their validity and of the regularity of their issuance.
If the bonds or notes are then redeemable, the price of such purchase shall not exceed the redemption price then applicable plus accrued interest to the next interest payment date thereon. If the bonds or notes are not then redeemable, the price of such purchase shall not exceed the redemption price applicable on the first date after such purchase upon which the bonds or notes become subject to redemption plus accrued interest to such date. Upon such purchase, such bonds or notes shall be canceled.
All expenses incurred in carrying out the provisions of this article shall be payable solely from funds provided under the authority of this article. Such article does not authorize the authority to incur indebtedness or liability on behalf of or payable by the state or any county, municipality or any other political subdivision thereof.
Before the authority makes a hospital loan to any hospital, and as a condition precedent to the authority's making any such hospital loan, a certificate of need shall be obtained pursuant to article two-d of this chapter, or a determination shall be secured from the agency issuing the certificate of need that a certificate is not necessary for the hospital facilities with respect to which the hospital loan is proposed to be made: Provided, That if a certificate of need is not necessary for a specific project or projects, then the health care cost review authority created by section five, article twenty-nine-b of this chapter must be consulted by the authority concerning the availability of financial resources to both repay the loan and to fund the ongoing operations of the project or projects. The opinion of the health care cost review authority, while not determinative on the question of the issuance of the hospital loan, shall be entitled to substantial weight before the authority and shall be overcome only by clear and convincing evidence to the contrary. This section shall not apply to refinancing of present indebtedness or to refunding or advance refunding of bonds, notes, or for reimbursement of projects costs.
Note: WV Code updated with legislation passed through the 2016 Regular Session
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