Delaware General Assembly


CHAPTER 363

AN ACT TO AUTHORIZE THE STATE OF DELAWARE TO LOAN MONEYS TO HOSPITALS FOR THE IMPROVEMENT OF HOSPITAL FACILITIES AND AUTHORIZING THE STATE OF DELAWARE TO BORROW MONEY TO BE USED THEREFOR AND TO ISSUE BONDS AND NOTES THEREFOR AND APPROPRIATING THE MONEY BORROWED TO THE HOSPITAL IMPROVEMENT FUND TO BE ADMINISTERED BY THE STATE BOARD OF HEALTH.

Be it enacted by the General Assembly of the State of Delaware (three-fourths of all the members elected to each House concurring therein):

Section 1. Title 16, Delaware Code, is amended by adding thereto a new part to read:

PART VIII. HOSPITALS

CHAPTER 90. HOSPITAL CAPITAL IMPROVEMENTS

SUBCHAPTER I. LOANS

§ 9001. Definitions

As used in this Chapter--"hospital" means a non-profit hospital located or to be located in this State, operated for general medical and surgical treatment and operated or to be operated by a nonprofit corporation incorporated under the laws of this State.

§ 9002. Loans for hospital construction

(a) The State Board of Health shall receive and approve or disapprove applications from hospitals for loans to be made from funds provided for by this Chapter for the construction, expansion, relocation or modernization of hospital buildings, facilities and equipment. The Board may in its discretion designate the Health Facilities Planning Council Inc., a Delaware corporation, to make the examinations required by this Chapter and may consider its advice and recommendation.

(b) In the performance of its duties and responsibilities in relations to such loans, the Board may consider the current status and operations of hospitals throughout this State. In performing this function, the Board may call upon any State official or agency for information that may be helpful, and it may utilize the service of private agencies for additional research analysis or information.

§ 9003. Eligibility

In considering applications for loan funds and prior to making recommendations upon any application for funds under this Chapter, the Board shall determine that:

(1) the applicant is, in fact, a hospital as defined in section 9001 of this title;

(2) the applicant has sufficient financial integrity and is in such financial condition that it can reasonably be expected to meet its obligations to this State in the repayment of the principal and interest on the loan;

(3) there exists a need for the hospital facilities applied for in relation to the existing and planned hospitals in this State;

(4) the hospital's managerial, administrative and medical staffs conform or will conform to acceptable standards of professional integrity and ability.

§ 9004. Staff assistance

The Board may seek staff assistance from other State agencies, from other governmental agencies and from private and voluntary agencies. The State Board of Health may from time to time, employ such expert consultants as it deems necessary to expedite and advance its work.

§ 9005. Repayment of loans; written agreement; acceleration

(a) Loans made to any hospitals under the provisions of this Chapter shall be made on the express condition that they shall be repaid in full to this State over a period not in excess of 20 years from the time the loan funds are paid out to the hospital or for such lesser time as the Board may determine at the time of granting the loan.

(b) At such time as a loan is made pursuant to this Chapter, the applicant and the State shall enter into a written agreement, wherein the terms and conditions of the loan shall be set forth in full. Should the applicant or the hospital thereafter cease to be a hospital as defined in section 9001 of this title, then the full amount of the unpaid loan shall immediately become due and payable.

(c) The repayment schedule shall provide that the principal of the loan shall be amortized in equal annual installments over the life of the loan, and that the interest as established in sub-section (d) of this section shall be paid annually on the same date as the principal payment.

(d) A hospital which is granted a loan under the provisions of this Chapter shall repay the loan with interest on the unpaid principal balance. The rate of interest applicable to any loan shall be established by the State Treasurer at the time the loan funds are granted or within 6 months thereafter. This rate of interest shall be the rate declared by the State Treasurer at that time as applicable to the last issue of general obligation bonds sold by the State.

§ 9006. Security; releases

(a) A hospital receiving a loan under this Chapter shall execute and deliver to this State a good and sufficient mortgage on property of the hospital sufficient to guarantee repayment of the loan.

(b) Releases or satisfactions of mortgages under this section may be executed on behalf of the State by the Governor and attested by the Secretary of State.

§ 9007. Records and payments

(c) The State Board of Health shall be responsible for maintaining all the records concerning the loans and repayments authorized under this chapter necessary to safeguard the interest of the State. The Board shall initiate all invoices and other documents related to the Hospital Construction Fund except as otherwise provided by § 9010 (c) of this chapter. The Board shall provide at least 30 days' notice in writing to the Budget Director of any monies to be withdrawn from the Fund.

() All payments of interest and repayments of principal shall be made to the Board of Health which shall immediately forward the same to the State Treasurer for deposit.

SUBCHAPTER 11. HOSPITAL CONSTRUCTION FUND

§ 9010. Hospital construction

(a) A special fund is created in the State Treasury to be known as the "Hospital Construction Fund," hereafter referred to in this subchapter as "Fund."

(b) The Fund shall be expended for the hospital loans authorized by this Chapter.

(c) There is appropriated to the Fund $10,000,000 or so much thereof as may be needed, for the purpose of making the loans authorized by this Chapter.

§ 9011. Reimbursement of the fund; investment of idle funds

(d) All repayments of principal and payments of interest to the State pursuant to section 9005 of this chapter shall be deposited in the Fund. The State Board of Health shall from time to time and at least annually pay sums from the Fund to the General Fund of the State equal to the claims against the General Fund that become payable for principal and interest pursuant to § 9018 of this Chapter.

(e) The total appropriation of State money to the Fund shall not exceed $10,000,000 but the Fund may exceed $10,000,000 if such excess arises from repayments.

(f) The Budget Director may invest and reinvest any sums in the Fund, the proceeds thereof to be deposited in the Hospital Construction Fund.

SUBCHAPTER III.

BORROWING OF MONEY FOR THE FUND

§ 9015. Appropriation

There is appropriated to the Hospital Construction Fund $10,000,000 or so much thereof as shall be received from the sale of the bonds and notes hereinafter authorized, or so much as may from time to time be needed in the Fund.

§ 9016. Reversion

Any of the appropriated funds remaining unexpended at the end of any fiscal year shall not revert to the General Fund, but shall remain to be used for the purposes set forth in this Chapter.

§ 9017. Issuance of bonds and notes

The sum of $10,000,000 shall be borrowed by the issuance of bonds and bond anticipation notes upon the full faith and credit of the State of Delaware. Such bonds and notes shall be issued in accordance with the provisions of Chapter 74, Title 29. For purpose of identification, the bonds issued pursuant to this authorization Act may be known, styled or referred to as "Hospital Construction Bonds of 19 (insert year) ."

§ 9018. Additional appropriation

There is appropriated from the General Fund such sums as may be necessary for the expenses incident to the issuance of the bonds and notes authorized by this Chapter and such further sums as may be necessary to pay any interest which becomes due on such bonds and notes during any fiscal year and such further sums as may be necessary for the repayment of the principal of any of the said bonds which become due during any fiscal year. Vouchers for the payment of the expenses incident to the issuance of bonds and notes and for the interest and repayment of said notes shall be signed by the Secretary of State by and with the approval of the Issuing Officers. Any moneys received from the premium and accrued interest on the sale of bonds shall be deposited by the credit of the General Fund.

§ 9019. Budget Appropriation Bill

The Budget Appropriation Bill which shall be enacted and approved by the General Assembly for any fiscal year or biennium, shall contain under the Debt Service Item provisions for the payment of interest and principal maturities of the bonds (or notes which are not to be funded by the issuance of bonds) issued under the authority of this Chapter, and such of the revenues of the State of Delaware as are not prohibited by constitutional provisions or committed by preceding statutes for other purposes are hereby pledged for the redemption and cancellation of said bonds and payment of interest thereon.

Approved June 28, 1968.