SENATE BILL NO. 531

INTRODUCED BY T. BECK, J. LYNCH, D. SHEA, C. SWYSGOOD

A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING FOR ISSUANCE OF BONDS FOR PRIVATELY OWNED OR OPERATED CORRECTIONAL FACILITIES; AMENDING SECTIONS 90-7-102, 90-7-104, 90-7-303, AND 90-7-317, MCA; AND PROVIDING AN EFFECTIVE DATE."

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

Section 1. Section 90-7-102, MCA, is amended to read:

"90-7-102. Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:

(1) "Authority" means the Montana health facility authority created in 2-15-1815.

(2) "Capital reserve account" means the account established in 90-7-317.

(3) "Correctional facility" means a detention center or a regional correctional facility.

(4) "Costs" means costs allowed under 90-7-103.

(5) "Detention center" has the meaning provided in 7-32-2241.

(6) "Facility" means any health care facility or prerelease center provided for in 90-7-104 .

(7) (a) "Institution" means any public or private:

(i) nonprofit hospital, corporation, or other organization authorized to provide or operate a health facility in this state;

(ii) nonprofit prerelease center, corporation, or other organization authorized to operate a prerelease center in this state; or

(iii) nonprofit or other corporation authorized to own or operate a correctional facility in this state.

(b) The term also includes the following, provided that the entity is a nonprofit entity or is controlled by one or more nonprofit entities:

(i) a network of health care providers, regardless of how it is organized;

(ii) an integrated health care delivery system;

(iii) a joint venture or partnership between or among health care providers;

(iv) a purchasing alliance composed of health care providers;

(v) any health insurers and third-party administrators that are participants in a system, network, joint venture, or partnership that provides health services through one or more health facilities.

(8) "Participating institution" means an institution that owns or operates a facility for which the authority provides financing or refinancing pursuant to the provisions of this chapter.

(9) "Regional correctional facility" means a facility provided for in Title 53, chapter 30, part 5 .

(10) "Revenues" means, with respect to facilities, the rents, fees, charges, interest, principal repayments, and other income received or to be received by the authority from any source on account of the facilities."

Section 2. Section 90-7-104, MCA, is amended to read:

"90-7-104. Eligible facility. (1) The term "eligible facility" means any structure or building suitable for use as:

(a) a hospital, clinic, nursing home, or other health care facility as defined in 50-5-101;

(b) a public health center, as defined in 7-34-2102;

(c) a facility for persons with disabilities;

(d) a chemical dependency treatment facility;

(e) a nursing school;

(f) a medical teaching facility;

(g) a laboratory;

(h) a dental care facility;

(i) a prerelease center;

(j) a correctional facility;

(k) a diagnostic, treatment, or surgical center; or

(l) a structure or facility related to any of the uses enumerated in subsections (1)(a) through (1)(k) or required or useful for the operation of a health facility. These related facilities include supporting service structures and all necessary, useful, and related equipment, furnishings, and appurtenances and include without limitation the acquisition, preparation, and development of all lands and real and personal property necessary or convenient as a site for any of the uses enumerated in subsections (1)(a) through (1)(k).

(2) An eligible facility does not include:

(a) items such as food, fuel, supplies, or other items that are customarily considered as current operating expenses; and

(b) a structure used or to be used primarily for sectarian instruction or study or as a place for devotional activities or religious worship."

Section 3. Section 90-7-303, MCA, is amended to read:

"90-7-303. Procedure for issuance of bonds. (1) The authority may not undertake to finance any eligible facility unless, prior to the issuance of any bonds or notes, the members find that the facility will be operated by a health institution for the purpose of fulfilling its obligation to provide health care facilities , by a prerelease center for the purpose of preparing persons to reenter society, or by a correctional facility for the purpose of detention or incarceration and rehabilitation of criminal offenders.

(2) The authority may not allow the proceeds of any bonds or notes to be expended for any health care facility unless the facility has been reviewed and approved by the appropriate regional and state health planning boards and has received any approval required by Title 50, chapter 5, part 3.

(3) The authority may not allow the proceeds of any bonds or notes to be expended for any facility until it has been shown that the facility is financially feasible and that there will be sufficient revenues to ensure that principal and interest payments are made when they become due.

(4) The authority may not allow the proceeds of any bonds or notes to be expended for any facility until it has considered the ability of the institution to operate the facility based on the institution's experience and expertise.

(5) The authority shall ensure that its financings consistently provide fair and realistic terms and covenants sufficient to protect the position of the lenders or bondholders."

Section 4. Section 90-7-317, MCA, is amended to read:

"90-7-317. Capital reserve account. (1) There is a capital reserve account in the enterprise fund provided for in 90-7-202(17).

(2) The authority shall deposit into the capital reserve account:

(a) funds from state appropriations received for deposit into the account, as provided in 90-7-319, for bonds issued to finance capital projects for community health facilities that contract with the state to provide health care services, bonds issued to finance the facilities described in 90-7-220 and 90-7-221, or bonds used to finance prerelease centers or correctional facilities that contract with the state; and

(b) proceeds from the sale of bonds or notes to the extent provided in the resolutions or indentures of the authority authorizing their issuance.

(3) The authority may also deposit into the capital reserve account:

(a) revenue from fees and charges imposed by the authority;

(b) income from the investment of funds belonging to the authority; and

(c) any other funds that may be available to the authority for the purpose of the account from any other source, including loans authorized under 90-7-320."

NEW SECTION. Section 5. Effective date. [This act] is effective July 1, 1999.

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