hb70.html
05 LC 33 0563
House Bill 70
By: Representatives Powell of the 29th and Dodson of the 75th

A BILL TO BE ENTITLED
AN ACT

To amend Title 31 of the Official Code of Georgia Annotated, relating to health, so as to provide for legislative findings; to create the Georgia Hospital Insurance Authority; to provide a short title; to provide for definitions; to provide for the members of the authority and their selection, service, and terms of office; to provide for the filling of vacancies; to provide for the powers, duties, operations, and financial affairs of the authority; to provide for the general purpose of the authority; to provide for other related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.
Title 31 of the Official Code of Georgia Annotated, relating to health, is amended by adding at its end a new Chapter 46 to read as follows:

"CHAPTER 46

31-46-1.
The General Assembly finds that there presently exists a crisis in the field of hospital liability insurance. Hospitals in this state are having increasing difficulty in locating liability insurance and, when such hospitals are able to locate such insurance, the insurance is extremely costly. The result of this crisis is the potential for a diminution of the availability of access to health care services and the resultant effect on the health and well-being of the citizens of this state. The General Assembly finds that the state has a significant interest in ensuring the availability of liability insurance for hospitals which provide indigent care in this state at reasonable cost to the facilities. The General Assembly further finds that the provision of such insurance to the hospitals will result in the increased availability of health care services for the citizens of this state which is of substantial benefit to the state and its citizens.
31-46-2.
This chapter shall be known and may be cited as the 'Georgia Hospital Insurance Authority Act.'

31-46-3.
This chapter, being for the health and welfare of the state and its inhabitants, shall be liberally construed to effect its purposes.

31-46-4.
(a) There is created a body corporate and politic to be known as the Georgia Hospital Insurance Authority, which shall be deemed to be a public corporation of the State of Georgia by that name, style, and title. Such body may contract and be contracted with, sue and be sued, implead and be impleaded, and complain and defend in all courts of law and equity.
(b) The authority shall consist of 13 members as follows:
(1) Three members shall be appointed by the Governor. The terms of the initial members appointed by the Governor shall begin July 1, 2005, and one such member shall serve for a term of two years, one such member shall serve for a term of three years, and one such member shall serve for a term of four years. Thereafter, all members appointed by the Governor shall serve for terms of four years;
(2) Three members shall be appointed by the President of the Senate. The terms of the initial members appointed by the President of the Senate shall begin July 1, 2005, and one such member shall serve for a term of two years, one such member shall serve for a term of three years, and one such member shall serve for a term of four years. Thereafter all members appointed by the President of the Senate shall serve for terms of four years;
(3) Three members shall be appointed by the Speaker of the House of Representatives for terms concurrent with the Speakeŕs term as Speaker; and
(4) The following shall serve ex officio: the state auditor, the commissioner of community health, the Commissioner of Insurance, and the director of the Risk Management Division of the Department of Administrative Services.
All members shall serve until their successors are appointed and qualified. All members shall be residents of Georgia.
(c) The members of the authority shall elect one of their members as chairperson and another as vice chairperson. They shall also elect a secretary and a treasurer who need not be members. The offices of secretary and treasurer may be combined in one person.
(d) The authority may make such bylaws for its government as is deemed necessary but is under no obligation to do so.
(e) Any nine members of the authority shall constitute a quorum necessary for the transaction of business, and a majority vote of those present at any meeting at which there is a quorum shall be sufficient to do and perform any action permitted to the authority by this chapter, except that the votes of a majority of the total membership of the authority shall be required in order for the authority to incur any obligation or indebtedness or enter into any contract or agreement. No person shall be entitled to exercise or cast a proxy vote for any member. No vacancy on the authority shall impair the right of a quorum to transact any and all business.
(f) The members shall receive no compensation for their services; but all members shall be entitled to be reimbursed from funds of the authority for actual expenses, including travel and any other expenses, incurred while in the performance of their duties. Employees of the authority shall receive reasonable compensation, to be determined by the members of the authority, for their services.
(g) A vacancy in one of the appointive positions shall be filled in the same manner as the original appointment for the remainder of the unexpired term.

31-46-5.
As used in this chapter, the term:
(1) 'Authority' means the Georgia Hospital Insurance Authority created in Code Section 31-46-4.
(2) 'Bond,' 'bonds,' or 'revenue bonds' means revenue bonds, refunding notes, notes, interim certificates, bond anticipation notes, and other evidences of indebtedness of the authority issued under this chapter.
(3) 'Medical facility' means any hospital in this state having less than 200 licensed beds and its credentialed physicians and where such hospital, as of January 1, 2005, did not participate in a captive or self-insurance trust program established for liability insurance purposes.

31-46-6.
(a) The authority shall have power:
(1) To have a seal and alter the same at pleasure;
(2) To adopt, amend, and repeal bylaws and rules consistent with this chapter to regulate its affairs, to carry into effect the powers and purposes of the authority, and to conduct its business;
(3) To acquire by purchase, lease, or otherwise, with the exception of eminent domain, and to hold, lease, and dispose of real and personal property of every kind and character for its corporate purposes;
(4) To acquire in its own name by purchase, on such terms and conditions and in such manner as it may deem proper, real property or rights of easements therein or franchises necessary or convenient for its corporate purposes and to use the same so long as its corporate existence shall continue; to lease or make contracts with respect to the use of the same; or to dispose of the same in any manner it deems to the best advantage of the authority;
(5) To appoint, select, and employ officers, agents, consultants, and employees, including, but not limited to, fiscal agents, actuaries, accountants, risk managers, health care and financial experts, and attorneys, and fix their respective compensations;
(6) To appoint, select, and employ an executive director;
(7) To make contracts and leases and to execute all instruments necessary or convenient and to dispose by conveyance of its title in fee simple of real and personal property of every kind and character. Any and all persons, firms, and corporations; the state; and any and all political subdivisions, departments, institutions, or agencies of the state are authorized to enter into contracts, leases, or agreements with the authority upon such terms and for such purposes as they deem advisable. The authority is specifically authorized to convey title, in fee simple, to any and all of its lands and any improvements thereon to any persons, firms, corporations, municipalities, the State of Georgia, or the United States government, or any agency or department thereof;
(8) To invest and reinvest funds;
(9) To provide, obtain, or purchase insurance or reinsurance agreements or both under such terms and conditions as the authority deems appropriate;
(10) To settle and pay claims under such insurance agreements under such conditions and terms as the authority deems appropriate;
(11) To accept loans or grants of money or materials or property of any kind from the United States of America or any agency or instrumentality thereof upon such terms and conditions as the United States of America or such agency or instrumentality may impose;
(12) To accept loans or grants of money or materials or property of any kind from the State of Georgia or any agency or instrumentality or political subdivision thereof upon such terms and conditions as the State of Georgia or such agency or instrumentality or political subdivision may impose;
(13) To exercise any power usually possessed by private corporations performing similar functions which is not in conflict with the Constitution and laws of this state;
(14) To sell, convey, mortgage, pledge, assign, lease, exchange, transfer, or otherwise dispose of all or any part of its property or assets;
(15) To borrow money for any corporate purposes from any bank, banks, or other lending institutions and to execute evidences of such indebtedness and to secure the same;
(16) To fix, alter, charge, and collect premiums from participating medical facilities for insurance provided by or procured by the authority, such rates to be at least sufficient to provide for payment of all expenses of the authority, the conservation, maintenance, and operation of the authority on a sound actuarial basis, the payment of principal and interest on its notes, bonds, and other evidences of indebtedness or obligation, and to fulfill the terms and provisions of any agreement made with the purchasers and holders of any such notes, bonds, or other evidences of indebtedness or obligation; and
(17) To do all things necessary or convenient to carry out the powers expressly given in this chapter.
(b) No part of the revenues or assets of the authority may inure to the benefit of or be distributable to its members or officers or other private persons. Any net earnings of the authority beyond that necessary for retirement of authority indebtedness or to implement the public purposes of this chapter shall inure to the benefit of the state. Upon termination or dissolution, all rights and properties of the authority shall pass to and are vested in the state, subject to the rights of lienholders and other creditors.

31-46-7.
(a) The executive director shall approve all accounts for salaries, allowable expenses, and expenses incidental to the operation of the authority.
(b) The executive director shall manage the staff and employees of the authority under the direction and approval of the authority.
(c) The executive director shall attend the meetings of the authority and shall maintain a record of the proceedings of the authority along with all books, documents, and papers filed with the authority, the minutes of the authority, and its official seal. The executive director may cause copies to be made of all minutes and other records and documents of the authority and may give certificates under seal of the authority to the effect that such copies are true copies, and all persons dealing with the authority may rely upon such certificates.

31-46-8.
(a) Without limiting the generality of any provisions of this chapter, the general purpose of the authority is declared to be that of providing or procuring insurance for public and private medical facilities which provide any indigent health care services in this state. The authority may develop, market, finance, and maintain one or more programs of insurance for such public and private medical facilities that desire to participate in such program; and the authority shall be authorized to do any and all things deemed by the authority to be necessary, convenient, or desirable for and incident to the efficient and proper development and operation of such types of undertakings.
(b) The authority and its activities shall not be subject to Title 33. The Commissioner of Insurance may, however, adopt and enforce rules, regulations, and standards to ensure the fiscal and actuarial soundness of the authority and its activities; and all records of the authority shall be open at any time to inspection by the Commissioner of Insurance or his or her authorized agents.

31-46-9.
In developing a program of insurance for those medical facilities that desire to participate in such program, the authority may establish such eligibility standards and underwriting criteria for participating medical facilities as the authority deems appropriate, including but not limited to: (1) requirements that participating medical facilities assume a part or parts of any insured risks; and (2) contractual requirements for payment of premiums or assessments or both.

31-46-10.
(a) All meetings of the authority shall be open to the public at all times. Ample notice shall be given to all members of the authority and to the public of any special or called meeting of the authority. The minutes of all meetings and all actions taken by the authority shall likewise be open to public inspection.
(b) Each purchase made on behalf of the authority of personal property or services in excess of $20,000.00 shall be accomplished pursuant to competitive bids, after having published invitations to bid in one or more newspapers in general circulation in the state prior to the award of any contract. All bids shall be opened during meetings of the authority, and the rejection or acceptance thereof shall be entered upon the minutes of the authority.
(c) Any surplus or unserviceable property of the authority shall be disposed of pursuant to competitive bids, which shall be advertised in one or more newspapers in general circulation in the state. All bids for the disposal of such property shall be opened during public meetings of the authority, and the acceptance or rejection thereof shall be entered upon the minutes of the authority.
(d) At the conclusion of each fiscal year of the authority, the affairs of the authority shall be audited by a certified public accounting firm, and a report of such audit shall be submitted to the General Assembly for review.

31-46-11.
(a) Every member of the authority and every employee of the authority who knowingly has any interest, direct or indirect, in any contract to which the authority is or is about to become a party, in any other business of the authority, or in any firm or corporation doing business with the authority shall make full disclosure of such interest to the authority. Failure to disclose such interest shall constitute cause for which an authority member may be removed or an employee discharged or otherwise disciplined at the discretion of the authority.
(b) Any contract or transaction of the authority involving a conflict of interest not disclosed under subsection (a) of this Code section or involving a violation of any other provision of law regulating conflicts of interest which is applicable to the authority or its members, officers, or employees shall be voidable by the authority.

31-46-12.
The Attorney General shall provide legal services for the authority, and Code Sections 45-15-13 through 45-15-16 shall apply with respect to such provision of legal services.

31-46-13.
(a) The authority may issue bonds for the purposes of this chapter, including without limitation the provision of initial capital or reserves or both needed for the provision or procurement of insurance services by the authority.
(b) The authority shall have the power to borrow money and to issue bonds, regardless of whether the interest payable by the authority incident to such loans or bonds or income derived by the holders of the evidence of such indebtedness or bonds is, for purposes of federal taxation, includable in the taxable income of the recipients of such payments or is otherwise not exempt from the imposition of such taxation on the recipient.
(c) No bonds, notes, or other obligations of, and no indebtedness incurred by, the authority shall constitute an indebtedness or obligation or a pledge of the faith and credit of the State of Georgia or its agencies; nor shall any act of the authority in any manner constitute or result in the creation of an indebtedness of the state or its agencies or a cause of action against the state or its agencies.
(d) It is found, determined, and declared that the creation of the authority and the carrying out of its corporate purpose are in all respects for the benefit of the people of this state and are a public purpose and the authority will be performing an essential government function in the exercise of the powers conferred upon it by this chapter. The state covenants with the holders of the bonds that the authority shall not be required to pay any taxes or assessments upon any of the property acquired or leased by the authority or under the jurisdiction, control, possession, or supervision of the authority or upon the activities of the authority in the financing of the activities financed by the authority or upon any principal, interest, premium, fees, charges, or other income received by the authority and that the bonds of the authority, their transfer, and the income therefrom shall at all times be exempt from taxation within the state. The exemption from taxation is declared to specifically extend to any subsidiary corporation created by the board of directors of the authority but shall not extend to tenants or lessees of the authority unless otherwise exempt from taxation. The exemption from taxation shall include exemptions from sales and use taxes on property purchased by the authority or for use by the authority.
(e) The state does pledge to and agree with the holders of any bonds issued by the authority pursuant to this chapter that the state will not alter or limit the rights vested in the authority to fulfill the terms of any agreement made with or for the benefit of the holders of bonds or in any way impair the rights and remedies of bondholders until the bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged or funds for the payment of such are fully provided. The authority is authorized to include this pledge and agreement of the state in any agreement with bondholders.

31-46-14.
(a) The offer, sale, or issuance of bonds, notes, or other obligations by the authority shall not be subject to regulation under Chapter 5 of Title 10, the 'Georgia Securities Act of 1973.' No notice, proceeding, or publication except those required in this chapter is necessary to the performance of any act authorized in this chapter; nor is any such act subject to referendum.
(b) The authority shall fix such rates, fees, and charges for use of its services and facilities as is sufficient in the aggregate, when added to any other grants or funds available to the authority, to provide funds for the payment of the interest on and principal of all bonds payable from said revenues and to meet all other encumbrances upon such revenues as provided by any agreement executed by the authority in connection with the exercise of its powers under this chapter and for the payment of all operating costs and expenses which shall be incurred by the authority, including provisions for appropriate reserves.
(c) The use and disposition of the authoritýs revenue is subject to the provisions of the resolutions authorizing the issuance of any bonds payable therefrom or of the trust agreement or indenture, if any, securing the same. The authority may designate any of its bonds as general obligations or may limit the source of repayment pursuant to the resolution authorizing the issuance of the bonds.
(d) The making of any loan commitment or loan, and the issuance, in anticipation of the collection of the revenues from such loan or loans, of bonds to provide funds therefor, may be authorized under this chapter by resolution of the authority. Unless otherwise provided therein, such resolution shall take effect immediately and need not be published or posted. The authority, in determining the amount of such bonds, may include all costs and estimated costs of the issuance of the bonds; all fiscal, legal, and trustee expenses; and all costs of the project. Such bonds may also be issued to pay off, refund, or refinance any outstanding bonds or other obligations of any nature, whether or not such bonds or other obligations are then subject to redemption; and the authority may provide for such arrangements as it may determine for the payment and security of the bonds being issued or for the payment and security of the bonds or other obligations to be paid off, refunded, or refinanced.
(e) Bonds may be issued under this chapter in one or more series; may bear such date or dates; may mature at such time or times, not exceeding 40 years from their respective dates; may bear interest at such rate or rates, payable at such time or times; may be payable in such medium of payment at such place or places; may be in such denomination or denominations; may be in such form, either coupon or registered or book entry; may be issued in such specific amounts; may carry such registration, conversion, and exchangeability privileges; may be declared or become due before the maturity date thereof; may provide such call or redemption privileges; may have such rank or priority; may be the subject of a put or agreement to repurchase by the authority or others; may be resold by the authority, once acquired, without the acquisition being considered the extinguishment of the bonds; may be issued for a project or for more than one project, whether or not such project is identified at the time of bond issuance; and may contain such other terms, covenants, assignments, and conditions as the bond resolution authorizing the issuance of such bonds or any indenture or trust agreement may provide. The authority may sell such bonds in such manner, at such price or prices, and on such terms and conditions as the authority determines.
(f) The bonds must be signed by the chairperson or vice chairperson of the authority; the corporate seal of the authority must be impressed, imprinted, or otherwise reproduced on the bonds; and the bonds must be attested by the signature of the secretary or assistant secretary of the authority. The signatures of the officers of the authority and the seal of the authority on any bond issued by the authority may be facsimile if the instrument is authenticated or countersigned by a trustee other than the authority itself or an officer or employee of the authority. All bonds issued under authority of this chapter bearing signatures or facsimiles of signatures of officers of the authority in office on the date of the signing thereof are valid and binding, notwithstanding that before the delivery thereof and payment therefor such officers whose signatures appear thereon have ceased to be officers of the authority. Pending the preparation of the definitive bonds, interim certificates, in such form and with such provisions as the authority may determine, may be issued to the purchasers of bonds to be issued under this chapter.
(g) The provisions of this chapter and of any bond resolution, indenture, or trust agreement entered into pursuant to this chapter are a contract with every holder of the bonds; and the duties of the authority under this chapter and under any such bond resolution, indenture, or trust agreement are enforceable by any bondholder by mandamus or other appropriate action or proceeding at law or in equity.
(h) The authority may provide for the replacement of any mutilated, lost, or destroyed bond in the manner provided by the resolution, indenture, or trust agreement.
(i) Any limitations with respect to interest rates or any maximum interest rate or rates found in Article 3 of Chapter 82 of Title 36, the 'Revenue Bond Law,' the usury laws of this state, or any other laws of this state do not apply to bonds of the authority.
(j) All bonds issued by the authority under this chapter shall be issued and shall be validated by the Superior Court of Fulton County, Georgia, under and in accordance with the procedures set forth in Code Sections 36-82-73 through 36-82-83, which comprise a portion of the 'Revenue Bond Law,' as now or hereafter in effect, except as provided in this chapter. Notes and other obligations of the authority may be, but are not required to be, so validated.
(k) All bonds must bear a certificate of validation signed by the clerk of the Superior Court of Fulton County, Georgia. Such signature may be made on the certificate of validation of such bonds by facsimile or by manual execution, stating the date on which such bonds were validated; and such entry is original evidence of the fact of judgment and shall be received as original evidence in any court in this state.
(l) The authority shall reimburse the district attorney for his or her actual costs, if any, associated with the bond validation proceedings. The fees payable to the clerk of the Superior Court of Fulton County for validation and confirmation shall be as follows for each bond, regardless of the denomination of such bond: $1.00 for each bond for the first 100 bonds; 25¢ for each of the next 400 bonds; and 10¢ for each bond over 500.
(m) In lieu of specifying the rate or rates of interest which bonds to be issued by the authority are to bear, the notice to the district attorney or the Attorney General; the notice to the public of the time, place, and date of the validation hearing; and the petition and complaint for validation may state that the bonds when issued will bear interest at a rate not exceeding a maximum per annum rate of interest, which may be fixed or may fluctuate or otherwise change from time to time, specified in such notices and the petition and complaint or may state that, if the bonds are to bear different rates of interest for different maturity dates, none of such rates will exceed the maximum rate, which may be fixed or may fluctuate or otherwise change from time to time, so specified; provided, however, that nothing in this Code section shall be construed as prohibiting or restricting the right of the authority to sell such bonds at a discount, even if in doing so the effective interest cost resulting therefrom would exceed the maximum per annum interest rate specified in such notices and in the petition and complaint.
(n) Prior to issuance, all bonds shall be subject to the approval of the Georgia State Financing and Investment Commission.
(o) Any other law to the contrary notwithstanding, this chapter shall govern all civil claims, proceedings, and actions respecting debt of the authority evidenced by bonds.

31-46-15.
The bonds authorized by this chapter are securities in which:
(1) All public officers and bodies of this state;
(2) All local governments of this state;
(3) All insurance companies and associations and other persons carrying on an insurance business;
(4) All banks, bankers, trust companies, saving banks, and savings associations, including savings and loan associations, building and loan associations, investment companies, and other persons carrying on a banking business;
(5) All administrators, guardians, executors, trustees, and other fiduciaries; and
(6) All other persons whomsoever who are authorized to invest in bonds or other obligations of this state
may properly and legally invest funds, including capital in their control or belonging to them. Such bonds are also securities which may be deposited with and shall be received by all public officers and bodies of this state and local governments for any purpose for which deposit of the bonds or other obligations of this state is authorized.

31-46-16.
(a) All or any part of the gross or net revenues and earnings derived from any particular loan or loans and any and all revenues and earnings received by the authority, regardless of whether such revenues and earnings were produced by a particular loan or loans for which bonds have been issued, may be pledged by the authority to the payment of the principal of and interest on bonds of the authority as may be provided in any resolution authorizing the issuance of such bonds or in any indenture or trust agreement pertaining to such bonds.
(b) Such funds so pledged, from whatever source received, may include funds received from one or more of all sources and may be set aside at regular intervals into sinking funds for which provision may be made in any such resolution or indenture or trust agreement, which sinking funds may be pledged to and charged with the payment of:
(1) The interest on such bonds as such interest becomes due;
(2) The principal of the bonds as the same mature;
(3) The necessary charges of any trustee, paying agent, or registrar for such bonds;
(4) Any premium on bonds retired on call or purchase; and
(5) Reimbursement of a credit enhancement provider who has paid principal of or premium or interest on any bond.
(c) The use and disposition of any sinking fund may be subject to regulations for which provision may be made in the resolution authorizing the issuance of the bonds or in the trust instrument or indenture securing the payment of the same.

31-46-17.
(a) Any issue of bonds may be secured by a trust agreement or indenture made by the authority with a corporate trustee, which may be any trust company or bank having the power of a trust company inside or outside this state. Such trust agreement or indenture may pledge or assign all revenue, receipts, and earnings to be received by the authority from any source and any proceeds which may derive from the disposition of any real or personal property of the authority or proceeds of insurance carried thereon.
(b) The resolution providing for the issuance of bonds and such trust agreement or indenture may contain provisions for protecting and enforcing the rights and remedies of the bondholders, including the right of appointment of a receiver on default in the payment of any principal or interest obligation and the right of any receiver or trustee to enforce collection of any rates, fees, and charges pertaining to any loan, any overdue principal and interest on any loan, any overdue principal of and interest on all bonds in the issue, all costs of collection, and all other costs reasonably necessary to accomplish the collection of such sums in the event of any default of the authority.
(c) Such resolution, trust agreement, or indenture may include covenants setting forth the duties of the authority regarding the custody, safeguarding, and application of all funds of the authority, including any proceeds derived from the disposition of any real or personal property of the authority or proceeds of insurance carried thereon. In addition, such resolution, trust agreement, or indenture may include covenants providing for the operation, maintenance, repair, and insurance of any facility or capital improvements constructed or acquired with loan proceeds.
(d) All expenses incurred in carrying out any trust agreement or indenture under this Code section may be treated as a part of the cost of financing and administering the loans that will be funded or acquired with the proceeds of the bonds governed by such trust agreement or indenture.

31-46-18.
(a) All moneys received pursuant to the provisions of this chapter, whether as proceeds from the sale of bonds or other obligations, as grants or other contributions, or as revenues and earnings, shall be deemed to be trust funds to be held and applied solely as provided in this chapter. The authority shall, in the resolution providing for the issuance of bonds or in the trust indenture, provide for the payment of the proceeds of the sale of the bonds and the earnings and revenues to be received to any officer who, or any agency, bank, or trust company which, shall act as trustee of such funds and shall hold and apply the same to the purposes expressed in this chapter, subject to such regulations as this chapter and such resolution or trust indenture may provide.
(b) The authority may pledge for the payment of its bonds such assets, funds, and properties as the resolution providing for the issuance of its bonds may provide. Any such pledge made by the authority is valid and binding from the time when the pledge is made; the moneys or properties so pledged and thereafter received by the authority are immediately subject to the lien of such pledge without any physical delivery thereof or further act; and the lien of any such pledge is valid and binding as against all parties having claims of any kind against the authority, irrespective of whether such parties have notice thereof. No resolution or any other instrument by which a pledge is created need be recorded."

SECTION 2.
All laws and parts of laws in conflict with this Act are repealed.