Sale of Undeveloped Real Property by Brunswick County Hospital Authority

Re: Advisory Opinion; Administrative Division – Human Services/Medical Facilities Section; Sale of Undeveloped Real Property by Brunswick County Hospital Authority; N.C. Gen. Stat. § 131E-13

Dear Mr. Edwards:

By letter dated May 8, 2000, as counsel for the Brunswick County Hospital Authority (“the Authority”), you informed us that the Authority is considering whether to sell some of its vacant real property to one or more physicians. You asked whether the Authority would have to comply with the terms of N.C. Gen. Stat. § 131E-13 if it decided to sell the property. For the reasons given below, it is our opinion that the Authority would not have to comply with the terms of N.C. Gen. Stat. § 131E-13 if the Authority determined that the vacant property is not necessary, convenient or related to the operation of any hospital facility owned by the Authority.

The management of hospital authorities is governed largely by the provisions of the Hospital Authorities Act, which is found at N.C. Gen. Stat. §§ 131E-15 through -34. However, the lease, sale and encumbrance of hospital facilities by hospital authorities are governed by N.C. Gen. Stat. § 131E-13, which is located in the Municipal Hospital Act. Subsection (a) of N.C. Gen. Stat. § 131E-13 imposes conditions upon the sale of a hospital facility. Subsection (b) specifies how outstanding general obligation or revenue bonds are to be retired in the event of a sale. Subsection (d) prescribes the procedure an authority must follow before selling any part or all of a hospital facility. Subsection (g) exempts a sale from the provisions of N.C. Gen. Stat. § 153A-176 and Article 12 of Chapter 160A of the North Carolina General Statutes. The remaining subsections of N.C. Gen. Stat. § 131E-13 are not relevant to the sale of a hospital facility.

The term “hospital facility”, as defined in both the Municipal Hospital Act and the Hospital Authorities Act, encompasses not only buildings but also “all necessary, convenient, or related interests in land.” N.C. Gen. Stat. §§ 131E- 6(4) and -16(15) (emphasis added). Consequently, if the Authority’s vacant real property is not necessary, convenient, or related to the operation of any hospital facility, the property would not be a part of a hospital facility and the Authority could sell the property without complying with N.C. Gen. Stat. § 131E-13. We cannot form any opinion on the question of whether the subject property is or is not a part of a hospital facility because we do not know whether or how the property is being used or how the property relates to any hospital facility owned by the Authority.

Signed by:

Ann Reed Senior Deputy Attorney General

James A. Wellons Special Deputy Attorney General