Alabama Attorney General Opinion 1979-0216

LEE L. HALE DEPUTY ATTORNEY GENERAL WILLIAM M. SEKURS, EXECUTIVE ASSISTANT WALTER S. TURNER CHIEF ASSISTANT ATTORNEY GENERAL JANIE NOBLES ADMIN. IVE ASSISTANT AREA MOM. 1345110 I 30 CHARLES A. GRADDICK ATTORNEY GENERAL STATE OF ALABAMA MAY 31 MS ADMINISTRATIVE BUILDING 44 NORTH UNION OFFICE OF THE ATTORNEY GENERAL • • • Honorable Hobson Manasco, Jr. Attorney Winston County Commission Post Office Box-682 Manasco Professional Plaza Haleyville, AL 35565 Winston County - Taxation - Health Facilities Tax levied for public health facilities may be expended for public health facilities as the county governing body deems to be in the public interest. Dear Mr. Manasco: This office has received your request for an opinion and the pertinent part of your request is set out as follows: "On September 18, 1965, the Winston County Board of Revenue, (presently the Winston County Commission), under authority granted to said Board of Revenue by Amendment 72 to the Constitution of Alabama of 1901, called for an election to determine whether Winston County Honorable Hobson Manasco, Jr. Attorney Winston County Commission Page 2. should levy and collect a special county tax, not exceeding 4 Mills on each dollar, to be used solely for acquiring, purchasing, leasing, or otherwise constructing, operating, equipping or maintaining county hospitals and public health facilities (copies of said minutes enclosed for your inspection). As per the minutes, an election was held on October 14, 1965, and an additional tax was passed by the voters of Winston County (a copy of election returns enclosed for your inspection). Certain warrants in the amount of $525,000 were issued against this special tax to pay for the construction of a county hospital. There was a later issue of warrants in the amount of $215,000 to provide operating capital for the county hospital (copy of both warrant issues are attached for your inspection). "On or about March 31, 1969, the Winston County Hospital Board was incorporated (copy of Certificate of Incorporation enclosed for your inspection). A dispute arose between the Winston County Hospital Board and the Winston County Commission concerning the transfer of certain funds out of the Special Hospital Tax Funds to Winston County Funds and a Honorable Hobson Manasco, Jr. Attorney Winston County Commission Page 3. lawsuit was filed which ultimately resulted in a Coriment Final Declaratory Judgment (copy of said Consent Final Declaratory Judgment being enclosed for your inspection). I am informed by the Winston County Commission that all payments on both warrant issues are current and the County is in compliance with all requirements of reserve funds contained in the warrants. "The 4 Mill Tax is collected by the Tax Collector and 1 Mill (25%) is paid directly by the Tax Collector to the Hospital Board as per the terms of the Consent Decree. 3 Mills (75%) is paid by the Tax Collector to the Winston County Commission to meet the warrant obligations. I am informed by the Winston County Commission that this 3 Mills of the tax resulted in tax revenues of $73,861 for the last taxable year. Approximately $47,000 per year is required to service both warrant issues leaving approximately $26,000 a year as surplus which accumulates year to year. To date, this surplus consists of approximately $167,000. "Winston County has a Winston County Health Center located in Double Springs, Alabama, the construction of which was financed by a warrant issue in the Honorable Hobson Manasco, Jr. Attorney Winston County Commission Page 4. amount of $195,000, issued in 1974, to be paid from the Courthouse and Jail Fund. The operation of the Winston County Health Center is paid for out of the County General Fund and is a joint operation with the State Health Department. The warrant issue on the Winston County Health Center is payable over a 10 year period at approximately $22,000 per year. The County must now appropriate $12,500 per year for the operation of the Winston County Health Center and appropriate $10,000 per year for utilities and maintenance on the building. "In light of the foregoing facts and circumstances, the Winston County Commission requests your opinion on the following question: "May the Winston County Commission apply the $167,000 surplus toward retiring the debt on the Winston County Health Center and apply any balance toward the operation of the Winston County Health Center and continue to use said surplus as it accumulates toward the operational expense of the Winston County Health Center." Honorable Hobson Manasco, Jr. Attorney Winston County Commission Page 5. I am of the opinion that your inquiry should be answered in the affirmative. The voters in approving the special 4 Mill tax authorized its use for acquiring by purchase, lease, or otherwise, constructing, operating, equipping, or maintaining county hospitals, or other public hospitals, non-profit hospitals and public health facilities." (Emphasis supplied) This language tracks the authority to levy such tax in Amendment 72 of the Constitution of Alabama of 1901. Included in this broad authorization is authority to operate and maintain public health facilities. This wording authorizes multiple public health facilities and grants the county governing body wide discretion in the decision of the number and type of facilities to be constructed and operated. In an opinion of the Justices, 252 Ala. 194, 41 So. 2d 559, the Supreme Court stated under the authority granted by the electorate in authorizing a levy of a special county tax pursuant to Amendment 72 of the Constitution of 1901, the county governing body could apply the proceeds from the tax for any or all of the specified purposes "as it may from time to time deem in the public interest." If the county governing body in their judgment deem the expenditure of such funds for the Winston County Health Center in the public interest they may, subject to restriction mentioned hereinafter, use a portion of the tax at their facility. Two issues of tax anticipation warrants have been issued to construct, equip, and operate the Winston County Hospital. Seventy-five (757) percent of the 4 Mill tax is pledged to provide funds for debt service on these issues. There are specific requirements in resolutions adopted by the county governing body requiring the setting aside each fiscal year of such amounts as Honorable Hobson Manasco, Jr. Attorney Winston County Commission Page 6. are necessary to provide funds for payment of principal and interest on the outstanding warrants. After this requirement is satisfied, Section 7(b) of the Resolution adopted authorizing the second series of tax anticipation warrants allows the use of any surplus remaining for "any purpose for which the Special Tax may lawfully be used . . . ." Since the proceeds of the Special Tax were authorized to be spent for "Public Health Facilities" such surplus may be utilized for the Winston County Health Center as this facility is a public health facility. In 1972, prior to the establishment of the Winston County Health Center, and as a result of litigation between the county governing body and the Winston County Hospital Board an order was made by the Circuit Court of Winston County stating that the special 4 Mill tax was authorized to be used solely for the construction, repair, operation and maintenance of the Winston County Hospital. This litigation developed apparently to prevent the county governing body from using the tax for purposes other than that authorized in the election approving the Special Tax. That ruling was made when the Winston County Hospital was the sole public hospital or public health facility in Winston County. Since there presently is more than one public hospital or public health facility in Winston County a different factual situation now exists. The order should not and could not prevent the county governing body from exercising the discretion they are permitted to use a portion of the Special Tax on other public health facilities in the County. So long as they maintain the necessary amounts each year needed for debt service they may utilize any available surplus for any of the enumerated purposes which they deem to be in the public interest including the Winston County Health Center. Honorable Hobson Manasco, Jr. Attorney Winston County Commission Page 7. If this office can be of assistance in the future, please do not hesitate to call upon us. Very truly yours, CHARLES A. GRADDICK Attorney General By- '/ / ac (£ t JAMES R. SOLOMON, JR. Assistant Attorney General JRSjr:db