Attorney General's opinion on ad valorem tax released

Hobby Manasco, attorney for the Winston County Commission, explains the need for commissioners to approve a resolution based on the recently received Attorney General’s opinion.

DOUBLE SPRINGS  - The long standing question as to if the Winston County Commission could use the entirety of ad valorem taxes authorized under Section 215.02 of the Recompiled Constitution of Alabama to fund a public hospital operating other medical clinics, has finally been resolved by an Attorney General’s opinion received July 24.
The Attorney General Opinion, in summary reads, “if the commission determines that it is in the public’s interest, it may use the entirety of the ad valorem taxes authorized by Section 215.02 to fund a public hospital that operates other medical clinics in Winston County.”
The commission, therefore, at their Monday, July 29, meeting, by a majority vote, authorized a resolution determining that it is in the public’s interest to use the entirety of the ad valorem taxes authorized under Section 215.02 to fund a hospital and other public medical clinics in the county.
The resolution also authorized Commission Chairman Roger Hayes to take all necessary steps and execute all necessary documents to fund a public hospital that operates other public medical clinics in the county, for and as the act of Winston County, a political subdivision of the State of Alabama working by and through its duly elected and authorized commission.
Making a motion to authorize the resolution was Commissioner David Cummings. Bobby Everett would not second the motion, so Hayes stepped in as chairman to second the motion.
Cummings and Hayes voted yes, with Everett voting no, but the motion carried 2-1.
In fact, Everett also voted no on two other items on the agenda relating to the hospital, one being whether or not to approve Hayes to serve on the Winston County/City of Haleyville Hospital Authority Board and the other to appoint Kenneth Sudduth to the hospital board.
Both of these items were approved on a 2-1 vote with Cummings and Hayes voting in favor.
“What this resolution does is it’s complying with what the Attorney General’s opinion states that if the commission determines that it is in the public’s interest,” pointed out Commission Attorney Hobby Manasco, “then the Attorney General’s opinion  says that the commission must determine that it’s in the public’s interest,” Manasco added.
The Commission voted on April 8, to seek an Attorney General’s opinion regarding  the hospital tax millage. At the time, they also  postponed action to change the direction of collection of two mills property tax (they had approved in February of 2018,  to go directly to The Health Care Authority of Haleyville and Winston County, instead of the commission each receiving one mill.
Hayes explained the reason for the commission’s pending vote at that time was to remove the commission from any future litigation regarding this issue.
The commission was the subject of a lawsuit filed in 2018 by Rusty Banks, claiming the entire county should not pay an additional property tax millage for something that does not benefit them but instead directly Haleyville.
Banks was basing his lawsuit on action the commission took on  Feb. 26, 2018, when they voted to approve two mills of additional property tax, with  one mill of the additional property tax going to  the commission and the other mill going to the Winston County/Haleyville Healthcare Authority.
The resolution, approved Feb. 26, 2018, provided that a tax, at the rate of two mills or 20 cents on each $100 worth of taxable property, be levied on all taxable property in Winston County.
That lawsuit was settled to the favor of the commission, but the pending litigation, which lasted over the course of about a year, meant that neither the commission nor the health care authority was receiving the tax millage until the issue was resolved.
Commission Attorney Hobby Manasco at the commission’s July 29 meeting, brought to the attention of Hayes and commissioners the Attorney General’s opinion and the action they needed to take on a resolution, as a result of that opinion.
Manasco said the AG’s opinion was based on several facts they listed in their opinion, noting the commission authorized in accordance with Section 215.02 of Article XI of the Recompiled Constitution of Alabama, to levy a special county tax not to exceed four mills of assessed value of taxable property, to be used for the purpose of acquiring, purchasing, leasing or otherwise constructing, operating, equipping or maintaining county hospitals and public health facilities.
“This Office understands that, although the Commission initially levied at a rate of four fills in 1965, (for the purpose of construction of Burdick West Hospital, the site of Lakeland Community Hospital today), the tax was later discontinued,” the AG’s opinion read.
The commission reinstituted the tax at a rate of two mills in February of 2018.
Section 215.02 reads, “If the tax is authorized by vote of a majority of the qualified electors of the county, who participate in any election called for that purpose...a special county tax, not exceeding four mills on each dollar of taxable property in the county, to be used solely 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.”
The AG’s opinion also reasoned  that the commission “has the authority to expend the tax proceeds as it deems to be in the public interest.”
Jeff Mobley, attorney representing the Winston County/Haleyville Health Care Authority, explained that Title 22, Article 11 of the Code of Alabama provides that a county in working in conjunction with a municipality can form a public corporation.
Mobley was referring to the establishment of the Winston County/Haleyville Healthcare Authority.
“The legislature declared this intent, it is therefore the intent of the legislature by passing this Article to promote the  public health of people of this state by one, authorizing the several counties, municipalities and educational institutions in the state effectively to form public corporations whose corporate purpose shall be to acquire, own and operate healthcare facilities,” Mobley read.
“This county commission and the city of Haleyville passed a resolution in 2017 authorizing the formation of the Health Care Authority of Haleyville and Winston County under this article,” Mobley pointed out.
“Therefore, it is exactly what it is supposed to be, which is a public corporation organized under the authority of Winston County and the city of Haleyville to own and operate our hospital,” Mobley continued.
“So, this is a public corporation that we are asking the funding that has been collected, to paid over to the healthcare authority  which will then use it for the corporate purpose of operating your county hospital,” Mobley said.
Mobley was referring to the collection of the two mills ad valorem taxes which are now deemed to go directly to the Haleyville/Winston County Health Care Authority or as the commission deems to be in the  public’s interest.
Health care clinics, added Mobley, that will hopefully be organized in the east side communities of Arley and Addison, will be considered as departments of the hospital, Mobley emphasized.
“It is an extension of that hospital,” Manasco then added.
“It is a department,” agreed Mobley. “It is not a separate corporation. It is not a separate entity. It is a department of Lakeland Community Hospital, which is totally owned by the Health Care Authority of Haleyville and Winston County.”
Everett, who had voted no on any matter related to the hospital or the health care authority, noted wording all through the opinion read, “Winston County hospital”.
“So, it’s a Winston County hospital, is that what you are saying?” Everett asked Mobley.
“It is the hospital that is owned, partially owned, by Winston County  and was authorized through the resolution that was passed, which is to form a health care authority, so that Winston County cannot be directly sued for any issues that occur at the hospital,” Mobley responded.
“I don’t mean to be short, but I understand exactly what you are saying,” Everett then said. “But in this Attorney General’s reading here, it says operated by the Winston County Hospital. It’s specifically named the Winston County Hospital.
“My question is if we’re sued, even through what you said was correct, lawyer-wise, and I understand it, it also says here from the Attorney General, it’s a Winston County hospital,” Everett pointed out.
“That triggers the thought with me that we could be sued. It says Winston County hospital. It doesn’t say authority,” Everett continued.
“That is why the legislature explained their intent when they passed the Health Care Authority Act,” Mobley responded, adding the last time the act was amended was in 1982.
An election held in the county on Oct. 14, 1965, for hospital and public health purposes in Winston County.
Originally, that 1965 resolution, passed as a result of an election, two mills of property tax were to go to the commission and two mills to the hospital, at that time in Haleyville known as Burdick West Memorial Hospital, which opened in 1969. That structure today is known as Lakeland Community Hospital.
Officials under Curae, the previous owner of Lakeland Community Hospital, had announced in late 2017, that the hospital would be closing its door by the end of that year.
During efforts to save Lakeland hospital, the Haleyville/Winston County Health Care Authority was formed in 2017.
Officials from the local, state to federal level then joined forces with the intent of saving the hospital, receiving two extensions on the closure date, while resolving the issue, forming the health care authority and putting the company Java Medical Group as the operators of the hospital under the ownership of the health care authority.
That transaction of the Haleyville/Winston County Healthcare Authority taking over ownership of the hospital, to  be operated by the Java Medical Group, was officially completed in April of 2018.



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