Can a NC hospital authority sell vacant land to a doctor without following the special hospital-property sale procedures in § 131E-13?

Plain-English summary

The Brunswick County Hospital Authority was considering a sale of vacant property to one or more physicians. Its counsel asked whether the Authority had to comply with N.C. Gen. Stat. § 131E-13, which governs the lease, sale, and encumbrance of hospital facilities by hospital authorities. The Attorney General said compliance was unnecessary if the vacant land was not necessary, convenient, or related to the operation of any hospital facility owned by the Authority.

The key is the statutory definition of "hospital facility." The opinion says both the Municipal Hospital Act and the Hospital Authorities Act include buildings and "all necessary, convenient, or related interests in land." Land outside that connection is not part of a hospital facility. For such land, the opinion says the Authority could sell without following § 131E-13.

The Attorney General did not decide whether the particular Brunswick County parcel met the test. The opinion says its use and relationship to any hospital facility owned by the Authority were unknown. It gives no categorical list of land uses that would satisfy the definition.

The opinion describes provisions within § 131E-13 governing sale conditions, bonds, and procedures, and says subsection (g) exempts a sale covered by that section from specified county and municipal property-disposition provisions. It does not decide what other sale rules govern if § 131E-13 does not apply.

Currency note

This opinion was issued in 2000. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

For a current sale, check the present statute and the parcel's actual connection to hospital operations.

Common questions

Q: Can a hospital authority sell vacant land without using G.S. § 131E-13?
A: The opinion says yes if the land is not necessary, convenient, or related to the operation of any hospital facility the Authority owns. It did not decide whether the Brunswick County parcel qualified.

Q: Is land automatically outside the definition because it is vacant?
A: No. The opinion says a hospital facility can include necessary, convenient, or related interests in land, as well as buildings. The connection to the facility is the question.

Q: Does the opinion say parking, housing, or future-expansion land always qualifies?
A: No. It gives no examples of that kind and says the parcel's use and relationship to the hospital facility were unknown.

Q: If G.S. § 131E-13 does not apply, which other property-sale rules govern?
A: The opinion does not answer that. It says only that the Authority could sell the unrelated land without complying with § 131E-13. The references to county and municipal disposition provisions describe a subsection (g) exemption for sales that are covered by § 131E-13.

Background and statutory framework

The Hospital Authorities Act generally governs hospital authorities, while § 131E-13 in the Municipal Hospital Act governs their transactions involving hospital facilities. The two acts define "hospital facility" to include certain interests in land. The Attorney General applied that definition to the Authority's proposed sale and left the parcel-specific finding open because the facts were not supplied.

Citations from the opinion

• N.C. Gen. Stat. §§ 131E-6(4), 131E-13, 131E-13(a), 131E-13(b), 131E-13(d), 131E-13(g)
• N.C. Gen. Stat. §§ 131E-15 to -34 (Hospital Authorities Act)
• N.C. Gen. Stat. §§ 131E-6(4) and -16(15)
• N.C. Gen. Stat. § 153A-176
• Article 12 of Chapter 160A of the General Statutes

Source

• Landing page: https://ncdoj.gov/opinions/sale-of-undeveloped-real-property-by-brunswick-county-hospital-authority/

Original opinion text

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