The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6868 August 30, 1995 HOSPITAL FINANCE AUTHORITY: The authority of the State Hospital Finance Authority to make loans to hospitals for out-patient clinics The State Hospital Finance Authority created by the Hospital Finance Authority Act is authorized to make a loan to Detroit Community Health Connection, Inc. or Cherry Street Services, Inc., d/b/a Cherry Street Health Services, for the purpose of financing the acquisition, construction and equipping of outpatient clinics. Roy A. Pentilla Executive Director Michigan State Hospital Finance Authority 100 West Washtenaw Suite 2 Lansing, Michigan 48933 You have asked if the State Hospital Finance Authority created by the Hospital Finance Authority Act, 1969 PA 38, MCL 331.31 et seq; MSA 14.1220(1) et seq, is authorized to make a loan to Detroit Community Health Connection, Inc. or Cherry Street Services, Inc., d/b/a Cherry Street Health Services, for the purpose of financing the acquisition, construction and equipping of out-patient clinics. Your letter and the other information which you have provided to my office indicate that each of these organizations is a Michigan nonpublic, nonprofit corporation that provides primary health care services, including medical and dental services, at out-patient facilities. Section 13 of the Hospital Finance Authority Act authorizes the State Hospital Finance Authority to lend money to "hospitals" for the acquisition, construction, improvement or alteration of "hospital facilities." Section 3(e) and (f)(i) of the Hospital Finance Authority Act defines "hospital" and "hospital facilities," in relevant parts, as: "[H]ospital" means a nonpublic corporation, ... located within this state for the care of the sick or wounded or of those who require medical treatment ... operated without profit to an individual, corporation, or association. It includes nonprofit corporations ... engaged in some phase of hospital ... activity .... "Hospital facilities" means .... [a] building or structure suitable and intended for, or incidental or ancillary to, use by a hospital and includes, ... outpatient clinics, ... and all necessary, useful, or related equipment, furnishings, and appurtenances and all lands necessary or convenient as a site for these facilities. [Emphasis added.] Although the Legislature used the term "hospital" in the Hospital Finance Authority Act for the organization which is eligible for financing under that Act, the Legislature defined the term "hospital" broadly to include, among others, any private nonprofit corporation located in Michigan that provides care for the sick or wounded or those who require medical treatment. The definition of "hospital" in the Hospital Finance Authority Act is broader than the definition of hospital under the Public Health Code. See, OAG, 1989-1990, No 6670, p 418, 420 (December 19, 1990) and OAG, 1991-1992, No 6741, p 199, 202 (December 1, 1992). Since Detroit Community Health Connection, Inc. and Cherry Street Health Services are both nonprofit corporations located within the State that provide care of the sick or wounded or of those who require medical treatment, they are each a "hospital" under the Hospital Finance Authority Act, and the facilities they operate for the provision of out-patient health care services are "hospital facilities" under the Hospital Finance Authority Act. (1) It is my opinion, therefore, that the State Hospital Finance Authority created by the Hospital Finance Authority Act is authorized to make a loan to Detroit Community Health Connection, Inc. or Cherry Street Services, Inc. d/b/a Cherry Street Health Services, for the purpose of financing the acquisition, construction and equipping of out-patient clinics. Frank J. Kelley Attorney General (1)