The Missouri Health and Educational Facilities Authority Act authorizes the Authority to issue bonds for health facilities and educational facilities outside of Missouri if the borrowing institution or an affiliate also operates a health facility or educational facility within the State of Missouri or maintains a regional or national headquarters within the State of Missouri.  The following policy criteria will be applied by the Authority on a case by case basis in deciding to issue bonds to finance projects outside of Missouri:

The Authority determines that the project outside the State of Missouri meets the public purposes of its enabling act by:

a)  Lowering the cost of health care and/or education and resulting in a savings to patients, students, third parties, including federal or state governments, and others who must pay for such costs; and

b)  Providing a benefit to Missouri by (i) enhancing the quality or quantity of health care and/or education in Missouri, (ii) furthering economic development in the State by job creation, retention or stabilization, or (iii) promoting more efficient and economical operation of health care and/or educational systems with a regional or national headquarters or substantial operations in Missouri.

The Authority determines that the borrowing institution or an affiliate has a substantial presence, relationships and impact in the State of Missouri.  Each or any combination of the following factors will be considered by the Authority on a case by case basis in making such determination:

a)  Whether the institution or an affiliate has or is part of a system that has a regional or national headquarters in Missouri.

b)  Whether the institution or an affiliate has substantial operations in Missouri.

c)  Whether a significant portion of the bond issue is to finance facilities in Missouri.

d)  Whether the Missouri and out of state facilities are functionally and operationally related.

Unless expressly approved in advance by an Authority resolution, the Authority will consider all contacts and relationship with Missouri and the various degrees of each will be part of the analysis.  In connection with that consideration, based on the Authority’s experience and analysis to date, the proceeds of bond issues should involve the expenditure of at least the following percentages of the proceeds on facilities located in Missouri:  (a) 25% in the case of a borrowing institution whose headquarters is located in Missouri; and (b) 40% in all other cases.  The foregoing percentage analysis may include bond proceeds from prior Authority bonds issued in the three years prior to the new bond issue but shall not include any subsequent bond issue.

b)  The institution shall execute and deliver to the Authority a Certificate which has been finalized with representatives of the Authority detailing certain factors supporting a finding of public policy and Missouri presence with respect to the proposed bond issue.  This process shall be completed at least one week prior to the consideration of the Authority of a final bond issuance resolution with respect to the financing.

The Federal tax code requires that (a) a public hearing be held in the locale of the out of state project and (b) the approval for the project be obtained from the “highest elected” official or governing body in the locale of the project.  The hearing and approval requirement can be met at the State level by the Governor or at the local level by the chief elected official or the governing body of the local governmental unit. In either event, there will need to be coordination outside of Missouri.  The Authority will retain the option of coordinating the hearing and approval with required assistance of borrower and the financing team.  The Authority will consider working with other state authorities on these matters.  The Authority will develop a fee schedule for the issuance of bonds involving an out of state component.