NASAA's Corporation Finance Policy Project Group (Project Group) has released for public comment a housekeeping proposal to eliminate the NASAA Health Care Facility Offerings Statement of Policy. Originally adopted by NASAA in 1985, the Health Care Facility Offerings policy statement was intended for the review by the states of offerings of debt securities by non-profit health care issuers. A recent survey of NASAA's members has revealed, however, that this policy is not in use at all due to changes in bond issuing practices. As the existing policy appears to be obsolete, the Project Group has recommended its repeal.
In conducting the survey of NASAA members, the Project Group asked three questions:
- Have you ever used this policy statement in recent years?
- Have you recently dealt with any non-profit health care facility offering by an issuer?
- Have you had any issuers contact you, or your staff, with questions in regard to health care facility offerings?
All 25 states responding to the survey indicated a negative answer to each of the three questions asked. Additionally, Kansas informed the Project Group that the Nonprofit Debt Project Group surveyed states in regard to this particular policy statement and determined that there was no need to update the policy statement, since it was rarely used.
While the policy statement may serve as a helpful guide for such offerings, the Project Group noted, it is largely obsolete because debt offerings of healthcare facilities are no longer primarily made by these issuers as traditional bonds. Instead, modern health care facility offerings are facilitated, structured and offered as municipal debt instruments under organizations created and approved by state legislatures. If NASAA retains this statement of policy, the Project Group believes that a number of updates should be made to address and adequately provide for modern registration issues.
The comment period will remain open for 30 days. Comments should be sent to each member of the Project Group and to the NASAA Legal Department at the addresses set forth in the proposal. The Project Group encourages the submission of comments by e-mail.