AGO 1996-116.

• Case Date: January 29, 1996
• Court: Alabama

Alabama Attorney General Opinions 1996. AGO 1996-116. 1996-116January 29, 1996Honorable Ronald G. Johnson Member, House of Representatives 3770 Sylacauga-Fayette Highway Sylacauga, AL 35150 State Health Planning and Development Agency - Health Services - Hospitals - Certificate of Need - Exemptions The terms "new annual operating costs" as used in Code of Alabama 1975, _ 22-21-263(a)(2), means that new or additional expenditures of less than $800,000 may be incurred each year without obtaining a certificate of need.Dear Representative Johnson: This opinion is issued in response to your request for an opinion from the Attorney General. QUESTION What interpretation should be given to the terms "new annual operating costs" as used in Code of Alabama 1975, _ 22-21-263(a)(2)? FACTS AND ANALYSIS Alabama law provides that no person shall acquire, construct, or operate a new institutional health service without first obtaining a certificate of need from the State Health Planning and Development Agency (SHPDA). Code of Alabama 1975, _ 22-21-265. New institutional health services are defined in Code of Alabama 1975, _ 22-21-263 which provides as follows: "(a) . . . For the purposes of this article, new institutional health services shall include any of the following: . . . (2) Any expenditure by or on behalf of a health care facility or health maintenance organization which, under generally accepted accounting principles consistently applied, is a capital expenditure in excess of one million five hundred thousand dollars ($1,500,000) for major medical equipment except for magnetic resonance imaging equipment only, which shall be reviewable regardless of the expenditure; in excess of eight hundred thousand dollars ($800,000) for new annual operating costs indexed for inflation; in excess of three million two hundred thousand dollars ($3,200,000) for any other capital expenditure by or on behalf of a health care facility or a health maintenance organization. . . . (4) Health services proposed to be offered in or through a health care facility or health maintenance organization, and which were not offered on a regular basis in or through such health care facility or health maintenance organization within the 12 month period prior to the time such services would be offered. Health services, other than those health services...