Dear Mr. McDonald:

You have requested the opinion of this office regarding the following issues related to the Morehouse Parish Hospital Service District No. 1 (the District):

1. May the District enter into a joint venture with a private landowner, under which agreement a tract of land would be leased by the landowner to the District which would then construct a building to its own specifications?

2. Under the circumstances set forth above, would the District be required to construct such a building pursuant to the Public Bid Law?

3. If building on land owned by the District, would construction of a building require application of the Public Bid Law?

4. May the District purchase medical equipment without application of the Public Bid Law?

In response to all of your questions, we would point out that the District is a public entity as defined in La. R.S. 38:2211(10) and, as such, is subject to the Public Bid Law in contracting for public works or for the purchase of materials and supplies to be paid for out of public funds. La. R.S. 38:2212.

The arrangement to which Question 1 alludes does not have the characteristics of a joint venture, but rather appears to be a simple lease of land a private landowner to the District. R.S.46:1060 gives the District the power to enter into leases when necessary and proper for carrying out the objects and purposes of the District and state law does not prescribe procedures or requirements for entering into such leases. Any contract by the District thereafter for the construction of a building, either on the leased land or on land owned by the District, would require the application of the Public Bid Law.

Any such lease for land upon which the District will construct improvements must be for a term long enough to allow for amortization of the cost of such improvements in order to avoid conflict with the provisions of Art. VII, Sec. 14 of the Louisiana Constitution which proscribes the loan, pledge or donation of public property.

Purchases of medical equipment will also require application of the Public Bid Law. That statute, in addition to the public bid process, contains special provisions for hospital servicedistricts which authorize them to enter into agreements with qualified group purchasing organizations pursuant to the procedures set forth in La. R.S. 38:2212A(1) (f).

I trust that this adequately answers your questions regarding the legal provisions applicable to the Morehouse Parish Hospital Service District No. 1. Please let us know if we may be of further assistance to you in this matter.

Sincerely,

RICHARD P. IEYOUB Attorney General

By: ______________________________ GLENN R. DUCOTE Assistant Attorney General

RPI:GRD:jv

Date Received:

Date Released:

Glenn R. Ducote Assistant Attorney General