Q Our electric power association (EPA) proposes to lend two million dollars ($2,000,000) to our county hospital. It is now asking the county, through the board of supervisors, to guarantee repayment of the loan. May the board cosign these loan documents and thereby guarantee repayment of the loan by the hospital?

A Section 41-13-19 provides authority for a county to sell bonds, notes, or other evidences of indebtedness for real estate, construction, etc., pursuant to the procedures in Sections 41-13-19 through 41-13-25. Cosigning or guaranteeing the repayment of a loan is tantamount to the issuance of a note since the county is, in essence, pledging its full faith and credit for the contracted amount. The county has the authority to guarantee repayment of the loan to the county hospital, but the board of supervisors must comply with the procedures outlined in Sections 41-13-19 through 41-13-23 for the issuance of bonds, notes and other evidence of indebtedness. (Attorney Generalís Opinion to Shepard, June 28, 2019)