HB-6251, As Passed House, September 17, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 6251

A bill to amend 1978 PA 368, entitled

"Public health code,"

(MCL 333.1101 to 333.25211) by adding section 22225a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 22225a. (1) In order to obtain a certificate of need

under this part, an applicant for a certificate of need to acquire

or begin operation of a nursing home or to make a change in bed

capacity in licensed nursing home beds shall furnish a surety bond

to the people of the state of Michigan. This section does not apply

to a nursing home that is a county medical care facility. Except as

otherwise provided in this subsection, the amount of the surety

bond shall equal or exceed the total cost to acquire or begin

operation of a nursing home or to make the change in bed capacity

in licensed nursing home beds, as determined by the department. The

amount of the surety bond required under this subsection shall not

be less than $25,000.00 or be greater than $250,000.00. The surety

bond shall be conditioned upon the continued operation of the

nursing home by the applicant. The surety bond shall be approved by

the department. In lieu of a surety bond, the department may

provide for an appropriate deposit of cash or securities, a letter

of credit, or the assignment of coverage of other bonds if the

department is satisfied that comparable or more extensive coverage

results.

(2) The department shall establish procedures to, and under

those procedures may, demand payment from the surety or draw upon

the deposit of cash or securities, letter of credit, or assignment

of coverage of other bonds if the nursing home discontinues,

voluntarily or involuntarily, its operations, if a receiver of the

nursing home is appointed under section 21751, or if a temporary

manager is appointed under section 21799b(1)(f). Upon full

settlement of allowed claims from the bond, deposit of cash or

securities, letter of credit, or assignment of coverage of other

bonds, the department shall return any remaining assets of those

resources to the nursing home.

(3) The department may bring an action in a court of competent

jurisdiction against the nursing home, its assets, or the surety on

the bond or may take any appropriate action against the issuer of

the deposit of securities, letter of credit, or assignment of

coverage of other bonds for recovery of money due and owing to the

department under this act.

(4) The department shall require that the surety bond or

deposit of cash or securities, letter of credit, or assignment of