June 18, 2008, Introduced by Reps. Robert Jones, Angerer, Brown, Simpson, Valentine, Donigan, Leland, Ebli, Miller, Meisner, Polidori, Bennett, Corriveau, Dean, Meadows and Clemente and referred to the Committee on Senior Health, Security, and Retirement.
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 be approved 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. 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 $500,000.00. 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 by rule 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
coverage of other bonds be and remain in effect before issuance or
renewal of a nursing home license under part 217.