March 14, 2018, Introduced by Reps. Neeley, Garrett, Peterson, Cochran, Santana, Byrd, Graves, Phelps, Sneller and Faris and referred to the Committee on Health Policy.
A bill to amend 1987 PA 230, entitled
"Municipal health facilities corporations act,"
by amending sections 251, 253, 254, 255, 256, and 258 (MCL
331.1251, 331.1253, 331.1254, 331.1255, 331.1256, and 331.1258),
sections 251, 253, 254, and 255 as added by 1988 PA 502, section
256 as amended by 2010 PA 331, and section 258 as amended by 2011
PA 195, and by adding section 252a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 251. (1) The city council of a city or the village
council of a village that owns or operates a public hospital may
incorporate 1 or more corporations under this act. The city council
of a city or the village council of a village that does not own or
operate
a public hospital may also establish such a public
hospital
or other health care facility, or both, by incorporating 1 or more
corporations under this act.
(2) The Except
as provided in section 252a, the question
of
establishing 1 or more corporations under this act shall be
presented to the city or village electors at a special or regular
city or village election before incorporation. An election under
this
section shall be conducted pursuant to under the Michigan
election
law, Act No. 116 of the Public Acts of 1954, being
sections
168.1 to 168.992 of the Michigan Compiled Laws.1954 PA
116, MCL 168.1 to 168.992.
Sec. 252a. (1) A city hospital that was established under the
home rule cities act, 1909 PA 279, MCL 117.1 to 117.38, is in a
city that has a population of fewer than 100,000 as of the most
recent federal decennial census, and is not incorporated as of the
effective date of this section, is considered a corporation
incorporated and existing under this act, without the adoption or
filing of articles of incorporation, without a vote of the
electors, and without diminishing the terms of office of
individuals serving on the board of the city hospital on the
effective date of this section.
(2) The city council of a city that operates a hospital that
is considered incorporated by operation of subsection (1) may at
any time after the effective date of this section adopt articles of
incorporation for the corporation under sections 255(2) and 256.
Until the effective date of articles of incorporation adopted under
this subsection, the provisions of this act are considered to
constitute the articles of incorporation of the corporation.
Sec. 253. (1) If the city or village electors approve the
incorporation
of a corporation under this act, the or
if a city
hospital is incorporated by operation of section 252a(1), all of
the following apply:
(a)
The corporation shall be is considered
to be the successor
to the city public hospital for the city or the village public
hospital for the village, and the terms of office of the trustees
of the city public hospital or village public hospital shall
continue.
(b)
The corporation shall have has all
of the rights,
privileges, immunities, and franchises of its predecessor city
public hospital or village public hospital, all personal property,
all debts due on whatever account, and all choses in action.
(c) All interests and licenses of or belonging to the city
public
hospital or village public hospital shall be are considered
to be transferred to, and vested in, the corporation without
further
act or deed, . Such and
those interests and licenses shall
not be considered to have undergone any change of ownership for the
purpose
of any law or regulation. , nor shall the
(d) The fiscal year of any city public hospital or village
public hospital shall not be considered to have ended solely
because the city or village incorporates a corporation under this
act.
(e) The title to any real estate, or any interest in real
estate, vested in any city or city public hospital or village or
village
public hospital, shall does
not revert or in any way be and
is not impaired because a corporation succeeds a city public
hospital
or village public hospital pursuant to under this act.
(2) A corporation incorporated by a city or village under this
act
shall be or incorporated
by operation of section 252a(1) is
considered to be the owner of all money and other property then
deposited in the treasury of the city or village to the credit of
the
hospital fund and shall be is
entitled to all interest and
other earnings accruing on those funds on and after the effective
date
of the incorporation. The corporation shall be is the
owner of
all other personal property used exclusively by or for the city
public hospital or village public hospital. The treasurer of any
city
or village having that has
custody of money and other property
belonging
that belongs to a corporation pursuant to under this
subsection
shall arrange for the prompt transfer of such that money
and other property to the custody of the corporation.
(3) A corporation incorporated by a city or village under this
act
shall be or incorporated
by operation of section 252a(1) is the
employer
of all persons individuals
who are employed by the city
public hospital or village public hospital and shall assume and be
bound by any labor agreement in existence on the effective date of
the incorporation and applicable to the city public hospital or
village public hospital, but shall not be subject to greater
obligations with respect to the terms, conditions, or duration of
employment than was the city public hospital or village public
hospital immediately preceding the effective date of the
incorporation. A representative of the employees or a group of
employees who is entitled to represent the employees or group of
employees
under Act No. 336 of the Public Acts of 1947, being
sections
423.201 to 423.216 of the Michigan Compiled Laws, 1947 PA
336, MCL 423.201 to 423.217, shall continue to be the
representative of the employees or group of employees. This
subsection does not limit the rights of the hospital employees,
under applicable law, to assert that a bargaining representative
protected by this subsection is no longer the representative of the
employees.
(4) A corporation incorporated by a city or village under this
act
shall be or incorporated
by operation of section 252a(1) is
responsible and liable for all liabilities and obligations of the
city public hospital or village public hospital it succeeds. A
claim existing or an action or proceeding pending by or against a
city public hospital or village public hospital may be prosecuted
by the corporation succeeding it in the name of the city public
hospital or village public hospital, or the corporation may be
substituted. The rights of creditors and any lien upon the property
of a city or a city public hospital or a village or village public
hospital existing on the effective date of the incorporation shall
not be impaired.
Sec.
254. (1) If, in accordance with sections 251 and 252,
connection with the incorporation of a corporation for which a vote
of electors is required under section 251, a majority of all the
votes cast upon the question are in favor of establishing a
corporation, the city council or village council may incorporate a
corporation in order to implement or further the public purposes
stated in section 102 through the exercise of all or some of the
powers
provided in under this act.
(2) The board of trustees of a corporation may incorporate 1
or more subsidiary corporations in order to implement or further
the public purposes stated in section 102 through the exercise of
all or some of the powers provided in this act.
(3) The city council or village council shall adopt a suitable
name
for any corporation which that
it incorporates or that is
incorporated by operation of section 252a(1). The board of trustees
of a corporation shall adopt a suitable name for any subsidiary
corporation
which that it incorporates.
Sec.
255. (1) The Except
as provided in section 252a, the
incorporation of a corporation by a city or village shall be
accomplished by approval of articles of incorporation by resolution
of the city council or village council. The incorporation of a
subsidiary corporation shall be accomplished by approval of
articles of incorporation by resolution of the city council or
village council.
(2) The articles of incorporation approved under subsection
(1) or section 252a(2) shall set forth the name of the corporation
or subsidiary corporation; the purposes for which it is created,
which may include all of the purposes for which a corporation or
subsidiary corporation may be organized under this act; the number,
terms, and manner of selection of the officers of its board of
trustees or subsidiary board, which shall include a chairperson and
a secretary, and a general description of their respective powers
and
duties; the effective date upon which of the
incorporation;
shall
become effective; and the name of
the newspaper in which the
articles of incorporation shall be published. The articles of
incorporation of a subsidiary corporation shall also contain the
name of the corporation acting as its parent, and shall specify the
size of the subsidiary board in accordance with section 258(2). The
articles of incorporation of a corporation may specify transactions
otherwise
within the powers of its board of trustees which shall
that require approval by resolution of the city council or village
council, and may also contain other matters considered expedient to
be included in the articles of incorporation. The articles of
incorporation of a subsidiary corporation may specify transactions
otherwise
within the powers of its subsidiary board which shall
that require approval by resolution of the board of trustees of its
designated parent corporation, and may also contain other matters
considered expedient to be included in the articles of
incorporation.
Sec. 256. (1) The articles of incorporation of a corporation
incorporated by a city or village or adopted under section 252a(2)
shall be executed in duplicate by the chairperson of the city
council or the president of the village council or other member of
the city council or village council designated by the city council
or village council. The articles of incorporation of a subsidiary
corporation of a corporation incorporated by a city or village
shall be executed in duplicate by the chairperson of the board of
trustees of the parent corporation, or other trustee designated by
the board of trustees. The articles of incorporation shall then be
delivered to the city clerk or village clerk who shall file 1 copy
in his or her office and the other with the secretary of the
corporation or subsidiary corporation when a secretary is selected.
The city clerk or village clerk shall cause a copy of the articles
of incorporation to be published once in a newspaper designated in
the articles of incorporation and circulating within the city or
village, accompanied by a statement that the right exists to
question
the validity of the incorporation in court as provided in
under this section, if applicable.
(2) The city clerk or village clerk shall file 1 printed copy
of articles of incorporation delivered to him or her under
subsection (1) with the secretary of state and 1 printed copy in
his or her office. The city clerk or village clerk shall attach to
each of the printed copies his or her certificate setting forth
that the copy is a true and complete copy of the original articles
of incorporation on file in his or her office.
(3)
The Except as provided in
section 252a(2), the
incorporation of a corporation or a subsidiary corporation
described in this section is effective at the time provided in the
articles of incorporation, but not before approval of the question
of incorporation by the city or village electors under section 251.
(4) The validity of the incorporation of a corporation or a
subsidiary corporation described in this section is conclusively
presumed unless questioned in a court of competent jurisdiction
within 60 days after the certified copy of the articles of
incorporation of that corporation or subsidiary corporation is
filed with the secretary of state under subsection (2). This
subsection does not apply to a corporation incorporated by
operation of section 252a(1).
(5) This section does not apply to articles of incorporation
of a restructured corporation or restructured subsidiary
corporation described in section 305a.
Sec. 258. (1) All of the following apply to each board of
trustees and subsidiary board of a corporation incorporated by a
city or village, or to a corporation incorporated by operation of
section 252a(1) that has adopted articles of incorporation under
section 252a(2):
(a) The board shall consist of at least 5 and not more than 15
trustees. The exact number of trustees and the length of their
terms of office shall be as specified in the articles of
incorporation.
(b) Except for the initial appointments to a board of trustees
or subsidiary board of a newly incorporated corporation or
subsidiary corporation, or to the initial appointment to the board
of trustees of a corporation incorporated by operation of section
252a(1) that has adopted articles of incorporation under section
252a(2), the term of office of a trustee begins on January 1.
(c) The terms of office of trustees shall be staggered so that
an approximately equal number of terms expire at the end of each
year or each 2 years, except that terms may be fixed so that the
shortest terms do not expire until the end of the second year
following the incorporation of a corporation or a subsidiary
corporation or the effective date of articles of incorporation
adopted under section 252a(2) by a corporation incorporated by
operation
of section 252a(1). A trustee whose
term of office has
expired
expires shall continue to serve until his or her successor
is appointed.
(2) If a city or village incorporates a corporation under this
act, the city council or village council shall appoint the initial
board
of trustees. After If an
unincorporated city hospital that is
already in existence as of the effective date of the amendatory act
that added section 252a is automatically incorporated under section
252a(1), appointments to the board of trustees shall be made in the
manner previously specified in the city charter, until the
effective date of articles of incorporation adopted under section
252a(2) that specify otherwise. For a city hospital that is already
in existence as of the effective date of the amendatory act that
added section 252a, after the initial board of trustees, when a
trustee's term of office expires or if a trustee's office is
otherwise vacant, the remaining members of the board of trustees
shall fill the vacancy with the advice and consent of the city
council or village council. This subsection does not apply to an ex
officio member of a board of trustees who is appointed by a chief
executive officer.
(3) The terms of office of trustees serving on the board of a
city public hospital or village public hospital before
incorporation that is subsequently incorporated under this act or
before the effective date of articles of incorporation adopted
under section 252a(2) by a corporation incorporated by operation of
section 252a(1) shall not be diminished, except that the articles
of
incorporation for that successor corporation may prospectively
establish new lengths of terms of office for the board of trustees,
and may prospectively alter the board size.
(4) If a city or village incorporates a subsidiary
corporation, the board of trustees of the parent corporation shall
appoint the initial subsidiary board with the advice and consent of
the city council or village council. After the initial subsidiary
board, when a trustee's term of office expires or if a trustee's
office is otherwise vacant, the board of trustees of the parent
corporation shall fill the vacancy with the advice and consent of
the city council or village council. This subsection does not apply
to an ex officio member of a subsidiary board who is appointed by a
chief executive officer.
(5) A trustee of a corporation or subsidiary corporation
established by a city or village, or a trustee of a corporation
incorporated by operation of section 252a(1) that adopts articles
of incorporation under section 252a(2), shall be chosen based on
his or her qualifications for that office, but not more than 1/3 of
the trustees serving at any time shall be direct providers of
health care. The articles of incorporation of the corporation or
subsidiary corporation may require that a trustee be a resident of
the city or village. A trustee of the parent corporation, including
its chief executive officer, and the chief executive officer of a
subsidiary corporation are eligible for appointment to a subsidiary
board, and those offices are not incompatible. A trustee is
eligible for reappointment.
(6) Within 9 days after commencing his or her term of office,
a trustee shall take the oath of office as provided in section 1 of
article XI of the state constitution of 1963.
(7) A trustee of a corporation incorporated by a city or
village, or a trustee of a corporation incorporated by operation of
section 252a(1) that adopts articles of incorporation under section
252a(2), may be removed from office for cause either by vote of a
majority of the members then serving on the city council or village
council or by vote of a majority of the members then serving on the
board of trustees of the corporation. A trustee of a subsidiary
corporation may be removed from office for cause either by vote of
a majority of the members then serving on the city council or
village council or by vote of a majority of the members then
serving on the board of trustees of the parent corporation. As used
in this subsection, "cause" includes, but is not limited to,
incompetency to properly exercise duties; official misconduct; or
habitual or willful neglect of duty, including, but not limited to,
failure to attend meetings, including committee meetings, in
accordance with standards determined by the board of trustees of
the corporation or subsidiary board.
(8) A trustee of a corporation incorporated by a city or
village, or a trustee of a corporation incorporated by operation of
section 252a(1) that adopts articles of incorporation under section
252a(2), shall not be removed from office on grounds of misconduct
or neglect unless the trustee is served with a notice of hearing
and a copy of the asserted ground for removal, and is given full
opportunity to be heard, either in person or by counsel, before a
vote is taken on the question of removal from office.
(9) Subsections (1) to (8) do not apply to a city hospital
that exists on the effective date of the amendatory act that added
this subsection, that is incorporated by operation of section
252a(1), and that has not adopted articles of incorporation under
section 252a(2). Until a city hospital incorporated by operation of
section 252a(1) adopts articles of incorporation under 252a(2), the
city charter of the city that established the hospital shall govern
the number, term of office, appointment, qualification, and removal
of trustees serving on the board of that corporation.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.