September 5, 2018, Introduced by Senator CASPERSON and referred to the Committee on Michigan Competitiveness.
A bill to amend 1987 PA 230, entitled
"Municipal health facilities corporations act,"
by amending the title and sections 103, 304, and 307 (MCL 331.1103,
331.1304, and 331.1307), the title and sections 304 and 307 as
amended by 1988 PA 502 and section 103 as amended by 2010 PA 331,
and by adding section 306a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to authorize certain local governmental units to
incorporate municipal health facilities corporations and subsidiary
municipal health facilities corporations for establishing,
modifying, operating, and managing health services and acquiring,
constructing, adding to, repairing, remodeling, renovating,
equipping, and re-equipping hospitals and other health care
facilities and related purposes; to provide for the application of
this act to existing municipal hospitals and for the transfer of
ownership of hospital funds and personal property; to validate and
ratify the existence, organization, actions, proceedings, and board
membership of existing organizations acting as county public
hospitals; to provide for the appointment of trustees; to grant
certain powers of a public body corporate to health facilities
corporations and subsidiary health facilities corporations; to
empower certain local governmental units to encumber property for
the benefit of, transfer or make property available to, issue bonds
to construct facilities to be used by, appropriate funds for, and
levy a tax for, municipal health facilities corporations and
subsidiary municipal health facilities corporations; to empower
certain local governmental units to guarantee obligations of
municipal health facilities corporations and subsidiary municipal
health facilities corporations and to permit certain local
governmental units to pledge their full faith and credit to pay
such
those guaranties; to provide for transfer of ownership or
operation of health care facilities and health services to
nonprofit health care organizations and business organizations; to
authorize municipal health facilities corporations and subsidiary
municipal health facilities corporations to borrow money and issue
notes for the purposes of meeting expenses of operation and to
issue corporation obligations for the purpose of acquisition,
construction, repair, remodeling, equipping or re-equipping of
health care facilities and for the refinancing, refunding, or
refunding in advance of indebtedness of the municipal health
facilities corporations or the subsidiary municipal health
facilities corporations or of indebtedness of certain local
governmental units undertaken on their behalf; to authorize
municipal health facilities corporations and subsidiary municipal
health facilities corporations to enter into mortgages, deeds of
trust, and other agreements for security which may include
provisions for the appointment of receivers; to exempt obligations
and property of municipal health facilities corporations and
subsidiary municipal health facilities corporations from taxation;
and to provide other rights, powers, and duties of municipal health
facilities corporations and subsidiary municipal health facilities
corporations.
Sec. 103. As used in this act:
(a) "Board of trustees" means the board of trustees of a
corporation created under or governed by this act.
(b) "Business organization" means any of the following:
(i) A domestic business corporation, as defined in section 105
of the nonprofit corporation act, 1982 PA 162, MCL 450.2105.
(ii) A foreign business corporation, as defined in section 107
of the nonprofit corporation act, 1982 PA 162, MCL 450.2107.
(iii) A domestic limited liability company.
(iv) A foreign limited liability company.
(v) _______________________.
(c) (b)
"City" means a city
establishing a corporation
incorporated under, or governed by, this act.
(d) (c)
"City public hospital"
means a health care facility
that is owned or operated by a city.
(e) (d)
"Corporation" means a
municipal health facilities
corporation incorporated under this act or created under 1913 PA
350, MCL 331.151 to 331.169, or under 1945 PA 109, MCL 331.201 to
331.213, and governed by this act. The term includes a restructured
corporation.
(f) (e)
"Corporation obligation"
means a bond, note, or any
other legal instrument issued by a corporation or subsidiary
corporation under chapter 4 that evidences indebtedness of a
corporation or a subsidiary corporation, including principal,
interest, and premiums, if any, on that indebtedness. Notes issued
under section 401 are not considered corporation obligations.
(g) (f)
"County" means a county
establishing a corporation
incorporated under, or governed by, this act.
(h) (g)
"County public hospital"
means a public corporation
organized and existing or purportedly organized and existing under
1913 PA 350, MCL 331.151 to 331.169, or under 1945 PA 109, MCL
331.201
to 331.213, on the effective date of this act.February 27,
1988.
(i) (h)
"Direct provider of health
care" means a person or
organization
whose primary current activity is
providing health
services
to individuals. The term includes a person or organization
licensed, certified, or registered under article 6 or 15 of the
public
health code, 1978 PA 368, MCL 333.6101 to 333.6523 333.6230
to 333.6251 and 333.16101 to 333.18838, or a professional
corporation or other public or private organization composed of or
employing direct providers of health care.
(j) (i)
"Health care facilities"
means buildings, structures,
or equipment suitable and intended for, or incidental or ancillary
to, use in providing health services, including, but not limited
to, hospitals; hospital long-term care units; infirmaries;
sanatoria; nursing homes; medical care facilities; outpatient
clinics; ambulatory care facilities; surgical and diagnostic
facilities; hospices; clinical laboratories; shared service
facilities; laundries; meeting rooms; classrooms and other
educational facilities; students', nurses', interns', or
physicians' residences; administration buildings; facilities for
use as or by health maintenance organizations; facilities for
ambulance operations, advanced mobile emergency care services, and
limited advanced mobile emergency care services; research
facilities; facilities for the care of dependent children;
maintenance, storage, and utility facilities; parking lots and
structures; garages; office facilities not less than 80% of the net
leasable space of which is intended for lease to or other use by
direct providers of health care; facilities for the temporary
lodging of outpatients or families of patients; residential
facilities for use by the aged or disabled; and all necessary,
useful, or related equipment, furnishings, and appurtenances and
all lands necessary or convenient as sites for the health care
facilities described in this subdivision.
(k) (j)
"Health services" means 1
or more of the following:
(i) Diagnosis and medical and surgical treatment by direct
providers of health care of persons suffering from illness, injury,
and disability, including persons suffering from tuberculosis and
other contagious and infectious diseases, and persons requiring
maternity care, rehabilitation, psychiatric care, or substance
abuse services; dentistry and related services; podiatric medicine
and surgery; optometric services; psychological services; skilled,
basic, and visiting nursing services and home health services;
ambulance operations; advanced mobile emergency care services and
limited advanced emergency services; physical, respiratory, and
occupational therapy; health maintenance services; services for the
prevention of illness, injury, and disability and for the
promotion, maintenance, and improvement of public health and
welfare; food services and care for dependent children, the
disabled, and the elderly; and social work and chaplaincy services
provided in conjunction with other health services described in
this subparagraph.
(ii) Conduct of or participation in programs for the education
and training of health services personnel, including undergraduate,
internship, residency, postgraduate, and continuing education
programs for physicians; schools and other training programs for
nurses, technicians, therapists, pharmacists, and other health
services personnel; and in-service education of employees of health
care facilities.
(iii) Research relating to the cause, prevention, and
treatment of illness, injury, and disability, and the protection,
promotion, or improvement of public health and welfare.
(l) (k)
"Local governmental unit"
means a county, city, or
village.
(m) (l) "Nonprofit
health care organization" means a public
body organized and existing under the laws of this state and
authorized to provide health services, a nonprofit corporation
incorporated under the nonprofit corporation act, 1982 PA 162, MCL
450.2101 to 450.3192, or a not-for-profit corporation incorporated
under the laws of another state and qualified to do business in
this state, that is organized and operated exclusively for
charitable, scientific, educational, or religious purposes and
authorized to provide health services, no part of the net earnings
of which inures to the benefit of any private shareholder or
individual.
(n) "Person" means an individual, a partnership, a domestic or
foreign corporation, a limited liability company, or any other
association, corporation, trust, or legal entity.
(o) (m)
"Project costs" means the
total of the reasonable or
necessary costs incurred for carrying out the acquisition,
construction, repair, remodeling, equipping, or re-equipping of
health care facilities. The term includes, but is not limited to,
any of the following costs: studies, surveys, plans, and
specifications; architectural and engineering services; fees,
charges, and expenses incurred in obtaining permits, approvals, and
licenses for the acquisition, and initial operation of the health
care construction, financing, facilities; legal, organizational,
marketing, and other special services; acquisition, demolition,
construction, equipment, and site development of new and
rehabilitated buildings; rehabilitation, construction, repair, or
remodeling of existing buildings; interest and carrying charges
during construction and before full earnings are achieved but for a
period not to exceed 3 years after the date of the corporation
obligations; operating expenses before full earnings are achieved,
but for a period not to exceed 1 year following completion of
construction; and reasonable reserves for payment of principal and
interest on corporation obligations, not exceeding 15% of the
principal amount of the corporation obligations. Project costs
shall also include reimbursement of a corporation or a subsidiary
corporation for any of the project costs described in this section
expended before the issuance and delivery of the corporation
obligations.
(p) (n)
"Restructured
corporation" means a corporation that
has completed the process described in section 305a.
(q) (o)
"Restructured subsidiary
corporation" means a
subsidiary corporation that has completed the process described in
section 305a.
(r) (p)
"Subsidiary board" means
the board of trustees of a
subsidiary corporation.
(s) (q)
"Subsidiary corporation"
means a subsidiary municipal
health facilities corporation incorporated under this act. The term
includes a restructured subsidiary corporation.
(t) (r)
"Trustee" means a
person an individual serving on a
board of trustees or a subsidiary board.
(u) (s)
"Village" means a village
establishing a corporation
incorporated under, or governed by, this act.
(v) (t)
"Village public hospital"
means a health care facility
that is owned or operated by a village.
Sec. 304. Without limiting the powers described in section 301
and elsewhere in this act, each board of trustees and subsidiary
board, in furtherance of its purposes and consistent with its
articles of incorporation, but subject to applicable licensing and
other regulatory requirements, may do any or all of the following:
(a) Establish sites for its health care facilities inside or
outside the local governmental unit and relocate its health care
facilities in the same municipality or elsewhere.
(b) Acquire by purchase, gift, devise, lease, sublease,
installment purchase agreement, land contract, option, or by any
other means, hold, and own in its own name health care facilities
and interests therein and other real and personal property,
including, but not limited to, interests in condominiums, and
property subject to mortgages, security interests, or other liens,
necessary or convenient to fulfill its purposes; and, for the
purpose of condemnation, proceed under the uniform condemnation
procedures
act, Act No. 87 of the Public Acts of 1980, being
sections
213.51 to 213.77 of the Michigan Compiled Laws, 1980 PA
87, MCL 213.51 to 213.75, or other applicable statute.
(c) Construct, add to, repair, remodel, renovate, equip, and
re-equip health care facilities and establish rules, regulations,
or policies conforming with applicable law with respect to
requirements for competitive bidding, advertising, advertising for
bids and letting contracts. However, in all cases, the right to
reject
any and all bids shall be is
reserved.
(d)
Dispose Subject to sections
306 and 306a, dispose of its
real and personal property by sale, lease, sublease, installment
sale agreement, land contract, or other lawful means.
(e) Purchase, contract for, or acquire administrative,
management, and other services necessary or convenient to the
fulfillment of its purposes from the local governmental unit and
from other sources and sell these services to the local
governmental unit and to other public and private persons.
(f) Apply for, negotiate, receive, and accept gifts or grants
of money, property, or services, or other aid offered or made
available to it, and comply, subject to the provisions of this act
and
other applicable law, with the terms of such gifts, grants, a
gift, grant, or other aid.
(g)
Provide insurance , or
reinsurance, obtain indemnification
or establish programs or trusts for self-insurance against loss in
connection with its assets or any liability in connection with its
activities, .
The insurance, reinsurance, indemnification, or self-
insurance
shall be in such forms and amounts, and from such
sources,
as in any form and amount and
from any source it considers
appropriate.
(h) Invest funds not immediately required for its purposes,
funds accumulated to provide retirement or pension benefits,
endowment funds created for charitable or educational purposes, and
other funds in any manner in which a local governmental unit may
then
lawfully invest such property those
funds and loan its funds
in furtherance of its purposes.
(i)
Borrow money from the local governmental unit in
accordance
with under section 305(e) and enter into agreements for
the repayment of the loans.
(j) Grant mortgages, security interests, and other liens in
its real and personal property, sell and lease back its real and
personal property, and pledge its property or revenues in
furtherance of its purposes.
(k) Guarantee, in whole or in part, bonds, notes, and other
obligations of the local governmental unit undertaken for its
benefit and grant mortgages, security interests, and other liens in
its real and personal property and pledge its property or revenues
to secure obligations of the local governmental unit undertaken for
its
benefit, with or without guaranteeing such those obligations.
(l) Transfer real or personal property to subsidiary
corporations or parent corporations in furtherance of its purposes
or the purposes of the subsidiary or parent corporations, with or
without monetary consideration, and transfer money and other real
and personal property not required to carry out its purposes to the
local governmental unit.
(m) Guarantee, in whole or in part, corporation obligations,
bonds, notes, and other obligations of a subsidiary corporation or
a parent corporation.
(n) Grant mortgages, security interests, or other liens in its
real and personal property and pledge its property or revenues to
secure corporation obligations, bonds, notes, or other obligations
of 1 or more of its subsidiary corporations or its parent
corporation,
with or without guaranteeing such those obligations.
Sec. 306a. (1) Subject to applicable licensing and other
regulatory requirements, and subject to the requirements of this
section, a board of trustees or a subsidiary board may enter into
and carry out agreements for the sale or transfer of the ownership
of a corporation or subsidiary corporation, or the sale or transfer
of ownership or operation of some or all of the health care
facilities and related assets or health services of the corporation
or subsidiary corporation, to a business organization by sale,
installment sales agreement, land contract, lease, lease with an
option to purchase, sublease, contract, option, or by any other
means.
(2) In establishing the terms of a sale or transfer described
in subsection (1), the board of trustees or subsidiary board may
take into account, in addition to the monetary consideration for
the sale or transfer, if any, 1 or more of the following:
(a) The ability and willingness of the business organization
to continue to provide health services to residents of the local
governmental unit.
(b) The assumption by the business organization of
liabilities, obligations, and risks associated with ownership or
operation of the corporation, subsidiary corporation, or health
care facilities and health services sold or transferred, including
those associated with outstanding bonds, notes and obligations,
pension, retirement, and other benefits for employees and employees
and conditions attached to public or private grants.
(c) The willingness and ability of the business organization
to provide services to those unable to pay fully for their care.
(d) The elimination of or reduction in support required for
the corporation, subsidiary corporation, or health care facilities
or health services from tax revenues or other public sources.
(e) The ability and willingness of the business corporation to
expand or improve the corporation, subsidiary corporation, or
health care facilities or health services being sold or
transferred.
(f) Any other factors bearing on the health and welfare of the
residents of the local governmental unit that the board of trustees
or subsidiary board considers appropriate.
(3) A board of trustees or subsidiary board may accept secured
or unsecured notes, bonds, or obligations given by or on behalf of
a business organization or any other forms of payment that it
considers appropriate in full or partial satisfaction of any
monetary consideration provided under an agreement for a sale or
transfer described in subsection (1).
(4) Any board of trustees or subsidiary board that sells or
transfers a corporation, subsidiary corporation, or health
facilities under this section shall require, for a term of not less
than 30 years, that use of the health care facilities owned by the
sold or transferred corporation or subsidiary corporation or the
sold or transferred health care facilities shall be open to all
regardless of race, religion, color, national origin, sex, age,
disability, marital status, sexual preference, or source of
payment, and that the business organization acquiring those health
care facilities or that corporation or subsidiary corporation shall
provide an equal opportunity for employment, without discrimination
as to race, religion, color, national origin, sex, age, disability,
marital status, or sexual preference.
(5) Any transfer made by a subsidiary board in reliance on
this section shall be made only with the prior approval of the
board of trustees of its parent corporation.
(6) Any sale or transfer of ownership of a corporation or
subsidiary corporation under this section shall be made only with
the prior approval of the county board of commissioners, city
council, or village council. Any sale or transfer of ownership or
operation of health care facilities or health services by a
corporation or a subsidiary corporation under this section shall be
made only with the prior approval of the county board of
commissioners, city council, or village council, if either of the
following applies:
(a) The health care facilities or health services to be
transferred provided more than 10% of the gross revenues of the
corporation or subsidiary corporation making the transfer,
determined in accordance with generally accepted accounting
principles, in either of the 2 full fiscal years of the corporation
or subsidiary corporation completed immediately preceding the date
of the transfer.
(b) A majority of the governing body of the business
organization acquiring the health care facilities or health
services is composed of individuals who are also serving as
trustees of the corporation or the subsidiary corporation making
the transfer.
(7) Notwithstanding any other provision of this section, no
sale or transfer under this section shall be made in such a way as
to impair the obligation of the corporation or the subsidiary
corporation with respect to any outstanding corporation obligation,
bond, note, or contract.
Sec. 307. (1) As used in this section:
(a)
"Contractor" means an entity which a business organization
or other entity that enters into a contract or other agreement with
a local governmental unit, corporation, or subsidiary corporation
for the purpose of providing health services or for the management,
administration, or operation of a health care facility or
department
of a health care facility, pursuant to under section
303(h),
304(d), 304(e), 304(l), 305(b),
305(i), or 306, or 306a.
Contractor includes a local governmental unit, corporation, or
subsidiary corporation.
(b)
"Transferee" means an entity which a business organization
or other entity that receives, accepts, or comes into possession or
an ownership or leasehold interest in a health care facility,
department of a health care facility, or other real or personal
assets
of a health care facility pursuant to under section 303(h),
304(d),
304(e), 304(l), 305(b),
305(i), or 306, or 306a. Transferee
includes a corporation, county, or subsidiary corporation.
(c) "Affected health care facility" means a health care
facility or part or department of a health care facility regularly
employing
5 or more persons individuals
on a full-time basis or the
equivalent
which that is the subject of any transaction made
pursuant
to under section 303(h), 304(d), 304(e), 304(l), 305(b),
305(i),
or 306, or 306a.
(2) A local governmental unit, corporation, or subsidiary
corporation shall not enter into a contract, lease, agreement,
transfer, or other arrangement authorized in section 303(h),
304(d),
304(e), 304(l), 305(b),
305(i), or 306, or 306a with a
contractor or transferee under which the contractor or transferee
agrees or can reasonably be expected to continue the operation of
the affected health care facility for the purpose of providing
health services unless the local governmental unit, corporation, or
subsidiary corporation agrees to retain the employees of the
affected health care facility and continue all collective
bargaining
agreements covering such those
employees or unless the
contractor or transferee agrees to all of the following:
(a) That all collective bargaining agreements in effect and
covering employees of the affected health care facility shall be
continued in full force and effect by the contractor or transferee.
(b) That employees of the affected health care facility shall
be employed by the contractor or transferee and shall not be
replaced with new employees, except in accordance with applicable
collective bargaining agreements and with policies applicable to
the
affected health care facility existing on the date of such the
contract, lease, agreement, transfer, or other arrangement.
(c) That the contractor or transferee shall continue the terms
and conditions of employment of employees of the affected health
care facility.
(d) That the contractor or transferee shall grant recognition
to each collective bargaining agent of employees of the affected
health
care facility which that had representation rights on the
date of the contract, agreement, or other arrangement. However, a
contract, lease, agreement, transfer, or other arrangement may
permit
such any modifications of the obligations of the contractor
or
transferee as that may be required to conform to an order of the
national
labor relations board National
Labor Relations Board in
appropriate proceedings.
(3) This section does not limit employees' rights, under
applicable law, to assert that their bargaining representative is
no longer representative of the employee.
(4) If a local governmental unit, corporation, or subsidiary
corporation enters into an agreement providing for a transaction
that is subject to subsection (2), an employee of the affected
health care facility or the collective bargaining agent of such an
employee shall have standing to commence an action in the circuit
court for the county to determine if the transaction is in
compliance with subsection (2), if the action is commenced within
90 days after written notice by the local governmental unit,
corporation, or subsidiary corporation to the employees and
collective bargaining agent of the affected health care facility of
the
execution of such the agreement. If the court determines that
the agreement is not in compliance with subsection (2), and if the
local governmental unit, corporation, or the subsidiary corporation
and the contractor or transferee do not agree to amendments making
the agreement in compliance with subsection (2), the court shall
declare the agreement void and of no effect and provide for
rescission of the transactions provided for under the agreement.
(5) An employee of a county public hospital, city public
hospital, village public hospital, or other health care facility
who,
on the effective date of this act, February 27, 1988,
participates in the federal old age, survivors, and disability
insurance benefits program through a voluntary agreement made
pursuant
to under section 218 of title II of the social security
act,
42 U.S.C. USC 418, shall continue to participate in the
program if the individual is employed by a corporation or
subsidiary
corporation pursuant to under
this act.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.