HOUSE BILL No. 5680 February 19, 2002, Introduced by Reps. Birkholz, Drolet, Meyer, Vander Veen, Lipsey, Voorhees, Stewart and Kooiman and referred to the Committee on Local Government and Urban Policy. A bill to amend 1945 PA 47, entitled "An act to authorize 2 or more cities, townships, and villages, or any combination of cities, townships, and villages, to incor- porate a hospital authority for planning, promoting, acquiring, constructing, improving, enlarging, extending, owning, maintain- ing, and operating 1 or more community hospitals and related buildings or structures and related facilities; to provide for the sale, lease, or other transfer of a hospital owned by a hos- pital authority to a nonprofit corporation established under the laws of this state for no or nominal monetary consideration; to define hospitals and community hospitals; to provide for changes in the membership therein; to authorize the cities, townships, and villages to levy taxes for community hospital purposes; to provide for the issuance of bonds; to provide for the pledge of assessments; to provide for borrowing money for operation and maintenance and issuing notes for operation and maintenance; to validate elections heretofore held and notes heretofore issued; to validate bonds heretofore issued; to authorize condemnation proceedings; to grant certain powers of a body corporate; to val- idate and ratify the organization, existence, and membership of entities acting as hospital authorities under the act and the actions taken by hospital authorities and by the members of the hospital authorities; and to prescribe penalties and provide remedies," 05488'01 TJS 2 by amending sections 5, 6, and 7 (MCL 331.5, 331.6, and 331.7), section 5 as amended by 1984 PA 17 and section 7 as amended by 1983 PA 78. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 5. (1) The hospital authority shall be directed and 2 governed by a hospital board consisting of 1 member for the first 3 20,000 population and 1 for each additional 40,000, or fraction 4 thereof, according to the latest or each succeeding federal 5 decennial census for each city, village, or township participat- 6 ing in the hospital authority. The members shall be appointed by 7 the legislative bodies of each participating city, village, or 8 township, and, subject to subsection (2), 7 members at large 9 selected by the appointed members. On the date appointed in the 10 adopting resolutions, or within 30 days after the creation of the 11 hospital authority, the members appointed by the respective 12 cities, villages, and townships, shall convene, elect a temporary 13 chairperson and secretary, and select the members at large by a 14 majority vote. The appointed members shall be electors of the 15 respective appointing cities, villages, or townships and may be 16 members of the legislative bodies of the city, village, or 17 township. The members at large shall be electors of the terri- 18 tory served by the community hospitals. The members at large 19 shall beelectedAPPOINTED for staggered terms so thatnoNOT 20 more than 2 memberships shall expire each year, and succeeding 21 appointments shall be for a term of 4 years. The appointed 22 members shall serve at the pleasure of their respective 23 appointing legislative bodies. 05488'01 3 1 (2) The members at large of a hospital board of a hospital 2 authority whose member jurisdiction has a population of 300,000 3 or more shall be removed if the legislative bodies of the cities, 4 villages, and townships participating in the hospital authority 5 whose representation constitutes a majority of the members of the 6 hospital board in accordance with their authorized representation 7 on the board, excluding the members at large, adopt a resolution 8 to remove the members at large. The resolutions required by this 9 subsection shall be adopted within the same 90-day period. The 10 resolutions shall be transmitted to the secretary of the hospital 11 board. 12 (3) Upon receipt of the resolutions required by subsection 13 (2), the secretary of the hospital board shall do all of the 14 following: 15 (a) Certify the resolutions. 16 (b) Within 10 days after receipt of the resolutions, notify 17 the members at large in writing that they have been removed from 18 office. 19 (c) Notify the full hospital board not later than the next 20 regularly scheduled meeting of the hospital board. IF THE BOARD 21 IS NOT SCHEDULED TO HOLD A REGULARLY SCHEDULED MEETING WITHIN 90 22 DAYS AFTER THE SECRETARY'S RECEIPT OF THE RESOLUTIONS, THE SECRE- 23 TARY SHALL, WITHIN 30 DAYS AFTER RECEIPT OF THE RESOLUTIONS, 24 NOTIFY THE OTHER MEMBERS OF THE BOARD IN WRITING OF THE REMOVAL 25 FROM OFFICE. 26 (4) The procedure described in subsection (2) shall not be 27 used or attempted more than once in a 12-month period. 05488'01 4 1 (5) Immediately upon the removal of the members at large the 2 hospital board shall hold its first meeting and organize by 3 electing from its members a chairperson and vice-chairperson, and 4 a secretary and treasurer who shall be members of the hospital 5 board. 6 (6) The hospital board shall also appoint an executive com- 7 mittee, consisting of the chairperson and 6 other hospital board 8 members. The executive committee shall carry on the active 9 administrative duties of the hospital authority. The executive 10 committee shall hold office at the pleasure of the hospital 11 board. The hospital board shall also appoint a medical advisory 12 committee which shall advise the hospital board with regard to 13 professional problems of hospital operation and to surgical and 14 medical policies including matters pertaining to the development 15 of medical staff bylaws and rules. The members of the medical 16 advisory committee shall be physicians and surgeons licensed pur- 17 suant to article 15 of the public health code,Act No. 368 of18the Public Acts of 1978, being sections 333.16101 to 333.18838 of19the Michigan Compiled Laws1978 PA 368, MCL 333.16101 TO 20 333.18838. The board shall also select and employ other officers 21 and employees and contract for services as are considered neces- 22 sary to effectuate its purposes. 23 (7) A member of the board shall not vote on an issue in 24 which the member has a substantial interest. 25 (8) The hospital board, by resolution, may establish commit- 26 tees, other than the executive committee. The committees shall 27 be constituted and appointed as provided by the hospital board. 05488'01 5 1 A committee shall not exercise governing powers of the hospital 2 board but shall make reports and recommendations to the hospital 3 board as the hospital board directs. 4 (9) A former member of a hospital board who was removed pur- 5 suant to subsection (2) shall not be employed by the hospital 6 authority within 2 years after the former member was removed. 7 Sec. 6. (1) After organization, the hospital board, by res- 8 olution, shall establish the times for holding regular meetings 9 of the board. Business which the hospital board may perform 10 shall be conducted at a public meeting held in compliance with 11Act No. 267 of the Public Acts of 1976, being sections 15.261 to1215.275 of the Michigan Compiled LawsTHE OPEN MEETINGS ACT, 1976 13 PA 267, MCL 15.261 TO 15.275. The board shall hold other meet- 14 ings at the call of the chairperson. Public notice of the time, 15 date, and place of meetings shall be given in the manner required 16 byAct No. 267 of the Public Acts of 1976THE OPEN MEETINGS 17 ACT, 1976 PA 267, MCL 15.261 TO 15.275, and the chairperson shall 18 give 3 days' personal or written notice of the time and place of 19 the meetings to the members. A member of the board may file a 20 written waiver of notice and consent to a board meeting. The 21 chairperson shall call a meeting upon written request of 3 mem- 22 bers of the board. A majority of the members shall constitute a 23 quorum. The board shall cause to be kept a written or printed 24 record of each meeting, which record and any other writing pre- 25 pared, owned, used, in the possession of, or retained by the 26 board in the performance of an official function shall be made 27 available to the public in compliance withAct No. 442 of the05488'01 6 1Public Acts of 1976, being sections 15.231 to 15.246 of the2Michigan Compiled LawsTHE FREEDOM OF INFORMATION ACT, 1976 PA 3 442, MCL 15.231 TO 15.246. 4 (2) The board shall provide for a system of accounts to con- 5 form to a uniform system required by law and for annual auditing 6 of the accounts of the treasurer by a certified public 7 accountant. The board shall require the treasurer to give a 8 suitable bond by a responsible bonding company, to be paid for by 9 the board. The board shall adopt bylaws, rules, and policies 10 governing the operation and professional work of the hospital and 11 the eligibility and qualifications of its medical staff. 12 Physicians, nurses, attendants, employees, patients, and persons 13 approaching or on the premises of the hospital and furniture, 14 equipment, and other articles used or brought on the premises 15 shall be subject to the bylaws, rules, and policies as the hospi- 16 tal board may adopt or authorize to be adopted. The board may 17 deny or revoke staff membership, or suspend or reduce hospital 18 privileges to a physician who violates a provision of the medical 19 staff bylaws, rules, and policies. 20 (3) The medical advisory committee, with the approval of the 21 hospital board, shall adopt rules and policies governing the pro- 22 fessional work of the hospitals and the eligibility and qualifi- 23 cations of their medical staffs. The rules and policies shall 24 conform, as nearly as practicable, to the applicable standards 25 recommended by the joint commission on accreditation of 26 hospitals. 05488'01 7 1 (4) IF AN AUDIT COMPLETED PURSUANT TO SUBSECTION (2) SHOWS 2 THAT THE AUTHORITY HAS GROSS ASSETS, WITHOUT ACCOUNTING FOR ANY 3 LIABILITIES, OF LESS THAN $20,000.00, AND IF THE AUTHORITY IS NOT 4 THEN DIRECTLY OR INDIRECTLY ENGAGED IN THE OPERATION OF A HOSPI- 5 TAL, THE BOARD MAY ADOPT A RESOLUTION STATING THAT THE AUTHORITY 6 HAS NO MATERIAL ASSETS. THE ADOPTION OF THE RESOLUTION SHALL BE 7 MADE AT A PUBLIC MEETING HELD IN COMPLIANCE WITH THIS SECTION AND 8 WITH THE OPEN MEETINGS ACT, 1976 PA 267, MCL 15.261 TO 15.275. A 9 BOARD THAT HAS ADOPTED SUCH A RESOLUTION SHALL CONTINUE TO FUNC- 10 TION IN COMPLIANCE WITH SECTIONS 5 AND 7 AND THIS SECTION EXCEPT 11 FOR THE FOLLOWING: 12 (A) THE BOARD NEED NOT MEET AT THE REGULAR TIMES ESTABLISHED 13 UNDER THIS SECTION. 14 (B) THE BOARD NEED NOT COMPLETE AN ANNUAL BUDGET PURSUANT TO 15 SECTION 7. 16 (C) THE BOARD MAY TAKE ACTION BY A WRITTEN CONSENT OF THE 17 BOARD MEMBERS SIGNED BY A NUMBER OF BOARD MEMBERS EQUAL TO THE 18 NUMBER OF MEMBERS NECESSARY TO APPROVE SUCH ACTION AT A MEETING 19 AT WHICH ALL THE BOARD MEMBERS ATTENDED, BUT ONLY FOR THE PURPOSE 20 OF ELECTING MEMBERS AT LARGE TO THE BOARD OF THE AUTHORITY. SUCH 21 A WRITTEN ACTION SHALL BE MADE AVAILABLE TO THE PUBLIC IN COMPLI- 22 ANCE WITH THE FREEDOM OF INFORMATION ACT, 1976 PA 442, MCL 15.231 23 TO 15.246. 24 (5) A DETERMINATION OF NO MATERIAL ASSETS, AS PROVIDED FOR 25 IN SUBSECTION (4), SHALL REMAIN IN EFFECT UNTIL THE AUTHORITY 26 BEGINS DIRECTLY OR INDIRECTLY TO ENGAGE IN THE OPERATION OF A 27 HOSPITAL OR UNTIL THE AUTHORITY'S GROSS ASSETS, WITHOUT 05488'01 8 1 ACCOUNTING FOR ANY LIABILITIES, INCREASE TO $20,000.00. 2 IMMEDIATELY UPON THE HAPPENING OF EITHER EVENT, OR AT ANY OTHER 3 TIME AT THE DISCRETION OF THE BOARD, THE DETERMINATION OF NO 4 MATERIAL ASSETS SHALL CEASE AND THE BOARD SHALL RESUME ALL OF THE 5 ACTIONS REQUIRED OF IT BEFORE THE DETERMINATION OF NO MATERIAL 6 ASSETS. 7 (6) ANY RESIDUAL VALUE RESULTING FROM AN AUTHORITY'S POTEN- 8 TIAL RIGHT TO RETAKE POSSESSION OF A HOSPITAL OR OTHER PROPERTY 9 PREVIOUSLY SOLD OR TRANSFERRED PURSUANT TO SECTION 9 IS NOT 10 INCLUDED AS PART OF THE AUTHORITY'S ASSETS FOR MAKING A DETERMI- 11 NATION OF NO MATERIAL ASSETS UNDER SUBSECTION (4). 12 Sec. 7. (1)ByEXCEPT AS OTHERWISE PROVIDED IN SECTION 6, 13 BY April 1 of each year, the hospital board shall cause a bal- 14 anced budget to be prepared containing an itemized statement of 15 the estimated current expenses and the expenses for capital 16 outlay, including the amount necessary to pay the principal and 17 interest of any outstanding bonds or other obligations of the 18 authority maturing before the time of the following year's tax 19 collection or which have previously matured and are unpaid, and 20 an estimate of the revenue of the hospital authority from all 21 sources for the ensuing fiscal year. The board shall publish 22 notice of a public hearing on the budget stating the time and 23 place. Notice of hearing shall be furnished the legislative body 24 of each city, village, or township participating in the hospital 25 authority. 26 (2) After the public hearing, the board shall adopt the 27 budget as shall be considered necessary and shall ascertain what 05488'01 9 1 amount is required to be raised by taxation from the several 2 cities, townships, and villages to meet their respective shares 3 of the amount of the budget in excess of the estimated other 4 revenues. The share of each city, village, and township shall be 5 determined on the basis of their respective valuations as finally 6 equalized. The assessed valuation of a township for the purpose 7 shall be exclusive of the property within a village which, as a 8 corporate entity, is a member of the authority, and the assessed 9 valuation of a member village shall be computed pursuant to the 10 township assessment roll so as to afford a uniform assessment 11 basis. A member township containing in whole or in part a member 12 village shall levy taxes under this act only against property 13 located outside the village. The board shall certify to each 14 participating city, township, and village the amount to be raised 15 by them and the respective cities, townships, and villages shall 16 include those amounts in their next ensuing budgets, and shall 17 pay the amount so certified from funds they have available or 18 from the proceeds of a tax which they are authorized to levy, in 19 an amount sufficient therefor, but not exceeding the tax limita- 20 tion provided in this act exclusive of any amount voted for capi- 21 tal improvements under section 4 or necessary to pay principal 22 and interest on bonds issued under section 8b. A village located 23 in a township that is also a member of the authority, by agree- 24 ment with the township, may have the township include the village 25 property in a tax assessment under this act, collect the money 26 assessed, and pay it to the village for payment of its share to 27 the authority. Payment of the sums certified shall be due and 05488'01 10 1 payable to the hospital authority 120 days after the date on 2 which local taxes become due and payable in cities, villages, and 3 townships participating in the hospital authority except that 4 when a township collects a village portion, the amount due from 5 the village shall not be due to the authority until the township 6 portion is due. Each city, township, and village shall be liable 7 for the amount certified. 8 (3) The board shall also render to each participating city, 9 township, and village,on each July 1 and January 1duringA 10 CERTIFIED REPORT PERTAINING TO the operation of the hospital.,11a certified report thereof.Each report shall state the condi- 12 tion of the finances, the amount of money expended, the money 13 received from all sources, the money owing to the board for hos- 14 pital and medical services, and other information as the board 15 may consider expedient. The board shall also file a copy of the 16 report with the department of treasury together with other infor- 17 mation as the department of treasury may require. 18 (4) Within 30 days after the formation of a new hospital 19 authority, and annually on July 1 thereafter, the hospital board 20 shall file with the secretary of state a report as the secretary 21 of state may require, including the date of formation, the names 22 of the member communities, and other informationasthe 23reportSECRETARY OF STATE may require. 05488'01 Final page. TJS