Bill Text: MI SB1115 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Businesses; nonprofit corporations; conversion of municipal health facilities corporations into nonprofit corporations; allow. Amends secs. 103, 207, 208, 256, 257 & 306 of 1987 PA 230 (MCL 331.1103 et seq.) & adds sec. 305a.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Passed) 2010-12-29 - Assigned Pa 0331'10 With Immediate Effect [SB1115 Detail]
Download: Michigan-2009-SB1115-Introduced.html
SENATE BILL No. 1115
February 9, 2010, Introduced by Senators HARDIMAN, PAPPAGEORGE, BIRKHOLZ and JANSEN and referred to the Committee on Health Policy.
A bill to amend 1987 PA 230, entitled
"Municipal health facilities corporations act,"
by amending section 306 (MCL 331.1306), as amended by 1998 PA 62,
and by adding section 308.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 306. (1) Subject to applicable licensing and other
regulatory
requirements, and subject to any approvals required
under
subsections (5) and (6), each the
requirements of this
section,
a board of trustees and or subsidiary
board may enter into
and carry out agreements for the reorganization and the transfer of
ownership
or operation of some or all of its the health care
facilities and related assets or health services of its municipal
health facilities corporation to a nonprofit health care
organization or to a public authority on behalf of a nonprofit
health care organization by sale, installment sales agreement, land
contract, lease, lease with an option to purchase, sublease,
contract, option, or by any other means. However, this section does
not apply to a conversion under section 308.
(2)
In establishing the terms of a reorganization pursuant to
of a municipal health facilities corporation under this section,
the board of trustees or subsidiary board of that municipal health
facilities corporation may take into account, in addition to the
monetary consideration for the transfer, if any, 1 or more of the
following:
(a) The ability and willingness of the nonprofit health care
organization to continue to provide health services to residents of
the local governmental unit.
(b) The assumption by the nonprofit health care organization
of liabilities, obligations, and risks associated with ownership or
operation of the health care facilities and health services
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 nonprofit health care
organization to provide services to those unable to pay fully for
their care.
(d) The elimination of or reduction in support required for
the health care facilities or health services from tax revenues or
other public sources.
(e) The ability and willingness of the nonprofit health care
corporation to expand or improve the health care facilities or the
health services being transferred.
(f)
Such Any other factors bearing on the health and welfare
of
the residents of the local governmental unit as 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
nonprofit health care organization or such any other
forms of
payment
as that it considers appropriate in full or partial
satisfaction of any monetary consideration provided under an
agreement
for reorganization pursuant to of
a municipal health
facilities corporation under this section.
(4) Any board of trustees or subsidiary board transferring
health
care facilities pursuant to of
a municipal health facilities
corporation under this section shall require, for a term of not
less than 30 years, that use of the health care facilities
transferred 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 nonprofit
health
care organization acquiring such the health care facilities
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 upon
on this section shall be made only with the prior approval of the
board
of trustees of its the parent corporation of its municipal
health facilities corporation.
(6) Any transfer by a corporation or a subsidiary corporation
in
reliance upon on this section shall be made only with the prior
approval of the county board of commissioners, city council, or
village council that owns the municipal health facilities
corporation, or owns the parent corporation if the municipal health
facilities corporation is a subsidiary corporation, 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 nonprofit health
care organization acquiring the health care facilities or health
services is composed of persons 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
transfer 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. 308. (1) Subject to applicable licensing and other
regulatory requirements, to the requirements of section 746 of the
nonprofit corporation act, 1982 PA 162, MCL 450.2746, and to the
requirements of this section, a board of trustees or a subsidiary
board may convert its health facilities corporation into a
nonprofit corporation, organized on a stock basis.
(2) In evaluating whether to pursue a conversion and in
establishing the terms of a conversion under this section and
section 746 of the nonprofit corporation act, 1982 PA 162, MCL
450.2746, in addition to the amount of any monetary consideration
offered for the conversion, the board of trustees or subsidiary
board of the health facilities corporation may consider any of the
following:
(a) The ability and willingness of the proposed shareholder or
shareholders of the nonprofit corporation to continue to provide
health services to residents of the local governmental unit.
(b) The continued obligation of the nonprofit corporation for
the liabilities, obligations, and risks associated with ownership
or operation of the health care facilities and health services
owned by the corporation, 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 proposed shareholder or
shareholders of the nonprofit corporation to provide services to
those unable to pay fully for their care.
(d) The elimination of or reduction in support required for
the health care facilities or health services from tax revenues or
other public sources.
(e) The ability and willingness of the proposed shareholder or
shareholders of the nonprofit corporation to expand or improve the
health care facilities or the health services being 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) All of the following apply to the conversion of a
municipal health facilities corporation into a nonprofit
corporation under this section:
(a) The board of trustees or subsidiary board may accept
secured or unsecured notes, bonds, or obligations given by or on
behalf of the proposed shareholder or shareholders of the nonprofit
corporation, or any other forms of payment it considers
appropriate, in full or partial satisfaction of any monetary
consideration provided under an agreement for conversion under this
section.
(b) The agreement of conversion shall require that, for at
least 30 years after the conversion, the health care facilities
owned by the corporation shall be open for use by any person
regardless of race, religion, color, national origin, sex, age,
disability, marital status, sexual preference, or source of payment
and that the nonprofit 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.
(c) The subsidiary board of a subsidiary corporation shall not
convert the corporation into a nonprofit corporation without the
prior approval of the board of trustees of its parent corporation
to the conversion.
(d) The board of trustees or subsidiary board of a municipal
health facilities corporation shall not convert the corporation
into a nonprofit corporation under this section without the prior
majority approval of the county board of commissioners, city
council, or village council, as applicable, that owns the municipal
health facilities corporation or owns the parent corporation of the
municipal health facilities corporation if it is a subsidiary
corporation, if either of the following applies:
(i) The health care facilities or health services included in
the conversion provided more than 10% of the gross revenues of the
municipal health facilities corporation, determined in accordance
with generally accepted accounting principles, in either of the 2
full fiscal years of the municipal health facilities corporation or
subsidiary corporation completed immediately preceding the date of
the conversion.
(ii) A majority of the board of the nonprofit corporation after
the conversion will be individuals who served as trustees of the
municipal health facility corporation before the conversion.
(e) The board of trustees or subsidiary board of a municipal
health facilities corporation shall not convert the corporation
into a nonprofit corporation under this section if the conversion
in any manner impairs the obligation of the municipal health
facilities corporation with respect to any outstanding obligation,
bond, note, or contract of that corporation.
(f) The converting municipal health facilities corporation and
the board of trustees or subsidiary board of that municipal health
facilities corporation shall comply with section 746 of the
nonprofit corporation act, 1982 PA 162, MCL 450.2746.
(g) After the conversion is effective, the surviving nonprofit
corporation is subject to the nonprofit corporation act, 1982 PA
162, MCL 450.2101 to 450.3192, and is not subject to this act.
(h) After the conversion is effective, the articles of
incorporation of the converting municipal health facility
corporation or the subsidiary corporation are considered terminated
and the articles of incorporation filed with the certificate of
conversion under section 746 of the nonprofit corporation act, 1982
PA 162, MCL 450.2746, apply to the surviving nonprofit corporation.
The surviving corporation shall deliver a copy of its articles of
incorporation and the certificate of conversion to the county
clerk, city clerk, or village clerk to whom the converting
municipal health facilities corporation originally delivered its
articles of incorporation under section 207 or 256, and that clerk
shall file the articles of incorporation and certificate of
conversion in his or her office.
(4) As used in this section, "nonprofit corporation" means a
domestic corporation, as that term is defined in section 106 of the
nonprofit corporation act, 1982 PA 162, MCL 450.2106.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 1116
of the 95th Legislature is enacted into law.
