Bill Text: MO HB777 | 2013 | Regular Session | Introduced
Bill Title: Allows specified local city hospitals to become a nonprofit corporation upon the approval of the voters in the city or by the adoption of a resolution by the hospital's board of trustees
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2013-05-17 - Referred: Health Care Policy(H) [HB777 Detail]
Download: Missouri-2013-HB777-Introduced.html
FIRST REGULAR SESSION
97TH GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVES SWEARINGEN (Sponsor), JONES (50), NETH, BERRY, CARPENTER AND SHULL (Co-sponsors).
1994L.01I D. ADAM CRUMBLISS, Chief Clerk
AN ACT
To amend chapter 96, RSMo, by adding thereto one new section relating to an election for a charter hospital to be governed by Missouri's nonprofit corporation law, with an emergency clause.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Chapter 96, RSMo, is amended by adding thereto one new section, to be known as section 96.229, to read as follows:
96.229. 1. On or after January 1, 2013, a city in which a hospital is located that:
(1) Is organized and operated under this chapter;
(2) Has not accepted appropriated funds from the city during the prior twenty years; and
(3) Is licensed by the department of health and senior services for two hundred fifty beds or more under sections 197.010 to 197.120,
shall not have authority to sell, lease, or otherwise transfer all or any portion of the assets of the hospital to, or cause a merger or consolidation with, any other person or entity.
2. A hospital described under subsection 1 of this section may become a public benefit corporation governed by chapter 355 upon a majority vote of the people voting on the issue or upon adoption of a resolution by a majority vote of the board of trustees. For purposes of this section, the term "public benefit corporation" shall have the meaning as such term is defined in subdivision (28) of section 355.066.
3. On or after January 1, 2013, the board of trustees of a hospital described under subsection 1 of this section may adopt a resolution, by a majority vote of the board, to become a public benefit corporation governed by the provisions of chapter 355. No less than twenty days prior to the vote by the board of trustees on such resolution, the board of trustees shall provide notice of such intended vote to the residents of the city in which the hospital is located in a newspaper of general circulation in the area where published. The board shall further make available, upon request, to the residents of such city such nonconfidential financial, operational, strategic, and other information about the hospital, prepared by independent third parties, to enable the residents of such city to make an informed judgment as to the current financial and operational strengths of the hospital and the ability of the hospital to sustain such strengths in the future as a public benefit corporation. Unless the resolution provides otherwise, at any time before filing by the secretary of state of the articles of incorporation for the hospital, the conversion of the hospital to a public benefit corporation may be abandoned, subject to any contractual rights and in accordance with any procedure set forth in the resolution adopted by the board of trustees or, if none is set forth, with the subsequent approval of a majority of the board of trustees.
4. As an alternative to the procedure described in subsection 3 of this section, whenever the governing body of the city in which the hospital described in subsection 1 of this section is located receives a petition, signed by five percent of the registered voters of such city voting in the last city election, calling for the hospital to become a public benefit corporation, the governing body shall submit to the voters of such city the question of whether to have the hospital become a public benefit corporation. If a majority of the votes cast on the proposal by the registered voters voting thereon are in favor of the proposal, the board of trustees shall comply with the requirements of subsections 5 to 11 of this section and the provisions of subsection 11 of this section shall apply to the hospital. In the event that a majority of voters voting on such question do not vote in favor, no further petition shall be accepted, nor shall any vote on such question be held, until no earlier than five years following the date of the previous vote on such question.
5. The conversion of the hospital from a hospital organized and operated under this chapter to a public benefit corporation shall not become effective unless and until the payment of any interest and principal of any outstanding valid revenue bond of the city secured by hospital property and incurred for the purposes specified in section 96.222, shall have been satisfied in full or otherwise provided for pursuant to a written agreement between the board of trustees and the holder or holders of such bonds.
6. Assets donated to the board of trustees of the hospital under section 96.210, or initially acquired by the city in which the hospital is located, prior to the hospital becoming a public benefit corporation, for use by the hospital, including any replacements, substitutions, conversions, or proceeds thereof, shall continue to be used to provide health care services in the city and in the geographic region previously served by the hospital, except as otherwise prescribed by the terms of the deed, gift, devise, or bequest.
7. Following the passage of the resolution or ballot question provided under this section, the board of trustees shall give the attorney general written notice of the planned conversion to a public benefit corporation. The notice shall include a copy of the proposed articles of incorporation drafted in conformance with subsection 8 of this section, the resolution described in subsection 3 of this section, if applicable, and evidence which demonstrates provision for the satisfaction of any bond or bonds described under subsection 5 of this section. The conversion shall not become effective until twenty days after the board of trustees has given the written notice required by this subsection to the attorney general or until the attorney general has consented in writing to, or indicated in writing that he or she will take no action with respect to, the conversion, whichever is earlier.
8. (1) Upon completion of the twenty-day time period specified in subsection 7 of this section, the board of trustees shall deliver for filing with the secretary of state the articles of incorporation of the hospital as prescribed in section 355.096, applicable to public benefit corporations. The articles of incorporation shall provide that the principal purpose of the public benefit corporation shall be the establishment, equipping, operating, and maintaining by purchase, lease, construction, or otherwise of a health care facility or facilities in the city in which the voters elected to levy a tax under section 96.150 for the care and treatment of the sick, disabled, and infirm persons.
(2) The articles of incorporation shall also include provisions that prohibit the board of trustees, for a period of fifteen years following the filing of the articles of incorporation by the secretary of state, from entering into any transaction which would result in the selling, leasing, or otherwise transferring all or substantially all of the assets of the hospital to, or merging or consolidating with, a for profit corporation, limited liability company, general or limited partnership, or any other person or entity which is not exempt from income taxation under the internal revenue laws of the United States and of the state of Missouri. The articles of incorporation shall further include provisions that allow the board of trustees to enter into any such transaction after the conclusion of such fifteen-year period upon approval by a majority of the registered voters of the city in which the hospital is located at an election held on such question.
9. Unless a delayed effective date is specified, the conversion of the hospital to a public benefit corporation shall begin when the articles of incorporation are filed by the secretary of state.
10. Following the filing by the secretary of state of the articles of incorporation for the hospital, the board of trustees, as comprised immediately prior to such filing, shall constitute the initial board of trustees of the resulting public benefit corporation. The initial board of trustees shall adopt bylaws of the public benefit corporation under chapter 355; provided, however, that, at all times, the number of the authorized members of the board of trustees of the resulting public benefit corporation shall be no fewer than fifteen trustees. A majority of the positions on the board of trustees shall be allocated to individuals who shall be residents of the county in which such hospital is located and no less than one-half of such county residents shall be residents of the city in which such hospital is located. The power to appoint trustees, fill vacancies, set compensation, and to remove trustees shall be vested in the board of trustees of the resulting public benefit corporation.
11. The filing by the secretary of state of the articles of incorporation for the hospital shall have the following effects:
(1) The hospital shall cease to be organized and operated under the provisions of this chapter except as to the provisions of this section;
(2) The hospital shall possess all rights, privileges, immunities, powers, and franchises possessed by the board of trustees of the hospital prior to such filing and shall be subject to all restrictions, disabilities, and duties of the board of trustees of such hospital prior to such filing to the extent that such rights, privileges, immunities, powers, franchises, restrictions, disabilities, and duties are applicable to the form of existence of the hospital as a public benefit corporation;
(3) All rights, causes of action, property, and assets of any kind or description, whether real, personal, tangible, or intangible, of the board of trustees of the hospital prior to such filing, and all debts due on whatever account to the board of trustees of the hospital prior to such filing, including all causes of action belonging to the board of trustees of the hospital, shall be deemed to remain vested in the hospital after such filing without further act or deed;
(4) Title to all real or personal property and any interest therein vested in the board of trustees of the hospital shall not revert or be in any way impaired by reason of such filing;
(5) The hospital shall thereafter be responsible and liable for all valid liabilities and obligations of the board of trustees of the hospital prior to such filing, subject to the hospital's right to assert all valid defenses and claims of the board of trustees of the hospital which existed prior to such filing; and
(6) Neither the rights of creditors nor any liens on the property of the hospital shall be impaired by such filing.
Section B. Because of the need to ensure local hospitals can continue the purpose of providing the best care and treatment of the sick, disabled, and infirm persons as decided on by the people in the affected community, this act is deemed necessary for the immediate preservation of the public health, welfare, peace and safety, and is hereby declared to be an emergency act within the meaning of the constitution, and this act shall be in full force and effect upon its passage and approval.
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