Senate Bill 2781

AN ACT TO AMEND SECTION 41-13-35, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE BOARD OF TRUSTEES OF ANY COMMUNITY HOSPITAL TO ESTABLISH A RESERVE AND TRUST FUND; TO PROVIDE THAT PROCEEDS RECEIVED BY THE COUNTY AS A RESULT OF THE SALE OF HOSPITAL FACILITIES OWNED BY THE COUNTY MAY BE DEPOSITED INTO THE FUND; TO PROVIDE FOR THE INVESTMENT OF THE ASSETS OF THE TRUST FUND; TO PROVIDE THAT THE FUND SHALL BE DIVIDED INTO A CORPUS COMPONENT AND AN EARNING COMPONENT; TO PROVIDE THAT THE CORPUS COMPONENT SHALL REMAIN INVIOLATE EXCEPT AS OTHERWISE PROVIDED IN THIS ACT; TO PROVIDE THAT THE EARNINGS COMPONENT SHALL BE TRANSFERRED FROM THE TRUST FUND TO THE GENERAL FUND OF THE COUNTY AND SHALL BE AVAILABLE FOR APPROPRIATION AND SPENDING BY THE BOARD OF SUPERVISORS OF THE COUNTY; TO AUTHORIZE MONEY FROM THE CORPUS OF THE TRUST TO BE EXPENDED BY THE COUNTY UNDER CERTAIN CIRCUMSTANCES; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 41-13-35, Mississippi Code of 1972, is amended as follows:

41-13-35. (1) The board of trustees of any community hospital shall have full authority to appoint an administrator, who shall not be a member of the board of trustees, and to delegate reasonable authority to such administrator for the operation and maintenance of such hospital and all property and facilities otherwise appertaining thereto.

(2) The board of trustees shall have full authority to select from its members, officers and committees and, by resolution or through the board bylaws, to delegate to such officers and committees reasonable authority to carry out and enforce the powers and duties of the board of trustees during the interim periods between regular meetings of the board of trustees; provided, however, that any such action taken by an officer or committee shall be subject to review by the board, and actions may be withdrawn or nullified at the next subsequent meeting of the board of trustees if the action is in excess of delegated authority.

(3) The board of trustees shall be responsible for governing the community hospital under its control and shall make and enforce staff and hospital bylaws and/or rules and regulations necessary for the administration, government, maintenance and/or expansion of such hospitals. The board of trustees shall keep minutes of its official business and shall comply with Section 41-9-68.

(4) The decisions of said board of trustees of the community hospital shall be valid and binding unless expressly prohibited by applicable statutory or constitutional provisions.

(5) The power of the board of trustees shall specifically include, but not be limited to, the following authority:

(a) To deposit and invest funds of the community hospital in accordance with Section 27-105-365;

(b) To establish such equitable wage and salary programs and other employment benefits as may be deemed expedient or proper, and in so doing, to expend reasonable funds for such employee salary and benefits. Allowable employee programs shall specifically include, but not be limited to, medical benefit, life, accidental death and dismemberment, disability, retirement and other employee coverage plans. The hospital may offer and fund such programs directly or by contract with any third party and shall be authorized to take all actions necessary to implement, administer and operate such plans, including payroll deductions for such plans;

(c) To authorize employees to attend and to pay actual expenses incurred by employees while engaged in hospital business or in attending recognized educational or professional meetings;

(d) To enter into loan or scholarship agreements with employees or students to provide educational assistance where such student or employee agrees to work for a stipulated period of time for the hospital;

(e) To devise and implement employee incentive programs;

(f) To recruit and financially assist physicians and other health care practitioners in establishing, or relocating practices within the service area of the community hospital including, without limitation, direct and indirect financial assistance, loan agreements, agreements guaranteeing minimum incomes for a stipulated period from opening of the practice and providing free office space or reduced rental rates for office space where such recruitment would directly benefit the community hospital and/or the health and welfare of the citizens of the service area;

(g) To contract by way of lease, lease-purchase or otherwise, with any agency, department or other office of government or any individual, partnership, corporation, owner, other board of trustees, or other health care facility, for the providing of property, equipment or services by or to the community hospital or other entity or regarding any facet of the construction, management, funding or operation of the community hospital or any division or department thereof, or any related activity, including, without limitation, shared management expertise or employee insurance and retirement programs, and to terminate said contracts when deemed in the best interests of the community hospital;

(h) To file suit on behalf of the community hospital to enforce any right or claims accruing to the hospital and to defend and/or settle claims against the community hospital and/or its board of trustees;

(i) To sell or otherwise dispose of any chattel property of the community hospital by any method deemed appropriate by the board where such disposition is consistent with the hospital purposes or where such property is deemed by the board to be surplus or otherwise unneeded;

(j) To let contracts for the construction, remodeling, expansion or acquisition, by lease or purchase, of hospital or health care facilities, including real property, within the service area for community hospital purposes where such may be done with operational funds without encumbrancing the general funds of the county or municipality, provided that any contract for the purchase of real property must be ratified by the owner;

(k) To borrow money and enter other financing arrangements for community hospital and related purposes and to grant security interests in hospital equipment and other hospital assets and to pledge a percentage of hospital revenues as security for such financings where needed; provided that the owner shall specify by resolution the maximum borrowing authority and maximum percent of revenue which may be pledged by the board of trustees during any given fiscal year;

(l) To expend hospital funds for public relations or advertising programs;

(m) To offer the following inpatient and outpatient services, after complying with applicable health planning, licensure statutes and regulations, whether or not heretofore offered by such hospital or other similar hospitals in this state and whether or not heretofore authorized to be offered, long-term care, extended care, home care, after-hours clinic services, ambulatory surgical clinic services, preventative health care services including wellness services, health education, rehabilitation and diagnostic and treatment services; to promote, develop, operate and maintain a center providing care or residential facilities for the aged, convalescent or handicapped; and to promote, develop and institute any other services having an appropriate place in the operation of a hospital offering complete community health care;

(n) To promote, develop, acquire, operate and maintain on a nonprofit basis, or on a profit basis if the community hospital's share of profits is used solely for community hospital and related purposes in accordance with this chapter, either separately or jointly with one or more other hospitals or health-related organizations, facilities and equipment for providing goods, services and programs for hospitals, other health care providers, and other persons or entities in need of such goods, services and programs and, in doing so, to provide for contracts of employment or contracts for services and ownership of property on terms that will protect the public interest;

(o) To establish and operate medical offices, child care centers, wellness or fitness centers and other facilities and programs which the board determines are appropriate in the operation of a community hospital for the benefit of its employees, personnel and/or medical staff which shall be operated as an integral part of the hospital and which may, in the direction of the board of trustees, be offered to the general public. If such programs are not established in existing facilities or constructed on real estate previously acquired by the owners, the board of trustees shall also have authority to acquire, by lease or purchase, such facilities and real property within the service area, whether or not adjacent to existing facilities, provided that any contract for the purchase of real property shall be ratified by the owner. The trustees shall lease any such medical offices to members of the medical staff at rates deemed appropriate and may, in its discretion, establish rates to be paid for the use of other facilities or programs by its employees or personnel or members of the public whom the trustees may determine may properly use such other facilities or programs;

(p) Provide, at its discretion, ambulance service and/or to contract with any third party, public or private, for the providing of such service;

(q) Establish a fair and equitable system for the billing of patients for care or users of services received through the community hospital, which in the exercise of the board of trustees' prudent fiscal discretion, may allow for rates to be classified according to the potential usage by an identified group or groups of patients of the community hospital's services and may allow for standard discounts where the discount is designed to reduce the operating costs or increase the revenues of the community hospital. Such billing system may also allow for the payment of charges by means of a credit card or similar device and allow for payment of administrative fees as may be regularly imposed by a banking institution or other credit service organization for the use of such cards;

(r) To establish as an organizational part of the hospital or to aid in establishing as a separate entity from the hospital, hospital auxiliaries designed to aid the hospital, its patients, and/or families and visitors of patients, and when the auxiliary is established as a separate entity from the hospital, the board of trustees may cooperate with the auxiliary in its operations as the board of trustees deems appropriate; and

(s) To make any agreements or contracts with the federal government or any agency thereof, the State of Mississippi or any agency thereof, and any county, city, town, supervisors district or election district within this state, jointly or separately, for the maintenance of charity facilities.

(6) No board of trustees of any community hospital may accept any grant of money or other thing of value from any not-for-profit or for-profit organization established for the purpose of supporting health care in the area served by the facility unless two-thirds (2/3) of the trustees vote to accept the grant.

(7) No board of trustees, individual trustee or any other person who is an agent or servant of the trustees of any community hospital shall have any personal financial interest in any not-for-profit or for-profit organization which, regardless of its stated purpose of incorporation, provides assistance in the form of grants of money or property to community hospitals or provides services to community hospitals in the form of performance of functions normally associated with the operations of a hospital.

(8) (a) The board of trustees of any community hospital is authorized to establish a Community Hospital Reserve and Trust Fund. The board of trustees is authorized to fund and deposit into the fund all or a portion of the proceeds received by the county as a result of the sale of hospital facilities owned by the county, and any income from the investment of those funds.

(b) The fund shall be administered, managed, invested and governed by the board of trustees. The board of trustees is authorized to appoint three (3) individuals to an advisory committee who shall possess the level of knowledge and skill in investment strategies as necessary, in the discretion of the board of trustees, to provide advice to the board of trustees in the proper management of the fund. The term of office for members of the advisory committee shall run concurrently with the term of office of the board of trustees.

(c) The trustees shall administer and manage the fund and manage the principal and interest income of the fund, and establish a comprehensive investment plan for the purposes of this subsection, with the assistance and advice of the advisory committee. The comprehensive investment plan shall specify the policies to be utilized by the board of trustees in its administration of the fund. Except as otherwise authorized in this subsection, the board of trustees shall invest the fund in any of the investments authorized for the Mississippi Prepaid Affordable College Tuition Program under Section 37-155-9, Mississippi Code of 1972, and those investments shall be subject to the limitations prescribed by Section 37-155-9.

(d) In furtherance of the powers granted under this subsection (8), the board of trustees shall have such powers as necessary or convenient to carry out the purposes and provisions of this section, including, but not limited to, the following express powers:

(i) To contract for necessary goods and services, to employ necessary personnel, and to engage the services of investment advisors and consultants for fund management, administrative and technical assistance in carrying out its duties and responsibilities in administering the fund;

(ii) To administer the fund in a manner that is sufficiently actuarially sound to meet the obligations of this section;

(iii) Subject to the terms, conditions, limitations and restrictions specified in Section 37-155-9 and this subsection (8), the board of trustees shall have power to sell, assign, transfer and dispose of any of the securities and investments of the fund, provided that any such sale, assignment or transfer has the majority approval of the entire board of trustees; and

(iv) To annually prepare, or cause to be prepared, a report setting forth in appropriate detail an accounting of the fund and a description of the financial condition of the fund at the close of each fiscal year. The report shall be submitted on or before July 1 of each fiscal year.

(e) The fund shall be invested and disbursed as follows:

(i) The fund shall be divided into two (2) components: 1. the corpus component, and 2. the earnings component.

(ii) The corpus component of the funds shall consist of the initial deposit as described above, and additional subsequent deposits from the annual income earned from the investment of the fund. Except as otherwise provided in this section, the corpus shall be inviolate and maintained and used to generate interest income and shall not be invaded or used by the trustees.

(iii) The earnings component shall be composed of a percentage of the annual interest earned on the corpus component of the fund, and shall be defined and available for distribution by the trustees as described in this subsection.

(iv) On or before July 1 of each year, the trustees shall determine the portion of the earnings component of the trust fund. Trustees are specifically given the power to expend from the earnings component amounts required in connection with the management by the trustees of the fund, including, but not limited to, payments for accounting fees, legal fees and investment advisor or fund-management fees. These expenditures shall be included in the full report as required in paragraph (b) of this subsection.

(v) An amount not to exceed eighty-five percent (85%) of the earnings component shall be transferred from the fund to the general fund of the county at the direction of the clerk of the board of supervisors and shall be available for appropriation and spending on designated "special" projects or purposes, as determined by the board of supervisors. That portion of the earnings component not transferred to the county for such general purposes shall remain in the fund and be added to, and be considered a part of, the corpus component for the ensuing fiscal years.

(f) In addition to the disbursements provided in paragraph (e) of this subsection, the board of supervisors, upon a majority vote, is authorized to withdraw monies from the corpus component of the trust:

(i) In an amount not to exceed five percent (5%) during each fiscal year;

(ii) In any amount in the event a state emergency or local emergency has been declared under federal, state or local law.

(g) In the event of withdrawal of any portion of the corpus component by the county pursuant to paragraph (f)(i) or (ii) of this subsection, annual disbursements by the trustees of the earnings components authorized in paragraph (e) of this subsection shall cease and all income shall be retained by the trustees and repaid to the corpus until such time as the corpus component equals its full pre-withdrawal amount, at which time disbursement of earning components in accordance with paragraph (e) of this subsection may continue.

(h) In the event the monies in the trust account equals a zero balance, the trust will thereupon be dissolved and this section will be repealed.

SECTION 2. This act shall take effect and be in force from and after July 1, 2016.