Bill Summary for H 458 (2013-2014)

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Summary date: 

Jun 26 2014

Bill Information:

View NCGA Bill Details2013-2014 Session
House Bill 458 (Public) Filed Wednesday, March 27, 2013
A BILL TO BE ENTITLED AN ACT TO UPDATE THE LAWS RELATING TO THE SALE, LEASE, OR CONVEYANCE OF A PUBLIC HOSPITAL.
Intro. by McElraft.

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Bill summary

The Senate committee substitute to the 2nd edition deletes the provisions of the previous edition and replaces it with AN ACT TO UPDATE THE LAWS RELATING TO THE SALE, LEASE, OR CONVEYANCE OF A PUBLIC HOSPITAL.

Amends GS 131E-6 to include in the definition of corporation, foreign or domestic, authorized to do business in the state (1) a limited liability corporation formed under GS Chapter 57D and (2) a foreign limited liability company that has procured a certificate of authority to transact business in the state. Also amends the definition of hospital facility to also mean the property interest in any buildings, structures, additions, extensions, improvements, or other facilities.

Amends GS 131E-8 to add that if the nonprofit corporation to which a municipality or hospital authority has sold or conveyed any right of ownership in a hospital facility dissolves or sells, leases, or conveys the hospital facility without a successor nonprofit corporation to carry out the conveyance agreement, all ownership rights in the facility revert to the municipal or hospital authority or successor entity originally conveying the hospital. Also adds that a nonprofit corporation may sell, lease, or convey a hospital facility acquired by deed, lease, or conveyance under the statute to a corporation authorized to do business in the state, and a municipality or hospital authority may release its reverter interest in the facility imposed under the statute as long as its reverter interest is released in accordance with the provision in GS 131E-13(d)(9) and the hospital facility is made subject to the reverter in GS 131E-13(a).

Amends GS 131E-13(a) to add that a municipality or hospital authority may lease, sell, or convey any rights of ownership in a hospital facility that the entity has in a hospital facility or part thereof to a corporation authorized to do business in the state, subject to the five conditions in the statute. Also amends (a) to require the corporation to agree that if it or any successor in interest or title to the hospital facility does not comply with the five conditions or fails to operate the facility as a community general hospital open to the general public and free of discrimination unless relieved of this responsibility by operation of law or if the corporation dissolves without a successor corporation to carry out the conveyance terms, all ownership or other rights in the facility revert to the municipality or hospital authority or successor entity originally conveying the hospital, provided that any building, land, or equipment associated with the facility or any of its successors that the corporation has constructed or acquired since the conveyance may revert only upon paying the corporation or any successor an amount equal to the cost less depreciation.

Enacts new (d)(9) in GS 131E-13 providing that if the owner or lessee of a hospital facility has required the municipality or hospital authority to release its reverter interest in connection with a proposed sale, lease, or conveyance of the facility, the municipality or hospital authority must request and consider only the proposals presented by the owner or lessee of he facility. Provides that the municipality or hospital authority may only approve a proposal presented by the owner or lessee but is not required to approve any proposal. Any release of the reverter interest must be conditioned on the replacement of the interest with the imposition of the reverter interest on the hospital facility required by subsection (a). Also amends (d)(1) to require the municipality or hospital authority to adopt a resolution declaring its intent to sell, lease, or convey all or part of the hospital facility or any interest therein at a regular meeting with 10 days' public notice. Amends the notice requirements to require the notice to describe the intent to lease, sell, or convey all or part of the facility involved.

Amends GS 131E-13(e) to allow a hospital authority or a municipality to lease or sublease hospital land to a for-profit or not-for-profit corporation (was, corporation) or other entity (was, other business entity), whether for-profit or not-for-profit, and to participate as an owner, joint venturer, or other equity participant with a for-profit or not-for-profit corporation or other entity (was, other business entity), whether for-profit or not-for-profit, for the construction and operation of medial office buildings and other health care facilities, as long as the municipality, authority, or other entity continues to maintain its primary community general hospital facilities.

Applies to sales, leases, and conveyances occurring on or after the date the act becomes law. Provides that any sale, lease, or conveyance that is in substantial compliance with GS 131E-13(d)(9) that occurred before that date is affirmed and ratified, and is valid, effective, and enforceable.