HB 1148 - Hospital Authorities; conflicts of interest
Georgia House of Representatives - 1995/1996 Sessions
HB 1148 - Hospital Authorities; conflicts of interest
Page Numbers - 1/ 2/ 3/ 4/ 5/ 6/ 7
1. Childers 13th 2. Smith 12th 3. Smith 175th
4. Titus 180th 5. Day 153rd 6. Perry 11th
House Comm: H&E / Senate Comm: /
House Vote: Yeas 73 Nays 93 Senate Vote: Yeas Nays
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House Action Senate
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1/8/96 Read 1st Time
1/9/96 Read 2nd Time
1/26/96 Favorably Reported
Sub Committee Amend/Sub
2/13/96 Read 3rd Time
2/13/96 Lost
2/13/96 Notice to Reconsider
2/14/96 Reconsidered
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Rules Suspended to Introduce
Code Sections amended: 31-7-71, 31-7-72, 31-7-74, 31-7-74.1, 31-7-75, 31-7-75.3
HB 1148 LC 11 8884S/5
A BILL TO BE ENTITLED
AN ACT
1- 1 To amend Article 4 of Chapter 7 of Title 31 of the Official
1- 2 Code of Georgia Annotated, the "Hospital Authorities Law,"
1- 3 so as to change the provisions relating to definitions; to
1- 4 provide for removal of members of hospital authorities; to
1- 5 provide for notice and hearing; to prohibit certain
1- 6 conflicts of interest and the transaction of business by
1- 7 members of hospital authorities and controlled corporations
1- 8 of such authorities; to limit the powers of hospital
1- 9 authorities and provide for special elections to approve
1-10 certain sales; to provide for an effective date; to repeal
1-11 conflicting laws; and for other purposes.
1-12 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
1-13 Article 4 of Chapter 7 of Title 31 of the Official Code of
1-14 Georgia Annotated, the "Hospital Authorities Law," is
1-15 amended by adding after paragraph (2) of Code Section
1-16 31-7-71, relating to definitions, the following:
1-17 "(2.1) 'Controlled corporation' means any private
1-18 corporation, whether a nonprofit or for profit
1-19 corporation, over which a hospital authority exercises
1-20 control because a majority of the members of the board
1-21 of directors of that corporation are:
1-22 (A) Members of that hospital authority;
1-23 (B) Subject to appointment by that hospital authority;
1-24 or
1-25 (C) Constituted as provided in subparagraphs (A) and
1-26 (B) of this paragraph."
SECTION 2.
1-27 Said article is further amended by adding after subsection
1-28 (c) of Code Section 31-7-72, relating to creation of such
1-29 authorities, the following:
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LC 11 8884S/5
2- 1 "(c.1) Any member appointed to a hospital authority may be
2- 2 removed from such office for any of the following:
2- 3 (1) Inability or neglect to perform the duties required
2- 4 of members;
2- 5 (2) Incompetence;
2- 6 (3) Dishonest conduct;
2- 7 (4) Conviction of a crime involving moral turpitude;
2- 8 (5) Failure to attend three consecutive regular meetings
2- 9 of the authority;
2-10 (6) Any violation of Code Section 31-7-74.1.
2-11 (c.2) A member of a hospital authority may be removed from
2-12 office for any reason specified in subsection (c.1) of
2-13 this Code section if a resolution providing for such
2-14 authorization or removal is either:
2-15 (1) Initiated by the county or municipal governing
2-16 authority or other entity which nominated such member to
2-17 the hospital authority and is approved by each other
2-18 entity which is required to approve such nomination; or
2-19 (2) Approved by the county or municipal governing
2-20 authority or other entity which appoints directly,
2-21 without nomination, the member in question.
2-22 The procedure for approving a resolution under this
2-23 subsection shall be substantially the same as required for
2-24 approving the appointment of the member in question.
2-25 (c.3)(1) A resolution providing for removal from office
2-26 of a member of a hospital authority may not be approved
2-27 unless it specifies the grounds under which removal is
2-28 sought under subsection (c.1) of this Code section and
2-29 the factual circumstances relating thereto. If such
2-30 resolution is approved as provided in subsection (c.2)
2-31 of this Code section, the removal shall not become
2-32 effective until written notice thereof is provided to
2-33 the authority member sought to be removed and until that
2-34 person is provided an opportunity for a hearing upon
2-35 such removal.
2-36 (2) A hospital authority member notified of approval of
2-37 a removal resolution regarding that member shall have 15
2-38 days after receiving such notification to file a
2-39 petition in the superior court of any county for which
2-40 that hospital authority was created or in which is
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LC 11 8884S/5
3- 1 located the municipality for which that authority was
3- 2 created. If the petition is not timely filed, the
3- 3 removal shall become effective the sixteenth day
3- 4 following receipt of such notification by the person.
3- 5 (3) Upon the timely filing of any petition under
3- 6 paragraph (2) of this subsection, the judge of the
3- 7 superior court shall set a hearing to inquire into the
3- 8 merits of the removal resolution no sooner than ten days
3- 9 nor later than 30 days from the date of filing. The
3-10 hearing may be continued in the discretion of the judge,
3-11 on motion of any party.
3-12 (4) At each hearing held as provided in paragraph (3) of
3-13 this subsection the judge, sitting without a jury, shall
3-14 inquire into and determine whether the removal of an
3-15 authority member is authorized under this subsection.
3-16 After giving all parties an opportunity to be heard, the
3-17 judge shall determine, based on the evidence presented,
3-18 whether the clear and convincing weight of the evidence
3-19 is that the authority member met one or more of the
3-20 grounds for removal specified in subsection (c.1) of
3-21 this Code section. In the event the judge so
3-22 determines, the judge shall order the immediate removal
3-23 from office of such member; otherwise, the petition
3-24 shall be dismissed and the removal may not become
3-25 effective.
3-26 (5) Vacancies created by removal from office shall be
3-27 filled in the same manner provided in this Code section
3-28 for the initial appointment of members of the
3-29 authority."
SECTION 3.
3-30 Said article is further amended by striking Code Section
3-31 31-7-74, relating to qualifications of members, and
3-32 inserting in its place the following:
3-33 "31-7-74. (Index)
3-34 (a) The members of a hospital authority shall be residents
3-35 of the participating units comprising the authority. The
3-36 requirement of residence shall not apply to authorities
3-37 activated under subsection (d) of Code Section 31-7-72,
3-38 provided they are selected from within the area of service
3-39 and within 12 miles of the hospital location or within 12
3-40 miles of the sponsoring county or municipality, whichever
3-41 is farther. The members shall elect one of their number
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LC 11 8884S/5
4- 1 as chairman chairperson and another as vice-chairman
4- 2 vice-chairperson and shall also elect a
4- 3 secretary-treasurer, who need not be a member. The
4- 4 members shall receive no compensation for their services,
4- 5 either as members or as employees of the authority but may
4- 6 be reimbursed for their actual expenses incurred in the
4- 7 performance of their duties or, in the alternative, the
4- 8 members may elect to be reimbursed for such expenses on a
4- 9 per diem basis in an amount not to exceed $100.00 per
4-10 meeting and with the total amount not to exceed $100.00
4-11 per month. The authority shall make rules and regulations
4-12 for its governance and may delegate to one or more of its
4-13 members, officers, agents, or employees such powers and
4-14 duties as may be deemed necessary and proper. (b) The provisions of Code Section 45-10-23 and any other
4-16 Code section shall be deemed to have been complied with
4-17 and an authority may purchase from, sell to, borrow from,
4-18 loan to, contract with, or otherwise deal with any member
4-19 or any organization or person with which any member of an
4-20 authority is in any way interested or involved, provided
4-21 that: (1) Any interest or involvement by such member is
4-23 disclosed in advance to the authority and is recorded in
4-24 the minutes of the authority; (2) No member having a substantial interest or
4-26 involvement may be present at that portion of an
4-27 authority meeting during which discussion of any matter
4-28 is conducted involving any such organization or person;
4-29 and (3) No member having a substantial interest or
4-31 involvement may participate in any decision of the
4-32 authority relating to any matter involving such
4-33 organization or person. As used in this Code section, a 'substantial interest'
4-35 shall mean any interest which reasonably may be expected
4-36 to result in a direct financial benefit to such member as
4-37 determined by the authority, which determination shall be
4-38 final and not subject to review. (c) Nothing contained in this article shall be deemed to
4-40 prohibit any member who is present at any meeting or who
4-41 participates in any decision of the authority from
4-42 providing legal services in connection with any of the
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LC 11 8884S/5
5- 1 undertakings of the authority or from being paid for such
5- 2 services."
SECTION 4.
5- 3 Said article is further amended by adding following Code
5- 4 Section 31-7-74, a new Code section to read as follows:
5- 5 "31-7-74.1. (Index)
5- 6 (a) As used in this Code section, the term:
5- 7 (1) 'Business' means any corporation, partnership,
5- 8 proprietorship, firm, enterprise, franchise,
5- 9 association, organization, self-employed individual,
5-10 trust, or other legal entity.
5-11 (2) 'Family' means spouse and children.
5-12 (3) 'Person' means any person, corporation, partnership,
5-13 proprietorship, firm, enterprise, franchise,
5-14 association, organization, or other legal entity.
5-15 (4) 'Substantial interest' means the direct or indirect
5-16 ownership of more than 25 percent of the assets or stock
5-17 of any business.
5-18 (5) 'Transact business' or 'transact any business' means
5-19 to sell or lease any personal property, real property,
5-20 or services on behalf of oneself or on behalf of any
5-21 third party as an agent, broker, dealer, or
5-22 representative and means to purchase surplus real or
5-23 personal property on behalf of oneself or on behalf of
5-24 any third party as an agent, broker, dealer, or
5-25 representative.
5-26 (b) Except as provided in subsections (c) and (d) of this
5-27 Code section:
5-28 (1) No member of the board of an authority;
5-29 (2) No member of the board of directors of a controlled
5-30 corporation of an authority; and
5-31 (3) No administrator or chief executive officer of an
5-32 authority or a controlled corporation thereof
5-33 shall, for such person or on behalf of any for profit
5-34 business, or for any business in which such person or that
5-35 person's family has a substantial interest, transact any
5-36 business with that authority or with a controlled
5-37 corporation of such authority.
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LC 11 8884S/5
6- 1 (c) The prohibition of subsection (b) of this Code section
6- 2 shall not apply to a health care provider licensed to
6- 3 practice professional counseling, social work, marriage
6- 4 and family therapy, chiropractic, dentistry, dietetics,
6- 5 nursing, occupational therapy, optometry, physical
6- 6 therapy, medicine, podiatry, psychology, speech-language
6- 7 pathology, or audiology under Title 43 who may provide to
6- 8 such authority or controlled corporation thereof any
6- 9 personal services authorized to be provided within the
6-10 scope of practice of such person's license.
6-11 (d) The prohibition of subsection (b) of this Code section
6-12 shall not apply to any transaction when the aggregate of
6-13 all such transactions does not exceed $2,500.00 per
6-14 calendar year.
6-15 (e) The provisions of Code Section 45-10-23 shall not
6-16 apply to those persons specified in subsection (b) of this
6-17 Code Section, but the penalties specified in Code Section
6-18 45-10-28 shall apply to a violation of this Code section."
SECTION 5.
6-19 Said article is further amended by designating existing Code
6-20 Section 31-7-75, relating to functions and powers, as
6-21 subsection (a) and inserting immediately thereafter a new
6-22 subsection to read as follows:
6-23 "(b) Notwithstanding the provisions of subsection (a) of
6-24 this Code section, the sale of a hospital owned by a
6-25 hospital authority may not become effective unless a
6-26 majority of the voters voting in each county for which
6-27 such hospital authority was created approves such sale in
6-28 a special election. If a hospital authority seeks to sell
6-29 such hospital, the hospital authority shall transmit a
6-30 resolution to the election superintendent of each county
6-31 for which the hospital authority was created requesting
6-32 that such special election be conducted approving or
6-33 disapproving such sale. Upon receiving such resolution,
6-34 unless prohibited by the federal Voting Rights Act of
6-35 1965, as amended, the election superintendent shall call
6-36 and conduct an election as provided in this subsection.
6-37 The election superintendent of each such county shall
6-38 conduct that election on the earliest date therefor
6-39 permissible under Code Section 21-2-540 and shall issue
6-40 the call and conduct that election as provided by general
6-41 law. The election superintendent of each such county
6-42 shall cause the date and purpose of the election to be
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LC 11 8884S/5
7- 1 published once a week for two weeks immediately preceding
7- 2 the date thereof in the official organ of the county for
7- 3 which that person is such superintendent. The ballot shall
7- 4 have written or printed thereon the words:
7- 5 '( ) YES Shall the sale of the hospital owned by the
7- 6 Hospital Authority of ____________ be
7- 7 ( ) NO approved?'
7- 8 All persons desiring to vote for approval of the sale shall
7- 9 vote 'Yes,' and those persons desiring to vote for rejection
7-10 of the sale shall vote 'No.' If more than one-half of the
7-11 votes cast on such question are for approval of the sale, in
7-12 each county for which the hospital authority was created,
7-13 such sale shall become effective immediately. If the sale
7-14 is not so approved in each such county or if the election is
7-15 not conducted as provided in this subsection, the sale shall
7-16 not become effective and no election to approve such sale
7-17 may be conducted until at least 24 months have elapsed since
7-18 the last such election seeking such sale approval. The
7-19 expense of such election shall be borne by each county for
7-20 which the hospital authority was created which seeks to sell
7-21 its hospital. It shall be the election superintendent's duty
7-22 to certify the result thereof to the Secretary of State."
SECTION 6.
7-23 Said article is further amended by striking paragraph (4) of
7-24 subsection (d) of Code Section 31-7-76, relating to failure
7-25 to perform minimum functions, and inserting in its place the
7-26 following:
7-27 "(4) Failed to make plans for unmet needs of the
7-28 community as authorized by paragraph (22) of subsection
7-29 (a) of Code Section 31-7-75;".
SECTION 7.
7-30 This Act shall become effective upon its approval by the
7-31 Governor or upon its becoming law without such approval.
SECTION 8.
7-32 All laws and parts of laws in conflict with this Act are
7-33 repealed.
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Last Updated on 01/02/97