May 24, 2016, Introduced by Senator KOWALL and referred to the Committee on Government Operations.
A bill to amend 1980 PA 350, entitled
"The nonprofit health care corporation reform act,"
by amending sections 653 and 655 (MCL 550.1653 and 550.1655), as
added by 2013 PA 4.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 653. (1) A charitable purpose nonprofit corporation may
be incorporated on a nonstock, directorship basis, under the
nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 450.3192
consistent with this part and, if incorporated under this section,
shall
must be organized to receive and administer funds for the
public welfare. The articles of incorporation must include the word
"Michigan" and the phrase "health endowment fund" in the name of
the fund. As soon as practicable after the incorporation of a fund
under this subsection, the fund shall apply for and make its best
effort to obtain tax-exempt status under section 501(c)(3) of the
internal revenue code of 1986, 26 USC 501.
(2) The articles of incorporation of a fund must provide that
the fund is organized for the following purposes:
(a) Supporting efforts that improve the quality of health care
while reducing costs to residents of this state.
(b) Benefitting the health and wellness of minor children and
seniors throughout this state with a significant focus in the
following areas:
(i) Access to prenatal care and reduction of infant mortality
rates.
(ii) Health services for foster and adopted children.
(iii) Access to healthy food.
(iv) Wellness programs and fitness programs.
(v) Access to mental health services.
(vi) Technology enhancements.
(vii) Health-related transportation needs.
(viii) Foodborne illness prevention.
(ix) Public health emergency.
(c) Awarding grants for a term not exceeding 3 years in
duration for projects that will promote the purposes of the fund.
(d) Subsidizing the cost of individual medigap coverage to
medicare-eligible
Medicare-eligible individuals in this state who
demonstrate a financial need in order to be able to purchase
individual medigap coverage.
(3) The board shall establish a comprehensive and competitive
process to award grants.
(4) The nonprofit corporation act, 1982 PA 162, MCL 450.2101
to 450.3192, applies to a fund. If a provision relating to a fund
under this part conflicts with other state law, this part controls.
(5) If a fund is eligible to receive social mission
contributions under section 220(2), the eligible fund shall
implement a program to disburse money to subsidize the cost of
individual
medigap coverage to medicare-eligible Medicare-eligible
individuals
in this state who demonstrate a financial need in order
to be able to purchase individual medigap coverage. The
commissioner
director of the department of
insurance and financial
services shall develop a means test to be used to determine if a
medicare-eligible
Medicare-eligible individual applicant is
eligible for the medigap coverage subsidy provided for in this
subsection and shall submit the test developed to the attorney
general for approval.
(6) If a fund is eligible to receive social mission
contributions under section 220(2), beginning on the first day of
the third August after the fund receives its initial social mission
contribution, and ending on the thirty-first day of the eighth
December after the fund receives its initial social mission
contribution, the fund shall disburse $120,000,000.00 to subsidize
the
cost of individual medigap coverage purchased by medicare-
eligible
Medicare-eligible individuals in this state, subject to
subsection (5).
(7) A fund is a private, nonprofit corporation organized for
charitable purposes and is not a state agency, governmental agency,
or other political subdivision of this state. Money of a fund is
held by the fund for the purposes consistent with this part and is
not money of this state or a political subdivision of this state
and shall not be deposited in the state treasury. A member of a
board is not a public officer of this state.
Sec. 655. (1) Subject to this section, a fund may disburse
money contributed to the fund each year, not including any
interest, earnings, or unrealized gains or losses on those
contributions, for the purposes of the fund as described in section
653. A fund may expend a portion of the money contributed to the
fund in each year following the initial contribution to the fund
according to the following schedule:
(a) Years 1 through 4, 80%.
(b) Years 5 through 8, 67%.
(c) Years 9 through 12, 60%.
(d) Years 13 through 18, 25%.
(2) On and after the date that the accumulated principal of
money
held by a fund reaches $750,000,000.00, the fund shall must
maintain
that amount $750,000,000.00
for investment to provide an
ongoing income to the fund. On and after the date that the
accumulated principal in the fund reaches $750,000,000.00, the
board shall not allow the accumulated principal of the fund to fall
below
$750,000,000.00 due to because
of expenditures made for the
purposes of the fund as described in section 653.
(3) A fund may expend money received by the fund from any
source in a fiscal year of the fund that is in excess of the amount
required to maintain the accumulated principal goals as described
in subsection (2), not including any interest, earnings, or
unrealized gains or losses on those funds, on the reasonable
administrative costs of the fund and for the purposes of the fund
as described in this part. The investment of fund money and
donations by the fund are under the exclusive control and
discretion of the fund and are not subject to requirements
applicable to public funds.
(4) A fund may invest accumulated principal in the fund only
in securities permitted by the laws of this state for the
investment of assets of life insurance companies, as described in
chapter 9 of the insurance code of 1956, 1956 PA 218, MCL 500.901
to 500.947.
(5) A fund's articles of incorporation or bylaws must provide
for a system of financial accounting, controls, audits, and
reports. The board annually shall have an audit of the fund
conducted by an independent public accountant firm, and the
auditor's audit report and findings shall be submitted to the
board. The expense of an audit required under this subsection is
considered a reasonable administrative cost under subsection (3).
(6) A fund's articles of incorporation or bylaws must require
that the board shall appoint from its members an audit committee
consisting of no fewer than 3 members and for the audit committee
to contract with an independent auditing firm to provide an annual
financial audit in accordance with applicable auditing standards.
(7) The executive director shall do all of the following:
(a) Review and certify external auditor reports.
(b) Make external auditor reports available to the board and
to the general public.
(c) Develop and implement corrective actions to address
weaknesses identified in an audit report.
(8) The articles of incorporation or bylaws of a fund must
require the fund to keep an accurate accounting of all activities,
receipts, and expenditures and annually submit to the board, the
governor, the senate and house of representatives appropriations
committees, and the senate and house of representatives standing
committees on health policy a report regarding those accountings.
(9) A fund and its directors, officers, and employees shall
fully cooperate with any investigation conducted by this state or a
federal agency under its authority under state or federal law, to
do any of the following:
(a) Investigate the affairs of the fund.
(b) Examine the assets and records of the fund.
(c) Require periodic reports in relation to the activities
undertaken by the fund in compliance with applicable law.