HF 5442

as introduced - 93rd Legislature (2023 - 2024) Posted on 05/18/2024 12:47am

A bill for an act
relating to local government; modifying provisions governing the Hennepin
Healthcare System, Inc.; amending Minnesota Statutes 2022, sections 383B.908,
subdivision 7, by adding a subdivision; 383B.922.

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

Section 1.

Minnesota Statutes 2022, section 383B.908, subdivision 7, is amended to read:

Subd. 7.

Dissolution or reorganization of corporation.

new text begin (a) new text end The county board shall
retain the right new text begin , upon a finding of malfeasance of the corporate board, new text end to dissolve the
corporation, reorganize the corporation, or remove the entire corporate board in order to
resume management of Hennepin County Medical Center upon a two-thirds vote of the
entire county board. new text begin The county board must comply with subdivision 8 before taking any
action to dissolve the corporation, reorganize the corporation, or remove the entire corporate
board.
new text end

new text begin (b) For purposes of this subdivision and subdivision 8, malfeasance includes but is not
limited to breach of fiduciary duty, accounting fraud, conflict of interest, antitrust violation,
bribery, corruption, failure to comply with legal obligations, gross negligence or misconduct,
serious violation of ethical duties, or violation of a judicial or administrative order.
new text end

Sec. 2.

Minnesota Statutes 2022, section 383B.908, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Investigation. new text end

new text begin (a) The county board must conduct a formal investigation into
the alleged malfeasance of the corporate board before taking any action to dissolve the
corporation, reorganize the corporation, or remove the entire corporate board. As part of
the formal investigation, the county board must:
new text end

new text begin (1) at least 90 business days before taking any action to dissolve the corporation,
reorganize the corporation, or remove the entire corporate board, provide notice to the
corporate board and to the commissioner of health of the county board's proposed action
and identify the specific acts of malfeasance that constitute grounds for the proposed action;
new text end

new text begin (2) accept a response from the corporate board, within 45 business days after the corporate
board receives the notice and information required under clause (1), to the allegations of
malfeasance. In its response, the corporate board may present any mitigating factors or
defenses to the allegations;
new text end

new text begin (3) accept an analysis, if performed, from the commissioner of health authorized under
paragraph (c), within 45 business days after the commissioner receives the notice and
information under clause (1); and
new text end

new text begin (4) assess the legal and practical implications of the proposed action, including how the
proposed action would affect obligations to creditors, existing contracts, outstanding bond
obligations, accredited programs and services, research and education commitments,
reimbursements, regulatory requirements, and critical statewide services such as the
Minnesota Poison Control System and the emergency preparedness resources hub.
new text end

new text begin (b) Following the formal investigation, the county board must evaluate the results of the
investigation and may implement the proposed action only if it finds there is sufficient
evidence to support a finding of malfeasance by the corporate board to warrant taking the
proposed action.
new text end

new text begin (c) The commissioner of health may, at the request of a member of the corporate board
or on the commissioner's initiative, provide the county board with an analysis of the effects
the proposed action may have on continued access to health care by the community served
by the corporation and on the health of the community served by the corporation.
new text end

Sec. 3.

Minnesota Statutes 2022, section 383B.922, is amended to read:

383B.922 LEGAL COUNSEL new text begin ; GOVERNMENT RELATIONS PERSONNEL new text end .

new text begin Subdivision 1. new text end

new text begin Hennepin County attorney. new text end

With respect to the provisions of section
388.051, the corporation shall be deemed a part of Hennepin County for purposes of the
Hennepin County attorney serving as legal counsel to the corporation; provided, however,
that the corporation and the Hennepin County attorney may enter into an arrangement with
respect to the hiring of outside counsel on behalf of the corporation. The corporation shall
reimburse the county for legal services provided by the Hennepin County attorney, including
any and all costs, and the reimbursement shall be credited to the budget of the Hennepin
County attorney.

new text begin Subd. 2. new text end

new text begin Separate legal counsel and government relations personnel. new text end

new text begin Notwithstanding
subdivision 1, the corporation may opt to hire separate legal counsel and government relations
personnel for legal and legislative matters, and approval from the county board or the
Hennepin County attorney is not required.
new text end