Arizona Laws 11-1434. Operating agreement; required provisions
A. An operating agreement under this chapter shall include the following provisions:
Terms Used In Arizona Laws 11-1434
- agreement: means an agreement between the sponsoring county and a nonprofit corporation under this chapter for the corporation to assume the health care responsibilities previously performed by the county, including all arrangements and understandings, including a lease agreement, between the county and corporation. See Arizona Laws 11-1401
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- board: means the board of directors of a nonprofit corporation that operates a community health system pursuant to this chapter. See Arizona Laws 11-1401
- Board of supervisors: means the board of supervisors of the sponsoring county. See Arizona Laws 11-1401
- Community health system: means the health system maintained, owned or operated by a nonprofit corporation after the transfer date under this chapter. See Arizona Laws 11-1401
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- corporation: means a nonprofit corporation that is organized under title 10 and that is qualified or will qualify under section 501(c)(3) of the internal revenue code. See Arizona Laws 11-1401
- County health system: means the health system maintained, owned or operated by the sponsoring county immediately before the transfer date. See Arizona Laws 11-1401
- Health system: means any health care institution and all related real and personal property including, without limitation, all clinics, rehabilitation centers, therapy facilities, outpatient clinics, nursing homes, blood banks, ambulance facilities, extended care facilities, dispensaries, pharmacies, parking facilities, laundry facilities, dormitories, offices and administration buildings, cafeterias and food service facilities, research, laboratory and diagnostic facilities, libraries, information systems and data bases, ambulances, stretcher vans and other medical transportation equipment, education facilities, school-based clinics, equipment, tools, machinery, accounts receivable and other intangible assets, health maintenance organizations, health care services organizations and health insurance plans, including all related reserves, deposits, prepayments, risk pools and similar assets of these organizations and plans, graduate medical and other health care professional educational programs, public health education programs and business operations, in each case maintained, owned or operated for the payment and delivery of medical services, nursing services, home health services, home delivery services, emergency medical services, behavioral health services, long-term care services, health-related services and health screening services, adult day health services, adult foster care services, hospice services, personal care services, respite care services, supervisory care services and medical equipment services. See Arizona Laws 11-1401
- Health system assets: means all real, personal, tangible and intangible property and rights in property that are used by or accruing to the county health system. See Arizona Laws 11-1401
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lease agreement: means any agreement providing for the lease and conveyance, if any, of health system assets to a nonprofit corporation under this chapter. See Arizona Laws 11-1401
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Sponsoring county: means a county that enters into an operating agreement under this chapter. See Arizona Laws 11-1401
- Transfer date: means a date, agreed to by the sponsoring county and a nonprofit corporation, for the lease of any health system assets and the assumption of all or part of the health system liabilities by the corporation. See Arizona Laws 11-1401
- Writing: includes printing. See Arizona Laws 1-215
1. The nonprofit corporation‘s assumption of responsibility for managing, maintaining and operating the health system assets that are leased or transferred pursuant to the lease agreement.
2. The nonprofit corporation‘s assumption, beginning on the transfer date, of responsibility for, and responsibility to defend, indemnify and hold the sponsoring county harmless with respect to, all or some liabilities relating to the health system assets that are leased or transferred to the corporation as stated in the lease agreement. This assumption may include liabilities accruing before, on or after the transfer date.
3. An agreement by the nonprofit corporation to continue to provide health care to the public, including indigent persons, as one of its primary missions.
4. The nonprofit corporation’s undertaking, covenants and indemnification to the sponsoring county against all actions, activities and consequences that may arise out of or relate to any actions taken by the nonprofit corporation pursuant to the lease agreement.
B. An operating agreement under this chapter may include provisions requiring the nonprofit corporation to:
1. Obtain the approval of the board of supervisors of any business transaction by the corporation that may materially and adversely affect the sponsoring county’s interests. The agreement shall specify with particularity the type and nature of the transactions that require prior approval of the board of supervisors.
2. Notify the board of supervisors before amending all or part of the corporation’s articles of incorporation or bylaws. The articles of incorporation and bylaws may not be amended to remove the requirement prescribed by subsection A, paragraph 3 of this section.
3. Pay all or part of the costs of the board of supervisors that are related to the conveyance and transition of the county health system to the nonprofit corporation.
4. Provide or continue to provide services and programs to the communities and populations served by the county health system.
C. The sponsoring county and nonprofit corporation may also agree in writing to:
1. Any other arrangements, including indemnifications, that they consider appropriate and prudent with respect to the transition of county health system operations to the corporation.
2. Any other provision that is not inconsistent with this chapter or the operating agreement, including contracts for the provision by the sponsoring county or the nonprofit corporation of goods, services and facilities in support of the community health system.
D. Notwithstanding any other law, at its discretion the sponsoring county may agree to provide grants to the nonprofit corporation.
E. Section 42-17106 does not apply to any promise, undertaking, covenant or agreement that is contained in the operating agreement and that commits a sponsoring county to compensate the nonprofit corporation for performing the county’s primary function of providing health care services to the indigent. Any such promise, undertaking, covenant or agreement is a lawful long-term contract for all purposes of the constitution and laws of this state.