Office of the Attorney General
State of Mississippi
Re: Charitable contribution by community hospital
Wilkinson, Williams, Kinard, Smith & Edwards
P.O. Box 1618
Pascagoula, Mississippi 39568-1618
Dear Mr. Williams:
Attorney General Jim Hood has received your opinion request on behalf of Singing River Hospital System in Jackson County, Mississippi, and has assigned it to me for research and reply.
INQUIRY AND RESPONSE
May real property held by the county for the benefit of the board of trustees of a community hospital be titled in the name of such community hospital or community hospital system?
The title may not reflect the board of trustees as the owner, but may show the board of trustees “on behalf of” the county.
Singing River Hospital System (“System”) in Jackson County, Mississippi, is a community hospital system organized and existing pursuant to the applicable laws of the State of Mississippi.
You explain that the System owns several pieces of real property, title to which is currently held in the name of Jackson County. Previously, the county inadvertently conveyed to a third party a piece of such real property. In order to prevent such occurrences in the future, the System would like the county to convey title to the board of trustees all real property currently held by the county for the use and benefit of the System.
APPLICABLE LAW AND ANALYSIS
You cited community hospital statutes Sections 41-13-15(1), 41-13-15(4) and 41-13-35(5)(j) and (o) as support for the proposition that community hospital boards of trustees are authorized to hold title to the real estate comprising the community hospital. Those statutes are set out below.
Section 41-13-15(1) provides in part as follows:
Any county and/or any political or judicial subdivision of a county and/or any municipality of the State of Mississippi, acting individually or jointly, may acquire and hold real estate for a community hospital …
We have recognized community hospitals as being “political subdivisions” for certain specific purposes. See, e.g., MS AG Op., Gore (June 4, 2008) (community hospital is political subdivision for purposes of PERS); MS AG Op., McDonald (February 01, 2008) (for purposes of contracting with county to provide ambulance service). However, neither the community hospital nor the hospital Board of Trustees is a political subdivision within the meaning of 41-13-15(1), but rather is an arm or instrumentality of the county.
The next code section you cite is Section 41-13-15(4), which provides that:
Owners and boards of trustees, acting jointly or severally, may acquire and hold real estate for offices for physicians and other health care practitioners and related health care or support facilities, provided that any contract for the purchase of real property must be ratified by the owner, …
Finally, Section 41-13-35(5)provides that board of trustees are authorized
(j) To let contracts for the construction, remodeling, expansion or acquisition, by lease or purchase, of hospital or health care facilities, including real property, within the service area for community hospital purposes where such may be done with operational funds without encumbrancing the general funds of the county or municipality, provided that any contract for the purchase of real property must be ratified by the owner;
(o) To establish and operate medical offices, child care centers, wellness or fitness centers and other facilities and programs which the board determines are appropriate in the operation of a community hospital for the benefit of its employees, personnel and/or medical staff which shall be operated as an integral part of the hospital and which may, in the direction of the board of trustees, be offered to the general public. If such programs are not established in existing facilities or constructed on real estate previously acquired by the owners, the board of trustees shall also have authority to acquire, by lease or purchase, such facilities and real property within the service area, whether or not adjacent to existing facilities, provided that any contract for the purchase of real property shall be ratified by the owner. The trustees shall lease any such medical offices to members of the medical staff at rates deemed appropriate and may, in its discretion, establish rates to be paid for the use of other facilities or programs by its employees or personnel or members of the public whom the trustees may determine may properly use such other facilities or programs;
These statutes do authorize boards of trustees to “hold” real estate for physician offices and support facilities (41-13-15(4)), to acquire real property for hospital purposes (41-13-35(5)(j)), and to acquire real property for the benefit of employees and personnel (41-13-35(5)(o)). However, these statutes do not provide authority for the board of trustees to hold title to all of the real property held by the county on behalf of the community hospital.
The Supreme Court recently recognized the limited authority of a community hospital board of trustees to act independently of the board of supervisors in Green County v. CMI, Inc., 2009 WL 1477226 (Miss.), issued May 28, 2009 (not yet published). The Court held that the board of trustees had no authority to enter into a sale or long-term lease of the community hospital without the approval of the board of supervisors. In so doing, the Court pointed out that Section 41-13-35(5)(g) grants the Trustees the authority to acquire property, but not the authority to alienate property. That statute authorizes boards of trustees:
To contract by way of lease, lease-purchase or otherwise, with any agency, department or other office of government or any individual, partnership, corporation, owner, other board of trustees, or other health care facility, for the providing of property, equipment or services by or to the community hospital or other entity or regarding any facet of the construction, management, funding or operation of the community hospital or any division or department thereof, or any related activity, including, without limitation, shared management expertise or employee insurance and retirement programs, and to terminate said contracts when deemed in the best interests of the community hospital;
While this statute does authorize the board of trustees to acquire property on behalf of the hospital for the purposes enumerated, we do not believe it authorizes the board of trustees to hold title to the property of the hospital.
With regard to community hospitals, the county is the owner of all of the capital assets, including real property. The board of trustees operates the hospital on behalf of the county. In limited circumstances enumerated by statute, the board of trustees may acquire real property for the benefit of the hospital, but at all times, it does so on behalf of the county and, as per the Supreme Court, may not “alienate” such property without approval by the board of supervisors. Thus, it is our opinion that title to the community hospital’s real property may not be transferred to the board of trustees; however, the title may show ownership in the county for the use and benefit of the hospital board of trustees, or similar language to distinguish it from other non-hospital real property, so as to accomplish your purposes.
If this office may be of further assistance to you, please let us know.
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