Kansas Attorney General Opinion 2015-013

2015-013Kanag

Texte intégral

July 23, 2015
ATTORNEY GENERAL OPINION NO. 2015- 13
The Honorable Don Hill
State Representative, 60th District
1720 Luther
Emporia, KS 66801
RE: 	Counties 	and 	County 	Officers—Hospitals 	and 	Related 	Facilities;
Definitions; Deposit of Hospital Moneys, Transfer of Money to Not-for-
Profit Corporation; Title to Property
Synopsis: 	The board of county commissioners has the authority to establish a county
hospital and an additional hospital or clinic under the Hospital and Related
Facilities Act. 	Such hospital or clinic must be located within the territorial
boundaries of the county. 	The title for the property of the hospital and
clinic is vested in the name of the county where they are located. 	The
board that operates and manages the county hospital cannot use hospital
moneys to fund directly a clinic located outside the territorial boundaries of
the county where the county hospital is located. 	The board also is limited
in the types of hospital moneys that it can transfer to a not-for-profit
corporation and must first determine if such transfer is in the best interests
of the hospital and the residents within the county that the hospital serves.
Cited herein: 	K.S.A. 13-14b01; 13-14b08; 14-693; K.S.A. 2014 Supp. 14-
695; K.S.A. 19-101; K.S.A. 2014 Supp. 19-101a; K.S.A. 19-4601; 19-
4603; 19-4605; 19-4606 K.S.A. 2014 Supp. 19-4608; 19-4610; K.S.A. 19-
4611; 19-4613; 19-4624; 19-4625; 80-2503.
* 	* 	*
Dear Representative Hill:
As State Representative for the 60 th District, you ask for our opinion on several
questions regarding county hospitals. Your questions can be summarized as whether a
county hospital can directly, or indirectly through a not-for-profit corporation, establish,
Representative Hill
Page 2
fund, and operate a clinic located outside of the boundaries of the county's territorial
boundaries; if so, does the title to such clinic vest in the county where the hospital is
located or in the county where the clinic is located.
County hospitals are created and operated under the Hospital and Related Facilities Act
(Act), K.S.A. 19-4601 et seq. 	To answer your questions, we considered several
provisions of the Act. In doing so, we follow the rules used by the courts.
[A] fundamental rule of statutory construction, to which all other rules are
subordinate, [is] that the intent of the legislature governs if that intent can
be ascertained. 	The legislature is presumed to have expressed its intent
through the language of the statutory scheme it enacted. 	. . . 	Courts
ascertain the legislature’s intent behind a particular statutory provision
from a general consideration of the entire act.1
When “construing several statutes and determining legislative intent, several provisions
of an act or acts, in pari materia, must be construed together with a view of reconciling
and bringing them into workable harmony if possible. 	Effect must be given, if possible,
to the entire act and every part thereof.”2
Your questions refer to the authority of the "county hospital." 	However, the Act grants
authority to two different entities—the board of county commissioners (commission) and
the hospital board (board). 	Thus, we must first determine the authority that the Kansas
Legislature granted to the commission and to the board.
The Authority of the Commission and Board
K.S.A. 19-4603 authorizes the commission to establish a county hospital and issue
general obligation bonds after having been "presented with a petition signed by not less
than 5% of the qualified electors of the county requesting the establishment and
maintenance of a hospital." 	The commission "shall adopt a resolution authorizing the
issuance of general obligation bonds for the purpose of constructing, purchasing,
leasing or otherwise acquiring a hospital building or buildings, equipping the same, and
acquiring the necessary site or sites therefor, or for any or all such purposes." 	Then,
the electors of the county must vote on the resolution.3
Once it has created a county hospital, the commission must establish a hospital board. 4
The board is responsible for the management and control of the county hospital 5 and for
the supervision, care, and custody of all hospital property. 6 	The board also has "the
1 McIntosh v. Sedgwick County, 282 Kan. 636, 642 (2006). Internal quotations and citations omitted.
2 State ex rel. Morrison v. Oshman Sporting Goods Co. Kansas, 275 Kan. 763, 768 (2003). 	Internal
quotations and citations omitted.
3 K.S.A. 19-4603.
4 K.S.A. 19-4605(a). The board members can be appointed by the commission or elected by the voters of
the county on a nonpartisan basis. K.S.A. 19-4605(c).
5 K.S.A. 19-4605.
6 Id.
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Page 3
exclusive control of the expenditures of all hospital moneys," except those acquired
through the issuance of revenue bonds. 7 	The board can enter into written leases for
personal property or real property used for hospital purposes. 8
Arguably, the above provisions authorize the board to create a clinic by leasing real and
personal property. 	However, the board's management and control of the hospital must
be consistent with the Act or other state and local laws. 9 	Because other statutes limit
the board's authority over hospital property, we also examine those provisions in the
Act. 10
The title to any real or personal hospital property vests in the county where the hospital
is located. 11 	If the board and the owner of real property cannot agree on the price for
real property that the board desires to use for hospital purposes, the commission may
initiate condemnation proceedings. 12 The authority to close and terminate the operation
of a county hospital rests with the commission after the electors of the county have
approved such closure and termination. 13 	The commission can sell any hospital
property and determine if the board or the county retains the proceeds from that sale.14
More important, K.S.A. 19-4606 provides for the establishment of an additional hospital.
For purposes of the Act, the terms "hospital" and "clinic" are synonymous because the
term "hospital . . . includes within its meaning any clinic."15 	Thus, K.S.A. 19-4606(b)
applies to the establishment of a clinic. It states:
After 	a 	hospital 	has 	been 	established, 	the 	commission 	may 	issue
additional 	general 	obligation 	bonds 	for 	the 	purposes 	of 	constructing,
purchasing or leasing and equipping a new hospital separate and apart
from an existing hospital or an additional hospital, or constructing and
equipping an addition to an existing hospital, or equipping and improving
an existing hospital, or acquiring the necessary site or sites therefor or for
any or all such purposes and for the purpose of paying a portion of the
principal and interest on bonds issued under the authority of K.S.A. 12-
1774, and amendments thereto. 16
7 Id.
8 K.S.A. 19-4611(b) and (c).
9 K.S.A. 2014 Supp. 19-4610(a).
10 McIntosh v. Sedgwick County, 282 Kan. 636, 642 (2006) (the fundamental rule of statutory construction
is that the intent of the legislature governs; to determine the legislative intent of a particular statutory
provision, several provisions of an act must be construed together with a view of reconciling and bringing
them into workable harmony if possible).
11 K.S.A. 19-4624. See also K.S.A. 19-101 second (each county shall be empowered "to purchase and
hold real and personal estate for the use of the county").
12 K.S.A. 19-4613.
13 K.S.A. 19-4625(a).
14 Attorney General Opinion No. 90-102.
15 K.S.A. 19-4601(c).
16 Emphasis added.
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We do not believe the authority in K.S.A. 19-4606 to create an additional clinic is limited
only to instances where the commission issues bonds to create the clinic. 	If it was
limited to such instances, both the commission and the board could create clinics, which
could impair the functioning of both the hospital and clinic. We also note that K.S.A. 19-
4603 has similar language authorizing the issuance of bonds to construct, purchase, or
lease the initial hospital; yet, there is no other provision authorizing the establishment of
the county hospital without the issuance of bonds. Because the Kansas Legislature has
used similar language in K.S.A. 19-4603 and K.S.A. 19-4606, these statutes should not
be interpreted differently. 	Accordingly, K.S.A. 19-4603 and K.S.A. 19-4606 authorize
the commission to create a hospital or a clinic regardless of whether it issues bonds.
Based upon the above analysis, we conclude that K.S.A. 19-4606 grants to the
commission the authority to establish a clinic separate from or in addition to the existing
hospital.
The Authority to Purchase or Lease Property
We now turn to the crux of your concern—does the commission have authority to
purchase or lease property for the purposes of operating a clinic outside the county's
territorial boundaries. "The general rule is that a municipal corporation has no power to
purchase and hold land for a park or other municipal purpose beyond its corporate limits
unless the power has been specially conferred by the Legislature." 17
K.S.A. 19-4606 authorizes the commission to purchase property for hospital purposes.
However, the Act does not include a specific provision authorizing the commission to
purchase or acquire land outside the county's territorial boundaries for the purposes of
establishing a hospital or clinic.
Rather, K.S.A. 19-4624 requires the "[t]itle of any real or personal hospital property [to]
be vested in the county where the hospital is located." 	As noted above, the terms
"hospital" and "clinic" are synonymous. 	If the hospital and clinic were located in
different counties, under K.S.A. 19-4624, the title to the clinic would be different from the
title to the hospital. 	We do not believe the Legislature intended to authorize a
commission to acquire property in another county and thereby impose ownership of that
property onto the other county. 	Thus, we conclude that the commission cannot
purchase property to operate a clinic outside the county's territorial boundaries.
However, K.S.A. 19-4606 also authorizes the commission to lease property for hospital
purposes. 	To determine whether the Legislature authorized the commission to lease
property for the purposes of operating a clinic outside the territorial boundaries of the
17 City of Wichita v. Clapp, 125 Kan. 100, 107 (1928). 	(In response to Clapp, the Kansas Legislature
amended the specific statute governing airports as noted in Wendler v. City of Great Bend, 181 Kan. 753,
767-68 (1957).
Representative Hill
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county, our analysis reads several provisions of the Act and other acts governing
municipal hospitals in pari materia. 18
The Act requires board members to be "residents of the county in which the hospital is
located," 19 but has no provision for adding board members who reside in the area of the
expansion. The Act authorizes the commission, or an elected hospital board, to levy an
annual "tax for the purpose of operating, maintaining, equipping and improving any
hospital managed and controlled under the provisions of this act and for the purpose of
paying a portion of the principal and interest bonds." 20 	Neither the commission nor the
elected hospital board has authority to levy a tax on residents living outside the
territorial boundaries of the county.
By 	contrast, 	other 	statutes 	governing 	municipal 	hospitals 	expressly 	authorize 	the
operation of a hospital outside of the municipality's territorial boundaries. 	For example,
K.S.A. 13-14b01 authorizes a city of first class to issue bonds "for the purpose of
acquiring a site within or without the corporate limits of said city and building and
equipping a hospital thereon," if a majority of electors vote in favor of issuing the
bonds. 21
Similarly, K.S.A. 14-693 authorizes certain second-class cities "for hospital purposes" to
"include territory outside the regular city limits and which territory is not in any hospital
district . . . and such added territory shall be considered within such city only for the
purposes specified in [K.S.A. 14-602 to 14-614], and for the further purposes of this
act." 	The procedure for such expansion includes the adoption of an ordinance by the
city and provides for an election on the expansion question. 	If the expansion is
approved, the city must appoint two persons residing in the added territory to the
hospital's board of trustees; the board must thereafter consist of five trustees, including
two trustees who are residents of the added territory.22
Under K.S.A. 80-2503, any two or more adjoining political subdivisions are "authorized
to join in the establishment of a hospital district and in the acquisition, construction or
reconstruction, improvement, enlargement, remodeling or repairing of a hospital within
such hospital district and in the operation and maintenance of any such hospital."
However, an existing hospital district can only be included in a new hospital district if
approved by a majority of the voters in the existing hospital district. 23
18 Oshman Sporting Goods Co., 275 Kan. at 768 (to determine legislative intent, "several provisions of act
or acts, in pari materia, must be construed together with a view of reconciling and bringing them into
workable harmony if possible").
19 K.S.A. 19-4605 (c).
20 K.S.A. 19-4606(a).
21 The same procedure is used to issue additional bonds "for such purposes, and for the further purpose
of building and constructing an addition to the hospital and furnishing and equipping the same." K.S.A.
13-14b08.
22 K.S.A. 2014 Supp. 14-695.
23 K.S.A. 80-2503(c).
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We also recognize that the Legislature has authorized counties "to exercise the powers
of home rule to determine their local affairs and government."24 	However, counties
cannot use their home rule authority to "exempt from or effect changes in the provisions
of 	K.S.A. 	19-4601 	through 	19-4625 	[the 	Act], 	and 	amendments 	thereto." 25 	This
language means a county cannot use its home rule powers as concurrent supplemental
authority on the basis that the state statute does not expressly prohibit such act; if it
were to do so, the county has effected a change in the state statute and exceeded its
home rule power. 26 	Thus, county hospitals and clinics separate from and in addition to
the existing hospital must be established and operated pursuant to the Act.
By reading the provisions of the Act together, and reading those provisions with the
provisions governing other municipal hospitals, we conclude that the Act does not
authorize the commission to purchase or lease property for the purposes of operating a
hospital 	or 	a 	clinic 	outside 	the 	county's 	territorial 	boundaries. 	Based 	upon 	this
conclusion, your question concerning the title to the real property for the clinic is moot.
The Authority to Provide Hospital Moneys for a Clinic
As noted above, the board has exclusive control over the expenditures of hospital
moneys. 	Accordingly, the next question is whether the board may provide hospital
moneys for the operation of a clinic that is located outside the county's territorial
boundaries.
Hospital moneys includes, "but is not limited to, moneys acquired through the issuance
of bonds, the levy of taxes, the receipt of grants, donations, gifts, bequests, interest
earned on investments authorized by this act and state or federal aid and from fees and
charges for use of and services provided by the hospital." 27 	Hospital moneys are
deemed public moneys. 28 	All moneys received by the hospital, except those acquired
through the issuance of revenue bonds, are allocated to and accounted for in separate
funds or accounts of the hospital. The board may transfer hospital moneys that are not
restricted to specific expenditures to its general fund and use such moneys for the
operation of the hospital or to a special fund for additional equipment and capital
improvements for the hospital. 29 	Here, the hospital moneys would not be used for the
operation of the existing hospital or a clinic that is located in the same county as the
existing hospital.
However, 	the 	Act 	also 	authorizes 	the 	board 	to 	invest 	hospital 	moneys 	"in 	joint
enterprises for the provision of health care services. 30 	A joint enterprise is "a business
undertaking by a hospital and one or more public or private entities for the provision of
24 K.S.A. 19-101Fifth and K.S.A. 2014 Supp. 19-101a(a).
25 K.S.A. 2014 Supp. 19-101a(11).
26 See David v. Board of Norton County Comm'rs, 277 Kan. 753, 756-58 (2004).
27 K.S.A. 19-4601(d).
28 K.S.A. 19-4608(c).
29 K.S.A. 19-4608(d). Emphasis added.
30 K.S.A. 19-4608(c).
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health care services." 	Like the term "clinic," the term "joint enterprises for the provision
of health care services" is synonymous with the term "hospital" because the definition of
"hospital . . . includes within its meaning any . . . joint enterprises for the provision of
health care services operated in connection with the operation" of the hospital. 31 	Thus,
the hospital and the clinic operated by the joint enterprise must be located in the same
county. Otherwise, the board has exceeded its authority in a joint enterprise agreement
with a not-for-profit corporation.
Additionally, because the commission and the board are creatures of statute, they can
only exercise such powers as are expressly conferred upon them or are clearly implied
by 	the 	legislative 	enactment. 32 	As 	discussed 	above, 	the 	Legislature 	gave 	the
commission the authority to establish a clinic separate from or in addition to the existing
hospital but only within the territorial boundaries of the county. 33 	If a board gave
hospital moneys to fund a joint enterprise for the operation of a clinic outside the
territorial boundaries of the county where the existing hospital is located, the board
would be setting out to accomplish indirectly what the Legislature did not authorize it to
do directly. 	This it cannot do. 	The Act expressly requires the board to manage and
control the hospital consistent with the Act and state and local laws. 34
Based 	upon 	the 	above 	analysis, 	we 	conclude 	that, 	under 	the 	current 	statutory
provisions, the board cannot use its hospital moneys to fund a clinic located outside the
territorial boundaries of the county where the existing hospital is located.
The Authority to Provide Hospital Moneys Indirectly for a Clinic
The last question to resolve is whether the board may indirectly provide hospital
moneys for the operation of a clinic outside the county's territorial boundaries through a
not-for-profit corporation. You advise that a county hospital board has formed a not-for-
profit corporation; the board wants to have that corporation own and operate a clinic
outside the county's territorial boundaries. 	You do not provide any information on the
structure and operation of the not-for-profit corporation or the receipt of other funds to
operate the clinic. 	Nevertheless, as discussed above, the Act does not authorize the
board to fund directly a clinic outside of the county's territorial boundaries; thus, this
procedure is questionable because the board would be attempting to do indirectly what
it cannot do directly. Such action would be inconsistent with the Act.
We also point out that the Act places limitations on the transfer of hospital moneys to a
not-for-profit corporation. 	It authorizes the board to only "transfer any moneys or
property a hospital receives by donation, contribution, gift, devise or bequest to a
Kansas not-for-profit corporation" that meets specific criteria. 35 	The board must also
comply with the following provision:
31 K.S.A. 19-4601(a).
32 Weber v. Board of Marshall County Comm'rs, 287 Kan. 1166, 1176 (2009).
33 K.S.A. 19-4606(b).
34 K.S.A. 2014 Supp. 19-4610(a).
35 K.S.A. 2014 Supp. 19-4608(f)(1)-(3).
Representative Hill
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Before making any such transfer, the board shall determine that the
amount of money or the property to be transferred is not required by the
hospital to maintain its operations and meet its obligations. 	In addition,
the board shall determine that the transfer is in the best interests of the
hospital 	and 	the 	residents 	within 	the 	county 	the 	hospital 	has 	been
organized to serve."36
The question of whether a transfer of hospital moneys is in the best interests of "the
residents within the county the hospital has been organized to serve" is a factual
determination made by the board.
Summary
In summary, we make the following conclusions. 	The board of county commissioners
has the authority to establish a county hospital and an additional hospital or clinic under
the Hospital and Related Facilities Act. 	Under current law, such hospital or clinic must
be located within the territorial boundaries of the county. The title for the property of the
hospital and clinic is vested in the name of the county where they are located. 	The
board that operates and manages the county hospital cannot use hospital moneys to
fund directly a clinic located outside the territorial boundaries of the county where the
county hospital is located. The board also is limited in the types of hospital moneys that
it can transfer to a not-for-profit corporation and must first determine if such transfer is in
the best interests of the hospital and the residents within the county that the hospital
serves.
Sincerely,
Derek Schmidt
Attorney General
Janet L. Arndt
Assistant Attorney General
DS:AA:JLA:sb
36 K.S.A. 2014 Supp. 19-4608(g). Emphasis added.

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