CHAPTER 62 SENATE BILL No. 642 An  Act concerning the university of Kansas hospital authority act; amending K.S.A. 2001
Supp. 76-3303, 76-3304, 76-3321 and 76-3322 and repealing the existing sections. Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 2001 Supp. 76-3303 is hereby amended to read as
follows: 76-3303. As used in K.S.A. 2001 Supp. 76-3301 through 76-3323,
and amendments thereto, the following words and phrases have the fol-
lowing meanings unless a different meaning clearly appears from the con-
tent:

      (a) ``Authority'' means the university of Kansas hospital authority cre-
ated by this act.

      (b) ``Board'' means the board of directors of the authority created by
this act.

      (c) ``Health sciences schools'' means the schools of medicine, nursing,
allied health, pharmacy and any other schools operated by the university
of Kansas at the university of Kansas medical center.

      (d) ``Bonds'' means any bonds, notes, lease certificates of participa-
tion or other evidences of indebtedness, whether or not the interest on
which is subject to federal income taxation, issued by the authority pur-
suant to this act.

      (e) ``Hospital assets'' means all records, property or rights in property,
real and personal, tangible and intangible existing on the transfer date
specified by this act, used by or accruing to university of Kansas or the
university of Kansas medical center for the benefit of the university of
Kansas hospital in the normal course of its operations as a teaching, re-
search and medical treatment facility.

      (f) ``Hospital obligations'' means all debts or other obligations, con-
tingent or certain, owing on the transfer date under this act to any person
or other entity, arising out of the operation of the university of Kansas
hospital as a medical treatment facility, and including, without limitation,
all bonds and other debts for the purchase of goods and services, whether
or not delivered, and obligations for the delivery of services, whether or
not performed.

      (g) ``Regents'' means the board of regents of the state of Kansas.

      (h) ``State employee'' means a person employed by the state of Kansas
whether or not a classified or unclassified employee in the state personnel
system. Hospital or authority employees shall not be considered state em-
ployees, as such term is defined in this act or in any other statute or
regulation. The provisions of this subsection are to be construed and ap-
plied retroactively to the date of the original enactment of K.S.A. 2001
Supp. 76-3303, and amendments thereto.

      (i) ``Transfer date'' means a date or dates agreed to by the regents
and the authority which shall be on or after March 1, 1998, but not later
than December 31, 1998, for the transfer of hospital assets to and the
assumption of hospital obligations by such authority.

      (j) ``University of Kansas hospital'' means the hospital and hospital
clinics operated by the university of Kansas, separately or jointly with
another health care provider.

      (k) ``State'' means the state of Kansas.

      (l) ``Initial board'' means the board of directors initially appointed by
the governor under this act.

      (m) ``Medical center employee'' means an employee of the university
of Kansas medical center whose salary is not paid in whole or in part from
the hospital revenue fund.

      (n) ``Hospital or authority employee'' means an employee of the uni-
versity of Kansas medical center authority who performs services for the
university of Kansas hospital as part of one or more departments or other
administrative units of the hospital or otherwise performs services for the
authority and whose salary is paid in whole or in part from by the hospital
revenue fund authority. A hospital authority employee shall not be con-
sidered to be a state employee, as such term is defined in this act or in
any other statute or regulation. The provisions of this subsection are to
be construed and applied retroactively to the date of the original enact-
ment of K.S.A. 2001 Supp. 76-3303, and amendments thereto.

      (o) ``President'' means the chief executive officer of the authority.

      (p) ``This act'' means the university of Kansas hospital authority act.

      Sec.  2. K.S.A. 2001 Supp. 76-3304 is hereby amended to read as
follows: 76-3304. (a) There is hereby established a body politic and cor-
porate, with corporate succession, to be known as the university of Kansas
hospital authority. The authority shall be an independent instrumentality
of this state. Its exercise of the rights, powers and privileges conferred by
this act shall be deemed and held to be the performance of an essential
governmental function.

      (b) The authority shall be governed by a fourteen-member nineteen-
member board of directors. Eight Thirteen of the members shall be rep-
resentatives of the general public who are recognized for outstanding
knowledge and leadership in the fields of finance, business, health-care
management, health care providers, legal affairs, education or govern-
ment. Of the eight 13 members representing the general public, there
shall be at least one member from each congressional district. Three Six
members shall be ex officio voting members consisting of the chancellor
of the university of Kansas, the executive vice chancellor of the university
of Kansas medical center and, the executive dean of the university of
Kansas school of medicine. Three members shall be nonvoting ex officio
members consisting of, the chief of staff of the university of Kansas hos-
pital medical staff, the president of the authority and the dean of the
university of Kansas school of nursing.

      (c) The eight 13 members representing the general public appointed
to the initial board shall be appointed by the governor pursuant to sub-
section (f) and subject to senate confirmation as provided in K.S.A. 75-
4315b, and amendments thereto. Any member whose nomination is sub-
ject to confirmation during a regular session of the legislature shall be
deemed terminated when the senate rejects the nomination. No such
termination shall affect the validity of any action taken by such member
prior to such termination. Of the eight members appointed to the initial
board, two shall be members of the Kansas board of regents and two
members shall be members of the Kansas legislature. The two legislative
appointees shall be appointed by the governor from a panel of four nom-
inees composed of (1) one member of the legislature nominated by the
speaker of the house of representatives, (2) one member of the legislature
nominated by the minority leader of the house of representatives, (3) one
member of the legislature nominated by the president of the senate, and
(4) one member of the legislature nominated by the minority leader of
the senate.

      (d) Of the members appointed to the initial board by the governor,
two members shall be appointed for a term which expires March 15, 1999,
three members shall be appointed for a term which expires March 15,
2000, and three members shall be appointed for a term which expires
March 15, 2001. On the effective date of this act, the terms of the general
public board members then serving on the board shall expire, and, pur-
suant to subsection (f), the governor shall reappoint all such general public
board members. Of the general public members appointed to the board
by the governor under this section, three shall have a term of office of one
year, three shall have a term of office of two years, three shall have a term
of office of three years and four shall have a term of office of four years.
Terms of general public members appointed pursuant to this section shall
expire on March 15. Any general public member whose term expires under
this section and thereafter is reappointed under this section shall be ex-
empt to the requirements of subsection (f) for the term of office appointed
under this section.

      (e) After the initial board of directors is appointed under subsection
(d), members other than ex officio shall be appointed for a term of three
four years each, except in the event of a vacancy the appointment shall
be for the remainder of the unexpired portion of the term. Each member
shall hold office for the term of appointment and until the successor has
been confirmed. Any member is eligible for reappointment, but members
shall not be eligible to serve more than two three consecutive three-year
four-year terms, except that this limitation shall not include any previous
term of office of any general public member serving on the board on the
effective date of this act.

      (f) Except for appointment of the initial board, When a vacancy oc-
curs or is announced regarding a member or members representing the
general public, a nominating committee of the board after receiving input
from the board and conferring with the board shall forward assemble a
slate of candidates not less than two nor more than three persons for each
vacancy and shall forward each slate to the governor for consideration.
Appointment to the board shall be made by the governor subject to senate
confirmation. The governor shall appoint one board member from each
slate and shall forward each appointment to the senate for confirmation
as provided in K.S.A. 75-4315b, and amendments thereto. Except as pro-
vided by K.S.A. 2001 Supp. 46-2601, and amendments thereto, no person
appointed to the board shall exercise any power, duty or function as a
member of the board until confirmed by the senate.

      (g) The terms of members serving by virtue of their office shall expire
immediately upon termination of their holding such office.

      (h) The board annually shall elect one of their number as chairperson
and another as vice-chairperson. The board also shall elect a secretary
and treasurer for terms determined by the board. The same person may
serve as both secretary and treasurer. The board shall establish an exec-
utive committee, nominating committee and other standing or special
committees and prescribe their duties and powers, and any executive
committee may exercise all such powers and duties of the board as the
board may delegate.

      (i) Members of the board of directors of the authority shall serve
without compensation. Members of the board attending meetings of the
board, or attending a subcommittee meeting thereof authorized by the
board, shall be paid subsistence allowances, mileage and all other appli-
cable expenses as provided in K.S.A. 75-3223, and amendments thereto,
provided such expenses are consistent with policies established from time-
to-time by the authority's board of directors and as required by subsection
(j).

      (j) No part of the funds of the authority shall inure to the benefit of,
or be distributed to, its employees, officers or members of the board,
except that the authority may make reasonable payments for expenses
incurred on its behalf relating to any of its lawful purposes and the au-
thority shall be authorized and empowered to pay reasonable compen-
sation for services rendered to or for its benefit relating to any of its lawful
purposes including to pay its employees reasonable compensation.

      (k) Any member of the board of directors other than an ex officio
member may be removed by an affirmative vote of seven 10 of the mem-
bers of the board for malfeasance or misfeasance in office, regularly failing
to attend meetings, or for any cause which renders the member incapable
of or unfit to discharge the duties of director.

      (l) The board shall meet at least six times per year and at such other
times as it deems appropriate, or upon call by the president or the chair-
person, or upon written request of a majority of the directors. The board
may adopt, repeal and amend such rules, procedures and bylaws, not
contrary to law or inconsistent with this act, as it deems expedient for its
own governance and for the governance and management of the author-
ity. A majority of the total voting membership of the board shall constitute
a quorum for meetings. The board may act by a majority of those at any
meeting where a quorum is present, except upon such issues as the board
may determine shall require a vote of seven 10 members for approval.
The initial board shall meet for the initial meeting upon call by the chan-
cellor of the university of Kansas who shall act as temporary chairperson
until officers of the board are elected pursuant to subsection (h).

      (m) The board shall appoint a president who shall serve at the plea-
sure of the board. The president shall serve as the chief executive officer
of the authority. The president's salary shall be set by the board. The
board may negotiate and enter into an employment agreement with the
individual selected as president of the authority which may provide for
compensation allowances, benefits and expenses as may be included in
such agreement. The president shall direct and supervise administrative
affairs and the general management of the authority. The president shall
be a nonvoting ex officio member of the board. The president, as a mem-
ber of the board of directors, may not vote on such president's salary.

      (n) The board may provide to the president of the authority and other
employees designated by the board supplemental benefits in addition to
the benefits provided in K.S.A. 2001 Supp. 76-3322, and amendments
thereto.

      (o) The authority shall continue until terminated by law, except that
no such law shall take effect so long as the authority has bonds outstand-
ing, unless adequate provision has been made for the payment or retire-
ment of such debts or obligations. Upon any such dissolution of the au-
thority, all property, funds and assets thereof shall be vested in the state,
university of Kansas medical center or other hospital entity as designated
by the board and approved by act of the Kansas legislature.

      Sec.  3. K.S.A. 2001 Supp. 76-3321 is hereby amended to read as
follows: 76-3321. The authority is exempt from the provisions of K.S.A.
12-1675 through 12-1677, 45-401 through 45-413, 75-1250 through 75-
1270, 75-2925 through 75-2975, 75-3701 through 75-37,119, 75-4363, 75-
4701 through 75-4744, and 77-501 through 77-550 and K.S.A. 2001 Supp.
75-4362 and amendments thereto.

      Sec.  4. K.S.A. 2001 Supp. 76-3322 is hereby amended to read as
follows: 76-3322. The authority shall affiliate with the Kansas public em-
ployees retirement system on the transfer date as defined in K.S.A. 2001
Supp. 76-3303 and amendments thereto, in accordance with the provi-
sions of K.S.A. 74-4910 and 74-4927 and amendments thereto for current
and future employees with respect to transferred employees. The Not-
withstanding the provisions of K.S.A. 74-4910, and amendments thereto,
the authority may, at the election of the board, affiliate with the system
with respect to any or all employees employed by the authority after the
transfer date, except that the authority, with respect to any employee who
is enrolled in the system after the transfer date, may not change such
employee's membership status retroactively. Any person who was an em-
ployee of the university of Kansas medical center and a member of the
system on the transfer date and whose employment is transferred to the
authority as provided in the university of Kansas hospital authority act
shall continue to be a member of the system. For all those members of
the faculty and other persons employed by the board of regents who were
receiving assistance in the purchase of retirement annuities as provided
in K.S.A. 74-4925 and amendments thereto on the transfer date and
whose employment is transferred to the authority as provided in the uni-
versity of Kansas hospital authority act, the authority shall at the election
of the board, either (1) assist such employees in the purchase of retire-
ment annuities as provided in K.S.A. 74-4925 and amendments thereto
or (2) adopt, in accordance with requirements of the federal internal
revenue code, retirement plans sponsored by the authority providing sub-
stantially similar benefits as such retirement annuities and the authority
shall continue to provide the insured death and disability benefits as pro-
vided in K.S.A. 74-4927a and 74-4927g and amendments thereto. For
future employees employed by the authority on or after the transfer date,
the authority shall designate whether such employee shall be a member
of the system or whether the authority shall either (1) provide assistance
in the purchase of retirement annuities as provided in K.S.A. 74-4925 and
amendments thereto adopt, in accordance with requirements of the fed-
eral internal revenue code, a retirement plan or plans sponsored by the
authority providing substantially similar benefits as such retirement an-
nuities. The authority shall continue to provide the insured death and
disability benefits as provided in K.S.A. 74-4927a and 74-4927g and
amendments thereto with respect to transferred employees who are mem-
bers of the system. The authority, at the election of the board, may provide
death and disability benefits as provided in K.S.A. 74-4927a and 74-4927g
and amendments thereto with respect to other transferred employees and
employees hired after the transfer date or the authority may provide sim-
ilar death and disability benefits to such employees. For employees em-
ployed by the authority on or after the transfer date, the authority, at the
election of the board, either may (1) enroll such employees as member of
the system, or (2) provide that such employee shall be eligible for partic-
ipation in a retirement plan or plans sponsored by the authority. 
Sec.  5. K.S.A. 2001 Supp. 76-3303, 76-3304, 76-3321 and 76-3322
are hereby repealed.

      Sec.  6. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved April 9, 2002.
 Published in the Kansas Register April 18, 2002.
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