In this subtitle the following words have the meanings indicated. “Medical System Corporation” means the University of Maryland Medical System Corporation or, at the Medical System Corporation’s option, a subsidiary or affiliate of the Medical System Corporation. “Montebello” means the Montebello Center. “Montebello assets” means all assets allocated to Montebello as shown on the financial statements of Montebello at the transfer date and as more particularly or additionally identified or supplemented by the Medical System Corporation and approved by the Board of Public Works and transferred to the Medical System Corporation and includes: All land, buildings, and other real property at the Montebello site owned by the State, with the exception of the Maryland Rehabilitation Center; All accounts receivable for patient care services rendered by Montebello regardless of when the patient care services were rendered; and All personal property at the Montebello site owned by the State except for personal property owned by the Department of Education or the University of Maryland, Baltimore Campus. “Montebello liabilities” means only liabilities arising from agreements or contracts entered into before the transfer date in the ordinary course of business by the Medical System Corporation on behalf of Montebello under the Medical System Corporation’s management of Montebello and which are allocated to Montebello as shown on the financial statements of Montebello at the transfer date. “Montebello liabilities” includes liabilities whenever asserted, incurred, or arising in connection with Montebello before the transfer date to the extent they are covered by professional liability or general liability insurance obtained by the Medical System Corporation before the transfer date. “Montebello liabilities” does not include any liabilities whenever asserted, incurred, or arising in connection with Montebello University employees or their employment by the University System of Maryland prior to the transfer date. “Montebello site” means the real property owned by the State, a campus located in Baltimore City, on which Montebello and other State-owned facilities are located. “Montebello University employees” means those employees of the University System of Maryland who work at Montebello and who are paid by the Medical System Corporation. “Transfer date” means any date determined by the Board of Public Works and filed with the Secretary of State and the Department of Legislative Services.

The Maryland Department of Health shall negotiate with the Medical System Corporation the transfer to the Medical System Corporation of the Montebello assets as a grant without consideration. If the Board of Directors of the Medical System Corporation and the Board of Public Works, in their discretion, approve the transfer, on the transfer date the Board of Public Works, Maryland Department of Health, and any other required State department, agency, or body shall take all legal action necessary to transfer, as a grant without consideration, the Montebello assets to the Medical System Corporation. If the Board of Directors of the Medical System Corporation and the Board of Public Works, in their discretion, determine that the ownership of Montebello assets cannot be legally transferred on the transfer date, ownership shall be transferred as soon as practicable after it is legal to do so. In any event, provisions shall be made, by lease or other arrangement, for the Medical System Corporation to have control and use of all Montebello assets on and after the transfer date. For so long as rehabilitation or chronic care services are provided and payment or reimbursement for uncompensated care covers the cost of providing such services to the historic Montebello service population, the Medical System Corporation may not cease providing such services to that population. The approval of the transfer by the Board of Public Works shall constitute a conclusive determination that the transfer is in compliance with this subtitle. The Maryland Department of Health shall issue a special hospital–chronic license and a special rehabilitation hospital license to the Medical System Corporation for Montebello on the transfer date. Each license shall be for the same number of beds as licensed to Montebello immediately before the transfer date, less 102 beds licensed in the special–chronic licensing category which shall remain licensed to the Maryland Department of Health. The licenses issued to the Medical System Corporation shall remain effective until the expiration of the most recent accreditation by the applicable accreditation commission, provided the facility continues to be operated in accordance with the requirements of §§ 19–319(d), (e), (f), and (g) and 19–327 of the Health – General Article. Notwithstanding any other statutory provision or regulation to the contrary, the transfer of assets from Montebello to the Medical System Corporation and the issuance of licenses to the Medical System Corporation shall not require a certificate of need. The Medical System Corporation shall have all powers of a Maryland corporation not expressly limited by this subtitle to convey, lease, mortgage, encumber, and otherwise control the Montebello assets. However, and without in any way limiting the power to mortgage or otherwise encumber the property, before the Medical System Corporation may sell any land, buildings, or other real property transferred on the transfer date for any use other than operation as a rehabilitation facility, a chronic care facility, or both, it shall first offer the land, buildings, and other real property to the State as a grant without consideration. This subsection may not be interpreted as limiting the ability of a lender: To foreclose or recover on any lien on any Montebello assets; or To sell or otherwise transfer the Montebello assets subject to the lien.

On the transfer date, the Medical System Corporation shall take all legal action necessary to assume the Montebello liabilities, but only to the extent expressly provided in this subtitle. The Medical System Corporation is not liable for any other debts, obligations, or liabilities of the State, the Maryland Department of Health, or the University incurred or arising in connection with Montebello prior to the transfer date. This assumption of liabilities shall be an assumption of the liabilities as they exist on the transfer date. This subsection shall be construed and applied to give effect to all provisions of law and defenses applicable to the liabilities prior to the transfer date. On the transfer date, the Medical System Corporation shall assume responsibility for those claims arising from the employment of Montebello University employees which relate to or arise from events occurring after the transfer date. Nothing contained in this subtitle shall be deemed or construed to waive or abrogate in any way the sovereign immunity of the State or to deprive the State or any officer or employee thereof of sovereign immunity.

This section shall be effective only if the transfer, lease, or other transfer arrangement authorized by this subtitle occurs. On January 1, 1993, all Montebello University employees shall become employees of the Medical System Corporation. A Montebello University employee may, at his or her option, become an employee of the Medical System Corporation before January 1, 1993. On or before January 1, 1993, any Montebello University employee who wishes to transfer to a classified service position of the State shall be treated for purposes of the transfer as if the transfer were in accordance with former Article 64A, § 31 of the Code. This section may not be construed to confer bumping rights to these employees. The Medical System Corporation shall permit continuation of State employee organizations to represent former Montebello University employees and to collect dues. The value of any unused annual leave accrued by the Montebello University employees shall be computed as of the transfer date, and the State shall pay the Medical System Corporation the value of that leave. Upon the request of an employee, the Medical System Corporation shall pay each Montebello University employee the value of such leave, permit each Montebello University employee to take such leave, or permit a combination of pay for such leave and use of such leave. In no event may a Montebello University employee, whether transferring to a University System of Maryland position outside of Montebello, a State position, or a Medical System Corporation position or leaving for a position elsewhere, not receive time off, credit for future time off, or pay for such unused annual leave accrued as of the transfer date and still unused and unpaid as of the date of transfer to another University System of Maryland position or to a State position or as of the date of departure from Montebello. If a Montebello University employee transfers to a University System of Maryland position outside of Montebello or to a State position before being paid for or using annual leave accrued as of the transfer date, the Medical System Corporation shall transfer funds to the University System of Maryland or to the State, as appropriate, equal to unpaid accrued annual leave. The payment of any settlement or judgment against a State officer or employee incurred or arising in connection with Montebello prior to the transfer date which is not a Montebello liability shall be determined in accordance with § 12-404 of the State Government Article, and, if the Board of Public Works determines to make a payment to satisfy the settlement or judgment, the payment shall be made only from the State General Emergency Fund or the State Insurance Trust Fund. The Medical System Corporation shall designate legal counsel to represent Montebello University employees determined by the Attorney General to be entitled to legal representation in accordance with § 12-304 of the State Government Article, with respect to acts or omissions in the course of services related to Montebello on or after the transfer date. The Attorney General shall not be responsible for representing the individual for acts or omissions on or after the transfer date. The Medical System Corporation shall be responsible for paying any settlements and judgments approved by the Board of Public Works, in accordance with § 12-404 of the State Government Article, with respect to acts or omissions on or after the transfer date. If the Board of Public Works determines, as provided in the State Government Article, that any Montebello University employee shall be reimbursed for the cost of defending a criminal claim relating to actions on or after the transfer date in the course of services related to Montebello, the Medical System Corporation shall fund the reimbursement.

This section shall be effective only if the transfer or lease authorized by this subtitle occurs. This section shall be void if the Medical System Corporation no longer operates Montebello. The Medical System Corporation shall cause annual audited financial statements for Montebello to be prepared and filed with the Governor and the Joint Audit and Evaluation Committee as soon as practicable following the close of each fiscal year. The Medical System Corporation shall submit with the annual audited financial statements for Montebello a report on the amount of uncompensated care provided at Montebello for the fiscal year. In recognition of the provision of uncompensated care by Montebello and to assist with the capital financial needs of Montebello specified as part of the transfer under § 13–402 of this subtitle, the State shall pay the Medical System Corporation: In fiscal year 1993, $6,129,942; In fiscal year 1994, $5,500,000; In fiscal year 1995, $5,000,000; In fiscal year 1996, $5,000,000; In fiscal year 1997, $5,000,000; and In each fiscal year thereafter, an amount jointly agreed upon by the Maryland Department of Health and the Medical System Corporation and calculated to enable the Medical System Corporation to continue to provide uncompensated care by Montebello and to assist with the capital financial needs of Montebello specified as part of the transfer under § 13–402 of this subtitle. If the Health Services Cost Review Commission sets rates for services rendered at Montebello, then the Governor shall include in the budget bill each year an appropriation to the Medical System Corporation equal to the difference between the pension costs for Montebello University employees and employees of the Medical System Corporation working at Montebello and participating in the State Retirement and Pension Systems and the pension costs permitted by the Health Services Cost Review Commission in the rates for Montebello. The Health Services Cost Review Commission may not set rates for the services rendered at Montebello until: State law authorizes the State Medical Assistance Program to reimburse the Medical System Corporation at commission rates for services rendered at Montebello; and The United States Department of Health and Human Services agrees to accept commission rates as a method of providing federal financial participation in the State Medical Assistance Program.