The West Virginia hospital finance authority is hereby created. The authority is a body corporate and a governmental instrumentality of the state. The exercise by the authority of the powers conferred by this article and the carrying out of its purposes and duties shall be deemed and held to be, and are hereby determined to be, essential governmental functions and for a public purpose.

The authority shall be controlled, managed and operated by the seven-member board known as the West Virginia hospital finance board, which is hereby created. The board shall consist of the director of the state department of health and the State Treasurer as members ex officio of the board. The other five members of the board shall be appointed by the Governor, by and with the advice and consent of the Senate, and shall serve terms of two, three, four, five and six years, respectively. The successor of each such appointed member shall be appointed for a term of six years in the same manner as the original appointments were made, except that any person appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed only for the remainder of such term. No more than three of the appointed board members shall at any one time belong to the same political party. Appointed board members may be reappointed to serve additional terms.

All members of the board shall be citizens of the state. Each appointed member of the board, before entering upon his duties, shall comply with the requirements of article one, chapter six of this code and give bond in the sum of $25,000 in the manner provided in article two, chapter six of this code. The Governor may remove any board member for cause as provided in article six, chapter six of this code. The director of the state department of health and the State Treasurer may each appoint a deputy to serve as a member of the board in their respective absences. Such deputy shall be a person in the office of the director of the state department of health or the State Treasurer, as the case may be, and shall serve at his pleasure.

Four members of the board shall constitute a quorum, and the affirmative vote of four members shall be necessary for any action taken by vote of the board. No vacancy in the membership of the board shall impair the rights of a quorum by such vote to exercise all the rights and perform all the duties of the board and the authority.

Annually, the board shall elect one of its appointed members as chairman and another as vice chairman and shall appoint a secretary-treasurer, who need not be a member of the board. The person appointed as secretary-treasurer, including a board member if he is so appointed, shall give bond in the sum of $50,000 in the manner provided in article two, chapter six of this code.

Members of the board shall not receive compensation for services but shall be entitled to the necessary expenses, including traveling expenses, incurred in the discharge of their duties. Any payments for compensation and expenses shall be paid from the funds of the authority, after appropriations and authorization by the Legislature, and no liability or obligation shall be incurred by the authority beyond the extent to which moneys are available from funds of the authority.

There shall also be a director of the authority appointed by the board.