Requires Filing

Notice, Oversight or Filing of Hospital Conversions

Regulatory Action: REQUIREMENT

16 states have FILING regulations

AL AK AZ AR CA CO CT DE FL GA

HI ID IL IN IA KS KY LA ME MD

MA MI MN MS MO MT NE NV NH NJ

NM NY NC ND OH OK OR PA RI SC

SD TN TX UT VT VA WA WV WI WY

AZ Code § 10-11253

REGULATORY BODY: Other

STATUTE TEXT: 10-11253. Public hearing; notice; requirements; summary report A. No later than ninety days before the anticipated closing of the intended transaction, any nonprofit health care entity that intends to engage in any of the transactions described in section 10-11252, subsection A shall give written notice to the director of the department of health services and the attorney general. The written notice shall include all of the following information: 1. The names, addresses and telephone numbers of the parties to the intended transaction. 2. The names, addresses and telephone numbers of the attorneys or other persons who represent the parties in connection with the intended transaction. 3. A general summary of the intended transaction. 4. A general description of the assets involved in the intended transaction and the intended use of the assets after the closing of the intended transaction. 5. A general summary of all collateral transactions that relate to the intended transaction, including the names, addresses and telephone numbers of the parties involved in the collateral transactions. 6. The anticipated date of completion of the intended transaction. B. The notice and information required pursuant to subsection A of this section and information submitted pursuant to subsection H of this section are public records. C. Within thirty days after the nonprofit health care entity sends the written notice prescribed in subsection A of this section, the parties to the intended transaction shall: 1. Select a hearing officer to conduct the public hearing required by this section and determine a time and place within this state for the public hearing with the agreement of the director of the department of health services. 2. Publish a notice of the time and place for the public hearing at least three consecutive times in at least one newspaper of general circulation in the county in which the nonprofit health care entity has its principal place of business. D. The hearing officer shall hold the public hearing within ten days after the last publication of the public notice. E. The purpose of the public hearing is to provide the information described in subsection F of this section and to receive comments from the public and other interested parties. F. The parties shall present written summary information at the public hearing that sets forth all of the following: 1. The extent to which the intended transaction impacts community benefit activities and is consistent with community benefit purposes, including a description of the resources that will be committed to community benefit purposes following the intended transaction. 2. Whether the intended transaction creates or has the likelihood of creating an adverse effect on the access to or availability or cost of health care services. 3. Whether any director, officer, agent or employee of the entity will receive any community benefit asset or will benefit directly or indirectly from the intended transaction, except for the receipt of compensation for professional services relating to the intended transaction for normal compensation for services rendered. 4. The extent to which the nonprofit health care entity used due diligence in the selection of the entity that will receive any community benefit asset and in the negotiation of the price and other terms and conditions of the transaction. 5. The extent to which the parties will continue to use the nonprofit health care entity’s community benefit assets for community benefit purposes following the intended transaction, or, if applicable, the proceeds of the disposition of the assets will be deposited in a community benefit organization for community benefit purposes. 6. Whether any initial board of directors members of any entity changed or created by the intended transaction will reside in or near the communities affected by the intended transaction. 7. That any community benefit organization established to hold the proceeds of the disposition of assets is organized for community benefit purposes as required under federal and state law. G. The attorney general may present information at the public hearing. H. The hearing officer conducting the public hearing shall compile a summary report of the public hearing proceedings and shall transmit the summary report, a notice of completion and copies of all written information presented at the hearing to the director of the department of health services and the attorney general. I. The parties to the intended transaction shall pay for all costs associated with the hearing officer, notice, publication of notice, public hearing and summary report.

NOTES: A.R.S. § 10-11253

CT Code § 19a-486i

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: FTC and U.S. DOJ, C.G.S. § 19a-486i

FL Code § 155.40

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Fla. Stat. Ann. § 155.40

GA Code § 14-3-1005

REGULATORY BODY: Other

STATUTE TEXT: A corporation amending its articles shall deliver to the Secretary of State for filing articles of amendment setting forth: (1) The name of the corporation; (2) The text of each amendment adopted; (3) The date of each amendment’s adoption; (4) If approval of members was not required, a statement to that effect and a statement that the amendment was approved by a sufficient vote of the board of directors or incorporators; (5) If approval by members was required, a statement that the amendment was duly approved by the members in accordance with the provisions of Code Section 14-3-1003; and (6) If approval of the amendment by some person or persons other than the members, the board, or the incorporators is required pursuant to Code Section 14-3-1030 or 14-3-1041, a statement that the approval was obtained.

NOTES: Ga. Code Ann. § 14-3-1005

HI Code § 432C-2

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Insurance commissioner, HRS § 432C-2

MD Code § 6.5-102

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Md. Code Ann., State Gov’t § 6.5-102, Md. Code Ann., State Gov’t § 6.5-101: “‘Regulating entity’ means: (1) for an acquisition of a nonprofit hospital, the Attorney General in consultation with the Department; (2) for an acquisition of a nonprofit health service plan, the Administration; and (3) for an acquisition of a nonprofit health maintenance organization, the Administration.”

MD Code § 6.5-101

REGULATORY BODY: Other

STATUTE TEXT:

MA Code § 8A

REGULATORY BODY: Other

STATUTE TEXT: Section 8A. (a) A corporation may authorize, by vote of two-thirds of its members entitled to vote thereon or, in the case of a corporation having capital stock, by the holders of two-thirds of its capital stock entitled to vote thereon, at a meeting duly called for the purpose, with notice given as provided in section six B, the sale, lease, exchange or other disposition of all or substantially all of its property and assets upon such terms and conditions as it deems expedient, except that no such vote shall be required if such transaction does not involve or will not result in a material change in the nature of the activities conducted by the corporation. (b) The authorization by members of the mortgage or pledge of, or granting of a security interest in, property or assets of a corporation shall not be necessary except to the extent that the corporation’s articles of organization or by-laws provide otherwise. (c) A corporation constituting a public charity shall give written notice to the attorney general not less than thirty days before making any sale, lease, exchange, or other disposition not referred to in subsection (b) of all or substantially all of its property and assets if that sale, lease, exchange or other disposition involves or will result in a material change in the nature of the activities conducted by the corporation, except that no such notice shall be required if a written waiver of such notice is executed by the attorney general before or after such sale, lease, exchange or other disposition. A certificate signed by an officer of the corporation which states that notice was not required, that notice was given, or that notice was waived by the attorney general, with respect to any sale, lease, exchange or other disposition of property by the corporation shall be conclusive in favor of any purchaser, lessee, transferee or other person relying thereon for purposes of determining compliance with the provisions of this subsection. (d)(1) A nonprofit acute-care hospital, as defined in section 25B of chapter 111, or a nonprofit health maintenance organization as defined in chapter 176G shall give written notice of not less than 90 days to the attorney general and to the commissioner of public health if such notice concerns a nonprofit health maintenance organization, before it enters into a sale, lease, exchange, or other disposition of a substantial amount of its assets or operations with a person or entity other than a public charity. No such notice shall be required if a written waiver of such notice is executed by the attorney general. When investigating the proposed transaction, the attorney general shall consider any factors that the attorney general deems relevant, including, but not limited to, whether: (i) the proposed transaction complies with applicable general nonprofit and charities law; (ii) due care was followed by the nonprofit entity; (iii) conflict of interest was avoided by the nonprofit entity at all phases of decision making; (iv) fair value will be received for the nonprofit assets; and (v) the proposed transaction is in the public interest. (2) The attorney general shall assess the entity proposing to receive such assets or operations for reasonable costs related to, and shall expend such amounts for the review of the proposed transaction, as determined by the attorney general to be necessary. Such reasonable costs may include expert review of the transaction, a process for educating the public about the transaction and obtaining public input, and administrative costs. All materials filed by the parties in the course of the attorney general’s review shall be made available for public inspection pursuant to section 10 of chapter 66 and section 7 of chapter 4. (3) The attorney general shall, during the course of his investigation, hold at least one public hearing, in a location convenient to the population served by the nonprofit entity, at which any person may file written comments and exhibits or appear and make a statement. At least 21 days in advance of the public hearing, the nonprofit entity shall publish notice of the hearing in a newspaper of general circulation where the entity is located. The notice shall include the name of the nonprofit entity, the name of the acquirer, or other parties to the proposed transaction, the nature of the proposed transaction and the anticipated consideration that will be paid by the acquirer. In addition, the notice shall offer to provide to any person upon request to the nonprofit entity a detailed summary of the proposed transaction and copies of all transaction and collateral agreements. As defined in section 7 of chapter 4, compliance with this notice requirement will not require disclosure of confidential trade secret, commercial or financial information contained in schedules or exhibits of those agreements. (4) If a charitable fund results from the transaction, and if the nonprofit entity making the disposition does not continue its operation of a nonprofit hospital or nonprofit health maintenance organization, the governance of the charitable fund shall be subject to review by the attorney general and approval by the court. The governance of the charitable fund shall be broadly based in the community historically served by the predecessor nonprofit acute care hospital or health maintenance organization and shall be independent of the new for-profit entity. The attorney general shall conduct a public hearing in connection with his review of the plan for the governance of the resulting charitable fund. An appropriate portion of any resulting proceeds shall, if determined to be necessary by the attorney general, be used for assistance in the development of a community-based plan for the use of the resulting charitable fund. (5) The entity receiving such assets or operations shall, if determined to be necessary by the attorney general in consultation with the department of public health, provide the funds, in an amount determined by the commissioner of public health, for the hiring by the department of public health of an independent health care access monitor to monitor and report quarterly to the attorney general, the department of public health and the committee on health care on community health care access by the entity, including levels of free care provided by the entity. The funding shall be provided for three years after the transaction. The entity receiving such assets or operations shall provide the monitor with appropriate access to the entity’s records in order to enable the monitor to fulfill this function. To prevent the duplication of any information already reported by the entity, the monitor shall, to the extent possible, utilize data already provided by the entity to the center for health information and analysis under chapter 12C or to any other agency. No personal identifiers shall be attached to any of the records obtained by the monitor and all such records shall be subject to the privacy and confidentiality provisions of section 70E of chapter 111. (6) No officer, director, incorporator, member, employee, staff, physician, expert or advisor of the nonprofit entity making the disposition shall derive improper benefit from the transaction. The officers, directors, incorporators, members, senior managers, staff, physicians, experts and advisors of the nonprofit entity making the disposition shall be prohibited from investing in the for-profit entity for a period of three years following such disposition.

NOTES: Mass. Gen. Laws Ann. ch. 180, § 8A

MT Code § 50-4-707

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Mont. Code Ann. § 50-4-707

NE Code § 71-20

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Neb. Rev. Stat. § 71-20,104

NJ Code § 26:2H-7.11

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: N.J. Stat. Ann. § 26:2H-7.11

NC Code § 58-65-131

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: N.C. Gen. Stat. § 58-65-131

RI Code § 23-17.14-6

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Department of Health, R.I. Gen. Laws Ann. § 23-17.14-6

SD Code § 47-25A-10

REGULATORY BODY: Other

STATUTE TEXT: 47-25A-10. Articles of for-profit conversion. (a) Articles of for-profit conversion must be signed on behalf of the converting corporation by any officer or other duly authorized representative. The articles must set forth:(1) If the surviving corporation is a domestic business corporation, the name of the corporation immediately before the filing of the articles of for-profit conversion and if that name does not satisfy the requirements of the business corporation act, or the corporation desires to change its name in connection with the conversion, a name that satisfies the requirements of the business corporation act;(2) If the surviving corporation is a foreign business corporation, its name after the conversion and its jurisdiction of incorporation; and(3) A statement that the plan of for-profit conversion was duly approved by the members in the manner required by this chapter and the articles of incorporation.(b) If the surviving corporation is a domestic business corporation, the articles of for-profit conversion shall either contain all of the provisions that the business corporation act requires to be set forth in the articles of incorporation of a domestic business corporation and any other desired provisions permitted by the business corporation act, or shall have attached articles of incorporation that satisfy the requirements of the business corporation act. In either case, provisions that would not be required to be included in restated articles of incorporation of a domestic business corporation may be omitted, except that the name and address of the initial registered agent of the business corporation must be included.(c) The articles of for-profit conversion must be delivered to the Office of the Secretary of State for filing.Source: SL 2016, ch 221, ss 25.

NOTES: SDCL § 47-25A-10; SDCL § 47-25A-20

SD Code § 47-25A-20

REGULATORY BODY: Other

STATUTE TEXT: 47-25A-20. Plan of nonprofit conversion. (a) The plan of nonprofit conversion must be adopted by the shareholders. The plan for nonprofit conversion must include:(1) The terms and conditions of the conversion;(2) The manner and basis of reclassifying the shareholders in the corporation;(3) Any desired amendments to the articles of incorporation or bylaws of the corporation following its conversion;(4) The articles of incorporation to be in effect immediately following the conversion; and(5) Any of the terms or conditions of the plan if the change would adversely affect any of the shareholders in any material respect.The plan for nonprofit conversion may also include a provision that the plan may be amended prior to filing articles of nonprofit conversion.(b) After the plan for nonprofit conversion is authorized, the articles of conversion must be signed on behalf of the converting corporation by any officer or other duly authorized representative.The articles shall set forth:(1) The name of the corporation immediately before the filing of the articles of conversion and, if that name is unavailable for use in this state or the corporation desires to change its name in connection with the conversion, a name that satisfies the requirements of ss ss 47-22-7 and 47-22-8.1;(2) The jurisdiction of incorporation of the corporation immediately before the filing of the articles of conversion and the date the corporation was incorporated; and(3) A statement that the conversion of the corporation in this state was duly authorized as required by the laws of this state.(c) The articles of conversion shall contain all of the provisions required to be contained in the articles of incorporation of a nonprofit corporation as set forth in ss 47-22-6 and any other desired provisions permitted to be included. Provisions that would not be required to be included in restated articles of incorporation may be omitted, except that the name and address of the initial registered agent of the domestic business corporation must be included.(d) The articles of nonprofit conversion must be delivered to the Office of the Secretary of State for filing.Source: SL 2016, ch 221, ss 35.

NOTES: SDCL § 47-25A-10; SDCL § 47-25A-20

VT Code § 9420

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Vt. Stat. Ann. tit. 18, § 9420

WA Code § 70.45.060

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Wash. Rev. Code Ann. § 70.45.060

WI Code § 181.1161

REGULATORY BODY: Other

STATUTE TEXT: 181.1161 Conversion. (1) (a) A domestic corporation may convert to another form of business entity if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction that governs the organization of the business entity into which the domestic corporation is converting.(b) In addition to satisfying any applicable legal requirements of the jurisdiction that governs the organization of the business entity into which the domestic corporation is converting and that relate to the submission and approval of a plan of conversion, the domestic corporation shall comply with the procedures that govern a plan of merger under s. 181.1103 for the submission and approval of a plan of conversion. (2) (a) A business entity other than a domestic corporation may convert to a domestic corporation if it satisfies the requirements under this section and if the conversion is permitted under the applicable law of the jurisdiction that governs the business entity.(b) A business entity converting into a domestic corporation shall comply with the procedures that govern the submission and approval of a plan of conversion of the jurisdiction that governs the business entity. (3) A plan of conversion shall set forth all of the following:(a) The name, form of business entity, and the identity of the jurisdiction governing the business entity that is to be converted.(b) The name, form of business entity, and the identity of the jurisdiction that will govern the new business entity.(c) The terms and conditions of the conversion.(d) The manner and basis of converting the shares or other ownership interests of the business entity that is to be converted into the shares or other ownership interests of the new form of business entity.(e) The effective date and time of the conversion, if the conversion is to be effective other than at the close of business on the date of filing the certificate of conversion, as provided under s. 181.0123.(f) A copy of the articles of incorporation, articles of organization, certificate of limited partnership, or other similar governing document of the business entity after conversion.(g) Other provisions relating to the conversion, as determined by the business entity. (4) When a conversion is effective, all of the following shall occur:(a)1. Except with respect to taxation laws of each jurisdiction that are applicable upon the conversion of the business entity, the business entity that was converted is no longer subject to the applicable law of the jurisdiction that governed the organization of the prior form of business entity and is subject to the applicable law of the jurisdiction that governs the new form of business entity.2. If the conversion is from or to a business entity under the laws applicable to which one or more of the owners thereof is liable for the debts and obligations of such business entity, such owner or owners shall continue to be or become so liable for debts and obligations of such business entity, but only for such debts and obligations accrued during the period or periods in which such laws are applicable to such owner or owners. This subdivision does not affect liability under any taxation laws.(b) The business entity continues to have all liabilities of the business entity that was converted.(c) The business entity continues to be vested with title to all property owned by the business entity that was converted without reversion or impairment.(d) The articles of incorporation, articles of organization, certificate of limited partnership, or other similar governing document, whichever is applicable, of the business entity are as provided in the plan of conversion.(e) All other provisions of the plan of conversion apply. (5) After a plan of conversion is submitted and approved, the business entity that is to be converted shall deliver to the department for filing a certificate of conversion that includes all of the following:(a) The plan of conversion.(b) A statement that the plan of conversion was approved in accordance with the applicable law of the jurisdiction that governs the organization of the business entity.(c) The registered agent and registered office, the record agent and record office, or other similar agent and office of the business entity before and after conversion. (6) Any civil, criminal, administrative, or investigatory proceeding that is pending by or against a business entity that is converted may be continued by or against the business entity after the effective date of conversion.History: 2001 a. 44; 2005 a. 476; 2015 a. 295.Next Economy Legislation: Allowing Complex Business Reorganizations. Boucher, Sosnowski, & Nichols. Wis. Law. Aug. 2002.

NOTES: Wis. Stat. Ann. § 181.1161