The corporate authorities of any town or city and the county commission of any county may each establish, within the town or city or within the county, hospitals, temporary or permanent, for the reception of the sick or infirm or of persons suspected of having infectious or contagious diseases, and may make all needful rules and regulations for the control and management thereof and may confer by contract upon any institution for the instruction of students of medicine located in the city, town or county in which such hospital is situated, upon such terms and for such number of years as they may determine, the right to select the visiting staff of physicians to such hospital for the collegiate course of each year and to hold clinics on the patients therein and have its students attend such clinics. The corporate authorities and the county commission may unite in the establishment of such hospitals, if deemed expedient, making them common for the use of the town or city and of the county, and in the making of rules and regulations for the control and management thereof and shall jointly have the same powers and authority above conferred upon each.

(a) As used in this section, the following words have the following meanings:

(1) EMPLOYEE. An individual who is a part-time or full-time employee of the long term care facility.

(2) LONG TERM CARE FACILITY. The term includes a skilled nursing facility, intermediate care facility, specialty care assisted living facility or dementia care facility, or an assisted living facility licensed under this chapter.

(b) Each long term care facility in this state shall conduct an immunization program as provided in this section which gives residents the opportunity to be immunized annually against the influenza virus and to be immunized against pneumococcal disease and employees the opportunity to be immunized against influenza virus.

(c) A long term care facility shall notify the resident upon admission of the immunization program provided by this section and shall request that the resident agree to be immunized against influenza virus and pneumococcal disease.

(d) A long term care facility shall document the annual immunization against influenza virus and the immunization against pneumococcal disease for each resident and the annual immunization against influenza virus for each employee, as provided in this section. Upon finding that a resident is lacking the immunizations as provided herein or that an employee has not been immunized against influenza virus, or if the long term care facility is unable to verify that the individual has received the required immunizations, the long term care facility shall provide or arrange for immunization.

(e)(1) The annual immunization and documentation program provided by this section for influenza shall be completed not later than November 30 of each year.

(2) The annual immunization and documentation program provided by this section for pneumococcal disease shall be assessed within 5 days of admission and when indicated.

(f) For an individual who becomes a resident of or who is newly employed by the long term care facility after November 30, but before March 30 of the following year, the long term care facility shall determine the individual's status for the influenza virus required under this section, and if found to be deficient, the long term care facility shall provide the required immunizations.

(g) No individual, resident, or employee, shall be required to receive vaccine under this section if the vaccine is medically contraindicated, if the vaccine is against the individual's religious beliefs, or if the individual refuses the vaccine after being fully informed of the health risks of not being immunized.

(h) The State Board of Health may adopt rules to implement the immunization provisions of this section.

(i) The State Health Officer shall waive the requirements of this section in the event that there is a shortage of vaccine.

(j) The State Board of Health shall make available to long term care facilities educational and informational materials pertaining to the vaccination program provided in this section.

For the purposes of this division, the following terms shall have the meanings respectively ascribed to them by this section:

(1) HOSPITAL CORPORATION. A hospital association heretofore or hereafter organized under and pursuant to the provisions of Act No. 211, General Acts of Alabama 1945, or Article 3 of this chapter, or a hospital board heretofore or hereafter organized under and pursuant to the provisions of Division 1 of this article.

(2) SECURITIES. Notes, bonds, certificates of indebtedness, warrants or other evidences of indebtedness.

(3) PUBLIC HOSPITAL PURPOSES. Such term includes the acquisition by purchase, lease or otherwise and the construction, equipment, operation and maintenance of public hospital facilities or any one or more of such purposes.

(4) PUBLIC HOSPITAL FACILITIES. Such term includes public hospitals, public clinics, public health centers, nurses' homes and training facilities of any kind.

The county commission of any county in which a special tax for public hospital purposes has heretofore been or shall hereafter be authorized at an election held in the county pursuant to the provisions of any amendment to the Constitution shall have the power to designate a hospital corporation in the county as the agency of the county to acquire, construct, equip, operate and maintain public hospital facilities in the county as a whole if the said special tax is a countywide tax or in that portion of the county in which the tax shall have been voted if the said tax is not a countywide tax. Such designation shall be made by a resolution of the county commission, which shall be duly entered upon the minutes of such county commission. A certified copy of such resolution shall be filed with the judge of probate of the county, who shall forthwith receive and record the same. A certified copy of such resolution shall also be forwarded to the State Board of Health. Such designation may contain such terms, conditions and limitations as the county commission may prescribe respecting the hospital facilities that may be acquired, constructed, equipped, operated and maintained by the hospital corporation as such agency of the county and with respect to the maximum principal amount only of securities which may be issued by the hospital corporation; provided, that, anything in such designation to the contrary notwithstanding, such designation shall constitute a contract between the county, the hospital corporation and the holder or holders of any securities issued by the hospital corporation, and such designation shall be irrevocable by the county so long as there shall be outstanding any such securities of the hospital corporation. If any resolution adopted by the county commission pursuant to the provisions of this section fails to specify a particular portion or area of the county in which the hospital corporation shall act as the agency of the county for public hospital purposes, then it will be presumed that the said hospital corporation has been designated in the said resolution to act as such agency in the county as a whole.

When a hospital corporation has been designated as the agency of the county to acquire, construct, equip, operate and maintain public hospital facilities in the county, and without restriction to a particular area or portion of the county in which such corporation is to act as such agency, then the proceeds thereafter collected from any such special tax that is a countywide tax for public hospital purposes shall be paid over to the hospital corporation. When a hospital corporation has been designated as the agency of the county to acquire, construct, equip, operate and maintain public hospital facilities in a particular area or portion of the county, then the proceeds thereafter collected from any special tax for public hospital purposes that may have been voted in the area of the county for which such corporation shall have been so designated as the county's agency shall be paid over to said hospital corporation. Any proceeds from any special tax for public hospital purposes that shall be paid over to a hospital corporation pursuant to the provisions of this section shall be used by that hospital corporation for any one or more of the purposes for which the said tax shall have been voted; provided, that payment of the proceeds of said tax to the said hospital corporation shall be made only to such extent as will not result in the impairment of the obligation of any contract theretofore made with respect to said tax. When any designation by a county of an agency for public hospital purposes shall have been made pursuant to the provisions of this division, the tax collector shall thereafter collect the special tax that is payable to the said agency under the provisions of this division in the same manner and under the same requirements and laws as taxes of the state are collected, shall keep the proceeds of the said tax separate and apart from all other funds, shall keep a clear and distinct account thereof and shall turn the same over to the said hospital corporation, which shall have the duty to receipt therefor.

All elections which have heretofore been held in any county pursuant to the provisions of any amendment to the Constitution for the purpose of authorizing a special county tax for public hospital purposes which said elections resulted in a majority of the votes cast being in favor of the said tax and which said elections were irregular by reason of failure prior to the actual holding of the elections to give notice thereof in a newspaper or by reason of any other irregularity are hereby ratified and confirmed and given effect in all respects as if all provisions of law relating to such elections had been duly and legally complied with, and the said tax may be levied and collected accordingly; provided, that the provisions of this section shall not apply to elections which have been in express terms held and declared illegal by any county commission of a county prior to September 19, 1949.

Every election heretofore held in any county in this state, which has a population of less than 50,000, according to the last federal decennial census, on the question of the levy of a special tax for public hospital purposes under the Constitution of Alabama, including any amendment thereto, at which election a majority of the votes cast were in favor of the levy of the said tax, but which election was irregular by reason of failure prior to the holding of the election to give notice thereof in a newspaper or by posting in the manner or for the time required by any statute applicable to the election, or because of failure to comply with any other statutory requirement applicable to the election or because of any other irregularity with respect to the holding of the election or canvassing and recording the results thereof, shall be, and every such election is hereby, ratified and confirmed and given effect in all respects as if all provisions of law relating to such election have been duly and legally complied with, and the said tax may be levied and collected pursuant to the authorization purported to have been granted at such election; provided, that this section shall not apply to any election which, prior to July 16, 1962, has been in express terms held illegal by the county commission of the county wherein the election was held, by the Supreme Court of Alabama or by final judgment of the circuit court in the county in which the election was held and from which judgment an appeal was not taken to the Supreme Court of Alabama within the time provided by law for the taking of such appeals or to any election the validity of which is an issue in any pending civil action commenced prior to July 16, 1962.

Every election heretofore held in any county in this state submitting to the qualified electors of such county the question of the levy of a special tax for public hospital purposes pursuant to the provisions of Amendment 72 to the Constitution of Alabama at which a majority of the votes cast were in favor of the levy of the said tax, but which was irregular because of failure to comply with the procedural requirements prescribed by general or local election laws applicable thereto or in the call thereof by the county commission of such county, including, but without limiting the generality of the foregoing, any requirements concerning the time and manner of giving notice thereof, canvassing and recording the results thereof or the appointment of election officials therefor, shall be, and every such election hereby is, validated and given effect in like manner as if all such procedural requirements had been duly and legally complied with; provided, that this section shall not apply to any election which, prior to September 12, 1966, has been found to be invalid by the county commission of the county wherein the election was held, or held invalid by a final judgment of any court of competent jurisdiction or to any election the validity of which is at issue in any action pending in a court of competent jurisdiction as of September 12, 1966.

Any hospital corporation may anticipate the proceeds from any special county tax required to be paid to it in accordance with the provisions of this division, by issuing securities for any one or more of the purposes for which the tax shall have been voted, and may pledge for the payment of the principal thereof and interest thereon the annual proceeds from the said tax so paid to it; provided, that if any constitutional provisions applicable to the pledge of the said tax shall restrict the portion of such tax proceeds that may be so pledged, then the hospital corporation shall have the power to pledge only that portion of the said proceeds that may be so pledged without violation of the said constitutional provisions. All securities issued under this division shall be payable from the proceeds of the special tax in respect of which they were issued and from such other funds of the hospital corporation as its directors may determine, but this section shall not prohibit payment of the securities from any other funds which may be available therefor under any other provision of law; provided, that in no event shall such securities be payable from such other funds if the effect thereof would be to subject such securities to any constitutional requirement that they be authorized by vote of the qualified voters. Said securities shall be the obligation only of the hospital corporation issuing the same in accordance with the terms of such securities. No county shall, in any event, be liable for any obligation created by a hospital corporation or by the issuance of securities thereby, nor shall said securities be construed to be an indebtedness of, or against, any county or municipal corporation. All securities issued under this division shall have preference over claims for salaries or other operation expenses or any other purposes. All pledges of the said tax and all contracts made with respect thereto shall take precedence in the order in which they are made and shall create a charge on the proceeds of the said tax prior to the expenses of operation and maintenance of any hospital facilities.

Securities issued under this division may contain such other terms, provisions, conditions, limitations and agreements, not inconsistent with the provisions of this division, as the directors of the hospital corporation issuing the same shall deem advisable, including, but not limited to, a pledge of all or any part of the revenues of the hospital corporation in payment of the securities and a mortgage of all or any part of the property, real or personal, or any interest therein, of the hospital corporation, including the property acquired or to be acquired from the proceeds of the securities being issued, as security for the payment of the principal of and interest on the securities; provided, that no such mortgage or pledge shall be construed so as to permit the foreclosure thereof.

Securities of the hospital corporation may be executed and delivered by it at any time, and from time to time, shall be in such form and denomination and of such tenor and maturities, shall contain such provisions not inconsistent with this division and shall bear such rate or rates of interest payable and evidenced in such manner as may be provided by resolution of the directors of the hospital corporation providing for their issuance. Such securities shall be payable at such place or places, either within or without the state, as shall be prescribed in the resolution of the directors of the hospital corporation providing for their issuance. Such securities, and any interest coupons applicable thereto, shall be executed in such manner and shall be substantially in the form provided for in the authorizing resolution. Any securities issued by any hospital corporation may thereafter, at any time, whether before, at, or after maturity thereof, and from time to time be refunded by the issuance by sale or exchange of refunding securities. All bonds and notes issued by a hospital corporation shall be construed to be negotiable instruments although payable solely from a specified source. All securities issued by a hospital corporation, the income therefrom and all mortgages and other instruments executed as security therefor shall be exempt from all taxation in the State of Alabama.

All securities issued under this division may be sold, either at private or public sale, in such manner, and from time to time, as may be determined by the directors of the hospital corporation issuing the same to be most advantageous. The hospital corporation may pay all expenses, premiums, commissions and attorneys' fees which its directors may deem necessary or advantageous in connection with any financing or proposed financing done by it.

Unless otherwise directed by the court having jurisdiction thereof and by the document which is the source of authority, a fiduciary may, with the exercise of reasonable business prudence, invest trust funds in securities of a hospital corporation for payment of the principal of, and interest on, which the proceeds of any ad valorem, excise, license or privilege tax are pledged.

Securities reciting that they are issued pursuant to the terms of this division shall, in any action or proceeding involving their validity, be conclusively deemed to be fully authorized by this division and to have been issued, sold, executed and delivered in conformity with this division and with all other provisions of law applicable thereto and shall be incontestable, anything in this division or in other statutes to the contrary notwithstanding, unless such action or proceeding is begun before or within 30 days after the day upon which the securities are delivered and paid for, and no irregularity in the proceedings to authorize the issue of securities under this division, nor the omission or neglect of any officer charged with the execution of any duties imposed by this division, shall affect the validity of any securities issued under this division.

The directors of any hospital corporation may, in their discretion, before the issuance of any securities, determine the authority of the hospital corporation to issue such securities, and the legality of all proceedings had or taken in connection therewith and the validity of the tax or other means provided for the payment thereof and the validity of all pledges of revenues and of all covenants and provisions contained in any resolution authorizing the securities in a proceeding instituted and conducted in accordance with Sections 6-6-750 through 6-6-757 as the same may be amended from time to time, or any similar proceeding prescribed by law, but such proceedings shall not be essential to the validity of such securities.

For the purposes of this article, unless otherwise indicated, the following terms shall have the meanings respectively ascribed to them by this section:

(1) AUTHORITY. A corporation organized pursuant to the provisions of this article.

(2) BOARD. The board of directors of the authority.

(3) BOND. Any bond issued under the provisions of this article, including refunding bonds.

(4) COUNTY. That county in which the certificate of incorporation of the authority shall be filed for record.

(5) COUPON. Any interest coupon evidencing an installment of interest payable with respect to a bond.

(6) FISCAL YEAR. A fiscal year of the municipality.

(7) GOVERNING BODY. The council, board of commissioners or other like body in which the legislative functions of the municipality are vested by law.

(8) INDENTURE. A mortgage, an indenture of mortgage, deed of trust or trust indenture executed by the authority as security for any bonds.

(9) LEASE AGREEMENT. Any agreement of lease respecting the project or any part thereof which is made pursuant to the provisions of this article.

(10) MUNICIPALITY. The incorporated city or town in the state which authorized the organization of the authority.

(11) PROJECT. One or more buildings located, or to be located, within the municipality or within its police jurisdiction and designed for use and occupancy as a public hospital, public clinic or public health center and related public health facilities, such as laboratories, outpatient departments, nurses' homes, nurses' training facilities, central service facilities operated in connection therewith and any equipment and lands necessary therefor.

(12) SPECIALLY PLEDGED REVENUES. Any revenues and tax proceeds specially pledged under a lease agreement pursuant to the authorization contained in Section 22-21-140.

(13) STATE. The State of Alabama.

(14) THIS ARTICLE. Any reference in this article to 'this article' shall, unless the context clearly indicates otherwise, be deemed to refer not only to this article, but also to Act No. 109, enacted at the 1961 Regular Session of the Legislature of Alabama, as amended, it being the intention hereof that public corporations heretofore organized under the provisions of said Act No. 109 shall hereafter be governed exclusively by this article and shall have all powers and rights thereby conferred on public corporations organized thereunder.

It is the intention of the Legislature by the passage of this article to empower each incorporated city and town in the state to authorize the incorporation of one or more public corporations as political subdivisions of the state for the purpose of providing public hospital facilities, to invest each corporation organized under this article with all powers that may be necessary to enable it to accomplish such purposes, including the power to lease or operate its properties and to issue Interest-bearing Revenue Bonds, and to grant to the municipality power to rent such public hospital facilities on a year-to-year basis and to pledge tax revenues to secure the rent payable therefor. This article shall be liberally construed in conformity with the said intent.

Whenever any number of natural persons, not less than three, shall file with the governing body an application in writing for permission to incorporate a public corporation under the provisions of this article, if it shall be made to appear to the governing body that each of the said persons is a duly qualified elector of, and property owner in, the municipality and if the governing body shall duly adopt a resolution wherein it shall be declared that it will be wise, expedient and necessary that such a public corporation be formed and that the persons filing such application shall be authorized to proceed to form such public corporation, then the said persons shall become the incorporators of and shall proceed to incorporate the authority in the manner provided in this article. No corporation shall be formed under this article unless the application provided for in this section shall be made and unless the resolution provided for in this section shall be adopted.

(a) The certificate of incorporation of the authority shall state:

(1) The name and address of each of the incorporators, and a statement that each of them is a duly qualified elector of, and property owner in, the municipality;

(2) The name of the authority, which shall be 'The Hospital Building Authority of the (City or Town) of _____,' 'The Hospital Authority of the (City or Town) of _____,' some other name of similar import;

(3) The location of its principal office, which shall be in the municipality;

(4) The number of directors, which shall be three or other uneven number not less than three; and

(5) Any other matter relating to the authority that the incorporators may choose to insert and which shall not be inconsistent with this article or with the laws of the state.

The certificate of incorporation shall be signed and acknowledged by each of the incorporators before an officer authorized by the laws of the state to take acknowledgments of deeds. The form and contents of the certificate of incorporation must be submitted to the governing body for its approval, which shall be evidenced by a resolution duly entered upon the minutes of the governing body.

(b) The certificate of incorporation of the authority may at any time and from time to time be amended so as to change the name of the authority or increase the number of members of the board and to make any other change or addition to the certificate of incorporation deemed desirable by the governing body of the municipality. Any such amendment shall be effected in the following manner: The governing body of the municipality (1) shall adopt a resolution proposing and setting forth the text of such amendment, (2) shall cause such resolution to be published one time in a newspaper published in the municipality (or, in the event there is no newspaper published in the municipality, then in a newspaper published in the county) and (3) shall cause a copy of such resolution to be mailed or otherwise delivered to the authority. The authority shall be entitled to present to the governing body of the municipality, during the period of 30 days following the publication of such resolution, the views of the authority as to the desirability of such proposed amendment. The governing body of the municipality may, at any time after the publication of such resolution, adopt a second resolution either (1) declaring that it does not consider it desirable to make the amendment proposed in the first such resolution and repealing such resolution, or (2) declaring that it does consider it desirable that such amendment be made, again setting forth the text of such amendment and authorizing its filing as hereinafter provided. The governing body of the municipality shall cause such second resolution to be published one time in a newspaper published in the municipality (or, in the event there is no newspaper published in the municipality, then in a newspaper published in the county). The mayor or other chief executive officer and the clerk of the municipality shall, not less than 15 days after the publication of such second resolution, file in the office of the judge of probate of the county a certified copy of such second resolution setting forth the said proposed amendment, which shall become effective upon such filing in said office.

(c) There may be included in the certificate of incorporation of the authority and in any amendment thereto, in addition to the matters specified in the preceding subsections (a) and (b) of this section, provisions requiring the consent of the municipality to the exercise by the authority of any of the powers that are granted or delegated herein to the authority and that would otherwise be exercisable solely by the authority (in which event the certificate of incorporation or amendment thereto shall specify with particularity those of said powers the consent of the municipality to the exercise of which by the authority is necessary) and provisions requiring that one or more of the members of the board (but in no event as many as a majority of the number of the members of the board) be elected by the governing body of the municipality from among three persons nominated for each such place thereon by the county commission or other body in which the legislative functions of the county are vested by law.

The certificate of incorporation, having attached thereto:

(1) A certified copy of the resolution provided for in Section 22-21-133; and

(2) A certificate by the Secretary of State of the State that the name proposed for the authority is not identical with that of any other corporation in the state, or so nearly similar thereto as to lead to confusion and uncertainty, shall be filed in the office of the judge of probate of any county in which any portion of the municipality is located, who shall forthwith receive and record the same. When such certificate of incorporation and attached documents have been so filed, the authority referred to therein shall come into existence and shall constitute a public corporation and a political subdivision of the state under the name set forth in such certificate of incorporation, whereupon the authority shall be vested with the rights and powers granted in this article.

(a) The authority shall have a board of directors composed of the number of directors provided in the certificate of incorporation, as most recently amended. All powers of the authority shall be exercised by the board or pursuant to its authorization. The directors shall be residents of the municipality (except, that any director required to be elected from among persons nominated by the county commission need not be a resident of the municipality, but must be a resident of the county) and shall be elected by the governing body for staggered terms of office. In order to accomplish this purpose, the governing body shall, at the time of the election of the first board, divide the board into three groups containing as near equal whole numbers as possible. The first term of board members included in the first group shall be two years, the first term of the board members included in the second group shall be four years and the first term of the board members included in the third group shall be six years. Upon the expiration of the initial term of each director, each subsequent term shall be six years.

(b) In the event of any increase in the number of members of the board, the new members shall be elected by the governing body for terms as follows:

(1) If the number of board members added is three or more, they shall be divided into three groups containing as near equal whole numbers as possible; and the first term of the new board members included in the first group shall be two years, the first term of the new board members included in the second group shall be four years, the first term of the new board members included in the third group shall be six years, and thereafter the term of each such board member shall be six years;

(2) If the number of board members added is two, the first term of one of such new board members shall be two years, the first term of the other shall be four years, and thereafter the term of each such board member shall be six years; and

(3) If only one board member is added, his first term shall be two years, and thereafter the term of such board member shall be six years.

(c) If any director resigns, dies, becomes incapable of acting as a director or ceases to reside in the municipality, the governing body shall elect a successor to serve for the unexpired portion of this term of office. If, at the expiration of the term of office of any board member, a successor thereto shall not have been elected, then the board member whose term of office shall have expired shall continue to hold office until his successor shall be so elected.

(d) The governing body of any city having a population of not less than 32,000 and not more than 33,500, according to the last or any succeeding federal decennial census, may, in its discretion, by a resolution duly adopted and recorded in its minutes, divest itself of the authority to appoint the members of the board and vest the appointing authority in the board of directors, which said divestiture, once made, shall continue regardless of subsequent change in the population of such city. One certified copy of such resolution shall be filed in the Office of the Secretary of State, one shall be filed with the State Board of Health and one shall be recorded in the office of the judge of probate. In the event such resolution is so adopted and recorded, the board of directors shall become a self-perpetuating board and shall thereafter fill all vacancies occurring in its membership in the same manner as the city governing body fills vacancies.

(e) Directors shall be eligible to succeed themselves in office, whether the board is self-perpetuating or not. No director shall be an officer of the state or of the municipality or of the county. A majority of the members of the board shall constitute a quorum for the transaction of business. No vacancy in the membership of the board shall impair the right of a quorum to exercise all the powers and duties of the authority. The members of the board and the officers of the authority shall serve without compensation; except, that they may be reimbursed for actual expenses incurred in and about the performance of their duties. All resolutions adopted by the board shall constitute actions of the authority, and all proceedings of the board shall be reduced to writing and signed by the secretary of the authority, and shall be recorded in a well-bound book. Copies of such proceedings, when certified by the secretary of the authority, under the seal of the authority, shall be received in all courts as prima facie evidence of the matters and things therein certified.

The officers of the authority shall consist of a president, a vice-president, a secretary, a treasurer and such other officers as the board shall deem necessary to accomplish the purposes for which the authority was organized. The offices of secretary and treasurer may, but need not, be held by the same person. The president and vice-president of the corporation shall be elected by the board from its membership. The secretary, the treasurer and any other officers of the authority, who may, but need not, be members of the board shall also be elected by the board.

The authority shall have the following powers and capacities, among others specified in this article, together with all powers incidental thereto or necessary to the discharge thereof:

(1) To have succession by its corporate name until dissolved as provided in Section 22-21-154;

(2) To maintain actions and have actions maintained against it by others in any form of litigation other than an action ex delicto, and to defend any litigation brought against it;

(3) To have and use a corporate seal and to alter the same at pleasure;

(4) To adopt and alter bylaws for the regulation and conduct of its affairs and business;

(5) To acquire, whether by purchase, gift, lease, devise or otherwise, property of every description which the board may deem necessary or desirable to the acquisition, construction, reconstruction, improvement, enlargement, equipment, operation or maintenance of a project and to hold title thereto;

(6) To construct, enlarge, improve, equip, maintain and operate one or more projects;

(7) To borrow money for any of its corporate purposes and to sell and issue in evidence of such borrowing its Interest-bearing Revenue Bonds as provided in this article;

(8) To sell and issue refunding revenue bonds;

(9) To secure any of its bonds by pledge and indenture as provided in this article;

(10) To appoint, employ and compensate such agents, architects and attorneys as the business of the authority may require;

(11) To provide for such insurance as the board may deem advisable;

(12) To invest any of its funds pending need therefor as provided in this article;

(13) To contract, lease and make lease agreements respecting its properties, or any part thereof, as provided in this article; and

(14) To sell and convey any of its properties that may have become obsolete or worn out or that may no longer be needed or useful in connection with, or in the operation of, any project; provided, that it shall not have the power to sell or convey any project substantially as a whole except as provided in this article.

The authority shall have the same power of eminent domain as is vested by law in the municipality, which power shall be exercised in the same manner and under the same conditions as are provided by law for the exercise of the power of eminent domain by the municipality.

The municipality is hereby authorized to convey to the authority, with or without the payment of monetary consideration therefor, any property that may, immediately preceding such conveyance, be owned by the municipality, whether or not such property is necessary for the conduct of the governmental or other public functions of the municipality; provided, that such conveyance shall be authorized by a resolution duly adopted by the governing body prior to the conveyance. Such resolution shall be published one time, at least five days before such conveyance is consummated, in a newspaper published in the municipality and, if there is no newspaper then published in the municipality, then, in a newspaper published or circulated in the county.

(a) Authorization of lease. - The authority and the municipality are hereby respectively authorized to enter into one or more lease agreements with each other whereunder one or more projects or any part thereof shall be leased by the authority to the municipality. No such lease agreement shall be for a term longer than the then current fiscal year in which it is made. Any such lease agreement made, however, may contain a grant to the municipality of successive options to renew such lease agreement, on the conditions specified therein, for additional terms; but no such additional term shall be for a period longer than the fiscal year in which such renewal shall be made. The lease agreement may contain provisions as to the method by which such renewal may be effected.

(b) Payments limited to current revenues of the municipality for current fiscal year. - The obligation on the part of the municipality to pay the rental required to be paid and to perform the agreements on the part of the municipality required to be performed during any fiscal year during which the lease agreement is in effect shall constitute a general obligation of the municipality, and the municipality is authorized to pledge its full faith and credit for the payment of such rental and the performance of such agreements; provided, that the rental required to be paid and the agreements required to be performed by the municipality under the lease agreement during any fiscal year during which the lease agreement is in effect shall be payable solely out of the current revenues of the municipality for such fiscal year.

(c) Special pledge. - As additional security for the payment of the rental required to be paid and for performance of the agreements on the part of the municipality required to be performed during the first or initial term of any lease agreement made by the authority with the municipality, the municipality is authorized to pledge specially so much of the following revenues and tax proceeds as may be necessary to pay the rental and to perform the agreements which are required in the lease agreement to be paid and performed during the said initial term:

(1) The revenues that may be received by the municipality during the said initial term from the operation of the project covered by the lease agreement remaining after the payment of all reasonable expenses during the said initial term for the operation and maintenance of the said project; and

(2) The proceeds that may be received by the municipality during the said initial term from any tax or taxes, the proceeds of which the municipality is authorized in Section 11-81-16 to pledge for the benefit of bonds of the municipality.

Whenever a lease agreement containing such a special pledge is renewed under its terms for an additional term, such special pledge shall be deemed effective for such additional term without the necessity of a new pledge being made or a new lease agreement being entered into for that purpose, and the exercise of the option to renew shall be construed as a renewal also of the said special pledge; provided, that said special pledge shall be applicable only to specially pledged revenues that are received by the municipality during the fiscal year for which the lease agreement is renewed. Each such special pledge that shall be so effected by renewal of the lease agreement for an additional term shall be deemed to relate to, and to have been made as of, the date on which the lease agreement was made and shall take precedence over any pledge of the specially pledged revenues which might be made by the municipality and over any claim which might arise against the specially pledged revenues between the date on which the lease agreement was made and the first day of the additional term for which the lease agreement shall be so renewed. Any pledge of specially pledged revenues made by the municipality under the provisions of any contract made by it subsequent to the date of the lease agreement containing such special pledge shall be subordinate to the special pledge contained in the lease agreement.

(d) Obligation to levy taxes specially pledged. - In any instance where a lease agreement contains a pledge of specially pledged revenues, the municipality shall levy during each fiscal year that the lease agreement shall be in effect, and shall use so much of the proceeds from the tax or taxes so specially pledged as may be necessary to pay the rentals and perform the agreements on the part of the municipality which are required in the lease agreement to be paid and performed during such fiscal year.

(e) General provisions. - Any lease agreement may contain such covenants as shall not be inconsistent with this article. The rental required to be paid and the agreements required to be performed by the municipality under the provisions of the lease agreement shall never create an indebtedness of the municipality within the meaning of Section 225 of the Constitution of the State. If any space available for rent in any project which shall have been leased, in whole or in part, to the municipality should become vacant after acquisition or construction of the project by the authority, then until such time as all such vacant space shall have been filled or rented, neither the municipality, nor any officer, department or agency thereof, shall thereafter enter into any rental agreement or renew any then existing rental agreement, for other space in or about the municipality to be used for the same purposes for which such vacant space in the project is capable of being used.

The authority is empowered, at any time and from time to time, to sell and issue its revenue bonds for the purpose of providing funds to acquire, construct, improve, enlarge, complete and equip one or more projects and for payment of obligations incurred for any such purpose. The principal of, and interest on, any such bonds shall be payable solely out of the revenues derived by the authority from any one or more of its projects, all as shall be provided by the resolution of the board or the indenture whereunder such bonds are authorized to be issued. Any bonds of the authority may be delivered by it at any time and from time to time, shall be in such form and denominations and of such tenor and maturities, shall bear such rate or rates of interest (without regard to any usury or other laws regulating or limiting interest rates, including without limitation, the provisions of Section 8-8-1, as amended, all of which shall be inapplicable to any bonds or other obligations of the authority), shall be payable and evidenced in such manner, may contain provisions for redemption prior to maturity and may contain other provisions not inconsistent with this article, all as may be provided by the resolution of the board or the indenture whereunder such bonds are authorized to be issued; provided, that no bond of the authority shall have a specified maturity date later than 35 years after its date. Each bond of the authority having a specified maturity date more than 10 years after its date shall be made subject to redemption at the option of the authority at the end of the tenth year after its date, and on any interest payment date thereafter, under such terms and conditions as may be provided in the resolution or indenture under which such bond is authorized to be issued. Bonds of the authority may be sold at either public or private sale in such manner and at such time or times as may be determined by the board to be most advantageous to the authority. Bonds issued by the authority shall not be general obligations of the authority, but shall be payable solely out of the revenues derived from the project or projects specified in the resolution of the board or the indenture under which such bonds are authorized to be issued.

The authority may at any time and from time to time sell and issue its refunding revenue bonds for the purpose of refunding the principal of, and interest on, any matured or unmatured bonds of the authority at the time outstanding and for the payment of any expenses incurred in connection with such refunding and any premium necessary to be paid to redeem or retire the bonds so to be refunded; provided, that the principal amount of bonds the authority may issue for refunding purposes may not exceed the sum of the following: the principal amount of the bonds refunded thereby, the interest to mature thereon from the immediately preceding interest payment date to their respective maturities (or, in the event the bonds to be refunded, or any part thereof, are to be retired prior to their respective maturities, the interest to mature thereon from the immediately preceding interest payment date until the date or dates on which they are to be retired), any premium necessary to be paid to redeem or retire the bonds to be refunded (but only if such bonds are in fact to be redeemed or retired prior to their respective maturities) plus the amount of any expenses estimated to be incurred in connection with such refunding. The authority may also at any time and from time to time sell and issue its revenue bonds for the combined purpose of so refunding any of its bonds and of obtaining funds for any other purpose for which it is authorized by this article to sell and issue revenue bonds, in which event the provisions of this article relating to refunding bonds shall apply only to those of such bonds issued for refunding purposes. Any such refunding may be effected either by sale of refunding bonds, and the application of the proceeds thereof, or by exchange of the refunding bonds for the bonds, or interest coupons to be refunded thereby; provided, that the holders of any bonds or coupons so to be refunded shall not be compelled without their consent to surrender their bonds or coupons for payment or exchange prior to the date on which they may be paid or redeemed by the authority under their respective provisions. Any refunding bonds of the authority shall be payable solely from the revenues derived by the authority from any one or more of its projects, all as shall be specified in the resolution of the board or the indenture under which such bonds are authorized to be issued. All provisions of this article pertaining to bonds of the authority that are not inconsistent with the provisions of this section shall, to the extent applicable, also apply to refunding bonds issued by the authority and to bonds issued by the authority for both refunding and other purposes.

The bonds of the authority shall be signed by either its president or its vice-president, as shall be provided in the resolution under which the bonds shall be issued, and the seal of the authority shall be affixed to the bonds and attested by its secretary; provided, that a facsimile of the signature of one, but not both, of the officers whose signatures will appear on the bonds may be imprinted or otherwise reproduced on any of the bonds in lieu of his manually signing the same and provided further, that a facsimile of the seal of the authority may be imprinted, or otherwise reproduced, on any of the bonds in lieu of being manually affixed thereto. Any interest coupons applicable to the bonds shall be signed either manually by, or with a facsimile of, the signature of either the president or the vice-president of the authority, as shall be provided in the resolution under which the bonds shall be issued. If after any of the bonds or interest coupons thereunto appertaining shall be so signed, whether manually or by facsimile, any such officer shall, for any reason, vacate his office, the bonds and interest coupons so signed may nevertheless be delivered at any time thereafter as the act and deed of the authority.

The principal of, and the interest on, the bonds shall be secured by a pledge of the revenues out of which the bonds shall be made payable, may be secured by a pledge of the lease agreement (if any) covering the project from which revenues so pledged shall be derived and by a pledge of the rental from such project and may be secured by a nonforeclosable indenture covering the project or projects out of the revenues from which the bonds are made payable. The trustee, under any indenture, may be a trust company or bank having trust powers, whether located within or without the state, and may be selected by the board without regard to the provisions of Chapter 25 of Title 36 of this Code or other similar law. The indenture may contain any agreements and provisions customarily contained in instruments securing evidences of indebtedness including, without limiting the generality of the foregoing, provisions respecting the collection, segregation and application of the revenues and rental from any project or projects covered by such indenture, the terms to be incorporated in any lease agreement respecting any project, the maintenance and insurance on any project, the creation and maintenance of special funds from the revenues and rental of any project and the rights and remedies available in the event of default to the holders of the bonds or the trustee under the indenture, all as the board shall deem advisable and as shall not be in conflict with the provisions of this article; provided, that in making any such agreements or provisions, the authority shall not have the power to obligate itself except with respect to the project or projects out of the revenues from which the bonds are made payable and the application of the revenues therefrom. The indenture may contain provisions regarding the rights of any trustee thereunder and the holders of the bonds and coupons and may contain provisions restricting the individual rights of action of the holders of the bonds and coupons.

Any resolution authorizing any bonds under this article shall contain a recital that they are issued pursuant to the provisions of this article, which recital shall be conclusive evidence that said bonds have been duly authorized pursuant to the provisions of this article, notwithstanding the provisions of any other law now in force or hereafter enacted or amended. Upon the adoption by the board of any resolution providing for the issuance of bonds, the authority may, in its discretion, cause to be published once a week, for two consecutive weeks, in a newspaper then published in the municipality or, if there is no newspaper then published in the municipality, then, in a newspaper published or circulated in the county, a notice in substantially the following form, with any appropriate changes, to the extent applicable and with the blanks being properly filled in:

'_____, a public corporation and a political subdivision of the State of Alabama, has authorized the issuance of $ _____ principal amount of bonds of the said authority to be dated _____ for purposes authorized in article 5 of chapter 21 of Title 22 of the Code of Alabama of 1975 and has entered into a lease with the (city or town) _____ of _____ respecting the project described therein and pledged said lease and the rentals payable thereunder as security for said bonds. Any action or proceeding questioning the validity of the said bonds, or the pledge and the indenture to secure the same or the said lease, must be commenced within 20 days after the first publication of this notice.

Any action or proceedings in any court to set aside or question the validity of the proceedings for the issuance of the bonds referred to in said notice or to contest the validity of any such bonds, or the validity of any lease agreement pledged therefor, or the validity of any pledge made therefor or the validity of the indenture must be commenced within 20 days after the first publication of such notice. After the expiration of the said period, no right of action or defense questioning or attacking the validity of the said proceedings, or of the said bonds, or any such lease agreement, or any pledge herein authorized or the indenture shall be asserted, nor shall the validity of the said proceedings, bonds, lease agreement (if any), pledge or indenture be open to question in any court on any ground whatsoever except in an action commenced within said period.

Bonds issued under the provisions of this article are hereby made legal investments for savings banks and insurance companies organized under the laws of the state. Unless otherwise directed by the court having jurisdiction thereof or the document that is the source of authority, a trustee, executor, administrator, guardian or one acting in any other fiduciary capacity may, in addition to any other investment powers conferred by law and with the exercise of reasonable business prudence, invest trust funds in the bonds of the authority.

The governing body is authorized, in its discretion, to invest in bonds of the authority any idle or surplus money held in the treasury of the municipality which is not otherwise earmarked or pledged.

All bonds issued by the authority, while not registered, shall be construed to be negotiable instruments even though they are payable from a limited source. All coupons applicable to any bonds issued by the authority, while the applicable bonds are not registered as to both principal and interest, shall likewise be construed to be negotiable instruments although payable from a limited source.

(a) The proceeds derived from the sale of any bonds sold by the authority, other than refunding bonds, shall be used only to pay the cost of acquiring, constructing, improving, enlarging and equipping one or more projects, as may be provided in the proceedings in which the bonds are authorized to be issued. Such cost shall be deemed to include the following:

(1) The cost of any land forming a part of such project or projects;

(2) The cost of the labor, materials and supplies used in any such construction, improvement or enlargement, including architect's and engineer's fees and the cost of preparing contract documents and advertising for bids;

(3) The purchase price of, and the cost of, installing equipment for such project or projects;

(4) The cost of landscaping the lands forming a part of such project or projects and of constructing and installing roads, sidewalks, curbs, gutters, utilities and parking places in connection therewith;

(5) Legal, fiscal and recording fees and expenses incurred in connection with the authorization, sale and issuance of the bonds issued in connection with such project or projects; the cost of any feasibility studies deemed necessary or advisable in connection with the issuance and sale of such bonds; the amount of any debt service reserve that the board deems necessary or advisable to be funded out of the proceeds from the sale of such bonds; and

(6) Interest on the bonds for a reasonable period prior to the commencement of the construction and equipment of such project or projects, or of any improvements or additions being financed (in whole or in part) out of the proceeds from the sale of such bonds, and during the period that is estimated will be required for such construction and equipment and for a period of not more than two years after the completion of such construction and equipment.

(b) If any proceeds derived from the sale of the bonds remain undisbursed after completion of the work and payment of all costs and expenses in connection with the project or projects with respect to which the bonds are issued, such balance shall be applied toward the retirement of the bonds. The proceeds derived from the sale of any refunding bonds shall be used only for the purposes for which the refunding bonds were authorized to be issued.

(a) In event of default on bonds. - If there should be any default in the payment of the principal of, or interest on, any bonds issued under this article, then the holder of any of the bonds, and of any of the interest coupons applicable thereto, and the trustee under any indenture, or any one or more of them:

(1) May, by mandamus, injunction or other proceedings, compel performance of all duties of the officers and directors of the authority with respect to the use of funds for the payment of the bonds and for the performance of the agreements of the authority contained in the proceedings under which they were issued;

(2) Shall be entitled to a judgment against the authority for the principal of, and interest on, the bonds so in default; and

(3) Regardless of the sufficiency of the security for the bonds in default and as a matter of right, shall be entitled to the appointment of a receiver:

a. To make lease agreements respecting the project out of whose revenues the bonds so in default are payable and fix and collect rents therefor; and

b. To operate, administer and maintain the project as a public hospital facility, with all powers of a receiver in the exercise of any of said functions. The income derived from any lease agreement made, and any operation of the project carried on, by any such receiver shall be expended in accordance with the provisions of the proceedings under which the bonds were authorized to be issued and the orders of the court by which such receiver is appointed.

(b) In event of default in lease agreement. - If there should be any default by the municipality in the payment of any installment of rent or in the performance of any agreement required to be made or performed by the municipality under the provisions of any lease agreement, the authority and the trustee under any indenture, or either of them:

(1) May, by mandamus, injunction or other proceedings, compel performance by the officials of the municipality of their duties respecting the payment of the rentals required to be paid and performance of the agreements on the part of the municipality required to be performed under any such lease agreement; and

(2) Shall be entitled to a judgment against the municipality for all monetary payments required to be made by the municipality under the provisions of such lease agreement with respect to which the municipality is then in default.

(c) General remedies. - The remedies specified in this section shall be cumulative to all other remedies which may otherwise be available for the benefit of the holders of the bonds and the coupons applicable thereto; provided, that any indenture shall not be subject to foreclosure and shall not be construed so as to authorize the sale of any project covered thereby, or any part thereof, in satisfaction of the bonds secured thereby.

All obligations incurred by the authority and all bonds issued by it shall be solely and exclusively an obligation of the authority and shall not create an obligation or debt of the State of Alabama or of the municipality.

(a) Any portion of the principal proceeds derived from the sale of the bonds which the board may determine is not presently needed for any of the purposes for which the bonds are authorized to be issued, and any other moneys of the authority which the board may determine will not be presently needed by the authority may, on order of the board, be invested in:

(1) Any securities that are direct general obligations of the United States of America or the principal of and interest on which are unconditionally and irrevocably guaranteed by the United States of America;

(2) Any debt securities that are direct obligations of any agency of the United States of America;

(3) Interest-bearing Bank Time Deposits and Interest-bearing Bank Certificates of Deposit; and

(4) Interest-bearing Time Deposits and Interest-bearing Certificates of Deposit of any federally-chartered Savings and Loan Association.

(b) Any securities, time deposits or certificates of deposit in which any such investment is made may, at any time and from time to time on order of the board, be sold or otherwise converted into cash. The income derived from any such investments shall be disbursed on order of the board for any purpose for which the authority may lawfully expend funds.

The properties of the authority, and the income therefrom, all lease agreements made by the authority, all bonds issued by the authority, and the coupons applicable thereto and the income therefrom, and all indentures executed with respect thereto shall be forever exempt from any, and all, taxation in the State of Alabama.

At any time when the authority does not have any bonds outstanding, the board may adopt a resolution, which shall be duly entered upon its minutes, declaring that the authority shall be dissolved. Upon the filing for record of a certified copy of said resolution in the office of the judge of probate of the county, the authority shall, thereupon, stand dissolved, and in the event that it owned any assets or property at the time of its dissolution, the title to all its assets and property shall thereupon vest in the municipality. In the event the authority shall at any time have outstanding bonds issued under this article payable out of the revenues of different projects, then as and when the principal of and interest on all bonds payable from the revenues derived from any project shall have been paid in full, title to the project, with respect to which the bonds so paid in full have been paid, shall thereupon vest in the municipality, but such vesting of title in the municipality shall not affect the title of the authority to any other project the revenues from which are pledged to the payment of any other bonds then outstanding. The formation of one or more public corporations under the provisions of this article shall not prevent the subsequent formation under this article of other public corporations pursuant to permission granted by the same municipality.

This article shall not be construed as a restriction or limitation upon any power, right or remedy which any municipality or any corporation now in existence or hereafter formed may have in the absence of this article, and shall be construed as cumulative and independent thereof.

Any public corporation heretofore or hereafter incorporated and existing under the provisions of this chapter is hereby authorized and empowered to lease any hospital, building or facility constructed and equipped under the provisions of this chapter to any public corporation or any nonprofit corporation. Nothing in this section shall be construed to allow the abrogation of the terms of any contract or to jeopardize any security for the fulfillment of any obligation assumed under the provisions of this chapter.

For the purposes of this article, unless otherwise indicated, the following terms shall have the meanings respectively ascribed to them by this section:

(1) CORPORATION. A corporation organized pursuant to the provisions of this article.

(2) COUNTY. Any county in this state.

(3) MEMBER. The county that is a member of a corporation organized pursuant to the provisions of this article and each municipality that is at the time a member of such corporation.

(4) SECURITIES. Notes, bonds, certificates of indebtedness, warrants or other evidences of indebtedness.

(5) HOSPITAL. Such term includes the plural as well as the singular and means any one or more of buildings or facilities which serve to promote the public health, either by providing places or facilities for the diagnosis, treatment, cure or convalescence of sick, injured, mentally ill or disturbed persons, or for the prevention of sickness and disease, or for the care, treatment and rehabilitation of alcoholics or for research with respect to any of the foregoing, including, without limiting the generality of the foregoing, hospitals, clinics, sanitoria, nursing homes, offices for persons engaged in the diagnosis, treatment or cure of sick or injured persons or in preventive medicine and buildings to house or service equipment used for the diagnosis or treatment of sick or injured persons or in preventive medicine or the records of such diagnosis or treatment, or research with respect to any of the foregoing or dormitories or residences for hospital personnel and students and other employee-related facilities, together with:

a. All real and personal properties for the location or better utilization of any such buildings and facilities, such as parking structures and areas, garages, storage facilities and out-buildings; and

b. Machinery, equipment, furniture and fixtures useful or desirable in the operation of any of the aforesaid buildings and facilities.

(6) CHIEF EXECUTIVE OFFICER. With respect to a county, the probate judge as ex officio principal judge of the county commission or the president or chairman of such commission and, with respect to a municipality, the mayor, president or chairman of the commission or other chief executive officer of such municipality.

(7) GOVERNING BODY. With respect to a county, the county commission and, with respect to a municipality, the council, commission or other governing body of such municipality.

It is the intention of the Legislature by the passage of this article to authorize in each of the several counties of the state the organization of a public corporation or corporations for the purpose of acquiring, owning and operating public hospitals and other health-care and related facilities in the county in which such corporation shall be organized. It is the legislative intent to confer on corporations organized under this article all the powers requisite for the fulfillment of the purposes of their organization, including the power to do whatever financing may be necessary to accomplish such purposes. This article shall be liberally construed to give effect to its purpose. Corporations organized under this article shall be public, nonprofit corporations, and no part of the net earnings thereof shall inure to the benefit of any individual or private corporation.

Any county and any one or more municipalities located, in whole or in part, in such county are hereby together empowered and authorized to cause to be organized and incorporated one or more public corporations for hospital purposes with all the power and authority provided in Section 22-21-179. Such power and authority shall be exercised by the governing body of the county and by the governing body or bodies of the municipality or municipalities proposing to exercise such power and authority. The determination of such governing body to exercise the power and authority granted in this section shall be evidenced by a resolution which:

(1) Shall declare the desirability of organizing and incorporating a public corporation for hospital purposes under this article;

(2) Shall approve the form of the certificate of incorporation proposed to be used in organizing the corporation;

(3) Shall find and determine that it is wise, expedient, necessary or advisable that the corporation be formed; and

(4) Shall authorize its Chief Executive Officer to proceed with the organization and incorporation of such public corporation.

Whenever the governing bodies of the county and of the municipality or municipalities which are to be members of such public corporation shall have adopted such resolutions, the Chief Executive Officer of each of them shall sign the certificate of incorporation and cause the same to be filed as provided in Section 22-21-173.

The certificate of incorporation of any public corporation incorporated under this article shall state:

(1) The name of the corporation, which shall be hospital authority of _____ (or space to be filled in with the names of the county and of the municipality or municipalities which are to be members thereof, or with the name of any hospital proposed to be acquired by the corporation or with such other descriptive name as in the judgment of the members of the corporation is appropriate);

(2) The names of the county and the municipality or municipalities which are to be members of the corporation;

(3) The dates of adoption by the governing bodies of the county and such municipality or municipalities of their respective resolutions authorizing the incorporation of the corporation;

(4) The location of the principal office of the corporation and its post-office address;

(5) The period for the duration of the corporation; if the duration is to be perpetual, that fact shall be stated; and

(6) The objects for which the corporation is organized, including, if appropriate, the name of any existing hospital the ownership or operation of which is proposed to be acquired and assumed by the corporation.

The certificate of incorporation may also include any provision or provisions for the regulation and conduct of the affairs of the corporation which are not inconsistent with this article and the laws of the State of Alabama. The certificate of incorporation shall be acknowledged before an officer authorized by the laws of this state to take acknowledgments to deeds. The certificate of incorporation shall be filed in the office of the judge of probate of the county which is to be a member of the corporation, and said judge of probate shall forthwith file such certificate and record the same; and thereupon the corporation described in said certificate of incorporation shall constitute a public corporation under the name stated in the certificate of incorporation. As soon thereafter as convenient, the judge of probate shall transmit a copy of the certificate of incorporation to the Secretary of State.

The certificate of incorporation of any public corporation incorporated under this article may, at any time and from time to time, be amended in the following manner:

(1) The board of directors of the corporation shall adopt a resolution setting forth the proposed amendment, which may include any proposed change in the name of such corporation, the inclusion of another municipality or municipalities as members thereof (provided each of such other municipalities is located, in whole or in part, in the county which is a member of the corporation) and any matter which might originally have been included in the certificate of incorporation.

(2) If the governing body of the county and of each other member of the corporation and the governing body of each municipality, if any, which it is proposed shall be added as a member of the corporation shall by resolution consent to such proposed amendment, the chairman and the secretary of the corporation shall then file, in the office of the judge of probate in the county in which the certificate of incorporation of the corporation is filed, a certificate in the name and on behalf of the corporation, under its corporate seal, reciting the adoption of the said respective resolutions by the board of directors and by the governing bodies of the county and of such municipalities and setting forth the proposed amendment.

(3) The proposed amendment shall become effective upon the filing of such certificate in the said office.

The officers of the corporation shall consist of a chairman, a vice-chairman, a secretary, a treasurer and such other officers as the board of directors shall deem necessary to accomplish the purposes for which the corporation was organized. The chairman and the vice-chairman of the corporation shall be elected by the board of directors from its membership, but neither the secretary, the treasurer nor any of the other officers of the corporation need be a member of the board of directors. The offices of secretary and treasurer may, but need not be, held by the same person. The chairman and the vice-chairman of the corporation shall be elected by the board of directors for a term of one year, and the secretary, the treasurer and the other officers of the corporation shall be elected by the board of directors for such terms as it deems advisable. The board of directors shall have also the authority to employ all personnel as it deems necessary and to fix the terms and conditions of their employment. The duties of the chairman, vice-chairman, secretary and treasurer shall be such as are customarily performed by such officers and as may be prescribed by the board of directors. The duties of any other officers of the corporation shall be such as are from time to time prescribed by the board.

The formation of one corporation under the provisions of this article shall not prevent the subsequent formation under this article of another corporation by the same county and the same municipality or municipalities or another municipality or municipalities in such county.

No hospital authorized under this article shall have governmental sovereignty or immunity.

The corporation shall have all the powers and authority inhering in, or conferred upon, counties in the State of Alabama operating public hospitals, except as otherwise provided, as well as the following specific powers, together with all powers incidental thereto or necessary to the discharge thereof in corporate form:

(1) To have succession by its corporate name for the duration of time, which may be in perpetuity, specified in its certificate of incorporation or until dissolved as provided in Section 22-21-191;

(2) Subject to the limitations contained in the provisions of this section, to maintain actions and have actions maintained against it in its own name in civil, including ex delicto and ex contractu, actions;

(3) To adopt and make use of a corporate seal and to alter the same at pleasure;

(4) To adopt bylaws and amend the same;

(5) To receive, acquire, take and hold, whether by purchase, gift, lease, devise or otherwise, real and personal property of every description and to manage and dispose of the same by any form of legal conveyance or transfer;

(6) To acquire, construct, equip, enlarge, improve, maintain and operate one or more hospitals and to do all things necessary to that end;

(7) To contract with any institution for the instruction of medicine to provide training for nurses, technicians and other technical, professional and paramedical personnel upon such terms, conditions and number of years as they may determine;

(8) To conduct training schools;

(9) To provide scholarships for students to be engaged in essential duties peculiar to the operation of such hospitals in such manner as they may determine;

(10) To select and appoint medical staff and dental staff members and others licensed to practice the healing arts and to delineate and define the privileges granted each such individual;

(11) To affiliate with, and contract to, provide training and clinical experience for students of other institutions, upon such terms and conditions as it may determine;

(12) To rent, lease or contract for the operation of any department, section, equipment or holdings of the corporation, upon such terms and conditions as it may determine;

(13) To borrow money for any corporate purpose and to issue interest-bearing securities, including bonds, notes and certificates of indebtedness, in evidence of any such borrowing;

(14) To mortgage, pledge or otherwise convey its property and its revenues from any source;

(15) To appoint and employ such officers and agents, including attorneys, as the business of the corporation may require;

(16) To establish, collect and alter charges for services rendered and supplies furnished by it;

(17) To make all needful or appropriate rules and regulations for the conduct of any hospital owned or operated by it and to alter such rules and regulations;

(18) To provide for such insurance as the corporation may deem advisable;

(19) To cooperate with the State Board of Health and the State Department of Mental Health;

(20) To make such contracts with either of said agencies as the board of directors of the corporation may deem advisable respecting the operation of any hospital;

(21) To receive and accept grants from the United States of America, the State of Alabama and any county or municipality located in said state, and from any agency or instrumentality thereof, and to give such assurances, contractual or otherwise, to or for the benefits of any such grantor as may be required in connection with, or as conditions precedent to the receipt of, any such grant;

(22) To give such assurances, contractual or otherwise, and to make such commitments and agreements as may be necessary or desirable to preclude the exercise of any rights of recovery with request to, or the forfeiture of title to, any of its hospitals or other property or any hospital or other property proposed to be acquired by it;

(23) To make and alter rules and regulations for the treatment of indigent patients;

(24) To assume any obligations of any entity that conveys and transfers to the corporation any hospital or hospital properties, or interest therein, provided that such obligations appertain to the hospital or hospital properties so conveyed and transferred to the corporation;

(25) To assume, establish, fund and maintain retirement, pension or other employee-benefit plans for its employees; and

(26) To invest any of its moneys in:

a. Securities that are direct obligations of, or the payment of the principal of and the interest on which is unconditionally guaranteed by the United States of America;

b. Securities that are direct obligations of any agency of the United States of America;

c. Interest-bearing deposits, including certificates of deposits, of any bank organized under the laws of the United States of America, or any state thereof; and

d. Securities of the corporation.

The corporation shall not have the power of eminent domain.

The county in which the corporation is organized, any municipality located, in whole or in part, within such county, whether or not a member of such corporation, and any public corporation in such county and any other public agency, authority or body, whether or not incorporated, located or having its principal office in the county are hereby authorized to transfer and convey to the corporation, with or without consideration, any hospital and other properties, real or personal, and all funds and assets, tangible or intangible, relative to the ownership or operation of any hospital that may be owned by such county, municipality, public corporation or public agency, authority or body, as the case may be, or that may be jointly owned by any one or more thereof, and any funds owned or controlled by such county, municipality, public corporation or public agency, authority or body, as the case may be, or jointly by any one or more thereof, that may have been raised or allocated for any of the purposes for which the corporation shall have been organized; provided, that such transfer or conveyance shall be authorized by an ordinance or a resolution duly adopted by the governing body of such county, municipality, public corporation or public agency, authority or body, as the case may be. Further, in the event of the transfer of any hospital to the corporation, any taxes, tax proceeds and other revenues that are apportioned or allocated to or for the benefit of the prior owner or operator of such hospital or for patient care at such hospital shall thereafter be paid to the corporation.

(a) All securities of the corporation shall be signed in the name and behalf of the corporation by its chairman and attested by its secretary, but a facsimile of the signature of one, but not both, of such officers may be printed thereon in lieu of the manual signature of such officer, and the seal of the corporation shall be affixed thereto or a facsimile thereof printed thereon. Any interest coupons applicable to any securities of the corporation shall be signed by its chairman, but a facsimile of such chairman's signature may be printed on any such interest coupons in lieu of his manually signing the same. Any securities of the corporation may be executed and delivered by it at any time and from time to time, shall be in such form and denomination and of such tenor and maturity or maturities not exceeding 40 years from their date, shall contain such provisions not inconsistent with this article and shall bear such rate or rates of interest without regard to any laws of the State of Alabama governing usury or prescribing or limiting interest rates, including, without limitation, the provisions of Chapter 8 of Title 8 of this Code, payable and evidenced in such manner as may be provided by the resolution of the board of directors authorizing the same or by the trust or mortgage indenture under which issued.

(b) Any borrowing may be effected by the issuance and sale of such securities in such manner, at such price or prices, at such time or times and on such other terms and conditions as may be determined by the board of directors to be most advantageous, without regard to any statute that might otherwise require a public advertised sale. The corporation may pay all expenses, premiums and commissions which its board of directors may deem necessary and advantageous in connection with any financing done by it. Securities issued by the corporation shall not be general obligations of the corporation but shall be payable solely from the sources specified in the resolution of the board of directors authorizing the same or in the trust or mortgage indenture under which issued.

(c) As security for payment of the principal of and the interest (and premiums, if any) on any securities issued by it, the corporation may mortgage, pledge or otherwise convey any of its property and any of its revenues from any source, including, but without limitation, any one or more of the following:

(1) Any taxes which may be levied for the benefit of the corporation or any hospital owned or operated by it or the proceeds of which may have been appropriated to the corporation, or to or for the benefit of, any hospital owned or operated by it, by the Legislature or by the governing body of a county or a municipality; and

(2) Revenues from any hospital owned or operated by it.

(d) Any mortgage or trust indenture executed on behalf of the corporation as security for any of its securities and any resolution of the board of directors authorizing the issuance of any such securities may contain such agreements as the board of directors may deem advisable respecting the operation and maintenance of its properties, the application and use of the taxes or revenues, or both, out of which any such securities are payable, the rights or duties of the parties to such instruments or the parties for the benefit of whom such instrument is made and the rights and remedies in the event of default and may also contain provisions restricting the individual rights of action of the holders of any such securities; and any such mortgage or mortgage indenture may also provide that in the event of any default thereunder it may be foreclosed either by sale at public outcry or by judicial proceedings and that the trustee under such mortgage or mortgage indenture or the holders of any securities secured thereby may become the purchaser at any foreclosure sale if the highest bidder. Any such mortgage or mortgage indenture may be filed in the office of the judge of probate of any county in which any of the property, real, personal or mixed, subject to the lien thereof is, or is anticipated to be, located, and the lien of such mortgage or mortgage indenture shall, with respect to all personal property and fixtures subject thereto, including after-acquired property, and notwithstanding any contrary provisions of, and without compliance with, the Uniform Commercial Code, be valid and binding against all parties having claims of any kind against the corporation, irrespective of whether the parties have actual notice thereof, from the time such mortgage or mortgage indenture is so filed. Any such pledge of any such taxes or revenues shall be valid and binding from the time it is made, and the taxes or revenues so pledged and thereafter received by the corporation shall immediately become subject to the lien of such pledge without any physical delivery thereof or further act. The lien of such pledge shall, notwithstanding any contrary provisions of the Uniform Commercial Code, and without compliance with the provisions thereof, be valid and binding against all parties having claims of any kind against the corporation, irrespective of whether the parties have actual notice thereof, from the time there is filed in the office of the judge of probate of the county a notice stating the date on which the resolution authorizing the issuance of the securities was adopted by the board, the principal amount of the securities issued, a brief description of the taxes or revenues so pledged and a brief description of any property the revenues from which are so pledged.

(e) All debts created and securities issued by the corporation shall be solely and exclusively an obligation of the corporation and shall not create an obligation or debt of the State of Alabama or of any county or municipality. The faith and credit of the State of Alabama, or of any county or municipality therein, shall never be pledged for the payment of any securities issued by the corporation. All securities issued by the corporation shall be construed to be negotiable instruments although payable solely from one or more specified sources. All securities issued by the corporation, the income therefrom, and all mortgages and other instruments executed as security therefor, all leases made pursuant to the provisions of this section and all revenues derived from any such leases and all deeds and other documents executed by or delivered to the corporation shall be exempt from all taxation in the State of Alabama.

(a) The principal proceeds derived from any borrowing made by the corporation under Section 22-21-182, other than borrowings made for refunding purposes, shall be used solely for:

(1) The purpose or purposes for which such borrowing was authorized to be made, including architects' and engineers' fees;

(2) Legal, fiscal and recording fees and expenses incurred in connection with such borrowing;

(3) The interest to accrue on any securities issued in evidence of such borrowing during a period of not exceeding 36 months after the date of such borrowing;

(4) The reimbursement to itself, or to its general fund or any one or more of its other funds, to the county in which the corporation is organized, to any municipality located, in whole or in part, in such county and to any public agency, authority or body in such county, of any funds advanced to or for the benefit of the corporation or any hospital owned by it and in anticipation of the issuance of securities by the corporation, including the amount of any interest paid or incurred on any borrowings made for the purpose of obtaining funds to advance to or for the benefit of the corporation or such hospital; and

(5) The creation of such reserves for the payment of debt service on any such securities and for the maintenance, repair, replacement, improvement and enlargement of any of its hospitals and other properties as the board of directors shall deem advisable.

(b) Any portion of the principal proceeds derived from any such borrowing not needed for any of the purposes for which such borrowing was authorized to be made shall be applied and used:

(1) For retirement of the securities issued in evidence of such borrowing;

(2) For payment of the interest thereon;

(3) For payment into one or more special funds created for payment of principal or interest, or both, or for the creation of reserves for the payment of debt service or for maintenance, repair, replacement, improvement or enlargement; or

(4) For any combination thereof, all as shall be specified in the mortgage or trust indenture under which such securities are issued or in the resolution of the board of directors authorizing any such borrowing.

(a) The corporation may, at any time and from time to time, issue refunding securities for the purpose of refunding any securities of the corporation theretofore issued under Section 22-21-182 and then outstanding, whether or not such securities shall have matured or are redeemable at the option of the corporation at the time of such refunding; provided, however, that the maximum principal of securities that the corporation may at any time issue for refunding purposes shall not exceed the sum of:

(1) The outstanding principal or face amount of the securities being refunded;

(2) The unpaid interest accrued thereon to the date that such refunding securities are issued;

(3) Any redemption premium necessary to be paid in order to redeem the securities to be refunded; and

(4) The expenses estimated to be incurred in connection with such refunding.

(b) The principal proceeds derived by the corporation from the sale of any refunding securities shall be used only for the payment of the principal of and the interest (and premium) on the securities being refunded and for payment of the expenses stated in subdivision (a)(4) of this section; provided, that such proceeds may, if in the judgment of the board of directors of the corporation such is necessary or desirable to effect an advantageous refunding, use a portion of said proceeds for payment of principal of and interest on such refunding securities themselves and the remainder of said proceeds for payment of the securities being refunded and of said expenses; and provided further, that in any event any portion of said proceeds that shall at the time not be needed for any of such purposes may, pending need therefor, be invested in such investments as are specified in Section 22-21-179.

(c) Any such refunding may be effected either by sale of the refunding securities and the application of the proceeds thereof as stated in subsection (b) of this section, or by exchange of the refunding securities for the securities to be refunded thereby or by any combination thereof; provided, that the holders of any securities so to be refunded shall not be compelled without their consent to surrender their securities for payment or exchange prior to the date on which they may be paid or redeemed by call of the corporation under their respective provisions.

(d) All provisions of this article pertaining to securities of the corporation that are not inconsistent with the provisions of this section shall, to the extent applicable, also apply to refunding securities issued by the corporation. The corporation may, at any time, and from time to time, issue securities both for the purpose of no refunding any of its securities and for any other purpose for which it is authorized to issue securities, in which event the provisions of this section respecting refunding securities shall apply only to that portion of such combined issue authorized for refunding purposes and the provisions of this section respecting other financing shall apply to the remaining portion of such combined issue.

Securities issued under this article are hereby made legal investments for executors, administrators, trustees and other fiduciaries and for savings banks and insurance companies organized under the laws of this state.

All property, real, personal or mixed, that may be owned by the corporation and the corporation itself shall be exempt from all state, county and municipal taxation, including, without limitation, income, excise, privilege and license taxation. Further, the gross proceeds of sales of tangible personal property to or by the corporation and the storage, use or other consumption by the corporation of tangible personal property, as well as the gross proceeds from the lease or rental of tangible personal property by or to the corporation, shall be exempt from all such state, county and municipal taxation and from the measure of any such taxation imposed on others.

The corporation shall, within a reasonable time following the close of each of its fiscal years, cause to be published in a daily newspaper published in the county that is a member of the corporation, if there is any such daily newspaper, a statement of financial condition containing a brief listing or summary of its assets and liabilities, including the principal amount of its outstanding bonds and other securities, at the close of such fiscal year and a statement containing a brief listing or summary of the expenditures made by it during such fiscal year.

Any corporation organized under the provisions of this article shall, insofar as the subject matter of this article is concerned, be governed exclusively by the provisions of this article, which shall not be construed in pari materia with any other statute.

The provisions of Chapter 25 of Title 36 and all subsequent amendments thereto or any subsequent act which may replace the same shall apply to the members of the board of directors of the corporation, the administrator and the purchasing agent of such hospital.

The corporation shall not purchase any goods or services from an employee of the corporation or the spouse of any such employee, nor may the corporation enter into any contract with any such employee or spouse for the purchase of any goods or services therefrom.

The provisions of Article 2 of Chapter 16 of Title 41, as amended, requiring competitive bids for certain purchases and services shall apply to the corporation to the same extent as said provisions are applicable to the other local governmental agencies specifically mentioned therein.

The provisions of Article 3 of Chapter 16 of Title 41 relating to insurance on public building contracts or public construction contracts shall apply to the corporation.

If at any time the corporation shall have outstanding no unpaid securities and if each member of the board of directors of the corporation shall execute and file for record in the office of the judge of probate of the county in which the corporation is organized a certificate of dissolution reciting the fact that the corporation has outstanding no unpaid securities, stating that it is in the best interests of the public for the corporation to be dissolved and declaring the corporation to be dissolved, the corporation shall thereupon stand dissolved, and title to all funds and properties owned by it at the time of such dissolution shall vest, jointly, in the county and the largest of the member municipalities, according to the federal decennial census next preceding the date of the filing of the certificate of incorporation of the corporation for record, whereupon possession of such funds and properties shall forthwith be delivered to the county and such largest member municipality.

The governing body of any county or municipality in this state may make an appropriation or appropriations out of their respective treasuries to aid in maintaining and taking care of sick and wounded persons who are unable to provide for themselves in any hospital maintained for the care of the sick and wounded. Any county or municipally owned or controlled hospital may accept patients from any county or municipality.

For the purpose of this article, the following terms shall have the meanings respectively ascribed to them by this section:

(1) HOSPITALS. General and specialized hospitals, including ancillary services; independent clinical laboratories; rehabilitation centers; ambulatory surgical treatment facilities for patients not requiring hospitalization; end stage renal disease treatment and transplant centers, including free-standing hemodialysis units; abortion or reproductive health centers; hospices; health maintenance organizations; and other related health care institutions when such institution is primarily engaged in offering to the public generally, facilities and services for the diagnosis and/or treatment of injury, deformity, disease, surgical or obstetrical care. Also included within the term are long term care facilities such as, but not limited to, skilled nursing facilities, intermediate care facilities, assisted living facilities, and specialty care assisted living facilities rising to the level of intermediate care. The term 'hospitals' relates to health care institutions and shall not include the private offices of physicians or dentists, whether in individual, group, professional corporation or professional association practice. This section shall not apply to county or district health departments.

(2) PERSON. The term includes individuals, partnerships, corporations and associations.

The purpose of this article is to promote the public health, safety and welfare by providing for the development, establishment and enforcement of standards for the treatment and care of individuals in institutions within the purview of this article and the establishment, construction, maintenance and operation of such institutions which will promote safe and adequate treatment and care of individuals in such institutions.

For the purposes of this article, unless otherwise indicated, the following terms shall have the meanings respectively ascribed to them by this section:

(1) HOSPITAL. Any state, county, municipal or other public or private hospital licensed under the laws of this state, except a hospital, whether public or private, which is operated primarily for the care and treatment of tuberculosis, mental disorders or any other such chronic disease or illness.

(2) INDIGENT. Any person who has resided continuously in this state for not less than one year and who is acutely ill or injured and can be helped markedly by treatment in a hospital, but who is unable to pay the cost of such hospitalization from his own resources or from the resources of those upon whom he is legally dependent.

(3) PHYSICIAN. Any person who has been duly licensed to practice medicine in the State of Alabama.

(4) PARTICIPATING HOSPITAL. Any hospital, as defined by this section, which has been accepted for participation in the hospital service program for indigents.

(5) PARTICIPATING COUNTY. Any county in which the county commission of the county certifies in writing to the state board of health not later than January 1 of each year, that the county does desire to participate in the hospital service program for indigents during the current fiscal year.

It is the legislative intent and purpose of this article that the hospital service program for indigents provided for in this article shall be a program designed and administered so as to provide hospitalization for those residents of the State of Alabama who are ill or injured and who can be helped markedly by treatment in a hospital, but who are clearly unable to meet the cost of such hospitalization from their own resources or from the resources of those upon whom they are legally dependent. It is not intended that the program shall be burdened by attempting to provide purely domiciliary care for persons with permanently disabling diseases or illnesses or with chronic diseases or illnesses, such as tuberculosis or mental disorders, which are already provided for under any special program of the State of Alabama or of the United States. It is also not intended that this article shall be compulsory on any county except during such time as the county agrees, in the manner prescribed in this article, to participate in the program.

The Hospital Service Program for the indigent shall be administered by the State Board of Health through the State Health Department. The board shall, subject to the provisions of this article, promulgate and adopt such rules and regulations as may be necessary for the proper administration of this article, and any such rule or regulation promulgated and adopted by the board shall be binding on any county participating in the Hospital Service Program for the indigent and shall be complied with by all local agencies or persons responsible for the enforcement of any part of this article. The rules and regulations of the board shall include, among other things:

(1) Requirements concerning any reports to be made to the board by any county participating in the program or by any participating hospital in any such county, including both medical and financial reports;

(2) Criteria for acceptance of participating hospitals;

(3) Method of determining need for hospitalization of applicants for indigent hospital service;

(4) Method of determining reimbursable costs for indigent hospital service in each participating hospital, but such costs shall not include any payment for professional medical services and shall, in no event, exceed the nonprofit basic per diem costs of hospitalization in such hospital; and

(5) Methods and standards of determining indigency, as the term is defined by Section 22-21-210.

An Admissions Committee is hereby created in each county in the state. The Admissions Committee in each county shall be appointed by majority vote of an appointing board in each county consisting of the judge of probate of the county, two members of the county commission, who shall be selected from among themselves, and one member of the governing body of each of the two largest incorporated municipalities in the county, who shall be selected by the governing bodies of such municipalities from among themselves. In the event there is only one incorporated municipality in the county, two members of the appointing board shall be selected by the governing body of such municipality from among themselves. Of the members of the Admissions Committee first appointed in each county under the provisions of this section, one shall be appointed for a term of one year, one shall be appointed for a term of two years and one shall be appointed for a term of three years. Successors to the members of each Admissions Committee first appointed under the provisions of this section shall serve for a term of three years each. Members of the Admissions Committee in each county shall be residents and qualified electors of the county, but no member of such committee shall hold any public office of trust or profit or be actively engaged in the practice of medicine. The Admissions Committee shall meet at least once each month and may hold such other meetings as the committee deems necessary. Members of the committee shall receive no compensation for the performance of any duties imposed upon them under the provisions of this article.

The Admissions Committee in each county shall determine the indigency of any resident of the county making application for hospitalization as an indigent under the authority of this article and shall promulgate and adopt such rules and regulations as it deems necessary in the admission of indigent patients, but the admission of indigent patients and the promulgation and adoption of such rules and regulations shall not be inconsistent either with the provisions of this article or with the rules and regulations promulgated and adopted by the State Board of Health under this article. No member of the admissions committee shall be personally liable, either civilly or criminally, for any action taken by the committee.

Any person desiring to be hospitalized as an indigent under the provisions of this article must first be examined by an attending physician, who shall attest to the general need for hospitalization of such person, but final determination of the need for hospitalization of such person shall be made by the medical staff of a participating hospital.

In the event that there is no hospital located in a county and the county commission of such county certifies to the State Board of Health that it does desire to participate in the Hospital Service Program for Indigents, in the manner provided for in this article, the Admissions Committee of such county may approve the admittance of any indigent of the county to a participating hospital in any other county, and in such cases, the county commission of the county in which such indigent resides shall pay to the hospital to which the indigent is admitted such charges for indigent hospitalization as such hospital would have been entitled to receive had the indigent been a resident of the county in which the hospital is located.

In the event that no participating hospital in a participating county has adequate personnel, equipment or other medical facilities necessary for the proper care and treatment of a particular indigent residing in the county, the Admissions Committee in such county may approve the admittance of such indigent to a participating hospital in any other county, and in such cases, the county commission of the county in which such indigent resides shall pay to the hospital to which the indigent is admitted such charges for indigent hospitalization as such hospital would have been entitled to receive had the indigent been a resident of the county in which the hospital is located.

No physician shall be entitled to receive any public funds as a fee for attending or treating an indigent patient hospitalized under the provisions of this article, it being the intent and purpose of this article that all such professional medical services shall be furnished by such physician without cost to the state or any participating county, but this shall not be construed as prohibiting any physician, hospital or other interested party from collecting from such patient, or from relatives or others upon whom such patient is legally dependent or from other third parties the amount of any charges for hospitalization or professional medical services rendered to such patient; provided, that if any hospital shall collect from any such indigent patient, or from relatives or others upon whom such patient is legally dependent or from other third parties any charges for costs of hospitalization for such patient, public funds provided under this article shall be used only to the extent necessary to insure payment of hospital costs allowed under this article after deducting from such hospital costs the amount of any such charges collected by such hospital.

No person shall establish, conduct or maintain any hospital as defined in Section 22-21-20 without first obtaining the license provided in this article. Hospitals operated by the federal government and mental hospitals under the supervision of the board of trustees of the Alabama State Hospitals shall be exempt from the provisions of this article.

(a) All funds appropriated each year for the use of the State Board of Health in carrying out the provisions of this article, except as may otherwise be provided in this section, shall be apportioned among the various counties of the state as follows:

(1) Twenty-five percent of the amount of such funds shall be apportioned in equal parts among the 67 counties of the state; provided, that no county shall be allotted any State Funds under this subdivision unless the county commission of such county shall certify in writing to the State Board of Health, not later than January 1, of each year, that the county does desire to participate in the Hospital Service Program for Indigents during the current fiscal year to the extent of such funds. In the event that the county commission of any county fails or refuses to certify to the State Board of Health that the county does desire to participate in the Hospital Service Program for Indigents, in the manner prescribed in this subdivision, then any amount which would have inured to such county under the provisions of this subdivision shall be apportioned in equal parts among the remaining counties in the state participating in such program; and

(2) Seventy-five percent of the amount of such funds shall be apportioned among the various counties in the proportion which the population of each county bears to the total population of the state, according to the last or any subsequent federal decennial census; provided, that no county shall be allotted any State Funds under this subdivision unless the county commission of such county shall certify in writing to the State Board of Health, not later than January 1, of each year, that the county does desire to participate in the Hospital Service Program for Indigents during the current fiscal year and that the county commission of the county has budgeted for, and made an appropriation of, County Funds sufficient to match, dollar for dollar, all or a portion of the amount of State Funds allotted the county during the current fiscal year under the provisions of this subdivision; and the county commission shall also certify the amount of such State Funds the county will match, dollar for dollar. The term 'County Funds,' as used in this subdivision, shall not include any funds allotted or apportioned to any county under the provisions of subdivision (1) of this subsection. In the event that the county commission of any county fails or refuses to certify to the State Board of Health that the county does desire to participate in the Hospital Service Program for Indigents under the provisions of this article, in the manner prescribed in this subdivision, and that the county has budgeted for, and made an appropriation of, county funds sufficient to match, dollar for dollar, all, or a portion of, the State Funds allotted to the county during the current fiscal year under the provisions of this subdivision or in the event the amount of county funds so certified by the county commission of a county is not sufficient to match, dollar for dollar, all of the State Funds allotted to the county under the provisions of this subdivision, then the amount of such State Funds which would have inured to any such county and the amount of state funds remaining unmatched by any such county shall be apportioned among the remaining participating counties who have matched all of the State Funds allotted to them under the provisions of this subdivision, in the proportion which the population of each such participating county bears to the total population of all such participating counties, according to the last or any subsequent federal decennial census, provided the county commission of each such county shall make an appropriation of county funds sufficient to match, dollar for dollar, the amount of any such State Funds allotted to the county under this subdivision. If any State Funds remain unmatched after such second apportionment, further allocations of such unmatched state funds shall be made in the same manner, but no county shall receive any State Funds under the provisions of this subdivision unless the county commission of the county shall make an appropriation of County Funds sufficient to match, dollar for dollar, the amount of such State Funds.

(b) All funds allotted to any county under the provisions of this section shall be used exclusively in providing hospitalization for indigents, in the manner and to the extent provided for by this article, and for no other purpose.

(c) If all the funds allotted to any county under the provisions of this article shall have been expended in providing hospitalization for indigents, in the manner provided in this section, prior to the end of any current fiscal year, such county shall not be under any financial obligation under the provisions of this article during the remainder of such current fiscal year.

Any unexpended funds appropriated to the State Board of Health for allocation among the various counties under the provisions of this article shall not revert to the State Treasury at the end of any fiscal year. Such unexpended funds remaining to the credit of the State Board of Health at the end of any fiscal year shall be added to, and shall become a part of, any funds made available to the board for allocation among the various counties, under the provisions of this article, during the succeeding fiscal year.

Any unexpended funds allocated to any county under the provisions of this article shall not revert to the State Board of Health at the end of any fiscal year, but shall remain to the credit of the county to which they were allocated by the board. Such unexpended funds shall be used by the county solely for the purpose of providing hospitalization for indigents during the succeeding fiscal year, as provided in this article, and shall not be used for the purpose of matching any State Funds which may be allocated to such county, under the provisions of this article, during such succeeding fiscal year.

In any county in which a Special County Tax is levied and collected, pursuant to the provisions of any amendment to the Constitution heretofore adopted, for the purpose of acquiring, constructing, equipping, operating and maintaining public hospitals, public clinics, public health centers and related public health facilities of any kind, or for any one or more of the purposes included within the meaning of the term 'public hospital purposes,' the county commission of the county is hereby authorized to appropriate so much of the proceeds of such tax as may be necessary for the purpose of carrying out the provisions of this article; provided, that if any portion of the proceeds of such tax has been heretofore pledged to the payment of any bonds, warrants, notes or other obligations or evidences of indebtedness, such portion of the proceeds of the tax as shall have been so pledged shall not be used for any purpose except in payment of such bonds, warrants, notes or other obligations or evidences of indebtedness. The county commission of the county is also authorized to appropriate, out of any funds in the County Treasury not otherwise appropriated, such amounts as may be necessary in carrying out the provisions of this article.

The expenses incurred by the State Board of Health in the administration of this article during each fiscal year shall be budgeted, appropriated and allotted in the same manner as other administrative expenses of the board are budgeted, appropriated and allotted, but such expenses shall be paid out of any funds appropriated to the board for use in carrying out the provisions of this article.

In the event any Federal Funds are made available to the state by the federal government, or any agency or instrumentality thereof, for use in carrying out the purposes of this article, the State Board of Health is authorized to take such action and promulgate and adopt such rules and regulations as may be necessary in order to qualify for and obtain such funds.

Nothing contained in this section shall be construed to prevent the Department of Pensions and Security from complying with the requirements of the Federal Social Security Act, as amended, in relation to the administration by said department of the program of medical care, including hospitalization, for persons eligible for public assistance.

Nothing contained in this section shall be construed to prevent the State Department of Education from carrying out the provisions of the approved State Plans for vocational rehabilitation service and crippled children's service in cooperation with the United States Department of Health, Education and Welfare.

Any person, firm or corporation who shall, either directly or indirectly, charge or receive anything of value for assisting any person in making application for, or obtaining, indigent hospitalization under the provisions of this article shall be guilty of a misdemeanor and, upon conviction, shall be punished as prescribed by law.

Any person desiring licensing under this article shall apply to the State Board of Health therefor. The applicant shall state the name of the applicant and whether an individual, partnership, corporation or other entity, the type of institution for which a license is desired, the location thereof and the name of the person in direct supervision and charge thereof. The person in charge of such hospital must be at least 19 years of age and of reputable and responsible character. The applicant shall submit evidence of ability to comply with the minimum standards provided in this article or by regulations issued under its authority.

The application for a license to operate a hospital other than an assisted living facility or a specialty care assisted living facility rising to the level of intermediate care shall be accompanied by a standard fee of two hundred dollars ($200), plus a fee of five dollars ($5) per bed for each bed over 10 beds to be licensed in accordance with regulations promulgated under Section 22-21-28. Increase in a hospital's bed capacity during the calendar year is assessed at the standard fee of two hundred dollars ($200) plus five dollars ($5) each for the net gain in beds. The initial licensure fee and subsequent annual licensure renewal fee for an assisted living facility and for a specialty care assisted living facility rising to the level of intermediate care shall be two hundred dollars ($200) plus fifteen dollars ($15) for each bed. A license renewal application for any hospital, as defined by this article, which is not received by the expiration date in a properly completed form and accompanied by the appropriate renewal fee shall be subject to a late penalty equal to two hundred fifty dollars ($250) or 100 percent of the renewal fee, whichever is greater. No fee shall be refunded. All fees received by the State Board of Health under the provision of this article shall be paid into the State Treasury to the credit of the State Board of Health and shall be used for carrying out the provisions of this article. A license granted under this article shall expire on December 31 of the year in which it was granted. A license certificate shall be on a form prescribed by the department, and shall be posted in a conspicuous place on the licensed premises. Licenses shall not be transferable or assignable and shall be granted only for the premises named in the application. Licenses may be renewed from year to year upon application, investigation, and payment of the required license fee, as in the case of procurement of the original license. All fees collected under this article are hereby appropriated for expenditure by the State Health Department. All hospitals which are accredited by the joint commission on accreditation of hospitals shall be deemed by the State Health Department to be licensable without further inspection or survey by the personnel of the State Department of Health. Further accreditation by the joint commission on accreditation of hospitals shall in no way relieve that hospital of the responsibility of applying for licensure and remitting the appropriate licensure fee as specified in this article.

There is hereby authorized the establishment, maintenance, administration and operation of any trust established by agreement of any hospitals or other health care units licensed as such by the State of Alabama (hereinafter referred to as 'hospitals') or by agreement of any dental practitioners licensed as such by the State of Alabama (hereinafter referred to as 'dentists') as grantors, with such hospitals and dentists as beneficiaries, for the purpose of insuring against general public liability claims based upon acts or omissions of such hospitals or dentists, including without limitation, claims based upon malpractice.

Such hospitals or dentists may, by trust agreement among themselves and a trustee or trustees of their selection, specify the terms, conditions and provisions of such a trust.

The trustees of trusts established pursuant to Section 22-21-240 shall hold the legal title to all property at any time belonging to the trust. They shall have control over such property as well as the control and management of the business and affairs of the trust. Liability to third persons for any act, omission or obligation of a trustee of a trust, when acting in such capacity, shall extend to the whole of the trust estate or so much thereof as may be necessary to discharge such obligation, but no trustee shall be personally liable for any such act, omission or obligation. The trustees shall have such powers as to the investment of the trust estate as may be set out in the declaration of trust; provided, however, that the investments of the trust shall be limited to the same type, kind and quality as those required of a domestic casualty insurer. Without limiting the generality of the foregoing, the trustees shall have any powers, whether conferred upon them by the agreement of trust or otherwise, to perform all acts necessary or desirable to the conduct of the business of a public liability insurer.

No hospital or dentist who or which is a participant in such a trust, as a grantor, member, beneficiary or otherwise, shall be liable or obligated to the trust, to the trustee, to any other grantor, member or beneficiary, to any creditor of the trust or to any other person by virtue of his or its participation other than for the payment of his or its full agreed contribution to the trust in accordance with the trust agreement. Without limiting the generality of the foregoing, no participating hospital or dentist shall incur any other liability of any nature whatever because of or arising out of his or its participation in such a trust.

All of the provisions of this article shall apply to and shall confer all rights, privileges, exemptions and immunities upon any trust established for the purposes contemplated by this article and the grantors, members, beneficiaries, participants and trustees thereof, whether such trust was established before or after April 7, 1977.

(a) The State Board of Health may grant licenses for the operation of hospitals which are found to comply with the provisions of this article and any regulations lawfully promulgated by the State Board of Health.

(b) The State Board of Health may suspend or revoke a license granted under this article on any of the following grounds:

(1) Violation of any of the provisions of this article or the rules and regulations issued pursuant thereto.

(2) Permitting, aiding or abetting the commission of any illegal act in the institution.

(3) Conduct or practices deemed by the State Board of Health to be detrimental to the welfare of the patients of the institution.

(c) Before any license granted under this article is suspended or revoked, written notice shall be given the licensee, stating the grounds of the complaint, and the date, time, and place set for the hearing of the complaint, which date of hearing shall be not less than 30 days from the date of the notice. The notice shall be sent by registered or certified mail to the licensee at the address where the institution concerned is located. The licensee shall be entitled to be represented by legal counsel at the hearing.

(d) If a license is revoked as provided in this section, a new application for license shall be considered by the State Board of Health if, when, and after the conditions upon which revocation was based have been corrected and evidence of this fact has been furnished. A new license shall then be granted after proper inspection has been made and all provisions of this article and rules and regulations promulgated under this article have been satisfied.

Any party aggrieved by a final decision or order of the Board of Health suspending or revoking a license is entitled to a review of such decision or order by taking an appeal to the circuit court of the county in which the hospital is located or is to be located.

As used in this article, the following words and terms, and the plurals thereof, shall have the meanings ascribed to them in this section, unless otherwise required by their respective context:

(1) ACQUISITION. Obtaining the legal equitable title to a freehold or leasehold estate or otherwise obtaining the substantial benefit of such titles or estates, whether by purchase, lease, loan or suffrage, gift, devise, legacy, settlement of a trust or means whatever, and shall include any act of acquisition. The term 'acquisition' shall not mean or include any conveyance, or creation of any lien or security interest by mortgage, deed of trust, security agreement, or similar financing instrument, nor shall it mean or include any transfer of title or rights as a result of the foreclosure, or conveyance or transfer in lieu of the foreclosure, of any such mortgage, deed of trust, security agreement, or similar financing instrument, nor shall it mean or include any gift, devise, legacy, settlement of trust, or other transfer of the legal or equitable title of an interest specified hereinabove by a natural person to any member of such person's immediate family. For the purposes of this section 'immediate family' shall mean the spouse of the grantor or transferor and any other person related to the grantor or transferor to the fourth degree of kindred as such degrees are computed according to law.

(2) APPLICANT. Any person, as defined in this section, who files an application for a certificate of need.

(2.1) CAMPUS. The contiguous real property, contained within a single county, which is owned or leased by a health care facility and upon which is located the buildings and any other real property used by the health care facility to provide existing institutional health services which are subject to review.

(3) CAPITAL EXPENDITURE. An expenditure, including a force account expenditure (i.e., an expenditure for a construction project undertaken by the health care facility as its own contractor), which, under generally accepted accounting principles, is not properly chargeable as an expense of operation and maintenance and which satisfies any of the following:

a. Exceeds two million dollars ($2,000,000) indexed annually for inflation for major medical equipment; eight hundred thousand dollars ($800,000) for new annual operating costs indexed annually for inflation; four million dollars ($4,000,000) indexed annually for inflation for any other capital expenditure. The index referenced in this paragraph shall be the Consumer Price Index Market Basket Professional Medical Services index as published by the U.S. Department of Labor, Bureau of Labor Statistics. The SHPDA shall publish this index information to the general public.

b. Changes the bed capacity of the facility with respect to which such expenditure is made.

c. Substantially changes the health services of the facility with respect to which such expenditure is made.

(4) CONSTRUCTION. Actual commencement, with bona fide intention of completing the construction, or completion of the construction, erection, remodeling, relocation, excavation, or fabrication of any real property constituting a facility under this article, and the term construct shall mean and include any act of construction. 'Ground breaking ceremony,' 'receipt of bids,' 'receipt of quotation,' or similar action that will permit unilateral termination without penalty shall not be considered construction.

(5) FIRM COMMITMENT or OBLIGATION. Any of the following:

a. Any executed, enforceable, unconditional written agreement or contract not subject to unilateral cancellation for the acquisition or construction of a health care facility or purchase of equipment therefor.

b. Actual construction of facilities peculiarly adapted to the furnishing of one or more particular services and with the bona fide intention of furnishing such service or services.

c. Any executed, unconditional written agreement not subject to unilateral cancellation for the bona fide purpose of furnishing one or more services.

(6) HEALTH CARE FACILITY. General and specialized hospitals, including tuberculosis, psychiatric, long-term care, and other types of hospitals, and related facilities such as, laboratories, out-patient clinics, and central service facilities operated in connection with hospitals; skilled nursing facilities; intermediate care facilities; skilled or intermediate care units operated in veterans' nursing homes and veterans' homes, owned or operated by the State Department of Veterans' Affairs, as these terms are described in Chapter 5A (commencing with Section 31-5A-1) of Title 31, rehabilitation centers; public health centers; facilities for surgical treatment of patients not requiring hospitalization; kidney disease treatment centers, including free-standing hemodialysis units; community mental health centers and related facilities; alcohol and drug abuse facilities; facilities for the developmentally disabled; and home health agencies and health maintenance organizations. The term health care facility shall not include the offices of private physicians or dentists, whether for individual or group practices and regardless of ownership, or Christian Science sanatoriums operated or listed and certified by the First Church of Christ, Scientist, Boston, Massachusetts, or a veterans' nursing home or veterans' home owned or operated by the State Department of Veterans' Affairs, not to exceed 150 beds to be built in Bay Minette, Alabama, and a veterans' nursing home or veterans' home owned or operated by the State Department of Veterans' Affairs not to exceed 150 beds to be built in Huntsville, Alabama, for which applications for federal funds under federal law are being considered by the U.S. Department of Veterans' Affairs prior to March 18, 1993.

(7) HEALTH SERVICE AREA. A geographical area designated by the Governor, as being appropriate for effective planning and development of health services.

(8) HEALTH SERVICES. Clinically related (i.e., diagnostic, curative, or rehabilitative) services, including alcohol, drug abuse, and mental health services customarily furnished on either an in-patient or out-patient basis by health care facilities, but not including the lawful practice of any profession or vocation conducted independently of a health care facility and in accordance with applicable licensing laws of this state.

(9) INSTITUTIONAL HEALTH SERVICES. Health services provided in or through health care facilities or health maintenance organizations, including the entities in or through which such services are provided.

(9.1) MAJOR MEDICAL EQUIPMENT. Medical clinical equipment intended for use in the diagnosis or treatment of medical conditions, which is used to provide institutional health services of a health care facility which are subject to review, and which expenditure exceeds the thresholds referenced in this section and in Section 22-21-263.

(10) MODERNIZATION. The alteration, repair, remodeling, and renovation of existing buildings, including equipment within the existing buildings. Modernization does not include the replacement of existing buildings which are used by a health care facility to provide institutional health services which are subject to review and does not include the replacement of major medical equipment.

(11) PERSON. Any person, firm, partnership, association, joint venture, or corporation, the State of Alabama and its political subdivisions or parts thereof, and any agencies or instrumentalities and any combination of persons herein specified, but person shall not include the United States or any agency or instrumentality thereof, except in the case of voluntary submission to the regulations established by this article.

(12) RURAL HEALTH CARE PROVIDER/APPLICANT/HOSPITAL. A provider or applicant or hospital which is designated by the United States Government Health Care Financing Administration as rural.

(13) STATE HEALTH PLAN. A comprehensive plan which is prepared triennially and reviewed at least annually and revised as necessary by the Statewide Health Coordinating Council, with the assistance of the State Health Planning and Development Agency, and approved by the Governor.

The Statewide Health Coordinating Council shall meet at least annually to determine whether revisions for the State Health Plan are necessary. If the Statewide Health Coordinating Council fails to meet and to review or revise the State Health Plan on an annual basis, there shall be no fees required on all certificate of need applications filed with the Certificate of Need Review Board until the Statewide Health Coordinating Council meets and reviews or revises the State Health Plan. For purposes of this paragraph, the annual meeting of the Statewide Health Coordinating Council shall occur on or before August 1 of each calendar year.

The State Health Plan shall provide for the development of health programs and resources to assure that quality health services will be available and accessible in a manner which assures continuity of care, at reasonable costs, for all residents of the state. Nothing in this section should be construed as permitting expenditures for facilities, services, or equipment which are inconsistent with the State Health Plan.

(14) STATE HEALTH PLANNING AND DEVELOPMENT AGENCY (SHPDA). An agency of the State of Alabama which is designated by the Governor as the sole State Health Planning and Development Agency, which shall consist of three consumers, three providers, and three representatives of the Governor who all shall serve staggered terms and all be appointed by the Governor. Where used in this article, the terms, 'state agency,' and the 'SHPDA,' shall be synonymous and may be used interchangeably.

(15) STATEWIDE HEALTH COORDINATING COUNCIL. A council, appointed by the Governor, established pursuant to Sections 22-4-7 and 22-4-8 to advise the State Health Planning and Development Agency on matters relating to health planning and resource development and to perform other functions as may be delegated to it, to include an annual review of the State Health Plan.

(16) TO OFFER. When used in connection with health services, a health care facility or health maintenance organization that holds itself out as capable of providing, or as having the means for the provision of, specified health services.

The Legislature of the State of Alabama declares that it is the public policy of the State of Alabama that a certificate of need program be administered in the state to assure that only those health care services and facilities found to be in the public interest shall be offered or developed in the state. It is the purpose of the Legislature in enacting this article to prevent the construction of unnecessary and inappropriate health care facilities through a system of mandatory reviews of new institutional health services, as the same are defined in this article.

(a) All new institutional health services which are subject to this article and which are proposed to be offered or developed within the state shall be subject to review under this article. No institutional health services which are subject to this article shall be permitted which are inconsistent with the State Health Plan. For the purposes of this article, new institutional health services shall include any of the following:

(1) The construction, development, acquisition through lease or purchase, or other establishment of a new health care facility or health maintenance organization.

(2) Any expenditure by or on behalf of a health care facility or health maintenance organization which, under generally accepted accounting principles consistently applied, is a capital expenditure in excess of two million dollars ($2,000,000) indexed annually for inflation for major medical equipment; in excess of eight hundred thousand dollars ($800,000) for new annual operating costs indexed annually for inflation; in excess of four million dollars ($4,000,000) indexed annually for inflation for any other capital expenditure by or on behalf of a health care facility or a health maintenance organization. The index referenced in this subdivision shall be the Consumer Price Index Market Basket Professional Medical Services index as published by the U.S. Department of Labor, Bureau of Labor Statistics. The SHPDA shall publish this index information to the general public.

(3) A change in the existing bed capacity of a health care facility or health maintenance organization through the addition of new beds, the relocation of one or more beds from one physical facility to another, or reallocation among services of existing beds through the conversion of one or more beds from one category to another within the following bed categories: general medical surgical, inpatient psychiatric, inpatient/residential alcohol and drug abuse or inpatient rehabilitation beds, or long-term care beds including skilled nursing care, intermediate care, transitional care, and swing beds. Notwithstanding any provision of this subdivision to the contrary, any health care facility or health maintenance organization in which at least 65 percent of the beds are dedicated or used exclusively for acute care services, general medical surgical, or nonspecialized services may reallocate existing beds within the following specialized bed categories: inpatient psychiatric, inpatient/residential alcohol and drug rehabilitation beds, to acute care services, or general medical surgical beds without first obtaining a certificate of need from the SHPDA.

(4) Health services proposed to be offered in or through a health care facility or health maintenance organization, and which were not offered on a regular basis in or through such health care facility or health maintenance organization within the 12 month period prior to the time such services would be offered. Health services, other than those health services involving long-term care services, including without limitation, skilled and intermediate nursing home care, swing beds services, or transitional care services, provided directly by acute care hospitals classified as rural by the U.S. Bureau of Census/Office of Management and Budget, United States Government Health Care Financing Administration or acute care hospitals with less than 105 beds that are located over 20 miles from the nearest acute health care facility located within Alabama shall not be subject to this subdivision but shall be subject to the other subdivisions of this subsection. Provided, however, that the exemption from this subdivision herein established shall not apply to home health services provided outside of the county in which the hospital is located.

(b) The four conditions of new institutional health services listed in this section shall be mutually exclusive.

(c) Notwithstanding all other provisions of this article to the contrary, those facilities and distinct units operated by the Department of Mental Health and Mental Retardation and those facilities and distinct units operating under contract or subcontract with the Department of Mental Health and Mental Retardation where the contract constitutes the primary source of income to the facility shall not be subject to review under this article.

(d) For the purposes of this article, and notwithstanding all other provisions of this article to the contrary and notwithstanding any and all provisions of the State Health Plan on September 1, 2003, relating to lithotripsy, magnetic resonance imaging, and positron emission tomography, new institutional health services, which are subject to this article, shall not include any health services provided by a mobile or fixed-based extracorporeal shock wave lithotripter, mobile or fixed-based magnetic resonance imaging, or positron emission tomography proposed to be offered in or through a health care facility or health maintenance organization. The SHPDA, after consultation with and the advice of the Statewide Health Coordinating Council, in accordance with the Alabama Administrative Procedure Act and within 60 days of September 1, 2003, shall cause the State Health Plan to be amended to repeal and delete all sections of the Alabama State Health Plan relating to mobile and fixed-based lithotripters, mobile and fixed-based magnetic resonance imaging, and positron emission tomography, and cause the amendment and repeal of any other SHPDA rules and regulations inconsistent with this article.

The SHPDA, pursuant to the provisions of Section 22-21-274, shall prescribe by rules and regulations the criteria and clarifying definitions for reviews covered by this article. These criteria shall include at least the following:

(1) Consistency with the appropriate State Health Facility and services plans effective at the time the application was received by the State Agency, which shall include the latest approved revisions of the following plans:

a. The most recent Alabama State Health Plan which shall include updated inventories and separate bed need methodologies for inpatient rehabilitation beds, inpatient psychiatric beds and inpatient/residential alcohol and drug abuse beds.

b. Alabama State Health Plan for Services to the Mentally Ill.

c. Alabama State Plan for Rehabilitation Facilities.

d. Alabama Developmental Disabilities Plan.

e. Alabama State Alcoholism Plan.

f. Such other State Plans as may from time to time be required by state or federal statute.

(2) The relationship of services reviewed to the long-range development plan (if any) of the person providing or proposing such services.

(3) The availability of alternative, less costly or more effective methods of providing such services.

(4) Determination of a substantially unmet public requirement for the proposed health care facility, service or capital expenditure that is consistent with orderly planning within the state and the community for furnishing comprehensive health care, such determination to be established on the merits of the proposal after giving appropriate consideration to:

a. Financial feasibility of the proposed change in service of facility;

b. Specific date supporting the demonstration of need for the proposed change in facility or service shall be reasonable, relevant and appropriate;

c. Evidence of evaluation and consistency of the proposed change in facility or service with the facility's and the community's overall health and health-related plans;

d. Evidence of consistency of the proposal with the need to meet nonpatient care objectives of the facility such as teaching and research;

e. Evidence of review of the proposed facility, service or capital expenditure when appropriate and requested by other state agencies.

f. Evidence of the locational appropriateness of the proposed facility or service such as transportation accessibility, manpower availability, local zoning environmental health, etc.;

g. Reasonable potential of the facility to meet licensure standards.

h. Reasonable consideration shall be given to medical facilities involved in medical education.

(5) Determination that the person applying is an appropriate applicant, or the most appropriate applicant in the event of duplicative applications, for providing the proposed health care facility or service, such determination to be established from the evidence as to the ability of the person, directly or indirectly, to render adequate service to the public, including affirmative evidence as to the following:

a. Professional capability of the facility proposing the capital expenditure;

b. Management capability of the facility proposing the capital expenditure;

c. Adequate manpower to enable the facility to offer the proposed service;

d. Evidence of the existence of the applicant's long-range planning program and an ongoing planning process;

e. Evidence of existing and ongoing monitoring of utilization and the fulfilling of unmet or under met health needs in the case of expansion;

f. Evidence of communication with all planning, regulatory, utility agencies and organizations that influence the facility's destiny.

(6) Consideration of the special needs and circumstances of those entities which provide a substantial portion of their services or resources, or both, to individuals not residing in the health service area in which the entities are located or in adjacent health service areas.

(7) The special needs and circumstances of health maintenance organizations.

(8) In case of a construction project, consideration shall be given to:

a. The costs and methods of the proposed construction including the costs and methods of energy provision; and

b. The probable impact of the construction project reviewed on the costs of providing health services.

It is not legislative intent to forgive, ratify or confirm any illegal actions or presentation of information known to be false on the part of applicants for certificates of need or the agents or employees of either the applicants or SHPDA.

It is not the intent of the Legislature to forgive, ratify, or confirm any illegal actions or presentation of information known to be false on the part of applicants for certificates of need or the agents or employees of either the applicants or the State Health Planning and Development Agency.

The Legislature finds and determines that the well-being and health of the citizens of the State of Alabama will be enhanced by the development and growth of a state of the art digital, automated hospital using the latest technological advances in healthcare to lower healthcare costs, reduce human errors, and provide patients with the best medical care available, and that it is in the best interest of the state to induce the location of one all-digital, automated hospital, meeting the requirements of a digital hospital as provided in subsection (f) of Section 22-21-265, in a county in which is located an accredited medical school and teaching facility and not less than 3,000 licensed general hospital beds, in order to set new standards for quality, efficiency, and cost-effective delivery of healthcare services, and to promote these purposes by exempting from the certificate of need review process the first all-digital, automated hospital to be developed and located in such a county. The Legislature further finds and declares the exemption to be granted by subsection (f) of Section 22-21-265 and the purposes to be accomplished hereby are proper governmental and public purposes and that the inducement of the location of an all-digital, automated hospital in such a county is of paramount importance to the development of state of the art healthcare in this state.

(a) On or after July 30, 1979, no person to which this article applies shall acquire, construct, or operate a new institutional health service, as defined in this article, or furnish or offer, or purport to furnish a new institutional health service, as defined in this article, or make an arrangement or commitment for financing the offering of a new institutional health service, unless the person shall first obtain from the SHPDA a certificate of need therefor. Notwithstanding any provisions of this article to the contrary, those facilities and distinct units operated by the Department of Mental Health and Mental Retardation, and those facilities and distinct units operating under contract or subcontract with the Department of Mental Health and Mental Retardation where the contract constitutes the primary source of income to the facility, shall not be required to obtain a certificate of need under this article.

(b) Notwithstanding all other provisions of this article to the contrary, the replacement of equipment by health care facilities shall be exempt from certificate of need review, provided:

(1) The replacement does not change the purpose, use, or application of the equipment.

(2) The existing equipment is taken out of service.

(3) The replacement equipment does not enable the health care facility to expand its health services.

(4) The replacement equipment does not enable the health care facility to provide any health services not previously provided on a regular basis.

A determination of whether the acquisition of equipment is exempt from review under this section shall be made by the Executive Director of the SHPDA upon the filing of an application requesting the determination, on the form or forms prescribed by the CON Review Board, together with a fee in the amount of 10 percent of the fee provided in Section 22-21-271. If it is determined that the replacement is not reviewable pursuant to this section, the applicant shall be notified in writing that no certificate of need is required. The SHPDA shall define an appeals process.

Any provision in this article to the contrary notwithstanding, no rural hospital shall be required to submit an application fee when filing a request for determination under this section.

(c) Notwithstanding any other provision of this article to the contrary, the modernization or construction of a nonclinical building, parking facility, or any other noninstitutional health services capital item on the existing campus of a health care facility shall be exempt from certificate of need review, provided the construction or modernization does not allow the health care facility to provide new institutional health services subject to review and not previously provided on a regular basis.

(d) The SHPDA shall maintain the Alabama State Health Plan to include separate bed need methodologies for inpatient psychiatric services, inpatient rehabilitation services, and inpatient/residential alcohol and drug abuse services. The SHPDA shall utilize these methodologies in considering all certificate of need applications.

(e) Notwithstanding all other provisions of this article to the contrary, the increase in the number of nursing home beds of a health care facility licensed pursuant to Section 22-21-260(6) as a skilled nursing care facility or an intermediate care facility, but excluding an increase in the bed capacity of an intermediate care facility designated as an ICF-MR by the State Board of Health and operated by the state Department of Mental Health and Mental Retardation which facilities shall be governed by the other provisions of this article, shall be exempt from certificate of need review, provided:

(1) The increase does not exceed 10 percent of the total skilled nursing beds of the facility, rounded to the nearest whole number, or 10 beds, whichever is greater.

(2) The average rate of occupancy for the nursing home beds of the facility is not less than 95 percent, rounded to the nearest whole number, for the 24-month period ending on June 30 of the year immediately preceding the application for exemption from the certificate of need review.

(3) The aggregate average rate of occupancy for all other skilled nursing facilities and intermediate nursing facilities in the same county as the requesting facility's is not less than 95 percent, rounded to the nearest whole number, for the 24-month period ending on June 30 of the year immediately preceding the application for exemption from certificate of need review.

(4) The increase does not require capital expenditures exceeding the capital expenditure thresholds prescribed in Section 22-21-263(a)(2).

(5) The facility has not been granted an increase of beds under this exemption within the immediately preceding 24-month period.

In calculating the average occupancy for the facility under subdivision (2) of this subsection and for all other skilled and intermediate nursing facilities in the same county under subdivision (3) of this subsection, beds previously granted, including beds granted after January 1, 1995, to the facility, and to other skilled or intermediate nursing facilities in the same county as the requesting facility, pursuant to a certificate of need or to this exemption shall be deemed built and available for occupancy as of the date granted regardless of when the beds were placed in service. SHPDA shall promulgate regulations to determine how occupancy shall be calculated for the purpose of this subsection, taking into account certain factors such as, but without limitation, disregarding beds that have not been available for use for the three years next preceding the period for which occupancy is being measured.

(6) The facility has had an average daily census comprised of 40 percent of Medicaid patients within the fiscal year ended June 30 immediately prior to filing an application for exemption under this section.

(7) Any exemption to add beds without a certificate of need shall expire and be deemed null and void unless the beds are placed in service not less than 12 months after the date the exemption is granted. Notwithstanding the foregoing, SHPDA may promulgate rules permitting the Executive Director of SHPDA to grant one extension not to exceed twelve months upon a showing of substantial progress. Notwithstanding the foregoing, any exemption granted by the SHPDA prior to April 10, 1995, for facilities which have agreed to the provisions of the June 21, 1995 consent decree, is ratified and confirmed and shall be deemed to have been granted in accordance with this subsection. In addition, any facility which was granted an exemption by the SHPDA prior to April 10, 1995, is ratified and confirmed and shall be deemed to have been approved as of the latter of the actual date approved or March 3, 1995 and to have been granted in accordance with this subsection.

A determination of whether the increase in beds is exempt from review under this section shall be made by the Executive Director of SHPDA upon the filing of an application requesting the determination, on the form or forms prescribed by the CON Review Board, together with a fee in an amount to be determined by the review board in accordance with Section 22-21-271(a). The SHPDA shall promulgate rules affording an applicant pursuant to this subsection a right to appeal adverse rulings.

Applications pursuant to this section for exemption from certificate of need review for an increase in bed capacity shall be made only during the 90-day period beginning January 1 through March 31 of each year.

The provisions of this section shall automatically terminate and become null and void on December 31, 2005, unless a bill to continue or reestablish the provisions of this section shall be passed by both houses of the Legislature and enacted into law.

(f) Notwithstanding all other provisions of this article to the contrary, an existing home health agency may accept referrals of patients from outside its Medicare certified service area without obtaining a certificate of need, provided all of the following conditions are met:

(1) The county of the referral is contiguous to a county for which the home health agency holds a certificate of need or an exemption granted pursuant to provisions of Section 22-21-263.

(2) The home health agency establishes no branch office in the county of the referral.

(3) The home health agency incurs no capital expenditures in the county of the referral in excess of five hundred dollars ($500).

The home health agency shall notify the SHPDA that it has begun accepting referrals from a county contiguous to its service area within 14 days of the receipt of the first referral from the contiguous county. No notice to the SHPDA shall be required related to subsequent referrals in the same contiguous county. The SHPDA shall take steps to provide for the inclusion of statistical information relating to the service to referrals outside the Medicare certified service area in its annual statistical reports. The SHPDA shall charge the home health agency no fee for servicing referrals outside the service area.

(g) Notwithstanding all other provisions of this article to the contrary, the replacement, including relocation in the same county, of an existing acute care hospital by the construction of a new digital hospital shall be exempt from certificate of need review provided the hospital meets all of the following:

(1) The digital hospital design incorporates a fully automated centralized digital system to integrate all current and future medical technologies with capabilities for all systems to interface in a comprehensive medical record. The integration of medical technology shall include, but not be limited to, all patient medical records, diagnostic images, diagnostic reports, laboratory results, pharmacy data, pharmacological interactions, contraindications, surgical reports, surgical streaming video, pathology reports, unique patient identification, voice activated transcription, wireless applications, automated billing with electronic transmission capability, and electronic procurement systems.

(2) The electronic medical systems shall interface on a single electronic platform to produce the most favorable patient outcome with a reduction in medical errors.

(3) Medical records shall only be accessed by authorized clinical personnel who are provided access by hospital consoles, physician offices, physician homes, or any remote location via unique identification requirements.

(4) Patient rooms shall be designed to provide optimal electronic documentation of vital signs, real-time data entry, any and all treatment protocols, physician orders, and patient progression.

(5) The digital hospital shall have a minimum project cost of one hundred million dollars ($100,000,000) to include design, systems, property, buildings, equipment, and electronic software development.

(6) The construction and design of the facility shall utilize technology and materials for patient flow to limit general public contact with patient care areas, healthcare workers, and hazardous materials to reduce the potential for cross-contamination and resulting direct medical costs.

(7) The digital hospital environment shall be energy efficient, cost effective, and clinically designed to produce the most favorable environment.

(8) The digital hospital shall meet all of the following conditions:

a. Operate as an acute care hospital.

b. Replace an existing acute care hospital located in the same county as the digital hospital.

c. Be licensed for no more than the same number of hospital beds and for the same bed categories as the existing acute care hospital to be replaced by the digital hospital, unless otherwise approved by the Certificate of Need Review Board through issuance of a certificate of need.

d. Shall not exceed the same scope of health services, including the same amount of diagnostic or therapeutic major medical equipment, as the existing acute care hospital to be replaced by the digital hospital, unless otherwise approved by the SHPDA approval process.

e. Shall not exceed the number of inpatient and outpatient surgical suites as contained in the existing acute care hospital to be replaced by the digital hospital, unless otherwise approved by the SHPDA approval process.

(9) The existing acute care hospital, replaced by the digital hospital, shall be taken out of service as an acute care hospital and shall not be converted to or used as another health care facility, unless approved by the Certificate of Need Review Board through issuance of a certificate of need.

(10) Any presently reviewable health service which is proposed to be offered by the digital hospital which was not offered on a regular basis within the preceding twelve-month period in or through the existing acute care hospital to be replaced by the digital hospital shall be subject to Certificate of Need Review Board approval through issuance of a certificate of need.

(11) The only digital hospital exempt from certificate of need review shall be the first digital hospital developed in the state, and the digital hospital shall be located in a county where there is located an accredited medical school and teaching facility and not less than 3,000 licensed general hospital beds, and construction shall be commenced within one year from the issuance of a certificate of need by SHPDA.

A determination whether the construction of a digital hospital is exempt from review under this subsection shall be made by the Executive Director of the SHPDA, upon the filing of an application requesting the determination, on the forms acceptable to the Executive Director of SHPDA together with an application fee as provided in Section 22-21-271. If it is determined that the replacement facility is not reviewable pursuant to this section, SHPDA shall notify the applicant in writing that the application is exempt from certificate of need review and shall issue a certificate of need. The applicant shall have a right of appeal from any adverse ruling denying exemption and the SHPDA shall promulgate rules affording an applicant a right to appeal adverse rulings pursuant to this subsection.

The provisions of this subsection shall automatically terminate and become null and void upon the issuance of the first certificate of need for the construction and operation of a digital replacement hospital as herein provided or on December 31, 2005, whichever first occurs, unless a bill to continue or reestablish the provisions of this subsection shall be passed by both houses of the Legislature and enacted into law.

No certificate of need for new inpatient facilities or services shall be issued unless the SHPDA makes each of the following findings:

(1) That the proposed facility or service is consistent with the latest approved revision of the appropriate state plan effective at the time the application was received by the state agency;

(2) That less costly, more efficient or more appropriate alternatives to such inpatient service are not available, and that the development of such alternatives has been studied and found not practicable;

(3) That existing inpatient facilities providing inpatient services similar to those proposed are being used in an appropriate and efficient manner consistent with community demands for services;

(4) That in the case of new construction, alternatives to new construction (e.g., modernization and sharing arrangement) have been considered and have been implemented to the maximum extent practicable; and

(5) That patients will experience serious problems in obtaining inpatient care of the type proposed in the absence of the proposed new service.

Any application for a certificate of need under Section 22-21-265, for a modification thereto or for an extension thereof shall be made in written form and shall include such information and supporting data relevant to the merits of the application as may be prescribed by the approved rules and regulations of the SHPDA. The application shall be filed with the SHPDA not less than 90 days prior to the date of the proposed obligation for the capital expenditure or the inauguration of the proposed service.

Any person may apply, either independently and without notice under Section 22-21-267 or as a part of an application filed under Section 22-21-267, for an emergency certificate of need for the authorization of capital expenditures made necessary by unforeseen events which endanger the health and safety of the patients. Emergency capital expenditures include, but are not necessarily limited to, emergency expenditures to maintain quality care, to overcome failure of fixed equipment, including heating and air conditioning equipment, elevators, electrical transformers and switch gear, sterilization equipment, emergency generators, water supply and other utility connections. Applications for emergency certificates of need shall include a description of the work to be done and/or equipment to be purchased, the cost thereof, justification for considering the capital expenditure as being of an emergency nature and such other information as the SHPDA may require. Emergency certificates of need issued hereunder shall be subject to such special limitations and restrictions as the duration and right of extension or renewal as may be prescribed in the rules and regulations adopted by the SHPDA.

(a) There shall be an advisory board of 17 members to assist in the establishment of rules, regulations, and standards necessary to carry out the provisions of this article and to serve as consultants to the State Health Officer. The board shall meet at least twice each year and at the call of the State Health Officer. The members of the board shall annually elect one of its members to serve as chairman.

(b) The advisory board shall be constituted in the following manner:

(1) Four representatives of hospitals, who shall be appointed by the Board of Trustees of the Alabama Hospital Association as follows:

a. One administrator of a governmental hospital.

b. One administrator of a nongovernmental nonprofit hospital.

c. One owner or administrator of a proprietary hospital.

d. One member of a managing board of a nonprofit hospital.

(2) Three representatives who shall be doctors of medicine appointed by the Board of Censors of the Medical Association of the State of Alabama.

(3) One representative who shall be a registered nurse appointed by the Executive Board of the Alabama State Nurses Association.

(4) One representative from the State Board of Human Resources who shall be appointed by the board.

(5) One registered pharmacist actively engaged in the practices of pharmacy in the State of Alabama, to be appointed by the Executive Committee of the Alabama Pharmacy Association.

(6) Three members who shall be appointed by the Executive Committee of the Alabama Nursing Home Association, each of whom shall be the operator of a duly qualified licensed nursing home.

(7) One member who shall be appointed by the Alabama Hospice Association.

(8) Two members who shall be appointed by the Assisted Living Association of Alabama, one of whom shall be the operator of a licensed assisted living facility or licensed specialty care assisted living facility rising to the level of intermediate care with 16 or fewer beds, and one of whom shall be the operator of an assisted living facility or licensed specialty care assisted living facility rising to the level of intermediate care with more than 16 beds.

(9) One member who shall be appointed by the Governor to represent the interests of consumers. The consumer representative shall be at least 65 years of age and shall have no financial interest in any facility licensed under this article.

Each new appointee shall serve for five years or until his or her successor is appointed, whichever is later. Any vacancy caused by a member leaving the position before the expiration of his or her term shall be filled by the organization selecting the original member. The replacement member appointed shall serve for the remainder of the unexpired term.

(c) A member of the advisory board shall not be eligible to succeed himself or herself after serving one full five-year term, but shall be eligible for reappointment if he or she has served only a portion of a five-year term or if he or she has not served immediately preceding the reappointment.

(d) Members of the advisory board shall serve without compensation, but shall be entitled to reimbursement for expenses incurred in the performance of the duties of the office at the same rate allowed state employees pursuant to general law.

(a) A certificate of need issued under subsection (a) of Section 22-21-265 and Section 22-21-268 shall be valid for a period not to exceed 12 months and may be subject to one extension not to exceed 12 months, provided the criteria for extension as set forth in the rules and regulations of the SHPDA are met. If no obligation has occurred within such period, the certificate of need shall be considered terminated and shall be null and void. Should the obligation be incurred within such valid period, the certificate of need shall be continued in effect for a period not to exceed one year or the completion of the construction project, whichever shall be later, or the inauguration of the service or the actual purchase of equipment.

(b) Failure to commence the construction project within the time period stated in the construction contract or to complete the construction project within the time period specified in the construction contract, which may be extended by mutual agreement of the parties to the contract, shall render the certificate of need null and void, unless tolled or extended pursuant to statute or SHPDA rule or regulation. Provided, the SHPDA, or an administrative law judge appointed by the Governor on appeal for a fair hearing, may for causes beyond the control of the applicant, continue the certificate of need in force if commencement of the construction project is delayed for a period not to exceed 60 days or if during the specified construction period the construction work should cease for not more than six months, or in the event of default in the construction contract by the contractor, or if, for any cause, the construction work has not ceased or otherwise been stopped for a period exceeding 60 consecutive days.

(c) Applicants who held valid certificates of need which were terminated under this section may file a new application for a certificate pursuant to and subject to the provisions of this article.

(d) Upon completion of the construction and issuance of a certificate of completion or the receipt of proof of purchase of equipment, the certificate of need shall be continued in force and effect.

(e) A certificate of need shall not be transferable, assignable, or convertible, other than between members of a parent-subsidiary controlled corporate group as defined in Internal Revenue Code, 26 U.S.C. §1563 (a)(1), and shall be valid solely to the person and purpose named thereon, except to such other member of the controlled group, or by change of name or merger with another corporation.

(f) The transfer of stock in, or change of name or merger of, a corporation which holds a certificate of need shall not constitute a transfer, assignment, or conversion of the certificate.

(a) Any law to the contrary notwithstanding, the staff agency of the State Health Planning and Development Agency or its executive director may not increase or set any fees otherwise authorized relating to the certificate of need process pursuant to this article.

(b) Any fee increase by the staff agency of the State Health Planning and Development Agency or its executive director adopted after January 1, 1998, is rescinded and shall not be operative unless readopted in accordance with this section.

(c) Any fee increase related to the certificate of need process of the State Health Planning and Development Agency shall be adopted as a rule pursuant to the Alabama Administrative Procedure Act, Chapter 22 of Title 41.

(d)(1) For the purpose of this section, the term 'State Health Planning and Development Agency' means the CON review board which is defined as the State Health Planning and Development Agency (SHPDA) in subdivision (14) of Section 22-21-260, and which consists of three consumers, three providers, and three representatives of the Governor.

(2) For the purpose of this section, the term 'any fee related to the certificate of need process' means any fee authorized to be established by the State Health Planning and Development Agency, its staff agency, or the executive director of the staff agency. The term includes, but is not limited to, applications for a CON, opinions from the state agency as to whether a project is subject to review, or any other fee established pursuant to this article.

(a) Each application for a certificate of need shall be accompanied by a fee of one percent of the estimated cost of the proposed cost of the new Institutional Health Service, or a maximum of $12,000.00 (indexed) per application. Provided, that the application fee shall be one half of one percent of the estimated cost of the proposed cost of the new Institutional Health Service, or a maximum of $4,000.00 if the applicant has had an average daily census comprised of 50 percent or more medicaid patients within the last year prior to the filing of the application and a maximum of $2,000.00 if a rural hospital applicant has had an average daily census comprised of 30 percent or more Medicaid/Medicare patients within the last year prior to the filing of the application. The minimum fee shall be set by the SHPDA. Fees shall be used for the purpose of defraying the lawful operating expense of the certificate of need program conducted by the SHPDA and of the Statewide Health Coordinating Council.

(b) Each request for an opinion from the State Agency as to whether a project is subject to review under this article shall be accompanied by a fee to be established by the SHPDA.

(c) There is hereby authorized to be appropriated from the General Fund of the State of Alabama such amounts as may be necessary from time to time to defray the costs of administering this article over and above such fees as may be collected under this section.

(d) Application fees collected under this article shall not be refundable. Fees collected under this article are hereby appropriated for the purposes stated in this article.

(e) All fees collected under this article shall be retained in a separate fund for the purpose of enforcing and administering this article, and shall be disbursed as other funds of the state are disbursed.

The SHPDA, with the advice and consultation of the Statewide Health Coordinating Council, shall prescribe by rules and regulations the review criteria and review procedures required by this article. Said review criteria and review procedures shall be consistent with this article and with appropriate federal regulations. Prior to the adoption of rules and regulations, the SHPDA shall give wide publicity to the proposed rules and regulations and shall conduct a public hearing following legal notice of not less than 30 days. The public hearing shall be held in the City of Montgomery, Alabama. Prior to advertising the public hearing, the SHPDA shall submit the proposed rules and regulations to the Statewide Health Coordinating Council and other interested agencies. Future revisions of the rules and regulations shall be made as required in this section for the original rules and regulations and in accordance with the Administrative Procedure Act (§ 41-22-1 et seq.).

The SHPDA, pursuant to the provisions of Section 22-21-274, shall prescribe by rules and regulations the procedures for review of applications for certificates of need and for issuance of certificates of need. Rules and regulations governing review procedures shall include, but not necessarily be limited to, the following:

(1) Agreement with other review agencies for review procedures consistent with this article and federal regulations.

(2) Application procedures and forms of the application necessary to elicit and provide all necessary information as required by the review criteria.

(3) Establishment of a project review period of 90 days from the date the state agency determines that the application is complete and notification thereof is made to the applicant. The rules and regulations may provide for a period of not more than 15 days for determination of the completeness of the application, notification of the beginning and termination dates of the project review period and criteria for determining by the state agency of an extension of the project review period not to exceed 30 days with or without the consent of the applicant. An extension of the review period without limitation may be made with the written consent of the applicant. All reviews must be completed prior to the termination of the review period. If the state agency does not make a decision within the period of time specified for state agency review, the proposal shall be deemed to have been found not to be needed.

(4) Provision for a 'nonsubstantive' review which shall be a modified review applicable to proposals for capital expenditures up to $500,000.00 and which:

a. Do not result in a substantial change in a service; or

b. Propose equipment to upgrade or expand an existing service; or

c. Increase the bed capacity by not more than 10 percent of the existing bed capacity; provided, that such increase in bed capacity is consistent with the State Health Plan.

(5) Public notification of receipt of application, review periods, public hearings, decisions of the state agency, fair hearings if requested and final decisions regarding a certificate of need.

(6) Provisions and procedures for public hearings in the course of agency review on any application for the certificate of need for new institutional health service which requires substantive review. The SHPDA shall make provisions for a public hearing of any contested case before an administrative law judge designated by the Governor, which shall be conducted as a contested hearing pursuant to the requirements of the Alabama Administrative Procedure Act, Chapter 22 of Title 41, and regulations consistent therewith adopted under this article. SHPDA shall make provisions that if neither the applicant nor aggrieved party shall have requested the application be heard before an administrative law judge, the application shall be heard before SHPDA at a public hearing. Any aggrieved party to a final decision of SHPDA may appeal the final decision of SHPDA to the circuit court in the county in which the applicant resides or of the county in which the applicant is situated or in which the new institutional health service being applied for is located.

(7) Schedule for reviews to include hearings before the state agency, beginning and ending of review periods and time of the review period as provided in this section.

(8) Provision of the applicant to submit such information that he may deem advisable in justification of the application over and above the minimum information required by this article and the regulations adopted hereunder.

(9) Provisions for periodic reports by the health provider or applicant respecting the development of the proposal subject to review and for which a certificate of need is issued.

(10) Provisions for written findings, as appropriate, which the state used as the basis for its decision or any recommendation of the state agency. Such findings and recommendations shall be provided to the applicant and available to other interested persons upon request and upon payment of a reasonable fee to cover actual costs of reproduction and handling.

(11) Notification upon request of providers of health services and other persons subject to review of findings, recommendations and decisions made under this article.

(12) Provision for a public hearing upon written request for the reconsideration of a decision by the SHPDA and for good cause by any aggrieved party, including any competing applicant, or any aggrieved person who has intervened pursuant to Section 41-22-14. Request for reconsideration shall be made in writing not more than 15 days subsequent to the date the agency (SHPDA) decision is deemed final and shall have the effect of holding in abeyance the final decision and suspending any certificate of need issued pursuant thereto, subject to the outcome of the public hearing. The provision shall state that there can be no reconsideration by the SHPDA of a decision on a prior request for reconsideration; that an aggrieved party shall not be required to request reconsideration prior to or as a condition to requesting a fair hearing; and that an aggrieved party shall not be required to request reconsideration or a fair hearing prior to or as a condition to seeking judicial review pursuant to Section 41-22-20.

(13) Provision that no decision of the SHPDA under this article shall be deemed final until 15 days following the date of the decision.

(14) Provisions that any adverse decision of the agency (SHPDA) (other than a SHPDA decision after first being heard as a contested case before an administrative law judge pursuant to the requirements of the Alabama Administrative Procedure Act) may be appealed to an administrative law judge designated by the Governor for fair hearing which appeal shall be heard de novo as a contested case in accordance with Sections 41-22-12 and 41-22-13. The fair hearing appeal proceedings shall be conducted pursuant to the requirements of the Alabama Administrative Procedure Act, Chapter 22 of Title 41, and regulations consistent therewith adopted under this article. The appeal shall be commenced by a request for a fair hearing by the applicant or any competing applicant, which request shall be made within 15 days of the date that the decision by the state agency became final, or in the event of a request for reconsideration, within 15 days of the date that the decision of the state agency on reconsideration became final and shall have the effect of holding in abeyance the decision and suspending any certificate of need issued pursuant thereto subject to the outcome of the fair hearing. The decision of the administrative law judge in the fair hearing proceedings shall be considered the final decision of the state agency (SHPDA); provided, that any aggrieved party may appeal the decision to the circuit court of the county in which the applicant resides or of the county in which the applicant is situated or in which the new institutional health service being applied for is located.

(15) Preparation and publication, at least annually, of reports by the state agency of the reviews being conducted, decisions reached, certificates issued and status of proposals.

(16) Access by the general public to applications reviewed by the SHPDA and to other written material pertinent to the review.

(17) Provisions for letters of intent in the case of construction projects by persons proposing such projects. Letters of intent shall be in such detail as the SHPDA may direct by regulations. Letters of intent shall not substitute for the formal application for a certificate of need as provided in this article.

(18) Provision that the review procedure may vary according to the purpose for which a particular review is being conducted and/or the nature and type of service or expenditure proposed.

(a) Injunctive relief against violations of this article or any reasonable rules and regulations of the SHPDA may be obtained from the Circuit Court of Montgomery County, Alabama, at the instance of the SHPDA, any holder of a certificate of need that is adversely affected in the exercise of privileges thereunder by such violation or any member of the public directly and adversely affected by such violation. Upon written request by the SHPDA, it shall be the duty of the Attorney General of the State of Alabama to furnish such legal services as may be appropriate and to prosecute such action for injunctive relief to an appropriate conclusion.

(b) The State Board of Health shall not issue a license to operate new inpatient beds or any health care facility constructed, or acquired in violation of this article and without a certificate of need issued pursuant to this article.

(c) Any facility or service provided or constructed in violation of this article and without a certificate of need shall not receive reimbursement for services rendered by the health care facility or for the service provided by the facility which is provided in violation of said article without a certificate of need. This provision applies to all reimbursement programs administered by the State of Alabama. Recommendations will be made to other reimbursing agencies that reimbursement be denied.

The provisions of this article are cumulative and, insofar as possible, they shall be construed in pari materia with other laws relating to public health. Nevertheless, all laws or parts of laws, including, but not limited to any part of Chapter 5A (commencing with Section 31-5A-1) of Title 31, which conflict with this article are repealed.

(a) The Legislature hereby finds and declares that it is in the best interest of the state and its residents for Kidney Disease Treatment Centers to be established and operated throughout the state so that any patient needing such treatment will be able to utilize a hemodialysis unit located within a reasonable distance from his or her home; that a shortage of Kidney Disease Treatment Centers now exists in the rural areas and smaller municipalities in the state; that the existence of the certificate of need requirement with respect to new Kidney Disease Treatment Centers is a factor that hinders the establishment of new treatment centers in the less heavily-populated areas of the state; that, in order to encourage and facilitate the development of new Kidney Disease Treatment Centers in those areas of the state where such centers are most needed, it is rational, appropriate and desirable to provide an exemption from the certificate of need requirement for any Kidney Disease Treatment Center located in a Class 3, 4, 5, 6, 7 or 8 municipality that contains no more than ten hemodialysis units; and that, because of the existence in Class 1, 2 and 3 municipalities of major medical facilities that serve the residents of such municipalities and the surrounding areas, it is rational, appropriate and desirable to provide that the exemption granted by this section shall not apply to a Kidney Disease Treatment Center located in a Class 4, 5, 6, 7 or 8 municipality if such municipality is located in a county in which a Class 1, 2 or 3 municipality is located.

(b) Notwithstanding any existing law to the contrary, any Kidney Disease Treatment Center that contains no more than ten freestanding hemodialysis units and that is located in a Class 3, 4, 5, 6, 7 or 8 municipality (as such classes are defined in Sections 11-40-12 and 11-40-13 or any successor provision of law) shall not be subject to or governed by the provisions of Article 9 of Chapter 21 of Title 22 (including, without limitation, the provisions of said article which require that a certificate of need be obtained from the State Health Planning and Development Agency as a condition precedent to the offering or development of new institutional health services).

(c) The provisions of subsection (b) shall not apply to a Kidney Disease Treatment Center located in a Class 4, 5, 6, 7 or 8 municipality if such municipality or any part thereof is located in a county in which a Class 1, 2 or 3 municipality or any part thereof is located.

(a) In the manner provided in this section, the State Board of Health, with the advice and after approval by the advisory board, shall have the power to make and enforce, and may modify, amend, and rescind, reasonable rules and regulations governing the operation and conduct of hospitals as defined in Section 22-21-20. All such regulations shall set uniform minimum standards applicable alike to all hospitals of like kind and purpose in view of the type of institutional care being offered there and shall be confined to setting minimum standards of sanitation and equipment found to be necessary and prohibiting conduct and practices inimicable to the public interest and the public health. The board shall not have power to promulgate any regulation in conflict with law nor power to interfere with the internal government and operation of any hospital on matters of policy. The procedure for adopting, amending, or rescinding any rules authorized by this article shall conform to the Alabama Administrative Procedure Act. At any public hearing called for the purpose of soliciting public comment on proposed rules, any interested hospital or any member of the public may be heard.

(b) Any person affected by any regulation, amendment, or rescission thereof may appeal consideration thereof to the circuit court of the county of that person's residence or in which that person does business or to the Circuit Court of Montgomery County, pursuant to the Alabama Administrative Procedure Act. And upon appeal the question of the reasonableness of such regulation shall be a question of fact for the court to determine, and no presumption shall be indulged that the regulation adopted was and is a reasonable regulation.

(c) Regulations adopted under this section shall become effective as provided in the Alabama Administrative Procedure Act.

(a) Every hospital licensed under this article shall be open to inspection to the extent authorized in this section by employees and agents of the State Board of Health, under rules as shall be promulgated by the board with the advice and consent of the advisory board. Employees and agents of the board shall also inspect unlicensed and suspected unlicensed facilities. Nothing in this section shall authorize the board to inspect quarters therein occupied by members of any religious group or nurses engaged in work in any hospital or places of refuge for members of religious orders for whom care is provided, but any inspection shall be limited and confined to the parts and portions of the hospital as are used for the care and treatment of the patients and the general facilities for their care and treatment. No hospital shall, by reason of this section, be relieved from any other types of inspections authorized by law.

(b) All inspections undertaken by the State Board of Health shall be conducted without prior notice to the facility and its staff. Notwithstanding the foregoing, an inspection of a hospital or other health care facility, prior to its licensure, may be scheduled in advance. An employee or contract employee of the state shall not disclose in advance the date or the time of an inspection of a hospital or other health care facility to any person with a financial interest in any licensed health care facility, to any employee or agent of a licensed health care facility, to any consultant or contractor who performs services for or on behalf of licensed health care facilities, or to any person related by blood or marriage to an owner, employee, agent, consultant, or contractor of a licensed health care facility. For purposes of this section, the term inspection shall include periodic and follow-up compliance inspections and surveys on behalf of the State Board of Health, complaint investigations and follow-up investigations conducted by the State Board of Health, and compliance inspections and surveys, complaint investigations, and follow-up visits conducted on behalf of the United States Department of Health and Human Services, Health Care Financing Administration, or its successors. The board may prescribe by rule exceptions to the prohibition where considerations of public health or safety make advance disclosure of inspection dates or times reasonable. Disclosure in advance of inspection dates when such disclosure is required or authorized pursuant to federal law or regulation shall not be a violation of this section. Scheduling inspections of hospitals or other health care facilities by the board at regular, periodic intervals which may be predictable shall not be a violation of this section.

(c) Any employee or contract employee of the state who discloses in advance the date or time of an inspection in violation of subsection (b) shall be guilty of a Class A misdemeanor. Any person who solicits an employee or contract employee of the state to disclose in advance the date or time of an inspection in violation of subsection (b) for the purpose of disclosing the information to others shall be guilty of a Class A misdemeanor.

This article may be cited as 'the Alabama Health Care Responsibility Act.'

It is the intent of the Legislature to place the ultimate financial obligation for the medical treatment of indigents on the county in which the indigent resides, for all those costs not fully reimbursed by other governmental programs or third-party payers.

For the purpose of this article the following terms shall have the meanings respectively ascribed to them by this section:

(1) LOCAL AGENCY. Any county existing or hereafter created pursuant to the laws of this state.

(2) INDIGENT. Any person who has resided continuously in this state for not less than one year and who is acutely ill or injured and can be helped markedly by treatment in a hospital, but who is unable to pay the cost of such hospitalization from his own resources or from the resources of those upon whom he is legally dependent.

(3) DEPARTMENT. The Department of Pensions and Security.

(4) HOSPITAL. Any state, county, municipal or other public or private hospital licensed under the laws of this state, except a hospital, whether public or private, which is operated primarily for the care and treatment of tuberculosis, mental disorders or any other such chronic disease or illness.

(5) REGIONAL REFERRAL HOSPITAL. Any hospital that provides services to patients who reside in counties other than the county in which the hospital is located.

Ultimate financial responsibility for treatment received at a regional referral hospital by a certified indigent patient, who is a resident of the State of Alabama but is not a resident of the county in which the regional referral hospital is located, shall be the obligation of the county of which the certified indigent patient is a resident. A county's annual financial responsibility for each of its resident certified indigent patients receiving treatment at a regional referral hospital shall be limited to payment for 30 days or the number of days of services allowed per annum for the care of Medicaid patients through the State Medicaid Program at the time of the patient's hospitalization, whichever shall be less, at the per diem reimbursement rate currently in effect for the regional referral hospital under the medical assistance program for the needy under Title XIX of the Social Security Act, as amended. No county shall be required to pay for services at a regional referral hospital when such services are available at a local hospital in the county where the indigent resides, except that the county where the indigent resides shall be liable for the cost of treatment provided to said certified indigent at a regional referral hospital for any emergency medical condition which will deteriorate from failure to provide such treatment and when such condition is determined by the attending physician to be of an emergency nature. Provided however, no county shall be required to pay for services at a regional referral hospital for any patient that has received medical assistance during the current year through the State Medicaid Program. Provided, further, no county shall be required to pay for services at a regional referral hospital for any patient until all third party payors have paid all they are obligated to pay under any contract of insurance or otherwise.

Not later than October 1, 1979, the Department of Pensions and Security shall adopt rules which provide a statewide eligibility standard to certify residents of each county as indigent for the purposes of this article. These rules shall further provide that certification as indigent for the purposes of this article may occur either prior to a person's admission to a regional referral hospital, or subsequent to such admission for an emergency condition, but in any event if a determination of whether a patient meets or does not meet eligibility standards for certification as indigent for the purpose of this article is not made within 90 days following written notification by the regional referral hospital to the county of residence of the patient's admission to a regional referral hospital, the patient shall be considered to have been a certified indigent patient upon admission. A patient certified as indigent for the purpose of this article subsequent to his or her admission to a regional referral hospital shall be considered to have been certified upon admission. Such certification shall be made by a person designated by the board of county commissioners, or in the absence of such a designated person, by the County Health Officer. Furthermore, any county may establish standards of eligibility which are less restrictive than the standards adopted by the department under this section and no county may establish standards which are more restrictive than the standards adopted by the department under this section.

As a condition of accepting the procedures of this article, each regional referral hospital in Alabama shall be obligated to admit for treatment all Alabama residents who meet the eligibility standards established pursuant to Section 22-21-294 and who meet the medical standards for admission to such institutions.

All disputes between a county and a regional referral hospital shall be resolved by action in the circuit court of the county in which the regional referral hospital is located.

No patient shall be treated or admitted to, except in the case of an emergency, to a regional referral hospital as an indigent unless and until the board of county commissioners of the county providing certification notifies the hospital that the patient is certified as an indigent and that he is approved by the board for treatment or admission.

(a) This section shall apply to any public hospital in this state, operated on a municipal-county basis, on a county basis, on a municipal basis or on a regional or statewide basis operating under the authority of any act or acts of the Legislature of Alabama, heretofore passed or hereinafter enacted, either local or general.

(b) The Board of Trustees or other like governing bodies of any hospital coming within the purview of this section is hereby authorized and permitted, but not required, to expend any funds such hospital has on hand by providing scholarships for the purpose of the educating and training of professional and technical personnel, and each such hospital, by and through its governing body, shall make and provide its own rules and regulations to govern the issuance of such scholarships.

Information received by the State Board of Health through on-site inspections conducted by the State Licensing Agency is subject to public disclosure and may be disclosed upon written request. Information received through means other than inspection will be treated as confidential and shall not be directed publicly except in a proceeding involving the question of licensure or revocation of license.

Nothing in this article shall be construed as authorizing any person to engage in any manner in the practice of medicine or any other profession nor to authorize any person to engage in the business of child placing. Any child born in any such institution whose mother is unable to care for such child or any child who, for any reason, will be left destitute of parental support shall be reported to the Department of Human Resources or to any agency authorized or licensed by the Department of Human Resources to engage in child placing for such service as the child and the mother may require. In the rendering of service, representatives of the Department of Human Resources and agencies authorized or licensed by the Department of Human Resources shall have free access to visit the child and the mother concerned.

This article shall be known and may be cited as 'The Health Care Authorities Act of 1982.'

(a) The following words and phrases used in this article, and others evidently intended as the equivalent thereof, shall, in the absence of clear implication herein otherwise, be given the following respective interpretations herein:

(1) APPLICANT. A natural person who files a written application with the governing body of a county, municipality, or educational institution, or two or more thereof, in accordance with the provisions of Section 22-21-313.

(2) AUTHORITY. A public corporation organized, and any public hospital corporation reincorporated, pursuant to the provisions hereof.

(3) AUTHORIZING RESOLUTION. The resolution adopted by the governing body of an authorizing subdivision, in accordance with the provisions of Section 22-21-313 or Section 22-21-341, that authorizes the incorporation of an authority or the reincorporation of a public hospital corporation.

(4) AUTHORIZING SUBDIVISION. Each county, municipality, and educational institution with the governing body of which an application for the incorporation of an authority hereunder or for the reincorporation of a public hospital corporation hereunder is filed.

(5) BOARD. The board of directors of an authority.

(6) CODE. The Code of Alabama 1975 and all amendments thereto and, with respect to any particular title, chapter, article, division, section or other portion thereof, any act of the Legislature or other code preceding such portion of the code or subsequently replacing the same.

(7) COUNTY. Any county in the state.

(8) COUPON. Any interest coupon evidencing an installment of interest payable with respect to a security.

(9) DIRECTOR. A member of a board.

(10) EDUCATIONAL INSTITUTION. A public college or university established under the Constitution of Alabama or act of the Alabama Legislature that operates a school of medicine.

(11) FEDERAL SECURITIES. Debt securities that are direct obligations of the United States of America for the payment of which the full faith and credit of the United States of America is pledged, or debt securities issued by a person controlled or supervised by and acting as an instrumentality of the United States of America, the payment of the principal of and interest on which is fully and unconditionally guaranteed by the United States of America.

(12) FISCAL YEAR. A fiscal year of the authorizing subdivision.

(13) GOVERNING BODY. With respect to a county, its county commission or other like governing body, with respect to a municipality, its city or town council, board of commissioners or other like governing body, and with respect to an educational institution, its board of trustees, or other like governing body.

(14) HEALTH CARE FACILITIES. Generally, any one or more buildings or facilities which serve to promote the public health, either by providing places or facilities for the diagnosis, treatment, care, cure or convalescence of sick, injured, physically disabled or handicapped, mentally ill, retarded or disturbed persons, or for the prevention of sickness and disease, or for the care, treatment and rehabilitation of alcoholics, or for the care of elderly persons, or for research with respect to any of the foregoing, including, without limiting the generality of the foregoing:

a. Public hospitals of all types, public clinics, sanitoria, public health centers and related public health facilities, such as medical or dental facilities, laboratories, out-patient departments, educational facilities, nurses' homes and nurses' training facilities, dormitories or residences for hospital personnel or students, other employee-related facilities, central service facilities operated in connection with public hospitals and other facilities (such as, for example, gift and flower shops, cafe and cafeteria facilities and the like) ancillary to public hospitals;

b. Retirement homes, nursing homes, convalescent homes, apartment buildings, dormitory or domiciliary facilities, residences or special care facilities for the housing and care of elderly persons or other persons requiring special care;

c. Appurtenant buildings and other facilities:

1. To provide offices for persons engaged in the diagnosis, treatment, care or cure of diseased, sick or injured persons, or in preventive medicine, or in the practice of dentistry; or

2. To house or service equipment used for the diagnosis, treatment, care or cure of diseased, sick or injured persons, or in preventive medicine, or in the practice of dentistry, or the records of such diagnosis, treatment, care, cure or practice or research with respect to any of the foregoing;

d. Parking areas, parking decks, facilities, buildings and structures appurtenant to any of the foregoing;

e. Ambulance, helicopter and other similar facilities and services for the transportation of sick or injured persons; and

f. Machinery, equipment, furniture and fixtures useful or desirable in the operation of any of the foregoing.

(15) HOSPITAL TAX. Any tax which may be levied for the benefit of an authority or any health care facilities owned or operated by it or the proceeds of which may have been appropriated, allocated or apportioned to such authority, or to or for the benefit of any such health care facilities, by the Legislature or by the governing body of a county or municipality.

(16) INCORPORATORS. The natural persons forming an authority pursuant to the provisions of this article.

(17) INDENTURE. A mortgage, mortgage indenture, mortgage and trust indenture or trust indenture executed by an authority as security for any of its securities.

(18) LEGISLATURE. The Legislature of the state.

(19) MUNICIPALITY. An incorporated city or town of the state.

(20) PRINCIPAL OFFICE. The place at which the certificate of incorporation of an authority and amendments thereto, the bylaws and the minutes of the proceedings of the board are kept.

(21) PUBLIC HOSPITAL CORPORATION. Any public authority, public corporation or public association or entity organized on a local or regional basis by or with the consent of any county or municipality (or any two or more thereof) and having the power to own or operate any health care facilities, including (without limitation) any public corporation or authority heretofore or hereafter organized under the provisions of Article 3, Division 1 of Article 4, Article 5, or Article 6 of this chapter, Section 22-21-5, or Chapter 95 of Title 11, but excluding the state, any state institution of higher learning owning or operating health care facilities or any other state (as distinguished from local or regional) agency owning or operating health care facilities.

(22) SECURITIES. Bonds, notes, warrants, certificates of indebtedness or other evidences of indebtedness, including (without limiting the generality of the foregoing) notes issued in anticipation of the sale of any of the foregoing.

(23) STATE. The State of Alabama.

(b) The terms 'herein,' 'hereby,' 'hereunder,' 'hereof,' and other equivalent words refer to this article as an entirety and not solely to the particular section or portion hereof in which any such word is used. The definitions set forth herein shall be deemed applicable whether the words defined are used in the singular or plural. Whenever used herein any pronoun or pronouns shall be deemed to include both singular and plural and to cover all genders.

The Legislature hereby finds and declares:

(1) That publicly-owned (as distinguished from investor-owned and community-nonprofit) hospitals and other health care facilities furnish a substantial part of the indigent and reduced-rate care and other health care services furnished to residents of the state by hospitals and other health care facilities generally;

(2) That as a result of current significant fiscal and budgetary limitations or restrictions, the state and the various counties, municipalities, and educational institutions therein are no longer able to provide, from taxes and other general fund moneys, all the revenues and funds necessary to operate such publicly-owned hospitals and other health care facilities adequately and efficiently; and

(3) That to enable such publicly-owned hospitals and other health care facilities to continue to operate adequately and efficiently, it is necessary that the entities and agencies operating them have significantly greater powers with respect to health care facilities than now vested in various public hospital or health-care authorities and corporations and the ability to provide a corporate structure somewhat more flexible than those now provided for in existing laws relating to the public hospital and health-care authorities.

It is therefore the intent of the Legislature by the passage of this article to promote the public health of the people of the state (1) by authorizing the several counties, municipalities, and educational institutions in the state effectively to form public corporations whose corporate purpose shall be to acquire, own and operate health care facilities, and (2) by permitting, with the consent of the counties or municipalities (or both) authorizing their formation, existing public hospital corporations to reincorporate hereunder. To that end, this article invests each public corporation so organized or reincorporated hereunder with all powers that may be necessary to enable it to accomplish its corporate purposes and shall be liberally construed in conformity with said intent.

(a) In order to incorporate an authority, any number of natural persons, not less than three, shall first file a written application with the governing body of any county, municipality, or educational institution, or any two or more thereof, which application shall:

(1) Recite the name of each county, municipality, and educational institution with the governing body of which such application is being filed;

(2) Contain a statement that the applicants propose to incorporate an authority pursuant to the provisions of this article;

(3) State either (i) where the authorizing subdivision is a county or municipality, that each of the applicants is a duly qualified elector of the authorizing subdivision (or, if there is more than one, at least one thereof) or (ii) where the authorizing subdivision is an educational institution, that each of the applicants is a duly qualified elector of the state; and

(4) Request that the governing body of such authorizing subdivision adopt a resolution declaring that it is wise, expedient and necessary that the proposed authority be formed, approving its certificate of incorporation and authorizing the applicants to proceed to form the proposed authority by filing for record a certificate of incorporation in accordance with the provisions of Section 22-21-314.

(b) As promptly as may be practicable after the filing of the aforesaid application with it in accordance with the preceding provisions of this section, the governing body of each authorizing subdivision with which the application was filed shall review the contents of the application and the accompanying form of certificate of incorporation and shall adopt a resolution either:

(1) Denying the application; or

(2) Declaring that it is wise, expedient and necessary that the proposed authority be formed, approving the form of its certificate of incorporation and authorizing the applicants to proceed to form the proposed authority by filing for record such a certificate of incorporation in accordance with the provisions of Section 22-21-314.

(a) Within 40 days following the adoption of the authorizing resolution (or, if there is more than one, the last adopted thereof), the applicants shall proceed to incorporate an authority by filing for record, in the office of the judge of probate of the county in which the principal office of the authority is to be located, a certificate of incorporation which shall comply in form and substance with the requirements of this section, shall be in the form and executed in the manner herein provided and shall also be in the form theretofore approved by the governing body of each authorizing subdivision.

(b) In addition to any other provisions required by this article to be included therein, the certificate of incorporation of an authority shall state:

(1) The names of the incorporators, together with the address of the residence of each thereof, and either (i) where the authorizing subdivision is a county or municipality, that each of them is a duly qualified elector of the authorizing subdivision (or, if there is more than one, at least one thereof) or (ii) where the authorizing subdivision is an educational institution, that each of them is a duly qualified elector of the state;

(2) The name of the authority, which may be a name indicating in a general way the area proposed to be served by the authority and shall include the words 'Health Care Authority' (e.g., 'The _____ Health Care Authority,' or 'The Health Care Authority of _____,' the blank space to be filled in with the name of one or more of the authorizing subdivisions or other geographically descriptive word or words, such descriptive word or words not, however, to preclude the authority from locating health care facilities or otherwise exercising its powers in other geographical areas), unless the Secretary of State shall determine that such name is identical to the name of another corporation organized under the laws of the state or so nearly similar thereto as to lead to confusion and uncertainty, in which case the incorporators may insert additional identifying words so as to eliminate said duplication or similarity or adopt some other similar name that is available;

(3) The period for the duration of the authority (if the duration is to be perpetual, subject to the provisions of Section 22-21-339, that fact shall be stated);

(4) The name of each authorizing subdivision, together with the date on which the governing body thereof adopted an authorizing resolution;

(5) The location of the principal office of the authority, which either (i) where the authorizing subdivision is a county or municipality, shall be within the boundaries of the authorizing subdivision (or, if more than one, at least one thereof) or (ii) where the authorizing subdivision is an educational institution, shall be where the principal office of the educational institution is located;

(6) That the authority is organized pursuant to the provisions of this article;

(7) If the exercise by the authority of any of its powers hereunder is to be in any way prohibited, limited or conditioned, a statement of the terms of such prohibition, limitation or condition;

(8) If the authority is to have the extraordinary power set out in Section 22-21-319, a statement to that effect;

(9) The number of directors, which shall be an odd number not less than three, the duration of their respective terms of office (which shall not be in excess of six years), and (subject to the provisions of Section 22-21-316) the manner of their election or appointment;

(10) Any provisions, not inconsistent with Section 22-21-339, relating to the vesting of title to its assets and properties upon its dissolution; and

(11) Any other matters relating to the authority that the incorporators may choose to insert and that are not inconsistent with this article or with the laws of the state.

(c) The certificate of incorporation shall be signed and acknowledged by each of the incorporators before an officer authorized by the laws of the state to take acknowledgements to deeds.

(d) When the certificate of incorporation is filed for record, there shall be attached to it:

(1) A certified copy of each authorizing resolution; and

(2) A certificate by the Secretary of State that the name proposed for the authority is not identical to that of any other corporation organized under the laws of the state or so nearly similar thereto as to lead to confusion and uncertainty.

(e) Upon the filing for record of the certificate of incorporation and the documents required by subsection (d) of this section to be attached thereto, the authority shall come into existence and shall constitute a public corporation under the name set forth in its certificate of incorporation. The said judge of probate shall thereupon record the certificate of incorporation in an appropriate book in his office.

(a) The certificate of incorporation of any authority incorporated under the provisions of this article, as well as that of any public hospital corporation reincorporated hereunder, may at any time and from time to time be amended, but only in the manner provided in this section. The board shall first adopt a resolution proposing an amendment to the certificate of incorporation of the authority, which amendment shall be set forth in full in the said resolution and which may include any matters that might have been included in an original certificate of incorporation hereunder.

(b) After the adoption by the board of a resolution proposing an amendment to the certificate of incorporation, the chairman and the secretary of the authority shall sign and file, with the governing body of each authorizing subdivision, a written application in the name and on behalf of the authority, under its seal, requesting such governing body to adopt a resolution approving the proposed amendment, and accompanied by a certified copy of the said resolution adopted by the board proposing the amendment to the certificate of incorporation, together with such documents in support of the application as the chairman may consider appropriate. As promptly as may be practicable after the filing of the application with the governing body of an authorizing subdivision as aforesaid, such governing body shall review the application and shall adopt a resolution either denying the application or approving and authorizing the proposed amendment. While it shall not be necessary that any such resolution be published in any newspaper or posted, the governing body of each authorizing subdivision with which any such application is filed shall cause a copy of the application and all accompanying documents to be included in the aforesaid resolution or otherwise spread upon or made a part of the minutes of the meeting of such governing body at which final action upon such application is taken. The certificate of incorporation of an authority may be amended only after the filing of such an application therefor and the adoption by the governing body of each authorizing subdivision of an approving resolution.

(c) Within 40 days following the adoption of a resolution approving the proposed amendment by the governing body of the authorizing subdivision (or, if there is more than one, the last adopted of such approving resolutions), the chairman and the secretary of the authority shall sign and file for record in the office of the judge of probate of the county in which the certificate of incorporation of the authority was filed a certificate in the name and on behalf of the authority, under its seal, reciting the adoption of said respective resolutions by the board and by the governing body of each authorizing subdivision and setting forth the proposed amendment. The said judge of probate shall thereupon record such certificate in an appropriate book in his office. When such certificate has been so filed and recorded, such amendment shall become effective, and the certificate of incorporation shall thereupon be amended to the extent provided in such amendment.

(a) Each authority shall have a board of directors composed of the number of directors provided in the certificate of incorporation, as most recently amended. Unless provided to the contrary in its certificate of incorporation, all powers of the authority shall be exercised, and the authority shall be governed, by the board or pursuant to its authorization. Subject to the provisions of subdivision (9) of subsection (b) of Section 22-21-314, the board shall consist of directors having such qualifications, being elected or appointed by such person or persons (including, without limitation, the board itself, the governing body or bodies of one or more authorizing subdivisions or other counties and municipalities, and other entities or organizations) and in such manner, and serving for such terms of office, all as shall be specified in the certificate of incorporation of the authority; provided however, that no fewer than a majority of the directors shall be elected by the governing body or bodies of one or more of the authorizing subdivisions and the certificate of incorporation of each authority must contain provisions having this effect.

(b) If, at the expiration of any term of office of any director, a successor thereto shall not have been elected or appointed, then the director whose term of office shall have expired shall continue to hold office until his successor shall be so elected or appointed. If at any time there should be a vacancy on the board, whether by death, resignation, incapacity, disqualification or otherwise, a successor director to serve for the unexpired term applicable to such vacancy shall be elected or appointed by the person or persons who elected or appointed the predecessor director. Each election or appointment of a director, whether for a full term or to complete an unexpired term, shall be made not earlier than 30 days prior to the date on which such director is to take office as such. Any director, irrespective of by whom elected or appointed, shall be eligible for reelection or reappointment.

(c) Each director shall serve as such without compensation but shall be reimbursed for expenses actually incurred by him in and about the performance of his duties. A majority of the directors shall constitute a quorum for the transaction of business, but any meeting of the board may be adjourned from time to time by a majority of the directors present or may be so adjourned by a single director if such director is the only director present at such meeting. No vacancy in the membership of the board shall impair the right of a quorum to exercise all the powers and perform all the duties of the board. The board shall hold regular meetings at such times as may be provided in the bylaws of the authority, may hold other meetings at any time and from time to time upon such notice as may be required by the bylaws of the authority, and must upon call of the chairman of the authority or a majority of the total number of directors, hold a special meeting, none of which meetings shall be subject to the provisions of Section 13A-14-2 or other similar law. Whenever any notice is required by the bylaws of the authority to be given of any meeting of the board, a waiver thereof in writing, signed (whether before or after such meeting) by the person or persons entitled to such notice, shall be the equivalent to the giving of such notice. Any matter on which the board is authorized to act may be acted upon at any regular, special or called meeting. At the request of any director, the vote on any question before the board shall be taken by yeas and nays and entered upon the record. All resolutions adopted by the board shall constitute actions of the authority, and all proceedings of the board shall be reduced to writing and signed by the secretary of the authority and shall be recorded in a well-bound book. Copies of such proceedings, when certified by the secretary of the authority, under the seal of the authority, shall be received in all courts as prima facie evidence of the matters and things therein certified.

(d) Any director may be impeached and removed from office in the same manner and on the same grounds provided in Section 175 of the Constitution of Alabama of 1901 and the general laws of the state for impeachment and removal of the officers mentioned in said Section 175.

The officers of an authority shall consist of a chairman, a vice-chairman, a secretary, a treasurer and such other officers as the board shall deem necessary or desirable. The chairman and the vice-chairman of the authority shall be elected by the board from its membership but neither the secretary, the treasurer nor any of the other officers of the authority need be a director. The offices of secretary and treasurer may, but need not be, held by the same person. The chairman and the vice-chairman of the authority shall be elected by the board for terms of not exceeding three years each, and the secretary, the treasurer and the other officers of the authority shall be elected by the board for such terms as it deems advisable. The duties of the chairman, vice-chairman, secretary and treasurer shall be such as are customarily performed by such officers and as may be prescribed by the board. The duties of any other officers of the authority shall be such as are from time to time prescribed by the board.

(a) In addition to all other powers granted elsewhere in this article, and subject to the express provisions of its certificate of incorporation, an authority shall have the following powers, together with all powers incidental thereto or necessary to the discharge thereof in corporate form:

(1) To have succession by its corporate name for the duration of time, which may be in perpetuity, specified in its certificate of incorporation or until dissolved as provided in Section 22-21-339;

(2) To sue and be sued in its own name in civil suits and actions, and to defend suits and actions against it, including suits and actions ex delicto and ex contractu, subject, however, to the provisions of Chapter 93 of Title 11, which chapter is hereby made applicable to the authority;

(3) To adopt and make use of a corporate seal and to alter the same at pleasure;

(4) To adopt, alter, amend and repeal bylaws, regulations and rules, not inconsistent with the provisions of this article or its certificate of incorporation, for the regulation and conduct of its affairs and business;

(5) To acquire, construct, reconstruct, equip, enlarge, expand, alter, repair, improve, maintain, equip, furnish and operate health care facilities at such place or places, within and without the boundaries of its authorizing subdivisions and within and without the state, as it considers necessary or advisable;

(6) To lease or otherwise make available any health care facilities or other of its properties and assets to such persons, firms, partnerships, associations or corporations and on such terms as the board deems to be appropriate, to charge and collect rent or other fees or charges therefor and to terminate any such lease or other agreement upon the failure of the lessee or other party thereto to comply with any of its obligations thereunder;

(7) To receive, acquire, take and hold (whether by purchase, gift, transfer, foreclosure, lease, devise, option or otherwise) real and personal property of every description, or any interest therein, and to manage, improve and dispose of the same by any form of legal conveyance or transfer; provided however, that the authority shall not, without the prior approval of the governing body of each authorizing subdivision, have the power to dispose of (i) substantially all its assets, or (ii) any health care facilities the disposition of which would materially and significantly reduce or impair the level of hospital or health care services rendered by the authority; and provided further, that the foregoing proviso shall not be construed to require the prior approval of any such governing body for the mortgage or pledge of all or substantially all its assets or of any of its health care facilities, for the foreclosure of any such mortgage or pledge or for any sale or other disposition thereunder;

(8) To mortgage, pledge or otherwise convey its property and its revenues from any source;

(9) To borrow money in order to provide funds for any lawful corporate function, use or purpose and, in evidence of such borrowing, to sell and issue interest-bearing securities in the manner provided and subject to the limitations set forth hereinafter;

(10) To pledge for payment of any of its securities any revenues (including proceeds from any hospital tax to which it may be entitled) and to mortgage or pledge any or all of its health care facilities or other assets or properties or any part or parts thereof, whether then owned or thereafter acquired, as security for the payment of the principal of and the interest and premium, if any, on any securities so issued and any agreements made in connection therewith;

(11) To provide instruction and training for, and to contract for the instruction and training of, nurses, technicians and other technical, professional and paramedical personnel;

(12) To select and appoint medical and dental staff members and others licensed to practice the healing arts and to delineate and define the privileges granted each such individual;

(13) To affiliate with, and to contract to provide training and clinical experience for students of, other institutions;

(14) To contract for the operation of any department, section, equipment or holdings of the authority, and to enter into agreements with any person, firm or corporation for the management by said person, firm or corporation on behalf of the authority of any of its properties or for the more efficient or economical performance of clerical, accounting, administrative and other functions relating to its health care facilities;

(15) To establish, collect and alter charges for services rendered and supplies furnished by it;

(16) To make all needful or appropriate rules and regulations for the conduct of any health care facilities and other properties owned or operated by it and to alter such rules and regulations;

(17) To provide for such insurance as the business of the authority may require;

(18) To receive and accept from any source aid or contributions in the form of money, property, labor or other things of value, to be held, used and applied to carry out the purposes of this article, subject to any lawful condition upon which any such aid or contributions may be given or made;

(19) To cooperate with the State Board of Health and the State Department of Mental Health and to make contracts with either of said agencies respecting the operation of any health care facilities or other properties owned or operated by it, whether as an agent for either or both of said agencies or otherwise;

(20) To enter into contracts with, to accept aid, loans and grants from, to cooperate with and to do any and all things not specifically prohibited by this article or the Constitution of the state that may be necessary in order to avail itself of the aid and cooperation of the United States of America, the state, any county or municipality, or any agency, instrumentality or political subdivision of any of the foregoing in furtherance of the purposes of this article; to give such assurances, contractual or otherwise, to or for the benefit of any of the foregoing as may be required in connection with, or as conditions precedent to the receipt of, any such aid, loan or grant; and to take such action not in violation of law as may be necessary in order to qualify the authority to receive funds appropriated by any of the foregoing;

(21) To give such assurances, contractual or otherwise, and to make such commitments and agreements as may be necessary or desirable to preclude the exercise of any rights of recovery with respect to, or the forfeiture of title to, any of its health care facilities or other property or any health care facilities or other property proposed to be acquired by it;

(22) To make and alter rules and regulations for the treatment of indigent patients;

(23) To assume any obligations of any entity that conveys and transfers to the authority any health care facilities or other property, or interest therein, provided that such obligations appertain to the health care facilities, property or interest so conveyed and transferred to the authority;

(24) To assume, establish, fund and maintain retirement, pension or other employee benefit plans for its employees;

(25) To appoint, employ, contract with, and provide for the compensation of, such employees and agents, including but not limited to, architects, attorneys, consultants, engineers, accountants, financial experts, fiscal agents and such other advisers, consultants and agents as the business of the authority may require;

(26) To invest, in any trust fund established under and subject to the general laws of the state for investment or self-insurance purposes with investment authority as may be authorized by law for such trusts, any funds of the authority available therefor;

(27) To the extent permitted by its contracts with the holders of its securities, to purchase securities out of any of its funds or moneys available therefor and to hold, cancel or resell such securities;

(28) To make any expenditure of any moneys under its control that would, if the authority were generally subject to state corporate income taxation, be considered an ordinary and necessary expense of the authority within the meaning of Section 40-18-35 and applicable regulations thereunder, and without limiting the generality of the foregoing, to expend its moneys for the recruitment of employees and physicians, dentists and other health care professionals and for the promotion of employee morale and well-being; provided however, that nothing herein contained shall be construed to permit the authority (i) to increase the compensation of any of its officers or employees on a retroactive basis, (ii) to pay any extra compensation to any of its officers or employees for services theretofore rendered, (iii) to furnish free or below-cost office space to any nonhospital-based physician, dentist or other health care professional for use in his private practice, or (iv) to guarantee the income of any nonhospital-based physician, dentist or other health care professional in his private practice;

(29) To provide scholarships for students in training for work in the duties peculiar to health care;

(30) To enter into affiliation, cooperation, territorial, management or other similar agreements with other institutions (public or private) for the sharing, division, allocation or exclusive furnishing of services, referral of patients, management of facilities and other similar activities;

(31) To exercise all powers granted hereunder in such manner as it may determine to be consistent with the purposes of this article, notwithstanding that as a consequence of such exercise of such powers it engages in activities that may be deemed 'anticompetitive' within the contemplation of the antitrust laws of the state or of the United States; and

(32) To enter into such contracts, agreements, leases and other instruments, and to take such other actions, as may be necessary or convenient to accomplish any purpose for which the authority was organized or to exercise any power expressly granted hereunder.

(b) The Legislature hereby declares:

(1) That any expenditure permitted by the provisions of subdivision (28) of the preceding subsection (a) of this section to be made by or on behalf of an authority shall be deemed an expenditure of operating and maintaining public hospitals and public health facilities for a public purpose; and

(2) That no expenditure permitted by the provisions of said subdivision (28) to be made by or on behalf of an authority shall be considered to be a lending of credit or a granting of public money or thing of value to or in aid of any individual, association or corporation within the meaning of any constitutional or statutory provision. Nothing herein contained shall be construed as prohibiting or rendering unlawful any otherwise lawful expenditure made by or on behalf of an authority, solely because such expenditure is not expressly permitted by the terms of said subdivision (28).

(c) As a basis for the power granted in subdivision (31) of the preceding subsection (a), the Legislature hereby:

(1) Recognizes and contemplates that the nature and scope of the powers conferred on authorities hereunder are such as may compel each authority, in the course of exercising its other powers or by virtue of such exercise of such powers, to engage in activities that may be characterized as 'anticompetitive' within the contemplation of the antitrust laws of the state or of the United States; and

(2) Determines, as an expression of the public policy of the state with respect to the displacement of competition in the field of health care, that each authority, when exercising its powers hereunder with respect to the operation and management of health care facilities, acts as an agency or instrumentality of its authorizing subdivisions and as a political subdivision of the state.

(d) Nothing herein contained shall be construed as granting to an authority the power to levy any taxes.

If and only if its certificate of incorporation or an appropriate amendment thereto (both of which must, under the terms of this article, be approved by the governing body of each authorizing subdivision) shall expressly so provide, an authority shall have, in addition to all other powers granted elsewhere in this article, the same power of eminent domain as is vested by law in any authorizing subdivision, in the same manner and under the same conditions as are provided by law for the exercise of the power of eminent domain by such authorizing subdivision; provided however, that under no circumstances may an authority exercise the power of eminent domain for the purposes of providing office facilities for any physician, dentist or other health care professional primarily for use in his private practice.

Securities of an authority may be executed and delivered by it at any time and from time to time, shall be in such form and denominations and of such tenor and maturity or maturities not exceeding 40 years from their date, shall bear such rate or rates of interest (which may be fixed or which may float or vary based on some index or other standard deemed appropriate by the board), shall be payable and evidenced in such manner, may contain provisions for redemption prior to maturity and may contain other provisions not inconsistent with this article, all as may be provided by the resolution of the board authorizing the same or by the indenture whereunder such securities are authorized to be issued. Each such security having a specified maturity date more than 10 years after its date shall be made subject to redemption at the option of the authority at the end of the tenth year after its date, and on any interest payment date thereafter, under such terms and conditions as may be provided in the resolution authorizing the same or the indenture under which issued. Any borrowing may be effected by the issuance and sale of securities at either public or private sale in such manner, at such price or prices, at such time or times and on such other terms and conditions as may be determined by the board to be most advantageous to the authority.

(a) An authority may at any time and from time to time sell and issue its refunding securities for the purpose of refunding the principal of and interest on any then outstanding securities of the authority, whether or not such securities shall have matured or be redeemable at the option of the authority at the time of such refunding, and for the payment of any expenses incurred in connection with such refunding and any premium or other sum necessary to be paid to redeem or retire the securities so to be refunded; provided however, that the principal amount of securities that the authority may at any time issue for refunding purposes shall not exceed the sum of the following:

(1) The outstanding principal or face amount of the securities refunded thereby;

(2) The unpaid interest accrued or to accrue thereon to their respective maturities (or, in the event the securities to be refunded, or any part thereof, are to be retired prior to their respective maturities, the interest accrued or to accrue thereon to the date or dates on which they are to be retired);

(3) Any premium or other sum necessary to be paid in order to redeem or retire the securities to be refunded (but only if such securities are in fact to be redeemed or retired prior to their respective maturities); and

(4) The expenses estimated to be incurred in connection with such refunding.

(b) The principal proceeds derived by the authority from the sale of any refunding securities shall be used only for the payment of the principal of and the interest (and premium) on the securities being refunded and for payment of the expenses referred to in the preceding subdivision (4) of subsection (a) of this section; provided, that if in the judgment of the board such is necessary or desirable to effect an advantageous refunding, a portion of said proceeds may be used for payment of principal of and interest on such refunding securities themselves and the remainder of said proceeds for payment of the securities being refunded and of said expenses; and provided further, that any portion of said proceeds that shall at the time not be needed therefor, may be invested in such investments as are specified in Section 22-21-332.

(c) Any such refunding may be effected either by sale of refunding securities and the application of the proceeds thereof as provided in subsection (b) of this section, or by exchange of the refunding securities for the securities or coupons to be refunded thereby, or by any combination thereof; provided, that the holders of any securities or coupons so to be refunded shall not be compelled without their consent to surrender their securities or coupons for payment or exchange prior to the date on which they may be paid or redeemed by call of the authority under their respective provisions. All provisions of this article pertaining to securities of the authority that are not inconsistent with the provisions of this section shall, to the extent applicable, also apply to refunding securities issued by the authority and to securities issued by the authority for both refunding and other purposes.

All securities of an authority shall be signed in the name and behalf of the authority by its chairman or vice-chairman, and the seal of the authority shall be affixed thereto and attested by its secretary or an assistant secretary; provided, that a facsimile of the signature of one, but not both, of the officers whose signature will appear on such securities may be imprinted or otherwise reproduced on any thereof in lieu of his manually signing the same; and provided further, that a facsimile of the seal of the authority may be imprinted, or otherwise reproduced, on any such securities in lieu of being manually affixed thereto. Any coupons applicable to any securities of the authority shall be signed either manually by, or with a facsimile of the signature of, the chairman or the vice-chairman of the authority. If after any such securities or coupons shall be so signed, whether manually or by facsimile, any such officer shall, for any reason, vacate his office, the securities and coupons so signed may nevertheless be delivered at any time thereafter as the act and deed of the authority.

(a) Securities issued by an authority shall not be general obligations of the authority but shall be payable solely out of the revenues from any health care facilities or other properties or assets (including, without limitation, proceeds from such securities, investment income and insurance and condemnation proceeds) owned or operated by it and the proceeds of any hospital tax appropriated, apportioned or allocated to it or for its benefit, or any portion of either thereof, all as may be provided or specified in the resolution of the board authorizing such securities or the indenture under which issued. The principal of and interest (and premium, if any) on any securities issued by the authority shall be secured by a pledge of the revenues or taxes (or both) out of which the same are payable and may be secured by a trust indenture evidencing such pledge or by a foreclosable mortgage, mortgage indenture or mortgage and trust indenture conveying as security for such securities all or any part of its property.

(b) Any indenture executed on behalf of the authority and any resolution of the board authorizing the issuance of securities may contain such agreements as the board may deem advisable respecting the operation and maintenance of the properties of the authority, the application and use of any revenues (including hospital tax proceeds) out of which any such securities are payable, the rights or duties of the parties to such instrument or the parties for the benefit of whom such instrument is made and the rights and remedies of such parties in the event of default, and may also contain provisions restricting the individual rights of action of the holders of any such securities. Any such indenture may be filed in the office of the judge of probate of any county in which any of the property, real, personal or mixed, subject to the lien thereof is, or is anticipated to be, located, and the lien of such indenture shall, with respect to all personal property and fixtures subject thereto (including after-acquired property) and notwithstanding any contrary provisions of, and without compliance with, the Alabama Uniform Commercial Code (Title 7), be valid and binding against all parties having claims of any kind against the authority, irrespective of whether the parties have actual notice thereof, from the time such indenture is so filed. Any such pledge of any such revenues (including hospital tax proceeds) shall be valid and binding from the time it is made, and the revenues (including hospital tax proceeds) so pledged and thereafter received by the authority shall immediately become subject to the lien of such pledge without any physical delivery thereof or further act. The lien of such pledge shall, notwithstanding any contrary provisions of the Alabama Uniform Commercial Code (Title 7), and without compliance with the provisions thereof, be valid and binding against all parties having claims of any kind against the authority, irrespective of whether the parties have actual notice thereof, from the time there is filed in the office of the judge of probate of the county in which the principal office of the authority is located a notice stating the date on which the resolution authorizing the issuance of the securities was adopted by the board, the principal amount of the securities issued, a brief description of the revenues (including any hospital tax proceeds) so pledged and a brief description of any property the revenues from which are so pledged. Issuance by any authority of one or more series of securities for one or more purposes shall not preclude it from issuing other securities, but the resolution or indenture whereunder any subsequent securities may be issued shall recognize and protect any prior pledge or mortgage made for the benefit of any prior issue of securities unless in the proceedings authorizing such prior issue the right was reserved to issue subsequent securities on a parity with such prior issue. The trustee under any indenture may be a trust company or bank having trust powers, whether located within or without the state, and may be selected by the board without regard to the provisions of Chapter 25 of Title 36.

(a) The principal proceeds derived from any borrowing made by an authority shall be used solely for the purpose or purposes for which such borrowing was authorized to be made. If any securities are issued for the purpose of financing costs of acquiring, constructing, improving, enlarging and equipping health care facilities, such costs shall be deemed to include the following:

(1) The cost of any land forming a part of such health care facilities;

(2) The cost of the labor, materials and supplies used in any such construction, improvement or enlargement, including architectural and engineering fees and the cost of preparing contract documents advertising for bids;

(3) The purchase price of, and the cost of installing, equipment for such health care facilities;

(4) The cost of landscaping the lands forming a part of such health care facilities and of constructing and installing roads, sidewalks, curbs, gutters, utilities and parking places in connection therewith;

(5) Legal, accounting, publishing, printing, fiscal and recording fees and expenses incurred in connection with the authorization, sale and issuance of the securities issued in connection with such health care facilities; bond discount, commission or other financing charges; fees and expenses of financial advisers and planning and management consultants; the cost of any feasibility studies deemed necessary or advisable in connection with the issuance and sale of such securities; the amount of any debt service reserve that the board deems necessary or advisable to be funded out of the proceeds from the sale of such securities; and such other expenses as shall be necessary or incident to such borrowing;

(6) Interest on such securities for a reasonable period prior to the commencement of the construction and equipment of such health care facilities, or of any improvements or additions being financed (in whole or in part) out of the proceeds from the sale of such securities, and during the period estimated to be required for such construction and equipment and for a period of not more than two years after the completion of such construction and equipment;(6) Interest on such securities for a reasonable period prior to the commencement of the construction and equipment of such health care facilities, or of any improvements or additions being financed (in whole or in part) out of the proceeds from the sale of such securities, and during the period estimated to be required for such construction and equipment and for a period of not more than two years after the completion of such construction and equipment;

(7) The reimbursement to itself, or to its general fund or any one or more of its other funds, to any authorizing subdivision or other county or municipality, and to any public hospital corporation or other public agency, authority or body, of any funds advanced, to or for the benefit of the authority or any health care facilities owned by it, in anticipation of the issuance of securities by the authority, including the amount of any interest paid or incurred on any borrowings made for the purpose of obtaining funds to advance to or for the benefit of the authority or such health care facilities; and

(8) The amount of such reserves for the payment of debt service on any such securities and for the maintenance, repair, replacement, improvement and enlargement of any of its health care facilities and other properties as the board shall deem advisable.

(b) Any portion of the principal proceeds derived from any such borrowing not needed for any of the purposes for which such borrowing was authorized to be made shall be applied and used:

(1) For retirement of the securities issued in evidence of such borrowing;

(2) For payment of the interest thereon;

(3) For payment into one or more special funds created for payment of principal or interest, or both, or for the creation of reserves for the payment of debt service or for maintenance, repair, replacement, improvement or enlargement; or

(4) For any combination thereof, all as shall be specified in the indenture under which such securities are issued or in the resolution of the board authorizing any such borrowing.

All agreements and obligations undertaken, and all securities issued, by an authority shall be solely and exclusively an obligation of the authority and shall not create an obligation or debt of the state, any authorizing subdivision or any other county or municipality within the meaning of any constitutional or statutory provision. The faith and credit of the state, any authorizing subdivision or any other county or municipality shall never be pledged for the payment of any securities issued by an authority; nor shall the state, any authorizing subdivision or any other county or municipality be liable in any manner for the payment of the principal of or interest on any securities of an authority or for the performance of any pledge, mortgage, obligation or agreement of any kind whatsoever that may be undertaken by an authority.

Securities issued under the provisions of this article are hereby made legal investments for savings banks and insurance companies organized under the laws of the state. Unless otherwise directed by the court having jurisdiction thereof or the document that is the source of authority, a trustee, executor, administrator, guardian or one acting in any other fiduciary capacity may, in addition to any other investment powers conferred by law and with the exercise of reasonable business prudence, invest trust funds in securities of an authority. The governing body of any authorizing subdivision (or any county or municipality in which any health care facilities of an authority may be situated) is authorized, in its discretion, to invest in securities of such authority any idle or surplus money held in its treasury which is not otherwise earmarked or pledged.

Securities issued by an authority, while not registered, shall be construed to be negotiable instruments although payable solely from a specified or limited source. All coupons applicable to any securities issued by an authority, while the applicable securities are not registered as to both principal and interest, shall likewise be construed to be negotiable instruments although payable solely from a specified or limited source.

An authority shall be exempt from all laws of the state governing usury or prescribing or limiting interest rates, including, but without limitation to, the provisions of Chapter 8 of Title 8.

Any resolution authorizing any securities under this article may contain a recital that they are issued pursuant to the provisions of this article, which recital shall be conclusive evidence that such securities have been duly authorized pursuant to the provisions of this article, notwithstanding the provisions of any other law now in force or hereafter enacted or amended. Upon the adoption by the board of any resolution providing for the issuance of securities, the authority may, in its discretion, cause to be published, once a week for two consecutive weeks, in a newspaper then published in the county in which the principal office of the authority is located, or, if there is no such newspaper, then in a daily newspaper published in the state, a notice in substantially the following form, with any appropriate changes, to the extent applicable and with the blanks being properly filled in:

'_____, a public corporation and instrumentality under the laws of the state of Alabama, has authorized the issuance of $_____ principal amount of securities of the said authority to be dated _____, for purposes authorized in Act No. 82-418 enacted at the 1982 Regular Session of the legislature of Alabama. Any action or proceeding questioning the validity of the said securities, or the pledge [and any indenture] to secure the same, must be commenced within 20 days after the first publication of this notice.

Any action or proceeding in any court to set aside or question the validity of the proceedings for the issuance of the securities referred to in said notice or to contest the validity of any such securities, the validity of any pledge made therefor or the validity of any indenture with respect thereto must be commenced within 20 days after the first publication of such notice. After the expiration of the said period, no right of action or defense questioning or attacking the validity of the said proceedings, the said securities, any pledge herein authorized, or such indenture shall be asserted, nor shall the validity of the said proceedings, securities, pledge or indenture be open to question in any court on any ground whatsoever except in an action commenced within said period.

Any individual, association, corporation, partnership, limited liability company, or other business entity who operates or causes to be operated a hospital of any kind as defined in this article or any regulations promulgated hereunder without having been granted a license therefor by the State Board of Health shall be guilty of a Class A misdemeanor upon conviction except that the fine may be up to five thousand dollars ($5,000) upon conviction of a second or any subsequent offense. The State Board of Health, upon determination that a facility or business is operating as a hospital, within the meaning of this article or any rules promulgated hereunder, and that the facility does not have a current, valid license granted by the State Board of Health, may apply to the circuit court of the county in which the unlicensed facility is located for declaratory and injunctive relief. The proceedings shall be expedited. The sole evidentiary questions before the court in a proceeding shall be whether the facility that is the subject of the action meets the definition of a hospital, within the meaning of this article and any rules promulgated hereunder, and whether the facility has been granted a current and valid license to operate by the State Board of Health. If the State Board of Health prevails on these questions, then the court shall, upon request of the State Board of Health, forthwith grant declaratory and injunctive relief requiring the operator or operators to close the facility and requiring the operator or operators to move all residents or patients to appropriate placements. Any individual failing to obey an injunction to close a hospital shall be guilty of a Class A misdemeanor, except that the fine may be up to five thousand dollars ($5,000). Any individual, after having once been subject to such an injunction, who shall later operate or cause to be operated a hospital, as defined in this article or any regulations promulgated hereunder, without having been granted a license therefor by the State Board of Health shall be guilty of a Class A misdemeanor, except that the fine may be up to five thousand dollars ($5,000). The State Board of Health may, upon the advice of the Attorney General, maintain an action in the name of the state for an injunction to restrain any state, county or local governmental unit, or any division, department, board or agency thereof, or any individual, association, corporation, partnership, limited liability company, or other business entity, from operating, conducting or managing a hospital in violation of any provisions of this article, or any regulation promulgated hereunder. No county or municipality shall grant a business license to a hospital, as defined in this article, unless the facility holds a current license to operate granted by the State Board of Health. In any action to collect a fee for services brought against a resident or patient by a hospital, as defined in this article or regulations promulgated hereunder, it shall be a defense to the action to demonstrate that the operator of the hospital did not have a current and valid license to operate pursuant to this article at the time the services in question were rendered.

(a) Each authority and any authorizing subdivision are hereby respectively authorized to enter into one or more lease agreements with each other whereunder any health care facilities situated within (or within 10 miles of) such authorizing subdivision or any part thereof shall be leased by the authority to such authorizing subdivision, but if and only if such authorizing subdivision is then permitted by law to operate such health care facilities, to issue its bonds, warrants, notes or other securities therefor and to pledge for the benefit of any such securities its full faith and credit. No such lease agreement shall be for a term longer than the then current fiscal year in which it is made. Any such lease agreement may, however, contain a grant to such authorizing subdivision of successive options to renew such lease agreement, on the conditions specified therein, for additional terms, but no such additional term shall be for a period longer than the fiscal year in which such renewal shall be made. Such lease agreement may contain provisions as to the method by which such renewal may be effected.

(b) The obligation on the part of such authorizing subdivision to pay the rental required to be paid and to perform the agreements on its part required to be performed during any fiscal year during which such lease agreement is in effect shall constitute a general obligation of such authorizing subdivision, which is authorized to pledge its full faith and credit for the payment of such rental and the performance of such agreements; provided, that the rental required to be paid and the agreements required to be performed by such authorizing subdivision under such lease agreement during any fiscal year during which such lease agreement is in effect shall be payable solely out of the current revenues of such authorizing subdivision for such fiscal year.

(c) As additional security for the payment of the rental required to be paid and for performance of the agreements on the part of such authorizing subdivision required to be performed during the first or initial term of any lease agreement made by the authority with such authorizing subdivision, such authorizing subdivision is authorized to pledge specially so much of the following revenues and tax proceeds as may be necessary to pay the rental and to perform the agreements which are required in said lease agreement to be paid and performed during the said initial term:

(1) The revenues that may be received by such authorizing subdivision during the said initial term from the operation of the health care facilities covered by the said lease agreement remaining after the payment of all reasonable expenses during the said initial term for the operation and maintenance of the said health care facilities; and

(2) The proceeds that may be received by such authorizing subdivision during the said initial term from any tax or taxes, the proceeds of which the authorizing subdivision is authorized, in Section 11-81-16, to pledge for the benefit of bonds of such authorizing subdivision.

Whenever a lease agreement containing such a special pledge is renewed under its terms for an additional term, such special pledge shall be deemed effective for such additional term without the necessity of a new pledge being made or a new lease agreement being entered into for that purpose, and the exercise of the option to renew shall be construed as a renewal also of the said special pledge; provided, that said special pledge shall be applicable only to the aforesaid pledged revenues that are received by such authorizing subdivision during the fiscal year for which the lease agreement is renewed. Each such special pledge that shall be so effected by renewal of said lease agreement for an additional term shall be deemed to relate to, and to have been made as of, the date on which such lease agreement was made and shall take precedence over any pledge of said pledged revenues which might be made by such authorizing subdivision and over any claim which might arise against the said pledged revenues between the date on which such lease agreement was made and the first day of the additional term for which such lease agreement shall be so renewed. Any pledge of revenues made by such authorizing subdivision as aforesaid under the provisions of any contract made by it subsequent to the date of the lease agreement containing such special pledge shall be subordinate to the special pledge contained in such lease agreement.

(d) In any instance where a lease agreement contains a pledge of any tax proceeds, such authorizing subdivision shall during each fiscal year that such lease agreement shall be in effect:

(1) Levy the tax or taxes so pledged; and

(2) Use so much of the proceeds therefrom as may be necessary to pay the rentals and perform the agreements on the part of such authorizing subdivision which are required in such lease agreement to be paid and performed during such fiscal year.

(e) Any lease agreement may contain such covenants as shall not be inconsistent with this article. The rental required to be paid and the agreements required to be performed by such authorizing subdivision under the provisions of such lease agreement shall never create an indebtedness of such authorizing subdivision within the meaning of any constitutional or statutory limitation or provision. If any space available for rent in any health care facilities which shall have been leased, in whole or in part, to such authorizing subdivision should become vacant after acquisition or construction of such health care facilities by the authority, then until such time as all such vacant space therein shall have been filled or rented, neither such authorizing subdivision nor any officer, department or agency thereof, shall thereafter enter into any rental agreement, or renew any then existing rental agreement, for other space in or about such authorizing subdivision to be used for the same purposes for which such vacant space in such health care facilities is capable of being used.

(a) If there should be any default in the payment of the principal of or interest on any securities issued under this article, then the holder of any such securities and any coupons applicable thereto (subject to any provision of the resolution or indenture under which such securities were issued restricting the individual rights of action of any such holders or vesting such rights exclusively in a trustee), and the trustee under any indenture, or any one or more of them:

(1) May, by mandamus, injunction or other proceedings, compel performance of all duties of the directors and officers of the authority with respect to the use of funds for the payment of such securities and for the performance of the agreements of the authority contained in the proceedings under which they were issued;

(2) Shall be entitled to a judgment against the authority for the principal of and interest on the securities so in default;

(3) May, in the event such securities are secured by a mortgage on or security interest in any physical properties of the authority, foreclose such mortgage or pledge, exercise any powers of sale contained therein or exercise any possessory or other similar rights as are provided for in the resolution or indenture under which such securities were issued;

(4) Regardless of the sufficiency of the security for the securities in default and as a matter of right, shall be entitled to the appointment of a receiver:

a. To make lease agreements respecting any health care facilities or other properties out of whose revenues the securities so in default are payable and fix and collect rents therefor; and

b. To operate, administer and maintain such health care facilities and other properties, with all powers of a receiver in the exercise of any of said functions.

(b) If there should be any default by the authorizing subdivision in the payment of any installment of rent or in the performance of any agreement required to be made or performed by it under the provisions of any lease agreement described in Section 22-21-330, the authority and the trustee under any indenture, or either of them:

(1) May, by mandamus, injunction or other proceedings, compel performance by the officials of the authorizing subdivision of their duties respecting the payment of the rentals required to be paid and performance of the agreements on the part of the authorizing subdivision required to be performed under any such lease agreement; and

(2) Shall be entitled to a judgment against the authorizing subdivision for all monetary payments required to be made by the authorizing subdivision under the provisions of such lease agreement with respect to which the authorizing subdivision is then in default.

(c) The remedies specified in this section shall be cumulative to all other remedies which may otherwise be available, by law or contract, for the benefit of the holders of the securities and the coupons applicable thereto.

(a) To the extent permitted by the contracts of the authority with the holders of its securities and if not otherwise specifically prohibited by any other provision of this article, the authority may invest any portion of the principal proceeds derived from the sale of any of its securities which is not then needed for any of the purposes for which such securities were authorized to be issued, the moneys held in any special fund created pursuant to any resolution or indenture authorizing or securing any of its securities, and any other moneys of the authority not then needed by it, in any of the following:

(1) Federal securities;

(2) Any debt securities that are direct obligations of any agency of the United States of America;

(3) Interest-bearing bank time deposits and interest-bearing bank certificates of deposit; and

(4) Interest-bearing time deposits and interest-bearing certificates of deposit of any federally-chartered savings and loan association.

(b) Any securities, time deposits or certificates of deposit in which any such investment is made may, at any time and from time to time, be sold or otherwise converted into cash. The income derived from any such investments shall be disbursed on order of the board for any purpose for which the authority may lawfully expend funds.

All properties of an authority, whether real, personal or mixed, and the income therefrom, all securities issued by an authority and the coupons applicable thereto and the income therefrom, and all indentures and other instruments executed as security therefor, all leases made pursuant to the provisions of this article and all revenues derived from any such leases, and all deeds and other documents executed by or delivered to an authority shall be exempt from any and all taxation by the state, or by any county, municipality or other political subdivision of the state, including, but without limitation to, license and excise taxes imposed in respect of the privilege of engaging in any of the activities in which an authority may engage. An authority shall not be obligated to pay or allow any fees, taxes or costs to the judge of probate of any county in respect of its incorporation, the amendment of its certificate of incorporation or the recording of any document. Further, the gross proceeds of the sale of any property used in the construction and equipment of any health care facilities for an authority, regardless of whether such sale is to such authority or any contractor or agent thereof, shall be exempt from the sales tax imposed by Article 1 of Chapter 23 of Title 40 and from all other sales and similar excise taxes now or hereafter levied on or with respect to the gross proceeds of any such sale by the state or any county, municipality or other political subdivision or instrumentality of any thereof; and any property used in the construction and equipment of any health care facilities for an authority, regardless of whether such property has been purchased by the authority or any contractor or agent thereof, shall be exempt from the use tax imposed by Article 2 of Chapter 23 of Title 40 and all other use and similar excise taxes now or hereafter levied on or with respect to any such property by the state or any county, municipality or other political subdivision or instrumentality of any thereof.

The provisions of Chapter 25 of Title 36 shall, any provision thereof to the contrary notwithstanding, not apply to any authority, the members of its board or any of its officers or employees.

The provisions of articles 2 and 3 of chapter 16 of Title 41 shall not apply to any authority, the members of its board or any of its officers or employees.

Any municipality, county, or educational institution, any public hospital corporation and any other public agency, authority or body are hereby authorized to transfer and convey to any authority, with or without consideration:

(1) Any health care facilities and other properties, real or personal, and all funds and assets, tangible or intangible, relative to the ownership or operation of any such health care facilities that may be owned by such municipality, county, educational institution, public hospital corporation or other public agency, authority or body, as the case may be, or that may be jointly owned by any two or more thereof, including, without limiting the generality of the foregoing, any certificates of need, assurances of need or other similar rights appertaining or ancillary thereto, irrespective of whether they have been exercised; and

(2) Any funds owned or controlled by such municipality, county, educational institution, public hospital corporation or other public agency, authority or body, as the case may be, or jointly by any two or more thereof, that may have been raised or allocated for any of the purposes for which such authority shall have been organized, whether or not such property is considered necessary for the conduct of the governmental or public functions (if any) of such municipality, county, educational institution, public hospital corporation or other public agency, authority or body.

Such transfer or conveyance shall be authorized by an ordinance or resolution duly adopted by the governing body of such municipality, county, or educational institution or by the board of directors or other governing body of such public hospital corporation or other public agency, authority or body, as the case may be, and it shall not be necessary, any provision of law to the contrary notwithstanding, to obtain any certificate of need, assurance of need or other similar permit for any such transfer or conveyance. In the event of the transfer of any health care facilities to the authority, any hospital tax proceeds, other tax proceeds and other revenues apportioned or allocated to or for the benefit of the prior owner or operator of such health care facilities or for patient care at such health care facilities shall thereafter be paid to the authority.

An authority shall be a public corporation or authority and no part of its net earnings remaining after payment of its expenses shall inure to the benefit of any individual, firm or corporation, except that in the event the board shall determine that sufficient provision has been made for the full payment of the expenses, securities and other obligations of the authority, then any portion, as determined by the board, of the net earnings of the authority thereafter accruing may, in the discretion of the board, be paid to one or more of its authorizing subdivisions.

An authority shall constitute a 'hospital corporation' as that term is used in Division 2 of Article 4 of this chapter; and any county otherwise authorized to do so may designate any authority having the power to own and operate health care facilities situated in such county as the agency of such county to acquire, construct, equip, operate and maintain public hospital facilities in such county, in the manner and with the consequences specified in said Division 2. Such authority shall, if so designated, receive the proceeds from any special public hospital tax referred to in said Division 2. Further, the reincorporation hereunder of any public hospital corporation that has theretofore been designated as the agency of a county to acquire, construct, equip, operate and maintain public hospital facilities in such county shall in no way impair or invalidate such designation, and such reincorporated public hospital corporation shall continue as such (with the consequences specified in said Division 2) just as if it had not been reincorporated hereunder. Nothing in this section shall, however, be construed in any manner to limit any rights or powers otherwise conferred upon an authority pursuant to any other provision of this article.

At any time when the authority does not have any securities outstanding, and when there shall be no other obligations assumed by the authority that are then outstanding, the board may adopt a resolution, which shall be duly entered upon its minutes, declaring that the authority shall be dissolved. Upon the filing for record of a certified copy of said resolution in the office of the judge of probate in which the certificate of incorporation of the authority was filed, the authority shall thereupon stand dissolved, and in the event that it owned any assets or property at the time of its dissolution, the title to all its assets and property shall, subject to any constitutional provision or inhibition to the contrary, thereupon vest in one or more counties, municipalities, or educational institutions in such manner and interests as may be provided in the said certificate of incorporation; provided however, that if the said certificate of incorporation contains no provision respecting the vesting of title to the assets and property of the authority, title to all such assets and property shall, subject to any constitutional provision or inhibition to the contrary, thereupon vest in its authorizing subdivisions as tenants in common.

Under the circumstances listed below, an assisted living facility or a specialty care assisted living facility rising to the level of intermediate care may be subject to a civil money penalty imposed by the Board of Health not to exceed ten thousand dollars ($10,000) per instance. The imposition of the penalty may be appealed pursuant to the Alabama Administrative Procedure Act. All money penalties imposed pursuant to this section shall be remitted to the Department of Public Health and shall be deposited in the State General Fund. The penalties shall be deposited in the General Fund and shall not be earmarked for the Department of Public Health. Failure of an assisted living facility or a specialty care assisted living facility rising to the level of intermediate care to pay a civil money penalty within 30 days after its imposition or within 30 days after the final disposition of any appeal shall be grounds for license revocation unless arrangements for payment are made that are satisfactory to the State Board of Health. No assisted living facility or specialty care assisted living facility rising to the level of intermediate care may renew its license to operate if it has any unpaid civil money penalties which were imposed more than 30 days prior to the facility's license expiration date, except for any penalties imposed which are still subject to appeal and except for penalties for which arrangements for payment have been made that are satisfactory to the State Board of Health.

(1) A civil money penalty may be imposed for falsification of any record kept by an assisted living facility or specialty care assisted living facility rising to the level of intermediate care, including a medication administration record or any record or document submitted to the State Board of Health, by an employee or agent of the facility, where such falsification is deliberate and undertaken with intent to mislead the Board of Health, or its agents or employees, or residents, sponsors, family members, another state, county, or municipal government agency, or the public, about any matter of legal compliance, regulatory compliance, compliance with fire or life safety codes, or quality of care.

(2) A civil money penalty may be imposed as a result of a false statement made by an employee or agent of an assisted living facility or a specialty care assisted living facility rising to the level of intermediate care to an employee or agent of the State Board of Health, if the statement is made with intent to deceive or mislead the Board of Health, its agents or employees, about any matter of legal compliance, regulatory compliance, compliance with fire or life safety codes, or quality of care. A civil money penalty shall not be imposed if the facility's employee or agent makes a false statement when he or she has no reason to believe the false statement is authorized by the administrator or operator of the facility and if it is likely that the facility's employee or agent made the statement with the intent to cause damage to the facility.

Neither the formation or dissolution of one authority hereunder nor the reincorporation hereunder of a public hospital corporation shall prevent the subsequent incorporation hereunder of another authority or the subsequent reincorporation hereunder of another public hospital corporation pursuant to authority granted by one or more of the same authorizing subdivisions. Further, any county may authorize the incorporation of an authority hereunder notwithstanding the existence in such county of a public hospital corporation designated as the agency of such county with respect to public hospital facilities therein pursuant to the provisions of Division 2 of Article 4 of this chapter.

Any public hospital corporation may be reincorporated under this article, avail itself of all rights, powers and privileges and become subject to all duties, obligations and responsibilities conferred or imposed by this article, in the following manner:

(1) The board of directors or other governing body of such public hospital corporation shall adopt a resolution stating that it proposes and applies for permission to reincorporate hereunder and containing a form of proposed certificate of reincorporation, which such certificate of reincorporation shall include, with the necessary changes in detail, the information required to be included in a certificate of incorporation described in Section 22-21-314 other than that referred to in subdivision (b) (1) thereof.

(2) Such public hospital corporation shall as promptly as practicable thereafter file a certified copy of such resolution with the governing body of each county or municipality that authorized the formation of such public hospital corporation (and, with respect to any public hospital corporation organized under the provisions of Article 6 of this chapter, the governing body of any other municipality that is then a 'member' thereof); and each such county and municipality shall be deemed an 'authorizing subdivision' with respect to any such public hospital corporation reincorporated hereunder.

(3) The governing body of each authorizing subdivision shall, as promptly as may be practicable after the filing of said certified resolution, review and act upon the said resolution and application in the manner, with the necessary changes in detail, prescribed in Section 22-21-313.

(4) The chairman (or other principal officer) and the secretary of such public hospital corporation shall thereupon sign and acknowledge a certificate of reincorporation, in the form included in the resolution referred to in subdivision (1) of this section, and cause it to be filed for record in the office specified in Section 22-21-314.

(5) Thereupon, such certificate of reincorporation shall be filed and recorded by the judge of probate as provided in Section 22-21-314, and the existence of such public hospital corporation as an authority under this article shall begin upon the filing of such certificate of reincorporation as provided for in this section.

Any authority organized under the provisions of this article (as well as any public hospital corporation reincorporated hereunder) shall, insofar as the subject matter of this article is concerned, be governed exclusively by the provisions of this article, which shall not be construed in pari materia with any other statute.

This article shall not be construed as a restriction or limitation upon any power, right or remedy which any county, municipality, educational institution, or public hospital corporation now in existence or hereafter formed may have in the absence of this article. The provisions of this article are cumulative and shall not be deemed to repeal existing laws, except to the extent such laws are clearly inconsistent with the provisions of this article.

Nothing in this article shall be construed to permit the use, by or for the benefit of any authority, of the proceeds of any hospital tax for any purpose, at any place, or in connection with any health care facilities, not permitted or described in the constitutional, statutory or other provision of law authorizing the imposition, levy and collection of such hospital tax or the use of the proceeds therefrom. In order to assure the lawful disposition of such hospital tax proceeds, the board may require the deposit thereof into special funds or accounts established for that purpose and the accounting therefor in such manner as the board may deem necessary.

The following words and phrases used in this division shall, unless the context clearly indicates otherwise, have the following respective meanings:

(1) AUTHORITY. A public corporation organized, and any public hospital corporation reincorporated, pursuant to the provisions of the enabling statute.

(2) AUTHORIZING RESOLUTION. A resolution adopted by the board authorizing an arrangement by which an authority is to furnish office space to a nonhospital-based physician, dentist or other health care professional for use in his private practice.

(3) AUTHORIZING SUBDIVISION. A county, municipality, or educational institution with the governing body of which an application for the incorporation of an authority under the enabling statute, or for the reincorporation of a public hospital corporation thereunder, is filed (and any other county, municipality, or educational institution that may at the time constitute an 'authorizing subdivision' within the meaning of the enabling statute).

(4) BOARD. The board of directors of an authority.

(5) DIRECTOR. A member of a board.

(6) ENABLING STATUTE. Act No. 82-418 enacted at the 1982 Regular Session of the Legislature (codified as Article 11 of Chapter 21 of Title 22, as amended).

(7) NATIONALLY RECOGNIZED CREDIT RATING AGENCY. Any credit rating agency that is nationally recognized for skill and expertise in rating the credit of obligations similar to securities issued by an authority (including, without limiting the generality of the foregoing, Moody's Investors Service, Inc., and Standard & Poor's Corporation).

(8) SECURITIES. Bonds, notes, warrants, certificates of indebtedness or other evidences of indebtedness, including (without limiting the generality of the foregoing) notes issued in anticipation of the sale of any of the foregoing.

The term 'federal securities,' as used in this division, shall have the same meaning given it in the enabling statute.

The Legislature hereby finds and declares as follows:

(1) That in order to promote the public health of the people of the State of Alabama, the Legislature enacted the enabling statute, whereunder, among other things:

a. The several counties, municipalities, and educational institutions of the state are effectively authorized to form public corporations known as health care authorities, and

b. Existing public hospital corporations are authorized to reincorporate as health care authorities;

(2) That all such health care authorities are empowered under and pursuant to the enabling statute, among other things:

a. To own and operate public hospitals and other health care facilities;

b. To furnish office space to (among others) any nonhospital-based physician, dentist or other health care professional for use in his private practice, subject to the conditions specified in the enabling statute; and

c. To appoint, employ, contract with, and provide for the compensation of accountants; and

(3) That as a result of significant changes and developments in the economic and commercial structure and practices of health care providers since the enactment of the enabling statute, it is now necessary, in order to enable health care authorities organized or reincorporated pursuant to the provisions of the enabling statute to continue to operate adequately and efficiently, that the legislature:

a. Confer on such health care authorities certain powers in addition to, and in furtherance of, those conferred by the enabling statute; and

b. Provide further for the corporate structure of such health care authorities.

(a) Except as otherwise provided in the last sentence of this subsection, any authority that now exists, or that is hereafter organized or reincorporated (as the case may be) pursuant to the provisions of the enabling statute, shall have the power to amend its certificate of incorporation or certificate of reincorporation, in the manner hereinafter provided, so as to provide:

(1) That the governing body of an authorizing subdivision empowered (either alone or jointly with the governing body or bodies of one or more other authorizing subdivisions) to elect or appoint one or more directors shall so elect or appoint all or any of such directors only from a list of nominees, as provided in subdivision (2) below, proposed by the board and otherwise qualified, in accordance with law and with the terms of such certificate of incorporation or certificate of reincorporation (as the case may be), or any amendment thereto made pursuant to the provisions of the enabling statute, to serve as a director; and

(2) That in the case of a vacancy resulting from the expiration of the stated term of office of any such director, the board shall, not more than 90 nor less than 10 days prior to the expiration of such term of office (or in case of a vacancy resulting from the death or resignation of any such director or from a cause other than the expiration of the stated term of office of any such director, within 30 days following the occurrence of such vacancy):

a. By resolution duly adopted, propose a list of nominees (not less than three in number) for each place or seat on the board that is or is to become vacant as aforesaid; and

b. Cause a certified copy of such resolution to be filed with the governing body of the authorizing subdivision or subdivisions empowered to elect or appoint such director.

(b) Nothing in this section shall be construed to prohibit the inclusion in the original certificate of incorporation or certificate of reincorporation of any authority (or in any amendment thereto made pursuant to the provisions of the enabling statute) of provisions requiring the election or appointment of any director of such authority by the governing body of an authorizing subdivision (either alone or jointly with the governing body or bodies of one or more other authorizing subdivisions) from a list of nominees proposed by the board, provided that the number of directors elected or appointed by the governing body or bodies of one or more authorizing subdivisions without reference to any list of nominees (whether proposed by the board or otherwise) or other condition, is at least a majority of the total number of directors, it being understood and intended by the Legislature, however, that in the case of an amendment to the certificate of incorporation or certificate of reincorporation made pursuant to the provisions of the preceding subsection (a), there shall be no limit on the number of directors that may be elected or appointed by the governing body or bodies of the authorizing subdivisions only from a list of nominees proposed by the board.

Any authority shall have, in addition to the power to sell and issue interest-bearing securities that are limited as to source of payment, the power to sell and issue interest-bearing securities that are not limited as to source of payment and that are general obligations of the authority. The principal of and interest on (and premium, if any) any securities issued by the authority pursuant to the provisions of this section may be secured by:

(1) A pledge of the general credit of the authority; or

(2) Both such a pledge of the general credit of the authority and a special pledge of specific revenues or taxes (or both) identified in the proceedings authorizing the sale and issuance of such securities;

In determining the financial effect of an arrangement between an authority and any nonhospital-based physician, dentist or other health care professional for the furnishing of office space to any such person for use in his private practice (for purposes of those provisions of the enabling statute relating thereto), the board:

(1) May, in the determination of the rental and other consideration to be received by the authority from the furnishing of such office space, consider not only the dollar amount of such rental and other consideration being or to be paid by such person pursuant to such arrangement, but also such other circumstances or conditions as it shall generally describe in an authorizing resolution, including (without limitation and by way of example or illustration) factors such as the probability or possibility that such person will refer patients or others to any one or more of the health care facilities owned or operated by the authority or will otherwise make use of, and compensate the authority for, services provided at or by any such health care facilities;

(2) In such event, may (in the authorizing resolution) assign to such other circumstances or conditions such value as in its discretion it deems appropriate and warranted; and

(3) May furnish office space to such person if the dollar amount of the rental and any other consideration being or to be paid to the authority by such person, when added to the value so assigned to such other circumstances and conditions, is not less than the cost of such office space to the authority, any provisions of the enabling statute to the contrary notwithstanding.

In addition to the investment powers granted by the enabling statute, any authority shall, to the extent permitted by the contracts of such authority with the holders of its securities, have the further power to invest any portion of the principal proceeds derived from the sale of any of its securities not then needed for any of the purposes for which such securities were authorized to be issued, any moneys held in any special fund created pursuant to any resolution or mortgage, mortgage indenture, mortgage and trust indenture or trust indenture authorizing or securing any of its securities, and any other moneys of such authority not then needed by it, in any of the following:

(1) Debt securities (whether general obligations or limited or special obligations) of any state, territory or possession of the United States of America and of any political subdivision of any such state, territory or possession, but if and only if at the time of their acquisition for the account of the authority, such securities are rated by a nationally recognized credit rating agency in one of its four highest rating categories;

(2) Commercial paper of a corporation incorporated under the laws of any state of the United States of America, but if and only if at the time of the acquisition thereof for the account of the authority, such commercial paper is rated 'prime one' (or the equivalent thereof) by a nationally recognized credit rating agency;

(3) Banker's acceptances endorsed or guaranteed by a bank whose senior long-term debt obligations are, at the time of the acquisition of such acceptances for the account of the authority, rated by a nationally recognized credit rating agency in one of its three highest rating categories (or by a bank that is owned or controlled by a bank holding company whose senior long-term debt obligations are, at the time of the acquisition of such acceptances for the account of the authority, rated by a nationally recognized credit rating agency in one of its three highest rating categories);

(4) Bonds and debentures of a corporation incorporated under the laws of any state of the United States of America, but if and only if at the time of the acquisition thereof for the account of the authority, such bonds or debentures have an investment grade rating (or its equivalent) from a nationally recognized credit rating agency; and

(5) To the extent not prohibited by the Constitution of Alabama:

a. Investments in a money market fund or other similar fund, all or substantially all the assets of which consist of federal securities or other assets in which an authority is permitted, by the enabing statute or by the preceding provisions of this section, to invest moneys directly,

b. Participation certificates in federal securities, and

c. Investment or cash management agreements with a bank whose senior long-term debt obligations are, at the time of the acquisition of any such investment or cash management agreement for the account of the authority, rated by nationally recognized credit rating agency in one of its three highest rating categories (or with a bank that is owned or controlled by a bank holding company whose senior long-term debt obligations are, at the time of the acquisition of any such investment or cash management agreement for the account of the authority, rated by a nationally recognized credit rating agency in one of its three highest rating categories).

The provisions of this division shall be construed as cumulative of the provisions of the enabling statute, shall be construed in pari materia therewith and shall not be deemed to repeal any provisions of the enabling statute or other existing law except to the extent (but only to the extent) that any such provisions of the enabling statute or other existing law clearly conflict, or are clearly inconsistent, with the provisions of this division.

As used in this division, the following terms shall have the following respective meanings unless the context clearly indicates otherwise:

(1) AUTHORITY. Any public corporation now or hereafter organized or reincorporated, as the case may be, pursuant to the provisions of the Health Care Authorities Act.

(2) AUTHORIZING SUBDIVISION. Each county, municipality, and educational institution with the governing body of which the application for the incorporation of any authority under the Health Care Authorities Act or the reincorporation of a public corporation under the Health Care Authorities Act was filed.

(3) COUNTY. Any county in the State of Alabama.

(4) GOVERNING BODY. With respect to a county, its county commission or other like governing body, and, with respect to a municipality, its city or town council, board of commissioners or other like governing body, and, with respect to an educational institution, its board of trustees, or other like governing body.

(5) EDUCATIONAL INSTITUTION. A public college or university established under the Constitution of Alabama or act of the Alabama Legislature that operates a school of medicine.

(6) HEALTH CARE AUTHORITIES ACT. Act No. 82-418 enacted at the 1982 Regular Session of the Legislature of Alabama, as supplemented by Act No. 87-745 enacted at the 1987 Regular Session of the Legislature of Alabama (codified as Articles 11 and 11A of Chapter 21 of Title 22 as amended).

(7) MUNICIPALITY. An incorporated city or town of the State of Alabama.

In addition to all other powers at any time conferred on it by law, and subject to any express provisions of its certificate of incorporation or certificate of reincorporation to the contrary, an authority shall (to the extent at the time not prohibited by the Constitution of Alabama) have the following powers, together with all powers incidental thereto or necessary to the discharge thereof in corporate form:

(1) To participate as a shareholder in a corporation, as a joint venturer in a joint venture, as a general or limited partner in a limited partnership or a general partnership, as a member in a nonprofit corporation or as a member of any other lawful form of business organization, which provides health care or engages in activities related thereto;

(2) To make or arrange for loans, contributions to capital and other debt and equity financing for the activities of any corporation of which such authority is a shareholder, any joint venture in which such authority is a joint venturer, any limited partnership or general partnership of which such authority is a general or limited partnership, any nonprofit corporation in which such authority is a member or any other lawful form of business organization of which such authority is a member, and to guarantee loans and any other obligations for such purposes;

(3) To elect (i) all or any of the members of the board of directors of any nonprofit corporation of which such authority is a member or of which any one or more of the members of the board of directors of such authority is an ex officio member (subject, however, to any contrary or inconsistent provision of the articles of incorporation or bylaws of such nonprofit corporation), and (ii) all or any of the members of the board of directors of any nonprofit corporation that has no members and whose articles of incorporation or bylaws provide for the election of one or more of the members of its board of directors from among members of the board of directors of such authority (subject, however, to any contrary or inconsistent provision of the articles of incorporation or bylaws of such nonprofit corporation); provided, however, that if the board of directors of an authority adopts, and files for record in the office of the judge of probate of that county in which its certificate of incorporation or certificate of reincorporation is filed, a certified copy of a resolution to such effect, the election by such authority of any member of the board of directors of any nonprofit corporation who it would otherwise have the right to elect shall be effective only upon the consent of the governing body of each authorizing subdivision with respect to such authority;

(4) To create, establish, acquire, operate or support subsidiaries and affiliates, either for profit or nonprofit, to assist such authority in fulfilling its purposes;

(5) To create, establish or support nonaffiliated for profit or nonprofit corporations or other lawful business organizations which operate and have as their purposes the furtherance of such authority's purposes;

(6) Without limiting the generality of the preceding subdivisions (4) and (5), to accomplish and facilitate the creation, establishment, acquisition, operation or support of any such subsidiary, affiliate, nonaffiliated corporation or other lawful business organization, by means of loans of funds, leases of real or personal property, gifts and grants of funds or guarantees of indebtedness of such subsidiaries, affiliates and non-affiliated corporations;

(7) To indemnify any person (including for purposes of this subdivision such person's estate and personal representatives) made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that he or she is or was a board member, officer, or a physician acting as an agent of such authority in the performance of duties delegated by the board of directors as contained in the medical staff bylaws, medical staff rules and regulations, or policies adopted by the board of directors of such authority, or serves or served any other corporation or other entity or organization (whether for profit or not for profit) in any capacity at the request of the authority while he or she was a board member, officer of the authority, or a physician acting as an agent of such authority as stated above, against all judgments, fines, amounts paid in settlement and reasonable expenses (including, without limitation, attorneys' fees actually and necessarily incurred) as a result of any such action or proceeding, or any appeal therein; provided, however, that nothing herein shall be construed as permitting indemnification of any person:

a. In connection with any malpractice action or proceeding arising out of or in any way connected with such person's practice of his profession;

b. In connection with an action or proceeding by such authority in which a person is adjudged liable to such authority; or

c. In connection with any other action or proceeding in which such person is adjudged liable on the basis that personal benefit was improperly received by such person.

(8) To make any other indemnification now or hereafter authorized by law; and

(9) To have and exercise all powers necessary or convenient to effect any or all the purposes for which authorities are organized.

It is the intent of the Legislature by the passage of this division to clarify existing provisions of statutory law respecting the powers of authorities. To that end, the grant to such authorities of the powers specified in Section 22-21-358 shall be deemed declarative of existing statutory law and shall therefore have both a prospective and a retroactive or retrospective operation.

This article shall be known and cited as the 'Alabama Dental Services Corporation Act.'

The following terms shall have the meanings respectively ascribed by this section unless the context clearly indicates otherwise:

(1) COMMISSIONER. The commissioner of insurance of this state.

(2) DENTAL SERVICE PLAN or PLAN. Any plan or other arrangement whereby dental services are provided in whole or in part through a dental service corporation by dentists participating in the plan to provide dental services to those members of the public who become subscribers to the plan under a contract with such corporation. The terms 'Dental Service Plan' or 'plan' do not include an insurer authorized by the insurance department to transact insurance in this state or to a nonprofit health insurance plan organized pursuant to Section 10-4-100, or to any policy of insurance or contract which includes dental benefits issued by such insurer or nonprofit health insurance plan.

(3) DEPARTMENT. The Department of Insurance.

(4) LICENSE. The certificate of authority issued by the Department of Insurance to dental service plan corporations authorizing such corporations to issue contracts to subscribers or groups for dental services, pursuant to dental service plans as provided in this law, or the license issued to employees or representatives of such corporations authorizing such persons to carry on the business of such corporations as provided in this law, whichever is appropriate.

(5) SUBSCRIBER. A member of the public or group who has contracted with a dental service plan corporation for the provision of dental services.

(a) Any Dental Service Plan Corporation shall be incorporated under the provisions of the laws of Alabama, except to the extent that the provisions thereof are in conflict with the provisions of this article. Every charter or certificate of incorporation of such corporation shall have endorsed thereon or affixed thereto the consent of the commissioner of insurance.

(b) The affairs of any dental service plan corporation shall be managed by a board of directors composed of not fewer than five members, all of whom shall be residents of this state.

(a) The incorporators shall file with the commissioner an application for a certificate of authority to do business upon a form to be furnished by the department, which shall include or have attached the following:

(1) The names, and for the preceding 10 years, all addresses and all occupations of all incorporators and proposed directors and officers;

(2) A certified copy of the corporate articles and bylaws and all amendments thereto, a list of the names, addresses, and occupations of all directors and principal officers and, if previously incorporated, for the three most recent years, the corporation annual statements and reports;

(3) All agreements relating to the corporation to which any incorporator or proposed director or officer is a party;

(4) A statement of the amount and sources of the funds available for organization expenses and the proposed arrangements for reimbursement and compensation of incorporators or other persons;

(5) A statement of compensation of the directors and officers;

(6) The forms to be used for any proposed contracts between the corporation and providers of dental services and any corporations which perform administration, marketing or management services, concerning the provision of services to subscribers;

(7) The operating plan for conducting the dental service plan corporation, including all of the following:

a. The geographical area in which business is intended to do business in the first five years;

b. The types of dental service plan coverage intended to be provided in the first five years, including specification whether and to what extent services are to be provided;

c. The proposed marketing methods and management procedures, together with projected subscriber participation;

d. Actuarial data or other similar statistical data, documented and verified in such manner as the department may reasonably require, affirmatively demonstrating the anticipated income and expenses in the first five years, including, without limitation, the projected expenditure for dental services; and projected source of funds to make up any anticipated deficits.

(8) A current statement of the assets and liabilities of the applicant;

(9) Forms of all prepaid dental service contracts the applicant proposes to offer showing the rates to be charged for each form of contract;

(10) Such other documents or information as the department may reasonably require or deem necessary.

The commissioner shall issue a certificate of authority if he is satisfied that:

(1) All requirements of law have been met;

(2) All natural persons who are incorporators, the directors and principal officers of corporate incorporators, and the proposed directors and officers of the corporation being formed are trustworthy and competent and collectively have the competence and experience to engage in the particular dental service business proposed; and

(3) The business plan is consistent with the interests of the corporation's potential subscribers and of the public, and that the working capital meets the minimum requirements of not less than $100,000.00.

If the charter or certificate of incorporation of any proposed corporation specifies among its purposes the establishment, maintenance, and operation of a dental service plan, such charter or certificate of incorporation shall be referred by the Secretary of State to the Department of Insurance, and such charter or certificate shall not be filed until the consent of the commissioner shall be endorsed thereon and affixed thereto.

(a) The rates charged by a dental service plan corporation to the subscribers for dental services shall at all times be subject to the approval of the department.

(b) Every contract between a dental service plan corporation and a dentist, whereby the plan provides for payment of a fee or fees to the dentist for dental services rendered by the dentist to subscribers, shall contain a clause stating that the dental service plan corporation shall be liable for such fee or fees rather than the subscribers receiving said dental services. Such contract shall also contain a clause whereby, upon termination of the contract by either party or upon expiration thereof, a dentist is obligated to complete any procedure which he has undertaken upon any subscriber.

No corporation subject to the provisions of this article shall issue contracts to subscribers for dental services pursuant to a dental service plan until the department has, by formal licenses, authorized it to do so.

Any proposed contracts issued to subscribers to the plan shall be written in a form that is readable and comprehensible by a layman of reasonable and ordinary intelligence, and shall:

(1) Clearly set forth the services to which the subscriber is entitled under the contract.

(2) Clearly set forth the limitations, if any, on the choice of dentists available to the subscriber.

(3) Clearly reflect the rate to be charged for each form of such contract.

Any proposed contracts between the corporation and dentists participating in the plan shall:

(1) List the responsibilities incurred by each party;

(2) Delineate the procedures for the remuneration of dentists for services provided thereby;

(3) Define and delineate the legal liabilities of the parties to one another, to subscribers, and to other affected persons; and

(4) Set forth the circumstances and procedures for terminating the contract.

(a) To assure the faithful performance of its obligations in the event of insolvency each dental service corporation authorized under Section 22-21-364 shall, through the commissioner, deposit and maintain with the Treasurer of the State Securities of the type eligible for deposit by insurers under Section 27-6-3, which securities shall have at all times a market value as follows:

(1) A corporation which has operated no dental service plan in this state prior to January 1, 1983, shall, prior to the issuance of its certificate of authority and before receiving any subscription payments, place in trust with the Treasurer of the State, through the commissioner an initial amount of $50,000.00;

(2) A corporation operating a dental service plan business in this state prior to January 1, 1983, and having received in this state less than $300,000.00 of subscriptions, membership fees, or similar charges, shall place in trust with the Treasurer of the State, through the commissioner, a sum equal to 50 percent of the subscriptions received or $50,000.00, whichever is less;

(3) A corporation operating a dental service plan business in this state prior to January 1, 1983, and having received in this state more than $300,000.00 but less than $750,000.00 of subscriptions, membership fees, or similar charges, in this state shall place in trust with the Treasurer of the State, through the commissioner an amount not less than $75,000.00;

(4) A corporation operating a dental service plan business in this state prior to January 1, 1983, and having received in this state $750,000.00 or more of subscriptions, membership fees, or similar charges, in this state shall place in trust with the Treasurer of the State, through the commissioner, an amount equal to $100,000.00.

(b) In lieu of any deposit of securities required under subsection (a) and subject to the commissioner's approval, a dental service plan corporation may file with the Treasurer of the State a surety bond issued by a surety insurer authorized to serve as surety under the provisions of Chapter 24 of Title 27. The bond shall be for the same purpose as the deposit in lieu of which it is filed. The department shall not approve any bond under the terms of which the protection afforded against insolvency is not equivalent to the protection afforded by those securities provided for in subsection (a).

(c) Securities or bonds posted pursuant to this section shall be for the benefit of and subject to action thereon in the event of insolvency or impairment of any dental service plan corporation by any person or persons sustaining an actionable injury due to the failure of the corporation to faithfully perform its obligations to its subscribers.

(d) The commissioner shall be responsible for the safekeeping of all securities. Said securities under this section shall be deposited with the state treasurer. Such securities shall not, on account of being in this state, be subject to taxation, but shall be held exclusively and solely to guarantee the dental service plan corporation's performance of its obligations to its subscribers.

(e) Such deposit or bond shall be maintained unimpaired as long as the dental service plan corporation continues in business in this state. Whenever the corporation ceases to do business in this state and furnishes the commissioner proof, satisfactory to the commissioner, that it has discharged or otherwise adequately provided for all its obligations to its subscribers in this state, the commissioner shall release the deposited securities to the parties entitled thereto, or shall release any bond filed with the commissioner in lieu of such deposit.

(f) The commissioner may at any time enter an order increasing the amount of the deposit or bond specified under this section if he finds that there has been a substantial change in the facts, including an increase in the amount of subscriptions, membership fees, or similar charges in force in this state on which the original determination was based. The commissioner shall hold a hearing within 30 days after receiving a request from the corporation submitted within 30 days after being notified of the modification order. Failure to meet the new requirements within 30 days after final decision or after the expiration of the 30-day period for submitting the hearing request constitutes a ground for rehabilitation.

(a) Dental service plan contracts may be written on individual, group, blanket or franchise basis. Each contractual obligation for such dental service(s) must be evidenced by a contract. Each person covered under a group contract must be issued a certificate of coverage.

(b) No contract or certificate of dental service benefits may be issued in this state unless a copy of the form has been filed and approved by the commissioner.

(c) The commissioner may not approve any form that does not meet the following requirements:

(1) Contracts must contain a list and description of the dental service payments promised or the dental work for which expenses are to be reimbursed, and any limits on the amounts to be paid or reimbursed;

(2) Contracts and certificates must indicate the name of the dental service plan corporation and the full address of its principal place of business;

(3) Certificates issued under group contracts must contain a full statement of the services to be provided and exceptions thereto but may summarize the other terms of the master contract;

(4) Contracts promising payment for dental services to be provided by a limited number of dentists who have concluded provider contracts with the dental service corporation whether the dentist in an individual case is to be selected by the subscriber or by the corporation, must provide for alternative benefits in the case where the subscriber is unable to find a participating dentist willing to perform the promised services or the dentist selected by the corporation is disqualified or otherwise unable to perform the promised services; the alternative benefit may consist of furnishing the services of a dentist selected and paid by the corporation or paying the fee of a dentist selected by the subscriber; the contract must also provide a procedure that includes impartial review for settling disagreements about the grounds for demanding an alternative benefit;

(5) Contracts must contain a statement that the subscriber has a right to complain to the Alabama board of dental examiners about a dentist's conduct pursuant to either the plan or recognized standards of ethical and professional code of conduct;

(6) Contracts must contain a statement that the individual subscriber has the right to retain, at his own expense, any dentist authorized to practice dentistry in this state.

(d) The department may disapprove a contract or certificate form if it finds that it:

(1) Is unfair, unfairly discriminatory, misleading, ambiguous or encourages misrepresentation or misunderstanding of the contract;

(2) Contains provisions that would endanger the solvency of the corporation;

(3) Is contrary to law.

(a) No contract providing dental service corporation benefits may be executed in this state unless the subscription rates outlined in said contract have been filed with and approved by the commissioner.

(b) Subscription rates must be established and justified in accordance with generally accepted insurance principles, including but not limited to the experience or judgment of the corporation making the rate filing or actuarial computations.

(c) The commissioner may disapprove subscription rates that are excessive, inadequate or unfairly discriminatory. Rates are not unfairly discriminatory because they are averaged broadly among persons covered under group, blanket or franchise contracts.

(d) The commissioner may require the submission of whatever relevant information is deemed necessary in determining whether to approve or disapprove a filing made under this section or Section 22-21-371.

(a) All contracts made between the corporation and participating dentists and all contracts with other providers of services by the dental service plan corporation must be filed with and approved by the commissioner, and any amendment or change thereto.

(b) Dental service corporations must annually report to the commissioner in such detail as is reasonably required, the number and geographical distribution of dentists and other providers of services with whom it maintains contractual relations, and the nature of the relations. For an individual corporation or groups of corporations the commissioner may require more frequent reports.

(a) A dental service corporation will pay the prescribed fees and taxes required of a disability insurer.

(b) The following provisions of the insurance laws of this state apply to dental service corporations authorized by this article, to the extent that they are not inconsistent with the provisions herein:

(1) Title 27, Chapters 1 and 2, Administration and General Provisions;

(2) Title 27, Chapter 4, Fees and Taxes;

(3) Title 27, Chapter 6, Administration of Deposits;

(4) Title 27, Chapter 12, Unfair Trade Practices;

(5) Title 27, Chapter 32, Insurer Insolvency; Rehabilitation and Liquidation.

(c) The commissioner may by rule modify or waive any requirements referred to in subsection (b) for dental service corporations if that is necessary to avoid unreasonable hardship, expense, or inconvenience and if the interests of subscribers continue to be adequately protected.

(a) The Department of Insurance shall issue a license to each applicant upon payment of the prescribed fees and upon being satisfied that:

(1) The applicant has been organized in a bona fide manner for the purpose of establishing, maintaining, and operating a dental service plan.

(2) Each contract executed, or proposed to be executed, by the applicant and a dentist obligates, or will when executed obligate, such dentist to render the service or accept payment for the service to which each subscriber may be entitled under the terms of the contract issued to the subscriber.

(3) Each contract issued, or proposed to be issued, to subscribers is in a form approved by the department and that the rates charged, or proposed to be charged, for each form of such contract and benefits to be provided pursuant thereto are fair and reasonable and are actuarially sound.

(4) No contributions to the funds of the dental service plan corporation for working capital are repayable by the corporation except out of earned income over and above operating expenses and dental expenses and such reserves as the department may deem adequate.

(5) The amount of money actually received by the applicant for working capital is sufficient according to the terms specified in subsection (6) to carry all acquisition costs and operating expenses for a period of at least six months from the date of issuance of license or $100,000.00, whichever is greater.

(6) The owners or persons controlling or managing the dental service plan have been found by the department to be competent, trustworthy, and to possess managerial experience that would make the proposed dental service plan corporation beneficial to the persons receiving dental services or benefits therefrom. The department shall not grant or continue authority to transact the business of a dental service plan corporation at any time if the department has good reason to believe that any owner or other person controlling or managing said corporation is a person whose business operations are or have been marked by business practices or conduct that is to the detriment of the public, of creditors, or of persons receiving dental services, either through the improper manipulation of assets or accounts or by bad faith.

(7) The applicant has obtained valid contracts with an adequate number of dentists to provide the services proposed to the projected subscriber population.

(8) The plan has a reasonable possibility of success, based on projections by the applicant and on information otherwise available to the department.

(b) Such license shall remain in effect unless revoked by the department and any dental service plan corporation to which such license has been issued and is in effect shall be authorized to issue contracts, in the form or forms approved by the department, to the persons who may become subscribers. However, the department shall revoke the license of any such corporation which is not in active operation within six months of the issuance of the license unless good cause is shown.

(c) Except as otherwise provided by this article, no person shall operate a dental service plan corporation without a license as herein required.

(d) Each dental service plan corporation shall establish procedures for review and mediation of complaints of subscribers concerning the quality of care rendered by a participating dentist, complaints of subscribers or participating dentists concerning the benefits or the operations of the plan, and complaints of the corporation concerning any element of its relationship with a participating dentist. Such procedures shall be subject to the approval of the department. In addition to establishing such procedures, the corporation may agree in a written document submitted to the department the corporation's desire to utilize the peer review services of the Alabama Dental Association. Subscribers and participating dentists shall be made aware of the review mechanism adopted by the dental service plan corporation and shall be informed as to how to submit a complaint for review.

Persons representing or aiding a dental services corporation in the solicitation of dental service contracts in this state and the dental services corporation with respect thereto shall be subject to Chapters 7 and 8A of Title 27, except that dental services corporation producers shall be exempt from the 40-hour prelicensing course and written examination requirements of Chapter 7 and the continuing education requirements of Chapter 8A of Title 27.

Repealed by Act 2001-702, p. 1509, §16, effective January 1, 2002.

Repealed by Act 2001-702, p. 1509, § 16, effective January 1, 2002.

Repealed by Act 2001-702, p. 1509, § 16, effective January 1, 2002.

Repealed by Act 2001-702, p. 1509, § 16, effective January 1, 2002.

Repealed by Act 2001-702, p. 1509, § 16, effective January 1, 2002.

(a) If, pursuant to procedures provided for in this article, it is found that one or more grounds exist for the suspension or revocation of, or refusal to renew or continue, any registration issued under this article, and except when such suspension, revocation, or refusal is mandatory, an order may be entered imposing upon the registrant, in lieu of such suspension, revocation, or refusal, an administrative penalty for each violation in the amount of $100.00 or, in the event of willful misconduct or willful violation on the part of the registrant, an administrative fine of $500.00. The administrative penalty may be augmented in amount by an amount equal to any commissions received by or accruing to the credit of the registrant in connection with any transaction to which the grounds for suspension, revocation, or refusal related.

(b) The order may allow the registrant a reasonable period, not to exceed 30 days, within which to pay to the commissioner the amount of the penalty so imposed. If the registrant fails to pay the penalty in its entirety to the commissioner at his office in Montgomery within the period so allowed, the registration of the registrant shall stand suspended or revoked, or renewal or continuation may be refused, as the case may be, upon expiration of such period and without any further proceedings.

All moneys received pursuant to this article shall be deposited to the credit of the Examiners' Revolving Fund of the Department of Insurance.

Nothing contained herein shall be construed to regulate the practice of dentistry or limit the powers or authority of the board of dental examiners in the regulation of the conduct of dentists.

No corporation subject to the provisions of this article shall amend its charter or certificate of incorporation, its bylaws, the terms or provisions of contracts executed or to be executed with dentists, or the terms or provisions of contracts issued or proposed to be issued to subscribers unless such proposed amendments have been submitted to and approved by the department of insurance. No change shall be made in the table of rates charged or proposed to be charged to subscribers, or in the table of payments made or proposed to be made to dentists, for any form of contract issued or to be issued until such proposed change has been submitted to and approved by the department of insurance. Such approval shall be deemed granted unless the department otherwise acts upon the proposed changes within 90 days of filing. Upon the adoption of any amendment or change following departmental approval, such corporation shall file with the department a copy thereof duly certified by at least two of the executive officers of the corporation.

(a) The Department of Insurance, any agent or examiner of the department, or any other person appointed by the department shall have the power of visitation and examination into the affairs, transactions, accounts, business records, and assets of any such dental service plan corporation, shall have free access to all of the books, papers, and documents that relate to the business of the corporation, may summon and qualify witnesses under oath, and may examine its officers, agents, and employees or other relative persons regarding the affairs, transactions, and condition of the corporation. The corporation whose affairs are examined shall pay to the department for deposit into the State Treasury the traveling expenses and any other expenses of the examiner or other person making the examination which shall be credited as provided by Section 22-21-383.

(b) If the department has reason to believe that any person has violated or is violating any provision of this article, or upon written complaint signed by any interested person indicating that any such violation exists, the department shall conduct such examination or investigation as it deems necessary of the accounts, records, documents, and transactions pertaining to or affecting the affairs of the dental service plan corporation or of any person who solicits, negotiates, effectuates, procures, receives, delivers, or forwards any contract of such a corporation or who collects or forwards any consideration paid by a person contracting for dental services or benefits from such a corporation.

Any person or corporation, not licensed under the provisions of this article, shall not use in the name, logo, contracts, or literature thereof the phrase 'dental service plan,' and any corporation, not licensed under the provisions of this article, shall not imply, either directly or indirectly, that it is a dental service plan corporation or hold itself out to be such a corporation.

Any dissolution or liquidation of a corporation subject to the provisions of this article shall be under the supervision of the department.

No nonprofit corporation, organized under the laws of this state prior to May 4, 1982 to operate a dental service plan in the state or any of the counties thereof, the charter or certificate of incorporation of which has been approved or consented to by the insurance commissioner prior to May 4, 1982, shall be required to incorporate or reincorporate as provided herein. However, every such corporation desiring to operate such a plan shall file with the insurance commissioner its acceptance of this article within six months from May 4, 1982, and every such corporation so accepting this article shall continue, shall have all the powers, authority, and exemptions of this article, and shall be subject to all the provisions hereof except as otherwise provided herein. At the time of filing its acceptance, each such corporation must demonstrate to the satisfaction of the department that it is in compliance with the substantive provisions of this article and that it has the present ability to meet all current or contractual obligations to subscribers or to participating dentists. All preexisting corporations shall have one year from May 4, 1982 to demonstrate compliance with Section 22-21-364(3), requiring minimum working capital. In addition, each such corporation shall file an audited financial statement. Any such corporation may amend its charter to become a profit-making corporation with the prior approval of the commissioner and subject to the provisions of law.

(a) Any person or corporation engaging in the business of operating a dental service plan without first having procured a license from the Department of Insurance, as required by this article, and any person or corporation violating any of the provisions of this article is guilty of a misdemeanor of the first degree and upon conviction thereof shall be punished as provided by law.

(b) Any person making any willfully false statement in any written document required by this article to be filed with the department, or with any examiner at any investigation or hearing conducted by the department or examiner, is guilty of perjury and shall be punished as provided by law.

(c) In addition to any other penalties provided for in this article, the department is authorized to apply to the appropriate circuit court by sworn affidavit that it has reason to believe that a violation of any of the provisions of this article, or of any rules promulgated pursuant to this article, has occurred, and such court shall have jurisdiction, upon hearing and for good cause shown, to grant a temporary or permanent injunction restraining any person or corporation from violating said provisions or rules, whether or not there exists an adequate remedy at law, and such injunction shall issue without bond.

The commissioner shall devise and promulgate reasonable rules and regulations, not inconsistent with the provisions of the article, as he deems advisable for effectuating its orderly administration.

(a) The books and records of publicly owned hospitals, nursing homes, rest homes or any other publicly owned medical institution may, upon request of the governing board of the particular institution, be audited annually by any certified public accountant who is subject to the control of the Alabama State board of Public Accountancy. The selection of the certified public accountant to perform the audit shall be the responsibility of the governing board of the particular institution. Such audit, upon approval as provided in this section, shall be in lieu of any audits otherwise required by law of said institutions. The audit to be performed by the certified public accountant shall be in accordance with generally accepted auditing standards and shall comply with the procedures promulgated by the chief examiner of public accounts, and the audit report shall be addressed to the chief examiner of public accounts, who shall be charged with the responsibility of processing and distributing it as provided by law, and upon approval and acceptance, such audit report shall have the legal effect as a report of an examiner of public accounts.

(b) Examinations and audits performed upon provisions of this section shall be made at the expense of the institution and not as an expense of the State of Alabama. Such audit reports shall be public records open to public inspection, and a copy of each report shall be kept on file at the institution concerning which the audit was made.

(c) The provisions of this section shall be cumulative and supplemental and shall be construed in pari materia with other laws relative to the audit of the books and records of publicly owned hospitals, nursing homes, rest homes and any other publicly owned medical institutions.

No licensee of the State Board of Health or Department of Public Health, applicant for licensure from the State Board of Health or Department of Public Health, or any person or entity seeking certification for reimbursement under the Social Security Act or other law of the United States for which the State Board of Health or Department of Public Health provides surveys or inspections shall commence or in any fashion engage in any new construction, additions to, or alterations of any hospital or other health care facility in the State of Alabama as defined by Section 22-21-20 and rules of the State Board of Health without first submitting to the State Board of Health plans, drawings, and specifications for the new construction, addition, or alteration, and receiving review comments from the State Board of Health. Construction shall not begin until the licensee, applicant, or submitter satisfies the State Board of Health that all comments to submittals have been integrated into revised plans, drawings, and specifications and the design is finally approved by the State Board of Health. The reviews and subsequent inspections shall be for the purpose of approval of the design and construction of the project and for verification of compliance with standard codes and rules of the State Board of Health.

When the State Board of Health receives submittals of plans, drawings, and specifications for the construction, addition to, or alteration of health care facilities for the purposes of review and approval, the State Board of Health shall make reviews of submitted plans, drawings, and specifications and inspections or investigations of the construction as it deems necessary. In addition, the State Board of Health shall make a final inspection of the submitted project at the appropriate time. The State Board of Health shall prescribe by rule the procedure for a licensee, applicant, or submitter to pay fees required by this article and to submit plans, drawings, and specifications to the State Board of Health for preliminary review or inspection and approval or recommendation with respect to compliance with rules of the State Board of Health. In exchange for fees included in the fee schedule provided herein, the State Board of Health shall provide reviews of up to four plan submissions and one final inspection visit of the finished construction, for each project. If additional reviews or final inspections are required, an additional fee, equal to 15 percent of the total fee, shall be paid to the department for each additional submittal or inspection.

The State Board of Health shall send written review comments to the project architect within 60 calendar days for projects costing less than fifteen million dollars ($15,000,000), or within 120 calendar days on projects costing over fifteen million dollars ($15,000,000), of the State Board of Health's receipt of each submittal. If the review is not timely made, the fee as established by Section 22-21-44 and due at drawing approval shall be waived. The State Board of Health shall perform the final inspection within 30 calendar days of the receipt of a written request for inspection from the project architect or by the date requested by the project architect, whichever shall be later. If the final inspection is not timely made, the remainder of the fee shall be waived.

The State Board of Health may charge fees in accordance with the following schedule based on the cost of building construction:

An initial fee payment of five hundred dollars ($500) shall accompany the first drawing submittal for each project. Upon written approval of the final stage drawings, 75 percent of the estimated fee, less the initial five hundred dollar ($500) payment, shall be paid. The estimated fee shall be based on the architect's estimated cost of construction. At the final building inspection, the remainder of the fee shall be paid to the State Board of Health. This payment shall be the final fee less fees previously paid or waived. The final fee shall be based on the actual cost of construction. A copy of the contractor's latest pay request shall be furnished to the department as the evidence for actual cost. Except as specifically provided herein, no fees paid shall be refundable. The Alabama Department of Mental Health and Mental Retardation shall be exempt from all fees described herein.

The State Board of Health shall establish rules and regulations to carry out the purpose of this article. These rules and regulations shall be reviewed and approved by the advisory board established by Section 22-21-27. The advisory board shall also be provided reports at its meetings on the fees collected and review process for those projects completed prior to the board's meeting.

There is established a separate special revenue trust fund in the State Treasury to be known as the Department of Public Health Plan Review Fund. All receipts received by the State Board of Health or the Department of Public Health for whatever purpose pursuant to this article shall be deposited in this fund. The receipts shall be disbursed only by warrant of the state Comptroller upon the State Treasury, upon itemized vouchers approved by the State Health Officer or his or her designee; provided that no funds shall be withdrawn or expended except as budgeted and allotted according to the provisions of Sections 41-4-80 to 41-4-96, inclusive, and only in amounts as stipulated in the general appropriations act or other appropriation acts.

(a) Any public body heretofore or hereafter created and established by ordinance or resolution pursuant to this chapter may become a body corporate and politic under the name set forth in such ordinance or resolution by filing a certified copy of such ordinance or resolution with the Secretary of State, to be recorded in his office. The members of such public body shall constitute the members of the corporation until they are succeeded by other members as provided by said ordinance or resolution. Neither the members of the corporation nor its directors or officers shall be personally liable for the debts, torts or undertakings of the corporation.

(b) The corporations provided for by this section shall have all the power and authority of health care authorities as provided for by Article 11 of this chapter; except, that such corporations shall not have or exercise any power which is inconsistent with or repugnant to the provisions of the ordinance or resolution under which it came into existence.

(c) This section shall be deemed to be cumulative.

(a) Any one or more local governing bodies located in the same or contiguous counties, within a zone determined by the State Board of Health as a zone for public hospitals, may act to establish a hospital association, a body corporate and politic. Before taking action to establish a hospital association, each local governing body involved shall give notice of the time, place and purpose of a public hearing at which all residents and taxpayers of the local political subdivision shall be given an opportunity to be heard. Such notice by the local governing body shall be given by publishing or posting a notice at least 10 days preceding the day on which the hearing is to be held. In determining whether a hospital association shall be established, the need for additional hospital beds in the areas affected shall be determined. After such a hearing, the local governing body shall determine whether to establish a hospital association, and if it is decided to establish a hospital association, an appropriate resolution or ordinance shall be passed, which resolution or ordinance shall take effect immediately and shall not be laid over or published or posted. After the adoption of such resolution or ordinance, the local governing body shall thereupon appoint one member for each precinct or ward falling within the jurisdiction of the local governing body to act as a director for the hospital association.

(b) Said hospital association shall be a public body and a body corporate and politic upon the completion of the taking of the following proceedings:

(1) The directors of the hospital association shall present to the Secretary of State an application signed by them, which shall set forth:

a. That notice has been given and a public hearing has been held and that they have been appointed by a local governing body as members of a board of directors of a hospital association;

b. The name and official residence of each of the directors, together with a certified copy of the appointment evidencing their right to office;

c. The date and place and induction into and taking oath of office and that they desire the hospital association to become a public body and body corporate and politic;

d. The term of office of each of the directors and the place where the official appointment of each of said directors is kept a record; and

e. The name which is proposed for the corporation;

(2) The application shall be subscribed and sworn to by each of the directors before an officer authorized by the laws of the State of Alabama to take and certify oaths, who shall certify upon the application that he personally knows the directors and knows them to be the officers as asserted in the application and that each subscribed and swore thereto in the officer's presence; and

(3) The Secretary of State shall examine the application, and if he finds that the name proposed for the corporation is not identical with that of a person or of any other corporation of the state or so nearly similar as to lead to confusion and uncertainty, he shall receive and file it and shall record it in an appropriate book of records in his office.

When the application has been made, filed and recorded as provided in this subsection, the association shall constitute a public body and a body corporate and politic under the name proposed in the application. The Secretary of State shall make and issue to the said directors a certificate of incorporation pursuant to this division under the seal of the state and shall record the same with the application.

(a) A hospital association shall consist of the directors appointed by the local governing bodies, and the directors shall elect from among their number the first chairman. The term of office of each director shall be five years. A director shall hold office until his successor has been appointed and qualified. Vacancies shall be filled for any unexpired term by the local governing body having the original appointment. A majority of the members shall constitute a quorum. The respective local governing bodies shall appoint or reappoint any director whose term expires or whenever a position becomes vacant for any other reason and shall record a certificate of such appointment or reappointment. A director shall receive no compensation for his services. If at any time a local governing unit shall cease to give financial support to the hospital association as required by the rules and regulations, such governing body shall lose all seats on the board of directors.

(b) The following alternative method of appointing the directors may be used, if the directors of any existing hospital associations so decide or if the governing body originally sponsoring a hospital association is a county governing body and so decides: There shall be the same number of directors as there are members of the county commission, and they shall be appointed from the same voting districts from which the respective members of the county commission are elected.

The directors shall meet annually and shall adopt a constitution and bylaws of the corporation, said constitution and bylaws to be subject to the approval of the State Board of Health. The active affairs of the corporation shall be vested in an executive committee composed of not less than five nor more than nine directors, to be selected by the directors. The executive committee shall meet monthly, organize itself and shall carry on the affairs of the corporation in compliance with the laws of the State of Alabama and with the constitution and bylaws of the corporation. The executive committee shall appoint a medical advisory committee of three to five members from the medical staffs of the respective hospitals. This medical advisory committee will be responsible to the executive committee for the professional aspects of the hospital's operations subject to the rules and regulations adopted by the State Board of Health. In the discretion of the directors, there may be appointed, for each hospital or other separate unit, a hospital executive committee consisting of not less than three nor more than five members who shall be residents of the political subdivision or subdivisions from which directors are selected. Such members shall possess such qualifications as may be prescribed by the directors, but need not reside in any particular precinct or ward. The members of such hospital executive committee shall each serve at the pleasure of the directors and shall, when appointed, organize and possess all of the power and authority and shall have all the duties of the executive committee of the hospital association in respect to all affairs of the hospital for which they are appointed. Said hospital executive committee shall act subject to the general supervision and control of the hospital association and its directors.

(a) Any district or regional hospital association is hereby authorized and empowered to exercise the following powers in addition to others granted in this article:

(1) To cooperate with the State Board of Health for the purpose of constructing, equipping, maintaining and operating a hospital by making appropriate application to the state board of health; to enter into a cooperative contract with the state board of health for this purpose;

(2) To act as an agent for the State Board of Health under a cooperative contract to prepare, carry out and operate hospital projects;

(3) To provide for the construction, reconstruction, improvement, alteration or repair of any hospital, or any part thereof;

(4) To take over, by purchase, lease or otherwise, any hospital;

(5) To manage, as agent of the State Board of Health, any hospital constructed or owned by the association;

(6) To arrange, with any appropriate local or state agencies, for the opening or closing of streets, roadways, alleys or other transportation facilities;

(7) To lease or rent any land, building, structure or facility needed in the operation of the hospital;

(8) To enter upon buildings or property in order to conduct investigations or to make surveys or soundings;

(9) To purchase, obtain options upon or acquire by eminent domain, gift, grant, bequest, devise or otherwise any property, real or personal, or interest therein, from any person, firm, corporation, city, county or government;

(10) To sell, exchange, transfer, assign or pledge any property, real or personal, or any interest therein, to any person, firm, corporation, city, county or government;

(11) To own, hold, clear and improve property;

(12) To insure or provide for insurance of the property or operation of the association against such risks as the association may deem advisable;

(13) To borrow money upon its bonds, notes, warrants, debentures or other evidences of indebtedness and to secure the same by pledges of its revenues;

(14) To have perpetual succession;

(15) To make and execute contracts and other instruments necessary or convenient to the exercise of the powers of the association;

(16) To make and, from time to time, amend and repeal bylaws, rules and regulations, not inconsistent with this article, to carry into effect the powers and purposes of the association; and

(17) To do all things necessary to carry out the powers given in this article.

(b) The directors of any district or regional hospital association, together with the county commissions of the counties comprising such association, are hereby authorized and empowered to lease hospitals, clinics or hospital facilities to such persons, firms, partnerships, associations or corporations and on such terms as they deem to be necessary, and appropriate and consistent with the maintenance of public health services and facilities.

In all cases where the county commission of a county has, or the governing bodies of a county and of a city have, adopted a resolution or resolutions authorizing the incorporation, under this article as originally enacted or as subsequently amended, of a public hospital association for public hospital purposes and there has been an attempt to organize such public hospital association by the directors appointed by the county commission of the county or the governing bodies of the county and city, presenting to the Secretary of State an application signed by them, which shall set forth that notice has been given and a public hearing has been held and that they have been appointed by the local governing body or bodies as members of the board of directors of the hospital association, and that they desire the hospital association to become a public body and body corporate, and the name which is proposed for the corporation and the Secretary of State has received, filed and recorded the application in an appropriate book of records in said Secretary of State's Office, then such public hospital association shall be, and is hereby, validated ab initio notwithstanding any failure on the part of the county commission of the county or the governing bodies of the county and city to comply with all the requirements of said article; provided, that this section shall not apply to the incorporation of any public hospital association that has been held invalid by a court of competent jurisdiction by judgment entered prior to August 7, 1969, or to the incorporation of any public hospital association, the validity of which is an issue in any pending civil action commenced prior to August 7, 1969.

Any hospital association organized under the provisions of this article may be dissolved, in the manner prescribed in this section if, at the time of such dissolution, it owns no property and has no indebtedness outstanding and if it is not, at the time, designated as the agency of a county to acquire, construct, equip, operate and maintain public hospital facilities. Such dissolution shall be effected by the filing in the office of the secretary of state of a certificate of dissolution, signed by all the then living directors of such hospital association.

The governing bodies of each local political subdivision involved are hereby authorized to appropriate their respective shares of the cost of constructing, maintaining, equipping and operating such hospitals as determined upon by agreement between the executive committee of the association and the State Board of Health. The sums so appropriated shall be paid into the treasury of the corporation and shall be paid out on certificate of the executive committee of the corporation.

Nothing in this article shall be construed to mean that all local, regional or district hospitals included in this article are to be under the direction or control of any body other than the local executive committee of each hospital, subject to the rules and regulations contained in this article or to mean that any local executive committee cannot receive and administer gifts, donations or endowments for their respective local hospitals, subject to the rules and regulations contained therein.

(a) Bonds, notes and other securities issued by any public hospital corporation are hereby exempted from all laws of the state governing usury or prescribing or limiting interest rates, including, without limitation, the provisions of Chapter 8 of Title 8 of this Code.

(b) For the purposes of this section, the following terms shall have the meanings respectively ascribed to them by this subsection:

(1) STATE. The State of Alabama.

(2) PUBLIC HOSPITAL CORPORATION. Any public corporation organized pursuant to the provisions of any of the following statutes, as heretofore or hereafter amended:

a. Section 22-21-5,

b. Article 3 of this chapter, or

c. Division 1 of Article 4 of this chapter.

(a) For the purposes of this section, the term 'hospital' shall mean any hospital in which human patients are given medical care. It shall include all emergency rooms or outpatient facilities connected thereto.

(b) Within 10 days following discharge or release from confinement in a hospital or nursing home, or within 10 days after the earliest date at which the expense from the confinement or service may be determined, which in the case of long-term confinement may be the monthly charge, the hospital or nursing home providing the service shall submit to the patient, or to his survivor or legal guardian as may be appropriate, upon written request, an itemized statement detailing in language comprehensible to an ordinary layman the specific nature of charges or expenses incurred by the patient, which in the initial billing shall contain a statement of specific services received and expenses incurred for each such item of service, enumerating in detail the constituent components of the services received within each department of the hospital or nursing home and including unit-price data on rates charged by the hospital or nursing home. This statement shall not include charges of hospital based or nursing home based physicians if billed separately.

(c) In any billing for hospital or nursing home services subsequent to the initial billing for such services, whether it is a restatement of the initial bill or a bill of additional charges, the patient or his survivor or legal guardian may elect, upon written request, to receive a copy of the detailed statement of specific services received and expenses incurred for each such item of service as provided in subsection (b) of this section. The hospital or nursing home shall have 10 days from the receipt of the request to provide said statement.

(d) All provisions of subsection (b) of this section shall be followed if a written request is made within 30 days of discharge from the facility. If such request is made after 30 days of discharge then the 10 day period will not be in effect. Instead the hospital or nursing home providing the service shall have 30 days to meet the request. All requests shall be made within one year of discharge.

(e) The Attorney General shall maintain an action in the name of the state for an injunction to restrain any person, firm, association or corporation from operating, conducting or managing a hospital in violation of the provisions of this section if and when violations are brought to his attention by an individual after a due process of law procedure has been followed.

(f) The provisions of this section shall not apply in cases where regulations by the federal or the state government so stipulate.

(g) Hospitals can print information on the statement as to the procedure that must be followed by insurance companies relating to the payment of claims made by persons in possession of the statement referred to in subsection (b) of this section. An addendum which prohibits insurance companies from paying to the patient any amounts due the hospital by the patient is acceptable. Any insurance company making a payment to the patient without positive validation from appropriate hospital officials shall be held liable for such payment to the hospital and shall be guilty of a misdemeanor.

For the purposes of this division, the following terms shall have the meanings respectively ascribed to them by this section:

(1) THE CORPORATION. A corporation organized pursuant to the provisions of this division.

(2) SECURITIES. Notes, bonds, certificates of indebtedness, warrants or other evidences of indebtedness.

(3) HOSPITAL. Such term includes the plural as well as the singular and means:

a. Public hospitals of all types, public clinics, public health centers and related public health facilities, such as laboratories, outpatient departments, nurses' homes and nurses' training facilities and central service facilities operated in connection with public hospitals;

b. Appurtenant buildings and other facilities to provide offices for persons engaged in the diagnosis, treatment or cure of diseased, sick and injured persons and to house or service equipment used for the diagnosis, treatment or cure of diseased, sick or injured persons or the records of such diagnosis, treatment or cure or research with respect to any of the foregoing;

c. Parking areas, parking decks, facilities, buildings and structures appurtenant to any of the foregoing.

It is the intention of the Legislature by the passage of this division to authorize in each of the several counties of the state the organization of one or more public corporations for the purpose of acquiring, owning and operating public hospitals and other public health facilities in the county in which such corporation shall be organized, or in a portion of the said county. It is the legislative intent to confer on corporations organized under this division all the powers requisite for the fulfillment of the purposes of their organization, including the power to do whatever financing may be necessary to accomplish such purposes. This division shall be liberally construed to give effect to its purpose. Corporations organized under this division shall be nonprofit corporations, and no part of the net earnings thereof shall inure to the benefit of any member thereof or other individual or private corporation.

Whenever any number of natural persons, not less than three, shall file with the county commission of any county in this state an application in writing for authority to incorporate a public corporation for hospital purposes in the manner provided in this section, and if it shall be made to appear to the county commission of such county that each of said persons is a duly qualified elector of, and owner of property in, said county and if the county commission of the county shall adopt a resolution, which shall be duly entered upon the minutes of such county commission, wherein it shall be declared that it will be wise, expedient and necessary that such a corporation be formed and that the persons filing said application shall be authorized to proceed to form the corporation, then said persons shall proceed to become the incorporators of the corporation in the manner provided in this section. If it is proposed that the corporation shall exercise its corporate functions in a portion only of the county and not in the county as a whole, the application provided for in this section shall so state and shall set forth a brief description of the area in which it is proposed that such corporate functions be exercised. If the application shall contain a statement that it is proposed that the corporation will exercise its functions in a portion only of the county, then it must be made to appear to the county commission of the county that each of the persons signing the application is a resident of, and the owner of property in, the said portion of the county; and if the application does not contain such a statement, then it will be presumed that it is proposed that the corporation will be authorized to exercise its functions in the county as a whole. No corporation shall be formed under this division unless the application provided for in this section shall be made and unless the resolution provided for in this section shall be adopted.

(a) The certificate of incorporation shall state:

(1) The name of the corporation, which shall be '_____ County Hospital Board,' if such name is available for use by the corporation and, if not available, then the incorporators shall designate some other similar name that is available; provided, that if the corporate functions of the corporation are to be exercised in a portion only of the county, the corporate name of the corporation shall be a name that is appropriate for the area in which such functions are to be exercised;

(2) The location of its principal office and the post office address thereof;

(3) The number of directors, which number shall be a multiple of three and shall be not less than nine, except that, in counties having a population of less than 50,000 inhabitants according to the 1950 or any subsequent federal decennial census, the number of directors shall be nine, and the terms for which they shall hold office;

(4) In the event that the corporation is to exercise its corporate functions in a portion only of the county and not in the county as a whole, a brief description of the area of the county in which such functions are to be exercised; and

(5) The period, if any, for the duration of the corporation; if the duration of the corporation is to be perpetual, that fact shall be stated.

(b) The certificate of incorporation may also contain:

(1) Provisions requiring that one or more of the directors shall be elected or appointed from persons residing in certain specified political or other similar subdivisions of the county or from certain specified occupational, professional or other similar groups or from among persons nominated by the governing bodies of certain specified political subdivisions in the county, by certain specified public officials or by certain occupational, professional or similar groups; provided, that if the certificate of incorporation does contain provisions requiring that one or more directors be elected or appointed from among persons nominated by governing bodies, public officials or groups other than the county commission of the county, it shall also require that there shall be at least three nominees for each place on the board of directors to be so filled; provided further, that no such certificate of incorporation may contain any provisions permitting a director to be an officer of the county or an incorporated municipality unless such is permitted by Section 22-21-76 or any provisions permitting a person who is not a resident of the county to be a director; and

(2) Any other provisions not contrary to law which the incorporators may choose to insert for the regulation and conduct of the affairs of the corporation.

(c) The form and contents of the certificate of incorporation must be submitted to the county commission of the county for its approval, which shall be evidenced by resolution duly entered on the minutes of said county commission.

(d) The certificate of incorporation of any corporation containing provisions of the type authorized in subdivision (1) of subsection (b) of this section is hereby validated and confirmed, and such provisions shall be fully effective as if, at the time of the approval and filing of such certificate of incorporation, the aforesaid subdivision (1) of subsection (b) of this section was included in this section.

(a) The certificate of incorporation shall have attached thereto a certified copy of the resolution provided for in Section 22-21-73 and a certificate by the Secretary of State of the State of Alabama that the name proposed for the corporation is not identical with that of any other corporation in this state. The certificate of incorporation shall be signed and acknowledged by the incorporators before an officer authorized by the laws of this state to take acknowledgment of deeds and, with the documents attached, may be filed with the judge of probate of the county, who shall forthwith receive and record the same. When the certificate of incorporation and the documents attached have been filed as provided in this section, the corporation referred to therein and composed of the incorporators named therein shall come into existence and shall constitute a body corporate and politic under the name set forth in the certificate of incorporation. The incorporators shall constitute the members of the corporation until they are succeeded by other members as provided in this section.

(b) The certificate of incorporation of any corporation, heretofore or hereafter, organized under this division may, at any time, be amended so as to change the number of the members of its board of directors or to make any other change in the said certificate of incorporation that is not inconsistent with the provisions of this division. Any such amendment shall be effected in the following manner:

(1) The county commission of the county which authorized the incorporation of the corporation shall adopt a resolution setting forth the proposed amendment; and

(2) A certified copy of the said resolution shall then be filed in the office of the judge of probate of said county.

The proposed amendment shall become effective upon the filing in said office of such certified copy.

(c) If any such amendment shall have the effect of reducing the number of the members of the board of directors of the corporation, those directors who have been theretofore appointed for terms of office then having longer than four years to run shall remain in office as members of said board of directors; provided, however, that if the said directors whose existing terms of office will then run for longer than four years are greater in number than the full membership of the board of directors, as it will be constituted following the effective date of such amendment, the county commission shall determine, by lot, which of the said directors whose existing terms will run for longer than four years shall continue in office. If the said members whose then existing terms of office will run for longer than four years are insufficient in number to make up the full membership of the board of directors, as it will be constituted following the effective date of said amendment, then those directors who were theretofore appointed for terms then having more than two but less than four years to run shall remain in office as members of said board of directors, to the extent needed to make up the full membership of the board of directors, and if all of said members then having terms that will run for more than two, but less than four, years are not needed to make up the aforesaid full membership, then the county commission shall determine by lot which of those directors who were theretofore appointed for terms then having more than two but less than four years to run shall continue in office as members of said board of directors. If the said directors whose then existing terms of office will run for longer than four years and those directors whose then existing terms will run for longer than two, but less than four, years are together insufficient in number to make up the full membership of the board of directors, as it will be constituted following the effective date of the amendment, then the county commission shall determine, by lot, which of those directors who were theretofore appointed for terms then having less than two years to run shall continue in office as members of said board of directors. Upon the expiration of the aforesaid existing terms of office of those directors who will remain in office, pursuant to the foregoing provisions of this section, the county commission of the county shall elect or reelect directors for terms of office that shall be staggered, to the end that the terms of not less than one third of the entire membership of the board of directors, as constituted after the effective date of the said amendment, shall expire at intervals of two years. Those directors who will not, pursuant to the foregoing provisions of this section, continue in office as members of said board of directors, as constituted following the effective date of said amendment, shall thereupon cease to be members of said board of directors.

In all cases where the county commission of a county has adopted a resolution authorizing the incorporation under this division, as originally enacted or as subsequently amended, of a public corporation for hospital purposes and there has been an attempt to organize such public corporation by filing in the office of the judge of probate of such county a certificate of incorporation, but the attempted incorporation is invalid because of some irregularity in the procedure followed, any such corporation so authorized and attempted to be formed shall be, and hereby is, validated ab initio notwithstanding any failure to comply with the requirements of said division respecting acknowledgment of signatures to certificates of incorporation, any failure on the part of the county commission of any such county to take formal action approving the form and contents of such certificate of incorporation or any other failure to comply with the procedures set forth in the said division; provided, that this section shall not apply to the incorporation of any public corporation that has been held invalid by a court of competent jurisdiction by judgment entered prior to September 20, 1957, or to the incorporation of any public corporation the validity of which is an issue in any pending civil action commenced prior to September 20, 1957.

The corporation shall have a board of directors, which shall constitute the governing body of the corporation. The members of the board of directors shall be residents of the county and shall be elected by the county commission of the county for staggered terms of office as follows:

(1) The first term of one third of the directors shall be for two years;

(2) Of another one third for four years;

(3) The remaining one third for six years; and

(4) Thereafter the term of office of each director shall be six years; provided, that if any resolution adopted, pursuant to the provisions of Section 22-21-72, by the county commission of a county having a population of more than 300,000 and less than 500,000, according to the last or any subsequent federal census, shall contain requirements respecting the election of the directors of the corporation authorized in the said resolution, then the directors shall be elected in the manner and for the terms and by the governing bodies that may be specified in the said resolution.

If any director dies, or resigns, or becomes incapable of acting as a director or ceases to reside in the county, the county commission that elected him may elect a successor to serve for the unexpired period of his term. Directors may succeed themselves in office, if again elected by the applicable county commission. The members of the board of directors shall serve without compensation, except that they may be reimbursed for actual expenses incurred in the performance of their duties as directors. No member of the board of directors shall be an officer of the county or of any incorporated municipality in the county; provided, that if any resolution, adopted pursuant to the provisions of the said Section 22-21-72, by the county commission of a county having a population of more than 300,000 and less than 500,000, according to the last or any subsequent federal census, shall so provide, then any director of the corporation authorized in the said resolution may be a member of the governing body, whether of the county or of a municipality therein, that elects him as director until such time as a special annual ad valorem county tax for public hospital purposes shall be voted in any such county.

The corporation shall have the following powers, together with all powers incidental thereto or necessary to the discharge thereof in corporate form:

(1) To have succession by its corporate name for the duration of time, which may be in perpetuity, specified in its certificate of incorporation or until dissolved as provided in section 22-21-82;

(2) To maintain actions and have actions maintained against it and to defend action maintained against it;

(3) To make use of a corporate seal and to alter the same at pleasure;

(4) To receive, acquire, take and hold, whether by purchase, gift, lease, devise or otherwise, real and personal estate of every description and to manage and dispose of same by any form of legal conveyance or transfer;

(5) To acquire, construct, equip, enlarge, improve, maintain and operate a hospital and to do all things necessary to that end;

(6) With the approval of the board of directors, to design, construct, purchase or otherwise acquire hospitals, clinics and other hospital facilities, and to lease or otherwise make available such facilities to such persons, firms, partnerships, associations or corporations and on such terms as they deem to be necessary and appropriate and consistent with the maintenance of public health services and facilities;

(7) To conduct nurses' training schools;

(8) To borrow money and to issue interest-bearing securities in evidence of the borrowing;

(9) To mortgage, pledge or otherwise convey its property and its revenues from any source;

(10) To appoint and employ such officers and agents, including attorneys, as the business of the corporation may require;

(11) To establish and collect and alter charges for services rendered and supplies furnished by it;

(12) To make rules and regulations for the treatment of charity patients and for the conduct of any hospital owned or operated by it and to alter such rules and regulations;

(13) To provide for such insurance as the corporation may deem advisable;

(14) To cooperate with the State Board of Health, to make such contracts with it as the board of directors of the corporation may deem advisable respecting the operation of any hospital and to take such action not in violation of law as may be necessary in order to qualify the corporation to receive funds appropriated by the United States or the State of Alabama; and

(15) To invest in direct general obligations of the United States and any trust fund established under and subject to the general laws of this state for investment or self-insurance purposes with investment authority as may be authorized by law for such trusts any funds of the corporation which its board of directors may determine are not presently needed for its corporate purposes.

(a) All securities of the corporation shall be signed by the chairman of its board of directors and attested by its secretary, and the seal of the corporation shall be affixed thereto. Any interest coupons applicable to the securities of the corporation shall be signed by the chairman of the board of directors, but a facsimile of such chairman's signature may be impressed on any such interest coupon in lieu of his manually signing the same. Any securities of the corporation may be executed and delivered by it at any time and from time to time, shall be in such form and denomination and of such tenor and maturities, shall contain such provisions not inconsistent with this section and shall bear such rate or rates of interest payable and evidenced in such manner as may be provided by resolution of the board of directors.

(b) Any borrowing may be effected by sale of such securities at either public or private sale in such manner and at such price or prices and at such time or times as may be determined by the board of directors to be most advantageous. Any securities issued by such corporation may thereafter at any time, whether before, at or after the maturity thereof, and, from time to time, be refunded by the issuance by sale or exchange of refunding securities. The corporation may pay all expenses, premiums and commissions which its board of directors may deem necessary and advantageous in connection with any financing done by it. Securities issued by the corporation shall not be general obligations of the corporation, but shall be payable solely from the sources specified in the proceedings wherein the securities are authorized to be issued.

(c) As security for the payment of the principal of, and interest on, any securities issued by it, the corporation may mortgage, pledge or otherwise convey its property and its revenues from any source, including, but without limitation:

(1) Taxes which may be levied for the benefit of the corporation or the proceeds of which may have been appropriated to the corporation by the State Legislature or by the county commission of a county or a municipality and

(2) Revenues from the operation of any hospital owned or operated by it.

(d) Any mortgage, deed of trust or pledge made by the corporation may contain such agreements as the board of directors may deem advisable respecting the operation and maintenance of the property and the use of the revenues subject to such mortgage, deed of trust or pledge and respecting the rights or duties of the parties to such instrument or the parties for the benefit of whom such instrument is made; provided, that no such mortgage or deed of trust shall be subject to foreclosure.

(e) All debts created and securities issued by the corporation shall be solely and exclusively an obligation of the corporation and shall not create an obligation or debt of the State of Alabama or of any county or municipality. The faith and credit of the State of Alabama, or of any county or municipality therein, shall never be pledged for the payment of any debt incurred or securities issued by the corporation. All bonds and notes issued by the corporation shall be construed to be negotiable instruments although payable solely from a specified source. All securities issued by the corporation, the income therefrom, and all mortgages and other instruments executed as security therefor shall be exempt from all taxation in the State of Alabama.

Unless otherwise directed by the court having jurisdiction thereof or by the document which is the source of authority, a fiduciary may, with the exercise of reasonable business prudence, invest trust funds in securities of the corporation for payment of the principal of, and interest on, which the proceeds of any ad valorem, excise, license or privilege tax are pledged.

(a) Accreditation, quality assurance and similar materials as used in this section shall include written reports, records, correspondence, and materials concerning the accreditation or quality assurance or similar function of any hospital, clinic, or medical staff. The confidentiality established by this section shall apply to materials prepared by an employee, advisor, or consultant of a hospital, clinic, or medical staff and to materials prepared by an employee, advisor or consultant of an accrediting, quality assurance or similar agency or similar body and to any individual who is an employee, advisor or consultant of a hospital, clinic, medical staff or accrediting, quality assurance or similar agency or body.

(b) All accreditation, quality assurance credentialling and similar materials shall be held in confidence and shall not be subject to discovery or introduction in evidence in any civil action against a health care professional or institution arising out of matters which are the subject of evaluation and review for accreditation, quality assurance and similar functions, purposes, or activities. No person involved in preparation, evaluation or review of accreditation, quality assurance or similar materials shall be permitted or required to testify in any civil action as to any evidence or other matters produced or presented during the course of preparation, evaluation, or review of such materials or as to any finding, recommendation, evaluation, opinion, or other action of such accreditation, quality assurance or similar function or other person involved therein. Information, documents, or records otherwise available from original sources are not to be construed as being unavailable for discovery or for use in any civil action merely because they were presented or used in preparation of accreditation, quality assurance or similar materials nor should any person involved in preparation, evaluation, or review of such materials be prevented from testifying as to matters within his knowledge, but the witness testifying should not be asked about any opinions or data given by him in preparation, evaluation, or review of accreditation, quality assurance or similar materials.

All real, personal and mixed property that may be owned by the corporation and all income of the corporation shall be exempt from state, county and municipal taxation.

The county in which the corporation is organized, and any municipality located within such county, are hereby authorized to transfer and convey to the corporation, without consideration, any hospital that may be owned by such county or municipality, as the case may be, and any funds owned or controlled by such county or municipality, as the case may be, that may have been raised or allocated for any of the purposes for which the corporation shall have been organized; provided, that such transfer or conveyance shall be authorized by an ordinance or a resolution duly adopted by the governing body of such county or municipality.

At any time when the corporation owns no property and has no indebtedness outstanding, the county commission of the county in which the corporation was organized may adopt a resolution, which shall be duly entered upon the minutes of said county commission, declaring that the corporation shall be dissolved. Upon the filing for record of a certified copy of said resolution in the office of the judge of probate of said county, the corporation shall thereupon stand dissolved. The formation of one or more corporations under the provisions of this division shall not prevent the subsequent formation under this division of another corporation or corporations.

This division shall not be construed as a restriction or limitation upon any power, right or remedy which any corporation, now in existence or hereafter formed, may have in the absence thereof and shall be construed as cumulative and independent of any statute authorizing the formation of corporations or conferring on any corporation any power, right or remedy. Neither the formation, organization or existence in any particular county of a hospital association under the provisions of Act No. 211 enacted at the 1945 Regular Session of the Legislature of Alabama or Article 3 of this chapter shall in any way prevent or preclude the organization in such county of a corporation under the provisions of this division if, at the time of the organization of such a corporation under this division, such hospital association is not the then designated agency of such county to acquire, construct, equip, operate and maintain public hospital facilities.

(a) Each health care provider and facility in Alabama which employs or contracts for the employment of one or more registered nurses shall require each registered nurse to wear a name tag, badge, or pin with the letters 'R.N.' printed on the name tag, badge, or pin while the nurse is providing direct patient care.

(b) Each health care provider and facility in Alabama which employs or contracts for the employment of one or more licensed practical nurses shall require each licensed practical nurse to wear a name tag, badge, or pin with the letters 'L.P.N.' printed on the name tag, badge, or pin while the nurse is providing direct patient care.

(c) A health care provider or facility may suspend the requirements in subsections (a) and (b) above for legitimate health care purposes, such as for employees who work in departments where metal adornments cannot safely be worn.

(d) No health care provider or facility may allow employees not licensed as registered nurses or licensed practical nurses to wear name tags, badges, or pins which have the word 'nurse' or 'nursing' thereon.