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Home > Statutes > Usa Arizona

USA Statutes : arizona
Title : Corporations and Associations
Chapter : HOSPITAL AND COMMUNITY HEALTH CENTER MERGERS AND OTHER TRANSACTIONS

10-11251 Definitions
In this chapter, unless the context otherwise requires:
1. "Assets" means all real, personal, tangible and intangible property and rights
in property, including cash, buildings, equipment, investments and contracts with other
entities.
2. "Community benefit activity" means any activity furthering community benefit
purposes including any health care activity that includes education, prevention,
promotion of community health, indigent care or any other charitable purpose.
3. "Community benefit assets" means every asset that has been used in connection
with community benefit activity during the previous year.
4. "Community benefit organization" means a nonprofit charitable organization that
is tax exempt under section 501(c)(3) of the internal revenue code and whose mission is
solely to engage in community benefit activities.
5. "Community benefit purposes" means those purposes for which an entity may
qualify for exemption pursuant to section 43-1201, paragraph 4 or section 501(c)(3) of
the internal revenue code, or for similar activity engaged in by a for profit
organization.
6. "Community health center" means a primary care facility that provides medical
care in medically underserved areas as designated in section 36-2352 or in medically
underserved areas or medically underserved populations as designated by the United States
department of health and human services.
7. "Nonprofit health care entity" means a licensed hospital or community health
center that holds tax exempt status pursuant to section 43-1201, paragraph 4 or section
501(c)(3) of the internal revenue code.
8. "Notice of completion" means the written notice that is sent by the hearing
officer to the chairman of the corporation commission after the hearing officer holds a
public hearing and files a summary report pursuant to section 10-11253.

10-11252 Scope; included transactions; excluded transactions
A. Except as provided in subsections B and C of this section, this chapter applies
to any nonprofit health care entity that intends to sell, transfer, lease, exchange,
option, convey, convert, give, merge or otherwise dispose of all or substantially all of
its assets to or with another nonprofit health care entity or a for profit entity,
including entering into a joint venture involving all or substantially all of its
assets. The requirements of section 10-11202 do not apply to a nonprofit health care
entity.
B. This chapter does not apply to any physician or licensed health care provider
contract with a hospital or community health center. This chapter shall not affect any
contract entered into between a physician or licensed health care provider or group of
physicians or licensed health care providers and a licensed hospital.
C. This chapter does not apply to transactions:
1. Involving a transfer of community benefit assets of a licensed hospital or
community health center with a book value of less than one million dollars, net of
accumulated depreciation as of the date of the closing date of the intended transaction.
2. Enabling a party to finance the purchase of assets, refinance assets or mortgage
or pledge assets already owned by the party, whether or not in its usual course of
business.
3. Between or among a nonprofit health care entity and affiliated nonprofit
entities that are part of a common line of ownership or control.

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

10-11254 Applicability
A. Nothing in this chapter:
1. Affects the provisions of chapters 24 through 35 and chapters 36 through 40 of
this title regarding the corporation commission's acceptance or denial of new, restated
or amended articles of incorporation.
2. Affects the operation of state or federal antitrust laws or the attorney
general's enforcement of those laws.
3. Is intended to create any private or governmental right or cause of action
relating to the transaction or related parties.
B. This chapter does not apply to any transactions for which a letter of intent or
memorandum of understanding or similar documentation was executed on or before December
31, 1996.

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