As Passed by the House 1
122nd General Assembly 4
Regular Session Am. Sub. H. B. No. 242 5
1997-1998 6
REPRESENTATIVES VAN VYVEN-MAIER-SCHURING-BENDER-BOGGS-BRADING- 8
BUCHY-CORBIN-FORD-FOX-GARCIA-GRENDELL-HAGAN-HAINES-HEALY- 9
JAMES-JERSE-JONES-KREBS-KRUPINSKI-LEWIS-LOGAN-METELSKY- 10
MILLER-MOTTL-MOTTLEY-OGG-OLMAN-OPFER-ROMAN-SAWYER-SCHULER- 11
SYKES-WESTON-WILSON-TAVARES-PATTON-O'BRIEN-WINKLER-ROBERTS- 12
THOMPSON-VERICH-COLONNA-HARRIS-JOHNSON-THOMAS-MEAD-REID 13
15
A B I L L
To amend section 109.99 and to enact sections 109.34 17
and 109.35 of the Revised Code to require that 18
the Attorney General review transfers of assets 19
by certain nonprofit health care entities to 20
for-profit entities and to declare an emergency. 21
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 23
Section 1. That section 109.99 be amended and sections 25
109.34 and 109.35 of the Revised Code be enacted to read as 26
follows: 27
Sec. 109.34. (A) AS USED IN THIS SECTION AND IN SECTION 29
109.35 OF THE REVISED CODE: 30
(1) "FAIR MARKET VALUE" MEANS THE PRICE THAT THE ASSETS 32
BEING TRANSFERRED WOULD BRING IN A COMPETITIVE AND OPEN MARKET 33
UNDER A FAIR SALE WITH THE BUYER AND SELLER ACTING PRUDENTLY, 35
KNOWLEDGEABLY, AND IN THEIR OWN BEST INTEREST AND A REASONABLE 36
TIME BEING ALLOWED FOR EXPOSURE IN THE MARKET.
(2) "NONPROFIT HEALTH CARE ENTITY" MEANS EITHER OF THE 39
FOLLOWING THAT WAS CREATED FOR ANY CHARITABLE OR SOCIAL WELFARE 41
PURPOSE RELATED TO HEALTH CARE:
(a) A HOSPITAL, AS DEFINED IN SECTION 3727.01 OF THE 43
REVISED CODE, THAT IS OWNED OR OPERATED BY A CORPORATION 46
2
ORGANIZED UNDER CHAPTER 1702. OF THE REVISED CODE OR THE 47
NONPROFIT CORPORATION LAW OF ANOTHER STATE; 48
(b) EITHER OF THE FOLLOWING THAT IS OR HAS BEEN EXEMPT 50
FROM TAXATION UNDER SECTION 501(a) OF THE INTERNAL REVENUE CODE: 54
(i) AN ENTITY THAT IS OR HAS BEEN GRANTED A CERTIFICATE OF 57
AUTHORITY UNDER CHAPTER 1742. OF THE REVISED CODE; 60
(ii) A DOMESTIC MUTUAL COMPANY GRANTED A CERTIFICATE OF 63
AUTHORITY UNDER CHAPTER 3941. OF THE REVISED CODE THAT IS IN THE 66
BUSINESS OF PROVIDING SICKNESS AND ACCIDENT INSURANCE AND THAT 67
WAS PREVIOUSLY A HOSPITAL SERVICE ASSOCIATION UNDER FORMER 68
CHAPTER 1739. OF THE REVISED CODE OR CHAPTER 669. OF THE GENERAL 69
CODE OR HAS MERGED OR OTHERWISE CONSOLIDATED WITH A FORMER 71
HOSPITAL SERVICE ASSOCIATION.
(3) "PARTY" INCLUDES A NONPROFIT HEALTH CARE ENTITY THAT 73
IS THE SUBJECT OF A TRANSACTION OR PROPOSED TRANSACTION, AN 75
ACQUIRING PERSON, AND THE RESULTING ENTITY, IF ANY. 76
(4) "TRANSACTION" MEANS A TRANSFER OF OWNERSHIP OR CONTROL 79
OF ASSETS OF A NONPROFIT HEALTH CARE ENTITY, WHETHER BY PURCHASE, 80
MERGER, CONSOLIDATION, LEASE, GIFT, JOINT VENTURE, OR OTHER 81
TRANSFER, INCLUDING ANY BINDING OBLIGATION IN FURTHERANCE OF THE 82
TRANSACTION, THAT IS EQUAL TO AT LEAST TWENTY PER CENT OF THE 83
ASSETS OF THE ENTITY AND OCCURS IN THE TWENTY-FOUR-MONTH PERIOD 84
PRIOR TO THE DATE NOTICE IS SUBMITTED TO THE ATTORNEY GENERAL IN 85
ACCORDANCE WITH DIVISION (B) OF THIS SECTION. "TRANSACTION" ALSO 87
MEANS A TRANSFER OF OWNERSHIP OR CONTROL OF ANY ASSETS OF A 88
NONPROFIT HEALTH CARE ENTITY, WHETHER BY PURCHASE, MERGER, 89
CONSOLIDATION, LEASE, GIFT, JOINT VENTURE, OR OTHER TRANSFER, 90
INCLUDING ANY BINDING OBLIGATION IN FURTHERANCE OF THE 91
TRANSACTION, IF THE ENTITY IS UNABLE TO FULFILL ITS STATED OR 92
ACTUAL PURPOSE WITHOUT THE ASSETS. "TRANSACTION" DOES NOT 93
INCLUDE EITHER OF THE FOLLOWING:
(a) A TRANSFER OF OWNERSHIP OR CONTROL OF ASSETS OF A 96
NONPROFIT HEALTH CARE ENTITY BETWEEN NONPROFIT HEALTH CARE 97
ENTITIES AND PERSONS EXEMPT FROM TAXATION UNDER SECTION 501(a) OF 99
3
THE "INTERNAL REVENUE CODE OF 1986," 100 STAT. 2085, 26 U.S.C. 104
501, AS AMENDED; 105
(b) A NONPROFIT HEALTH CARE ENTITY THAT, PRIOR TO THE 107
EFFECTIVE DATE OF THIS SECTION, ENTERED INTO A CONSENT DECREE 109
WITH THE ATTORNEY GENERAL THAT REQUIRES DISTRIBUTION OF THE 110
CHARITABLE ASSETS OF THE ENTITY TO AN APPROPRIATE HEALTH-RELATED 111
CHARITY. THIS EXEMPTION DOES NOT LIMIT THE AUTHORITY OF THE 113
ATTORNEY GENERAL TO SEEK REMEDIES FOR BREACHES OF FIDUCIARY DUTY 114
OR OTHER VIOLATIONS OF LAW. 115
(B) A NONPROFIT HEALTH CARE ENTITY PROPOSING TO ENTER INTO 117
A TRANSACTION SHALL PROVIDE NOTICE OF THE PROPOSED TRANSACTION TO 119
THE ATTORNEY GENERAL AND OBTAIN WRITTEN APPROVAL OF THE 121
TRANSACTION IN ACCORDANCE WITH THIS SECTION. THE NONPROFIT
HEALTH CARE ENTITY SHALL SUBMIT THE NOTICE ON FORMS PROVIDED BY 123
THE ATTORNEY GENERAL, AND THE NOTICE SHALL INCLUDE ALL OF THE 124
FOLLOWING: 125
(1) THE NAMES AND ADDRESSES OF THE PARTIES, INCLUDING A 127
LIST OF ALL INDIVIDUALS WHO ARE OR HAVE BEEN CHOSEN AS DIRECTORS, 128
OFFICERS, OR BOARD MEMBERS OF THE PARTIES; 129
(2) THE TERMS OF THE PROPOSED TRANSACTION, INCLUDING A 131
SUMMARY OF ALL CONTRACTS OR OTHER AGREEMENTS OF THE PARTIES; 132
(3) THE AMOUNT, SOURCE, AND NATURE OF CONSIDERATION TO BE 134
PAID TO THE NONPROFIT HEALTH CARE ENTITY, ITS DIRECTORS, 135
OFFICERS, BOARD MEMBERS, EXECUTIVES, OR EXPERTS RETAINED BY THE 136
NONPROFIT ENTITY.
(4) A STATEMENT ACKNOWLEDGING THAT THE NONPROFIT HEALTH 138
CARE ENTITY IS UNDER A CONTINUING DUTY TO NOTIFY THE ATTORNEY 139
GENERAL OF ANY CHANGES IN THE INFORMATION CONTAINED IN THE NOTICE 140
OR OTHER DOCUMENTS REQUIRED BY THIS SECTION AND THAT A VIOLATION 142
OF THIS DUTY MAY DELAY APPROVAL OF THE TRANSACTION. THE 143
STATEMENT SHALL BE SIGNED BY A REPRESENTATIVE OF THE NONPROFIT 144
HEALTH CARE ENTITY AT THE TIME THE NOTICE IS SUBMITTED TO THE 146
ATTORNEY GENERAL. 147
(C) IN ADDITION TO THE NOTICE DESCRIBED IN DIVISION (B) OF 150
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THIS SECTION, THE NONPROFIT HEALTH CARE ENTITY SHALL SUBMIT ALL 151
OF THE FOLLOWING:
(1) AUDITED FINANCIAL STATEMENTS FOR THE NONPROFIT HEALTH 153
CARE ENTITY FOR THE THREE FISCAL YEARS PRIOR TO THE DATE OF 154
SUBMISSION;
(2) A VALUATION STATEMENT PREPARED BY AN INDEPENDENTLY 157
QUALIFIED EXPERT, INCLUDING AN INVESTMENT BANKER, ACTUARY, 159
APPRAISER, CERTIFIED PUBLIC ACCOUNTANT, OR OTHER EXPERT, THAT 160
ASSESSES THE FULL AND FAIR MARKET VALUE OF THE NONPROFIT HEALTH 161
CARE ENTITY;
(3) COPIES OF ALL CONTRACTS AND OTHER AGREEMENTS BETWEEN 164
THE PARTIES OR THEIR OFFICERS, DIRECTORS, BOARD MEMBERS, OR OTHER 165
FIDUCIARIES, INCLUDING ANY CONTRACTS OR OTHER FINAL AGREEMENTS 166
RELATING TO THE CLOSE OF THE PROPOSED TRANSACTION; 167
(4) ANY ADDITIONAL INFORMATION THE ATTORNEY GENERAL 169
CONSIDERS NECESSARY TO VALUE THE NONPROFIT HEALTH CARE ENTITY'S 171
ASSETS AS REQUIRED IN RULES ADOPTED BY THE ATTORNEY GENERAL IN 173
ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE.
(D) THE NOTICE AND ALL OTHER DOCUMENTS OR MATERIALS 175
SUBMITTED PURSUANT TO THIS SECTION ARE PUBLIC RECORDS UNDER 176
SECTION 149.43 OF THE REVISED CODE. 178
(E) NOT LATER THAN TWO BUSINESS DAYS AFTER THE DISCOVERY 181
OF ANY CHANGES IN INFORMATION CONTAINED IN THE NOTICE OR OTHER 182
DOCUMENTS REQUIRED BY THIS SECTION, THE NONPROFIT HEALTH CARE 183
ENTITY SHALL PROVIDE COPIES TO THE ATTORNEY GENERAL OF ANY 184
DOCUMENTS AND OTHER MATERIAL RELEVANT TO THE CHANGES. IN 186
ADDITION TO THE NINETY-DAY EXTENSION AUTHORIZED BY DIVISION (A) 187
OF SECTION 109.35 OF THE REVISED CODE, THE ATTORNEY GENERAL FOR
GOOD CAUSE MAY DELAY APPROVAL OF THE TRANSACTION UP TO THIRTY 190
DAYS FOLLOWING RECEIPT OF THE DOCUMENTS AND OTHER MATERIAL 191
RELEVANT TO THE CHANGES.
(F) NOT LATER THAN SEVEN DAYS AFTER SUBMITTING THE NOTICE 193
AND OTHER DOCUMENTS REQUIRED BY THIS SECTION, THE NONPROFIT 194
HEALTH CARE ENTITY SHALL PUBLISH NOTICE OF THE PROPOSED 195
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TRANSACTION IN AT LEAST ONE DAILY NEWSPAPER OF GENERAL 196
CIRCULATION IN THE COUNTY WHERE THE NONPROFIT HEALTH CARE ENTITY 197
HAS ITS PRINCIPAL PLACE OF BUSINESS. THE NOTICE SHALL STATE THE 198
NAMES OF THE PARTIES AND A DESCRIPTION OF THE PROPOSED 199
TRANSACTION.
(G) NOTWITHSTANDING DIVISION (A)(4)(a) OF THIS SECTION, AS 202
USED IN THIS DIVISION, "NONPROFIT COMBINATION" MEANS A 203
TRANSACTION BETWEEN A NONPROFIT HEALTH CARE ENTITY AND ANOTHER
UNRELATED NONPROFIT HEALTH CARE ENTITY. 204
NOT LESS THAN SIXTY DAYS BEFORE THE CLOSING OF A NONPROFIT 206
COMBINATION, A NONPROFIT HEALTH CARE ENTITY THAT IS A PARTY TO 208
THE COMBINATION AND IS THE PARTY TO BE ACQUIRED SHALL PROVIDE
NOTICE TO THE ATTORNEY GENERAL BY SUBMITTING THE INFORMATION 211
DESCRIBED IN DIVISIONS (B)(1) AND (3) OF THIS SECTION. 212
NOT LATER THAN SEVEN DAYS AFTER THE INFORMATION REQUIRED BY 214
THIS SECTION IS SUBMITTED TO THE ATTORNEY GENERAL, EACH OF THE 215
NONPROFIT HEALTH CARE ENTITIES THAT IS A PARTY TO A NONPROFIT 216
COMBINATION SHALL PUBLISH THE NOTICE DESCRIBED IN DIVISION (F) OF 218
THIS SECTION.
Sec. 109.35. (A) NOT LATER THAN SIXTY DAYS AFTER RECEIPT 220
OF A NOTICE AND OTHER DOCUMENTS REQUIRED BY SECTION 109.34 OF THE 221
REVISED CODE, THE ATTORNEY GENERAL SHALL APPROVE OR DISAPPROVE 222
THE PROPOSED TRANSACTION, EXCEPT THAT THE ATTORNEY GENERAL FOR 223
GOOD CAUSE MAY EXTEND THIS PERIOD AN ADDITIONAL NINETY DAYS. 224
(B) IN DETERMINING WHETHER TO APPROVE OR DISAPPROVE A 226
PROPOSED TRANSACTION, THE ATTORNEY GENERAL SHALL CONSIDER: 228
(1) WHETHER THE TRANSACTION WILL RESULT IN A BREACH OF 230
FIDUCIARY DUTY, AS DETERMINED BY THE ATTORNEY GENERAL, INCLUDING 232
CONFLICTS OF INTEREST RELATED TO PAYMENTS OR BENEFITS TO 233
OFFICERS, DIRECTORS, BOARD MEMBERS, EXECUTIVES, AND EXPERTS 234
EMPLOYED OR RETAINED BY THE PARTIES;
(2) WHETHER THE NONPROFIT HEALTH CARE ENTITY WILL RECEIVE 236
FULL AND FAIR MARKET VALUE FOR ITS CHARITABLE OR SOCIAL WELFARE 237
ASSETS;
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(3) WHETHER THE PROCEEDS OF THE TRANSACTION WILL BE USED 239
CONSISTENT WITH THE NONPROFIT HEALTH CARE ENTITY'S ORIGINAL 241
CHARITABLE PURPOSE;
(4) ANY OTHER CRITERIA THE ATTORNEY GENERAL CONSIDERS 243
NECESSARY TO DETERMINE WHETHER THE NONPROFIT HEALTH CARE ENTITY 244
WILL RECEIVE FULL AND FAIR MARKET VALUE FOR ITS CHARITABLE OR 245
SOCIAL WELFARE ASSETS AS REQUIRED IN RULES ADOPTED BY THE 246
ATTORNEY GENERAL IN ACCORDANCE WITH CHAPTER 119. OF THE REVISED 247
CODE.
(C) THE ATTORNEY GENERAL MAY RETAIN, AT THE NONPROFIT 249
HEALTH CARE ENTITY'S EXPENSE, ONE OR MORE INDEPENDENTLY QUALIFIED 251
EXPERTS, INCLUDING AN INVESTMENT BANKER, ACTUARY, APPRAISER, 252
CERTIFIED PUBLIC ACCOUNTANT, OR OTHER EXPERT, AS THE ATTORNEY 253
GENERAL CONSIDERS REASONABLY NECESSARY TO PROVIDE ASSISTANCE IN 254
MAKING A DECISION UNDER THIS SECTION. THE NONPROFIT HEALTH CARE 255
ENTITY SHALL PROMPTLY REIMBURSE THE ATTORNEY GENERAL FOR THE COST 257
OF RETAINING EXPERTS. THE COST OF RETAINING AN EXPERT SHALL NOT 259
EXCEED AN AMOUNT THAT IS REASONABLE AND NECESSARY TO MAKE A 260
DETERMINATION UNDER THIS SECTION. THE CONTRACT TO RETAIN AN 261
EXPERT IS EXEMPT FROM CHAPTER 125. OF THE REVISED CODE. 262
AT ANY TIME WHILE CONSIDERING A PROPOSED TRANSACTION UNDER 264
THIS SECTION, THE ATTORNEY GENERAL MAY REQUEST ANY ADDITIONAL 265
INFORMATION FROM THE NONPROFIT HEALTH CARE ENTITY THAT THE 266
ATTORNEY GENERAL CONSIDERS APPROPRIATE TO THE VALUATION OF THE 267
ENTITY'S CHARITABLE OR SOCIAL WELFARE ASSETS. THE NONPROFIT 268
HEALTH CARE ENTITY SHALL PROVIDE THE INFORMATION NOT LATER THAN 269
TEN DAYS AFTER THE DATE OF THE REQUEST. THE ATTORNEY GENERAL FOR 270
GOOD CAUSE MAY DELAY APPROVAL OF THE TRANSACTION UP TO THIRTY 271
DAYS, IN ADDITION TO THE NINETY-DAY EXTENSION AUTHORIZED BY 272
DIVISION (A) OF THIS SECTION, FOLLOWING RECEIPT OF DOCUMENTS AND 273
OTHER MATERIAL CONTAINING THE INFORMATION REQUESTED. 274
(D) THE ATTORNEY GENERAL SHALL APPROVE OR DISAPPROVE A 276
PROPOSED TRANSACTION ON THE BASIS OF THE CRITERIA SET FORTH IN 277
DIVISION (B) OF THIS SECTION. ONCE A TRANSACTION IS APPROVED, 279
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ANY SUBSTANTIAL ALTERATION IS A NEW TRANSACTION SUBJECT TO 280
APPROVAL BY THE ATTORNEY GENERAL.
THE NONPROFIT HEALTH CARE ENTITY MAY RESUBMIT A NOTICE AND 282
OTHER DOCUMENTS SEEKING APPROVAL OF A TRANSACTION DISAPPROVED BY 284
THE ATTORNEY GENERAL BUT MAY NOT SUBMIT A NOTICE AND OTHER 285
DOCUMENTS THAT ARE IDENTICAL OR SUBSTANTIALLY SIMILAR TO THE 286
ORIGINAL SUBMISSION.
(E) IF THE ATTORNEY GENERAL APPROVES THE TRANSACTION, THE 289
NONPROFIT HEALTH CARE ENTITY SHALL HOLD A PUBLIC HEARING TO 290
RECEIVE COMMENT ON THE PROPOSED USE OF THE PROCEEDS OF THE 291
TRANSACTION. THE HEARING SHALL BE HELD IN THE COUNTY WHERE THE 292
NONPROFIT HEALTH CARE ENTITY HAS ITS PRINCIPAL PLACE OF BUSINESS 293
NOT LATER THAN FORTY-FIVE DAYS AFTER RECEIPT OF WRITTEN NOTICE OF 294
THE ATTORNEY GENERAL'S APPROVAL. 295
AT LEAST THIRTY DAYS PRIOR TO THE DATE SET FOR THE HEARING, 298
THE NONPROFIT HEALTH CARE ENTITY SHALL PUBLISH NOTICE OF THE 299
HEARING IN AT LEAST ONE DAILY NEWSPAPER OF GENERAL CIRCULATION IN 300
THE COUNTY WHERE THE NONPROFIT HEALTH CARE ENTITY HAS ITS 301
PRINCIPAL PLACE OF BUSINESS. THE NOTICE SHALL INCLUDE A
STATEMENT THAT A TRANSACTION HAS BEEN APPROVED BY THE ATTORNEY 302
GENERAL, THE NAMES OF THE PARTIES, A DESCRIPTION OF THE PROPOSED 303
TRANSACTION, AND THE DATE, TIME, AND PLACE OF THE HEARING. 305
(F)(1) THE PROCEEDS OF AN APPROVED TRANSACTION SHALL BE 308
DEDICATED AND TRANSFERRED TO ONE OR MORE EXISTING OR NEW 309
CHARITABLE ORGANIZATIONS EXEMPT FROM TAXATION UNDER SECTION 310
501(a) AND DESCRIBED IN SECTION 501(c)(3) OF THE "INTERNAL 313
REVENUE CODE OF 1986," 100 STAT. 2085, 26 U.S.C.A. 501, AS 317
AMENDED.
(2) THE ATTORNEY GENERAL MAY AUTHORIZE A DEDICATION AND 319
TRANSFER TO A PERSON EXEMPT FROM TAXATION UNDER SECTION 501(a) 321
AND DESCRIBED IN SECTION 501(c)(4) OF THE "INTERNAL REVENUE CODE 325
OF 1986," 100 STAT. 2085, 26 U.S.C.A. 501, AS AMENDED, IF ALL OF 328
THE FOLLOWING CONDITIONS ARE MET: 329
(a) THE ATTORNEY GENERAL DETERMINES THAT THE DEDICATION 332
8
AND TRANSFER IS NECESSARY TO ENSURE EFFECTIVE MANAGEMENT AND 333
MONETIZATION OF THE EQUITY OWNERSHIP, IF ANY, IN THE NONPROFIT 334
HEALTH CARE ENTITY;
(b) THE PERSON DESCRIBED IN DIVISION (F)(2) OF THIS 337
SECTION AGREES TO ALL OF THE FOLLOWING CONDITIONS: 338
(i) THE PERSON WILL RECEIVE FROM THE NONPROFIT HEALTH CARE 341
ENTITY ONLY THE AMOUNT OF PROCEEDS OF THE TRANSACTION AS ARE 342
NECESSARY TO FUND THE LEVEL OF ACTIVITY NECESSARY TO PRESERVE THE 343
PERSON'S TAX-EXEMPT STATUS;
(ii) NO PROCEEDS OF THE TRANSACTION, OR ANY OTHER FUNDS OR 346
RESOURCES CONTROLLED BY THE PERSON, WILL BE DISBURSED FOR 347
CAMPAIGN CONTRIBUTIONS, LOBBYING EXPENDITURES, OR OTHER POLITICAL 348
ACTIVITY;
(iii) THE PERSON AGREES TO ABIDE BY ANY REQUIREMENTS 351
IMPOSED ON PERSONS EXEMPT FROM TAXATION UNDER SECTION 501(a) AND 352
DESCRIBED IN SECTION 501(c)(3) OF THE "INTERNAL REVENUE CODE OF 356
1986," 100 STAT. 2085, 26 U.S.C.A. 501, AS AMENDED, THAT THE 359
ATTORNEY GENERAL DETERMINES APPROPRIATE. 360
(G)(1) NO NONPROFIT HEALTH CARE ENTITY SHALL ENTER INTO A 362
TRANSACTION SUBJECT TO THIS SECTION WITHOUT THE APPROVAL OF THE 364
ATTORNEY GENERAL GRANTED IN ACCORDANCE WITH THIS SECTION. 365
(2) NO PERSON WHO IS AN OFFICER, DIRECTOR, BOARD MEMBER, 367
OR OTHER FIDUCIARY OF A NONPROFIT HEALTH CARE ENTITY SHALL 368
RECEIVE ANYTHING OF VALUE THAT RELATES TO A TRANSACTION DESCRIBED 369
IN THIS SECTION AND SECTION 109.34 OF THE REVISED CODE AND IS OF 370
SUCH A CHARACTER AS TO MANIFEST A SUBSTANTIAL AND IMPROPER 371
INFLUENCE ON THE PERSON WITH RESPECT TO THE PERSON'S DUTIES. 372
(3) THE ATTORNEY GENERAL MAY INSTITUTE AND PROSECUTE A 374
CIVIL OR CRIMINAL ACTION TO ENFORCE THIS SECTION IN THE COURT OF 375
COMMON PLEAS OF THE COUNTY IN WHICH THE NONPROFIT HEALTH CARE 376
ENTITY HAS ITS PRINCIPAL PLACE OF BUSINESS OR THE FRANKLIN COUNTY 377
COURT OF COMMON PLEAS. IN ADDITION TO ANY CIVIL REMEDIES THAT 378
EXIST UNDER COMMON LAW OR THE REVISED CODE, A COURT MAY RESCIND 379
THE TRANSACTION, GRANT INJUNCTIVE RELIEF, ASSESS A CIVIL PENALTY 380
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IN AN AMOUNT NOT EXCEEDING TEN MILLION DOLLARS, OR IMPOSE ANY 381
COMBINATION OF THESE REMEDIES.
(H) A NONPROFIT HEALTH CARE ENTITY THAT IS A PARTY TO A 383
PROPOSED TRANSACTION THAT HAS BEEN DISAPPROVED BY THE ATTORNEY 385
GENERAL MAY APPEAL THE DISAPPROVAL ONLY BY FOLLOWING THE 386
PROCEDURE SET FORTH IN THIS DIVISION. THE DISAPPROVAL MAY BE 387
APPEALED TO THE COURT OF COMMON PLEAS OF THE COUNTY IN WHICH THE
NONPROFIT HEALTH ENTITY HAS ITS PRINCIPAL PLACE OF BUSINESS. THE 388
COURT OF COMMON PLEAS MAY REVERSE, VACATE, OR MODIFY THE ATTORNEY 389
GENERAL'S DECISION TO DISAPPROVE A TRANSACTION IF THE COURT FINDS 390
THAT THE DECISION WAS UNLAWFUL OR UNREASONABLE. THIS APPEAL 391
SHALL PROCEED AS AN APPEAL DE NOVO. TO BRING AN APPEAL UNDER 392
THIS DIVISION, A NONPROFIT HEALTH CARE ENTITY SHALL FILE A NOTICE
OF APPEAL WITH THE COURT AND THE ATTORNEY GENERAL NOT LATER THAN 393
THIRTY DAYS AFTER THE ENTITY'S RECEIPT OF NOTICE OF THE ATTORNEY 394
GENERAL'S DISAPPROVAL OF THE TRANSACTION. NOT LATER THAN THIRTY 395
DAYS AFTER RECEIPT OF THE NOTICE OF APPEAL, THE ATTORNEY GENERAL 396
SHALL PREPARE AND CERTIFY TO THE COURT OF COMMON PLEAS A COMPLETE 397
RECORD OF ALL OF THE DOCUMENTS SUBMITTED BY THE NONPROFIT HEALTH 398
CARE ENTITY TO THE ATTORNEY GENERAL AND ANY DOCUMENTS GENERATED
BY CONSULTANTS AT THE REQUEST OF THE ATTORNEY GENERAL OR OTHER 399
MATERIALS PRODUCED BY THE ATTORNEY GENERAL AS PART OF THE 400
ATTORNEY GENERAL'S DETERMINATION OF WHETHER TO APPROVE OR 401
DISAPPROVE THE TRANSACTION.
THE JUDGMENT OF THE COURT OF COMMON PLEAS IS FINAL UNLESS 403
REVERSED, VACATED, OR MODIFIED ON APPEAL. AN APPEAL MAY BE TAKEN 404
BY EITHER THE NONPROFIT HEALTH CARE ENTITY OR THE ATTORNEY 405
GENERAL, SHALL PROCEED AS IN THE CASE OF APPEALS IN CIVIL 406
ACTIONS, AND SHALL BE PURSUANT TO THE RULES OF APPELLATE 407
PROCEDURE AND, TO THE EXTENT NOT IN CONFLICT WITH THOSE RULES, 408
CHAPTER 2505. OF THE REVISED CODE.
(I)(1) THE POWERS OF THE ATTORNEY GENERAL UNDER THIS 410
SECTION AND SECTION 109.34 OF THE REVISED CODE ARE IN ADDITION TO 411
THE ATTORNEY GENERAL'S POWERS HELD AT COMMON LAW AND UNDER 412
10
SECTIONS 109.23 TO 109.33 OF THE REVISED CODE. 414
THIS SECTION AND SECTION 109.34 OF THE REVISED CODE DO NOT 418
LIMIT OR OTHERWISE AFFECT ANY OF THE FOLLOWING:
(a) ANY OTHER CIVIL OR CRIMINAL RIGHT, CLAIM, OR DEFENSE 420
THAT THE ATTORNEY GENERAL OR PARTIES MAY ASSERT UNDER COMMON LAW 422
OR THE REVISED CODE; 423
(b) THE AUTHORITY OF THE ATTORNEY GENERAL TO INSTITUTE AND 425
PROSECUTE AN ACTION TO ENFORCE SECTIONS 109.23 TO 109.33 OF THE 427
REVISED CODE; 428
(c) THE AUTHORITY OF THE ATTORNEY GENERAL TO INVESTIGATE 430
AND PROSECUTE VIOLATIONS OF ANY STATE OR FEDERAL ANTITRUST LAW. 432
(2) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO GRANT TO 435
THE ATTORNEY GENERAL ANY AUTHORITY OF THE SUPERINTENDENT OF
INSURANCE UNDER TITLE XVII OR TITLE XXXIX OF THE REVISED CODE 441
RELATING TO THE SUPERINTENDENT'S REVIEW OF AN ENTITY DESCRIBED IN 442
DIVISION (B)(1)(b) OF SECTION 109.34 OF THE REVISED CODE. 446
Sec. 109.99. (A) Whoever violates section 109.26 of the 455
Revised Code shall be fined not less than five hundred nor more 456
than ten thousand dollars or be imprisoned not less than one 457
month nor more than one year, or both. 458
(B) Whoever violates division (G)(1) of section 109.573 of 461
the Revised Code is guilty of unlawful disclosure of DNA database 462
information, a misdemeanor of the first degree.
(C) Whoever violates division (G)(2) of section 109.573 of 464
the Revised Code is guilty of unlawful possession of DNA database 465
information, a misdemeanor of the first degree. 466
(D)(1) WHOEVER VIOLATES DIVISION (G)(1) OF SECTION 109.35 469
OF THE REVISED CODE IS GUILTY OF ENTERING INTO A TRANSACTION WITH
A NONPROFIT HEALTH CARE ENTITY WITHOUT THE APPROVAL OF THE 471
ATTORNEY GENERAL, A FELONY OF THE THIRD DEGREE.
(2) WHOEVER VIOLATES DIVISION (G)(2) OF SECTION 109.35 OF 473
THE REVISED CODE IS GUILTY OF RECEIVING IMPROPER COMPENSATION 474
RELATING TO A TRANSACTION INVOLVING A NONPROFIT HEALTH CARE 475
ENTITY, A FELONY OF THE THIRD DEGREE.
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Section 2. That existing section 109.99 of the Revised 477
Code is hereby repealed. 478
Section 3. This act is hereby declared to be an emergency 480
measure necessary for the immediate preservation of the public 481
peace, health, or safety. The reason for such necessity is that 482
some transactions involving the acquisition of a nonprofit health 484
care entity by a for-profit health care entity have undervalued 485
the charitable assets in the nonprofit entity, attempted to
channel charitable assets into the for-profit entity, and 487
provided the Attorney General with inadequate time and 488
information to review the transaction. Therefore, this act shall 490
go into immediate effect.