BY REPRESENTATIVES Kaufman, K. Alexander, Chavez, Clarke, George, Hagedorn, Lawrence, Leyba, Udall, S. Williams, and Zimmerman;
also SENATORS Wham, Reeves, and Rupert.
CONCERNING A PROCESS FOR ATTORNEY GENERAL REVIEW
OF SIGNIFICANT TRANSACTIONS EFFECTING THE TRANSFER OF ASSETS OR
CONTROL OF A HOSPITAL.
Be it enacted by the General Assembly of the State
of Colorado:
SECTION 1. Title
6, Colorado Revised Statutes, is amended BY THE ADDITION OF A
NEW ARTICLE to read:
ARTICLE 19
Transactions Involving Licensed Hospitals
PART 1
GENERAL PROVISIONS
619101. Legislative declaration.
(1) THE GENERAL ASSEMBLY HEREBY FINDS, DETERMINES,
AND DECLARES THAT ALL LICENSED AND CERTIFIED HOSPITALS PROVIDE
A SERVICE TO THE PUBLIC BY MAKING HEALTH CARE SERVICES AVAILABLE
TO THE COMMUNITIES THEY SERVE.
(2) FURTHERMORE, FOR PURPOSES OF THE ATTORNEY
GENERAL'S AUTHORITY OVER THE TRANSFER OF NONPROFIT HOSPITAL ASSETS,
ALL NONPROFIT HOSPITALS SHALL BE DEEMED TO HOLD ALL OF THEIR ASSETS
IN TRUST, AND THOSE ASSETS SHALL BE DEEMED TO BE DEDICATED TO
THE SPECIFIC CHARITABLE PURPOSES SET FORTH IN THE ARTICLES OF
INCORPORATION OR OTHER ORGANIC DOCUMENTS OF THE NONPROFIT ENTITIES
THAT HOLD THEM IN TRUST. THE PUBLIC IS THE BENEFICIARY OF THIS
TRUST. NONPROFIT HOSPITALS HAVE A SUBSTANTIAL AND BENEFICIAL
EFFECT ON THE PROVISION OF HEALTH CARE TO THE PEOPLE OF COLORADO,
PROVIDING AS PART OF THEIR CHARITABLE PURPOSES UNCOMPENSATED CARE
TO THE UNINSURED OR UNDERINSURED AND INCLUDING, BUT NOT LIMITED
TO, PROVIDING MONEYS AND SUPPORT FOR HEALTH RELATED RESEARCH
AND EDUCATION OR OTHER COMMUNITY BENEFITS. THE GENERAL ASSEMBLY
ALSO FINDS THAT TRANSFERS OF THE ASSETS OF NONPROFIT HOSPITALS
TO THE FORPROFIT SECTOR MAY DIRECTLY AFFECT THE CHARACTER
AND EXTENT OF THE CHARITABLE USE OF THOSE ASSETS OR THE PROCEEDS
FROM THE ASSETS. THE PUBLIC ALSO HAS AN INTEREST IN KNOWING THAT
THE TRANSFER OF THE ASSETS OF A NONPROFIT HOSPITAL, OR THE PROCEEDS
FROM THE ASSETS, PRESERVES, TO THE EXTENT PRACTICABLE, THEIR CHARITABLE
PURPOSE. THE GENERAL ASSEMBLY BELIEVES IT IS IN THE BEST INTEREST
OF THE PUBLIC TO ENSURE THAT THE PUBLIC INTEREST IS FULLY PROTECTED
WHENEVER THE ASSETS OF A HOSPITAL ARE TRANSFERRED TO A FORPROFIT
ENTITY EXCEPT IN THE ORDINARY COURSE OF BUSINESS.
(3) THE GENERAL ASSEMBLY FURTHER FINDS
AND DECLARES THAT ALL TRANSFERS OF HOSPITAL ASSETS OR CONTROL
HAVE THE POTENTIAL TO IMPACT THE COMMUNITIES THEY SERVE. THIS
ARTICLE IS INTENDED TO PROTECT THE PUBLIC INTEREST, TO ASSURE
THAT NONPROFIT ASSETS OF HOSPITALS ARE PRESERVED TO SERVE THE
CHARITABLE PURPOSES TO WHICH THEY WERE DEDICATED, AND TO PROVIDE
THE PUBLIC NOTICE OF ALL TRANSFERS OF ASSETS OF HOSPITALS THAT
CONSTITUTE COVERED TRANSITIONS AS DEFINED IN THIS ARTICLE, AND
SHALL BE CONSTRUED WITH THESE PURPOSES IN MIND.
619102. Definitions.
AS USED IN THIS ARTICLE, UNLESS THE CONTEXT OTHERWISE REQUIRES:
(1) "COVERED TRANSACTION" MEANS
ANY TRANSACTION THAT WOULD RESULT IN THE SALE, TRANSFER, LEASE,
EXCHANGE, OR OTHER DISPOSITION OF FIFTY PERCENT OR MORE OF THE
ASSETS OF A HOSPITAL. A SERIES OF TRANSACTIONS TAKING PLACE IN
ANY FIVEYEAR PERIOD, WHICH WOULD RESULT IN THE AGGREGATE
OF THE TRANSFER OF FIFTY PERCENT OR MORE OF A HOSPITAL'S ASSETS,
SHALL IN ALL CIRCUMSTANCES BE DEEMED TO BE A COVERED TRANSACTION.
"COVERED TRANSACTION" SHALL ALSO INCLUDE THE SALE,
TRANSFER, OR OTHER DISPOSITION OF THE CONTROL OF A PARENT COMPANY,
HOLDING COMPANY, OR OTHER ENTITY CONTROLLING A HOSPITAL. FOR
THE PURPOSES OF THIS SUBSECTION (1), "FIFTY PERCENT OR MORE
OF THE ASSETS" SHALL BE BASED ON THE FAIR MARKET VALUE OF
ALL OF THE ASSETS OF THE HOSPITAL.
(2) "FOR-PROFIT ENTITY" MEANS
A BUSINESS CORPORATION, GENERAL PARTNERSHIP, LIMITED PARTNERSHIP,
LIMITED LIABILITY LIMITED PARTNERSHIP, LIMITED LIABILITY PARTNERSHIP,
LIMITED LIABILITY COMPANY, LIMITED PARTNERSHIP ASSOCIATION, AND
COOPERATIVE.
(3) "HOSPITAL" MEANS A LICENSED
OR CERTIFIED HOSPITAL AS DESCRIBED IN SECTION 251107
(1) (l) (I) AND (1) (l) (II).
619103. Procedures for
covered transactions notice attorney general powers.
(1) THE PARTIES TO A COVERED
TRANSACTION SHALL PROVIDE NOTICE OF SUCH TRANSACTION TO THE ATTORNEY
GENERAL NO LATER THAN SIXTY DAYS PRIOR TO THE TRANSACTION CLOSING
OR EFFECTIVE DATE OF THE TRANSACTION. THE NOTICE TO THE ATTORNEY
GENERAL SHALL BE IN WRITING, SHALL INCLUDE THE INFORMATION REQUIRED
IN SECTION 619202, 619302, OR 619402,
AS APPLICABLE, AND SHALL CONTAIN A CERTIFICATION THAT PUBLIC NOTICE
OF THE TRANSACTION WILL BE GIVEN WITHIN SEVEN DAYS AFTER THE NOTIFICATION
TO THE ATTORNEY GENERAL.
(2) WHENEVER THE ATTORNEY GENERAL HAS
REASON TO BELIEVE THAT A PERSON HAS ENGAGED IN OR IS ENGAGING
IN A COVERED TRANSACTION WITHOUT COMPLYING WITH THE PROVISIONS
OF THIS ARTICLE, THE ATTORNEY GENERAL MAY APPLY FOR AND OBTAIN,
IN AN ACTION IN THE APPROPRIATE DISTRICT COURT OF THIS STATE,
A TEMPORARY RESTRAINING ORDER OR INJUNCTION, OR BOTH, PURSUANT
TO THE COLORADO RULES OF CIVIL PROCEDURE, PROHIBITING SUCH PERSON
FROM CONTINUING SUCH NONCOMPLIANCE OR ENGAGING THEREIN OR DOING
ANY ACT IN FURTHERANCE THEREOF. THE COURT MAY MAKE SUCH FURTHER
ORDERS OR JUDGMENTS, AT LAW OR IN EQUITY, AS MAY BE NECESSARY
TO REMEDY SUCH NONCOMPLIANCE.
619104. Attorney general
affect on powers. (1) NOTHING
IN THIS ARTICLE SHALL BE CONSTRUED AS LIMITING THE ATTORNEY GENERAL'S
COMMON LAW POWERS.
(2) NOTHING IN THIS ARTICLE SHALL AFFECT
THE REGULATORY AUTHORITY OF ANY GOVERNMENT AGENCY OTHER THAN THE
DEPARTMENT OF LAW.
PART 2
NONPROFIT TO NONPROFIT TRANSACTIONS
619201. Scope of part 2.
THIS PART 2 APPLIES TO COVERED TRANSACTIONS INVOLVING A NONPROFIT
HOSPITAL AND ANOTHER NONPROFIT ENTITY.
619202. Notice.
NOTICE SHALL BE PROVIDED BY THE PARTIES TO A COVERED TRANSACTION
ACCORDING TO SECTION 619103, AND SHALL INCLUDE A STATEMENT
ON THE CHARITABLE PURPOSES OF EACH NONPROFIT ENTITY ENTERING INTO
THE COVERED TRANSACTION AS WELL AS A STATEMENT CONCERNING THE
RELATIONSHIP OF THESE PURPOSES TO THE HOSPITAL INVOLVED IN THE
TRANSACTION. THE STATEMENT MAY INCLUDE A CERTIFICATION BY THE
CHIEF EXECUTIVE OFFICER AS APPROVED BY THE BOARD OF DIRECTORS
OR BOARD OF TRUSTEES OF THE NONPROFIT ENTITY TRANSFERRING ITS
ASSETS THAT THERE WILL BE NO MATERIAL CHANGE IN THE CHARITABLE
PURPOSES TO WHICH THE TRANSFERRED ASSETS ARE DEDICATED AS A RESULT
OF THE TRANSACTION.
619203. Attorney general
review and assessment. (1) A
COVERED TRANSACTION UNDER THIS PART 2 THAT WILL NOT RESULT IN
A MATERIAL CHANGE IN THE CHARITABLE PURPOSES TO WHICH THE ASSETS
OF THE HOSPITAL HAVE BEEN DEDICATED, AND WILL NOT RESULT IN A
TERMINATION OF THE ATTORNEY GENERAL'S JURISDICTION OVER THOSE
ASSETS CAUSED BY A TRANSFER OF A MATERIAL AMOUNT OF THOSE ASSETS
OUTSIDE OF THE STATE OF COLORADO, SHALL PROCEED WITHOUT FURTHER
REVIEW.
(2) (a) WHEN A TRANSACTION COVERED BY THIS PART 2 WILL RESULT IN A MATERIAL CHANGE IN THE CHARITABLE PURPOSES TO WHICH THE ASSETS OF THE HOSPITAL HAVE BEEN DEDICATED, OR A TERMINATION OF THE ATTORNEY GENERAL'S JURISDICTION OVER THE HOSPITAL ASSETS CAUSED BY A TRANSFER OF A MATERIAL AMOUNT OF THOSE ASSETS OUTSIDE THE STATE OF COLORADO, THE ATTORNEY GENERAL MAY EXERCISE HIS OR HER COMMON LAW AUTHORITY TO ASSESS AND REVIEW OR CHALLENGE THE TRANSACTION AS DEEMED APPROPRIATE BY THE ATTORNEY GENERAL. IF THE ATTORNEY GENERAL DECIDES TO CONDUCT AN ASSESSMENT OR REVIEW THE FOLLOWING PROVISIONS SHALL APPLY TO SUCH ACTIONS OF THE ATTORNEY GENERAL:
(b) THE ATTORNEY GENERAL SHALL PERFORM
A REVIEW AND ASSESSMENT TO THE EXTENT PRACTICABLE AND WITH DUE
CONSIDERATION TO THE FINANCIAL CIRCUMSTANCES OF THE PARTIES TO
THE TRANSACTION. THE ATTORNEY GENERAL IS FURTHER AUTHORIZED TO:
(I) HIRE EXPERTS, AT THE EXPENSE OF THE
PARTIES TO THE TRANSACTION, AS SIMILARLY PROVIDED FOR IN SECTION
619406 (1) (b) AND TO ACCEPT AND EXPEND GRANTS OR
DONATIONS, OR BOTH, AS SIMILARLY PROVIDED FOR IN SECTION 619
406 (1) (e);
(II) CONTRACT AND CONSULT WITH OTHER STATE
AGENCIES AS SIMILARLY PROVIDED FOR IN SECTION 619406
(1) (a);
(III) REQUIRE PRODUCTION OF MATERIAL DOCUMENTATION,
SUCH AS THE PROPOSED AGREEMENTS RELATING TO THE PROPOSED TRANSACTION,
AGREEMENTS REGARDING COLLATERAL TRANSACTIONS RELATING TO THE PROPOSED
TRANSACTION, AND ANY REPORTS OF FINANCIAL AND ECONOMIC ANALYSIS
THAT THE NONPROFIT ENTITY REVIEWED OR RELIED ON IN NEGOTIATING
THE PROPOSED TRANSACTION. THESE DOCUMENTS SHALL BE TREATED IN
THE SAME MANNER AS SET FORTH IN SECTION 619404 (4);
AND
(IV) HOLD A PUBLIC HEARING AS SIMILARLY
PROVIDED FOR IN SECTION 619404 (1). THE ATTORNEY
GENERAL SHALL PROVIDE A WRITTEN DETERMINATION, WITHIN THE TIME
FRAMES OR EXTENDED TIME FRAMES AS SIMILARLY PROVIDED FOR IN SECTION
619402 (2).
(c) THE ATTORNEY GENERAL SHALL HAVE THE
AUTHORITY TO ALLOW A TRANSACTION THAT SATISFIES THE FOLLOWING
CRITERIA:
(I) THE ASSETS CONTINUE TO BE DEDICATED
TO CHARITABLE PURPOSES;
(II) THE DIRECTORS OR TRUSTEES OF THE
PARTIES TO THE TRANSACTION HAVE NOT ACTED UNREASONABLY IN LIGHT
OF THE FINANCIAL CIRCUMSTANCES OF THE PARTIES;
(III) THE DIRECTORS OR TRUSTEES OF THE
PARTIES TO THE TRANSACTION HAVE NOT ACTED UNREASONABLY IN ACCOMMODATING
THE AFFECTED COMMUNITY OR COMMUNITIES; AND
(IV) THE DIRECTORS OR TRUSTEES OF THE PARTIES TO THE TRANSACTION HAVE NOT BREACHED THEIR FIDUCIARY DUTIES OR OTHERWISE ENGAGED IN MISCONDUCT IN SUCH TRANSACTION.
(d) THE ATTORNEY GENERAL SHALL LIBERALLY
CONSTRUE THE CRITERIA SET FORTH IN PARAGRAPH (c) OF THIS SUBSECTION
(2) IN FAVOR OF ALLOWING A TRANSACTION TO PROCEED.
PART 3
FORPROFIT TO FORPROFIT TRANSACTIONS
619301. Scope of part 3.
THIS PART 3 APPLIES TO COVERED TRANSACTIONS WHERE THE PARTIES
INVOLVED IN THE TRANSACTION ARE ALL FORPROFIT ENTITIES.
619302. Notice.
THE PARTIES TO A COVERED TRANSACTION GOVERNED BY THIS PART 3
SHALL PROVIDE THE NOTICE REQUIRED BY SECTION 619103.
PART 4
NONPROFIT TO FORPROFIT TRANSACTIONS
619401. Scope of part 4.
THIS PART 4 APPLIES TO COVERED TRANSACTIONS INVOLVING A NONPROFIT
HOSPITAL AND A FORPROFIT ENTITY.
619402. Notice and filing.
(1) THE NOTICE AND FILING PROVIDED TO THE ATTORNEY
GENERAL PURSUANT TO SECTION 619103 SHALL INCLUDE ALL
PROPOSED AGREEMENTS RELATING TO THE PROPOSED TRANSACTION, ALL
AGREEMENTS REGARDING COLLATERAL TRANSACTIONS THAT RELATE TO THE
PRINCIPAL TRANSACTION, ANY REPORTS OF FINANCIAL AND ECONOMIC ANALYSIS
THAT THE NONPROFIT ENTITY REVIEWED OR RELIED ON IN NEGOTIATING
THE PROPOSED TRANSACTION, AND AN EXPLANATION OF HOW THE COMPLETED
TRANSACTION WILL COMPLY WITH THE REQUIREMENTS OF SECTION 619403.
THE ATTORNEY GENERAL SHALL NOTIFY THE PARTIES TO THE TRANSACTION
IF THE FILING IS COMPLETE OR INCOMPLETE WITHIN THIRTY DAYS AFTER
THE INITIAL FILING AND SHALL SPECIFY THE OMITTED DOCUMENTATION
IF INCOMPLETE. AN INITIAL FILING THAT INCLUDES A SCHEDULE FOR
THE SUBMISSION OF SUBSEQUENTLY PRODUCED OR ACQUIRED DOCUMENTS
MAY BE DEEMED COMPLETE BY THE ATTORNEY GENERAL.
(2) WITHIN SIXTY DAYS AFTER THE COMPLETE
FILING REQUIRED BY THIS SECTION, THE ATTORNEY GENERAL SHALL NOTIFY
IN WRITING THE PARTIES TO THE TRANSACTION OF THE RESULTS AND CONCLUSIONS
OF THE REVIEW AND ASSESSMENT. THE ATTORNEY GENERAL MAY EXTEND
THIS PERIOD FOR AN ADDITIONAL PERIOD OF UP TO NINETY DAYS IF THE
ATTORNEY GENERAL DETERMINES, FOR GOOD CAUSE, THAT ADDITIONAL TIME
IS WARRANTED AND SO ADVISES THE PARTIES IN WRITING. THE ATTORNEY
GENERAL SHALL NOTIFY THE PARTIES OF ANY EXTENSION AS SOON AS POSSIBLE.
619403. Certification and
criteria. (1) THE PROPOSED
TRANSACTION SHALL COMPLY WITH THE PROVISIONS OF THIS SECTION AND
THE PARTIES TO THE TRANSACTION SHALL INCLUDE IN THE FILING REQUIRED
BY SECTION 619402, DOCUMENTATION AND CERTIFICATION
FROM THE PARTIES, EITHER JOINT OR SEVERAL AS APPROPRIATE, THAT
THE COVERED TRANSACTION WILL COMPLY WITH THE FOLLOWING:
(a) THE TRANSACTION SHALL BE IN THE PUBLIC
INTEREST. A TRANSACTION IS NOT IN THE PUBLIC INTEREST UNLESS APPROPRIATE
STEPS HAVE BEEN TAKEN TO SAFEGUARD THE VALUE OF NONPROFIT HOSPITAL
ASSETS BEING TRANSFERRED AND TO ENSURE THAT ANY PROCEEDS OF THE
TRANSACTION ARE DEDICATED TO THE CHARITABLE PURPOSES.
(b) THE TRANSACTION RESULTS IN CONTINUING
ACCESS TO HEALTH CARE SERVICES FOR THE AFFECTED COMMUNITY.
(c) NO DIRECTOR, OFFICER OF THE BOARD,
CHIEF EXECUTIVE OFFICER, CHIEF OPERATING OFFICER, OR CHIEF FINANCIAL
OFFICER OF THE NONPROFIT ENTITY SUBMITTING THE FILING OR A NONPROFIT
CHARITABLE ORGANIZATION RECEIVING THE PROCEEDS OF THE COVERED
TRANSACTION SHALL BENEFIT DIRECTLY OR INDIRECTLY FROM THE TRANSACTION.
(d) THE NONPROFIT ENTITY PROPOSING THE
TRANSACTION SHALL USE DUE DILIGENCE IN SELECTING THE FORPROFIT
ENTITY THAT IS A PARTY TO THE TRANSACTION AND IN NEGOTIATING THE
PRICE AND OTHER TERMS AND CONDITIONS OF THE TRANSACTION.
(e) PROCEEDS OF THE COVERED TRANSACTION
SHALL BE SET ASIDE IN AN AMOUNT EQUAL TO THE FAIR MARKET VALUE
OF THE HOSPITAL ASSETS BEING TRANSFERRED. FAIR MARKET VALUE SHALL
BE DETERMINED AT THE TIME OF THE TRANSACTION AND INCLUDE CONSIDERATION
OF MARKET VALUE, GOING CONCERN VALUE, NET ASSET VALUE, AND ANY
OTHER SIGNIFICANT RELEVANT FACTORS.
(f) THE DISTRIBUTION OF THE PROCEEDS OF
THE COVERED TRANSACTION SHALL BE MADE ONLY TO ONE OR MORE EXISTING
OR NEW CHARITABLE ORGANIZATIONS OPERATING PURSUANT TO 26 U.S.C.
SEC. 501 (c) (3) OF THE FEDERAL "INTERNAL REVENUE CODE OF
1986", AS AMENDED.
(g) EACH NONPROFIT CHARITABLE ORGANIZATION
RECEIVING THE PROCEEDS OF THE COVERED TRANSACTION, ITS DIRECTORS,
OFFICERS, AND STAFF SHALL BE AND REMAIN INDEPENDENT OF THE PARTIES
TO THE TRANSACTION AND THEIR AFFILIATES. EXCEPT AS PROVIDED IN
THIS PARAGRAPH (g), NO PERSON WHO IS A DIRECTOR, OFFICER OF THE
BOARD, CHIEF EXECUTIVE OFFICER, CHIEF OPERATING OFFICER, OR CHIEF
FINANCIAL OFFICER OF ANY PARTY TO THE TRANSACTION SUBMITTING THE
NOTICE AND FILING, AT THE TIME THE NOTICE IS SUBMITTED OR AT THE
TIME OF THE TRANSACTION, SHALL BE QUALIFIED TO BE AN OFFICER OF
THE BOARD, CHIEF EXECUTIVE OFFICER, CHIEF OPERATING OFFICER, OR
CHIEF FINANCIAL OFFICER OF THE NONPROFIT CHARITABLE ORGANIZATION
RECEIVING THE PROCEEDS OF THE COVERED TRANSACTION. THE NONPROFIT
ENTITY THAT IS A PARTY TO THE PROPOSED TRANSACTION SHALL INCLUDE
IN ITS NOTICE AND FILING THE PROPOSED MEMBERSHIP OF THE INITIAL
BOARD OF DIRECTORS OF THE NONPROFIT CHARITABLE ORGANIZATION THAT
IS TO RECEIVE THE PROCEEDS OF THE COVERED TRANSACTION THAT SHALL
REPRESENT THE DIVERSE INTERESTS OF THE AFFECTED COMMUNITIES AND
INCLUDE PERSONS FROM THE AREA AFFECTED BY THE TRANSACTION. NOTWITHSTANDING
THE REQUIREMENTS OF THIS PARAGRAPH (g), EACH NONPROFIT CHARITABLE
ORGANIZATION RECEIVING THE PROCEEDS OF THE COVERED TRANSACTION
MAY HAVE PERSONS AFFILIATED WITH PARTIES TO THE TRANSACTION OR
THEIR AFFILIATES SERVE ON ITS BOARD OF DIRECTORS PROVIDED THAT
SUCH PERSONS DO NOT CONSTITUTE MORE THAN ONE THIRD OF THE MEMBERS
OF THE BOARD.
(h) A NONPROFIT CHARITABLE ORGANIZATION
RECEIVING THE PROCEEDS OF THE COVERED TRANSACTION SHALL PUT MECHANISMS
IN PLACE TO AVOID CONFLICTS OF INTEREST AND TO PROHIBIT GRANTS
OR OTHER ACTIONS BENEFITING ITS BOARD OF DIRECTORS OR MANAGEMENT
BEYOND THE REASONABLE VALUE OF THEIR SERVICES OR SUBSTANTIALLY
BENEFITING THE FORPROFIT ENTITY.
(i) THE CHARITABLE MISSION AND FUNCTIONS
OF THE NONPROFIT CHARITABLE ORGANIZATION RECEIVING THE PROCEEDS
OF THE COVERED TRANSACTION SHALL REFLECT THE HISTORICAL CHARITABLE
PURPOSES OF THE NONPROFIT ENTITY PROPOSING THE TRANSACTION.
619404. Attorney general
review. (1) NO LATER THAN
THIRTY DAYS AFTER THE ATTORNEY GENERAL HAS RECEIVED THE COMPLETED
NOTICE AND FILING PURSUANT TO SECTION 619402, THE
ATTORNEY GENERAL SHALL HOLD AT LEAST ONE PUBLIC HEARING IN THE
SERVICE AREA OF THE HOSPITAL INVOLVED IN THE TRANSACTION, AT WHICH
THE ATTORNEY GENERAL SHALL ALLOW ANY PERSON TO EITHER FILE WRITTEN
COMMENTS AND EXHIBITS OR APPEAR AND MAKE A STATEMENT ABOUT ANY
ASPECT OF THE TRANSACTION, INCLUDING, BUT NOT LIMITED TO, WHETHER
THE PROPOSED TRANSACTION COMPLIES WITH THE REQUIREMENTS OF SECTION
619403. AT LEAST SEVEN DAYS PRIOR TO EACH PUBLIC
HEARING, THE ATTORNEY GENERAL SHALL SUBMIT A PRESS RELEASE PROVIDING
PERTINENT INFORMATION ABOUT THE HEARING, INCLUDING THE TIME AND
PLACE OF THE HEARING, TO ONE OR MORE NEWSPAPERS OF GENERAL CIRCULATION
IN THE AFFECTED COMMUNITIES AND NOTIFY THE MAYOR OF THE CITY OR
CITY AND COUNTY AND THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY
IN WHICH THE HOSPITAL IS LOCATED. THE PUBLIC HEARING SHALL BE
A LEGISLATIVE RATHER THAN AN ADJUDICATIVE HEARING.
(2) THE ATTORNEY GENERAL SHALL HAVE THE
POWER TO SUBPOENA DOCUMENTS OR WITNESSES, REQUIRE AND ADMINISTER
OATHS, AND REQUIRE STATEMENTS AT ANY TIME THAT ARE REASONABLY
NECESSARY TO ASSESS AN APPLICATION OR MONITOR COMPLIANCE WITH
THIS SECTION.
(3) IF ANY PERSON FAILS TO COOPERATE WITH
ANY INVESTIGATION PURSUANT TO THIS SECTION OR FAILS TO OBEY ANY
SUBPOENA ISSUED PURSUANT TO THIS SECTION, THE ATTORNEY GENERAL
MAY APPLY TO THE APPROPRIATE DISTRICT COURT FOR AN APPROPRIATE
ORDER TO EFFECT THE PURPOSES OF THIS SECTION. THE APPLICATION
SHALL STATE THAT THERE ARE REASONABLE GROUNDS TO BELIEVE THAT
THE ORDER APPLIED FOR IS NECESSARY TO CARRY OUT THE ATTORNEY GENERAL'S
DUTIES UNDER THIS SECTION. IF THE COURT IS SATISFIED THAT REASONABLE
GROUNDS EXIST, THE COURT, IN ITS ORDER, MAY:
(a) REQUIRE THE ATTENDANCE OF OR THE PRODUCTION
OF DOCUMENTS BY SUCH PERSON, OR BOTH;
(b) GRANT SUCH OTHER OR FURTHER RELIEF
AS MAY BE NECESSARY TO OBTAIN COMPLIANCE BY SUCH PERSON.
(4) EXCEPT FOR DOCUMENTS THE ATTORNEY GENERAL DETERMINES TO BE CONFIDENTIAL AS A MATTER OF LAW, THE DOCUMENTS FILED PURSUANT TO SECTION 619402 SHALL BE AVAILABLE TO THE PUBLIC FOR REVIEW AND COPYING DURING NORMAL BUSINESS HOURS AT BOTH THE ATTORNEY GENERAL'S OFFICE AND THE OFFICES OF THE PARTIES TO THE TRANSACTION. REASONABLE COSTS OF COPYING SHALL BE BORNE BY THE PARTIES IF COPIES ARE REQUESTED AT THEIR OFFICES.
619405. Posttransaction
requirements. FOR A PERIOD OF NOT LESS
THAN FIVE YEARS, THE NONPROFIT CHARITABLE ORGANIZATION RECEIVING
THE PROCEEDS OF THE COVERED TRANSACTION SHALL PROVIDE THE ATTORNEY
GENERAL WITH AN ANNUAL REPORT OF ITS GRANTMAKING AND OTHER
CHARITABLE ACTIVITIES RELATED TO ITS USE OF THE PROCEEDS OF THE
COVERED TRANSACTION RECEIVED. FOR A PERIOD OF NOT LESS THAN FIVE
YEARS, THE FORPROFIT ENTITY SHALL PROVIDE THE ATTORNEY GENERAL
WITH AN ANNUAL REPORT DETAILING ITS ACTIVITIES TO SATISFY THE
REQUIREMENTS OF SECTION 619403 AT THE TIME OF THE
REVIEW AND ASSESSMENT. THESE ANNUAL REPORTS SHALL BE MADE AVAILABLE
TO THE PUBLIC AT THE ATTORNEY GENERAL'S OFFICE, THE OFFICE OF
THE NONPROFIT CHARITABLE ORGANIZATION, AND THE OFFICES OF THE
PARTIES TO THE COVERED TRANSACTION. THE ANNUAL REPORT SHALL BE
FILED NO LATER THAN NINETY DAYS AFTER THE YEAR THAT THE REPORT
ADDRESSES.
619406. Attorney general
powers. (1) THE ATTORNEY GENERAL
HAS THE FOLLOWING POWERS:
(a) TO CONTRACT WITH, CONSULT WITH, AND
RECEIVE ADVICE FROM ANY STATE AGENCY ON THOSE TERMS AND CONDITIONS
THAT THE ATTORNEY GENERAL AND THE EXECUTIVE DIRECTOR DEEM APPROPRIATE;
(b) TO CONTRACT WITH PERSONS INCLUDING,
BUT NOT LIMITED TO, ATTORNEYS, ACCOUNTANTS, ACTUARIES, FINANCIAL
ANALYSTS, AND HEALTH CARE ANALYSTS AS IS REASONABLE AND NECESSARY
TO ASSIST IN REVIEWING A PROPOSED TRANSACTION. CONTRACT COSTS
SHALL BE BORNE BY THE PARTIES TO THE TRANSACTION AND SHALL NOT
EXCEED AN AMOUNT THAT IS REASONABLY NECESSARY TO CONDUCT THE REVIEW
AND ASSESSMENT;
(c) TO ADOPT REGULATIONS OR GUIDELINES
AS NECESSARY IN ORDER TO CARRY OUT THE REQUIREMENTS OF THIS SECTION;
(d) THE DISCRETION TO DETERMINE, CONSISTENT
WITH THE REQUIREMENTS OF SECTION 619404, THE DEGREE
OF ADMINISTRATIVE REVIEW OF THE TRANSACTION THAT IS NECESSARY
TO DETERMINE WHETHER THE TRANSACTION CONFORMS WITH THE REQUIREMENTS
OF SECTION 619403. THIS DETERMINATION SHALL BE MADE
BY TAKING INTO CONSIDERATION, AMONG OTHER THINGS, THE SIZE OF
THE TRANSACTION, THE SIZE OF ALL COMMUNITIES AFFECTED BY THE TRANSACTION,
THE IMPACT ON THE COMMUNITIES, AND THE PAST PERFORMANCE OF THE
FORPROFIT ENTITY.
(e) TO ACCEPT AND EXPEND GRANTS OR DONATIONS,
OR BOTH, NOT TO EXCEED FIFTY THOUSAND DOLLARS FOR THE PURPOSE
OF THE IMPLEMENTATION OF THIS ARTICLE. ANY SUCH GRANTS OR DONATIONS
SHALL BE DEPOSITED INTO AND EXPENDED FROM THE NONPROFIT HEALTH
CARE ENTITY REVIEW CASH FUND CREATED IN PARAGRAPH (f) OF THIS
SUBSECTION (1).
(f) TO REQUEST AND RECEIVE FROM THE FORPROFIT
ENTITY SUCH SUMS AS MAY BE PRESCRIBED BY THE ATTORNEY GENERAL
TO COVER THE NECESSARY AND ACTUAL COSTS FOR MONITORING FOR THE
ENSUING FIVEYEAR PERIOD TO ENSURE THAT THE TRANSACTION REMAINS
IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 619403.
ANY MONEYS COLLECTED PURSUANT TO THIS PARAGRAPH (f) SHALL BE
TRANSMITTED TO THE STATE TREASURER, WHO SHALL CREDIT THE SAME
TO THE NONPROFIT HEALTH CARE ENTITY REVIEW CASH FUND, WHICH FUND
IS HEREBY CREATED IN THE STATE TREASURY. THE MONEYS IN SUCH FUND
SHALL BE CONTINUOUSLY APPROPRIATED FOR THE DIRECT AND INDIRECT
COSTS OF SUCH MONITORING. IN ACCORDANCE WITH SECTION 2436114,
C.R.S., ALL INTEREST DERIVED FROM THE DEPOSIT AND INVESTMENT OF
THIS FUND SHALL BE CREDITED TO THE GENERAL FUND.
(g) TO HOLD A HEARING AFTER TWENTY DAYS'
NOTICE TO THE AFFECTED PARTIES IF THE ATTORNEY GENERAL RECEIVES
INFORMATION THAT THE ATTORNEY GENERAL DEEMS SUFFICIENT TO INDICATE
THAT THE NONPROFIT CHARITABLE ORGANIZATION OR FORPROFIT
ENTITY MAY NOT BE FULFILLING ITS OBLIGATIONS PURSUANT TO SECTION
6-19-403. IF, AFTER SUCH HEARING, THE ATTORNEY GENERAL DETERMINES
THAT PROOF OF THE NONCOMPLIANCE IS PROBABLE, HE OR SHE SHALL INSTITUTE
PROCEEDINGS IN DISTRICT COURT TO REQUIRE CORRECTIVE ACTION. THE
ATTORNEY GENERAL SHALL RETAIN OVERSIGHT OF THE CORRECTIVE ACTION
FOR AS LONG AS NECESSARY TO ENSURE COMPLIANCE. NOTHING IN THIS
SECTION SHALL BE CONSTRUED TO LIMIT THE ATTORNEY GENERAL'S POWER
TO ENFORCE COMPLIANCE WITH THIS SECTION AFTER THE EXPIRATION OF
THE FIVEYEAR PERIOD CONTEMPLATED BY PARAGRAPH (f) OF THIS
SUBSECTION (1).
619407. Attorney general
review and assessment. (1) THE
ATTORNEY GENERAL MAY REVIEW ANY NOTICE AND FILING MADE UNDER THIS
PART 4 AND ASSESS WHETHER THE PROPOSED TRANSACTION COMPLIES WITH
THE REQUIREMENTS OF SECTION 619403.
(2) IF, AFTER REVIEW AND ASSESSMENT, THE
ATTORNEY GENERAL CONCLUDES THAT ALL OF THE REQUIREMENTS OF SECTION
619403 HAVE BEEN MET, THE ATTORNEY GENERAL SHALL ISSUE
A WRITTEN ASSESSMENT AND CONCLUSION TO SUCH EFFECT ON THE PROPOSED
TRANSACTION. IF THE ATTORNEY GENERAL CONCLUDES AFTER DISCUSSIONS
WITH THE PARTIES TO THE TRANSACTION, THAT ALL OF THE REQUIREMENTS
OF SECTION 619403 HAVE NOT BEEN MET, OR IF THE ATTORNEY
GENERAL IS UNABLE TO CONCLUDE WHETHER OR NOT ALL OF THE REQUIREMENTS
OF SECTION 619403 HAVE BEEN MET, THE ATTORNEY GENERAL
SHALL ISSUE A WRITTEN ASSESSMENT AND CONCLUSION TO SUCH EFFECT
ON THE PROPOSED TRANSACTION. SUCH NONCONCLUSIVE OR NONCOMPLYING
ASSESSMENT AND CONCLUSION SHALL INCLUDE SPECIFIC FINDINGS ON EACH
OF THE REQUIREMENTS OF SECTION 619403. THE ATTORNEY
GENERAL MAY ALSO ISSUE A WRITTEN STATEMENT THAT A FORMAL ASSESSMENT
AND REVIEW HAS NOT BEEN DETERMINED NECESSARY FOR THE COVERED TRANSACTION
OR THAT THE TRANSACTION DOES NOT CONSTITUTE A COVERED TRANSACTION.
(3) THE ATTORNEY GENERAL MAY CHALLENGE
ANY PROPOSED TRANSACTION AT ANY TIME THROUGH INJUNCTION, DECLARATORY
ORDER, OR OTHERWISE, IN THE DISTRICT COURT OF THE JURISDICTION
IN WHICH THE NONPROFIT ENTITY PROPOSING THE TRANSACTION HAS ITS
PRINCIPAL PLACE OF BUSINESS OR WHERE THE HOSPITAL INVOLVED IN
THE TRANSACTION IS LOCATED. IF THE ATTORNEY GENERAL'S ASSESSMENT
AND REVIEW UNDER THIS SECTION IS CHALLENGED IN COURT, THE ATTORNEY
GENERAL'S CONCLUSIONS SHALL BE THE FOCUS OF THE REVIEW BY THE
REVIEWING COURT AND SHALL BE GIVEN STRONG DEFERENCE BY SUCH COURT.
THE BURDEN SHALL BE UPON THE PROPONENTS OF THE TRANSACTION TO
ESTABLISH THAT THE ATTORNEY GENERAL'S CONCLUSIONS ARE NOT IN CONFORMANCE
WITH STATUTORY PROVISIONS. THE COURT SHALL HAVE THE POWER TO
ISSUE WHATEVER ORDERS ARE NECESSARY TO ENSURE COMPLIANCE WITH
THE PROVISIONS OF SECTION 619403.
SECTION 2. Applicability.
This act shall apply to all transactions occurring on or after
the effective date of this act.
SECTION 3. Safety
clause. The general assembly hereby finds, determines, and
declares that this act is necessary for the immediate preservation
of the public peace, health, and safety.
____________________________ ____________________________
Charles E. Berry Tom Norton
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Judith M. Rodrigue Patricia K. Dicks
CHIEF CLERK OF THE HOUSE ASSISTANT SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
_________________________________________
Roy Romer
GOVERNOR OF THE STATE
OF COLORADO