By Maxey                                               H.B. No. 393
         77R2156 DLF-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain nonprofit entities that provide health or
 1-3     long-term care or health benefit plans; providing a penalty.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  PURPOSE AND FINDINGS.  Nonprofit health care
 1-6     providers have historically served the needs of their community,
 1-7     including the needs of uninsured individuals in the community.
 1-8     Access to high quality, affordable health care is a continuing need
 1-9     in a state with over four million uninsured individuals and
1-10     millions more individuals who do not have adequate insurance.
1-11     Changes in the health care market have caused a substantial number
1-12     of nonprofit health care providers and nonprofit health benefit
1-13     plan providers to establish for-profit ventures, affecting hundreds
1-14     of millions of charitable dollars.  As these changes in the health
1-15     care system occur, it is in the best interest of this state to
1-16     ensure that these health care assets, which are impressed with a
1-17     constructive charitable trust for health care purposes, continue to
1-18     serve the public and the unmet health care needs in this state.
1-19           SECTION 2.  SHORT TITLE.  This Act may be cited as the
1-20     Charitable Health Care Trust Act.
1-21           SECTION 3.  DEFINITIONS.  In this Act:
1-22                 (1)  "Charitable health care assets" means the proceeds
1-23     received by a nonprofit provider in connection with an agreement or
1-24     transaction described in Section 4 of this Act that are distributed
 2-1     under Section 8 of this Act.
 2-2                 (2)  "Charitable health care organization" means an
 2-3     organization that is:
 2-4                       (A)  exempt from federal income tax under Section
 2-5     501(a) of the Internal Revenue Code of 1986 by being listed as an
 2-6     exempt organization in Section 501(c)(3) of the code; and
 2-7                       (B)  dedicated to:
 2-8                             (i)  serving unmet health care needs in
 2-9     this state, particularly the health care needs of low-income
2-10     uninsured and underserved populations; and
2-11                             (ii)  promoting access to health care and
2-12     improving the quality of health care.
2-13                 (3)  "Designated charitable health care organization"
2-14     means a charitable health care organization receiving the
2-15     charitable health care assets under Section 9 of this Act.
2-16                 (4)  "For-profit entity" means a business entity that
2-17     is not a mutual plan provider or a nonprofit provider.
2-18                 (5)  "Health benefit plan provider" means:
2-19                       (A)  an insurer, group hospital service
2-20     corporation, or other entity that issues:
2-21                             (i)  an individual, group, blanket, or
2-22     franchise insurance policy, insurance agreement, or group hospital
2-23     service contract that provides benefits for medical or surgical
2-24     expenses incurred as a result of an accident or sickness; or
2-25                             (ii)  a long-term care insurance policy; or
2-26                       (B)  a health maintenance organization that
2-27     issues an evidence of coverage or group subscriber contract.
 3-1                 (6)  "Health care provider" means any entity licensed
 3-2     to provide health or long-term care.  The term includes any
 3-3     facility licensed under Subtitle B, Title 4, Health and Safety
 3-4     Code.
 3-5                 (7)  "Mutual plan provider" means any mutual or mutual
 3-6     assessment association subject to Chapter 11, 12, 13, or 14,
 3-7     Insurance Code, that provides health or accident insurance,
 3-8     including any entity exempt under Article 14.17, Insurance Code.
 3-9                 (8)  "Nonprofit provider" means a health benefit plan
3-10     provider or a health care provider that is:
3-11                       (A)  exempt from federal income tax under Section
3-12     501(a) of the Internal Revenue Code of 1986 by being listed as an
3-13     exempt organization in Section 501(c)(3) or 501(c)(4) of the code;
3-14                       (B)  incorporated under the Texas Non-Profit
3-15     Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
3-16     Statutes) or a similar law of another state;
3-17                       (C)  exempt from state franchise, property, and
3-18     sales taxes; or
3-19                       (D)  organized and operated exclusively for the
3-20     promotion of social welfare and that normally receives more than
3-21     one-third of its support in any year from private or public gifts,
3-22     grants, contributions, or membership fees.
3-23                 (9)  "Service area" means a geographical area of this
3-24     state served by a nonprofit provider or a charitable health care
3-25     organization.
3-26           SECTION 4.  DUTIES OF NONPROFIT PROVIDER.  (a)  A nonprofit
3-27     provider shall comply with this Act, in accordance with the periods
 4-1     established by this Act, with respect to any agreement or
 4-2     transaction under which the nonprofit provider directly or
 4-3     indirectly:
 4-4                 (1)  sells, transfers, leases, exchanges, provides an
 4-5     option with respect to, or otherwise disposes of assets of the
 4-6     nonprofit provider in favor of a for-profit entity or a mutual plan
 4-7     provider;
 4-8                 (2)  restructures as or converts to a for-profit entity
 4-9     or a mutual plan provider; or
4-10                 (3)  transfers control, responsibility, or governance
4-11     of the assets, operations, or business of the nonprofit provider in
4-12     favor of a for-profit entity or a mutual plan provider.
4-13           (b)  Subsection (a)(1) or (2) of this section applies only
4-14     if:
4-15                 (1)  the fair market value of the assets of the
4-16     nonprofit provider involved in the proposed agreement or
4-17     transaction is at least 30 percent of the value of the total assets
4-18     of the nonprofit provider; or
4-19                 (2)  the fair market value of the assets of the
4-20     nonprofit provider involved in the proposed agreement or
4-21     transaction, when added to the fair market value of all assets of
4-22     the nonprofit provider that have been subject to a previous
4-23     agreement or transaction described by Subsection (a)(1), (2), or
4-24     (3) of this section that has been made during the two-year period
4-25     before the date on which the proposed agreement or transaction
4-26     becomes effective, is at least 35 percent of the value of the total
4-27     assets of the nonprofit provider.
 5-1           (c)  Subsection (a)(3) of this section applies only if:
 5-2                 (1)  the fair market value of the assets of the
 5-3     nonprofit provider with respect to which control, responsibility,
 5-4     or governance would be transferred under the proposed agreement or
 5-5     transaction, is at least 30 percent of the value of the total
 5-6     assets of the nonprofit provider;
 5-7                 (2)  the fair market value of the assets of the
 5-8     nonprofit provider with respect to which control, responsibility,
 5-9     or governance would be transferred under the proposed agreement or
5-10     transaction, when added to the fair market value of all assets of
5-11     the nonprofit provider that have been subject to a previous
5-12     agreement or transaction described by Subsection (a)(1), (2), or
5-13     (3) of this section that has been made during the two-year period
5-14     before the date on which the proposed agreement or transaction
5-15     becomes effective, is at least 35 percent of the value of the total
5-16     assets of the nonprofit provider;
5-17                 (3)  the gross revenues associated with business or
5-18     operations of the nonprofit provider with respect to which control,
5-19     responsibility, or governance would be transferred under the
5-20     proposed agreement or transaction is at least 30 percent of the
5-21     value of the gross revenues associated with all of the business or
5-22     operations of the nonprofit provider; or
5-23                 (4)  the gross revenues associated with business or
5-24     operations of the nonprofit provider with respect to which control,
5-25     responsibility, or governance would be transferred under the
5-26     proposed agreement or transaction, when added to the gross revenues
5-27     associated with the business or operations with respect to which
 6-1     control, responsibility, or governance has been transferred under a
 6-2     previous agreement or transaction described by Subsection (a)(3) of
 6-3     this section that has been made during the two-year period before
 6-4     the date on which the proposed agreement or transaction becomes
 6-5     effective, is at least 35 percent of the value of the gross
 6-6     revenues associated with all of the business or operations of the
 6-7     nonprofit provider.
 6-8           (d)  For purposes of applying Subsection (b) or (c)(1) or (2)
 6-9     of this section:
6-10                 (1)  the fair market value of assets of a nonprofit
6-11     provider involved in a previous agreement or transaction is
6-12     determined as of the time the previous agreement or transaction
6-13     became effective; and
6-14                 (2)  the fair market value of the total assets of the
6-15     nonprofit provider is determined as of the time the proposed
6-16     agreement or transaction would become effective.
6-17           (e)  For purposes of applying Subsection (c)(3) or (4) of
6-18     this section:
6-19                 (1)  the gross revenues associated with the business or
6-20     operations of a nonprofit provider with respect to which control,
6-21     responsibility, or governance are transferred under a previous
6-22     agreement or transaction are determined as of the time the previous
6-23     agreement or transaction became effective; and
6-24                 (2)  the value of the gross revenues associated with
6-25     all of the business or operations of the nonprofit provider is
6-26     determined as of the time the proposed agreement or transaction
6-27     would become effective.
 7-1           (f)  If a nonprofit provider is a health care system that
 7-2     owns or operates more than one licensed hospital, each separately
 7-3     licensed hospital is a nonprofit provider for purposes of applying
 7-4     this section and, for purposes of applying Subsections (b), (c),
 7-5     (d), and (e) of this section, only the assets and business or
 7-6     operations of the separately licensed hospital shall be considered.
 7-7           SECTION 5.  REQUIREMENTS FOR AGREEMENT OR TRANSACTION.  A
 7-8     nonprofit provider may not enter into an agreement or transaction
 7-9     described by Section 4 of this Act unless the agreement or
7-10     transaction:
7-11                 (1)  is in the public interest;
7-12                 (2)  does not directly or indirectly benefit an
7-13     officer, director, or employee of the nonprofit provider or another
7-14     private person or entity, such as through the granting of a stock
7-15     option to or an agreement not to compete with a private person or
7-16     entity;
7-17                 (3)  is not likely to adversely affect the availability
7-18     of health care services to  uninsured or underinsured individuals,
7-19     particularly uninsured or underinsured individuals with low
7-20     incomes, in the service area of the nonprofit provider and includes
7-21     sufficient safeguards to ensure that uninsured and underinsured
7-22     individuals have continued access to affordable care in the service
7-23     area;
7-24                 (4)  for a nonprofit provider that is a hospital,
7-25     ensures that the for-profit entity continues to provide charity
7-26     care at least at the same level required of the nonprofit provider
7-27     under Chapter 311, Health and Safety Code, at the time of the
 8-1     agreement or transaction; and
 8-2                 (5)  is consistent with the nonprofit provider's
 8-3     original purpose.
 8-4           SECTION 6.  AGREEMENT IN PUBLIC INTEREST.  (a)  An agreement
 8-5     or transaction is not in the public interest for purposes of
 8-6     Section 5(1) of this Act unless the nonprofit provider has taken
 8-7     appropriate steps to:
 8-8                 (1)  safeguard the value of assets held by the
 8-9     nonprofit provider for a charitable health care purpose; and
8-10                 (2)  ensure that the charitable health care assets
8-11     resulting from the agreement or transaction are irrevocably
8-12     dedicated to charitable health care purposes in the nonprofit
8-13     provider's service area.
8-14           (b)  For purposes of this section, "charitable health care
8-15     purpose" means a purpose that:
8-16                 (1)  serves unmet health care needs of residents of
8-17     this state, particularly with regard to uninsured and underserved
8-18     populations, including populations that are financially or
8-19     medically indigent as defined in Section 311.031, Health and Safety
8-20     Code; and
8-21                 (2)  focuses on promoting access to care and improving
8-22     quality of care.
8-23           SECTION 7.  DUE DILIGENCE REQUIRED.  In entering into an
8-24     agreement or transaction described by Section 4 of this Act, a
8-25     nonprofit provider shall use due diligence in:
8-26                 (1)  selecting the for-profit entity or mutual plan
8-27     provider with which the agreement or transaction is being made; and
 9-1                 (2)  negotiating the terms of the agreement or
 9-2     transaction.
 9-3           SECTION 8.  CHARITABLE HEALTH CARE ASSETS.  (a)  A nonprofit
 9-4     provider that enters into an agreement or transaction described by
 9-5     Section 4 of this Act shall establish the fair market value of the
 9-6     assets of the nonprofit provider. Subject to Subsections (d), (e),
 9-7     and (f) of this section, the charitable health care assets
 9-8     resulting from an agreement or transaction described by Section 4
 9-9     of this Act must be  irrevocably dedicated to a charitable health
9-10     care purpose and  distributed to an existing or newly created
9-11     charitable health care organization that will operate in the
9-12     service area of the nonprofit provider and that is designated to
9-13     receive the distributions.
9-14           (b)  An assessor who is not an employee of the nonprofit
9-15     provider and who is otherwise independent of the nonprofit provider
9-16     and of the for-profit entity or mutual plan provider with which the
9-17     agreement or transaction is being made  shall determine the fair
9-18     market value of the charitable health care assets.  In determining
9-19     the fair market value, the assessor shall consider market value,
9-20     investment or earnings value, net asset value, and a control
9-21     premium, if any. The nonprofit provider shall pay for the
9-22     assessment conducted under this subsection.  The nonprofit
9-23     provider, the for-profit entity or mutual plan provider with which
9-24     the agreement or transaction is being made, and the designated
9-25     charitable health care organization shall make  the report of the
9-26     assessor available to any person on request.
9-27           (c)  A portion of the consideration conveyed to the
 10-1    charitable health care organization may consist of stock of a
 10-2    for-profit entity that is a party to the agreement or transaction.
 10-3    Stock conveyed to the charitable health care organization in
 10-4    accordance with this subsection may not be subject to any
 10-5    requirements relating to the sale or transfer of the stock by the
 10-6    charitable health care organization, except to the extent required
 10-7    by federal law.  In addition, the agreement or transaction may not
 10-8    place unreasonable requirements on the sale or transfer of the
 10-9    stock that would adversely affect the value of the stock.
10-10          (d)  The charitable health care assets may be used to satisfy
10-11    a debt or similar obligation of the nonprofit provider that exists
10-12    at the time the agreement or transaction becomes effective.
10-13          (e)  In a case in which only a portion of the assets or
10-14    operations or business of a nonprofit provider is subject to an
10-15    agreement or transaction described by Section 4 of this Act, the
10-16    nonprofit provider is not required to distribute the charitable
10-17    health care assets and may satisfy the requirements of Section 6 of
10-18    this Act through continued use of the assets by the nonprofit
10-19    provider, provided that the assets are dedicated to a charitable
10-20    health care purpose in the nonprofit provider's service area.
10-21          (f)  In a case in which there is an affiliated nonprofit
10-22    provider in the service area of the nonprofit provider that can
10-23    satisfy the requirements of Section 6 of this Act, the nonprofit
10-24    provider is not required to distribute the charitable health care
10-25    assets and may satisfy the requirements of Section 6 of this Act
10-26    through continued use of the assets by the affiliated nonprofit
10-27    provider, provided that the assets are dedicated to a charitable
 11-1    health care purpose in the nonprofit provider's service area. For
 11-2    purposes of this subsection, nonprofit providers are affiliated
 11-3    nonprofit providers if they share common governance.
 11-4          SECTION 9.  DESIGNATED CHARITABLE HEALTH CARE ORGANIZATION.
 11-5    (a)  A designated charitable health care organization that receives
 11-6    a distribution of charitable health care assets under Section 8 of
 11-7    this Act, and each director, officer, and employee of the
 11-8    organization, must be independent of the for-profit entity or
 11-9    mutual plan provider with which the agreement or transaction
11-10    described by Section 4 of this Act is made and any affiliate of
11-11    that entity or provider.
11-12          (b)  The governing body of the charitable health care
11-13    organization may not, at any time, be composed of individuals a
11-14    majority of whom were officers, directors, or employees of the
11-15    nonprofit provider at the time an agreement or transaction
11-16    described by Section 4 of this Act was under consideration. This
11-17    subsection does not apply to a charitable health care organization
11-18    located in one or more rural counties with populations of less than
11-19    50,000.
11-20          (c)  A designated charitable health care organization shall
11-21    implement procedures to:
11-22                (1)  ensure that the charitable health care assets are
11-23    used as required by Section 6 of this Act;
11-24                (2)  avoid conflicts of interest;
11-25                (3)  prohibit grants benefiting an officer, director,
11-26    or employee of the charitable health care organization or directly
11-27    benefiting the for-profit entity or mutual plan provider with which
 12-1    the agreement or transaction described by Section 4 of this Act is
 12-2    made; and
 12-3                (4)  ensure that the members of the governing body of
 12-4    the charitable health care organization are representative of and
 12-5    reflect the diversity of the service area.
 12-6          (d)  The charitable health care organization shall:
 12-7                (1)  publish notice of:
 12-8                      (A)  the designation of the charitable health
 12-9    care organization to receive the assets and the amount of assets to
12-10    be received;
12-11                      (B)  the proposed mission and purpose of the
12-12    charitable health care organization;
12-13                      (C)  the governing structure of the charitable
12-14    health care organization; and
12-15                      (D)  the time, date, and place of the public
12-16    hearing to be held under Subdivision (2) of this subsection; and
12-17                (2)  hold at least one public hearing to obtain public
12-18    comment in the service area relating to the mission and purpose.
12-19          (e)  The notice required under Subsection (d)(1) of this
12-20    section must be published not later than the fifth day after the
12-21    date the charitable health care organization is designated to
12-22    receive the charitable health care assets under Section 8 of this
12-23    Act.  The hearing required under Subsection (d)(2) of this section
12-24    must be held not later than the 30th day after the date the
12-25    charitable health care organization is designated to receive the
12-26    charitable health care assets under Section 8 of this Act.
12-27          (f)  A designated charitable health care organization shall
 13-1    publish an annual report of its activities related to the use of
 13-2    the charitable health care assets.  The report must include, at
 13-3    minimum, a statement of the amount of money distributed by the
 13-4    charitable health care organization, the identity of each entity
 13-5    that received the money and a statement of the purpose for which
 13-6    the money was distributed to each entity, and any report required
 13-7    to be filed with the Internal Revenue Service that is a public
 13-8    document under state or federal law.  The report shall be made
 13-9    available to the public at the office of the charitable health care
13-10    organization.  The charitable health care organization shall
13-11    provide a copy of the report to the main public library in the
13-12    service area. The charitable health care organization shall publish
13-13    notice of the availability of the report. In this subsection,
13-14    "public library" has the meaning assigned by Section 441.122,
13-15    Government Code, but does not include a library operated by a
13-16    public school district or an institution of higher education.
13-17          SECTION 10.  NOTICE OF AGREEMENT OR TRANSACTION.  (a)  A
13-18    nonprofit provider that signs a letter of intent or any other
13-19    written agreement evidencing the intent to enter into an agreement
13-20    or transaction described by Section 4 of this Act shall notify the
13-21    attorney general and shall publish notice of that fact.
13-22          (b)  The notice to the attorney general must:
13-23                (1)  be made in writing not later than the earlier of:
13-24                      (A)  the fifth day after the date the letter of
13-25    intent or other written agreement evidencing intent is signed; or
13-26                      (B)  the 90th day before the date on which the
13-27    agreement or transaction is to become effective; and
 14-1                (2)  disclose the conditions under which the agreement
 14-2    or transaction will be made according to the best information
 14-3    available to the nonprofit provider.
 14-4          (c)  The notice provided to the attorney general under
 14-5    Subsection (b) of this section must state:
 14-6                (1)  the identity of the nonprofit provider and any
 14-7    nonprofit entity that owns or controls the nonprofit provider;
 14-8                (2)  the identity of the for-profit entity or mutual
 14-9    plan provider with which the proposed agreement or transaction is
14-10    to be made;
14-11                (3)  the identity of any other party to the proposed
14-12    agreement or transaction;
14-13                (4)  the terms of the proposed agreement or
14-14    transaction;
14-15                (5)  the value of consideration to be provided in
14-16    connection with the proposed agreement or transaction and the basis
14-17    on which this valuation is made;
14-18                (6)  the identity of any individual or entity who is an
14-19    officer, director, or affiliate of the nonprofit provider and a
14-20    statement as to whether each named individual or entity:
14-21                      (A)  has been promised future employment as a
14-22    result of the proposed agreement or transaction;
14-23                      (B)  has been a party to discussions relating to
14-24    future employment as a result of the proposed agreement or
14-25    transaction; or
14-26                      (C)  has any other direct or indirect economic
14-27    interest in the proposed agreement or transaction;
 15-1                (7)  the identity and credentials of the assessor or
 15-2    proposed assessor to be appointed under Section 8(b) of this Act
 15-3    and a statement as to whether the assessor has contracted with or
 15-4    performed services for the entity with which the proposed agreement
 15-5    or transaction is to be made; and
 15-6                (8)  the date on which the proposed agreement or
 15-7    transaction is to become effective.
 15-8          (d)  In addition to the information provided to the attorney
 15-9    general under Subsections (b) and (c) of this section, the
15-10    nonprofit provider shall provide to the attorney general a copy of
15-11    the report of the assessor appointed under Section 8(b) of this
15-12    Act.  The report must be provided to the attorney general not later
15-13    than the later of:
15-14                (1)  the date notice is made to the attorney general
15-15    under Subsection (b) of this section; or
15-16                (2)  the fifth day after the date the assessor
15-17    completes the report.
15-18          (e)  In addition to the notice required under Subsection (b)
15-19    of this section, the nonprofit provider shall notify the attorney
15-20    general of any material change in the agreement or transaction  or
15-21    any of the information required by Subsection (c) of this section
15-22    not later than the 30th day before the date the agreement or
15-23    transaction becomes effective.  The attorney general may waive the
15-24    requirement that the notice be provided within the time required by
15-25    this subsection if the attorney general finds the waiver is
15-26    appropriate.
15-27          (f)  The notice submitted to the attorney general under this
 16-1    section and any materials submitted with the notice are public
 16-2    information.  On the request of any person, the nonprofit provider
 16-3    shall make the information available at the business office of the
 16-4    nonprofit provider in the affected service area.
 16-5          (g)  The first publication of notice under this section must
 16-6    be made not later than the 90th day before the date the agreement
 16-7    or transaction would become effective and must state the address of
 16-8    the business office of the nonprofit provider in the affected
 16-9    service area and state that more detailed information concerning
16-10    the proposed agreement or transaction is available at the business
16-11    office.
16-12          SECTION 11.  PUBLIC HEARING.  (a)  Not later than the 45th
16-13    day after the date the attorney general receives the notice under
16-14    Section 10 of this Act, the nonprofit provider shall:
16-15                (1)  solicit written public comment; and
16-16                (2)  hold at least one public hearing to obtain public
16-17    comment in the service area of the nonprofit provider.
16-18          (b)  Not later than the 21st day before the date of the
16-19    public hearing, the nonprofit provider shall:
16-20                (1)  publish notice of the request for written comment
16-21    and of the time and place of the hearing; and
16-22                (2)  notify the county commissioners in each county in
16-23    the service area of the nonprofit provider of the request for
16-24    written comment and of the time and place of the hearing.
16-25          (c)  The notice provided under Subsection (b)(1) of this
16-26    section must state the address of the business office of the
16-27    nonprofit provider in the service area and must state that more
 17-1    detailed information concerning the proposed agreement or
 17-2    transaction is available at the business office.
 17-3          SECTION 12.  PUBLICATION OF NOTICE.  (a)  In any case in
 17-4    which a nonprofit provider or a designated charitable health care
 17-5    organization is required to publish notice under this Act, notice
 17-6    must be published in:
 17-7                (1)  the Texas Register; and
 17-8                (2)  one or more newspapers in accordance with
 17-9    Subsection (b) of this section.
17-10          (b)  Notice published under Subsection (a)(2) of this section
17-11    must be published at least once in a newspaper of general
17-12    circulation in the publication area described by Subsection (d) of
17-13    this section. If the publication area includes more than one
17-14    county, the nonprofit provider or charitable health care
17-15    organization must send a news release to a newspaper of general
17-16    circulation in each county included in the publication area.
17-17          (c)  If a newspaper of general circulation does not exist in
17-18    a county in the publication area, the nonprofit provider or
17-19    charitable health care organization shall send the notice to the
17-20    county commissioners court in the county.  The county commissioners
17-21    court may post the notice as it finds appropriate.
17-22          (d)  For purposes of this section, the publication area of a
17-23    nonprofit provider or a designated charitable health care
17-24    organization is:
17-25                (1)  the county in this state in which the provider or
17-26    organization maintains its registered agent;
17-27                (2)  if different from the county described in
 18-1    Subdivision (1) of this subsection, the county in this state in
 18-2    which the principal executive office of the provider or
 18-3    organization is located;
 18-4                (3)  any county that is contiguous to a county
 18-5    described by Subdivisions (1) and (2) of this subsection; and
 18-6                (4)  any county not described by Subdivision (1), (2),
 18-7    or (3) of this subsection in which the provider or organization
 18-8    maintains an office.
 18-9          SECTION 13.  ENFORCEMENT BY ATTORNEY GENERAL'S OFFICE.  (a)
18-10    The attorney general may bring an action in a district court of
18-11    Travis County for:
18-12                (1)  a temporary restraining order, a temporary
18-13    injunction, or a permanent injunction to prevent a nonprofit
18-14    provider from entering into an agreement or transaction described
18-15    by Section 4 of this Act;
18-16                (2)  a civil penalty in an amount not to exceed $10,000
18-17    for each day of a continuing violation of this Act; or
18-18                (3)  any other relief authorized under a statute or the
18-19    common law for conduct that violates this Act.
18-20          (b)  In an action brought under this section in which the
18-21    attorney general prevails, the court may award to the attorney
18-22    general the costs of the suit and attorney's fees.
18-23          SECTION 14.  PENALTIES UNDER LICENSING LAW.   A nonprofit
18-24    provider who fails to comply with this Act, the successor in
18-25    interest of a nonprofit provider who fails to comply with this Act,
18-26    or a designated charitable health care organization that fails to
18-27    comply with this Act is subject to:
 19-1                (1)  revocation or suspension of the license or
 19-2    certificate of authority of the provider, successor in interest, or
 19-3    organization, in accordance with the law regulating the entity; or
 19-4                (2)  administrative or civil penalties, to the extent
 19-5    that the law regulating the entity authorizes those penalties for a
 19-6    violation of that regulatory law.
 19-7          SECTION 15.  EFFECTIVE DATE.  This Act takes effect September
 19-8    1, 2001.
 19-9          SECTION 16.  TRANSITION.  (a)  This Act applies only to:
19-10                (1)  an agreement described by Section 4 of this Act
19-11    that is entered into on or after September 1, 2001; or
19-12                (2)  a transaction described by Section 4 of this Act
19-13    that  is made pursuant to an agreement entered into on or after
19-14    September 1, 2001.
19-15          (b)  An agreement described by Section 4 of this Act that is
19-16    entered into before September 1, 2001, and a transaction described
19-17    by Section 4 of this Act that is made pursuant to an agreement
19-18    entered into before September 1, 2001, are governed by the law as
19-19    it existed immediately before the effective date of this Act and
19-20    that law is continued in effect for that purpose.