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.