Delaware General Assembly

Signed 7/12/11

The General Assembly has ended, the current status is the final status.

6/21/11

Blevins

Rep. B. Short

Sen. F Simpson
Reps. Gilligan, Hocker, D. Short

AN ACT TO AMEND TITLES 18 AND 29 RELATING TO NOT FOR PROFIT HEALTH CARE CONVERSIONS.

This bill corrects certain flaws in Delaware’s Not-for-profit Healthcare Conversion Act (the “Act”) enacted in 2004. The bill clarifies the General Assembly’s intent that the Act does not consider a Delaware not-for-profit healthcare entity affiliation with another not-for-profit entity to be a “not for profit healthcare conversion.” The Act has recently been interpreted by the Delaware Attorney General as requiring that result in a specific transaction involving a not-for-profit Delaware health service corporation seeking to affiliate with another not-for-profit company, where both entities will retain their not-for-profit status post affiliation. The bill corrects language in the Act that on its face requires the same result for any not-for-profit entity or charity that decides to dispose of its reserves or control by charter change or otherwise, even if it is not a health care-related entity, and even if the change involves another not-for-profit entity. In the event of a Not-for-profit conversion, the bill requires an annual financial report to the Secretary of State. Also, this bill adds a new §6310 to Title 18 that ensures that change of control transactions involving Delaware health service corporations do not result in the dissipation or improper use of the reserves or surplus of such health service corporation.

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