SB243

By Senator Reed

ENROLLED, An Act,

Relating to universities; to enact the University Authority Act of 2016, to authorize constitutionally created public universities and public universities operating schools of medicine to form a new type of public corporation to be called an authority; to express legislative intent; to establish procedures for incorporation of authorities by universities; to prescribe requirements for and powers of a board of directors and officers of an authority; to prescribe powers of an authority, which includes the power to form university affiliates; to authorize authorities to exercise their powers even if the exercise of such powers would be deemed anticompetitive or monopolistic under federal or state antitrust laws; to grant authorities the power of eminent domain; to authorize authorities to issue obligations such as bonds, notes, and other evidences of indebtedness; to authorize liens on the revenues and assets of an authority or a university affiliate; to provide that obligations of an authority are not debts or other obligations of the state, any university, or any other governmental entity or public corporation; to provide that neither the state nor the sponsoring university shall act to impair the obligations of an authority; to provide that obligations issued by an authority are legal investments for trustees and other fiduciaries in the state; to authorize certain remedies upon default by an authority with respect to its obligations; to exempt authorities and university affiliates from state taxation; to exempt indebtedness issued by an authority or university affiliate from state taxation; to require each authority to provide annual audits to the sponsoring university; to authorize other public entities in the state to support authorities or university affiliates with tax revenue or otherwise; to make further findings with respect to competitive impact and antitrust immunity of authorities and university affiliates; to clarify that the act is not intended to extend sovereign immunity where otherwise not applicable under existing law or to restrict sovereign immunity where otherwise applicable under existing law; to provide that authorities and university affiliates may be entitled to certain damage limitations only under specified circumstances; to provide for reincorporation of certain existing public corporations as authorities under the act; to provide for disposition of excess revenues of an authority; to provide procedures for dissolution of an authority; to provide that the provisions of the act are cumulative; and to provide the provisions of the act are severable.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and may be cited as the "University Authority Act of 2016."

Section 2. For purposes of this act, the following terms shall have the following meanings:

(1) ACADEMIC MEDICAL CENTER. The teaching, research, and clinical facilities provided, established, or operated by a constitutionally created public university in the state or a university that operates a school of medicine.

(2) AUTHORITY. A public corporation organized pursuant to the provisions of this act.

(3) BOARD. The board of directors of an authority.

(4) DIRECTOR. A member of the board of an authority.

(5) GOVERNMENTAL ENTITY. Any of the state, a county, a municipality, or any department, agency, board, or commission of the state, a county, or a municipality.

(6) HEALTH CARE FACILITY. All property or rights in property, real or personal, tangible or intangible, useful to an authority in its operations, including without limitation, the following:

a. Facilities necessary or desirable to the operation of an academic medical center, one or more health sciences schools, hospitals, public health care clinics, treatment centers, emergency facilities, outpatient facilities, laboratories, service or support facilities, and any other facilities related to the operation of any of the foregoing.

b. Biomedical or public health research establishments of any type.

c. Ambulance, helicopter, and other similar facilities and services for the transportation of sick or injured persons.

d. Land necessary or desirable to any of the foregoing, whether presently or in the future.

e. Machinery, equipment, furniture, and fixtures useful or desirable in the operation of any of the foregoing.

Health care facilities may serve physical or mental health. A determination by a board that an asset constitutes a health care facility shall be conclusive, absent manifest error.

(7) HEALTH SCIENCES SCHOOL. Any school of medicine, dentistry, nursing, pharmacy, optometry, ophthalmology, and any other health care-related educational program operated or provided by a university in this state.

(8) INDEBTEDNESS. Bonds, notes, certificates of indebtedness, debt securities, capital lease agreements, or any other evidence of indebtedness.

(9) NONPROFIT ORGANIZATION. Any nonprofit corporation, limited liability company, partnership, or other form of business organization in which no part of the income or profit is distributable to any individual or entity other than a university, an authority, a governmental entity, a public corporation, or a nonprofit corporation that is an organization described in Section 501(c)(3) of the Internal Revenue Code.

(10) PUBLIC CORPORATION. A public corporation organized by the state, a county, or a municipality, whether acting alone or jointly, pursuant to state law.

(11) SECURITY DOCUMENT. A trust indenture, loan agreement, lease agreement, mortgage, security instrument or agreement, or other document securing any indebtedness or other obligation of an authority in favor of the holder or holders of any such indebtedness or other obligation or a trustee for such holders.

(12) SPONSORING UNIVERSITY. The university that authorizes the incorporation of an authority.

(13) UNIVERSITY. A constitutionally created public university in the state or a public university in the state that operates a school of medicine.

(14) UNIVERSITY AFFILIATE. Any public corporation or nonprofit organization that is controlled, directly or indirectly, by a university or an authority. A university or authority controls a public corporation or nonprofit organization if it: Owns a majority of any stock, membership interests, partnership interests, or other similar interests, if any, in such entity; has the right or power to appoint a majority of the members of the governing body of the entity; and has the right to distribution of a majority of the assets of the entity upon dissolution. A university or authority may control an entity directly or indirectly through one or more entities each of which qualifies as a university affiliate. Notwithstanding control by a university or authority, an entity is not a university affiliate if any individual or for-profit entity owns any interest in the entity or has the right or power to appoint one or more members of the governing body of the entity or if the mission of the entity is not consistent with the public health mission of a university.

Section 3. (a) In order to incorporate an authority, the sponsoring university shall adopt a resolution containing at least the following provisions:

(1) A finding that it is necessary, desirable, and in the best interests of the sponsoring university that the proposed authority be incorporated.

(2) Approval of the form of articles of incorporation, which shall comply with the provisions of Section 4 of this act.

(3) Authorization to proceed to form the proposed authority by executing the articles of incorporation approved by the sponsoring university and filing the same with the Secretary of State.

(b) A university may incorporate more than one authority if it determines that each authority promotes the public health mission of the university.

Section 4. (a) In addition to any other matters relating to the authority that the sponsoring university may choose to insert and that are not inconsistent with state law, the articles of incorporation of an authority shall include the following provisions:

(1) The name of the authority, which shall include the word "Authority" and shall include words identifying the sponsoring university.

(2) The name of the sponsoring university and the date on which the governing body of the sponsoring university adopted a resolution authorizing the organization of the authority.

(3) The name and address of the registered agent of the authority.

(4) A statement that the authority is organized pursuant to the provisions of this act.

(5) A statement that the authority shall exercise all powers provided by law, unless the exercise by the authority of any of its powers hereunder is limited in any way, in which case a statement of such limitations on the powers of the authority shall be included.

(6) A statement that the duration of existence of the authority shall be perpetual, unless the sponsoring university authorizes a shorter duration.

(7) The number of directors, which shall be an odd number not less than three, and the duration of their respective terms of office, which shall not be in excess of six years.

(8) Provisions for appointing or removing directors of the authority, subject to the provisions of Section 6; provided, however, that if no such provisions are specified in the articles of incorporation, all directors of an authority shall be appointed or elected by the sponsoring university and shall be subject to removal by the sponsoring university at any time, with or without cause.

(b) The articles of incorporation shall be executed as provided in the resolution authorizing incorporation of the authority.

(c) When the articles of incorporation are filed for record with the Secretary of State, there shall be attached to it all of the following:

(1) A certified copy of the resolution of the sponsoring university authorizing the incorporation of the authority.

(2) A certificate of the Secretary of State confirming that the name proposed for the authority is not identical to that of any other corporation organized under state law or so nearly similar thereto as to lead to confusion and uncertainty.

(d) Upon the filing for record of the articles of incorporation and the documents required by subsection (c) with the Secretary of State, the authority shall come into existence and shall constitute a public corporation under the name set forth in its articles of incorporation. The Secretary of State shall thereupon issue a certificate of incorporation to the authority and shall record the articles of incorporation in an appropriate book in his or her office.

Section 5. (a) The articles of incorporation of any authority may be amended by filing articles of amendment with the Secretary of State, but only with the approval of both the board of the authority and the sponsoring university, in the manner provided in this section.

(b) In order to amend the articles of incorporation, the following steps shall be completed:

(1) The board of the authority shall first adopt a resolution proposing articles of amendment.

(2) After the adoption by the board of a resolution approving articles of amendment, the authority shall file with the sponsoring university a written request for adoption of a resolution approving the proposed amendment.

(3) As promptly as may be practicable after the receipt of the request from the authority, the sponsoring university shall review the application and shall adopt a resolution either approving or denying the articles of amendment as proposed by the authority.

(c) Within 30 days following the approval of the articles of amendment by the sponsoring university, the president or vice president of the authority shall sign and file for record in the office of the Secretary of State the following items:

(1) The original articles of amendment.

(2) A certified copy of each resolution approving the articles of amendment.

(d) Upon the filing for record of the documents required by subsection (c), the articles of amendment shall become effective. The Secretary of State shall thereupon record the articles of amendment in an appropriate book in his or her office.

(e) The articles of amendment of an authority may amend and restate the articles of incorporation of an authority if approved in accordance with this section.

(f) Notwithstanding the provisions of this section, the name and address of the registered agent of an authority may be changed by the authority without following the procedure set forth in this section. An authority may use any appropriate form promulgated by the Secretary of State for this purpose.

Section 6. (a) Each authority shall have a board of directors composed of the number of directors provided in the articles of incorporation.

(b) All powers of an authority shall be exercised by the board or pursuant to its authorization.

(c) Except for ex-officio directors specified in the articles of incorporation, all directors of an authority shall be elected or appointed by the sponsoring university. The articles of incorporation may provide that specified officers or employees of the sponsoring university shall be ex-officio directors of an authority, so long as a majority of the directors are elected or appointed by the sponsoring university.

(d) The articles of incorporation may provide that a governmental entity, a public corporation, or a nonprofit organization may nominate one or more directors of an authority, provided that the number of directors elected or appointed by the sponsoring university without nomination may never be less than a majority of the directors, and the sponsoring university shall not be required to elect or appoint any such nominee. If the sponsoring university does not elect or appoint a nominee, the nominating entity shall provide an alternate nominee for consideration by the sponsoring university.

(e) The appointed membership of the board of an authority shall be inclusive and reflect the racial, gender, geographic, and economic diversity of the state.

(f) Unless the articles of incorporation provide the method for removing directors, all directors may be removed by the sponsoring university at any time, with or without cause.

(g) If, at the expiration of any term of office of any director, a successor has not been elected or appointed as provided in the articles of incorporation, then the director whose term of office has expired shall continue to hold office until his or her successor is elected or appointed.

(h) Each director shall serve without compensation but may be reimbursed for expenses actually incurred by him or her in connection with the performance of his or her duties.

(i) A majority of directors shall constitute a quorum for the transaction of business of the board, and any meeting of the board may be adjourned from time to time by a majority of the directors present. No vacancy in the membership of the board shall impair the right of a quorum to exercise all the powers and perform all the duties of the board.

(j) The board shall adopt and maintain bylaws, not inconsistent with the provisions of this act or the authority's articles of incorporation, for the regulation and conduct of its affairs and the operation of the authority. The bylaws of the board may provide for such committees as the board deems necessary or desirable, including without limitation an executive committee that is empowered to act on behalf of the board. The bylaws may authorize telephonic or video conference meetings of the board or any committee of the board.

(k) The board shall hold regular meetings at such times as may be provided in the bylaws of the authority, and may hold other meetings at any time and from time to time upon such notice as may be required by the bylaws of the authority.

(l) All resolutions adopted by the board shall constitute actions of the authority, and all proceedings of the board shall be reduced to writing, shall be signed by the secretary of the authority, and shall be recorded in permanent physical or electronic storage. Copies of the proceedings, when certified by the secretary of an authority, shall be received in all courts as prima facie evidence of the matters and things therein certified.

(m) The composition of the board of directors of an authority shall be presumed valid absent a final determination by a court of competent jurisdiction that the board is not constituted in good faith by the sponsoring university.

Section 7. (a) The officers of an authority shall consist of a president, a vice president, a secretary, a treasurer, and other officers and assistant officers as the board deems necessary or desirable. The president and the vice president of the authority shall be a member of the board. The secretary, the treasurer, and any other officers of the authority need not be a director.

(b) The president and the vice president of the authority shall be elected by the board as provided in the bylaws of the authority, and the secretary, the treasurer, and the other officers of the authority shall be elected by or pursuant to the authorization of the board for such terms as it deems advisable.

(c) The duties of the president, vice president, secretary, and treasurer shall be those as are customarily performed by such officers in nonprofit corporations. The duties of any other officers of the authority shall be prescribed by the board or pursuant to its authorization.

Section 8. (a) An authority shall have and may exercise any power granted nonprofit corporations under Title 10A, Code of Alabama 1975, together with all powers incidental thereto or necessary or desirable to the discharge thereof, including, without limitation, the following specific powers:

(1) To adopt, maintain, and amend bylaws and a corporate seal.

(2) To sue and, subject to the limitations herein, be sued; provided, however, that no authority entitled to sovereign immunity shall be denied such immunity.

(3) To acquire, construct, equip, and operate those health care facilities it considers necessary or desirable.

(4) To enter into contracts and agreements, borrow money, incur indebtedness, and issue bonds, notes, debt securities, or any other evidence of indebtedness.

(5) To pledge the general credit of the authority or any revenues or income of the authority to repayment of any of its indebtedness.

(6) To mortgage or pledge its health care facilities or its other assets or any part thereof, whether then owned or thereafter acquired, as security for its indebtedness.

(7) To lend money to, to assume the indebtedness of, or to guarantee the indebtedness of any other authority, governmental entity, public corporation, or nonprofit organization.

(8) To create, establish, acquire, operate, or support subsidiaries and affiliates, either for-profit or nonprofit, to assist an authority in fulfilling its purposes.

(9) To participate as a shareholder in a corporation, as a joint venturer in a joint venture, as a general or limited partner in a general or limited partnership, as a member of a nonprofit corporation, or as a member of any other lawful form of business organization, that provides health care or engages in activities related thereto; provided, however, that a business organization with for-profit ownership shall not qualify as a university affiliate under this act.

(10) To make and arrange for loans, contributions to capital, and other debt and equity financing for the activities of any lawful form of business organization of which the authority is a member, and to guarantee loans and any other obligations for such purpose.

(11) To enter into any swap agreement, subject to the requirements of Article 3 of Chapter 1 of Title 41, Code of Alabama 1975.

(12) To provide for and support the educational programs of any university or any other two-year college or four-year college or university in the state.

(13) To establish, collect, and alter charges for services rendered and supplies furnished by it.

(14) To contract for or to accept any gifts, grants, endowments, or any other aid in any form from the federal government, a governmental entity, or any public corporation, or any other source, or any combination thereof, and to comply with the terms and conditions thereof.

(15) To invest its funds in any investment authorized by the sponsoring university for investment of its own funds or in any investment permitted or authorized for state-regulated insurance companies, including, without limitation, investments permitted for domestic insurers and health maintenance organizations pursuant to Title 27, Code of Alabama 1975.

(16) To seek protection of the federal bankruptcy laws by filing a petition in any United States Bankruptcy Court located in the state.

(17) To organize, or to own an interest in, any other corporation, partnership, limited liability company, joint venture, or other form of business organization, whether for-profit or nonprofit, in furtherance of its public health mission.

(18) To engage in arrangements, contracts, information sharing, and other collaborative activities with public or private entities and individuals, including, without limitation: joint ventures, joint purchasing arrangements, joint negotiations with physicians, hospitals and payors (whether such negotiations result in separate or combined agreements), leases, and agreements which involve delivery system network creation or operation.

(b) Nothing herein shall be construed as granting to an authority the power to levy any taxes.

(c) Nothing herein shall be construed as authorizing an authority to convey substantially all of its assets in a single transaction or series of transactions without authorization from the sponsoring university.

(d) Any of the powers granted hereunder may be exercised by an authority in such manner as it may determine to be consistent with the purposes of this act, notwithstanding that, as a consequence of such exercise of powers it engages in, activities may be deemed anticompetitive or result in the acquisition or maintenance of monopoly power in some relevant market within the meaning of state and federal antitrust laws and notwithstanding that these activities may have the effect of displacing competition in the provision of hospital, physician, or other health care-related services.

Section 9. An authority shall have, in addition to all other powers granted by this act, the same power of eminent domain as is vested by law in the sponsoring university under Section 18-1A-295, Code of Alabama 1975.

Section 10. (a) An authority from time to time may borrow money or incur indebtedness and issue bonds, notes, or other evidence of indebtedness in such principal amounts as the board determines by resolution to be necessary, desirable, and in the best interests of the authority in order to provide funds to carry out its corporate powers. Indebtedness may be incurred for any lawful purpose of the authority, including, without limitation, any of the following:

(1) Indebtedness to finance the acquisition or construction of health care facilities.

(2) Indebtedness to provide working capital or funds for operating expenses.

(3) Indebtedness to refund, extend, refinance, or restructure any indebtedness of the authority or any indebtedness assumed or guaranteed by the authority.

(b) Indebtedness may be any of the following or any combination thereof:

(1) A general obligation of the authority to the payment of which its full faith and credit is pledged.

(2) Payable solely out of specific revenues of the authority or any of its facilities.

(3) Secured by a pledge of any tax levied by a governmental entity that has been made available to an authority or any of its facilities.

(c) Indebtedness may provide for any of the following or any combination thereof:

(1) Provide for no interest.

(2) Provide for current interest.

(3) Provide for capitalized interest.

(4) Provide for accretion or other increase in principal amount in lieu of interest.

(d) Any resolution authorizing the issuance of any indebtedness shall create a contract with the holders of the indebtedness issued thereby.

(e) Evidence of indebtedness shall be executed and delivered as provided in the resolution of the board authorizing the same.

(f) Indebtedness may be sold at public or private sale or in exchange for indebtedness of the authority at such price or on such terms as the board shall determine.

(g) All indebtedness of an authority shall be subject to redemption or prepayment on such terms as the board shall determine.

(h) No indebtedness of an authority shall mature more than 40 years from the date of issuance, without regard to whether the indebtedness is refunding, extending, refinancing, or restructuring existing indebtedness.

(i) The authority may, subject to security documents or other agreements with holders as may then exist, purchase its indebtedness in the open market, through intermediaries or directly from the holder of an obligation, with any funds available therefor. Any obligation so purchased may be cancelled by the authority or may be resold, as authorized by the board.

Section 11. (a) Any pledge of any revenues of an authority or university affiliate, including, without limitation, tax revenues made available to an authority, shall be valid and binding from the time it is made, and the revenues or taxes so pledged and thereafter received by the authority shall immediately become subject to the lien of that pledge without any physical delivery thereof or further act. The lien of that pledge shall be valid and binding against all parties having claims of any kind against the authority, irrespective of whether the parties have actual notice thereof. The resolution or security document establishing a pledge of revenues may provide that the lien established extends, on a pari passu basis, to any additional indebtedness issued as a parity obligation in accordance with the terms of the financing document.

(b) Any security document relating to any real property, personal property, fixtures, or other tangible property of an authority may be filed in the office of the judge of probate of the county in which the property to be secured is located, and the lien of the security document shall be valid and binding against all parties having claims of any kind against the authority, irrespective of whether any person has actual notice thereof, from the time the security document is so filed, with respect to all property subject thereto, including, without limitation, after-acquired property.

Section 12. (a) All agreements and covenants undertaken, and all indebtedness issued, by an authority shall be solely and exclusively an obligation of the authority and, except as otherwise provided in a written agreement in accordance with Section 17, shall not create an obligation or debt of the state, any university, or any other governmental entity or public corporation within the meaning of any constitutional or statutory provision.

(b) Neither the directors nor any officer of an authority executing indebtedness issued pursuant to this act shall be personally liable for such indebtedness by reason of the execution or issuance thereof.

(c) The state and the sponsoring university do hereby pledge to and agree with the holders of any indebtedness issued under this act that neither the state nor the sponsoring university will limit or alter the rights hereby vested in the authority to fulfill the terms of any indebtedness or related security documents made with the holders thereof or in any way impair the rights and remedies of the holders until such indebtedness, together with the interest thereon, and all costs and expenses in connection with any action or proceeding by or on behalf of the holders, are fully met and discharged. An authority is authorized to include this pledge and agreement of this state or sponsoring university in any agreement with the holders of its indebtedness.

Section 13. Indebtedness issued under the provisions of this act is hereby made a legal investment for savings banks and insurance companies organized under state law and for trustees, executors, administrators, guardians, persons, or organizations acting in a fiduciary capacity, unless otherwise directed by a court having jurisdiction or by a document providing fiduciary authority. Any governmental entity or public corporation is authorized, in its discretion, to invest any available funds in securities of the authority.

Section 14. (a) If there should be any default in the payment of the principal of, or interest on, any indebtedness issued under this act or of any agreements contained in any security document, and the period for cure of the default has passed, then the holder of the indebtedness and the trustee under any security document, or any one or more of them, subject to the terms of the financing documents authorizing the indebtedness or any security document applicable thereto:

(1) May, by mandamus, injunction, or other proceedings, compel performance of any covenant or agreement of the authority contained in any applicable resolution or security document by its board or its officers.

(2) May be entitled to a judgment against the authority for the principal of and interest on the indebtedness so in default, together with all reasonable costs of collection.

(3) May, in the event the indebtedness is secured by a mortgage on, or security interest in, any physical properties of the authority, foreclose the mortgage or pledge, exercise any powers of sale contained in the security documents, or exercise any possessory or other similar rights as are provided for in the financing documents or security document applicable to the indebtedness.

(4) Regardless of the sufficiency of the security for the obligation in default, may be entitled to the appointment of a receiver upon order of a court of competent jurisdiction who shall, upon such appointment, assume all powers granted in the applicable financing documents or security document applicable to the obligation in default, provided that the income derived from any activity undertaken by a receiver under this section shall be expended solely in accordance with the applicable provisions of any orders of the court by which such receiver is appointed, and absent judicial direction, of the applicable financing document or security document applicable to the obligation in default.

(b) The remedies specified in this section shall be cumulative to all other remedies that may otherwise be available, by law or contract, for the benefit of the holders of indebtedness of an authority.

Section 15. Notwithstanding any provision of law to the contrary:

(1) Any indebtedness issued by an authority or a university affiliate, and the income therefrom, including any profit from the sale thereof, shall be exempt from taxation by the state or other governmental entity of the state.

(2) All properties of an authority or a university affiliate, whether real, personal, or mixed, and the income therefrom, shall be exempt from any and all taxation by any governmental entity.

(3) An authority shall not be obligated to pay or allow to be paid any fees, taxes, costs, or charges of any nature to the Secretary of State or to any judge of probate of any county in respect of the filing or recording of any document.

(4) The gross proceeds of the sale of any property used in the business or activities of an authority, or in the acquisition, construction, renovation, or equipping of any health care facilities for an authority or a university affiliate, regardless of whether the sale is made directly to an authority or to a university affiliate or to any contractor or agent thereof, shall be exempt from all sales and use taxes levied by any governmental entity, including, without limitation, any similar privilege, license, or excise tax.

Section 16. (a) Each authority shall engage a firm or firms of certified public accountants to conduct an annual audit of the financial affairs of the authority. Each audit shall be conducted in accordance with generally accepted accounting principles.

(b) The board shall submit all audits required by subsection (a) to the sponsoring university as promptly as practicable after the end of each fiscal year of the authority.

Section 17. (a) The state, any university, any governmental entity, and any public corporation is hereby authorized to give, transfer, convey, or sell to any authority or a university affiliate, with or without consideration:

(1) Any of its health care facilities and other properties, real or personal, and any funds and assets, tangible or intangible, relative to the ownership or operation of any such health care facilities, including any certificates of need, assurances of need, or other similar rights appertaining or ancillary thereto, irrespective of whether they have been exercised; and

(2) Any taxes, revenues, or funds owned or controlled by it.

(3) Nothing in this Act shall be construed as allowing an authority or university affiliate to be exempt from compliance with all applicable laws and regulations of the State Certificate of Need program and the Alabama State Health Planning and Development Agency.

(b) The state, any governmental entity, any university, or any public corporation may pledge its full faith and credit to or for the benefit of an authority or a university affiliate or may pledge any revenues that it is legally entitled to pledge to or for the benefit of an authority or university affiliate.

(c) An authority or university affiliate shall constitute a "hospital corporation" as that term is used in Title 22, Chapter 21, Article 4, Division 2, Code of Alabama 1975, and any county otherwise authorized to do so may designate any authority or university affiliate as the agency of that county to acquire, construct, equip, operate, and maintain public hospital facilities in that county. The authority shall, if so designated, receive the proceeds from any special public hospital tax available in that county.

Section 18. In support of and in furtherance of the powers granted in Section 8 of this act, the Legislature hereby finds and declares all of the following:

(1) Authorities organized under this act and its university affiliates are performing essential public functions on behalf of the state, the sponsoring university, and other governmental entities in the state.

(2) The nature and scope of the powers conferred on authorities and their university affiliates by this act are such as may compel each authority and each university affiliate, in the course of exercising its powers or by virtue of such exercise of such powers, to engage in activities itself or in collaboration with public or private entities and individuals that may be characterized as anticompetitive or may result in the acquisition or maintenance of monopoly power within the meaning of state and federal antitrust laws or otherwise may have the effect of displacing competition in the provision of hospital, physician, or other health care-related services.

(3) In carrying out its public health mission through the exercise of the powers granted by this act, including, without limitation, the collaborative activities expressly authorized by this act, an authority and its university affiliates, as well as the public or private entities and individuals with which they collaborate, shall be immunized from liability under the federal and state antitrust laws to the fullest extent allowed by law.

(4) As an expression of the public policy of the state with respect to the displacement of competition in the field of health care, each authority and each university affiliate, when exercising its powers under this act, acts as an agency or instrumentality of its university and as a political subdivision of the state, and as such, neither an authority nor its university affiliate shall be subject to what has come to be known in relevant antitrust jurisprudence as "active supervision" by the state in order to enjoy immunity from the application of state and federal antitrust laws.

Section 19. (a) This act is not intended to extend or grant sovereign immunity to any authority or university affiliate that is not entitled to sovereign immunity under applicable law. Nor is this act intended to limit or remove sovereign immunity for any authority or university affiliate that is entitled to sovereign immunity under applicable law.

(b) An authority or university affiliate not entitled to sovereign immunity shall be entitled to the benefits of the damage limitation for tort actions provided in Chapter 93 of Title 11 of the Code of Alabama 1975, if the authority or university affiliate meets both of the following requirements:

(1) An entity that is a governmental entity within the meaning of Section 11-93-1, Code of Alabama 1975, participates in the organization of the authority or university affiliate. A governmental entity participates in the organization of an authority or university affiliate if the governmental entity enters into an affiliation agreement or similar agreement with a university providing for the organization of the authority or university affiliate.

(2) The authority or university affiliate receives public support for its operations, including, without limitations, taxes allocated to the authority or university affiliate, or appropriations from the state or any other governmental entity that benefit the authority or university affiliate.

(c) As further evidence of the intent expressed in this act, the Legislature declares that:

(1) An authority or university affiliate described in subsection (b) constitutes a "governmental entity" within the meaning of Section 11-93-1, Code of Alabama 1975.

(2) Claims for money damages against an authority or university affiliate described in subsection (b) constitutes "claims" within the meaning of Section 11-93-1, Code of Alabama 1975.

Section 20. Notwithstanding any other provision of law to the contrary:

(1) Each authority shall be exempt from all laws of the state governing usury or prescribing or limiting interest rates, including, without limitation, the provisions of Title 8, Chapter 8, Code of Alabama 1975.

(2) Authorities, university affiliates, members of the governing bodies of authorities and university affiliates, and officers and employees of authorities and university affiliates shall not be subject to state ethics laws, including, without limitation, the provisions of Title 36, Chapter 25, Code of Alabama 1975.

(3) Meetings of the board of an authority and any committee thereof shall not be subject to public meeting or notice requirements, including, without limitation, the provisions of Title 36, Chapter 25A, Code of Alabama 1975.

(4) Deposits of authorities and university affiliates are entitled to the benefits of the Security for Alabama Funds Enhancement Act, codified at Title 41, Chapter 14A, Code of Alabama 1975, and therefore, authorities and university affiliates are each a covered public entity as such term is used in that act.

(5) Authorities and university affiliates shall not be subject to the competitive bid laws of the state, including, without limitation, the provisions of Title 41, Chapter 16, Articles 2, 3, and 3A, Code of Alabama 1975.

(6) Authorities and university affiliates shall not be subject to examination by the state Department of Examiners of Public Accounts.

(7) Authorities, university affiliates, and the employees thereof shall not be required to participate in any retirement plan, public pension plan, or health insurance plan administered by the state, or any agency of the state, unless an authority or university affiliate elects to join the plan and is otherwise eligible under applicable law to join the plan.

(8) No expenditure authorized or permitted by the provisions of this act shall be considered to be a lending of credit or a granting of public money or thing of value to or in aid of any individual, association, or corporation within the meaning of any constitutional or statutory provision.

(9) For purposes of The Volunteer Service Act, an authority shall be considered a governmental entity, and a university affiliate shall be considered a nonprofit organization so as to provide volunteers with the protections of Section 6-5-336, Code of Alabama 1975. Terms used in this subdivision shall have the meanings assigned in Section 6-5-336, Code of Alabama 1975.

Section 21. (a) Any public corporation that meets the criteria specified in subsection (b) may reincorporate as an authority under this act, and become subject to and governed by this act, as provided in this section.

(b) A public corporation may reincorporate under this section if it satisfies both of the following:

(1) The public corporation is a health care authority incorporated or reincorporated under Title 22, Chapter 21, Articles 11 and 11A, Code of Alabama 1975.

(2) The public corporation was incorporated with the approval of a university.

(c) In order to reincorporate a qualifying public corporation as an authority, the following steps shall be completed:

(1) The board of directors of the qualifying public corporation shall first adopt a resolution proposing articles of reincorporation.

(2) After the adoption by the board of a resolution approving articles of reincorporation, the qualifying public corporation shall file with the sponsoring university a written request for adoption of a resolution approving the proposed reincorporation.

(3) As promptly as may be practicable after the receipt of the application from the qualifying public corporation, the university that formed the qualifying public corporation shall review the application and shall adopt a resolution either approving or denying the articles of reincorporation as proposed by the authority.

(d) Within 30 days following the approval of the articles of reincorporation by the university that formed the qualifying public corporation, the president or vice president of the authority shall sign and file for record in the office of the Secretary of State all of the following items:

(1) The original articles of reincorporation.

(2) A certified copy of each resolution approving the articles of reincorporation.

(3) A certificate of the Secretary of State confirming that the name proposed for the authority is not identical to that of any other corporation organized under state law or so nearly similar thereto as to lead to confusion and uncertainty.

(e) Upon the filing for record of the articles of reincorporation and the documents required by subsection (d), the articles of reincorporation shall become effective and the authority shall immediately be vested with all powers and privileges of this act. The Secretary of State shall thereupon record the articles of reincorporation in an appropriate book in his or her office.

(f) A university may not reincorporate a public corporation without the consent of the board of directors of the public corporation.

(g) The articles of reincorporation of an authority may amend and restate the articles of incorporation of the qualifying public corporation if approved in accordance with this section.

(h) Reincorporation of a qualifying public corporation as an authority shall not impair the rights of creditors nor impair the provisions of any contract of a reincorporated public corporation. Upon reincorporation, all assets, liabilities, certificates of need, permits, licenses, or governmental approvals shall immediately transfer from the reincorporated public corporation and vest in the authority. Upon notice of reincorporation, all state regulatory bodies shall cooperate with the authority in order to transfer all certificates of need, permits, licenses, or governmental approvals from the reincorporated public corporation to the authority.

Section 22. No part of the net earnings of an authority remaining after payment of its expenses shall inure to the benefit of any person other than a university, a governmental entity, a political corporation, or any nonprofit corporation that is an organization described in Section 501(c)(3) of the Internal Revenue Code.

Section 23. (a) At any time when an authority does not have any indebtedness or other contractual or legal obligations outstanding, an authority may be dissolved by filing articles of dissolution with the Secretary of State, but only with the approval of both the board of the authority and the sponsoring university in the manner provided in this section.

(b) In order to dissolve an authority, the following steps shall be completed:

(1) The board shall first adopt a resolution proposing dissolution of the authority.

(2) After the adoption by the board of a resolution approving articles of dissolution, the authority shall file with the sponsoring university a written request to the sponsoring university for adoption of a resolution approving dissolution of the authority.

(3) As promptly as may be practicable after the receipt of the application from the authority, the sponsoring university shall review the application, and its governing body shall adopt a resolution either approving or denying dissolution of the authority.

(c) Within 30 days following the approval of dissolution of an authority by the sponsoring university, the president or vice president of the authority shall sign and file for record in the office of Secretary of State the original articles of dissolution and a certified copy of each resolution approving the articles of dissolution.

(d) Upon the filing for record of the articles of dissolution and the documents required by subsection (c) of this section, the articles of dissolution shall become effective. The Secretary of State shall thereupon record the articles of dissolution in an appropriate book in his or her office.

(e) A sponsoring university may not dissolve an authority without the consent of the board.

(f) Upon dissolution of the authority, title to all assets of the authority shall vest in the sponsoring university

Section 24. The provisions of this act are cumulative and shall not be deemed to repeal existing laws, except to the extent such laws are clearly inconsistent with the provisions of this act.

Section 25. The provisions of this act are severable. If any part of this act is declared invalid or unconstitutional, that declaration shall not affect the part which remains.

Section 26. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

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Medicine

Corporations

Public Corporations

Secretary of State

Health Care Facilities

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