Tenn. Code Ann. § 48-68-201 Short title.
48-68-201. Short title.
This part shall be known and may be cited as the “Public Benefit Hospital Sales and Conveyance Act of 2006.”
Acts 2006, ch. 930, § 2.
Public Benefit Hospital Sales and Conveyance Act of 2006
Tenn. Code Ann. tit. 48, ch. 68, pt. 2
in effectTenn. Code Ann. § 48-68-202 Part definitions.
48-68-202. Part definitions.
As used in this part, unless the context otherwise requires:
(1) “Acquiring entity” means the person who gains ownership or control of a public benefit hospital entity as a result of a public benefit hospital conveyance transaction;
(2) “Person” means any individual, partnership, trust, estate, corporation, association, joint venture, joint stock company or other organization;
(3)(A) “Public benefit hospital conveyance transaction” means:
(i) The sale, transfer, lease, exchange, optioning, conveyance or other disposition of a material amount of the assets or operations of any public benefit hospital entity to an entity or person other than another public benefit hospital entity that controls, is controlled by or is under common control with such public benefit hospital entity; and
(ii) The transfer of control or governance of a public benefit hospital entity to an entity or person other than another public benefit hospital entity that controls, is controlled by or is under common control with such public benefit hospital entity;
(B) “Public benefit hospital conveyance transaction” includes any transaction described in subdivision (3)(A)(i) or (3)(A)(ii) that is entered into by the public benefit hospital entity or by any entity that controls, is controlled by or is under common control with such public benefit hospital entity;
(4) “Public benefit hospital entity” means any public benefit corporation, as defined in chapter 51, part 2 of this title, or any governmental entity that is licensed as a hospital under title 68, chapter 11, part 2, or considered a hospital under title 33, chapter 1, including entities affiliated with any of these through ownership, governance, or membership, such as a holding company or subsidiary.
Acts 2006, ch. 930, § 3; 2014, ch. 864, § 1.
Tenn. Code Ann. § 48-68-203 Written notice prior to entering into public benefit hospital conveyance transaction.
48-68-203. Written notice prior to entering into public benefit hospital conveyance transaction.
(a) Notwithstanding chapters 61 and 64 of this title, any public benefit hospital entity shall be required to provide written notice to the attorney general and reporter, prior to entering into any public benefit hospital conveyance transaction. At the time of providing notice to the attorney general and reporter, the public benefit hospital entity shall provide the attorney general and reporter with written certification that a copy of this part has been given in its entirety to each member of the board of trustees of the public benefit hospital entity.
(b) The notice to the attorney general and reporter provided for in this section shall include and contain all the information the attorney general and reporter determines is required. No notice shall be effective until the attorney general and reporter has acknowledged receipt of a complete notice, in accordance with protocol established by the attorney general and reporter.
(c) This part shall not apply to a public benefit hospital entity, if the public benefit hospital conveyance transaction is in the usual and regular course of its activities, and if the attorney general and reporter has given the public benefit hospital entity a written waiver of this part as to the public benefit hospital conveyance transaction.
Acts 2006, ch. 930, § 4.
Tenn. Code Ann. § 48-68-204 Notification by attorney general and reporter of action.
48-68-204. Notification by attorney general and reporter of action.
Within forty-five (45) days of receipt of a complete written notice as required by § 48-68-203, the attorney general and reporter shall notify the public benefit hospital entity in writing of the attorney general and reporter's decision to object to the proposed public benefit hospital conveyance transaction or to take no action. The attorney general and reporter may extend this period for an additional thirty (30) days; provided, that the extension is necessary to obtain information pursuant to §§ 48-68-206,48-68-208 and48-68-209.
Acts 2006, ch. 930, § 5.
Tenn. Code Ann. § 48-68-205 Published written notice.
48-68-205. Published written notice.
(a) Within five (5) days after giving written notice pursuant to § 48-68-203, the public benefit hospital entity shall cause the written notice to be published in one (1) or more newspapers of general circulation that are published in the county of the public benefit hospital entity. The published written notice shall contain:
(1) The text of the written notice provided to the attorney general and reporter under § 48-68-203; and
(2) The following statements:
(A) “This notice is provided pursuant to Tennessee Code Annotated, Title 48, Chapter 68, Part 2”; and
(B) “Any interested party wishing to provide written comment may submit the written comment directly to the Attorney General and Reporter, Antitrust Division, 425 Fifth Avenue North, Nashville, Tennessee 37243”.
(b) A failure by the public benefit hospital entity giving notice under § 48-68-203 to provide a published written notice as required by subsection (a) shall be a sufficient ground for the attorney general and reporter to object to the proposed public benefit hospital conveyance transaction.
Acts 2006, ch. 930, § 6.
Tenn. Code Ann. § 48-68-206 Considerations in making decision regarding proposed transaction.
48-68-206. Considerations in making decision regarding proposed transaction.
(a) In making a decision whether to object to a proposed public benefit hospital conveyance transaction, the attorney general and reporter shall consider:
(1) Whether the public benefit hospital entity will receive full and fair market value for its charitable or social welfare assets;
(2) Whether the fair market value of the public benefit hospital entity's assets to be transferred has been manipulated by the actions of the parties in a manner that causes the fair market value of the assets to decrease;
(3) Whether the proceeds of the proposed public benefit hospital conveyance transaction will be used consistent with the trust under which the assets are held by the public benefit hospital entity;
(4) Whether the proceeds are used by a county or municipality for general or special revenue obligations not expressly provided for when the hospital was established;
(5) Except as provided in subsection (b), whether the proceeds will be controlled as funds independently of the acquiring or related entities; provided, however, proceeds must not be returned to any county or municipal government except to the extent necessary to pay lawful obligations to such county or municipal government;
(6) Whether the proposed public benefit hospital conveyance transaction will result in a breach of fiduciary duty, as determined by the attorney general and reporter, including conflicts of interest related to payments or benefits to officers, directors, board members, executives and experts employed or retained by the parties;
(7) Whether the governing body of the public benefit hospital entity exercised due diligence in deciding to dispose of the public benefit hospital entity's assets, selecting the acquiring entity, and negotiating the terms and conditions of the disposition;
(8) Whether the public benefit hospital conveyance transaction will result in private inurement to any person;
(9) Whether health care providers will be offered the opportunity to invest or own an interest in the acquiring entity or a related party, and whether procedures or safeguards are in place to avoid conflict of interest in patient referrals;
(10) Whether the terms of any management or services contract negotiated in conjunction with the proposed public benefit hospital conveyance transaction are reasonable;
(11) Whether any foundation established to hold the proceeds of the public benefit hospital conveyance transaction will be broadly based in the community and be representative of the affected community, taking into consideration the structure and governance of the foundation;
(12) Whether the attorney general and reporter has been provided with sufficient information and data by the public benefit hospital entity to adequately evaluate the proposed public benefit hospital conveyance transaction or the effects of the transaction on the public; provided, that the attorney general and reporter has notified the public benefit hospital entity or the acquiring entity of any inadequacy of the information or data and has provided a reasonable opportunity to remedy the inadequacy; and
(13) Any other criteria the attorney general and reporter considers necessary to determine whether the public benefit hospital entity will receive full and fair market value for its assets to be transferred, as required in rules adopted by the attorney general and reporter under § 48-68-208.
(b)(1) Subdivision (a)(5) does not apply to a hospital, and such hospital is not a public benefit hospital entity for purposes of subdivision (a)(5), if the hospital:
(A) Was established solely for the benefit of a county government; and
(B) Has an estimated sales value of more than five hundred million dollars ($500,000,000).
(2) This subsection (b) becomes effective in a county government that contains a hospital as described in subdivision (b)(1) upon approval by a two-thirds (2/3) vote of the legislative body of the county government.
Acts 2006, ch. 930, § 7; 2012, ch. 929, §§ 1, 2; 2026, ch. 718, §§ 1, 2.
Tenn. Code Ann. § 48-68-207 Determination of whether the transaction will have effect on availability or accessibility to health care services.
48-68-207. Determination of whether the transaction will have effect on availability or accessibility to health care services.
In making a decision whether to object to a public benefit hospital conveyance transaction, the attorney general and reporter shall also determine whether the proposed public benefit hospital conveyance transaction may have a significant effect on the availability or accessibility of health care services to the affected community. In making this determination, the attorney general and reporter shall consider:
(1) Whether sufficient safeguards are included to assure the affected community continued access to affordable care;
(2) Whether the proposed public benefit hospital conveyance transaction creates or has the likelihood of creating an adverse effect on the access to or availability or cost of health care services to the community;
(3) Whether the acquiring entities have made a commitment, at least comparable to the public benefit hospital entity, to provide health care to the disadvantaged, the uninsured and the underinsured, and to provide benefits to the affected community to promote improved health care. Activities and funding provided by the public benefit hospital entity or its successor public benefit hospital entity or foundation to provide such health care or to provide support or medical education and teaching programs or medical research programs shall be considered in evaluating compliance with this commitment;
(4) Whether the public benefit hospital conveyance transaction will result in the revocation of hospital privileges;
(5) Whether sufficient safeguards are included to maintain appropriate capacity for health science research and health care provider education; and
(6) Whether the proposed public benefit hospital conveyance transaction demonstrates that the public interest will be served considering the essential medical services needed to provide safe and adequate treatment, appropriate access and balanced health care delivery to the residents.
Acts 2006, ch. 930, § 8.
Tenn. Code Ann. § 48-68-208 Providing sufficient information to complete review of the transaction.
48-68-208. Providing sufficient information to complete review of the transaction.
The attorney general and reporter may demand that the public benefit hospital entity giving notice under § 48-68-203 provide such information as the attorney general and reporter reasonably deems necessary to complete the review of any proposed public benefit hospital conveyance transaction described in §§ 48-68-206 and48-68-207. A failure by the public benefit hospital entity giving notice under § 48-68-203 to provide timely information as required by the attorney general and reporter shall be a sufficient ground for the attorney general and reporter to object to the proposed public benefit hospital conveyance transaction.
Acts 2006, ch. 930, § 9.
Tenn. Code Ann. § 48-68-209 Permitted action to assist in review of proposed transaction.
48-68-209. Permitted action to assist in review of proposed transaction.
(a) Within the time periods designated in § 48-68-204, the attorney general and reporter may do any of the following to assist in the review of the proposed public benefit hospital conveyance transaction described in this part:
(1) Contract with, consult, and receive advice from any agency of the state or the United States on such terms and conditions the attorney general and reporter deems appropriate; or
(2) At the attorney general and reporter's sole discretion, contract with experts or consultants the attorney general and reporter deems appropriate to assist the attorney general and reporter in reviewing the proposed public benefit hospital conveyance transaction.
(b) Any contract costs incurred by the attorney general and reporter pursuant to this section shall not exceed an amount that is reasonable and necessary to conduct the review of the proposed public benefit hospital conveyance transaction. The attorney general and reporter shall be exempt from all state procurement for competitive bidding for purposes of entering into contracts pursuant to this section. The acquiring entity, upon request, shall pay the attorney general and reporter promptly for all costs of contracts entered into by the attorney general and reporter pursuant to this section.
(c) The attorney general and reporter shall be entitled to reimbursement from the acquiring entity for all reasonable and actual costs incurred by the attorney general and reporter in reviewing any proposed public benefit hospital conveyance transaction under this part, including attorney fees at the billing rate used by the attorney general and reporter to bill state agencies for legal services. The acquiring entity, upon request, shall pay the attorney general and reporter promptly for all costs, but in no event shall reimbursement associated with reviewing a proposed public benefit hospital conveyance transaction exceed fifty thousand dollars ($50,000). The attorney general and reporter shall not be entitled to reimbursement for expenses incurred for any legal services rendered by external legal counsel.
(d) The failure by the acquiring entity to promptly reimburse the attorney general and reporter for all costs pursuant to this section shall be sufficient ground for the attorney general and reporter to object to the proposed public benefit hospital conveyance transaction.
Acts 2006, ch. 930, § 10.
Tenn. Code Ann. § 48-68-210 Public records.
48-68-210. Public records.
Unless subject to title 8, chapter 6, part 4, all documents submitted to the attorney general and reporter by any person, including public benefit hospital entities giving notice under § 48-68-203, in connection with the attorney general and reporter's review of the proposed public benefit hospital conveyance transaction pursuant to this part, shall be public records subject to title 10, chapter 7.
Acts 2006, ch. 930, § 11.
Tenn. Code Ann. § 48-68-211 Violations — Penalties — Remedies.
48-68-211. Violations — Penalties — Remedies.
(a) Any public benefit hospital conveyance transactions entered into in violation of this part shall be null and void, and each member of the governing boards and the chief financial officers of the parties to the public benefit hospital conveyance transaction may be subject to a civil penalty of up to one million dollars ($1,000,000), the amount to be determined by a court of competent jurisdiction in Davidson County. The attorney general and reporter shall institute proceedings to impose such a penalty. In addition, no license to operate a hospital may be issued or renewed under title 68, chapter 11, part 2, or applicable regulation, if there is a public benefit hospital conveyance transaction entered into in violation of the notice, public hearing, and review requirements of this part.
(b) Nothing in this section shall be construed to limit the common law authority of the attorney general and reporter to protect charitable trusts and charitable assets in this state. These penalties and remedies are in addition to, and not a replacement for, any other civil or criminal actions that the attorney general and reporter may file under either the common law or statutory law, including rescinding the public benefit hospital conveyance transaction, granting injunctive relief, or any combination of these and other remedies available under common law or statutory law.
Acts 2006, ch. 930, § 12.
Source: Tennessee Code (state release 76 via Public.Resource.Org) + public chapters (Tennessee Secretary of State)URL: https://archive.org/download/gov.tn.tca/release76.2021.05.21/gov.tn.tca.title.48.htmlFetched: 10/24/2026