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PUBLIC LAWS OF MAINE
First Regular Session of the 121st

CHAPTER 171
S.P. 496 - L.D. 1490

An Act To Update and Clarify the Law Regarding the Conversion of a Nonprofit Hospital and Medical Service Organization to a Domestic Stock Insurer

Be it enacted by the People of the State of Maine as follows:

     Sec. 1. 5 MRSA §194, sub-§1, as enacted by PL 2001, c. 550, Pt. A, §1, is amended to read:

     1. Definition. As used in this section and sections 194-A to 194-H and section 194-K, "public charity" means an entity formed primarily for charitable purposes, including but not limited to:

     Sec. 2. 5 MRSA §194-A, sub-§1, ¶I, as enacted by PL 1997, c. 344, §1, is amended to read:

     Sec. 3. 5 MRSA §194-A, sub-§2, as enacted by PL 1997, c. 344, §1 and affected by §10, is amended to read:

     2. Charitable status of organization. Any nonprofit hospital and medical service organization is a charitable and benevolent institution and a public charity and its assets are held for the purpose of fulfilling the charitable purposes of the organization. The charitable purposes may include, but are not limited to, the following: providing access to medical care through affordable health insurance and affordable managed care products for persons of all incomes; identifying and addressing the State's unmet health care needs, particularly with regard to medically uninsured and underserved populations; making services and care available through participating providers; and improving the quality of care for medically uninsured and underserved populations. The following ownership interests apply in any proceeding in court or before the superintendent in which the ownership of the organization is at issue or is relevant.

     Sec. 4. 5 MRSA §194-A, sub-§3, as enacted by PL 1997, c. 344, §1, is repealed.

     Sec. 5. 5 MRSA §194-A, sub-§5, ¶B, as enacted by PL 1997, c. 344, §1, is amended to read:

     Sec. 6. 5 MRSA §194-A, sub-§5, ¶D, as enacted by PL 1997, c. 344, §1, is amended to read:

     Sec. 7. 5 MRSA §194-A, sub-§6, as enacted by PL 1997, c. 344, §1, is amended to read:

     6. Modified charitable trust plan required for a material change in form. An organization shall notify the Attorney General and the superintendent of the organization's intent to engage in any transaction described in subsection 1, paragraph I at least 60 days prior to engaging in that transaction. Upon the superintendent's or the Attorney General's determination that a transaction described in subsection 1, paragraph I is a material change in form, notice must be given to the organization and the Attorney General or superintendent, as applicable. Within 90 days after the superintendent or the Attorney General issues a notice of the determination that a transaction described in subsection 1, paragraph I is a material change in form, other than through conversion to a domestic stock insurer pursuant to Title 24, section 2301, subsection 9-D, the Attorney General shall file an action in Superior Court under the Attorney General's charitable authority requesting the court to order the organization to submit to the superintendent, the court and the Attorney General a modified charitable trust plan containing the provisions set forth in subsection 5, paragraph I as the court determines are reasonable under the circumstances, together with any additional provisions as the court determines are reasonably required to coordinate the modified charitable trust plan with any proceeding instituted or to be instituted by the superintendent in connection with the material change in form. The Superior Court, after hearing, shall approve, approve with modifications or disapprove the modified charitable trust plan. The superintendent has the right to intervene in the Superior Court proceeding. In the event that either the superintendent or the court determines that a valuation of the organization is necessary, the superintendent shall conduct the valuation consistent with Title 24, section 2301, subsection 9-D. The superintendent may hold proceedings as the superintendent determines necessary to review an organization's proposal to materially change its form. If the modified charitable trust plan includes the creation of a charitable trust or nonprofit public benefit corporation, the charitable trust or nonprofit public benefit corporation may not include the organization or any person controlled by the organization.

     Sec. 8. 5 MRSA §194-A, sub-§7,¶¶B to D, as enacted by PL 1997, c. 344, §1, are amended to read:

     Sec. 9. 24 MRSA §2301, first ¶, as amended by PL 1993, c. 702, Pt. A, §1, is further amended to read:

     Any corporation organized under special Act of the Legislature or, under Title 13, chapter 81 or as a public benefit corporation under Title 13-B for the following purposes may be authorized by the superintendent on the terms and conditions provided for in this chapter, except that when such a corporation was previously organized by special Act of the Legislature, this chapter does not apply when inconsistent with that Act as previously amended:

     Sec. 10. 24 MRSA §2301, sub-§3-C, as enacted by PL 1997, c. 344, §2, is amended to read:

     3-C. Nonprofit purposes. A nonprofit hospital and medical service organization that is authorized to provide nonprofit hospital service plans under subsection 1 and, nonprofit medical service plans pursuant to subsection 2 or nonprofit health care plans pursuant to subsection 3 is a charitable and benevolent institution, in accordance with Title 5, section 194-A, and a public charity and its assets are held for the purpose of fulfilling the charitable purposes of the organization, which purposes may include, but are not limited to, the following: providing access to medical care through affordable health insurance and affordable managed care products for persons of all incomes; identifying and addressing the State's unmet health care needs, particularly with respect to medically uninsured and underserved populations; making services and care available through participating providers; and improving the quality of care for medically uninsured and underserved populations.

     Sec. 11. 24 MRSA §2301, sub-§7, as amended by PL 1993, c. 702, Pt. A, §1, is further amended to read:

     7. Administrative services. A corporation has the right to utilize its organization and facilities, either directly or through another legal entity owned by it and similar corporations located in other states, to perform services for the United States or State or the units or agencies of either; or any charitable or nonprofit organization public charity involved in health care;

     Sec. 12. 24 MRSA §2301, sub-§9-B, as amended by PL 1997, c. 344, §3, is repealed.

     Sec. 13. 24 MRSA §2301, sub-§9-D, ¶B, as amended by PL 2001, c. 550, Pt. B, §2, is further amended by repealing subparagraph (9).

     Sec. 14. 24 MRSA §2301, sub-§9-D, ¶E, as enacted by PL 1997, c. 344, §4, is amended to read:

     Sec. 15. 24 MRSA §2301, sub-§9-D, ¶G, as enacted by PL 1997, c. 344, §4, is repealed.

     Sec. 16. 24 MRSA §2301, sub-§9-D, ¶I, as enacted by PL 1997, c. 344, §4, is amended by amending subparagraph (1) to read:

     Sec. 17. 24 MRSA §2308-A, sub-§1, ¶C, as enacted by PL 1997, c. 344, §5, is amended to read:

Effective September 13, 2003, unless otherwise indicated.

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