HB241 Alabama 2016 Session

Summary

Primary Sponsor

Chris PringleRepresentative

Republican

Session

Regular Session 2016

Title

Universities that operate medical school, authorized to incorporate authorities to own and operate health care facilities, University Authority Act

Summary

HB241 creates a new public 'Authority' structure for universities with medical schools to own and operate health care facilities and related ventures, with broad powers, tax exemptions, and antitrust immunities.

What This Bill Does

The bill lets sponsoring public universities that run medical schools form Authorities, a new public corporation to oversee health care facilities and related activities. Authorities can form university affiliates, issue debt, acquire or construct facilities, enter contracts and joint ventures, and engage in collaborations to advance public health. The act provides antitrust immunity, tax exemptions for Authorities and their affiliates, and special protections and exemptions from certain state laws, while outlining governance, dissolution, and transfer procedures. It also allows the reincorporation of existing health care entities as Authorities and sets auditing and reporting requirements.

Who It Affects

• Sponsoring public universities with medical schools: can establish one or more Authorities, appoint governing boards, transfer assets or facilities to the Authority, and oversee its operations and finances.
• Authorities and their university affiliates (including health care facilities and potential subsidiaries): gain broad powers to own, operate, finance, and collaborate on health care delivery and education; may form or control university affiliates; enjoy tax exemptions, antitrust immunity, and exemption from several state requirements, with specific limits such as for-profit entities not qualifying as university affiliates.

Key Provisions

• Authorizes public universities operating schools of medicine to form an Authority, a new public corporation to own and operate health care facilities and related assets.
• Provides incorporation, governance (board of directors and officers), and dissolution/reincorporation procedures for Authorities; allows more than one Authority per sponsoring university.
• Authorizes Authorities to form university affiliates, create subsidiaries, and engage in health care activities, including ownership, operation, and joint ventures; prohibits for-profit entities from qualifying as university affiliates.
• Gives Authorities the power to eminent domain, to incur indebtedness, to issue bonds/notes and other obligations, and to pledge revenues or assets as security; debt is not a debt of the state or sponsoring university.
• Imposes tax exemptions: Authorities and their affiliates are exempt from state taxation on income and assets; indebtedness and sale proceeds are exempt from state taxes; sales and use taxes on related transactions are exempt.
• Extends antitrust immunity: Authorities may act in ways that could be anticompetitive or create monopoly power if necessary to fulfill their public health mission, with immunity from federal and state antitrust laws to the fullest extent allowed by law.
• Allows transfer of health care facilities, assets, revenues, and related rights from the state, a governmental entity, or a sponsoring university to an Authority or its affiliate; authorizes related funding and support from public sources.
• Requires annual audits by a certified public accounting firm, with reports provided to the sponsoring university.
• Authorizes dissolution and disposition of Authority assets upon dissolution, with title vesting in the sponsoring university; provides reincorporation procedures for existing public health care corporations.
• Establishes governance and operational rules for Authorities (board composition, director removal, meetings, bylaws, and records handling), and sets sections for payments, security documents, and enforcement in default cases.
• Clarifies that Authorities and their affiliates are governmental subdivisions for certain purposes but not subject to all ordinary state supervision; includes liability protections and various exemptions from public records, ethics, and competitive bidding laws.
• States that the act is cumulative and severable, and that it does not repeal existing laws except where inconsistent; provides for immediate effect following passage and governor's approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Colleges and Universities