Senate Bill 296 Summary

• Establishes a procedure allowing hospital service corporations to reorganize by creating a nonprofit holding corporation that becomes the ultimate controlling person of the hospital service corporation.

• Permits transfers of property, assets, rights, liabilities, and ownership interests between the hospital service corporation and the nonprofit holding corporation as part of the reorganization.

• Designates reorganization as an internal restructuring that does not constitute a change of control and exempts it from existing change of control provisions.

• Requires the nonprofit holding corporation to remain a nonprofit corporation and prohibits equity or ownership interests from being granted to executive officers or governing board members.

• Maintains the hospital service corporation's legal form, business license, and subscriber contracts while allowing it to make dividends or distributions to the nonprofit holding corporation under specified compliance conditions.