GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 532
Short Title: Preserving Competition in Healthcare Act. (Public)
Sponsors: Senators Burgin, Mayfield, and Corbin (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S532 -v-1*
A BILL TO BE ENTITLED 1
AN ACT PRESERVING CO MPETITION IN HEALTHC ARE BY REGULATING TH E 2
CONSOLIDATION AND CO NVEYANCE OF HOSPITAL S. 3
The General Assembly of North Carolina enacts: 4
SECTION 1. Chapter 131E of the General Statutes is amended by adding a new 5
Article to read: 6
"Article 11C. 7
"Preserving Competition in Healthcare Act. 8
"§ 131E-214.20. Definitions. 9
The following definitions apply in this Article: 10
(1) Acquiring entity. – The person or entity that gains ownership or control of a 11
hospital entity as a result of a transaction subject to review under this Article. 12
(2) Attorney General. – The Attorney General or any employee of the Department 13
of Justice designated by the Attorney General. 14
(3) Hospital entity. – Any corporation or governmental entity licensed as a 15
hospital under Article 5 of Chapter 131E of the General Statutes, including 16
any entity affiliated with such corporation or governmental entity through 17
ownership, governance, or membership, such as a holding company or 18
subsidiary. 19
(4) Person. – Any individual, partnership, trust, estate, corporation, association, 20
joint venture, joint stock company, or other organization. 21
(5) State Auditor. – The State Auditor or any employee of the Office of the State 22
Auditor designated by the State Auditor. 23
(6) State Treasurer. – The State Treasurer or any employee of the Office of the 24
State Treasurer designated by the State Treasurer. 25
(7) Transaction. – Includes all of the following, if the value of the assets, control, 26
or governance interest equals or exceeds five million dollars ($5,000,000): 27
a. The sale, transfer, lease, exchange, optioning, conveyance, or other 28
disposition of no less than fifty percent (50%) of the assets or 29
operations of any hospital entity to any person or entity other than 30
another hospital entity that controls, is controlled by, or is under 31
common control with such hospital entity. 32
b. The transfer of control or governance of a hospital entity to a person 33
or entity other than another hospital entity that controls, is controlled 34
by, or is under common control with such hospital entity. 35 General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 532-First Edition
c. Any binding legal obligation between two or more persons that results 1
in a transfer of control, responsibility, or governance of no less than 2
fifty percent (50%) of a hospital entity's assets to an acquiring entity. 3
d. Any transaction regardless of exact form that, if structured as a 4
purchase, merger, or joint venture, would be subject to review under 5
this Article. 6
e. Any transaction described in sub-subdivisions a. through d. of this 7
subdivision that is entered into by a hospital entity or by any person or 8
entity that controls, is controlled by, or is under common control with 9
such hospital entity. 10
f. All sales, transfers, conveyances, or other dispositions of no less than 11
fifty percent (50%) of a hospital entity's assets made in the course of a 12
bankruptcy proceeding. 13
"§ 131E-214.21. Actions and decisions by the State Auditor, Attorney General, and State 14
Treasurer. 15
Whenever an action or decision is required by the State Auditor, the Attorney General, and 16
the State Treasurer under this Article, they shall act or decide together and the opinion of the 17
majority shall prevail. 18
"§ 131E-214.22. Applicability; waived transactions. 19
This Article does not apply to a hospital entity if (i) the transaction is in the usual and regular 20
course of its activities and (ii) the State Auditor, Attorney General, and State Treasurer have 21
provided to the hospital entity a written waiver of this Article with respect to the transaction. A 22
determination by the State Auditor, Attorney General, and State Treasurer that a transaction 23
merits review under this Article shall be the final decision of the State and shall not be set aside 24
on judicial review unless found to be arbitrary and capricious. 25
"§ 131E-214.24. Written notice and certification requirements for proposed transactions; 26
rules. 27
(a) Prior to entering into any transaction subject to review under this Article, a hospital 28
entity shall provide the State Auditor, Attorney General, and State Treasurer with written notice 29
of the proposed transaction. The hospital entity shall simultaneously provide the State Auditor, 30
Attorney General, and State Treasurer with written certification that a copy of this Article in its 31
entirety has been provided to each member of the governing board or board of trustees of the 32
hospital entity. 33
(b) A hospital entity and an acquiring entity may provide the State Auditor, Attorney 34
General, and State Treasurer with a single written notice of a proposed transaction that meets the 35
requirements of this section; provided, however, that the State Auditor, Attorney General, and 36
State Treasurer may require additional information that the State Auditor, Attorney General, and 37
State Treasurer determines is necessary for a complete review of the proposed transaction from 38
any party. 39
(c) The written notice required under this section shall not become effective until the 40
State Auditor, Attorney General, and State Treasurer have acknowledged receipt of a complete 41
notice in accordance with subsection (a) of G.S. 131E-214.26. 42
(d) The State Auditor, Attorney General, and State Treasurer shall adopt rules specifying 43
the required contents of the written notice required by this section and the manner in which the 44
written notice shall be provided to the State Auditor, Attorney General, and State Treasurer in 45
order to be deemed complete and effective. The rules shall allow for the State Auditor, Attorney 46
General, and State Treasurer, in their discretion, to require additional information about a 47
proposed transaction that is not expressly required in the rules adopted pursuant to this section. 48
"§ 131E-214.26. Time line and process for decision to object or take no action. 49
(a) When the parties to the proposed transaction have provided the State Auditor, 50
Attorney General, and State Treasurer with all the information expressly required by the rules 51 General Assembly Of North Carolina Session 2025
Senate Bill 532-First Edition Page 3
adopted under G.S. 131E-214.24(d), the State Auditor, Attorney General, and State Treasurer 1
shall provide to the hospital entity and acquiring entity written acknowledgement of having 2
received a complete notice that meets the requirements of G.S. 131E-214.24. Written 3
acknowledgement by the State Auditor, Attorney General, and State Treasurer pursuant to this 4
subsection shall constitute the beginning of a 90-day review period. The State Auditor, Attorney 5
General, and State Treasurer shall not unreasonably withhold a determination that the parties 6
have provided a complete notice that meets the requirements of G.S. 131E-214.24. 7
(b) If the State Auditor, Attorney General, and State Treasurer have provided to the 8
hospital entity and acquiring entity written acknowledgement of having received a complete 9
notice that meets the requirements of G.S. 131E-214.24, as required by subsection (a) of this 10
section, a request by the State Auditor, Attorney General, and State Treasurer for additional 11
information not expressly required by the rules adopted under G.S. 131E-214.24(d) does not 12
delay the commencement of the 60-day review period under subsection (c) of this section. 13
(c) The State Auditor, Attorney General, and State Treasurer have a period of 60 days, 14
commencing on the date they provide written acknowledgement to the hospital entity and 15
acquiring entity of having received a complete notice that meets the requirements of 16
G.S. 131E-214.24, to review the proposed transaction and notify the hospital entity, in writing, 17
of their decision to either object to the proposed transaction or to take no action regarding the 18
proposed transaction. 19
(d) Upon notice, in writing, to all parties to the transaction, the State Auditor, Attorney 20
General, and State Treasurer may extend their 60-day review period for up to an additional 30 21
days if the extension is necessary to obtain additional information from one or more of the parties 22
to the transaction or to complete any component of the review process specified in 23
G.S. 131E-214.30 through G.S. 131E-214.36. 24
(e) During the review period, the parties to the proposed transaction are prohibited from 25
consummating the transaction. 26
"§ 131E-214.28. Published written notice of proposed transaction; failure to give notice. 27
(a) Within 10 days after providing the State Auditor, Attorney General, and State 28
Treasurer with written notice of a proposed transaction pursuant to subsection (a) of 29
G.S. 131E-214.24, without regard to whether or not the State Auditor, Attorney General, and 30
State Treasurer have acknowledged receipt of a complete notice, the hospital entity shall give 31
written notice of the proposed transaction by publication in one or more newspapers of general 32
circulation in every county in which (i) there exists a hospital entity whose control or governance 33
would be altered by the proposed transaction or (ii) there resides a substantial number of patients 34
of a hospital entity whose control or governance would be altered by the proposed transaction. 35
The published written notice shall contain the following: 36
(1) A brief restatement of the nature of the transaction, as specified in the written 37
notice provided to the State Auditor, Attorney General, and State Treasurer 38
under G.S. 131E-214.24, which shall include the following: 39
a. The name of the hospital entity. 40
b. The name of the acquiring entity. 41
c. The names of any other parties to the proposed transaction. 42
d. The nature of the proposed transaction. 43
e. The anticipated consideration that will be paid by the acquiring entity. 44
(2) The following statements: 45
a. "This notice is provided pursuant to G.S. 131E-214.24." 46
b. "Any interested party wishing to provide written comments may 47
submit the written comments directly to the Office of the Attorney 48
General, 114 W. Edenton Street, Raleigh, NC 27603." 49
(3) The time, date, and location of any public hearing required under 50
G.S. 131E-214.30, or the information necessary to access a public hearing 51 General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 532-First Edition
using teleconferencing or video-conferencing technology, as permitted under 1
subsection (c) of G.S. 131E-214.30. A public hearing shall not be conducted 2
earlier than 14 days after the publication of a notice pursuant to this section. 3
(4) In the event the hospital entity is a nonprofit or publicly owned entity, a link 4
to a webpage that allows any member of the public to view a detailed summary 5
of the proposed transaction and copies of all transactional and collateral 6
agreements not otherwise exempt from public disclosure under Chapter 132 7
of the General Statutes or G.S. 131E-97.3. 8
(b) A failure by the hospital entity giving notice under G.S. 131E-214.24 to provide a 9
published written notice as required by subsection (a) of this section shall be a sufficient ground 10
for the State Auditor, Attorney General, and State Treasurer to object to the proposed transaction. 11
(c) This section does not apply to a sale, transfer, conveyance, or other disposition of a 12
substantial portion of a hospital entity's assets made in the course of a bankruptcy proceeding. 13
"§ 131E-214.30. Public hearing requirements; responsibility for public hearing costs; 14
exemptions and waivers. 15
(a) Within 30 days after providing the State Auditor, Attorney General, and State 16
Treasurer with the written notice required under subsection (a) of G.S. 131E-214.24, without 17
regard to whether or not the State Auditor, Attorney General, and State Treasurer have 18
acknowledged receipt of a complete notice, the hospital entity and the acquiring entity shall 19
conduct one or more public hearings at a convenient time and in a convenient location in a county 20
in which there exists a hospital entity whose control or governance would be altered by the 21
proposed transaction. The public hearing required by this section shall not be conducted earlier 22
than 14 days after publication of the written notice required under G.S. 131E-214.28. 23
(b) At least seven days prior to the date of any public hearing, the hospital entity and the 24
acquiring entity shall give written notice to the State Auditor, Attorney General, and State 25
Treasurer of the time, date, and location of the public hearing. In addition, the hospital entity and 26
the acquiring entity shall give written notice to the governing bodies of both the county and the 27
municipality in which the hospital entity that is the subject of the proposed transaction is located, 28
as applicable. 29
(c) With written notice to, and approval by, the State Auditor, Attorney General, and 30
State Treasurer, the hospital entity and the acquiring entity may conduct a public hearing required 31
by this section via online teleconferencing and video-conferencing technology; provided, 32
however, that doing so does not meaningfully limit the opportunity for public input concerning 33
the proposed transaction. 34
(d) At a hearing required by this section, the hospital entity and the acquiring entity shall 35
provide the following information: 36
(1) The extent to which the proposed transaction is expected to impact the cost, 37
availability, accessibility, and quality of healthcare services. 38
(2) The process involved in reaching a fair sales price for the hospital entity, 39
including whether any director, officer, agent, or employee of the hospital 40
entity will benefit directly or indirectly from the proposed transaction. 41
(e) At a hearing required by this section, the hospital entity and the acquiring entity may 42
make such presentations as they deem appropriate and shall provide a meaningful opportunity 43
for public input. The hospital entity and the acquiring entity shall also communicate to attendees 44
how interested parties may provide written comments about the proposed transaction, which shall 45
be identical to the statement required by sub-subdivision (2)b. of subsection (a) of 46
G.S. 131E-214.28. 47
(f) In any transaction in which the hospital entity is a nonprofit or publicly owned entity, 48
the hospital entity and the acquiring entity shall provide information regarding the extent to which 49
the proposed transaction is expected to impact the nonprofit or community benefit activities of 50 General Assembly Of North Carolina Session 2025
Senate Bill 532-First Edition Page 5
the hospital entity, including a description of the resources that will be committed to the nonprofit 1
or community benefit activities after the consummation of the transaction. 2
(g) In addition to any hearing required under this section, the State Auditor, Attorney 3
General, and State Treasurer may conduct a public hearing regarding a proposed transaction. At 4
least seven days prior to the public hearing, the State Auditor, Attorney General, and State 5
Treasurer shall notify the hospital entity and the acquiring entity of the time, date, and location 6
of any hearing to be conducted by the State Auditor, Attorney General, and State Treasurer or of 7
the information necessary to access a public hearing to be conducted by the State Auditor, 8
Attorney General, and State Treasurer via teleconferencing or video-conferencing technology. 9
At least 14 days prior to the public hearing, the State Auditor, Attorney General, and State 10
Treasurer shall also give written notice of the hearing by publication in one or more newspapers 11
of general circulation in any county in which there exists a hospital entity whose control or 12
governance would be altered by the proposed transaction. At a hearing conducted by the State 13
Auditor, Attorney General, and State Treasurer, the State Auditor, Attorney General, and State 14
Treasurer shall provide a meaningful opportunity for public input that includes opportunities for 15
questions and answers and comments. 16
(h) The parties to the proposed transaction shall pay for all costs associated with the 17
public hearing conducted in accordance with subsection (a) of this section. 18
(i) The provisions of this section do not apply to the sale, transfer, conveyance, or other 19
disposition of a substantial portion of a hospital entity's assets made in the course of a bankruptcy 20
proceeding. 21
"§ 131E-214.32. Required considerations by the State Auditor, Attorney General, and State 22
Treasurer. 23
(a) The State Auditor, Attorney General, and State Treasurer shall consider all of the 24
following criteria in making a decision about any transaction subject to the provisions of this 25
Article: 26
(1) Whether the fair market value of any asset to be transferred from the hospital 27
entity to the acquiring entity has been manipulated by the actions of the parties 28
in a manner that causes the fair market value of the asset to decrease. 29
(2) Whether healthcare providers will be offered the opportunity to invest or own 30
an interest in the acquiring entity or a related party, and whether procedures 31
or safeguards are in place to avoid healthcare providers' conflicts of interest 32
with respect to patient referrals. 33
(3) Whether the terms of any management or services contract negotiated in 34
conjunction with the proposed transaction are reasonable. 35
(4) Whether the proposed transaction may have a significant effect on the cost, 36
availability, accessibility, or quality of healthcare services for any affected 37
community. In making this determination, the State Auditor, Attorney 38
General, and State Treasurer shall consider all of the following: 39
a. Whether sufficient safeguards are included to ensure that the affected 40
community will have continued access to affordable healthcare 41
services. 42
b. Whether the proposed transaction creates or has the likelihood of 43
creating an adverse effect on the cost, availability, accessibility, or 44
quality of healthcare services within the affected community. 45
c. Whether the acquiring entity has made a commitment to provide (i) 46
free care to individuals whose income is three hundred percent (300%) 47
or less of the federal poverty guidelines, (ii) free or discounted 48
healthcare to other individuals who are disadvantaged, uninsured, or 49
underinsured, and (iii) other benefits to the affected community to 50
promote improved healthcare. In determining whether the level of 51 General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 532-First Edition
commitment by the acquiring entity will have a significant effect on 1
the availability, accessibility, or quality of healthcare services for any 2
affected community if the proposed transaction is approved, the State 3
Auditor, Attorney General, and State Treasurer shall consider the 4
number of programs and activities and the amount of funding 5
dedicated by the acquiring entity, as compared to the hospital entity or 6
their affiliated foundations, to: 7
1. The delivery of healthcare services to individuals who are 8
uninsured or underinsured. 9
2. The delivery of other services or benefits to the affected 10
community to promote improved healthcare. 11
3. Medical education and teaching programs. 12
4. Medical research programs. 13
d. Whether the proposed transaction would result in the revocation of 14
hospital privileges for any healthcare provider. 15
e. Whether sufficient safeguards are included to maintain appropriate 16
capacity for health science research and healthcare provider education. 17
f. Whether the proposed transaction serves the public interest by 18
promoting the availability and accessibility of safe, essential, and 19
quality healthcare services and treatment. 20
(5) Whether the proposed transaction complies with all applicable State and 21
federal laws and regulations, including antitrust laws. 22
(6) Whether the proposed transaction will significantly harm competition in any 23
part of this State among healthcare providers. 24
(7) Whether the State Auditor, Attorney General, and State Treasurer have 25
received all the information required by the rules adopted under 26
G.S. 131E-214.24(d) and timely responses to any additional requests for 27
information necessary to adequately evaluate the proposed transaction; 28
provided, however, that this subdivision shall not be a ground for disapproving 29
the proposed transaction, unless the State Auditor, Attorney General, and State 30
Treasurer have notified the hospital entity and the acquiring entity of any 31
inadequacy of information or data and has provided each with a reasonable 32
opportunity to remedy the inadequacy. 33
(8) Any objection to the transaction raised in comments submitted to the Attorney 34
General. 35
(b) In addition to the considerations specified in subsection (a) of this section, the State 36
Auditor, Attorney General, and State Treasurer shall also consider all of the following criteria in 37
making a decision about any proposed transaction subject to the provisions of this Article that 38
would alter the control or governance of a tax-exempt or publicly owned hospital entity: 39
(1) Whether the hospital entity would receive fair market value for its charitable 40
assets or social welfare assets. For the purpose of this subdivision, "social 41
welfare assets" means the average yearly monetary value of the benefits the 42
hospital entity provided to the community during the preceding five calendar 43
years. 44
(2) Whether the proceeds of the proposed transaction would be used in a manner 45
consistent with the trust under which the assets are held by the hospital entity. 46
(3) Whether the proceeds of the proposed transaction would be used by a county 47
or municipality for general or special revenue obligations not expressly 48
provided for when the hospital was established. 49
(4) Whether any proceeds of the proposed transaction would be controlled as 50
funds independently of the acquiring entity or related entities; provided, 51 General Assembly Of North Carolina Session 2025
Senate Bill 532-First Edition Page 7
however, that the proceeds of a proposed transaction may not be returned to 1
any county or municipal government except to the extent necessary to pay 2
lawful obligations to such county or municipal government. 3
(5) Whether the proposed transaction would result in a breach of fiduciary duty, 4
as determined by the Attorney General, including conflicts of interest related 5
to payments or benefits to officers, directors, board members, executives, or 6
experts employed or retained by the parties. 7
(6) Whether the governing body of the hospital entity exercised due diligence in 8
deciding to dispose of the hospital entity's assets, selecting the acquiring 9
entity, and negotiating the terms and conditions of the disposition. 10
(7) Whether the proposed transaction would result in private inurement to any 11
person. 12
(8) Whether any foundation established to hold the proceeds of the proposed 13
transaction would be broadly based in the community and be representative 14
of the affected community, taking into consideration the structure and 15
governance of the foundation. 16
(c) For any proposed transaction subject to the provisions of this Article that involves a 17
hospital owned by a municipality, as defined in G.S. 131E-6, or a hospital authority, as defined 18
in G.S. 131E-16, the State Auditor, Attorney General, and State Treasurer shall also consider 19
whether the transaction complies with the provisions of Article 2 of Chapter 131E of the General 20
Statutes governing the sale or conveyance of any rights of ownership the municipality or hospital 21
authority has in a hospital entity. 22
"§ 131E-214.34. Reserved for future codification purposes. 23
"§ 131E-214.36. Contract authority for reviewing proposed transactions; assistance from 24
the Department of Health and Human Services; fees to recover costs incurred in 25
conducting reviews. 26
(a) Within the time periods prescribed by G.S. 131E-214.26, the State Auditor, Attorney 27
General, or State Treasurer may do any of the following to assist in the review of a proposed 28
transaction covered by this Article: 29
(1) Contract with, consult, and receive advice from any agency of the State or the 30
United States on such terms and conditions as the State Auditor, Attorney 31
General, and State Treasurer deem appropriate. 32
(2) At the sole discretion of the State Auditor, Attorney General, and State 33
Treasurer, contract with experts or consultants the State Auditor, Attorney 34
General, and State Treasurer deem appropriate to assist them in reviewing the 35
proposed transaction. 36
Notwithstanding the provisions of this subsection, the State Auditor, Attorney General, and 37
State Treasurer shall not incur contract costs that exceed an amount that is reasonable and 38
necessary for a review of the proposed transaction. 39
(b) In exercising the authority to enter into contracts pursuant to this section, the State 40
Auditor, Attorney General, and State Treasurer are exempt from Article 3 of Chapter 143 of the 41
General Statutes. 42
(c) The State Auditor, Attorney General, and State Treasurer may request from the 43
Department of Health and Human Services a report on the anticipated effects of any proposed 44
transaction on access to, or the pricing of, healthcare services in any part of the State. If the State 45
Auditor, Attorney General, and State Treasurer did not unreasonably delay in requesting such a 46
report, the review period prescribed by G.S. 131E-214.26 may be extended an additional 30 days 47
to allow for the completion of such a report; provided, however, that the total review period for 48
the State Auditor, Attorney General, and State Treasurer may not exceed 180 days from the date 49
they notify the parties to the transaction that they have submitted a complete notice pursuant to 50
subsection (a) of G.S. 131E-214.26. 51 General Assembly Of North Carolina Session 2025
Page 8 Senate Bill 532-First Edition
(d) The State Auditor, Attorney General, and State Treasurer may impose upon the 1
acquiring entity a fee of up to fifty thousand dollars ($50,000) to cover one or more of the 2
following: 3
(1) The cost of all contracts entered into by the State Auditor, Attorney General, 4
and State Treasurer pursuant to subsection (a) of this section. 5
(2) Actual costs incurred by the State Auditor, Attorney General, and State 6
Treasurer in reviewing any proposed transaction under this Article, including 7
(i) costs incurred by the State Auditor, Attorney General, and State Treasurer 8
for conducting a public hearing pursuant to subsections (f) and (g) of 9
G.S. 131E-214.30 and (ii) attorneys' fees at the maximum billing rate used by 10
the Attorney General to bill State agencies for legal services. 11
(3) Actual costs incurred by the Department of Health and Human Services for 12
preparing a report for the State Auditor, Attorney General, and State Treasurer 13
pursuant to subsection (c) of this section. Upon receipt of this fee from the 14
acquiring entity, the State Auditor, Attorney General, and State Treasurer shall 15
reimburse the Department of Health and Human Services for the actual cost 16
of preparing the report. Reimbursement of these costs shall receive priority 17
over any reimbursement of costs that will ultimately inure to the State Auditor, 18
Attorney General, and State Treasurer. 19
(e) The acquiring entity may object to paying any fee imposed under this section. If the 20
acquiring entity objects, it may seek an order from a court of competent jurisdiction to limit the 21
acquiring entity's liability for the fee. In determining whether to issue an order, the court shall 22
consider the reasonableness of any contract the State Auditor, Attorney General, and State 23
Treasurer entered into with any expert and the cost of contracting with the expert relative to the 24
value of the proposed transaction. If the court declines to enter the acquiring entity's proposed 25
order, the acquiring entity shall reimburse the State Auditor, Attorney General, and State 26
Treasurer for costs associated with the litigation and such reimbursement shall not count against 27
the maximum allowed fee of fifty thousand dollars ($50,000) specified in subsection (d) of this 28
section. 29
(f) The failure of an acquiring entity to pay to the State Auditor, Attorney General, and 30
State Treasurer any fee authorized by this section by the applicable deadline specified in this 31
subsection shall be sufficient grounds for the State Auditor, Attorney General, and State 32
Treasurer to object to the proposed transaction: 33
(1) Absent an objection by the acquiring entity within seven days after the State 34
Auditor, Attorney General, and State Treasurer impose the fee, the fee is 35
payable to the State Auditor, Attorney General, or State Treasurer within 30 36
days after the date the State Auditor, Attorney General, or State Treasurer 37
imposes the fee. 38
(2) Upon an objection by the acquiring entity within seven days after the State 39
Auditor, Attorney General, and State Treasurer impose the fee, the fee is 40
payable to the State Auditor, Attorney General, and State Treasurer within 30 41
days after the date the court issues an order determining that the acquiring 42
entity is liable for the fee. 43
"§ 131E-214.38. Objection to proposed transaction. 44
(a) The State Auditor, Attorney General, and State Treasurer may object to any 45
transaction covered by this Article by providing written notice to the parties within the time frame 46
prescribed by G.S. 131E-214.26. 47
(b) If the State Auditor, Attorney General, and State Treasurer object to the transaction, 48
the State Auditor, Attorney General, and State Treasurer shall file an action in either (i) the 49
superior court of any county in which there exists a hospital entity whose control or governance 50
would be altered by the proposed transaction or (ii) the superior court of the county in which the 51 General Assembly Of North Carolina Session 2025
Senate Bill 532-First Edition Page 9
acquiring entity's principal place of business is located, if located within the State. The State 1
Auditor, Attorney General, State Treasurer and the parties to a transaction may mutually agree, 2
in writing, to extend the time period in which the State Auditor, Attorney General, and State 3
Treasurer may file such an action. If the time period for the State Auditor, Attorney General, and 4
State Treasurer to file an action objecting to the transaction is extended by mutual agreement 5
under this subsection, the parties to the transaction are prohibited from consummating the 6
transaction during that time. 7
(c) If the hospital entity is a nonprofit or publicly owned entity: 8
(1) The State Auditor, Attorney General, and State Treasurer shall file an action 9
in the name of the State seeking injunctive relief to restrain the parties from 10
taking further action to consummate the transaction or to compel the parties 11
to modify the transaction. The court may issue an order granting such 12
injunctive relief. 13
(2) The State Auditor, Attorney General, and State Treasurer may apply to the 14
court for temporary or preliminary injunctive relief pending a final 15
determination of the case. 16
(3) The State Auditor, Attorney General, and State Treasurer shall name as 17
defendants the hospital entity, the governing body of the hospital entity, and 18
the acquiring entity. Additionally, if the State Auditor, Attorney General, and 19
State Treasurer allege a breach of fiduciary duty by an individual director or 20
officer of the hospital entity, the State Auditor, Attorney General, and State 21
Treasurer may name such director or officer as a defendant. 22
(4) In any action brought pursuant to this subsection, the State Auditor, Attorney 23
General, and State Treasurer bear the burden of establishing by clear and 24
convincing evidence one of the following: 25
a. A breach of fiduciary duty occurred in the negotiation of the 26
transaction and consummation of the transaction would result in a 27
breach of fiduciary duty. 28
b. The assets of the hospital entity dedicated to charitable purposes prior 29
to the transaction would not continue to be dedicated to the same or 30
equivalent charitable purposes following consummation of the 31
transaction. 32
c. Consummation of the transaction would have significant and 33
deleterious effects on the cost, availability, accessibility, and quality 34
of healthcare in the State or any portion of the State, and the negative 35
consequences of the transaction would outweigh any potential 36
benefits. In assessing the disadvantages attributable to a reduction in 37
competition likely to result from consummation of the transaction, the 38
court may rely upon determinations by federal courts and North 39
Carolina courts concerning unreasonable restraint of trade and 40
antitrust violations. 41
(5) In determining whether the State Auditor, Attorney General, and State 42
Treasurer have met the burden of proof under subdivision (4) of this 43
subsection, the court should consider evidence of any of the applicable criteria 44
listed in G.S. 131E-214.32. 45
(6) The court may issue a decision approving the transaction, approving the 46
transaction subject to modification, or disapproving the transaction. Any party 47
may appeal a decision of the court approving the transaction subject to 48
modification, except the State Auditor, Attorney General, and State Treasurer 49
shall not appeal a decision of the court approving the transaction subject to the 50 General Assembly Of North Carolina Session 2025
Page 10 Senate Bill 532-First Edition
same modifications initially sought by the State Auditor, Attorney General, 1
and State Treasurer. 2
(d) If the hospital entity is a for-profit entity: 3
(1) The State Auditor, Attorney General, and State Treasurer shall file an action 4
in the name of the State seeking injunctive relief to restrain the parties from 5
taking further action to consummate the transaction. The court may issue an 6
order granting such injunctive relief. 7
(2) The State Auditor, Attorney General, and State Treasurer may apply to the 8
court for temporary or preliminary injunctive relief pending final disposition 9
of the case. 10
(3) The State Auditor, Attorney General, and State Treasurer shall name as 11
defendants the hospital entity and the acquiring entity. 12
(4) In any action brought pursuant to this subsection, the State Auditor, Attorney 13
General, and State Treasurer shall have the burden of establishing by clear and 14
convincing evidence that consummation of the transaction would have 15
significant and deleterious effects on cost, availability, accessibility, and 16
quality of healthcare in the State or any portion of the State and that the 17
negative consequences of such a transaction outweigh any potential benefits. 18
In assessing disadvantages attributable to a reduction in competition likely to 19
result from consummation of the transaction, the court may rely upon 20
determinations by federal courts and North Carolina courts concerning 21
unreasonable restraint of trade and antitrust violations. 22
(5) In determining whether the State Auditor, Attorney General, and State 23
Treasurer have met the burden of proof under subdivision (4) of this 24
subsection, the court should consider evidence of any of the applicable criteria 25
listed in G.S. 131E-214.32. 26
(6) The court may issue a final determination approving the transaction, 27
approving the transaction subject to modification, or disapproving the 28
transaction. Any party may appeal a decision of the court approving the 29
transaction subject to modification, except the State Auditor, Attorney 30
General, and State Treasurer shall not appeal a decision of the court approving 31
the transaction subject to the same modification the State Auditor, Attorney 32
General, and State Treasurer initially sought. 33
(e) Any party to a transaction that is subject to review under this Article may decline to 34
enter into a transaction that has been modified by order of the court upon a final determination. 35
However, if the parties agree to enter into a transaction that has been modified by order of the 36
court upon a final determination, then the modified transaction shall not be subject to renewed 37
objection from the State Auditor, Attorney General, and State Treasurer. 38
"§ 131E-214.40. Post-transaction reporting; authorization to file further action. 39
(a) Following a decision by the State Auditor, Attorney General, and State Treasurer not 40
to object to a transaction subject to review under this Article, or following a final decision in a 41
judicial proceeding brought pursuant to G.S. 131E-214.38, the acquiring entity shall submit to 42
the State Auditor, Attorney General, and State Treasurer an annual report on the acquiring entity's 43
compliance with the terms of the purchase agreement for the transaction, including any 44
representations made to, or modifications made by, the State Auditor, Attorney General, and 45
State Treasurer. The State Auditor, Attorney General, and State Treasurer shall adopt rules 46
specifying the required contents of the annual report required by this subsection. 47
(b) If the hospital entity that is a party to the transaction is a nonprofit or publicly owned 48
entity, the acquiring entity or any foundation or charitable trust established pursuant to the 49
transaction shall, in addition to submitting the annual report required by subsection (a) of this 50
section, report annually to the State Auditor, Attorney General, and State Treasurer on its 51 General Assembly Of North Carolina Session 2025
Senate Bill 532-First Edition Page 11
charitable activities and the disposition of its charitable assets in the manner and form prescribed 1
by the State Auditor, Attorney General, and State Treasurer. 2
(c) If the State Auditor, Attorney General, and State Treasurer deem it reasonable and 3
necessary to do so based on the acquiring entity's failure to comply with the terms of the 4
agreement approved by the State Auditor, Attorney General, and State Treasurer or by a court 5
pursuant to G.S. 131E-214.28, including any modifications to the agreement made by the State 6
Auditor, Attorney General, and State Treasurer, then the State Auditor, Attorney General, and 7
State Treasurer may file an action for relief to restore the benefits of healthcare provider 8
competition in any part of the State, subject to all of the following: 9
(1) If the transaction was approved only after a final judicial determination 10
pursuant to G.S. 131E-214.38, the State Auditor, Attorney General, and State 11
Treasurer shall file the action in the same court that made the final judicial 12
determination. If the transaction was approved by the State Auditor, Attorney 13
General, and State Treasurer without a final judicial determination pursuant 14
to G.S. 131E-214.38, the State Auditor, Attorney General, and State Treasurer 15
may file an action in either (i) the superior court of any county in which there 16
exists a hospital entity whose control or governance would be altered by the 17
proposed transaction or (ii) the superior court of the county in which the 18
acquiring entity's principal place of business is located, if located within the 19
State. 20
(2) The State Auditor, Attorney General, and State Treasurer may seek any relief 21
necessary to remedy a violation of the agreement. 22
(3) The State Auditor, Attorney General, and State Treasurer have the burden of 23
demonstrating by clear and convincing evidence that the benefits of the relief 24
sought to restore the benefits of healthcare provider competition in any part of 25
the State clearly outweigh the costs of doing so, including the transactional 26
costs associated with doing so and any likelihood that the resulting market 27
would not provide the benefits of healthcare provider competition in any part 28
of the State. 29
(4) No such action may be brought more than five years after the consummation 30
of a transaction. 31
(d) After consummation of a transaction, an acquiring entity shall not change the financial 32
assistance policy regarding patients who are uninsured or underinsured that were in effect for the 33
hospital entity immediately preceding consummation of the transaction without first providing 34
120 days' notice, in writing, to the Attorney General; its hospital staff, including physicians in a 35
contractual relationship with the acquiring entity; and patients who have previously benefited 36
from the hospital entity's financial assistance policy. This subsection does not prohibit an 37
acquiring entity from increasing the applicable income limits used to determine patient eligibility 38
for financial assistance at any time following consummation of the transaction, and it does not 39
require an acquiring entity to provide prior notice to the State Auditor, Attorney General, and 40
State Treasurer about the increased income limits. In order to meet the notice requirements of 41
this subsection with respect to patients who have previously benefited from the hospital entity's 42
financial assistance policy, the acquiring entity shall do all of the following: 43
(1) Provide written notice to both the patient's last known mailing address and to 44
the email address on file for the patient that includes at least all of the 45
following: 46
a. A description of how the acquiring entity's new financial assistance 47
policy will differ from the hospital entity's financial assistance policy. 48
b. A description of the process for obtaining financial assistance under 49
the acquiring entity's new financial assistance policy, including a list 50
of (i) all forms a patient would be required to complete in order to be 51 General Assembly Of North Carolina Session 2025
Page 12 Senate Bill 532-First Edition
eligible for financial assistance and (ii) all documents a patient would 1
be required to produce as part of the acquiring entity's new financial 2
assistance policy. 3
c. A link to a webpage that allows members of the public to view the new 4
financial assistance policy and any forms a patient would be required 5
to complete in order to be eligible for financial assistance. 6
d. A toll-free telephone number for patients to call to ask questions about 7
the acquiring entity's new financial assistance policy. 8
(2) Educate all physicians affiliated with the acquiring entity, including 9
physicians in a contractual relationship with the acquiring entity, on the new 10
financial assistance policy. Physicians shall verbally inform patients about the 11
new financial assistance policy at appointments occurring during the 120-day 12
notice period required by this subsection. 13
"§ 131E-214.42. Violations; penalties; preservation of statutory and common law authority 14
of the State Auditor, Attorney General, and State Treasurer. 15
(a) Any transactions entered into in violation of this Article shall be null and void. 16
(b) Each member of the governing boards and each chief financial officer of the parties 17
to a transaction entered into in violation of this Article are subject to a civil penalty of up to fifty 18
thousand dollars ($50,000) each per transaction, unless the violation was made in wanton 19
disregard of the law, in which case the civil penalty may be up to one million dollars ($1,000,000) 20
each per transaction. The State Auditor, Attorney General, and State Treasurer shall institute 21
proceedings to impose a civil penalty authorized by this section in a court of competent 22
jurisdiction in Wake County, and the court shall determine the amount of the civil penalty to be 23
imposed under this section. The clear proceeds of civil penalties provided for in this subsection 24
shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. 25
(c) The Department of Health and Human Services shall not issue a new or renewal 26
license to operate a hospital under Article 5 of Chapter 131E of the General Statutes, or any 27
applicable rules, on behalf of any hospital that is a party to a transaction entered into in violation 28
of the notice, public hearing, and review requirements of this Article. 29
(d) Nothing in this Article shall be construed to limit the statutory or common law 30
authority of the State Auditor, Attorney General, or State Treasurer to protect charitable trusts 31
and assets located in this State. The penalties and remedies set forth in this Article are in addition 32
to, and not a replacement for, any other civil or criminal actions the State Auditor, Attorney 33
General, or State Treasurer is authorized by statute or common law to file, including actions 34
seeking rescission of a transaction, injunctive relief, or any combination of these, and other 35
remedies available under statute or common law." 36
SECTION 2. This act becomes effective December 1, 2025, and applies to activities 37
occurring on or after that date. 38