§22-21-270. Certificates of need - Period for which valid; extension of time; termination; transferability.

(a) A certificate of need issued under subsection (a) of Section 22-21-265 and Section 22-21-268 shall be valid for a period not to exceed 12 months and may be subject to one extension not to exceed 12 months, provided the criteria for extension as set forth in the rules and regulations of the SHPDA are met. Applications for an extension filed under this section shall be accompanied by a filing fee to be established by rule, not to exceed 25 percent of the original CON application fee. If no obligation has occurred within such period, the certificate of need shall be considered terminated and shall be null and void. Should the obligation be incurred within such valid period, the certificate of need shall be continued in effect for a period not to exceed one year or the completion of the construction project, whichever shall be later, or the inauguration of the service or the actual purchase of equipment.

(b) Failure to commence the construction project within the time period stated in the construction contract or to complete the construction project within the time period specified in the construction contract, which may be extended by mutual agreement of the parties to the contract, shall render the certificate of need null and void, unless tolled or extended pursuant to statute or SHPDA rule or regulation. Provided, the SHPDA, or an administrative law judge appointed by the Governor on appeal for a fair hearing, may for causes beyond the control of the applicant, continue the certificate of need in force if commencement of the construction project is delayed for a period not to exceed 60 days or if during the specified construction period the construction work should cease for not more than six months, or in the event of default in the construction contract by the contractor, or if, for any cause, the construction work has not ceased or otherwise been stopped for a period exceeding 60 consecutive days.

(c) Applicants who held valid certificates of need which were terminated under this section may file a new application for a certificate pursuant to and subject to the provisions of this article.

(d) Upon completion of the construction and issuance of a certificate of completion or the receipt of proof of purchase of equipment or inauguration of a new health service, the certificate of need shall be vested in and continued in force and effect as a part of the health care facility and shall survive changes of control and changes of ownership of the health care facility without further certificate of need approval by this agency.

(e) Prior to becoming vested under subsection (d), a certificate of need shall not be transferable, assignable, or convertible other than to an entity under common ownership and control. As used in this subsection only, "ownership and control" means ownership, directly or through one or more affiliates, of 50 percent or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or 50 percent or more of the voting equity interests in the case of any other type of legal entity, or status as a general partner in any partnership, or any other arrangement whereby an entity including, without limitation, any governmental entity, controls or has the right to control the selection of 50 percent or more of the board of directors, managing members, or equivalent governing body of a legal entity. An "affiliate" under the preceding sentence means any corporation, limited liability company, partnership, or other legal entity that directly or indirectly controls or is controlled by or is under common control with such entity. Any agreement entered into by an applicant, prior to the issuance of a certificate of need, to transfer ownership or control of such health care facility to another person after the certificate becomes vested shall be disclosed to SHPDA prior to a decision by the Certificate of Need Review Board to grant or deny such certificate.

(f) Notwithstanding any other provisions of this article, the transfer of equity interests in, or change of name or merger of, any legal entity which holds a certificate of need shall not constitute a transfer, assignment, or conversion of the certificate of need. The transaction is not subject to certificate of need approval under this article unless the transaction also involves implementing one or more of the new institutional health services or a new health care facility or health maintenance organization described in subdivisions (2), (3), or (4) of Section 22-21-263(a). The preceding sentence is applicable to all transactions occurring on or after July 30, 1979.

(g) SHPDA may adopt rules requiring the submission of informational filings relating to a transfer of control or ownership interests under subsections (d), (e), and (f).

(h) The provisions of this section are applicable to all transactions occurring on or after July 30, 1979.

(Acts 1977, 1st Ex. Sess., No. 82, p. 1509, §11; Acts 1982, 2nd Ex. Sess., No. 82-770, p. 249, §10; Act 98-341, p. 597, §1; Act 2012-294, p. 620, §1; Act 2013-192, p. 350, §1.)