(a) Except as provided in this section, the transfer of a certificate of need renders the certificate of need and all rights under it void. As used in this section, “transfer” means the sale, assignment, lease, conveyance, purchase, grant, donation, gift, or other direct or indirect transfer of any nature whatsoever of a certificate of need. However, this section does not prohibit the transfer of a certificate of need in the following circumstances:

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Terms Used In Tennessee Code 68-11-1618

  • Certificate of need: means a permit granted by the health facilities commission to a person for those services specified as requiring a certificate of need under §. See Tennessee Code 68-11-1602
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Facility: means real property owned, leased, or used by a healthcare institution for any purpose, other than as an investment. See Tennessee Code 68-11-1602
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
(1) If the transfer has been approved by the commission after the commission determines that the new holder of the certificate of need would provide health care that meets appropriate quality standards, and that the transfer would not reduce access to consumers, particularly those in underserved communities; those who are uninsured or underinsured; women and racial and ethnic minorities; TennCare or medicaid recipients; and low-income groups; and
(2) If the certificate of need is transferred as part of the transfer of ownership of a licensed healthcare institution.
(b)

(1) With regard to a certificate of need for the establishment of a proposed new healthcare institution, a change of control of the entity prior to completion or licensing renders the certificate of need and all rights under it null and void. “Change of control” means:

(A) In the case of a partnership, the termination of interest of a general partner;
(B) In the case of a limited liability company or limited liability partnership, a change in the composition of members or partners to the extent that the management or membership control is different than that described in the certificate of need application; and
(C) In the case of a corporation, the termination of interest of a shareholder or shareholders controlling more than fifty percent (50%) of the outstanding voting stock of the corporation.
(2) Subdivision (b)(1) does not prohibit change of control as described in subdivision (b)(1), if the commission determines, upon petition of the prospective owner or owners of the entity, that the prospective owner or owners demonstrate that the owner or owners will provide health care that meets appropriate quality standards, and that the transfer would not reduce access to consumers, particularly those in underserved communities; those who are uninsured or underinsured; women and racial and ethnic minorities; TennCare or medicaid recipients; and low-income groups.
(c) A certificate of need, and the rights under the certificate of need, are null and void if it is the subject of a development contract or agreement to sell or lease the facility that was not fully disclosed in the application.
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