Senate File 414 - Introduced SENATE FILE 414 BY WEINER , DONAHUE , DOTZLER , WINCKLER , CELSI , ZIMMER , TOWNSEND , STAED , PETERSEN , and QUIRMBACH A BILL FOR An Act relating to the review and approval by the department of 1 inspections, appeals, and licensing of housing and health 2 care facility acquisitions by private equity firms. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2355XS (5) 91 sc/ns

S.F. 414 Section 1. NEW SECTION . 10A.110 Private equity firm 1 acquisitions —— housing —— health care facilities. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “Acquisition” means a transaction in which an entity 5 gains the ability to direct or influence the management and 6 policies of housing or a health care facility, including but 7 not limited to through the ownership of voting securities, 8 real estate leasing, or by a contract other than a commercial 9 contract for goods or nonmanagement services. 10 b. “Health care facility” means a hospital as defined in 11 section 135B.1, a health care facility as defined in section 12 135C.1, a subacute care facility as defined in section 135G.1, 13 a psychiatric institution as defined in section 135H.1, a 14 hospice program as defined in section 135J.1, or an ambulatory 15 surgical center as defined in section 135R.1. 16 c. “Housing” means a structure or part of a structure that 17 is used as a home, residence, or sleeping place and includes 18 the property on which the structure lies. “Housing” includes a 19 manufactured home as defined in section 414.28. 20 d. “Private equity firm” means an investor or group of 21 investors who primarily engage in the raising or returning 22 of capital and who invest, develop, or dispose of specified 23 assets. “Private equity firm” does not mean a person who 24 contributes or promises to contribute moneys to a private 25 equity firm, but does not otherwise participate in or have 26 control over the management of the private equity firm or the 27 private equity firm’s assets. 28 2. The department shall review any acquisition by a private 29 equity firm. 30 3. The department shall not approve an acquisition unless 31 the department determines that the acquisition is in the public 32 interest after considering whether the acquisition has the 33 potential to reduce access to quality, affordable housing 34 or health care facilities. The department shall not grant 35 -1- LSB 2355XS (5) 91 sc/ns 1/ 3

S.F. 414 approval to an acquisition if the department finds that the 1 acquisition is likely to reduce access to quality, affordable 2 housing or health care services. 3 4. A private equity firm shall not complete an acquisition 4 prior to receiving approval from the department. A private 5 equity firm shall provide the department with notice sixty days 6 prior to the intended acquisition. 7 5. Upon request, a private equity firm shall provide to the 8 department any of the following: 9 a. The terms of the acquisition agreement. 10 b. Any plan to close a health care facility or reduce the 11 health care facility’s workforce or health care services. 12 c. Any plan to expand a health care facility, the health 13 care facility’s workforce, or health care services. 14 d. Any plan to alter the current listed purchase price for 15 housing, rental, or property prices. 16 e. The latest property assessment of the housing or health 17 care facility property. 18 f. Audited and unaudited financial statements from each 19 entity involved in the acquisition and tax filings for each 20 entity involved in the acquisition from the preceding five 21 fiscal years. 22 g. Any other information relevant to evaluating the 23 acquisition. 24 6. The department shall post notice of any pending 25 acquisition on the department’s internet site and allow for 26 public comment on the acquisition. The department may hold 27 public forums to obtain input on a proposed acquisition from 28 persons who may be impacted. 29 7. The department may initiate an action to seek an 30 injunction to restrain any violations of this section. 31 8. The department may adopt rules pursuant to chapter 17A to 32 implement this section. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -2- LSB 2355XS (5) 91 sc/ns 2/ 3

S.F. 414 the explanation’s substance by the members of the general assembly. 1 This bill requires the department of inspections, appeals, 2 and licensing (DIAL) to review any acquisition of housing or 3 health care facilities by a private equity firm. The bill 4 prohibits a private equity firm from completing an acquisition 5 without approval from DIAL and requires a private equity firm 6 to give notice to DIAL of the intended acquisition 60 days 7 before the intended acquisition. The bill prohibits DIAL 8 from approving an acquisition unless DIAL determines that 9 the acquisition is in the public interest, which means the 10 acquisition must not be likely to reduce access to quality, 11 affordable housing or health care services. The bill requires 12 a private equity firm to provide information concerning the 13 acquisition to DIAL upon request. 14 The bill provides that DIAL must post notice of any pending 15 acquisition on DIAL’s internet site and allow for public 16 comment. DIAL may also hold public forums on a pending 17 acquisition. 18 The bill allows DIAL to seek an injunction to enforce the 19 bill’s provisions. 20 -3- LSB 2355XS (5) 91 sc/ns 3/ 3