BILL NUMBER: SB 1221 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 28, 2008
PASSED THE ASSEMBLY AUGUST 20, 2008
AMENDED IN ASSEMBLY AUGUST 18, 2008
AMENDED IN ASSEMBLY JULY 1, 2008
AMENDED IN ASSEMBLY JUNE 18, 2008
AMENDED IN SENATE MAY 14, 2008
AMENDED IN SENATE APRIL 21, 2008
INTRODUCED BY Senator Kuehl
FEBRUARY 14, 2008
An act to repeal and add Section 15438.5 of the Government Code,
and to add Part 7 (commencing with Section 1179.100) to Division 1 of
the Health and Safety Code, relating to health facility financing.
LEGISLATIVE COUNSEL'S DIGEST
SB 1221, Kuehl. Health facility financing.
Existing law authorizes, if a health facility seeking financing
for a project pursuant to the California Health Facilities Financing
Authority Act does not meet the guidelines established by the
California Health Facilities Financing Authority with respect to bond
rating, the authority to give special consideration, on a
case-by-case basis, to financing the project if the health facility
demonstrates to the satisfaction of the authority the financial
feasibility of the project, and the performance of significant
community service. For the purposes of these provisions, a health
facility that performs a significant community service is one that
contracts with Medi-Cal or that can demonstrate that it has fulfilled
specified criteria regarding community service.
This bill would require any participating health institution,
except for specified children's hospitals, seeking financing for a
project from the authority, a city, county, special district, or a
joint powers authority, to demonstrate the performance of community
service, of each project location, as specified.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 15438.5 of the Government Code is repealed.
SEC. 2. Section 15438.5 is added to the Government Code, to read:
15438.5. (a) In enacting this part, the Legislature intends for
the authority to assist in the provision of tax-exempt financing only
to participating health institutions that can demonstrate the
financial feasibility of the proposed project to be financed or the
creditworthiness of the obligors with respect to the requested
financing. It is further the intent of the Legislature that all or
part of any savings experienced by a participating health
institution, as a result of the tax-exempt financing, be passed on
for the benefit of the public in the form of community service
described in this section. Further, it is not the intent of the
Legislature to authorize the authority to control or participate in
the operation of health facilities, except where default occurs or
appears likely to occur.
(b) When determining the financial feasibility of projects, the
authority shall consider the more favorable interest rates reasonably
anticipated through the issuance of revenue bonds under this part.
It is the intent of the Legislature that the authority attempt in
whatever ways possible to assist participating health institutions to
arrange projects that will meet the financial feasibility standards
developed under this part.
(c) Except for a participating health institution that operates as
a children's hospital described in Section 10727 of the Welfare and
Institutions Code, and except as provided in subdivision (d), a
participating health institution seeking financing for a project
pursuant to this part shall, for each project location, demonstrate,
to the satisfaction of the authority, the performance of community
service, by submitting to the authority all of the following:
(1) A copy of its policy of treating all patients without regard
to ability to pay, in accordance with Section 1317 of the Health and
Safety Code or, if the applicant is not subject to that section, a
copy of its policy for providing emergency services without regard to
a patient's ability to pay.
(2) Confirmation that the applicant maintains a California Medical
Assistance Commission (CMAC) Contract, otherwise provides for the
treatment of Medi-Cal eligible patients, or otherwise provides
services to low-income individuals.
(3) A copy of its charity care policy pursuant to Section 127405
of the Health and Safety Code.
(4) Confirmation that it maintains a mechanism for tracking and
reporting its costs, charges, and clinical quality data, to the
extent required by state and federal agencies.
(5) A copy of the most recent community benefits plan, as defined
in subdivision (a) of Section 127345 of the Health and Safety Code,
including an implementation schedule and economic valuation of the
community benefits as set forth in Sections 127350 and 127355 of the
Health and Safety Code.
(d) (1) If a participating health institution that is a hospital
subject to the community benefits requirements of Article 2
(commencing with Section 127340) of Chapter 2 of Part 2 of Division
107 of the Health and Safety Code does not submit the information
described in paragraphs (1) to (5), inclusive, of subdivision (c),
the participating health institution shall demonstrate to the
satisfaction of the authority the performance of community service by
submitting to the authority the most recent community benefits plan
of the hospital. The participating health institution shall identify
its priorities, as determined by the community needs assessment, and
demonstrate that it has taken action on most of these priorities.
(2) If a participating health institution is not a hospital
subject to the community benefits requirements of Article 2
(commencing with Section 127340) of Chapter 2 of Part 2 of Division
107 of the Health and Safety Code, but is a nonhospital affiliate of
a participating health institution, the participating health
institution shall demonstrate to the authority the performance of
community service by submitting to the agency any item of information
described in paragraphs (1) to (5), inclusive, of subdivision (c) or
by other means, as described in paragraph (3). For purposes of this
section, a "nonhospital affiliate" means a nonhospital entity
organized under the laws of the state which is directly controlled by
or under common control or having a governing board identical with
the participating health institution or any other affiliate of the
participating health institution. For purposes of this paragraph,
"control" means the power to direct the management and policies of an
entity through the ownership of at least a majority of its voting
securities or the right to designate or elect at least a majority of
the members of its board of directors by contract or otherwise.
(3) If a participating health institution is neither a hospital
subject to the community benefits requirements of Article 2
(commencing with Section 127340) of Chapter 2 of Part 2 of Division
107 of the Health and Safety Code or a nonhospital affiliate, and
does not submit any of the items of information described in
paragraphs (1) to (5), inclusive, of subdivision (c), the
participating health institution shall demonstrate to the authority
the performance of community service by other means, including, but
not limited to, providing a certification that the participating
health institution is a federally qualified health center, or a
primary care clinic described in subdivision (a) of Section 1204 of,
subdivision (c) of Section 1206 of, or subdivision (h) of Section
1206 of, the Health and Safety Code.
(e) Enforcement of the conditions under which the authority issues
bonds pursuant to this section shall be governed by the enforcement
conditions under Section 15459.4.
(f) Notwithstanding any other provision of law, nothing in this
section nor any enforcement proceeding brought pursuant to this
section shall affect the validity or enforceability of any bonds
issued by the authority under this part.
SEC. 3. Part 7 (commencing with Section 1179.100) is added to
Division 1 of the Health and Safety Code, to read:
PART 7. Local Financing of Health Facilities
1179.100. For purposes of this part, the following definitions
shall apply:
(a) "Health facility" shall have the same meaning as set forth in
subdivision (d) of Section 15432 of the Government Code.
(b) "Local agency" means a city, county, special district, or
joint powers authority.
(c) "Participating health institution" means a city, county, or
city and county, a district hospital, or a private nonprofit
corporation or association authorized by the laws of this state to
provide or operate a health facility and that, with the assistance of
a local agency, undertakes the financing or refinancing of a project
or of working capital.
(d) "Project" shall have the meaning set forth in Section 15432 of
the Government Code.
1179.101. (a) In enacting this part, the Legislature intends for
a local agency to assist in the provision of tax-exempt financing
only to a participating health institution that can demonstrate the
financial feasibility of the proposed project to be financed or the
creditworthiness of the obligors with respect to the requested
financing. It is further the intent of the Legislature that all or
part of any savings experienced by a participating health
institution, as a result of the tax-exempt financing, be passed on
for the benefit of the public in the form of community service
described in this section. Further, it is not the intent of the
Legislature to authorize a local agency to control or participate in
the operation of health facilities, except where default occurs or
appears likely to occur.
(b) Except for a participating health institution that operates as
a children's hospital described in Section 10727 of the Welfare and
Institutions Code and except as provided in subdivision (c), a
participating health institution seeking financing for a project
pursuant to this part shall, for each project location, demonstrate,
to the satisfaction of the local agency the performance of community
service, by submitting to the local agency all of the following:
(1) A copy of its policy of treating all patients without regard
to ability to pay, in accordance with Section 1317 or, if the
applicant is not subject to that section, a copy of its policy for
providing emergency services without regard to a patient's ability to
pay.
(2) Confirmation that the applicant maintains a California Medical
Assistance Commission (CMAC) Contract, otherwise provides for the
treatment of Medi-Cal eligible patients, or otherwise provides
services to low-income individuals.
(3) A copy of its charity care policy pursuant to Section 127405.
(4) Confirmation that it maintains a mechanism for tracking and
reporting its costs, charges, and clinical quality data, to the
extent required by state and federal agencies.
(5) A copy of the most recent community benefits plan, as defined
in subdivision (a) of Section 127345, including an implementation
schedule and economic valuation of the community benefits as set
forth in Sections 127350 and 127355.
(c) (1) If a participating health institution that is a hospital
subject to the community benefits requirements of Article 2
(commencing with Section 127340) of Chapter 2 of Part 2 of Division
107 does not submit the information described in paragraphs (1) to
(5), inclusive, of subdivision (b), the participating health
institution shall demonstrate to the satisfaction of the local agency
the performance of community service by submitting to the local
agency the most recent community benefits plan of the hospital. The
participating health institution shall identify its priorities, as
determined by the community needs assessment, and demonstrate that it
has taken action on most of these priorities.
(2) If a participating health institution is not a hospital
subject to the community benefits requirements of Article 2
(commencing with Section 127340) of Chapter 2 of Part 2 of Division
107, but is a nonhospital affiliate of a participating health
institution, the participating health institution shall demonstrate
to the local agency the performance of community service by
submitting to the local agency any item of information described in
paragraphs (1) to (5), inclusive, of subdivision (b) or by other
means, as described in paragraph (3). For purposes of this section, a
"nonhospital affiliate" means a nonhospital entity organized under
the laws of the state which is directly controlled by or under common
control or having a governing board identical with the participating
health institution or any other affiliate of the participating
health institution. For purposes of this paragraph, "control" means
the power to direct the management and policies of an entity through
the ownership of at least a majority of its voting securities or the
right to designate or elect at least a majority of the members of its
board of directors by contract or otherwise.
(3) If a participating health institution is neither a hospital
subject to the community benefits requirements of Article 2
(commencing with Section 127340) of Chapter 2 of Part 2 of Division
107 or a nonhospital affiliate, and does not submit any of the items
of information described in paragraphs (1) to (5), inclusive, of
subdivision (b), the participating health institution shall
demonstrate to the local agency the performance of community service
by other means, including, but not limited to, providing a
certification that the participating health institution is a
federally qualified health center, or a primary care clinic described
in subdivision (a) of Section 1204, subdivision (c) of Section 1206,
or subdivision (h) of Section 1206.
(d) The remedies and sanctions available to the local agency for
failure by a participating health institution to comply with this
section shall include referring the alleged violation to the office
of the Attorney General for legal action as described in Section
15459.4 of the Government Code.
(e) Notwithstanding any other provision of law, nothing in this
section nor any enforcement proceeding brought pursuant to this
section shall affect the validity or enforceability of any bonds
issued, or other form of financing provided, by a local agency.