BILL NUMBER: AB 2731	ENROLLED
	BILL TEXT

	PASSED THE SENATE  JUNE 17, 2010
	PASSED THE ASSEMBLY  MAY 13, 2010
	AMENDED IN ASSEMBLY  APRIL 8, 2010

INTRODUCED BY   Assembly Member Arambula

                        FEBRUARY 19, 2010

   An act to amend Section 32127.3 of the Health and Safety Code,
relating to health care districts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2731, Arambula. Health care districts: federal loans or grants.

   Existing law provides for the formation and establishes the powers
of a health care district. Existing law places limits on the extent
to which a health care district may borrow money and incur
indebtedness.
   Existing law authorizes the board of directors of any district to
borrow money or issue bonds and to execute first mortgages, first
deeds of trust, or other necessary security interests exclusively for
the purpose of securing federal mortgage insurance, federal loans,
or federally insured loans issued pursuant to the federal National
Housing Act for financing or refinancing the construction of new
health facilities, the expansion, modernization, renovation,
remodeling, or alteration of existing health facilities, and the
initial equipping of those health facilities under the federal
mortgage insurance programs available to a local hospital district.
   This bill would add to the purposes for which the board of
directors of a district may borrow money, issue bonds, or execute
first mortgages, first deeds of trust, or other security interests,
the purpose of securing federal loans or grants or guaranteed loans
issued pursuant to the federal Consolidated Farm and Rural
Development Act, as specified.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 32127.3 of the Health and Safety Code is
amended to read:
   32127.3.  (a) Exclusively for the purpose of securing federal
mortgage insurance, federal loans, federal loans or grants or
guaranteed loans issued pursuant to the federal Consolidated Farm and
Rural Development Act (7 U.S.C. Sec. 1921, et seq.), as amended by
Public Law 109-171 on February 8, 2006, or federally insured loans
issued pursuant to the National Housing Act (12 U.S.C. Secs. 1715w
and 1715z-7) for financing or refinancing the construction of new
health facilities, the expansion, modernization, renovation,
remodeling, or alteration of existing health facilities, and the
initial equipping of those health facilities under the federal
mortgage insurance programs as are now or may hereafter become
available to a local hospital district, and notwithstanding any
provision of this division, or any other provision or holding of law,
the board of directors of any district may do either or both of the
following:
   (1) Borrow money or issue bonds, in addition to other financing
methods authorized under this division.
   (2) Execute, in favor of the United States, appropriate federal
agency, or federally designated mortgagor, first mortgages, first
deeds of trust, or other necessary security interests as the federal
government may reasonably require with respect to a health facility
project property as security for that insurance.
   (b) No payments of principal, interest, insurance premiums and
inspection fees, and all other costs of financing obtained as
authorized by this section shall be made from funds derived from the
district's power to tax.
   (c) The Legislature hereby determines and declares that the
authorizations for executing the mortgages, deeds of trust, or other
necessary security agreements by the board and for the enforcement of
the federal government's rights thereunder are in the public
interest in order to preserve and promote the health, welfare, and
safety of the people of the state by providing, without cost to the
state, a federal mortgage insurance program for health facility
construction loans in order to stimulate the flow of private capital
into health facilities construction to enable the critical need for
new, expanded, and modernized public health facilities to be met.
   (d) The Legislature further determines and declares that the
United States, appropriate federal agency, or federally designated
mortgagor named as beneficiary of any first mortgage or other
security interest delivered as authorized by this section is not a
private person or body within the meaning of Section 11 of Article XI
of the California Constitution.