BILL NUMBER: SB 869 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY OCTOBER 7, 2010
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 11, 2010
An act relating to the Budget Act of 2010.
An act to amend Section 15432 of the Government Code, and to amend
Sections 129275, 1 29280, 129285, and 129295 of the Health
and Safety Code, relating to developmental services, declaring the
urgency thereof, to take effect immediately, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 869, as amended, Committee on Budget and Fiscal Review.
Budget Act of 2010. Loan programs for
facilities for persons with developmental disabilities.
Under existing law, the California Health Facilities Financing
Authority Act, the California Health Facilities Financing Authority
administers various provisions relating to the financing of health
facility projects, including construction and renovation projects.
Existing law includes within the definition of a health facility, for
purposes of the act, a residential facility, which is defined to
include a residential facility for persons with developmental
disabilities, as provided for under the provisions permitting
proposals for housing for these persons to be approved by the
department. Existing law specifically exempts from this definition a
residential facility for persons with special health care needs, as
defined.
This bill would delete this exemption.
The California Health Facilities Financing Authority Act also
defines "participating health institution" to mean a city, city and
county, or 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 undertakes the
financing or refinancing of the construction or acquisition of a
project or of working capital.
This bill would add to this definition a limited liability company
whose sole member is a nonprofit corporation or association to which
the above-described conditions apply.
Existing law, the Small Facility Loan Guarantee for Developmental
Disability Programs, creates a program to provide loan insurance to
nonprofit corporations that provide community-based programs that
assist clients with developmental disabilities that live in
institutional settings to move to more independent living
arrangements.
This bill would rename those provisions as the Small Facility Loan
Guarantee for Programs Serving People with Developmental
Disabilities.
Under existing law, facilities approved by area developmental
disabilities boards are eligible for loan insurance pursuant to the
program if they meet specified criteria.
Existing law provides, with respect to loan eligibility, that
facilities shall not require prescribed approval for the issuance of
loan insurance if a specified determination is made.
This bill would delete this provision.
Existing law, known as the Bay Area Housing Program, permits the
State Department of Developmental Services to approve a proposal by
Golden Gate Regional Center, Regional Center of the East Bay, and San
Andreas Regional Center to provide for, secure, and ensure the full
payment of a lease or leases on housing for persons with
developmental disabilities, if prescribed conditions are met.
This bill would require, under the loan insurance program, that
these regional centers provide for, secure, and ensure the full
payment of a lease or leases developed pursuant to these housing
proposal provisions.
Existing law creates the California Housing Finance Fund, which is
continuously appropriated to the California Housing Finance Agency
for the purpose of making housing construction loans.
The bill would also allow, upon the order of the Director of
Finance, a loan from the General Fund to the California Housing
Finance Fund in an amount not to exceed the unpaid principal balance
of loans for the above-described housing, but not more than
$88,000,000, in a specified situation and to be repaid from proceeds
of the California Health Facilities Financing Authority's issuance of
bonds for the program prior to June 30, 2011.
Existing law requires that the total amount of loans insured
pursuant to this program not exceed $15,000,000 and gives preference
for loans under $300,000 to single facilities that will serve 6 or
fewer persons. Under existing law, loans up to $300,000 may be
insured for the total construction amount.
This bill would allow loans to be insured for the cost of
construction, improvement, and expansion, which may exceed the
current value of the health facility when supported by other security
for, or guaranty of, the debt. The bill would increase the total
amount of loans that may be insured pursuant to the program to
$100,000,000.
Existing law also provides for a pilot program, not to exceed 30
facilities, to insure loans to nonprofit borrowers that are not
licensed to operate the facilities, as specified, and limits the
aggregate amount of the loans insured through this pilot program to
$6,000,000.
This bill would eliminate the designation of this program as a
pilot program. It would limit eligible borrowers to those that have a
long-term residency lease, as defined, with a service provider
selected by the applicable regional center. It would provide that the
number of facilities that could be insured would be increased from
30 to 100 and the total aggregate amount of these loans insured would
be increased to $100,000,000.
Existing law establishes the Health Facility Construction Loan
Insurance Fund in the State Treasury, to be continuously appropriated
to carry out the provisions and administrative costs of the
California Health Facility Construction Loan Insurance Law, including
the program for insuring loans relating to facilities for people
with developmental disabilities described above.
By increasing the aggregate amount of the loans that may be
insured through this program and by expanding program eligibility,
this bill would constitute an appropriation.
This bill would declare that it is to take effect immediately as
an urgency statute.
This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2010.
Vote: majority 2/3 . Appropriation:
no yes . Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 15432 of the
Government Code is amended to read:
15432. As used in this part, the following words and terms shall
have the following meanings, unless the context clearly indicates or
requires another or different meaning or intent:
(a) "Act" means the California Health Facilities Financing
Authority Act.
(b) "Authority" means the California Health Facilities Financing
Authority created by this part or any board, body, commission,
department, or officer succeeding to the principal functions thereof
or to which the powers conferred upon the authority by this part
shall be given by law.
(c) "Cost," as applied to a project or portion of a project
financed under this part, means and includes all or any part of the
cost of construction and acquisition of all lands, structures, real
or personal property, rights, rights-of-way, franchises, easements,
and interests acquired or used for a project, the cost of demolishing
or removing any buildings or structures on land so acquired,
including the cost of acquiring any lands to which those buildings or
structures may be moved, the cost of all machinery and equipment,
financing charges, interest prior to, during, and for a period not to
exceed the later of one year or one year following completion of
construction, as determined by the authority, the cost of insurance
during construction, the cost of funding or financing noncapital
expenses, reserves for principal and interest and for extensions,
enlargements, additions, replacements, renovations and improvements,
the cost of engineering, service contracts, reasonable financial and
legal services, plans, specifications, studies, surveys, estimates,
administrative expenses, and other expenses of funding or financing,
that are necessary or incident to determining the feasibility of
constructing any project, or that are incident to the construction,
acquisition, or financing of any project.
(d) "Health facility" means any facility, place, or building that
is licensed, accredited, or certified and organized, maintained, and
operated for the diagnosis, care, prevention, and treatment of human
illness, or physical, mental, or developmental disability, including
convalescence and rehabilitation and including care during and after
pregnancy, or for any one or more of these purposes, for one or more
persons, and includes, but is not limited to, all of the following
types:
(1) A general acute care hospital that is a health facility having
a duly constituted governing body with overall administrative and
professional responsibility and an organized medical staff that
provides 24-hour inpatient care, including the following basic
services: medical, nursing, surgical, anesthesia, laboratory,
radiology, pharmacy, and dietary services.
(2) An acute psychiatric hospital that is a health facility having
a duly constituted governing body with overall administrative and
professional responsibility and an organized medical staff that
provides 24-hour inpatient care for mentally disordered, incompetent,
or other patients referred to in Division 5 (commencing with Section
5000) or Division 6 (commencing with Section 6000) of the Welfare
and Institutions Code, including the following basic services:
medical, nursing, rehabilitative, pharmacy, and dietary services.
(3) A skilled nursing facility that is a health facility that
provides the following basic services: skilled nursing care and
supportive care to patients whose primary need is for availability or
skilled nursing care on an extended basis.
(4) An intermediate care facility that is a health facility that
provides the following basic services: inpatient care to ambulatory
or semiambulatory patients who have recurring need for skilled
nursing supervision and need supportive care, but who do not require
availability or continuous skilled nursing care.
(5) A special health care facility that is a health facility
having a duly constituted governing body with overall administrative
and professional responsibility and an organized medical or dental
staff that provides inpatient or outpatient, acute or nonacute care,
including, but not limited to, medical, nursing, rehabilitation,
dental, or maternity.
(6) A clinic that is operated by a tax-exempt nonprofit
corporation that is licensed pursuant to Section 1204 or 1204.1 of
the Health and Safety Code or a clinic exempt from licensure pursuant
to subdivision (b) or (c) of Section 1206 of the Health and Safety
Code.
(7) An adult day health center that is a facility, as defined
under subdivision (b) of Section 1570.7 of the Health and Safety
Code, that provides adult day health care, as defined under
subdivision (a) of Section 1570.7 of the Health and Safety Code.
(8) Any facility owned or operated by a local jurisdiction for the
provision of county health services.
(9) A multilevel facility is an institutional arrangement where a
residential facility for the elderly is operated as a part of, or in
conjunction with, an intermediate care facility, a skilled nursing
facility, or a general acute care hospital. "Elderly," for the
purposes of this paragraph, means a person 62 years of age or older.
(10) A child day care facility operated in conjunction with a
health facility. A child day care facility is a facility, as defined
in Section 1596.750 of the Health and Safety Code. For purposes of
this paragraph, "child" means a minor from birth to 18 years of age.
(11) An intermediate care facility/developmentally disabled
habilitative that is a health facility, as defined under subdivision
(e) of Section 1250 of the Health and Safety Code.
(12) An intermediate care facility/developmentally
disabled-nursing that is a health facility, as defined under
subdivision (h) of Section 1250 of the Health and Safety Code.
(13) A community care facility that is a facility, as defined
under subdivision (a) of Section 1502 of the Health and Safety Code,
that provides care, habilitation, rehabilitation, or treatment
services to developmentally disabled or mentally impaired persons.
(14) A nonprofit community care facility, as defined in
subdivision (a) of Section 1502 of the Health and Safety Code, other
than a facility that, as defined in that subdivision, is a
residential facility for the elderly, a foster family agency, a
foster family home, a full service adoption agency, or a noncustodial
adoption agency.
(15) A nonprofit accredited community work activity program, as
specified in subdivision (e) of Section 4851 and Section 4856 of the
Welfare and Institutions Code.
(16) A community mental health center, as defined in paragraph (3)
of subdivision (b) of Section 5667 of the Welfare and Institutions
Code.
(17) A nonprofit speech and hearing center, as defined in Section
1201.5 of the Health and Safety Code.
(18) A blood bank, as defined in Section 1600.2 of the Health and
Safety Code, licensed pursuant to Section 1602.5 of the Health and
Safety Code, and exempt from federal income taxation pursuant to
Section 501(c)(3) of the Internal Revenue Code.
(19) A residential facility for persons with developmental
disabilities, as defined in Sections 4688.5 and 4688.6 of the Welfare
and Institutions Code, which includes, but is not limited to, a
community care facility licensed pursuant to Section 1502 of the
Health and Safety Code and a family teaching home as defined in
Section 4689.1 of the Welfare and Institutions Code , but
which does not include a residential facility for persons with
special health care needs, as defined in Section 1567.50 of the
Health and Safety Code .
"Health facility" includes a clinic that is described in
subdivision (l) of Section 1206 of the Health and Safety Code.
"Health facility" includes the following facilities, if the
facility is operated in conjunction with one or more of the
facilities specified in paragraphs (1) to (19), inclusive, of this
subdivision: a laboratory, laundry, or nurses or interns residence,
housing for staff or employees and their families or patients or
relatives of patients, a physicians' facility, an administration
building, a research facility, a maintenance, storage, or utility
facility, all structures or facilities related to any of the
foregoing facilities or required or useful for the operation of a
health facility and the necessary and usual attendant and related
facilities and equipment, and parking and supportive service
facilities or structures required or useful for the orderly conduct
of the health facility.
"Health facility" does not include any institution, place, or
building used or to be used primarily for sectarian instruction or
study or as a place for devotional activities or religious worship.
(e) "Participating health institution" means a city, city and
county, or county, a district hospital, or a private nonprofit
corporation or association , or a limited liability company
whose sole member is a nonprofit corporation or association
authorized by the laws of this state to provide or operate a health
facility and that, pursuant to the provisions of this part,
undertakes the financing or refinancing of the construction or
acquisition of a project or of working capital as provided in this
part. "Participating health institution" also includes, for purposes
of the California Health Facilities Revenue Bonds (UCSF-Stanford
Health Care) 1998 Series A, the Regents of the University of
California.
(f) "Project" means construction, expansion, remodeling,
renovation, furnishing, or equipping, or funding, financing, or
refinancing of a health facility or acquisition of a health facility
to be financed or refinanced with funds provided in whole or in part
pursuant to this part. "Project" may include reimbursement for the
costs of construction, expansion, remodeling, renovation, furnishing,
or equipping, or funding, financing, or refinancing of a health
facility or acquisition of a health facility. "Project" may include
any combination of one or more of the foregoing undertaken jointly by
any participating health institution with one or more other
participating health institutions.
(g) "Revenue bond" means any bond, warrant, note, lease, or
installment sale obligation that is evidenced by a certificate of
participation or other evidence of indebtedness issued by the
authority.
(h) "Working capital" means moneys to be used by, or on behalf of,
a participating health institution to pay or prepay maintenance or
operation expenses or any other costs that would be treated as an
expense item, under generally accepted accounting principles, in
connection with the ownership or operation of a health facility,
including, but not limited to, reserves for maintenance or operation
expenses, interest for not to exceed one year on any loan for working
capital made pursuant to this part, and reserves for debt service
with respect to, and any costs necessary or incidental to, that
financing.
SEC. 2. Section 129275 of the Health
and Safety Code is amended to read:
129275. This article shall be known , and may be cited
, as the Small Facility Loan Guarantee for
Developmental Disability Programs Serving People with
Developmental Disabilities .
SEC. 3. Section 129280 of the Health
and Safety Code is amended to read:
129280. It is the intent of the Legislature in enacting
this article to encourage The State of California has
a compelling interest in the development of facilities for
community-based programs that assist developmentally
disabled clients persons with a developmental
disability living in any an
institutional setting , including state and local inpatient
hospitals, skilled nursing homes, intermediate care facilities, and
community care facilities to move
transition to more independent living arrangements. It
In order to meet this significant community need, it
is further the intent of the Legislature to encourage
local programs to seek funding for facility development
from private sources and with the assistance provided pursuant to
this chapter.
To achieve this purpose in determining eligibility for loan
insurance pursuant to this chapter, the following special provisions
apply to facilities approved by area developmental
disabilities boards developed pursuant to Section
4688.5 of the Welfare and Institutions Code and meeting the
intentions of this article:
(a) Facilities shall not require approval pursuant to
Section 129295 by the statewide system of health facility planning,
the area health planning agency, or the Health Advisory Council, for
the issuance of loan insurance, unless specifically required for the
facilities by the facility category of licensure. For
purposes of this article, the following definitions shall
apply:
(1) "Borrower" shall mean a political subdivision or nonprofit
corporation approved by the regional center as an ownership entity
that owns the project property.
(2) "Long-term residency lease agreement" shall mean a lease by
the borrower, as lessor, of facilities developed pursuant to Section
4688.5 of the Welfare and Institutions Code to a service provider
selected by a regional center, as lessee, having a term of at least
as long as the term of the insured loan.
(3) "Nonprofit corporation" shall mean a corporation formed under
or subject to the Nonprofit Public Benefit Corporation Law (Part 2
(commencing with Section 5110) of Division 2 of Title 1 of the
Corporations Code) or a limited liability company (LLC) whose sole
member is a corporation formed under or subject to the Nonprofit
Public Benefit Corporation Law (Part 2 (commencing with Section 5110)
of Division 2 of Title 1 of the Corporations Code) that meets
applicable sections of the federal Internal Revenue Code governing
nonprofit status.
(4) "Regional center" shall mean a private nonprofit corporation
that contracts with the state and is organized pursuant to Chapter 5
(commencing with Section 4620) of Division 4.5 of the Welfare and
Institutions Code.
(5) "Service provider" shall mean an entity with the appropriate
license, if required, that contracts with a regional center to
provide services to persons eligible for regional center services.
(b) Notwithstanding subdivision
subdivisions (i) , (l), and (m) of Section 129050,
any loan of under three hundred thousand dollars ($300,000)
made pursuant to this article for a nonprofit
corporation as well as or a political
subdivision may be fully insured equal to the total cost of
construction cost , improvement, and
expansion, which may exceed the current value of the health facility,
including improvements, when supported by other security for, or
guaranty of, the debt .
(c) Facilities shall not require approval pursuant to
Section 129020 by the statewide system of health facility planning,
the area health planning agency, or the Health Advisory Council, for
the issuance of loan insurance, until the director of the office and
the Director of the Department of Developmental Services determine
that the state plan developed pursuant to Section 129020 adequately
and comprehensively addresses the need for community developmental
services facilities and that finding is reported to the appropriate
policy committees of the Legislature. The
Golden Gate Regional Center, Regional Center of the East Bay, and San
Andreas Regional Center shall provide for, secure, and ensure the
full payment of a lease or leases developed pursuant to Section
4688.5 of the Welfare and Institutions Code.
SEC. 4. Section 129285 of the Health
and Safety Code is amended to read:
129285. (a) Loans of under three hundred thousand dollars
($300,000) for any single facility for six or fewer developmentally
disabled shall have priority for obtaining loan insurance.
(b) The total amount of loans that may be insured pursuant to this
article shall not exceed fifteen million dollars
($15,000,000) one hundred million dollars
($100,000,000) .
SEC. 5. Section 129295 of the Health
and Safety Code is amended to read:
129295. The office shall establish a pilot program under
this article of insuring may insure, pursuant to this
article, loans to nonprofit borrowers that are not licensed to
operate the facilities for which the loans are insured ,
provided that the borrower has entered into a long-term residency
lease agreement with a service provider selected by the applicable
regional center to operate that facility . The number of
facilities for which loans are insured under this section shall not
exceed 30 100 and the aggregate amount
of loans insured under this section shall not exceed six
million dollars ($6,000,000), that may be in addition to the maximum
loan insurance amount otherwise authorized by subdivision (b) of
Section 129285. Construction of all projects assisted under this
section shall be commenced on or before January 1, 1990
one hundred million dollars ($100,000,000) .
The office may delay processing or decline acceptance of loan
guarantee applications under this section if the volume of
applications becomes too large for existing staff to process in a
timely manner or if risks associated with the pilot program are
determined by the office to be unreasonable.
SEC. 6. Upon the order of the Director of Finance,
a loan from the General Fund may be made to the California Housing
Finance Fund in an amount not to exceed the unpaid principal balance
of the Bay Area Housing Program (program) loans for housing
authorized by Section 4688.5 of the Welfare and Institutions Code,
but not more than eighty-eight million dollars ($88,000,000), that is
currently financed on a line of credit scheduled to expire on
February 28, 2011. The loan may not be made any sooner than January
15, 2011, and only if the California Health Facilities Financing
Authority has failed to complete the sale and issuance of bonds to
provide funding for the program prior to January 15, 2011. The loan
shall be repaid from proceeds of the California Health Facilities
Financing Authority's issuance of bonds for the program prior to June
30, 2011.
SEC. 7. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to make the necessary statutory changes to implement the
Budget Act of 2010, it is necessary that this act take effect
immediately.
SECTION 1. It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2010.