BILL ANALYSIS �
AB 678
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Date of Hearing: April 24, 2013
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 678 (Gordon) - As Introduced: April 15, 2013
SUBJECT : Health care districts: community health needs
assessment.
SUMMARY : Requires a healthcare district that leases or
transfers its assets to a corporation to conduct a community
health needs assessment, and places new requirements on local
agency formation commissions to consider these community health
needs assessments in their municipal service reviews.
Specifically, this bill :
1)Requires, every five years, a healthcare district that leases
or transfers its assets to a corporation to conduct an
assessment of the community's health needs and provide
opportunities for the involvement and input of citizens,
public agencies, civic organizations, local agencies, and
other community groups through public hearings and other means
that the district deems appropriate.
2)Allows the health needs assessment to include information from
reports generated by other agencies that address health needs
within the geographic area.
3)Requires, beginning on January 1, 2019, healthcare districts
to use the health needs assessment in their annual report on
progress in meeting community health needs (as required by
current law).
4)Requires a local agency formation commission (LAFCO), in
conducting a municipal service review (MSR), to include any
community health needs assessment.
5)Specifies that reimbursement to local agencies shall be made
if the Commission on State Mandates determines that this bill
contains costs mandated by the state.
EXISTING LAW :
1)Establishes the Local Health Care District Law which
authorizes communities to form special districts to construct
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and operate hospitals and other healthcare facilities to meet
local needs.
2)Authorizes a healthcare district to transfer, at fair market
value, any part of its assets of the district to one or more
nonprofit corporations to operate and maintain the assets.
Prior to the district transfer, requires the district board by
resolution to submit a measure to the voters of the district
proposing the transfer.
3)Requires that for a transfer of 50% or more of a district's
assets to be deemed to benefit a district's communities, a
district must:
a) Fully discuss the transfer agreement in at least five
properly noticed public meetings before the district
board's decision to transfer the assets;
b) Provide in the transfer agreement that the district must
approve all initial board members of the nonprofit
corporation and any subsequent board members as may be
specified in the transfer agreement;
c) Provide in the transfer agreement that specified assets
are to be transferred back to the district upon termination
of the transfer agreement;
d) Commit the nonprofit corporation, in the transfer
agreement, to operate and maintain the district's
healthcare facilities and its assets for the benefit of the
communities served by the district; and,
e) Require, in the transfer agreement, that any funds a
corporation receives from the district be used only for
specified activities that would further a valid public
purpose if undertaken directly by the district.
4)Requires the district to report to the California Attorney
General, within 30 days of any lease of district assets to one
or more corporations, the type of transaction and the entity
to whom the assets were leased.
5)Requires a district that leases or transfers its assets to a
corporation to act as an advocate for the community to the
operating corporations.
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6)Requires the district to annually report to the community on
the progress made in meeting the community's health needs.
7)Establishes the procedures for the organization and
reorganization of cities, counties, and special districts
under the Cortese-Knox-Hertzberg Local Reorganization Act of
2000.
8)Provides that a LAFCO shall determine the sphere of influence
of each local governmental agency within the county and enact
policies designed to promote the logical and orderly
development of areas within the sphere, and provides that a
LAFCO shall, as necessary, review and update each sphere of
influence every five years.
9)Provides for the process of determining the sphere of
influence, and specifies the different factors that a LAFCO
shall consider and prepare in a written statement of its
determinations.
10)Provides, in order to prepare and to update spheres of
influence, that a LAFCO shall conduct an MSR of the municipal
services provided in the county or other appropriate area as
designated by the LAFCO, and requires that a written statement
of its determinations include all of the following:
a) Growth and population projections for the affected area;
b) Present and planned capacity of public facilities and
adequacy of public services, including infrastructure needs
or deficiencies;
c) Financial ability of agencies to provide services;
d) Status of, and opportunities for, shared facilities;
e) Accountability for community service needs, including
governmental structure and operational efficiencies; and,
f) Any other matter related to effective or efficient
service delivery, as required by commission policy.
FISCAL EFFECT : Unknown
COMMENTS :
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1)This bill requires a healthcare district that leases or
transfers its assets to a corporation to conduct an assessment
of the community's health needs every five years. The
healthcare district would be required to provide opportunities
for the involvement and input of citizens, public agencies,
civic organizations, local agencies, and other community
groups through public hearings and other means that the
district deems appropriate. Beginning January 1, 2019, this
bill requires specified healthcare districts to use the health
needs assessment in an annual report. Current law requires
healthcare districts to report on progress in meeting the
community's needs. This bill also places a new requirement on
LAFCOs to consider these community health needs assessments in
their municipal service reviews. This bill is
author-sponsored.
2)The author argues, "A Health Needs Assessment would serve
several purposes. First, it would provide a district with an
analysis of community needs to help guide investments and
activities, and establish a baseline and framework for already
required annual reports. A second benefit is that the
assessment provides would engage the public - enriching the
process by generating community support and raising general
awareness of and engagement of the district".
3)According to the Association of Healthcare Districts, "13
healthcare districts will be impacted by these new
requirements. While many of these districts are currently
conducting needs assessments, this bill will ensure districts
are using a formalized and objective process to develop
strategies for addressing community needs."
The Committee may wish to consider if the bill should apply to
all healthcare districts. On the one hand it could be argued
that the bill appropriately only applies to districts that
lease or transfer assets, because in other healthcare
districts it is more apparent as to the services provided to
the public directly by that healthcare district. On the other
hand, it could be argued that residents in healthcare
districts not included in the bill would benefit from a health
needs assessment that will provide more transparency on a
district's effort to address community needs.
4)Current LAFCO law specifies various ways that special
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districts and other agencies can be reorganized and modified,
including consolidation, dissolution, including dissolution
with annexation, a merger, or establishment of a subsidiary
district. MSRs were added to LAFCO's mandate with the passage
of the Cortese-Knox-Hertzberg Act in 2000.
An MSR is a comprehensive study designed to better inform LAFCO,
local agencies, and the community about the provision of
municipal services. Service reviews attempt to capture and
analyze information about the governance structures and
efficiencies of service providers, and to identify
opportunities for greater coordination and cooperation between
providers. The service review is a prerequisite to a sphere of
influence determination and may also lead a LAFCO to take
other actions under its authority.
This bill also requires LAFCOs in conducting MSRs for
healthcare districts that lease or transfer its assets to
include their community health needs assessment.
The relationship between LAFCOs and healthcare districts is
unique in comparison to other special districts. The Local
Hospital District Law (now called the Local Healthcare
District Law) and the formation of some healthcare districts
predate the Knox Nisbet Act which created LAFCOs and
formalized the process for establishing a hospital district.
LAFCO's role in the oversight of a healthcare district's
financial stability and service boundaries is unclear in
existing law. The Committee may wish to consider if there is
a need to more clearly define the relationship between LAFCOs
and healthcare districts or if LAFCOS should provide a greater
role in oversight of healthcare districts. It has been argued
that LAFCOs were created to provide oversight of services
provided by local agencies, not to determine services needed,
and that they lack the expertise to do so.
5)Support arguments : Supporters argue this bill fosters good
governance by codifying best practices and will help ensure
that specified healthcare districts are assessing and meeting
the needs of the communities they serve.
Opposition arguments : None
6)This bill is double-referred to the Health Committee.
REGISTERED SUPPORT / OPPOSITION :
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Support
Association of California Healthcare Districts
California Association of Local Agency Formation Commissions
California Special Districts Association
Health Access
Opposition
None on file
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958