BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 678 (Gordon and Dickenson) - Health care districts: community
health needs assessment.
Amended: April 15, 2013 Policy Vote: G&F 6-0, Health 9-0
Urgency: No Mandate: Yes
Hearing Date: August 30, 2013
Consultant: Brendan McCarthy
SUSPENSE FILE.
Bill Summary: AB 678 would require a health care district that
leases or transfer assets to a corporation to conduct an
assessment every five years of the community's health needs.
Fiscal Impact:
Potential mandate costs up to $200,000 per year. Currently,
there are fifteen health care districts that have leased or
transferred assets that would be impacted by this bill.
Assuming that those districts incur staff and consultant
costs up to the equivalent of one-half of a staff position
every five years, the total reimbursable mandate costs to
the state would be about $200,000 per year, on average.
Minor expected costs to local agency formation commissions
to incorporate information from health care districts into
municipal service reviews.
Background: Under current law, local health care districts may
be incorporated as local government agencies, typically to
operate a hospital. There are 73 health care districts in the
state of which 43 districts operate hospitals. Current law
allows a health care district to lease or transfer assets
(typically a hospital) to a corporation for operation, provided
that certain conditions are met.
To date, fifteen health care districts have leased or
transferred assets. Some of those districts have established
non-profit corporations and transferred assets to that
non-profit corporation, while other health care districts have
transferred assets (under a contract) to public or private
hospital systems.
AB 678 (Gordon and Dickinson)
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Proposed Law: AB 678 would require health care districts that
lease or transfer assets to a corporation to conduct an
assessment every five years of the community's health needs.
Specific provisions of the bill would:
Require a health care district that has leased or
transferred assets to conduct a community health needs
assessment, with specified procedural requirements;
Commencing January 1, 2019, require the needs assessments
to address progress made in meeting community health needs;
Require local agency formation commissions to include
information from the community needs assessment in currently
mandated municipal service reviews.
Related Legislation: SB 804 (Corbett, Statutes of 2012) requires
health care districts that propose to transfer more than 50% of
the district's assets to assess the fair market value of those
assets.
Staff Comments: Under the California Constitution, the state is
generally required to reimburse local government agencies for
the costs incurred to comply with a state mandate. The
Commission on State Mandates is responsible for assessing
whether a state law imposes a reimbursable mandate and the costs
that must be reimbursed by the state. As a general principal,
when the state authorizes (but does not require) a local agency
to take an action, any costs incurred by that local agency are
not reimbursable. This applies even if the state imposes certain
conditions on a local agency that elects to participate in the
program. However, if a local agency has decided to take
advantage of authority granted by the state and the state
subsequently imposes costly requirements on that local
government, the Commission may rule that the state has mandated
a new level of service - requiring state reimbursement.
With regards to this bill, fifteen health care districts have
already decided to lease or transfer assets. This bill would
impose new obligations on those districts. It may not be
feasible or simple for those health care districts to undo those
leases or transfers if they do not wish to comply with the new
state-mandated requirements. The Commission may rule that this
bill imposes a new mandate and is liable to reimburse those
health care districts for their costs to comply with the bill.
AB 678 (Gordon and Dickinson)
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