BILL NUMBER: AB 975	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 21, 2013

INTRODUCED BY   Assembly Members Wieckowski and Bonta

                        FEBRUARY 22, 2013

   An act to amend Sections 127280, 127400, and 129050 of, to add
Chapter 2.6 (commencing with Section 127470) to Part 2 of Division
107 of, and to repeal Article 2 (commencing with Section 127340) of
Chapter 2 of Part 2 of Division 107 of, the Health and Safety Code,
and to amend  Sections 214, 214.9, and 23701d  
Section 214  of the Revenue and Taxation Code, relating to
health facilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 975, as amended, Wieckowski. Health facilities community
benefits.
   Existing law makes certain findings and declarations regarding the
social obligation of private nonprofit hospitals to provide
community benefits in the public interest, and requires these
hospitals, among other responsibilities, to adopt and update a
community benefits plan for providing community benefits either
alone, in conjunction with other health care providers, or through
other organizational arrangements. Existing law requires each private
nonprofit hospital, as defined, to complete a community needs
assessment, as defined, and to thereafter update the community needs
assessment at least once every 3 years. Existing law also requires
the hospital to file a report on its community benefits plan and the
activities undertaken to address community needs with the Office of
Statewide Health Planning and Development. Existing law requires the
statewide office to make the plans available to the public. Existing
law requires that each hospital include in its community benefits
plan measurable objectives and specific benefits.
   This bill would declare the necessity of establishing uniform
standards for reporting the amount of charity care and community
benefits a facility provides to ensure that private nonprofit
hospitals and nonprofit multispecialty clinics actually meet the
social obligations for which they receive favorable tax treatment,
among other findings and declarations.
   This bill would require a private nonprofit hospital and nonprofit
multispecialty clinic, as defined, by January 1, 2015, to develop,
in collaboration with the community, a community benefits statement,
as specified, and a description of the process for approval of the
community benefits statement by the hospital's or clinic's governing
board, as specified. This bill would require the hospital or clinic,
prior to adopting a community benefits plan, to complete a community
needs assessment, as provided. The bill would authorize the hospital
or clinic to create a community benefits advisory committee for the
purpose of soliciting community input. This bill would require the
hospital or clinic to make available to the public a copy of the
assessment, file the assessment with the Office of Statewide Health
Planning and Development, and update the assessment at least every 3
years.
   This bill would also require a private nonprofit hospital and
nonprofit multispecialty clinic, by April 1, 2015, to develop a
community benefits plan that includes a summary of the needs
assessment and a statement of the community health care needs that
will be addressed by the plan, and list the services, as provided,
that the hospital or clinic intends to provide in the following year
to address community health needs identified in the community health
needs assessments. The bill would require the hospital or clinic to
make its community health needs assessment and community benefits
plan or community health plan available to the public on its Internet
Web site and would require that a copy of the assessment and plan be
given free of charge to any person upon request.
   This bill would require a private nonprofit hospital or nonprofit
multispecialty clinic, after April 1, 2015, every 2 years to revise
and submit its community benefits plan to the Office of Statewide
Health Planning and Development, as specified, and would allow a
hospital or clinic under the common control of a single corporation
or other entity to file a consolidated plan, as provided. The bill
would require that the governing board of each hospital or clinic
adopt the community benefits plan and make it available to the
public, as specified.
   This bill would require the Office of Statewide Health Planning
and Development to develop and adopt regulations to prescribe a
standardized format for community benefits plans, as provided, to
provide technical assistance to help private nonprofit hospitals and
nonprofit multispecialty clinics exempt from licensure comply with
the community benefits provisions, to make public each community
health needs assessment and community benefits plan and any comments
received regarding those assessments and plans, and to annually
calculate and make public the total value of community benefits
provided by hospitals. This bill would authorize the Office of
Statewide Health Planning and Development to assess a civil penalty,
as provided, against any hospital or clinic that fails to comply with
these provisions. This bill would make conforming changes. 
   The California Constitution generally limits ad valorem taxes on
real property to 1% of the full cash value of that property. 

   Existing property tax law establishes a welfare exemption under
which property is exempt from taxation if, among other things, that
property is used exclusively for religious, hospital, scientific, or
charitable purposes and is owned and operated by an entity, as
provided, that is itself organized and operated for those purposes.
 
   Existing law provides that a hospital is not deemed to be
organized or operated for profit if, during the immediately preceding
fiscal year, the operating revenues, as defined, are not in excess
of the operating expenses of the hospital by an amount equal to 10%
of the hospital's operating expenses.  
   This bill would state that a hospital is rebuttably presumed to be
organized or operated for profit if, during the immediately
preceding fiscal year, the operating revenues, as defined, are in
excess of the operating expenses of the hospital by an amount equal
to more than 10% of the hospital's operating expenses and that this
statement is a declaration that this change constitutes a declaration
of existing law.  
   Existing property tax law provides, pursuant to the Legislature's
exercise of its exemption authority set forth in the California
Constitution, for a "welfare exemption" from taxation for property
that is used exclusively for religious, hospital, or charitable
purposes, if certain conditions are met, including if the owner is
not organized or operated for profit. Existing law provides that a
hospital is not deemed to be organized or operated for profit if,
during the immediately preceding fiscal year, operating revenues did
not exceed operating expenses by an amount equivalent to 10% of those
operating expenses. Existing law provides that a hospital includes a
nonprofit multispecialty clinic so long as the clinic does not
reduce the level of charitable or subsidized activities it provides
as a proportion of its total activities.  
   This bill would, for lien years occurring on and after January 1,
2015, instead provide that a hospital is not deemed to be organized
or operated for profit if, during the immediately preceding fiscal
year, it provided charity care, as defined, in an amount equal to at
least 8% of its operating margin calculated in accordance with
generally accepted accounting principles for hospitals, as specified.
This bill would also, for lien years occurring on and after January
1, 2015, instead provide that a hospital includes a nonprofit
multispecialty clinic so long as the clinic, during the immediately
preceding fiscal year, provided charity care, as defined, in an
amount equal to at least 5% of its net revenues, as specified. This
bill would impose new duties on the Office of Statewide Health
Planning and Development and the State Board of Equalization with
respect to reports this bill would require a hospital or nonprofit
multispecialty clinic to make for purposes of the welfare exemption.
 
   By changing the manner in which property tax assessments are
administered by county assessors, this bill would impose a
state-mandated local program.  
   The Corporation Tax Law, in modified conformity with federal
income tax laws, exempts various types of organizations from taxes
imposed by that law.  
   This bill would, for taxable years beginning on and after January
1, 2015, require a nonprofit hospital, as defined, and a nonprofit
multispecialty clinic, as defined, to meet additional requirements in
order to be an organization exempt from those taxes. This bill would
impose new duties on the Office of Statewide Health Planning and
Development and the State Board of Equalization with respect to
reports this bill would require a hospital or nonprofit
multispecialty clinic to make for purposes of that exemption.
 
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.  
   This bill would include a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature. 
   Vote:  2/3   majority  . Appropriation:
no. Fiscal committee: yes. State-mandated local program:  yes
  no  .


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

  SECTION 1.  Section 127280 of the Health and Safety Code is amended
to read:
   127280.  (a) Every health facility licensed pursuant to Chapter 2
(commencing with Section 1200) of Division 2, except a health
facility owned and operated by the state, shall each year be charged
a fee established by the office consistent with the requirements of
this section.
   (b) Commencing in calendar year 2004, every freestanding
ambulatory surgery clinic, as defined in Section 128700, shall each
year be charged a fee established by the office consistent with the
requirements of this section.
   (c) The fee structure shall be established each year by the office
to produce revenues equal to the appropriation made in the annual
Budget Act or another statute to pay for the functions required to be
performed by the office pursuant to this chapter, Chapter 2.6
(commencing with Section 127470), or Chapter 1 (commencing with
Section 128675) of Part 5, and to pay for any other health-related
programs administered by the office. The fee shall be due on July 1
and delinquent on July 31 of year.
   (d) The fee for a health facility that is not a hospital, as
defined in subdivision (c) of Section 128700, shall be not more than
0.035 percent of the gross operating cost of the facility for the
provision of health care services for its last fiscal year that ended
on or before June 30 of the preceding calendar year.
   (e) The fee for a hospital, as defined in subdivision (c) of
Section 128700, shall be not more than 0.035 percent of the gross
operating cost of the facility for the provision of health care
services for its last fiscal year that ended on or before June 30 of
the preceding calendar year.
   (f) The fee for a freestanding ambulatory surgery clinic shall be
established at an amount equal to the number of ambulatory surgery
data records submitted to the office pursuant to Section 128737 for
encounters in the preceding calendar year multiplied by not more than
fifty cents ($0.50).
   (g) There is hereby established the California Health Data and
Planning Fund within the office for the purpose of receiving and
expending fee revenues collected pursuant to this chapter.
   (h) Any amounts raised by the collection of the special fees
provided for by subdivisions (d), (e), and (f) that are not required
to meet appropriations in the Budget Act for the current fiscal year
shall remain in the California Health Data and Planning Fund and
shall be available to the office in succeeding years when
appropriated by the Legislature in the annual Budget Act or another
statute, for expenditure under the provisions of this chapter,
Chapter 2.6 (commencing with Section 127470), and Chapter 1
(commencing with Section 128675) of Part 5, or for any other
health-related programs administered by the office, and shall reduce
the amount of the special fees that the office is authorized to
establish and charge.
   (i) (1) No health facility liable for the payment of fees required
by this section shall be issued a license or have an existing
license renewed unless the fees are paid. A new, previously
unlicensed, health facility shall be charged a pro rata fee to be
established by the office during the first year of operation.
   (2) The license of any health facility, against which the fees
required by this section are charged, shall be revoked, after notice
and hearing, if it is determined by the office that the fees required
were not paid within the time prescribed by subdivision (c).
  SEC. 2.  Article 2 (commencing with Section 127340) of Chapter 2 of
Part 2 of Division 107 of the Health and Safety Code is repealed.
  SEC. 3.  Section 127400 of the Health and Safety Code is amended to
read:
   127400.  The following definitions apply for the purposes of this
article:
   (a) "Allowance for financially qualified patient" means, with
respect to services rendered to a financially qualified patient, an
allowance that is applied after the hospital's charges are imposed on
the patient, due to the patient's determined financial inability to
pay the charges.
   (b) (1) "Charity care" means the unreimbursed cost to a private
nonprofit hospital or nonprofit multispecialty clinic of providing
services to the  uninsured,   uninsured or 
underinsured,  and those eligible for Medi-Cal, Medicare,
the California Children's Services Program, or county indigent
programs,  as well as providing funding or otherwise
financially supporting any of the following:
   (A) Health care services or items on an inpatient or outpatient
basis to a financially qualified patient with no expectation of
payment.
   (B) Health care services or items provided to a financially
qualified patient through other nonprofit or public outpatient
clinics, hospitals, or health care organizations with no expectation
of payment.
   (C) Community benefits, provided that the provision, funding, or
financial support of those benefits is demonstrated to reduce
community health care costs. For purposes of this subparagraph,
"community benefits" means any of the following: vaccination programs
and services for low-income families, chronic illness prevention
programs and services, nursing and caregiver training provided
without assessment of fees or payment of tuition, home-based health
care programs for low-income families, or community-based mental
health and outreach and assessment programs for low-income families.
For purposes of this subparagraph, "low-income families" means
families or individuals with income less than or equal to 350 percent
of the federal poverty level.
   (2) Charity care does not include any of the following:
   (A) Uncollected fees or accounts written off as bad debt.
   (B) Care provided to patients for which a public program or public
or private grant funds pay for any of the charges for the care.

   (C) Care for which partial payment was received from any source.
 
   (D) 
    (C)  Contractual adjustments in the provision of health
care services below the amount identified as gross charges or
"chargemaster" rates by the health care provider. 
   (E) 
    (D)  Any amount over 125 percent of the Medicare rate
for the health care services or items provided on an inpatient or
outpatient basis. 
   (F) 
    (E)  Any amount over 125 percent of the Medicare rate
for providing, funding, or otherwise financially supporting health
care services or items with no expectation of payment provided to
financially qualified patients through other nonprofit or public
outpatient clinics, hospitals, or health care organizations. 

   (G)
    (F)  The cost to a nonprofit hospital of paying a tax or
other governmental assessment.
   (c) "Federal poverty level" means the poverty guidelines updated
periodically in the Federal Register by the United States Department
of Health and Human Services under authority of subsection (2) of
Section 9902 of Title 42 of the United States Code.
   (d) "Financially qualified patient" means a patient who is both of
the following:
   (1) A patient who is a self-pay patient, as defined in subdivision
(g) or a patient with high medical costs, as defined in subdivision
(h).
   (2) A patient who has a family income that does not exceed 350
percent of the federal poverty level.
   (e) "Hospital" means a facility that is required to be licensed
under subdivision (a), (b), or (f) of Section 1250, except a facility
operated by the State Department of State Hospitals or the
Department of Corrections and Rehabilitation.
   (f) "Office" means the Office of Statewide Health Planning and
Development.
   (g) "Self-pay patient" means a patient who does not have
third-party coverage from a health insurer, health care service plan,
Medicare, or Medicaid, and whose injury is not a compensable injury
for purposes of workers' compensation, automobile insurance, or other
insurance as determined and documented by the hospital. Self-pay
patients may include charity care patients.
   (h) "A patient with high medical costs" means a person whose
family income does not exceed 350 percent of the federal poverty
level, as defined in subdivision (c), if that individual does not
receive a discounted rate from the hospital as a result of his or her
third-party coverage. For these purposes, "high medical costs" means
any of the following:
   (1) Annual out-of-pocket costs incurred by the individual at the
hospital that exceed 10 percent of the patient's family income in the
prior 12 months.
   (2) Annual out-of-pocket expenses that exceed 10 percent of the
patient's family income, if the patient provides documentation of the
patient's medical expenses paid by the patient or the patient's
family in the prior 12 months.
   (3) A lower level determined by the hospital in accordance with
the hospital's charity care policy.
   (i) "Patient's family" means the following:
   (1) For persons 18 years of age and older, spouse, domestic
partner, as defined in Section 297 of the Family Code, and dependent
children under 21 years of age, whether living at home or not.
   (2) For persons under 18 years of age, parent, caretaker
relatives, and other children under 21 years of age of the parent or
caretaker relative.
  SEC. 4.  Chapter 2.6 (commencing with Section 127470) is added to
Part 2 of Division 107 of the Health and Safety Code, to read:
      CHAPTER 2.6.  COMMUNITY BENEFITS



      Article 1.  Hospital Community Benefits


   127470.  (a) The Legislature finds and declares the following:
   (1) Access to health care services is of vital concern to the
people of California.
   (2) Health care providers play an important role in providing
essential health care services in the communities they serve.
   (3) Notwithstanding public and private efforts to increase access
to health care, the people of California continue to have significant
unmet health needs. Studies indicate that as many as 6.9 million
Californians are uninsured during a year.
   (4) The state has a substantial interest in ensuring that the
unmet health needs of its residents are addressed. Health care
providers can help address these needs by providing charity care and
community benefits to the uninsured and underinsured members of their
communities.
   (5) Hospitals have different roles in the community depending on
their mission, governance, tax status, and articles of incorporation.
Private hospitals that are investor owned and have for-profit tax
status pay property taxes, corporate income taxes, and other taxes,
such as unemployment insurance, on a different basis than nonprofit,
district, or public hospitals. Nonprofit health facilities, including
hospitals and multispecialty clinics, as described in subdivision
(l) of Section 1206, receive favorable tax treatment by the
government and, in exchange, assume a social obligation to provide
charity care and other community benefits in the public interest.
   (b) It is the intent of the Legislature in enacting this chapter
to provide uniform standards for reporting the amount of charity care
and community benefits provided to ensure that private nonprofit
hospitals and multispecialty clinics operated by nonprofit
corporations, as described in subdivision (l) of Section 1206,
actually meet the social obligations for which they receive favorable
tax treatment.
   127472.  The following definitions apply for the purposes of this
chapter:
   (a) "Community" means the service area or patient population for
which a private nonprofit hospital or nonprofit multispecialty clinic
provides health care services.
   (b) "Community benefits" means the unreimbursed goods, services,
and resources provided by a private nonprofit hospital or nonprofit
multispecialty clinic that addresses community-identified health
needs and concerns, particularly for people who are uninsured,
underserved, or members of a vulnerable population. Community
benefits include, but are not limited to, charity care, as defined in
Section 127400, the cost of community health improvement services
and community benefit operations, and the cost of health professions
education, subsidized health services for vulnerable populations,
research, contributions to community groups, and community building
activities.
   (c) "Community benefits plan" means the written document prepared
for annual submission to the office that includes, but is not limited
to, a description of the activities that the private nonprofit
hospital or nonprofit multispecialty clinic has undertaken to address
identified community needs within its mission and financial
capacity, and the process by which the hospital or clinic develops
the plan in consultation with the community.
   (d) "Community health needs assessment" means the process by which
the private nonprofit hospital or nonprofit multispecialty clinic
identifies, for its primary service area as determined by the
hospital or clinic, unmet community needs.
   (e) "Discounted care" means the cost for medical care provided
consistent with Article 1 (commencing with Section 127400) of Chapter
2.5.
   (f) "Free care" means the unreimbursed cost for medical care for a
patient who cannot afford to pay for care provided consistent with
Article 1 (commencing with Section 127400) of Chapter 2.5.
   (g) "Nonprofit multispecialty clinic" means a clinic as described
in subdivision (l) of Section 1206.
   (h) "Office" means the Office of Statewide Health Planning and
Development.
   (i) "Private nonprofit hospital" means a private nonprofit acute
care hospital operated or controlled by a nonprofit corporation, as
defined in Section 5046 of the Corporations Code, that has been
determined to be exempt from taxation under the Internal Revenue
Code. For purposes of this chapter, "private nonprofit hospital" does
not include any of the following:
   (1) A district hospital organized and governed pursuant to the
Local Health Care District Law (Division 23 (commencing with Section
32000)).
   (2) A rural general acute care hospital, as defined in subdivision
(a) of Section 1250.
   (j) "Underserved and vulnerable population" means a population
that has disproportionate unmet health-related needs, such as a high
prevalence of one or more health conditions or concerns, and that has
limited access to timely, quality health care.
   127473.  A private nonprofit hospital or a nonprofit
multispecialty clinic that reports community benefits to the
community shall report on those community benefits in a consistent
and comparable manner to all other private nonprofit hospitals and
nonprofit multispecialty clinics.
   127474.  A private nonprofit hospital or a nonprofit
multispecialty clinic shall make its community health needs
assessment and community benefits plan or community health plan
available to the public on its Internet Web site. A copy of the
assessment and plan shall be given free of charge to any person upon
request.

      Article 2.  Community Benefits Statement, Community Needs
Assessment, and Community Benefits Plan


   127475.  (a) Private nonprofit hospitals and nonprofit
multispecialty clinics shall provide community benefits to the
community.
   (b) By January 1, 2015, each private nonprofit hospital and each
nonprofit multispecialty clinic shall develop, in collaboration with
the community, all of the following:
   (1) A community benefits statement that describes the hospital's
or clinic's commitment to developing, adopting, and implementing a
community benefits program. The hospital's or clinic's governing
board shall document that it has reviewed the clinic's organizational
mission statement and considered amendments to it that would better
align that organizational mission statement with the community
benefits statement.
   (2) A description of the process for approval of the community
benefits statement by the hospital's or clinic's governing board,
including a declaration that the board and administrators of the
hospital or clinic shall be responsible for oversight and
implementation of the community benefits plan. The board may
establish a community benefits implementation committee that shall
include members of the board, senior administrators, and community
stakeholders.
   (3) A community health needs assessment pursuant to Section 127476
that evaluates the health needs and resources of the community it
serves.
   (c) By April 1, 2015, a private nonprofit hospital or nonprofit
multispecialty clinic shall develop, in collaboration with the
community, a community benefits plan pursuant to Section 127477
designed to achieve all of the following outcomes:
   (1) Access to health care for members of underserved and
vulnerable populations.
   (2) The addressing of essential health care needs of the
community, with particular attention to the needs of members of
underserved and vulnerable populations.
   (3) The creation of measurable improvements in the health of the
community, with particular attention to the needs of members of
underserved and vulnerable populations.
   127476.  (a) Prior to adopting a community benefits plan, a
private nonprofit hospital or nonprofit multispecialty clinic shall
complete a community needs assessment that evaluates the health needs
and resources of the community served by the hospital or clinic that
is designed to achieve the outcomes specified in subdivision (c) of
Section 127475.
   (b) In conducting its community health needs assessment, a private
nonprofit hospital or nonprofit multispecialty clinic shall solicit
comments from and meet with local government officials, including
representatives of local public health departments. A private
nonprofit hospital or nonprofit multispecialty clinic shall also
solicit comments from and meet with health care providers, registered
nurses, community groups representing, among others, patients,
labor, seniors, and consumers, and other health-related
organizations. Particular attention shall be given to persons who are
themselves underserved and who work with underserved and vulnerable
populations. Particular attention shall also be given to identifying
local needs to address racial and ethnic disparities in health
outcomes. A private nonprofit hospital or nonprofit multispecialty
clinic may create a community benefits advisory committee for the
purpose of soliciting community input.
   (c) In preparing its community health needs assessment, a private
nonprofit hospital or nonprofit multispecialty clinic shall use
available public health data. A private nonprofit hospital or
nonprofit multispecialty clinic may collaborate with other facilities
and health care institutions in conducting community health needs
assessments and may make use of existing studies in completing their
own needs assessments.
   (d) Prior to completing a community health needs assessment, a
private nonprofit hospital or nonprofit multispecialty clinic shall
make available to the public a copy of the assessment for review and
comment.
   (e) A community health needs assessment shall be filed with the
office. A private nonprofit hospital or a nonprofit multispecialty
clinic shall update its community needs assessment at least every
three years.
   127477.  (a) By April 1, 2015, a private nonprofit hospital or
nonprofit multispecialty clinic shall develop a community benefits
plan that conforms with this chapter.
   (b) In developing a community benefits plan, a private nonprofit
hospital or nonprofit multispecialty clinic shall solicit comments
from and meet with local government officials, including
representatives of local public health departments. A private
nonprofit hospital or nonprofit multispecialty clinic shall also
solicit comments from and meet with health care providers, community
groups representing, among others, patients, labor, seniors, and
consumers, and other health-related organizations. Particular
attention shall be given to persons who are themselves underserved,
who work with underserved and vulnerable populations, and who work
with populations at risk for racial and ethnic disparities in health
outcomes.
   (c) A community benefits plan shall include, at a minimum, all of
the following:
   (1) A summary of the needs assessment and a statement of the
community health care needs that will be addressed by the plan.
   (2) A list of the services the private nonprofit hospital or
nonprofit multispecialty clinic intends to provide in the following
year to address community health needs identified in the community
health needs assessments. The list of services shall be categorized
under the following:
   (A) Charity care, as defined in subdivision (b) of Section 127400.

   (B) Other community benefits, including community health
improvement services and community benefit operations, health
professions education, subsidized health services, research, and
contributions to community groups.
   (C) Community building activities targeting underserved and
vulnerable populations.
   (3) A description of the target community or communities that the
plan is intended to benefit.
   (4) An estimate of the economic value of the community benefits
that the private nonprofit hospital or nonprofit multispecialty
clinic intends to provide.
   (5) A summary of the process used to elicit community
participation in the community health needs assessment and community
benefits plan design, and a description of the process for ongoing
participation of community members in plan implementation and
oversight, and a description of how the assessment and plan respond
to the comments received by the private nonprofit hospital or
nonprofit multispecialty clinic from the community.
   (6) A list of individuals, organizations, and government officials
consulted during the development of the plan.
   (7) A description of the intended impact on health outcomes
attributable to the plan, including short- and long-term measurable
goals and objectives.
   (8) Mechanisms to evaluate the plan's effectiveness.
   (9) The name and title of the individual responsible for
implementing the plan.
   (10) The names of individuals on the private nonprofit hospital's
or nonprofit multispecialty clinic's governing board.
   (11) If applicable, a report on the community benefits efforts of
the preceding year, including the amounts and types of community
benefits provided, in a manner to be prescribed by the office; a
statement of the plan's impact on health outcomes, including a
description of the private nonprofit hospital's or nonprofit
multispecialty clinic's progress toward meeting its short- and
long-term goals and objectives; and an evaluation of the plan's
effectiveness.
   (d) A private nonprofit hospital or nonprofit multispecialty
clinic may also report on bad debts and Medicare shortfalls, although
these shall not be calculated or reported as community benefits.
   (e) The governing board of a private nonprofit hospital or
nonprofit multispecialty clinic shall adopt the community benefits
plan. A private nonprofit hospital or nonprofit multispecialty clinic
shall make its draft community benefits plan available to the
public, in hard copy and on its Internet Web site, no later than 30
days prior to its adoption by the governing board of the private
nonprofit hospital or nonprofit multispecialty clinic.
   (f) After April 1, 2015, a private nonprofit hospital or nonprofit
multispecialty clinic shall, every two years, revise and submit its
community benefits plan to the office, no later than 120 days after
the end of the hospital's or clinic's fiscal year.
   (g) A person or entity may file comments on a private nonprofit
hospital's or nonprofit multispecialty clinic's community benefits
plan with the office.
   (h) A private nonprofit hospital or nonprofit multispecialty
clinic, under the common control of a single corporation or another
entity, may file a consolidated plan if the plan addresses services
in all of the categories listed in paragraph (2) of subdivision (c)
to be provided by each hospital or clinic under common control of the
corporation or entity.

      Article 3.  Duties of the Office of Statewide Health Planning
and Development


   127487.  (a) (1) The office shall develop and adopt regulations to
prescribe a standardized format for community benefits plans
pursuant to this chapter.
   (2) The office shall develop a standardized methodology for
estimating the economic value of community benefits.
   (3) In developing standard of reporting on community benefits, the
office shall, to the maximum extent possible, conform to Internal
Revenue Service reporting standards for those data elements reported
to the Internal Revenue Service, but shall also include those data
elements required under this chapter or other state law, including
charity care, as defined in Section 127400.
   (4) A private nonprofit hospital or nonprofit multispecialty
clinic shall annually file with the office its IRS Form 990, or its
successor form, and the office shall post the form on its Internet
Web site.
   (b) The office shall provide technical assistance to help private
nonprofit hospitals and nonprofit multispecialty clinics comply with
this chapter.
   (c) The office shall make public a community health needs
assessment and community benefits plan and any comments received
regarding those assessments and plans. The office shall make these
documents available on its Internet Web site.
   (d) The office shall annually calculate and make public the total
value of community benefits provided by private nonprofit hospitals
and nonprofit multispecialty clinics that report pursuant to this
chapter.
   127488.  The office may assess a civil penalty against any private
nonprofit hospital or nonprofit multispecialty clinic that fails to
comply with this article in the same manner as specified in Section
128770.
  SEC. 5.  Section 129050 of the Health and Safety Code is amended to
read:
   129050.  A loan shall be eligible for insurance under this chapter
if all of the following conditions are met:
   (a) The loan shall be secured by a first mortgage, first deed of
trust, or other first priority lien on a fee interest of the borrower
or by a leasehold interest of the borrower having a term of at least
20 years, including options to renew for that duration, longer than
the term of the insured loan. The security for the loan shall be
subject only to those conditions, covenants and restrictions,
easements, taxes, and assessments of record approved by the office,
and other liens securing debt insured under this chapter. The office
may require additional agreements in security of the loan.
   (b) The borrower obtains an American Land Title Association title
insurance policy with the office designated as beneficiary, with
liability equal to the amount of the loan insured under this chapter,
and with additional
     endorsements that the office may reasonably require.
   (c) The proceeds of the loan shall be used exclusively for the
construction, improvement, or expansion of the health facility, as
approved by the office under Section 129020. However, loans insured
pursuant to this chapter may include loans to refinance another prior
loan, whether or not state insured and without regard to the date of
the prior loan, if the office determines that the amount refinanced
does not exceed 90 percent of the original total construction costs
and is otherwise eligible for insurance under this chapter. The
office may not insure a loan for a health facility that the office
determines is not needed pursuant to subdivision (k).
   (d) The loan shall have a maturity date not exceeding 30 years
from the date of the beginning of amortization of the loan, except as
authorized by subdivision (e), or 75 percent of the office's
estimate of the economic life of the health facility, whichever is
the lesser.
   (e) The loan shall contain complete amortization provisions
requiring periodic payments by the borrower not in excess of its
reasonable ability to pay as determined by the office. The office
shall permit a reasonable period of time during which the first
payment to amortization may be waived on agreement by the lender and
borrower. The office may, however, waive the amortization
requirements of this subdivision and of subdivision (g) of this
section when a term loan would be in the borrower's best interest.
   (f) The loan shall bear interest on the amount of the principal
obligation outstanding at any time at a rate, as negotiated by the
borrower and lender, as the office finds necessary to meet the loan
money market. As used in this chapter, "interest" does not include
premium charges for insurance and service charges if any. Where a
loan is evidenced by a bond issue of a political subdivision, the
interest thereon may be at any rate the bonds may legally bear.
   (g) The loan shall provide for the application of the borrower's
periodic payments to amortization of the principal of the loan.
   (h) The loan shall contain those terms and provisions with respect
to insurance, repairs, alterations, payment of taxes and
assessments, foreclosure proceedings, anticipation of maturity,
additional and secondary liens, and other matters the office may in
its discretion prescribe.
   (i) The loan shall have a principal obligation not in excess of an
amount equal to 90 percent of the total construction cost.
   (j) The borrower shall offer reasonable assurance that the
services of the health facility will be made available to all persons
residing or employed in the area served by the facility.
   (k) The office has determined that the facility is needed by the
community to provide the specified services. In making this
determination, the office shall do all of the following:
   (1) Require the applicant to describe the community needs the
facility will meet and provide data and information to substantiate
the stated needs.
   (2) Require the applicant, if appropriate, to demonstrate
participation in the community needs assessment required by Section
127476.
   (3) Survey appropriate local officials and organizations to
measure perceived needs and verify the applicant's needs assessment.
   (4) Use any additional available data relating to existing
facilities in the community and their capacity.
   (5) Contact other state and federal departments that provide
funding for the programs proposed by the applicant to obtain those
departments' perspectives regarding the need for the facility.
Additionally, the office shall evaluate the potential effect of
proposed health care reimbursement changes on the facility's
financial feasibility.
   (6) Consider the facility's consistency with the Cal-Mortgage
state plan.
   (l) In the case of acquisitions, a project loan shall be
guaranteed only for transactions not in excess of the fair market
value of the acquisition.
   Fair market value shall be determined, for purposes of this
subdivision, pursuant to the following procedure, that shall be
utilized during the office's review of a loan guarantee application:
   (1) Completion of a property appraisal by an appraisal firm
qualified to make appraisals, as determined by the office, before
closing a loan on the project.
   (2) Evaluation of the appraisal in conjunction with the book value
of the acquisition by the office. When acquisitions involve
additional construction, the office shall evaluate the proposed
construction to determine that the costs are reasonable for the type
of construction proposed. In those cases where this procedure reveals
that the cost of acquisition exceeds the current value of a
facility, including improvements, then the acquisition cost shall be
deemed in excess of fair market value.
   (m) Notwithstanding subdivision (i), any loan in the amount of ten
million dollars ($10,000,000) or less may be insured up to 95
percent of the total construction cost.
   In determining financial feasibility of projects of counties
pursuant to this section, the office shall take into consideration
any assistance for the project to be provided under Section 14085.5
of the Welfare and Institutions Code or from other sources. It is the
intent of the Legislature that the office endeavor to assist
counties in whatever ways are possible to arrange loans that will
meet the requirements for insurance prescribed by this section.
   (n) The project's level of financial risk meets the criteria in
Section 129051. 
  SEC. 6.    Section 214 of the Revenue and Taxation
Code is amended to read:
   214.  (a) Property used exclusively for religious, hospital,
scientific, or charitable purposes owned and operated by community
chests, funds, foundations, limited liability companies, or
corporations organized and operated for religious, hospital,
scientific, or charitable purposes is exempt from taxation, including
ad valorem taxes to pay the interest and redemption charges on any
indebtedness approved by the voters prior to July 1, 1978, or any
bonded indebtedness for the acquisition or improvement of real
property approved on or after July 1, 1978, by two-thirds of the
votes cast by the voters voting on the proposition, if:
   (1) (A) For lien dates occurring before January 1, 2015, the owner
is not organized or operated for profit. However, in the case of
hospitals, the organization shall not be deemed to be organized or
operated for profit if, during the immediately preceding fiscal year,
operating revenues, exclusive of gifts, endowments and
grants-in-aid, did not exceed operating expenses by an amount
equivalent to 10 percent of those operating expenses. As used herein,
operating expenses include depreciation based on cost of replacement
and amortization of, and interest on, indebtedness.
   (B) (i) For lien dates occurring on and after January 1, 2015, the
owner is not organized or operated for profit. However, in the case
of hospitals, the organization shall not be deemed to be organized or
operated for profit if, during the immediately preceding fiscal
year, it provided charity care as defined in subdivision (b) of
Section 127400 of the Health and Safety Code in an amount equal to at
least 5 percent of its net revenue. A determination of the amount of
charity care provided by a hospital claiming exemption from taxation
under this section shall be based on the most recently completed
audited financial statement for the hospital's prior fiscal year and
shall be reported each year to the Office of Statewide Health
Planning and Development and to the State Board of Equalization in a
uniform format determined by the Office of Statewide Health Planning
and Development that itemizes the charity care provided in each of
the categories within the definition of charity care set forth in
subdivision (b) of Section 127400 of the Health and Safety Code. The
Office of Statewide Health Planning and Development shall post on its
Internet Web site a complete copy of each hospital's annual report
and shall provide a report to the local tax assessor in whose
jurisdiction the hospital is located.
   (ii) Each hospital claiming exemption from taxation under this
section shall post a copy of the annual report required by this
paragraph on its Internet Web site and shall make copies available to
the public at its regular business office upon request. A hospital
claiming exemption from taxation under this section shall file the
annual report required by this paragraph by March 30 of each year.
The State Board of Equalization may assess a fine of up to $1,000 per
day for each day an annual report required by this paragraph is
delinquent, provided that no fine shall be assessed until 10 business
days have elapsed after written notification to the hospital of its
failure to file a compliant report.
   (2) No part of the net earnings of the owner inures to the benefit
of any private shareholder or individual.
   (3) The property is used for the actual operation of the exempt
activity, and does not exceed an amount of property reasonably
necessary to the accomplishment of the exempt purpose.
   (A) For the purposes of determining whether the property is used
for the actual operation of the exempt activity, consideration shall
not be given to use of the property for either or both of the
following described activities if that use is occasional:
   (i) The owner conducts fundraising activities on the property and
the proceeds derived from those activities are not unrelated business
taxable income, as defined in Section 512 of the Internal Revenue
Code, of the owner and are used to further the exempt activity of the
owner.
   (ii) The owner permits any other organization that meets all of
the requirements of this subdivision, other than ownership of the
property, to conduct fundraising activities on the property and the
proceeds derived from those activities are not unrelated business
taxable income, as defined in Section 512 of the Internal Revenue
Code, of the organization, are not subject to the tax on unrelated
business taxable income that is imposed by Section 511 of the
Internal Revenue Code, and are used to further the exempt activity of
the organization.
   (B) For purposes of subparagraph (A):
   (i) "Occasional use" means use of the property on an irregular or
intermittent basis by the qualifying owner or any other qualifying
organization described in clause (ii) of subparagraph (A) that is
incidental to the primary activities of the owner or the other
organization.
   (ii) "Fundraising activities" means both activities involving the
direct solicitation of money or other property and the anticipated
exchange of goods or services for money between the soliciting
organization and the organization or person solicited.
   (C) Subparagraph (A) shall have no application in determining
whether paragraph (3) has been satisfied unless the owner of the
property and any other organization using the property as provided in
subparagraph (A) have filed with the assessor a valid organizational
clearance certificate issued pursuant to Section 254.6.
   (D) For the purposes of determining whether the property is used
for the actual operation of the exempt activity, consideration shall
not be given to the use of the property for meetings conducted by any
other organization if the meetings are incidental to the other
organization's primary activities, are not fundraising meetings or
activities as defined in subparagraph (B), are held no more than once
per week, and the other organization and its use of the property
meet all other requirements of paragraphs (1) to (5), inclusive, of
this subdivision. The owner or the other organization also shall file
with the assessor a copy of a valid, unrevoked letter or ruling from
the Internal Revenue Service or the Franchise Tax Board stating that
the other organization, or the national organization of which it is
a local chapter or affiliate, qualifies as an exempt organization
under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code or
Section 23701d, 23701f, or 23701w.
   (E) Nothing in subparagraph (A), (B), (C), or (D) shall be
construed to either enlarge or restrict the exemption provided for in
subdivision (b) of Section 4 and Section 5 of Article XIII of the
California Constitution and this section.
   (4) The property is not used or operated by the owner or by any
other person so as to benefit any officer, trustee, director,
shareholder, member, employee, contributor, or bondholder of the
owner or operator, or any other person, through the distribution of
profits, payment of excessive charges or compensations, or the more
advantageous pursuit of their business or profession.
   (5) The property is not used by the owner or members thereof for
fraternal or lodge purposes, or for social club purposes except where
that use is clearly incidental to a primary religious, hospital,
scientific, or charitable purpose.
   (6) The property is irrevocably dedicated to religious,
charitable, scientific, or hospital purposes and upon the
liquidation, dissolution, or abandonment of the owner will not inure
to the benefit of any private person except a fund, foundation, or
corporation organized and operated for religious, hospital,
scientific, or charitable purposes.
   (7) The property, if used exclusively for scientific purposes, is
used by a foundation or institution that, in addition to complying
with the foregoing requirements for the exemption of charitable
organizations in general, has been chartered by the Congress of the
United States (except that this requirement shall not apply when the
scientific purposes are medical research), and whose objects are the
encouragement or conduct of scientific investigation, research, and
discovery for the benefit of the community at large.
   The exemption provided for herein shall be known as the "welfare
exemption." This exemption shall be in addition to any other
exemption now provided by law, and the existence of the exemption
provision in paragraph (2) of subdivision (a) of Section 202 shall
not preclude the exemption under this section for museum or library
property. Except as provided in subdivision (e), this section shall
not be construed to enlarge the college exemption.
   (b) Property used exclusively for school purposes of less than
collegiate grade and owned and operated by religious, hospital, or
charitable funds, foundations, limited liability companies, or
corporations, which property and funds, foundations, limited
liability companies, or corporations meet all of the requirements of
subdivision (a), shall be deemed to be within the exemption provided
for in subdivision (b) of Section 4 and Section 5 of Article XIII of
the California Constitution and this section.
   (c) Property used exclusively for nursery school purposes and
owned and operated by religious, hospital, or charitable funds,
foundations, limited liability companies, or corporations, which
property and funds, foundations, limited liability companies, or
corporations meet all the requirements of subdivision (a), shall be
deemed to be within the exemption provided for in subdivision (b) of
Section 4 and Section 5 of Article XIII of the California
Constitution and this section.
   (d) Property used exclusively for a noncommercial educational FM
broadcast station or an educational television station, and owned and
operated by religious, hospital, scientific, or charitable funds,
foundations, limited liability companies, or corporations meeting all
of the requirements of subdivision (a), shall be deemed to be within
the exemption provided for in subdivision (b) of Section 4 and
Section 5 of Article XIII of the California Constitution and this
section.
   (e) Property used exclusively for religious, charitable,
scientific, or hospital purposes and owned and operated by religious,
hospital, scientific, or charitable funds, foundations, limited
liability companies, or corporations or educational institutions of
collegiate grade, as defined in Section 203, which property and
funds, foundations, limited liability companies, corporations, or
educational institutions meet all of the requirements of subdivision
(a), shall be deemed to be within the exemption provided for in
subdivision (b) of Section 4 and Section 5 of Article XIII of the
California Constitution and this section. As to educational
institutions of collegiate grade, as defined in Section 203, the
requirements of paragraph (6) of subdivision (a) shall be deemed to
be met if both of the following are met:
   (1) The property of the educational institution is irrevocably
dedicated in its articles of incorporation to charitable and
educational purposes, to religious and educational purposes, or to
educational purposes.
   (2) The articles of incorporation of the educational institution
provide for distribution of its property upon its liquidation,
dissolution, or abandonment to a fund, foundation, or corporation
organized and operated for religious, hospital, scientific,
charitable, or educational purposes meeting the requirements for
exemption provided by Section 203 or this section.
   (f) Property used exclusively for housing and related facilities
for elderly or handicapped families and financed by, including, but
not limited to, the federal government pursuant to Section 202 of
Public Law 86-372 (12 U.S.C. Sec. 1701q), as amended, Section 231 of
Public Law 73-479 (12 U.S.C. Sec. 1715v), Section 236 of Public Law
90-448 (12 U.S.C. Sec. 1715z), or Section 811 of Public Law 101-625
(42 U.S.C. Sec. 8013), and owned and operated by religious, hospital,
scientific, or charitable funds, foundations, limited liability
companies, or corporations meeting all of the requirements of this
section shall be deemed to be within the exemption provided for in
subdivision (b) of Section 4 and Section 5 of Article XIII of the
California Constitution and this section.
   The amendment of this paragraph made by Chapter 1102 of the
Statutes of 1984 does not constitute a change in, but is declaratory
of, existing law. However, no refund of property taxes shall be
required as a result of this amendment for any fiscal year prior to
the fiscal year in which the amendment takes effect.
   Property used exclusively for housing and related facilities for
elderly or handicapped families at which supplemental care or
services designed to meet the special needs of elderly or handicapped
residents are not provided, or that is not financed by the federal
government pursuant to Section 202 of Public Law 86-372 (12 U.S.C.
Sec. 1701q), as amended, Section 231 of Public Law 73-479 (12 U.S.C.
Sec. 1715v), Section 236 of Public Law 90-448 (12 U.S.C. Sec. 1715z),
or Section 811 of Public Law 101-625 (42 U.S.C. Sec. 8013), shall
not be entitled to exemption pursuant to this subdivision unless the
property is used for housing and related facilities for low- and
moderate-income elderly or handicapped families. Property that would
otherwise be exempt pursuant to this subdivision, except that it
includes some housing and related facilities for other than low- or
moderate-income elderly or handicapped families, shall be entitled to
a partial exemption. The partial exemption shall be equal to that
percentage of the value of the property that is equal to the
percentage that the number of low- and moderate-income elderly and
handicapped families occupying the property represents of the total
number of families occupying the property.
   As used in this subdivision, "low and moderate income" has the
same meaning as the term "persons and families of low or moderate
income" as defined by Section 50093 of the Health and Safety Code.
   (g) (1) Property used exclusively for rental housing and related
facilities and owned and operated by religious, hospital, scientific,
or charitable funds, foundations, limited liability companies, or
corporations, including limited partnerships in which the managing
general partner is an eligible nonprofit corporation or eligible
limited liability company, meeting all of the requirements of this
section, or by veterans' organizations, as described in Section
215.1, meeting all the requirements of paragraphs (1) to (7),
inclusive, of subdivision (a), shall be deemed to be within the
exemption provided for in subdivision (b) of Section 4 and Section 5
of Article XIII of the California Constitution and this section and
shall be entitled to a partial exemption equal to that percentage of
the value of the property that the portion of the property serving
lower income households represents of the total property in any year
in which any of the following criteria applies:
   (A) The acquisition, rehabilitation, development, or operation of
the property, or any combination of these factors, is financed with
tax-exempt mortgage revenue bonds or general obligation bonds, or is
financed by local, state, or federal loans or grants and the rents of
the occupants who are lower income households do not exceed those
prescribed by deed restrictions or regulatory agreements pursuant to
the terms of the financing or financial assistance.
   (B) The owner of the property is eligible for and receives
low-income housing tax credits pursuant to Section 42 of the Internal
Revenue Code of 1986, as added by Public Law 99-514.
   (C) In the case of a claim, other than a claim with respect to
property owned by a limited partnership in which the managing general
partner is an eligible nonprofit corporation, that is filed for the
2000-01 fiscal year or any fiscal year thereafter, 90 percent or more
of the occupants of the property are lower income households whose
rent does not exceed the rent prescribed by Section 50053 of the
Health and Safety Code. The total exemption amount allowed under this
subdivision to a taxpayer, with respect to a single property or
multiple properties for any fiscal year on the sole basis of the
application of this subparagraph, may not exceed twenty thousand
dollars ($20,000) of tax.
   (D) (i) The property was previously purchased and owned by the
Department of Transportation pursuant to a consent decree requiring
housing mitigation measures relating to the construction of a freeway
and is now solely owned by an organization that qualifies as an
exempt organization under Section 501(c)(3) of the Internal Revenue
Code.
   (ii) This subparagraph shall not apply to property owned by a
limited partnership in which the managing partner is an eligible
nonprofit corporation.
   (2) In order to be eligible for the exemption provided by this
subdivision, the owner of the property shall do both of the
following:
   (A) (i) For any claim filed for the 2000-01 fiscal year or any
fiscal year thereafter, certify and ensure, subject to the limitation
in clause (ii), that there is an enforceable and verifiable
agreement with a public agency, a recorded deed restriction, or other
legal document that restricts the project's usage and that provides
that the units designated for use by lower income households are
continuously available to or occupied by lower income households at
rents that do not exceed those prescribed by Section 50053 of the
Health and Safety Code, or, to the extent that the terms of federal,
state, or local financing or financial assistance conflicts with
Section 50053, rents that do not exceed those prescribed by the terms
of the financing or financial assistance.
   (ii) In the case of a limited partnership in which the managing
general partner is an eligible nonprofit corporation, the restriction
and provision specified in clause (i) shall be contained in an
enforceable and verifiable agreement with a public agency, or in a
recorded deed restriction to which the limited partnership certifies.

   (B) Certify that the funds that would have been necessary to pay
property taxes are used to maintain the affordability of, or reduce
rents otherwise necessary for, the units
              occupied by lower income households.
   (3) As used in this subdivision, "lower income households" has the
same meaning as the term "lower income households" as defined by
Section 50079.5 of the Health and Safety Code.
   (h) Property used exclusively for an emergency or temporary
shelter and related facilities for homeless persons and families and
owned and operated by religious, hospital, scientific, or charitable
funds, foundations, limited liability companies, or corporations
meeting all of the requirements of this section shall be deemed to be
within the exemption provided for in subdivision (b) of Section 4
and Section 5 of Article XIII of the California Constitution and this
section. Property that otherwise would be exempt pursuant to this
subdivision, except that it includes housing and related facilities
for other than an emergency or temporary shelter, shall be entitled
to a partial exemption.
   As used in this subdivision, "emergency or temporary shelter"
means a facility that would be eligible for funding pursuant to
Chapter 11 (commencing with Section 50800) of Part 2 of Division 31
of the Health and Safety Code.
   (i) Property used exclusively for housing and related facilities
for employees of religious, charitable, scientific, or hospital
organizations that meet all the requirements of subdivision (a) and
owned and operated by funds, foundations, limited liability
companies, or corporations that meet all the requirements of
subdivision (a) shall be deemed to be within the exemption provided
for in subdivision (b) of Section 4 and Section 5 of Article XIII of
the California Constitution and this section to the extent the
residential use of the property is institutionally necessary for the
operation of the organization.
   (j) For purposes of this section, charitable purposes include
educational purposes. For purposes of this subdivision, "educational
purposes" means those educational purposes and activities for the
benefit of the community as a whole or an unascertainable and
indefinite portion thereof, and do not include those educational
purposes and activities that are primarily for the benefit of an
organization's shareholders. Educational activities include the study
of relevant information, the dissemination of that information to
interested members of the general public, and the participation of
interested members of the general public.
   (k) In the case of property used exclusively for the exempt
purposes specified in this section, owned and operated by limited
liability companies that are organized and operated for those
purposes, the State Board of Equalization shall adopt regulations to
specify the ownership, organizational, and operational requirements
for those companies to qualify for the exemption provided by this
section.
   (  l  ) The amendments made by Chapter 354 of
the Statutes of 2004 shall apply with respect to lien dates occurring
on and after January 1, 2005. 
  SEC. 7.    Section 214.9 of the Revenue and
Taxation Code is amended to read:
   214.9.  (a) (1) For lien dates occurring before January 1, 2015,
for the purposes of Section 214, a "hospital" includes an outpatient
clinic, whether or not patients are admitted for overnight stay or
longer, where the clinic furnishes or provides psychiatric services
for emotionally disturbed children, or where the clinic is a
nonprofit multispecialty clinic of the type described in subdivision
(  l  ) of Section 1206 of the Health and Safety
Code, so long as the multispecialty clinic does not reduce the level
of charitable or subsidized activities it provides as a proportion of
its total activities.
   (2) (A) For lien dates occurring on and after January 1, 2015, for
the purposes of Section 214, a "hospital" includes an outpatient
clinic, whether or not patients are admitted for overnight stay or
longer, where the clinic furnishes or provides psychiatric services
for emotionally disturbed children, or where the clinic is a
nonprofit multispecialty clinic of the type described in subdivision
(l) of Section 1206 of the Health and Safety Code, so long as during
the immediately preceding fiscal year, the nonprofit multispecialty
clinic provided charity care as defined in subdivision (b) of Section
127400 of the Health and Safety Code in an amount equal to at least
5 percent of its net revenues. A determination of the amount of
charity care provided by a nonprofit multispecialty clinic claiming
exemption from taxation under Section 214 shall be based on the most
recently completed audited financial statement for the nonprofit
multispecialty clinic's prior fiscal year and shall be reported each
year to the Office of Statewide Health Planning and Development and
to the State Board of Equalization in a uniform format determined by
the Office of Statewide Health Planning and Development that itemizes
the charity care provided in each of the categories within the
definition of charity care set forth in subdivision (b) of Section
127400 of the Health and Safety Code. The Office of Statewide Health
Planning and Development shall post on its Internet Web site a
complete copy of each nonprofit multispecialty clinic's annual report
and shall provide a report to the local tax assessor in whose
jurisdiction the nonprofit multispecialty clinic is located.
   (B) Each nonprofit multispecialty clinic hospital claiming
exemption from taxation under Section 214 shall post a copy of the
annual report required by this paragraph on its Internet Web site and
shall make copies available to the public at its regular business
office upon request. A nonprofit multispecialty clinic claiming
exemption from taxation under Section 214 shall file the annual
report required by this paragraph by March 30 of each year. The State
Board of Equalization may assess a fine of up to $1,000 per day for
each day an annual report required by this paragraph is delinquent,
provided that no fine shall be assessed until 10 business days have
elapsed after written notification to the nonprofit multispecialty
clinic hospital of its failure to file a compliant report.
   (b) For purposes of this section, a "hospital" does not include
those portions of an outpatient clinic which may be leased or rented
to a physician for an office for the general practice of medicine.

  SEC. 8.    Section 23701d of the Revenue and
Taxation Code is amended to read:
   23701d.  (a) A corporation, community chest or trust, organized
and operated exclusively for religious, charitable, scientific,
testing for public safety, literary, or educational purposes, or to
foster national or international amateur sports competition (but only
if no part of its activities involved the provision of athletic
facilities or equipment), or for the prevention of cruelty to
children or animals, no part of the net earnings of which inures to
the benefit of any private shareholder or individual, no substantial
part of the activities of which is carrying on propaganda or
otherwise attempting to influence legislation, (except as otherwise
provided in Section 23704.5), and which does not participate in, or
intervene in (including the publishing or distribution of
statements), any political campaign on behalf of (or in opposition
to) any candidate for public office. An organization is not organized
exclusively for exempt purposes listed above unless its assets are
irrevocably dedicated to one or more purposes listed in this section.
Dedication of assets requires that in the event of dissolution of an
organization or the impossibility of performing the specific
organizational purposes the assets would continue to be devoted to
exempt purposes. Assets shall be deemed irrevocably dedicated to
exempt purposes if the articles of organization provide that upon
dissolution the assets will be distributed to an organization which
is exempt under this section or Section 501(c)(3) of the Internal
Revenue Code or to the federal government, or to a state or local
government for public purposes; or by a provision in the articles of
organization, satisfactory to the Franchise Tax Board; that the
property will be distributed in trust for exempt purposes; or by
establishing that the assets are irrevocably dedicated to exempt
purposes by operation of law. The irrevocable dedication requirement
shall not be a sole basis for revocation of an exempt determination
made by the Franchise Tax Board prior to the effective date of this
amendment.
   (b) (1) In the case of a qualified amateur sports organization--
   (A) The requirement of subdivision (a) that no part of its
activities involves the provision of athletic facilities or equipment
shall not apply.
   (B) That organization shall not fail to meet the requirements of
subdivision (a) merely because its membership is local or regional in
nature.
   (2) For purposes of this subdivision, "qualified amateur sports
organization" means any organization organized and operated
exclusively to foster national or international amateur sports
competition if that organization is also organized and operated
primarily to conduct national or international competition in sports
or to support and develop amateur athletes for national or
international competition in sports.
   (c) For taxable years beginning on and after January 1, 2015,
notwithstanding subdivision (a) or any other law, a nonprofit
hospital as defined in subdivision (i) of Section 127472 of the
Health and Safety Code that is organized and operated within
subdivision (a) shall additionally meet the following requirements in
order to be exempt under Section 23701:
   (1) In the immediately preceding fiscal year, the nonprofit
hospital provided charity care, as defined in subdivision (b) of
Section 127400 of the Health and Safety Code, in an amount equal to
at least 5 percent of its net revenues. A determination of the amount
of charity care provided by the nonprofit hospital shall be based on
the most recently completed audited financial statement for the
nonprofit hospital's prior fiscal year and shall be reported each
year to the Office of Statewide Health Planning and Development and
to the State Board of Equalization in a uniform format determined by
the Office of Statewide Health Planning and Development that itemizes
the charity care provided in each of the categories within the
definition of charity care set forth in subdivision (b) of Section
127400 of the Health and Safety Code. The Office of Statewide Health
Planning and Development shall post on its Internet Web site a
complete copy of each nonprofit hospital's annual report and shall
provide a report to the local tax assessor in whose jurisdiction the
nonprofit hospital is located.
   (2) The nonprofit hospital shall post a copy of the annual report
required by this subdivision on its Internet Web site and shall make
copies available to the public at its regular business office upon
request. The nonprofit hospital shall file the annual report required
by this subdivision by March 30 of each year. The State Board of
Equalization may assess a fine of up to $1,000 per day for each day
an annual report required by this subdivision is delinquent, provided
that a fine shall not be assessed until 10 business days have
elapsed after written notification to the nonprofit hospital of its
failure to file a compliant report.
   (d) For taxable years beginning on and after January 1, 2015,
notwithstanding subdivision (a) or any other law, a nonprofit
multispecialty clinic of the type described in subdivision (1) of
Section 1206 of the Health and Safety Code that is organized and
operated within subdivision (a) must additionally meet the following
requirements in order to be exempt under Section 23701:
   (1) In the immediately preceding fiscal year, the nonprofit
multispecialty clinic provided charity care, as defined in
subdivision (b) of Section 127400 of the Health and Safety Code, in
an amount equal to at least 5 percent of its net revenues. A
determination of the amount of charity care provided by the nonprofit
multispecialty clinic shall be based on the most recently completed
audited financial statement for the nonprofit multispecialty clinic's
prior fiscal year and shall be reported each year to the Office of
Statewide Health Planning and Development and to the State Board of
Equalization in a uniform format determined by the Office of
Statewide Health Planning and Development that itemizes the charity
care provided in each of the categories within the definition of
charity care set forth in subdivision (b) of Section 127400 of the
Health and Safety Code. The Office of Statewide Health Planning and
Development shall post on its Internet Web site a complete copy of
each nonprofit multispecialty clinic's annual report and shall
provide a report to the local tax assessor in whose jurisdiction the
nonprofit multispecialty clinic is located.
   (2) The nonprofit multispecialty clinic shall post a copy of the
annual report required by this subdivision on its Internet Web site
and shall make copies available to the public at its regular business
office upon request. The nonprofit multispecialty clinic shall file
the annual report required by this subdivision by March 30 of each
year. The State Board of Equalization may assess a fine of up to
$1,000 per day for each day an annual report required by this
subdivision is delinquent, provided a fine shall not be assessed
until 10 business days have elapsed after written notification to the
nonprofit multispecialty clinic of its failure to file a compliant
report.
   (e) (1) Notwithstanding subdivisions (a), (b), and (c) of Section
23701, an organization organized and operated for nonprofit purposes
in accordance with this section shall be exempt from taxes imposed by
this part, except as provided in this article or in Article 2
(commencing with Section 23731), upon its submission to the Franchise
Tax Board of one of the following:
   (A) A copy of the determination letter or ruling issued by the
Internal Revenue Service recognizing the organization's exemption
from federal income tax under Section 501(a) of the Internal Revenue
Code, as an organization described in Section 501(c)(3) of the
Internal Revenue Code.
   (B) A copy of the group exemption letter issued by the Internal
Revenue Service that states that both the central organization and
all of its subordinates are tax-exempt under Section 501(c)(3) of the
Internal Revenue Code and substantiation that the organization is
included in the federal group exemption letter as a subordinate
organization.
   (2) Upon receipt of the documents required in subparagraph (A) or
(B) of paragraph (1), the Franchise Tax Board shall issue an
acknowledgment that the organization is exempt from taxes imposed by
this part, except as provided in this article or in Article 2
(commencing with Section 23731). The acknowledgment may refer to the
organization's recognition by the Internal Revenue Service of
exemption from federal income tax as an organization described in
Section 501(c)(3) of the Internal Revenue Code and, if applicable,
the organization's subordinate organization status under a federal
group exemption letter. The effective date of an organization's
exemption from state income tax pursuant to this subdivision shall be
no later than the effective date of the organization's recognition
of exemption from federal income tax as an organization described in
Section 501(c)(3) of the Internal Revenue Code, or its status as a
subordinate organization under a federal group exemption letter, as
applicable.
   (3) If, for federal income tax purposes, an organization's
exemption from tax as an organization described in Section 501(c)(3)
of the Internal Revenue Code is suspended or revoked, the
organization shall notify the Franchise Tax Board of the suspension
or revocation, in the form and manner prescribed by the Franchise Tax
Board. Upon notification, the board shall suspend or revoke,
whichever is applicable, for state income tax purposes, the
organization's exemption under paragraph (1) of this subdivision.
   (4) This subdivision shall not be construed to prevent the
Franchise Tax Board from revoking the exemption of an organization
that is not organized or operated in accordance with this chapter or
Section 501(c)(3) of the Internal Revenue Code.
   (5) If the Franchise Tax Board suspends or revokes the exemption
of an organization pursuant to paragraph (3) or (4), the exemption
shall be reinstated only upon compliance with Section 23701,
regardless of whether the organization can establish exemption under
paragraph (1).
   (f) The Franchise Tax Board may prescribe rules and regulations to
implement this section.  
  SEC. 9.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code. 
   SEC. 6.    Section 214 of the   Revenue and
Taxation Code   is amended to read: 
   214.  (a) Property used exclusively for religious, hospital,
scientific, or charitable purposes owned and operated by community
chests, funds, foundations, limited liability companies, or
corporations organized and operated for religious, hospital,
scientific, or charitable purposes is exempt from taxation, including
ad valorem taxes to pay the interest and redemption charges on any
indebtedness approved by the voters prior to July 1, 1978, or any
bonded indebtedness for the acquisition or improvement of real
property approved on or after July 1, 1978, by two-thirds of the
votes cast by the voters voting on the proposition, if:
   (1) The owner is not organized or operated for profit. 
However, in 
    (A)     In  the case of hospitals, the
organization shall not be deemed to be organized or operated for
profit if, during the immediately preceding fiscal year, operating
revenues, exclusive of gifts, endowments  ,  and
grants-in-aid, did not exceed operating expenses by an amount
equivalent to 10 percent of those operating expenses. As used herein,
operating expenses include depreciation based on cost of replacement
and amortization of, and interest on, indebtedness. 
   (B) In the case of hospitals, the organization shall be rebuttably
presumed to be organized or operated for profit if, during the
immediately preceding fiscal year, operating revenues, exclusive of
gifts, endowments and grants-in-aid, exceed operating expenses by an
amount equivalent to more than 10 percent of those operating
expenses. As used herein, operating expenses include depreciation
based on cost of replacement and amortization of, and interest on,
indebtedness. 
   (2) No part of the net earnings of the owner inures to the benefit
of any private shareholder or individual.
   (3) The property is used for the actual operation of the exempt
activity, and does not exceed an amount of property reasonably
necessary to the accomplishment of the exempt purpose.
   (A) For the purposes of determining whether the property is used
for the actual operation of the exempt activity, consideration shall
not be given to use of the property for either or both of the
following described activities if that use is occasional:
   (i) The owner conducts fundraising activities on the property and
the proceeds derived from those activities are not unrelated business
taxable income, as defined in Section 512 of the Internal Revenue
Code, of the owner and are used to further the exempt activity of the
owner.
   (ii) The owner permits any other organization that meets all of
the requirements of this subdivision, other than ownership of the
property, to conduct fundraising activities on the property and the
proceeds derived from those activities are not unrelated business
taxable income, as defined in Section 512 of the Internal Revenue
Code, of the organization, are not subject to the tax on unrelated
business taxable income that is imposed by Section 511 of the
Internal Revenue Code, and are used to further the exempt activity of
the organization.
   (B) For purposes of subparagraph (A):
   (i) "Occasional use" means use of the property on an irregular or
intermittent basis by the qualifying owner or any other qualifying
organization described in clause (ii) of subparagraph (A) that is
incidental to the primary activities of the owner or the other
organization.
   (ii) "Fundraising activities" means both activities involving the
direct solicitation of money or other property and the anticipated
exchange of goods or services for money between the soliciting
organization and the organization or person solicited.
   (C) Subparagraph (A) shall have no application in determining
whether paragraph (3) has been satisfied unless the owner of the
property and any other organization using the property as provided in
subparagraph (A) have filed with the assessor a valid organizational
clearance certificate issued pursuant to Section 254.6.
   (D) For the purposes of determining whether the property is used
for the actual operation of the exempt activity, consideration shall
not be given to the use of the property for meetings conducted by any
other organization if the meetings are incidental to the other
organization's primary activities, are not fundraising meetings or
activities as defined in subparagraph (B), are held no more than once
per week, and the other organization and its use of the property
meet all other requirements of paragraphs (1) to (5), inclusive, of
this subdivision. The owner or the other organization also shall file
with the assessor a copy of a valid, unrevoked letter or ruling from
the Internal Revenue Service or the Franchise Tax Board stating that
the other organization, or the national organization of which it is
a local chapter or affiliate, qualifies as an exempt organization
under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code or
Section 23701d, 23701f, or 23701w.
   (E) Nothing in subparagraph (A), (B), (C), or (D) shall be
construed to either enlarge or restrict the exemption provided for in
subdivision (b) of Section 4 and Section 5 of Article XIII of the
California Constitution and this section.
   (4) The property is not used or operated by the owner or by any
other person so as to benefit any officer, trustee, director,
shareholder, member, employee, contributor, or bondholder of the
owner or operator, or any other person, through the distribution of
profits, payment of excessive charges or compensations, or the more
advantageous pursuit of their business or profession.
   (5) The property is not used by the owner or members thereof for
fraternal or lodge purposes, or for social club purposes except where
that use is clearly incidental to a primary religious, hospital,
scientific, or charitable purpose.
   (6) The property is irrevocably dedicated to religious,
charitable, scientific, or hospital purposes and upon the
liquidation, dissolution, or abandonment of the owner will not inure
to the benefit of any private person except a fund, foundation, or
corporation organized and operated for religious, hospital,
scientific, or charitable purposes.
   (7) The property, if used exclusively for scientific purposes, is
used by a foundation or institution that, in addition to complying
with the foregoing requirements for the exemption of charitable
organizations in general, has been chartered by the Congress of the
United States (except that this requirement shall not apply when the
scientific purposes are medical research), and whose objects are the
encouragement or conduct of scientific investigation, research, and
discovery for the benefit of the community at large.
   The exemption provided for herein shall be known as the "welfare
exemption." This exemption shall be in addition to any other
exemption now provided by law, and the existence of the exemption
provision in paragraph (2) of subdivision (a) of Section 202 shall
not preclude the exemption under this section for museum or library
property. Except as provided in subdivision (e), this section shall
not be construed to enlarge the college exemption.
   (b) Property used exclusively for school purposes of less than
collegiate grade and owned and operated by religious, hospital, or
charitable funds, foundations, limited liability companies, or
corporations, which property and funds, foundations, limited
liability companies, or corporations meet all of the requirements of
subdivision (a), shall be deemed to be within the exemption provided
for in subdivision (b) of Section 4 and Section
                            5 of Article XIII of the California
Constitution and this section.
   (c) Property used exclusively for nursery school purposes and
owned and operated by religious, hospital, or charitable funds,
foundations, limited liability companies, or corporations, which
property and funds, foundations, limited liability companies, or
corporations meet all the requirements of subdivision (a), shall be
deemed to be within the exemption provided for in subdivision (b) of
Section 4 and Section 5 of Article XIII of the California
Constitution and this section.
   (d) Property used exclusively for a noncommercial educational FM
broadcast station or an educational television station, and owned and
operated by religious, hospital, scientific, or charitable funds,
foundations, limited liability companies, or corporations meeting all
of the requirements of subdivision (a), shall be deemed to be within
the exemption provided for in subdivision (b) of Section 4 and
Section 5 of Article XIII of the California Constitution and this
section.
   (e) Property used exclusively for religious, charitable,
scientific, or hospital purposes and owned and operated by religious,
hospital, scientific, or charitable funds, foundations, limited
liability companies, or corporations or educational institutions of
collegiate grade, as defined in Section 203, which property and
funds, foundations, limited liability companies, corporations, or
educational institutions meet all of the requirements of subdivision
(a), shall be deemed to be within the exemption provided for in
subdivision (b) of Section 4 and Section 5 of Article XIII of the
California Constitution and this section. As to educational
institutions of collegiate grade, as defined in Section 203, the
requirements of paragraph (6) of subdivision (a) shall be deemed to
be met if both of the following are met:
   (1) The property of the educational institution is irrevocably
dedicated in its articles of incorporation to charitable and
educational purposes, to religious and educational purposes, or to
educational purposes.
   (2) The articles of incorporation of the educational institution
provide for distribution of its property upon its liquidation,
dissolution, or abandonment to a fund, foundation, or corporation
organized and operated for religious, hospital, scientific,
charitable, or educational purposes meeting the requirements for
exemption provided by Section 203 or this section.
   (f) Property used exclusively for housing and related facilities
for elderly or handicapped families and financed by, including, but
not limited to, the federal government pursuant to Section 202 of
Public Law 86-372 (12 U.S.C. Sec. 1701q), as amended, Section 231 of
Public Law 73-479 (12 U.S.C. Sec. 1715v), Section 236 of Public Law
90-448 (12 U.S.C. Sec. 1715z), or Section 811 of Public Law 101-625
(42 U.S.C. Sec. 8013), and owned and operated by religious, hospital,
scientific, or charitable funds, foundations, limited liability
companies, or corporations meeting all of the requirements of this
section shall be deemed to be within the exemption provided for in
subdivision (b) of Section 4 and Section 5 of Article XIII of the
California Constitution and this section.
   The amendment of this paragraph made by Chapter 1102 of the
Statutes of 1984 does not constitute a change in, but is declaratory
of, existing law. However, no refund of property taxes shall be
required as a result of this amendment for any fiscal year prior to
the fiscal year in which the amendment takes effect.
   Property used exclusively for housing and related facilities for
elderly or handicapped families at which supplemental care or
services designed to meet the special needs of elderly or handicapped
residents are not provided, or that is not financed by the federal
government pursuant to Section 202 of Public Law 86-372 (12 U.S.C.
Sec. 1701q), as amended, Section 231 of Public Law 73-479 (12 U.S.C.
Sec. 1715v), Section 236 of Public Law 90-448 (12 U.S.C. Sec. 1715z),
or Section 811 of Public Law 101-625 (42 U.S.C. Sec. 8013), shall
not be entitled to exemption pursuant to this subdivision unless the
property is used for housing and related facilities for low- and
moderate-income elderly or handicapped families. Property that would
otherwise be exempt pursuant to this subdivision, except that it
includes some housing and related facilities for other than low- or
moderate-income elderly or handicapped families, shall be entitled to
a partial exemption. The partial exemption shall be equal to that
percentage of the value of the property that is equal to the
percentage that the number of low- and moderate-income elderly and
handicapped families occupying the property represents of the total
number of families occupying the property.
   As used in this subdivision, "low and moderate income" has the
same meaning as the term "persons and families of low or moderate
income" as defined by Section 50093 of the Health and Safety Code.
   (g) (1) Property used exclusively for rental housing and related
facilities and owned and operated by religious, hospital, scientific,
or charitable funds, foundations, limited liability companies, or
corporations, including limited partnerships in which the managing
general partner is an eligible nonprofit corporation or eligible
limited liability company, meeting all of the requirements of this
section, or by veterans' organizations, as described in Section
215.1, meeting all the requirements of paragraphs (1) to (7),
inclusive, of subdivision (a), shall be deemed to be within the
exemption provided for in subdivision (b) of Section 4 and Section 5
of Article XIII of the California Constitution and this section and
shall be entitled to a partial exemption equal to that percentage of
the value of the property that the portion of the property serving
lower income households represents of the total property in any year
in which any of the following criteria applies:
   (A) The acquisition, rehabilitation, development, or operation of
the property, or any combination of these factors, is financed with
tax-exempt mortgage revenue bonds or general obligation bonds, or is
financed by local, state, or federal loans or grants and the rents of
the occupants who are lower income households do not exceed those
prescribed by deed restrictions or regulatory agreements pursuant to
the terms of the financing or financial assistance.
   (B) The owner of the property is eligible for and receives
low-income housing tax credits pursuant to Section 42 of the Internal
Revenue Code of 1986, as added by Public Law 99-514.
   (C) In the case of a claim, other than a claim with respect to
property owned by a limited partnership in which the managing general
partner is an eligible nonprofit corporation, that is filed for the
2000-01 fiscal year or any fiscal year thereafter, 90 percent or more
of the occupants of the property are lower income households whose
rent does not exceed the rent prescribed by Section 50053 of the
Health and Safety Code. The total exemption amount allowed under this
subdivision to a taxpayer, with respect to a single property or
multiple properties for any fiscal year on the sole basis of the
application of this subparagraph, may not exceed twenty thousand
dollars ($20,000) of tax.
   (D) (i) The property was previously purchased and owned by the
Department of Transportation pursuant to a consent decree requiring
housing mitigation measures relating to the construction of a freeway
and is now solely owned by an organization that qualifies as an
exempt organization under Section 501(c)(3) of the Internal Revenue
Code.
   (ii) This subparagraph shall not apply to property owned by a
limited partnership in which the managing partner is an eligible
nonprofit corporation.
   (2) In order to be eligible for the exemption provided by this
subdivision, the owner of the property shall do both of the
following:
   (A) (i) For any claim filed for the 2000-01 fiscal year or any
fiscal year thereafter, certify and ensure, subject to the limitation
in clause (ii), that there is an enforceable and verifiable
agreement with a public agency, a recorded deed restriction, or other
legal document that restricts the project's usage and that provides
that the units designated for use by lower income households are
continuously available to or occupied by lower income households at
rents that do not exceed those prescribed by Section 50053 of the
Health and Safety Code, or, to the extent that the terms of federal,
state, or local financing or financial assistance conflicts with
Section 50053, rents that do not exceed those prescribed by the terms
of the financing or financial assistance.
   (ii) In the case of a limited partnership in which the managing
general partner is an eligible nonprofit corporation, the restriction
and provision specified in clause (i) shall be contained in an
enforceable and verifiable agreement with a public agency, or in a
recorded deed restriction to which the limited partnership certifies.

   (B) Certify that the funds that would have been necessary to pay
property taxes are used to maintain the affordability of, or reduce
rents otherwise necessary for, the units occupied by lower income
households.
   (3) As used in this subdivision, "lower income households" has the
same meaning as the term "lower income households" as defined by
Section 50079.5 of the Health and Safety Code.
   (h) Property used exclusively for an emergency or temporary
shelter and related facilities for homeless persons and families and
owned and operated by religious, hospital, scientific, or charitable
funds, foundations, limited liability companies, or corporations
meeting all of the requirements of this section shall be deemed to be
within the exemption provided for in subdivision (b) of Section 4
and Section 5 of Article XIII of the California Constitution and this
section. Property that otherwise would be exempt pursuant to this
subdivision, except that it includes housing and related facilities
for other than an emergency or temporary shelter, shall be entitled
to a partial exemption.
   As used in this subdivision, "emergency or temporary shelter"
means a facility that would be eligible for funding pursuant to
Chapter 11 (commencing with Section 50800) of Part 2 of Division 31
of the Health and Safety Code.
   (i) Property used exclusively for housing and related facilities
for employees of religious, charitable, scientific, or hospital
organizations that meet all the requirements of subdivision (a) and
owned and operated by funds, foundations, limited liability
companies, or corporations that meet all the requirements of
subdivision (a) shall be deemed to be within the exemption provided
for in subdivision (b) of Section 4 and Section 5 of Article XIII of
the California Constitution and this section to the extent the
residential use of the property is institutionally necessary for the
operation of the organization.
   (j) For purposes of this section, charitable purposes include
educational purposes. For purposes of this subdivision, "educational
purposes" means those educational purposes and activities for the
benefit of the community as a whole or an unascertainable and
indefinite portion thereof, and do not include those educational
purposes and activities that are primarily for the benefit of an
organization's shareholders. Educational activities include the study
of relevant information, the dissemination of that information to
interested members of the general public, and the participation of
interested members of the general public.
   (k) In the case of property used exclusively for the exempt
purposes specified in this section, owned and operated by limited
liability companies that are organized and operated for those
purposes, the State Board of Equalization shall adopt regulations to
specify the ownership, organizational, and operational requirements
for those companies to qualify for the exemption provided by this
section.
   (  l  ) The amendments made by Chapter 354 of the
Statutes of 2004 shall apply with respect to lien dates occurring on
and after January 1, 2005.
   SEC. 7.   The amendment of Section 214 of the Revenue
and Taxation Code made by this act does not constitute a change in,
but is declaratory of, existing law.