Amended in Senate June 26, 2014

Amended in Senate June 10, 2014

Amended in Assembly May 15, 2014

Amended in Assembly April 29, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2546

Introduced by Assembly Member Salas

February 21, 2014

An act to begin insert amend Section 31468 of, and to add Section 31552.5 to, the Government Code, and to end insert add Chapter 5.5 (commencing with Section 101852) to Part 4 of Division 101 of the Health and Safety Code, relating to public health.

LEGISLATIVE COUNSEL’S DIGEST

AB 2546, as amended, Salas. Kern County Hospital Authority.

Existing law authorizes the board of supervisors of certain counties to establish a hospital authority for the management, administration, and control of certain medical facilities.

This bill would authorize the board of supervisors of the County of Kern to establish, by ordinance, the Kern County begin delete Health System end delete begin insert Hospital end insert Authority to manage, administer, and control the Kern Medical Center and for the operation of additional programs, begin insert clinics and other end insert facilities, care organizations, physical practice plans, and delivery systems that may be affiliated or consolidated with the medical center. The bill would also authorize the establishment of the authority begin delete to manage, administer, and control the managed care plan established by Kern Health Systems in order to ensure the substantial participation of the disproportionate share hospital in the county and the safety net providers with which it is affiliated and end delete to negotiate and enter into contracts to provide or arrange, or provide directly, begin insert on a fee-for-service, capitated, or other basis, end insert health care services to specified individuals.

The bill would require the board of supervisors, in the enabling ordinance, to establish the terms and conditions of the transfers to the authority from the county and Kern Health Systems, which includes, among other things, any transfer of real and personal property. The bill would require the authority to be governed by a board of begin delete trustees, end delete begin insert governors, end insert and would require the board of supervisors, in the enabling ordinance, to specify, among other things, the begin insert number of members and composition of end insert membership of the board begin delete trustees end delete begin insert of governors end insert and the qualifications of members.

The bill would grant to the authority, among other powers, the duties, privileges, immunities, rights, liabilities, and limitations of a local unit of government within the state. The bill would specify that the transfer to the authority of the management, administration, and control of the medical center does not affect the eligibility of the county for, but authorizes the authority to participate in and receive, various sources of funding, as specified, including various Medi-Cal programs. The bill would require the board of supervisors to adopt, and the authority to implement, a personnel transition plan that requires specified actions, including ongoing communication to employees and recognized employee organizations regarding the impact of the transition on certain existing employees and employee classifications.

The bill would authorize the board of supervisors to find and declare that the authority ceases to exist, and in that event, the bill would require the board of supervisors to provide for the disposition of the authority’s assets, obligations, and begin delete liabilities. end delete begin insert liabilities, as specified. end insert

begin insert

Existing law, the County Employees Retirement Law of 1937, authorizes counties to establish retirement systems, as specified, in order to provide pension benefits to county, city, and district employees. Existing law defines a district for these purposes as a district, formed under the laws of the state, located wholly or partially within the county other than a school district.

end insert begin insert

This bill would include the authority within the definition of district and would authorize employees of the authority to participate in the Kern County Employees’ Retirement Association, as specified.

end insert

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 31468 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

31468.  

(a) “District” means a district, formed under the laws
of the state, located wholly or partially within the county other
than a school district.

(b) “District” also includes any institution operated by two or
more counties, in one of which there has been adopted an ordinance
placing this chapter in operation.

(c) “District” also includes any organization or association
authorized by Chapter 26 of the Statutes of 1935, as amended by
Chapter 30 of the Statutes of 1941, or by Section 50024, which
organization or association is maintained and supported entirely
from funds derived from counties, and the board of any retirement
system is authorized to receive the officers and employees of that
organization or association into the retirement system managed
by the board.

(d) “District” also includes, but is not limited to, any sanitary
district formed under Part 1 (commencing with Section 6400) of
Division 6 of the Health and Safety Code.

(e) “District” also includes any city, public authority, public
agency, and any other political subdivision or public corporation
formed or created under the constitution or laws of this state and
located or having jurisdiction wholly or partially within the county.

(f) “District” also includes any nonprofit corporation or
association conducting an agricultural fair for the county pursuant
to a contract between the corporation or association and the board
of supervisors under the authority of Section 25905.

(g) “District” also includes the Regents of the University of
California, but with respect only to employees who were employees
of a county in a county hospital, who became university employees
pursuant to an agreement for transfer to the regents of a county
hospital or of the obligation to provide professional medical
services at a county hospital, and who under that agreement had
the right and did elect to continue membership in the county’s
retirement system established under this chapter.

(h) “District” also includes the South Coast Air Quality
Management District, a new public agency created on February
1, 1977, pursuant to Chapter 5.5 (commencing with Section 40400)
of Part 3 of Division 26 of the Health and Safety Code.

(1) Employees of the South Coast Air Quality Management
District shall be deemed to be employees of a new public agency
occupying new positions on February 1, 1977. On that date, those
new positions are deemed not to have been covered by any
retirement system.

(2) No retirement system coverage may be effected for an
employee of the South Coast Air Quality Management District
who commenced employment with the district during the period
commencing on February 1, 1977, and ending on December 31,
1978, unless and until the employee shall have elected whether to
become a member of the retirement association established in
accordance with this chapter for employees of Los Angeles County
or the retirement association established in accordance with this
chapter for employees of San Bernardino County. The election
shall occur before January 1, 1980. Any employee who fails to
make the election provided for herein shall be deemed to have
elected to become a member of the retirement association
established in accordance with this chapter for the County of Los
Angeles.

(3) The South Coast Air Quality Management District shall
make application to the retirement associations established in
accordance with this chapter for employees of Los Angeles County
and San Bernardino County for coverage of employees of the South
Coast Air Quality Management District.

(4) An employee of the South Coast Air Quality Management
District who commenced employment with the district during the
period commencing on February 1, 1977, and ending on December
31, 1978, and who has not terminated employment before January
1, 1980, shall be covered by the retirement association elected by
the employee pursuant to paragraph (2). That coverage shall be
effected no later than the first day of the first month following the
date of the election provided for in paragraph (2).

(5) Each electing employee shall receive credit for all service
with the South Coast Air Quality Management District. However,
the elected retirement association may require, as a prerequisite
to granting that credit, the payment of an appropriate sum of money
or the transfer of funds from another retirement association in an
amount determined by an enrolled actuary and approved by the
elected retirement association’s board. The amount to be paid shall
include all administrative and actuarial costs of making that
determination. The amount to be paid shall be shared by the South
Coast Air Quality Management District and the employee. The
share to be paid by the employee shall be determined by good faith
bargaining between the district and the recognized employee
organization, but in no event shall the employee be required to
contribute more than 25 percent of the total amount required to be
paid. The elected retirement association’s board may not grant that
credit for that prior service unless the request for that credit is
made to, and the required payment deposited with, the elected
retirement association’s board no earlier than January 1, 1980, and
no later than June 30, 1980. The foregoing shall have no effect on
any employee’s rights to reciprocal benefits under Article 15
(commencing with Section 31830).

(6) An employee of the South Coast Air Quality Management
District who commenced employment with the district after
December 31, 1978, shall be covered by the retirement association
established in accordance with this chapter for employees of San
Bernardino County. That coverage shall be effected as of the first
day of the first month following the employee’s commencement
date.

(7) Notwithstanding paragraphs (2) and (4) above, employees
of the South Coast Air Quality Management District who were
employed between February 1, 1977, and December 31, 1978, and
who terminate their employment between February 1, 1977, and
January 1, 1980, shall be deemed to be members of the retirement
association established in accordance with this chapter for the
employees of Los Angeles County commencing on the date of
their employment with the South Coast Air Quality Management
District.

(i) “District” also includes any nonprofit corporation that
operates one or more museums within a county of the 15th class,
as described by Sections 28020 and 28036 of the Government
Code, as amended by Chapter 1204 of the Statutes of 1971,
pursuant to a contract between the corporation and the board of
supervisors of the county, and that has entered into an agreement
with the board and the county setting forth the terms and conditions
of the corporation’s inclusion in the county’s retirement system.

(j) “District” also includes any economic development
association funded in whole or in part by a county of the 15th class,
as described by Sections 28020 and 28036 of the Government
Code, as amended by Chapter 1204 of the Statutes of 1971, and
that has entered into an agreement with the board of supervisors
and the county setting forth the terms and conditions of the
association’s inclusion in the county’s retirement system.

(k) “District” also includes any special commission established
in the Counties of Tulare and San Joaquin as described by Section
14087.31 of the Welfare and Institutions Code, pursuant to a
contract between the special commission and the county setting
forth the terms and conditions of the special commission’s
inclusion in the county’s retirement system with the approval of
the board of supervisors and the board of retirement.

(l) (1) “District” also includes the retirement system established
under this chapter in Orange County.

(2) “District” also includes the retirement system established
under this chapter in San Bernardino County at such time as the
board of retirement, by resolution, makes this section applicable
in that county.

begin insert

(m) “District” also includes the Kern County Hospital Authority,
a public agency that is a local unit of government established
pursuant to Chapter 5.5 (commencing with Section 101852) of
Part 4 of Division 101 of the Health and Safety Code.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 31552.5 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 31552.5. end insert   

Employees and officers of the Kern County Hospital
Authority, a public agency that is a local unit of government
established pursuant to Chapter 5.5 (commencing with Section
101852) of Part 4 of Division 101 of the Health and Safety Code,
shall not automatically become members of the Kern County
Employees’ Retirement Association, but shall have their eligibility
for membership in the Kern County Employees’ Retirement
Association be established pursuant to the provisions of that
chapter.

end insert

begin delete SECTION 1. end delete
begin insert SEC. 3. end insert   

Chapter 5.5 (commencing with Section 101852) is
added to Part 4 of Division 101 of the Health and Safety Code, to
read:

 

Chapter  5.5. Kern County begin delete Health System end delete begin insert Hospital end insert
Authority Act

 

Article 1.  General Provisions

 

101852.  

(a) This chapter shall be known and may be cited as
the Kern County begin delete Health System end delete begin insert Hospital end insert Authority Act.

(b) The Legislature finds and declares all of the following:

(1) Kern Medical Center, an acute care hospital currently
operated as a constituent department of the County of Kern, is a
designated public hospital, as defined in subdivision (d) of Section
14166.1 of the Welfare and Institutions Code, and a critical
component of the state’s health care safety net.

begin delete

(2) Kern Health Systems, a separate public entity from the
County of Kern, is a special county health authority formed
pursuant to Section 14087.38 of the Welfare and Institutions Code
to address problems of delivery of publicly assisted medical care
in the County of Kern, and currently operates the local initiative,
as defined in subdivision (w) of Section 53810 of Title 22 of the
California Code of Regulations, in the county.

end delete begin insert

(2) Counties are authorized under current law to integrate their
county hospital services with those of other hospitals into a system
of community service that offers free choice of hospitals to those
requiring hospital care, with the objective of eliminating
discrimination or segregation based on economic disability, so
that the county hospital and other hospitals in the community share
in providing services to paying patients and to those who qualify
for care in public medical care programs. However, in a new era
of health care delivery, it is necessary to pursue approaches that
transition beyond acute care-centric orientations.

end insert

(3) The ongoing evolution of the health care environment begin delete is a
catalyst for end delete begin insert requires end insert public begin insert entities providing or arranging end insert health
care begin delete service entities end delete begin insert services end insert to pursue innovative health care
delivery models that proactively improve the quality of patient
care services and patient experience, efficiently and effectively
increase access to needed health care services across the care
continuum, provide services in a patient-centered manner, and
moderate the rate of growth of health care expenditures.

(4)  begin delete In order for end delete begin insert The board of supervisors of end insert the County of Kern
begin delete and Kern Health Systems to further their common mission of
improving the health status of the people of the County of Kern
through end delete begin insert has determined that end insert providing access to affordable, begin delete high
quality end delete begin insert high-quality end insert health care services, and begin delete to help ensure end delete
begin insert ensuring end insert the begin insert full engagement and end insert viability of the health care safety
net in the begin delete county, end delete begin insert county end insert begin insert are essential for improving the health
status of the people of the County of Kern. To further this
imperative, end insert it is necessary that begin delete they be permitted to combine
resources and consolidate efforts towards an integrated delivery
system to achieve health plan and provider alignment by enabling
the operation of both Kern Medical Center and the local initiative
operated by Kern Health Systems under a new special health
system authority. end delete begin insert the Kern Medical Center, while continuing as a
designated public hospital and maintaining its mission, is provided
with an organizational and operational structure that facilitates
and improves its ability to function with flexibility, responsiveness,
and innovation to promote a patient-centric system of care delivery
featuring community-based care. This can best be accomplished
by allowing the operation of the Kern Medical Center, along with
other health end insert begin insert -related resources, under a new hospital authority
that is able to pursue efforts towards a delivery system that
embraces population health management strategies, is effectively
positioned for health plan provider alignment, and maximizes
opportunities for employees and enhancement of staff morale. end insert

begin delete

(5) Because there is no general law under which this public
health system authority could be formed for these purposes, the
adoption of this act authorizing formation of a special authority
by the Legislature is required.

end delete begin insert

(5) This chapter is necessary to allow the formation of a public
hospital authority for the purposes described above.

end insert

101852.1.  

For purposes of this chapter, the following
definitions shall apply:

(a) “Authority” means the Kern begin delete County Health end delete begin insert Hospital end insert System
Authority established pursuant to this chapter.

(b) “Board of supervisors” means the board of supervisors of
the County of Kern.

(c) “Board of begin delete trustees” end delete begin insert governors end insert begin insert ” end insert means the governing body
of the authority.

(d) “County” means the County of Kern.

(e) “Enabling ordinance” means the county ordinance enacted
begin insert by the board of supervisors end insert pursuant to this chapter to establish
the authority, as begin insert it end insert may be amended from time to time.

begin delete

(f) “Kern Health Systems” means the public entity that operates
the managed care plan organized by the county pursuant to Section
14087.38 of the Welfare and Institutions Code in the County of
Kern.

(g) “Managed care plan” means the health plan licensed pursuant
to the Knox-Keene Health Care Service Plan Act of 1975 (Chapter
2.2 (commencing with Section 1340) of Division 2), which was
established by Kern Health Systems and serves as the local
initiative, as defined in subdivision (w) of Section 53810 of Title
22 of the California Code of Regulations, in the County of Kern,
and includes all plan assets and operations that exist or are later
established.

end delete begin delete

(h)

end delete

begin insert (f) end insert  “Medical center” means the assets and liabilities comprising
the Kern Medical Center begin insert , including, without limitation, a licensed
acute care hospital end insert and related public health care programs,
facilities, care organizations, physician practice plans and delivery
systems, which may be hospital-based or nonhospital-based, begin delete that
now exist or are established in the future. end delete begin insert as specified by the board
of supervisors or the authority now or in the future, as the case
may be, depending on which entity controls the medical center. end insert

 

Article 2.  Establishment of the Kern County begin delete Health System end delete
begin insert Hospital end insert Authority

 

101853.  

(a) Pursuant to this chapter, the board of supervisors
may establish by ordinance the Kern County begin delete Health System end delete
begin insert Hospital end insert Authority, which shall be a public agency that is a local
unit of government separate and apart from the county and any
other public entity for all purposes. The authority established
pursuant to this chapter shall file the statement required by Section
53051 of the Government Code, and is a public entity for purposes
of Division 3.6 (commencing with Section 810) of Title 1 of the
Government Code.

(b) The purpose of the authority shall be to do all of the
following:

(1) Provide management, administration, and other controls
consistent with this chapter begin delete for end delete begin insert as needed to operate end insert the medical
center begin delete to continue to operate end delete begin insert and maintain its status end insert as a designated
public hospital, as defined in subdivision (d) of Section 14166.1
of the Welfare and Institutions Code, and for the operation of
additional programs, begin insert clinics and other end insert facilities, care organizations,
begin insert health care service and end insert physician practice plans, and delivery
systems that may be affiliated or consolidated with the medical
center, to ensure the viability of the health care safety net in the
county in a manner consistent with the county’s requirements under
Section 17000 of the Welfare and Institutions Code.

(2) Provide management, administration, and other controls
consistent with this chapter begin delete for the managed care plan to continue
to operate as a local initiative, as defined in subdivision (w) of
Section 53810 of Title 22 of the California Code of Regulations,
to ensure the substantial participation of the disproportionate share
hospital in the county and the safety net providers with which it
is affiliated, and end delete to negotiate and enter into contracts to provide
or arrange, or provide directly, begin insert end insert begin insert on a fee-for-service, capitated, or
other basis end insert begin insert , end insert health care services to individuals including, but not
limited to, those covered under Subchapters XVIII (commencing
with Section 1395), XIX (commencing with Section 1396), and
XXI (commencing with Section 1397aa) of Chapter 7 of Title 42
of the United States Code, those entitled to coverage under private
group coverage, private individual coverage, including without
limitation, coverage through Covered California, other publicly
supported programs, those employed by public agencies or private
businesses, and uninsured or indigent individuals.

(c) Subject to the requirements of this chapter, the authority
shall begin insert have and end insert be charged with begin insert authority for end insert the management,
administration, and control of the medical center and begin delete the managed
care plan. end delete begin insert other health end insert begin insert -related resources. end insert The State Department
of Health Care Services begin delete and Department of Managed Health Care end delete
shall take all necessary steps to ensure all of the following:

(1) The authority is permitted to operate the medical begin delete center and
the managed care plan. end delete begin insert center. end insert

(2) The medical center continues its status as a designated public
begin delete hospital. end delete begin insert hospital to at least the same extent as it would be
designated in the absence of its transfer to the authority pursuant
to this chapter. end insert

begin delete

(3) The managed care plan continues to operate as a local
initiative.

end delete begin delete

(4)

end delete

begin insert (3) end insert  The authority may participate as a contributing public agency
for begin insert all of end insert the purposes begin delete of end delete begin insert specified in end insert Section 433.51 of Title 42
of the Code of Federal begin delete Regulations. end delete begin insert Regulations, to the extent
permitted by federal law. end insert

(d) The board of supervisors, in the enabling ordinance, shall
establish the terms and conditions of the begin delete transfers end delete begin insert transfer end insert to the
authority from the begin delete county and Kern Health Systems, end delete begin insert county, end insert
including, but not limited to, all of the following:

(1) Any transfer of real and personal property, assets and
liabilities, including, but not limited to, liabilities of the medical
center determined and assigned by the county for county funds
previously advanced begin insert , but not repaid or otherwise recovered, end insert to
fund the operations of the medical center.

(2) Transfer of employees, including any necessary personnel
transition plan, as specified in Section begin delete 101853.1. end delete begin insert end insert begin insert 101853.1, and
assignment of title to funded pension assets and responsibility for
any unfunded pension liabilities. end insert

(3)  begin delete Maintenance end delete begin insert Maintenance, end insert operation begin insert , end insert and management or
ownership of the medical begin delete center and managed care plan. end delete begin insert center. end insert

(4) Transfer of licenses.

(5) Any other matters as the board of supervisors deems
necessary, appropriate or convenient for the conduct of the
authority’s begin delete activities end delete begin insert activities. end insert

begin delete

(e) (1) Upon establishment of the authority, all assets and
liabilities comprising the managed care plan, and all operations
and governance of the managed care plan, shall be transferred to
the authority pursuant to the terms and conditions specified in the
enabling ordinance. The effective date of the transfer shall be as
prescribed in the enabling ordinance. The managed care plan shall
provide at least 30 days advance notice for change of ownership
to the Department of Managed Health Care in the form of a notice
of material modification.

(2) The notice of material modification shall describe any
changes in the governing body or higher management of the
managed care plan, and, notwithstanding any other law, shall be
deemed approved upon receipt. Any other changes to plan
operations, governance, or financial status shall be made after the
change of ownership, and shall be subject to the requirements of
the Knox-Keene Health Care Service Plan Act of 1975 (Chapter
2.2 (commencing with Section 1340) of Division 3).

(3) Upon the transfer of the maintenance, operation, and
management or ownership of the managed care plan to the
authority, the board of supervisors shall terminate Kern Health
Systems by ordinance. The board of supervisors shall notify the
State Department of Health Care Services 30 days prior to the
effective date of the termination.

(4) The provisions set forth in paragraph (5) of subdivision (t)
of, and subdivisions (v) and (x) of, Section 14087.38 of the Welfare
and Institutions Code shall not apply to the termination of Kern
Health Systems made pursuant to this chapter.

(5) Any liabilities of Kern Health Systems shall not become
obligations of the county upon termination of Kern Health Systems.

(6) With respect to the maintenance, operation, and management
or ownership of the managed care plan, the authority shall comply
with the applicable requirements of the Knox-Keene Health Care
Service Plan Act of 1975 (Chapter 2.2 (commencing with Section
1340) of Division 3).

(7) The board of supervisors may contract with the authority to
provide indigent care services on behalf of the county. The contract
shall specify that county policies, as may be modified from time
to time and consistent with the county’s obligations under Section
17000 of the Welfare and Institutions Code, shall be applicable.
Notwithstanding any other provision of this chapter, the authority
shall not undertake any of the county’s obligations under Section
17000 of the Welfare and Institutions Code, nor shall the authority
have an entitlement to receive any revenue for the discharge of
the county’s obligations, without a written agreement with the
county. Any contract executed by and between the county and the
authority shall provide for the indemnification of the county by
the authority for liabilities as specifically set forth in the contract,
except that the contract shall include a provision that the county
shall remain liable for its own negligent acts. Indemnification by
the authority shall not be construed as divesting the county from
its ultimate responsibility for compliance with Section 17000 of
the Welfare and Institutions Code.

end delete begin delete

(f)

end delete

begin insert (e) end insert  (1)  begin delete A end delete begin insert Notwithstanding any other law, a end insert transfer of
maintenance, operation, and management or ownership or lease
of the medical center to the authority may be begin delete made end delete begin insert made, end insert with or
without the payment of a purchase price by the begin delete authority end delete begin insert authority, end insert
and otherwise upon the terms and conditions as found necessary
by the board of supervisors and specified in the enabling ordinance
to ensure that the transfer will constitute an ongoing material
benefit to the county and its residents.

(2) A transfer of the maintenance, operation, and management begin insert ,
or ownership or lease end insert of the medical center to the authority shall
not be construed as empowering the authority to transfer any
ownership interest of the county in begin insert any portion of end insert the medical
center except as otherwise approved by the board of supervisors.

(3) The authority shall not transfer the maintenance, operation,
and management or ownership or lease of the medical center to
any other begin insert person or end insert entity without the prior written approval of
the board of supervisors. begin insert This paragraph shall not prevent the
county, by ordinance, from allowing the disposal of obsolete or
surplus equipment, supplies, or furnishings of the medical center
by the authority. end insert

(4) With respect to the maintenance, operation, and management
or ownership begin insert or lease end insert of the medical center, the authority shall
conform to both of the following requirements:

(A) Comply with begin insert any applicable requirements of end insert Section
14000.2 of the Welfare and Institutions Code.

(B) Comply with any applicable requirements of Section 1442.5.

(5) The board of supervisors may retain control of the medical
center physical plant and begin delete facilities except as otherwise end delete begin insert facilities,
as end insert specifically provided for in the enabling ordinance or other
lawful agreements entered into by the board of supervisors. Any
lease agreement begin delete or other agreement end delete between the county and the
authority begin delete may end delete begin insert shall end insert provide that county premises shall not be sublet
without the approval of the board of supervisors.

(6) Notwithstanding any other provision of this chapter, and
whether or not accompanied by a change in licensing, the
authority’s responsibility for the maintenance, operation, and
management begin insert of the medical center, end insert or begin insert any end insert ownership begin insert or leasehold
interest end insert of the begin insert authority in the end insert medical center begin insert , end insert does not relieve the
county of the ultimate responsibility for indigent care pursuant to
Section 17000 of the Welfare and Institutions Code.

begin insert

(7) For purposes of Article 12 (commencing with Section
17612.1) of Chapter 6 of Part 5 of Division 9 of the Welfare and
Institutions Code, and the definition set forth in subdivision (f) of
Section 17612.2 of the Welfare and Institutions Code, the medical
center, excluding components that provide predominately public
health services, and the county are affiliated governmental entities.

end insert begin insert

(f) The board of supervisors may contract with the authority for
the provision of indigent care services on behalf of the county. The
contract shall specify that county policies, as may be modified
from time to time and consistent with the county’s obligations
under Section 17000 of the Welfare and Institutions Code, shall
be applicable. Notwithstanding any other provision of this chapter,
the authority shall not undertake any of the county’s obligations
under Section 17000 of the Welfare and Institutions Code, nor
shall the authority have an entitlement to receive any revenue for
the discharge of the county’s obligations, without a written
agreement with the county. Any contract executed by and between
the county and the authority shall provide for the indemnification
of the county by the authority for liabilities as specifically set forth
in the contract, except that the contract shall include a provision
that the county shall remain liable for its own negligent acts.
Indemnification by the authority shall not divest the county from
its ultimate responsibility for compliance with Section 17000 of
the Welfare and Institutions Code.

end insert

(g) Unless otherwise agreed to by the authority and the board
of supervisors, an obligation of the authority, statutory, contractual,
or otherwise, shall be the obligation solely of the authority and
shall not be the obligation of the county or any other entity, and
any contract executed by and between the county and the authority,
or any other entity and the authority, shall contain a provision that
liabilities or obligations of the authority with respect to its activities
pursuant to the contract shall be the liabilities or obligations of the
authority and shall not be or become the liabilities or obligations
of the county or the other entity, respectively. An obligation of the
authority, statutory, contractual, or otherwise, shall not be the
obligation of the state.

(h) The authority shall not be a “person” subject to suit under
the Cartwright Act (Chapter 2 (commencing with Section 16700)
of Part 2 of Division 7 of the Business and Professions Code).

(i)  The authority is not subject to the jurisdiction of a local
agency formation commission pursuant to the
Cortese-Knox-Hertzberg Local Government Reorganization Act
of 2000 (Division 3 (commencing with Section 56000) of Title 5
of the Government Code), or any successor statute.

begin insert (j) end insert begin insert   end insert begin insert The authority is a “district” within the meaning set forth in
the County Employees Retirement Law of 1937 (Chapter 3
(commencing with Section 31450) of Part 3 of Division 4 of Title
3 of the Government Code). Employees of the authority are eligible
to become members or maintain membership, as applicable, in
the Kern County Employees’ Retirement Association, to the extent
described in subdivision (g) of Section 101853.1. end insert

101853.1.  

(a) In exercising its powers to employ personnel,
the authority shall implement, and the board of supervisors shall
adopt, a personnel transition plan. The personnel transition plan
shall require all of the following:

(1) Ongoing communication to employees and recognized
employee organizations regarding the impact of the transition on
existing begin delete managed care plan, end delete medical center, county, and other
health care facility employees and employee classifications.

(2) Meeting and conferring with representatives of affected
bargaining unit employees on both of the following issues:

(A) A timeframe for which the transfer of personnel shall occur.

(B) Specified periods of time during which county or medical
center employees affected by the establishment of the authority
may elect to be considered for appointment begin insert and exercise
reinstatement rights, if applicable, end insert to funded, equivalent, vacant
county begin delete positions, and exercise reinstatement rights, end delete begin insert positions end insert for
which they are qualified and eligible. An employee who first elects
to remain with the begin delete county, but who end delete begin insert county may end insert subsequently begin delete seeks
employment end delete begin insert seek reinstatement end insert with the authority within 30 days
of begin delete this election, end delete begin insert the election to remain with the county and end insert shall
be subject to the requirements of this article.

(3) Acknowledgment that the authority, to the extent permitted
by federal begin insert and state end insert law, shall be bound by the terms of the
memoranda of understanding executed between the county and its
exclusive employee representatives that are begin delete or will be end delete in effect begin delete as
of end delete begin insert on end insert the date the county adopts the enabling ordinance pursuant
to this begin delete article. end delete begin insert chapter. end insert Subsequent memoranda of understanding
begin insert with exclusive employee representatives end insert shall be subject to approval
only by the begin delete board of trustees, and not the county. end delete begin insert board of
governors. end insert

(b)  begin delete The implementation end delete begin insert Implementation end insert of this chapter shall
not be a cause for the modification of the begin delete level of end delete medical begin delete center,
county, or Kern Health Systems end delete begin insert center or county end insert employment
benefits. Upon the execution of the enabling ordinance, employees
begin delete who serve or work for end delete begin insert of end insert the medical begin delete center, county, or Kern Health
Systems immediately prior to the implementation of this chapter,
and end delete begin insert center or county on the date of execution, end insert who become
authority employees, shall retain their existing or equivalent
classifications and job descriptions upon transfer to the authority,
comparable pension benefits, and begin delete at least end delete their existing salaries
and other benefits that include, but are not limited to, accrued and
unused vacation, sick leave, personal leave, health care, retiree
health benefits, and deferred compensation plans. begin insert The transfer of
an employee from the medical center or county shall not constitute
a termination of employment for purposes of Section 227.3 of the
Labor Code, or employee benefit plans and arrangements
maintained by the medical center or county end insert begin insert , except as otherwise
provided in the enabling ordinance or personnel transition plan,
nor shall it be counted as a break in uninterrupted employment
for purposes of Section 31641 of the Government Code with respect
to the Kern County Employees’ Retirement Association, or state
service for purposes of the Public Employees’ Retirement System
(Part 3 (commencing with Section 20000) of Division 5 of Title 2
of the Government Code). end insert

(c)  begin delete The end delete begin insert Subject to applicable state law, the end insert authority shall
recognize begin delete as end delete the exclusive begin insert employee end insert representatives of those
authority employees who begin delete perform functions end delete begin insert are end insert transferred from
the county or medical center to the begin delete authority, end delete begin insert authority end insert pursuant
to this begin delete chapter, the employee organizations that represented the
employees at the county or medical center performing those
functions at the time of transfer. end delete begin insert chapter. end insert

(d) In order to stabilize labor and employment relations and
provide continuity of care and services to the people of the county,
and notwithstanding any other law, the authority shall do all of the
following for a period of 24 months after the effective date of the
transfer of the medical center to the authority:

(1) Continue to recognize each exclusive begin insert employee end insert
representative of each bargaining unit.

(2) Continue to provide begin delete at least end delete the same level of employee
benefits to authority employees, begin delete who were medical center, county,
or managed care plan employees, that had been provided to these
employees, whether those end delete begin insert whether the obligation to provide those end insert
benefits arise out of a memorandum of understanding, or other
agreements or law.

(3)  begin delete Roll over end delete begin insert Extend end insert and continue to be bound by any existing
begin delete medical center or county end delete memoranda of understanding covering
the terms and begin delete condition end delete begin insert conditions of employment for employees
of the authority end insert , including the level of wages and benefits, begin delete of
transferred employees for 24 months after the term end date of
any memoranda of agreement, end delete begin insert and any county rules, ordinances,
or policies specifically identified and incorporated by reference
in a memoranda of understanding for 24 months or through the
term of the memorandum of understanding, whichever shall be the
longer, end insert unless modified by mutual agreement with each of the
begin delete employees’ end delete exclusive begin delete representatives, and only to the extent that
continuing end delete begin insert employee representatives. The authority shall continue end insert
to provide those pension benefits specified in any memoranda of
agreement begin insert as long as doing so end insert does not conflict with any Kern
County begin delete Employees’ end delete begin insert Employee end insert Retirement Association begin delete regulation
or federal law. Any conflicts in the existing agreements as to wages
and other terms and conditions of employment shall be resolved
only by mutual agreement between the authority and each of the
exclusive employee representatives. end delete begin insert bylaws, or federal or state
law including the County Employees end insert begin insert Retirement Law of 1937
(Chapter 3 (commencing with Section 31450) of Part 3 of Division
4 of Title 3 of the Government Code). end insert

begin insert

(4) Meet and confer with the exclusive employee representatives
to develop processes and procedures to address employee
disciplinary action taken against permanent employees. If the
authority terminates, suspends, demotes, or reduces the pay of a
permanent employee for disciplinary reasons, those actions shall
only be for cause consistent with state law, and an employee shall
be afforded applicable due process protections granted to public
employees under state law. Permanent employees laid off by the
authority within six months of the date the ordinance is adopted
shall remain on the county reemployment list for two years.
Inclusion on the county reemployment list is not a guarantee of
reemployment. For the purposes of this paragraph, the term
“permanent employees” excludes probationary employees,
temporary employees, seasonal employees, provisional employees,
extra help employees, and per diem employees.

end insert begin insert

(5) To the extent layoffs occur, and provided that all other
previously agreed upon factors are equal, ensure that seniority
shall prevail. The authority shall meet and confer with the exclusive
employee representatives to address layoff procedures and the
manner in which, and the extent to which, seniority shall be
measured for employees who transfer from the medical center or
county.

end insert

(e) Permanent employees of the medical begin delete center, county, or Kern
Health Systems end delete begin insert center or county end insert on the effective date of the transfer
of the medical center begin delete and the managed care plan, as applicable, end delete to
the authority, shall be deemed qualified for employment begin delete or
retention end delete in equivalent positions at the authority, and no other
qualifications shall be required except as otherwise required by
state or federal law. Probationary employees on the effective date
of begin delete , end delete begin insert the transfer, end insert as set forth in this paragraph, shall retain their
probationary status and rights and shall not be begin delete deemed to have
transferred so as to require serving end delete begin insert required to serve end insert a new
probationary begin delete period. end delete begin insert or extend their probationary period by reason
of the transfer. end insert To the extent possible, employees who transfer to
equivalent positions at the authority shall retain their existing
classifications and job descriptions, but begin delete to the extent end delete begin insert if end insert there is a
dispute begin delete on end delete begin insert over end insert this issue, the authority agrees to meet and confer
with the begin insert exclusive employee representatives of the end insert transferred
begin delete employees exclusive authorized representative. end delete begin insert employees. end insert

(f) Employees who transfer from the medical begin delete center, county, or
Kern Health Systems end delete begin insert center or county end insert to the authority shall retain
the seniority they earned begin delete from their previous employers. The
authority shall continue to provide for the maintenance of any
benefits that accompany seniority, if they existed, prior to the
transfer. All time served in the same, equivalent, or higher
classification shall be counted toward classification seniority. end delete begin insert at
the medical center or county end insert begin insert and any benefits or privileges based
on the seniority. end insert

begin insert

(g) Notwithstanding any other law, employees of the authority
may participate in the Kern County Employees’ Retirement
Association, operated pursuant to the County Employees
Retirement Law of 1937 (Chapter 3 (commencing with Section
31450) of Part 3 of Division 4 of Title 3 of the Government Code),
as follows:

end insert begin insert

(1) Employees transferred from the county or medical center
to the authority who are subject to a memorandum of
understanding between the authority and an exclusive employee
representative, as described in paragraphs (2) and (3) of
subdivision (d), and who were members of the Kern County
Employees’ Retirement Association at the time of their transfer of
employment, shall continue to be a member of the Kern County
Employees’ Retirement Association, retaining service credit earned
to the date of transfer, to the extent provided for in the applicable
memorandum of understanding.

end insert begin insert

(2) Employees transferred from the county or medical center
to the authority who are subject to a memorandum of
understanding between the authority and an exclusive employee
representative, as described in paragraphs (2) and (3) of
subdivision (d), and who were not members of the Kern County
Employees’ Retirement Association at the time of their transfer of
employment, shall subsequently become a member of the Kern
County Employees’ Retirement Association only to the extent
provided for in the applicable memorandum of understanding.

end insert begin insert

(3) Employees transferred from the county or medical center
to the authority who are not subject to a memorandum of
understanding between the authority and an exclusive employee
representative, as described in paragraphs (2) and (3) of
subdivision (d), and who were members of the Kern County
Employees’ Retirement Association at the time of their transfer of
employment, shall continue to be a member of the Kern County
Employees’ Retirement Association, retaining service credit earned
to the date of transfer, as provided in the enabling ordinance or
the personnel transition plan.

end insert begin insert

(4) Employees transferred from the county or medical center
to the authority who are not subject to a memorandum of
understanding between the authority and an exclusive employee
representative, as described in paragraphs (2) and (3) of
subdivision (d), and who were not members of the Kern County
Employees’ Retirement Association at the time of their transfer of
employment, shall subsequently become a member of the Kern
County Employees’ Retirement Association only to the extent
provided in the enabling ordinance or the personnel transition
plan.

end insert begin insert

(5) Employees hired by the authority on or after the effective
date of the enabling ordinance shall become a member of the Kern
County Employees’ Retirement Association only to the extent
provided in the enabling ordinance or personnel transition plan
described in subdivision (a), or, if subject to a memorandum of
understanding between the authority and an exclusive employee
representative as described in paragraphs (2) and (3) of
subdivision (d), to the extent provided for in the applicable
memorandum of understanding.

end insert begin insert

(6) Notwithstanding any other law, for purposes of California
Public Employees’ Pension Reform Act of 2013 (Article 4
(commencing with Section 7522) of Chapter 21 of Division 7 of
Title 1 of the Government Code), an individual who was employed
by the county or the medical center when it was a constituent
department of the county, and is a member of the Kern County
Employees’ Retirement Association or the Public Employees’
Retirement System, as set forth in Part 3 (commencing with Section
20000) of Division 5 of Title 2 of the Government Code, prior to
January 1, 2013, and who transfers, directly or after a break in
service of less than six months, to the authority, in which the
individual continues to be a member of either the Kern County
Employees’ Retirement Association or the Public Employees’
Retirement System, as applicable, shall not be deemed to be a new
employee or a new member within the meaning of Section 7522.04
of the Government Code, and shall continue to be subject to the
same defined benefit formula, as defined in Section 7522.04 of the
Government Code, as it would have been available to members of
the Kern County Employees’ Retirement Association or the Public
Employees’ Retirement System who were first employed by the
county or medical center and as a result of the employment became
a member of a public retirement system, on or before December
31, 2012.

end insert begin insert

(h) This chapter shall not prohibit the authority from contracting
with the Public Employees’ Retirement System, in accordance with
the requirements of Section 20508 and any other applicable
provisions of Part 3 (commencing with Section 20000) of Division
5 of Title 2 of the Government Code, for the purpose of providing
employee participation in that system, or from establishing an
alternative or supplemental retirement system or arrangement,
including, but not limited to, deferred compensation arrangements,
to the extent permitted by law and subject to any applicable
agreement between the authority and the exclusive employee
representatives, and as provided in the enabling ordinance or the
personnel transition plan.

end insert begin delete

(g) Notwithstanding anything to the contrary contained in this
chapter, this chapter

end delete

begin insert (i) end insert begin insert   end insert begin insert Provided that this is not inconsistent with anything in this
chapter, this chapter end insert does not prohibit the authority from
determining the number of employees, the number of full-time
equivalent positions, job descriptions, the nature and extent of
classified employment positions, and salaries of employees.

 

Article 3.  Board of begin delete Trustees end delete begin insert Governors end insert

 

101854.  

(a) The authority established pursuant to this chapter
shall be governed by a board of begin delete trustees end delete begin insert governors end insert that is
appointed, both initially and continually, by the board of
supervisors. The board of supervisors, in the enabling ordinance,
shall specify the begin insert number of members and the composition of end insert
membership of the board of begin delete trustees, end delete begin insert governors, end insert the qualifications
for individual members, the manner of appointment, selection, or
removal of board of begin delete trustees end delete begin insert governors end insert members, their terms of
office, and all other matters that the board of supervisors deems
necessary or convenient for the conduct of the board of begin delete trustees. end delete
begin insert governors. end insert Notwithstanding any other law, at the board of
supervisors’ discretion and as specified in the enabling ordinance,
the board of begin delete trustees end delete begin insert governors end insert may consist entirely of members
of the board of supervisors or may include any number of the
members of the board of begin delete supervisors. end delete begin insert supervisors or county officers
or employees appointed to represent the interest of the county. end insert

(b) The board of supervisors, either during or after the formation
of the authority, may modify the number, length of terms, begin delete and
appointing authority for the board of trustees, end delete begin insert qualifications,
method of appointment, end insert and provisions for all other matters
pertaining to the board of begin delete trustees end delete begin insert governors end insert by subsequent
ordinance.

(c) The board of supervisors shall adopt bylaws for the authority
that, among other things, shall specify the officers of the board of
begin delete trustees, end delete begin insert governors, end insert the time, place, and conduct of meetings, and
other matters that the board of supervisors deems necessary or
appropriate to conduct the authority’s activities. The bylaws shall
be operative upon approval by a majority vote of the board of
supervisors, but may be amended, from time to time, by a majority
vote of the board of supervisors.

(d) Notwithstanding any other law, a member of the board of
begin delete trustees end delete begin insert governors end insert shall not be deemed to be interested in a contract
entered into by the authority within the meaning of Article 4
(commencing with Section 1090) of Chapter 1 of Division 4 of
Title 1 of the Government Code if either of the following apply:

(1) The begin insert contract is between the authority and the county or an
agency of the county, and the end insert member is also a member of the
board of supervisors, or is a county begin insert officer or end insert employee appointed
to represent the interests of the begin delete board of supervisors. end delete begin insert county. end insert

(2) All the following applies to the member:

(A) The member was appointed to represent the interests of
physicians, health care practitioners, hospitals, pharmacies, or
other health care organizations, or beneficiaries.

(B) The contract authorizes the member or the organization the
member represents to provide services to beneficiaries under the
authority’s programs.

(C) The contract contains substantially the same terms and
conditions as contracts entered into with other individuals or
organizations that the member was appointed to represent.

(D) The member does not influence or attempt to influence the
health authority or another member of the authority to enter into
the contract in which the member is interested.

(E) The member discloses the interest to the authority and
abstains from voting on the contract.

(F) The board of begin delete trustees end delete begin insert governors end insert notes the member’s
disclosure and abstention in its official records and authorizes the
contract in good faith by a vote of its membership sufficient for
the purpose without counting the vote of the interested member.

(e) Members of the board of begin delete trustees end delete begin insert governors end insert shall not be
vicariously liable for injuries caused by the act or omission of the
authority to the extent that protection applies to members of
governing boards of local public entities generally under Section
820.9 of the Government Code.

(f) The board of begin delete trustees end delete begin insert governors end insert created and appointed
pursuant to this chapter is a duly constituted governing body as
the term is used in Section 1250 and defined in Section 70035 of
Title 22 of the California Code of Regulations.

(g) In the event of a change of license ownership, the board of
begin delete trustees end delete begin insert governors end insert shall comply with the obligations of governing
bodies of general acute care hospitals generally as set forth in
Section 70701 of Title 22 of the California Code of Regulations,
as currently written or subsequently amended, as well as the terms
and conditions of the license. The authority shall be the responsible
party with respect to compliance with these obligations, terms,
and conditions.

 

Article 4.  Powers and Duties of the Authority

 

101855.  

(a) The authority, in addition to any other powers
granted pursuant to this chapter, shall have the following powers:

(1) To have the duties, privileges, immunities, rights, liabilities,
and limitations of a local unit of government within the state.

(2) To have perpetual existence.

(3) To adopt, have, and use a seal, and to alter it at its pleasure.

(4) To sue and be sued in the name of the authority in all actions
and proceedings in all courts and tribunals of competent
jurisdiction.

(5) To purchase, lease, trade, exchange, or otherwise acquire,
maintain, hold, improve, mortgage, lease, sell, and dispose of real
and personal property of any kind necessary or convenient to
perform its functions and fully exercise its powers.

(6) To appoint and employ a chief executive officer and other
officers and employees that may be necessary or appropriate,
including legal counsel, to establish their compensation, provide
for their health, retirement, and other employment benefits, and
to define the power and duties of officers and employees.

(7) (A) To incur indebtedness and to borrow money and issue
bonds evidencing the same, including the authority to issue, from
time to time, notes and revenue bonds in principal amounts that
the authority determines to be necessary to provide sufficient funds
for achieving any of its purposes, including, but not limited to,
assumption or refinancing of debt service for capital projects
eligible for Medi-Cal supplemental payments pursuant to Section
14085.5 of the Welfare and Institutions Code, begin insert end insert begin insert or any successor or
modified Medi-Cal debt service reimbursement program, end insert the
payment of interest on notes and bonds of the authority, the
establishment of reserves to secure begin delete these end delete begin insert those end insert notes and bonds,
and all other expenditures of the authority incident to and necessary
or convenient to carry out its purposes and powers.

(B) Any notes, bonds, or other securities issued, and the income
from them, including any profit from the sale thereof, shall at all
times be free from taxation by the state or any agency, political
subdivision, or instrumentality of the state.

(C) Notwithstanding the provisions of subparagraph (A), for
any indebtedness, notes, bonds, or other securities that require
voter approval pursuant to state law, the prior approval of the board
of supervisors shall be required. Notwithstanding the required prior
approval of the board of supervisors, any indebtedness incurred,
or notes, bonds, or other securities issued pursuant to this
subparagraph shall be the indebtedness, notes, bonds, or securities
of the authority and not of the county, and the credit of the county
shall not be pledged or relied upon in any manner in order to incur
the indebtedness, or issue the notes, bonds, or other securities,
unless the board of supervisors explicitly authorizes the use of the
county’s credit. The authority shall reimburse the county for all
costs associated with the county’s consideration of the
indebtedness, notes, bonds, or securities, and the authority shall
defend, indemnify, and hold harmless the county from any and all
liability, costs, or expenses arising from or related to the
indebtedness, notes, bonds, or securities.

(D) Nothing begin delete herein end delete begin insert in this section end insert shall preclude the authority
from repayment of its debts or other liabilities, using funds that
are not otherwise begin delete encumbered and do not cause the managed care
plan’s tangible net equity to drop below its required level. end delete
begin insert encumbered. end insert

(8) To pursue its own credit rating.

(9) To enter into a contract or agreement consistent with this
chapter or the laws of this state, begin insert end insert begin insert including, but not limited to,
contracting with any public or private entity or person for
management or other services and personnel, end insert and to authorize the
chief executive officer to enter into contracts, execute all
instruments, and do all things necessary or convenient in the
exercise of the powers granted in this chapter.

(10) To purchase supplies, equipment, materials, property, and
services.

(11) To establish policies relating to its purposes.

(12) To acquire or contract to acquire, rights-of-way, easements,
privileges, and property, and to construct, equip, maintain, and
operate any and all works or improvements wherever located that
are necessary, convenient, or proper to carry out any of the
provisions, objects, or purposes of this chapter, and to complete,
extend, add to, repair, or otherwise improve any works or
improvements acquired by it.

(13) To participate in, contract for, and to accept, gifts, grants,
and loans of funds, property, or other aid or finance opportunity
in any form from the federal government, the state, a state agency,
or other source, or combination thereof, as otherwise would be
available to a public, government, or private entity, and to comply,
subject to this chapter, with the terms and conditions thereof.

(14) To invest surplus money in its own treasury, manage
investments, and engage third-party investment managers, in
accordance with state law.

(15) To arrange for guarantees or insurance of its bonds, notes,
or other obligations by the federal or state government or by a
private insurer, and to pay the premiums thereof.

(16) To engage in managed care contracting, joint ventures,
affiliations with other health care facilities, other health care
providers and payers, management agreements, or to participate
in alliances, purchasing consortia, health insurance pools,
accountable care organizations, alternative delivery systems, or
other cooperative arrangements, with any public or private entity.

(17) To enter into joint powers agreements pursuant to Chapter
5 (commencing with Section 6500) of Division 7 of Title 1 of the
Government Code. Notwithstanding any other provision of law,
the authority may enter into a joint powers agreement as described
in Section 6523.5 of the Government Code as though that section
applied to hospitals and other health care facilities in the County
of Kern.

(18) To establish nonprofit, for profit, or other entities necessary
to carry out the duties of the authority.

(19) To elect to transfer funds to the state and incur certified
public expenditures in support of the Medi-Cal program and other
programs for which federal financial participation is available.

(20) To use a computerized management information system,
including an electronic health records system, in connection with
begin insert its operations, including, without limitation end insert begin insert end insert the administration of
its begin delete facilities and Medi-Cal managed care plans. end delete begin insert facilities. end insert

(21) To request that the board of supervisors levy a tax on behalf
of the authority. If the board of supervisors approves the proposal
to levy the tax, it shall call the election to seek voter approval and
place the appropriate measure on the ballot for that election. The
proceeds of these taxes shall be tax proceeds of the authority and
not of the county. The authority shall reimburse the county for all
costs associated with the county’s consideration of begin delete these end delete begin insert those end insert
taxes, and shall defend, indemnify, and hold harmless the county
from any liability, costs, or expenses arising from or related to the
imposition of these taxes.

(22) Notwithstanding the provisions of this chapter relating to
the obligations and liabilities of the authority, or any other law, a
transfer of control or ownership of the medical center begin delete and the
managed care plan end delete begin insert to the authority pursuant to this chapter end insert shall
confer onto the authority all the rights begin insert , privileges, end insert and begin delete duties end delete
begin insert authority end insert set forth in state law begin delete with respect end delete to begin insert end insert begin insert own, operate, and
provide coverage and services through end insert hospitals, clinics and other
health facilities, health programs, care organizations, physician
practice plans, delivery systems, begin delete and end delete health care service plans begin insert , and
other coverage mechanisms that may be end insert owned or operated by a
county.

(23) To engage in other activities that may be in the best interests
of the authority and the persons served by the authority, as
determined by the board of begin delete trustees, end delete begin insert governors, end insert in order to respond
to changes in the health care industry.

(b) The authority shall conform to the following requirements:

(1) (A) Be a government agency that is a local unit of
government separate and apart for all purposes from the county
and any other public entity, and shall not be considered to be an
agency, division, or department of the county or any other public
entity. The authority shall not be governed by or subject to the
civil service requirements of the county. Except as otherwise
provided for in the enabling ordinance consistent with this chapter,
and as set forth in Section begin delete 101853.1, end delete begin insert 101853.1 relating to the
personnel transition plan, end insert the authority shall not be governed by,
or subject to, other policies or operational rules of the county,
medical center, or any other public entity, including, but not limited
to, those relating to personnel and procurement.

(B) The board of begin delete trustees end delete begin insert governors end insert shall adopt written rules,
regulations, and procedures with regard to basic human resource
functions not inconsistent with begin delete employees’ end delete memoranda of
understanding begin insert covering employees represented by employee
organizations end insert or the provisions of this chapter. Until the time that
the board of begin delete trustees end delete begin insert governors end insert adopts its own rules, regulations,
or procedures with regard to these functions, the existing rules,
regulations, and procedures set forth in any memoranda of
understanding described in Section begin delete 101853.1 and the enabling
ordinance shall end delete begin insert 101853.1, and the rules and regulations adopted
by the county and described in paragraph (4), shall continue to end insert
apply.

(2) Be subject to state and federal taxation laws that are
applicable to public entities generally.

(3) Except as otherwise specifically provided in this chapter,
comply with the Meyers-Milias-Brown Act (Chapter 10
(commencing with Section 3500) of Division 4 of Title 1 of the
Government Code), the Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code), and the Ralph M. Brown Act begin delete (Chapter 10
(commencing with Section 3500) of Division 4 of Title 1 end delete begin insert (Chapter
9 (commencing with Section 54950) of Part 1 of Division 2 of Title
5 end insert of the Government Code).

(4) Be subject to the jurisdiction of the Public Employment
Relations Board. Until the authority adopts begin delete local end delete rules begin insert and
regulations end insert pursuant to subdivision (a) of Section 3507 of the
Government Code, the begin delete Public Employment Relations Board’s
regulations apply. end delete begin insert existing rules adopted by the county and
contained in the county’s employer-employee relations resolution,
as amended, shall apply, modified to account for the creation of
the authority, and provided further that the resolution shall not
contain any incorporation of the county’s civil service rules or
county ordinances unless specifically addressed in this chapter. end insert

(5) Carry professional and general liability insurance or
programs to the extent sufficient to cover its activities.

(6) Comply with the requirements of Sections 53260 and 53261
of the Government Code.

begin insert

(7) Maintain financial and accounting records.

end insert begin delete

(7)

end delete

begin insert (8) end insert  Meet all local, state, and federal data reporting requirements.

(c)  begin delete The end delete begin insert Subject to any restrictions applicable to public agencies,
and subject to any limitations or conditions set forth in the enabling
ordinance adopted by the board of supervisors, the end insert authority may
borrow begin insert money end insert from the county, repay debt begin delete and otherwise end delete begin insert it owes
to the county, and use the borrowed funds to end insert provide begin delete and arrange
for medical services. end delete begin insert for its operating and capital needs. end insert The
county may lend the authority funds or issue revenue anticipation
notes to obtain those funds necessary to begin delete operate the medical center
and managed care plan. end delete begin insert meet its operating or capital needs. end insert

(d) Open sessions of the authority shall constitute official
proceedings authorized by law within the meaning of Section 47
of the Civil Code. The privileges set forth in that section with
respect to official proceedings shall apply to open sessions of the
authority.

(e) (1) Notwithstanding any other law, the board of begin delete trustees end delete
begin insert governors end insert may order that a meeting held solely for the purpose of
discussion or taking action on authority trade secrets, as defined
in subdivision (d) of Section 3426.1 of the Civil Code, shall be
held in closed session. Trade secrets for purposes of this chapter
shall also include information for which the secrecy of the
information is necessary for the authority to initiate a new service,
program, marketing strategy, business plan, or technology, or to
add a benefit or product, and premature disclosure of the trade
secret would create a substantial probability of depriving the
authority of a substantial economic benefit or opportunity.

(2) The requirements of making a public report of actions taken
in closed session and the vote or abstention of every member
present may be limited to a brief general description devoid of the
information constituting the trade secret.

(3) Those records of the authority that reveal the authority’s
trade secrets are exempt from disclosure pursuant to the California
Public Records Act (Chapter 3.5 (commencing with Section 6250)
of Division 7 of Title 1 of the Government Code), or any similar
local law requiring the disclosure of public records. This exemption
shall apply for a period of two years after the service, program,
marketing strategy, business plan, technology, benefit, or product
that is the subject of the trade secret is formally adopted by the
governing body of the begin delete health end delete authority, provided that the service,
program, marketing strategy, business plan, technology, benefit,
or product continues to be a trade secret. The board of begin delete trustees end delete
begin insert governors end insert may delete the portion or portions containing trade
secrets from any documents that were finally approved in the closed
session that are provided to persons who have made the timely or
standing request.

(4) This begin delete section end delete begin insert chapter end insert shall not prevent the board of begin delete trustees end delete
begin insert governors end insert from meeting in closed session as otherwise provided
by law.

(f) Notwithstanding any other law, those records of the authority
and of the county that reveal the authority’s rates of payment for
health care services begin delete for the managed care plan, the rates of payment
for health care services end delete begin insert arranged or end insert provided by the begin delete medical center,
or the authority’s end delete begin insert authority or its end insert deliberative processes, begin insert strategies, end insert
discussions, communications, or any other portion of the
negotiations with providers of health care services or Medi-Cal,
health care plans or other payors for rates of payment, shall not be
required to be disclosed pursuant to the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code), or any similar local law
requiring the disclosure of public records. However, three years
after a contract or amendment to a contract is fully executed, the
portion of the contract or amendment containing the rates of
payment shall be open to inspection.

(g) The authority shall be a public agency that is a local unit of
government for purposes of eligibility with respect to grants and
other funding and loan guarantee programs. Contributions to the
authority shall be tax deductible to the extent permitted by state
and federal law. Nonproprietary income of the authority shall be
exempt from state income taxation.

(h) Unless otherwise provided by the board of supervisors by
way of resolution, the authority is empowered, or the board of
supervisors is empowered on behalf of the authority, to apply as
a public agency for one or more licenses for the provision of health
care or the operation of a health care begin delete services end delete begin insert service end insert plan pursuant
to statutes and regulations governing licensing as currently written
or subsequently amended.

(i) The statutory authority of a board of supervisors to prescribe
rules that authorize a county hospital to integrate its services with
those of other providers into a system of community service that
offers free choice of hospitals to those requiring hospital care, as
set forth in Section 14000.2 of the Welfare and Institutions Code,
shall apply to the authority and the board of begin delete trustees. end delete begin insert governors. end insert

(j) (1) Except as otherwise provided in this chapter, provisions
of the Evidence Code, the Government Code, including the Public
Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code), the Civil Code,
the Business and Professions Code, and other applicable law
pertaining to the confidentiality of peer review activities of peer
review bodies shall apply to the peer review activities of the
authority, or any peer review body, as defined in paragraph (1) of
subdivision (a) of Section 805 of the Business and Professions
Code, formed pursuant to the powers granted to the authority. The
laws pertaining to the confidentiality of peer review activities shall
be together construed as extending, to the extent permitted by law,
the maximum degree of protection of confidentiality.

(2) Notwithstanding Article 9 (commencing with Section 11120)
of Chapter 1 of Part 1 of Division 3 of Title 2 of, and Chapter 9
(commencing with Section 54950) of Part 1 of Division 2 of Title
5 of, the Government Code, or any other provision of law, any
peer review body formed pursuant to the powers granted to the
authority, may, at its discretion and without notice to the public,
meet in closed session, so long as the purpose of the meeting is
the peer review body’s discharge of its responsibility to evaluate
and improve the quality of care rendered by health facilities and
health practitioners. The peer review body and its members shall
receive, to the fullest extent, all immunities, privileges, and
protections available to those peer review bodies, their individual
members, and persons or entities assisting in the peer review
process, including those afforded by Section 1157 of the Evidence
Code and Section 1370. Peer review proceedings shall constitute
an official proceeding authorized by law within the meaning of
Section 47 of the Civil Code and those privileges set forth in that
section with respect to official proceedings shall apply to peer
review proceedings of the authority.

(3) Notwithstanding the California Public Records Act (Chapter
3.5 (commencing with Section 6250) of Division 7 of Title 1 of
the Government Code), or Article 9 (commencing with Section
11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of, and
Chapter 9 (commencing with Section 54950) of Part 1 of Division
2 of Title 5 of, the Government Code, or any other provision of
state or local law requiring disclosure of public records, those
records of a peer review body formed pursuant to the powers
granted to the authority, shall not be required to be disclosed. The
records and proceedings of the peer review body and its individual
members shall receive, to the fullest extent, all immunities,
privileges, and protections available to those records and
proceedings, including those afforded by Section 1157 of the
Evidence Code and Section 1370 of the Health and Safety Code.

(4) If the authority is required by law or contractual obligation
to submit to the state or federal government peer review
information or information relevant to the credentialing of a
participating provider, that submission shall not constitute a waiver
of confidentiality.

(5) Notwithstanding any other law, Section 1461 shall apply to
hearings on reports of hospital medical audit or quality assurance
committees.

(k) Except as expressly provided by other provisions of this
section, all exemptions and exclusions from disclosure as public
records pursuant to this chapter and the California Public Records
Act, including, but not limited to, those pertaining to trade secrets
and information withheld in the public interest, shall be fully
applicable begin insert to the authority, and end insert for the board of supervisors, and
all state and local agencies with respect to all writings that the
authority is required to prepare, produce, or submit, and which
shall not constitute a waiver of exemption from disclosure.

(l) The authority and the county, or any combination thereof
may engage in marketing, advertising, and promotion of the
medical and health care services made available to the community
by the authority.

(m) The board of begin delete trustees end delete begin insert governors end insert shall have authority over
procurement and contracts for the authority. The board of begin delete trustees end delete
begin insert governors end insert shall adopt written rules, regulations, and procedures
with regard to these functions. Contracts by and between the
authority and a public agency, and contracts by and between the
authority and providers of health care, goods, or services, may be
let on a nonbid basis and shall be exempt from Chapter 2
(commencing with Section 10290) of Part 2 of Division 2 of the
Public Contract Code.

(n) The authority may contract with the county for services and
personnel upon mutually agreeable terms.

(o) Notwithstanding Article 4.7 (commencing with Section
1125) of Chapter 1 of Division 4 of Title 1 of the Government
Code, related to incompatible activities, begin insert end insert begin insert Section 1099 of the
Government Code, related to incompatible offices, or any other
law, end insert a member of the authority’s administrative staff shall not be
considered to begin insert hold an incompatible office or to end insert be engaged in
activities inconsistent and incompatible with his or her duties as
a result of begin delete prior end delete begin insert his or her end insert employment or affiliation with the
county begin delete or Kern Health Systems. end delete begin insert or an agency of the county. end insert

(p) The board of begin delete trustees end delete begin insert governors end insert and the officers and
employees of the authority are public employees for purposes of
Division 3.6 (commencing with Section 810) of Title 1 of the
Government Code, relating to claims and actions against public
entities and public employees, and shall be protected by the
immunities applicable to public entities and public employees
governed by Part 2 (commencing with Section 814) of Division
3.6 of Title 1 of the Government Code, except as provided by other
statutes or regulations that apply expressly to the authority.

101855.1.  

(a) Transfer by the county to the authority of the
maintenance, operation, and management or ownership of the
medical center, whether or not the transfer includes the
surrendering by the county of the existing general acute care
hospital license and corresponding application for a change of
ownership of the license, shall not affect the eligibility of the
county to undertake, and shall authorize the authority, subject to
applicable requirements, to do any of the following:

(1) With the written consent of the county, participate in and
receive allocations pursuant to the California Health Care for
Indigents Program pursuant to Chapter 5 (commencing with
Section 16940) of Part 4.7 of Division 9 of the Welfare and
Institutions Code, or similar programs, as may be identified or
earmarked by the county for indigent health care services of the
type provided by the medical center.

(2) With the written consent of the county, participate in and
receive allocations of local revenue fund amounts provided
pursuant to Chapter 6 (commencing with Section 17600) of Part
5 of Division 9 of the Welfare and Institutions Code as may be
identified or earmarked by the county for indigent health care
services of the type provided by the medical center.

(3) Participate in the financing of begin insert , as applicable, end insert and receive,
Medicaid disproportionate share hospital payments available to a
county hospital or designated public hospital, or any other
successor or modified payment or funding that is intended to assist
hospitals that serve a disproportionate share of low-income patients
with special needs. The allocation of Medicaid disproportionate
share hospital payments shall be made in consultation with the
State Department of Health Care Services and other designated
safety net hospitals.

(4) Participate in the financing of begin insert , as applicable, end insert and receive,
Medi-Cal begin insert payments and end insert supplemental reimbursements, including,
but not limited to, payments made pursuant to Sections 14105.96,
14105.965, 14166.4, begin delete and 14182.15 end delete begin insert 14182.15, and 14199.2 end insert of the
Welfare and Institutions Code, payments described in paragraph
(4) of subdivision (b) of Section 14301.4 of, and Section 14301.5
of, the Welfare and Institutions Code, and payments made available
to a county provider or designated public hospital, or governmental
entity with which it is affiliated, under any other successor or
modified Medicaid payment system.

(5) Participate in the financing of, begin insert as applicable, end insert and receive,
safety net care pool funding, stabilization funding, delivery system
reform incentive pool payments, and any other funding available
to a county provider or designated public hospital, or governmental
entities with which it is affiliated under the Medicaid demonstration
project authorized pursuant to Article 5.2 (commencing with
Section 14166) and Article 5.4 (commencing with Section 14180)
of Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, or under any other successor or modified Medicaid
demonstration project or Medicaid payment system. The allocation
of safety net care pool funds shall be made in consultation with
the State Department of Health Care Services and other designated
safety net hospitals.

(6) Participate in the financing, administration, and provision
of services under the Low Income Health Program authorized
pursuant to Part 3.6 (commencing with Section 15909) of Division
9 of the Welfare and Institutions Code, or under any other successor
or modified Medicaid demonstration project or Medicaid payment
system if the authority enters into an agreement with the county
concerning the provision of services by, and payment for these
services to, the county.

(7) Participate in and receive direct grant and payment
allocations pursuant to Article 5.230 (commencing with Section
14169.50) of Chapter 7 of Part 3 of Division 9 of the Welfare and
Institutions Code, or under any other successor or modified direct
grant and payment systems funded by hospital or other provider
fee assessments.

(8) Receive Medi-Cal capital supplements pursuant to Section
14085.5 of the Welfare and Institutions begin delete Code. end delete begin insert Code, or any other
successor or modified Medi-Cal debt service reimbursement
program. end insert Notwithstanding any other law, supplemental payments
shall be made to the medical center under begin delete Section 14085.5 of the
Welfare and Institutions Code end delete begin insert those programs end insert for the debt service
costs incurred by the county, and, if applicable, by the authority
to the extent that debt service responsibility is refinanced,
transferred to, or otherwise assumed by, directly or indirectly, the
authority.

(9) Receive any other funds begin insert , end insert begin insert or preference in the assignment of
health care plan enrollees, end insert that would otherwise be available to a
county begin insert health plan, end insert provider begin insert , end insert or designated public hospital, or
governmental entity with which it is affiliated.

(b)  begin delete A transfer described in subdivision (a) end delete begin insert The transfer of the
medical center end insert begin insert to the authority pursuant to this chapter end insert shall not
otherwise disqualify the county or the begin delete board of trustees, or in the
case of a change in license ownership, the authority, end delete begin insert authority end insert
from participating in any of the following:

(1) Local, state, and federal funding sources either specific to
county or other publicly owned or operated health care service
plans, hospitals, or other health care providers including, but not
limited to, ambulatory care clinics, health systems, practices,
designated public hospitals, or government entities with which
they are affiliated, for which there are special provisions specific
to those begin insert plans, end insert hospitals, ambulatory care clinics, health systems,
practices, other health care providers or government entities with
which they are affiliated.

(2)  begin delete Funding end delete begin insert All funding end insert programs in which the county, by itself
or on behalf of the medical begin delete center, or in which Kern Health
Systems end delete begin insert center end insert had participated prior to the creation of the
authority, or would otherwise be qualified to participate in had the
authority not been created, and the maintenance, operation, and
management or ownership of the medical center begin delete or managed care
plan end delete not been transferred to the authority pursuant to this chapter.

 

Article 5.  begin delete Termination end delete begin insert Dissolution end insert of the Authority

 

101856.  

begin insert (a) end insert begin insert   end insert The board of supervisors may find and declare
that the authority shall cease to exist. In that event, the board of
supervisors shall provide for the disposition of the authority’s
assets, obligations, and begin delete liabilities. end delete begin insert liabilities, which may include
the transfer to the county of the medical center and other
operations, or specified components of the medical center and
other operations, through ordinance, resolution, or other action.
Alternatively, the board of supervisors may order the board of
governors to develop a plan of dissolution providing for the
disposition of all of the assets and liabilities of the authority, which
shall be subject to approval by the board of supervisors. end insert Absent
written agreement, the county shall not be obligated under any law
to assume the authority’s obligations or liabilities, or take title to,
or custody or control of the authority’s assets. begin delete Upon notification
by the authority of the end delete

begin insert (b) end insert begin insert   end insert begin insert Upon the end insert disposition of the begin delete authority’s assets and liabilities, end delete
begin insert liabilities of the authority and distribution of any remaining assets,
as applicable, end insert the board of supervisors shall rescind the ordinance
that established the authority, and the authority shall cease to begin delete exist
on the date set forth in the rescinding ordinance. end delete begin insert exist. end insert The board
of supervisors shall notify the State Department of Health Care
Services 30 days prior to the effective date of the begin delete termination. The
notice may also include a statement of the board of supervisors’
intent to have end delete begin insert dissolution, and include in the notice whether the
county intends for either or both, or specified components of, end insert the
medical center begin delete and the managed care plan end delete begin insert or other operations to
be end insert transferred to the county upon the effective date of begin delete termination end delete
begin insert dissolution end insert of the authority.

begin delete

101856.1.  

In the event that the authority votes to file a petition
of bankruptcy, or the board of supervisors notifies the State
Department of Health Care Services of its intent to terminate the
authority, the provisions set forth in paragraphs (5) and (6) of
subdivision (t) of Section 14087.38 of the Welfare and Institutions
Code shall apply unless the board of supervisors has notified the
State Department of Health Care Services of its intent to have the
medical center and the managed care plan transferred to the county.

end delete

begin delete SEC. 2. end delete
begin insert SEC. 4. end insert   

The Legislature finds and declares that Section begin delete 1 end delete begin insert 3 end insert of
this act, which adds Chapter 5.5 (commencing with Section
101852) to Part 4 of Division 101 of the Health and Safety Code,
imposes a limitation on the public’s right of access to the meetings
of public bodies or the writings of public officials and agencies
within the meaning of Section 3 of Article I of the California
Constitution. Pursuant to that constitutional provision, the
Legislature makes the following findings to demonstrate the interest
protected by this limitation and the need for protecting that interest:

In order to enable the Kern County begin delete Health System end delete begin insert Hospital end insert
Authority to successfully operate begin delete both the Kern Medical Center
and managed care plan as an integrated end delete begin insert a end insert delivery system that
increases access to health care in the community and proactively
improves the quality of patient care services and patient experience,
it is imperative that the authority’s discussions, deliberative
processes, writings, and other communications pertaining to trade
secrets or other strategic planning actions, its rates of payments
for providing or arranging for health care services, and its peer
review functions by which it discharges its responsibility to
evaluate and improve the quality of care be protected as
confidential information.

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CORRECTIONS:

Text--Pages 8, 10, and 16.

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