Amended in Senate August 11, 2014

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 amend Section 31468 of, and to add Section 31552.5 to, the Government Code, and to 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 Hospital Authority to manage, administer, and control the Kern Medical Center and for the operation of additional programs, clinics and other facilities, care organizations, begin delete physical end delete begin insert physician end insert 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 to negotiate and enter into contracts to provide or arrange, or provide directly, on a fee-for-service, capitated, or other basis, 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 begin delete county and Kern Health Systems, end delete begin insert county, end insert 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 governors, and would require the board of supervisors, in the enabling ordinance, to specify, among other things, the number of members and composition of membership of the board of governors 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 liabilities, as specified.

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.

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.

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.

begin insert

This bill would incorporate additional changes to Section 31468 of the Government Code proposed by SB 673 that would become operative if this bill and SB 673 are both enacted and this bill is enacted last.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 31468 of the Government Code is
amended to read:

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.

(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.

begin insert

begin insert SEC. 1.5. 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

(3) “District” also includes the retirement system established
under this chapter in Contra Costa County.

end insert 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

SEC. 2.  

Section 31552.5 is added to the Government Code, to
read:

31552.5.  

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.

SEC. 3.  

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 Hospital Authority Act

 

Article 1.  General Provisions

 

101852.  

(a) This chapter shall be known and may be cited as
the Kern County Hospital 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.

(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.

(3) The ongoing evolution of the health care environment
requires public entities providing or arranging health care services
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) The board of supervisors of the County of Kern has
determined that providing access to affordable, high-quality health
care services, and ensuring the full engagement and viability of
the health care safety net in the county are essential for improving
the health status of the people of the County of Kern. To further
this imperative, it is necessary that 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-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 begin delete plan provider end delete
begin insert plan-provider end insert alignment, and maximizes opportunities for
employees and enhancement of staff morale.

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

101852.1.  

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

(a) “Authority” means the Kern Hospital System Authority
established pursuant to this chapter.

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

(c) “Board of governors” means the governing body of the
authority.

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

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

(f) “Medical center” means the assets and liabilities comprising
the Kern Medical Center, including, without limitation, a licensed
acute care hospital and related public health care programs,
facilities, care organizations, physician practice plans and delivery
systems, which may be hospital-based or nonhospital-based, 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.

 

Article 2.  Establishment of the Kern County Hospital Authority

 

101853.  

(a) Pursuant to this chapter, the board of supervisors
may establish by ordinance the Kern County Hospital 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 as needed to operate the medical center
and maintain its status 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,
clinics and other facilities, care organizations, health care service
and 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 to negotiate and enter into contracts
to provide or arrange, or provide directly, on a fee-for-service,
capitated, or other basis, 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 have and be charged with authority for the management,
administration, and control of the medical center and other
health-related resources. The State Department of Health Care
Services shall take all necessary steps to ensure all of the following:

(1) The authority is permitted to operate the medical center.

(2) The medical center continues its status as a designated public
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.

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

(d) The board of supervisors, in the enabling ordinance, shall
establish the terms and conditions of the transfer to the authority
from the county, including, but not limited to, all of the following:

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

(2) Transfer of employees, including any necessary personnel
transition plan, as specified in Section 101853.1, begin delete and assignment
of title to end delete begin insert allocation of credit for end insert funded pension assets and
responsibility for any unfunded pension begin delete liabilities. end delete begin insert liabilities under
the Kern County Employees’ Retirement Association or other
retirement plans, and funding of the accrued benefits of employees
of the authority in the event of withdrawal from the plan or
dissolution of the authority. Any allocation of credit for funded
pension assets and responsibility for any unfunded pension
liabilities with respect to the Kern County Employees’ Retirement
Association must be approved by its governing board of retirement
after consideration of legal and actuarial analysis, and no such
allocation may be made that would jeopardize the qualified status
of the Kern County Employees’ Retirement Association under the
federal Internal Revenue Code. end insert

(3) Maintenance, operation, and management or ownership of
the medical center.

(4) Transfer of licenses.

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

(e) (1) Notwithstanding any other law, a transfer of
maintenance, operation, and management or ownership or lease
of the medical center to the authority may be made, with or without
the payment of a purchase price by the authority, 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,
or ownership or lease of the medical center to the authority shall
not be construed as empowering the authority to transfer any
ownership interest of the county in any portion of 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 person or entity without the prior written approval of
the board of supervisors. 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.

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

(A) Comply with any applicable requirements of 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 facilities, as specifically provided for in
the enabling ordinance or other lawful agreements entered into by
the board of supervisors. Any lease agreement between the county
and the authority shall 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 of the medical center, or any ownership or leasehold
interest of the authority in the medical center, does not relieve the
county of the ultimate responsibility for indigent care pursuant to
Section 17000 of the Welfare and Institutions Code.

(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.

(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.

(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.

(j) 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.

begin insert

(k) Any determination with respect to the manner in which the
authority qualifies as a governmental plan sponsor under Section
414(d) of the Internal Revenue Code shall be limited to relevant
employee benefits purposes of that code only, and shall not change
or otherwise modify the authority’s status as a public agency that
is a unit of local government for other purposes specified in this
chapter.

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 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 and exercise
reinstatement rights, if applicable, to funded, equivalent, vacant
county positions for which they are qualified and eligible. An
employee who first elects to remain with the county may
subsequently seek reinstatement with the authority within 30 days
of the election to remain with the county and shall be subject to
the requirements of this article.

(3) Acknowledgment that the authority, to the extent permitted
by federal and state law, shall be bound by the terms of the
memoranda of understanding executed between the county and its
exclusive employee representatives that are in effect on the date
the county adopts the enabling ordinance pursuant to this chapter.
Subsequent memoranda of understanding with exclusive employee
representatives shall be subject to approval only by the board of
governors.

begin insert

(4) Communication to the Board of Retirement of the Kern
County Employees’ Retirement Association or other retirement
plan of any personnel transition plan, memoranda of
understanding, or other arrangements that are related to the
participation of the authority’s employees or the addition of new
employees in the retirement plan.

end insert

(b) Implementation of this chapter shall not be a cause for the
modification of the medical center or county employment benefits.
Upon the execution of the enabling ordinance, employees of the
medical center or county on the date of execution, who become
authority employees, shall retain their existing or equivalent
classifications and job descriptions upon transfer to the authority,
comparable pension begin delete benefits, end delete begin insert benefits (if permissible pursuant to
relevant plan terms), end insert and 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. 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, 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).

(c) Subject to applicable state law, the authority shall recognize
the exclusive employee representatives of those authority
employees who are transferred from the county or medical center
to the authority pursuant to this chapter.

(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 employee
representative of each bargaining unit.

(2) Continue to provide the same level of employee benefits to
authority employees, whether the obligation to provide those
benefits arise out of a memorandum of understanding, or other
agreements or law.

(3) Extend and continue to be bound by any existing memoranda
of understanding covering the terms and conditions of employment
for employees of the authority, including the level of wages and
benefits, 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,
unless modified by mutual agreement with each of the exclusive
employee representatives. The authority shall continue to provide
those pension benefits specified in any memoranda of agreement
as long as doing so does not conflict with any Kern County
Employee Retirement Association begin delete bylaws, end delete begin insert plan provisions, end insert or
federal or state law including 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 begin delete Code). end delete begin insert Code and the
federal Internal Revenue Code). end 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.

(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.

(e) Permanent employees of the medical center or county on
the effective date of the transfer of the medical center to the
authority, shall be deemed qualified for employment 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 the transfer, as
set forth in this paragraph, shall retain their probationary status
and rights and shall not be required to serve a new probationary
or extend their probationary period by reason of the transfer. To
the extent possible, employees who transfer to equivalent positions
at the authority shall retain their existing classifications and job
descriptions, but if there is a dispute over this issue, the authority
agrees to meet and confer with the exclusive employee
representatives of the transferred employees.

(f) Employees who transfer from the medical center or county
to the authority shall retain the seniority they earned at the medical
center or county and any benefits or privileges based on the
seniority.

(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 begin delete Code),
as follows: end delete begin insert Code) as set forth below. However, the authority and
employees of the authority, or certain designated parts thereof,
shall not participate in the Kern County Employees’ Retirement
Association if the board of retirement, in its sole discretion,
determines that their participation could jeopardize the Kern
County Employees’ Retirement Association’s tax-qualified or
governmental plan status under federal law, or if a contract or
related contract amendment proposed by the authority contains
any benefit provisions that are not specifically authorized by
Chapters 3 (commencing with Section 31450) and 3.9 (commencing
with Section 31899) of Part 3 of Division 4 of Title 3 of the
Government Code or Article 4 (commencing with Section 7522)
of Chapter 21 of Division 7 of Title 1 of the Government Code,
and that the board determines would adversely affect the
administration of the system. There shall not be any individual
employee elections regarding participation in the Kern County
Employees’ Retirement Association or other retirement plans
except to the extent such retirement plans provide for elective
employee salary deferral contributions in accordance with federal
Internal Revenue Code rules. end 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.

(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.

(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.

(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.

(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.

(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, begin delete 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 delete begin insert to which the member was subject immediately
prior to the transfer. end 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. begin insert Notwithstanding any other law, the
authority and employees of the authority shall not participate in
the Public Employees’ Retirement System if the Board of
Administration of the Public Employees’ Retirement System, in its
sole discretion, determines that their participation could jeopardize
the Public Employees’ Retirement System’s tax-qualified or
governmental plan status under federal law, or if a contract or
related contract amendment proposed by the authority contains
any benefit provisions that are not specifically authorized by Part
3 (commencing with Section 20000) of Division 5 of Title 2 of the
Government Code, and that the board determines would adversely
affect the administration of the system. end insert

(i) Provided that this is not inconsistent with anything in this
chapter, this chapter 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 Governors

 

101854.  

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

(b) The board of supervisors, either during or after the formation
of the authority, may modify the number, length of terms,
qualifications, method of appointment, and provisions for all other
matters pertaining to the board of governors 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
governors, 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
governors 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 contract is between the authority and the county or an
agency of the county, and the member is also a member of the
board of supervisors, or is a county officer or employee appointed
to represent the interests of the county.

(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
begin delete health end delete begin insert hospital end insert 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 governors 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 governors 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 governors 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
governors 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 begin insert , subject to Article 5
(commencing with Section 101856) end insert .

(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, or any successor or
modified Medi-Cal debt service reimbursement program, the
payment of interest on notes and bonds of the authority, the
establishment of reserves to secure those 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 in this section shall preclude the authority from
repayment of its debts or other liabilities, using funds that are not
otherwise encumbered.

(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, including, but not limited to,
contracting with any public or private entity or person for
management or other services and personnel, 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 begin delete provision of end delete 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, begin delete for profit, end delete begin insert for-profit, end insert 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
its operations, including, without limitation the administration of
its facilities.

(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 those 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 to the
authority pursuant to this chapter shall confer onto the authority
all the rights, privileges, and authority set forth in state law to own,
operate, and provide coverage and services through hospitals,
clinics and other health facilities, health programs, care
organizations, physician practice plans, delivery systems, health
care service plans, and other coverage mechanisms that may be
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 governors, 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 101853.1 relating to the personnel
transition plan, 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 governors shall adopt written rules, regulations,
and procedures with regard to basic human resource functions not
inconsistent with memoranda of understanding covering employees
represented by employee organizations or the provisions of this
chapter. Until the time that the board of governors 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 101853.1, and
the rules and regulations adopted by the county and described in
paragraph (4), shall continue to 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 (Chapter 9
(commencing with Section 54950) of Part 1 of Division 2 of Title
5 of the Government Code).

(4) Be subject to the jurisdiction of the Public Employment
Relations Board. Until the authority adopts rules and regulations
pursuant to subdivision (a) of Section 3507 of the Government
Code, the 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.

(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.

(7) Maintain financial and accounting records.

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

(c) 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 authority may
borrow money from the county, repay debt it owes to the county,
and use the borrowed funds to provide for its operating and capital
needs. The county may lend the authority funds or issue revenue
anticipation notes to obtain those funds necessary to meet its
operating or capital needs.

(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 governors
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, begin insert or to consider and take
action on matters pertaining to contracts and contract negotiations
concerning all matters related to rates of payment for health care
services arranged or provided by the authority, end insert 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 begin insert end insert begin insert or concerning the matters
related to rates of payment end insert .

(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 authority, provided that the service, program,
marketing strategy, business plan, technology, benefit, or product
continues to be a trade secret. The board of governors 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 chapter shall not prevent the board of governors 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 arranged or provided by the authority or its
deliberative processes, strategies, discussions, communications,
or any other portion of the negotiations with providers of health
care services or Medi-Cal, health care begin delete plans end delete begin insert plans, end insert or other begin delete payors end delete
begin insert payers end insert 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 service 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 governors.

(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 to the authority, and 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 begin delete thereof end delete
begin insert thereof, end insert 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 governors shall have authority over
procurement and contracts for the authority. The board of governors
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, Section 1099 of the
Government Code, related to incompatible offices, or any other
law, a member of the authority’s administrative staff shall not be
considered to hold an incompatible office or to be engaged in
activities inconsistent and incompatible with his or her duties as
a result of his or her employment or affiliation with the county or
an agency of the county.

(p) The board of governors 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, as applicable, 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, as applicable, and receive,
Medi-Cal payments and supplemental reimbursements, including,
but not limited to, payments made pursuant to Sections 14105.96,
14105.965, 14166.4, 14182.15, and 14199.2 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, as applicable, 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 Code, or any other
successor or modified Medi-Cal debt service reimbursement
program. Notwithstanding any other law, supplemental payments
shall be made to the medical center under those programs 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, or preference in the assignment of
health care plan enrollees, that would otherwise be available to a
county health plan, provider, or designated public hospital, or
governmental entity with which it is affiliated.

(b) The transfer of the medical center to the authority pursuant
to this chapter shall not otherwise disqualify the county or the
authority 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 begin delete providers end delete begin insert providers, end insert including,
but not limited to, ambulatory care clinics, health systems,
practices, designated public hospitals, or begin delete government end delete begin insert governmental end insert
entities with which they are affiliated, for which there are special
provisions specific to those plans, hospitals, ambulatory care
clinics, health systems, practices, other health care providers or
begin delete government end delete begin insert governmental end insert entities with which they are affiliated.

(2) All funding programs in which the county, by itself or on
behalf of the medical center 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 not been
transferred to the authority pursuant to this chapter.

 

Article 5.  Dissolution of the Authority

 

101856.  

(a) 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 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. 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 begin delete of end delete begin insert of, end insert the authority’s assets.

(b) Upon the disposition of the liabilities of the authority and
distribution of any remaining assets, as applicable, the board of
supervisors shall rescind the ordinance that established the
authority, and the authority shall cease to exist. The board of
supervisors shall notify the State Department of Health Care
Services 30 days prior to the effective date of the dissolution, and
include in the notice whether the county intends for either or both,
or specified components of, the medical center or other operations
to be transferred to the county upon the effective date of dissolution
of the authority.

SEC. 4.  

The Legislature finds and declares that Section 3 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 Hospital Authority to
successfully operate a 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.

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

Section 1.5 of this bill incorporates amendments to
Section 31468 of the Government Code proposed by both this bill
and Senate Bill 673. It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2015,
(2) each bill amends Section 31468 of the Government Code, and
(3) this bill is enacted after Senate Bill 673, in which case Section
1 of this bill shall not become operative.

end insert