Amended in Assembly September 3, 2013

Amended in Assembly August 7, 2013

Amended in Assembly August 5, 2013

Amended in Senate April 1, 2013

Senate Bill No. 615

Introduced by Senator Galgiani

February 22, 2013

An act to begin delete amend Section 15438.7 of the Government Code, and to end delete add Section 1720.7 to the Labor Code, relating to public begin delete works, and making an appropriation therefor end delete begin insert works end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 615, as amended, Galgiani. Public works: prevailing begin delete wages: California Health Facilities Financing Authority Act. end delete begin insert wages end insert begin insert . end insert

Existing law defines “public works,” for purposes of regulating public works contracts, as, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for, in whole or in part, out of public funds. Existing law further requires that, except as specified, not less than the general prevailing rate of per diem wages be paid to workers employed on public works and imposes misdemeanor penalties for a violation of this requirement.

This bill would expand the definition of “public works,” for the purposes of provisions relating to the prevailing rate of per diem wages, to also include any construction, alteration, demolition, installation, or repair work done under private contract on a hospital or health care facility project when the project is paid for in whole or in part with the proceeds of conduit revenue bonds, as defined, that were issued on or after January 1, 2014.

Because the violation of prevailing wage requirements when engaged in these public works projects would result in the imposition of misdemeanor penalties, this bill would impose a state-mandated local program.

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The California Health Facilities Financing Authority Act authorizes the California Health Facilities Financing Authority (authority) to make loans from the continuously appropriated California Health Facilities Financing Authority Fund to participating health institutions for financing or refinancing the acquisition, construction, or remodeling of health facilities. Existing law authorizes the authority to award grants, which are funded by the California Health Facilities Financing Authority Fund, to any eligible health facility for purposes of financing projects.

end delete begin delete

This bill would authorize the authority to award grants to nonpublic offices providing health care services that are operated by either a medical group, independent practice association, physician office, or clinic with more than 10 physicians that has a Medi-Cal or medically indigent encounter rate of at least 50% of total patients served in a calendar year, or by a medical practice of 10 or fewer physicians in which at least 30% of patients served in a calendar year are enrolled in Medi-Cal.

end delete begin delete

Because the bill would authorize the expenditure of continuously appropriated funds for new purposes, the bill would make an appropriation.

end delete

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

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

begin delete

SECTION 1.  

Section 15438.7 of the Government Code is
amended to read:

15438.7.  

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

(1) There are small health care facilities throughout the state
that are in critical need of capital improvements to continue to
provide quality health care services.

(2) Some of these facilities currently lack the ability to take on
debt and have little access to capital.

(3) This lack of access to capital threatens the quality and
accessibility of the services provided by health care facilities and
hampers their ability to gain the financial strength to better access
the capital markets.

(4) The state’s health care system is reliant upon those health
care facilities that treat low-income, uninsured, or vulnerable
populations, such as the developmentally disabled, the elderly, the
mentally ill, emotionally disturbed children, and the chemically
dependent.

(5) The grant program provided in this section is in the public
interest, serves a public purpose, and will promote the health,
welfare, and safety of the citizens of the state.

(b) (1) The authority may award grants to any eligible health
facility, as defined in subdivision (d) of Section 15432 for purposes
of financing projects, as defined in subdivision (f) of Section
15432.

(2) For purposes of paragraph (1), an “eligible health facility”
also includes a nonpublic office providing health care services that
is operated by either of the following:

(A) A medical group, independent practice association,
physician office, or clinic with more than 10 physicians that has
a Medi-Cal or medically indigent encounter rate of at least 50
percent of total patients served in a calendar year, based on claims
or encounter data.

(B) A medical practice of 10 or fewer physicians in which at
least 30 percent of patients served in a calendar year are enrolled
in Medi-Cal.

(c) The authority shall develop selection criteria and a process
for awarding grants under this section. When developing the
selection criteria for the awarding of grants under this section, the
authority shall take into consideration all of the following factors:

(1) The need for the grant based on the applicant’s total net
assets.

(2) Whether the grant will leverage additional dollars to
complete the project.

(3) The importance and level of services to vulnerable
populations that will be generated.

(4) The level of access to capital by the applicant.

(5) Demonstration by the applicant of project readiness and
feasibility.

(6) Total dollars available for purposes of this section.

(d) It is the intent of the Legislature to assist those small health
facilities that have demonstrated superior management but little
to no access to capital and whose services are threatened by a
critical need for capital improvements.

(e) In no event shall a grant to finance a project exceed the total
cost of the project, as determined by the health facility and
approved by the authority. Grants shall be awarded only to facilities
that have certified to the authority that all requirements established
by the authority for grantees have been met.

(f) All projects that are awarded grants shall be completed within
a reasonable period of time, to be determined by the authority. No
funds shall be released by the authority until the applicant
demonstrates project readiness to the authority’s satisfaction. If
the authority determines that the health facility has failed to
complete the project under the terms specified in awarding the
grant, the authority may require remedies, including the return of
all or a portion of the grant. Certification of project completion
shall be submitted to the authority by any health facility receiving
a grant under this section.

(g) Subject to subdivision (h), grants to be awarded under this
section shall be financed by funds from the California Health
Facilities Authority Fund.

(h) Grants shall only be available pursuant to this section if the
authority determines that it has sufficient moneys available in the
California Health Facilities Authority Fund. Nothing in this section
shall require the authority to award grants if the authority
determines that it has insufficient moneys available in the
California Health Facilities Authority Fund to award grants.

(i) The authority may annually determine the amount available
for purposes of this section.

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begin delete SEC. 2. end delete
begin insert SECTION 1. end insert   

Section 1720.7 is added to the Labor Code, to
read:

1720.7.  

For the limited purposes of Article 2 (commencing
with Section 1770) of this chapter, “public work” also means any
construction, alteration, demolition, installation, or repair work
done under private contract on a hospital or health care facility
project when the project is paid for in whole or in part with the
proceeds of conduit revenue bonds, as defined in Section 5870 of
the Government Code, issued on or after January 1, 2014, by a
public agency.

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.