BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1463
                                                                  Page  1

          Date of Hearing:   July 2, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

              SB 1463 (Governance & Finance Committee) - As Introduced:   
                                   March 13, 2014

          Policy Committee:                              Banking &  
          FinanceVote: 12-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill makes several technical changes to the California  
          Health Facilities Financing Authority Act, in particular  
          clarifying that the Authority has the ability to issue private  
          placement debt.

           FISCAL EFFECT  

          Negligible fiscal impact to the Treasurer; potential minor  
          savings to the Attorney General's Office from reduced time spent  
          reviewing and documenting private placement issues.

           COMMENTS  

          1)  Purpose.   According to the sponsor, the State Treasurer, the  
            Attorney General's Office identified several minor technical  
            changes needed to clarify that the California Health  
            Facilities Financing Authority is authorized to issue private  
            placement debt.

            "Private placement" debt is debt that has been issued through  
            an offering other than a public offering, and typically  
            involves larger individual allocations or placements with a  
            small number of investors.  The sponsor contends it had always  
            been the intent to allow the Authority to issue private  
            placement debt, and the changes in this bill fulfill that  
            intent.

          2)  California Health Facilities Financing Authority.   The  
            Authority was created in 1979 to be the state's vehicle for  








                                                                  SB 1463
                                                                  Page  2

            providing financial assistance to public and non-profit health  
            care providers through loans funded by the issuance of  
            tax-exempt bonds.  The Authority has issued approximately  
            $30.7 billion in revenue bonds, including $1.5 billion in  
            2013, in order to finance a wide range of health facilities,  
            from rural community facilities to large multi-hospital  
            systems.  The largest users of the program include Sutter  
            Health, Kaiser Permanente, and Catholic Healthcare West.


           Analysis Prepared by  :    Joel Tashjian / APPR. / (916) 319-2081