Amended in Senate June 16, 2015

Amended in Assembly April 28, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1350

Introduced by Assembly Member Salas

February 27, 2015

An act to amend Sections 101852, 101852.1, 101853, 101853.1, 101855, begin delete and end delete 101855.1 begin insert , and 101856 end insert of the Health and Safety Code, relating to hospital authorities.

LEGISLATIVE COUNSEL’S DIGEST

AB 1350, as amended, Salas. Kern County Hospital Authority.

The Kern County Hospital Authority Act authorizes the board of supervisors of the County of Kern to, among other things, 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, physician practice plans, and delivery systems that may be affiliated or consolidated with the medical center. Existing law requires the board of supervisors to adopt, and the authority to implement, a personnel transition plan that requires specified actions, including acknowledgment that the authority, to the extent permitted by federal and state law, is required to 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. Existing law subjects the authority to other employment and retirement provisions.

This bill would revise and recast those provisions to make technical changes to provisions relating to the transfer of control of the medical center by the county to the Kern County Hospital Authority, as specified. The bill would clarify that the authority is empowered with the maintenance, operation, management, control, ownership, or lease of the medical center, as provided by the enabling ordinance, as specified. The bill would make changes to the personnel transition plan to instead provide that the memoranda of understanding that apply to the authority are those in effect on the date of the transfer of control of the medical center to the authority, as specified, and if the memoranda of understanding has expired, that the most recent memoranda is binding unless modified by mutual agreement with each of the exclusive employee representatives. The bill would make other changes to related provisions to further reflect that certain actions be taken on the date of the transfer of control of the medical center to the authority, rather than the date the county adopts the enabling ordinance. The bill would make other changes to provisions related to, among others, retirement provisions, debt instruments, and contract provisions. The bill would authorize the board of supervisors to contract on behalf of the authority.

begin insert

Existing law provides that certain employees of the authority may participate in the Kern County Employees’ Retirement Association, as specified.

end insert begin insert

The bill would require new obligations between the county and the authority regarding employer contributions to employee retirement plans.

end insert begin insert

The bill would provide that legacy employees, as defined, would be deemed county employees only for purposes of participation in a benefit plan administered by the Kern County Employees’ Retirement Association. The county would assume primary financial responsibility, and the authority would assume supplemental financial responsibility, for employer contributions that fund benefits for legacy employees, upon the transfer of control of the medical center to the authority.

end insert begin insert

The bill would provide that the authority would assume primary financial responsibility, and the county would assume supplemental financial responsibility, for employer contributions that fund benefits for new employees, as defined. However, if the authority fails to make required contributions for new employees, the county would be required to make employer contributions upon notice and demand from the Kern County Employees’ Retirement Association, as specified

end insert

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

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

SECTION 1.  

Section 101852 of the Health and Safety Code
is amended to read:

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)  A county is authorized under existing law to integrate its
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 plan-provider
alignment, and maximizes opportunities for employees and
enhancement of staff morale.

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

SEC. 2.  

Section 101852.1 of the Health and Safety Code is
amended to read:

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.

begin insert

(f) “Legacy employees” means employees of the county who
retired from the medical center prior to the date of transfer of
control of the medical center, employees of the county who are
initially transferred to the authority on the date of transfer of
control of the medical center, and employees first hired by or
retired from the authority during the 24-month period following
the date of transfer of control of the medical center.

end insert begin delete

(f)

end delete

begin insert (g) end insert  “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.

begin insert

(h) “New employees” means employees first hired by the
authority after the 24-month period following the date of transfer
of control of the medical center.

end insert begin delete

(g)

end delete

begin insert (i) end insert  “Transfer of control of the medical center” means the transfer
by the county to the authority of the maintenance, operation,
management, and personnel of the medical center, whether by
lease, transfer of ownership, or other means, as provided by, and
subject to, any conditions and limitations specified by the board
of supervisors in the enabling ordinance.

SEC. 3.  

Section 101853 of the Health and Safety Code is
amended to read:

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 maintenance,
operation, management, control, ownership, or lease of the medical
center and other health-related resources, as provided by the
enabling ordinance. The State Department of Health Care Services
shall take all necessary steps to ensure all of the following:

(1) The authority has all of the licenses, permits, and approvals
needed 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, assets, 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, allocation of
credit for funded pension assets and responsibility for any unfunded
pension liabilities under the Kern County Employees’ Retirement
Association begin insert , as specified in paragraph (7) of subdivision (g) of
Section 101853.1, end insert 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.

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

(4) Transfer of licenses.

(5) Whether funds of the authority shall be deposited in the
custody of, and paid out solely through, the county treasurer’s
office.

(6) Any other matters as the board of supervisors deems
necessary, appropriate, or convenient for the conduct of the
authority’s activities.

(e) (1) Notwithstanding any other law, a transfer of control 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 control 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,
management, control, 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 its maintenance, operation, management,
control, 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,
management, or control 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 begin delete supervisors, end delete begin insert supervisors or as otherwise provided by this
chapter, end insert 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.

(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 local unit of government for other purposes specified in this
chapter.

SEC. 4.  

Section 101853.1 of the Health and Safety Code is
amended to read:

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, and consistent with paragraph (3) of
subdivision (d), shall be bound by the terms of those memoranda
of understanding executed between the county and its exclusive
employee representatives that are in effect on the date of the
transfer of control of the medical center to the authority.
Subsequent memoranda of understanding with exclusive employee
representatives shall be subject to approval only by the board of
governors.

(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.

(b) Implementation of this chapter shall not be a cause for the
modification of the medical center or county employment benefits.
Employees of the medical center or county on the date of transfer,
who become authority employees, shall retain their existing or
equivalent classifications and job descriptions upon transfer to the
authority, comparable pension benefits (if permissible pursuant to
relevant plan terms), 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 control 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 plan provisions, 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 Code and the federal Internal
Revenue Code). If a memoranda of understanding is expired on
the date of the transfer of control of the medical center, then the
authority shall continue to be bound by the terms and conditions
of the most recent memoranda of understanding, unless modified
by a mutual agreement with each of the exclusive employee
representatives, and the benefits and wages of transferred
employees shall be retained consistent with subdivision (b).

(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 of the transfer of control
of the medical center 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 control 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
begin insert period end insert 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 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.

(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 transfer of control of the medical center 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) (A) 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 or a member 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, immediately after the transfer, to the same defined
benefit formula, as defined in Section 7522.04 of the Government
Code, and plan of replacement benefits offered by the county
pursuant to Section 31899.4 of the Government Code and the Kern
County Replacement Benefits Plan for retirement benefits limited
by Section 415 of Title 26 of the United States Code.

(B) For purposes of subdivision (c) of Section 7522.43 of the
Government Code, the authority shall be treated as a public
employer that offered a plan of replacement benefits prior to
January 1, 2013. The county’s plan of replacement benefits that
was in effect prior to January 1, 2013, is deemed to also be the
authority’s replacement plan for the sole purpose of allowing the
authority to continue to offer the plan of replacement benefits,
immediately after the transfer, for Kern County Employees’
Retirement Association members who meet both of the following
requirements, and the qualifying survivors or beneficiaries of those
members:

(i) The employee was employed as of January 1, 2013, by the
county or the medical center when it was a constituent department
of the county.

(ii) The employee is part of a member group to which the county
offered a plan of replacement benefits prior to January 1, 2013.

begin insert

(7) (i) Notwithstanding any other law, legacy employees shall
be deemed to be county employees for purposes of participation
in a benefit plan administered by the Kern County Employees’
Retirement Association, but only for that purpose, and shall not
be employees of the county for any other purpose. Upon the
transfer of control of the medical center and thereafter, the county
shall include legacy employees in a special county employee group
for which the county has primary financial responsibility to fund
all employer contributions that, together with contributions by
employees and earnings thereon, are necessary to fund all benefits
for legacy employees administered by the Kern County Employees’
Retirement Association, notwithstanding the fact that, following
the transfer of control of the medical center, the authority shall
commence making periodic employer contributions for legacy
employees. In the event the authority fails to make required
employer contributions for legacy employees when due and after
demand from the Kern County Employees’ Retirement Association,
the county, after receipt of notice and demand from the Kern
County Employees’ Retirement Association, shall be obligated to
make those contributions in place of the authority.

end insert begin insert

(ii) The authority shall be primarily responsible for any
employer contributions that, together with contributions by
employees and earnings thereon, are necessary to fund all benefits
for new employees. In the event the authority fails to make required
contributions for new employees, the county shall be obligated to
make the required contributions after receipt of notice and demand
from the Kern County Employees’ Retirement Association. The
county shall maintain this obligation for new employees until the
authority demonstrates, and the Kern County Employees’
Retirement Association’s Board of Retirement determines, that the
authority is sufficiently capable financially to fully assume the
obligation to make all employer contributions for new employees,
based upon the standard of financial capability approved by the
Kern County Employees’ Retirement Association and the county
in a plan of participation, and incorporated within a written
agreement between the county and the authority. In the event the
authority fails to make required contributions for any new
employees due to the authority’s dissolution or bankruptcy, the
county shall be obligated to make the required contributions after
receipt of notice and demand from the Kern County Employees’
Retirement Association.

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. 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.

(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.

SEC. 5.  

Section 101855 of the Health and Safety Code is
amended to read:

101855.  

(a) Subject to any terms, conditions, and limitations
as may be imposed by the enabling ordinance, 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, subject to Article 5
(commencing with Section 101856).

(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 or otherwise engage 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 principal and 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 begin delete supervisors, end delete begin insert supervisors and except as
otherwise provided in this chapter, end insert 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 one or more contracts or agreements consistent
with this chapter and other applicable 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) If not otherwise required pursuant to the enabling ordinance
to deposit its funds in the county treasury, the authority may
establish its own treasury, 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 law, the authority
may enter into a joint powers agreement as described in Section
6523.5 of the Government Code as though that section applied to
hospitals and other health care facilities in the County of Kern.

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

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

(20) To use a computerized management information system,
including an electronic health records system, in connection with
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,
the authority shall have the same rights, privileges, exemptions,
preferences, and authority of a county with respect to owning,
operating, and providing coverage and services through hospitals,
clinics and other health facilities, health programs, care
organizations, physicians and physician practice plans, delivery
systems, health care service plans, and other provider types and
coverage mechanisms.

(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. Notwithstanding any other
law, except as otherwise provided for in the enabling ordinance
enacted pursuant to 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 applicable to the county, the medical center prior to its
transfer, 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) (1) 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 and may issue
debt instruments, including, without limitation, revenue anticipation
notes to obtain funds to provide, by loan or otherwise, amounts
necessary for the authority to meet its operating and capital needs.

(2) Notwithstanding paragraph (1), nothing in this chapter shall
be construed to limit the borrowing powers the county otherwise
has under law for the purposes specified in paragraph (1) or any
other purposes.

(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
or board of supervisors, as applicable, 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, 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, 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 or concerning the matters
related to rates of payment.

(3) Those records of the authority or board of supervisors, as
applicable, 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 or board of supervisors,
as applicable, 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 or
board of supervisors, as applicable, 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 plans, or other payers 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 thereof,
may engage in marketing, advertising, and promotion of the
medical and health care services made available to the community
by the authority.

(m) (1) The board of supervisors may contract for services or
purchase items on behalf of the authority.

(2) Unless otherwise provided for, and subject to the limitations
and conditions set forth in the enabling ordinance, the board of
governors shall have authority over procurement and contracts for
the authority and shall adopt written rules, regulations, and
procedures with regard to these functions. The authority’s ability
to contract for personnel or other services and items it deems
necessary, appropriate, or convenient for the conduct of its
activities consistent with its purposes shall only be limited by the
provisions in this chapter and obligations under the
Meyers-Milias-Brown Act (Chapter 10 (commencing with Section
3500) of Division 4 of Title 1 of the Government Code).

(3) 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.

SEC. 6.  

Section 101855.1 of the Health and Safety Code is
amended to read:

101855.1.  

(a) Transfer of control 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 in support of uncompensated 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 in support of health care
services of the type provided by the medical center to low-income
individuals.

(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 control 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 providers, including, but not
limited to, ambulatory care clinics, health systems, practices,
designated public hospitals, or governmental 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 governmental 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,
management, control, ownership, or lease of the medical center
not been transferred to the authority pursuant to this chapter.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 101856 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

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,
begin insert or as otherwise provided in this chapter, end insert the county shall not be
obligated under any law to assume the authority’s obligations or
liabilities, or take title to, or custody or control of, the authority’s
assets.

(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.