BILL ANALYSIS Ó
AB 1350
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CONCURRENCE IN SENATE AMENDMENTS
AB
1350 (Salas)
As Amended June 16, 2015
Majority vote
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|ASSEMBLY: | 80-0 | (May 14, |SENATE: |38-0 | (August 20, |
| | |2015) | | |2015) |
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Original Committee Reference: L. GOV.
SUMMARY: Makes changes to existing law which authorizes the
Kern County Board of Supervisors (Board of Supervisors) to
establish the Kern County Hospital Authority (Authority).
The Senate amendments:
1)Define "legacy employee" to mean "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."
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2)Define "new employee" to mean "employees first hired by the
authority after the 24-month period following the date of
transfer of control of the medical center."
3)Require the Authority, if a memoranda of understanding (MOU)
is expired on the date of the transfer of control of Kern
Medical Center (KMC), to continue to be bound by the terms and
conditions of the most recent MOU, unless modified by a mutual
agreement with each of the exclusive employee representatives,
and the benefits and wages of transferred employees, as
specified.
4)Require legacy employees to be deemed to be Kern County
(County) employees for purposes of participation in a benefit
plan administered by the Kern County Employees Retirement
Association, but only for that purpose, and not to be
employees of the County for any other purpose.
5)Require the County, upon the transfer of control of KMC and
thereafter, to include legacy employees in a special county
employee group for which the County has primary financial
responsibility to fund all employer contributions, as
specified, that are necessary to fund all benefits for legacy
employees administered by the Kern County Employees Retirement
Association, as specified.
6)Require the County, if the Authority fails to make required
employer contributions for legacy employees and new employees
and after demand and notice from the Kern County Employees
Retirement Association, to be obligated to make employer
contributions in the place of the Authority.
7)Require the Authority to be primarily responsible for any
employer contributions, as specified, that are necessary to
fund all benefits for new employees.
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8)Require the County to maintain the obligation of employer
contributions for new employees, as specified, 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 on a plan of participation incorporated
within a written agreement between the County and the
Authority. Require the County, if the Authority fails to make
contributions due to dissolution or bankruptcy of the
Authority, to be obligated to make required contributions
after receipt of notice and demand from the Kern County
Employee's Retirement Association.
9)Make technical and conforming changes.
EXISTING LAW authorizes the Board of Supervisors to establish
the Authority, and specifies the Authority's governance, powers,
and procedures.
AS PASSED BY THE ASSEMBLY, this bill:
1)Made a number of changes to existing law which authorizes the
Board of Supervisors to establish by ordinance the Authority
and to allow for the transfer of the county-run KMC to the
Authority.
2)Defined "transfer of control of the medical center" to mean
"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
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enabling ordinance."
3)Added to the list of terms and conditions the Board of
Supervisors may include in the enabling ordinance to transfer
control to the Authority from the County, whether funds of the
Authority shall be deposited in the custody of, and paid out
solely through, the County's treasurer's office.
4)Changed the effective date from the date the County adopts the
enabling ordinance to transfer control to the Authority
instead to the actual date of the transfer of control to the
Authority in a number of provisions in existing law which
require the Authority to be bound by the terms of MOU between
the County and its employee representatives and in several
other provisions that provide protections for employee
benefits.
5)Required the Authority to be treated as a public employer that
offered a plan of replacement benefits prior to January 1,
2013. Provides that the County's plan of replacement benefits
that was in effect prior to January 1, 2013, is deemed to 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
specified requirements.
6)Authorized the Authority, if not otherwise required pursuant
to the enabling ordinance to deposit its funds in the county
treasury, to establish its own treasury.
7)Provided that the powers granted to the Authority, pursuant to
existing law, may be subject to any terms, conditions, and
limitations imposed by the County's enabling ordinance.
8)Added physicians and other provider types and coverage
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mechanisms to the list of services, coverage, and programs
that the Authority has the same rights as the county with
respect to owning, operating, and providing.
9)Expanded the County's authority to issue debt instruments,
beyond revenue anticipation notes, to provide by loan or
otherwise amounts necessary to the Authority to meets its
operating and capital needs.
10)Provided that existing law, which governs the Authority,
shall not be construed to limit the borrowing authority of the
County.
11)Authorized the Board of Supervisors, as applicable, to hold
meetings relating to the Authority's trade secrets, as
specified.
12)Authorized the Board of Supervisors to contract for services
or purchase items on behalf of the Authority.
13)Provided that the Authority's governing body as authority
over procurement and contracts, unless otherwise provided for
and subject to the limitations and conditions established in
the enabling ordinance. Requires the Authority to adopt
written rules, regulations and procedures with regard to
procurement and contract functions.
14)Required the Authority's ability to contract for personnel or
other services and items, as specified, to only be limited by
the provisions in this chapter and the Meyers-Milias-Brown
Act.
FISCAL EFFECT: None
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COMMENTS:
1)Prior Legislation. Facing escalating costs, some county
hospitals have sought to restructure their governance or
affiliate with other hospitals in their areas. In these
instances, the Legislature has granted several counties the
ability to create health authorities, including Alameda [AB
2374 (Bates), Chapter 816, Statutes of 1996], Monterey [AB 276
(Alejo), Chapter 686, Statutes of 2012], San Luis Obispo [SB
538 (O'Connell), Chapter 899, Statutes of 1999], Santa
Barbara, and Sonoma (for dental).
Most recently, the Legislature passed AB 2546 (Salas), Chapter
613, Statutes of 2014, which authorized the Board of
Supervisors to establish a separate Authority to govern the
KMC. AB 2546 contains several provisions to ensure that
healthcare services remain accessible to patients regardless
of their ability to pay and that the Authority, as a separate
entity from the County, will still continue to serve as a
hospital. AB 2546 also established requirements for the
Authority upon the transfer of KMC employees.
2)Bill Summary. This bill builds upon the authority granted to
the Kern County Board of Supervisors by AB 2546 to establish
the Authority and to transfer the medical center to the
separate Authority. This bill makes a number of changes to
the laws governing the transfer of KMC.
Senate amendments define "legacy employees" and "new
employees" and specify the County's obligations to make
required employer contributions in the event that the
Authority fails to do so.
This bill is author-sponsored.
3)Author's Statement. According to the author, "KMC serves a
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community of over 650,000 residents, including indigent
individuals with no other means of obtaining medical care. KMC
provides the only trauma care between Los Angeles and Fresno,
and is vital to training physicians through academic residency
and education programs.
"A hospital authority allows Kern County to benefit from the
cost savings that can be generated by operating under a
separate governance structure and provide opportunities for
increased flexibility, responsiveness, and innovation. The
law established extensive provisions intended to ensure the
medical center will continue to provide affordable,
high-quality health care services and that medical center
employees will have a seamless transition of wages, benefits,
and contracts without loss of rights or status. This bill
contains technical and clarifying changes to ensure the
successful transfer of KMC to an Authority."
4)Arguments in Support. Supporters argue that this bill makes a
number of changes to provide for a smooth and equitable
transition of KMC to a hospital authority.
5)Arguments in Opposition. None on file.
Analysis Prepared by:
Misa Lennox / L. GOV. / (916) 319-3958 FN:
0001296
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