BILL ANALYSIS Ó
SB 315
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Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 315
(Monning) - As Amended June 22, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill authorizes the California Health Facilities Financing
Authority (CHFFA) to transfer up to $6.5 million from its
Hospital Equipment Loan Program for use in a second California
Health Access Model Program (CHAMP) competitive grant selection
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process. Specifically, this bill:
1)Creates a California Health Access Model Program Two (CHAMP 2)
Account within the CHFFA Fund for the purpose of administering
a second competitive grant selection process, to fund one or
more projects designed to demonstrate new or enhanced
cost-effective methods of delivery of health care services to
improve access to care for vulnerable populations or
communities.
2)Requires any funds remaining in the CHAMP 2 account on January
1, 2023, to revert to the CHFFA Fund.
3)Requires CHFFA to prepare and provide a biennial report to the
Legislature and the Governor, commencing on January 1, 2017,
on the outcomes of CHAMP and CHAMP 2.
4)Lowers from 62 to 60 the age range used in the CHFFA
definition of a residential care facility for the elderly
(RCFE) to be consistent with existing statute governing RCFE
licenses.
FISCAL EFFECT:
$6.5 million from the CHFFA Fund will be redirected to fund the
CHAMP 2 effort as specified, to be allocated to eligible
projects, as defined. The timing of actual expenditures is
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unclear.
COMMENTS:
1)Purpose. According to the author, this bill is needed to
provide CHFFA with the legislative authority to use up to $6.5
million from CHFFA's HELP Fund to support a second round of
CHAMP grants. Grants will be available for demonstration
projects designed to improve health outcomes and advance the
innovative delivery of health care to underserved and
vulnerable populations throughout California. The author
notes CHAMP grants have the potential to increase health
access, improve clinical outcomes, and achieve cost savings in
the health care system. This bill is sponsored by California
State Treasurer John Chiang.
2)Background. CHFFA provides financial assistance to public and
nonprofit health care providers through loans funded by the
issuance of tax-exempt bonds. Generally, non-profit, licensed
health facilities in California, including adult day health
centers, community clinics, skilled nursing facilities,
developmentally disabled centers, hospitals, and drug and
alcohol rehabilitation centers are eligible for CHFFA
financing for project-related costs, including construction
and renovation costs. One CHFFA bond financing program, the
Healthcare Expansion Loan Program (HELP) II Financing Program,
makes direct loans to small and rural health facilities. HELP
II loans are offered at 3% interest, 3-15 year financing, and
in amounts up to $1 million.
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AB 1437 (Committee on Budget), Chapter 23, Statutes of 2012
created the original CHAMP program, and allowed CHFFA to award
up to $6.5 million in grants to one or more demonstration
projects up to a combined total of $1.5 million for a single
grantee. $5 million of this amount is contingent on
demonstrating successful outcomes. A single CHAMP grant of
$1.4 million was awarded to the San Francisco Health Plan
(SFHP) for its Community-Based Care Management pilot program.
The program serves vulnerable SFHP members who are high
utilizers of health care services and high risk for mortality.
3)Why CHAMP 2? A variety of factors have contributed to a
significant fund balance in the self-sustaining HELP II Fund.
Given this significant balance is likely to be maintained
without action to reduce it, CHFFA has examined ways to
responsibly use this balance. CHFFA recently commissioned a
financial analysis of potential options to spend down the fund
balance in order to improve access to financing. They modeled
the effect of expanding the loan length beyond the current 15
years, extending loans to borrowers with higher credit risk,
and increasing the size of loans, and also considered
strategies to increase the number of loans. The CHFFA board
approved extending the loan length and increasing loan
amounts. In addition, another round of CHAMP grant programs
was considered, which this bill implements. The financial
modeling projects the fund can absorb all the proposed changes
and maintain a robust balance of at least $6 million, which
was adopted as the minimum floor for the program's fund
balance.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
SB 315
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319-2081