BILL NUMBER: AB 1394 INTRODUCED
BILL TEXT
INTRODUCED BY Committee on Health (Monning (Chair), Logue (Vice
Chair), Ammiano, Atkins, Bonilla, Eng, Gordon, Hayashi, Roger
Hernández, Bonnie Lowenthal, Mitchell, Pan, V. Manuel Pérez, Smyth,
and Williams)
FEBRUARY 28, 2011
An act to amend Sections 15432, 15438, 15438.5, 15439, 15441,
15442, 15446, 15451.5, 15459, 15459.1, 15459.2, 15459.3, and 15459.4
of the Government Code, relating to health facility financing, and
making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 1394, as introduced, Committee on Health. Health care
facilities: financing.
(1) The California Health Facilities Financing Authority Act
authorizes the California Health Facilities Financing 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.
The act defines a health facility to include various specified
facilities and facilities operated in conjunction with these
facilities. It also defines a participating health institution to
mean specified entities authorized by state law to undertake the
financing or refinancing of the construction or acquisition of a
project or of working capital, as defined.
The bill would expand the definition of a health facility to
include a specified private school and information systems equipment
and facilities operated to support the services provided in the
specified facilities. It would revise the definition of a
participating health institution to specify that the financing or
refinancing may be undertaken by the specified entities or through a
related, nonprofit corporation.
(2) The act specifies the powers of the authority as including
entering into agreements for liquidity and credit enhancement.
This bill would revise these powers to include the power to enter
into bond exchange agreements.
(3) The act authorizes, if a health facility seeking financing for
a project pursuant to the act does not meet the guidelines
established by the authority with respect to bond rating, the
authority to give special consideration, on a case-by-case basis, to
financing the project if the health facility demonstrates to the
satisfaction of the authority the financial feasibility of the
project, and the performance of significant community service. The
act provides that it is not the intent of the Legislature to
authorize the control or participation in the operation of hospitals
by the authority, except where default occurs or appears likely.
This bill would revise the above-described intent of the
Legislature regarding default, as specified.
(4) The act authorizes the authority to hold, pledge, cancel, or
resell its bonds, subject to and in accordance with agreements with
bondholders.
This bill would additionally authorize the authority to exchange
its bonds, subject to and in accordance with its agreements with
bondholders.
(5) Existing law authorizes revenue bonds issued pursuant to the
act to be secured by a specified trust agreement or indenture. The
act authorizes indentures, trust agreements, or resolutions for
issuance of these bonds to contain provisions for protecting and
enforcing the rights and remedies of the bondholders, as specified.
This bill would additionally authorize provisions in these
indentures, trust agreements, or resolution for protecting and
enforcing the rights and remedies of any provider of credit or
liquidity support for these bonds.
(6) The act requires a participating health institution that is a
private, nonprofit corporation, or association that borrows money to
finance working capital, other than as part of the cost of a project,
to repay and discharge the loan within 15 months of the loan date.
This bill would, instead, require repayment and discharge within
60 months of the loan date.
By expanding the purposes for which a continuously appropriated
fund may be used this bill would result in an appropriation.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 15432 of the Government Code is amended to
read:
15432. As used in this part, the following words and terms shall
have the following meanings, unless the context clearly indicates or
requires another or different meaning or intent:
(a) "Act" means the California Health Facilities Financing
Authority Act.
(b) "Authority" means the California Health Facilities Financing
Authority created by this part or any board, body, commission,
department, or officer succeeding to the principal functions thereof
or to which the powers conferred upon the authority by this part
shall be given by law.
(c) "Cost," as applied to a project or portion of a project
financed under this part, means and includes all or any part of the
cost of construction and acquisition of all lands, structures, real
or personal property, rights, rights-of-way, franchises, easements,
and interests acquired or used for a project, the cost of demolishing
or removing any buildings or structures on land so acquired,
including the cost of acquiring any lands to which those buildings or
structures may be moved, the cost of all machinery and equipment,
financing charges, interest prior to, during, and for a period not to
exceed the later of one year or one year following completion of
construction, as determined by the authority, the cost of insurance
during construction, the cost of funding or financing noncapital
expenses, reserves for principal and interest and for extensions,
enlargements, additions, replacements, renovations and improvements,
the cost of engineering, service contracts, reasonable financial and
legal services, plans, specifications, studies, surveys, estimates,
administrative expenses, and other expenses of funding or financing,
that are necessary or incident to determining the feasibility of
constructing any project, or that are incident to the construction,
acquisition, or financing of any project.
(d) "Health facility" means any facility, place, or building that
is licensed, accredited, or certified and organized, maintained, and
operated for the diagnosis, care, prevention, and treatment of human
illness, or physical, mental, or developmental disability, including
convalescence and rehabilitation and including care during and after
pregnancy, or for any one or more of these purposes, for one or more
persons, and includes, but is not limited to, all of the following
types:
(1) A general acute care hospital that is a health facility having
a duly constituted governing body with overall administrative and
professional responsibility and an organized medical staff that
provides 24-hour inpatient care, including the following basic
services: medical, nursing, surgical, anesthesia, laboratory,
radiology, pharmacy, and dietary services.
(2) An acute psychiatric hospital that is a health facility having
a duly constituted governing body with overall administrative and
professional responsibility and an organized medical staff that
provides 24-hour inpatient care for mentally disordered, incompetent,
or other patients referred to in Division 5 (commencing with Section
5000) or Division 6 (commencing with Section 6000) of the Welfare
and Institutions Code, including the following basic services:
medical, nursing, rehabilitative, pharmacy, and dietary services.
(3) A skilled nursing facility that is a health facility that
provides the following basic services: skilled nursing care and
supportive care to patients whose primary need is for availability or
skilled nursing care on an extended basis.
(4) An intermediate care facility that is a health facility that
provides the following basic services: inpatient care to ambulatory
or semiambulatory patients who have recurring need for skilled
nursing supervision and need supportive care, but who do not require
availability or continuous skilled nursing care.
(5) A special health care facility that is a health facility
having a duly constituted governing body with overall administrative
and professional responsibility and an organized medical or dental
staff that provides inpatient or outpatient, acute or nonacute care,
including, but not limited to, medical, nursing, rehabilitation,
dental, or maternity.
(6) A clinic that is operated by a tax-exempt nonprofit
corporation that is licensed pursuant to Section 1204 or 1204.1 of
the Health and Safety Code or a clinic exempt from licensure pursuant
to subdivision (b) or (c) of Section 1206 of the Health and Safety
Code.
(7) An adult day health center that is a facility, as defined
under subdivision (b) of Section 1570.7 of the Health and Safety
Code, that provides adult day health care, as defined under
subdivision (a) of Section 1570.7 of the Health and Safety Code.
(8) Any facility owned or operated by a local jurisdiction for the
provision of county health services.
(9) A multilevel facility is an institutional arrangement where a
residential facility for the elderly is operated as a part of, or in
conjunction with, an intermediate care facility, a skilled nursing
facility, or a general acute care hospital. "Elderly," for the
purposes of this paragraph, means a person 62 years of age or older.
(10) A child day care facility operated in conjunction with a
health facility. A child day care facility is a facility, as defined
in Section 1596.750 of the Health and Safety Code. For purposes of
this paragraph, "child" means a minor from birth to 18 years of age.
(11) An intermediate care facility/developmentally disabled
habilitative that is a health facility, as defined under subdivision
(e) of Section 1250 of the Health and Safety Code.
(12) An intermediate care facility/developmentally
disabled-nursing that is a health facility, as defined under
subdivision (h) of Section 1250 of the Health and Safety Code.
(13) A community care facility that is a facility, as defined
under subdivision (a) of Section 1502 of the Health and Safety Code,
that provides care, habilitation, rehabilitation, or treatment
services to developmentally disabled or mentally impaired persons.
(14) A nonprofit community care facility, as defined in
subdivision (a) of Section 1502 of the Health and Safety Code, other
than a facility that, as defined in that subdivision, is a
residential facility for the elderly, a foster family agency, a
foster family home, a full service adoption agency, or a noncustodial
adoption agency.
(15) A nonprofit accredited community work activity program, as
specified in subdivision (e) of Section 4851 and Section 4856 of the
Welfare and Institutions Code.
(16) A community mental health center, as defined in paragraph (3)
of subdivision (b) of Section 5667 of the Welfare and Institutions
Code.
(17) A nonprofit speech and hearing center, as defined in Section
1201.5 of the Health and Safety Code.
(18) A blood bank, as defined in Section 1600.2 of the Health and
Safety Code, licensed pursuant to Section 1602.5 of the Health and
Safety Code, and exempt from federal income taxation pursuant to
Section 501(c)(3) of the Internal Revenue Code.
(19) A residential facility for persons with developmental
disabilities, as defined in Sections 4688.5 and 4688.6 of the Welfare
and Institutions Code, which includes, but is not limited to, a
community care facility licensed pursuant to Section 1502 of the
Health and Safety Code and a family teaching home as defined in
Section 4689.1 of the Welfare and Institutions Code.
(20) A certified private school that provides educational
services in conjunction with a multidisciplinary health facility, as
defined in paragraphs (1) to (19), inclusive, that otherwise
qualifies for financing pursuant to this part, and that is designed
to meet the needs of individuals with physical, mental, or
developmental disabilities.
"Health facility" includes a clinic that is described in
subdivision (l) of Section 1206 of the Health and Safety Code.
"Health facility" includes information systems equipment and
the following facilities, if the equipment and
facility is operated in conjunction with or to support the
services provided in one or more of the facilities specified in
paragraphs (1) to (19), inclusive, of this subdivision: a
laboratory, laundry, or a nurses or
interns residence, housing for staff or employees and their families
or patients or relatives of patients, a physicians' facility, an
administration building, a research facility, a maintenance, storage,
or utility facility, an information systems facility, all
structures or facilities related to any of the foregoing facilities
or required or useful for the operation of a health facility and the
necessary and usual attendant and related facilities and equipment,
and parking and supportive service facilities or structures required
or useful for the orderly conduct of the health facility.
"Health facility" does not include any institution, place, or
building used or to be used primarily for sectarian instruction or
study or as a place for devotional activities or religious worship.
(e) "Participating health institution" means a city, city and
county, or county, a district hospital, or a private nonprofit
corporation or association, or a limited liability company whose sole
member is a nonprofit corporation or association authorized by the
laws of this state to provide or operate a health facility and that,
pursuant to the provisions of this part,
undertakes , by itself, or through a related nonprofit
corporation, the financing or refinancing of the construction
or acquisition of a project or of working capital as provided in this
part. "Participating health institution" also includes, for purposes
of the California Health Facilities Revenue Bonds (UCSF-Stanford
Health Care) 1998 Series A, the Regents of the University of
California.
(f) "Project" means construction, expansion, remodeling,
renovation, furnishing, or equipping, or funding, financing, or
refinancing of a health facility or acquisition of a health facility
to be financed or refinanced with funds provided in whole or in part
pursuant to this part. "Project" may include reimbursement for the
costs of construction, expansion, remodeling, renovation, furnishing,
or equipping, or funding, financing, or refinancing of a health
facility or acquisition of a health facility. "Project" may include
any combination of one or more of the foregoing undertaken jointly by
any participating health institution with one or more other
participating health institutions.
(g) "Revenue bond" means any bond, warrant, note, lease, or
installment sale obligation that is evidenced by a certificate of
participation or other evidence of indebtedness issued by the
authority.
(h) "Working capital" means moneys to be used by, or on behalf of,
a participating health institution to pay or prepay maintenance or
operation expenses or any other costs that would be treated as an
expense item, under generally accepted accounting principles, in
connection with the ownership or operation of a health facility,
including, but not limited to, reserves for maintenance or operation
expenses, interest for not to exceed one year on any loan for working
capital made pursuant to this part, and reserves for debt service
with respect to, and any costs necessary or incidental to, that
financing.
SEC. 2. Section 15438 of the Government Code is amended to read:
15438. The authority may do any of the following:
(a) Adopt bylaws for the regulation of its affairs and the conduct
of its business.
(b) Adopt an official seal.
(c) Sue and be sued in its own name.
(d) Receive and accept from any agency of the United States, any
agency of the state, or any municipality, county, or other political
subdivision thereof, or from any individual, association, or
corporation gifts, grants, or donations of moneys for achieving any
of the purposes of this chapter.
(e) Engage the services of private consultants to render
professional and technical assistance and advice in carrying out the
purposes of this part.
(f) Determine the location and character of any project to be
financed under this part, and to acquire, construct, enlarge,
remodel, renovate, alter, improve, furnish, equip, fund, finance,
own, maintain, manage, repair, operate, lease as lessee or lessor,
and regulate the same, to enter into contracts for any or all of
those purposes, to enter into contracts for the management and
operation of a project or other health facilities owned by the
authority, and to designate a participating health institution as its
agent to determine the location and character of a project
undertaken by that participating health institution under this
chapter and as the agent of the authority, to acquire, construct,
enlarge, remodel, renovate, alter, improve, furnish, equip, own,
maintain, manage, repair, operate, lease as lessee or lessor, and
regulate the same, and as the agent of the authority, to enter into
contracts for any or all of those purposes, including contracts for
the management and operation of that project or other health
facilities owned by the authority.
(g) Acquire, directly or by and through a participating health
institution as its agent, by purchase solely from funds provided
under the authority of this part, or by gift or devise, and to sell,
by installment sale or otherwise, any lands, structures, real or
personal property, rights, rights-of-way, franchises, easements, and
other interests in lands, including lands lying under water and
riparian rights, that are located within the state that the authority
determines necessary or convenient for the acquisition,
construction, or financing of a health facility or the acquisition,
construction, financing, or operation of a project, upon the terms
and at the prices considered by the authority to be reasonable and
that can be agreed upon between the authority and the owner thereof,
and to take title thereto in the name of the authority or in the name
of a participating health institution as its agent.
(h) Receive and accept from any source loans, contributions, or
grants for, or in aid of, the construction, financing, or refinancing
of a project or any portion of a project in money, property, labor,
or other things of value.
(i) Make secured or unsecured loans to, or purchase secured or
unsecured loans of, any participating health institution in
connection with the financing of a project or working capital in
accordance with an agreement between the authority and the
participating health institution. However, no loan to finance a
project shall exceed the total cost of the project, as determined by
the participating health institution and approved by the authority.
Funds for secured loans may be provided from the California Health
Facilities Financing Fund pursuant to subdivision (b) of Section
15439 to small or rural health facilities pursuant to authority
guidelines.
(j) Make secured or unsecured loans to, or purchase secured or
unsecured loans of, any participating health institution in
accordance with an agreement between the authority and the
participating health institution to refinance indebtedness incurred
by that participating health institution in connection with projects
undertaken or for health facilities acquired or for working capital.
Funds for secured loans may be provided from the California Health
Facilities Financing Fund pursuant to subdivision (b) of Section
15439 to small or rural health facilities pursuant to authority
guidelines.
(k) Mortgage all or any portion of interest of the authority in a
project or other health facilities and the property on which that
project or other health facilities are located, whether owned or
thereafter acquired, including the granting of a security interest in
any property, tangible or intangible, and to assign or pledge all or
any portion of the interests of the authority in mortgages, deeds of
trust, indentures of mortgage or trust, or similar instruments,
notes, and security interests in property, tangible or intangible, of
participating health institutions to which the authority has made
loans, and the revenues therefrom, including payments or income from
any thereof owned or held by the authority, for the benefit of the
holders of bonds issued to finance the project or health facilities
or issued to refund or refinance outstanding indebtedness of
participating health institutions as permitted by this part.
(l) Lease to a participating health institution the project being
financed or other health facilities conveyed to the authority in
connection with that financing, upon the terms and conditions the
authority determines proper, charge and collect rents therefor,
terminate the lease upon the failure of the lessee to comply with any
of the obligations of the lease, and include in that lease, if
desired, provisions granting the lessee options to renew the term of
the lease for the period or periods and at the rent, as determined by
the authority, purchase any or all of the health facilities or that
upon payment of all of the indebtedness incurred by the authority for
the financing of that project or health facilities or for refunding
outstanding indebtedness of a participating health institution, then
the authority may convey any or all of the project or the other
health facilities to the lessee or lessees thereof with or without
consideration.
(m) Charge and equitably apportion among participating health
institutions, the administrative costs and expenses incurred by the
authority in the exercise of the powers and duties conferred by this
part.
(n) Obtain, or aid in obtaining, from any department or agency of
the United States or of the state, any private company, or any
insurance or guarantee as to, of, or for the payment or repayment of,
interest or principal, or both, or any part thereof, on any loan,
lease, or obligation, or any instrument evidencing or securing the
loan, lease, or obligation, made or entered into pursuant to this
part; and notwithstanding any other provisions of this part, to enter
into any agreement, contract, or any other instrument whatsoever
with respect to that insurance or guarantee, to accept payment in the
manner and form as provided therein in the event of default by a
participating health institution, and to assign that insurance or
guarantee as security for the authority's bonds.
(o) Enter into any and all agreements or contracts, including
agreements for liquidity and or credit
enhancement, bond exchange agreements, interest rate swaps
or hedges, execute any and all instruments, and do and perform any
and all acts or things necessary, convenient, or desirable for the
purposes of the authority or to carry out any power expressly granted
by this part.
(p) Invest any moneys held in reserve or sinking funds or any
moneys not required for immediate use or disbursement, at the
discretion of the authority, in any obligations authorized by the
resolution authorizing the issuance of the bonds secured thereof or
authorized by law for the investment of trust funds in the custody of
the Treasurer.
(q) Award grants to any eligible clinic pursuant to Section
15438.6.
(r) Award grants to any eligible health facility pursuant to
Section 15438.7.
(s) (1) Notwithstanding any other provision of law, provide a
working capital loan of up to five million dollars ($5,000,000) to
assist in the establishment and operation of the California Health
Benefit Exchange (Exchange) established under Section 100500. The
authority may require any information it deems necessary and prudent
prior to providing a loan to the Exchange and may require any term,
condition, security, or repayment provision it deems necessary in the
event the authority chooses to provide a loan. Under no
circumstances shall the authority be required to provide a loan to
the Exchange.
(2) Prior to the authority providing a loan to the Exchange, a
majority of the board of the Exchange shall be appointed and shall
demonstrate, to the satisfaction of the authority, that the federal
planning and establishment grants made available to the Exchange by
the United States Secretary of Health and Human Services are
insufficient or will not be released in a timely manner to allow the
Exchange to meet the necessary requirements of the federal Patient
Protection and Affordable Care Act (Public Law 111-148).
(3) The Exchange shall repay a loan made under this subdivision no
later than June 30, 2016, and shall pay interest at the rate paid on
moneys in the Pooled Money Investment Account.
SEC. 3. Section 15438.5 of the Government Code is amended to read:
15438.5. (a) It is the intent of the Legislature in enacting this
part to provide financing only, and, except as provided in
subdivisions (b), (c), and (d), only to participating
health facilities institutions that can
demonstrate the financial feasibility of their projects. It is
further the intent of the Legislature that all or part of any savings
experienced by a participating health institution, as a result of
that tax-exempt revenue bond funding, be passed on to the consuming
public through lower charges or containment of the rate of increase
in hospital rates. It is not the intent of the Legislature in
enacting this part to encourage unneeded health facility
construction. Further, it is not the intent of the Legislature to
authorize the authority to control or participate in the operation of
hospitals, except where default occurs or appears likely to
occur under the terms of an agreement with the
authority .
(b) When determining the financial feasibility of projects, the
authority shall consider the more favorable interest rates reasonably
anticipated through the issuance of revenue bonds under this part.
It is the intent of the Legislature that the authority attempt in
whatever ways possible to assist participating health
facilities institutions to
arrange finance projects that will meet the
financial feasibility standards developed under this part.
(c) If a participating health facility
institution seeking financing for a project
pursuant to this part does not meet the guidelines established by the
authority with respect to bond rating, the authority may nonetheless
give special consideration, on a case-by-case basis, to financing
the project if the participating health facility
institution demonstrates to the satisfaction of
the authority the financial feasibility of the project, and the
performance of significant community service. For the purposes of
this part, a participating health facility
institution that performs a significant
community service is one that contracts with Medi-Cal or that can
demonstrate, with the burden of proof being on the participating
health facility institution ,
that it has fulfilled at least two of the following criteria:
(1) On or before January 1, 1991, has established, and agrees to
maintain, a 24-hour basic emergency medical service open to the
public with a physician and surgeon on duty, or is a children's
hospital as defined in Section 14087.21 of the Welfare and
Institutions Code, that jointly provides basic or comprehensive
emergency services in conjunction with another licensed hospital.
This criterion shall not be utilized in a circumstance where a small
and rural hospital, as defined in Section 442.2 of the Health and
Safety Code, has not established a 24-hour basic emergency medical
service with a physician and surgeon on duty or will operate a
designated trauma center on a continuing basis during the life of the
revenue bonds issued by the authority.
(2) Has adopted, and agrees to maintain on a continuing basis
during the life of the revenue bonds issued by the authority, a
policy, approved and recorded by the facility's board of directors,
of treating all patients without regard to ability to pay, including,
but not limited to, emergency room walk-in patients.
(3) Has provided and agrees to provide care, on a continuing basis
during the life of the revenue bonds issued by the authority, to
Medi-Cal and uninsured patients in an amount not less than 5 percent
of the facility's adjusted inpatient days as reported on an annual
basis to the Office of Statewide Health Planning and Development.
(4) Has budgeted at least 5 percent of its net operating income to
meeting the medical needs of uninsured patients and to providing
other services, including, but not limited to, community education,
primary care outreach in ambulatory settings, and unmet nonmedical
needs, such as food, shelter, clothing, or transportation for
vulnerable populations in the community, and agrees to continue that
policy during the life of the revenue bonds issued by the authority.
(d) Enforcement of the conditions under which the authority issues
bonds pursuant to this section shall be governed by the enforcement
conditions under Section 15459.4.
SEC. 4. Section 15439 of the Government Code is amended to read:
15439. (a) The California Health Facilities Authority Fund is
continued in existence in the State Treasury as the California Health
Facilities Financing Authority Fund. All money in the fund is hereby
continuously appropriated to the authority for carrying out the
purposes of this division. The authority may pledge any or all of the
moneys in the fund as security for payment of the principal of, and
interest on, any particular issuance of bonds issued pursuant to this
part, or any particular secured or unsecured loan made pursuant to
subdivision (i), (j), or (s) of Section 15438, or for a grant awarded
pursuant to subdivision (b) of Section 15438.7, and, for that
purpose or as necessary or convenient to the accomplishment of any
other purpose of the authority, may divide the fund into separate
accounts. All moneys accruing to the authority pursuant to this part
from whatever source shall be deposited in the fund.
(b) Subject to the priorities that may be created by the pledge of
particular moneys in the fund to secure any issuance of bonds of the
authority, and subject further to the cost of loans provided by the
authority pursuant to subdivisions (i), (j), or (s) of Section 15438
and to the cost of grants provided by the authority pursuant to
Section 15438.7, and subject further to any reasonable costs which
may be incurred by the authority in administering the program
authorized by this division, all moneys in the fund derived from any
source shall be held in trust for the security and payment of bonds
of the authority and shall not be used or pledged for any other
purpose so long as the bonds are outstanding and unpaid. However,
nothing in this section
shall limit the power of the authority to make loans with the
proceeds of bonds in accordance with the terms of the resolution
authorizing the same or pledging or granting a security interest
to the provider of credit support as specified in the documents
pursuant to which authority revenue bonds are issued .
(c) Pursuant to any agreements with the holders of particular
bonds pledging any particular assets, revenues, or moneys, the
authority may create separate accounts in the fund to manage assets,
revenues, or moneys in the manner set forth in the agreements.
(d) The authority may, from time to time, direct the
State Treasurer to invest moneys in the fund that are not
required for its current needs, including proceeds from the sale of
any bonds, in the eligible securities specified in Section 16430 as
the agency shall designate. The authority may direct the
State Treasurer to deposit moneys in interest-bearing
accounts in state or national banks or other financial institutions
having principal offices in this state. The authority may
alternatively require the transfer of moneys in the fund to the
Surplus Money Investment Fund for investment pursuant to Article 4
(commencing with Section 16470) of Chapter 3 of Part 2 of Division 4.
All interest or other increment resulting from an investment or
deposit shall be deposited in the fund, notwithstanding Section
16305.7. Moneys in the fund shall not be subject to transfer to any
other fund pursuant to any provision of Part 2 (commencing with
Section 16300) of Division 4, excepting the Surplus Money Investment
Fund.
(e) All moneys accruing to the authority from whatever source
shall be deposited in the fund.
SEC. 5. Section 15441 of the Government Code is amended to read:
15441. (a) The authority is authorized, from time to time, to
issue its negotiable revenue bonds in order to provide funds for
achieving any of its purposes under this part.
(b) Except as may otherwise be expressly provided by the
authority, each of its revenue bonds shall be payable from any
revenues or moneys of the authority available therefor and not
otherwise pledged, subject only to any agreements with the holders of
particular bonds or notes pledging any particular revenues or
moneys. Notwithstanding that such these
revenue bonds may be payable from a special fund, they shall be and
be deemed to be for all purposes negotiable instruments, subject only
to the provisions of such these bonds
for registration.
(c) The authority's revenue bonds may be issued as serial bonds or
as term bonds, or the authority, in its discretion, may issue bonds
of both types. The issuance of all revenue bonds shall be authorized
by resolution of the authority and shall bear such date or dates,
mature at such time or times, not exceeding 40 years from their
respective dates, bear interest at such rate or rates, be payable at
such time or times, be in such denominations, be in such form, either
coupon or registered, carry such registration privileges, be
executed in such manner, be payable in lawful money of the United
States of America at such place or places, and be subject to such
terms of redemption, as the indenture, trust agreement, or resolution
relating to such these revenue bonds
may provide. The authority's revenue bonds or notes may be sold by
the Treasurer at public or private sale, after giving due
consideration to the recommendation of the participating health
institution, for such the price or
prices and upon such the terms and
conditions as the authority shall determine. The Treasurer may sell
any such these revenue bonds at a price
below the par value thereof. However, the discount on any bonds so
sold shall not exceed 6 percent of the par value thereof, except in
the case of any bonds payable in whole or in part from moneys held
under one or more outstanding resolutions or indentures. Pending
preparation of the definitive bonds, the authority may issue interim
receipts or certificates or temporary bonds which shall be exchanged
for such definitive bonds.
(d) Any resolution or resolutions authorizing the issuance of any
revenue bonds or any issue of revenue bonds may contain provisions,
which shall be a part of the contract with the holders of the bonds
to be authorized, as to pledging all or any part of the revenues of a
project or any revenue-producing contract or contracts made by the
authority with any individual, partnership, corporation or
association or other body, public or private, to secure the payment
of the bonds or of any particular issue of bonds.
(e) Neither the members of the authority nor any person executing
the revenue bonds shall be liable personally on the bonds or be
subject to any personal liability or accountability by reason of the
issuance thereof.
(f) The authority shall have power out of any funds available
therefor to purchase its bonds. The authority may hold, pledge,
exchange, cancel , or resell such
these bonds, subject to and in accordance with its
agreements with bondholders.
SEC. 6. Section 15442 of the Government Code is amended to read:
15442. In the discretion of the authority, any revenue bonds
issued under the provisions of this part may be secured by a trust
agreement or indenture by and between the authority and a corporate
trustee or trustees, which may be the State
Treasurer or any trust company or bank having the powers of a trust
company within or without the state. Such The
trust agreement, indenture, or the resolution providing for
the issuance of such these bonds may
pledge or assign the revenues to be received from a participating
health institution. Such The indenture,
trust agreement, or resolution providing for the issuance of
such these bonds may contain
such provisions for protecting and enforcing the rights and
remedies of the bondholders and any provider of credit or
liquidity support for these bonds as may be reasonable and
proper and not in violation of law, including particularly
such those provisions as have hereinabove been
specifically authorized to be included in any resolution or
resolutions of the authority authorizing bonds thereof. Any
such trust agreement or indenture may set forth the rights
and remedies of the bondholders , any provider of credit or
liquidity support for these bonds, and of the trustee or
trustees, and may restrict the individual right of action of
bondholders. In addition to the foregoing, any such
indenture, trust agreement, or resolution may contain such
other provisions as the authority may deem reasonable and proper for
the security of the bondholders.
SEC. 7. Section 15446 of the Government Code is amended to read:
15446. (a) The authority may provide for the issuance of bonds of
the authority for the purpose of refunding any bonds or any series
or issue of bonds of the authority issued for
the benefit of a participating health institution then
outstanding, including the payment of any redemption premium thereon
and any interest accrued or to accrue to the date of redemption,
purchase, or maturity of the bonds.
(b) The proceeds of any bonds issued for the purpose of refunding
of outstanding bonds may, in the discretion of the authority, be
applied to the purchase, redemption prior to maturity, or retirement
at maturity of any outstanding bonds on their earliest redemption
date or dates, upon their purchase or maturity, or paid to a third
person to assume the authority's obligation to make the payments, and
may, pending that application, be placed in escrow to be applied to
the purchase, retirement at maturity, or redemption on the date or
dates determined by the authority.
(c) Any proceeds placed in escrow may, pending their use, be
invested and reinvested in obligations or securities authorized by
resolutions of the authority, payable or maturing at the time or
times as are appropriate to assure the prompt payment of the
principal, interest, and redemption premium, if any, of the
outstanding bonds to be refunded at maturity or redemption of the
bonds to be refunded either at their earliest redemption date or
dates or any subsequent redemption date or dates or for payment of
interest on the refunding bonds on or prior to the final date of
redemption or payment of the bonds to be refunded. After the terms of
the escrow have been fully satisfied and carried out, any balance of
the proceeds and interest, income and profits, if any, earned or
realized on the investments thereof may be returned to the authority
for use by the authority.
(d) All of the refunding bonds are subject to this part in the
same manner and to the same extent as other bonds issued pursuant to
this part.
SEC. 8. Section 15451.5 of the Government Code is amended to read:
15451.5. A participating health institution that is a private
nonprofit corporation or association and that borrows money to
finance working capital pursuant to this part, other than as part of
the cost of a project, shall be required to repay and discharge the
loan within 15 60 months of the loan
date.
SEC. 9. Section 15459 of the Government Code is amended to read:
15459. As a condition of the issuance of revenue bonds, whether
by the authority or any local agency, to finance the construction,
expansion, remodeling, renovation, furnishing, or equipping of a
health facility or the acquisition of a health facility, each
borrower participating health institution
shall give reasonable assurance to the authority that the
services of the health facility will be made available to all persons
residing or employed in the area served by the facility.
For the purposes of this section and Sections 15459.1, 15459.2,
15459.3, and 15459.4, all of the following definitions apply:
(a) "Borrower" means each local agency or nonprofit corporation or
association which operates or provides the health facility and
receives the benefit of the issuance of revenue bonds.
(b)
(a) "Local agency" means any public district, public
corporation, authority, agency, board, commission, county, city and
county, city, school district, or any other public entity.
(c)
(b) "Revenue bond" means any bonds, warrants, notes,
lease, or installment sale obligations evidenced by certificates of
participation, or other evidence of indebtedness issued by the
authority or by a local agency payable from funds other than the
proceeds of ad valorem taxes or the proceeds of assessments levied
without limitation as to rate or amount by the local agency upon
property in the local agency.
SEC. 10. Section 15459.1 of the Government Code is amended to
read:
15459.1. As part of its assurance under Section 15459, the
borrower participating health institution
shall agree to all of the following actions:
(a) To advise each person seeking services at the
borrower's par ticipating health institution'
s facility as to the person's potential eligibility for
Medi-Cal and Medicare benefits or benefits from other governmental
third-party payers.
(b) To make available to the authority and to any interested
person a list of physicians with staff privileges at the
borrower's participating health institution's
facility, which includes all of the following:
(1) Name.
(2) Specialty.
(3) Language spoken.
(4) Whether the physician takes Medi-Cal and Medicare patients.
(5) Business address and phone number.
(c) To inform in writing on a periodic basis all practitioners of
the healing arts having staff privileges in the borrower's
participating health institution's facility as
to the existence of the facility's community service obligation. The
required notice to practitioners shall contain a statement, as
follows:
"This hospital has agreed to provide a community service and to
accept Medi-Cal and Medicare patients. The administration and
enforcement of this agreement is the responsibility of the California
Health Facilities Financing Authority and this facility."
(d) To post notices in the following form, which shall be
multilingual where the borrower parti
cipating health institution serves a multilingual
community, in appropriate areas within the facility, including, but
not limited to, admissions offices, emergency rooms, and business
offices:
"This facility has agreed to make its services available to all
persons residing or employed in this area. This facility is
prohibited by law from discriminating against Medi-Cal and Medicare
patients. Should you believe you may be eligible for Medi-Cal or
Medicare, you should contact our business office (or designated
person or office) for assistance in applying. You should also contact
our business office (or designated person or office) if you are in
need of a physician to provide you with services at this facility. If
you believe that you have been refused services at this facility in
violation of the community service obligation you should inform
(designated person or office) and the California Health Facilities
Financing Authority."
The borrower participating health
institution shall provide copies of this notice for posting to
all welfare offices in the county where the borrower's
participating health institution's facility is
located.
(e) For all facilities in areas, and of a type, not subject to
Medi-Cal contracting and for all borrowers
participating health institution which have negotiated in good
faith to obtain a Medi-Cal contract but were not awarded a contract
by the California Medi-Cal Assistance Commission, the authority shall
make modifications to the requirements contained in this section to
reflect the absence of a Medi-Cal contract. Nothing in this section
relieves a hospital of its obligations under Section 1317 of the
Health and Safety Code.
SEC. 11. Section 15459.2 of the Government Code is amended to
read:
15459.2. If the borrower participating
health institution cannot demonstrate that it meets the
requirements of Section Sections 15459
and 15459.1 , it may nonetheless be eligible for financing
through the issuance of revenue bonds if it presents a plan that is
satisfactory to the authority which details the reasonable steps and
timetables that the borrower agrees to take to bring the facility
into compliance with Section 15459 these
sections .
SEC. 12. Section 15459.3 of the Government Code is amended to
read:
15459.3. Each borrower participating
health institution shall make available to the authority and to
the public upon request an annual report substantiating compliance
with the requirements of Section 15459. The annual report shall set
forth sufficient information and verification therefor to indicate
the borrower's participating health
institution's compliance. The report shall include at least the
following:
(a) By category for inpatient admissions, emergency admission, and
where the facility has a separate identifiable outpatient service:
(1) The total number of patients receiving services.
(2) The total number of Medi-Cal patients served.
(3) The total number of Medicare patients served.
(4) The total number of patients who had no financial sponsor at
the time of service.
(5) The dollar volume of services provided to each patient
category listed in paragraphs (1), (2), and (3).
(b) Where appropriate, the actions taken pursuant to Section
15459.2 and the effect the actions have had on the data specified in
subdivision (a).
(c) Any other information which the authority may reasonably
require.
SEC. 13. Section 15459.4 of the Government Code is amended to
read:
15459.4. The remedies and sanctions available to the authority
against the borrower participating health
institution for failure to adhere to the assurance given to the
authority under Section 15459 shall include all of the following:
(a) Rendering the borrower participating
health institution ineligible for federal and state financial
assistance under the Hill-Burton Program.
(b) Requiring a borrower participating
health institution that had originally met the conditions of
community service to submit a plan that is satisfactory to the
authority which details the reasonable steps and timetables that the
borrower participating health institution
agrees to take to bring the facility back into compliance with
the assurances given to the authority.
(c) Referring the violation to the office of the Attorney General
of California for legal action authorized under existing law or other
remedy at law or equity, when a facility fails to carry out the
actions agreed to in a plan approved by the authority pursuant to
subdivision (b) of this section. However, the remedies obtainable by
the legal action shall not include withdrawal or cancellation of the
project or projects financed or to be financed through the issuance
of revenue bonds.