BILL NUMBER: SB 408	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JULY 12, 2011
	AMENDED IN ASSEMBLY  JUNE 28, 2011
	AMENDED IN SENATE  MAY 31, 2011
	AMENDED IN SENATE  APRIL 12, 2011

INTRODUCED BY   Senator Hernandez

                        FEBRUARY 16, 2011

   An act to add Section 1265.9 to the Health and Safety Code,
relating to health facilities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 408, as amended, Hernandez. Health facilities: licensure.
   Existing law provides for the licensure and regulation of health
facilities administered by the State Department of Public Health. A
violation of these provisions is a crime.
   Existing law requires those desiring a license for a health
facility, approval for a specified special service, or approval to
manage a specified type of licensed health facility, that have not
filed an application for a license to operate that facility, to file
with the department a verified application on forms prescribed and
furnished by the department, containing specified information.
   Existing law provides that any requirement placed upon, or
reference to, a corporation in the provisions regulating health
facilities shall also apply to a limited liability company.
   This bill would require a new license application to be filed for
a health facility, as defined, when there is a change of ownership,
as defined. This bill would also require a prescribed notice to be
filed with the department prior to a change in ownership, as defined,
or change in control interest, as defined, for certain health
facilities.
   Because this bill expands the definition of a crime, it would
impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1265.9 is added to the Health and Safety Code,
to read:
   1265.9.  (a) For purposes of this section, the following
definitions shall apply:
   (1) "Change of ownership" means any of the following:
   (A) For a partnership, the removal, addition, or substitution of a
partner.
   (B) For an unincorporated sole proprietorship, the transfer of
title and property to another person.
   (C) For a corporation, the merger of the applicant's or provider's
corporation into another corporation, or the consolidation of two or
more corporations, resulting in the creation of a new corporation.
The transfer of corporate stock or the merger of another corporation
into the applicant's or provider's corporation does not constitute a
change of ownership.
   (D) For a lease, the lease of all or part of an applicant's or
provider's facility constitutes a change of ownership of the leased
portion.
   (2) "Change in ownership" means a transaction where any of the
following occurs:
   (A) A sale, transfer, lease, exchange, conveyance, or other
disposal of a limited partnership interest, corporate shares, or
limited liability company interest representing at least 20 percent
of all ownership interests in a health facility that is described in
subdivision (a), (b), or (f) of Section 1250 or in the current
licenseholder.
   (B) The merger of an entity that owns or operates a health
facility described in subdivision (a), (b), or (f) of Section 1250
that does not result in a change in the taxpayer identification
number of the licenseholder.
   (C) A substitution of a new corporate member or member of the
governing body, or any arrangement, written or oral, that would
transfer voting control of a health facility described in subdivision
(a), (b), or (f) of Section 1250. A substitution of a new corporate
member or member of the governing body shall not constitute a change
in ownership when the substitution occurs in the usual and regular
course of the activities of a health facility described in
subdivision (a), (b), or (f) of Section 1250.
   (3) "Change in control interest" means a transaction where any of
the following, except a change of ownership or change in ownership,
occurs:
   (A) A sale, transfer, lease, exchange, conveyance, or other
disposal of a limited partnership interest, corporate shares, or
limited liability company interest representing at least 10 percent
of all ownership interests in a health facility described in
subdivision (a), (b), or (f) of Section 1250, or in the
licenseholder, but that represents less than 20 percent of the
ownership interests in the health facility or licenseholder.
   (B) A change in any member of the governing body or principal
officers of a health facility described in subdivision (a), (b), or
(f) of Section 1250 that does not transfer voting control of the
health facility.
   (b) A new license application for a health facility described in
subdivision (a), (b), (c), (d), or (f) of Section 1250 shall be filed
when there is a change of ownership in the health facility.
   (c) At least 45 days prior to a change in ownership, or change in
control interest in a health facility that is described in
subdivision (a), (b), or (f) of Section 1250, a notice of the change
shall be filed with the department. If the transaction is a change in
ownership, a new license application shall be filed with the notice.
If the transaction is a change  of   in 
control interest, a State Department of Public Health form HS 215A
shall be filed with the notice.
   (d) Notwithstanding the rulemaking provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Title 2 of the
Government Code, the department may implement this section by means
of all facility letters, or similar instructions, without taking
further regulatory action.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.