SB 1094, as amended, Lara. Health facilities: sale of assets: approval.
Existing law requires any nonprofit corporation that is subject to the Nonprofit Public Benefit Corporation Law and is a health facility, as defined, or is a facility that provides similar health care, operates or controls a health facility or operates or controls a facility that provides similar health care, to provide written notice to, and obtain the written consent of, the Attorney General prior to selling or otherwise disposing of a material amount of its assets to a for-profit corporation or entity or to a mutual benefit corporation or entity. Existing law requires the Attorney General to conduct one or more public meetings prior to issuing its decision whether to consent to the proposed agreement or transaction, and, in any case, to issue its decision within 60 days of the receipt of the written notice from the public benefit corporation, subject to one additional 45-day extension under specified circumstances.
This bill would instead require the Attorney General to issue its decision withinbegin delete 60end deletebegin insert 90end insert days of the receipt of the written notice from the public benefit corporation. The bill would additionally authorize the Attorney General to enforce conditions imposed on the approval of an agreement or transaction, and to require the transferee to fulfill all representations made during the application process, as specified. The bill would authorize the Attorney General to amend the conditions after the decision is issued under specified circumstances. The bill would additionally provide that once the agreement or transaction is closed, the parties to the transaction are deemed to have explicitly and implicitly consented to the applicability and
compliance with each conditionbegin insert, except for an amended condition,end insert set forth by the Attorney General, as specified.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 5915 of the Corporations Code is
2amended to read:
Within 90 days of the receipt of the written notice
4required by Section 5914, the Attorney General shall notify the
5public benefit corporation in writing of the decision to consent to,
6give conditional consent to, or not consent to the agreement or
7transaction. The Attorney General may extend this period for one
8additional 45-day period if any of the following conditions are
9satisfied:
10(a) The extension is necessary to obtain information pursuant
11to subdivision (a) of Section 5919.
12(b) The proposed agreement or transaction is substantially
13modified after the first public meeting conducted by the Attorney
14General
in accordance with Section 5916.
15(c) The proposed agreement or transaction involves a
16multifacility health system serving multiple communities, rather
17than a single facility.
Section 5921 of the Corporations Code is amended to
19read:
Within 90 days of the receipt of the written notice
21required by Section 5920, the Attorney General shall notify the
22nonprofit corporation in writing of the decision to consent to, give
23conditional consent to, or not consent to the agreement or
24transaction. The Attorney General may extend this period for one
25additional 45-day period if any of the following conditions are
26satisfied:
27(a) The extension is necessary to obtain relevant information
28from any state agency, experts, or consultants.
P3 1(b) The proposed agreement or transaction is substantially
2modified after the first public meeting conducted by the
Attorney
3General in accordance with Section 5922.
4(c) The proposed agreement or transaction involves a
5multifacility health system serving multiple communities, rather
6than a single facility.
Section 5926 is added to the Corporations Code, to
8read:
(a) The Attorney General may enforce conditions
10imposed on the Attorney General’s approval of an agreement or
11transaction pursuant to Section 5914 orbegin delete Sectionend delete 5920. The Attorney
12General may require the transferee to fulfill all representations
13made during the application process, including those regarding
14levels of care.begin delete Theend delete
15begin insert(b)end insertbegin insert end insertbegin insertTheend insert
Attorney General may amend the conditions after the
16decision is issued, ifbegin delete anyend deletebegin insert eitherend insert of the following occur:
17(1) A party to the transaction or agreement made material
18misrepresentations to the Attorney General.begin insert An amended condition
19imposed by the Attorney General pursuant to this paragraph shall
20be substantially related to the material misrepresentation made
21by the party to the transaction.end insert
22(2) A change in the circumstances has occurred that could not
23have reasonably been foreseen at the time of the Attorney General’s
24decision.
18 25(3)
end delete
26begin insert(2)end insert A party to the transaction or agreement violated the
27conditions set forth in the Attorney General’s decision.begin insert An amended
28condition imposed by the Attorney General pursuant to this
29paragraph shall be substantially related to the violation made by
30the party to the transaction and shall be necessary to mitigate,
31and to provide appropriate restitution for, the effects of the
32violation.end insert
33(b)
end delete
34begin insert(c)end insert Nothing in this provision precludes the Attorney General
35from pursuing any other available legal remedies.
Section 5927 is added to the Corporations Code, to
37read:
Once the agreement or transaction pursuant to Section
395914 orbegin delete Sectionend delete 5920 is closed, the parties to the transaction are
40deemed to have explicitly and implicitly consented to the
P4 1applicability and compliance with each condition set forth in the
2Attorney General’s consent, and to have waived any right to seek
3judicial relief with respect to each condition set forth in the
4Attorney General’s consent.begin insert This section shall not apply to an
5amended condition imposed by the Attorney General pursuant to
6subdivision (b) of Section 5926.end insert
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