Bill Text: CA AB2637 | 2023-2024 | Regular Session | Enrolled
Bill Title: Health Facilities Financing Authority Act.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2024-09-22 - Vetoed by Governor. [AB2637 Detail]
Download: California-2023-AB2637-Enrolled.html
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Enrolled
August 19, 2024 |
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Passed
IN
Senate
August 12, 2024 |
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Passed
IN
Assembly
August 15, 2024 |
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Amended
IN
Senate
June 05, 2024 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 2637
| Introduced by Assembly Member Schiavo |
February 14, 2024 |
An act to amend Sections 15432 and 15437 of, and to repeal Section 15451.5 of, the Government Code, relating to health facilities, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 2637, Schiavo.
Health Facilities Financing Authority Act.
The California Health Facilities Financing Authority Act authorizes the California Health Facilities Financing Authority to, among other things, 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 requires the authority to, among other things, establish financial eligibility standards by studying the creditworthiness and earning capacity of each project, together with the amount of pledged revenues, debt service coverage, and basic security. Under existing law, participating health institutions are specified entities authorized by state law to provide or operate a health facility and undertake
the financing or refinancing of the construction or acquisition of a project or of working capital, as defined. Existing law defines “working capital” as moneys to be used by, or on behalf of, a participating health institution for specified expenses in connection with the ownership or operation of a health facility, including interest not to exceed two years on any loan for working capital made pursuant to these provisions. Existing law requires a participating health institution that is a private nonprofit corporation or association and that borrows money to finance working capital to repay and discharge the loan within 24 months of the loan date.
This bill would change the definition of “working capital” to remove the 2-year cap on interest on any loan for working capital. The bill would delete the provision requiring a participating health institution that is a private nonprofit corporation or association to repay and discharge a loan for working capital within
24 months. The bill would also further require the authority to establish financial eligibility standards for working capital loans by studying the creditworthiness of a participating health institution, together with the amount of pledged revenues, debt service coverage, and basic security. The bill would prohibit a participating health institution that is determined by the authority to be in financial distress from being deemed financially eligible.
By expanding the purpose for which the above-described continuously appropriated fund may be used, the bill would make an appropriation from that fund. The bill would make legislative findings relating to the purpose of the bill.
Digest Key
Vote: MAJORITY Appropriation: YES Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares that the purpose of this act is to enable nonprofit participating health institutions finance working capital expenditures, such as those arising as a result of the COVID-19 pandemic, on a long-term basis.SEC. 2.
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 a 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 of 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) A 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 care 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 60 years of age or older.
(10) A child daycare facility
operated in conjunction with a health facility. A child daycare 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 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) A residential care facility for the elderly, as defined in Section 1569.2 of the Health and Safety Code.
(B) This paragraph shall not be construed as affecting the licensing of health facilities under Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code, or any other provisions relating to health facilities, except as the term “health facility” is interpreted for purposes of the California Health Facilities Financing Authority Act under this part. The designation of a residential care facility for the elderly as a health facility, as made pursuant to this paragraph, shall apply to this part only.
(21) A nonpublic school that provides educational services in conjunction
with a health facility, as defined in paragraphs (1) to (20), inclusive, that otherwise qualifies for financing pursuant to this part, if the nonpublic school is certified pursuant to Sections 56366 and 56366.1 of the Education Code as meeting standards relating to the required special education and specified related services and facilities for 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 (21), inclusive, of this subdivision: a laboratory,
laundry, 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 or a nonprofit corporation that controls or manages, is controlled or managed by, is under common control or management with, or is affiliated with any of the foregoing, and that, pursuant to this part, undertakes 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” or “bond” means a 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 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. 3.
Section 15437 of the Government Code is amended to read:15437.
(a) The provisions of this part shall be administered by the authority, which shall have and is hereby vested with all powers reasonably necessary to carry out the powers and responsibilities expressly granted or imposed under this part.(b) The authority shall establish financial eligibility standards by studying the creditworthiness and earning capacity of each project, together with the amount of pledged revenues, debt service coverage, and basic security.
(c) The authority shall establish financial eligibility standards for working capital loans by studying the
creditworthiness of a participating health institution, together with the amount of pledged revenues, debt service coverage, and basic security. A participating health institution that is determined by the authority to be in financial distress shall not be deemed financially eligible.
