Bill Text: CA SB1094 | 2013-2014 | Regular Session | Enrolled
Bill Title: Nonprofit health facilities: sale of assets: Attorney
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2014-09-29 - In Senate. Consideration of Governor's veto pending. [SB1094 Detail]
Download: California-2013-SB1094-Enrolled.html
BILL NUMBER: SB 1094 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 29, 2014
PASSED THE ASSEMBLY AUGUST 28, 2014
AMENDED IN ASSEMBLY AUGUST 22, 2014
AMENDED IN ASSEMBLY AUGUST 13, 2014
AMENDED IN ASSEMBLY AUGUST 4, 2014
AMENDED IN SENATE APRIL 21, 2014
INTRODUCED BY Senator Lara
FEBRUARY 19, 2014
An act to amend Sections 5915 and 5921 of, and to add Sections
5926 and 5927 to, the Corporations Code, relating to health
facilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 1094, Lara. Nonprofit health facilities: sale of assets:
Attorney General approval.
Existing law requires any nonprofit corporation that is subject to
the Nonprofit Public Benefit Corporation Law that operates or
controls a health facility, as defined, 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, to a mutual benefit corporation
or entity, or to another nonprofit 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 within 90 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 condition, except for an
amended condition, set forth by the Attorney General, as specified.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 5915 of the Corporations Code is amended to
read:
5915. Within 90 days of the receipt of the written notice
required by Section 5914, the Attorney General shall notify the
public benefit corporation in writing of the decision to consent to,
give conditional consent to, or not consent to the agreement or
transaction. The Attorney General may extend this period for one
additional 45-day period if any of the following conditions are
satisfied:
(a) The extension is necessary to obtain information pursuant to
subdivision (a) of Section 5919.
(b) The proposed agreement or transaction is substantially
modified after the first public meeting conducted by the Attorney
General in accordance with Section 5916.
(c) The proposed agreement or transaction involves a multifacility
health system serving multiple communities, rather than a single
facility.
SEC. 2. Section 5921 of the Corporations Code is amended to read:
5921. Within 90 days of the receipt of the written notice
required by Section 5920, the Attorney General shall notify the
nonprofit corporation in writing of the decision to consent to, give
conditional consent to, or not consent to the agreement or
transaction. The Attorney General may extend this period for one
additional 45-day period if any of the following conditions are
satisfied:
(a) The extension is necessary to obtain relevant information from
any state agency, experts, or consultants.
(b) The proposed agreement or transaction is substantially
modified after the first public meeting conducted by the Attorney
General in accordance with Section 5922.
(c) The proposed agreement or transaction involves a multifacility
health system serving multiple communities, rather than a single
facility.
SEC. 3. Section 5926 is added to the Corporations Code, to read:
5926. (a) The Attorney General may enforce conditions imposed on
the Attorney General's approval of an agreement or transaction
pursuant to Section 5914 or 5920. The Attorney General may require a
transferee to fulfill all representations material to the enforcement
of the conditions made during the Attorney General's review process,
including those regarding the availability or accessibility of
health care services to the affected community.
(b) The Attorney General may amend the conditions after the
decision is issued, if either of the following occur:
(1) An entity required to comply with the conditions imposed on
the Attorney General's approval of the transaction or agreement makes
material misrepresentations to the Attorney General. An amended
condition imposed by the Attorney General pursuant to this paragraph
shall meet the following requirements:
(A) The condition shall be substantially related to the material
misrepresentation made by the entity.
(B) The condition shall be made within 5 years of the completion
of an agreement or transaction pursuant to Section 5914 or 5920.
(2) An entity required to comply with the conditions imposed on
the Attorney General's approval of the transaction or agreement
violates the conditions set forth in the Attorney General's decision.
An amended condition imposed by the Attorney General pursuant to
this paragraph shall meet the following requirements:
(A) The condition shall be substantially related to the violation
made by the entity.
(B) The condition shall be necessary to mitigate, and to provide
appropriate restitution for, the effects of the violation.
(c) The Attorney General may impose an amended condition pursuant
to subdivision (b) by providing the parties to the agreement or
transaction written notice of the proposed condition pursuant to
paragraph (1) or (2) of subdivision (b). The parties to the agreement
or transaction shall have 30 days from the date of the Attorney
General's notice to provide a written response to the Attorney
General. Within 30 days of receiving the parties' response, the
Attorney General may:
(1) Withdraw the written notice without prejudice.
(2) Meet and confer in good faith with the parties to the
transaction or agreement.
(3) Impose an amended condition pursuant to subdivision (b).
(d) An amended condition pursuant to this section is subject to
judicial review pursuant to Section 1085 of the Code of Civil
Procedure.
(e) Nothing in this provision precludes the Attorney General from
pursuing any other available legal remedies.
SEC. 4. Section 5927 is added to the Corporations Code, to read:
5927. Once the agreement or transaction pursuant to Section 5914
or 5920 is closed, the parties to the transaction are deemed to have
explicitly and implicitly consented to the applicability and
compliance with each condition set forth in the Attorney General's
consent, and to have waived any right to seek judicial relief with
respect to each condition set forth in the Attorney General's
consent. This section shall not apply to an amended condition imposed
by the Attorney General pursuant to subdivision (b) of Section 5926.
