Bill Text: CA SB1094 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

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-Amended.html

---

BILL NUMBER: SB 1094	AMENDED
	BILL TEXT

	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, 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 within  60   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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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  Section  5920. The
Attorney General may require the transferee to fulfill all
representations made during the application process, including those
regarding levels of care.  The 
    (b)     The  Attorney General may
amend the conditions after the decision is issued, if  any
  either  of the following occur:
   (1) A party to the transaction or agreement made material
misrepresentations to the Attorney General.  An amended condition
imposed by the Attorney General pursuant to this paragraph shall be
substantially related to the material misrepresentation made by the
party to the transaction.  
   (2) A change in the circumstances has occurred that could not have
reasonably been foreseen at the time of the Attorney General's
decision.  
   (3) 
    (2)  A party to the transaction or agreement violated
the conditions set forth in the Attorney General's decision.  An
amended condition imposed by the Attorney General pursuant to this
paragraph shall be substantially related to the violation made by the
party to the transaction and shall be necessary to mitigate, and to
provide appropriate restitution for, the effects of the violation.
 
   (b) 
    (c)  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  Section  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.