BILL NUMBER: SB 1094 AMENDED
BILL TEXT
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, 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 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 5920. The Attorney General may require
the transferee to fulfill all representations made during the
application process, including those regarding levels of care.
(b) The Attorney General may amend the conditions after the
decision is issued, if either of the following occur:
(1) A party to An entity required to
comply with the conditions contained in 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 entity and shall be made within three
years of the discovery of the misrepresentation by the Attorney
General .
(2) A party to An entity required to
comply with the conditions contained in 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
entity and shall be necessary to mitigate, and to provide
appropriate restitution for, the effects of the violation.
(c) An amended condition pursuant to this section is subject to
judicial review pursuant to Section 1085 of the Code of Civil
Procedure.
(c)
(d) 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.