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

California Senate Bill 1094 (Prior Session Legislation)

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 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, as amended, Lara.  Health  
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  and is a
health facility, as defined, or is a facility that provides similar
health care,   that  operates or controls a health
facility  , as defined,  or operates or controls a facility
that provides similar health  care,   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   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.
   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   a  transferee to fulfill all
representations  material to the enforcement of the conditions
 made during the  application   Attorney
  General's review  process, including those regarding
 levels of care.   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 
contained in   imposed on the   Attorney
General's approval of  the transaction or agreement 
made   makes  material misrepresentations to the
Attorney General. An amended condition imposed by the Attorney
General pursuant to this paragraph shall  be  
meet the following requirements: 
    (A)     The condition shall be 
substantially related to the material misrepresentation made by the
 entity and shall   entity. 
    (B)     The condition shall  be made
within  three years of the discovery of the misrepresentation
by the Attorney General.   10 years of the completion
of an agreement or transaction pursuant to Section 5914 or 5920.

   (2) An entity required to comply with the conditions 
contained in   imposed on the Attorney General's
approval of  the transaction or agreement  violated
  violates  the conditions set forth in the
Attorney General's decision. An amended condition imposed by the
Attorney General pursuant to this paragraph shall  be
  meet the following requirements: 
    (A)     The condition shall be 
substantially related to the violation made by the  entity
and shall be   entity. 
    (B)     The condition 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.
   (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.