California Senate Bill SB1094 Amended / Bill

 BILL NUMBER: SB 1094AMENDED 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.