Amended IN Senate June 17, 2019 Amended IN Assembly March 19, 2019 CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Assembly Bill No. 1404Introduced by Assembly Member SantiagoFebruary 22, 2019 An act to amend Section 1347.15 of the Health and Safety Code, relating to managed health care. An act to add Part 12 (commencing with Section 10850) to Division 2 of Title 1 of the Corporations Code, relating to nonprofits.LEGISLATIVE COUNSEL'S DIGESTAB 1404, as amended, Santiago. Department of Managed Health Care: Financial Solvency Standards Board. Nonprofit: reporting obligations.Existing law, the Nonprofit Corporation Law, regulates the organization and operation of nonprofit public benefit corporations, nonprofit mutual benefit corporations, and nonprofit religious corporations, including, but not limited to, health care service plans. That law requires a nonprofit public benefit corporation to furnish annually to its members a report that includes the assets and liabilities of the corporation, revenue or receipts of the corporation, and the expenses or disbursements of the corporation.This bill would require a nonprofit sponsor to make an annual disclosure at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990 to the Secretary of State that includes information about the total amount of deferred compensation allocated by the nonprofit sponsor, the name and title of each listed person, as defined, receiving deferred compensation allocated by the nonprofit sponsor, whether taxes were paid on the deferred compensation, and the document governing the deferred compensation. The bill defines nonprofit sponsor as a nonprofit corporation that operates or controls a health facility or a facility that provides similar health care or that contracts to provide or arrange for the provision of medical services. The bill would require the Secretary of State to make these disclosures available and open to the public for inspection.This bill would require a nonprofit sponsor to certify information that it provided to the Secretary of State. By requiring the certification of information, this bill would expand the existing crime of perjury and impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Existing law establishes the Department of Managed Health Care, which, among other duties, ensures the financial stability of managed care plans. Existing law establishes, within the department, the Financial Solvency Standards Board, which is comprised of the director of the department and 7 members, appointed by the director. Existing law authorizes the 7 appointed members to be from specified subject areas or fields, including, but not limited to, medical and health care economics, accountancy, with experience in integrated or affiliated health care delivery systems, and management and administration in integrated or affiliated health care delivery systems.This bill would add 2 appointed members to the board. The bill would also include large group health insurance purchasing and a representative of health care consumers in the list of subject areas or fields from which the director may choose board members.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOYES Bill TextThe people of the State of California do enact as follows:SECTION 1. Part 12 (commencing with Section 10850) is added to Division 2 of Title 1 of the Corporations Code, to read:PART 12. Reporting Obligations Regarding Deferred Compensation Allocated by Nonprofit Sponsors to For Profit Recipients10850. This part applies to nonprofit sponsors that allocate deferred compensation to any listed person at a recipient for profit.10851. For the purposes of this part:(a) Allocate means to hold, reserve, designate, provide, use or intend to use assets, whether or not the assets are held in trust, legally segregated, or restricted.(b) Deferred compensation means a pension, profit-sharing, share bonus, share purchase, share option, savings, thrift, and other retirement, incentive, and benefit plans, trusts, insurance, or any other form of deferred compensation or retirement benefits for any listed person that is both of the following:(1) Described in any audited financials, bond documents, Internal Revenue Service Form 990s, or other official disclosures. (2) Exempt from the Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.), as amended (ERISA), including, but not limited to, those indicating that the benefits or arrangements are not subject to ERISA or non-ERISA.(c) Listed person means a current or former officer, director, employer, or trustee, whether an individual or entity, with over two hundred fifty thousand dollars ($250,000) in reportable compensation, that is or was employed by, contracted with, or a partner in, any recipient for profit.(d) Nonprofit sponsor means a nonprofit corporation that is defined in Section 5046 and does one of the following:(1) Operates or controls a health facility, as defined in Section 1250 of the Health and Safety Code.(2) Operates or controls a facility that provides similar health care to a health facility, as defined in Section 1250 of the Health and Safety Code.(3) Contracts to provide or arrange for the provision of medical services.(e) Recipient for profit means any for-profit entity that employs, contracts with, comprises a partnership of, or otherwise uses the services of any listed person for which the nonprofit sponsor allocates deferred compensation.(f) Reportable compensation means compensation reported on any of the following:(1) Internal Revenue Service Form W-2, Box 1 or 5, whichever amount is greater, or Box 11.(2) Internal Revenue Service Form 1099-MISC, Boxes 6 and 7.(3) Internal Revenue Service Form 1065, Schedule K-1, Box 14, including, but not limited to, base compensation, bonus and incentive compensation, and other nontaxable benefits.10852. (a) Notwithstanding, and in addition to, any other law, a nonprofit sponsor subject to this part under Section 10850 shall make the following annual disclosures to the Secretary of State at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990:(1) The total amount of deferred compensation allocated by the nonprofit sponsor.(2) The name and title of each listed person receiving deferred compensation allocated by a nonprofit sponsor, the total amount and type of the compensation paid to each listed person, and reportable compensation, including base compensation, bonus and incentive compensation, other reportable compensation, and other nontaxable benefits.(3) Whether taxes were paid on the deferred compensation.(4) The applicable plan document, summary plan description, trust agreement, and any other agreement or legal document governing the deferred compensation.(b) The nonprofit sponsor subject to this part shall make the disclosures required pursuant to this section within 30 days of the conclusion of the nonprofit sponsors taxable year, on a form prescribed by the Secretary of State.(c) The Secretary of State shall make all disclosures required pursuant to this section available and open to the public for inspection. The Secretary of State shall provide access to all information contained in this statement by means of an online database.(d) A nonprofit sponsor subject to this part shall certify that the information it provides pursuant to this section is true and correct. A claim may not be made against the state for inaccurate information contained in statements filed under this section with the Secretary of State.SEC. 2. The provisions of this part are severable. If any provision of this part or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.SECTION 1.Section 1347.15 of the Health and Safety Code is amended to read:1347.15.(a)There is hereby established in the Department of Managed Health Care the Financial Solvency Standards Board composed of ten members. The members shall consist of the director, or the directors designee, and nine members appointed by the director. The nine members appointed by the director may be, but are not necessarily limited to, individuals with training and experience in the following subject areas or fields: medical and health care economics; accountancy, with experience in integrated or affiliated health care delivery systems; excess loss insurance underwriting in the medical, hospital, and health plan business; actuarial studies in the area of health care delivery systems; management and administration in integrated or affiliated health care delivery systems; investment banking; information technology in integrated or affiliated health care delivery systems; large group health insurance purchasing; and a representative of health care consumers. The members appointed by the director shall be appointed for a term of three years, but may be removed or reappointed by the director before the expiration of the term.(b)The purpose of the board is to do all of the following:(1)Advise the director on matters of financial solvency affecting the delivery of health care services.(2)Develop and recommend to the director financial solvency requirements and standards relating to plan operations, plan-affiliate operations and transactions, plan-provider contractual relationships, and provider-affiliate operations and transactions.(3)Periodically monitor and report on the implementation and results of the financial solvency requirements and standards.(c)Financial solvency requirements and standards recommended to the director by the board may, after a period of review and comment not to exceed 45 days, be noticed for adoption as regulations as proposed or modified under the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). During the directors 45-day review and comment period, the director, in consultation with the board, may postpone the adoption of the requirements and standards pending further review and comment. This subdivision does not prohibit the director from adopting regulations, including emergency regulations, under the rulemaking provisions of the Administrative Procedure Act.(d)The board shall meet at least quarterly and at the call of the chair. In order to preserve the independence of the board, the director shall not serve as chair. The members of the board may establish their own rules and procedures. All members shall serve without compensation, but shall be reimbursed from department funds for expenses actually and necessarily incurred in the performance of their duties.(e)For purposes of this section, board means the Financial Solvency Standards Board.
Amended IN Senate June 17, 2019 Amended IN Assembly March 19, 2019 CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Assembly Bill No. 1404Introduced by Assembly Member SantiagoFebruary 22, 2019 An act to amend Section 1347.15 of the Health and Safety Code, relating to managed health care. An act to add Part 12 (commencing with Section 10850) to Division 2 of Title 1 of the Corporations Code, relating to nonprofits.LEGISLATIVE COUNSEL'S DIGESTAB 1404, as amended, Santiago. Department of Managed Health Care: Financial Solvency Standards Board. Nonprofit: reporting obligations.Existing law, the Nonprofit Corporation Law, regulates the organization and operation of nonprofit public benefit corporations, nonprofit mutual benefit corporations, and nonprofit religious corporations, including, but not limited to, health care service plans. That law requires a nonprofit public benefit corporation to furnish annually to its members a report that includes the assets and liabilities of the corporation, revenue or receipts of the corporation, and the expenses or disbursements of the corporation.This bill would require a nonprofit sponsor to make an annual disclosure at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990 to the Secretary of State that includes information about the total amount of deferred compensation allocated by the nonprofit sponsor, the name and title of each listed person, as defined, receiving deferred compensation allocated by the nonprofit sponsor, whether taxes were paid on the deferred compensation, and the document governing the deferred compensation. The bill defines nonprofit sponsor as a nonprofit corporation that operates or controls a health facility or a facility that provides similar health care or that contracts to provide or arrange for the provision of medical services. The bill would require the Secretary of State to make these disclosures available and open to the public for inspection.This bill would require a nonprofit sponsor to certify information that it provided to the Secretary of State. By requiring the certification of information, this bill would expand the existing crime of perjury and impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Existing law establishes the Department of Managed Health Care, which, among other duties, ensures the financial stability of managed care plans. Existing law establishes, within the department, the Financial Solvency Standards Board, which is comprised of the director of the department and 7 members, appointed by the director. Existing law authorizes the 7 appointed members to be from specified subject areas or fields, including, but not limited to, medical and health care economics, accountancy, with experience in integrated or affiliated health care delivery systems, and management and administration in integrated or affiliated health care delivery systems.This bill would add 2 appointed members to the board. The bill would also include large group health insurance purchasing and a representative of health care consumers in the list of subject areas or fields from which the director may choose board members.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOYES
Amended IN Senate June 17, 2019 Amended IN Assembly March 19, 2019
Amended IN Senate June 17, 2019
Amended IN Assembly March 19, 2019
CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION
Assembly Bill No. 1404
Introduced by Assembly Member SantiagoFebruary 22, 2019
Introduced by Assembly Member Santiago
February 22, 2019
An act to amend Section 1347.15 of the Health and Safety Code, relating to managed health care. An act to add Part 12 (commencing with Section 10850) to Division 2 of Title 1 of the Corporations Code, relating to nonprofits.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 1404, as amended, Santiago. Department of Managed Health Care: Financial Solvency Standards Board. Nonprofit: reporting obligations.
Existing law, the Nonprofit Corporation Law, regulates the organization and operation of nonprofit public benefit corporations, nonprofit mutual benefit corporations, and nonprofit religious corporations, including, but not limited to, health care service plans. That law requires a nonprofit public benefit corporation to furnish annually to its members a report that includes the assets and liabilities of the corporation, revenue or receipts of the corporation, and the expenses or disbursements of the corporation.This bill would require a nonprofit sponsor to make an annual disclosure at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990 to the Secretary of State that includes information about the total amount of deferred compensation allocated by the nonprofit sponsor, the name and title of each listed person, as defined, receiving deferred compensation allocated by the nonprofit sponsor, whether taxes were paid on the deferred compensation, and the document governing the deferred compensation. The bill defines nonprofit sponsor as a nonprofit corporation that operates or controls a health facility or a facility that provides similar health care or that contracts to provide or arrange for the provision of medical services. The bill would require the Secretary of State to make these disclosures available and open to the public for inspection.This bill would require a nonprofit sponsor to certify information that it provided to the Secretary of State. By requiring the certification of information, this bill would expand the existing crime of perjury and impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Existing law establishes the Department of Managed Health Care, which, among other duties, ensures the financial stability of managed care plans. Existing law establishes, within the department, the Financial Solvency Standards Board, which is comprised of the director of the department and 7 members, appointed by the director. Existing law authorizes the 7 appointed members to be from specified subject areas or fields, including, but not limited to, medical and health care economics, accountancy, with experience in integrated or affiliated health care delivery systems, and management and administration in integrated or affiliated health care delivery systems.This bill would add 2 appointed members to the board. The bill would also include large group health insurance purchasing and a representative of health care consumers in the list of subject areas or fields from which the director may choose board members.
Existing law, the Nonprofit Corporation Law, regulates the organization and operation of nonprofit public benefit corporations, nonprofit mutual benefit corporations, and nonprofit religious corporations, including, but not limited to, health care service plans. That law requires a nonprofit public benefit corporation to furnish annually to its members a report that includes the assets and liabilities of the corporation, revenue or receipts of the corporation, and the expenses or disbursements of the corporation.
This bill would require a nonprofit sponsor to make an annual disclosure at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990 to the Secretary of State that includes information about the total amount of deferred compensation allocated by the nonprofit sponsor, the name and title of each listed person, as defined, receiving deferred compensation allocated by the nonprofit sponsor, whether taxes were paid on the deferred compensation, and the document governing the deferred compensation. The bill defines nonprofit sponsor as a nonprofit corporation that operates or controls a health facility or a facility that provides similar health care or that contracts to provide or arrange for the provision of medical services. The bill would require the Secretary of State to make these disclosures available and open to the public for inspection.
This bill would require a nonprofit sponsor to certify information that it provided to the Secretary of State. By requiring the certification of information, this bill would expand the existing crime of perjury and impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law establishes the Department of Managed Health Care, which, among other duties, ensures the financial stability of managed care plans. Existing law establishes, within the department, the Financial Solvency Standards Board, which is comprised of the director of the department and 7 members, appointed by the director. Existing law authorizes the 7 appointed members to be from specified subject areas or fields, including, but not limited to, medical and health care economics, accountancy, with experience in integrated or affiliated health care delivery systems, and management and administration in integrated or affiliated health care delivery systems.
This bill would add 2 appointed members to the board. The bill would also include large group health insurance purchasing and a representative of health care consumers in the list of subject areas or fields from which the director may choose board members.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Part 12 (commencing with Section 10850) is added to Division 2 of Title 1 of the Corporations Code, to read:PART 12. Reporting Obligations Regarding Deferred Compensation Allocated by Nonprofit Sponsors to For Profit Recipients10850. This part applies to nonprofit sponsors that allocate deferred compensation to any listed person at a recipient for profit.10851. For the purposes of this part:(a) Allocate means to hold, reserve, designate, provide, use or intend to use assets, whether or not the assets are held in trust, legally segregated, or restricted.(b) Deferred compensation means a pension, profit-sharing, share bonus, share purchase, share option, savings, thrift, and other retirement, incentive, and benefit plans, trusts, insurance, or any other form of deferred compensation or retirement benefits for any listed person that is both of the following:(1) Described in any audited financials, bond documents, Internal Revenue Service Form 990s, or other official disclosures. (2) Exempt from the Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.), as amended (ERISA), including, but not limited to, those indicating that the benefits or arrangements are not subject to ERISA or non-ERISA.(c) Listed person means a current or former officer, director, employer, or trustee, whether an individual or entity, with over two hundred fifty thousand dollars ($250,000) in reportable compensation, that is or was employed by, contracted with, or a partner in, any recipient for profit.(d) Nonprofit sponsor means a nonprofit corporation that is defined in Section 5046 and does one of the following:(1) Operates or controls a health facility, as defined in Section 1250 of the Health and Safety Code.(2) Operates or controls a facility that provides similar health care to a health facility, as defined in Section 1250 of the Health and Safety Code.(3) Contracts to provide or arrange for the provision of medical services.(e) Recipient for profit means any for-profit entity that employs, contracts with, comprises a partnership of, or otherwise uses the services of any listed person for which the nonprofit sponsor allocates deferred compensation.(f) Reportable compensation means compensation reported on any of the following:(1) Internal Revenue Service Form W-2, Box 1 or 5, whichever amount is greater, or Box 11.(2) Internal Revenue Service Form 1099-MISC, Boxes 6 and 7.(3) Internal Revenue Service Form 1065, Schedule K-1, Box 14, including, but not limited to, base compensation, bonus and incentive compensation, and other nontaxable benefits.10852. (a) Notwithstanding, and in addition to, any other law, a nonprofit sponsor subject to this part under Section 10850 shall make the following annual disclosures to the Secretary of State at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990:(1) The total amount of deferred compensation allocated by the nonprofit sponsor.(2) The name and title of each listed person receiving deferred compensation allocated by a nonprofit sponsor, the total amount and type of the compensation paid to each listed person, and reportable compensation, including base compensation, bonus and incentive compensation, other reportable compensation, and other nontaxable benefits.(3) Whether taxes were paid on the deferred compensation.(4) The applicable plan document, summary plan description, trust agreement, and any other agreement or legal document governing the deferred compensation.(b) The nonprofit sponsor subject to this part shall make the disclosures required pursuant to this section within 30 days of the conclusion of the nonprofit sponsors taxable year, on a form prescribed by the Secretary of State.(c) The Secretary of State shall make all disclosures required pursuant to this section available and open to the public for inspection. The Secretary of State shall provide access to all information contained in this statement by means of an online database.(d) A nonprofit sponsor subject to this part shall certify that the information it provides pursuant to this section is true and correct. A claim may not be made against the state for inaccurate information contained in statements filed under this section with the Secretary of State.SEC. 2. The provisions of this part are severable. If any provision of this part or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.SECTION 1.Section 1347.15 of the Health and Safety Code is amended to read:1347.15.(a)There is hereby established in the Department of Managed Health Care the Financial Solvency Standards Board composed of ten members. The members shall consist of the director, or the directors designee, and nine members appointed by the director. The nine members appointed by the director may be, but are not necessarily limited to, individuals with training and experience in the following subject areas or fields: medical and health care economics; accountancy, with experience in integrated or affiliated health care delivery systems; excess loss insurance underwriting in the medical, hospital, and health plan business; actuarial studies in the area of health care delivery systems; management and administration in integrated or affiliated health care delivery systems; investment banking; information technology in integrated or affiliated health care delivery systems; large group health insurance purchasing; and a representative of health care consumers. The members appointed by the director shall be appointed for a term of three years, but may be removed or reappointed by the director before the expiration of the term.(b)The purpose of the board is to do all of the following:(1)Advise the director on matters of financial solvency affecting the delivery of health care services.(2)Develop and recommend to the director financial solvency requirements and standards relating to plan operations, plan-affiliate operations and transactions, plan-provider contractual relationships, and provider-affiliate operations and transactions.(3)Periodically monitor and report on the implementation and results of the financial solvency requirements and standards.(c)Financial solvency requirements and standards recommended to the director by the board may, after a period of review and comment not to exceed 45 days, be noticed for adoption as regulations as proposed or modified under the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). During the directors 45-day review and comment period, the director, in consultation with the board, may postpone the adoption of the requirements and standards pending further review and comment. This subdivision does not prohibit the director from adopting regulations, including emergency regulations, under the rulemaking provisions of the Administrative Procedure Act.(d)The board shall meet at least quarterly and at the call of the chair. In order to preserve the independence of the board, the director shall not serve as chair. The members of the board may establish their own rules and procedures. All members shall serve without compensation, but shall be reimbursed from department funds for expenses actually and necessarily incurred in the performance of their duties.(e)For purposes of this section, board means the Financial Solvency Standards Board.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Part 12 (commencing with Section 10850) is added to Division 2 of Title 1 of the Corporations Code, to read:PART 12. Reporting Obligations Regarding Deferred Compensation Allocated by Nonprofit Sponsors to For Profit Recipients10850. This part applies to nonprofit sponsors that allocate deferred compensation to any listed person at a recipient for profit.10851. For the purposes of this part:(a) Allocate means to hold, reserve, designate, provide, use or intend to use assets, whether or not the assets are held in trust, legally segregated, or restricted.(b) Deferred compensation means a pension, profit-sharing, share bonus, share purchase, share option, savings, thrift, and other retirement, incentive, and benefit plans, trusts, insurance, or any other form of deferred compensation or retirement benefits for any listed person that is both of the following:(1) Described in any audited financials, bond documents, Internal Revenue Service Form 990s, or other official disclosures. (2) Exempt from the Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.), as amended (ERISA), including, but not limited to, those indicating that the benefits or arrangements are not subject to ERISA or non-ERISA.(c) Listed person means a current or former officer, director, employer, or trustee, whether an individual or entity, with over two hundred fifty thousand dollars ($250,000) in reportable compensation, that is or was employed by, contracted with, or a partner in, any recipient for profit.(d) Nonprofit sponsor means a nonprofit corporation that is defined in Section 5046 and does one of the following:(1) Operates or controls a health facility, as defined in Section 1250 of the Health and Safety Code.(2) Operates or controls a facility that provides similar health care to a health facility, as defined in Section 1250 of the Health and Safety Code.(3) Contracts to provide or arrange for the provision of medical services.(e) Recipient for profit means any for-profit entity that employs, contracts with, comprises a partnership of, or otherwise uses the services of any listed person for which the nonprofit sponsor allocates deferred compensation.(f) Reportable compensation means compensation reported on any of the following:(1) Internal Revenue Service Form W-2, Box 1 or 5, whichever amount is greater, or Box 11.(2) Internal Revenue Service Form 1099-MISC, Boxes 6 and 7.(3) Internal Revenue Service Form 1065, Schedule K-1, Box 14, including, but not limited to, base compensation, bonus and incentive compensation, and other nontaxable benefits.10852. (a) Notwithstanding, and in addition to, any other law, a nonprofit sponsor subject to this part under Section 10850 shall make the following annual disclosures to the Secretary of State at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990:(1) The total amount of deferred compensation allocated by the nonprofit sponsor.(2) The name and title of each listed person receiving deferred compensation allocated by a nonprofit sponsor, the total amount and type of the compensation paid to each listed person, and reportable compensation, including base compensation, bonus and incentive compensation, other reportable compensation, and other nontaxable benefits.(3) Whether taxes were paid on the deferred compensation.(4) The applicable plan document, summary plan description, trust agreement, and any other agreement or legal document governing the deferred compensation.(b) The nonprofit sponsor subject to this part shall make the disclosures required pursuant to this section within 30 days of the conclusion of the nonprofit sponsors taxable year, on a form prescribed by the Secretary of State.(c) The Secretary of State shall make all disclosures required pursuant to this section available and open to the public for inspection. The Secretary of State shall provide access to all information contained in this statement by means of an online database.(d) A nonprofit sponsor subject to this part shall certify that the information it provides pursuant to this section is true and correct. A claim may not be made against the state for inaccurate information contained in statements filed under this section with the Secretary of State.
SECTION 1. Part 12 (commencing with Section 10850) is added to Division 2 of Title 1 of the Corporations Code, to read:
### SECTION 1.
PART 12. Reporting Obligations Regarding Deferred Compensation Allocated by Nonprofit Sponsors to For Profit Recipients10850. This part applies to nonprofit sponsors that allocate deferred compensation to any listed person at a recipient for profit.10851. For the purposes of this part:(a) Allocate means to hold, reserve, designate, provide, use or intend to use assets, whether or not the assets are held in trust, legally segregated, or restricted.(b) Deferred compensation means a pension, profit-sharing, share bonus, share purchase, share option, savings, thrift, and other retirement, incentive, and benefit plans, trusts, insurance, or any other form of deferred compensation or retirement benefits for any listed person that is both of the following:(1) Described in any audited financials, bond documents, Internal Revenue Service Form 990s, or other official disclosures. (2) Exempt from the Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.), as amended (ERISA), including, but not limited to, those indicating that the benefits or arrangements are not subject to ERISA or non-ERISA.(c) Listed person means a current or former officer, director, employer, or trustee, whether an individual or entity, with over two hundred fifty thousand dollars ($250,000) in reportable compensation, that is or was employed by, contracted with, or a partner in, any recipient for profit.(d) Nonprofit sponsor means a nonprofit corporation that is defined in Section 5046 and does one of the following:(1) Operates or controls a health facility, as defined in Section 1250 of the Health and Safety Code.(2) Operates or controls a facility that provides similar health care to a health facility, as defined in Section 1250 of the Health and Safety Code.(3) Contracts to provide or arrange for the provision of medical services.(e) Recipient for profit means any for-profit entity that employs, contracts with, comprises a partnership of, or otherwise uses the services of any listed person for which the nonprofit sponsor allocates deferred compensation.(f) Reportable compensation means compensation reported on any of the following:(1) Internal Revenue Service Form W-2, Box 1 or 5, whichever amount is greater, or Box 11.(2) Internal Revenue Service Form 1099-MISC, Boxes 6 and 7.(3) Internal Revenue Service Form 1065, Schedule K-1, Box 14, including, but not limited to, base compensation, bonus and incentive compensation, and other nontaxable benefits.10852. (a) Notwithstanding, and in addition to, any other law, a nonprofit sponsor subject to this part under Section 10850 shall make the following annual disclosures to the Secretary of State at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990:(1) The total amount of deferred compensation allocated by the nonprofit sponsor.(2) The name and title of each listed person receiving deferred compensation allocated by a nonprofit sponsor, the total amount and type of the compensation paid to each listed person, and reportable compensation, including base compensation, bonus and incentive compensation, other reportable compensation, and other nontaxable benefits.(3) Whether taxes were paid on the deferred compensation.(4) The applicable plan document, summary plan description, trust agreement, and any other agreement or legal document governing the deferred compensation.(b) The nonprofit sponsor subject to this part shall make the disclosures required pursuant to this section within 30 days of the conclusion of the nonprofit sponsors taxable year, on a form prescribed by the Secretary of State.(c) The Secretary of State shall make all disclosures required pursuant to this section available and open to the public for inspection. The Secretary of State shall provide access to all information contained in this statement by means of an online database.(d) A nonprofit sponsor subject to this part shall certify that the information it provides pursuant to this section is true and correct. A claim may not be made against the state for inaccurate information contained in statements filed under this section with the Secretary of State.
PART 12. Reporting Obligations Regarding Deferred Compensation Allocated by Nonprofit Sponsors to For Profit Recipients10850. This part applies to nonprofit sponsors that allocate deferred compensation to any listed person at a recipient for profit.10851. For the purposes of this part:(a) Allocate means to hold, reserve, designate, provide, use or intend to use assets, whether or not the assets are held in trust, legally segregated, or restricted.(b) Deferred compensation means a pension, profit-sharing, share bonus, share purchase, share option, savings, thrift, and other retirement, incentive, and benefit plans, trusts, insurance, or any other form of deferred compensation or retirement benefits for any listed person that is both of the following:(1) Described in any audited financials, bond documents, Internal Revenue Service Form 990s, or other official disclosures. (2) Exempt from the Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.), as amended (ERISA), including, but not limited to, those indicating that the benefits or arrangements are not subject to ERISA or non-ERISA.(c) Listed person means a current or former officer, director, employer, or trustee, whether an individual or entity, with over two hundred fifty thousand dollars ($250,000) in reportable compensation, that is or was employed by, contracted with, or a partner in, any recipient for profit.(d) Nonprofit sponsor means a nonprofit corporation that is defined in Section 5046 and does one of the following:(1) Operates or controls a health facility, as defined in Section 1250 of the Health and Safety Code.(2) Operates or controls a facility that provides similar health care to a health facility, as defined in Section 1250 of the Health and Safety Code.(3) Contracts to provide or arrange for the provision of medical services.(e) Recipient for profit means any for-profit entity that employs, contracts with, comprises a partnership of, or otherwise uses the services of any listed person for which the nonprofit sponsor allocates deferred compensation.(f) Reportable compensation means compensation reported on any of the following:(1) Internal Revenue Service Form W-2, Box 1 or 5, whichever amount is greater, or Box 11.(2) Internal Revenue Service Form 1099-MISC, Boxes 6 and 7.(3) Internal Revenue Service Form 1065, Schedule K-1, Box 14, including, but not limited to, base compensation, bonus and incentive compensation, and other nontaxable benefits.10852. (a) Notwithstanding, and in addition to, any other law, a nonprofit sponsor subject to this part under Section 10850 shall make the following annual disclosures to the Secretary of State at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990:(1) The total amount of deferred compensation allocated by the nonprofit sponsor.(2) The name and title of each listed person receiving deferred compensation allocated by a nonprofit sponsor, the total amount and type of the compensation paid to each listed person, and reportable compensation, including base compensation, bonus and incentive compensation, other reportable compensation, and other nontaxable benefits.(3) Whether taxes were paid on the deferred compensation.(4) The applicable plan document, summary plan description, trust agreement, and any other agreement or legal document governing the deferred compensation.(b) The nonprofit sponsor subject to this part shall make the disclosures required pursuant to this section within 30 days of the conclusion of the nonprofit sponsors taxable year, on a form prescribed by the Secretary of State.(c) The Secretary of State shall make all disclosures required pursuant to this section available and open to the public for inspection. The Secretary of State shall provide access to all information contained in this statement by means of an online database.(d) A nonprofit sponsor subject to this part shall certify that the information it provides pursuant to this section is true and correct. A claim may not be made against the state for inaccurate information contained in statements filed under this section with the Secretary of State.
PART 12. Reporting Obligations Regarding Deferred Compensation Allocated by Nonprofit Sponsors to For Profit Recipients
PART 12. Reporting Obligations Regarding Deferred Compensation Allocated by Nonprofit Sponsors to For Profit Recipients
10850. This part applies to nonprofit sponsors that allocate deferred compensation to any listed person at a recipient for profit.
10850. This part applies to nonprofit sponsors that allocate deferred compensation to any listed person at a recipient for profit.
10851. For the purposes of this part:(a) Allocate means to hold, reserve, designate, provide, use or intend to use assets, whether or not the assets are held in trust, legally segregated, or restricted.(b) Deferred compensation means a pension, profit-sharing, share bonus, share purchase, share option, savings, thrift, and other retirement, incentive, and benefit plans, trusts, insurance, or any other form of deferred compensation or retirement benefits for any listed person that is both of the following:(1) Described in any audited financials, bond documents, Internal Revenue Service Form 990s, or other official disclosures. (2) Exempt from the Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.), as amended (ERISA), including, but not limited to, those indicating that the benefits or arrangements are not subject to ERISA or non-ERISA.(c) Listed person means a current or former officer, director, employer, or trustee, whether an individual or entity, with over two hundred fifty thousand dollars ($250,000) in reportable compensation, that is or was employed by, contracted with, or a partner in, any recipient for profit.(d) Nonprofit sponsor means a nonprofit corporation that is defined in Section 5046 and does one of the following:(1) Operates or controls a health facility, as defined in Section 1250 of the Health and Safety Code.(2) Operates or controls a facility that provides similar health care to a health facility, as defined in Section 1250 of the Health and Safety Code.(3) Contracts to provide or arrange for the provision of medical services.(e) Recipient for profit means any for-profit entity that employs, contracts with, comprises a partnership of, or otherwise uses the services of any listed person for which the nonprofit sponsor allocates deferred compensation.(f) Reportable compensation means compensation reported on any of the following:(1) Internal Revenue Service Form W-2, Box 1 or 5, whichever amount is greater, or Box 11.(2) Internal Revenue Service Form 1099-MISC, Boxes 6 and 7.(3) Internal Revenue Service Form 1065, Schedule K-1, Box 14, including, but not limited to, base compensation, bonus and incentive compensation, and other nontaxable benefits.
10851. For the purposes of this part:
(a) Allocate means to hold, reserve, designate, provide, use or intend to use assets, whether or not the assets are held in trust, legally segregated, or restricted.
(b) Deferred compensation means a pension, profit-sharing, share bonus, share purchase, share option, savings, thrift, and other retirement, incentive, and benefit plans, trusts, insurance, or any other form of deferred compensation or retirement benefits for any listed person that is both of the following:
(1) Described in any audited financials, bond documents, Internal Revenue Service Form 990s, or other official disclosures.
(2) Exempt from the Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.), as amended (ERISA), including, but not limited to, those indicating that the benefits or arrangements are not subject to ERISA or non-ERISA.
(c) Listed person means a current or former officer, director, employer, or trustee, whether an individual or entity, with over two hundred fifty thousand dollars ($250,000) in reportable compensation, that is or was employed by, contracted with, or a partner in, any recipient for profit.
(d) Nonprofit sponsor means a nonprofit corporation that is defined in Section 5046 and does one of the following:
(1) Operates or controls a health facility, as defined in Section 1250 of the Health and Safety Code.
(2) Operates or controls a facility that provides similar health care to a health facility, as defined in Section 1250 of the Health and Safety Code.
(3) Contracts to provide or arrange for the provision of medical services.
(e) Recipient for profit means any for-profit entity that employs, contracts with, comprises a partnership of, or otherwise uses the services of any listed person for which the nonprofit sponsor allocates deferred compensation.
(f) Reportable compensation means compensation reported on any of the following:
(1) Internal Revenue Service Form W-2, Box 1 or 5, whichever amount is greater, or Box 11.
(2) Internal Revenue Service Form 1099-MISC, Boxes 6 and 7.
(3) Internal Revenue Service Form 1065, Schedule K-1, Box 14, including, but not limited to, base compensation, bonus and incentive compensation, and other nontaxable benefits.
10852. (a) Notwithstanding, and in addition to, any other law, a nonprofit sponsor subject to this part under Section 10850 shall make the following annual disclosures to the Secretary of State at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990:(1) The total amount of deferred compensation allocated by the nonprofit sponsor.(2) The name and title of each listed person receiving deferred compensation allocated by a nonprofit sponsor, the total amount and type of the compensation paid to each listed person, and reportable compensation, including base compensation, bonus and incentive compensation, other reportable compensation, and other nontaxable benefits.(3) Whether taxes were paid on the deferred compensation.(4) The applicable plan document, summary plan description, trust agreement, and any other agreement or legal document governing the deferred compensation.(b) The nonprofit sponsor subject to this part shall make the disclosures required pursuant to this section within 30 days of the conclusion of the nonprofit sponsors taxable year, on a form prescribed by the Secretary of State.(c) The Secretary of State shall make all disclosures required pursuant to this section available and open to the public for inspection. The Secretary of State shall provide access to all information contained in this statement by means of an online database.(d) A nonprofit sponsor subject to this part shall certify that the information it provides pursuant to this section is true and correct. A claim may not be made against the state for inaccurate information contained in statements filed under this section with the Secretary of State.
10852. (a) Notwithstanding, and in addition to, any other law, a nonprofit sponsor subject to this part under Section 10850 shall make the following annual disclosures to the Secretary of State at the conclusion of each taxable year for which the nonprofit sponsor files an Internal Revenue Service Form 990:
(1) The total amount of deferred compensation allocated by the nonprofit sponsor.
(2) The name and title of each listed person receiving deferred compensation allocated by a nonprofit sponsor, the total amount and type of the compensation paid to each listed person, and reportable compensation, including base compensation, bonus and incentive compensation, other reportable compensation, and other nontaxable benefits.
(3) Whether taxes were paid on the deferred compensation.
(4) The applicable plan document, summary plan description, trust agreement, and any other agreement or legal document governing the deferred compensation.
(b) The nonprofit sponsor subject to this part shall make the disclosures required pursuant to this section within 30 days of the conclusion of the nonprofit sponsors taxable year, on a form prescribed by the Secretary of State.
(c) The Secretary of State shall make all disclosures required pursuant to this section available and open to the public for inspection. The Secretary of State shall provide access to all information contained in this statement by means of an online database.
(d) A nonprofit sponsor subject to this part shall certify that the information it provides pursuant to this section is true and correct. A claim may not be made against the state for inaccurate information contained in statements filed under this section with the Secretary of State.
SEC. 2. The provisions of this part are severable. If any provision of this part or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 2. The provisions of this part are severable. If any provision of this part or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 2. The provisions of this part are severable. If any provision of this part or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
### SEC. 2.
SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
### SEC. 3.
(a)There is hereby established in the Department of Managed Health Care the Financial Solvency Standards Board composed of ten members. The members shall consist of the director, or the directors designee, and nine members appointed by the director. The nine members appointed by the director may be, but are not necessarily limited to, individuals with training and experience in the following subject areas or fields: medical and health care economics; accountancy, with experience in integrated or affiliated health care delivery systems; excess loss insurance underwriting in the medical, hospital, and health plan business; actuarial studies in the area of health care delivery systems; management and administration in integrated or affiliated health care delivery systems; investment banking; information technology in integrated or affiliated health care delivery systems; large group health insurance purchasing; and a representative of health care consumers. The members appointed by the director shall be appointed for a term of three years, but may be removed or reappointed by the director before the expiration of the term.
(b)The purpose of the board is to do all of the following:
(1)Advise the director on matters of financial solvency affecting the delivery of health care services.
(2)Develop and recommend to the director financial solvency requirements and standards relating to plan operations, plan-affiliate operations and transactions, plan-provider contractual relationships, and provider-affiliate operations and transactions.
(3)Periodically monitor and report on the implementation and results of the financial solvency requirements and standards.
(c)Financial solvency requirements and standards recommended to the director by the board may, after a period of review and comment not to exceed 45 days, be noticed for adoption as regulations as proposed or modified under the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). During the directors 45-day review and comment period, the director, in consultation with the board, may postpone the adoption of the requirements and standards pending further review and comment. This subdivision does not prohibit the director from adopting regulations, including emergency regulations, under the rulemaking provisions of the Administrative Procedure Act.
(d)The board shall meet at least quarterly and at the call of the chair. In order to preserve the independence of the board, the director shall not serve as chair. The members of the board may establish their own rules and procedures. All members shall serve without compensation, but shall be reimbursed from department funds for expenses actually and necessarily incurred in the performance of their duties.
(e)For purposes of this section, board means the Financial Solvency Standards Board.