SECTIONS 15430-15462.5 - California Statutes

GOVERNMENT CODE

SECTION 15430-15462.5

15430. This part shall be known and may be cited as the California
Health Facilities Financing Authority Act.

15431. The California Health Facilities Authority is continued in
state government as the California Health Facilities Financing
Authority. The authority constitutes a public instrumentality, and
the exercise by the authority of the powers conferred by this part
shall be deemed and held to be the performance of an essential public
function.

15432. As used in this part, the following words and terms shall
have the following meanings, unless the context clearly indicates or
requires another or different meaning or intent:
(a) "Act" means the California Health Facilities Financing
Authority Act.
(b) "Authority" means the California Health Facilities Financing
Authority created by this part or any board, body, commission,
department, or officer succeeding to the principal functions thereof
or to which the powers conferred upon the authority by this part
shall be given by law.
(c) "Cost," as applied to a project or portion of a project
financed under this part, means and includes all or any part of the
cost of construction and acquisition of all lands, structures, real
or personal property, rights, rights-of-way, franchises, easements,
and interests acquired or used for a project, the cost of demolishing
or removing any buildings or structures on land so acquired,
including the cost of acquiring any lands to which those buildings or
structures may be moved, the cost of all machinery and equipment,
financing charges, interest prior to, during, and for a period not to
exceed the later of one year or one year following completion of
construction, as determined by the authority, the cost of insurance
during construction, the cost of funding or financing noncapital
expenses, reserves for principal and interest and for extensions,
enlargements, additions, replacements, renovations and improvements,
the cost of engineering, service contracts, reasonable financial and
legal services, plans, specifications, studies, surveys, estimates,
administrative expenses, and other expenses of funding or financing,
that are necessary or incident to determining the feasibility of
constructing any project, or that are incident to the construction,
acquisition, or financing of any project.
(d) "Health facility" means any facility, place, or building that
is licensed, accredited, or certified and organized, maintained, and
operated for the diagnosis, care, prevention, and treatment of human
illness, or physical, mental, or developmental disability, including
convalescence and rehabilitation and including care during and after
pregnancy, or for any one or more of these purposes, for one or more
persons, and includes, but is not limited to, all of the following
types:
(1) A general acute care hospital that is a health facility having
a duly constituted governing body with overall administrative and
professional responsibility and an organized medical staff that
provides 24-hour inpatient care, including the following basic
services: medical, nursing, surgical, anesthesia, laboratory,
radiology, pharmacy, and dietary services.
(2) An acute psychiatric hospital that is a health facility having
a duly constituted governing body with overall administrative and
professional responsibility and an organized medical staff that
provides 24-hour inpatient care for mentally disordered, incompetent,
or other patients referred to in Division 5 (commencing with Section
5000) or Division 6 (commencing with Section 6000) of the Welfare
and Institutions Code, including the following basic services:
medical, nursing, rehabilitative, pharmacy, and dietary services.
(3) A skilled nursing facility that is a health facility that
provides the following basic services: skilled nursing care and
supportive care to patients whose primary need is for availability or
skilled nursing care on an extended basis.
(4) An intermediate care facility that is a health facility that
provides the following basic services: inpatient care to ambulatory
or semiambulatory patients who have recurring need for skilled
nursing supervision and need supportive care, but who do not require
availability or continuous skilled nursing care.
(5) A special health care facility that is a health facility
having a duly constituted governing body with overall administrative
and professional responsibility and an organized medical or dental
staff that provides inpatient or outpatient, acute or nonacute care,
including, but not limited to, medical, nursing, rehabilitation,
dental, or maternity.
(6) A clinic that is operated by a tax-exempt nonprofit
corporation that is licensed pursuant to Section 1204 or 1204.1 of
the Health and Safety Code or a clinic exempt from licensure pursuant
to subdivision (b) or (c) of Section 1206 of the Health and Safety
Code.
(7) An adult day health center that is a facility, as defined
under subdivision (b) of Section 1570.7 of the Health and Safety
Code, that provides adult day health care, as defined under
subdivision (a) of Section 1570.7 of the Health and Safety Code.
(8) Any facility owned or operated by a local jurisdiction for the
provision of county health services.
(9) A multilevel facility is an institutional arrangement where a
residential facility for the elderly is operated as a part of, or in
conjunction with, an intermediate care facility, a skilled nursing
facility, or a general acute care hospital. "Elderly," for the
purposes of this paragraph, means a person 62 years of age or older.
(10) A child day care facility operated in conjunction with a
health facility. A child day care facility is a facility, as defined
in Section 1596.750 of the Health and Safety Code. For purposes of
this paragraph, "child" means a minor from birth to 18 years of age.
(11) An intermediate care facility/developmentally disabled
habilitative that is a health facility, as defined under subdivision
(e) of Section 1250 of the Health and Safety Code.
(12) An intermediate care facility/developmentally
disabled-nursing that is a health facility, as defined under
subdivision (h) of Section 1250 of the Health and Safety Code.
(13) A community care facility that is a facility, as defined
under subdivision (a) of Section 1502 of the Health and Safety Code,
that provides care, habilitation, rehabilitation, or treatment
services to developmentally disabled or mentally impaired persons.
(14) A nonprofit community care facility, as defined in
subdivision (a) of Section 1502 of the Health and Safety Code, other
than a facility that, as defined in that subdivision, is a
residential facility for the elderly, a foster family agency, a
foster family home, a full service adoption agency, or a noncustodial
adoption agency.
(15) A nonprofit accredited community work activity program, as
specified in subdivision (e) of Section 4851 and Section 4856 of the
Welfare and Institutions Code.
(16) A community mental health center, as defined in paragraph (3)
of subdivision (b) of Section 5667 of the Welfare and Institutions
Code.
(17) A nonprofit speech and hearing center, as defined in Section
1201.5 of the Health and Safety Code.
(18) A blood bank, as defined in Section 1600.2 of the Health and
Safety Code, licensed pursuant to Section 1602.5 of the Health and
Safety Code, and exempt from federal income taxation pursuant to
Section 501(c)(3) of the Internal Revenue Code.
(19) A residential facility for persons with developmental
disabilities, as defined in Sections 4688.5 and 4688.6 of the Welfare
and Institutions Code, which includes, but is not limited to, a
community care facility licensed pursuant to Section 1502 of the
Health and Safety Code and a family teaching home as defined in
Section 4689.1 of the Welfare and Institutions Code.
"Health facility" includes a clinic that is described in
subdivision (l) of Section 1206 of the Health and Safety Code.
"Health facility" includes the following facilities, if the
facility is operated in conjunction with one or more of the
facilities specified in paragraphs (1) to (19), inclusive, of this
subdivision: a laboratory, laundry, or nurses or interns residence,
housing for staff or employees and their families or patients or
relatives of patients, a physicians' facility, an administration
building, a research facility, a maintenance, storage, or utility
facility, all structures or facilities related to any of the
foregoing facilities or required or useful for the operation of a
health facility and the necessary and usual attendant and related
facilities and equipment, and parking and supportive service
facilities or structures required or useful for the orderly conduct
of the health facility.
"Health facility" does not include any institution, place, or
building used or to be used primarily for sectarian instruction or
study or as a place for devotional activities or religious worship.
(e) "Participating health institution" means a city, city and
county, or county, a district hospital, or a private nonprofit
corporation or association, or a limited liability company whose sole
member is a nonprofit corporation or association authorized by the
laws of this state to provide or operate a health facility and that,
pursuant to the provisions of this part, undertakes the financing or
refinancing of the construction or acquisition of a project or of
working capital as provided in this part. "Participating health
institution" also includes, for purposes of the California Health
Facilities Revenue Bonds (UCSF-Stanford Health Care) 1998 Series A,
the Regents of the University of California.
(f) "Project" means construction, expansion, remodeling,
renovation, furnishing, or equipping, or funding, financing, or
refinancing of a health facility or acquisition of a health facility
to be financed or refinanced with funds provided in whole or in part
pursuant to this part. "Project" may include reimbursement for the
costs of construction, expansion, remodeling, renovation, furnishing,
or equipping, or funding, financing, or refinancing of a health
facility or acquisition of a health facility. "Project" may include
any combination of one or more of the foregoing undertaken jointly by
any participating health institution with one or more other
participating health institutions.
(g) "Revenue bond" means any bond, warrant, note, lease, or
installment sale obligation that is evidenced by a certificate of
participation or other evidence of indebtedness issued by the
authority.
(h) "Working capital" means moneys to be used by, or on behalf of,
a participating health institution to pay or prepay maintenance or
operation expenses or any other costs that would be treated as an
expense item, under generally accepted accounting principles, in
connection with the ownership or operation of a health facility,
including, but not limited to, reserves for maintenance or operation
expenses, interest for not to exceed one year on any loan for working
capital made pursuant to this part, and reserves for debt service
with respect to, and any costs necessary or incidental to, that
financing.

15433. The authority shall consist of nine members, including the
State Treasurer, who shall serve as chairman, the State Controller,
the Director of Finance, two members appointed by the Senate Rules
Committee, two members appointed by the Speaker of the Assembly, and
two members appointed by the Governor subject to confirmation by a
majority vote of the Senate. Of the members appointed by the Senate
Rules Committee, one member shall be a licensed physician and
surgeon, and one shall serve or have served in an executive capacity
to a health facility. Of the members appointed by the Speaker of the
Assembly, one member shall be a person qualified by training and
experience in the field of investment or finance, and one member
shall be representative of the general public. The members appointed
by the Governor shall be representative of the general public. The
terms of appointed members shall be four years, expiring on March 31.
Each member shall hold office for the term of his or her appointment
and shall continue to serve until a successor shall have been
appointed and qualified. Any vacancy among the members shall be
filled by appointment for the unexpired term only. A member of the
authority shall be eligible for reappointment.
Members of the authority shall serve without compensation, but the
authority may reimburse its members for necessary expenses incurred
in the discharge of their duties.
The Director of Finance may designate a deputy or other official
in the Department of Finance to act for him or her and represent him
or her at all meetings of the authority.

15434. The chairperson of the authority on its behalf shall appoint
an executive director, who shall not be a member of the authority
and who shall serve at the pleasure of the authority. The executive
director shall receive compensation that shall be fixed by the
authority.

15435. The executive director or other person designated by
resolution of the authority shall keep a record of the proceedings of
the authority and shall be custodian of all books, documents and
papers filed with the authority, the minute book or journal of the
authority, and its official seal. The executive director or other
person may cause copies to be made of all minutes and other records
and documents of the authority and may give certificates under the
official seal of the authority to the effect that such copies are
true copies, and all persons dealing with the authority may rely upon
such certificates.

15436. Five members of the authority shall constitute a quorum. The
affirmative vote of a majority of a quorum shall be necessary for
any action taken by the authority. A vacancy in the membership of the
authority shall not impair the right of a quorum to exercise all the
rights and perform all the duties of the authority. Each meeting of
the authority shall be open to the public and shall be held in
accordance with the provisions of the Bagley-Keene Open Meeting Act
(Article 9 (commencing with Section 11120) of Chapter 1 of Part 1).
Resolutions of the authority need not be published or posted. The
authority may delegate by resolution to one or more of its members or
its executive director such powers and duties as it may deem proper.
The authority may delegate to the executive director or any other
official or employee of the authority any powers and duties it may
deem proper, including, but not limited to, the power to enter
contracts on behalf of the authority.

15437. (a) The provisions of this part shall be administered by the
authority, which shall have and is hereby vested with all powers
reasonably necessary to carry out the powers and responsibilities
expressly granted or imposed under this part.
(b) The authority shall establish financial eligibility standards
by studying the creditworthiness and earning capacity of each
project, together with the amount of pledged revenues, debt service
coverage, and basic security.

15438. The authority may do any of the following:
(a) Adopt bylaws for the regulation of its affairs and the conduct
of its business.
(b) Adopt an official seal.
(c) Sue and be sued in its own name.
(d) Receive and accept from any agency of the United States, any
agency of the state, or any municipality, county, or other political
subdivision thereof, or from any individual, association, or
corporation gifts, grants, or donations of moneys for achieving any
of the purposes of this chapter.
(e) Engage the services of private consultants to render
professional and technical assistance and advice in carrying out the
purposes of this part.
(f) Determine the location and character of any project to be
financed under this part, and to acquire, construct, enlarge,
remodel, renovate, alter, improve, furnish, equip, fund, finance,
own, maintain, manage, repair, operate, lease as lessee or lessor,
and regulate the same, to enter into contracts for any or all of
those purposes, to enter into contracts for the management and
operation of a project or other health facilities owned by the
authority, and to designate a participating health institution as its
agent to determine the location and character of a project
undertaken by that participating health institution under this
chapter and as the agent of the authority, to acquire, construct,
enlarge, remodel, renovate, alter, improve, furnish, equip, own,
maintain, manage, repair, operate, lease as lessee or lessor, and
regulate the same, and as the agent of the authority, to enter into
contracts for any or all of those purposes, including contracts for
the management and operation of that project or other health
facilities owned by the authority.
(g) Acquire, directly or by and through a participating health
institution as its agent, by purchase solely from funds provided
under the authority of this part, or by gift or devise, and to sell,
by installment sale or otherwise, any lands, structures, real or
personal property, rights, rights-of-way, franchises, easements, and
other interests in lands, including lands lying under water and
riparian rights, that are located within the state that the authority
determines necessary or convenient for the acquisition,
construction, or financing of a health facility or the acquisition,
construction, financing, or operation of a project, upon the terms
and at the prices considered by the authority to be reasonable and
that can be agreed upon between the authority and the owner thereof,
and to take title thereto in the name of the authority or in the name
of a participating health institution as its agent.
(h) Receive and accept from any source loans, contributions, or
grants for, or in aid of, the construction, financing, or refinancing
of a project or any portion of a project in money, property, labor,
or other things of value.
(i) Make secured or unsecured loans to, or purchase secured or
unsecured loans of, any participating health institution in
connection with the financing of a project or working capital in
accordance with an agreement between the authority and the
participating health institution. However, no loan to finance a
project shall exceed the total cost of the project, as determined by
the participating health institution and approved by the authority.
Funds for secured loans may be provided from the California Health
Facilities Financing Fund pursuant to subdivision (b) of Section
15439 to small or rural health facilities pursuant to authority
guidelines.
(j) Make secured or unsecured loans to, or purchase secured or
unsecured loans of, any participating health institution in
accordance with an agreement between the authority and the
participating health institution to refinance indebtedness incurred
by that participating health institution in connection with projects
undertaken or for health facilities acquired or for working capital.
Funds for secured loans may be provided from the California Health
Facilities Financing Fund pursuant to subdivision (b) of Section
15439 to small or rural health facilities pursuant to authority
guidelines.
(k) Mortgage all or any portion of interest of the authority in a
project or other health facilities and the property on which that
project or other health facilities are located, whether owned or
thereafter acquired, including the granting of a security interest in
any property, tangible or intangible, and to assign or pledge all or
any portion of the interests of the authority in mortgages, deeds of
trust, indentures of mortgage or trust, or similar instruments,
notes, and security interests in property, tangible or intangible, of
participating health institutions to which the authority has made
loans, and the revenues therefrom, including payments or income from
any thereof owned or held by the authority, for the benefit of the
holders of bonds issued to finance the project or health facilities
or issued to refund or refinance outstanding indebtedness of
participating health institutions as permitted by this part.
(l) Lease to a participating health institution the project being
financed or other health facilities conveyed to the authority in
connection with that financing, upon the terms and conditions the
authority determines proper, charge and collect rents therefor,
terminate the lease upon the failure of the lessee to comply with any
of the obligations of the lease, and include in that lease, if
desired, provisions granting the lessee options to renew the term of
the lease for the period or periods and at the rent, as determined by
the authority, purchase any or all of the health facilities or that
upon payment of all of the indebtedness incurred by the authority for
the financing of that project or health facilities or for refunding
outstanding indebtedness of a participating health institution, then
the authority may convey any or all of the project or the other
health facilities to the lessee or lessees thereof with or without
consideration.
(m) Charge and equitably apportion among participating health
institutions, the administrative costs and expenses incurred by the
authority in the exercise of the powers and duties conferred by this
part.
(n) Obtain, or aid in obtaining, from any department or agency of
the United States or of the state, any private company, or any
insurance or guarantee as to, of, or for the payment or repayment of,
interest or principal, or both, or any part thereof, on any loan,
lease, or obligation, or any instrument evidencing or securing the
loan, lease, or obligation, made or entered into pursuant to this
part; and notwithstanding any other provisions of this part, to enter
into any agreement, contract, or any other instrument whatsoever
with respect to that insurance or guarantee, to accept payment in the
manner and form as provided therein in the event of default by a
participating health institution, and to assign that insurance or
guarantee as security for the authority's bonds.
(o) Enter into any and all agreements or contracts, including
agreements for liquidity and credit enhancement, interest rate swaps
or hedges, execute any and all instruments, and do and perform any
and all acts or things necessary, convenient, or desirable for the
purposes of the authority or to carry out any power expressly granted
by this part.
(p) Invest any moneys held in reserve or sinking funds or any
moneys not required for immediate use or disbursement, at the
discretion of the authority, in any obligations authorized by the
resolution authorizing the issuance of the bonds secured thereof or
authorized by law for the investment of trust funds in the custody of
the Treasurer.
(q) Award grants to any eligible clinic pursuant to Section
15438.6.
(r) Award grants to any eligible health facility pursuant to
Section 15438.7.
(s) (1) Notwithstanding any other provision of law, provide a
working capital loan of up to five million dollars ($5,000,000) to
assist in the establishment and operation of the California Health
Benefit Exchange (Exchange) established under Section 100500. The
authority may require any information it deems necessary and prudent
prior to providing a loan to the Exchange and may require any term,
condition, security, or repayment provision it deems necessary in the
event the authority chooses to provide a loan. Under no
circumstances shall the authority be required to provide a loan to
the Exchange.
(2) Prior to the authority providing a loan to the Exchange, a
majority of the board of the Exchange shall be appointed and shall
demonstrate, to the satisfaction of the authority, that the federal
planning and establishment grants made available to the Exchange by
the United States Secretary of Health and Human Services are
insufficient or will not be released in a timely manner to allow the
Exchange to meet the necessary requirements of the federal Patient
Protection and Affordable Care Act (Public Law 111-148).
(3) The Exchange shall repay a loan made under this subdivision no
later than June 30, 2016, and shall pay interest at the rate paid on
moneys in the Pooled Money Investment Account.

15438.2. (a) When capital outlay funds are granted on property
which is leased for a child day care facility, the term of the lease
shall be as long as, or greater than, the term of the loan.
(b) Child day care facilities shall be insurable under the
California Health Facility Construction Loan Insurance Law.

15438.5. (a) It is the intent of the Legislature in enacting this
part to provide financing only, and, except as provided in
subdivisions (b), (c), and (d), only to health facilities that can
demonstrate the financial feasibility of their projects. It is
further the intent of the Legislature that all or part of any savings
experienced by a participating health institution, as a result of
that tax-exempt revenue bond funding, be passed on to the consuming
public through lower charges or containment of the rate of increase
in hospital rates. It is not the intent of the Legislature in
enacting this part to encourage unneeded health facility
construction. Further, it is not the intent of the Legislature to
authorize the authority to control or participate in the operation of
hospitals, except where default occurs or appears likely to occur.
(b) When determining the financial feasibility of projects, the
authority shall consider the more favorable interest rates reasonably
anticipated through the issuance of revenue bonds under this part.
It is the intent of the Legislature that the authority attempt in
whatever ways possible to assist health facilities to arrange
projects that will meet the financial feasibility standards developed
under this part.
(c) If a health facility seeking financing for a project pursuant
to this part does not meet the guidelines established by the
authority with respect to bond rating, the authority may nonetheless
give special consideration, on a case-by-case basis, to financing the
project if the health facility demonstrates to the satisfaction of
the authority the financial feasibility of the project, and the
performance of significant community service. For the purposes of
this part, a health facility that performs a significant community
service is one that contracts with Medi-Cal or that can demonstrate,
with the burden of proof being on the health facility, that it has
fulfilled at least two of the following criteria:
(1) On or before January 1, 1991, has established, and agrees to
maintain, a 24-hour basic emergency medical service open to the
public with a physician and surgeon on duty, or is a children's
hospital as defined in Section 14087.21 of the Welfare and
Institutions Code, that jointly provides basic or comprehensive
emergency services in conjunction with another licensed hospital.
This criterion shall not be utilized in a circumstance where a small
and rural hospital, as defined in Section 442.2 of the Health and
Safety Code, has not established a 24-hour basic emergency medical
service with a physician and surgeon on duty or will operate a
designated trauma center on a continuing basis during the life of the
revenue bonds issued by the authority.
(2) Has adopted, and agrees to maintain on a continuing basis
during the life of the revenue bonds issued by the authority, a
policy, approved and recorded by the facility's board of directors,
of treating all patients without regard to ability to pay, including,
but not limited to, emergency room walk-in patients.
(3) Has provided and agrees to provide care, on a continuing basis
during the life of the revenue bonds issued by the authority, to
Medi-Cal and uninsured patients in an amount not less than 5 percent
of the facility's adjusted inpatient days as reported on an annual
basis to the Office of Statewide Health Planning and Development.
(4) Has budgeted at least 5 percent of its net operating income to
meeting the medical needs of uninsured patients and to providing
other services, including, but not limited to, community education,
primary care outreach in ambulatory settings, and unmet nonmedical
needs, such as food, shelter, clothing, or transportation for
vulnerable populations in the community, and agrees to continue that
policy during the life of the revenue bonds issued by the authority.
(d) Enforcement of the conditions under which the authority issues
bonds pursuant to this section shall be governed by the enforcement
conditions under Section 15459.4.

15438.6. (a) This section shall be known, and may be cited, as the
Cedillo-Alarcon Community Clinic Investment Act of 2000.
(b) The Legislature finds and declares all of the following:
(1) Primary care clinics require capital improvements in order to
continuously perform their vital role. Many primary care clinics are
currently at capacity and in order to increase access to their
services and allow them to expand to cover the growing need for
health care for the vulnerable populations in California, these
capital funds are necessary.
(2) Primary care clinics are the health care safety net for the
most vulnerable populations in California: uninsured, underinsured,
indigent, and those in shortage designation areas. Primary care
clinics provide health care regardless of the ability to pay for
services.
(3) Approximately 6.6 million Californians lack health insurance,
a number that increases by 50,000 per month.
(4) Primary care clinics have been historically and woefully
underfunded.
(5) Primary care clinics are the most cost-effective means of
serving California's vulnerable populations.
(6) The failure to adequately fund primary care clinics has
resulted in significant costs to the state in the form of unnecessary
emergency room visits. Also, the lack of preventive care results in
significant costs when patients become severely ill.
(c) The authority may award grants to any eligible clinic, as
defined in subdivision (a) of Section 1204 and subdivision (c) of
Section 1206 of the Health and Safety Code, for purposes of financing
capital outlay projects, as defined in subdivision (f) of Section
15432.
(d) The authority, in consultation with representatives of primary
care clinics and other appropriate parties, shall develop selection
criteria and a process for awarding grants under this section. The
authority may take into account at least the following factors when
selecting recipients and determining amount of grants:
(1) The percentage of total expenditures attributable to
uncompensated care provided by an applicant.
(2) The extent to which the grant will contribute toward expansion
of health care access by indigent, underserved, and uninsured
populations.
(3) The need for the grant based on an applicant's total net
assets, relative to net assets of other applicants. For purposes of
this section, "total net assets" means the amount of total assets
minus total liabilities, as disclosed in an audited financial
statement prepared according to United States Generally Accepted
Accounting Principles, and shall include unrestricted net assets,
temporarily restricted net assets, and permanently restricted net
assets.
(4) The geographic location of the applicant, in order to maximize
broad geographic distribution of funding.
(5) Demonstration by the applicant of project readiness and
feasibility to the authority's satisfaction.
(6) The total amount of funds appropriated and available for
purposes of this section.
(e) No grant to any clinic facility shall exceed two hundred fifty
thousand dollars ($250,000).
(f) In no event shall a grant to finance a project exceed the
total cost of the project, as determined by the clinic and approved
by the authority. Grants shall be awarded only to clinics that have
certified to the authority that all requirements established by the
authority for grantees have been met.
(g) All projects that are awarded grants shall be completed within
a reasonable period of time, to be determined by the authority. No
funds shall be released by the authority until the applicant
demonstrates project readiness to the authority's satisfaction. If
the authority determines that the clinic has failed to complete the
project under the terms specified in awarding the grant, the
authority may require remedies, including the return of all or a
portion of the grant. Certification of project completion shall be
submitted to the authority by any clinic receiving a grant under this
section.
(h) Any clinic receiving a grant under this section shall commit
to using the health facility for the purposes for which the grant was
awarded for the duration of the expected life of the project.
(i) Upon disbursement of all grant funds, the authority shall
report to the Joint Legislative Budget Committee on the recipients of
grants, the total amount of each grant, and the purpose for which
each grant was awarded.
(j) It is the intent of the Legislature that the California Health
Facilities Financing Authority be reimbursed for the costs of the
administration of the implementation of this section from funds
appropriated for the purposes of this section.

15438.7. (a) The Legislature finds and declares all of the
following:
(1) There are small health care facilities throughout the state
that are in critical need of capital improvements to continue to
provide quality health care services.
(2) Some of these facilities currently lack the ability to take on
debt and have little access to capital.
(3) This lack of access to capital threatens the quality and
accessibility of the services provided by health care facilities and
hampers their ability to gain the financial strength to better access
the capital markets.
(4) The state's health care system is reliant upon those health
care facilities that treat low-income, uninsured, or vulnerable
populations, such as the developmentally disabled, the elderly, the
mentally ill, emotionally disturbed children, and the chemically
dependent.
(5) The grant program provided in this section is in the public
interest, serves a public purpose, and will promote the health,
welfare, and safety of the citizens of the state.
(b) The authority may award grants to any eligible health
facility, as defined in subdivision (d) of Section 15432 for purposes
of financing projects, as defined in subdivision (f) of Section
15432.
(c) The authority shall develop selection criteria and a process
for awarding grants under this section. When developing the selection
criteria for the awarding of grants under this section, the
authority shall take into consideration all of the following factors:
(1) The need for the grant based on the applicant's total net
assets.
(2) Whether the grant will leverage additional dollars to complete
the project.
(3) The importance and level of services to vulnerable populations
that will be generated.
(4) The level of access to capital by the applicant.
(5) Demonstration by the applicant of project readiness and
feasibility.
(6) Total dollars available for purposes of this section.
(d) It is the intent of the Legislature to assist those small
health facilities that have demonstrated superior management but
little to no access to capital and whose services are threatened by a
critical need for capital improvements.
(e) In no event shall a grant to finance a project exceed the
total cost of the project, as determined by the health facility and
approved by the authority. Grants shall be awarded only to facilities
that have certified to the authority that all requirements
established by the authority for grantees have been met.
(f) All projects that are awarded grants shall be completed within
a reasonable period of time, to be determined by the authority. No
funds shall be released by the authority until the applicant
demonstrates project readiness to the authority's satisfaction. If
the authority determines that the health facility has failed to
complete the project under the terms specified in awarding the grant,
the authority may require remedies, including the return of all or a
portion of the grant. Certification of project completion shall be
submitted to the authority by any health facility receiving a grant
under this section.
(g) Subject to subdivision (h), grants to be awarded under this
section shall be financed by funds from the California Health
Facilities Authority Fund.
(h) Grants shall only be available pursuant to this section if the
authority determines that it has sufficient moneys available in the
California Health Facilities Authority Fund. Nothing in this section
shall require the authority to award grants if the authority
determines that it has insufficient moneys available in the
California Health Facilities Authority Fund to award grants.
(i) The authority may annually determine the amount available for
purposes of this section.

15439. (a) The California Health Facilities Authority Fund is
continued in existence in the State Treasury as the California Health
Facilities Financing Authority Fund. All money in the fund is hereby
continuously appropriated to the authority for carrying out the
purposes of this division. The authority may pledge any or all of the
moneys in the fund as security for payment of the principal of, and
interest on, any particular issuance of bonds issued pursuant to this
part, or any particular secured or unsecured loan made pursuant to
subdivision (i), (j), or (s) of Section 15438, or for a grant awarded
pursuant to subdivision (b) of Section 15438.7, and, for that
purpose or as necessary or convenient to the accomplishment of any
other purpose of the authority, may divide the fund into separate
accounts. All moneys accruing to the authority pursuant to this part
from whatever source shall be deposited in the fund.
(b) Subject to the priorities that may be created by the pledge of
particular moneys in the fund to secure any issuance of bonds of the
authority, and subject further to the cost of loans provided by the
authority pursuant to subdivisions (i), (j), or (s) of Section 15438
and to the cost of grants provided by the authority pursuant to
Section 15438.7, and subject further to any reasonable costs which
may be incurred by the authority in administering the program
authorized by this division, all moneys in the fund derived from any
source shall be held in trust for the security and payment of bonds
of the authority and shall not be used or pledged for any other
purpose so long as the bonds are outstanding and unpaid. However,
nothing in this section shall limit the power of the authority to
make loans with the proceeds of bonds in accordance with the terms of
the resolution authorizing the same.
(c) Pursuant to any agreements with the holders of particular
bonds pledging any particular assets, revenues, or moneys, the
authority may create separate accounts in the fund to manage assets,
revenues, or moneys in the manner set forth in the agreements.
(d) The authority may, from time to time, direct the State
Treasurer to invest moneys in the fund that are not required for its
current needs, including proceeds from the sale of any bonds, in the
eligible securities specified in Section 16430 as the agency shall
designate. The authority may direct the State Treasurer to deposit
moneys in interest-bearing accounts in state or national banks or
other financial institutions having principal offices in this state.
The authority may alternatively require the transfer of moneys in the
fund to the Surplus Money Investment Fund for investment pursuant to
Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of
Division 4. All interest or other increment resulting from an
investment or deposit shall be deposited in the fund, notwithstanding
Section 16305.7. Moneys in the fund shall not be subject to transfer
to any other fund pursuant to any provision of Part 2 (commencing
with Section 16300) of Division 4, excepting the Surplus Money
Investment Fund.
(e) All moneys accruing to the authority from whatever source
shall be deposited in the fund.

15440. All expenses of the authority incurred in carrying out the
provisions of this part shall be payable solely from funds provided
pursuant to this part, and no liability shall be incurred by the
authority beyond the extent to which moneys shall have been provided
under this part.

15441. (a) The authority is authorized, from time to time, to issue
its negotiable revenue bonds in order to provide funds for achieving
any of its purposes under this part.
(b) Except as may otherwise be expressly provided by the
authority, each of its revenue bonds shall be payable from any
revenues or moneys of the authority available therefor and not
otherwise pledged, subject only to any agreements with the holders of
particular bonds or notes pledging any particular revenues or
moneys. Notwithstanding that such revenue bonds may be payable from a
special fund, they shall be and be deemed to be for all purposes
negotiable instruments, subject only to the provisions of such bonds
for registration.
(c) The authority's revenue bonds may be issued as serial bonds or
as term bonds, or the authority, in its discretion, may issue bonds
of both types. The issuance of all revenue bonds shall be authorized
by resolution of the authority and shall bear such date or dates,
mature at such time or times, not exceeding 40 years from their
respective dates, bear interest at such rate or rates, be payable at
such time or times, be in such denominations, be in such form, either
coupon or registered, carry such registration privileges, be
executed in such manner, be payable in lawful money of the United
States of America at such place or places, and be subject to such
terms of redemption, as the indenture, trust agreement, or resolution
relating to such revenue bonds may provide. The authority's revenue
bonds or notes may be sold by the Treasurer at public or private
sale, after giving due consideration to the recommendation of the
participating health institution, for such price or prices and upon
such terms and conditions as the authority shall determine. The
Treasurer may sell any such revenue bonds at a price below the par
value thereof. However, the discount on any bonds so sold shall not
exceed 6 percent of the par value thereof, except in the case of any
bonds payable in whole or in part from moneys held under one or more
outstanding resolutions or indentures. Pending preparation of the
definitive bonds, the authority may issue interim receipts or
certificates or temporary bonds which shall be exchanged for such
definitive bonds.
(d) Any resolution or resolutions authorizing the issuance of any
revenue bonds or any issue of revenue bonds may contain provisions,
which shall be a part of the contract with the holders of the bonds
to be authorized, as to pledging all or any part of the revenues of a
project or any revenue-producing contract or contracts made by the
authority with any individual, partnership, corporation or
association or other body, public or private, to secure the payment
of the bonds or of any particular issue of bonds.
(e) Neither the members of the authority nor any person executing
the revenue bonds shall be liable personally on the bonds or be
subject to any personal liability or accountability by reason of the
issuance thereof.
(f) The authority shall have power out of any funds available
therefor to purchase its bonds. The authority may hold, pledge,
cancel or resell such bonds, subject to and in accordance with
agreements with bondholders.

15442. In the discretion of the authority, any revenue bonds issued
under the provisions of this part may be secured by a trust
agreement or indenture by and between the authority and a corporate
trustee or trustees, which may be the State Treasurer or any trust
company or bank having the powers of a trust company within or
without the state. Such trust agreement, indenture, or the resolution
providing for the issuance of such bonds may pledge or assign the
revenues to be received from a participating health institution. Such
indenture, trust agreement, or resolution providing for the issuance
of such bonds may contain such provisions for protecting and
enforcing the rights and remedies of the bondholders as may be
reasonable and proper and not in violation of law, including
particularly such provisions as have hereinabove been specifically
authorized to be included in any resolution or resolutions of the
authority authorizing bonds thereof. Any such trust agreement or
indenture may set forth the rights and remedies of the bondholders
and of the trustee or trustees, and may restrict the individual right
of action of bondholders. In addition to the foregoing, any such
indenture, trust agreement, or resolution may contain such other
provisions as the authority may deem reasonable and proper for the
security of the bondholders.

15443. Revenue bonds issued under the provisions of this part shall
not be deemed to constitute a debt or liability of the state or of
any political subdivision thereof or a pledge of the faith and credit
of the state or of any such political subdivision, other than the
authority, but shall be payable solely from the funds herein
provided. All such bonds shall contain on the face thereof a
statement to the effect that neither the State of California nor the
authority shall be obligated to pay the principal of, or the interest
thereon, except from revenues of the authority, and that neither the
faith and credit nor the taxing power of the State of California or
of any political subdivision thereof is pledged to the payment of the
principal of or the interest on such bonds. The issuance of revenue
bonds under the provisions of this part shall not directly or
indirectly or contingently obligate the state or any political
subdivision thereof to levy or to pledge any form of taxation
whatever therefor or to make any appropriation for their payment.

15444. Any holder of revenue bonds issued under the provisions of
this part or any of the coupons appertaining thereto, and the trustee
or trustees under any indenture or trust agreement, except to the
extent the rights herein given may be restricted by any resolution
authorizing the issuance of, or any such indenture or trust agreement
securing, such bonds, may, either at law or in equity, by suit,
action, mandamus or other proceedings, protect and enforce any and
all rights under the laws of the state or granted hereunder or under
such resolution or indenture or trust agreement, and may enforce and
compel the performance of all duties required by this part or by such
resolution, indenture, or trust agreement to be performed by the
authority or by any officer, employee or agent thereof.

15445. All moneys received pursuant to this part, whether as
proceeds from the sale of revenue bonds or as revenues, shall be
deemed to be trust funds to be held and applied solely as provided in
this part. Until the funds are applied as provided in this part, and
notwithstanding any other provision of law, the moneys may be
invested in any obligations or securities authorized by resolutions
of the authority authorizing the issuance of the bonds. Any officer
with whom, or any bank or trust company with which, the moneys are
deposited shall act as trustee of the moneys and shall hold and apply
the moneys for the purposes hereof, subject to any regulations
adopted pursuant to this part and the resolution authorizing the
issuance of the bonds or the indenture or trust agreement securing
the bonds.

15446. (a) The authority may provide for the issuance of bonds of
the authority for the purpose of refunding any bonds or any series or
issue of bonds of the authority then outstanding, including the
payment of any redemption premium thereon and any interest accrued or
to accrue to the date of redemption, purchase, or maturity of the
bonds.
(b) The proceeds of any bonds issued for the purpose of refunding
of outstanding bonds may, in the discretion of the authority, be
applied to the purchase, redemption prior to maturity, or retirement
at maturity of any outstanding bonds on their earliest redemption
date or dates, upon their purchase or maturity, or paid to a third
person to assume the authority's obligation to make the payments, and
may, pending that application, be placed in escrow to be applied to
the purchase, retirement at maturity, or redemption on the date or
dates determined by the authority.
(c) Any proceeds placed in escrow may, pending their use, be
invested and reinvested in obligations or securities authorized by
resolutions of the authority, payable or maturing at the time or
times as are appropriate to assure the prompt payment of the
principal, interest, and redemption premium, if any, of the
outstanding bonds to be refunded at maturity or redemption of the
bonds to be refunded either at their earliest redemption date or
dates or any subsequent redemption date or dates or for payment of
interest on the refunding bonds on or prior to the final date of
redemption or payment of the bonds to be refunded. After the terms of
the escrow have been fully satisfied and carried out, any balance of
the proceeds and interest, income and profits, if any, earned or
realized on the investments thereof may be returned to the authority
for use by the authority.
(d) All of the refunding bonds are subject to this part in the
same manner and to the same extent as other bonds issued pursuant to
this part.

15447. Bonds issued by the authority under the provisions of this
part are hereby made securities in which all banks, bankers, savings
banks, trust companies and other persons carrying on a banking
business, all insurance companies, insurance associations and other
persons carrying on an insurance business, and all administrators,
executors, guardians, trustees and other fiduciaries, and all other
persons whatsoever who now are or may hereafter be authorized to
invest in bonds or other obligations of the state, may properly and
legally invest any funds, including capital belonging to them or
within their control; and such bonds, notes or other securities or
obligations are hereby made securities which may properly and legally
be deposited with and received by any state or municipal officers or
agency of the state for any purpose for which the deposit of bonds
or other obligations of the state is now or may hereafter be
authorized by law.

15448. Any bonds issued under the provisions of this part, their
transfer, and the income therefrom shall at all times be free from
taxation of every kind by the state and by all political subdivisions
in the state.

15449. The State of California does pledge to and agree with the
holders of the bonds issued pursuant to this part, and with those
parties who may enter into contracts with the authority pursuant to
the provisions of this part, that the state will not limit, alter or
restrict the rights hereby vested in the authority to finance health
care facilities and to fulfill the terms of any agreements made with
the holders of bonds authorized by this part, and with the parties
who may enter into contracts with the authority pursuant to the
provisions of this part, or in any way impair the rights or remedies
of the holders of such bonds or such parties until the bonds,
together with interest thereon, are fully paid and discharged and
such contracts are fully performed on the part of the authority. The
authority as a public body corporate and politic shall have the right
to include the pledge herein made in its bonds and contracts.

15450. A pledge by or to the authority of revenues, moneys,
accounts, accounts receivable, contract rights and other rights to
payment of whatever kind made by or to the authority pursuant to the
authority granted in this part shall be valid and binding from the
time the pledge is made for the benefit of pledges and successors
thereto. The revenues, moneys, accounts, accounts receivable,
contract rights and other rights to payment of whatever kind pledged
by or to the authority or its assignees shall immediately be subject
to the lien of the pledge without physical delivery or further act.
The lien of such pledge shall be valid and binding against all
parties, irrespective of whether the parties have notice of the
claim. The indenture, trust agreement, resolution or another
instrument by which such pledge is created need not be recorded.

15451. The authority shall fix, revise, charge and collect rents
for the use of each project owned by the authority and contract with
any person, partnership, association or corporation, or other body,
public or private, in respect thereof. Each lease entered into by the
authority with a participating health institution and each
agreement, note, mortgage or other instrument evidencing the
obligations of a participating health institution to the authority
shall provide that the rents or principal, interest and other charges
payable by the participating health institution shall be sufficient
at all times, (a) to pay the principal of, sinking fund payments, if
any, the premium, if any, and the interest on outstanding bonds of
the authority issued in respect of such project as the same shall
become due and payable, (b) to create and maintain reserves which may
but need not be required or provided for in the resolution relating
to such bonds of the authority, and (c) to pay its share of the
administrative costs and expenses of the authority. The authority
shall pledge the revenues derived and to be derived from a project or
other related health facilities or from a participating health
institution for the purposes specified in (a), (b), and (c) of the
preceding sentence and additional bonds may be issued which may rank
on a parity with other bonds relating to the project to the extent
and on the terms and conditions provided in the bond resolution.

15451.5. A participating health institution that is a private
nonprofit corporation or association and that borrows money to
finance working capital pursuant to this part, other than as part of
the cost of a project, shall be required to repay and discharge the
loan within 15 months of the loan date.

15452. When the principal of and interest on bonds issued by the
authority to finance the cost of a project or working capital or to
refinance outstanding indebtedness of one or more participating
health institutions, including any refunding bonds issued to refund
and refinance those bonds, have been fully paid and retired or when
adequate provision has been made to fully pay and retire those bonds,
and all other conditions of the resolution, the lease, the trust
indenture and any mortgage or deed of trust, security interest, or
any other instrument or instruments authorizing and securing the
bonds have been satisfied and the lien of the mortgage, deed of trust
or security interest has been released in accordance with the
provisions thereof, the authority shall promptly do all things and
execute those releases, release deeds, reassignments, deeds, and
conveyances necessary and required to convey or release any rights,
title, and interest of the authority in the project so financed, and
any other health facilities mortgaged or securities or instruments
pledged or transferred to secure the bonds, to the participating
health institution or institutions.

15455. (a) This part shall be deemed to provide a complete,
additional, and alternative method for doing the things authorized by
this part, and shall be regarded as supplemental and additional to
powers conferred by other laws. The issuance of bonds and refunding
bonds under this chapter need not comply with any other law
applicable to the issuance of bonds, including, but not limited to,
Division 13 (commencing with Section 21000) of the Public Resources
Code.
(b) Except as provided in subdivision (a), the financing of a
project pursuant to this part shall not exempt a project from any
requirement of law that is otherwise applicable to the project, and
the applicant shall provide documentation, before the authority
approves the issuance of bonds for the project, that the project has
complied with Division 13 (commencing with Section 21000) of the
Public Resources Code, or is not a project under that division.

15456. To the extent that the provisions of this part are
inconsistent with any other provisions of any general statute or
special act or parts thereof, the provisions of this part shall be
deemed controlling.

15457. Any net earnings of the authority beyond that necessary for
retirement of any obligations issued by the authority or to implement
the purposes of this chapter may inure to the benefit only of the
State of California or the authority.

15458. Upon dissolution of the authority, title to all property
owned by the authority shall vest in the successor authority created
by the Legislature, if any, if such successor authority qualifies
under Section 103 of the federal Internal Revenue Code of 1954, as
amended, and the regulations promulgated thereunder, as an authority
entitled to issue obligations on behalf of the State of California
the interest on which is exempt from federal income taxation. If no
such successor authority is so created, title to such property shall
vest in the State of California.

15459. As a condition of the issuance of revenue bonds, whether by
the authority or any local agency, to finance the construction,
expansion, remodeling, renovation, furnishing, or equipping of a
health facility or the acquisition of a health facility, each
borrower shall give reasonable assurance to the authority that the
services of the health facility will be made available to all persons
residing or employed in the area served by the facility.
For the purposes of this section and Sections 15459.1, 15459.2,
15459.3, and 15459.4, all of the following definitions apply:
(a) "Borrower" means each local agency or nonprofit corporation or
association which operates or provides the health facility and
receives the benefit of the issuance of revenue bonds.
(b) "Local agency" means any public district, public corporation,
authority, agency, board, commission, county, city and county, city,
school district, or any other public entity.
(c) "Revenue bond" means any bonds, warrants, notes, lease, or
installment sale obligations evidenced by certificates of
participation, or other evidence of indebtedness issued by the
authority or by a local agency payable from funds other than the
proceeds of ad valorem taxes or the proceeds of assessments levied
without limitation as to rate or amount by the local agency upon
property in the local agency.

15459.1. As part of its assurance under Section 15459, the borrower
shall agree to all of the following actions:
(a) To advise each person seeking services at the borrower's
facility as to the person's potential eligibility for Medi-Cal and
Medicare benefits or benefits from other governmental third-party
payers.
(b) To make available to the authority and to any interested
person a list of physicians with staff privileges at the borrower's
facility, which includes all of the following:
(1) Name.
(2) Specialty.
(3) Language spoken.
(4) Whether the physician takes Medi-Cal and Medicare patients.
(5) Business address and phone number.
(c) To inform in writing on a periodic basis all practitioners of
the healing arts having staff privileges in the borrower's facility
as to the existence of the facility's community service obligation.
The required notice to practitioners shall contain a statement, as
follows:
"This hospital has agreed to provide a community service and to
accept Medi-Cal and Medicare patients. The administration and
enforcement of this agreement is the responsibility of the California
Health Facilities Financing Authority and this facility."
(d) To post notices in the following form, which shall be
multilingual where the borrower serves a multilingual community, in
appropriate areas within the facility, including, but not limited to,
admissions offices, emergency rooms, and business offices:
"This facility has agreed to make its services available to all
persons residing or employed in this area. This facility is
prohibited by law from discriminating against Medi-Cal and Medicare
patients. Should you believe you may be eligible for Medi-Cal or
Medicare, you should contact our business office (or designated
person or office) for assistance in applying. You should also contact
our business office (or designated person or office) if you are in
need of a physician to provide you with services at this facility. If
you believe that you have been refused services at this facility in
violation of the community service obligation you should inform
(designated person or office) and the California Health Facilities
Financing Authority."
The borrower shall provide copies of this notice for posting to
all welfare offices in the county where the borrower's facility is
located.
(e) For all facilities in areas, and of a type, not subject to
Medi-Cal contracting and for all borrowers which have negotiated in
good faith to obtain a Medi-Cal contract but were not awarded a
contract by the California Medi-Cal Assistance Commission, the
authority shall make modifications to the requirements contained in
this section to reflect the absence of a Medi-Cal contract. Nothing
in this section relieves a hospital of its obligations under Section
1317 of the Health and Safety Code.

15459.2. If the borrower cannot demonstrate that it meets the
requirements of Section 15459, it may nonetheless be eligible for
financing through the issuance of revenue bonds if it presents a plan
that is satisfactory to the authority which details the reasonable
steps and timetables that the borrower agrees to take to bring the
facility into compliance with Section 15459.

15459.3. Each borrower shall make available to the authority and to
the public upon request an annual report substantiating compliance
with the requirements of Section 15459. The annual report shall set
forth sufficient information and verification therefor to indicate
the borrower's compliance. The report shall include at least the
following:
(a) By category for inpatient admissions, emergency admission, and
where the facility has a separate identifiable outpatient service:
(1) The total number of patients receiving services.
(2) The total number of Medi-Cal patients served.
(3) The total number of Medicare patients served.
(4) The total number of patients who had no financial sponsor at
the time of service.
(5) The dollar volume of services provided to each patient
category listed in paragraphs (1), (2), and (3).
(b) Where appropriate, the actions taken pursuant to Section
15459.2 and the effect the actions have had on the data specified in
subdivision (a).
(c) Any other information which the authority may reasonably
require.

15459.4. The remedies and sanctions available to the authority
against the borrower for failure to adhere to the assurance given to
the authority under Section 15459 shall include all of the following:
(a) Rendering the borrower ineligible for federal and state
financial assistance under the Hill-Burton Program.
(b) Requiring a borrower that had originally met the conditions of
community service to submit a plan that is satisfactory to the
authority which details the reasonable steps and timetables that the
borrower agrees to take to bring the facility back into compliance
with the assurances given to the authority.
(c) Referring the violation to the office of the Attorney General
of California for legal action authorized under existing law or other
remedy at law or equity, when a facility fails to carry out the
actions agreed to in a plan approved by the authority pursuant to
subdivision (b) of this section. However, the remedies obtainable by
the legal action shall not include withdrawal or cancellation of the
project or projects financed or to be financed through the issuance
of revenue bonds.

15460. The State Department of Health Services, in establishing
reimbursement for services rendered under the Medi-Cal program by
facilities financed under this part, shall reflect those interest
savings allocable to Medi-Cal services to the extent feasible and in
a manner consistent with federal law.

15462. Exclusively for the purpose of securing the financing of
projects or working capital pursuant to this part through the
issuance of revenue bonds, certificates of participation, or other
means, and notwithstanding any other provision of law, any city, city
and county, county, or local hospital district may issue bonds to
the authority or borrow money from the authority at the interest rate
or rates, with