BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  May 6, 2015 


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                              Brian Maienschein, Chair


          AB 1350  
          (Salas) - As Amended April 28, 2015


          SUBJECT:  Kern County Hospital Authority.


          SUMMARY:  Makes changes to existing law which authorizes the  
          Kern County Board of Supervisors (Board of Supervisors) to  
          establish the Kern County Hospital Authority (Authority).   
          Specifically, this bill:  


          1)Makes a number of changes to existing law which authorizes the  
            Board of Supervisors to establish by ordinance the Authority  
            and to allow for the transfer of the county-run Kern Medical  
            Center (KMC) to the Authority.   


          2)Defines "transfer of control of the medical center" to mean  
            "the transfer by the County to the Authority of the  
            maintenance, operation, management, and personnel of the  
            medical center, whether by lease, transfer of ownership, or  
            other means, as provided by, and subject to, any conditions  
            and limitations specified by the Board of Supervisors in the  
            enabling ordinance."  


          3)Adds to the list of terms and conditions the Board of  
            Supervisors may include in the enabling ordinance to transfer  








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            control to the Authority from Kern County (County), whether  
            funds of the Authority shall be deposited in the custody of,  
            and paid out solely through, the County's treasurer's office.   



          4)Changes the effective date from the date the County adopts the  
            enabling ordinance to transfer control to the Authority  
            instead to the actual date of the transfer of control to the  
            Authority in a number of provisions in existing law which  
            require the Authority to be bound by the terms of memoranda of  
            understanding (MOU) between the County and its employee  
            representatives and in several other provisions that provide  
            protections for employee benefits.  


          5)Requires the Authority to be treated as a public employer that  
            offered a plan of replacement benefits prior to January 1,  
            2013.  Provides that the County's plan of replacement benefits  
            that was in effect prior to January 1, 2013, is deemed to be  
            the Authority's replacement plan for the sole purpose of  
            allowing the Authority to continue to offer the plan of  
            replacement benefits, immediately after the transfer for Kern  
            County Employees' Retirement Association members who meet  
            specified requirements.  


          6)Authorizes the Authority, if not otherwise required pursuant  
            to the enabling ordinance to deposit its funds in the county  
            treasury, to establish its own treasury.  


          7)Provides that the powers granted to the Authority, pursuant to  
            existing law, may be subject to any terms, conditions, and  
            limitations imposed by the County's enabling ordinance.  


          8)Adds physicians and other provider types and coverage  
            mechanisms to the list of services, coverage, and programs  








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            that the Authority has the same rights as the county with  
            respect to owning, operating, and providing.  


          9)Expands the County's authority to issue debt instruments,  
            beyond revenue anticipation notes, to provide by loan or  
            otherwise amounts necessary to the Authority to meets its  
            operating and capital needs.  


          10)Provides that existing law, which governs the Authority,  
            shall not be construed to limit the borrowing authority of the  
            County.  


          11)Authorizes the Board of Supervisors, as applicable, to hold  
            meetings relating to the Authority's trade secrets, as  
            specified.  


          12)Authorizes the Board of Supervisors to contract for services  
            or purchase items on behalf 


          of the Authority.  
          13)Provides that the Authority's governing body (Board of  
            Governors) has authority over procurement and contracts,  
            unless otherwise provided for and subject to the limitations  
            and conditions established in the enabling ordinance.   
            Requires the Authority to adopt written rules, regulations and  
            procedures with regard to procurement and contract functions.   



          14)Requires the Authority's ability to contract for personnel or  
            other services and items, as specified, to only be limited by  
            the provisions in this chapter and the Meyers-Milias-Brown  
            Act.  









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          15)Makes other technical and conforming changes.  


          16)Makes minor changes to the findings and declarations.  


          EXISTING LAW authorizes the Board of Supervisors to establish  
          the Authority, and specifies the Authority's governance, powers,  
          and procedures.  


          FISCAL EFFECT:  None


          COMMENTS:   


          1)Prior Legislation.  Facing escalating costs, some county  
            hospitals have sought to restructure their governance or  
            affiliate with other hospitals in their areas.  In these  
            instances, the Legislature has granted several counties the  
            ability to create health authorities, including Alameda [AB  
            2374 (Bates), Chapter 816, Statues of 1996], Monterey [AB 276  
            (Alejo), Chapter 686, Statutes of 2012], San Luis Obispo [SB  
            538 (O'Connell), Chapter 899, Statues of 1999], Santa Barbara,  
            and Sonoma (for dental).  


            Most recently, the Legislature passed AB 2546 (Salas), Chapter  
            613, Statues of 2014, which authorized the Board of  
            Supervisors to establish a separate Authority to govern the  
            County's medical center (KMC).  AB 2546 contains several  
            provisions to ensure that healthcare services remain  
            accessible to patients regardless of their ability to pay and  
            that the Authority, as a separate entity from the County, will  
            still continue to serve as a hospital.  AB 2546 also  
            established requirements for the Authority upon the transfer  
            of KMC employees.  








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          2)Bill Summary.  This bill builds upon the authority granted to  
            the Kern County Board of Supervisors by AB 2546 to establish  
            the Authority and to transfer the medical center to the  
            separate Authority.  This bill makes a number of changes to  
            the laws governing the transfer of KMC.  


            This bill is author-sponsored.  


          3)Author's Statement.  According to the author, "KMC serves a  
            community of over 650,000 residents, including indigent  
            individuals with no other means of obtaining medical care. KMC  
            provides the only trauma care between Los Angeles and Fresno,  
            and is vital to training physicians through academic residency  
            and education programs.  


            "A hospital authority allows Kern County to benefit from the  
            cost savings that can be generated by operating under a  
            separate governance structure and provide opportunities for  
            increased flexibility, responsiveness, and innovation.  The  
            law established extensive provisions intended to ensure the  
            medical center will continue to provide affordable,  
            high-quality health care services and that medical center  
            employees will have a seamless transition of wages, benefits,  
            and contracts without loss of rights or status.  This bill  
            contains technical and clarifying changes to ensure the  
            successful transfer of KMC to an Authority." 


          4)Arguments in Support.  Supporters argue that this bill makes a  
            number of changes to provide for a smooth and equitable  
            transition of KMC to a hospital authority.  








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          5)Arguments in Opposition.  None on file.  


          REGISTERED SUPPORT / OPPOSITION:




          Support


          California State Council of the Service Employees International  
          Union (If Amended)


          Kern County Board of Supervisors  


          Kern Health Systems  




          Opposition


          None on file




          Analysis Prepared by:Misa Lennox / L. GOV. / (916) 319-3958













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