BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      AB 1350


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          ASSEMBLY THIRD READING


          AB  
          1350 (Salas)


          As Amended  April 28, 2015


          Majority vote


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          |Committee       |Votes |Ayes                  |                    |
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          |----------------+------+----------------------+--------------------|
          |Local           |9-0   |Maienschein,          |                    |
          |Government      |      |Gonzalez, Alejo,      |                    |
          |                |      |Chiu, Cooley, Gordon, |                    |
          |                |      |Holden, Linder,       |                    |
          |                |      |Waldron               |                    |
          |                |      |                      |                    |
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          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.   









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          2)Defines "transfer of control of the medical center" to mean "the  
            transfer by Kern County (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  
            control to the Authority from the 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  
             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  








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            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 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 as authority over  
            procurement and contracts, unless otherwise provided for and  
            subject to the limitations and conditions established in the  








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            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.   



          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).  










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            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 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.  


          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  








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            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.  


          5)Arguments in Opposition.  None on file.  




          Analysis Prepared by:                                               
                          Misa Lennox / L. GOV. / (916) 319-3958  FN:  
          0000347