32121-32138
HEALTH AND SAFETY CODE
SECTION 32121-32138
32121. Each local district shall have and may exercise the
following powers:
(a) To have and use a corporate seal and alter it at its pleasure.
(b) To sue and be sued in all courts and places and in all actions
and proceedings whatever.
(c) To purchase, receive, have, take, hold, lease, use, and enjoy
property of every kind and description within and without the limits
of the district, and to control, dispose of, convey, and encumber the
same and create a leasehold interest in the same for the benefit of
the district.
(d) To exercise the right of eminent domain for the purpose of
acquiring real or personal property of every kind necessary to the
exercise of any of the powers of the district.
(e) To establish one or more trusts for the benefit of the
district, to administer any trust declared or created for the benefit
of the district, to designate one or more trustees for trusts
created by the district, to receive by gift, devise, or bequest, and
hold in trust or otherwise, property, including corporate securities
of all kinds, situated in this state or elsewhere, and where not
otherwise provided, dispose of the same for the benefit of the
district.
(f) To employ legal counsel to advise the board of directors in
all matters pertaining to the business of the district, to perform
the functions in respect to the legal affairs of the district as the
board may direct, and to call upon the district attorney of the
county in which the greater part of the land in the district is
situated for legal advice and assistance in all matters concerning
the district, except that if that county has a county counsel, the
directors may call upon the county counsel for legal advice and
assistance.
(g) To employ any officers and employees, including architects and
consultants, the board of directors deems necessary to carry on
properly the business of the district.
(h) To prescribe the duties and powers of the health care facility
administrator, secretary, and other officers and employees of any
health care facilities of the district, to establish offices as may
be appropriate and to appoint board members or employees to those
offices, and to determine the number of, and appoint, all officers
and employees and to fix their compensation. The officers and
employees shall hold their offices or positions at the pleasure of
the boards of directors.
(i) To do any and all things that an individual might do that are
necessary for, and to the advantage of, a health care facility and a
nurses' training school, or a child care facility for the benefit of
employees of the health care facility or residents of the district.
(j) To establish, maintain, and operate, or provide assistance in
the operation of, one or more health facilities or health services,
including, but not limited to, outpatient programs, services, and
facilities; retirement programs, services, and facilities; chemical
dependency programs, services, and facilities; or other health care
programs, services, and facilities and activities at any location
within or without the district for the benefit of the district and
the people served by the district.
"Health care facilities," as used in this subdivision, means those
facilities defined in subdivision (b) of Section 32000.1 and
specifically includes freestanding chemical dependency recovery
units. "Health facilities," as used in this subdivision, may also
include those facilities defined in subdivision (d) of Section 15432
of the Government Code.
(k) To do any and all other acts and things necessary to carry out
this division.
(l) To acquire, maintain, and operate ambulances or ambulance
services within and without the district.
(m) To establish, maintain, and operate, or provide assistance in
the operation of, free clinics, diagnostic and testing centers,
health education programs, wellness and prevention programs,
rehabilitation, aftercare, and any other health care services
provider, groups, and organizations that are necessary for the
maintenance of good physical and mental health in the communities
served by the district.
(n) To establish and operate in cooperation with its medical staff
a coinsurance plan between the hospital district and the members of
its attending medical staff.
(o) To establish, maintain, and carry on its activities through
one or more corporations, joint ventures, or partnerships for the
benefit of the health care district.
(p) (1) To transfer, at fair market value, any part of its assets
to one or more corporations to operate and maintain the assets. A
transfer pursuant to this paragraph shall be deemed to be at fair
market value if an independent consultant, with expertise in methods
of appraisal and valuation and in accordance with applicable
governmental and industry standards for appraisal and valuation,
determines that fair and reasonable consideration is to be received
by the district for the transferred district assets. Before the
district transfers, pursuant to this paragraph, 50 percent or more of
the district's assets to one or more corporations, in sum or by
increment, the elected board shall, by resolution, submit to the
voters of the district a measure proposing the transfer. The measure
shall be placed on the ballot of a special election held upon the
request of the district or the ballot of the next regularly scheduled
election occurring at least 88 days after the resolution of the
board. If a majority of the voters voting on the measure vote in its
favor, the transfer shall be approved. The campaign disclosure
requirements applicable to local measures provided under Chapter 4
(commencing with Section 84100) of Title 9 of the Government Code
shall apply to this election.
(2) To transfer, for the benefit of the communities served by the
district, in the absence of adequate consideration, any part of the
assets of the district, including, without limitation, real property,
equipment, and other fixed assets, current assets, and cash,
relating to the operation of the district's health care facilities to
one or more nonprofit corporations to operate and maintain the
assets.
(A) A transfer of 50 percent or more of the district's assets, in
sum or by increment, pursuant to this paragraph shall be deemed to be
for the benefit of the communities served by the district only if
all of the following occur:
(i) The transfer agreement and all arrangements necessary thereto
are fully discussed in advance of the district board decision to
transfer the assets of the district in at least five properly noticed
open and public meetings in compliance with Section 32106 and the
Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part
1 of Division 2 of Title 5 of the Government Code).
(ii) The transfer agreement provides that the hospital district
shall approve all initial board members of the nonprofit corporation
and any subsequent board members as may be specified in the transfer
agreement.
(iii) The transfer agreement provides that all assets transferred
to the nonprofit corporation, and all assets accumulated by the
corporation during the term of the transfer agreement arising out of,
or from, the operation of the transferred assets, are to be
transferred back to the district upon termination of the transfer
agreement, including any extension of the transfer agreement.
(iv) The transfer agreement commits the nonprofit corporation to
operate and maintain the district's health care facilities and its
assets for the benefit of the communities served by the district.
(v) The transfer agreement requires that any funds received from
the district at the outset of the agreement or any time thereafter
during the term of the agreement be used only to reduce district
indebtedness, to acquire needed equipment for the district health
care facilities, to operate, maintain, and make needed capital
improvements to the district's health care facilities, to provide
supplemental health care services or facilities for the communities
served by the district, or to conduct other activities that would
further a valid public purpose if undertaken directly by the
district.
(B) A transfer of 10 percent or more but less than 50 percent of
the district's assets, in sum or by increment, pursuant to this
paragraph shall be deemed to be for the benefit of the communities
served by the district only if both of the following occur:
(i) The transfer agreement and all arrangements necessary thereto
are fully discussed in advance of the district board decision to
transfer the assets of the district in at least two properly noticed
open and public meetings in compliance with Section 32106 and the
Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part
1 of Division 2 of Title 5 of the Government Code).
(ii) The transfer agreement meets all of the requirements of
clauses (iii) to (v), inclusive, of subparagraph (A).
(C) Before the district transfers, pursuant to this paragraph, 50
percent or more of the district's assets to one or more nonprofit
corporations, in sum or by increment, the elected board shall, by
resolution, submit to the voters of the district a measure proposing
the transfer. The measure shall be placed on the ballot of a special
election held upon the request of the district or the ballot of the
next regularly scheduled election occurring at least 88 days after
the resolution of the board. If a majority of the voters voting on
the measure vote in its favor, the transfer shall be approved. The
campaign disclosure requirements applicable to local measures
provided under Chapter 4 (commencing with Section 84100) of Title 9
of the Government Code shall apply to this election.
(D) Notwithstanding the other provisions of this paragraph, a
hospital district shall not transfer any portion of its assets to a
private nonprofit organization that is owned or controlled by a
religious creed, church, or sectarian denomination in the absence of
adequate consideration.
(3) If the district board has previously transferred less than 50
percent of the district's assets pursuant to this subdivision, before
any additional assets are transferred, the board shall hold a public
hearing and shall make a public determination that the additional
assets to be transferred will not, in combination with any assets
previously transferred, equal 50 percent or more of the total assets
of the district.
(4) The amendments to this subdivision made during the 1991-92
Regular Session, and the amendments made to this subdivision and to
Section 32126 made during the 1993-94 Regular Session, shall only
apply to transfers made on or after the effective dates of the acts
amending this subdivision. The amendments to this subdivision made
during those sessions shall not apply to either of the following:
(A) A district that has discussed and adopted a board resolution
prior to September 1, 1992, that authorizes the development of a
business plan for an integrated delivery system.
(B) A lease agreement, transfer agreement, or both between a
district and a nonprofit corporation that were in full force and
effect as of September 1, 1992, for as long as that lease agreement,
transfer agreement, or both remain in full force and effect.
(5) Notwithstanding paragraph (4), if substantial amendments are
proposed to be made to a transfer agreement described in subparagraph
(A) or (B) of paragraph (4), the amendments shall be fully discussed
in advance of the district board's decision to adopt the amendments
in at least two properly noticed open and public meetings in
compliance with Section 32106 and the Ralph M. Brown Act (Chapter 9
(commencing with Section 54950) of Part 1 of Division 2 of Title 5 of
the Government Code).
(6) Notwithstanding paragraphs (4) and (5), a transfer agreement
described in subparagraph (A) or (B) of paragraph (4) that provided
for the transfer of less than 50 percent of a district's assets shall
be subject to the requirements of this subdivision when subsequent
amendments to that transfer agreement would result in the transfer,
in sum or by increment, of 50 percent or more of a district's assets
to the nonprofit corporation.
(7) For purposes of this subdivision, a "transfer" means the
transfer of ownership of the assets of a district. A lease of the
real property or the tangible personal property of a district shall
not be subject to this subdivision except as specified in Section
32121.4 and as required under Section 32126.
(8) Districts that request a special election pursuant to
paragraph (1) or (2) shall reimburse counties for the costs of that
special election as prescribed pursuant to Section 10520 of the
Elections Code.
(9) (A) Nothing in this section, including subdivision (j), shall
be construed to permit a local district to obtain or be issued a
single consolidated license to operate a separate physical plant as a
skilled nursing facility or an intermediate care facility that is
not located within the boundaries of the district.
(B) Notwithstanding subparagraph (A), Eastern Plumas Health Care
District may obtain and be issued a single consolidated license to
operate a separate physical plant as a skilled nursing facility or an
intermediate care facility that is located on the campus of the
Sierra Valley District Hospital. This subparagraph shall have no
application to any other district and is intended only to address the
urgent need to preserve skilled nursing or intermediate care
services within the rural County of Sierra.
(C) Subparagraph (B) shall only remain operative until the Sierra
Valley District Hospital is annexed by the Eastern Plumas Health Care
District. In no event shall the Eastern Plumas Health Care District
increase the number of licensed beds at the Sierra Valley District
Hospital during the operative period of subparagraph (B).
(10) A transfer of any of the assets of a district to one or more
nonprofit corporations to operate and maintain the assets shall not
be required to meet paragraphs (1) to (9), inclusive, of this
subdivision if all of the following conditions apply at the time of
the transfer:
(A) The district has entered into a loan that is insured by the
State of California under Chapter 1 (commencing with Section 129000)
of Part 6 of Division 107.
(B) The district is in default of its loan obligations, as
determined by the Office of Statewide Health Planning and
Development.
(C) The Office of Statewide Health Planning and Development and
the district, in their best judgment, agree that the transfer of some
or all of the assets of the district to a nonprofit corporation or
corporations is necessary to cure the default, and will obviate the
need for foreclosure. This cure of default provision shall be
applicable prior to the office foreclosing on district hospital
assets. After the office has foreclosed on district hospital assets,
or otherwise taken possession in accordance with law, the office may
exercise all of its powers to deal with and dispose of hospital
property.
(D) The transfer and all arrangements necessary thereto are
discussed in advance of the transfer in at least one properly noticed
open and public meeting in compliance with Section 32106 and the
Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part
1 of Division 2 of Title 5 of the Government Code). The meeting
referred to in this paragraph shall be noticed and held within 90
days of notice in writing to the district by the office of an event
of default. If the meeting is not held within this 90-day period, the
district shall be deemed to have waived this requirement to have a
meeting.
(11) If a transfer under paragraph (10) is a lease, the lease
shall provide that the assets shall revert to the district at the
conclusion of the leasehold interest. If the transfer is a sale, the
proceeds shall be used first to retire the obligation insured by the
office, then to retire any other debts of the district. After
providing for debts, any remaining funds shall revert to the
district.
(12) A health care district shall report to the Attorney General,
within 30 days of any transfer of district assets to one or more
nonprofit or for-profit corporations, the type of transaction and the
entity to whom the assets were transferred or leased.
(q) To contract for bond insurance, letters of credit, remarketing
services, and other forms of credit enhancement and liquidity
support for its bonds, notes, and other indebtedness and to enter
into reimbursement agreements, monitoring agreements, remarketing
agreements, and similar ancillary contracts in connection therewith.
(r) To establish, maintain, operate, participate in, or manage
capitated health care service plans, health maintenance
organizations, preferred provider organizations, and other managed
health care systems and programs properly licensed by the Department
of Insurance or the Department of Managed Care, at any location
within or without the district for the benefit of residents of
communities served by the district. However, that activity shall not
be deemed to result in, or constitute, the giving or lending of the
district's credit, assets, surpluses, cash, or tangible goods to, or
in aid of, any person, association, or corporation in violation of
Section 6 of Article XVI of the California Constitution.
Nothing in this section shall be construed to authorize activities
that corporations and other artificial legal entities are prohibited
from conducting by Section 2400 of the Business and Professions
Code.
Any agreement to provide health care coverage that is a health
care service plan, as defined in subdivision (f) of Section 1345,
shall be subject to Chapter 2.2 (commencing with Section 1340) of
Division 2, unless exempted pursuant to Section 1343 or 1349.2.
A district shall not provide health care coverage for any employee
of an employer operating within the communities served by the
district, unless the Legislature specifically authorizes, or has
authorized in this section or elsewhere, the coverage.
Nothing in this section shall be construed to authorize any
district to contribute its facilities to any joint venture that could
result in transfer of the facilities from district ownership.
(s) To provide health care coverage to members of the district's
medical staff, employees of the medical staff members, and the
dependents of both groups, on a self-pay basis.
32121.1. By resolution, the board of directors of a local hospital
district may delegate to its administrator the power to employ
(subject to the pleasure of the board of directors), and discharge,
such subordinate officers and employees as are necessary for the
purpose of carrying on the normal functions of any hospital operated
by the district.
32121.2. Except as provided in this section, by resolution, the
board of directors of a local hospital district may authorize the
disposition of any surplus property of the district at fair market
value by any method determined appropriate by the board.
The board of directors of a local hospital district may donate or
sell, at less than fair market value, any surplus property to another
local hospital district in California.
32121.3. (a) Notwithstanding any other provision of law, a hospital
district, or any affiliated nonprofit corporation upon a finding by
the board of directors of the district that it will be in the best
interests of the public health of the communities served by the
district and in order to obtain a licensed physician and surgeon to
practice in the communities served by the district, may do any of the
following:
(1) Guarantee to a physician and surgeon a minimum income for a
period of no more than three years from the opening of the physician
and surgeon's practice.
(2) Guarantee purchases of necessary equipment by the physician
and surgeon.
(3) Provide reduced rental rates of office space in any building
owned or leased by the district or any of its affiliated entities, or
subsidize rental payments for office space in any other buildings,
for a term of no more than three years.
(4) Provide other incentives to a physician and surgeon in
exchange for consideration and upon terms and conditions the hospital
district's board of directors deems reasonable and appropriate.
(b) Any provision in a contract between a physician and surgeon
and a hospital district or affiliated nonprofit corporation is void
which does any of the following:
(1) Imposes as a condition any requirement that the patients of
the physician and surgeon, or a quota of the patients of the
physician and surgeon, only be admitted to a specified hospital.
(2) Restricts the physician and surgeon from establishing staff
privileges at, referring patients to, or generating business for
another entity.
(3) Provides payment or other consideration to the physician and
surgeon for the physician and surgeon's referral of patients to the
district hospital or an affiliated nonprofit corporation.
(c) Contracts between a physician and surgeon and a hospital
district or affiliated nonprofit corporation that provide an
inducement for the physician and surgeon to practice in the community
served by the district hospital shall contain both of the following:
(1) A provision which requires the inducement to be repaid with
interest if the inducement is repayable.
(2) A provision which states that no payment or other
consideration shall be made for the referral of patients to the
district hospital or an affiliated nonprofit corporation.
(d) To the extent that this section conflicts with Section 650 of
the Business and Professions Code, Section 650 of the Business and
Professions Code shall supersede this section.
(e) The Legislature finds that this section is necessary to assist
district hospitals to attract qualified physicians and surgeons to
practice in the communities served by these hospitals, and that the
health and welfare of the residents in these communities require
these provisions.
32121.4. Notwithstanding any other provision of law, a hospital
district or any affiliated nonprofit corporation, upon a finding by
the board of directors of the district that it will be in the best
interests of the district to provide additional diversification of
facilities, may lease and operate the realty, facilities, and
business of another hospital district in California, or create a
leasehold interest in its own realty, improvements, and business in
favor of another hospital district, if all of the following apply:
(a) That the lease when taken together with any extensions of the
lease shall not exceed a total of 30 years.
(b) That the lessee district shall not finance any capital
improvements through the use of the lessor district's credit.
(c) That the lessor district shall have successfully completed any
feasibility studies required by its board of directors as will
reasonably ensure that the lessor hospital's financial stability will
not be endangered by the lease transaction.
(d) Nothing in this section shall be construed to impair or limit
the authority of the California Medical Assistance Commission to
contract for the provision of inpatient hospital services under the
Medi-Cal program with local hospital district hospitals as sole
distinct entities, even though one or more hospital districts may
have entered into leasehold or joint-venture arrangements.
Any lease made pursuant to this section to one or more nonprofit
corporations affiliated with a district, that is part of or
contingent upon a transfer of 50 percent or more of the district's
assets, in sum or by increment, to the affiliated nonprofit
corporation shall be subject to the requirements of subdivision (p)
of Section 32121.
32121.5. Notwithstanding any other provision of this division, a
local hospital district may enter into a contract of employment with
a hospital administrator, the duration of which shall not exceed four
years, but which may periodically be renewed upon expiration for not
more than four years.
32121.7. Notwithstanding any other provision of law, the transfer
of assets by El Camino Hospital, a California nonprofit public
benefit corporation ("El Camino Hospital-Corporation") that owns and
operates El Camino Hospital, located in the City of Mountain View,
pursuant to a transfer and ground lease from the El Camino Hospital
District pursuant to subdivision (p) of Section 32121, is subject to
this section.
(a) Before El Camino Hospital-Corporation transfers 50 percent or
more of its assets, at fair market value, to one or more
corporations, trusts, associations, partnerships, limited liability
companies, or other entities or persons, in sum or by increment, the
Board of Directors of El Camino Hospital District shall, by
resolution, submit to the voters of the El Camino Hospital District a
measure proposing the transfer. The measure shall be placed on the
ballot of the special election held upon the request of the El Camino
Hospital District or the ballot of the next regularly scheduled
election occurring at least 88 days after the resolution of the Board
of El Camino Hospital District. If a majority of the voters voting
on the measure vote in favor, the transfer shall be approved. The
campaign disclosure requirements applicable to local measures
provided under Chapter 4 (commencing with Section 84100) of Title 9
of the Government Code shall apply to this election.
(b) El Camino Hospital-Corporation may transfer, for the benefit
of the community served by the El Camino Hospital District, in the
absence of adequate consideration, any part of the assets of El
Camino Hospital-Corporation, including without limitation, the El
Camino Hospital, the real property, equipment and other fixed assets,
current assets, and cash, relating to the operation of El Camino
Hospital to one or more nonprofit corporations, trusts, or
associations to operate and maintain the assets.
(1) Any transfer of 50 percent or more of El Camino
Hospital-Corporation's assets in sum or by increment, pursuant to
this subdivision shall be deemed to be for the benefit of the
community served by the El Camino Hospital District only if all of
the following occur:
(A) The transfer agreement and all arrangements necessary thereto
are approved by the Board of Directors of El Camino Hospital
District, and the agreement and arrangements are fully discussed in
advance of the board's decision to transfer the assets of El Camino
Hospital-Corporation, in at least five properly noticed open and
public meetings of the Board of Directors of El Camino Hospital
District in compliance with Section 32106 and the Ralph M. Brown Act
(Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of
Title 5 of the Government Code).
(B) The transfer agreement provides that the El Camino Hospital
District shall approve all initial board members of the nonprofit
corporation, trust, or association, and any subsequent board members
as may be specified in the transfer agreement.
(C) The transfer agreement provides that all assets transferred to
the nonprofit corporation, trust, or association, and all assets
accumulated by the nonprofit corporation, trust, or association
during the term of the transfer agreement arising out of or from the
operation of the transferred assets shall be transferred back to the
El Camino Hospital District upon termination of the transfer
agreement, including any extension of the transfer agreement.
(D) The transfer agreement commits the nonprofit corporation,
trust, or association to operate and maintain the assets of El Camino
Hospital-Corporation for the benefit of the community served by the
El Camino Hospital District.
(E) The transfer agreement requires that any funds received from
the El Camino Hospital-Corporation at the outset of the agreement or
any time thereafter during the term of the agreement be used only to
reduce the El Camino Hospital-Corporation indebtedness, to acquire
needed equipment for the El Camino Hospital-Corporation health care
facilities, to operate, maintain, and make needed capital
improvements to those health care facilities, to provide supplemental
health care services or facilities for the communities served by the
El Camino Hospital District, or to conduct other activities that
would further a valid public purpose if undertaken directly by the El
Camino Hospital District.
(2) A transfer of 33 percent or more but less than 50 percent of
the El Camino Hospital-Corporation's assets, in sum or by increment,
pursuant to this subdivision shall be deemed to be for the benefit of
the communities served by the El Camino Hospital District only if
both of the following occur:
(A) The transfer agreement and all arrangements necessary thereto
are approved by the Board of Directors of El Camino Hospital District
and the agreement and arrangements are fully discussed in advance of
the board's decision to transfer the assets of El Camino
Hospital-Corporation in at least two properly noticed open and public
meetings of the Board of Directors of El Camino Hospital District in
compliance with Section 32106 and the Ralph M. Brown Act (Chapter 9
(commencing with Section 54950) of Part 1 of Division 2 of Title 5 of
the Government Code).
(B) The transfer agreement meets all of the requirements of
subparagraphs (B) to (E), inclusive, of paragraph (1).
(3) A transfer of 10 percent or more but less than 33 percent of
the El Camino Hospital-Corporation's assets, in sum or by increment,
pursuant to this subdivision shall be deemed to be for the benefit of
the communities served by the El Camino Hospital District only if
both of the following occur:
(A) The transfer agreement and all arrangements necessary thereto
are approved by the Board of Directors of El Camino Hospital District
and the agreement and arrangements are fully discussed in advance of
the board's decision to transfer the assets of El Camino
Hospital-Corporation in at least two properly noticed open and public
meetings of the Board of Directors of El Camino Hospital District in
compliance with Section 32106 and the Ralph M. Brown Act (Chapter 9
(commencing with Section 54950) of Part 1 of Division 2 of Title 5 of
the Government Code).
(B) The transfer agreement meets all of the requirements of
subparagraphs (C) to (E), inclusive, of paragraph (1).
(4) Before El Camino Hospital-Corporation transfers, pursuant to
this subdivision, 50 percent or more of its assets to one or more
nonprofit corporations, trusts, or associations, in sum or by
increment, the Board of Directors of El Camino Hospital District
shall, by resolution, submit to the voters of the El Camino Hospital
District a measure proposing the transfer. The measure shall be
placed on the ballot of a special election held upon the request of
El Camino Hospital District or the ballot of the next regularly
scheduled election occurring at least 88 days after the resolution of
the El Camino Hospital District. If a majority of the voters voting
on the measure vote in its favor, the transfer shall be approved. The
campaign disclosure requirements applicable to local measures
provided under Chapter 4 (commencing with Section 84100) of Title 9
of the Government Code shall apply to this election.
(5) Notwithstanding any other provision of this subdivision, El
Camino Hospital-Corporation shall not transfer any portion of its
assets to a private nonprofit corporation, trust, or association that
is owned or controlled by a religious creed, church, or sectarian
denomination in the absence of adequate consideration.
(c) If the El Camino Hospital-Corporation board has previously
transferred less than 50 percent of its assets pursuant to this
subdivision, before any additional assets are transferred, the board
shall hold a public hearing and shall make a public determination
that the additional assets to be transferred will not, in combination
with any assets previously transferred, equal 50 percent or more of
the total assets.
(d) For purposes of this section, a "transfer" means the transfer
of ownership of the assets of El Camino Hospital-Corporation. A lease
of the real property or the tangible personal property of El Camino
Hospital District shall not be subject to this section except as
required under Section 32121.4 or Section 32121.8.
(e) If El Camino Hospital District requests a special election
pursuant to subdivision (a) or (b) it shall reimburse counties for
the costs of that special election as prescribed pursuant to Section
10520 of the Elections Code.
(f) The limitations set forth in subdivisions (a) and (b) shall
not apply to any transfers, sales, leases, or other assignments of
assets from El Camino Hospital-Corporation to El Camino Hospital
District or entities controlled by El Camino Hospital District,
provided that in the case of a transfer to an entity controlled by El
Camino Hospital District, that entity shall continue to be governed
by this section, imposing the same requirements on such entity as are
imposed on El Camino Hospital-Corporation.
(g) Nothing in this section shall limit, modify, or otherwise
alter the requirements imposed on El Camino Hospital-Corporation as a
nonprofit corporation under the Corporations Code, including
Attorney General notice and consent requirements if applicable.
32121.8. The El Camino Hospital-Corporation may provide for the
operation and maintenance through tenants of the whole or any part of
the El Camino Hospital, and for that purpose may enter into any
lease agreement that it believes will best serve the interest of the
El Camino Hospital District. A lease entered into with one or more
corporations, partnerships, limited liability companies or other
entities or persons for the operation of 50 percent or more of the El
Camino Hospital, or that is part of or contingent upon a transfer of
50 percent or more of the El Camino Hospital-Corporation's assets,
in sum or by increment, as described in Section 32127.7 shall be
subject to the requirements of Section 32121.7. Any lease for the
operation of El Camino Hospital shall require the tenant or lessee to
comply with Section 32128. No lease for the operation of the entire
hospital shall run for a term in excess of 30 years. No lease for the
operation of less than the entire hospital shall run for a term in
excess of 10 years.
32121.9. A district that leases or transfers its assets to a
corporation pursuant to this division, including, but not limited to,
subdivision (p) of Section 32121 or Section 32126, shall act as an
advocate for the community to the operating corporation. The district
shall annually report to the community on the progress made in
meeting the community's health needs.
32122. The board of directors may purchase all necessary surgical
instruments and hospital equipment and equipment for nurses' homes
and all other property necessary for equipping a hospital and nurses'
home.
32123. The board of directors may purchase such real property, and
erect or rent and equip such buildings or building, room or rooms as
may be necessary for the hospital.
32124. The board of directors may establish a nurses' training
school in connection with the hospital, prescribe a course of study
for such training and after the completion of the course, provide for
the issuance of diplomas to graduate nurses.
32125. (a) The board of directors shall be responsible for the
operation of all health care facilities owned or leased by the
district, according to the best interests of the public health and
shall make and enforce all rules, regulations and bylaws necessary
for the administration, government, protection and maintenance of
health care facilities under their management and all property
belonging thereto and may prescribe the terms upon which patients may
be admitted thereto. Minimum standards of operation as prescribed in
this article shall be established and enforced by the board of
directors.
(b) A district shall not contract to care for indigent county
patients at below the cost for care. In setting the rates the board
shall, insofar as possible, establish rates as will permit the
district health care facilities to be operated upon a self-supporting
basis. The board may establish different rates for residents of the
district than for persons who do not reside within the district.
(c) Notwithstanding any other provision of law, unless prohibited
from doing so by action of the board of directors, the chief
executive officer may establish a task force to assist the chief
executive officer in operating the district's facilities. The chief
executive officer shall, if required to do so by action of the board,
select task force members from individuals nominated by the board.
Once established, the task force may be dissolved by action of the
chief executive officer or the board. Any action by the board under
this subdivision shall require four votes from a board on which there
are five members or five votes from a board on which there are seven
members.
32126. (a) The board of directors may provide for the operation and
maintenance through tenants of the whole or any part of any hospital
acquired or constructed by it pursuant to this division, and for
that purpose may enter into any lease agreement that it believes will
best serve the interest of the district. A lease entered into with
one or more corporations for the operation of 50 percent or more of
the district's hospital, or that is part of, or contingent upon, a
transfer of 50 percent or more of the district's assets, in sum or by
increment, as described in subdivision (p) of Section 32121, shall
be subject to the requirements of subdivision (p) of Section 32121.
Any lease for the operation of any hospital shall require the tenant
or lessee to conform to, and abide by, Section 32128. No lease for
the operation of an entire hospital shall run for a term in excess of
30 years. No lease for the operation of less than an entire hospital
shall run for a term in excess of 10 years.
(b) Notwithstanding any other provision of law, a sublease, an
assignment of an existing lease, or the release of a tenant or lessee
from obligations under an existing lease in connection with an
assignment of an existing lease shall not be subject to the
requirements of subdivision (p) of Section 32121 so long as all of
the following conditions are met:
(1) The sublease or assignment of the existing lease otherwise
remains in compliance with subdivision (a).
(2) The district board determines that the total consideration
that the district shall receive following the assignment or sublease,
or as a result thereof, taking into account all monetary and other
tangible and intangible consideration to be received by the district
including, without limitation, all benefits to the communities served
by the district, is no less than the total consideration that the
district would have received under the existing lease.
(3) The existing lease was entered into on or before July 1, 1984,
upon approval of the board of directors following solicitation and
review of no less than five offers from prospective tenants.
(4) If substantial amendments are made to an existing lease in
connection with the sublease or assignment of that existing lease,
the amendments shall be fully discussed in advance of the district
board's decision to adopt the amendments in at least two properly
noticed open and public meetings in compliance with Section 32106 and
the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of
Part 1 of Division 2 of Title 5 of the Government Code).
(c) A health care district shall report to the Attorney General,
within 30 days of any lease of district assets to one or more
corporations, the type of transaction and the entity to whom the
assets were leased.
32126.3. Notwithstanding any provision of law to the contrary, the
lease in existence immediately preceding January 1, 2006, between the
Grossmont Healthcare District and the Grossmont Hospital Corporation
that was entered into on May 29, 1991, may be renegotiated or
extended for up to an additional 30-year term. The renegotiations or
extension shall be presented to, and approved by a majority of, the
voters of the district.
32126.5. (a) The board of directors of a hospital district or any
affiliated nonprofit corporation may do any of the following when it
determines that the action is necessary for the provision of adequate
health services to communities served by the district:
(1) Enter into contracts with health provider groups, community
service groups, independent physicians and surgeons, and independent
podiatrists, for the provision of health services.
(2) Provide assistance or make grants to nonprofit provider groups
and clinics already functioning in the community.
(3) Finance experiments with new methods of providing adequate
health care.
(b) Nothing in this section shall authorize activities which
corporations and other artificial legal entities are prohibited from
conducting by Section 2400 of the Business and Professions Code.
32127. The hospital district shall establish its own treasury and
shall appoint a treasurer charged with the safekeeping and disbursal
of the funds in the treasury of the district. The board of directors
shall fix the amount of the bond to be given by such treasurer and
shall provide for the payment of the premium therefor out of the
maintenance and operation fund.
All moneys derived from that portion, if any, of the annual tax or
assessment levied for capital outlay purposes shall be placed in the
capital outlay fund. Any moneys derived from a special tax or
assessment levied under Article 3 of Chapter 3 hereof shall be placed
in a special assessment fund and shall be used exclusively for the
purposes for which such special tax or assessment was voted.
All moneys derived from the regular annual tax or assessment
provided in Article 1, Chapter 3 hereof, except any part thereof
levied for capital outlay purposes, shall be placed in the
maintenance and operation fund. All receipts and revenues of any kind
from the operation of the hospital shall be paid daily into the
treasury of said district and placed in the maintenance and operation
fund. Moneys in the maintenance and operation fund may be expended
for any of the purposes of the district; provided, however, that no
such moneys may be expended for new construction of additional
patient bed capacity other than as authorized by Section 32221
hereof. Whenever it appears that the sum in the bond interest and
sinking fund will be insufficient to pay the interest or principal of
bonds next coming due and payable therefrom, a sum sufficient to pay
such principal and interest shall be transferred by the board of
directors from the maintenance and operation fund to said bond
interest and sinking fund.
Except as to principal and interest of bonds, moneys in the
treasury of the district shall be paid out by the treasurer, or such
other officer or officers of the district, including the
administrator, as may be authorized by the board. The treasurer shall
keep such order as his voucher and shall keep accounts of all
receipts into the district treasury and all disbursements therefrom.
Where bonds of the district are payable at the office of the
district, all receipts from taxes levied to pay the principal and
interest of such bonds shall be paid into the treasury of the
district, and the treasurer of the district shall pay therefrom the
principal and interest of such bonds.
Where bonds of the district are payable at the office of the
county treasurer of the organizing county, at the option of the
holder, or otherwise, all receipts from taxes levied to pay principal
and interest of such bonds shall be paid into the treasury of the
organizing county and shall be placed by the county treasurer in the
bond interest and sinking fund of the district, and he shall pay the
principal and interest of such bonds therefrom and shall keep an
account of all moneys received into and paid out of said fund.
Any moneys in the treasury of the district and any moneys of the
district in the bond interest and sinking fund of the district in the
treasury of the organizing county may be deposited in accordance
with the provisions of the general laws of the State of California
governing the deposit of public moneys of cities or counties in such
bank or banks in the State of California as may be authorized to
receive deposits of public funds, in the same manner and upon the
same security as public moneys of cities and counties are deposited
in such banks, and with like force and effect. The board of directors
of the district are authorized to create a revolving fund which fund
shall not exceed the sum of 10 percent of the estimated annual
expenditures of the district at any one time and which shall be used
for the purpose of paying the interim expenses of the operation of
any hospital within the district without the necessity of a written
order signed by the president and countersigned by the secretary as
provided herein. The treasurer is authorized to deposit said fund in
such bank or banks in the county as may be authorized to receive
deposits of public funds in the same manner and upon the same
security as public moneys of cities and counties are deposited in
such banks and with like force and effect, and shall be subject to
withdrawal upon the signature of the treasurer, or such other
official of the district as may be authorized by the board of
directors, for the use and purpose provided for herein.
32127.1. Notwithstanding any other provision of law, the board of
directors of any district which is licensed to have 85 beds and
located within a county of 2,000,000 or more population, as
determined by the 1950 census, may, without establishing a fund for
capital outlays and without the approval of the district electors,
use all or any funds in the possession of, or held by, the district
on the effective date of the amendment made to this section at the
1967 Regular Session which were derived from previous tax levies, for
the acquisition of additional patient bed capacity by lease or
purchase of any hospital buildings or facilities or for new
construction of additional patient bed capacity for an existing
hospital.
32127.2. Exclusively for the purpose of securing state insurance of
financing for the construction of new health facilities, the
expansion, modernization, renovation, remodeling and alteration of
existing health facilities, and the initial equipping of any such
health facilities under Chapter 1 (commencing with Section 129000) of
Part 6 of Division 107, and notwithstanding any provision of this
division or any other provision or holding of law, the board of
directors of any district may (a) borrow money or credit, or issue
bonds, as well as by the financing methods specified in this
division, and (b) execute in favor of the state first mortgages,
first deeds of trust, and other necessary security interests as the
Office of Statewide Health Planning and Development may reasonably
require in respect to a health facility project property as security
for the insurance. No payments of principal, interest, insurance
premium and inspection fees, and all other costs of state-insured
loans obtained under the authorization of this section shall be made
from funds derived from the district's power to tax. It is hereby
declared that the authorizations for the executing of the mortgages,
deeds of trust and other necessary security agreements by the board
and for the enforcement of the state's rights thereunder is in the
public interest in order to preserve and promote the health, welfare,
and safety of the people of this state by providing, without cost to
the state, a state insurance program for health facility
construction loans in order to stimulate the flow of private capital
into health facilities construction to enable the rational meeting of
the critical need for new, expanded and modernized public health
facilities.
32127.3. (a) Exclusively for the purpose of securing federal
mortgage insurance, federal loans, federal loans or grants or
guaranteed loans issued pursuant to the federal Consolidated Farm and
Rural Development Act (7 U.S.C. Sec. 1921, et seq.), as amended by
Public Law 109-171 on February 8, 2006, or federally insured loans
issued pursuant to the National Housing Act (12 U.S.C. Secs. 1715w
and 1715z-7) for financing or refinancing the construction of new
health facilities, the expansion, modernization, renovation,
remodeling, or alteration of existing health facilities, and the
initial equipping of those health facilities under the federal
mortgage insurance programs as are now or may hereafter become
available to a local hospital district, and notwithstanding any
provision of this division, or any other provision or holding of law,
the board of directors of any district may do either or both of the
following:
(1) Borrow money or issue bonds, in addition to other financing
methods authorized under this division.
(2) Execute, in favor of the United States, appropriate federal
agency, or federally designated mortgagor, first mortgages, first
deeds of trust, or other necessary security interests as the federal
government may reasonably require with respect to a health facility
project property as security for that insurance.
(b) No payments of principal, interest, insurance premiums and
inspection fees, and all other costs of financing obtained as
authorized by this section shall be made from funds derived from the
district's power to tax.
(c) The Legislature hereby determines and declares that the
authorizations for executing the mortgages, deeds of trust, or other
necessary security agreements by the board and for the enforcement of
the federal government's rights thereunder are in the public
interest in order to preserve and promote the health, welfare, and
safety of the people of the state by providing, without cost to the
state, a federal mortgage insurance program for health facility
construction loans in order to stimulate the flow of private capital
into health facilities construction to enable the critical need for
new, expanded, and modernized public health facilities to be met.
(d) The Legislature further determines and declares that the
United States, appropriate federal agency, or federally designated
mortgagor named as beneficiary of any first mortgage or other
security interest delivered as authorized by this section is not a
private person or body within the meaning of Section 11 of Article XI
of the California Constitution.
32127.5. (a) Upon the adoption of a resolution of the board of
directors of the district so providing, all funds on hand in the
treasury of the district may, be paid over to the county treasurer of
the county in which the district was organized, in which case and
from and after the date of the adoption of such resolution the
functions of the district treasurer shall be performed by the county
treasurer. Except as to principal and interest of bonds, moneys in
the treasury of the district shall be paid out by the county
treasurer for purposes of the district upon warrants issued by the
county auditor on orders signed by the president of the district and
countersigned by the secretary of the district.
(b) At any time, the district board may, by resolution,
reestablish the office of district treasurer and, upon receipt of a
copy of such resolution, notwithstanding any other provision of law,
the county treasurer shall transfer all funds of the district to the
district treasurer.
32128. (a) The rules of the hospital, established by the board of
directors pursuant to this article, shall include all of the
following:
(1) Provision for the organization of physicians and surgeons,
podiatrists, and dentists licensed to practice in this state who are
permitted to practice in the hospital into a formal medical staff,
with appropriate officers and bylaws and with staff appointments on
an annual or biennial basis.
(2) Provision for a procedure for appointment and reappointment of
medical staff as provided by the standards of the Joint Commission
on Accreditation of Healthcare Organizations.
(3) Provisions that the medical staff shall be self-governing with
respect to the professional work performed in the hospital; that the
medical staff shall meet in accordance with the minimum requirements
of the Joint Commission on Accreditation of Healthcare
Organizations; and that the medical records of the patients shall be
the basis for such review and analysis.
(4) Provision that accurate and complete medical records be
prepared and maintained for all patients.
For purposes of this paragraph medical records include, but are
not limited to, identification data, personal and family history,
history of present illness, physical examination, special
examinations, professional or working diagnoses, treatment, gross and
microscopic pathological findings, progress notes, final diagnosis,
condition on discharge, and other matters as the medical staff shall
determine.
(5) Limitations with respect to the practice of medicine and
surgery in the hospital as the board of directors may find to be in
the best interests of the public health and welfare, including
appropriate provision for proof of ability to respond in damages by
applicants for staff membership, as long as no duly licensed
physician and surgeon is excluded from staff membership solely
because he or she is licensed by the Osteopathic Medical Board of
California.
(b) Notwithstanding any other provision of law, the board of
directors may indemnify for damages and for costs associated with the
legal defense of any nonemployee member of the medical staff when
named as a defendant in a civil action directly arising out of
opinions rendered, statements made, or actions taken as a necessary
part of participation in the medical peer review activities of the
district. This provision for indemnification for damages shall not
include any award of punitive or exemplary damages against any
nonemployee member of the medical staff. If the plaintiff prevails in
a claim for punitive or exemplary damages against a nonemployee
member of the medical staff, the defendant, at the option of the
board of directors of the district, shall be liable to the district
for all the costs incurred in providing representation to the
defendant.
(c) Notwithstanding subdivision (b) or any other provision of law,
a district is authorized to pay that part of a judgment that is for
punitive or exemplary damages against a nonemployee member of the
medical staff arising out of participation in peer review activities,
if the board of directors of the district, in its discretion, finds
all of the following:
(1) The judgment is based on opinions rendered, statements made,
or actions taken as a necessary part of participation in the medical
peer review activities of the district.
(2) At the time of rendering of the opinions, making the
statements, or taking the actions giving rise to the liability, the
nonemployee member of the medical staff was acting in good faith,
without actual malice, and in the apparent best interests of the
district.
(3) Payment of the claim or judgment against the nonemployee
member staff would be in the best interests of the district.
(d) The rules of the hospital shall, insofar as consistent with
this article, be in accord with and contain minimum standards not
less than the rules and standards of private or voluntary hospitals.
Unless specifically prohibited by law, the board of directors may
adopt other rules which could be lawfully adopted by private or
voluntary hospitals.
32128.10. No hospital established by the board of directors
pursuant to this article which permits sterilization operations for
contraceptive purposes to be performed therein, nor the medical staff
of such hospital, shall require the individual upon whom such a
sterilization operation is to be performed to meet any special
nonmedical qualifications, which are not imposed on individuals
seeking other types of operations in the hospital. Such prohibited
nonmedical qualifications shall include, but not be limited to, age,
marital status, and number of natural children.
Nothing in this section shall prohibit requirements relating to
the physical or mental condition of the individual or affect the
right of the attending physician to counsel or advise his patient as
to whether or not sterilization is appropriate. This section shall
not affect existing law with respect to individuals below the age of
majority.
32129. Notwithstanding the provisions of the Medical Practice Act,
the board of directors of a hospital district or any affiliated
nonprofit corporation may contract with physicians and surgeons,
podiatrists, health care provider groups, and nonprofit corporations
for the rendering of professional health services on a basis as does
not result in any profit or gain to the district from the services so
rendered and as allows the board to ensure that fees and charges, if
any, are reasonable, fair, and consistent with the basic commitment
of the district to provide adequate health care to all residents
within its boundaries.
32129.5. Notwithstanding any other provision of law, the board of
directors of a hospital district or any affiliated nonprofit
corporation may contract with a physician and surgeon or podiatrist
for the rendering of professional services in the hospital, for the
purpose of assuring that a physician and surgeon or podiatrist will
be on duty in an outpatient emergency department maintained by the
hospital, on a basis as does not result in any profit or gain to the
district from the professional services of the physician and surgeon.
For purposes of this section, the contract with the podiatrist shall
be for those services which the podiatrist is licensed to practice
pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of
the Business and Professions Code.
32130. A district may borrow money and incur indebtedness in an
amount not to exceed 85 percent of all estimated income and revenue
for the current fiscal year, including, but not limited to, tax
revenues, operating income, and any other miscellaneous income
received by the district, from whatever source derived. The money
borrowed and indebtedness incurred under this section shall be repaid
within the same fiscal year.
32130.1. A district is also authorized, when funds are needed to
meet current expenses of maintenance and operation, to borrow money
on certificates of indebtedness or other evidence of indebtedness in
an amount not to exceed five cents ($0.05) on each one hundred
dollars ($100) of assessed valuation of the district, the
certificates of indebtedness to run for a period not to exceed five
years and to bear interest not to exceed the rate prescribed in
Section 53531 of the Government Code.
All certificates of indebtedness or other evidence of indebtedness
shall be issued after the adoption by a three-fifths vote of the
board of directors of the district of a resolution setting forth the
necessity for the borrowing and the amount of the assessed valuation
of the district and the amount of funds to be borrowed thereon. All
certificates of indebtedness or other evidence of indebtedness shall
be offered at public sale by the board of directors of the district
after not less than 10 days advertising in a newspaper of general
circulation within the district and if no newspaper of general
circulation is printed within the district, then in a newspaper of
general circulation within the county in which the district is
located. Each sale shall be made to the bidder offering the lowest
rate of interest or whose bid represents the lowest net cost to the
district. However, the rate of interest shall not exceed the rate
prescribed in Section 53531 of the Government Code.
The certificates of indebtedness or other evidences of
indebtedness shall be signed on behalf of the district by the
presiding officer and attested by the secretary of the board of
directors of the district. The board of supervisors of the county in
which the district lies shall, at the time of fixing the general tax
levy, sometimes called the annual assessment or regular annual
assessment for the district, and in the manner for the general tax
levy provided, levy and collect annually each year until the
certificates of indebtedness or other evidences of indebtedness are
paid or until there is a sum in the treasury set apart for that
purpose sufficient to meet all sums coming due for principal and
interest on the certificates of indebtedness or other evidences of
indebtedness, tax sufficient to pay the interest on the certificates
of indebtedness as the same become due and also, to constitute a
sinking fund for the payment of the principal thereof at maturity.
The tax shall be in addition to all of the taxes levied for district
purposes and shall be placed in a certificate of indebtedness,
interest and sinking fund of the district and, until all of the
principal of the interest and certificates of indebtedness is paid,
the money in the fund shall be used for no other purpose than the
payment of the certificates of indebtedness and accruing interest
thereon.
32130.2. (a) A district may, by resolution adopted by a majority of
the district board, issue negotiable promissory notes to acquire
funds for any district purposes subject to the restrictions and
requirements imposed by this section. The maturity of the promissory
notes shall not be later than 10 years from the date thereof. The
total aggregate amount of the notes outstanding at any one time shall
not exceed 85 percent of all estimated income and revenue for the
current fiscal year, including, but not limited to, tax revenues,
operating income, and any other miscellaneous income of the district.
Indebtedness incurred pursuant to any other provision of law shall
be disregarded in computing the aggregate amount of notes that may be
issued pursuant to this section.
(b) Negotiable promissory notes may be issued pursuant to this
section for any capital outlay facility, equipment, or item which has
a useful life equal to, or longer than, the term of the notes, as
determined by the board of directors.
(c) The maximum annual interest rate which may be paid on
negotiable promissory notes shall at no time exceed the amount
authorized under Section 53531 of the Government Code.
32130.5. The first board of directors of a district may, within a
period of two years from and after the formation of the district,
pursuant to a resolution adopted by it for the purpose, borrow money
on certificates of indebtedness, promissory notes, or other evidences
of indebtedness, in anticipation of the estimated tax revenue for
the following fiscal year, to be repaid within two years from the
date of borrowing with interest at a rate not to exceed 5 percent per
annum, in order to enable the district to meet all of its necessary
initial expenses of organization, construction, acquisition,
maintenance, and operation. The total amount of money borrowed and
indebtedness incurred under this section and Section 32130 during
this two-year period shall not exceed 50 percent of the total amount
of estimated tax revenue as estimated by the county auditor or
auditors of the county or counties in which the district lies for the
following fiscal year.
The provisions of Section 32130 are applicable in respect to any
indebtedness incurred under this section to the extent that they are
consistent with this section.
32130.6. Notwithstanding any other provision of law, a district may
do any of the following by resolution adopted by a majority of the
district board:
(a) (1) Enter into a line of credit with a commercial lender that
is secured, in whole or in part, by the accounts receivable or other
intangible assets of the district, including anticipated tax
revenues, and thereafter borrow funds against the line of credit to
be used for any district purpose.
(2) Any money borrowed under this line of credit pursuant to
paragraph (1) shall be repaid within five years from each separate
borrowing or draw upon the line of credit.
(3) The district may enter into a new and separate line of credit
to repay a previous line of credit pursuant to paragraph (1),
provided that the district complies with this section in entering
into a new line of credit.
(4) Enter into a line of credit with a commercial lender for the
sole purpose of consolidating debt incurred by the district prior to
January 1, 2010. Debt incurred under this paragraph shall be repaid
within 20 years of the consolidation borrowing. The total amount of
debt that a district may have outstanding at any one time under this
paragraph shall not exc