Local ballot measures: County of Fresno., the official text

An act to amend Section 129387 of, and to amend, repeal, and add Section 129384 of, the Health and Safety Code, relating to hospitals, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL'S DIGEST

Existing law requires the Department of Health Care Access and Information to administer the Distressed Hospital Loan Program, until January 1, 2032, which provides loans to not-for-profit hospitals and public hospitals in significant financial distress or to governmental entities representing a closed hospital to prevent the closure of, or facilitate the reopening of, those hospitals. Existing law requires the department to develop a methodology to evaluate an at-risk hospital’s potential eligibility for state assistance from the program, and authorizes the methodology for determining financial distress to consider the hospital’s prior and projected performance on financial metrics, including, among other things, the amount of cash on hand. Existing law requires a hospital or a closed hospital applying for aid under this program to provide, among other things, the California Health Facilities Financing Authority and the department with financial information demonstrating the hospital’s need for financial assistance due to financial hardship.
Existing law requires the department to provide loan forgiveness or modification of loan terms to an applicant based upon criteria determined by the department and subject to the approval of the department and the authority. Existing law requires the department to establish the terms and conditions associated with accepting loan forgiveness or modification of loan terms, subject to approval of the Department of Finance.
This bill would, if an appropriation is made for this purpose, require the evaluation for loan forgiveness incorporate projections of future financial performance in addition to a hospital’s point-in-time financial condition. The bill would, if an appropriation is made for this purpose, in place of the current criteria, require the department to provide loan forgiveness to any participant of the program who received a loan award before the effective date of this act, as specified, if the department and authority determine the participant has demonstrated a good faith effort to comply with program requirements through January 1, 2026, and the financial projections demonstrate that the participant will become financially distressed as a result of loan repayments under the program or other outside factors, including, but not limited to, the impacts of the federal One Big Beautiful Bill Act.
This bill would extend the program through January 1, 2035.
This bill would declare that it is to take effect immediately as an urgency statute.

The people of the State of California do enact as follows:

SECTION 1.
Section 129384 of the Health and Safety Code is amended to read:
129384.
(a) Notwithstanding Section 15432 of the Government Code, unless subdivision (c) applies, a hospital shall be required to begin making monthly repayments of the loan after the first 18 months and shall discharge the loan within 72 months of the date of the loan.
(b) Notwithstanding any other law and to the extent permissible under federal rules, security for the cashflow loans in this chapter shall be Medi-Cal reimbursements due to the hospital from the State Department of Health Care Services. The department’s or authority’s recoupment of these cashflow loans shall not exceed 20 percent of the hospital’s respective Medi-Cal checkwrite payments until the loan amount has been satisfied. In the event that a 20-percent withhold will not result in full repayment of the loan within a 72-month period, the department may extend the repayment term of the loan.
(c) (1) The department, in consultation with the authority, and upon approval of the Department of Finance, shall develop an application and approval process for loan forgiveness or modification of the terms of the loan, including a delay of the beginning of the loan repayment period or an extension of the 72-month loan repayment term, or both. The process shall include, but is not limited to, eligibility criteria for an applicant for loan forgiveness or modification, including which portion of a loan may be forgiven or modified.
(2) The department shall provide loan forgiveness or modification of loan terms to an applicant based upon criteria determined by the department and subject to the approval of the department and the authority. The Department of Finance shall be authorized to approve any loan forgiveness and any modification of loan terms that would result in the extension of the payback period by more than one year.
(3) The department shall also establish the terms and conditions associated with accepting loan forgiveness or modification of loan terms, subject to approval of the Department of Finance.
(4) Before any action on a request for forgiveness or modification of any loan that would result in the extension of the payback period by more than one year, and again not later than 60 days after final approval or denial of the forgiveness or modification, the department shall submit to the Joint Legislative Budget Committee and relevant policy and fiscal committees of the Legislature notice of the request and the subsequent action, including a summary of the request and reason for the denial, approval, or modification.
(d) This section shall become inoperative on July 1 of the year an appropriation is made for the purpose of implementing the changes made by the bill that adds this subdivision, and repealed as of January 1, of the next year.

SEC. 2.
Section 129384 is added to the Health and Safety Code, to read:
129384.
(a) Notwithstanding Section 15432 of the Government Code, unless subdivision (c) applies, a hospital shall be required to begin making monthly repayments of the loan after the first 18 months and shall discharge the loan within 72 months of the date of the loan.
(b) Notwithstanding any other law and to the extent permissible under federal rules, security for the cashflow loans in this chapter shall be Medi-Cal reimbursements due to the hospital from the State Department of Health Care Services. The department’s or authority’s recoupment of these cashflow loans shall not exceed 20 percent of the hospital’s respective Medi-Cal checkwrite payments until the loan amount has been satisfied. In the event that a 20-percent withhold will not result in full repayment of the loan within a 72-month period, the department may extend the repayment term of the loan.
(c) (1) The department, in consultation with the authority, and upon approval of the Department of Finance, shall develop an application and approval process for loan forgiveness or modification of the terms of the loan, including a delay of the beginning of the loan repayment period or an extension of the 72-month loan repayment term, or both. The process shall include, but is not limited to, eligibility criteria for an applicant for loan forgiveness or modification, including which portion of a loan may be forgiven or modified. The criteria shall incorporate projections of future financial performance in addition to a hospital’s point-in-time financial condition.
(2) The department shall provide loan forgiveness or modification of loan terms to an applicant based upon criteria determined by the department and subject to the approval of the department and the authority. No later than two months after the effective date of the act that added subparagraphs (A) and (B), the department shall provide loan forgiveness to any participant of the program who received a loan under this chapter before the effective date of the act that added subparagraphs (A) and (B), if the department and authority determine the participant meets both of the following:
(A) The participant has demonstrated a good faith effort to comply with program requirements through January 1, 2026.
(B) Financial projections demonstrate that the participant will become financially distressed as a result of loan repayments under the program or other outside factors, including, but not limited to, the impacts of the federal One Big Beautiful Bill Act (Public Law No. 119-21).
(3) Before any action on a request for forgiveness or modification of any loan that would result in the extension of the payback period by more than one year, and again not later than 60 days after final approval or denial of the forgiveness or modification, the department shall submit to the Joint Legislative Budget Committee and relevant policy and fiscal committees of the Legislature notice of the request and the subsequent action, including a summary of the request and reason for the denial, approval, or modification.
(d) This section shall become operative on July 1 of the year an appropriation is made for the purpose of implementing the changes made by the bill that adds this section.

SEC. 3.
Section 129387 of the Health and Safety Code is amended to read:
129387.
This chapter shall remain in effect only until January 1, 2035, and as of that date is repealed.

SEC. 4.
This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to prevent further hospital closures and reductions to health care access in vulnerable communities, it is necessary that this act take effect immediately.