INFORMATION: SB 804 (Corbett) would require a health care district’s asset transfer agreement, when transferring 50 percent or more of the district’s assets to a nonprofit organization to operate and maintain them, to be fully discussed and properly noticed in at least five public meetings before the board decides to transfer the assets.

Background from the Senate Rules Committee Analysis:

Health care districts were formed under state law to meet health needs not satisfied by other health care resources or government programs in a given geographical area.  Districts formed pursuant to state law are financed assessments on real and personal property within the district.  A 2006 report published by the California Healthcare Foundation found that 85 health care and hospital districts have been formed in California since the first hospital district enabling legislation was passed in 1946.  Districts operate medical facilities, including, public health clinics, and skilled nursing facilities.  Some also provide community-based education to the residents of their districts.  Responding to changes in health care delivery, districts explore economic and organizational alternatives, including leasing or selling their assets to nonprofit corporations or even to for-profit companies.

According to the author’s office, “SB 804 will help ensure that the public has the information they need to decide about the transfer of health care district’s assets to an outside entity for less than fair market value.  Under current law, a transfer of 50 percent or more of a healthcare district’s assets requires voter approval, but there is no requirement to provide voters with an independently verified valuation of the assets in question. SB 804 remedies this problem, by requiring an independent appraisal of the fair market value of the health care district’s assets and ensuring that information is provided to the public.”