Legal Alerts Oct 23, 2018

Health Care Districts Facing New Requirements Under AB 2019

Impacts to Information Sharing, Grant Policies and More

Health Care Districts Facing New Requirements Under AB 2019

Assembly Bill 2019, signed into law last month by Gov. Jerry Brown, imposes additional requirements on California’s health care districts. Specifically, the bill requires health care districts to post additional information online, develop specific grant policies and notify their local agency formation commission if they file for bankruptcy. In addition, for certain health care districts authorized to use the design-build process for the construction of housing, it requires that a certain percentage of affordable units for low-income housing be set aside in the development.
Under prior law, health care districts were mandated by Health & Safety Code section 32139 to maintain a website listing contact information for the district, AB 2019 significantly expands the information that must be shared. Health care districts must now post the following information on their websites:

  • the district’s annual budget,
  • a list of current board members,
  • information regarding public meetings,
  • recipients of grant funding or assistance provided by the district,
  • the district’s policy for providing grants or assistance and
  • audits, financial reports and municipal service reviews or LAFCO studies, if any, or a link to another government website containing this information.

Furthermore, for health care districts that provide assistance or grant funding, the bill requires these districts to adopt annual policies that include the following elements (in addition to the current requirement that the policy describes the nexus between the assistance or grant funding and the district’s mission):

  • the requirements that a grant recipient must meet, such as grant contract terms and conditions, fiscal and programmatic monitoring by the district and reporting to the district,
  • the district’s plan for distributing grant funds for each fiscal year,
  • a process for providing, accepting and reviewing grant applications and
  • a prohibition against individual meetings regarding grant applications between a grant applicant and a district board member, officer or staff member outside of the district’s established awards process.

AB 2019 also requires districts to develop additional grant guidelines for all of the following by Jan.1, 2020:

  • awarding grants to underserved individuals and communities and the organizations that serve them,
  • evaluating the financial need of applicants,
  • considering the types of programs eligible for funding,
  • considering the circumstances under which grants may be provided to prior grant recipients,
  • funding other government agencies and
  • awarding grants to, and limiting funds for, foundations that are associated with a separate grant recipient.

For the few health care districts involved in residential construction, AB 2019 requires districts using the design-build procurement process to construct housing to set aside 20 percent of these units for low-, very low- and extremely low-income households. However, certain construction is exempt. This includes health or retirement facilities that exclusively provide care or supportive services to the elderly, disabled adults or individuals with dementia, and for the construction of workforce housing that is otherwise required by local ordinance. Further, if a local ordinance requires a higher percentage of units to be set aside, the district must abide by that ordinance.
For more information about this legislation, please contact the authors of this Legal Alert listed at the right in the firm’s Health Care  practice group or your BB&K attorney.
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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

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