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AB-2036 Nonprofit public benefit corporations: sale of assets: health facilities.(2019-2020)

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Date Published: 02/03/2020 09:00 PM
AB2036:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2036


Introduced by Assembly Member Muratsuchi

February 03, 2020


An act to amend Section 5926 of the Corporations Code, relating to nonprofit public benefit corporations.


LEGISLATIVE COUNSEL'S DIGEST


AB 2036, as introduced, Muratsuchi. Nonprofit public benefit corporations: sale of assets: health facilities.
Existing law requires any nonprofit corporation that operates or controls a health facility or other facility that provides similar health care to provide written notice to, and to obtain the written consent of, the Attorney General prior to entering into any agreement or transaction to sell, transfer, lease, exchange, option, convey, or otherwise dispose of the asset, or to transfer control, responsibility, or governance of the asset or operation, to a for-profit corporation or entity, to a mutual benefit corporation or entity, or to a nonprofit corporation, as specified. Existing law authorizes the Attorney General to determine what information is required to be contained in the notice.
Existing law gives discretion to the Attorney General to give conditional consent to the agreement or transaction and to contract with, consult, and receive advice from any state agency on those terms and conditions that the Attorney General deems appropriate. Existing law authorizes the Attorney General to monitor ongoing compliance with the terms and conditions and to enforce the conditions to the fullest extent of the law. Under existing law, the Attorney General is entitled to specific performance, injunctive relief, and other equitable remedies a court deems appropriate for breach of any of the conditions, and to recover its attorney’s fees and costs incurred in remedying each violation.
This bill would specify that if the Attorney General imposes a condition on its consent to an agreement or transaction pursuant to the provisions described above, that condition shall remain in effect for the entire period of time specified by the Attorney General, regardless of whether the health facility is subject to an additional or subsequent sale, transfer, purchase, lease, exchange, option, conveyance, or other disposition of assets.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 Section 5926 of the Corporations Code is amended to read:

5926.
 (a) The Attorney General may enforce conditions imposed on the Attorney General’s consent to an agreement or transaction pursuant to Section 5914 or 5920 to the fullest extent provided by law. In addition to any legal remedies the Attorney General may have, the Attorney General shall be entitled to specific performance, injunctive relief, and other equitable remedies a court deems appropriate for breach of any of the conditions and shall be entitled to recover its attorney’s fees and costs incurred in remedying each violation.
(b) If the Attorney General imposes a condition on its consent to an agreement or transaction pursuant to Section 5914 or 5920, that condition shall remain in effect for the entire period of time specified by the Attorney General, regardless of whether the health facility is subject to an additional or subsequent sale, transfer, purchase, lease, exchange, option, conveyance, or other disposition of assets.