(a) Pursuant to this chapter, the board of supervisors may establish by ordinance the Kern County Hospital Authority, which shall be a public agency that is a local unit of government separate and apart from the county and any other public entity for all purposes. The authority established pursuant to this chapter shall file the statement required by § 53051 of the Government Code, and is a public entity for purposes of Division 3.6 (commencing with Section 810) of Title 1 of the Government Code.

(b) The purpose of the authority shall be to do all of the following:

(1) Provide management, administration, and other controls consistent with this chapter as needed to operate the medical center and maintain its status as a designated public hospital, as defined in subdivision (d) of § 14166.1 of the Welfare and Institutions Code, and for the operation of additional programs, clinics and other facilities, care organizations, health care service and physician practice plans, and delivery systems that may be affiliated or consolidated with the medical center, to ensure the viability of the health care safety net in the county in a manner consistent with the county’s requirements under § 17000 of the Welfare and Institutions Code.

(2) Provide management, administration, and other controls consistent with this chapter to negotiate and enter into contracts to provide or arrange, or provide directly, on a fee-for-service, capitated, or other basis, health care services to individuals including, but not limited to, those covered under Subchapters XVIII (commencing with Section 1395), XIX (commencing with Section 1396), and XXI (commencing with Section 1397aa) of Chapter 7 of Title 42 of the United States Code, those entitled to coverage under private group coverage, private individual coverage, including without limitation, coverage through Covered California, other publicly supported programs, those employed by public agencies or private businesses, and uninsured or indigent individuals.

(c) Subject to the requirements of this chapter, the authority shall have, and be charged with, authority for the maintenance, operation, management, control, ownership, or lease of the medical center and other health-related resources, as provided by the enabling ordinance. The State Department of Health Care Services shall take all necessary steps to ensure all of the following:

(1) The authority has all of the licenses, permits, and approvals needed to operate the medical center.

(2) The medical center continues its status as a designated public hospital to at least the same extent as it would be designated in the absence of its transfer to the authority pursuant to this chapter.

(3) The authority may participate as a contributing public agency for all of the purposes specified in Section 433.51 of Title 42 of the Code of Federal Regulations, to the extent permitted by federal law.

(d) The board of supervisors, in the enabling ordinance, shall establish the terms and conditions of the transfer to the authority from the county, including, but not limited to, all of the following:

(1) Any transfer of real and personal property, assets, and liabilities, including, but not limited to, liabilities of the medical center determined and assigned by the county for county funds previously advanced, but not repaid or otherwise recovered, to fund the operations of the medical center.

(2) Transfer of employees, including any necessary personnel transition plan, as specified in Section 101853.1, allocation of credit for funded pension assets and responsibility for any unfunded pension liabilities under the Kern County Employees’ Retirement Association, as specified in paragraph (7) of subdivision (g) of Section 101853.1, or other retirement plans, and funding of the accrued benefits of employees of the authority in the event of withdrawal from the plan or dissolution of the authority. Any allocation of credit for funded pension assets and responsibility for any unfunded pension liabilities with respect to the Kern County Employees’ Retirement Association must be approved by its governing board of retirement after consideration of legal and actuarial analysis, and no such allocation may be made that would jeopardize the qualified status of the Kern County Employees’ Retirement Association under the federal Internal Revenue Code.

(3) Maintenance, operation, management, control, ownership, or lease of the medical center.

(4) Transfer of licenses.

(5) Whether funds of the authority shall be deposited in the custody of, and paid out solely through, the county treasurer’s office.

(6) Any other matters as the board of supervisors deems necessary, appropriate, or convenient for the conduct of the authority’s activities.

(e) (1) Notwithstanding any other law, a transfer of control of the medical center to the authority may be made, with or without the payment of a purchase price by the authority, and otherwise upon the terms and conditions as found necessary by the board of supervisors and specified in the enabling ordinance to ensure that the transfer will constitute an ongoing material benefit to the county and its residents.

(2) A transfer of control of the medical center to the authority shall not be construed as empowering the authority to transfer any ownership interest of the county in any portion of the medical center except as otherwise approved by the board of supervisors.

(3) The authority shall not transfer the maintenance, operation, management, control, ownership, or lease of the medical center to any other person or entity without the prior written approval of the board of supervisors. This paragraph shall not prevent the county, by ordinance, from allowing the disposal of obsolete or surplus equipment, supplies, or furnishings of the medical center by the authority.

(4) With respect to its maintenance, operation, management, control, ownership, or lease of the medical center, the authority shall conform to both of the following requirements:

(A) Comply with any applicable requirements of § 14000.2 of the Welfare and Institutions Code.

(B) Comply with any applicable requirements of Section 1442.5.

(5) The board of supervisors may retain control of the medical center physical plant and facilities, as specifically provided for in the enabling ordinance or other lawful agreements entered into by the board of supervisors. Any lease agreement between the county and the authority shall provide that county premises shall not be sublet without the approval of the board of supervisors.

(6) Notwithstanding any other provision of this chapter, and whether or not accompanied by a change in licensing, the authority’s responsibility for the maintenance, operation, management, or control of the medical center, or any ownership or leasehold interest of the authority in the medical center, does not relieve the county of the ultimate responsibility for indigent care pursuant to § 17000 of the Welfare and Institutions Code.

(7) For purposes of Article 12 (commencing with Section 17612.1) of Chapter 6 of Part 5 of Division 9 of the Welfare and Institutions Code, and the definition set forth in subdivision (f) of § 17612.2 of the Welfare and Institutions Code, the medical center, excluding components that provide predominately public health services, and the county are affiliated governmental entities.

(f) The board of supervisors may contract with the authority for the provision of indigent care services on behalf of the county. The contract shall specify that county policies, as may be modified from time to time and consistent with the county’s obligations under § 17000 of the Welfare and Institutions Code, shall be applicable. Notwithstanding any other provision of this chapter, the authority shall not undertake any of the county’s obligations under § 17000 of the Welfare and Institutions Code, nor shall the authority have an entitlement to receive any revenue for the discharge of the county’s obligations, without a written agreement with the county. Any contract executed by and between the county and the authority shall provide for the indemnification of the county by the authority for liabilities as specifically set forth in the contract, except that the contract shall include a provision that the county shall remain liable for its own negligent acts. Indemnification by the authority shall not divest the county from its ultimate responsibility for compliance with § 17000 of the Welfare and Institutions Code.

(g) Unless otherwise agreed to by the authority and the board of supervisors or as otherwise provided by this chapter, an obligation of the authority, statutory, contractual, or otherwise, shall be the obligation solely of the authority and shall not be the obligation of the county or any other entity, and any contract executed by and between the county and the authority, or any other entity and the authority, shall contain a provision that liabilities or obligations of the authority with respect to its activities pursuant to the contract shall be the liabilities or obligations of the authority and shall not be or become the liabilities or obligations of the county or the other entity, respectively. An obligation of the authority, statutory, contractual, or otherwise, shall not be the obligation of the state.

(h) The authority shall not be a “person” subject to suit under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code).

(i)  The authority is not subject to the jurisdiction of a local agency formation commission pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (Division 3 (commencing with Section 56000) of Title 5 of the Government Code), or any successor statute.

(j) The authority is a “district” within the meaning set forth in the County Employees Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3 of the Government Code). Employees of the authority are eligible to become members or maintain membership, as applicable, in the Kern County Employees’ Retirement Association, to the extent described in subdivision (g) of Section 101853.1.

(k) Any determination with respect to the manner in which the authority qualifies as a governmental plan sponsor under Section 414(d) of the Internal Revenue Code shall be limited to relevant employee benefits purposes of that code only, and shall not change or otherwise modify the authority’s status as a public agency that is a local unit of government for other purposes specified in this chapter.

(Amended by Stats. 2015, Ch. 790, Sec. 3. (AB 1350) Effective January 1, 2016.)