A bill designed to make the California Health Facilities Financing Authority a more attractive option for hospitals looking for a conduit issuer cleared the state Senate Tuesday on a 25-to-13 vote. SB 1221 moved to the Assembly.
The bill was introduced at the request of state Treasurer Bill Lockyer, who chairs the CHFFA board and whose office staffs the agency.
The bill requires hospitals seeking tax-exempt financing through CHFFA or any local government or joint-powers authority to demonstrate the “performance of significant community service,” according to a report by Senate staff.
It is designed to establish the same community benefit requirements for all conduit issuers of hospital debt. Lockyer contends that CHFFA is harmed by vague public benefit requirements that don’t apply to other issuers.
“CHFFA’s borrower base has taken their business to other conduit issuers who are not required to operate under this vague intent language,” Lockyer said in a written argument in favor of the bill.
During the bill’s journey through the Senate, it was amended to exclude children’s hospitals from the community service requirement.
