Part 6. Other of California Health And Safety Code >> Division 101. >> Part 6.

This chapter shall be known and may be cited as the Voluntary Health Facility and Clinic Philanthropic Support Act.

The Legislature finds and declares that, while there continues to be a need to focus on the deficiencies in the health care system and on corrective reform measures that might be taken, there is also need for focus on the enhancement of its strengths. Existing philanthropic support for health facilities and clinics is a strength that must be preserved and enhanced under any reform measure for all of the following reasons:
  (a) Philanthropy imbues members of the community with a sense of pride in their voluntary nonprofit health facilities and clinics and creates a setting in which members of the community are willing to devote time and effort to improve health care available in the community in a way that government regulation could never replace.
  (b) Philanthropy allows voluntary nonprofit institutions to conduct research and to engage in other innovative efforts to improve health care in California.
  (c) Philanthropy provides required discretionary dollars for voluntary nonprofit institutions, that, in part, substitute for the absence of profits.
  (d) Philanthropy allows hospitals to replace worn out and obsolete facilities when, in a period of high inflation, historical costs accumulated through depreciation are totally insufficient to provide for the replacement.
  (e) Philanthropy pays for necessary expenditures that otherwise would have to be paid by patients or by government.
  (f) Philanthropy may be discouraged by certain shortsighted actions of administrative agencies that, while purporting to serve a short-term purpose, seriously deter the vast benefits to the health care field inuring directly from philanthropy and voluntarism.
  (g) Recent amendments to the federal tax laws to broaden the use of the standard deduction also have the effect of eliminating important incentives for philanthropy.

It is, therefore, the intent of the Legislature to create an environment in which philanthropy and voluntarism in the health care field and the vast benefits arising from it for the citizens of California can be encouraged. The Legislature hereby declares it to be the policy of this state that philanthropic support for health care be encouraged and expanded, especially in support of experimental and innovative efforts to improve the health care delivery system.

For purposes of any state law, whether enacted before or on or after January 1, 1980, that in any manner provides for regulation, review, or reporting of the budget, rates, or revenues of health facilities, as defined in Section 1250, or clinics, as defined in Section 1204, including the provisions of Part 1.7 (commencing with Section 440), none of the following shall be treated directly, or indirectly, as revenues allocable to the cost of care provided by the health facility or clinic:
  (a) A donor-designated or restricted grant, gift, endowment, or income therefrom, as defined in Section 405.423(b) of Title 42 of the Code of Federal Regulations, insofar as permitted by federal law.
  (b) A grant or gift, or income from a grant or gift, that is not available for use as operating funds because of its designation by the governing board or entity of the health facility or clinic.
  (c) A grant or similar payment that is made by a governmental entity and that is not available, under the terms of the grant or payment, for use as operating funds.
  (d) Amounts attributable to the sale or mortgage of any real estate or other capital assets of the health facility or clinic that it acquired through a gift or grant, and that are not available for use as operating funds under the terms of the gift or grant or because of designation as provided in subdivision (b).
  (e) A depreciation fund that is created by the health facility or clinic in order to meet a condition imposed by a third party for the third party's financing of a capital improvement of the health facility or clinic, provided the fund is used exclusively to make payments to the third party for the financing of the capital improvement.
  (f) Funds used to defray the expense of fundraising.

No state law shall be construed to discourage philanthropic support of health facilities and clinics, or to otherwise hinder the use of this support for purposes determined by the recipients to be in the best interests of the physicians and patients it serves. However, in enacting this chapter and Section 14106.2 of the Welfare and Institutions Code, the Legislature does not intend to place any restrictions on cost containment measures relating to health facilities that may be enacted in the future.