0977 Health Facilities Financing Authority
40 - HEALTH FACILITIES GRANTS AND LOANS
CHFFA serves as a conduit provider of tax-exempt bonds and a direct provider of financial assistance to health institutions via 1) a loan program referred to as HELP II; 2) two clinic grant programs referred to as Cedillo-Alarcon and Anthem WellPoint; and 3) the newly enacted CHAMP program. With the exception of the CHAMP program governed by Government Code section 15438.10, to qualify for funding under any of the other mentioned programs, the proposed project must be a health facility, operated by a private nonprofit corporation or association, city, city and county, county, or hospital district. Numerous statutes enacted between 1983 and 2002 have since broadened the types of health facilities that may receive financing from CHFFA under these programs.
Tax-Exempt Bond Program
CHFFA may authorize an unlimited amount of revenue bond financing. Prior to September 30, 1998, CHFFA was only authorized to have outstanding at any one point-in-time up to $5.999 billion in tax-exempt revenue bonds. Chapter 1035, Statutes of 1998 eliminated this cap. As of June 30, 2012, bonds and notes in the amount of $28.7 billion had been issued and $11.9 billion was outstanding.
Bonds issued under this conduit program are not a debt or liability or a pledge of the full faith and credit of the taxing power of the state or any of its political subdivisions. The full faith and credit of the participating institutions are pledged for repayment of the bonds. The Federal Tax Reform Act of 1986 does not restrict conduit health facility bonds in terms of the state's "private activity" bond limit.
Clinic Grant Programs
Chapter 99, Statutes of 2000, established the Cedillo-Alarcon Community Clinic Investment Act of 2000 and allocated $50 million dollars to CHFFA for the purpose of awarding grants to eligible primary care clinics for capital outlay projects. Funds of approximately $50 million were disbursed. Residual funds remained and so the Legislature amended the Act in 2005 to authorize CHFFA to disburse the remaining funds to eligible clinics.
In 2004, as part of the Anthem-Well Point merger, $35 million dollars was allocated to CHFFA for the purpose of awarding grants to eligible health care facilities providing service to under served communities throughout California. Distribution of these funds was to be accomplished through the same process established for the above referenced Cedillo-Alarcon Community Clinic Investment Act of 2000. In 2005, the Insurance Commissioner entered into an memorandum of understanding with CHFFA authorizing CHFFA to disburse the funds to clinics. Though all funds have been awarded, funds in the amount of $274,976 remain to be disbursed and are contingent upon the clinics providing relevant documentation evidencing completion of their projects.
Between these two clinic grant programs, as of June 30, 2012, CHFFA has disbursed the sum of $92 million (including the accumulated interest of roughly $7 million), to 370 clinics throughout the state.
HELP II Loan Program
CHFFA administers the Healthcare Expansion Loan Program II (HELP II) to assist small and rural health facilities in obtaining otherwise difficult and costly to obtain financing for their capital needs. The HELP II Financing Program provides three percent (3%), fixed interest loans of up to $1,000,000 to California's nonprofit small and rural health facilities in an efficient, timely, and cost effective manner. HELP II loans may be used to purchase or construct new facilities, remodel or renovate existing facilities, and purchase equipment or furnishings. Since the program's inception in 1988 and as of June 30, 2012, CHFFA has loaned $83.7 million to small and rural health facilities. In April 2012, the CHFFA board raised the maximum loan amount facilities can receive under HELP II from $750,000 to $1,000,000. Applications are accepted on a monthly basis.
California Health Access Model Program
Chapter 23, Statutes of 2012, Government Code section 15438.10 authorized CHAMP, a new grant program, intended to support innovative methods of delivering health care services more effectively, and improving access and health outcomes for vulnerable populations and communities by bringing service, including preventative services, to individuals where they live or congregate.
CHAMP's initial grant phase will fund one or more demonstration projects, up to a combined total of $1.5 million from the Authority's fund balance. If the evaluation of the completed demonstration project(s) demonstrates it is warranted, CHAMP will launch a second phase to support additional grants up to a combined total of $5 million, also from the Authority's fund balance, so other California communities can implement the same improved methods for delivering services.