(a) This section shall be known, and may be cited, as the Clinic Lifeline Act of 2017.

(b) The Legislature finds and declares all of the following:

(1) Small and rural health facilities, including community-based clinics, may be adversely financially affected by a reduction or elimination of federal government assistance. Working capital is necessary for these health facilities, which provide health care regardless of the ability to pay for services, to continue to support the health care needs of vulnerable populations in California.

(2) The failure to adequately fund small and rural health facilities may result in significant costs to the state in the form of unnecessary emergency room visits. The lack of preventive care results in significant costs when patients become severely ill.

(3) The lack of access to working capital threatens the quality, accessibility, and availability of the services provided by health care facilities.

(4) The state’s health care system is reliant upon those health care facilities that serve vulnerable populations, such as the indigent, underinsured, uninsured, underserved, and undocumented immigrant populations.

(5) It is the intent of the Legislature to assist those small or rural health facilities that may be adversely financially affected by a reduction or elimination of federal government assistance and that have little to no access to working capital.

(c) The authority shall award grants to eligible health facilities, as defined in subdivision (d) of Section 15432, that meet at least one of the following requirements:

(1) The health facility is operated by a tax-exempt nonprofit corporation that is licensed to operate the health facility by the State of California, and the annual gross revenue of the health facility does not exceed ten million dollars ($10,000,000).

(2) The health facility is operated by a tax-exempt nonprofit corporation that is licensed to operate the health facility by the State of California, and the health facility is located in a rural medical service study area, as defined by the California Healthcare Workforce Policy Commission.

(3) The health facility is a clinic operated by a district hospital or health care district.

(d) Grants under this section may be used for working capital for core operating support.

(e) The authority shall develop selection criteria and a process for awarding grants under this section. The authority may consider the following factors when selecting grant recipients and determining grant amounts:

(1) The percentage of total expenditures attributable to uncompensated care provided by an applicant.

(2) The extent to which the grant will contribute toward continuation of health care access by indigent, underinsured, uninsured, underserved, and undocumented immigrant populations.

(3) The need for the grant based on the applicant’s total net assets.

(4) The adverse financial impact to the applicant as a result of any reduction or elimination of federal government assistance.

(5) The applicant’s lack of access to working capital.

(6) The geographic location of the applicant, in order to maximize broad geographic distribution of funding or assist health facilities in underserved areas.

(7) Other factors, as determined by the authority.

(f) A grant to a health facility shall not exceed two hundred fifty thousand dollars ($250,000).

(g) The Lifeline Grant Program Subfund is hereby created within the California Health Facilities Financing Authority Fund. Twenty million dollars ($20,000,000) shall be transferred to the Lifeline Grant Program Subfund from the subfund within the California Health Facilities Financing Authority Fund that is used to fund the Health Expansion Loan Program II. Only moneys that are not otherwise obligated or impressed with a trust for other purposes may be transferred into the Lifeline Grant Program Subfund. Twenty million dollars ($20,000,000) in the Lifeline Grant Program Subfund is hereby appropriated to the authority to use for the purposes of this section, and shall be available for encumbrance or expenditure until June 30, 2020. Moneys remaining in the subfund as of June 30, 2022, shall revert to the originating subfund.

(h) (1) The authority shall adopt regulations as it deems necessary to implement this section.

(2) The authority may adopt regulations to implement this section as emergency regulations in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1). The adoption of the regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.

(i) This section shall remain in effect only until January 1, 2023, and as of that date is repealed.

(Added by Stats. 2017, Ch. 52, Sec. 1. (SB 97) Effective July 10, 2017. Repealed as of January 1, 2023, by its own provisions.)