California Health and Safety Code

§ 129173

HSC § 129173 Effective Jul 27, 2021Div. 107 · Part 6 · Ch. 1 · Art. 3

Statute text

(a)In fulfilling the purposes of this article, as set forth in Section 129005, and upon making a determination that the financial status of a borrower may jeopardize a borrower’s ability to fulfill its obligations under any insured loan transaction so as to threaten the economic interest of the department in the borrower or to jeopardize the borrower’s ability to continue to provide needed health care services in its community, including, but not limited to, a declaration of default under any contract related to the transaction, the borrower missing any payment to its lender, or the borrower’s accounts payable exceeding three months, the department may assume or direct managerial or financial control of the borrower in any or all of the following ways:

(1)The department may supervise and prescribe the activities of the borrower in the manner and under the terms and conditions as the office may stipulate in any contract with the borrower.

(2)Notwithstanding the provisions of the articles of incorporation or other documents of organization of a nonprofit corporation borrower, this control may be exercised through the removal and appointment by the department of members of the governing body of the borrower sufficient so that the new members constitute a voting majority of the governing body.

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Legislative history

Amended by Stats. 2021, Ch. 143, Sec. 261. (AB 133) Effective July 27, 2021.