CA AB2737

Establishes new Chapter 8 in the Health and Safety Code defining and regulating "nonprovider health care districts" that do not directly provide health services, have not received property tax allocations in three years, hold $20 million or more in assets, and are not in rural underserved areas.

Requires nonprovider health care districts to spend at least 80% of their annual budget on community grants to organizations providing direct health services and limits administrative expenses to no more than 20% of annual budget.

Mandates that nonprovider health care districts first pay any amounts required by final judgments, court orders, or arbitration awards before allocating funds to grants or administrative expenses.

Provides that if the Commission on State Mandates determines the bill imposes state-mandated costs, reimbursement shall be made pursuant to existing statutory procedures under Government Code Section 17500 et seq.