SAN LEANDRO -- A bill aimed at increasing accountability and charity care provided by California's nonprofit hospitals has gained the support of the City Council.

The council on Monday passed a resolution in support of AB975, legislation authored by Assemblyman Rob Bonta, D-Oakland, and Assemblyman Bob Wieckowski, D-Fremont, that would require nonprofit hospitals to justify their tax-exempt status if operating revenues exceed expenses by more than 10 percent. It would also prohibit hospitals from counting promotional activities, research and unpaid bills written off as bad debt as charity care.

The council's support puts it at odds with Kaiser Permanente, which is building a new medical center in the city, and Sutter Health, which owns and operates San Leandro Hospital.

Fears surrounding the possible closure of San Leandro Hospital by Sutter made Monday night's vote a personal one for some.

Councilman Jim Prola said he has supported the bill "ever since Sutter treated our city so shabbily, where they made millions of dollars over, I don't know how many years, and then they redlined us basically."

Mike Brannan, spokesman for the California Nurses Association, told the council, "We are currently subsidizing this hospital chain (Sutter) that is trying to close our community hospital and has been for the last six years. That alone should be motivation for you to vote to support this resolution
to provide clarity to the law."

Sutter spokeswoman Stacey Wells said Tuesday she discouraged supporting a change in state law based on fears about the closure of San Leandro Hospital. She said all options are being considered following millions of dollars in losses each month at the hospital, but no decisions have been made.

"Regardless of how you feel at the moment regarding extenuating circumstances, we do a lot of good for thousands of people in a heavily regulated industry that has a lot of constraints," Wells said. Sutter provided $210 million in community benefit services in the East Bay in 2012, including $42.7 million in charity care for the poor and uninsured and $144.5 million in unfunded services to Medi-Cal patients, she said.

Ana Apodaca, Kaiser's community and government relations manager, told the council on Monday that Kaiser spent $1.4 billion on community benefit efforts last year in the state.

"The bill will have unintended consequences and our community benefit program will be in jeopardy," she said, including local support for Davis Street Family Resource Center, Girls Inc., San Leandro Unified, Building Futures with Women and Children and others.

Bonta's District Director Jim Oddie told the council the bill is "all about transparency and accountability."

Ashly McGlone covers San Leandro, San Lorenzo and the Washington Township Health Care District. Contact her at 510-293-2463. Follow her at Twitter.com/AshlyReports.