"Passage of AB 2599 continues to momentum toward restoring in-patient services to underserved residents in Watts-Willowbrook area by the new MLK hospital," Los Angeles County Supervisor Mark-Ridley Thomas said.
The new facility would be a private, non-profit hospital with 120 licensed beds when fully operational.
Supporters hope the new facility will open in 2013. The hospital has been closed since August 2007 after federal regulators found it unable to meet minimum standards for patient care.
An urgent care center and outpatient clinic are still operating at the site.