BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 306| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 306 Author: Ducheny (D) Amended: 9/7/07 Vote: 21 SENATE HEALTH COMMITTEE : 10-0, 4/11/07 AYES: Kuehl, Aanestad, Alquist, Cedillo, Cox, Maldonado, Ridley-Thomas, Steinberg, Wyland, Yee NO VOTE RECORDED: Negrete McLeod SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SENATE FLOOR : 36-0, 5/24/07 AYES: Aanestad, Ackerman, Alquist, Ashburn, Calderon, Cedillo, Cogdill, Corbett, Correa, Cox, Denham, Ducheny, Dutton, Hollingsworth, Kehoe, Kuehl, Machado, Maldonado, Margett, McClintock, Migden, Negrete McLeod, Oropeza, Padilla, Perata, Ridley-Thomas, Romero, Runner, Scott, Simitian, Steinberg, Torlakson, Vincent, Wiggins, Wyland, Yee NO VOTE RECORDED: Battin, Florez, Harman, Lowenthal ASSEMBLY FLOOR : 70-2, 9/10/07 - See last page for vote SUBJECT : Health facilities: seismic safety SOURCE : Author DIGEST : This bill amends the Alfred E. Alquist Hospital Facilities Seismic Safety Act to permit hospitals to delay CONTINUED SB 306 Page 2 compliance with the July 1, 2008 seismic retro deadline, and the 2013 extension, to the year 2020, by filing a declaration with the Office of Statewide Health Planning and Development that the owner lacks financial capacity to comply with the law. Assembly Amendments provide SPC-1 hospitals that demonstrate an inability to attain financing for capital projects, and that are essential providers in underserved communities, with the option to rebuild to 2030 standards by 2020, rather than meet the interim 2008/2013 retrofitting deadlines. ANALYSIS : Existing law: 1. Requires the Office of Statewide Health Planning and Development (OSHPD) to approve or reject all plans for the construction or the alteration of hospital buildings, as defined, and to impose an application filing fee that will cover the costs of reviewing and approving hospital construction plans. 2. Requires OSHPD to adopt regulations and standards to administer its responsibilities and to submit building standards, relating to seismic safety for hospital buildings, to the California Building Standards Commission for adoption and approval, and also requires OSHPD to inspect hospital buildings and construction or alteration projects, as necessary, to ensure that such buildings comply with applicable standards. 3. Establishes timelines for hospital compliance with seismic safety standards. By January 1, 2008, buildings posing a significant risk of collapse and a danger to the public must be rebuilt or retrofitted to be capable of withstanding an earthquake, or be removed from acute care service. By January 1, 2030, hospital buildings must be capable of remaining intact after an earthquake, and must also be capable of continued operation and provision of acute care medical services, or else be changed to non-acute care use. CONTINUED SB 306 Page 3 4. Allows OSHPD to grant delays of up to five years past the 2008 deadline under certain circumstances, including upon a demonstration that compliance will result in a loss of health care capacity that may not be provided by other general acute care hospitals within a reasonable proximity. 5. Authorizes an extension of up to an additional two years for hospitals that have already received extensions of the January 1, 2008 seismic safety compliance deadline, if specified criteria are met, including that the hospital building is under construction at the time of the request for extension and the hospital is making reasonable progress toward meeting its deadline, but factors beyond the hospital's control make it impossible for the hospital to meet the deadline. 6. Requires owners of general acute care hospital buildings that do not meet the 2008 requirement to submit reports to OSHPD describing their progress in complying with the 2008 or 2013 deadlines, as specified. 7. Requires the California Building Standards Commission to review and adopt earthquake performance categories, seismic evaluation procedures, and standards and timeframes for upgrading structural and nonstructural systems in hospital buildings. 8. Allows OSHPD to enter into contracts with qualified persons or entities in order to facilitate the timely performance of the duties and responsibilities relating to the review and inspection of hospital building construction or alteration. 9. Requires OSHPD to assess the processing time for plan review and to provide an update on this assessment to the appropriate policy and fiscal committees of the Legislature no later than February 1, 2007, and annually thereafter. OSHPD must also, contingent on an appropriation in the annual budget, establish a program for training fire and life safety officers, in order to provide a sufficient number of qualified persons to facilitate the timely performance of its duties and responsibilities. CONTINUED SB 306 Page 4 This bill: 1. Permits a hospital owner to comply with seismic safety deadlines and requirements in current law by replacing all of its buildings subject to seismic retrofit by January 1, 2020, rather than retrofitting by 2013, and then replacing them by 2030, if the hospital owner meets all of the following conditions: A. The hospital owner has requested an extension of the 2008 and 2013 seismic safety deadlines. B. OSHPD certifies that the hospital owner lacks the financial capacity to meet seismic standards, providing the hospital owner provides specified financial information to OSHPD by January 1, 2009, including information filed annually with OSHPD that shows that the owner meets all of the following financial conditions: (1) The owner's net long term debt to capitalization ratio, as measured by the ratio of long term debt to long term equity, was above 60 percent. (2) The owner's annual debt service coverage, as measured by the ratio of net income plus depreciation expense plus interest expense to current maturities on long term debt, was below 4.5 percent. (3) The owner's cash to debt ratio, as measured by the ratio of cash plus marketable securities plus limited use cash plus limited use investments to current maturities on long term debt plus net long term debt, was below 90 percent. C. The hospital files with OSHPD by January 1, 2009, a declaration that the hospital for which the owner is seeking relief satisfies all of the following conditions: (1) Maintains a Medi-Cal contract with the CONTINUED SB 306 Page 5 California Medical Assistance Commission (CMAC), unless in an open area where CMAC does not contract. (2) Maintains at least basic emergency medical services if the hospital provided such services as of July 1, 2007. (3) The hospital meets any of the following criteria: (a) The hospital is located within a Medically Underserved Area or a Health Professions Shortage Area designated by the federal government, as specified. (b) OSHPD determines, by means of a health impact assessment, that removal of the building or buildings from service may diminish significantly the availability or accessibility of health care services to an underserved community. (c) CMAC determines that the hospital is an essential provider of Medi-Cal services in the hospital's service area. (d) The hospital demonstrates that, based on annual utilization data submitted to the office for 2006 or later, the hospital had in one year over 30 percent of all discharges for either Medi-Cal or indigent patients in the county in which the hospital is located. (e) By January 1, 2013, the hospital submits a building plan for each building deemed ready for review. (f) The hospital receives a building permit to begin construction by January 1, 2015. (g) The hospital submits a construction timeline within six months of receipt of the CONTINUED SB 306 Page 6 building permit that identifies at least all of the following: (i) Each building that is subject to the January 1, 2008 deadline. (ii) The project number or numbers for replacement of each building. (iii) The projected construction start date or dates and projected construction completion date(s). (iv) The building or buildings to be removed from acute care. (v) The estimated cost of construction. (vi) The name of the contractor. (h) Every six months thereafter, the hospital reports to OSHPD on the status of the project, including any delays or circumstances that could materially affect the estimated completion date. (i) The hospital pays to OSHPD an additional fee, to be determined by OSHPD, sufficient to cover the additional cost incurred for maintaining all reporting requirements under this bill, including but not limited to the costs of reviewing and verifying the financial information submitted to OSHPD. Prohibits the fee from including any cost for review of the plans or other duties related to receiving a building or occupancy permit. (j) Provides that a hospital filing a declaration pursuant to this bill but failing to meet any of the deadlines be deemed in violation and subject to loss of licensure. CONTINUED SB 306 Page 7 2. Permits OSHPD to approve extension of the deadlines for a hospital that is classified as a nonconforming Structural Performance Category (SPC)-1 building, and is owned by a county, city, or county and city, that has requested an extension of the July 1, 2008 deadline to file a declaration by June 30, 2009, if the owner files a declaration with the office that as of the date of that filing the owner lacks the financial capacity to meet the January 1, 2008 deadline for that building. Requires the declaration to set forth the commitment of the hospital to replace those buildings by 2020 with other buildings that meet SPC-5. 3. Requires OSHPD to prepare and provide to the Legislature prior to April 1, 2008, a report that details how the field review and approval process, as specified, will be implemented without undue delay. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 9/11/07) American Federation of State, County and Municipal Employees, AFL-CIO California Hospital Association City of San Diego Daughters of Charity Health System Service Employees International Union Stanford Hospital The American Institute of Architects California Council University of California OPPOSITION : (Verified 9/11/07) California Nurses Association ASSEMBLY FLOOR : AYES: Adams, Aghazarian, Anderson, Arambula, Bass, Beall, Benoit, Berg, Berryhill, Brownley, Caballero, Carter, Cook, Coto, Davis, De La Torre, De Leon, DeSaulnier, DeVore, Duvall, Dymally, Emmerson, Evans, Feuer, Fuentes, Fuller, Gaines, Galgiani, Garcia, Garrick, Hernandez, CONTINUED SB 306 Page 8 Horton, Houston, Huff, Huffman, Jeffries, Jones, Karnette, Keene, Krekorian, La Malfa, Laird, Leno, Levine, Ma, Maze, Mendoza, Mullin, Nakanishi, Niello, Parra, Plescia, Portantino, Price, Sharon Runner, Ruskin, Salas, Saldana, Silva, Smyth, Solorio, Soto, Spitzer, Swanson, Torrico, Tran, Villines, Walters, Wolk, Nunez NOES: Blakeslee, Charles Calderon NO VOTE RECORDED: Eng, Hancock, Hayashi, Lieber, Lieu, Nava, Strickland, Vacancy CTW:mw 9/11/07 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED