BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                   SB 306|
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                              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  
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          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.
           

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          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.

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          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  

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                   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  

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                      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. 


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          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,  

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            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

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