BILL NUMBER: AB 411	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 6, 2009
	AMENDED IN ASSEMBLY  APRIL 16, 2009

INTRODUCED BY   Assembly Members Garrick and Harkey

                        FEBRUARY 23, 2009

   An act to  amend Section 130061.5 of   add
Section 130061.3 to  the Health and Safety Code, relating to
health facilities.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 411, as amended, Garrick. Health facilities: seismic safety.
   Existing law, the Alfred E. Alquist Hospital Facilities Seismic
Safety Act of 1983, establishes, under the jurisdiction of the Office
of Statewide Health Planning and Development, a program of seismic
safety building standards for certain hospitals constructed on and
after March 7, 1973. Existing law authorizes the office to assess an
application fee for the review of facilities' design and
construction, and requires that full and complete plans be submitted
to the office for review and approval.
   Existing law requires that, after January 1, 2008, any general
acute care hospital building that is determined to be a potential
risk of collapse or pose significant loss of life be used only for
nonacute care hospital purposes, except that the office may grant an
extension under prescribed circumstances. Existing law allows certain
hospital owners who do not have the financial capacity to bring
certain buildings into compliance by 2013 to, instead, replace those
buildings by January 1, 2020.
   This bill would  allow an extension of the 2020
replacement deadline for a hospital owned or operated by a health
district where a ballot measure for bond financing to fund compliance
and has been rejected by the voters of the district  
require a health care district that has been denied an extension of
the seismic retrofit and replacement deadlines to make a specified
report to the office  . 
   Because this bill would impose additional duties upon local
officials, this bill would create a state-mandated local program.
 
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 130061.3 is added to the 
 Health and Safety Code   , to read:  
   130061.3.  On or before March 1, 2010, a health care district
established pursuant to Division 23 (commencing with Section 32000)
that owns or operates a general acute care hospital building and has
been denied a request for an extension of the seismic retrofit and
replacement deadlines shall report to the office both of the
following:
   (a) The health care district's efforts to comply with the seismic
retrofit and replacement deadlines, including, but not limited to,
the reassessment of the structural performance level of a general
acute care hospital building owned by the health care district.
   (b) The health care district's efforts to secure passage of a
local bond measure to fund seismic safety compliance, including the
failure or passage of a ballot measure to approve the issuance of
these bonds, the extent to which the number of voters who voted in
favor the ballot measure exceeded 50 percent of the votes cast but
failed to reach the percentage of votes required for passage and the
extent to which the vote requirement is a barrier to the ability of
the health care district to obtain necessary revenues to comply with
the seismic safety deadlines and standards. 
   SEC. 2.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.  
  SECTION 1.    Section 130061.5 of the Health and
Safety Code is amended to read:
   130061.5.  (a) The Legislature finds and declares the following:
   (1) By enacting this section, the Legislature reinforces its
commitment to ensuring the seismic safety of hospitals in California.
In order to meet that commitment, this section provides a mechanism
for hospitals that lack the financial capacity to retrofit Structural
Performance Category-1 (SPC-1) buildings by 2013 to, instead,
redirect available capital and borrowing capacity to replace those
building by 2020. The mechanism is intended to allow these hospitals
to meet the seismic requirements, and provide state agencies and the
public with more timely and detailed information about the progress
these hospitals are making toward seismic safety compliance.
   (2) This section requires hospitals seeking this assistance to
demonstrate that their financial condition does not allow them to
retrofit these buildings by 2013, and requires them to meet specified
benchmarks in order to be eligible for the extended timelines set
forth in this section. Failure to meet any of these benchmarks shall
result in the hospital being noncompliant and subject the hospital to
loss of licensure.
   (3) It is the intent of the Legislature to ensure the continuation
of services in medically underserved communities in which the
closure of the hospital would have significant negative impacts on
access to health care services in the community.
   (4) It is also the intent of the Legislature that this section be
implemented very narrowly to target only facilities that are
essential providers in underserved communities and that lack the
financial capacity to retrofit SPC-1 buildings by 2013.
   (b) A hospital owner may meet the requirements of subdivision (a)
of Section 130060 by replacing all of its buildings subject to that
subdivision by January 1, 2020, if the hospital owner meets all of
the following conditions:
   (1) The hospital owner has requested an extension of the deadline
described in subdivision (a) or (b) of Section 130060.
   (2) (A) The office certifies that the hospital owner lacks the
financial capacity to meet the requirements of subdivision (a) of
Section 130060 for that building. In order to receive the
certification, the hospital owner shall file with the office by
January 1, 2009, financial information as required by the office.
This information shall include a schedule demonstrating that, as of
the end of the hospital owner's most recent fiscal year for which the
hospital owner has filed annual financial data with the office by
July 1, 2007, the hospital owner's annual financial data for that
fiscal year show that the hospital owner meets all of the following
financial conditions:
   (i) The owner's net long-term debt to capitalization ratio, as
measured by the ratio of net long-term debt to net long-term debt
plus equity, was above 60 percent.
   (ii) The owner's debt service coverage, as measured by the ratio
of net income plus depreciation expense plus interest expense to
current maturities on long-term debt plus interest expense, was below
4.5.
   (iii) 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.
   (B) The office shall certify that a hospital owner applying for
relief under this subdivision meets each of these financial
conditions. For the purposes of this subdivision, a hospital owner
shall be eligible for certification only if the annual financial data
required by this paragraph for the hospital owners and all of its
hospital affiliates, considered in total, meets all of these
financial conditions. For purposes of this section, "hospital
affiliate" means any hospital owned by an entity that controls, is
controlled by, or is under the common control of, directly or through
an intermediate entity, the entity that owns the specified hospital.
The applicant hospital owner shall bear all costs for review, but
not to exceed the costs of review, of its financial information.
   (3) The hospital owner files with the office, by January 1, 2009,
a declaration that the hospital for which the hospital owner is
seeking relief under this subdivision shall satisfy all of the
following conditions:
   (A) The hospital shall maintain a contract with the California
Medical Assistance Commission (CMAC) under the selective provider
contracting program, unless in an open area as established by CMAC.
   (B) The hospital shall maintain at least basic emergency medical
services if the hospital provided emergency medical services at the
basic or higher level as of July 1, 2007.
   (C) The hospital meets any of the following criteria:
   (i) The hospital is located within a Medically Underserved Area or
a Health Professions Shortage Area designated by the federal
government pursuant to Sections 330 and 332 of the federal Public
Health Service Act (42 U.S.C. Secs. 254b and 254e).
   (ii) The office 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.
   (iii) The CMAC determines that the hospital is essential to
providing and maintaining Medi-Cal services in the hospital's service
area.
   (iv) 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.
   (4) The hospital owner submits, by January 1, 2010, a facility
master plan for all the buildings that are subject to subdivision (a)
of Section 130060 that the hospital intends to replace by January 1,
2020. The facility master plan shall identify at least all of the
following:
   (A) Each building that is subject to subdivision (a) of Section
130060.
   (B) The plan to replace each building with buildings that would be
in compliance with subdivision (a) of Section 130065.
   (C) The building or buildings to be removed from acute care
service and the projected date or dates of that action.
   (D) The location for any new building or buildings, including, but
not limited to, whether the owner has received a permit for that
location. The replacement buildings shall be planned within the same
service area as the buildings to be removed from service.
   (E) A copy of the preliminary design for the new building or
buildings.
   (F) The number of beds available for acute care use in each new
building.
   (G) The timeline for completed plan submission.
   (H) The proposed construction timeline.
   (I) The proposed cost at the time of submission.
   (J) A copy of any records indicating the hospital governing board'
s approval of the facility plan.
   (5) By January 1, 2013, the hospital owner submits to the office a
building plan that is deemed ready for review by the office, for
each building.
   (6) By January 1, 2015, the hospital owner receives a building
permit to begin construction for each building that the owner intends
to replace pursuant to the master plan.
   (7) Within six months of receipt of the building permit, the
hospital owner submits a construction timeline that identifies at
least all of the following:
   (A) Each building that is subject to subdivision (a) of Section
130060.
   (B) The project number or numbers for replacement of each
building.
   (C) The projected construction start date or dates and projected
construction completion date or dates.
   (D) The building or buildings to be removed from acute care.
   (E) The estimated cost of construction.
   (F) The name of the contractor.
   (8) Every six months thereafter, the hospital owner reports to the
office on the status of the project, including any delays or
circumstances that could materially affect the estimated completion
date.
   (9) The hospital owner pays an additional fee to the office, to be
determined by the office, sufficient to cover the additional cost
incurred by the office for maintaining all reporting requirements
established under this section, including, but not limited to, the
costs of reviewing and verifying the financial information submitted
pursuant to paragraph (2). This additional fee shall not include any
cost for review of the plans or other duties related to receiving a
building or occupancy permit.
   (c) The office may also approve an extension of the deadline
described in subdivision (a) or (b) of Section 130060 for a general
acute care hospital building that is classified as a nonconforming
SPC-1 building and is owned or operated by a county, city, city and
county, or a health district, if a ballot measure for bond financing
to fund compliance in accordance with Section 130050 and has been
rejected by the voters of the district, if the local entity has
requested an extension of this deadline by June 30, 2009, if the
owner files a declaration with the office stating that, as of the
date of that filing, the owner lacks the ability to meet the
requirements of subdivision (a) of Section 130060 for that building
pursuant to subdivision (b) of that section. The declaration shall
state the commitment of the hospital to replace those buildings by
January 1, 2020, with other buildings that meet the requirements of
Section 130065 and shall meet the requirements of paragraphs (4) to
(9), inclusive, of subdivision (b).
   (d) A hospital filing a declaration pursuant to this section but
failing to meet any of the deadlines set forth in this section shall
be deemed in violation of this section and Section 130060, and shall
be subject to loss of licensure.