BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SB 608
S
AUTHOR: Alquist
B
AMENDED: August 24, 2010
HEARING DATE: August 31, 2010
6
CONSULTANT:
0
Hansel/cjt
8
PURSUANT TO S.R. 29.10
SUBJECT
Hospitals: seismic safety
SUMMARY
Provides for an extension of hospital seismic deadlines of
up to three years for hospitals that document that a local
planning delay will cause them to miss the January 1, 2013
deadline. Allows the Office of Statewide Health Planning
and Development (OSHPD) to grant an additional extension of
up to two years, beyond the three years, for projects that
do not provide acute care services and meet other criteria
regarding life support systems and structural risk, as
specified.
CHANGES TO EXISTING LAW
Existing law:
Gives the Office of Statewide Health Planning and
Development (OSHPD) responsibility for reviewing and
approving all plans relating to construction and
alteration of hospital buildings, as defined. Before
adopting any such plans, hospitals must submit the plans
Continued---
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
2
to OSHPD for approval and pay an application filing fee
that is based on the project's estimated construction
cost.
Establishes, under the Alfred E. Alquist Hospital
Facilities Seismic Safety Act of 1983 (Alquist Seismic
Safety Act), 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 (classified under OSHPD regulations as SPC-1
buildings) 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.
Allows OSHPD to grant a hospital an extension of up to
five years beyond 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.
Also authorizes under SB 1661 (Cox, Chapter 679, Statutes
of 2006) 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 that the hospital
submitted a construction timeline at least two years
prior to the applicable deadline and is making reasonable
progress toward meeting the deadline, but factors beyond
the hospital's control make it impossible for the
hospital to meet the deadline. To be eligible for this
extension, hospitals must meet several interim deadlines,
including submitting building plans by December 31, 2008,
and securing a building permit and submitting a
construction timetable by December 31, 2010.
Establishes, pursuant to regulations, authority for OSHPD
to utilize computer modeling based on software developed
by the Federal Emergency Management Agency, referred to
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
3
as Hazards US (HAZUS) for purposes of determining the
structural performance category of general acute care
hospital buildings. OSHPDs most recent regulations,
which it refers to as HAZUS 2010, took effect on February
13, 2010. These regulations revise a previously adopted
collapse probability threshold from .75 percent to 1.2
percent, and allow hospitals to apply for reevaluations
under HAZUS 2010 by January 1, 2012. The regulations
additionally require buildings with collapse
probabilities of .75 to 1.2 to mitigate any deficiencies
identified by January 1, 2015. Hospitals that do not
meet this deadline may not obtain building permits for
their noncompliant buildings, except for purposes of
seismic compliance.
Provides hospitals that sought, but did not receive,
reclassifications of their seismic status under HAZUS,
are allowed additional time to qualify for the two-year
extension under SB 1661 described above, if they meet
established deadlines for submission of building plans,
receipt of building permits, submission of a construction
timetable, and are under construction at the time of the
request for the extension are making reasonable progress
toward meeting the construction timeline.
Permits a hospital owner, in lieu of retrofitting or
rebuilding hospital buildings at risk of collapse by
2013, to instead replace them by January 1, 2020, if the
hospital owner lacks the financial capacity to meet the
2013 deadline, as defined, and meets other conditions,
including maintaining a contract to provide Medi-Cal
services and maintaining a basic emergency room, as
specified.
Requires the owner of general acute care hospital
buildings that are classified as SPC-1 buildings to
submit reports to OSHPD annually, describing the status
of each building in complying with the 2013 deadline.
Requires OSHPD to establish requirements and deadlines
for nonstructural equipment and systems used in hospitals
that are critical to patient care, such as mechanical and
electrical systems, diagnostic equipment, conduits,
ductwork, piping, and machinery. OSHPD has adopted, by
regulation, definitions of nonstructural performance
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
4
criteria and timelines for achieving them.
This bill:
Provides for a new extension, of up to three years, of
the January 1, 2013 seismic deadline for retrofitting or
replacing an SPC-1 building, for hospitals that are able
to document that a local planning delay will cause them
to miss the deadline. To be eligible for an extension,
requires the hospital to have submitted a plan to OSHPD
by January 1, 2009, to receive a building permit no later
than January 1, 2012, and to begin construction no later
that January 1, 2013.
Allow OSHPD to grant an additional extension of up to two
years, beyond the three years, for projects will result
in all buildings at the facility to 2030 standards by
completion of the project, for which no acute care
services will be provided in any SPC-1 building at any
time during the extension, for which the hospital
demonstrates that it has and maintains life safety
systems in all acute care patient areas that do not
depend on, or are routed through, any SPC-1 building, and
for which the hospital demonstrates that no SPC-1
building poses a structural risk to any adjoining
building that is used for acute care services, or
mitigates the risk by 2015.
Allows OSHPD to revoke an extension if work of
construction is abandoned or suspended for six months or
longer, or for failure to comply with the conditions for
the extension or falsification of information, as
specified. Requires a hospital owner to pay an
additional fee to cover the costs of reviewing and
granting an extension.
Allows OSHPD to revoke an extension if work of
construction is abandoned or suspended for six months or
longer, or for failure to comply with the conditions for
the extension or falsification of information, as
specified. Requires a hospital owner to pay an
additional fee to cover the costs of reviewing and
granting an extension.
The extensions provided by the bill would be in lieu of
any extension that the hospital would otherwise be
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
5
eligible for under SB 1661.
Contains contingent language to avoid chaptering out
problems with SB 289 (Ducheny), which contains the
three-year extension for local planning delays noted
above.
FISCAL IMPACT
SB 608 in its current form has not been analyzed by a
fiscal committee.
BACKGROUND AND DISCUSSION
The author states that SB 608 will allow a small number of
hospitals to request extensions to the January 1, 2013
seismic deadline for delays in their projects that have
been caused by delays in the local planning approval
process. The author maintains that for a limited number of
hospitals, the local planning review and approval process
has taken longer than originally anticipated. In addition,
the author additionally points out that local approving
agencies can require that the phases of a hospital
construction project be done in a specific sequence, which
can lengthen the total amount of time needed to finish the
project, and that this has forced some hospitals to adjust
their construction schedules.
The author notes that the additional two-year extension in
the bill would be limited to hospitals which can
demonstrate that: (1) No acute care services will be
provided in the SPC-1 building during the extension; (2) No
buildings that are used for acute care purposes depend upon
the SPC-1 building for life support systems; and (3) The
SPC-1 building poses no structural risk to any adjoining
buildings that are used for acute care services.
The author states that despite its best efforts, Stanford
Hospital and Clinics (SHC), and a limited number of other
hospitals, will not meet the 2013 deadline to be
seismically compliant. SHC is one of four Level 1 trauma
centers in Northern California that provides tertiary
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
6
clinical services and trains and supports over 1,000
medical residents.
Stanford experienced a three-year delay in commencing
construction due to local planning delays, as well as
requirements that were imposed by the City of Palo Alto
relating to the sequencing and timing of elements of the
project. The author argues that the additional targeted
extensions in SB 608 are warranted for projects like SHCs,
which continue to ensure patient safety while allowing
hospitals to replace their patient care buildings with
modern buildings that can be used beyond 2030.
Current seismic deadlines
Following the 1971 San Fernando Valley earthquake,
California enacted the Alfred E. Alquist Hospital Facility
Seismic Safety Act of 1973 (Alquist Seismic Safety Act),
which mandated that all new hospital construction meet
stringent seismic safety standards. In 1994, after the
Northridge earthquake, the Legislature passed and the
Governor signed SB 1953 (Alquist), which required the
Office of Statewide Health Planning and Development (OSHPD)
to establish earthquake performance categories for
hospitals, and established a January 1, 2008 deadline by
which general acute care hospitals must be retrofitted or
replaced so that they do not pose a risk of collapse in the
event of an earthquake, and a January 1, 2030 deadline by
which they must be capable of remaining operational
following an earthquake. SB 1953 also allowed most
hospitals to qualify for an extension of the January 1,
2008 deadline to January 1, 2013.
Hospital buildings that are subject to the seismic
deadlines are buildings that provide
acute care services, other than certain freestanding
buildings providing outpatient services. This includes
buildings providing core hospital services (medical,
nursing, surgical, anesthesia, laboratory, radiology,
pharmacy, and dietary services), as well as special or
supplemental services such as burn center, chronic
dialysis, emergency medical, acute psychiatric, and cardiac
services.
Current extensions
Current law allows an extension of the 2008 deadline if
compliance will result in an interruption of health care
services provided by hospitals within the area. Hospital
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
7
owners can request extensions in one-year increments up to
a maximum of five years after January 1, 2008. Hospitals
may also request extensions of up to five years if acute
care services will be moved to an existing conforming
building, relocated to a new building, or if the existing
building will be retrofitted to designated seismic
performance categories.
In addition to the five-year extension, the Legislature has
passed additional bills allowing hospitals to extend the
deadlines for retrofitting beyond the 2013 deadline. SB
1661 (Cox , Chapter 679, Statues of 2006) 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.
SB 306 (Ducheny) of 2007-2008 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 meets several conditions and
OSHPD certifies that the hospital owner lacks the financial
capacity to meet seismic standards, as defined. Among the
conditions a hospital must meet to be eligible for this
extension are that it maintains a contract to provide
Medi-Cal services, maintains a basic emergency room, and is
either in an underserved area, serves an underserved
community, is an essential provider of Medi-Cal services,
or is a heavy provider of services to Medi-Cal and indigent
patients. Approximately 20 hospitals have qualified for
extensions to 2020 under this authority.
Reclassification of hospital buildings based on seismic
risk
In May 2006, the Hospital Safety Board authorized OSHPD to
reevaluate the seismic risk of SPC-1 buildings utilizing a
more up-to-date seismic risk analysis tool, known as HAZUS,
which was developed by the Federal Emergency Management
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
8
Agency. OSHPDs current regulations, which it refers to as
HAZUS 2010, took effect on February 13, 2010. These
regulations revise a previously adopted collapse
probability threshold from .75 percent to 1.2 percent, and
allow hospitals to apply for reevaluations under HAZUS 2010
by January 1, 2012. The regulations additionally require
buildings with collapse probabilities of .75 to 1.2 to
mitigate any deficiencies identified by January 1, 2015.
Hospitals that do not meet this deadline may not obtain
building permits for their noncompliant buildings, except
for purposes of seismic compliance.
Status of compliance with hospital seismic requirements
SB 1661 (Cox) of 2006 requires hospitals that operate SPC-1
buildings to report periodically on the status of their
compliance with the current seismic deadlines. In June
2009, 242 hospitals, containing 819 SPC-1 buildings,
reported information on their compliance status. OSHPD
reported in February 2010 that 800 of California's hospital
buildings are classified as SPC-1 buildings, meaning that
they are at risk for collapse in an earthquake. These
buildings must be retrofitted, replaced, or removed from
acute care services by January 1, 2008 (or 2013 if they
have received extensions). Close to 300 buildings are
categorized as SPC-2 buildings, meaning that they are not
at risk of collapse, but may not be reparable or functional
following a strong quake. These buildings must be brought
into compliance with the requirements of SB 1953 by 2030 or
be removed from acute care service. Finally, about 1,560
buildings are SPC-3, SPC- 4, and SPC- 5 buildings, meaning
that they are considered capable of providing services
following a strong quake and may be used without
restriction beyond 2030.
Based on the reports, OSHPD estimated in February 2010 that
556 SPC-1 buildings are likely to meet the 2013/15
deadline. OSHPD further estimated that 81 buildings may
possibly comply with the 2013 deadline by being
reclassified to SPC-2 status. Finally, OSHPD estimated
that 130 buildings are not likely to meet the 2013/2015
deadline.
Risk posed by SPC-1 buildings
According to information submitted by OSHPD and reports
issued by the U.S. Geological Survey, the California
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
9
Geological Survey, and the Southern California Earthquake
Center, California has a 99 percent chance of having a
magnitude 6.7 or greater earthquake within the next 30
years. The probability of an earthquake with a magnitude
of 6.7 or greater occurring over the next 30 years in the
greater Los Angeles area is 67 percent. In the San
Francisco Bay Area, the probability of such an earthquake
occurring is 63 percent. For the entire California region,
the fault with the highest probability of generating at
least one magnitude 6.7 earthquake or larger is the
southern San Andreas (59 percent in the next 30 years).
California has a 23 percent chance of a magnitude 6.7 or
greater earthquake between 2013 and 2020.
California also faces a 94 percent probability of a 7.0
earthquake in the next 30 years, a 46 percent chance of a
7.5 earthquake, and a 5 percent chance of an 8.0
earthquake.
According to OSHPD, the seismic risk posed by SPC-1
buildings is affected by both their location and their
vulnerability based on their building characteristics.
Related bills
SB 289 (Ducheny) requires persons or entities that seek
approval to operate or manage a general acute care hospital
to file with DPH a statement that describes their plan for
the hospital to comply with seismic safety requirements.
Provides new extensions of hospital seismic deadlines for
hospitals that plan to mitigate targeted structural
deficiencies, or whose projects have been subject to local
planning delays, as specified. Requires hospitals to
report information on the status of their buildings in
meeting 2030 standards requiring hospital buildings to be
capable of remaining functional following an earthquake and
to submit a master plan for buildings that need to be
rebuilt or replaced. Requires information that is
submitted by hospitals to the Office of Statewide Health
Planning and Development (OSHPD to obtain extensions to be
complete and accurate, as specified. Requires hospitals
with buildings at risk of collapse to post public signs.
SB 499 (Ducheny) Chapter 601, Statutes of 2009 allows
hospitals that sought, but did not receive, seismic
reclassifications under HAZUS to qualify for a two year
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
10
extension that is available to hospital buildings that have
filed building plans, submitted a construction timeline,
and are under construction. Moves up the deadline for
reports that hospitals with SPC-1 buildings must file with
OSHPD, and requires hospitals to file annual updates to the
reports, and subjects hospitals that do not submit reports
to fines, as specified. Authorizes OSHPD, until January 1,
2013, to utilize computer modeling, as specified, for
purposes of determining the structural performance category
of general acute care hospital buildings.
AB 303 (Beal) Chapter 428, Statutes of 2009 allows
specified county and University of California (UC)
disproportionate share hospitals that contract with the
California Medical Assistance Commission to serve Medi-Cal
patients to receive supplemental Medi-Cal reimbursement
from the Construction and Renovation Reimbursement Program
for new capital projects to meet state seismic safety
deadlines for which plans have been submitted to the state
after January 1, 2007, and before December 31, 2011.
AB 523 (Huffman) Chapter 243, Statutes of 2009 allows OSHPD
to grant up to a two-year extension of the 2013 seismic
deadline for a hospital building that is owned by a health
care district, but is operated by a third party under a
lease that extends at least through December 31, 2009,
based on a declaration that the district has lacked, and
continued to lack, unrestricted access to the hospital
building for seismic planning purposes during the time of
the lease. The extension provided by AB 523 applies only
to Marin General Hospital.
Prior legislation
SB 306 (Ducheny) Chapter 642, Statutes of 2007 amends the
Alfred E. Alquist Hospital Facilities Seismic Safety Act
(Act) to permit specified hospitals to delay compliance
with the July 1, 2008 seismic retrofitting deadline, and
the 2013 extension, to the year 2020, by filing a
declaration with the Office of Statewide Health Planning
and Development (OSHPD) that the owner lacks financial
capacity to comply with the law.
SB 1661 (Cox) Chapter 679, Statutes of 2006 authorizes an
extension of up to two additional years for hospitals that
have already received extensions of the January 1,
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
11
2008 seismic safety compliance deadline, if specified
criteria are met. Requires owners of SPC-1 general acute
care hospital buildings who have not requested extensions
of the January 1, 2008 deadline to submit a report to OSHPD
no later than April 15, 2007, describing their progress in
complying with the 2008 requirement. Requires hospitals
that requested an extension of the 2008 deadline to submit
reports to OSHPD by June 30, 2009 and June 30, 2011,
describing the status of each building in complying with
the 2008 requirement.
SB 1838 (Perata) Chapter 693, Statutes of 2006 authorizes
OSHPD to establish a training program for personnel who
review hospital construction and design plans. Exempts
hospital and skilled nursing facility projects that cost
less than $50,000 from the OSHPD plan review process.
Requires a pre-submittal meeting with OSHPD plan review
staff on hospital and skilled nursing facility projects
costing over $20 million.
SB 1801 (Speier) Chapter 850, Statutes of 2000 permits
OSHPD to grant a five-year extension of the January 1,
2008, seismic safety deadline for a functional contiguous
grouping of hospital buildings, as defined, if specified
conditions are met.
SB 2006 (Leslie) Chapter 851, Statutes of 2000 extends
deadlines for seismic safety compliance for hospitals in
low seismic risk zones.
SB 1953 (Alqust) Chapter 740, Statutes of 1994, requires
all hospital 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, 2008.
Also requires, by January 1, 2030, that all 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.
Arguments in support
Writing in support of the bill, Stanford Hospitals and
Clinics (SHC) states that it has fulfilled every
requirement and met every deadline for seismic safety. All
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
12
existing inpatient beds are in buildings rated at SPC-2
level or higher. SHC states that is unable to meet the
current timetable to qualify for a two-year extension under
SB 1661 because its construction project is a large,
complex project which includes the Lucile Packard
Children's Hospital and the Stanford Medical School and it
must undertake at least two years of enabling projects
which must be done before construction of the new building
can begin. SHC also states that the CEQA process has been
prolonged due to the size and complexity of the project.
The City of Palo Alto states that the SHC project is the
largest private development project in recent memory. The
City states that the complexity of the project has
necessitated a more extensive environmental review process,
which as extended the project beyond the timeline that was
originally envisioned. The City expects a formal decision
of whether to approve the project is expected in late 2010
or early 2011, and that the City and SHC are working
cooperatively to achieve their objectives and shared goals
for the project.
Arguments in opposition
The California Nurses Association (CNA) maintains that for
nearly four decades California hospitals have been on
notice regarding seismic safety since the 1971
earthquake in Sylmar caused two big hospitals to collapse.
CNA argues that hospitals have come begging to the
Legislature virtually every year seeking extension after
extension, which has resulted in the deadlines being
repeatedly delayed. According to CNA, in a seismically
active state such as California, the time for compliance is
now and the reward for non-compliance should not be more
extensions. CNA objects that that the extensions in SB 608
would give SHC a five-year extension beyond the January 1,
2013 deadline.
PRIOR ACTIONS
Senate Transportation:11-0
Senate Floor: 37-0
Assembly H. & C.D.: 6- 0
Assembly Appropriations: 17-0
Assembly Health: 14-1
Assembly Floor: 72-1
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
13
COMMENTS
1. Assembly amendments. As it left the Senate, SB 608
would have required information on programs funded under
the Housing and Emergency Shelter Trust Fund Acts of 2002
and 2006 to be included in the Department of Housing and
Community Developments annual report.
The Assembly amendments delete these provisions and instead
provide for two targeted extensions of hospital seismic
safety deadlines for hospitals that will miss the January
1, 2013 deadline for retrofitting or replacement due to
local planning delays:
A year-for-year extension of up to three years, for each
year that a hospital is able to document that a planning
delay or condition has or will delayed compliance with
the January 1, 2013 deadline; and
An additional extension of up to two years beyond this
for hospitals whose projects meet certain conditions,
including that the project will achieve compliance with
2030 seismic standards for all hospital buildings at the
facility by its completion, no acute care services are
provided in any SPC-1 building during the extension, no
building provide acute care services relies on or is
dependent on any SPC-1 building for life safety systems
such as emergency power, and no SPC-1 building poses a
structural risk to any adjoining building that is used
for acute care services.
POSITIONS
Support: Stanford Hospital and Clinics (cosponsor)
Stanford University (cosponsor)
City of Pal Alto
Oppose: California Nurses Association
STAFF ANALYSIS OF SENATE BILL 608 (Alquist) Page
14
-- END --