BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2557| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2557 Author: Pan (D), et al. Amended: 8/22/14 in Senate Vote: 27 - Urgency PRIOR VOTES NOT RELEVANT SENATE HEALTH COMMITTEE : 8-0, 8/29/14 (Pursuant to Senate Rule 29.10) AYES: Hernandez, Morrell, Beall, DeSaulnier, Evans, Monning, Nielsen, Wolk NO VOTE RECORDED: De León SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Hospitals: seismic safety SOURCE : California Hospital Association DIGEST : This bill permits a hospital located in the Counties of Sacramento, San Mateo, or Santa Barbara or the City of San Jose, that has received an additional extension of the January 1, 2008, seismic safety requirements under specified provisions of existing law to January 1, 2015, to request an additional extension until September 1, 2015, in order to obtain either a certificate of occupancy or a construction final from the Office of Statewide Health Planning and Development. ANALYSIS : Existing law: CONTINUED AB 2557 Page 2 1.Establishes timelines for hospital compliance with seismic safety standards, including a requirement that buildings posing a significant risk of collapse and a danger to the public (referred to as SPC -1 buildings) be rebuilt or retrofitted to be capable of withstanding an earthquake, or removed from acute care service, by January 1, 2008, and a requirement that hospital buildings be capable of remaining intact after an earthquake, and must also be capable of continued operation by January 1, 2030. 2.Allows the Office of Statewide Health Planning and Development (OSHPD) to grant an extension of up to five years to the 2008 deadline, which would be January 1, 2013, for hospitals for which compliance will result in a loss of health care capacity, as defined. Existing law also allows OSHPD to grant various further extensions beyond this, including up to two years, which would be January 1, 2015, for certain hospitals that face construction delays, hospitals that encounter delays due to an attempt to reclassify their buildings to higher seismic status, and hospitals that experience local planning delays. Existing law also allows certain hospitals that have received five year extensions beyond 2008, to rebuild their buildings by 2020 in lieu of meeting the January 1, 2013 deadline for retrofitting. 3.Requires owners 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 January 1, 2013 deadline. 4.Allows OSHPD to utilize computer modeling based on HAZUS, which is a seismic risks analysis tool, for purposes of determining the structural performance category of general acute care hospital buildings. This bill: 1.Revises the conditions of deadline extensions granted by OSHPD for hospitals to comply with certain seismic safety requirements by allowing a hospital to continue operating under a deadline extension if either of the following occurs before the end of the extension: A. A replacement building has been constructed and a CONTINUED AB 2557 Page 3 certificate of occupancy has been granted by OSHPD for the replacement building; or B. A retrofit has been performed on the building and a construction final has been obtained by OSHPD. 1.Permits a hospital located in the Counties of Sacramento, San Mateo, or Santa Barbara or the City of San Jose, that has received an additional extension of the January 1, 2008, seismic safety requirement under specified provisions of existing law to January 1, 2015, to request an additional extension until September 1, 2015, in order to obtain either a certificate of occupancy or a construction final from OSHPD. 2.Contains an urgency clause, stating that to prevent the loss of hospital licensure, Medicaid and Medicare funding, and eligibility for Federal Emergency Management Agency assistance following a disaster that would lead to hospital closures and loss of access to health care in these communities, it is necessary for this act to take effect immediately. 3.Makes legislative findings and declarations that a special law is necessary and that a general law cannot be made applicable because of the unique circumstances facing hospitals in the Counties of Sacramento, San Mateo, and Santa Barbara and the City of San Jose that are working on meeting seismic safety building standards. Comments According to the author, OSHPD recently identified five outstanding hospital projects that are working toward the January 1, 2015 deadline, which, due to extenuating circumstances such as flooding and unforeseeable construction delays, may not be completed on time. Not meeting the January 1, 2015, deadline could result in the hospitals losing their licenses and jeopardizing their ability to participate in Medicare and Medicaid. This bill provides an eight-month extension to the January 1, 2015 deadline for those hospitals, ensuring their communities have uninterrupted access to health care. Hospital seismic requirements . Following the 1971 San Fernando Valley earthquake, California enacted the Alfred E. Alquist CONTINUED AB 2557 Page 4 Hospital Facility Seismic Safety Act of 1973 (Alquist 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), Chapter 740, Statutes of 1994, which required 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. Existing 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 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, Statutes of 2006) authorizes an extension of up to an additional two years for hospitals that have already received five-year 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, Chapter 642, Statutes of 2007) 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 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 CONTINUED AB 2557 Page 5 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. Eighteen hospitals have qualified for extensions to 2020 under this authority. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 8/29/14) California Hospital Association (source) California Association of Nurse Anesthetists California State Council, SEIU Hospital Corporation of America State Building and Construction Trades Council of California OPPOSITION : (Verified 8/29/14) California Nurses Association ARGUMENTS IN SUPPORT : The California Hospital Association (CHA), the sponsor of this bill, writes that five hospitals will likely not meet the January 1, 2015, seismic deadline established in California law. According to CHA, many designers and structural engineers consider California hospitals to be the most complex and costly buildings to construct due to all the intricate systems that need to remain operational following an earthquake. CHA further states that the consequences for these hospitals will be severe and restrict access to care in the surrounding communities. ARGUMENTS IN OPPOSITION : The California Nurses Association (CNA) writes that if seismic standards cannot be met after extensions have already been granted, hospitals should not continue to admit patients and place them and hospital staff at risk for injury due to seismic non-compliance. CNA further states earthquakes are a common occurrence in California since the state has over 100 active faults known to produce large earthquakes. CONTINUED AB 2557 Page 6 JL:nl 8/29/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED