BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 81|
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CONSENT
Bill No: AB 81
Author: Wood (D), et al.
Introduced:1/5/15
Vote: 27 - Urgency
SENATE HEALTH COMMITTEE: 9-0, 6/10/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth, Wolk
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 78-0, 4/23/15 (Consent) - See last page for
vote
SUBJECT: Hospitals: seismic safety
SOURCE: Frank R. Howard Memorial Hospital
DIGEST: This bill permits a hospital in the City of Willits to
request an eight-month deadline extension of a seismic safety
requirement that hospitals be rebuilt or retrofitted to be
capable of withstanding an earthquake, which it is currently
required to meet by January 1, 2015, so that this hospital could
have until September 1, 2015, to meet this seismic safety
requirement.
ANALYSIS:
Existing law:
1)Establishes timelines for hospital compliance with seismic
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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)Permits 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.
3)Permits 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
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.
4)Permits a hospital located in the Counties of Sacramento, San
Mateo, or Santa Barbara, or the City of San Jose, that has
received the additional two-year extension to January 1, 2015,
described in 2) above, to request an additional extension
until September 1, 2015, to obtain either a certificate of
occupancy from OSHPD for a replacement building, or a
construction final from OSHPD on a retrofitted building.
This bill:
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1)Adds a hospital located in the City of Willits to existing
provisions of law that permit hospitals located in the
Counties of Sacramento, San Mateo, or Santa Barbara, or the
City of San Jose, that have 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 the City of Willits, 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
City of Willits that are working on meeting seismic safety
building standards.
Comments
1)Author's statement. According to the author, the Frank R.
Howard Memorial Hospital (HMH) has been in construction and
working to meet the seismic safety requirements. However,
given the rural nature of the area, the construction project
has encountered unforeseen circumstances that delayed
completion of the hospital from meeting the deadline. This
bill seeks to provide an extension to HMH until September 1,
2015, to complete construction on a project that is nearly
completed. This is the same extension given to five other
hospitals last year, provided by the passage of AB 2557 (Pan,
Chapter 821, Statutes of 2014). If the deadline is not
extended, HMH could lose its license and even jeopardize its
ability to participate in Medicare and Medicaid program, which
is about 80 percent of their patients this hospital serves.
2)Hospital seismic requirements. Following the 1971 San
Fernando Valley earthquake, California enacted the Alfred E.
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Alquist 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.
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
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) authorized 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) permitted 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
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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 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.
Prior Legislation
AB 2557 (Pan, Chapter 821, Statutes of 2014) permitted a
hospital located in the Counties of Sacramento, San Mateo, or
Santa Barbara or the City of San Jose, that had 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 OSHPD.
SB 90 (Steinberg, Chapter 19, Statutes of 2011) allowed a
hospital to seek an extension for seismic compliance for its
SPC-1 buildings of up to seven years based on the following
elements: the structural integrity of the building, the loss of
essential hospital services to the community if the hospital
closed, and financial hardship.
SB 499 (Ducheny, Chapter 601, Statutes of 2009) required all general
acute care hospitals that have Structural Performance Category-1
buildings to report to OSHPD by November 1, 2010, and annually
thereafter, on the status of their compliance with the seismic
safety deadlines.
SB 306 (Ducheny, Chapter 642, Statutes of 2007) amended the Alquist
Act to permit hospitals to delay compliance with the July 1, 2008
seismic retro deadline, and the 2013 extension, to the year 2020, by
filing a declaration with OSHPD that the owner lacks financial
capacity to comply with the law.
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SB 1661 (Cox, Chapter 679, Statutes of 2006) authorized an
extension of up to an additional two years for hospitals that
had already received extensions of the January 1, 2008 seismic
safety compliance deadline if specified criteria were met, and
required specified hospital reports to be posted on the OSHPD
Web site.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified6/23/15)
Frank R. Howard Memorial Hospital (source)
Adventist Health
California Hospital Association
Loma Linda University Medical Center
OPPOSITION: (Verified6/23/15)
None received
ARGUMENTS IN SUPPORT: This bill is sponsored by the Frank R.
Howard Memorial Hospital (HMH), which states that it is a 25-bed
Critical Access Hospital located in northern Mendocino County.
HMH states that it has been engaged for since 2009 in the design
and construction of a new facility which was planned to open for
occupancy in advance of January 1, 2015. The contractor's
written construction schedule, in place through the summer of
2014, called for substantial completion of HMH's new facility in
early October 2014, which would have given the hospital time to
open in advance of January 1, 2015. In mid-September 2014, HMH
states that the contractor, citing unanticipated construction
delays, provided HMH with a new schedule reflecting completion
of construction in mid-January 2015, which was later pushed back
into the spring. HMH notes that last year, five hospital
construction projects were identified as working toward the
January 1, 2015 deadline, but due to extenuating circumstances,
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were not likely to be completed in time. Legislation was passed
to allow these five hospitals to request an additional
eight-month extension, and that this bill is seeking to provide
HMH with this same ability. Adventist Health, and Loma Linda
University Medical Center state in support that HMH is an
important health care provider in northern Mendocino County,
with more than 80 percent of the hospital's inpatient payor mix
is a combination of Medicare and Medi-Cal, and that
non-compliance with seismic deadlines could cause a hospital to
lose its license. The California Hospital Association states in
support that many designers and structural engineers consider
California hospitals to be the most complex and costly buildings
to construct due to the intricate structural, mechanical,
plumbing and electrical systems needed to remain operational
following an earthquake.
ASSEMBLY FLOOR: 78-0, 4/23/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,
Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Campos, Salas
Prepared by:Vince Marchand / HEALTH /
6/24/15 17:31:38
**** END ****
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