BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
303 (Beall)
Hearing Date: 8/27/2009 Amended: 6/18/2009
Consultant: Katie Johnson Policy Vote: Health 11-0
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BILL SUMMARY: AB 303 would allow designated public hospitals to
receive Medi-Cal supplemental reimbursement funds from the
Construction and Renovation Reimbursement Program (CRRP) for
debt service on new capital projects specifically related to
meeting state seismic safety deadlines.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Debt service payments unknown,
potentiallyFederal/
$75 - $150 million annually
Local/
Special
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STAFF COMMENTS: SUSPENSE FILE.
Existing law establishes seismic safety requirements under the
Alfred E. Alquist Hospital Facilities Seismic Safety Act. The
act required the Office of Statewide Health Planning and
Development (OSHPD) to classify general acute care hospital
buildings in one of 5 Structural Performance Categories-SPC-1
meaning the building is at risk of collapse during an
earthquake, SPC-2 meaning the building is not at risk of
collapse, but may not be functional after an earthquake, and
SPC-3 - SPC-5 meaning the building is capable of providing
services after an earthquake. SPC-1 buildings must have been
removed, replaced, or retrofitted by January 1, 2008, or 2013 or
2015 or replaced by 2020 if they received authorized extensions.
SPC-2 buildings must be in compliance with seismic safety
standards by 2030.
Existing law, SB 1732 (Presley), Chapter 1635, Statutes of 1988,
establishes the Construction and Renovation Reimbursement
Program (CRRP), which provides supplemental Medi-Cal
reimbursement for a portion of the debt service incurred on
revenue bonds that were issued for the construction, renovation,
or replacement of eligible hospital facilities, as specified,
that had submitted plans for new construction between September
1, 1988, and June 30, 1994. SB 1732 expenditures were $132.9
million in 2006-2007 for 16 hospitals and $97.9 million in
2007-2008 for 20 hospitals. SB 1732's nonfederal share payments
are made with General Fund dollars.
This bill would permit the designated public hospitals, as
specified, to receive supplemental reimbursements from the CRRP
for new capital projects for which final plans were submitted to
OSHPD between January 1, 2007, and December 31, 2011. At the
time of this analysis, it is unknown how many of the 24 eligible
hospitals would choose to participate in the program.
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AB 303 (Beall)
This bill would prohibit the use of General Fund monies for the
nonfederal share of the supplemental reimbursement provided
under these provisions. Instead, it would allow the use of other
state funds, or, in their absence, the use of certified public
expenditures (CPEs) or intergovernmental transfers (IGTs), among
others, as the nonfederal share. Currently, there are no special
funds identified for this purpose. The Department of Health Care
Services would need to amend the Medi-Cal state plan in order
for hospitals to use CPEs or IGTs to draw down federal funds.
Funding through CPEs and IGTs would put pressure on county
budgets. This bill would provide that these provisions would
only be implemented to the extent that federal approval and
federal financial participation is available.
This bill is similar to AB 1149 (Beall) of 2007, which would
have authorized disproportionate share hospitals designated as
Level 1 trauma centers located in Seismic Zone 4 as eligible to
receive supplemental payments from CRRP. AB 1149 was held on the
Assembly Appropriations suspense file.