BILL ANALYSIS
AB 303
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 303 (Beall)
As Amended September 1, 2009
Majority vote
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|ASSEMBLY: |78-0 |(June 2, 2009) |SENATE: |34-0 |(September 2, |
| | | | | |2009) |
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Original Committee Reference: HEALTH
SUMMARY : Allows designated public hospitals to receive
supplemental Medi-Cal reimbursement from the Construction and
Renovation Reimbursement Program (CRRP) 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.
The Senate amendments prohibit state funds, any special funds as
well as the General Fund, from being used for the nonfederal
share of the supplemental reimbursement. The nonfederal share
must be funded by claiming federal expenditures through the use
of local certified public expenditures (CPEs) or
intergovernmental transfers (IGTs).
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate.
FISCAL EFFECT : According to the Senate Appropriations
Committee, unknown costs, potentially $75 million to $150
million annually for debt service payments, split between the
federal and local governments. The requirement to fund the
nonfederal share through CPEs and IGTs would put pressure on
county budgets. The provisions of the bill would be implemented
only to the extent that federal approval and federal financial
participation are available.
COMMENTS : This bill is sponsored by the Santa Clara Board of
Supervisors (Board) to allow designated public hospitals,
specified county and University of California (UC)
disproportionate share hospitals (DSH) that contract with the
California Medical Assistance Commission to serve Medi-Cal
patients, to access federal supplemental reimbursements for debt
service related to seismic retrofitting. The Board states the
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importance of this legislation to the County's public hospital,
Santa Clara Valley Medical Center (SCVMC), and its patients,
cannot be overestimated. The Board argues the state's seismic
safety law requires that SCVMC replace or retrofit more than
half of its 524 licensed acute beds or close them. A loss of
this number of beds would result in longer and unacceptable
lengths of time that the emergency facility would be on
diversion due to lack of beds, and would also leave the county
with limited surge capacity to respond to disasters.
Beyond the impact on trauma services, the Board argues a loss of
half of SCVMC's inpatient beds would severely compromise access
for Medi-Cal patients for whom SCVMC is one of a few remaining
contracting providers in the county. The Board indicates it is
committed to maintaining hospital care in the county, and it has
embarked on a two-phase project to bring SCVMC into compliance
with the seismic mandates. The cost of this effort is
approximately $1.4 billion. Locally generated funds, including
funds from a successful 2008 bond measure, cover the first phase
of the project ($949 million) to meet the 2013 standards.
However, additional funds are required for SCVMC to undertake
the second phase of the project and meet the 2030 seismic safety
deadline. This phase would rebuild 104 patient beds and
associated service buildings, such as the hospital kitchen, at a
cost of $500 million.
This bill would enable Santa Clara County to secure federal
funds for debt service related to seismic retrofitting. Without
this ability, Santa Clara County would not be able to finance
the second phase of the project through completion, meet the
seismic safety requirements, and provide needed trauma and
indigent care services.
Under existing law, the CRRP allows DSH hospitals to receive
supplemental Medi-Cal reimbursement for debt service incurred on
revenue bonds for the construction, renovation, or replacement
of hospital facilities, including building and fixed equipment,
for which final plans have been submitted to OSHPD after
September 1, 1988, and prior to June 30, 1994. This bill would
reopen, on a time-limited basis, CRRP eligibility for designated
public hospitals to help fund capital projects to meet the
state's hospital seismic safety deadlines. There are 22
designated public hospitals listed in statute (two of which are
closed), which have 82 buildings rated as Structural Performance
Category-1, meaning the buildings are at significant risk of
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collapse during an earthquake.
Analysis Prepared by : Joyce Iseri / HEALTH / (916) 319-2097
FN: 0002813