BILL ANALYSIS
SB 499
Page 1
Date of Hearing: September 9, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
SB 499 (Ducheny) - As Amended: September 4, 2009
SENATE VOTE : Not relevant.
SUBJECT : Hospitals: seismic safety.
SUMMARY : Revises and extends, under specified conditions,
hospital seismic safety construction and reporting requirements.
Specifically, this bill :
1)Authorizes, through January 1, 2013, the Office of Statewide
Health Planning and Development (OSHPD) to use current
computer modeling based on federally-developed software (known
as Hazards US, or HAZUS) to determine the structural
performance category (SPC) of general acute care (GAC)
hospital buildings. SPC classifications, ranging from SPC-1
to SPC-5, are used to indicate the structural seismic risk of
a hospital building in the event of a major earthquake, with
SPC-1 used to designate buildings at potential risk of
collapse or significant loss of life in a major earthquake.
2)Until January 1, 2013, deems as emergency regulations,
regulatory submissions from OSHPD to the California Building
Standards Commission to implement either 1) above or
conforming changes in deadlines for compliance with any
nonstructural performance category (NPC) requirements.
3)Authorizes OSHPD to extend, by up to two years, the January 1,
2013 deadline for a SPC-1 hospital building to be either
retrofitted to SPC-2 and NPC-3 seismic safety standards, or
removed from GAC inpatient services, if all of the following
conditions are met:
a) The hospital owner submitted a request to OSHPD prior to
June 30, 2009, for HAZUS review, and the building was
deemed SPC-1 after the review;
b) Hospital building plans are submitted to OSHPD and
deemed ready for review prior to July 1, 2010, with an
indication of the SPC-1 building or buildings that will be
retrofitted or replaced as a result of the project;
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c) The hospital receives a building permit from OSHPD prior
to January 1, 2012;
d) Prior to January 1, 2012, the hospital submits a
construction timeline that demonstrates the hospital's
intent and ability to meet the applicable deadline and that
includes information on the projected construction start
and completion dates for the project, as well as the
contractor;
e) The hospital building is under construction at the time
the extension request is made, the purpose of the
construction is to allow the building to be used as a GAC
building after January 1, 2013, and the hospital is making
reasonable progress toward meeting the construction
timeline submitted to OSHPD; and,
f) The hospital owner completes construction such that the
hospital meets all criteria to enable OSHPD to issue a
certificate of occupancy by the applicable deadline for the
building.
4)Makes the following changes in current reporting requirements
applicable to owners of GAC hospital buildings that have been
classified as SPC-1 buildings:
a) Advances the due date for the next report by hospitals
to OSHPD by eight months, from June 30, 2011 to November 1,
2010, and requires annual updates thereafter on any changes
or adjustments;
b) For SPC-1 buildings planned for retrofit or replacement,
requires the report to additionally identify whether
retrofit or replacement is intended, the intended SPC
level, the applicable deadline for retrofit or replacement,
most recent project status, and number of inpatient beds
and patient days, by type of unit and type of service to be
provided;
c) For SPC-1 buildings to be removed from acute care
services, requires the report to additionally include: the
planned uses of the building after removal from acute care
services; inpatient services currently delivered in the
building; number of inpatient beds and patient days, by
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type of unit and type of services for 2008, 2009, and 2010;
and, whether the GAC services and beds will be relocated to
a new or retrofitted building and any corresponding
building sites or project numbers;
d) For each facility where buildings will be removed from
acute care service, requires the report to additionally
include any net change in the number of inpatient beds, by
type of unit and type of service, taking into account beds
in buildings to be taken out of service, retrofitted, or
replaced, as well as any other buildings used for GAC
inpatient services;
e) Requires the report to additionally show the final
configuration of all buildings on a hospital campus,
showing how each building will comply with the SPC-5/NPC 4
or 5 requirements, whether by retrofit or replacement, and
the type of services that will be provided in each GAC
hospital building;
f) Requires OSHPD, when posting information from these
reports on its Website, to include the hospital name,
hospital owners, location of buildings, and other specified
information; and,
g) For a hospital that does not submit the required
reports, establishes a fine of $10 per licensed acute care
bed per day, up to a maximum of $1,000 per day for each
SPC-1 building for which a report has not been submitted,
and permits a hospital to appeal a fine assessment to the
Hospital Building Safety Board. Requires revenues from
fines to be deposited into the Hospital Building Fund.
5)Adds provisions to avoid chaptering out AB 523 (Huffman),
which authorizes OSHPD to allow up to January 1, 2015, for
Marin General Hospital to be retrofitted or replaced.
EXISTING LAW :
1)Establishes and grants OSHPD authority and responsibility for
reviewing and approving all plans relating to construction,
additions to, reconstruction, or alteration of, health care
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facilities, as defined. Before adopting any such plans,
requires hospitals to submit the plans to OSHPD for approval
and to pay an application filing fee, as determined by OSHPD,
based on the project's estimated construction cost.
2)Establishes the Alfred E. Alquist Hospital Facilities Seismic
Safety Act of 1983 (Alquist Act), and its amendments, with the
following deadlines for seismic safety compliance:
a) After January 1, 2008, requires any GAC hospital
building that is determined to be a potential risk for
collapse or significant loss of life in a major earthquake
(i.e., designated as SPC-1) to be used only for non-acute
care purposes.
b) Authorizes OSHPD to extend the 2008 deadline by five
years, to January 1, 2013, if:
i) The hospital demonstrates that compliance with the
2008 deadline will result in a loss of health care
capacity that may not be provided by other GAC hospitals
within a reasonable proximity, and other conditions are
met;
ii) The hospital agrees that by January 1, 2013,
designated services will be provided by moving into an
existing conforming building, relocating to a newly-built
building, or continuing in the retrofitted building, as
specified; or,
iii) The building is either retrofitted to SPC-2 and
NPC-3 standards, or not used for GAC inpatient services,
by January 1, 2013.
c) Authorizes OSHPD to extend the 2013 deadline by up to
two additional years, up to January 1, 2015, if the
hospital meets specified interim deadlines and is making
reasonable progress toward meeting its timeline to retrofit
or replace an SPC-1 building but is delayed due to factors
beyond its control.
d) Permits a hospital owner, in lieu of retrofitting or
rebuilding SPC-1 buildings by 2013, to instead replace them
by January 1, 2020, if:
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i) The hospital meets specified conditions, including
serving Medi-Cal or indigent patients and underserved
areas, and OSHPD certifies that the hospital owner lacks
the financial capacity to meet seismic standards, as
defined; or
ii) The nonconforming building is owned or operated by a
county, city, or county and city that lacks the ability
to meet the 2013 deadline but commits to replace the
buildings by January 1, 2020.
e) Requires, by January 1, 2030, all hospital buildings to
be capable of remaining intact after an earthquake, and
capable of continued operation and provision of acute care
medical services (designated as SPC-5), and requires owners
of all acute care inpatient hospitals to demolish, replace,
or change to non-acute care all hospital buildings not in
substantial compliance.
3)Requires an owner of a GAC hospital building classified as
SPC-1, who has not requested an extension of the 2008
deadline, to submit a report to OSHPD no later than April 15,
2007, describing the status of each building in complying with
the deadline, and to identify the following:
a) Each building that is subject to the deadline;
b) The project number or numbers for retrofit or
replacement of each building;
c) The projected construction start date or dates and
projected construction completion date or dates; and,
d) The building or buildings to be removed from acute care
service and the projected date or dates of this action.
4)Requires owners of SPC-1 hospital buildings who have requested
an extension of the 2008 deadline to submit similar reports by
June 30, 2009, and June 30, 2011.
5)Requires OSHPD to make the information reported pursuant to 3)
and 4) above available on its Website within 90 days of
receipt.
FISCAL EFFECT : This bill, as amended, has not been analyzed by
a fiscal committee.
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COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill
provides short-term relief for hospitals while maintaining
current statutory deadlines for seismic safety compliance.
The author states that this bill represents a compromise on a
larger on-going discussion related to hospital seismic safety
compliance. The author further states that this bill improves
state monitoring of hospital compliance and assists hospitals
in achieving compliance while addressing barriers, such as
access to capital, that hinder or prevent compliance. The
author states that she intends to continue working with
hospitals, labor groups, the Administration, and other major
stakeholders on how best to achieve compliance so that
communities can continue to have access to their hospital
providers.
2)BACKGROUND . In 2008, a multidisciplinary working group of
scientists and engineers predicted that, within the next 30
years, California has more than a 99% chance of having an
earthquake equal to or greater than the magnitude 6.7
Northridge earthquake of 1994. The probability of a magnitude
6.7 or stronger earthquake striking the Los Angeles area over
the next 30 years is 67%, and 63% for the San Francisco Bay
Area.
The Northridge earthquake resulted in enactment later that year
of SB 1953 (Alquist), Chapter 740, Statutes of 1994. SB 1953
expands the 1983 Alquist Act by establishing seismic standards
for GAC hospital buildings and requiring every GAC hospital
building to comply with the standards and to meet specific
deadlines. By January 1, 2008 (or 2013/2015 if extensions
have been granted), every GAC hospital building must meet
specific construction standards established to keep these
structures standing after a major earthquake or be removed
from acute care. By January 1, 2030, all GAC hospital
buildings must comply with standards intended to keep these
buildings standing and operational following a severe
earthquake.
SPC classifications, ranging from SPC-1 to SPC-5, are used to
indicate the structural seismic risk of a hospital building in
the event of a major earthquake, with SPC-1 used to designate
buildings at potential risk of collapse or significant loss of
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life in a major earthquake. Due to major strides in
earthquake risk engineering that have occurred in the years
since SB 1953 passed, the California Building Standards
Commission in November 2007 approved the implementation of a
state-of-the-art risk assessment technology, HAZUS, to
reexamine the collapse risk of SPC-1 hospital buildings. This
reassessment allows OSHPD to move SPC-1 hospital buildings
that meet specified criteria to SPC-2 category. If
reclassified, these hospital buildings would move from a 2013
seismic deadline to a 2030 deadline.
The deadline for hospitals to apply for a HAZUS reclassification
was June 30, 2009. According to OSHPD, requests were
submitted for 550 SPC-1 buildings. Of the 294 reviews
completed as of late August, 205 (70%) resulted in buildings
being reclassified to SPC-2. OSHPD review of HAZUS requests
is still pending for 256 SPC-1 buildings. The "pass rate" for
this latter group, however, is expected to be lower than 70%
because, among other reasons, OSHPD reports that the remaining
facilities include incomplete or inadequate submittals. OSHPD
estimates that 50% or less of this group will be reclassified
to SPC-2.
Based on its latest assessment of seismic risk (including HAZUS
reclassifications through late August), OSHPD has classified
California's 2,723 hospital buildings as follows:
875 (32%) are SPC-1 buildings, meaning that they are at
risk for collapse or significant loss of life in a major
earthquake. These buildings, located in 274 hospitals (63%
of all hospitals) throughout California, must be
retrofitted, replaced, or removed from acute care services
by January 1, 2013 (or later, if an extension has been
granted);
288 buildings (11%) are SPC-2 buildings, meaning that
they are not at risk of collapse, but may not be repairable
or functional following a strong quake. These buildings
must be brought into compliance with the requirements of SB
1953 by 2030 (upgraded to SPC-5) or be removed from acute
care service;
380 buildings (14%) are SPC-3 and 819 buildings (30%)
are SPC- 4, meaning that they are in structural compliance
with SB 1953 but may not be functional after a strong
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earthquake. They have been constructed or reconstructed
and may be used to 2030 and beyond; and,
361 buildings (13%) are SPC- 5, meaning that they are in
structural compliance with SB 1953 and are considered
capable of providing services following a strong
earthquake. They may be used without restriction to 2030
and beyond.
In summary, 63% of hospitals in the state have at least one
SPC-1 building that must be retrofitted by 2013 (or 2015),
replaced by 2020, or removed from GAC service. Based on
mandated reports submitted by these hospitals in 2009, OSHPD
estimates about 40% of these hospitals are on track to comply
by the applicable deadline. Other hospitals in the remaining
60% may also be on track, but provided insufficient data for
OSHPD to determine their timeliness.
1)Expanded Reporting on SPC-1 Buildings . Most of the current
reporting requirements for hospital seismic safety compliance
were enacted in SB 1661 (Cox), Chapter 679, Statutes of 2006.
Among other provisions, SB 1661 requires all hospitals with
SPC-1 buildings to report information on buildings to be
retrofitted, replaced, or removed from acute care service and
the projected dates of those actions. The most recent of the
reports was due to OSHPD on June 30, 2009. In mid-August,
OSHPD provided preliminary findings from the reports to the
Legislature and stakeholders. Although the data provide a
broad picture of hospitals' progress toward seismic
compliance, there was insufficient information to develop a
detailed status report on compliance, as well as to assess the
impact of the deadlines on hospital GAC services and capacity.
The next report is due June 30, 2011, and is the report
proposed for expansion in this bill.
This bill advances the due date for the next report by hospitals
to November 1, 2010, and expands the information to be
reported. Many of these requirements are contained in the
author's SB 289, passed by the Assembly Health Committee on
July 7, 2009, and which is now a two-year bill. Besides
identifying which SPC-1 buildings will be retrofitted,
replaced, or removed from acute care service, the enhanced
reports will provide such building-specific information as
planned SPC levels, applicable deadlines, project status, and
current and planned inpatient beds and services. On a
hospital level, the reports will show the final configuration
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of all buildings on a hospital campus, as well as net changes
in a hospital's overall inpatient capacity if buildings are to
be removed from acute care service.
2)Additional SB 1661 Extensions . SB 1661 also authorizes OSHPD
to grant hospitals up to two additional years (up to January
1, 2015) to bring their SPC-1 buildings into compliance if
certain conditions are met, including a January 1, 2009
deadline by which the hospital must have submitted building
plans to OSHPD to indicate an active project. This bill will
allow additional SPC-1 buildings to qualify for the SB 1661
extension. Specifically, if a building "failed" a HAZUS
review and remained at SPC-1, the hospital may start the
process of requesting a two-year extension of the 2013
deadline by which the building must be retrofitted or
replaced. The hospital must submit building plans to OSHPD
before July 1, 2010, and must meet interim milestones by
specified dates. Construction must be underway at the time
the extension request is made, and must be completed in time
to enable OSHPD to issue a certificate of occupancy by the
applicable deadline for the building. According to the
author, these provisions are intended to allow a hospital that
did not request a two-year extension for an SPC-1 building
because it was counting on, but failed to receive, a HAZUS
reclassification to SPC-2, to get back in the queue for the
extension.
According to OSHPD, 85 hospitals containing 239 SPC-1 buildings
have submitted for HAZUS review but have not reported any
active projects. These buildings would not qualify for a
two-year extension under current law. Some of these buildings
will be reclassified to SPC-2. Those buildings that remain at
the SPC-1 level (i.e., fail HAZUS) would be newly eligible for
the two-year extension under this bill. Assuming half of the
239 buildings fail HAZUS, then about 120 buildings could
benefit from the reopening of the SB 1661 door.
3)Regulatory Changes . In order to allow OSHPD to update its
seismic risk classifications according to international
building code standards in a timely manner, this bill
authorizes OSHPD to promulgate emergency regulations
implementing the changes. HAZUS review could result in an
unknown number of buildings moving out of the SPC-1 category
using the updated HAZUS standards. OSHPD may also, via
emergency regulations pursuant to this bill, bring NPC
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deadlines into conformity with SPC deadlines.
4)SUPPORT . The California Hospital Association (CHA), arguing
in support of this bill, states that it would provide
immediate assistance to hospitals in meeting the 2013 seismic
mandates. According to CHA, not only would this bill allow
OSHPD to expedite implementation of HAZUS updates prior to the
2013 deadline, it would also allow hospitals that failed HAZUS
to show good faith efforts to come into compliance. CHA notes
the bill would also provide additional information on the
impact of seismic mandates sooner to the Legislature.
Lakewood Regional Memorial Center makes similar arguments.
5)POLICY ISSUES . The slow pace of hospital seismic compliance
has been ascribed to such factors as: changing assumptions
about the cost of retrofitting existing buildings versus
building new ones; the timing, cost, and effort required to
plan, fund, and obtain state and local approvals for a
multi-year major construction project; inadequate hospital
reimbursements; and lack of adequate planning on the part of
some hospitals to ensure compliance by the deadlines. Most
recently, hospitals have stated that current economic
conditions have seriously hampered their access to capital.
Regardless of the reasons, noncompliance could eventually lead
to an overall reduction in the availability of GAC services in
a community due to hospitals removing nonconforming buildings
from acute care services. These arguments have generated
proposals to extend seismic safety deadlines in order to allow
more time for hospitals to come into compliance.
The policy concern of reduced acute care availability, however,
must be weighed against another one-namely, the need to ensure
that hospitals remain standing and operational after a major
earthquake. Given the high probability of a Northridge-like
earthquake within the next 30 years, compliance should be
sooner rather than later. As stated in 1) above, the author
intends to continue exploring longer-term options to achieve
the objectives of bringing more hospitals into compliance
while maintaining acute care services in communities.
6)PREVIOUS AND RELATED LEGISLATION .
a) AB 303 (Beall), to enrollment, allows specified county
and University of California disproportionate share
hospitals that serve Medi-Cal patients to receive
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supplemental Medi-Cal reimbursement from the Construction
and Renovation Reimbursement Program for debt service on
new capital projects to meet seismic safety deadlines if
plans are submitted to the state after January 1, 2007 and
before December 31, 2011.
b) AB 523 (Huffman), to enrollment, allows OSHPD to grant a
two-year extension of the 2013 seismic deadline for a
hospital building that is owned by Marin Healthcare
District. Establishes interim deadlines and requirements
the hospital must meet in order to qualify for the
extension, as specified. Contains an urgency clause.
c) AB 1235 (Hayashi), currently on the Senate floor, grants
Alameda County a six-month extension, to July 1, 2010, to
submit a facility master plan to OSHPD to replace its SPC-1
building by January 1, 2020.
d) SB 289 (Ducheny), a two-year bill currently on the
Assembly floor, expands the reporting requirements for
SPC-1 buildings in a manner similar to this bill.
e) SB 306 (Ducheny), Chapter 642, Statutes of 2008, amends
the Act to permit a hospital that has received an extension
of the 2008 seismic retrofit deadline to January 1, 2013,
to instead replace a SPC-1 building by January 1, 2020, if
the hospital demonstrates it lacks financial capacity to
retrofit by 2013 and meets other specified conditions.
f) SB 1661 (Cox), Chapter 693, Statutes of 2006, authorizes
up to two additional two years for hospitals that have
already received an extension to January 1, 2013 of the
2008 seismic safety compliance deadline if specified
criteria are met, and requires hospitals with SPC-1
buildings to submit reports with specified information, to
be posted on the Website of OSHPD.
g) SB 167 (Speier), of 2005, would have permitted delays of
the 2008 seismic safety deadline for specified hospitals
that do not exceed maximum allowable seismic risk, as
determined by OSHPD, and expedited the final compliance
deadline to 2020 for hospitals granted the delay. SB 167
failed passage in the Assembly Health Committee.
h) AB 1978 (Walters), of 2005, would have extended, from
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January 1, 2008 to January 1, 2015, the deadline for any
SPC-1 building to only be used for nonacute care purposes,
and permitted hospitals subject to the 2015 deadline to
request additional extensions to 2020, as specified. AB
1978 failed passage in the Assembly Health Committee.
i) AB 1673 (Nation and Richman), of 2005, would have
repealed provisions of the Alquist Act that require
specified hospitals to meet seismic retrofitting
requirements by 2008, revised the final 2030 deadline
requirement to 2020, and made the bill contingent upon the
enactment of AB 1672 (Nation) relating to electronic
medical recordkeeping. AB 1673 failed passage in the
Assembly Health Committee.
j) SB 1953 (Alquist), Chapter 740, Statutes of 1994,
requires every hospital building to comply with two
deadlines. By January 1, 2008 (or no later than January 1,
2013, if an extension has been granted), every hospital
building must meet specific construction standards
established to keep these structures standing after a major
earthquake. By January 1, 2030, the law requires all
hospital buildings to comply with standards intended to
keep these buildings operational following a severe quake.
REGISTERED SUPPORT / OPPOSITION :
Support
California Hospital Association
Lakewood Regional Medical Center
Opposition
None on file.
Analysis Prepared by : Joyce Iseri / HEALTH / (916) 319-2097