BILL ANALYSIS
SB 499
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Date of Hearing: September 9, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 499 (Ducheny) - As Amended: September 4, 2009
Policy Committee: Health Vote:17-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill modifies oversight of and deadlines associated with
California hospital seismic safety requirements. Specifically,
this bill:
1)Authorizes, until January 1, 2013, the Office of Statewide
Health Planning and Development (OSHPD) to extend deadlines by
two years subject to criteria established by SB 1661 (Cox),
Chapter 679, Statutes of 2006 and adds new criteria to the SB
1661 requirements.
2)Authorizes, until January 1, 2013, OSHPD to use federal
Hazards US (HAZUS) (computer modeling used to estimate
structural earthquake losses), and deems submissions as
emergency regulations if related to HAZUS or compliance with
nonstructural performance category (NPC) requirements.
3)Expands hospital reporting requirements for Structural
Performance Category (SPC)-1 buildings. SPC-1 buildings are
those at greatest risk for collapse during an earthquake.
Establishes a penalty for failure to report of $10 per
licensed bed up to $1,000 per day per SPC-1 building, to be
deposited in the Hospital Building Fund. New reporting
requirements include:
a) The number and service type of inpatient beds for
building planned for retrofit or replacement.
b) The dates a building will be removed from service and
the services currently provided.
c) The number of inpatient beds and patient days by type of
service for 2008, 2009, and 2010.
d) The net change in number of beds due to retrofit,
replacement, and removal from service
SB 499
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FISCAL EFFECT
1)Absorbable workload to OSHPD to review hospitals for
eligibility for a two-year extension. According to OSHPD, 240
SPC-1 buildings owned by 85 hospitals have requested HAZUS
review, but have not reported any active construction projects
approved by OSHPD. Estimates indicate approximately 120, or
half, of these buildings may be eligible for an extension per
requirements of this bill.
2)Current law and regulations require OSHPD to levy a user fee
of up to 2% of a hospital project's estimated construction
costs to support the workload of review and technical
assistance. The current fee is 1.64% of construction costs and
is deposited in the Hospital Building Fund. Assuming the
owners of each of the 120 buildings reclassified pursuant to
this bill pay a fee on a $20 million seismic project,
approximately $40 million special funds will be generated.
These funds are used to support OSHPD throughout the building
cycle, which can last 5 years or more. For example, OSHPD
provides plan review, technical assistance, and inspection
support.
3)Additional unknown revenues deposited into the Hospital
Building Fund to the extent hospitals are required to pay
penalties of $10 per licensed bed up to $1,000 per day per
SPC-1 building for failure to report to OSHPD.
COMMENTS
1)Rationale . This bill is author sponsored to create alternative
pathways for hospitals having trouble meeting current law
deadlines regarding rebuilding or retrofitting hospital
buildings at risk for collapse during an earthquake. The bill
builds on criteria established by SB 1661 by adjusting interim
benchmarks to allow more hospitals to qualify for the
extension. In addition, this bill provides specificity to
OSHPD authority around the use of federal HAZUS data, expands
hospital reporting requirements, and establishes penalties to
increase the number of hospitals that comply with hospital
reporting requirements.
2)Seismic Safety Landscape . Hospitals throughout California are
subject to statutory seismic requirements and face billions of
dollars of unfunded construction needs. According to OSHPD,
there is $10 billion in hospital planning and construction
currently underway statewide. According to a 2007 study by
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RAND, total construction costs for California may range from
$45 billion to $110 billion in 2006 dollars. The actual costs
will depend on project size and duration, future inflation,
and construction costs.
3)Hospital Earthquake Risk . Structural Performance Category-1
(SPC-1) hospital buildings pose a significant risk of collapse
and a danger to the public after a strong earthquake. The
lowest risk structure is a SPC-5. Under current law, SPC-1
buildings must have been retrofitted, replaced, or removed
from acute-care service by January 1, 2008, unless a hospital
has been granted an extension to 2013 or 2020. SB 1661
established eligibility for certain hospitals to receive an
extension to 2013 and SB 306 (Ducheny), Chapter 642, Statutes
of 2007 established processes for hospitals to receive the
extension to 2020.
4)Recent Risk Assessments . OSHPD has classified about 900 of
2,700 hospital buildings statewide as SPC-1. These SPC-1
buildings are owned by 274 hospitals. The deadline for
hospitals to apply for a HAZUS reclassification was June 30,
2009 and 550 requests for HAZUS review were submitted. Of the
300 HAZUS reviews that OSHPD has completed, about 70% of
buildings have been reclassified to SPC-2 or a lower risk
level. It is expected that of the remaining hospitals subject
to HAZUS review, the reclassification rate will be less than
70% due to incomplete or inadequate hospital submissions.
Based on mandated reports submitted by hospitals, OSHPD
indicates about 40% of hospitals with SPC-1 buildings are on
track to meet respective statutory timelines while 60% have
status that is either unknown or not likely to result in
timely rebuilding or retrofitting.
5)Concerns . The California Nurses Association (CNA) opposes this
bill due to the extension of seismic safety deadlines
contained in this bill. CNA is concerned about patient health
and safety following an earthquake. CNA indicates they have
opposed numerous other bills, including SB 1661, which
proposed extending seismic safety deadlines.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081