BILL ANALYSIS
SB 499
Page 1
SENATE THIRD READING
SB 499 (Ducheny)
As Amended September 4, 2009
Majority vote
SENATE VOTE :Vote not relevant
HEALTH 17-0 APPROPRIATIONS 15-0
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|Ayes:|Jones, Fletcher, Adams, |Ayes:|De Leon, Conway, Ammiano, |
| |Block, Carter, Conway, De | | |
| |La Torre, | |Charles Calderon, Coto, |
| |De Leon, Emmerson, | |Davis, Fuentes, Harkey, |
| |Gaines, Hall, Hernandez, | |Miller, Nielsen, |
| |Bonnie Lowenthal, Nava, | |John A. Perez, Skinner, |
| |V. Manuel Perez, Salas, | |Solorio, Audra |
| |Audra Strickland | |Strickland, Torlakson |
|-----+--------------------------+-----+--------------------------|
| | | | |
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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)Deems as emergency regulations, until January 1, 2013,
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
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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;
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;
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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
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
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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
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: 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; or 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;
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
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rebuilding SPC-1 buildings by 2013, to instead replace them
by January 1, 2020, if: 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 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; and,
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. The report must identify each building subject
to the deadline; the project number or numbers for retrofit or
replacement of each building; the projected construction start
and completion date or dates; and, 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 Web site within 90 days of
receipt.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Absorbable workload to OSHPD to review hospitals for
eligibility for the two-year extension added by this bill. If
half of the 239 buildings with a pending HAZUS review remain
at the SPC-1 level, about 120 would become eligible for an
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extension.
2)Current law and regulations require OSHPD to level 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 in special funds will be generated.
3)Additional unknown revenues into the Hospital Building Fund,
to the extent hospitals pay fines for failure to submit
mandated reports ($10 per licensed bed per day, up to $1,000
per day for each SPC-1 building for which a report has not
been submitted).
COMMENTS : 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.
In 2008, a multidisciplinary 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, which expanded the Alquist Act by establishing
seismic standards that GAC hospital buildings must comply with
by specific deadlines. By January 1, 2008 (or 2013/2015 if
extended), every GAC hospital building must either meet specific
construction standards designed to keep these structures
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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 buildings operational
after 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
life in a major earthquake. Due to major strides in earthquake
risk engineering subsequent to SB 1953, 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. However, OSHPD estimates that the "pass rate" for the
remaining buildings is expected to be 50% or less, due in part
to incomplete or inadequate submittals for some of the remaining
requests.
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:
1)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).
2)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
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service.
3)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 earthquake. They
have been constructed or reconstructed and may be used to 2030
and beyond.,
4)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. 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.
The above data were reported by hospitals to OSHPD pursuant to
reporting requirements enacted in SB 1661 (Cox), Chapter 679,
Statutes of 2006. Among other provisions, SB 1661 required all
hospitals with SPC-1 buildings to report specified 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, and in
mid-August, OSHPD provided preliminary findings 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
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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 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.
SB 1661 also authorized 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 to retrofit the building. 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. According to the author,
these provisions will 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 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.
Last, 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
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to this bill, bring NPC deadlines into conformity with SPC
deadlines.
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 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.
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.
The California Nurses Association (CNA) opposes extending the SB
1661 two-year extension to hospitals that fail HAZUS review and
authorizing OSHPD to promulgate emergency regulations. Noting
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that it also opposed SB 1661, CNA argues that the extension
gives additional time to hospitals that made a conscious choice
to seek HAZUS reclassification and that it is premature to grant
extensions while HAZUS reviews are still pending. CNA also
questions how many hospitals would be affected by the emergency
regulations. CNA states that it has opposed previous related
measures because they extended seismic retrofit deadlines
without adequate information and posed health and safety risks
to patients and health care workers.
Analysis Prepared by : Joyce Iseri / HEALTH / (916) 319-2097
FN: 0003119