Bill Text: CA AB869 | 2023-2024 | Regular Session | Chaptered
Bill Title: Hospitals: seismic safety compliance.
Spectrum: Slight Partisan Bill (Democrat 7-4)
Status: (Passed) 2024-09-28 - Chaptered by Secretary of State - Chapter 801, Statutes of 2024. [AB869 Detail]
Download: California-2023-AB869-Chaptered.html
Assembly Bill
No. 869
CHAPTER 801
An act to amend Section 130065 of, and to add Sections 130065.1, 130065.15, 130078.5, and 130078.6 to, the Health and Safety Code, relating to hospitals.
[
Approved by
Governor
September 28, 2024.
Filed with
Secretary of State
September 28, 2024.
]
LEGISLATIVE COUNSEL'S DIGEST
AB 869, Wood.
Hospitals: seismic safety compliance.
(1) Existing law requires, no later than January 1, 2030, owners of all acute care inpatient hospitals to either demolish, replace, or change to nonacute care use all hospital buildings not in substantial compliance with specified seismic safety standards or to seismically retrofit all acute care inpatient hospital buildings so that they are in substantial compliance with those seismic safety standards. Existing law requires the Department of Health Care Access and Information to issue a written notice upon compliance with those requirements.
This bill would authorize a Distressed Hospital Loan Program recipient, a small hospital, a rural hospital, a critical access hospital, or a health care district hospital, as defined, and except as specified, to seek approval from the Department of Health Care Access and Information for a delay to the January 1, 2030, compliance deadline described above by up to 3 years. The bill would require hospitals seeking a delay to submit a seismic compliance plan,
as specified, and, if necessary, a Nonstructural Performance Category-5 evaluation report. The bill would also require the hospital and department to identify least 2 major milestones relating to the seismic compliance plan that will be used as the basis for determining whether a hospital is making adequate progress toward meeting the subject hospital’s seismic compliance deadline. The bill would subject the submitted seismic compliance plans to departmental review for reasonableness and require the hospital seeking the delay to submit any documentation requested by the department to assist its review. The bill would require the department to approve or deny a seismic compliance plan and any delay to the seismic compliance deadline within 120 days. The bill would also authorize the department to additionally delay the deadline for compliance by 2 years, up to a maximum of January 1, 2035, as necessary, for hospitals that continue to experience financial distress or that need to deal with contractor, labor,
or material delays, acts of God, governmental entitlements, or other circumstances beyond the hospital’s control. The bill would require hospitals eligible to delay compliance under these provisions to comply with the seismic safety standards described above by no later than January 1, 2035.
The bill would impose a fine of $5,000 per calendar day for a hospital’s failure to comply with a revised construction schedule or to meet any major milestone established by the department until the requirements or milestones, respectively, are met. The bill would also prohibit these hospitals from being issued a building permit for any building in the facility except those required for seismic compliance, maintenance, and emergency repairs until the milestone is met and the hospital is adequately progressing toward meeting the subject hospitals seismic compliance, as determined by the department. The bill would require the department to implement the above-described provisions
by regulation, as specified.
The bill would require the department to support a hospital requesting a delay under the above-described provisions to explore the opportunities under the Small and Rural Hospital Relief Program to assist with seismic compliance and to annually post a list of hospitals that have been granted a delay on its internet website, as specified.
(2) Existing law establishes the Small and Rural Hospital Relief Program for the purpose of funding seismic safety compliance with respect to small hospitals, rural hospitals, and critical access hospitals in the state. Existing law requires
the department to provide grants to small, rural, and critical access hospital applicants that meet certain criteria, including that seismic safety compliance, as defined, imposes a financial burden on the applicant that may result in hospital closure. Existing law also creates the Small and Rural Hospital Relief Fund and continuously appropriates the moneys in the fund for purposes of administering and funding the grant program.
This bill would require the department to expand eligibility for grants for single- and 2-story general acute care hospitals located in remote or rural areas with fewer than 80 general acute care beds and general acute care hospital revenue of $75 million or less. The bill would require grants under the program to provide general acute care
hospitals with funds to secure an SPC-4D assessment for purposes of planning for, and estimating the costs of, compliance with certain seismic safety standards, as specified. The bill would authorize specified general acute care hospitals to apply for a grant for purposes of complying with those seismic safety standards.
If state funds are appropriated to the Small and Rural Hospital Relief Fund in the future for the purpose of complying with the seismic safety standards described in paragraph (1), the bill would require a hospital that qualifies for assessment grants under the program to submit specified financial information relating to, among other things, the accuracy of the hospital’s SPC-4D cost estimates to the
department before being awarded state funds.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 130065 of the Health and Safety Code is amended to read:130065.
(a) In accordance with the compliance schedule approved by the department, but in any case no later than January 1, 2030, owners of all acute care inpatient hospitals shall either:(1) Demolish, replace, or change to nonacute care use all hospital buildings not in substantial compliance with the regulations and standards developed by the department pursuant to the Alfred E. Alquist
Hospital Facilities Seismic Safety Act
of 1983 and this act.
(2) Seismically retrofit all acute care inpatient hospital buildings so that they are in substantial compliance with the regulations and standards developed by the department pursuant to the Alfred E. Alquist Hospital Facilities Seismic Safety Act and this act.
(b) Notwithstanding subdivision (a), if a hospital’s seismic compliance plan, developed pursuant to subdivisions (b) and (d) of Section 130065.1 and approved by the department, substantiates the need for
a delay of up to three years or, at most, five years beyond January 1, 2030, the owner of that general acute care hospital shall, by the deadline authorized in the approved extension, either:
(1) Demolish, replace, or change to nonacute care use all hospital buildings not in substantial compliance with the regulations and standards developed by the department pursuant to the Alfred E. Alquist Hospital Facilities Seismic Safety Act of 1983 and this act.
(2) Seismically retrofit all acute care inpatient hospital buildings so that they are in substantial compliance with the regulations and standards developed by the department pursuant to the Alfred E. Alquist Hospital Facilities Seismic Safety Act of 1983 and this act.
(c) Upon compliance with this section, the hospital shall be issued a written notice of compliance by the department. The department shall send a written notice of violation to hospital owners that fail to comply with this section.
SEC. 2.
Section 130065.1 is added to the Health and Safety Code, to read:130065.1.
(a) For purposes of this article, the following definitions shall apply:(1) “Critical access hospital” means a hospital designated by the State Department of Public Health as a critical access hospital, and certified as such by the Secretary of the United States Department of Health and Human Services under the federal Medicare Rural Hospital Flexibility Program.
(2) “Distressed Hospital Loan Program recipient” is a hospital that received a loan pursuant to Chapter 4 (commencing with Section 129380) of Part 6. This may also include a future program recipient, should the Legislature appropriate additional state funding to the program and extend the date identified in Section
129387.
(3) “Health care district hospital” is a hospital authorized pursuant to Division 23.
(4) “Rural hospital” means a “rural general acute care hospital” as set forth in subdivision (a) of Section 1250 or a hospital located in a rural or frontier medical study service area, as defined by the California Healthcare Workforce Policy Commission.
(5) “Small hospital” is a hospital with 50 beds or fewer.
(b) Notwithstanding the January 1, 2030, seismic compliance deadline outlined in Section 130065, a Distressed Hospital Loan Program recipient, a small hospital, a rural hospital, a critical access hospital, or a health care district hospital, except as otherwise provided in this section, may seek approval from the department for a delay to the compliance
deadline by up to three years with the submission and departmental approval of a seismic compliance plan, as described in subdivision (d), and, if necessary, a Nonstructural Performance Category-5 evaluation report.
(c) (1) Hospitals that belong to integrated health care systems with two or more separately licensed hospital facilities shall be ineligible for a delay under this section, including a health care district hospital that has a contractual agreement with a health system that imposes upon the health system any financial responsibility for the health care district’s infrastructure costs for compliance with Section 130065, unless the entire integrated health care system is determined by the department to be in financial distress.
(2) Paragraph (1) shall not apply to any of the following:
(A) A rural hospital with fewer than 80 general acute care beds and general acute care hospital revenue of seventy-five million dollars ($75,000,000) or fewer, as reported to the department pursuant to Section 128740 in 2020.
(B) A hospital that is part of an integrated health care system that is operated by a health care district or a nonprofit corporation that is affiliated with the health care district hospital owner by means of the district’s status as the nonprofit corporation’s sole corporate member.
(C) A health care district hospital that does not have a contractual, management, lease, or operating agreement with a health system that imposes upon the health system any financial responsibility for the health care district’s infrastructure cost for compliance with Section 130065.
(d) A Distressed
Hospital Loan Program recipient, a small hospital, a rural hospital, a critical access hospital, or a health care district hospital, except as otherwise specified, with a building that is not anticipated to be in full compliance with the seismic safety regulations or standards described in Section 130065 when this section becomes operative shall provide all of the following to the department:
(1) A Nonstructural Performance Category-5 evaluation report in compliance with Article 11 of Chapter 6 of Title 24 of the California Administrative Code for each noncompliant building, if necessary, by no later than January 1, 2025.
(2) The hospital’s seismic compliance plan in accordance with Section 1.4 of Article 1 of Chapter 6 of Title 24 of the California Administrative Code and related regulations, by no later than January 1, 2026. The seismic compliance plan shall outline steps,
including milestones, to achieve compliance with seismic safety standards at the earliest reasonable date, but by no later than January 1, 2033.
(3) The subject hospital and the department shall identify at least two major milestones relating to the seismic compliance plan that will be used as the basis for determining whether the hospital is making adequate progress toward meeting the subject hospital’s seismic compliance deadline. The seismic compliance plan is subject to departmental review for reasonableness.
(A) If the seismic compliance plan includes a compliance schedule that is delayed beyond the 2030 seismic compliance deadline described in Section 130065, the hospital shall submit any documentation requested by the department to assist the department in its review of the reasonableness of the compliance schedule.
(B) The department shall have 120 days to approve or deny the hospital’s seismic compliance plan and any delay to the seismic compliance deadline. If the department determines the compliance schedule is unreasonable based on the information submitted, the department shall notify the hospital and provide the department’s rationale for its determination. The hospital shall be given the opportunity to address the identified concerns or to provide additional information to substantiate the compliance schedule.
(e) (1) The department shall have the discretion to additionally delay the amount of time by which a Distressed Hospital Loan Program recipient, a small hospital, a rural hospital, a critical access hospital, or a health care district hospital shall comply with Section 130065 by two years, up to a maximum of January 1, 2035. This delay may be authorized as necessary for hospitals that continue to experience
financial distress or that need to deal with contractor, labor, or material delays, acts of God, governmental entitlements, or other circumstances beyond the hospital’s control. If up to an additional two-year delay is granted, the hospital shall submit a revised construction schedule and associated milestones to the department.
(2) A Distressed Hospital Loan Program recipient, a small hospital, a rural hospital, a critical access hospital, or a health care district hospital, except as otherwise specified, that is granted a delay in compliance with the requirements of Section 130065 pursuant to this subdivision shall provide the department with any information that the department deems necessary, including, but not limited to, information to assess whether the hospital is in financial distress or continues to be in financial distress.
(3) For eligible hospitals requesting an
additional delay under this subdivision due to financial distress, the department make a determination of financial distress using financial criteria, including, but not limited to, days cash on hand, current ratio, access to working capital, operating margin, cash burn rate, the financial impact of mandatory seismic compliance costs on the hospital or integrated health care system, and other methodologies developed pursuant to Chapter 4 (commencing with Section 129380) of Part 6.
(4) If the department determines that an eligible hospital or integrated health care system is no longer in financial distress and is not likely to return to financial distress due to complying with seismic safety standards, the hospital or integrated health care system shall submit a revised seismic compliance plan to the department for review and approval one month after being informed of the department’s determination that the hospital or integrated health care
system is no longer in financial distress. Notwithstanding any delay of the January 1, 2030, seismic requirements granted to the hospital or integrated health care system pursuant to subdivision (b), the department may adjust compliance deadlines to reflect the fact that the hospital or integrated system is no longer in financial distress.
(f) Notwithstanding any other provisions in this chapter, a hospital seeking a delay under this section shall comply with requirements for a seismic compliance plan in accordance with Section 1.4 of Article 1 of Chapter 6 of Title 24 of the California Administrative Code and related regulations.
(g) All hospitals determined eligible to delay compliance with Section 130065 pursuant to this section shall comply with Section 130065 no later than January 1, 2035. Failure to comply with the revised construction schedule or meet any major milestones
established by the department and the hospital shall result in the assessment of a fine of five thousand dollars ($5,000) per calendar day until the requirements or milestones, respectively, are met.
(h) The department shall provide support to a Distressed Hospital Loan Program recipient, a small hospital, a rural hospital, a critical access hospital, or a health care district hospital requesting a delay under this section to explore the opportunities under the Small and Rural Hospital Relief Program to assist with seismic compliance.
(i) Hospitals that fail to meet any milestone or seismic compliance deadline approved in its compliance plan shall not be issued a building permit for any building in the facility except those required for seismic compliance, maintenance, and emergency repairs until the milestone is met and the hospital is adequately progressing toward meeting the
subject hospital’s seismic compliance, as determined by the department.
(j) This section shall not extend any deadlines for Structural Performance Category-1 buildings to achieve structural integrity to no longer pose a potential risk of collapse or a significant risk of loss of life.
(k) Notwithstanding any other law, any information used by the department to determine a hospital’s financial status for purposes of this section is confidential and shall not be subject to disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
(l) The department shall adopt regulations and standards, or revise existing regulations and standards, or both, to implement the provisions of this section. Regulatory submissions made by the department to the
California Building Standards Commission pursuant to this section shall be deemed to be emergency regulations and shall be adopted as such. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, and general welfare.
SEC. 3.
Section 130065.15 is added to the Health and Safety Code, to read:130065.15.
The department shall annually post a list of hospitals that have been granted a delay of the January 1, 2030, deadline described in Section 130065 pursuant to Section 130065.1 on its internet website. The list shall include the name and location of each hospital and the projected final compliance date approved by the department.SEC. 4.
Section 130078.5 is added to the Health and Safety Code, to read:130078.5.
(a) The department shall expand eligibility for grants for single- and two-story general acute care hospitals located in rural areas with fewer than 80 general acute care beds and general acute care hospital revenue of seventy-five million dollars ($75,000,000) or less, as reported to the department pursuant to Section 128740 in 2020.(b) (1) Grants pursuant to this chapter shall provide general acute care hospitals described in subdivision (a) with funds to secure an
SPC-4D assessment for purposes of planning for, and estimating the costs of, complying with Section 130065.
(2) The department shall conduct outreach to general acute care
hospitals described in subdivision (a) regarding the availability of these grants and provide technical assistance to hospitals applying for the grants.
(3) A general acute care hospital receiving a grant for an assessment pursuant to this subdivision shall provide the estimated cost of SPC-4D compliance to the department.
(c) (1) Subject to paragraphs (2) and (3), general acute care hospitals that have received a grant for an assessment pursuant to subdivision (b) may apply for a grant for purposes of complying with Section 130065.
(2) Subject to paragraphs (2) and (3), for general acute care hospitals that already have an SPC-4D assessment approved by the department, the department may award the general acute care hospital grant money for purposes of complying with Section 130065.
SEC. 5.
Section 130078.6 is added to the Health and Safety Code, to read:130078.6.
(a) If state funds are appropriated to the Small and Rural Hospital Relief Fund in the future for the purpose of complying with Section 130065, before being awarded state funds, a hospital that qualifies for assessment grants under this chapter shall submit financial information to the department, on a form as required by the department, related to all of the following:(1) Whether the hospital has attempted to secure other methods of funding for SPC-4D compliance, including federal funding, and if not, the reason why.
(2) The accuracy of the hospital’s SPC-4D cost estimates and confirmation that the estimated costs are only for purposes of SPC-4D compliance.
(3) The hospital’s need for assistance due to financial hardship and lack of ability to finance the required improvements, in order to access state funds.
(b) In awarding grants, the department shall have the authority to deny any costs from the assessment completed pursuant to this chapter that the department determines are not necessary to comply with SPC-4D requirements.
