(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.