Hospital Seismic Safety Financing Bill Becomes Law

October 12, 2009
Contact: Rodney Foo @ (408) 282-8920

Legislation authored by Assemblymember Jim Beall, Jr. to help hospitals obtain federal funds to finance and complete state-mandated seismic safety improvements was signed by the Governor.

“Assembly Bill 303 ensures our emergency rooms can remain open during a catastrophe and it creates thousands of construction jobs,’’ Beall said. “It’s really a stimulus package that works on two fronts.’’

Assembly Bill 303 allows designated hospitals contracted to serve Medi-Cal patients to use local funding in place of state funding to qualify for reimbursement from the federal Construction Renovation Reimbursement Program for new capital projects to meet state seismic safety deadlines. Currently, there is no state funding available to draw those federal funding.

After 11 hospitals were completely or partially closed in the aftermath of the 1994 Northridge earthquake, the Legislature passed a 2013 deadline for hospitals to begin safety retrofitting or replacement of their most vulnerable buildings. The law also requires that hospital buildings with retrofitting must be replaced by 2030. Fifteen years ago, the initial total cost was projected at $14 billion to make the buildings statewide safe. But more detailed and accurate studies have now placed that figure at $110 billion or more.

The bill’s passage was hailed by hospital officials on Monday.

“This bill really means a lot to us as a Public Safety Net institution,’’ said Kim Roberts, CE0 of the Santa Clara Valley Health and Hospital System, which includes Santa Clara Valley Medical Center, the county’s biggest hospital. “Public Safety Net hospitals have the greatest challenge of how to meet the seismic mandates because we don’t have the funding. This bill is a great example of creativity.’’

Said Ron Smith, senior vice president of the Hospital Council of Northern and Central California: “In the current financial situation our country faces, this bill allows about 60 hospitals to raise enough capital to rebuild. It’s likely many of these hospitals would have otherwise closed. Without Assemblymember Jim Beall’s bill many of these hospitals might have closed.’’

AB 303 becomes law on Jan. 1.