§ 130065.1. — 130065.1. (Amended by Stats. 2025, Ch. 67, Sec. 131.)

(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 less, 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 shall 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.

Legislative History

Amended by Stats. 2025, Ch. 67, Sec. 131. (AB 1170) Effective January 1, 2026.