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<ns0:Id>20250AB__223198AMD</ns0:Id>
<ns0:VersionNum>98</ns0:VersionNum>
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<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-19</ns0:ActionDate>
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<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2026-03-23</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:MeasureType>AB</ns0:MeasureType>
<ns0:MeasureNum>2231</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Ahrens</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
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<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Ahrens</ns0:Name>
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<ns0:Title> An act to add Section 21080.52 to the Public Resources Code, relating to environmental quality. </ns0:Title>
<ns0:RelatingClause>environmental quality</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>California Environmental Quality Act: hospital projects.</ns0:Subject>
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<ns0:DigestText>
<html:p>The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment.</html:p>
<html:p>This bill would exempt from CEQA hospital projects, as defined, located in the City of Emeryville or City of Santa Clara. The bill would, before a lead agency determines that a hospital project is exempt from CEQA, require a project applicant to certify to the lead agency that the project complies with certain labor requirements. Because the bill would require a lead agency to determine the applicability of the exemption, this bill would impose a state-mandated local program.</html:p>
<html:p>This bill would make
legislative findings and declarations as to the necessity of a special statute for the Cities of Emeryville and Santa Clara.</html:p>
<html:p>The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.</html:p>
<html:p>This bill would provide that no reimbursement is required by this act for a specified reason.</html:p>
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<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>YES</ns0:LocalProgram>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_CE657134-5BDB-4821-8C10-5CC4BC39D9AD">
<ns0:Num>SECTION 1.</ns0:Num>
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The Legislature finds and declares all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
On July 4, 2025, the President of the United States signed into law Public Law 119-21 (H.R. 1), which makes sweeping changes to federal health care financing, including substantial reductions in federal Medicaid funding and other health coverage supports.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
H.R. 1 is projected to result in significant coverage losses and increased rates of uninsured individuals, thereby increasing uncompensated
care and financial strain on hospital systems nationwide, including in the State of California.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
California hospitals, particularly safety net, rural, nonprofit, and community hospitals, operate on narrow financial margins and rely heavily on Medi-Cal reimbursement and supplemental payment mechanisms that will be materially reduced or constrained under H.R. 1.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The financial impacts of H.R. 1 are expected to take effect in stages over the next several fiscal years, creating a limited window during which hospital systems retain sufficient financial capacity to plan, finance, and construct new hospital facilities and critical health infrastructure.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Delays in hospital construction caused by lengthy and uncertain environmental review processes under the California Environmental Quality Act (Division 13
(commencing with Section 21000) of the Public Resources Code) (CEQA) increase project costs, undermine financing feasibility, and, in the context of impending federal funding reductions, may render essential hospital projects financially infeasible or force their abandonment altogether.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
The failure to complete hospital construction projects before the full implementation of H.R. 1 funding reductions will exacerbate existing capacity constraints, limit access to emergency, inpatient, and specialty care, and impair California’s ability to meet the health care needs of a growing and aging population.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Timely construction of hospitals and related health care facilities is essential to maintain emergency preparedness, disaster response capability, and public health resilience, particularly in light of increasing climate-related emergencies and public health crises.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
CEQA litigation risk and prolonged review timelines disproportionately affect hospital projects, even where those projects are designed to replace outdated facilities, expand critical care capacity, or improve seismic safety, energy efficiency, and patient outcomes.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
Providing a targeted and time-limited CEQA exemption for certain hospital construction projects is necessary to accelerate the delivery of essential health care infrastructure before the financial ramifications of H.R. 1 significantly constrain hospital investment and capital availability.
</html:p>
<html:p>
(10)
<html:span class="EnSpace"/>
It is in the interest of the State of California to ensure that hospitals are constructed, modernized, and operational before the full onset of federal funding reductions in order to preserve access to care, protect public health, and stabilize the state’s
health care delivery system.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
It is the intent of the Legislature to establish an exemption from CEQA for qualifying hospital construction to address the urgent threat proposed by H.R. 1 to California’s hospital systems and to ensure timely development of critical health care infrastructure for the People of California.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 21080.52 is added to the
<ns0:DocName>Public Resources Code</ns0:DocName>
, to read:
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<ns0:Num>21080.52.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
For purposes of this section, the following definitions apply:
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<html:p>
(1)
<html:span class="EnSpace"/>
(A)
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“Hospital project” means a project for the construction and operation of a hospital licensed under Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
“Hospital project” also includes both of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
One or more organized outpatient clinics, as defined in Section 51115 of Title 22 of the California Code of Regulations, that are located within one-quarter mile of a licensed hospital and the organized outpatient clinic is operated in association
with the licensed hospital.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Parking structures supporting the licensed hospital and organized outpatient clinic and emergency transportation infrastructure, including helipads.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Jobs that pay prevailing wages” means that all construction workers employed in the execution of the project will receive at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code. If the project is certified for an exemption, the project applicant shall include this requirement in all contracts for the performance of the work.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Project labor agreement” has the same meaning as set forth in Section 2500 of the Public Contract Code.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Subject to subdivision (c), this division does not apply to hospital projects located in the City of Emeryville or the City of Santa Clara.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Before a lead agency determines that a hospital project is exempt from this division under the section, the project applicant shall certify both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The hospital project creates high-wage, highly skilled jobs that pay prevailing wages and living wages, employs a skilled and trained workforce, as defined in subdivision (d) of Section 2601 of the Public Contract Code, provides construction jobs and permanent jobs for Californians, and helps reduce unemployment.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Subparagraph (A) does not apply to a contractor or subcontractor performing the work on the project that
is subject to a project labor agreement requiring the payment of prevailing wages to all construction workers employed in the execution of the project and providing for enforcement of that obligation through an arbitration procedure.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
All contractors and subcontractors for the hospital pay to all construction workers employed in the execution of the project at least the general prevailing rate of per diem wages.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Except as provided in subparagraph (C), the obligation of the contractors and subcontractors to pay prevailing wages pursuant to subparagraph (A) may be enforced by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the project, or by an underpaid worker
through an administrative complaint or civil action. If a civil wage and penalty assessment is issued, the contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Subparagraph (B) does not apply if all contractors and subcontractors performing work on the project are subject to a project labor agreement that requires the payment of prevailing wages to all construction workers employed in the execution of the project and provides for enforcement of that obligation through an arbitration procedure.
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<ns0:Num>SEC. 3.</ns0:Num>
<ns0:Content>
<html:p>The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because the hospital construction projects in the Cities of Emeryville and Santa Clara are uniquely time sensitive due to the combined impacts of federal funding reductions under Public Law 119-21, growing regional health care demand, site scarcity, and the need to expand or replace critical hospital capacity as seismic compliance deadlines approach. These eligible projects are located on urban
infill sites within previously developed areas served by existing public infrastructure, including transportation, utilities, and public services. Accordingly, a targeted, geographically limited, and time-bound exemption from the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) for specified hospital construction projects in the Cities of Emeryville and Santa Clara is necessary to accelerate the delivery of essential health care infrastructure, preserve access to care, and prevent irreversible harm to the regional health care system.</html:p>
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<ns0:Num>SEC. 4.</ns0:Num>
<ns0:Content>
<html:p>
No reimbursement is required by this act pursuant to Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.
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