Existing law authorizes the Sonoma Valley Health Care District, Last Frontier Health Care District, and the Mayers Memorial Hospital District the authority to use the design-build procedure when contracting for the construction of a building or improvements directly related to a hospital or health facility building, as specified. Existing law sets forth the procurement process for design-build projects and requires specified information by submitted design-build entities and others to be verified under penalty of perjury.

This bill would additionally authorize any health care district to use the design-build process when contracting for the construction of a hospital or health facility building. Because the bill would expand the application of the procurement process to additional design-build entities, the bill would expand the crime of perjury, thereby imposing a state-mandated local program.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law authorizes the Sonoma Valley Health Care District, Last Frontier Health Care District, and the Mayers Memorial Hospital District the authority to use the design-build procedure when contracting for the construction of a building or improvements directly related to a hospital or health facility building, as specified. Existing law sets forth the procurement process for design-build projects and requires specified information by submitted design-build entities and others to be verified under penalty of perjury.

This bill would additionally authorize any health care district to use the design-build process when contracting for the construction of a hospital or health facility building. Because the bill would expand the application of the procurement process to additional design-build entities, the bill would expand the crime of perjury, thereby imposing a state-mandated local program.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law authorizes the Sonoma Valley Health Care District, Last Frontier Health Care District, and the Mayers Memorial Hospital District the authority to use the design-build procedure when contracting for the construction of a building or improvements directly related to a hospital or health facility building, as specified. Existing law sets forth the procurement process for design-build projects and requires specified information by submitted design-build entities and others to be verified under penalty of perjury.

This bill would additionally authorize any health care district to use the design-build process when contracting for the construction of a hospital or health facility building. Because the bill would expand the application of the procurement process to additional design-build entities, the bill would expand the crime of perjury, thereby imposing a state-mandated local program.

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.

This bill would provide that no reimbursement is required by this act for a specified reason.

SENATE COMMITTEE ON LOCAL GOVERNMENT

Senator María Elena Durazo, Chair

2025 - 2026 Regular

Health care districts: design-build process

Allows a health care district that owns or operates a hospital or clinic to use the design-build contracting method for the construction of or improvements to a hospital or health facility building.

Background

Contracting. The Local Agency Public Construction Act generally requires local agencies to invite bids for construction projects and award contracts to the lowest responsible bidder. Local agencies typically use the traditional design-bid-build method for constructing public works. This approach splits construction projects into two distinct phases: design and construction. During the design phase, the local agency prepares detailed project plans and specifications using its own employees or by hiring outside architects and engineers. Once project designs are complete, local agencies invite bids from the construction community and award the contract to the lowest responsible bidder. Over the last couple of decades, legislators have gradually expanded local agencies’ authority to procure construction projects using various alternatives to the design-bid-build project delivery method.

Healthcare Districts. Near the end of World War II, California faced a severe shortage of hospital beds. To respond to the inadequacy of acute care services in rural areas, the Legislature enacted the Local Hospital District Law to provide medically underserved areas without access to hospital facilities the ability to form special districts that could be a source of tax dollars for constructing and operating community hospitals. SB 1169 (Maddy, 1994) changed the name of the law to “The Local Healthcare District Law” to better reflect the shift in the provision of healthcare services outside hospital settings. The powers and duties granted to healthcare districts under existing law have remained largely unchanged while the demographics of areas the districts serve, as well as access to and provision of healthcare services, and the districts themselves have vastly changed. For example, following the change in law in 1994, 14 healthcare districts have filed for bankruptcy, and over one-third of the healthcare districts in California have either closed or sold their hospital, thus moving away from the original legislative intent of “hospital districts.”

State law allows healthcare districts to exercise various powers, including to lease or own property; build and operate healthcare facilities and services, including emergency services, free clinics, diagnostic and testing centers, health education programs, wellness and prevention programs, rehabilitation, and aftercare; to provide assistance to other entities to carry out those services; and to sell their assets.

A five-member board of directors manages each healthcare district. Each member must be a registered voter residing in the district and serves a four-year term, with the exception of the initial board. The board of supervisors of the county with the greatest share of land in the district appoints the initial board. Upon appointment, the board selects two members by lot to serve two-year terms with the remaining three serving four-year terms.

Most healthcare districts receive a share of local property taxes; some levy special parcel taxes, and some charge for services. Some healthcare districts generate revenues from district resources, such as property lease income; and some districts receive grants from public and private sources.

Seismic Safety Requirements. In 1972, the Legislature passed the Alquist Act (SB 519, Alquist), which required all new hospital construction to meet stringent seismic safety standards. The original Alquist Act did not apply to existing buildings, partly because of the expectation that older hospital buildings would be replaced with conforming buildings over time. However, by the time the 1994 Northridge earthquake occurred more than 20 years later, 80 percent of hospital beds were still in pre-1973 non-conforming buildings. The Northridge earthquake experience prompted the Legislature to update the Alquist Act (SB 1953, Alquist, 1994) to bring older hospital buildings into compliance with structural requirements. The bill set a 2008 compliance date, which was subsequently delayed through various bills over the years and became known as “2020 compliance.” SB 1953 also adopted additional requirements to ensure hospitals, by January 1, 2030, would not only remain standing, but would also remain operational following a major earthquake (referred to as “2030 compliance”). If a hospital does not comply with the 2030 requirements by January 1, 2024, it must post a public notice in the lobby or waiting area stating it is not 2030 compliant, and must start making annual reports to various entities including public agencies and labor organizations. If a hospital does not comply with the 2030 requirements by January 1, 2030, and it does not receive an extension, the California Department of Public Health could suspend its license to operate.

Design-build method. Under design-build, a public agency contracts with a single entity—which can be a single firm, a consortium, or a joint venture—to design and construct a project. Before inviting bids, the agency prepares documents that describe the basic concept of the project, as opposed to a complete set of drawings and specifications of what will be constructed. In the bidding phase, the agency typically evaluates bids on a best-value basis, incorporating technical factors, such as qualifications and design quality, in addition to price.

Until January 1, 2031, all counties and cities can use the design-build method to construct buildings and related improvements and other specified types of public works that cost more than $1 million (AB 400, Blanca Rubio, 2023). The Legislature also has authorized some special districts to construct projects using the design-build method, including three local health care districts: Sonoma Valley Health Care District, the Last Frontier Healthcare District, and Mayers Memorial Hospital District.

The Legislature expanded design-build authority to any health care districts that own or operate a hospital or clinic to use design-build and restricted the authority for the construction of a building and improvements directly related to a hospital or health facility building. (SB 957, Hueso, 2016). The authorization granted with SB 957 sunset on January 1, 2025, except for the three healthcare districts that have separate legislative authorization

The Association of California Healthcare Districts wants the Legislature to reinstate the prior law in order to continue using the authority.

Proposed Law

Assembly Bill 533 allows a health care district that owns and operates a hospital or clinic to use the design-build procedure to construct a building or improvements directly related to the construction of a hospital or health facility building, upon approval by its board of directors.

AB 533 provides that a health care district must use the design-build procedure that current law establishes for local agencies generally.

AB 533 also requires that a hospital building project using the design-build process authorized by the bill must be reviewed and inspected in accordance with the standards and requirements of the Alquist Act of 1983.

Comments

1. Purpose of the bill. According to the author, “Healthcare districts serve the most vulnerable and underserved throughout the state. This measure allow healthcare districts that own and operate a clinic or hospital to utilize design build for construction projects.”

2. Forget-me-nots. Healthcare districts lost their ability to use design-build on January 1 of this year, with the exception of the three healthcare districts that have separate legislative authorization. However, healthcare districts have other contracting authorities they could use, like design-bid-build or progressive design build. Unlike some other contracting methods, the design build approach provides a firm upfront cost, which is necessary for healthcare districts to secure funding for seismic projects from the California Department of Health Care Access and Information (HCAI) and other federal financing sources. According to the Association of California Healthcare Districts, the following healthcare districts have used, or are planning to use, design-build for the following projects:

• San Bernardino Mountains Community Hospital District completed construction of a hospital;
• Southern Mono Health Care District completed construction of Mammoth Hospital;
• Last Frontier Healthcare District/Modoc Medical Center completed construction of a hospital and skilled nursing facility;
• Salinas Memorial Heath Care District completed construction of a parking structure;
• Mayers Memorial Heath Care District completed construction of a hospital;
• Seneca Healthcare District is in construction for a hospital; and
• Tahoe Forest Health System, Plumas District Hospital, and Del Puerto Healthcare District have begun the contracting process for projects, but have paused it pending renewal of their design-build authority.

Without reinstating the authority, healthcare districts that own a hospital or a clinic may struggle to secure HCAI loans and risk missing the 2030 seismic compliance deadline.

3. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because AB 533 expands the definition of a crime, Legislative Counsel says that the bill imposes a new state mandate. But the bill disclaims the state’s responsibility for reimbursing local governments for enforcing these expanded crimes. That’s consistent with the California Constitution (Article XIIIB, 6[a][2]).

Assembly Actions

Assembly Local Government Committee: 8-0
Assembly Appropriations Committee: 14-0
Assembly Floor: 73-0

Support and Opposition

(6/13/2025)

Support: Association of California Healthcare Districts; the (Sponsor)
Antelope Valley Healthcare District
California Special Districts Association
Del Puerto Health Care District
Desert Healthcare District
Design Build Institute of America Western Pacific Chapter
District Hospital Leadership Forum
Fallbrook Regional Health District
Mayers Memorial Hospital District
Morongo Basin Healthcare District
Petaluma Healthcare District
Tulare Local Healthcare District

Opposition: None Submitted

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 533

Author:(Flora)

As Introduced Ver:February 11, 2025

Majority vote

SUMMARY

Allows health care districts that own or operate a hospital or clinic to use design-build contracting for the construction of a hospital or health facility buildings.

Major Provisions

1. Allows a health care district that owns or operates a hospital or clinic to use the design-build procedure to construct a building or improvements directly related to the construction of a hospital or health facility building, upon approval by its board of directors.
2. Provides that a health care district must use the design-build procedure that current law establishes for local agencies, as specified.
3. Requires a hospital building project using the design-build process authorized by this bill to be reviewed and inspected in accordance with the standards and requirements of the Alfred E. Alquist Hospital Facilities Seismic Safety Act (Hospital Seismic Safety Act) of 1983.

COMMENTS

1. Design-Build and Healthcare Districts. Health care districts are formed to "establish, maintain, and operate health care facilities," including, but not limited to, hospitals. Health care districts are governed by elected boards of directors. Health care districts throughout the state need to retrofit existing buildings or build new facilities in order to comply with the Hospital Seismic Safety Act. These districts are faced with escalating construction costs and are looking for the most cost-effective ways to meet seismic standards and provide well-designed and built state-of-the-art facilities to provide health care to the people of the state. One of these methods is design-build contracting.

Between 2008 and 2015, the Legislature authorized four health care districts to use design-build (Sonoma Valley Health Care District, the Last Frontier Health Care District, the Marin Healthcare District, and the Mayers Memorial Hospital District). This authority was restricted to the construction of a building and improvements directly related to a hospital or health facility building.

1. SB 957 of 2016. SB 957 (Hueso), Chapter 212, Statutes of 2016, expanded the authority for health care districts to use design-build to include all health care districts that own or operate a hospital or clinic. The authority was limited to the construction of a building or improvements directly related to the construction of a hospital or health facility building. The bill required districts to use the procedures outlined in SB 785 that apply to local agencies' authority to use design-build. A hospital building project using the design-build process authorized by SB 957 was required to be reviewed and inspected in accordance with the Hospital Seismic Safety Act. SB 957 contained a sunset date of January 1, 2025.

According to the sponsor of this measure, the Association of California Healthcare Districts, this sunset date in SB 957 inadvertently went into effect this year. They and other supporters of this bill are seeking to reinstate this prior law in order to continue using the authority. The sponsor reports that the following healthcare districts have used, or are planning to use, design-build for the following projects:

• 1. San Bernardino Mountains Community Hospital District – Hospital
  2. Southern Mono Health Care District – Mammoth Hospital
  3. Last Frontier Healthcare District/Modoc Medical Center – Hospital and Skilled Nursing Facility
  4. Plumas Healthcare District – Skilled Nursing Center
  5. Salinas Memorial Heath Care District – Parking Structure
  6. Mayers Memorial Heath Care District – Hospital
  7. Seneca Healthcare District – Hospital

According to the Author

Healthcare districts serve the most vulnerable and underserved throughout the state. This measure allows healthcare districts that own and operate a clinic or hospital to utilize design build for construction projects.

Arguments in Support

The Association of California Healthcare Districts, sponsor of this measure, writes, "In 2016, the legislature granted healthcare district that own clinics and hospitals the ability to utilize the design and construction process known as design build. Unfortunately, the authority sunset January 1, 2025. This leaves district hospitals and clinics that require this authority to leverage financing without the ability to do so. Specifically, AB 533 would explicitly allow a qualifying healthcare districts to use the design-build process for hospital and health facility construction projects.

"The design-build process allows a single entity to be responsible for both the design and construction phases of a project, streamlining the process and reducing costs. Hospitals and clinics operated by healthcare districts utilize USDA or other federal financing mechanisms. In order to secure this financing, the district requires a firm number on cost up-front, a feature of design-build that distinguishes it from its other public contracting and construction counter parts. In addition, the design build method requires that the cost be maintained through the process, ensuring that our public projects come in at budget. AB 533 is critically important to ensure that healthcare districts can continue to meet their state mandates and build and maintain quality health care infrastructure for the communities they serve."

Arguments in Opposition

None on file

FISCAL COMMENTS

Negligible state costs. Potential cost savings to local health care districts.

VOTES

ASM LOCAL GOVERNMENT: 8-0-2

YES: Carrillo, Hoover, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward

ABS, ABST OR NV: Ta, Wilson

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Sanchez, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Hadwick, Hart, Pacheco, Solache, Ta

ABS, ABST OR NV: Pellerin

UPDATED

VERSION: February 11, 2025

CONSULTANT: Angela Mapp / L. GOV. / (916) 319-3958 FN: 0000235

Date of Hearing: April 9, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 533

Author:(Flora) – As Introduced Ver:February 11, 2025

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill reinstates prior law allowing a health care district to use the design-build process when contracting for the construction of a hospital or health facility building. Unlike prior law, this bill does not contain a sunset date, thus making this authorization permanent.

Specifically, this bill:

1. Allows a health care district that owns or operates a hospital or clinic to use the design-build procedure to construct a building or improvements directly related to the construction of a hospital or health facility building.
2. Requires a health care district using the design-build process authorized by this bill to use the design-build procedure established in existing law for local agencies, as specified.
3. Requires a hospital building project using the design-build process authorized by this bill to meet the standards and requirements of the Alfred E. Alquist Hospital Facilities Seismic Safety Act (Hospital Seismic Safety Act) of 1983.

FISCAL EFFECT:

Negligible state costs. Potential cost savings to local health care districts.

COMMENTS:

1. Purpose. This bill reinstates the provisions of SB 957 (Hueso), Chapter 212, Statutes of 2016, which sunset on January 1, 2025. According to the Association of California Healthcare Districts, sponsor of the bill, the provisions of SB 957 were inadvertently allowed to sunset this year. The sponsor and other supporters are seeking to reinstate this law so they may continue to use the design-build contracting method.
2. Background.

Design-Build Contracting Method. Existing law generally requires local officials use the design-bid-build method for public works construction. Under this method, local officials solicit bids for construction projects and then award contracts to the lowest responsible bidder. Under the design-build method, a single contract covers the design and construction of a project with a single company or consortium that acts as both the project designer and builder. The design-build entity arranges all architectural, engineering, and construction services, and is responsible for delivering the project at a guaranteed price and schedule based upon performance criteria set by the public agency.

Design-Build in Health Care Districts. Health care districts establish, maintain, and operate health care facilities, including, but not limited to, hospitals. Between 2008 and 2015, the Legislature authorized four health care districts to use the design-build contracting method, including Sonoma Valley Health Care District, the Last Frontier Health Care District, the Marin Healthcare District, and the Mayers Memorial Hospital District. The authority was restricted to the construction of a building and improvements directly related to a hospital or health facility building.

SB 957 (Hueso), Chapter 212, Statutes of 2016, expanded the authority for health care districts to use design-build to include any health care district that owns or operates a hospital or clinic. SB 957, consistent with the limitations and requirements of the prior authorizations, was limited to the construction of a building or improvements directly related to a hospital or health facility building, required health care districts to use existing-law procedures local agencies must follow when using design-build, and required a hospital building project using design-build to be reviewed and inspected in accordance with the Hospital Seismic Safety Act. SB 957 contained a sunset date of January 1, 2025.

This bill reinstates the recently-expired law and removes the sunset date, making the authority permanent.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: March 26, 2025

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Juan Carrillo, Chair

ABPCA Bill Id:AB 533 (

Author:Flora) – As Introduced Ver:February 11, 2025

SUBJECT: Health care districts: design-build process.

SUMMARY: Allows health care districts that own or operate a hospital or clinic to use design-build contracting for the construction of a hospital or health facility buildings. Specifically, this bill:

1. Allows a health care district that owns or operates a hospital or clinic to use the design-build procedure to construct a building or improvements directly related to the construction of a hospital or health facility building, upon approval by its board of directors.
2. Provides that a health care district must use the design-build procedure that current law establishes for local agencies, as specified.
3. Requires a hospital building project using the design-build process authorized by this bill to be reviewed and inspected in accordance with the standards and requirements of the Alfred E. Alquist Hospital Facilities Seismic Safety Act (Hospital Seismic Safety Act) of 1983.
4. Provides that no reimbursement is required by this bill because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, or changes the definition of a crime, as specified.

EXISTING LAW:

1. Requires, pursuant to the Local Agency Public Construction Act (LAPC Act), local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder under the traditional design-bid-build project delivery system. [Public Contract Code (PCC) §§ 20100 – 20929]
2. Authorizes, until January 1, 2031, cities, counties, and specified special districts and transit agencies to use design-build for their public works contracts in excess of $1 million using either a low bid or best value process. (PCC §§ 20100 – 22199)
3. Provides for local health care districts, which govern certain health care facilities. Health care districts have specific powers and duties respecting the creation, administration, and maintenance of the districts, including the authority to purchase, receive, take, hold, lease, use, and enjoy property of every kind and description of property within and without the limits of the district. [Health and Safety Code (HSC) §§ 32000 – 32499.95]
4. Establishes, pursuant to the Hospital Seismic Safety Act, timelines for hospital compliance with seismic safety standards. (HSC §§129675 – 130070)
5. Authorizes the Sonoma Valley Health Care District, the Last Frontier Health Care District, and the Mayers Memorial Hospital District to use design-build for the construction of a building or improvements directly related to construction of a hospital or health facility. HSC §§ 32132.5, 32132.7, and 32132.8)

FISCAL EFFECT: This bill is keyed fiscal and contains a state-mandated local program.

COMMENTS:

1. Background. The LAPC Act generally requires local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder. This design-bid-build method is the traditional approach to public works construction.

Under the design-build method, a single contract covers the design and construction of a project with a single company or consortium that acts as both the project designer and builder. The design-build entity arranges all architectural, engineering, and construction services, and is responsible for delivering the project at a guaranteed price and schedule based upon performance criteria set by the public agency. The design-build method can be set by the public agency. The design-build method can be faster and, therefore, cheaper, than the design-bid-build method, but it requires a higher level of management sophistication since design and construction may occur simultaneously.

Advocates for the design-build method of contracting for public works contend that project schedule savings can be realized because only a single request for proposals is needed to select the project's designer and builder. The more traditional design-bid-build project approach requires the separate selection of the design consultant or contractor, completion of design, and then advertising for bids and selection of the construction contractor. Proponents add that design-build allows the overlap of design and construction activities, resulting in additional time savings and lower project costs. By avoiding the delays and change orders that result from the traditional design-bid-build method of contracting, proponents argue that design-build can deliver public works faster and cheaper.

Detractors of design-build contend that it eliminates competitive bidding, allows the private contractor or consortium to inspect and sign off on their own work, and increases project delivery costs.

1. Design-Build in California Law. California’s Legislature began granting design-build authority in the early 1990’s, and has typically done so with specified parameters, such as the duration of the authority, the types of agencies allowed to use it, the types of projects for which it can be used, cost thresholds, and specified procedures that must be followed in preparing and awarding contracts. Over the years, this resulted in a number of statutes in a variety of code sections, which created confusion for public agencies and contractors alike.

In an effort to consolidate these statutes, SB 785 (Wolk), Chapter 931, Statutes of 2014, repealed existing law authorizing the Department of General Services (DGS), the Department of Corrections and Rehabilitation (CDCR), and local agencies to use the design-build procurement process, and enacted uniform provisions authorizing DGS, CDCR, and specified local agencies to utilize the design-build procurement process for specified public works projects (with some exceptions). SB 785 created one set of codes for DGS and CDCR, and a separate set for specified local agencies, but with similar parameters.

Since SB 785 was enacted, the Legislature has authorized numerous additional local agencies or types of local agencies to use SB 785 design-build authority for additional projects or types of projects.

1. Design-Build and Healthcare Districts. Health care districts are formed to “establish, maintain, and operate health care facilities,” including, but not limited to, hospitals. Health care districts are governed by elected boards of directors. Health care districts throughout the state need to retrofit existing buildings or build new facilities in order to comply with the Hospital Seismic Safety Act. These districts are faced with escalating construction costs and are looking for the most cost-effective ways to meet seismic standards and provide well-designed and built state-of-the-art facilities to provide health care to the people of the state. One of these methods is design-build contracting.

Between 2008 and 2015, the Legislature authorized four health care districts to use design-build (Sonoma Valley Health Care District, the Last Frontier Health Care District, the Marin Healthcare District, and the Mayers Memorial Hospital District). This authority was restricted to the construction of a building and improvements directly related to a hospital or health facility building.

1. SB 957 of 2016. SB 957 (Hueso), Chapter 212, Statutes of 2016, expanded the authority for health care districts to use design-build to include all health care districts that own or operate a hospital or clinic. The authority was limited to the construction of a building or improvements directly related to the construction of a hospital or health facility building. The bill required districts to use the procedures outlined in SB 785 that apply to local agencies' authority to use design-build. A hospital building project using the design-build process authorized by SB 957 was required to be reviewed and inspected in accordance with the Hospital Seismic Safety Act. SB 957 contained a sunset date of January 1, 2025.

According to the sponsor of this measure, the Association of California Healthcare Districts, this sunset date in SB 957 inadvertently went into effect this year. They and other supporters of this bill are seeking to reinstate this prior law in order to continue using the authority. The sponsor reports that the following healthcare districts have used, or are planning to use, design-build for the following projects:

• 1. San Bernardino Mountains Community Hospital District – Hospital
  2. Southern Mono Health Care District – Mammoth Hospital
  3. Last Frontier Healthcare District/Modoc Medical Center – Hospital and Skilled Nursing Facility
  4. Plumas Healthcare District – Skilled Nursing Center
  5. Salinas Memorial Heath Care District – Parking Structure
  6. Mayers Memorial Heath Care District – Hospital
  7. Seneca Healthcare District – Hospital

1. Bill Summary and Author's Statement. This bill re-instates the provisions of SB 957 that inadvertently sunset this year. This bill is sponsored by the Association of California Healthcare Districts.

According to the author, “Healthcare districts serve the most vulnerable and underserved throughout the state. This measure allows healthcare districts that own and operate a clinic or hospital to utilize design build for construction projects.”

1. Previous Legislation. SB 957 (Hueso), Chapter 212, Statutes of 2016, was nearly identical to this bill, with the exception of its sunset date of January 1, 2025.

AB 1290 (Dahle), Chapter 34, Statutes of 2015, allowed the Mayers Memorial Hospital District to use the design-build contracting method for the construction of a building or improvements directly related to construction of a hospital or health facility building at the District.

SB 268 (Gaines), Chapter 18, Statutes of 2014, allowed the Last Frontier Health Care District to use the design-build process when contracting for the construction of a building and improvements directly related to a hospital or health facility building at the Modoc Medical Center.

SB 785 (Wolk), Chapter 931, Statutes of 2014, enacted uniform provisions authorizing DGS, CDCR, and most local agencies to utilize the design-build procurement process for specified public works projects.

SB 1005 (Cox) of 2010 would have authorized the Tahoe Forest Health Care District and a health care district authorized by the Office of Statewide Health Planning and Development to use a design-build procedure when assigning contracts for the construction of a hospital or health facility building. SB 1005 was held in the Assembly Appropriations Committee.

SB 1699 (Wiggins), Chapter 415, Statutes of 2008, authorized the use of design-build for the Sonoma Valley Health Care District.

1. Arguments in Support. The Association of California Healthcare Districts, sponsor of this measure, writes, “In 2016, the legislature granted healthcare district that own clinics and hospitals the ability to utilize the design and construction process known as design build. Unfortunately, the authority sunset January 1, 2025. This leaves district hospitals and clinics that require this authority to leverage financing without the ability to do so. Specifically, AB 533 would explicitly allow a qualifying healthcare districts to use the design-build process for hospital and health facility construction projects.

“The design-build process allows a single entity to be responsible for both the design and construction phases of a project, streamlining the process and reducing costs. Hospitals and clinics operated by healthcare districts utilize USDA or other federal financing mechanisms. In order to secure this financing, the district requires a firm number on cost up-front, a feature of design-build that distinguishes it from its other public contracting and construction counter parts. In addition, the design build method requires that the cost be maintained through the process, ensuring that our public projects come in at budget.

“AB 533 is critically important to ensure that healthcare districts can continue to meet their state mandates and build and maintain quality health care infrastructure for the communities they serve. For these reasons, ACHD strongly supports this bill and respectfully requests your ‘AYE’ vote.”

1. Arguments in Opposition. None on file.

REGISTERED SUPPORT / OPPOSITION:

Support

Association of California Healthcare Districts [SPONSOR]

Antelope Valley Healthcare District

California Special Districts Association

Del Puerto Health Care District

Desert Healthcare District

District Hospital Leadership Forum

Fallbrook Regional Health District

Mayers Memorial Healthcare District

Morongo Basin Healthcare District

Petaluma Healthcare District

Tulare Local Healthcare District

Opposition

None on file

Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958