Senate approves AB 108, a one-time grant program to keep distressed hospitals open

The California State Senate on May 10 approved Assembly Bill 108, a budget trailer bill that establishes a one-time grant program at the Department of Healthcare Access and Information (HCAI) to aid nonprofit and public hospitals in immediate financial distress. Senator Laird, the bill’s floor author, asked colleagues for an "I" vote; the roll call returned Ayes 36, No 0, and immediate transmittal was granted.

Lawmakers said the program targets hospitals that are at acute risk of closure. "Eligible nonprofit or public hospitals must have less than 10 days cash on hand, exhausted other financial options, and have more than 50 of patients on public programs are uninsured," Senator Laird said, describing the bill’s eligibility criteria as a filter for facilities most at risk. Laird added: "The program will provide a critical lifeline," and said the funding is intended to keep struggling hospitals open and help them transition to longer-term solutions.

The measure also includes a technical fix to ensure seniors or disabled citizens who meet program eligibility are able to participate in the property tax postponement program in the current budget year, a change Laird said was necessary to align the bill with other budget actions. Senator Jones, who voiced support, said the bill is a stopgap and urged broader attention to the underlying systemic issues facing hospitals: "This body is gonna have to get serious about the underlying challenges for the hospitals that got us to this point and start solving those issues as well," he said.

Senate proceedings recorded the bill’s reported program description as a "one-time 25,000,000 grama program" at HCAI; because the transcript spelling and numeric formatting are unclear in places, the Senate’s enrolled bill and the Department of Finance materials should be consulted for the precise appropriation language. The sponsor said the Department of Finance helped craft the measure and staff hours on the proposal were acknowledged on the floor.

The Senate approved AB 108 and granted immediate transmittal to the Assembly, clearing the measure for the next step in the legislative process.