Gov. Edmund G. Brown Jr. is expected Sunday to propose legislation to create a commission that would attempt to control California's skyrocketing hospital costs.

The measure is being called by several sources an attempt to "out Carter" President Carter's proposal on hospital costs, which was sent to Congress on April 25.

The Presidents proposal would tie hospital charges to the cost of living with an allowable increase over the cost of living figures. Thus, the increase for such costs in a given year would be almost 9 per cent if the inflation rate stayed at 6 per cent.

Brown and Democratic Assemblyman Barry Keene, chairman of the State Assembly Health Committee are expected to hold a joint press conference Sunday morning to announce their legislation worked out over the last month by top health staffers in the Brown administration and the legislature.

Currently, three states, Connecticut, Massachusetts and Maryland, have mechanisms for controlling hospital costs. But, Keene said if his bill is passed, it would create the most sophisticated such body in the nation.

The legislation would set up a five member California Health Facilities Commission that would have rate-setting authority in a phased fashion, first applying to acute care hospitals, then to special hospitals and nursing homes, and finally to other health care providers.

The commission also would have final authority over hospital purchases of expensive equipment and construction or expansion of facilities.

The bill would set stiff penalties for violators, including up to $10,000 a day for violations of the commission's ruling and $1,000 a day for overcharging on rate structures that would be set up.

Hospital costs have been going up 15 per cent a year nationally.

In 1973, California hospital costs were about $3 billion. Just three years later, Californians paid $4.5 billion for hospital care, an increase of 50 per cent. Acute hospital care takes about 40 per cent of the total health dollar.

Experts have cited as one of the major reasons for soaring rates the fact that there are too many hospital beds. So far, regulatory commissions set up by the state of California have been unable to stop hospitals from continuing to build.

Passage of the Brown measure is expected to be very difficult. It is expected to be opposed by the California Hospital Association and the California Medical Association, which has been a potent force in California politics for decades.

Nonetheless, Keene and others feel Brown's backing gives the bill more than a fighting chance.

Longtime political observers point out that the timing of the Brown move will do nothing to allay suspicions in the Carter administration that Gov. Brown is out to upstage the President whenever he can.

"You have to remember the national arena of competition," said one. "If Carter falters, Brown is around as the frontrunner."

Top Carter aides, particularly Hamilton Jordan and Tim Kraft, are said to view Brown with hostility and see him as potentially the biggest threat to Carter in the Democratic Party.

Said one California Democrat who requested anonymity.

"Carter has never said that to me per se, but everybody else in Georgetown has."

"If you add this to Brown's sudden spate of foreign visits, you got to believe he's looking beyond 1978 and not necessarily to a third term as governor" the Democrat said. "Somebody told me a while back that Jerry is capable of being a Democratic Ronald Reagan. They are just convinced he's going to run."