Bill Text: HI HB1145 | 2016 | Regular Session | Introduced
Bill Title: Hawaii Health Systems Corporation
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2015-12-17 - Carried over to 2016 Regular Session. [HB1145 Detail]
Download: Hawaii-2016-HB1145-Introduced.html
HOUSE OF REPRESENTATIVES |
H.B. NO. |
1145 |
TWENTY-EIGHTH LEGISLATURE, 2015 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the Hawaii health systems corporation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the State's community hospital system, the Hawaii health systems corporation, provides essential hospital and long-term care services, in addition to physician and other health care services throughout the State. Hawaii health systems corporation facilities are often the only hospitals and emergency care providers in many rural communities. Due to rapid changes taking place in the health care industry, the legislature acknowledges that the governing structure of our public hospital system must provide the appropriate flexibility and autonomy needed to compete and remain viable and to respond to the needs of the specific communities served, by furthering the development of centers of excellence in health care.
The current administrative arrangement places the public hospital system in a single statewide public agency, the Hawaii health systems corporation, which operates with some autonomy from the executive branch. This arrangement is the result of landmark legislation, Act 262, Session Laws of Hawaii 1996 (Act 262), after years of study. Act 262 was largely the result of the work of a task force established pursuant to Act 266, Session Laws of Hawaii 1994, charged with studying the establishment of an agency for community hospitals, then a division of the department of health. On December 20, 1994, the task force issued its report to the governor and the legislature entitled "The Preliminary Report of the Governor's Task Force on the Establishment of an Agency for Community Hospitals." Many of the recommendations of the task force were adopted by the legislature, resulting in passage of Act 262, and the creation of the Hawaii health systems corporation in 1996.
One significant recommendation of the task force included the establishment of regional system boards of directors, along with the system-wide board. This was accomplished in Act 290, Session Laws of Hawaii 2007, where the legislature established a two-tiered board system, giving the regional boards custodial control over the operations, facilities, and personnel, to be exercised within corporate policy.
In Act 182, Session Laws of Hawaii 2009 (Act 182), the legislature determined that it was in the State's best interest to limit the authority of the corporation by prohibiting the corporation from granting mortgages on corporation real property in order to secure loans and revenue bonds. However, the legislature finds that the economic downturn, coupled with the inability to leverage its biggest asset of real property by pledging it as collateral, has hindered the ability of the system to obtain outside financing and refinance loans for more favorable terms.
In addition, Act 182 put a dollar cap on the facilities' authority to enter into municipal leases. The language of the Act is ambiguous because it is not clear if the aggregate limit is on the entire corporation as a whole or on each individual region. Again, this restriction hinders the ability of the system to obtain outside financing.
The purpose of this Act is to advance the State's commitment to provide quality health care for the people of Hawaii, by:
(1) Lifting the prohibition on mortgages of Hawaii health systems corporation real property, in order to give the corporation the ability to fully utilize its real property assets for the benefit of the community; and
(2) Clarifying that the $25,000,000 limit on municipal leases is per region, annually.
SECTION 2. Section 323F-7, Hawaii Revised Statutes, is amended by amending subsections (c) and (d) to read as follows:
"(c) Notwithstanding any other law to the contrary, the corporation and any of the regional system boards shall exercise the following duties and powers:
(1) Developing corporation-wide policies, procedures, and rules necessary or appropriate to plan, operate, manage, and control the system of public health facilities and services without regard to chapter 91; provided that each regional system board shall be responsible for its own policies, procedures, and rules necessary or appropriate to plan, operate, manage, and control the public health facilities within its own regional system consistent with corporation policies;
(2) Evaluating the need for additional health facilities and services; provided that each regional system board shall be responsible for the evaluation within its own regional system;
(3) Entering into and performing any contracts, leases, cooperative agreements, partnerships, or other transactions whatsoever that may be necessary or appropriate in the performance of its purposes and responsibilities, and on terms the corporation, or regional system boards, may deem appropriate, with either:
(A) Any agency or instrumentality of the United States, or with any state, territory, or possession, or with any subdivision thereof; or
(B) Any person, firm, association, partnership, or corporation, whether operated on a for-profit or not-for-profit basis;
provided that the transaction furthers the public
interest; and provided further that if any dispute arises between any contract,
lease, cooperative agreement, partnership, or other transaction entered into by
the corporation and a regional system board with regard to matters solely
within that regional system, after July 1, 2007, the contract, lease,
cooperative agreement, partnership, or other transaction entered into by the
regional system board shall prevail; and provided further that [such] the
agreements are consistent with corporation policies;
(4) Conducting activities and entering into business
relationships as the corporation board, or any regional system board, deems
necessary or appropriate, including [but not limited to]:
(A) Creating
nonprofit corporations, including [but not limited to] charitable
fund-raising foundations, to be controlled wholly by the corporation, any regional
system board, or jointly with others;
(B) Establishing, subscribing to, and owning stock in business corporations individually or jointly with others; and
(C) Entering into partnerships and other joint venture arrangements, or participating in alliances, purchasing consortia, health insurance pools, or other cooperative arrangements, with any public or private entity; provided that any corporation, venture, or relationship entered into under this section furthers the public interest; provided further that this paragraph shall not be construed to authorize the corporation or a regional system board to abrogate any responsibility or obligation under paragraph (15);
provided that each regional system board shall be responsible for conducting the activities under this paragraph in its own regional system consistent with policies established by the corporation board;
(5) Participating in and developing prepaid health care service and insurance programs and other alternative health care delivery programs, including programs involving the acceptance of capitated payments or premiums that include the assumption of financial and actuarial risk; provided that each regional system board shall be responsible for conducting the activities under this paragraph in its own regional system consistent with policies established by the corporation board;
(6) Executing, in accordance with all applicable bylaws, rules, and laws, all instruments necessary or appropriate in the exercise of any powers of the corporation or regional system boards;
(7) Preparing and executing all corporation-wide budgets, policies, and procedures or any regional system budgets, policies, and procedures; provided that the regional system boards shall submit their regional and facility budgets to the corporation to be consolidated into a corporation-wide budget for purposes of corporation-wide planning and appropriation requests. Regional system and facility budgets shall be received by the corporation and shall be included in the corporation-wide budget upon submittal to the corporation;
(8) Setting rates and charges for all services provided by the corporation without regard to chapter 91; provided that the duty and power of the corporation board shall be limited to approving the rates and charges developed by the regional system boards for the regional system's facilities and services. Rates and charges may vary among regional systems and facilities and may be consolidated with the rates of other regional systems into one charge master. Third-party payer contracts may be negotiated at the corporation-wide level with input from the regional systems, taking into consideration the rates set by the regional system boards. For purposes of securing revenue bonds, the corporation or regional system board may covenant to set, and if necessary increase, rates and charges as needed to pay debt service and related obligations plus a coverage factor;
(9) Developing a corporation-wide hospital system that is subject to chapters 76 and 89; provided that employment of regional system and facility personnel shall be the responsibility of the regional system boards pursuant to corporation-wide policies and procedures, applicable laws, rules, regulations, and collective bargaining agreements;
(10) Developing the corporation's corporation-wide capital and strategic plans or any regional system board's capital and strategic plans; provided that each regional system board shall be responsible for development of capital and strategic plans in its own regional system that shall be consistent with, and incorporated into, the overall corporation-wide plans; and provided further that the corporation and each regional system board shall be entitled to undertake the acquisition, construction, and improvement of property, facilities, and equipment to carry out these capital and strategic plans;
(11) Suing and being sued; provided that only the corporation may sue or be sued; and provided further that the corporation and regional system boards shall enjoy the same sovereign immunity available to the State;
(12) Making and altering corporation board and regional system board bylaws for its organization and management without regard to chapter 91 and consistent with this chapter; provided that each regional system board shall be responsible for the final approval of its regional system board bylaws;
(13) Adopting rules without regard to chapter 91 governing the exercise of the corporation's or regional system boards' powers and the fulfillment of its purpose under this chapter;
(14) Entering into any contract or agreement whatsoever, not inconsistent with this chapter or the laws of this State, and authorizing the corporation, regional system boards, and chief executive officers to enter into all contracts, execute all instruments, and do all things necessary or appropriate in the exercise of the powers granted in this chapter, including securing the payment of bonds; provided that the corporation board shall delegate to a regional system board its authority to enter into and execute contracts or agreements relating to matters exclusively affecting that regional system; provided further that a regional system board shall exercise this power consistent with corporation-wide policies; and provided further that contracts or agreements executed by a regional system board shall encumber only the regional subaccounts of that regional system board;
(15) Issuing revenue bonds up to $100,000,000 subject to the approval of the governor or the director of finance; provided that:
(A) All revenue bonds shall be issued pursuant to part III, chapter 39;
(B) The corporation and any regional system board shall have the power to issue revenue bonds in any amount without regard to any limitation in chapter 39; and
(C) The corporation shall have the power to incur debt, including the issuance of revenue bonds in any amount, and the regional system boards shall have the power to issue revenue bonds in any amount upon approval by the corporation board;
(16) Reimbursing the state general fund for debt service on general obligation bonds or reimbursable general obligation bonds issued by the State for the purposes of the corporation or any regional system board;
(17) Pledging or
assigning all or any part of the receipts, revenues, and other financial assets
of the corporation or the regional system boards for purposes of meeting or
securing bond or health systems liabilities; provided that each regional system
board shall be responsible for conducting the activities under this paragraph
in its own regional system. Any pledge or assignment by the corporation or any
regional system board to secure revenue bonds or health system liabilities
shall be valid and binding in accordance with its terms against the pledgor,
creditors, and all others asserting rights thereto from the time the pledge or
assignment is made, without the need of physical delivery, recordation, filing,
or further act. The corporation shall not take or omit to take any act that
would interfere with, impair, or adversely affect any pledge or assignment by a
regional system board pursuant to this chapter. In connection with issuing
revenue bonds or related obligations, consistent with corporation policies and
procedures, any regional system board may make [such] other covenants,
binding on the regional system board and the corporation, that the regional
system board determines to be necessary or appropriate to establish and
maintain security for the revenue bonds or related obligations;
(18) Owning, purchasing, leasing, exchanging, or otherwise acquiring property, whether real, personal, or mixed, tangible or intangible, and of any interest therein, in the name of the corporation, which property is not owned or controlled by the State but is owned or controlled by the corporation; provided that:
(A) Regional system boards shall have custodial control over facilities and physical assets in their respective regional systems. A regional system board may own, purchase, lease, exchange, or otherwise acquire property, whether real, personal, or mixed, tangible or intangible, and of any interest therein, other than property owned or controlled by the corporation, in the name of the regional system board; provided further that a regional system board shall be subject to section 323F-3.5; and
(B) Each regional system board shall be responsible for conducting the activities under this paragraph in its own regional system;
(19) Maintaining,
improving, pledging, mortgaging, selling, or otherwise holding or disposing of
property, whether real, personal, or mixed, tangible or intangible, and of any
interest therein, at any time and manner, in furtherance of the purposes and
mission of the corporation or any regional system board; provided that the
corporation or any regional system board legally holds or controls the property
in its own name; provided further that other than to secure revenue bonds and
related obligations and agents, and to transition into a new entity, the corporation or any regional system board shall not
sell, assign, lease, hypothecate, mortgage, pledge, give, or dispose of all or
substantially all of its property; and provided further that each regional
system board shall be responsible for conducting the activities under this
paragraph in its own regional system, and control over [such] the
property shall be delegated to each regional system board; [provided further
that this paragraph shall not be construed to authorize the sale, pledge, or
mortgage of real property under the control of the corporation or a regional
system board;]
(20) Purchasing
insurance and creating captive insurers in any arrangement deemed in the best
interest of the corporation, including [but not limited to] funding and
payment of deductibles and purchase of reinsurance; provided that only the
corporation shall have the power to create captive insurers to benefit public
health facilities and operations in all regional systems; and provided further
that a regional system board may purchase insurance for its regional system in
collaboration with the other regional systems and the corporation until captive
coverage is provided by the corporation;
(21) Acquiring by condemnation, pursuant to chapter 101, any real property required by the corporation to carry out the powers granted by this chapter;
(22) Depositing any moneys of the corporation or any regional system board in any banking institution within or without the State, and appointing, for the purpose of making deposits, one or more persons to act as custodians of the moneys of the corporation or any regional system board; provided that regional system boards may deposit moneys in banking institutions pursuant to corporation-wide guidelines established by the corporation board;
(23) Contracting for and accepting any gifts, grants, and loans of funds, property, or any other aid in any form from the federal government, the State, any state agency, or any other source, or any combination thereof, and complying, subject to this chapter, with the terms and conditions thereof; provided that the regional system boards shall be responsible for contracting for and accepting any gifts, grants, loans, property, or other aid if intended to benefit the public health facilities and operations exclusively in their respective regional systems; and provided further that all contracting for or acceptance of gifts, grants, loans, property, or other aid shall be consistent with corporation-wide policies established by the corporation board;
(24) Providing health and medical services for the public directly or by agreement or lease with any person, firm, or private or public corporation, partnership, or association through or in the health facilities of the corporation or regional system boards or otherwise; provided that the regional system boards shall be responsible for conducting the activities under this paragraph in their respective regional systems;
(25) Approving medical
staff bylaws, rules, and medical staff appointments and reappointments for all
public health facilities of the corporation or any regional system board,
including [but not limited to] determining the conditions under which a
health professional may be extended the privilege of practicing within a health
facility, as determined by the respective regional system board and consistent
with corporation-wide policies, and adopting and implementing reasonable rules,
without regard to chapter 91, for the credentialing and peer review of all
persons and health professionals within the facility; provided that regional
system boards shall be the governing body responsible for all medical staff
organization, peer review, and credentialing activities to the extent allowed
by law;
(26) (A) Investing any funds not required for immediate disbursement in property or in securities that meet the standard for investments established in chapter 88 as provided by the corporation board or any regional system board; provided that proceeds of bonds and moneys pledged to secure bonds may be invested in obligations permitted by any document that authorizes the issuance or securing of bonds; and provided further that the investment assists the corporation or any regional system board in carrying out its public purposes; selling from time to time securities thus purchased and held, and depositing any securities in any bank or financial institution within or without the State. Any funds deposited in a banking institution or in any depository authorized in this section shall be secured in a manner and subject to terms and conditions as the corporation board or a regional system board may determine, with or without payment of any interest on the deposit, including without limitation time deposits evidenced by certificates of deposit. Any bank or financial institution incorporated under the laws of this State may act as depository of any funds of the corporation or a regional system board and may issue indemnity bonds or may pledge securities as may be required by the corporation or regional system board; provided that regional system boards may exercise the powers under this subsection with respect to financial assets of the regional system consistent with corporation-wide policies; and
(B) Notwithstanding
subparagraph (A), contracting with the holders of any of its notes or bonds as
to the custody, collection, securing, investment, and payment of any moneys of
the corporation or regional system board and of any moneys held in trust or
otherwise for the payment of notes or bonds and carrying out the contract.
Moneys held in trust or otherwise for the payment of notes or bonds or in any
way to secure notes or bonds, and deposits of [such] the moneys,
may be secured in the same manner as moneys of the corporation or regional
system board, and all banks and trust companies are authorized to give security
for the deposits;
(27) Entering into any
agreement with the State, including [but not limited to] contracts for
the provision of goods, services, and facilities in support of the corporation's
programs or the regional system boards' programs, and contracting for the
provision of services to or on behalf of the State; provided that the regional
system boards shall be responsible for entering into agreements to provide
goods, services, and facilities in support of programs in their respective
regional systems consistent with corporation-wide policies;
(28) Having a seal and altering the same at pleasure;
(29) Waiving, by means that the corporation or regional system board deems appropriate, the exemption from federal income taxation of interest on the corporation's or regional system boards' bonds, notes, or other obligations provided by the Internal Revenue Code of 1986, as amended, or any other federal statute providing a similar exemption;
(30) Developing internal policies and procedures for the procurement of goods and services, consistent with the goals of public accountability and public procurement practices, and subject to management and financial legislative audits; provided that the regional system boards shall be responsible for developing internal policies and procedures for each of their regional systems consistent with the corporation's policies and procedures; and further provided that:
(A) The regional system boards and the corporation board shall enjoy the exemption under section 103-53(e);
(B) The regional system boards shall enjoy the exemption under chapter 103D; and
(C) The corporation shall be subject to chapter 103D;
(31) Authorizing and establishing positions; provided that regional system boards shall be responsible for hiring and firing regional and facility personnel consistent with corporation policies, except a regional chief executive officer shall only be hired or dismissed upon the approval of the regional system board as further set forth in section 323F-8.5;
(32) Having and exercising all rights and powers necessary or incidental to or implied from the specific powers granted in this chapter, which specific powers shall not be considered as a limitation upon any power necessary or appropriate to carry out the purposes and intent of this chapter; provided that the regional system boards shall be responsible for having and exercising all powers and rights with respect to matters in their regional systems consistent with the law; and
(33) Each regional system, through its regional system board, shall:
(A) Develop policies and procedures necessary or appropriate to plan, operate, manage, and control the day-to-day operations of facilities within the regional system that are consistent with corporation-wide policies;
(B) Exercise custodial control over and use of all assets of the corporation that are located in the regional system pursuant to this chapter; and
(C) Expend funds within its approved regional system budget and expend additional funds in excess of its approved regional system budget upon approval of the corporation board.
(d) Each
regional system board shall not be subject to chapters 36 to 38, 40, 41D, and
103D as well as part I of chapter 92 and shall enjoy the exemptions contained
in sections 102-2 and 103-53(e), except as otherwise provided in this chapter.
The corporation shall not be subject to chapters 36 to 38, 40, and 41D, as well
as part I of chapter 92, and shall enjoy the exemptions contained in sections
102-2 and 103-53(e); provided that the exemption provided under this
subsection to chapter 37D shall only apply to financing agreements of
$5,000,000 or less; provided further that the aggregate value of financing
agreements per fiscal year shall not exceed $25,000,000[.] per
region."
SECTION 3. All acts passed prior to or during the regular session of 2015, whether enacted before or after passage of this Act, shall be amended to conform to this Act unless such acts specifically provide that this Act is being amended. Insofar as this Act is inconsistent with any other law, this Act shall control.
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval.
INTRODUCED BY: |
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Report Title:
Hawaii Health Systems Corporation
Description:
Authorizes the Hawaii Health Systems Corporation to mortgage its real property and clarifies the dollar cap on municipal leasing authority.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.