REPORT TITLE:
Health Care Community


DESCRIPTION:
Authorizes the housing and community development corporation of
Hawaii to work in partnership with private sector entities to
develop health care communities in the State.  Establishes a
health care community revolving fund to make loans to businesses
for the construction of the health care community. (HB1620 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1620
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO HEALTH CARE COMMUNITIES.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that in the twenty-first
 
 2 century, health care providers can no longer focus only on
 
 3 helping sick and injured people get better.  In Hawaii, there is
 
 4 a mounting and unanswered problem of providing health care for
 
 5 seniors.  The emphasis must be on creating health care
 
 6 communities where wellness and prevention go hand in hand with
 
 7 diagnosis and treatment.  In health care communities, people will
 
 8 be empowered to make healthy choices by having information,
 
 9 facilities, and opportunities provided by a state-of-the-art
 
10 health care network that is integrated within the community.
 
11      One example of developing healthy communities is to place
 
12 health care providers in a medical mall setting within the
 
13 community.  Health care communities would use a medical mall
 
14 setting but would not be restricted to that particular type of
 
15 setting.  A mall location would provide sufficient room for an
 
16 initial phase of development to meet immediate needs, for second
 
17 and third phases to provide support for first-phase facilities
 
18 and meet other needs, and room for future phases to provide
 
19 flexibility to meet the ever-changing requirements of health
 

 
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 1 care.  Around the mall, or in other types of settings,
 
 2 residential areas for health care providers and others should be
 
 3 developed, with inclusion of amenities including jogging trails,
 
 4 bicycle paths, parks, and pools to promote a healthy lifestyle
 
 5 for residents.
 
 6      The legislature finds that health care communities fit
 
 7 within state plans to strengthen Hawaii's economy by developing
 
 8 science and technology industries, and will provide a direct
 
 9 boost to the health and tourism industries, the two largest
 
10 industries in the State.  Because health care is a clean, quiet
 
11 industry, the legislature finds that the proposed health care
 
12 community will also bring jobs closer to residential areas
 
13 without negatively affecting those areas.  There is a need for
 
14 privately initiated development of the health care industry and
 
15 the government's role is to support and facilitate these efforts.
 
16      The legislature further finds that Hawaii's health care and
 
17 visitor industries, the State's economy, and Hawaii residents
 
18 will benefit significantly.  In particular, a health care
 
19 community will:
 
20      (1)  Provide state-of-the-art health care for Hawaii
 
21           residents;
 
22      (2)  Strengthen the state economy;
 

 
 
 
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 1      (3)  Create more high-paying jobs near residential areas;
 
 2      (4)  Provide a clean, quiet industry;
 
 3      (5)  Increase revenue for area businesses;
 
 4      (6)  Increase tax revenue for the State;
 
 5      (7)  Support the State's plans to increase Hawaii's sports
 
 6           and recreation industry;
 
 7      (8)  Enhance Hawaii's ability to meet the needs of an aging
 
 8           population;
 
 9      (9)  Bring health services to Hawaii that might not
 
10           otherwise be supported by the State's population base;
 
11     (10)  Boost the State's two largest industries--tourism and
 
12           health care;
 
13     (11)  Become a major component of the State's goal of
 
14           developing science and technology industries; and
 
15     (12)  Position Hawaii as a leader in health care in the Asia-
 
16           Pacific region.
 
17      The legislature further finds that government's role should
 
18 be to encourage and assist private initiatives that benefit the
 
19 State through public/private partnerships.
 
20      The purpose of this Act is to authorize the housing and
 
21 community development corporation of Hawaii to work in
 
22 partnership with private sector entities to develop health care
 
23 communities in the State.
 

 
Page 4                                                     1620
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 2.  Chapter 201G, Hawaii Revised Statutes, is
 
 2 amended by adding a new part to be appropriately designated and
 
 3 to read as follows:
 
 4                "PART    . HEALTH CARE COMMUNITIES
 
 5      §201G- Definitions.  As used in this part, unless the
 
 6 context clearly requires otherwise:
 
 7      "Health care community" means a master planned health care
 
 8 center and retirement community that generally includes
 
 9 facilities such as a medical mall or other setting, a medical
 
10 technology park, medical-related residential areas, general
 
11 residential and commercial areas, and appropriate infrastructure.
 
12      "Medical mall" means a centrally located network of state-
 
13 of-the-art health care services and medical research, training,
 
14 and technology facilities that promote and support a health care
 
15 community's emphases on wellness, including fitness and
 
16 prevention of illness, along with diagnosis, treatment, and care,
 
17 and seeks to bring together a wide range of health care including
 
18 traditional and nontraditional medicine.
 
19      §201G-   Health care community; public-private partnership;
 
20 planned community association.(a)  The corporation may work in
 
21 partnership with private sector entities to develop health care
 
22 communities in the State.  The corporation shall work with the
 

 
 
 
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 1 private sector and other appropriate entities to develop
 
 2 appropriate locations, plans, and criteria for the development of
 
 3 health care communities.
 
 4      (b)  Private sector businesses may enter into agreements
 
 5 with the corporation for the development of health care
 
 6 communities as provided in this part.
 
 7      (c)  Any planned community association that is organized for
 
 8 the purpose of governing all or a portion of the health care
 
 9 community shall comply with chapter 421J.
 
10      §201G-   Master plan.(a)  In cooperation with the private
 
11 sector and other appropriate entities, the corporation shall
 
12 develop a master plan for the health care community, which shall
 
13 include a medical mall or other setting and both health-related
 
14 and nonhealth-related facilities as described in this section.
 
15      (b)  The medical mall component of the health care
 
16 community, if used, or other setting, shall consist of a high
 
17 technology core as provided in this subsection, other health care
 
18 services, and medical-related housing.  The high-technology core
 
19 may include one or more of the following facilities:
 
20      (1)  A diagnostic-treatment center, or "a hospital without
 
21           beds";
 
22      (2)  Administrative offices;
 

 
 
 
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 1      (3)  A physicians office building;
 
 2      (4)  A sports medicine and research center; and
 
 3      (5)  A birthing center.
 
 4      (c)  In addition to the medical mall or other setting, the
 
 5 health care community may include one or more of the following
 
 6 health-related facilities:
 
 7      (1)  An acute-care facility;
 
 8      (2)  A conference center;
 
 9      (3)  An Alzheimer's center;
 
10      (4)  A hospice;
 
11      (5)  A clinic;
 
12      (6)  A medical hotel;
 
13      (7)  A center for alternative medicine;
 
14      (8)  An adolescent mental health facility;
 
15      (9)  A dental clinic;
 
16     (10)  A medical education and research campus;
 
17     (11)  A rehabilitation and wellness center;
 
18     (12)  A geriatric center;
 
19     (13)  A medical technology park;
 
20     (14)  A cardiac hospital;
 
21     (15)  A retirement community;
 
22     (16)  A nursing home;
 

 
 
 
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 1     (17)  A skilled nursing facility;
 
 2     (18)  An assisted living facility;
 
 3     (19)  A blood bank;
 
 4     (20)  Additional medical education space; and
 
 5     (21)  A facility for health warehousing and distribution.
 
 6      (d)  The health care community shall also include medical
 
 7 research, technology development, and education facilities, and
 
 8 may include a medical school to provide student access to the
 
 9 latest medical technology and facilities.
 
10      (e)  The health care community shall include housing and
 
11 commercial areas and other nonhealth-related facilities as are
 
12 deemed appropriate by the corporation.
 
13      §201G-   Health care community development; powers of the
 
14 corporation; cooperative agreements with other governmental
 
15 agencies.(a)  The corporation shall assist in planning,
 
16 developing, constructing, and financing health care communities,
 
17 including health care facilities, a medical mall or other
 
18 setting, and related facilities and infrastructure, as provided
 
19 in this part, including as appropriate:
 
20      (1)  Acquiring any real or personal property or interest
 
21           therein by purchase, exchange, gift, grant, lease, or
 
22           other means from any person or government to provide
 

 
 
 
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 1           housing.  Exchange of real property shall be in
 
 2           accordance with section 171-50;
 
 3      (2)  Owning or holding real property.  All real property
 
 4           owned or held by the corporation with respect to the
 
 5           health care community shall be exempt from mechanics'
 
 6           or materialmen's liens and also from levy and sale by
 
 7           virtue of an execution, and no execution or other
 
 8           judicial process shall issue against the same nor shall
 
 9           any judgment against the corporation be a charge or
 
10           lien upon its real property; provided that this
 
11           subsection shall not apply to or limit the right of
 
12           obligees to foreclose or otherwise enforce any mortgage
 
13           of the corporation or the right of obligees to pursue
 
14           any remedies for the enforcement of any pledge or lien
 
15           given by the corporation on its rents, fees, or
 
16           revenues.  The corporation and its property shall be
 
17           exempt from all taxes and assessments;
 
18      (3)  Leasing or renting all or a portion of any health-
 
19           related or nonhealth-related facility, and establishing
 
20           and revising the rents or charges;
 
21      (4)  Selling, exchanging, transferring, assigning, or
 
22           pledging any property, real or personal, or any
 
23           interest therein to any person or government;
 

 
Page 9                                                     1620
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 1      (5)  Insuring or providing for the insurance of its property
 
 2           or operations against risks as it deems advisable;
 
 3      (6)  Obtaining the aid and cooperation of any government in
 
 4           the planning, construction, and operation of the health
 
 5           care community, and entering into agreements and
 
 6           arrangements as it deems advisable to obtain aid and
 
 7           cooperation;
 
 8      (7)  Arranging or entering into agreements with any
 
 9           government for the acquisition by the government of
 
10           property, options, or property rights or for the
 
11           furnishing, installing, opening, or closing of streets,
 
12           roads, alleys, sidewalks, or other places, or for the
 
13           furnishing of property, services, parks, sewage, water,
 
14           and other facilities in connection with the health care
 
15           community, or for the changing of the map of a
 
16           political subdivision or the planning, replanning,
 
17           zoning, or rezoning of any part of a political
 
18           subdivision;
 
19      (8)  Procuring insurance or guarantees from any government
 
20           for the payment of any debts or parts incurred by the
 
21           corporation, including the power to pay premiums on any
 
22           of the insurance; and
 

 
 
 
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 1      (9)  Agree to make payments to the state or county
 
 2           government, if the government is authorized to accept
 
 3           payments, as the corporation deems consistent with the
 
 4           maintenance of the character of the health care
 
 5           community.
 
 6      (b)  For the purpose of aiding and cooperating in the
 
 7 planning, construction, and operation of the health care
 
 8 community located within their respective territorial boundaries,
 
 9 the state or county government, upon those terms, with or without
 
10 consideration, as it determines, may:
 
11      (1)  Dedicate, grant, sell, convey, or lease any of its
 
12           property, or grant easements, licenses, or any other
 
13           rights or privileges therein to the corporation or to
 
14           the federal government;
 
15      (2)  To the extent that it is within the scope of each of
 
16           their respective functions:
 
17           (A)  Cause the services customarily provided by each of
 
18                them to be rendered for the benefit of the health
 
19                care community;
 
20           (B)  Provide and maintain parks and sewage, water,
 
21                lights, and other facilities adjacent to or in
 
22                connection with the health care community;
 

 
 
 
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 1           (C)  Open, close, pave, install, or change the grade of
 
 2                streets, roads, roadways, alleys, sidewalks, or
 
 3                other related facilities; and
 
 4           (D)  Change the map of a political subdivision or plan,
 
 5                replan, zone, or rezone any part of a political
 
 6                subdivision;
 
 7      (3)  Enter into agreements with the corporation with respect
 
 8           to the exercise of their powers relating to the repair,
 
 9           closing, or demolition of unsafe, unsanitary, or unfit
 
10           dwellings or other facilities within the health care
 
11           community;
 
12      (4)  Employ, notwithstanding any other law as to what
 
13           constitutes legal investments, any available funds
 
14           belonging to them or within their control, including
 
15           funds derived from the sale or furnishing of property
 
16           or facilities to the corporation, in the purchase of
 
17           the bonds or other obligations of the corporation to
 
18           the extent provided by section 201G-161; and exercise
 
19           all the rights of any holder of the bonds or other
 
20           obligations;
 
21      (5)  Do any and all things necessary or convenient to aid
 
22           and cooperate in the planning, undertaking, and
 
23           construction of the health care community; and
 

 
Page 12                                                    1620
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (6)  Enter into contracts with the corporation or the
 
 2           federal government for any period agreeing to exercise
 
 3           any of the powers conferred hereby or to take any other
 
 4           action in aid of the health care community.
 
 5      In connection with the exercise of this power, any political
 
 6 subdivision may incur the entire expense of any of the public
 
 7 improvements located within its territorial boundaries without
 
 8 assessment against abutting property owners.
 
 9      To aid and cooperate in the planning, construction, and
 
10 operation of the health care community, the department of land
 
11 and natural resources, the Hawaiian homes commission, and any
 
12 other agency of the State having power to manage or dispose of
 
13 its public lands, may, with the approval of the governor, and
 
14 with or without consideration, grant, sell, convey, or lease for
 
15 any period, any parts of the public lands, without limit as to
 
16 area, to the corporation or to the federal government.
 
17      Any law to the contrary notwithstanding, any gift, grant,
 
18 sale, conveyance, lease, or agreement provided for in this
 
19 section may be made by the state or county government without
 
20 appraisal, public notice, advertisement, or public bidding.
 
21      Insofar as this subsection is inconsistent with the
 
22 provisions of any other law, this subsection shall be
 
23 controlling.
 

 
Page 13                                                    1620
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (c)  The government of any county in which the health care
 
 2 community is located or is about to be located may make donations
 
 3 or advances to the corporation in sums as the county in its
 
 4 discretion may determine.  The advances or donations shall be
 
 5 made for the purpose of aiding or cooperating in the construction
 
 6 and operation of the health care community.  The corporation,
 
 7 when it has money available therefor, shall reimburse the county
 
 8 for all advances made by way of a loan to it.
 
 9      §201G-   Health care community loan program; authorization.
 
10 (a)  The corporation may establish under this part, a loan
 
11 program for private businesses for the construction of the health
 
12 care community.  A minimum of ten per cent of the health care
 
13 community development shall be directly related to the provision
 
14 of health care.  A private developer who wishes to receive a loan
 
15 under this part shall submit an application to the department on
 
16 forms that the department may prescribe.  To qualify for the
 
17 award of a loan under this part, the developer applicant shall
 
18 meet the following minimum requirements:
 
19      (1)  Have a legal or equitable interest in the land to be
 
20           developed;
 
21      (2)  Have a minimum of twenty years of experience in the
 
22           health care industry;
 

 
 
 
Page 14                                                    1620
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 1      (3)  Have at least ten years working experience with a major
 
 2           health care provider in the area being served by the
 
 3           development; and
 
 4      (4)  Have a working relationship with and support of a
 
 5           physicians health organization with a membership of not
 
 6           less than fifty in the area being served by the
 
 7           development.
 
 8      (b)  The corporation may make loans or grants out of the
 
 9 health care community revolving fund, either before or after
 
10 final subdivision approval, to cover planning, engineering,
 
11 feasibility studies, construction, and other costs associated
 
12 with the health care community.
 
13      (c)  The corporation may invest in, make, purchase, take
 
14 assignments of, or otherwise acquire or make commitments to do
 
15 the same with respect to any eligible loans or any partial
 
16 interest or participation held by or on behalf of the
 
17 corporation.
 
18      (d)  The corporation may sell, assign, or otherwise dispose
 
19 of or enter into commitments to sell, assign, or otherwise
 
20 dispose of any eligible loans or any partial interest or
 
21 participation held by or on behalf of the corporation.
 

 
 
 
 
 
Page 15                                                    1620
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (e)  The corporation may acquire any obligation under
 
 2 conditions that require the seller of such obligation to use the
 
 3 proceeds of the sale for the purpose of financing eligible loans. 
 
 4      (f)  The corporation may adopt rules pursuant to chapter 91
 
 5 as may be necessary or convenient for the operation of the loan
 
 6 program.
 
 7      §201G-   Corporation; general powers.(a)  The corporation
 
 8 may use any and all of the development powers under this chapter
 
 9 to facilitate and support the private development of health care
 
10 communities in the State.
 
11      (b)  The corporation may make, enter into, and enforce all
 
12 contracts or agreements that are necessary, convenient, or
 
13 desirable for the purpose of the performance of its powers under
 
14 this part.
 
15      (c)  The corporation may establish, revise, charge, and
 
16 collect fees, premiums, and charges as necessary, reasonable, or
 
17 convenient in connection with the loan program established under
 
18 this part.  The fees, premiums, and charges shall be deposited
 
19 into the health care community revolving fund established in
 
20 section 201G-  .
 
21      (d)  The corporation may contract for the servicing and
 
22 custody of any loans or other obligations acquired under this
 
23 part.
 

 
Page 16                                                    1620
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (e)  The corporation may procure insurance against any
 
 2 default of its loans from insurers in amounts deemed necessary or
 
 3 desirable.
 
 4      (f)  Subject to any agreements with the holders of its
 
 5 bonds, the corporation may:
 
 6      (1)  Renegotiate, refinance, or foreclose any loan in
 
 7           default;
 
 8      (2)  Commence any action to protect or enforce any right
 
 9           conferred upon it by any law, or as provided in any
 
10           mortgage, insurance policy, contract, or other
 
11           agreement;
 
12      (3)  Bid for and purchase the property secured by the loan
 
13           at any foreclosure or other sale;
 
14      (4)  Acquire or take possession of the property secured by
 
15           the loan; and
 
16      (5)  Operate, manage, lease, dispose of, or otherwise deal
 
17           with the property securing the loan.
 
18      §201G-   Health care community revolving fund.(a)  There
 
19 is created the health care community revolving fund to be
 
20 administered by the corporation.  All repayments of principal and
 
21 interest on loans or grants made by the corporation from the fund
 
22 shall be placed in the health care community revolving fund to be
 
23 used for the purposes of this part.
 

 
Page 17                                                    1620
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (b)  The corporation may use, as needed, the aggregate
 
 2 principal sum and the accumulated earnings in the health care
 
 3 community revolving fund to make loans to businesses for the
 
 4 construction of the health care community as provided in section
 
 5 201G-  .
 
 6      (c)  In managing the fund, the corporation may cooperate
 
 7 with other public and private nonprofit organizations and may
 
 8 enter into loan or grant agreements with them.  The necessity for
 
 9 the nature and extent of security required for a loan or grant
 
10 shall be determined by the corporation.  The security may include
 
11 but is not limited to a borrowing resolution of the nonprofit
 
12 organization.
 
13      The foregoing powers are subject, however, to the following
 
14 restrictions and limitations:
 
15      (1)  No single loan or grant shall exceed two per cent of
 
16           the project cost;
 
17      (2)  The loan shall be repaid with simple interest not to
 
18           exceed six per cent per year; and
 
19      (3)  The moneys loaned shall be used only for the planning,
 
20           engineering, feasibility studies, construction, and
 
21           related costs of projects associated with the health
 
22           care community.
 

 
 
 
Page 18                                                    1620
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (d)  The aggregate principal sum in the health care
 
 2 community revolving fund, which may without limitation include
 
 3 sums made available from any government program or grant, from
 
 4 private grants or contributions, from the proceeds of any bond
 
 5 issue, or by appropriation, shall be invested by the corporation
 
 6 in a manner that will maximize the rate of return on investment
 
 7 of the fund; provided that any investment shall be consistent
 
 8 with section 201G-167 but need not comply with section 36-21.
 
 9      (e)  The corporation may adopt rules in accordance with
 
10 chapter 91 to carry out the purposes of this section.
 
11      §201G-   Additional powers.  The powers conferred upon the
 
12 corporation by this part shall be in addition and supplemental to
 
13 the powers conferred upon it by any other law, and nothing herein
 
14 shall be construed as limiting any powers, rights, privileges, or
 
15 immunities so conferred upon it.
 
16      §201G-   Rules.  The corporation shall adopt rules pursuant
 
17 to chapter 91 as may be necessary to implement this part."
 
18      SECTION 3.  Section 201G-12, Hawaii Revised Statutes, is
 
19 amended by amending subsection (a) to read as follows:
 
20      "(a)  The corporation, in its own behalf or on behalf of any
 
21 government, may:
 
22      (1)  Clear, improve, and rehabilitate property;
 

 
 
 
Page 19                                                    1620
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 1      (2)  Plan, develop, construct, and finance housing projects;
 
 2           [and]
 
 3      (3)  In cooperation with the department of education and
 
 4           department of accounting and general services, plan
 
 5           educational facilities and related infrastructure as a
 
 6           necessary and integral part of its housing projects
 
 7           using all its innovative powers towards achieving that
 
 8           end expeditiously and economically; provided that the
 
 9           educational facilities comply with the department of
 
10           education's educational specifications,
 
11           [[]timelines[]], and siting requirements[.]; and
 
12      (4)  Plan, develop, construct, and finance health care
 
13           communities, including health care facilities, a
 
14           medical mall, and related facilities and
 
15           infrastructure, as provided in part    ."
 
16      SECTION 4.  Pursuant to section 201G-162, Hawaii Revised
 
17 Statutes, the director of finance may issue general obligation
 
18 bonds in amounts up to $           to finance the cost of
 
19 acquiring, developing, improving, and constructing infrastructure
 
20 for a health care community as provided in this Act to be
 
21 expended by the housing and community development corporation of
 
22 Hawaii.  The corporation may take other action as it deems
 

 
 
 
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 1 necessary pursuant to its powers under chapter 201G, Hawaii
 
 2 Revised Statutes.  The corporation may utilize contributions of
 
 3 money, labor, materials, and property that may be otherwise
 
 4 available from any person or instrumentality.  The corporation,
 
 5 in its discretion, may establish a separate entity within the
 
 6 corporation to implement this section.
 
 7      SECTION 5.  The director of finance is authorized to issue
 
 8 general obligation bonds in the sum of $     or so much thereof
 
 9 as may be necessary and the same sum or so much thereof as may be
 
10 necessary is appropriated for fiscal year 1999-2000 to finance
 
11 the cost of the acquisition, development, improvement, and
 
12 construction of infrastructure for a health care community as
 
13 provided in this Act.  
 
14      The sum appropriated shall be expended by the housing and
 
15 community development corporation of Hawaii for the purposes of
 
16 this Act.
 
17      SECTION 6.  It is the intent of this Act not to jeopardize
 
18 the receipt of any federal aid nor to impair the obligation of
 
19 the State or any agency thereof to the holders of any bond issued
 
20 by the State or by any such agency, and to the extent, and only
 
21 to the extent, necessary to effectuate this intent, the governor
 
22 may modify the strict provisions of this Act, but shall promptly
 

 
 
 
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 1 report any such modification with reasons therefor to the
 
 2 legislature at its next session thereafter for review by the
 
 3 legislature.
 
 4      SECTION 7.  If any provision of this Act, or the application
 
 5 thereof to any person or circumstance is held invalid, the
 
 6 invalidity does not affect other provisions or applications of
 
 7 the Act which can be given effect without the invalid provision
 
 8 or application, and to this end the provisions of this Act are
 
 9 severable.
 
10      SECTION 8.  Statutory material to be repealed is bracketed.
 
11 New statutory material is underscored.
 
12      SECTION 9.  This Act shall take effect on July 1, 1999.