REPORT TITLE:
HHSC

DESCRIPTION:
Authorizes the issuance of hospital revenue bonds ($38,000,000)
and includes a diagnostic and progressive care center adjacent to
Maui Memorial Medical Center.  (SD1)


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2873
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO HAWAII HEALTH SYSTEMS CORPORATION.



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

 1      SECTION 1.  Hawaii health systems corporation is authorized
 
 2 to issue $38,000,000 in revenue bonds under Act 116 Hawaii
 
 3 Session Laws 1998 (Item 13P, page 369).  The legislature finds
 
 4 that Hawaii health systems corporation is unable to issue the
 
 5 revenue bonds without those bonds being secured by a guaranty
 
 6 from the State.
 
 7      The legislature finds and declares that the issuance of bond
 
 8 guarantees under this Act is in the public interest and for the
 
 9 public health, safety, and general welfare of the State.
 
10      SECTION 2.  Bonds guaranteed by the department.  (a)  The
 
11 department of budget and finance, through its director, may
 
12 guaranty payment of principal of and interest on bonds issued by
 
13 Hawaii health systems corporation under section 323F-7, Hawaii
 
14 Revised Statutes, by guaranteeing payment of principal of and
 
15 interest on the bonds or by guaranteeing the provider of any
 
16 credit facility securing the bonds to reimburse any amounts drawn
 
17 on such credit facility to pay principal of or interest on the
 
18 bonds.  The amount of liability under the guaranty shall not
 
19 exceed $47,500,000.
 

 
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 1      (b)  The terms for the guaranty shall include a requirement
 
 2 that the Hawaii health systems corporation deposit and maintain,
 
 3 in a trust fund to be established and held by the department or
 
 4 by a bank trustee on behalf of the department an amount equal to
 
 5 the lesser of maximum annual debt service on, or one hundred
 
 6 twenty-five per cent of average annual debt service on, or ten
 
 7 per cent of the principal amount at issuance of, the bonds
 
 8 guaranteed.  If the interest rate on the bonds is variable, an
 
 9 assumed interest rate or formula determined by the department
 
10 shall be used in calculating the balance required to be
 
11 maintained in the trust fund.  This deposit may be made from
 
12 proceeds of the bonds or any other available funds of Hawaii
 
13 health systems corporation.  Amounts in the trust fund shall be
 
14 invested by the department in any securities in which proceeds of
 
15 the bonds may be invested and shall be held in trust for the
 
16 benefit of the State and pledged to payment of principal of and
 
17 interest on the bonds prior to any payment under the guaranty.
 
18 In the event of default by Hawaii health systems corporation in
 
19 payment of any amount in respect of debt service on guaranteed
 
20 bonds, the trustee for the guaranteed bonds shall notify the
 
21 department of the default and shall be entitled to any amounts in
 
22 the trust fund necessary to cure the default and, to the extent
 
23 such amounts are not sufficient, to take all steps necessary or
 

 
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 1 appropriate to collect the amounts necessary to cure the default
 
 2 pursuant to the guaranty or any applicable credit facility (in
 
 3 which case the credit provider shall be entitled to reimbursement
 
 4 pursuant to the guaranty).  In the event of any transfer of
 
 5 amounts in the trust fund to the trustee for the guaranteed bonds
 
 6 (or to the credit facility provider) due to any deficiency in
 
 7 payment from Hawaii health systems corporation, the department
 
 8 shall seek an appropriation or appropriations from the
 
 9 legislature in such amounts and at such times as the department
 
10 determines to be necessary or agrees pursuant to its guaranty in
 
11 order to fund the guaranty or the trust fund.  
 
12      Amounts remaining in the trust fund may be used for final
 
13 payment of the bonds on maturity or early redemption or
 
14 acceleration and to the extent not so used shall be returned to
 
15 Hawaii health systems corporation after all guaranteed bonds have
 
16 been paid.  Amounts in the trust fund in excess of the required
 
17 balance, from time to time, shall be returned to the Hawaii
 
18 health systems corporation subject to any other agreement with
 
19 bondholders, credit providers, or the department.  Appropriations
 
20 received by the department pursuant to this section may be added
 
21 to the trust fund or held by or on behalf of the department in a
 
22 supplemental trust fund in order to maintain the aggregate
 
23 balance in the trust fund or funds at the required amount.  To
 

 
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 1 the extent not used to make payments under the guaranty, such
 
 2 appropriations (including any earnings thereon) shall be returned
 
 3 to the State when the Hawaii health systems corporation returns
 
 4 the trust fund to the required balance with its own funds or
 
 5 after all guaranteed bonds have been paid in full.
 
 6      (c)  The department may set additional terms and conditions
 
 7 on the granting of the guaranty, which may include requiring the
 
 8 Hawaii health systems corporation (and in such event,
 
 9 notwithstanding any other provision of law, the Hawaii health
 
10 systems corporation is authorized) to pledge, mortgage, or grant
 
11 a security interest in, sell, assign, lease, or otherwise dispose
 
12 of any or all property, whether real, personal or mixed, tangible
 
13 or intangible, and of any interest therein, to secure payment of
 
14 the principal of any interest on the bonds or reimbursement to
 
15 the provider of any credit facility securing the bonds or
 
16 reimbursement to the State, of any payments made pursuant to the
 
17 credit facility or the State guaranty, as the case may be.
 
18      SECTION 3.  Pursuant to Article VII, section 13, clause 8,
 
19 of the State Constitution that states:  "Bonds constituting
 
20 instruments of indebtedness under which the State or any
 
21 political subdivision incurs a contingent liability as a
 
22 guarantor, but only to the extent the principal amount of such
 
23 bonds does not exceed seven percent of the principal amount of
 

 
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 1 outstanding general obligation bonds not otherwise excluded under
 
 2 this section; provided that the State or political subdivision
 
 3 shall establish and maintain a reserve in an amount in reasonable
 
 4 proportion to the outstanding loans guaranteed by the State or
 
 5 political subdivision as provided by law", the legislature finds
 
 6 and declares that the moneys deposited into the trust fund or
 
 7 funds, pursuant to section 2(c) of this Act, satisfies the
 
 8 reasonable reserve requirement of the State Constitution.
 
 9      SECTION 4.  Declaration of findings with respect to the
 
10 general obligation bonds authorized by this Act.  Pursuant to the
 
11 clause in Article VII, Section 13, of the State Constitution
 
12 which states: "Effective July 1, 1980, the legislature shall
 
13 include a declaration of findings in every general law
 
14 authorizing the issuance of general obligation bonds that the
 
15 total amount of principal and interest, estimated for such bonds
 
16 and for all bonds authorized and unissued and calculated for all
 
17 bonds issued and outstanding, will not cause the debt limit to be
 
18 exceeded at the time of issuance," the legislature finds and
 
19 declares as follows:
 
20      (1)  Limitation on general obligation debt.  The debt limit
 
21 of the state is set forth in Article VII, Section 13, of the
 
22 State Constitution, which states in part: "General obligation
 
23 bonds may be issued by the State; provided that such bonds at the
 

 
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 1 time of issuance would not cause the total amount of principal
 
 2 and interest payable in the current or any future fiscal year,
 
 3 whichever is higher, on such bonds and on all outstanding general
 
 4 obligation bonds to exceed: a sum equal to twenty percent of the
 
 5 average of the general fund revenues of the State in the three
 
 6 fiscal years immediately preceding such issuance until June 30,
 
 7 1982; and thereafter, a sum equal to eighteen and one-half
 
 8 percent of the average of the general fund revenues of the State
 
 9 in the three fiscal years immediately preceding such issuance."
 
10 Article VII, Section 13, also provides that in determining the
 
11 power of the State to issue general obligation bonds, certain
 
12 bonds are excludable, including "reimbursable general obligation
 
13 bonds issued for a public undertaking, improvement, or system but
 
14 only to the extent that reimbursements to the general fund are in
 
15 fact made from the net revenue, or net user tax receipts, or
 
16 combination of both, as determined for the immediately preceding
 
17 fiscal year" and bonds constituting instruments of indebtedness
 
18 under which the State incurs a contingent liability as a
 
19 guarantor, but only to the extent the principal amount of such
 
20 bonds does not exceed seven per cent of the principal amount of
 
21 outstanding general obligation bonds not otherwise excluded under
 
22 said Article VII, Section 13.
 
23      (2)  Actual and estimated debt limits.  The limit on
 

 
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 1 principal and interest of general obligation bonds issued by the
 
 2 State, actual for fiscal year 1999-2000 and estimated for each
 
 3 fiscal year from 2000-2001 to 2002-2003, is as follows:
 
 4          Fiscal           Net General          Debt Limit
 
 5           Year           Fund Revenues
 
 6        1996-1997         3,115,264,737
 
 7        1997-1998         3,195,967,036
 
 8        1998-1999         3,254,256,686
 
 9        1999-2000         3,087,808,000      $589,871,788
 
10        2000-2001         3,137,140,000       588,178,623
 
11        2001-2002         3,153,478,000       584,550,956
 
12        2002-2003         (not applicable)    578,336,270
 
13 For fiscal years 1999-2000, 2000-2001, 2001-2002 and 2002-2003
 
14 respectively, the debt limit is derived by multiplying the
 
15 average of the net general fund revenues for the three preceding
 
16 fiscal years by eighteen and one-half per cent.  The net general
 
17 fund revenues for fiscal years 1996-1997, 1997-1998, and 1998-
 
18 1999 are actual, as certified by the director of finance in the
 
19 Statement of the Debt Limit of the State of Hawaii as of July 1,
 
20 1999, dated November 24, 1999.  The net general fund revenues for
 
21 fiscal years 1999-2000 to 2001-2002 are estimates, based on
 
22 general fund revenue estimates made as of September 3, 1999, by
 
23 the council on revenues, the body assigned by Article VII,
 

 
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 1 Section 7, of the State Constitution to make such estimates, and
 
 2 based on estimates made by the department of budget and finance
 
 3 of those receipts which cannot be included as general fund
 
 4 revenues for the purpose of calculating the debt limit, all of
 
 5 which estimates the legislature finds to be reasonable.
 
 6      (3)  Principal and interest on outstanding bonds applicable
 
 7 to the debt limit. (A) According to the department of budget and
 
 8 finance, the total amount of principal and interest on
 
 9 outstanding general obligation bonds, after the exclusions
 
10 permitted by Article VII, Section 13, of the State Constitution,
 
11 for determining the power of the State to issue general
 
12 obligation bonds within the debt limit as of December 1, 1999 is
 
13 as follows for fiscal year 2000-2001 to fiscal year 2006-2007:   
 
14                     Fiscal           Principal
 
15                      Year          and Interest
 
16                     2000-2001      $352,508,780
 
17                     2001-2002       367,994,493
 
18                     2002-2003       411,701,970
 
19                     2003-2004       378,223,219
 
20                     2004-2005       373,053,164
 
21                     2005-2006       347,383,328
 
22                     2006-2007       344,154,560
 
23 The department of budget and finance further reports that the
 

 
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 1 amount of principal and interest on outstanding bonds applicable
 
 2 to the debt limit generally continues to decline each year from
 
 3 fiscal year 2007-2008 to fiscal year 2019-2020 when the final
 
 4 installment of $27,612,984 shall be due and payable.  (B) The
 
 5 department of budget and finance further reports that the
 
 6 outstanding principal amount of bonds constituting instruments of
 
 7 indebtedness under which the State may incur a contingent
 
 8 liability as a guarantor is $191,000,000, all or part of which is
 
 9 excludable in determining the power of the State to issue general
 
10 obligation bonds, pursuant to Article VII, Section 13, of the
 
11 State Constitution.
 
12      (4)  Amount of authorized and unissued general obligation
 
13 bonds and guaranties and proposed bonds and guaranties.  (A) As
 
14 calculated from the state comptroller's bond fund report as of
 
15 October 31, 1999, adjusted for (i) appropriations to be funded by
 
16 general obligation bonds and reimbursable general obligation
 
17 bonds as provided in Act 99, Session Laws of Hawaii 1999 (General
 
18 Appropriations Act of 1999), to be expended in the fiscal year
 
19 2000-2001; (ii) appropriation to be funded by reimbursable
 
20 general obligation bonds as provided in Act 151, Session Laws of
 
21 Hawaii 1999 (Relating to Hawaii Hurricane Relief Fund Bonds), to
 
22 be expended in the fiscal year 2000-2001; and Act 156, Session
 
23 Laws of Hawaii 1999 (Judiciary Appropriations Act of 1999), to be
 

 
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 1 expended in the fiscal year 2000-2001, the total amount of
 
 2 authorized but unissued general obligation bonds is
 
 3 $1,396,394,543.  (B) As reported by the department of budget and
 
 4 finance the outstanding principal amount of bonds constituting
 
 5 instruments of indebtedness under which the State may incur a
 
 6 contingent liability as a guarantor is $191,000,000, all or part
 
 7 of which is excludable in determining the power of the State to
 
 8 issue general obligation bonds, pursuant to Article VII,
 
 9 Section 13, of the State Constitution.  The total amount of
 
10 guaranties authorized by this Act is $47,500,000 and are herein
 
11 validated.  The total amount of guaranties previously authorized
 
12 and validated by this Act is $238,500,000.
 
13      (5)  Proposed general obligation bond issuance.  As reported
 
14 therein for the fiscal years 1998-1999, 1999-2000, 2000-2001,
 
15 2001-2002 and 2002-2003, the State proposed to issue $200,000,000
 
16 in general obligation bonds during the remainder of fiscal year
 
17 1999-2000, $350,000,000 during the first half of fiscal year
 
18 2000-2001, $150,000,000 during the second half of fiscal year
 
19 2000-2001, $150,000,000 during the first half of fiscal year 2001
 
20 -2002, $150,000,000 during the second half of fiscal year 2001-
 
21 2002, $100,000,000 during the first half of fiscal year 2002-
 
22 2003, and $300,000,000 during the second half of fiscal year
 
23 2002-2003.  It has been the practice of the State to issue
 

 
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 1 twenty-year serial bonds with principal repayments beginning the
 
 2 third year, the bonds payable in substantially equal annual
 
 3 installments of principal and interest payment with interest
 
 4 payments commencing six months from the date of issuance and
 
 5 being paid semi-annually thereafter.  It is assumed that this
 
 6 practice will continue to be applied to the bonds which are
 
 7 proposed to be issued except that principal repayments will begin
 
 8 in the fourth year.
 
 9      (6)  Sufficiency of proposed general obligation bond
 
10 issuance to meet the requirements of authorized and unissued
 
11 bonds, as adjusted, and bonds authorized by this Act.  From the
 
12 schedule reported in paragraph (5), the total amount of general
 
13 obligation bonds which the State proposes to issue during the
 
14 fiscal years 1999-2000 to 2001-2002 is $1,000,000,000.  An
 
15 additional $400,000,000 is proposed to be issued in fiscal year
 
16 2002-2003.  The total amount of $1,000,000,000 which is proposed
 
17 to be issued through fiscal year 2001-2002 is sufficient to meet
 
18 the requirements of the authorized and unissued bonds, as
 
19 adjusted, the total amount of which is $1,396,394,543, as
 
20 reported in paragraph (4), except for $396,394,543.  It is
 
21 assumed that the appropriations to which an additional
 
22 $396,394,543 in bond issuance needs to be applied will have been
 
23 encumbered as of June 30, 2002.  The $400,000,000 which is
 

 
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 1 proposed to be issued in fiscal year 2002-2003 will be sufficient
 
 2 to meet the requirements of the June 30, 2002, encumbrances in
 
 3 the amount of $396,394,543.  The amount of assumed encumbrances
 
 4 as of June 30, 2002, is reasonable and conservative, based upon
 
 5 an inspection of June 30 encumbrances of the general obligation
 
 6 bond fund as reported by the state comptroller.  Thus, taking
 
 7 into account the amount of authorized and unissued bonds, as
 
 8 adjusted, and the bonds authorized by this Act versus the amount
 
 9 of bonds which is proposed to be issued by June 30, 2002, and the
 
10 amount of June 30, 2002, encumbrances versus the amount of bonds
 
11 which is proposed to be issued in fiscal year 2002-2003, the
 
12 legislature finds that in the aggregate, the amount of bonds
 
13 which is proposed to be issued is sufficient to meet the
 
14 requirements of all authorized and unissued bonds and the bonds
 
15 authorized by this Act.
 
16      (7)  Bonds excludable in determining the power of the State
 
17 to issue bonds.  As noted in paragraph (1), certain bonds are
 
18 excludable in determining the power of the State to issue general
 
19 obligation bonds.  (A) General obligation reimbursable bonds can
 
20 be excluded under certain conditions.
 
21      It is not possible to make a conclusive determination as to
 
22 the amount of reimbursable bonds which are excludable from the
 
23 amount of each proposed bond issued because:
 

 
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 1      (i)  It is not known exactly when projects for which
 
 2 reimbursable bonds have been authorized in prior acts and in this
 
 3 Act will be implemented and will require the application of
 
 4 proceeds from a particular bond issue; and
 
 5      (ii)  Not all reimbursable general obligation bonds may
 
 6 qualify for exclusion.
 
 7      However, the legislature notes that with respect to the
 
 8 principal and interest on outstanding general obligation bonds,
 
 9 according to the department of budget and finance, the average
 
10 proportion of principal and interest which is excludable each
 
11 year from the calculation against the debt limit is 6.97 per cent
 
12 for the ten years from fiscal year 2000-2001 to fiscal year
 
13 2009-2010.  For the purpose of this declaration, the assumption
 
14 is made that five per cent of each bond issue will be excludable
 
15 from the debt limit, an assumption which the legislature finds to
 
16 be reasonable and conservative.  (B) Bonds constituting
 
17 instruments of indebtedness under which the State incurs a
 
18 contingent liability as a guarantor can be excluded but only to
 
19 the extent the principal amount of such guaranties does not
 
20 exceed seven per cent of the principal amount of outstanding
 
21 general obligation bonds not otherwise excluded under
 
22 subparagraph (A) of this paragraph (7) and provided that the
 
23 State shall establish and maintain a reserve in an amount in
 

 
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 1 reasonable proportion to the outstanding loans guaranteed by the
 
 2 State as provided by law.  According to the department of budget
 
 3 and finance and the assumptions presented herein, the total
 
 4 principal amount of outstanding general obligation bonds and
 
 5 general obligation bonds proposed to be issued, which are not
 
 6 otherwise excluded under Article VII, Section 13, of the State
 
 7 Constitution for the fiscal years 1999-2000, 2000-2001, 2001-2002
 
 8 and 2002-2003 are as follows:
 
 9                Fiscal Year            Total Amount of
 
10                                      General Obligation Bonds
 
11                                      not otherwise excluded by
 
12                                      Article VII, Section 13,
 
13                                      of the State Constitution
 
14                1999-2000                  3,309,433,537
 
15                2000-2001                  3,600,550,972
 
16                2001-2002                  3,677,655,955
 
17                2002-2003                  3,843,443,582
 
18      Based on the foregoing and based on the assumption that the
 
19 full amount of a guaranty is immediately due and payable when
 
20 such guaranty changes from a contingent liability to an actual
 
21 liability, the aggregate principal amount of the portion of the
 
22 outstanding guaranties and the guaranties proposed to be
 
23 incurred, which does not exceed seven per cent of the average
 

 
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 1 amount set forth in the last column of the above table and for
 
 2 which reserve funds have been or will have been established as
 
 3 heretofore provided, can be excluded in determining the power of
 
 4 the State to issue general obligation bonds.  As it is not
 
 5 possible to predict with a reasonable degree of certainty when a
 
 6 guaranty will change from a contingent liability to an actual
 
 7 liability, it is assumed in conformity with fiscal conservatism
 
 8 and prudence, that all guaranties not otherwise excluded pursuant
 
 9 to Article VII, Section 13, of the State Constitution will become
 
10 due and payable in the same fiscal year in which the greatest
 
11 amount of principal and interest on general obligation bonds,
 
12 after exclusions, occurs.  Thus, based on such assumptions and on
 
13 the determination in paragraph (8), all of the outstanding
 
14 guaranties can be excluded.
 
15      (8)  Determination whether the debt limit will be exceeded
 
16 at the time of issuance.  From the foregoing and on the
 
17 assumption that all of the bonds identified in paragraph (5) will
 
18 be issued at an interest rate of 6.0 per cent, it can be
 
19 determined from the following schedule that the bonds which are
 
20 proposed to be issued, which include all authorized and unissued
 
21 bonds previously authorized, as adjusted, general obligation
 
22 bonds and instruments of indebtedness under which the State
 
23 incurs a contingent liability as a guarantor authorized in this
 

 
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 1 Act, will not cause the debt limit to be exceeded at the time of
 
 2 such issuance:
 
 3 Time of Issuance         Debt Limit       Greatest Amount
 
 4 and Amount to be         at Time of         and Year of
 
 5 Counted Against           Issuance        Highest Principal
 
 6   Debt Limit                                and Interest
 
 7                                        on Bonds and Guaranties
 
 8 Remainder FY 1999-2000
 
 9 $190,000,000             589,871,788   423,101,970 (2002-2003)
 
10 1st half FY 2000-2001
 
11 $332,500,000             588,178,623   443,051,970 (2002-2003)
 
12 2nd half FY 2000-2001
 
13 $142,500,000             588,178,623   451,601,970 (2002-2003)
 
14 1st half FY 2001-2002
 
15 $142,500,000             584,550,956   455,876,970 (2002-2003)
 
16 2nd half FY 2001-2002
 
17 $142,500,000             584,500,956   464,426,970 (2002-2003)
 
18 1st half FY 2002-2003
 
19 $95,000,000              578,336,270   549,374,614 (2004-2005)
 
20 2nd half FY 2002-2003
 
21 $285,000,000             578,336,270   479,324,614 (2004-2005)
 
22      (9)  Overall and concluding finding.  From the facts,
 
23 estimates, and assumptions stated in this declaration of
 

 
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 1 findings, the conclusion is reached that the total amount of
 
 2 principal and interest estimated for the general obligation bonds
 
 3 authorized in this Act, and for all bonds authorized and
 
 4 unissued, and calculated for all bonds issued and outstanding,
 
 5 and all guaranties, will not cause the debt limit to be exceeded
 
 6 at the time of issuance.
 
 7      SECTION 5.  The legislature finds the bases for the
 
 8 declaration of findings set forth in this Act reasonable.  The
 
 9 assumptions set forth in this Act with respect to the principal
 
10 amount of general obligation bonds which will be issued, the
 
11 amount of principal and interest on reimbursable general
 
12 obligation bonds which are assumed to be excludable, and the
 
13 assumed maturity structure shall not be deemed to be binding, it
 
14 being the understanding of the legislature that such matters must
 
15 remain subject to substantial flexibility.
 
16      SECTION 6.  Section 323F-7, Hawaii Revised Statutes, is
 
17 amended by amending subsection (a) to read as follows:
 
18      "(a)  Notwithstanding any other law to the contrary, the
 
19 corporation shall have and exercise the following duties and
 
20 powers:
 
21      (1)  Developing its own policies, procedures, and rules
 
22           necessary or appropriate to plan, operate, manage, and
 
23           control the system of public health facilities and
 

 
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 1           services without regard to chapter 91;
 
 2      (2)  Evaluating the need for health facilities and services;
 
 3      (3)  Entering into and performing any contracts, leases,
 
 4           cooperative agreements, or other transactions
 
 5           whatsoever that may be necessary or appropriate in the
 
 6           performance of its purposes and responsibilities, and
 
 7           on terms it may deem appropriate, with either:
 
 8           (A)  Any agency or instrumentality of the United
 
 9                States, or with any state, territory, or
 
10                possession, or with any subdivision thereof; or 
 
11           (B)  Any person, firm, association, or corporation,
 
12                whether operated on a for-profit or not-for-
 
13                profit basis;
 
14           provided that the transaction furthers the public
 
15           interest;
 
16      (4)  Conducting activities and entering into business
 
17           relationships as the corporation board deems necessary
 
18           or appropriate, including but not limited to:
 
19           (A)  Creating nonprofit corporations, including but not
 
20                limited to charitable fund-raising foundations, to
 
21                be controlled wholly by the corporation or jointly
 
22                with others;
 
23           (B)  Establishing, subscribing to, and owning stock in
 

 
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 1                business corporations individually or jointly with
 
 2                others; and
 
 3           (C)  Entering into partnerships and other joint venture
 
 4                arrangements, or participating in alliances,
 
 5                purchasing consortia, health insurance pools, or
 
 6                other cooperative arrangements, with any public or
 
 7                private entity; provided that any corporation,
 
 8                venture, or relationship entered into under this
 
 9                section furthers the public interest; provided
 
10                further that this paragraph shall not be construed
 
11                to authorize the corporation to abrogate any
 
12                responsibility or obligation under paragraph (15);
 
13      (5)  Participating in and developing prepaid health care
 
14           service and insurance programs and other alternative
 
15           health care delivery programs, including programs
 
16           involving the acceptance of capitated payments or
 
17           premiums that include the assumption of financial and
 
18           actuarial risk;
 
19      (6)  Executing, in accordance with all applicable bylaws,
 
20           rules, and laws, all instruments necessary or
 
21           appropriate in the exercise of any of the corporation's
 
22           powers;
 
23      (7)  Preparing and executing all corporation budgets,
 

 
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 1           policies, and procedures;
 
 2      (8)  Setting rates and charges for all services provided by
 
 3           the corporation without regard to chapter 91;
 
 4      (9)  Developing a corporation-wide hospital personnel system
 
 5           that is subject to chapters 76, 77, and 89;
 
 6     (10)  Developing the corporation's capital and strategic
 
 7           plans;
 
 8     (11)  Suing and being sued; provided that the corporation
 
 9           shall enjoy the same sovereign immunity available to
 
10           the State;
 
11     (12)  Making and altering corporation board bylaws for its
 
12           organization and management without regard to chapter
 
13           91;
 
14     (13)  Adopting rules, without regard to chapter 91, governing
 
15           the exercise of its powers and the fulfillment of its
 
16           purpose under this chapter;
 
17     (14)  Entering into any contract or agreement whatsoever, not
 
18           inconsistent with this chapter or the laws of this
 
19           State, and authorizing the corporation chief executive
 
20           officer to enter into all contracts, execute all
 
21           instruments, and do all things necessary or appropriate
 
22           in the exercise of the powers granted in this chapter,
 
23           including securing the payment of bonds;
 

 
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 1     (15)  Issuing revenue bonds subject to the approval of the
 
 2           legislature; provided that all revenue bonds shall be
 
 3           issued pursuant to part III, chapter 39;
 
 4     (16)  Reimbursing the state general fund for debt service on
 
 5           general obligation bonds or reimbursable general
 
 6           obligation bonds issued by the State for the purposes
 
 7           of the corporation;
 
 8     (17)  Pledging or assigning all or any part of the receipts
 
 9           and revenues of the corporation for purposes of meeting
 
10           bond or health systems liabilities;
 
11     (18)  Owning, purchasing, leasing, exchanging, or otherwise
 
12           acquiring property, whether real, personal or mixed,
 
13           tangible or intangible, and of any interest therein, in
 
14           the name of the corporation, which property is not
 
15           owned or controlled by the State but is owned or
 
16           controlled by the corporation;
 
17     (19)  Maintaining, improving, pledging, mortgaging, selling,
 
18           or otherwise holding or disposing of property, whether
 
19           real, personal or mixed, tangible or intangible, and of
 
20           any interest therein, at any time and manner, in
 
21           furtherance of the purposes and mission of the
 
22           corporation; provided that the a corporation legally
 
23           holds or controls the property in its own name; and
 

 
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 1           provided further that the corporation shall not sell,
 
 2           assign, lease, hypothecate, mortgage, pledge, give, or
 
 3           dispose of [a substantial portion] all or substantially
 
 4           all of its property [of any nature];
 
 5     (20)  Purchasing insurance and creating captive insurers in
 
 6           any arrangement deemed in the best interest of the
 
 7           corporation, including but not limited to funding and
 
 8           payment of deductibles and purchase of reinsurance;
 
 9     (21)  Acquiring by condemnation, pursuant to chapter 101, any
 
10           real property required by the corporation to carry out
 
11           the powers granted by this chapter;
 
12     (22)  Depositing any moneys of the corporation in any banking
 
13           institution within or without the State, and
 
14           appointing, for the purpose of making deposits, one or
 
15           more persons to act as custodians of the moneys of the
 
16           corporation;
 
17     (23)  Contracting for and accepting any gifts, grants, and
 
18           loans of funds, property, or any other aid in any form
 
19           from the federal government, the State, any state
 
20           agency, or any other source, or any combination
 
21           thereof, and complying, subject to this chapter, with
 
22           the terms and conditions thereof;
 
23     (24)  Providing health and medical services for the public
 

 
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 1           directly or by agreement or lease with any person,
 
 2           firm, or private or public corporation or association
 
 3           through or in the health facilities of the corporation
 
 4           or otherwise;
 
 5     (25)  Approving medical staff bylaws, rules, and medical
 
 6           staff appointments and reappointments for all public
 
 7           health facilities, including without limitation,
 
 8           determining the conditions under which a health
 
 9           professional may be extended the privilege of
 
10           practicing within a health facility, and adopting and
 
11           implementing reasonable rules, without regard to
 
12           chapter 91, for the credentialing and peer review of
 
13           all persons and health professionals within the
 
14           facility; 
 
15     (26)  (A)  Investing any funds not required for immediate
 
16                disbursement in property or in securities that
 
17                meet the standard for investments established in
 
18                chapter 88 as provided by the corporation board;
 
19                provided the investment assists the corporation in
 
20                carrying out its public purposes; selling from
 
21                time to time securities thus purchased and held,
 
22                and depositing any securities in any bank or
 
23                financial institution within or without the State.
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1                Any funds deposited in a banking institution or in
 
 2                any depository authorized in this section shall be
 
 3                secured in a manner and subject to terms and
 
 4                conditions as the corporation board may determine,
 
 5                with or without payment of any interest on the
 
 6                deposit, including, without limitation, time
 
 7                deposits evidenced by certificates of deposit.
 
 8                Any bank or financial institution incorporated
 
 9                under the laws of this State may act as depository
 
10                of any funds of the corporation and may issue
 
11                indemnity bonds or may pledge securities as may be
 
12                required by the corporation board.
 
13           (B)  Notwithstanding subparagraph (A), contracting with
 
14                the holders of any of its notes or bonds as to the
 
15                custody, collection, securing, investment, and
 
16                payment of any moneys of the corporation and of
 
17                any moneys held in trust or otherwise for the
 
18                payment of notes or bonds and carrying out the
 
19                contract.  Moneys held in trust or otherwise for
 
20                the payment of notes or bonds or in any way to
 
21                secure notes or bonds, and deposits of such
 
22                moneys, may be secured in the same manner as
 
23                moneys of the corporation, and all banks and trust
 

 
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 1                companies are authorized to give security for the
 
 2                deposits;
 
 3     (27)  Entering into any agreement with the State including
 
 4           but not limited to contracts for the provision of
 
 5           goods, services, and facilities in support of the
 
 6           corporation's programs, and contracting for the
 
 7           provision of services to or on behalf of the State;
 
 8     (28)  Having a seal and altering the same at pleasure;
 
 9     (29)  Waiving, by means that the corporation deems
 
10           appropriate, the exemption from federal income taxation
 
11           of interest on the corporation's bonds, notes, or other
 
12           obligations provided by the Internal Revenue Code of
 
13           1986, as amended, or any other federal statute
 
14           providing a similar exemption;
 
15     (30)  Developing internal policies and procedures for the
 
16           procurement of goods and services, consistent with the
 
17           goals of public accountability and public procurement
 
18           practices, but not subject to chapter 103D.  However,
 
19           where possible, the corporation is encouraged to use
 
20           the provisions of chapter 103D; provided that the use
 
21           of one or more provisions of chapter 103D shall not
 
22           constitute a waiver of the exemption from chapter 103D
 
23           and shall not subject the corporation to any other
 

 
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 1           provision of chapter 103D;
 
 2     (31)  Authorizing and establishing positions;
 
 3     (32)  Calling upon the attorney general for such legal
 
 4           services as the corporation may require; and
 
 5     (33)  Having and exercising all rights and powers necessary
 
 6           or incidental to or implied from the specific powers
 
 7           granted in this chapter, which specific powers shall
 
 8           not be considered as a limitation upon any power
 
 9           necessary or appropriate to carry out the purposes and
 
10           intent of this chapter."
 
11      SECTION 7.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 8.  The provisions of this Act are declared to be
 
14 severable and if any portion thereof is held to be invalid for
 
15 any reason, the validity of the remainder of this Act shall not
 
16 be affected.
 
17      SECTION 9.  This Act shall take effect upon its approval.