Report Title:

Maui Regional Health Systems Corporation

 

Description:

Creates Maui regional health systems corporation as a public corporation and transfers Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital and their assets and liabilities from the Hawaii health systems corporation and returns them after 5 years.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

1072

TWENTY-FIRST LEGISLATURE, 2001

  

STATE OF HAWAII

  

 

A BILL FOR AN ACT

 

relating to the maui regional health systems corporation.

 

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

SECTION 1. The legislature finds that certain neighbor island health facilities of the Hawaii health systems corporation, particularly Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital, have not benefitted from the flexibility and autonomy granted to the corporation in 1996. For these and other neighbor island health facilities to compete and remain viable, the legislature finds that it is necessary to grant separate autonomy for neighbor island health facilities and community hospitals.

The purpose of this Act is to create a Maui regional health systems corporation to own and operate the Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital. This corporation will have same rights, powers, functions, and duties of the Hawaii health systems corporation. It is the intention of this Act that the Kula Hospital, the Lanai Community Hospital, and the Maui Memorial Hospital be transferred from the Hawaii health systems corporation to the Maui regional health systems corporation for a period of five years from July 1, 2002 to June 30, 2007, in order to test the viability of a more focused autonomous structure as embodied by the Maui regional health systems corporation.

Nothing in this Act other than the provisions for legislative oversight over the budget and activities of the corporation shall be construed as a restriction or limitation upon any other powers that the Maui regional health systems corporation might otherwise have under any other law of this State. This Act is cumulative to any such powers. This Act shall be construed to provide a complete, additional, and alternative method for doing the things authorized in other laws and shall be regarded as supplemental and additional to powers conferred by other laws. It is also the intent of the legislature that all of the activities and services of the Hawaii health systems corporation be continued without interruption by the Maui regional health systems corporation during the implementation of this Act.

Part I

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTERMAUI REGIONAL HEALTH SYSTEMS CORPORATIONPART I. GENERAL PROVISIONS

§   -1 Definitions. As used in this chapter, unless the context otherwise requires:

"Consumer" means any individual who may utilize a Maui regional health systems facility for health services and is not a provider.

"Corporation" means the body corporate and politic known as the Maui regional health systems corporation.

"Corporation board" means the board of directors of the corporation.

"Health systems assets" means all property or rights in property, real, personal and mixed, tangible or intangible, existing on June 30, 2002, used by or accruing to the Hawaii health systems corporation in the normal course of its operations.

"Health systems liabilities" means, without limitation, all debts or other obligations, contingent or certain, owing on June 30, 2002, by the Hawaii health systems corporation in the normal course of its operations.

"Maui health facility" means only Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital.

"Provider" means any supplier of medical or health care goods and services of the type provided at a Maui regional health systems facility.

§   -2 Maui regional health systems corporation; transfer of health systems assets and health systems liabilities. (a) There is established the Maui regional health systems corporation, which shall be a public body corporate and politic and an instrumentality and agency of the State. The corporation shall be placed within the department of health for the administrative purposes specified in section 26-35(6) only.

(b) The corporate organization shall consist of only the Maui health facilities, namely, Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital.

(c) On July 1, 2002, all health systems assets and health systems liabilities of the Hawaii health systems corporation, with respect only to Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital shall be transferred to the Maui regional health systems corporation.

§   -3 Corporation board. (a) The corporation shall be governed by a nine-member board of directors, which shall carry out the duties and responsibilities of the corporation.

(b) Corporation board members shall be appointed by the governor, subject to confirmation by the senate pursuant to section 26-34, from lists of nominees selected by the Maui public health facility management advisory committee. Corporation board members shall include medical and health care providers, consumers, and knowledgeable individuals in other appropriate areas such as business and law; provided that:

(1) At least one member shall be a physician with active medical staff privileges at one of the Maui health facilities;

(2) At least three members shall be consumers; and

(3) One member shall be the director of health or the director's designee, who shall serve as an ex officio, voting member.

Members shall serve for a term of three years; provided that of the members initially appointed, except for the director of health, two members shall serve for one year and three members shall serve for two years. Any vacancy shall be filled in the same manner provided for the original appointments. The corporation board shall elect its own chair from among its members.

(c) Members shall serve without compensation but may be reimbursed for actual expenses, including travel expenses incurred in the performance of their duties.

(d) Any member of the corporation board may be removed for cause by the governor or for cause by vote of a two-thirds majority of the board's members then in office. For purposes of this section, cause shall include without limitation:

(1) Malfeasance in office;

(2) Failure to attend regularly called meetings;

(3) Sentencing for conviction of a felony, to the extent allowed by section 831-2; or

(4) Any other cause that may render a member incapable or unfit to discharge the duties required under this chapter.

Filing nomination papers for elective office or appointment to elective office, or conviction of a felony consistent with section 831-3.1, shall automatically and immediately disqualify a corporation board member from office.

§   -4 Corporation board meetings. (a) The corporation board shall meet no fewer than four times a year. All meetings of the corporation board shall be subject to chapter 92, except that in addition to matters exempted pursuant to law, the corporation board may elect to hold an executive meeting for the consideration of any matters set forth in section     -6.

(b) All business of the corporation board shall be conducted at a regular or special meeting at which a quorum is present, consisting of at least a majority of the directors then in office. Any action of the corporation board shall require the affirmative vote of a majority of those present and voting at the meeting; except that a vote of two-thirds of the members of the corporation board then in office shall be required for any of the following actions:

(1) Removal by the corporation board of one of its members;

(2) Amendment by the corporation board of its bylaws;

(3) Hiring or removing the chief executive officer of the corporation; and

(4) Any other actions as provided by the corporation bylaws.

§   -5 Disclosure of interests. All corporation board members and employees of the corporation shall be subject to chapter 84.

§   -6 Records. The corporation shall be subject to the requirements of chapter 92F, except that the following categories of government records shall not be required to be disclosed:

(1) Applications for credentials or staff privileges at any of the corporation's medical facilities, records from peer review proceedings, and medical records; and

(2) Marketing strategies, strategic plans, evaluations, assessments, negotiations, or rates and charges, the disclosure of which would raise the cost of procurement or give a manifestly unfair advantage to any competitor or to any person or entity seeking to do business or proposing to enter into an agreement with the corporation or any of its facilities.

Any person denied access to these government records shall have available the remedies specified in sections 92F-15 and 92F-15.5. Government records protected from disclosure by this section shall be subject to the interagency disclosure provisions of section 92F-19. Section 624-25.5 shall apply to this part notwithstanding anything to the contrary contained in this section.

§   -7 Duties and powers of the corporation. (a) Notwithstanding any other law to the contrary, the corporation shall have and exercise the following duties and powers:

(1) Developing its own policies, procedures, and rules necessary or appropriate to plan, operate, manage, and control the system of public Maui health facilities and services without regard to chapter 91;

(2) Evaluating the need for Maui health facilities and services;

(3) Entering into and performing any contracts, leases, cooperative agreements, or other transactions whatsoever that may be necessary or appropriate in the performance of its purposes and responsibilities, and on terms it 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, or corporation, whether operated on a for profit or not for profit basis;

provided that the transaction furthers the public interest;

(4) Conducting activities and entering into business relationships as the corporation board deems necessary or appropriate, including but not limited to:

(A) Creating nonprofit corporations, including charitable fund-raising foundations, to be controlled wholly by the corporation 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:

(i) Any corporation, venture, or relationship entered into under this section furthers the public interest; and

(ii) This paragraph shall not be construed to authorize the corporation to abrogate any responsibility or obligation under paragraph (15);

(5) Participating in and developing prepaid health care service and insurance programs and other alternative health care delivery programs for the Maui health facilities, including programs involving the acceptance of capitated payments or premiums that include the assumption of financial and actuarial risk;

(6) Executing, in accordance with all applicable bylaws, rules, and laws, all instruments necessary or appropriate in the exercise of any of the corporation's powers;

(7) Preparing and executing all corporation budgets, policies, and procedures;

(8) Setting rates and charges for all services provided by the corporation through the Maui health facilities without regard to the public notice and public hearing requirements of chapter 91;

(9) Developing a corporation-wide hospital personnel system that is subject to chapters 76 and 89;

(10) Developing the corporation's capital and strategic plans;

(11) Suing and being sued; provided that the corporation shall enjoy the same sovereign immunity available to the State;

(12) Making and altering corporation board bylaws for its organization and management without regard to the public notice and public hearing requirements of chapter 91;

(13) Adopting rules, without regard to the public notice and public hearing requirements of chapter 91, governing the exercise of its 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 chief executive officer 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;

(15) Issuing revenue bonds subject to the approval of the legislature; provided that all revenue bonds shall be issued pursuant to part III, chapter 39;

(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;

(17) Pledging or assigning all or any part of the receipts and revenues of the corporation for purposes of meeting bond or health systems liabilities;

(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;

(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; provided that the corporation legally holds or controls the property in its own name; and provided further that the corporation shall not sell, assign, lease, hypothecate, mortgage, pledge, give, or dispose of a substantial portion of its property of any nature;

(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;

(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 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;

(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;

(24) Providing health and medical services for the public in the county of Maui and on Lanai directly or by agreement or lease with any person, firm, private or public corporation or association through or in the Maui health facilities or otherwise;

(25) Approving medical staff bylaws, rules, and medical staff appointments and reappointments for all Maui health facilities, including without limitation, determining the conditions under which a health professional may be extended the privilege of practicing within a Maui health facility, and adopting and implementing reasonable rules, without regard to the public notice and public hearing requirements of chapter 91, for the credentialing and peer review of all persons and health professionals within the facility;

(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; provided the investment assists the corporation 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 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 and may issue indemnity bonds or may pledge securities as may be required by the corporation board.

(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 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 moneys, may be secured in the same manner as moneys of the corporation, and all banks and trust companies are authorized to give security for the deposits;

(27) Entering into any agreement with the State, including contracts for the provision of goods, services, and facilities in support of the corporation's programs, and contracting for the provision of services to or on behalf of the State;

(28) Having a seal and altering the same at pleasure;

(29) Waiving, by means that the corporation deems appropriate, the exemption from federal income taxation of interest on the corporation's 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, but not subject to chapter 103D. However, where possible, the corporation is encouraged to use the provisions of chapter 103D; provided that the use of one or more provisions of chapter 103D shall not constitute a waiver of the exemption of chapter 103D and shall not subject the corporation to any other provision of chapter 103D;

(31) Calling upon the attorney general for any legal services that the corporation may require; and

(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.

(b) The corporation shall not be subject to chapters 36 to 38, 40, and 41D, except as otherwise provided in this chapter.

§   -8 Chief executive officer; exempt positions. (a) The corporation board may appoint, exempt from chapter 76 and section 26-35(4), a chief executive officer of the corporation whose salary shall be set by the corporation board. The chief executive officer may also appoint up to five other personnel, exempt from chapters 76 and 89, to work directly for the chief executive officer and the corporate board.

(b) The corporation board or its designee may discharge its exempt personnel with or without cause; provided that removal without cause shall not prejudice any contract rights of personnel.

§   -9 Hiring of attorneys. The corporation may employ or retain any attorney, by contract or otherwise, for the purpose of representing the corporation in any litigation, rendering legal counsel to the corporation, or drafting legal documents for the corporation.

§   -10 Maui public health facility management advisory committee. (a) There shall be established within the corporation, a public health facility management advisory committee to consist of nine members to be appointed by the chief executive officer of the corporation with the advice of the hospital administrators of the Maui health facilities. Members shall serve for a term of three years. The management advisory committee shall include medical and health care providers, consumers, and knowledgeable individuals in other appropriate areas such as business and law; provided that at least one member shall be a physician with active medical staff privileges at one of the region's public health facilities. At least three members of the committee shall be consumers. The committee shall select its own chairperson and vice chairperson and may adopt rules that it may consider necessary for the conduct of its business.

(b) Members of the committee shall serve without compensation, but may be reimbursed for traveling expenses incurred in the performance of their duties. The corporation shall provide for the necessary expenses of the committees; provided that no expenses may be incurred without prior authorization by the chief executive officer.

(c) The committee shall advise the chief executive officer on matters concerning the formulation of operational and capital improvement budgets, and the planning, construction, improvement, maintenance, and operation of the Maui health facilities. The committee shall select nominees for appointment to the corporation board by the governor pursuant to section    -3. Nothing in this section shall be construed as precluding or preventing the committee from coordinating its efforts and activities with the facility administrators in the Maui regional health systems corporation.

(d) The committee may prepare a report for inclusion with the corporation's annual report and audit, which shall include, but not be limited to, comments and analyses on the corporation's operational and capital improvement budgets.

§   -11 Executive branch; noninterference. Notwithstanding any other law to the contrary, the governor and executive branch agencies shall limit their responsibilities to that of review and oversight when the corporation receives general funds from the State to subsidize the operating budgets of deficit facilities. The governor and executive branch agencies shall not interfere with the systemic change, capacity building, advocacy, budget, personnel, system plan development, or plan implementation activities of the corporation. The governor and executive branch agencies shall not interfere with the ability of the corporation to function as a multiple facility, public hospital system, delivering health care services to the residents of Maui and Lanai.

PART II. BUDGET AND FINANCE

§   -21 Fiscal provisions. (a) There is created in the state treasury a special fund to be known as the Maui regional health systems special fund into which shall be deposited all fees, proceeds, reimbursements, and the like owed to or received by the corporation and its facilities, except as herein provided. The special fund shall be used solely to fulfill the purposes outlined in this chapter.

The corporation may establish and maintain within its special fund, accounts that may be necessary and appropriate to carry out its purposes and responsibilities.

The corporation may provide reasonable reserves for any of the following purposes:

(1) Insurance deductibles;

(2) The improvement, replacement, or expansion of its facilities or services;

(3) The securing of the corporation's bonds, notes, or other instruments of indebtedness; or

(4) Any other purpose it deems necessary or appropriate in the performance of its purposes and responsibilities.

(b) The corporation board shall develop annual operating and capital budgets for each Maui health facility. The corporation shall develop budgetary guidelines, and may allocate to each facility reasonable corporation administrative costs, including funds determined by the corporation to be needed from or provided to each facility to:

(1) Repay corporation debts;

(2) Provide subsidies to any facility determined to be unable to fund from within that facility's programs and services deemed essential to community needs; and

(3) Maintain appropriate reserves.

(c) The corporation shall develop annual corporation operating and capital budgets, taking into account anticipated surpluses from or subsidies to the facilities pursuant to the annual guidelines described in this section, accumulated corporation reserves and accounts, subsidies, if any, that are determined to be needed from the general fund, and other sources of corporation-wide income as may be identified.

(d) The corporation may share in any facility's surplus and may offset any facility's deficits. Obligations undertaken by a facility shall be paid only from funds of that facility, unless the corporation board or its authorized agent explicitly agrees to guarantee the obligation.

(e) In accordance with each annual facility budget, each facility of the corporation shall:

(1) Bill and collect for its services;

(2) Maintain bank accounts; and

(3) Pay for needed personnel, supplies, equipment, and other operational and capital expenditures.

(f) The corporation may elect to manage its own capital improvement project and funds, either directly or indirectly by contract; provided that annual reports of the project moneys are provided to the governor and legislature.

(g) The corporation board may hold public informational meetings on its budget. Representatives of the Maui county government, state government, or any other person having an interest in the budget, shall have the right to be heard at the meetings.

§   -22 Annual audit and report; disclosure of revenue projections. (a) The corporation shall engage a certified public accountant to conduct an annual audit of its financial affairs, books, and records in accordance with generally accepted accounting principles. The corporation shall submit to the governor and the legislature within one-hundred-fifty days after the close of the corporation's fiscal year, a report that shall include the audited financial report for that fiscal year.

(b) In addition to the submittal of the audit required under subsection (a), the corporation shall submit a report to the legislature at least twenty days prior to the convening of each regular session that shall include:

(1) The projected revenues for each Maui health facility;

(2) A list of all proposed capital improvement projects planned for implementation during the following fiscal year; and

(3) All reports submitted by the Maui public health facility management advisory committee pursuant to section    -10(d).

§   -23 Exemption from taxation. The corporation shall not be required to pay assessments levied by any county, nor shall the corporation be required to pay state taxes of any kind.

§   -24 Budget oversight. The corporation's operating and capital improvement budgets shall not be subject to review or approval by the governor or any state agency, except where state general funds or capital improvement moneys are requested. If general funds or capital improvement moneys are requested, then the corporation shall include with its request, the proposed budget for which the funds or moneys are to be included. The corporation shall submit its budgets annually to the legislature for review and approval at least twenty days prior to the convening of the regular legislative session, beginning with the budget for fiscal year 2003-2004.

PART III. OTHER PROVISIONS

§   -31 Maintenance of services. (a) The corporation shall notify the legislature of any planned substantial reduction or elimination of direct patient care services.

(b) No substantial reduction or elimination of direct patient care services at any Maui health facility shall be undertaken by the corporation without the approval of the legislature.

(c) The legislature shall maintain review and oversight authority over the provision of direct patient care services provided at each Maui health facility and may intervene to counter or restrict any substantial reduction or elimination of patient care services."

SECTION 3. Chapter 76, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:

"§76-    Employees of the Maui regional health systems corporation. It is the intent of the legislature that the personnel of the Maui regional health systems corporation shall constitute a separately administered part of the system of personnel administration established by this chapter, unless specifically exempted by this chapter or any other law; provided that:

(1) The Maui regional health systems corporation shall have a status coequal with the executive branch of the State and with the several counties for purposes of:

(A) Developing a position classification plan;

(B) Formulating personnel rules; and

(C) Administering the Maui regional health systems corporation personnel system, including classification, reclassification, allocation, and reallocation of a particular position; the publication of a vacancy announcement; the examination of applicants; and the preparation of eligible lists;

(2) In the development of a position classification plan, the formulation of personnel rules, and the administration of the Maui regional health systems corporation personnel system, the corporation chief executive officer or designee shall consult with the director of human resources development;

(3) Any action of the corporation chief executive officer or designee including:

(A) The classification, reclassification, allocation, and reallocation of a particular position;

(B) The publication of a vacancy announcement;

(C) The examination of applicants;

(D) The preparation of an eligible list; and

(E) Appeals from suspensions, dismissals, and demotions not covered by collective bargaining;

may be appealed by any person, employee, or the exclusive bargaining unit representative to the Maui regional health systems corporation personnel appeals board. The board shall be composed of three members, one representative from the department of human resources development, one representative of the Maui regional health systems corporation, and one appropriate exclusive bargaining unit representative. Section 26-34 shall not apply to the members of the Maui regional health systems corporation personnel appeals board. The board shall sit as an appellate body on matters within the jurisdiction of the Maui regional health systems corporation with equal authority as the civil service commission established by section 26-5; and

(4) Nothing in chapter 76 shall be construed to require the approval of the governor or any executive agency for the Maui regional health systems corporation to establish such positions in the corporation as may be authorized and funded by the legislature.

§76-    Maui regional health systems corporation; powers and duties. All of the powers and duties assigned in parts I, IV, and V to the governor or the director of human resources development, with respect to the Maui regional health systems corporation, shall be assigned to the Maui regional health systems corporation chief executive officer or designee.

§76-    Civil service for the Maui regional health systems corporation. (a) There shall be a civil service system for the Maui regional health systems corporation. Except as otherwise specifically provided in this section, all of the provisions of part II shall apply to the Maui regional health systems corporation.

(b) All of the powers and duties assigned to the director of human resources development in part II, with respect to the Maui regional health systems corporation, shall be exercised by the Maui regional health systems corporation chief executive officer's designee.

(c) When applying part II to the Maui regional health systems corporation:

"Department" means the Maui regional health systems corporation;

"Director" means the corporation chief executive officer's designee;

"Governor" means the corporation chief executive officer; and

"State" means the Maui regional health systems corporation."

SECTION 4. Section 28-8.3, Hawaii Revised Statutes, is amended to read as follows:

1. By amending subsection (a) to read:

"(a) No department of the State other than the attorney general may employ or retain any attorney, by contract or otherwise, for the purpose of representing the State or the department in any litigation, rendering legal counsel to the department, or drafting legal documents for the department; provided that the foregoing provision shall not apply to the employment or retention of attorneys:

(1) By the public utilities commission, the labor and industrial relations appeals board, and the Hawaii labor relations board;

(2) By any court or judicial or legislative office of the State;

(3) By the legislative reference bureau;

(4) By any compilation commission that may be constituted from time to time;

(5) By the real estate commission for any action involving the real estate recovery fund;

(6) By the contractors license board for any action involving the contractors recovery fund;

(7) By the trustees for any action involving the travel agency recovery fund;

(8) By the office of Hawaiian affairs;

(9) By the department of commerce and consumer affairs for the enforcement of violations of chapters 480 and 485;

(10) As grand jury counsel;

(11) By the Hawaiian home lands trust individual claims review panel;

(12) By the Hawaii health systems corporation or any of its facilities;

(13) By the auditor;

(14) By the office of ombudsman;

(15) By the insurance division;

(16) By the University of Hawaii;

(17) By the Kahoolawe island reserve commission;

(18) By the division of consumer advocacy; [or]

(19) By the Maui regional health systems corporation or any of its facilities; or

[(19)] (20) By a department, in the event the attorney general, for reasons deemed by the attorney general good and sufficient, declines, to employ or retain an attorney for a department; provided that the governor thereupon waives the provision of this section."

2. By amending subsection (c) to read:

"(c) Every attorney employed by any department on a full-time basis, except an attorney employed by the public utilities commission, the labor and industrial relations appeals board, the Hawaii labor relations board, the office of Hawaiian affairs, the Hawaii health systems corporation, the department of commerce and consumer affairs in prosecution of consumer complaints, insurance division, the division of consumer advocacy, the Maui regional health systems corporation, the University of Hawaii, the Hawaiian home lands trust individual claims review panel, or as grand jury counsel, shall be a deputy attorney general."

SECTION 5. Section 37-74, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows: "(d) No appropriation transfers or changes between programs or agencies shall be made without legislative authorization; provided that:

(1) Authorized transfers or changes, when made, shall be reported to the legislature;

(2) Except with respect to appropriations to fund financing agreements under chapter 37D, the:

(A) University of Hawaii shall have the flexibility to transfer appropriated funds and positions for the operating cost category among programs, among cost elements in a program, and between quarters, as applicable; and [the]

(B) Hawaii health systems corporation and the Maui regional health systems corporation shall have the flexibility to transfer special fund appropriations among their respective community hospitals facilities as applicable; provided that the Hawaii health systems corporation and the Maui regional health systems corporation shall maintain the integrity and services of each individual facility within their own respective jurisdictions and shall not transfer appropriations out of any facility that would result in a reduction of services offered by the facility, with due regard for statutory requirements, changing conditions, the needs of the programs, and the effective utilization of resources; and

(3) The university shall account for each transfer implemented under this subsection in quarterly reports to the governor and annual reports at the end of each fiscal year to the legislature and the governor, which shall be prepared in the form and manner prescribed by the governor and shall include information on the sources and uses of the transfer."

SECTION 6. Act 253, Session Laws of Hawaii 2000, section 2, is amended by amending subsection (e) of section 26-5, Hawaii Revised Statutes, as follows:

"(e) Nothing in this section shall be construed as in any manner affecting the civil service laws applicable to the several counties, the judiciary, [or] the Hawaii health systems corporation, or the Maui regional health systems corporation, which shall remain the same as if this chapter had not been enacted."

SECTION 7. Act 253, Session Laws of Hawaii 2000, section 9, is amended by amending section 76-11, Hawaii Revised Statutes, as follows:

1. By amending the definition of "chief executive" to read:

""Chief executive" means the governor, the respective mayors, the chief justice of the supreme court, [and] the chief executive officer of the Hawaii health systems corporation[.], and the chief executive officer of the Maui regional health systems corporation. It may include the superintendent of education and the president of the University of Hawaii with respect to their employees on any mater that applies to employees in general, including employees who are not covered by this chapter."

2. By amending the definition of "employer" or "public employer" to read:

""Employer" or "public employer" means the governor in the case of the State, the respective mayors in the case of the counties, the chief justice of the supreme court in the case of the judiciary, the board of education in the case of the department of education, the board of regents in the case of the University of Hawaii, the Hawaii health systems corporation board in the case of the Hawaii health systems corporation, the Maui regional health systems corporation board in the case of the Maui regional health systems corporation, and any individual who represents one of the employers or acts in their interest in dealing with public employees. In the case of the judiciary, the administrative director of the courts shall be the employer in lieu of the chief justice for purposes which the chief justice determines would be prudent or necessary to avoid conflict."

3. By amending the definitions of "jurisdiction" and "legislative body" to read:

""Jurisdiction" means the State, the city and county of Honolulu, the county of Hawaii, the county of Maui, the county of Kauai, the judiciary, the department of education, the University of Hawaii, [and] the Hawaii health systems corporation[.]; and the Maui regional health systems corporation.

"Legislative body" means the legislature in the case of the State, including the judiciary, the department of education, the University of Hawaii, [and] the Hawaii health systems corporation[;], and the Maui regional health systems corporation; the city council in the case of the city and county of Honolulu; and the respective county councils in the case of the counties of Hawaii, Maui, and Kauai."

SECTION 8. Act 253, Session Laws of Hawaii 2000, section 28, is amended by amending subsection (c) of section 76-47, Hawaii Revised Statutes, to read as follows:

"(c) The merit appeals board shall adopt rules of practice and procedure consistent with section 76-14 and in accordance with chapter 91, except that, in the case of the judiciary [and], the Hawaii health systems corporation, and the Maui regional health systems corporation, the adoption, amendment, or repeal of rules shall be subject to the approval of their respective chief executives. The rules shall recognize that the merit appeals board shall sit as an appellate body and that matters of policy, methodology, and administration are left for determination by the director. The rules may provide for the sharing of specific expenses among the parties that are directly incurred as a result of an appeal as the merit appeals board deems would be equitable and appropriate, including but not limited to expenses for transcription costs or for services, including traveling and per diem costs, provided by persons other than the board members or permanent staff of the board. Official business of the merit appeals board shall be conducted in meetings open to the public, except as provided in chapter 92."

SECTION 9. Act 253, Session Laws of Hawaii 2000, section 93, is amended by amending section 89-2, Hawaii Revised Statutes, as follows:

1. By amending the definition of "jurisdiction" to read:

""Jurisdiction" means the State, the city and county of Honolulu, the county of Hawaii, the county of Maui, the county of Kauai, the judiciary, [and] the Hawaii health systems corporation[.], and the Maui regional health systems corporation."

2. By amending the definition of "employer" or "public employer" to read:

""Employer" or "public employer" means the governor in the case of the State, the respective mayors in the case of the counties, the chief justice of the supreme court in the case of the judiciary, the board of education in the case of the department of education, the board of regents in the case of the University of Hawaii, the Hawaii health systems corporation board in the case of the Hawaii health systems corporation, the Maui regional health systems corporation board in the case of the Maui regional health systems corporation, and any individual who represents one of these employers or acts in their interest in dealing with public employees. In the case of the judiciary, the administrative director of the courts shall be the employer in lieu of the chief justice for purposes which the chief justice determines would be prudent or necessary to avoid conflict."

3. By amending the definition of "legislative body" to read:

""Legislative body" means the legislature in the case of the State, including the judiciary, the department of education, the University of Hawaii, [and] the Hawaii health systems corporation[;], and the Maui regional health systems corporation; the city council, in the case of the city and county of Honolulu; and the respective county councils, in the case of the counties of Hawaii, Maui, and Kauai."

SECTION 10. Act 253, Session Laws of Hawaii 2000, section 96, is amended by amending subsection (d) of section 89-6, Hawaii Revised Statutes, to read as follows:

"(d) For the purpose of negotiating a collective bargaining agreement, the public employer of an appropriate bargaining unit shall mean the governor together with the following employers:

(1) For bargaining units (1), (2), (3), (4), (9), (10), and (13), the governor shall have six votes and the mayors, the chief justice, [and] the Hawaii health systems corporation board, and the Maui regional health systems board shall each have one vote if they have employees in the particular bargaining unit;

(2) For bargaining units (11) and (12), the governor shall have four votes and the mayors shall each have one vote;

(3) For bargaining units (5) and (6), the governor shall have three votes, the board of education shall have two votes, and the superintendent of education shall have one vote;

(4) For bargaining units (7) and (8), the governor shall have three votes, the board of regents of the University of Hawaii shall have two votes, and the president of the University of Hawaii shall have one vote. Any decision to be reached by the applicable employer group shall be on the basis of simple majority, except when a bargaining unit includes county employees from more than one county. In such case, the simple majority shall include at least one county."

SECTION 11. Act 253, Session Laws of Hawaii 2000, section 113, is amended as follows:

1. By amending the definition of "jurisdiction" to read:

""Jurisdiction" means the city and county of Honolulu, the county of Hawaii, the county of Maui, the county of Kauai, the judiciary, the Hawaii health systems corporation, the Maui regional health systems corporation, the office of Hawaiian affairs, and the legislative branches of the State and county governments."

2. By amending the definition of "state executive branch" to read:

""State executive branch" includes the department of education and the University of Hawaii, but excludes the Hawaii health systems corporation and the Maui regional health systems corporation, which [is] are considered [a] separate [jurisdiction] jurisdictions under this part."

SECTION 12. Act 253, Session Laws of Hawaii 2000, section 122, is amended to read as follows:

"SECTION 122. Optional participation by a county, the judiciary, the Hawaii health systems corporation, the Maui regional health systems corporation, the office of Hawaiian affairs, or the legislative branch of the State or a county. The city and county of Honolulu, the county of Hawaii, the county of Kauai, the county of Maui, the judiciary, the Hawaii health systems corporation, the Maui regional health systems corporation, the office of Hawaiian affairs, or the legislative branch of the State or a county may opt to provide the special retirement incentive benefit under section 115 to their respective employees under a workforce restructuring plan; provided that the special retirement incentive is in lieu of any voluntary severance benefit that may be offered under its plan and is consistent with all of the provisions in section 115. All references to the State in section 115 shall include the jurisdiction opting to provide the special retirement incentive benefit. The chief executive or other appropriate authority of the respective jurisdictions shall ensure that approval of its respective legislative body is obtained, if required, before offering the special retirement incentive under section 115."

SECTION 13. It is the intent of this Act that all rights, powers, functions, assets, and operations of the Hawaii health systems corporation, with respect only to Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital, including the facilities themselves, be conveyed to the Maui regional health systems corporation, such that all of the activities and services of Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital be continued without interruption by the Maui regional health systems corporation. This Act shall be construed with this intent.

All rights, powers, functions, and duties of the Hawaii health systems corporation, with respect only to Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital, are transferred to the Maui regional health systems corporation on July 1, 2002.

The assets, including but not limited to hospital funds relating to Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital, and the facilities themselves, shall be conveyed to the Maui regional health systems corporation in its own name by the Hawaii health systems corporation on July 1, 2002.

Effective on July 1, 2002, and thereafter, the Maui regional health systems corporation shall assume the responsibility of the Hawaii health systems corporation, with respect only to Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital, for all contracts, agreements, and leases for commodities, services, property, and supplies utilized by the Hawaii health systems corporation, all of which shall be transferred to the Maui regional health systems corporation including real property leases.

All officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act.

No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possesses the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

An officer or employee of the State who does not have tenure and who may be transferred or appointed to a civil service position as a consequence of this Act, shall become a civil service employee without the loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefits or privileges and without the necessity of examination; provided that such officer or employee possesses the minimum qualifications for the position to which transferred or appointed.

If an office or position held by an officer or employee having tenure is abolished, the officer or employee shall not thereby be separated from public employment, but shall remain in the employment of the executive branch of the State with the same pay and classification and shall be transferred to some other office or position for which the officer or employee is eligible under the personnel laws of the State, provided that minimum qualifications are met.

Any officer or employee transferred to the Maui regional health systems corporation pursuant to this section who is a member of or benefits under any existing pension or retirement fund or system shall continue to have all rights, privileges, obligations, and status with respect to such fund or system as are now prescribed by law, but during the period of employment by the Maui regional health systems corporation, all contributions to such funds or system to be paid by the employer on account of such officer or employee shall be paid by the Maui regional health systems corporation.

SECTION 14. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the Hawaii health systems corporation relating to the functions transferred to the Maui regional health systems corporation shall be transferred with the functions to which they relate.

SECTION 15. (a) The Maui regional health systems corporation, in carrying out its duties and responsibilities, may enter into appropriate agreements with the Hawaii health systems corporation, if necessary, to utilize the Maui health facilities and real property under the control of the Hawaii health systems corporation prior to July 1, 2002. Each agreement shall require compensation of a nominal amount for the use of any facilities or real property. Until the agreements are finalized, the Maui regional health systems corporation shall be entitled to use the facilities and real property of the Hawaii health systems corporation, with respect only to Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital, for hospital and health care purposes.

(b) State agencies shall continue to provide to the Maui regional health systems corporation, without charge until December 31, 2002, services that the state agencies provided to the Hawaii health systems corporation until the Maui regional health systems corporation enters into a written contract with the state agencies or chooses to terminate the services.

(c) The Maui regional health systems corporation shall assume and honor all collective bargaining agreements applicable to employees of the Hawaii health systems corporation, with respect only to Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital, as of July 1, 2002. Upon expiration of those agreements, the Maui regional health systems corporation, as appropriate and allowable, may negotiate collective bargaining agreements or sub-agreements under chapter 89, Hawaii Revised Statutes, to address its needs for efficiency and effectiveness.

(d) On July 1, 2002, the Maui regional health systems corporation shall assume and honor all responsibilities and obligations transferred to it from the Hawaii health systems corporation, with respect only to Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital, regarding the imposition of rates, rents, fees, and charges for the use of public health facilities pursuant to section 323-70, Hawaii Revised Statutes. In no way shall this Act be construed as allowing either the Maui regional health systems corporation or the Hawaii health systems corporation to abrogate these responsibilities and obligations.

Part II

SECTION 16. Section 323F-2, Hawaii Revised Statutes, is amended to read as follows:

"[[]§323F-2[]] Hawaii health systems corporation. (a) There is established the Hawaii health systems corporation, which shall be a public body corporate and politic and an instrumentality and agency of the State. The corporation shall be placed within the department of health for the administrative purposes specified in section 26-35(6) only.

(b) The corporate organization shall be divided into [five] four regions, as follows:

(1) The city and county of Honolulu;

(2) The county of Kauai;

[(3) The county of Maui, except the county of Kalawao;

(4)] (3) The eastern section of the county of Hawaii, comprising the Puna district, north Hilo district, south Hilo district, Hamakua district, and Kau district; and

[(5)] (4) The western section of the county of Hawaii, comprising the north Kohala district, south Kohala district, north Kona district, and south Kona district;

and shall be identified as regions I, II, III, and IV[, and V], respectively.

(c) Pursuant to chapter      , Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital are not health facilities within the corporation and this chapter shall not apply to these three facilities."

SECTION 17. Section 323F-3, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) The corporation shall be governed by [a thirteen-member] an eleven-member board of directors which shall carry out the duties and responsibilities of the corporation.

(b) [Twelve] Ten members of the corporation board shall be appointed by the governor as follows:

(1) One member from region I who resides in the city and county of Honolulu;

(2) One member from region II who resides in the county of Kauai;

    [(3) One member from region III who resides in the county of Maui;

(4)] (3) One member from region [IV] III who resides in the eastern section of the county of Hawaii;

    [(5)] (4) One member from region [V] IV who resides in the western section of the county of Hawaii;

    [(6)] (5) One member from region II who resides in the county of Kauai or [from region III] who resides in the district of Hana [or on the island of Lanai]; provided that in no event shall the member be appointed from the same region for two consecutive terms; and

    [(7)] (6) [Six] Five at-large members who reside in the State.

The [thirteenth] eleventh member shall be the director of health or the director's designee, who shall serve as an ex officio, voting member.

Appointments to the corporation board shall be made by the governor, subject to confirmation by the senate pursuant to section 26-34. Prior to the transfer date, the public health facility management advisory committees appointed pursuant to section 323-66 for each county may recommend names to the governor for each position on the corporation board designated for a region which corresponds to its county. After the transfer date, the public health facility management advisory committees appointed pursuant to section 323F-10 for each region may make such recommendations to the governor. The appointed board members shall serve for a term of four years; provided that upon the initial appointment of the first ten members:

(1) Two at-large members shall be appointed for a term of two years;

(2) Three at-large members shall be appointed for a term of three years; and

(3) Five regional members shall be appointed for a term of four years.

Any vacancy shall be filled in the same manner provided for the original appointments. The corporation board shall elect its own chair from among its members."

SECTION 18. All acts passed prior to or during this Regular Session of 2001, whether enacted before or after the passage of this Act shall be interpreted to conform to this Act, unless the acts specifically provide that this Act is being amended. In so far as this chapter is inconsistent with the provisions of any other law, this chapter shall be controlling.

SECTION 19. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 20. This Act shall take effect on July 1, 2002 and sections 1, 2, 3, 13, 14, 15, 18, 19, and 20 shall be repealed on June 30, 2007; provided that:

(1) Section 28-8.3, Hawaii Revised Statutes, as amended in section 4, section 37-74, Hawaii Revised Statutes, as amended in section 5, sections 26-5, 76-11, 76-47, 89-2, and 89-6, Hawaii Revised Statutes, as amended in sections 6 through 10, sections 113 and 122 of Act 253, Session Laws of Hawaii 2000, as amended in sections 11 and 12, and sections 323F-2 and 323F-3, Hawaii Revised Statutes, as amended by sections 16 and 17 of this Act, shall be reenacted in the form in which they read on June 30, 2001;

(2) The Maui regional health systems corporation shall be dissolved on June 30, 2007;

(3) All health systems assets and health systems liabilities of the Maui regional health systems corporation that are transferred by this Act, with respect to Kula Hospital, Lanai Community Hospital, and Maui Memorial Hospital, shall be transferred back to the Hawaii health systems corporation on June 30, 2007; and

(4) All related transfers of rights, powers, functions, and duties, officers, appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property that are transferred by this Act shall be transferred back to the Hawaii health systems corporation on June 30, 2007.

INTRODUCED BY:

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