Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 1587 entitled:

begs leave to report as follows:

The purpose of this measure is to make prospective acquisitions of hospitals, without exception, subject to review and approval by the State Health Planning and Development Agency (SHPDA) and the Attorney General.

Testimony in support of this measure was received from SHPDA.

Your Committee finds that the current language of sections 323D-71 and 323D-72, Hawaii Revised Statutes, is ambiguous as to whether certain hospital acquisitions are subject to review and approval by SHPDA and the Attorney General. The ambiguity pertains to a recent situation of a possible merger among Kapiolani Hospital, Wilcox Hospital, and Straub Hospital, where one of the entities is a nonprofit.

This measure deletes from the definition of "acquisition" the exception for acquisition of a private nonprofit hospital by a nonprofit corporation, resulting in all acquisitions being subject to approval by SHPDA. Your Committee believes that there is no reasonable basis for the statutory exemption for acquisition of nonprofit hospitals, since all hospital acquisitions should be reviewed by SHPDA.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1587 and recommends that it pass Third Reading.