Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Health, to which was referred H.B. No. 2539, H.D. 2, entitled:

begs leave to report as follows:

The purpose of this measure is to amend the certificate of need law to provide that for an existing hospital, a certificate of need (CON) or exemption from a CON is not required until the hospital applies for a building permit.

Testimony in support of this measure was received from the State Health Planning and Developmental Agency, Queen's Medical Center, Healthcare Association of Hawaii, Castle Medical Center, Hawaii Pacific Health, and Kusao & Kurahashi, Inc.

Your Committee finds that current law requires health care organizations to obtain a CON prior to receiving any State or county license or permit. The City and County of Honolulu Corporation Counsel has determined that any existing hospital must obtain a CON prior to receiving a plan review use (PRU) permit. A PRU is a long-range planning tool that provides a conceptual framework for construction five to ten years into the future. While the PRU is a long-range planning tool, the CON is focused on projects that will be implemented within a year of approval. These are two distinct processes, and both are not needed for the same project.

This measure will exempt existing hospitals from the requirement of obtaining a CON for a PRU, removing the unnecessary burden on existing hospitals and ensuring that the purpose of a CON will be maintained.

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2539, H.D. 2, and recommends that it pass Second Reading and be referred to the Committee on Commerce, Consumer Protection and Housing.