Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, 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 exempt existing hospitals from the certificate of need requirement for a plan review use permit.

The Department of Health, Healthcare Association of Hawaii, The Queen's Medical Center, and Hawaii Pacific Health testified in support of this measure.

Your Committee finds that current law has been interpreted to require health care organizations, including existing hospitals, to obtain a certificate of need (CON) before being issued a county plan review use permit (PRU) for the construction of incremental projects or capital improvements. The PRU is a preliminary planning tool that provides a conceptual framework for construction five to ten years in the future. Since many of the plans contained in a PRU may never go forward, or are revised significantly as a plan evolves, the CON requirement for a PRU forces health care facilities to obtain CONs unnecessarily or to submit multiple CON applications to account for plan revisions.

Your Committee further finds that the PRU process is more suitable to the planning of new, total health care systems than to the construction of incremental projects in existing facilities. Therefore, this measure exempts existing hospitals from the CON requirement for a PRU, but requires that a CON be obtained before the issuance of a building permit.

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. 2539, H.D. 2, and recommends that it pass Third Reading.