SB974

SECTION 1. The legislature finds that according to the American Hospital Association, one third of the nation's hospitals already operate in the red. High additional costs are being incurred by hospitals ensuring essential health care services such as emergency on-call coverage, emergency transport services, and the struggle to continue services provided by our state's rural hospitals. Between 2000 and 2004, hospitals reduced essential health care services as they faced volume increases, higher costs, liability concerns, and low or no payment for trauma services.

While Hawaii has been a leader in providing health care insurance to permanent employees who work a minimum of twenty hours per week, pursuant to the Prepaid Health Care Act, there are many who are unable to obtain such coverage. Employers have been hit hard by the high cost of health care and, therefore, may employ more people at less than twenty hours per week to avoid having to pay health insurance coverage. This may save money for the employer in the short-term, but the long-term repercussions will have serious health and economic effects on us all.

It is imperative that health care coverage be provided to all, regardless of age, race, ethnicity, income, or health status who are ineligible for any state or federal health care program. Health care coverage provided to those in need will relieve a significant amount of strain from our hospitals by facilitating:

(1) Reimbursements for health care services provided;

(2) Regular health maintenance through a primary care physician for acute or chronic health conditions; and

(3) A reduction in costly emergency room visits.

The purpose of this Act is to earmarks general excise tax revenues generated by health care services to provide:

(1) Subsidies to support hospital emergency on-call services;

(2) Emergency transport services;

(3) Rural hospitals health care services;

(4) Affordable health care for part-time workers who are ineligible for employer provided health insurance under the Prepaid Health Care Act; and

(5) Services for people without health insurance.

SECTION 2. Chapter 321, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§321‑ Hawaii hospital support system; first response health care services special fund. (a) There is established within the department, the first response health care services special fund into which shall be deposited legislative appropriations from the essential health care services special fund.

(b) Moneys in the first response health care services special fund shall be expended by the department for the purpose of supporting:

(1) Hospitals in meeting their needs for securing emergency on-call services;

(2) Emergency transport services; and

(3) Rural hospitals in providing health care services.

(c) The department shall submit a report to the legislature, no fewer than twenty days prior to the convening of each regular session, beginning with the regular session of 2008, which includes the:

(1) Status of the first response health care services special fund;

(2) Amount of moneys taken in by and expended from the fund; and

(3) The purposes for which these amounts were expended.

(d) The director shall adopt rules in accordance with chapter 91 to carry out the purposes of this section."

SECTION 3. Chapter 346, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§346- Support for part-time workers and the uninsured; essential health care services special fund. (a) There is established within the department the essential health care services special fund into which shall be deposited state general excise tax revenues generated by health care services, as defined under section 237-31, and collected each fiscal year under section 237-31.

(b) Moneys in the fund shall be expended by the department to support the operators of adult residential care homes in meeting their insurance liability needs by:

(1) Subsidizing payments of high-deductible health insurance premiums for employees who are ineligible for employer-provided health insurance pursuant to chapter 393; and

(2) Assisting individuals who do not qualify for any other state-funded health care insurance assistance program in acquiring adequate health care insurance coverage.

(c) The department shall submit a report to the legislature no fewer than twenty days prior to the convening of each regular session, beginning with the regular session of 2008, that includes the:

(1) Status of the health care subsidies special fund; and

(2) Amount of moneys taken in by and expended from the fund; and

(3) The purposes for which these amounts were expended.

(d) The director shall adopt rules in accordance with chapter 91 to carry out the purposes of this section, including criteria for payment of premiums."

SECTION 4. Section 36-27, Hawaii Revised Statutes, is amended to read as follows:

"§36-27 Transfers from special funds for central service expenses. Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) State educational facilities improvement special fund;

(5) Convention center enterprise special fund under section 201B-8;

(6) Special funds established by section 206E-6;

(7) Housing loan program revenue bond special fund;

(8) Housing project bond special fund;

(9) Aloha Tower fund created by section 206J-17;

(10) Funds of the employees' retirement system created by section 88-109;

(11) Unemployment compensation fund established under section 383-121;

(12) Hawaii hurricane relief fund established under chapter 431P;

(13) Hawaii health systems corporation special funds;

(14) Tourism special fund established under section 201B‑11;

(15) Universal service fund established under chapter 269;

(16) Integrated tax information management systems special fund under section 231-3.2;

(17) Emergency and budget reserve fund under section 328L‑3;

(18) Public schools special fees and charges fund under section 302A-1130(f);

(19) Sport fish special fund under section 187A-9.5;

(20) Neurotrauma special fund under section 321H-4;

(21) Deposit beverage container deposit special fund under section 342G-104;

(22) Glass advance disposal fee special fund established by section 342G-82;

(23) Center for nursing special fund under section [[]304A-2163[]];

(24) Passenger facility charge special fund established by section 261-5.5;

(25) Solicitation of funds for charitable purposes special fund established by section 467B-15;

(26) Land conservation fund established by section 173A-5;

(27) Court interpreting services revolving fund under section 607-1.5;

(28) Trauma system special fund under section 321-22.5;

(29) Hawaii cancer research special fund;

(30) Community health centers special fund; [~~and~~]

(31) Emergency medical services special fund[[];

(32) First response health care services special fund; and

(33) Essential health care services special fund;

shall deduct five per cent of all receipts of all other special funds, which [~~deduction~~] shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year.[]]"

SECTION 6. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"§36-30 Special fund reimbursements for departmental administrative expenses. (a) Each special fund, except the:

(1) Transportation use special fund established by section 261D-1;

(2) Special out-of-school time instructional program fund under section 302A-1310;

(3) School cafeteria special funds of the department of education;

(4) Special funds of the University of Hawaii;

(5) State educational facilities improvement special fund;

(6) Special funds established by section 206E-6;

(7) Aloha Tower fund created by section 206J-17;

(8) Funds of the employees' retirement system created by section 88-109;

(9) Unemployment compensation fund established under section 383-121;

(10) Hawaii hurricane relief fund established under chapter 431P;

(11) Convention center enterprise special fund established under section 201B-8;

(12) Hawaii health systems corporation special funds;

(13) Tourism special fund established under section 201B‑11;

(14) Universal service fund established under chapter 269;

(15) Integrated tax information management systems special fund under section 231-3.2;

(16) Emergency and budget reserve fund under section 328L‑3;

(17) Public schools special fees and charges fund under section 302A-1130(f);

(18) Sport fish special fund under section 187A-9.5;

(19) Neurotrauma special fund under section 321H-4;

(20) Center for nursing special fund under section [[]304A-2163[]];

(21) Passenger facility charge special fund established by section 261-5.5;

(22) Court interpreting services revolving fund under section 607-1.5;

(23) Trauma system special fund under section 321-22.5;

(24) Hawaii cancer research special fund;

(25) Community health centers special fund; [~~and~~]

(26) Emergency medical services special fund[[];

(27) First response health care services special fund; and

(28) Essential health care services special fund;

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned.[]]"

SECTION 7. Section 237-31, Hawaii Revised Statutes, is amended to read as follows:

"§237‑31 Remittances[.]; disposition. All remittances of taxes imposed by this chapter shall be made by money, bank draft, check, cashier's check, money order, or certificate of deposit to the office of the department of taxation to which the return was transmitted. The department shall issue its receipts therefore to the taxpayer and shall pay the moneys into the state treasury as a state realization, to be kept and accounted for as provided by law; provided that:

(1) The sum from all general excise tax revenues realized by the State that represents the difference between $90,000,000 and the proceeds from the sale of any general obligation bonds authorized for that fiscal year for the purposes of the state educational facilities improvement special fund shall be deposited in the state treasury in each fiscal year to the credit of the state educational facilities improvement special fund for public school capital improvement program needs; [~~and~~]

(2) A sum, not to exceed $5,000,000, from all general excise tax revenues realized by the State shall be deposited in the state treasury in each fiscal year to the credit of the compound interest bond reserve fund[.];

(3) Of the general excise tax revenues generated by health care services and collected each fiscal year by the department of taxation under section 237-31, with the exception of the county surcharge on state tax authorized by section 46-16.8, a maximum of $100,000,000 annually shall be deposited to the credit of the essential health care services special fund, established pursuant to section 346- .

For purposes of this paragraph, "health care services" means the following medical services:

(1) Preventive care;

(2) Emergency care;

(3) Inpatient/outpatient hospital and physician care;

(4) Diagnostic laboratory services;

(5) Diagnostic and therapeutic radiological services; and

(6) Services purchased from:

(A) Dentists;

(B) Chiropractors;

(D) Psychologists;

(E) Physical therapists;

(F) Home nursing care;

(G) Nursing and care homes; and

(H) Counseling."

SECTION 7. There is appropriated out of the essential health care services special fund the sum of $45,000,000 or so much there of as may be necessary for fiscal year 2007-2008 and the same sum or so much thereof as may be necessary for fiscal year 2008-2009 to be placed into the first response health care services special fund.

SECTION 8. There is appropriated out of the first response health care services special fund the sum of $45,000,000 or so much thereof as may be necessary for fiscal year 2007-2008 and the same sum or so much thereof as may be necessary for fiscal year 2008-2009 to support:

(1) Hospitals in meeting their needs for securing emergency on-call services;

(2) Emergency transport services; and

(3) Rural hospitals in providing health care services.

The sums appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 9. There is appropriated out of the essential health care services special fund the sum of $55,000,000 or so much thereof as may be necessary for fiscal year 2007-2008 and the same sum or so much thereof as may be necessary for fiscal year 2008-2009 to:

(1) Subsidize payments of high-deductible health insurance premiums for employees who are ineligible for employer provided health insurance pursuant to chapter 393, Hawaii Revised Statutes; and

(2) Assist individuals who do not qualify for any other state funded health care insurance assistance program in acquiring adequate health care insurance coverage.

The sums appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect on July 1, 2007.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	974
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII