STAND. COM. REP. NO. 2490

Honolulu, Hawaii

RE:    S.B. No. 2703

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Health, to which was referred S.B. No. 2703 entitled:

"A BILL FOR AN ACT RELATING TO THE HOSPITAL LOAN GUARANTEE PROGRAM,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Establish a Hospital Loan Guarantee Program, and a temporary Hospital Loan Guarantee Trust Fund;

     (2)  Make an appropriation out of the general fund for deposit into the temporary Hospital Loan Guarantee Trust Fund; and

     (3)  Make an appropriation out of the temporary Hospital Loan Guarantee Trust Fund as loan guarantees.

     Your Committee received testimony in support of this measure from six individuals.  Testimony in opposition to this measure was received from the Department of Health.

     Under the program, the Department of Health may guarantee a portion of a loan by a private lender to a hospital that is experiencing short-term financial problems.  The Department may make a guarantee only if general funds are appropriated and deposited into the temporary Hospital Loan Guarantee Trust Fund established under this measure.

     Your Committee finds that hospitals are suffering from severe financial problems, which is a complicated situation engendered by complex economics.  This measure is intended to provide partial financial assistance from the State in critical financial times that may threaten the survival of a hospital.  This measure is by no means a solution to the problem and is not intended to solve the financial woes of hospitals.  Your Committee believes that better alternative long-term solutions need to be identified, explored, and if feasible, implemented for hospitals to become healthy themselves.

     Your Committee has amended this measure by changing the effective date to July 1, 2050, to continue discussions in this matter.

     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 S.B. No. 2703, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2703, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Health,

____________________________

DAVID Y. IGE, Chair