Report Title:
Community Hospitals; Transfer to Department of Health
Description:
Transfers the community hospitals of the state government to the department of health from the Hawaii health systems corporation and abolishes the corporation and its regional boards. Provides for the repeal of the transfer provisions and enabling law for the community hospitals on June 30, 2012. Establishes a transition committee to conduct a study to determine a permanent structure for the community hospitals and requires a report before 1/1/2011. (SB1673 HD2)
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THE SENATE |
S.B. NO. |
1673 |
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TWENTY-FIFTH LEGISLATURE, 2009 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 2 |
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A BILL FOR AN ACT
RELATING TO THE HAWAII HEALTH SYSTEMS CORPORATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The purpose of this Act is to address the community hospitals of the State. More specifically, this Act:
(1) Transfers, from July 1, 2010, until June 30, 2012, the community hospitals from the Hawaii health systems corporation to the department of health and abolishes on June 30, 2010, the corporation and its regional boards; and
(2) Establishes a community hospitals transition committee to conduct a study of a permanent structure for the community hospital system and submit its findings and recommendations to the legislature before the convening of the regular session of 2011.
PART I
TRANSFER OF COMMUNITY HOSPITALS TO DEPARTMENT OF HEALTH
FROM THE HAWAII HEALTH SYSTEMS CORPORATION AND REGIONAL BOARDS
SECTION 2. The purpose of this part is to amend chapter 323F, Hawaii Revised Statutes, to transfer the management, operation, and maintenance of the community hospitals from the Hawaii health systems corporation and its regional boards to the department of health.
This part shall be operative from July 1, 2010, until June 30, 2012. The legislature intends that the community hospitals transition committee conduct the study required under part IV and report to the legislature before the convening of the regular session of 2011 on the best organizational structure for the community hospital system. The legislature intends to review the study and take the necessary action during the regular session of 2011 either to change the organizational structure of the community hospital system or to make this part permanent.
SECTION 3. Section 323F-1, Hawaii Revised Statutes, is amended to read as follows:
"§323F-1 Definitions. As used in this chapter, unless the context otherwise requires:
"Community hospital" means a health facility that, on June 30, 2010, was owned by the Hawaii health systems corporation or any of its regional boards and, on July 1, 2010, is transferred to the department of health pursuant to this Act. Notwithstanding the use of the word "hospital," the term includes a health facility that only provides long-term care and no critical access, acute, or emergency health care.
"Consumer" means any individual who
may [utilize] use a [Hawaii health systems facility] community
hospital for health services and is not a provider.
["Corporation" means the body
corporate and politic known as the Hawaii health systems corporation.
"Corporation board" means the
board of directors of the corporation.]
"Department" means the department of health.
"Director" means the director of health.
"Division" means the [programs,
services, and facilities operated by the department of health,] division of
community hospitals[, prior to the transfer date].
["Health facility" means any one
of the facilities that constitute the division of community hospitals.
"Health systems assets" means all
property or rights in property, real, personal and mixed, tangible or
intangible, existing on the transfer date, used by or accruing to the division
in the normal course of its operations.]
"Provider" means any supplier of
medical or health care goods and services of the type provided at a [Hawaii
health systems facility.] community hospital.
["Regional system board" means a
community-based governing board of directors of a regional system of the corporation.
"Transfer date" means a date
agreed to by the department and the corporation for the transfer of health
systems assets to and the assumption of health systems liabilities, which
includes without limitation, all debts or other obligations, contingent or
certain, owing on such date, by the corporation.]"
SECTION 4. Section 323F-2, Hawaii Revised Statutes, is amended to read as follows:
"§323F-2 [Hawaii health
systems corporation.] Community hospital system; administered by
department of health through division of community hospitals. (a)
There is established the [Hawaii health systems corporation, which shall be
a public body corporate and politic and an instrumentality and agency of the
State. The corporation shall be placed within the department of health for the
administrative purposes specified in section 26-35(a)(6) only.] community
hospital system comprising all community hospitals of the state government.
The department of health, through the division of community hospitals, shall
manage, operate, and maintain the community hospitals of the system.
(b) The division shall be headed by the deputy director of community hospitals, who shall be appointed by the director of health without regard to chapter 76. The deputy director shall report to and be under the supervision and direction of the director of health.
The division shall be a state agency under the department of health and shall not be, nor exercise any power as, a public body corporate and politic or independent instrumentality or agency of the State.
[(b)] (c) The [corporate organization] community
hospital system shall be divided into five [regional systems,] regions
as follows:
(1) The Oahu [regional
health care system] region;
(2) The Kauai [regional
health care system] region;
(3) The Maui [regional
health care system] region, comprising the islands of Maui, Molokai, and
Lanai;
(4) The east Hawaii [regional
health care system, comprising] region, comprising the Puna
district, north Hilo district, south Hilo district, Hamakua district, and Kau
district; and
(5) The west Hawaii [regional
health care system, comprising] region, comprising the north Kohala
district, south Kohala district, north Kona district, and south Kona district;
[and] which
shall be identified as [regional systems] regions I, II, III, IV,
and V, respectively. Each region shall comprise the community hospitals
within the boundaries of that region."
SECTION 5. Section 323F-6, Hawaii Revised Statutes, is amended to read as follows:
"§323F-6 Records. [The
corporation and each regional system board] With respect to the
community hospital system, the department shall be subject to the
requirements of chapter 92F, except that the following categories of government
records shall not be required to be disclosed:
(1) Applications for
credentials or staff privileges at any of the [corporation's medical
facilities,] community hospitals, records from peer review
proceedings, and medical records; and
(2) Marketing
strategies, strategic plans, evaluations, assessments, negotiations, or rates
and charges, the disclosure of which would raise the cost of procurement or
give a manifestly unfair advantage to any competitor or to any person or entity
seeking to do business or proposing to enter into an agreement with [a
regional system board, the corporation,] the department or any of
its [facilities.] community hospitals.
Any person denied access to any such government records shall have available the remedies specified in sections 92F-15 and 92F-15.5. Government records protected from disclosure by this section shall be subject to the interagency disclosure provisions of section 92F-19. Section 624-25.5 shall apply to this part notwithstanding anything to the contrary contained in this section."
SECTION 6. Section 323F-7, Hawaii Revised Statutes, is amended to read as follows:
"§323F-7
Duties and powers of the [corporation
and regional system boards.] department. [(a) Notwithstanding any other law to the contrary and
unless otherwise specified, only those duties and powers related to
corporation-wide matters, including but not limited to corporation-wide
budgeting, personnel policies, procurement policies, fiscal policies,
accounting policies, policies related to affiliations, joint ventures and
contracts, regulatory compliance, risk management, continuing medical education
programs, strategic planning, and capital planning, including the issuance of
revenue bonds in any amount, shall be carried out by the corporation board in
collaboration with the regional system boards. Duties and powers related to
the operation of facilities within each regional system, including but not
limited to regional system and facility budgeting, employment and removal of
regional system and facility personnel, purchasing, regional system strategic
and capital planning, organization, quality assurance, improvement and
reporting, credentialing of medical staff, and the issuance of revenue bonds in
any amount with corporation board approval, shall be carried out by the
regional system boards, either directly or by delegation to regional and
facility administration. Unless otherwise prohibited, the duties and powers
granted to the corporation board may be delegated to the regional system
boards.
(b) Duties and powers exercised by the regional
system boards under this chapter or delegated to the regional system boards by
the corporation board shall be consistent with corporation-wide policies.
Wherever appropriate, corporation-wide policies shall take into account
differences among regional systems and among types of facilities, particularly
acute care, critical access, and long-term care facilities within the system.
New corporation-wide policies, and major changes to
existing policies other than those changes mandated by legal or regulatory
requirements, shall be developed by the corporation board after consultation
with a policies committee. The policies committee shall be made up of
representatives of the corporation board and each regional system board or
designees of each board. The corporation board shall have two representatives
on this committee. The corporation board shall review and consider approval of
the policies within thirty days of transmittal by the policies committee or at
the next board meeting; provided that, if the policies committee fails to take
action within thirty days of receiving the proposed policy, the corporation
board may consider and adopt or reject or revise the policy. The regional
system boards and corporation board, as needed, may submit a request to the
committee to alter corporation-wide policies along with detailed justification
for the request. The regional system boards and the corporation board shall
collaboratively establish a procedure to further implement this section.
(c) Notwithstanding any other law to the contrary,
the corporation and any of the regional system boards] The department shall exercise the following
duties and powers[:], in accordance with this chapter and other
applicable law:
(1) Developing [corporation-wide] policies[,]
and procedures[, and rules] necessary or appropriate to plan, manage,
operate, and maintain [manage, and control] the [system of
public health facilities and services without regard to chapter 91; provided
that each regional system board shall be responsible for its own policies,
procedures, and rules necessary or appropriate to plan, operate, manage, and
control the public health facilities within its own regional system consistent
with corporate policies;] community hospitals;
(2) Evaluating the need for [additional health
facilities and services; provided that each regional system board shall be
responsible for the evaluation within its own regional system;] and
modifying the health care services provided by the different community
hospitals to meet the basic health care needs of the communities served;
[(3) Entering into and performing any
contracts, leases, cooperative agreements, partnerships, or other transactions
whatsoever that may be necessary or appropriate in the performance of its
purposes and responsibilities, and on terms the corporation, or regional system
boards, may deem appropriate, with either:
(A) Any agency or instrumentality of
the United States, or with any state, territory, or possession, or with any
subdivision thereof; or
(B) Any person, firm, association,
partnership, or corporation, whether operated on a for-profit or not-for-profit
basis;
provided that the transaction furthers the
public interest; and provided further that if any dispute arises between any
contract, lease, cooperative agreement, partnership, or other transaction
entered into by the corporation and a regional system board with regard to
matters solely within that regional system, after July 1, 2007, the contract,
lease, cooperative agreement, partnership, or other transaction entered into by
the regional system board shall prevail; and provided further that such
agreements are consistent with corporation policies;
(4)] (3) Conducting activities and
entering into business relationships as the [corporation board, or any
regional system board,] department deems necessary or appropriate,
including [but not limited to:
(A) Creating
nonprofit corporations, including but not limited to charitable fund-raising
foundations, to be controlled wholly by the corporation, any regional system
board, or jointly with others;
(B) Establishing,
subscribing to, and owning stock in business corporations individually or
jointly with others; and
(C) Entering]
entering into partnerships and other joint venture arrangements, or
participating in alliances, purchasing consortia, health insurance pools, or
other cooperative arrangements, with any public or private entity;[provided
that any corporation, venture, or relationship entered into under this section
furthers the public interest; provided further that this paragraph shall not be
construed to authorize the corporation or a regional system board to abrogate
any responsibility or obligation under paragraph (15);
provided that
each regional system board shall be responsible for conducting the activities
under this paragraph in its own regional system consistent with policies
established by the corporation board;
(5)] (4)
Participating in [and developing] prepaid health care service and
insurance programs and other alternative health care delivery programs,
including programs involving the acceptance of capitated payments or premiums
that include the assumption of financial and actuarial risk; [provided that
each regional system board shall be responsible for conducting the activities
under this paragraph in its own regional system consistent with policies
established by the corporation board;
(6)] (5)
Executing, in accordance with all applicable bylaws, rules, and laws, all
instruments necessary or appropriate [in the exercise of any powers of the
corporation or regional system boards;] for the management, operation,
and maintenance of the community hospitals;
[(7)] (6)
Preparing and executing all [corporation-wide] budgets, policies, and
procedures [or any regional system budgets, policies, and procedures;
provided that the regional system boards shall submit their regional and
facility budgets to the corporation to be consolidated into a corporation-wide
budget for purposes of corporation-wide planning and appropriation requests.
Regional system and facility budgets shall be received by the corporation and
shall be included in the corporation-wide budget upon submittal to the
corporation;] for the community hospitals;
[(8)] (7)
Setting rates and charges for all health care services provided by the [corporation
without regard to chapter 91; provided that the duty and power of the
corporation board shall be limited to approving the rates and charges developed
by the regional system boards for the regional system's facilities and
services.] community hospitals. Rates and charges may vary among [regional
systems and facilities and] the community hospitals of the different
regions or may be consolidated with the rates of [other regional systems]
community hospitals of different regions into one charge master.
Third-party payer contracts [may] shall be negotiated [at]
by the [corporation-wide level with input from the regional systems,
taking into consideration the rates set by the regional system boards. For
purposes of securing revenue bonds, the corporation or regional system board
may covenant to set, and if necessary increase, rates and charges as needed to
pay debt service and related obligations plus a coverage factor;
(9) Developing
a corporation-wide hospital system that is subject to chapters 76 and 89;
provided that employment of regional system and facility personnel shall be the
responsibility of the regional system boards pursuant to corporation-wide
policies and procedures, applicable laws, rules, regulations, and collective
bargaining agreements;] department;
[(10)] (8)
Developing [the corporation's corporation-wide] capital and strategic
plans [or any regional system board's capital and strategic plans; provided
that each regional system board shall be responsible for development of capital
and strategic plans in its own regional system that shall be consistent with,
and incorporated into, the overall corporation-wide plans; and provided further
that the corporation and each regional system board shall be entitled to
undertake the acquisition, construction, and improvement of property,
facilities, and equipment to carry out these capital and strategic plans;
(11) Suing
and being sued; provided that only the corporation may sue or be sued; and
provided further that the corporation and regional system boards shall enjoy
the same sovereign immunity available to the State;
(12) Making
and altering corporation board and regional system board bylaws for its
organization and management without regard to chapter 91 and consistent with
this chapter; provided that each regional system board shall be responsible for
the final approval of its regional system board bylaws;] for the
community hospitals;
[(13)] (9)
Adopting rules [without regard to chapter 91] governing the exercise of
the [corporation's or regional system boards'] department's
powers and the fulfillment of its purpose under this chapter;
(14) (10)
Entering into any contract or agreement whatsoever, not inconsistent with this
chapter or the laws of this State, [and authorizing the corporation,
regional system boards, and chief executive officers to enter into all
contracts, execute all instruments, and do all things necessary or appropriate
in the exercise of the powers granted in this chapter, including securing the
payment of bonds; provided that the corporation board shall delegate to a
regional system board its authority to enter into and execute contracts or
agreements relating to matters exclusively affecting that regional system;
provided further that a regional system board shall exercise this power
consistent with corporation-wide policies; and provided further that contracts
or agreements executed by a regional system board shall encumber only the
regional subaccounts of that regional system board;
(15) Issuing
revenue bonds up to $100,000,000 subject to the approval of the governor or the
director of finance; provided that:
(A) All revenue bonds shall be
issued pursuant to part III, chapter 39;
(B) The corporation and any regional
system board shall have the power to issue revenue bonds in any amount without
regard to any limitation in chapter 39; and
(C) The corporation shall have the
power to incur debt, including the issuance of revenue bonds in any amount, and
the regional system boards shall have the power to issue revenue bonds in any
amount upon approval by the corporation board;
(16) Reimbursing
the state general fund for debt service on general obligation bonds or
reimbursable general obligation bonds issued by the State for the purposes of
the corporation or any regional system board;
(17) Pledging
or assigning all or any part of the receipts, revenues, and other financial
assets of the corporation or the regional system boards for purposes of meeting
or securing bond or health systems liabilities; provided that each regional
system board shall be responsible for conducting the activities under this
paragraph in its own regional system. Any pledge or assignment by the
corporation or any regional system board to secure revenue bonds or health
system liabilities shall be valid and binding in accordance with its terms
against the pledgor, creditors, and all others asserting rights thereto from
the time the pledge or assignment is made, without the need of physical
delivery, recordation, filing, or further act. The corporation shall not take
or omit to take any act that would interfere with, impair, or adversely affect
any pledge of assignment by a regional system board pursuant to this chapter.
In connection with issuing revenue bonds or related obligations, consistent
with corporation policies and procedures, any regional system board may make
such other covenants, binding on the regional system board and the corporation,
that the regional system board determines to be necessary or appropriate to
establish and maintain security for the revenue bonds or related obligations;]
for the management, operation, and maintenance of the community hospitals;
(18) (11)
Owning, purchasing, leasing, exchanging, or otherwise acquiring personal
property[, whether real, personal or mixed, tangible or intangible, and of]
or any interest therein[, in the name of the corporation, which
property is not owned or controlled by the State but is owned or controlled by
the corporation; provided that:
(A) Regional
system boards shall have custodial control over facilities and physical assets
in their respective regional systems. A regional system board may own,
purchase, lease, exchange, or otherwise acquire property, whether real,
personal or mix, tangible or intangible, and of any interest therein, other
than property owned or controlled by the corporation, in the name of the
regional system board; provided further that a regional system board shall be
subject to section 323F-3.5; and
(B) Each
regional system board shall be responsible for conducting the activities under
this paragraph in its own regional system;
(19) Maintaining,
improving, pledging, mortgaging, selling, or otherwise holding or disposing of
property, whether real, personal or mixed, tangible or intangible, and of any
interest therein, at any time and manner, in furtherance of the purposes and
mission of the corporation or any regional system board; provided that the
corporation or any regional system board legally holds or controls the property
in its own name; provided further that other than to secure revenue bonds and
related obligations and agents, the corporation or any regional system board
shall not sell, assign, lease, hypothecate, mortgage, pledge, give, or dispose
of all or substantially all of its property; and provided further that each
regional system board shall be responsible for conducting the activities under
this paragraph in its own regional system, and control over such property shall
be delegated to each regional system board;] for the management,
operation, and maintenance of the community hospitals;
(20) (12)
Purchasing insurance [and creating captive insurers] in any arrangement
deemed in the best interest of the [corporation,] community
hospitals, including [but not limited to] funding and payment of
deductibles and purchase of reinsurance; [provided that only the corporation
shall have the power to create captive insurers to benefit public health
facilities and operations in all regional systems; and provided further that a
regional system board may purchase insurance for its regional system in
collaboration with the other regional systems and the corporation until captive
coverage is provided by the corporation;
(21) Acquiring
by condemnation, pursuant to chapter 101, any real property required by the
corporation to carry out the powers granted by this chapter;
(22)] (13)
Depositing any moneys of the [corporation or any regional system board] division
in [any banking institution within or without the State, and appointing, for
the purpose of making deposits, one or more persons to act as custodians of the
moneys of the corporation; or any regional system board; provided that regional
system boards may deposit moneys in banking institutions pursuant to
corporation-wide guidelines established by the corporation board;] accordance
with policies and directives of the department of budget and finance;
[(23) Contracting
for and accepting] (14) Accepting any gifts, grants, [and loans
of funds,] property, or any other aid in any form from the federal
government, the State, any other state agency, or any other source, or
any combination thereof, and complying, subject to this chapter, with the terms
and conditions thereof; [provided that the regional system boards shall be
responsible for contracting for and accepting any gifts, grants, loans,
property, or other aid if intended to benefit the public health facilities and
operations exclusively in their respective regional systems; and provided
further that all contracting for or acceptance of gifts, grants, loans,
property, or other aid shall be consistent with corporation-wide policies
established by the corporation board;
(24)] (15)
Providing health [and medical] care services for the public
directly or by agreement [or lease] with any person, firm, or private or
public corporation, partnership, or association through or in the [health
facilities of the corporation or regional system boards or otherwise; provided
that the regional system boards shall be responsible for conducting the
activities under this paragraph in their respective regional systems;] community
hospitals;
[(25)] (16)
Approving medical staff bylaws, rules, and medical staff appointments and
reappointments for all [public health facilities of the corporation or any
regional system board,] community hospitals, including [but not
limited to] determining the conditions under which a health professional
may be extended the privilege of practicing within a [health facility, as
determined by the respective regional system board and consistent with
corporate-wide policies,] community hospital and adopting and
implementing reasonable [rules, without regard to chapter 91,] policies
for the credentialing and peer review of all persons and health professionals
within the [facility; provided that regional system boards shall be the
governing body responsible for all medical staff organization, peer review, and
credentialing activities to the extent allowed by law;
(26) (A) Investing
any funds not required for immediate disbursement in property or in securities
that meet the standard for investments established in chapter 88 as provided by
the corporation board or any regional system board; provided that proceeds of
bonds and moneys pledged to secure bonds may be invested in obligations
permitted by any document that authorizes the issuance or securing of bonds;
and provided further that the investment assists the corporation or any
regional system board in carrying out its public purposes; selling from time to
time securities thus purchased and held, and depositing any securities in any
bank or financial institution within or without the State. Any funds deposited
in a banking institution or in any depository authorized in this section shall
be secured in a manner and subject to terms and conditions as the corporation
board or a regional system board may determine, with or without payment of any
interest on the deposit, including without limitation time deposits evidenced
by certificates of deposit. Any bank or financial institution incorporated
under the laws of this State may act as depository of any funds of the
corporation or a regional system board and may issue indemnity bonds or may
pledge securities as may be required by the corporation or regional system
board; provided that regional system boards may exercise the powers under this
subsection with respect to financial assets of the regional system consistent
with corporation-wide policies; and
(B) Notwithstanding
subparagraph (A), contracting with the holders of any of its notes or bonds as
to the custody, collection, securing, investment, and payment of any moneys of
the corporation or regional system board and of any moneys held in trust or
otherwise for the payment of notes or bonds and carrying out the contract.
Moneys held in trust or otherwise for the payment of notes or bonds or in any
way to secure notes or bonds, and deposits of such moneys, may be secured in
the same manner as moneys of the corporation or regional system board, and all
banks and trust companies are authorized to give security for the deposits;]
hospital;
[(27)] (17)
Entering into any contract or agreement with [the State, including
but not limited to contracts] a state agency for the provision of
goods, services, and facilities in support of the [corporation's programs or
the regional system boards' programs, and contracting for the provision of
services to or on behalf of the State; provided that the regional system boards
shall be responsible for entering into agreements to provide goods, services,
and facilities in support of programs in their respective regional systems
consistent with corporation-wide policies;
(28) Having a
seal and altering the same at pleasure;
(29) Waiving,
by means that the corporation or regional system board deems appropriate, the
exemption from federal income taxation of interest on the corporation's or
regional system boards' bonds, notes, or other obligations provided by the
Internal Revenue Code of 1986, as amended, or any other federal statute
providing a similar exemption;
(30) Developing
internal policies and procedures for the procurement of goods and services,
consistent with the goals of public accountability and public procurement
practices, and subject to management and financial legislative audits; provided
that the regional system boards shall be responsible for developing internal
policies and procedures for each of their regional systems consistent with the
corporation's policies and procedures; and further provided that:
(A) The
regional system boards and the corporate board shall enjoy the exemption under
section 103-53(e);
(B) The
regional system boards shall enjoy the exemption under chapter 103D; and
(C) The
corporation shall be subject to chapter 103D;
(31) Authorizing
and establishing positions; provided that regional system boards shall be
responsible for hiring and firing regional and facility personnel consistent
with corporation policies, except a regional chief executive officer and
regional chief financial officer shall only be hired or dismissed upon the
approval of the regional system board and the corporation board as further set
forth in section 323F-8.5;
(32) Having
and exercising all rights and powers necessary or incidental to or implied from
the specific powers granted in this chapter, which specific powers shall not be
considered as a limitation upon any power necessary or appropriate to carry out
the purposes and intent of this chapter; provided that the regional system
boards shall be responsible for having and exercising all powers and rights
with respect to matters in their regional systems consistent with the law; and
(33) Each
regional system, through its regional system board, shall:
(A) Develop
policies and procedures necessary or appropriate to plan, operate, manage, and
control the day-to-day operations of facilities within the regional system that
are consistent with corporation-wide policies;
(B) Exercise
custodial control over and use of all assets of the corporation that are
located in the regional system pursuant to this chapter; and
(C) Expend
funds within its approved regional system budget and expend additional funds in
excess of its approved regional system budget upon approval of the corporation
board.] community hospitals; and
(18) Establishing positions for the division and community hospitals as authorized by relevant appropriations acts and laws. Personnel occupying the positions shall be subject to chapters 76 and 89, except as otherwise provided under section 323F-8.
[(d) Each
regional system board shall not be subject to chapters 36 to 38, 40, 41D, and
103D as well as part I of chapter 92 and shall enjoy the exemptions contained
in sections 102-2 and 103-53(e), except as otherwise provided in this chapter.
The corporation shall not be subject to chapters 36 to 38, 40, and 41D, as well
as part I of chapter 92, and shall enjoy the exemptions contained in sections
102-2 and 103-53(e).
(e) The
duties and powers granted to the corporation or any regional system board may
not be used to enter into contractual or business relationships that have the
practical effect of allowing or are intended to allow private-sector
counterparts to replace existing employee positions or responsibilities within
the corporation or in any regional system or its facilities; provided the
corporation or regional system boards shall be allowed to enter into such
relationships to the extent and for the purposes that the division of community
hospitals could have done under collective bargaining contracts that were in
effect for the 1995-1996 fiscal year.]"
SECTION 7. Section 323F-8, Hawaii Revised Statutes, is amended to read as follows:
"§323F-8
[Chief executive officer;
exempt] Exempt positions. (a) [The corporation board
may appoint, exempt from chapter 76 and section 26-35(a)(4), a chief executive
officer of the corporation whose salary shall be set by the corporation board.
The chief executive officer] In addition to authorized civil service
personnel, the director may [also] appoint [up to eighteen other]
personnel[,] exempt from chapters 76 and 89, [to work directly for
the chief executive officer and the corporate board.] as authorized by
relevant appropriations acts and laws, for the management, operation, and
maintenance of the community hospitals.
(b) The [corporation board or its designee] department
may discharge its exempt personnel with or without cause; provided that removal
without cause shall not prejudice any contract rights of personnel.
(c) The [corporation's chief executive officer or
the chief executive officer's designee] department may appoint,
exempt from chapters 76 and 89, hospital administrators, assistant
administrators, directors of nursing, medical directors, and staff physicians,
to facilitate the management, operation, and maintenance of [facilities
within the corporation; provided that directors of nursing appointed before
July 1, 1998, may maintain their civil service status as provided in chapter 76
by so communicating in writing to the chief executive officer by October 31, 1998.
Hospital administrators and assistant administrators appointed before July 1,
1983, may maintain their permanent civil service status as provided in chapter
76.] the community hospitals.
(d) Hiring, firing, compensation packages, and other
personnel actions with respect to employees not covered by chapter 76 and 89
shall be governed by policies and guidelines established by the [corporation,]
department and other laws, except as otherwise provided in this chapter.
[(e) Upon the establishment of a regional system
board, the authority to appoint regional hospital administrators, assistant
administrators, directors of nursing, medical directors, and staff physicians
under subsection (c) shall be superseded by section 323F-8.5 for that regional
system. No incumbent personnel shall lose a position without specific action
taken by the regional system board.]"
SECTION 8. Section 323F-10, Hawaii Revised Statutes, is amended to read as follows:
"§323F-10 Regional [public
health facility] management advisory committees. (a) [On
the transfer date, there shall be] There is established within the [corporation]
division for each region[,] a [public health facility] regional
management advisory committee to consist of nine members [initially to be
appointed by the chief executive officer of the corporation with the advice of
the hospital administrators of the facilities in the affected regions].
The members shall serve for a term of four years[; provided that upon the
initial appointment of the members, two shall be appointed for a term of one
year, two for a term of two years, two for a term of three years, and three for
a term of four years].
On July 1, 2010, all members of the former public health facility management advisory committee for a region shall become members of the regional management advisory committee for that region without necessity of reappointment; provided that their terms shall end on June 30, 2012, notwithstanding the terms to which they were previously appointed.
[Following the initial appointments by the
chief executive officer of the corporation board,] From July 1, 2010,
any vacancies on a regional management advisory committee shall be
filled by [a simple majority vote of the members of the executive committee
from a list of qualified nominees submitted by the regional committee in which
the vacancy occurred. If a regional committee vacancy remains unfilled for
more than thirty days, that vacancy may be filled by the chief executive
officer of the corporation.] the director of health.
Each regional management advisory committee
shall include medical and health care providers, consumers, and knowledgeable
individuals in other appropriate areas such as business and law[; provided
that at least one member shall be a physician with active medical staff
privileges at one of the region's public health facilities]. At least
three members of the committee shall be consumers.
The regional management advisory committee for the East Hawaii region shall have three members who reside in the Ka‘u district, three members who reside in the Hamakua/North Hilo districts, and three members who reside in the South Hilo/Puna districts.
The regional management advisory committee for the West Hawaii region shall have not less than three members who reside in the North Kohala/South Kohala districts.
Each regional management advisory
committee shall select its own chairperson and vice chairperson and shall adopt
rules governing the [terms for] removal of its chairperson from the [executive
management] community hospital system advisory committee. [In
the event of a regional committee voting to remove its chairperson who
concurrently sits on the corporation board, that vote shall be unanimous. In
the event of a regional committee voting to remove its physician member from
the corporation board, that vote shall also be unanimous.] Each regional management
advisory committee may also adopt other rules as it may consider necessary
for the conduct of its business.
The members of the regional management advisory
committees shall serve without compensation, but shall be reimbursed for
traveling expenses incurred in the performance of their duties. The [corporation]
department shall provide for the necessary expenses of the committees;
provided that no expenses may be incurred without prior authorization by the [chief
executive officer.] director.
(b) Each regional management advisory
committee shall sit in an advisory capacity to the [chief executive officer]
department and division on matters concerning the formulation of
regional operational and capital improvement budgets[,] and the
planning, construction, improvement, maintenance, and operation of [public
health facilities] the community hospitals within its [respective
jurisdiction and shall sit in an advisory capacity to the governor on matters
concerning the nominees for positions on the corporation board.] region.
Nothing in this section shall be construed as precluding or preventing the regional
management advisory committees from coordinating their efforts and
activities with the facility administrators within their counties.
(c) Each regional management advisory
committee [may] shall prepare a report for inclusion with the [corporation's]
department's annual report and audit[, which shall include but not be
limited to comments and analyses on the corporation's regional operational and
capital improvement budgets for its respective region.
(d) Upon the establishment of a regional
system board for a regional system pursuant to section 323F-3.5, this section
shall no longer apply to that regional system]."
SECTION 9. Section 323F-10.5, Hawaii Revised Statutes, is amended to read as follows:
"§323F-10.5 [Executive
public health facility] Community hospital system management
advisory committee; establishment. (a) There is established [within]
the [corporation an executive public health facility] community
hospital system management advisory committee to consist of the
chairpersons of each of the five regional [public health facility]
management advisory committees. The [executive] community hospital
system management advisory committee shall[, through its chairperson,
represent the interests of all regional committees on the corporation board.]
provide advice to the department and division on the management, operation,
and maintenance of the community hospitals.
[(b) The executive committee shall select
its own chairperson to serve on the corporation board and shall adopt rules
governing the terms of office and removal from the corporation board. The
executive committee shall also adopt rules governing the terms of office for
each of the five regional committee chairpersons. The executive committee may
also adopt other rules as it may consider necessary for the conduct of its
business.
(c)] (b) The members of the [executive]
community hospital system management advisory committee shall serve
without compensation, but shall be reimbursed for reasonable expenses incurred
in the performance of their duties.
[(d) Upon the establishment of a regional
system board for a regional system pursuant to section 323F-3.5, this section
shall no longer apply to that regional system.]"
SECTION 10. Section 323F-10.6, Hawaii Revised Statutes, is amended to read as follows:
"§323F-10.6 Peer review and credentialing. Peer review activities of the community hospitals and its officers and employees shall be subject to chapters 663 and 671D and all other provisions and restrictions of medical peer review committees established by state law."
SECTION 11. Section 323F-21, Hawaii Revised Statutes, is amended to read as follows:
"§323F-21 Fiscal provisions. (a)
There is created in the state treasury a special fund to be known as the [health
systems] community hospital system special fund, into which shall be
deposited all fees, proceeds, reimbursements, and the like owed to or received
by the [corporation, any regional system board,] division and its
[facilities, except as herein provided.] community hospitals.
There shall be established, within the special fund, regional
subaccounts for each regional system [board upon its establishment].
The special fund and the regional subaccounts shall be used solely to fulfill
the purposes outlined in this chapter.
[The corporation and each regional system
board may establish and maintain, within the health systems special fund or any
regional subaccount, any other accounts that may be necessary and appropriate
to carry out its purposes and responsibilities.
The corporation and any regional system
board may deposit moneys into trustee accounts for the purposes of securing or
issuing bonds.]
The [corporation and regional system boards]
department may provide reasonable reserves for any of the following
purposes[:] with respect to the community hospitals:
(1) Insurance deductibles;
(2) The improvement, replacement, or expansion of their facilities, furniture, fixtures, equipment, or services; or
[(3) The securing of the corporation's or
regional system boards' bonds, notes, or other instruments of indebtedness; or
(4)] (3) Any other purpose the [corporation
or the regional system boards deem] department deems necessary or
appropriate in the performance of [their] the department's
purposes and responsibilities[.] regarding the community hospital
system.
(b) The [corporation board and regional
system boards] department shall [collaboratively] develop
budgetary guidelines and annual operating and capital budgets for each [facility,]
community hospital, taking into account anticipated surpluses from or
subsidies to the [facilities pursuant to the annual guidelines described in
this section,] community hospital, accumulated [corporation and
regional] reserves and accounts[,] payable and receivable,
subsidies, if any, that are determined to be needed from the general fund, and
other sources of [corporation-wide and regional] income as may be
identified. [Two-year budgets will be approved for regional system boards,
in alignment with State of Hawaii biennium budgeting. The corporate board
shall not alter the two-year budget of a regional system except:
(1) Where state general funding is reduced;
(2) An emergency exists; or
(3) There is a renegotiated budget approved
by a regional system board.
The corporation and regional system boards shall
collaboratively develop budgetary guidelines and negotiate with each facility
reasonable corporation administrative costs, including funds determined by the
corporation or any regional system board to be needed from or provided to each
facility to:
(1) Repay corporation or regional system
board debts;
(2) Provide subsidies to any facility
determined to be unable to fund from within that facility's programs and
services deemed essential to community needs; and
(3) Maintain appropriate reserves.
(c) The corporation and regional system boards
shall collaboratively develop annual corporation operating and capital budgets,
taking into account anticipated surpluses from or subsidies to the facilities
pursuant to the annual guidelines described in this section, accumulated
corporation and regional system board reserves and accounts, subsidies, if any,
that are determined to be needed from the general fund, and other sources of
corporation-wide and regional system board income as may be identified.
(d) Beginning with the first of the legislative
biennium budget years following the establishment of a regional system board,
and for each biennium period thereafter, the corporation shall call together
all the regional systems through representatives selected by each regional
system board, and the chairs of the facility management advisory committees, if
any, to determine which services and functions should be provided by the
corporation for the next biennium budget period, consistent with this chapter.
As part of the biennium budgeting process, the corporation board and the
representatives of each regional system, working through the corporation board
regional representatives, shall agree upon an allocation methodology for
funding the agreed upon and statutorily created corporate services and functions.
(e)] (c) The [corporation]
department may [share in any facility's] provide for the
transfer of a community hospital's surplus [and may offset any
facility's deficits as provided herein. Any regional system board shall share
in the surplus of any facility within the regional system and shall offset any
facility deficits within its regional system. Operating surpluses of the
regional system board shall be reinvested in the operations of that regional
system in any prudent manner; provided that upon request, and subject to
authorization by the regional system board, the regional system board may share
its surplus or resources with a facility outside of the regional system to
benefit the corporation-wide system of health care. Obligations undertaken by
a facility shall be paid only from funds of that facility, unless the
corporation board, the regional system board managing the facility, or an
authorized agent explicitly agrees to guarantee the obligation. Loans and
other transfers may be made between regional systems upon approval of the
affected regional system boards to assist in the cash flow and operations of
the public health facilities.
(f) In accordance with each annual facility
budget, and subject to policies established by the corporation board and by
each regional system board, each facility of the corporation and regional
system board, respectively, shall:
(1) Bill and collect for its services;
(2) Maintain bank accounts; and
(3) Pay for needed personnel, supplies,
equipment, and other operational and capital expenditures.
(g) The corporation and each regional
system board, subject to policies established by the corporation and each
regional system board, respectively, may elect to manage its own capital
improvement project and funds, either directly or indirectly by contract;
provided that annual reports of the project moneys are provided to the governor
and legislature.] to fund another community hospital's deficit.
[(h)] (d) The [corporation
board and regional system boards] department may hold public
informational meetings on [their] the budgets[.
Representatives of any county government, state government, or any other person
having an interest in the budget, shall have the right to be heard at the
meetings.] for the community hospitals."
SECTION 12. Section 323F-22, Hawaii Revised Statutes, is amended to read as follows:
"§323F-22 Annual audit and report;
disclosure of revenue projections. (a) The [corporation] department
shall engage a certified public accountant to conduct an annual audit of its
financial affairs, books, and records in accordance with generally accepted
accounting principles. [The corporation, in consultation with a regional
system board, may permit or require a regional system board to retain an audit
firm to conduct an independent audit of the regional system. Each regional
system board shall submit the results of the annual audit to the corporation
board within one hundred twenty days after the close of the regional system
board's fiscal year.] The [corporation] department shall
submit to the governor and the legislature, within one hundred fifty days after
the close of the [corporation's] fiscal year, a report that shall
include the audited financial report for that fiscal year for the [corporation
and each regional system board.] division and its community hospitals.
(b) In addition to the submittal of the audit
required under subsection (a), the [corporation, in cooperation with the
regional system boards,] department shall submit a report to the legislature
at least twenty days prior to the convening of each regular session that shall
include [but not be limited to:] the following:
(1) The projected
revenues for each [health care facility;] community hospital; and
(2) A list of all
proposed capital improvement projects for the community hospitals that are
planned for implementation during the following fiscal year[; and
(3) All
reports submitted by regional public health facility management advisory
committees pursuant to section 323F-10(c).
(c) The
regional system boards shall prepare a report for inclusion with the
corporation's annual report and audit]."
SECTION 13. Section 323F-23, Hawaii Revised Statutes, is amended to read as follows:
"§323F-23 Exemption from taxation. The
[corporation and each regional system board] division and community
hospitals shall be exempt from paying any:
(1) Assessments or taxes levied by any county; and
(2) State taxes of any kind."
SECTION 14. Section 323F-31, Hawaii Revised Statutes, is amended to read as follows:
"§323F-31 [Maintenance]
Notification of planned substantial reduction of services. (a) The [corporation and each regional system
board] department shall notify the legislature of any planned
substantial reduction or elimination of direct patient care services[.] at
a community hospital. The department shall provide the notification at least
sixty days before implementing the planned substantial reduction or
elimination; except that the department may provide the notification within a
shorter period if the planned substantial reduction or elimination is the
result of an emergency situation that was unforeseeable at least sixty days
before implementation.
[(b) No substantial reduction or
elimination of direct patient care services at any facility shall be undertaken
by the corporation without the approval of the legislature.
(c) The legislature shall maintain review
and oversight authority over the provision of direct patient care services
provided at each facility and may intervene to counter or restrict any
substantial reduction or elimination of patient care services.]
(b) For the purposes of this section:
"Elimination of service" means a decision on a particular service that is intended to result in no more operating expenditure for that service.
"Substantial reduction of service" means a reduction of a particular service that is reasonably expected to result in an annual operating expenditure of ten per cent less than the annual actual or budgeted operating expenditure for that service in the previous fiscal year."
SECTION 15. Section 323F-32, Hawaii Revised Statutes, is amended to read as follows:
"[[]§323F-32[]]
Acquisition of Kahuku hospital. (a) Kahuku hospital on Oahu may
be assimilated into the Hawaii health systems corporation in a manner and to an
extent that may be negotiated between the former Hawaii health systems
corporation and Kahuku hospital. After assimilation, the physical assets and
the ground lease of Kahuku hospital shall become the property of the corporation,
and Kahuku hospital shall be operated by the corporation.
[(b)] None of the liabilities of Kahuku
hospital shall become liabilities of the corporation.
[(c)] The corporation, at its
discretion, may retain any or all medical and nonmedical employees of Kahuku
hospital.
[(d)] The corporation, without regard to
section 323F-31, may adjust the levels of services provided by Kahuku hospital.
[(e)] Kahuku hospital shall be exempt
from chapter 102 and section 103-53, and its board of directors, if any, shall
be exempt from part I of chapter 92.
[(f)] The purchase of goods and services
by or on behalf of Kahuku hospital shall be exempt from chapters 103D and 103F.
[(g)] Employees of Kahuku hospital shall
be exempt from chapters 76, 87A, 88, and 89, and shall not be considered [as]
employees of the State.
(b) On July 1, 2010, Kahuku hospital shall be placed under the division and managed, operated, and maintained under the same terms and conditions as those in effect on June 30, 2010, or as may be subsequently changed by the division."
SECTION 16. Section 323F-3, Hawaii Revised Statutes, is repealed.
["§323F-3 Corporation board.
(a) The corporation shall be governed by a fifteen-member board of directors
that shall carry out the duties and responsibilities of the corporation other
than those duties and responsibilities relating to the establishment of any
captive insurance company pursuant to section [323F-7(c)(20)] and the operation
thereof.
(b) Twelve
members of the corporation board shall be appointed as follows:
(1) Two
members from regional system I who reside in the city and county of Honolulu
shall be appointed by the governor from a list consisting of four individuals,
two individuals submitted by the speaker of the house of representatives and
two individuals submitted by the president of the senate within fifteen days of
July 1, 2007; provided that this list shall not include physicians;
(2) Two
members from regional system II who reside in the county of Kauai shall be
appointed by the governor from a list consisting of four individuals, two
individuals submitted by the speaker of the house of representatives and two
individuals submitted by the president of the senate within fifteen days of
July 1, 2007; provided that this list shall not include physicians;
(3) Two
members from regional system III who reside in the county of Maui shall be
appointed by the governor from a list consisting of four individuals, two
individuals submitted by the speaker of the house of representatives and two individuals
submitted by the president of the senate within fifteen days of July 1, 2007;
provided that this list shall not include physicians;
(4) Two
members from regional system IV who reside in the eastern section of the county
of Hawaii shall be appointed by the governor from a list consisting of four
individuals, two individuals submitted by the speaker of the house of
representatives and two individuals submitted by the president of the senate
within fifteen days of July 1, 2007; provided that this list shall not include
physicians;
(5) Two
members from regional system V who reside in the western section of the county
of Hawaii shall be appointed by the governor from a list consisting of four
individuals, two individuals submitted by the speaker of the house of
representatives and two individuals submitted by the president of the senate
within fifteen days of July 1, 2007; provided that this list shall not include
physicians; [and]
(6) Two
additional members who reside in the State shall be appointed by the governor.
The thirteenth and fourteenth members, who
shall serve as voting members, shall be physicians with active medical staff
privileges at one of the corporation's public health facilities. The physician
members shall each serve a term of two years. The initial physician members
shall be from regional system II, and subsequent physician members shall come
from regional systems IV, III, and V respectively. The physician member
positions shall continue to rotate in this order. The physician members shall
be appointed to the corporation board by a two-thirds majority vote of the
corporation board from a list of qualified nominees submitted by the public
health facility management advisory committees or by any regional system
board. If for any reason a physician member is unable to serve a full term,
the remainder of that term shall be filled by a physician from the same
regional system.
The fifteenth member shall be the director
of health or the director's designee, who shall serve as an ex officio, voting
member.
Appointments to the corporation board, with
the exception of the chairperson of the executive public health facility
management advisory committee and the regional physician member, shall be made
by the governor, subject to confirmation by the senate pursuant to section
26-34.
The appointed board members shall serve for
a term of four years; provided that the first member appointed from each
regional system shall be appointed for a term of two years.
Any vacancy shall be filled in the same
manner provided for the original appointments. The corporation board shall
elect its own chair from among its members. Appointments to the corporation
board shall be as representative as possible of the system's stakeholders as
outlined in this subsection.
(c) The selection, appointment, and
confirmation of any nominee shall be based on ensuring that board members have
diverse and beneficial perspectives and experiences and that they include, to
the extent possible, representatives of the medical, business, management, law,
finance, and health sectors, and patients or consumers. Members of the board
shall serve without compensation but may be reimbursed for actual expenses,
including travel expenses incurred in the performance of their duties.
(d) Any member of the board may be removed
for cause by the governor or for cause by vote of a two-thirds majority of the
board's members then in office. For purposes of this section, cause shall
include without limitation:
(1) Malfeasance in office;
(2) Failure to attend regularly called
meetings;
(3) Sentencing for conviction of a felony,
to the extent allowed by section 831-2; or
(4) Any other cause that may render a
member incapable or unfit to discharge the duties required under this chapter.
Filing nomination papers for elective office or
appointment to elective office, or conviction of a felony consistent with
section 831-3.1, shall automatically and immediately disqualify a board member
from office."]
SECTION 17. Section 323F-3.5, Hawaii Revised Statutes, is repealed.
["[§323F-3.5] Regional system boards. (a) There is hereby established a regional system
board of directors to govern each of the five regional systems specified in
section 323F‑2, no later than January 1, 2008. The regional system
boards of directors shall carry out the duties and responsibilities as set
forth in this chapter and as further delegated by the corporation.
(b) Upon its
establishment, a regional system board shall assume custodial care of all
financial assets, real property, including land, structures, and fixtures, or
other physical assets, such as personal property, including furnishings,
equipment, and inventory, of the corporation within its regional system. No
sale or encumbrance of any such real property or such other financial assets,
physical assets of the corporation shall be permitted without the mutual
consent of the Hawaii health systems corporation board and the appropriate
regional system board. No additional debts or liabilities or superior debts
shall be added by the corporation to any regional system board that would
negatively impact the holders of bond notes. Each regional system board shall
be liable for any liabilities arising from financial assets, real or personal
property in its custodial care.
(c) Each
regional system shall be governed by a regional system board of directors to
consist of not less than seven members and not more than fifteen members, as
determined by the regional system board after the initial regional system board
is established.
(1) Each
regional system board shall initially consist of twelve members to be appointed
by the governor under section 26-34 or as provided in this section, as follows:
(A) Four
members shall be appointed by the governor within thirty days of receipt of a
qualified list of candidates as follows:
(i) Two
members shall be chosen from a list of four individuals submitted by the
speaker of the house of representatives within fifteen days of July 1, 2007;
provided that this list shall not include physicians; and
(ii) Two
members shall be chosen from a list of four individuals submitted by the
president of the senate within fifteen days of July 1, 2007; provided that this
list shall not include physicians;
(B) Four
members shall be appointed by the governor within thirty days from a list of
eight individuals nominated by the regional public health facility management
advisory committee within fifteen days of July 1, 2007. These individuals may
be medical and health care providers and professionals, consumers, and
knowledgeable individuals in other appropriate areas such as business, finance,
and law; provided that these individuals shall not be physicians currently in
active practice;
(C) Three
physicians shall be appointed by the governor within thirty days from a list
submitted within fifteen days of July 1, 2007, of six physicians nominated by a
majority vote of the medical staff of the public health facilities in the
regional system present at a duly noticed meeting from a list of qualified
candidates submitted by the medical executive committees in the regional
system; and
(D) The
corporation board chairperson or chairperson's designee shall serve as an ex
officio, nonvoting member of each regional system board;
(2) One
member of each regional system board nominated by the speaker of the house of
representatives, the president of the senate, and medical executive committees
in a regional system shall be appointed for a term of two years;
(3) One
member of each initial regional system board nominated by the regional public
health facility management advisory committee for the regional system shall be
appointed for a term of two years;
(4) The
remaining members of each initial regional system board and all members
appointed thereafter shall be appointed for terms of three years; and
(5) New
regional system board members appointed to any regional system board after the
initial regional system board shall be selected by a two-thirds affirmative
vote of the existing regional system board members.
Except for the ex
officio members of each regional system board, all other members of a regional
system board shall be residents of the region. Each regional system board
shall elect its own chair.
(d) Each
regional system board shall be responsible for local governance, operations,
and administration of the delivery of services in its respective regional
system as set forth in this chapter and as further delegated by the
corporation. Each regional system board shall include medical and health care
providers and professionals, consumers, and knowledgeable individuals in other
appropriate areas, such as business, finance, and law; provided that no more
than three members of the regional system board shall be physicians. Each
regional system board shall be as balanced and representative of the community
stakeholders as possible.
(e) Any
member of a regional system board may be removed for cause by the governor or
for cause by vote of a two-thirds majority of the regional system board's
voting members then in office. For purposes of this section, "cause"
shall include without limitation:
(1) Malfeasance
in office;
(2) Persistent
failure to attend regularly called meetings;
(3) Sentencing
for conviction of a felony, to the extent allowed by section 831-3.1; or
(4) Any
other cause that may render a member incapable of discharging or unfit to
discharge the duties required under this chapter."]
SECTION 18. Section 323F-4, Hawaii Revised Statutes, is repealed.
["§323F-4 Board meetings. (a)
The corporation board and each regional system board shall be exempt from part
I of chapter 92 and shall meet no fewer than four times a year; provided that
the regional system boards and the corporation board shall meet together at
least once a year. Each regional board shall meet at least six times each
year; provided that two of these meetings shall be public community meetings
for the purpose of informing the community and taking comment on the regional
system's performance if these meetings are in addition to the four board
meetings. The public community meetings shall be advertised in a newspaper of
general circulation in the regional system at least two weeks in advance.
(b) All business of the corporation board
and each regional system board shall be conducted at a regular or special
meeting at which a quorum is present, consisting of at least a majority of the
directors then in office. The corporation board and each regional system board
shall adopt procedural rules for meetings, not subject to chapter 91, that
shall include provisions for meetings via electronic and telephonic
communications and other methods that allow the boards to conduct business in a
timely and efficient manner. Any action of the corporation board or each
regional system board shall require the affirmative vote of a majority of those
present and voting at the meeting; except that a vote of two-thirds of the
entire membership of the respective board then in office shall be required for
any of the following actions:
(1) Removal by the corporation board or
respective regional system board of one of its members;
(2) Amendment by the corporation or a
regional system board of its bylaws;
(3) Hiring or removing the chief executive
officer of the corporation or regional chief executive officer;
(4) Filling of vacancies on a board; and
(5) Any other actions as provided by the
corporation or regional system board bylaws."]
SECTION 19. Section 323F-4.5, Hawaii Revised Statutes, is repealed.
["[§323F-4.5] Captive insurance board. (a) There is established a ten-member captive
insurance board that shall carry out the corporation's duties and
responsibilities relating to the establishment of any captive insurance company
pursuant to section [323F-7(c)(20)] and the operation thereof.
(b) Eight
members of the captive insurance board shall be appointed by the governor as
follows:
(1) Three
members from a list of five persons submitted by the president of the senate;
provided that at least one of these members shall have experience in the
insurance industry and financial matters;
(2) Three
members from a list of five persons submitted by the speaker of the house of
representatives; provided that at least one of these members shall have
experience in the insurance industry and financial matters; and
(3) Two
members, one of whom shall be the chief executive officer or chief financial
officer of an insurer licensed to do business in the State and shall serve as a
nonvoting member.
The director
of health or the director's designee and the insurance commissioner or the
commissioner's designee shall serve as ex officio, nonvoting members.
Any vacancy
shall be filled in the same manner provided for the original appointments. The
captive insurance board shall elect its own chair from among its members.
(c) The
selection, appointment, and confirmation of any appointed nominee shall be
based on ensuring that captive insurance board members have diverse and
beneficial perspectives and experiences and that they include, to the extent
possible, representatives of the insurance and/or finance sectors. Members of
the captive insurance board shall serve without compensation but may be
reimbursed for actual expenses, including travel expenses incurred in the
performance of their duties.
(d) Any
appointed member of the captive insurance board may be removed for cause by the
governor or for cause by vote of a two-thirds majority of the captive insurance
board members then in office. For purposes of this section, cause shall
include without limitation:
(1) Malfeasance
in office;
(2) Failure
to attend regularly called meetings;
(3) Sentencing
for conviction of a felony, to the extent allowed by section 831-2; or
(4) Any
other cause that may render a member incapable or unfit to discharge the duties
required under this chapter.
Filing nomination
papers for elective office, appointment to elective office, or conviction of a
felony consistent with section 831-3.1, shall automatically and immediately
disqualify a board member from office.
(e) No member
of the captive insurance board shall be an employee or vendor of the
corporation, or an immediate family member thereof. For purposes of this
subsection, "immediate family member" means a corporation board
employee's or vendor's spouse, child, parent, grandparent, or any related
individual who resides in the same household of the employee or vendor."]
SECTION 20. Section 323F-5, Hawaii Revised Statutes, is repealed.
["§323F-5 Disclosure of interests.
All corporation and regional system board members and employees of the
corporation shall be subject to chapter 84."]
SECTION 21. Section 323F-7.5, Hawaii Revised Statutes, is repealed.
["[§323F-7.5] Regional system boards; delegated authority. If the Hawaii
health systems corporation board is unable to act on important transactions in
as timely a manner as the chairperson of the corporation board deems
reasonable, the chairperson of the corporation board may further delegate
authority to the regional system boards to take action on specific matters."]
SECTION 22. Section 323F-8.5, Hawaii Revised Statutes, is repealed.
["[§323F-8.5] Regional chief
executive officer; exempt position. (a) Upon establishment, and
until December 31, 2008, a regional system board may appoint a regional chief
executive officer and regional chief financial officer whose salary shall be
set by the corresponding regional system board and may discharge a regional
chief executive officer or regional chief financial officer for cause,
consistent with subsection (b); provided that the position shall be exempt from
chapter 76 and section 26-35(a)(4). Effective January 1, 2009, the hiring and
firing of the regional chief executive officers shall be subject to approval of
both the regional system board and the corporation board. Each regional chief
executive officer may also appoint, as necessary, other personnel, exempt from
chapters 76 and 89, to work directly for the regional chief executive officer
for the regional system and for the corresponding regional system board.
(b) Any regional system board or its
designee may discharge its exempt personnel with or without cause; provided
that removal without cause shall not prejudice any contract rights of
personnel; and provided further that the discharge of a regional chief executive
officer shall be limited to the reasons outlined in section 323F-3.5(e) up to
December 31, 2008. Effective January 1, 2009, regional chief executive
officers and other exempt personnel shall be subject to discipline, including
discharge, in accordance with duly executed contracts, laws governing exempt
personnel of the State, and regional system policies adopted in accordance with
corporate policies.
(c) Each regional chief executive officer
or their designees may appoint, exempt from chapters 76 and 89, hospital
administrators, assistant administrators, directors of nursing, medical
directors, and staff physicians, to facilitate the management of facilities
within the regional system.
(d) Hiring, firing, compensation packages,
and other personnel actions with respect to employees not covered by chapters
76 and 89 shall be governed by policies adopted by each regional system board.
These policies and guidelines shall be consistent with policies and guidelines
adopted by the corporation board after consultation with the regional system
boards."]
SECTION 23. Section 323F-9, Hawaii Revised Statutes, is repealed.
["§323F-9
Hiring of attorneys. The
corporation and regional system boards may employ or retain any attorney, by
contract or otherwise, for the purpose of representing the corporation or
regional system boards in any litigation, rendering legal counsel, or drafting
legal documents for the corporation or regional system boards."]
SECTION 24. Section 323F-11, Hawaii Revised Statutes, is repealed.
["§323F-11
Executive branch; noninterference. Notwithstanding any other law to the contrary, the governor and
executive branch agencies shall limit their responsibilities to that of review
and oversight when the corporation or regional system board receives general
funds from the State to subsidize the operating budgets of deficit facilities.
The governor and executive branch agencies shall not interfere with the
systemic change, capacity building, advocacy, budget, personnel, system plan
development, or plan implementation activities of the corporation or any
regional system board. The governor and executive branch agencies shall not
interfere with the ability of the corporation or regional system board to
function as a multiple facility public hospital system delivering health care
services to the residents of the State."]
SECTION 25. Section 323F-24, Hawaii Revised Statutes, is repealed.
["§323F-24
Budget oversight. The
corporation's and each regional system board's operating and capital
improvement budgets shall not be subject to review or approval by the governor
or any state agency, except where state general funds or capital improvement
moneys are requested. If general funds or capital improvement moneys are
requested, then the corporation or any regional system board shall include,
with its request, the proposed budget for which the funds or moneys are to be
included. The corporation and regional system boards, once operational, shall
collaboratively submit their budgets annually to the legislature for review and
approval at least twenty days prior to the convening of the regular legislative
session, beginning with the budgets for the 2010-2011 biennium fiscal years."]
PART II
CONFORMING AMENDMENTS
SECTION 26. The purpose of this part is to amend various sections of the Hawaii Revised Statutes to conform to the amendments made under part I.
SECTION 27. Section 26-5, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e)
Nothing in this section shall be construed as in any manner affecting the civil
service laws applicable to the several counties[,] or the
judiciary, [or the Hawaii health systems corporation or its regional system
boards,] which shall remain the same as if this chapter had not been
enacted."
SECTION 28. Section 26-35.5, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) For purposes of
this section, "member" means any person who is appointed, in
accordance with the law, to serve on a temporary or permanent state board,
including members of the local school board of any charter school established
under chapter 302B, council, authority, committee, or commission, established
by law or elected to the board of education, or the board of trustees of the
employees' retirement system under section 88-24[, or the corporation board
of the Hawaii health systems corporation under section 323F-3 and its regional
system boards under section 323F-3.5]; provided that "member"
shall not include any person elected to serve on a board or commission in
accordance with chapter 11 other than a person elected to serve on the board of
education."
2. By amending subsection (e) to read:
"(e) The
attorney general[,] or, in the case of the board of regents of
the University of Hawaii, [its] the university general counsel[,
or in the case of the board of directors of the Hawaii health systems
corporation under section 323F-3 or its regional system boards under [section]
323F-3.5, the attorneys retained by the board of directors of the Hawaii health
systems corporation or its regional system boards under section 323F-9,]
shall represent and defend a member in any civil action for which immunity is
conferred under subsection (b), or when the attorney general[,] or, if
the action involves a member of the board of regents, the university general
counsel[, or, if the action involves a member of the board of directors of
the Hawaii health systems corporation or its regional system boards, the
attorneys retained by the board of directors of the Hawaii health systems
corporation or its regional system boards,] determines that indemnification
is available to the member under subsection (c), and the member against whom
the action is brought has submitted a written request for representation and
has provided the attorney general[,] or the university general
counsel, in the case of an action involving a member of the board of
regents, [or the attorneys retained by the board of directors of the Hawaii
health systems corporation or its regional system boards in the case of an
action involving a member of the board of directors of the Hawaii health
systems corporation or its regional system boards] with all process or
complaint served upon the member within a reasonable period of time, but not
more than five days after being served with the process or complaint. The
attorney general[, the] or the university general counsel[, or
an attorney retained by the board of directors of the Hawaii health systems
corporation or its regional system boards] may terminate the representation
and defense of the member at any time if, after representation and defense is
accepted, the attorney general[,] or the university general
counsel[, or an attorney retained by the board of directors of the Hawaii health
systems corporation or one of its regional system boards] determines that
indemnification would not be available to the member under subsection
(c)."
SECTION 29. Section 28-8.3, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) No department of the State other than the attorney general may employ or retain any attorney, by contract or otherwise, for the purpose of representing the State or the department in any litigation, rendering legal counsel to the department, or drafting legal documents for the department; provided that the foregoing provision shall not apply to the employment or retention of attorneys:
(1) By the public utilities commission, the labor and industrial relations appeals board, and the Hawaii labor relations board;
(2) By any court or judicial or legislative office of the State; provided that if the attorney general is requested to provide representation to a court or judicial office by the chief justice or the chief justice's designee, or to a legislative office by the speaker of the house of representatives and the president of the senate jointly, and the attorney general declines to provide such representation on the grounds of conflict of interest, the attorney general shall retain an attorney for the court, judicial, or legislative office, subject to approval by the court, judicial, or legislative office;
(3) By the legislative reference bureau;
(4) By any compilation commission that may be constituted from time to time;
(5) By the real estate commission for any action involving the real estate recovery fund;
(6) By the contractors license board for any action involving the contractors recovery fund;
(7) By the trustees for any action involving the travel agency recovery fund;
(8) By the office of Hawaiian affairs;
(9) By the department of commerce and consumer affairs for the enforcement of violations of chapters 480 and 485A;
(10) As grand jury counsel;
(11) By the Hawaiian home lands trust individual claims review panel;
[(12) By the
Hawaii health systems corporation, or its regional system boards, or any of
their facilities;
(13)] (12)
By the auditor;
[(14)] (13)
By the office of ombudsman;
[(15)] (14)
By the insurance division;
[(16)] (15)
By the University of Hawaii;
[(17)] (16)
By the Kahoolawe island reserve commission;
[(18)] (17)
By the division of consumer advocacy;
[(19)] (18)
By the office of elections;
[(20)] (19)
By the campaign spending commission;
[(21)] (20) By the Hawaii tourism authority, as provided in section 201B-2.5; or
[(22)] (21)
By a department, in the event the attorney general, for reasons deemed by the
attorney general good and sufficient, declines to employ or retain an attorney
for a department; provided that the governor thereupon waives the provision of
this section."
2. By amending subsection (c) to read:
"(c) Every
attorney employed by any department on a full-time basis, except an attorney
employed by the public utilities commission, the labor and industrial relations
appeals board, the Hawaii labor relations board, the office of Hawaiian
affairs, [the Hawaii health systems corporation or its regional system
boards,] the department of commerce and consumer affairs in prosecution of
consumer complaints, the insurance division, the division of consumer
advocacy, the University of Hawaii, the Hawaii tourism authority as provided in
section 201B-2.5, the Hawaiian home lands trust individual claims review panel,
or as grand jury counsel, shall be a deputy attorney general."
SECTION 30. Section 29-24, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There
is established in the state treasury an interagency federal revenue
maximization revolving fund, into which shall be deposited all funds and
proceeds collected from the federal government and third-party payers for costs
not previously claimed by the State, [with the exception of proceeds
collected for services provided by the Hawaii health systems corporation or its
regional system boards,] for reimbursement of federally-funded state
programs. For purposes of this chapter, federally-funded state programs
include but shall not be limited to those federally-funded programs within the
departments of human services and health, and shall not include the
federally-funded program within the department of education as provided in
section 302A-1406. Expenditures and transfers from the fund shall be made by
the comptroller in proportional allocations established by the comptroller and
the director of finance. Transfers shall be made to the department claiming
the reimbursement for expenses incurred related to federal fund reimbursement
claims and to the general fund of the State. Moneys in the fund may be
expended for consultant services rendered under subsection (b)."
SECTION 31. 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 and the subaccounts of its regional system boards;] Community
hospital system special fund under section 323F-21;
(14) Tourism special fund established under section 201B-11;
(15) Universal service fund established under chapter 269;
(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) Deposit beverage container deposit special fund under section 342G-104;
(21) Glass advance disposal fee special fund established by section 342G-82;
(22) Center for nursing special fund under section 304A-2163;
(23) Passenger facility charge special fund established by section 261-5.5;
(24) Solicitation of funds for charitable purposes special fund established by section 467B-15;
(25) Land conservation fund established by section 173A-5;
(26) Court interpreting services revolving fund under section 607-1.5;
(27) Trauma system special fund under section 321-22.5;
(28) Hawaii cancer research special fund;
(29) Community health centers special fund;
(30) Emergency medical services special fund; and
(31) Rental motor vehicle customer facility charge special fund established under section 261-5.6;
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 32. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(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 and the subaccounts of its regional system boards;] Community
hospital system special fund under section 323F-21;
(13) Tourism special fund established under section 201B-11;
(14) Universal service fund established under chapter 269;
(15) Emergency and budget reserve fund under section 328L-3;
(16) Public schools special fees and charges fund under section 302A-1130(f);
(17) Sport fish special fund under section 187A-9.5;
(18) Neurotrauma special fund under section 321H-4;
(19) Center for nursing special fund under section 304A-2163;
(20) Passenger facility charge special fund established by section 261-5.5;
(21) Court interpreting services revolving fund under section 607-1.5;
(22) Trauma system special fund under section 321-22.5;
(23) Hawaii cancer research special fund;
(24) Community health centers special fund;
(25) Emergency medical services special fund; and
(26) Rental motor vehicle customer facility charge special fund established under section 261-5.6,
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 33. Section 37-34, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) Any other law to the contrary
notwithstanding, general fund appropriations for the operating expenses of community
hospitals and other public health facilities of the department of health
shall be made available to the [public health facilities] department
for expenditure during any allotment period."
SECTION 34. Section 37-53, Hawaii Revised Statutes, is amended to read as follows:
"§37-53 Transfer of special funds. At any time
during a fiscal year, notwithstanding any other law to the contrary, any
department may, with the approval of the governor or the director of finance if
so delegated by the governor, transfer from any special fund relating to such
department to the general revenues of the State all or any portion of moneys
determined to be in excess of fiscal year requirements for such special fund,
except for special funds under the control of the department of transportation
relating to highways, airports, transportation use, and harbors activities, [special
funds under the control of the Hawaii health systems corporation or subaccounts
under the control of its regional system boards,] the community hospital
system special fund, and special funds of the University of Hawaii. At any
time the department of transportation, with the approval of the governor or the
director of finance if so delegated by the governor, may transfer from any
special fund under the control of the department of transportation, or from any
account within any such special fund, to the general revenues of the State or
to any other special fund under the control of the department of transportation
all or any portion of moneys determined to be in excess of requirements for the
ensuing twelve months determined as prescribed by rules adopted pursuant to
chapter 91; provided that no such transfer shall be made which would cause a
violation of federal law or federal grant agreements."
SECTION 35. Section 37-74, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) No appropriation transfers or changes between programs or agencies shall be made without legislative authorization; provided that:
(1) Authorized transfers or changes, when made, shall be reported to the legislature;
(2) Except with
respect to appropriations to fund financing agreements under chapter 37D, the
University of Hawaii shall have the flexibility to transfer appropriated funds
and positions for the operating cost category among programs, among cost
elements in a program, and between quarters, as applicable; except with respect
to appropriations to fund financing agreements under chapter 37D, the
department of education shall have the flexibility to transfer appropriated
funds and positions for the operating cost category among programs and among
cost elements in a program, and between quarters, as applicable; [and the
Hawaii health systems corporation and its regional system boards shall have the
flexibility to transfer special fund appropriations among regional system
hospital facilities as applicable and as mutually agreed to by the corporation
and the respective regional system board; provided that the Hawaii health
systems corporation and the regional system boards shall maintain the integrity
and services of each individual regional system and shall not transfer
appropriations out of any regional system that would result in a reduction of
services offered by the regional system, with due regard for statutory
requirements, changing conditions, the needs of the programs, and the effective
utilization of resources;] and
(3) The university and the department of education shall account for each transfer implemented under this subsection in quarterly reports to the governor and annual reports at the end of each fiscal year to the legislature and the governor, which shall be prepared in the form and manner prescribed by the governor and shall include information on the sources and uses of the transfer."
SECTION 36. Section 37D-1, Hawaii Revised Statutes, is amended by amending the definition of "agency" to read as follows:
""Agency"
means the judiciary, any executive department, independent commission, board,
authority, bureau, office, other establishment of the State (except the
legislature and its agencies), or public corporation that is supported in whole
or in part by state funds, or any agent thereof, authorized by law to expend
available moneys[; provided that the Hawaii health systems corporation and
its regional system boards shall not be governed by this chapter for any
financing agreement unless it elects to be]."
SECTION 37. Section 37D-2, Hawaii Revised Statutes, is amended to read as follows:
"§37D-2
Financing agreements. (a) There is
hereby established and authorized the financing agreement program of the
State. Any agency desiring to acquire or improve projects through the
financing agreement program established and authorized by this chapter shall
submit a written request to the department providing any information that the
department shall require. Notwithstanding any other law to the contrary, [and
except for the Hawaii health systems corporation and its regional system boards,]
only with the approval by the attorney general as to form and legality and upon
the written request of one or more agencies may the department enter into a
financing agreement in accordance with this chapter, and only with the approval
by the attorney general as to form and legality, and by the director as to
fiscal responsibility, and upon the written
request of an agency, the agency may enter into a
financing agreement in accordance with this chapter, except that the
department of education may enter into a financing agreement in accordance with
section 36-32 with the concurrence of the director and with the approval of the
attorney general as to form and legality; and that the board of regents of the
University of Hawaii may enter into a financing agreement in accordance with
this chapter without the approval of the director and of the attorney general
as to form and legality if the principal amount of the financing agreement does
not exceed $3,000,000. A financing agreement may be entered into by the
department on behalf of one or more agencies, or by an agency, at any time
(before or after commencement or completion of any improvements or acquisitions
to be financed) and shall be upon terms and conditions the department finds to
be advantageous. In each case of a written request by the judiciary to
participate in the financing agreement program, the department shall implement
the request; provided that the related financing agreement shall be upon terms
and conditions the department finds to be advantageous. Any financing
agreement entered into by the department without the approval, or by an agency
without the approvals required by this section shall be void and of no effect.
A single financing agreement entered into by the department may finance a
single item or multiple items of property to be used by multiple agencies or
may finance a single item or multiple items of property to be used by a single
agency. If the financing agreement is by the department, the department shall
bill any agency that benefits from property acquired with the proceeds of a
financing agreement for the agency's pro rata share of:
(1) The department's costs of administration of the financing agreement program; and
(2) The financing costs, including the principal and interest components of the financing agreement and insurance premiums,
on a monthly or other periodic basis, and may deposit payments received in connection with the billings with a trustee as security for the financing agreement. Any agency receiving such a bill shall be authorized and shall pay the amounts billed from available moneys.
If a financing agreement is by an agency, the agency shall deposit on a monthly or other periodic basis with the department, payments from available moneys with respect to the agency's financing costs, including the principal and interest components of the financing agreement and insurance premiums, which payments the department may deposit with a trustee as security for the financing agreement. The department may bill an agency for the department's costs of administering the agency's payments and the agency receiving such a bill shall be authorized to and shall pay the amounts billed from available moneys.
(b) Financing agreements shall be subject to the following limitations:
(1) Amounts payable by an agency to or upon the direction of the department in respect to a project and by the department or an agency under a financing agreement shall be limited to available moneys. In no circumstance shall the department or an agency be obligated to pay amounts due under a financing agreement from any source other than available moneys. If, by reason of insufficient available moneys or other reason, amounts due under a financing agreement are not paid when due, the lender may exercise any property right that the department or the agency has granted to it in the financing agreement, against the property that was purchased with the proceeds of the financing agreement, and apply the amounts so received toward payments scheduled to be made by the department or the agency under the financing agreement;
(2) No property rights may be granted in property unless the property is being acquired, is to be substantially improved, is to be refinanced with the proceeds of a financing agreement, or is land on which the property is located;
(3) Notwithstanding any other law to the contrary,
and except [for the Hawaii health systems corporation and its regional
system boards, and] as otherwise provided in this section with respect to
the department of education and the University of Hawaii, [and except as
provided in chapter 323F as to the Hawaii health systems corporation and
its regional system boards,] an agency shall not have the power to enter
into a financing agreement, except as authorized by this chapter, and nothing
in this chapter shall be construed to authorize the sale, lease, or other
disposition of property owned by an agency;
(4) Except as otherwise provided in this section with respect to the department of education and the University of Hawaii, the sale, assignment, or other disposition of any financing agreements, including certificates of participation relating thereto, shall require the approval of the director; and
(5) The department or the agency proposing to enter into a financing agreement shall not be subject to chapter 103D and any and all other requirements of law for competitive bidding for financing agreements."
SECTION 38. Section 41D-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Any
provision in this section to the contrary notwithstanding, the University of
Hawaii (as to casualty insurance risks only), the Research Corporation of the
University of Hawaii (as to casualty insurance risks only), and the community
hospitals and other public health facilities of the department of health
(with respect to medical malpractice risks only)[, and the Hawaii health
systems corporation and its regional system boards] shall be exempt from
the requirements of this chapter."
SECTION 39. Section 76-11, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "chief executive" to read:
""Chief executive" means the
governor, the respective mayors, and the chief justice of the supreme
court[, and the chief executive officer of the Hawaii health systems
corporation]. It may include the superintendent of education and the
president of the University of Hawaii with respect to their employees on any
matter that applies to employees in general, including employees who are not
covered by this chapter."
2. By amending the definition of "employer" or "public employer" to read:
""Employer" or "public
employer" means the governor in the case of the State, the respective
mayors in the case of the counties, the chief justice of the supreme court in
the case of the judiciary, the board of education in the case of the department
of education, the board of regents in the case of the University of Hawaii, [the
Hawaii health systems corporation board in the case of the Hawaii health
systems corporation,] and any individual who represents one of the
employers or acts in their interest in dealing with public employees. In the
case of the judiciary, the administrative director of the courts shall be the
employer in lieu of the chief justice for purposes which the chief justice
determines would be prudent or necessary to avoid conflict."
3. By amending the definition of "jurisdiction" to read:
""Jurisdiction" means the State,
the city and county of Honolulu, the county of Hawaii, the county of Maui, the
county of Kauai, the judiciary, the department of education, and the
University of Hawaii[, and the Hawaii health systems corporation]."
4. By amending the definition of "legislative body" to read:
""Legislative body" means the legislature
in the case of the State, including the judiciary, the department of education,
and the University of Hawaii[, and the Hawaii health systems
corporation]; the city council in the case of the city and county of
Honolulu; and the respective county councils in the case of the counties of
Hawaii, Maui, and Kauai."
SECTION 40. Section 76-47, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) The merit appeals board shall adopt
rules of practice and procedure consistent with section 76-14 and in accordance
with chapter 91, except that, in the case of the judiciary [and the Hawaii
health systems corporation], the adoption, amendment, or repeal of rules
shall be subject to the approval of [their respective chief executives.]
the chief justice. The rules shall recognize that the merit appeals
board shall sit as an appellate body and that matters of policy, methodology,
and administration are left for determination by the director. The rules may
provide for the sharing of specific expenses among the parties that are
directly incurred as a result of an appeal as the merit appeals board deems
would be equitable and appropriate, including but not limited to expenses for
transcription costs or for services, including traveling and per diem costs,
provided by persons other than the board members or permanent staff of the
board. Official business of the merit appeals board shall be conducted in
meetings open to the public, except as provided in chapter 92."
SECTION 41. Section 89-2, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "employer" or "public employer" to read:
""Employer" or "public
employer" means the governor in the case of the State, the respective
mayors in the case of the counties, the chief justice of the supreme court in
the case of the judiciary, the board of education in the case of the department
of education, the board of regents in the case of the University of Hawaii, [the
Hawaii health systems corporation board in the case of the Hawaii health
systems corporation,] and any individual who represents one of these
employers or acts in their interest in dealing with public employees. In the
case of the judiciary, the administrative director of the courts shall be the
employer in lieu of the chief justice for purposes which the chief justice
determines would be prudent or necessary to avoid conflict."
2. By amending the definition of "jurisdiction" to read:
""Jurisdiction" means the State,
the city and county of Honolulu, the county of Hawaii, the county of Maui, the
county of Kauai, and the judiciary[, and the Hawaii health systems
corporation]."
3. By amending the definition of "legislative body" to read:
""Legislative body" means the
legislature in the case of the State, including the judiciary, the department
of education, and the University of Hawaii[, and the Hawaii health
systems corporation]; the city council, in the case of the city and county
of Honolulu; and the respective county councils, in the case of the counties of
Hawaii, Maui, and Kauai."
SECTION 42. Section 89-6, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) For the purpose of negotiating a collective bargaining agreement, the public employer of an appropriate bargaining unit shall mean the governor together with the following employers:
(1) For bargaining units (1), (2), (3), (4), (9),
(10), and (13), the governor shall have six votes and the mayors, and the
chief justice[, and the Hawaii health systems corporation board] shall
each have one vote if they have employees in the particular bargaining unit;
(2) For bargaining units (11) and (12), the governor shall have four votes and the mayors shall each have one vote;
(3) For bargaining units (5) and (6), the governor shall have three votes, the board of education shall have two votes, and the superintendent of education shall have one vote;
(4) For bargaining units (7) and (8), the governor shall have three votes, the board of regents of the University of Hawaii shall have two votes, and the president of the University of Hawaii shall have one vote.
Any decision to be reached by the applicable employer group shall be on the basis of simple majority, except when a bargaining unit includes county employees from more than one county. In such case, the simple majority shall include at least one county."
SECTION 43. Section 89C-1.5, Hawaii Revised Statutes, is amended by amending the definition of "appropriate authority" to read as follows:
""Appropriate authority" means
the governor, the respective mayors, the chief justice of the supreme court,
the board of education, the board of regents, [the Hawaii health [systems]
corporation board,] the auditor, the ombudsman, and the director of the
legislative reference bureau. These individuals or boards may make adjustments
for their respective excluded employees."
SECTION 44. Section 102-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The bidding requirements of subsection (a) shall not apply to concessions or space on public property set aside for the following purposes:
(1) For operation of ground transportation services and parking lot operations at airports, except for motor vehicle rental operations under chapter 437D;
(2) For lei vendors;
(3) For airline and aircraft operations;
(4) For automatic teller machines and vending machines, except vending machines located at public schools operated by blind or visually handicapped persons in accordance with section 302A-412;
(5) For operation of concessions set aside without any charge;
(6) For operation of concessions by handicapped or blind persons; except concessions operated in the public schools by blind or visually handicapped persons in accordance with section 302A-412;
(7) For operation of concessions on permits revocable on notice of thirty days or less; provided that no such permits shall be issued for more than a one year period;
(8) For operation of concessions or concession spaces for a beach service association dedicated to the preservation of the Hawaii beach boy tradition, incorporated as a nonprofit corporation in accordance with state law, and whose members are appropriately licensed or certified as required by law;
(9) For operation of concessions at county zoos, botanic gardens, or other county parks which are environmentally, culturally, historically, or operationally unique and are supported, by nonprofit corporations incorporated in accordance with state law solely for purposes of supporting county aims and goals of the zoo, botanic garden, or other county park, and operating under agreement with the appropriate agency solely for such purposes, aims, and goals;
(10) For operation of concessions that furnish goods or services for which there is only one source, as determined by the head of the awarding government agency in writing that shall be included in the contract file; and
(11) For operation of
concession or concession spaces at the convention center under chapter 201B[;
and
(12) For any
of the operations of the Hawaii health systems corporation and its regional
system boards]."
SECTION 45. Section 103-53, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e) This section shall not apply to:
(1) Any procurement of less than $25,000 or that is considered a small purchase under section 103D-305 and any state or county department contract of less than $25,000;
(2) Emergency purchases for the procurement of goods, services, or construction under section 103D-307, disaster relief under chapter 127, or a civil defense emergency under chapter 128;
(3) Grants and subsidies disbursed by a state agency pursuant to chapter 42F or in accordance with standards provided by law as required by article VII, section 4, of the State Constitution, or made by the counties pursuant to their respective charters or ordinances;
(4) Contracts or agreements between government agencies;
(5) Contracts or agreements to disburse funds:
(A) To make payments to or on behalf of public officers and employees for salaries, fringe benefits, professional fees, and reimbursements;
(B) To satisfy obligations required to be paid by law, including fees, judgments, settlements, and other payments for resolving claims;
(C) To make refunds or return funds held by the State or county as trustee, custodian, or bailee;
(D) For entitlement programs, including public assistance, unemployment, and workers' compensation programs, established by state or federal law;
(E) For deposit, investment, or safekeeping, including sums to pay expenses related to their deposit investment, or safekeeping;
(F) For loans under government-administered loan programs; or
(G) To make periodic, recurring payments for utility services; and
(6) Rent for the use
or occupation of the premises and facilities at Aloha Stadium, the convention
center, or any other state or county large spectator events facility[; and
(7) Contracts
or agreements of the Hawaii health systems corporation and its regional system
boards]."
SECTION 46. Section 103d-102, Hawaii Revised Statutes, is amended to read as follows:
"§103D-102 Application of this chapter. (a) This chapter shall apply to all procurement contracts made by governmental bodies whether the consideration for the contract is cash, revenues, realizations, receipts, or earnings, any of which the State receives or is owed; in-kind benefits; or forbearance; provided that nothing in this chapter or rules adopted hereunder shall prevent any governmental body from complying with the terms and conditions of any other grant, gift, bequest, or cooperative agreement.
(b) Notwithstanding subsection (a), this chapter shall not apply to contracts by governmental bodies:
(1) Solicited or entered into before July 1, 1994, unless the parties agree to its application to a contract solicited or entered into prior to July 1, 1994;
(2) To disburse funds, irrespective of their source:
(A) For grants or subsidies as those terms are defined in section 42F-101, made by the State in accordance with standards provided by law as required by article VII, section 4, of the State Constitution; or by the counties pursuant to their respective charters or ordinances;
(B) To make payments to or on behalf of public officers and employees for salaries, fringe benefits, professional fees, or reimbursements;
(C) To satisfy obligations that the State is required to pay by law, including paying fees, permanent settlements, subsidies, or other claims, making refunds, and returning funds held by the State as trustee, custodian, or bailee;
(D) For entitlement programs, including public assistance, unemployment, and workers' compensation programs, established by state or federal law;
(E) For dues and fees of organizations of which the State or its officers and employees are members, including the National Association of Governors, the National Association of State and County Governments, and the Multi-State Tax Commission;
(F) For deposit, investment, or safekeeping, including expenses related to their deposit, investment, or safekeeping;
(G) To governmental bodies of the State;
(H) As loans, under loan programs administered by a governmental body; and
(I) For
contracts awarded in accordance with chapter 103F[.];
(3) To procure goods, services, or construction from a governmental body other than the University of Hawaii bookstores, from the federal government, or from another state or its political subdivision;
(4) To procure the following goods or services which are available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State:
(A) Services of expert witnesses for potential and actual litigation of legal matters involving the State, its agencies, and its officers and employees, including administrative quasi-judicial proceedings;
(B) Works of art for museum or public display;
(C) Research and reference materials including books, maps, periodicals, and pamphlets, which are published in print, video, audio, magnetic, or electronic form;
(D) Meats and foodstuffs for the Kalaupapa settlement;
(E) Opponents for athletic contests;
(F) Utility services whose rates or prices are fixed by regulatory processes or agencies;
(G) Performances, including entertainment, speeches, and cultural and artistic presentations;
(H) Goods and services for commercial resale by the State;
(I) Services of printers, rating agencies, support facilities, fiscal and paying agents, and registrars for the issuance and sale of the State's or counties' bonds;
(J) Services of attorneys employed or retained to advise, represent, or provide any other legal service to the State or any of its agencies, on matters arising under laws of another state or foreign country, or in an action brought in another state, federal, or foreign jurisdiction, when substantially all legal services are expected to be performed outside this State;
(K) Financing agreements under chapter 37D; and
(L) Any other goods or services which the policy board determines by rules or the chief procurement officer determines in writing is available from multiple sources but for which procurement by competitive means is either not practicable or not advantageous to the State; and
(5) Which are specific procurements expressly exempt from any or all of the requirements of this chapter by:
(A) References in state or federal law to provisions of this chapter or a section of this chapter, or references to a particular requirement of this chapter; and
(B) Trade agreements, including the Uruguay Round General Agreement on Tariffs and Trade (GATT) which require certain non-construction and non-software development procurements by the comptroller to be conducted in accordance with its terms.
[(c)
Notwithstanding subsection (a), this chapter shall not apply to contracts made
by any regional system board of the Hawaii health systems corporation.
(d)] (c)
Governmental bodies making procurements which are exempt from this chapter are
nevertheless encouraged to adopt and use provisions of this chapter and its
implementing rules as appropriate; provided that the use of one or more
provisions shall not constitute a waiver of the exemption conferred and subject
the procurement or the governmental body to any other provision of this chapter."
SECTION 47. Section 103D-203, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) The chief procurement officer for each of the following state entities shall be:
(1) The judiciary--the administrative director of the courts;
(2) The senate--the president of the senate;
(3) The house of representatives--the speaker of the house of representatives;
(4) The office of Hawaiian affairs--the chairperson of the board;
(5) The University of Hawaii--the president of the University of Hawaii;
(6) The department of education, excluding the Hawaii public library system--the superintendent of education; and
[(7) The Hawaii health systems
corporation--the chief executive officer of the Hawaii health systems corporation;
and
(8)] (7) The remaining departments of
the executive branch of the State and all governmental bodies administratively
attached to them--the administrator of the state procurement office of the
department of accounting and general services."
PART III.
TRANSITION PROVISIONS FOR TRANSFER OF COMMUNITY HOSPITALS
TO DEPARTMENT OF HEALTH
SECTION 48. Except as otherwise provided, on June 30, 2010, the Hawaii health systems corporation and its regional systems shall be abolished and cease to exist.
SECTION 49. On July 1, 2010, jurisdiction over the community hospitals shall be transferred to the department of health from the Hawaii health systems corporation and its regional boards.
On July 1, 2010, the real property and interest therein held by the Hawaii health systems corporation and its regional boards shall be transferred to the department of health.
On July 1, 2010, all certificates, licenses, permits, and other approvals required by state law for the operation of the community hospitals that are held on June 30, 2010, by the Hawaii health systems corporation or any of its regional systems or facilities shall be transferred to the department of health, division of community hospitals, without necessity of re-application or re-approval; except that the transfer shall not apply if prohibited by federal law. If the transfer of a certificate, license, permit, or other approval is prohibited by federal law, the director of health shall apply for the transfer, issuance, or renewal of the certificate, license, permit, or other approval in accordance with section 61 of this Act.
SECTION 50. (a) Except as otherwise provided under parts I and II, on July 1, 2010, the rights, powers, functions, and duties of the Hawaii health systems corporation and its regional boards are transferred to the department of health.
(b) On July 1, 2010, all officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act; except that an officer or employee whose position is no longer authorized under the General Appropriations Act of 2009 or any subsequent appropriations act shall not be transferred.
(c) No officer or employee who has been transferred pursuant to subsection (b) and who has tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act.
(d) If a position held by an officer or employee having tenure is no longer authorized under the General Appropriations Act of 2009 or any subsequent appropriations act, the termination or movement to another position of the officer or employee shall be subject to the appropriate collective bargaining agreement.
SECTION 51. Except when inconsistent with part I or II, all rules, policies, procedures, guidelines, and other material adopted or developed by the Hawaii health systems corporation or its regional boards shall be transferred to the department of health on July 1, 2010, and shall remain in full force and effect until amended or repealed by the department.
SECTION 52. On July 1, 2010, all furniture, fixtures, equipment, machines, records, files, supplies, books, papers, documents, maps, and other personal property heretofore made, used, or acquired or held by the Hawaii health systems corporation or its regional boards shall be transferred to the department of health.
SECTION 53. (a) Except as otherwise provided under subsection (b), contracts of the Hawaii health systems corporation or its regional boards in effect on June 30, 2010, shall be transferred to the department of health on July 1, 2010, and the department shall assume all obligations and be entitled to all goods or services under the transferred contracts.
(b) If any contract transferred under subsection (a) includes a termination for convenience clause, and if the department of health finds that the continuation of the contract is no longer in the public interest, the department of health shall terminate the contract.
(c) Subsection (b) shall not authorize the department of health to terminate or modify any collective bargaining agreement, including memoranda of agreement, with any exclusive representative of public employees employed at a community hospital unless the exclusive representative agrees to the termination or modification.
SECTION 54. (a) On July 1, 2010, the department of health shall assume all liabilities and debts of the Hawaii health systems corporation, including those assumed by the corporation from the former division of community hospitals. The department of health shall report to the legislature the total amount of the liabilities and debts assumed from the Hawaii health systems corporation and an itemization by person owed.
(b) Nothing in this section shall prohibit the department of health, through the attorney general, from recovering from any person any portion of a liability or debt assumed by the department that was incurred by fraudulent action of the person.
SECTION 55. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
PART IV
STUDY OF PERMANENT STRUCTURE FOR THE COMMUNITY HOSPITALS
SECTION 56. Purpose. The purpose of this part is to establish a community hospitals transition committee to conduct a study of a permanent structure for the organization and funding of the community hospitals.
SECTION 57. Community hospitals transition committee; established, membership, filling of vacancy, staff support. (a) There is established a community hospitals transition committee within the department of health for administrative purposes. The transition committee shall comprise the same persons who served as members of the Hawaii health systems corporation's finance, information systems, and audit committee on June 30, 2009, and:
(1) Two persons who reside on the island of Maui, one person to be appointed by the president of the senate and one person to be appointed by the speaker of the house of representatives; and
(2) Two persons who reside on the island of Kauai, one person to be appointed by the president of the senate and one person to be appointed by the speaker of the house of representatives.
(b) Any vacancy on the transition committee that occurs after June 30, 2009, shall be filled by the appointing authority who appointed the member whose position needs to be filled.
(c) The transition committee shall select its chairperson and other officers and establish procedures and policies for the conduct of meetings.
(d) Members of the transition committee shall serve without compensation, but shall be reimbursed for traveling expenses incurred in the performance of their duties. The department shall provide for the necessary expenses of the committee from the funds appropriated for its general administration; provided that no expenses may be incurred without prior authorization of the director of health.
(e) The department of health shall provide staff support to the transition committee.
SECTION 58. Duties of transition committee. (a) The transition committee shall conduct an:
(1) Assessment of the existing and projected health care needs of the communities presently served by the community hospitals and make recommendations on the types and levels of health care service that should be provided by the community hospitals in those communities;
(2) Analysis of alternative operational structures for the community hospital system, citations of the state statutes that require amendment to implement the different structures analyzed, and make recommendations on the optimal structure to deliver community hospital services in the communities presently served;
(3) Examination of various revenue sources that may be dedicated to subsidizing the operating deficits of the community hospitals and make recommendations on the best revenue source for dedication; and
(4) Evaluation of whether the Maui region of the Hawaii health systems corporation should be permitted to separate from the corporation and state government and operate as an independent entity. If the committee finds that the Maui region should be permitted to separate, the committee shall also recommend:
(A) The best organizational structure or legal entity form for the Maui region;
(B) The real property, furniture, fixtures, equipment, and other assets that should be transferred to the Maui region;
(C) The liabilities, debts, and obligations that should be transferred to the Maui region; and
(D) If deemed appropriate and necessary, any revenue source or level of general fund subsidy that should be provided to the Maui region.
(b) The transition committee shall submit its findings and recommendations to the legislature and governor by January 1, 2011.
(c) Following the submittal of the findings and recommendations, the transition committee shall be available for consultation with the legislature upon reasonable notice until such time as the transition committee is terminated.
SECTION 59. Termination of transition committee. The transition committee shall terminate on June 30, 2011.
SECTION 60. Legislative intent. The legislature intends to review the findings and recommendations of the transition committee and enact legislation during the regular session of 2011 to establish a permanent structure for the community hospital system to become effective on July 1, 2012. The legislature intends that the period from the enactment of the legislation passed during the regular session of 2011 to July 1, 2012 will provide time for an orderly transition to the permanent structure.
PART V
SECTION 61. After June 30, 2009, the director of health shall apply for the transfer, issuance, or renewal of all certificates, licenses, permits, and other approvals required by federal law for the operation of the community hospitals by the department of health, division of community hospitals, and eligibility of the community hospitals for federal medicare and medicaid funds. If any such certificate, license, permit, or other approval is not transferred, issued, or renewed by July 1, 2010, the director of health shall submit a report to the legislature identifying the certificate, license, permit, or other approval and the reason for the lack of transfer, issuance, or renewal.
PART VI
SECTION 62. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 63. This Act shall take effect on July 1, 2009; provided that:
(1) Parts I, II, and III of this Act shall take effect on July 1, 2010;
(2) Part I of this Act and chapter 323F, Hawaii Revised, Statutes, shall be repealed on June 30, 2012;
(3) The amendment made to section 28‑8.3(a)(12), Hawaii Revised Statutes, in section 29 of this Act, shall not be repealed when that section is repealed and reenacted on June 30, 2010, pursuant to Act 306, Session Laws of Hawaii 2006;
(4) The amendment made to section 89-6(d), Hawaii Revised Statutes, in section 42 of this Act, shall not be repealed when that section is repealed and reenacted on July 1, 2010, pursuant to Act 5, Special Session Laws of Hawaii 2008.