PREFILED DEC 18 2017
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REFERENCE TITLE: certificates of necessity |
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State of Arizona House of Representatives Fifty-third Legislature Second Regular Session 2018
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HB 2039 |
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Introduced by Representative Carter
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AN ACT
Amending sections 36‑2233, 36‑2234 and 36‑2236, Arizona Revised Statutes; relating to emergency services.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 36-2233, Arizona Revised Statutes, is amended to read:
36-2233. Certificate of necessity to operate an ambulance service; requirements; exceptions; service areas; expansion
A. Any person wishing to operate an ambulance service in this state shall apply to the department on a form prescribed by the director for a certificate of necessity.
B. The director shall issue a certificate of necessity if all of the following apply:
1. The ambulance service has a certificate of registration issued by the department for at least one ambulance pursuant to section 36‑2212.
2. The director finds that public necessity requires the service or any part of the service proposed by the applicant.
3. The director finds that the applicant is fit and proper to provide the service.
4. The applicant has paid the appropriate fees pursuant to section 36‑2240.
5. The applicant has filed a surety bond pursuant to section 36‑2237.
C. A certificate of necessity issued pursuant to subsection B of this section shall be for all or part of the service proposed by the applicant as determined necessary by the director for public convenience and necessity.
D. This section does not require a certificate of necessity for:
1. Vehicles and persons that are exempt from a certificate of registration pursuant to section 36‑2217.
2. Ambulance services operating under temporary authority pursuant to section 36‑2242.
E. The director may grant a service area by one or any combination of the following descriptions:
1. Metes and bounds.
2. Except as provided in subsection F of this section, a city, town or political subdivision not limited to a specific date. The merger or consolidation of two or more fire districts pursuant to section 48‑820 or 48‑822 does not expand the service area boundaries of an existing certificate of necessity.
3. A city, town or political subdivision as of a specific date that does not include annexation.
F. The merger or consolidation of two or more fire districts pursuant to section 48‑820 or 48‑822 does not expand the service area boundaries of an existing certificate of necessity. The director may approve an application to expand the service area boundaries of an existing certificate of necessity as a result of a fire district merger or consolidation only after the director determines need pursuant to the laws and rules for amending a certificate of necessity. The application and determination under this subsection apply only to the service area that is not previously included in the existing certificate of necessity.
Sec. 2. Section 36-2234, Arizona Revised Statutes, is amended to read:
36-2234. Hearings; waiver of hearing; rules; emergency action; judicial review
A. The director shall require a public hearing on any proposed action related to rates, fares or charges, operating or response times, bases of operation, or certificates of necessity or service area expansions under an existing certificate of necessity unless subsection C, E, or M of this section applies.
B. The following requirements apply to a public hearing held pursuant to subsection A of this section shall meet the following requirements:
1. The hearing shall be held pursuant to title 41, chapter 6, article 10.
2. The director shall mail notice of the hearing to every ambulance service in the affected region no later than fifteen days before the hearing.
3. The director may mail notice to other persons who the director determines are interested in the hearing.
4. In a hearing or rehearing conducted pursuant to this article, an ambulance service may be represented by a corporate officer, an employee or a designee who has been specifically authorized by the ambulance service to represent it.
C. The director may waive the hearing required under subsection A of this section if notification, including a general description of the proposed action of the department and the time and manner for any interested person to request a hearing, is given and all of the following apply:
1. Notification of the proposed action has been sent to every ambulance service in the affected region no later than fifteen days before the action.
2. The director has notified other persons who the director determines are interested in the proposed action no later than fifteen days before the action.
3. The director has published notice of the proposed action in a newspaper of general circulation in the affected region at least once each week for two consecutive weeks before the action is taken.
4. The director has received no requests within the fifteen day fifteen-day notification period for a hearing to be held on the proposed action.
D. If the director receives a request pursuant to subsection C, paragraph 4 of this section, the director shall hold a hearing in compliance with subsection B of this section.
E. The director shall not hold a hearing if a person requests a hearing regarding a rate increase that does not exceed the amount computed as follows:
1. Determine the percentage growth in the transportation consumer price index of the United States department of labor, bureau of labor statistics, from the end of the second preceding calendar year to the calendar year immediately preceding the calendar year for which the rate increase is requested.
2. Determine the percentage growth in the medical care consumer price index of the United States department of labor, bureau of labor statistics, from the end of the second preceding calendar year to the calendar year immediately preceding the calendar year for which the rate increase is requested.
3. Add the amount determined in paragraph 1 of this subsection to the amount determined in paragraph 2 of this subsection and divide the sum by two.
F. A rate increase authorized pursuant to subsection E of this section is deemed to be fixed by the department at the requested level. Notwithstanding subsection C of this section, the department shall hold a hearing pursuant to section 36‑2232, subsection E for any proposed uniform rate or charge that exceeds the annual rate increase prescribed in subsection E of this section. The department shall require the applicants to submit the following information signed by the designated financial officer and the chief executive of the ambulance service who has fiduciary responsibility for providing accurate financial information:
1. A financial statement for the previous twenty‑four months relating to the certificated areas.
2. Any additional information the department requires to analyze the request.
G. If an ambulance service with an established general public rate applies for a contract rate or range of rates that is up to thirty per cent percent less than its established rate, the director shall grant the rate without a public hearing or waiver, and without any right of intervention, unless within ninety days of after the filing of a completed application the director determines that the contract rate or range of rates applied for does not accurately reflect the cost and economics of providing the contract services, would adversely affect the service available to the general public in the area of service as designated by its certificate of necessity or would cause any fixed rate, fare or charge to the general public to be adversely affected.
H. If the department disallows a proposed contract rate pursuant to subsection G of this section, the ambulance service has a right to a hearing for review of the proposed contract rate or range of rates.
I. The director may adopt rules for the establishment of a contract rate or range of rates that may be implemented and that exceeds the thirty per cent percent rate variance identified pursuant to subsection G of this section.
J. Subsections G, H and I of this section are limited to contract rates or a range of rates applied for prescheduled, interfacility or convalescent transports.
K. A service contract between an ambulance service and a political subdivision of this state, including local fire districts, shall be filed with and approved by the department in accordance with the following requirements:
1. On receipt of the proposed contract, the department has fifteen days to review the contract and notify the ambulance service of any additional information the department requires, recommended corrections or any provision that does or may violate this article.
2. The ambulance service has fifteen days to provide the department with the information requested or to submit a revised or amended contract if required under paragraph 1 of this subsection.
3. The contract becomes effective fifteen days after the ambulance service complies with the department's request unless the department determines that any rate or charge or other provisions specified in the contract will cause any fixed rate or charge to the general public rate to be adversely affected or the contract would be in violation of the ambulance service's certificate of necessity.
4. If the department disallows a proposed contract pursuant to this subsection, the ambulance service has a right to a hearing for review of the proposed contract.
5. The rates and charges contained in the contract are the rates and charges fixed by the director in a decision or order for the ambulance service and conform to the ambulance service's current or subsequent general public rates and charges.
6. The area of response is within the ambulance service's certificated area.
L. In case of emergency, the director may take action providing for immediate suspension of a certificate of registration or a certificate of necessity, or both, under this section without notice or a hearing if the director determines that a potential threat to the public health and safety exists. If such an action is taken by the director, the director shall conduct a hearing within ten days after the date of the director's action unless the person against whom the action is directed waives the right to have a hearing held within ten days. If the ten day ten-day hearing requirement is waived, the director shall set a date mutually agreeable to the interested parties. The purpose of the hearing is to review the decision of the director to take such an action. The director shall make findings of fact and may continue, suspend or modify the director's action.
M. The director shall waive the hearing required under subsection A of this section if geographical changes in suboperation stations do not alter the service area or adversely affect approved response times.
N. Except as provided in section 41‑1092.08, subsection H, a final decision of the director is subject to judicial review pursuant to title 12, chapter 7, article 6.
Sec. 3. Section 36-2236, Arizona Revised Statutes, is amended to read:
36-2236. Nature of certificates of necessity; transfer; suspension; service areas
A. A certificate of necessity issued pursuant to this article is not a franchise, may be revoked by the director and does not confer a property right on its holder.
B. A certificate of necessity shall not be assigned or otherwise transferred without the written approval of the director. When If any certificate is assigned or transferred, the director shall issue to the assignee or transferee a new certificate that is valid only for the unexpired term of the transferred or assigned certificate.
C. In case of emergency, the director may suspend a certificate of necessity as provided in section 36‑2234.
D. If a certificate of necessity issued pursuant to this article includes any city, town or other political subdivision of this state, the service area shall be all the geographical area lying within the city, town, or political subdivision, unless the certificate issued by the director specifically excludes a portion of the city, town, or political subdivision. This subsection does not:
1. Affect the validity of any previously granted certificate for an unincorporated area lying within the boundaries of a city.
2. Apply to a new geographic area that results from a fire district merger or consolidation pursuant to section 48‑820 or 48‑822 unless the service area boundaries of an existing certificate of necessity have been expanded to include the new geographic area consistent with section 36‑2233, subsection F.