Bill Text: HI SB2211 | 2010 | Regular Session | Introduced
Bill Title: Hawaii Health Systems Corporation; Nonprofit Status; Plan; Appropriation
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced - Dead) 2010-02-10 - (S) Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [SB2211 Detail]
Download: Hawaii-2010-SB2211-Introduced.html
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THE SENATE |
S.B. NO. |
2211 |
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TWENTY-FIFTH LEGISLATURE, 2010 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO HEALTHCARE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Health care systems delivery expert Stroudwater Associates, as well as other experts, have recommended changes be made to the Hawaii health systems corporation to improve the delivery of Hawaii's hospital healthcare safety net. These changes entail making the Hawaii health systems corporation financially stable by reducing its operational expenses. These expenses include civil service labor costs, procurement impediments, a lack of scaled buying power, and other unavoidable inefficiencies that guarantee the Hawaii health systems corporation will continue to need subsidies in the range of $50 million to $100 million or more annually to operate. These subsidies are a burden to taxpayers unless dramatic change to the Hawaii health systems corporation are made.
The purpose of this Act is to:
(1) Convert the Hawaii health systems corporation to a nonprofit organization exempt from income tax under section 501 of the Internal Revenue Code and to a Hawaii nonprofit corporation;
(2) Authorize the Hawaii health systems corporation to issue general obligation bonds; and
(3) Remove civil service status of employees of the Hawaii health systems corporation and convert them to traditional benefits packages typically provided to a nonprofit organization exempt from income tax under section 501 of the Internal Revenue Code.
SECTION 2. Section 323F-2, Hawaii Revised Statutes, is amended to read as follows:
"§323F-2 Hawaii health systems
corporation[.]; transition to nonprofit status. (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.
(b) The corporate organization shall be divided into five regional systems, as follows:
(1) The Oahu regional health care system;
(2) The Kauai regional health care system;
(3) The Maui regional health care system;
(4) The east Hawaii regional health care system, 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 the north Kohala district, south Kohala district, north Kona district, and south Kona district;
and shall be identified as regional systems I, II, III, IV, and V, respectively.
(c) Not later than December 31, 2010, the board of directors of the Hawaii health systems corporation shall make the appropriate filing to be become a:
(1) Nonprofit organization exempt from income tax under section 501, (with respect to exemption from tax on corporations, certain trusts, etc.) of the Internal Revenue Code; and
(2) Hawaii nonprofit corporation under chapter 414D.
(d) Any provision of chapter 76 notwithstanding, any person subject to chapter 76 who was employed by the Hawaii health systems corporation prior to its conversion to a nonprofit organization under subsection (c) and who remains employed by the health facility after its conversion shall transition from a civil service employee under chapter 76 to a private sector employee with comparable salary and benefits as enjoyed by nonprofit healthcare institutions under section 501 of the Internal Revenue Code. Persons hired by the Hawaii health systems corporation on or after the date of its conversion to a nonprofit organization shall not be subject to chapter 76 and shall enjoy comparable salary and benefits as enjoyed by nonprofit healthcare institutions under section 501 of the Internal Revenue Code."
SECTION 3. (a) Upon becoming a nonprofit entity pursuant to section 2 of this Act, all assets of the Hawaii health systems corporation shall be transferred to the newly formed nonprofit entity.
(b) Upon becoming a nonprofit entity pursuant to section 2 of this Act:
(1) The new nonprofit entity shall assume the operation of all facilities operated by the Hawaii health systems corporation;
(2) The State shall continue to hold title to land and facilities occupied by the Hawaii health systems corporation;
(3) The State shall lease land and facilities under paragraph (2) to the newly formed nonprofit entity for a period of seventy-five years at a rate of $1 per year, subject to reasonable terms and conditions as may be required by the State; and
(4) The provisions of chapter 323F, Hawaii Revised Statutes, shall apply, as appropriate, to the newly formed nonprofit entity.
SECTION 4. All rights, powers, functions, and duties of the Hawaii health systems corporation are transferred to the newly formed nonprofit entity as provided in section 2 of this Act.
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.
SECTION 5. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of Hawaii health systems corporation relating to the functions transferred to the newly formed nonprofit entity as provided in section 2 of this Act shall be transferred with the functions to which they relate.
SECTION 6. The director of finance is authorized to issue general obligation bonds in the sum of $ or so much thereof as may be necessary and the same sum or so much thereof as may be necessary is appropriated for fiscal year 2010-2011 for the purpose of general repair and maintenance of the facilities of the Hawaii health systems corporation, and for expenses incurred in the transition of the Hawaii health systems corporation to a nonprofit entity pursuant to section 2 of this Act, including but not limited to:
(1) Compensating employees of the Hawaii health systems corporation who are transitioned from civil service status to private status pursuant to section 2 of this Act for accrued vacation leave as provided under section 78-23, Hawaii Revised Statutes; and
(2) Satisfaction of accounts payable that is deemed necessary by the board of directors of the Hawaii health systems corporation.
SECTION 7. The appropriation made and authorized by this Act shall not lapse at the end of the fiscal biennium for which the appropriation is made; provided that all moneys from the appropriation unencumbered as of June 30, 2012, shall lapse as of that date.
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect upon its approval; provided that section 6 shall take effect on July 1, 2010.
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INTRODUCED BY: |
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Report Title:
Hawaii Health Systems Corporation; Nonprofit Status; Appropriation
Description:
Transitions the Hawaii health systems corporation to federal and state nonprofit status. Makes appropriation for general obligation bonds for the repair and maintenance of facilities and transition expenses.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
