SB 1423: RELATING TO AMENDING SECTION 323D-54, HAWAII REVISED STATUTES, TO EXEMPT THE DEPARTMENT OF HEALTH FROM CERTIFICATE OF NEED REQUIREMENTS.

A BILL FOR AN ACT

RELATING TO AMENDING SECTION 323D-54, HAWAII REVISED STATUTES, TO EXEMPT THE DEPARTMENT OF HEALTH FROM CERTIFICATE OF NEED REQUIREMENTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 323D-54, Hawaii Revised Statutes, is amended to read as follows:

     "§323D-54  Exemptions from certificate of need requirements.  Nothing in this part or rules with respect to the requirement for certificates of need applies to:

     (1)  Offices of physicians, dentists, or other practitioners of the healing arts in private practice as distinguished from organized ambulatory health care facilities, except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any private office or clinic involving a total expenditure in excess of the expenditure minimum;

     (2)  Laboratories, as defined in section 321-11(12), except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any laboratory involving a total expenditure in excess of the expenditure minimum;

     (3)  Dispensaries and first aid stations located within business or industrial establishments and maintained solely for the use of employees; provided [such] that those facilities do not regularly provide inpatient or resident beds for patients or employees on a daily twenty-four-hour basis;

     (4)  Dispensaries or infirmaries in correctional or educational facilities;

     (5)  Dwelling establishments, such as hotels, motels, and rooming or boarding houses that do not regularly provide health care facilities or health care services;

     (6)  Any home or institution conducted only for those who, pursuant to the teachings, faith, or belief of any group, depend for healing upon prayer or other spiritual means;

     (7)  Dental clinics;

     (8)  Nonpatient areas of care facilities such as parking garages and administrative offices;

     (9)  Bed changes that involve ten per cent or ten beds of existing licensed bed types, whichever is less, of a facility's total existing licensed beds within a two‑year period;

    (10)  Projects that are wholly dedicated to meeting the State's obligations under court orders, including consent decrees, that have already determined that need for the projects exists;

    (11)  Replacement of existing equipment with its modern-day equivalent;

    (12)  Primary care clinics under the expenditure thresholds referenced in section 323D-2;

    (13)  Equipment and services related to that equipment, that are primarily invented and used for research purposes as opposed to usual and customary diagnostic and therapeutic care;

    (14)  Capital expenditures that are required:

          (A)  To eliminate or prevent imminent safety hazards as defined by federal, state, or county fire, building, or life safety codes or regulations;

          (B)  To comply with state licensure standards;

          (C)  To comply with accreditation standards, compliance with which is required to receive reimbursements under Title XVIII of the Social Security Act or payments under a state plan for medical assistance approved under Title XIX of [such] that Act;

    (15)  Extended care adult residential care homes and assisted living facilities; [or]

    (16)  Other facilities or services that the agency through the statewide council chooses to exempt, by rules pursuant to section 323D-62[.];

    (17)  Health care facilities operated or services provided by the department of health;

    (18)  Chronic renal dialysis centers; or

    (19)  Psychiatric behavioral health services."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect upon its approval.

Report Title:

DOH; SHPDA; Chronic Renal Dialysis Centers; Psychiatric Behavioral Health Services; Certificate of Need; Exemption

Description:

Exempts health care facilities operated or services provided by the Department of Health, chronic renal dialysis centers, and psychiatric behavioral health services from the State Health Planning and Development Agency's certificate of need requirements.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO AMENDING SECTION 323D-54, HAWAII REVISED STATUTES, TO EXEMPT THE DEPARTMENT OF HEALTH FROM CERTIFICATE OF NEED REQUIREMENTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 323D-54, Hawaii Revised Statutes, is amended to read as follows:

     "§323D-54  Exemptions from certificate of need requirements.  Nothing in this part or rules with respect to the requirement for certificates of need applies to:

     (1)  Offices of physicians, dentists, or other practitioners of the healing arts in private practice as distinguished from organized ambulatory health care facilities, except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any private office or clinic involving a total expenditure in excess of the expenditure minimum;

     (2)  Laboratories, as defined in section 321-11(12), except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any laboratory involving a total expenditure in excess of the expenditure minimum;

     (3)  Dispensaries and first aid stations located within business or industrial establishments and maintained solely for the use of employees; provided [such] those facilities do not regularly provide inpatient or resident beds for patients or employees on a daily twenty-four-hour basis;

     (4)  Dispensaries or infirmaries in correctional or educational facilities;

     (5)  Dwelling establishments, such as hotels, motels, and rooming or boarding houses that do not regularly provide health care facilities or health care services;

     (6)  Any home or institution conducted only for those who, pursuant to the teachings, faith, or belief of any group, depend for healing upon prayer or other spiritual means;

     (7)  Dental clinics;

     (8)  Nonpatient areas of care facilities such as parking garages and administrative offices;

     (9)  Bed changes that involve ten per cent or ten beds of existing licensed bed types, whichever is less, of a facility's total existing licensed beds within a two-year period;

    (10)  Projects that are wholly dedicated to meeting the State's obligations under court orders, including consent decrees, that have already determined that need for the projects exists;

    (11)  Replacement of existing equipment with its modern-day equivalent;

    (12)  Primary care clinics under the expenditure thresholds referenced in section 323D-2;

    (13)  Equipment and services related to that equipment, that are primarily invented and used for research purposes as opposed to usual and customary diagnostic and therapeutic care;

    (14)  Capital expenditures that are required:

          (A)  To eliminate or prevent imminent safety hazards as defined by federal, state, or county fire, building, or life safety codes or regulations;

          (B)  To comply with state licensure standards;

          (C)  To comply with accreditation standards, compliance with which is required to receive reimbursements under Title XVIII of the Social Security Act or payments under a state plan for medical assistance approved under Title XIX of [such] that Act;

    (15)  Extended care adult residential care homes and assisted living facilities; [or]

    (16)  Other facilities or services that the agency through the statewide council chooses to exempt, by rules pursuant to section 323D-62[.]; or

    (17)  Health care facilities operated or services provided by the department of health."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect upon its approval.

Report Title:

DOH; SHPDA; Certificate of Need; Exemption

Description:

Amends section 323D-54, HRS, to exempt the Department of Health from the State Health Planning and Development Agency's certificate of need requirements.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 325

Honolulu, Hawaii

RE:    S.B. No. 1423

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Health and Human Services, to which was referred S.B. No. 1423 entitled:

"A BILL FOR AN ACT RELATING TO AMENDING SECTION 323D-54, HAWAII REVISED STATUTES, TO EXEMPT THE DEPARTMENT OF HEALTH FROM CERTIFICATE OF NEED REQUIREMENTS,"

begs leave to report as follows:

     The purpose and intent of this measure is to exempt health care facilities operated or services provided by the Department of Health from the State Health Planning and Development Agency's certificate of need requirements.

     Your Committee received testimony in support of this measure from the Department of Health, Grassroot Institute of Hawaii, and one individual.

     Your Committee finds that prior approval, known as the certificate of need, from the State Health Planning and Development Agency is required to construct, expand, alter, convert, develop, initiate, or modify a health care facility or health care services in the State.  Your Committee further finds that the Department of Health, as a governmental entity, addresses health care needs not otherwise met by the private sector, and which require funding from the Legislature.  This measure improves the Department of Health's capacity, efficiency, and timeliness in responding to health care needs throughout the State.

     Your Committee has amended this measure by:

     (1)  Inserting language to exempt chronic renal dialysis centers and psychiatric behavioral health services from the State Health Planning and Development Agency's certificate of need requirements; and

     (2)  Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Health and Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1423, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1423, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Health and Human Services,