SB 3139: DOH; SHPDA; Function and Responsibilities; Certificate of Need Exemption

A BILL FOR AN ACT

RELATING TO THE STATE HEALTH PLANNING AND DEVELOPMENT AGENCY.

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

     SECTION 1.  Section 323D-2, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Health care" means the improvement of a person's health through the prevention, diagnosis, treatment, and amelioration or cure of disease, illness, injury, or other physical and mental impairment, regardless of the setting in which those services are delivered.  "Health care" includes oral health, behavioral health, and long-term care."

     SECTION 2.  Section 323D-12, Hawaii Revised Statutes, is amended to read as follows:

     "§323D-12  Health planning and development functions; state agency.  (a)  The state agency shall:

     (1)  Have as a principal function the responsibility for promoting [accessibility for all the people of the State to quality health care services at reasonable cost.  The state agency shall conduct such studies and investigations as may be necessary as to the causes of health care costs including inflation.  The state agency may contract for services to implement this paragraph.  The certificate of need program mandated under part V shall serve this function.  The state agency shall promote the sharing of facilities or services by health care providers whenever possible to achieve economies and shall restrict unusual or unusually costly services to individual facilities or providers where appropriate;] universal access to high-quality, equitable, and affordable health care for all the people of the State and a shared vision of the State's health care future;

    [(2)  Serve as staff to and provide technical assistance and advice to the statewide council and the subarea councils in the preparation, review, and revision of the state health services and facilities plan;

     (3)  Conduct the health planning activities of the State in coordination with the subarea councils, implement the state health services and facilities plan, and determine the statewide health needs of the State after consulting with the statewide council; and]

     (2)  Conduct the health planning activities of the State in collaboration with state agencies and with private health care sector participants to assess and address gaps or concerns affecting access, quality, and cost, including but not limited to administrative simplification and health information technology including artificial intelligence;

    [(4)] (3)  Administer the state certificate of need program pursuant to part V[.], and serve as staff to and provide technical assistance and advice to the statewide council and subarea councils; and

     (4)  Establish a state health services and facilities plan and update that plan at least every four years following consultation with the statewide council.

     (b)  The state agency may:

     (1)  Prepare [such] reports and recommendations on [Hawaii's] the State's health care costs and public or private efforts to reduce or control costs and health care quality as it deems necessary.  The [report] reports may include[, but not be limited to,] a review of health insurance plans[,]; the availability of various kinds of health insurance and malpractice insurance to consumers[,]; data-supported analysis and evaluation of the status of statewide and county health care services adequacy, accessibility, quality, equity, efficiency, and affordability, including comparisons to national and other state jurisdictions; and strategies for increasing competition in the health insurance field[.] and across the health care delivery system;

    [(2)  Prepare and revise as necessary the state health services and facilities plan.

     (3)  Prepare, review, and revise the annual implementation plan.

     (4)] (2)  Assist the statewide council in the performance of its functions[.];

    [(5)] (3)  Determine the need for new health services proposed to be offered within the State[.];

    [(6)] (4)  Assess existing health care services and facilities to determine whether there are redundant, excessive, or inappropriate services or facilities and make public findings of any that are found to be so.  The state agency shall weigh the costs of the health care services or facilities against the benefits the services or facilities provide and there shall be a negative presumption against marginal services[.];

    [(7)] (5)  Provide technical assistance to persons, public or private, in obtaining and filling out the necessary forms for the development of projects and programs[.];

    [(8)] (6)  Prepare reports, studies, and recommendations on emerging health issues, such as medical ethics, health care rationing, involuntary care, care for the indigent, and standards for research and development of biotechnology [and], genetic engineering[.], telehealth, artificial intelligence, and workforce development; and

    [(9)] (7)  Conduct [such] other activities as are necessary to meet the purposes of this chapter."

     SECTION 3.  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 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] up to thirty 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 Act;

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

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

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

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on January 30, 2050.

Report Title:

DOH; SHPDA; Function and Responsibilities; Certificate of Need Exemption

Description:

Amends the functions and responsibilities of the State Health Planning and Development Agency.  Adds a new definition of "health care" for chapter 323D, HRS.  Amends the exemption threshold for bed changes to up to thirty per cent of existing licensed bed types.  Exempts the Department of Health from certificate of need requirements.  Effective 1/30/2050.  (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 THE STATE HEALTH PLANNING AND DEVELOPMENT AGENCY.

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

     SECTION 1.  Section 323D-2, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Health care" means the improvement of a person's health through the prevention, diagnosis, treatment, and amelioration or cure of disease, illness, injury, or other physical and mental impairment, regardless of the setting in which those services are delivered.  Health care includes oral health, behavioral health, and long-term care."

     SECTION 2.  Section 323D-12, Hawaii Revised Statutes, is amended to read as follows:

     "§323D-12  Health planning and development functions; state agency.  (a)  The state agency shall:

     (1)  Have as a principal function the responsibility for promoting [accessibility for all the people of the State to quality health care services at reasonable cost.  The state agency shall conduct such studies and investigations as may be necessary as to the causes of health care costs including inflation.  The state agency may contract for services to implement this paragraph.  The certificate of need program mandated under part V shall serve this function.  The state agency shall promote the sharing of facilities or services by health care providers whenever possible to achieve economies and shall restrict unusual or unusually costly services to individual facilities or providers where appropriate;] universal access to high-quality, equitable, and affordable health care for all the people of the State and a shared vision of Hawaii's health care future;

    [(2)  Serve as staff to and provide technical assistance and advice to the statewide council and the subarea councils in the preparation, review, and revision of the state health services and facilities plan;

     (3)  Conduct the health planning activities of the State in coordination with the subarea councils, implement the state health services and facilities plan, and determine the statewide health needs of the State after consulting with the statewide council; and]

     (2)  Conduct the health planning activities of the State in collaboration with state agencies and with private health care sector participants to assess and address gaps or concerns affecting access, quality, and cost including, but not limited to, health insurance coverage and rates, health insurance benefits and affordability, workforce development and reimbursement, administrative simplification, and health information technology including artificial intelligence;

    [(4)] (3)  Administer the state certificate of need program pursuant to part V[.], and serve as staff to and provide technical assistance and advice to the statewide council and subarea councils; and

     (4)  Establish a state health services, workforce, and facilities plan and update that plan at least every four years following consultation with the statewide council.

     (b)  The state agency may:

     (1)  Prepare [such] reports and recommendations on Hawaii's health care costs and public or private efforts to reduce or control costs and health care quality as it deems necessary.  The [report] reports may include[, but not be limited to,] a review of health insurance plans, the availability of various kinds of health insurance and malpractice insurance to consumers, data-supported analysis and evaluation of the status of statewide and county health care services adequacy, accessibility, quality, equity, efficiency, and affordability, including comparisons to national and other state jurisdictions, and strategies for increasing competition in the health insurance field[.] and across the health care delivery system;

    [(2)  Prepare and revise as necessary the state health services and facilities plan.

     (3)  Prepare, review, and revise the annual implementation plan.

     (4)] (2)  Assist the statewide council in the performance of its functions[.];

    [(5)] (3)  Determine the need for new health services proposed to be offered within the State[.];

    [(6)] (4)  Assess existing health care services and facilities to determine whether there are redundant, excessive, or inappropriate services or facilities and make public findings of any that are found to be so.  The state agency shall weigh the costs of the health care services or facilities against the benefits the services or facilities provide and there shall be a negative presumption against marginal services[.];

    [(7)] (5)  Provide technical assistance to persons, public          or private, in obtaining and filling out the necessary forms for the development of projects and programs[.];

    [(8)] (6)  Prepare reports, studies, and recommendations on emerging health issues, such as medical ethics, health care rationing, involuntary care, care for the indigent, and standards for research and development of biotechnology [and] genetic engineering[.], telehealth, artificial intelligence, and workforce development; and

    [(9)] (7)  Conduct [such] other activities as are necessary to meet the purposes of this chapter."

     SECTION 3.  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 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] up to thirty 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 Act;

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

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

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

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act, upon its approval, shall take effect on July 1, 2026.

Report Title:

DOH; SHPDA; Function and Responsibilities; Certificate of Need Exemption

Description:

Amends the functions and responsibilities of the State Health Planning and Development Agency.  Adds a new definition of "health care."  Amends the exemption threshold for bed changes to up to thirty per cent of existing licensed bed types.  Exempts the Department of Health from certificate of need requirements.  Effective 7/1/2026.

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. 2761

Honolulu, Hawaii

RE:     S.B. No. 3139

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 3139, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE STATE HEALTH PLANNING AND DEVELOPMENT AGENCY,"

begs leave to report as follows:

     The purpose and intent of this measure is to update the functions and responsibilities of the State Health Planning and Development Agency.

     Specifically, this measure:

     (1)  Amends the statutory responsibilities of the State Health Planning and Development Agency;

     (2)  Defines "health care" for purposes of Chapter 323D, Hawaii Revised Statutes; and

     (3)  Exempts from certificate of need requirements:

          (A)  Bed changes that involve thirty per cent of a facility's total existing licensed beds within a two-year period; and

          (B)  Health care facilities or services operated by the Department of Health.

     Your Committee received written comments in support of this measure from the State Health Planning and Development Agency, Hawaii Medical Service Association, Grassroot Institute of Hawaii, Hawaii Association of Health Plans, and two individuals.

     Your Committee finds that this measure establishes as a principal function of the State Health Planning and Development Agency the promotion of universal access to high-quality, equitable, and affordable health care for all the people of the State.  Your Committee further finds that this focus is vital to Hawaii's public health as health care cost inflation continues to outpace general inflation, which decreases health care access and affordability.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3139, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

STAND. COM. REP. NO. 2292

Honolulu, Hawaii

RE:     S.B. No. 3139

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Health and Human Services, to which was referred S.B. No. 3139 entitled:

"A BILL FOR AN ACT RELATING TO THE STATE HEALTH PLANNING AND DEVELOPMENT AGENCY,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Amend the functions and responsibilities of the State Health Planning and Development Agency;

     (2)  Add a new definition of "health care" for chapter 323D, Hawaii Revised Statutes, that governs the State's health planning and resources development and health care cost control;

     (3)  Amend the exemption threshold for bed changes to up to thirty percent of existing licensed bed types; and

     (4)  Exempt the Department of Health from certificate of need requirements.

     Your Committee received testimony in support of this measure from the State Health Planning and Development Agency and Grassroot Institute of Hawaii.

     Your Committee received comments on this measure from the Hawaii Medical Service Association. 

     Your Committee finds that many of the State's large health care agencies and programs, including the Department of Health, Department of Human Services, and Hawaii Health Systems Corporation, have historically operated in isolation, leading to a lack of coordination in direction and outcomes.  Your Committee further finds that one of the missions of the State Health Planning and Development Agency is to help the State achieve a shared vision of the ideal future of health care in the State.  This measure modernizes the State Health Planning and Development Agency's principle statutory functions to better reflect its responsibilities and authority in promoting universal access to high-quality, equitable, and affordable health care for all the people of the State and a shared vision of the State's health care future.

     Your Committee acknowledges the concerns raised in testimony by the Hawaii Medical Service Association that this measure could be interpreted to expand the authority of the State Health Planning and Development Agency beyond its traditional health planning and facilities-based role, into areas such as health insurance coverage and rates, benefit design, reimbursement, and related matters that are governed under separate statutory and regulatory frameworks.  Therefore, amendments to this measure are necessary to address this concern.

     Your Committee has amended this measure by:

     (1)  Deleting language that would have specified that the health planning activities of the State Health Planning and Development Agency includes health insurance coverage and rates, health insurance benefits and affordability, and workforce development and reimbursement;

     (2)  Inserting language to require the State Health Planning and Development Agency to establish a state health services and facilities plan, rather than a state health services, workforce, and facilities plan;

     (3)  Inserting an effective date of January 30, 2050, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments 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. 3139, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3139, 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,