Hawaii State Hospital

Closes the Hawaii State Hospital.  Authorizes the Director of
Health to privatize the Hospital's current functions.  Creates a
joint legislative committee.  (SB1518 HD1)

THE SENATE                              S.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                     A BILL FOR AN ACT



 1      SECTION 1.   In 1991 the United States Department of Justice
 2 filed suit against the State of Hawaii in the United States
 3 District Court for the District of Hawaii for violations of the
 4 constitutional rights of patients at the Hawaii state hospital
 5 (HSH).  The suit was brought under the authority of the Civil
 6 Rights of Institutionalized Persons Act (CRIPA), 42 U.S.C.
 7 section 1997 et seq.  Concurrently, the State of Hawaii and the
 8 United States entered into a settlement agreement to correct the
 9 deficiencies at HSH, and the settlement agreement became an order
10 of the federal court.  The major problems that prompted the CRIPA
11 action against the State included inadequate staffing, inadequate
12 treatment and rehabilitation plans, the use and overuse of
13 medication, fire safety issues, inappropriate use and inadequate
14 monitoring of restraint and seclusion, insufficient medical care,
15 inadequate clothing and hygiene items, inappropriate or
16 inadequate treatment of dual-diagnosis patients,  and unclear
17 lines of authority and responsibility for administration and
18 staff.  In the 1991 settlement agreement, the State committed
19 itself to achieving constitutional levels of care for HSH
20 patients by, among other things, establishing specific patient-

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 1 to-staff ratios, using restraint and seclusion only when
 2 clinically necessary and under strict controls, eliminating
 3 building and fire hazards, providing adequate medical care,
 4 providing effective, individualized treatment programs, ensuring
 5 appropriate use of psychotropic medications, developing adequate
 6 policies and procedures, and improving facility organization.
 7      The State did make some progress toward compliance with the
 8 requirements of the settlement agreement, notably the
 9 construction of new buildings and resolution of fire safety,
10 clothing, and hygiene issues.  But in January 1995, the United
11 States District Court found the State in contempt of court for
12 failure to achieve important requirements.  Chief among the
13 remaining problems were:
14      (1)  Failure to ensure that restraint and seclusion were
15           applied safely and appropriately, and monitored
16           adequately;
17      (2)  Patient-to-staff ratios that did not meet the
18           requirements of the settlement agreement, along with
19           extensive use of overtime and of agency staff;
20      (3)  Continuing incidence of patient abuse and neglect; and
21      (4)  Lack of treatment.
22      Under court order, the United States and the State of Hawaii
23 negotiated a stipulation and a detailed remedial plan designed to
24 solve these problems.  In part to address the problems caused by

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 1 inadequate staffing, that stipulation and plan included measures
 2 to provide appropriate services in the community for HSH patients
 3 who did not require hospital-level care but whose only barrier to
 4 discharge was lack of an appropriate community placement.  That
 5 stipulation and plan became an order of the court in January
 6 1995.  Since then other orders have been entered that addressed
 7 ongoing problems:  reporting and investigating abuse and neglect,
 8 staffing ratios, excessive use of overtime that compromised
 9 patient care, treatment plans, protection of patients from harm,
10 and the development of community resources to allow discharge of
11 patients who do not need hospital care.  Although the hospital
12 has made significant progress on many fronts, particularly on
13 staffing ratios and in developing the necessary community
14 resources, it has still not been able to resolve some of the more
15 difficult problems at HSH.
16      At a status conference on February 1, 1999, the United
17 States District Court stated that HSH is still "grossly out of
18 compliance" with significant requirements of its orders, most
19 notably the requirement that the State provide adequate treatment
20 and treatment planning for all HSH patients.  The court ordered
21 that the State of Hawaii and the United States Department of
22 Justice, through a five-member compliance committee, jointly
23 identify and implement solutions to all outstanding issues of

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 1 material significance for compliance, and that by June 15, 1999,
 2 the State "shall have in place programs designed to rectify each
 3 and every one of the material issues identified necessary to
 4 bring the facilities and services into compliance with the
 5 requirements of the court orders by December 20, 1999."  The
 6 court has also stated that unless the State takes corrective
 7 action in accordance with the compliance committee's plans by
 8 December 20, 1999, the court will appoint a special master to
 9 assume control of the hospital and the State's mental health
10 programs and services and to take all necessary corrective
11 action, all at the State's expense.
12      To avoid this drastic and very costly outcome, and to
13 maintain control of its services and facilities, the State must
14 decisively address the needs of its people with serious mental
15 illness who are hospitalized at HSH and those who may require
16 hospitalization in the future.  The State must bring its services
17 into conformance with standards of best practice consistent with
18 the national trend toward noninstitutional treatment.  From the
19 perspective of both cost control and quality of service, it is
20 clear both from the experience of other jurisdictions and from
21 HSH's own struggles that the best approach is to provide the
22 necessary service through private providers in the community, not
23 at a state hospital facility.  Studies over the past fifteen

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 1 years have found that most state hospitals across the nation have
 2 experienced inflexible bureaucratic procedures, rigid civil
 3 service systems, and line item budgets that have interfered with
 4 almost every aspect of their functioning.  Another prevalent
 5 problem found is that state hospitals are isolated and isolating,
 6 not just providing inferior treatment but the wrong kind of
 7 treatment.  Studies further find that most mentally ill should
 8 remain in their communities because treatment is usually most
 9 effective in community settings.  Acutely ill patients in need of
10 hospitalization can be treated in general hospitals that are
11 equipped to also handle any complicating medical problems that
12 often accompany acute psychiatric illnesses.  Despite these
13 findings, state hospitals, including HSH, have continued to cope
14 with having to admit large numbers of cases that do not
15 clinically require hospital level care, and clinically should be
16 placed in less restrictive and more integrated community
17 treatment and rehabilitation settings.  Based on such findings
18 under its settlement agreement, Pennsylvania successfully closed
19 its Philadelphia state hospital and moved all but 15 of 516
20 patients into private community-based services ranging from
21 emergency, to residential, to vocational programs with assertive
22 community treatment teams as the hub of support to discharged
23 patients.  To address the needs of those who might otherwise

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 1 require hospitalization, diversion services were put in place
 2 providing a range of interventions from medication services, to
 3 respite, to stabilization.  Acute hospitalization was provided
 4 through arrangements with two general hospitals.  Under its
 5 consent decree, Massachusetts deinstitutionalized and moved
 6 patients into a community-based system of care that not only had
 7 a positive impact on the quality of life for patients, but also
 8 reduced or eliminated the need for state hospital treatment.
 9      Similarly, the department of health must replace the
10 functions of HSH with a comprehensive community-based program of
11 mental health treatment, rehabilitation, and housing services,
12 including appropriately secure settings for those who remain a
13 danger to others, but do not require inpatient psychiatric care.
14 The heightened level of acuity and services needed by individuals
15 hospitalized at HSH and by individuals who otherwise would be
16 admitted to the hospital are best provided through contracts with
17 private providers of service in the community.  Private providers
18 are best able to meet these individuals' treatment and
19 rehabilitation needs, needs which HSH has not been able to
20 successfully address.  Because the private sector is already
21 capable of furnishing care that meets the standards required by
22 CRIPA, it makes sense for the State to avail itself of those
23 services rather than continue struggling to develop the necessary

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 1 standards in-house.  In this manner the State may avoid both
 2 losing control over its mental health services system and
 3 incurring the considerable and uncontrollable expense of a
 4 federally appointed master.  The legislature believes that
 5 privatization of HSH's current functions is the best and most
 6 cost-effective way to achieve constitutional levels of care for
 7 its mentally ill populace and to meet the requirements of the
 8 1991 settlement agreement and subsequent court orders.
 9      The purpose of this Act is to:
10      (1)  Close the Hawaii state hospital;
11      (2)  Authorize the director of health to privatize the
12           Hawaii state hospital's current functions; and
13      (3)  Create a joint legislative committee to oversee the
14           efforts to address HSH.
15      SECTION 2.   Chapter 334, Hawaii Revised Statutes, is
16 amended by adding a new section to be appropriately designated
17 and to read as follows:
18      "334-A  Contracts for facilities and services.  (a)  The
19 director may contract with any person for:
20      (1)  The development or operation of private in-state
21           psychiatric facilities;
22      (2)  The placement of patients in existing private or public
23           psychiatric facilities; and

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 1      (3)  The provision of:
 2           (A)  Crisis intervention and stabilization services;
 3           (B)  Intensive treatment and wraparound services;
 4           (C)  Diversion services;
 5           (D)  Special treatment facilities or therapeutic living
 6                programs as defined in section 334-1;
 7           (E)  Case management services;
 8           (F)  Housing services; and
 9           (G)  Other mental health treatment and rehabilitation
10                services.
11 These services shall be for persons involuntarily hospitalized
12 under this chapter for whom the services cannot be reimbursed,
13 covered, or provided by an insurer, plan, or other person; for
14 persons committed to the custody of the director of health under
15 chapter 704; and for persons appropriately hospitalized under
16 chapter 704 or 706.
17      (b)  The director shall be responsible for the appropriate
18 placement of all persons placed in facilities or services
19 contracted for by the director under subsection (a) who are:
20      (1)  Involuntarily hospitalized pursuant to this chapter for
21           whom the services cannot be reimbursed, covered, or
22           provided by an insurer, plan, or other person;
23      (2)  Committed to the custody of the director under chapter
24           704; or

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                                     S.B. NO.           H.D. 1

 1      (3)  Appropriately hospitalized under chapter 704 or 706.
 2      Any such person placed in facilities or services contracted
 3 for by the director who leaves or remains away from the
 4 facilities or services, without permission, may be apprehended
 5 and returned to the facility or services by any employee of the
 6 department of health or by any police officer without any warrant
 7 or further proceeding.
 8      (c)  The department shall:
 9      (1)  See that patients who receive services under contract
10           pursuant to subsection (a) receive the care and
11           treatment for which the department has contracted;
12      (2)  Make periodic reviews of the records of each person
13           committed to the director's custody or hospitalized
14           pursuant to this chapter, chapter 704, or chapter 706;
15      (3)  In suitable cases, discharge or place on authorized
16           absence persons committed to the director's custody or
17           hospitalized pursuant to this chapter, chapter 704, or
18           chapter 706; and
19      (4)  Keep a medical record of each person committed to the
20           director's custody or hospitalized pursuant to this
21           chapter, chapter 704, or chapter 706."
22      SECTION 3.  Section 334-3(a), Hawaii Revised Statutes, is
23 amended to read as follows:  

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                                     S.B. NO.           H.D. 1

 1      "(a)  The department of health within the limits of
 2 available funds within the designated programs, shall promote and
 3 provide for the establishment and operation of a community-based
 4 mental health system responsive to the needs of persons of all
 5 ages, ethnic groups, and geographical areas of the State,
 6 reflective of an appropriate distribution of resources and
 7 services, and monitored and evaluated in terms of standards, goal
 8 attainment, and outcomes.  The elements of the system shall be
 9 defined by departmental rules recognizing the need for at least
10 the following services:
11      (1)  Informational and educational services to the general
12           public and to lay and professional groups;
13      (2)  Collaborative and cooperative services with public and
14           private agencies and groups for the prevention and
15           treatment of mental or emotional disorders and
16           substance abuse and rehabilitation of patients;
17      (3)  Consultation services to the judiciary, to educational
18           institutions, and to health and welfare agencies;
19      (4)  Case management, outreach, and follow-up services;
20      (5)  Emergency crisis and noncrisis intervention services
21           accessible to residents of all service areas;
22      (6)  Community-based, relevant, and responsive outpatient
23           services;

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 1      (7)  Community residential care comprising a comprehensive
 2           range of small, homelike, and appropriately staffed
 3           treatment and rehabilitation facilities;
 4      (8)  Short-term psychiatric [hospitalization] treatment,
 5           preferably in facilities where access to other health
 6           and medical services are readily available;
 7      (9)  Intensive psychiatric [hospitalization] treatment for
 8           patients in need of long-term, highly structured, or
 9           highly specialized care and treatment under section
10           334-A, and provision of appropriate community
11           resources;
12     (10)  Training programs, activities, and staffing standards
13           for the major mental health disciplines and ancillary
14           services; and
15     (11)  Rehabilitative services for hospital and community-
16           based individuals who have experienced short- or long-
17           term mental or emotional disorders and substance
18           abuse."
19     SECTION 4.  Section 334-4, Hawaii Revised Statutes, is
20 amended to read as follows:
21     "334-4  Personnel for mental health program.  The director
22 shall appoint professional and nonprofessional staff as the
23 director deems necessary to carry out the state mental health

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 1 program and for which appropriations are available.  Positions
 2 for psychiatrists are exempted from chapters 76 and 77.  The
 3 director may employ psychiatrists as needed by the department on
 4 a contractual basis, subject to the approval of the governor.
 5 [The director may appoint an administrator, three associate
 6 hospital administrators, a director of psychosocial
 7 rehabilitation, a chief of the department of nursing, a risk
 8 manager, a patients' rights advisor, and a facilities plant
 9 engineer for the state hospital established pursuant to section
10 334-31 and these positions shall be exempt from chapters 76 and
11 77.]"
12     SECTION 5.  Section 334-6(b), Hawaii Revised Statutes, shall
13 be amended to read as follows:
14     "(b)  Every person hospitalized at a psychiatric facility or
15 receiving treatment services through a community mental health
16 center under the jurisdiction of the State or a county, or at a
17 psychiatric facility or through a community mental health center
18 which derives more than fifty per cent of its revenues from the
19 general fund of the State, or pursuant to contract with the
20 director under section 334-A, shall be liable for the expenses
21 attending their reception, maintenance, and treatment and any
22 property not exempt from execution belonging to the person shall
23 be subject to sequestration for the payment of the expenses.

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                                     S.B. NO.           H.D. 1

 1 Every parent or legal guardian of a patient who is a minor and
 2 every spouse or reciprocal beneficiary of a patient shall be
 3 liable for the expenses attending the reception, maintenance, and
 4 treatment of that minor child or spouse or reciprocal beneficiary
 5 who is hospitalized at a psychiatric facility or receiving
 6 treatment through a community mental health center under the
 7 jurisdiction of the State or a county, or at a psychiatric
 8 facility or through a community mental health center which
 9 derives more than fifty per cent of its revenues from the general
10 fund of the State[.], or pursuant to contract with the director
11 under section 334-A."
12     SECTION 6.  Section 334-74, Hawaii Revised Statutes, is
13 amended to read as follows:
14     "334-74  Transfer of residents of correctional facilities.
15 If any resident of a state correctional facility is in need of
16 [hospital] acute psychiatric treatment for [a primary diagnosis
17 of] mental illness, the director of public safety or the officer
18 in charge of the correctional facility may file with the director
19 of health an application for the transfer of the resident to [the
20 state hospital] a facility operated by the department of health
21 or at which the director of health contracts for services,
22 together with the certificate of a psychiatrist or psychologist
23 employed by [either] the department of health[, or the department

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                                     S.B. NO.           H.D. 1

 1 of public safety] showing the need for [hospital] such treatment,
 2 and, upon approval of the application by the director of health,
 3 the official having custody of the resident shall transfer the
 4 resident to the [state hospital] facility operated by the
 5 department of health or at which the director of health contracts
 6 for care and treatment.  The official effecting the transfer of
 7 the resident shall keep the [administrator of the state hospital]
 8 director of health informed of the maximum period of commitment
 9 of the resident to the director of public safety, and, if the
10 continued [hospitalization] care of the resident beyond the
11 expiration of the period is deemed necessary, the [administrator
12 of the state hospital] director of health shall institute the
13 [admission] procedures required to detain the resident as a
14 patient notwithstanding the resident's release from the state
15 correctional facility; provided that a judicial hearing pursuant
16 to sections 334-60.2 to 334-60.7 be held by the same circuit
17 court that sentenced the resident.  In the event that discharge
18 from the [hospital] facility operated by the department of health
19 or at which the director of health contracts for services occurs
20 before the expiration of the maximum period of commitment or
21 confinement, the resident shall be returned to the appropriate
22 state correctional facility.

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                                     S.B. NO.           H.D. 1

 1     As used in this section, "resident" means any person serving
 2 a sentence in a state correctional facility or any child or minor
 3 detained in a state correctional facility."
 4     SECTION 7.  Section 334-103, Hawaii Revised Statutes, is
 5 amended to read as follows:
 6     "334-103  Program elements.  The following shall be the
 7 program elements of the system.  These shall be designed to
 8 provide, at every level, alternatives to institutional settings.
 9 Applicants applying to operate program elements shall show how
10 each of these elements works with the current programs in the
11 community the facility will serve.  Applicants may apply for
12 operation under the following program elements:
13     (1)   A short-term crisis residential alternative to
14           hospitalization for individuals experiencing an acute
15           episode or situational crisis.  The program shall be
16           available for admissions twenty-four hours a day, seven
17           days a week.  The primary focus of this element shall
18           be on reduction of the crisis, stabilization,
19           diagnostic evaluation, and assessment of the person's
20           existing support system, including recommendations for
21           referrals upon discharge.  This service in the program
22           shall be designed for persons who would otherwise be
23           referred to an acute inpatient psychiatric unit;

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                                     S.B. NO.           H.D. 1

 1     (2)   A long-term residential treatment program for clients
 2           who would otherwise be living marginally in the
 3           community with little or no service support, and who
 4           would return many times to the hospital for treatment.
 5           It also will serve those who are referred to, and
 6           maintained in, state [hospitals] facilities or nursing
 7           homes, or private or public facilities or programs
 8           under contract with the director pursuant to section
 9           334-A, because they require long-term, intensive
10           support.  This service shall be designed to provide a
11           rehabilitation program for the so-called "chronic"
12           patient who needs long-term support in order to develop
13           independent living skills.  This program goes beyond
14           maintenance to provide an active rehabilitation focus
15           for these individuals;
16     (3)   A transitional residential program designed for persons
17           who are able to take part in programs in the general
18           community, but who, without the support of counseling,
19           as well as the therapeutic community, would be at risk
20           of returning to the hospital.  These programs may
21           employ a variety of staffing patterns and are for
22           persons who are expected to move toward a more
23           independent living setting.  The clients shall be

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 1           expected to play a major role in the functioning of the
 2           household, and shall be encouraged to accept increasing
 3           levels of responsibility, both in the residential
 4           community, and in the community as [[]a[]] whole.
 5           Residents are required to be involved in daytime
 6           activities outside of the facility which are relevant
 7           to their personal goals and conducive to their
 8           achieving more self-sufficiency; or
 9     (4)   A semisupervised, independent, but structured living
10           arrangement for persons who do not need the intensive
11           support of the system elements of paragraph (1), (2),
12           or (3), but who, without some support and structure,
13           are at risk of requiring hospitalization.  The small
14           cooperative housing units shall function as independent
15           households with direct linkages to staff support in
16           case of emergencies, as well as for regular assessment
17           and evaluation meetings.  Individuals may use satellite
18           housing as a transition to independent living, or may
19           remain in this setting indefinitely in order to avoid
20           the need for more intensive settings.  This element is
21           for persons who only need minimum professional or
22           paraprofessional support in order to live in the
23           community.  These units should be as normative as the

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 1           general living arrangements in the communities in which
 2           they are developed."
 3     SECTION 8.  Chapter 334, part III, Hawaii Revised Statutes,
 4 is repealed.
 5     SECTION 9.  No contract made by the director of health
 6 pursuant to the authority conferred by the new section added to
 7 chapter 334, Hawaii Revised Statutes, in section 2 of this Act
 8 shall be void or deemed to be void as contrary to the merit
 9 principles, or any provision of chapters 76, 77, or 89, Hawaii
10 Revised Statutes, or Act 230, Sessions Laws of Hawaii 1998.
11     No permanent employee of the department of health who is not
12 exempt from civil service under section 76-16, Hawaii Revised
13 Statutes, shall be laid off or separated from public employment
14 as a consequence, if the director of health makes a contract
15 pursuant to the authority conferred by the new section added to
16 chapter 334, Hawaii Revised Statutes, by section 2 of this Act.
17 The employee shall remain in the employment of the State without
18 any reduction in salary or loss of seniority.  The employee shall
19 be transferred to some other position for which the employee is
20 eligible under the personnel laws of the State, or offered
21 retraining if necessary to qualify for or perform the duties and
22 responsibilities of a new or different comparable or better
23 position in the civil service.  The director of health shall

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 1 prepare and submit a list of all permanent employees for whom
 2 positions for transfer are required, to the director of human
 3 resources development.  The employees on the list for whom
 4 retraining is needed shall be identified.  The directors of
 5 health and human resources development shall ensure that each
 6 employee is offered an appropriate position.  An employee who
 7 refuses a position offered pursuant to this section shall be
 8 entitled to all rights and benefits of an employee laid off under
 9 chapter 76, Hawaii Revised Statutes, because the employee's
10 position has been abolished due to lack of work.  All
11 appropriations heretofore made to or held by the department of
12 health to compensate an employee transferred to another
13 department or to another program of the department of health,
14 shall be transferred to the program or department to which the
15 employee is transferred.
16     SECTION 10.  (a)  There is established a joint legislative
17 committee on the Hawaii state hospital (committee) to carry out
18 the purposes of this Act.  The committee shall be composed of
19 eight members as follows:
20     (1)   Four members of the house of representatives, who shall
21           all be appointed by the speaker of the house of
22           representatives, three of whom shall be the chairs or
23           vice chairs of the house committees on health, human
24           services and housing, and finance; and

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 1     (2)   Four members of the senate, who shall all be appointed
 2           by the president of the senate, two of whom shall be
 3           the chairs or vice chairs of the senate committees on
 4           health and human services and ways and means.
 5     (b)  The committee shall:
 6     (1)   Review the concerns and recommendations raised by the
 7           compliance committee established pursuant to the
 8           federal court order dated March 18, 1999 in United
 9           States v. Hawaii, civ. no. 91-00137;
10     (2)   Review any plans presented by the compliance committee
11           or the department of health to comply with the court
12           order; and
13     (3)   Examine the fiscal issues and implications of any plans
14           and recommendations for compliance with the court
15           order.
16     (c)  The committee may establish an expert panel, whose
17 members may include nationally-recognized professionals in
18 relevant fields to:
19     (1)   Advise the committee;
20     (2)   Evaluate any plans to meet the terms of the court
21           order; and
22     (3)   Provide alternative models for compliance.

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 1     (d)  The committee shall submit its findings and
 2 recommendations to the legislature no later than
 3 ___________________________, 1999.
 4     SECTION 11.  There is appropriated out of the general
 5 revenues of the State of Hawaii the sum of $            or so
 6 much thereof as may be necessary for fiscal year 1999-2000 and
 7 $            or so much thereof as may be necessary for fiscal
 8 year 2000-2001 for the purposes of this Act.
 9     The sums appropriated shall be expended by the department of
10 health for the purposes of this Act.
11     SECTION 12.  In codifying the new section added to chapter
12 334, Hawaii Revised Statutes, by section 2 of this Act, the
13 Revisor of the Statutes shall substitute the appropriate section
14 number for the letter used in the section designation of the Act.
15     SECTION 13.  Statutory material to be repealed is bracketed.
16 New statutory material is underscored. 
17     SECTION 14.  This Act shall take effect upon its approval,
18 except that:  
19     (1)   Section 11 shall take effect on July 1, 1999; and
20     (2)   Sections 4 and 8 shall take effect on July 1, 2000.