Health Care Community

Authorizes the housing and community development corporation of
Hawaii to work in partnership with private sector entities to
develop health care communities in the State.  Establishes a
health care community revolving fund to make loans to businesses
for the construction of the health care community.

THE SENATE                              S.B. NO.           1625
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that in the twenty-first
 2 century, health care providers can no longer focus only on
 3 helping sick and injured people get better.  In Hawaii, there is
 4 a mounting and unanswered problem of providing health care for
 5 seniors.  The emphasis must be on creating health care
 6 communities where wellness and prevention go hand in hand with
 7 diagnosis and treatment.  In health care communities, people will
 8 be empowered to make healthy choices in part by having
 9 information, facilities, and opportunities provided by a state-
10 of-the-art health care network integrated within the community.
11 People will participate in their health care, staying well and
12 changing illness and injury into starting points for growth.
13      One example of developing healthy communities is to
14 intentionally place health care providers in a medical mall
15 setting within the community.  Health care communities can
16 utilize a medical mall setting but are not restricted to that
17 particular type of setting.  A mall location would provide
18 sufficient room for an initial phase of development to meet
19 immediate needs, second and third phases to provide support for

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 1 first-phase facilities and meet other needs, and room for future
 2 phases to provide flexibility to meet the ever-changing
 3 requirements of health care.  Around the mall, or in other types
 4 of settings, residential areas for health care providers and
 5 others should be developed, with inclusion of amenities including
 6 jogging trails, bicycle paths, parks, and pools, to promote a
 7 healthy lifestyle for residents.
 8      The legislature finds that health care communities fit
 9 within state plans to strengthen Hawaii's economy by developing
10 science and technology industries, and will provide a direct
11 boost to the health and tourism industries, the two largest
12 industries in the State.  Because health care is a clean, quiet
13 industry, the legislature finds that the proposed health care
14 community will also bring jobs closer to residential areas
15 without negatively affecting those areas.  There is a need for
16 privately initiated development of the health care industry and
17 the government's role is to support and facilitate these efforts.
18      The legislature further finds that Hawaii's health care
19 industry and visitor industry, the State's economy, and Hawaii
20 residents will benefit significantly.  In particular, a health
21 care community will:
22      (1)  Provide state-of-the-art health care for Hawaii
23           residents;

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 1      (2)  Strengthen the state economy;
 2      (3)  Create more high-paying jobs near residential areas;
 3      (4)  Provide a clean, quiet industry;
 4      (5)  Increase revenue for area businesses;
 5      (6)  Increase tax revenue for the State;
 6      (7)  Support the State's plans to increase Hawaii's sports
 7           and recreation industry;
 8      (8)  Enhance Hawaii's ability to meet the needs of an aging
 9           population;
10      (9)  Bring health services to Hawaii that might not
11           otherwise be supported by the State's population base;
12     (10)  Boost the State's two largest industries--tourism and
13           health care;
14     (11)  Become a major component of the State's goal of
15           developing the science and technology industries; and
16     (12)  Position Hawaii as a leader in health care in the Asia-
17           Pacific region.
18      The legislature further finds that government's role should
19 be to encourage and assist private initiatives that benefit the
20 State through public/private partnerships.
21      The purpose of this Act is to authorize the housing and
22 community development corporation of Hawaii to work in
23 partnership with private sector entities to develop health care

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 1 communities in the State.
 2      SECTION 2.  Chapter 201G, Hawaii Revised Statutes, is
 3 amended by adding a new part to be appropriately designated and
 4 to read as follows:
 5                "PART    . HEALTH CARE COMMUNITIES
 6      201G-A  Definitions.  As used in this part, unless the
 7 context clearly requires otherwise:
 8      "Health care community" means a master planned health care
 9 center and retirement community that generally includes such
10 facilities as a medical mall or other setting, a medical
11 technology park, medical-related residential areas, and general
12 residential and commercial areas and appropriate infrastructure.
13      "Medical mall" means a centrally located network of state-
14 of-the-art health care services and medical research, training,
15 and technology facilities that promote and support a health care
16 community's emphases on wellness, including fitness and
17 prevention of illness, along with diagnosis, treatment, and care,
18 and seeks to bring together a wide range of health care including
19 traditional and nontraditional medicine.
20      201G-B  Health care community; public-private partnership;
21 planned community association.(a)  The corporation may work in
22 partnership with private sector entities to develop health care
23 communities in the State.  The corporation shall work with the

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 1 private sector and other appropriate entities to develop
 2 appropriate locations, plans, and criteria for the development of
 3 health care communities.
 4      (b)  Private sector businesses may enter into agreements
 5 with the corporation for the development of health care
 6 communities as provided in this part.
 7      (c)  Any planned community association that is organized for
 8 the purpose of governing all or a portion of the health care
 9 community shall comply with chapter 421J.
10      201G-C  Master plan.(a)  In cooperation with the private
11 sector and other appropriate entities, the corporation shall
12 develop a master plan for the health care community, which shall
13 include a medical mall or other setting and both health-related
14 and nonhealth-related facilities as described in this section.
15      (b)  The medical mall component of the health care
16 community, if used, or other setting, shall consist of a high
17 technology core as provided in this subsection, other health care
18 services, and medical-related housing.  The high-technology core
19 may include one or more of the following facilities:
20      (1)  A diagnostic-treatment center, or "a hospital without
21           beds";
22      (2)  Administrative offices;
23      (3)  A physician's office building;

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 1      (4)  A sports medicine and research center; and
 2      (5)  A birthing center.
 3      (c)  In addition to the medical mall or other setting, the
 4 health care community may include one or more of the following
 5 health-related facilities:
 6      (1)  An acute-care facility;
 7      (2)  A conference center;
 8      (3)  An Alzheimer's center;
 9      (4)  A hospice;
10      (5)  A clinic;
11      (6)  A medical hotel;
12      (7)  A center for alternative medicine;
13      (8)  An adolescent mental health facility;
14      (9)  A dental clinic;
15     (10)  A medical education and research campus;
16     (11)  A rehabilitation and wellness center;
17     (12)  A geriatric center;
18     (13)  A medical technology park;
19     (14)  A cardiac hospital;
20     (15)  A retirement community;
21     (16)  A nursing home;
22     (17)  A skilled nursing facility;
23     (18)  An assisted living facility;

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 1     (19)  A blood bank;
 2     (20)  Additional medical education space; and
 3     (21)  A facility for health warehousing and distribution.
 4      (d)  The health care community shall also include medical
 5 research, technology development, and education facilities, and
 6 may include a medical school to provide students access to the
 7 latest medical technology and facilities.
 8      (e)  The health care community shall include housing and
 9 commercial areas and such other nonhealth-related facilities as
10 are deemed appropriate by the corporation.
11      201G-D  Health care community development; powers of the
12 corporation; cooperative agreements with other governmental
13 agencies.(a)  The corporation shall assist in planning,
14 developing, constructing, and financing health care communities,
15 including health care facilities, a medical mall or other
16 setting, and related facilities and infrastructure, as provided
17 in this part, including, as appropriate:
18      (1)  Acquiring any real or personal property or interest
19           therein by purchase, exchange, gift, grant, lease, or
20           other means from any person or government to provide
21           housing.  Exchange of real property shall be in
22           accordance with section 171-50;
23      (2)  Owning or holding real property.  All real property

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 1           owned or held by the corporation with respect to the
 2           health care community shall be exempt from mechanics'
 3           or materialmen's liens and also from levy and sale by
 4           virtue of an execution, and no execution or other
 5           judicial process shall issue against the same nor shall
 6           any judgment against the corporation be a charge or
 7           lien upon its real property; provided that this
 8           subsection shall not apply to or limit the right of
 9           obligees to foreclose or otherwise enforce any mortgage
10           of the corporation or the right of obligees to pursue
11           any remedies for the enforcement of any pledge or lien
12           given by the corporation on its rents, fees, or
13           revenues.  The corporation and its property shall be
14           exempt from all taxes and assessments;
15      (3)  Leasing or renting all or a portion of any health-
16           related or nonhealth-related facility, and establishing
17           and revising the rents or charges therefor;
18      (4)  Selling, exchanging, transferring, assigning, or
19           pledging any property, real or personal, or any
20           interest therein to any person or government;
21      (5)  Insuring or provide for the insurance of its property
22           or operations against risks as it deems advisable;

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 1      (6)  Obtaining the aid and cooperation of any government in
 2           the planning, construction, and operation of the health
 3           care community, and entering into agreements and
 4           arrangements as it deems advisable to obtain aid and
 5           cooperation;
 6      (7)  Arranging or entering into agreements with any
 7           government for the acquisition by the government of
 8           property, options, or property rights or for the
 9           furnishing, installing, opening, or closing of streets,
10           roads, alleys, sidewalks, or other places, or for the
11           furnishing of property, services, parks, sewage, water,
12           and other facilities in connection with the health care
13           community, or for the changing of the map of a
14           political subdivision or the planning, replanning,
15           zoning, or rezoning of any part of a political
16           subdivision;
17      (8)  Procuring insurance or guarantees from any government
18           for the payment of any debts or parts thereof incurred
19           by the corporation, including the power to pay premiums
20           on any such insurance; and
21      (9)  Agree to make payments to the state or county
22           government, if the government is authorized to accept
23           payments, as the corporation deems consistent with the

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 1           maintenance of the character of the health care
 2           community.
 3      (b)  For the purpose of aiding and cooperating in the
 4 planning, construction, and operation of the health care
 5 community located within their respective territorial boundaries,
 6 the state or county government, upon those terms, with or without
 7 consideration, as it determines, may:
 8      (1)  Dedicate, grant, sell, convey, or lease any of its
 9           property, or grant easements, licenses, or any other
10           rights or privileges therein to the corporation or to
11           the federal government;
12      (2)  To the extent that it is within the scope of each of
13           their respective functions:
14           (A)  Cause the services customarily provided by each of
15                them to be rendered for the benefit of the health
16                care community;
17           (B)  Provide and maintain parks and sewage, water,
18                lights, and other facilities adjacent to or in
19                connection with the health care community;
20           (C)  Open, close, pave, install, or change the grade of
21                streets, roads, roadways, alleys, sidewalks, or
22                other related facilities; and
23           (D)  Change the map of a political subdivision or plan,

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 1                replan, zone, or rezone any part of a political
 2                subdivision;
 3      (3)  Enter into agreements with the corporation with respect
 4           to the exercise of their powers relating to the repair,
 5           closing, or demolition of unsafe, unsanitary, or unfit
 6           dwellings or other facilities within the health care
 7           community;
 8      (4)  Employ, notwithstanding any other law as to what
 9           constitutes legal investments, any available funds
10           belonging to them or within their control, including
11           funds derived from the sale or furnishing of property
12           or facilities to the corporation, in the purchase of
13           the bonds or other obligations of the corporation to
14           the extent provided by section 201G-161; and exercise
15           all the rights of any holder of the bonds or other
16           obligations;
17      (5)  Do any and all things necessary or convenient to aid
18           and cooperate in the planning, undertaking, and
19           construction of the health care community; and
20      (6)  Enter into contracts with the corporation or the
21           federal government for any period agreeing to exercise
22           any of the powers conferred hereby or to take any other
23           action in aid of the health care community.

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 1      In connection with the exercise of this power, any political
 2 subdivision may incur the entire expense of any such public
 3 improvements located within its territorial boundaries without
 4 assessment against abutting property owners.
 5      For the purpose of aiding and cooperating in the planning,
 6 construction, and operation of the health care community, the
 7 department of land and natural resources, the Hawaiian homes
 8 commission, and any other agency of the State having power to
 9 manage or dispose of its public lands, may, with the approval of
10 the governor and with or without consideration, grant, sell,
11 convey, or lease for any period, any parts of such public lands,
12 without limit as to area, to the corporation or to the federal
13 government.
14      Any law to the contrary notwithstanding, any gift, grant,
15 sale, conveyance, lease, or agreement provided for in this
16 section may be made by the state or county government without
17 appraisal, public notice, advertisement, or public bidding.
18      Insofar as this subsection is inconsistent with the
19 provisions of any other law, this subsection shall be
20 controlling.
21      (c)  The government of any county in which the health care
22 community is located or is about to be located may make donations
23 or advances to the corporation in sums as the county in its

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 1 discretion may determine.  The advances or donations shall be
 2 made for the purpose of aiding or cooperating in the construction
 3 and operation of the health care community.  The corporation,
 4 when it has money available therefor, shall reimburse the county
 5 for all advances made by way of a loan to it.
 6      201G-E  Health care community loan program; authorization.
 7 (a)  The corporation may establish under this part a loan program
 8 for private businesses for the construction of the health care
 9 community.  A minimum of ten per cent of the health care
10 community development shall be directly related to the provision
11 of health care.  A private developer who wishes to receive a loan
12 under this part shall submit an application to the department on
13 forms that the department may prescribe.  In order to be eligible
14 for the award of a loan under this part, the developer applicant
15 must meet the following minimum requirements:
16      (1)  Have a legal or equitable interest in the land to be
17           developed;
18      (2)  Have a minimum of twenty years of experience in the
19           health care industry;
20      (3)  Have at least ten years working experience with a major
21           health care provider in the area being served by the
22           development; and
23      (4)  Have a working relationship with and support of a

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 1           physicians health organization with a membership of not
 2           less than fifty in the area being served by the
 3           development.
 4      (b)  The corporation may make loans or grants out of the
 5 health care community revolving fund, either before or after
 6 final subdivision approval, to cover planning, engineering,
 7 feasibility studies, construction, and other costs associated
 8 with the health care community.
 9      (c)  The corporation may invest in, make, purchase, take
10 assignments of, or otherwise acquire or make commitments to do
11 the same with respect to any eligible loans or any partial
12 interest or participation therein held by or on behalf of the
13 corporation.
14      (d)  The corporation may sell, assign, or otherwise dispose
15 of or enter into commitments to sell, assign, or otherwise
16 dispose of any eligible loans or any partial interest or
17 participation therein held by or on behalf of the corporation.
18      (e)  The corporation may acquire any obligation under
19 conditions which require the seller of such obligation to use the
20 proceeds of the sale for the purpose of financing eligible loans. 
21      (f)  The corporation may adopt rules pursuant to chapter 91
22 as may be necessary or convenient for the operation of the loan
23 program.

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 1      201G-F  Corporation; general powers.(a)  The corporation
 2 may use any and all of the development powers under this chapter
 3 to facilitate and support the private development of health care
 4 communities in the State.
 5      (b)  The corporation may make, enter into, and enforce all
 6 contracts or agreements which are necessary, convenient, or
 7 desirable for the purpose of the performance of its powers under
 8 this part.
 9      (c)  The corporation may establish, revise, charge, and
10 collect fees, premiums, and charges as necessary, reasonable, or
11 convenient in connection with the loan program established under
12 this part.  The fees, premiums, and charges shall be deposited
13 into the health care community revolving fund established in
14 section 201G-G.
15      (d)  The corporation may contract for the servicing and
16 custody of any loans or other obligations acquired under this
17 part.
18      (e)  The corporation may procure insurance against any
19 default of its loans from insurers in amounts deemed necessary or
20 desirable.
21      (f)  Subject to any agreements with the holders of its
22 bonds, the corporation may:
23      (1)  Renegotiate, refinance, or foreclose any loan in

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                                     S.B. NO.           1625

 1           default;
 2      (2)  Commence any action to protect or enforce any right
 3           conferred upon it by any law, or as provided in any
 4           mortgage, insurance policy, contract, or other
 5           agreement;
 6      (3)  Bid for and purchase the property secured by the loan
 7           at any foreclosure or other sale;
 8      (4)  Acquire, or take possession of the property secured by
 9           the loan; and
10      (5)  Operate, manage, lease, dispose of, or otherwise deal
11           with the property securing the loan.
12      201G-G  Health care community revolving fund.(a)  There
13 is created the health care community revolving fund to be
14 administered by the corporation.  All repayments of principal and
15 interest on loans or grants made by the corporation from the fund
16 shall be placed in the health care community revolving fund to be
17 used for the purposes of this part.
18      (b)  The corporation may use, as needed, the aggregate
19 principal sum and the accumulated earnings in the health care
20 community revolving fund to make loans to businesses for the
21 construction of the health care community as provided in section
22 201G-E.
23      (c)  In managing the fund, the corporation may cooperate

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                                     S.B. NO.           1625

 1 with other public and private nonprofit organizations and may
 2 enter into loan or grant agreements with them.  The necessity for
 3 the extent and nature of security required for a loan or grant
 4 shall be determined by the corporation.  The security may
 5 include, but is not limited to, a borrowing resolution of the
 6 nonprofit organization.
 7      The foregoing powers are subject, however, to the following
 8 restrictions and limitations:
 9      (1)  No single loan or grant shall exceed two per cent of
10           the project cost;
11      (2)  The loan shall be repaid with simple interest not to
12           exceed six per cent per year; and
13      (3)  The moneys loaned shall be used only for the planning,
14           engineering, feasibility studies, construction, and
15           related costs of projects associated with the health
16           care community.
17      (c)  The aggregate principal sum in the health care
18 community revolving fund, which may without limitation include
19 sums made available from any government program or grant, from
20 private grants or contributions, from the proceeds of any bond
21 issue, or by appropriation, shall be invested by the corporation
22 in a manner which will maximize the rate of return on investment
23 of the fund; provided that any investment shall be consistent

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                                     S.B. NO.           1625

 1 with section 201G-167 but need not comply with section 36-21.
 2      (d)  The corporation may adopt rules in accordance with
 3 chapter 91 to carry out the purposes of this section.
 4      201G-H  Additional powers.  The powers conferred upon the
 5 corporation by this part shall be in addition and supplemental to
 6 the powers conferred upon it by any other law, and nothing herein
 7 shall be construed as limiting any powers, rights, privileges, or
 8 immunities so conferred upon it.
 9      201G-I  Rules.  The corporation shall adopt rules pursuant
10 to chapter 91 as may be necessary to implement this part."
11      SECTION 3.  Section 201G-12, Hawaii Revised Statutes, is
12 amended by amending subsection (a) to read as follows:
13      "(a)  The corporation, in its own behalf or on behalf of any
14 government, may:
15      (1)  Clear, improve, and rehabilitate property;
16      (2)  Plan, develop, construct, and finance housing projects;
17           [and]
18      (3)  In cooperation with the department of education and
19           department of accounting and general services, plan
20           educational facilities and related infrastructure as a
21           necessary and integral part of its housing projects
22           using all its innovative powers towards achieving that
23           end expeditiously and economically; provided that the

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                                     S.B. NO.           1625

 1           educational facilities comply with the department of
 2           education's educational specifications,
 3           [[]timelines[]], and siting requirements[.]; and
 4      (4)  Plan, develop, construct, and finance health care
 5           communities, including health care facilities, a
 6           medical mall, and related facilities and
 7           infrastructure, as provided in part    ."
 8      SECTION 4.  Pursuant to section 201G-162, Hawaii Revised
 9 Statutes, the director of finance may issue general obligation
10 bonds in amounts up to $           to finance the cost of
11 acquiring, developing, improving, and constructing infrastructure
12 for a health care community as provided in this Act, to be
13 expended by the housing and community development corporation of
14 Hawaii, and the corporation may take such other action as it
15 deems necessary pursuant to its powers under chapter 201G, Hawaii
16 Revised Statutes.  The corporation may utilize contributions of
17 money, labor, materials, and property that may be otherwise
18 available from any person or instrumentality.  The corporation,
19 in its discretion, may establish a separate entity within the
20 corporation to implement this section.
21      SECTION 5.  The director of finance is authorized to issue
22 general obligation bonds in the sum of $           , or so much
23 thereof as may be necessary, and the same sum, or so much thereof

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                                     S.B. NO.           1625

 1 as may be necessary, is appropriated for fiscal year 1999-2000,
 2 to finance the cost of the acquisition, development, improvement,
 3 and construction of infrastructure for a health care community as
 4 provided in this Act.  The sum appropriated shall be expended by
 5 the housing and community development corporation of Hawaii for
 6 the purposes of this Act.
 7      SECTION 6.  It is the intent of this Act not to jeopardize
 8 the receipt of any federal aid nor to impair the obligation of
 9 the State or any agency thereof to the holders of any bond issued
10 by the State or by any such agency, and to the extent, and only
11 to the extent, necessary to effectuate this intent, the governor
12 may modify the strict provisions of this Act, but shall promptly
13 report any such modification with reasons therefor to the
14 legislature at its next session thereafter for review by the
15 legislature.
16      SECTION 7.  In codifying the new part added to chapter 201G,
17 Hawaii Revised Statutes, by section 2 of this Act, the revisor of
18 statutes shall substitute appropriate section numbers for letters
19 used in the designation of new sections in that part.
20      SECTION 8.  If any provision of this Act, or the application
21 thereof to any person or circumstance is held invalid, the
22 invalidity does not affect other provisions or applications of
23 the Act which can be given effect without the invalid provision

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 1 or application, and to this end the provisions of this Act are
 2 severable.
 3      SECTION 9.  Statutory material to be repealed is bracketed.
 4 New statutory material is underscored.
 5      SECTION 10.  This Act shall take effect on July 1, 1999.
 7                              INTRODUCED BY:______________________