BILL REQ. #:  H-3411.2 

Read first time 01/11/12.   Referred to Committee on Health Care & Wellness.

     AN ACT Relating to financing hospitals by the health care facilities authority; amending RCW 70.37.090; reenacting and amending RCW 70.37.050; and adding new sections to chapter 70.37 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 70.37 RCW to read as follows:
     (1) The total amount of outstanding indebtedness of the authority with respect to hospital projects may not exceed five billion five hundred million dollars at any time.
     (2) For purposes of this section, the calculation of outstanding indebtedness must include the initial principal amount of an issue and may not include interest that is either currently payable or that accrues as a part of the face amount of an issue payable at maturity or earlier redemption. Outstanding indebtedness does not include notes or bonds as to which the obligation of the authority has been satisfied and discharged by refunding or for which payment has been provided by reserves or otherwise.

NEW SECTION.  Sec. 2   A new section is added to chapter 70.37 RCW to read as follows:
     (1) In addition to the terms and conditions imposed under RCW 70.37.060, and to further the public policy set forth in RCW 70.37.010, the authority shall require participants in a hospital project to agree, as minimum conditions of financing, that the hospital must:
     (a) Provide charity care that exceeds the average expenditures for charity care, as reported to the department of health, provided by the peer group of hospitals in this state during the year immediately preceeding the year in which a financing application is submitted under this chapter;
     (b) Implement one or more programs to substantially reduce the number and rate of emergency department visits for nonemergent health conditions. Such programs may include, but are not limited to:
     (i) Maintaining full-service primary care capacity outside the emergency department to serve as an accessible, available alternative to emergency department care for nonemergent care; or
     (ii) Identifying persons who use the hospital's emergency room for nonemergent care more than three times in a calendar year, referring those persons to a willing primary care provider, and developing a plan of care that addresses the need to provide care for the nonemergent health conditions for which emergency department care is sought; and
     (c) Maintain a rate of facility readmissions that is below the average medicare hospital readmission rate for the peer group of hospitals in this state, as calculated by the federal centers for medicare and medicaid.
     (2) This section:
     (a) Applies only to hospital projects for which financing is awarded on or after the effective date of this section.
     (b) Does not apply to a project with total bonding issued by the authority of less than ten million dollars. A participant may not subdivide a project costing more than this amount for the purpose of circumventing the requirements of this section.
     (3) The authority shall verify, at least annually, that a hospital meets the minimum conditions of financing under this section. A participant that fails to meet the minimum conditions is subject to penalties adopted by the authority by rule.

Sec. 3   RCW 70.37.050 and 1983 c 210 s 2 and 1983 c 167 s 171 are each reenacted and amended to read as follows:
     (1) The authority shall:
     (a) Establish rules concerning its exercise of the powers authorized by this chapter((. The authority shall)); and
     (b) Receive from applicants requests for the providing of bonds for financing of health care facilities, and ((shall)) investigate and determine the need and the feasibility of providing such bonds. As part of its review of requests for financing awarded on or after the effective date of this section, the authority must consider whether the applicant:
     (i) Agrees to, and can reasonably be expected to achieve the requirements of, the financing conditions of section 2 of this act; and
     (ii) Complied with the requirements of section 2 of this act under any previous financing agreements under this chapter.
     (2)(a) Whenever the authority deems it necessary or advisable for the benefit of the public health to provide financing for a health care facility, it shall adopt a financing plan therefor and shall declare the estimated cost thereof, as near as may be, including as part of such cost funds necessary for the expenses incurred in the financing as well as in the construction or purchase or other acquisition or in connection with the rental or other payment for the use thereof, interest during construction, reserve funds and any funds necessary for initial start-up costs, and shall issue and sell its bonds for the purposes of carrying out the proposed financing plan((: PROVIDED, That)). However, if a certificate of need is required for the proposed project, no such financing plan shall be adopted until such certificate has been issued pursuant to chapter 70.38 RCW ((by the secretary of the department of social and health services)).
     (b) The authority shall have power as a part of ((such)) a plan adopted under this subsection to create a special fund or funds for the purpose of defraying the cost of such project and for other projects of the same participant subsequently or at the same time approved by it and for their maintenance, improvement, reconstruction, remodeling and rehabilitation, into which special fund or funds it shall obligate and bind the participant to set aside and pay from the gross revenues of the project or from other sources an amount sufficient to pay the principal and interest of the bonds being issued, reserves and other requirements of the special fund and to issue and sell bonds payable as to both principal and interest out of such fund or funds relating to the project or projects of such participant.
     ((Such)) (c) Bonds issued under this subsection shall bear such date or dates, mature at such time or times, be in such denominations, be in such form, either coupon or registered, or both, as provided in RCW 39.46.030, carry such registration privileges, be made transferable, exchangeable, and interchangeable, be payable in such medium of payment, at such place or places, be subject to such terms of redemption, bear such fixed or variable rate or rates of interest, and be sold in such manner, at such price, as the authority shall determine. Such bonds ((shall)) must be executed by the chair((man)), by either its duly elected secretary or its executive director, and by the trustee if the authority determines to utilize a trustee for the bonds. Execution of the bonds may be by manual or facsimile signature((: PROVIDED, That)); however, at least one signature placed thereon ((shall)) must be manually subscribed. Any interest coupons appurtenant to the bonds ((shall)) must be executed by facsimile or manual signature or signatures, as the authority shall determine.

Sec. 4   RCW 70.37.090 and 1974 ex.s. c 147 s 9 are each amended to read as follows:
     The authority shall have power to:
     (1) Require persons applying for its assistance in connection with ((the investigation and financing of)) projects to pay fees and charges to provide the authority with funds for: (a) Investigation((,)) and financial feasibility studies((,)); (b) expenses of issuance and sale of bonds; (c) review and verification of information provided to verify compliance with section 2 of this act; and (d) other charges for services provided by the authority in connection with such projects. All other expenses of the authority including compensation of its employees and consultants, expenses of administration and conduct of its work and business and other expenses shall be paid out of such fees and charges, out of contributions and grants to it, out of the proceeds of bonds issued for projects of participants or out of revenues of such projects; none of its expenses may be paid by the state of Washington((. The authority shall have power to)); and
     (2) Establish special funds into which ((such)) money received by the authority shall be ((received)) deposited and out of which it may be disbursed by the persons and with the procedure and in the manner established by the authority.