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SJR105.....................................................by STATE AFFAIRS
PUBLIC HOSPITALS - Proposing an amendment to the Constitution of the State
of Idaho to authorize public hospitals, ancillary to their operations and
in furtherance of health care needs in their service areas, to incur
indebtedness or liability to purchase, contract, lease or construct or
otherwise acquire facilities, equipment, technology and real property for
health care operations, provided that no ad valorem tax revenues shall be
used for such activities.
03/07 Senate intro - 1st rdg - to printing
03/10 Rpt prt - to St Aff
03/19 Rpt out - rec d/p - to 2nd rdg
03/20 2nd rdg - to 3rd rdg
04/01 3rd rdg - PASSED - 30-2-3
AYES -- Bair, Bastian, Bilyeu, Broadsword, Cameron, Coiner, Corder,
Darrington, Davis, Fulcher, Gannon(Gannon), Geddes, Goedde, Hammond,
Heinrich, Hill, Jorgenson, Kelly, Keough, Little, Lodge,
Malepeai(Sagness), McGee, McKague, Pearce, Richardson, Schroeder,
Siddoway, Stennett, Werk
NAYS -- Langhorst, Stegner
Absent and excused -- Andreason, Burkett, McKenzie
Floor Sponsor - Little
Title apvd - to House
04/01 House intro - 1st rdg - to 2nd rdg
04/02 2nd rdg - to 3rd rdg
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE SENATE SENATE JOINT RESOLUTION NO. 105 BY STATE AFFAIRS COMMITTEE 1 A JOINT RESOLUTION 2 PROPOSING AN AMENDMENT TO SECTION 3C, ARTICLE VIII, OF THE CONSTITUTION OF THE 3 STATE OF IDAHO, RELATING TO HOSPITALS AND HEALTH SERVICES TO AUTHORIZE 4 PUBLIC HOSPITALS, ANCILLARY TO THEIR OPERATIONS AND IN FURTHERANCE OF 5 HEALTH CARE NEEDS IN THEIR SERVICE AREAS, TO INCUR INDEBTEDNESS OR LIABIL- 6 ITY TO PURCHASE, CONTRACT, LEASE OR CONSTRUCT OR OTHERWISE ACQUIRE FACILI- 7 TIES, EQUIPMENT, TECHNOLOGY AND REAL PROPERTY FOR HEALTH CARE OPERATIONS 8 PROVIDED THAT NO AD VALOREM TAX REVENUES SHALL BE USED FOR SUCH ACTIVI- 9 TIES; STATING THE QUESTION TO BE SUBMITTED TO THE ELECTORATE; DIRECTING 10 THE LEGISLATIVE COUNCIL TO PREPARE THE STATEMENTS REQUIRED BY LAW; AND 11 DIRECTING THE SECRETARY OF STATE TO PUBLISH THE AMENDMENT AND ARGUMENTS AS 12 REQUIRED BY LAW. 13 Be It Resolved by the Legislature of the State of Idaho: 14 SECTION 1. That Section 3C, Article VIII, of the Constitution of the 15 State of Idaho be amended to read as follows: 16 SECTION 3C. HOSPITALS AND HEALTH SERVICES -- AUTHORIZED ACTIVI- 17 TIES AND FINANCING. Provided that no ad valorem tax revenues shall be 18 used for activities authorized by this section, public hospitals, 19 ancillary to their operations and in furtherance of health care needs 20 in their service areas, may: (i) incur indebtedness or liability to 21 purchase, contract, lease or construct or otherwise acquire facili- 22 ties, equipment, technology and real property for health care opera- 23 tions; (ii) acquire, construct, install and equip facilities or proj- 24 ects to be financed for, or to be leased, sold or otherwise disposed 25 of to persons, associations or corporations other than municipal cor- 26 porations and may, in the manner prescribed by law, finance the costs 27 thereof; (iii) engage in shared services and other joint or coopera- 28 tive ventures; (iiiv) enter into joint ventures and partnerships; 29 (iv) form or be a shareholder of corporations or a member of limited 30 liability companies; (vi) have members of its governing body or its 31 officers or administrators serve as directors, managers, officers or 32 employees of any venture, association, partnership, corporation or 33 limited liability company as authorized by this section; (vii) own 34 interests in partnerships, corporations and limited liability compa- 35 nies. Any obligations incurred pursuant to this section shall be pay- 36 able solely from charges, rents or payments derived from the existing 37 facilities and the facilities or projects financed thereby and shall 38 not be secured by the full faith and credit or the taxing power of 39 the county, hospital taxing district, the state, or any other politi- 40 cal subdivision; and provided further, that any county or public hos- 41 pital taxing district contracting such indebtedness shall own its 42 just proportion to the whole amount so invested. The authority 43 granted by this section shall be exercised for the delivery of health 2 1 care and related service and with the prior approval of the governing 2 body of the county, hospital district or other governing body of a 3 public hospital. No provisions of this Constitution including, but 4 not limited to Sections 3 and 4 of Article VIII, and Section 4 of 5 Article XII, shall be construed as a limitation upon the authority 6 granted under this section. 7 SECTION 2. The question to be submitted to the electors of the State of 8 Idaho at the next general election shall be as follows: 9 "Shall Section 3C, Article VIII, of the Constitution of the State of Idaho 10 be amended to authorize public hospitals, ancillary to their operations and in 11 furtherance of health care needs in their service areas, to incur indebtedness 12 or liability to purchase, contract, lease or construct or otherwise acquire 13 facilities, equipment, technology and real property for health care opera- 14 tions, provided that no ad valorem tax revenues shall be used for such activi- 15 ties?". 16 SECTION 3. The Legislative Council is directed to prepare the statements 17 required by Section 67-453, Idaho Code, and file the same. 18 SECTION 4. The Secretary of State is hereby directed to publish this pro- 19 posed constitutional amendment and arguments as required by law.
STATEMENT OF PURPOSE
RS18006
In 2006, the Idaho Supreme Court rendered a decision in City of Boise v.
Frazier, 143 Idaho 1 (2006) that addressed the "ordinary and necessary"
exception to voter approval of financing public entity debt. Although
the decision only addressed the subject matter of the case (a parking
garage at the Boise Airport), by reference, it casts serious doubt on the
ability of county and district hospitals to incur debt without voter
approval. That ability had been within their authority since the passage
of the Idaho Health Facilities Authority Act in 1972 and a subsequent
case in 1973 which tested the constitutionality of the act. Thus, the
Frazier decision overturned 30 plus years of public hospitals being able
to incur long term debt for purposes of expanding and renovating
facilities, purchasing equipment or financing new technologies without
a vote.
More than half of the hospitals in Idaho are owned by either a county or
a hospital district. While both types of hospitals have access to ad
valorem taxes, very little, if any, taxes are levied for the purpose of
hospital operations. Most of these public hospitals operate exclusively
on patient revenues. For those that receive tax support, it is a
minuscule percentage of their total operating budget and easily
separable.
This joint resolution amends Article VIII, Section 3C of the Idaho
Constitution to clarify the ability of county and district hospitals to
incur indebtedness without vote. Section 3C was added to the
constitution in 1996 when the Idaho electorate voted to allow public
hospitals to enter into joint ventures and other such arrangements with
private entities as long as no ad valorem tax revenues are used. This
joint resolution simply adds to Section 3C the allowance for such
hospitals to incur indebtedness or liability under the same circumstances
as for joint venturing, namely that no ad valorem tax revenue will be
used for this purpose.
FISCAL NOTE
There will be a fiscal impact on the state general fund for the
additional costs associated with adding the amendment to the general
election ballot in the amount of approximately $200,000.00.
Contact
Name: Steven A. Millard, President, Idaho Hospital Association
Phone: 338-5100
Toni Lawson, Vice President, Idaho Hospital Association
STATEMENT OF PURPOSE/FISCAL NOTE SJR 105