§323F-7.6  Transition of Hawaii health systems regional system or health facility to a new entity.  (a)  Notwithstanding any other law to the contrary, including but not limited to section 27-1 and chapter 171, any of the regional systems or individual facilities of the Hawaii health systems corporation is hereby authorized to transition into a new legal entity in any form recognized under the laws of the State, including but not limited to:

     (1)  A nonprofit corporation;

     (2)  A for-profit corporation;

     (3)  A municipal facility;

     (4)  A public benefit corporation;

     (5)  A division or branch under a state executive department; or

     (6)  Any two or more of the entities in paragraphs (1) through (5).

A transition shall occur through the sale, lease, or transfer of all or substantially all of the assets of the facility or regional system, except for real property, which shall only be transferred by lease; provided that under a transfer that is effectuated pursuant to paragraph (5), real property shall transfer in its then-existing state, whether in lease, fee, or otherwise, to the department of land and natural resources.  Any transition shall comply with chapter 323D.

     (b)  A transition shall only occur upon approval of the appropriate regional system board in the case of a regional system or individual facility transition, or upon approval of the regional system boards and the corporation in the case of the transition of the entire corporation.  Any transition shall be subject to legal review by the attorney general, who shall approve the transition if satisfied that the transition conforms to all applicable laws, subject to the review of the director of the department of budget and finance, who shall approve the transition if it conforms to all applicable financing procedures, and subject to the governor's approval.  In addition, the transition shall be subject to the following terms and conditions:

     (1)  All proceeds from the sale, lease, or transfer of assets shall be used for health care services in the respective regional system or facility, except that real property shall only be transferred by lease; provided that under a transfer that is effectuated pursuant to subsection (a)(5), real property shall transfer in its then-existing state, whether in lease, fee, or otherwise, to the department of land and natural resources;

     (2)  Any and all liabilities of a regional system or facility transitioning into a new entity that were transferred to the Hawaii health systems corporation upon its creation by Act 262, Session Laws of Hawaii 1996, and all liabilities of the regional system or facility related to collective bargaining contracts negotiated by the State, shall become the responsibility of the State; and

     (3)  During the period of transition:

          (A)  The State shall continue to fund the provision of health care services provided for by the regional system or individual facility; and

          (B)  All applicable provisions of this chapter shall continue to apply.

     Upon the completion of the transition of all the facilities in a regional system to a new entity, the regional system board for that regional system shall terminate; provided that if not all of a regional system's facilities are transitioned to a new entity, the existing regional system board shall not terminate but shall continue to retain jurisdiction over those facilities remaining in the regional system. [L 2009, c 182, pt of §8; am L 2021, c 212, §4]