Amends and adds to existing law to establish provisions regarding transfer of control of certain hospitals.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 853 BY WAYS AND MEANS COMMITTEE AN ACT1 RELATING TO HOSPITALS; PROVIDING LEGISLATIVE FINDINGS AND INTENT; AMENDING2 SECTION 39-1359, IDAHO CODE, TO REVISE PROVISIONS REGARDING CONVEYANCE3 OF HOSPITAL DISTRICT PROPERTY TO A NONPROFIT CORPORATION; AMENDING TI-4 TLE 48, IDAHO CODE, BY THE ADDITION OF A NEW CHAPTER 21, TITLE 48, IDAHO5 CODE, TO DEFINE TERMS, TO ESTABLISH PROVISIONS REGARDING NOTICE AND6 PUBLIC PROCESS, AND TO ESTABLISH PROVISIONS REGARDING STATE REVIEW; AND7 DECLARING AN EMERGENCY AND PROVIDING AN EFFECTIVE DATE.8

Be It Enacted by the Legislature of the State of Idaho:9

SECTION 1. LEGISLATIVE FINDINGS AND INTENT. (1) The Legislature finds10 that:11 (a) Public hospital districts were created and funded by local taxpay-12 ers to ensure access to essential health care services and to maintain13 local governance authority;14 (b) When hospital district assets are conveyed to nonprofit corpora-15 tions pursuant to section 39-1359, Idaho Code, such conveyances are16 conditioned upon continued nonprofit operation for the benefit of the17 community;18 (c) The transfer or control of such hospitals to multistate or distant19 systems without public notice or meaningful review may materially re-20 duce local governance authority and undermine community accountabil-21 ity; and22 (d) Transparency, public participation, and state review of control23 transfers are necessary to protect public assets, preserve access to24 essential services, and maintain public trust.25 (2) It is the intent of the Legislature to operate prospectively and to26 clarify conditions attached to the conveyance of public hospital assets.27

SECTION 2. That Section 39-1359, Idaho Code, be, and the same is hereby28 amended to read as follows:29 39-1359. CONVEYANCE OF HOSPITAL DISTRICT PROPERTY TO NONPROFIT CORPO-30 RATION. (1) As an alternative to the procedure set forth in section 39-1358,31 Idaho Code, the board of trustees of a hospital district may convey or lease32 hospital district real property, facilities, and the personal property and33 equipment therein subject to the following conditions:34 (a) The conveyance or lease shall be to a nonprofit corporation;35 (b) No lease term shall exceed ninety-nine (99) years;36 (c) The governing body of the nonprofit corporation must be composed37 initially of the incumbent trustees of the hospital district board of38 trustees as individuals;39 (d) The articles of incorporation must provide for a membership of the40 corporation that is:41

2 (i) Broadly representative of the public it serves; or1 (ii) A single nonprofit corporate member having articles of in-2 corporation that provide for a membership of the corporation that3 is broadly representative of the public it serves. The articles4 must further provide for the selection of the governing body by the5 membership of the corporation or exclusively by a parent corpora-6 tion that is a corporate member, with voting power, and not by the7 governing body itself, except to fill a vacancy for an unexpired8 term. The articles must further provide that no member of the gov-9 erning body shall serve more than two (2) consecutive three (3)10 year terms;11 (e) The nonprofit corporation must provide care for indigent patients12 and receive any person falling sick or maimed within the hospital dis-13 trict;14 (f) The conveyance or lease agreement must provide for the transfer of15 patients, staff, and employees and for the continuing administration of16 any trusts or bequests or maintenance of records pertaining to the ex-17 isting hospital district; and18 (g) The conveyance or lease agreement shall provide for a price that is19 either of the following:20 (i) The acceptance of all assets and assumption of all liabili-21 ties; or22 (ii) Such other price to which the hospital district board of23 trustees and the nonprofit corporation agree.24 (2) If any hospital that has been conveyed pursuant to this section25 ceases to be used as a nonprofit hospital, then the hospital so conveyed26 shall revert to the ownership of the hospital district, unless the premises27 so conveyed are sold and the proceeds used to erect or enlarge another non-28 profit hospital. If any hospital that has been leased pursuant to this29 section ceases to be used as a nonprofit hospital, then the lease shall ter-30 minate.31 (3) A hospital shall be deemed to have ceased to be used as a nonprofit32 hospital if:33 (a) Control of the hospital is transferred to another entity without34 approval pursuant to chapter 21, title 48, Idaho Code; or35 (b) The hospital enters into a transaction that materially eliminates36 local governance authority.37 (4) As used in this section, "materially eliminates local governance38 authority" means the transfer of decision-making authority over hospital39 budgets, service lines, facility closures, executive leadership selection,40 or strategic planning to an entity that is not locally governed within the41 county or counties primarily served by the hospital.42

SECTION 3. That Title 48, Idaho Code, be, and the same is hereby amended43 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-44 ter 21, Title 48, Idaho Code, and to read as follows:45 CHAPTER 2146 HEALTH CARE CONTROL TRANSFER TRANSPARENCY47 48-2101. DEFINITIONS. As used in this chapter:48

3 (1) "Control transfer" means any transaction or arrangement that re-1 sults in:2 (a) A change in majority voting power of the governing board;3 (b) Substitution of a parent or controlling entity; or4 (c) Delegation of material governance authority through management,5 affiliation, or similar agreement.6 (2) "Covered hospital" means any hospital located in Idaho that:7 (a) Is organized as a nonprofit corporation; and8 (b) Has received public hospital district assets pursuant to section9 39-1359, Idaho Code.10 48-2102. NOTICE AND PUBLIC PROCESS REQUIRED. (1) A covered hospital11 shall provide written notice to the attorney general and the department of12 health and welfare at least ninety (90) days prior to entering into any con-13 trol transfer.14 (2) A covered hospital shall conduct, with no less than thirty (30)15 days' public notice, at least one (1) public hearing within the county it16 primarily serves prior to entering into any control transfer.17 (3) The notice required pursuant to subsection (2) of this section18 shall include a summary of the proposed transaction and its anticipated im-19 pact on governance, services, and community benefit obligations.20 48-2103. STATE REVIEW. (1) The attorney general shall review any21 proposed control transfer of a covered hospital to determine whether such22 transfer is consistent with the public interest, including effects on:23 (a) Local governance and accountability;24 (b) Access to essential services; and25 (c) Community benefit obligations.26 (2) The attorney general may approve, condition, or disapprove a con-27 trol transfer pursuant to subsection (1) of this section.28 (3) No control transfer shall take effect without written approval of29 the attorney general.30

SECTION 4. An emergency existing therefor, which emergency is hereby31 declared to exist, this act shall be in full force and effect on and after32 July 1, 2026.33