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 ACT	1
RELATING TO HOSPITALS; PROVIDING LEGISLATIVE FINDINGS AND INTENT; AMENDING	2
SECTION 39-1359, IDAHO CODE, TO REVISE PROVISIONS REGARDING CONVEYANCE	3
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, IDAHO	5
CODE, TO DEFINE TERMS, TO ESTABLISH PROVISIONS REGARDING NOTICE AND	6
PUBLIC PROCESS, AND TO ESTABLISH PROVISIONS REGARDING STATE REVIEW; AND	7
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 finds	10
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 maintain	13
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 are	16
conditioned upon continued nonprofit operation for the benefit of the	17
community;	18
(c) The transfer or control of such hospitals to multistate or distant	19
systems without public notice or meaningful review may materially re-	20
duce local governance authority and undermine community accountabil-	21
ity; and	22
(d) Transparency, public participation, and state review of control	23
transfers are necessary to protect public assets, preserve access to	24
essential services, and maintain public trust.	25
(2) It is the intent of the Legislature to operate prospectively and to	26
clarify conditions attached to the conveyance of public hospital assets.	27
SECTION 2. That Section 39-1359, Idaho Code, be, and the same is hereby	28
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 lease	32
hospital district real property, facilities, and the personal property and	33
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 composed	37
initially of the incumbent trustees of the hospital district board of	38
trustees as individuals;	39
(d) The articles of incorporation must provide for a membership of the	40
corporation that is:	41

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(i) Broadly representative of the public it serves; or	1
(ii) A single nonprofit corporate member having articles of in-	2
corporation that provide for a membership of the corporation that	3
is broadly representative of the public it serves. The articles	4
must further provide for the selection of the governing body by the	5
membership of the corporation or exclusively by a parent corpora-	6
tion that is a corporate member, with voting power, and not by the	7
governing body itself, except to fill a vacancy for an unexpired	8
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 patients	12
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 of	15
patients, staff, and employees and for the continuing administration of	16
any trusts or bequests or maintenance of records pertaining to the ex-	17
isting hospital district; and	18
(g) The conveyance or lease agreement shall provide for a price that is	19
either of the following:	20
(i) The acceptance of all assets and assumption of all liabili-	21
ties; or	22
(ii) Such other price to which the hospital district board of	23
trustees and the nonprofit corporation agree.	24
(2) If any hospital that has been conveyed pursuant to this section	25
ceases to be used as a nonprofit hospital, then the hospital so conveyed	26
shall revert to the ownership of the hospital district, unless the premises	27
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 this	29
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 nonprofit	32
hospital if:	33
(a) Control of the hospital is transferred to another entity without	34
approval pursuant to chapter 21, title 48, Idaho Code; or	35
(b) The hospital enters into a transaction that materially eliminates	36
local governance authority.	37
(4) As used in this section, "materially eliminates local governance	38
authority" means the transfer of decision-making authority over hospital	39
budgets, service lines, facility closures, executive leadership selection,	40
or strategic planning to an entity that is not locally governed within the	41
county or counties primarily served by the hospital.	42
SECTION 3. That Title 48, Idaho Code, be, and the same is hereby amended	43
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 21	46
HEALTH CARE CONTROL TRANSFER TRANSPARENCY	47
48-2101. DEFINITIONS. As used in this chapter:	48

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(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; or	4
(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; and	8
(b) Has received public hospital district assets pursuant to section	9
39-1359, Idaho Code.	10
48-2102. NOTICE AND PUBLIC PROCESS REQUIRED. (1) A covered hospital	11
shall provide written notice to the attorney general and the department of	12
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 it	16
primarily serves prior to entering into any control transfer.	17
(3) The notice required pursuant to subsection (2) of this section	18
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 any	21
proposed control transfer of a covered hospital to determine whether such	22
transfer is consistent with the public interest, including effects on:	23
(a) Local governance and accountability;	24
(b) Access to essential services; and	25
(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 of	29
the attorney general.	30
SECTION 4. An emergency existing therefor, which emergency is hereby	31
declared to exist, this act shall be in full force and effect on and after	32
July 1, 2026.	33

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