CS/HB 619

1
A bill to be entitled
2An act relating to the sale or lease of a county,
3district, or municipal hospital; amending s. 155.40, F.S.;
4requiring approval from a circuit court for the sale or
5lease of a county, district, or municipal hospital;
6requiring the hospital governing board to determine by
7certain public advertisements whether there are qualified
8purchasers or lessees before the sale or lease of such
9hospital; defining the term "fair market value"; requiring
10the board to state in writing specified criteria forming
11the basis of its acceptance of a proposal for sale or
12lease of the hospital; providing for publication of
13notice; authorizing submission of written statements of
14opposition to a proposed transaction, and written
15responses thereto, to the hospital governing board within
16a certain timeframe; requiring the board to file a
17petition for approval with the circuit court and receive
18approval before any transaction is finalized; specifying
19information to be included in such petition; providing for
20the circuit court to issue an order requiring all
21interested parties to appear before the court under
22certain circumstances; granting the circuit court
23jurisdiction to approve sales or leases of county,
24district, or municipal hospitals based on specified
25criteria; providing for a party to seek judicial review;
26requiring the board to pay costs associated with the
27petition for approval unless a party contests the action;
28providing an exemption for certain sale or lease
29transactions completed before a specified date; amending
30s. 395.3036, F.S.; conforming cross-references; providing
31an effective date.
32
33Be It Enacted by the Legislature of the State of Florida:
34
35     Section 1.  Subsections (1) and (4) of section 155.40,
36Florida Statutes, are amended, subsections (5) through (8) are
37renumbered as subsections (14) through (17), respectively, and
38new subsections (5) through (13) are added to that section, to
39read:
40     155.40  Sale or lease of county, district, or municipal
41hospital; effect of sale.-
42     (1)  In order that citizens and residents of the state may
43receive quality health care, any county, district, or municipal
44hospital organized and existing under the laws of this state,
45acting by and through its governing board, shall have the
46authority to sell or lease such hospital to a for-profit or not-
47for-profit Florida corporation, and enter into leases or other
48contracts with a for-profit or not-for-profit Florida
49corporation for the purpose of operating and managing such
50hospital and any or all of its facilities of whatsoever kind and
51nature. The term of any such lease, contract, or agreement and
52the conditions, covenants, and agreements to be contained
53therein shall be determined by the governing board of such
54county, district, or municipal hospital. The governing board of
55the hospital must find that the sale, lease, or contract is in
56the best interests of the public and must state the basis of
57such finding. The sale or lease of such hospital is subject to
58approval by a circuit court. If the governing board of a county,
59district, or municipal hospital decides to lease the hospital,
60it must give notice in accordance with paragraph (4)(a) or
61paragraph (4)(b).
62     (4)  In the event the governing board of a county,
63district, or municipal hospital determines that it is no longer
64in the public interest to own or operate such hospital and
65elects to consider a sale or lease to a third party, the
66governing board shall first determine whether there are any
67qualified purchasers or lessees. In the process of evaluating
68any potential purchasers or lessees elects to sell or lease the
69hospital, the board shall:
70     (a)  Negotiate the terms of the sale or lease with a for-
71profit or not-for-profit Florida corporation and Publicly
72advertise the meeting at which the proposed sale or lease will
73be considered by the governing board of the hospital in
74accordance with s. 286.0105; or
75     (b)  Publicly advertise the offer to accept proposals in
76accordance with s. 255.0525 and receive proposals from all
77interested and qualified purchasers and lessees.
78
79Any sale or lease must be for fair market value, and any sale or
80lease must comply with all applicable state and federal
81antitrust laws. For the purposes of this section, the term "fair
82market value" means the price that a seller is willing to accept
83and a buyer is willing to pay on the open market and in an
84arm's-length transaction.
85     (5)  A determination by a governing board to accept a
86proposal for sale or lease shall state, in writing, the findings
87and basis supporting the determination.
88     (a)  The findings shall include, but are not limited to,
89the governing board's determination that the proposal:
90     1.  Represents fair market value.
91     2.  Affects whether there will be a reduction or
92elimination of ad valorem or other tax revenues to support the
93hospital.
94     3.  Ensures that quality health care will continue to be
95provided to all residents of the affected community,
96particularly to the indigent, the uninsured, and the
97underinsured.
98     4.  Is otherwise in compliance with paragraph (9)(a).
99     (b)  The findings shall be accompanied by all information
100and documents relevant to the governing board's determination,
101including, but not limited to:
102     1.  The name and address of all parties to the transaction.
103     2.  The location of the hospital and all related
104facilities.
105     3.  A description of the terms of all proposed agreements.
106     4.  A copy of the proposed sale or lease agreement and any
107related agreements, including, but not limited to, leases,
108management contracts, service contracts, and memoranda of
109understanding.
110     5.  The estimated total value associated with the proposed
111agreement and the proposed acquisition price and other
112consideration.
113     6.  Any valuations of the hospital's assets prepared in the
1143 years immediately preceding the proposed transaction date.
115     7.  Any financial or economic analysis and report from any
116expert or consultant retained by the governing board.
117     8.  A fairness evaluation by an independent expert in such
118transactions.
119     9.  Copies of all other proposals and bids the governing
120board may have received or considered in compliance with the
121procedures required under subsection (4).
122     (6)  Not later than 120 days before the anticipated closing
123date of the proposed transaction, the governing board shall make
124publicly available all findings and documents required under
125subsection (5) and shall publish a notice of the proposed
126transaction in one or more newspapers of general circulation in
127the county in which the majority of the physical assets of the
128hospital are located. The notice shall include the names of the
129parties involved, the means by which persons may submit written
130comments about the proposed transaction to the governing board,
131and the means by which persons may obtain copies of the findings
132and documents required under subsection (5).
133     (7)  Within 20 days after the date of publication of public
134notice, any interested person may submit to the governing board
135a detailed written statement of opposition to the transaction.
136When a written statement of opposition has been submitted, the
137governing board or the proposed purchaser or lessee may submit a
138written response to the interested party within 10 days after
139the written statement of opposition due date.
140     (8)  A governing board of a county, district, or municipal
141hospital may not enter into a sale or lease of a hospital
142facility without first receiving approval from a circuit court.
143     (a)  The governing board shall file a petition for approval
144in a circuit court seeking approval of the proposed transaction
145not sooner than 30 days after publication of notice of the
146proposed transaction.
147     (b)  Any such petition for approval filed by the governing
148board shall include all findings and documents required under
149subsection (5) and certification by the governing board of
150compliance with all requirements of this section.
151     (c)  Circuit courts shall have jurisdiction to approve the
152sale or lease of a county, district, or municipal hospital. A
153petition for approval shall be filed in the circuit in which the
154majority of the physical assets of the hospital are located.
155     (9)  Upon the filing of a petition for approval, the court
156shall issue an order requiring all interested parties to appear
157at a designated time and place within the circuit where the
158petition is filed and show why the petition should not be
159granted.
160     (a)  Before the date set for the hearing, the clerk shall
161publish a copy of the order in one or more newspapers of general
162circulation in the county in which the majority of the physical
163assets of the hospital are located at least once each week for 2
164consecutive weeks, commencing with the first publication, which
165shall not be less than 20 days before the date set for the
166hearing. By this publication, all interested parties are made
167parties defendant to the action and the court has jurisdiction
168of them to the same extent as if named as defendants in the
169petition and personally served with process.
170     (b)  Any interested party may become a party to the action
171by moving against or pleading to the petition at or before the
172time set for the hearing. At the hearing, the court shall
173determine all questions of law and fact and make such orders as
174will enable it to properly consider and determine the action and
175render a final judgment with the least possible delay.
176     (10)  Upon conclusion of all hearings and proceedings, the
177court shall render a final judgment approving or denying the
178proposed transaction. In reaching its final judgment, the court
179shall determine whether:
180     (a)  The proposed transaction is permitted by law.
181     (b)  The proposed transaction unreasonably excludes a
182potential purchaser or lessee on the basis of being a for-profit
183or a not-for-profit Florida corporation.
184     (c)  The governing board of the hospital publicly
185advertised the meeting at which the proposed transaction was
186considered by the board in compliance with s. 286.0105.
187     (d)  The governing board of the hospital publicly
188advertised the offer to accept proposals in compliance with s.
189255.0525.
190     (e)  The governing board of the hospital exercised due
191diligence in deciding to dispose of hospital assets, selecting
192the proposed purchaser or lessee, and negotiating the terms and
193conditions of the disposition.
194     (f)  Any conflict of interest was disclosed, including, but
195not limited to, conflicts of interest relating to members of the
196governing board and experts retained by the parties to the
197transaction.
198     (g)  The seller or lessor will receive fair market value
199for the assets.
200     (h)  The acquiring entity has made an enforceable
201commitment to ensure that quality health care will continue to
202be provided to all residents of the affected community, in
203particular the indigent, the uninsured, and the underinsured.
204     (i)  Whether the proposed transaction will result in a
205reduction or elimination of ad valorem or other taxes used to
206support the hospital.
207     (11)  Any party to the action has the right to seek
208judicial review in the appellate district where the petition was
209filed.
210     (a)  All proceedings shall be instituted by filing a notice
211of appeal or petition for review in accordance with the Florida
212Rules of Appellate Procedure within 30 days after the date of
213the final judgment.
214     (b)  In such judicial review, the reviewing court shall
215affirm the judgment of the circuit court, unless the decision is
216arbitrary, capricious, or not in compliance with this section.
217     (12)  All costs shall be paid by the governing board,
218except when an interested party contests the action, in which
219case the court may assign costs to the parties at its
220discretion.
221     (13)  Any sale or lease completed before March 9, 2011, is
222not subject to the requirements of this section. Any lease that
223contained, on March 9, 2011, an option to renew or extend that
224lease upon its expiration shall not be subject to this section
225upon any renewal or extension on or after March 9, 2011.
226     Section 2.  Section 395.3036, Florida Statutes, is amended
227to read:
228     395.3036  Confidentiality of records and meetings of
229corporations that lease public hospitals or other public health
230care facilities.-The records of a private corporation that
231leases a public hospital or other public health care facility
232are confidential and exempt from the provisions of s. 119.07(1)
233and s. 24(a), Art. I of the State Constitution, and the meetings
234of the governing board of a private corporation are exempt from
235s. 286.011 and s. 24(b), Art. I of the State Constitution when
236the public lessor complies with the public finance
237accountability provisions of s. 155.40(14)(5) with respect to
238the transfer of any public funds to the private lessee and when
239the private lessee meets at least three of the five following
240criteria:
241     (1)  The public lessor that owns the public hospital or
242other public health care facility was not the incorporator of
243the private corporation that leases the public hospital or other
244health care facility.
245     (2)  The public lessor and the private lessee do not
246commingle any of their funds in any account maintained by either
247of them, other than the payment of the rent and administrative
248fees or the transfer of funds pursuant to subsection (5)(2).
249     (3)  Except as otherwise provided by law, the private
250lessee is not allowed to participate, except as a member of the
251public, in the decisionmaking process of the public lessor.
252     (4)  The lease agreement does not expressly require the
253lessee to comply with the requirements of ss. 119.07(1) and
254286.011.
255     (5)  The public lessor is not entitled to receive any
256revenues from the lessee, except for rental or administrative
257fees due under the lease, and the lessor is not responsible for
258the debts or other obligations of the lessee.
259     Section 3.  This act shall take effect July 1, 2011.


CODING: Words stricken are deletions; words underlined are additions.