CS/CS/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 unless
6certain exemption or referendum approval applies;
7requiring the hospital governing board to determine by
8certain public advertisements whether there are qualified
9purchasers or lessees before the sale or lease of such
10hospital; defining the term "fair market value"; requiring
11the board to state in writing specified criteria forming
12the basis of its acceptance of a proposal for sale or
13lease of the hospital; providing for publication of
14notice; authorizing submission of written statements of
15opposition to a proposed transaction, and written
16responses thereto, to the hospital governing board within
17a certain timeframe; requiring the board to file a
18petition for approval with the circuit court and receive
19approval before any transaction is finalized; providing an
20exception; specifying information to be included in such
21petition; providing for the circuit court to issue an
22order requiring all interested parties to appear before
23the court under certain circumstances; defining the term
24"interested party"; granting the circuit court
25jurisdiction to approve sales or leases of county,
26district, or municipal hospitals based on specified
27criteria; providing for a party to seek judicial review;
28requiring the court to enter a final judgment; requiring
29the board to accept or reject the proposal for sale or
30lease; requiring the board to pay costs associated with
31the petition for approval unless a party contests the
32action; providing an exemption for certain sale or lease
33transactions completed before a specified date; providing
34an exemption for county, district, or municipal hospitals
35that receive no tax support; defining the term "tax
36support"; amending s. 395.3036, F.S.; conforming cross-
37references; providing an effective date.
38
39Be It Enacted by the Legislature of the State of Florida:
40
41     Section 1.  Subsections (1) and (4) of section 155.40,
42Florida Statutes, are amended, subsections (5) through (8) are
43renumbered as subsections (15) through (18), respectively, and
44new subsections (5) through (14) are added to that section, to
45read:
46     155.40  Sale or lease of county, district, or municipal
47hospital; effect of sale.-
48     (1)  In order that citizens and residents of the state may
49receive quality health care, any county, district, or municipal
50hospital organized and existing under the laws of this state,
51acting by and through its governing board, shall have the
52authority to sell or lease such hospital to a for-profit or not-
53for-profit Florida corporation, and enter into leases or other
54contracts with a for-profit or not-for-profit Florida
55corporation for the purpose of operating and managing such
56hospital and any or all of its facilities of whatsoever kind and
57nature. The term of any such lease, contract, or agreement and
58the conditions, covenants, and agreements to be contained
59therein shall be determined by the governing board of such
60county, district, or municipal hospital. The governing board of
61the hospital must find that the sale, lease, or contract is in
62the best interests of the public and must state the basis of
63such finding. The sale or lease of such hospital is subject to
64approval by a circuit court unless otherwise exempt under
65subsection (14) or, for those hospitals that are required by
66their statutory charter to seek approval by referendum for any
67action which would result in the termination of the direct
68control of such hospital by its governing board, approval by
69such referendum. If the governing board of a county, district,
70or municipal hospital decides to lease the hospital, it must
71give notice in accordance with paragraph (4)(a) or paragraph
72(4)(b).
73     (4)  In the event the governing board of a county,
74district, or municipal hospital determines that it is no longer
75in the public interest to own or operate such hospital and
76elects to consider a sale or lease to a third party, the
77governing board shall first determine whether there are any
78qualified purchasers or lessees. In the process of evaluating
79any potential purchasers or lessees elects to sell or lease the
80hospital, the board shall:
81     (a)  Negotiate the terms of the sale or lease with a for-
82profit or not-for-profit Florida corporation and Publicly
83advertise the meeting at which the proposed sale or lease will
84be considered by the governing board of the hospital in
85accordance with s. 286.0105; or
86     (b)  Publicly advertise the offer to accept proposals in
87accordance with s. 255.0525 and receive proposals from all
88interested and qualified purchasers and lessees.
89
90Any sale or lease must be for fair market value, and any sale or
91lease must comply with all applicable state and federal
92antitrust laws. For the purposes of this section, the term "fair
93market value" means the price that a seller is willing to accept
94and a buyer is willing to pay on the open market and in an
95arm's-length transaction.
96     (5)  A determination by a governing board to accept a
97proposal for sale or lease shall state, in writing, the findings
98and basis supporting the determination.
99     (a)  The board shall develop findings and bases to support
100the determination of a balanced consideration of factors
101including, but not limited to, the following:
102     1.  Whether the proposal represents fair market value, and
103if the proposal does not represent fair market value, a detailed
104explanation of why the public interest is served by the
105acceptance of less than fair market value.
106     2.  Whether the proposal will result in a reduction or
107elimination of ad valorem or other tax revenues to support the
108hospital.
109     3.  Whether the proposal includes an enforceable commitment
110that existing programs and services and quality health care will
111continue to be provided to all residents of the affected
112community, particularly to the indigent, the uninsured, and the
113underinsured.
114     4.  Whether the proposal is otherwise in compliance with
115subsections (6) and (7).
116     (b)  The findings shall be accompanied by all information
117and documents relevant to the governing board's determination,
118including, but not limited to:
119     1.  The name and address of all parties to the transaction.
120     2.  The location of the hospital and all related
121facilities.
122     3.  A description of the terms of all proposed agreements.
123     4.  A copy of the proposed sale or lease agreement and any
124related agreements, including, but not limited to, leases,
125management contracts, service contracts, and memoranda of
126understanding.
127     5.  The estimated total value associated with the proposed
128agreement and the proposed acquisition price and other
129consideration.
130     6.  Any valuations of the hospital's assets prepared in the
1313 years immediately preceding the proposed transaction date.
132     7.  Any financial or economic analysis and report from any
133expert or consultant retained by the governing board.
134     8.  A fairness evaluation by an independent expert in such
135transactions.
136     9.  Copies of all other proposals and bids the governing
137board may have received or considered in compliance with the
138procedures required under subsection (4).
139     (6)  Not later than 120 days before the anticipated closing
140date of the proposed transaction, the governing board shall
141publish a notice of the proposed transaction in one or more
142newspapers of general circulation in the county in which the
143majority of the physical assets of the hospital are located. The
144notice shall include the names of the parties involved, the
145means by which persons may submit written comments about the
146proposed transaction to the governing board, and the means by
147which persons may obtain copies of the findings and documents
148required under subsection (5).
149     (7)  Within 20 days after the date of publication of public
150notice, any interested person may submit to the governing board
151a detailed written statement of opposition to the transaction.
152When a written statement of opposition has been submitted, the
153governing board or the proposed purchaser or lessee may submit a
154written response to the interested party within 10 days after
155the written statement of opposition due date.
156     (8)  A governing board of a county, district, or municipal
157hospital may not enter into a sale or lease of a hospital
158facility without first receiving approval from a circuit court
159or, for those hospitals which are required by their statutory
160charter to seek approval by referendum for any action which
161would result in the termination of the direct control of such
162hospital by its governing board, approval by such referendum.
163     (a)  The governing board shall file a petition for approval
164in a circuit court seeking approval of the proposed transaction
165not sooner than 30 days after publication of notice of the
166proposed transaction.
167     (b)  Any such petition for approval filed by the governing
168board shall include all findings and documents required under
169subsection (5) and certification by the governing board of
170compliance with all requirements of this section.
171     (c)  Circuit courts shall have jurisdiction to approve the
172sale or lease of a county, district, or municipal hospital. A
173petition for approval shall be filed in the circuit in which the
174majority of the physical assets of the hospital are located.
175     (9)  Upon the filing of a petition for approval, the court
176shall issue an order requiring all interested parties to appear
177at a designated time and place within the circuit where the
178petition is filed and show why the petition should or should not
179be granted. For purposes of this section, the term "interested
180party" means any party submitting a proposal for sale or lease
181of the county, district, or municipal hospital; any taxpayer
182from the county, district, or municipality in which the majority
183of the physical assets of the hospital are located; and the
184governing board.
185     (a)  Before the date set for the hearing, the clerk shall
186publish a copy of the order in one or more newspapers of general
187circulation in the county in which the majority of the physical
188assets of the hospital are located at least once each week for 2
189consecutive weeks, commencing with the first publication, which
190shall not be less than 20 days before the date set for the
191hearing. By this publication, all interested parties are made
192parties defendant to the action and the court has jurisdiction
193of them to the same extent as if named as defendants in the
194petition and personally served with process.
195     (b)  Any interested party may become a party to the action
196by moving against or pleading to the petition at or before the
197time set for the hearing. At the hearing, the court shall
198determine all questions of law and fact and make such orders as
199will enable it to properly consider and determine the action and
200render a final judgment with the least possible delay.
201     (10)  Upon conclusion of all hearings and proceedings, and
202upon consideration of all evidence presented, the court shall
203render a final judgment approving or denying the proposed
204transaction and shall order the governing board to either accept
205or reject the proposal for sale or lease of the county,
206district, or municipal hospital. In reaching its final judgment,
207the court shall determine whether:
208     (a)  The proposed transaction is permitted by law.
209     (b)  The proposed transaction unreasonably excludes a
210potential purchaser or lessee on the basis of being a for-profit
211or a not-for-profit Florida corporation.
212     (c)  The governing board of the hospital publicly
213advertised the meeting at which the proposed transaction was
214considered by the board in compliance with ss. 286.0105 and
215286.011.
216     (d)  The governing board of the hospital publicly
217advertised the offer to accept proposals in compliance with s.
218255.0525.
219     (e)  The governing board of the hospital exercised due
220diligence in deciding to dispose of hospital assets, selecting
221the proposed purchaser or lessee, and negotiating the terms and
222conditions of the disposition.
223     (f)  Any conflict of interest was disclosed, including, but
224not limited to, conflicts of interest relating to members of the
225governing board and experts retained by the parties to the
226transaction.
227     (g)  The seller or lessor will receive fair market value
228for the assets, or if the sale or lease represents less than
229fair market value, why the public interest will be served by
230acceptance of less than fair market value.
231     (h)  The acquiring entity has made an enforceable
232commitment that existing programs and services, and quality
233health care, will continue to be provided to all residents of
234the affected community, particularly to the indigent, the
235uninsured, and the underinsured.
236     (i)  Whether the proposed transaction will result in a
237reduction or elimination of ad valorem or other taxes used to
238support the hospital.
239     (11)  Any party to the action has the right to seek
240judicial review in the appellate district where the petition was
241filed.
242     (a)  All proceedings shall be instituted by filing a notice
243of appeal or petition for review in accordance with the Florida
244Rules of Appellate Procedure within 30 days after the date of
245the final judgment.
246     (b)  In such judicial review, the reviewing court shall
247affirm the judgment of the circuit court, unless the decision is
248arbitrary, capricious, or not in compliance with this section.
249     (12)  All costs shall be paid by the governing board,
250except when an interested party contests the action, in which
251case the court may assign costs to the parties at its
252discretion.
253     (13)  Any sale or lease completed before March 9, 2011, is
254not subject to the requirements of this section. Any lease that
255contained, on March 9, 2011, an option to renew or extend that
256lease upon its expiration shall not be subject to this section
257upon any renewal or extension on or after March 9, 2011.
258     (14)  A county, district, or municipal hospital that has
259not received any tax support is exempt from the requirements of
260subsections (8)-(12). For the purposes of this section, the term
261"tax support" means ad valorem or other tax revenues paid
262directly from a county, district, or municipal taxing authority
263to a hospital without a corresponding exchange of goods or
264services within the 5 years before the effective date of a
265proposed lease or sale.
266     Section 2.  Section 395.3036, Florida Statutes, is amended
267to read:
268     395.3036  Confidentiality of records and meetings of
269corporations that lease public hospitals or other public health
270care facilities.-The records of a private corporation that
271leases a public hospital or other public health care facility
272are confidential and exempt from the provisions of s. 119.07(1)
273and s. 24(a), Art. I of the State Constitution, and the meetings
274of the governing board of a private corporation are exempt from
275s. 286.011 and s. 24(b), Art. I of the State Constitution when
276the public lessor complies with the public finance
277accountability provisions of s. 155.40(15)(5) with respect to
278the transfer of any public funds to the private lessee and when
279the private lessee meets at least three of the five following
280criteria:
281     (1)  The public lessor that owns the public hospital or
282other public health care facility was not the incorporator of
283the private corporation that leases the public hospital or other
284health care facility.
285     (2)  The public lessor and the private lessee do not
286commingle any of their funds in any account maintained by either
287of them, other than the payment of the rent and administrative
288fees or the transfer of funds pursuant to subsection (5)(2).
289     (3)  Except as otherwise provided by law, the private
290lessee is not allowed to participate, except as a member of the
291public, in the decisionmaking process of the public lessor.
292     (4)  The lease agreement does not expressly require the
293lessee to comply with the requirements of ss. 119.07(1) and
294286.011.
295     (5)  The public lessor is not entitled to receive any
296revenues from the lessee, except for rental or administrative
297fees due under the lease, and the lessor is not responsible for
298the debts or other obligations of the lessee.
299     Section 3.  This act shall take effect January 1, 2012.


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