HB 619

1	A bill to be entitled
2	An act relating to the sale or lease of a county,
3	district, or municipal hospital; amending s. 155.40, F.S.;
4	requiring approval from the Attorney General for the sale
5	or lease of a county, district, or municipal hospital;
6	requiring the hospital governing board to determine by
7	certain public advertisements whether there are qualified
8	purchasers or lessees before the sale or lease of such
9	hospital; defining the term "fair-market value"; requiring
10	the board to state in writing specified criteria forming
11	the basis of its acceptance of a proposal for sale or
12	lease of the hospital; requiring the board to submit a
13	request for, and receive, approval from the Attorney
14	General before entering into any contract for sale or
15	lease of a hospital; specifying information to be included
16	in such request; requiring the Attorney General to report
17	his or her findings and decision regarding the sale or
18	lease of a hospital based on specified criteria and to
19	publish notice of such decision in the Florida
20	Administrative Weekly; authorizing the Attorney General to
21	issue subpoenas or written interrogatories for certain
22	purposes and request certain assistance during the review
23	of a proposed sale or lease transaction; authorizing
24	submission of written statements of opposition to a
25	proposed transaction, and written responses thereto, to
26	the Attorney General within a certain timeframe; amending
27	s. 395.3036, F.S.; conforming a cross-reference; providing
28	an effective date.
29
30	Be It Enacted by the Legislature of the State of Florida:
31
32	Section 1.  Subsections (1) and (4) of section 155.40,
33	Florida Statutes, are amended, subsections (5) through (8) are
34	renumbered as subsections (7) through (10), respectively, and
35	new subsections (5) and (6) are added to that section, to read:
36	155.40  Sale or lease of county, district, or municipal
37	hospital; effect of sale.-
38	(1)  In order that citizens and residents of the state may
39	receive quality health care, any county, district, or municipal
40	hospital organized and existing under the laws of this state,
41	acting by and through its governing board, shall have the
42	authority to sell or lease such hospital to a for-profit or not-
43	for-profit Florida corporation, and enter into leases or other
44	contracts with a for-profit or not-for-profit Florida
45	corporation for the purpose of operating and managing such
46	hospital and any or all of its facilities of whatsoever kind and
47	nature. The term of any such lease, contract, or agreement and
48	the conditions, covenants, and agreements to be contained
49	therein shall be determined by the governing board of such
50	county, district, or municipal hospital. The governing board of
51	the hospital must find that the sale, lease, or contract is in
52	the best interests of the public and must state the basis of
53	such finding. The sale or lease of such hospital is subject to
54	approval by the Attorney General. If the governing board of a
55	county, district, or municipal hospital decides to lease the
56	hospital, it must give notice in accordance with paragraph
57	(4)(a) or paragraph (4)(b).
58	(4)  If In the event the governing board of a county,
59	district, or municipal hospital determines that it is no longer
60	in the public interest to own or operate such hospital and
61	elects to consider a sale or lease to a third party, the
62	governing board must first determine whether there are any
63	interested and qualified purchasers or lessees by elects to sell
64	or lease the hospital, the board shall:
65	(a)  Negotiate the terms of the sale or lease with a for-
66	profit or not-for-profit Florida corporation and Publicly
67	advertising advertise the meeting at which the proposed sale or
68	lease will be considered by the governing board of the hospital
69	in accordance with s. 286.0105; or
70	(b)  Publicly advertising advertise the offer to accept
71	proposals in accordance with s. 255.0525 and receive proposals
72	from all interested and qualified purchasers.
73
74	The governing board shall receive proposals from all interested
75	and qualified purchasers or lessees. Any sale or lease must be
76	for fair market value, and any sale or lease must comply with
77	all applicable state and federal antitrust laws. For the
78	purposes of this section, the term "fair market value" means the
79	most probable price that the asset would bring in a competitive
80	and open market under all conditions requisite to a fair sale or
81	lease, with interested and qualified parties acting prudently
82	and knowledgeably, and with a reasonable time allowed for the
83	asset to be exposed in the open market.
84	(5)  A determination by a governing board to accept a
85	proposal for sale or lease must state, in writing, the findings
86	and basis supporting its determination. The findings must
87	include, but need not be limited to, that the proposal:
88	(a)  Represents fair market value.
89	(b)  Constitutes the best use of the hospital facilities.
90	(c)  Has a positive impact on the reduction or elimination
91	of ad valorem or other tax revenues to support the hospital.
92	(d)  Ensures that quality health care will continue to be
93	provided to all residents of the affected community,
94	particularly to the indigent, the uninsured, and the
95	underinsured.
96	(6)  A governing board of a county, district, or municipal
97	hospital may not enter into a sale or lease of a hospital
98	facility without receiving the approval of the Attorney General.
99	(a)  The governing board must submit a request for
100	approval, in writing, to the Attorney General within 120 days
101	before the anticipated closing date of the proposed transaction.
102	The request for approval must include:
103	1.  The name and address of all parties to the transaction.
104	2.  The location of the hospital and all related
105	facilities.
106	3.  A description of the terms of all proposed agreements.
107	4.  A copy of the proposed sale or lease agreement and any
108	related agreements, including, but not limited to, leases,
109	management contracts, service contracts, and memoranda of
110	understanding.
111	5.  The estimated total value associated with the proposed
112	transaction and the proposed acquisition price and other
113	considerations.
114	6.  Any valuations of the hospital's assets prepared in the
115	3 years preceding the proposed transaction date.
116	7.  Any financial or economic analysis and report from any
117	expert or consultant retained by the governing board.
118	8.  A fairness evaluation by an independent expert in such
119	transactions.
120	9.  Copies of all other proposals and bids the governing
121	board may have received or considered as required by subsection
122	(4).
123
124	After receipt of the information required under this paragraph,
125	the Attorney General may request additional information before
126	granting approval.
127	(b)  Within 30 days after receipt of the request for
128	approval, the Attorney General shall publish a notice of the
129	proposed transaction in one or more newspapers of general
130	circulation in the county where the hospital is located and in
131	the Florida Administrative Weekly. Such notice must state that
132	the Attorney General has received notice of the proposed
133	transaction, the names of the parties involved, and the means by
134	which a person may submit written comments about the proposed
135	transaction to the Attorney General.
136	(c)  During the course of any proceeding required under
137	this section, the Attorney General may issue in writing and
138	cause to be served by subpoena upon any person a demand that
139	such person appear before the Attorney General to give testimony
140	or produce documents as to any matters relevant to the scope of
141	the review or may issue a written interrogatory, to be answered
142	under oath, as to any matter relevant to the scope of the review
143	and prescribing a return date that allows a reasonable time to
144	respond. If a person fails to comply with this paragraph, the
145	Attorney General may apply to any appropriate court to seek
146	enforcement of the subpoena or written interrogatory.
147	(d)  The Attorney General may contract with experts or
148	consultants to assist in reviewing the proposed transaction,
149	including, but not limited to, assistance in independently
150	determining the fair market value of the proposed transaction.
151	The Attorney General shall submit any bills for such contracts
152	to the proposed purchaser or lessee. The proposed purchaser or
153	lessee must pay such bills within 30 days after receipt.
154	(e)  Within 20 days after publication of notice under
155	paragraph (b), any interested person may submit to the Attorney
156	General a detailed written statement of opposition to the
157	proposed transaction. Upon expiration of such 20-day period, if
158	a written statement of opposition is submitted, the governing
159	board, the proposed purchaser or lessee, or any other person has
160	an additional 10 days in which to submit a written response to
161	the Attorney General. The Attorney General may request
162	additional information.
163	(f)  Within 60 days after receipt of all information
164	required by this subsection, the Attorney General shall publish
165	a report of his or her findings and the decision to approve,
166	with or without modification, or deny the proposed transaction,
167	based upon a determination of whether the proposed transaction
168	is in substantial compliance with this subsection in the Florida
169	Administrative Weekly. In making that decision, the Attorney
170	General must determine:
171	1.  That the proposed transaction is permitted by Florida
172	statutory and common law.
173	2.  That the proposed transaction results in the best use
174	of the hospital facilities and assets.
175	3.  That the proposed transaction does not discriminate
176	among proposed purchasers or lessees by virtue of whether a
177	proposed purchaser or lessee is a for-profit or a not-for-profit
178	Florida corporation.
179	4.  Whether the governing board of the hospital publicly
180	advertised the meeting at which the proposed transaction was
181	considered by the board in compliance with s. 286.0105.
182	5.  Whether the governing board of the hospital publicly
183	advertised the offer to accept proposals in compliance with s.
184	255.0525.
185	6.  Whether the governing board of the hospital exercised
186	due diligence in deciding to dispose of hospital assets,
187	selecting the proposed purchaser or lessee, and negotiating the
188	terms and conditions of the disposition.
189	7.  Whether the procedures used by the governing board of
190	the hospital in making its decision to dispose of its assets
191	were fair and reasonable.
192	8.  Whether any conflict of interest was disclosed,
193	including, but not limited to, conflicts of interest regarding
194	members of the governing board and experts retained by the
195	parties to the transaction.
196	9.  Whether the seller or lessor will receive fair market
197	value for the assets.
198	10.  Whether charitable assets will be placed at
199	unreasonable risk if the transaction is financed in part by the
200	seller or lessor.
201	11.  Whether the terms of any management or services
202	contract negotiated in conjunction with the transaction are fair
203	and reasonable.
204	12.  Whether the proposed purchaser or lessee has made an
205	enforceable commitment to provide health care to the indigent,
206	the uninsured, and the underinsured and to provide benefits to
207	the affected community to promote improved health care.
208	13.  Whether the proposed transaction will result in a
209	reduction or elimination of ad valorem or other taxes used to
210	support the hospital.
211	Section 2.  Section 395.3036, Florida Statutes, is amended
212	to read:
213	395.3036  Confidentiality of records and meetings of
214	corporations that lease public hospitals or other public health
215	care facilities.-The records of a private corporation that
216	leases a public hospital or other public health care facility
217	are confidential and exempt from the provisions of s. 119.07(1)
218	and s. 24(a), Art. I of the State Constitution, and the meetings
219	of the governing board of a private corporation are exempt from
220	s. 286.011 and s. 24(b), Art. I of the State Constitution when
221	the public lessor complies with the public finance
222	accountability provisions of s. 155.40(7)(5) with respect to the
223	transfer of any public funds to the private lessee and when the
224	private lessee meets at least three of the five following
225	criteria:
226	(1)  The public lessor that owns the public hospital or
227	other public health care facility was not the incorporator of
228	the private corporation that leases the public hospital or other
229	health care facility.
230	(2)  The public lessor and the private lessee do not
231	commingle any of their funds in any account maintained by either
232	of them, other than the payment of the rent and administrative
233	fees or the transfer of funds pursuant to subsection (2).
234	(3)  Except as otherwise provided by law, the private
235	lessee is not allowed to participate, except as a member of the
236	public, in the decisionmaking process of the public lessor.
237	(4)  The lease agreement does not expressly require the
238	lessee to comply with the requirements of ss. 119.07(1) and
239	286.011.
240	(5)  The public lessor is not entitled to receive any
241	revenues from the lessee, except for rental or administrative
242	fees due under the lease, and the lessor is not responsible for
243	the debts or other obligations of the lessee.
244	Section 3.  This act shall take effect July 1, 2011.

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