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 pay costs associated with the petition for
30approval unless a party contests the action; providing an
31exemption for certain sale or lease transactions completed
32before a specified date; providing an exemption for
33county, district, or municipal hospitals that receive no
34tax support; defining the term "tax support"; amending s.
35395.3036, F.S.; conforming cross-references; providing an
36effective date.
37
38Be It Enacted by the Legislature of the State of Florida:
39
40     Section 1.  Subsections (1) and (4) of section 155.40,
41Florida Statutes, are amended, subsections (5) through (8) are
42renumbered as subsections (15) through (18), respectively, and
43new subsections (5) through (14) are added to that section, to
44read:
45     155.40  Sale or lease of county, district, or municipal
46hospital; effect of sale.-
47     (1)  In order that citizens and residents of the state may
48receive quality health care, any county, district, or municipal
49hospital organized and existing under the laws of this state,
50acting by and through its governing board, shall have the
51authority to sell or lease such hospital to a for-profit or not-
52for-profit Florida corporation, and enter into leases or other
53contracts with a for-profit or not-for-profit Florida
54corporation for the purpose of operating and managing such
55hospital and any or all of its facilities of whatsoever kind and
56nature. The term of any such lease, contract, or agreement and
57the conditions, covenants, and agreements to be contained
58therein shall be determined by the governing board of such
59county, district, or municipal hospital. The governing board of
60the hospital must find that the sale, lease, or contract is in
61the best interests of the public and must state the basis of
62such finding. The sale or lease of such hospital is subject to
63approval by a circuit court unless otherwise exempt under
64subsection (14) or, for those hospitals that are required by
65their statutory charter to seek approval by referendum for any
66action which would result in the termination of the direct
67control of such hospital by its governing board, approval by
68such referendum. If the governing board of a county, district,
69or municipal hospital decides to lease the hospital, it must
70give notice in accordance with paragraph (4)(a) or paragraph
71(4)(b).
72     (4)  In the event the governing board of a county,
73district, or municipal hospital determines that it is no longer
74in the public interest to own or operate such hospital and
75elects to consider a sale or lease to a third party, the
76governing board shall first determine whether there are any
77qualified purchasers or lessees. In the process of evaluating
78any potential purchasers or lessees elects to sell or lease the
79hospital, the board shall:
80     (a)  Negotiate the terms of the sale or lease with a for-
81profit or not-for-profit Florida corporation and Publicly
82advertise the meeting at which the proposed sale or lease will
83be considered by the governing board of the hospital in
84accordance with s. 286.0105; or
85     (b)  Publicly advertise the offer to accept proposals in
86accordance with s. 255.0525 and receive proposals from all
87interested and qualified purchasers and lessees.
88
89Any sale or lease must be for fair market value, and any sale or
90lease must comply with all applicable state and federal
91antitrust laws. For the purposes of this section, the term "fair
92market value" means the price that a seller is willing to accept
93and a buyer is willing to pay on the open market and in an
94arm's-length transaction, which includes any benefit that the
95public would receive in connection with the sale or lease.
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,
103which includes an explanation of why the public interest is
104served by the proposed transaction.
105     2.  Whether the proposal will result in a reduction or
106elimination of ad valorem or other tax revenues to support the
107hospital.
108     3.  Whether the proposal includes an enforceable commitment
109that existing programs and services and quality health care will
110continue to be provided to all residents of the affected
111community, particularly to the indigent, the uninsured, and the
112underinsured.
113     4.  Whether the proposal is otherwise in compliance with
114subsections (6) and (7).
115     (b)  The findings shall be accompanied by all information
116and documents relevant to the governing board's determination,
117including, but not limited to:
118     1.  The name and address of all parties to the transaction.
119     2.  The location of the hospital and all related
120facilities.
121     3.  A description of the terms of all proposed agreements.
122     4.  A copy of the proposed sale or lease agreement and any
123related agreements, including, but not limited to, leases,
124management contracts, service contracts, and memoranda of
125understanding.
126     5.  The estimated total value associated with the proposed
127agreement and the proposed acquisition price and other
128consideration.
129     6.  Any valuations of the hospital's assets prepared in the
1303 years immediately preceding the proposed transaction date.
131     7.  Any financial or economic analysis and report from any
132expert or consultant retained by the governing board.
133     8.  A fairness evaluation by an independent expert in such
134transactions.
135     9.  Copies of all other proposals and bids the governing
136board may have received or considered in compliance with the
137procedures required under subsection (4).
138     (6)  Not later than 120 days before the anticipated closing
139date of the proposed transaction, the governing board shall
140publish a notice of the proposed transaction in one or more
141newspapers of general circulation in the county in which the
142majority of the physical assets of the hospital are located. The
143notice shall include the names of the parties involved, the
144means by which persons may submit written comments about the
145proposed transaction to the governing board, and the means by
146which persons may obtain copies of the findings and documents
147required under subsection (5).
148     (7)  Within 20 days after the date of publication of public
149notice, any interested person may submit to the governing board
150a detailed written statement of opposition to the transaction.
151When a written statement of opposition has been submitted, the
152governing board or the proposed purchaser or lessee may submit a
153written response to the interested party within 10 days after
154the written statement of opposition due date.
155     (8)  A governing board of a county, district, or municipal
156hospital may not enter into a sale or lease of a hospital
157facility without first receiving approval from a circuit court
158or, for those hospitals which are required by their statutory
159charter to seek approval by referendum for any action which
160would result in the termination of the direct control of such
161hospital by its governing board, approval by such referendum.
162     (a)  The governing board shall file a petition for approval
163in a circuit court seeking approval of the proposed transaction
164not sooner than 30 days after publication of notice of the
165proposed transaction.
166     (b)  Any such petition for approval filed by the governing
167board shall include all findings and documents required under
168subsection (5) and certification by the governing board of
169compliance with all requirements of this section.
170     (c)  Circuit courts shall have jurisdiction to approve the
171sale or lease of a county, district, or municipal hospital. A
172petition for approval shall be filed in the circuit in which the
173majority of the physical assets of the hospital are located.
174     (9)  Upon the filing of a petition for approval, the court
175shall issue an order requiring all interested parties to appear
176at a designated time and place within the circuit where the
177petition is filed and show why the petition should or should not
178be granted. For purposes of this section, the term "interested
179party" means any party submitting a proposal for sale or lease
180of the county, district, or municipal hospital; any taxpayer
181from the county, district, or municipality in which the majority
182of the physical assets of the hospital are located; and the
183governing board.
184     (a)  Before the date set for the hearing, the clerk shall
185publish a copy of the order in one or more newspapers of general
186circulation in the county in which the majority of the physical
187assets of the hospital are located at least once each week for 2
188consecutive weeks, commencing with the first publication, which
189shall not be less than 20 days before the date set for the
190hearing. By this publication, all interested parties are made
191parties defendant to the action and the court has jurisdiction
192of them to the same extent as if named as defendants in the
193petition and personally served with process.
194     (b)  Any interested party may become a party to the action
195by moving against or pleading to the petition at or before the
196time set for the hearing. At the hearing, the court shall
197determine all questions of law and fact and make such orders as
198will enable it to properly consider and determine the action and
199render a final judgment with the least possible delay.
200     (10)  Upon conclusion of all hearings and proceedings, and
201upon consideration of all evidence presented, the court shall
202render a final judgment as to whether the governing board
203complied with the process provided in this section. In reaching
204its final judgment, the court shall determine whether:
205     (a)  The proposed transaction is permitted by law.
206     (b)  The governing board reviewed all proposals.
207     (c)  The governing board publicly advertised the meeting at
208which the proposed transaction was considered by the board in
209compliance with ss. 286.0105 and 286.011.
210     (d)  The governing board publicly advertised the offer to
211accept proposals in compliance with s. 255.0525.
212     (e)  The governing board did not act arbitrarily and
213capriciously in making the determination to sell or lease the
214hospital assets, selecting the proposed purchaser or lessee, and
215negotiating the terms of the sale of lease.
216     (f)  Any conflict of interest was disclosed, including, but
217not limited to, conflicts of interest relating to members of the
218governing board and experts retained by the parties to the
219transaction.
220     (g)  The seller or lessor will receive fair market value
221for the assets, which includes an explanation of why the public
222interest is served by the proposed transaction.
223     (h)  The governing board incorporated a provision in the
224sale or lease requiring the acquiring entity to continue to
225provide existing programs and services and quality health care
226to all residents of the affected community, particularly to the
227indigent, the uninsured, and the underinsured.
228     (i)  The proposed transaction will result in a reduction or
229elimination of ad valorem or other taxes used to support the
230hospital.
231     (11)  Any party to the action has the right to seek
232judicial review in the appellate district where the petition was
233filed.
234     (a)  All proceedings shall be instituted by filing a notice
235of appeal or petition for review in accordance with the Florida
236Rules of Appellate Procedure within 30 days after the date of
237the final judgment.
238     (b)  In such judicial review, the reviewing court shall
239affirm the judgment of the circuit court, unless the decision is
240arbitrary, capricious, or not in compliance with this section.
241     (12)  All costs shall be paid by the governing board,
242except when an interested party contests the action, in which
243case the court may assign costs to the parties at its
244discretion.
245     (13)  Any sale or lease completed before March 9, 2011, is
246not subject to the requirements of this section. Any lease that
247contained, on March 9, 2011, an option to renew or extend that
248lease upon its expiration shall not be subject to this section
249upon any renewal or extension on or after March 9, 2011.
250     (14)  A county, district, or municipal hospital that has
251not received any tax support is exempt from the requirements of
252subsections (8)-(12). For the purposes of this section, the term
253"tax support" means ad valorem or other tax revenues paid
254directly from a county, district, or municipal taxing authority
255to a hospital without a corresponding exchange of goods or
256services within the 5 years before the effective date of a
257proposed lease or sale.
258     Section 2.  Section 395.3036, Florida Statutes, is amended
259to read:
260     395.3036  Confidentiality of records and meetings of
261corporations that lease public hospitals or other public health
262care facilities.-The records of a private corporation that
263leases a public hospital or other public health care facility
264are confidential and exempt from the provisions of s. 119.07(1)
265and s. 24(a), Art. I of the State Constitution, and the meetings
266of the governing board of a private corporation are exempt from
267s. 286.011 and s. 24(b), Art. I of the State Constitution when
268the public lessor complies with the public finance
269accountability provisions of s. 155.40(15)(5) with respect to
270the transfer of any public funds to the private lessee and when
271the private lessee meets at least three of the five following
272criteria:
273     (1)  The public lessor that owns the public hospital or
274other public health care facility was not the incorporator of
275the private corporation that leases the public hospital or other
276health care facility.
277     (2)  The public lessor and the private lessee do not
278commingle any of their funds in any account maintained by either
279of them, other than the payment of the rent and administrative
280fees or the transfer of funds pursuant to subsection (5)(2).
281     (3)  Except as otherwise provided by law, the private
282lessee is not allowed to participate, except as a member of the
283public, in the decisionmaking process of the public lessor.
284     (4)  The lease agreement does not expressly require the
285lessee to comply with the requirements of ss. 119.07(1) and
286286.011.
287     (5)  The public lessor is not entitled to receive any
288revenues from the lessee, except for rental or administrative
289fees due under the lease, and the lessor is not responsible for
290the debts or other obligations of the lessee.
291     Section 3.  This act shall take effect January 1, 2012.


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