| 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, |
| 4 | F.S.; providing that the sale or lease of a county, |
| 5 | district, or municipal hospital is subject to approval |
| 6 | by the registered voters or by the circuit court; |
| 7 | requiring the hospital governing board to determine by |
| 8 | certain public advertisements whether there are |
| 9 | qualified purchasers or lessees before the sale or |
| 10 | lease of such hospital; defining the term "fair market |
| 11 | value"; requiring the board to state in writing |
| 12 | specified criteria forming the basis of its acceptance |
| 13 | of a proposal for sale or lease of the hospital; |
| 14 | providing for publication of notice; authorizing |
| 15 | submission of written statements of opposition to a |
| 16 | proposed transaction, and written responses thereto, |
| 17 | within a certain timeframe; requiring the board to |
| 18 | file a petition for approval with the circuit court |
| 19 | and receive approval before any transaction is |
| 20 | finalized; specifying information to be included in |
| 21 | such petition; providing for the circuit court to |
| 22 | issue an order requiring all interested parties to |
| 23 | appear before the court under certain circumstances; |
| 24 | requiring the clerk of the court to publish the copy |
| 25 | of the order in certain newspapers at specified times; |
| 26 | providing that certain parties are made parties to the |
| 27 | action by the publication of the order; granting the |
| 28 | circuit court jurisdiction to approve the sale or |
| 29 | lease of a county, district, or municipal hospital |
| 30 | based on specified criteria; providing for a party to |
| 31 | seek judicial review; requiring that the reviewing |
| 32 | court affirm the judgment of the circuit court unless |
| 33 | the decision is arbitrary, capricious, or not in |
| 34 | compliance with the act; requiring the board to pay |
| 35 | costs associated with the petition for approval unless |
| 36 | a party contests the action; providing an exemption |
| 37 | for certain sale or lease transactions completed |
| 38 | before a specified date; amending s. 395.3036, F.S.; |
| 39 | conforming cross-references; providing an effective |
| 40 | date. |
| 41 |
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| 42 | Be It Enacted by the Legislature of the State of Florida: |
| 43 |
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| 44 | Section 1. Subsections (1) and (4) of section 155.40, |
| 45 | Florida Statutes, are amended, present subsections (5) through |
| 46 | (8) of that section are renumbered as subsections (14) through |
| 47 | (17), respectively, and new subsections (5) through (13) are |
| 48 | added to that section, to read: |
| 49 | 155.40 Sale or lease of county, district, or municipal |
| 50 | hospital; effect of sale.- |
| 51 | (1) In order for that citizens and residents of the state |
| 52 | to may receive quality health care, any county, district, or |
| 53 | municipal hospital organized and existing under the laws of this |
| 54 | state, acting by and through its governing board, may shall have |
| 55 | the authority to sell or lease such hospital to a for-profit or |
| 56 | not-for-profit Florida corporation, and enter into leases or |
| 57 | other contracts with a for-profit or not-for-profit Florida |
| 58 | corporation for the purpose of operating and managing such |
| 59 | hospital and any or all of its facilities of whatsoever kind and |
| 60 | nature. The term of any such lease, contract, or agreement and |
| 61 | the conditions, covenants, and agreements to be contained |
| 62 | therein shall be determined by the governing board of such |
| 63 | county, district, or municipal hospital. The governing board of |
| 64 | the hospital must find that the sale, lease, or contract is in |
| 65 | the best interests of the public and must state the basis of |
| 66 | such finding. The sale or lease of such hospital is subject to |
| 67 | approval by a majority vote of the registered voters in the |
| 68 | county, district, or municipality or, in the alternative, |
| 69 | approval by a circuit court. If the governing board of a county, |
| 70 | district, or municipal hospital decides to lease the hospital, |
| 71 | it must give notice in accordance with paragraph (4)(a) or |
| 72 | paragraph (4)(b). |
| 73 | (4) If In the event the governing board of a county, |
| 74 | district, or municipal hospital determines that it is no longer |
| 75 | in the public interest to own or operate such hospital and |
| 76 | elects to consider a sale or lease of the hospital to a third |
| 77 | party, the governing board must first determine whether there |
| 78 | are any qualified purchasers or lessees. In the process of |
| 79 | evaluating any potential purchasers or lessees elects to sell or |
| 80 | lease the hospital, the board shall: |
| 81 | (a) Negotiate the terms of the sale or lease with a for- |
| 82 | profit or not-for-profit Florida corporation and Publicly |
| 83 | advertise the meeting at which the proposed sale or lease will |
| 84 | be considered by the governing board of the hospital in |
| 85 | accordance with s. 286.0105; or |
| 86 | (b) Publicly advertise the offer to accept proposals in |
| 87 | accordance with s. 255.0525 and receive proposals from all |
| 88 | interested and qualified purchasers and lessees. |
| 89 |
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| 90 | Any sale or lease must be for fair market value, and any sale or |
| 91 | lease must comply with all applicable state and federal |
| 92 | antitrust laws. For the purposes of this section, the term "fair |
| 93 | market value" means the price that a seller is willing to accept |
| 94 | and a buyer is willing to pay on the open market and in an arms- |
| 95 | length transaction. |
| 96 | (5) A determination by a governing board to accept a |
| 97 | proposal for sale or lease must state, in writing, the findings |
| 98 | and basis for supporting the determination. |
| 99 | (a) The findings and basis for supporting the governing |
| 100 | board's determination must include, but need not be limited to, |
| 101 | a balanced consideration of the following factors: |
| 102 | 1. The proposal represents fair market value, or if the |
| 103 | proposal does not represent fair market value, a detailed |
| 104 | explanation of why the public interest is served by the |
| 105 | acceptance of less than fair market value. |
| 106 | 2. Whether the proposal will result in a reduction or |
| 107 | elimination of ad valorem or other tax revenues to support the |
| 108 | hospital. |
| 109 | 3. Whether the proposal includes an enforceable commitment |
| 110 | that existing programs and services and quality health care will |
| 111 | continue to be provided to all residents of the affected |
| 112 | community, particularly to the indigent, the uninsured, and the |
| 113 | underinsured. |
| 114 | 4. Whether the proposal is otherwise in compliance with |
| 115 | subsections (6) and (7). |
| 116 | (b) The findings must be accompanied by all information |
| 117 | and documents relevant to the governing board's determination, |
| 118 | including, but not limited to: |
| 119 | 1. The names and addresses of all parties to the |
| 120 | transaction. |
| 121 | 2. The location of the hospital and all related |
| 122 | facilities. |
| 123 | 3. A description of the terms of all proposed agreements. |
| 124 | 4. A copy of the proposed sale or lease agreement and any |
| 125 | related agreements, including, but not limited to, leases, |
| 126 | management contracts, service contracts, and memoranda of |
| 127 | understanding. |
| 128 | 5. The estimated total value associated with the proposed |
| 129 | agreement and the proposed acquisition price and other |
| 130 | consideration. |
| 131 | 6. Any valuations of the hospital's assets prepared during |
| 132 | the 3 years immediately preceding the proposed transaction date. |
| 133 | 7. Any financial or economic analysis and report from any |
| 134 | expert or consultant retained by the governing board. |
| 135 | 8. A fairness evaluation by an independent expert in such |
| 136 | transactions. |
| 137 | 9. Copies of all other proposals and bids the governing |
| 138 | board may have received or considered in compliance with |
| 139 | subsection (4). |
| 140 | (6) Within 120 days before the anticipated closing date of |
| 141 | the proposed transaction, the governing board shall make |
| 142 | publicly available all findings and documents required under |
| 143 | subsection (5) and publish a notice of the proposed transaction |
| 144 | in one or more newspapers of general circulation in the county |
| 145 | in which the majority of the physical assets of the hospital are |
| 146 | located. The notice must include the names of the parties |
| 147 | involved and the means by which a person may submit written |
| 148 | comments about the proposed transaction to the governing board |
| 149 | and obtain copies of the findings and documents required under |
| 150 | subsection (5). |
| 151 | (7) Within 20 days after the date of publication of the |
| 152 | public notice, any interested person may submit to the governing |
| 153 | board a detailed written statement of opposition to the |
| 154 | transaction. If a written statement of opposition has been |
| 155 | submitted, the governing board or the proposed purchaser or |
| 156 | lessee may submit a written response to the interested party |
| 157 | within 10 days after the written statement of opposition due |
| 158 | date. |
| 159 | (8) A governing board of a county, district, or municipal |
| 160 | hospital may not enter into a sale or lease of a hospital |
| 161 | facility without first receiving approval by a majority vote of |
| 162 | the registered voters in the county, district, or municipality |
| 163 | or, in the alternative, approval from a circuit court. |
| 164 | (a) The governing board shall file a petition in a circuit |
| 165 | court seeking approval of the proposed transaction at least 30 |
| 166 | days after publication of the notice of the proposed |
| 167 | transaction. The petition must be filed in the circuit in which |
| 168 | the majority of the physical assets of the hospital are located. |
| 169 | (b) The petition for approval filed by the governing board |
| 170 | must include all findings and documents required under |
| 171 | subsection (5) and certification by the governing board of |
| 172 | compliance with all requirements of this section. |
| 173 | (c) A circuit court has jurisdiction to approve the sale |
| 174 | or lease of a county, district, or municipal hospital. |
| 175 | (9) Upon the filing of a petition for approval, the court |
| 176 | shall issue an order requiring all interested parties to appear |
| 177 | at a designated time and place within the circuit where the |
| 178 | petition is filed and show why the petition should not be |
| 179 | granted. For purposes of this subsection, the term "interested |
| 180 | parties" includes any party submitting a proposal for sale or |
| 181 | lease of the county, district, or municipal hospital, as well as |
| 182 | the governing board. |
| 183 | (a) Before the date set for the hearing, the clerk shall |
| 184 | publish a copy of the order in one or more newspapers of general |
| 185 | circulation in the county in which the majority of the physical |
| 186 | assets of the hospital are located at least once each week for 2 |
| 187 | consecutive weeks, commencing with the first publication, which |
| 188 | must be at least 20 days before the date set for the hearing. By |
| 189 | these publications, all interested parties are made parties |
| 190 | defendant to the action and the court has jurisdiction of them |
| 191 | to the same extent as if named as defendants in the petition and |
| 192 | personally served with process. |
| 193 | (b) Any interested person may become a party to the action |
| 194 | by moving against or pleading to the petition at or before the |
| 195 | time set for the hearing. At the hearing, the court shall |
| 196 | determine all questions of law and fact and make such orders as |
| 197 | will enable it to properly consider and determine the action and |
| 198 | render a final judgment with the least possible delay. |
| 199 | (10) Upon conclusion of all hearings and proceedings, and |
| 200 | upon consideration of all evidence presented, the court shall |
| 201 | render a final judgment approving or denying the proposed |
| 202 | transaction and shall order the governing board to accept or |
| 203 | reject the proposal for the sale or lease of the county, |
| 204 | district, or municipal hospital. In reaching its final judgment, |
| 205 | the court shall determine whether: |
| 206 | (a) The proposed transaction is permitted by law. |
| 207 | (b) The proposed transaction unreasonably excludes a |
| 208 | potential purchaser or lessee on the basis of being a for-profit |
| 209 | or a not-for-profit Florida corporation. |
| 210 | (c) The governing board of the hospital publicly |
| 211 | advertised the meeting at which the proposed transaction was |
| 212 | considered by the board in compliance with s. 286.0105. |
| 213 | (d) The governing board of the hospital publicly |
| 214 | advertised the offer to accept proposals in compliance with s. |
| 215 | 255.0525. |
| 216 | (e) The governing board of the hospital exercised due |
| 217 | diligence in deciding to dispose of hospital assets, selecting |
| 218 | the proposed purchaser or lessee, and negotiating the terms and |
| 219 | conditions of the disposition. |
| 220 | (f) Any conflict of interest was disclosed, including, but |
| 221 | not limited to, conflicts of interest relating to members of the |
| 222 | governing board and experts retained by the parties to the |
| 223 | transaction. |
| 224 | (g) The seller or lessor will receive fair market value |
| 225 | for the assets, or if the sale or lease represents less than |
| 226 | fair market value, why the public interest will be served by |
| 227 | accepting less than fair market value. |
| 228 | (h) The acquiring entity has made an enforceable |
| 229 | commitment that existing programs and services and quality |
| 230 | health care will continue to be provided to all residents of the |
| 231 | affected community, particularly to the indigent, the uninsured, |
| 232 | and the underinsured. |
| 233 | (i) The proposed transaction will result in a reduction or |
| 234 | elimination of ad valorem or other taxes used to support the |
| 235 | hospital. |
| 236 | (11) Any party to the action has the right to seek |
| 237 | judicial review in the appellate district where the petition for |
| 238 | approval was filed. |
| 239 | (a) All proceedings shall be instituted by filing a notice |
| 240 | of appeal or petition for review in accordance with the Florida |
| 241 | Rules of Appellate Procedure within 30 days after the date of |
| 242 | final judgment. |
| 243 | (b) In such judicial review, the reviewing court shall |
| 244 | affirm the judgment of the circuit court, unless the decision is |
| 245 | arbitrary, capricious, or not in compliance with this section. |
| 246 | (12) All costs shall be paid by the governing board, |
| 247 | unless an interested party contests the action, in which case |
| 248 | the court may assign costs to the parties. |
| 249 | (13) Any sale or lease completed before March 9, 2011, is |
| 250 | not subject to this section. Any lease that contained, on March |
| 251 | 9, 2011, an option to renew or extend that lease upon its |
| 252 | expiration is not subject to this section upon renewal or |
| 253 | extension on or after March 9, 2011. |
| 254 | Section 2. Section 395.3036, Florida Statutes, is amended |
| 255 | to read: |
| 256 | 395.3036 Confidentiality of records and meetings of |
| 257 | corporations that lease public hospitals or other public health |
| 258 | care facilities.-The records of a private corporation that |
| 259 | leases a public hospital or other public health care facility |
| 260 | are confidential and exempt from the provisions of s. 119.07(1) |
| 261 | and s. 24(a), Art. I of the State Constitution, and the meetings |
| 262 | of the governing board of a private corporation are exempt from |
| 263 | s. 286.011 and s. 24(b), Art. I of the State Constitution if |
| 264 | when the public lessor complies with the public finance |
| 265 | accountability provisions of s. 155.40(14) 155.40(5) with |
| 266 | respect to the transfer of any public funds to the private |
| 267 | lessee and if when the private lessee meets at least three of |
| 268 | the five following criteria: |
| 269 | (1) The public lessor that owns the public hospital or |
| 270 | other public health care facility was not the incorporator of |
| 271 | the private corporation that leases the public hospital or other |
| 272 | health care facility. |
| 273 | (2) The public lessor and the private lessee do not |
| 274 | commingle any of their funds in any account maintained by either |
| 275 | of them, other than the payment of the rent and administrative |
| 276 | fees or the transfer of funds pursuant to subsection (5)(2). |
| 277 | (3) Except as otherwise provided by law, the private |
| 278 | lessee is not allowed to participate, except as a member of the |
| 279 | public, in the decisionmaking process of the public lessor. |
| 280 | (4) The lease agreement does not expressly require the |
| 281 | lessee to comply with the requirements of ss. 119.07(1) and |
| 282 | 286.011. |
| 283 | (5) The public lessor is not entitled to receive any |
| 284 | revenues from the lessee, except for rental or administrative |
| 285 | fees due under the lease, and the lessor is not responsible for |
| 286 | the debts or other obligations of the lessee. |
| 287 | Section 3. This act shall take effect July 1, 2012. |