| 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.; requiring the hospital governing board to |
| 5 | evaluate the benefits to the affected community of the |
| 6 | sale or lease of certain hospital facilities; |
| 7 | requiring the board to conduct public hearings and |
| 8 | publish notice of the findings; directing the board to |
| 9 | determine by certain public advertisements whether |
| 10 | there are qualified purchasers or lessees before the |
| 11 | sale or lease of such hospital; providing definitions; |
| 12 | requiring the board to state in writing specified |
| 13 | criteria forming the basis of its acceptance of a |
| 14 | proposal for sale or lease of the hospital; providing |
| 15 | for publication of notice; providing a period |
| 16 | following such notice for submission of written |
| 17 | comments regarding the proposed transaction; providing |
| 18 | that the sale or lease of a county, district, or |
| 19 | municipal hospital is subject to approval by the Chief |
| 20 | Financial Officer or registered voters if required by |
| 21 | law; requiring the board to file a petition for |
| 22 | approval with the Chief Financial Officer; specifying |
| 23 | information to be included in such petition; providing |
| 24 | for the Chief Financial Officer to issue an order |
| 25 | requiring all interested parties to appear at a |
| 26 | hearing regarding such petition; requiring the Chief |
| 27 | Financial Officer or his or her designee to issue a |
| 28 | final order approving or denying the proposed |
| 29 | transaction; providing for a party to the action to |
| 30 | seek judicial review; requiring that the reviewing |
| 31 | court affirm the judgment of the Chief Financial |
| 32 | Officer unless the decision is arbitrary, capricious, |
| 33 | or not in compliance with the act; requiring the board |
| 34 | to pay costs associated with the petition for approval |
| 35 | unless a party contests the action; providing for |
| 36 | deposit of proceeds from the sale or lease of a |
| 37 | hospital partially in an economic development trust |
| 38 | fund of the county and partially for funding indigent |
| 39 | and uncompensated care; providing for deposit or use |
| 40 | of ad valorem tax revenue from the formerly tax-exempt |
| 41 | property if the sale or lease is to a for-profit |
| 42 | corporation or other business entity; authorizing the |
| 43 | county commission, in consultation with the Department |
| 44 | of Economic Opportunity, to oversee the use and |
| 45 | distribution of the funds in an economic development |
| 46 | trust fund of a county; providing an exemption for |
| 47 | certain sale or lease transactions completed before a |
| 48 | specified date; creating s. 155.401, F.S.; authorizing |
| 49 | a special taxing district to tax or appropriate funds |
| 50 | to an economic development trust fund in order to |
| 51 | promote and support economic growth in the district |
| 52 | and county; amending s. 395.3036, F.S.; conforming |
| 53 | cross-references; providing an effective date. |
| 54 |
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| 55 | Be It Enacted by the Legislature of the State of Florida: |
| 56 |
|
| 57 | Section 1. Subsection (1) of section 155.40, Florida |
| 58 | Statutes, is amended, present subsection (4) is renumbered as |
| 59 | subsection (5) and amended, present subsections (5) through (8) |
| 60 | are renumbered as subsections (17) through (20), respectively, |
| 61 | and new subsections (4) and (6) through (16) are added to that |
| 62 | section, to read: |
| 63 | 155.40 Sale or lease of county, district, or municipal |
| 64 | hospital; effect of sale.- |
| 65 | (1) In order for that citizens and residents of the state |
| 66 | to may receive quality health care, any county, district, or |
| 67 | municipal hospital organized and existing under the laws of this |
| 68 | state, acting by and through its governing board, may shall have |
| 69 | the authority to sell or lease such hospital to a for-profit or |
| 70 | not-for-profit Florida corporation, and enter into leases or |
| 71 | other contracts with a for-profit or not-for-profit Florida |
| 72 | corporation for the purpose of operating and managing such |
| 73 | hospital and any or all of its facilities of whatsoever kind and |
| 74 | nature. The term of any such lease, contract, or agreement and |
| 75 | the conditions, covenants, and agreements to be contained |
| 76 | therein shall be determined by the governing board of such |
| 77 | county, district, or municipal hospital. The governing board of |
| 78 | the hospital must find that the sale, lease, or contract is in |
| 79 | the best interests of the affected community public and must |
| 80 | state the basis of such finding. If the governing board of a |
| 81 | county, district, or municipal hospital decides to lease the |
| 82 | hospital, it must give notice in accordance with paragraph |
| 83 | (4)(a) or paragraph (4)(b). |
| 84 | (4)(a) By July 31, 2012, the governing board of a county, |
| 85 | district, or municipal hospital shall evaluate the possible |
| 86 | benefits to the affected community from the sale or lease of |
| 87 | hospital facilities owned by the board. In the course of such |
| 88 | evaluation, the board shall: |
| 89 | 1. Conduct public hearings to provide all interested |
| 90 | persons the opportunity to be heard on the matter. |
| 91 | 2. Publish a notice of all public hearings on the matter |
| 92 | in one or more newspapers of general circulation in the county |
| 93 | in which the majority of the physical assets of the hospital are |
| 94 | located and in the Florida Administrative Weekly at least 15 |
| 95 | days before any hearing is scheduled to take place. |
| 96 | 3. Make publicly available all documents considered by the |
| 97 | board in the course of such evaluation. |
| 98 | (b) By September 28, 2012, the board shall publish notice |
| 99 | of its findings in one or more newspapers of general circulation |
| 100 | in the county in which the majority of the physical assets of |
| 101 | the hospital are located and in the Florida Administrative |
| 102 | Weekly. |
| 103 | (5)(4) If In the event the governing board of a county, |
| 104 | district, or municipal hospital determines that it is no longer |
| 105 | in the public interest to own or operate such hospital and |
| 106 | elects to consider a sale or lease of the hospital to a third |
| 107 | party, the governing board must first determine whether there |
| 108 | are any qualified purchasers or lessees. In the process of |
| 109 | evaluating any potential purchasers or lessees elects to sell or |
| 110 | lease the hospital, the board shall: |
| 111 | (a) Negotiate the terms of the sale or lease with a for- |
| 112 | profit or not-for-profit Florida corporation and Publicly |
| 113 | advertise the meeting at which the proposed sale or lease will |
| 114 | be considered by the governing board of the hospital in |
| 115 | accordance with s. 286.0105; or |
| 116 | (b) Publicly advertise the offer to accept proposals in |
| 117 | accordance with s. 255.0525 and receive proposals from all |
| 118 | interested and qualified purchasers and lessees. |
| 119 |
|
| 120 | Any sale or lease must be for fair market value, or, if not for |
| 121 | fair market value, any sale or lease must be in the best |
| 122 | interest of the affected community. and Any sale or lease must |
| 123 | comply with all applicable state and federal antitrust laws. |
| 124 | (6) A determination by a governing board to accept a |
| 125 | proposal for sale or lease must state, in writing, the findings |
| 126 | and basis for accepting the proposal. |
| 127 | (a) The governing board's acceptance of a proposal for |
| 128 | sale or lease must, at a minimum, reflect a balanced |
| 129 | consideration of each of the following: |
| 130 | 1. Whether the sale or lease represents fair market value |
| 131 | or, if the lease does not represent fair market value, the |
| 132 | governing board shall provide a detailed explanation of how the |
| 133 | best interests of the affected community are served by the |
| 134 | acceptance of less than fair market value. For the purposes of |
| 135 | this section, the term "fair market value" means the price that |
| 136 | a seller is willing to accept and a buyer is willing to pay on |
| 137 | the open market and in an arm's length transaction, or what an |
| 138 | independent expert in hospital valuation determines the fair |
| 139 | market value to be. |
| 140 | 2. Whether acceptance of the proposal will result in a |
| 141 | reduction or elimination of ad valorem or other taxes for |
| 142 | taxpayers in the district. |
| 143 | 3. Whether the proposal includes an enforceable commitment |
| 144 | that existing programs and services and quality health care will |
| 145 | continue to be provided to all residents of the affected |
| 146 | community, particularly to the indigent, the uninsured, and the |
| 147 | underinsured. |
| 148 | (b) The findings must be accompanied by all information |
| 149 | and documents relevant to the governing board's determination, |
| 150 | including, but not limited to: |
| 151 | 1. The names and addresses of all parties to the |
| 152 | transaction. |
| 153 | 2. The location of the hospital and all related |
| 154 | facilities. |
| 155 | 3. A description of the terms of all proposed agreements. |
| 156 | 4. A copy of the proposed sale or lease agreement and any |
| 157 | related agreements, including, but not limited to, leases, |
| 158 | management contracts, service contracts, and memoranda of |
| 159 | understanding. |
| 160 | 5. The estimated total value associated with the proposed |
| 161 | agreement and the proposed acquisition price and other |
| 162 | consideration. |
| 163 | 6. A valuation of the hospital's assets, including any |
| 164 | valuations of the hospital's assets prepared during the 3 years |
| 165 | immediately preceding the proposed transaction date. |
| 166 | 7. Any financial or economic analysis and report from any |
| 167 | expert or consultant retained by the governing board. |
| 168 | 8. Copies of all other proposals and bids the governing |
| 169 | board may have received or considered in compliance with |
| 170 | subsection (5). |
| 171 | (7) Within 120 days before the anticipated closing date of |
| 172 | the proposed transaction, the governing board shall make |
| 173 | publicly available all findings and documents required under |
| 174 | subsection (6) and publish a notice of the proposed transaction |
| 175 | in one or more newspapers of general circulation in the county |
| 176 | in which the majority of the physical assets of the hospital are |
| 177 | located. The notice must include the names of the parties |
| 178 | involved and the means by which a person may submit written |
| 179 | comments about the proposed transaction to the governing board |
| 180 | and obtain copies of the findings and documents required under |
| 181 | subsection (6). |
| 182 | (8) Within 20 days after the date of publication of the |
| 183 | public notice, any interested person may submit to the governing |
| 184 | board written comments regarding the proposed transaction. |
| 185 | (9) The sale or lease of such hospital is subject to |
| 186 | approval by the Chief Financial Officer, or alternatively, if |
| 187 | otherwise required by law, by approval by majority vote of the |
| 188 | registered voters in the county, district, or municipality. |
| 189 | (a) The governing board shall file with the Chief |
| 190 | Financial Officer, at least 30 days after publication of the |
| 191 | notice of the proposed transaction, a petition seeking approval |
| 192 | of the proposed transaction. |
| 193 | (b) The petition for approval filed by the governing board |
| 194 | must include all findings and documents required under |
| 195 | subsection (6) and certification by the governing board of |
| 196 | compliance with all requirements of this section. |
| 197 | (10) Upon the filing of a petition for approval, the Chief |
| 198 | Financial Officer or his or her designee shall issue an order |
| 199 | requiring all interested parties to appear at a hearing |
| 200 | conducted within 30 days after the petition is filed, pursuant |
| 201 | to chapter 120, and show why the petition should not be granted. |
| 202 | For the purposes of this subsection, the term "interested |
| 203 | parties" includes any party submitting a proposal for sale or |
| 204 | lease of a county, district, or municipal hospital, as well as |
| 205 | the governing board. |
| 206 | (11) Upon conclusion of all proceedings, the Chief |
| 207 | Financial Officer or his or her designee shall issue a final |
| 208 | order approving or denying the proposed transaction based upon |
| 209 | consideration of whether the requirements of this section have |
| 210 | been met. The order shall require the governing board to either |
| 211 | accept or reject the proposal for the sale or lease of the |
| 212 | county, district, or municipal hospital based upon a |
| 213 | determination that: |
| 214 | (a) The proposed transaction is permitted by law. |
| 215 | (b) The proposed transaction does not unreasonably exclude |
| 216 | a potential purchaser or lessee on the basis of being a for- |
| 217 | profit or a not-for-profit Florida corporation, or other form of |
| 218 | business organization such as a partnership or limited liability |
| 219 | company. |
| 220 | (c) The governing board publicly advertised the meeting at |
| 221 | which the proposed transaction was considered by the board in |
| 222 | compliance with s. 286.0105. |
| 223 | (d) The governing board publicly advertised the offer to |
| 224 | accept proposals in compliance with s. 255.0525. |
| 225 | (e) The governing board acted reasonably and prudently in |
| 226 | deciding to dispose of hospital assets, selecting the proposed |
| 227 | purchaser or lessee, and negotiating the terms and conditions of |
| 228 | the disposition. |
| 229 | (f) Each conflict of interest was disclosed, including, |
| 230 | but not limited to, conflicts of interest relating to members of |
| 231 | the governing board and experts retained by the parties to the |
| 232 | transaction. |
| 233 | (g) The seller or lessor will receive fair market value |
| 234 | for the assets or, if the lease represents less than fair market |
| 235 | value, the public interest of the affected community will be |
| 236 | served by accepting less than fair market value. |
| 237 | (h) The acquiring entity has made an enforceable |
| 238 | commitment that existing programs and services and quality |
| 239 | health care will continue to be provided to all residents of the |
| 240 | affected community, particularly the indigent, the uninsured, |
| 241 | and the underinsured. |
| 242 | (i) The governing board has considered whether the sale or |
| 243 | lease will result in a reduction or elimination of ad valorem or |
| 244 | other taxes used to support the hospital. |
| 245 | (12) Any party to the action has the right to seek |
| 246 | judicial review of the decision in the appellate district where |
| 247 | the hospital is located or in the First District Court of |
| 248 | Appeal. |
| 249 | (a) All proceedings shall be instituted by filing a notice |
| 250 | of appeal in accordance with the Florida Rules of Appellate |
| 251 | Procedure within 30 days after the date of the final order. |
| 252 | (b) In such judicial review, the reviewing court shall |
| 253 | affirm the judgment of the Chief Financial Officer, unless the |
| 254 | decision is arbitrary, capricious, or not in compliance with |
| 255 | this section. |
| 256 | (13) All costs shall be paid by the governing board, |
| 257 | unless an interested party contests the action, in which case |
| 258 | the court may assign costs equitably to the parties. |
| 259 | (14) If a county, district, or municipal hospital is sold |
| 260 | or leased, the governing board shall: |
| 261 | (a) Deposit 50 percent of the net proceeds of the sale or |
| 262 | lease proceeds in an economic development trust fund established |
| 263 | by and under the control of the county commission of the county |
| 264 | in which the property is located. The use and distribution of |
| 265 | the funds shall be at the discretion of a majority of the county |
| 266 | commission, which shall serve as trustees of the trust fund. The |
| 267 | funds in the economic development trust fund shall be |
| 268 | distributed, in consultation with the Department of Economic |
| 269 | Opportunity, to promote new business development, research, |
| 270 | collaborative investment with the State University System, and |
| 271 | the expansion of business economic opportunities within the |
| 272 | affected community. |
| 273 | (b) Appropriate 50 percent of the net proceeds of the sale |
| 274 | for the funding of the provision of indigent and uncompensated |
| 275 | care on an equitable basis, based on the amount of indigent and |
| 276 | uncompensated care provided, to all hospitals within the |
| 277 | boundaries of the district. |
| 278 |
|
| 279 | For the purposes of this subsection, the term "net proceeds" |
| 280 | means the sale price after payment of all district debts and |
| 281 | obligations. |
| 282 | (15) If a county, district, or municipal hospital is sold |
| 283 | or leased to a for-profit corporation or other business entity |
| 284 | subject to local taxation, in addition to the distribution of |
| 285 | funds as directed in subsection (14): |
| 286 | (a) Fifty percent of the resulting county and municipal ad |
| 287 | valorem tax revenue from the formerly tax-exempt property shall |
| 288 | be deposited in an economic development trust fund established |
| 289 | by and under the control of the county commission of the county |
| 290 | in which the property is located. The use and distribution of |
| 291 | the funds shall be at discretion of a majority of the county |
| 292 | commission, which shall serve as trustees of the trust fund. The |
| 293 | funds in the economic development trust fund shall be |
| 294 | distributed, in consultation with the Department of Economic |
| 295 | Opportunity, to promote new or expanded health care business |
| 296 | development or research related to health care within the |
| 297 | affected community. Such funds may not be distributed to any |
| 298 | entity that is related to or in any way affiliated with the |
| 299 | entity selling, leasing, or acquiring the hospital which is the |
| 300 | subject of the transaction. |
| 301 | (b) Fifty percent of the resulting county and municipal ad |
| 302 | valorem tax revenue from the formerly tax-exempt property shall |
| 303 | be appropriated by the county commission for education and law |
| 304 | enforcement. |
| 305 | (16) Any sale or lease completed before January 1, 2012, |
| 306 | is not subject to this section. Any lease modifications, |
| 307 | renewals, or extensions relating to a hospital that was leased |
| 308 | before January 1, 2012, are not subject to this section. |
| 309 | Section 2. Section 155.401, Florida Statutes, is created |
| 310 | to read: |
| 311 | 155.401 Power of special hospital or other health care |
| 312 | taxing district to tax or appropriate funds to county economic |
| 313 | development trust fund.-Notwithstanding any other provision of |
| 314 | general or special law, the purposes for which a special taxing |
| 315 | district for hospital or other health care purposes may levy |
| 316 | taxes or appropriate funds to an economic development trust fund |
| 317 | of a county established pursuant to s. 155.40 include the |
| 318 | promotion and support of economic growth in the district and in |
| 319 | the county in which the district is located and the furthering |
| 320 | of the purposes of the district as provided by law. |
| 321 | Section 3. Section 395.3036, Florida Statutes, is amended |
| 322 | to read: |
| 323 | 395.3036 Confidentiality of records and meetings of |
| 324 | corporations that lease public hospitals or other public health |
| 325 | care facilities.-The records of a private corporation that |
| 326 | leases a public hospital or other public health care facility |
| 327 | are confidential and exempt from the provisions of s. 119.07(1) |
| 328 | and s. 24(a), Art. I of the State Constitution, and the meetings |
| 329 | of the governing board of a private corporation are exempt from |
| 330 | s. 286.011 and s. 24(b), Art. I of the State Constitution if |
| 331 | when the public lessor complies with the public finance |
| 332 | accountability provisions of s. 155.40(17) 155.40(5) with |
| 333 | respect to the transfer of any public funds to the private |
| 334 | lessee and if when the private lessee meets at least three of |
| 335 | the five following criteria: |
| 336 | (1) The public lessor that owns the public hospital or |
| 337 | other public health care facility was not the incorporator of |
| 338 | the private corporation that leases the public hospital or other |
| 339 | health care facility. |
| 340 | (2) The public lessor and the private lessee do not |
| 341 | commingle any of their funds in any account maintained by either |
| 342 | of them, other than the payment of the rent and administrative |
| 343 | fees or the transfer of funds pursuant to subsection (5)(2). |
| 344 | (3) Except as otherwise provided by law, the private |
| 345 | lessee is not allowed to participate, except as a member of the |
| 346 | public, in the decisionmaking process of the public lessor. |
| 347 | (4) The lease agreement does not expressly require the |
| 348 | lessee to comply with the requirements of ss. 119.07(1) and |
| 349 | 286.011. |
| 350 | (5) The public lessor is not entitled to receive any |
| 351 | revenues from the lessee, except for rental or administrative |
| 352 | fees due under the lease, and the lessor is not responsible for |
| 353 | the debts or other obligations of the lessee. |
| 354 | Section 4. This act shall take effect July 1, 2012. |