Bill Text: FL H0619 | 2011 | Regular Session | Engrossed

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Bill Title: Sale/Lease/County, District, or Municipal Hospital

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [H0619 Detail]

Download: Florida-2011-H0619-Engrossed.html

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