Bill Text: FL H0619 | 2011 | Regular Session | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

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Status: (Engrossed - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [H0619 Detail]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

---

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

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