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

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

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Status: (Engrossed - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [H0619 Detail]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

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

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