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Status: (Engrossed - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [H0619 Detail]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/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 accept or reject the proposal for sale or
30	lease; requiring the board to pay costs associated with
31	the petition for approval unless a party contests the
32	action; providing an exemption for certain sale or lease
33	transactions completed before a specified date; providing
34	an exemption for county, district, or municipal hospitals
35	that receive no tax support; defining the term "tax
36	support"; amending s. 395.3036, F.S.; conforming cross-
37	references; providing an effective date.
38
39	Be It Enacted by the Legislature of the State of Florida:
40
41	Section 1.  Subsections (1) and (4) of section 155.40,
42	Florida Statutes, are amended, subsections (5) through (8) are
43	renumbered as subsections (15) through (18), respectively, and
44	new subsections (5) through (14) are added to that section, to
45	read:
46	155.40  Sale or lease of county, district, or municipal
47	hospital; effect of sale.-
48	(1)  In order that citizens and residents of the state may
49	receive quality health care, any county, district, or municipal
50	hospital organized and existing under the laws of this state,
51	acting by and through its governing board, shall have the
52	authority to sell or lease such hospital to a for-profit or not-
53	for-profit Florida corporation, and enter into leases or other
54	contracts with a for-profit or not-for-profit Florida
55	corporation for the purpose of operating and managing such
56	hospital and any or all of its facilities of whatsoever kind and
57	nature. The term of any such lease, contract, or agreement and
58	the conditions, covenants, and agreements to be contained
59	therein shall be determined by the governing board of such
60	county, district, or municipal hospital. The governing board of
61	the hospital must find that the sale, lease, or contract is in
62	the best interests of the public and must state the basis of
63	such finding. The sale or lease of such hospital is subject to
64	approval by a circuit court unless otherwise exempt under
65	subsection (14) or, for those hospitals that are required by
66	their statutory charter to seek approval by referendum for any
67	action which would result in the termination of the direct
68	control of such hospital by its governing board, approval by
69	such referendum. If the governing board of a county, district,
70	or municipal hospital decides to lease the hospital, it must
71	give notice in accordance with paragraph (4)(a) or paragraph
72	(4)(b).
73	(4)  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 to a third party, the
77	governing board shall first determine whether there are any
78	qualified purchasers or lessees. In the process of evaluating
79	any potential purchasers or lessees elects to sell or lease the
80	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
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
95	arm's-length transaction.
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, and
103	if the 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 shall be accompanied by all information
117	and documents relevant to the governing board's determination,
118	including, but not limited to:
119	1.  The name and address of all parties to the transaction.
120	2.  The location of the hospital and all related
121	facilities.
122	3.  A description of the terms of all proposed agreements.
123	4.  A copy of the proposed sale or lease agreement and any
124	related agreements, including, but not limited to, leases,
125	management contracts, service contracts, and memoranda of
126	understanding.
127	5.  The estimated total value associated with the proposed
128	agreement and the proposed acquisition price and other
129	consideration.
130	6.  Any valuations of the hospital's assets prepared in the
131	3 years immediately preceding the proposed transaction date.
132	7.  Any financial or economic analysis and report from any
133	expert or consultant retained by the governing board.
134	8.  A fairness evaluation by an independent expert in such
135	transactions.
136	9.  Copies of all other proposals and bids the governing
137	board may have received or considered in compliance with the
138	procedures required under subsection (4).
139	(6)  Not later than 120 days before the anticipated closing
140	date of the proposed transaction, the governing board shall
141	publish a notice of the proposed transaction in one or more
142	newspapers of general circulation in the county in which the
143	majority of the physical assets of the hospital are located. The
144	notice shall include the names of the parties involved, the
145	means by which persons may submit written comments about the
146	proposed transaction to the governing board, and the means by
147	which persons may obtain copies of the findings and documents
148	required under subsection (5).
149	(7)  Within 20 days after the date of publication of public
150	notice, any interested person may submit to the governing board
151	a detailed written statement of opposition to the transaction.
152	When a written statement of opposition has been submitted, the
153	governing board or the proposed purchaser or lessee may submit a
154	written response to the interested party within 10 days after
155	the written statement of opposition due date.
156	(8)  A governing board of a county, district, or municipal
157	hospital may not enter into a sale or lease of a hospital
158	facility without first receiving approval from a circuit court
159	or, for those hospitals which are required by their statutory
160	charter to seek approval by referendum for any action which
161	would result in the termination of the direct control of such
162	hospital by its governing board, approval by such referendum.
163	(a)  The governing board shall file a petition for approval
164	in a circuit court seeking approval of the proposed transaction
165	not sooner than 30 days after publication of notice of the
166	proposed transaction.
167	(b)  Any such petition for approval filed by the governing
168	board shall include all findings and documents required under
169	subsection (5) and certification by the governing board of
170	compliance with all requirements of this section.
171	(c)  Circuit courts shall have jurisdiction to approve the
172	sale or lease of a county, district, or municipal hospital. A
173	petition for approval shall be filed in the circuit in which the
174	majority of the physical assets of the hospital are located.
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 or should not
179	be granted. For purposes of this section, the term "interested
180	party" means any party submitting a proposal for sale or lease
181	of the county, district, or municipal hospital; any taxpayer
182	from the county, district, or municipality in which the majority
183	of the physical assets of the hospital are located; and the
184	governing board.
185	(a)  Before the date set for the hearing, the clerk shall
186	publish a copy of the order in one or more newspapers of general
187	circulation in the county in which the majority of the physical
188	assets of the hospital are located at least once each week for 2
189	consecutive weeks, commencing with the first publication, which
190	shall not be less than 20 days before the date set for the
191	hearing. By this publication, all interested parties are made
192	parties defendant to the action and the court has jurisdiction
193	of them to the same extent as if named as defendants in the
194	petition and personally served with process.
195	(b)  Any interested party may become a party to the action
196	by moving against or pleading to the petition at or before the
197	time set for the hearing. At the hearing, the court shall
198	determine all questions of law and fact and make such orders as
199	will enable it to properly consider and determine the action and
200	render a final judgment with the least possible delay.
201	(10)  Upon conclusion of all hearings and proceedings, and
202	upon consideration of all evidence presented, the court shall
203	render a final judgment approving or denying the proposed
204	transaction and shall order the governing board to either accept
205	or reject the proposal for sale or lease of the county,
206	district, or municipal hospital. In reaching its final judgment,
207	the court shall determine whether:
208	(a)  The proposed transaction is permitted by law.
209	(b)  The proposed transaction unreasonably excludes a
210	potential purchaser or lessee on the basis of being a for-profit
211	or a not-for-profit Florida corporation.
212	(c)  The governing board of the hospital publicly
213	advertised the meeting at which the proposed transaction was
214	considered by the board in compliance with ss. 286.0105 and
215	286.011.
216	(d)  The governing board of the hospital publicly
217	advertised the offer to accept proposals in compliance with s.
218	255.0525.
219	(e)  The governing board of the hospital exercised due
220	diligence in deciding to dispose of hospital assets, selecting
221	the proposed purchaser or lessee, and negotiating the terms and
222	conditions of the disposition.
223	(f)  Any conflict of interest was disclosed, including, but
224	not limited to, conflicts of interest relating to members of the
225	governing board and experts retained by the parties to the
226	transaction.
227	(g)  The seller or lessor will receive fair market value
228	for the assets, or if the sale or lease represents less than
229	fair market value, why the public interest will be served by
230	acceptance of less than fair market value.
231	(h)  The acquiring entity has made an enforceable
232	commitment that existing programs and services, and quality
233	health care, will continue to be provided to all residents of
234	the affected community, particularly to the indigent, the
235	uninsured, and the underinsured.
236	(i)  Whether the proposed transaction will result in a
237	reduction or elimination of ad valorem or other taxes used to
238	support the hospital.
239	(11)  Any party to the action has the right to seek
240	judicial review in the appellate district where the petition was
241	filed.
242	(a)  All proceedings shall be instituted by filing a notice
243	of appeal or petition for review in accordance with the Florida
244	Rules of Appellate Procedure within 30 days after the date of
245	the final judgment.
246	(b)  In such judicial review, the reviewing court shall
247	affirm the judgment of the circuit court, unless the decision is
248	arbitrary, capricious, or not in compliance with this section.
249	(12)  All costs shall be paid by the governing board,
250	except when an interested party contests the action, in which
251	case the court may assign costs to the parties at its
252	discretion.
253	(13)  Any sale or lease completed before March 9, 2011, is
254	not subject to the requirements of this section. Any lease that
255	contained, on March 9, 2011, an option to renew or extend that
256	lease upon its expiration shall not be subject to this section
257	upon any renewal or extension on or after March 9, 2011.
258	(14)  A county, district, or municipal hospital that has
259	not received any tax support is exempt from the requirements of
260	subsections (8)-(12). For the purposes of this section, the term
261	"tax support" means ad valorem or other tax revenues paid
262	directly from a county, district, or municipal taxing authority
263	to a hospital without a corresponding exchange of goods or
264	services within the 5 years before the effective date of a
265	proposed lease or sale.
266	Section 2.  Section 395.3036, Florida Statutes, is amended
267	to read:
268	395.3036  Confidentiality of records and meetings of
269	corporations that lease public hospitals or other public health
270	care facilities.-The records of a private corporation that
271	leases a public hospital or other public health care facility
272	are confidential and exempt from the provisions of s. 119.07(1)
273	and s. 24(a), Art. I of the State Constitution, and the meetings
274	of the governing board of a private corporation are exempt from
275	s. 286.011 and s. 24(b), Art. I of the State Constitution when
276	the public lessor complies with the public finance
277	accountability provisions of s. 155.40(15)(5) with respect to
278	the transfer of any public funds to the private lessee and when
279	the private lessee meets at least three of the five following
280	criteria:
281	(1)  The public lessor that owns the public hospital or
282	other public health care facility was not the incorporator of
283	the private corporation that leases the public hospital or other
284	health care facility.
285	(2)  The public lessor and the private lessee do not
286	commingle any of their funds in any account maintained by either
287	of them, other than the payment of the rent and administrative
288	fees or the transfer of funds pursuant to subsection (5)(2).
289	(3)  Except as otherwise provided by law, the private
290	lessee is not allowed to participate, except as a member of the
291	public, in the decisionmaking process of the public lessor.
292	(4)  The lease agreement does not expressly require the
293	lessee to comply with the requirements of ss. 119.07(1) and
294	286.011.
295	(5)  The public lessor is not entitled to receive any
296	revenues from the lessee, except for rental or administrative
297	fees due under the lease, and the lessor is not responsible for
298	the debts or other obligations of the lessee.
299	Section 3.  This act shall take effect January 1, 2012.

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