Bill Text: FL S1448 | 2011 | Regular Session | Introduced

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: Slight Partisan Bill (Republican 4-2)

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [S1448 Detail]

Download: Florida-2011-S1448-Introduced.html

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       Florida Senate - 2011                                    SB 1448
       
       
       
       By Senator Garcia
       
       
       
       
       40-01022-11                                           20111448__
    1                        A bill to be entitled                      
    2         An act relating to the sale or lease of a public
    3         hospital; amending s. 155.40, F.S.; requiring that the
    4         sale or lease of a county, district, or municipal
    5         hospital to a for-profit or not-for-profit Florida
    6         corporation receive prior approval by the Attorney
    7         General; requiring the governing board to first
    8         determine whether there are any qualified purchasers
    9         or lessees of the hospital before considering whether
   10         to sell or lease the hospital; defining the term “fair
   11         market value″; requiring the governing board to put in
   12         writing the facts and findings to justify the
   13         governing board’s decision to sell or lease the public
   14         hospital to a third party; detailing the issues that
   15         the governing board must address in order to sell or
   16         lease the hospital; setting forth the procedures that
   17         must be followed by the governing board to gain the
   18         approval of the Attorney General to sell or lease the
   19         hospital; authorizing the Attorney General to employ
   20         independent consultants to determine the fair market
   21         value of the proposed sale or lease; authorizing
   22         interested persons to file a statement in opposition
   23         to the sale or lease of the hospital; specifying the
   24         criteria the Attorney General must consider when
   25         deciding whether to approve or deny the proposed sale
   26         or lease of the hospital; requiring the Attorney
   27         General to publish his or her final decision in the
   28         Florida Administrative Weekly; amending s. 395.3036,
   29         F.S.; conforming a cross-reference; providing an
   30         effective date.
   31  
   32  Be It Enacted by the Legislature of the State of Florida:
   33  
   34         Section 1. Section 155.40, Florida Statutes, is amended to
   35  read:
   36         155.40 Sale or lease of county, district, or municipal
   37  hospital; effect of sale.—
   38         (1) In order that citizens and residents of the state may
   39  receive quality health care, any county, district, or municipal
   40  hospital organized and existing under the laws of this state,
   41  acting by and through its governing board, shall have the
   42  authority to sell or lease the such hospital to a for-profit or
   43  not-for-profit Florida corporation, and enter into leases or
   44  other contracts with a for-profit or not-for-profit Florida
   45  corporation for the purpose of operating and managing the such
   46  hospital and any or all of its facilities of whatsoever kind and
   47  nature. The term of any such lease, contract, or agreement and
   48  the conditions, covenants, and agreements to be contained
   49  therein shall be determined by the governing board of the such
   50  county, district, or municipal hospital. The governing board of
   51  the hospital must find that the sale, lease, or contract is in
   52  the best interests of the public and shall must state the basis
   53  of such finding. If the governing board of a county, district,
   54  or municipal hospital decides to lease the hospital, it must
   55  give notice in accordance with paragraph (4)(a) or paragraph
   56  (4)(b). Any sale or lease of the hospital is subject to approval
   57  by the Attorney General.
   58         (2) Any such lease, contract, or agreement made pursuant
   59  hereto shall:
   60         (a) Provide that the articles of incorporation of the such
   61  for-profit or not-for-profit corporation be subject to the
   62  approval of the board of directors or board of trustees of the
   63  such hospital;
   64         (b) Require that any not-for-profit corporation become
   65  qualified under s. 501(c)(3) of the United States Internal
   66  Revenue Code;
   67         (c) Provide for the orderly transition of the operation and
   68  management of the such facilities;
   69         (d) Provide for the return of the such facility to the
   70  county, municipality, or district upon the termination of the
   71  such lease, contract, or agreement; and
   72         (e) Provide for the continued treatment of indigent
   73  patients pursuant to the Florida Health Care Responsibility Act
   74  and pursuant to chapter 87-92, Laws of Florida.
   75         (3) Any sale, lease, or contract entered into pursuant to
   76  this section prior to the effective date of this act must have
   77  complied with the requirements of subsection (2) in effect at
   78  the time of the sale, lease, or contract. It is the intent of
   79  the Legislature that this section does not impose any further
   80  requirements with respect to the formation of any for-profit or
   81  not-for-profit Florida corporation, the composition of the board
   82  of directors of any Florida corporation, or the manner in which
   83  control of the hospital is transferred to the Florida
   84  corporation.
   85         (4) If In the event the governing board of a county,
   86  district, or municipal hospital determines it is no longer in
   87  the public interest to own or operate the hospital and elects to
   88  consider a sale or lease of the hospital, the board shall first
   89  determine whether there are any qualified purchasers or lessees
   90  of the hospital. In the process of evaluating any potential
   91  purchasers or lessees elects to sell or lease the hospital, the
   92  board shall:
   93         (a) Negotiate the terms of the sale or lease with a for
   94  profit or not-for-profit Florida corporation and Publicly
   95  advertise the meeting at which the proposed sale or lease will
   96  be considered by the governing board of the hospital in
   97  accordance with s. 286.0105; or
   98         (b) Publicly advertise the offer to accept proposals in
   99  accordance with s. 255.0525 and receive proposals from all
  100  interested and qualified purchasers.
  101  
  102  Any sale or lease must be for fair market value, and any sale or
  103  lease must comply with all applicable state and federal
  104  antitrust laws. As used in this section, the term “fair market
  105  value” means the most likely price that the assets would bring
  106  in a sale or lease in a competitive and open market under all
  107  conditions requisite to a fair sale or lease, with the buyer or
  108  lessee, and seller or lessor, each acting prudently,
  109  knowledgeably, and in their own best interest, and with a
  110  reasonable time being allowed for exposure in the open market.
  111         (5) If the governing board decides to accept a proposal to
  112  purchase or lease the hospital, the board’s decision must be in
  113  writing and clearly state the facts and findings that support
  114  its decision to sell or lease the hospital. The facts and
  115  findings must include, but are not limited to, whether the
  116  proposal:
  117         (a) Represents the fair market value of the hospital;
  118         (b) Constitutes the best use of the hospital and its
  119  attendant facilities;
  120         (c) Will have a positive effect on the reduction or
  121  elimination of ad valorem or other tax revenues to support the
  122  hospital; and
  123         (d) Ensures that quality health care will continue to be
  124  provided to all residents of the affected community, and in
  125  particular the indigent, the uninsured, and the underinsured.
  126         (6) A governing board of a county, district, or municipal
  127  hospital may not enter into any sale or lease of a hospital and
  128  its attendant facilities without first having received approval
  129  of the sale or lease from the Attorney General pursuant to this
  130  section.
  131         (a) In order to receive such approval, the governing board
  132  must file with the Attorney General a request for approval not
  133  less than 120 days before the anticipated closing date of the
  134  proposed sale or lease.
  135         (b) The request to the Attorney General must include:
  136         1. The name and address of all parties to the transaction;
  137         2. The location of the hospital and all related hospital
  138  facilities;
  139         3. A description of the terms of all proposed agreements;
  140         4. A copy of the proposed sale or lease agreement and any
  141  related agreements, including, but not limited to, leases,
  142  management contracts, service contracts, and memoranda of
  143  understanding;
  144         5. The estimated total value associated with the proposed
  145  agreement, and the proposed acquisition price and other
  146  consideration;
  147         6. Any valuations of the hospital’s assets prepared in the
  148  3 years immediately preceding the proposed transaction date;
  149         7. An analysis of the financial or economic status of the
  150  hospital and a report from any financial expert or consultant
  151  retained by the governing board;
  152         8. A fairness evaluation by an independent expert in such
  153  transactions;
  154         9. Copies of all other proposals and bids the governing
  155  board received or considered in compliance with the procedures
  156  required in subsection (4); and
  157         10. Any other information requested by the Attorney
  158  General.
  159         (c) Within 30 days after the Attorney General receives the
  160  request to approve the sale or lease of the hospital and all
  161  required information, the Attorney General shall publish a
  162  notice of the proposed sale or lease in one or more newspapers
  163  of general circulation in the county where the main campus of
  164  the hospital is located and in the Florida Administrative
  165  Weekly. The notice must state that the Attorney General has
  166  received notice of the proposed transaction, the names of the
  167  parties involved, and the means by which persons may submit
  168  written comments about the proposed transaction to the Attorney
  169  General.
  170         (d) The Attorney General may, during the course of any
  171  proceeding required by this section, issue in writing and cause
  172  to be served upon any person, a demand that the person appear
  173  before the Attorney General and give testimony or produce
  174  documents as to any matters relevant to the scope of the review,
  175  or issue written interrogatories, to be answered under oath, as
  176  to any matters relevant to the scope of the review. The notice
  177  must prescribe a return date that would allow a reasonable time
  178  for the person to respond. If any person summoned to appear
  179  fails to comply with the notice, the Attorney General may apply
  180  to the appropriate court to seek enforcement of the subpoena.
  181         (e) The Attorney General may contract with experts or
  182  consultants to assist in reviewing the proposed agreement,
  183  including, but not limited to, assistance in independently
  184  determining the fair market value of the proposed transaction.
  185  The Attorney General shall submit any bills for such contracts
  186  to the acquiring entity. The acquiring entity shall pay such
  187  bills within 30 days after receiving the bills.
  188         (f)1. Within 20 days after the public notice is published
  189  in the Florida Administrative Weekly, any interested person may
  190  submit to the Attorney General a detailed written statement in
  191  support of or in opposition to the sale or lease of the
  192  hospital.
  193         2. If any written statement of opposition has been
  194  submitted, the governing board, the proposed purchaser, the
  195  proposed lessee, or any interested person may submit a written
  196  response to the Attorney General. Such statements must be
  197  received by the Attorney General no later than 10 days after the
  198  general comment period to the public notice ends.
  199         3. When considering any opposition statement or response,
  200  the Attorney General may request additional clarifying
  201  information from the governing board or any other person.
  202         (g) Sixty days after the date the public notice is
  203  published, the Attorney General shall issue a report of his or
  204  her findings and the decision to approve, with or without
  205  modification, or deny the sale or lease of the hospital. In
  206  making his or her decision, the Attorney General shall determine
  207  whether:
  208         1. The proposed sale or lease is permitted by law;
  209         2. The proposed sale or lease would result in the best use
  210  of the hospital facilities and assets;
  211         3. The proposed sale or lease discriminates among potential
  212  purchasers or lessees by virtue of whether the proposed
  213  purchaser or lessee is a for-profit or not-for-profit Florida
  214  corporation;
  215         4. The governing board of the hospital publicly advertised
  216  the meeting at which the proposed transaction was considered by
  217  the board in compliance with s. 286.0105;
  218         5. Whether the governing board of the hospital publicly
  219  advertised the offer to accept proposals in compliance with s.
  220  255.0525;
  221         6. The governing board of the hospital exercised due
  222  diligence in deciding to dispose of hospital assets, selecting
  223  the transacting entity, and negotiating the terms and conditions
  224  of the disposition;
  225         7. The procedures used by the governing board of the
  226  hospital in making its decision to dispose of its assets were
  227  fair and reasonable;
  228         8. Any conflict of interest was disclosed, including, but
  229  not limited to, conflicts of interest related to members of the
  230  governing board and experts retained by the parties to the
  231  transaction;
  232         9. The seller or lessor will receive fair market value for
  233  the assets;
  234         10. Charitable assets are placed at unreasonable risk if
  235  the transaction is financed in part by the seller or lessor;
  236         11. The terms of any management or services contract
  237  negotiated in conjunction with the transaction are fair and
  238  reasonable;
  239         12. The acquiring entity made an enforceable commitment to
  240  provide health care to the indigent, the uninsured, and the
  241  underinsured and to provide benefits to the affected community
  242  to promote improved health care; and
  243         13. The proposed transaction will result in a reduction or
  244  elimination of ad valorem or other taxes used to support the
  245  hospital.
  246         (h) The Attorney General shall publish notice of his or her
  247  decision with respect to the request for transaction approval in
  248  the Florida Administrative Weekly.
  249         (7)(5) If In the event a hospital operated by a for-profit
  250  or not-for-profit Florida corporation receives annually more
  251  than $100,000 in revenues from the county, district, or
  252  municipality that owns the hospital, the Florida corporation
  253  must be accountable to the county, district, or municipality
  254  with respect to the manner in which the funds are expended by
  255  either:
  256         (a) Having the revenues subject to annual appropriations by
  257  the county, district, or municipality; or
  258         (b) Where there is a contract to provide revenues to the
  259  hospital, the term of which is longer than 12 months, the
  260  governing board of the county, district, or municipality must be
  261  able to modify the contract upon 12 months notice to the
  262  hospital.
  263  
  264  A not-for-profit corporation that is subject to this subsection
  265  and that does not currently comply with the accountability
  266  requirements in this subsection shall have 12 months after the
  267  effective date of this act to modify any contracts with the
  268  county, district, or municipality in a manner that is consistent
  269  with this subsection.
  270         (8)(6) Unless otherwise expressly stated in the lease
  271  documents, the transaction involving the sale or lease of a
  272  hospital shall not be construed as:
  273         (a) A transfer of a governmental function from the county,
  274  district, or municipality to the private purchaser or lessee;
  275         (b) Constituting a financial interest of the public lessor
  276  in the private lessee; or
  277         (c) Making a private lessee an integral part of the public
  278  lessor’s decisionmaking process.
  279         (9)(7) The lessee of a hospital, under this section or any
  280  special act of the Legislature, operating under a lease shall
  281  not be construed to be “acting on behalf of” the lessor as that
  282  term is used in statute, unless the lease document expressly
  283  provides to the contrary.
  284         (10)(8)(a) If, whenever the sale of a public hospital by a
  285  public agency to a private corporation or other private entity
  286  pursuant to this section or pursuant to a special act of the
  287  Legislature reflects that:
  288         1. The private corporation or other private entity
  289  purchaser acquires 100 percent ownership in the hospital
  290  enterprise;
  291         2. The private corporation or other private entity
  292  purchases the physical plant of the hospital facility and has
  293  complete responsibility for the operation and maintenance of the
  294  facility, regardless of ownership of the underlying real
  295  property;
  296         3. The public agency seller retains no control over
  297  decisionmaking or policymaking for the hospital;
  298         4. The private corporation or other private entity
  299  purchaser receives no funding from the public agency seller
  300  other than by contract for services rendered to patients for
  301  whom the public agency seller has the responsibility to pay for
  302  hospital or medical care;
  303         5. The public agency seller makes no substantial investment
  304  in or loans to the private entity;
  305         6. The private corporation or other private entity
  306  purchaser was not created by the public entity seller; and
  307         7. The private corporation or other private entity
  308  purchaser operates primarily for its own financial interests and
  309  not primarily for the interests of the public agency,
  310  
  311  such a sale shall be considered a complete sale of the public
  312  agency’s interest in the hospital.
  313         (b) A complete sale of a hospital as described in this
  314  subsection shall not be construed as:
  315         1. A transfer of a governmental function from the county,
  316  district, or municipality to the private corporation or other
  317  private entity purchaser;
  318         2. Constituting a financial interest of the public agency
  319  in the private corporation or other private entity purchaser;
  320         3. Making the private corporation or other private entity
  321  purchaser an “agency” as that term is used in statutes;
  322         4. Making the private corporation or other private entity
  323  purchaser an integral part of the public agency’s decisionmaking
  324  process; or
  325         5. Indicating that the private corporation or other private
  326  entity purchaser is “acting on behalf of a public agency” as
  327  that term is used in statute.
  328         Section 2. Section 395.3036, Florida Statutes, is amended
  329  to read:
  330         395.3036 Confidentiality of records and meetings of
  331  corporations that lease public hospitals or other public health
  332  care facilities.—The records of a private corporation that
  333  leases a public hospital or other public health care facility
  334  are confidential and exempt from the provisions of s. 119.07(1)
  335  and s. 24(a), Art. I of the State Constitution, and the meetings
  336  of the governing board of a private corporation are exempt from
  337  s. 286.011 and s. 24(b), Art. I of the State Constitution when
  338  the public lessor complies with the public finance
  339  accountability provisions of s. 155.40(7) s. 155.40(5) with
  340  respect to the transfer of any public funds to the private
  341  lessee and when the private lessee meets at least three of the
  342  five following criteria:
  343         (1) The public lessor that owns the public hospital or
  344  other public health care facility was not the incorporator of
  345  the private corporation that leases the public hospital or other
  346  health care facility.
  347         (2) The public lessor and the private lessee do not
  348  commingle any of their funds in any account maintained by either
  349  of them, other than the payment of the rent and administrative
  350  fees or the transfer of funds pursuant to subsection (2).
  351         (3) Except as otherwise provided by law, the private lessee
  352  is not allowed to participate, except as a member of the public,
  353  in the decisionmaking process of the public lessor.
  354         (4) The lease agreement does not expressly require the
  355  lessee to comply with the requirements of ss. 119.07(1) and
  356  286.011.
  357         (5) The public lessor is not entitled to receive any
  358  revenues from the lessee, except for rental or administrative
  359  fees due under the lease, and the lessor is not responsible for
  360  the debts or other obligations of the lessee.
  361         Section 3. This act shall take effect July 1, 2011.