HB 895

1
A bill to be entitled
2An act relating to the sale or lease of a county,
3district, or municipal hospital; amending s. 155.40,
4F.S.; requiring the hospital governing board to
5evaluate the benefits to the affected community of the
6sale or lease of certain hospital facilities;
7requiring the board to conduct public hearings and
8publish notice of the findings; directing the board to
9determine by certain public advertisements whether
10there are qualified purchasers or lessees before the
11sale or lease of such hospital; providing definitions;
12requiring the board to state in writing specified
13criteria forming the basis of its acceptance of a
14proposal for sale or lease of the hospital; providing
15for publication of notice; providing a period
16following such notice for submission of written
17comments regarding the proposed transaction; providing
18that the sale or lease of a county, district, or
19municipal hospital is subject to approval by the Chief
20Financial Officer or registered voters if required by
21law; requiring the board to file a petition for
22approval with the Chief Financial Officer; specifying
23information to be included in such petition; providing
24for the Chief Financial Officer to issue an order
25requiring all interested parties to appear at a
26hearing regarding such petition; requiring the Chief
27Financial Officer or his or her designee to issue a
28final order approving or denying the proposed
29transaction; providing for a party to the action to
30seek judicial review; requiring that the reviewing
31court affirm the judgment of the Chief Financial
32Officer unless the decision is arbitrary, capricious,
33or not in compliance with the act; requiring the board
34to pay costs associated with the petition for approval
35unless a party contests the action; providing for
36deposit of proceeds from the sale or lease of a
37hospital partially in an economic development trust
38fund of the county and partially for funding indigent
39and uncompensated care; providing for deposit or use
40of ad valorem tax revenue from the formerly tax-exempt
41property if the sale or lease is to a for-profit
42corporation or other business entity; authorizing the
43county commission, in consultation with the Department
44of Economic Opportunity, to oversee the use and
45distribution of the funds in an economic development
46trust fund of a county; providing an exemption for
47certain sale or lease transactions completed before a
48specified date; creating s. 155.401, F.S.; authorizing
49a special taxing district to tax or appropriate funds
50to an economic development trust fund in order to
51promote and support economic growth in the district
52and county; amending s. 395.3036, F.S.; conforming
53cross-references; providing an effective date.
54
55Be It Enacted by the Legislature of the State of Florida:
56
57     Section 1.  Subsection (1) of section 155.40, Florida
58Statutes, is amended, present subsection (4) is renumbered as
59subsection (5) and amended, present subsections (5) through (8)
60are renumbered as subsections (17) through (20), respectively,
61and new subsections (4) and (6) through (16) are added to that
62section, to read:
63     155.40  Sale or lease of county, district, or municipal
64hospital; effect of sale.-
65     (1)  In order for that citizens and residents of the state
66to may receive quality health care, any county, district, or
67municipal hospital organized and existing under the laws of this
68state, acting by and through its governing board, may shall have
69the authority to sell or lease such hospital to a for-profit or
70not-for-profit Florida corporation, and enter into leases or
71other contracts with a for-profit or not-for-profit Florida
72corporation for the purpose of operating and managing such
73hospital and any or all of its facilities of whatsoever kind and
74nature. The term of any such lease, contract, or agreement and
75the conditions, covenants, and agreements to be contained
76therein shall be determined by the governing board of such
77county, district, or municipal hospital. The governing board of
78the hospital must find that the sale, lease, or contract is in
79the best interests of the affected community public and must
80state the basis of such finding. If the governing board of a
81county, district, or municipal hospital decides to lease the
82hospital, it must give notice in accordance with paragraph
83(4)(a) or paragraph (4)(b).
84     (4)(a)  By July 31, 2012, the governing board of a county,
85district, or municipal hospital shall evaluate the possible
86benefits to the affected community from the sale or lease of
87hospital facilities owned by the board. In the course of such
88evaluation, the board shall:
89     1.  Conduct public hearings to provide all interested
90persons the opportunity to be heard on the matter.
91     2.  Publish a notice of all public hearings on the matter
92in one or more newspapers of general circulation in the county
93in which the majority of the physical assets of the hospital are
94located and in the Florida Administrative Weekly at least 15
95days before any hearing is scheduled to take place.
96     3.  Make publicly available all documents considered by the
97board in the course of such evaluation.
98     (b)  By September 28, 2012, the board shall publish notice
99of its findings in one or more newspapers of general circulation
100in the county in which the majority of the physical assets of
101the hospital are located and in the Florida Administrative
102Weekly.
103     (5)(4)  If In the event the governing board of a county,
104district, or municipal hospital determines that it is no longer
105in the public interest to own or operate such hospital and
106elects to consider a sale or lease of the hospital to a third
107party, the governing board must first determine whether there
108are any qualified purchasers or lessees. In the process of
109evaluating any potential purchasers or lessees elects to sell or
110lease the hospital, the board shall:
111     (a)  Negotiate the terms of the sale or lease with a for-
112profit or not-for-profit Florida corporation and Publicly
113advertise the meeting at which the proposed sale or lease will
114be considered by the governing board of the hospital in
115accordance with s. 286.0105; or
116     (b)  Publicly advertise the offer to accept proposals in
117accordance with s. 255.0525 and receive proposals from all
118interested and qualified purchasers and lessees.
119
120Any sale or lease must be for fair market value, or, if not for
121fair market value, any sale or lease must be in the best
122interest of the affected community. and Any sale or lease must
123comply with all applicable state and federal antitrust laws.
124     (6)  A determination by a governing board to accept a
125proposal for sale or lease must state, in writing, the findings
126and basis for accepting the proposal.
127     (a)  The governing board's acceptance of a proposal for
128sale or lease must, at a minimum, reflect a balanced
129consideration of each of the following:
130     1.  Whether the sale or lease represents fair market value
131or, if the lease does not represent fair market value, the
132governing board shall provide a detailed explanation of how the
133best interests of the affected community are served by the
134acceptance of less than fair market value. For the purposes of
135this section, the term "fair market value" means the price that
136a seller is willing to accept and a buyer is willing to pay on
137the open market and in an arm's length transaction, or what an
138independent expert in hospital valuation determines the fair
139market value to be.
140     2.  Whether acceptance of the proposal will result in a
141reduction or elimination of ad valorem or other taxes for
142taxpayers in the district.
143     3.  Whether the proposal includes an enforceable commitment
144that existing programs and services and quality health care will
145continue to be provided to all residents of the affected
146community, particularly to the indigent, the uninsured, and the
147underinsured.
148     (b)  The findings must be accompanied by all information
149and documents relevant to the governing board's determination,
150including, but not limited to:
151     1.  The names and addresses of all parties to the
152transaction.
153     2.  The location of the hospital and all related
154facilities.
155     3.  A description of the terms of all proposed agreements.
156     4.  A copy of the proposed sale or lease agreement and any
157related agreements, including, but not limited to, leases,
158management contracts, service contracts, and memoranda of
159understanding.
160     5.  The estimated total value associated with the proposed
161agreement and the proposed acquisition price and other
162consideration.
163     6.  A valuation of the hospital's assets, including any
164valuations of the hospital's assets prepared during the 3 years
165immediately preceding the proposed transaction date.
166     7.  Any financial or economic analysis and report from any
167expert or consultant retained by the governing board.
168     8.  Copies of all other proposals and bids the governing
169board may have received or considered in compliance with
170subsection (5).
171     (7)  Within 120 days before the anticipated closing date of
172the proposed transaction, the governing board shall make
173publicly available all findings and documents required under
174subsection (6) and publish a notice of the proposed transaction
175in one or more newspapers of general circulation in the county
176in which the majority of the physical assets of the hospital are
177located. The notice must include the names of the parties
178involved and the means by which a person may submit written
179comments about the proposed transaction to the governing board
180and obtain copies of the findings and documents required under
181subsection (6).
182     (8)  Within 20 days after the date of publication of the
183public notice, any interested person may submit to the governing
184board written comments regarding the proposed transaction.
185     (9)  The sale or lease of such hospital is subject to
186approval by the Chief Financial Officer, or alternatively, if
187otherwise required by law, by approval by majority vote of the
188registered voters in the county, district, or municipality.
189     (a)  The governing board shall file with the Chief
190Financial Officer, at least 30 days after publication of the
191notice of the proposed transaction, a petition seeking approval
192of the proposed transaction.
193     (b)  The petition for approval filed by the governing board
194must include all findings and documents required under
195subsection (6) and certification by the governing board of
196compliance with all requirements of this section.
197     (10)  Upon the filing of a petition for approval, the Chief
198Financial Officer or his or her designee shall issue an order
199requiring all interested parties to appear at a hearing
200conducted within 30 days after the petition is filed, pursuant
201to chapter 120, and show why the petition should not be granted.
202For the purposes of this subsection, the term "interested
203parties" includes any party submitting a proposal for sale or
204lease of a county, district, or municipal hospital, as well as
205the governing board.
206     (11)  Upon conclusion of all proceedings, the Chief
207Financial Officer or his or her designee shall issue a final
208order approving or denying the proposed transaction based upon
209consideration of whether the requirements of this section have
210been met. The order shall require the governing board to either
211accept or reject the proposal for the sale or lease of the
212county, district, or municipal hospital based upon a
213determination that:
214     (a)  The proposed transaction is permitted by law.
215     (b)  The proposed transaction does not unreasonably exclude
216a potential purchaser or lessee on the basis of being a for-
217profit or a not-for-profit Florida corporation, or other form of
218business organization such as a partnership or limited liability
219company.
220     (c)  The governing board publicly advertised the meeting at
221which the proposed transaction was considered by the board in
222compliance with s. 286.0105.
223     (d)  The governing board publicly advertised the offer to
224accept proposals in compliance with s. 255.0525.
225     (e)  The governing board acted reasonably and prudently in
226deciding to dispose of hospital assets, selecting the proposed
227purchaser or lessee, and negotiating the terms and conditions of
228the disposition.
229     (f)  Each conflict of interest was disclosed, including,
230but not limited to, conflicts of interest relating to members of
231the governing board and experts retained by the parties to the
232transaction.
233     (g)  The seller or lessor will receive fair market value
234for the assets or, if the lease represents less than fair market
235value, the public interest of the affected community will be
236served by accepting less than fair market value.
237     (h)  The acquiring entity has made an enforceable
238commitment that existing programs and services and quality
239health care will continue to be provided to all residents of the
240affected community, particularly the indigent, the uninsured,
241and the underinsured.
242     (i)  The governing board has considered whether the sale or
243lease will result in a reduction or elimination of ad valorem or
244other taxes used to support the hospital.
245     (12)  Any party to the action has the right to seek
246judicial review of the decision in the appellate district where
247the hospital is located or in the First District Court of
248Appeal.
249     (a)  All proceedings shall be instituted by filing a notice
250of appeal in accordance with the Florida Rules of Appellate
251Procedure within 30 days after the date of the final order.
252     (b)  In such judicial review, the reviewing court shall
253affirm the judgment of the Chief Financial Officer, unless the
254decision is arbitrary, capricious, or not in compliance with
255this section.
256     (13)  All costs shall be paid by the governing board,
257unless an interested party contests the action, in which case
258the court may assign costs equitably to the parties.
259     (14)  If a county, district, or municipal hospital is sold
260or leased, the governing board shall:
261     (a)  Deposit 50 percent of the net proceeds of the sale or
262lease proceeds in an economic development trust fund established
263by and under the control of the county commission of the county
264in which the property is located. The use and distribution of
265the funds shall be at the discretion of a majority of the county
266commission, which shall serve as trustees of the trust fund. The
267funds in the economic development trust fund shall be
268distributed, in consultation with the Department of Economic
269Opportunity, to promote new business development, research,
270collaborative investment with the State University System, and
271the expansion of business economic opportunities within the
272affected community.
273     (b)  Appropriate 50 percent of the net proceeds of the sale
274for the funding of the provision of indigent and uncompensated
275care on an equitable basis, based on the amount of indigent and
276uncompensated care provided, to all hospitals within the
277boundaries of the district.
278
279For the purposes of this subsection, the term "net proceeds"
280means the sale price after payment of all district debts and
281obligations.
282     (15)  If a county, district, or municipal hospital is sold
283or leased to a for-profit corporation or other business entity
284subject to local taxation, in addition to the distribution of
285funds as directed in subsection (14):
286     (a)  Fifty percent of the resulting county and municipal ad
287valorem tax revenue from the formerly tax-exempt property shall
288be deposited in an economic development trust fund established
289by and under the control of the county commission of the county
290in which the property is located. The use and distribution of
291the funds shall be at discretion of a majority of the county
292commission, which shall serve as trustees of the trust fund. The
293funds in the economic development trust fund shall be
294distributed, in consultation with the Department of Economic
295Opportunity, to promote new or expanded health care business
296development or research related to health care within the
297affected community. Such funds may not be distributed to any
298entity that is related to or in any way affiliated with the
299entity selling, leasing, or acquiring the hospital which is the
300subject of the transaction.
301     (b)  Fifty percent of the resulting county and municipal ad
302valorem tax revenue from the formerly tax-exempt property shall
303be appropriated by the county commission for education and law
304enforcement.
305     (16)  Any sale or lease completed before January 1, 2012,
306is not subject to this section. Any lease modifications,
307renewals, or extensions relating to a hospital that was leased
308before January 1, 2012, are not subject to this section.
309     Section 2.  Section 155.401, Florida Statutes, is created
310to read:
311     155.401  Power of special hospital or other health care
312taxing district to tax or appropriate funds to county economic
313development trust fund.-Notwithstanding any other provision of
314general or special law, the purposes for which a special taxing
315district for hospital or other health care purposes may levy
316taxes or appropriate funds to an economic development trust fund
317of a county established pursuant to s. 155.40 include the
318promotion and support of economic growth in the district and in
319the county in which the district is located and the furthering
320of the purposes of the district as provided by law.
321     Section 3.  Section 395.3036, Florida Statutes, is amended
322to read:
323     395.3036  Confidentiality of records and meetings of
324corporations that lease public hospitals or other public health
325care facilities.-The records of a private corporation that
326leases a public hospital or other public health care facility
327are confidential and exempt from the provisions of s. 119.07(1)
328and s. 24(a), Art. I of the State Constitution, and the meetings
329of the governing board of a private corporation are exempt from
330s. 286.011 and s. 24(b), Art. I of the State Constitution if
331when the public lessor complies with the public finance
332accountability provisions of s. 155.40(17) 155.40(5) with
333respect to the transfer of any public funds to the private
334lessee and if when the private lessee meets at least three of
335the five following criteria:
336     (1)  The public lessor that owns the public hospital or
337other public health care facility was not the incorporator of
338the private corporation that leases the public hospital or other
339health care facility.
340     (2)  The public lessor and the private lessee do not
341commingle any of their funds in any account maintained by either
342of them, other than the payment of the rent and administrative
343fees or the transfer of funds pursuant to subsection (5)(2).
344     (3)  Except as otherwise provided by law, the private
345lessee is not allowed to participate, except as a member of the
346public, in the decisionmaking process of the public lessor.
347     (4)  The lease agreement does not expressly require the
348lessee to comply with the requirements of ss. 119.07(1) and
349286.011.
350     (5)  The public lessor is not entitled to receive any
351revenues from the lessee, except for rental or administrative
352fees due under the lease, and the lessor is not responsible for
353the debts or other obligations of the lessee.
354     Section 4.  This act shall take effect July 1, 2012.


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