Senate Bill 1044c2
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Florida Senate - 1998 CS for CS for SB 1044
By the Committees on Governmental Reform and Oversight, Health
Care and Senator Williams
302-2132-98
1 A bill to be entitled
2 An act relating to public records and meetings;
3 creating s. 395.3036, F.S.; providing that when
4 a public lessor complies with the public
5 finance accountability provisions of s.
6 155.40(5), F.S., with respect to the transfer
7 of any public funds to a private lessee, the
8 records of a private corporation that leases a
9 public hospital or other public health care
10 facility are confidential and exempt from
11 public records requirements, and the meetings
12 of the governing board of such corporation are
13 exempt from public meeting requirements if the
14 corporation meets specified criteria; providing
15 for future review and repeal; providing a
16 finding of public necessity; providing an
17 effective date.
18
19 Be It Enacted by the Legislature of the State of Florida:
20
21 Section 1. Section 395.3036, Florida Statutes, is
22 created to read:
23 395.3036 Confidentiality of records and meetings of
24 corporations that lease public hospitals or other public
25 health care facilities.--The records of a private corporation
26 that leases a public hospital or other public health care
27 facility are confidential and exempt from the provisions of s.
28 119.07(1) and s. 24(a), Art. I of the State Constitution, and
29 the meetings of the governing board of a private corporation
30 are exempt from s. 286.011 and s. 24(b), Art. I of the State
31 Constitution when the public lessor complies with the public
1
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1 finance accountability provisions of s. 155.40(5) with respect
2 to the transfer of any public funds to the private lessee and
3 when the private lessee meets at least three of the five
4 following criteria:
5 (1) The public lessor that owns the public hospital or
6 other public health care facility was not the incorporator of
7 the private corporation that leases the public hospital or
8 other health care facility.
9 (2) The public lessor and the private lessee do not
10 commingle any of their funds in any account maintained by
11 either of them, other than the payment of the rent and
12 administrative fees or the transfer of funds pursuant to
13 subsection (2).
14 (3) Except as otherwise provided by law, the private
15 lessee is not allowed to participate, except as a member of
16 the public, in the decisionmaking process of the public
17 lessor.
18 (4) The lease agreement does not expressly require the
19 lessee to comply with the requirements of s. 119.07(1) and s.
20 286.011.
21 (5) The public lessor is not entitled to receive any
22 revenues from the lessee, except for rental or administrative
23 fees due under the lease, and the lessor is not responsible
24 for the debts or other obligations of the lessee.
25 Section 2. (1) The Legislature finds that it is a
26 public necessity that all records of a private corporation and
27 all meetings of the governing board of the private corporation
28 be confidential and exempt from the public records and public
29 meeting laws of this state when the private corporation leases
30 a public hospital or other public health care facility from a
31 public entity in accordance with the terms of this act. The
2
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1 Legislature further finds that private corporations have
2 entered into such leases in reliance on the legal standard
3 governing the application of the public records and open
4 meeting laws to such lease agreements which was set forth in
5 case law existing at the time of the transaction. That
6 standard provided that such private lessees were not "acting
7 on behalf of" the public entity and, therefore, not subject to
8 the state's public records laws so long as the public entity
9 did not retain control over the private lessee. No one factor
10 was used to determine whether the public entity exerted
11 control; instead a "totality of factors" was analyzed and the
12 decision made on the balance of those factors. In a recent
13 decision, however, the Fifth District Court of Appeal has now
14 applied the standard in a manner that may cause more lessees
15 to be subject to public records and meetings requirements. The
16 Legislature finds that the effect of the decision has been:
17 (a) To create uncertainty with respect to the status
18 of records and meetings under existing lease arrangements; and
19 (b) To create a disincentive for private corporations
20 to enter into such lease agreements in the future.
21 (2) Public entities have chosen to privatize the
22 operations of their public hospitals and public health care
23 facilities in order to alleviate three problems that pose a
24 significant threat to the continued viability of Florida's
25 public hospitals:
26 (a) A financial drain on the facilities from their
27 forced participation in the Florida Retirement System;
28 (b) The competitive disadvantage placed on these
29 facilities vis a vis their private competitors resulting from
30 their required compliance with the state's public records and
31 public meeting laws; and
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1 (c) State constitutional restrictions on public
2 facility participation in partnerships with private
3 corporations as a result of the limitations contained in the
4 State Constitution. For years, the Legislature has approved
5 and encouraged these leases, first through special acts that
6 it has adopted authorizing the lease agreements and, more
7 recently, through the adoption of section 155.40, Florida
8 Statutes, which provides for the conversion of public hospital
9 facilities to private operation by lease, as a means to
10 provide public entities with the necessary flexibility to use
11 these public assets in a manner that best serves the interests
12 of the public. Through such lease arrangement, public entities
13 have been able to obtain substantial and oftentimes
14 desperately needed private capital investment into these
15 facilities and to relieve the oftentimes burdensome drain on
16 public tax revenues which resulted from public operation.
17 (3) In the absence of a defined and, therefore,
18 predictable statewide standard for determining when the public
19 records and public meetings laws apply to future lease
20 agreements, public entities may find it difficult, if not
21 impossible, to find a private corporation that is willing to
22 enter into a lease to operate the public hospital or other
23 public health care facility. This, in turn, could force the
24 public entity:
25 (a) To close the hospital or other health care
26 facility, which would result in a reduction in health care
27 services to the public;
28 (b) To sell the hospital or other health care
29 facility, which sale, if the facility has deteriorated because
30 of inadequate capital investments over time, will likely be at
31 a loss; or
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1 (c) To continue operating the hospital or other health
2 care facility using public tax dollars to subsidize recurring
3 losses. None of these options is in the best interest of the
4 public.
5 (3) The Legislature, therefore, finds that it is a
6 public necessity for it, through this act, to clarify when the
7 public records and public meeting laws apply to private
8 lessees of public hospital or other public health care
9 facilities. The Legislature further finds that it is a public
10 necessity for these private lessees to be exempt from the
11 public records and public meetings laws of the state so long
12 as, applying the standard codified by this act, the public
13 entity does not retain control over the private entity.
14 Section 3. This act shall take effect upon becoming
15 law and shall apply to existing leases and future leases of
16 public hospitals and other health care facilities.
17
18 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
19 CS/SB 1044
20
21 Exempts private corporation that leases public hospital or
other public health care facility from public records and
22 meetings requirement if public lessor complies with public
finance accountability provisions of s. 155.40(5), F.S., and
23 if private lessee meets at least three of five criteria: (1)
the public lessor that owns public hospital or other health
24 care facility was not the incorporator of the private
corporation that leases the public hospital or other health
25 care facility; (2) the public lessor and private lessee do not
commingle any of their funds in any account maintained by
26 either of them, other than the payment of the rent and
administrative fees or the transfer of funds; (3) except as
27 otherwise provided by law, the private lessee is not allowed
to participate, except as a member of the public, in the
28 decision-making process of the public lessor; (4) the lease
agreement does not expressly require the lessee to comply with
29 the requirements of s. 119.07(1) and s. 286.011, F.S.; and (5)
the public lessor is not entitled to receive any revenues from
30 the lessee, except for rental or administrative fees due under
the lease, and the lessor is not responsible for the debts or
31 other obligations of the lessee.
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