HB 675

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	providing conditions under which the sale of a public
5	hospital by a public agency to a private corporation or
6	other private entity is considered a complete sale of the
7	public agency's interest in the hospital; providing
8	construction; providing legislative findings; providing
9	applicability; providing an effective date.
10
11	Be It Enacted by the Legislature of the State of Florida:
12
13	Section 1.  Subsection (8) is added to section 155.40,
14	Florida Statutes, to read:
15	155.40  Sale or lease of county, district, or municipal
16	hospital.--
17	(8)(a)  If a public hospital is sold by a public agency to
18	a private corporation or other private entity pursuant to this
19	section or pursuant to a special act of the Legislature and the
20	purchase agreement provides that:
21	1.  The private corporation or other private entity
22	purchaser acquires 100 percent ownership in the hospital
23	enterprise;
24	2.  The private corporation or other private entity
25	purchases the physical plant of the hospital facility and has
26	complete responsibility for the operation and maintenance of the
27	facility, regardless of ownership of the underlying real
28	property;
29	3.  The public agency seller retains no control over
30	decisionmaking or policymaking for the hospital;
31	4.  The private corporation or other private entity
32	purchaser receives no funding from the public agency seller
33	other than by contract for services rendered to patients for
34	whom the public agency seller has the responsibility to pay for
35	hospital or medical care;
36	5.  The public agency seller makes no substantial
37	investment in or loans to the private entity;
38	6.  The private corporation or other private entity
39	purchaser was not created by the public entity seller; and
40	7.  The private corporation or other private entity
41	purchaser operates primarily for its own financial interests and
42	not primarily for the interests of the public agency,
43
44	then such a sale shall be considered a complete sale of the
45	public agency's interest in the hospital.
46	(b)  A complete sale of a hospital as described in this
47	subsection shall not be construed as:
48	1.  A transfer of a governmental function from the county,
49	district, or municipality to the private corporation or other
50	private entity purchaser;
51	2.  Constituting a financial interest of the public agency
52	in the private corporation or other private entity purchaser;
53	3.  Making the private corporation or other private entity
54	purchaser an "agency" as that term is used in statutes;
55	4.  Making the private corporation or other private entity
56	purchaser an integral part of the public agency's decisionmaking
57	process; or
58	5.  Indicating that the private corporation or other
59	private entity purchaser is "acting on behalf of a public
60	agency" as that term is used in statute.
61	Section 2.  The Legislature finds that it is necessary to
62	clarify that a public agency may sell its interest in a public
63	hospital to a private corporation or other private entity and to
64	establish that such a sale results in the privatization of the
65	hospital enterprise. The Legislature finds that the sale of a
66	hospital by a public agency to a private corporation or other
67	private entity purchaser under this section is a complete sale
68	where: the public agency retains no ownership interest in the
69	hospital enterprise or the hospital facility, regardless of who
70	owns the underlying property; the private corporation or other
71	private entity has the complete responsibility for operation and
72	maintenance of the hospital facility; the private corporation or
73	other private entity receives no funds from the public agency
74	seller other than by contract for services provided to patients
75	for whom the public agency has responsibility to pay for medical
76	or hospital services; the public agency makes no substantial
77	investment or loan to the private corporation or other private
78	entity; the private corporation or other private entity is not
79	created by the public agency; and the private corporation or
80	other private entity operates primarily for its own financial
81	interests as opposed to those of the public agency. The
82	Legislature further finds that a complete sale of the hospital
83	under such circumstances eliminates any argument that the
84	private corporation or other private entity continues to perform
85	any governmental or public function, that the public agency
86	retains any financial interest in the private purchaser or the
87	hospital, that the private purchaser is an integral part in the
88	public agency's decisionmaking process, or that the private
89	entity is an "agency" or is "acting on behalf of a public
90	agency" as those terms are used in statute. The Legislature
91	further finds that the recognition of such sales as being
92	complete sales of the formerly public hospital to a private
93	corporation or other private entity is a public necessity so
94	that private entities that purchase public hospitals are allowed
95	to operate without unnecessary public interference. Some recent
96	court decisions, however, have found that a private corporation
97	or other private entity that purchases a public hospital is
98	still a public agency for some purposes and have failed to
99	recognize that the public agency does not retain any control
100	over the private entity or the formerly public hospital
101	following the complete sale of a public hospital to a private
102	corporation or other private entity. Therefore, the Legislature
103	finds that it is a necessity to confirm its intent that a
104	private corporation or other private entity that purchases a
105	formerly public hospital through a complete sale is not a public
106	agency for any purpose. To find otherwise would place such a
107	private corporation or other private entity that purchases a
108	public hospital at a competitive disadvantage compared to other
109	private entities that own private hospitals that were not
110	formerly public hospitals and would serve as a disincentive for
111	the purchase of a public hospital. Public agencies choose to
112	sell their public hospitals to private corporations or other
113	private entities when the public entity is no longer able to
114	operate the hospital in a fiscally responsible manner and where
115	taxpayers would otherwise be required to finance the operations
116	of the hospital beyond indigent care. If a private corporation
117	or other private entity that purchases a public hospital is
118	treated as a public agency, then public agencies may find it
119	difficult, if not impossible, to find a private corporation or
120	other private entity that is willing to purchase a public
121	hospital. This could force the public agency to close the
122	hospital, which would result in a reduction in health care
123	services to the public, or continue operating the hospital using
124	public tax dollars to subsidize recurring losses. Neither of
125	these options is in the best interest of the public. Thus, the
126	Legislature finds that if a private corporation or other private
127	entity purchases a public hospital and the purchase agreement
128	for that hospital meets the requirements established under this
129	act, regardless of whether the corporation had previously leased
130	that public hospital, that private corporation or other private
131	entity is not a public agency for any purpose and does not act
132	on behalf of the public agency.
133	Section 3.  This act shall take effect upon becoming a law
134	and shall apply to each private corporation or other private
135	entity that has purchased a public hospital, regardless of
136	whether such purchase occurred prior to the effective date of
137	this act.

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