Florida Senate - 2011 CS for SB 1448
By the Committee on Community Affairs; and Senators Garcia and
Lynn
578-03770-11 20111448c1
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,
4 F.S.; providing that the sale or lease of a county,
5 district, or municipal hospital is subject to approval
6 by the registered voters or by the circuit court;
7 requiring the hospital governing board to determine by
8 certain public advertisements whether there are
9 qualified purchasers or lessees before the sale or
10 lease of such hospital; defining the term “fair market
11 value”; requiring the board to state in writing
12 specified criteria forming the basis of its acceptance
13 of a proposal for sale or lease of the hospital;
14 providing for publication of notice; authorizing
15 submission of written statements of opposition to a
16 proposed transaction, and written responses thereto,
17 within a certain timeframe; requiring the board to
18 file a petition for approval with the circuit court
19 and receive approval before any transaction is
20 finalized; specifying information to be included in
21 such petition; providing for the circuit court to
22 issue an order requiring all interested parties to
23 appear before the court under certain circumstances;
24 requiring the clerk of the court to publish the copy
25 of the order in certain newspapers at specified times;
26 providing that certain parties are made parties
27 defendant to the action by the publication of the
28 order; granting the circuit court jurisdiction to
29 approve sales or leases of county, district, or
30 municipal hospitals based on specified criteria;
31 providing for a party to seek judicial review;
32 requiring that in judicial review the reviewing court
33 affirm the judgment of the circuit court unless the
34 decision is arbitrary, capricious, or not in
35 compliance with the act; requiring the board to pay
36 costs associated with the petition for approval unless
37 a party contests the action; providing an exemption
38 for certain sale or lease transactions completed
39 before a specified date; amending s. 395.3036, F.S.;
40 conforming cross-references; providing an effective
41 date.
42
43 Be It Enacted by the Legislature of the State of Florida:
44
45 Section 1. Subsections (1) and (4) of section 155.40,
46 Florida Statutes, are amended, subsections (5) through (8) are
47 renumbered as subsections (14) through (17), respectively, and
48 new subsections (5) through (13) are added to that section, to
49 read:
50 155.40 Sale or lease of county, district, or municipal
51 hospital; effect of sale.—
52 (1) In order for that citizens and residents of the state
53 to may receive quality health care, any county, district, or
54 municipal hospital organized and existing under the laws of this
55 state, acting by and through its governing board, may shall have
56 the authority to sell or lease such hospital to a for-profit or
57 not-for-profit Florida corporation, and enter into leases or
58 other contracts with a for-profit or not-for-profit Florida
59 corporation for the purpose of operating and managing such
60 hospital and any or all of its facilities of whatsoever kind and
61 nature. The term of any such lease, contract, or agreement and
62 the conditions, covenants, and agreements to be contained
63 therein shall be determined by the governing board of such
64 county, district, or municipal hospital. The governing board of
65 the hospital must find that the sale, lease, or contract is in
66 the best interests of the public and must state the basis of
67 such finding. The sale or lease of such hospital is subject to
68 approval by majority vote of the registered voters in the
69 county, district, or municipality or, in the alternative,
70 approval by a circuit court. If the governing board of a county,
71 district, or municipal hospital decides to lease the hospital,
72 it must give notice in accordance with paragraph (4)(a) or
73 paragraph (4)(b).
74 (4) If In the event the governing board of a county,
75 district, or municipal hospital determines that it is no longer
76 in the public interest to own or operate such hospital and
77 elects to consider a sale or lease of the hospital to a third
78 party, the governing board must first determine whether there
79 are any qualified purchasers or lessees. In the process of
80 evaluating any potential purchasers or lessees elects to sell or
81 lease the hospital, the board shall:
82 (a) Negotiate the terms of the sale or lease with a for
83 profit or not-for-profit Florida corporation and Publicly
84 advertise the meeting at which the proposed sale or lease will
85 be considered by the governing board of the hospital in
86 accordance with s. 286.0105; or
87 (b) Publicly advertise the offer to accept proposals in
88 accordance with s. 255.0525 and receive proposals from all
89 interested and qualified purchasers and lessees.
90
91 Any sale or lease must be for fair market value, and any sale or
92 lease must comply with all applicable state and federal
93 antitrust laws. For the purposes of this section, the term “fair
94 market value” means the price that a seller is willing to accept
95 and a buyer is willing to pay on the open market and in an arm’s
96 length transaction.
97 (5) A determination by a governing board to accept a
98 proposal for sale or lease must state, in writing, the findings
99 and basis for supporting the determination.
100 (a) The findings must include, but need not be limited to,
101 the governing board’s determination that the proposal:
102 1. Represents fair market value.
103 2. Affects whether there will be a reduction or elimination
104 of ad valorem or other tax revenues to support the hospital.
105 3. Ensures that quality health care will continue to be
106 provided to all residents of the affected community,
107 particularly to the indigent, the uninsured, and the
108 underinsured.
109 4. Is otherwise in compliance with paragraph (9)(a).
110 (b) The findings must be accompanied by all information and
111 documents relevant to the governing board’s determination,
112 including, but not limited to:
113 1. The names and addresses of all parties to the
114 transaction.
115 2. The location of the hospital and all related facilities.
116 3. A description of the terms of all proposed agreements.
117 4. A copy of the proposed sale or lease agreement and any
118 related agreements, including, but not limited to, leases,
119 management contracts, service contracts, and memoranda of
120 understanding.
121 5. The estimated total value associated with the proposed
122 agreement and the proposed acquisition price and other
123 consideration.
124 6. Any valuations of the hospital’s assets prepared during
125 the 3 years immediately preceding the proposed transaction date.
126 7. Any financial or economic analysis and report from any
127 expert or consultant retained by the governing board.
128 8. A fairness evaluation by an independent expert in such
129 transactions.
130 9. Copies of all other proposals and bids the governing
131 board may have received or considered in compliance with
132 subsection (4).
133 (6) Within 120 days before the anticipated closing date of
134 the proposed transaction, the governing board shall make
135 publicly available all findings and documents required under
136 subsection (5) and publish a notice of the proposed transaction
137 in one or more newspapers of general circulation in the county
138 in which the majority of the physical assets of the hospital are
139 located. The notice must include the names of the parties
140 involved and the means by which a person may submit written
141 comments about the proposed transaction to the governing board
142 and may obtain copies of the findings and documents required
143 under subsection (5).
144 (7) Within 20 days after the date of publication of the
145 public notice, any interested person may submit to the governing
146 board a detailed written statement of opposition to the
147 transaction. If a written statement of opposition has been
148 submitted, the governing board or the proposed purchaser or
149 lessee may submit a written response to the interested party
150 within 10 days after the written statement of opposition due
151 date.
152 (8) A governing board of a county, district, or municipal
153 hospital may not enter into a sale or lease of a hospital
154 facility without first receiving approval by majority vote of
155 the registered voters in the county, district, or municipality
156 or, in the alternative, approval from a circuit court.
157 (a) The governing board shall file a petition in a circuit
158 court seeking approval of the proposed transaction at least 30
159 days after publication of the notice of the proposed
160 transaction. The petition must be filed in the circuit in which
161 the majority of the physical assets of the hospital are located.
162 (b) The petition for approval filed by the governing board
163 must include all findings and documents required under
164 subsection (5) and certification by the governing board of
165 compliance with all requirements of this section.
166 (c) Circuit courts have jurisdiction to approve the sale or
167 lease of a county, district, or municipal hospital.
168 (9) Upon the filing of a petition for approval, the court
169 shall issue an order requiring all interested parties to appear
170 at a designated time and place within the circuit where the
171 petition is filed and show why the petition should not be
172 granted.
173 (a) Before the date set for the hearing, the clerk shall
174 publish a copy of the order in one or more newspapers of general
175 circulation in the county in which the majority of the physical
176 assets of the hospital are located at least once each week for 2
177 consecutive weeks, commencing with the first publication, which
178 must be at least 20 days before the date set for the hearing. By
179 these publications, all interested parties are made parties
180 defendant to the action and the court has jurisdiction of them
181 to the same extent as if named as defendants in the petition and
182 personally served with process.
183 (b) Any interested person may become a party to the action
184 by moving against or pleading to the petition at or before the
185 time set for the hearing. At the hearing, the court shall
186 determine all questions of law and fact and make such orders as
187 will enable it to properly consider and determine the action and
188 render a final judgment with the least possible delay.
189 (10) Upon conclusion of all hearings and proceedings, the
190 court shall render a final judgment approving or denying the
191 proposed transaction. In reaching its final judgment, the court
192 shall determine whether:
193 (a) The proposed transaction is permitted by law.
194 (b) The proposed transaction unreasonably excludes a
195 potential purchaser or lessee on the basis of being a for-profit
196 or a not-for-profit Florida corporation.
197 (c) The governing board of the hospital publicly advertised
198 the meeting at which the proposed transaction was considered by
199 the board in compliance with s. 286.0105.
200 (d) The governing board of the hospital publicly advertised
201 the offer to accept proposals in compliance with s. 255.0525.
202 (e) The governing board of the hospital exercised due
203 diligence in deciding to dispose of hospital assets, selecting
204 the proposed purchaser or lessee, and negotiating the terms and
205 conditions of the disposition.
206 (f) Any conflict of interest was disclosed, including, but
207 not limited to, conflicts of interest relating to members of the
208 governing board and experts retained by the parties to the
209 transaction.
210 (g) The seller or lessor will receive fair market value for
211 the assets.
212 (h) The acquiring entity has made an enforceable commitment
213 to ensure that quality health care will continue to be provided
214 to all residents of the affected community, in particular the
215 indigent, the uninsured, and the underinsured.
216 (i) The proposed transaction will result in a reduction or
217 elimination of ad valorem or other taxes used to support the
218 hospital.
219 (11) Any party to the action has the right to seek judicial
220 review in the appellate district where the petition for approval
221 was filed.
222 (a) All proceedings shall be instituted by filing a notice
223 of appeal or petition for review in accordance with the Florida
224 Rules of Appellate Procedure within 30 days after the date of
225 final judgment.
226 (b) In such judicial review, the reviewing court shall
227 affirm the judgment of the circuit court, unless the decision is
228 arbitrary, capricious, or not in compliance with this section.
229 (12) All costs shall be paid by the governing board, unless
230 an interested party contests the action, in which case the court
231 may assign costs to the parties.
232 (13) Any sale or lease completed before March 9, 2011, is
233 not subject to this section. Any lease that contained, on March
234 9, 2011, an option to renew or extend that lease upon its
235 expiration is not subject to this section upon renewal or
236 extension on or after March 9, 2011.
237 Section 2. Section 395.3036, Florida Statutes, is amended
238 to read:
239 395.3036 Confidentiality of records and meetings of
240 corporations that lease public hospitals or other public health
241 care facilities.—The records of a private corporation that
242 leases a public hospital or other public health care facility
243 are confidential and exempt from the provisions of s. 119.07(1)
244 and s. 24(a), Art. I of the State Constitution, and the meetings
245 of the governing board of a private corporation are exempt from
246 s. 286.011 and s. 24(b), Art. I of the State Constitution if
247 when the public lessor complies with the public finance
248 accountability provisions of s. 155.40(14) 155.40(5) with
249 respect to the transfer of any public funds to the private
250 lessee and if when the private lessee meets at least three of
251 the five following criteria:
252 (1) The public lessor that owns the public hospital or
253 other public health care facility was not the incorporator of
254 the private corporation that leases the public hospital or other
255 health care facility.
256 (2) The public lessor and the private lessee do not
257 commingle any of their funds in any account maintained by either
258 of them, other than the payment of the rent and administrative
259 fees or the transfer of funds pursuant to subsection (5)(2).
260 (3) Except as otherwise provided by law, the private lessee
261 is not allowed to participate, except as a member of the public,
262 in the decisionmaking process of the public lessor.
263 (4) The lease agreement does not expressly require the
264 lessee to comply with the requirements of ss. 119.07(1) and
265 286.011.
266 (5) The public lessor is not entitled to receive any
267 revenues from the lessee, except for rental or administrative
268 fees due under the lease, and the lessor is not responsible for
269 the debts or other obligations of the lessee.
270 Section 3. This act shall take effect January 1, 2012.