CS/CS/HB 619

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, F.S.;
4requiring approval from a circuit court for the sale or
5lease of a county, district, or municipal hospital;
6requiring the hospital governing board to determine by
7certain public advertisements whether there are qualified
8purchasers or lessees before the sale or lease of such
9hospital; defining the term "fair market value"; requiring
10the board to state in writing specified criteria forming
11the basis of its acceptance of a proposal for sale or
12lease of the hospital; providing for publication of
13notice; authorizing submission of written statements of
14opposition to a proposed transaction, and written
15responses thereto, to the hospital governing board within
16a certain timeframe; requiring the board to file a
17petition for approval with the circuit court and receive
18approval before any transaction is finalized; specifying
19information to be included in such petition; providing for
20the circuit court to issue an order requiring all
21interested parties to appear before the court under
22certain circumstances; granting the circuit court
23jurisdiction to approve sales or leases of county,
24district, or municipal hospitals based on specified
25criteria; providing for a party to seek judicial review;
26requiring the board to pay costs associated with the
27petition for approval unless a party contests the action;
28providing an exemption for certain sale or lease
29transactions completed before a specified date; providing
30an exemption for county, district, or municipal hospitals
31that receive no tax support; defining the term "tax
32support"; amending s. 395.3036, F.S.; conforming cross-
33references; providing an effective date.
34
35Be It Enacted by the Legislature of the State of Florida:
36
37     Section 1.  Subsections (1) and (4) of section 155.40,
38Florida Statutes, are amended, subsections (5) through (8) are
39renumbered as subsections (14) through (17), respectively, and
40new subsections (5) through (13) are added to that section, to
41read:
42     155.40  Sale or lease of county, district, or municipal
43hospital; effect of sale.-
44     (1)  In order that citizens and residents of the state may
45receive quality health care, any county, district, or municipal
46hospital organized and existing under the laws of this state,
47acting by and through its governing board, shall have the
48authority to sell or lease such hospital to a for-profit or not-
49for-profit Florida corporation, and enter into leases or other
50contracts with a for-profit or not-for-profit Florida
51corporation for the purpose of operating and managing such
52hospital and any or all of its facilities of whatsoever kind and
53nature. The term of any such lease, contract, or agreement and
54the conditions, covenants, and agreements to be contained
55therein shall be determined by the governing board of such
56county, district, or municipal hospital. The governing board of
57the hospital must find that the sale, lease, or contract is in
58the best interests of the public and must state the basis of
59such finding. The sale or lease of such hospital is subject to
60approval by a circuit court unless otherwise exempt under
61subsection (14). If the governing board of a county, district,
62or municipal hospital decides to lease the hospital, it must
63give notice in accordance with paragraph (4)(a) or paragraph
64(4)(b).
65     (4)  In the event the governing board of a county,
66district, or municipal hospital determines that it is no longer
67in the public interest to own or operate such hospital and
68elects to consider a sale or lease to a third party, the
69governing board shall first determine whether there are any
70qualified purchasers or lessees. In the process of evaluating
71any potential purchasers or lessees elects to sell or lease the
72hospital, the board shall:
73     (a)  Negotiate the terms of the sale or lease with a for-
74profit or not-for-profit Florida corporation and Publicly
75advertise the meeting at which the proposed sale or lease will
76be considered by the governing board of the hospital in
77accordance with s. 286.0105; or
78     (b)  Publicly advertise the offer to accept proposals in
79accordance with s. 255.0525 and receive proposals from all
80interested and qualified purchasers and lessees.
81
82Any sale or lease must be for fair market value, and any sale or
83lease must comply with all applicable state and federal
84antitrust laws. For the purposes of this section, the term "fair
85market value" means the price that a seller is willing to accept
86and a buyer is willing to pay on the open market and in an
87arm's-length transaction.
88     (5)  A determination by a governing board to accept a
89proposal for sale or lease shall state, in writing, the findings
90and basis supporting the determination.
91     (a)  The findings shall include, but are not limited to,
92the governing board's determination that the proposal:
93     1.  Represents fair market value.
94     2.  Affects whether there will be a reduction or
95elimination of ad valorem or other tax revenues to support the
96hospital.
97     3.  Ensures that quality health care will continue to be
98provided to all residents of the affected community,
99particularly to the indigent, the uninsured, and the
100underinsured.
101     4.  Is otherwise in compliance with paragraph (9)(a).
102     (b)  The findings shall be accompanied by all information
103and documents relevant to the governing board's determination,
104including, but not limited to:
105     1.  The name and address of all parties to the transaction.
106     2.  The location of the hospital and all related
107facilities.
108     3.  A description of the terms of all proposed agreements.
109     4.  A copy of the proposed sale or lease agreement and any
110related agreements, including, but not limited to, leases,
111management contracts, service contracts, and memoranda of
112understanding.
113     5.  The estimated total value associated with the proposed
114agreement and the proposed acquisition price and other
115consideration.
116     6.  Any valuations of the hospital's assets prepared in the
1173 years immediately preceding the proposed transaction date.
118     7.  Any financial or economic analysis and report from any
119expert or consultant retained by the governing board.
120     8.  A fairness evaluation by an independent expert in such
121transactions.
122     9.  Copies of all other proposals and bids the governing
123board may have received or considered in compliance with the
124procedures required under subsection (4).
125     (6)  Not later than 120 days before the anticipated closing
126date of the proposed transaction, the governing board shall make
127publicly available all findings and documents required under
128subsection (5) and shall publish a notice of the proposed
129transaction in one or more newspapers of general circulation in
130the county in which the majority of the physical assets of the
131hospital are located. The notice shall include the names of the
132parties involved, the means by which persons may submit written
133comments about the proposed transaction to the governing board,
134and the means by which persons may obtain copies of the findings
135and documents required under subsection (5).
136     (7)  Within 20 days after the date of publication of public
137notice, any interested person may submit to the governing board
138a detailed written statement of opposition to the transaction.
139When a written statement of opposition has been submitted, the
140governing board or the proposed purchaser or lessee may submit a
141written response to the interested party within 10 days after
142the written statement of opposition due date.
143     (8)  A governing board of a county, district, or municipal
144hospital may not enter into a sale or lease of a hospital
145facility without first receiving approval from a circuit court.
146     (a)  The governing board shall file a petition for approval
147in a circuit court seeking approval of the proposed transaction
148not sooner than 30 days after publication of notice of the
149proposed transaction.
150     (b)  Any such petition for approval filed by the governing
151board shall include all findings and documents required under
152subsection (5) and certification by the governing board of
153compliance with all requirements of this section.
154     (c)  Circuit courts shall have jurisdiction to approve the
155sale or lease of a county, district, or municipal hospital. A
156petition for approval shall be filed in the circuit in which the
157majority of the physical assets of the hospital are located.
158     (9)  Upon the filing of a petition for approval, the court
159shall issue an order requiring all interested parties to appear
160at a designated time and place within the circuit where the
161petition is filed and show why the petition should not be
162granted.
163     (a)  Before the date set for the hearing, the clerk shall
164publish a copy of the order in one or more newspapers of general
165circulation in the county in which the majority of the physical
166assets of the hospital are located at least once each week for 2
167consecutive weeks, commencing with the first publication, which
168shall not be less than 20 days before the date set for the
169hearing. By this publication, all interested parties are made
170parties defendant to the action and the court has jurisdiction
171of them to the same extent as if named as defendants in the
172petition and personally served with process.
173     (b)  Any interested party may become a party to the action
174by moving against or pleading to the petition at or before the
175time set for the hearing. At the hearing, the court shall
176determine all questions of law and fact and make such orders as
177will enable it to properly consider and determine the action and
178render a final judgment with the least possible delay.
179     (10)  Upon conclusion of all hearings and proceedings, the
180court shall render a final judgment approving or denying the
181proposed transaction. In reaching its final judgment, the court
182shall determine whether:
183     (a)  The proposed transaction is permitted by law.
184     (b)  The proposed transaction unreasonably excludes a
185potential purchaser or lessee on the basis of being a for-profit
186or a not-for-profit Florida corporation.
187     (c)  The governing board of the hospital publicly
188advertised the meeting at which the proposed transaction was
189considered by the board in compliance with s. 286.0105.
190     (d)  The governing board of the hospital publicly
191advertised the offer to accept proposals in compliance with s.
192255.0525.
193     (e)  The governing board of the hospital exercised due
194diligence in deciding to dispose of hospital assets, selecting
195the proposed purchaser or lessee, and negotiating the terms and
196conditions of the disposition.
197     (f)  Any conflict of interest was disclosed, including, but
198not limited to, conflicts of interest relating to members of the
199governing board and experts retained by the parties to the
200transaction.
201     (g)  The seller or lessor will receive fair market value
202for the assets.
203     (h)  The acquiring entity has made an enforceable
204commitment to ensure that quality health care will continue to
205be provided to all residents of the affected community, in
206particular the indigent, the uninsured, and the underinsured.
207     (i)  Whether the proposed transaction will result in a
208reduction or elimination of ad valorem or other taxes used to
209support the hospital.
210     (11)  Any party to the action has the right to seek
211judicial review in the appellate district where the petition was
212filed.
213     (a)  All proceedings shall be instituted by filing a notice
214of appeal or petition for review in accordance with the Florida
215Rules of Appellate Procedure within 30 days after the date of
216the final judgment.
217     (b)  In such judicial review, the reviewing court shall
218affirm the judgment of the circuit court, unless the decision is
219arbitrary, capricious, or not in compliance with this section.
220     (12)  All costs shall be paid by the governing board,
221except when an interested party contests the action, in which
222case the court may assign costs to the parties at its
223discretion.
224     (13)  Any sale or lease completed before March 9, 2011, is
225not subject to the requirements of this section. Any lease that
226contained, on March 9, 2011, an option to renew or extend that
227lease upon its expiration shall not be subject to this section
228upon any renewal or extension on or after March 9, 2011.
229     (14)  A county, district, or municipal hospital that has
230not received any tax support is exempt from the requirements of
231subsections (6)-(12). For the purposes of this section, the term
232"tax support" means ad valorem or other tax revenues paid
233directly from a county, district, or municipal taxing authority
234to a hospital without a corresponding exchange of goods or
235services within the 5 years before the effective date of a
236proposed lease or sale.
237     Section 2.  Section 395.3036, Florida Statutes, is amended
238to read:
239     395.3036  Confidentiality of records and meetings of
240corporations that lease public hospitals or other public health
241care facilities.-The records of a private corporation that
242leases a public hospital or other public health care facility
243are confidential and exempt from the provisions of s. 119.07(1)
244and s. 24(a), Art. I of the State Constitution, and the meetings
245of the governing board of a private corporation are exempt from
246s. 286.011 and s. 24(b), Art. I of the State Constitution when
247the public lessor complies with the public finance
248accountability provisions of s. 155.40(14)(5) with respect to
249the transfer of any public funds to the private lessee and when
250the private lessee meets at least three of the five following
251criteria:
252     (1)  The public lessor that owns the public hospital or
253other public health care facility was not the incorporator of
254the private corporation that leases the public hospital or other
255health care facility.
256     (2)  The public lessor and the private lessee do not
257commingle any of their funds in any account maintained by either
258of them, other than the payment of the rent and administrative
259fees or the transfer of funds pursuant to subsection (5)(2).
260     (3)  Except as otherwise provided by law, the private
261lessee is not allowed to participate, except as a member of the
262public, in the decisionmaking process of the public lessor.
263     (4)  The lease agreement does not expressly require the
264lessee to comply with the requirements of ss. 119.07(1) and
265286.011.
266     (5)  The public lessor is not entitled to receive any
267revenues from the lessee, except for rental or administrative
268fees due under the lease, and the lessor is not responsible for
269the debts or other obligations of the lessee.
270     Section 3.  This act shall take effect January 1, 2012.


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