HB 711

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.; providing that the sale or lease of a county,
5district, or municipal hospital is subject to approval
6by the registered voters or by the circuit court;
7requiring the hospital governing board to determine by
8certain public advertisements whether there are
9qualified purchasers or lessees before the sale or
10lease of such hospital; defining the term "fair market
11value"; requiring the board to state in writing
12specified criteria forming the basis of its acceptance
13of a proposal for sale or lease of the hospital;
14providing for publication of notice; authorizing
15submission of written statements of opposition to a
16proposed transaction, and written responses thereto,
17within a certain timeframe; requiring the board to
18file a petition for approval with the circuit court
19and receive approval before any transaction is
20finalized; specifying information to be included in
21such petition; providing for the circuit court to
22issue an order requiring all interested parties to
23appear before the court under certain circumstances;
24requiring the clerk of the court to publish the copy
25of the order in certain newspapers at specified times;
26providing that certain parties are made parties to the
27action by the publication of the order; granting the
28circuit court jurisdiction to approve the sale or
29lease of a county, district, or municipal hospital
30based on specified criteria; providing for a party to
31seek judicial review; requiring that the reviewing
32court affirm the judgment of the circuit court unless
33the decision is arbitrary, capricious, or not in
34compliance with the act; requiring the board to pay
35costs associated with the petition for approval unless
36a party contests the action; providing an exemption
37for certain sale or lease transactions completed
38before a specified date; amending s. 395.3036, F.S.;
39conforming cross-references; providing an effective
42Be It Enacted by the Legislature of the State of Florida:
44     Section 1.  Subsections (1) and (4) of section 155.40,
45Florida Statutes, are amended, present subsections (5) through
46(8) of that section are renumbered as subsections (14) through
47(17), respectively, and new subsections (5) through (13) are
48added to that section, to read:
49     155.40  Sale or lease of county, district, or municipal
50hospital; effect of sale.-
51     (1)  In order for that citizens and residents of the state
52to may receive quality health care, any county, district, or
53municipal hospital organized and existing under the laws of this
54state, acting by and through its governing board, may shall have
55the authority to sell or lease such hospital to a for-profit or
56not-for-profit Florida corporation, and enter into leases or
57other contracts with a for-profit or not-for-profit Florida
58corporation for the purpose of operating and managing such
59hospital and any or all of its facilities of whatsoever kind and
60nature. The term of any such lease, contract, or agreement and
61the conditions, covenants, and agreements to be contained
62therein shall be determined by the governing board of such
63county, district, or municipal hospital. The governing board of
64the hospital must find that the sale, lease, or contract is in
65the best interests of the public and must state the basis of
66such finding. The sale or lease of such hospital is subject to
67approval by a majority vote of the registered voters in the
68county, district, or municipality or, in the alternative,
69approval by a circuit court. If the governing board of a county,
70district, or municipal hospital decides to lease the hospital,
71it must give notice in accordance with paragraph (4)(a) or
72paragraph (4)(b).
73     (4)  If In the event the governing board of a county,
74district, or municipal hospital determines that it is no longer
75in the public interest to own or operate such hospital and
76elects to consider a sale or lease of the hospital to a third
77party, the governing board must first determine whether there
78are any qualified purchasers or lessees. In the process of
79evaluating any potential purchasers or lessees elects to sell or
80lease the hospital, the board shall:
81     (a)  Negotiate the terms of the sale or lease with a for-
82profit or not-for-profit Florida corporation and Publicly
83advertise the meeting at which the proposed sale or lease will
84be considered by the governing board of the hospital in
85accordance with s. 286.0105; or
86     (b)  Publicly advertise the offer to accept proposals in
87accordance with s. 255.0525 and receive proposals from all
88interested and qualified purchasers and lessees.
90Any sale or lease must be for fair market value, and any sale or
91lease must comply with all applicable state and federal
92antitrust laws. For the purposes of this section, the term "fair
93market value" means the price that a seller is willing to accept
94and a buyer is willing to pay on the open market and in an arms-
95length transaction.
96     (5)  A determination by a governing board to accept a
97proposal for sale or lease must state, in writing, the findings
98and basis for supporting the determination.
99     (a)  The findings and basis for supporting the governing
100board's determination must include, but need not be limited to,
101a balanced consideration of the following factors:
102     1.  The proposal represents fair market value, or if the
103proposal does not represent fair market value, a detailed
104explanation of why the public interest is served by the
105acceptance of less than fair market value.
106     2.  Whether the proposal will result in a reduction or
107elimination of ad valorem or other tax revenues to support the
109     3.  Whether the proposal includes an enforceable commitment
110that existing programs and services and quality health care will
111continue to be provided to all residents of the affected
112community, particularly to the indigent, the uninsured, and the
114     4.  Whether the proposal is otherwise in compliance with
115subsections (6) and (7).
116     (b)  The findings must be accompanied by all information
117and documents relevant to the governing board's determination,
118including, but not limited to:
119     1.  The names and addresses of all parties to the
121     2.  The location of the hospital and all related
123     3.  A description of the terms of all proposed agreements.
124     4.  A copy of the proposed sale or lease agreement and any
125related agreements, including, but not limited to, leases,
126management contracts, service contracts, and memoranda of
128     5.  The estimated total value associated with the proposed
129agreement and the proposed acquisition price and other
131     6.  Any valuations of the hospital's assets prepared during
132the 3 years immediately preceding the proposed transaction date.
133     7.  Any financial or economic analysis and report from any
134expert or consultant retained by the governing board.
135     8.  A fairness evaluation by an independent expert in such
137     9.  Copies of all other proposals and bids the governing
138board may have received or considered in compliance with
139subsection (4).
140     (6)  Within 120 days before the anticipated closing date of
141the proposed transaction, the governing board shall make
142publicly available all findings and documents required under
143subsection (5) and publish a notice of the proposed transaction
144in one or more newspapers of general circulation in the county
145in which the majority of the physical assets of the hospital are
146located. The notice must include the names of the parties
147involved and the means by which a person may submit written
148comments about the proposed transaction to the governing board
149and obtain copies of the findings and documents required under
150subsection (5).
151     (7)  Within 20 days after the date of publication of the
152public notice, any interested person may submit to the governing
153board a detailed written statement of opposition to the
154transaction. If a written statement of opposition has been
155submitted, the governing board or the proposed purchaser or
156lessee may submit a written response to the interested party
157within 10 days after the written statement of opposition due
159     (8)  A governing board of a county, district, or municipal
160hospital may not enter into a sale or lease of a hospital
161facility without first receiving approval by a majority vote of
162the registered voters in the county, district, or municipality
163or, in the alternative, approval from a circuit court.
164     (a)  The governing board shall file a petition in a circuit
165court seeking approval of the proposed transaction at least 30
166days after publication of the notice of the proposed
167transaction. The petition must be filed in the circuit in which
168the majority of the physical assets of the hospital are located.
169     (b)  The petition for approval filed by the governing board
170must include all findings and documents required under
171subsection (5) and certification by the governing board of
172compliance with all requirements of this section.
173     (c)  A circuit court has jurisdiction to approve the sale
174or lease of a county, district, or municipal hospital.
175     (9)  Upon the filing of a petition for approval, the court
176shall issue an order requiring all interested parties to appear
177at a designated time and place within the circuit where the
178petition is filed and show why the petition should not be
179granted. For purposes of this subsection, the term "interested
180parties" includes any party submitting a proposal for sale or
181lease of the county, district, or municipal hospital, as well as
182the governing board.
183     (a)  Before the date set for the hearing, the clerk shall
184publish a copy of the order in one or more newspapers of general
185circulation in the county in which the majority of the physical
186assets of the hospital are located at least once each week for 2
187consecutive weeks, commencing with the first publication, which
188must be at least 20 days before the date set for the hearing. By
189these publications, all interested parties are made parties
190defendant to the action and the court has jurisdiction of them
191to the same extent as if named as defendants in the petition and
192personally served with process.
193     (b)  Any interested person may become a party to the action
194by moving against or pleading to the petition at or before the
195time set for the hearing. At the hearing, the court shall
196determine all questions of law and fact and make such orders as
197will enable it to properly consider and determine the action and
198render a final judgment with the least possible delay.
199     (10)  Upon conclusion of all hearings and proceedings, and
200upon consideration of all evidence presented, the court shall
201render a final judgment approving or denying the proposed
202transaction and shall order the governing board to accept or
203reject the proposal for the sale or lease of the county,
204district, or municipal hospital. In reaching its final judgment,
205the court shall determine whether:
206     (a)  The proposed transaction is permitted by law.
207     (b)  The proposed transaction unreasonably excludes a
208potential purchaser or lessee on the basis of being a for-profit
209or a not-for-profit Florida corporation.
210     (c)  The governing board of the hospital publicly
211advertised the meeting at which the proposed transaction was
212considered by the board in compliance with s. 286.0105.
213     (d)  The governing board of the hospital publicly
214advertised the offer to accept proposals in compliance with s.
216     (e)  The governing board of the hospital exercised due
217diligence in deciding to dispose of hospital assets, selecting
218the proposed purchaser or lessee, and negotiating the terms and
219conditions of the disposition.
220     (f)  Any conflict of interest was disclosed, including, but
221not limited to, conflicts of interest relating to members of the
222governing board and experts retained by the parties to the
224     (g)  The seller or lessor will receive fair market value
225for the assets, or if the sale or lease represents less than
226fair market value, why the public interest will be served by
227accepting less than fair market value.
228     (h)  The acquiring entity has made an enforceable
229commitment that existing programs and services and quality
230health care will continue to be provided to all residents of the
231affected community, particularly to the indigent, the uninsured,
232and the underinsured.
233     (i)  The proposed transaction will result in a reduction or
234elimination of ad valorem or other taxes used to support the
236     (11)  Any party to the action has the right to seek
237judicial review in the appellate district where the petition for
238approval was filed.
239     (a)  All proceedings shall be instituted by filing a notice
240of appeal or petition for review in accordance with the Florida
241Rules of Appellate Procedure within 30 days after the date of
242final judgment.
243     (b)  In such judicial review, the reviewing court shall
244affirm the judgment of the circuit court, unless the decision is
245arbitrary, capricious, or not in compliance with this section.
246     (12)  All costs shall be paid by the governing board,
247unless an interested party contests the action, in which case
248the court may assign costs to the parties.
249     (13)  Any sale or lease completed before March 9, 2011, is
250not subject to this section. Any lease that contained, on March
2519, 2011, an option to renew or extend that lease upon its
252expiration is not subject to this section upon renewal or
253extension on or after March 9, 2011.
254     Section 2.  Section 395.3036, Florida Statutes, is amended
255to read:
256     395.3036  Confidentiality of records and meetings of
257corporations that lease public hospitals or other public health
258care facilities.-The records of a private corporation that
259leases a public hospital or other public health care facility
260are confidential and exempt from the provisions of s. 119.07(1)
261and s. 24(a), Art. I of the State Constitution, and the meetings
262of the governing board of a private corporation are exempt from
263s. 286.011 and s. 24(b), Art. I of the State Constitution if
264when the public lessor complies with the public finance
265accountability provisions of s. 155.40(14) 155.40(5) with
266respect to the transfer of any public funds to the private
267lessee and if when the private lessee meets at least three of
268the five following criteria:
269     (1)  The public lessor that owns the public hospital or
270other public health care facility was not the incorporator of
271the private corporation that leases the public hospital or other
272health care facility.
273     (2)  The public lessor and the private lessee do not
274commingle any of their funds in any account maintained by either
275of them, other than the payment of the rent and administrative
276fees or the transfer of funds pursuant to subsection (5)(2).
277     (3)  Except as otherwise provided by law, the private
278lessee is not allowed to participate, except as a member of the
279public, in the decisionmaking process of the public lessor.
280     (4)  The lease agreement does not expressly require the
281lessee to comply with the requirements of ss. 119.07(1) and
283     (5)  The public lessor is not entitled to receive any
284revenues from the lessee, except for rental or administrative
285fees due under the lease, and the lessor is not responsible for
286the debts or other obligations of the lessee.
287     Section 3.  This act shall take effect July 1, 2012.

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