Florida Senate - 2024 SB 1700
By Senator DiCeglie
18-01112B-24 20241700__
1 A bill to be entitled
2 An act relating to independent hospital districts;
3 creating s. 189.0762, F.S.; providing definitions;
4 providing requirements for the conversion of an
5 independent hospital district to a nonprofit entity;
6 requiring a certain evaluation by an independent
7 entity; providing qualifications for such independent
8 entity; providing for notice of public meetings and
9 publication of certain documents; requiring that the
10 evaluation of the conversion be completed and a final
11 report presented to the governing body of the district
12 within a specified timeframe; requiring that the final
13 report be published on the district’s website;
14 requiring certification of the final report; requiring
15 the governing body of the district to determine by a
16 supermajority vote whether conversion is in the best
17 interests of its residents within a specified
18 timeframe; providing for negotiation of an agreement
19 between each affected county and the governing body of
20 the independent hospital district; providing
21 requirements for such agreement; providing for
22 disposition of all assets and liabilities of the
23 district; prohibiting members of the board of
24 commissioners for an affected county from serving on
25 the board of the succeeding nonprofit entity;
26 authorizing members of the governing body of the
27 independent hospital district to serve on the board of
28 the succeeding nonprofit entity; requiring disclosure
29 of all conflicts of interest; requiring that certain
30 documents be published on the websites of the district
31 and each county that is a party to the agreement for a
32 specified timeframe; authorizing the governing body of
33 the independent hospital district to approve by
34 supermajority vote the conversion of the district to a
35 nonprofit entity; requiring each board of
36 commissioners for each affected county to approve the
37 agreement at a public meeting; requiring a referendum
38 under certain circumstances; requiring the independent
39 hospital district to file a copy of the agreement with
40 and provide certain notification to the Department of
41 Commerce within a specified timeframe; providing for
42 dissolution of the district within a specified
43 timeframe; requiring independent hospital districts to
44 conduct an evaluation for certain purposes; providing
45 evaluation requirements; providing an effective date.
46
47 Be It Enacted by the Legislature of the State of Florida:
48
49 Section 1. Section 189.0762, Florida Statutes, is created
50 to read:
51 189.0762 Conversion of an independent hospital district to
52 a nonprofit entity.—
53 (1) For purposes of this section, the term:
54 (a) “Independent hospital district” means an entity created
55 pursuant to a special act which operates one or more hospitals
56 licensed under chapter 395 and is governed by the governing body
57 of a special district or by the board of trustees of a public
58 health trust created under s. 154.07.
59 (b) “Nonprofit entity” means a Florida not-for-profit
60 corporation operating under chapter 617.
61 (2) The governing body of an independent hospital district
62 may elect, by a majority vote plus one, to commence an
63 evaluation of the benefits to the residents of the district of
64 converting the independent hospital district to a nonprofit
65 entity if the governing body of the district and each county
66 within which any part of the district’s boundaries are located
67 execute an agreement that meets the requirements of subsection
68 (5). In evaluating the benefits of converting the independent
69 hospital district to a nonprofit entity, the governing body of
70 the district must:
71 (a) Publish notice of and conduct a public meeting in
72 accordance with s. 189.015(1) to provide the residents of the
73 district with the opportunity to publicly testify regarding the
74 conversion. The public hearing must be held at a meeting other
75 than a regularly noticed meeting or an emergency meeting of the
76 independent hospital district.
77 (b) Contract with an independent entity that has at least 5
78 years of experience conducting comparable evaluations of
79 hospital organizations similar in size and function to the
80 independent hospital district to conduct the evaluation
81 according to applicable industry best practices. The independent
82 entity may not have any affiliation with or financial
83 involvement in the district or with any member of the governing
84 body of the district.
85 (c) Publish all documents considered by the governing body
86 of the independent hospital district on the website of the
87 district.
88 (3) The evaluation must be completed and a final report
89 presented to the governing body of the independent hospital
90 district no later than 180 days after the date on which the vote
91 is taken by the governing body of the district to evaluate the
92 conversion. The final report shall be published on the
93 district’s website. The final report must include a statement
94 signed by the presiding officer of the governing board of the
95 independent hospital district and the chief executive officer of
96 the independent entity conducting the evaluation that, based on
97 each person’s reasonable knowledge and belief, the contents and
98 conclusions of the evaluation are true and correct.
99 (4) No later than 120 days after the date on which the
100 governing body of the independent hospital district receives the
101 final report, the governing body of the district must determine,
102 by a majority vote plus one, whether the interests of the
103 residents of the district are best served by converting the
104 independent hospital district to a nonprofit entity. If the
105 governing body of the district determines conversion is in the
106 best interests of its residents, the independent hospital
107 district must negotiate and complete an agreement with the board
108 of county commissioners for each county in which any part of the
109 district’s boundaries are located before conversion may occur.
110 (5) An agreement between the governing body of the
111 independent hospital district and each county in which any part
112 of the district’s boundaries are located must be completed no
113 later than 120 days after the date on which the public meeting
114 is held to determine if conversion of the district is in the
115 best interests of its residents. The agreement must be in
116 writing, dispose of all assets and liabilities of the
117 independent hospital district, and include:
118 (a) A description of each asset that will be transferred to
119 each county.
120 (b) A description of each liability that will be
121 transferred to each county.
122 (c) The estimated total value of the assets that will be
123 transferred to each county.
124 (d) The estimated total value of the liabilities that will
125 be transferred to each county.
126 (e) If the agreement is with more than one county, a
127 description of the methodology used to allocate the assets and
128 liabilities of the district between the counties.
129 (f) A description of all assets that will be transferred to
130 the succeeding nonprofit entity.
131 (g) A description of all liabilities that will be assumed
132 by the succeeding nonprofit entity.
133 (h) The estimated total value of the assets that will be
134 transferred to the succeeding nonprofit entity.
135 (i) The total value of the liabilities to be assumed by the
136 succeeding nonprofit entity.
137 (j) If any debts remain, how those debts will be resolved.
138 (k) An enforceable commitment that programs and services
139 provided by the district will continue to be provided to all
140 residents of the former district in perpetuity so long as the
141 succeeding nonprofit entity is in operation or, if otherwise
142 agreed to by the independent hospital district and each county
143 that is a party to the agreement, until the succeeding nonprofit
144 entity has otherwise met all obligations set forth in the
145 agreement.
146 (l) A provision transferring the rights and obligations as
147 agreed to by the governing body of the independent hospital
148 district and each county that is a party to the agreement to the
149 succeeding nonprofit entity.
150 (m) Any other terms mutually agreed to by the governing
151 body of the independent hospital district and each county that
152 is a party to the agreement.
153 (6)(a) A member of the board of commissioners for any
154 county that is a party to the agreement may not serve on the
155 board of the succeeding nonprofit entity.
156 (b) A member of the governing body of the independent
157 hospital district may serve on the board of the succeeding
158 nonprofit entity.
159 (7) The members of the governing body of the independent
160 hospital district and the board of commissioners for each county
161 that is a party to the agreement must disclose all conflicts of
162 interest as required by s. 112.313, including, but not limited
163 to:
164 (a) Whether the conversion of the independent hospital
165 district will result in a special private gain or loss to any
166 member of the governing body of the independent hospital
167 district or boards of commissioners for the affected counties or
168 to any senior executive of the independent hospital district.
169 (b) If any member of the governing body of the independent
170 hospital district will serve on the board of the succeeding
171 nonprofit entity. Such intent to serve on the board of the
172 succeeding nonprofit entity does not disqualify any member from
173 voting on the proposed conversion.
174 (8) The evaluation, agreements, disclosures, and any other
175 supporting documents related to the conversion of the
176 independent hospital district must be published on the
177 district’s website and the website of each county that is a
178 party to the agreement under subsection (5) for 45 days before
179 the governing body of the independent hospital district and the
180 board of commissioners for each county that is a party to the
181 agreement may vote on the proposed conversion.
182 (9)(a) In a public meeting noticed as required pursuant to
183 subsection (2), the governing body of the independent hospital
184 district may approve, by a majority vote plus one, the
185 conversion of the district to a nonprofit entity and any
186 agreements related to the conversion.
187 (b) The agreement negotiated under subsection (5) must be
188 approved by each board of commissioners for each affected county
189 in a properly noticed public meeting.
190 (c) If the governing body of the independent hospital
191 district and the board of commissioners for each affected county
192 approve the proposed agreement, and the district exercises ad
193 valorem taxing powers, a referendum of the qualified electors of
194 the district must be conducted at the next general election as
195 required pursuant to s. 100.031. A referendum is not required
196 for independent hospital districts that have not levied,
197 collected, or received ad valorem taxes in the current fiscal
198 year and the previous 5 fiscal years.
199 (d) If approved by the qualified electors of the
200 independent hospital district voting in a referendum conducted
201 in accordance with paragraph (c), the agreement between the
202 independent hospital district and the board of commissioners for
203 each affected county shall be in full force and effect. The
204 independent hospital district shall file a copy of the agreement
205 with the department no later than 10 days after the date on
206 which the referendum approving the agreement and conversion
207 occurs.
208 (10) No later than 30 days after the complete transfer of
209 assets and liabilities as provided in the agreement under
210 subsection (5), the independent hospital district shall notify
211 the department. The district shall be dissolved automatically
212 upon receipt of the notice by the department.
213 (11) If the governing body of the independent hospital
214 district and the board of commissioners for each county that is
215 a party to the agreement are unable to reach an agreement that
216 would result in the conversion of the independent hospital
217 district to a nonprofit entity, the district shall continue in
218 existence.
219 Section 2. (1) Each independent hospital district, as
220 defined in s. 189.0762(1), Florida Statutes, shall cause to be
221 conducted an evaluation of the benefits to the residents of the
222 district of converting the independent hospital district to a
223 nonprofit entity as defined in s. 189.0762(1), Florida Statutes,
224 or transacting a sale to a for-profit entity, including, but not
225 limited to, a complete financial valuation of the assets and
226 liabilities of the independent hospital district.
227 (2) The evaluation must be conducted by an independent
228 entity that has at least 5 years of experience conducting
229 comparable evaluations of hospital organizations similar in size
230 and function to the independent hospital district and that has
231 no affiliation with or financial involvement in the district or
232 with any member of the governing body of the district. The
233 independent entity must conduct the evaluation according to
234 applicable industry best practices.
235 (3) The evaluation must include a statement signed by the
236 chief executive of the district that, upon his or her reasonable
237 knowledge and belief, the evaluation is true and correct.
238 (4) The financial valuation must be conducted by an
239 independent certified public accountant and must include a
240 statement signed by the accountant that, upon his or her
241 reasonable knowledge and belief, the valuation is true and
242 correct.
243 (5) Each district shall complete its evaluation by December
244 31, 2024, and publish the evaluation on its website within 30
245 days after completion.
246 Section 3. This act shall take effect July 1, 2024.