Bill Text: FL S1448 | 2011 | Regular Session | Comm Sub

Bill Title: Sale/Lease/County, District, or Municipal Hospital

Spectrum: Slight Partisan Bill (Republican 4-2)

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [S1448 Detail]

Download: Florida-2011-S1448-Comm_Sub.html
       Florida Senate - 2011                      CS for CS for SB 1448
       By the Committees on Judiciary; and Community Affairs; and
       Senators Garcia and Lynn
       590-04941-11                                          20111448c2
    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.
   43  Be It Enacted by the Legislature of the State of Florida:
   45         Section 1. Subsections (1) and (4) of section 155.40,
   46  Florida Statutes, are amended, present subsections (5) through
   47  (8) of that section are renumbered as subsections (14) through
   48  (17), respectively, and new subsections (5) through (13) are
   49  added to that section, to 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.
   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 and basis for supporting the governing
  101  board’s determination must include, but need not be limited to,
  102  a balanced consideration of the following factors:
  103         1. The proposal represents fair market value, or if the
  104  proposal does not represent fair market value, a detailed
  105  explanation of why the public interest is served by the
  106  acceptance of less than fair market value.
  107         2. Whether the proposal will result in a reduction or
  108  elimination of ad valorem or other tax revenues to support the
  109  hospital.
  110         3. Whether the proposal includes an enforceable commitment
  111  that existing programs and services and quality health care will
  112  continue to be provided to all residents of the affected
  113  community, particularly to the indigent, the uninsured, and the
  114  underinsured.
  115         4.Whether the proposal is otherwise in compliance with
  116  subsections (6) and (7).
  117         (b) The findings must be accompanied by all information and
  118  documents relevant to the governing board’s determination,
  119  including, but not limited to:
  120         1. The names and addresses of all parties to the
  121  transaction.
  122         2. The location of the hospital and all related facilities.
  123         3. A description of the terms of all proposed agreements.
  124         4. A copy of the proposed sale or lease agreement and any
  125  related agreements, including, but not limited to, leases,
  126  management contracts, service contracts, and memoranda of
  127  understanding.
  128         5. The estimated total value associated with the proposed
  129  agreement and the proposed acquisition price and other
  130  consideration.
  131         6. Any valuations of the hospital’s assets prepared during
  132  the 3 years immediately preceding the proposed transaction date.
  133         7. Any financial or economic analysis and report from any
  134  expert or consultant retained by the governing board.
  135         8. A fairness evaluation by an independent expert in such
  136  transactions.
  137         9. Copies of all other proposals and bids the governing
  138  board may have received or considered in compliance with
  139  subsection (4).
  140         (6) Within 120 days before the anticipated closing date of
  141  the proposed transaction, the governing board shall make
  142  publicly available all findings and documents required under
  143  subsection (5) and publish a notice of the proposed transaction
  144  in one or more newspapers of general circulation in the county
  145  in which the majority of the physical assets of the hospital are
  146  located. The notice must include the names of the parties
  147  involved and the means by which a person may submit written
  148  comments about the proposed transaction to the governing board
  149  and may obtain copies of the findings and documents required
  150  under subsection (5).
  151         (7) Within 20 days after the date of publication of the
  152  public notice, any interested person may submit to the governing
  153  board a detailed written statement of opposition to the
  154  transaction. If a written statement of opposition has been
  155  submitted, the governing board or the proposed purchaser or
  156  lessee may submit a written response to the interested party
  157  within 10 days after the written statement of opposition due
  158  date.
  159         (8) A governing board of a county, district, or municipal
  160  hospital may not enter into a sale or lease of a hospital
  161  facility without first receiving approval by majority vote of
  162  the registered voters in the county, district, or municipality
  163  or, in the alternative, approval from a circuit court.
  164         (a) The governing board shall file a petition in a circuit
  165  court seeking approval of the proposed transaction at least 30
  166  days after publication of the notice of the proposed
  167  transaction. The petition must be filed in the circuit in which
  168  the majority of the physical assets of the hospital are located.
  169         (b) The petition for approval filed by the governing board
  170  must include all findings and documents required under
  171  subsection (5) and certification by the governing board of
  172  compliance with all requirements of this section.
  173         (c) Circuit courts have jurisdiction to approve the sale or
  174  lease of a county, district, or municipal hospital.
  175         (9) Upon the filing of a petition for approval, the court
  176  shall issue an order requiring all interested parties to appear
  177  at a designated time and place within the circuit where the
  178  petition is filed and show why the petition should not be
  179  granted. For purposes of this section, the term “interested
  180  parties” includes any party submitting a proposal for sale or
  181  lease of the county, district, or municipal hospital, as well as
  182  the governing board.
  183         (a) Before the date set for the hearing, the clerk shall
  184  publish a copy of the order in one or more newspapers of general
  185  circulation in the county in which the majority of the physical
  186  assets of the hospital are located at least once each week for 2
  187  consecutive weeks, commencing with the first publication, which
  188  must be at least 20 days before the date set for the hearing. By
  189  these publications, all interested parties are made parties
  190  defendant to the action and the court has jurisdiction of them
  191  to the same extent as if named as defendants in the petition and
  192  personally served with process.
  193         (b) Any interested person may become a party to the action
  194  by moving against or pleading to the petition at or before the
  195  time set for the hearing. At the hearing, the court shall
  196  determine all questions of law and fact and make such orders as
  197  will enable it to properly consider and determine the action and
  198  render a final judgment with the least possible delay.
  199         (10) Upon conclusion of all hearings and proceedings, and
  200  upon consideration of all evidence presented, the court shall
  201  render a final judgment approving or denying the proposed
  202  transaction and shall order the governing board to accept or
  203  reject the proposal for the sale or lease of the county,
  204  district, or municipal hospital. In reaching its final judgment,
  205  the court shall determine whether:
  206         (a) The proposed transaction is permitted by law.
  207         (b) The proposed transaction unreasonably excludes a
  208  potential purchaser or lessee on the basis of being a for-profit
  209  or a not-for-profit Florida corporation.
  210         (c) The governing board of the hospital publicly advertised
  211  the meeting at which the proposed transaction was considered by
  212  the board in compliance with s. 286.0105.
  213         (d) The governing board of the hospital publicly advertised
  214  the offer to accept proposals in compliance with s. 255.0525.
  215         (e) The governing board of the hospital exercised due
  216  diligence in deciding to dispose of hospital assets, selecting
  217  the proposed purchaser or lessee, and negotiating the terms and
  218  conditions of the disposition.
  219         (f) Any conflict of interest was disclosed, including, but
  220  not limited to, conflicts of interest relating to members of the
  221  governing board and experts retained by the parties to the
  222  transaction.
  223         (g) The seller or lessor will receive fair market value for
  224  the assets, or if the sale or lease represents less than fair
  225  market value, why the public interest will be served by
  226  accepting less than fair market value.
  227         (h) The acquiring entity has made an enforceable commitment
  228  that existing programs and services and quality health care will
  229  continue to be provided to all residents of the affected
  230  community, particularly to the indigent, the uninsured, and the
  231  underinsured.
  232         (i) The proposed transaction will result in a reduction or
  233  elimination of ad valorem or other taxes used to support the
  234  hospital.
  235         (11) Any party to the action has the right to seek judicial
  236  review in the appellate district where the petition for approval
  237  was filed.
  238         (a) All proceedings shall be instituted by filing a notice
  239  of appeal or petition for review in accordance with the Florida
  240  Rules of Appellate Procedure within 30 days after the date of
  241  final judgment.
  242         (b) In such judicial review, the reviewing court shall
  243  affirm the judgment of the circuit court, unless the decision is
  244  arbitrary, capricious, or not in compliance with this section.
  245         (12) All costs shall be paid by the governing board, unless
  246  an interested party contests the action, in which case the court
  247  may assign costs to the parties.
  248         (13) Any sale or lease completed before March 9, 2011, is
  249  not subject to this section. Any lease that contained, on March
  250  9, 2011, an option to renew or extend that lease upon its
  251  expiration is not subject to this section upon renewal or
  252  extension on or after March 9, 2011.
  253         Section 2. Section 395.3036, Florida Statutes, is amended
  254  to read:
  255         395.3036 Confidentiality of records and meetings of
  256  corporations that lease public hospitals or other public health
  257  care facilities.—The records of a private corporation that
  258  leases a public hospital or other public health care facility
  259  are confidential and exempt from the provisions of s. 119.07(1)
  260  and s. 24(a), Art. I of the State Constitution, and the meetings
  261  of the governing board of a private corporation are exempt from
  262  s. 286.011 and s. 24(b), Art. I of the State Constitution if
  263  when the public lessor complies with the public finance
  264  accountability provisions of s. 155.40(14) 155.40(5) with
  265  respect to the transfer of any public funds to the private
  266  lessee and if when the private lessee meets at least three of
  267  the five following criteria:
  268         (1) The public lessor that owns the public hospital or
  269  other public health care facility was not the incorporator of
  270  the private corporation that leases the public hospital or other
  271  health care facility.
  272         (2) The public lessor and the private lessee do not
  273  commingle any of their funds in any account maintained by either
  274  of them, other than the payment of the rent and administrative
  275  fees or the transfer of funds pursuant to subsection (5)(2).
  276         (3) Except as otherwise provided by law, the private lessee
  277  is not allowed to participate, except as a member of the public,
  278  in the decisionmaking process of the public lessor.
  279         (4) The lease agreement does not expressly require the
  280  lessee to comply with the requirements of ss. 119.07(1) and
  281  286.011.
  282         (5) The public lessor is not entitled to receive any
  283  revenues from the lessee, except for rental or administrative
  284  fees due under the lease, and the lessor is not responsible for
  285  the debts or other obligations of the lessee.
  286         Section 3. This act shall take effect January 1, 2012.