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Florida Statute 155.40 - Full Text and Legal Analysis
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The 2025 Florida Statutes

Title XI
COUNTY ORGANIZATION AND INTERGOVERNMENTAL RELATIONS
Chapter 155
HOSPITALS
View Entire Chapter
155.40 Sale or lease of county, district, or municipal hospital; effect of sale.
(1) In the interest of providing quality health care services to the citizens and residents of this state, and notwithstanding any other provision of general or special law, a county, district, or municipal hospital organized and existing under the laws of this state, acting by and through its governing board, may sell or lease the hospital to a for-profit or not-for-profit Florida entity, and enter into leases or other contracts with a for-profit or not-for-profit Florida entity for the purpose of operating the hospital and its facilities. The term of such lease, contract, or agreement and the conditions, covenants, and agreements to be contained therein shall be determined by the governing board of the hospital. The governing board of the hospital must find that the sale, lease, or contract is in the best interests of the affected community and must state the basis of that finding.
(2) A lease, contract, or agreement made pursuant hereto shall:
(a) Provide that the articles of incorporation of the for-profit or not-for-profit corporation be subject to the approval of the board of directors or board of trustees of the hospital;
(b) Require that any not-for-profit corporation become qualified under s. 501(c)(3) of the United States Internal Revenue Code;
(c) Provide for the orderly transition of the operation and management of the facilities;
(d) Provide for the return of the facility to the county, municipality, or district upon the termination of the lease, contract, or agreement; and
(e) Provide for the continued treatment of indigent patients pursuant to the Florida Health Care Responsibility Act and pursuant to chapter 87-92, Laws of Florida.
(3) Any sale, lease, or contract entered into pursuant to this section before the effective date of this act must have complied with the requirements of subsection (2) in effect at the time of the sale, lease, or contract. It is the intent of the Legislature that this section not impose any further requirements with respect to the formation of any for-profit or not-for-profit Florida entity, the composition of the board of directors of any Florida entity, or the manner in which control of the hospital is transferred to the Florida entity.
(4) As used in this section, the term:
(a) “Affected community” means those persons residing within the geographic boundaries defined by the charter of the county, district, or municipal hospital or health care system, or if the boundaries are not specifically defined by charter, by the geographic area from which 75 percent of the county, district, or municipal hospital’s or health care system’s inpatient admissions are derived.
(b) “Fair market value” means the price that a seller or lessor is willing to accept and a buyer or lessee is willing to pay on the open market and in an arms-length transaction, or what an independent expert in hospital valuation determines the fair market value to be.
(c) “Interested party” includes a person submitting a proposal for sale or lease of the county, district, or municipal hospital or health care system, as well as the governing board.
(5) The governing board of a county, district, or municipal hospital or health care system shall commence an evaluation of the possible benefits to an affected community from the sale or lease of hospital facilities owned by the board to a not-for-profit or for-profit entity no later than December 31, 2012. In the course of evaluating the benefits of the sale or lease, the board shall:
(a) Conduct a public hearing to provide interested persons the opportunity to be heard on the matter.
(b) Publish notice of the public hearing in one or more newspapers of general circulation in the county in which the majority of the physical assets of the hospital or health care system are located and in the Florida Administrative Register at least 15 days before the hearing is scheduled to occur.
(c) Contract with a certified public accounting firm or other firm that has substantial expertise in the valuation of hospitals to render an independent valuation of the hospital’s fair market value.
(d) Consider an objective operating comparison between a hospital or health care system operated by the district, county, or municipality and other similarly situated hospitals, both not-for-profit and for-profit, which have a similar service mix, in order to determine whether there is a difference in the cost of operation using publicly available data provided by the Agency for Health Care Administration and the quality metrics identified by the Centers for Medicare and Medicaid Services Core Measures. The comparison must determine whether it is more beneficial to taxpayers and the affected community for the hospital to be operated by a governmental entity, or whether the hospital can be operated by a not-for-profit or for-profit entity with similar or better cost-efficiencies or measurable outcomes identified by the Centers for Medicare and Medicaid Services Core Measures. The comparison must also determine whether there is a net benefit to the community to operate the hospital as a not-for-profit or for-profit entity and use the proceeds of the sale or lease for the purposes described in this section.
(e) Make publicly available all documents considered by the board in the course of such evaluation.
1. Within 160 days after the initiation of the process established in this subsection, the governing board shall publish notice of the board’s findings in one or more newspapers of general circulation in the county in which the majority of the physical assets of the hospital are located and in the Florida Administrative Register.
2. This evaluation is not required if a district, county, or municipal hospital has issued a public request for proposals for the sale or lease of a hospital on or before February 1, 2012, for the purpose of receiving proposals from qualified purchasers or lessees, either not-for-profit or for-profit.
(6) If, upon completion of the evaluation of the benefits of the sale or lease, the governing board of a county, district, or municipal hospital determines that it is no longer in the best interest of the affected community to own or operate a hospital or health care system and elects to consider a sale or lease of the hospital or health care system to a third party, the governing board must first determine whether there are any qualified purchasers or lessees. In the process of evaluating any qualified purchaser or lessee, the board shall:
(a) Publicly advertise the meeting at which the proposed sale or lease will be considered by the governing board of the hospital in accordance with s. 286.0105; or
(b) Publicly advertise the offer to accept proposals in accordance with s. 255.0525 and receive proposals from all qualified purchasers and lessees.

Any sale or lease must be for fair market value, or, if not for fair market value, the lease must be in the best interest of the affected community. A sale or lease must comply with all applicable state and federal antitrust laws.

(7) A determination by the governing board to accept a proposal for sale or lease shall be made after consideration of all proposals received and negotiations with a qualified purchaser or lessee. The governing board’s determination must include, in writing, detailed findings of all reasons for accepting the proposal.
(a) The governing board’s acceptance of a proposal for sale or lease must include a description of how the sale or lease satisfies each of the following requirements:
1. The sale or lease represents fair market value, as determined by a certified public accounting firm or other qualified firm pursuant to subsection (5). If leased at less than fair market value, the governing board shall provide a detailed explanation of how the best interests of the affected community are served by the acceptance of less than fair market value for the lease of the hospital.
2. Acceptance of the proposal will result in a reduction or elimination of ad valorem or other taxes for taxpayers in the district, if applicable.
3. The proposal includes an enforceable commitment that programs and services and quality health care will continue to be provided to all residents of the affected community, particularly to the indigent, the uninsured, and the underinsured.
4. Disclosure has been made of all conflicts of interest, including, but not limited to, whether the sale or lease of the hospital or health care system would result in a special private gain or loss to members of the governing board or key management employees or members of the medical staff of the county, district, or municipal hospital, or if governing board members will be serving on the board of any successor private corporation. Conflicts of interest, if any, with respect to experts retained by the governing board shall also be disclosed.
5. Disclosure has been made by the seller or lessor of all contracts with physicians or other entities providing health care services through a contract with the seller or lessor, including all agreements or contracts that would be void or voidable upon the consummation of the sale or lease.
6. The proposal is in compliance with subsections (8) and (9).
(b) The findings must be accompanied by all information and documents relevant to the governing board’s determination, including, but not limited to:
1. The names and addresses of all parties to the transaction.
2. The location of the hospital or health care system and all related facilities.
3. A description of the terms of all proposed agreements.
4. A copy of the proposed sale or lease agreement and any related agreements, including, but not limited to, leases, management contracts, service contracts, and memoranda of understanding.
5. The estimated total value associated with the proposed agreement and the proposed acquisition price.
6. Any valuations of the hospital’s or health care system’s assets prepared during the 3 years immediately preceding the proposed transaction date.
7. The fair market value analysis required by paragraph (5)(c), or any other valuation prepared at the request of the board, owner of the hospital or health care system, or managing entity of the hospital or health care system.
8. Copies of all other proposals and bids that the governing board may have received or considered in compliance with subsection (6).
(8) Within 120 days before the anticipated closing date of the proposed transaction, the governing board shall make publicly available all findings and documents required under subsection (7) and publish a notice of the proposed transaction in one or more newspapers of general circulation in the county in which the majority of the physical assets of the hospital or health care system are located. The notice must include the names of the parties involved and the means by which a person may submit written comments about the proposed transaction to the governing board and obtain copies of the findings and documents required under subsection (7).
(9) Within 20 days after the date of publication of the public notice, any person may submit to the governing board written comments regarding the proposed transaction.
(10) The sale or lease of the hospital or health care system is subject to approval by the Secretary of Health Care Administration or his or her designee, except, if otherwise required by law, approval of the sale or lease shall exclusively be by majority vote of the registered voters in the county, district, or municipality in which the hospital or health care system is located.
(a) The governing board shall file a petition with the Secretary of Health Care Administration seeking approval of the proposed transaction at least 30 days after publication of the notice of the proposed transaction.
(b) The petition for approval filed by the governing board must include all findings and documents required under subsection (7) and certification by the governing board of compliance with all requirements of this section. The chair of the governing board must certify under oath and subject to the penalty of perjury on a form accompanying the petition that the contents of the petition and representations therein are true and correct.
(11) Within 30 days after receiving the petition, the Secretary of Health Care Administration or his or her designee shall issue a final order approving or denying the proposed transaction based solely upon consideration of whether the procedures contained within this section have been followed by the governing board of the county, district, or municipal hospital or health care system. The order shall require the governing board to accept or reject the proposal for the sale or lease of the county, district, or municipal hospital or health care system based upon a determination that:
(a) The proposed transaction is permitted by law.
(b) The proposed transaction does not unreasonably exclude a potential purchaser or lessee on the basis of being a for-profit or a not-for-profit Florida corporation or other form of business organization, such as a partnership or limited liability company.
(c) The governing board of the hospital or health care system publicly advertised the meeting at which the proposed transaction was considered by the board in compliance with s. 286.0105.
(d) The governing board of the hospital or health care system publicly advertised the offer to accept proposals in compliance with s. 255.0525.
(e) Any conflict of interest was disclosed, including, but not limited to, how the proposed transaction could result in a special private gain or loss to members of the governing board or key management employees of the county, district, or municipal hospital, or if governing board members will be serving on the board of any successor private corporation. Conflicts of interest, if any, with respect to experts retained by the governing board shall also be disclosed.
(f) The seller or lessor documented that it will receive fair market value for the sale or lease of the assets as indicated in paragraph (5)(c) or, if leased at less than fair market value, the governing board provided a detailed explanation of how the best interests of the affected community are served by the acceptance of less than fair market value for the lease of the hospital or health care system.
(g) The acquiring entity has made an enforceable commitment that programs and services and quality health care will continue to be provided to all residents of the affected community, particularly to the indigent, the uninsured, and the underinsured.
(h) The governing board disclosed whether the sale or lease will result in a reduction or elimination of ad valorem or other taxes used to support the hospital.
(12) Any interested party to the action has the right to seek judicial review of the decision in the appellate district where the hospital is located or in the First District Court of Appeal pursuant to s. 120.68.
(a) All proceedings shall be instituted by filing a notice of appeal in accordance with the Florida Rules of Appellate Procedure within 30 days after the date of the final order.
(b) In such judicial review, the appellate court shall affirm the decision of the Secretary of Health Care Administration, unless the decision by the Secretary of Health Care Administration is shown to be clearly erroneous.
(13) All costs shall be paid by the governing board, unless an interested party contests the action, in which case the court may assign costs equitably to the parties.
(14) If any provision of subsection (5), subsection (6), or subsection (7) is not followed, the contract for sale or lease is voidable by any party to the contract. If any member of the governing board negligently or willfully violates subsection (5), subsection (6), or subsection (7), as determined by the Commission on Ethics after receipt of a sworn complaint pursuant to s. 112.322, the member is subject to a penalty, as determined by the Commission on Ethics pursuant to s. 112.317.
(15) If a county, district, or municipal hospital is sold, any and all special district tax authority associated with the hospital subject to the sale shall cease on the effective date of the closing date of the sale. Any special law inconsistent with this subsection is superseded by this act.
(16) If a county, district, or municipal hospital is sold or leased, the governing board shall:
(a) Deposit 50 percent of the net proceeds of the sale or lease into a health care economic development trust fund, which shall be under the control of the county commission of the county in which the property is located, if the hospital is a county hospital or district hospital whose geographic boundaries extend beyond a single municipality, or, if the hospital is a municipal hospital or district hospital whose geographic boundaries lie entirely within a single municipality, under the control of the city or municipal government in which the hospital is located. The use and distribution of the funds shall be at the discretion of a majority of the county commission if the hospital is a county hospital or district hospital whose geographic boundaries extend beyond a single municipality, or, if the hospital is a municipal hospital or district hospital whose geographic boundaries lie entirely within a single municipality, at the discretion of a majority of the members of the municipal government. The members of the county commission or the municipal government, depending on the type of hospital being sold, shall serve as trustees of the trust fund. The net proceeds in the health care economic development trust fund shall be distributed, in consultation with the Department of Commerce, to promote job creation in the health care sector of the economy through new or expanded health care business development, new or expanded health care services, or new or expanded health care education programs or commercialization of health care research within the affected community; and
(b) Appropriate 50 percent of the net proceeds of the sale or lease for funding the delivery of indigent care, including, but not limited to, primary care, physician specialty care, out-patient care, in-patient care, and behavioral health, to hospitals within the boundaries of the district with consideration given to the levels of indigent care provided.

For the purposes of this subsection, the term “net proceeds” means the sale price after payment of all district debts and obligations.

(17) If a county, district, or municipal hospital or health care system is sold or leased to a for-profit corporation or other business entity subject to local taxation, the resulting county and municipal ad valorem tax revenue from the formerly tax-exempt property shall be distributed by the county commission of the county in which the property is located, if the hospital is a county hospital or district hospital whose geographic boundaries extend beyond a single municipality, or, if the hospital is a municipal hospital or district hospital whose geographic boundaries lie entirely within a single municipality, such ad valorem tax revenues shall be distributed by the municipal government. The distribution of such ad valorem tax revenues shall be made in consultation with the Department of Commerce, for purposes set forth in subsection (16).
(18) If a hospital operated by a for-profit or not-for-profit Florida entity receives annually more than $100,000 in revenues from the county, district, or municipality that owns the hospital, the Florida entity must be accountable to the county, district, or municipality with respect to the manner in which the funds are expended by either:
(a) Having the revenues subject to annual appropriations by the county, district, or municipality; or
(b) Where there is a contract to provide revenues to the hospital, the term of which is longer than 12 months, the governing board of the county, district, or municipality must be able to modify the contract upon 12 months notice to the hospital.

A not-for-profit entity that is subject to this subsection and does not currently comply with the accountability requirements in this subsection shall have 12 months after the effective date of this act to modify any contracts with the county, district, or municipality in a manner that is consistent with this subsection.

(19) Unless otherwise expressly stated in the lease documents, the transaction involving the sale or lease of a hospital may not be construed as:
(a) A transfer of a governmental function from the county, district, or municipality to the private purchaser or lessee;
(b) Constituting a financial interest of the public lessor in the private lessee; or
(c) Making a private lessee an integral part of the public lessor’s decisionmaking process.
(20) The lessee of a hospital, under this section or any special act of the Legislature, operating under a lease may not be construed to be “acting on behalf of” the lessor as that term is used in statute, unless the lease document expressly provides to the contrary.
(21)(a) If, whenever the sale of a public hospital by a public agency to a private entity pursuant to this section or pursuant to a special act of the Legislature reflects that:
1. The private entity purchaser acquires 100 percent ownership in the hospital enterprise;
2. The private entity purchases the physical plant of the hospital facility and has complete responsibility for the operation and maintenance of the facility, regardless of ownership of the underlying real property;
3. The public agency seller retains no control over decisionmaking or policymaking for the hospital;
4. The private entity purchaser receives no funding from the public agency seller other than by contract for services rendered to patients for whom the public agency seller has the responsibility to pay for hospital or medical care;
5. The public agency seller makes no substantial investment in or loans to the private entity;
6. The private entity purchaser was not created by the public entity seller; and
7. The private entity purchaser operates primarily for its own financial interests and not primarily for the interests of the public agency,

such a sale shall be considered a complete sale of the public agency’s interest in the hospital or health care system.

(b) A complete sale of a hospital or health care system as described in this subsection may not be construed as:
1. A transfer of a governmental function from the county, district, or municipality to the private entity purchaser;
2. Constituting a financial interest of the public agency in the private entity purchaser;
3. Making the private entity purchaser an “agency” as that term is used in statutes;
4. Making the private entity purchaser an integral part of the public agency’s decisionmaking process; or
5. Indicating that the private entity purchaser is “acting on behalf of a public agency” as that term is used in statute.
(22) If the governing board elects to sell or lease the physical property of a county, district, or municipal hospital or health care system and such property generated less than 20 percent of the hospital’s net revenue within the hospital’s or health care system’s most recent fiscal year, the sale or lease of such property is exempt from the requirements under subsections (6)-(17). However, the governing board shall publicly advertise the meeting at which the proposed sale or lease of such property will be considered by the governing board of the hospital in accordance with s. 286.0105 or publicly advertise the offer to accept proposals in accordance with s. 255.0525 and receive proposals from all qualified purchasers and lessees. The sale or lease of the property must be for fair market value, or, if a lease is for less than fair market value, the lease must be in the best interest of the affected community.
(23) A county, district, or municipal hospital or health care system that is under lease as of the effective date of this act is not subject to subsections (5)-(17) as long as that lease remains in effect in accordance with the terms of the lease or such lease is modified, extended, or renewed. However, such hospital or health care system becomes subject to the provisions of this act upon:
(a) Termination of the lease, unless the lease termination is the direct result of a new lease involving a partnership, transaction, or contract in which both the existing lessor and lessee agree to the new lease between the lessor and another mutually agreed upon entity;
(b) Notification provided to the lessee of a planned termination of the lease in accordance with the lease terms, unless the notification of lease termination is the direct result of a new lease involving a partnership, transaction, or contract in which both the existing lessor and lessee agree to the new lease between the lessor and another mutually agreed upon entity;
(c) Notification to the lessee that upon termination of the lease the lessor plans to seek potential new lessees or buyers; or
(d) Notification to the lessee that the lessor plans to resume operation of the hospital or health care system at the termination of the lease.

Any such hospital or health care system may not thereafter be sold, leased to another lessee, or operated by the owner without first complying with this section.

(24) A county, district, or municipal hospital or health care system that has executed a letter of intent to sell or lease the hospital or health care system accepted at a properly noticed public meeting, and whose governing board has voted to approve the letter of intent before December 31, 2011, is not subject to subsections (6)-(17) as long as the final closing of the sale or lease transaction pursuant to the letter of intent occurs before December 31, 2012.
(25) Notwithstanding subsection (24), a county, district, or municipal hospital or health care system that has issued a request for proposals for the sale or lease of a hospital or health care system on or before February 1, 2012, in order to receive proposals from not-for-profit or for-profit qualified purchasers or lessees, is not subject to subsections (5)-(17) unless such request for proposals does not directly result in a sale or lease of the hospital or health care system to a qualified purchaser or lessee on or before December 31, 2012.
History.s. 3, ch. 82-147; s. 1, ch. 83-158; s. 1, ch. 84-98; s. 6, ch. 87-92; s. 1, ch. 96-304; s. 6, ch. 99-356; s. 1, ch. 2006-170; s. 1, ch. 2012-66; s. 14, ch. 2013-14; s. 19, ch. 2024-6.

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Amendments to 155.40


Annotations, Discussions, Cases:

Cases Citing Statute 155.40

Total Results: 22  |  Sort by: Relevance  |  Newest First

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Mem'l Hosp.-west v. News-journal, 729 So. 2d 373 (Fla. 1999).

Cited 32 times | Published | Supreme Court of Florida | 24 Fla. L. Weekly Supp. 52, 27 Media L. Rep. (BNA) 1353, 1999 Fla. LEXIS 48, 1999 WL 20562

...public records) and (b) (access to meetings of public agencies) [1] to a private nonprofit corporation's operation of hospital facilities transferred to it by the West Volusia Hospital Authority (Authority), a hospital taxing authority, pursuant to section 155.40, *376 Florida Statutes (1993)....
...However, according to the Attorney General, special taxing districts were required to obtain the legislature's permission to lease their hospital facilities. Op. Att'y Gen. Fla. 80-18 (1980). Following the 1980 opinion of the Attorney General, the 1982 Legislature enacted section 155.40, Florida Statutes (1983), which by general law authorized independent special taxing districts to enter into leases and operating agreements for existing hospital facilities with not-for-profit Florida corporations. [7] In 1994, the board of the West Volusia Hospital Authority decided to enter into a lease and operating agreement (Agreement) as authorized by section 155.40, Florida Statutes (1993)....
...Therefore, in performing pursuant to the Agreement transferring the authorized function, West Volusia, Inc. was "acting on behalf of" the Authority. West Volusia, Inc. argues that requiring it to provide public records access would frustrate the legislative purpose of section 155.40, Florida Statutes (1993). However, we note that section 155.40 contains no express exemption from public records access....
...chapter 98-330, sections 1-4, Laws of Florida, codified at section 395.3036, Florida Statutes (Supp.1998), which became effective May 30, 1998. [17] By express provision, *384 this Act was made applicable to existing leases entered into pursuant to section 155.40, Florida Statutes....
...Otherwise, nonprofit hospitals might not be able to remain open to the citizens of their respective communities or to provide indigent care in those communities. Accordingly, in 1982, the legislature provided nonprofit hospitals with the authority to enter into leases with other not-for-profit corporations by enacting section 155.40, which provided, in part: In order that citizens and residents of the state may receive quality health care, any county, district, or municipal hospital organized and existing under the laws of this state, acting by and through its gov...
...Florida corporations for the purpose of operating and managing such hospital and any or all of its facilities of whatsoever kind and nature; to enter into leases with a nonprofit Florida corporation for the operating of such facilities so existing. § 155.40(1), Fla....
...I of the State Constitution, and the meetings of the governing board of a private corporation are exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution when the public lessor complies with the public finance accountability provisions of s. 155.40(5) with respect to the transfer of any public funds to the private lessee and when the private lessee meets at least three of the five following criteria: (1) The public lessor that owns the public hospital or other public health care facil...
...of the limitations contained in the State Constitution. For years, the Legislature has approved and encouraged these leases, first through special acts that it has adopted authorizing the lease agreements and, more recently, through the adoption of section 155.40, Florida Statutes, which provides for the conversion of public hospital facilities to private operation by lease, as a means to provide public entities with the necessary flexibility to use these public assets in a manner that best serves the interests of the public....
...ted purpose of the law." Consistent with that provision, this statute was written to comply with the specificity requirement and states with sufficient specificity the reasons for the exemption. It reflects the need for the leasing scheme created in section 155.40 and explains in its intent language, in support of section 395.3036, a clear and justifiable basis for the exemption....
...collegial public body of a county, municipality, school district, or special district, at which official acts are to be taken or at which public business of such body is to be transacted or discussed, shall be open and noticed to the public.... [2] Section 155.40, Florida Statutes (1993), provides in relevant part: (1) In order that citizens and residents of the state may receive quality health care, any county, district, or municipal hospital organized and existing under the laws of this state...
...r to not-for-profit Florida corporations and to enter into leases or other contracts with for-profit or not-for-profit Florida corporations for the purpose of operating and managing such hospitals. Ch. 96-304, § 1 at 1377, Laws of Fla. (codified at § 155.40, Fla....
...m the requirements of subsection (a) ... provided that such law shall state with specificity the public necessity justifying the exemption and shall be no broader than necessary to accomplish the stated purpose of the law. [15] The 1996 amendment to section 155.40, Florida Statutes, authorizes special taxing districts to sell their hospitals for "fair market value." § 155.40(4)(b), Fla....
...I of the State Constitution, and the meetings of the governing board of a private corporation are exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution when the public lessor complies with the public finance accountability provisions of s. 155.40(5) with respect to the transfer of any public funds to the private lessee and when the private lessee meets at least three of the five following criteria: (1) The public lessor that owns the public hospital or other public health care facil...
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News-Journal Corp. v. Mem'l Hosp., 695 So. 2d 418 (Fla. 5th DCA 1997).

Cited 22 times | Published | Florida 5th District Court of Appeal | 25 Media L. Rep. (BNA) 1987, 1997 Fla. App. LEXIS 5397, 1997 WL 253029

...supreme court had in mind in listing this factor. Certainly, the Authority played a role in Lessee's formation because it required its formation in order to transact this venture. In considering whether to lease, the Authority chose to proceed under Section 155.40, Florida Statutes, which required the formation of a not-for-profit corporation....
...See Wood v. Marston, 442 So.2d 934 (Fla.1983). REVERSED and REMANDED for further action consistent with this opinion. W. SHARP, HARRIS and GRIFFIN, JJ., concur. NOTES [1] Section 5, chapter 57-2085, Laws of Florida (1957). [2] Lessee urges that since section 155.40 was designed to foster competition, it implicitly permits agreements that are designed to avoid public record and public meeting requirements....
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Palm Beach v. Everglades Mem'l Hosp., 658 So. 2d 577 (Fla. 4th DCA 1995).

Cited 7 times | Published | Florida 4th District Court of Appeal | 1995 WL 390127

...al), a public hospital located in Pahokee, Florida. Everglades Hospital was previously operated by the Northwestern Palm Beach County Hospital Board, a public hospital taxing district (Northwestern District). In 1982, the Florida legislature enacted section 155.40, Florida Statutes, authorizing public hospital taxing districts throughout the state to reorganize as not-for-profit Florida corporations. This statute also allowed the hospitals to enter into contracts and/or leases with other not-for-profit corporations for the purpose of operating hospital facilities. In 1986, the Northwestern District, acting pursuant to section 155.40, "reorganized" the Everglades Hospital....
...ital districts. These hospital districts were then converted into subdistricts. The legislature, in chapter 87-450, which created the Palm Beach County Health Care District, also recognized the authority of the subdistricts to reorganize pursuant to section 155.40, Florida Statutes, and specifically provided that the Palm Beach District's interests were subject to any agreements and obligations approved and entered into by the pre-existing district....
...The district thereafter filed a counterclaim seeking declaratory relief. The trial court, in granting, in part, both parties' motions for summary judgment, determined that the reorganization, the lease, and the financial support agreement were valid as authorized by section 155.40 except for the option to purchase provision contained in the lease....
...With respect to the option to purchase provision, the court held that its invalidity did not render the balance of the lease unenforceable because under the terms of the lease, it was severable and the invalidity of one provision did not affect the invalidity of the balance. Section 155.40, Florida Statutes, provides, in relevant part: Reorganization of county, district, or municipal hospital as a not-for-profit corporation....
...he dissolution of such not-for-profit corporation; * * * * * * (3) The articles of incorporation of such not-for-profit corporation may provide for the abolishment of the existing governing board of the hospital and the establishment of a new board. § 155.40, Fla....
...t corporation goes beyond that authorized by the statute. See Jess Parrish Memorial Hosp., Inc. v. City of Titusville, 506 So.2d 22 (Fla. 5th DCA 1987). In Jess Parrish, a transfer of a hospital to a not-for-profit corporation under the authority of section 155.40 was held void as exceeding the authority granted under the section, as that statute did not authorize the divestment of title to land by the district....
...We do note, however, that in Jess Parrish, although the deed was rescinded and title transferred back to the district, the court did not hold the balance of the reorganization void. Palm Beach District asserts that the lease and financial support agreement go beyond the authorization of section 155.40 because this reorganization was effectively, although not in name, a dissolution of the sub-district itself....
...on under the statutory scheme. The lease and agreement fail to reserve sufficient control in the public authority. See O'Neill v. Burns, 198 So.2d 1 (Fla. 1967). The lease and financial support agreement constitute an unconstitutional application of section 155.40 by placing the hospital effectively beyond public control....
...by not-for-profit corporations, and authorizes leases and agreements for the operation of a hospital, it does not authorize the delegating of district powers and duties, and, the extent of divestment of public power to the extent provided here. See § 155.40, Fla. Stat. (1993). Although section 155.40 provides that a district may reorganize a hospital entity for the purpose of operating and managing the hospital, it does not authorize relinquishing to an independent private board effective unfettered control over public property, po...
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Cent. Florida Clinic for Rehab., Inc. v. Citrus Cnty. Hosp. Bd., 738 F. Supp. 459 (M.D. Fla. 1989).

Cited 3 times | Published | District Court, M.D. Florida | 1989 U.S. Dist. LEXIS 17036, 1989 WL 206594

...nd regulations concerning the hospitals and medical nursing and convalescent homes in Citrus County. The second statute cited by plaintiff as evidence that the Florida Legislature did not contemplate anticompetitive actions by the Board is Fla.Stat. § 155.40....
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Baker Cnty. Press, Inc. v. Baker Cnty. Med. Serv., Inc., 870 So. 2d 189 (Fla. 1st DCA 2004).

Cited 2 times | Published | Florida 1st District Court of Appeal | 32 Media L. Rep. (BNA) 1939, 2004 Fla. App. LEXIS 2673, 2004 WL 393189

...24(a), Art I of the State Constitution, and the meetings of the governing board of a private corporation are exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution when the public lessor complies with the public finance accountability provisions of s. 155.40(5) with respect to the transfer of any public funds to the private lessee and when the private lessee meets at least three of the five following criteria: ......
...of the limitations contained in the State Constitution. For years, the Legislature has approved and encouraged these leases, first through special acts that it has adopted authorizing the lease agreements and, more recently, through the adoption of section 155.40, Florida Statutes, which provides for the conversion of public hospital facilities to private operation by lease, as a means to provide public entities with the necessary flexibility to use these public assets in a manner that best serves the interests of the public....
...305, 19 So.2d 876, 882 (1944)); Medina v. Gulf Coast Linen Servs., 825 So.2d 1018, 1020 (Fla. 1st DCA 2002)(same). Because section 395.3036 provides an exemption from the Public Records Act and Sunshine Law, we affirm the trial court's judgment in favor of appellee. III. Section 155.40 Exemption In pertinent part, section 155.40 states: (6) Unless otherwise expressly stated in the lease documents, the transaction involving the sale or lease of a hospital shall not be construed as: (a) A transfer of a governmental function from the county, district, or municipa...
...(7) The lessee of a hospital, pursuant to this section or any special act of the Legislature, operating under a lease shall not be construed to be "acting on behalf of" the lessor as that term is used in statute, unless the lease document expressly provides to the contrary. Section 155.40(6)-(7), Florida Statutes (2002)....
...Accordingly, the requirements for exemptions under article I, § 24(c) of the Florida Constitution must be complied with. In contrast to the enactment of section 395.3036, there are no legislative findings regarding the public necessity for the exemption in section 155.40....
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Mem'l Hosp.-west Volusia v. News-journal, 927 So. 2d 961 (Fla. 5th DCA 2006).

Cited 2 times | Published | Florida 5th District Court of Appeal | 2006 WL 735965

...The legislature found the maintenance of such hospitals was a "public purpose" and was "necessary for the preservation of the public health and for the public use and for the welfare of said district and inhabitants thereof." Id.; see also Memorial I, 729 So.2d at 377. In 1982, the legislature enacted section 155.40, Florida Statutes (1983), which authorized independent special taxing districts such as the Authority to enter into leases and operating agreements for existing hospital facilities with not-for-profit Florida corporations....
...82-383, § 1, Laws of Fla. Pursuant to these provisions, the Authority gives approximately 75 percent of its tax revenue to at least one other hospital and several clinics and other health care facilities in the district. Furthermore, both the enabling act and section 155.40(4)(b), Florida Statutes, authorize the Authority to sell a hospital....
...Inc., not by, or at the behest of, the Authority. Accordingly, the Authority had no role in the creation of Memorial other than agreeing to the sale of the hospital and consenting to amendment of Memorial's articles of incorporation, as required by section 155.40(2)(a), Florida Statutes....
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Ago (Fla. Att'y Gen. 1995).

Published | Florida Attorney General Reports

private corporation and the public agency.4 Section 155.40, Florida Statutes, provides in part that any
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Ago (Fla. Att'y Gen. 2002).

Published | Florida Attorney General Reports

day-to-day operations."12 I would note that section 155.40, Florida Statutes, authorizing the sale or
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Ago (Fla. Att'y Gen. 1996).

Published | Florida Attorney General Reports

property. In 1984, the district, pursuant to section 155.40, Florida Statutes, leased all of the facilities
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Ago (Fla. Att'y Gen. 1997).

Published | Florida Attorney General Reports

lease agreement pursuant to the provisions of section 155.40, Florida Statutes (1996 Supplement), under
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Ago (Fla. Att'y Gen. 1998).

Published | Florida Attorney General Reports

the following question: Are the provisions of section 155.40, Florida Statutes, applicable to the West Volusia
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Citrus Cnty. Hosp. Bd., etc. v. Citrus Mem'l Health Found., Inc., etc., 150 So. 3d 1102 (Fla. 2014).

Published | Supreme Court of Florida | 39 Fla. L. Weekly Supp. 697, 2014 Fla. LEXIS 3322, 2014 WL 5856370

...Const. I. BACKGROUND In 1949, the Florida Legislature created the Citrus County Hospital Board, an independent special district charged with operating a public hospital in Citrus County, Florida. In 1990, the Hospital Board utilized section 155.40, Florida Statutes, which was enacted in 1982 and authorizes county hospital districts to lease their hospitals to specified Florida business entities so that public hospitals may more effectively compete with private hospitals....
...Section 16 of the charter includes fifteen subsections that, for the first time, specifically address the Hospital Board’s relationship with the Foundation (or any future lessee) and that are “in addition to the requirements for any [] lease set forth in section 155.40.” Ch....
...1985) (applying the contract clause to a corporation). Although Florida law is clear that corporations, like individuals, are entitled to protection under the contract clause, this Court has not addressed whether the contract clause protects a corporation that has contracted with a hospital district under section 155.40, Florida Statutes, to operate and manage a public hospital....
...Instead, the Foundation was incorporated as a not-for-profit corporation under chapter 617, Florida Statutes, just as any other Florida not-for-profit corporation would be, for the specific purpose of taking control of the public hospital—by contract—as authorized by section 155.40....
...“was used by the [Hospital] Board for the express purpose of avoiding statutory and constitutional limitations which would pertain to the [Hospital] Board as a public entity.” Citrus Mem’l, 108 So. 3d at 677. Given that the very purpose of section 155.40 is to contractually transfer control of public hospitals to entities like the Foundation, we refuse to apply O’Malley in a way that would effectively render the contracts used to accomplish this purpose meaningless....
...2011-256, §§ 3(16)(2), (5), (6), at 59, Laws of Fla. - 11 - accountability and financial responsibility measures that are mentioned nowhere in the parties’ agreements and that are “in addition to the requirements for any [] lease set forth in section 155.40.”6 Ch....
...In other words, as the First District cogently stated, the special law “is a rewrite of the parties’ contractual agreements and the imposition of further obligations on the Foundation, while permitting the [Hospital] Board’s privatization of hospital management functions as [authorized by section 155.40].” Citrus Mem’l, 108 So. 3d at 678. In light of this impairment, we hold that section 16 of the Hospital Board’s charter as enacted in section 3 of the special law is unconstitutional as applied to the Foundation’s contracts....
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Ago (Fla. Att'y Gen. 1992).

Published | Florida Attorney General Reports

...lease, operate, and maintain any hospital or clinic necessary for the use of the people of Williston. Any such hospital or clinic is for the public good and for the use of the people of the city and is specifically found to have a public purpose. 4 Section 155.40 (1), F.S., in pertinent part, provides: In order that citizens and residents of the state may receive quality health care, any county, district, or municipal hospital organized and existing under the laws of this state, acting by and t...
...oration. In AGO 84-87, this office considered whether a hospital district was authorized to lease district facilities to a private corporation for purposes of operating, managing, and maintaining the hospital facilities. Based upon the provisions in s. 155.40 , F.S., 5 it was concluded that "[w]ith respect to the authority of the district board to lease district facilities to a private for profit corporation, the rule expressio unius est exclusio alterius compels the conclusion that these statutory provisions do not authorize the board to enter into a lease with a private for profit corporation . . . ." 6 Likewise in AGO 85-31, this office concluded that a county hospital which had reorganized as a not-for-profit hospital pursuant to s. 155.40 , F.S., was not authorized to enter into a management agreement with, or lease the hospital to, a for-profit corporation or to sell the personal property of the hospital to such for-profit corporation....
...corporation and enter into contracts with a not-for-profit Florida corporation for the purpose of operating and managing the hospital or to enter into a lease with a not-for-profit Florida corporation for the operation of such facilities pursuant to s. 155.40 , F.S....
...1 Section 11.01, Art. XI, Ch. 78-624, Laws of Florida. 2 Sections 11.03 and 11.05, Art. XI, Ch. 78-624, Laws of Florida. 3 Section 11.05, Art. XI, Ch. 78-624, Laws of Florida. 4 Section 11.06, Art. XI, Ch. 78-624, Laws of Florida. 5 In addition to s. 155.40 (1), F.S., s. 155.40 (2), F.S., provides: Any such lease, contract, or agreement made pursuant hereto shall: (a) Provide that the articles of incorporation of such not-for-profit corporation be subject to the approval of the board of directors or board of trust...
...8 Cf ., Jess Parrish Memorial Hospital, Inc. v. City of Titusville, 506 So.2d 22 (5 D.C.A. Fla., 1987), in which the court held that the divestment of title to the district's land by the hospital district to the not-for-profit corporation was a voidable act, in that s. 155.40 , F.S., does not permit the divestment of the title to the land by the district.
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Ago (Fla. Att'y Gen. 2003).

Published | Florida Attorney General Reports

...3 The statute provides: "The records of a private corporation that leases a public hospital . . are confidential and exempt from the provisions of s. 119.07 (1) and s. 24(a), Art. I of the State Constitution . . . when the public lessor complies with the public finance accountability provisions of s. 155.40 (5) with respect to the transfer of any public funds to the private lessee and when the private lessee meets at least three of the five following criteria: (1) The public lessor that owns the public hospital ....
...1st DCA 1983), pet. for rev. den., 436 So.2d 101 (Fla. 1983); Terry v. State, 467 So.2d 761 (Fla. 4th DCA 1985). pet. for rev. den., 476 So.2d 675 (Fla. 1985). 16 To qualify for the exemption in section 395.3036 , Florida Statutes, the public lessor must comply with section 155.40 (5), Fla....
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Ago (Fla. Att'y Gen. 2007).

Published | Florida Attorney General Reports

leased to Shands at Lake Shore, Inc. (Shands). Section 155.40(1), Florida Statutes, permits the Authority
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Indian River Cnty. Hosp. Dist. v. Indian River Mem'l Hosp., Inc., 766 So. 2d 233 (Fla. 4th DCA 2000).

Published | Florida 4th District Court of Appeal | 2000 Fla. App. LEXIS 907, 2000 WL 121794

...In the early 1980s, the Florida Legislature authorized public hospital taxing districts to reorganize as nonprofit corporations or enter into contracts with nonprofit corporations for the purpose of operating hospital facilities. See Ch. 82-147 §§ 8-4 (codified as amended at § 155.40, Fla....
...a Legislature. The District contends its lease violates public policy, but it is actually in furtherance of public policy. Viewing the history of the legislation in this area in context elucidates this point. In 1982, the Florida Legislature enacted section 155.40, which authorized the leasing of public hospitals to nonprofit entities to allow them to compete with for-profit hospitals while providing citizens with quality health care. See Ch. 82-147 §§ 3-4, Laws of Fla. (codified as later amended at § 155.40, Fla. Stat. (1999)); Memorial Hosp.-W. Volusia, Inc. v. News-Journal Corp., 729 So.2d 373, 385 (Fla.1999)(Overton, J., dissenting). While allowing public hospital districts to lease their facilities, section 155.40(2) required the hospital districts to retain some control over the managing corporation. To that end, section 155.40(2) required the lease to provide that the managing corporation’s articles of incorporation be subject to the hospital district’s approval; to require that the managing corporation maintain section 501(c)(3) tax-exempt status; to pr...
...the orderly transition of the hospital facilities to the managing corporation; and to provide for the return of the hospital facilities to the hospital district at the end of the lease. See Ch. 82-147 § 4, Laws of Fla. (codified as later amended at § 155.40(2)(a)-(d), Fla. Stat. (1999)). In 1984, section 155.40(2) was amended to require that the lease also provide for the continued treatment of indigent patients. See Ch. 84-98 § 1, Laws of Fla. (codified as later amended at § 155.40(2)(e), Fla. Stat. (1999)). Section 155.40 was first criticized for its lack of public accountability and oversight in Jess Parrish Memorial Hospital, Inc. v. City of Titusville, 506 So.2d 22 (Fla. 5th DCA 1987)(hereinafter “Jess Parrish”). See Fla. S. Comm. on Health Care, CS for SB 2392 (1996) Staff Analysis 4 (Apr. 2, 1996). Although not at issue in that case, the trial court declared section 155.40 unconstitutional, finding it “unlawfully delegates legislative powers to a District Board without sufficient guidelines, it is void for vagueness, it allows the transfer of public property contrary to public policy and referendum, and it allows the use of public assets in violation of Article VII Section 10, Florida Constitution.” Jess *236 Parrish, 506 So.2d at 24 . The Fifth District declined to rule on the constitutionality of section 155.40, affirming the trial court’s order on other grounds. See id. In 1995, section 155.40 again came under fire in Palm Beach County Health Care District v....
...district has no ultimate influence.” Id. at 580 . Noting that the hospital district was “powerless to respond to the public interest” and was “a mere funding mechanism” for the managing corporation, this Court found that the lease violated section 155.40 and thus invalidated the lease. Id. After the. Everglades Memorial decision, many public hospitals that had previously entered into leases under section 155.40 became concerned that their lease or reorganization agreement was invalid....
...Burns, 198 So.2d 1 (Fla.1967), cited in Everglades Memorial, 658 So.2d at 580 . How much control Everglades Memorial required was uncertain. To respond to these concerns — or, more specifically, to respond to the Jess Parrish and Everglades Memorial opinions — the Florida Legislature amended section 155.40. First, the legislature amended section 155.40 to provide for the sale of publicly owned hospitals as well as for the lease of hospital facilities....
...appropriations, or in the alternative, if there is a contract for services longer than twelve months, the hospital district must be able to modify the contract upon twelve months notice to the hospital. See Ch. 96-304 § 1, Laws of Fla. (codified at § 155.40(5)(a)-(b), Fla....
...Fla. H.R. Comm, on Health Care, CS for HB 965 (1996) Staff Analysis 1 (May 17, 1996). Legislative history specifically states that subsection (5) “shall not be interpreted to impose additional requirements beyond the requirements created under subsection 155.40(2).” See Fla....
...it or not-for-profit Florida corporation, the composition of the board of directors of any Florida corporation, or *237 the manner in which control of the hospital is transferred to the Florida corporation. Ch. 96-304 § 2, Laws of Fla. (codified at § 155.40(3), Fla. Stat. (1999)). Thus, subsection (3) was intended to allay the fears of parties to existing management agreements that if their agreement complied with section 155.40(2) prior to the addition of subsection (5), then the lease agreement would remain valid....
...ts to. the Sunshine Law and the Public Records Act. See id. at 384 . The supreme court rejected the argument that requiring the private lessee corporation to provide public records access and meeting access would frustrate the legislature purpose of section 155.40. See id. at 380 . The supreme court noted that section 155.40 did not contain an express exemption from public records' access and that it would not imply an exemption....
...the law was no broader than necessary, would an exemption from public records access be available. See id. at 380 , 388 n. 14. In response to the Florida Supreme Court’s decision in Memorial Hospital-West Volusia , the Florida Legislature amended section 155.40, to specifically- provide that unless otherwise expressly stated in the ■ lease documents, the • transaction *238 involving the lease of a hospital shall not be construed as a transfer of a government function to the private lessee...
...public hospital district having a financial interest in the private lessee corporation, or as making the private lessee corporation an integral part of the hospital district’s decision-making process. See Ch. 99-356 § 6, Laws of Fla. (codified at § 155.40(6), Fla. Stat. (1999)). The legislature also amended section 155.40 to provide that any private lessee corporation operating under a lease for the management of a hospital district shall not be construed as “acting on behalf of’ the hospital district. See Ch. 99-356 § 6, Laws of Fla. (codified at § 155.40(7), Fla....
...is required to operate a full-service hospital providing a level and variety of major services at least equal to those being offered at the time of the lease, or obtain permission from the District to discontinue such a service. Given these controls, the lease in this case complies with section 155.40 and Everglades Memorial....
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Citrus Mem'l Health Found., Inc. v. Citrus Cnty. Hosp. Bd., 108 So. 3d 675 (Fla. 1st DCA 2013).

Published | Florida 1st District Court of Appeal | 2013 WL 535769, 2013 Fla. App. LEXIS 2262

other corporations involved in leases under section 155.40, the specific relationship the Foundation has
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Ago (Fla. Att'y Gen. 2006).

Published | Florida Attorney General Reports

reorganized its operations under the provisions of section 155.40, Florida Statutes, and formed the not-for-profit
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Ago (Fla. Att'y Gen. 1989).

Published | Florida Attorney General Reports

hospital authority within the requirements of section 155.40(2), Florida Statutes.? 2. Do the provisions
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Jess Parrish Mem'l Hosp., Inc. v. City of Titusville, 506 So. 2d 22 (Fla. Dist. Ct. App. 1987).

Published | District Court of Appeal of Florida | 12 Fla. L. Weekly 983, 1987 Fla. App. LEXIS 7632

...In 1953 the legislature created a North Brevard County Hospital District and gave it authority to own and operate a hospital and to tax persons within its district. Chapter 28924, Laws of Florida (1953). Later the legislature gave district hospitals the authority to reorganize and act as nonprofit corporations. § 155.40, Fla.Stat....
...de”, presumably more efficient, assistance in the running of the business of a hospital. Jess Parrish Memorial Hospital, Inc., appellant, was formed as a Florida not-for-profit corporation by the directors of the hospital district pursuant to this section 155.40....
...hospital district and paid for by the taxpayers of the district. The trial judge agreed with appel-lees and declared the conveyance by deed of the property of the district hospital to the corporation to be unlawful; not within the authority given by section 155.40. The judge also ruled section 155.40 unconstitutional....
...The substance of his judgment says: 1. That the Asset Transfer Agreement, Deed and Bill of Sale dated October 31, 1984 between Defendants, NORTH BRE-VARD COUNTY HOSPITAL DISTRICT and JESS PARRISH MEMORIAL HOSPITAL, INC. exceed the authority authorized by Chapter 155.40 Florida Statutes (1984) and are hereby declared void ab initio. 2. That the Asset Transfer Agreement dated October 31, 1984 between NORTH BREVARD COUNTY HOSPITAL DISTRICT and JESS PARRISH MEMORIAL HOSPITAL, INC. did not comply with Chapter 155.40 Florida Statutes (1984) and is hereby declared void ab initio. 3. That the Asset Transfer Agreement, Deed and Bill of Sale are void because NORTH BREVARD COUNTY HOSPITAL DISTRICT, Special Act does not authorize said transfer and the Defendant’s Special Act prevails over Chapter 155.40 Florida Statutes (1984)....
...Judgment. ****** THIS COURT HAS BASED ITS RULING ON NONCONSTITUTIONAL GROUNDS. HOWEVER, TO THE EXTENT THAT AN APPELLATE COURT MIGHT REVERSE THIS COURT’S OTHER RULINGS CONTAINED IN THIS JUDGMENT, THIS COURT FURTHER ORDERS AND ADJUDGES: That Chapter 155.40 Florida Statutes as applied to this transaction is hereby declared unconstitutional because it unlawfully delegates legislative powers to a District Board without sufficient guidelines, it is void for vagueness, it allows the transfer of publi...
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Ago (Fla. Att'y Gen. 1985).

Published | Florida Attorney General Reports

activities through wholly-owned subsidiaries. Section 155.40, F.S. (1984 Supp.), in pertinent part, provides:
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Ago (Fla. Att'y Gen. 2005).

Published | Florida Attorney General Reports

reorganized its operations under the provisions of section 155.40, Florida Statutes, and formed the Bert Fish

This Florida statute resource is curated by Graham W. Syfert, Esq., a Jacksonville, Florida personal injury and workers' compensation attorney. For legal consultation, call 904-383-7448.