HB 1253

1	A bill to be entitled
2	An act relating to continuing care facilities; amending s.
3	651.011, F.S.; revising definitions relating to ch. 651,
4	F.S.; amending s. 651.012, F.S.; conforming cross-
5	references; amending s. 651.015, F.S.; increasing the fees
6	for a certificate of authority and a provisional
7	certificate of authority to operate a continuing care
8	facility; amending s. 651.022, F.S.; increasing the
9	threshold amount for businesses that must be identified in
10	an application for a provisional certificate of authority;
11	adding wait-list contracts to the forms that must be
12	submitted with the application; amending s. 651.0235,
13	F.S.; conforming provisions to changes made by the act;
14	amending s. 651.026, F.S.; revising the financial
15	information that must be submitted annually for each
16	certified facility; requiring the annual report to reflect
17	any changes in accounting principle terminology; amending
18	s. 651.033, F.S.; authorizing a provider to assess a
19	separate, nonrefundable fee for processing an application
20	for continuing care; amending s. 651.035, F.S.; clarifying
21	that the amounts maintained in escrow relating to taxes
22	refer to property taxes; deleting an obsolete provision;
23	amending s. 651.055, F.S.; providing that a resident is
24	deemed to be occupying a unit upon the payment of certain
25	fees; providing a timeframe for rescinding a contract;
26	increasing the application processing fee; conforming
27	provisions to changes made by the act; amending s.
28	651.081, F.S.; renaming residents' organizations as
29	residents' councils; requiring the provider to provide a
30	newly elected chair of a council with a copy of ch. 651,
31	F.S., and related rules; amending s. 651.083, F.S.;
32	clarifying that a resident has a right to receive
33	residents' council memos and announcements; prohibiting a
34	provider from restricting a resident's access to the
35	council; amending s. 651.085, F.S.; requiring the provider
36	to provide the reasons for increasing the maintenance fee
37	to the chair of the residents' council; allowing a
38	designated representative to represent the provider at
39	meetings; amending s. 651.091, F.S.; specifying that a
40	management company or operator is an agent of the provider
41	for the purposes of disclosing certain information to
42	residents; expanding the list of items that must be
43	provided to the chair of the residents' council; requiring
44	the provider to provide a copy of s. 651.071, F.S.,
45	relating to receivership or liquidation, to all
46	prospective residents; amending s. 651.105, F.S.;
47	increasing the amount of time that the Office of Insurance
48	Regulation has to inspect a facility; requiring the office
49	to determine if all disclosures have been made to the
50	chair of the residents' council; amending ss. 651.114 and
51	651.1151, F.S.; conforming provisions to changes made by
52	the act; amending s. 651.121, F.S.; conforming provisions
53	to changes made by the act; requiring the chair of the
54	Continuing Care Advisory Council to report the council's
55	findings and recommendations to the Governor and the
56	Commissioner of Insurance Regulation; requiring the office
57	to provide certain information to the council; repealing
58	s. 651.133, F.S., relating to provisional certificates
59	under prior law; amending s. 628.4615, F.S.; conforming
60	cross-references; providing an effective date.
61
62	Be It Enacted by the Legislature of the State of Florida:
63
64	Section 1.  Section 651.011, Florida Statutes, is reordered
65	and amended to read:
66	651.011  Definitions.-For the purposes of this chapter, the
67	term:
68	(3)(1)  "Continuing Care Advisory Council" or "advisory
69	council" means the Continuing Care Advisory council established
70	in by s. 651.121.
71	(2)  "Continuing care" or "care" means, furnishing pursuant
72	to a contract, furnishing shelter and either nursing care or
73	personal services as defined in s. 429.02, whether such nursing
74	care or personal services are provided in the facility or in
75	another setting designated by the contract for continuing care,
76	to an individual not related by consanguinity or affinity to the
77	provider furnishing such care, upon payment of an entrance fee.
78	Other personal services provided must shall be designated in the
79	continuing care contract. Contracts to provide continuing care
80	include agreements to provide care for any duration, including
81	contracts that are terminable by either party.
82	(4)(3)  "Entrance fee" means an initial or deferred payment
83	of a sum of money or property made as full or partial payment to
84	assure the resident a place in a facility. An accommodation fee,
85	admission fee, or other fee of similar form and application are
86	shall be considered to be an entrance fee.
87	(5)(4)  "Facility" means a place that provides in which it
88	is undertaken to provide continuing care.
89	(8)(5)  "Licensed" means that the provider has obtained a
90	certificate of authority from the department.
91	(9)(6)  "Provider" means the owner or operator, whether a
92	natural person, partnership or other unincorporated association,
93	however organized, trust, or corporation, of an institution,
94	building, residence, or other place, whether operated for profit
95	or not, which owner or operator provides undertakes to provide
96	continuing care for a fixed or variable fee, or for any other
97	remuneration of any type, whether fixed or variable, for the
98	period of care, payable in a lump sum or lump sum and monthly
99	maintenance charges or in installments, but does not mean an any
100	entity that has existed and continuously operated a facility
101	located on at least no less than 63 acres in this state
102	providing residential lodging to members and their spouses for
103	at least 66 years on or before July 1, 1989, and such facility
104	has the residential capacity of 500 persons, is directly or
105	indirectly owned or operated by a nationally recognized
106	fraternal organization, is not open to the public, and accepts
107	only its members and their spouses as residents at such a
108	facility.
109	(10)(7)  "Records" means the permanent financial,
110	directory, and personnel information and data maintained by a
111	provider pursuant to this chapter.
112	(11)(8)  "Resident" means a purchaser of, or a nominee of,
113	or a subscriber to, a continuing care
114	agreement does may not be construed to give the resident a part
115	ownership of the facility in which the resident is to reside,
116	unless expressly provided for in the agreement.
117	(6)(9)  "Generally accepted accounting principles" means
118	those accounting principles and practices adopted by the
119	Financial Accounting Standards Board and the American Institute
120	of Certified Public Accountants, including Statement of Position
121	90-8 with respect to any full year to which the statement
122	applies.
123	(7)(10)  "Insolvency" means the condition in which the
124	provider is unable to pay its obligations as they come due in
125	the normal course of business.
126	(1)(11)  "Advertising" means the dissemination of any
127	written, visual, or electronic information by a provider, or any
128	person affiliated with or controlled by a provider, to potential
129	residents or their representatives for the purpose of inducing
130	such persons to subscribe to or enter into a contract to reside
131	in a continuing care community that is subject to this chapter
132	covered by this act.
133	Section 2.  Section 651.012, Florida Statutes, is amended
134	to read:
135	651.012  Exempted facility; written disclosure of
136	exemption.-Any facility exempted under ss. 632.637(1)(e) and
137	651.011(9) 651.011(6) must provide written disclosure of such
138	exemption to each person admitted to the facility after October
139	1, 1996. This disclosure must be written using language likely
140	to be understood by the person and must briefly explain the
141	exemption provisions of ss. 632.637(1)(e) and 651.011(6).
142	Section 3.  Subsection (2) of section 651.015, Florida
143	Statutes, is amended to read:
144	651.015  Administration; forms; fees; rules; fines.-The
145	administration of this chapter is vested in the commission,
146	office, and department, which shall:
147	(2)  Collect in advance, and the applicant shall pay in
148	advance, the following fees:
149	(a)  At the time of filing an application for a certificate
150	of authority, an application fee in the amount of $5,000 $75 for
151	each facility.
152	(b)  At the time of filing the annual report required by s.
153	651.026, a fee in the amount of $100 for each year or part
154	thereof for each facility.
155	(c)  A late fee not to exceed $50 per a day for each day of
156	noncompliance.
157	(d)  A fee to cover the actual cost of a credit report and
158	fingerprint processing.
159	(e)  At the time of filing an application for a provisional
160	certificate of authority, a fee in the amount of $5,000 $50.
161	Section 4.  Paragraph (b) of subsection (2) of section
162	651.022, Florida Statutes, is amended, paragraph (g) is added to
163	that subsection, and paragraphs (i) and (j) of subsection (3) of
164	that section are amended, to read:
165	651.022  Provisional certificate of authority;
166	application.-
167	(2)  The application for a provisional certificate of
168	authority shall be on a form prescribed by the commission and
169	shall contain the following information:
170	(b)  The full names, residences, and business addresses of:
171	1.  The proprietor, if the applicant or provider is an
172	individual.
173	2.  Every partner or member, if the applicant or provider
174	is a partnership or other unincorporated association, however
175	organized, having fewer than 50 partners or members, together
176	with the business name and address of the partnership or other
177	organization.
178	3.  The principal partners or members, if the applicant or
179	provider is a partnership or other unincorporated association,
180	however organized, having 50 or more partners or members,
181	together with the business name and business address of the
182	partnership or other organization. If such unincorporated
183	organization has officers and a board of directors, the full
184	name and business address of each officer and director may be
185	set forth in lieu of the full name and business address of its
186	principal members.
187	4.  The corporation and each officer and director thereof,
188	if the applicant or provider is a corporation.
189	5.  Every trustee and officer, if the applicant or provider
190	is a trust.
191	6.  The manager, whether an individual, corporation,
192	partnership, or association.
193	7.  Any stockholder holding at least a 10 percent 10-
194	percent interest in the operations of the facility in which the
195	care is to be offered.
196	8.  Any person whose name is required to be provided in the
197	application under the provisions of this paragraph and who owns
198	any interest in or receives any remuneration from, either
199	directly or indirectly, any professional service firm,
200	association, trust, partnership, or corporation providing goods,
201	leases, or services to the facility for which the application is
202	made, with a real or anticipated value of $10,000 $500 or more,
203	and the name and address of the professional service firm,
204	association, trust, partnership, or corporation in which such
205	interest is held. The applicant shall describe such goods,
206	leases, or services and the probable cost to the facility or
207	provider and shall describe why such goods, leases, or services
208	should not be purchased from an independent entity.
209	9.  Any person, corporation, partnership, association, or
210	trust owning land or property leased to the facility, along with
211	a copy of the lease agreement.
212	10.  Any affiliated parent or subsidiary corporation or
213	partnership.
214	(g)  The forms of the continuing care residency contracts,
215	reservation contracts, escrow agreements, and wait list
216	contracts, if applicable, which are proposed to be used by the
217	provider in the furnishing of care. If the office finds that the
218	continuing care contracts and escrow agreements comply with ss.
219	651.023(1)(c), 651.033, and 651.055, it shall approve them.
220	Thereafter, no other form of contract or agreement may be used
221	by the provider until it has been submitted to the office and
222	approved.
223	(3)  In addition to the information required in subsection
224	(2), an applicant for a provisional certificate of authority
225	shall submit a market feasibility study. The market feasibility
226	study shall include at least the following information:
227	(i)  The application for a provisional certificate of
228	authority shall be accompanied by the forms of the continuing
229	care residency and reservation contracts and escrow agreements
230	proposed to be used by the provider in the furnishing of care.
231	If the office finds that the continuing care contracts and
232	escrow agreements comply with ss. 651.023(1)(c), 651.033, and
233	651.055, it shall approve them. Thereafter, no other form of
234	contract or agreement may be used by the provider until it has
235	been submitted to the office and approved.
236	(i)(j)  The name of the person who prepared the feasibility
237	study and the experience of such person in preparing similar
238	studies or otherwise consulting in the field of continuing care.
239	Section 5.  Subsection (2) of section 651.0235, Florida
240	Statutes, is amended to read:
241	651.0235  Validity of provisional certificates of authority
242	and certificates of authority.-
243	(2)  If the provider fails to meet the requirements of this
244	chapter for a provisional certificate of authority or a
245	certificate of authority, the office may notify the provider of
246	any deficiencies and require the provider to correct such
247	deficiencies within a period to be determined by the office. If
248	such deficiencies are not corrected within 20 days after the
249	notice to the provider, or within less time at the discretion of
250	the office, the office shall notify the Continuing Care Advisory
251	Council, which may assist the facility in formulating a remedial
252	plan to be submitted to the office within no later than 60 days
253	after from the date of notification. The time period for
254	correcting the granted to correct deficiencies may be extended
255	upon submission of a plan for corrective action approved by the
256	office. If such deficiencies have not been cleared by the
257	expiration of such time period, as extended, the office shall
258	petition for a delinquency proceeding or pursue such other
259	relief as is provided for under this chapter, as the
260	circumstances may require.
261	Section 6.  Subsection (2) of section 651.026, Florida
262	Statutes, is amended to read:
263	651.026  Annual reports.-
264	(2)  The annual report shall be in such form as the
265	commission prescribes and shall contain at least the following:
266	(a)  Any change in status with respect to the information
267	required to be filed under s. 651.022(2).
268	(b)  Financial statements audited by an independent
269	certified public accountant, which must shall contain, for two
270	or more periods if the facility has been in existence that long,
271	all of the following:
272	1.  An accountant's opinion and, in accordance with
273	generally accepted accounting principles:
274	a.  A balance sheet;
275	b.  A statement of income and expenses;
276	c.  A statement of equity or fund balances; and
277	d.  A statement of changes in cash flows.; and
278	2.  Notes to the financial statements considered customary
279	or necessary for to full disclosure or adequate understanding of
280	the financial statements, financial condition, and operation.
281	(c)  The following financial information:
282	1.  A detailed listing of the assets maintained in the
283	liquid reserve as required under in s. 651.035 and in accordance
284	with part II of chapter 625;
285	2.  A schedule giving additional information relating to
286	property, plant, and equipment having an original cost of at
287	least $25,000, so as to show in reasonable detail with respect
288	to each separate facility original costs, accumulated
289	depreciation, net book value, appraised value or insurable value
290	and date thereof, insurance coverage, encumbrances, and net
291	equity of appraised or insured value over encumbrances. Any
292	property not used in continuing care must shall be shown
293	separately from property used in continuing care;
294	3.  The level of participation in Medicare or Medicaid
295	programs, or both;
296	4.  A statement of all fees required of residents,
297	including, but not limited to, a statement of the entrance fee
298	charged, the monthly service charges, the proposed application
299	of the proceeds of the entrance fee by the provider, and the
300	plan by which the amount of the entrance fee is determined if
301	the entrance fee is not the same in all cases; and
302	5.  Any change or increase in fees if when the provider
303	changes either the scope of, or the rates for, care or services,
304	regardless of whether the change involves the basic rate or only
305	those services available at additional costs to the resident.
306	6.a.  If the provider has more than one certificated
307	facility, or has operations that are not licensed under this
308	chapter, it shall submit a balance sheet, statement of income
309	and expenses, statement of equity or fund balances, and
310	statement of cash flows statement of operations for each
311	facility licensed under this chapter as supplemental information
312	to the audited financial statements required under paragraph (b)
313	as part of the annual report.
314	b.  If the provider has operations that are not Florida
315	certificated facilities, the provider shall also submit as
316	supplemental information to the audited financial statements,
317	balance sheets, statements of changes in equity, and statements
318	of cash flows for each Florida certificated facility.
319	(d)  Such other reasonable data, financial statements, and
320	pertinent information as the commission or office may require
321	with respect to the provider or the facility, or its directors,
322	trustees, members, branches, subsidiaries, or affiliates, to
323	determine the financial status of the facility and the
324	management capabilities of its managers and owners.
325	(e)  Each facility shall file with the office annually,
326	together with the annual report required by this section, a
327	computation of its minimum liquid reserve calculated in
328	accordance with s. 651.035 on a form prescribed by the
329	commission.
330	(f)  If, due to a change in generally accepted accounting
331	principles, the balance sheet, statement of income and expenses,
332	statement of equity or fund balances, or statement of cash flows
333	is known by any other name or title, the annual report must
334	contain financial statements using the changed names or titles
335	that most closely correspond to a balance sheet, statement of
336	income and expenses, statement of equity or fund balances, and
337	statement of changes in cash flows.
338	Section 7.  Paragraph (d) of subsection (1) of section
339	651.033, Florida Statutes, is amended, and paragraph (d) is
340	added to subsection (3) of that section, to read:
341	651.033  Escrow accounts.-
342	(1)  When funds are required to be deposited in an escrow
343	account pursuant to s. 651.022, s. 651.023, s. 651.035, or s.
344	651.055:
345	(d)  All funds deposited in an escrow account, if invested,
346	shall be invested as set forth in part II of chapter 625;
347	however, such investment may shall not diminish the funds held
348	in escrow below the amount required by this chapter. All Funds
349	deposited in an escrow account are shall not be subject to any
350	charges by the escrow agent except escrow agent fees associated
351	with administering the accounts, or subject to any liens,
352	judgments, garnishments, creditor's claims, or other
353	encumbrances against the provider or facility except as provided
354	in s. 651.035(1) 651.035(2).
355	(3)  In addition, when entrance fees are required to be
356	deposited in an escrow account pursuant to s. 651.022, s.
357	651.023, or s. 651.055:
358	(d)  A provider may assess a nonrefundable fee, which is
359	separate from the entrance fee, for processing a prospective
360	resident's application for continuing care.
361	Section 8.  Section 651.035, Florida Statutes, is amended
362	to read:
363	651.035  Minimum liquid reserve requirements.-
364	(1)  A provider shall maintain in escrow a minimum liquid
365	reserve consisting of the following reserves, as applicable:
366	reserves specified in subsection (2).
367	(2)(a)  Each A provider shall maintain in escrow as a debt
368	service reserve an amount equal to the aggregate amount of all
369	principal and interest payments due during the fiscal year on
370	any mortgage loan or other long-term financing of the facility,
371	including property taxes as recorded in the audited financial
372	statements required under s. 651.026. The amount must shall
373	include any leasehold payments and all costs related to such
374	payments. If principal payments are not due during the fiscal
375	year, the provider shall maintain in escrow as a minimum liquid
376	reserve an amount equal to interest payments due during the next
377	12 months on any mortgage loan or other long-term financing of
378	the facility, including property taxes.
379	(b)  A provider that which has outstanding indebtedness
380	that which requires what is normally referred to as a "debt
381	service reserve" to be held in escrow pursuant to a trust
382	indenture or mortgage lien on the facility and for which the
383	debt service reserve may only be used to pay principal and
384	interest payments on the debt that which the debtor is obligated
385	to pay, and which may include property taxes and insurance, may
386	include such debt service reserve in computing the its
387	computation of its minimum liquid reserve needed to satisfy this
388	subsection if, provided that the provider furnishes to the
389	office a copy of the agreement under which such debt service is
390	held, together with a statement of the amount being held in
391	escrow for the debt service reserve, certified by the lender or
392	trustee and the provider to be correct. The trustee shall
393	provide the office with any information concerning the debt
394	service reserve account upon request of the provider or the
395	office.
396	(c)  Each provider shall maintain in escrow an operating
397	reserve in an amount equal to 30 percent of the total operating
398	expenses projected in the feasibility study required by s.
399	651.023 for the first 12 months of operation. Thereafter, each
400	provider shall maintain in escrow an operating reserve in an
401	amount equal to 15 percent of the total operating expenses in
402	the annual report filed pursuant to s. 651.026. If Where a
403	provider has been in operation for more than 12 months, the
404	total annual operating expenses shall be determined by averaging
405	the total annual operating expenses reported to the office by
406	the number of annual reports filed with the office within the
407	immediate preceding 3-year period subject to adjustment if in
408	the event there is a change in the number of facilities owned.
409	For purposes of this subsection, total annual operating expenses
410	shall include all expenses of the facility except: depreciation
411	and amortization; interest and property taxes included in
412	paragraph (a) subsection (1); extraordinary expenses that which
413	are adequately explained and documented in accordance with
414	generally accepted accounting principles; liability insurance
415	premiums in excess of those paid in calendar year 1999; and
416	changes in the obligation to provide future services to current
417	residents. For providers initially licensed during or after
418	calendar year 1999, liability insurance shall be included in the
419	total operating expenses in an amount not to exceed the premium
420	paid during the first 12 months of facility operation. Beginning
421	January 1, 1993, the operating reserves required under this
422	subsection shall be in an unencumbered account held in escrow
423	for the benefit of the residents. Such funds may not be
424	encumbered or subject to any liens or charges by the escrow
425	agent or judgments, garnishments, or creditors' claims against
426	the provider or facility. However, if a facility had a lien,
427	mortgage, trust indenture, or similar debt instrument in place
428	before prior to January 1, 1993, which encumbered all or any
429	part of the reserves required by this subsection and such funds
430	were used to meet the requirements of this subsection, then such
431	arrangement may be continued, unless a refinancing or
432	acquisition has occurred, and the provider shall be in
433	compliance with this subsection.
434	(d)  Each provider shall maintain in escrow a renewal and
435	replacement reserve in an amount equal to 15 percent of the
436	total accumulated depreciation based on the audited financial
437	statement required to be filed pursuant to s. 651.026, not to
438	exceed 15 percent of the facility's average operating expenses
439	for the past 3 fiscal years based on the audited financial
440	statements for each of those such years. For a provider who is
441	an operator of a facility but is not the owner and depreciation
442	is not included as part of the provider's financial statement,
443	the renewal and replacement reserve required by this paragraph
444	must shall equal 15 percent of the total operating expenses of
445	the provider, as described in this section. Each provider
446	licensed before prior to October 1, 1983, shall be required to
447	fully fund the renewal and replacement reserve by October 1,
448	2003, by multiplying the difference between the former escrow
449	requirement and the present escrow requirement by the number of
450	years the facility has been in operation after October 1, 1983.
451	(3)  In lieu of fulfilling the escrow requirements provided
452	in subsections (1) and (2), each facility licensed prior to
453	October 1, 1983, shall be required to maintain in escrow the
454	minimum liquid reserve that would have been required under this
455	section as it existed on October 1, 1982, plus 5 percent of the
456	difference between the former escrow requirement and the present
457	escrow requirement multiplied by the number of years the
458	facility has been in operation after October 1, 1983. Beginning
459	October 1, 2003, the escrow requirements provided in subsections
460	(1) and (2) shall apply in full to facilities licensed before
461	October 1, 1983.
462	(2)(4)(a)  In facilities where not all residents are under
463	continuing care contracts, the reserve requirements of
464	subsection (1) (2) shall be computed only with respect to the
465	proportional share of operating expenses which are that is
466	applicable to residents as defined in s. 651.011. For purposes
467	of this calculation, the proportional share shall be based upon
468	the ratio of residents under continuing care contracts to those
469	residents who do not hold such contracts.
470	(b)  In facilities that which have voluntarily and
471	permanently discontinued marketing continuing care contracts,
472	the office may allow a reduced debt service reserve as required
473	in subsection (1) based upon the ratio of residents under
474	continuing care contracts to those residents who do not hold
475	such contracts if the office finds that such reduction is not
476	inconsistent with the security protections intended by this
477	chapter. In making this determination, the office may consider
478	such factors as the financial condition of the facility, the
479	provisions of the outstanding continuing care contracts, the
480	ratio of residents under continuing care agreements to those
481	residents who do not hold a continuing care contract, current
482	occupancy rates, previous sales and marketing efforts, life
483	expectancy of the remaining contract holders, and the written
484	policies of the board of directors of the provider or a similar
485	board.
486	(3)(5)  If When principal and interest payments are paid to
487	a trust that which is beneficially held by the residents as
488	described in s. 651.023(5), the office may waive all or any
489	portion of the escrow requirements for mortgage principal and
490	interest contained in subsection (1) if the office finds that
491	such waiver is not inconsistent with the security protections
492	intended by this chapter.
493	(4)(6)  The office, upon approval of a plan for fulfilling
494	the requirements of this section and upon demonstration by the
495	facility of an annual increase in liquid reserves, may extend
496	the time for compliance.
497	(5)(7)(a)  A provider may satisfy the minimum liquid
498	reserve requirements of this section by acquiring from a
499	financial institution, as specified in paragraph (b), a clean,
500	unconditional irrevocable letter of credit in an amount equal to
501	the requirements of this section.
502	(a)  The letter of credit must shall be issued by a
503	financial institution participating in the State of Florida
504	Treasury Certificate of Deposit Program, and must be approved by
505	the letter of credit shall be subject to the approval of the
506	office before prior to issuance and before prior to any renewal
507	or modification thereof. At a minimum, the letter of credit must
508	shall provide for:
509	1.  Ninety days' prior written notice to both the provider
510	and the office of the financial institution's determination not
511	to renew or extend the term of the letter of credit.
512	2.  Unless otherwise arranged by the provider to the
513	satisfaction of the office, deposit by the financial institution
514	of such letter of credit funds in an account designated by the
515	office no later than 30 days before prior to the expiration of
516	the letter of credit.
517	3.  Deposit by the financial institution of such letter of
518	credit funds in an account designated by the office within no
519	later than 4 business days following written instructions from
520	the office that, in the sole judgment of the office, funding of
521	the minimum liquid reserve is required.
522	(b)  The terms of the such letter of credit must shall be
523	approved by the office and the long-term debt of the financial
524	institution providing such letter of credit must shall be rated
525	in one of their top three long-term debt rating categories by
526	either Moody's Investors Service, Standard & Poor's Corporation,
527	or a recognized securities rating agency acceptable to the
528	office.
529	(c)  The letter of credit must shall name the office as
530	beneficiary.
531	(d)  Notwithstanding any other provision of this section, a
532	provider using utilizing a letter of credit pursuant to this
533	subsection shall, at all times, have and maintain in escrow an
534	operating cash reserve equal to 2 months' operating expenses as
535	determined pursuant to s. 651.026.
536	(e)  If In the event the issuing financial institution no
537	longer participates in the State of Florida Treasury Certificate
538	of Deposit Program, such financial institution shall deposit as
539	collateral with the department eligible securities, as
540	prescribed by s. 625.52, having a market value equal to or
541	greater than 100 percent of the stated amount of the letter of
542	credit.
543	(6)(8)(a)  Each fiscal year, a provider may withdraw up to
544	33 percent of the total renewal and replacement reserve
545	available. The reserve available is equal to the market value of
546	the invested reserves at the end of the provider's prior fiscal
547	year. The withdrawal must is to be used for capital items or
548	major repairs., and
549	(a)  Before any funds are eligible for withdrawal, the
550	provider must obtain written permission from the office by
551	submitting the following information:
552	1.  The amount of the withdrawal and the intended use of
553	the proceeds.
554	2.  A board resolution and sworn affidavit signed by two
555	officers or general partners of the provider which indicates
556	approval of the withdrawal and use of the funds.
557	3.  Proof that the provider has met all funding
558	requirements for the operating, debt service, and renewal and
559	replacement reserves computed for the previous fiscal year.
560	4.  Anticipated payment schedule for refunding the renewal
561	and replacement reserve fund.
562	(b)  Within 30 days after the withdrawal of funds from the
563	renewal and replacement reserve fund, the provider must begin
564	refunding the reserve account in equal monthly payments that
565	which allow for a complete funding of the such withdrawal within
566	36 months. If the payment schedule required under subparagraph
567	(a)4. has changed, the provider must update the office with the
568	new payment schedule. If the provider fails to make a required
569	monthly payment or the payment is late, the provider must notify
570	the office within 5 days after the due date of the payment. No
571	additional withdrawals from the renewal and replacement reserve
572	will be allowed until all scheduled payments are current.
573	Section 9.  Paragraphs (d) and (g) of subsection (1) and
574	subsections (2) and (5) of section 651.055, Florida Statutes,
575	are amended to read:
576	651.055  Contracts; right to rescind.-
577	(1)  Each continuing care contract and each addendum to
578	such contract shall be submitted to and approved by the office
579	prior to its use in this state. Thereafter, no other form of
580	contract shall be used by the provider unless it has been
581	submitted to and approved by the office. Each contract shall:
582	(d)  Describe the health and financial conditions required
583	for a person to be accepted as a resident and to continue as a
584	resident, once accepted, including the effect of any change in
585	the health or financial condition of the a person between the
586	date of submitting an application for admission to the facility
587	and entering into a continuing care contract and the date of
588	taking occupancy in a unit. If a prospective resident signs a
589	contract but postpones moving into the facility, the individual
590	is deemed to be occupying a unit at the facility when he or she
591	pays the entrance fee or any portion of the fee, other than a
592	reservation deposit, and begins making monthly maintenance fee
593	payments. Such resident may rescind the contract and receive a
594	full refund of any funds paid, without penalty or forfeiture,
595	within 7 days after executing the contract as specified in
596	subsection (2).
597	(g)  Provide that the contract may be canceled by upon the
598	giving at least 30 days' of written notice of cancellation of at
599	least 30 days by the provider, the resident, or the person who
600	provided the transfer of property or funds for the care of such
601	resident; however, if a contract is canceled because there has
602	been a good faith determination that a resident is a danger to
603	himself or herself or others, only such notice as is reasonable
604	under the circumstances is shall be required.
605	1.  The contract must also shall further provide in clear
606	and understandable language, in print no smaller than the
607	largest type used in the body of the contract, the terms
608	governing the refund of any portion of the entrance fee.
609	2.  For a resident whose contract with the facility
610	provides that the resident does not receive a transferable
611	membership or ownership right in the facility, and who has
612	occupied his or her unit, the refund shall be calculated on a
613	pro rata basis with the facility retaining up to no more than 2
614	percent per month of occupancy by the resident and up to a 5
615	percent no more than a 4-percent fee for processing fee. Such
616	refund must shall be paid within no later than 120 days after
617	the giving the of notice of
618	3.  In addition to a processing fee, if the contract
619	provides for the facility to retain up to no more than 1 percent
620	per month of occupancy by the resident, it may provide that such
621	refund will be paid from the proceeds of the next entrance fees
622	received by the provider for units for which there are no prior
623	claims by any resident until paid in full or, if the provider
624	has discontinued marketing continuing care contracts, within 200
625	days after the date of notice.
626	4.  Unless the provisions of subsection (5) applies apply,
627	for any prospective resident, regardless of whether or not such
628	a resident receives a transferable membership or ownership right
629	in the facility, who cancels the contract before prior to
630	occupancy of the unit, the refund shall be the entire amount
631	paid toward the entrance fee shall be refunded, less a
632	processing fee of up to 5 percent not to exceed 4 percent of the
633	entire entrance fee; however, the but in no event shall such
634	processing fee may not exceed the amount paid by the prospective
635	resident. Such refund must shall be paid within no later than 60
636	days after the giving the of notice of intention to cancel. For
637	a resident who has occupied his or her unit and who has received
638	a transferable membership or ownership right in the facility,
639	the foregoing refund provisions do shall not apply but are shall
640	be deemed satisfied by the acquisition or receipt of a
641	transferable membership or an ownership right in the facility.
642	The provider may shall not charge any fee for the transfer of
643	membership or sale of an ownership right.
644	(2)  A resident has the right to rescind a continuing care
645	contract and receive a full refund of any funds paid, without
646	penalty or forfeiture, within 7 days after executing the
647	contract. A resident may shall not be required to move into the
648	facility designated in the contract before the expiration of the
649	7-day period. During the 7-day period, the resident's funds must
650	be held in an escrow account unless otherwise requested by the
651	resident pursuant to s. 651.033(3)(c).
652	(5)  Except for a resident who postpones moving into the
653	facility but is deemed to have occupied a unit as described in
654	paragraph (1)(d), if a prospective resident dies before
655	occupying the facility or, through illness, injury, or
656	incapacity, is precluded from becoming a resident under the
657	terms of the continuing care contract, the contract is
658	automatically canceled, and the prospective resident or his or
659	her the resident's legal representative shall receive a full
660	refund of all moneys paid to the facility, except those costs
661	specifically incurred by the facility at the request of the
662	prospective resident and set forth in writing in a separate
663	addendum, signed by both parties, to the contract.
664	Section 10.  Section 651.081, Florida Statutes, is amended
665	to read:
666	651.081  Continuing care facilities Residents' council
667	organizations.-
668	(1)  Residents living in a facility holding a valid
669	certificate of authority under this chapter have the right of
670	self-organization, the right to be represented by an individual
671	of their own choosing, and the right to engage in concerted
672	activities for the purpose of keeping informed on the operation
673	of the facility that which is caring for them or for the purpose
674	of other mutual aid or protection.
675	(2)  A residents' council organization created for the
676	purpose of representing residents on matters set forth in s.
677	651.085 may be established through an election in which the
678	residents, as defined in s. 651.011 this chapter, vote by
679	ballot, either physically or by proxy. If the election is to be
680	held during a meeting, a notice of the organizational meeting
681	must be provided to all residents of the community at least 10
682	business days before the meeting. Notice may be given through
683	internal mailboxes, communitywide newsletters, bulletin boards,
684	in-house television stations, and other similar means of
685	communication. An election for creating a residents' council
686	organization is valid if at least 40 percent of the total
687	resident population participates in the election and a majority
688	of the participants vote affirmatively for the council
689	organization. The initial residents' council organization
690	created under this section is valid for at least 12 months. A
691	residents' organization formalized by If the facility has a
692	residents' association, residents' council, or similarly
693	organized body with bylaws and elected officials, such
694	organization must be recognized as the residents' council
695	organization under this section and s. 651.085. Within 30 days
696	after the election of a newly elected president or chair of the
697	residents' council, the provider shall give the president or
698	chair a copy of this chapter and rules adopted thereunder, or
699	direct him or her to the appropriate public website to obtain
700	this information. There shall be Only one residents' council may
701	organization to represent residents before the governing body of
702	the provider as described in s. 651.085(2).
703	Section 11.  Paragraphs (c) and (f) of subsection (1) of
704	section 651.083, Florida Statutes, are amended, present
705	subsection (5) of that section is redesignated as subsection
706	(6), and a new subsection (5) is added to that section, to read:
707	651.083  Residents' rights.-
708	(1)  No resident of any facility shall be deprived of any
709	civil or legal rights, benefits, or privileges guaranteed by
710	law, by the State Constitution, or by the United States
711	Constitution solely by reason of status as a resident of a
712	facility. Each resident of a facility has the right to:
713	(c)  Unrestricted private communication, including
714	receiving and sending unopened correspondence. This includes the
715	right to receive memos or announcements from or approved for
716	distribution by the residents' council.
717	(f)  Present grievances and recommend changes in policies,
718	procedures, and services to the staff of the facility, governing
719	officials, or any other person without restraint, interference,
720	coercion, discrimination, or reprisal. This right includes
721	access to ombudsman volunteers and advocates and the right to be
722	a member of, and active in, and to associate with, advocacy or
723	special interest groups or associations.
724	(5)  The provider may not restrict a resident's access to
725	the residents' council.
726	Section 12.  Subsections (1) and (2) of section 651.085,
727	Florida Statutes, are amended to read:
728	651.085  Quarterly meetings between residents and the
729	governing body of the provider; resident representation before
730	the governing body of the provider.-
731	(1)  The governing body of a provider, or the designated
732	representative of the provider, shall hold quarterly meetings
733	with the residents of the continuing care facility for the
734	purpose of free discussion of subjects including, but not
735	limited to, income, expenditures, and financial trends and
736	problems as they apply to the facility, as well as a discussion
737	on proposed changes in policies, programs, and services. At
738	quarterly meetings where monthly maintenance fee increases are
739	discussed, a summary of the reasons for raising the fee as
740	specified in subsection (4) must be provided in writing to the
741	president or chair of the residents' council. Upon request of
742	the residents' council organization, a member of the governing
743	body of the provider, such as a board member, a general partner,
744	or a principal owner, or designated representative shall attend
745	such meetings. Residents are shall be entitled to at least 7
746	days' advance notice of each quarterly meeting. An agenda and
747	any materials that will be distributed by the governing body or
748	representative of the provider shall be posted in a conspicuous
749	place at the facility and shall be available upon request to
750	residents of the facility. The office shall request verification
751	from a facility that quarterly meetings are held and open to all
752	residents if when it receives a complaint from the residents'
753	council that a facility is not in compliance with the provisions
754	of this subsection. In addition, a facility shall report to the
755	office in the annual report required under s. 651.026 the dates
756	on which quarterly meetings were held during the reporting
757	period.
758	(2)  A residents' council organization formed pursuant to
759	s. 651.081, members of which are elected by the residents, may
760	designate a resident to represent them before the governing body
761	of the provider or organize a meeting or ballot election of the
762	residents of the facility to determine whether to elect a
763	resident to represent them before the governing body of the
764	provider. If a residents' council organization as described in
765	s. 651.081 does not exist, any resident may organize a meeting
766	or ballot election of the residents of the facility to determine
767	whether to elect a resident to represent them before the
768	governing body and, if applicable, elect the representative. The
769	residents' council organization, or the resident that organizes
770	a meeting or ballot election to elect a representative, shall
771	give all residents of the facility notice at least 10 business
772	days before the meeting or election. Notice may be given through
773	internal mailboxes, communitywide newsletters, bulletin boards,
774	in-house television stations, and other similar means of
775	communication. An election of the representative is valid if at
776	least 40 percent of the total resident population participates
777	in the election and a majority of the participants vote
778	affirmatively for the representative. The initial designated
779	representative elected under this section shall be elected to
780	serve for a period of at least 12 months.
781	Section 13.  Section 651.091, Florida Statutes, is amended
782	to read:
783	651.091  Availability, distribution, and posting of reports
784	and records; requirement of full disclosure.-
785	(1)  Each continuing care facility shall maintain as public
786	information, available upon request, records of all cost and
787	inspection reports pertaining to that facility which that have
788	been filed with or issued by any governmental agency. A copy of
789	each such report shall be retained in such records for at least
790	not less than 5 years after from the date the report is filed or
791	issued. Each facility shall also maintain as public information,
792	available upon request, all annual statements that have been
793	filed with the office. For purposes of this section, a
794	management company or operator is considered an agent of the
795	provider.
796	(2)  Every continuing care facility shall:
797	(a)  Display the certificate of authority in a conspicuous
798	place inside the facility.
799	(b)  Post in a prominent position in the facility which is
800	so as to be accessible to all residents and to the general
801	public a concise summary of the last examination report issued
802	by the office, with references to the page numbers of the full
803	report noting any deficiencies found by the office, and the
804	actions taken by the provider to rectify such deficiencies,
805	indicating in such summary where the full report may be
806	inspected in the facility.
807	(c)  Post in a prominent position in the facility which is
808	so as to be accessible to all residents and to the general
809	public a summary of the latest annual statement, indicating in
810	the summary where the full annual statement may be inspected in
811	the facility. A listing of any proposed changes in policies,
812	programs, and services must shall also be posted.
813	(d)  Distribute a copy of the full annual statement to the
814	president or chair of the residents' council within 30 days
815	after the filing of the annual report with the office, and
816	designate a staff person to provide explanation thereof.
817	(e)  Notify the residents' council of any plans filed with
818	the office to obtain new financing, additional financing, or
819	refinancing for the facility and of any applications to the
820	office for any expansion of the facility.
821	(f)  Deliver to the president or chair of the residents'
822	council a summary of entrance fees collected and refunds made
823	during the time period covered in the annual report and the
824	refund balances due at the end of the report period.
825	(g)  Deliver to the president or chair of the residents'
826	council a copy of each quarterly statement within 30 days after
827	the quarterly statement is filed with the office if the facility
828	is required to file quarterly.
829	(h)  Upon request, deliver to the president or chair of the
830	residents' council a copy of any newly approved continuing care
831	contract within 30 days after approval by the office.
832	(3)  Before entering into a contract to furnish continuing
833	care, the provider undertaking to furnish the care, or the agent
834	of the provider, shall make full disclosure, and provide copies
835	of the disclosure documents to the prospective resident or his
836	or her legal representative, of the following information:
837	(a)  The contract to furnish continuing care.
838	(b)  The summary listed in paragraph (2)(b).
839	(c)  All ownership interests and lease agreements,
840	including information specified in s. 651.022(2)(b)8.
841	(d)  In keeping with the intent of this subsection relating
842	to disclosure, the provider shall make available for review,
843	master plans approved by the provider's governing board and any
844	plans for expansion or phased development, to the extent that
845	the availability of such plans will not put at risk real estate,
846	financing, acquisition, negotiations, or other implementation of
847	operational plans and thus jeopardize the success of
848	negotiations, operations, and development.
849	(e)  Copies of the rules and regulations of the facility
850	and an explanation of the responsibilities of the resident.
851	(f)  The policy of the facility with respect to admission
852	to and discharge from the various levels of health care offered
853	by the facility.
854	(g)  The amount and location of any reserve funds required
855	by this chapter, and the name of the person or entity having a
856	claim to such funds in the event of a bankruptcy, foreclosure,
857	or rehabilitation proceeding.
858	(h)  A copy of s. 651.071.
859	(i)(h)  A copy of the resident's rights as described in s.
860	651.083.
861	(4)  A true and complete copy of the full disclosure
862	document to be used must shall be filed with the office before
863	prior to its use. A resident or prospective resident or his or
864	her legal representative may shall be permitted to inspect the
865	full reports referred to in paragraph (2)(b); the charter or
866	other agreement or instrument required to be filed with the
867	office pursuant to s. 651.022(2), together with all amendments
868	thereto; and the bylaws of the corporation or association, if
869	any. Upon request, copies of the reports and information shall
870	be provided to the individual requesting them if the individual
871	agrees to pay a reasonable charge to cover copying costs.
872	Section 14.  Subsection (1) of section 651.105, Florida
873	Statutes, is amended, and subsection (5) is added to that
874	section, to read:
875	651.105  Examination and inspections.-
876	(1)  The office may at any time, and shall at least once
877	every 5 3 years, examine the business of any applicant for a
878	certificate of authority and any provider engaged in the
879	execution of care contracts or engaged in the performance of
880	obligations under such contracts, in the same manner as is
881	provided for the examination of insurance companies pursuant to
882	s. 624.316. Such examinations shall be made by a representative
883	or examiner designated by the office, whose compensation will be
884	fixed by the office pursuant to s. 624.320. Routine examinations
885	may be made by having the necessary documents submitted to the
886	office; and, for this purpose, financial documents and records
887	conforming to commonly accepted accounting principles and
888	practices, as required under s. 651.026, are will be deemed
889	adequate. The final written report of each such examination must
890	shall be filed with the office and, when so filed, constitutes
891	will constitute a public record. Any provider being examined
892	shall, upon request, give reasonable and timely access to all of
893	its records. The representative or examiner designated by the
894	office may at any time examine the records and affairs and
895	inspect the physical property of any provider, whether in
896	connection with a formal examination or not.
897	(5)  At the time of the routine examination, the office
898	shall determine if all disclosures required under this chapter
899	have been made to the president or chair of the residents'
900	council.
901	Section 15.  Subsections (1) through (4) of section
902	651.114, Florida Statutes, are amended to read:
903	651.114  Delinquency proceedings; remedial rights.-
904	(1)  Upon determination by the office that a provider is
905	not in compliance with this chapter, the office may notify the
906	chair of the Continuing Care Advisory Council, who may assist
907	the office in formulating a corrective action plan.
908	(2)  A provider shall make available to the advisory
909	council, within no later than 30 days after being requested to
910	do so by the advisory council, a plan for obtaining compliance
911	or solvency.
912	(3)  Within The council shall, no later than 30 days after
913	notification, the advisory council shall:
914	(a)  Consider and evaluate the plan submitted by the
915	provider.
916	(b)  Discuss the problem and solutions with the provider.
917	(c)  Conduct such other business as is necessary.
918	(d)  Report its findings and recommendations to the office,
919	which may require additional modification of the plan.
920	(4)(a)  After receiving Upon approval of a plan by the
921	office, the provider shall submit monthly a progress report
922	monthly to the advisory council or the office, or both, in a
923	manner prescribed by the office.
924	(b)  After a period of 3 months, or at any earlier time
925	deemed necessary, the council shall evaluate the progress by the
926	provider and shall advise the office of its findings.
927	Section 16.  Subsection (3) of section 651.1151, Florida
928	Statutes, is amended to read:
929	651.1151  Administrative, vendor, and management
930	contracts.-
931	(3)  Any contract with an affiliate, an entity controlled
932	by the provider, or an entity controlled by an affiliate of the
933	provider for administrative, vendor, or management services
934	entered into or renewed after October 1, 1991, must include
935	shall contain a provision that the contract will shall be
936	canceled upon issuance of an order by the office pursuant to
937	this section. A copy of the current management services
938	contract, pursuant to this section, if any, must be on file in
939	the marketing office or other area accessible area to residents
940	and the appropriate residents' council resident organizations.
941	Section 17.  Section 651.121, Florida Statutes, is amended
942	to read:
943	651.121  Continuing Care Advisory Council.-
944	(1)  The Continuing Care Advisory Council to the office is
945	created to consist of 10 members who are residents of this state
946	appointed by the Governor and geographically representative of
947	this state. Three members shall be administrators of facilities
948	that which hold valid certificates of authority under this
949	chapter and shall have been actively engaged in the offering of
950	continuing care agreements in this state for 5 years before
951	appointment. The remaining members shall include:
952	(a)  A representative of the business community whose
953	expertise is in the area of management.
954	(b)  A representative of the financial community who is not
955	a facility owner or administrator.
956	(c)  A certified public accountant.
957	(d)  An attorney.
958	(e)  Three residents who hold continuing care agreements
959	with a facility certified in this state.
960	(2)  The term of office for each member shall be 3 years,
961	or until the member's successor has been appointed and
962	qualifies.
963	(3)  The council members shall serve without pay, but shall
964	be reimbursed for per diem and travel expenses by the office in
965	accordance with s. 112.061.
966	(4)  Each prospective council member shall submit to the
967	appointing officer a statement detailing any financial interest
968	of 10 percent or more in one or more continuing care facilities,
969	including, but not limited to, ownership interest in a facility,
970	property leased to a facility, and ownership in any company
971	providing goods or services to a facility. This statement shall
972	include the name and address of each facility involved and the
973	extent and character of the financial interest of the applicant.
974	Upon appointment of the council member, this statement shall
975	become a public document.
976	(5)  The council shall:
977	(a)  Meet at least once a year and, at such annual meeting,
978	elect a chair from their number and elect or appoint a vice
979	chair secretary, each of whom shall hold office for 1 year and
980	thereafter until a successor is elected and qualified.
981	(b)  Hold other meetings at such times and places as the
982	office or the chair of the council may direct.
983	(c)  Keep a record of its proceedings. The books and
984	records of the council shall be prima facie evidence of all
985	matters reported therein and, except for proceedings conducted
986	under s. 651.018, shall be open to inspection at all times.
987	(d)  Act in an advisory capacity to the office on matters
988	pertaining to the operation and regulation of continuing care
989	facilities.
990	(e)  Recommend to the office needed changes in statutes and
991	rules.
992	(f)  Upon the request of the office, assist, with any
993	corrective action, rehabilitation or cessation of business plan
994	of a provider.
995	(6)  A provider shall furnish to the council, no later than
996	14 business days after being requested to do so by the council,
997	all documents and information reasonably requested by the
998	council.
999	(7)  The council chair shall report annually the council's
1000	findings and recommendations concerning continuing care
1001	facilities to the Executive Office of the Governor and the
1002	Commissioner of Insurance Regulation.
1003	(8)  At the council's annual meeting, the office shall
1004	provide members with a summary and comparison of data on
1005	continuing care facilities submitted in the most recent two
1006	annual reports and a summary of the number, type, and status of
1007	complaints related to continuing care facilities which were
1008	filed with the Division of Consumer Services in the Department
1009	of Financial Services during the preceding fiscal year.
1010	(9)  The office shall notify the council by written
1011	memorandum or electronic means of proposed rule changes and
1012	scheduled rule workshops and hearings related to the
1013	administration of this chapter.
1014	Section 18.  Section 651.133, Florida Statutes, is
1015	repealed.
1016	Section 19.  Subsection (1) of section 628.4615, Florida
1017	Statutes, is amended to read:
1018	628.4615  Specialty insurers; acquisition of controlling
1019	stock, ownership interest, assets, or control; merger or
1020	consolidation.-
1021	(1)  For the purposes of this section, the term "specialty
1022	insurer" means any person holding a license or certificate of
1023	authority as:
1024	(a)  A motor vehicle service agreement company authorized
1025	to issue motor vehicle service agreements as those terms are
1026	defined in s. 634.011;
1027	(b)  A home warranty association authorized to issue "home
1028	warranties" as those terms are defined in s. 634.301(3) and (4);
1029	(c)  A service warranty association authorized to issue
1030	"service warranties" as those terms are defined in s.
1031	634.401(13) and (14);
1032	(d)  A prepaid limited health service organization
1033	authorized to issue prepaid limited health service contracts, as
1034	those terms are defined in chapter 636;
1035	(e)  An authorized health maintenance organization
1036	operating pursuant to s. 641.21;
1037	(f)  An authorized prepaid health clinic operating pursuant
1038	to s. 641.405;
1039	(g)  A legal expense insurance corporation authorized to
1040	engage in a legal expense insurance business pursuant to s.
1041	642.021;
1042	(h)  A provider that which is licensed to operate a
1043	facility that which undertakes to provide continuing care as
1044	those terms are defined in s. 651.011(2), (4), (5), and (6);
1045	(i)  A multiple-employer welfare arrangement operating
1046	pursuant to ss. 624.436-624.446;
1047	(j)  A premium finance company authorized to finance
1048	insurance premiums pursuant to s. 627.828; or
1049	(k)  A corporation authorized to accept donor annuity
1050	agreements pursuant to s. 627.481.
1051	Section 20.  This act shall take effect July 1, 2010.

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