CS/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. 651.022, F.S.; increasing the
6	threshold amount for businesses that must be identified in
7	an application for a provisional certificate of authority;
8	adding wait-list contracts to the forms that must be
9	submitted with the application; amending s. 651.0235,
10	F.S.; conforming provisions to changes made by the act;
11	amending s. 651.026, F.S.; revising the financial
12	information that must be submitted annually for each
13	certified facility; requiring the annual report to reflect
14	any changes in accounting principle terminology; amending
15	s. 651.033, F.S.; authorizing a provider to assess a
16	separate, nonrefundable fee for processing an application
17	for continuing care; amending s. 651.035, F.S.; clarifying
18	that the amounts maintained in escrow relating to taxes
19	refer to property taxes; deleting an obsolete provision;
20	amending s. 651.055, F.S.; providing that a resident is
21	deemed to be occupying a unit upon the payment of certain
22	fees; providing a timeframe for rescinding a contract;
23	increasing the application processing fee; conforming
24	provisions to changes made by the act; amending s.
25	651.081, F.S.; renaming residents' organizations as
26	residents' councils; requiring the provider to provide a
27	newly elected chair of a council with a copy of ch. 651,
28	F.S., and related rules; amending s. 651.083, F.S.;
29	clarifying that a resident has a right to receive
30	residents' council memos and announcements; prohibiting a
31	provider from restricting a resident's access to the
32	council; amending s. 651.085, F.S.; requiring the provider
33	to provide the reasons for increasing the maintenance fee
34	to the chair of the residents' council; allowing a
35	designated representative to represent the provider at
36	meetings; amending s. 651.091, F.S.; specifying that a
37	management company or operator is an agent of the provider
38	for the purposes of disclosing certain information to
39	residents; expanding the list of items that must be
40	provided to the chair of the residents' council; requiring
41	the provider to provide a copy of s. 651.071, F.S.,
42	relating to receivership or liquidation, to all
43	prospective residents; amending s. 651.105, F.S.;
44	increasing the required time period for examinations for
45	certain providers; requiring the office to determine if
46	all disclosures have been made to the chair of the
47	residents' council; amending ss. 651.114 and 651.1151,
48	F.S.; conforming provisions to changes made by the act;
49	amending s. 651.121, F.S.; conforming provisions to
50	changes made by the act; requiring the chair of the
51	Continuing Care Advisory Council to report the council's
52	findings and recommendations to the Governor and the
53	Commissioner of Insurance Regulation; requiring the office
54	to provide certain information to the council; repealing
55	s. 651.133, F.S., relating to provisional certificates
56	under prior law; amending s. 628.4615, F.S.; conforming
57	cross-references; providing an effective date.
58
59	Be It Enacted by the Legislature of the State of Florida:
60
61	Section 1.  Section 651.011, Florida Statutes, is reordered
62	and amended to read:
63	651.011  Definitions.-For the purposes of this chapter, the
64	term:
65	(3)(1)  "Continuing Care Advisory Council" or "advisory
66	council" means the Continuing Care Advisory council established
67	in by s. 651.121.
68	(2)  "Continuing care" or "care" means, furnishing pursuant
69	to a contract, furnishing shelter and either nursing care or
70	personal services as defined in s. 429.02, whether such nursing
71	care or personal services are provided in the facility or in
72	another setting designated by the contract for continuing care,
73	to an individual not related by consanguinity or affinity to the
74	provider furnishing such care, upon payment of an entrance fee.
75	Other personal services provided must shall be designated in the
76	continuing care contract. Contracts to provide continuing care
77	include agreements to provide care for any duration, including
78	contracts that are terminable by either party.
79	(4)(3)  "Entrance fee" means an initial or deferred payment
80	of a sum of money or property made as full or partial payment to
81	assure the resident a place in a facility. An accommodation fee,
82	admission fee, or other fee of similar form and application are
83	shall be considered to be an entrance fee.
84	(5)(4)  "Facility" means a place that provides in which it
85	is undertaken to provide continuing care.
86	(8)(5)  "Licensed" means that the provider has obtained a
87	certificate of authority from the department.
88	(9)(6)  "Provider" means the owner or operator, whether a
89	natural person, partnership or other unincorporated association,
90	however organized, trust, or corporation, of an institution,
91	building, residence, or other place, whether operated for profit
92	or not, which owner or operator provides undertakes to provide
93	continuing care for a fixed or variable fee, or for any other
94	remuneration of any type, whether fixed or variable, for the
95	period of care, payable in a lump sum or lump sum and monthly
96	maintenance charges or in installments, but does not mean an any
97	entity that has existed and continuously operated a facility
98	located on at least no less than 63 acres in this state
99	providing residential lodging to members and their spouses for
100	at least 66 years on or before July 1, 1989, and such facility
101	has the residential capacity of 500 persons, is directly or
102	indirectly owned or operated by a nationally recognized
103	fraternal organization, is not open to the public, and accepts
104	only its members and their spouses as residents at such a
105	facility.
106	(10)(7)  "Records" means the permanent financial,
107	directory, and personnel information and data maintained by a
108	provider pursuant to this chapter.
109	(11)(8)  "Resident" means a purchaser of, or a nominee of,
110	or a subscriber to, a continuing care agreement. Such an
111	agreement does may not be construed to give the resident a part
112	ownership of the facility in which the resident is to reside,
113	unless expressly provided for in the agreement.
114	(6)(9)  "Generally accepted accounting principles" means
115	those accounting principles and practices adopted by the
116	Financial Accounting Standards Board and the American Institute
117	of Certified Public Accountants, including Statement of Position
118	90-8 with respect to any full year to which the statement
119	applies.
120	(7)(10)  "Insolvency" means the condition in which the
121	provider is unable to pay its obligations as they come due in
122	the normal course of business.
123	(1)(11)  "Advertising" means the dissemination of any
124	written, visual, or electronic information by a provider, or any
125	person affiliated with or controlled by a provider, to potential
126	residents or their representatives for the purpose of inducing
127	such persons to subscribe to or enter into a contract to reside
128	in a continuing care community that is subject to this chapter
129	covered by this act.
130	Section 2.  Section 651.012, Florida Statutes, is amended
131	to read:
132	651.012  Exempted facility; written disclosure of
133	exemption.-Any facility exempted under ss. 632.637(1)(e) and
134	651.011(9) 651.011(6) must provide written disclosure of such
135	exemption to each person admitted to the facility after October
136	1, 1996. This disclosure must be written using language likely
137	to be understood by the person and must briefly explain the
138	exemption provisions of ss. 632.637(1)(e) and 651.011(6).
139	Section 3.  Paragraph (b) of subsection (2) of section
140	651.022, Florida Statutes, is amended, paragraph (g) is added to
141	that subsection, and paragraphs (i) and (j) of subsection (3) of
142	that section are amended, to read:
143	651.022  Provisional certificate of authority;
144	application.-
145	(2)  The application for a provisional certificate of
146	authority shall be on a form prescribed by the commission and
147	shall contain the following information:
148	(b)  The full names, residences, and business addresses of:
149	1.  The proprietor, if the applicant or provider is an
150	individual.
151	2.  Every partner or member, if the applicant or provider
152	is a partnership or other unincorporated association, however
153	organized, having fewer than 50 partners or members, together
154	with the business name and address of the partnership or other
155	organization.
156	3.  The principal partners or members, if the applicant or
157	provider is a partnership or other unincorporated association,
158	however organized, having 50 or more partners or members,
159	together with the business name and business address of the
160	partnership or other organization. If such unincorporated
161	organization has officers and a board of directors, the full
162	name and business address of each officer and director may be
163	set forth in lieu of the full name and business address of its
164	principal members.
165	4.  The corporation and each officer and director thereof,
166	if the applicant or provider is a corporation.
167	5.  Every trustee and officer, if the applicant or provider
168	is a trust.
169	6.  The manager, whether an individual, corporation,
170	partnership, or association.
171	7.  Any stockholder holding at least a 10 percent 10-
172	percent interest in the operations of the facility in which the
173	care is to be offered.
174	8.  Any person whose name is required to be provided in the
175	application under the provisions of this paragraph and who owns
176	any interest in or receives any remuneration from, either
177	directly or indirectly, any professional service firm,
178	association, trust, partnership, or corporation providing goods,
179	leases, or services to the facility for which the application is
180	made, with a real or anticipated value of $10,000 $500 or more,
181	and the name and address of the professional service firm,
182	association, trust, partnership, or corporation in which such
183	interest is held. The applicant shall describe such goods,
184	leases, or services and the probable cost to the facility or
185	provider and shall describe why such goods, leases, or services
186	should not be purchased from an independent entity.
187	9.  Any person, corporation, partnership, association, or
188	trust owning land or property leased to the facility, along with
189	a copy of the lease agreement.
190	10.  Any affiliated parent or subsidiary corporation or
191	partnership.
192	(g)  The forms of the continuing care residency contracts,
193	reservation contracts, escrow agreements, and wait list
194	contracts, if applicable, which are proposed to be used by the
195	provider in the furnishing of care. If the office finds that the
196	continuing care contracts and escrow agreements comply with ss.
197	651.023(1)(c), 651.033, and 651.055, it shall approve them.
198	Thereafter, no other form of contract or agreement may be used
199	by the provider until it has been submitted to the office and
200	approved.
201	(3)  In addition to the information required in subsection
202	(2), an applicant for a provisional certificate of authority
203	shall submit a market feasibility study. The market feasibility
204	study shall include at least the following information:
205	(i)  The application for a provisional certificate of
206	authority shall be accompanied by the forms of the continuing
207	care residency and reservation contracts and escrow agreements
208	proposed to be used by the provider in the furnishing of care.
209	If the office finds that the continuing care contracts and
210	escrow agreements comply with ss. 651.023(1)(c), 651.033, and
211	651.055, it shall approve them. Thereafter, no other form of
212	contract or agreement may be used by the provider until it has
213	been submitted to the office and approved.
214	(i)(j)  The name of the person who prepared the feasibility
215	study and the experience of such person in preparing similar
216	studies or otherwise consulting in the field of continuing care.
217	Section 4.  Subsection (2) of section 651.0235, Florida
218	Statutes, is amended to read:
219	651.0235  Validity of provisional certificates of authority
220	and certificates of authority.-
221	(2)  If the provider fails to meet the requirements of this
222	chapter for a provisional certificate of authority or a
223	certificate of authority, the office may notify the provider of
224	any deficiencies and require the provider to correct such
225	deficiencies within a period to be determined by the office. If
226	such deficiencies are not corrected within 20 days after the
227	notice to the provider, or within less time at the discretion of
228	the office, the office shall notify the Continuing Care Advisory
229	Council, which may assist the facility in formulating a remedial
230	plan to be submitted to the office within no later than 60 days
231	after from the date of notification. The time period for
232	correcting the granted to correct deficiencies may be extended
233	upon submission of a plan for corrective action approved by the
234	office. If such deficiencies have not been cleared by the
235	expiration of such time period, as extended, the office shall
236	petition for a delinquency proceeding or pursue such other
237	relief as is provided for under this chapter, as the
238	circumstances may require.
239	Section 5.  Subsection (2) of section 651.026, Florida
240	Statutes, is amended to read:
241	651.026  Annual reports.-
242	(2)  The annual report shall be in such form as the
243	commission prescribes and shall contain at least the following:
244	(a)  Any change in status with respect to the information
245	required to be filed under s. 651.022(2).
246	(b)  Financial statements audited by an independent
247	certified public accountant, which must shall contain, for two
248	or more periods if the facility has been in existence that long,
249	all of the following:
250	1.  An accountant's opinion and, in accordance with
251	generally accepted accounting principles:
252	a.  A balance sheet;
253	b.  A statement of income and expenses;
254	c.  A statement of equity or fund balances; and
255	d.  A statement of changes in cash flows.; and
256	2.  Notes to the financial statements considered customary
257	or necessary for to full disclosure or adequate understanding of
258	the financial statements, financial condition, and operation.
259	(c)  The following financial information:
260	1.  A detailed listing of the assets maintained in the
261	liquid reserve as required under in s. 651.035 and in accordance
262	with part II of chapter 625;
263	2.  A schedule giving additional information relating to
264	property, plant, and equipment having an original cost of at
265	least $25,000, so as to show in reasonable detail with respect
266	to each separate facility original costs, accumulated
267	depreciation, net book value, appraised value or insurable value
268	and date thereof, insurance coverage, encumbrances, and net
269	equity of appraised or insured value over encumbrances. Any
270	property not used in continuing care must shall be shown
271	separately from property used in continuing care;
272	3.  The level of participation in Medicare or Medicaid
273	programs, or both;
274	4.  A statement of all fees required of residents,
275	including, but not limited to, a statement of the entrance fee
276	charged, the monthly service charges, the proposed application
277	of the proceeds of the entrance fee by the provider, and the
278	plan by which the amount of the entrance fee is determined if
279	the entrance fee is not the same in all cases; and
280	5.  Any change or increase in fees if when the provider
281	changes either the scope of, or the rates for, care or services,
282	regardless of whether the change involves the basic rate or only
283	those services available at additional costs to the resident.
284	6.a.  If the provider has more than one certificated
285	facility, or has operations that are not licensed under this
286	chapter, it shall submit a balance sheet, statement of income
287	and expenses, statement of equity or fund balances, and
288	statement of cash flows statement of operations for each
289	facility licensed under this chapter as supplemental information
290	to the audited financial statements required under paragraph (b)
291	as part of the annual report.
292	b.  If the provider has operations that are not Florida
293	certificated facilities, the provider shall also submit as
294	supplemental information to the audited financial statements,
295	balance sheets, statements of changes in equity, and statements
296	of cash flows for each Florida certificated facility.
297	(d)  Such other reasonable data, financial statements, and
298	pertinent information as the commission or office may require
299	with respect to the provider or the facility, or its directors,
300	trustees, members, branches, subsidiaries, or affiliates, to
301	determine the financial status of the facility and the
302	management capabilities of its managers and owners.
303	(e)  Each facility shall file with the office annually,
304	together with the annual report required by this section, a
305	computation of its minimum liquid reserve calculated in
306	accordance with s. 651.035 on a form prescribed by the
307	commission.
308	(f)  If, due to a change in generally accepted accounting
309	principles, the balance sheet, statement of income and expenses,
310	statement of equity or fund balances, or statement of cash flows
311	is known by any other name or title, the annual report must
312	contain financial statements using the changed names or titles
313	that most closely correspond to a balance sheet, statement of
314	income and expenses, statement of equity or fund balances, and
315	statement of changes in cash flows.
316	Section 6.  Paragraph (d) of subsection (1) of section
317	651.033, Florida Statutes, is amended, and paragraph (d) is
318	added to subsection (3) of that section, to read:
319	651.033  Escrow accounts.-
320	(1)  When funds are required to be deposited in an escrow
321	account pursuant to s. 651.022, s. 651.023, s. 651.035, or s.
322	651.055:
323	(d)  All funds deposited in an escrow account, if invested,
324	shall be invested as set forth in part II of chapter 625;
325	however, such investment may shall not diminish the funds held
326	in escrow below the amount required by this chapter. All Funds
327	deposited in an escrow account are shall not be subject to any
328	charges by the escrow agent except escrow agent fees associated
329	with administering the accounts, or subject to any liens,
330	judgments, garnishments, creditor's claims, or other
331	encumbrances against the provider or facility except as provided
332	in s. 651.035(1) 651.035(2).
333	(3)  In addition, when entrance fees are required to be
334	deposited in an escrow account pursuant to s. 651.022, s.
335	651.023, or s. 651.055:
336	(d)  A provider may assess a nonrefundable fee, which is
337	separate from the entrance fee, for processing a prospective
338	resident's application for continuing care.
339	Section 7.  Section 651.035, Florida Statutes, is amended
340	to read:
341	651.035  Minimum liquid reserve requirements.-
342	(1)  A provider shall maintain in escrow a minimum liquid
343	reserve consisting of the following reserves, as applicable:
344	reserves specified in subsection (2).
345	(2)(a)  Each A provider shall maintain in escrow as a debt
346	service reserve an amount equal to the aggregate amount of all
347	principal and interest payments due during the fiscal year on
348	any mortgage loan or other long-term financing of the facility,
349	including property taxes as recorded in the audited financial
350	statements required under s. 651.026. The amount must shall
351	include any leasehold payments and all costs related to such
352	payments. If principal payments are not due during the fiscal
353	year, the provider shall maintain in escrow as a minimum liquid
354	reserve an amount equal to interest payments due during the next
355	12 months on any mortgage loan or other long-term financing of
356	the facility, including property taxes.
357	(b)  A provider that which has outstanding indebtedness
358	that which requires what is normally referred to as a "debt
359	service reserve" to be held in escrow pursuant to a trust
360	indenture or mortgage lien on the facility and for which the
361	debt service reserve may only be used to pay principal and
362	interest payments on the debt that which the debtor is obligated
363	to pay, and which may include property taxes and insurance, may
364	include such debt service reserve in computing the its
365	computation of its minimum liquid reserve needed to satisfy this
366	subsection if, provided that the provider furnishes to the
367	office a copy of the agreement under which such debt service is
368	held, together with a statement of the amount being held in
369	escrow for the debt service reserve, certified by the lender or
370	trustee and the provider to be correct. The trustee shall
371	provide the office with any information concerning the debt
372	service reserve account upon request of the provider or the
373	office.
374	(c)  Each provider shall maintain in escrow an operating
375	reserve in an amount equal to 30 percent of the total operating
376	expenses projected in the feasibility study required by s.
377	651.023 for the first 12 months of operation. Thereafter, each
378	provider shall maintain in escrow an operating reserve in an
379	amount equal to 15 percent of the total operating expenses in
380	the annual report filed pursuant to s. 651.026. If Where a
381	provider has been in operation for more than 12 months, the
382	total annual operating expenses shall be determined by averaging
383	the total annual operating expenses reported to the office by
384	the number of annual reports filed with the office within the
385	immediate preceding 3-year period subject to adjustment if in
386	the event there is a change in the number of facilities owned.
387	For purposes of this subsection, total annual operating expenses
388	shall include all expenses of the facility except: depreciation
389	and amortization; interest and property taxes included in
390	paragraph (a) subsection (1); extraordinary expenses that which
391	are adequately explained and documented in accordance with
392	generally accepted accounting principles; liability insurance
393	premiums in excess of those paid in calendar year 1999; and
394	changes in the obligation to provide future services to current
395	residents. For providers initially licensed during or after
396	calendar year 1999, liability insurance shall be included in the
397	total operating expenses in an amount not to exceed the premium
398	paid during the first 12 months of facility operation. Beginning
399	January 1, 1993, the operating reserves required under this
400	subsection shall be in an unencumbered account held in escrow
401	for the benefit of the residents. Such funds may not be
402	encumbered or subject to any liens or charges by the escrow
403	agent or judgments, garnishments, or creditors' claims against
404	the provider or facility. However, if a facility had a lien,
405	mortgage, trust indenture, or similar debt instrument in place
406	before prior to January 1, 1993, which encumbered all or any
407	part of the reserves required by this subsection and such funds
408	were used to meet the requirements of this subsection, then such
409	arrangement may be continued, unless a refinancing or
410	acquisition has occurred, and the provider shall be in
411	compliance with this subsection.
412	(d)  Each provider shall maintain in escrow a renewal and
413	replacement reserve in an amount equal to 15 percent of the
414	total accumulated depreciation based on the audited financial
415	statement required to be filed pursuant to s. 651.026, not to
416	exceed 15 percent of the facility's average operating expenses
417	for the past 3 fiscal years based on the audited financial
418	statements for each of those such years. For a provider who is
419	an operator of a facility but is not the owner and depreciation
420	is not included as part of the provider's financial statement,
421	the renewal and replacement reserve required by this paragraph
422	must shall equal 15 percent of the total operating expenses of
423	the provider, as described in this section. Each provider
424	licensed before prior to October 1, 1983, shall be required to
425	fully fund the renewal and replacement reserve by October 1,
426	2003, by multiplying the difference between the former escrow
427	requirement and the present escrow requirement by the number of
428	years the facility has been in operation after October 1, 1983.
429	(3)  In lieu of fulfilling the escrow requirements provided
430	in subsections (1) and (2), each facility licensed prior to
431	October 1, 1983, shall be required to maintain in escrow the
432	minimum liquid reserve that would have been required under this
433	section as it existed on October 1, 1982, plus 5 percent of the
434	difference between the former escrow requirement and the present
435	escrow requirement multiplied by the number of years the
436	facility has been in operation after October 1, 1983. Beginning
437	October 1, 2003, the escrow requirements provided in subsections
438	(1) and (2) shall apply in full to facilities licensed before
439	October 1, 1983.
440	(2)(4)(a)  In facilities where not all residents are under
441	continuing care contracts, the reserve requirements of
442	subsection (1) (2) shall be computed only with respect to the
443	proportional share of operating expenses which are that is
444	applicable to residents as defined in s. 651.011. For purposes
445	of this calculation, the proportional share shall be based upon
446	the ratio of residents under continuing care contracts to those
447	residents who do not hold such contracts.
448	(b)  In facilities that which have voluntarily and
449	permanently discontinued marketing continuing care contracts,
450	the office may allow a reduced debt service reserve as required
451	in subsection (1) based upon the ratio of residents under
452	continuing care contracts to those residents who do not hold
453	such contracts if the office finds that such reduction is not
454	inconsistent with the security protections intended by this
455	chapter. In making this determination, the office may consider
456	such factors as the financial condition of the facility, the
457	provisions of the outstanding continuing care contracts, the
458	ratio of residents under continuing care agreements to those
459	residents who do not hold a continuing care contract, current
460	occupancy rates, previous sales and marketing efforts, life
461	expectancy of the remaining contract holders, and the written
462	policies of the board of directors of the provider or a similar
463	board.
464	(3)(5)  If When principal and interest payments are paid to
465	a trust that which is beneficially held by the residents as
466	described in s. 651.023(5), the office may waive all or any
467	portion of the escrow requirements for mortgage principal and
468	interest contained in subsection (1) if the office finds that
469	such waiver is not inconsistent with the security protections
470	intended by this chapter.
471	(4)(6)  The office, upon approval of a plan for fulfilling
472	the requirements of this section and upon demonstration by the
473	facility of an annual increase in liquid reserves, may extend
474	the time for compliance.
475	(5)(7)(a)  A provider may satisfy the minimum liquid
476	reserve requirements of this section by acquiring from a
477	financial institution, as specified in paragraph (b), a clean,
478	unconditional irrevocable letter of credit in an amount equal to
479	the requirements of this section.
480	(a)  The letter of credit must shall be issued by a
481	financial institution participating in the State of Florida
482	Treasury Certificate of Deposit Program, and must be approved by
483	the letter of credit shall be subject to the approval of the
484	office before prior to issuance and before prior to any renewal
485	or modification thereof. At a minimum, the letter of credit must
486	shall provide for:
487	1.  Ninety days' prior written notice to both the provider
488	and the office of the financial institution's determination not
489	to renew or extend the term of the letter of credit.
490	2.  Unless otherwise arranged by the provider to the
491	satisfaction of the office, deposit by the financial institution
492	of such letter of credit funds in an account designated by the
493	office no later than 30 days before prior to the expiration of
494	the letter of credit.
495	3.  Deposit by the financial institution of such letter of
496	credit funds in an account designated by the office within no
497	later than 4 business days following written instructions from
498	the office that, in the sole judgment of the office, funding of
499	the minimum liquid reserve is required.
500	(b)  The terms of the such letter of credit must shall be
501	approved by the office and the long-term debt of the financial
502	institution providing such letter of credit must shall be rated
503	in one of their top three long-term debt rating categories by
504	either Moody's Investors Service, Standard & Poor's Corporation,
505	or a recognized securities rating agency acceptable to the
506	office.
507	(c)  The letter of credit must shall name the office as
508	beneficiary.
509	(d)  Notwithstanding any other provision of this section, a
510	provider using utilizing a letter of credit pursuant to this
511	subsection shall, at all times, have and maintain in escrow an
512	operating cash reserve equal to 2 months' operating expenses as
513	determined pursuant to s. 651.026.
514	(e)  If In the event the issuing financial institution no
515	longer participates in the State of Florida Treasury Certificate
516	of Deposit Program, such financial institution shall deposit as
517	collateral with the department eligible securities, as
518	prescribed by s. 625.52, having a market value equal to or
519	greater than 100 percent of the stated amount of the letter of
520	credit.
521	(6)(8)(a)  Each fiscal year, a provider may withdraw up to
522	33 percent of the total renewal and replacement reserve
523	available. The reserve available is equal to the market value of
524	the invested reserves at the end of the provider's prior fiscal
525	year. The withdrawal must is to be used for capital items or
526	major repairs., and
527	(a)  Before any funds are eligible for withdrawal, the
528	provider must obtain written permission from the office by
529	submitting the following information:
530	1.  The amount of the withdrawal and the intended use of
531	the proceeds.
532	2.  A board resolution and sworn affidavit signed by two
533	officers or general partners of the provider which indicates
534	approval of the withdrawal and use of the funds.
535	3.  Proof that the provider has met all funding
536	requirements for the operating, debt service, and renewal and
537	replacement reserves computed for the previous fiscal year.
538	4.  Anticipated payment schedule for refunding the renewal
539	and replacement reserve fund.
540	(b)  Within 30 days after the withdrawal of funds from the
541	renewal and replacement reserve fund, the provider must begin
542	refunding the reserve account in equal monthly payments that
543	which allow for a complete funding of the such withdrawal within
544	36 months. If the payment schedule required under subparagraph
545	(a)4. has changed, the provider must update the office with the
546	new payment schedule. If the provider fails to make a required
547	monthly payment or the payment is late, the provider must notify
548	the office within 5 days after the due date of the payment. No
549	additional withdrawals from the renewal and replacement reserve
550	will be allowed until all scheduled payments are current.
551	Section 8.  Paragraphs (d) and (g) of subsection (1) and
552	subsections (2) and (5) of section 651.055, Florida Statutes,
553	are amended to read:
554	651.055  Contracts; right to rescind.-
555	(1)  Each continuing care contract and each addendum to
556	such contract shall be submitted to and approved by the office
557	prior to its use in this state. Thereafter, no other form of
558	contract shall be used by the provider unless it has been
559	submitted to and approved by the office. Each contract shall:
560	(d)  Describe the health and financial conditions required
561	for a person to be accepted as a resident and to continue as a
562	resident, once accepted, including the effect of any change in
563	the health or financial condition of the a person between the
564	date of submitting an application for admission to the facility
565	and entering into a continuing care contract and the date of
566	taking occupancy in a unit. If a prospective resident signs a
567	contract but postpones moving into the facility, the individual
568	is deemed to be occupying a unit at the facility when he or she
569	pays the entrance fee or any portion of the fee, other than a
570	reservation deposit, and begins making monthly maintenance fee
571	payments. Such resident may rescind the contract and receive a
572	full refund of any funds paid, without penalty or forfeiture,
573	within 7 days after executing the contract as specified in
574	subsection (2).
575	(g)  Provide that the contract may be canceled by upon the
576	giving at least 30 days' of written notice of cancellation of at
577	least 30 days by the provider, the resident, or the person who
578	provided the transfer of property or funds for the care of such
579	resident; however, if a contract is canceled because there has
580	been a good faith determination that a resident is a danger to
581	himself or herself or others, only such notice as is reasonable
582	under the circumstances is shall be required.
583	1.  The contract must also shall further provide in clear
584	and understandable language, in print no smaller than the
585	largest type used in the body of the contract, the terms
586	governing the refund of any portion of the entrance fee.
587	2.  For a resident whose contract with the facility
588	provides that the resident does not receive a transferable
589	membership or ownership right in the facility, and who has
590	occupied his or her unit, the refund shall be calculated on a
591	pro rata basis with the facility retaining up to no more than 2
592	percent per month of occupancy by the resident and up to a 5
593	percent no more than a 4-percent fee for processing fee. Such
594	refund must shall be paid within no later than 120 days after
595	the giving the of notice of intention to cancel.
596	3.  In addition to a processing fee, if the contract
597	provides for the facility to retain up to no more than 1 percent
598	per month of occupancy by the resident, it may provide that such
599	refund will be paid from the proceeds of the next entrance fees
600	received by the provider for units for which there are no prior
601	claims by any resident until paid in full or, if the provider
602	has discontinued marketing continuing care contracts, within 200
603	days after the date of notice.
604	4.  Unless the provisions of subsection (5) applies apply,
605	for any prospective resident, regardless of whether or not such
606	a resident receives a transferable membership or ownership right
607	in the facility, who cancels the contract before prior to
608	occupancy of the unit, the refund shall be the entire amount
609	paid toward the entrance fee shall be refunded, less a
610	processing fee of up to 5 percent not to exceed 4 percent of the
611	entire entrance fee; however, the but in no event shall such
612	processing fee may not exceed the amount paid by the prospective
613	resident. Such refund must shall be paid within no later than 60
614	days after the giving the of notice of intention to cancel. For
615	a resident who has occupied his or her unit and who has received
616	a transferable membership or ownership right in the facility,
617	the foregoing refund provisions do shall not apply but are shall
618	be deemed satisfied by the acquisition or receipt of a
619	transferable membership or an ownership right in the facility.
620	The provider may shall not charge any fee for the transfer of
621	membership or sale of an ownership right.
622	(2)  A resident has the right to rescind a continuing care
623	contract and receive a full refund of any funds paid, without
624	penalty or forfeiture, within 7 days after executing the
625	contract. A resident may shall not be required to move into the
626	facility designated in the contract before the expiration of the
627	7-day period. During the 7-day period, the resident's funds must
628	be held in an escrow account unless otherwise requested by the
629	resident pursuant to s. 651.033(3)(c).
630	(5)  Except for a resident who postpones moving into the
631	facility but is deemed to have occupied a unit as described in
632	paragraph (1)(d), if a prospective resident dies before
633	occupying the facility or, through illness, injury, or
634	incapacity, is precluded from becoming a resident under the
635	terms of the continuing care contract, the contract is
636	automatically canceled, and the prospective resident or his or
637	her the resident's legal representative shall receive a full
638	refund of all moneys paid to the facility, except those costs
639	specifically incurred by the facility at the request of the
640	prospective resident and set forth in writing in a separate
641	addendum, signed by both parties, to the contract.
642	Section 9.  Section 651.081, Florida Statutes, is amended
643	to read:
644	651.081  Continuing care facilities Residents' council
645	organizations.-
646	(1)  Residents living in a facility holding a valid
647	certificate of authority under this chapter have the right of
648	self-organization, the right to be represented by an individual
649	of their own choosing, and the right to engage in concerted
650	activities for the purpose of keeping informed on the operation
651	of the facility that which is caring for them or for the purpose
652	of other mutual aid or protection.
653	(2)  A residents' council organization created for the
654	purpose of representing residents on matters set forth in s.
655	651.085 may be established through an election in which the
656	residents, as defined in s. 651.011 this chapter, vote by
657	ballot, either physically or by proxy. If the election is to be
658	held during a meeting, a notice of the organizational meeting
659	must be provided to all residents of the community at least 10
660	business days before the meeting. Notice may be given through
661	internal mailboxes, communitywide newsletters, bulletin boards,
662	in-house television stations, and other similar means of
663	communication. An election for creating a residents' council
664	organization is valid if at least 40 percent of the total
665	resident population participates in the election and a majority
666	of the participants vote affirmatively for the council
667	organization. The initial residents' council organization
668	created under this section is valid for at least 12 months. A
669	residents' organization formalized by If the facility has a
670	residents' association, residents' council, or similarly
671	organized body with bylaws and elected officials, such
672	organization must be recognized as the residents' council
673	organization under this section and s. 651.085. Within 30 days
674	after the election of a newly elected president or chair of the
675	residents' council, the provider shall give the president or
676	chair a copy of this chapter and rules adopted thereunder, or
677	direct him or her to the appropriate public website to obtain
678	this information. There shall be Only one residents' council may
679	organization to represent residents before the governing body of
680	the provider as described in s. 651.085(2).
681	Section 10.  Paragraphs (c) and (f) of subsection (1) of
682	section 651.083, Florida Statutes, are amended, present
683	subsection (5) of that section is redesignated as subsection
684	(6), and a new subsection (5) is added to that section, to read:
685	651.083  Residents' rights.-
686	(1)  No resident of any facility shall be deprived of any
687	civil or legal rights, benefits, or privileges guaranteed by
688	law, by the State Constitution, or by the United States
689	Constitution solely by reason of status as a resident of a
690	facility. Each resident of a facility has the right to:
691	(c)  Unrestricted private communication, including
692	receiving and sending unopened correspondence. This includes the
693	right to receive memos or announcements from or approved for
694	distribution by the residents' council.
695	(f)  Present grievances and recommend changes in policies,
696	procedures, and services to the staff of the facility, governing
697	officials, or any other person without restraint, interference,
698	coercion, discrimination, or reprisal. This right includes
699	access to ombudsman volunteers and advocates and the right to be
700	a member of, and active in, and to associate with, advocacy or
701	special interest groups or associations.
702	(5)  The provider may not restrict a resident's access to
703	the residents' council.
704	Section 11.  Subsections (1) and (2) of section 651.085,
705	Florida Statutes, are amended to read:
706	651.085  Quarterly meetings between residents and the
707	governing body of the provider; resident representation before
708	the governing body of the provider.-
709	(1)  The governing body of a provider, or the designated
710	representative of the provider, shall hold quarterly meetings
711	with the residents of the continuing care facility for the
712	purpose of free discussion of subjects including, but not
713	limited to, income, expenditures, and financial trends and
714	problems as they apply to the facility, as well as a discussion
715	on proposed changes in policies, programs, and services. At
716	quarterly meetings where monthly maintenance fee increases are
717	discussed, a summary of the reasons for raising the fee as
718	specified in subsection (4) must be provided in writing to the
719	president or chair of the residents' council. Upon request of
720	the residents' council organization, a member of the governing
721	body of the provider, such as a board member, a general partner,
722	or a principal owner, or designated representative shall attend
723	such meetings. Residents are shall be entitled to at least 7
724	days' advance notice of each quarterly meeting. An agenda and
725	any materials that will be distributed by the governing body or
726	representative of the provider shall be posted in a conspicuous
727	place at the facility and shall be available upon request to
728	residents of the facility. The office shall request verification
729	from a facility that quarterly meetings are held and open to all
730	residents if when it receives a complaint from the residents'
731	council that a facility is not in compliance with the provisions
732	of this subsection. In addition, a facility shall report to the
733	office in the annual report required under s. 651.026 the dates
734	on which quarterly meetings were held during the reporting
735	period.
736	(2)  A residents' council organization formed pursuant to
737	s. 651.081, members of which are elected by the residents, may
738	designate a resident to represent them before the governing body
739	of the provider or organize a meeting or ballot election of the
740	residents of the facility to determine whether to elect a
741	resident to represent them before the governing body of the
742	provider. If a residents' council organization as described in
743	s. 651.081 does not exist, any resident may organize a meeting
744	or ballot election of the residents of the facility to determine
745	whether to elect a resident to represent them before the
746	governing body and, if applicable, elect the representative. The
747	residents' council organization, or the resident that organizes
748	a meeting or ballot election to elect a representative, shall
749	give all residents of the facility notice at least 10 business
750	days before the meeting or election. Notice may be given through
751	internal mailboxes, communitywide newsletters, bulletin boards,
752	in-house television stations, and other similar means of
753	communication. An election of the representative is valid if at
754	least 40 percent of the total resident population participates
755	in the election and a majority of the participants vote
756	affirmatively for the representative. The initial designated
757	representative elected under this section shall be elected to
758	serve for a period of at least 12 months.
759	Section 12.  Section 651.091, Florida Statutes, is amended
760	to read:
761	651.091  Availability, distribution, and posting of reports
762	and records; requirement of full disclosure.-
763	(1)  Each continuing care facility shall maintain as public
764	information, available upon request, records of all cost and
765	inspection reports pertaining to that facility which that have
766	been filed with or issued by any governmental agency. A copy of
767	each such report shall be retained in such records for at least
768	not less than 5 years after from the date the report is filed or
769	issued. Each facility shall also maintain as public information,
770	available upon request, all annual statements that have been
771	filed with the office. For purposes of this section, a
772	management company or operator is considered an agent of the
773	provider.
774	(2)  Every continuing care facility shall:
775	(a)  Display the certificate of authority in a conspicuous
776	place inside the facility.
777	(b)  Post in a prominent position in the facility which is
778	so as to be accessible to all residents and to the general
779	public a concise summary of the last examination report issued
780	by the office, with references to the page numbers of the full
781	report noting any deficiencies found by the office, and the
782	actions taken by the provider to rectify such deficiencies,
783	indicating in such summary where the full report may be
784	inspected in the facility.
785	(c)  Post in a prominent position in the facility which is
786	so as to be accessible to all residents and to the general
787	public a summary of the latest annual statement, indicating in
788	the summary where the full annual statement may be inspected in
789	the facility. A listing of any proposed changes in policies,
790	programs, and services must shall also be posted.
791	(d)  Distribute a copy of the full annual statement to the
792	president or chair of the residents' council within 30 days
793	after the filing of the annual report with the office, and
794	designate a staff person to provide explanation thereof.
795	(e)  Notify the residents' council of any plans filed with
796	the office to obtain new financing, additional financing, or
797	refinancing for the facility and of any applications to the
798	office for any expansion of the facility.
799	(f)  Deliver to the president or chair of the residents'
800	council a summary of entrance fees collected and refunds made
801	during the time period covered in the annual report and the
802	refund balances due at the end of the report period.
803	(g)  Deliver to the president or chair of the residents'
804	council a copy of each quarterly statement within 30 days after
805	the quarterly statement is filed with the office if the facility
806	is required to file quarterly.
807	(h)  Upon request, deliver to the president or chair of the
808	residents' council a copy of any newly approved continuing care
809	contract within 30 days after approval by the office.
810	(3)  Before entering into a contract to furnish continuing
811	care, the provider undertaking to furnish the care, or the agent
812	of the provider, shall make full disclosure, and provide copies
813	of the disclosure documents to the prospective resident or his
814	or her legal representative, of the following information:
815	(a)  The contract to furnish continuing care.
816	(b)  The summary listed in paragraph (2)(b).
817	(c)  All ownership interests and lease agreements,
818	including information specified in s. 651.022(2)(b)8.
819	(d)  In keeping with the intent of this subsection relating
820	to disclosure, the provider shall make available for review,
821	master plans approved by the provider's governing board and any
822	plans for expansion or phased development, to the extent that
823	the availability of such plans will not put at risk real estate,
824	financing, acquisition, negotiations, or other implementation of
825	operational plans and thus jeopardize the success of
826	negotiations, operations, and development.
827	(e)  Copies of the rules and regulations of the facility
828	and an explanation of the responsibilities of the resident.
829	(f)  The policy of the facility with respect to admission
830	to and discharge from the various levels of health care offered
831	by the facility.
832	(g)  The amount and location of any reserve funds required
833	by this chapter, and the name of the person or entity having a
834	claim to such funds in the event of a bankruptcy, foreclosure,
835	or rehabilitation proceeding.
836	(h)  A copy of s. 651.071.
837	(i)(h)  A copy of the resident's rights as described in s.
838	651.083.
839	(4)  A true and complete copy of the full disclosure
840	document to be used must shall be filed with the office before
841	prior to its use. A resident or prospective resident or his or
842	her legal representative may shall be permitted to inspect the
843	full reports referred to in paragraph (2)(b); the charter or
844	other agreement or instrument required to be filed with the
845	office pursuant to s. 651.022(2), together with all amendments
846	thereto; and the bylaws of the corporation or association, if
847	any. Upon request, copies of the reports and information shall
848	be provided to the individual requesting them if the individual
849	agrees to pay a reasonable charge to cover copying costs.
850	Section 13.  Subsection (1) of section 651.105, Florida
851	Statutes, is amended, and subsection (5) is added to that
852	section, to read:
853	651.105  Examination and inspections.-
854	(1)  The office may at any time, and shall at least once
855	every 3 years, examine the business of any applicant for a
856	certificate of authority and any provider engaged in the
857	execution of care contracts or engaged in the performance of
858	obligations under such contracts, in the same manner as is
859	provided for the examination of insurance companies pursuant to
860	s. 624.316. For a provider as defined in s. 651.028, such
861	examinations shall take place at least once every 5 years. Such
862	examinations shall be made by a representative or examiner
863	designated by the office, whose compensation will be fixed by
864	the office pursuant to s. 624.320. Routine examinations may be
865	made by having the necessary documents submitted to the office;
866	and, for this purpose, financial documents and records
867	conforming to commonly accepted accounting principles and
868	practices, as required under s. 651.026, are will be deemed
869	adequate. The final written report of each such examination must
870	shall be filed with the office and, when so filed, constitutes
871	will constitute a public record. Any provider being examined
872	shall, upon request, give reasonable and timely access to all of
873	its records. The representative or examiner designated by the
874	office may at any time examine the records and affairs and
875	inspect the physical property of any provider, whether in
876	connection with a formal examination or not.
877	(5)  At the time of the routine examination, the office
878	shall determine if all disclosures required under this chapter
879	have been made to the president or chair of the residents'
880	council.
881	Section 14.  Subsections (1) through (4) of section
882	651.114, Florida Statutes, are amended to read:
883	651.114  Delinquency proceedings; remedial rights.-
884	(1)  Upon determination by the office that a provider is
885	not in compliance with this chapter, the office may notify the
886	chair of the Continuing Care Advisory Council, who may assist
887	the office in formulating a corrective action plan.
888	(2)  A provider shall make available to the advisory
889	council, within no later than 30 days after being requested to
890	do so by the advisory council, a plan for obtaining compliance
891	or solvency.
892	(3)  Within The council shall, no later than 30 days after
893	notification, the advisory council shall:
894	(a)  Consider and evaluate the plan submitted by the
895	provider.
896	(b)  Discuss the problem and solutions with the provider.
897	(c)  Conduct such other business as is necessary.
898	(d)  Report its findings and recommendations to the office,
899	which may require additional modification of the plan.
900	(4)(a)  After receiving Upon approval of a plan by the
901	office, the provider shall submit monthly a progress report
902	monthly to the advisory council or the office, or both, in a
903	manner prescribed by the office.
904	(b)  After a period of 3 months, or at any earlier time
905	deemed necessary, the council shall evaluate the progress by the
906	provider and shall advise the office of its findings.
907	Section 15.  Subsection (3) of section 651.1151, Florida
908	Statutes, is amended to read:
909	651.1151  Administrative, vendor, and management
910	contracts.-
911	(3)  Any contract with an affiliate, an entity controlled
912	by the provider, or an entity controlled by an affiliate of the
913	provider for administrative, vendor, or management services
914	entered into or renewed after October 1, 1991, must include
915	shall contain a provision that the contract will shall be
916	canceled upon issuance of an order by the office pursuant to
917	this section. A copy of the current management services
918	contract, pursuant to this section, if any, must be on file in
919	the marketing office or other area accessible area to residents
920	and the appropriate residents' council resident organizations.
921	Section 16.  Section 651.121, Florida Statutes, is amended
922	to read:
923	651.121  Continuing Care Advisory Council.-
924	(1)  The Continuing Care Advisory Council to the office is
925	created to consist of 10 members who are residents of this state
926	appointed by the Governor and geographically representative of
927	this state. Three members shall be administrators of facilities
928	that which hold valid certificates of authority under this
929	chapter and shall have been actively engaged in the offering of
930	continuing care agreements in this state for 5 years before
931	appointment. The remaining members shall include:
932	(a)  A representative of the business community whose
933	expertise is in the area of management.
934	(b)  A representative of the financial community who is not
935	a facility owner or administrator.
936	(c)  A certified public accountant.
937	(d)  An attorney.
938	(e)  Three residents who hold continuing care agreements
939	with a facility certified in this state.
940	(2)  The term of office for each member shall be 3 years,
941	or until the member's successor has been appointed and
942	qualifies.
943	(3)  The council members shall serve without pay, but shall
944	be reimbursed for per diem and travel expenses by the office in
945	accordance with s. 112.061.
946	(4)  Each prospective council member shall submit to the
947	appointing officer a statement detailing any financial interest
948	of 10 percent or more in one or more continuing care facilities,
949	including, but not limited to, ownership interest in a facility,
950	property leased to a facility, and ownership in any company
951	providing goods or services to a facility. This statement shall
952	include the name and address of each facility involved and the
953	extent and character of the financial interest of the applicant.
954	Upon appointment of the council member, this statement shall
955	become a public document.
956	(5)  The council shall:
957	(a)  Meet at least once a year and, at such annual meeting,
958	elect a chair from their number and elect or appoint a vice
959	chair secretary, each of whom shall hold office for 1 year and
960	thereafter until a successor is elected and qualified.
961	(b)  Hold other meetings at such times and places as the
962	office or the chair of the council may direct.
963	(c)  Keep a record of its proceedings. The books and
964	records of the council shall be prima facie evidence of all
965	matters reported therein and, except for proceedings conducted
966	under s. 651.018, shall be open to inspection at all times.
967	(d)  Act in an advisory capacity to the office on matters
968	pertaining to the operation and regulation of continuing care
969	facilities.
970	(e)  Recommend to the office needed changes in statutes and
971	rules.
972	(f)  Upon the request of the office, assist, with any
973	corrective action, rehabilitation or cessation of business plan
974	of a provider.
975	(6)  A provider shall furnish to the council, no later than
976	14 business days after being requested to do so by the council,
977	all documents and information reasonably requested by the
978	council.
979	(7)  The council chair shall report annually the council's
980	findings and recommendations concerning continuing care
981	facilities to the Executive Office of the Governor and the
982	Commissioner of Insurance Regulation.
983	(8)  At the council's annual meeting, the office shall
984	provide members with a summary and comparison of data on
985	continuing care facilities submitted in the most recent two
986	annual reports and a summary of the number, type, and status of
987	complaints related to continuing care facilities which were
988	filed with the Division of Consumer Services in the Department
989	of Financial Services during the preceding fiscal year.
990	(9)  The office shall notify the council by written
991	memorandum or electronic means of proposed rule changes and
992	scheduled rule workshops and hearings related to the
993	administration of this chapter.
994	Section 17.  Section 651.133, Florida Statutes, is
995	repealed.
996	Section 18.  Subsection (1) of section 628.4615, Florida
997	Statutes, is amended to read:
998	628.4615  Specialty insurers; acquisition of controlling
999	stock, ownership interest, assets, or control; merger or
1000	consolidation.-
1001	(1)  For the purposes of this section, the term "specialty
1002	insurer" means any person holding a license or certificate of
1003	authority as:
1004	(a)  A motor vehicle service agreement company authorized
1005	to issue motor vehicle service agreements as those terms are
1006	defined in s. 634.011;
1007	(b)  A home warranty association authorized to issue "home
1008	warranties" as those terms are defined in s. 634.301(3) and (4);
1009	(c)  A service warranty association authorized to issue
1010	"service warranties" as those terms are defined in s.
1011	634.401(13) and (14);
1012	(d)  A prepaid limited health service organization
1013	authorized to issue prepaid limited health service contracts, as
1014	those terms are defined in chapter 636;
1015	(e)  An authorized health maintenance organization
1016	operating pursuant to s. 641.21;
1017	(f)  An authorized prepaid health clinic operating pursuant
1018	to s. 641.405;
1019	(g)  A legal expense insurance corporation authorized to
1020	engage in a legal expense insurance business pursuant to s.
1021	642.021;
1022	(h)  A provider that which is licensed to operate a
1023	facility that which undertakes to provide continuing care as
1024	those terms are defined in s. 651.011(2), (4), (5), and (6);
1025	(i)  A multiple-employer welfare arrangement operating
1026	pursuant to ss. 624.436-624.446;
1027	(j)  A premium finance company authorized to finance
1028	insurance premiums pursuant to s. 627.828; or
1029	(k)  A corporation authorized to accept donor annuity
1030	agreements pursuant to s. 627.481.
1031	Section 19.  This act shall take effect July 1, 2010.

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