Florida Senate - 2015              PROPOSED COMMITTEE SUBSTITUTE
       Bill No. CS for SB 1126
       
       
       
       
       
                               Ì242306|Î242306                          
       
       594-03720-15                                                    
       Proposed Committee Substitute by the Committee on Fiscal Policy
       (Appropriations Subcommittee on General Government)
    1                        A bill to be entitled                      
    2         An act relating to continuing care communities;
    3         amending s. 651.055, F.S.; revising requirements for
    4         continuing care contracts; amending s. 651.028, F.S.;
    5         revising authority of the Office of Insurance
    6         Regulation to waive requirements for accredited
    7         facilities; amending s. 651.071, F.S.; revising the
    8         subordination of continuing care and continuing care
    9         at-home contracts that are deemed preferred claims in
   10         receivership or liquidation proceedings; amending s.
   11         651.105, F.S.; revising notice requirements; revising
   12         duties of the office; requiring an agent of a provider
   13         to provide a copy of an examination report and
   14         corrective action plan under certain conditions;
   15         amending s. 651.081, F.S.; requiring a residents’
   16         council to provide a forum for certain purposes;
   17         requiring a residents’ council to adopt its own bylaws
   18         and governance documents; amending s. 651.085, F.S.;
   19         revising provisions relating to quarterly meetings
   20         between residents and the governing body of the
   21         provider; revising powers of the residents’ council;
   22         amending s. 651.091, F.S.; revising continuing care
   23         facility reporting requirements; providing an
   24         effective date.
   25          
   26  Be It Enacted by the Legislature of the State of Florida:
   27  
   28         Section 1. Paragraphs (g) through (k) of subsection (1) of
   29  section 651.055, Florida Statutes, are amended to read:
   30         651.055 Continuing care contracts; right to rescind.—
   31         (1) Each continuing care contract and each addendum to such
   32  contract shall be submitted to and approved by the office before
   33  its use in this state. Thereafter, no other form of contract
   34  shall be used by the provider until it has been submitted to and
   35  approved by the office. Each contract must:
   36         (g) Provide that the contract may be canceled by giving at
   37  least 30 days’ written notice of cancellation by the provider,
   38  the resident, or the person who provided the transfer of
   39  property or funds for the care of such resident. However, if a
   40  contract is canceled because there has been a good faith
   41  determination that a resident is a danger to himself or herself
   42  or others, only such notice as is reasonable under the
   43  circumstances is required.
   44         (h)1.Describe The contract must also provide in clear and
   45  understandable language, in print no smaller than the largest
   46  type used in the body of the contract, the terms governing the
   47  refund of any portion of the entrance fee.
   48         1.2. For a resident whose contract with the facility
   49  provides that the resident does not receive a transferable
   50  membership or ownership right in the facility, and who has
   51  occupied his or her unit, the refund shall be calculated on a
   52  pro rata basis with the facility retaining up to 2 percent per
   53  month of occupancy by the resident and up to a 5 percent
   54  processing fee. Such refund must be paid within 120 days after
   55  giving the notice of intention to cancel. For contracts entered
   56  into on or after January 1, 2016, refunds must be made within 90
   57  days after the contract is terminated and the unit is vacated. A
   58  resident who enters into a contract before January 1, 2016, may
   59  voluntarily sign a contract addendum approved by the office that
   60  provides for a revised refund requirement.
   61         2.3. In addition to a processing fee not to exceed 5
   62  percent, if the contract provides for the facility to retain no
   63  more than up to 1 percent per month of occupancy by the resident
   64  and the resident does not receive a transferable membership or
   65  ownership right in the facility, the contract shall, it may
   66  provide that such refund will be paid from one of the following
   67  sources of proceeds:
   68         a. The proceeds of the next entrance fees received by the
   69  provider for units for which there are no prior claims by any
   70  resident until paid in full;
   71         b. The proceeds of the next entrance fee received by the
   72  provider for a like or similar unit as specified in the
   73  residency or reservation contract signed by the resident for
   74  which there are no prior claims by any resident until paid in
   75  full; or
   76         c. The proceeds of the next entrance fee received by the
   77  provider for the unit that is vacated if the contract is
   78  approved by the office before October 1, 2015. A provider may
   79  not use this refund option after October 1, 2016, and must
   80  submit a new or amended contract with an alternative refund
   81  provision to the office for approval by August 2, 2016, if the
   82  provider has discontinued marketing continuing care contracts,
   83  within 200 days after the date of notice.
   84         3. For contracts entered into on or after January 1, 2016,
   85  that provide for a refund in accordance with sub-subparagraph
   86  2.b., the following provisions apply:
   87         a. Any refund that is due upon the resident’s death or
   88  relocation of the resident to another level of care that results
   89  in the termination of the contract must be paid by the earlier
   90  of:
   91         (I) Thirty days after receipt by the provider of the next
   92  entrance fee received for a like or similar unit for which there
   93  is no prior claim by any resident until paid in full; or
   94         (II) Within a specified maximum number of months or years,
   95  determined by the provider and specified in the contract, after
   96  the contract is terminated and the unit is vacated.
   97         b. Any refund that is due to a resident who vacates the
   98  unit and voluntarily terminates a contract after the 7-day
   99  rescission period required in subsection (2) must be paid within
  100  30 days after receipt by the provider of the next entrance fee
  101  for a like or similar unit for which there are no prior claims
  102  by any resident until paid in full and is not subject to the
  103  provisions in sub-subparagraph a. A contract is voluntarily
  104  terminated when a resident provides written notice of intent to
  105  leave and moves out of the continuing care facility after the 7
  106  day rescission period.
  107         4. For purposes of this paragraph, the term “like or
  108  similar unit” means a residential dwelling categorized into a
  109  group of units which have similar characteristics, such as
  110  comparable square footage, number of bedrooms, location, age of
  111  construction, or a combination of one or more of these features
  112  as specified in the residency or reservation contract. Each
  113  category must consist of at least 5 percent of the total number
  114  of residential units designated for independent living or 10
  115  residential units designated for independent living, whichever
  116  is less. However, a group of units consisting of single family
  117  homes may contain fewer than 10 units.
  118         5. If the provider has discontinued marketing continuing
  119  care contracts, any refund due a resident must be paid within
  120  200 days after the contract is terminated and the unit is
  121  vacated.
  122         6.4. Unless subsection (5) applies, for any prospective
  123  resident, regardless of whether or not such a resident receives
  124  a transferable membership or ownership right in the facility,
  125  who cancels the contract before occupancy of the unit, the
  126  entire amount paid toward the entrance fee shall be refunded,
  127  less a processing fee of up to 5 percent of the entire entrance
  128  fee; however, the processing fee may not exceed the amount paid
  129  by the prospective resident. Such refund must be paid within 60
  130  days after the resident gives giving notice of intention to
  131  cancel. For a resident who has occupied his or her unit and who
  132  has received a transferable membership or ownership right in the
  133  facility, the foregoing refund provisions do not apply but are
  134  deemed satisfied by the acquisition or receipt of a transferable
  135  membership or an ownership right in the facility. The provider
  136  may not charge any fee for the transfer of membership or sale of
  137  an ownership right.
  138         (i)(h) State the terms under which a contract is canceled
  139  by the death of the resident. These terms may contain a
  140  provision that, upon the death of a resident, the entrance fee
  141  of such resident is considered earned and becomes the property
  142  of the provider. If the unit is shared, the conditions with
  143  respect to the effect of the death or removal of one of the
  144  residents must be included in the contract.
  145         (j)(i) Describe the policies that may lead to changes in
  146  monthly recurring and nonrecurring charges or fees for goods and
  147  services received. The contract must provide for advance notice
  148  to the resident, of at least 60 days, before any change in fees
  149  or charges or the scope of care or services is effective, except
  150  for changes required by state or federal assistance programs.
  151         (k)(j) Provide that charges for care paid in one lump sum
  152  may not be increased or changed during the duration of the
  153  agreed upon care, except for changes required by state or
  154  federal assistance programs.
  155         (l)(k) Specify whether the facility is, or is affiliated
  156  with, a religious, nonprofit, or proprietary organization or
  157  management entity; the extent to which the affiliate
  158  organization will be responsible for the financial and
  159  contractual obligations of the provider; and the provisions of
  160  the federal Internal Revenue Code, if any, under which the
  161  provider or affiliate is exempt from the payment of federal
  162  income tax.
  163         Section 2. Section 651.028, Florida Statutes, is amended to
  164  read:
  165         651.028 Accredited facilities.—If a provider is accredited
  166  without stipulations or conditions by a process found by the
  167  office to be acceptable and substantially equivalent to the
  168  provisions of this chapter, the office may, pursuant to rule of
  169  the commission, waive any requirements of this chapter with
  170  respect to the provider if the office finds that such waivers
  171  are not inconsistent with the security protections intended by
  172  this chapter.
  173         Section 3. Subsection (1) of section 651.071, Florida
  174  Statutes, is amended to read:
  175         651.071 Contracts as preferred claims on liquidation or
  176  receivership.—
  177         (1) In the event of receivership or liquidation proceedings
  178  against a provider, all continuing care and continuing care at
  179  home contracts executed by a provider shall be deemed preferred
  180  claims against all assets owned by the provider; however, such
  181  claims are subordinate to those priority claims set forth in s.
  182  631.271 and any secured claim.
  183         Section 4. Subsections (4) and (5) of section 651.105,
  184  Florida Statutes, are amended, and subsection (6) is added to
  185  that section, to read:
  186         651.105 Examination and inspections.—
  187         (4) The office shall notify the provider and the executive
  188  officer of the governing body of the provider in writing of all
  189  deficiencies in its compliance with the provisions of this
  190  chapter and the rules adopted pursuant to this chapter and shall
  191  set a reasonable length of time for compliance by the provider.
  192  In addition, the office shall require corrective action or
  193  request a corrective action plan from the provider which plan
  194  demonstrates a good faith attempt to remedy the deficiencies by
  195  a specified date. If the provider fails to comply within the
  196  established length of time, the office may initiate action
  197  against the provider in accordance with the provisions of this
  198  chapter.
  199         (5) At the time of the routine examination, the office
  200  shall determine if all disclosures required under this chapter
  201  have been made to the president or chair of the residents’
  202  council and the executive officer of the governing body of the
  203  provider.
  204         (6) A representative of the provider must give a copy of
  205  the final examination report and corrective action plan, if one
  206  is required by the office, to the executive officer of the
  207  governing body of the provider within 60 days after issuance of
  208  the report.
  209         Section 5. Section 651.081, Florida Statutes, is amended to
  210  read:
  211         651.081 Residents’ council.—
  212         (1) Residents living in a facility holding a valid
  213  certificate of authority under this chapter have the right of
  214  self-organization, the right to be represented by an individual
  215  of their own choosing, and the right to engage in concerted
  216  activities for the purpose of keeping informed on the operation
  217  of the facility that is caring for them or for the purpose of
  218  other mutual aid or protection.
  219         (2)(a) Each facility shall establish a residents’ council
  220  created for the purpose of representing residents on matters set
  221  forth in s. 651.085. The residents’ council shall may be
  222  established through an election in which the residents, as
  223  defined in s. 651.011, vote by ballot, physically or by proxy.
  224  If the election is to be held during a meeting, a notice of the
  225  organizational meeting must be provided to all residents of the
  226  community at least 10 business days before the meeting. Notice
  227  may be given through internal mailboxes, communitywide
  228  newsletters, bulletin boards, in-house television stations, and
  229  other similar means of communication. An election creating a
  230  residents’ council is valid if at least 40 percent of the total
  231  resident population participates in the election and a majority
  232  of the participants vote affirmatively for the council. The
  233  initial residents’ council created under this section is valid
  234  for at least 12 months. A residents’ organization formalized by
  235  bylaws and elected officials must be recognized as the
  236  residents’ council under this section and s. 651.085. Within 30
  237  days after the election of a newly elected president or chair of
  238  the residents’ council, the provider shall give the president or
  239  chair a copy of this chapter and rules adopted thereunder, or
  240  direct him or her to the appropriate public website to obtain
  241  this information. Only one residents’ council may represent
  242  residents before the governing body of the provider as described
  243  in s. 651.085(2).
  244         (b) In addition to those matters provided in s. 651.085, a
  245  residents’ council shall provide a forum in which a resident may
  246  submit issues or make inquiries related to, but not limited to,
  247  subjects that impact the general residential quality of life and
  248  cultural environment. The residents’ council shall serve as a
  249  formal liaison to provide input related to such matters to the
  250  appropriate representative of the provider.
  251         (c) The activities of a residents’ council are independent
  252  of the provider. The provider is not responsible for ensuring,
  253  or for the associated costs of, compliance of the residents’
  254  council with the provisions of this section with respect to the
  255  operation of a residents’ council.
  256         (d) A residents’ council shall adopt its own bylaws and
  257  governance documents subject to the vote and approval of the
  258  residents. The residents’ council shall provide for open
  259  meetings when appropriate. The governing documents shall define
  260  the manner in which residents may submit an issue to the council
  261  and define a reasonable timeframe in which the residents’
  262  council shall respond to a resident submission or inquiry. A
  263  residents’ council may include term limits in its governing
  264  documents to ensure consistent integration of new leaders. If a
  265  licensed facility files for bankruptcy under chapter 11 of the
  266  United States Bankruptcy Code, 11 U.S.C. chapter 11, the
  267  facility, in its required filing of the 20 largest unsecured
  268  creditors with the United States Trustee, shall include the name
  269  and contact information of a designated resident selected by the
  270  residents’ council and a statement explaining that the
  271  designated resident was chosen by the residents’ council to
  272  serve as a representative of the residents’ interest on the
  273  creditors’ committee.
  274         Section 6. Section 651.085, Florida Statutes, is amended to
  275  read:
  276         651.085 Quarterly meetings between residents and the
  277  governing body of the provider; resident representation before
  278  the governing body of the provider.—
  279         (1) The governing body of a provider, or the designated
  280  representative of the provider, shall hold quarterly meetings
  281  with the residents of the continuing care facility for the
  282  purpose of free discussion of subjects including, but not
  283  limited to, income, expenditures, and financial trends and
  284  problems as they apply to the facility, as well as a discussion
  285  on proposed changes in policies, programs, and services. At
  286  quarterly meetings where monthly maintenance fee increases are
  287  discussed, a summary of the reasons for raising the fee as
  288  specified in subsection (4) must be provided in writing to the
  289  president or chair of the residents’ council. Upon request of
  290  the residents’ council, a member of the governing body of the
  291  provider, such as a board member, general partner, principal
  292  owner, or designated representative shall attend such meetings.
  293  Residents are entitled to at least 7 days’ advance notice of
  294  each quarterly meeting. An agenda and any materials that will be
  295  distributed by the governing body or representative of the
  296  provider shall be posted in a conspicuous place at the facility
  297  and shall be available upon request to residents of the
  298  facility. The office shall request verification from a facility
  299  that quarterly meetings are held and open to all residents if it
  300  receives a complaint from the residents’ council that a facility
  301  is not in compliance with this subsection. In addition, a
  302  facility shall report to the office in the annual report
  303  required under s. 651.026 the dates on which quarterly meetings
  304  were held during the reporting period.
  305         (2) A residents’ council formed pursuant to s. 651.081,
  306  members of which are elected by the residents, shall may
  307  designate a resident to represent them before the governing body
  308  of the provider or organize a meeting or ballot election of the
  309  residents to determine whether to elect a resident to represent
  310  them before the governing body of the provider. If a residents’
  311  council does not exist, any resident may organize a meeting or
  312  ballot election of the residents of the facility to determine
  313  whether to elect a resident to represent them before the
  314  governing body and, if applicable, elect the representative. The
  315  residents’ council, or the resident that organizes a meeting or
  316  ballot election to elect a representative, shall give all
  317  residents notice at least 10 business days before the meeting or
  318  election. Notice may be given through internal mailboxes,
  319  communitywide newsletters, bulletin boards, in-house television
  320  stations, and other similar means of communication. An election
  321  of the representative is valid if at least 40 percent of the
  322  total resident population participates in the election and a
  323  majority of the participants vote affirmatively for the
  324  representative. The initial designated representative elected
  325  under this section shall be elected to serve at least 12 months.
  326         (3) The designated representative shall be notified at
  327  least 14 days in advance of any meeting of the full governing
  328  body at which proposed changes in resident fees or services will
  329  be discussed. The representative shall be invited to attend and
  330  participate in that portion of the meeting designated for the
  331  discussion of such changes.
  332         (4) At a quarterly meeting prior to the implementation of
  333  any increase in the monthly maintenance fee, the designated
  334  representative of the provider must provide the reasons, by
  335  department cost centers, for any increase in the fee that
  336  exceeds the most recently published Consumer Price Index for All
  337  Urban Consumers, all items, Class A Areas of the Southern
  338  Region. Nothing in this subsection shall be construed as placing
  339  a cap or limitation on the amount of any increase in the monthly
  340  maintenance fee, establishing a presumption of the
  341  appropriateness of the Consumer Price Index as the basis for any
  342  increase in the monthly maintenance fee, or limiting or
  343  restricting the right of a provider to establish or set monthly
  344  maintenance fee increases.
  345         (5) The board of directors or governing board of a licensed
  346  provider may at its sole discretion allow a resident of the
  347  facility to be a voting member of the board or governing body of
  348  the facility. The board of directors or governing board of a
  349  licensed provider may establish specific criteria for the
  350  nomination, selection, and term of a resident as a member of the
  351  board or governing body. If the board or governing body of a
  352  licensed provider operates more than one licensed facility,
  353  regardless of whether the facility is in-state or out-of-state,
  354  the board or governing body may select at its sole discretion
  355  one resident from among its facilities to serve on the board of
  356  directors or governing body on a rotating basis.
  357         Section 7. Paragraph (d) of subsection (2) of section
  358  651.091, Florida Statutes, is amended to read:
  359         651.091 Availability, distribution, and posting of reports
  360  and records; requirement of full disclosure.—
  361         (2) Every continuing care facility shall:
  362         (d) Distribute a copy of the full annual statement and a
  363  copy of the most recent third-party financial audit filed with
  364  the annual report to the president or chair of the residents’
  365  council within 30 days after filing the annual report with the
  366  office, and designate a staff person to provide explanation
  367  thereof.
  368         Section 8. This act shall take effect October 1, 2015.