Florida Senate - 2019 COMMITTEE AMENDMENT
Bill No. CS for SB 1070
Ì131766=Î131766
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
04/19/2019 .
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The Committee on Appropriations (Lee) recommended the following:
1 Senate Amendment (with title amendment)
2
3 Delete lines 216 - 2443
4 and insert:
5 (a) The voting securities of one or more providers that are
6 stock corporations; or
7 (b) The ownership interest of one or more providers that
8 are not stock corporations.
9 (9) “Corrective order” means an order issued by the office
10 which specifies corrective actions that the office determines
11 are required in accordance with this chapter or commission rule.
12 (10) “Days cash on hand” means the quotient obtained by
13 dividing the value of paragraph (a) by the value of paragraph
14 (b).
15 (a) The sum of unrestricted cash, unrestricted short-term
16 and long-term investments, provider restricted funds, and the
17 minimum liquid reserve as of the reporting date.
18 (b) Operating expenses less depreciation, amortization, and
19 other noncash expenses and nonoperating losses divided by 365.
20 Operating expenses, depreciation, amortization, and other
21 noncash expenses and nonoperating losses are each the sum of
22 their respective values over the 12-month period ending on the
23 reporting date.
24
25 With prior written approval of the office, a demand note or
26 other parental guarantee may be considered a short-term or long
27 term investment for the purposes of paragraph (a). However, the
28 total of all demand notes issued by the parent may not, at any
29 time, be more than the sum of unrestricted cash and unrestricted
30 short-term and long-term investments held by the parent.
31 (11) “Debt service coverage ratio” means the quotient
32 obtained by dividing the value of paragraph (a) by the value of
33 paragraph (b).
34 (a) The sum of total expenses less interest expense on the
35 debt facility, depreciation, amortization, and other noncash
36 expense and nonoperating losses, subtracted from the sum of
37 total revenues, excluding noncash revenues and nonoperating
38 gains, and gross entrance fees received less earned entrance
39 fees and refunds paid. Expenses, interest expense on the debt
40 facility, depreciation, amortization, and other noncash expense
41 and nonoperating losses, revenues, noncash revenues,
42 nonoperating gains, gross entrance fees, earned entrance fees,
43 and refunds are each the sum of their respective values over the
44 12-month period ending on the reporting date.
45 (b) Total annual principal and interest expense due on the
46 debt facility over the 12-month period ending on the reporting
47 date. For the purposes of this paragraph, principal excludes any
48 balloon principal payment amounts, and interest expense due is
49 the sum of the interest over the 12-month period ending on the
50 reporting date.
51 (12) “Department” means the Department of Financial
52 Services.
53 (13)(5) “Entrance fee” means an initial or deferred payment
54 of a sum of money or property made as full or partial payment
55 for continuing care or continuing care at-home. An accommodation
56 fee, admission fee, member fee, or other fee of similar form and
57 application are considered to be an entrance fee.
58 (14)(6) “Facility” means a place where continuing care is
59 furnished and may include one or more physical plants on a
60 primary or contiguous site or an immediately accessible site. As
61 used in this subsection, the term “immediately accessible site”
62 means a parcel of real property separated by a reasonable
63 distance from the facility as measured along public
64 thoroughfares, and the term “primary or contiguous site” means
65 the real property contemplated in the feasibility study required
66 by this chapter.
67 (7) “Generally accepted accounting principles” means those
68 accounting principles and practices adopted by the Financial
69 Accounting Standards Board and the American Institute of
70 Certified Public Accountants, including Statement of Position
71 90-8 with respect to any full year to which the statement
72 applies.
73 (15) “Impaired” or “impairment” means that either of the
74 following has occurred:
75 (a) A provider has failed to maintain its minimum liquid
76 reserve as required under s. 651.035, unless the provider has
77 received prior written approval from the office for a withdrawal
78 pursuant to s. 651.035(6) and is compliant with the approved
79 payment schedule.
80 (b) Beginning January 1, 2021:
81 1. For a provider with mortgage financing from a third
82 party lender or a public bond issue, the provider’s debt service
83 coverage ratio is less than 1.00:1 and the provider’s days cash
84 on hand is less than 90; or
85 2. For a provider without mortgage financing from a third
86 party lender or public bond issue, the provider’s days cash on
87 hand is less than 90.
88
89 If the provider is a member of an obligated group having cross
90 collateralized debt, the obligated group’s debt service coverage
91 ratio and days cash on hand must be used to determine if the
92 provider is impaired.
93 (16)(8) “Insolvency” means the condition in which a the
94 provider is unable to pay its obligations as they come due in
95 the normal course of business.
96 (17)(9) “Licensed” means that a the provider has obtained a
97 certificate of authority from the office department.
98 (18) “Manager,” “management,” or “management company” means
99 a person who administers the day-to-day business operations of a
100 facility for a provider, subject to the policies, directives,
101 and oversight of the provider.
102 (19)(10) “Nursing care” means those services or acts
103 rendered to a resident by an individual licensed or certified
104 pursuant to chapter 464.
105 (20) “Obligated group” means one or more entities that
106 jointly agree to be bound by a financing structure containing
107 security provisions and covenants applicable to the group. For
108 the purposes of this subsection, debt issued under such a
109 financing structure must be a joint and several obligation of
110 each member of the group.
111 (21) “Occupancy” means the total number of occupied
112 independent living units, assisted living units, and skilled
113 nursing beds in a facility divided by the total number of units
114 and beds in that facility, excluding units and beds that are
115 unavailable to market or that are reserved by prospective
116 residents.
117 (22)(11) “Personal services” has the same meaning as in s.
118 429.02.
119 (23)(12) “Provider” means the owner or operator, whether a
120 natural person, partnership or other unincorporated association,
121 however organized, trust, or corporation, of an institution,
122 building, residence, or other place, whether operated for profit
123 or not, which owner or operator provides continuing care or
124 continuing care at-home for a fixed or variable fee, or for any
125 other remuneration of any type, whether fixed or variable, for
126 the period of care, payable in a lump sum or lump sum and
127 monthly maintenance charges or in installments. The term does
128 not apply to an entity that has existed and continuously
129 operated a facility located on at least 63 acres in this state
130 providing residential lodging to members and their spouses for
131 at least 66 years on or before July 1, 1989, and has the
132 residential capacity of 500 persons, is directly or indirectly
133 owned or operated by a nationally recognized fraternal
134 organization, is not open to the public, and accepts only its
135 members and their spouses as residents.
136 (24)(13) “Records” means all documents, correspondence, and
137 the permanent financial, directory, and personnel information
138 and data maintained by a provider pursuant to this chapter,
139 regardless of the physical form, characteristics, or means of
140 transmission.
141 (25) “Regulatory action level event” means that any two of
142 the following have occurred:
143 (a) The provider’s debt service coverage ratio is less than
144 the greater of the minimum ratio specified in the provider’s
145 bond covenants or lending agreement for long-term financing or
146 1.20:1 as of the most recent annual report filed with the office
147 pursuant to s. 651.026, or, if the provider does not have a debt
148 service coverage ratio required by its lending institution, the
149 provider’s debt service coverage ratio is less than 1.20:1 as of
150 the most recent annual report filed with the office pursuant to
151 s. 651.026. If the provider is a member of an obligated group
152 having cross-collateralized debt, the obligated group’s debt
153 service coverage ratio must be used as the provider’s debt
154 service coverage ratio.
155 (b) The provider’s days cash on hand is less than the
156 greater of the minimum number of days cash on hand specified in
157 the provider’s bond covenants or lending agreement for long-term
158 financing or 100 days. If the provider does not have a days cash
159 on hand required by its lending institution, the days cash on
160 hand may not be less than 100 as of the most recent annual
161 report filed with the office pursuant to s. 651.026. If the
162 provider is a member of an obligated group having cross
163 collateralized debt, the days cash on hand of the obligated
164 group must be used as the provider’s days cash on hand.
165 (c) The occupancy of the provider’s facility is less than
166 80 percent averaged over the 12-month period immediately
167 preceding the annual report filed with the office pursuant to s.
168 651.026.
169 (26)(14) “Resident” means a purchaser of, a nominee of, or
170 a subscriber to a continuing care or continuing care at-home
171 contract. Such contract does not give the resident a part
172 ownership of the facility in which the resident is to reside,
173 unless expressly provided in the contract.
174 (27)(15) “Shelter” means an independent living unit, room,
175 apartment, cottage, villa, personal care unit, nursing bed, or
176 other living area within a facility set aside for the exclusive
177 use of one or more identified residents.
178 Section 2. Section 651.012, Florida Statutes, is amended to
179 read:
180 651.012 Exempted facility; written disclosure of
181 exemption.—Any facility exempted under ss. 632.637(1)(e) and
182 651.011(23) 651.011(12) must provide written disclosure of such
183 exemption to each person admitted to the facility after October
184 1, 1996. This disclosure must be written using language likely
185 to be understood by the person and must briefly explain the
186 exemption.
187 Section 3. Subsection (2) of section 651.013, Florida
188 Statutes, is amended to read:
189 651.013 Chapter exclusive; applicability of other laws.—
190 (2) In addition to other applicable provisions cited in
191 this chapter, the office has the authority granted under ss.
192 624.302, and 624.303, 624.307-624.312, 624.318 624.308-624.312,
193 624.319(1)-(3), 624.320, 624.321 624.320-624.321, 624.324, and
194 624.34, and 624.422 of the Florida Insurance Code to regulate
195 providers of continuing care and continuing care at-home.
196 Section 4. Section 651.019, Florida Statutes, is amended to
197 read:
198 651.019 New financing, additional financing, or
199 refinancing.—
200 (1)(a) A provider shall provide a written general outline
201 of the amount and the anticipated terms of any new financing or
202 refinancing, and the intended use of proceeds, to the residents’
203 council at least 30 days before the closing date of the
204 financing or refinancing transaction. If there is a material
205 change in the noticed information, a provider shall provide an
206 updated notice to the residents’ council within 10 business days
207 after the provider becomes aware of such change.
208 (b) If the facility does not have a residents’ council, the
209 facility must make available, in the same manner as other
210 community notices, the information required under paragraph (a)
211 After issuance of a certificate of authority, the provider shall
212 submit to the office a general outline, including intended use
213 of proceeds, with respect to any new financing, additional
214 financing, or refinancing at least 30 days before the closing
215 date of such financing transaction.
216 (2) Within 30 days after the closing date of such financing
217 or refinancing transaction, The provider shall furnish any
218 information the office may reasonably request in connection with
219 any new financing, additional financing, or refinancing,
220 including, but not limited to, the financing agreements and any
221 related documents, escrow or trust agreements, and statistical
222 or financial data. the provider shall also submit to the office
223 copies of executed financing documents, escrow or trust
224 agreements prepared in support of such financing or refinancing
225 transaction, and a copy of all documents required to be
226 submitted to the residents’ council under paragraph (1)(a)
227 within 30 days after the closing date.
228 Section 5. Section 651.021, Florida Statutes, is amended to
229 read:
230 651.021 Certificate of authority required.—
231 (1) A No person may not engage in the business of providing
232 continuing care, issuing contracts for continuing care or
233 continuing care at-home, or constructing a facility for the
234 purpose of providing continuing care in this state without a
235 certificate of authority obtained from the office as provided in
236 this chapter. This section subsection does not prohibit the
237 preparation of a construction site or construction of a model
238 residence unit for marketing purposes, or both. The office may
239 allow the purchase of an existing building for the purpose of
240 providing continuing care if the office determines that the
241 purchase is not being made to circumvent the prohibitions in
242 this section.
243 (2) Written approval must be obtained from the office
244 before commencing construction or marketing for an expansion of
245 a certificated facility equivalent to the addition of at least
246 20 percent of existing units or 20 percent or more in the number
247 of continuing care at-home contracts. This provision does not
248 apply to construction for which a certificate of need from the
249 Agency for Health Care Administration is required.
250 (a) For providers that offer both continuing care and
251 continuing care at-home, the 20 percent is based on the total of
252 both existing units and existing contracts for continuing care
253 at-home. For purposes of this subsection, an expansion includes
254 increases in the number of constructed units or continuing care
255 at-home contracts or a combination of both.
256 (b) The application for such approval shall be on forms
257 adopted by the commission and provided by the office. The
258 application must include the feasibility study required by s.
259 651.022(3) or s. 651.023(1)(b) and such other information as
260 required by s. 651.023. If the expansion is only for continuing
261 care at-home contracts, an actuarial study prepared by an
262 independent actuary in accordance with standards adopted by the
263 American Academy of Actuaries which presents the financial
264 impact of the expansion may be substituted for the feasibility
265 study.
266 (c) In determining whether an expansion should be approved,
267 the office shall use the criteria provided in ss. 651.022(6) and
268 651.023(4).
269 Section 6. Section 651.0215, Florida Statutes, is created
270 to read:
271 651.0215 Consolidated application for a provisional
272 certificate of authority and a certificate of authority;
273 required restrictions on use of entrance fees.—
274 (1) For an applicant to qualify for a certificate of
275 authority without first obtaining a provisional certificate of
276 authority, all of the following conditions must be met:
277 (a) All reservation deposits and entrance fees must be
278 placed in escrow in accordance with s. 651.033. The applicant
279 may not use or pledge any part of an initial entrance fee for
280 the construction or purchase of the facility or as security for
281 long-term financing.
282 (b) The reservation deposit may not exceed the lesser of
283 $40,000 or 10 percent of the then-current fee for the unit
284 selected by a resident and must be refundable at any time before
285 the resident takes occupancy of the selected unit.
286 (c) The resident contract must state that collection of the
287 balance of the entrance fee is to occur after the resident is
288 notified that his or her selected unit is available for
289 occupancy and on or before the occupancy date.
290 (2) The consolidated application must be on a form
291 prescribed by the commission and must contain all of the
292 following information:
293 (a) All of the information required under s. 651.022(2).
294 (b) A feasibility study prepared by an independent
295 consultant which contains all of the information required by s.
296 651.022(3) and financial forecasts or projections prepared in
297 accordance with standards adopted by the American Institute of
298 Certified Public Accountants or in accordance with standards for
299 feasibility studies for continuing care retirement communities
300 adopted by the Actuarial Standards Board.
301 1. The feasibility study must take into account project
302 costs, actual marketing results to date and marketing
303 projections, resident fees and charges, competition, resident
304 contract provisions, and other factors that affect the
305 feasibility of operating the facility.
306 2. If the feasibility study is prepared by an independent
307 certified public accountant, it must contain an examination
308 report, or a compilation report acceptable to the office,
309 containing a financial forecast or projections for the first 5
310 years of operations which take into account an actuary’s
311 mortality and morbidity assumptions as the study relates to
312 turnover, rates, fees, and charges. If the study is prepared by
313 an independent consulting actuary, it must contain mortality and
314 morbidity assumptions as it relates to turnover, rates, fees,
315 and charges and an actuary’s signed opinion that the project as
316 proposed is feasible and that the study has been prepared in
317 accordance with Actuarial Standards of Practice No. 3 for
318 Continuing Care Retirement Communities, Revised Edition,
319 effective May 1, 2011.
320 (c) Documents evidencing that commitments have been secured
321 for construction financing and long-term financing or that a
322 documented plan acceptable to the office has been adopted by the
323 applicant for long-term financing.
324 (d) Documents evidencing that all conditions of the lender
325 have been satisfied to activate the commitment to disburse
326 funds, other than the obtaining of the certificate of authority,
327 the completion of construction, or the closing of the purchase
328 of realty or buildings for the facility.
329 (e) Documents evidencing that the aggregate amount of
330 entrance fees received by or pledged to the applicant, plus
331 anticipated proceeds from any long-term financing commitment and
332 funds from all other sources in the actual possession of the
333 applicant, equal at least 100 percent of the aggregate cost of
334 constructing or purchasing, equipping, and furnishing the
335 facility plus 100 percent of the anticipated startup losses of
336 the facility.
337 (f) A complete audited financial report of the applicant,
338 prepared by an independent certified public accountant in
339 accordance with generally accepted accounting principles, as of
340 the date the applicant commenced business operations or for the
341 fiscal year that ended immediately preceding the date of
342 application, whichever is later; and complete unaudited
343 quarterly financial statements attested to by the applicant
344 after the date of the last audit.
345 (g) Documents evidencing that the applicant will be able to
346 comply with s. 651.035.
347 (h) Such other reasonable data, financial statements, and
348 pertinent information as the commission or office may require
349 with respect to the applicant or the facility to determine the
350 financial status of the facility and the management capabilities
351 of its managers and owners.
352
353 If any material change occurs in the facts set forth in an
354 application filed with the office pursuant to this subsection,
355 an amendment setting forth such change must be filed with the
356 office within 10 business days after the applicant becomes aware
357 of such change, and a copy of the amendment must be sent by
358 registered mail to the principal office of the facility and to
359 the principal office of the controlling company.
360 (3) If an applicant has or proposes to have more than one
361 facility offering continuing care or continuing care at-home, a
362 separate certificate of authority must be obtained for each
363 facility.
364 (4) Within 45 days after receipt of the information
365 required under subsection (2), the office shall examine the
366 information and notify the applicant in writing, specifically
367 requesting any additional information that the office is
368 authorized to require. An application is deemed complete when
369 the office receives all requested information and the applicant
370 corrects any error or omission of which the applicant was timely
371 notified or when the time for such notification has expired.
372 Within 15 days after receipt of all of the requested additional
373 information, the office shall notify the applicant in writing
374 that all of the requested information has been received and that
375 the application is deemed complete as of the date of the notice.
376 Failure to notify the applicant in writing within the 15-day
377 period constitutes acknowledgment by the office that it has
378 received all requested additional information, and the
379 application is deemed complete for purposes of review on the
380 date the applicant files all of the required additional
381 information.
382 (5) Within 45 days after an application is deemed complete
383 as set forth in subsection (4) and upon completion of the
384 remaining requirements of this section, the office shall
385 complete its review and issue or deny a certificate of authority
386 to the applicant. If a certificate of authority is denied, the
387 office shall notify the applicant in writing, citing the
388 specific failures to satisfy this chapter, and the applicant is
389 entitled to an administrative hearing pursuant to chapter 120.
390 (6) The office shall issue a certificate of authority upon
391 determining that the applicant meets all of the requirements of
392 law and has submitted all of the information required under this
393 section, that all escrow requirements have been satisfied, and
394 that the fees prescribed in s. 651.015(2) have been paid.
395 (7) The issuance of a certificate of authority entitles the
396 applicant to begin construction and collect reservation deposits
397 and entrance fees from prospective residents. The reservation
398 contract must state the cancellation policy and the terms of the
399 continuing care contract. All or any part of an entrance fee or
400 reservation deposit collected must be placed in an escrow
401 account or on deposit with the department pursuant to s.
402 651.033.
403 (8) The provider is entitled to secure release of the
404 moneys held in escrow within 7 days after the office receives an
405 affidavit from the provider, along with appropriate
406 documentation to verify, and notification is provided to the
407 escrow agent by certified mail, that all of the following
408 conditions have been satisfied:
409 (a) A certificate of occupancy has been issued.
410 (b) Payment in full has been received for at least 70
411 percent of the total units of a phase or of the total of the
412 combined phases constructed. If a provider offering continuing
413 care at-home is applying for a release of escrowed entrance
414 fees, the same minimum requirement must be met for the
415 continuing care contracts and for the continuing care at-home
416 contracts independently of each other.
417 (c) The provider has evidence of sufficient funds to meet
418 the requirements of s. 651.035, which may include funds
419 deposited in the initial entrance fee account.
420 (d) Documents evidencing the intended application of the
421 proceeds upon release and documents evidencing that the entrance
422 fees, when released, will be applied as represented to the
423 office.
424
425 Notwithstanding chapter 120, only the provider, the escrow
426 agent, and the office have a substantial interest in any office
427 decision regarding release of escrow funds in any proceedings
428 under chapter 120 or this chapter.
429 (9) The office may not approve any application that
430 includes in the plan of financing any encumbrance of the
431 operating reserves or renewal and replacement reserves required
432 by this chapter.
433 (10) The office may not issue a certificate of authority
434 for a facility that does not have a component that is to be
435 licensed pursuant to part II of chapter 400 or part I of chapter
436 429, or that does not offer personal services or nursing
437 services through written contractual agreement. A written
438 contractual agreement must be disclosed in the contract for
439 continuing care or continuing care at-home and is subject to s.
440 651.1151.
441 Section 7. Subsections (2), (3), (6), and (8) of section
442 651.022, Florida Statutes, are amended, and subsection (5) of
443 that section is republished, to read:
444 651.022 Provisional certificate of authority; application.—
445 (2) The application for a provisional certificate of
446 authority must shall be on a form prescribed by the commission
447 and must shall contain the following information:
448 (a) If the applicant or provider is a corporation, a copy
449 of the articles of incorporation and bylaws; if the applicant or
450 provider is a partnership or other unincorporated association, a
451 copy of the partnership agreement, articles of association, or
452 other membership agreement; and, if the applicant or provider is
453 a trust, a copy of the trust agreement or instrument.
454 (b) The full names, residences, and business addresses of:
455 1. The proprietor, if the applicant or provider is an
456 individual.
457 2. Every partner or member, if the applicant or provider is
458 a partnership or other unincorporated association, however
459 organized, having fewer than 50 partners or members, together
460 with the business name and address of the partnership or other
461 organization.
462 3. The principal partners or members, if the applicant or
463 provider is a partnership or other unincorporated association,
464 however organized, having 50 or more partners or members,
465 together with the business name and business address of the
466 partnership or other organization. If such unincorporated
467 organization has officers and a board of directors, the full
468 name and business address of each officer and director may be
469 set forth in lieu of the full name and business address of its
470 principal members.
471 4. The corporation and each officer and director thereof,
472 if the applicant or provider is a corporation.
473 5. Every trustee and officer, if the applicant or provider
474 is a trust.
475 6. The manager, whether an individual, corporation,
476 partnership, or association.
477 7. Any stockholder holding at least a 10 percent interest
478 in the operations of the facility in which the care is to be
479 offered.
480 8. Any person whose name is required to be provided in the
481 application under this paragraph and who owns any interest in or
482 receives any remuneration from, directly or indirectly, any
483 professional service firm, association, trust, partnership, or
484 corporation providing goods, leases, or services to the facility
485 for which the application is made, with a real or anticipated
486 value of $10,000 or more, and the name and address of the
487 professional service firm, association, trust, partnership, or
488 corporation in which such interest is held. The applicant shall
489 describe such goods, leases, or services and the probable cost
490 to the facility or provider and shall describe why such goods,
491 leases, or services should not be purchased from an independent
492 entity.
493 9. Any person, corporation, partnership, association, or
494 trust owning land or property leased to the facility, along with
495 a copy of the lease agreement.
496 10. Any affiliated parent or subsidiary corporation or
497 partnership.
498 (c)1. Evidence that the applicant is reputable and of
499 responsible character. If the applicant is a firm, association,
500 organization, partnership, business trust, corporation, or
501 company, the form must shall require evidence that the members
502 or shareholders are reputable and of responsible character, and
503 the person in charge of providing care under a certificate of
504 authority are shall likewise be required to produce evidence of
505 being reputable and of responsible character.
506 2. Evidence satisfactory to the office of the ability of
507 the applicant to comply with the provisions of this chapter and
508 with rules adopted by the commission pursuant to this chapter.
509 3. A statement of whether a person identified in the
510 application for a provisional certificate of authority or the
511 administrator or manager of the facility, if such person has
512 been designated, or any such person living in the same location:
513 a. Has been convicted of a felony or has pleaded nolo
514 contendere to a felony charge, or has been held liable or has
515 been enjoined in a civil action by final judgment, if the felony
516 or civil action involved fraud, embezzlement, fraudulent
517 conversion, or misappropriation of property.
518 b. Is subject to a currently effective injunctive or
519 restrictive order or federal or state administrative order
520 relating to business activity or health care as a result of an
521 action brought by a public agency or department, including,
522 without limitation, an action affecting a license under chapter
523 400 or chapter 429.
524
525 The statement must shall set forth the court or agency, the date
526 of conviction or judgment, and the penalty imposed or damages
527 assessed, or the date, nature, and issuer of the order. Before
528 determining whether a provisional certificate of authority is to
529 be issued, the office may make an inquiry to determine the
530 accuracy of the information submitted pursuant to subparagraphs
531 1., 2., and 3. 1. and 2.
532 (d) The contracts for continuing care and continuing care
533 at-home to be entered into between the provider and residents
534 which meet the minimum requirements of s. 651.055 or s. 651.057
535 and which include a statement describing the procedures required
536 by law relating to the release of escrowed entrance fees. Such
537 statement may be furnished through an addendum.
538 (e) Any advertisement or other written material proposed to
539 be used in the solicitation of residents.
540 (f) Such other reasonable data, financial statements, and
541 pertinent information as the commission or office may reasonably
542 require with respect to the provider or the facility, including
543 the most recent audited financial report statements of
544 comparable facilities currently or previously owned, managed, or
545 developed by the applicant or its principal, to assist in
546 determining the financial viability of the project and the
547 management capabilities of its managers and owners.
548 (g) The forms of the residency contracts, reservation
549 contracts, escrow agreements, and wait list contracts, if
550 applicable, which are proposed to be used by the provider in the
551 furnishing of care. The office shall approve contracts and
552 escrow agreements that comply with ss. 651.023(1)(c), 651.033,
553 651.055, and 651.057. Thereafter, no other form of contract or
554 agreement may be used by the provider until it has been
555 submitted to the office and approved.
556
557 If any material change occurs in the facts set forth in an
558 application filed with the office pursuant to this subsection,
559 an amendment setting forth such change must be filed with the
560 office within 10 business days after the applicant becomes aware
561 of such change, and a copy of the amendment must be sent by
562 registered mail to the principal office of the facility and to
563 the principal office of the controlling company.
564 (3) In addition to the information required in subsection
565 (2), an applicant for a provisional certificate of authority
566 shall submit a market feasibility study with appropriate
567 financial, marketing, and actuarial assumptions for the first 5
568 years of operations. The market feasibility study must shall
569 include at least the following information:
570 (a) A description of the proposed facility, including the
571 location, size, anticipated completion date, and the proposed
572 construction program.
573 (b) An identification and evaluation of the primary and, if
574 appropriate, the secondary market areas of the facility and the
575 projected unit sales per month.
576 (c) Projected revenues, including anticipated entrance
577 fees; monthly service fees; nursing care revenues rates, if
578 applicable; and all other sources of revenue, including the
579 total amount of debt financing required.
580 (d) Projected expenses, including staffing requirements and
581 salaries; cost of property, plant, and equipment, including
582 depreciation expense; interest expense; marketing expense; and
583 other operating expenses.
584 (e) A projected balance sheet Current assets and
585 liabilities of the applicant.
586 (f) Expectations of the financial condition of the project,
587 including the projected cash flow, and a projected balance sheet
588 and an estimate of the funds anticipated to be necessary to
589 cover startup losses.
590 (g) The inflation factor, if any, assumed in the
591 feasibility study for the proposed facility and how and where it
592 is applied.
593 (h) Project costs and the total amount of debt financing
594 required, marketing projections, resident fees and charges, the
595 competition, resident contract provisions, and other factors
596 that which affect the feasibility of the facility.
597 (i) Appropriate population projections, including morbidity
598 and mortality assumptions.
599 (j) The name of the person who prepared the feasibility
600 study and the experience of such person in preparing similar
601 studies or otherwise consulting in the field of continuing care.
602 The preparer of the feasibility study may be the provider or a
603 contracted third party.
604 (k) Any other information that the applicant deems relevant
605 and appropriate to enable the office to make a more informed
606 determination.
607 (5)(a) Within 30 days after receipt of an application for a
608 provisional certificate of authority, the office shall examine
609 the application and shall notify the applicant in writing,
610 specifically setting forth and specifically requesting any
611 additional information the office is permitted by law to
612 require. If the application submitted is determined by the
613 office to be substantially incomplete so as to require
614 substantial additional information, including biographical
615 information, the office may return the application to the
616 applicant with a written notice that the application as received
617 is substantially incomplete and, therefore, unacceptable for
618 filing without further action required by the office. Any filing
619 fee received shall be refunded to the applicant.
620 (b) Within 15 days after receipt of all of the requested
621 additional information, the office shall notify the applicant in
622 writing that all of the requested information has been received
623 and the application is deemed to be complete as of the date of
624 the notice. Failure to so notify the applicant in writing within
625 the 15-day period shall constitute acknowledgment by the office
626 that it has received all requested additional information, and
627 the application shall be deemed to be complete for purposes of
628 review upon the date of the filing of all of the requested
629 additional information.
630 (6) Within 45 days after the date an application is deemed
631 complete as set forth in paragraph (5)(b), the office shall
632 complete its review and issue a provisional certificate of
633 authority to the applicant based upon its review and a
634 determination that the application meets all requirements of
635 law, that the feasibility study was based on sufficient data and
636 reasonable assumptions, and that the applicant will be able to
637 provide continuing care or continuing care at-home as proposed
638 and meet all financial and contractual obligations related to
639 its operations, including the financial requirements of this
640 chapter. If the application is denied, the office shall notify
641 the applicant in writing, citing the specific failures to meet
642 the provisions of this chapter. Such denial entitles the
643 applicant to a hearing pursuant to chapter 120.
644 (8) The office may shall not approve any application that
645 which includes in the plan of financing any encumbrance of the
646 operating reserves or renewal and replacement reserves required
647 by this chapter.
648 Section 8. Subsection (1) and subsections (4) through (9)
649 of section 651.023, Florida Statutes, are amended, and
650 subsection (2) of that section is republished, to read:
651 651.023 Certificate of authority; application.—
652 (1) After issuance of a provisional certificate of
653 authority, the office shall issue to the holder of such
654 provisional certificate a certificate of authority if the holder
655 of the provisional certificate provides the office with the
656 following information:
657 (a) Any material change in status with respect to the
658 information required to be filed under s. 651.022(2) in the
659 application for the provisional certificate.
660 (b) A feasibility study prepared by an independent
661 consultant which contains all of the information required by s.
662 651.022(3) and financial forecasts or projections prepared in
663 accordance with standards adopted by the American Institute of
664 Certified Public Accountants or in accordance with standards for
665 feasibility studies or continuing care retirement communities
666 adopted by the Actuarial Standards Board.
667 1. The study must also contain an independent evaluation
668 and examination opinion, or a comparable opinion acceptable to
669 the office, by the consultant who prepared the study, of the
670 underlying assumptions used as a basis for the forecasts or
671 projections in the study and that the assumptions are reasonable
672 and proper and the project as proposed is feasible.
673 1.2. The study must take into account project costs, actual
674 marketing results to date and marketing projections, resident
675 fees and charges, competition, resident contract provisions, and
676 any other factors which affect the feasibility of operating the
677 facility.
678 2.3. If the study is prepared by an independent certified
679 public accountant, it must contain an examination opinion or a
680 compilation report acceptable to the office containing a
681 financial forecast or projections for the first 5 3 years of
682 operations which take into account an actuary’s mortality and
683 morbidity assumptions as the study relates to turnover, rates,
684 fees, and charges and financial projections having a compilation
685 opinion for the next 3 years. If the study is prepared by an
686 independent consulting actuary, it must contain mortality and
687 morbidity assumptions as the study relates to turnover, rates,
688 fees, and charges data and an actuary’s signed opinion that the
689 project as proposed is feasible and that the study has been
690 prepared in accordance with standards adopted by the American
691 Academy of Actuaries.
692 (c) Subject to subsection (4), a provider may submit an
693 application for a certificate of authority and any required
694 exhibits upon submission of documents evidencing proof that the
695 project has a minimum of 30 percent of the units reserved for
696 which the provider is charging an entrance fee. This does not
697 apply to an application for a certificate of authority for the
698 acquisition of a facility for which a certificate of authority
699 was issued before October 1, 1983, to a provider who
700 subsequently becomes a debtor in a case under the United States
701 Bankruptcy Code, 11 U.S.C. ss. 101 et seq., or to a provider for
702 which the department has been appointed receiver pursuant to
703 part II of chapter 631.
704 (d) Documents evidencing Proof that commitments have been
705 secured for both construction financing and long-term financing
706 or a documented plan acceptable to the office has been adopted
707 by the applicant for long-term financing.
708 (e) Documents evidencing Proof that all conditions of the
709 lender have been satisfied to activate the commitment to
710 disburse funds other than the obtaining of the certificate of
711 authority, the completion of construction, or the closing of the
712 purchase of realty or buildings for the facility.
713 (f) Documents evidencing Proof that the aggregate amount of
714 entrance fees received by or pledged to the applicant, plus
715 anticipated proceeds from any long-term financing commitment,
716 plus funds from all other sources in the actual possession of
717 the applicant, equal at least 100 percent of the aggregate cost
718 of constructing or purchasing, equipping, and furnishing the
719 facility plus 100 percent of the anticipated startup losses of
720 the facility.
721 (g) A complete audited financial report statements of the
722 applicant, prepared by an independent certified public
723 accountant in accordance with generally accepted accounting
724 principles, as of the date the applicant commenced business
725 operations or for the fiscal year that ended immediately
726 preceding the date of application, whichever is later, and
727 complete unaudited quarterly financial statements attested to by
728 the applicant after the date of the last audit.
729 (h) Documents evidencing Proof that the applicant has
730 complied with the escrow requirements of subsection (5) or
731 subsection (7) and will be able to comply with s. 651.035.
732 (i) Such other reasonable data, financial statements, and
733 pertinent information as the commission or office may require
734 with respect to the applicant or the facility, to determine the
735 financial status of the facility and the management capabilities
736 of its managers and owners.
737
738 If any material change occurs in the facts set forth in an
739 application filed with the office pursuant to this subsection,
740 an amendment setting forth such change must be filed with the
741 office within 10 business days after the applicant becomes aware
742 of such change, and a copy of the amendment must be sent by
743 registered mail to the principal office of the facility and to
744 the principal office of the controlling company.
745 (2) Within 30 days after receipt of the information
746 required under subsection (1), the office shall examine such
747 information and notify the provider in writing, specifically
748 requesting any additional information the office is permitted by
749 law to require. Within 15 days after receipt of all of the
750 requested additional information, the office shall notify the
751 provider in writing that all of the requested information has
752 been received and the application is deemed to be complete as of
753 the date of the notice. Failure to notify the applicant in
754 writing within the 15-day period constitutes acknowledgment by
755 the office that it has received all requested additional
756 information, and the application shall be deemed complete for
757 purposes of review on the date of filing all of the required
758 additional information.
759 (4) The office shall issue a certificate of authority upon
760 determining that the applicant meets all requirements of law and
761 has submitted all of the information required by this section,
762 that all escrow requirements have been satisfied, and that the
763 fees prescribed in s. 651.015(2) have been paid.
764 (a) A Notwithstanding satisfaction of the 30-percent
765 minimum reservation requirement of paragraph (1)(c), no
766 certificate of authority may not shall be issued until
767 documentation evidencing that the project has a minimum of 50
768 percent of the units reserved for which the provider is charging
769 an entrance fee, and proof is provided to the office. If a
770 provider offering continuing care at-home is applying for a
771 certificate of authority or approval of an expansion pursuant to
772 s. 651.021(2), the same minimum reservation requirements must be
773 met for the continuing care and continuing care at-home
774 contracts, independently of each other.
775 (b) In order for a unit to be considered reserved under
776 this section, the provider must collect a minimum deposit of the
777 lesser of $40,000 or 10 percent of the then-current entrance fee
778 for that unit, and may assess a forfeiture penalty of 2 percent
779 of the entrance fee due to termination of the reservation
780 contract after 30 days for any reason other than the death or
781 serious illness of the resident, the failure of the provider to
782 meet its obligations under the reservation contract, or other
783 circumstances beyond the control of the resident that equitably
784 entitle the resident to a refund of the resident’s deposit. The
785 reservation contract must state the cancellation policy and the
786 terms of the continuing care or continuing care at-home contract
787 to be entered into.
788 (5) Up to 25 percent of the moneys paid for all or any part
789 of an initial entrance fee may be included or pledged for the
790 construction or purchase of the facility or as security for
791 long-term financing. As used in this section, the term “initial
792 entrance fee” means the total entrance fee charged by the
793 facility to the first occupant of a unit.
794 (a) A minimum of 75 percent of the moneys paid for all or
795 any part of an initial entrance fee collected for continuing
796 care or continuing care at-home must shall be placed in an
797 escrow account or on deposit with the department as prescribed
798 in s. 651.033.
799 (b) For an expansion as provided in s. 651.021(2), a
800 minimum of 75 percent of the moneys paid for all or any part of
801 an initial entrance fee collected for continuing care and 50
802 percent of the moneys paid for all or any part of an initial fee
803 collected for continuing care at-home shall be placed in an
804 escrow account or on deposit with the department as prescribed
805 in s. 651.033.
806 (6) The provider is entitled to secure release of the
807 moneys held in escrow within 7 days after receipt by the office
808 of an affidavit from the provider, along with appropriate copies
809 to verify, and notification to the escrow agent by certified
810 mail, that the following conditions have been satisfied:
811 (a) A certificate of occupancy has been issued.
812 (b) Payment in full has been received for at least 70
813 percent of the total units of a phase or of the total of the
814 combined phases constructed. If a provider offering continuing
815 care at-home is applying for a release of escrowed entrance
816 fees, the same minimum requirement must be met for the
817 continuing care and continuing care at-home contracts,
818 independently of each other.
819 (c) The consultant who prepared the feasibility study
820 required by this section or a substitute approved by the office
821 certifies within 12 months before the date of filing for office
822 approval that there has been no material adverse change in
823 status with regard to the feasibility study. If a material
824 adverse change exists at the time of submission, sufficient
825 information acceptable to the office and the feasibility
826 consultant must be submitted which remedies the adverse
827 condition.
828 (c)(d) Documents evidencing Proof that commitments have
829 been secured or a documented plan adopted by the applicant has
830 been approved by the office for long-term financing.
831 (d)(e) Documents evidencing Proof that the provider has
832 sufficient funds to meet the requirements of s. 651.035, which
833 may include funds deposited in the initial entrance fee account.
834 (e)(f) Documents evidencing Proof as to the intended
835 application of the proceeds upon release and documentation proof
836 that the entrance fees when released will be applied as
837 represented to the office.
838 (f) If any material change occurred in the facts set forth
839 in the application filed with the office pursuant to subsection
840 (1), the applicant timely filed the amendment setting forth such
841 change with the office and sent copies of the amendment to the
842 principal office of the facility and to the principal office of
843 the controlling company as required under that subsection.
844
845 Notwithstanding chapter 120, no person, other than the provider,
846 the escrow agent, and the office, may have a substantial
847 interest in any office decision regarding release of escrow
848 funds in any proceedings under chapter 120 or this chapter
849 regarding release of escrow funds.
850 (7) In lieu of the provider fulfilling the requirements in
851 subsection (5) and paragraphs (6)(b) and (c) (d), the office may
852 authorize the release of escrowed funds to retire all
853 outstanding debts on the facility and equipment upon application
854 of the provider and upon the provider’s showing that the
855 provider will grant to the residents a first mortgage on the
856 land, buildings, and equipment that constitute the facility, and
857 that the provider has satisfied paragraphs (6)(a), (c), and (d)
858 (e). Such mortgage shall secure the refund of the entrance fee
859 in the amount required by this chapter. The granting of such
860 mortgage is subject to the following:
861 (a) The first mortgage is granted to an independent trust
862 that is beneficially held by the residents. The document
863 creating the trust must include a provision that agrees to an
864 annual audit and will furnish to the office all information the
865 office may reasonably require. The mortgage may secure payment
866 on bonds issued to the residents or trustee. Such bonds are
867 redeemable after termination of the residency contract in the
868 amount and manner required by this chapter for the refund of an
869 entrance fee.
870 (b) Before granting a first mortgage to the residents, all
871 construction must be substantially completed and substantially
872 all equipment must be purchased. No part of the entrance fees
873 may be pledged as security for a construction loan or otherwise
874 used for construction expenses before the completion of
875 construction.
876 (c) If the provider is leasing the land or buildings used
877 by the facility, the leasehold interest must be for a term of at
878 least 30 years.
879 (8) The timeframes provided under s. 651.022(5) and (6)
880 apply to applications submitted under s. 651.021(2). The office
881 may not issue a certificate of authority to a facility that does
882 not have a component that is to be licensed pursuant to part II
883 of chapter 400 or to part I of chapter 429 or that does not
884 offer personal services or nursing services through written
885 contractual agreement. A written contractual agreement must be
886 disclosed in the contract for continuing care or continuing care
887 at-home and is subject to the provisions of s. 651.1151,
888 relating to administrative, vendor, and management contracts.
889 (9) The office may not approve an application that includes
890 in the plan of financing any encumbrance of the operating
891 reserves or renewal and replacement reserves required by this
892 chapter.
893 Section 9. Section 651.024, Florida Statutes, is amended to
894 read:
895 651.024 Acquisition.—
896 (1) A person who seeks to assume the role of general
897 partner of a provider or to otherwise assume ownership or
898 possession of, or control over, 10 percent or more of a
899 provider, a controlling company of the provider, or a provider’s
900 assets, based on the balance sheet from the most recent
901 financial audit report filed with the office, is issued a
902 certificate of authority to operate a continuing care facility
903 or a provisional certificate of authority shall be subject to
904 the provisions of s. 628.4615 and is not required to make
905 filings pursuant to s. 651.022, s. 651.023, or s. 651.0245.
906 (2) A person who seeks to acquire and become the provider
907 for a facility is subject to s. 651.0245 and is not required to
908 make filings pursuant to ss. 628.4615, 651.022, and 651.023.
909 (3) In addition to the provider or the controlling company,
910 the office has standing to petition a circuit court under s.
911 628.4615(9).
912 Section 10. Section 651.0245, Florida Statutes, is created
913 to read:
914 651.0245 Application for the simultaneous acquisition of a
915 facility and issuance of a certificate of authority.—
916 (1) Except with the prior written approval of the office, a
917 person may not, individually or in conjunction with any
918 affiliated person of such person, directly or indirectly acquire
919 a facility operating under a subsisting certificate of authority
920 and engage in the business of providing continuing care.
921 (2) An applicant seeking simultaneous acquisition of a
922 facility and issuance of a certificate of authority must:
923 (a) Comply with the notice requirements of s.
924 628.4615(2)(a); and
925 (b) File an application in the form required by the office
926 and cooperate with the office’s review of the application.
927 (3) The commission shall adopt by rule application
928 requirements equivalent to those described in ss. 628.4615(4)
929 and (5), 651.022(2), and 651.023(1)(b). The office shall review
930 the application and issue an approval or disapproval of the
931 filing in accordance with ss. 628.4615(6)(a) and (c), (7)-(10),
932 and (14); and 651.023(1)(b).
933 (4) In addition to the provider or the controlling company,
934 the office has standing to petition a circuit court under s.
935 628.4615(9).
936 (5) A person may rebut a presumption of control by filing a
937 disclaimer of control with the office on a form prescribed by
938 the commission. The disclaimer must fully disclose all material
939 relationships and bases for affiliation between the person and
940 the provider or facility, as well as the basis for disclaiming
941 the affiliation. In lieu of such form, a person or acquiring
942 party may file with the office a copy of a Schedule 13G filed
943 with the Securities and Exchange Commission pursuant to Rule
944 13d-1(b) or (c), 17 C.F.R. s. 240.13d-1, under the Securities
945 Exchange Act of 1934, as amended. After a disclaimer has been
946 filed, the provider or facility is relieved of any duty to
947 register or report under this section which may arise out of the
948 provider’s or facility’s relationship with the person, unless
949 the office disallows the disclaimer.
950 (6) The commission may adopt rules as necessary to
951 administer this section.
952 Section 11. Section 651.0246, Florida Statutes, is created
953 to read:
954 651.0246 Expansions.—
955 (1)(a) A provider must obtain written approval from the
956 office before commencing construction or marketing for an
957 expansion of a certificated facility equivalent to the addition
958 of at least 20 percent of existing units or 20 percent or more
959 of the number of continuing care at-home contracts. If the
960 provider has exceeded the current statewide median for days cash
961 on hand, debt service coverage ratio, and total facility
962 occupancy for the most recent two consecutive annual reporting
963 periods, the provider is automatically granted approval to
964 expand the total number of existing units by up to 35 percent
965 upon submitting a letter to the office indicating the total
966 number of planned units in the expansion, the proposed sources
967 and uses of funds, and an attestation that the provider
968 understands and pledges to comply with all minimum liquid
969 reserve and escrow account requirements. As used in this
970 section, the term “existing units” means the sum of the total
971 number of independent living units and assisted living units
972 identified in the most recent annual report filed with the
973 office pursuant to s. 651.026. For purposes of this section, the
974 statewide median for days cash on hand, debt service coverage
975 ratio, and total facility occupancy is the median calculated in
976 the most recent annual report submitted by the office to the
977 Continuing Care Advisory Council pursuant to s. 651.121(8). This
978 section does not apply to construction for which a certificate
979 of need from the Agency for Health Care Administration is
980 required.
981 (b) The application for the approval of an addition
982 consisting of 20 percent or more of existing units or continuing
983 care at-home contracts must be on forms adopted by the
984 commission. The application must include the feasibility study
985 required by this section and such other information as
986 reasonably requested by the office. If the expansion is only for
987 continuing care at-home contracts, an actuarial study prepared
988 by an independent actuary in accordance with standards adopted
989 by the American Academy of Actuaries which presents the
990 financial impact of the expansion may be substituted for the
991 feasibility study.
992 (c) In determining whether an expansion should be approved,
993 the office shall consider:
994 1. Whether the application meets all requirements of law;
995 2. Whether the feasibility study was based on sufficient
996 data and reasonable assumptions; and
997 3. Whether the applicant will be able to provide continuing
998 care or continuing care at-home as proposed and meet all
999 financial obligations related to its operations, including the
1000 financial requirements of this chapter.
1001
1002 If the application is denied, the office must notify the
1003 applicant in writing, citing the specific failures to meet the
1004 provisions of this chapter. A denial entitles the applicant to a
1005 hearing pursuant to chapter 120.
1006 (2) A provider applying for expansion of a certificated
1007 facility must submit all of the following:
1008 (a) A feasibility study prepared by an independent
1009 certified public accountant. The feasibility study must include
1010 at least the following information:
1011 1. A description of the facility and proposed expansion,
1012 including the location, the size, the anticipated completion
1013 date, and the proposed construction program.
1014 2. An identification and evaluation of the primary and, if
1015 applicable, secondary market areas of the facility and the
1016 projected unit sales per month.
1017 3. Projected revenues, including anticipated entrance fees;
1018 monthly service fees; nursing care revenues, if applicable; and
1019 all other sources of revenue.
1020 4. Projected expenses, including for staffing requirements
1021 and salaries; the cost of property, plant, and equipment,
1022 including depreciation expense; interest expense; marketing
1023 expense; and other operating expenses.
1024 5. A projected balance sheet of the applicant.
1025 6. The expectations for the financial condition of the
1026 project, including the projected cash flow and an estimate of
1027 the funds anticipated to be necessary to cover startup losses.
1028 7. The inflation factor, if any, assumed in the study for
1029 the proposed expansion and how and where it is applied.
1030 8. Project costs; the total amount of debt financing
1031 required; marketing projections; resident rates, fees, and
1032 charges; the competition; resident contract provisions; and
1033 other factors that affect the feasibility of the facility.
1034 9. Appropriate population projections, including morbidity
1035 and mortality assumptions.
1036 10. The name of the person who prepared the feasibility
1037 study and his or her experience in preparing similar studies or
1038 otherwise consulting in the field of continuing care.
1039 11. Financial forecasts or projections prepared in
1040 accordance with standards adopted by the American Institute of
1041 Certified Public Accountants or in accordance with standards for
1042 feasibility studies for continuing care retirement communities
1043 adopted by the Actuarial Standards Board.
1044 12. An independent evaluation and examination opinion for
1045 the first 5 years of operations, or a comparable opinion
1046 acceptable to the office, by the consultant who prepared the
1047 study, of the underlying assumptions used as a basis for the
1048 forecasts or projections in the study and that the assumptions
1049 are reasonable and proper and the project as proposed is
1050 feasible.
1051 13. Any other information that the provider deems relevant
1052 and appropriate to provide to enable the office to make a more
1053 informed determination.
1054 (b) Such other reasonable data, financial statements, and
1055 pertinent information as the commission or office may require
1056 with respect to the applicant or the facility to determine the
1057 financial status of the facility and the management capabilities
1058 of its managers and owners.
1059
1060 If any material change occurs in the facts set forth in an
1061 application filed with the office pursuant to this section, an
1062 amendment setting forth such change must be filed with the
1063 office within 10 business days after the applicant becomes aware
1064 of such change, and a copy of the amendment must be sent by
1065 registered mail to the principal office of the facility and to
1066 the principal office of the controlling company.
1067 (3) A minimum of 75 percent of the moneys paid for all or
1068 any part of an initial entrance fee or reservation deposit
1069 collected for units in the expansion and 50 percent of the
1070 moneys paid for all or any part of an initial fee collected for
1071 continuing care at-home contracts in the expansion must be
1072 placed in an escrow account or on deposit with the department as
1073 prescribed in s. 651.033. Up to 25 percent of the moneys paid
1074 for all or any part of an initial entrance fee or reservation
1075 deposit may be included or pledged for the construction or
1076 purchase of the facility or as security for long-term financing.
1077 As used in this section, the term “initial entrance fee” means
1078 the total entrance fee charged by the facility to the first
1079 occupant of a unit.
1080 (4) The provider is entitled to secure release of the
1081 moneys held in escrow within 7 days after receipt by the office
1082 of an affidavit from the provider, along with appropriate copies
1083 to verify, and notification to the escrow agent by certified
1084 mail that the following conditions have been satisfied:
1085 (a) A certificate of occupancy has been issued.
1086 (b) Payment in full has been received for at least 50
1087 percent of the total units of a phase or of the total of the
1088 combined phases constructed. If a provider offering continuing
1089 care at-home is applying for a release of escrowed entrance
1090 fees, the same minimum requirement must be met for the
1091 continuing care and continuing care at-home contracts
1092 independently of each other.
1093 (c) Documents evidencing that commitments have been secured
1094 or that a documented plan adopted by the applicant has been
1095 approved by the office for long-term financing.
1096 (d) Documents evidencing that the provider has sufficient
1097 funds to meet the requirements of s. 651.035, which may include
1098 funds deposited in the initial entrance fee account.
1099 (e) Documents evidencing the intended application of the
1100 proceeds upon release and documentation that the entrance fees,
1101 when released, will be applied as represented to the office.
1102
1103 Notwithstanding chapter 120, only the provider, the escrow
1104 agent, and the office have a substantial interest in any office
1105 decision regarding release of escrow funds in any proceedings
1106 under chapter 120 or this chapter.
1107 (5)(a) Within 30 days after receipt of an application for
1108 expansion, the office shall examine the application and shall
1109 notify the applicant in writing, specifically requesting any
1110 additional information that the office is authorized to require.
1111 Within 15 days after the office receives all the requested
1112 additional information, the office shall notify the applicant in
1113 writing that the requested information has been received and
1114 that the application is deemed complete as of the date of the
1115 notice. Failure to notify the applicant in writing within the
1116 15-day period constitutes acknowledgment by the office that it
1117 has received all requested additional information, and the
1118 application is deemed complete for purposes of review on the
1119 date the applicant files all of the required additional
1120 information. If the application submitted is determined by the
1121 office to be substantially incomplete so as to require
1122 substantial additional information, including biographical
1123 information, the office may return the application to the
1124 applicant with a written notice stating that the application as
1125 received is substantially incomplete and, therefore, is
1126 unacceptable for filing without further action required by the
1127 office. Any filing fee received must be refunded to the
1128 applicant.
1129 (b) An application is deemed complete upon the office
1130 receiving all requested information and the applicant correcting
1131 any error or omission of which the applicant was timely notified
1132 or when the time for such notification has expired. The office
1133 shall notify the applicant in writing of the date on which the
1134 application was deemed complete.
1135 (6) Within 45 days after the date on which an application
1136 is deemed complete as provided in paragraph (5)(b), the office
1137 shall complete its review and, based upon its review, approve an
1138 expansion by the applicant and issue a determination that the
1139 application meets all requirements of law, that the feasibility
1140 study was based on sufficient data and reasonable assumptions,
1141 and that the applicant will be able to provide continuing care
1142 or continuing care at-home as proposed and meet all financial
1143 and contractual obligations related to its operations, including
1144 the financial requirements of this chapter. If the application
1145 is denied, the office must notify the applicant in writing,
1146 citing the specific failures to meet the requirements of this
1147 chapter. The denial entitles the applicant to a hearing pursuant
1148 to chapter 120.
1149 Section 12. Paragraphs (b) and (c) of subsection (2) and
1150 subsection (3) of section 651.026, Florida Statutes, are
1151 amended, subsection (10) is added to that section, and paragraph
1152 (a) of subsection (2) of that section is republished, to read:
1153 651.026 Annual reports.—
1154 (2) The annual report shall be in such form as the
1155 commission prescribes and shall contain at least the following:
1156 (a) Any change in status with respect to the information
1157 required to be filed under s. 651.022(2).
1158 (b) A financial report statements audited by an independent
1159 certified public accountant which must contain, for two or more
1160 periods if the facility has been in existence that long, all of
1161 the following:
1162 1. An accountant’s opinion and, in accordance with
1163 generally accepted accounting principles:
1164 a. A balance sheet;
1165 b. A statement of income and expenses;
1166 c. A statement of equity or fund balances; and
1167 d. A statement of changes in cash flows.
1168 2. Notes to the financial report statements considered
1169 customary or necessary for full disclosure or adequate
1170 understanding of the financial report statements, financial
1171 condition, and operation.
1172 (c) The following financial information:
1173 1. A detailed listing of the assets maintained in the
1174 liquid reserve as required under s. 651.035 and in accordance
1175 with part II of chapter 625;
1176 2. A schedule giving additional information relating to
1177 property, plant, and equipment having an original cost of at
1178 least $25,000, so as to show in reasonable detail with respect
1179 to each separate facility original costs, accumulated
1180 depreciation, net book value, appraised value or insurable value
1181 and date thereof, insurance coverage, encumbrances, and net
1182 equity of appraised or insured value over encumbrances. Any
1183 property not used in continuing care must be shown separately
1184 from property used in continuing care;
1185 3. The level of participation in Medicare or Medicaid
1186 programs, or both;
1187 4. A statement of all fees required of residents,
1188 including, but not limited to, a statement of the entrance fee
1189 charged, the monthly service charges, the proposed application
1190 of the proceeds of the entrance fee by the provider, and the
1191 plan by which the amount of the entrance fee is determined if
1192 the entrance fee is not the same in all cases; and
1193 5. Any change or increase in fees if the provider changes
1194 the scope of, or the rates for, care or services, regardless of
1195 whether the change involves the basic rate or only those
1196 services available at additional costs to the resident;.
1197 6. If the provider has more than one certificated facility,
1198 or has operations that are not licensed under this chapter, it
1199 shall submit a balance sheet, statement of income and expenses,
1200 statement of equity or fund balances, and statement of cash
1201 flows for each facility licensed under this chapter as
1202 supplemental information to the audited financial report
1203 statements required under paragraph (b); and.
1204 7. The management’s calculation of the provider’s debt
1205 service coverage ratio, occupancy, and days cash on hand for the
1206 current reporting period.
1207 (3) The commission shall adopt by rule additional
1208 meaningful measures of assessing the financial viability of a
1209 provider. The rule may include the following factors:
1210 (a) Debt service coverage ratios.
1211 (b) Current ratios.
1212 (c) Adjusted current ratios.
1213 (d) Cash flows.
1214 (e) Occupancy rates.
1215 (f) Other measures, ratios, or trends.
1216 (g) Other factors as may be appropriate.
1217 (10) By August 1 of each year, the office shall publish on
1218 its website an annual industry report for the preceding calendar
1219 year which contains all of the following:
1220 (a) The median days cash on hand for all providers.
1221 (b) The median debt service coverage ratio for all
1222 providers.
1223 (c) The median occupancy rate for all providers by setting,
1224 including independent living, assisted living, skilled nursing,
1225 and the entire facility.
1226 (d) Documentation of the office’s compliance with the
1227 requirements in s. 651.105(1) relating to examination
1228 timeframes. The documentation must include the number of
1229 examinations completed in the preceding calendar year, the
1230 number of such examinations for which the report has been
1231 issued, and the percentage of all examinations completed within
1232 the statutorily required timeframes.
1233 (e) The number of annual reports submitted to the office
1234 pursuant to this section in the preceding calendar year and the
1235 percentage of such reports that the office has reviewed in order
1236 to determine whether a regulatory action level event has
1237 occurred.
1238 Section 13. Section 651.0261, Florida Statutes, is amended
1239 to read:
1240 651.0261 Quarterly and monthly statements.—
1241 (1) Within 45 days after the end of each fiscal quarter,
1242 each provider shall file a quarterly unaudited financial
1243 statement of the provider or of the facility in the form
1244 prescribed by commission rule and days cash on hand, occupancy,
1245 debt service coverage ratio, and a detailed listing of the
1246 assets maintained in the liquid reserve as required under s.
1247 651.035. The last quarterly statement for a fiscal year is not
1248 required if a provider does not have pending a regulatory action
1249 level event, impairment, or a corrective action plan. If a
1250 provider falls below two or more of the thresholds set forth in
1251 s. 651.011(25) at the end of any fiscal quarter, the provider
1252 shall submit to the office, at the same time as the quarterly
1253 statement, an explanation of the circumstances and a description
1254 of the actions it will take to meet the requirements.
1255 (2) If the office finds, pursuant to rules of the
1256 commission, that such information is needed to properly monitor
1257 the financial condition of a provider or facility or is
1258 otherwise needed to protect the public interest, the office may
1259 require the provider to file:
1260 (a) Within 25 days after the end of each month, a monthly
1261 unaudited financial statement of the provider or of the facility
1262 in the form prescribed by the commission by rule and a detailed
1263 listing of the assets maintained in the liquid reserve as
1264 required under s. 651.035, within 45 days after the end of each
1265 fiscal quarter, a quarterly unaudited financial statement of the
1266 provider or of the facility in the form prescribed by the
1267 commission by rule. The commission may by rule require all or
1268 part of the statements or filings required under this section to
1269 be submitted by electronic means in a computer-readable form
1270 compatible with the electronic data format specified by the
1271 commission.
1272 (b) Such other data, financial statements, and pertinent
1273 information as the commission or office may reasonably require
1274 with respect to the provider or the facility, its directors, or
1275 its trustees; or with respect to any parent, subsidiary, or
1276 affiliate, if the provider or facility relies on a contractual
1277 or financial relationship with such parent, subsidiary, or
1278 affiliate in order to meet the financial requirements of this
1279 chapter, to determine the financial status of the provider or of
1280 the facility and the management capabilities of its managers and
1281 owners.
1282 (3) A filing under subsection (2) may be required if any of
1283 the following applies:
1284 (a) The provider is:
1285 1. Subject to administrative supervision proceedings;
1286 2. Subject to a corrective action plan resulting from a
1287 regulatory action level event and for up to 2 years after the
1288 factors that caused the regulatory action level event have been
1289 corrected; or
1290 3. Subject to delinquency or receivership proceedings or
1291 has filed for bankruptcy.
1292 (b) The provider or facility displays a declining financial
1293 position.
1294 (c) A change of ownership of the provider or facility has
1295 occurred within the previous 2 years.
1296 (d) The provider is found to be impaired.
1297 (4) The commission may by rule require all or part of the
1298 statements or filings required under this section to be
1299 submitted by electronic means in a computer-readable format
1300 compatible with an electronic data format specified by the
1301 commission.
1302 Section 14. Section 651.028, Florida Statutes, is amended
1303 to read:
1304 651.028 Accredited facilities.—If A provider or facility is
1305 deemed accredited for purposes of ss. 400.235(5)(b)1. and
1306 651.105(1) if it is accredited without stipulations or
1307 conditions by a process found by the commission office to be
1308 acceptable, and substantially equivalent to the provisions of
1309 this chapter, and consistent the office may, pursuant to rule of
1310 the commission, waive any requirements of this chapter with
1311 respect to the provider if the office finds that such waivers
1312 are not inconsistent with the security protections intended by
1313 this chapter.
1314 Section 15. Subsections (1), (2), (3), and (5) of section
1315 651.033, Florida Statutes, are amended, and subsection (6) is
1316 added to that section, to read:
1317 651.033 Escrow accounts.—
1318 (1) When funds are required to be deposited in an escrow
1319 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s.
1320 651.0246, s. 651.035, or s. 651.055:
1321 (a) The escrow account must shall be established in a
1322 Florida bank, Florida savings and loan association, or Florida
1323 trust company, or a national bank that is chartered and
1324 supervised by the Office of the Comptroller of the Currency
1325 within the United States Department of the Treasury and that has
1326 a branch in this state, which is acceptable to the office, or
1327 such funds must be deposited on deposit with the department; and
1328 the funds deposited therein shall be kept and maintained in an
1329 account separate and apart from the provider’s business
1330 accounts.
1331 (b) An escrow agreement shall be entered into between the
1332 bank, savings and loan association, or trust company and the
1333 provider of the facility; the agreement shall state that its
1334 purpose is to protect the resident or the prospective resident;
1335 and, upon presentation of evidence of compliance with applicable
1336 portions of this chapter, or upon order of a court of competent
1337 jurisdiction, the escrow agent shall release and pay over the
1338 funds, or portions thereof, together with any interest accrued
1339 thereon or earned from investment of the funds, to the provider
1340 or resident as directed.
1341 (c) Any agreement establishing an escrow account required
1342 under the provisions of this chapter is shall be subject to
1343 approval by the office. The agreement must shall be in writing
1344 and shall contain, in addition to any other provisions required
1345 by law, a provision whereby the escrow agent agrees to abide by
1346 the duties imposed by paragraphs (b) and (e), (3)(a), (3)(b),
1347 and (5)(a) and subsection (6) under this section.
1348 (d) All funds deposited in an escrow account, if invested,
1349 shall be invested as set forth in part II of chapter 625;
1350 however, such investment may not diminish the funds held in
1351 escrow below the amount required by this chapter. Funds
1352 deposited in an escrow account are not subject to charges by the
1353 escrow agent except escrow agent fees associated with
1354 administering the accounts, or subject to any liens, judgments,
1355 garnishments, creditor’s claims, or other encumbrances against
1356 the provider or facility except as provided in s. 651.035(1).
1357 (e) At the request of either the provider or the office,
1358 the escrow agent shall issue a statement indicating the status
1359 of the escrow account.
1360 (2) Notwithstanding s. 651.035(7), In addition, the escrow
1361 agreement shall provide that the escrow agent or another person
1362 designated to act in the escrow agent’s place and the provider,
1363 except as otherwise provided in s. 651.035, shall notify the
1364 office in writing at least 10 days before the withdrawal of any
1365 portion of any funds required to be escrowed under the
1366 provisions of s. 651.035. However, in the event of an emergency
1367 and upon petition by the provider, the office may waive the 10
1368 day notification period and allow a withdrawal of up to 10
1369 percent of the required minimum liquid reserve. The office shall
1370 have 3 working days to deny the petition for the emergency 10
1371 percent withdrawal. If the office fails to deny the petition
1372 within 3 working days, the petition is shall be deemed to have
1373 been granted by the office. For purposes the purpose of this
1374 section, the term “working day” means each day that is not a
1375 Saturday, Sunday, or legal holiday as defined by Florida law.
1376 Also, for purposes the purpose of this section, the day the
1377 petition is received by the office is shall not be counted as
1378 one of the 3 days.
1379 (3) In addition, When entrance fees are required to be
1380 deposited in an escrow account pursuant to s. 651.0215, s.
1381 651.022, s. 651.023, s. 651.0246, or s. 651.055:
1382 (a) The provider shall deliver to the resident a written
1383 receipt. The receipt must show the payor’s name and address, the
1384 date, the price of the care contract, and the amount of money
1385 paid. A copy of each receipt, together with the funds, must
1386 shall be deposited with the escrow agent or as provided in
1387 paragraph (c). The escrow agent must shall release such funds to
1388 the provider 7 days after the date of receipt of the funds by
1389 the escrow agent if the provider, operating under a certificate
1390 of authority issued by the office, has met the requirements of
1391 s. 651.0215(8), s. 651.023(6), or s. 651.0246. However, if the
1392 resident rescinds the contract within the 7-day period, the
1393 escrow agent must shall release the escrowed fees to the
1394 resident.
1395 (b) At the request of an individual resident of a facility,
1396 the escrow agent shall issue a statement indicating the status
1397 of the resident’s portion of the escrow account.
1398 (c) At the request of an individual resident of a facility,
1399 the provider may hold the check for the 7-day period and may
1400 shall not deposit it during this time period. If the resident
1401 rescinds the contract within the 7-day period, the check must
1402 shall be immediately returned to the resident. Upon the
1403 expiration of the 7 days, the provider shall deposit the check.
1404 (d) A provider may assess a nonrefundable fee, which is
1405 separate from the entrance fee, for processing a prospective
1406 resident’s application for continuing care or continuing care
1407 at-home.
1408 (5) When funds are required to be deposited in an escrow
1409 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s.
1410 651.0246, or s. 651.035, the following shall apply:
1411 (a) The escrow agreement must shall require that the escrow
1412 agent furnish the provider with a quarterly statement indicating
1413 the amount of any disbursements from or deposits to the escrow
1414 account and the condition of the account during the period
1415 covered by the statement. The agreement must shall require that
1416 the statement be furnished to the provider by the escrow agent
1417 on or before the 10th day of the month following the end of the
1418 quarter for which the statement is due. If the escrow agent does
1419 not provide the quarterly statement to the provider on or before
1420 the 10th day of the month following the month for which the
1421 statement is due, the office may, in its discretion, levy
1422 against the escrow agent a fine not to exceed $25 a day for each
1423 day of noncompliance with the provisions of this subsection.
1424 (b) If the escrow agent does not provide the quarterly
1425 statement to the provider on or before the 10th day of the month
1426 following the quarter for which the statement is due, the
1427 provider shall, on or before the 15th day of the month following
1428 the quarter for which the statement is due, send a written
1429 request for the statement to the escrow agent by certified mail
1430 return receipt requested.
1431 (c) On or before the 20th day of the month following the
1432 quarter for which the statement is due, the provider shall file
1433 with the office a copy of the escrow agent’s statement or, if
1434 the provider has not received the escrow agent’s statement, a
1435 copy of the written request to the escrow agent for the
1436 statement.
1437 (d) The office may, in its discretion, in addition to any
1438 other penalty that may be provided for under this chapter, levy
1439 a fine against the provider not to exceed $25 a day for each day
1440 the provider fails to comply with the provisions of this
1441 subsection.
1442 (e) Funds held on deposit with the department are exempt
1443 from the reporting requirements of this subsection.
1444 (6) Except as described in paragraph (3)(a), the escrow
1445 agent may not release or otherwise allow the transfer of funds
1446 without the written approval of the office, unless the
1447 withdrawal is from funds in excess of the amounts required by
1448 ss. 651.0215, 651.022, 651.023, 651.0246, 651.035, and 651.055.
1449 Section 16. Section 651.034, Florida Statutes, is created
1450 to read:
1451 651.034 Financial and operating requirements for
1452 providers.—
1453 (1)(a) If a regulatory action level event occurs, the
1454 office must:
1455 1. Require the provider to prepare and submit a corrective
1456 action plan or, if applicable, a revised corrective action plan;
1457 2. Perform an examination pursuant to s. 651.105 or an
1458 analysis, as the office considers necessary, of the assets,
1459 liabilities, and operations of the provider, including a review
1460 of the corrective action plan or the revised corrective action
1461 plan; and
1462 3. After the examination or analysis, issue a corrective
1463 order, if necessary, specifying any corrective actions that the
1464 office determines are required.
1465 (b) In determining corrective actions, the office shall
1466 consider any factor relevant to the provider based upon the
1467 office’s examination or analysis of the assets, liabilities, and
1468 operations of the provider. The provider must submit the
1469 corrective action plan or the revised corrective action plan
1470 within 30 days after the occurrence of the regulatory action
1471 level event. The office shall review and approve or disapprove
1472 the corrective action plan within 45 business days.
1473 (c) The office may use members of the Continuing Care
1474 Advisory Council, individually or as a group, or may retain
1475 actuaries, investment experts, and other consultants to review a
1476 provider’s corrective action plan or revised corrective action
1477 plan, examine or analyze the assets, liabilities, and operations
1478 of a provider, and formulate the corrective order with respect
1479 to the provider. The costs and expenses relating to consultants
1480 must be borne by the affected provider.
1481 (2) Except when the office’s remedial rights are suspended
1482 pursuant to s. 651.114(11)(a), the office must take action
1483 necessary to place an impaired provider under regulatory
1484 control, including any remedy available under part I of chapter
1485 631. An impairment is sufficient grounds for the department to
1486 be appointed as receiver as provided in chapter 631, except when
1487 the office’s remedial rights are suspended pursuant to s.
1488 651.114(11)(a). If the office’s remedial rights are suspended
1489 pursuant to s. 651.114(11)(a), the impaired provider must make
1490 available to the office copies of any corrective action plan
1491 approved by the third-party lender or trustee to cure the
1492 impairment and any related required report. For purposes of s.
1493 631.051, impairment of a provider is defined according to the
1494 term “impaired” under s. 651.011. The office may forego taking
1495 action for up to 180 days after the impairment if the office
1496 finds there is a reasonable expectation that the impairment may
1497 be eliminated within the 180-day period.
1498 (3) There is no liability on the part of, and a cause of
1499 action may not arise against, the commission, department, or
1500 office, or their employees or agents, for any action they take
1501 in the performance of their powers and duties under this
1502 section.
1503 (4) The office shall transmit any notice that may result in
1504 regulatory action by registered mail, certified mail, or any
1505 other method of transmission which includes documentation of
1506 receipt by the provider. Notice is effective when the provider
1507 receives it.
1508 (5) This section is supplemental to the other laws of this
1509 state and does not preclude or limit any power or duty of the
1510 department or office under those laws or under the rules adopted
1511 pursuant to those laws.
1512 (6) The office may exempt a provider from subsection (1) or
1513 subsection (2) until stabilized occupancy is reached or until
1514 the time projected to achieve stabilized occupancy as reported
1515 in the last feasibility study required by the office as part of
1516 an application filing under s. 651.0215, s. 651.023, s. 651.024,
1517 or s. 651.0246 has elapsed, but for no longer than 5 years after
1518 the date of issuance of the certificate of occupancy.
1519 (7) The commission may adopt rules to administer this
1520 section, including, but not limited to, rules regarding
1521 corrective action plans, revised corrective action plans,
1522 corrective orders, and procedures to be followed in the event of
1523 a regulatory action level event or an impairment.
1524 Section 17. Paragraphs (a), (b), and (c) of subsection (1)
1525 of section 651.035, Florida Statutes, are amended, and
1526 subsections (7) through (11) are added to that section, to read:
1527 651.035 Minimum liquid reserve requirements.—
1528 (1) A provider shall maintain in escrow a minimum liquid
1529 reserve consisting of the following reserves, as applicable:
1530 (a) Each provider shall maintain in escrow as a debt
1531 service reserve the aggregate amount of all principal and
1532 interest payments due during the fiscal year on any mortgage
1533 loan or other long-term financing of the facility, including
1534 property taxes as recorded in the audited financial report
1535 statements required under s. 651.026. The amount must include
1536 any leasehold payments and all costs related to such payments.
1537 If principal payments are not due during the fiscal year, the
1538 provider must shall maintain in escrow as a minimum liquid
1539 reserve an amount equal to interest payments due during the next
1540 12 months on any mortgage loan or other long-term financing of
1541 the facility, including property taxes. If a provider does not
1542 have a mortgage loan or other financing on the facility, the
1543 provider must deposit monthly in escrow as a minimum liquid
1544 reserve an amount equal to one-twelfth of the annual property
1545 tax liability as indicated in the most recent tax notice
1546 provided pursuant to s. 197.322(3), and must annually pay
1547 property taxes out of such escrow.
1548 (b) A provider that has outstanding indebtedness that
1549 requires a debt service reserve to be held in escrow pursuant to
1550 a trust indenture or mortgage lien on the facility and for which
1551 the debt service reserve may only be used to pay principal and
1552 interest payments on the debt that the debtor is obligated to
1553 pay, and which may include property taxes and insurance, may
1554 include such debt service reserve in computing the minimum
1555 liquid reserve needed to satisfy this subsection if the provider
1556 furnishes to the office a copy of the agreement under which such
1557 debt service is held, together with a statement of the amount
1558 being held in escrow for the debt service reserve, certified by
1559 the lender or trustee and the provider to be correct. The
1560 trustee shall provide the office with any information concerning
1561 the debt service reserve account upon request of the provider or
1562 the office. Any such separate debt service reserves are not
1563 subject to the transfer provisions set forth in subsection (8).
1564 (c) Each provider shall maintain in escrow an operating
1565 reserve equal to 30 percent of the total operating expenses
1566 projected in the feasibility study required by s. 651.023 for
1567 the first 12 months of operation. Thereafter, each provider
1568 shall maintain in escrow an operating reserve equal to 15
1569 percent of the total operating expenses in the annual report
1570 filed pursuant to s. 651.026. If a provider has been in
1571 operation for more than 12 months, the total annual operating
1572 expenses must shall be determined by averaging the total annual
1573 operating expenses reported to the office by the number of
1574 annual reports filed with the office within the preceding 3-year
1575 period subject to adjustment if there is a change in the number
1576 of facilities owned. For purposes of this subsection, total
1577 annual operating expenses include all expenses of the facility
1578 except: depreciation and amortization; interest and property
1579 taxes included in paragraph (a); extraordinary expenses that are
1580 adequately explained and documented in accordance with generally
1581 accepted accounting principles; liability insurance premiums in
1582 excess of those paid in calendar year 1999; and changes in the
1583 obligation to provide future services to current residents. For
1584 providers initially licensed during or after calendar year 1999,
1585 liability insurance must shall be included in the total
1586 operating expenses in an amount not to exceed the premium paid
1587 during the first 12 months of facility operation. Beginning
1588 January 1, 1993, The operating reserves required under this
1589 subsection must shall be in an unencumbered account held in
1590 escrow for the benefit of the residents. Such funds may not be
1591 encumbered or subject to any liens or charges by the escrow
1592 agent or judgments, garnishments, or creditors’ claims against
1593 the provider or facility. However, if a facility had a lien,
1594 mortgage, trust indenture, or similar debt instrument in place
1595 before January 1, 1993, which encumbered all or any part of the
1596 reserves required by this subsection and such funds were used to
1597 meet the requirements of this subsection, then such arrangement
1598 may be continued, unless a refinancing or acquisition has
1599 occurred, and the provider is shall be in compliance with this
1600 subsection.
1601 (7)(a) A provider may withdraw funds held in escrow without
1602 the approval of the office if the amount held in escrow exceeds
1603 the requirements of this section and if the withdrawal will not
1604 affect compliance with this section.
1605 (b)1. For all other proposed withdrawals, in order to
1606 receive the consent of the office, the provider must file
1607 documentation showing why the withdrawal is necessary for the
1608 continued operation of the facility and such additional
1609 information as the office reasonably requires.
1610 2. The office shall notify the provider when the filing is
1611 deemed complete. If the provider has complied with all prior
1612 requests for information, the filing is deemed complete after 30
1613 days without communication from the office.
1614 3. Within 30 days after the date a file is deemed complete,
1615 the office shall provide the provider with written notice of its
1616 approval or disapproval of the request. The office may
1617 disapprove any request to withdraw such funds if it determines
1618 that the withdrawal is not in the best interest of the
1619 residents.
1620 (8) The office may order the immediate transfer of up to
1621 100 percent of the funds held in the minimum liquid reserve to
1622 the custody of the department pursuant to part III of chapter
1623 625 if the office finds that the provider is impaired or
1624 insolvent. The office may order such a transfer regardless of
1625 whether the office has suspended or revoked, or intends to
1626 suspend or revoke, the certificate of authority of the provider.
1627 (9) Each facility shall file with the office annually,
1628 together with the annual report required by s. 651.026, a
1629 calculation of its minimum liquid reserve determined in
1630 accordance with this section on a form prescribed by the
1631 commission.
1632 (10) Any increase in the minimum liquid reserve must be
1633 funded not later than 61 days after the minimum liquid reserve
1634 calculation is due to be filed as provided in s. 651.026.
1635 (11) If the minimum liquid reserve is less than the
1636 required minimum amount at the end of any fiscal quarter due to
1637 a change in the market value of the invested funds, the provider
1638 must fund the shortfall within 10 business days.
1639 Section 18. Effective July 1, 2019, section 651.043,
1640 Florida Statutes, is created to read:
1641 651.043 Approval of change in management.—
1642 (1) A contract with a management company entered into after
1643 July 1, 2019, must be in writing and include a provision that
1644 the contract will be canceled upon issuance of an order by the
1645 office pursuant to this section and without the application of a
1646 cancellation fee or penalty. If a provider contracts with a
1647 management company, a separate written contract is not required
1648 for the individual manager employed by the management company or
1649 contractor hired by the management company to oversee a
1650 facility. If a management company executes a contract with an
1651 individual manager or contractor, the contract is not required
1652 to be submitted to the office unless requested by the office.
1653 (2) A provider shall notify the office, in writing or
1654 electronically, of any change in management within 10 business
1655 days. For each new management company or manager not employed by
1656 a management company, the provider shall submit to the office
1657 the information required by s. 651.022(2) and a copy of the
1658 written management contract, if applicable.
1659 (3) For a provider that is found to be impaired or that has
1660 a regulatory action level event pending, the office may
1661 disapprove new management and order the provider to remove the
1662 new management after reviewing the information required under
1663 subsection (2).
1664 (4) For a provider other than that specified in subsection
1665 (3), the office may disapprove new management and order the
1666 provider to remove the new management after receiving the
1667 required information under subsection (2), if the office:
1668 (a) Finds that the new management is incompetent or
1669 untrustworthy;
1670 (b) Finds that the new management is so lacking in
1671 managerial experience as to make the proposed operation
1672 hazardous to the residents or potential residents;
1673 (c) Finds that the new management is so lacking in
1674 experience, ability, and standing as to jeopardize the
1675 reasonable promise of successful operation; or
1676 (d) Has good reason to believe that the new management is
1677 affiliated directly or indirectly through ownership, control, or
1678 business relations with any person or persons whose business
1679 operations are or have been marked by manipulation of assets or
1680 accounts or by bad faith, to the detriment of residents,
1681 stockholders, investors, creditors, or the public.
1682
1683 The office shall complete its review as required under
1684 subsections (3) and (4) and, if applicable, issue notice of
1685 disapproval of the new management within 30 business days after
1686 the filing is deemed complete. A filing is deemed complete upon
1687 the office’s receipt of all requested information and the
1688 provider’s correction of any error or omission for which the
1689 provider was timely notified. If the office does not issue
1690 notice of disapproval of the new management within 30 business
1691 days after the filing is deemed complete, the new management is
1692 deemed approved.
1693 (5) Management disapproved by the office must be removed
1694 within 30 days after receipt by the provider of notice of such
1695 disapproval.
1696 (6) The office may revoke, suspend, or take other
1697 administrative action against the certificate of authority of
1698 the provider if the provider:
1699 (a) Fails to timely remove management disapproved by the
1700 office;
1701 (b) Fails to timely notify the office of a change in
1702 management;
1703 (c) Appoints new management without a written contract when
1704 a written contract is required under this section; or
1705 (d) Repeatedly appoints management that was previously
1706 disapproved by the office or that is not approvable under
1707 subsection (4).
1708 (7) The provider shall remove any management immediately
1709 upon discovery of either of the following conditions, if the
1710 conditions were not disclosed in the notice to the office
1711 required under subsection (2):
1712 (a) That a manager has been found guilty of, or has pled
1713 guilty or no contest to, a felony charge, or has been held
1714 liable or has been enjoined in a civil action by final judgment,
1715 if the felony or civil action involved fraud, embezzlement,
1716 fraudulent conversion, or misappropriation of property.
1717 (b) That a manager is now, or was in the past, affiliated,
1718 directly or indirectly, through ownership interest of 10 percent
1719 or more in, or control of, any business, corporation, or other
1720 entity that has been found guilty of or has pled guilty or no
1721 contest to a felony charge, or has been held liable or has been
1722 enjoined in a civil action by final judgment, if the felony or
1723 civil action involved fraud, embezzlement, fraudulent
1724 conversion, or misappropriation of property.
1725
1726 The failure to remove such management is grounds for revocation
1727 or suspension of the provider’s certificate of authority.
1728 Section 19. Section 651.051, Florida Statutes, is amended
1729 to read:
1730 651.051 Maintenance of assets and records in state.—All
1731 records and assets of a provider must be maintained or readily
1732 accessible in this state or, if the provider’s corporate office
1733 is located in another state, such records must be electronically
1734 stored in a manner that will ensure that the records are readily
1735 accessible to the office. No records or assets may be removed
1736 from this state by a provider unless the office consents to such
1737 removal in writing before such removal. Such consent must shall
1738 be based upon the provider’s submitting satisfactory evidence
1739 that the removal will facilitate and make more economical the
1740 operations of the provider and will not diminish the service or
1741 protection thereafter to be given the provider’s residents in
1742 this state. Before Prior to such removal, the provider shall
1743 give notice to the president or chair of the facility’s
1744 residents’ council. If such removal is part of a cash management
1745 system which has been approved by the office, disclosure of the
1746 system must shall meet the notification requirements. The
1747 electronic storage of records on a web-based, secured storage
1748 platform by contract with a third party is acceptable if the
1749 records are readily accessible to the office.
1750 Section 20. Subsection (3) of section 651.055, Florida
1751 Statutes, is amended to read:
1752 651.055 Continuing care contracts; right to rescind.—
1753 (3) The contract must include or be accompanied by a
1754 statement, printed in boldfaced type, which reads: “This
1755 facility and all other continuing care facilities (also known as
1756 life plan communities) in the State of Florida are regulated by
1757 the Office of Insurance Regulation pursuant to chapter 651,
1758 Florida Statutes. A copy of the law is on file in this facility.
1759 The law gives you or your legal representative the right to
1760 inspect our most recent financial statement and inspection
1761 report before signing the contract. The financial structure of a
1762 continuing care provider can be complex, and the decision to
1763 enter into a contract for continuing care is a long-term
1764 commitment between a resident and the continuing care provider.
1765 You may wish to consult an attorney or a financial advisor
1766 before entering into such a contract.”
1767 Section 21. Subsection (2) of section 651.057, Florida
1768 Statutes, is amended to read:
1769 651.057 Continuing care at-home contracts.—
1770 (2) A provider that holds a certificate of authority and
1771 wishes to offer continuing care at-home must also:
1772 (a) Submit a business plan to the office with the following
1773 information:
1774 1. A description of the continuing care at-home services
1775 that will be provided, the market to be served, and the fees to
1776 be charged;
1777 2. A copy of the proposed continuing care at-home contract;
1778 3. An actuarial study prepared by an independent actuary in
1779 accordance with the standards adopted by the American Academy of
1780 Actuaries which presents the impact of providing continuing care
1781 at-home on the overall operation of the facility; and
1782 4. A market feasibility study that meets the requirements
1783 of s. 651.022(3) and documents that there is sufficient interest
1784 in continuing care at-home contracts to support such a program;
1785 (b) Demonstrate to the office that the proposal to offer
1786 continuing care at-home contracts to individuals who do not
1787 immediately move into the facility will not place the provider
1788 in an unsound financial condition;
1789 (c) Comply with the requirements of s. 651.0246(1) s.
1790 651.021(2), except that an actuarial study may be substituted
1791 for the feasibility study; and
1792 (d) Comply with the requirements of this chapter.
1793 Section 22. Subsection (1) of section 651.071, Florida
1794 Statutes, is amended to read:
1795 651.071 Contracts as preferred claims on liquidation or
1796 receivership.—
1797 (1) In the event of receivership or liquidation proceedings
1798 against a provider, all continuing care and continuing care at
1799 home contracts executed by a provider are shall be deemed
1800 preferred claims against all assets owned by the provider;
1801 however, such claims are subordinate to any secured claim. For
1802 purposes of s. 631.271, such contracts are deemed Class 2
1803 claims.
1804 Section 23. Subsections (2) and (3) of section 651.091,
1805 Florida Statutes, are amended, and subsection (4) of that
1806 section is republished, to read:
1807 651.091 Availability, distribution, and posting of reports
1808 and records; requirement of full disclosure.—
1809 (2) Every continuing care facility shall:
1810 (a) Display the certificate of authority in a conspicuous
1811 place inside the facility.
1812 (b) Post in a prominent position in the facility which is
1813 accessible to all residents and the general public a concise
1814 summary of the last examination report issued by the office,
1815 with references to the page numbers of the full report noting
1816 any deficiencies found by the office, and the actions taken by
1817 the provider to rectify such deficiencies, indicating in such
1818 summary where the full report may be inspected in the facility.
1819 (c) Post in a prominent position in the facility,
1820 accessible to all residents and the general public, a notice
1821 containing the contact information for the office and the
1822 Division of Consumer Services of the department and stating that
1823 the division or office may be contacted for the submission of
1824 inquiries and complaints with respect to potential violations of
1825 this chapter committed by a provider. Such contact information
1826 must include the division’s website and the toll-free consumer
1827 helpline and the office’s website and telephone number.
1828 (d) Provide notice to the president or chair of the
1829 residents’ council within 10 business days after issuance of a
1830 final examination report or the initiation of any legal or
1831 administrative proceeding by the office or the department and
1832 include a copy of such document.
1833 (e)(c) Post in a prominent position in the facility which
1834 is accessible to all residents and the general public a summary
1835 of the latest annual statement, indicating in the summary where
1836 the full annual statement may be inspected in the facility. A
1837 listing of any proposed changes in policies, programs, and
1838 services must also be posted.
1839 (f)(d) Distribute a copy of the full annual statement and a
1840 copy of the most recent third-party third party financial audit
1841 filed with the annual report to the president or chair of the
1842 residents’ council within 30 days after filing the annual report
1843 with the office, and designate a staff person to provide
1844 explanation thereof.
1845 (g)(e) Deliver the information described in s. 651.085(4)
1846 in writing to the president or chair of the residents’ council
1847 and make supporting documentation available upon request Notify
1848 the residents’ council of any plans filed with the office to
1849 obtain new financing, additional financing, or refinancing for
1850 the facility and of any applications to the office for any
1851 expansion of the facility.
1852 (h)(f) Deliver to the president or chair of the residents’
1853 council a summary of entrance fees collected and refunds made
1854 during the time period covered in the annual report and the
1855 refund balances due at the end of the report period.
1856 (i)(g) Deliver to the president or chair of the residents’
1857 council a copy of each quarterly statement within 30 days after
1858 the quarterly statement is filed with the office if the facility
1859 is required to file quarterly.
1860 (j)(h) Upon request, deliver to the president or chair of
1861 the residents’ council a copy of any newly approved continuing
1862 care or continuing care at-home contract within 30 days after
1863 approval by the office.
1864 (k) Provide to the president or chair of the residents’
1865 council a copy of any notice filed with the office relating to
1866 any change in ownership within 10 business days after such
1867 filing by the provider.
1868 (l) Make the information available to prospective residents
1869 pursuant to paragraph (3)(d) available to current residents and
1870 provide notice of changes to that information to the president
1871 or chair of the residents’ council within 3 business days.
1872 (3) Before entering into a contract to furnish continuing
1873 care or continuing care at-home, the provider undertaking to
1874 furnish the care, or the agent of the provider, shall make full
1875 disclosure, obtain written acknowledgment of receipt, and
1876 provide copies of the disclosure documents to the prospective
1877 resident or his or her legal representative, of the following
1878 information:
1879 (a) The contract to furnish continuing care or continuing
1880 care at-home.
1881 (b) The summary listed in paragraph (2)(b).
1882 (c) All ownership interests and lease agreements, including
1883 information specified in s. 651.022(2)(b)8.
1884 (d) In keeping with the intent of this subsection relating
1885 to disclosure, the provider shall make available for review
1886 master plans approved by the provider’s governing board and any
1887 plans for expansion or phased development, to the extent that
1888 the availability of such plans does not put at risk real estate,
1889 financing, acquisition, negotiations, or other implementation of
1890 operational plans and thus jeopardize the success of
1891 negotiations, operations, and development.
1892 (e) Copies of the rules and regulations of the facility and
1893 an explanation of the responsibilities of the resident.
1894 (f) The policy of the facility with respect to admission to
1895 and discharge from the various levels of health care offered by
1896 the facility.
1897 (g) The amount and location of any reserve funds required
1898 by this chapter, and the name of the person or entity having a
1899 claim to such funds in the event of a bankruptcy, foreclosure,
1900 or rehabilitation proceeding.
1901 (g)(h) A copy of s. 651.071.
1902 (h)(i) A copy of the resident’s rights as described in s.
1903 651.083.
1904 (i) Notice of the issuance of a final examination report or
1905 the initiation of any legal or administrative proceeding by the
1906 office or the department, including where the report or filing
1907 may be inspected in the facility, and that, upon request, an
1908 electronic copy or specific website address will be provided
1909 from which the document can be downloaded at no cost.
1910 (j) Notice that if the resident does not exercise the right
1911 to rescind a continuing care contract within 7 days after
1912 executing the contract, the resident’s funds held in escrow
1913 pursuant to s. 651.055(2) will be released to the provider.
1914 (k) A statement that distribution of the provider’s assets
1915 or income may occur or a statement that such distributions will
1916 not occur.
1917 (l) Notice of any holding company system or obligated group
1918 of which the provider is a member.
1919 (4) A true and complete copy of the full disclosure
1920 document to be used must be filed with the office before use. A
1921 resident or prospective resident or his or her legal
1922 representative may inspect the full reports referred to in
1923 paragraph (2)(b); the charter or other agreement or instrument
1924 required to be filed with the office pursuant to s. 651.022(2),
1925 together with all amendments thereto; and the bylaws of the
1926 corporation or association, if any. Upon request, copies of the
1927 reports and information shall be provided to the individual
1928 requesting them if the individual agrees to pay a reasonable
1929 charge to cover copying costs.
1930 Section 24. Subsection (4) of section 651.095, Florida
1931 Statutes, is amended to read:
1932 651.095 Advertisements; requirements; penalties.—
1933 (4) It is unlawful for any person, other than a provider
1934 licensed pursuant to this chapter, to advertise or market to the
1935 general public any product similar to continuing care through
1936 the use of such terms as “life care,” “life plan,” “life plan
1937 at-home,” “continuing care,” or “guaranteed care for life,” or
1938 similar terms, words, or phrases.
1939 Section 25. Section 651.105, Florida Statutes, is amended
1940 to read:
1941 651.105 Examination and inspections.—
1942 (1) The office may at any time, and shall at least once
1943 every 3 years, examine the business of any applicant for a
1944 certificate of authority and any provider engaged in the
1945 execution of care contracts or engaged in the performance of
1946 obligations under such contracts, in the same manner as is
1947 provided for the examination of insurance companies pursuant to
1948 ss. 624.316 and 624.318 s. 624.316. For a provider deemed
1949 accredited under as defined in s. 651.028, such examinations
1950 must shall take place at least once every 5 years. Such
1951 examinations must shall be made by a representative or examiner
1952 designated by the office whose compensation will be fixed by the
1953 office pursuant to s. 624.320. Routine examinations may be made
1954 by having the necessary documents submitted to the office; and,
1955 for this purpose, financial documents and records conforming to
1956 commonly accepted accounting principles and practices, as
1957 required under s. 651.026, are deemed adequate. The final
1958 written report of each examination must be filed with the office
1959 and, when so filed, constitutes a public record. Any provider
1960 being examined shall, upon request, give reasonable and timely
1961 access to all of its records. The representative or examiner
1962 designated by the office may at any time examine the records and
1963 affairs and inspect the physical property of any provider,
1964 whether in connection with a formal examination or not.
1965 (2) Any duly authorized officer, employee, or agent of the
1966 office may, upon presentation of proper identification, have
1967 access to, and examine inspect, any records, with or without
1968 advance notice, to secure compliance with, or to prevent a
1969 violation of, any provision of this chapter.
1970 (3) Reports of the results of such financial examinations
1971 must be kept on file by the office. Any investigatory records,
1972 reports, or documents held by the office are confidential and
1973 exempt from the provisions of s. 119.07(1), until the
1974 investigation is completed or ceases to be active. For the
1975 purpose of this section, an investigation is active while it is
1976 being conducted by the office with a reasonable, good faith
1977 belief that it could lead to the filing of administrative,
1978 civil, or criminal proceedings. An investigation does not cease
1979 to be active if the office is proceeding with reasonable
1980 dispatch and has a good faith belief that action could be
1981 initiated by the office or other administrative or law
1982 enforcement agency.
1983 (4) The office shall notify the provider and the executive
1984 officer of the governing body of the provider in writing of all
1985 deficiencies in its compliance with the provisions of this
1986 chapter and the rules adopted pursuant to this chapter and shall
1987 set a reasonable length of time for compliance by the provider.
1988 In addition, the office shall require corrective action or
1989 request a corrective action plan from the provider which plan
1990 demonstrates a good faith attempt to remedy the deficiencies by
1991 a specified date. If the provider fails to comply within the
1992 established length of time, the office may initiate action
1993 against the provider in accordance with the provisions of this
1994 chapter.
1995 (5) A provider shall respond to written correspondence from
1996 the office and provide data, financial statements, and pertinent
1997 information as requested by the office. The office has standing
1998 to petition a circuit court for mandatory injunctive relief to
1999 compel access to and require the provider to produce the
2000 documents, data, records, and other information requested by the
2001 office. The office may petition the circuit court in the county
2002 in which the facility is situated or the Circuit Court of Leon
2003 County to enforce this section At the time of the routine
2004 examination, the office shall determine if all disclosures
2005 required under this chapter have been made to the president or
2006 chair of the residents’ council and the executive officer of the
2007 governing body of the provider.
2008 (6) A representative of the provider must give a copy of
2009 the final examination report and corrective action plan, if one
2010 is required by the office, to the executive officer of the
2011 governing body of the provider within 60 days after issuance of
2012 the report.
2013 (7) Unless a provider is impaired or subject to a
2014 regulatory action level event, any parent, subsidiary, or
2015 affiliate is not subject to examination by the office as part of
2016 a routine examination. However, if a provider or facility relies
2017 on a contractual or financial relationship with a parent, a
2018 subsidiary, or an affiliate in order to meet the financial
2019 requirements of this chapter, the office may examine any parent,
2020 subsidiary, or affiliate that has a contractual or financial
2021 relationship with the provider or facility to the extent
2022 necessary to ascertain the financial condition of the provider.
2023 Section 26. Section 651.106, Florida Statutes, is amended
2024 to read:
2025 651.106 Grounds for discretionary refusal, suspension, or
2026 revocation of certificate of authority.—The office may deny an
2027 application or, suspend, or revoke the provisional certificate
2028 of authority or the certificate of authority of any applicant or
2029 provider if it finds that any one or more of the following
2030 grounds applicable to the applicant or provider exist:
2031 (1) Failure by the provider to continue to meet the
2032 requirements for the authority originally granted.
2033 (2) Failure by the provider to meet one or more of the
2034 qualifications for the authority specified by this chapter.
2035 (3) Material misstatement, misrepresentation, or fraud in
2036 obtaining the authority, or in attempting to obtain the same.
2037 (4) Demonstrated lack of fitness or trustworthiness.
2038 (5) Fraudulent or dishonest practices of management in the
2039 conduct of business.
2040 (6) Misappropriation, conversion, or withholding of moneys.
2041 (7) Failure to comply with, or violation of, any proper
2042 order or rule of the office or commission or violation of any
2043 provision of this chapter.
2044 (8) The insolvent or impaired condition of the provider or
2045 the provider’s being in such condition or using such methods and
2046 practices in the conduct of its business as to render its
2047 further transactions in this state hazardous or injurious to the
2048 public.
2049 (9) Refusal by the provider to be examined or to produce
2050 its accounts, records, and files for examination, or refusal by
2051 any of its officers to give information with respect to its
2052 affairs or to perform any other legal obligation under this
2053 chapter when required by the office.
2054 (10) Failure by the provider to comply with the
2055 requirements of s. 651.026 or s. 651.033.
2056 (11) Failure by the provider to maintain escrow accounts or
2057 funds as required by this chapter.
2058 (12) Failure by the provider to meet the requirements of
2059 this chapter for disclosure of information to residents
2060 concerning the facility, its ownership, its management, its
2061 development, or its financial condition or failure to honor its
2062 continuing care or continuing care at-home contracts.
2063 (13) Any cause for which issuance of the license could have
2064 been refused had it then existed and been known to the office.
2065 (14) Having been found guilty of, or having pleaded guilty
2066 or nolo contendere to, a felony in this state or any other
2067 state, without regard to whether a judgment or conviction has
2068 been entered by the court having jurisdiction of such cases.
2069 (15) In the conduct of business under the license, engaging
2070 in unfair methods of competition or in unfair or deceptive acts
2071 or practices prohibited under part IX of chapter 626.
2072 (16) A pattern of bankrupt enterprises.
2073 (17) The ownership, control, or management of the
2074 organization includes any person:
2075 (a) Who is not reputable and of responsible character;
2076 (b) Who is so lacking in management expertise as to make
2077 the operation of the provider hazardous to potential and
2078 existing residents;
2079 (c) Who is so lacking in management experience, ability,
2080 and standing as to jeopardize the reasonable promise of
2081 successful operation;
2082 (d) Who is affiliated, directly or indirectly, through
2083 ownership or control, with any person or persons whose business
2084 operations are or have been marked by business practices or
2085 conduct that is detrimental to the public, contract holders,
2086 investors, or creditors, or by manipulation of assets, finances,
2087 or accounts or by bad faith; or
2088 (e) Whose business operations are or have been marked by
2089 business practices or conduct that is detrimental to the public,
2090 contract holders, investors, or creditors, or by manipulation of
2091 assets, finances, or accounts or by bad faith.
2092 (18) The provider has not filed a notice of change in
2093 management, fails to remove a disapproved manager, or persists
2094 in appointing disapproved managers.
2095
2096 Revocation of a certificate of authority under this section does
2097 not relieve a provider from the provider’s obligation to
2098 residents under the terms and conditions of any continuing care
2099 or continuing care at-home contract between the provider and
2100 residents or the provisions of this chapter. The provider shall
2101 continue to file its annual statement and pay license fees to
2102 the office as required under this chapter as if the certificate
2103 of authority had continued in full force, but the provider shall
2104 not issue any new contracts. The office may seek an action in
2105 the Circuit Court of Leon County to enforce the office’s order
2106 and the provisions of this section.
2107 Section 27. Section 651.1065, Florida Statutes, is created
2108 to read:
2109 651.1065 Soliciting or accepting new continuing care
2110 contracts by impaired or insolvent facilities or providers.—
2111 (1) Regardless of whether delinquency proceedings as to a
2112 continuing care facility have been or are to be initiated, a
2113 proprietor, a general partner, a member, an officer, a director,
2114 a trustee, or a manager of a continuing care facility may not
2115 actively solicit, approve the solicitation or acceptance of, or
2116 accept new continuing care contracts in this state after the
2117 proprietor, general partner, member, officer, director, trustee,
2118 or manager knew, or reasonably should have known, that the
2119 continuing care facility was impaired or insolvent except with
2120 the written permission of the office. If the facility has
2121 declared bankruptcy, the bankruptcy court or trustee appointed
2122 by the court has jurisdiction over such matters. The office must
2123 approve or disapprove the continued marketing of new contracts
2124 within 15 days after receiving a request from a provider.
2125 (2) A proprietor, a general partner, a member, an officer,
2126 a director, a trustee, or a manager who violates this section
2127 commits a felony of the third degree, punishable as provided in
2128 s. 775.082, s. 775.083, or s. 775.084.
2129 Section 28. Subsections (1) and (3) of section 651.111,
2130 Florida Statutes, are amended to read:
2131 651.111 Requests for inspections.—
2132 (1) Any interested party may request an inspection of the
2133 records and related financial affairs of a provider providing
2134 care in accordance with the provisions of this chapter by
2135 transmitting to the office notice of an alleged violation of
2136 applicable requirements prescribed by statute or by rule,
2137 specifying to a reasonable extent the details of the alleged
2138 violation, which notice must shall be signed by the complainant.
2139 As used in this section, the term “inspection” means an inquiry
2140 into a provider’s compliance with this chapter.
2141 (3) Upon receipt of a complaint, the office shall make a
2142 preliminary review to determine if the complaint alleges a
2143 violation of this chapter; and, unless the office determines
2144 that the complaint does not allege a violation of this chapter
2145 or is without any reasonable basis, the office shall make an
2146 inspection. The office shall provide the complainant with a
2147 written acknowledgment of the complaint within 15 days after
2148 receipt by the office. The complainant shall be advised, within
2149 30 days after the receipt of the complaint by the office, of the
2150 office’s determination that the complaint does not allege a
2151 violation of this chapter, that the complaint is without any
2152 reasonable basis, or that the office will make an inspection.
2153 The notice must include an estimated timeframe for completing
2154 the inspection and a contact number. If the inspection is not
2155 completed within the estimated timeframe, the office must
2156 provide the complainant with a revised timeframe. Within 15 days
2157 after completing an inspection, the office shall provide the
2158 complainant and the provider a written statement specifying any
2159 violations of this chapter and any actions taken or that no such
2160 violation was found proposed course of action of the office.
2161 Section 29. Section 651.114, Florida Statutes, is amended
2162 to read:
2163 651.114 Delinquency proceedings; remedial rights.—
2164 (1) Upon determination by the office that a provider is not
2165 in compliance with this chapter, the office may notify the chair
2166 of the Continuing Care Advisory Council, who may assist the
2167 office in formulating a corrective action plan.
2168 (2) Within 30 days after a request by either the advisory
2169 council or the office, a provider shall make a plan for
2170 obtaining compliance or solvency available to the advisory
2171 council and the office, within 30 days after being requested to
2172 do so by the council, a plan for obtaining compliance or
2173 solvency.
2174 (3) Within 30 days after receipt of a plan for obtaining
2175 compliance or solvency, the office or, at the request of the
2176 office, notification, the advisory council shall:
2177 (a) Consider and evaluate the plan submitted by the
2178 provider.
2179 (b) Discuss the problem and solutions with the provider.
2180 (c) Conduct such other business as is necessary.
2181 (d) Report its findings and recommendations to the office,
2182 which may require additional modification of the plan.
2183
2184 This subsection may not be construed to delay or prevent the
2185 office from taking any regulatory measures it deems necessary
2186 regarding the provider that submitted the plan.
2187 (4) If the financial condition of a continuing care
2188 provider is impaired or is such that if not modified or
2189 corrected, its continued operation would result in insolvency,
2190 the office may direct the provider to formulate and file with
2191 the office a corrective action plan. If the provider fails to
2192 submit a plan within 30 days after the office’s directive or
2193 submits a plan that is insufficient to correct the condition,
2194 the office may specify a plan and direct the provider to
2195 implement the plan. Before specifying a plan, the office may
2196 seek a recommended plan from the advisory council.
2197 (5)(4) After receiving approval of a plan by the office,
2198 the provider shall submit a progress report monthly to the
2199 advisory council or the office, or both, in a manner prescribed
2200 by the office. After 3 months, or at any earlier time deemed
2201 necessary, the council shall evaluate the progress by the
2202 provider and shall advise the office of its findings.
2203 (6)(5) If Should the office finds find that sufficient
2204 grounds exist for rehabilitation, liquidation, conservation,
2205 reorganization, seizure, or summary proceedings of an insurer as
2206 set forth in ss. 631.051, 631.061, and 631.071, the department
2207 office may petition for an appropriate court order or may pursue
2208 such other relief as is afforded in part I of chapter 631.
2209 Before invoking its powers under part I of chapter 631, the
2210 department office shall notify the chair of the advisory
2211 council.
2212 (7) For purposes of s. 631.051, impairment of a provider
2213 has the same meaning as the term “impaired” in s. 651.011.
2214 (8)(6) In the event an order of conservation,
2215 rehabilitation, liquidation, or conservation, reorganization,
2216 seizure, or summary proceeding has been entered against a
2217 provider, the department and office are vested with all of the
2218 powers and duties they have under the provisions of part I of
2219 chapter 631 in regard to delinquency proceedings of insurance
2220 companies. A provider shall give written notice of the
2221 proceeding to its residents within 3 business days after the
2222 initiation of a delinquency proceeding under chapter 631 and
2223 shall include a notice of the delinquency proceeding in any
2224 written materials provided to prospective residents
2225 (7) If the financial condition of the continuing care
2226 facility or provider is such that, if not modified or corrected,
2227 its continued operation would result in insolvency, the office
2228 may direct the provider to formulate and file with the office a
2229 corrective action plan. If the provider fails to submit a plan
2230 within 30 days after the office’s directive or submits a plan
2231 that is insufficient to correct the condition, the office may
2232 specify a plan and direct the provider to implement the plan.
2233 (9) A provider subject to an order to show cause entered
2234 pursuant to chapter 631 must file its written response to the
2235 order, together with any defenses it may have to the
2236 department’s allegations, according to the time periods
2237 specified in s. 631.031(3).
2238 (10) A hearing held pursuant to chapter 631 to determine
2239 whether cause exists for the department to be appointed receiver
2240 must be held in accordance with the time period specified in s.
2241 631.031(4).
2242
2243 ================= T I T L E A M E N D M E N T ================
2244 And the title is amended as follows:
2245 Delete lines 31 - 131
2246 and insert:
2247 persons relating to provider acquisitions; providing
2248 standing to the office to petition a circuit court in
2249 certain proceedings; creating s. 651.0245, F.S.;
2250 specifying procedures, requirements, and a prohibition
2251 relating to an application for the simultaneous
2252 acquisition of a facility and issuance of a
2253 certificate of authority and to the office’s review of
2254 such application; specifying rulemaking requirements
2255 and authority of the Financial Services Commission;
2256 providing standing to the office to petition a circuit
2257 court in certain proceedings; specifying procedures
2258 for rebutting a presumption of control; creating s.
2259 651.0246, F.S.; specifying requirements, conditions,
2260 procedures, and prohibitions relating to provider
2261 applications to commence construction or marketing for
2262 expansions of certificated facilities and to the
2263 office’s review of such applications; defining the
2264 term “existing units”; specifying escrow requirements
2265 for certain moneys; specifying conditions under which
2266 providers are entitled to secure release of such
2267 moneys; providing applicability and construction;
2268 amending s. 651.026, F.S.; revising requirements for
2269 annual reports filed by providers with the office;
2270 revising the commission’s rulemaking authority;
2271 requiring the office to annually publish a specified
2272 industry report; amending s. 651.0261, F.S.; requiring
2273 providers to file quarterly unaudited financial
2274 statements; providing an exception for filing a
2275 certain quarterly statement; revising information that
2276 the office may require providers to file and the
2277 circumstances under which such information must be
2278 filed; revising the commission’s rulemaking authority;
2279 amending s. 651.028, F.S.; specifying applicability of
2280 certain accreditations of providers or facilities;
2281 deleting the authority of the office to waive
2282 requirements of ch. 651, F.S., for accredited
2283 facilities; providing that the commission, rather than
2284 the office, must make a certain finding; amending s.
2285 651.033, F.S.; revising applicability of escrow
2286 requirements; revising requirements for escrow
2287 accounts and agreements; revising the office’s
2288 authority to allow a withdrawal of a specified
2289 percentage of the required minimum liquid reserve;
2290 revising applicability of requirements relating to the
2291 deposit of certain funds in escrow accounts;
2292 prohibiting an escrow agent, except under certain
2293 circumstances, from releasing or allowing the transfer
2294 of funds; creating s. 651.034, F.S.; specifying
2295 requirements for the office if a regulatory action
2296 level event occurs; specifying requirements for
2297 corrective action plans; authorizing the office to use
2298 members of the Continuing Care Advisory Council and to
2299 retain consultants for certain purposes; requiring
2300 affected providers to bear costs and expenses relating
2301 to such consultants; specifying requirements for, and
2302 authorized actions of, the office and the Department
2303 of Financial Services if an impairment occurs;
2304 providing construction; authorizing the office to
2305 exempt a provider from certain requirements for a
2306 certain timeframe; authorizing the commission to adopt
2307 rules; amending s. 651.035, F.S.; revising minimum
2308 liquid reserve requirements for providers; specifying
2309 requirements, limitations, and procedures for a
2310 provider’s withdrawal of funds held in escrow and the
2311 office’s review of certain requests for withdrawal;
2312 authorizing the office to order certain transfers
2313 under certain circumstances; requiring facilities to
2314 annually file with the office a minimum liquid reserve
2315 calculation; requiring increases in the minimum liquid
2316 reserve to be funded within a certain timeframe;
2317 requiring providers to fund shortfalls in minimum
2318 liquid reserves under certain circumstances within a
2319 certain timeframe; creating s. 651.043, F.S.;
2320 specifying requirements for certain management company
2321 contracts; specifying requirements, procedures, and
2322 authorized actions relating to changes in provider
2323 management and to the office’s review of such changes;
2324 requiring that disapproved management be removed
2325 within a certain timeframe; authorizing the office to
2326 take certain disciplinary actions under certain
2327 circumstances; requiring providers to immediately
2328 remove management under certain circumstances;
2329 amending s. 651.051, F.S.; revising requirements for
2330 the maintenance of provider records and assets;
2331 amending s. 651.055, F.S.; revising a required
2332 statement in continuing care contracts; amending s.
2333 651.057, F.S.; conforming provisions to changes made
2334 by the act; amending s. 651.071, F.S.; specifying the
2335 priority of continuing care contracts and continuing
2336 care at-home contracts in receivership or liquidation
2337 proceedings against a provider; amending s. 651.091,
2338 F.S.; revising requirements for continuing care
2339 facilities relating to posting or providing notices;
2340 amending s. 651.095, F.S.; adding terms to a list of
2341 prohibited terms in certain advertisements; amending
2342 s. 651.105, F.S.; adding a certain Florida Insurance
2343 Code provision to the office’s authority to examine
2344 certain providers and applicants; authorizing the
2345 office to examine records for specified purposes;
2346 requiring providers