Bill Text: FL S1070 | 2019 | Regular Session | Comm Sub
Bill Title: Continuing Care Contracts
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2019-05-02 - Laid on Table, companion bill(s) passed, see CS/CS/CS/HB 1033 (Ch. 2019-160) [S1070 Detail]
Download: Florida-2019-S1070-Comm_Sub.html
Florida Senate - 2019 CS for CS for SB 1070 By the Committees on Appropriations; and Banking and Insurance; and Senator Lee 576-04634-19 20191070c2 1 A bill to be entitled 2 An act relating to continuing care contracts; amending 3 s. 651.011, F.S.; adding and revising definitions; 4 amending s. 651.012, F.S.; conforming a cross 5 reference; deleting an obsolete date; amending s. 6 651.013, F.S.; adding certain Florida Insurance Code 7 provisions to the Office of Insurance Regulation’s 8 authority to regulate providers of continuing care and 9 continuing care at-home; amending s. 651.019, F.S.; 10 revising requirements for providers and facilities 11 relating to financing and refinancing transactions; 12 amending s. 651.021, F.S.; conforming provisions to 13 changes made by the act; creating s. 651.0215, F.S.; 14 specifying conditions, requirements, procedures, and 15 prohibitions relating to consolidated applications for 16 provisional certificates of authority and for 17 certificates of authority and to the office’s review 18 of such applications; specifying conditions under 19 which a provider is entitled to secure the release of 20 certain escrowed funds; providing construction; 21 amending s. 651.022, F.S.; revising and specifying 22 requirements, procedures, and prohibitions relating to 23 applications for provisional certificates of authority 24 and to the office’s review of such applications; 25 amending s. 651.023, F.S.; revising and specifying 26 requirements, procedures, and prohibitions relating to 27 applications for certificates of authority and to the 28 office’s review of such applications; conforming 29 provisions to changes made by the act; amending s. 30 651.024, F.S.; revising requirements for certain 31 persons relating to provider acquisitions; providing 32 standing to the office to petition a circuit court in 33 certain proceedings; creating s. 651.0245, F.S.; 34 specifying procedures, requirements, and a prohibition 35 relating to an application for the simultaneous 36 acquisition of a facility and issuance of a 37 certificate of authority and to the office’s review of 38 such application; specifying rulemaking requirements 39 and authority of the Financial Services Commission; 40 providing standing to the office to petition a circuit 41 court in certain proceedings; specifying procedures 42 for rebutting a presumption of control; creating s. 43 651.0246, F.S.; specifying requirements, conditions, 44 procedures, and prohibitions relating to provider 45 applications to commence construction or marketing for 46 expansions of certificated facilities and to the 47 office’s review of such applications; defining the 48 term “existing units”; specifying escrow requirements 49 for certain moneys; specifying conditions under which 50 providers are entitled to secure release of such 51 moneys; providing applicability and construction; 52 amending s. 651.026, F.S.; revising requirements for 53 annual reports filed by providers with the office; 54 revising the commission’s rulemaking authority; 55 requiring the office to annually publish a specified 56 industry report; amending s. 651.0261, F.S.; requiring 57 providers to file quarterly unaudited financial 58 statements; providing an exception for filing a 59 certain quarterly statement; revising information that 60 the office may require providers to file and the 61 circumstances under which such information must be 62 filed; revising the commission’s rulemaking authority; 63 amending s. 651.028, F.S.; specifying applicability of 64 certain accreditations of providers or facilities; 65 deleting the authority of the office to waive 66 requirements of ch. 651, F.S., for accredited 67 facilities; providing that the commission, rather than 68 the office, must make a certain finding; amending s. 69 651.033, F.S.; revising applicability of escrow 70 requirements; revising requirements for escrow 71 accounts and agreements; revising the office’s 72 authority to allow a withdrawal of a specified 73 percentage of the required minimum liquid reserve; 74 revising applicability of requirements relating to the 75 deposit of certain funds in escrow accounts; 76 prohibiting an escrow agent, except under certain 77 circumstances, from releasing or allowing the transfer 78 of funds; creating s. 651.034, F.S.; specifying 79 requirements for the office if a regulatory action 80 level event occurs; specifying requirements for 81 corrective action plans; authorizing the office to use 82 members of the Continuing Care Advisory Council and to 83 retain consultants for certain purposes; requiring 84 affected providers to bear costs and expenses relating 85 to such consultants; specifying requirements for, and 86 authorized actions of, the office and the Department 87 of Financial Services if an impairment occurs; 88 providing construction; authorizing the office to 89 exempt a provider from certain requirements for a 90 certain timeframe; authorizing the commission to adopt 91 rules; amending s. 651.035, F.S.; revising minimum 92 liquid reserve requirements for providers; specifying 93 requirements, limitations, and procedures for a 94 provider’s withdrawal of funds held in escrow and the 95 office’s review of certain requests for withdrawal; 96 authorizing the office to order certain transfers 97 under certain circumstances; requiring facilities to 98 annually file with the office a minimum liquid reserve 99 calculation; requiring increases in the minimum liquid 100 reserve to be funded within a certain timeframe; 101 requiring providers to fund shortfalls in minimum 102 liquid reserves under certain circumstances within a 103 certain timeframe; creating s. 651.043, F.S.; 104 specifying requirements for certain management company 105 contracts; specifying requirements, procedures, and 106 authorized actions relating to changes in provider 107 management and to the office’s review of such changes; 108 requiring that disapproved management be removed 109 within a certain timeframe; authorizing the office to 110 take certain disciplinary actions under certain 111 circumstances; requiring providers to immediately 112 remove management under certain circumstances; 113 amending s. 651.051, F.S.; revising requirements for 114 the maintenance of provider records and assets; 115 amending s. 651.055, F.S.; revising a required 116 statement in continuing care contracts; amending s. 117 651.057, F.S.; conforming provisions to changes made 118 by the act; amending s. 651.071, F.S.; specifying the 119 priority of continuing care contracts and continuing 120 care at-home contracts in receivership or liquidation 121 proceedings against a provider; amending s. 651.091, 122 F.S.; revising requirements for continuing care 123 facilities relating to posting or providing notices; 124 amending s. 651.095, F.S.; adding terms to a list of 125 prohibited terms in certain advertisements; amending 126 s. 651.105, F.S.; adding a certain Florida Insurance 127 Code provision to the office’s authority to examine 128 certain providers and applicants; authorizing the 129 office to examine records for specified purposes; 130 requiring providers to respond to the office’s written 131 correspondence and to provide certain information; 132 providing standing to the office to petition certain 133 circuit courts for certain relief; revising, and 134 specifying limitations on, the office’s examination 135 authority; amending s. 651.106, F.S.; authorizing the 136 office to deny applications on specified grounds; 137 adding and revising grounds for suspension or 138 revocation of provisional certificates of authority 139 and certificates of authority; creating s. 651.1065, 140 F.S.; prohibiting certain actions by certain persons 141 of an impaired or insolvent continuing care facility; 142 providing that bankruptcy courts or trustees have 143 jurisdiction over certain matters; requiring the 144 office to approve or disapprove the continued 145 marketing of new contracts within a certain timeframe; 146 providing a criminal penalty; amending s. 651.111, 147 F.S.; defining the term “inspection”; revising 148 procedures and requirements relating to requests for 149 inspections to the office; amending s. 651.114, F.S.; 150 revising and specifying requirements, procedures, and 151 authorized actions relating to providers’ corrective 152 action plans; providing construction; revising and 153 specifying requirements and procedures relating to 154 delinquency proceedings against a provider; revising 155 circumstances under which the office must provide a 156 certain notice to trustees or lenders; creating s. 157 651.1141, F.S.; providing legislative findings; 158 authorizing the office to issue certain immediate 159 final orders under certain circumstances; amending s. 160 651.121, F.S.; revising the composition of the 161 Continuing Care Advisory Council; amending s. 651.125, 162 F.S.; revising a prohibition to include certain 163 actions performed without a valid provisional 164 certificate of authority; providing effective dates. 165 166 Be It Enacted by the Legislature of the State of Florida: 167 168 Section 1. Section 651.011, Florida Statutes, is amended to 169 read: 170 651.011 Definitions.—As used in this chapter, the term: 171 (1) “Actuarial opinion” means an opinion issued by an 172 actuary in accordance with Actuarial Standards of Practice No. 3 173 for Continuing Care Retirement Communities, Revised Edition, 174 effective May 1, 2011. 175 (2) “Actuarial study” means an analysis prepared for an 176 individual facility, or consolidated for multiple facilities, 177 for either a certified provider, as of a current valuation date 178 or the most recent fiscal year, or for an applicant, as of a 179 projected future valuation date, which includes an actuary’s 180 opinion as to whether such provider or applicant is in 181 satisfactory actuarial balance in accordance with Actuarial 182 Standards of Practice No. 3 for Continuing Care Retirement 183 Communities, Revised Edition, effective May 1, 2011. 184 (3) “Actuary” means an individual who is qualified to sign 185 an actuarial opinion in accordance with the American Academy of 186 Actuaries’ qualification standards and who is a member in good 187 standing of the American Academy of Actuaries. 188 (4)(1)“Advertising” means the dissemination of written, 189 visual, or electronic information by a provider, or any person 190 affiliated with or controlled by a provider, to potential 191 residents or their representatives for the purpose of inducing 192 such persons to subscribe to or enter into a contract for 193 continuing care or continuing care at-home. 194 (5)(2)“Continuing care” or “care” means, pursuant to a 195 contract, furnishing shelter and nursing care or personal 196 services to a resident who resides in a facility, whether such 197 nursing care or personal services are provided in the facility 198 or in another setting designated in the contract for continuing 199 care, by an individual not related by consanguinity or affinity 200 to the resident, upon payment of an entrance fee. 201 (6)(3)“Continuing Care Advisory Council” or “advisory 202 council” means the council established in s. 651.121. 203 (7)(4)“Continuing care at-home” means, pursuant to a 204 contract other than a contract described in subsection (5)(2), 205 furnishing to a resident who resides outside the facility the 206 right to future access to shelter and nursing care or personal 207 services, whether such services are provided in the facility or 208 in another setting designated in the contract, by an individual 209 not related by consanguinity or affinity to the resident, upon 210 payment of an entrance fee. 211 (8) “Controlling company” means any corporation, trust, or 212 association that directly or indirectly owns 25 percent or more 213 of: 214 (a) The voting securities of one or more providers that are 215 stock corporations; or 216 (b) The ownership interest of one or more providers that 217 are not stock corporations. 218 (9) “Corrective order” means an order issued by the office 219 which specifies corrective actions that the office determines 220 are required in accordance with this chapter or commission rule. 221 (10) “Days cash on hand” means the quotient obtained by 222 dividing the value of paragraph (a) by the value of paragraph 223 (b). 224 (a) The sum of unrestricted cash, unrestricted short-term 225 and long-term investments, provider restricted funds, and the 226 minimum liquid reserve as of the reporting date. 227 (b) Operating expenses less depreciation, amortization, and 228 other noncash expenses and nonoperating losses divided by 365. 229 Operating expenses, depreciation, amortization, and other 230 noncash expenses and nonoperating losses are each the sum of 231 their respective values over the 12-month period ending on the 232 reporting date. 233 234 With prior written approval of the office, a demand note or 235 other parental guarantee may be considered a short-term or long 236 term investment for the purposes of paragraph (a). However, the 237 total of all demand notes issued by the parent may not, at any 238 time, be more than the sum of unrestricted cash and unrestricted 239 short-term and long-term investments held by the parent. 240 (11) “Debt service coverage ratio” means the quotient 241 obtained by dividing the value of paragraph (a) by the value of 242 paragraph (b). 243 (a) The sum of total expenses less interest expense on the 244 debt facility, depreciation, amortization, and other noncash 245 expense and nonoperating losses, subtracted from the sum of 246 total revenues, excluding noncash revenues and nonoperating 247 gains, and gross entrance fees received less earned entrance 248 fees and refunds paid. Expenses, interest expense on the debt 249 facility, depreciation, amortization, and other noncash expense 250 and nonoperating losses, revenues, noncash revenues, 251 nonoperating gains, gross entrance fees, earned entrance fees, 252 and refunds are each the sum of their respective values over the 253 12-month period ending on the reporting date. 254 (b) Total annual principal and interest expense due on the 255 debt facility over the 12-month period ending on the reporting 256 date. For the purposes of this paragraph, principal excludes any 257 balloon principal payment amounts, and interest expense due is 258 the sum of the interest over the 12-month period ending on the 259 reporting date. 260 (12) “Department” means the Department of Financial 261 Services. 262 (13)(5)“Entrance fee” means an initial or deferred payment 263 of a sum of money or property made as full or partial payment 264 for continuing care or continuing care at-home. An accommodation 265 fee, admission fee, member fee, or other fee of similar form and 266 application are considered to be an entrance fee. 267 (14)(6)“Facility” means a place where continuing care is 268 furnished and may include one or more physical plants on a 269 primary or contiguous site or an immediately accessible site. As 270 used in this subsection, the term “immediately accessible site” 271 means a parcel of real property separated by a reasonable 272 distance from the facility as measured along public 273 thoroughfares, and the term “primary or contiguous site” means 274 the real property contemplated in the feasibility study required 275 by this chapter. 276(7)“Generally accepted accounting principles” means those277accounting principles and practices adopted by the Financial278Accounting Standards Board and the American Institute of279Certified Public Accountants, including Statement of Position28090-8 with respect to any full year to which the statement281applies.282 (15) “Impaired” or “impairment” means that either of the 283 following has occurred: 284 (a) A provider has failed to maintain its minimum liquid 285 reserve as required under s. 651.035, unless the provider has 286 received prior written approval from the office for a withdrawal 287 pursuant to s. 651.035(6) and is compliant with the approved 288 payment schedule. 289 (b) Beginning January 1, 2021: 290 1. For a provider with mortgage financing from a third 291 party lender or a public bond issue, the provider’s debt service 292 coverage ratio is less than 1.00:1 and the provider’s days cash 293 on hand is less than 90; or 294 2. For a provider without mortgage financing from a third 295 party lender or public bond issue, the provider’s days cash on 296 hand is less than 90. 297 298 If the provider is a member of an obligated group having cross 299 collateralized debt, the obligated group’s debt service coverage 300 ratio and days cash on hand must be used to determine if the 301 provider is impaired. 302 (16)(8)“Insolvency” means the condition in which athe303 provider is unable to pay its obligations as they come due in 304 the normal course of business. 305 (17)(9)“Licensed” means that atheprovider has obtained a 306 certificate of authority from the officedepartment. 307 (18) “Manager,” “management,” or “management company” means 308 a person who administers the day-to-day business operations of a 309 facility for a provider, subject to the policies, directives, 310 and oversight of the provider. 311 (19)(10)“Nursing care” means those services or acts 312 rendered to a resident by an individual licensed or certified 313 pursuant to chapter 464. 314 (20) “Obligated group” means one or more entities that 315 jointly agree to be bound by a financing structure containing 316 security provisions and covenants applicable to the group. For 317 the purposes of this subsection, debt issued under such a 318 financing structure must be a joint and several obligation of 319 each member of the group. 320 (21) “Occupancy” means the total number of occupied 321 independent living units, assisted living units, and skilled 322 nursing beds in a facility divided by the total number of units 323 and beds in that facility, excluding units and beds that are 324 unavailable to market or that are reserved by prospective 325 residents. 326 (22)(11)“Personal services” has the same meaning as in s. 327 429.02. 328 (23)(12)“Provider” means the owner or operator, whether a 329 natural person, partnership or other unincorporated association, 330 however organized, trust, or corporation, of an institution, 331 building, residence, or other place, whether operated for profit 332 or not, which owner or operator provides continuing care or 333 continuing care at-home for a fixed or variable fee, or for any 334 other remuneration of any type, whether fixed or variable, for 335 the period of care, payable in a lump sum or lump sum and 336 monthly maintenance charges or in installments. The term does 337 not apply to an entity that has existed and continuously 338 operated a facility located on at least 63 acres in this state 339 providing residential lodging to members and their spouses for 340 at least 66 years on or before July 1, 1989, and has the 341 residential capacity of 500 persons, is directly or indirectly 342 owned or operated by a nationally recognized fraternal 343 organization, is not open to the public, and accepts only its 344 members and their spouses as residents. 345 (24)(13)“Records” means all documents, correspondence, and 346the permanentfinancial, directory, and personnel information 347 and data maintained by a provider pursuant to this chapter, 348 regardless of the physical form, characteristics, or means of 349 transmission. 350 (25) “Regulatory action level event” means that any two of 351 the following have occurred: 352 (a) The provider’s debt service coverage ratio is less than 353 the greater of the minimum ratio specified in the provider’s 354 bond covenants or lending agreement for long-term financing or 355 1.20:1 as of the most recent annual report filed with the office 356 pursuant to s. 651.026, or, if the provider does not have a debt 357 service coverage ratio required by its lending institution, the 358 provider’s debt service coverage ratio is less than 1.20:1 as of 359 the most recent annual report filed with the office pursuant to 360 s. 651.026. If the provider is a member of an obligated group 361 having cross-collateralized debt, the obligated group’s debt 362 service coverage ratio must be used as the provider’s debt 363 service coverage ratio. 364 (b) The provider’s days cash on hand is less than the 365 greater of the minimum number of days cash on hand specified in 366 the provider’s bond covenants or lending agreement for long-term 367 financing or 100 days. If the provider does not have a days cash 368 on hand required by its lending institution, the days cash on 369 hand may not be less than 100 as of the most recent annual 370 report filed with the office pursuant to s. 651.026. If the 371 provider is a member of an obligated group having cross 372 collateralized debt, the days cash on hand of the obligated 373 group must be used as the provider’s days cash on hand. 374 (c) The occupancy of the provider’s facility is less than 375 80 percent averaged over the 12-month period immediately 376 preceding the annual report filed with the office pursuant to s. 377 651.026. 378 (26)(14)“Resident” means a purchaser of, a nominee of, or 379 a subscriber to a continuing care or continuing care at-home 380 contract. Such contract does not give the resident a part 381 ownership of the facility in which the resident is to reside, 382 unless expressly provided in the contract. 383 (27)(15)“Shelter” means an independent living unit, room, 384 apartment, cottage, villa, personal care unit, nursing bed, or 385 other living area within a facility set aside for the exclusive 386 use of one or more identified residents. 387 Section 2. Section 651.012, Florida Statutes, is amended to 388 read: 389 651.012 Exempted facility; written disclosure of 390 exemption.—Any facility exempted under ss. 632.637(1)(e) and 391 651.011(23)651.011(12)must provide written disclosure of such 392 exemption to each person admitted to the facilityafter October3931, 1996. This disclosure must be written using language likely 394 to be understood by the person and must briefly explain the 395 exemption. 396 Section 3. Subsection (2) of section 651.013, Florida 397 Statutes, is amended to read: 398 651.013 Chapter exclusive; applicability of other laws.— 399 (2) In addition to other applicable provisions cited in 400 this chapter, the office has the authority granted under ss. 401 624.302,and624.303, 624.307-624.312, 624.318624.308-624.312, 402 624.319(1)-(3), 624.320, 624.321624.320-624.321, 624.324,and403 624.34, and 624.422 of the Florida Insurance Code to regulate 404 providers of continuing care and continuing care at-home. 405 Section 4. Section 651.019, Florida Statutes, is amended to 406 read: 407 651.019 New financing, additional financing, or 408 refinancing.— 409 (1)(a) A provider shall provide a written general outline 410 of the amount and the anticipated terms of any new financing or 411 refinancing, and the intended use of proceeds, to the residents’ 412 council at least 30 days before the closing date of the 413 financing or refinancing transaction. If there is a material 414 change in the noticed information, a provider shall provide an 415 updated notice to the residents’ council within 10 business days 416 after the provider becomes aware of such change. 417 (b) If the facility does not have a residents’ council, the 418 facility must make available, in the same manner as other 419 community notices, the information required under paragraph (a) 420After issuance of a certificate of authority, the provider shall421submit to the office a general outline, including intended use422of proceeds, with respect to any new financing, additional423financing, or refinancing at least 30 days before the closing424date of such financing transaction. 425 (2) Within 30 days after the closing date of such financing 426 or refinancing transaction,The provider shall furnish any427information the office may reasonably request in connection with428any new financing, additional financing, or refinancing,429including, but not limited to, the financing agreements and any430related documents, escrow or trust agreements, and statistical431or financial data.the provider shallalsosubmit to the office 432 copies of executed financing documents, escrow or trust 433 agreements prepared in support of such financing or refinancing 434 transaction, and a copy of all documents required to be 435 submitted to the residents’ council under paragraph (1)(a) 436within 30 days after the closing date. 437 Section 5. Section 651.021, Florida Statutes, is amended to 438 read: 439 651.021 Certificate of authority required.— 440(1)ANoperson may not engage in the business of providing 441 continuing care, issuing contracts for continuing care or 442 continuing care at-home, or constructing a facility for the 443 purpose of providing continuing care in this state without a 444 certificate of authority obtained from the office as provided in 445 this chapter. This sectionsubsectiondoes not prohibit the 446 preparation of a construction site or construction of a model 447 residence unit for marketing purposes, or both. The office may 448 allow the purchase of an existing building for the purpose of 449 providing continuing care if the office determines that the 450 purchase is not being made to circumvent the prohibitions in 451 this section. 452(2)Written approval must be obtained from the office453before commencing construction or marketing for an expansion of454a certificated facility equivalent to the addition of at least45520 percent of existing units or 20 percent or more in the number456of continuing care at-home contracts. This provision does not457apply to construction for which a certificate of need from the458Agency for Health Care Administration is required.459(a)For providers that offer both continuing care and460continuing care at-home, the 20 percent is based on the total of461both existing units and existing contracts for continuing care462at-home. For purposes of this subsection, an expansion includes463increases in the number of constructed units or continuing care464at-home contracts or a combination of both.465(b)The application for such approval shall be on forms466adopted by the commission and provided by the office. The467application must include the feasibility study required by s.468651.022(3) or s. 651.023(1)(b) and such other information as469required by s. 651.023. If the expansion is only for continuing470care at-home contracts, an actuarial study prepared by an471independent actuary in accordance with standards adopted by the472American Academy of Actuaries which presents the financial473impact of the expansion may be substituted for the feasibility474study.475(c)In determining whether an expansion should be approved,476the office shall use the criteria provided in ss. 651.022(6) and477651.023(4).478 Section 6. Section 651.0215, Florida Statutes, is created 479 to read: 480 651.0215 Consolidated application for a provisional 481 certificate of authority and a certificate of authority; 482 required restrictions on use of entrance fees.— 483 (1) For an applicant to qualify for a certificate of 484 authority without first obtaining a provisional certificate of 485 authority, all of the following conditions must be met: 486 (a) All reservation deposits and entrance fees must be 487 placed in escrow in accordance with s. 651.033. The applicant 488 may not use or pledge any part of an initial entrance fee for 489 the construction or purchase of the facility or as security for 490 long-term financing. 491 (b) The reservation deposit may not exceed the lesser of 492 $40,000 or 10 percent of the then-current fee for the unit 493 selected by a resident and must be refundable at any time before 494 the resident takes occupancy of the selected unit. 495 (c) The resident contract must state that collection of the 496 balance of the entrance fee is to occur after the resident is 497 notified that his or her selected unit is available for 498 occupancy and on or before the occupancy date. 499 (2) The consolidated application must be on a form 500 prescribed by the commission and must contain all of the 501 following information: 502 (a) All of the information required under s. 651.022(2). 503 (b) A feasibility study prepared by an independent 504 consultant which contains all of the information required by s. 505 651.022(3) and financial forecasts or projections prepared in 506 accordance with standards adopted by the American Institute of 507 Certified Public Accountants or in accordance with standards for 508 feasibility studies for continuing care retirement communities 509 adopted by the Actuarial Standards Board. 510 1. The feasibility study must take into account project 511 costs, actual marketing results to date and marketing 512 projections, resident fees and charges, competition, resident 513 contract provisions, and other factors that affect the 514 feasibility of operating the facility. 515 2. If the feasibility study is prepared by an independent 516 certified public accountant, it must contain an examination 517 report, or a compilation report acceptable to the office, 518 containing a financial forecast or projections for the first 5 519 years of operations which take into account an actuary’s 520 mortality and morbidity assumptions as the study relates to 521 turnover, rates, fees, and charges. If the study is prepared by 522 an independent consulting actuary, it must contain mortality and 523 morbidity assumptions as it relates to turnover, rates, fees, 524 and charges and an actuary’s signed opinion that the project as 525 proposed is feasible and that the study has been prepared in 526 accordance with Actuarial Standards of Practice No. 3 for 527 Continuing Care Retirement Communities, Revised Edition, 528 effective May 1, 2011. 529 (c) Documents evidencing that commitments have been secured 530 for construction financing and long-term financing or that a 531 documented plan acceptable to the office has been adopted by the 532 applicant for long-term financing. 533 (d) Documents evidencing that all conditions of the lender 534 have been satisfied to activate the commitment to disburse 535 funds, other than the obtaining of the certificate of authority, 536 the completion of construction, or the closing of the purchase 537 of realty or buildings for the facility. 538 (e) Documents evidencing that the aggregate amount of 539 entrance fees received by or pledged to the applicant, plus 540 anticipated proceeds from any long-term financing commitment and 541 funds from all other sources in the actual possession of the 542 applicant, equal at least 100 percent of the aggregate cost of 543 constructing or purchasing, equipping, and furnishing the 544 facility plus 100 percent of the anticipated startup losses of 545 the facility. 546 (f) A complete audited financial report of the applicant, 547 prepared by an independent certified public accountant in 548 accordance with generally accepted accounting principles, as of 549 the date the applicant commenced business operations or for the 550 fiscal year that ended immediately preceding the date of 551 application, whichever is later; and complete unaudited 552 quarterly financial statements attested to by the applicant 553 after the date of the last audit. 554 (g) Documents evidencing that the applicant will be able to 555 comply with s. 651.035. 556 (h) Such other reasonable data, financial statements, and 557 pertinent information as the commission or office may require 558 with respect to the applicant or the facility to determine the 559 financial status of the facility and the management capabilities 560 of its managers and owners. 561 562 If any material change occurs in the facts set forth in an 563 application filed with the office pursuant to this subsection, 564 an amendment setting forth such change must be filed with the 565 office within 10 business days after the applicant becomes aware 566 of such change, and a copy of the amendment must be sent by 567 registered mail to the principal office of the facility and to 568 the principal office of the controlling company. 569 (3) If an applicant has or proposes to have more than one 570 facility offering continuing care or continuing care at-home, a 571 separate certificate of authority must be obtained for each 572 facility. 573 (4) Within 45 days after receipt of the information 574 required under subsection (2), the office shall examine the 575 information and notify the applicant in writing, specifically 576 requesting any additional information that the office is 577 authorized to require. An application is deemed complete when 578 the office receives all requested information and the applicant 579 corrects any error or omission of which the applicant was timely 580 notified or when the time for such notification has expired. 581 Within 15 days after receipt of all of the requested additional 582 information, the office shall notify the applicant in writing 583 that all of the requested information has been received and that 584 the application is deemed complete as of the date of the notice. 585 Failure to notify the applicant in writing within the 15-day 586 period constitutes acknowledgment by the office that it has 587 received all requested additional information, and the 588 application is deemed complete for purposes of review on the 589 date the applicant files all of the required additional 590 information. 591 (5) Within 45 days after an application is deemed complete 592 as set forth in subsection (4) and upon completion of the 593 remaining requirements of this section, the office shall 594 complete its review and issue or deny a certificate of authority 595 to the applicant. If a certificate of authority is denied, the 596 office shall notify the applicant in writing, citing the 597 specific failures to satisfy this chapter, and the applicant is 598 entitled to an administrative hearing pursuant to chapter 120. 599 (6) The office shall issue a certificate of authority upon 600 determining that the applicant meets all of the requirements of 601 law and has submitted all of the information required under this 602 section, that all escrow requirements have been satisfied, and 603 that the fees prescribed in s. 651.015(2) have been paid. 604 (7) The issuance of a certificate of authority entitles the 605 applicant to begin construction and collect reservation deposits 606 and entrance fees from prospective residents. The reservation 607 contract must state the cancellation policy and the terms of the 608 continuing care contract. All or any part of an entrance fee or 609 reservation deposit collected must be placed in an escrow 610 account or on deposit with the department pursuant to s. 611 651.033. 612 (8) The provider is entitled to secure release of the 613 moneys held in escrow within 7 days after the office receives an 614 affidavit from the provider, along with appropriate 615 documentation to verify, and notification is provided to the 616 escrow agent by certified mail, that all of the following 617 conditions have been satisfied: 618 (a) A certificate of occupancy has been issued. 619 (b) Payment in full has been received for at least 70 620 percent of the total units of a phase or of the total of the 621 combined phases constructed. If a provider offering continuing 622 care at-home is applying for a release of escrowed entrance 623 fees, the same minimum requirement must be met for the 624 continuing care contracts and for the continuing care at-home 625 contracts independently of each other. 626 (c) The provider has evidence of sufficient funds to meet 627 the requirements of s. 651.035, which may include funds 628 deposited in the initial entrance fee account. 629 (d) Documents evidencing the intended application of the 630 proceeds upon release and documents evidencing that the entrance 631 fees, when released, will be applied as represented to the 632 office. 633 634 Notwithstanding chapter 120, only the provider, the escrow 635 agent, and the office have a substantial interest in any office 636 decision regarding release of escrow funds in any proceedings 637 under chapter 120 or this chapter. 638 (9) The office may not approve any application that 639 includes in the plan of financing any encumbrance of the 640 operating reserves or renewal and replacement reserves required 641 by this chapter. 642 (10) The office may not issue a certificate of authority 643 for a facility that does not have a component that is to be 644 licensed pursuant to part II of chapter 400 or part I of chapter 645 429, or that does not offer personal services or nursing 646 services through written contractual agreement. A written 647 contractual agreement must be disclosed in the contract for 648 continuing care or continuing care at-home and is subject to s. 649 651.1151. 650 Section 7. Subsections (2), (3), (6), and (8) of section 651 651.022, Florida Statutes, are amended, and subsection (5) of 652 that section is republished, to read: 653 651.022 Provisional certificate of authority; application.— 654 (2) The application for a provisional certificate of 655 authority mustshallbe on a form prescribed by the commission 656 and mustshallcontain the following information: 657 (a) If the applicant or provider is a corporation, a copy 658 of the articles of incorporation and bylaws; if the applicant or 659 provider is a partnership or other unincorporated association, a 660 copy of the partnership agreement, articles of association, or 661 other membership agreement; and, if the applicant or provider is 662 a trust, a copy of the trust agreement or instrument. 663 (b) The full names, residences, and business addresses of: 664 1. The proprietor, if the applicant or provider is an 665 individual. 666 2. Every partner or member, if the applicant or provider is 667 a partnership or other unincorporated association, however 668 organized, having fewer than 50 partners or members, together 669 with the business name and address of the partnership or other 670 organization. 671 3. The principal partners or members, if the applicant or 672 provider is a partnership or other unincorporated association, 673 however organized, having 50 or more partners or members, 674 together with the business name and business address of the 675 partnership or other organization. If such unincorporated 676 organization has officers and a board of directors, the full 677 name and business address of each officer and director may be 678 set forth in lieu of the full name and business address of its 679 principal members. 680 4. The corporation and each officer and director thereof, 681 if the applicant or provider is a corporation. 682 5. Every trustee and officer, if the applicant or provider 683 is a trust. 684 6. The manager, whether an individual, corporation, 685 partnership, or association. 686 7. Any stockholder holding at least a 10 percent interest 687 in the operations of the facility in which the care is to be 688 offered. 689 8. Any person whose name is required to be provided in the 690 application under this paragraph and who owns any interest in or 691 receives any remuneration from, directly or indirectly, any 692 professional service firm, association, trust, partnership, or 693 corporation providing goods, leases, or services to the facility 694 for which the application is made, with a real or anticipated 695 value of $10,000 or more, and the name and address of the 696 professional service firm, association, trust, partnership, or 697 corporation in which such interest is held. The applicant shall 698 describe such goods, leases, or services and the probable cost 699 to the facility or provider and shall describe why such goods, 700 leases, or services should not be purchased from an independent 701 entity. 702 9. Any person, corporation, partnership, association, or 703 trust owning land or property leased to the facility, along with 704 a copy of the lease agreement. 705 10. Any affiliated parent or subsidiary corporation or 706 partnership. 707 (c)1. Evidence that the applicant is reputable and of 708 responsible character. If the applicant is a firm, association, 709 organization, partnership, business trust, corporation, or 710 company, the form mustshallrequire evidence that the members 711 or shareholdersare reputable and of responsible character,and 712 the person in charge of providing care under a certificate of 713 authority areshall likewise be required to produce evidence of714beingreputable and of responsible character. 715 2. Evidence satisfactory to the office of the ability of 716 the applicant to comply withthe provisions ofthis chapter and 717 with rules adopted by the commission pursuant to this chapter. 718 3. A statement of whether a person identified in the 719 application for a provisional certificate of authority or the 720 administrator or manager of the facility, if such person has 721 been designated, or any such person living in the same location: 722 a. Has been convicted of a felony or has pleaded nolo 723 contendere to a felony charge, or has been held liable or has 724 been enjoined in a civil action by final judgment, if the felony 725 or civil action involved fraud, embezzlement, fraudulent 726 conversion, or misappropriation of property. 727 b. Is subject to a currently effective injunctive or 728 restrictive order or federal or state administrative order 729 relating to business activity or health care as a result of an 730 action brought by a public agency or department, including, 731 without limitation, an action affecting a license under chapter 732 400 or chapter 429. 733 734 The statement mustshallset forth the court or agency, the date 735 of conviction or judgment, and the penalty imposed or damages 736 assessed, or the date, nature, and issuer of the order. Before 737 determining whether a provisional certificate of authority is to 738 be issued, the office may make an inquiry to determine the 739 accuracy of the information submitted pursuant to subparagraphs 740 1., 2., and 3.1. and 2.741 (d) The contracts for continuing care and continuing care 742 at-home to be entered into between the provider and residents 743 which meet the minimum requirements of s. 651.055 or s. 651.057 744 and which include a statement describing the procedures required 745 by law relating to the release of escrowed entrance fees. Such 746 statement may be furnished through an addendum. 747 (e) Any advertisement or other written material proposed to 748 be used in the solicitation of residents. 749 (f) Such other reasonable data, financial statements, and 750 pertinent information as the commission or office may reasonably 751 require with respect to the provider or the facility, including 752 the most recent audited financial reportstatementsof 753 comparable facilities currently or previously owned, managed, or 754 developed by the applicant or its principal, to assist in 755 determining the financial viability of the project and the 756 management capabilities of its managers and owners. 757 (g) The forms of the residency contracts, reservation 758 contracts, escrow agreements, and wait list contracts, if 759 applicable, which are proposed to be used by the provider in the 760 furnishing of care. The office shall approve contracts and 761 escrow agreements that comply with ss. 651.023(1)(c), 651.033, 762 651.055, and 651.057. Thereafter, no other form of contract or 763 agreement may be used by the provider until it has been 764 submitted to the office and approved. 765 766 If any material change occurs in the facts set forth in an 767 application filed with the office pursuant to this subsection, 768 an amendment setting forth such change must be filed with the 769 office within 10 business days after the applicant becomes aware 770 of such change, and a copy of the amendment must be sent by 771 registered mail to the principal office of the facility and to 772 the principal office of the controlling company. 773 (3) In addition to the information required in subsection 774 (2), an applicant for a provisional certificate of authority 775 shall submit amarketfeasibility study with appropriate 776 financial, marketing, and actuarial assumptions for the first 5 777 years of operations. Themarketfeasibility study mustshall778 include at least the following information: 779 (a) A description of the proposed facility, including the 780 location, size, anticipated completion date, and the proposed 781 construction program. 782 (b) An identification and evaluation of the primary and, if 783 appropriate, the secondary market areas of the facility and the 784 projected unit sales per month. 785 (c) Projected revenues, including anticipated entrance 786 fees; monthly service fees; nursing care revenuesrates, if 787 applicable; and all other sources of revenue, including the788total amount of debt financing required. 789 (d) Projected expenses, including staffing requirements and 790 salaries; cost of property, plant, and equipment, including 791 depreciation expense; interest expense; marketing expense; and 792 other operating expenses. 793 (e) A projected balance sheetCurrent assets and794liabilities of the applicant. 795 (f) Expectations of the financial condition of the project, 796 including the projected cash flow, anda projected balance sheet797andan estimate of the funds anticipated to be necessary to 798 cover startup losses. 799 (g) The inflation factor, if any, assumed in the 800 feasibility study for the proposed facility and how and where it 801 is applied. 802 (h) Project costs and the total amount of debt financing 803 required, marketing projections, resident fees and charges, the 804 competition, resident contract provisions, and other factors 805 thatwhichaffect the feasibility of the facility. 806 (i) Appropriate population projections, including morbidity 807 and mortality assumptions. 808 (j) The name of the person who prepared the feasibility 809 study and the experience of such person in preparing similar 810 studies or otherwise consulting in the field of continuing care. 811 The preparer of the feasibility study may be the provider or a 812 contracted third party. 813 (k) Any other information that the applicant deems relevant 814 and appropriate to enable the office to make a more informed 815 determination. 816 (5)(a) Within 30 days after receipt of an application for a 817 provisional certificate of authority, the office shall examine 818 the application and shall notify the applicant in writing, 819 specifically setting forth and specifically requesting any 820 additional information the office is permitted by law to 821 require. If the application submitted is determined by the 822 office to be substantially incomplete so as to require 823 substantial additional information, including biographical 824 information, the office may return the application to the 825 applicant with a written notice that the application as received 826 is substantially incomplete and, therefore, unacceptable for 827 filing without further action required by the office. Any filing 828 fee received shall be refunded to the applicant. 829 (b) Within 15 days after receipt of all of the requested 830 additional information, the office shall notify the applicant in 831 writing that all of the requested information has been received 832 and the application is deemed to be complete as of the date of 833 the notice. Failure to so notify the applicant in writing within 834 the 15-day period shall constitute acknowledgment by the office 835 that it has received all requested additional information, and 836 the application shall be deemed to be complete for purposes of 837 review upon the date of the filing of all of the requested 838 additional information. 839 (6) Within 45 days after the date an application is deemed 840 complete as set forth in paragraph (5)(b), the office shall 841 complete its review and issue a provisional certificate of 842 authority to the applicant based upon its review and a 843 determination that the application meets all requirements of 844 law, that the feasibility study was based on sufficient data and 845 reasonable assumptions, and that the applicant will be able to 846 provide continuing care or continuing care at-home as proposed 847 and meet all financial and contractual obligations related to 848 its operations, including the financial requirements of this 849 chapter. If the application is denied, the office shall notify 850 the applicant in writing, citing the specific failures to meet 851 the provisions of this chapter. Such denial entitles the 852 applicant to a hearing pursuant to chapter 120. 853 (8) The office mayshallnot approve any application that 854whichincludes in the plan of financing any encumbrance of the 855 operating reserves or renewal and replacement reserves required 856 by this chapter. 857 Section 8. Subsection (1) and subsections (4) through (9) 858 of section 651.023, Florida Statutes, are amended, and 859 subsection (2) of that section is republished, to read: 860 651.023 Certificate of authority; application.— 861 (1) After issuance of a provisional certificate of 862 authority, the office shall issue to the holder of such 863 provisional certificate a certificate of authority if the holder 864 of the provisional certificate provides the office with the 865 following information: 866 (a) Any material change in status with respect to the 867 information required to be filed under s. 651.022(2) in the 868 application for the provisional certificate. 869 (b) A feasibility study prepared by an independent 870 consultant which contains all of the information required by s. 871 651.022(3) and financial forecasts or projections prepared in 872 accordance with standards adopted by the American Institute of 873 Certified Public Accountants or in accordance with standards for 874 feasibility studies or continuing care retirement communities 875 adopted by the Actuarial Standards Board. 8761.The study must also contain an independent evaluation877and examination opinion, or a comparable opinion acceptable to878the office, by the consultant who prepared the study, of the879underlying assumptions used as a basis for the forecasts or880projections in the study and that the assumptions are reasonable881and proper and the project as proposed is feasible.882 1.2.The study must take into account project costs, actual 883 marketing results to date and marketing projections, resident 884 fees and charges, competition, resident contract provisions, and 885 any other factors which affect the feasibility of operating the 886 facility. 887 2.3.If the study is prepared by an independent certified 888 public accountant, it must contain an examination opinion or a 889 compilation report acceptable to the office containing a 890 financial forecast or projections for the first 53years of 891 operations which take into account an actuary’s mortality and 892 morbidity assumptions as the study relates to turnover, rates, 893 fees, and chargesand financial projections having a compilation894opinion for the next 3 years. If the study is prepared by an 895 independent consulting actuary, it must contain mortality and 896 morbidity assumptions as the study relates to turnover, rates, 897 fees, and chargesdataand an actuary’s signed opinion that the 898 project as proposed is feasible and that the study has been 899 prepared in accordance with standards adopted by the American 900 Academy of Actuaries. 901 (c) Subject to subsection (4), a provider may submit an 902 application for a certificate of authority and any required 903 exhibits upon submission of documents evidencingproofthat the 904 project has a minimum of 30 percent of the units reserved for 905 which the provider is charging an entrance fee.This does not906apply to an application for a certificate of authority for the907acquisition of a facility for which a certificate of authority908was issued before October 1, 1983, to a provider who909subsequently becomes a debtor in a case under the United States910Bankruptcy Code, 11 U.S.C. ss. 101 et seq., or to a provider for911which the department has been appointed receiver pursuant to912part II of chapter 631.913 (d) Documents evidencingProofthat commitments have been 914 secured for both construction financing and long-term financing 915 or a documented plan acceptable to the office has been adopted 916 by the applicant for long-term financing. 917 (e) Documents evidencingProofthat all conditions of the 918 lender have been satisfied to activate the commitment to 919 disburse funds other than the obtaining of the certificate of 920 authority, the completion of construction, or the closing of the 921 purchase of realty or buildings for the facility. 922 (f) Documents evidencingProofthat the aggregate amount of 923 entrance fees received by or pledged to the applicant, plus 924 anticipated proceeds from any long-term financing commitment, 925 plus funds from all other sources in the actual possession of 926 the applicant, equal at least 100 percent of the aggregate cost 927 of constructing or purchasing, equipping, and furnishing the 928 facility plus 100 percent of the anticipated startup losses of 929 the facility. 930 (g) A complete audited financial reportstatementsof the 931 applicant, prepared by an independent certified public 932 accountant in accordance with generally accepted accounting 933 principles, as of the date the applicant commenced business 934 operations or for the fiscal year that ended immediately 935 preceding the date of application, whichever is later, and 936 complete unaudited quarterly financial statements attested to by 937 the applicant after the date of the last audit. 938 (h) Documents evidencingProofthat the applicant has 939 complied with the escrow requirements of subsection (5) or 940 subsection (7) and will be able to comply with s. 651.035. 941 (i) Such other reasonable data, financial statements, and 942 pertinent information as the commission or office may require 943 with respect to the applicant or the facility, to determine the 944 financial status of the facility and the management capabilities 945 of its managers and owners. 946 947 If any material change occurs in the facts set forth in an 948 application filed with the office pursuant to this subsection, 949 an amendment setting forth such change must be filed with the 950 office within 10 business days after the applicant becomes aware 951 of such change, and a copy of the amendment must be sent by 952 registered mail to the principal office of the facility and to 953 the principal office of the controlling company. 954 (2) Within 30 days after receipt of the information 955 required under subsection (1), the office shall examine such 956 information and notify the provider in writing, specifically 957 requesting any additional information the office is permitted by 958 law to require. Within 15 days after receipt of all of the 959 requested additional information, the office shall notify the 960 provider in writing that all of the requested information has 961 been received and the application is deemed to be complete as of 962 the date of the notice. Failure to notify the applicant in 963 writing within the 15-day period constitutes acknowledgment by 964 the office that it has received all requested additional 965 information, and the application shall be deemed complete for 966 purposes of review on the date of filing all of the required 967 additional information. 968 (4) The office shall issue a certificate of authority upon 969 determining that the applicant meets all requirements of law and 970 has submitted all of the information required by this section, 971 that all escrow requirements have been satisfied, and that the 972 fees prescribed in s. 651.015(2) have been paid. 973 (a) ANotwithstanding satisfaction of the 30-percent974minimum reservation requirement of paragraph (1)(c), no975 certificate of authority may notshallbe issued until 976 documentation evidencing that the project has a minimum of 50 977 percent of the units reserved for which the provider is charging 978 an entrance fee, and proofis provided to the office. If a 979 provider offering continuing care at-home is applying for a 980 certificate of authorityor approval of an expansion pursuant to981s. 651.021(2), the same minimum reservation requirements must be 982 met for the continuing care and continuing care at-home 983 contracts, independently of each other. 984 (b) In order for a unit to be considered reserved under 985 this section, the provider must collect a minimum deposit of the 986 lesser of $40,000 or 10 percent of the then-current entrance fee 987 for that unit, and may assess a forfeiture penalty of 2 percent 988 of the entrance fee due to termination of the reservation 989 contract after 30 days for any reason other than the death or 990 serious illness of the resident, the failure of the provider to 991 meet its obligations under the reservation contract, or other 992 circumstances beyond the control of the resident that equitably 993 entitle the resident to a refund of the resident’s deposit. The 994 reservation contract must state the cancellation policy and the 995 terms of the continuing care or continuing care at-home contract 996 to be entered into. 997 (5) Up to 25 percent of the moneys paid for all or any part 998 of an initial entrance fee may be included or pledged for the 999 construction or purchase of the facility or as security for 1000 long-term financing. As used in this section, the term “initial 1001 entrance fee” means the total entrance fee charged by the 1002 facility to the first occupant of a unit. 1003(a)A minimum of 75 percent of the moneys paid for all or 1004 any part of an initial entrance fee collected for continuing 1005 care or continuing care at-home mustshallbe placed in an 1006 escrow account or on deposit with the department as prescribed 1007 in s. 651.033. 1008(b)For an expansion as provided in s. 651.021(2), a1009minimum of 75 percent of the moneys paid for all or any part of1010an initial entrance fee collected for continuing care and 501011percent of the moneys paid for all or any part of an initial fee1012collected for continuing care at-home shall be placed in an1013escrow account or on deposit with the department as prescribed1014in s. 651.033.1015 (6) The provider is entitled to secure release of the 1016 moneys held in escrow within 7 days after receipt by the office 1017 of an affidavit from the provider, along with appropriate copies 1018 to verify, and notification to the escrow agent by certified 1019 mail, that the following conditions have been satisfied: 1020 (a) A certificate of occupancy has been issued. 1021 (b) Payment in full has been received for at least 70 1022 percent of the total units of a phase or of the total of the 1023 combined phases constructed. If a provider offering continuing 1024 care at-home is applying for a release of escrowed entrance 1025 fees, the same minimum requirement must be met for the 1026 continuing care and continuing care at-home contracts, 1027 independently of each other. 1028(c)The consultant who prepared the feasibility study1029required by this section or a substitute approved by the office1030certifies within 12 months before the date of filing for office1031approval that there has been no material adverse change in1032status with regard to the feasibility study. If a material1033adverse change exists at the time of submission, sufficient1034information acceptable to the office and the feasibility1035consultant must be submitted which remedies the adverse1036condition.1037 (c)(d)Documents evidencingProofthat commitments have 1038 been secured or a documented plan adopted by the applicant has 1039 been approved by the office for long-term financing. 1040 (d)(e)Documents evidencingProofthat the provider has 1041 sufficient funds to meet the requirements of s. 651.035, which 1042 may include funds deposited in the initial entrance fee account. 1043 (e)(f)Documents evidencingProof as tothe intended 1044 application of the proceeds upon release and documentationproof1045 that the entrance fees when released will be applied as 1046 represented to the office. 1047 (f) If any material change occurred in the facts set forth 1048 in the application filed with the office pursuant to subsection 1049 (1), the applicant timely filed the amendment setting forth such 1050 change with the office and sent copies of the amendment to the 1051 principal office of the facility and to the principal office of 1052 the controlling company as required under that subsection. 1053 1054 Notwithstanding chapter 120, no person, other than the provider, 1055 the escrow agent, and the office, may have a substantial 1056 interest in any office decision regarding release of escrow 1057 funds in any proceedings under chapter 120 or this chapter 1058 regarding release of escrow funds. 1059 (7) In lieu of the provider fulfilling the requirements in 1060 subsection (5) and paragraphs (6)(b) and (c)(d), the office may 1061 authorize the release of escrowed funds to retire all 1062 outstanding debts on the facility and equipment upon application 1063 of the provider and upon the provider’s showing that the 1064 provider will grant to the residents a first mortgage on the 1065 land, buildings, and equipment that constitute the facility, and 1066 that the provider has satisfied paragraphs (6)(a), (c),and (d) 1067(e). Such mortgage shall secure the refund of the entrance fee 1068 in the amount required by this chapter. The granting of such 1069 mortgage is subject to the following: 1070 (a) The first mortgage is granted to an independent trust 1071 that is beneficially held by the residents. The document 1072 creating the trust must include a provision that agrees to an 1073 annual audit and will furnish to the office all information the 1074 office may reasonably require. The mortgage may secure payment 1075 on bonds issued to the residents or trustee. Such bonds are 1076 redeemable after termination of the residency contract in the 1077 amount and manner required by this chapter for the refund of an 1078 entrance fee. 1079 (b) Before granting a first mortgage to the residents, all 1080 construction must be substantially completed and substantially 1081 all equipment must be purchased. No part of the entrance fees 1082 may be pledged as security for a construction loan or otherwise 1083 used for construction expenses before the completion of 1084 construction. 1085 (c) If the provider is leasing the land or buildings used 1086 by the facility, the leasehold interest must be for a term of at 1087 least 30 years. 1088 (8)The timeframes provided under s. 651.022(5) and (6)1089apply to applications submitted under s. 651.021(2).The office 1090 may not issue a certificate of authority to a facility that does 1091 not have a component that is to be licensed pursuant to part II 1092 of chapter 400 or to part I of chapter 429 or that does not 1093 offer personal services or nursing services through written 1094 contractual agreement. A written contractual agreement must be 1095 disclosed in the contract for continuing care or continuing care 1096 at-home and is subject tothe provisions ofs. 651.1151, 1097 relating to administrative, vendor, and management contracts. 1098 (9) The office may not approve an application that includes 1099 in the plan of financing any encumbrance of the operating 1100 reserves or renewal and replacement reserves required by this 1101 chapter. 1102 Section 9. Section 651.024, Florida Statutes, is amended to 1103 read: 1104 651.024 Acquisition.— 1105 (1) A person who seeks to assume the role of general 1106 partner of a provider or to otherwise assume ownership or 1107 possession of, or control over, 10 percent or more of a 1108 provider, a controlling company of the provider, or a provider’s 1109 assets, based on the balance sheet from the most recent 1110 financial audit report filed with the office, isissued a1111certificate of authority to operate a continuing care facility1112or a provisional certificate of authority shall besubject to 1113the provisions ofs. 628.4615 and is not required to make 1114 filings pursuant to s. 651.022, s. 651.023, or s. 651.0245. 1115 (2) A person who seeks to acquire and become the provider 1116 for a facility is subject to s. 651.0245 and is not required to 1117 make filings pursuant to ss. 628.4615, 651.022, and 651.023. 1118 (3) In addition to the provider or the controlling company, 1119 the office has standing to petition a circuit court under s. 1120 628.4615(9). 1121 Section 10. Section 651.0245, Florida Statutes, is created 1122 to read: 1123 651.0245 Application for the simultaneous acquisition of a 1124 facility and issuance of a certificate of authority.— 1125 (1) Except with the prior written approval of the office, a 1126 person may not, individually or in conjunction with any 1127 affiliated person of such person, directly or indirectly acquire 1128 a facility operating under a subsisting certificate of authority 1129 and engage in the business of providing continuing care. 1130 (2) An applicant seeking simultaneous acquisition of a 1131 facility and issuance of a certificate of authority must: 1132 (a) Comply with the notice requirements of s. 1133 628.4615(2)(a); and 1134 (b) File an application in the form required by the office 1135 and cooperate with the office’s review of the application. 1136 (3) The commission shall adopt by rule application 1137 requirements equivalent to those described in ss. 628.4615(4) 1138 and (5), 651.022(2), and 651.023(1)(b). The office shall review 1139 the application and issue an approval or disapproval of the 1140 filing in accordance with ss. 628.4615(6)(a) and (c), (7)-(10), 1141 and (14); and 651.023(1)(b). 1142 (4) In addition to the provider or the controlling company, 1143 the office has standing to petition a circuit court under s. 1144 628.4615(9). 1145 (5) A person may rebut a presumption of control by filing a 1146 disclaimer of control with the office on a form prescribed by 1147 the commission. The disclaimer must fully disclose all material 1148 relationships and bases for affiliation between the person and 1149 the provider or facility, as well as the basis for disclaiming 1150 the affiliation. In lieu of such form, a person or acquiring 1151 party may file with the office a copy of a Schedule 13G filed 1152 with the Securities and Exchange Commission pursuant to Rule 1153 13d-1(b) or (c), 17 C.F.R. s. 240.13d-1, under the Securities 1154 Exchange Act of 1934, as amended. After a disclaimer has been 1155 filed, the provider or facility is relieved of any duty to 1156 register or report under this section which may arise out of the 1157 provider’s or facility’s relationship with the person, unless 1158 the office disallows the disclaimer. 1159 (6) The commission may adopt rules as necessary to 1160 administer this section. 1161 Section 11. Section 651.0246, Florida Statutes, is created 1162 to read: 1163 651.0246 Expansions.— 1164 (1)(a) A provider must obtain written approval from the 1165 office before commencing construction or marketing for an 1166 expansion of a certificated facility equivalent to the addition 1167 of at least 20 percent of existing units or 20 percent or more 1168 of the number of continuing care at-home contracts. If the 1169 provider has exceeded the current statewide median for days cash 1170 on hand, debt service coverage ratio, and total facility 1171 occupancy for the most recent two consecutive annual reporting 1172 periods, the provider is automatically granted approval to 1173 expand the total number of existing units by up to 35 percent 1174 upon submitting a letter to the office indicating the total 1175 number of planned units in the expansion, the proposed sources 1176 and uses of funds, and an attestation that the provider 1177 understands and pledges to comply with all minimum liquid 1178 reserve and escrow account requirements. As used in this 1179 section, the term “existing units” means the sum of the total 1180 number of independent living units and assisted living units 1181 identified in the most recent annual report filed with the 1182 office pursuant to s. 651.026. For purposes of this section, the 1183 statewide median for days cash on hand, debt service coverage 1184 ratio, and total facility occupancy is the median calculated in 1185 the most recent annual report submitted by the office to the 1186 Continuing Care Advisory Council pursuant to s. 651.121(8). This 1187 section does not apply to construction for which a certificate 1188 of need from the Agency for Health Care Administration is 1189 required. 1190 (b) The application for the approval of an addition 1191 consisting of 20 percent or more of existing units or continuing 1192 care at-home contracts must be on forms adopted by the 1193 commission. The application must include the feasibility study 1194 required by this section and such other information as 1195 reasonably requested by the office. If the expansion is only for 1196 continuing care at-home contracts, an actuarial study prepared 1197 by an independent actuary in accordance with standards adopted 1198 by the American Academy of Actuaries which presents the 1199 financial impact of the expansion may be substituted for the 1200 feasibility study. 1201 (c) In determining whether an expansion should be approved, 1202 the office shall consider: 1203 1. Whether the application meets all requirements of law; 1204 2. Whether the feasibility study was based on sufficient 1205 data and reasonable assumptions; and 1206 3. Whether the applicant will be able to provide continuing 1207 care or continuing care at-home as proposed and meet all 1208 financial obligations related to its operations, including the 1209 financial requirements of this chapter. 1210 1211 If the application is denied, the office must notify the 1212 applicant in writing, citing the specific failures to meet the 1213 provisions of this chapter. A denial entitles the applicant to a 1214 hearing pursuant to chapter 120. 1215 (2) A provider applying for expansion of a certificated 1216 facility must submit all of the following: 1217 (a) A feasibility study prepared by an independent 1218 certified public accountant. The feasibility study must include 1219 at least the following information: 1220 1. A description of the facility and proposed expansion, 1221 including the location, the size, the anticipated completion 1222 date, and the proposed construction program. 1223 2. An identification and evaluation of the primary and, if 1224 applicable, secondary market areas of the facility and the 1225 projected unit sales per month. 1226 3. Projected revenues, including anticipated entrance fees; 1227 monthly service fees; nursing care revenues, if applicable; and 1228 all other sources of revenue. 1229 4. Projected expenses, including for staffing requirements 1230 and salaries; the cost of property, plant, and equipment, 1231 including depreciation expense; interest expense; marketing 1232 expense; and other operating expenses. 1233 5. A projected balance sheet of the applicant. 1234 6. The expectations for the financial condition of the 1235 project, including the projected cash flow and an estimate of 1236 the funds anticipated to be necessary to cover startup losses. 1237 7. The inflation factor, if any, assumed in the study for 1238 the proposed expansion and how and where it is applied. 1239 8. Project costs; the total amount of debt financing 1240 required; marketing projections; resident rates, fees, and 1241 charges; the competition; resident contract provisions; and 1242 other factors that affect the feasibility of the facility. 1243 9. Appropriate population projections, including morbidity 1244 and mortality assumptions. 1245 10. The name of the person who prepared the feasibility 1246 study and his or her experience in preparing similar studies or 1247 otherwise consulting in the field of continuing care. 1248 11. Financial forecasts or projections prepared in 1249 accordance with standards adopted by the American Institute of 1250 Certified Public Accountants or in accordance with standards for 1251 feasibility studies for continuing care retirement communities 1252 adopted by the Actuarial Standards Board. 1253 12. An independent evaluation and examination opinion for 1254 the first 5 years of operations, or a comparable opinion 1255 acceptable to the office, by the consultant who prepared the 1256 study, of the underlying assumptions used as a basis for the 1257 forecasts or projections in the study and that the assumptions 1258 are reasonable and proper and the project as proposed is 1259 feasible. 1260 13. Any other information that the provider deems relevant 1261 and appropriate to provide to enable the office to make a more 1262 informed determination. 1263 (b) Such other reasonable data, financial statements, and 1264 pertinent information as the commission or office may require 1265 with respect to the applicant or the facility to determine the 1266 financial status of the facility and the management capabilities 1267 of its managers and owners. 1268 1269 If any material change occurs in the facts set forth in an 1270 application filed with the office pursuant to this section, an 1271 amendment setting forth such change must be filed with the 1272 office within 10 business days after the applicant becomes aware 1273 of such change, and a copy of the amendment must be sent by 1274 registered mail to the principal office of the facility and to 1275 the principal office of the controlling company. 1276 (3) A minimum of 75 percent of the moneys paid for all or 1277 any part of an initial entrance fee or reservation deposit 1278 collected for units in the expansion and 50 percent of the 1279 moneys paid for all or any part of an initial fee collected for 1280 continuing care at-home contracts in the expansion must be 1281 placed in an escrow account or on deposit with the department as 1282 prescribed in s. 651.033. Up to 25 percent of the moneys paid 1283 for all or any part of an initial entrance fee or reservation 1284 deposit may be included or pledged for the construction or 1285 purchase of the facility or as security for long-term financing. 1286 As used in this section, the term “initial entrance fee” means 1287 the total entrance fee charged by the facility to the first 1288 occupant of a unit. 1289 (4) The provider is entitled to secure release of the 1290 moneys held in escrow within 7 days after receipt by the office 1291 of an affidavit from the provider, along with appropriate copies 1292 to verify, and notification to the escrow agent by certified 1293 mail that the following conditions have been satisfied: 1294 (a) A certificate of occupancy has been issued. 1295 (b) Payment in full has been received for at least 50 1296 percent of the total units of a phase or of the total of the 1297 combined phases constructed. If a provider offering continuing 1298 care at-home is applying for a release of escrowed entrance 1299 fees, the same minimum requirement must be met for the 1300 continuing care and continuing care at-home contracts 1301 independently of each other. 1302 (c) Documents evidencing that commitments have been secured 1303 or that a documented plan adopted by the applicant has been 1304 approved by the office for long-term financing. 1305 (d) Documents evidencing that the provider has sufficient 1306 funds to meet the requirements of s. 651.035, which may include 1307 funds deposited in the initial entrance fee account. 1308 (e) Documents evidencing the intended application of the 1309 proceeds upon release and documentation that the entrance fees, 1310 when released, will be applied as represented to the office. 1311 1312 Notwithstanding chapter 120, only the provider, the escrow 1313 agent, and the office have a substantial interest in any office 1314 decision regarding release of escrow funds in any proceedings 1315 under chapter 120 or this chapter. 1316 (5)(a) Within 30 days after receipt of an application for 1317 expansion, the office shall examine the application and shall 1318 notify the applicant in writing, specifically requesting any 1319 additional information that the office is authorized to require. 1320 Within 15 days after the office receives all the requested 1321 additional information, the office shall notify the applicant in 1322 writing that the requested information has been received and 1323 that the application is deemed complete as of the date of the 1324 notice. Failure to notify the applicant in writing within the 1325 15-day period constitutes acknowledgment by the office that it 1326 has received all requested additional information, and the 1327 application is deemed complete for purposes of review on the 1328 date the applicant files all of the required additional 1329 information. If the application submitted is determined by the 1330 office to be substantially incomplete so as to require 1331 substantial additional information, including biographical 1332 information, the office may return the application to the 1333 applicant with a written notice stating that the application as 1334 received is substantially incomplete and, therefore, is 1335 unacceptable for filing without further action required by the 1336 office. Any filing fee received must be refunded to the 1337 applicant. 1338 (b) An application is deemed complete upon the office 1339 receiving all requested information and the applicant correcting 1340 any error or omission of which the applicant was timely notified 1341 or when the time for such notification has expired. The office 1342 shall notify the applicant in writing of the date on which the 1343 application was deemed complete. 1344 (6) Within 45 days after the date on which an application 1345 is deemed complete as provided in paragraph (5)(b), the office 1346 shall complete its review and, based upon its review, approve an 1347 expansion by the applicant and issue a determination that the 1348 application meets all requirements of law, that the feasibility 1349 study was based on sufficient data and reasonable assumptions, 1350 and that the applicant will be able to provide continuing care 1351 or continuing care at-home as proposed and meet all financial 1352 and contractual obligations related to its operations, including 1353 the financial requirements of this chapter. If the application 1354 is denied, the office must notify the applicant in writing, 1355 citing the specific failures to meet the requirements of this 1356 chapter. The denial entitles the applicant to a hearing pursuant 1357 to chapter 120. 1358 Section 12. Paragraphs (b) and (c) of subsection (2) and 1359 subsection (3) of section 651.026, Florida Statutes, are 1360 amended, subsection (10) is added to that section, and paragraph 1361 (a) of subsection (2) of that section is republished, to read: 1362 651.026 Annual reports.— 1363 (2) The annual report shall be in such form as the 1364 commission prescribes and shall contain at least the following: 1365 (a) Any change in status with respect to the information 1366 required to be filed under s. 651.022(2). 1367 (b) A financial reportstatementsaudited by an independent 1368 certified public accountant which must contain, for two or more 1369 periods if the facility has been in existence that long, all of 1370 the following: 1371 1. An accountant’s opinion and, in accordance with 1372 generally accepted accounting principles: 1373 a. A balance sheet; 1374 b. A statement of income and expenses; 1375 c. A statement of equity or fund balances; and 1376 d. A statement of changes in cash flows. 1377 2. Notes to the financial reportstatementsconsidered 1378 customary or necessary for full disclosure or adequate 1379 understanding of the financial reportstatements, financial 1380 condition, and operation. 1381 (c) The following financial information: 1382 1. A detailed listing of the assets maintained in the 1383 liquid reserve as required under s. 651.035 and in accordance 1384 with part II of chapter 625; 1385 2. A schedule giving additional information relating to 1386 property, plant, and equipment having an original cost of at 1387 least $25,000, so as to show in reasonable detail with respect 1388 to each separate facility original costs, accumulated 1389 depreciation, net book value, appraised value or insurable value 1390 and date thereof, insurance coverage, encumbrances, and net 1391 equity of appraised or insured value over encumbrances. Any 1392 property not used in continuing care must be shown separately 1393 from property used in continuing care; 1394 3. The level of participation in Medicare or Medicaid 1395 programs, or both; 1396 4. A statement of all fees required of residents, 1397 including, but not limited to, a statement of the entrance fee 1398 charged, the monthly service charges, the proposed application 1399 of the proceeds of the entrance fee by the provider, and the 1400 plan by which the amount of the entrance fee is determined if 1401 the entrance fee is not the same in all cases;and1402 5. Any change or increase in fees if the provider changes 1403 the scope of, or the rates for, care or services, regardless of 1404 whether the change involves the basic rate or only those 1405 services available at additional costs to the resident;.1406 6. If the provider has more than one certificated facility, 1407 or has operations that are not licensed under this chapter, it 1408 shall submit a balance sheet, statement of income and expenses, 1409 statement of equity or fund balances, and statement of cash 1410 flows for each facility licensed under this chapter as 1411 supplemental information to the audited financial report 1412statementsrequired under paragraph (b); and.1413 7. The management’s calculation of the provider’s debt 1414 service coverage ratio, occupancy, and days cash on hand for the 1415 current reporting period. 1416 (3) The commission shall adopt by rule additional 1417meaningfulmeasures of assessing the financial viability of a 1418 provider.The rule may include the following factors:1419(a)Debt service coverage ratios.1420(b)Current ratios.1421(c)Adjusted current ratios.1422(d)Cash flows.1423(e)Occupancy rates.1424(f)Other measures, ratios, or trends.1425(g)Other factors as may be appropriate.1426 (10) By August 1 of each year, the office shall publish on 1427 its website an annual industry report for the preceding calendar 1428 year which contains all of the following: 1429 (a) The median days cash on hand for all providers. 1430 (b) The median debt service coverage ratio for all 1431 providers. 1432 (c) The median occupancy rate for all providers by setting, 1433 including independent living, assisted living, skilled nursing, 1434 and the entire facility. 1435 (d) Documentation of the office’s compliance with the 1436 requirements in s. 651.105(1) relating to examination 1437 timeframes. The documentation must include the number of 1438 examinations completed in the preceding calendar year, the 1439 number of such examinations for which the report has been 1440 issued, and the percentage of all examinations completed within 1441 the statutorily required timeframes. 1442 (e) The number of annual reports submitted to the office 1443 pursuant to this section in the preceding calendar year and the 1444 percentage of such reports that the office has reviewed in order 1445 to determine whether a regulatory action level event has 1446 occurred. 1447 Section 13. Section 651.0261, Florida Statutes, is amended 1448 to read: 1449 651.0261 Quarterly and monthly statements.— 1450 (1) Within 45 days after the end of each fiscal quarter, 1451 each provider shall file a quarterly unaudited financial 1452 statement of the provider or of the facility in the form 1453 prescribed by commission rule and days cash on hand, occupancy, 1454 debt service coverage ratio, and a detailed listing of the 1455 assets maintained in the liquid reserve as required under s. 1456 651.035. The last quarterly statement for a fiscal year is not 1457 required if a provider does not have pending a regulatory action 1458 level event, impairment, or a corrective action plan. If a 1459 provider falls below two or more of the thresholds set forth in 1460 s. 651.011(25) at the end of any fiscal quarter, the provider 1461 shall submit to the office, at the same time as the quarterly 1462 statement, an explanation of the circumstances and a description 1463 of the actions it will take to meet the requirements. 1464 (2) If the office finds, pursuant to rules of the1465commission,that such information is needed to properly monitor 1466 the financial condition of a provider or facility or is 1467 otherwise needed to protect the public interest, the office may 1468 require the provider to file: 1469 (a) Within 25 days after the end of each month, a monthly 1470 unaudited financial statement of the provider or of the facility 1471 in the form prescribed by the commission by rule and a detailed 1472 listing of the assets maintained in the liquid reserve as 1473 required under s. 651.035, within 45 days after the end of each1474fiscal quarter, a quarterly unaudited financial statement of the1475provider or of the facility in the form prescribed by the1476commission by rule. The commission may by rule require all or1477part of the statements or filings required under this section to1478be submitted by electronic means in a computer-readable form1479compatible with the electronic data format specified by the1480commission. 1481 (b) Such other data, financial statements, and pertinent 1482 information as the commission or office may reasonably require 1483 with respect to the provider or the facility, its directors, or 1484 its trustees; or with respect to any parent, subsidiary, or 1485 affiliate, if the provider or facility relies on a contractual 1486 or financial relationship with such parent, subsidiary, or 1487 affiliate in order to meet the financial requirements of this 1488 chapter, to determine the financial status of the provider or of 1489 the facility and the management capabilities of its managers and 1490 owners. 1491 (3) A filing under subsection (2) may be required if any of 1492 the following applies: 1493 (a) The provider is: 1494 1. Subject to administrative supervision proceedings; 1495 2. Subject to a corrective action plan resulting from a 1496 regulatory action level event and for up to 2 years after the 1497 factors that caused the regulatory action level event have been 1498 corrected; or 1499 3. Subject to delinquency or receivership proceedings or 1500 has filed for bankruptcy. 1501 (b) The provider or facility displays a declining financial 1502 position. 1503 (c) A change of ownership of the provider or facility has 1504 occurred within the previous 2 years. 1505 (d) The provider is found to be impaired. 1506 (4) The commission may by rule require all or part of the 1507 statements or filings required under this section to be 1508 submitted by electronic means in a computer-readable format 1509 compatible with an electronic data format specified by the 1510 commission. 1511 Section 14. Section 651.028, Florida Statutes, is amended 1512 to read: 1513 651.028 Accredited facilities.—IfA provider or facility is 1514 deemed accredited for purposes of ss. 400.235(5)(b)1. and 1515 651.105(1) if it is accredited without stipulations or 1516 conditions by a process found by the commissionofficeto be 1517 acceptable,andsubstantially equivalent to the provisions of 1518 this chapter, and consistentthe office may, pursuant to rule of1519the commission, waive any requirements of this chapter with1520respect to the provider if the office finds that such waivers1521are not inconsistentwith the security protections intended by 1522 this chapter. 1523 Section 15. Subsections (1), (2), (3), and (5) of section 1524 651.033, Florida Statutes, are amended, and subsection (6) is 1525 added to that section, to read: 1526 651.033 Escrow accounts.— 1527 (1) When funds are required to be deposited in an escrow 1528 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s. 1529 651.0246, s. 651.035, or s. 651.055: 1530 (a) The escrow account mustshallbe established in a 1531 Florida bank, Florida savings and loan association,orFlorida 1532 trust company, or a national bank that is chartered and 1533 supervised by the Office of the Comptroller of the Currency 1534 within the United States Department of the Treasury and that has 1535 a branch in this state, which is acceptable to the office, or 1536 such funds must be depositedon depositwith the department;and 1537the funds deposited therein shallbe kept and maintained in an 1538 account separate and apart from the provider’s business 1539 accounts. 1540 (b) An escrow agreement shall be entered into between the 1541 bank, savings and loan association, or trust company and the 1542 provider of the facility; the agreement shall state that its 1543 purpose is to protect the resident or the prospective resident; 1544 and, upon presentation of evidence of compliance with applicable 1545 portions of this chapter, or upon order of a court of competent 1546 jurisdiction, the escrow agent shall release and pay over the 1547 funds, or portions thereof, together with any interest accrued 1548 thereon or earned from investment of the funds, to the provider 1549 or resident as directed. 1550 (c) Any agreement establishing an escrow account required 1551 underthe provisions ofthis chapter isshall besubject to 1552 approval by the office. The agreement mustshallbe in writing 1553 andshallcontain, in addition to any other provisions required 1554 by law, a provision whereby the escrow agent agrees to abide by 1555 the duties imposed by paragraphs (b) and (e), (3)(a), (3)(b), 1556 and (5)(a) and subsection (6)under this section. 1557 (d) All funds deposited in an escrow account, if invested, 1558 shall be invested as set forth in part II of chapter 625; 1559 however, such investment may not diminish the funds held in 1560 escrow below the amount required by this chapter. Funds 1561 deposited in an escrow account are not subject to charges by the 1562 escrow agent except escrow agent fees associated with 1563 administering the accounts, or subject to any liens, judgments, 1564 garnishments, creditor’s claims, or other encumbrances against 1565 the provider or facility except as provided in s. 651.035(1). 1566 (e) At the request of either the provider or the office, 1567 the escrow agent shall issue a statement indicating the status 1568 of the escrow account. 1569 (2) Notwithstanding s. 651.035(7),In addition, the escrow1570agreement shall provide that the escrow agent or another person1571designated to act in the escrow agent’s place and the provider,1572except as otherwise provided in s. 651.035, shall notify the1573office in writing at least 10 days before the withdrawal of any1574portion of any funds required to be escrowed under the1575provisions of s. 651.035. However,in the event of an emergency 1576 and upon petition by the provider, the office maywaive the 101577day notification period andallow a withdrawal of up to 10 1578 percent of the required minimum liquid reserve. The office shall 1579 have 3 working days to deny the petition for the emergency 10 1580 percent withdrawal. If the office fails to deny the petition 1581 within 3 working days, the petition isshall bedeemed to have 1582 been granted by the office. For purposesthe purposeof this 1583 section, the term “working day” means each day that is not a 1584 Saturday, Sunday, or legal holiday as defined by Florida law. 1585 Also, for purposesthe purposeof this section, the day the 1586 petition is received by the office isshallnotbecounted as 1587 one of the 3 days. 1588 (3)In addition,When entrance fees are required to be 1589 deposited in an escrow account pursuant to s. 651.0215, s. 1590 651.022, s. 651.023, s. 651.0246, or s. 651.055: 1591 (a) The provider shall deliver to the resident a written 1592 receipt. The receipt must show the payor’s name and address, the 1593 date, the price of the care contract, and the amount of money 1594 paid. A copy of each receipt, together with the funds, must 1595shallbe deposited with the escrow agent or as provided in 1596 paragraph (c). The escrow agent mustshallrelease such funds to 1597 the provider 7 days after the date of receipt of the funds by 1598 the escrow agent if the provider, operating under a certificate 1599 of authority issued by the office, has met the requirements of 1600 s. 651.0215(8), s. 651.023(6), or s. 651.0246. However, if the 1601 resident rescinds the contract within the 7-day period, the 1602 escrow agent mustshallrelease the escrowed fees to the 1603 resident. 1604 (b) At the request of an individual resident of a facility, 1605 the escrow agent shall issue a statement indicating the status 1606 of the resident’s portion of the escrow account. 1607 (c) At the request of an individual resident of a facility, 1608 the provider may hold the check for the 7-day period and may 1609shallnot deposit it during this time period. If the resident 1610 rescinds the contract within the 7-day period, the check must 1611shallbe immediately returned to the resident. Upon the 1612 expiration of the 7 days, the provider shall deposit the check. 1613 (d) A provider may assess a nonrefundable fee, which is 1614 separate from the entrance fee, for processing a prospective 1615 resident’s application for continuing care or continuing care 1616 at-home. 1617 (5) When funds are required to be deposited in an escrow 1618 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s. 1619 651.0246, or s. 651.035, the followingshallapply: 1620 (a) The escrow agreement mustshallrequire that the escrow 1621 agent furnish the provider with a quarterly statement indicating 1622 the amount of any disbursements from or deposits to the escrow 1623 account and the condition of the account during the period 1624 covered by the statement. The agreement mustshallrequire that 1625 the statement be furnished to the provider by the escrow agent 1626 on or before the 10th day of the month following the end of the 1627 quarter for which the statement is due. If the escrow agent does 1628 not provide the quarterly statement to the provider on or before 1629 the 10th day of the month following the month for which the 1630 statement is due, the office may, in its discretion, levy 1631 against the escrow agent a fine not to exceed $25 a day for each 1632 day of noncompliance with the provisions of this subsection. 1633 (b) If the escrow agent does not provide the quarterly 1634 statement to the provider on or before the 10th day of the month 1635 following the quarter for which the statement is due, the 1636 provider shall, on or before the 15th day of the month following 1637 the quarter for which the statement is due, send a written 1638 request for the statement to the escrow agent by certified mail 1639 return receipt requested. 1640 (c) On or before the 20th day of the month following the 1641 quarter for which the statement is due, the provider shall file 1642 with the office a copy of the escrow agent’s statement or, if 1643 the provider has not received the escrow agent’s statement, a 1644 copy of the written request to the escrow agent for the 1645 statement. 1646 (d) The office may, in its discretion, in addition to any 1647 other penalty that may be provided for under this chapter, levy 1648 a fine against the provider not to exceed $25 a day for each day 1649 the provider fails to comply with the provisions of this 1650 subsection. 1651 (e) Funds held on deposit with the department are exempt 1652 from the reporting requirements of this subsection. 1653 (6) Except as described in paragraph (3)(a), the escrow 1654 agent may not release or otherwise allow the transfer of funds 1655 without the written approval of the office, unless the 1656 withdrawal is from funds in excess of the amounts required by 1657 ss. 651.0215, 651.022, 651.023, 651.0246, 651.035, and 651.055. 1658 Section 16. Section 651.034, Florida Statutes, is created 1659 to read: 1660 651.034 Financial and operating requirements for 1661 providers.— 1662 (1)(a) If a regulatory action level event occurs, the 1663 office must: 1664 1. Require the provider to prepare and submit a corrective 1665 action plan or, if applicable, a revised corrective action plan; 1666 2. Perform an examination pursuant to s. 651.105 or an 1667 analysis, as the office considers necessary, of the assets, 1668 liabilities, and operations of the provider, including a review 1669 of the corrective action plan or the revised corrective action 1670 plan; and 1671 3. After the examination or analysis, issue a corrective 1672 order, if necessary, specifying any corrective actions that the 1673 office determines are required. 1674 (b) In determining corrective actions, the office shall 1675 consider any factor relevant to the provider based upon the 1676 office’s examination or analysis of the assets, liabilities, and 1677 operations of the provider. The provider must submit the 1678 corrective action plan or the revised corrective action plan 1679 within 30 days after the occurrence of the regulatory action 1680 level event. The office shall review and approve or disapprove 1681 the corrective action plan within 45 business days. 1682 (c) The office may use members of the Continuing Care 1683 Advisory Council, individually or as a group, or may retain 1684 actuaries, investment experts, and other consultants to review a 1685 provider’s corrective action plan or revised corrective action 1686 plan, examine or analyze the assets, liabilities, and operations 1687 of a provider, and formulate the corrective order with respect 1688 to the provider. The costs and expenses relating to consultants 1689 must be borne by the affected provider. 1690 (2) Except when the office’s remedial rights are suspended 1691 pursuant to s. 651.114(11)(a), the office must take action 1692 necessary to place an impaired provider under regulatory 1693 control, including any remedy available under part I of chapter 1694 631. An impairment is sufficient grounds for the department to 1695 be appointed as receiver as provided in chapter 631, except when 1696 the office’s remedial rights are suspended pursuant to s. 1697 651.114(11)(a). If the office’s remedial rights are suspended 1698 pursuant to s. 651.114(11)(a), the impaired provider must make 1699 available to the office copies of any corrective action plan 1700 approved by the third-party lender or trustee to cure the 1701 impairment and any related required report. For purposes of s. 1702 631.051, impairment of a provider is defined according to the 1703 term “impaired” under s. 651.011. The office may forego taking 1704 action for up to 180 days after the impairment if the office 1705 finds there is a reasonable expectation that the impairment may 1706 be eliminated within the 180-day period. 1707 (3) There is no liability on the part of, and a cause of 1708 action may not arise against, the commission, department, or 1709 office, or their employees or agents, for any action they take 1710 in the performance of their powers and duties under this 1711 section. 1712 (4) The office shall transmit any notice that may result in 1713 regulatory action by registered mail, certified mail, or any 1714 other method of transmission which includes documentation of 1715 receipt by the provider. Notice is effective when the provider 1716 receives it. 1717 (5) This section is supplemental to the other laws of this 1718 state and does not preclude or limit any power or duty of the 1719 department or office under those laws or under the rules adopted 1720 pursuant to those laws. 1721 (6) The office may exempt a provider from subsection (1) or 1722 subsection (2) until stabilized occupancy is reached or until 1723 the time projected to achieve stabilized occupancy as reported 1724 in the last feasibility study required by the office as part of 1725 an application filing under s. 651.0215, s. 651.023, s. 651.024, 1726 or s. 651.0246 has elapsed, but for no longer than 5 years after 1727 the date of issuance of the certificate of occupancy. 1728 (7) The commission may adopt rules to administer this 1729 section, including, but not limited to, rules regarding 1730 corrective action plans, revised corrective action plans, 1731 corrective orders, and procedures to be followed in the event of 1732 a regulatory action level event or an impairment. 1733 Section 17. Paragraphs (a), (b), and (c) of subsection (1) 1734 of section 651.035, Florida Statutes, are amended, and 1735 subsections (7) through (11) are added to that section, to read: 1736 651.035 Minimum liquid reserve requirements.— 1737 (1) A provider shall maintain in escrow a minimum liquid 1738 reserve consisting of the following reserves, as applicable: 1739 (a) Each provider shall maintain in escrow as a debt 1740 service reserve the aggregate amount of all principal and 1741 interest payments due during the fiscal year on any mortgage 1742 loan or other long-term financing of the facility, including 1743 property taxes as recorded in the audited financial report 1744statementsrequired under s. 651.026. The amount must include 1745 any leasehold payments and all costs related to such payments. 1746 If principal payments are not due during the fiscal year, the 1747 provider mustshallmaintain in escrow as a minimum liquid 1748 reserve an amount equal to interest payments due during the next 1749 12 months on any mortgage loan or other long-term financing of 1750 the facility, including property taxes. If a provider does not 1751 have a mortgage loan or other financing on the facility, the 1752 provider must deposit monthly in escrow as a minimum liquid 1753 reserve an amount equal to one-twelfth of the annual property 1754 tax liability as indicated in the most recent tax notice 1755 provided pursuant to s. 197.322(3), and must annually pay 1756 property taxes out of such escrow. 1757 (b) A provider that has outstanding indebtedness that 1758 requires a debt service reserve to be held in escrow pursuant to 1759 a trust indenture or mortgage lien on the facility and for which 1760 the debt service reserve may only be used to pay principal and 1761 interest payments on the debt that the debtor is obligated to 1762 pay, and which may include property taxes and insurance, may 1763 include such debt service reserve in computing the minimum 1764 liquid reserve needed to satisfy this subsection if the provider 1765 furnishes to the office a copy of the agreement under which such 1766 debt service is held, together with a statement of the amount 1767 being held in escrow for the debt service reserve, certified by 1768 the lender or trustee and the provider to be correct. The 1769 trustee shall provide the office with any information concerning 1770 the debt service reserve account upon request of the provider or 1771 the office. Any such separate debt service reserves are not 1772 subject to the transfer provisions set forth in subsection (8). 1773 (c) Each provider shall maintain in escrow an operating 1774 reserve equal to 30 percent of the total operating expenses 1775 projected in the feasibility study required by s. 651.023 for 1776 the first 12 months of operation. Thereafter, each provider 1777 shall maintain in escrow an operating reserve equal to 15 1778 percent of the total operating expenses in the annual report 1779 filed pursuant to s. 651.026. If a provider has been in 1780 operation for more than 12 months, the total annual operating 1781 expenses mustshallbe determined by averaging the total annual 1782 operating expenses reported to the office by the number of 1783 annual reports filed with the office within the preceding 3-year 1784 period subject to adjustment if there is a change in the number 1785 of facilities owned. For purposes of this subsection, total 1786 annual operating expenses include all expenses of the facility 1787 except:depreciation and amortization; interest and property 1788 taxes included in paragraph (a); extraordinary expenses that are 1789 adequately explained and documented in accordance with generally 1790 accepted accounting principles; liability insurance premiums in 1791 excess of those paid in calendar year 1999; and changes in the 1792 obligation to provide future services to current residents. For 1793 providers initially licensed during or after calendar year 1999, 1794 liability insurance mustshallbe included in the total 1795 operating expenses in an amount not to exceed the premium paid 1796 during the first 12 months of facility operation.Beginning1797January 1, 1993,The operating reserves required under this 1798 subsection mustshallbe in an unencumbered account held in 1799 escrow for the benefit of the residents. Such funds may not be 1800 encumbered or subject to any liens or charges by the escrow 1801 agent or judgments, garnishments, or creditors’ claims against 1802 the provider or facility. However, if a facility had a lien, 1803 mortgage, trust indenture, or similar debt instrument in place 1804 before January 1, 1993, which encumbered all or any part of the 1805 reserves required by this subsection and such funds were used to 1806 meet the requirements of this subsection, then such arrangement 1807 may be continued, unless a refinancing or acquisition has 1808 occurred, and the provider isshall bein compliance with this 1809 subsection. 1810 (7)(a) A provider may withdraw funds held in escrow without 1811 the approval of the office if the amount held in escrow exceeds 1812 the requirements of this section and if the withdrawal will not 1813 affect compliance with this section. 1814 (b)1. For all other proposed withdrawals, in order to 1815 receive the consent of the office, the provider must file 1816 documentation showing why the withdrawal is necessary for the 1817 continued operation of the facility and such additional 1818 information as the office reasonably requires. 1819 2. The office shall notify the provider when the filing is 1820 deemed complete. If the provider has complied with all prior 1821 requests for information, the filing is deemed complete after 30 1822 days without communication from the office. 1823 3. Within 30 days after the date a file is deemed complete, 1824 the office shall provide the provider with written notice of its 1825 approval or disapproval of the request. The office may 1826 disapprove any request to withdraw such funds if it determines 1827 that the withdrawal is not in the best interest of the 1828 residents. 1829 (8) The office may order the immediate transfer of up to 1830 100 percent of the funds held in the minimum liquid reserve to 1831 the custody of the department pursuant to part III of chapter 1832 625 if the office finds that the provider is impaired or 1833 insolvent. The office may order such a transfer regardless of 1834 whether the office has suspended or revoked, or intends to 1835 suspend or revoke, the certificate of authority of the provider. 1836 (9) Each facility shall file with the office annually, 1837 together with the annual report required by s. 651.026, a 1838 calculation of its minimum liquid reserve determined in 1839 accordance with this section on a form prescribed by the 1840 commission. 1841 (10) Any increase in the minimum liquid reserve must be 1842 funded not later than 61 days after the minimum liquid reserve 1843 calculation is due to be filed as provided in s. 651.026. 1844 (11) If the minimum liquid reserve is less than the 1845 required minimum amount at the end of any fiscal quarter due to 1846 a change in the market value of the invested funds, the provider 1847 must fund the shortfall within 10 business days. 1848 Section 18. Effective July 1, 2019, section 651.043, 1849 Florida Statutes, is created to read: 1850 651.043 Approval of change in management.— 1851 (1) A contract with a management company entered into after 1852 July 1, 2019, must be in writing and include a provision that 1853 the contract will be canceled upon issuance of an order by the 1854 office pursuant to this section and without the application of a 1855 cancellation fee or penalty. If a provider contracts with a 1856 management company, a separate written contract is not required 1857 for the individual manager employed by the management company or 1858 contractor hired by the management company to oversee a 1859 facility. If a management company executes a contract with an 1860 individual manager or contractor, the contract is not required 1861 to be submitted to the office unless requested by the office. 1862 (2) A provider shall notify the office, in writing or 1863 electronically, of any change in management within 10 business 1864 days. For each new management company or manager not employed by 1865 a management company, the provider shall submit to the office 1866 the information required by s. 651.022(2) and a copy of the 1867 written management contract, if applicable. 1868 (3) For a provider that is found to be impaired or that has 1869 a regulatory action level event pending, the office may 1870 disapprove new management and order the provider to remove the 1871 new management after reviewing the information required under 1872 subsection (2). 1873 (4) For a provider other than that specified in subsection 1874 (3), the office may disapprove new management and order the 1875 provider to remove the new management after receiving the 1876 required information under subsection (2), if the office: 1877 (a) Finds that the new management is incompetent or 1878 untrustworthy; 1879 (b) Finds that the new management is so lacking in 1880 managerial experience as to make the proposed operation 1881 hazardous to the residents or potential residents; 1882 (c) Finds that the new management is so lacking in 1883 experience, ability, and standing as to jeopardize the 1884 reasonable promise of successful operation; or 1885 (d) Has good reason to believe that the new management is 1886 affiliated directly or indirectly through ownership, control, or 1887 business relations with any person or persons whose business 1888 operations are or have been marked by manipulation of assets or 1889 accounts or by bad faith, to the detriment of residents, 1890 stockholders, investors, creditors, or the public. 1891 1892 The office shall complete its review as required under 1893 subsections (3) and (4) and, if applicable, issue notice of 1894 disapproval of the new management within 30 business days after 1895 the filing is deemed complete. A filing is deemed complete upon 1896 the office’s receipt of all requested information and the 1897 provider’s correction of any error or omission for which the 1898 provider was timely notified. If the office does not issue 1899 notice of disapproval of the new management within 30 business 1900 days after the filing is deemed complete, the new management is 1901 deemed approved. 1902 (5) Management disapproved by the office must be removed 1903 within 30 days after receipt by the provider of notice of such 1904 disapproval. 1905 (6) The office may revoke, suspend, or take other 1906 administrative action against the certificate of authority of 1907 the provider if the provider: 1908 (a) Fails to timely remove management disapproved by the 1909 office; 1910 (b) Fails to timely notify the office of a change in 1911 management; 1912 (c) Appoints new management without a written contract when 1913 a written contract is required under this section; or 1914 (d) Repeatedly appoints management that was previously 1915 disapproved by the office or that is not approvable under 1916 subsection (4). 1917 (7) The provider shall remove any management immediately 1918 upon discovery of either of the following conditions, if the 1919 conditions were not disclosed in the notice to the office 1920 required under subsection (2): 1921 (a) That a manager has been found guilty of, or has pled 1922 guilty or no contest to, a felony charge, or has been held 1923 liable or has been enjoined in a civil action by final judgment, 1924 if the felony or civil action involved fraud, embezzlement, 1925 fraudulent conversion, or misappropriation of property. 1926 (b) That a manager is now, or was in the past, affiliated, 1927 directly or indirectly, through ownership interest of 10 percent 1928 or more in, or control of, any business, corporation, or other 1929 entity that has been found guilty of or has pled guilty or no 1930 contest to a felony charge, or has been held liable or has been 1931 enjoined in a civil action by final judgment, if the felony or 1932 civil action involved fraud, embezzlement, fraudulent 1933 conversion, or misappropriation of property. 1934 1935 The failure to remove such management is grounds for revocation 1936 or suspension of the provider’s certificate of authority. 1937 Section 19. Section 651.051, Florida Statutes, is amended 1938 to read: 1939 651.051 Maintenance of assets and records in state.—All 1940 records and assets of a provider must be maintained or readily 1941 accessible in this state or, if the provider’s corporate office 1942 is located in another state, such records must be electronically 1943 stored in a manner that will ensure that the records are readily 1944 accessible to the office. No records or assets may be removed 1945 from this state by a provider unless the office consents to such 1946 removal in writing before such removal. Such consent mustshall1947 be based upon the provider’s submitting satisfactory evidence 1948 that the removal will facilitate and make more economical the 1949 operations of the provider and will not diminish the service or 1950 protection thereafter to be given the provider’s residents in 1951 this state. BeforePrior tosuch removal, the provider shall 1952 give notice to the president or chair of the facility’s 1953 residents’ council. If such removal is part of a cash management 1954 system which has been approved by the office, disclosure of the 1955 system mustshallmeet the notification requirements. The 1956 electronic storage of records on a web-based, secured storage 1957 platform by contract with a third party is acceptable if the 1958 records are readily accessible to the office. 1959 Section 20. Subsection (3) of section 651.055, Florida 1960 Statutes, is amended to read: 1961 651.055 Continuing care contracts; right to rescind.— 1962 (3) The contract must include or be accompanied by a 1963 statement, printed in boldfaced type, which reads: “This 1964 facility and all other continuing care facilities (also known as 1965 life plan communities) in the State of Florida are regulated by 1966 the Office of Insurance Regulation pursuant to chapter 651, 1967 Florida Statutes. A copy of the law is on file in this facility. 1968 The law gives you or your legal representative the right to 1969 inspect our most recent financial statement and inspection 1970 report before signing the contract. The financial structure of a 1971 continuing care provider can be complex, and the decision to 1972 enter into a contract for continuing care is a long-term 1973 commitment between a resident and the continuing care provider. 1974 You may wish to consult an attorney or a financial advisor 1975 before entering into such a contract.” 1976 Section 21. Subsection (2) of section 651.057, Florida 1977 Statutes, is amended to read: 1978 651.057 Continuing care at-home contracts.— 1979 (2) A provider that holds a certificate of authority and 1980 wishes to offer continuing care at-home must also: 1981 (a) Submit a business plan to the office with the following 1982 information: 1983 1. A description of the continuing care at-home services 1984 that will be provided, the market to be served, and the fees to 1985 be charged; 1986 2. A copy of the proposed continuing care at-home contract; 1987 3. An actuarial study prepared by an independent actuary in 1988 accordance with the standards adopted by the American Academy of 1989 Actuaries which presents the impact of providing continuing care 1990 at-home on the overall operation of the facility; and 1991 4. Amarketfeasibility study that meets the requirements 1992 of s. 651.022(3) and documents that there is sufficient interest 1993 in continuing care at-home contracts to support such a program; 1994 (b) Demonstrate to the office that the proposal to offer 1995 continuing care at-home contracts to individuals who do not 1996 immediately move into the facility will not place the provider 1997 in an unsound financial condition; 1998 (c) Comply with the requirements of s. 651.0246(1)s.1999651.021(2), except that an actuarial study may be substituted 2000 for the feasibility study; and 2001 (d) Comply with the requirements of this chapter. 2002 Section 22. Subsection (1) of section 651.071, Florida 2003 Statutes, is amended to read: 2004 651.071 Contracts as preferred claims on liquidation or 2005 receivership.— 2006 (1) In the event of receivership or liquidation proceedings 2007 against a provider, all continuing care and continuing care at 2008 home contracts executed by a provider areshall bedeemed 2009 preferred claims against all assets owned by the provider; 2010 however, such claims are subordinate to any secured claim. For 2011 purposes of s. 631.271, such contracts are deemed Class 2 2012 claims. 2013 Section 23. Subsections (2) and (3) of section 651.091, 2014 Florida Statutes, are amended, and subsection (4) of that 2015 section is republished, to read: 2016 651.091 Availability, distribution, and posting of reports 2017 and records; requirement of full disclosure.— 2018 (2) Every continuing care facility shall: 2019 (a) Display the certificate of authority in a conspicuous 2020 place inside the facility. 2021 (b) Post in a prominent position in the facility which is 2022 accessible to all residents and the general public a concise 2023 summary of the last examination report issued by the office, 2024 with references to the page numbers of the full report noting 2025 any deficiencies found by the office, and the actions taken by 2026 the provider to rectify such deficiencies, indicating in such 2027 summary where the full report may be inspected in the facility. 2028 (c) Post in a prominent position in the facility, 2029 accessible to all residents and the general public, a notice 2030 containing the contact information for the office and the 2031 Division of Consumer Services of the department and stating that 2032 the division or office may be contacted for the submission of 2033 inquiries and complaints with respect to potential violations of 2034 this chapter committed by a provider. Such contact information 2035 must include the division’s website and the toll-free consumer 2036 helpline and the office’s website and telephone number. 2037 (d) Provide notice to the president or chair of the 2038 residents’ council within 10 business days after issuance of a 2039 final examination report or the initiation of any legal or 2040 administrative proceeding by the office or the department and 2041 include a copy of such document. 2042 (e)(c)Post in a prominent position in the facility which 2043 is accessible to all residents and the general public a summary 2044 of the latest annual statement, indicating in the summary where 2045 the full annual statement may be inspected in the facility. A 2046 listing of any proposed changes in policies, programs, and 2047 services must also be posted. 2048 (f)(d)Distribute a copy of the full annual statement and a 2049 copy of the most recent third-partythird partyfinancial audit 2050 filed with the annual report to the president or chair of the 2051 residents’ council within 30 days after filing the annual report 2052 with the office, and designate a staff person to provide 2053 explanation thereof. 2054 (g)(e)Deliver the information described in s. 651.085(4) 2055 in writing to the president or chair of the residents’ council 2056 and make supporting documentation available upon requestNotify2057the residents’ council of any plans filed with the office to2058obtain new financing, additional financing, or refinancing for2059the facility and of any applications to the office for any2060expansion of the facility. 2061 (h)(f)Deliver to the president or chair of the residents’ 2062 council a summary of entrance fees collected and refunds made 2063 during the time period covered in the annual report and the 2064 refund balances due at the end of the report period. 2065 (i)(g)Deliver to the president or chair of the residents’ 2066 council a copy of each quarterly statement within 30 days after 2067 the quarterly statement is filed with the office if the facility 2068 is required to file quarterly. 2069 (j)(h)Upon request, deliver to the president or chair of 2070 the residents’ council a copy of any newly approved continuing 2071 care or continuing care at-home contract within 30 days after 2072 approval by the office. 2073 (k) Provide to the president or chair of the residents’ 2074 council a copy of any notice filed with the office relating to 2075 any change in ownership within 10 business days after such 2076 filing by the provider. 2077 (l) Make the information available to prospective residents 2078 pursuant to paragraph (3)(d) available to current residents and 2079 provide notice of changes to that information to the president 2080 or chair of the residents’ council within 3 business days. 2081 (3) Before entering into a contract to furnish continuing 2082 care or continuing care at-home, the provider undertaking to 2083 furnish the care, or the agent of the provider, shall make full 2084 disclosure, obtain written acknowledgment of receipt, and 2085 provide copies of the disclosure documents to the prospective 2086 resident or his or her legal representative, of the following 2087 information: 2088 (a) The contract to furnish continuing care or continuing 2089 care at-home. 2090 (b) The summary listed in paragraph (2)(b). 2091 (c) All ownership interests and lease agreements, including 2092 information specified in s. 651.022(2)(b)8. 2093 (d) In keeping with the intent of this subsection relating 2094 to disclosure, the provider shall make available for review 2095 master plans approved by the provider’s governing board and any 2096 plans for expansion or phased development, to the extent that 2097 the availability of such plans does not put at risk real estate, 2098 financing, acquisition, negotiations, or other implementation of 2099 operational plans and thus jeopardize the success of 2100 negotiations, operations, and development. 2101 (e) Copies of the rules and regulations of the facility and 2102 an explanation of the responsibilities of the resident. 2103 (f) The policy of the facility with respect to admission to 2104 and discharge from the various levels of health care offered by 2105 the facility. 2106(g)The amount and location of any reserve funds required2107by this chapter, and the name of the person or entity having a2108claim to such funds in the event of a bankruptcy, foreclosure,2109or rehabilitation proceeding.2110 (g)(h)A copy of s. 651.071. 2111 (h)(i)A copy of the resident’s rights as described in s. 2112 651.083. 2113 (i) Notice of the issuance of a final examination report or 2114 the initiation of any legal or administrative proceeding by the 2115 office or the department, including where the report or filing 2116 may be inspected in the facility, and that, upon request, an 2117 electronic copy or specific website address will be provided 2118 from which the document can be downloaded at no cost. 2119 (j) Notice that if the resident does not exercise the right 2120 to rescind a continuing care contract within 7 days after 2121 executing the contract, the resident’s funds held in escrow 2122 pursuant to s. 651.055(2) will be released to the provider. 2123 (k) A statement that distribution of the provider’s assets 2124 or income may occur or a statement that such distributions will 2125 not occur. 2126 (l) Notice of any holding company system or obligated group 2127 of which the provider is a member. 2128 (4) A true and complete copy of the full disclosure 2129 document to be used must be filed with the office before use. A 2130 resident or prospective resident or his or her legal 2131 representative may inspect the full reports referred to in 2132 paragraph (2)(b); the charter or other agreement or instrument 2133 required to be filed with the office pursuant to s. 651.022(2), 2134 together with all amendments thereto; and the bylaws of the 2135 corporation or association, if any. Upon request, copies of the 2136 reports and information shall be provided to the individual 2137 requesting them if the individual agrees to pay a reasonable 2138 charge to cover copying costs. 2139 Section 24. Subsection (4) of section 651.095, Florida 2140 Statutes, is amended to read: 2141 651.095 Advertisements; requirements; penalties.— 2142 (4) It is unlawful for any person, other than a provider 2143 licensed pursuant to this chapter, to advertise or market to the 2144 general public any product similar to continuing care through 2145 the use of such terms as “life care,” “life plan,” “life plan 2146 at-home,” “continuing care,” or “guaranteed care for life,” or 2147 similar terms, words, or phrases. 2148 Section 25. Section 651.105, Florida Statutes, is amended 2149 to read: 2150 651.105 Examinationand inspections.— 2151 (1) The office may at any time, and shall at least once 2152 every 3 years, examine the business of any applicant for a 2153 certificate of authority and any provider engaged in the 2154 execution of care contracts or engaged in the performance of 2155 obligations under such contracts, in the same manner as is 2156 provided for the examination of insurance companies pursuant to 2157 ss. 624.316 and 624.318s. 624.316. For a provider deemed 2158 accredited underas defined ins. 651.028, such examinations 2159 mustshalltake place at least once every 5 years. Such 2160 examinations mustshallbe made by a representative or examiner 2161 designated by the office whose compensation will be fixed by the 2162 office pursuant to s. 624.320. Routine examinations may be made 2163 by having the necessary documents submitted to the office; and, 2164 for this purpose, financial documents and records conforming to 2165 commonly accepted accounting principles and practices, as 2166 required under s. 651.026, are deemed adequate. The final 2167 written report of each examination must be filed with the office 2168 and, when so filed, constitutes a public record. Any provider 2169 being examined shall, upon request, give reasonable and timely 2170 access to all of its records. The representative or examiner 2171 designated by the office may at any time examine the records and 2172 affairs and inspect the physical property of any provider, 2173 whether in connection with a formal examination or not. 2174 (2) Any duly authorized officer, employee, or agent of the 2175 office may, upon presentation of proper identification, have 2176 access to, and examineinspect, any records, with or without 2177 advance notice, to secure compliance with, or to prevent a 2178 violation of, any provision of this chapter. 2179 (3) Reports of the results of such financial examinations 2180 must be kept on file by the office. Any investigatory records, 2181 reports, or documents held by the office are confidential and 2182 exempt from the provisions of s. 119.07(1), until the 2183 investigation is completed or ceases to be active. For the 2184 purpose of this section, an investigation is active while it is 2185 being conducted by the office with a reasonable, good faith 2186 belief that it could lead to the filing of administrative, 2187 civil, or criminal proceedings. An investigation does not cease 2188 to be active if the office is proceeding with reasonable 2189 dispatch and has a good faith belief that action could be 2190 initiated by the office or other administrative or law 2191 enforcement agency. 2192 (4) The office shall notify the provider and the executive 2193 officer of the governing body of the provider in writing of all 2194 deficiencies in its compliance with the provisions of this 2195 chapter and the rules adopted pursuant to this chapter and shall 2196 set a reasonable length of time for compliance by the provider. 2197 In addition, the office shall require corrective action or 2198 request a corrective action plan from the provider which plan 2199 demonstrates a good faith attempt to remedy the deficiencies by 2200 a specified date. If the provider fails to comply within the 2201 established length of time, the office may initiate action 2202 against the provider in accordance with the provisions of this 2203 chapter. 2204 (5) A provider shall respond to written correspondence from 2205 the office and provide data, financial statements, and pertinent 2206 information as requested by the office. The office has standing 2207 to petition a circuit court for mandatory injunctive relief to 2208 compel access to and require the provider to produce the 2209 documents, data, records, and other information requested by the 2210 office. The office may petition the circuit court in the county 2211 in which the facility is situated or the Circuit Court of Leon 2212 County to enforce this sectionAt the time of the routine2213examination, the office shall determine if all disclosures2214required under this chapter have been made to the president or2215chair of the residents’ council and the executive officer of the2216governing body of the provider. 2217 (6) A representative of the provider must give a copy of 2218 the final examination report and corrective action plan, if one 2219 is required by the office, to the executive officer of the 2220 governing body of the provider within 60 days after issuance of 2221 the report. 2222 (7) Unless a provider is impaired or subject to a 2223 regulatory action level event, any parent, subsidiary, or 2224 affiliate is not subject to examination by the office as part of 2225 a routine examination. However, if a provider or facility relies 2226 on a contractual or financial relationship with a parent, a 2227 subsidiary, or an affiliate in order to meet the financial 2228 requirements of this chapter, the office may examine any parent, 2229 subsidiary, or affiliate that has a contractual or financial 2230 relationship with the provider or facility to the extent 2231 necessary to ascertain the financial condition of the provider. 2232 Section 26. Section 651.106, Florida Statutes, is amended 2233 to read: 2234 651.106 Grounds for discretionary refusal, suspension, or 2235 revocation of certificate of authority.—The office may deny an 2236 application or,suspend,or revoke the provisional certificate 2237 of authority or the certificate of authority of any applicant or 2238 provider if it finds that any one or more of the following 2239 grounds applicable to the applicant or provider exist: 2240 (1) Failure by the provider to continue to meet the 2241 requirements for the authority originally granted. 2242 (2) Failure by the provider to meet one or more of the 2243 qualifications for the authority specified by this chapter. 2244 (3) Material misstatement, misrepresentation, or fraud in 2245 obtaining the authority, or in attempting to obtain the same. 2246 (4) Demonstrated lack of fitness or trustworthiness. 2247 (5) Fraudulent or dishonest practices of management in the 2248 conduct of business. 2249 (6) Misappropriation, conversion, or withholding of moneys. 2250 (7) Failure to comply with, or violation of, any proper 2251 order or rule of the office or commission or violation of any 2252 provision of this chapter. 2253 (8) The insolvent or impaired condition of the provider or 2254 the provider’s being in such condition or using such methods and 2255 practices in the conduct of its business as to render its 2256 further transactions in this state hazardous or injurious to the 2257 public. 2258 (9) Refusal by the provider to be examined or to produce 2259 its accounts, records, and files for examination, or refusal by 2260 any of its officers to give information with respect to its 2261 affairs or to perform any other legal obligation under this 2262 chapter when required by the office. 2263 (10) Failure by the provider to comply with the 2264 requirements of s. 651.026 or s. 651.033. 2265 (11) Failure by the provider to maintain escrow accounts or 2266 funds as required by this chapter. 2267 (12) Failure by the provider to meet the requirements of 2268 this chapter for disclosure of information to residents 2269 concerning the facility, its ownership, its management, its 2270 development, or its financial condition or failure to honor its 2271 continuing care or continuing care at-home contracts. 2272 (13) Any cause for which issuance of the license could have 2273 been refused had it then existed and been known to the office. 2274 (14) Having been found guilty of, or having pleaded guilty 2275 or nolo contendere to, a felony in this state or any other 2276 state, without regard to whether a judgment or conviction has 2277 been entered by the court having jurisdiction of such cases. 2278 (15) In the conduct of business under the license, engaging 2279 in unfair methods of competition or in unfair or deceptive acts 2280 or practices prohibited under part IX of chapter 626. 2281 (16) A pattern of bankrupt enterprises. 2282 (17) The ownership, control, or management of the 2283 organization includes any person: 2284 (a) Who is not reputable and of responsible character; 2285 (b) Who is so lacking in management expertise as to make 2286 the operation of the provider hazardous to potential and 2287 existing residents; 2288 (c) Who is so lacking in management experience, ability, 2289 and standing as to jeopardize the reasonable promise of 2290 successful operation; 2291 (d) Who is affiliated, directly or indirectly, through 2292 ownership or control, with any person or persons whose business 2293 operations are or have been marked by business practices or 2294 conduct that is detrimental to the public, contract holders, 2295 investors, or creditors, or by manipulation of assets, finances, 2296 or accounts or by bad faith; or 2297 (e) Whose business operations are or have been marked by 2298 business practices or conduct that is detrimental to the public, 2299 contract holders, investors, or creditors, or by manipulation of 2300 assets, finances, or accounts or by bad faith. 2301 (18) The provider has not filed a notice of change in 2302 management, fails to remove a disapproved manager, or persists 2303 in appointing disapproved managers. 2304 2305 Revocation of a certificate of authority under this section does 2306 not relieve a provider from the provider’s obligation to 2307 residents under the terms and conditions of any continuing care 2308 or continuing care at-home contract between the provider and 2309 residents or the provisions of this chapter. The provider shall 2310 continue to file its annual statement and pay license fees to 2311 the office as required under this chapter as if the certificate 2312 of authority had continued in full force, but the provider shall 2313 not issue any new contracts. The office may seek an action in 2314 the Circuit Court of Leon County to enforce the office’s order 2315 and the provisions of this section. 2316 Section 27. Section 651.1065, Florida Statutes, is created 2317 to read: 2318 651.1065 Soliciting or accepting new continuing care 2319 contracts by impaired or insolvent facilities or providers.— 2320 (1) Regardless of whether delinquency proceedings as to a 2321 continuing care facility have been or are to be initiated, a 2322 proprietor, a general partner, a member, an officer, a director, 2323 a trustee, or a manager of a continuing care facility may not 2324 actively solicit, approve the solicitation or acceptance of, or 2325 accept new continuing care contracts in this state after the 2326 proprietor, general partner, member, officer, director, trustee, 2327 or manager knew, or reasonably should have known, that the 2328 continuing care facility was impaired or insolvent except with 2329 the written permission of the office. If the facility has 2330 declared bankruptcy, the bankruptcy court or trustee appointed 2331 by the court has jurisdiction over such matters. The office must 2332 approve or disapprove the continued marketing of new contracts 2333 within 15 days after receiving a request from a provider. 2334 (2) A proprietor, a general partner, a member, an officer, 2335 a director, a trustee, or a manager who violates this section 2336 commits a felony of the third degree, punishable as provided in 2337 s. 775.082, s. 775.083, or s. 775.084. 2338 Section 28. Subsections (1) and (3) of section 651.111, 2339 Florida Statutes, are amended to read: 2340 651.111 Requests for inspections.— 2341 (1) Any interested party may request an inspection of the 2342 records and related financial affairs of a provider providing 2343 care in accordance withthe provisions ofthis chapter by 2344 transmitting to the office notice of an alleged violation of 2345 applicable requirements prescribed by statute or by rule, 2346 specifying to a reasonable extent the details of the alleged 2347 violation, which notice mustshallbe signed by the complainant. 2348 As used in this section, the term “inspection” means an inquiry 2349 into a provider’s compliance with this chapter. 2350 (3) Upon receipt of a complaint, the office shall make a 2351 preliminary review to determine if the complaint alleges a 2352 violation of this chapter;and, unless the office determines 2353 that the complaint does not allege a violation of this chapter 2354 or is without any reasonable basis, the office shall make an 2355 inspection. The office shall provide the complainant with a 2356 written acknowledgment of the complaint within 15 days after 2357 receipt by the office. The complainant shall be advised, within 2358 30 days after the receipt of the complaint by the office, of the 2359 office’s determination that the complaint does not allege a 2360 violation of this chapter, that the complaint is without any 2361 reasonable basis, or that the office will make an inspection. 2362 The notice must include an estimated timeframe for completing 2363 the inspection and a contact number. If the inspection is not 2364 completed within the estimated timeframe, the office must 2365 provide the complainant with a revised timeframe. Within 15 days 2366 after completing an inspection, the office shall provide the 2367 complainant and the provider a written statement specifying any 2368 violations of this chapter and any actions taken or that no such 2369 violation was foundproposed course of action of the office. 2370 Section 29. Section 651.114, Florida Statutes, is amended 2371 to read: 2372 651.114 Delinquency proceedings; remedial rights.— 2373 (1) Upon determination by the office that a provider is not 2374 in compliance with this chapter, the office may notify the chair 2375 of the Continuing Care Advisory Council, who may assist the 2376 office in formulating a corrective action plan. 2377 (2) Within 30 days after a request by either the advisory 2378 council or the office, a provider shall make a plan for 2379 obtaining compliance or solvency available to the advisory 2380 council and the office, within 30 days after being requested to2381do so by the council, a plan for obtaining compliance or2382solvency. 2383 (3) Within 30 days after receipt of a plan for obtaining 2384 compliance or solvency, the office or, at the request of the 2385 office,notification,the advisory council shall: 2386 (a) Consider and evaluate the plan submitted by the 2387 provider. 2388 (b) Discuss the problem and solutions with the provider. 2389 (c) Conduct such other business as is necessary. 2390 (d) Report its findings and recommendations to the office, 2391 which may require additional modification of the plan. 2392 2393 This subsection may not be construed to delay or prevent the 2394 office from taking any regulatory measures it deems necessary 2395 regarding the provider that submitted the plan. 2396 (4) If the financial condition of a continuing care 2397 provider is impaired or is such that if not modified or 2398 corrected, its continued operation would result in insolvency, 2399 the office may direct the provider to formulate and file with 2400 the office a corrective action plan. If the provider fails to 2401 submit a plan within 30 days after the office’s directive or 2402 submits a plan that is insufficient to correct the condition, 2403 the office may specify a plan and direct the provider to 2404 implement the plan. Before specifying a plan, the office may 2405 seek a recommended plan from the advisory council. 2406 (5)(4)After receiving approval of a plan by the office, 2407 the provider shall submit a progress report monthly to the 2408 advisory council or the office, or both, in a manner prescribed 2409 by the office. After 3 months, or at any earlier time deemed 2410 necessary, the council shall evaluate the progress by the 2411 provider and shall advise the office of its findings. 2412 (6)(5)IfShouldthe office findsfindthat sufficient 2413 grounds exist for rehabilitation, liquidation, conservation, 2414 reorganization, seizure, or summary proceedings of an insurer as 2415 set forth in ss. 631.051, 631.061, and 631.071, the department 2416officemay petition for an appropriate court order or may pursue 2417 such other relief as is afforded in part I of chapter 631. 2418 Before invoking its powers under part I of chapter 631, the 2419 departmentofficeshall notify the chair of the advisory 2420 council. 2421 (7) For purposes of s. 631.051, impairment of a provider 2422 has the same meaning as the term “impaired” in s. 651.011. 2423 (8)(6)In the event an order of conservation, 2424 rehabilitation, liquidation, orconservation, reorganization,2425 seizure, or summary proceedinghas been entered against a 2426 provider, the department and office are vested with all of the 2427 powers and duties they have underthe provisions ofpart I of 2428 chapter 631 in regard to delinquency proceedings of insurance 2429 companies. A provider shall give written notice of the 2430 proceeding to its residents within 3 business days after the 2431 initiation of a delinquency proceeding under chapter 631 and 2432 shall include a notice of the delinquency proceeding in any 2433 written materials provided to prospective residents 2434(7)If the financial condition of the continuing care2435facility or provider is such that, if not modified or corrected,2436its continued operation would result in insolvency, the office2437may direct the provider to formulate and file with the office a2438corrective action plan. If the provider fails to submit a plan2439within 30 days after the office’s directive or submits a plan2440that is insufficient to correct the condition, the office may2441specify a plan and direct the provider to implement the plan. 2442 (9) A provider subject to an order to show cause entered 2443 pursuant to chapter 631 must file its written response to the 2444 order, together with any defenses it may have to the 2445 department’s allegations, according to the time periods 2446 specified in s. 631.031(3). 2447 (10) A hearing held pursuant to chapter 631 to determine 2448 whether cause exists for the department to be appointed receiver 2449 must be held in accordance with the time period specified in s. 2450 631.031(4). 2451 (11)(a)(8)(a)The rights of the office described in this 2452 section are subordinate to the rights of a trustee or lender 2453 pursuant to the terms of a resolution, ordinance, loan 2454 agreement, indenture of trust, mortgage, lease, security 2455 agreement, or other instrument creating or securing bonds or 2456 notes issued to finance a facility, and the office, subject to 2457the provisions ofparagraph (c), mayshallnot exercise its 2458 remedial rights provided under this section and ss. 651.018, 2459 651.106, 651.108, and 651.116 with respect to a facility that is 2460 subject to a lien, mortgage, lease, or other encumbrance or 2461 trust indenture securing bonds or notes issued in connection 2462 with the financing of the facility, if the trustee or lender, by 2463 inclusion or by amendment to the loan documents or by a separate 2464 contract with the office, agrees that the rights of residents 2465 under a continuing care or continuing care at-home contract will 2466 be honored and will not be disturbed by a foreclosure or 2467 conveyance in lieu thereof as long as the resident: 2468 1. Is current in the payment of all monetary obligations 2469 required by the contract; 2470 2. Is in compliance and continues to comply with all 2471 provisions of the contract; and 2472 3. Has asserted no claim inconsistent with the rights of 2473 the trustee or lender. 2474 (b) This subsection does not require a trustee or lender 2475 to: 2476 1. Continue to engage in the marketing or resale of new 2477 continuing care or continuing care at-home contracts; 2478 2. Pay any rebate of entrance fees as may be required by a 2479 resident’s continuing care or continuing care at-home contract 2480 as of the date of acquisition of the facility by the trustee or 2481 lender and until expiration of the period described in paragraph 2482 (d); 2483 3. Be responsible for any act or omission of any owner or 2484 operator of the facility arising before the acquisition of the 2485 facility by the trustee or lender; or 2486 4. Provide services to the residents to the extent that the 2487 trustee or lender would be required to advance or expend funds 2488 that have not been designated or set aside for such purposes. 2489 (c) IfShouldthe office determinesdetermine, at any time 2490 during the suspension of its remedial rights as provided in 2491 paragraph (a), that: 2492 1. The trustee or lender is not in compliance with 2493 paragraph (a);, or that2494 2. A lender or trustee has assigned or has agreed to assign 2495 all or a portion of a delinquent or defaulted loan to a third 2496 party without the office’s written consent;,2497 3. The provider engaged in the misappropriation, 2498 conversion, or illegal commitment or withdrawal of minimum 2499 liquid reserve or escrowed funds required under this chapter; 2500 4. The provider refused to be examined by the office 2501 pursuant to s. 651.105(1); or 2502 5. The provider refused to produce any relevant accounts, 2503 records, and files requested as part of an examination, 2504 2505 the office shall notify the trustee or lender in writing of its 2506 determination, setting forth the reasons giving rise to the 2507 determination and specifying those remedial rights afforded to 2508 the office which the office shall then reinstate. 2509 (d) Upon acquisition of a facility by a trustee or lender 2510 and evidence satisfactory to the office that the requirements of 2511 paragraph (a) have been met, the office shall issue a 90-day 2512 temporary certificate of authority granting the trustee or 2513 lender the authority to engage in the business of providing 2514 continuing care or continuing care at-home and to issue 2515 continuing care or continuing care at-home contracts subject to 2516 the office’s right to immediately suspend or revoke the 2517 temporary certificate of authority if the office determines that 2518 any of the grounds described in s. 651.106 apply to the trustee 2519 or lender or that the terms of the contract used as the basis 2520 for the issuance of the temporary certificate of authority by 2521 the office have not been or are not being met by the trustee or 2522 lender since the date of acquisition. 2523 Section 30. Section 651.1141, Florida Statutes, is created 2524 to read: 2525 651.1141 Immediate final orders.— 2526 (1) The Legislature finds that the following actions 2527 constitute an imminent and immediate threat to the public 2528 health, safety, and welfare of the residents of this state: 2529 (a) The installation of a general partner of a provider or 2530 assumption of ownership or possession or control of 10 percent 2531 or more of a provider’s assets in violation of s. 651.024 or s. 2532 651.0245; 2533 (b) The removal or commitment of 10 percent or more of the 2534 required minimum liquid reserve funds in violation of s. 2535 651.035; or 2536 (c) The assumption of control over a facility’s operations 2537 in violation of s. 651.043. 2538 (2) If it finds that a person or entity is engaging or has 2539 engaged in one or more of the above activities, the office may, 2540 pursuant to s. 120.569, issue an immediate final order: 2541 (a) Directing that such person or entity cease and desist 2542 that activity; or 2543 (b) Suspending the certificate of authority of the 2544 facility. 2545 Section 31. Subsection (1) of section 651.121, Florida 2546 Statutes, is amended to read: 2547 651.121 Continuing Care Advisory Council.— 2548 (1) The Continuing Care Advisory Council to the office is 2549 created consisting of 10 memberswho are residents of this state2550 appointed by the Governor and geographically representative of 2551 this state. Three members shall be representatives 2552administratorsof facilities that hold valid certificates of 2553 authority under this chapter andshallhave been actively 2554 engaged in the offering of continuing care contracts in this 2555 state for 5 years before appointment. The remaining members 2556 include: 2557 (a) A representative of the business community whose 2558 expertise is in the area of management. 2559 (b) A representative of the financial community who is not 2560 a facility owner or administrator. 2561 (c) A certified public accountant. 2562(d) An attorney.2563 (d)(e)FourThreeresidents who hold continuing care or 2564 continuing care at-home contracts with a facility certified in 2565 this state. 2566 Section 32. Subsections (1) and (4) of section 651.125, 2567 Florida Statutes, are amended to read: 2568 651.125 Criminal penalties; injunctive relief.— 2569 (1) Any person who maintains, enters into, or, as manager 2570 or officer or in any other administrative capacity, assists in 2571 entering into, maintaining, or performing any continuing care or 2572 continuing care at-home contract subject to this chapter without 2573doing so in pursuance ofa valid provisional certificate of 2574 authority or certificate of authorityor renewal thereof, as 2575 contemplated by or provided in this chapter, or who otherwise 2576 violates any provision of this chapter or rule adopted in 2577 pursuance of this chapter, commits a felony of the third degree, 2578 punishable as provided in s. 775.082 or s. 775.083. Each 2579 violation of this chapter constitutes a separate offense. 2580 (4) Any action brought by the office against a provider 2581 shall not abate by reason of a sale or other transfer of 2582 ownership of the facility used to provide care, which provider 2583 is a party to the action, except with the express written 2584 consent of thedirector oftheoffice. 2585 Section 33. Except as otherwise expressly provided in this 2586 act and except for this section, which shall take effect July 1, 2587 2019, this act shall take effect January 1, 2020.