BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1212|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
UNFINISHED BUSINESS
Bill No: SB 1212
Author: Torlakson (D), et al
Amended: 8/10/06
Vote: 21
SENATE HUMAN SERVICES COMMITTEE : 3-2,04/25/06
AYES: Alquist, Chesbro, Romero
NOES: Maldonado, Aanestad
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 22-14, 5/25/06
AYES: Alarcon, Alquist, Cedillo, Chesbro, Dunn, Escutia,
Figueroa, Florez, Kuehl, Lowenthal, Machado, Migden,
Murray, Ortiz, Perata, Romero, Scott, Simitian, Soto,
Speier, Torlakson, Vincent
NOES: Aanestad, Ackerman, Ashburn, Battin, Cox, Denham,
Ducheny, Dutton, Hollingsworth, Margett, McClintock,
Morrow, Poochigian, Runner
NO VOTE RECORDED: Bowen, Kehoe, Maldonado, Vacancy
ASSEMBLY FLOOR : 78-0, 8/23/06 - See last page for vote
SUBJECT : Continuing care retirement communities:
advisory
committee member
SOURCE : California Continuing Care Residents
Association
CONTINUED
SB 1212
Page
2
DIGEST : This bill makes changes to rules governing
Continuing Care Retirement Communities involving disclosure
of reserves, transfer procedures, and escrow deposits for
new construction.
Assembly Amendments reduced the percentage of each
depositor's applicable entrance fee required to be placed
into escrow by an applicant from 20 percent to 10 percent,
required that a continuing care contract contain specified
provisions, deleted a section related to the Continuing
Care Advisory Committee, and clarified provisions regarding
funds.
ANALYSIS :
Existing Law
1.Provides for the regulation by the Department of Social
Services (DSS) activities relating to continuing care
contracts that govern care provided to an elderly
resident in a continuing care retirement community for
the duration of the resident's life or a term in excess
of one year.
2.Designates the contents of a continuing care contract,
including the conditions under which a resident of a
continuing care retirement community (CCRC) may be
voluntarily or involuntarily transferred from his or her
designated living unit.
3.Requires that each CCRC provider submit an annual report
of its financial condition, including full details on the
status of reserves and on per capita costs of operation
for each CCRC operated.
4.Requires that at least 20 percent of the entrance fees
for 50 percent of the units of any proposed construction
of a new CCRC or added units to an existing CCRC be
deposited in an escrow account as a condition of approval
of the construction by DSS, and allows release of the
escrowed deposits only after construction is at least 50
percent complete.
This bill:
CONTINUED
SB 1212
Page
3
1.Clarifies the requirement that transfer of a resident
from a designated living unit under specified conditions
is permissive and not mandatory.
2.Requires that any statement in a CCRC contract concerning
an ownership interest appear in a large-sized font or
print.
3.Clarifies that details of reserves in the provider's
annual report include a description and amount of all
reserves currently designated and maintained.
4.Requires that the provider's annual report disclose funds
accumulated for identified projects or purposes and any
funds maintained or designated for specific
contingencies, but the requirement is not to be construed
to mandate the accumulation of funding of contingencies
nor to alter existing law regarding reserves required to
be maintained.
5.Reduces by half the amount of entrance fee deposits that
applicants for construction of a new CCRC or additional
units must place in escrow to obtain approval to proceed
with a project.
Prior Legislation
According to the Senate Human Services Committee analysis,
a number of bills have been enacted over the past decade
designed to ensure access to relevant information for
prospective residents as well as on-going residents of
CCRCs. The immediate last two bills enacted illustrate the
Legislature's interest in this subject. AB 2550
(Steinberg), Chapter 129, Statutes of 2004, added to the
existing law requiring providers to maintain qualifying
assets as a liquid reserve in an amount equal to or
exceeding the amount required for debt service plus the
operating reserve to increase the operating reserve
required from 45 to 75 days net operating expenses. This
bill also required those CCRCs containing up-front entrance
fees, unlimited health-related services, and little to no
increases in monthly charges to submit studies to the state
every five years documenting that the facility continued to
CONTINUED
SB 1212
Page
4
operate in actuarial balance. Finally, it required all
CCRC providers to annually file a "Key Indicator Report"
containing financial ratios, occupancy rates and liquidity
indicators.
Last year SB 244 (Romero), Chapter 454, Statutes of 2005,
focused on the rights of residents by adding the specific
rights already afforded those seniors who reside in
residential care homes for the elderly, and protected CCRC
residents from undue pressure from providers for donations
or other purchases as a condition of entry into a CCRC. It
also assured more freedom and a broader set of issues to
CCRC resident organizations, allowed for residents to
complain to DSS if certain rights were violated and it drew
explicit parameters and due process around a provider's
ability to move residents within the community. It also
required a series of statements added to the contract to
disclose billing practices, timelines and procedures.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Assembly Appropriations Committee
analysis, costs associated with this bill should be minor
and absorbable.
SUPPORT : (Verified 8/23/06)
California Continuing Care Residents Association (source)
AARP
American Baptist Homes of the West
American Federation of State, County and Municipal
Employees
Association of California Resource Centers
California Advocates for Nursing Home Reform
California Alliance for Retired Americans
California Alliance for Direct Support Professionals
California Association of Homes and Services for the Aging
California Caregiver Resource Centers
California Continuing Care Residents Association
California Long Term Care Ombudsman Association
Erickson Retirement Communities
Front Porch
CONTINUED
SB 1212
Page
5
Gray Panthers
Jewish Home of San Francisco
Masonic Homes of California
National Association of Social Workers
Older Women's League of California
St. Paul's Senior Homes and Services
ARGUMENTS IN SUPPORT : According to the author's office,
"Considering their significant financial interest, it is
important in the oversights of CCRCs that resident voices
receive appropriate attention. It is also important that
transparency and accountability be the foundation of
provider communication with residents on financial
matters."
ASSEMBLY FLOOR :
AYES: Aghazarian, Arambula, Baca, Bass, Benoit, Berg,
Bermudez, Blakeslee, Bogh, Calderon, Canciamilla, Chan,
Chavez, Chu, Cogdill, Cohn, Coto, Daucher, De La Torre,
DeVore, Dymally, Emmerson, Evans, Frommer, Garcia,
Goldberg, Hancock, Haynes, Jerome Horton, Shirley Horton,
Houston, Huff, Jones, Karnette, Keene, Klehs, Koretz, La
Malfa, La Suer, Laird, Leno, Leslie, Levine, Lieber,
Lieu, Liu, Matthews, Maze, McCarthy, Montanez, Mountjoy,
Mullin, Nakanishi, Nation, Nava, Negrete McLeod, Niello,
Oropeza, Parra, Pavley, Plescia, Richman, Ridley-Thomas,
Sharon Runner, Ruskin, Saldana, Salinas, Spitzer,
Strickland, Torrico, Tran, Vargas, Villines, Walters,
Wolk, Wyland, Yee, Nunez
NO VOTE RECORDED: Umberg, Vacancy
CTW:cm 8/27/06 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED