BILL NUMBER: AB 1433	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 12, 2010
	PASSED THE ASSEMBLY  AUGUST 17, 2010
	AMENDED IN SENATE  JUNE 30, 2010
	AMENDED IN SENATE  JUNE 14, 2010
	AMENDED IN ASSEMBLY  JANUARY 4, 2010

INTRODUCED BY   Assembly Members Eng and Beall
   (Coauthors: Senators Calderon and Wolk)

                        FEBRUARY 27, 2009

   An act to amend Sections 1771 and 1788 of, and to add Article 10
(commencing with Section 1793.90) to Chapter 10 of Division 2 of, the
Health and Safety Code, relating to continuing care retirement
communities.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1433, Eng. Continuing care contracts: residential temporary
relocation.
   Existing law contains provisions relating to supervision of
continuing care contracts, including requirements governing
continuing care communities and contracts. Existing law requires the
State Department of Social Services to regulate activity relating to
continuing care contracts, and requires that continuing care
retirement communities maintain an environment that enhances
residents' independence and self-determination and in that regard
imposes various requirements on a care provider. Existing law defines
various terms for purposes of those contracts and requirements, and
imposes specified civil and criminal penalties for violations of
those provisions.
   This bill would define the term "residential temporary relocation"
to mean the relocation of one or more residents, except in the case
of a natural disaster that is out of the provider's control, from one
or more residential living units, assisted living units, skilled
nursing units, or a wing, floor, or entire continuing care retirement
community building, due to a change of use or major repairs or
renovations. The bill would limit residential temporary relocation to
a period of at least 9 months but not to exceed 18 months without
the written agreement of the resident.
   This bill would require continuing care contracts to state that
the resident has a right to terminate his or her contract after 18
months of residential temporary relocation, as defined, and set forth
provisions for refunds due to cancellation for this reason.
   This bill would require providers to include in resident contracts
the procedures to be followed to ensure that residential temporary
relocations provide comparable levels of care, service, and living
accommodations. The bill would also specify procedures to be taken
for residential temporary relocation, return to the unit vacated, and
the extension of residential temporary relocation.
   Because this bill would change the definition of a crime, it would
impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1771 of the Health and Safety Code is amended
to read:
   1771.  Unless the context otherwise requires, the definitions in
this section govern the interpretation of this chapter.
   (a) (1) "Affiliate" means any person, corporation, limited
liability company, business trust, trust, partnership, unincorporated
association, or other legal entity that directly or indirectly
controls, is controlled by, or is under common control with, a
provider or applicant.
   (2) "Affinity group" means a grouping of entities sharing a common
interest, philosophy, or connection (e.g., military officers,
religion).
   (3) "Annual report" means the report each provider is required to
file annually with the department, as described in Section 1790.
   (4) "Applicant" means any entity, or combination of entities, that
submits and has pending an application to the department for a
permit to accept deposits and a certificate of authority.
   (5) "Assisted living services" includes, but is not limited to,
assistance with personal activities of daily living, including
dressing, feeding, toileting, bathing, grooming, mobility, and
associated tasks, to help provide for and maintain physical and
psychosocial comfort.
   (6) "Assisted living unit" means the living area or unit within a
continuing care retirement community that is specifically designed to
provide ongoing assisted living services.
   (7) "Audited financial statement" means financial statements
prepared in accordance with generally accepted accounting principles
including the opinion of an independent certified public accountant,
and notes to the financial statements considered customary or
necessary to provide full disclosure and complete information
regarding the provider's financial statements, financial condition,
and operation.
   (b) (reserved)
   (c) (1) "Cancel" means to destroy the force and effect of an
agreement or continuing care contract.
   (2) "Cancellation period" means the 90-day period, beginning when
the resident physically moves into the continuing care retirement
community, during which the resident may cancel the continuing care
contract, as provided in Section 1788.2.
   (3) "Care" means nursing, medical, or other health-related
services, protection or supervision, assistance with the personal
activities of daily living, or any combination of those services.
   (4) "Cash equivalent" means certificates of deposit and United
States treasury securities with a maturity of five years or less.
   (5) "Certificate" or "certificate of authority" means the
certificate issued by the department, properly executed and bearing
the State Seal, authorizing a specified provider to enter into one or
more continuing care contracts at a single specified continuing care
retirement community.
   (6) "Condition" means a restriction, specific action, or other
requirement imposed by the department for the initial or continuing
validity of a permit to accept deposits, a provisional certificate of
authority, or a certificate of authority. A condition may limit the
circumstances under which the provider may enter into any new deposit
agreement or contract, or may be imposed as a condition precedent to
the issuance of a permit to accept deposits, a provisional
certificate of authority, or a certificate of authority.
   (7) "Consideration" means some right, interest, profit, or benefit
paid, transferred, promised, or provided by one party to another as
an inducement to contract. Consideration includes some forbearance,
detriment, loss, or responsibility, that is given, suffered, or
undertaken by a party as an inducement to another party to contract.
   (8) "Continuing care contract" means a contract that includes a
continuing care promise made, in exchange for an entrance fee, the
payment of periodic charges, or both types of payments. A continuing
care contract may consist of one agreement or a series of agreements
and other writings incorporated by reference.
   (9) "Continuing care advisory committee" means an advisory panel
appointed pursuant to Section 1777.
   (10) "Continuing care promise" means a promise, expressed or
implied, by a provider to provide one or more elements of care to an
elderly resident for the duration of his or her life or for a term in
excess of one year. Any such promise or representation, whether part
of a continuing care contract, other agreement, or series of
agreements, or contained in any advertisement, brochure, or other
material, either written or oral, is a continuing care promise.
   (11) "Continuing care retirement community" means a facility
located within the State of California where services promised in a
continuing care contract are provided. A distinct phase of
development approved by the department may be considered to be the
continuing care retirement community when a project is being
developed in successive distinct phases over a period of time. When
the services are provided in residents' own homes, the homes into
which the provider takes those services are considered part of the
continuing care retirement community.
   (12) "Control" means directing or causing the direction of the
financial management or the policies of another entity, including an
operator of a continuing care retirement community, whether by means
of the controlling entity's ownership interest, contract, or any
other involvement. A parent entity or sole member of an entity
controls a subsidiary entity provider for a continuing care
retirement community if its officers, directors, or agents directly
participate in the management of the subsidiary entity or in the
initiation or approval of policies that affect the continuing care
retirement community's operations, including, but not limited to,
approving budgets or the administrator for a continuing care
retirement community.
   (d) (1) "Department" means the State Department of Social
Services.
   (2) "Deposit" means any transfer of consideration, including a
promise to transfer money or property, made by a depositor to any
entity that promises or proposes to promise to provide continuing
care, but is not authorized to enter into a continuing care contract
with the potential depositor.
   (3) "Deposit agreement" means any agreement made between any
entity accepting a deposit and a depositor. Deposit agreements for
deposits received by an applicant prior to the department's release
of funds from the deposit escrow account shall be subject to the
requirements described in Section 1780.4.
   (4) "Depository" means a bank or institution that is a member of
the Federal Deposit Insurance Corporation or a comparable deposit
insurance program.
   (5) "Depositor" means any prospective resident who pays a deposit.
Where any portion of the consideration transferred to an applicant
as a deposit or to a provider as consideration for a continuing care
contract is transferred by a person other than the prospective
resident or a resident, that third-party transferor shall have the
same cancellation or refund rights as the prospective resident or
resident for whose benefit the consideration was transferred.
   (6) "Director" means the Director of Social Services.
   (e) (1) "Elderly" means an individual who is 60 years of age or
older.
   (2) "Entity" means an individual, partnership, corporation,
limited liability company, and any other form for doing business.
Entity includes a person, sole proprietorship, estate, trust,
association, and joint venture.
   (3) "Entrance fee" means the sum of any initial, amortized, or
deferred transfer of consideration made or promised to be made by, or
on behalf of, a person entering into a continuing care contract for
the purpose of ensuring care or related services pursuant to that
continuing care contract or as full or partial payment for the
promise to provide care for the term of the continuing care contract.
Entrance fee includes the purchase price of a condominium,
cooperative, or other interest sold in connection with a promise of
continuing care. An initial, amortized, or deferred transfer of
consideration that is greater in value than 12 times the monthly care
fee shall be presumed to be an entrance fee.
   (4) "Equity" means the value of real property in excess of the
aggregate amount of all liabilities secured by the property.
   (5) "Equity interest" means an interest held by a resident in a
continuing care retirement community that consists of either an
ownership interest in any part of the continuing care retirement
community property or a transferable membership that entitles the
holder to reside at the continuing care retirement community.
   (6) "Equity project" means a continuing care retirement community
where residents receive an equity interest in the continuing care
retirement community property.
   (7) "Equity securities" shall refer generally to large and
midcapitalization corporate stocks that are publicly traded and
readily liquidated for cash, and shall include shares in mutual funds
that hold portfolios consisting predominantly of these stocks and
other qualifying assets, as defined by Section 1792.2. Equity
securities shall also include other similar securities that are
specifically approved by the department.
   (8) "Escrow agent" means a bank or institution, including, but not
limited to, a title insurance company, approved by the department to
hold and render accountings for deposits of cash or cash
equivalents.
   (f) "Facility" means any place or accommodation where a provider
provides or will provide a resident with care or related services,
whether or not the place or accommodation is constructed, owned,
leased, rented, or otherwise contracted for by the provider.
   (g) (reserved)
   (h) (reserved)
   (i) (1) "Inactive certificate of authority" means a certificate
that has been terminated under Section 1793.8.
   (2) "Investment securities" means any of the following:
   (A) Direct obligations of the United States, including obligations
issued or held in book-entry form on the books of the United States
Department of the Treasury or obligations the timely payment of the
principal of, and the interest on, which are fully guaranteed by the
United States.
   (B) Obligations, debentures, notes, or other evidences of
indebtedness issued or guaranteed by any of the following:
   (i) The Federal Home Loan Bank System.
   (ii) The Export-Import Bank of the United States.
   (iii) The Federal Financing Bank.
   (iv) The Government National Mortgage Association.
   (v) The Farmer's Home Administration.
   (vi) The Federal Home Loan Mortgage Corporation of the Federal
Housing Administration.
   (vii) Any agency, department, or other instrumentality of the
United States if the obligations are rated in one of the two highest
rating categories of each rating agency rating those obligations.
   (C) Bonds of the State of California or of any county, city and
county, or city in this state, if rated in one of the two highest
rating categories of each rating agency rating those bonds.
   (D) Commercial paper of finance companies and banking institutions
rated in one of the two highest categories of each rating agency
rating those instruments.
   (E) Repurchase agreements fully secured by collateral security
described in subparagraph (A) or (B), as evidenced by an opinion of
counsel, if the collateral is held by the provider or a third party
during the term of the repurchase agreement, pursuant to the terms of
the agreement, subject to liens or claims of third parties, and has
a market value, which is determined at least every 14 days, at least
equal to the amount so invested.
   (F) Long-term investment agreements, which have maturity dates in
excess of one year, with financial institutions, including, but not
limited to, banks and insurance companies or their affiliates, if the
financial institution's paying ability for debt obligations or
long-term claims or the paying ability of a related guarantor of the
financial institution for these obligations or claims, is rated in
one of the two highest rating categories of each rating agency rating
those instruments, or if the short-term investment agreements are
with the financial institution or the related guarantor of the
financial institution, the long-term or short-term debt obligations,
whichever is applicable, of which are rated in one of the two highest
long-term or short-term rating categories, of each rating agency
rating the bonds of the financial institution or the related
guarantor, provided that if the rating falls below the two highest
rating categories, the investment agreement shall allow the provider
the option to replace the financial institution or the related
guarantor of the financial institution or shall provide for the
investment securities to be fully collateralized by investments
described in subparagraph (A), and, provided further, if so
collateralized, that the provider has a perfected first security lien
on the collateral, as evidenced by an opinion of counsel and the
collateral is held by the provider.
   (G) Banker's acceptances or certificates of deposit of, or time
deposits in, any savings and loan association that meets any of the
following criteria:
   (i) The debt obligations of the savings and loan association, or
in the case of a principal bank, of the bank holding company, are
rated in one of the two highest rating categories of each rating
agency rating those instruments.
   (ii) The certificates of deposit or time deposits are fully
insured by the Federal Deposit Insurance Corporation.
   (iii) The certificates of deposit or time deposits are secured at
all times, in the manner and to the extent provided by law, by
collateral security described in subparagraph (A) or (B) with a
market value, valued at least quarterly, of no less than the original
amount of moneys so invested.
   (H) Taxable money market government portfolios restricted to
obligations issued or guaranteed as to payment of principal and
interest by the full faith and credit of the United States.
   (I) Obligations the interest on which is excluded from gross
income for federal income tax purposes and money market mutual funds
whose portfolios are restricted to these obligations, if the
obligations or mutual funds are rated in one of the two highest
rating categories by each rating agency rating those obligations.
   (J) Bonds that are not issued by the United States or any federal
agency, but that are listed on a national exchange and that are rated
at least "A" by Moody's Investors Service, or the equivalent rating
by Standard and Poor's Corporation or Fitch Investors Service.
   (K) Bonds not listed on a national exchange that are traded on an
over-the-counter basis, and that are rated at least "Aa" by Moody's
Investors Service or "AA" by Standard and Poor's Corporation or Fitch
Investors Service.
   (j) (reserved)
   (k) (reserved)
   (l) "Life care contract" means a continuing care contract that
includes a promise, expressed or implied, by a provider to provide or
pay for routine services at all levels of care, including acute care
and the services of physicians and surgeons, to the extent not
covered by other public or private insurance benefits, to a resident
for the duration of his or her life. Care shall be provided under a
life care contract in a continuing care retirement community having a
comprehensive continuum of care, including a skilled nursing
facility, under the ownership and supervision of the provider on or
adjacent to the premises. No change may be made in the monthly fee
based on level of care. A life care contract shall also include
provisions to subsidize residents who become financially unable to
pay their monthly care fees.
   (m) (1) "Monthly care fee" means the fee charged to a resident in
a continuing care contract on a monthly or other periodic basis for
current accommodations and services including care, board, or
lodging. Periodic entrance fee payments or other prepayments shall
not be monthly care fees.
   (2) "Monthly fee contract" means a continuing care contract that
requires residents to pay monthly care fees.
   (n) "Nonambulatory person" means a person who is unable to leave a
building unassisted under emergency conditions in the manner
described by Section 13131.
   (o) (reserved)
   (p) (1) "Per capita cost" means a continuing care retirement
community's operating expenses, excluding depreciation, divided by
the average number of residents.
   (2) "Periodic charges" means fees paid by a resident on a periodic
basis.
   (3) "Permanent closure" means the voluntary or involuntary
termination or forfeiture, as specified in subdivisions (a), (b),
(g), (h), and (i) of Section 1793.7, of a provider's certificate of
authority or license, or another action that results in the permanent
relocation of residents. Permanent closure does not apply in the
case of a natural disaster or other event out of the provider's
control.
   (4) "Permit to accept deposits" means a written authorization by
the department permitting an applicant to enter into deposit
agreements regarding a single specified continuing care retirement
community.
   (5) "Prepaid contract" means a continuing care contract in which
the monthly care fee, if any, may not be adjusted to cover the actual
cost of care and services.
   (6) "Preferred access" means that residents who have previously
occupied a residential living unit have a right over other persons to
any assisted living or skilled nursing beds that are available at
the community.
   (7) "Processing fee" means a payment to cover administrative costs
of processing the application of a depositor or prospective
resident.
   (8) "Promise to provide one or more elements of care" means any
expressed or implied representation that one or more elements of care
will be provided or will be available, such as by preferred access.
   (9) "Proposes" means a representation that an applicant or
provider will or intends to make a future promise to provide care,
including a promise that is subject to a condition, such as the
construction of a continuing care retirement community or the
acquisition of a certificate of authority.
   (10) "Provider" means an entity that provides continuing care,
makes a continuing care promise, or proposes to promise to provide
continuing care. "Provider" also includes any entity that controls an
entity that provides continuing care, makes a continuing care
promise, or proposes to promise to provide continuing care. The
department shall determine whether an entity controls another entity
for purposes of this article. No homeowner's association,
cooperative, or condominium association may be a provider.
   (11) "Provisional certificate of authority" means the certificate
issued by the department, properly executed and bearing the State
Seal, under Section 1786. A provisional certificate of authority
shall be limited to the specific continuing care retirement community
and number of units identified in the applicant's application.
   (q) (reserved)
   (r) (1) "Refund reserve" means the reserve a provider is required
to maintain, as provided in Section 1792.6.
   (2) "Refundable contract" means a continuing care contract that
includes a promise, expressed or implied, by the provider to pay an
entrance fee refund or to repurchase the transferor's unit,
membership, stock, or other interest in the continuing care
retirement community when the promise to refund some or all of the
initial entrance fee extends beyond the resident's sixth year of
residency. Providers that enter into refundable contracts shall be
subject to the refund reserve requirements of Section 1792.6. A
continuing care contract that includes a promise to repay all or a
portion of an entrance fee that is conditioned upon reoccupancy or
resale of the unit previously occupied by the resident shall not be
considered a refundable contract for purposes of the refund reserve
requirements of Section 1792.6, provided that this conditional
promise of repayment is not referred to by the applicant or provider
as a "refund."
   (3) "Resale fee" means a levy by the provider against the proceeds
from the sale of a transferor's equity interest.
   (4) "Reservation fee" refers to consideration collected by an
entity that has made a continuing care promise or is proposing to
make this promise and has complied with Section 1771.4.
   (5) "Resident" means a person who enters into a continuing care
contract with a provider, or who is designated in a continuing care
contract to be a person being provided or to be provided services,
including care, board, or lodging.
   (6) "Residential care facility for the elderly" means a housing
arrangement as defined by Section 1569.2.
   (7) "Residential living unit" means a living unit in a continuing
care retirement community that is not used exclusively for assisted
living services or nursing services.
   (8) "Residential temporary relocation" means the relocation of one
or more residents, except in the case of a natural disaster that is
out of the provider's control, from one or more residential living
units, assisted living units, skilled nursing units, or a wing,
floor, or entire continuing care retirement community building, due
to a change of use or major repairs or renovations. A residential
temporary relocation shall mean a relocation pursuant to this
subdivision that lasts for a period of at least nine months but that
does not exceed 18 months without the written agreement of the
resident.
   (s) (reserved)
   (t) (1) "Termination" means the ending of a continuing care
contract as provided for in the terms of the continuing care
contract.
   (2) "Transfer trauma" means death, depression, or regressive
behavior, that is caused by the abrupt and involuntary transfer of an
elderly resident from one home to another and results from a loss of
familiar physical environment, loss of well-known neighbors,
attendants, nurses and medical personnel, the stress of an abrupt
break in the small routines of daily life, or the loss of visits from
friends and relatives who may be unable to reach the new facility.
   (3) "Transferor" means a person who transfers, or promises to
transfer, consideration in exchange for care and related services
under a continuing care contract or proposed continuing care
contract, for the benefit of another. A transferor shall have the
same rights to cancel and obtain a refund as the depositor under the
deposit agreement or the resident under a continuing care contract.
  SEC. 2.  Section 1788 of the Health and Safety Code is amended to
read:
   1788.  (a) A continuing care contract shall contain all of the
following:
   (1) The legal name and address of each provider.
   (2) The name and address of the continuing care retirement
community.
   (3) The resident's name and the identity of the unit the resident
will occupy.
   (4) If there is a transferor other than the resident, the
transferor shall be a party to the contract and the transferor's name
and address shall be specified.
   (5) If the provider has used the name of any charitable or
religious or nonprofit organization in its title before January 1,
1979, and continues to use that name, and that organization is not
responsible for the financial and contractual obligations of the
provider or the obligations specified in the continuing care
contract, the provider shall include in every continuing care
contract a conspicuous statement that clearly informs the resident
that the organization is not financially responsible.
   (6) The date the continuing care contract is signed by the
resident and, where applicable, any other transferor.
   (7) The duration of the continuing care contract.
   (8) A list of the services that will be made available to the
resident as required to provide the appropriate level of care. The
list of services shall include the services required as a condition
for licensure as a residential care facility for the elderly,
including all of the following:
   (A) Regular observation of the resident's health status to ensure
that his or her dietary needs, social needs, and needs for special
services are satisfied.
   (B) Safe and healthful living accommodations, including
housekeeping services and utilities.
   (C) Maintenance of house rules for the protection of residents.
   (D) A planned activities program, which includes social and
recreational activities appropriate to the interests and capabilities
of the resident.
   (E) Three balanced, nutritious meals and snacks made available
daily, including special diets prescribed by a physician as a medical
necessity.
   (F) Assisted living services.
   (G) Assistance with taking medications.
   (H) Central storing and distribution of medications.
   (I) Arrangements to meet health needs, including arranging
transportation.
   (9) An itemization of the services that are included in the
monthly fee and the services that are available at an extra charge.
The provider shall attach a current fee schedule to the continuing
care contract.
   (10) The procedures and conditions under which a resident may be
voluntarily and involuntarily transferred from a designated living
unit. The transfer procedures, at a minimum, shall include provisions
addressing all of the following circumstances under which a transfer
may be authorized:
   (A) A continuing care retirement community may transfer a resident
under the following conditions, taking into account the
appropriateness and necessity of the transfer and the goal of
promoting resident independence:
   (i) The resident is nonambulatory. The definition of
"nonambulatory," as provided in Section 13131, shall either be stated
in full in the continuing care contract or be cited. If Section
13131 is cited, a copy of the statute shall be made available to the
resident, either as an attachment to the continuing care contract or
by specifying that it will be provided upon request. If a
nonambulatory resident occupies a room that has a fire clearance for
nonambulatory residence, transfer shall not be necessary.
   (ii) The resident develops a physical or mental condition that
endangers the health, safety, or well-being of the resident or
another person.
   (iii) The resident's condition or needs require the resident's
transfer to an assisted living care unit or skilled nursing facility,
because the level of care required by the resident exceeds that
which may be lawfully provided in the living unit.
   (iv) The resident's condition or needs require the resident's
transfer to a nursing facility, hospital, or other facility, and the
provider has no facilities available to provide that level of care.
   (B) Before the continuing care retirement community transfers a
resident under any of the conditions set forth in subparagraph (A),
the                                             community shall
satisfy all of the following requirements:
   (i) Involve the resident and the resident's responsible person, as
defined in paragraph (6) of subdivision (r) of Section 87101 of
Title 22 of the California Code of Regulations, and upon the resident'
s or responsible person's request, family members, or the resident's
physician or other appropriate health professional, in the assessment
process that forms the basis for the level of care transfer decision
by the provider. The provider shall offer an explanation of the
assessment process. If an assessment tool or tools, including scoring
and evaluating criteria, are used in the determination of the
appropriateness of the transfer, the provider shall make copies of
the completed assessment available upon the request of the resident
or the resident's responsible person.
   (ii) Prior to sending a formal notification of transfer, the
provider shall conduct a care conference with the resident and the
resident's responsible person, and upon the resident's or responsible
person's request, family members, and the resident's health care
professionals, to explain the reasons for transfer.
   (iii) Notify the resident and the resident's responsible person of
the reasons for the transfer in writing.
   (iv) Notwithstanding any other provision of this subparagraph, if
the resident does not have impairment of cognitive abilities, the
resident may request that his or her responsible person not be
involved in the transfer process.
   (v) The notice of transfer shall be made at least 30 days before
the transfer is expected to occur, except when the health or safety
of the resident or other residents is in danger, or the transfer is
required by the resident's urgent medical needs. Under those
circumstances, the written notice shall be made as soon as
practicable before the transfer.
   (vi) The written notice shall contain the reasons for the
transfer, the effective date, the designated level of care or
location to which the resident will be transferred, a statement of
the resident's right to a review of the transfer decision at a care
conference, as provided for in subparagraph (C), and for disputed
transfer decisions, the right to review by the Continuing Care
Contracts Branch of the State Department of Social Services, as
provided for in subparagraph (D). The notice shall also contain the
name, address, and telephone number of the department's Continuing
Care Contracts Branch.
   (vii) The continuing care retirement community shall provide
sufficient preparation and orientation to the resident to ensure a
safe and orderly transfer and to minimize trauma.
   (C) The resident has the right to review the transfer decision at
a subsequent care conference that shall include the resident, the
resident's responsible person, and upon the resident's or responsible
person's request, family members, the resident's physician or other
appropriate health care professional, and members of the provider's
interdisciplinary team. The local ombudsperson may also be included
in the care conference, upon the request of the resident, the
resident's responsible person, or the provider.
   (D) For disputed transfer decisions, the resident or the resident'
s responsible person has the right to a prompt and timely review of
the transfer process by the Continuing Care Contracts Branch of the
State Department of Social Services.
   (E) The decision of the department's Continuing Care Contracts
Branch shall be in writing and shall determine whether the provider
failed to comply with the transfer process pursuant to subparagraphs
(A) to (C), inclusive. Pending the decision of the Continuing Care
Contracts Branch, the provider shall specify any additional care the
provider believes is necessary in order for the resident to remain in
his or her unit. The resident may be required to pay for the extra
care, as provided in the contract.
   (F) Transfer of a second resident when a shared accommodation
arrangement is terminated.
   (11) Provisions describing any changes in the resident's monthly
fee and any changes in the entrance fee refund payable to the
resident that will occur if the resident transfers from any unit,
including, but not limited to, terminating his or her contract after
18 months of residential temporary relocation, as defined in
paragraph (8) of subdivision (r) of Section 1771.
   (12) The provider's continuing obligations, if any, in the event a
resident is transferred from the continuing care retirement
community to another facility.
   (13) The provider's obligations, if any, to resume care upon the
resident's return after a transfer from the continuing care
retirement community.
   (14) The provider's obligations to provide services to the
resident while the resident is absent from the continuing care
retirement community.
   (15) The conditions under which the resident must permanently
release his or her living unit.
   (16) If real or personal properties are transferred in lieu of
cash, a statement specifying each item's value at the time of
transfer, and how the value was ascertained.
   (A) An itemized receipt that includes the information described
above is acceptable if incorporated as a part of the continuing care
contract.
   (B) When real property is or will be transferred, the continuing
care contract shall include a statement that the deed or other
instrument of conveyance shall specify that the real property is
conveyed pursuant to a continuing care contract and may be subject to
rescission by the transferor within 90 days from the date that the
resident first occupies the residential unit.
   (C) The failure to comply with paragraph (16) shall not affect the
validity of title to real property transferred pursuant to this
chapter.
   (17) The amount of the entrance fee.
   (18) In the event two parties have jointly paid the entrance fee
or other payment that allows them to occupy the unit, the continuing
care contract shall describe how any refund of entrance fees is
allocated.
   (19) The amount of any processing fee.
   (20) The amount of any monthly care fee.
   (21) For continuing care contracts that require a monthly care fee
or other periodic payment, the continuing care contract shall
include the following:
   (A) A statement that the occupancy and use of the accommodations
by the resident is contingent upon the regular payment of the fee.
   (B) The regular rate of payment agreed upon (per day, week, or
month).
   (C) A provision specifying whether payment will be made in advance
or after services have been provided.
   (D) A provision specifying the provider will adjust monthly care
fees for the resident's support, maintenance, board, or lodging, when
a resident requires medical attention while away from the continuing
care retirement community.
   (E) A provision specifying whether a credit or allowance will be
given to a resident who is absent from the continuing care retirement
community or from meals. This provision shall also state, when
applicable, that the credit may be permitted at the discretion or by
special permission of the provider.
   (F) A statement of billing practices, procedures, and timelines. A
provider shall allow a minimum of 14 days between the date a bill is
sent and the date payment is due. A charge for a late payment may
only be assessed if the amount and any condition for the penalty is
stated on the bill.
   (22) All continuing care contracts that include monthly care fees
shall address changes in monthly care fees by including either of the
following provisions:
   (A) For prepaid continuing care contracts, which include monthly
care fees, one of the following methods:
   (i) Fees shall not be subject to change during the lifetime of the
agreement.
   (ii) Fees shall not be increased by more than a specified number
of dollars in any one year and not more than a specified number of
dollars during the lifetime of the agreement.
   (iii) Fees shall not be increased in excess of a specified
percentage over the preceding year and not more than a specified
percentage during the lifetime of the agreement.
   (B) For monthly fee continuing care contracts, except prepaid
contracts, changes in monthly care fees shall be based on projected
costs, prior year per capita costs, and economic indicators.
   (23) A provision requiring that the provider give written notice
to the resident at least 30 days in advance of any change in the
resident's monthly care fees or in the price or scope of any
component of care or other services.
   (24) A provision indicating whether the resident's rights under
the continuing care contract include any proprietary interests in the
assets of the provider or in the continuing care retirement
community, or both. Any statement in a contract concerning an
ownership interest shall appear in a large-sized font or print.
   (25) If the continuing care retirement community property is
encumbered by a security interest that is senior to any claims the
residents may have to enforce continuing care contracts, a provision
shall advise the residents that any claims they may have under the
continuing care contract are subordinate to the rights of the secured
lender. For equity projects, the continuing care contract shall
specify the type and extent of the equity interest and whether any
entity holds a security interest.
   (26) Notice that the living units are part of a continuing care
retirement community that is licensed as a residential care facility
for the elderly and, as a result, any duly authorized agent of the
department may, upon proper identification and upon stating the
purpose of his or her visit, enter and inspect the entire premises at
any time, without advance notice.
   (27) A conspicuous statement, in at least 10-point boldface type
in immediate proximity to the space reserved for the signatures of
the resident and, if applicable, the transferor, that provides as
follows: "You, the resident or transferor, may cancel the transaction
without cause at any time within 90 days from the date you first
occupy your living unit. See the attached notice of cancellation form
for an explanation of this right."
   (28) Notice that during the cancellation period, the continuing
care contract may be canceled upon 30 days' written notice by the
provider without cause, or that the provider waives this right.
   (29) The terms and conditions under which the continuing care
contract may be terminated after the cancellation period by either
party, including any health or financial conditions.
   (30) A statement that, after the cancellation period, a provider
may unilaterally terminate the continuing care contract only if the
provider has good and sufficient cause.
   (A) Any continuing care contract containing a clause that provides
for a continuing care contract to be terminated for "just cause,"
"good cause," or other similar provision, shall also include a
provision that none of the following activities by the resident, or
on behalf of the resident, constitutes "just cause," "good cause," or
otherwise activates the termination provision:
   (i) Filing or lodging a formal complaint with the department or
other appropriate authority.
   (ii) Participation in an organization or affiliation of residents,
or other similar lawful activity.
   (B) The provision required by this paragraph shall also state that
the provider shall not discriminate or retaliate in any manner
against any resident of a continuing care retirement community for
contacting the department, or any other state, county, or city
agency, or any elected or appointed government official to file a
complaint or for any other reason, or for participation in a
residents' organization or association.
   (C) Nothing in this paragraph diminishes the provider's ability to
terminate the continuing care contract for good and sufficient
cause.
   (31) A statement that at least 90 days' written notice to the
resident is required for a unilateral termination of the continuing
care contract by the provider.
   (32) A statement concerning the length of notice that a resident
is required to give the provider to voluntarily terminate the
continuing care contract after the cancellation period.
   (33) The policy or terms for refunding any portion of the entrance
fee, in the event of cancellation, termination, or death. Every
continuing care contract that provides for a refund of all or a part
of the entrance fee shall also do all of the following:
   (A) Specify the amount, if any, the resident has paid or will pay
for upgrades, special features, or modifications to the resident's
unit.
   (B) State that if the continuing care contract is canceled or
terminated by the provider, the provider shall do both of the
following:
   (i) Amortize the specified amount at the same rate as the resident'
s entrance fee.
   (ii) Refund the unamortized balance to the resident at the same
time the provider pays the resident's entrance fee refund.
   (C) State that the resident has a right to terminate his or her
contract after 18 months of residential temporary relocation, as
defined in paragraph (8) of subdivision (r) of Section 1771.
Provisions for refunds due to cancellation pursuant to this
subparagraph shall be set forth in the contract.
   (34) The following notice at the bottom of the signatory page:
                 ""NOTICE''               (date)


   This is a continuing care contract as defined by paragraph (8) of
subdivision (c), or subdivision (  l  ) of Section 1771 of
the California Health and Safety Code. This continuing care contract
form has been approved by the State Department of Social Services as
required by subdivision (b) of Section 1787 of the California Health
and Safety Code. The basis for this approval was a determination that
(provider name) has submitted a contract that complies with the
minimum statutory requirements applicable to continuing care
contracts. The department does not approve or disapprove any of the
financial or health care coverage provisions in this contract.
Approval by the department is NOT a guaranty of performance or an
endorsement of any continuing care contract provisions. Prospective
transferors and residents are strongly encouraged to carefully
consider the benefits and risks of this continuing care contract and
to seek financial and legal advice before signing.
   (35) The provider may not attempt to absolve itself in the
continuing care contract from liability for its negligence by any
statement to that effect, and shall include the following statement
in the contract: "Nothing in this continuing care contract limits
either the provider's obligation to provide adequate care and
supervision for the resident or any liability on the part of the
provider which may result from the provider's failure to provide this
care and supervision."
   (36) Provisions describing how the provider will proceed in the
event of a closure, including an explanation of how the provider will
comply with Sections 1793.80, 1793.81, 1793.82, and 1793.83.
   (b) A life care contract shall also provide that:
   (1) All levels of care, including acute care and physicians' and
surgeons' services will be provided to a resident.
   (2) Care will be provided for the duration of the resident's life
unless the life care contract is canceled or terminated by the
provider during the cancellation period or after the cancellation
period for good cause.
   (3) A comprehensive continuum of care will be provided to the
resident, including skilled nursing, in a facility under the
ownership and supervision of the provider on, or adjacent to, the
continuing care retirement community premises.
   (4) Monthly care fees will not be changed based on the resident's
level of care or service.
   (5) A resident who becomes financially unable to pay his or her
monthly care fees shall be subsidized provided the resident's
financial need does not arise from action by the resident to divest
the resident of his or her assets.
   (c) Continuing care contracts may include provisions that do any
of the following:
   (1) Subsidize a resident who becomes financially unable to pay for
his or her monthly care fees at some future date. If a continuing
care contract provides for subsidizing a resident, it may also
provide for any of the following:
   (A) The resident shall apply for any public assistance or other
aid for which he or she is eligible and that the provider may apply
for assistance on behalf of the resident.
   (B) The provider's decision shall be final and conclusive
regarding any adjustments to be made or any action to be taken
regarding any charitable consideration extended to any of its
residents.
   (C) The provider is entitled to payment for the actual costs of
care out of any property acquired by the resident subsequent to any
adjustment extended to the resident under paragraph (1), or from any
other property of the resident that the resident failed to disclose.
   (D) The provider may pay the monthly premium of the resident's
health insurance coverage under Medicare to ensure that those
payments will be made.
   (E) The provider may receive an assignment from the resident of
the right to apply for and to receive the benefits, for and on behalf
of the resident.
   (F) The provider is not responsible for the costs of furnishing
the resident with any services, supplies, and medication, when
reimbursement is reasonably available from any governmental agency,
or any private insurance.
   (G) Any refund due to the resident at the termination of the
continuing care contract may be offset by any prior subsidy to the
resident by the provider.
   (2) Limit responsibility for costs associated with the treatment
or medication of an ailment or illness existing prior to the date of
admission. In these cases, the medical or surgical exceptions, as
disclosed by the medical entrance examination, shall be listed in the
continuing care contract or in a medical report attached to and made
a part of the continuing care contract.
   (3) Identify legal remedies that may be available to the provider
if the resident makes any material misrepresentation or omission
pertaining to the resident's assets or health.
   (4) Restrict transfer or assignments of the resident's rights and
privileges under a continuing care contract due to the personal
nature of the continuing care contract.
   (5) Protect the provider's ability to waive a resident's breach of
the terms or provisions of the continuing care contract in specific
instances without relinquishing its right to insist upon full
compliance by the resident with all terms or provisions in the
contract.
   (6) Provide that the resident shall reimburse the provider for any
uninsured loss or damage to the resident's unit, beyond normal wear
and tear, resulting from the resident's carelessness or negligence.
   (7) Provide that the resident agrees to observe the off-limit
areas of the continuing care retirement community designated by the
provider for safety reasons. The provider may not include any
provision in a continuing care contract that absolves the provider
from liability for its negligence.
   (8) Provide for the subrogation to the provider of the resident's
rights in the case of injury to a resident caused by the acts or
omissions of a third party, or for the assignment of the resident's
recovery or benefits in this case to the provider, to the extent of
the value of the goods and services furnished by the provider to or
on behalf of the resident as a result of the injury.
   (9) Provide for a lien on any judgment, settlement, or recovery
for any additional expense incurred by the provider in caring for the
resident as a result of injury.
   (10) Require the resident's cooperation and assistance in the
diligent prosecution of any claim or action against any third party.
   (11) Provide for the appointment of a conservator or guardian by a
court with jurisdiction in the event a resident becomes unable to
handle his or her personal or financial affairs.
   (12) Allow a provider, whose property is tax exempt, to charge the
resident, on a pro rata basis, property taxes, or in-lieu taxes,
that the provider is required to pay.
   (13) Make any other provision approved by the department.
   (d) A copy of the resident's rights as described in Section 1771.7
shall be attached to every continuing care contract.
   (e) A copy of the current audited financial statement of the
provider shall be attached to every continuing care contract. For a
provider whose current audited financial statement does not
accurately reflect the financial ability of the provider to fulfill
the continuing care contract obligations, the financial statement
attached to the continuing care contract shall include all of the
following:
   (1) A disclosure that the reserve requirement has not yet been
determined or met, and that entrance fees will not be held in escrow.

   (2) A disclosure that the ability to provide the services promised
in the continuing care contract will depend on successful compliance
with the approved financial plan.
   (3) A copy of the approved financial plan for meeting the reserve
requirements.
   (4) Any other supplemental statements or attachments necessary to
accurately represent the provider's financial ability to fulfill its
continuing care contract obligations.
   (f) A schedule of the average monthly care fees charged to
residents for each type of residential living unit for each of the
five years preceding execution of the continuing care contract shall
be attached to every continuing care contract. The provider shall
update this schedule annually at the end of each fiscal year. If the
continuing care retirement community has not been in existence for
five years, the information shall be provided for each of the years
the continuing care retirement community has been in existence.
   (g) If any continuing care contract provides for a health
insurance policy for the benefit of the resident, the provider shall
attach to the continuing care contract a binder complying with
Sections 382 and 382.5 of the Insurance Code.
   (h) The provider shall attach to every continuing care contract a
completed form in duplicate, captioned "Notice of Cancellation." The
notice shall be easily detachable, and shall contain, in at least
10-point boldface type, the following statement:
       ""NOTICE OF CANCELLATION''          (date)
Your first date of occupancy under this contract
is: _____________________________________________


   "You may cancel this transaction, without any penalty within 90
calendar days from the above date.
   If you cancel, any property transferred, any payments made by you
under the contract, and any negotiable instrument executed by you
will be returned within 14 calendar days after making possession of
the living unit available to the provider. Any security interest
arising out of the transaction will be canceled.
   If you cancel, you are obligated to pay a reasonable processing
fee to cover costs and to pay for the reasonable value of the
services received by you from the provider up to the date you
canceled or made available to the provider the possession of any
living unit delivered to you under this contract, whichever is later.

   If you cancel, you must return possession of any living unit
delivered to you under this contract to the provider in substantially
the same condition as when you took possession.
   Possession of the living unit must be made available to the
provider within 20 calendar days of your notice of cancellation. If
you fail to make the possession of any living unit available to the
provider, then you remain liable for performance of all obligations
under the contract.
   To cancel this transaction, mail or deliver a signed and dated
copy of this cancellation notice, or any other written notice, or
send a telegram
to
                 (Name of provider)
at
     (Address of provider's place of business)
not later than midnight of _____________ (date).
I hereby cancel
this                    _________________________
transaction
                                 (Resident
                                     or
                         Transferor's signature)''


  SEC. 3.  Article 10 (commencing with Section 1793.90) is added to
Chapter 10 of Division 2 of the Health and Safety Code, to read:

      Article 10.  Temporary Relocation of Residents


   1793.90.  (a) All providers shall include in resident contracts
the procedures to be followed to ensure that residential temporary
relocations provide comparable levels of care, services, and living
accommodations as described in the resident's contract.
   (b) The provider shall notify the resident of the impending
relocation at least 60 days in advance of the relocation.
   (c) The provider shall meet with the resident and, at the resident'
s request, family members or other individuals, at least 30 days in
advance of the transfer to discuss all aspects of the transfer,
including, but not limited to, the rights, requirements, and
procedures set forth in this article. Notice of this meeting shall be
provided in writing and at least seven days in advance of the
meeting and shall include all of the following information:
   (1) The date of the transfer.
   (2) The available replacement unit or units and monthly fees.
   (3) The time when the resident will be able to inspect the
replacement unit or units.
   (4) The estimated date when the resident will be able to return to
his or her unit or may move to a substitute permanent unit.
   (d) If accommodations are not available at a continuing care
retirement community operated by the provider within a 30-mile
radius, the provider shall be required to provide a unit in a
facility, agreed to by the resident, that most closely provides the
services, size, features, and amenities provided in the unit being
vacated.
   (e) The provider shall be required to arrange and pay for all
moving costs to the new facility and moving costs to the
reconstructed facility, if the resident returns, as well as storage
costs.
   (f) The resident shall only be required to pay to the provider the
monthly fee required in the resident's contract, or the monthly fee
in the new facility, whichever is less. The provider shall be
required to make payment to the facility at which the resident is
relocated.
   (g) Upon request by the resident or the resident's representative,
the provider shall make available the services of a licensed medical
or geriatric professional to advise the resident, the resident's
representative, and the provider regarding the relocation of the
resident. The provider may place a reasonable limit on the cost of
the services of the medical or geriatric professional.

    (h) The provider shall identify unique service and care needs, if
applicable, for a resident directly affected by the residential
temporary relocation. The unique services and care needs identified
shall be in writing and shall become a part of the resident's plan of
care.
   1793.91.  The provider shall set forth specific procedures for the
resident to follow regarding relocation to the unit originally
vacated, the selection of a new unit, and timeframes for making
choices. Procedures for returning the relocated resident when
residential units will be ready for occupancy shall include all of
the following:
   (a) The provider shall provide the resident at least 60 days
notice of the return to his or her unit or a substitute permanent
unit, and subsequent notices 30 days and seven days prior to the
return date.
   (b) The resident shall have the right to return to his or her
previously occupied unit or a unit comparable in services, size,
features, and amenities to the unit originally vacated, without
payment of any further entrance or accommodation fee. The provider is
not required to guarantee a specific unit. Assignment of units shall
be based upon the length of occupancy of returning residents.
   (c) If the residential temporary relocation of a resident of a
continuing care retirement community will exceed 18 months, the
resident shall have all options allowed by Section 1793.82, unless
there is a written agreement between the affected resident and the
provider as described in subdivision (d).
   (d) If a provider determines that the period of residential
temporary relocation, as defined in paragraph (8) of subdivision (r)
of Section 1771, will exceed 18 months, the provider may extend the
period of residential temporary relocation for up to six months for
an affected resident if that resident has agreed to the extension in
writing. The written agreement shall state that by signing, the
resident waives all rights to relocation options offered in Section
1793.82 for the period of the extension.
  SEC. 4.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.