BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 897|
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THIRD READING
Bill No: SB 897
Author: Leno (D) et al.
Amended: 5/17/11
Vote: 21
SENATE HUMAN SERVICES COMMITTEE : 7-0, 4/12/11
AYES: Liu, Emmerson, Berryhill, Hancock, Strickland,
Wright, Yee
SENATE APPROPRIATIONS COMMITTEE : 9-0, 5/23/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
SUBJECT : Residential care facilities for the elderly
SOURCE : Bet Tzedek Legal Services
California Advocates for Nursing Home Reform
California Senior Legislature
DIGEST : This bill requires licensees of residential care
facilities for the elderly (RCFE) to notify residents,
potential residents, the Department of Social Services, and
the State Long-Term Care Ombudsman within two business days
of specified events that could be indicators of an RCFE
closure, including but not limited to a notice of
foreclosure upon the property or a bankruptcy filing by the
licensee. The bill also provides for increased civil
penalties related to notification.
ANALYSIS :
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Existing law :
1. Under the Residential Care Facilities for the Elderly
Act, provides for the licensure of residential care
facilities for the elderly (RCFEs) by the Department of
Social Services (DSS), Community Care Licensing Division
(CCL).
2. Provides that any person who violates the Residential
Care Facilities for the Elderly Act, or who willfully or
repeatedly violates any rule or regulation adopted under
the Act, is guilty of a misdemeanor, with a fine not to
exceed one thousand dollars ($1,000), by imprisonment in
the county jail for up to a year, or by both the fine
and imprisonment.
3. Provides broad authority for the director of DSS to take
enforcement action, including, but not limited to,
actions to suspend or revoke a license and to impose
civil penalties (generally between $25 to $50 per day,
but no greater than $150 per day) for violations of RCFE
statutes.
4. Provides for a state long-term care ombudsman office
(including approved organizations) within the Department
of Aging to investigate and seek to resolve complaints
and concerns communicated by, or on behalf of, patients,
residents, or clients of any long-term care facility.
This bill places new notification requirements on RCFEs.
As these facilities are private entities, the costs
associated with the requirements to notify DSS, the State
Long-Term Care Ombudsman, residents, applicants, and/or
their legal representatives of specified occurrences that
may indicate financial distress and potential facility
closure will not create new state costs.
The bill requires a licensee to notify the State Long-Term
Care Ombudsman in writing, or as specified, of any of the
following events within two business days of the event or
knowledge of the event:
1. Failure to make one or more mortgage, lease, or rental
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payments on the property within 30 days of the due date.
2. A utility company (electricity, gas, or water services)
has sent notice of intent to terminate a utility on the
property.
3. A financial institution refuses to honor a check or
other instrument issued by the licensee to its employees
for a regular payroll due to insufficient funds.
This bill requires an RCFE to notify DSS, the State
Long-Term Care Ombudsman, residents, and applicants (and/or
their legal representatives) of the following events within
two business days of the event or knowledge of the event:
1. A notice of default, notice of a trustee's sale, or any
other indication of foreclosure is issued on the
property.
2. An unlawful detainer action is initiated against the
licensee.
3. The licensee files for bankruptcy.
Background
Residential care facilities for the elderly . RCFEs are
assisted living facilities for persons 60 years of age and
over and persons under 60 with compatible needs. RCFEs,
which may also be known as retirement homes or board and
care homes, provide varying levels and intensities of care
and supervision, protective supervision, or personal care,
based upon residents' needs. As of March 2011, there were
7,662 licensed facilities in the state with a total
capacity of 170,061 residents. According to DSS data from
2007, approximately three-quarters of RCFEs are licensed
for six or fewer residents; the remaining RCFEs have an
average licensed capacity of approximately 60 residents.
RCFE foreclosures . According to the Community Care
Licensing division of DSS, 41 RCFEs were in foreclosure or
had been foreclosed between January 2009 and March 2010,
out of 65 foreclosures of all CCL-licensed facility types.
The California Advocates for Nursing Home Reform, a
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co-sponsor of the bill, states that of these, about half
resulted in the building shutting down. According to DSS,
RCFEs do not report any annual financial information to
CCL.
Other sources indicate a much more widespread problem with
foreclosures. An investigation undertaken by the New York
Times, published in April 2010, suggested that almost 16
percent of the Bay Area's 1,600 properties licensed as
small residential care homes had been at some stage of
foreclosure since June 2006 (although small residential
care homes may not correspond with the RCFE
classification), and that perhaps as many as 100 homes had
been under foreclosure within a six-month period.
Additionally, the San Mateo County ombudsman office
reported dealing with 16 foreclosure or bankruptcy cases
within a 16 month period, prior to June 2010. Notably, last
May (2010), the Press-Enterprise reported that a 102-bed
assisted living and respite care home in Hemet (Parkside
Gardens) was forced to close immediately following a staff
walk-out after the facility could not make payroll,
although DSS had been working with the facility managers
for more than six months after the report of a financial
default.
According to the federal Administration on Aging's National
Ombudsman Reporting System, California reported a six-fold
increase in the number of complaints received for
"insufficient funds to operate" between 2006 and 2008,
increasing from 3 to 20 complaints. It is worth noting,
however, that a high number of complaints in this category
were noted for prior years (17 in 2003 and 25 in 2004).
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
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DSS notification Potentially
significant savings; General
possibly increased fine revenueSpecial*
State LTC Ombudsman Minor, absorbable
costsGeneral
notification
DSS administrative action Potential, minor
costs General
Notification to residentsNo direct state costs
*Technical Assistance Fund
SUPPORT : (Verified 5/24/11)
Bet Tzedek Legal Services (co-source)
California Advocates for Nursing Home Reform (co-source)
California Senior Legislature (co-source)
AARP
Alzheimer's Association
California Alliance for Retired Americans
California Commission on the Status of Women
California Commission on Aging
Congress of California Seniors
Ombudsman Services of Northern California
Ombudsman Services of San Mateo County
The Arc
United Cerebral Palsy CA
ARGUMENTS IN SUPPORT : California Advocates for Nursing
Home Reform (CANHR), a co-sponsor of the measure, writes
that reports of RCFE properties in foreclosure or
bankruptcy have surged. CANHR believes that the
notification provided for in the bill will ensure that
residents will be better able to plan for a possible move
and avoid dangerous last-minute evictions.
AARP writes that evaluating long-term care options and
making good decisions is difficult enough under normal
circumstances, but trying to make good decisions on short
notice is problematic. AARP believes this bill provides
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DSS and residents an early warning of financial distress so
that DSS may take appropriate action and that residents can
consider whether to reevaluate their continued residence.
Bet Tzedek Legal Services, another co-sponsor, writes "that
the foreclosure crisis is severely impacting housing for
California's RCFE residents, and that, increasingly, RCFE
owners are losing their homes and residents are being
forced to move with little or no notice. Bet Tzedek points
out that such resident are more vulnerable to emotional and
physical trauma and placement in facilities that cannot
meet their care. Bet Tzedek writes that notice to RCFE
residents will enable them to assert legal challenges to
involuntary relocations and give them additional time to
prepare for possible transfer to a new facility."
CTW:do 5/24/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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