BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 407
                                                                  Page  1

          Date of Hearing:   April 29, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                    AB 407 (Beall) - As Amended:  April 21, 2009 

          Policy Committee:                              Human  
          ServicesVote:6 - 0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill imposes patient protection requirements on continuing  
          care retirement communities (CCRC) in the event of their  
          closure. Specifically, this bill: 

          1)Defines "permanent closure" of a facility as voluntary or  
            involuntary termination, including, but not limited to,  
            forfeiture of a provider's license or certificate of  
            authority.

          2)Requires providers to provide written notice a minimum of 120  
            days before closure to the Department of Social Services (DSS)  
            and the residents of the facility.

          3)Requires the provider to provide DSS with a relocation plan at  
            least 90 days prior to closure.

          4)Requires DSS to receive the closure plan and monitor the  
            facility closure in order to prohibit the providers from  
            displacing residents.

          5)Requires the provider to offer residents the choice of  
            placement options or a lump sum buy-out option in cases where  
            comparable replacement housing and care are not available.

          6)Requires the provider, within 30 days of submitting the  
            relocation plan, to fund a reserve, set up a trust fund, or  
            secure a performance bond measure to ensure the fulfillment of  
            costs associated with the relocation of the residents.

           FISCAL EFFECT  








                                                                  AB 407
                                                                  Page  2


          Minor and absorbable costs of less than $75,000 General Fund for  
          DSS to receive closure plans, monitor facility closures, and  
          impose penalties on providers when necessary.

           COMMENTS  

           1)Purpose  .  According to the author, this bill was prompted by  
            the 2006 closure of a facility in San Jose in which residents  
            were surprised by an announcement that the facility was  
            closing and complained that the options to buy-out their  
            contracts or relocate them were inadequate.

           2)Related Legislation  . This bill is similar to SB 489  
            (Steinberg) from 2008 which was vetoed by the governor.  In  
            his veto message the governor notes that he does not want DSS  
            to be in the position of intervening in contract disputes  
            between facility owners and residents. 

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081