BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1329|
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THIRD READING
Bill No: SB 1329
Author: Leno (D), et al
Amended: 4/28/10
Vote: 21
SENATE HUMAN SERVICES COMMITTEE : 4-0, 3/23/10
AYES: Liu, Romero, Runner, Yee
NO VOTE RECORDED: Maldonado
SENATE APPROPRIATIONS COMMITTEE : 9-0, 5/3/10
AYES: Kehoe, Cox, Corbett, Leno, Price, Walters, Wolk,
Wyland, Yee
NO VOTE RECORDED: Alquist, Denham
SUBJECT : Residential care facilities for the elderly
SOURCE : Bet Tzedek Legal Services
California Advocates for Nursing Home Reform
DIGEST : This bill requires licensees of residential care
facilities for the elderly to notify residents and the
Department of Social Services within two business days when
a notice of foreclosure is issued on the property, an
unlawful detainer action is initiated against a licensee,
or when a licensee files for bankruptcy. This bill
provides for additional civil penalties related to
notification.
ANALYSIS : Existing law, the California Residential Care
Facilities for the Elderly Act, provides for the licensure
CONTINUED
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and regulation of residential care facilities for the
elderly (RCFEs) by the Department of Social Services (DSS).
Existing law authorizes the Director to take enforcement
action, including, but not limited to, actions to suspend
or revoke a license and to impose civil penalties for
violations. Under existing law, a violation of these
provisions is a crime.
This bill requires that an RCFE notify DSS, when one of the
following events occurs:
1. Failure to make one or more mortgage, lease, or rental
payments on the property within 30 days of the due date.
2. Failure to make timely payment of any premiums required
to maintain mandated insurance policies or bonds in
effect, or any tax lien levied by any government agency.
3. A utility company has sent notice of intent to terminate
a utility on the property.
4. A judgment lien has been levied against the facility or
any of the assets of the facility or licensee.
5. 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.
6. The financial resources of the licensee fall below the
amount needed to operate the facility for a period of at
least 45 days.
This bill requires DSS, upon receiving notification of any
of the aforementioned events, to initiate a compliance
plan, noncompliance conference, or other administrative
action. The scope of events that require notification is
more extensive in this bill than under existing
regulations. Existing regulations require RCFEs to notify
DSS if there are "activities related to bankruptcy or
foreclosure" affecting the RCFE, but does not require
notification of events enumerated previously that might be
early warning signs of foreclosure or bankruptcy. Existing
statute also does not require specific administrative
action upon receiving those notifications.
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Background
RCFEs are assisted living facilities for the aged where
varying levels and intensities of care and supervision,
protective supervision, or personal care are provided,
based upon residents' varying needs. As of March 2010,
there were 7,825 licensed facilities in the state with a
total capacity of 170,290 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.
Prior Legislation
SB 791 (Leno), Chapter 617, Statutes of 2009, requires a
residential care facility for the elderly to include
additional information when providing a notice of eviction
to a resident, including the reason for the eviction, the
effective date of the eviction, and additional information
informing the resident of his/her rights regarding
evictions.
AB 407 (Beall), Chapter 442, Statutes of 2009, imposes
requirements on continuing care retirement communities in
the event of their permanent closure, including requiring
the continuing care retirement community to provide written
notice to DSS and to the affected residents or designated
representatives 120 days prior to the intended date of
closure of a continuing care retirement community.
SB 1137 (Perata, Corbett, and Machado), Chapter 69,
Statutes of 2008, imposes requirements related to real
estate foreclosures, including requiring the holder of a
mortgage to mail a specified notice to the tenant(s) of a
property on which foreclosure proceedings have begun.
AB 494 (Krekorian), Chapter 686, Statutes of 2007,
established procedures to be followed by a residential care
facility for the elderly prior to transferring a resident
to another facility or living arrangement as a result of
forfeiture of license or change in the use of the facility,
and provides remedies for noncompliance.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Increased DSS response up to $40 up to
$81 up to $81 General
to reporting
Notification to residents --No direct state costs;
possible cost Special*
avoidance from increased civil
penalties--
* Technical Assistance Fund
This bill places new requirements on RCFEs and on DSS.
RCFEs are private entities, and the costs associated with
the requirements to notify residents and/or their legal
representatives of specified occurrences which might
indicate the facility may be in a precarious financial
situation (and in danger of closing) will not create new
costs to the state. Any costs to the state would be to
help residents of an RCFE when they need to be moved, if
the RCFE is closing, and would not result from the
notification itself. This bill also increases the civil
penalties that DSS can assess against an RCFE for failing
to notify DSS or residents, as required. This bill places
new requirements on DSS that will likely result in General
Fund costs.
SUPPORT : (Verified 5/5/10)
Bet Tzedek Legal Services (co-source)
California Advocates for Nursing Home Reform (co-source)
AARP California
Alzheimer's Association
Congress of California Seniors
Consumer Attorneys of California
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ARGUMENTS IN SUPPORT : The California Advocates for
Nursing Home Reform, a co-sponsor of the bill, writes that
reports of RCFE properties in foreclosure or bankruptcy
have surged and that the bill will substantially reduce the
grave harm that threatens assisted living residents whose
homes are in foreclosure or suffering severe financial
distress.
Bet Tzedek Legal Services 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
residents are more vulnerable to emotional and physical
trauma and placement in facilities that cannot meet their
care. Bet Tzedek believes that, ideally, families would
have several months to search for the perfect care home.
Consumer Attorneys of California writes that the
information notices required by the bill will ensure that
all residents receive their legal rights and protections
and will allow for elderly residents and their loved ones
to arrange a safe, trauma-free move and avoid dangerous
last-minute evictions. AARP writes that the bill creates
new protections for RCFE residents.
DLW:mw 5/5/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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