BILL ANALYSIS
SB 1329
Page 1
Date of Hearing: June 15, 2010
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall, Jr., Chair
SB 1329 (Leno) - As Amended: April 28, 2010
SENATE VOTE : 30-0
SUBJECT : Residential care facilities for the elderly
SUMMARY : Requires licensees of residential care facilities for
the elderly (RCFEs), with certain exceptions, to notify the
Department of Social Services (DSS) and, in some instances,
residents, applicants and potential residents, of specified
events, and requires DSS to initiate compliance plans,
noncompliance conferences, or other administrative actions upon
receipt of the notification. Specifically, this bill :
1)Requires that an RCFE licensee notify DSS in writing within 2
business days of any of the following events, or obtaining
knowledge of the event:
a) Failure to make one or more mortgage, lease, or rental
payments on the property within 30 days of the due date;
b) 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, unless an
insurance premium has not been paid due to the fault of an
escrow account servicer;
c) A utility company has sent notice of intent to terminate
a utility on the property;
d) A judgment lien has been levied against the facility or
any of the assets of the facility or licensee;
e) 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; or,
f) The financial resources of the licensee fall below the
amount needed to operate the facility for a period of at
least 45 days.
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2)Requires that an RCFE licensee notify DSS, all residents, and,
if applicable, their legal representatives in writing 2
business days, and, prior to admission, all applicants or
potential residents, and, if applicable, their legal
representatives of any of the following events, or knowledge
of the event:
a) A notice of foreclosure is issued on the property;
b) An unlawful detainer is initiated against the licensee;
or,
c) The licensee files for bankruptcy.
3)Requires that DSS initiate a compliance plan, noncompliance
conference, or other administrative action upon receipt of a
notice specifying an event listed in paragraph No. 2.
4)Provides for civil penalties of $100 per day, up to a maximum
of $2,500, for a licensee's failure to provide required notice
as described above.
5)Authorizes DSS to suspend or revoke the licensee's license or
permanently revoke the licensee's ability to operate or act as
an administrator of a facility anywhere in the state if a
resident is relocated without the required notification, or if
the resident's health and safety has been compromised as a
result of a relocation that occurs without the required
notification.
6)Exempts from the requirements of this bill RCFE licensees who
have been authorized by DSS to enter into continuing care
contracts at a continuing care retirement community.
EXISTING LAW
1)Under the Residential Care Facilities for the Elderly Act,
provides for the licensure and regulation of RCFEs by DSS,
Community Care Licensing Division (CCL).
2)Authorizes DSS to take enforcement action, including, but not
limited to, actions to suspend, temporarily suspend, or revoke
a license and to impose civil penalties for violations of
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rules and regulations established under licensing provisions
governing RCFEs.
FISCAL EFFECT : According to the Senate Appropriations Committee
analysis, General Fund costs of up to $40,000 in 2010-11, and up
to $81,000 in subsequent years.
COMMENTS : RCFEs are assisted living facilities for seniors
where varying levels of care and supervision, protective
supervision, or personal care are provided, based upon
residents' 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.
According to the author:
Reports of RCFE properties in foreclosure or
bankruptcy have surged. The State Long-term Care
Ombudsman Program, which tracks its complaints,
reported a six-fold increase in the number of RCFEs in
financial distress from 2006 to 2008. In San Mateo
County alone, the local Ombudsman program reports that
fifteen facilities are currently in foreclosure or
bankruptcy in its small jurisdiction.
The impact of a foreclosure on RCFE residents can be
particularly devastating because they often rely on
the facility to provide assistance with most of their
activities of daily living. A foreclosure or
bankruptcy not only requires they find a new home but
also must find new care providers, disrupting the
patterns of care to which they had become accustomed.
California Advocates for Nursing Home Reform (CANHR),
co-sponsor of this bill, notes that:
The devastation of a foreclosure is exacerbated by the
fact that many residents never receive notice of the
imminent loss of their home, leaving them and their
family members entirely unprepared for locating a new
placement. A recent foreclosure in Contra Costa
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County occurred without any notice to the [RCFE's] six
residents or their families. As the operator of the
facility fought the foreclosure in court, she
continued to accept new residents who, like the old
residents, were stunned to learn their home was lost
when word finally leaked out. In facilities in
Alameda and Los Angeles Counties, residents were
actually sent to the curb by sheriff's officers while
staff from local Adult Protective Services offices
sought emergency placements.
CANHR further points out that, under current law, "RCFEs
are not required to provide notice to residents or to
Community Care Licensing (CCL) when their homes are in
foreclosure or suffering from severe financial distress.
In some foreclosure cases, residents had no idea they were
losing their home until sheriffs arrived and forcibly
removed them. Without notice, RCFE residents are
effectively deprived of their legal recourse and are
rendered much more vulnerable to transfer trauma and
placements in homes that are not able to safely meet their
needs." This bill's co-sponsor, Bet Tzedek Legal Services,
points out that, under current law, "residents are being
forced to move with little or no notice. Rather than
having months to search for a new care home, residents may
only have several hours. As a result . . . RCFE residents
are more vulnerable to emotional and physical trauma and
placement in facilities that cannot meet their care needs."
This bill requires RCFE operators to give notice to CCL of
foreclosures and other specified events indicating financial
distress that would threaten the housing security of the
residents, including a missed mortgage payment or a threatened
utility shut-off. The notice would trigger a discretionary
response by CCL, which will enable staff to assist the operator
and ensure the residents are protected. With the most severe
signs of financial distress, the residents must also be notified
and CCL must take action.
As CANHR concludes, this bill "ensures vulnerable RCFE residents
and their loved ones are notified and protected when their home
is being threatened due to financial hardship. With such
notification, they will be better able to carefully plan for a
possible move and avoid dangerous last-minute evictions." And,
as Bet Tzedek points out, "California has been a leader in
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assisting consumers with housing and debt issues caused by the
economic crisis. Elderly and disabled assisted living residents
deserve comparable protection." [This bill] is essential to
minimizing the transfer trauma caused by the unnecessary, forced
and emergent relocation of RCFE residents."
Provider concerns : Although taking neither a support nor oppose
position on this bill, the Community Residential Care
Association of California (CRCAC) sent the author's office a
last-minute list of concerns. CRCAC says, for example, that
this bill requires notifying DSS even if a failure to make a
timely payroll payment was due to third party error. All this
bill requires, however, is that notification be provided. In
this and other examples cited by CRCAC, if DSS is given an
adequate explanation along with the notice, it would not be
required to take any action. CRCAC says that DSS may not be
authorized to take action if there is a failure to make a timely
insurance premium payment, because insurance is not a condition
of licensure. But late payment of an insurance premium required
by a lender can result in adverse action against the property
and, again, DSS is not required to take any action if the
situation does not warrant it. CRCAC says that a facility's
receipt of a judgment lien does not of itself indicate financial
distress. Here, too, the facts would determine the appropriate
administrative action to be taken. The purpose of this bill is
to alert DSS to events that could be indicators of financial
distress; DSS' response is discretionary. In referring to the
discretion to suspend or revoke a facility license if a
resident's health and safety has been compromised as a result of
a relocation that occurs without the required notification,
CRCAC opines that failure to provide a required notice would not
likely result in any compromise of a resident's health or
safety. When facilities close due to financial failure,
however, residents' health and safety can be jeopardized,
particularly when they do not receive timely notice and are
transferred without adequate preparation.
CRCAC does raise the valid point that this bill requires notice
to "potential residents" in certain circumstances but does not
define that term. CRCAC also correctly notes that the language
in this bill requiring that a facility have sufficient financial
resources to operate the facility for a period of at least 45
days is somewhat ambiguous. These concerns can be readily
addressed through clarifying amendments.
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Prior Legislation
SB 791 (Leno), Chapter 617, Statutes of 2009, requires an RCFE
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, establishes
procedures to be followed by an RCFE 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.
DOUBLE REFERRAL . This bill has been double-referred. Should
this bill pass out of this committee, it will be referred to the
Assembly Judiciary Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Advocates for Nursing Home Reforms (CANHR) co-sponsor
Bet Tzedek Legal Services, co-sponsor
AARP
Alzheimer's Association
California Retired Teachers Association
Congress of California Seniors
Consumer Attorneys of California
Opposition
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None on file.
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089