BILL ANALYSIS �
SB 897
Page 1
SENATE THIRD READING
SB 897 (Leno)
As Amended May 17, 2011
Majority vote
SENATE VOTE :38-0
HUMAN SERVICES 6-0 APPROPRIATIONS 15-1
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|Ayes:|Beall, Jones, Ammiano, |Ayes:|Fuentes, Harkey, |
| |Grove, Hall, Portantino | |Blumenfield, Bradford, |
| | | |Charles Calderon, Campos, |
| | | |Davis, Dickinson, Hall, |
| | | |Hill, Lara, Nielsen, |
| | | |Norby, Solorio, Wagner |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Donnelly |
| | | | |
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SUMMARY : Requires licensees of residential care facilities for
the elderly (RCFEs) to notify the State Long-Term Care Ombudsman
and, in some instances, residents and potential residents, and
the Department of Social Services (DSS) of specified events
indicating financial distress. Specifically, this bill :
1)Requires an RCFE licensee to notify, in writing or as
specified, the State Long-Term Care Ombudsman of the following
events within two business days of the event or 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) A provider of electricity, gas, or water services has
sent notice of intent to terminate a utility on the
property; or,
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c) 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.
2)Requires an RCFE licensee to notify, in writing, the State
Long-Term Care Ombudsman; DSS; all residents and, if
applicable, their legal representatives; all applicants for
potential residency and, if applicable, their legal
representatives, prior to admission, of the following within
two business days of the event or knowledge of the event:
a) Notice of default, trustee's sale, or any other
indication of foreclosure issued on the property;
b) An unlawful detainer action initiated against the
licensee; or,
c) Bankruptcy filing by the licensee.
3)Requires DSS to initiate a compliance plan, noncompliance
conference, or other appropriate action upon receiving notice
as specified in paragraph 2) above.
4)Authorizes civil penalties in the amount of $100 per day for
failure to provide the notifications required above, not to
exceed $2,000, and allows DSS to suspend or revoke a license
or permanently revoke a licensee's ability to operate, or act
as an administrator of, a facility anywhere in the state, if a
resident is relocated without the notification required by the
section and suffers transfer trauma or other harm to his or
her health and safety.
5)Clarifies that suspension or revocation proceedings related to
the provisions of this bill are to be conducted pursuant to
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due process procedures applicable to suspension or revocation
actions under existing law.
6)Exempts RCFE licensees that have obtained a certificate of
authority to offer continuing care contracts from the
requirements above.
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 DSS, Community Care Licensing Division
(CCLD).
2)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 and $50 per day, but no greater than
$150 per day) for violations of RCFE statutes.
3)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.
4)Establishes due process appeal procedures for proceedings
related to suspension or revocation of an RCFE license.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Costs associated with the increased notification requirements
would be minor and absorbable within DSS resources.
2)To the extent this advanced notification prevents Adult
Protective Services from needing to find emergency placements
for residents, and the Attorney General from becoming involved
in litigation surrounding the closure, it could result in
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savings to the state.
COMMENTS : RCFEs are licensed assisted living facilities for
persons 60 years of age and over and persons under 60 with
compatible needs.
According to the author, this bill "will protect the elderly
residents living in RCFEs from the emotional, physical and
unexpected upheaval that results from abrupt foreclosure of
RCFEs." As of June 1, 2011, there were 7,673 RCFEs in
California with a total capacity of 170,724 residents.
Approximately 75%, are located in single-family dwelling units,
operated by a lone individual or family with a mortgage on the
property, and have six or fewer residents. "In recent years,"
the author notes, "1 in 8 homes have been foreclosed in
California; RCFEs in foreclosure or bankruptcy have also surged,
leaving vulnerable residents subject to loss of their home and
needed care." The author further says that:
Under current law, RCFEs are not required to provide
notice to the residents or to �CCLD] when these 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
forcibly removed them. Without timely notice, RCFE
residents are effectively deprived of their legal
recourse. They are rendered much more vulnerable to
transfer trauma and placements in homes that are not
able to meet their needs. Without timely notice,
family, guardians and friends of the residents are
subject to hardships as they struggle to find a safe,
secure and compatible living arrangement for the loved
one. ?
�This bill] will require RCFE operators give notice to
all residents and their legal representatives of any
foreclosure proceedings when they are initiated. This
will allow residents to prepare for a possible
transfer to a new home with appropriate levels of
care.
�This bill] will also require RCFE operators to notify
CCLD and the state Ombudsman of events indicating
financial distress that would threaten the housing
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security of the residents such as foreclosure
proceedings, a missed mortgage payment, or threatened
utility shut-off. Such notice would enable CCLD to
monitor the facility and ensure the residents are
protected.
�This bill] will ensure vulnerable RCFE residents and
their loved ones are notified when their home is being
threatened. With such notification, they will be able
to carefully plan for a possible move and avoid
dangerous last-minute evictions.
This bill requires that RCFE operators give notice to residents
(and, when applicable, to their families) whenever their homes
are subject to foreclosure, bankruptcy, or unlawful detainer.
This advance notice will give residents an opportunity to
investigate the stability of their placement and to explore
other housing options. This bill also requires RCFE operators
to give notice to CCLD and the State Office of the Long-Term
Care Ombudsman when a facility is in foreclosure, bankruptcy, or
suffers other specified indicators of severe financial distress.
Under this bill, CCLD's response in most instances is
discretionary; although, early reports of financial troubles
will enable CCLD to counsel facilities through their crisis or
to minimize transfer trauma to residents of the closing
facility. In the case of foreclosure, bankruptcy, or unlawful
detainer, on the other hand, this bill requires CCLD to take
appropriate action. At its discretion, CCLD may initiate a
compliance plan, noncompliance conference, or other appropriate
administrative action.
Prior bill : SB 1329 (Leno) of 2010 was substantially similar to
this bill. SB 1329 was passed by the Legislature in the last
Session, but was vetoed by Governor Schwarzenegger. The veto
message stated:
While I appreciate the author's continued effort to
improve protections for residential care facilities,
this bill would represent a new unfunded workload and
redirect scarce resources that are currently dedicated
to immediate health and safety issues.
This bill differs from SB 1329 in several respects:
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1)This bill includes notification to the State Office of
the Long-Term Care Ombudsman.
2)SB 1329 would have authorized suspension or revocation
proceedings if relocation occurs without adequate
notification or a resident suffers transfer trauma or
other harm to his or her health or safety; this bill
requires both lack of notification and transfer trauma or
other harm to the resident's health or safety.
3)This bill clarifies licensees' due process appeal rights
in the event that DSS takes action to suspend or revoke a
facility's license.
4)The civil penalty provided for under this bill is
discretionary; the civil penalty under SB 1329 was
mandatory.
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089
FN: 0001703