BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 897|
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UNFINISHED BUSINESS
Bill No: SB 897
Author: Leno (D) et al.
Amended: 8/31/11
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
SENATE FLOOR : 38-0, 5/31/11
AYES: Alquist, Anderson, Blakeslee, Calderon, Cannella,
Corbett, Correa, De Le�n, DeSaulnier, Dutton, Evans,
Fuller, Gaines, Hancock, Harman, Hernandez, Huff, Kehoe,
La Malfa, Leno, Lieu, Liu, Lowenthal, Negrete McLeod,
Padilla, Pavley, Price, Rubio, Runner, Simitian,
Steinberg, Strickland, Vargas, Walters, Wolk, Wright,
Wyland, Yee
NO VOTE RECORDED: Berryhill, Emmerson
ASSEMBLY FLOOR : 71-5, 9/6/11 - See last page for vote
SUBJECT : Residential care facilities for the elderly
SOURCE : Bet Tzedek Legal Services
California Advocates for Nursing Home Reform
California Senior Legislature
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DIGEST : This bill requires licensees of residential care
facilities for the elderly to notify the State Long-Term
Care Ombudsman, residents and potential residents, and the
Department of Social Services of specified events
indicating financial distress.
Assembly Amendments (1) delete provisions specifying events
that require the licensee of a residential care facility
for the elderly to notify the State Long-Term Care
Ombudsman (LTC Ombudsman, and add the following to the list
of events that require the licensee of an Residential Care
Facility for the Elderly(RCFE) to notify the Department of
Social Services (DSS), the LTC Ombudsman, and facility
residents and applicants for potential residence, and if
applicable, their legal representative; and require DSS,
upon receipt of the notification, to initiate a compliance
plan, noncompliance conference, or other appropriate
actions: (1) the licensee receives a written notice of
default of payment of rent pursuant to statutory unlawful
detainer procedures, and (2) a utility company has sent a
notice of intent to terminate electricity, gas, or water
service on the property within not more than 15 days of the
notice.
ANALYSIS : Existing law :
1. Under the Residential Care Facilities for the Elderly
Act (Act), provides for the licensure of RCFEs by DSS,
Community Care Licensing Division (CCL).
2. Provides that any person who violates the 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.
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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:
1.Requires an RCFE licensee to notify, in writing, the LTC
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. A notice of default, trustee's sale, or any other
indication of foreclosure is issued on the property.
B. An unlawful detainer action is initiated against
the licensee.
C. The licensee files for bankruptcy.
D. The licensee receives a written notice of default
of payment pursuant to statutory unlawful detainer
procedures.
E. A utility company has sent a notice of intent to
terminate electricity, gas, or water service on the
property within not more than 15 days of the notice.
2.Requires DSS to initiate a compliance plan, noncompliance
conference, or other appropriate action upon receiving
the notice.
3.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
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transfer trauma or other harm to his or her health and
safety.
4.Clarifies that suspension or revocation proceedings
related to the provisions of this bill are to be
conducted pursuant to due process procedures applicable
to suspension or revocation actions under existing law.
5.Exempts RCFE licensees that have obtained a certificate
of authority to offer continuing care contracts from the
requirements above.
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
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
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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 Assembly Appropriations Committee, costs
associated with the increased notification requirements
will be minor and absorbable within DSS resources, and 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 savings to the state.
SUPPORT : (Verified 9/6/11)
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
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Ombudsman Services of Northern California
Ombudsman Services of San Mateo County
The Arc
United Cerebral Palsy CA
OPPOSITION : (Verified 9/6/11)
Department of Finance (prior version)
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
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."
ARGUMENTS IN OPPOSITION : The Department of Finance
opposes this bill and writes, "This bill would result in
estimated costs of $41,000 ($25,000 General Fund) in fiscal
year 2011-12 and $68,000 ($41,000 General Fund) in 2012-13
and annually thereafter due to an increase in DSS workload.
The DSS estimates it would need 1.0 permanent Licensing
Program Analyst position to perform mandatory complaint
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visits initiated by the Ombudsman, initiate administrative
actions against licensees of RCFEs in specific instances of
financial distress, and assess and collect civil penalties.
This workload would be unabsorbable without redirecting
existing resources from other high priority licensing
activities. It is unknown how much revenue would be
generated from the collection of civil penalties, but the
DSS does not anticipate it to be significant given that
licensees experiencing foreclosure will not have the
financial resources to pay additional civil penalties."
ASSEMBLY FLOOR : 71-5, 9/6/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Galgiani,
Gatto, Gordon, Hagman, Harkey, Hayashi, Roger Hern�ndez,
Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight,
Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Miller,
Mitchell, Monning, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Donnelly, Beth Gaines, Grove, Halderman, Morrell
NO VOTE RECORDED: Garrick, Gorell, Hall, Mendoza
CTW:do 9/7/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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