Florida Senate - 2019                        COMMITTEE AMENDMENT
       Bill No. CS for SB 1070
       
       
       
       
       
       
                                Ì131766=Î131766                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/19/2019           .                                
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       The Committee on Appropriations (Lee) recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete lines 216 - 2443
    4  and insert:
    5         (a)The voting securities of one or more providers that are
    6  stock corporations; or
    7         (b)The ownership interest of one or more providers that
    8  are not stock corporations.
    9         (9)“Corrective order” means an order issued by the office
   10  which specifies corrective actions that the office determines
   11  are required in accordance with this chapter or commission rule.
   12         (10)“Days cash on hand” means the quotient obtained by
   13  dividing the value of paragraph (a) by the value of paragraph
   14  (b).
   15         (a)The sum of unrestricted cash, unrestricted short-term
   16  and long-term investments, provider restricted funds, and the
   17  minimum liquid reserve as of the reporting date.
   18         (b)Operating expenses less depreciation, amortization, and
   19  other noncash expenses and nonoperating losses divided by 365.
   20  Operating expenses, depreciation, amortization, and other
   21  noncash expenses and nonoperating losses are each the sum of
   22  their respective values over the 12-month period ending on the
   23  reporting date.
   24  
   25  With prior written approval of the office, a demand note or
   26  other parental guarantee may be considered a short-term or long
   27  term investment for the purposes of paragraph (a). However, the
   28  total of all demand notes issued by the parent may not, at any
   29  time, be more than the sum of unrestricted cash and unrestricted
   30  short-term and long-term investments held by the parent.
   31         (11)“Debt service coverage ratio” means the quotient
   32  obtained by dividing the value of paragraph (a) by the value of
   33  paragraph (b).
   34         (a)The sum of total expenses less interest expense on the
   35  debt facility, depreciation, amortization, and other noncash
   36  expense and nonoperating losses, subtracted from the sum of
   37  total revenues, excluding noncash revenues and nonoperating
   38  gains, and gross entrance fees received less earned entrance
   39  fees and refunds paid. Expenses, interest expense on the debt
   40  facility, depreciation, amortization, and other noncash expense
   41  and nonoperating losses, revenues, noncash revenues,
   42  nonoperating gains, gross entrance fees, earned entrance fees,
   43  and refunds are each the sum of their respective values over the
   44  12-month period ending on the reporting date.
   45         (b)Total annual principal and interest expense due on the
   46  debt facility over the 12-month period ending on the reporting
   47  date. For the purposes of this paragraph, principal excludes any
   48  balloon principal payment amounts, and interest expense due is
   49  the sum of the interest over the 12-month period ending on the
   50  reporting date.
   51         (12)“Department” means the Department of Financial
   52  Services.
   53         (13)(5) “Entrance fee” means an initial or deferred payment
   54  of a sum of money or property made as full or partial payment
   55  for continuing care or continuing care at-home. An accommodation
   56  fee, admission fee, member fee, or other fee of similar form and
   57  application are considered to be an entrance fee.
   58         (14)(6) “Facility” means a place where continuing care is
   59  furnished and may include one or more physical plants on a
   60  primary or contiguous site or an immediately accessible site. As
   61  used in this subsection, the term “immediately accessible site”
   62  means a parcel of real property separated by a reasonable
   63  distance from the facility as measured along public
   64  thoroughfares, and the term “primary or contiguous site” means
   65  the real property contemplated in the feasibility study required
   66  by this chapter.
   67         (7)“Generally accepted accounting principles” means those
   68  accounting principles and practices adopted by the Financial
   69  Accounting Standards Board and the American Institute of
   70  Certified Public Accountants, including Statement of Position
   71  90-8 with respect to any full year to which the statement
   72  applies.
   73         (15)“Impaired” or “impairment” means that either of the
   74  following has occurred:
   75         (a)A provider has failed to maintain its minimum liquid
   76  reserve as required under s. 651.035, unless the provider has
   77  received prior written approval from the office for a withdrawal
   78  pursuant to s. 651.035(6) and is compliant with the approved
   79  payment schedule.
   80         (b)Beginning January 1, 2021:
   81         1.For a provider with mortgage financing from a third
   82  party lender or a public bond issue, the provider’s debt service
   83  coverage ratio is less than 1.00:1 and the provider’s days cash
   84  on hand is less than 90; or
   85         2.For a provider without mortgage financing from a third
   86  party lender or public bond issue, the provider’s days cash on
   87  hand is less than 90.
   88  
   89  If the provider is a member of an obligated group having cross
   90  collateralized debt, the obligated group’s debt service coverage
   91  ratio and days cash on hand must be used to determine if the
   92  provider is impaired.
   93         (16)(8) “Insolvency” means the condition in which a the
   94  provider is unable to pay its obligations as they come due in
   95  the normal course of business.
   96         (17)(9) “Licensed” means that a the provider has obtained a
   97  certificate of authority from the office department.
   98         (18)“Manager,” “management,” or “management company” means
   99  a person who administers the day-to-day business operations of a
  100  facility for a provider, subject to the policies, directives,
  101  and oversight of the provider.
  102         (19)(10) “Nursing care” means those services or acts
  103  rendered to a resident by an individual licensed or certified
  104  pursuant to chapter 464.
  105         (20)“Obligated group” means one or more entities that
  106  jointly agree to be bound by a financing structure containing
  107  security provisions and covenants applicable to the group. For
  108  the purposes of this subsection, debt issued under such a
  109  financing structure must be a joint and several obligation of
  110  each member of the group.
  111         (21)“Occupancy” means the total number of occupied
  112  independent living units, assisted living units, and skilled
  113  nursing beds in a facility divided by the total number of units
  114  and beds in that facility, excluding units and beds that are
  115  unavailable to market or that are reserved by prospective
  116  residents.
  117         (22)(11) “Personal services” has the same meaning as in s.
  118  429.02.
  119         (23)(12) “Provider” means the owner or operator, whether a
  120  natural person, partnership or other unincorporated association,
  121  however organized, trust, or corporation, of an institution,
  122  building, residence, or other place, whether operated for profit
  123  or not, which owner or operator provides continuing care or
  124  continuing care at-home for a fixed or variable fee, or for any
  125  other remuneration of any type, whether fixed or variable, for
  126  the period of care, payable in a lump sum or lump sum and
  127  monthly maintenance charges or in installments. The term does
  128  not apply to an entity that has existed and continuously
  129  operated a facility located on at least 63 acres in this state
  130  providing residential lodging to members and their spouses for
  131  at least 66 years on or before July 1, 1989, and has the
  132  residential capacity of 500 persons, is directly or indirectly
  133  owned or operated by a nationally recognized fraternal
  134  organization, is not open to the public, and accepts only its
  135  members and their spouses as residents.
  136         (24)(13) “Records” means all documents, correspondence, and
  137  the permanent financial, directory, and personnel information
  138  and data maintained by a provider pursuant to this chapter,
  139  regardless of the physical form, characteristics, or means of
  140  transmission.
  141         (25)“Regulatory action level event” means that any two of
  142  the following have occurred:
  143         (a)The provider’s debt service coverage ratio is less than
  144  the greater of the minimum ratio specified in the provider’s
  145  bond covenants or lending agreement for long-term financing or
  146  1.20:1 as of the most recent annual report filed with the office
  147  pursuant to s. 651.026, or, if the provider does not have a debt
  148  service coverage ratio required by its lending institution, the
  149  provider’s debt service coverage ratio is less than 1.20:1 as of
  150  the most recent annual report filed with the office pursuant to
  151  s. 651.026. If the provider is a member of an obligated group
  152  having cross-collateralized debt, the obligated group’s debt
  153  service coverage ratio must be used as the provider’s debt
  154  service coverage ratio.
  155         (b)The provider’s days cash on hand is less than the
  156  greater of the minimum number of days cash on hand specified in
  157  the provider’s bond covenants or lending agreement for long-term
  158  financing or 100 days. If the provider does not have a days cash
  159  on hand required by its lending institution, the days cash on
  160  hand may not be less than 100 as of the most recent annual
  161  report filed with the office pursuant to s. 651.026. If the
  162  provider is a member of an obligated group having cross
  163  collateralized debt, the days cash on hand of the obligated
  164  group must be used as the provider’s days cash on hand.
  165         (c)The occupancy of the provider’s facility is less than
  166  80 percent averaged over the 12-month period immediately
  167  preceding the annual report filed with the office pursuant to s.
  168  651.026.
  169         (26)(14) “Resident” means a purchaser of, a nominee of, or
  170  a subscriber to a continuing care or continuing care at-home
  171  contract. Such contract does not give the resident a part
  172  ownership of the facility in which the resident is to reside,
  173  unless expressly provided in the contract.
  174         (27)(15) “Shelter” means an independent living unit, room,
  175  apartment, cottage, villa, personal care unit, nursing bed, or
  176  other living area within a facility set aside for the exclusive
  177  use of one or more identified residents.
  178         Section 2. Section 651.012, Florida Statutes, is amended to
  179  read:
  180         651.012 Exempted facility; written disclosure of
  181  exemption.—Any facility exempted under ss. 632.637(1)(e) and
  182  651.011(23) 651.011(12) must provide written disclosure of such
  183  exemption to each person admitted to the facility after October
  184  1, 1996. This disclosure must be written using language likely
  185  to be understood by the person and must briefly explain the
  186  exemption.
  187         Section 3. Subsection (2) of section 651.013, Florida
  188  Statutes, is amended to read:
  189         651.013 Chapter exclusive; applicability of other laws.—
  190         (2) In addition to other applicable provisions cited in
  191  this chapter, the office has the authority granted under ss.
  192  624.302, and 624.303, 624.307-624.312, 624.318 624.308-624.312,
  193  624.319(1)-(3), 624.320, 624.321 624.320-624.321, 624.324, and
  194  624.34, and 624.422 of the Florida Insurance Code to regulate
  195  providers of continuing care and continuing care at-home.
  196         Section 4. Section 651.019, Florida Statutes, is amended to
  197  read:
  198         651.019 New financing, additional financing, or
  199  refinancing.—
  200         (1)(a)A provider shall provide a written general outline
  201  of the amount and the anticipated terms of any new financing or
  202  refinancing, and the intended use of proceeds, to the residents’
  203  council at least 30 days before the closing date of the
  204  financing or refinancing transaction. If there is a material
  205  change in the noticed information, a provider shall provide an
  206  updated notice to the residents’ council within 10 business days
  207  after the provider becomes aware of such change.
  208         (b)If the facility does not have a residents’ council, the
  209  facility must make available, in the same manner as other
  210  community notices, the information required under paragraph (a)
  211  After issuance of a certificate of authority, the provider shall
  212  submit to the office a general outline, including intended use
  213  of proceeds, with respect to any new financing, additional
  214  financing, or refinancing at least 30 days before the closing
  215  date of such financing transaction.
  216         (2) Within 30 days after the closing date of such financing
  217  or refinancing transaction, The provider shall furnish any
  218  information the office may reasonably request in connection with
  219  any new financing, additional financing, or refinancing,
  220  including, but not limited to, the financing agreements and any
  221  related documents, escrow or trust agreements, and statistical
  222  or financial data. the provider shall also submit to the office
  223  copies of executed financing documents, escrow or trust
  224  agreements prepared in support of such financing or refinancing
  225  transaction, and a copy of all documents required to be
  226  submitted to the residents’ council under paragraph (1)(a)
  227  within 30 days after the closing date.
  228         Section 5. Section 651.021, Florida Statutes, is amended to
  229  read:
  230         651.021 Certificate of authority required.—
  231         (1)A No person may not engage in the business of providing
  232  continuing care, issuing contracts for continuing care or
  233  continuing care at-home, or constructing a facility for the
  234  purpose of providing continuing care in this state without a
  235  certificate of authority obtained from the office as provided in
  236  this chapter. This section subsection does not prohibit the
  237  preparation of a construction site or construction of a model
  238  residence unit for marketing purposes, or both. The office may
  239  allow the purchase of an existing building for the purpose of
  240  providing continuing care if the office determines that the
  241  purchase is not being made to circumvent the prohibitions in
  242  this section.
  243         (2)Written approval must be obtained from the office
  244  before commencing construction or marketing for an expansion of
  245  a certificated facility equivalent to the addition of at least
  246  20 percent of existing units or 20 percent or more in the number
  247  of continuing care at-home contracts. This provision does not
  248  apply to construction for which a certificate of need from the
  249  Agency for Health Care Administration is required.
  250         (a)For providers that offer both continuing care and
  251  continuing care at-home, the 20 percent is based on the total of
  252  both existing units and existing contracts for continuing care
  253  at-home. For purposes of this subsection, an expansion includes
  254  increases in the number of constructed units or continuing care
  255  at-home contracts or a combination of both.
  256         (b)The application for such approval shall be on forms
  257  adopted by the commission and provided by the office. The
  258  application must include the feasibility study required by s.
  259  651.022(3) or s. 651.023(1)(b) and such other information as
  260  required by s. 651.023. If the expansion is only for continuing
  261  care at-home contracts, an actuarial study prepared by an
  262  independent actuary in accordance with standards adopted by the
  263  American Academy of Actuaries which presents the financial
  264  impact of the expansion may be substituted for the feasibility
  265  study.
  266         (c)In determining whether an expansion should be approved,
  267  the office shall use the criteria provided in ss. 651.022(6) and
  268  651.023(4).
  269         Section 6. Section 651.0215, Florida Statutes, is created
  270  to read:
  271         651.0215Consolidated application for a provisional
  272  certificate of authority and a certificate of authority;
  273  required restrictions on use of entrance fees.—
  274         (1)For an applicant to qualify for a certificate of
  275  authority without first obtaining a provisional certificate of
  276  authority, all of the following conditions must be met:
  277         (a)All reservation deposits and entrance fees must be
  278  placed in escrow in accordance with s. 651.033. The applicant
  279  may not use or pledge any part of an initial entrance fee for
  280  the construction or purchase of the facility or as security for
  281  long-term financing.
  282         (b)The reservation deposit may not exceed the lesser of
  283  $40,000 or 10 percent of the then-current fee for the unit
  284  selected by a resident and must be refundable at any time before
  285  the resident takes occupancy of the selected unit.
  286         (c)The resident contract must state that collection of the
  287  balance of the entrance fee is to occur after the resident is
  288  notified that his or her selected unit is available for
  289  occupancy and on or before the occupancy date.
  290         (2)The consolidated application must be on a form
  291  prescribed by the commission and must contain all of the
  292  following information:
  293         (a)All of the information required under s. 651.022(2).
  294         (b)A feasibility study prepared by an independent
  295  consultant which contains all of the information required by s.
  296  651.022(3) and financial forecasts or projections prepared in
  297  accordance with standards adopted by the American Institute of
  298  Certified Public Accountants or in accordance with standards for
  299  feasibility studies for continuing care retirement communities
  300  adopted by the Actuarial Standards Board.
  301         1.The feasibility study must take into account project
  302  costs, actual marketing results to date and marketing
  303  projections, resident fees and charges, competition, resident
  304  contract provisions, and other factors that affect the
  305  feasibility of operating the facility.
  306         2.If the feasibility study is prepared by an independent
  307  certified public accountant, it must contain an examination
  308  report, or a compilation report acceptable to the office,
  309  containing a financial forecast or projections for the first 5
  310  years of operations which take into account an actuary’s
  311  mortality and morbidity assumptions as the study relates to
  312  turnover, rates, fees, and charges. If the study is prepared by
  313  an independent consulting actuary, it must contain mortality and
  314  morbidity assumptions as it relates to turnover, rates, fees,
  315  and charges and an actuary’s signed opinion that the project as
  316  proposed is feasible and that the study has been prepared in
  317  accordance with Actuarial Standards of Practice No. 3 for
  318  Continuing Care Retirement Communities, Revised Edition,
  319  effective May 1, 2011.
  320         (c)Documents evidencing that commitments have been secured
  321  for construction financing and long-term financing or that a
  322  documented plan acceptable to the office has been adopted by the
  323  applicant for long-term financing.
  324         (d)Documents evidencing that all conditions of the lender
  325  have been satisfied to activate the commitment to disburse
  326  funds, other than the obtaining of the certificate of authority,
  327  the completion of construction, or the closing of the purchase
  328  of realty or buildings for the facility.
  329         (e)Documents evidencing that the aggregate amount of
  330  entrance fees received by or pledged to the applicant, plus
  331  anticipated proceeds from any long-term financing commitment and
  332  funds from all other sources in the actual possession of the
  333  applicant, equal at least 100 percent of the aggregate cost of
  334  constructing or purchasing, equipping, and furnishing the
  335  facility plus 100 percent of the anticipated startup losses of
  336  the facility.
  337         (f)A complete audited financial report of the applicant,
  338  prepared by an independent certified public accountant in
  339  accordance with generally accepted accounting principles, as of
  340  the date the applicant commenced business operations or for the
  341  fiscal year that ended immediately preceding the date of
  342  application, whichever is later; and complete unaudited
  343  quarterly financial statements attested to by the applicant
  344  after the date of the last audit.
  345         (g)Documents evidencing that the applicant will be able to
  346  comply with s. 651.035.
  347         (h)Such other reasonable data, financial statements, and
  348  pertinent information as the commission or office may require
  349  with respect to the applicant or the facility to determine the
  350  financial status of the facility and the management capabilities
  351  of its managers and owners.
  352  
  353  If any material change occurs in the facts set forth in an
  354  application filed with the office pursuant to this subsection,
  355  an amendment setting forth such change must be filed with the
  356  office within 10 business days after the applicant becomes aware
  357  of such change, and a copy of the amendment must be sent by
  358  registered mail to the principal office of the facility and to
  359  the principal office of the controlling company.
  360         (3)If an applicant has or proposes to have more than one
  361  facility offering continuing care or continuing care at-home, a
  362  separate certificate of authority must be obtained for each
  363  facility.
  364         (4)Within 45 days after receipt of the information
  365  required under subsection (2), the office shall examine the
  366  information and notify the applicant in writing, specifically
  367  requesting any additional information that the office is
  368  authorized to require. An application is deemed complete when
  369  the office receives all requested information and the applicant
  370  corrects any error or omission of which the applicant was timely
  371  notified or when the time for such notification has expired.
  372  Within 15 days after receipt of all of the requested additional
  373  information, the office shall notify the applicant in writing
  374  that all of the requested information has been received and that
  375  the application is deemed complete as of the date of the notice.
  376  Failure to notify the applicant in writing within the 15-day
  377  period constitutes acknowledgment by the office that it has
  378  received all requested additional information, and the
  379  application is deemed complete for purposes of review on the
  380  date the applicant files all of the required additional
  381  information.
  382         (5)Within 45 days after an application is deemed complete
  383  as set forth in subsection (4) and upon completion of the
  384  remaining requirements of this section, the office shall
  385  complete its review and issue or deny a certificate of authority
  386  to the applicant. If a certificate of authority is denied, the
  387  office shall notify the applicant in writing, citing the
  388  specific failures to satisfy this chapter, and the applicant is
  389  entitled to an administrative hearing pursuant to chapter 120.
  390         (6)The office shall issue a certificate of authority upon
  391  determining that the applicant meets all of the requirements of
  392  law and has submitted all of the information required under this
  393  section, that all escrow requirements have been satisfied, and
  394  that the fees prescribed in s. 651.015(2) have been paid.
  395         (7)The issuance of a certificate of authority entitles the
  396  applicant to begin construction and collect reservation deposits
  397  and entrance fees from prospective residents. The reservation
  398  contract must state the cancellation policy and the terms of the
  399  continuing care contract. All or any part of an entrance fee or
  400  reservation deposit collected must be placed in an escrow
  401  account or on deposit with the department pursuant to s.
  402  651.033.
  403         (8)The provider is entitled to secure release of the
  404  moneys held in escrow within 7 days after the office receives an
  405  affidavit from the provider, along with appropriate
  406  documentation to verify, and notification is provided to the
  407  escrow agent by certified mail, that all of the following
  408  conditions have been satisfied:
  409         (a)A certificate of occupancy has been issued.
  410         (b)Payment in full has been received for at least 70
  411  percent of the total units of a phase or of the total of the
  412  combined phases constructed. If a provider offering continuing
  413  care at-home is applying for a release of escrowed entrance
  414  fees, the same minimum requirement must be met for the
  415  continuing care contracts and for the continuing care at-home
  416  contracts independently of each other.
  417         (c)The provider has evidence of sufficient funds to meet
  418  the requirements of s. 651.035, which may include funds
  419  deposited in the initial entrance fee account.
  420         (d)Documents evidencing the intended application of the
  421  proceeds upon release and documents evidencing that the entrance
  422  fees, when released, will be applied as represented to the
  423  office.
  424  
  425  Notwithstanding chapter 120, only the provider, the escrow
  426  agent, and the office have a substantial interest in any office
  427  decision regarding release of escrow funds in any proceedings
  428  under chapter 120 or this chapter.
  429         (9)The office may not approve any application that
  430  includes in the plan of financing any encumbrance of the
  431  operating reserves or renewal and replacement reserves required
  432  by this chapter.
  433         (10)The office may not issue a certificate of authority
  434  for a facility that does not have a component that is to be
  435  licensed pursuant to part II of chapter 400 or part I of chapter
  436  429, or that does not offer personal services or nursing
  437  services through written contractual agreement. A written
  438  contractual agreement must be disclosed in the contract for
  439  continuing care or continuing care at-home and is subject to s.
  440  651.1151.
  441         Section 7. Subsections (2), (3), (6), and (8) of section
  442  651.022, Florida Statutes, are amended, and subsection (5) of
  443  that section is republished, to read:
  444         651.022 Provisional certificate of authority; application.—
  445         (2) The application for a provisional certificate of
  446  authority must shall be on a form prescribed by the commission
  447  and must shall contain the following information:
  448         (a) If the applicant or provider is a corporation, a copy
  449  of the articles of incorporation and bylaws; if the applicant or
  450  provider is a partnership or other unincorporated association, a
  451  copy of the partnership agreement, articles of association, or
  452  other membership agreement; and, if the applicant or provider is
  453  a trust, a copy of the trust agreement or instrument.
  454         (b) The full names, residences, and business addresses of:
  455         1. The proprietor, if the applicant or provider is an
  456  individual.
  457         2. Every partner or member, if the applicant or provider is
  458  a partnership or other unincorporated association, however
  459  organized, having fewer than 50 partners or members, together
  460  with the business name and address of the partnership or other
  461  organization.
  462         3. The principal partners or members, if the applicant or
  463  provider is a partnership or other unincorporated association,
  464  however organized, having 50 or more partners or members,
  465  together with the business name and business address of the
  466  partnership or other organization. If such unincorporated
  467  organization has officers and a board of directors, the full
  468  name and business address of each officer and director may be
  469  set forth in lieu of the full name and business address of its
  470  principal members.
  471         4. The corporation and each officer and director thereof,
  472  if the applicant or provider is a corporation.
  473         5. Every trustee and officer, if the applicant or provider
  474  is a trust.
  475         6. The manager, whether an individual, corporation,
  476  partnership, or association.
  477         7. Any stockholder holding at least a 10 percent interest
  478  in the operations of the facility in which the care is to be
  479  offered.
  480         8. Any person whose name is required to be provided in the
  481  application under this paragraph and who owns any interest in or
  482  receives any remuneration from, directly or indirectly, any
  483  professional service firm, association, trust, partnership, or
  484  corporation providing goods, leases, or services to the facility
  485  for which the application is made, with a real or anticipated
  486  value of $10,000 or more, and the name and address of the
  487  professional service firm, association, trust, partnership, or
  488  corporation in which such interest is held. The applicant shall
  489  describe such goods, leases, or services and the probable cost
  490  to the facility or provider and shall describe why such goods,
  491  leases, or services should not be purchased from an independent
  492  entity.
  493         9. Any person, corporation, partnership, association, or
  494  trust owning land or property leased to the facility, along with
  495  a copy of the lease agreement.
  496         10. Any affiliated parent or subsidiary corporation or
  497  partnership.
  498         (c)1. Evidence that the applicant is reputable and of
  499  responsible character. If the applicant is a firm, association,
  500  organization, partnership, business trust, corporation, or
  501  company, the form must shall require evidence that the members
  502  or shareholders are reputable and of responsible character, and
  503  the person in charge of providing care under a certificate of
  504  authority are shall likewise be required to produce evidence of
  505  being reputable and of responsible character.
  506         2. Evidence satisfactory to the office of the ability of
  507  the applicant to comply with the provisions of this chapter and
  508  with rules adopted by the commission pursuant to this chapter.
  509         3. A statement of whether a person identified in the
  510  application for a provisional certificate of authority or the
  511  administrator or manager of the facility, if such person has
  512  been designated, or any such person living in the same location:
  513         a. Has been convicted of a felony or has pleaded nolo
  514  contendere to a felony charge, or has been held liable or has
  515  been enjoined in a civil action by final judgment, if the felony
  516  or civil action involved fraud, embezzlement, fraudulent
  517  conversion, or misappropriation of property.
  518         b. Is subject to a currently effective injunctive or
  519  restrictive order or federal or state administrative order
  520  relating to business activity or health care as a result of an
  521  action brought by a public agency or department, including,
  522  without limitation, an action affecting a license under chapter
  523  400 or chapter 429.
  524  
  525  The statement must shall set forth the court or agency, the date
  526  of conviction or judgment, and the penalty imposed or damages
  527  assessed, or the date, nature, and issuer of the order. Before
  528  determining whether a provisional certificate of authority is to
  529  be issued, the office may make an inquiry to determine the
  530  accuracy of the information submitted pursuant to subparagraphs
  531  1., 2., and 3. 1. and 2.
  532         (d) The contracts for continuing care and continuing care
  533  at-home to be entered into between the provider and residents
  534  which meet the minimum requirements of s. 651.055 or s. 651.057
  535  and which include a statement describing the procedures required
  536  by law relating to the release of escrowed entrance fees. Such
  537  statement may be furnished through an addendum.
  538         (e) Any advertisement or other written material proposed to
  539  be used in the solicitation of residents.
  540         (f) Such other reasonable data, financial statements, and
  541  pertinent information as the commission or office may reasonably
  542  require with respect to the provider or the facility, including
  543  the most recent audited financial report statements of
  544  comparable facilities currently or previously owned, managed, or
  545  developed by the applicant or its principal, to assist in
  546  determining the financial viability of the project and the
  547  management capabilities of its managers and owners.
  548         (g) The forms of the residency contracts, reservation
  549  contracts, escrow agreements, and wait list contracts, if
  550  applicable, which are proposed to be used by the provider in the
  551  furnishing of care. The office shall approve contracts and
  552  escrow agreements that comply with ss. 651.023(1)(c), 651.033,
  553  651.055, and 651.057. Thereafter, no other form of contract or
  554  agreement may be used by the provider until it has been
  555  submitted to the office and approved.
  556  
  557  If any material change occurs in the facts set forth in an
  558  application filed with the office pursuant to this subsection,
  559  an amendment setting forth such change must be filed with the
  560  office within 10 business days after the applicant becomes aware
  561  of such change, and a copy of the amendment must be sent by
  562  registered mail to the principal office of the facility and to
  563  the principal office of the controlling company.
  564         (3) In addition to the information required in subsection
  565  (2), an applicant for a provisional certificate of authority
  566  shall submit a market feasibility study with appropriate
  567  financial, marketing, and actuarial assumptions for the first 5
  568  years of operations. The market feasibility study must shall
  569  include at least the following information:
  570         (a) A description of the proposed facility, including the
  571  location, size, anticipated completion date, and the proposed
  572  construction program.
  573         (b) An identification and evaluation of the primary and, if
  574  appropriate, the secondary market areas of the facility and the
  575  projected unit sales per month.
  576         (c) Projected revenues, including anticipated entrance
  577  fees; monthly service fees; nursing care revenues rates, if
  578  applicable; and all other sources of revenue, including the
  579  total amount of debt financing required.
  580         (d) Projected expenses, including staffing requirements and
  581  salaries; cost of property, plant, and equipment, including
  582  depreciation expense; interest expense; marketing expense; and
  583  other operating expenses.
  584         (e) A projected balance sheet Current assets and
  585  liabilities of the applicant.
  586         (f) Expectations of the financial condition of the project,
  587  including the projected cash flow, and a projected balance sheet
  588  and an estimate of the funds anticipated to be necessary to
  589  cover startup losses.
  590         (g) The inflation factor, if any, assumed in the
  591  feasibility study for the proposed facility and how and where it
  592  is applied.
  593         (h) Project costs and the total amount of debt financing
  594  required, marketing projections, resident fees and charges, the
  595  competition, resident contract provisions, and other factors
  596  that which affect the feasibility of the facility.
  597         (i) Appropriate population projections, including morbidity
  598  and mortality assumptions.
  599         (j) The name of the person who prepared the feasibility
  600  study and the experience of such person in preparing similar
  601  studies or otherwise consulting in the field of continuing care.
  602  The preparer of the feasibility study may be the provider or a
  603  contracted third party.
  604         (k)Any other information that the applicant deems relevant
  605  and appropriate to enable the office to make a more informed
  606  determination.
  607         (5)(a) Within 30 days after receipt of an application for a
  608  provisional certificate of authority, the office shall examine
  609  the application and shall notify the applicant in writing,
  610  specifically setting forth and specifically requesting any
  611  additional information the office is permitted by law to
  612  require. If the application submitted is determined by the
  613  office to be substantially incomplete so as to require
  614  substantial additional information, including biographical
  615  information, the office may return the application to the
  616  applicant with a written notice that the application as received
  617  is substantially incomplete and, therefore, unacceptable for
  618  filing without further action required by the office. Any filing
  619  fee received shall be refunded to the applicant.
  620         (b) Within 15 days after receipt of all of the requested
  621  additional information, the office shall notify the applicant in
  622  writing that all of the requested information has been received
  623  and the application is deemed to be complete as of the date of
  624  the notice. Failure to so notify the applicant in writing within
  625  the 15-day period shall constitute acknowledgment by the office
  626  that it has received all requested additional information, and
  627  the application shall be deemed to be complete for purposes of
  628  review upon the date of the filing of all of the requested
  629  additional information.
  630         (6) Within 45 days after the date an application is deemed
  631  complete as set forth in paragraph (5)(b), the office shall
  632  complete its review and issue a provisional certificate of
  633  authority to the applicant based upon its review and a
  634  determination that the application meets all requirements of
  635  law, that the feasibility study was based on sufficient data and
  636  reasonable assumptions, and that the applicant will be able to
  637  provide continuing care or continuing care at-home as proposed
  638  and meet all financial and contractual obligations related to
  639  its operations, including the financial requirements of this
  640  chapter. If the application is denied, the office shall notify
  641  the applicant in writing, citing the specific failures to meet
  642  the provisions of this chapter. Such denial entitles the
  643  applicant to a hearing pursuant to chapter 120.
  644         (8) The office may shall not approve any application that
  645  which includes in the plan of financing any encumbrance of the
  646  operating reserves or renewal and replacement reserves required
  647  by this chapter.
  648         Section 8. Subsection (1) and subsections (4) through (9)
  649  of section 651.023, Florida Statutes, are amended, and
  650  subsection (2) of that section is republished, to read:
  651         651.023 Certificate of authority; application.—
  652         (1) After issuance of a provisional certificate of
  653  authority, the office shall issue to the holder of such
  654  provisional certificate a certificate of authority if the holder
  655  of the provisional certificate provides the office with the
  656  following information:
  657         (a) Any material change in status with respect to the
  658  information required to be filed under s. 651.022(2) in the
  659  application for the provisional certificate.
  660         (b) A feasibility study prepared by an independent
  661  consultant which contains all of the information required by s.
  662  651.022(3) and financial forecasts or projections prepared in
  663  accordance with standards adopted by the American Institute of
  664  Certified Public Accountants or in accordance with standards for
  665  feasibility studies or continuing care retirement communities
  666  adopted by the Actuarial Standards Board.
  667         1.The study must also contain an independent evaluation
  668  and examination opinion, or a comparable opinion acceptable to
  669  the office, by the consultant who prepared the study, of the
  670  underlying assumptions used as a basis for the forecasts or
  671  projections in the study and that the assumptions are reasonable
  672  and proper and the project as proposed is feasible.
  673         1.2. The study must take into account project costs, actual
  674  marketing results to date and marketing projections, resident
  675  fees and charges, competition, resident contract provisions, and
  676  any other factors which affect the feasibility of operating the
  677  facility.
  678         2.3. If the study is prepared by an independent certified
  679  public accountant, it must contain an examination opinion or a
  680  compilation report acceptable to the office containing a
  681  financial forecast or projections for the first 5 3 years of
  682  operations which take into account an actuary’s mortality and
  683  morbidity assumptions as the study relates to turnover, rates,
  684  fees, and charges and financial projections having a compilation
  685  opinion for the next 3 years. If the study is prepared by an
  686  independent consulting actuary, it must contain mortality and
  687  morbidity assumptions as the study relates to turnover, rates,
  688  fees, and charges data and an actuary’s signed opinion that the
  689  project as proposed is feasible and that the study has been
  690  prepared in accordance with standards adopted by the American
  691  Academy of Actuaries.
  692         (c) Subject to subsection (4), a provider may submit an
  693  application for a certificate of authority and any required
  694  exhibits upon submission of documents evidencing proof that the
  695  project has a minimum of 30 percent of the units reserved for
  696  which the provider is charging an entrance fee. This does not
  697  apply to an application for a certificate of authority for the
  698  acquisition of a facility for which a certificate of authority
  699  was issued before October 1, 1983, to a provider who
  700  subsequently becomes a debtor in a case under the United States
  701  Bankruptcy Code, 11 U.S.C. ss. 101 et seq., or to a provider for
  702  which the department has been appointed receiver pursuant to
  703  part II of chapter 631.
  704         (d) Documents evidencing Proof that commitments have been
  705  secured for both construction financing and long-term financing
  706  or a documented plan acceptable to the office has been adopted
  707  by the applicant for long-term financing.
  708         (e) Documents evidencing Proof that all conditions of the
  709  lender have been satisfied to activate the commitment to
  710  disburse funds other than the obtaining of the certificate of
  711  authority, the completion of construction, or the closing of the
  712  purchase of realty or buildings for the facility.
  713         (f) Documents evidencing Proof that the aggregate amount of
  714  entrance fees received by or pledged to the applicant, plus
  715  anticipated proceeds from any long-term financing commitment,
  716  plus funds from all other sources in the actual possession of
  717  the applicant, equal at least 100 percent of the aggregate cost
  718  of constructing or purchasing, equipping, and furnishing the
  719  facility plus 100 percent of the anticipated startup losses of
  720  the facility.
  721         (g) A complete audited financial report statements of the
  722  applicant, prepared by an independent certified public
  723  accountant in accordance with generally accepted accounting
  724  principles, as of the date the applicant commenced business
  725  operations or for the fiscal year that ended immediately
  726  preceding the date of application, whichever is later, and
  727  complete unaudited quarterly financial statements attested to by
  728  the applicant after the date of the last audit.
  729         (h) Documents evidencing Proof that the applicant has
  730  complied with the escrow requirements of subsection (5) or
  731  subsection (7) and will be able to comply with s. 651.035.
  732         (i) Such other reasonable data, financial statements, and
  733  pertinent information as the commission or office may require
  734  with respect to the applicant or the facility, to determine the
  735  financial status of the facility and the management capabilities
  736  of its managers and owners.
  737  
  738  If any material change occurs in the facts set forth in an
  739  application filed with the office pursuant to this subsection,
  740  an amendment setting forth such change must be filed with the
  741  office within 10 business days after the applicant becomes aware
  742  of such change, and a copy of the amendment must be sent by
  743  registered mail to the principal office of the facility and to
  744  the principal office of the controlling company.
  745         (2) Within 30 days after receipt of the information
  746  required under subsection (1), the office shall examine such
  747  information and notify the provider in writing, specifically
  748  requesting any additional information the office is permitted by
  749  law to require. Within 15 days after receipt of all of the
  750  requested additional information, the office shall notify the
  751  provider in writing that all of the requested information has
  752  been received and the application is deemed to be complete as of
  753  the date of the notice. Failure to notify the applicant in
  754  writing within the 15-day period constitutes acknowledgment by
  755  the office that it has received all requested additional
  756  information, and the application shall be deemed complete for
  757  purposes of review on the date of filing all of the required
  758  additional information.
  759         (4) The office shall issue a certificate of authority upon
  760  determining that the applicant meets all requirements of law and
  761  has submitted all of the information required by this section,
  762  that all escrow requirements have been satisfied, and that the
  763  fees prescribed in s. 651.015(2) have been paid.
  764         (a) A Notwithstanding satisfaction of the 30-percent
  765  minimum reservation requirement of paragraph (1)(c), no
  766  certificate of authority may not shall be issued until
  767  documentation evidencing that the project has a minimum of 50
  768  percent of the units reserved for which the provider is charging
  769  an entrance fee, and proof is provided to the office. If a
  770  provider offering continuing care at-home is applying for a
  771  certificate of authority or approval of an expansion pursuant to
  772  s. 651.021(2), the same minimum reservation requirements must be
  773  met for the continuing care and continuing care at-home
  774  contracts, independently of each other.
  775         (b) In order for a unit to be considered reserved under
  776  this section, the provider must collect a minimum deposit of the
  777  lesser of $40,000 or 10 percent of the then-current entrance fee
  778  for that unit, and may assess a forfeiture penalty of 2 percent
  779  of the entrance fee due to termination of the reservation
  780  contract after 30 days for any reason other than the death or
  781  serious illness of the resident, the failure of the provider to
  782  meet its obligations under the reservation contract, or other
  783  circumstances beyond the control of the resident that equitably
  784  entitle the resident to a refund of the resident’s deposit. The
  785  reservation contract must state the cancellation policy and the
  786  terms of the continuing care or continuing care at-home contract
  787  to be entered into.
  788         (5) Up to 25 percent of the moneys paid for all or any part
  789  of an initial entrance fee may be included or pledged for the
  790  construction or purchase of the facility or as security for
  791  long-term financing. As used in this section, the term “initial
  792  entrance fee” means the total entrance fee charged by the
  793  facility to the first occupant of a unit.
  794         (a) A minimum of 75 percent of the moneys paid for all or
  795  any part of an initial entrance fee collected for continuing
  796  care or continuing care at-home must shall be placed in an
  797  escrow account or on deposit with the department as prescribed
  798  in s. 651.033.
  799         (b)For an expansion as provided in s. 651.021(2), a
  800  minimum of 75 percent of the moneys paid for all or any part of
  801  an initial entrance fee collected for continuing care and 50
  802  percent of the moneys paid for all or any part of an initial fee
  803  collected for continuing care at-home shall be placed in an
  804  escrow account or on deposit with the department as prescribed
  805  in s. 651.033.
  806         (6) The provider is entitled to secure release of the
  807  moneys held in escrow within 7 days after receipt by the office
  808  of an affidavit from the provider, along with appropriate copies
  809  to verify, and notification to the escrow agent by certified
  810  mail, that the following conditions have been satisfied:
  811         (a) A certificate of occupancy has been issued.
  812         (b) Payment in full has been received for at least 70
  813  percent of the total units of a phase or of the total of the
  814  combined phases constructed. If a provider offering continuing
  815  care at-home is applying for a release of escrowed entrance
  816  fees, the same minimum requirement must be met for the
  817  continuing care and continuing care at-home contracts,
  818  independently of each other.
  819         (c)The consultant who prepared the feasibility study
  820  required by this section or a substitute approved by the office
  821  certifies within 12 months before the date of filing for office
  822  approval that there has been no material adverse change in
  823  status with regard to the feasibility study. If a material
  824  adverse change exists at the time of submission, sufficient
  825  information acceptable to the office and the feasibility
  826  consultant must be submitted which remedies the adverse
  827  condition.
  828         (c)(d)Documents evidencing Proof that commitments have
  829  been secured or a documented plan adopted by the applicant has
  830  been approved by the office for long-term financing.
  831         (d)(e)Documents evidencing Proof that the provider has
  832  sufficient funds to meet the requirements of s. 651.035, which
  833  may include funds deposited in the initial entrance fee account.
  834         (e)(f)Documents evidencing Proof as to the intended
  835  application of the proceeds upon release and documentation proof
  836  that the entrance fees when released will be applied as
  837  represented to the office.
  838         (f)If any material change occurred in the facts set forth
  839  in the application filed with the office pursuant to subsection
  840  (1), the applicant timely filed the amendment setting forth such
  841  change with the office and sent copies of the amendment to the
  842  principal office of the facility and to the principal office of
  843  the controlling company as required under that subsection.
  844  
  845  Notwithstanding chapter 120, no person, other than the provider,
  846  the escrow agent, and the office, may have a substantial
  847  interest in any office decision regarding release of escrow
  848  funds in any proceedings under chapter 120 or this chapter
  849  regarding release of escrow funds.
  850         (7) In lieu of the provider fulfilling the requirements in
  851  subsection (5) and paragraphs (6)(b) and (c) (d), the office may
  852  authorize the release of escrowed funds to retire all
  853  outstanding debts on the facility and equipment upon application
  854  of the provider and upon the provider’s showing that the
  855  provider will grant to the residents a first mortgage on the
  856  land, buildings, and equipment that constitute the facility, and
  857  that the provider has satisfied paragraphs (6)(a), (c), and (d)
  858  (e). Such mortgage shall secure the refund of the entrance fee
  859  in the amount required by this chapter. The granting of such
  860  mortgage is subject to the following:
  861         (a) The first mortgage is granted to an independent trust
  862  that is beneficially held by the residents. The document
  863  creating the trust must include a provision that agrees to an
  864  annual audit and will furnish to the office all information the
  865  office may reasonably require. The mortgage may secure payment
  866  on bonds issued to the residents or trustee. Such bonds are
  867  redeemable after termination of the residency contract in the
  868  amount and manner required by this chapter for the refund of an
  869  entrance fee.
  870         (b) Before granting a first mortgage to the residents, all
  871  construction must be substantially completed and substantially
  872  all equipment must be purchased. No part of the entrance fees
  873  may be pledged as security for a construction loan or otherwise
  874  used for construction expenses before the completion of
  875  construction.
  876         (c) If the provider is leasing the land or buildings used
  877  by the facility, the leasehold interest must be for a term of at
  878  least 30 years.
  879         (8) The timeframes provided under s. 651.022(5) and (6)
  880  apply to applications submitted under s. 651.021(2). The office
  881  may not issue a certificate of authority to a facility that does
  882  not have a component that is to be licensed pursuant to part II
  883  of chapter 400 or to part I of chapter 429 or that does not
  884  offer personal services or nursing services through written
  885  contractual agreement. A written contractual agreement must be
  886  disclosed in the contract for continuing care or continuing care
  887  at-home and is subject to the provisions of s. 651.1151,
  888  relating to administrative, vendor, and management contracts.
  889         (9) The office may not approve an application that includes
  890  in the plan of financing any encumbrance of the operating
  891  reserves or renewal and replacement reserves required by this
  892  chapter.
  893         Section 9. Section 651.024, Florida Statutes, is amended to
  894  read:
  895         651.024 Acquisition.—
  896         (1) A person who seeks to assume the role of general
  897  partner of a provider or to otherwise assume ownership or
  898  possession of, or control over, 10 percent or more of a
  899  provider, a controlling company of the provider, or a provider’s
  900  assets, based on the balance sheet from the most recent
  901  financial audit report filed with the office, is issued a
  902  certificate of authority to operate a continuing care facility
  903  or a provisional certificate of authority shall be subject to
  904  the provisions of s. 628.4615 and is not required to make
  905  filings pursuant to s. 651.022, s. 651.023, or s. 651.0245.
  906         (2)A person who seeks to acquire and become the provider
  907  for a facility is subject to s. 651.0245 and is not required to
  908  make filings pursuant to ss. 628.4615, 651.022, and 651.023.
  909         (3)In addition to the provider or the controlling company,
  910  the office has standing to petition a circuit court under s.
  911  628.4615(9).
  912         Section 10. Section 651.0245, Florida Statutes, is created
  913  to read:
  914         651.0245Application for the simultaneous acquisition of a
  915  facility and issuance of a certificate of authority.—
  916         (1)Except with the prior written approval of the office, a
  917  person may not, individually or in conjunction with any
  918  affiliated person of such person, directly or indirectly acquire
  919  a facility operating under a subsisting certificate of authority
  920  and engage in the business of providing continuing care.
  921         (2)An applicant seeking simultaneous acquisition of a
  922  facility and issuance of a certificate of authority must:
  923         (a)Comply with the notice requirements of s.
  924  628.4615(2)(a); and
  925         (b)File an application in the form required by the office
  926  and cooperate with the office’s review of the application.
  927         (3)The commission shall adopt by rule application
  928  requirements equivalent to those described in ss. 628.4615(4)
  929  and (5), 651.022(2), and 651.023(1)(b). The office shall review
  930  the application and issue an approval or disapproval of the
  931  filing in accordance with ss. 628.4615(6)(a) and (c), (7)-(10),
  932  and (14); and 651.023(1)(b).
  933         (4)In addition to the provider or the controlling company,
  934  the office has standing to petition a circuit court under s.
  935  628.4615(9).
  936         (5)A person may rebut a presumption of control by filing a
  937  disclaimer of control with the office on a form prescribed by
  938  the commission. The disclaimer must fully disclose all material
  939  relationships and bases for affiliation between the person and
  940  the provider or facility, as well as the basis for disclaiming
  941  the affiliation. In lieu of such form, a person or acquiring
  942  party may file with the office a copy of a Schedule 13G filed
  943  with the Securities and Exchange Commission pursuant to Rule
  944  13d-1(b) or (c), 17 C.F.R. s. 240.13d-1, under the Securities
  945  Exchange Act of 1934, as amended. After a disclaimer has been
  946  filed, the provider or facility is relieved of any duty to
  947  register or report under this section which may arise out of the
  948  provider’s or facility’s relationship with the person, unless
  949  the office disallows the disclaimer.
  950         (6)The commission may adopt rules as necessary to
  951  administer this section.
  952         Section 11. Section 651.0246, Florida Statutes, is created
  953  to read:
  954         651.0246Expansions.—
  955         (1)(a)A provider must obtain written approval from the
  956  office before commencing construction or marketing for an
  957  expansion of a certificated facility equivalent to the addition
  958  of at least 20 percent of existing units or 20 percent or more
  959  of the number of continuing care at-home contracts. If the
  960  provider has exceeded the current statewide median for days cash
  961  on hand, debt service coverage ratio, and total facility
  962  occupancy for the most recent two consecutive annual reporting
  963  periods, the provider is automatically granted approval to
  964  expand the total number of existing units by up to 35 percent
  965  upon submitting a letter to the office indicating the total
  966  number of planned units in the expansion, the proposed sources
  967  and uses of funds, and an attestation that the provider
  968  understands and pledges to comply with all minimum liquid
  969  reserve and escrow account requirements. As used in this
  970  section, the term “existing units” means the sum of the total
  971  number of independent living units and assisted living units
  972  identified in the most recent annual report filed with the
  973  office pursuant to s. 651.026. For purposes of this section, the
  974  statewide median for days cash on hand, debt service coverage
  975  ratio, and total facility occupancy is the median calculated in
  976  the most recent annual report submitted by the office to the
  977  Continuing Care Advisory Council pursuant to s. 651.121(8). This
  978  section does not apply to construction for which a certificate
  979  of need from the Agency for Health Care Administration is
  980  required.
  981         (b)The application for the approval of an addition
  982  consisting of 20 percent or more of existing units or continuing
  983  care at-home contracts must be on forms adopted by the
  984  commission. The application must include the feasibility study
  985  required by this section and such other information as
  986  reasonably requested by the office. If the expansion is only for
  987  continuing care at-home contracts, an actuarial study prepared
  988  by an independent actuary in accordance with standards adopted
  989  by the American Academy of Actuaries which presents the
  990  financial impact of the expansion may be substituted for the
  991  feasibility study.
  992         (c)In determining whether an expansion should be approved,
  993  the office shall consider:
  994         1.Whether the application meets all requirements of law;
  995         2.Whether the feasibility study was based on sufficient
  996  data and reasonable assumptions; and
  997         3.Whether the applicant will be able to provide continuing
  998  care or continuing care at-home as proposed and meet all
  999  financial obligations related to its operations, including the
 1000  financial requirements of this chapter.
 1001  
 1002  If the application is denied, the office must notify the
 1003  applicant in writing, citing the specific failures to meet the
 1004  provisions of this chapter. A denial entitles the applicant to a
 1005  hearing pursuant to chapter 120.
 1006         (2)A provider applying for expansion of a certificated
 1007  facility must submit all of the following:
 1008         (a)A feasibility study prepared by an independent
 1009  certified public accountant. The feasibility study must include
 1010  at least the following information:
 1011         1.A description of the facility and proposed expansion,
 1012  including the location, the size, the anticipated completion
 1013  date, and the proposed construction program.
 1014         2.An identification and evaluation of the primary and, if
 1015  applicable, secondary market areas of the facility and the
 1016  projected unit sales per month.
 1017         3.Projected revenues, including anticipated entrance fees;
 1018  monthly service fees; nursing care revenues, if applicable; and
 1019  all other sources of revenue.
 1020         4.Projected expenses, including for staffing requirements
 1021  and salaries; the cost of property, plant, and equipment,
 1022  including depreciation expense; interest expense; marketing
 1023  expense; and other operating expenses.
 1024         5.A projected balance sheet of the applicant.
 1025         6.The expectations for the financial condition of the
 1026  project, including the projected cash flow and an estimate of
 1027  the funds anticipated to be necessary to cover startup losses.
 1028         7.The inflation factor, if any, assumed in the study for
 1029  the proposed expansion and how and where it is applied.
 1030         8.Project costs; the total amount of debt financing
 1031  required; marketing projections; resident rates, fees, and
 1032  charges; the competition; resident contract provisions; and
 1033  other factors that affect the feasibility of the facility.
 1034         9.Appropriate population projections, including morbidity
 1035  and mortality assumptions.
 1036         10.The name of the person who prepared the feasibility
 1037  study and his or her experience in preparing similar studies or
 1038  otherwise consulting in the field of continuing care.
 1039         11.Financial forecasts or projections prepared in
 1040  accordance with standards adopted by the American Institute of
 1041  Certified Public Accountants or in accordance with standards for
 1042  feasibility studies for continuing care retirement communities
 1043  adopted by the Actuarial Standards Board.
 1044         12.An independent evaluation and examination opinion for
 1045  the first 5 years of operations, or a comparable opinion
 1046  acceptable to the office, by the consultant who prepared the
 1047  study, of the underlying assumptions used as a basis for the
 1048  forecasts or projections in the study and that the assumptions
 1049  are reasonable and proper and the project as proposed is
 1050  feasible.
 1051         13.Any other information that the provider deems relevant
 1052  and appropriate to provide to enable the office to make a more
 1053  informed determination.
 1054         (b)Such other reasonable data, financial statements, and
 1055  pertinent information as the commission or office may require
 1056  with respect to the applicant or the facility to determine the
 1057  financial status of the facility and the management capabilities
 1058  of its managers and owners.
 1059  
 1060  If any material change occurs in the facts set forth in an
 1061  application filed with the office pursuant to this section, an
 1062  amendment setting forth such change must be filed with the
 1063  office within 10 business days after the applicant becomes aware
 1064  of such change, and a copy of the amendment must be sent by
 1065  registered mail to the principal office of the facility and to
 1066  the principal office of the controlling company.
 1067         (3)A minimum of 75 percent of the moneys paid for all or
 1068  any part of an initial entrance fee or reservation deposit
 1069  collected for units in the expansion and 50 percent of the
 1070  moneys paid for all or any part of an initial fee collected for
 1071  continuing care at-home contracts in the expansion must be
 1072  placed in an escrow account or on deposit with the department as
 1073  prescribed in s. 651.033. Up to 25 percent of the moneys paid
 1074  for all or any part of an initial entrance fee or reservation
 1075  deposit may be included or pledged for the construction or
 1076  purchase of the facility or as security for long-term financing.
 1077  As used in this section, the term “initial entrance fee” means
 1078  the total entrance fee charged by the facility to the first
 1079  occupant of a unit.
 1080         (4)The provider is entitled to secure release of the
 1081  moneys held in escrow within 7 days after receipt by the office
 1082  of an affidavit from the provider, along with appropriate copies
 1083  to verify, and notification to the escrow agent by certified
 1084  mail that the following conditions have been satisfied:
 1085         (a)A certificate of occupancy has been issued.
 1086         (b)Payment in full has been received for at least 50
 1087  percent of the total units of a phase or of the total of the
 1088  combined phases constructed. If a provider offering continuing
 1089  care at-home is applying for a release of escrowed entrance
 1090  fees, the same minimum requirement must be met for the
 1091  continuing care and continuing care at-home contracts
 1092  independently of each other.
 1093         (c)Documents evidencing that commitments have been secured
 1094  or that a documented plan adopted by the applicant has been
 1095  approved by the office for long-term financing.
 1096         (d)Documents evidencing that the provider has sufficient
 1097  funds to meet the requirements of s. 651.035, which may include
 1098  funds deposited in the initial entrance fee account.
 1099         (e)Documents evidencing the intended application of the
 1100  proceeds upon release and documentation that the entrance fees,
 1101  when released, will be applied as represented to the office.
 1102  
 1103  Notwithstanding chapter 120, only the provider, the escrow
 1104  agent, and the office have a substantial interest in any office
 1105  decision regarding release of escrow funds in any proceedings
 1106  under chapter 120 or this chapter.
 1107         (5)(a)Within 30 days after receipt of an application for
 1108  expansion, the office shall examine the application and shall
 1109  notify the applicant in writing, specifically requesting any
 1110  additional information that the office is authorized to require.
 1111  Within 15 days after the office receives all the requested
 1112  additional information, the office shall notify the applicant in
 1113  writing that the requested information has been received and
 1114  that the application is deemed complete as of the date of the
 1115  notice. Failure to notify the applicant in writing within the
 1116  15-day period constitutes acknowledgment by the office that it
 1117  has received all requested additional information, and the
 1118  application is deemed complete for purposes of review on the
 1119  date the applicant files all of the required additional
 1120  information. If the application submitted is determined by the
 1121  office to be substantially incomplete so as to require
 1122  substantial additional information, including biographical
 1123  information, the office may return the application to the
 1124  applicant with a written notice stating that the application as
 1125  received is substantially incomplete and, therefore, is
 1126  unacceptable for filing without further action required by the
 1127  office. Any filing fee received must be refunded to the
 1128  applicant.
 1129         (b)An application is deemed complete upon the office
 1130  receiving all requested information and the applicant correcting
 1131  any error or omission of which the applicant was timely notified
 1132  or when the time for such notification has expired. The office
 1133  shall notify the applicant in writing of the date on which the
 1134  application was deemed complete.
 1135         (6)Within 45 days after the date on which an application
 1136  is deemed complete as provided in paragraph (5)(b), the office
 1137  shall complete its review and, based upon its review, approve an
 1138  expansion by the applicant and issue a determination that the
 1139  application meets all requirements of law, that the feasibility
 1140  study was based on sufficient data and reasonable assumptions,
 1141  and that the applicant will be able to provide continuing care
 1142  or continuing care at-home as proposed and meet all financial
 1143  and contractual obligations related to its operations, including
 1144  the financial requirements of this chapter. If the application
 1145  is denied, the office must notify the applicant in writing,
 1146  citing the specific failures to meet the requirements of this
 1147  chapter. The denial entitles the applicant to a hearing pursuant
 1148  to chapter 120.
 1149         Section 12. Paragraphs (b) and (c) of subsection (2) and
 1150  subsection (3) of section 651.026, Florida Statutes, are
 1151  amended, subsection (10) is added to that section, and paragraph
 1152  (a) of subsection (2) of that section is republished, to read:
 1153         651.026 Annual reports.—
 1154         (2) The annual report shall be in such form as the
 1155  commission prescribes and shall contain at least the following:
 1156         (a) Any change in status with respect to the information
 1157  required to be filed under s. 651.022(2).
 1158         (b) A financial report statements audited by an independent
 1159  certified public accountant which must contain, for two or more
 1160  periods if the facility has been in existence that long, all of
 1161  the following:
 1162         1. An accountant’s opinion and, in accordance with
 1163  generally accepted accounting principles:
 1164         a. A balance sheet;
 1165         b. A statement of income and expenses;
 1166         c. A statement of equity or fund balances; and
 1167         d. A statement of changes in cash flows.
 1168         2. Notes to the financial report statements considered
 1169  customary or necessary for full disclosure or adequate
 1170  understanding of the financial report statements, financial
 1171  condition, and operation.
 1172         (c) The following financial information:
 1173         1. A detailed listing of the assets maintained in the
 1174  liquid reserve as required under s. 651.035 and in accordance
 1175  with part II of chapter 625;
 1176         2. A schedule giving additional information relating to
 1177  property, plant, and equipment having an original cost of at
 1178  least $25,000, so as to show in reasonable detail with respect
 1179  to each separate facility original costs, accumulated
 1180  depreciation, net book value, appraised value or insurable value
 1181  and date thereof, insurance coverage, encumbrances, and net
 1182  equity of appraised or insured value over encumbrances. Any
 1183  property not used in continuing care must be shown separately
 1184  from property used in continuing care;
 1185         3. The level of participation in Medicare or Medicaid
 1186  programs, or both;
 1187         4. A statement of all fees required of residents,
 1188  including, but not limited to, a statement of the entrance fee
 1189  charged, the monthly service charges, the proposed application
 1190  of the proceeds of the entrance fee by the provider, and the
 1191  plan by which the amount of the entrance fee is determined if
 1192  the entrance fee is not the same in all cases; and
 1193         5. Any change or increase in fees if the provider changes
 1194  the scope of, or the rates for, care or services, regardless of
 1195  whether the change involves the basic rate or only those
 1196  services available at additional costs to the resident;.
 1197         6. If the provider has more than one certificated facility,
 1198  or has operations that are not licensed under this chapter, it
 1199  shall submit a balance sheet, statement of income and expenses,
 1200  statement of equity or fund balances, and statement of cash
 1201  flows for each facility licensed under this chapter as
 1202  supplemental information to the audited financial report
 1203  statements required under paragraph (b); and.
 1204         7.The management’s calculation of the provider’s debt
 1205  service coverage ratio, occupancy, and days cash on hand for the
 1206  current reporting period.
 1207         (3) The commission shall adopt by rule additional
 1208  meaningful measures of assessing the financial viability of a
 1209  provider. The rule may include the following factors:
 1210         (a)Debt service coverage ratios.
 1211         (b)Current ratios.
 1212         (c)Adjusted current ratios.
 1213         (d)Cash flows.
 1214         (e)Occupancy rates.
 1215         (f)Other measures, ratios, or trends.
 1216         (g)Other factors as may be appropriate.
 1217         (10)By August 1 of each year, the office shall publish on
 1218  its website an annual industry report for the preceding calendar
 1219  year which contains all of the following:
 1220         (a)The median days cash on hand for all providers.
 1221         (b)The median debt service coverage ratio for all
 1222  providers.
 1223         (c)The median occupancy rate for all providers by setting,
 1224  including independent living, assisted living, skilled nursing,
 1225  and the entire facility.
 1226         (d)Documentation of the office’s compliance with the
 1227  requirements in s. 651.105(1) relating to examination
 1228  timeframes. The documentation must include the number of
 1229  examinations completed in the preceding calendar year, the
 1230  number of such examinations for which the report has been
 1231  issued, and the percentage of all examinations completed within
 1232  the statutorily required timeframes.
 1233         (e)The number of annual reports submitted to the office
 1234  pursuant to this section in the preceding calendar year and the
 1235  percentage of such reports that the office has reviewed in order
 1236  to determine whether a regulatory action level event has
 1237  occurred.
 1238         Section 13. Section 651.0261, Florida Statutes, is amended
 1239  to read:
 1240         651.0261 Quarterly and monthly statements.—
 1241         (1)Within 45 days after the end of each fiscal quarter,
 1242  each provider shall file a quarterly unaudited financial
 1243  statement of the provider or of the facility in the form
 1244  prescribed by commission rule and days cash on hand, occupancy,
 1245  debt service coverage ratio, and a detailed listing of the
 1246  assets maintained in the liquid reserve as required under s.
 1247  651.035. The last quarterly statement for a fiscal year is not
 1248  required if a provider does not have pending a regulatory action
 1249  level event, impairment, or a corrective action plan. If a
 1250  provider falls below two or more of the thresholds set forth in
 1251  s. 651.011(25) at the end of any fiscal quarter, the provider
 1252  shall submit to the office, at the same time as the quarterly
 1253  statement, an explanation of the circumstances and a description
 1254  of the actions it will take to meet the requirements.
 1255         (2) If the office finds, pursuant to rules of the
 1256  commission, that such information is needed to properly monitor
 1257  the financial condition of a provider or facility or is
 1258  otherwise needed to protect the public interest, the office may
 1259  require the provider to file:
 1260         (a)Within 25 days after the end of each month, a monthly
 1261  unaudited financial statement of the provider or of the facility
 1262  in the form prescribed by the commission by rule and a detailed
 1263  listing of the assets maintained in the liquid reserve as
 1264  required under s. 651.035, within 45 days after the end of each
 1265  fiscal quarter, a quarterly unaudited financial statement of the
 1266  provider or of the facility in the form prescribed by the
 1267  commission by rule. The commission may by rule require all or
 1268  part of the statements or filings required under this section to
 1269  be submitted by electronic means in a computer-readable form
 1270  compatible with the electronic data format specified by the
 1271  commission.
 1272         (b)Such other data, financial statements, and pertinent
 1273  information as the commission or office may reasonably require
 1274  with respect to the provider or the facility, its directors, or
 1275  its trustees; or with respect to any parent, subsidiary, or
 1276  affiliate, if the provider or facility relies on a contractual
 1277  or financial relationship with such parent, subsidiary, or
 1278  affiliate in order to meet the financial requirements of this
 1279  chapter, to determine the financial status of the provider or of
 1280  the facility and the management capabilities of its managers and
 1281  owners.
 1282         (3)A filing under subsection (2) may be required if any of
 1283  the following applies:
 1284         (a)The provider is:
 1285         1.Subject to administrative supervision proceedings;
 1286         2.Subject to a corrective action plan resulting from a
 1287  regulatory action level event and for up to 2 years after the
 1288  factors that caused the regulatory action level event have been
 1289  corrected; or
 1290         3.Subject to delinquency or receivership proceedings or
 1291  has filed for bankruptcy.
 1292         (b)The provider or facility displays a declining financial
 1293  position.
 1294         (c)A change of ownership of the provider or facility has
 1295  occurred within the previous 2 years.
 1296         (d)The provider is found to be impaired.
 1297         (4)The commission may by rule require all or part of the
 1298  statements or filings required under this section to be
 1299  submitted by electronic means in a computer-readable format
 1300  compatible with an electronic data format specified by the
 1301  commission.
 1302         Section 14. Section 651.028, Florida Statutes, is amended
 1303  to read:
 1304         651.028 Accredited facilities.—If A provider or facility is
 1305  deemed accredited for purposes of ss. 400.235(5)(b)1. and
 1306  651.105(1) if it is accredited without stipulations or
 1307  conditions by a process found by the commission office to be
 1308  acceptable, and substantially equivalent to the provisions of
 1309  this chapter, and consistent the office may, pursuant to rule of
 1310  the commission, waive any requirements of this chapter with
 1311  respect to the provider if the office finds that such waivers
 1312  are not inconsistent with the security protections intended by
 1313  this chapter.
 1314         Section 15. Subsections (1), (2), (3), and (5) of section
 1315  651.033, Florida Statutes, are amended, and subsection (6) is
 1316  added to that section, to read:
 1317         651.033 Escrow accounts.—
 1318         (1) When funds are required to be deposited in an escrow
 1319  account pursuant to s. 651.0215, s. 651.022, s. 651.023, s.
 1320  651.0246, s. 651.035, or s. 651.055:
 1321         (a) The escrow account must shall be established in a
 1322  Florida bank, Florida savings and loan association, or Florida
 1323  trust company, or a national bank that is chartered and
 1324  supervised by the Office of the Comptroller of the Currency
 1325  within the United States Department of the Treasury and that has
 1326  a branch in this state, which is acceptable to the office, or
 1327  such funds must be deposited on deposit with the department; and
 1328  the funds deposited therein shall be kept and maintained in an
 1329  account separate and apart from the provider’s business
 1330  accounts.
 1331         (b) An escrow agreement shall be entered into between the
 1332  bank, savings and loan association, or trust company and the
 1333  provider of the facility; the agreement shall state that its
 1334  purpose is to protect the resident or the prospective resident;
 1335  and, upon presentation of evidence of compliance with applicable
 1336  portions of this chapter, or upon order of a court of competent
 1337  jurisdiction, the escrow agent shall release and pay over the
 1338  funds, or portions thereof, together with any interest accrued
 1339  thereon or earned from investment of the funds, to the provider
 1340  or resident as directed.
 1341         (c) Any agreement establishing an escrow account required
 1342  under the provisions of this chapter is shall be subject to
 1343  approval by the office. The agreement must shall be in writing
 1344  and shall contain, in addition to any other provisions required
 1345  by law, a provision whereby the escrow agent agrees to abide by
 1346  the duties imposed by paragraphs (b) and (e), (3)(a), (3)(b),
 1347  and (5)(a) and subsection (6) under this section.
 1348         (d) All funds deposited in an escrow account, if invested,
 1349  shall be invested as set forth in part II of chapter 625;
 1350  however, such investment may not diminish the funds held in
 1351  escrow below the amount required by this chapter. Funds
 1352  deposited in an escrow account are not subject to charges by the
 1353  escrow agent except escrow agent fees associated with
 1354  administering the accounts, or subject to any liens, judgments,
 1355  garnishments, creditor’s claims, or other encumbrances against
 1356  the provider or facility except as provided in s. 651.035(1).
 1357         (e) At the request of either the provider or the office,
 1358  the escrow agent shall issue a statement indicating the status
 1359  of the escrow account.
 1360         (2) Notwithstanding s. 651.035(7), In addition, the escrow
 1361  agreement shall provide that the escrow agent or another person
 1362  designated to act in the escrow agent’s place and the provider,
 1363  except as otherwise provided in s. 651.035, shall notify the
 1364  office in writing at least 10 days before the withdrawal of any
 1365  portion of any funds required to be escrowed under the
 1366  provisions of s. 651.035. However, in the event of an emergency
 1367  and upon petition by the provider, the office may waive the 10
 1368  day notification period and allow a withdrawal of up to 10
 1369  percent of the required minimum liquid reserve. The office shall
 1370  have 3 working days to deny the petition for the emergency 10
 1371  percent withdrawal. If the office fails to deny the petition
 1372  within 3 working days, the petition is shall be deemed to have
 1373  been granted by the office. For purposes the purpose of this
 1374  section, the term “working day” means each day that is not a
 1375  Saturday, Sunday, or legal holiday as defined by Florida law.
 1376  Also, for purposes the purpose of this section, the day the
 1377  petition is received by the office is shall not be counted as
 1378  one of the 3 days.
 1379         (3) In addition, When entrance fees are required to be
 1380  deposited in an escrow account pursuant to s. 651.0215, s.
 1381  651.022, s. 651.023, s. 651.0246, or s. 651.055:
 1382         (a) The provider shall deliver to the resident a written
 1383  receipt. The receipt must show the payor’s name and address, the
 1384  date, the price of the care contract, and the amount of money
 1385  paid. A copy of each receipt, together with the funds, must
 1386  shall be deposited with the escrow agent or as provided in
 1387  paragraph (c). The escrow agent must shall release such funds to
 1388  the provider 7 days after the date of receipt of the funds by
 1389  the escrow agent if the provider, operating under a certificate
 1390  of authority issued by the office, has met the requirements of
 1391  s. 651.0215(8), s. 651.023(6), or s. 651.0246. However, if the
 1392  resident rescinds the contract within the 7-day period, the
 1393  escrow agent must shall release the escrowed fees to the
 1394  resident.
 1395         (b) At the request of an individual resident of a facility,
 1396  the escrow agent shall issue a statement indicating the status
 1397  of the resident’s portion of the escrow account.
 1398         (c) At the request of an individual resident of a facility,
 1399  the provider may hold the check for the 7-day period and may
 1400  shall not deposit it during this time period. If the resident
 1401  rescinds the contract within the 7-day period, the check must
 1402  shall be immediately returned to the resident. Upon the
 1403  expiration of the 7 days, the provider shall deposit the check.
 1404         (d) A provider may assess a nonrefundable fee, which is
 1405  separate from the entrance fee, for processing a prospective
 1406  resident’s application for continuing care or continuing care
 1407  at-home.
 1408         (5) When funds are required to be deposited in an escrow
 1409  account pursuant to s. 651.0215, s. 651.022, s. 651.023, s.
 1410  651.0246, or s. 651.035, the following shall apply:
 1411         (a) The escrow agreement must shall require that the escrow
 1412  agent furnish the provider with a quarterly statement indicating
 1413  the amount of any disbursements from or deposits to the escrow
 1414  account and the condition of the account during the period
 1415  covered by the statement. The agreement must shall require that
 1416  the statement be furnished to the provider by the escrow agent
 1417  on or before the 10th day of the month following the end of the
 1418  quarter for which the statement is due. If the escrow agent does
 1419  not provide the quarterly statement to the provider on or before
 1420  the 10th day of the month following the month for which the
 1421  statement is due, the office may, in its discretion, levy
 1422  against the escrow agent a fine not to exceed $25 a day for each
 1423  day of noncompliance with the provisions of this subsection.
 1424         (b) If the escrow agent does not provide the quarterly
 1425  statement to the provider on or before the 10th day of the month
 1426  following the quarter for which the statement is due, the
 1427  provider shall, on or before the 15th day of the month following
 1428  the quarter for which the statement is due, send a written
 1429  request for the statement to the escrow agent by certified mail
 1430  return receipt requested.
 1431         (c) On or before the 20th day of the month following the
 1432  quarter for which the statement is due, the provider shall file
 1433  with the office a copy of the escrow agent’s statement or, if
 1434  the provider has not received the escrow agent’s statement, a
 1435  copy of the written request to the escrow agent for the
 1436  statement.
 1437         (d) The office may, in its discretion, in addition to any
 1438  other penalty that may be provided for under this chapter, levy
 1439  a fine against the provider not to exceed $25 a day for each day
 1440  the provider fails to comply with the provisions of this
 1441  subsection.
 1442         (e) Funds held on deposit with the department are exempt
 1443  from the reporting requirements of this subsection.
 1444         (6)Except as described in paragraph (3)(a), the escrow
 1445  agent may not release or otherwise allow the transfer of funds
 1446  without the written approval of the office, unless the
 1447  withdrawal is from funds in excess of the amounts required by
 1448  ss. 651.0215, 651.022, 651.023, 651.0246, 651.035, and 651.055.
 1449         Section 16. Section 651.034, Florida Statutes, is created
 1450  to read:
 1451         651.034Financial and operating requirements for
 1452  providers.—
 1453         (1)(a)If a regulatory action level event occurs, the
 1454  office must:
 1455         1.Require the provider to prepare and submit a corrective
 1456  action plan or, if applicable, a revised corrective action plan;
 1457         2.Perform an examination pursuant to s. 651.105 or an
 1458  analysis, as the office considers necessary, of the assets,
 1459  liabilities, and operations of the provider, including a review
 1460  of the corrective action plan or the revised corrective action
 1461  plan; and
 1462         3.After the examination or analysis, issue a corrective
 1463  order, if necessary, specifying any corrective actions that the
 1464  office determines are required.
 1465         (b)In determining corrective actions, the office shall
 1466  consider any factor relevant to the provider based upon the
 1467  office’s examination or analysis of the assets, liabilities, and
 1468  operations of the provider. The provider must submit the
 1469  corrective action plan or the revised corrective action plan
 1470  within 30 days after the occurrence of the regulatory action
 1471  level event. The office shall review and approve or disapprove
 1472  the corrective action plan within 45 business days.
 1473         (c)The office may use members of the Continuing Care
 1474  Advisory Council, individually or as a group, or may retain
 1475  actuaries, investment experts, and other consultants to review a
 1476  provider’s corrective action plan or revised corrective action
 1477  plan, examine or analyze the assets, liabilities, and operations
 1478  of a provider, and formulate the corrective order with respect
 1479  to the provider. The costs and expenses relating to consultants
 1480  must be borne by the affected provider.
 1481         (2)Except when the office’s remedial rights are suspended
 1482  pursuant to s. 651.114(11)(a), the office must take action
 1483  necessary to place an impaired provider under regulatory
 1484  control, including any remedy available under part I of chapter
 1485  631. An impairment is sufficient grounds for the department to
 1486  be appointed as receiver as provided in chapter 631, except when
 1487  the office’s remedial rights are suspended pursuant to s.
 1488  651.114(11)(a). If the office’s remedial rights are suspended
 1489  pursuant to s. 651.114(11)(a), the impaired provider must make
 1490  available to the office copies of any corrective action plan
 1491  approved by the third-party lender or trustee to cure the
 1492  impairment and any related required report. For purposes of s.
 1493  631.051, impairment of a provider is defined according to the
 1494  term “impaired” under s. 651.011. The office may forego taking
 1495  action for up to 180 days after the impairment if the office
 1496  finds there is a reasonable expectation that the impairment may
 1497  be eliminated within the 180-day period.
 1498         (3)There is no liability on the part of, and a cause of
 1499  action may not arise against, the commission, department, or
 1500  office, or their employees or agents, for any action they take
 1501  in the performance of their powers and duties under this
 1502  section.
 1503         (4)The office shall transmit any notice that may result in
 1504  regulatory action by registered mail, certified mail, or any
 1505  other method of transmission which includes documentation of
 1506  receipt by the provider. Notice is effective when the provider
 1507  receives it.
 1508         (5)This section is supplemental to the other laws of this
 1509  state and does not preclude or limit any power or duty of the
 1510  department or office under those laws or under the rules adopted
 1511  pursuant to those laws.
 1512         (6)The office may exempt a provider from subsection (1) or
 1513  subsection (2) until stabilized occupancy is reached or until
 1514  the time projected to achieve stabilized occupancy as reported
 1515  in the last feasibility study required by the office as part of
 1516  an application filing under s. 651.0215, s. 651.023, s. 651.024,
 1517  or s. 651.0246 has elapsed, but for no longer than 5 years after
 1518  the date of issuance of the certificate of occupancy.
 1519         (7)The commission may adopt rules to administer this
 1520  section, including, but not limited to, rules regarding
 1521  corrective action plans, revised corrective action plans,
 1522  corrective orders, and procedures to be followed in the event of
 1523  a regulatory action level event or an impairment.
 1524         Section 17. Paragraphs (a), (b), and (c) of subsection (1)
 1525  of section 651.035, Florida Statutes, are amended, and
 1526  subsections (7) through (11) are added to that section, to read:
 1527         651.035 Minimum liquid reserve requirements.—
 1528         (1) A provider shall maintain in escrow a minimum liquid
 1529  reserve consisting of the following reserves, as applicable:
 1530         (a) Each provider shall maintain in escrow as a debt
 1531  service reserve the aggregate amount of all principal and
 1532  interest payments due during the fiscal year on any mortgage
 1533  loan or other long-term financing of the facility, including
 1534  property taxes as recorded in the audited financial report
 1535  statements required under s. 651.026. The amount must include
 1536  any leasehold payments and all costs related to such payments.
 1537  If principal payments are not due during the fiscal year, the
 1538  provider must shall maintain in escrow as a minimum liquid
 1539  reserve an amount equal to interest payments due during the next
 1540  12 months on any mortgage loan or other long-term financing of
 1541  the facility, including property taxes. If a provider does not
 1542  have a mortgage loan or other financing on the facility, the
 1543  provider must deposit monthly in escrow as a minimum liquid
 1544  reserve an amount equal to one-twelfth of the annual property
 1545  tax liability as indicated in the most recent tax notice
 1546  provided pursuant to s. 197.322(3), and must annually pay
 1547  property taxes out of such escrow.
 1548         (b) A provider that has outstanding indebtedness that
 1549  requires a debt service reserve to be held in escrow pursuant to
 1550  a trust indenture or mortgage lien on the facility and for which
 1551  the debt service reserve may only be used to pay principal and
 1552  interest payments on the debt that the debtor is obligated to
 1553  pay, and which may include property taxes and insurance, may
 1554  include such debt service reserve in computing the minimum
 1555  liquid reserve needed to satisfy this subsection if the provider
 1556  furnishes to the office a copy of the agreement under which such
 1557  debt service is held, together with a statement of the amount
 1558  being held in escrow for the debt service reserve, certified by
 1559  the lender or trustee and the provider to be correct. The
 1560  trustee shall provide the office with any information concerning
 1561  the debt service reserve account upon request of the provider or
 1562  the office. Any such separate debt service reserves are not
 1563  subject to the transfer provisions set forth in subsection (8).
 1564         (c) Each provider shall maintain in escrow an operating
 1565  reserve equal to 30 percent of the total operating expenses
 1566  projected in the feasibility study required by s. 651.023 for
 1567  the first 12 months of operation. Thereafter, each provider
 1568  shall maintain in escrow an operating reserve equal to 15
 1569  percent of the total operating expenses in the annual report
 1570  filed pursuant to s. 651.026. If a provider has been in
 1571  operation for more than 12 months, the total annual operating
 1572  expenses must shall be determined by averaging the total annual
 1573  operating expenses reported to the office by the number of
 1574  annual reports filed with the office within the preceding 3-year
 1575  period subject to adjustment if there is a change in the number
 1576  of facilities owned. For purposes of this subsection, total
 1577  annual operating expenses include all expenses of the facility
 1578  except: depreciation and amortization; interest and property
 1579  taxes included in paragraph (a); extraordinary expenses that are
 1580  adequately explained and documented in accordance with generally
 1581  accepted accounting principles; liability insurance premiums in
 1582  excess of those paid in calendar year 1999; and changes in the
 1583  obligation to provide future services to current residents. For
 1584  providers initially licensed during or after calendar year 1999,
 1585  liability insurance must shall be included in the total
 1586  operating expenses in an amount not to exceed the premium paid
 1587  during the first 12 months of facility operation. Beginning
 1588  January 1, 1993, The operating reserves required under this
 1589  subsection must shall be in an unencumbered account held in
 1590  escrow for the benefit of the residents. Such funds may not be
 1591  encumbered or subject to any liens or charges by the escrow
 1592  agent or judgments, garnishments, or creditors’ claims against
 1593  the provider or facility. However, if a facility had a lien,
 1594  mortgage, trust indenture, or similar debt instrument in place
 1595  before January 1, 1993, which encumbered all or any part of the
 1596  reserves required by this subsection and such funds were used to
 1597  meet the requirements of this subsection, then such arrangement
 1598  may be continued, unless a refinancing or acquisition has
 1599  occurred, and the provider is shall be in compliance with this
 1600  subsection.
 1601         (7)(a)A provider may withdraw funds held in escrow without
 1602  the approval of the office if the amount held in escrow exceeds
 1603  the requirements of this section and if the withdrawal will not
 1604  affect compliance with this section.
 1605         (b)1.For all other proposed withdrawals, in order to
 1606  receive the consent of the office, the provider must file
 1607  documentation showing why the withdrawal is necessary for the
 1608  continued operation of the facility and such additional
 1609  information as the office reasonably requires.
 1610         2.The office shall notify the provider when the filing is
 1611  deemed complete. If the provider has complied with all prior
 1612  requests for information, the filing is deemed complete after 30
 1613  days without communication from the office.
 1614         3.Within 30 days after the date a file is deemed complete,
 1615  the office shall provide the provider with written notice of its
 1616  approval or disapproval of the request. The office may
 1617  disapprove any request to withdraw such funds if it determines
 1618  that the withdrawal is not in the best interest of the
 1619  residents.
 1620         (8)The office may order the immediate transfer of up to
 1621  100 percent of the funds held in the minimum liquid reserve to
 1622  the custody of the department pursuant to part III of chapter
 1623  625 if the office finds that the provider is impaired or
 1624  insolvent. The office may order such a transfer regardless of
 1625  whether the office has suspended or revoked, or intends to
 1626  suspend or revoke, the certificate of authority of the provider.
 1627         (9)Each facility shall file with the office annually,
 1628  together with the annual report required by s. 651.026, a
 1629  calculation of its minimum liquid reserve determined in
 1630  accordance with this section on a form prescribed by the
 1631  commission.
 1632         (10)Any increase in the minimum liquid reserve must be
 1633  funded not later than 61 days after the minimum liquid reserve
 1634  calculation is due to be filed as provided in s. 651.026.
 1635         (11)If the minimum liquid reserve is less than the
 1636  required minimum amount at the end of any fiscal quarter due to
 1637  a change in the market value of the invested funds, the provider
 1638  must fund the shortfall within 10 business days.
 1639         Section 18. Effective July 1, 2019, section 651.043,
 1640  Florida Statutes, is created to read:
 1641         651.043Approval of change in management.—
 1642         (1)A contract with a management company entered into after
 1643  July 1, 2019, must be in writing and include a provision that
 1644  the contract will be canceled upon issuance of an order by the
 1645  office pursuant to this section and without the application of a
 1646  cancellation fee or penalty. If a provider contracts with a
 1647  management company, a separate written contract is not required
 1648  for the individual manager employed by the management company or
 1649  contractor hired by the management company to oversee a
 1650  facility. If a management company executes a contract with an
 1651  individual manager or contractor, the contract is not required
 1652  to be submitted to the office unless requested by the office.
 1653         (2)A provider shall notify the office, in writing or
 1654  electronically, of any change in management within 10 business
 1655  days. For each new management company or manager not employed by
 1656  a management company, the provider shall submit to the office
 1657  the information required by s. 651.022(2) and a copy of the
 1658  written management contract, if applicable.
 1659         (3)For a provider that is found to be impaired or that has
 1660  a regulatory action level event pending, the office may
 1661  disapprove new management and order the provider to remove the
 1662  new management after reviewing the information required under
 1663  subsection (2).
 1664         (4)For a provider other than that specified in subsection
 1665  (3), the office may disapprove new management and order the
 1666  provider to remove the new management after receiving the
 1667  required information under subsection (2), if the office:
 1668         (a)Finds that the new management is incompetent or
 1669  untrustworthy;
 1670         (b)Finds that the new management is so lacking in
 1671  managerial experience as to make the proposed operation
 1672  hazardous to the residents or potential residents;
 1673         (c)Finds that the new management is so lacking in
 1674  experience, ability, and standing as to jeopardize the
 1675  reasonable promise of successful operation; or
 1676         (d)Has good reason to believe that the new management is
 1677  affiliated directly or indirectly through ownership, control, or
 1678  business relations with any person or persons whose business
 1679  operations are or have been marked by manipulation of assets or
 1680  accounts or by bad faith, to the detriment of residents,
 1681  stockholders, investors, creditors, or the public.
 1682  
 1683  The office shall complete its review as required under
 1684  subsections (3) and (4) and, if applicable, issue notice of
 1685  disapproval of the new management within 30 business days after
 1686  the filing is deemed complete. A filing is deemed complete upon
 1687  the office’s receipt of all requested information and the
 1688  provider’s correction of any error or omission for which the
 1689  provider was timely notified. If the office does not issue
 1690  notice of disapproval of the new management within 30 business
 1691  days after the filing is deemed complete, the new management is
 1692  deemed approved.
 1693         (5)Management disapproved by the office must be removed
 1694  within 30 days after receipt by the provider of notice of such
 1695  disapproval.
 1696         (6)The office may revoke, suspend, or take other
 1697  administrative action against the certificate of authority of
 1698  the provider if the provider:
 1699         (a)Fails to timely remove management disapproved by the
 1700  office;
 1701         (b)Fails to timely notify the office of a change in
 1702  management;
 1703         (c)Appoints new management without a written contract when
 1704  a written contract is required under this section; or
 1705         (d)Repeatedly appoints management that was previously
 1706  disapproved by the office or that is not approvable under
 1707  subsection (4).
 1708         (7)The provider shall remove any management immediately
 1709  upon discovery of either of the following conditions, if the
 1710  conditions were not disclosed in the notice to the office
 1711  required under subsection (2):
 1712         (a)That a manager has been found guilty of, or has pled
 1713  guilty or no contest to, a felony charge, or has been held
 1714  liable or has been enjoined in a civil action by final judgment,
 1715  if the felony or civil action involved fraud, embezzlement,
 1716  fraudulent conversion, or misappropriation of property.
 1717         (b)That a manager is now, or was in the past, affiliated,
 1718  directly or indirectly, through ownership interest of 10 percent
 1719  or more in, or control of, any business, corporation, or other
 1720  entity that has been found guilty of or has pled guilty or no
 1721  contest to a felony charge, or has been held liable or has been
 1722  enjoined in a civil action by final judgment, if the felony or
 1723  civil action involved fraud, embezzlement, fraudulent
 1724  conversion, or misappropriation of property.
 1725  
 1726  The failure to remove such management is grounds for revocation
 1727  or suspension of the provider’s certificate of authority.
 1728         Section 19. Section 651.051, Florida Statutes, is amended
 1729  to read:
 1730         651.051 Maintenance of assets and records in state.—All
 1731  records and assets of a provider must be maintained or readily
 1732  accessible in this state or, if the provider’s corporate office
 1733  is located in another state, such records must be electronically
 1734  stored in a manner that will ensure that the records are readily
 1735  accessible to the office. No records or assets may be removed
 1736  from this state by a provider unless the office consents to such
 1737  removal in writing before such removal. Such consent must shall
 1738  be based upon the provider’s submitting satisfactory evidence
 1739  that the removal will facilitate and make more economical the
 1740  operations of the provider and will not diminish the service or
 1741  protection thereafter to be given the provider’s residents in
 1742  this state. Before Prior to such removal, the provider shall
 1743  give notice to the president or chair of the facility’s
 1744  residents’ council. If such removal is part of a cash management
 1745  system which has been approved by the office, disclosure of the
 1746  system must shall meet the notification requirements. The
 1747  electronic storage of records on a web-based, secured storage
 1748  platform by contract with a third party is acceptable if the
 1749  records are readily accessible to the office.
 1750         Section 20. Subsection (3) of section 651.055, Florida
 1751  Statutes, is amended to read:
 1752         651.055 Continuing care contracts; right to rescind.—
 1753         (3) The contract must include or be accompanied by a
 1754  statement, printed in boldfaced type, which reads: “This
 1755  facility and all other continuing care facilities (also known as
 1756  life plan communities) in the State of Florida are regulated by
 1757  the Office of Insurance Regulation pursuant to chapter 651,
 1758  Florida Statutes. A copy of the law is on file in this facility.
 1759  The law gives you or your legal representative the right to
 1760  inspect our most recent financial statement and inspection
 1761  report before signing the contract. The financial structure of a
 1762  continuing care provider can be complex, and the decision to
 1763  enter into a contract for continuing care is a long-term
 1764  commitment between a resident and the continuing care provider.
 1765  You may wish to consult an attorney or a financial advisor
 1766  before entering into such a contract.”
 1767         Section 21. Subsection (2) of section 651.057, Florida
 1768  Statutes, is amended to read:
 1769         651.057 Continuing care at-home contracts.—
 1770         (2) A provider that holds a certificate of authority and
 1771  wishes to offer continuing care at-home must also:
 1772         (a) Submit a business plan to the office with the following
 1773  information:
 1774         1. A description of the continuing care at-home services
 1775  that will be provided, the market to be served, and the fees to
 1776  be charged;
 1777         2. A copy of the proposed continuing care at-home contract;
 1778         3. An actuarial study prepared by an independent actuary in
 1779  accordance with the standards adopted by the American Academy of
 1780  Actuaries which presents the impact of providing continuing care
 1781  at-home on the overall operation of the facility; and
 1782         4. A market feasibility study that meets the requirements
 1783  of s. 651.022(3) and documents that there is sufficient interest
 1784  in continuing care at-home contracts to support such a program;
 1785         (b) Demonstrate to the office that the proposal to offer
 1786  continuing care at-home contracts to individuals who do not
 1787  immediately move into the facility will not place the provider
 1788  in an unsound financial condition;
 1789         (c) Comply with the requirements of s. 651.0246(1) s.
 1790  651.021(2), except that an actuarial study may be substituted
 1791  for the feasibility study; and
 1792         (d) Comply with the requirements of this chapter.
 1793         Section 22. Subsection (1) of section 651.071, Florida
 1794  Statutes, is amended to read:
 1795         651.071 Contracts as preferred claims on liquidation or
 1796  receivership.—
 1797         (1) In the event of receivership or liquidation proceedings
 1798  against a provider, all continuing care and continuing care at
 1799  home contracts executed by a provider are shall be deemed
 1800  preferred claims against all assets owned by the provider;
 1801  however, such claims are subordinate to any secured claim. For
 1802  purposes of s. 631.271, such contracts are deemed Class 2
 1803  claims.
 1804         Section 23. Subsections (2) and (3) of section 651.091,
 1805  Florida Statutes, are amended, and subsection (4) of that
 1806  section is republished, to read:
 1807         651.091 Availability, distribution, and posting of reports
 1808  and records; requirement of full disclosure.—
 1809         (2) Every continuing care facility shall:
 1810         (a) Display the certificate of authority in a conspicuous
 1811  place inside the facility.
 1812         (b) Post in a prominent position in the facility which is
 1813  accessible to all residents and the general public a concise
 1814  summary of the last examination report issued by the office,
 1815  with references to the page numbers of the full report noting
 1816  any deficiencies found by the office, and the actions taken by
 1817  the provider to rectify such deficiencies, indicating in such
 1818  summary where the full report may be inspected in the facility.
 1819         (c)Post in a prominent position in the facility,
 1820  accessible to all residents and the general public, a notice
 1821  containing the contact information for the office and the
 1822  Division of Consumer Services of the department and stating that
 1823  the division or office may be contacted for the submission of
 1824  inquiries and complaints with respect to potential violations of
 1825  this chapter committed by a provider. Such contact information
 1826  must include the division’s website and the toll-free consumer
 1827  helpline and the office’s website and telephone number.
 1828         (d)Provide notice to the president or chair of the
 1829  residents’ council within 10 business days after issuance of a
 1830  final examination report or the initiation of any legal or
 1831  administrative proceeding by the office or the department and
 1832  include a copy of such document.
 1833         (e)(c) Post in a prominent position in the facility which
 1834  is accessible to all residents and the general public a summary
 1835  of the latest annual statement, indicating in the summary where
 1836  the full annual statement may be inspected in the facility. A
 1837  listing of any proposed changes in policies, programs, and
 1838  services must also be posted.
 1839         (f)(d) Distribute a copy of the full annual statement and a
 1840  copy of the most recent third-party third party financial audit
 1841  filed with the annual report to the president or chair of the
 1842  residents’ council within 30 days after filing the annual report
 1843  with the office, and designate a staff person to provide
 1844  explanation thereof.
 1845         (g)(e)Deliver the information described in s. 651.085(4)
 1846  in writing to the president or chair of the residents’ council
 1847  and make supporting documentation available upon request Notify
 1848  the residents’ council of any plans filed with the office to
 1849  obtain new financing, additional financing, or refinancing for
 1850  the facility and of any applications to the office for any
 1851  expansion of the facility.
 1852         (h)(f) Deliver to the president or chair of the residents’
 1853  council a summary of entrance fees collected and refunds made
 1854  during the time period covered in the annual report and the
 1855  refund balances due at the end of the report period.
 1856         (i)(g) Deliver to the president or chair of the residents’
 1857  council a copy of each quarterly statement within 30 days after
 1858  the quarterly statement is filed with the office if the facility
 1859  is required to file quarterly.
 1860         (j)(h) Upon request, deliver to the president or chair of
 1861  the residents’ council a copy of any newly approved continuing
 1862  care or continuing care at-home contract within 30 days after
 1863  approval by the office.
 1864         (k)Provide to the president or chair of the residents’
 1865  council a copy of any notice filed with the office relating to
 1866  any change in ownership within 10 business days after such
 1867  filing by the provider.
 1868         (l)Make the information available to prospective residents
 1869  pursuant to paragraph (3)(d) available to current residents and
 1870  provide notice of changes to that information to the president
 1871  or chair of the residents’ council within 3 business days.
 1872         (3) Before entering into a contract to furnish continuing
 1873  care or continuing care at-home, the provider undertaking to
 1874  furnish the care, or the agent of the provider, shall make full
 1875  disclosure, obtain written acknowledgment of receipt, and
 1876  provide copies of the disclosure documents to the prospective
 1877  resident or his or her legal representative, of the following
 1878  information:
 1879         (a) The contract to furnish continuing care or continuing
 1880  care at-home.
 1881         (b) The summary listed in paragraph (2)(b).
 1882         (c) All ownership interests and lease agreements, including
 1883  information specified in s. 651.022(2)(b)8.
 1884         (d) In keeping with the intent of this subsection relating
 1885  to disclosure, the provider shall make available for review
 1886  master plans approved by the provider’s governing board and any
 1887  plans for expansion or phased development, to the extent that
 1888  the availability of such plans does not put at risk real estate,
 1889  financing, acquisition, negotiations, or other implementation of
 1890  operational plans and thus jeopardize the success of
 1891  negotiations, operations, and development.
 1892         (e) Copies of the rules and regulations of the facility and
 1893  an explanation of the responsibilities of the resident.
 1894         (f) The policy of the facility with respect to admission to
 1895  and discharge from the various levels of health care offered by
 1896  the facility.
 1897         (g)The amount and location of any reserve funds required
 1898  by this chapter, and the name of the person or entity having a
 1899  claim to such funds in the event of a bankruptcy, foreclosure,
 1900  or rehabilitation proceeding.
 1901         (g)(h) A copy of s. 651.071.
 1902         (h)(i) A copy of the resident’s rights as described in s.
 1903  651.083.
 1904         (i)Notice of the issuance of a final examination report or
 1905  the initiation of any legal or administrative proceeding by the
 1906  office or the department, including where the report or filing
 1907  may be inspected in the facility, and that, upon request, an
 1908  electronic copy or specific website address will be provided
 1909  from which the document can be downloaded at no cost.
 1910         (j)Notice that if the resident does not exercise the right
 1911  to rescind a continuing care contract within 7 days after
 1912  executing the contract, the resident’s funds held in escrow
 1913  pursuant to s. 651.055(2) will be released to the provider.
 1914         (k)A statement that distribution of the provider’s assets
 1915  or income may occur or a statement that such distributions will
 1916  not occur.
 1917         (l)Notice of any holding company system or obligated group
 1918  of which the provider is a member.
 1919         (4) A true and complete copy of the full disclosure
 1920  document to be used must be filed with the office before use. A
 1921  resident or prospective resident or his or her legal
 1922  representative may inspect the full reports referred to in
 1923  paragraph (2)(b); the charter or other agreement or instrument
 1924  required to be filed with the office pursuant to s. 651.022(2),
 1925  together with all amendments thereto; and the bylaws of the
 1926  corporation or association, if any. Upon request, copies of the
 1927  reports and information shall be provided to the individual
 1928  requesting them if the individual agrees to pay a reasonable
 1929  charge to cover copying costs.
 1930         Section 24. Subsection (4) of section 651.095, Florida
 1931  Statutes, is amended to read:
 1932         651.095 Advertisements; requirements; penalties.—
 1933         (4) It is unlawful for any person, other than a provider
 1934  licensed pursuant to this chapter, to advertise or market to the
 1935  general public any product similar to continuing care through
 1936  the use of such terms as “life care,” “life plan,” “life plan
 1937  at-home,” “continuing care,” or “guaranteed care for life,” or
 1938  similar terms, words, or phrases.
 1939         Section 25. Section 651.105, Florida Statutes, is amended
 1940  to read:
 1941         651.105 Examination and inspections.—
 1942         (1) The office may at any time, and shall at least once
 1943  every 3 years, examine the business of any applicant for a
 1944  certificate of authority and any provider engaged in the
 1945  execution of care contracts or engaged in the performance of
 1946  obligations under such contracts, in the same manner as is
 1947  provided for the examination of insurance companies pursuant to
 1948  ss. 624.316 and 624.318 s. 624.316. For a provider deemed
 1949  accredited under as defined in s. 651.028, such examinations
 1950  must shall take place at least once every 5 years. Such
 1951  examinations must shall be made by a representative or examiner
 1952  designated by the office whose compensation will be fixed by the
 1953  office pursuant to s. 624.320. Routine examinations may be made
 1954  by having the necessary documents submitted to the office; and,
 1955  for this purpose, financial documents and records conforming to
 1956  commonly accepted accounting principles and practices, as
 1957  required under s. 651.026, are deemed adequate. The final
 1958  written report of each examination must be filed with the office
 1959  and, when so filed, constitutes a public record. Any provider
 1960  being examined shall, upon request, give reasonable and timely
 1961  access to all of its records. The representative or examiner
 1962  designated by the office may at any time examine the records and
 1963  affairs and inspect the physical property of any provider,
 1964  whether in connection with a formal examination or not.
 1965         (2) Any duly authorized officer, employee, or agent of the
 1966  office may, upon presentation of proper identification, have
 1967  access to, and examine inspect, any records, with or without
 1968  advance notice, to secure compliance with, or to prevent a
 1969  violation of, any provision of this chapter.
 1970         (3) Reports of the results of such financial examinations
 1971  must be kept on file by the office. Any investigatory records,
 1972  reports, or documents held by the office are confidential and
 1973  exempt from the provisions of s. 119.07(1), until the
 1974  investigation is completed or ceases to be active. For the
 1975  purpose of this section, an investigation is active while it is
 1976  being conducted by the office with a reasonable, good faith
 1977  belief that it could lead to the filing of administrative,
 1978  civil, or criminal proceedings. An investigation does not cease
 1979  to be active if the office is proceeding with reasonable
 1980  dispatch and has a good faith belief that action could be
 1981  initiated by the office or other administrative or law
 1982  enforcement agency.
 1983         (4) The office shall notify the provider and the executive
 1984  officer of the governing body of the provider in writing of all
 1985  deficiencies in its compliance with the provisions of this
 1986  chapter and the rules adopted pursuant to this chapter and shall
 1987  set a reasonable length of time for compliance by the provider.
 1988  In addition, the office shall require corrective action or
 1989  request a corrective action plan from the provider which plan
 1990  demonstrates a good faith attempt to remedy the deficiencies by
 1991  a specified date. If the provider fails to comply within the
 1992  established length of time, the office may initiate action
 1993  against the provider in accordance with the provisions of this
 1994  chapter.
 1995         (5) A provider shall respond to written correspondence from
 1996  the office and provide data, financial statements, and pertinent
 1997  information as requested by the office. The office has standing
 1998  to petition a circuit court for mandatory injunctive relief to
 1999  compel access to and require the provider to produce the
 2000  documents, data, records, and other information requested by the
 2001  office. The office may petition the circuit court in the county
 2002  in which the facility is situated or the Circuit Court of Leon
 2003  County to enforce this section At the time of the routine
 2004  examination, the office shall determine if all disclosures
 2005  required under this chapter have been made to the president or
 2006  chair of the residents’ council and the executive officer of the
 2007  governing body of the provider.
 2008         (6) A representative of the provider must give a copy of
 2009  the final examination report and corrective action plan, if one
 2010  is required by the office, to the executive officer of the
 2011  governing body of the provider within 60 days after issuance of
 2012  the report.
 2013         (7)Unless a provider is impaired or subject to a
 2014  regulatory action level event, any parent, subsidiary, or
 2015  affiliate is not subject to examination by the office as part of
 2016  a routine examination. However, if a provider or facility relies
 2017  on a contractual or financial relationship with a parent, a
 2018  subsidiary, or an affiliate in order to meet the financial
 2019  requirements of this chapter, the office may examine any parent,
 2020  subsidiary, or affiliate that has a contractual or financial
 2021  relationship with the provider or facility to the extent
 2022  necessary to ascertain the financial condition of the provider.
 2023         Section 26. Section 651.106, Florida Statutes, is amended
 2024  to read:
 2025         651.106 Grounds for discretionary refusal, suspension, or
 2026  revocation of certificate of authority.—The office may deny an
 2027  application or, suspend, or revoke the provisional certificate
 2028  of authority or the certificate of authority of any applicant or
 2029  provider if it finds that any one or more of the following
 2030  grounds applicable to the applicant or provider exist:
 2031         (1) Failure by the provider to continue to meet the
 2032  requirements for the authority originally granted.
 2033         (2) Failure by the provider to meet one or more of the
 2034  qualifications for the authority specified by this chapter.
 2035         (3) Material misstatement, misrepresentation, or fraud in
 2036  obtaining the authority, or in attempting to obtain the same.
 2037         (4) Demonstrated lack of fitness or trustworthiness.
 2038         (5) Fraudulent or dishonest practices of management in the
 2039  conduct of business.
 2040         (6) Misappropriation, conversion, or withholding of moneys.
 2041         (7) Failure to comply with, or violation of, any proper
 2042  order or rule of the office or commission or violation of any
 2043  provision of this chapter.
 2044         (8) The insolvent or impaired condition of the provider or
 2045  the provider’s being in such condition or using such methods and
 2046  practices in the conduct of its business as to render its
 2047  further transactions in this state hazardous or injurious to the
 2048  public.
 2049         (9) Refusal by the provider to be examined or to produce
 2050  its accounts, records, and files for examination, or refusal by
 2051  any of its officers to give information with respect to its
 2052  affairs or to perform any other legal obligation under this
 2053  chapter when required by the office.
 2054         (10) Failure by the provider to comply with the
 2055  requirements of s. 651.026 or s. 651.033.
 2056         (11) Failure by the provider to maintain escrow accounts or
 2057  funds as required by this chapter.
 2058         (12) Failure by the provider to meet the requirements of
 2059  this chapter for disclosure of information to residents
 2060  concerning the facility, its ownership, its management, its
 2061  development, or its financial condition or failure to honor its
 2062  continuing care or continuing care at-home contracts.
 2063         (13) Any cause for which issuance of the license could have
 2064  been refused had it then existed and been known to the office.
 2065         (14) Having been found guilty of, or having pleaded guilty
 2066  or nolo contendere to, a felony in this state or any other
 2067  state, without regard to whether a judgment or conviction has
 2068  been entered by the court having jurisdiction of such cases.
 2069         (15) In the conduct of business under the license, engaging
 2070  in unfair methods of competition or in unfair or deceptive acts
 2071  or practices prohibited under part IX of chapter 626.
 2072         (16) A pattern of bankrupt enterprises.
 2073         (17)The ownership, control, or management of the
 2074  organization includes any person:
 2075         (a)Who is not reputable and of responsible character;
 2076         (b)Who is so lacking in management expertise as to make
 2077  the operation of the provider hazardous to potential and
 2078  existing residents;
 2079         (c)Who is so lacking in management experience, ability,
 2080  and standing as to jeopardize the reasonable promise of
 2081  successful operation;
 2082         (d)Who is affiliated, directly or indirectly, through
 2083  ownership or control, with any person or persons whose business
 2084  operations are or have been marked by business practices or
 2085  conduct that is detrimental to the public, contract holders,
 2086  investors, or creditors, or by manipulation of assets, finances,
 2087  or accounts or by bad faith; or
 2088         (e)Whose business operations are or have been marked by
 2089  business practices or conduct that is detrimental to the public,
 2090  contract holders, investors, or creditors, or by manipulation of
 2091  assets, finances, or accounts or by bad faith.
 2092         (18)The provider has not filed a notice of change in
 2093  management, fails to remove a disapproved manager, or persists
 2094  in appointing disapproved managers.
 2095  
 2096  Revocation of a certificate of authority under this section does
 2097  not relieve a provider from the provider’s obligation to
 2098  residents under the terms and conditions of any continuing care
 2099  or continuing care at-home contract between the provider and
 2100  residents or the provisions of this chapter. The provider shall
 2101  continue to file its annual statement and pay license fees to
 2102  the office as required under this chapter as if the certificate
 2103  of authority had continued in full force, but the provider shall
 2104  not issue any new contracts. The office may seek an action in
 2105  the Circuit Court of Leon County to enforce the office’s order
 2106  and the provisions of this section.
 2107         Section 27. Section 651.1065, Florida Statutes, is created
 2108  to read:
 2109         651.1065Soliciting or accepting new continuing care
 2110  contracts by impaired or insolvent facilities or providers.—
 2111         (1)Regardless of whether delinquency proceedings as to a
 2112  continuing care facility have been or are to be initiated, a
 2113  proprietor, a general partner, a member, an officer, a director,
 2114  a trustee, or a manager of a continuing care facility may not
 2115  actively solicit, approve the solicitation or acceptance of, or
 2116  accept new continuing care contracts in this state after the
 2117  proprietor, general partner, member, officer, director, trustee,
 2118  or manager knew, or reasonably should have known, that the
 2119  continuing care facility was impaired or insolvent except with
 2120  the written permission of the office. If the facility has
 2121  declared bankruptcy, the bankruptcy court or trustee appointed
 2122  by the court has jurisdiction over such matters. The office must
 2123  approve or disapprove the continued marketing of new contracts
 2124  within 15 days after receiving a request from a provider.
 2125         (2)A proprietor, a general partner, a member, an officer,
 2126  a director, a trustee, or a manager who violates this section
 2127  commits a felony of the third degree, punishable as provided in
 2128  s. 775.082, s. 775.083, or s. 775.084.
 2129         Section 28. Subsections (1) and (3) of section 651.111,
 2130  Florida Statutes, are amended to read:
 2131         651.111 Requests for inspections.—
 2132         (1) Any interested party may request an inspection of the
 2133  records and related financial affairs of a provider providing
 2134  care in accordance with the provisions of this chapter by
 2135  transmitting to the office notice of an alleged violation of
 2136  applicable requirements prescribed by statute or by rule,
 2137  specifying to a reasonable extent the details of the alleged
 2138  violation, which notice must shall be signed by the complainant.
 2139  As used in this section, the term “inspection” means an inquiry
 2140  into a provider’s compliance with this chapter.
 2141         (3) Upon receipt of a complaint, the office shall make a
 2142  preliminary review to determine if the complaint alleges a
 2143  violation of this chapter; and, unless the office determines
 2144  that the complaint does not allege a violation of this chapter
 2145  or is without any reasonable basis, the office shall make an
 2146  inspection. The office shall provide the complainant with a
 2147  written acknowledgment of the complaint within 15 days after
 2148  receipt by the office. The complainant shall be advised, within
 2149  30 days after the receipt of the complaint by the office, of the
 2150  office’s determination that the complaint does not allege a
 2151  violation of this chapter, that the complaint is without any
 2152  reasonable basis, or that the office will make an inspection.
 2153  The notice must include an estimated timeframe for completing
 2154  the inspection and a contact number. If the inspection is not
 2155  completed within the estimated timeframe, the office must
 2156  provide the complainant with a revised timeframe. Within 15 days
 2157  after completing an inspection, the office shall provide the
 2158  complainant and the provider a written statement specifying any
 2159  violations of this chapter and any actions taken or that no such
 2160  violation was found proposed course of action of the office.
 2161         Section 29. Section 651.114, Florida Statutes, is amended
 2162  to read:
 2163         651.114 Delinquency proceedings; remedial rights.—
 2164         (1) Upon determination by the office that a provider is not
 2165  in compliance with this chapter, the office may notify the chair
 2166  of the Continuing Care Advisory Council, who may assist the
 2167  office in formulating a corrective action plan.
 2168         (2) Within 30 days after a request by either the advisory
 2169  council or the office, a provider shall make a plan for
 2170  obtaining compliance or solvency available to the advisory
 2171  council and the office, within 30 days after being requested to
 2172  do so by the council, a plan for obtaining compliance or
 2173  solvency.
 2174         (3) Within 30 days after receipt of a plan for obtaining
 2175  compliance or solvency, the office or, at the request of the
 2176  office, notification, the advisory council shall:
 2177         (a) Consider and evaluate the plan submitted by the
 2178  provider.
 2179         (b) Discuss the problem and solutions with the provider.
 2180         (c) Conduct such other business as is necessary.
 2181         (d) Report its findings and recommendations to the office,
 2182  which may require additional modification of the plan.
 2183  
 2184  This subsection may not be construed to delay or prevent the
 2185  office from taking any regulatory measures it deems necessary
 2186  regarding the provider that submitted the plan.
 2187         (4)If the financial condition of a continuing care
 2188  provider is impaired or is such that if not modified or
 2189  corrected, its continued operation would result in insolvency,
 2190  the office may direct the provider to formulate and file with
 2191  the office a corrective action plan. If the provider fails to
 2192  submit a plan within 30 days after the office’s directive or
 2193  submits a plan that is insufficient to correct the condition,
 2194  the office may specify a plan and direct the provider to
 2195  implement the plan. Before specifying a plan, the office may
 2196  seek a recommended plan from the advisory council.
 2197         (5)(4) After receiving approval of a plan by the office,
 2198  the provider shall submit a progress report monthly to the
 2199  advisory council or the office, or both, in a manner prescribed
 2200  by the office. After 3 months, or at any earlier time deemed
 2201  necessary, the council shall evaluate the progress by the
 2202  provider and shall advise the office of its findings.
 2203         (6)(5)If Should the office finds find that sufficient
 2204  grounds exist for rehabilitation, liquidation, conservation,
 2205  reorganization, seizure, or summary proceedings of an insurer as
 2206  set forth in ss. 631.051, 631.061, and 631.071, the department
 2207  office may petition for an appropriate court order or may pursue
 2208  such other relief as is afforded in part I of chapter 631.
 2209  Before invoking its powers under part I of chapter 631, the
 2210  department office shall notify the chair of the advisory
 2211  council.
 2212         (7)For purposes of s. 631.051, impairment of a provider
 2213  has the same meaning as the term “impaired” in s. 651.011.
 2214         (8)(6) In the event an order of conservation,
 2215  rehabilitation, liquidation, or conservation, reorganization,
 2216  seizure, or summary proceeding has been entered against a
 2217  provider, the department and office are vested with all of the
 2218  powers and duties they have under the provisions of part I of
 2219  chapter 631 in regard to delinquency proceedings of insurance
 2220  companies. A provider shall give written notice of the
 2221  proceeding to its residents within 3 business days after the
 2222  initiation of a delinquency proceeding under chapter 631 and
 2223  shall include a notice of the delinquency proceeding in any
 2224  written materials provided to prospective residents
 2225         (7)If the financial condition of the continuing care
 2226  facility or provider is such that, if not modified or corrected,
 2227  its continued operation would result in insolvency, the office
 2228  may direct the provider to formulate and file with the office a
 2229  corrective action plan. If the provider fails to submit a plan
 2230  within 30 days after the office’s directive or submits a plan
 2231  that is insufficient to correct the condition, the office may
 2232  specify a plan and direct the provider to implement the plan.
 2233         (9)A provider subject to an order to show cause entered
 2234  pursuant to chapter 631 must file its written response to the
 2235  order, together with any defenses it may have to the
 2236  department’s allegations, according to the time periods
 2237  specified in s. 631.031(3).
 2238         (10)A hearing held pursuant to chapter 631 to determine
 2239  whether cause exists for the department to be appointed receiver
 2240  must be held in accordance with the time period specified in s.
 2241  631.031(4).
 2242  
 2243  ================= T I T L E  A M E N D M E N T ================
 2244  And the title is amended as follows:
 2245         Delete lines 31 - 131
 2246  and insert:
 2247         persons relating to provider acquisitions; providing
 2248         standing to the office to petition a circuit court in
 2249         certain proceedings; creating s. 651.0245, F.S.;
 2250         specifying procedures, requirements, and a prohibition
 2251         relating to an application for the simultaneous
 2252         acquisition of a facility and issuance of a
 2253         certificate of authority and to the office’s review of
 2254         such application; specifying rulemaking requirements
 2255         and authority of the Financial Services Commission;
 2256         providing standing to the office to petition a circuit
 2257         court in certain proceedings; specifying procedures
 2258         for rebutting a presumption of control; creating s.
 2259         651.0246, F.S.; specifying requirements, conditions,
 2260         procedures, and prohibitions relating to provider
 2261         applications to commence construction or marketing for
 2262         expansions of certificated facilities and to the
 2263         office’s review of such applications; defining the
 2264         term “existing units”; specifying escrow requirements
 2265         for certain moneys; specifying conditions under which
 2266         providers are entitled to secure release of such
 2267         moneys; providing applicability and construction;
 2268         amending s. 651.026, F.S.; revising requirements for
 2269         annual reports filed by providers with the office;
 2270         revising the commission’s rulemaking authority;
 2271         requiring the office to annually publish a specified
 2272         industry report; amending s. 651.0261, F.S.; requiring
 2273         providers to file quarterly unaudited financial
 2274         statements; providing an exception for filing a
 2275         certain quarterly statement; revising information that
 2276         the office may require providers to file and the
 2277         circumstances under which such information must be
 2278         filed; revising the commission’s rulemaking authority;
 2279         amending s. 651.028, F.S.; specifying applicability of
 2280         certain accreditations of providers or facilities;
 2281         deleting the authority of the office to waive
 2282         requirements of ch. 651, F.S., for accredited
 2283         facilities; providing that the commission, rather than
 2284         the office, must make a certain finding; amending s.
 2285         651.033, F.S.; revising applicability of escrow
 2286         requirements; revising requirements for escrow
 2287         accounts and agreements; revising the office’s
 2288         authority to allow a withdrawal of a specified
 2289         percentage of the required minimum liquid reserve;
 2290         revising applicability of requirements relating to the
 2291         deposit of certain funds in escrow accounts;
 2292         prohibiting an escrow agent, except under certain
 2293         circumstances, from releasing or allowing the transfer
 2294         of funds; creating s. 651.034, F.S.; specifying
 2295         requirements for the office if a regulatory action
 2296         level event occurs; specifying requirements for
 2297         corrective action plans; authorizing the office to use
 2298         members of the Continuing Care Advisory Council and to
 2299         retain consultants for certain purposes; requiring
 2300         affected providers to bear costs and expenses relating
 2301         to such consultants; specifying requirements for, and
 2302         authorized actions of, the office and the Department
 2303         of Financial Services if an impairment occurs;
 2304         providing construction; authorizing the office to
 2305         exempt a provider from certain requirements for a
 2306         certain timeframe; authorizing the commission to adopt
 2307         rules; amending s. 651.035, F.S.; revising minimum
 2308         liquid reserve requirements for providers; specifying
 2309         requirements, limitations, and procedures for a
 2310         provider’s withdrawal of funds held in escrow and the
 2311         office’s review of certain requests for withdrawal;
 2312         authorizing the office to order certain transfers
 2313         under certain circumstances; requiring facilities to
 2314         annually file with the office a minimum liquid reserve
 2315         calculation; requiring increases in the minimum liquid
 2316         reserve to be funded within a certain timeframe;
 2317         requiring providers to fund shortfalls in minimum
 2318         liquid reserves under certain circumstances within a
 2319         certain timeframe; creating s. 651.043, F.S.;
 2320         specifying requirements for certain management company
 2321         contracts; specifying requirements, procedures, and
 2322         authorized actions relating to changes in provider
 2323         management and to the office’s review of such changes;
 2324         requiring that disapproved management be removed
 2325         within a certain timeframe; authorizing the office to
 2326         take certain disciplinary actions under certain
 2327         circumstances; requiring providers to immediately
 2328         remove management under certain circumstances;
 2329         amending s. 651.051, F.S.; revising requirements for
 2330         the maintenance of provider records and assets;
 2331         amending s. 651.055, F.S.; revising a required
 2332         statement in continuing care contracts; amending s.
 2333         651.057, F.S.; conforming provisions to changes made
 2334         by the act; amending s. 651.071, F.S.; specifying the
 2335         priority of continuing care contracts and continuing
 2336         care at-home contracts in receivership or liquidation
 2337         proceedings against a provider; amending s. 651.091,
 2338         F.S.; revising requirements for continuing care
 2339         facilities relating to posting or providing notices;
 2340         amending s. 651.095, F.S.; adding terms to a list of
 2341         prohibited terms in certain advertisements; amending
 2342         s. 651.105, F.S.; adding a certain Florida Insurance
 2343         Code provision to the office’s authority to examine
 2344         certain providers and applicants; authorizing the
 2345         office to examine records for specified purposes;
 2346         requiring providers