Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 70 First Substitute (2023GS)

Sponsor

Rep. Dunnigan, J.

Final action

Governor Signed 3/15/2023

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• modifies the processes through which the Insurance Department regulates continuing care facilities; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

CONTINUING CARE RETIREMENT FACILITIES
AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: James A. Dunnigan
Senate Sponsor: 
Wayne A. Harper
LONG TITLE
General Description:
This bill modifies provisions related to the regulation of continuing care facilities.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ modifies the processes through which the Insurance Department regulates
continuing care facilities; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
31A-44-102
, as last amended by Laws of Utah 2016, Third Special Session, Chapter 8
31A-44-402
, as enacted by Laws of Utah 2016, Chapter 270
31A-44-404
, as last amended by Laws of Utah 2016, Third Special Session, Chapter 8
31A-44-502
, as last amended by Laws of Utah 2016, Third Special Session, Chapter 8
31A-44-505
, as enacted by Laws of Utah 2016, Chapter 270
31A-44-506
, as enacted by Laws of Utah 2016, Chapter 270
ENACTS:
31A-44-315
, Utah Code Annotated 1953
31A-44-501.1
, Utah Code Annotated 1953
REPEALS:
31A-44-101
, as enacted by Laws of Utah 2016, Chapter 270
31A-44-501
, as enacted by Laws of Utah 2016, Chapter 270
31A-44-503
, as last amended by Laws of Utah 2016, Third Special Session, Chapter 8
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
31A-44-102
 is amended to read:
31A-44-102.
Definitions.
As used in this chapter:
(1) "Continuing care" means furnishing or providing access to an individual, other than
by an individual related to the individual by blood, marriage, or adoption, of lodging together
with nursing services, medical services, or other related services pursuant to a contract
requiring an entrance fee.
(2) "Continuing care contract" means a contract under which a provider provides
continuing care to a resident.
(3) (a) "Entrance fee" means an initial or deferred transfer to a provider of a sum of
money or property made or promised to be made as full or partial consideration for acceptance
of a specified individual as a resident in a facility.
(b) "Entrance fee" includes a monthly fee, assessed at a rate that is greater than the
value of the provider's monthly services, that a resident agrees to pay in exchange for
acceptance into a facility or a promise of future monthly fees assessed at a rate that is less than
the value of the services rendered.
(c) "Entrance fee" does not include an amount less than the sum of the regular period
charges for three months of residency in a facility.
(d) "Entrance fee" does not include a deposit of less than $1,000 made under a
reservation agreement.
(4) "Facility" means a place in which a person provides continuing care pursuant to a
continuing care contract.
(5) "Ground lease" means a lease to a provider of the land and infrastructure
improvements to the land on which a facility is located.
(6) "Ground lessor" means, for a facility subject to a ground lease, the owner and lessor
of the land and infrastructure improvements to the land on which the facility is located.
(7) "Insolvent" means:
(a) having generally ceased to pay debts in the ordinary course of business other than as
a result of a bona fide dispute;
(b) being unable to pay debts as they become due; or
(c) being insolvent within the meaning of federal bankruptcy law.
[
(7)
] 
(8)
 "Living unit" means a room, apartment, cottage, or other area within a facility
set aside for the exclusive use or control of one or more identified individuals.
[
(8)
] 
(9)
 (a) "Provider" means:
(i) the owner of a facility;
(ii) a person, other than a resident, that claims a possessory interest in a facility; or
(iii) a person who enters into a continuing care contract with a resident or potential
resident.
(b) "Provider" does not include a person who is solely a ground lessor.
[
(9)
] 
(10)
 "Provider disclosure statement" means, for a given provider, the disclosure
statement described in Section 
31A-44-301
.
[
(10)
] 
(11)
 "Reservation agreement" means an agreement that requires the payment of a
deposit to reserve a living unit for a prospective resident.
[
(11)
] 
(12)
 "Resident" means an individual entitled to receive continuing care in a
facility pursuant to a continuing care contract. 
Section 2. Section 
31A-44-315
 is enacted to read:
 31A-44-315.
Financial assessment.
(1) The department shall assess the financial condition of a provider no less than once
per year.
(2) The department may consider any relevant documents and information in
performing an assessment.
(3) A provider shall prepare and timely provide to the department documents and
information requested by the department in connection with an assessment.
(4) Department work papers created or relied upon in connection with an assessment
are protected under Title 63G, Chapter 2, Government Records Access and Management Act.
(5) The department may conduct any portion of an assessment at the provider's facility
during regular business hours if the department notifies the provider of the anticipated visit and
assessment at least seven calendar days in advance.
(6) The department shall prepare a written report of the assessment and provide a copy
of the report to the provider within 28 days after the day on which the department completes
the gathering of information necessary to complete the assessment.
Section 3. Section 
31A-44-402
 is amended to read:
31A-44-402.
Actuarial reserve -- Priority of entrance fee refunds.
(1) The department may require a provider that the department determines has actuarial
liability under Section 
31A-44-204
 to create an additional reserve fund to offset the actuarial
liability.
(2) The department may require the additional reserve fund described in Subsection (1)
by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(3) If a refund or remittance of funds is owed in relation to a living unit due to the
death or relocation of a resident, the provider shall prioritize the sale of the resident's living
unit over the sale of other units for which a refund or remittance of funds is not owed.
Section 4. Section 
31A-44-404
 is amended to read:
31A-44-404.
Nondisturbance of residents.
(1) A person may not directly or indirectly disturb the rights of a resident or third party
beneficiary under a continuing care contract and this chapter if the resident has substantially
performed the resident's obligations under the continuing care contract.
(2) If the person to whom a resident owes performance under the continuing care
contract is contested, and a court has not issued a temporary or permanent order resolving the
contest:
(a) the department may appoint a temporary receiver to receive the performance of the
resident; and
(b) a court may appoint a receiver upon 
the department's
 petition [
by the department
]
,
or the department's motion under an existing action
.
(3) (a) Except as provided in Subsection (3)(b), a person other than a resident that
holds a present right to possess a facility, including a ground lessor but only after the ground
lessor acquires a provider's possessory interest by termination of a ground lease or otherwise, is
bound by every continuing care contract related to the facility, including a continuing care
contract that provides for the return of part or all of a resident's entrance fee.
(b) If a ground lessor acquires a provider's possessory interest by termination of a
ground lease or otherwise, the ground lessor's obligation under the continuing care contracts is
limited to the monetary obligations of the provider to which the ground lessor succeeds.
(4) (a) The commissioner holds a covenant that:
(i) runs with the land on which a facility is located; and
(ii) except as provided in Subsection (4)(b), binds a person with a present right to
possess the land on which the facility is located, including a ground lessor but only after the
ground lessor acquires a provider's possessory interest by termination of a ground lease or
otherwise, to every continuing care contract related to the facility, including a continuing care
contract that provides for the return of all or part of a resident's entrance fee.
(b) If a ground lessor acquires a provider's possessory interest by termination of a
ground lease or otherwise, the ground lessor's obligation under the continuing care contracts
under the covenant described in Subsection (4)(a) is limited to the monetary obligations of the
provider to which the ground lessor succeeds.
(c) A person may not sell the land on which the facility is located free and clear of the
interest described in Subsection (4)(a).
(5) A person may not sell or transfer the land on which a facility subject to a ground
lease is located free and clear of the provider's possessory interest in the ground lease.
Section 5. Section 
31A-44-501.1
 is enacted to read:
 31A-44-501.1.
Receivership.
(1) The department may, by petition or motion, request that a court appoint the
commissioner as receiver for a provider.
(2) The court may appoint the commissioner as receiver if, as determined by the
commissioner, the provider:
(a) is insolvent or at material risk of becoming insolvent within the next 12 months;
(b) is materially unable to meet the income or available cash projections described in
the provider's disclosure statement; or
(c) is unable or at risk of being unable to perform a material obligation under a
continuing care contract within the next 12 months.
(3) In evaluating whether a receiver is appropriate under this section, the court:
(a) shall evaluate and promote the best interests of the residents that have contracted
with the provider; and
(b) may require the proceeds of a lien imposed under Section 
31A-44-601
 to be used to
pay an entrance fee to another facility on behalf of a resident of the provider's facility.
(4) The commissioner may not file an independent proceeding or action described in
this section if another judicial proceeding or action based on the provider's financial condition
is pending, but may move to intervene in a pending proceeding or action that is based on the
provider's financial condition.
Section 6. Section 
31A-44-502
 is amended to read:
31A-44-502.
Relief available.
(1) [
A court order to rehabilitate a facility under Section 
31A-44-501
 may direct a
trustee to
] 
In a judicial proceeding, including under Sections 
31A-44-501
 and 
31A-44-501.1
, a
court may
:
(a) 
direct a receiver to
 take possession of the provider's property in order to conduct the
provider's business, including employing any manager or agent that the [
trustee
] 
receiver
considers necessary; and
(b) [
take action as directed by the court
] 
direct a receiver
 to eliminate the causes and
conditions that made [
rehabilitation
] 
receivership
 necessary, which action may include:
(i) selling the facility [
through bankruptcy or receivership proceedings
]; [
and
]
(ii) requiring a purchaser of the facility to honor any continuing care contract for the
facility
; and
(iii) collecting and liquidating all or a portion of the provider's assets within the court's
jurisdiction
.
(2) (a) For a facility subject to a ground lease, a court may, in addition to the actions
described in Subsection (1), direct a [
trustee
] 
receiver
 to purchase from the ground lessor, or
assign to another person that agrees to operate the facility, for market value, the ground lessor's
interest in the land and the infrastructure improvements to the land on which the facility is
located.
(b) A court may direct a [
trustee under Subsection (2)(a)
] 
receiver
 to purchase from a
ground lessor the land and infrastructure improvements to the land on which a facility is
located, regardless of the terms of the ground lease agreement.
(c) If a court directs a [
trustee
] 
receiver
 to purchase or assign the land and
infrastructure improvements to the land under Subsection (2)(a), the ground lessor shall sell or
assign the land and infrastructure improvements to the land in compliance with the court order.
[
(d) The commissioner shall determine market value in accordance with rules made by
the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
Act.
]
[
(e)
] 
(d)
 In determining market value under Subsection [
(2)(d)
] 
(2)(a)
, the
commissioner shall:
(i) value the land and infrastructure improvements to the land on which the facility is
located as though the land and infrastructure improvements to the land were not subject to the
ground lease; and
(ii) disregard the monetized value of an existing ground lease.
(3) A provider that is subject to a liquidation order may not enter into a new continuing
care contract.
[
(3)
] 
(4)
 Solely for the purpose of enforcing this section, a court has personal
jurisdiction in a proceeding under this section over:
(a) the owner of a facility; and
(b) the owner of the land and infrastructure improvements to the land on which a
facility is located.
(5) If the commissioner is appointed as receiver, the commissioner may hire or retain a
deputy receiver to perform any duties of receivership.
Section 7. Section 
31A-44-505
 is amended to read:
31A-44-505.
Termination of receivership.
(1) A court may terminate a [
rehabilitation
] 
receivership
 of a provider's facility and
order the return of the facility and the facility's assets to the provider if the court determines:
(a) the objectives of the [
order to rehabilitate the facility
] 
receivership orders
 have been
accomplished; and
(b) [
the facility may be returned to the provider without further jeopardy to the facility's
residents, creditors, or owners, or the public
] 
termination of the receivership will not jeopardize
the interests of the facility's residents, creditors, owners, or the public
.
(2) A court may enter an order under this section after the court enters:
(a) a full report and accounting of the conduct of the facility's affairs during the
rehabilitation; and
(b) a report on the facility's financial condition. 
Section 8. Section 
31A-44-506
 is amended to read:
31A-44-506.
Payment of receiver. 
A [
trustee's
] 
receiver's
and any deputy receiver's
 reasonable costs, expenses, and fees
are payable from a provider's or facility's assets. 
Section 9. 
Repealer.
This bill repeals:
Section 
31A-44-101
,
Title.
Section 
31A-44-501
,
Application for court order for rehabilitation or liquidation.
Section 
31A-44-503
,
Order to liquidate.