2005 California Health and Safety Code Sections 1770-1778 Article 1. General Provisions

1770.  The Legislature finds, declares, and intends all of the
following:
   (a) Continuing care retirement communities are an alternative for
the long-term residential, social, and health care needs of
California's elderly residents and seek to provide a continuum of
care, minimize transfer trauma, and allow services to be provided in
an appropriately licensed setting.
   (b) Because elderly residents often both expend a significant
portion of their savings in order to purchase care in a continuing
care retirement community and expect to receive care at their
continuing care retirement community for the rest of their lives,
tragic consequences can result if a continuing care provider becomes
insolvent or unable to provide responsible care.
   (c) There is a need for disclosure concerning the terms of
agreements made between prospective residents and the continuing care
provider, and concerning the operations of the continuing care
retirement community.
   (d) Providers of continuing care should be required to obtain a
certificate of authority to enter into continuing care contracts and
should be monitored and regulated by the State Department of Social
Services.
   (e) This chapter applies equally to for-profit and nonprofit
provider entities.
   (f) This chapter states the minimum requirements to be imposed
upon any entity offering or providing continuing care.
   (g) Because the authority to enter into continuing care contracts
granted by the State Department of Social Services is neither a
guarantee of performance by the providers nor an endorsement of any
continuing care contract provisions, prospective residents must
carefully consider the risks, benefits, and costs before signing a
continuing care contract and should be encouraged to seek financial
and legal advice before doing so.
1771.  Unless the context otherwise requires, the definitions in
this section govern the interpretation of this chapter.
   (a) (1) "Affiliate" means any person, corporation, limited
liability company, business trust, trust, partnership, unincorporated
association, or other legal entity that directly or indirectly
controls, is controlled by, or is under common control with, a
provider or applicant.
   (2) "Affinity group" means a grouping of entities sharing a common
interest, philosophy, or connection (e.g., military officers,
religion).
   (3) "Annual report" means the report  each provider is required to
file annually with the department, as described in Section 1790.
   (4) "Applicant" means any entity, or combination of entities, that
submits and has pending an application to the department for a
permit to accept deposits and a certificate of authority.
   (5) "Assisted living services" includes, but is not limited to,
assistance with personal activities of daily living, including
dressing, feeding, toileting, bathing, grooming, mobility, and
associated tasks, to help provide for and maintain physical and
psychosocial comfort.
   (6) "Assisted living unit" means the living area or unit within a
continuing care retirement community that is specifically designed to
provide ongoing assisted living services.
   (7) "Audited financial statement" means financial statements
prepared in accordance with generally accepted accounting principles
including the opinion of an independent certified public accountant,
and notes to the financial statements considered customary or
necessary to provide full disclosure and complete information
regarding the provider's financial statements, financial condition,
and operation.
   (b) (reserved)
   (c) (1) "Cancel" means to destroy the force and effect of an
agreement or continuing care contract.
   (2) "Cancellation period" means the 90-day period, beginning when
the resident physically moves into the continuing care retirement
community, during which the resident may cancel the continuing care
contract, as provided in Section 1788.2.
   (3) "Care" means nursing, medical, or other health related
services, protection or supervision, assistance with the personal
activities of daily living, or any combination of those services.
   (4) "Cash equivalent" means certificates of deposit and United
States treasury securities with a maturity of five years or less.
   (5) "Certificate" or "certificate of authority" means the
certificate issued by the department, properly executed and bearing
the State Seal, authorizing a specified provider to enter into one or
more continuing care contracts at a single specified continuing care
retirement community.
   (6) "Condition" means a restriction, specific action, or other
requirement imposed by the department for the initial or continuing
validity of a permit to accept deposits, a provisional certificate of
authority, or a certificate of authority.  A condition may limit the
circumstances under which the provider may enter into any new
deposit agreement or contract, or may be imposed as a condition
precedent to the issuance of a permit to accept deposits, a
provisional certificate of authority, or a certificate of authority.
   (7) "Consideration" means some right, interest, profit, or benefit
paid, transferred, promised, or provided by one party to another as
an inducement to contract.  Consideration includes some forbearance,
detriment, loss, or responsibility, that is given, suffered, or
undertaken by a party as an inducement to another party to contract.
   (8) "Continuing care contract" means a contract that includes a
continuing care promise made, in exchange for an entrance fee, the
payment of periodic charges, or both types of payments.  A continuing
care contract may consist of one agreement or a series of agreements
and other writings incorporated by reference.
   (9) "Continuing care advisory committee" means an advisory panel
appointed pursuant to Section 1777.
   (10) "Continuing care promise" means a promise, expressed or
implied, by a provider to provide one or more elements of care to an
elderly resident for the duration of his or her life or for a term in
excess of one year.  Any such promise or representation, whether
part of a continuing care contract, other agreement, or series of
agreements, or contained in any advertisement, brochure, or other
material, either written or oral, is a continuing care promise.
   (11) "Continuing care retirement community" means a facility
located within the State of California where services promised in a
continuing care contract are provided.  A distinct phase of
development approved by the department may be considered to be the
continuing care retirement community when a project is being
developed in successive distinct phases over a period of time.  When
the services are provided in residents' own homes, the homes into
which the provider takes those services are considered part of the
continuing care retirement community.
   (12) "Control" means directing or causing the direction of the
financial management or the policies of another entity, including an
operator of a continuing care retirement community, whether by means
of the controlling entity's ownership interest, contract, or any
other involvement.  A parent entity or sole member of an entity
controls a subsidiary entity provider for a continuing care
retirement community if its officers, directors, or agents directly
participate in the management of the subsidiary entity or in the
initiation or approval of policies that affect the continuing care
retirement community's operations, including, but not limited to,
approving budgets or the administrator for a continuing care
retirement community.
   (d) (1) "Department" means the State Department of Social
Services.
   (2) "Deposit" means any transfer of consideration, including a
promise to transfer money or property, made by a depositor to any
entity that promises or proposes to promise to provide continuing
care, but is not authorized to enter into a continuing care contract
with the potential depositor.
   (3) "Deposit agreement" means any agreement made between any
entity accepting a deposit and a depositor.  Deposit agreements for
deposits received by an applicant prior to the department's release
of funds from the deposit escrow account shall be subject to the
requirements described in Section 1780.4.
   (4) "Depository" means a bank or institution that is a member of
the Federal Deposit Insurance Corporation or a comparable deposit
insurance program.
   (5) "Depositor" means any prospective resident who pays a deposit.
  Where any portion of the consideration transferred to an applicant
as a deposit or to a provider as consideration for a continuing care
contract is transferred by a person other than the prospective
resident or a resident, that third-party transferor shall have the
same cancellation or refund rights as the prospective resident or
resident for whose benefit the consideration was transferred.
   (6) "Director" means the Director of Social Services.
   (e) (1) "Elderly" means an individual who is 60 years of age or
older.
   (2) "Entity" means an individual, partnership, corporation,
limited liability company, and any other form for doing business.
Entity includes a person, sole proprietorship, estate, trust,
association, and joint venture.
   (3) "Entrance fee" means the sum of any initial, amortized, or
deferred transfer of consideration made or promised to be made by, or
on behalf of, a person entering into a continuing care contract for
the purpose of assuring care or related services pursuant to that
continuing care contract or as full or partial payment for the
promise to provide care for the term of the continuing care contract.
  Entrance fee includes the purchase price of a condominium,
cooperative, or other interest sold in connection with a promise of
continuing care. An initial, amortized, or deferred transfer of
consideration that is greater in value than 12 times the monthly care
fee shall be presumed to be an entrance fee.
   (4) "Equity" means the value of real property in excess of the
aggregate amount of all liabilities secured by the property.
   (5) "Equity interest" means an interest held by a resident in a
continuing care retirement community that consists of either an
ownership interest in any part of the continuing care retirement
community property or a transferable membership that entitles the
holder to reside at the continuing care retirement community.
   (6) "Equity project" means a continuing care retirement community
where residents receive an equity interest in the continuing care
retirement community property.
   (7) "Equity securities" shall refer generally to large and
midcapitalization corporate stocks that are publicly traded and
readily liquidated for cash, and shall include shares in mutual funds
that hold portfolios consisting predominantly of these stocks and
other qualifying assets, as defined by Section 1792.2.  Equity
securities shall also include other similar securities that are
specifically approved by the department.
   (8) "Escrow agent" means a bank or institution, including, but not
limited to, a title insurance company, approved by the department to
hold and render accountings for deposits of cash or cash
equivalents.
   (f) "Facility" means any place or accommodation where a provider
provides or will provide a resident with care or related services,
whether or not the place or accommodation is constructed, owned,
leased, rented, or otherwise contracted for by the provider.
   (g) (reserved)
   (h) (reserved)
   (i) (1) "Inactive certificate of authority" means a certificate
that has been terminated under Section 1793.8.
   (2) "Investment securities" means any of the following:
   (A) Direct obligations of the United States, including obligations
issued or held in book-entry form on the books of the United States
Department of the Treasury or obligations the timely payment of the
principal of, and the interest on, which are fully guaranteed by the
United States.
   (B) Obligations, debentures, notes, or other  evidences of
indebtedness issued or guaranteed by any of the following:
   (i) The Federal Home Loan Bank System.
   (ii) The Export-Import Bank of the United States.
   (iii) The Federal Financing Bank.
   (iv) The Government National Mortgage Association.
   (v) The Farmer's Home Administration.
   (vi) The Federal Home Loan Mortgage Corporation of the Federal
Housing Administration.
   (vii) Any agency, department, or other instrumentality of the
United States if the obligations are rated in one of the two highest
rating categories of each rating agency rating those obligations.
   (C) Bonds of the State of California or of any county, city and
county, or city in this state, if rated in one of the two highest
rating categories of each rating agency rating those bonds.
   (D) Commercial paper of finance companies and banking institutions
rated in one of the two highest categories of each rating agency
rating those instruments.
   (E) Repurchase agreements fully secured by collateral security
described in subparagraph (A) or (B), as evidenced by an opinion of
counsel, if the collateral is held by the provider or a third party
during the term of the repurchase agreement, pursuant to the terms of
the agreement, subject to liens or claims of third parties, and has
a market value, which is determined at least every 14 days, at least
equal to the amount so invested.
   (F) Long-term investment agreements, which have maturity dates in
excess of one year, with financial institutions, including, but not
limited to, banks and insurance companies or their affiliates, if the
financial institution's paying ability for debt obligations or
long-term claims or the paying ability of a related guarantor of the
financial institution for these obligations or claims, is rated in
one of the two highest rating categories of each rating agency rating
those instruments, or if the short-term investment agreements are
with the financial institution or the related guarantor of the
financial institution, the long-term or short-term debt obligations,
whichever is applicable, of which are rated in one of the two highest
long-term or short-term rating categories, of each rating agency
rating the bonds of the financial institution or the related
guarantor, provided that if the rating falls below the two highest
rating categories, the investment agreement shall allow the provider
the option to replace the financial institution or the related
guarantor of the financial institution or shall provide for the
investment securities to be fully collateralized by investments
described in subparagraph (A), and, provided further, if so
collateralized, that the provider has a perfected first security lien
on the collateral, as evidenced by an opinion of counsel and the
collateral is held by the provider.
   (G) Banker's acceptances or certificates of deposit of, or time
deposits in, any savings and loan association that meets any of the
following criteria:
   (i) The debt obligations of the savings and loan association, or
in the case of a principal bank, of the bank holding company, are
rated in one of the two highest rating categories of each rating
agency rating those instruments.
   (ii) The certificates of deposit or time deposits are fully
insured by the Federal Deposit Insurance Corporation.
   (iii) The certificates of deposit or time deposits are secured at
all times, in the manner and to the extent provided by law, by
collateral security described in subparagraph (A) or (B) with a
market value, valued at least quarterly, of no less than the original
amount of moneys so invested.
   (H) Taxable money market government portfolios restricted to
obligations issued or guaranteed as to payment of principal and
interest by the full faith and credit of the United States.
   (I) Obligations the interest on which is excluded from gross
income for federal income tax purposes and money market mutual funds
whose portfolios are restricted to these obligations, if the
obligations or mutual funds are rated in one of the two highest
rating categories by each rating agency rating those obligations.
   (J) Bonds that are not issued by the United States or any federal
agency, but that are listed on a national exchange and that are rated
at least "A" by Moody's Investors Service, or the equivalent rating
by Standard and Poor's Corporation or Fitch Investors Service.
   (K) Bonds not listed on a national exchange that are traded on an
over-the-counter basis, and that are rated at least "Aa" by Moody's
Investors Service or "AA" by Standard and Poor's Corporation or Fitch
Investors Service.
   (j) (reserved)
   (k) (reserved)
   (l) "Life care contract" means a continuing care contract that
includes a promise, expressed or implied, by a provider to provide or
pay for routine services at all levels of care, including acute care
and the services of physicians and surgeons, to the extent not
covered by other public or private insurance benefits, to a resident
for the duration of his or her life.  Care shall be provided under a
life care contract in a continuing care retirement community having a
comprehensive continuum of care, including a skilled nursing
facility, under the ownership and supervision of the provider on or
adjacent to the premises.  No change may be made in the monthly fee
based on level of care.  A life care contract shall also include
provisions to subsidize residents who become financially unable to
pay their monthly care fees.
   (m) (1) "Monthly care fee" means the fee charged to a resident in
a continuing care contract on a monthly or other periodic basis for
current accommodations and services including care, board, or
lodging.  Periodic entrance fee payments or other prepayments shall
not be monthly care fees.
   (2) "Monthly fee contract" means a continuing care contract that
requires residents to pay monthly care fees.
   (n) "Nonambulatory person" means a person who is unable to leave a
building unassisted under emergency conditions in the manner
described by Section 13131.
   (o) (reserved)
   (p) (1) "Per capita cost" means a continuing care retirement
community's operating expenses, excluding depreciation, divided by
the average number of residents.
   (2) "Periodic charges" means fees paid by a resident on a periodic
basis.
   (3) "Permit to accept deposits" means a written authorization by
the department permitting an applicant to enter into deposit
agreements regarding a single specified continuing care retirement
community.
   (4) "Prepaid contract" means a continuing care contract in which
the monthly care fee, if any, may not be adjusted to cover the actual
cost of care and services.
   (5) "Preferred access" means that residents who have previously
occupied a residential living unit have a right over other persons to
any assisted living or skilled nursing beds that are available at
the community.
   (6) "Processing fee" means a payment to cover administrative costs
of processing the application of a depositor or prospective
resident.
   (7) "Promise to provide one or more elements of care" means any
expressed or implied representation that one or more elements of care
will be provided or will be available, such as by preferred access.
   (8) "Proposes" means a representation that an applicant or
provider will or intends to make a future promise to provide care,
including a promise that is subject to a condition, such as the
construction of a continuing care retirement community or the
acquisition of a certificate of authority.
   (9) "Provider" means an entity that provides continuing care,
makes a continuing care promise, or proposes to promise to provide
continuing care.  "Provider" also includes any entity that controls
an entity that provides continuing care, makes a continuing care
promise, or proposes to promise to provide continuing care.  The
department shall determine whether an entity controls another entity
for purposes of this article.  No homeowner's association,
cooperative, or condominium association may be a provider.
   (10) "Provisional certificate of authority" means the certificate
issued by the department, properly executed and bearing the State
Seal, under Section 1786.  A provisional certificate of authority
shall be limited to the specific continuing care retirement community
and number of units identified in the applicant's application.
   (q) (reserved)
   (r) (1) "Refund reserve" means the reserve a provider is required
to maintain, as provided in Section 1792.6.
   (2) "Refundable contract" means a continuing care contract that
includes a promise, expressed or implied, by the provider to pay an
entrance fee refund or to repurchase the transferor's unit,
membership, stock, or other interest in the continuing care
retirement community when the promise to refund some or all of the
initial entrance fee extends beyond the resident's sixth year of
residency.  Providers that enter into refundable contracts shall be
subject to the refund reserve requirements of Section 1792.6.  A
continuing care contract that includes a promise to repay all or a
portion of an entrance fee that is conditioned upon reoccupancy or
resale of the unit previously occupied by the resident shall not be
considered a refundable contract for purposes of the refund reserve
requirements of Section 1792.6, provided that this conditional
promise of repayment is not referred to by the applicant or provider
as a "refund."
   (3) "Resale fee" means a levy by the provider against the proceeds
from the sale of a transferor's equity interest.
   (4) "Reservation fee" refers to consideration collected by an
entity that has made a continuing care promise or is proposing to
make this promise and has complied with Section 1771.4.
   (5) "Resident" means a person who enters into a continuing care
contract with a provider, or who is designated in a continuing care
contract to be a person being provided or to be provided services,
including care, board, or lodging.
   (6) "Residential care facility for the elderly" means a housing
arrangement as defined by Section 1569.2.
   (7) "Residential living unit" means a living unit in a continuing
care retirement community that is not used exclusively for assisted
living services or nursing services.
   (s) (reserved)
   (t) (1) "Termination" means the ending of a continuing care
contract as provided for in the terms of the continuing care
contract.
   (2) "Transfer trauma" means death, depression, or regressive
behavior, that is caused by the abrupt and involuntary transfer of an
elderly resident from one home to another and results from a loss of
familiar physical environment, loss of well-known neighbors,
attendants, nurses and medical personnel, the stress of an abrupt
break in the small routines of daily life, or the loss of visits from
friends and relatives who may be unable to reach the new facility.
   (3) "Transferor" means a person who transfers, or promises to
transfer, consideration in exchange for care and related services
under a continuing care contract or proposed continuing care
contract, for the benefit of another.  A transferor shall have the
same rights to cancel and obtain a refund as the depositor under the
deposit agreement or the resident under a continuing care contract.
1771.2.  (a) An entity shall apply for and hold a currently valid
permit to accept deposits before it may enter into a deposit
agreement or accept a deposit.
   (b) A provider shall hold a currently valid provisional
certificate of authority or certificate of authority before it may
enter into a continuing care contract.
   (c) Before a provider subcontracts or assigns to another entity
the responsibility to provide continuing care, that other entity
shall have a current and valid certificate of authority.  A provider
holding a certificate of authority may contract for the provision of
a particular aspect of continuing care, such as medical care, with
another entity that does not possess a certificate of authority, if
that other entity is appropriately licensed under laws of this state
to provide that care, and the provider has not paid in advance for
more than one year for that care.
   (d) If an entity enters into an agreement to provide care for life
or for more than one year to a person under 60 years of age in
return for consideration, and the agreement includes the provision of
services to that person after age 60, when the person turns 60 years
of age, the promising entity shall comply with all the requirements
imposed by this chapter.
1771.3.  (a) This chapter shall not apply to either of the
following:
   (1) An arrangement for the care of a person by a relative.
   (2) An arrangement for the care of a person or persons from only
one family by a friend.
   (b) This chapter shall not apply to any admission or residence
agreements offered by residential communities for the elderly or
residential care facilities for the elderly that promise residents
preferred access to assisted living services or nursing care, when
each of the following conditions is satisfied:
   (1) Residents pay on a fee-for-service basis for available
assisted living services and nursing care.
   (2) The fees paid for available assisted living services and
nursing care are the same for residents who have previously occupied
a residential living unit as for residents who have not previously
occupied a residential living unit.
   (3) No entrance fee or prepayment for future care or access, other
than monthly care fees, is paid by, or charged to, any resident at
the community or facility.  For purposes of this paragraph, the term
entrance fee shall not include initial, deferred, or amortized
payments that cumulatively do not exceed seven thousand five hundred
dollars ($7,500).
   (4) The provider has not made a continuing care promise of
preferred access, other than a promise as described in paragraph (5).
   (5) The admission or residence agreement states:
   (A) "This agreement does not guarantee that an assisted living or
nursing bed will be available for residents, but, instead, promises
preferred access to any assisted living or nursing beds that are
available at the community or facility.  The promise of preferred
access gives residents who have previously occupied a residential
living unit a right over other persons to such beds."
   (B) "A continuing care contract promises that care will be
provided to residents for life or for a term in excess of a year.
(Name of community or facility) is not a continuing care retirement
community and (name of provider) does not hold a certificate of
authority to enter into continuing care contracts and is not required
to have the same fiscal reserves as a continuing care provider.
This agreement is not a continuing care contract and is exempted from
the continuing care statutes under subdivision (b) of Section 1771.3
of the Health and Safety Code so long as the conditions set forth in
that section are met."
   (6) The admission or residence agreement also states the policies
and procedures regarding transfers to higher levels of care within
the community or facility.
   (c) Any entity may apply to the department for a Letter of
Exemption stating that the requesting entity satisfies the
requirements for an exemption under this section.
   (d) The department shall issue a Letter of Exemption to a
requesting entity if the department determines either of the
following:
   (1) The requesting entity satisfies each of the requirements for
an exemption under subdivision (b).
   (2) The requesting entity satisfies each of the requirements for
an exemption under subdivision (b) other than the requirements of
paragraph (2) of subdivision (b), and there is no substantial
difference between the following:
   (A) The fees for available assisted living services and skilled
nursing care paid by residents who have previously occupied a
residential living unit.
   (B) The fees for available assisted living services and skilled
nursing care paid by residents who have not previously occupied a
residential living unit.
   (e) An application to the department for a Letter of Exemption
shall include all of the following:
   (1) A nonrefundable one thousand dollar ($1,000) application fee.
   (2) The name and business address of the applicant.
   (3) A description of the services and care available or provided
to residents of the community or facility.
   (4) Documentation establishing that the requesting entity
satisfies the requirements for an exemption under this section,
including all of the following:
   (A) A schedule showing all fees for assisted living services and
skilled nursing care charged to residents at the facility or
community who have previously occupied a residential living unit.
   (B) A schedule showing all fees for assisted living services and
skilled nursing care charged to residents at the facility or
community who have not previously occupied a residential living unit.
   (C) A description of the differences between the fees for assisted
living services and skilled nursing care charged to residents who
have not previously occupied a residential unit and the fees for
assisted living services and skilled nursing care charged to
residents who have previously occupied a residential unit.
   (D) A schedule showing any other fees charged to residents of the
community or facility.
   (E) Copies of all admission and residence agreement forms that
have been entered into, or will be entered into, with residents at
the community or facility.
   (5) Any other information reasonably requested by the department.
   (f) If at any time any of the conditions stated in this section
are not satisfied, then the requirements of this chapter apply, and
the department may impose appropriate remedies and penalties set
forth in Article 7 (commencing with Section 1793.5).
1771.4.  An entity may conduct a market test for a proposed
continuing care retirement community and collect reservation fees
from persons interested in residing at the proposed continuing care
retirement community without violating this chapter if all of the
following conditions are met:
   (a) The entity has filed with the department an application for a
permit to accept deposits and a certificate of authority for the
project.
   (b) The entity's application includes the proposed reservation
agreement form and a proposed escrow agreement that provide all of
the following:
   (1) All fees shall be deposited in escrow.
   (2) Refunds shall be made within 10 calendar days after the payer'
s or proposed resident's request or 10 days after denial of the
application for a permit to accept deposits.
   (3) All reservation fees shall be converted to deposits within 15
days after a permit to accept deposits is issued.
   (c) The department has acknowledged in writing its receipt of the
entity's application and its approval of the entity's proposed
reservation agreement between the payer and the entity and the escrow
agreement between the escrow holder and the entity.
   (d) The amount of any reservation fee collected by the entity does
not exceed one thousand dollars ($1,000) or 1 percent of the average
entrance fee amount as determined from the entity's application,
whichever is greater.
   (e) The entity places all reservation fees collected by the entity
into an escrow under the terms of the approved reservation agreement
and escrow agreement.
1771.5.  The department shall not issue a provisional certificate of
authority or a certificate of authority to an applicant until the
applicant has obtained licenses for the entire continuing care
retirement community, including a license to operate the residential
living and assisted living units, pursuant to Chapter 3.2 (commencing
with Section 1569) and if a skilled nursing facility is on the
premises, a license for the facility pursuant to Chapter 2
(commencing with Section 1250).
1771.6.  (a) Any entity may apply to the department for a Letter of
Nonapplicability for reasons other than those specified in Section
1771.3, which states that the provisions of this chapter do not apply
to its community, project, or proposed project.
   (b) Applications for Letters of Nonapplicability shall be made to
the department in writing and include the following:
   (1) A nonrefundable one thousand dollar ($1,000) application fee.
   (2) A list of the reasons why the existing or proposed project may
not be subject to this chapter.
   (3) A copy of the existing or proposed contract between the entity
and residents.
   (4) Copies of all advertising material.
   (5) Any other information reasonably requested by the department.
   (c) The department shall do both of the following:
   (1) Within seven calendar days, acknowledge receipt of the request
for a Letter of Nonapplicability.
   (2) Within 30 calendar days after all materials are received,
either issue the Letter of Nonapplicability or notify the entity of
the department's reasons for denial of the request.
   (d) (1) If the department determines that the entity does not
qualify for a Letter of Nonapplicability, the entity shall refrain
from, or immediately cease, entering into continuing care contracts.
   (2) If an entity to which this subdivision applies intends to
provide continuing care, an application for a certificate of
authority shall be required to be filed with the department pursuant
to this chapter.
   (3) If an entity to which this subdivision applies does not intend
to provide continuing care, it shall alter its plan of operation so
that the project is not subject to this chapter.  To obtain a Letter
of Nonapplicability for the revised project, the entity shall submit
a new application and fee.
1771.7.  (a) No resident of a continuing care retirement community
shall be deprived of any civil or legal right, benefit, or privilege
guaranteed by law, by the California Constitution, or by the United
States Constitution solely by reason of status as a resident of a
community. In addition, because of the discretely different character
of residential living unit programs that are a part of continuing
care retirement communities, this section shall augment Chapter 3.9
(commencing with Section 1599), Sections 73523 and 87572 of Title 22
of the California Code of Regulations, and other applicable state and
federal law and regulations.
   (b) A prospective resident shall have the right to visit each of
the different care levels and to inspect assisted living and skilled
nursing home licensing reports including, but not limited to, the
most recent inspection reports and findings of complaint
investigations covering a period of no less than two years, prior to
signing a continuing care contract.
   (c) All residents in residential living units shall have all of
the following rights:
   (1) To live in an attractive, safe, and well maintained physical
environment.
   (2) To live in an environment that enhances personal dignity,
maintains independence, and encourages self-determination.
   (3) To participate in activities that meet individual physical,
intellectual, social, and spiritual needs.
   (4) To expect effective channels of communication between
residents and staff, and between residents and the administration or
provider's governing body.
   (5) To receive a clear and complete written contract that
establishes the mutual rights and obligations of the resident and the
continuing care retirement community.
   (6) To manage his or her financial affairs.
   (7) To be assured that all donations, contributions, gifts, or
purchases of provider-sponsored financial products shall be
voluntary, and may not be a condition of acceptance or of ongoing
eligibility for services.
   (8) To maintain and establish ties to the local community.
   (9) To organize and participate freely in the operation of
independent resident organizations and associations.
   (d) A continuing care retirement community shall maintain an
environment that enhances the residents' self-determination and
independence. The provider shall do both of the following:
   (1)  Encourage the formation of a resident association by
interested residents who may elect a governing body.  The provider
shall provide space and post notices for meetings, and provide
assistance in attending meetings for those residents who request it.
In order to promote a free exchange of ideas, at least part of each
meeting shall be conducted without the presence of any continuing
care retirement community personnel. The association may, among other
things, make recommendations to management regarding resident issues
that impact the residents' quality of life, quality of care,
exercise of rights, safety and quality of the physical environment,
concerns about the contract, fiscal matters, or other issues of
concern to residents. The management shall respond, in writing, to a
written request or concern of the resident association within 20
working days of receiving the written request or concern. Meetings
shall be open to all residents to attend as well as to present
issues. Executive sessions of the governing body shall be attended
only by the governing body.
   (2) Establish policies and procedures that promote the sharing of
information, dialogue between residents and management, and access to
the provider's governing body. The provider shall biennially conduct
a resident satisfaction survey that shall be made available to the
resident association or its governing body, or, if neither exists, to
a committee of residents at least 14 days prior to the next
semiannual meeting of residents and the governing board of the
provider required by subdivision (c) of Section 1771.8. A copy of the
survey shall be posted in a conspicuous location at each facility.
   (e) In addition to any statutory or regulatory bill of rights
required to be provided to residents of residential care facilities
for the elderly or skilled nursing facilities, the provider shall
provide a copy of the bill of rights prescribed by this section to
each resident at the time or before the resident signs a continuing
care contract, and at any time when the resident is proposed to be
moved to a different level of care.
   (f) Each continuing care retirement community shall prominently
post in areas accessible to the residents and visitors a notice that
a copy of rights applicable to residents pursuant to this section and
any governing regulation issued by the Continuing Care Contracts
Branch of the State Department of Social Services is available upon
request from the provider. The notice shall also state that the
residents have a right to file a complaint with the Continuing Care
Contracts Branch for any violation of those rights and shall contain
information explaining how a complaint may be filed, including the
telephone number and address of the Continuing Care Contracts Branch.
   (g) The resident has the right to freely exercise all rights
pursuant to this section, in addition to political rights, without
retaliation by the provider.
   (h) The department may, upon receiving a complaint of a violation
of this section, request a copy of the policies and procedures along
with documentation on the conduct and findings of any
self-evaluations and consult with the Continuing Care Advisory
Committee for determination of compliance.
   (i) Failure to comply with this section shall be grounds for the
imposition of conditions on, suspension of, or revocation of the
provisional certificate of authority or certificate of authority
pursuant to Section 1793.21.
   (j) Failure to comply with this section constitutes a violation of
residents' rights. Pursuant to Section 1569.49 of the Health and
Safety Code, the department shall impose and collect a civil penalty
of not more than one hundred fifty dollars ($150) per violation upon
a continuing care retirement community that violates a right
guaranteed by this section.
1771.8.  (a) The Legislature finds and declares all of the
following:
   (1) The residents of continuing care retirement communities have a
unique and valuable perspective on the operations of and services
provided in the community in which they live.
   (2) Resident input into decisions made by the provider is an
important factor in creating an environment of cooperation, reducing
conflict, and ensuring timely response and resolution to issues that
may arise.
   (3) Continuing care retirement communities are strengthened when
residents know that their views are heard and respected.
   (b) The Legislature encourages continuing care retirement
communities to exceed the minimum resident participation requirements
established by this section by, among other things, the following:
   (1) Encouraging residents to form a resident association, and
assisting the residents, the resident association, and its governing
body to keep informed about the operation of the continuing care
retirement community.
   (2) Encouraging residents of a continuing care retirement
community or their elected representatives to select residents to
participate as board members of the governing body of the provider.
   (3) Quickly and fairly resolving any dispute, claim, or grievance
arising between a resident and the continuing care retirement
community.
   (c) The governing body of a provider, or the designated
representative of the provider, shall hold, at a minimum, semiannual
meetings with the residents of the continuing care retirement
community, or the resident association or its governing body, for the
purpose of the free discussion of subjects including, but not
limited to, income, expenditures, and financial trends and issues as
they apply to the continuing care retirement community and proposed
changes in policies, programs, and services.  Nothing in this section
precludes a provider from taking action or making a decision at any
time, without regard to the meetings required under this subdivision.
   (d) At least 30 days prior to the implementation of any increase
in the monthly care fee, the designated representative of the
provider shall convene a meeting, to which all residents shall be
invited, for the purpose of discussing the reasons for the increase,
the basis for determining the amount of the increase, and the data
used for calculating the increase.  This meeting may coincide with
the semiannual meetings provided for in subdivision (c).  At least 14
days prior to the meeting to discuss any increase in the monthly
care fee, the provider shall make available to each resident or
resident household comparative data showing the budget for the
upcoming year, the current year's budget, and actual and projected
expenses for the current year, and a copy shall be posted in a
conspicuous location at each facility.
   (e) The governing body of a provider or the designated
representative of the provider shall provide residents with at least
14 days' advance notice of each meeting provided for in subdivisions
(c) and (d), and shall permit residents attending the meeting to
present issues orally and in writing.  The governing body of a
provider or the designated representative of the provider shall post
the notice of, and the agenda for, the meeting in a conspicuous place
in the continuing care retirement community at least 14 days prior
to the meeting.  The governing body of a provider or the designated
representative of the provider shall make available to residents of
the continuing care retirement community upon request the agenda and
accompanying materials at least seven days prior to the meeting.
   (f) Each provider shall make available to the resident association
or its governing body, or if neither exists, to a committee of
residents, a financial statement of activities for that facility
comparing actual costs to budgeted costs broken down by expense
category, not less than semiannually, and shall consult with the
resident association or its governing body, or, if neither exists,
with a committee of residents, during the annual budget planning
process.  The effectiveness of consultations during the annual budget
planning process shall be evaluated at a minimum every two years by
the continuing care retirement community administration.  The
evaluation, including any policies adopted relating to cooperation
with residents, shall be made available to the resident association
or its governing body, or, if neither exists, to a committee of
residents at least 14 days prior to the next semiannual meeting of
residents and the provider's governing body provided for in
subdivision (c), and a copy of the evaluation shall be posted in a
conspicuous location at each facility.
   (g) Each provider shall, within 10 days after the annual report
required pursuant to Section 1790 is submitted to the department,
provide, at a central and conspicuous location in the community, a
copy of the annual report, including the multifacility statement of
activities, and including a copy of the annual audited financial
statement, but excluding personal confidential information.
   (h) Each provider shall maintain, as public information, available
upon request to residents, prospective residents, and the public,
minutes of the board of director's meetings and shall retain these
records for at least three years from the date the records were filed
or issued.
   (i) The governing body of a provider that is not part of a
multifacility organization with more than one continuing care
retirement community in the state shall accept at least one resident
of the continuing care retirement community it operates to
participate as a nonvoting resident representative to the provider's
governing body.
   (j) In a multifacility organization having more than one
continuing care retirement community in the state, the governing body
of the multifacility organization shall elect either to have at
least one nonvoting resident representative to the provider's
governing body for each California-based continuing care retirement
community the provider operates or to have a resident-elected
committee composed of representatives of the residents of each
California-based continuing care retirement community that the
provider operates select or nominate at least one nonvoting resident
representative to the provider's governing body for every three
California-based continuing care retirement communities or fraction
thereof that the provider operates.  If a multifacility organization
elects to have one representative for every three communities that
the provider operates, the provider shall provide to the president of
the residents association of each of the communities that do not
have a resident representative, the same notice of board meetings,
board packets, minutes, and other materials as the resident
representative.  At the reasonable discretion of the provider,
information related to litigation, personnel, competitive advantage,
or confidential information that is not appropriate to disclose, may
be withheld.
   (k) In order to encourage innovative and alternative models of
resident involvement, a resident selected pursuant to subdivision (i)
to participate as a resident representative to the provider's
governing body may, at the option of the resident association, be
selected in any one of the following ways:
   (1) By a majority vote of the resident association of a provider
or by a majority vote of a resident-elected committee of residents of
a multifacility organization.
   (2) If no resident association exists, any resident may organize a
meeting of the majority of the residents of the continuing care
retirement community to select or nominate residents to represent
them before the governing body.
   (3) Any other method designated by the resident association.
   (l) The resident association, or organizing resident, or in the
case of a multifacility organization, the resident-elected committee
of residents, shall give residents of the continuing care retirement
community at least 30 days' advance notice of the meeting to select a
resident representative and shall post the notice in a conspicuous
place at the continuing care retirement community.
   (m) (1) Except as provided in subdivision (n), the resident
representative shall receive the same notice of board meetings, board
packets, minutes, and other materials as members and shall be
permitted to attend, speak, and participate in all meetings of the
board.
   (2) Resident representatives may share information from board
meetings with other residents, unless the information is confidential
or doing so would violate fiduciary duties to the provider.  In
addition, a resident representative shall be permitted to attend
meetings of the board committee or committees that review the annual
budget of the facility or facilities and recommend increases in
monthly care fees.  The resident shall receive the same notice of
committee meetings, information packets, minutes, and other materials
as committee members, and shall be permitted to attend, speak at,
and participate in, committee meetings.  Resident representatives
shall perform their duties in good faith and with such care,
including reasonable inquiry, as an ordinarily prudent person in a
like position would use under similar circumstances.
   (n) Notwithstanding subdivision (m), the governing body may
exclude resident representatives from its executive sessions and from
receiving board materials to be discussed during executive session.
However, resident representatives shall be included in executive
sessions and shall receive all board materials to be discussed during
executive sessions related to discussions of the annual budgets,
increases in monthly care fees, indebtedness, and expansion of new
and existing continuing care retirement communities.
   (o) The provider shall pay all reasonable travel costs for the
resident representative.
   (p) The provider shall disclose in writing the extent of resident
involvement with the board to prospective residents.
   (q) Nothing in this section prohibits a provider from exceeding
the minimum resident participation requirements of this section by,
for example, having more resident meetings or more resident
representatives to the board than required or by having one or more
residents on the provider's governing body who are selected with the
active involvement of residents.
   (r) On or before April 1, 2003, the department, with input from
the Continuing Care Advisory Committee of the department established
pursuant to Section 1777, shall do all of the following:
   (1) Make recommendations to the Legislature as to whether any
changes in current law regarding resident representation to the board
is needed.
   (2) Provide written guidelines available to residents and
providers that address issues related to board participation,
including rights and responsibilities, and that provide guidance on
the extent to which resident representatives who are not voting
members of the board have a duty of care, loyalty, and obedience to
the provider and the extent to which providers can classify
information as confidential and not subject to disclosure by resident
representatives to other residents.
1771.10.  Each provider shall adopt a comprehensive disaster
preparedness plan specifying policies for evacuation, relocation,
continued services, reconstruction, organizational structure,
insurance coverage, resident education, and plant replacement.
1772.  (a) No report, circular, public announcement, certificate,
financial statement, or any other printed matter or advertising
material, or oral representation, that states or implies that an
entity sponsors, guarantees, or assures the performance of any
continuing care contract, shall be published or presented to any
prospective resident unless both of the following have been met:
   (1) Paragraph (5) of subdivision (a) of Section 1788 applies and
the requirements of that paragraph have been satisfied.
   (2) The entity files with the department a duly authorized and
executed written declaration that it accepts full financial
responsibility for each continuing care contract.  The filing entity
shall be subject to the application requirements set forth in Article
2 (commencing with Section 1779), shall be a coobligor for the
subject contracts, and shall be a coprovider on the applicable
provisional certificate of authority and certificate of authority.
   (b) Implied sponsorship includes the use of the entity's name for
the purpose of implying that the entity's reputation may be relied
upon to ensure the performance of the continuing care contract.
   (c) Any implication that the entity may be financially responsible
for these contracts may be rebutted by a conspicuous statement, in
all continuing care contracts and marketing materials, that clearly
discloses to prospective residents and all transferors that the
entity is not financially responsible.
   (d) On written appeal to the department, and for good cause shown,
the department may, in its discretion, allow an affinity group
exemption from this section.  If an exemption is granted, every
continuing care contract shall include a conspicuous statement which
clearly discloses to prospective residents and all transferors that
the affinity group entity is not financially responsible.
   (e) If the name of an entity, including, but not limited to, a
religion, is used in connection with the development, marketing, or
continued operation of a continuing care retirement community, but
that entity does not actually own, control, manage, or otherwise
operate the continuing care retirement community, the provider shall
clearly disclose the absence of that affiliation, involvement, or
association with the continuing care retirement community in the
continuing care contract.
1772.2.  (a) All printed advertising materials, including brochures,
circulars, public announcements, and similar publications pertaining
to continuing care or a continuing care retirement community shall
specify the number on the provider's provisional certificate of
authority or certificate of authority.
   (b) If the provider has not been issued a certificate of
authority, all advertising materials shall specify both of the
following:
   (1) Whether an application has been filed.
   (2) If applicable, that a permit to accept deposits or a
provisional certificate of authority has been issued.
1773.  (a) A provisional certificate of authority or certificate of
authority may not be sold, transferred, or exchanged in any manner.
A provider may not sell or transfer ownership of the continuing care
retirement community without the approval of the department.  Any
violation of this section shall cause the applicable provisional
certificate of authority or certificate of authority to be forfeited
by operation of law pursuant to subdivision (c) of Section 1793.7.
   (b) A provider may not enter into a contract with a third party
for overall management of the continuing care retirement community
without the approval of the department.  The department shall review
the transaction for consistency with this chapter.
   (c) Any violation of this section shall be grounds for revocation
for the provider's provisional certificate of authority or
certificate of authority under Section 1793.21.
1774.  No arrangement allowed by a permit to accept deposits, a
provisional certificate or authority, or a certificate of authority
issued by the department under this chapter may be deemed a security
for any purpose.
1775.  (a) To the extent that this chapter, as interpreted by the
department, conflicts with the statutes, regulations, or
interpretations governing the sale or hire of real property, this
chapter shall prevail.
   (b) Notwithstanding any law or regulation to the contrary, a
provider for a continuing care retirement community may restrict or
abridge the right of any resident, whether or not the resident owns
an equity interest, to sell, lease, encumber, or otherwise convey any
interest in the resident's unit, and may require that the resident
only sell, lease, or otherwise convey the interest to persons
approved by the provider.  Provider approval may be based on factors
which include, but are not limited to, age, health status, insurance
risk, financial status, or burden on the provider's personnel,
resources, or physical facility.  The provider shall record any
restrictions on a real property interest.
   (c) To the extent that this chapter conflicts with Sections 51.2
and 51.3 of the Civil Code, this chapter shall have precedence.  A
continuing care provider, at its discretion, may limit entrance based
on age.
   (d) This chapter imposes minimum requirements upon any entity
promising to provide, proposing to promise to provide, or providing
continuing care.
   (e) This chapter shall be liberally construed for the protection
of persons attempting to obtain or receiving continuing care.
   (f) A resident's entry into a continuing care contract described
in this chapter shall be presumptive evidence of the resident's
intent not to return to his or her prior residence to live for
purposes of qualifying for Medi-Cal coverage under Sections 14000 et
seq. of the Welfare and Institutions Code and Section 50425 of Title
22 of the California Code of Regulations.
1776.  The department shall adopt, amend, or repeal, in accordance
with Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code, reasonable regulations
as may be necessary or proper to carry out the purposes and intent of
this chapter and to protect the rights of the elderly.
1776.2.  The department may, by any duly authorized representative,
inspect and examine any continuing care retirement community,
including the books and records thereof, or the performance of any
service required by the continuing care contracts.
1776.3.  (a) The Continuing Care Contracts Branch of the department
shall enter and review each continuing care retirement community in
the state at least once every three years to augment the branch's
assessment of the provider's financial soundness.
   (b) During its facility visits, the branch shall consider the
condition of the facility, whether the facility is operating in
compliance with applicable state law, and whether the provider is
performing the services it has specified in its continuing care
contracts.
   (c) The branch shall issue guidelines that require each provider
to adopt a comprehensive disaster preparedness plan, update that plan
at least every three years, submit a copy to the department, and
make copies available to residents in a prominent location in each
continuing care retirement community facility.
   (d) (1) The branch shall respond within 15 business days to
residents' rights, service-related, and financially related
complaints by residents, and shall furnish to residents upon request
and within 15 business days any document or report filed with the
department by a continuing care provider, except documents protected
by privacy laws.
   (2) The branch shall provide the Continuing Care Contracts
Advisory Committee with a summary of all residents' rights,
service-related, and financially related complaints by residents.
The provider shall disclose any citation issued by the department
pursuant to Section 1793.6 in its disclosure statement to residents
as updated annually, and shall post a notice of the citation in a
conspicuous location in the facility.  The notice shall include a
statement indicating that residents may obtain additional information
regarding the citation from the provider and the department.
   (e) The branch shall annually review, summarize, and report to the
director on the work of the Continuing Care Contracts Advisory
Committee, including any issues arising from its review of the
condition of any continuing care retirement community or any
continuing care retirement community provider, and including any
recommendations for actions by the committee, the department, or the
Legislature to improve oversight of continuing care retirement
community.
1776.4.  The department may contract with any entity to provide
consultation services.  In providing the services, the entity shall
conform to the requirements of this chapter and to the rules,
regulations, and standards of the department.  The department shall
reimburse an entity for services performed pursuant to this section.
1776.6.  (a) Pursuant to the California Public Records Act (Chapter
3.5 (commencing with Section 6250) of Division 7 of Title 1 of the
Government Code) and the Information Practices Act of 1977 (Chapter 1
(commencing with Section 1798) of Title 1.8 of Part 4 of Division 3
of the Civil Code), the following documents are public information
and shall be provided by the department upon request:  audited
financial statements, annual reports and accompanying documents,
compliance or noncompliance with reserve requirements, whether an
application for a permit to accept deposits and certificate of
authority has been filed, whether a permit or certificate has been
granted or denied, and the type of care offered by the provider.
   (b) The department shall regard resident data used in the
calculation of reserves as confidential.
1777.  (a) The Continuing Care Advisory Committee of the department
shall act in an advisory capacity to the department on matters
relating to continuing care contracts.
   (b) The members of the committee shall include:
   (1) Three representatives of nonprofit continuing care providers
pursuant to this chapter, each of whom shall have offered continuing
care services for at least five years prior to appointment.  One
member shall represent a multifacility provider and shall be
appointed by the Governor in even years.  One member shall be
appointed by the Senate Committee on Rules in odd years.  One member
shall be appointed by the Speaker of the Assembly in odd years.
   (2) Three senior citizens who are not eligible for appointment
pursuant to paragraphs (1) and (4) who shall represent consumers of
continuing care services, all of whom shall be residents of
continuing care retirement communities but not residents of the same
provider.  One senior citizen member shall be appointed by the
Governor in even years.  One senior citizen member shall be appointed
by the Senate Committee on Rules in odd years.  One senior citizen
member shall be appointed by the Speaker of the Assembly in odd
years.
   (3) A certified public accountant with experience in the
continuing care industry, who is not a provider of continuing care
services.  This member shall be appointed by the Governor in even
years.
   (4) A representative of a for-profit provider of continuing care
contracts pursuant to this chapter.  This member shall be appointed
by the Governor in even years.
   (5) An actuary.  This member shall be appointed by the Governor in
even years.
   (6) One representative of residents of continuing care retirement
communities appointed by the senior citizen representatives on the
committee.
   (7) One representative of either nonprofit or for-profit providers
appointed by the representatives of nonprofit and for-provider
providers on the committee.
   (c) Commencing January 1, 1997, all members shall serve two-year
terms and be appointed based on their interest and expertise in the
subject area.  The Governor shall designate the chairperson for the
committee with the advice and consent of the Senate.  A member may be
reappointed at the pleasure of the appointing power.  The appointing
power shall fill all vacancies on the committee within 60 days.  All
members shall continue to serve until their successors are appointed
and qualified.
   (d) The members of the committee shall serve without compensation,
except that each member shall be paid from the Continuing Care
Provider Fee Fund a per diem of twenty-five dollars ($25) for each
day's attendance at a meeting of the committee not to exceed six days
in any month.  The members of the committee shall also receive their
actual and necessary travel expenses incurred in the course of their
duties.  Reimbursement of travel expenses shall be at rates not to
exceed those applicable to comparable state employees under
Department of Personnel Administration regulations.
   (e) Prior to commencement of service, each member shall file with
the department a statement of economic interest and a statement of
conflict of interest pursuant to Article 3 (commencing with Section
87300) of the Government Code.
   (f) If, during the period of appointment, any member no longer
meets the qualifications of subdivision (b), that member shall submit
his or her resignation to their appointing power and a qualified new
member shall be appointed by the same power to fulfill the remainder
of the term.
1777.2.  (a) The Continuing Care Advisory Committee shall:
   (1) Review the financial and managerial condition of continuing
care retirement communities operating under a certificate of
authority.
   (2) Review the financial condition of any continuing care
retirement community that the committee determines is indicating
signs of financial difficulty and may be in need of close
supervision.
   (3) Monitor the condition of those continuing care retirement
communities that the department or the chair of the committee may
request.
   (4) Make available consumer information on the selection of
continuing care contracts and necessary contract protections in the
purchase of continuing care contracts.
   (5) Review new applications regarding financial, actuarial, and
marketing feasibility as requested by the department.
   (b) The committee shall make recommendations to the department
regarding needed changes in its rules and regulations and upon
request provide advice regarding the feasibility of new continuing
care retirement communities and the correction of problems relating
to the management or operation of any continuing care retirement
community.  The committee shall also perform any other advisory
functions necessary to improve the management and operation of
continuing care retirement communities.
   (c) The committee may report on its recommendations directly to
the director of the department.
   (d) The committee may hold meetings, as deemed necessary to the
performance of its duties.
1777.4.  Any member of the Continuing Care Advisory Committee is
immune from civil liability based on acts performed in his or her
official capacity.  Costs of defending civil actions brought against
a member for acts performed in his or her official capacity shall be
borne by the complainant.  However, nothing in this section immunizes
any member for acts or omissions performed with malice or in bad
faith.
1778.  (a) There is hereby created in the State Treasury a fund
which shall be known as the Continuing Care Provider Fee Fund.  The
fund shall consist of fees received by the department pursuant to
this chapter.  Notwithstanding Section 13340 of the Government Code,
the Continuing Care Provider Fee Fund is hereby continuously
appropriated to the department, without regard to fiscal years.
   (b) Use of the funds appropriated pursuant to this section shall
include funding of the following:
   (1) Program personnel salary costs, to include but not be limited
to: Continuing Care Contracts Program Manager at a level consistent
with other management classifications that direct a regulatory
program with statewide impact requiring skills and knowledge at the
highest level with responsibility for work of the most critical or
sensitive nature as it relates to the department's mission, including
protecting vulnerable elderly persons, supervising technical staff
with oversight of highly complex operations and responsibility for
policy and program evaluation and recommendations; full-time legal
counsel with a working knowledge of all laws relating to the
regulation of continuing care retirement communities and residential
care facilities for the elderly; financial analyst with working
knowledge of generally accepted accounting principles and auditing
standards; and other appropriate analytical and technical support
positions.
   (2) Contracts with technically qualified persons, to include but
not be limited to financial, actuarial, and marketing consultants, as
necessary to provide advice regarding the feasibility or viability
of continuing care retirement communities and providers.
   (3) Other program costs or costs directly supporting program
staff.
   (4) The department shall use no more than 5 percent of the fees
collected pursuant to this section for overhead costs, including
facilities operation, and indirect department and division costs.
   (c) If the balance in the Continuing Care Provider Fee Fund is
projected to exceed five hundred thousand dollars ($500,000) for the
next budget year, the department shall adjust the calculations for
the application fees under Section 1779.2 and annual fees under
Section 1791 to reduce the amounts collected.
   (d) The intent of the Legislature is to empower the program
administrator with the ability and authorization to obtain necessary
resources or staffing to carry out the program objectives.