2007 Oregon Code - Chapter 101 :: Chapter 101 - Continuing Care Retirement Communities
Chapter 101 —
Continuing Care Retirement Communities
2007 EDITION
CONTINUING CARE RETIREMENT COMMUNITIES
PROPERTY RIGHTS AND TRANSACTIONS
101.010Â Â Â Â Policy
101.020Â Â Â Â Definitions
101.030Â Â Â Â Registration
of continuing care retirement community providers
101.040Â Â Â Â Registration
fees
101.050Â Â Â Â Preparation
of disclosure statement by provider; notice and review of statement by
prospective residents; contents of statement
101.055Â Â Â Â Required
meetings with residents; notice of changes in fees or services
101.060Â Â Â Â Provider
to maintain financial reserves; amount; escrow account; withdrawal from
reserves
101.065Â Â Â Â Provider
liquidation; resident claims preferred
101.070Â Â Â Â Escrow
account required for registration of new continuing care retirement community;
entrance fees in escrow; use of escrow funds
101.080Â Â Â Â When
resident eligible for refund of entrance fee; notice to resident
101.090Â Â Â Â Exemption
of certain facilities from certificate of need review; exception
101.100Â Â Â Â Transfer
of registration
101.110Â Â Â Â Revocation
of registration; findings
101.120Â Â Â Â Power
of department to prevent violations; cease and desist order; injunction
101.130Â Â Â Â Annual
disclosure statement; contents
101.140Â Â Â Â Advisory
council; membership; compensation; duties
101.150Â Â Â Â Duties
of Department of Human Services; rules
101.160Â Â Â Â Short
title
     101.010
Policy. The Legislative
Assembly finds that continuing care retirement communities are an important and
necessary alternative for the long term residential, social and health
maintenance needs for many of
     101.020
Definitions. As used in this
chapter:
     (1) “Application fee” means a fee charged
to an individual or individuals, prior to execution of a residency agreement,
apart from an entrance fee.
     (2) “Audited financial statement” means a
providerÂ’s financial statement that has been prepared in accordance with
generally accepted accounting principles and that has been audited by an
independent certified public accountant in accordance with generally accepted
auditing standards and includes notes to the financial statement that state
whether or not the community is in compliance with its reserve requirements.
     (3) “Closed system long term care facility”
means a long term care facility in a continuing care retirement community that
is used exclusively by the continuing care retirement communityÂ’s residents.
     (4) “Continuing care” means directly
furnishing or indirectly making available, upon payment of an entrance fee and
under a residency agreement, housing and health related services, including
nursing or assistance with activities of daily living, for a period greater
than one year to an individual not related by blood or marriage to the
continuing care retirement community provider that is furnishing care, whether
provided in the community or in another setting designated by the residency
agreement.
     (5) “Continuing care retirement community”
or “community” means any provider that agrees to furnish continuing care to a
resident under a residency agreement.
     (6) “Department” means the Department of
Human Services.
     (7) “Entrance fee” means an initial or
deferred transfer to a provider of a sum of money or other property made or
promised to be made as full or partial consideration for acceptance of one or
more residents in a community. A fee that is less than the sum of the regular
periodic charges for one year of residency is not an entrance fee.
     (8) “Living unit” means a room, apartment,
cottage or other area set aside for the exclusive use of the resident.
     (9) “Manager” means a person, corporation,
partnership, association or other legal entity that enters into a contractual
arrangement with the provider to manage the continuing care retirement
community. However, “manager” does not include individuals employed by the
provider or corporations affiliated with the provider or other legal entities
within the providerÂ’s supervision or control.
     (10) “New continuing care retirement
community” or “new community” means a community established by a provider on or
after January 1, 1990. “New community” does not mean the remodeling or
expansion of an existing continuing care retirement communityÂ’s facility on the
same or an adjacent site.
     (11) “Omit a material fact” means the
failure to state a material fact required to be stated in any disclosure
statement or registration.
     (12) “Provider” means an owner or
operator, whether a natural person, partnership, trust, limited liability
company, corporation or unincorporated association, however organized, of a new
or existing continuing care retirement community, whether operated for profit
or not, that provides, plans to provide or agrees to provide continuing care
for an entrance fee.
     (13) “Residency agreement” means the
contract or contracts between a provider and a resident for the provision of
continuing care.
     (14) “Resident” means a person who enters
into a residency agreement with a provider or who is designated in a residency
agreement to be a person being provided with continuing care in a community.
     (15) “Solicit” means all actions of a
provider in seeking to have individuals pay an application fee or enter into a
residency agreement by any means including, without limitation, personal,
telephone, mail or any media distributed or communicated by any means. [1989
c.693 §3; 1997 c.633 §4]
     101.030
Registration of continuing care retirement community providers. (1) A provider shall register with the
Department of Human Services before the provider:
     (a) Enters into a residency agreement with
a nonresident;
     (b) Extends the terms of a resident’s
existing residency agreement; or
     (c) Solicits either a resident or
nonresident to pay an application fee or execute a residency agreement.
     (2) The provider shall apply for
registration with the department on forms prescribed by the department. The
application shall include a disclosure statement as described in ORS 101.050.
     (3) Within 10 business days after receipt
of the application for registration from a new continuing care retirement
community, the department shall issue a notice of filing to the provider
applicant. Within 60 days of the notice of filing, the department shall enter
an order registering the provider or rejecting the registration. If no order of
rejection is entered within 60 days from the date of notice of filing, the
provider shall be considered registered unless the provider has consented in
writing to an extension of time. If no order of rejection is entered within the
time period as so extended, the provider shall be considered registered.
     (4) If the department determines that the
requirements of ORS 101.050, 101.090 and 101.130 have been met, it shall enter
an order registering the provider. If the department determines that any of the
requirements of ORS 101.050 and 101.130 have not been met, the department shall
notify the applicant that the application for registration must be corrected
within 30 days in such particulars as are designated by the department. If the
requirements are not met within the time allowed, the department may enter an
order rejecting the registration. The order shall include the findings of fact
upon which the order is based and which shall not become effective until 20
days after the end of the foregoing 30-day period. During the 20-day period,
the applicant may petition for reconsideration and shall be entitled to a
hearing. An order of rejection shall not take effect, in any event, until such
time as the hearing, once requested, has been given to the applicant and a
decision is rendered by the administrative law judge that sustains the
department’s decision to reject the registration. [1989 c.693 §7; 1991 c.67 §19;
2003 c.75 §82; 2005 c.22 §79]
     101.040
Registration fees. The
initial application for registration shall be accompanied by a fee of $500.
After the initial registration, the subsequent annual fee shall be $250 per
facility. [1989 c.693 §18]
     101.050
Preparation of disclosure statement by provider; notice and review of statement
by prospective residents; contents of statement. (1) After entry of an order registering the
provider and before the provider enters into any residency agreement with or on
behalf of the prospective resident, the provider shall notify prospective
residents of their right to review the initial disclosure statement and shall
make copies of the statement available upon request. The initial disclosure
statement shall be available during regular business hours in the business
office of the continuing care retirement community. The text of the initial
disclosure statement shall contain the following information:
     (a) The names of the individual or
individuals who constitute the provider or, if the provider is a partnership,
limited liability company, corporation or other legal entity, whether for
profit or not for profit, the names of the officers, directors, trustees or
managing general partners of the provider and a description of each such
individualÂ’s duties on behalf of the provider.
     (b) The business address of the provider
and a statement of whether the provider is an individual, partnership, limited
liability company, corporation or other legal entity.
     (c) With respect to a provider that is
operated for profit, the names and business addresses of any individual having
any more than a 10 percent ownership or beneficial interest in the provider and
a description of such individualÂ’s interest in or occupation with the provider.
     (d)(A) A statement as to whether the
provider is or is not affiliated with any other organization of any kind, the
extent of the affiliation, if any, and the extent to which any of the affiliate
organizations are responsible for the financial and contractual obligations of
the provider; and
     (B) The provision of the Internal Revenue
Code, if any, under which the provider or any of the providerÂ’s affiliates is
exempt from the payment of federal income taxes.
     (e) The location and general description
of the continuing care retirement community and any other care facilities, both
existing and proposed, owned or operated by the provider. The provider must
disclose the following about any proposed continuing care retirement community
or other care facilities:
     (A) The estimated completion date or
dates;
     (B) A statement as to whether or not
construction has begun; and
     (C) Any contingencies subject to which
construction may be deferred.
     (f) A description of services provided or
proposed to be furnished by the provider under its residency agreements
including, without limitation, the extent to which medical care or assisted
living is furnished, the services made available by the continuing care
retirement community at an extra charge over and above the entrance fee and
periodic charges provided for in the residency agreement.
     (g) A description of all fees required of
each resident, including the entrance fee, periodic charges and the manner in
which any additional fees or periodic charges will be determined. The
description shall include:
     (A) The circumstances under which the
resident will be permitted to remain in the continuing care retirement
community in the event the resident is unable to pay periodic or other charges;
     (B) The terms and conditions under which
the residency agreement may be canceled by the provider or the resident or in
the event of the death of the resident prior to or following occupancy of the
living unit;
     (C) The percentage of the entrance fee
refund required by ORS 101.080 and the manner in which this percentage is
calculated;
     (D) The conditions under which a living
unit occupied by a resident may be made available by the provider to another
resident other than on the death of the resident executing the residency
agreement;
     (E) The manner by which the provider may
adjust periodic charges or other recurring fees; and
     (F) A statement of the fees to be charged
if the resident marries or divorces while at the designated continuing care
retirement community, the terms concerning the entry or departure of a spouse
to the community and the consequences if a new spouse does not meet the
requirements for entry.
     (h) The provider’s most recent audited
financial statement prepared in accordance with generally accepted accounting
principles by a certified public accountant. This audited financial statement
shall not have been prepared more than 16 months prior to the date of the
initial application for registration.
     (i) A copy of the residency agreement or
agreements offered to the prospective resident by the provider.
     (j) A statement on the cover page in a
prominent location and typeface that registration of the continuing care
retirement community does not constitute approval, recommendation or
indorsement of the community by the Department of Human Services, and that such
registration does not evidence the accuracy or completeness of the information
set forth in the disclosure statement.
     (k) Copies of the primary written brochures
and written promotional materials furnished to prospective residents.
     (2) Any person named in subsection (1)(a)
or (c) of this section and any proposed or existing manager must disclose:
     (a) Business experience in operation or
management of the continuing care retirement community or other facilities;
     (b) Whether the person or manager has been
convicted of a crime;
     (c) Whether the person or manager has been
a party to any civil action in which a judgment for damages was obtained or in
which an injunction was issued against the person or proposed manager for
fraud, embezzlement, fraudulent conversion or misappropriation of property;
     (d) Whether the person or manager has had
any state or federal permits or licenses suspended or revoked in connection
with the person or proposed managerÂ’s business activities; and
     (e) The identity of any business or
professional service entity in which the person or proposed manager has a 10
percent or greater ownership interest and which the provider intends to employ
to provide goods, services or any other things of value.
     (3) In the event subsection (2)(e) of this
section applies, the person or manager must disclose the anticipated costs to
the provider or a statement that such costs cannot presently be estimated.
     (4) In addition to complying with all the
provisions of this section, the provider must submit on behalf of a new
continuing care retirement community a statement of the anticipated source and
application of funds used or to be used in the purchase or construction of the
community, including:
     (a) An estimate of the cost of purchasing
or constructing and equipping the community which the provider expects to incur
or become obligated for prior to the commencement of the operation of the
community;
     (b) A description of any mortgage loan or
other long term financing intended to be used for the financing of the
community;
     (c) An estimate of the total entrance fees
to be received from the residents at or prior to the commencement of operation
of the continuing care retirement community based on projected occupancy at the
time the community commences operation; and
     (d) An estimate of the funds, if any,
anticipated to be necessary to pay for start-up losses. [1989 c.693 §8; 1997
c.633 §5]
     101.055
Required meetings with residents; notice of changes in fees or services. (1) The governing body or a designated
representative of the provider shall hold meetings with the residents of the
continuing care retirement community at least twice a year for the purpose of free
discussion of subjects that may include, but are not limited to, facility
income, expenditures, financial trends, resident concerns and proposed changes
in policy, programs and services. The meetings shall be open to a designated
personal representative of a resident. The provider shall report the dates of
the meetings in the annual disclosure statement to the Department of Human
Services.
     (2) The provider shall give residents
notice of proposed changes in fees or services and allow residents a reasonable
opportunity to comment on the proposed changes before they become effective. [1997
c.633 §2]
     101.060
Provider to maintain financial reserves; amount; escrow account; withdrawal
from reserves. (1) A
provider shall establish and maintain at all times:
     (a) A debt service liquid reserve in an
amount equal to or exceeding the total of all principal and interest payments
due during the next 12 months on account of a mortgage loan or other long term
financing of the continuing care retirement community taking into consideration
any anticipated refinancing; and
     (b) An operating liquid reserve in an
amount equal to or exceeding the total of the communityÂ’s projected operating
expenses for three months.
     (2) The Department of Human Services may
require a provider not meeting its reserve requirements to place the reserves
in an escrow account.
     (3) The notes to the provider’s annual
audited financial statements shall state whether or not the reserve
requirements have been met.
     (4) The department may allow withdrawal or
borrowing from the reserves in an amount not greater than 20 percent of the
providerÂ’s total reserves. The withdrawal or borrowing can be approved by the
department only if required for making an emergency repair or replacement of
equipment, to cover catastrophic loss that is not able to be covered by
insurance or for debt service in a potential default situation. No withdrawal
or borrowing may be made from a reserve without the approval of the department.
All funds borrowed shall be repaid to the reserve within 18 months in
accordance with a payment plan approved by the department. [1989 c.693 §12;
1997 c.633 §6; 2003 c.14 §40]
     101.065
Provider liquidation; resident claims preferred. If the provider is liquidated, the claims of
residents arising under residency agreements shall be preferred claims having
priority over other unperfected claims against provider assets. [1997 c.633 §3]
     101.070
Escrow account required for registration of new continuing care retirement
community; entrance fees in escrow; use of escrow funds. (1) As a condition of registration for a new
community, the Department of Human Services shall require that the provider
establish an escrow account with a bank, trust company or other escrow agent
and that any entrance fees received by the provider prior to the date the
resident is permitted to occupy the living unit in the community be placed in
the escrow account.
     (2) These funds shall be released by the
department at such time the department is satisfied that:
     (a) The provider has collected no less
than 10 percent of each individual residentÂ’s entrance fee for no less than 50
percent of the total number of units;
     (b) Anticipated proceeds of any first
mortgage loan or other long term financing commitment plus funds from other
sources in the actual possession of the provider are equal to not less than:
     (A) Fifty percent of the aggregate cost of
constructing or purchasing and equipping and furnishing the community; and
     (B) Fifty percent of the funds, which the
provider estimated in its disclosure pursuant to ORS 101.050, to fund start-up
losses of the community; and
     (c) A commitment has been received by the
provider for any permanent mortgage loan or other long term financing
commitment, which commitment the provider disclosed pursuant to ORS 101.050,
and any conditions of this commitment prior to disbursement of funds
thereunder, other than completion of the construction or closing of the
purchase of the community, have been substantially satisfied.
     (3) In the event a prospective resident
withdraws from the residency agreement prior to occupancy, the entrance fee
described in ORS 101.080 shall not be refunded to the prospective resident
until such time as the prospective residentÂ’s unit has been resold.
     (4) If the entrance fees in an escrow
account are not released within 36 months after the escrow account is opened,
entrance fees paid, less the escrow fee, shall be returned to the residents
unless an extension is granted by the department.
     (5) Nothing in this section requires the
escrow of any nonrefundable application fee charged to prospective residents.
     (6) An entrance fee held in escrow may be
returned by the escrow agent, at any time, to the person or persons who paid
the fee to the provider upon receipt by the escrow agent of notice from the
provider that such person is entitled to a refund of the entrance fee. [1989
c.693 §13]
     101.080
When resident eligible for refund of entrance fee; notice to resident. (1) Any provider that requires any resident,
as a condition of occupancy or use of the facility, to pay an entrance fee,
prior to or during the first six months of occupancy in addition to monthly
payments, shall provide that a percentage of that entrance fee be refunded to
the resident if the residency agreement is terminated, other than by reason of
death of the resident, within the first six months of occupancy.
     (2) The percentage of the entrance fee to
be refunded and the manner in which this percentage is calculated shall be
written in boldfaced type in the residency agreement and disclosed in the
initial disclosure statement required by ORS 101.050. [Formerly 91.690]
     101.090
Exemption of certain facilities from certificate of need review; exception. A closed system long term care facility
shall be subject to the same requirements as all other long term care
facilities, as defined by ORS 442.015, except that it shall be exempt from the
certificate of need process provided by ORS 442.315. However, any closed system
long term care facility which initiates under this exemption any new
institutional health services, as defined in ORS 442.015, and which
subsequently accepts patients who are not residents of the continuing care
retirement community, shall become subject to certificate of need review for
such new institutional health services at the time that nonresident patients
begin to be admitted. [1989 c.693 §10; 1991 c.67 §20]
     101.100
Transfer of registration. No
provider registration shall be transferred. A registered provider, who wishes
to sell or transfer ownership of the continuing care retirement community to
another party, shall first obtain approval from the Department of Human
Services. [1989 c.693 §14]
     101.110
Revocation of registration; findings. (1) The registration of a provider shall remain in effect until
revoked, after notice and hearing, upon written findings of fact by the
Department of Human Services that the provider has:
     (a) Willfully violated any provision of
this chapter or any rule or order adopted under this chapter;
     (b) Failed to file an annual disclosure
statement required by ORS 101.130;
     (c) Failed to make available to
prospective and current residents the disclosure statements required by ORS
101.050 and 101.130;
     (d) Delivered to prospective residents a
disclosure statement as provided by ORS 101.050 and 101.130 that makes an
untrue statement of material fact or omits a material fact and the provider, at
the time of the delivery of the disclosure statement, had actual knowledge of
the misstatement or omission; or
     (e) Failed to comply with the terms of a
cease and desist order described in ORS 101.120.
     (2) Findings of fact in support of
revocation, if set forth in statutory language, shall be accompanied by a
concise and explicit statement of the underlying facts supporting the findings.
     (3) If the department finds, after notice
and hearing, that the provider has been guilty of a violation for which
revocation could be ordered, it may first issue a cease and desist order. If
the cease and desist order is or cannot be effective in remedying the
violation, the department may, after notice and hearing, order that the
registration be revoked. [1989 c.693 §15]
     101.120
Power of department to prevent violations; cease and desist order; injunction. (1) If the Department of Human Services determines,
after notice and hearing, that any person has violated or is about to violate
any provision of this chapter or any rule or order issued under this chapter,
the department may issue an order requiring the person to cease and desist from
the unlawful practice or to take such affirmative action as in the judgment of
the department carries out the purposes of this chapter.
     (2) If the department makes a finding of
fact in writing that the public interest will be irreparably harmed by delay in
issuing a cease and desist order, it may issue a temporary cease and desist
order that shall include in its terms a provision that, upon request, a hearing
shall be held within 10 days of such a request to determine whether or not the
permanent cease and desist order shall be entered on the person. The temporary
cease and desist order shall be served on the person by certified mail.
     (3) If it appears that a person has
engaged, or is about to engage, in an act or practice constituting a violation
of any provision of this chapter or of a rule or order under this chapter, the
department, with or without prior administrative proceedings, may bring an
action in the circuit court to enjoin the acts or practices or to enforce
compliance with this chapter or any rule or order under this chapter. Upon
proper showing, injunctive relief or temporary restraining orders shall be
granted. The department shall not be required to post a bond in any court
proceeding. [1989 c.693 §16]
     101.130
Annual disclosure statement; contents. (1) The provider shall file annually with the Department of Human
Services an annual disclosure statement for the end of the providerÂ’s fiscal
year. The statement shall be filed within four months following the end of the
providerÂ’s fiscal year unless the time is extended by the department.
     (2) The annual disclosure statement shall
consist of an audited financial statement prepared in accordance with generally
accepted accounting principles for the preceding fiscal year and shall disclose
any change in ownership or manager. [1989 c.693 §9]
     101.140
Advisory council; membership; compensation; duties. (1) The Continuing Care Retirement Community
Advisory Council is created and shall consist of nine members appointed by the
Director of Human Services or a designee and shall represent the geographic
location of providers in this state. A member must be a resident of this state.
Three members must represent providers that are registered pursuant to ORS
101.030 and must have been actively engaged in the offering of residency
agreements in this state for five years before appointment. The remaining
members shall include:
     (a) A representative of the business
community with expertise in the area of management;
     (b) A certified public accountant;
     (c) An attorney; and
     (d) Three
     (2) The term of office for a member shall
be three years or until a successor has been appointed and qualified.
     (3) The members of the advisory council
shall serve without pay. They shall be reimbursed by the Department of Human
Services for their actual and necessary traveling expenses incurred while on
official business.
     (4) The council shall:
     (a) Elect a chairperson from among their
number and elect or appoint a secretary, both of whom shall hold office for one
year and thereafter until a successor is qualified and elected;
     (b) Hold an annual meeting and hold other
meetings at times and places the department or the chairperson of the council
may direct;
     (c) Keep a record of its proceedings. The
record is prima facie evidence of all matters reported and shall be open to
inspection at all times;
     (d) Act in an advisory capacity to the
department; and
     (e) Make recommendations to the department
on all proposed rules pertaining to this chapter. [1989 c.693 §5; 1993 c.18 §21;
1997 c.633 §7; 2001 c.900 §13]
     101.150
Duties of Department of Human Services; rules. (1) The Department of Human Services shall
implement the provisions of this chapter.
     (2) The department shall adopt such rules
as are reasonably necessary for the enforcement of this chapter. The department
shall submit any proposed rules to the advisory council prior to proceeding
with the notice procedures provided for in ORS 183.335. The department shall
consider the comments of the advisory council which pertain to a proposed rule
before the department adopts the rule. [1989 c.693 §§4,17]
     101.160
Short title. This chapter
may be cited as the Continuing Care Retirement Community Provider Registration
Act. [1989 c.693 §1]
_______________
CHAPTERS 102 TO 104
[Reserved for expansion]
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