Current Status Bill Number:3191 Ratification Number:31 Act Number:19 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19950110 Primary Sponsor:P. Harris All Sponsors:P. Harris, Neilson, Waldrop, J. Brown, Inabinett, Rhoad and Shissias Drafted Document Number:PFM\7020AC.95 Companion Bill Number:347 Date Bill Passed both Bodies:19950323 Governor's Action:S Date of Governor's Action:19950404 Subject:Continuing care retirement community
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
------ 19950404 Act No. A19
------ 19950404 Signed by Governor
------ 19950330 Ratified R31
Senate 19950323 Read third time, enrolled for
ratification
Senate 19950315 Read second time
Senate 19950309 Committee report: Favorable 02 SBI
Senate 19950209 Introduced, read first time, 02 SBI
referred to Committee
House 19950208 Read third time, sent to Senate
House 19950207 Read second time
House 19950201 Committee report: Favorable 26 HLCI
House 19950110 Introduced, read first time, 26 HLCI
referred to Committee
View additional legislative information at the LPITS web site.
(A19, R31, H3191)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 37-11-95 SO AS TO REQUIRE AN OPERATOR OF A CONTINUING CARE RETIREMENT COMMUNITY TO OBTAIN APPROVAL FROM THE DEPARTMENT OF CONSUMER AFFAIRS TO DISTRIBUTE A DIVIDEND OR SIMILAR DISTRIBUTION; BY ADDING SECTION 37-11-105 SO AS TO REQUIRE AN OPERATOR OF A CONTINUING CARE RETIREMENT COMMUNITY TO SUBMIT A FINANCIAL PLAN TO THE DEPARTMENT FOR APPROVAL IF THE DEPARTMENT HAS REASON TO BELIEVE THE OPERATOR IS OR MAY BECOME INSOLVENT; BY ADDING SECTION 37-11-135 SO AS TO EXEMPT FROM CERTAIN LICENSING REQUIREMENTS A CONTINUING CARE RETIREMENT COMMUNITY WHICH DOES NOT REQUIRE PAYMENT OF AN ENTRANCE FEE; BY AMENDING SECTION 37-11-30, RELATING TO LICENSING OF CONTINUING CARE RETIREMENT COMMUNITIES, SO AS TO REVISE INFORMATION THAT MUST ACCOMPANY LICENSE APPLICATIONS; AND BY AMENDING SECTION 37-11-40, RELATING TO THE DETERMINATION OF FINANCIAL RESPONSIBILITY OF AN APPLICANT FOR LICENSURE, SO AS TO REVISE CONDITIONS UNDER WHICH A BOND OR OTHER GUARANTEE IS REQUIRED.
Be it enacted by the General Assembly of the State of South Carolina:
Approval needed to distribute dividend
SECTION 1. Chapter 11, Title 37 of the 1976 Code is amended by adding:
"Section 37-11-95. (A) An operator shall obtain approval from the department before declaring or distributing a dividend or similar distribution which generates a retained deficit or increases an existing retained deficit.
(B) The department's approval required under subsection (A) must be given within thirty days from the date of the request unless the department determines in writing that the distribution is not reasonable in relation to the operator's or facility's outstanding liabilities or would otherwise affect the financial soundness of the operator or the facility."
Financial plan may be required if financial condition is unsound
SECTION 2. Chapter 11, Title 37 of the 1976 Code is amended by adding:
"Section 37-11-105. (A) At any time when the department has reason to believe that the operator is insolvent, is in imminent danger of becoming insolvent, is in a financially unsound or unsafe condition, or that a continuing care retirement community's financial condition is such that it may otherwise be unable to fully perform its obligations pursuant to continuing care contracts, the department in addition to other remedies may require the operator to submit for approval within sixty days a financial plan detailing the method by which the operator proposes to overcome the deficiencies noted by the department. The department shall approve or disapprove the plan within thirty days of the receipt.
(B) If the plan is approved, the operator immediately shall implement the plan.
(C) If the plan is disapproved or if at any time after approval the department determines that the plan is not being fully implemented, the department may require the operator to obtain new or additional management capability to solve its difficulties. The department must give the reorganized management a reasonable period of time, as determined by the department, to develop a plan which, subject to the approval of the department, will reasonably assure that the operator will meet its responsibilities under the law. The deadlines for action described in this subsection may be extended upon mutual agreement of the operator and the department.
(D) Failure to implement the plan may result in suspension or revocation of a license."
Exemptions
SECTION 3. Chapter 11, Title 37 of the 1976 Code is amended by adding:
"Section 37-11-135. A continuing care retirement community which does not require payment of an entrance fee is exempt from the requirements of Sections 37-11-30(B)(9), 37-11-40, and 37-11-50(2)."
Application requirements
SECTION 4. Section 37-11-30(B)(9) and (10) of the 1976 Code, as added by Act 97 of 1989, is amended to read:
"(9) certified financial statements of the operator, including a balance sheet as of the end of the most recent fiscal year and income statements for the three most recent fiscal years of the operator or for all of the years in existence if less than three years. If the operator's fiscal year ended more than one hundred twenty days before the date the application for a license is filed, interim financial statements as of a date not more than ninety days before the date of filing the application must be included but need not be certified;
(10) if the continuing care contract provides for services for the life of the person or for more than one year including mutually terminable contracts, a summary of a report of an actuary, updated every two years, that estimates the capacity of the operator to meet its contractual obligation to the residents;"
Financial responsibility considerations
SECTION 5. Section 37-11-40(3) of the 1976 Code, as added by Act 97 of 1989, is amended to read:
"(3) if the continuing care contract provides for services for the life of the person or for more than one year including mutually terminable contracts, a surety bond, financial reserves, letter of credit, or other financial arrangement to guarantee the performance of contractual obligations;"
Time effective
SECTION 6. This act takes effect upon approval by the Governor.
Approved the 4th day of April, 1995.