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AN ACT

RELATING TO HEALTH AND SAFETY; LIMITING RECEIVERSHIP

LIABILITY; AMENDING THE HEALTH FACILITY RECEIVERSHIP ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 24-1E-5 NMSA 1978 (being Laws 1996,

Chapter 35, Section 8) is amended to read:

"24-1E-5. RECEIVER'S POWERS AND DUTIES.--

A. In addition to the receiver's powers and duties

under the Receivership Act, the secretary as receiver and any

deputy receiver under the Health Facility Receivership Act

shall, except as the district court may otherwise order:

(1) perform all acts that are necessary to:

(a) correct or remedy each condition on

which the receiver's appointment was based;

(b) ensure adequate care and necessary

services for each resident or other person in the health

facility;

with all applicable state and federal laws, rules and

regulations; and

(d) manage and operate the health

facility, including closing down, expanding or initiating new

operations, hiring and firing officers and employees,

contracting for necessary services, personnel, supplies,

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equipment, facilities and all other appropriate things,

purchasing, selling, marshaling and otherwise managing its

property and assets, paying the facility's obligations that

are directly related to the health facility's operations or

for providing adequate care and necessary services to

residents or for other persons in the health facility,

borrowing money and property and giving security for these

and expending funds of the facility;

(2) give notice of establishment of the

receivership to interested persons and publish notice in a

newspaper of general circulation in each county in which the

health care facility and any of its satellite facilities is

located;

(3) if a resident or other person in the

health facility is to be discharged or transferred, discuss

the options for alternative placement with the resident,

other person in the health facility or the guardian of that

resident or other person in the health facility, as

applicable, and arrange to transfer the records and personal

property of the resident or other person in the health

facility to the alternative placement facility; and

(4) with the court's approval, void any

lease, mortgage, secured transaction, contract or other

agreement made prior to the appointment of the receiver or

any transfer of money or property made within one year prior

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to the filing of the petition if such lease, mortgage,

secured transaction, contract, agreement or other transfer of

money or property was made without fair consideration,

including excessive interest rate, was made with actual

intent to hinder, delay or defraud either future or existing

creditors, was made with shareholders or owners of the health

facility or persons otherwise having an interest in the

health facility or was unrelated to the normal and expected

maintenance and operation of the health facility.

B. If, in the exercise of the receiver's powers

pursuant to this section, the receiver is in possession of

real estate, real or personal property or other goods or

services subject to a lease, mortgage, secured transaction,

contract or other agreement subject to being voided by the

receiver pursuant to Paragraph (4) of Subsection A of this

section, and such real estate, real or personal property or

other goods or services are necessary for the continued

operation of the health facility during the receivership, the

receiver may, in lieu or seeking to void such lease,

mortgage, secured transaction, contract or other agreement,

apply to the court to set a reasonable price, rate or rate of

interest to be paid by the receiver under such lease,

mortgage, secured transaction, contract or other agreement

during the duration of the receivership. The receiver shall

send notice of such an application to any known parties of

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the property, services or goods involved and shall publish

the notice once at least thirty days prior to the hearing

date in a newspaper of general circulation, and the court

shall hold a hearing on the receiver's application within

thirty days after the filing of the application by the

receiver. Payment by the receiver of the amount determined

by the court to be reasonable is a defense to any action

against the receiver for payment or possession of the real

estate, real or personal property or other goods or services,

or to revocation of such services subject to the lease,

mortgage, secured transaction, contract or other agreement.

Payment by the receiver of the amount determined by the court

to be reasonable shall not relieve the health facility from

any liability upon termination of the receivership for the

difference between the amount paid by the receiver and the

amount due under the original lease, mortgage, secured

transaction, contract or other agreement.

C. Nonpayment by the receiver of any debt of the

health facility under a lease, mortgage, secured transaction,

contract or other agreement reasonably deemed by the receiver

not to be directly related to the health facility's

operations or for providing adequate care and necessary

services to residents or other persons in the health facility

shall not subject the receiver to liability for payment.

Nonpayment of any lease, mortgage, secured transaction,

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contract or other agreement reasonably deemed by the receiver

not to be directly related to the health facility's

operations or for providing adequate care and necessary

services to residents or other persons in the health facility

shall not relieve the health facility from any liability upon

termination of the receivership for payment of the full

amount due under the lease, mortgage, secured transaction,

contract or other agreement.

D. A deputy receiver shall have the same powers

and duties as the receiver, unless the court orders

otherwise."