SB0334

SENATE BILL 334

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Timothy Z. Jennings

AN ACT

RELATING TO DISABLED AND ELDERLY RESIDENTIAL SERVICES; REQUIRING THAT OWNERS OR OPERATORS OF ADULT RESIDENTIAL CARE FACILITIES PROVIDE THE SECRETARY OF HEALTH WITH CERTAIN DISCLOSURES AS A CONDITION OF LICENSING OR RENEWAL OF LICENSURE; PROVIDING FOR DENIAL OF ADULT RESIDENTIAL FACILITY LICENSURE FOR PRIOR CRIMINAL ACTS OR CIVIL VIOLATIONS BY OWNERS OR OPERATORS; REQUIRING SUPPORTIVE RESIDENCES TO BE CERTIFIED BY AND MAKE CERTAIN DISCLOSURES TO THE AGING AND LONG-TERM SERVICES DEPARTMENT; PROVIDING FOR DENIAL OF SUPPORTIVE RESIDENCE CERTIFICATION FOR PRIOR CRIMINAL ACTS OR CIVIL VIOLATIONS BY OWNERS OR OPERATORS.

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

SECTION 1. A new section of the Public Health Act is enacted to read:

"[NEW MATERIAL] ADULT RESIDENTIAL CARE FACILITIES--DISCLOSURES--BACKGROUND INVESTIGATIONS--CONDITION OF LICENSING.--

A. In addition to ensuring that an adult residential care facility meets the requirements of Section 24-1-5 NMSA 1978, the department shall license an adult residential care facility or renew its license only if the adult residential care facility provides the department with a current annual disclosure statement that includes the following information:

(1) the name and business address of the adult residential care facility;

(2) if the adult residential care facility is owned or operated by a partnership, corporation or association, the names, addresses and, at the facility's expense, criminal background checks of the owner or operator and any of its officers, directors, trustees, partners, managers and affiliates. The department shall deny a license to an adult residential care facility if the facility owner or operator or any of its officers, directors, trustees, partners, managers or affiliates, within ten years prior to the date of application:

(a) was convicted of a felony, a crime that if committed in New Mexico would be a felony or any crime having to do with the provision of long-term or adult residential facility care;

(b) has been held liable or enjoined in a civil action in any jurisdiction by final judgment, if the civil action involved fraud, embezzlement, fraudulent conversion or misappropriation of property; or

(c) had a state or federal license or permit to operate an adult residential care facility suspended or revoked or had any state or federal agency or industry regulatory agency commence an action against the adult residential care facility owner or operator or any of its officers, directors, trustees, partners, managers or affiliates and the result of such action;

(3) a credit history for the adult residential care facility owner or operator and, if it is a corporation, partnership or association, a credit history for each of its officers, directors, trustees, partners, managers and affiliates, and in the event that any of these persons has had a prior discharge in bankruptcy or was found insolvent in any court action, the adult residential care facility shall provide to the secretary of health proof that each of the persons responsible for conducting the affairs of the adult residential care facility is covered under an individual or blanket fidelity bond in the amount of one million dollars ($1,000,000) and that the bond has been filed with and approved by the insurance division of the public regulation commission;

(4) a statement as to whether the adult residential care facility owner or operator is, or is associated with another entity that is, responsible for the financial and contractual obligations of the adult residential care facility owner or operator, and the extent to which the associate entity is responsible;

(5) the location and description of any adult residential care facilities or other long-term services facilities that the adult residential care facility owner or operator, or an associated entity, operates or owns any interest;

(6) a statement as to the adult residential care facility owner or operator's liquid reserves, including a description of the adult residential care facility owner or operator's reserves to assure payment of debt obligations and an ongoing ability to provide services to residents;

(7) an audited financial statement and an audit report prepared in accordance with generally accepted accounting principles applied on a consistent basis and certified by a certified public accountant, including an income statement or statement of activities, a cash-flow statement or sources and application of funds statement and a balance sheet as of the end of the adult residential care facility's last fiscal year. The balance sheet should accurately reflect the deferred revenue balance, including entrance fees and any other prepaid services, and should include notes describing the adult residential care facility owner or operator's long-term obligations and identifying all the holders of mortgages and notes;

(8) if the adult residential care facility owner or operator is a corporation, a copy of the articles of incorporation; if the adult residential care facility owner or operator is a partnership or other unincorporated association, a copy of the partnership agreement, articles of association or other membership agreement; and if the adult residential care facility owner or operator is a trust, a copy of the trust agreement or instruments;

(9) resumes of the adult residential care facility owner or operator's officers, directors, trustees, partners or managers;

(10) a copy of the adult residential care facility's policies and procedures; and

(11) other data, financial statements and pertinent information with respect to the adult residential care facility, or its directors, trustees, members, managers, branches, subsidiaries or affiliates, that the secretary of health requests and that is reasonably necessary in order for the secretary to determine the financial status of the adult residential care facility and the management capabilities of the facility owner or operator, including the most recent audited financial statements of comparable adult residential care facilities owned, managed or developed by the adult residential care facility owner or operator.

B. The secretary may deny a license or renewal of a license after a finding based upon substantial evidence that an adult residential care facility's owner or operator, or if owned or operated by a partnership, corporation or association, an officer, a director, a trustee, a partner, a manager or an affiliate of that entity, has engaged in a pattern or practice of civil violations related to fraudulent acts or resident health, safety or quality of life.

C. As used in this section, "adult residential care facility" means:

(1) any adult care facility institution required to be licensed under state law as an adult residential care facility by the public health division of the department of health, whether proprietary or nonprofit, including skilled long-term care facilities; or

(2) a facility that is licensed by the department of health as an assisted living facility."

SECTION 2. [NEW MATERIAL] DISABLED AND ELDERLY RESIDENCES--DISCLOSURES--BACKGROUND INVESTIGATIONS--CERTIFICATION.--

A. The secretary of aging and long-term services shall promulgate rules in accordance with this section for the certification of supportive residences in the state and provide guidelines regarding the operation of supportive residences in a manner that provides quality living environments and greater protection from abuse, fraud and exploitation for residents of supportive residences. A supportive residence shall not operate in the state unless it receives certification from the aging and long-term services department and renews that certification annually. The aging and long-term services department may certify a supportive residence only if it provides the department with an annual disclosure statement that includes the information set forth in Subsection B of this section and the supportive residence is in compliance with this section and department rules for the safe operation of supportive residences. The department shall deny certification if the supportive residence's owner or operator or any of its officers, directors, trustees, partners, managers or affiliates, within ten years prior to the date of application:

(1) was convicted of a felony, a crime that if committed in New Mexico would be a felony or any crime having to do with the provision of care to disabled individuals or individuals over the age of fifty-five;

(2) has been held liable or enjoined in a civil action in any jurisdiction by final judgment, if the civil action involved fraud, embezzlement, fraudulent conversion or misappropriation of property; or

(3) had a state or federal license or permit to operate a business suspended or revoked or had any state, federal or industry self-regulatory agency commence an action against the supportive residence owner or operator or any of its officers, directors, trustees, partners, managers or affiliates and the result of such action.

B. To comply with annual disclosure statement requirements pursuant to Subsection A of this section, a supportive residence owner or operator shall submit to the aging and long-term services department:

(1) the name and business address of the supportive residence;

(2) if the supportive residence is owned or operated by a partnership, corporation or association, the names, addresses and, at the supportive residence's expense, criminal background checks of the owner or operator and any of its officers, directors, trustees, partners, managers and affiliates;

(3) a credit history for the supportive residence owner or operator and, if it is a corporation, partnership or association, a credit history for each of its officers, directors, trustees, partners, managers and affiliates, and in the event that any of these persons has had a prior discharge in bankruptcy or was found insolvent in any court action, the supportive residence shall provide to the secretary of aging and long-term services proof that each of the persons responsible for conducting the affairs of the supportive residence is covered under an individual or blanket fidelity bond in the amount of one million dollars ($1,000,000) and that the bond has been filed with and approved by the insurance division of the public regulation commission;

(4) a statement as to whether the supportive residence owner or operator is, or is associated with another entity that is, responsible for the financial and contractual obligations of the supportive residence owner or operator, and the extent to which the associate entity is responsible;

(5) the location and description of any supportive residences or other long-term services facilities that the supportive residence owner or operator, or an associated entity, operates or owns any interest;

(6) a statement as to the supportive residence owner or operator's liquid reserves, including a description of the supportive residence owner or operator's reserves to assure payment of debt obligations and an ongoing ability to provide services to residents;

(7) an audited financial statement and an audit report prepared in accordance with generally accepted accounting principles applied on a consistent basis and certified by a certified public accountant, including an income statement or statement of activities, a cash-flow statement or sources and application of funds statement and a balance sheet as of the end of the supportive residence's last fiscal year. The balance sheet should accurately reflect the deferred revenue balance, including entrance fees and any other prepaid services, and should include notes describing the supportive residence owner or operator's long-term obligations and identifying all the holders of mortgages and notes;

(8) if the supportive residence owner or operator is a corporation, a copy of the articles of incorporation; if the supportive residence owner or operator is a partnership or other unincorporated association, a copy of the partnership agreement, articles of association or other membership agreement; and if the supportive residence owner or operator is a trust, a copy of the trust agreement or instruments;

(9) resumes of the supportive residence owner or operator's officers, directors, trustees, partners or managers;

(10) a copy of the supportive residence's policies and procedures; and

(11) other data, financial statements and pertinent information with respect to the supportive residence, or its directors, trustees, members, managers, branches, subsidiaries or affiliates, that the secretary of aging and long-term services requests and that is reasonably necessary in order for the secretary to determine the financial status of the supportive residence and the management capabilities of the supportive residence owner or operator, including the most recent audited financial statements of comparable supportive residences owned, managed or developed by the supportive residence owner or operator.

C. A supportive residence owner or operator shall file a copy of the disclosure statement and any amendments to that statement with the aging and long-term services department for public inspection during regular working hours.

D. The secretary may deny a license or renewal of a license after a finding based upon substantial evidence that a supportive residence's owner or operator, or if owned or operated by a partnership, corporation or association, an officer, a director, a trustee, a partner, a manager or an affiliate of that entity, has engaged in a pattern or practice of civil violations related to fraudulent acts or resident health, safety or quality of life.

E. For the purposes of this section:

(1) "operator" means a person that carries out the daily administration, management and maintenance for the actual operation of an enhanced recovery project;

(2) "owner" means one or more persons, jointly or severally, in whom is vested:

(a) all or part of the legal title to property, but shall not include the limited partner in an association regulated under the Uniform Limited Partnership Act; or

(b) all or part of the beneficial ownership and a right to present use and enjoyment of the premises and agents thereof and includes a mortgagee in possession and the lessors, but shall not include a person or persons, jointly or severally, who as owner leases the entire premises to a lessee of vacant land for apartment use;

(3) "residence" means:

(a) an affordable housing development built to benefit individuals whose income is at or below eighty percent of the area median income; and who will pay no more than thirty percent of their gross monthly income for the housing;

(b) a complex of dwelling units regulated pursuant to the provisions of the Uniform Owner-Resident Relations Act;

(d) a development of condominiums or leasehold condominiums regulated pursuant to the provisions of the Condominium Act; and

(4) "supportive residence" means a residence that:

(a) operates as a residence exclusively for disabled individuals or individuals over the age of fifty-five;

(b) provides on-site attendant, medical, meal or housekeeping services pursuant to a lease or other agreement; and

(c) has twenty or more dwelling units; "supportive residence" does not include a residence regulated pursuant to the provisions of the Continuing Care Act or a residence operated by its resident owners.

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