ARIZONA HOUSE OF REPRESENTATIVES Fifty-seventh Legislature First Regular Session
	House: COM DP 8-2-0-0 | 3^rd Read 47-13-0-0 Senate: FIN DPA 5-2-0-0 | 3^rd Read 26-0-4-0 Final Pass: 50-5-5-0 | Chapter: 215

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HB 2370: entrance fee; refunds; time frame

Sponsor: Representative Gress, LD 4

Signed by the Governor

Overview

Provides requirements for assigning a vacated unit a sequential refund number for refunding entrance fees.

History

A life care contract is a contractual agreement between a provider and a person (contract holder) to provide for nursing services, medical services or health-related services, in addition to board and lodging for the person in a facility or services in the person's private residence with the right to future access to services, board and lodging in a facility, and is conditioned on the transfer of an entrance fee to the provider for such services. Life care contracts may only be offered by persons who are issued a permit as a provider by the Department of Insurance and Financial Institution (DIFI).

As a condition for issuing the permit, DIFI requires the provider to maintain on a current basis and in escrow an amount equal to the aggregate principal and interest payments due during the next twelve months on account of any first mortgage or other long-term financing of the facility. Additionally, the provider must establish an escrow account and place any entrance fee in escrow prior to occupancy in the facility or providing services. Statute outlines the conditions for releasing entrance fee monies to the provider.

An entrance fee that is held in escrow may be returned to the person who had made payment to the provider at any time by the escrow agent on receipt of notice from the provider that such person is entitled to a refund of the entrance fee. (Title 20, Chapter 8, A.R.S.)

Provisions

1. Requires, within sixty days after a facility receives a resident's notice to vacate, the facility to assign the vacated unit a sequential refund number among the available units with refundable entrance fees and provide refunds in order based on the sequential refund number. (Sec. 1)

2. Specifies the requirement to assign a vacated unit a sequential refund number does not apply to a life care contract that:

a) is executed before January 1, 2026; or

b) provides for the payment of a refundable portion of the entrance fee, with a maximum waiting period which may not exceed three years from when the resident vacates the unit. (Sec. 1)

3. Requires a facility to pay the required entrance fee refund to the resident or other specified individuals if:

a) the refund is owed pursuant to the contract between the facility and the resident;

b) the resident's residential unit is next in line based on the sequential numbering system to receive a refund; and

c) sufficient monies are available from new resident entrance fees to provide the full amount of the refund. (Sec. 1)

4. Applies the sequential refund requirement provisions to life care contracts entered into beginning January 1, 2026. (Sec. 2)

5. Contains a delayed effective date of January 1, 2026. (Sec. 2)

6. Makes technical changes. (Sec. 1)

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10.                   HB 2370

11. Initials PB           Page 0 Signed by the Governor

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