75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 1912
 
                         Senate Bill 393
 
Sponsored by Senator MORRISETTE
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Requires residential care facilities to maintain specified
liquid reserve funds.
 
                        A BILL FOR AN ACT
Relating to the financial solvency of residential care
  facilities; and appropriating money.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2009 Act is added to and made
a part of ORS 443.400 to 443.455. + }
  SECTION 2.  { + (1) A residential care facility shall establish
and maintain at all times in an insured institution, as that term
is defined in ORS 706.008:
  (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 residential care facility, taking into
consideration any anticipated refinancing; and
  (b) An operating liquid reserve in an amount equal to or
exceeding the total of the facility's projected operating
expenses for three months. For the purpose of calculating the
amount required for the operating liquid reserve, projected
operating expenses include any anticipated expenses associated
with operating the facility and providing health and social
services to all residents.
  (2) The Department of Human Services may require a facility to
place the reserves with an escrow agent licensed under ORS
chapter 696.
  (3) The department may allow a facility to withdraw or borrow
from the reserves an amount of moneys that does not exceed 20
percent of the facility's total required reserves. The department
may approve a withdrawal or borrowing only for the use of the
facility and not for the benefit of a parent company or
subsidiary of the facility. The department may approve a
withdrawal or borrowing from reserves:
  (a) If required for the facility to make an emergency repair or
replacement of buildings, grounds or equipment;
  (b) To cover a catastrophic loss that is not covered by
insurance; or
  (c) For debt service in a potential default situation.
 
 
  (4) Within 18 months, the facility must repay to the reserve
accounts all funds borrowed, in accordance with a payment plan
and at a rate of interest approved by the department.
  (5) The department shall conduct a random audit of all
residential care facilities licensed in this state at a frequency
and in a manner prescribed by the department by rule, to verify
compliance with the requirements of this section. The department
by rule shall prescribe record keeping requirements for
facilities that will enable the department to carry out audits
under this subsection. The department shall compile and maintain
for public inspection an annual report of the audits conducted
under this subsection.
  (6) The department may impose a surcharge on residential care
facility licensing fees required under ORS 443.415 to defray the
costs incurred in conducting audits under subsection (5) of this
section and other expenses incurred in enforcing this section.
Any surcharges collected by the department are continuously
appropriated to the department to carry out the requirements of
this section. + }
  SECTION 3.  { + Section 2 of this 2009 Act applies to
applications for licenses or for renewals of licenses of
residential care facilities that are submitted to the Department
of Human Services on or after the effective date of this 2009
Act. + }
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