(a) (1) A provider that holds a certificate of registration may not sell,
transfer, or otherwise dispose of assets in any 12-month period in
excess of 10% of its total assets based on its latest certified
financial statements that are available at the time the sale, transfer,
or other disposition is made, unless the provider obtains the approval
of the Department for the sale, transfer, or other disposition in
accordance with this section.
(2) With respect to transfers that are equal to or less than 10% of its
total assets based on the latest certified financial statements that
are available at the time the sale, transfer, or other disposition is
made, a provider may not sell, transfer, or otherwise dispose of any of
its assets if the sale, transfer, or other disposition is likely,
according to standards set forth in regulation, to:
(i) Have an unreasonably adverse impact on the financial stability of the
provider; or
(ii) Have an unreasonably adverse effect on the provider's capacity to
perform its obligations under continuing care agreements to which it is
a party.
(b) The following transactions are not considered sales, transfers, or
other dispositions of assets for purposes of subsection (a) of this
section:
(1) Those undertaken under contractual obligations in effect on October 1,
1996;
(2) Those made in the ordinary course of business of operating the
facility;
(3) Refunds of amounts under contracts entered into in the ordinary course
of business;
(4) Transfers of cash, securities, or other investment properties in
connection with ordinary investment transactions;
(5) Grants of mortgages, deeds of trust, or security interests to unrelated
third parties;
(6) Those involving easements, rights-of-way, road widenings, and similar
conveyances for the benefit of public bodies or utilities;
(7) Those made for an expansion or renovation; and
(8) Any other sales, transfers, or other dispositions identified by the
Department in regulations as appropriate to fall within this
subsection.
(c) (1) A provider subject to subsection (a)(1) of this section shall, at least
60 days before the sale, transfer, or other disposition, file with the
Department a statement of intent to sell, transfer, or otherwise
dispose of assets, and, at least 30 days before the sale, transfer, or
other disposition, give written notice of the proposed sale, transfer,
or other disposition to the Department.
(2) The statement of intent required to be filed with the Department under
paragraph (1) of this subsection shall include the following
information:
(i) Identification of the asset or assets to be sold, transferred, or
otherwise disposed of;
(ii) If the provider is subject to subsection (a) of this section by reason
of a series of sales, transfers, or other dispositions that have
exceeded cumulatively the 10% amount, then the provider shall identify
all of the assets that have resulted cumulatively in exceeding the 10%
amount; and
(iii) The reason for the sale, transfer, or other disposition identified in
paragraph (2)(i) of this subsection.
(3) The notice to the Department required by paragraph (1) of this
subsection shall include the following information:
(i) A statement that demonstrates that the proposed sale, transfer, or
other disposition is not likely to have an unreasonably adverse impact
on the financial stability of the provider or likely otherwise to have
an unreasonably adverse effect on the provider's capacity to perform
its obligations under the continuing care agreements to which it is a
party; and
(ii) Any other information that the Department requires.
(d) After reviewing the information required by subsection (c) of this
section, the Department shall make a determination as to whether the
sale, transfer, or other disposition satisfies the standard of
subsection (e) of this section. The determination by the Department
shall be made and communicated to the provider in writing by the 25th
day after the date of the notice required by subsection (c)(1) of this
section, unless extended by the Department for good cause. If the
determination of the Department is not to approve the proposed sale,
transfer, or other disposition, the Department shall set forth its
reasoning as to its determination in the written communication to the
provider.
(e) The Department shall approve the sale, transfer, or other disposition
of assets unless it determines that the sale, transfer, or other
disposition is likely to have an unreasonably adverse impact on the
financial stability of the provider or is likely to have an
unreasonably adverse effect on the provider's capacity to perform its
obligations under the continuing care agreements to which it is a
party.
(f) The Department shall adopt regulations setting forth reasonable
objective financial standards for proposed sales, transfers, or other
dispositions of assets, satisfaction of which will result in approval.
Those objective standards may not be the only basis on which a
determination can be made that a proposed sale, transfer, or other
disposition satisfies the condition set forth in subsection (e) of this
section.
(g) The determination by the Department with respect to a proposed sale,
transfer, or other disposition of assets is subject to appeal only by
the provider in accordance with the Administrative Procedure Act. No
other person shall be deemed to be a party in interest to the
proceedings.
(h) A transfer or other disposition of assets subject to this section may
not be completed until after the 5th day following the later of:
(1) The day on which the Department issues the notice specified in
subsection (d) of this section of a determination to approve the sale
or other transfer; or
(2) The hearing officer or administrative law judge renders a decision
permitting such transfer or other disposition of assets if appeal is
taken under subsection (g) of this section.
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