Section 1786.2 Of Article 4. Certificate Of Authority From California Health And Safety Code >> Division 2. >> Chapter 10. >> Article 4.
1786.2
. (a) The department shall not issue a certificate of
authority to an applicant or a provider, until the department
determines that each of the following has occurred:
(1) A provisional certificate of authority has been issued or all
of the requirements for a provisional certificate of authority have
been satisfied. In the case of an application for a new certificate
of authority due to an organizational change, if the continuing care
retirement community is financially sound and operating in compliance
with this chapter, it shall be sufficient for the purposes of this
paragraph that the department has approved the application in
writing.
(2) One of the following requirements has been met:
(A) At a minimum, continuing care contracts have been executed for
80 percent of the total residential living units in the continuing
care retirement community, with payment in full of the entrance fee.
(B) At a minimum, continuing care contracts have been executed for
70 percent of the total residential living units in the continuing
care retirement community, with payment in full of the entrance fee,
and the provider has submitted an updated financial and marketing
plan, satisfactory to the department, demonstrating that the proposed
continuing care retirement community will be financially viable.
(C) At a minimum, continuing care contracts have been executed for
50 percent of the total residential living units in the continuing
care retirement community, with payment in full of the entrance fee,
and the provider furnishes and maintains a letter of credit or other
security, satisfactory to the department, sufficient to bring the
total amount of payments to a level equivalent to 80 percent of the
total entrance fees for the entire continuing care retirement
community.
(3) A minimum five-year financial plan of operation remains
satisfactory to the department.
(4) Adequate reserves exist as required by Sections 1792 and
1792.6. For a new continuing care retirement community without an
operating history, the department may approve calculation of required
reserves on a pro forma basis in conjunction with compliance with
approved marketing plans.
(5) All applicable provisions of this chapter have been met.
(b) When issued, the certificate of authority, whether full or
conditioned, shall remain in full force unless forfeited by operation
of law under Section 1793.7, inactivated under Section 1793.8, or
suspended or revoked by the department pursuant to Section 1793.21.
(c) The provider shall display the certificate of authority in a
prominent place within the continuing care retirement community.