BILL ANALYSIS Senate Research Center S.B. 1522 89R11715 LRM-F By: Perry Health & Human Services 3/28/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Continuing care retirement communities (CCRCs) are primarily faith-based, mission-driven organizations that receive a certificate of authority from the Texas Department of Insurance (TDI) to provide easily accessible, progressive levels of care to older Texans. Typically, a CCRC will offer independent living, assisted living, skilled nursing services, and other levels of care in one community to allow for a smooth transition across the continuum of care. Much of the language governing CCRCs has not been updated since 1987, leading to a gap in statutory guidance for CCRCs and the provision of long-term care. For example, CCRCs are gradually moving away from skilled nursing and investing further in memory care, home and community-based services, and hospice due to low reimbursement rates and cumbersome federal regulations. Further, vague definitions in current law have led to confusion amongst providers about whether they need to register as a CCRCspecifically for independent living communities that do not offer the full continuum of care typically provided in a CCRC but do furnish a living unit and offer other services like food delivery or Life Alert Emergency Response. S.B. 1522 updates the Health and Safety Code to clarify what constitutes "continuing care" and thereby requires certification from TDI. This change will focus TDI regulation on providers that promise priority or discounted access to progressive levels of carehelping TDI ensure communities fulfill their commitments to residents. As written, statute does not specifically prohibit properties on leased land from becoming CCRCscreating the potential for disruptions to residents' health and financial wellbeing if a provider faces solvency issues or a land agreement is terminated. As proposed, S.B. 1522 amends current law relating to the regulation of continuing care facilities. Note: While the statutory reference in this bill is to the State Board of Insurance, the following amendments affect the Texas Department of Insurance (TDI), as the successor agency to the State Board of Insurance. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 246.002, Health and Safety Code, by amending Subdivisions (1), (5), and (7) and adding Subdivisions (1-a) and (8-a) to define "assisted living facility" and "nursing facility" and redefine "board," "entrance fee," and "living unit." SECTION 2. Amends Section 246.0025, Health and Safety Code, as follows: Sec. 246.0025. DEFINITION OF CONTINUING CARE. (a) Redefines "continuing care." (b) Provides that the term "continuing care" includes the furnishing of services under a continuing care contract with an agreement to provide priority, guaranteed, or discounted access to progressive levels of health care services to an individual as necessary to enable, rather than the furnishing of services described by Subsection (a) to an individual in the individual's residence or otherwise enabling, the individual to remain in the individual's residence. SECTION 3. Amends Section 246.004, Health and Safety Code, as follows: Sec. 246.004. RIGHTS OF RESIDENTS. (a) Creates this subsection from existing text. Provides that a resident receiving care in a portion of a facility licensed to provide nursing home care or assisted living services is entitled to all statutory rights provided to a resident of a nursing home or an assisted living facility, as applicable. Deletes existing text providing that a resident receiving care in a portion of a facility licensed to provide nursing home care, personal care, or custodial care is entitled to all statutory rights provided to a nursing home, personal care, or custodial care resident. (b) Prohibits a continuing care contract or reservation agreement from prohibiting residents from assembling. (c) Requires a facility to provide to a resident, prospective resident, or designated agent of a resident or prospective resident, on request, an electronic or hard copy of the most recent revised disclosure statement filed by the provider under Section 246.054 (Annual Disclosure Statement Revision). SECTION 4. Amends Subchapter B, Chapter 246, Health and Safety Code, by adding Section 246.0215, as follows: Sec. 246.0215. APPLICABILITY. Provides that Chapter 246 (Continuing Care Facilities) does not apply to an admission or residence agreement offered by a residential community that charges an entrance fee if: (1) residents of the residential community pay for available assisted living services and nursing home care on a fee-for-service basis; (2) fees for available assisted living services and nursing home care are the same for a prospective resident as a current resident of the living unit; and (3) the admission or residence agreement includes a certain statement or a substantially equivalent statement in type that is boldfaced, capitalized, underlined, or otherwise set out from the surrounding written material so as to be conspicuous. Sets forth the language of the statement. SECTION 5. Amends Section 246.022, Health and Safety Code, by amending Subsection (c) and adding Subsection (c-1), as follows: (c) Creates an exception under Subsection (c-1). (c-1) Authorizes the commissioner of the State Board of Insurance (commissioner) to reject an application for a certificate of authority under Subsection (c) (relating to granting an application for a certificate of authority) if the applicant does not own the real property on which the facility is located or proposed to be located. SECTION 6. Amends Section 246.055, Health and Safety Code, as follows: Sec. 246.055. ADVERTISEMENT IN CONFLICT WITH DISCLOSURES. (a) Creates this subsection from existing text and makes no further changes. (b) Prohibits a person from using the title "continuing care facility" or "continuing care retirement community" in advertising materials unless the person holds a certificate of authority issued under this chapter. SECTION 7. Amends Sections 246.056(c) and (d), Health and Safety Code, as follows: (c) Requires that the entrance fee, rather than any money or property transferred to the provider other than periodic charges specified in the contract and applicable only to the period a living unit was actually occupied by the resident, if a continuing care contract is rescinded under Section 246.056 (Rescission of Contract; Required Language), be refunded not later than the 30th day after the date of rescission. (d) Amends the statement required to be included in each continuing care contract to entitle the signer, if the signer elects to cancel the contract, to receive a refund of the entrance fee, rather than a refund of all assets transferred other than periodic charges applicable to the signer's occupancy of a living unit. SECTION 8. Amends Section 246.057(b), Health and Safety Code, to provide that if a continuing care contract is canceled under Section 246.057 (Cancellation of Contract; Death or Incapacity Before Occupancy), the resident or the resident's legal representative is entitled to a refund of all money or property transferred to the provider, minus certain costs and charges, including any money transferred to the provider for optional modifications to the resident's or prospective resident's living unit under an agreement that is separate from the continuing care contract, and to make nonsubstantive changes. SECTION 9. Amends Section 246.071(a), Health and Safety Code, to require a provider, if a provider accepts, rather than before a provider is authorized to accept, the payment of a deposit made under a reservation agreement or any portion of an entrance fee before the date the prospective resident is authorized to occupy a living unit, to establish an entrance fee escrow account with a bank or trust company, as escrow agent, that is located in this state. SECTION 10. Amends Section 246.072, Health and Safety Code, as follows: (a) Requires the escrow agent, on a written request from or on behalf of the provider or a prospective resident, to return the amount on deposit to the person who paid the deposit if the reservation agreement is terminated before the prospective resident occupies the living unit. Deletes existing text requiring the escrow agent to return the amount on deposit or maintain the deposit as an entrance fee in the entrance fee escrow account. (b) Requires the escrow agent, unless the agent receives a written request from or on behalf of a provider or a resident for the return of an entrance fee under Subsection (a), rather than Section 246.056 (Rescission of Contract; Required Language), at the provider's discretion, to release the fee to the provider or place the fee in a loan reserve fund escrow. SECTION 11. Amends the heading to Section 246.073, Health and Safety Code, to read as follows: Sec. 246.073. RELEASE TO PROVIDER FOR NEW FACILITY OR EXPANSION. SECTION 12. Amends Section 246.073, Health and Safety Code, by amending Subsection (a) and adding Subsection (a-1), as follows: (a) Provides that this section applies only to a newly constructed facility or an expansion of an existing facility in which the number of existing living units is increased by 50 percent or more. (a-1) Creates this subsection from existing text. Requires an escrow agent, except as provided by Subsection (b) (relating to prohibiting the aggregate amount of entrance fees that are authorized to be released to the provider from exceeding a certain amount), to release an entrance fee to the provider if: (1) a minimum of 50 percent of the number of living units in the facility have been reserved for residents, as evidenced by: (A) uncanceled executed continuing care contracts or reservation agreements with those residents; and (B) the receipt by the agent of entrance fee deposits of at least 10 percent of the entrance fee designated for each reserved living unit, rather than designate in each continuing care contract; (2) the total amount of aggregate entrance fees received or receivable by the provider under binding continuing care contracts or reservation agreements, the anticipated proceeds of certain long-term financing commitments, and certain funds in the actual possession of the provider are equal to or more than a certain amount; and (3) a commitment has been received by the provider for any permanent mortgage loan or other long-term financing described in the statement of anticipated source and application of funds included in the current disclosure statement and any conditions of the commitment before disbursement of funds have been substantially satisfied, other than completion of the construction or closing on the purchase of the facility, and if construction of the facility has not been completed, rather than substantially completed, certain requirements have been met. Deletes existing text requiring an escrow agent to release an entrance fee to the provider if certain requirements have been met and, if construction or purchase of the facility has been substantially completed, if the entrance fee applies to a living unit that has been previously occupied, the living unit is available for occupancy by the new resident. Makes nonsubstantive changes. SECTION 13. Amends Section 246.0736, Health and Safety Code, by amending Subsection (a) and adding Subsection (d), as follows: (a) Requires the commissioner, after the initial release of an entrance fee by an escrow agent for a specific facility subject to Section 246.073, and before construction of the facility is completed, to authorize an escrow agent to continue to release escrowed entrance fees for that facility to the provider without further proof of satisfying the requirements of Section 246.073 if the provider completes certain actions. (d) Provides that, after construction on a facility described by Section 246.073(a) is completed, all necessary occupancy permits for the facility have been issued by the local government that has authority to issue permits, and all living units in the facility are available for occupancy, the release of escrowed entrance fees for the facility is governed by Section 246.072 (Return of Deposits; Release or Return of Entrance Fee). SECTION 14. Amends Section 246.074, Health and Safety Code, as follows: Sec. 246.074. RETURN OF ENTRANCE FEE. Requires the escrow agent to return an entrance fee to the person who paid it if the fee is not released to the provider or placed in the loan reserve fund escrow required under Section 246.077 (Reserve Fund Escrow): (1) not later than 36 months after the date on which any portion of the entrance fee is received by the provider; (2) within the time period, rather than within a longer time, specified by the provider in the disclosure statement delivered with the continuing care contract under which the fee was paid, if the specified time period is longer than the time period under Subdivision (1); or (3) if any of the following events occur, as soon as practicable after the date the event occurs: the prospective resident dies before occupying a unit, construction on a facility not yet in operation is stopped indefinitely before the facility is completed, or a continuing care contract is rescinded under Section 246.056. Makes nonsubstantive changes to this section. SECTION 15. Amends Section 246.075, Health and Safety Code, as follows: Sec. 246.075. New heading: ESCROW OF CERTAIN FEES NOT REQUIRED. Provides that Subchapter D (Entrance Fee and Reserve Fund Escrow Accounts) does not require the escrow of a waitlist fee or a similar fee of $1,000 or less, or of any nonrefundable portion of certain deposits or entrance fees. SECTION 16. Amends Section 246.077(b), Health and Safety Code, to authorize the loan reserve fund escrow amount, at the option of the facility, to exclude the portion of principal and interest payments applicable to that portion of the facility that is a licensed nursing facility or licensed assisted living facility, rather than a licensed nursing home. SECTION 17. Amends Sections 246.114(b) and (d), Health and Safety Code, as follows: (b) Requires a facility subject to Section 246.114 (Actuarial Review) to file with the commissioner actuarial reviews at least once every five years. Deletes existing text requiring a facility subject to this section that initially filed with the commissioner an actuarial review performed on or after September 1, 1982, and before September 1, 1987, to file with the commissioner subsequent actuarial reviews at five-year intervals from the date of completion of the initial actuarial review. (d) Authorizes the commissioner to require an actuarial review of a facility more often than once every five years, rather than require an actuarial review before the end of the five-year interval in which the facility would otherwise be required to file an actuarial review, under certain circumstances, including if the facility leases from a third party any portion of the grounds on which the facility is located or buildings in which the facility operates. Makes nonsubstantive changes. SECTION 18. Repealer: Section 246.114(c) (relating to requiring a facility to file with the commissioner subsequent actuarial reviews at five-year intervals), Health and Safety Code. SECTION 19. Makes application of Section 246.0025, Health and Safety Code, as amended by this Act, prospective. SECTION 20. Effective date: January 1, 2026.
BILL ANALYSIS
Senate Research Center S.B. 1522
89R11715 LRM-F By: Perry
Health & Human Services
3/28/2025
As Filed
Senate Research Center
S.B. 1522
89R11715 LRM-F
By: Perry
Health & Human Services
3/28/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Continuing care retirement communities (CCRCs) are primarily faith-based, mission-driven organizations that receive a certificate of authority from the Texas Department of Insurance (TDI) to provide easily accessible, progressive levels of care to older Texans. Typically, a CCRC will offer independent living, assisted living, skilled nursing services, and other levels of care in one community to allow for a smooth transition across the continuum of care.
Much of the language governing CCRCs has not been updated since 1987, leading to a gap in statutory guidance for CCRCs and the provision of long-term care. For example, CCRCs are gradually moving away from skilled nursing and investing further in memory care, home and community-based services, and hospice due to low reimbursement rates and cumbersome federal regulations.
Further, vague definitions in current law have led to confusion amongst providers about whether they need to register as a CCRCspecifically for independent living communities that do not offer the full continuum of care typically provided in a CCRC but do furnish a living unit and offer other services like food delivery or Life Alert Emergency Response. S.B. 1522 updates the Health and Safety Code to clarify what constitutes "continuing care" and thereby requires certification from TDI. This change will focus TDI regulation on providers that promise priority or discounted access to progressive levels of carehelping TDI ensure communities fulfill their commitments to residents.
As written, statute does not specifically prohibit properties on leased land from becoming CCRCscreating the potential for disruptions to residents' health and financial wellbeing if a provider faces solvency issues or a land agreement is terminated.
As proposed, S.B. 1522 amends current law relating to the regulation of continuing care facilities.
Note: While the statutory reference in this bill is to the State Board of Insurance, the following amendments affect the Texas Department of Insurance (TDI), as the successor agency to the State Board of Insurance.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 246.002, Health and Safety Code, by amending Subdivisions (1), (5), and (7) and adding Subdivisions (1-a) and (8-a) to define "assisted living facility" and "nursing facility" and redefine "board," "entrance fee," and "living unit."
SECTION 2. Amends Section 246.0025, Health and Safety Code, as follows:
Sec. 246.0025. DEFINITION OF CONTINUING CARE. (a) Redefines "continuing care."
(b) Provides that the term "continuing care" includes the furnishing of services under a continuing care contract with an agreement to provide priority, guaranteed, or discounted access to progressive levels of health care services to an individual as necessary to enable, rather than the furnishing of services described by Subsection (a) to an individual in the individual's residence or otherwise enabling, the individual to remain in the individual's residence.
SECTION 3. Amends Section 246.004, Health and Safety Code, as follows:
Sec. 246.004. RIGHTS OF RESIDENTS. (a) Creates this subsection from existing text. Provides that a resident receiving care in a portion of a facility licensed to provide nursing home care or assisted living services is entitled to all statutory rights provided to a resident of a nursing home or an assisted living facility, as applicable. Deletes existing text providing that a resident receiving care in a portion of a facility licensed to provide nursing home care, personal care, or custodial care is entitled to all statutory rights provided to a nursing home, personal care, or custodial care resident.
(b) Prohibits a continuing care contract or reservation agreement from prohibiting residents from assembling.
(c) Requires a facility to provide to a resident, prospective resident, or designated agent of a resident or prospective resident, on request, an electronic or hard copy of the most recent revised disclosure statement filed by the provider under Section 246.054 (Annual Disclosure Statement Revision).
SECTION 4. Amends Subchapter B, Chapter 246, Health and Safety Code, by adding Section 246.0215, as follows:
Sec. 246.0215. APPLICABILITY. Provides that Chapter 246 (Continuing Care Facilities) does not apply to an admission or residence agreement offered by a residential community that charges an entrance fee if:
(1) residents of the residential community pay for available assisted living services and nursing home care on a fee-for-service basis;
(2) fees for available assisted living services and nursing home care are the same for a prospective resident as a current resident of the living unit; and
(3) the admission or residence agreement includes a certain statement or a substantially equivalent statement in type that is boldfaced, capitalized, underlined, or otherwise set out from the surrounding written material so as to be conspicuous. Sets forth the language of the statement.
SECTION 5. Amends Section 246.022, Health and Safety Code, by amending Subsection (c) and adding Subsection (c-1), as follows:
(c) Creates an exception under Subsection (c-1).
(c-1) Authorizes the commissioner of the State Board of Insurance (commissioner) to reject an application for a certificate of authority under Subsection (c) (relating to granting an application for a certificate of authority) if the applicant does not own the real property on which the facility is located or proposed to be located.
SECTION 6. Amends Section 246.055, Health and Safety Code, as follows:
Sec. 246.055. ADVERTISEMENT IN CONFLICT WITH DISCLOSURES. (a) Creates this subsection from existing text and makes no further changes.
(b) Prohibits a person from using the title "continuing care facility" or "continuing care retirement community" in advertising materials unless the person holds a certificate of authority issued under this chapter.
SECTION 7. Amends Sections 246.056(c) and (d), Health and Safety Code, as follows:
(c) Requires that the entrance fee, rather than any money or property transferred to the provider other than periodic charges specified in the contract and applicable only to the period a living unit was actually occupied by the resident, if a continuing care contract is rescinded under Section 246.056 (Rescission of Contract; Required Language), be refunded not later than the 30th day after the date of rescission.
(d) Amends the statement required to be included in each continuing care contract to entitle the signer, if the signer elects to cancel the contract, to receive a refund of the entrance fee, rather than a refund of all assets transferred other than periodic charges applicable to the signer's occupancy of a living unit.
SECTION 8. Amends Section 246.057(b), Health and Safety Code, to provide that if a continuing care contract is canceled under Section 246.057 (Cancellation of Contract; Death or Incapacity Before Occupancy), the resident or the resident's legal representative is entitled to a refund of all money or property transferred to the provider, minus certain costs and charges, including any money transferred to the provider for optional modifications to the resident's or prospective resident's living unit under an agreement that is separate from the continuing care contract, and to make nonsubstantive changes.
SECTION 9. Amends Section 246.071(a), Health and Safety Code, to require a provider, if a provider accepts, rather than before a provider is authorized to accept, the payment of a deposit made under a reservation agreement or any portion of an entrance fee before the date the prospective resident is authorized to occupy a living unit, to establish an entrance fee escrow account with a bank or trust company, as escrow agent, that is located in this state.
SECTION 10. Amends Section 246.072, Health and Safety Code, as follows:
(a) Requires the escrow agent, on a written request from or on behalf of the provider or a prospective resident, to return the amount on deposit to the person who paid the deposit if the reservation agreement is terminated before the prospective resident occupies the living unit. Deletes existing text requiring the escrow agent to return the amount on deposit or maintain the deposit as an entrance fee in the entrance fee escrow account.
(b) Requires the escrow agent, unless the agent receives a written request from or on behalf of a provider or a resident for the return of an entrance fee under Subsection (a), rather than Section 246.056 (Rescission of Contract; Required Language), at the provider's discretion, to release the fee to the provider or place the fee in a loan reserve fund escrow.
SECTION 11. Amends the heading to Section 246.073, Health and Safety Code, to read as follows:
Sec. 246.073. RELEASE TO PROVIDER FOR NEW FACILITY OR EXPANSION.
SECTION 12. Amends Section 246.073, Health and Safety Code, by amending Subsection (a) and adding Subsection (a-1), as follows:
(a) Provides that this section applies only to a newly constructed facility or an expansion of an existing facility in which the number of existing living units is increased by 50 percent or more.
(a-1) Creates this subsection from existing text. Requires an escrow agent, except as provided by Subsection (b) (relating to prohibiting the aggregate amount of entrance fees that are authorized to be released to the provider from exceeding a certain amount), to release an entrance fee to the provider if:
(1) a minimum of 50 percent of the number of living units in the facility have been reserved for residents, as evidenced by:
(A) uncanceled executed continuing care contracts or reservation agreements with those residents; and
(B) the receipt by the agent of entrance fee deposits of at least 10 percent of the entrance fee designated for each reserved living unit, rather than designate in each continuing care contract;
(2) the total amount of aggregate entrance fees received or receivable by the provider under binding continuing care contracts or reservation agreements, the anticipated proceeds of certain long-term financing commitments, and certain funds in the actual possession of the provider are equal to or more than a certain amount; and
(3) a commitment has been received by the provider for any permanent mortgage loan or other long-term financing described in the statement of anticipated source and application of funds included in the current disclosure statement and any conditions of the commitment before disbursement of funds have been substantially satisfied, other than completion of the construction or closing on the purchase of the facility, and if construction of the facility has not been completed, rather than substantially completed, certain requirements have been met.
Deletes existing text requiring an escrow agent to release an entrance fee to the provider if certain requirements have been met and, if construction or purchase of the facility has been substantially completed, if the entrance fee applies to a living unit that has been previously occupied, the living unit is available for occupancy by the new resident. Makes nonsubstantive changes.
SECTION 13. Amends Section 246.0736, Health and Safety Code, by amending Subsection (a) and adding Subsection (d), as follows:
(a) Requires the commissioner, after the initial release of an entrance fee by an escrow agent for a specific facility subject to Section 246.073, and before construction of the facility is completed, to authorize an escrow agent to continue to release escrowed entrance fees for that facility to the provider without further proof of satisfying the requirements of Section 246.073 if the provider completes certain actions.
(d) Provides that, after construction on a facility described by Section 246.073(a) is completed, all necessary occupancy permits for the facility have been issued by the local government that has authority to issue permits, and all living units in the facility are available for occupancy, the release of escrowed entrance fees for the facility is governed by Section 246.072 (Return of Deposits; Release or Return of Entrance Fee).
SECTION 14. Amends Section 246.074, Health and Safety Code, as follows:
Sec. 246.074. RETURN OF ENTRANCE FEE. Requires the escrow agent to return an entrance fee to the person who paid it if the fee is not released to the provider or placed in the loan reserve fund escrow required under Section 246.077 (Reserve Fund Escrow):
(1) not later than 36 months after the date on which any portion of the entrance fee is received by the provider;
(2) within the time period, rather than within a longer time, specified by the provider in the disclosure statement delivered with the continuing care contract under which the fee was paid, if the specified time period is longer than the time period under Subdivision (1); or
(3) if any of the following events occur, as soon as practicable after the date the event occurs: the prospective resident dies before occupying a unit, construction on a facility not yet in operation is stopped indefinitely before the facility is completed, or a continuing care contract is rescinded under Section 246.056.
Makes nonsubstantive changes to this section.
SECTION 15. Amends Section 246.075, Health and Safety Code, as follows:
Sec. 246.075. New heading: ESCROW OF CERTAIN FEES NOT REQUIRED. Provides that Subchapter D (Entrance Fee and Reserve Fund Escrow Accounts) does not require the escrow of a waitlist fee or a similar fee of $1,000 or less, or of any nonrefundable portion of certain deposits or entrance fees.
SECTION 16. Amends Section 246.077(b), Health and Safety Code, to authorize the loan reserve fund escrow amount, at the option of the facility, to exclude the portion of principal and interest payments applicable to that portion of the facility that is a licensed nursing facility or licensed assisted living facility, rather than a licensed nursing home.
SECTION 17. Amends Sections 246.114(b) and (d), Health and Safety Code, as follows:
(b) Requires a facility subject to Section 246.114 (Actuarial Review) to file with the commissioner actuarial reviews at least once every five years. Deletes existing text requiring a facility subject to this section that initially filed with the commissioner an actuarial review performed on or after September 1, 1982, and before September 1, 1987, to file with the commissioner subsequent actuarial reviews at five-year intervals from the date of completion of the initial actuarial review.
(d) Authorizes the commissioner to require an actuarial review of a facility more often than once every five years, rather than require an actuarial review before the end of the five-year interval in which the facility would otherwise be required to file an actuarial review, under certain circumstances, including if the facility leases from a third party any portion of the grounds on which the facility is located or buildings in which the facility operates. Makes nonsubstantive changes.
SECTION 18. Repealer: Section 246.114(c) (relating to requiring a facility to file with the commissioner subsequent actuarial reviews at five-year intervals), Health and Safety Code.
SECTION 19. Makes application of Section 246.0025, Health and Safety Code, as amended by this Act, prospective.
SECTION 20. Effective date: January 1, 2026.