§ 23-59-3. Disclosure statement.
(a) The disclosure statement of each facility shall contain all of the following information
unless the information is contained in the continuing care contract and a copy of
that contract is attached to and made a part of the initial disclosure statement:
(1) The name and business address of the provider and a statement of whether the provider
is a partnership, foundation, association, corporation, or other type of business
or legal entity.
(2) Full information regarding ownership of the property on which the facility is or will
be operated and of the buildings in which it is or will be operated.
(3) The names and business addresses of the officers, directors, trustees, managing or
general partners, and any person having a ten percent (10%) or greater equity or beneficial
interest in the provider, and a description of that person's interest in or occupation
with the provider.
(4) For the provider, any person named in response to subsection (a)(3), or the proposed
management, if the facility will be managed on a day-to-day basis by a person other
than an individual directly employed by the provider:
(i) A description of any business experience in the operation or management of similar
facilities.
(ii) The name and address of any professional service, firm, association, foundation, trust,
partnership, or corporation or any other business or legal entity in which the person
has, or which has in the person, a ten percent (10%) or greater interest and which
it is presently intended will or may provide goods, leases, or services to the provider
of a value of five hundred dollars ($500) or more, within any year, including:
(A) A description of the goods, leases, or services and the probable or anticipated cost
thereof to the provider;
(B) The process by which the contract was awarded;
(C) Any additional offers that were received; and
(D) Any additional information requested by the department detailing how and why a contract
was awarded.
(iii) A description of any matter in which the person:
(A) Has been convicted of a felony or pleaded nolo contendere to a felony charge, or been
held liable or enjoined in a civil action by final judgment if the felony or civil
action involved fraud, embezzlement, fraudulent conversion, or misappropriation of
property; or
(B) Is subject to an injunctive order of a court of record, or within the past five (5)
years had any state or federal license or permit suspended or revoked as a result
of an action brought by a governmental agency or department, arising out of or relating
to business activity or health care, including without limitation actions affecting
a license to operate a foster care facility, nursing home, retirement home, home for
the aged, or facility registered under this chapter or similar laws in another state;
or
(C) Is currently the subject of any state or federal prosecution or administrative investigation
involving allegations of fraud, embezzlement, fraudulent conversion, or misappropriation
of property.
(5) A statement as to:
(i) Whether the provider is or ever has been affiliated with a religious, charitable,
or other nonprofit organization, the nature of any such affiliation, and the extent
to which the affiliate organization is or will be responsible for the financial and
contractual obligations of the provider; and
(ii) Any provision of the federal Internal Revenue Code, 26 U.S.C. § 1 et seq., under which the provider is exempt from the payment of income tax.
(6) The location and description of the real property of the facility, existing or proposed,
and to the extent proposed, the estimated completion date or dates of improvements,
whether or not construction has begun and the contingencies under which construction
may be deferred.
(7) The services provided or proposed to be provided under continuing care contracts,
including the extent to which medical care is furnished or is available pursuant to
any arrangement. The disclosure statement shall clearly state which services are included
in basic continuing care contracts and which services are made available by the provider
at extra charge.
(8) A description of all fees required of residents, including any entrance fees and periodic
charges. The description shall include: (i) a description of all proposed uses of
any funds or property required to be transferred to the provider or any other person
prior to the resident's occupancy of the facility and of any entrance fee, (ii) whether
provisions exist for the escrowing and return of any such funds, property, or entrance
fee and the manner and any conditions of return, and (iii) the manner by which the
provider may adjust periodic charges or other recurring fees and any limitations on
such adjustments. If the facility is already in operation, or if the provider operates
one or more similar facilities within this state, there shall be included tables showing
the frequency and average dollar amount of each increase in periodic rates at each
facility for the previous five (5) years or such shorter period that the facility
has been operated by the provider.
(9) Any provisions that have been made or will be made to provide reserve funding or security
to enable the provider to fully perform its obligations under continuing care contracts,
including the establishment of escrow accounts, trusts, or reserve funds, together
with the manner in which such funds will be invested and the names and experience
of persons who will make the investment decisions.
(10) Certified financial statements of the provider, including: (i) a balance sheet as
of the end of the two (2) most recent fiscal years and (ii) income statements of the
provider for the two (2) most recent fiscal years or such shorter period that the
provider has been in existence.
(11) A pro forma income statement for the current fiscal year.
(12) If the operation of the facility has not yet commenced, a statement of the anticipated
source and application of the funds used or to be used in the purchase or construction
of the facility, including:
(i) An estimate of the cost of purchasing or constructing and equipping the facility including
such related costs as financing expense, legal expense, land costs, occupancy development
costs, and all other similar costs that the provider expects to incur or become obligated
for prior to the commencement of operations.
(ii) A description of any mortgage loan or other long-term financing intended to be used
for any purpose in the financing of the facility and of the anticipated terms and
costs of the financing, including without limitation all payments of the proceeds
of the financing to the provider, management, or any related person.
(iii) An estimate of the percentage of entrance fees that will be used or pledged for the
construction or purchase of the facility, as security for long-term financing or for
any other use in connection with the commencement of operation of the facility.
(iv) An estimate of the total entrance fees to be received from or on behalf of residents
at or prior to commencement of operation of the facility.
(v) An estimate of the funds, if any, which are anticipated to be necessary to fund start-up
losses and provide reserve funds to assure full performance of the obligations of
the provider under continuing care contracts.
(vi) A projection of estimated income from fees and charges other than entrance fees, showing
individual rates presently anticipated to be charged and including a description of
the assumptions used for calculating the estimated occupancy rate of the facility
and the effect on the income of the facility of any government subsidies for health
care services to be provided pursuant to the continuing care contracts.
(vii) A projection of estimated operating expenses of the facility, including (i) a description
of the assumptions used in calculating any expenses and separate allowances for the
replacement of equipment and furnishings and anticipated major structural repairs
or additions and (ii) an estimate of the percentage of occupancy required for continued
operation of the facility.
(viii) Identification of any assets pledged as collateral for any purpose.
(ix) An estimate of annual payments of principal and interest required by the mortgage
loan or other long-term financing.
(13) A description of the provider's criteria for admission of new residents.
(14) A description of the provider's policies regarding access to the facility and its
services for nonresidents.
(15) Any other material information concerning the facility or the provider that may be
required by the department or included by the provider.
(b) The disclosure statement shall state on its cover that the filing of the disclosure
statement with the department does not constitute approval, recommendation, or endorsement
of the facility by the department.
(c) A copy of the standard form or forms for continuing care contracts used by the provider
shall be attached as an exhibit to each disclosure statement.
(d) If the department determines that the disclosure statement does not comply with the
provisions of this chapter, it shall have the right to take action pursuant to § 23-59-16.