AB1983 - Continuing care retirement communities: repayable contracts.

Amended IN Senate August 21, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 1983 Introduced by Assembly Member Blanca Rubio February 13, 2026 An act to amend Section 1771 Sections 1771, 1788, and 1788.4 of the Health and Safety Code, relating to continuing care contracts. LEGISLATIVE COUNSEL'S DIGEST AB 1983, as amended, Blanca Rubio. Continuing care retirement communities: repayable contracts. Existing law establishes the State Department of Social Services and sets forth its powers and duties, including the certification and regulation of continuing care retirement communities. Existing law regulates different types of continuing care contracts, including, among others, a repayable contract. A repayable contract is a continuing care contract that includes a promise to repay all or a portion of an entrance fee that is conditioned upon reoccupancy or resale of the unit previously occupied by the resident. This bill would additionally instead refer to the contract described above as a repayable conditioned on resale contract, define a repayable contract to include both a repayable conditioned on resale contract and a repayable in sequential order contract, and would define a repayable in sequential order contract to include mean a continuing care contract that includes a promise to repay all or a portion of an entrance fee based on the sequential order in which repayable contracts are terminated. To repay entrance fees using the sequential order method, the The bill would require a provider that offers or maintains repayable in sequential order contracts to establish a repayment account for these purposes, to assign each terminated contract a sequential repayment number, and each time entrance fees are paid for a reoccupied unit, a repayment account would be credited until funds are sufficient to repay the next terminated contract in sequential order. The bill would require a provider to issue this repayment within 14 days. and to repay those contracts in sequential order from the proceeds of future repayable in sequential order contracts, as specified. Existing law requires all continuing care contracts to include specified provisions, including, among others, that if it’s a repayable contract, the average and longest amount of time that it has taken to resell or reoccupy a unit within the last 5 calendar years. This bill would make that provision applicable only to repayable conditioned on resale contracts and would require certain additional disclosures relating to repayable in sequential order contracts to be made, including, among others, the average and longest duration of time elapsed between contract termination and repayment during the last 5 calendar years. Existing law requires a lump sum owed to a resident or a resident’s estate, including any interest accrued, to be paid within 14 calendar days after resale of the unit. This bill would make that provision applicable only to repayable conditioned on resale contracts and would make it 14 days after resale or reoccupancy. For repayable conditioned on sequential order contracts, the bill would require the full lump sum to be paid within 14 calendar days after sufficient funds exist in the sequential repayment account to satisfy the contract’s assigned sequential repayment number. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 1771 of the Health and Safety Code is amended to read: 1771. Unless the context otherwise requires, the definitions in this section govern the interpretation of this chapter. (a) (1) “Affiliate” means any person, corporation, limited liability company, business trust, trust, partnership, unincorporated association, or other legal entity that directly or indirectly controls, is controlled by, or is under common control with, a provider or applicant. (2) “Affinity group” means a grouping of entities sharing a common interest, philosophy, or connection (e.g., military officers, religion). (3) “Annual report” means the report each provider is required to file annually with the department, as described in Section 1790. (4) “Applicant” means any entity, or combination of entities, that submits and has pending an application to the department for a permit to accept deposits and a certificate of authority. (5) “Assisted living services” includes, but is not limited to, assistance with personal activities of daily living, including dressing, feeding, toileting, bathing, grooming, mobility, and associated tasks, to help provide for and maintain physical and psychosocial comfort. (6) “Assisted living unit” means the living area or unit within a continuing care retirement community that is specifically designed to provide ongoing assisted living services. (7) “Audited financial statement” means financial statements prepared in accordance with generally accepted accounting principles, including the opinion of an independent certified public accountant, and notes to the financial statements considered customary or necessary to provide full disclosure and complete information regarding the provider’s financial statements, financial condition, and operation. (b) (reserved) (c) (1) “Cancel” means to destroy the force and effect of an agreement or continuing care contract. (2) “Cancellation period” means the 90-day period, beginning when the resident physically moves into the continuing care retirement community, during which the resident may cancel the continuing care contract, as provided in Section 1788.2. (3) “Care” means nursing, medical, or other health-related services, protection or supervision, assistance with the personal activities of daily living, or any combination of those services. (4) “Cash equivalent” means certificates of deposit and United States treasury Treasury securities with a maturity of five years or less. (5) “Certificate” or “certificate of authority” means the certificate issued by the department, properly executed and bearing the State Seal, authorizing a specified provider to enter into one or more continuing care contracts at a single specified continuing care retirement community. (6) “Condition” means a restriction, specific action, or other requirement imposed by the department for the initial or continuing validity of a permit to accept deposits, a provisional certificate of authority, or a certificate of authority. A condition may limit the circumstances under which the provider may enter into any new deposit agreement or contract, or may be imposed as a condition precedent to the issuance of a permit to accept deposits, a provisional certificate of authority, or a certificate of authority. (7) “Consideration” means some right, interest, profit, or benefit paid, transferred, promised, or provided by one party to another as an inducement to contract. Consideration includes some forbearance, detriment, loss, or responsibility, that is given, suffered, or undertaken by a party as an inducement to another party to contract. (8) “Continuing care contract” means a contract that includes a continuing care promise made, in exchange for an entrance fee, the payment of periodic charges, or both types of payments. A continuing care contract may consist of one agreement or a series of agreements and other writings incorporated by reference. (9) “Continuing care promise” means a promise, expressed or implied, by a provider to provide one or more elements of care to an elderly resident for the duration of their life or for a term in excess of one year. Any such promise or representation, whether part of a continuing care contract, other agreement, or series of agreements, or contained in any advertisement, brochure, or other material, either written or oral, is a continuing care promise. (10) “Continuing care retirement community” means a facility located within the State of California where services promised in a continuing care contract are provided. A distinct phase of development approved by the department may be considered to be the continuing care retirement community when a project is being developed in successive distinct phases over a period of time. When the services are provided in residents’ own homes, the homes into which the provider takes those services are considered part of the continuing care retirement community. (11) “Control” means directing or causing the direction of the financial management or the policies of another entity, including an operator of a continuing care retirement community, whether by means of the controlling entity’s ownership interest, contract, or any other involvement. A parent entity or sole member of an entity controls a subsidiary entity provider for a continuing care retirement community if its officers, directors, or agents directly participate in the management of the subsidiary entity or in the initiation or approval of policies that affect the continuing care retirement community’s operations, including, but not limited to, approving budgets or the administrator for a continuing care retirement community. (d) (1) “Department” means the State Department of Social Services. (2) “Deposit” means any transfer of consideration, including a promise to transfer money or property, made by a depositor to any entity that promises or proposes to promise to provide continuing care, but is not authorized to enter into a continuing care contract with the potential depositor. (3) “Deposit agreement” means any agreement made between any entity accepting a deposit and a depositor. Deposit agreements for deposits received by an applicant prior to the department’s release of funds from the deposit escrow account shall be subject to the requirements described in Section 1780.4. (4) “Depository” means a bank or institution that is a member of the Federal Deposit Insurance Corporation or a comparable deposit insurance program. (5) “Depositor” means any prospective resident who pays a deposit. Where any portion of the consideration transferred to an applicant as a deposit or to a provider as consideration for a continuing care contract is transferred by a person other than the prospective resident or a resident, that third-party transferor shall have the same cancellation or refund rights as the prospective resident or resident for whose benefit the consideration was transferred. (6) “Director” means the Director of Social Services. (e) (1) “Elderly” means an individual who is 60 years of age or older. (2) “Entity” means an individual, partnership, corporation, limited liability company, and any other form for doing business. Entity includes a person, sole proprietorship, estate, trust, association, and joint venture. (3) “Entrance fee” means the sum of any initial, amortized, or deferred transfer of consideration made or promised to be made by, or on behalf of, a person entering into a continuing care contract for the purpose of ensuring care or related services pursuant to that continuing care contract or as full or partial payment for the promise to provide care for the term of the continuing care contract. Entrance fee includes the purchase price of a condominium, cooperative, or other interest sold in connection with a promise of continuing care. An initial, amortized, or deferred transfer of consideration that is greater in value than 12 times the monthly care fee shall be presumed to be an entrance fee. (4) “Entrance fee refund” means the return of all or a portion of the initial entrance fee paid by a resident to a provider, which is required to be paid back to the resident or the resident’s estate upon the termination or cancellation of a refundable contract. (4) (5) “Equity” means the value of real property in excess of the aggregate amount of all liabilities secured by the property. (5) (6) “Equity interest” means an interest held by a resident in a continuing care retirement community that consists of either an ownership interest in any part of the continuing care retirement community property or a transferable membership that entitles the holder to reside at the continuing care retirement community. (6) (7) “Equity project” means a continuing care retirement community where residents receive an equity interest in the continuing care retirement community property. (7) (8) “Equity securities” shall refer generally to large and midcapitalization corporate stocks that are publicly traded and readily liquidated for cash, and shall include shares in mutual funds that hold portfolios consisting predominantly of these stocks and other qualifying assets, as defined by Section 1792.2. Equity securities shall also include other similar securities that are specifically approved by the department. (8) (9) “Escrow agent” means a bank or institution, including, but not limited to, a title insurance company, approved by the department to hold and render accountings for deposits of cash or cash equivalents. (f) “Facility” means any place or accommodation where a provider provides or will provide a resident with care or related services, whether or not the place or accommodation is constructed, owned, leased, rented, or otherwise contracted for by the provider. (g) (reserved) (h) (reserved) (i) (1) “Inactive certificate of authority” means a certificate that has been terminated under Section 1793.8. (2) “Investment securities” means any of the following: (A) Direct obligations of the United States, including obligations issued or held in book-entry form on the books of the United States Department of the Treasury or obligations the timely payment of the principal of, and the interest on, which are fully guaranteed by the United States. (B) Obligations, debentures, notes, or other evidences of indebtedness issued or guaranteed by any of the following: (i) The Federal Home Loan Bank System. (ii) The Export-Import Bank of the United States. (iii) The Federal Financing Bank. (iv) The Government National Mortgage Association. (v) The Farmers Home Administration. (vi) The Federal Home Loan Mortgage Corporation of the Federal Housing Administration. (vii) Any agency, department, or other instrumentality of the United States if the obligations are rated in one of the two highest rating categories of each rating agency rating those obligations. (C) Bonds of the State of California or of any county, city and county, or city in this state, if rated in one of the two highest rating categories of each rating agency rating those bonds. (D) Commercial paper of finance companies and banking institutions rated in one of the two highest categories of each rating agency rating those instruments. (E) Repurchase agreements fully secured by collateral security described in subparagraph (A) or (B), as evidenced by an opinion of counsel, if the collateral is held by the provider or a third party during the term of the repurchase agreement, pursuant to the terms of the agreement, s [Text truncated for display. Full text available on Congress.gov.]