Senate committee advances bill requiring refund sequencing for life‑care entrance fees after residents vacate

The Senate Finance Committee on March 21 voted to advance House Bill 23‑70, legislation intended to provide greater certainty for residents and estates seeking refunds of refundable entrance fees at continuing care (life‑care) facilities.

What the bill would do: As amended in committee, the bill requires a facility that offers a refundable entrance fee as part of a life‑care contract to assign a vacated unit a sequential refund number within 60 days of receiving the resident’s notice to vacate. Refunds would be issued in the order of those sequential numbers as units are resold; the amendment removed a draft requirement that facilities restore the unit to original condition before assigning a sequential number and made the new sequencing requirement apply prospectively rather than retroactively.

Why supporters proposed the change: Sponsors and witnesses said the measure addresses cases where residents or their estates have waited years for an entrance fee refund after vacating a unit. Witnesses and an ABC15 investigation described multiple examples where a unit sat vacant for several years and families received refunds only after media attention. Supporters said sequencing provides a predictable, first‑in/first‑out mechanism so seniors can better plan and estates can resolve affairs.

Industry concerns and responses: Providers said the life‑care finance model depends on a pooled capital fund: new entrance fees replace refunded monies, and the fund underwrites long‑term operations and bond obligations. Industry representatives testified that a forced short refund window could strain capital and jeopardize care or financing; they voiced support for disclosure requirements and urged solutions that would not destabilize facilities. After negotiations, the committee adopted a three‑page chairman’s amendment that removed retroactive elements and preserved existing contract terms for providers that already use fixed refund windows.

Committee action and outcome: The committee adopted the chairman’s amendment and returned HB 23‑70 with a due‑pass recommendation by recorded vote. The committee recorded the vote in favor of advancement as 5‑2. Supporters said they will continue working with providers and consumer advocates to refine language on disclosure, marketing and operational safeguards before the bill reaches the floor.

Next steps: The bill proceeds to the full Senate calendar. Sponsor and industry representatives told the committee they expect additional negotiations on disclosure language and options for allowing facilities to demonstrate alternative mechanisms that are at least as favorable to residents.