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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
entrance fee; refunds; time frame
Purpose
Effective January 1, 2026, requires a facility in which life care services are provided, within 60 days after the facility receives a resident's notice to vacate, to assign the vacated unit a sequential refund number and provide refunds in order based on sequential number, with certain exceptions.
Background
A life care provider is a person who is issued a permit by the Department of Insurance and Financial Institutions (DIFI) to provide services pursuant to a life care contract. A life care contract is a contractual agreement between a life care provider and a person to provide the person, for the duration of the person's life or for at least one year, with nursing, medical or health-related services in addition to board and lodging for the person in a facility, or nursing, medical or health-related services in the person's private residence with the right to future access to such services, board and lodging in a facility, conditioned on the transfer of an entrance fee to the life care provider in addition to or in lieu of the payment of regular periodic charges for the care and services involved.
A facility is a place in which a life care provider provides nursing, medical or health-related services to a resident, in addition to board and lodging, for a term over one year or for life pursuant to a life care contract and does not include a life care contract holder's private residence. An entrance fee is an initial or deferred transfer of money or property made or promised to be made to a life care provider by a person entering into a life care contract, which assures a resident or contract holder of services pursuant to a life care contract (A.R.S.§ 20-1801).
As a condition for issuing a life care provider permit, the Director of DIFI must require the life care provider to establish an escrow account in which the entire amount of an entrance fee is placed in escrow with a bank, trust company or other escrow agent approved by the Director of DIFI. An entrance fee held in an escrow account may be returned by the escrow agent to the person who made the payment to the provider at any time on receipt of a notice from the lifecare provider that the person is entitled to a refund of the entrance fee (A.R.S. § 20-1804).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires a facility in which life care services are provided, within 60 days after the facility receives a resident's notice to vacate, to assign the vacated unit a sequential refund number among all the available units with refundable entrance fees and provide refunds in order based on sequential number if:
a) the life care contract provides for a refundable entrance fee; or
b) the terms under a life care contract for issuing a sequential refund number are fulfilled.
2. Exempts, from the sequential refund requirement, a life care contract that either:
a) establishes a maximum waiting period of not more than two years before the facility in which life care services are provided is required to provide a refund; or
b) was executed before January 1, 2026.
3. Makes technical changes.
4. Becomes effective on January 1, 2026.
Amendments Adopted by Committee
1. Removes the requirement for a unit to be restored to its original condition by a facility in which life care services are provided for the facility to assign a sequential refund number.
2. Adds, to the exemptions from the sequential refund requirement, life care contracts that were executed before January 1, 2026.
3. Removes the authorization for a facility to restore the unit to its original condition, impose monthly fees until all personal property is removed and remove any personal property on the 21st day following the resident's notice to vacate.
4. Makes technical and conforming changes.
House Action Senate Action
COM 2/4/25 DP 8-2-0-0 FIN 3/24/25 DPA 5-2-0
3rd Read 2/18/25 47-13-0
Prepared by Senate Research
March 26, 2025
MG/AL/ci