SB 125

Substitute Senate Bill No. 125
  Public Act No. 26-103
AN ACT REQUIRING NURSING HOMES TO ANNUALLY REPORT
CERTAIN OWNERSHIP INFORMATION REGARDING INVESTMENT
ENTITIES, ACQUIRE, IF FEASIBLE, A SURETY BOND OR A
SIMILAR FORM OF SECURITY IN AN AMOUNT EQUAL TO NINETY
DAYS OF OPERATING COSTS, MAINTAIN FULL GOVERNANCE
CONTROL AND AUTHORITY OVER NURSING HOME ASSETS AND
ACTIVITIES AND ANNUALLY ATTEST THAT NO INVESTMENT
ENTITY HAS CONTROL OVER NURSING HOME RESIDENT
HEALTH, SAFETY OR CARE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
   Section 1. (NEW) (Effective October 1, 2026) (a) As used in this section,
(1) "nursing home" means a nursing home, as defined in section 19a-490
of the general statutes, that has a provider agreement with the state to
provide services to recipients of benefits obtained through Title XIX of
the Social Security Amendments of 1965; and (2) "investment entity"
means (A) any entity that collects capital investments from individuals
or entities and purchases, as a parent company or through another
entity that the entity completely or partially owns or controls, a direct
or indirect ownership share of a nursing home, or (B) a real estate
investment trust, as defined in 26 USC 856, as amended from time to
time.
  (b) Not later than February 15, 2027, and annually thereafter, each
nursing home shall provide the Commissioner of Social Services with
  Substitute Senate Bill No. 125
the following information: (1) The name and business address of all
investment entities with a beneficial ownership interest of five per cent
or more in the nursing home and a statement of whether such
investment entity is an individual, partnership, corporation or other
legal entity; (2) the names of the officers, directors, trustees or managing
and general partners of any such investment entity and the number of
shares owned or ownership percentage of the investment entity held by
each partner; (3) if such investment entity is a corporation that is
incorporated in another state, a certificate of good standing from the
Secretary of the State of the state of incorporation; (4) the audited and
certified financial statements of the investment entity, if applicable,
including, but not limited to, (A) a balance sheet as of the end of the
most recent fiscal year, (B) income statements for the most recent fiscal
year, (C) a cash flow statement from the most recent fiscal year, and (D)
an estimate of financing expenses, legal expenses, land costs, marketing
costs and other similar costs that the investment entity expects to incur
or become obligated to pay within one year of acquisition of the nursing
home; (5) a description of any mortgage loan or other financing used for
the initial acquisition or construction of the nursing home, subsequent
refinancing of any such debt, and any subsequent financing of
additional debt incurred, including, but not limited to, the terms and
costs of any such mortgage loan or other financing; (6) a copy of the
purchase agreement for the nursing home and any agreement providing
for the transfer of ownership interests in the nursing home, including,
but not limited to, the real estate agreement, asset agreement, stock
agreement or other similar agreement; and (7) any documentation
regarding escrow or contingency accounts.
   (c) The Commissioner of Social Services may impose a civil penalty
of one thousand dollars per day on any nursing home that fails to
provide any information required pursuant to subsection (b) of this
section not later than thirty days after the date such information is due,
provided the commissioner provides written notice to the nursing home
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of its failure to provide such information not later than fourteen days
after the date such information is due. A nursing home may request a
fair hearing on the assessment of any such civil penalty as an aggrieved
person pursuant to section 17b-60 of the general statutes.
   (d) (1) The Commissioner of Social Services shall identify any security
instruments, including, but not limited to, surety bonds, escrow
accounts or insurance-related products, that may be available to a
nursing home to guarantee ninety days of such nursing home's
operating costs payable to the state in the event that such nursing home
enters a receivership, initiates an emergency closure or experiences
imminent financial distress. Not later than January 1, 2028, the
commissioner shall communicate to nursing homes any security
instruments identified pursuant to the provisions of this subdivision in
a form and manner prescribed by the commissioner. The provisions of
this subsection shall not apply if the commissioner fails to identify any
such security instruments, or determines that such security instruments
are not financially feasible.
   (2) On and after July 1, 2028, each nursing home subject to a beneficial
ownership interest of an investment entity of five per cent or more shall,
at the time of application for or renewal of a nursing home license,
demonstrate to the satisfaction of the Commissioner of Social Services
that the nursing home has secured a surety bond or similar form of
security in favor of the state in an amount equal to ninety days of
operating costs for the nursing home and that such bond or similar form
of security shall remain in effect for the duration of the initial license
term and any renewal term.
   (3) On and after July 1, 2028, each nursing home subject to a beneficial
ownership interest of an investment entity of five per cent or more shall,
at the time of application for or renewal of a nursing home license,
submit to the Department of Public Health a copy of the surety bond or
similar form of security required under subdivision (2) of this
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subsection.
   (e) On and after February 1, 2028, each entity holding a nursing
home's license shall maintain full governance control and authority over
such nursing home's assets and activities, including, but not limited to,
all clinical, operational, managerial, financial and human resources
matters.
   (f) Not later than February 1, 2028, and annually thereafter, each
nursing home shall submit to the Commissioner of Public Health, in a
form and manner prescribed by the commissioner, an attestation that no
investment entity has control over nursing home resident health, safety
or care.
   (g) Notwithstanding the provisions of subsection (e) of this section, if
a nursing home anticipates that it will not be able to comply with the
provisions of said subsection, the nursing home may, not later than six
months before becoming subject to the provisions of said subsection,
apply to the Commissioner of Social Services, in a form and manner
prescribed by the commissioner, for a one-year waiver from the
provisions of said subsection. The commissioner may request any
information or documentation deemed necessary to assess any such
application and place any terms or conditions deemed necessary by the
commissioner in granting any such waiver. The commissioner shall not
grant a waiver pursuant to the provisions of this subsection unless the
commissioner determines that the granting of such waiver will benefit
resident care, maintain access to resident care or improve operational
stability.
   (h) The Commissioner of Public Health may impose a civil penalty of
up to two thousand dollars per violation on any nursing home that fails
to provide an attestation required under subsection (f) of this section.
  (i) A nursing home shall, not later than ten business days after receipt
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of an order from the commissioner imposing a civil penalty under
subsection (h) of this section, submit a request in writing to the
Department of Public Health for a hearing to contest the order. If the
nursing home fails to submit such a request not later than ten business
days after such receipt, the order shall be deemed a final order of the
department, effective upon the expiration of such ten business days.
After receipt of a timely request for a hearing, the department shall set
the matter down for a hearing as a contested case in accordance with the
provisions of chapter 54 of the general statutes.
   Sec. 2. (Effective from passage) The Commissioner of Social Services, in
consultation with the Commissioner of Public Health, shall review and
evaluate the (1) nursing home disclosures provided in accordance with
the provisions of section 1 of this act, (2) quality of care at nursing homes
that are subject to a beneficial ownership interest of an investment entity
compared to the quality of care at nursing homes under other
ownership structures, and (3) implications of prohibiting a person or
entity who acquires ownership of real property on which a licensed
nursing home operates from selling, transferring or otherwise
conveying such property within five years of such acquisition without
written approval from the Commissioner of Public Health. Not later
than February 15, 2028, the Commissioner of Social Services shall report
the results of such review, in accordance with the provisions of section
11-4a of the general statutes, to the joint standing committees of the
General Assembly having cognizance of matters relating to human
services, public health, appropriations and the budgets of state agencies,
and aging.
 Governor's Action:
 Approved June 4, 2026
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