Section 151.4. Statement in support of application

(a) Each applicant shall file a statement in support of an application for a certificate of authority, which shall contain the following information and appendices:

(1) Occupancy status. A description of whether the facility is ready for occupancy. If the facility is already occupied and in operation, indicate the date the facility commenced business. If the facility is under construction, indicate the estimated construction completion date.

(2) Financing of facility. A statement detailing existing or proposed mortgages, liens, security interests or loan commitments on the real property of the facility. Provide the name and address of mortgagees or other lenders and a copy of mortgages, liens, security interests or loan commitment documents. If other long term financing arrangements have been arranged or are contemplated, such as tax-free debentures, a complete description of the arrangement shall be provided and all pertinent contracts and documents shall be attached. If the facility is subject to a lease agreement, provide the name and address of interested parties and a copy of a lease.

(3) Fiscal year. A specification of the applicant’s fiscal year.

(4) Tax exempt status. If the applicant claims tax exempt status under the Internal Revenue Code of 1954 (26 U.S.C.A. § § 1—9602) provide a ruling or other document evidencing qualification for tax exempt status. If the applicant claims it is not subject to the capital stock tax or corporate net income tax imposed by the Tax Reform Code of 1971 (72 P. S. § § 7101—10004) provide the appropriate documentation demonstrating qualification for the exemption.

(5) Feasibility study. If operation of a facility has not yet commenced, provide a feasibility study prepared to secure financing for the proposed facility. If a feasibility study was not required to obtain financing, a study is not required to be produced under this subsection. The study should include:

(i) A description of the proposed facility including location, size, anticipated completion date and proposed construction program.

(ii) An identification and evaluation of the potential market, including a demographic and economic profile of the population in the facility’s market area.

(iii) An identification of other existing or proposed facilities in the potential market area, including, if available, the occupancy rate for existing facilities for the last 3 years.

(iv) An estimate of net receipts from entrance fees, other than those included in the statement of source and application of funds, less estimated entrance fee refunds and a description of the actuarial bases and methods of calculation for the projection of entrance fee receipts.

(v) The name and address of the person who prepared the feasibility study and the experience of the person in preparing similar studies or otherwise consulting in the field of continuing care or related health care fields.

(6) Financial analysis. A financial analysis prepared for the purpose of determining that the facility has—or if the facility is proposed, will have—sufficient revenue and funds, including reserves. The analysis shall include a cash flow projection, a review of the adequacy of current pricing structures, and an examination of the long-term relationship between the facility’s assets and liabilities. The analysis shall be prepared by either a qualified actuary or a certified public accountant.

(7) Affiliates. An organizational chart describing the relationship between the applicant and its affiliates, indicating the state of domicile of the entity and the primary business of each.

(8) Previous licenses. A statement indicating whether the applicant has ever applied for a certificate of authority for a facility in this Commonwealth or sought licensure in another jurisdiction. Indicate the status of the application—issued, refused, or pending. If a previous license was issued, provide the name and address of the facility licensed, the name of the issuing authority, the date of issuance, and the date of and reason for termination.

(9) Organizational filings. The documents described in this paragraph pertaining to the applicant shall be attached to the statement:

(i) If the applicant is a corporation, a copy of the charter shall be attached.

(ii) If the applicant is a partnership or other unincorporated association, a copy of the partnership agreement, articles of association or other membership agreement shall be attached.

(iii) If the applicant is a trust, a copy of the trust agreement or instrument shall be attached.

(iv) If the applicant uses a trade name which is required to be registered under 54 Pa.C.S. § § 301—332 (relating to Fictitious Names Act), a copy of the fictitious name registration shall be attached.

(10) Entrance fees. The relevant documents described in this paragraph shall be attached to the statement.

(i) If the applicant proposes to use an entrance fee escrow account, provide the name and address of the escrow agent and a copy of the escrow agreement.

(ii) If the applicant proposes to provide a letter of credit in lieu of using an entrance fee escrow account, identify the name and address of the financial institution providing the letter of credit, and provide a copy of the letter of credit executed in favor of the Commissioner.

(A) The letter of credit shall stipulate that the beneficiary need only draw a sight draft and present it to obtain the funds, and that no other document need be presented.

(B) The letter of credit shall indicate that it is not subject to conditions or qualifications outside the letter of credit.

(C) The letter of credit shall contain a clause which prevents the expiration of the letter of credit without notice—minimum 30 days—from the issuer to the Commissioner.

(iii) If the applicant proposes to deposit negotiable securities in lieu of using an entrance fee escrow account, acceptable negotiable securities executed in favor of the Commissioner shall be deposited at the time an application for a certificate of authority is made.

(iv) If the applicant proposes to post a bond issued by a surety company authorized to do business in this Commonwealth in lieu of using an entrance fee escrow account, provide the name and address of the surety company and a copy of the surety bond.

(11) Biographical affidavits. Biographical affidavits shall be filed by the following persons:

(i) For applicants, the managers or proposed managers shall file. If the manager is a corporation, provide biographical affidavits for the board of directors and all officers. If the manager is a partnership, provide biographical affidavits for the managing or general partners.

(ii) For corporate applicants, the corporation’s board of directors and officers shall file.

(iii) For partnership applicants, managing or general partners shall file.

(iv) For unincorporated association applicants, officers and directors shall file.

(v) For trust applicants, administrators or trustees shall file.

(b) In addition to the information described in subsection (a), applicants may be requested to provide the Department with other pertinent material that is deemed necessary to complete the Department’s review of the application.

The provisions of this § 151.4 adopted March 15, 1985, effective March 16, 1985, 15 Pa.B. 1051.

Notation

Cross References

This section cited in 31 Pa. Code § 151.3 (relating to certificates of authority).