Moratorium on Initial Licensing of Homes for the Aged and Disabled

Subject:

Requested By: Elizabeth Coston, Chief Licensure and Certificate Section Division of Facility Services Department of Human Resources

Question: Does the moratorium provision found in Section 20.1 of Chapter 1282 of the 1981 Session Laws prohibit the relicensing of an existing facility to a new owner or administrator while the moratorium is in effect?

Conclusion: No.

Chapter 1282 of the 1981 Session Laws is the state budget for the fiscal year 1982-83, passed during the legislative session in June, 1982. Section 20.1 of this act is captioned "Limitation on Rest Homes Beds," and provides:

"(a) Findings of Fact. — The General Assembly of North Carolina finds:

(1)

That the orderly development of homes for the aged and disabled will result in less institutionalization of the elderly and thus lower public expenditures; and

(2)

That additional time is needed to plan and develop less costly home health alternatives to institutional care and adequate standards for the orderly development of homes for the aged and disabled.

(b)

Notwithstanding any other provision of law, the Department of Human Resources shall not accept applications received after July 1, 1982, or before February 1, 1983, for initial licensure of:

(1)

a home for the aged and disabled as defined by G.S. 131D-2(a)(7), to be licensed under chapter 131D of the General Statutes;

(2)

a home for the aged and disabled operated in conjunction with a nursing home to be licensed under G.S. 130-9(e)(5); or

(3)

additional facilities, including beds, for any of the homes mentioned in subdivisions 1 and 2 above."

In construing this provision, it is important to examine the legislative findings of fact in subsection (a), emphasizing the need for "orderly development" of homes for the aged. These findings evidence an intention to establish a period in which standards for future development of homes for the aged and disabled, as well as alternative methods of care, can be developed. It is noteworthy that there is no finding of an oversupply of homes for the aged and disabled. Thus, the findings of subsection (1) seem to limit the application of this moratorium to the development of new homes for the aged and disabled.

This is also the basic tone of subsection (b), which contains the operative language establishing the moratorium. It provides that the Department of Human Resources shall not accept applications for "initial licensure" of homes for the aged and disabled operated in conjunction with nursing homes, freestanding homes for the aged and disabled, or additional facilities at existing homes. Once again, the emphasis is upon limiting the expansion of home for the aged facilities. There is no apparent indication of an intent to actually reduce the number of existing facilities.

Thus, neither the underlying legislative purpose, nor the specific language creating the moratorium, indicates any intention to have it apply beyond the licensing of new homes for the aged or additional facilities in existing homes. The only complication occurs when the term "initial licensure" is read in light of the administrative rules governing these facilities. Although the statute authorizing the licensure of homes for the aged speaks of licensing the facility, the administrative rules contemplate that licenses will be issued to a specific administrator or administrators for each facility. Compare, G.S. 131-D2(b) with 10 NCAC 42D .1815-.1817. A license issued to a new owner or administrator for an existing facility might be thought of as an initial license which would be subject to the moratorium.

This interpretation runs against the apparent legislative intent to simply provide for the orderly future development of homes for the aged and disabled, rather than reduce the number of existing facilities. In addition, the legislature must be presumed to be acting in contemplation of its statutes, which in this instance speak of the licensing of facilities. G.S. 131D-2(b). Measured against this statutory language regarding licensure of these facilities, the term "initial licensure" must be interpreted to refer to facilities which were unlicenced at the time of the effective date of the moratorium. For these reasons, the administrative rules governing licensing of homes for the aged and disabled do not effect the conclusion reached in this opinion.

An examination of the specific language of the moratorium on "initial licensure" of homes for the aged and disabled reveals that it is intended to restrict the expansion of these facilities while planning for their orderly development and the creation of alternative facilities goes forward. There is no apparent intent to restrict or affect the operation of existing facilities. In this context, it is clear that the moratorium does not affect changes of owners or administrators in existing facilities. Therefore, the Department of Human Resources may accept applications for relicensure of existing homes for the aged or disabled under new owners or administrators.

Rufus L. Edmisten Attorney General

William R. Shenton Assistant Attorney General