Section 87.3 - Project development

87.3 Project development.

(a) This section shall apply to the project development period from the inception of a nursing home company to the final financing occupancy date declared by the State Commissioner of Health.

(b) All professional service contracts and all consultant contracts shall require the written approval of the State Department of Health and all of said contracts shall be in writing and executed by the parties thereto:

(1) Prior to execution, drafts of all architectural and engineering contracts shall be submitted to the State Department of Health for approval. The architect or engineer shall comply with all of the State Department of Health requirements including the provision of acceptable professional liability insurance, the assurance of continuity of professional services, the satisfactory evidence of the ability to perform the architectural services required, and agreement to attend conferences and provide professional services as required by the State Department of Health.

(2) Prior to execution, drafts of all attorney retainers shall be submitted to the State Department of Health for review and approval. The attorney shall comply with State Department of Health requirements including the assurance of continuity of professional services and the agreement to attend conferences and provide professional services as required by the State Department of Health.

(3) Prior to execution, drafts of all written consultant contracts relating to the development period shall be submitted to the State Department of Health for review and approval. The consultant shall comply with all the State Department of Health requirements including the assurance of continuity of consultive services, the satisfactory evidence of ability to perform the consultive services required, and agreement to attend conferences and provide consultive services as required by the State Department of Health.

(4) Professional service contracts and consultant contracts shall set forth fee and payment provisions in an amount no greater than contained in the fee guidelines approved by the State Department of Health.

(c) A nursing home company shall obtain exempt organization certificates from the Federal Internal Revenue Service as a hospital under section 501(c)(3) and statements of exemption from the State Department of Taxation and Finance.

(d) A nursing home company shall provide acceptable topographical surveys of the project site certified by a licensed surveyor to the company, the company's title insurance company and the State Department of Health in accordance with the requirements of the State Department of Health. A company shall also provide title reports from an acceptable title insurance company stating that the company may take title to its property free and clear of all liens as required by the State Department of Health. Updating of surveys by letter certification from the surveyor may be used providing there is no change from the exterior physical condition of the project as shown on the previous survey.

(e) Application by a company for nursing home development funds shall be on a form required by the State Commissioner of Health, be limited to eligible items and include such certifications and evidence of payment as may be required. The State Commissioner of Health may approve such applications only to the extent of nursing home development funds available.

(f) A nursing home company shall submit an acceptable schedule of estimated development costs and capital requirements, an acceptable schedule of annual expenses and income, an acceptable supporting schedule of all estimated development costs and capital requirements and annual expenses and income, an acceptable project cost analysis schedule and such other project statistics, space requirements and financial data as the State Department of Health may require.

(g) Construction contracts shall include the standard form of agreement* between owner and contractor as amended by the State Department of Health which includes the required "Modification to Standard Form of Agreement Between Owner and Contractor", the "Supplementary Conditions of the Contract for Construction" and such further terms, provisions and documents as may be required by the Department of Health. A company shall conform with the bid requirements and procedures of the State Department of Health providing for competitive bidding by contractors or subcontractors and the provisions of "Supplementary Instructions to Bidders".*

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*FOOTNOTE: (Not filed with the Department of State.)

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(h) Payment and performance bonds acceptable to the State Department of Health shall be required to insure the faithful payment for and performance of labor and the furnishing of materials for all contracts.

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