Florida Regulations 69O-193.050: Minimum Liquid Reserve Requirement
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(1) A Minimum Liquid Reserve (MLR) Calculation shall be filed with the Office, on or before May 1 of each year if the provider’s fiscal year end is December 31 or within 120 days of the last day of the fiscal year of the provider if the provider has declared a fiscal year other than the calendar year, on Form OIR-A3-477, “”Minimum Liquid Reserve (MLR) Calculation,”” effective 7/20, hereby incorporated by reference and available at https://www.flrules.org/Gateway/reference.asp?No=Ref-14462. The filings shall be submitted electronically at https://www.floir.com/iportal.
(2) The Office may require a recalculation of the minimum liquid reserve requirement and resubmission of Form OIR-A3-477 in the event of additional long-term financing or other occurrences resulting in a change to the aggregate amount of all principal and interest payments due during the fiscal year on any mortgage loans or other long-term financing or a change to all leasehold payments and all costs related to such payments financing of the facility. Any increase in required minimum liquid reserves must be funded not later than 61 days after the minimum liquid reserve calculation is filed.
(3) For purposes of the MLR requirement, long-term financing includes, lease payments, mortgage payments, the long-term portion of any construction loan, and any long-term debt between affiliates or controlling parties of the provider that relate to the real property or fixtures of a facility.
(4) Where a provider has elected to fund the MLR upon release of entrance fees as provided by Section 651.023(6)(d), F.S., the funds shall be deposited directly from the entrance fee account into MLR accounts.
(5) A provider shall have and maintain reserves for property taxes as provided in Florida Statutes § 651.035, even if there is no long-term debt or financing on the facility.
(6) To request Office approval of a withdrawal of MLR funds, a provider must file Form OIR-A3-1284, “”Request for Withdrawal from Minimum Liquid Reserves,”” effective 7/20, hereby incorporated by reference and available at https://flrules.org/Gateway/reference.asp?No=Ref-14463. The filing shall be submitted electronically at https://www.floir.com/iportal.
(7) If a provider, or its escrow agent or trustee, intends to use funds from a debt service reserve that is included in computing a provider’s minimum liquid reserve pursuant to Section 651.035(1)(b), F.S., rather than filing Form OIR-A3-1284 as required in subsection (6) above, the following process applies:
(a) The provider, or its escrow agent or trustee if so authorized in the agreement under which such debt service reserve is held, shall submit the documents listed below.
1. An affidavit, sworn to by an officer or director of the provider, stating that the provider anticipates being unable to make its scheduled debt service payment and a withdrawal from the debt service reserve included in the minimum liquid reserves pursuant to Section 651.035(1)(b), F.S., is required to avoid a payment default. The affidavit shall include all of the following information:
a. The amount of the payment;
b. The payment due date;
c. The maximum amount of the withdrawal needed to make the payment;
d. The date the anticipated date of the withdrawal;
e. The account(s) from which the withdrawal will be made, which should match the account information and escrow statements previously provided to the Office; and
f. If there is a discrepancy in this account information, a written explanation of the discrepancy and any relevant documentation at the time of filing.
2. A document providing the following information with respect to the effect of the withdrawal on the provider’s minimum liquid reserves and compliance with Florida Statutes § 651.035
a. A statement of whether the lender or trustee will require the provider to deposit additional funds in the debt service reserve to repay the amount withdrawn.
b. If the provider will be required to deposit additional funds in the debt service reserve to repay the amount withdrawn, the anticipated or proposed schedule for funding.
c. If the withdrawal will result in the provider being out of compliance with Florida Statutes § 651.035, the provider shall submit a preliminary plan or anticipated timeline for coming into compliance. If the provider intends to work with a consultant to establish a plan, as proscribed in its financing documents, the provider should provide a brief explanation of that process and the anticipated date that such a plan will be completed.
(b) The request must be made at least 30 days before the anticipated date of the withdrawal.
(c) The Office will approve requests that contain all of the components specified in paragraph (7)(a) within 30 days of filing.
(d) The Office’s approval of a withdrawal from a debt service reserve included in the minimum liquid reserves pursuant to Section 651.035(1)(b), F.S., does not constitute approval of the plan submitted pursuant to sub-subparagraph (7)(a)2.c. above.
(e) The filing shall be submitted electronically at https://www.floir.com/iportal.
Rulemaking Authority 651.015(3), 651.026(2)(d), 651.035(9) FS. Law Implemented 651.026, 651.035 FS. History-New 7-16-92, Formerly 4-193.050, Amended 3-12-20, 7-21-22.
Terms Used In Florida Regulations 69O-193.050
- Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Trustee: A person or institution holding and administering property in trust.
(3) For purposes of the MLR requirement, long-term financing includes, lease payments, mortgage payments, the long-term portion of any construction loan, and any long-term debt between affiliates or controlling parties of the provider that relate to the real property or fixtures of a facility.
(4) Where a provider has elected to fund the MLR upon release of entrance fees as provided by Section 651.023(6)(d), F.S., the funds shall be deposited directly from the entrance fee account into MLR accounts.
(5) A provider shall have and maintain reserves for property taxes as provided in Florida Statutes § 651.035, even if there is no long-term debt or financing on the facility.
(6) To request Office approval of a withdrawal of MLR funds, a provider must file Form OIR-A3-1284, “”Request for Withdrawal from Minimum Liquid Reserves,”” effective 7/20, hereby incorporated by reference and available at https://flrules.org/Gateway/reference.asp?No=Ref-14463. The filing shall be submitted electronically at https://www.floir.com/iportal.
(7) If a provider, or its escrow agent or trustee, intends to use funds from a debt service reserve that is included in computing a provider’s minimum liquid reserve pursuant to Section 651.035(1)(b), F.S., rather than filing Form OIR-A3-1284 as required in subsection (6) above, the following process applies:
(a) The provider, or its escrow agent or trustee if so authorized in the agreement under which such debt service reserve is held, shall submit the documents listed below.
1. An affidavit, sworn to by an officer or director of the provider, stating that the provider anticipates being unable to make its scheduled debt service payment and a withdrawal from the debt service reserve included in the minimum liquid reserves pursuant to Section 651.035(1)(b), F.S., is required to avoid a payment default. The affidavit shall include all of the following information:
a. The amount of the payment;
b. The payment due date;
c. The maximum amount of the withdrawal needed to make the payment;
d. The date the anticipated date of the withdrawal;
e. The account(s) from which the withdrawal will be made, which should match the account information and escrow statements previously provided to the Office; and
f. If there is a discrepancy in this account information, a written explanation of the discrepancy and any relevant documentation at the time of filing.
2. A document providing the following information with respect to the effect of the withdrawal on the provider’s minimum liquid reserves and compliance with Florida Statutes § 651.035
a. A statement of whether the lender or trustee will require the provider to deposit additional funds in the debt service reserve to repay the amount withdrawn.
b. If the provider will be required to deposit additional funds in the debt service reserve to repay the amount withdrawn, the anticipated or proposed schedule for funding.
c. If the withdrawal will result in the provider being out of compliance with Florida Statutes § 651.035, the provider shall submit a preliminary plan or anticipated timeline for coming into compliance. If the provider intends to work with a consultant to establish a plan, as proscribed in its financing documents, the provider should provide a brief explanation of that process and the anticipated date that such a plan will be completed.
(b) The request must be made at least 30 days before the anticipated date of the withdrawal.
(c) The Office will approve requests that contain all of the components specified in paragraph (7)(a) within 30 days of filing.
(d) The Office’s approval of a withdrawal from a debt service reserve included in the minimum liquid reserves pursuant to Section 651.035(1)(b), F.S., does not constitute approval of the plan submitted pursuant to sub-subparagraph (7)(a)2.c. above.
(e) The filing shall be submitted electronically at https://www.floir.com/iportal.
Rulemaking Authority 651.015(3), 651.026(2)(d), 651.035(9) FS. Law Implemented 651.026, 651.035 FS. History-New 7-16-92, Formerly 4-193.050, Amended 3-12-20, 7-21-22.