Section 33.404 - Loan Reserve Fund Escrow Account(a) Each provider shall establish and maintain a loan reserve fund escrow account with a bank or trust company located in Texas, as escrow agent. The provider must maintain the funds deposited in an account separate from the provider's business account. The account must be fully covered by federal deposit insurance or fully secured by the United States Government.(b) The amount required to be maintained in the loan reserve fund escrow account is equal to the total of all principal and interest payments due during the next 12 months on all first mortgage loans, other long-term financing arrangements for the facility, or 12 months of lease payments if the provider and facility are operating under a lease agreement. If no principal payments or lease payments are due during the next 12 months, the provider shall maintain in the loan reserve fund escrow account an amount equal to interest payments due during the next 12 months.(c) Until the loan reserve fund escrow account is fully funded, the provider shall deposit the funds listed in paragraphs (1) and (2) of this subsection into the loan reserve fund escrow account:(1) Funds released under § 33.403 of this title (relating to Release of Funds from the Entrance Fee Escrow Account to the Provider); and(2) Funds remitted under binding continuing care contracts, when an entrance fee escrow account is not required.(d) The provider may meet the loan reserve fund escrow account requirements in whole or in part by establishing other reserve funds held to meet long-term financing obligations, if the total amount equals or exceeds the amount required by subsection (b) of this section. The provider shall submit to the department sufficient evidence that the requirement has been met.28 Tex. Admin. Code § 33.404
The provisions of this §33.404 adopted to be effective March 14, 1996, 21 TexReg 1770; amended to be effective March 9, 2009, 34 TexReg 1608