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HB 4728

DD FACILITY-ASSET MGMT COMPANY

104th Regular Session Introduced by Carol Ammons and 33 co-sponsors

Requires transparent asset management ownership/financing for certain Illinois care facilities, with upfront disclosures, notices for major asset moves, and anti-looting protection

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Bill Summary · HB 4728

HB4728 Summary – Illinois 104th General Assembly

Overview
- Bill: HB4728
- Session: 104th
- Jurisdiction: Illinois
- Principal aim: Require heightened transparency and governance safeguards around asset management company ownership structures in certain health and developmental disability facilities, with specific disclosure, notice, and anti-looting provisions. Treat violations as unlawful practices under the Consumer Fraud and Deceptive Business Practices Act. Applies across multiple licensing acts and related provider types, with similar rules implemented uniformly.

What is the bill trying to accomplish?
- To deter financial strategies that could distress facilities serving developmentally disabled individuals by requiring scrutiny of asset management ownership and related financial arrangements.
- To ensure public visibility of asset ownership, debt, fees, and staffing related to facilities and to require advance notice for major asset transactions or transfers of control.
- To empower regulatory agencies to monitor and enforce anti-looting or asset-stripping behaviors that could harm residents or service quality.

Key provisions and changes
1) General definition
- Introduces “Asset management company”: a firm managing and investing client funds across a broad range of asset classes (securities, real estate, funds, private equity, venture capital, etc.).

2) Expanded disclosure and reporting requirements (effective by Dec. 31, 2026 for multiple acts)
- Agencies affected:
- Community Living Facilities Licensing Act
- MC/DD Act
- ID/DD Community Care Act
- Community-Integrated Living Arrangements Licensure and Certification Act
- Child Care Act of 1969
- Related adult day service and developmental training services provisions

  • Required disclosures (initial licensure/certification and quarterly thereafter):
    • Whether the facility, its subsidiaries/affiliates/parent entities or contractual service providers are owned or managed within a fund owned/managed by an asset management company.
    • Asset management company details: size of assets under management; identities of individuals/institutions with interests; debt held by the provider and related entities; fees, payments, and rates charged by the asset management company and related entities; staffing counts (full-time/part-time and contractors) by job classification; representation by labor organizations where applicable.
    • Disclosures must be filed on forms prescribed by the respective Department/Agency.
  • Written notice and copies of agreements required for certain transactions (minimum 90 days prior) that would:
    • Sell, transfer, lease, encumber, or dispose of a material amount of assets; or
    • Transfer control, responsibility, or governance of assets/operations to another entity.

3) Prohibitions to prevent financial distress
- Facilities owned/managed within an asset management fund framework may not:
- Enter transactions that would place an excessive debt burden and risk financial distress.
- Issue debt-funded dividends; pay excessive management fees; or issue dividends in a way that risks the facility’s financial stability.

4) Enforcement and public disclosure
- Violations constitute unlawful practices under the Consumer Fraud and Deceptive Business Practices Act.
- Department to notify the Attorney General and relevant labor organizations upon violations.
- Violators must display a notice detailing the violation as prescribed by the Department.
- The Department must publish disclosures, notices, and agreements (and violations) on its public website.

5) Cross-cutting alignment and new sections by Act
- Adds new sections across the Mental Health and Developmental Disabilities Administrative Act, the MC/DD Act, the ID/DD Community Care Act, the Community Living Facilities Licensing Act, the Community-Integrated Living Arrangements Act, and the Child Care Act, each mirroring the asset-management disclosure and anti-looting framework.

Effective date
- Effective upon becoming law. Rules must be adopted by December 31, 2026; filings and notices thereafter follow the quarterly cadence.

Who is affected
- Licensees and operators of:
- Community Living Facilities (adult developmental facilities)
- MC/DD facilities
- ID/DD facilities
- Community-Integrated Living Arrangements (CILAs)
- Adult day services serving individuals with developmental disabilities
- Providers of adult developmental training services
- Child care institutions and group homes for children with developmental disabilities
- Asset management companies and any funds in which these facilities are invested or contained.

Potential impacts
- Increased transparency in ownership structures and financial arrangements.
- Enhanced regulatory oversight to prevent asset stripping and over-leveraging that could jeopardize resident care.
- Additional administrative burden for facilities to collect, verify, and periodically update complex disclosures.
- Public accountability through online disclosure of ownership, debts, fees, and transactions.
- Potential changes in financial governance and transaction planning for facilities tied to asset-management entities.

Notes for readers
- The bill emphasizes consumer-protection and anti-fraud posture by tying violations to the Consumer Fraud and Deceptive Business Practices Act and by mandating proactive disclosures and public reporting.
- Sponsored by Rep. Laura Faver Dias and multiple co-sponsors; reflects bipartisan interests in safeguarding vulnerable populations in Illinois care facilities.

Compiled from official sources — confirm details with the bill’s official record.

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