CA Health & Safety Code Section 1575.1

(a)

(1) Each applicant for a license to operate an adult day health care center shall disclose to the department the name and business address of each general partner if the applicant is a partnership, or each director and officer if the applicant is a corporation, and each person having a beneficial ownership or control interest of 5 percent or more in the applicant corporation, company, or partnership.

(2)

If any person described in paragraph (1) has served or currently serves as an administrator, general partner, trustee or trust applicant, sole proprietor of any applicant or licensee who is a sole proprietor, executor, or corporate officer or director of, or has held a beneficial ownership or control interest of 5 percent or more in, any health facility as defined in Section 1250, adult day health care center, residential care facility for the elderly, home health agency, clinic, or community care facility licensed pursuant to Chapter 3 (commencing with Section 1500), the applicant shall disclose the relationship to the department, including the name and current or last address of the health facility, adult day health care center, residential care facility for the elderly, home health agency, clinic, or community care facility and the date the relationship commenced and, if applicable, the date it was terminated.

(3)

(A) If the center is operated by, or proposed to be operated in whole or in part under, a management contract, the names and addresses of any person or organization, or both, having an ownership or control interest of 5 percent or more in the management company shall be disclosed to the department.

(B)

This paragraph shall not apply if the management company has submitted an application for licensure with the department and has complied with paragraph (1).

(4)

If the applicant or licensee is a subsidiary of another organization, the information shall include the names and addresses of the parent organization of the subsidiary and the names and addresses of any officer or director of the parent organization.

(b)

The information required by subdivision (a) shall be provided to the department upon initial application for licensure, and upon payment of the annual renewal licensure fee.

(c)

Failure to comply with subdivision (a) or (b) may result in action to revoke or deny a license. The information required by subdivisions (a) and (b) shall be made available to the public upon request, and shall be included in the public file of the center.

(d)

On or after January 1, 2002, no person may acquire a beneficial or control interest of 5 percent or more in any corporation, company, or partnership licensed to operate an adult day health care center or in any management company under contract with a licensee of an adult day health care center, nor may any person become an officer or director of, or a general partner in, a corporation, partnership, or management company of this type without the prior written approval of the department. Each application for departmental approval pursuant to this subdivision shall include the information specified in subdivision (a) with regard to the person for whom the application is made.

(e)

The department may deny approval of a license application or of an application for approval under subdivision (d) or revoke a license if a person named in the application, as required by this section, was suspended as a Medi-Cal provider or excluded as a medicaid or Medicare provider, was an officer, director, general partner, or owner of a 5 percent or greater beneficial or control interest in a licensee of, or in a management company under contract with a licensee of, a health facility, community care facility, residential care facility for the elderly, home health agency, clinic, or adult day health care center at a time when one or more violations of law were committed therein that resulted in suspension or revocation of its license, or at a time when a court-ordered receiver was appointed pursuant to Section 1327, or at a time when a final medicaid decertification action was taken under federal law. However, the prior suspension, revocation, or court-ordered receivership of a license shall not be grounds for denial of the application if the applicant shows to the satisfaction of the department that both of the following conditions exist:

(1)

The person in question took every reasonably available action to prevent the violation or violations that resulted in the disciplinary action.

(2)

The person in question took every reasonably available action to correct the violation or violations once he or she knew, or with the exercise of reasonable diligence should have known, of the violation or violations.

(f)

No application shall be denied pursuant to this section until the department provides the applicant with notice in writing of grounds for the proposed denial of application and affords the applicant an opportunity to submit additional documentary evidence in opposition to the proposed denial.

(g)

This section shall not apply to a bank, trust company, financial institution, title insurer, controlled escrow company, or underwritten title company to which a license is issued in a fiduciary capacity.