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⭒ New Developments

Governor Brown Signs Residential Care Ownership Suitability Law

For more information contact:

Pat McGinnis or Mike Connors

(415) 974–5171

Governor Jerry Brown signed AB 601 (Eggman) into law on Thursday. This bill establishes specific suitability requirements and requires applicants who are seeking a license to run an assisted living/residential care facilities for the elderly to submit information on ownership and prior ownership of any type of facility, in any state, including a history of compliance with applicable laws. AB 601 also requires the Department of Social Services to crosscheck applicant information with the Department of Public Health and allows DSS to deny or revoke a license for failure to disclose the required information.

Very limited suitability requirements are currently in place for new licensee applicants, and background information on new applicants for residential care for the elderly licenses is not crosschecked with other licensing agencies. For example, the owner of Valley Springs Manor in Castro Valley, who abandoned 19 RCFE residents to the care of a part-time cook and janitor in 2013, had a previous history of hundreds of thousands of dollars in fines owed to the federal and state licensing agencies for deficiencies and citations when she owned four California nursing homes. Yet, she was able, ten years later, to apply for and be granted licenses to run RCFEs. Had Community Care Licensing known of her history with the Department of Public Health, her RCFE licenses would not have been approved.

AB 601 will provide the Department of Social Services with the information necessary to make more appropriate decisions as to what applicants are suitable to operate RCFEs in California, and will also allow consumers to make better informed choices regarding placement in an RCFE. 

Residential Care Facilities for the Elderly (RCFEs), also referred to as assisted living, are licensed as non- medical facilities serving individuals age 60 and older. RCFEs provide room, meals, supervision and, depending on the needs of the residents, assistance with activities of daily living and distribution of medications. Although over 90% of California’s RCFEs are owned and operated by for-profit providers, most are small facilities, i.e., six or fewer beds. The past few years have shown a marked increase in the acquisition of multiple RCFEs by the same owner and the acquisition and development of RCFEs by corporate chains. Complicated ownership structures with multiple stakeholders often obscure lines of ownership and accountability. Ownership information on RCFE licensees is not made available to the public, and the licensing agency, the Department of Social Services, Community Care Licensing, is often unaware of what other facilities are owned and operated by the same licensee.


About CANHR: California Advocates for Nursing Home Reform (CANHR), is a statewide nonprofitadvocacy organization dedicated to improving the choices, care and quality of life for California’s long term care consumers. Through direct advocacy, community education, legislation and litigation it has been CANHR’s goal to educate and support long term care consumers and advocates regarding the rights and remedies under the law, and to create a united voice for long term care reform and humane alternatives to institutionalization.

California Advocates for Nursing Home Reform (CANHR) 
650 Harrison Street, 2nd Floor, San Francisco, CA 94107