Original Notice.

     Preproposal statement of inquiry was filed as WSR 10-06-016.

     Title of Rule and Other Identifying Information: The department intends to amend WAC 388-76-10585 Resident rights -- Examination of inspection results and 388-76-10105.

     The department intends to add new sections WAC 388-76-10584 Resident rights -- Examination of license, 388-76-10106 Change of ownership -- Notice to department and residents, and 388-76-10107 Change of ownership priority processing.

     Hearing Location(s): Office Building 2, Auditorium, DSHS Headquarters, 1115 Washington, Olympia, WA 98504 (public parking at 11th and Jefferson. A map is available at http://www1.dshs.wa.gov/msa/rpau/RPAU-OB-2directions.html or by calling (360) 664-6094), on June 8, 2010, at 10:00 a.m.

     Date of Intended Adoption: Not earlier than June 9, 2010.

     Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504-5850, delivery 4500 10th Avenue S.E., Lacey, WA 98503, e-mail DSHSRPAURulesCoordinator@dshs.wa.gov, fax (360) 664-6185, by 5 p.m. on June 8, 2010.

     Assistance for Persons with Disabilities: Contact Jennisha Johnson, DSHS rules consultant, by May 25, 2010, TTY (360) 664-6178 or (360) 664-6094 or by e-mail at johnsjl4@dshs.wa.gov.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of amending these rules is to give adult family home residents and their families more time to prepare when there is a change of ownership and to make it easier for residents to examine inspection and complaint investigation reports.

     Reasons Supporting Proposal: The proposed changes will promote improvements to the adult family home program.

     Statutory Authority for Adoption: RCW 70.128.040.

     Statute Being Implemented: Chapter 70.128 RCW.

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: Department of social and health services, governmental.

     Name of Agency Personnel Responsible for Drafting: Mike Tornquist, P.O. Box 45600, Olympia, WA 98513, (360) 725-3204; Implementation and Enforcement: Lori Melchiori, P.O. Box 45600, Olympia, WA 98513, (360) 725-2404.

     A small business economic impact statement has been prepared under chapter 19.85 RCW.

     The purpose of this proposed rule making is to promote improvements to the adult family home program.

     Highlights of proposed changes:

     •     Amend the WAC to make it easier for residents and other interested persons to examine inspection and complaint investigation reports and cover letters;

     •     Increase the amount of notice providers will be required to give to residents and the department when a change of ownership occurs.

     SMALL BUSINESS ECONOMIC IMPACT STATEMENT (SBEIS): Chapter 19.85 RCW, the Regulatory Fairness Act, requires that the economic impact of proposed regulations be analyzed in relation to small businesses. This statute outlines information that must be included in an SBEIS. Preparation of an SBEIS is required when a proposed rule has the potential of placing more than a minor impact on a business.

     RCW 19.85.020 defines a "small business" as "any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, and that has fifty or fewer employees."

     RCS analyzed these proposed rules and concludes that there are no new requirements in these rules that will impose any new costs on adult family homes. RCS does not believe that the proposed rules will result in any job losses or gains for adult family homes. The proposed rule amendments do not disapportionately [disproportionately] impact small businesses more than larger businesses.

     EVALUATION OF PROBABLE COSTS AND PROBABLE BENEFITS: RCS has determined that some of the proposed rules are "significant legislative rules" as defined by legislature. As required by RCW 34.05.328 (1)(c), RCS has analyzed the probable costs and probable benefits of the proposed amendments, taking into account both the qualitative and quantitative benefits and costs.

     COSTS:

     •     The department does not anticipate that the proposed amended rules will increase costs for adult family home providers.

     •     DSHS shared the draft language and draft small business economic statement and cost-benefit analysis with interested parties who are on the RCS adult family home mailing list.

     •     In addition, the draft language and draft small business economic statement and cost-benefit analysis was posted on the aging and disability services administration internet web site for anyone in the public to review and comment.

     •     DSHS' process is to use the input from internal and external stakeholders to determine cost impacts for the drafting of the rule. To date, no comments have been received about costs for these proposed rules.

     COST SAVINGS: The department does not anticipate that the proposed amended rules will decrease costs for adult family homes.

     OTHER BENEFITS: The rules result in several benefits which include:

     •     The amendments help protect residents by making critical information about the home more easily accessible; and

     •     By increasing the amount of notice the provider must give residents before selling the adult family home, residents will have more time to exercise their right to decide if they want to stay in the home.

     CONCLUSION: RCS concludes that the benefits of the proposed amendments exceed the possible cost.

     These rules continue to implement state laws and regulations related to adult family homes. RCS has complied with the appropriate sections of the Administrative Procedure Act and is prepared to proceed with the rule filing.

     Please contact Mike Tornquist by e-mail at tornqmj@dshs.wa.gov or by phone (360) 725-3204 if you have questions.

     A copy of the statement may be obtained by contacting Mike Tornquist, P.O. Box 45600, Olympia, WA 98504-5600, phone (360) 725-3204, fax (360) 438-7903, e-mail tornqmj@dshs.wa.gov.

     A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Mike Tornquist, P.O. Box 45600, Olympia, WA 98504-5600, phone (360) 725-3204, fax (360) 438-7903, e-mail tornqmj@dshs.wa.gov.

April 28, 2010

Katherine I. Vasquez

Rules Coordinator

     (2) A change of ownership of an adult family home requires both a new license application and a new license.

     (3) A change of ownership occurs when there is a change in:

     (a) The provider; or

     (b) The control of a provider.

     (4) Events which constitute a change of ownership include, but are not limited to:

     (a) The form of legal organization of the adult family home is changed, such as when an adult family home forms:

     (i) A partnership;

     (ii) A corporation;

     (iii) A limited liability company; or

     (iv) When it merges with another legal organization.

     (b) The adult family home transfers business operations and management responsibility to another party, whether or not there is a partial or whole transfer of real property, personal property, or both.

     (c) Two people are both licensed as a married couple or domestic partners to operate an adult family home and an event, such as a separation, divorce, or death, results in only one person operating the home.

     (d) Dissolution of a business partnership that is licensed to operate the adult family home.

     (e) If the adult family home is a corporation and the corporation:

     (i) Is dissolved;

     (ii) Merges with another corporation, resulting in a change in the control of the provider; or

     (iii) Consolidates with one or more corporations to form a new corporation;

     (iv) Whether by a single transaction or multiple transactions within a continuous twenty-four month period, transfers fifty percent or more of its shares to one or more of the following:

     (A) New or former shareholders; or

     (B) Present shareholders, each having less than five percent of the shares before the initial transaction.

     (f) Any other event or combination of events that results in a substitution, elimination, or withdrawal of the provider's control of the adult family home.

     (5) The new owner:

     (a) Must ((correct all deficiencies that exist at the time)) obtain a new license from the department before transfer of ((the)) ownership ((change));

     (b) ((Is subject to the provisions of chapters 70.128, 70.129, 74.34 RCW, this chapter and other applicable laws and regulations)) Must not begin operation of the adult family home until the department has granted the license;

     (c) Must ((obtain a new license from)) correct all deficiencies that exist at the time of the ((department before the transfer of)) ownership change; ((and))

     (d) ((Must not begin operation of the adult family home until the department has granted the license.

     (6) The home must notify each resident, in writing at least thirty days before the effective date of the ownership change.

     (7) In order to prevent disruption to residents, currently licensed providers may request in writing that the department give priority processing to an applicant seeking to be licensed as the new provider for the adult family home)) Is subject to the provisions of chapters 70.128, 70.129, 74.34 RCW, this chapter and other applicable laws and regulations; and

     (e) Must provide the department with a copy of the written notice of the change of ownership that was given to each resident, or applicable resident representatives.

[Statutory Authority: RCW 70.128.040. 10-04-008, § 388-76-10105, filed 1/22/10, effective 2/22/10; 09-03-030, § 388-76-10105, filed 1/12/09, effective 2/12/09. Statutory Authority: RCW 70.128.040 and chapters 70.128 and 74.34 RCW. 07-21-080, § 388-76-10105, filed 10/16/07, effective 1/1/08.]

     (2) The home must include the following information in the written notice:

     (a) Names of the present owner and prospective owner;

     (b) Name and address of the adult family home for which the ownership is being changed;

     (c) Date of proposed change;

     (d) The resident's right to decide whether they want to stay or move; and

     (e) Any change in the home's policies or operations that could impact a resident's ability to continue to live in the home. For example, if the new owner will be changing the home's policy on serving Medicaid eligible residents, that change might impact a resident's ability to continue receiving services in the home.

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     (1) Ensure each resident is given an opportunity to examine)) place the following documents in a common use area where they can be examined by residents, resident representatives, the department and anyone interested without having to ask for them.

     (a) A copy of the most recent inspection report ((of the home)) and related ((plans of correction)) cover letter; and

     (b) A copy of all complaint investigation reports, and any related cover letters received since the most recent inspection or not less than the last twelve months.

     (2) ((Post a notice in a visible location in the home indicating the inspection report is available for review)) The adult family home must post a notice that the following documents are available for review if requested by the residents, resident representatives, the department and anyone interested.

     (a) A copy of each inspection report and related cover letter received during the past three years; and

     (b) A copy of any complaint investigation reports and related cover letters received during the past three years.

[Statutory Authority: RCW 70.128.040 and chapters 70.128 and 74.34 RCW. 07-21-080, § 388-76-10585, filed 10/16/07, effective 1/1/08.]

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