(a)  (1)  Within 24 hours of the filing of a bankruptcy petition under Title 11 of the United States Code or any other laws of the United States, by any person or entity holding a controlling interest in a long-term health care facility, the licensee of the long-term health care facility shall provide written notification to the department of the filing of the petition and the location of the court in which the petition was filed. The written notification may be provided to the department by telephone facsimile or overnight mail.

(2)  Within 24 hours of the appointment of a trustee by the bankruptcy court, the long-term health care facility shall provide written notification to the department of the name, address, and telephone number of the trustee. The written notification may be provided to the department by telephone facsimile or overnight mail.

(3)  The department shall provide written notification to the trustee of the requirements of operating a licensed long-term health care facility within three days of being notified of the appointment of the trustee. The contents of this written notice may be provided to the trustee by telephone facsimile or overnight mail and shall include, but not be limited to, all of the following:

(A)  The trustee is required to manage and operate the long-term health care facility according to the requirements of state law, in the same manner that the owner or possessor of the facility would be required to manage and operate the facility, including, but not limited to, complying with Article 8.5 (commencing with Section 1336) of Chapter 2, Chapter 3.9 (commencing with Section 1599), and Sections 72527, 73523, and 76525 of Title 22 of the California Code of Regulations.

(B)  The transfer of patients pursuant to the liquidation of a licensed long-term health care facility presents a compelling public health and safety risk, and the trustee will not be exempted from complying with applicable state law for any reason.

(b)  (1)  As mandated by subdivision (b) of Section 959 of Title 28 of the United States Code, an individual appointed as a trustee in a bankruptcy proceeding described in this section that involves any person or entity holding a controlling interest in a long-term health care facility shall comply with all state licensing and federal certification requirements applicable to the long-term health care facility, including, but not limited to, those governing patient rights, transfer or discharge, and facility closure. The transfer of patients pursuant to the liquidation of a licensed long-term health care facility presents a compelling public health and safety risk, and a trustee shall not be exempted from complying with applicable state law for any reason.

(2)  If a trustee fails to comply with the state licensing requirements applicable to a long-term health care facility, the department shall report the trustee’s actions to the bankruptcy court and intervene as appropriate to ensure continued facility compliance with those requirements.

(Added by Stats. 1998, Ch. 474, Sec. 1. Effective January 1, 1999.)