(a)  Any skilled nursing facility or intermediate care facility that on the effective date of this section is providing care for the developmentally disabled may utilize beds designated for that purpose to provide intermediate care for the developmentally disabled without obtaining a certificate of need, a change in licensure category, or a change in bed classification pursuant to subdivision (c) of Section 1250.1, provided the facility meets and continues to meet the following criteria:

(1)  The facility was surveyed on or before July 18, 1977, by the State Department of Health for certification under the federal ICF/MR program pursuant to Section 449.13 of Title 42 of the Code of Federal Regulations, and the beds designated for intermediate care for the developmentally disabled were certified by the state department, either before or after that date, to meet the standards set forth in Section 449.13 of Title 42 of the Code of Federal Regulations.

(2)  Not less than 95 percent of the beds so certified for intermediate care for the developmentally disabled are utilized exclusively for provision of care to residents with a developmental disability, as defined in subdivision (a) of Section 4512 of the Welfare and Institutions Code. Nothing in this paragraph shall require continuous bed occupancy, but a bed certified for intermediate care for the developmentally disabled shall be deemed to be converted to another use if occupied by a resident who is not developmentally disabled.

(3)  On and after the effective date of regulations implementing this section, no change of ownership has occurred with respect to the facility requiring issuance of a new license, except a change occurring because of a decrease in the number of partners of a licensed partnership or a reorganization of the governing structure of a licensee in which there is no change in the relative ownership interests.

(b)  Any facility receiving an exemption under subdivision (a) shall, with respect to beds designated for intermediate care for the developmentally disabled, be subject to regulations of the state department applicable to that level of care, rather than the level of care for which the beds are licensed. The state department shall indicate on the license of any facility receiving an exemption pursuant to subdivision (a) that the licensee has been determined by the state department to meet the criteria of subdivision (a).

(c)  The licensee of any facility receiving an exemption under this section shall notify the state department not less than 30 days prior to taking action that will cause the facility to cease meeting the criteria specified in paragraph (2) or (3) of subdivision (a).

(d)  Upon a change of ownership of the facility or change in ownership interests not meeting the criterion for continued exemption specified in paragraph (3) of subdivision (a), the applicant for relicensure shall elect as follows:

(1)  To reclassify all skilled nursing beds that have been exempted under this section to the intermediate care-developmental disabilities classification, or to continue the skilled nursing classification with respect to skilled nursing beds that have received the exemption.

(2)  To reclassify intermediate care beds that have been exempted under this section to the intermediate care-developmental disabilities classification, or to reclassify intermediate care beds that have received the exemption to the intermediate care-other classification.

Reclassification of beds pursuant to this subdivision shall not constitute a “project” within the meaning of Section 127170 and shall not be subject to any requirement for a certificate of need under Chapter 1 (commencing with Section 127125) of Part 2 of Division 107.

(Amended by Stats. 1996, Ch. 1023, Sec. 155.5. Effective September 29, 1996.)