(a) (1) Beginning January 1, 2023, if a licensee provider fails to pay a penalty assessed pursuant to Section 1424.5 or 1425 in full when all appeals have been exhausted and the department‘s position has been upheld, the department shall give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5 percent or more that the department may take appropriate legal action to recover the unpaid penalty amount from the provider licensee’s financial interest in the related party. If the department determines, after two notifications, that the related parties are not financially viable or recovery is unlikely, the department shall document this determination. The documentation shall include the names of the related parties notified, detailed information on the methods used by the department to make the determination, and a clear justification for the department’s determination. The documentation of the department’s determination and supporting explanation shall be available to the public by request, unless the records are not subject to disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), in which case the department shall provide the reason for not disclosing the records.

(2) When a citation is issued under Section 1424, the department shall give initial written notice to related parties of the basis for the citation, and the subsequent disciplinary action that is imminent if the violation is not remedied immediately, up to and including assessment of administrative penalties, for which the related party may be held responsible pursuant to this subdivision.

(b) “Related party” has the same meaning as in Section 128734.

(Amended by Stats. 2022, Ch. 28, Sec. 84. (SB 1380) Effective January 1, 2023.)