Ariz. Rev. Stat. § 36-2068 – Legal action; licensure; change of ownership; definitions

A. The director may continue to pursue any court, administrative or enforcement action against a licensee even if the sober living home is in the process of being sold or transferred or has closed.
B. The department may revoke or suspend a sober living home license or deny an application for a sober living home license if:
1. 1. The applicant, the licensee or a controlling person has a sober living home or health care institution license that is in an enforcement action or court action related to the health and safety of the residents or patients.
2. 2. The department has determined for reasons other than those specified in paragraph 1 of this subsection that the issuance of a license is likely to jeopardize resident safety.
3. 3. The applicant, the licensee or a controlling person has had in any state or jurisdiction an application or license to operate a sober living home or a health care institution denied, suspended or revoked, unless the denial was based on the failure to complete the licensing process or to pay a required licensing fee within the required time frame.
4. 4. The applicant, the licensee or a controlling person has had in any state or jurisdiction a health professional license or certificate denied, suspended or revoked.
5. 5. The applicant, the licensee or a controlling person provides false or misleading information to the department.
C. The department may deny the approval of a change in ownership of a currently licensed sober living home if the department determines that the transfer of ownership, whether involving a direct owner or indirect owner, may jeopardize resident safety.
D. For the purposes of this section:
1. 1. "Controlling person" means a person who, with respect to a business organization:
  1. (a) Has the power to vote at least ten percent of the outstanding voting securities of the business organization.
  2. (b) If the business organization is a partnership, is a general partner or is a limited partner who holds at least ten percent of the voting rights of the partnership.
  3. (c) If the business organization is a corporation, association or limited liability company, is the president, the chief executive officer, the incorporator, an agent or any person who owns or controls at least ten percent of the voting securities.
  4. (d) Holds a beneficial interest in ten percent or more of the liabilities of the business organization.
2. 2. "Direct owner" means a person that has an ownership or control interest in the sober living home totaling fifty-one percent or more.
3. 3. "Indirect owner":
  1. (a) Means a person that has an ownership or control interest in a direct owner totaling fifty-one percent or more.
  2. (b) Includes an ownership or control interest in an indirect owner totaling fifty-one percent or more and a combination of direct ownership and indirect ownership or control interests totaling fifty-one percent or more in the sober living home.