1. (a) The Department shall exclude from the facility cost study those costs which are not:

   1. (1) Directly related to the operation of the facility;
   2. (2) Recognized as an allowable business expense in accordance with federal and state income tax guidelines.

2. (b) In order to comply with state laws, the following costs shall not be included in the facility cost study, in addition to those cost items excluded in accordance with the provisions of subsection (a) above:

   1. (1) Personal expenses of the owner-operator and his/her family which include those items, activities, or services that are used strictly by occupants who are not residents and are unrelated to facility business, including but not be limited to:

      1. (A) Personal clothing;
      2. (B) Use of facility vehicles for personal business; and
      3. (C) Furniture or equipment which residents are not allowed to use.
   2. (2) Expenses of an activity other than residential care, such as any other business or non-residential program which uses space, equipment, or supplies on the facility grounds;
   3. (3) Camperships or other expense of sending a resident to summer camp;
   4. (4) Resident relocation expense;
   5. (5) Donations to public or private agencies or organizations;
   6. (6) Fund raising expenses;
   7. (7) Gifts to employees;
   8. (8) Legal fees directly related to a resident or employee, or expenses for the prosecution of claims against a regional center or state agency;
   9. (9) Public relations expenses;
   10. (10) Refundable deposits;

   11. (11) The following management organization expenses:

       1. (A) Services which duplicate those provided by the facility;
       2. (B) Those applicable to, associated with, or claimed by other facilities operated by the management organization; and
       3. (C) Costs which do not support facility operations and which cannot be allocated to any of the direct program cost items in Section 56908.
   12. (12) The value of capital improvements, except as allowed pursuant to Section 56905.

Note: Authority cited: Section 4681.1, Welfare and Institutions Code. Reference: Section 4681.1, Welfare and Institutions Code.

History

1. New section filed 1-14-91; operative 2-13-91 (Register 91, No. 14).

2. Amendment of section filed 9-20-93 as an emergency; operative 9-20-93. Submitted to OAL for printing only pursuant to Chapter 722, Statutes of 1992, Section 147 (Register 93, No. 39). These regulations shall not be repealed by the Office of Administrative Law and shall remain in effect until revised or repealed, as appropriate.

3. Editorial correction of History 2 (Register 94, No. 47).

4. Editorial correction of subsections (b)(11)(C) and (b)(12) (Register 94, No. 50).

5. Editorial correction of subsection (b)(11)(C) (Register 95, No. 18).

6. Change without regulatory effect amending subsection (b) filed 6-19-95 pursuant to section 100, title 1, California Code of Regulations (Register 95, No. 25).