(1) A facility that is licensed as a long term care facility under ORS § 441.025 may apply to the Department of Human Services for licensure as a conversion facility. The department shall issue a conversion facility license upon receipt of an application and a fee that meet requirements established by the department by rule.

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(2)(a) The department shall adopt rules governing the conversion of a facility’s license from a long term care facility license to a residential care facility license and the regulation of the facility during the conversion period.

(b) As of the date of licensure as a conversion facility, the conversion facility must be in substantial compliance with applicable state and local laws, rules, codes, ordinances and permit requirements.

(3) As used in this section, ‘substantial compliance’ means a level of compliance with state law and with rules of the department such that any identified deficiencies pose a risk of no more than negligible harm to the health or safety of residents. [2017 c.679 § 20]