461-B - Provisions related to establishment of adult care facilities.
§ 461-b. Provisions related to establishment of adult care facilities. 1. (a) Only a natural person or partnership composed only of natural persons, a not-for-profit corporation, a public corporation, a business corporation other than a corporation whose shares are traded on a national securities exchange or are regularly quoted on a national over-the-counter market or a subsidiary of such corporation or a corporation any of the stock of which is owned by another corporation, a limited liability company provided that if a limited liability company has a member that is a corporation, a limited liability company or a partnership, the shareholders of the member corporation, the members of the member limited liability company, or the partners of the member partnership must be natural persons, a social services district or other governmental agency may be issued an operating certificate by the department for the purpose of operating an adult care facility, except family type homes for adults, which may be issued operating certificates by the department or social services district only if such facilities are operated by a natural person or persons. The holder of an operating certificate for the purposes of operating an adult home shall not be issued an operating certificate for the purposes of operating an enriched housing program if such adult home operator has not met compliance standards during the most recent inspection cycle. Provided however, the department may deem an operator eligible to receive an operating certificate for the purposes of operating an enriched housing program upon the consideration of the results of previous inspections and whether the operator is meeting the needs of the residents and is providing quality care. (b) A natural person may seek certification as an operator of a family-type home for adults to provide long-term residential care and personal care and/or supervision to persons related to the operator, provided that the relationship between the operator and resident is not that of spouse, in-law, child or step-child. (c) An appropriation made available for the purposes of funding the operating assistance sub-program for enriched housing up to the amount appropriated for such purpose in the nineteen hundred ninety-six--ninety-seven state fiscal year shall be limited to any enriched housing program operated by a public agency, public corporation or a not-for-profit corporation, which may be issued an operating certificate by the department to operate an enriched housing program. 2. (a) No adult care facility shall be operated unless and until the operator obtains the written approval of the department. Such approval may be granted only to an operator who satisfactorily demonstrates: that the operator is of good moral character; that the operator is financially responsible; that there is a public need for the facility; that the buildings, equipment, staff, standards of care and records to be employed in the operation comply with applicable law and regulations of the department and that any license or permit required by law for the operation of such facility has been issued to such operation. In determining whether there is a public need for the facility, the department shall give consideration to the relative concentration of such facilities in the area proposed to be serviced. Such approval for family type home for adults shall not be granted unless the appropriate social services official has made the required visitation and inspection and has submitted a report thereof to the department in accordance with this article. (b) After an operator obtains approval of the department for the operation of an adult care facility he may operate such facility only so long as he continues to do so in compliance with the requirements of such approval, applicable law, and the regulations of the department.(c) The knowing operation of an adult care facility without the prior written approval of the department shall be a class A misdemeanor. 3. (a) The department shall not approve an application for establishment of an adult care facility unless it is satisfied insofar as applicable, as to (i) the character, competence and standing in the community, of the applicant; provided, however, with respect to any such applicant who is already or within the past ten years has been an incorporator, director, sponsor, stockholder, operator, administrator, member or owner of any adult care facility which has been issued an operating certificate by the board or the department, or of a halfway house, hostel or other residential facility or of a program or facility licensed or operated by a health, mental hygiene, social services or education agency or department of this or any state, or a program serving persons with mental disabilities, or other persons with disabilities as defined in subdivision twenty-one of section two hundred ninety-two of the executive law, the aged, children or other persons receiving health, mental hygiene, residential, social or educational services, no approval of such application shall be granted unless the department shall affirmatively find by substantial evidence as to each such applicant that a substantially consistent high level of care is being or was being rendered in each such facility or institution with which such person is or was affiliated; for the purposes of this paragraph, there may be a finding that a substantially consistent high level of care has been rendered where there have been violations of applicable rules and regulations, that (1) did not threaten to directly affect the health, safety or welfare of any patient or resident, and (2) were promptly corrected and not recurrent; (ii) the financial resources of the proposed facility and its sources of future revenue; and (iii) such other matters as it shall deem pertinent. (b) Any natural person or partnership composed only of natural persons, not-for-profit corporation, public corporation, business corporation other than a corporation whose shares are traded on a national securities exchange or are regularly quoted on a national over-the-counter market or a subsidiary of such corporation or a corporation any of the stock of which is owned by another corporation, a limited liability company provided that if a limited liability company has a member that is a corporation, a limited liability company or a partnership, the shareholders of the member corporation, the members of the member limited liability company, or the partners of the member partnership must be natural persons, social services district or other governmental agency filing an application for approval to operate a residence for adults, adult home or enriched housing program, shall file with the department such information on the ownership of the property interest in such facility as shall be prescribed by regulation, including the following: (i) The name and address and a description of the interest held by each of the following persons: (1) any person, who directly or indirectly, beneficially owns any interest in the land on which the facility is located; (2) any person who, directly or indirectly, beneficially owns any interest in the building in which the facility is located; (3) any person who, directly or indirectly, beneficially owns any interest in any mortgage, note, deed of trust or other obligation secured in whole or in part by the land on which or building in which the facility is located; and (4) any person who, directly or indirectly, has any interest as lessor or lessee in any lease or sub-lease of the land on which or the building in which the facility is located.(ii) If any person named in response to subparagraph (i) of this paragraph is a partnership or limited liability company, then the name and address of each partner or member. (iii) If any person named in response to subparagraph (i) of this subdivision is a corporation, other than a corporation whose shares are traded on a national securities exchange or are regularly quoted in an over-the-counter market or which is a commercial bank, savings bank or savings and loan association, then the name and address of each officer, director, stockholder and, if known, each principal stockholder and controlling person of such corporation. (iv) If any corporation named in response to subparagraph (i) of this subdivision is a corporation whose shares are traded on a national securities exchange or are regularly quoted in an over-the-counter market or which is a commercial bank, savings bank or savings and loan association, then the name and address of the principal executive officers and each director and, if known, each principal stockholder of such corporation. (v) For the purpose of this section the term "controlling person" shall mean any person who by reason of a direct or indirect ownership interest (whether of record or beneficial) has the ability, acting either alone or in concert with others with ownership interests, to direct or cause the direction of the management or policies of said corporation, partnership or other entity. Neither the department nor any employee of the department shall, by reason of his or her official position, be deemed a controlling person of any corporation, partnership or other entity, nor shall any person who serves as an officer, administrator or other employee of any corporation, partnership or other entity or as a member of a board of directors or trustees of any corporation be deemed to be a controlling person of such corporation, partnership or other entity as a result of such position or his or her official actions in such position. The term "principal stockholder" shall mean any person who beneficially owns, holds or has the power to vote, ten percent or more of any class of securities issued by said corporation. (c) No articles of organization of a limited liability company established pursuant to the New York limited liability law which includes among its powers or purposes the establishment or operation of any adult home, residence for adults or enriched housing program as defined in section two of this chapter, shall be filed with the department of state unless the written approval of the department is annexed to the articles of organization. 3-a. (a) Every person who is a controlling person of any adult care facility liable under any provision of this article to any person or class of persons for damages or to the state for any civil fine, penalty, assessment of damages, shall also be liable, jointly and severally, with and to the same extent as such adult care facility, to such person or class of persons for damages or to the state for any such civil fine, penalty, assessment or damages. (b) For the purposes of this section the term "controlling person" shall mean any person who by reason of a direct or indirect ownership interest (whether of record or beneficial) has the ability, acting either alone or in concert with others with ownership interests, to direct or cause the direction of the management or policies of said corporation, partnership or other entity. Neither the department nor any employee of the department shall, by reason of his or her official position, be deemed a controlling person of any corporation, partnership or other entity, nor shall any person who serves as an officer, administrator or other employee of any corporation, partnership or otherentity or as a member of a board of directors or trustees of any corporation be deemed to be a controlling person of such corporation, partnership or other entity as a result of such position or his or her official actions in such position. The term "principal stockholder" shall mean any person who beneficially owns, holds or has the power to vote, ten percent or more of any class of securities issued by said corporation. 4. No person, corporation, home, institution, hotel or other residential facility or accommodation other than a facility or agency which possesses a valid operating certificate, as required under the provisions of this chapter, the mental hygiene law or public health law shall hold itself out, advertise or otherwise in any form or manner represent that it is a facility offering accommodations and services for dependent, aged or disabled adults. 5. Any adult care facility subject to the provisions of this section that possesses a valid operating certificate as of October first, nineteen hundred seventy-seven shall be deemed to have department approval to continue operation of such facility for the duration or the period for which such certificate was issued, provided such facility continues to be operated in accordance with applicable provisions of law and department regulations. 6. (a) The department, prior to making a final determination with respect to approving the establishment of, or the certificate of incorporation of, or the articles of organization of, or an operating certificate for a residence for adults, adult home, or enriched housing program, shall in addition to any other requirements of law take into consideration and be empowered to request information and advice as to the availability of facilities or services such as ambulatory, home care or other services which may serve as alternatives or substitutes for the whole or any part of a proposed facility and the possible economies and improvements in services to be anticipated from the operation of centralized facilities and services reasonably available in the regional services area. (b) In determining whether there is a public need for a residence for adults or an adult home, the department shall consider the advice of the state health planning and development agency designated pursuant to the provisions of the national health planning and resources development act of nineteen hundred seventy-four and any amendments thereto. (c) Notwithstanding any other provision of this article, the department shall not consider public need in determining whether to approve any proprietary adult home that was in existence and operating on September first, nineteen hundred seventy-five as a family care home under the mental hygiene law or an adult care facility operated by a social services district. 7. (a) The department shall suspend, limit, modify or revoke an operating certificate of a shelter for adults, residence for adults or adult home upon determining that such action would be in the public interest in order to conserve resources by restricting the number of beds, or the level of services, or both, to those which are actually needed, after taking into consideration the total number of beds necessary to meet the public need, and the availability of facilities or services such as ambulatory, home care or other services which may serve as alternatives or substitutes for the whole or any part of a facility, and in the case of modification, the level of care and the nature and type of services provided by a facility or required by all or some of the residents in or seeking admission to such facility, and whether such level of care is consistent with the operating certificate of the facility.(b) Wherever any finding as described in this subdivision is under consideration with respect to any particular facility, the department shall cause to be published in a newspaper of general circulation in the geographic area of the facility at least thirty days prior to making such a finding an announcement that such a finding is under consideration and an address to which interested persons can write to make their views known. The department shall take all public comments into consideration in making such a finding. (c) The department shall, upon such finding described in this subdivision with respect to any facility or project, cause such facility to be notified of the finding at least thirty days in advance of taking the proposed action to revoke, suspend, limit, or modify the facility's operating certificate. Upon receipt of any such notification and before the expiration of the thirty days or such longer period as may be specified in the notice, the facility may request a public hearing to be held in the county in which the facility is located. In no event shall the revocation, suspension, limitation, or modification take effect prior to the thirtieth day after the date of the notice or prior to the effective date specified in the notice or prior to the date of the hearing decision, whichever is later. (d) Except as otherwise provided by law, all appeals from a finding of the department made pursuant to this subdivision shall be directly to the appellate division of the supreme court in the third department. Except as otherwise expressly provided by law, such appeals shall have preference over all issues in all courts. 8. No adult care facility certified by the department which is operating in compliance with this chapter and regulations shall be required to be certified by the office of mental health as a residential care center for adults.