Section 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 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.
    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.