N.Y. MHY Law § 32.31 — New York Code / Act MHY / Title E / Article 32 / Section 32.31
Establishment or incorporation of facilities for chemical dependence services
Status: in_force

§ 32.31 Establishment or incorporation of facilities for chemical\n           dependence services.\n  (a) No provider of services or facility providing chemical dependence\nservices shall be established except with the written approval of the\ncommissioner. No certificate of incorporation of a business, membership\nor not-for-profit corporation or articles of organization of a limited\nliability company shall hereafter be filed which includes among its\ncorporate purposes or powers the establishment or operation of a\nfacility providing chemical dependence services or the solicitation of\ncontributions for any such purpose, or two or more of such purposes,\nexcept with the written approval of the commissioner and, when otherwise\nrequired by law, the approval of a justice of the supreme court endorsed\non or annexed to the certificate of incorporation. Notwithstanding any\nother provision of law, the commissioner shall not require a corporation\nto amend its certificate of incorporation or a limited liability company\nto amend its articles of organization which includes among the purposes\nof the corporation or limited liability company the establishment or\noperation of a substance abuse program or alcoholism facility. Any such\ncorporate or limited liability company purposes, powers, or provisions\npreviously approved by the office shall be deemed consent by the office\nfor such corporation or limited liability company to provide chemical\ndependence services. Nothing herein obviates the need for such\ncorporation or limited liability company to possess a valid operating\ncertificate.\n  (b) With respect to the incorporation or establishment of a provider\nor facility providing chemical dependence services, the commissioner\nshall give written approval after all of the following requirements have\nbeen met:\n  1. An application for approval of the proposed certificate of\nincorporation or articles of organization shall be filed with the\ncommissioner together with such other forms and information as shall be\nprescribed by, or acceptable to, him or her. Thereafter, the\ncommissioner shall forward a copy of the proposed certificate or\narticles or organization and application for establishment and\naccompanying documents, to the local governmental unit of the area in\nwhich such facility is to be located. The commissioner shall not act\nupon such application until the local governmental unit has had a\nreasonable time to submit their recommendations.\n  2. Upon receipt of the recommendations of the local governmental unit,\nor the lapse of a reasonable time for comment, the commissioner shall\nsubmit the application along with the recommendations of the local\ngovernmental unit to the advisory council on alcoholism and substance\nabuse services for its review and recommendation. The commissioner shall\nnot act upon an application for establishment of a facility without\nhaving first given such advisory council a reasonable opportunity to\nmake its recommendation on the application.\n  3. The commissioner shall not take any action contrary to the\nrecommendation of the council unless he or she first appears before the\ncouncil and explains his or her reasons therefor. The commissioner shall\nnot take any action contrary to the advice of the local governmental\nunit until he or she affords, to such entity, an opportunity to request\na public hearing and if so requested, a public hearing shall be held in\naccordance with subdivision (e) of section 32.29 of this article. If the\ncommissioner proposes to disapprove the application he or she shall\nafford the applicant an opportunity to request a public hearing in\naccordance with subdivision (e) of section 32.29 of this article. The\ncommissioner may hold such a public hearing on the application on his or\nher own motion. Any public hearing held pursuant to this subdivision may\nbe conducted by the commissioner or by any individual designated by the\ncommissioner.\n  (c) The commissioner shall not approve a certificate of incorporation\nor articles of organization or application for establishment unless the\nprovisions of subdivision (a) of section 32.09 of this article have been\nmet and that the commissioner is satisfied, insofar as applicable, as\nto:\n  1. the public need for the existence of the facility at the time and\nplace and under the circumstances proposed taking into consideration\nlocal, regional, and statewide need;\n  2. the absence of availability and feasibility of development of\nfacilities or services which may serve as alternatives or substitutes\nfor the whole or any part of the proposed facility;\n  3. the character, competence and standing in the community of the\nproposed incorporators, directors, members, partners, sponsors,\nstockholders or operators; considering, with respect to any proposed\nincorporator, director, member, partner, sponsor, stockholder or\noperator who is already or within the past ten years has been an\nincorporator, director, member, partner, sponsor, stockholder or\noperator of any hospital, private proprietary home for adults, residence\nfor adults, or not-for-profit home for the aged or blind which has been\nissued an operating certificate by the office of children and family\nservices or a halfway house, hostel or other facility or institution for\nthe care, custody or treatment of the mentally disabled which is subject\nto approval by an office of the department, the level of care being or\nhaving been rendered in each such hospital, home, residence, halfway\nhouse, hostel, or other residential facility or institution with which\nsuch person is or was affiliated;\n  4. the overall financial condition of the applicant, through review of\naudited financial statements, taking into consideration the financial\nresources of the proposed facility and of its sources of future\nrevenues; and\n  5. the sufficiency of such other matters as he or she shall deem in\nthe public interest.\n  (d) 1. Any change in the person who or partnership which is the\nprovider of services shall be approved by the commissioner in accordance\nwith the provisions of this subdivision and subdivisions (a) through (c)\nof this section.\n  2. Any transfer, assignment or other disposition of ten percent or\nmore of the stock, membership interest or voting rights thereunder of a\ncorporation or a limited liability company which is the provider of\nservices providing chemical dependence services or any transfer,\nassignment or other disposition of the stock, ownership or voting rights\nthereunder of such a corporation or a limited liability company which\nresults in the ownership or control of more than ten percent of the\nstock, ownership or voting rights thereunder of such corporation or\nlimited liability company by any person shall be subject to approval by\nthe commissioner in accordance with the provisions of this subdivision\nand subdivisions (a) through (c) of this section and rules and\nregulations promulgated pursuant thereto. In the absence of such\napproval, the operating certificate of such facility shall be subject to\nrevocation or suspension.\n  3. No facility shall be approved for establishment which would be\noperated by a partnership or limited liability company any of the\nmembers of which are not natural persons.\n  4. No facility shall be approved for establishment which would be\noperated by a corporation any of the stock of which is owned by another\ncorporation.\n  5. No corporation having power to solicit contributions for charitable\npurposes shall be deemed to have authority to solicit contributions for\nany purposes for which the approval of the commissioner is required\npursuant to subdivision (a) of this section, unless the certificate of\nincorporation or articles of organization specifically makes provisions\ntherefor, and the written approval of the commissioner is endorsed on or\nannexed to such certificate or articles of organization. Where such\napproval has not been obtained the commissioner may institute and\nmaintain an action in the supreme court through the attorney general to\nprocure a judgment dissolving and vacating or annulling the certificate\nof incorporation or articles of organization of any such corporation or\nlimited liability company.\n  6. Only a natural person or a partnership existing under the\npartnership law may hereafter undertake to engage in the business of\noperating or conducting a facility providing chemical dependence\nservices for profit, except that: (i) a person, partnership or\ncorporation which owned and was operating such a facility on July first,\nnineteen hundred eighty-three may continue to own and operate such\nfacility; (ii) a business corporation organized pursuant to the business\ncorporation law or a limited liability company organized pursuant to the\nlimited liability company law may, with the approval of the commissioner\nand in accordance with the provisions of this section, undertake to\nengage in the business of operating or conducting such a facility\nprovided that such corporation or limited liability company shall not\ndiscriminate because of race, color, creed, national origin or sponsor\nin admission or retention of patients; (iii) any person who, or a\npartnership which, is operating a private proprietary facility in\naccordance with applicable provisions of law may, with the approval of\nthe commissioner, and in accordance with the provisions of this section\nand any rules and regulations thereunder, form a business corporation to\nengage in the business of operating or conducting such facility,\nprovided, however, that such corporation shall not discriminate because\nof race, color, creed, national origin or sponsor in admission or\nretention of patients.\n  (e) The commissioner shall adopt and amend rules and regulations to\neffectuate the provisions and purposes of this section, and to provide\nfor the revocation, limitation or annulment of approvals of\nestablishment or formation of limited liability companies or\nincorporation of corporations.\n  (f) Where the approval required by subdivision (a) of this section has\nnot been obtained, the commissioner may institute and maintain an action\nin the supreme court through the attorney general to procure a judgment\ndissolving and vacating or annulling:\n  1. the certificate of incorporation of any such corporation or\narticles of organization of any such limited liability company, or\n  2. the certificate of incorporation of any such corporation or the\narticles of organization of any such limited liability company hereafter\nincorporated or formed, the name, purposes, objectives, or activities of\nwhich in any manner may reasonably lead to the belief that the\ncorporation or limited liability company possesses or may exercise any\nof such purposes.\n