N.Y. PBH Law § 2801-A — New York Code / Act PBH / Article 28 / Section 2801-A
Establishment or incorporation of hospitals
Status: in_force

§ 2801-a. Establishment or incorporation of hospitals. 1. No hospital,\nas defined in this article, shall be established except with the written\napproval of the public health and health planning council. No\ncertificate of incorporation of a business membership or not-for-profit\ncorporation shall hereafter be filed which includes among its corporate\npurposes or powers the establishment or operation of any hospital, as\ndefined in this article, or the solicitation of contributions for any\nsuch purpose, or two or more of such purposes, except with the written\napproval of the public health and health planning council, and when\notherwise required by law of a justice of the supreme court, endorsed on\nor annexed to the certificate of incorporation. No articles of\norganization of a limited liability company established pursuant to the\nNew York limited liability company law which includes among its powers\nor purposes the establishment or operation of any hospital as defined in\nthis article, shall be filed with the department of state except upon\nthe approval of the public health and health planning council.\n  2. With respect to the incorporation or establishment of any hospital,\nas defined in this article, the public health and health planning\ncouncil shall give written approval after all of the following\nrequirements have been met. An application for approval of the proposed\ncertificate of incorporation, articles of organization or establishment\nshall be filed with the public health and health planning council\ntogether with such other forms and information as shall be prescribed\nby, or acceptable to, the public health and health planning council.\nThereafter, the public health and health planning council shall forward\na copy of the proposed certificate or application for establishment, and\naccompanying documents, to the health systems agency, if any, having\ngeographical jurisdiction of the area where the proposed institution is\nto be located. The public health and health planning council shall act\nupon such application after the health systems agency has had a\nreasonable time to submit their recommendations. At the time members of\nthe public health and health planning council are notified that an\napplication is scheduled for consideration, the applicant and the health\nsystems agency shall be so notified in writing. The public health and\nhealth planning council shall afford the applicant an opportunity to\npresent information in person concerning the application to a committee\ndesignated by the council. The public health and health planning council\nshall not take any action contrary to the advice of the health systems\nagency until it affords to the health systems agency an opportunity to\nrequest a public hearing and, if so requested, a public hearing shall be\nheld. If the public health and health planning council proposes to\ndisapprove the application it shall afford the applicant an opportunity\nto request a public hearing. The public health and health planning\ncouncil may hold a public hearing on the application on its own motion.\nAny public hearing held pursuant to this subdivision may be conducted by\nthe public health and health planning council, or by any individual\ndesignated by the public health and health planning council. Beginning\non January first, nineteen hundred ninety-four, and each year\nthereafter, a complete application received between January first and\nJune thirtieth of each year shall be reviewed by the appropriate health\nsystems agency and the department and presented to the public health and\nhealth planning council for its consideration prior to June thirtieth of\nthe following year and a complete application received between July\nfirst and December thirty-first of each year shall be reviewed by the\nappropriate health systems agency and the department presented to the\npublic health and health planning council for consideration prior to\nDecember thirty-first of the following year.\n  2-a. (a) Notwithstanding any provision of law to the contrary, the\ncommissioner is authorized to approve a certificate of incorporation or\narticles of organization for establishment of a hospital, provided that:\n(i) the certificate of incorporation or articles of organization\nreflects solely a change in the form of the business organization of an\nexisting entity which had been approved by the public health and health\nplanning council or its predecessor; and (ii) every incorporator,\nstockholder, member, director and sponsor of the new entity shall have\nbeen an owner, partner, incorporator, stockholder, member, director or\nsponsor of the existing entity; and (iii) the distribution of ownership,\ninterests and voting rights in the new entity shall be the same as in\nthe existing entity; and (iv) there shall be no change in the operator\nof a hospital other than the form of its business organization, as a\nresult of the approval of such certificate of incorporation or articles\nof organization. Any approval by the public health and health planning\ncouncil of a person as an owner, incorporator, stockholder, member,\ndirector or sponsor in the existing entity shall be deemed to be\napproval for the same degree of participation in the new entity. If the\nproposal is acceptable to the commissioner an amended operating\ncertificate shall be issued. In the event the commissioner determines\nthat the proposed transfer is not approvable the application shall be\nreferred to the public health and health planning council for its review\nand action. If the public health and health planning council proposes to\ndisapprove the application, it shall afford the applicant an opportunity\nto request a public hearing and, if so requested, a public hearing shall\nbe held. Any public hearing held pursuant to this subdivision may be\nconducted by the public health and health planning council, or by any\nindividual designated by the public health and health planning council.\n  2-b. (a) This subdivision applies with respect to an application under\nthis section relating to the incorporation or establishment of any\nnursing home, in addition to subdivision two of this section.\n  (b) The department shall provide notice, in writing or electronically,\nof an application for establishment to the state office of long-term\ncare ombudsman, within thirty days of acknowledgement of the application\nby the department. Thereafter, the state office of the long-term care\nombudsman shall submit its recommendation to the department and to the\npublic health and health planning council for consideration about such\napplication. At the time members of such council are notified that an\napplication is scheduled for consideration by a committee designated by\nthe public health and health planning council, the department shall also\nnotify the state office of the long-term care ombudsman, in writing or\nelectronically.\n  (c) In the case of an application for establishment relating to an\nexisting nursing home, the established operator and applicant shall\nprovide notice of the application, in writing or electronically, to\nresidents of the nursing home and their representatives and the staff of\nthe nursing home, including their union representatives, within thirty\ndays of acknowledgment of the application by the department. The\nestablished operator and applicant shall also immediately notify\nresidents of the nursing home and their representatives and the staff of\nthe nursing home, including their union representatives, when the\nestablished operator and applicant is notified that its application is\nscheduled for consideration by a committee designated by the public\nhealth and health planning council.\n  3. The public health and health planning council shall not approve a\ncertificate of incorporation, articles of organization or application\nfor establishment unless it is satisfied, insofar as applicable, as to\n(a) the public need for the existence of the institution at the time and\nplace and under the circumstances proposed, provided, however, that in\nthe case of an institution proposed to be established or operated by an\norganization defined in subdivision one of section one hundred\nseventy-two-a of the executive law, the needs of the members of the\nreligious denomination concerned, for care or treatment in accordance\nwith their religious or ethical convictions, shall be deemed to be\npublic need; (b) the character, competence, and standing in the\ncommunity, of the proposed incorporators, directors, sponsors,\nstockholders, members or operators; with respect to any proposed\nincorporator, director, sponsor, stockholder, member or operator who is\nalready or within the past ten years has been an incorporator, director,\nsponsor, member, principal stockholder, principal member, or operator of\nany hospital, private proprietary home for adults, residence for adults,\nor non-profit home for the aged or blind which has been issued an\noperating certificate by the state department of social services, or a\nhalfway house, hostel or other residential facility or institution for\nthe care, custody or treatment of the mentally disabled which is subject\nto approval by the department of mental hygiene, no approval shall be\ngranted unless the public health and health planning council, having\nafforded an adequate opportunity to members of health systems agencies,\nif any, having geographical jurisdiction of the area where the\ninstitution is to be located to be heard, shall affirmatively find by\nsubstantial evidence as to each such incorporator, director, sponsor,\nprincipal stockholder or operator that a substantially consistent high\nlevel of care is being or was being rendered in each such hospital,\nhome, residence, halfway house, hostel, or other residential facility or\ninstitution with which such person is or was affiliated; for the\npurposes of this paragraph, the public health and health planning\ncouncil shall adopt rules and regulations, subject to the approval of\nthe commissioner, to establish the criteria to be used to determine\nwhether a substantially consistent high level of care has been rendered,\nprovided, however, that there shall not be a finding that a\nsubstantially consistent high level of care has been rendered where\nthere have been violations of the state hospital code, or other\napplicable rules and regulations, that (i) threatened to directly affect\nthe health, safety or welfare of any patient or resident, and (ii) were\nrecurrent or were not promptly corrected; (c) the financial resources of\nthe proposed institution and its sources of future revenues; and (d)\nsuch other matters as it shall deem pertinent.\n  3-a. Notwithstanding any other provisions of this chapter, the public\nhealth council is hereby empowered to approve the establishment, for\ndemonstration purposes, of not more than one existing hospital within\nthe geographical jurisdiction of each health systems agency established\nunder the provisions of subdivision (c) of section twenty-nine hundred\nfour of this chapter. The purposes of such hospitals shall be to offer\nand provide nursing home services, board and lodging to persons\nrequiring such services within one hospital. The public health council\nmay approve the establishment of such hospitals without regard to the\nrequirement of public need as set forth in subdivision three of this\nsection.\n  3-b. (a) This subdivision applies to an application under this section\nrelating to a nursing home, and applies in addition to subdivision three\nof this section.\n  (b) The application shall provide information as to the character,\ncompetence and standing in the community of every individual and entity\nof the applicant and specify the identity of every nursing home in which\neach of those individuals and entities is, or in the preceding seven\nyears has held a controlling interest or has been a controlling person,\nprincipal stockholder or principal member; and the nature of that\ninterest. As used in this subdivision, "individual and entity of the\napplicant" shall include but not be limited to an individual or entity\nthat is a controlling person, principal stockholder, or principal member\nof the applicant. The council shall not approve the application unless\nit finds that each individual and entity, in relation to ownership of a\nnursing home located in the United States, for at least the previous\nseven years, demonstrated satisfactory character, competence and\nstanding in the community and the nursing home provided a consistently\nhigh level of care. The council shall adopt rules and regulations,\nsubject to the approval of the commissioner, to establish the criteria\nto be used to determine whether a consistently high level of care has or\nhas not been rendered by an applicant at such nursing home. The council\nshall consider, at a minimum, the following occurrences to determine\nwhether a consistently high level of care has been delivered at a\nfacility, and shall require the applicant to disclose and provide an\nexplanation for any of the following occurrences: (i) a facility that\nhas earned a two-star rating or less by the federal centers for Medicare\nand Medicaid Services (CMS) (or a comparable rating under a successor\nCMS rating system);(ii) where there have been violations of the state or\nfederal nursing home code, or other applicable rules and regulations,\nthat threatened to directly affect the health, safety or welfare of any\npatient or resident, including but not limited to a finding of immediate\njeopardy, or actual harm, and were recurrent or were not promptly\ncorrected, including but not limited to repeat deficiencies for the same\nor similar violations over a three year period or during the entire\nduration of ownership if less than three years, or any facility which\nhas been in receivership; (iii) where a facility has closed as a result\nof a settlement agreement from a decertification action or licensure\nrevocation; or (iv) has been involuntarily terminated from the Medicare\nor Medicaid program in the prior five years, provided however, that\nwhere an applicant has taken over a facility and promptly corrected such\ndeficiencies, the council may consider the application.\n  4. (a) Any change in the person who is the operator of a hospital\nshall be approved by the public health and health planning council in\naccordance with the provisions of subdivisions two and three of this\nsection. Notwithstanding any inconsistent provision of this paragraph,\nany change by a natural person who is the operator of a hospital seeking\nto transfer part of his or her interest in such hospital to another\nperson or persons so as to create a partnership shall be approved in\naccordance with the provisions of paragraph (b) of this subdivision.\n  (b) (i) Any transfer, assignment or other disposition of ten percent\nor more of an interest or voting rights in a partnership or limited\nliability company, which is the operator of a hospital to a new partner\nor member, shall be approved by the public health and health planning\ncouncil, in accordance with the provisions of subdivisions two and three\nof this section, except that: (A) any such change shall be subject to\nthe approval by the public health and health planning council in\naccordance with paragraph (b) of subdivision three of this section only\nwith respect to the new partner or member, and any remaining partners or\nmembers who have not been previously approved for that facility in\naccordance with such paragraph, and (B) such change shall not be subject\nto paragraph (a) of subdivision three of this section.\n  (ii) With respect to a transfer, assignment or disposition involving\nless than ten percent of an interest or voting rights in such\npartnership or limited liability company to a new partner or member, no\nprior approval of the public health and health planning council shall be\nrequired. However, no such transaction shall be effective unless at\nleast ninety days prior to the intended effective date thereof, the\npartnership or limited liability company fully completes and files with\nthe public health and health planning council notice on a form, to be\ndeveloped by the public health and health planning council, which shall\ndisclose such information as may reasonably be necessary for the public\nhealth and health planning council to determine whether it should bar\nthe transaction for any of the reasons set forth in item (A), (B), (C)\nor (D) below. Within ninety days from the date of receipt of such\nnotice, the public health and health planning council may bar any\ntransaction under this subparagraph: (A) if the equity position of the\npartnership or limited liability company, determined in accordance with\ngenerally accepted accounting principles, would be reduced as a result\nof the transfer, assignment or disposition; (B) if the transaction would\nresult in the ownership of a partnership or membership interest by any\npersons who have been convicted of a felony described in subdivision\nfive of section twenty-eight hundred six of this article; (C) if there\nare reasonable grounds to believe that the proposed transaction does not\nsatisfy the character and competence criteria set forth in subdivision\nthree of this section; or (D) if the transaction, together with all\ntransactions under this subparagraph for the partnership, or successor,\nduring any five year period would, in the aggregate, involve twenty-five\npercent or more of the interest in the partnership. The public health\nand health planning council shall state specific reasons for barring any\ntransaction under this subparagraph and shall so notify each party to\nthe proposed transaction.\n  (iii) With respect to a transfer, assignment or disposition of an\ninterest or voting rights in such partnership or limited liability\ncompany to any remaining partner or member, which transaction involves\nthe withdrawal of the transferor from the partnership or limited\nliability company, no prior approval of the public health and health\nplanning council shall be required. However, no such transaction shall\nbe effective unless at least ninety days prior to the intended effective\ndate thereof, the partnership or limited liability company fully\ncompletes and files with the public health and health planning council\nnotice on a form, to be developed by the public health and health\nplanning council, which shall disclose such information as may\nreasonably be necessary for the public health and health planning\ncouncil to determine whether it should bar the transaction for the\nreason set forth below. Within ninety days from the date of receipt of\nsuch notice, the public health and health planning council may bar any\ntransaction under this subparagraph if the equity position of the\npartnership or limited liability company, determined in accordance with\ngenerally accepted accounting principles, would be reduced as a result\nof the transfer, assignment or disposition. The public health and health\nplanning council shall state specific reasons for barring any\ntransaction under this subparagraph and shall so notify each party to\nthe proposed transaction.\n  (c) Any transfer, assignment or other disposition of ten percent or\nmore of the stock or voting rights thereunder of a corporation which is\nthe operator of a hospital or which is a member of a limited liability\ncompany which is the operator of a hospital to a new stockholder, or any\ntransfer, assignment or other disposition of the stock or voting rights\nthereunder of such a corporation which results in the ownership or\ncontrol of more than ten percent of the stock or voting rights\nthereunder of such corporation by any person not previously approved by\nthe public health and health planning council, or its predecessor, for\nthat corporation shall be subject to approval by the public health and\nhealth planning council, in accordance with the provisions of\nsubdivisions two and three of this section and rules and regulations\npursuant thereto; except that: any such transaction shall be subject to\nthe approval by the public health and health planning council in\naccordance with paragraph (b) of subdivision three of this section only\nwith respect to a new stockholder or a new principal stockholder; and\nshall not be subject to paragraph (a) of subdivision three of this\nsection. In the absence of such approval, the operating certificate of\nsuch hospital shall be subject to revocation or suspension. No prior\napproval of the public health and health planning council shall be\nrequired with respect to a transfer, assignment or disposition of ten\npercent or more of the stock or voting rights thereunder of a\ncorporation which is the operator of a hospital or which is a member of\na limited liability company which is the owner of a hospital to any\nperson previously approved by the public health and health planning\ncouncil, or its predecessor, for that corporation. However, no such\ntransaction shall be effective unless at least ninety days prior to the\nintended effective date thereof, the stockholder completes and files\nwith the public health and health planning council notice on forms to be\ndeveloped by the public health and health planning council, which shall\ndisclose such information as may reasonably be necessary for the public\nhealth and health planning council to determine whether it should bar\nthe transaction. Such transaction will be final as of the intended\neffective date unless, prior thereto, the public health and health\nplanning council shall state specific reasons for barring such\ntransactions under this paragraph and shall notify each party to the\nproposed transaction. Nothing in this paragraph shall be construed as\npermitting a person not previously approved by the public health and\nhealth planning council for that corporation to become the owner of ten\npercent or more of the stock of a corporation which is the operator of a\nhospital or which is a member of a limited liability company which is\nthe owner of a hospital without first obtaining the approval of the\npublic health and health planning council.\n  (d) No hospital shall be approved for establishment which would be\noperated by a limited partnership, or by a partnership any of the\nmembers of which are not natural persons.\n  (e) No hospital shall be approved for establishment which would be\noperated by a corporation any of the stock of which is owned by another\ncorporation or a limited liability company if any of its corporate\nmembers' stock is owned by another corporation.\n  (f) No corporation shall be a member of a limited liability company\nauthorized to operate a hospital unless its proposed incorporators,\ndirectors, stockholders or principal stockholders shall have been\napproved in accordance with the provisions of subdivision three of this\nsection applicable to the approval of the proposed incorporators,\ndirectors or stockholders of any other corporation requiring approval\nfor establishment.\n  (g) A natural person appointed as trustee of an express testamentary\ntrust, created by a deceased sole proprietor, partner or shareholder in\nthe operation of a hospital for the benefit of a person of less than\ntwenty-five years of age, may, as the trustee, apply pursuant to\nsubdivision two of this section for approval to operate or participate\nin the operation of a facility or interest therein which is included in\nthe corpus of such trust until such time as all beneficiaries attain the\nage of twenty-five, unless the trust instrument provides for earlier\ntermination, or such beneficiaries receive establishment approval in\ntheir own right, or until a transfer of the trust corpus is approved by\nthe public health and health planning council, in accordance with this\nsubdivision and subdivisions two and three of this section, whichever\nfirst occurs. The public health and health planning council shall not\napprove any such application unless it is satisfied as to:\n  (i) the character, competence and standing in the community of each\nproposed trustee operator pursuant to the provisions of paragraph (b) of\nsubdivision three of this section; and\n  (ii) the ability of the trustee under the terms of the trust\ninstrument to operate or participate in the operation of the hospital in\na manner consistent with this chapter and regulations promulgated\npursuant thereto.\n  (h) A natural person appointed conservator pursuant to article\neighty-one of the mental hygiene law, or a natural person appointed\ncommittee of the property of an incompetent pursuant to article\neighty-one of the mental hygiene law or a sole proprietor, partner or\nshareholder of a hospital, may apply pursuant to subdivision two of this\nsection for approval to operate a hospital owned by the conservatee or\nincompetent for a period not exceeding two years or until a transfer of\nthe hospital is approved by the public health and health planning\ncouncil in accordance with subdivisions two and three of this section,\nwhichever occurs first. The public health and health planning council\nshall not approve any such application unless it is satisfied as to:\n  (i) the character, competence and standing in the community of the\nproposed conservator operator or committee operator pursuant to the\nprovisions of paragraph (b) of subdivision three of this section; and\n  (ii) the ability of the conservator or committee under the terms of\nthe court order to operate the hospital in a manner consistent with this\nchapter and regulations promulgated pursuant thereto.\n  (i) Upon recommendation by the commissioner, if the public health and\nhealth planning council finds by substantial evidence that an improper\ndelegation of management authority by a governing authority or operator\nof a general hospital has occurred as defined by paragraph (g) of\nsubdivision one of section twenty-eight hundred six-a of this article,\nthe establishment approval of such hospital shall be subject to\nrevocation or suspension.\n  5. Except as otherwise hereinafter provided, no county, city, town,\nvillage or other governmental subdivision shall establish or create any\nagency concerned with the establishment of any hospital as defined in\nthis article without securing the written approval of the public health\nand health planning council in accordance with the requirements and\nprocedures of subdivisions two and three of this section with respect to\ncertificates of incorporation, articles of organization and\nestablishment, except that the requirements relating to the proposed\nincorporators, directors and sponsors shall not apply. The preceding\nshall not apply to the establishment of state hospitals by the state of\nNew York or to the establishment of municipal hospitals by the city of\nNew York.\n  6. No corporation having power to solicit contributions for charitable\npurposes shall be deemed to have authority to solicit contributions for\nany purpose for which the approval of the public health and health\nplanning council is required, unless the certificate of incorporation\nspecifically makes provision therefor, and the written approval of the\npublic health and health planning council, or its predecessor is\nendorsed on or annexed to such certificate.\n  7. Where such approval has not been obtained the public health and\nhealth planning council may institute and maintain an action in the\nsupreme court through the attorney general to procure a judgment\ndissolving and vacating or annulling the certificate of incorporation of\n  (a) any such corporation, or\n  (b) any corporation hereafter incorporated, the name, purposes,\nobjects or the activities of which in any manner may lead to the belief\nthat the corporation possesses or may exercise any of such purposes.\n  8. No corporation heretofore formed, having among its powers the power\nto solicit contributions for charitable purposes, may solicit or\ncontinue to solicit contributions for a purpose for which the approval\nof the public health and health planning council is required without the\nwritten approval of the public health and health planning council,\nexcept: (a) a corporation which, prior to June first, nineteen hundred\nseventy, had received the approval of the state board of social welfare\nof a certificate of incorporation containing such power; or (b) a\ncorporation, which prior to December first, two thousand ten, had\nreceived the approval of the public health council of a certificate of\nincorporation containing such power. If such approval is not obtained\nand the corporation continues to solicit or to receive contributions for\nsuch purpose or advertises that it has obtained such approval, the\npublic health and health planning council may institute and maintain an\naction in the supreme court through the attorney general to procure a\njudgment dissolving and vacating or annulling the certificate of\nincorporation of any such corporation.\n  9. Only a natural person, a partnership or limited liability company\nmay hereafter undertake to engage in the business of operating or\nconducting a hospital, as defined in this article, for profit, except\nthat: (a) a person, partnership or corporation which owned and was\noperating a hospital on April fourth, nineteen hundred fifty-six, may\ncontinue to own and operate such hospital; (b) a business corporation\nmay, with the approval of the public health council, and in accordance\nwith the provisions of subdivisions two and three of this section,\nundertake to engage in the business of operating or conducting a\nhospital, as defined in this article for profit, provided that such\ncorporation shall not discriminate because of race, color, creed,\nnational origin or sponsor in admission or retention of patients; (c) a\nbusiness corporation owning and operating a nursing home on May\ntwenty-second, nineteen hundred sixty-nine, in accordance with\napplicable provisions of law, may continue to own and operate such\nnursing home; (d) a person who, or a partnership which, is operating a\nprivate proprietary nursing home in accordance with applicable\nprovisions of law may, with the approval of the public health and health\nplanning council, and in accordance with the provisions of subdivision\nthree of this section and any rules and regulations thereunder form a\nbusiness corporation to engage in the business of operating or\nconducting such nursing home, provided, however, that such corporation\nshall not discriminate because of race, color, creed, national origin or\nsponsor in admission or retention of patients; (e) a business\ncorporation operating a nursing home, which corporation was formed with\nthe approval of the state board of social welfare, may continue to own\nand operate such nursing home.\n  10. (a) The public health and health planning council, by a majority\nvote of its members, 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.\n  (b) (i) No approval of establishment shall be revoked, limited or\nannulled without first offering the person who received such approval\nthe opportunity of requesting a public hearing. (ii) The commissioner,\nat the request of the public health and health planning council, shall\nfix a time and place for any such hearing requested. (iii) Notice of the\ntime and place of the hearing shall be served in person or mailed by\nregistered mail to the person who has received establishment approval at\nleast twenty-one days before the date fixed for the hearing. (iv) Such\nperson shall file with the department, not less than eight days prior to\nthe hearing, a written answer. (v) All orders or determinations\nhereunder shall be subject to review as provided in article\nseventy-eight of the civil practice law and rules. Application for such\nreview must be made within sixty days after service in person or by\nregistered mail of a copy of such order or determination.\n  11. Any person filing a proposed certificate of incorporation,\narticles of organization or an application for establishment of a\nresidential health care facility for approval of the public health and\nhealth planning council shall file with the commissioner such\ninformation as may be prescribed by regulation, including, but not\nlimited to, the following:\n  (a) The name and address and a description of the interest held by\neach of the following persons:\n  (i) any person, who directly or indirectly, beneficially owns any\ninterest in the land on which the facility is located;\n  (ii) any person who, directly or indirectly, beneficially owns any\ninterest in the building in which the facility is located;\n  (iii) any person who, directly or indirectly, beneficially owns any\ninterest in any mortgage, note, deed of trust or other obligation\nsecured in whole or in part by the land on which or building in which\nthe facility is located; and\n  (iv) any person who, directly or indirectly, has any interest as\nlessor or lessee in any lease or sub-lease of the land on which or the\nbuilding in which the facility is located.\n  (b) If any person named in response to paragraph (a) of this\nsubdivision is a partnership or limited liability company, then the name\nand address of each partner or member.\n  (c) If any person named in response to paragraph (a) of this\nsubdivision is a corporation, other than a corporation whose shares are\ntraded on a national securities exchange or are regularly quoted in an\nover-the-counter market or which is a commercial bank, savings bank or\nsavings and loan association, then the name and address of each officer,\ndirector, stockholder and, if known, each principal stockholder and\ncontrolling person of such corporation.\n  (d) If any corporation named in response to paragraph (a) of this\nsubdivision is a corporation whose shares are traded on a national\nsecurities exchange or are regularly quoted in an over-the-counter\nmarket or which is a commercial bank, savings bank or savings and loan\nassociation, then the name and address of the principal executive\nofficers and each director and, if known, each principal stockholder of\nsuch corporation.\n  * (e) Information pertaining to staffing, the source of staffing, and\nstaff skill mix.\n  * NB Effective October 21, 2021\n  12. The following definitions shall be applicable to this section:\n  (a) "Controlling person" of any corporation, partnership, limited\nliability company or other entity means any person who by reason of a\ndirect or indirect ownership interest (whether of record or beneficial)\nhas the ability, acting either alone or in concert with others with\nownership or membership interests, to direct or cause the direction of\nthe management or policies of said corporation, partnership, limited\nliability company or other entity. Neither the commissioner nor any\nemployee of the department nor any member of a local legislative body of\na county or municipality, nor any county or municipal official except\nwhen acting as the administrator of a residential health care facility,\nshall, by reason of his or her official position, be deemed a\ncontrolling person of any corporation, partnership, limited liability\ncompany or other entity, nor shall any person who serves as an officer,\nadministrator or other employee of any corporation, partnership, limited\nliability company or other entity or as a member of a board of directors\nor trustees of any corporation be deemed to be a controlling person of\nsuch corporation, partnership, limited liability company or other entity\nas a result of such position or his or her official actions in such\nposition.\n  (b) "Principal stockholder" of a corporation means any person who\nbeneficially owns, holds or has the power to vote, ten percent or more\nof any class of securities issued by said corporation.\n  (c) "Principal member" of a limited liability company means any person\nwho beneficially owns, holds or has the power to vote, ten percent or\nmore interest determined by such member's share in the current profits\nof the limited liability company.\n  13. Any person who operates a hospital without the written approval of\nthe public health and health planning council shall be liable to the\npeople of the state for a civil penalty not to exceed ten thousand\ndollars for every such violation.\n  14. (a) The public health and health planning council may approve the\nestablishment of not-for-profit rural health networks as defined in\narticle twenty-nine-A of this chapter, pursuant to the provisions of\nsubdivisions two and three of this section, except that the public\nhealth and health planning council shall not consider the public need\nfor and financial resources and sources of future revenues of such\nnetworks which do not seek approval to operate a hospital. In addition\nto character and competence, the public health and health planning\ncouncil may take into consideration available network plans.\n  (b) The board of directors or trustees of a not-for-profit rural\nhealth network shall be comprised of a representative or representatives\nof participating providers and members of the general public residing in\nthe area served by such network.\n  15.  (a) Diagnostic or treatment centers established exclusively to\nprovide end stage renal disease services may be operated by corporations\nand limited liability companies formed under the laws of New York whose\nstockholders or members, as applicable, are not natural persons if such\ncorporations and limited liability companies and its principal\nstockholders and members, as applicable, and controlling persons comply\nwith all applicable requirements of this section and demonstrate, to the\nsatisfaction of the public health and health planning council,\nsufficient experience and expertise in delivering high quality end stage\nrenal disease care. For purposes of this subdivision, the public health\nand health planning council shall adopt and amend rules and regulations,\nnotwithstanding any inconsistent provision of this section, to address\nany matter it deems pertinent to the establishment and operation of\ndiagnostic or treatment centers pursuant to this subdivision; provided\nthat such rules and regulations shall include, but not be limited to\nprovisions governing or relating to: (i) any direct or indirect changes\nor transfers of ownership interests or voting rights in such\ncorporations and limited liability companies or their stockholders or\nmembers, as applicable, and provide for public health and health\nplanning council approval of any change in controlling interests,\nprincipal stockholders, principal members, controlling persons, parent\ncompany or sponsors; (ii) oversight of the operator and its stockholders\nor members, as applicable, including local governance of the diagnostic\nor treatment centers; and (iii) relating to the character and competence\nand qualifications of, and changes relating to, the directors, managers\nand officers of the operator and its principal stockholders, principal\nmembers, controlling persons, parent company or sponsors.\n  (b) The following provisions of this section shall not apply to\ndiagnostic or treatment centers operated pursuant to this subdivision:\n(i) paragraph (b) of subdivision three of this section, relating to\nstockholders and members; (ii) paragraph (c) of subdivision four of this\nsection, relating to the disposition of stock or voting rights; and\n(iii) paragraph (e) of subdivision four of this section, relating to the\nownership of stock or membership.\n  16. (a) The commissioner shall charge to applicants for the\nestablishment of hospitals the following application fee:\n    (i) For general hospitals:                              $3,000\n    (ii) For nursing homes:                                 $3,000\n    (iii) For safety net diagnostic and treatment centers\n          as defined in paragraph (c) of this subdivision:  $1,000\n    (iv) For all other diagnostic and treatment centers:    $2,000\n  (b) An applicant for both establishment and construction of a hospital\nshall not be subject to this subdivision and shall be subject to fees\nand charges as set forth in section twenty-eight hundred two of this\narticle.\n  (c) The commissioner may designate a diagnostic and treatment center\nor proposed diagnostic and treatment center as a "safety net diagnostic\nand treatment center" if it is operated or proposes to be operated by a\nnot-for-profit corporation or local health department; participates or\nintends to participate in the medical assistance program; demonstrates\nor projects that a significant percentage of its visits, as determined\nby the commissioner, were by uninsured individuals; and principally\nprovides primary care services as defined by the commissioner.\n  (d) The fees and charges paid by an applicant pursuant to this\nsubdivision for any application for establishment of a hospital approved\nin accordance with this section shall be deemed allowable capital costs\nin the determination of reimbursement rates established pursuant to this\narticle. The cost of such fees and charges shall not be subject to\nreimbursement ceiling or other penalties used by the commissioner for\nthe purpose of establishing reimbursement rates pursuant to this\narticle. All fees pursuant to this section shall be payable to the\ndepartment of health for deposit into the special revenue funds - other,\nmiscellaneous special revenue fund - 339, certificate of need account.\n  17. (a) Diagnostic or treatment centers or other facilities managed\nand administered by a local health department for the purpose of\nproviding limited health care services as defined by the commissioner\nmay be operated by a local health department. Such facilities shall be\nreferred to in this subdivision as "municipal limited health care\nservice facilities".\n  (b) The commissioner shall promulgate regulations for municipal\nlimited health care service facilities, which may be different from the\nregulations otherwise applicable to hospitals, including, but not\nlimited to: designating or limiting the diagnoses and services that may\nbe provided; employee health requirements; and requirements or\nguidelines for advertising and signage, disclosure of ownership\ninterests, informed consent, record keeping, referral for treatment,\ncase reporting to the patient's primary care or other health care\nproviders, design, construction, fixtures, and equipment.\n