NY Ment Hygiene L § 31.22 (2021)
2021 New York Laws MHY - Mental Hygiene Title E - General Provisions Article 31 - Regulation and Quality Control of Services for the Mentally Disabled 31.22 - Approval of Certain Certificates of Incorporation or Articles of Organization; Granting of Operating Certificates.

§ 31.22 Approval of certain certificates of incorporation or articles of           organization; granting of operating certificates.  (a)  No  certificate  of incorporation of a business or not-for-profit corporation, or articles of organization of a limited liability company, shall hereafter be filed which includes among its corporate purposes  or powers  the  establishment  or  operation  of  a  facility  for which an operating certificate is required by this article from the  commissioner of  the office of mental health or the solicitation of contributions for any such purpose, except with the written approval of  the  commissioner and,  when  otherwise  required by law, the approval of a justice of the supreme  court  endorsed  on  or   annexed   to   the   certificate   of incorporation.  (b)  An  application  for  approval  of  the  proposed  certificate of incorporation or articles  of  organization  shall  be  filed  with  the commissioner  together with such other forms and information as shall be prescribed by, or acceptable to, the commissioner.   The commissioner shall not approve a certificate of  incorporation  or articles  of organization or grant an operating certificate unless he is satisfied, insofar as applicable, as to (1)  the  public  need  for  the services  or  the  facility  which  the proposed corporation or proposed provider of services is empowered to perform or maintain at the time and place  and  under  the  circumstances  proposed;  (2)   the   character, competence  and standing in the community of the proposed incorporators, directors,  sponsors,  stockholders,  members,  managers,  partners,  or operators,  provided  that in making such determination the commissioner is authorized to consider whether or not, within ten years of  the  date of  the application, any such persons have been denied renewal for cause of an operating  certificate,  or  have  had  an  operating  certificate revoked   or  suspended  for  cause,  and  such  denial,  revocation  or suspension was not reversed after an  administrative  hearing  or  other appeal,  for  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  have  failed  to operate a program serving the mentally disabled, other disabled  persons  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 in continuous compliance with applicable laws or regulations within the previous ten years in any state; (3) the  financial  resources  of  the  proposed  corporation  or proposed  provider  of  services and its sources of future revenues; (4) the availability of facilities or services which may serve as alternates or  substitutes  for  the  facility  or  services  which  the   proposed corporation or proposed provider of services is empowered to maintain or render;  (5) such other matters as he shall deem pertinent in the public interest. The commissioner in  approving  the  proposed  certificate  of incorporation  or  articles  of  organization  or  issuing  the proposed operating certificate may request and consider  information  and  advice from  all  available  sources including local and regional mental health and health planning agencies and groups as  to  the  matters  set  forth herein.  If  the  commissioner proposes to disapprove the application he shall afford the applicant an opportunity to request a  public  hearing. The commissioner shall not take any action contrary to the advice of the health  systems agency for facilities other than community residences or residential care centers for adults until he affords an  opportunity  to the  agency  to  request a public hearing and, if so requested, a public hearing shall be held. The commissioner, on his own motion, may  hold  a public  hearing on the application. Any public hearings held pursuant to  this  subdivision  may  be  conducted  by  the  commissioner  or  by  an individual designated by the commissioner.  (c)  (1)  Any change in the person or entity which is the holder of an operating certificate of a facility for which an  operating  certificate has  been  issued  pursuant  to  this  article  shall be approved by the commissioner in accordance with the provisions of this  subdivision  and subdivisions  (a)  and  (b)  of  this section, except that: (i) any such change shall be subject to approval by the  commissioner  in  accordance with  paragraph two of subdivision (b) of this section only with respect to the new person or entity, and any remaining persons or  entities  who have  not  been previously approved for that facility in accordance with such paragraph; and (ii)  any  such  change  shall  not  be  subject  to paragraph one of subdivision (b) of this section.  (2)  Any  transfer,  assignment or other disposition of ten percent or more of the stock, membership interest or voting rights thereunder of  a corporation  or  a  limited  liability company which is the holder of an operating certificate for a facility providing mental  hygiene  services or  any transfer, assignment or other disposition of the stock or voting rights thereunder of such a corporation which results in  the  ownership or  control  of  more than ten percent of the stock, ownership or voting rights thereunder of such corporation or limited  liability  company  by any  person  shall  be  subject  to  approval  by  the  commissioner  in accordance with the provisions of this subdivision and subdivisions  (a) and  (b)  of this section and rules and regulations promulgated pursuant thereto. In the absence of such approval, the operating  certificate  of such facility shall be subject to revocation or suspension, except that: (i)   any   such  transaction  shall  be  subject  to  approval  by  the commissioner in accordance with paragraph two of subdivision (b) of this section only with  respect  to  a  new  stockholder,  member  or  a  new principal  stockholder;  and  (ii)  any  such  transaction  shall not be subject to paragraph one of subdivision (b) of this section.  (3) No operating certificate shall be  issued  for  a  facility  which would  be  operated by any partnership or limited liability company, any of the members of which are not natural persons.  (4) No operating certificate shall be  issued  for  a  facility  which would be operated by a corporation any of the stock of which is owned by another  corporation  or a limited liability company any of the stock of which is owned by another corporation.  (d) Where the approval required by subdivision (a) of this section has not been obtained, the commissioner may institute and maintain an action in the supreme court through the attorney general to procure a  judgment dissolving   and   vacating   or   annulling   (1)  the  certificate  of incorporation of any such corporation or articles of organization of any such limited liability company, or (2) the certificate of  incorporation of  any  corporation  or  articles  of  organization of any such limited liability company hereafter incorporated or formed, the name,  purposes, objectives,  or activities of which in any manner may reasonably lead to the belief that the corporation or limited liability  company  possesses or may exercise any of such purposes.