NY Pub Health L § 2801-A (2021)
2021 New York Laws PBH - Public Health Article 28 - Hospitals 2801-A - Establishment or Incorporation of Hospitals.

§ 2801-a. Establishment or incorporation of hospitals. 1. No hospital, as defined in this article, shall be established except with the written approval   of   the  public  health  and  health  planning  council.  No certificate of incorporation of a business membership or  not-for-profit corporation  shall hereafter be filed which includes among its corporate purposes or powers the establishment or operation of  any  hospital,  as defined  in  this  article, or the solicitation of contributions for any such purpose, or two or more of such purposes, except with  the  written approval  of  the  public  health  and health planning council, and when otherwise required by law of a justice of the supreme court, endorsed on or  annexed  to  the  certificate  of  incorporation.  No  articles   of organization  of a limited liability company established pursuant to the New York limited liability company law which includes among  its  powers or purposes the establishment or operation of any hospital as defined in this  article,  shall  be filed with the department of state except upon the approval of the public health and health planning council.   2. With respect to the incorporation or establishment of any hospital, as defined in this  article,  the  public  health  and  health  planning council   shall  give  written  approval  after  all  of  the  following requirements have been met. An application for approval of the  proposed certificate  of incorporation, articles of organization or establishment shall be filed with  the  public  health  and  health  planning  council together  with  such  other forms and information as shall be prescribed by, or acceptable to, the public health  and  health  planning  council. Thereafter,  the public health and health planning council shall forward a copy of the proposed certificate or application for establishment, and accompanying documents, to the health systems  agency,  if  any,  having geographical  jurisdiction of the area where the proposed institution is to be located. The public health and health planning council  shall  act upon  such  application  after  the  health  systems  agency  has  had a reasonable time to submit their recommendations. At the time members  of the  public  health  and  health  planning  council are notified that an application is scheduled for consideration, the applicant and the health systems agency shall be so notified in writing. The  public  health  and health  planning  council  shall  afford the applicant an opportunity to present information in person concerning the application to a  committee designated by the council. The public health and health planning council shall  not  take any action contrary to the advice of the health systems agency until it affords to the health systems agency an  opportunity  to request a public hearing and, if so requested, a public hearing shall be held.  If  the  public  health  and  health planning council proposes to disapprove the application it shall afford the applicant an  opportunity to  request  a  public  hearing.  The  public health and health planning council may hold a public hearing on the application on its own  motion. Any public hearing held pursuant to this subdivision may be conducted by the  public  health  and  health  planning council, or by any individual designated by the public health and health planning  council.  Beginning on   January   first,   nineteen  hundred  ninety-four,  and  each  year thereafter, a complete application received between  January  first  and June  thirtieth of each year shall be reviewed by the appropriate health systems agency and the department and presented to the public health and health planning council for its consideration prior to June thirtieth of the following year and a  complete  application  received  between  July first  and  December  thirty-first of each year shall be reviewed by the appropriate health systems agency and the department  presented  to  the public  health  and  health  planning council for consideration prior to December thirty-first of the following year.    2-a. (a) Notwithstanding any provision of law  to  the  contrary,  the commissioner  is authorized to approve a certificate of incorporation or articles of organization for establishment of a hospital, provided that: (i)  the  certificate  of  incorporation  or  articles  of  organization reflects  solely a change in the form of the business organization of an existing entity which had been approved by the public health and  health planning  council  or  its  predecessor;  and  (ii)  every incorporator, stockholder, member, director and sponsor of the new entity  shall  have been  an  owner, partner, incorporator, stockholder, member, director or sponsor of the existing entity; and (iii) the distribution of ownership, interests and voting rights in the new entity shall be the  same  as  in the  existing  entity; and (iv) there shall be no change in the operator of a hospital other than the form of its  business  organization,  as  a result  of the approval of such certificate of incorporation or articles of organization. Any approval by the public health and  health  planning council  of  a  person  as  an owner, incorporator, stockholder, member, director or sponsor in  the  existing  entity  shall  be  deemed  to  be approval  for the same degree of participation in the new entity. If the proposal  is  acceptable  to  the  commissioner  an  amended   operating certificate  shall  be  issued. In the event the commissioner determines that the proposed transfer is not approvable the  application  shall  be referred to the public health and health planning council for its review and action. If the public health and health planning council proposes to disapprove the application, it shall afford the applicant an opportunity to request a public hearing and, if so requested, a public hearing shall be  held.  Any  public  hearing held pursuant to this subdivision may be conducted by the public health and health planning council,  or  by  any individual designated by the public health and health planning council.   2-b. (a) This subdivision applies with respect to an application under this  section  relating  to  the  incorporation  or establishment of any nursing home, in addition to subdivision two of this section.  (b) The department shall provide notice, in writing or electronically, of an application for establishment to the  state  office  of  long-term care ombudsman, within thirty days of acknowledgement of the application by  the  department.  Thereafter, the state office of the long-term care ombudsman shall submit its recommendation to the department and  to  the public  health  and health planning council for consideration about such application. At the time members of such council are  notified  that  an application  is scheduled for consideration by a committee designated by the public health and health planning council, the department shall also notify the state office of the long-term care ombudsman, in  writing  or electronically.  (c)  In  the  case  of an application for establishment relating to an existing nursing home, the  established  operator  and  applicant  shall provide  notice  of  the  application,  in writing or electronically, to residents of the nursing home and their representatives and the staff of the nursing home, including their union representatives,  within  thirty days  of  acknowledgment  of  the  application  by  the  department. The established  operator  and  applicant  shall  also  immediately   notify residents of the nursing home and their representatives and the staff of the  nursing  home,  including  their  union  representatives,  when the established operator and applicant is notified that its  application  is scheduled  for  consideration  by  a  committee designated by the public health and health planning council.   3. The public health and health planning council shall not  approve  a certificate  of  incorporation,  articles of organization or application for establishment unless it is satisfied, insofar as applicable,  as  to (a) the public need for the existence of the institution at the time and  place  and  under the circumstances proposed, provided, however, that in the case of an institution proposed to be established or operated by  an organization   defined   in  subdivision  one  of  section  one  hundred seventy-two-a  of  the  executive  law,  the needs of the members of the religious denomination concerned, for care or  treatment  in  accordance with  their  religious  or  ethical  convictions,  shall be deemed to be public  need;  (b)  the  character,  competence,  and  standing  in  the community,   of   the   proposed   incorporators,  directors,  sponsors, stockholders,  members  or  operators;  with  respect  to  any  proposed incorporator,  director, sponsor, stockholder, member or operator who is already or within the past ten years has been an incorporator, director, sponsor, member, principal stockholder, principal member, or operator of any hospital, private proprietary home for adults, residence for adults, or non-profit home for the aged  or  blind  which  has  been  issued  an operating  certificate  by the state department of social services, or a halfway house, hostel or other residential facility or  institution  for the care, custody or treatment of the mentally disabled which is subject to  approval  by  the department of mental hygiene, no approval shall be granted unless the public health and  health  planning  council,  having afforded  an adequate opportunity to members of health systems agencies, if  any,  having  geographical  jurisdiction  of  the  area  where   the institution  is  to  be located to be heard, shall affirmatively find by substantial evidence as to each such  incorporator,  director,  sponsor, principal  stockholder  or operator that a substantially consistent high level of care is being or was being  rendered  in  each  such  hospital, home, residence, halfway house, hostel, or other residential facility or institution  with  which  such  person  is  or  was  affiliated; for the purposes of this  paragraph,  the  public  health  and  health  planning council  shall  adopt  rules and regulations, subject to the approval of the commissioner, to establish the criteria  to  be  used  to  determine whether a substantially consistent high level of care has been rendered, provided,   however,   that   there  shall  not  be  a  finding  that  a substantially consistent high level of  care  has  been  rendered  where there  have  been  violations  of  the  state  hospital  code,  or other applicable rules and regulations, that (i) threatened to directly affect the health, safety or welfare of any patient or resident, and (ii)  were recurrent or were not promptly corrected; (c) the financial resources of the  proposed  institution  and  its sources of future revenues; and (d) such other matters as it shall deem pertinent.   3-a. Notwithstanding any other provisions of this chapter, the  public health  council  is  hereby  empowered to approve the establishment, for demonstration purposes, of not more than one  existing  hospital  within the  geographical jurisdiction of each health systems agency established under the provisions of subdivision (c) of section  twenty-nine  hundred four  of  this chapter. The purposes of such hospitals shall be to offer and  provide  nursing  home  services,  board  and  lodging  to  persons requiring  such  services within one hospital. The public health council may approve the establishment of such hospitals without  regard  to  the requirement  of  public  need  as set forth in subdivision three of this section.   3-b. (a) This subdivision applies to an application under this section relating to a nursing home, and applies in addition to subdivision three of this section.  (b) The application shall provide information  as  to  the  character, competence  and standing in the community of every individual and entity of the applicant and specify the identity of every nursing home in which each of those individuals and entities is, or  in  the  preceding  seven years  has held a controlling interest or has been a controlling person,  principal stockholder or  principal  member;  and  the  nature  of  that interest.  As  used  in  this subdivision, "individual and entity of the applicant" shall include but not be limited to an individual  or  entity that is a controlling person, principal stockholder, or principal member of  the  applicant. The council shall not approve the application unless it finds that each individual and entity, in relation to ownership of  a nursing  home  located  in  the United States, for at least the previous seven  years,  demonstrated  satisfactory  character,   competence   and standing  in  the community and the nursing home provided a consistently high level of care. The  council  shall  adopt  rules  and  regulations, subject  to  the approval of the commissioner, to establish the criteria to be used to determine whether a consistently high level of care has or has not been rendered by an applicant at such nursing home. The  council shall  consider,  at  a  minimum, the following occurrences to determine whether a consistently high level  of  care  has  been  delivered  at  a facility,  and  shall  require  the applicant to disclose and provide an explanation for any of the following occurrences: (i)  a  facility  that has earned a two-star rating or less by the federal centers for Medicare and  Medicaid  Services  (CMS) (or a comparable rating under a successor CMS rating system);(ii) where there have been violations of the state or federal nursing home code, or other applicable  rules  and  regulations, that  threatened to directly affect the health, safety or welfare of any patient or resident, including but not limited to a finding of immediate jeopardy, or actual harm,  and  were  recurrent  or  were  not  promptly corrected, including but not limited to repeat deficiencies for the same or  similar  violations  over  a  three year period or during the entire duration of ownership if less than three years, or  any  facility  which has  been in receivership; (iii) where a facility has closed as a result of a settlement agreement from a  decertification  action  or  licensure revocation;  or (iv) has been involuntarily terminated from the Medicare or Medicaid program in the prior  five  years,  provided  however,  that where an applicant has taken over a facility and promptly corrected such deficiencies, the council may consider the application.   4.  (a)  Any  change  in  the person who is the operator of a hospital shall be approved by the public health and health  planning  council  in accordance  with  the  provisions  of subdivisions two and three of this section. Notwithstanding any inconsistent provision of  this  paragraph, any change by a natural person who is the operator of a hospital seeking to  transfer  part  of  his  or her interest in such hospital to another person or persons so as to create a partnership  shall  be  approved  in accordance with the provisions of paragraph (b) of this subdivision.  (b)  (i)  Any transfer, assignment or other disposition of ten percent or more of an interest or voting rights  in  a  partnership  or  limited liability  company, which is the operator of a hospital to a new partner or member, shall be approved by the public health  and  health  planning council, in accordance with the provisions of subdivisions two and three of  this  section,  except that: (A) any such change shall be subject to the approval by  the  public  health  and  health  planning  council  in accordance  with paragraph (b) of subdivision three of this section only with respect to the new partner or member, and any remaining partners or members who have not been  previously  approved  for  that  facility  in accordance with such paragraph, and (B) such change shall not be subject to paragraph (a) of subdivision three of this section.  (ii)  With  respect to a transfer, assignment or disposition involving less  than  ten  percent  of  an  interest  or  voting  rights  in  such partnership  or limited liability company to a new partner or member, no prior approval of the public health and health planning council shall be required. However, no such transaction  shall  be  effective  unless  at  least  ninety  days  prior  to  the intended effective date thereof, the partnership or limited liability company fully completes and files  with the  public  health  and health planning council notice on a form, to be developed  by the public health and health planning council, which shall disclose such information as may reasonably be necessary for the  public health  and  health  planning council to determine whether it should bar the transaction for any of the reasons set forth in item (A),  (B),  (C) or  (D)  below.  Within  ninety  days  from  the date of receipt of such notice, the public health  and  health  planning  council  may  bar  any transaction  under  this subparagraph: (A) if the equity position of the partnership or limited liability company, determined in accordance  with generally  accepted  accounting principles, would be reduced as a result of the transfer, assignment or disposition; (B) if the transaction would result in the ownership of a partnership or membership interest  by  any persons  who  have  been  convicted of a felony described in subdivision five of section twenty-eight hundred six of this article; (C)  if  there are reasonable grounds to believe that the proposed transaction does not satisfy  the  character and competence criteria set forth in subdivision three of this section; or (D) if  the  transaction,  together  with  all transactions  under this subparagraph for the partnership, or successor, during any five year period would, in the aggregate, involve twenty-five percent or more of the interest in the partnership.  The  public  health and health planning council shall state specific reasons for barring any transaction  under  this  subparagraph and shall so notify each party to the proposed transaction.  (iii) With respect to a transfer,  assignment  or  disposition  of  an interest  or  voting  rights  in  such  partnership or limited liability company to any remaining partner or member, which  transaction  involves the  withdrawal  of  the  transferor  from  the  partnership  or limited liability company, no prior approval of the  public  health  and  health planning  council  shall be required. However, no such transaction shall be effective unless at least ninety days prior to the intended effective date  thereof,  the  partnership  or  limited  liability  company  fully completes  and  files with the public health and health planning council notice on a form, to be  developed  by  the  public  health  and  health planning   council,   which  shall  disclose  such  information  as  may reasonably be necessary  for  the  public  health  and  health  planning council  to  determine  whether  it  should  bar the transaction for the reason set forth below. Within ninety days from the date of  receipt  of such  notice,  the public health and health planning council may bar any transaction under this  subparagraph  if  the  equity  position  of  the partnership  or limited liability company, determined in accordance with generally accepted accounting principles, would be reduced as  a  result of the transfer, assignment or disposition. The public health and health planning   council   shall   state  specific  reasons  for  barring  any transaction under this subparagraph and shall so notify  each  party  to the proposed transaction.  (c)  Any  transfer,  assignment or other disposition of ten percent or more of the stock or voting rights thereunder of a corporation which  is the  operator  of a hospital or which is a member of a limited liability company which is the operator of a hospital to a new stockholder, 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  or  voting  rights thereunder  of such corporation by any person not previously approved by the public health and health planning council, or its  predecessor,  for that  corporation  shall be subject to approval by the public health and health  planning  council,  in  accordance  with   the   provisions   of  subdivisions  two  and  three  of this section and rules and regulations pursuant thereto; except that: any such transaction shall be subject  to the  approval  by  the  public  health  and  health  planning council in accordance  with paragraph (b) of subdivision three of this section only with respect to a new stockholder or a new  principal  stockholder;  and shall  not  be  subject  to  paragraph  (a) of subdivision three of this section. In the absence of such approval, the operating  certificate  of such  hospital  shall  be  subject to revocation or suspension. No prior approval of the public health  and  health  planning  council  shall  be required  with  respect  to a transfer, assignment or disposition of ten percent  or  more  of  the  stock  or  voting  rights  thereunder  of  a corporation  which is the operator of a hospital or which is a member of a limited liability company which is the owner  of  a  hospital  to  any person  previously  approved  by  the  public health and health planning council, or its predecessor, for  that  corporation.  However,  no  such transaction  shall be effective unless at least ninety days prior to the intended effective date thereof, the  stockholder  completes  and  files with the public health and health planning council notice on forms to be developed  by the public health and health planning council, which shall disclose such information as may reasonably be necessary for the  public health  and  health  planning council to determine whether it should bar the transaction. Such transaction will  be  final  as  of  the  intended effective  date  unless,  prior  thereto,  the  public health and health planning  council  shall  state  specific  reasons  for   barring   such transactions  under  this  paragraph  and shall notify each party to the proposed transaction. Nothing in this paragraph shall  be  construed  as permitting  a  person  not  previously approved by the public health and health planning council for that corporation to become the owner of  ten percent or more of the stock of a corporation which is the operator of a hospital  or  which  is a member of a limited liability company which is the owner of a hospital without first  obtaining  the  approval  of  the public health and health planning council.  (d)  No  hospital  shall  be approved for establishment which would be operated by a limited partnership,  or  by  a  partnership  any  of  the members of which are not natural persons.  (e)  No  hospital  shall  be approved for establishment which would be operated by a corporation any of the stock of which is owned by  another corporation  or  a  limited  liability  company  if any of its corporate members' stock is owned by another corporation.  (f) No corporation shall be a member of a  limited  liability  company authorized  to  operate  a  hospital  unless its proposed incorporators, directors,  stockholders  or  principal  stockholders  shall  have  been approved  in accordance with the provisions of subdivision three of this section applicable  to  the  approval  of  the  proposed  incorporators, directors  or  stockholders  of any other corporation requiring approval for establishment.  (g) A natural person appointed as trustee of an  express  testamentary trust,  created by a deceased sole proprietor, partner or shareholder in the operation of a hospital for the benefit of a  person  of  less  than twenty-five  years  of  age,  may,  as  the  trustee,  apply pursuant to subdivision two of this section for approval to operate  or  participate in  the operation of a facility or interest therein which is included in the corpus of such trust until such time as all beneficiaries attain the age of twenty-five, unless the trust  instrument  provides  for  earlier termination,  or  such  beneficiaries  receive establishment approval in their own right, or until a transfer of the trust corpus is approved  by the  public  health and health planning council, in accordance with this subdivision and subdivisions two and three of  this  section,  whichever  first  occurs.  The  public health and health planning council shall not approve any such application unless it is satisfied as to:  (i)  the  character,  competence and standing in the community of each proposed trustee operator pursuant to the provisions of paragraph (b) of subdivision three of this section; and  (ii) the  ability  of  the  trustee  under  the  terms  of  the  trust instrument to operate or participate in the operation of the hospital in a  manner  consistent  with  this  chapter  and  regulations promulgated pursuant thereto.  (h)  A  natural  person  appointed  conservator  pursuant  to  article eighty-one  of  the  mental  hygiene  law, or a natural person appointed committee  of  the  property  of  an  incompetent  pursuant  to  article eighty-one  of  the  mental hygiene law or a sole proprietor, partner or shareholder of a hospital, may apply pursuant to subdivision two of this section for approval to operate a hospital owned by the  conservatee  or incompetent  for a period not exceeding two years or until a transfer of the hospital is approved  by  the  public  health  and  health  planning council  in  accordance with subdivisions two and three of this section, whichever occurs first. The public health and  health  planning  council shall not approve any such application unless it is satisfied as to:  (i)  the  character,  competence  and standing in the community of the proposed conservator operator or  committee  operator  pursuant  to  the provisions of paragraph (b) of subdivision three of this section; and  (ii)  the  ability  of the conservator or committee under the terms of the court order to operate the hospital in a manner consistent with this chapter and regulations promulgated pursuant thereto.  (i) Upon recommendation by the commissioner, if the public health  and health  planning  council finds by substantial evidence that an improper delegation of management authority by a governing authority or  operator of  a  general  hospital  has  occurred  as  defined by paragraph (g) of subdivision one of section twenty-eight hundred six-a of  this  article, the  establishment  approval  of  such  hospital  shall  be  subject  to revocation or suspension.   5. Except as otherwise hereinafter provided, no  county,  city,  town, village  or other governmental subdivision shall establish or create any agency concerned with the establishment of any hospital  as  defined  in this  article without securing the written approval of the public health and health planning council in  accordance  with  the  requirements  and procedures of subdivisions two and three of this section with respect to certificates    of   incorporation,   articles   of   organization   and establishment, except that the requirements  relating  to  the  proposed incorporators,  directors  and  sponsors  shall not apply. The preceding shall not apply to the establishment of state hospitals by the state  of New  York  or to the establishment of municipal hospitals by the city of New York.   6. No corporation having power to solicit contributions for charitable purposes shall be deemed to have authority to solicit contributions  for any  purpose  for  which  the  approval  of the public health and health planning council is required, unless the  certificate  of  incorporation specifically  makes  provision therefor, and the written approval of the public health  and  health  planning  council,  or  its  predecessor  is endorsed on or annexed to such certificate.   7.  Where  such  approval  has not been obtained the public health and health planning council may institute and  maintain  an  action  in  the supreme  court  through  the  attorney  general  to  procure  a judgment dissolving and vacating or annulling the certificate of incorporation of  (a) any such corporation, or  (b)  any  corporation  hereafter  incorporated,  the  name,  purposes, objects  or the activities of which in any manner may lead to the belief that the corporation possesses or may exercise any of such purposes.   8. No corporation heretofore formed, having among its powers the power to  solicit  contributions  for  charitable  purposes,  may  solicit  or continue to solicit contributions for a purpose for which  the  approval of the public health and health planning council is required without the written  approval  of  the  public  health  and health planning council, except: (a) a corporation which, prior to June first,  nineteen  hundred seventy,  had received the approval of the state board of social welfare of a certificate of  incorporation  containing  such  power;  or  (b)  a corporation,  which  prior  to  December  first,  two  thousand ten, had received the approval of the public health council of a  certificate  of incorporation  containing  such  power. If such approval is not obtained and the corporation continues to solicit or to receive contributions for such purpose or advertises that  it  has  obtained  such  approval,  the public  health and health planning council may institute and maintain an action in the supreme court through the attorney general  to  procure  a judgment  dissolving  and  vacating  or  annulling  the  certificate  of incorporation of any such corporation.   9. Only a natural person, a partnership or limited  liability  company may  hereafter  undertake  to  engage  in  the  business of operating or conducting a hospital, as defined in this article,  for  profit,  except that:  (a)  a  person,  partnership  or  corporation which owned and was operating a hospital on April fourth, nineteen  hundred  fifty-six,  may continue  to  own  and operate such hospital; (b) a business corporation may, with the approval of the public health council, and  in  accordance with  the  provisions  of  subdivisions  two  and three of this section, undertake to engage  in  the  business  of  operating  or  conducting  a hospital,  as  defined  in  this  article for profit, provided that such corporation shall  not  discriminate  because  of  race,  color,  creed, national  origin or sponsor in admission or retention of patients; (c) a business  corporation  owning  and  operating  a  nursing  home  on  May twenty-second,   nineteen   hundred   sixty-nine,   in  accordance  with applicable provisions of law, may  continue  to  own  and  operate  such nursing  home;  (d) a person who, or a partnership which, is operating a private  proprietary  nursing  home  in   accordance   with   applicable provisions of law may, with the approval of the public health and health planning  council,  and in accordance with the provisions of subdivision three of this section and any rules and regulations  thereunder  form  a business   corporation  to  engage  in  the  business  of  operating  or conducting such nursing home, provided, however, that  such  corporation shall not discriminate because of race, color, creed, national origin or sponsor   in   admission  or  retention  of  patients;  (e)  a  business corporation operating a nursing home, which corporation was formed  with the  approval  of the state board of social welfare, may continue to own and operate such nursing home.   10. (a) The public health and health planning council, by  a  majority vote  of  its  members,  shall adopt and amend rules and regulations, to effectuate the provisions and purposes of this section, and  to  provide for   the   revocation,   limitation   or   annulment  of  approvals  of establishment.  (b) (i) No approval of establishment  shall  be  revoked,  limited  or annulled  without  first  offering the person who received such approval the opportunity of requesting a public hearing. (ii)  The  commissioner, at  the  request of the public health and health planning council, shall fix a time and place for any such hearing requested. (iii) Notice of the time and place of the hearing shall be served in  person  or  mailed  by  registered mail to the person who has received establishment approval at least  twenty-one  days before the date fixed for the hearing. (iv) Such person shall file with the department, not less than eight days prior to the  hearing,  a  written  answer.  (v)  All  orders  or  determinations hereunder  shall  be  subject  to  review   as   provided   in   article seventy-eight  of the civil practice law and rules. Application for such review must be made within sixty days after  service  in  person  or  by registered mail of a copy of such order or determination.   11.  Any  person  filing  a  proposed  certificate  of  incorporation, articles of organization  or  an  application  for  establishment  of  a residential  health  care facility for approval of the public health and health  planning  council  shall  file  with   the   commissioner   such information  as  may  be  prescribed  by  regulation, including, but not limited to, the following:  (a) The name and address and a description of  the  interest  held  by each of the following persons:  (i)  any  person,  who  directly  or indirectly, beneficially owns any interest in the land on which the facility is located;  (ii) any person who, directly or  indirectly,  beneficially  owns  any interest in the building in which the facility is located;  (iii)  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  (iv) 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.  (b) If  any  person  named  in  response  to  paragraph  (a)  of  this subdivision is a partnership or limited liability company, then the name and address of each partner or member.  (c)  If  any  person  named  in  response  to  paragraph  (a)  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.  (d) If any corporation named in response  to  paragraph  (a)  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.   * (e) Information pertaining to staffing, the source of staffing,  and staff skill mix.   * NB Effective October 21, 2021   12. The following definitions shall be applicable to this section:  (a)  "Controlling  person"  of  any  corporation, partnership, limited liability company or other entity means 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  or  membership interests, to direct or cause the direction of the management or policies of  said  corporation,  partnership,  limited liability  company  or  other  entity.  Neither the commissioner nor any employee of the department nor any member of a local legislative body of a county or municipality, nor any county or  municipal  official  except when  acting as the administrator of a residential health care facility,  shall,  by  reason  of  his  or  her  official  position,  be  deemed  a controlling  person  of  any corporation, partnership, limited liability company or other entity, nor shall any person who serves as an  officer, administrator or other employee of any corporation, partnership, limited liability company 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, limited liability company or other entity as a result of such position or his or  her  official  actions  in  such position.  (b)  "Principal  stockholder"  of  a  corporation means 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) "Principal member" of a limited liability company means any person who  beneficially  owns,  holds or has the power to vote, ten percent or more interest determined by such member's share in the  current  profits of the limited liability company.   13. Any person who operates a hospital without the written approval of the  public  health  and  health planning council shall be liable to the people of the state for a civil  penalty  not  to  exceed  ten  thousand dollars for every such violation.   14.  (a) The public health and health planning council may approve the establishment of not-for-profit rural  health  networks  as  defined  in article  twenty-nine-A  of  this  chapter, pursuant to the provisions of subdivisions two and three of  this  section,  except  that  the  public health  and  health  planning council shall not consider the public need for and financial resources and  sources  of  future  revenues  of  such networks  which  do not seek approval to operate a hospital. In addition to character and competence,  the  public  health  and  health  planning council may take into consideration available network plans.  (b)  The  board  of  directors  or  trustees of a not-for-profit rural health network shall be comprised of a representative or representatives of participating providers and members of the general public residing in the area served by such network.   15.  (a) Diagnostic or treatment centers  established  exclusively  to provide end stage renal disease services may be operated by corporations and  limited liability companies formed under the laws of New York whose stockholders or members, as applicable, are not natural persons if  such corporations   and   limited   liability  companies  and  its  principal stockholders and members, as applicable, and controlling persons  comply with all applicable requirements of this section and demonstrate, to the satisfaction   of   the  public  health  and  health  planning  council, sufficient experience and expertise in delivering high quality end stage renal disease care. For purposes of this subdivision, the public  health and health planning council shall adopt and amend rules and regulations, notwithstanding  any  inconsistent provision of this section, to address any matter it deems pertinent to  the  establishment  and  operation  of diagnostic  or  treatment centers pursuant to this subdivision; provided that such rules and regulations shall include, but  not  be  limited  to provisions  governing or relating to: (i) any direct or indirect changes or  transfers  of  ownership  interests  or  voting   rights   in   such corporations  and  limited  liability companies or their stockholders or members, as  applicable,  and  provide  for  public  health  and  health planning  council  approval  of  any  change  in  controlling interests, principal stockholders, principal members, controlling  persons,  parent company or sponsors; (ii) oversight of the operator and its stockholders or  members, as applicable, including local governance of the diagnostic or treatment centers; and (iii) relating to the character and competence and qualifications of, and changes relating to, the directors,  managers  and  officers  of the operator and its principal stockholders, principal members, controlling persons, parent company or sponsors.  (b)  The  following  provisions  of  this  section  shall not apply to diagnostic or treatment centers operated pursuant to  this  subdivision: (i)  paragraph  (b)  of  subdivision  three of this section, relating to stockholders and members; (ii) paragraph (c) of subdivision four of this section, relating to the disposition of  stock  or  voting  rights;  and (iii) paragraph (e) of subdivision four of this section, relating to the ownership of stock or membership.   16.   (a)   The  commissioner  shall  charge  to  applicants  for  the establishment of hospitals the following application fee:    (i) For general hospitals:                              $3,000    (ii) For nursing homes:                                 $3,000    (iii) For safety net diagnostic and treatment centers           as defined in paragraph (c) of this subdivision:  $1,000    (iv) For all other diagnostic and treatment centers:    $2,000  (b) An applicant for both establishment and construction of a hospital shall not be subject to this subdivision and shall be  subject  to  fees and  charges  as  set  forth in section twenty-eight hundred two of this article.  (c) The commissioner may designate a diagnostic and  treatment  center or  proposed diagnostic and treatment center as a "safety net diagnostic and treatment center" if it is operated or proposes to be operated by  a not-for-profit  corporation  or local health department; participates or intends to participate in the medical assistance  program;  demonstrates or  projects  that a significant percentage of its visits, as determined by the commissioner, were  by  uninsured  individuals;  and  principally provides primary care services as defined by the commissioner.  (d)  The  fees  and  charges  paid  by  an  applicant pursuant to this subdivision for any application for establishment of a hospital approved in accordance with this section shall be deemed allowable capital  costs in the determination of reimbursement rates established pursuant to this article.  The  cost  of  such  fees  and charges shall not be subject to reimbursement ceiling or other penalties used by  the  commissioner  for the  purpose  of  establishing  reimbursement  rates  pursuant  to  this article. All fees pursuant to this  section  shall  be  payable  to  the department of health for deposit into the special revenue funds - other, miscellaneous special revenue fund - 339, certificate of need account.