§ 32.31 Establishment or incorporation of facilities for chemical

dependence services.

(a) No provider of services or facility providing chemical dependence
services shall be established except with the written approval of the
commissioner. No certificate of incorporation of a business, membership
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 providing chemical dependence services or the solicitation of
contributions for any such purpose, or two or more of such purposes,
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. Notwithstanding any
other provision of law, the commissioner shall not require a corporation
to amend its certificate of incorporation or a limited liability company
to amend its articles of organization which includes among the purposes
of the corporation or limited liability company the establishment or
operation of a substance abuse program or alcoholism facility. Any such
corporate or limited liability company purposes, powers, or provisions
previously approved by the office shall be deemed consent by the office
for such corporation or limited liability company to provide chemical
dependence services. Nothing herein obviates the need for such
corporation or limited liability company to possess a valid operating
certificate.

(b) With respect to the incorporation or establishment of a provider
or facility providing chemical dependence services, the commissioner
shall give written approval after all of the following requirements have
been met:

1. 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, him or her. Thereafter, the
commissioner shall forward a copy of the proposed certificate or
articles or organization and application for establishment and
accompanying documents, to the local governmental unit of the area in
which such facility is to be located. The commissioner shall not act
upon such application until the local governmental unit has had a
reasonable time to submit their recommendations.

2. Upon receipt of the recommendations of the local governmental unit,
or the lapse of a reasonable time for comment, the commissioner shall
submit the application along with the recommendations of the local
governmental unit to the advisory council on alcoholism and substance
abuse services for its review and recommendation. The commissioner shall
not act upon an application for establishment of a facility without
having first given such advisory council a reasonable opportunity to
make its recommendation on the application.

3. The commissioner shall not take any action contrary to the
recommendation of the council unless he or she first appears before the
council and explains his or her reasons therefor. The commissioner shall
not take any action contrary to the advice of the local governmental
unit until he or she affords, to such entity, an opportunity to request
a public hearing and if so requested, a public hearing shall be held in
accordance with subdivision (e) of section 32.29 of this article. If the
commissioner proposes to disapprove the application he or she shall
afford the applicant an opportunity to request a public hearing in
accordance with subdivision (e) of section 32.29 of this article. The
commissioner may hold such a public hearing on the application on his or
her own motion. Any public hearing held pursuant to this subdivision may
be conducted by the commissioner or by any individual designated by the
commissioner.

(c) The commissioner shall not approve a certificate of incorporation
or articles of organization or application for establishment unless the
provisions of subdivision (a) of section 32.09 of this article have been
met and that the commissioner is satisfied, insofar as applicable, as
to:

1. the public need for the existence of the facility at the time and
place and under the circumstances proposed taking into consideration
local, regional, and statewide need;

2. the absence of availability and feasibility of development of
facilities or services which may serve as alternatives or substitutes
for the whole or any part of the proposed facility;

3. the character, competence and standing in the community of the
proposed incorporators, directors, members, partners, sponsors,
stockholders or operators; considering, with respect to any proposed
incorporator, director, member, partner, sponsor, stockholder or
operator who is already or within the past ten years has been an
incorporator, director, member, partner, sponsor, stockholder or
operator of any hospital, private proprietary home for adults, residence
for adults, or not-for-profit home for the aged or blind which has been
issued an operating certificate by the office of children and family
services or a halfway house, hostel or other facility or institution for
the care, custody or treatment of the mentally disabled which is subject
to approval by an office of the department, the level of care being or
having been rendered in each such hospital, home, residence, halfway
house, hostel, or other residential facility or institution with which
such person is or was affiliated;

4. the overall financial condition of the applicant, through review of
audited financial statements, taking into consideration the financial
resources of the proposed facility and of its sources of future
revenues; and

5. the sufficiency of such other matters as he or she shall deem in
the public interest.

(d) 1. Any change in the person who or partnership which is the
provider of services shall be approved by the commissioner in accordance
with the provisions of this subdivision and subdivisions (a) through (c)
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 provider of
services providing chemical dependence services or any transfer,
assignment or other disposition of the stock, ownership or voting rights
thereunder of such a corporation or a limited liability company 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) through (c) 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.

3. No facility shall be approved for establishment which would be
operated by a partnership or limited liability company any of the
members of which are not natural persons.

4. No facility shall be approved for establishment which would be
operated by a corporation any of the stock of which is owned by another
corporation.

5. No corporation having power to solicit contributions for charitable
purposes shall be deemed to have authority to solicit contributions for
any purposes for which the approval of the commissioner is required
pursuant to subdivision (a) of this section, unless the certificate of
incorporation or articles of organization specifically makes provisions
therefor, and the written approval of the commissioner is endorsed on or
annexed to such certificate or articles of organization. Where such
approval 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 the certificate
of incorporation or articles of organization of any such corporation or
limited liability company.

6. Only a natural person or a partnership existing under the
partnership law may hereafter undertake to engage in the business of
operating or conducting a facility providing chemical dependence
services for profit, except that: (i) a person, partnership or
corporation which owned and was operating such a facility on July first,
nineteen hundred eighty-three may continue to own and operate such
facility; (ii) a business corporation organized pursuant to the business
corporation law or a limited liability company organized pursuant to the
limited liability company law may, with the approval of the commissioner
and in accordance with the provisions of this section, undertake to
engage in the business of operating or conducting such a facility
provided that such corporation or limited liability company shall not
discriminate because of race, color, creed, national origin or sponsor
in admission or retention of patients; (iii) any person who, or a
partnership which, is operating a private proprietary facility in
accordance with applicable provisions of law may, with the approval of
the commissioner, and in accordance with the provisions of this section
and any rules and regulations thereunder, form a business corporation to
engage in the business of operating or conducting such facility,
provided, however, that such corporation shall not discriminate because
of race, color, creed, national origin or sponsor in admission or
retention of patients.

(e) The commissioner 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 or formation of limited liability companies or
incorporation of corporations.

(f) 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 such corporation or the
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.