* § 2806-a. Temporary operator. 1. For the purposes of this section:

(a) "adult care facility" shall mean an adult home or enriched housing
program licensed pursuant to article seven of the social services law or
an assisted living residence licensed pursuant to article forty-six-B of
this chapter;

(b) "established operator" shall mean the operator of an adult care
facility, a general hospital or a diagnostic and treatment center that
has been established and issued an operating certificate as such
pursuant to this article;

(c) "facility" shall mean (i) a general hospital or a diagnostic and
treatment center that has been issued an operating certificate as such
pursuant to this article; or (ii) an adult care facility;

(d) "temporary operator" shall mean any person or entity that:

(i) agrees to operate a facility on a temporary basis in the best
interests of its residents or patients and the community served by the
facility; and

(ii) has demonstrated that he or she has the character, competence and
financial ability to operate the facility in compliance with applicable
standards;

(e) "serious financial instability" shall include but not be limited
to defaulting or violating key covenants of loans, or missed mortgage
payments, or general untimely payment of obligations, including but not
limited to employee benefit fund, payroll tax, and insurance premium
obligations, or failure to maintain required debt service coverage
ratios or, as applicable, factors that have triggered a written event of
default notice to the department by the dormitory authority of the state
of New York; and

(f) "extraordinary financial assistance" shall mean state funds
provided to a facility upon such facility's request for the purpose of
assisting the facility to address serious financial instability. Such
funds may be derived from existing programs within the department,
special appropriations, or other funds.

(g) "improper delegation of management authority by the governing
authority or operator" of a general hospital shall include, but not be
limited to, the delegation to an entity that has not been established as
an operator of the general hospital of (i) authority to hire or fire the
administrator or other key management employees; (ii) maintenance and
control of the books and records; (iii) authority over the disposition
of assets and the incurring of liabilities on behalf of the facility;
and (iv) the adoption and enforcement of policies regarding the
operation of the facility. The criteria set forth in this paragraph
shall not be the sole determining factors, but indicators to be
considered with such other factors that may be pertinent in particular
instances. Professional expertise shall be exercised in the utilization
of the criteria. All of the listed indicia need not be present in a
given instance for there to be an improper delegation of authority.

2. (a) In the event that: (i) a facility seeks extraordinary financial
assistance and the commissioner finds that the facility is experiencing
serious financial instability that is jeopardizing existing or continued
access to essential services within the community, or (ii) the
commissioner finds that there are conditions within the facility that
seriously endanger the life, health or safety of residents or patients,
the commissioner may appoint a temporary operator to assume sole control
and sole responsibility for the operations of that facility, or (iii)
the commissioner finds that there has been an improper delegation of
management authority by the governing authority or operator of a general
hospital, the commissioner shall appoint a temporary operator to assume
sole control and sole responsibility for the operations of that
facility. The appointment of the temporary operator shall be effectuated
pursuant to this section and shall be in addition to any other remedies
provided by law.

(b) The established operator of a facility may at any time request the
commissioner to appoint a temporary operator. Upon receiving such a
request, the commissioner may, if he or she determines that such an
action is necessary to restore or maintain the provision of quality care
to the residents or patients or alleviate the facility's financial
instability, enter into an agreement with the established operator for
the appointment of a temporary operator to assume sole control and sole
responsibility for the operations of that facility.

3. (a) A temporary operator appointed pursuant to this section shall,
prior to his or her appointment as temporary operator, provide the
commissioner with a work plan satisfactory to the commissioner to
address the facility's deficiencies and serious financial instability
and a schedule for implementation of such plan. A work plan shall not be
required prior to the appointment of the temporary operator pursuant to
clause (ii) of paragraph (a) of subdivision two of this section if the
commissioner has determined that the immediate appointment of a
temporary operator is necessary because public health or safety is in
imminent danger or there exists any condition or practice or a
continuing pattern of conditions or practices which poses imminent
danger to the health or safety of any patient or resident of the
facility. Where such immediate appointment has been found to be
necessary, the temporary operator shall provide the commissioner with a
work plan satisfactory to the commissioner as soon as practicable.

(b) The temporary operator shall use his or her best efforts to
implement the work plan provided to the commissioner, if applicable, and
to correct or eliminate any deficiencies or financial instability in the
facility and to promote the quality and accessibility of health care
services in the community served by the facility. Such correction or
elimination of deficiencies or serious financial instability shall not
include major alterations of the physical structure of the facility.
During the term of his or her appointment, the temporary operator shall
have the sole authority to direct the management of the facility in all
aspects of operation and shall be afforded full access to the accounts
and records of the facility. The temporary operator shall, during this
period, operate the facility in such a manner as to promote safety and
the quality and accessibility of health care services or residential
care in the community served by the facility. The temporary operator
shall have the power to let contracts therefor or incur expenses on
behalf of the facility, provided that where individual items of repairs,
improvements or supplies exceed ten thousand dollars, the temporary
operator shall obtain price quotations from at least three reputable
sources. The temporary operator shall not be required to file any bond.
No security interest in any real or personal property comprising the
facility or contained within the facility, or in any fixture of the
facility, shall be impaired or diminished in priority by the temporary
operator. Neither the temporary operator nor the department shall engage
in any activity that constitutes a confiscation of property without the
payment of fair compensation.

4. The temporary operator shall be entitled to a reasonable fee, as
determined by the commissioner, and necessary expenses incurred during
his or her performance as temporary operator, to be paid from the
revenue of the facility. The temporary operator shall collect incoming
payments from all sources and apply them to the reasonable fee and to
costs incurred in the performance of his or her functions as temporary
operator in correcting deficiencies and causes of serious financial
instability. The temporary operator shall be liable only in his or her
capacity as temporary operator for injury to person and property by
reason of conditions of the facility in a case where an established
operator would have been liable; he or she shall not have any liability
in his or her personal capacity, except for gross negligence and
intentional acts.

5. (a) The initial term of the appointment of the temporary operator
shall not exceed one hundred eighty days. After one hundred eighty days,
if the commissioner determines that termination of the temporary
operator would cause significant deterioration of the quality of, or
access to, health care or residential care in the community or that
reappointment is necessary to correct the conditions within the facility
that seriously endanger the life, health or safety of residents or
patients, or the financial instability that required the appointment of
the temporary operator, the commissioner may authorize up to two
additional ninety-day terms.

(b) Upon the completion of the two ninety-day terms referenced in
paragraph (a) of this subdivision,

(i) if the established operator is the debtor in a bankruptcy
proceeding, and the commissioner determines that the temporary operator
requires additional terms to operate the facility during the pendency of
the bankruptcy proceeding and to carry out any plan resulting from the
proceeding, the commissioner may reappoint the temporary operator for
additional ninety-day terms until the termination of the bankruptcy
proceeding, provided that the commissioner shall provide for notice and
a hearing as set forth in subdivision six of this section; or

(ii) if the established operator requests the reappointment of the
temporary operator, the commissioner may reappoint the temporary
operator for one additional ninety-day term, pursuant to an agreement
between the established operator, the temporary operator and the
department.

(c) Within fourteen days prior to the termination of each term of the
appointment of the temporary operator, the temporary operator shall
submit to the commissioner and to the established operator a report
describing:

(i) the actions taken during the appointment to address such
deficiencies and financial instability,

(ii) objectives for the continuation of the temporary operatorship if
necessary and a schedule for satisfaction of such objectives,

(iii) recommended actions for the ongoing operation of the facility
subsequent to the term of the temporary operator including
recommendations regarding the proper management of the facility and
ongoing agreements with individuals or entities with proper delegation
of management authority; and

(iv) with respect to the first ninety-day term referenced in paragraph
(a) of this subdivision, a plan for sustainable operation to avoid
closure, or transformation of the facility which may include any option
permissible under this chapter or the social services law and
implementing regulations thereof. The report shall reflect best efforts
to produce a full and complete accounting.

(d) The term of the initial appointment and of any subsequent
reappointment may be terminated prior to the expiration of the
designated term, if the established operator and the commissioner agree
on a plan of correction and the implementation of such plan.

6. (a) The commissioner, upon making a determination to appoint a
temporary operator pursuant to paragraph (a) of subdivision two of this
section shall, prior to the commencement of the appointment, cause the
established operator of the facility to be notified of the determination
by registered or certified mail addressed to the principal office of the
established operator. Such notification shall include a detailed
description of the findings underlying the determination to appoint a
temporary operator, and the date and time of a required meeting with the
commissioner and/or his or her designee within ten business days of the
date of such notice. At such meeting, the established operator shall
have the opportunity to review and discuss all relevant findings. At
such meeting or within ten additional business days, the commissioner
and the established operator shall attempt to develop a mutually
satisfactory plan of correction and schedule for implementation. In the
event such plan of correction is agreed upon, the commissioner shall
notify the established operator that the commissioner no longer intends
to appoint a temporary operator. A meeting shall not be required prior
to the appointment of the temporary operator pursuant to clause (ii) of
paragraph (a) of subdivision two of this section if the commissioner has
determined that the immediate appointment of a temporary operator is
necessary because public health or safety is in imminent danger or there
exists any condition or practice or a continuing pattern of conditions
or practices which poses imminent danger to the health or safety of any
patient or resident of the facility. Where such immediate appointment
has been found to be necessary, the commissioner shall provide the
established operator with a notice as required under this paragraph on
the date of the appointment of the temporary operator.

(b) Should the commissioner and the established operator be unable to
establish a plan of correction pursuant to paragraph (a) of this
subdivision, or should the established operator fail to respond to the
commissioner's initial notification, a temporary operator shall be
appointed as soon as is practicable and shall operate pursuant to the
provisions of this section.

(c) The established operator shall be afforded an opportunity for an
administrative hearing on the commissioner's determination to appoint a
temporary operator. Such administrative hearing shall occur prior to
such appointment, except that the hearing shall not be required prior to
the appointment of the temporary operator pursuant to clause (ii) of
paragraph (a) of subdivision two of this section if the commissioner has
determined that the immediate appointment of a temporary operator is
necessary because public health or safety is in imminent danger or there
exists any condition or practice or a continuing pattern of conditions
or practices which poses imminent danger to the health or safety of any
patient or resident of the facility. An administrative hearing as
provided for under this paragraph shall begin no later than sixty days
from the date of the notice to the established operator and shall not be
extended without the consent of both parties. Any such hearing shall be
strictly limited to the issue of whether the determination of the
commissioner to appoint a temporary operator is supported by substantial
evidence. A copy of the decision shall be sent to the established
operator.

(d) The commissioner shall, upon making a determination to reappoint a
temporary operator for the first of an additional ninety-day term
pursuant to paragraph (a) of subdivision five of this section, cause the
established operator of the facility to be notified of the determination
by registered or certified mail addressed to the principal office of the
established operator. If the commissioner determines that additional
reappointments pursuant to subparagraph (i) of paragraph (b) of
subdivision five of this section are required, the commissioner shall
again cause the established operator of the facility to be notified of
such determination by registered or certified mail addressed to the
principal office of the established operator at the commencement of the
first of every two additional terms. Upon receipt of such notification
at the principal office of the established operator and before the
expiration of ten days thereafter, the established operator may request
an administrative hearing on the determination to begin no later than
sixty days from the date of the reappointment of the temporary operator.
Any such hearing shall be strictly limited to the issue of whether the
determination of the commissioner to reappoint the temporary operator is
supported by substantial evidence.

7. No provision contained in this section shall be deemed to relieve
the established operator or any other person of any civil or criminal
liability incurred, or any duty imposed by law, by reason of acts or
omissions of the established operator or any other person prior to the
appointment of any temporary operator hereunder; nor shall anything
contained in this section be construed to suspend during the term of the
appointment of the temporary operator any obligation of the established
operator or any other person for the payment of taxes or other operating
and maintenance expenses of the facility nor of the established operator
or any other person for the payment of mortgages or liens.

8. The commissioner shall cause the temporary president of the senate,
the speaker of the assembly, and the chairs of the senate and the
assembly health committees to be notified of the appointment of a
temporary operator pursuant to paragraph (a) of subdivision two of this
section upon such appointment. Such notification shall include, but not
be limited to, the name of the established operator, the name of the
appointed temporary operator and a description of the reasons for such
appointment to the extent practicable under the circumstances and in the
sole discretion of the commissioner.

* NB Repealed April 1, 2031