§ 4604. Certificate of authority required; application and approval.
1. No person shall construct, expand, acquire, maintain, or operate a
continuing care retirement community, or enter into a contract as an
operator, or solicit the execution of any contract for continuing care
retirement community services to be provided within the state or
advertise itself or otherwise hold itself as a "continuing care
retirement community", without obtaining a certificate of authority
pursuant to this article; provided, however, nothing in this subdivision
shall prohibit a person, authorized pursuant to section forty-six
hundred twenty-one or forty-six hundred twenty-two of this article, from
entering into priority reservation agreements, soliciting, collecting or
receiving priority reservation fees, or constructing and maintaining
sales offices and model units with respect to a proposed continuing care
retirement community.

2. In order to receive a certificate of authority to enter into
contracts with respect to a particular community, a person or persons,
hereinafter designated as the applicant, shall apply for a certificate
of authority on forms prescribed by the commissioner and, in addition,
shall submit the following:

a. a feasibility study, including a market analysis describing the
characteristics of the population to be served;

b. an actuarial study;

c. an initial disclosure statement as provided pursuant to section
forty-six hundred six of this title;

d. a copy of the proposed forms of contracts to be entered into with
residents;

e. complete details of any agreements with a licensed insurer,
including copies of proposed contracts, requiring the insurer to assume,
wholly or in part, the cost of medical or health related services to be
provided to a resident pursuant to a continuing care retirement contract
or continuing care at home contract;

f. a copy of each of the basic organizational documents and agreements
of the applicant of all participating entities;

g. a copy of the bylaws, rules and regulations and internal governing
documents of the applicant;

h. architectural program and sketches for the community;

i. the proposed community plan, including the number of independent
living units, skilled nursing facility beds, adult care facility beds,
if any, and a description of other social and health services provided
by the community;

j. copies of financial and personal disclosure information as required
by the council for the applicant and members of the board, officers, and
controlling persons of the proposed continuing care retirement
community, including:

(i) information necessary for the determination by the council of
character, competence, and experience, where information adequate to
make such determinations is not otherwise available to the council,

(ii) a list of continuing care retirement communities, adult care
facilities and health care facilities owned or operated by the
applicant, by any controlling persons of the applicant, or by entities
with which the members of the applicant's board are affiliated; the
address of each such facility; and the dates of ownership or operation
of each such facility,

(iii) in the event that any such community or facility specified in
this subdivision while under the control or operation of the applicant,
or any controlling person has been subjected to a limitation,
withdrawal, or refusal to grant accreditation by a recognized
accreditation organization, because of failure to comply with standards
governing the conduct and operation of the facility, information that
describes the nature of the violation, the agency or body enforcing the
standard (including its name and address), the steps taken by the
facility to remedy the violation, and an indication of whether any
accreditation has since been restored, and

(iv) a statement as to whether the applicant or any of its officers,
directors, partners, managers or a principal, parent or subsidiary
corporation:

(A) has been convicted of a crime or pleaded nolo contendere to a
felony charge, or been held liable or enjoined in a civil action by
final judgment if the criminal or civil action involved fraud,
embezzlement, fraudulent conversion, or misappropriation of property,

(B) had a prior discharge in bankruptcy or was found insolvent in any
court action,

(C) is or was subject to a currently effective injunctive or
restrictive order or federal or state administrative order relating to
business activity or health care as a result of an action brought by a
public agency or department, including, without limitation, actions
affecting a license to operate a hospital as defined by section
twenty-eight hundred one of this chapter, or a facility required to be
licensed or certified by the department. The statement shall set forth
the court or agency, date of conviction or judgment, the penalty imposed
or damages assessed, or the date, nature and issuer of the order;

k. information which describes the populations to be served; and

l. any other information as may be required by regulations adopted
pursuant to this article.

3. Nothing in this article shall be construed to enlarge, diminish or
modify: a social services district's otherwise valid recovery under
section three hundred sixty-nine of the social services law, nor medical
assistance eligibility under title eleven of article five of the social
services law nor applicable provisions of the estates, powers and trusts
law. Except as otherwise provided in this article, the activities of
continuing care retirement communities shall be subject to any other law
governing such activities including but not limited to article
twenty-eight of this chapter and article seven of the social services
law and regulations promulgated thereunder; provided, however, that the
provisions of paragraphs (d) and (e) of subdivision four of section
twenty-eight hundred one-a and section twenty-eight hundred two of this
chapter shall not apply, and provided that the provisions of paragraph
(a) of subdivision one and the provisions of subdivision two of section
four hundred sixty-one-b of the social services law with respect to
public need and the provisions of subdivision one of section four
hundred sixty-one-c of the social services law shall not apply to
residents who have been admitted in accordance with a contract provided
that, upon admission to the adult care facility, such residents shall be
given a notice which shall include, at a minimum, information regarding
facility services, resident responsibilities, supplemental services,
resident rights and protections and circumstances that warrant transfer.
The number of residential health care facility beds available pursuant
to subdivision five of this section, without proof of public need
therefor, shall be reduced by the number of residential health care
demonstration facility beds that are approved pursuant to this article.

4. No certificate of authority shall be issued unless an application
meeting the requirements of this section and all other requirements
established by law has been approved by:

a. (i) the superintendent of financial services as to the actuarial
principles involved, the financial feasibility of the facility, the form
and content of the proposed contracts to be entered into with residents
and insurance contracts between an operator and an insurer requiring the
insurer to assume, wholly or in part, the cost of medical or health
related services to be provided to a resident;

(ii) the superintendent of financial services as to the rates and
rating methodology, if any, to be used by the operator to determine any
entrance fee, monthly care fee and/or any separate charges for the
housing component of the continuing care contract including but not
limited to a cooperative or condominium fee charged to the resident as
proposed in said operator's application for certificate of authority.
Subsequent increases in any entrance or monthly care fee in excess of
fees calculated pursuant to the approved rating methodology shall
require approval of the superintendent. The term "rating methodology" as
used herein shall incorporate a combination of variables including but
not limited to a pricing structure for comparable services, projected
operating and health care costs and the applicable inflationary impact
thereon, projected income and occupancy rates and the refundability
component of the continuing care retirement contract.

(iii) the superintendent of financial services as to any monthly care
fee charged to a resident which may be increased or decreased subject to
approval by the superintendent of financial services, provided, that
monthly care fees may be increased or decreased without specific
approval as long as such increase or decrease does not exceed a relevant
cost index or indices which reflect all components of continuing care
including the costs associated with provision of health care as
determined and promulgated at least annually by the superintendent, and
provided further that the superintendent is notified of any such
increase or decrease prior to its taking effect.

(iv) An individual resident's monthly care fee shall not be modified
because of the increased need for services of that resident;

b. the commissioner as to those aspects of the application relating to
adult care facility beds, if any;

c. the public health and health planning council as to the
establishment of a skilled nursing facility by the applicant and as to
such other facilities and services as may require the public health and
health planning council's approval of the application; provided,
however, that the recommendations of the health systems agency having
geographical jurisdiction of the area where the continuing care
retirement community is located shall not be required with respect to
the establishment of an on-site or affiliated residential health care
facility to serve residents as part of the continuing care retirement
community, for up to the total number of residential health care
facility beds provided for in subdivision five of this section in
communities statewide;

d. the commissioner under section twenty-eight hundred two of this
chapter; provided, however, that, the recommendations of the public
health and health planning council and the health systems agency having
geographical jurisdiction of the area where the continuing care
retirement community is located shall not be required with respect to
the construction of an on-site or affiliated residential health care
facility to serve residents as part of the continuing care retirement
community, for up to the total number of residential health care
facility beds provided for in subdivision five of this section in
communities statewide; and

e. the attorney general as to those aspects of the application
relating to a cooperative, condominium or other equity arrangement for
the independent living unit, if any.

5. Up to two thousand residential health care facility beds, as
authorized herein, that may be approved as components of continuing care
retirement communities shall not be considered by the department and the
health systems agencies in the determination of public need for
residential health care facility services; provided, however, that if
the community seeking to construct such beds does not provide life care
to all residents, it must adequately make the assurances required by
subdivision two of section forty-six hundred twenty-four of this
article.

6. If the approvals required by subdivision four of this section have
been obtained, the council shall, by majority vote, either approve or
reject the application within sixty days of the date on which the last
such approval has been obtained. In order to approve the application,
the council shall have determined that:

a. the proposed community will meet a need and will fulfill the
purposes of this article;

b. the applicant has satisfied the requirements of this article;

c. the applicant has demonstrated to the satisfaction of the council
that the applicant and members of the board, officers, and controlling
persons of the applicant, are of such character, experience, competence
and standing in the community as to give reasonable assurance of their
ability to conduct the affairs of the proposed continuing care
retirement community in the best interest of the community and in the
public interest, and to provide proper care to residents. In the case of
an applicant that is controlled, the council must be satisfied that the
controlling person has also acted in a manner that is consistent with
the public interest;

d. the applicant has otherwise demonstrated the capability to
organize, market, manage, promote and operate the community and can be
expected to meet its obligations in accordance with this article and in
accordance with its contracts with residents;

e. the applicant has demonstrated that the total number of beds for
the nursing facility component and the adult care facility bears a
reasonable relation to the number of independent living units proposed
for such community; and

f. with respect to communities which include a residential health care
facility which does not require establishment approval under section
twenty-eight hundred one-a of this chapter, the applicant has sufficient
financial resources and sources of future revenues for the operation of
the residential health care facility component.

7. Any change in the legal entity operating the continuing care
retirement community, or in a controlling person of the community shall
require approval in the same manner as an original application;
provided, however, that the council may waive any requirement to provide
information that is not relevant to such change and provided, further,
that the continued public need for the community shall be presumed.

8. The operator shall designate and make knowledgeable personnel
available to prospective residents to answer questions about any
information contained in the disclosure statement or contract. The
disclosure statement and the contract shall each state on the cover or
top of the first page in bold twelve point print the following "This
matter involves a substantial financial investment and a legally binding
contract. In evaluating the disclosure statement and the contract prior
to any commitment, it is recommended that you consult with an attorney
and financial advisor of your choice, if you so elect, who can review
these documents with you."

9. If the council approves the application, the commissioner shall
issue the certificate of authority to the applicant.