(a) Approval to operate an adult care facility, except for a shelter for adults addressed in Part 491 of this Title, shall be granted only to an operator who satisfactorily demonstrates and documents, on forms and in a manner prescribed by the department, that:

1. (1) The operator:

   1. (i) is of good moral character and standing in the community;
   2. (ii) has the competence to effectively operate the proposed program;
   3. (iii) has developed a facility and program of operation which is in compliance with applicable law and regulations; and
   4. (iv) possesses sufficient financial resources to successfully establish and operate the proposed program; and
2. (2) There exists a public need for the establishment and operation of the proposed facility.
3. (3) If more than one applicant proposes to establish an adult care facility in the same prescribed geographic area or to serve the same population, approval shall not be based solely on the date of application. The department will compare such factors as demonstrated competence, financial feasibility, the adequacy of the proposed program of care and services and the responsiveness of the application to the public need.

4. (4) A public hearing may be held by the department at its discretion to solicit comments and recommendations regarding the proposed adult home.

   (b) Character and competence.

5. (1) Determination of the adequacy of the applicant's character, competence and standing in the community of the proposed program, shall be made on assessment and verification of the information submitted by the applicant or solicited from other sources by the department, and shall be based upon such factors as financial status, education, experience, past or current performance in the management and operation of adult care facilities or like services to dependent adults; past business associations; letters of personal recommendation; information acquired through credit review, review of related public documents, public comment, or collateral contacts.

6. (2) If an applicant is, or within the past 10 years has been, an incorporator, director, operator, sponsor or principal stockholder of an adult-care facility, a facility certified by the Department of Mental Hygiene or a residential health care facility certified by the Department of Health, approval will be granted only if the department affirmatively finds that a substantially consistent high level of care is being or was being rendered in each such facility with which the applicant is or was affiliated. There may be a finding that a substantially consistent high level of care has been rendered where there have been violations of applicable rules and regulations that did not threaten to directly affect the health, safety or welfare of the patient or resident and were promptly corrected and not recurrent.

   (c) Public need.

7. (1) In determining whether there is a public need for adult home beds, the department must consider the following:

   1. (i) the number of certified and occupied adult home beds per 1,000 population 65 years of age or older in the area to be served, as compared to the statewide average of the number of such beds per 1,000 population;
   2. (ii) the number of persons 65 years of age or older residing in the area to be served, and the number of persons in receipt of SSI residing in adult homes in the area to be served, as compared to statewide averages for each;
   3. (iii) the percent of certified adult home beds that are occupied in the area to be served, as compared to the statewide average of occupied adult home beds;
   4. (iv) the number of persons awaiting placement into certified adult homes in the area to be served, as determined by the department;
   5. (v) recommendations from the social services district and the local office for the aging in the area to be served and a recommendation, if available, from the regional health systems agency in the area to be served;
   6. (vi) the availability of alternatives to adult homes, including certified family-type homes for adults and home care services in the area to be served; and
   7. (vii) the number of certified beds per 1,000 population 65 years of age or older in the counties that are contiguous to the county in which the proposed adult home would be located, and the number of persons from contiguous counties who have moved into adult homes in the county in which the proposed adult home would be located and the number of persons who have moved from the county in which the proposed adult home would be located into adult homes in contiguous counties; and
   8. (viii) such other information as the department may deem appropriate.

8. (2) In determining whether there is a public need for residence for adults beds, the department must consider the following:

   1. (i) the number of certified residence for adults beds per 1,000 population 18 years of age or older in the area to be served, as compared to the statewide average of the number of such beds per 1,000 population;
   2. (ii) the number of certified adult home beds occupied by persons who were discharged from psychiatric institutions per 1,000 population 18 years of age or older in the area to be served, as compared to the statewide average of the number of such beds per 1,000 population;
   3. (iii) the availability of alternatives to residences for adults, including housing certified by the Office of Mental Health in the area to be served;
   4. (iv) the projected need for beds for mentally disabled persons in the area to be served, as estimated by the Office of Mental Health;
   5. (v) recommendations from the social services district and the local governmental unit designated pursuant to section 41.05 of the Mental Hygiene Law in the area to be served; and
   6. (vi) such other information as the department may deem appropriate.

9. (3) The department may deny an application solely on the basis of a determination of lack of public need in advance of its consideration of any other certification criteria, including, but not limited to, the applicant's character and competence, architectural proposal, financial resources and the financial feasibility of the proposal, without waiving its right to consider such criteria at a later date.

   1. (i) If the department denies an application solely on the basis of lack of public need and the applicant requests an administrative hearing to review that denial, the department, at its discretion, may review the other certification criteria required by this section and include the results as grounds for the denial to be considered at the administrative hearing.
   2. (ii) Notice of any other grounds for the denial shall be mailed to the applicant at least 30 days prior to the date set for the administrative hearing.
10. (4) Without consideration of public need, the department may approve up to nine additional beds in any adult home or residence for adults in any five-year period.

11. (5) The following types of situations are excluded from determination of public need:

    1. (i) applications related exclusively to a change of operator;
    2. (ii) applications from the operator of a family-care home established under the Mental Hygiene Law and in operation prior to September 1, 1975;
    3. (iii) application from a social services official to establish a public home;
    4. (iv) construction or renovation designed to replace, on a bed-for-bed basis, an existing adult-care facility or part thereof for which the applicant holds a valid operating certificate. Such replacement shall be limited to the certified capacity of the existing facility and to the prescribed geographic area in which the existing facility was originally certified.

(d) The applicant shall submit part I of an application, which shall include:

1. (1) the type, name, exact location and proposed capacity of the facility;

2. (2) unless otherwise excluded by paragraph (c)(5) of this section, documentation of an unmet public need for the proposed facility, including but not limited to:

   1. (i) demographic data on the proposed resident population-at-risk;
   2. (ii) numbers of persons awaiting placement in other like adult care facilities;
   3. (iii) location, capacity and occupancy of existing residential facilities and alternative services in the community;
3. (3) statements of support from local governing bodies, elected officials, community service organizations and others potentially affected by construction or expansion of the facility;
4. (4) in the case of a not-for-profit corporation, the certificate of incorporation and amendments thereto;
5. (5) in the case of a partnership, a copy of the partnership agreement;
6. (6) a description of the governing structure of the proposed organization, including any governing boards and advisory committees;
7. (7) an applicant profile for each individual or partner and for the officers of the board of directors and, if applicable, the executive director or chief administrative officer of a not-for-profit corporation;
8. (8) three current letters of reference from nonrelated individuals qualified to assess the applicant's ability to successfully operate a facility for each individual partner and for the officers of the board of directors of a not-for-profit corporation;
9. (9) documentation of education, training and experience that have prepared the applicant(s) to operate the proposed facility;

10. (10) statement of assets and liabilities, sources and amounts of working capital, loan commitments (including purpose, source, type and amount), lease agreements, anticipated revenues and expenses by operating division for the start-up, initial and second year of operation and other evidence that actual financial resources exist or can be successfully acquired to:

    1. (i) successfully establish the proposed facility within the time periods set by the department;
    2. (ii) insure financial viability for the period of the initial operating certificate; and
    3. (iii) operate the facility in compliance with applicable law and regulations;

11. (11) a statement of real property ownership information, which shall include:

    1. (i) the name and address and a description of the interest held by each of the following persons:

       1. (a) any person who, directly or indirectly, beneficially owns any interest in the land on which the facility is located;
       2. (b) any person who, directly or indirectly, beneficially owns any interest in the building in which the facility is located;
       3. (c) 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
       4. (d) any person who, directly or indirectly, has any interest as lessor or lessee in any lease or sublease of the land on which, or the building in which, the facility is located;
    2. (ii) if any person named in response to subparagraph (i) of this paragraph is a partnership, then the name and address of each partner;
    3. (iii) if any person named in response to subparagraph (i) of this paragraph 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;
    4. (iv) if any corporation named in response to subparagraph (i) of this paragraph 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;
    5. (v) for the purpose of this paragraph, the term controlling person shall mean 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 interests, to direct or cause the direction of the management or policies of said corporation, partnership or other entity. Neither the department nor any employee of the department shall, by reason of his or her official position, be deemed a controlling person of any corporation, partnership 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 or other entity as a result of such position or his or her official actions in such position. The term principal stockholder shall mean any person who beneficially owns, holds or has the power to vote, 10 percent or more of any class of securities issued by said corporation;
12. (12) copies of all lease and purchase agreements;

13. (13) a signed agreement between an enriched housing operator and building manager if the applicant does not own or control the building in which the enriched housing program is to be located. This agreement shall outline the terms by which the enriched housing program will operate within the building and shall contain, but not be limited to, a statement from the building management which:

    1. (i) grants approval for the enriched housing program to operate within the building;
    2. (ii) delineates the building space to be available to the operator;
    3. (iii) describes the services to be provided by the building management; and
    4. (iv) provides for six months' minimum notice of termination of the agreement by either party;
14. (14) names and locations of each and every facility licensed by the department, the Department of Mental Hygiene pursuant to articles 19, 23 and 31 of the Mental Hygiene Law, the Department of Health pursuant to article 28 of the Public Health Law, or of any facility which, if located in New York State, would require such licensure with which the applicant(s) is, or has been within the past 10 years, an operator, administrator, employee, incorporator, director, sponsor, principal stockholder or owner;
15. (15) a description of the kinds of services to be provided to the proposed resident population;

16. (16) a description of the availability of existing:

    1. (i) recreational, social, volunteer, religious and other community support services;
    2. (ii) safety services, such as police and fire protection;
    3. (iii) health, mental health and social support services;
17. (17) a preliminary staffing plan;
18. (18) a physical description of the facility, including land, buildings and equipment;
19. (19) if new construction, renovation or alteration is planned, architectural plans and specifications sufficient to determine financial feasibility and compliance with physical plant requirements;
20. (20) documentation of compliance with applicable local ordinances;
21. (21) signed authorization allowing the commissioner, his/her designees or agents, to undertake such investigations as may be necessary to ascertain the validity of statements represented to the department or to ascertain from independent sources the character, competence and standing in the community of the applicant.

(f) Within 90 days of notice of approval for part I, the applicant shall submit, on forms and in a manner prescribed by the department, the following part II information:

1. (1) The applicant for an adult home or residence for adults shall submit:

   1. (i) a plan for administration, including personnel policies and procedures, job descriptions, staff orientation and in-service training, planned staffing schedules;
   2. (ii) the job descriptions and, prior to employment, the qualifications for the administrator and, if applicable, case manager and activities director;
   3. (iii) a description of the proposed resident services program, including all services the applicant proposes to provide, admission and discharge policies, admission agreement, a statement of resident rules, and resident record forms including personal allowance records and procedures;
   4. (iv) a description of provision for special services if mentally disabled, physically handicapped persons or persons with other special needs will be admitted to or are in residence in the facility. This plan shall include specifications of special activities and operating practices, adaptation of supervision, personal care and other services, and evidence of cooperation and coordination with other persons and agencies providing services to such residents;
   5. (v) a disaster and emergency plan;
   6. (vi) a description of food services, including the kitchen and dining layout, equipment, the service system and proposed menus;
   7. (vii) a housekeeping plan;
   8. (viii) a maintenance plan; and
   9. (ix) a plan for use of volunteers if volunteers are to be used in the facility.
2. (2) If applicable, complete architectural plans and specifications for any planned construction, renovation or alteration.

(h) For an application which involves construction or renovation, the applicant shall:

1. (1) within 90 days of the notice of approval of part II, notify the department, in writing, of the date such construction or renovation will start and of the anticipated completion date, which shall be within 18 months of the date of part II approval; and shall submit copies of all applicable construction or renovation contracts;
2. (2) submit a written report on the progress of the construction or renovation every 90 days;
3. (3) at least 30 days prior to anticipated occupancy, request a final architectural inspection. Such inspection shall not be conducted until all fire protection systems are installed and operational, and the applicant can provide written documentation of compliance with applicable local codes and ordinances;
4. (4) at least 30 days prior to anticipated occupancy, but following the architectural inspection, request a final facility inspection. Such inspection shall not be conducted until requested modifications or changes have been made; the qualifications of the proposed administrator and, if applicable, case manager and activities director, have been submitted and approved; actual staffing schedules and hiring is complete; and the applicant can provide, at the time of inspection, written documentation of compliance with local codes and ordinances.

(j) An applicant may submit a written request for a 90-day extension of any of the specified timetables. Extension may be granted upon determination that:

1. (1) the need for extension is caused by circumstances beyond the applicant's control; and
2. (2) the need for extension is not caused by the applicant's inability to secure financing.

(m) An applicant or operator may, in writing and in accordance with Part 343 of this Title, request administrative review of a decision by the department under this section.

1. (1) Approval to operate an assisted living program will be granted only to an applicant which satisfactorily demonstrates and documents, on forms and in a manner prescribed by the department, that the applicant is:

   1. (i) a natural person or partnership composed only of natural persons, a not-for-profit corporation, a public corporation, a social services district or other governmental agency which possesses or is eligible, pursuant to this Part, to apply for an adult care facility operating certificate; and

   2. (ii) either an entity which possesses or is eligible, pursuant to Title 10 NYCRR, to apply for:

      1. (a) licensure as a home care services agency;
      2. (b) authorization as a long-term home health care program; or
      3. (c) a certificate of approval as a certified home health agency.
2. (2) The applicant must comply with all requirements of this Part, Part 494, and with applicable sections of article 36 of the Public Health Law and Title 10 NYCRR.
3. (3) An applicant proposing to operate an assisted living program must submit an application to the department. The department will transmit a copy of the application and accompanying documents to the Department of Health.
4. (4) The commissioner, after consultation with the Commissioner of the Department of Health, will establish periods for the submission of assisted living program applications. Such application submission periods shall be based upon the public need for assisted living program beds, as determined by the Department of Health. If such public need is determined to exist, application submission periods shall be established at least annually. All applications received during each such period will be processed and reviewed comparatively in a group.

5. (5) In addition to the other requirements of this Part, the application must include:

   1. (i) documentation of existing certification or application for certification as either an adult home or enriched housing program and either:

      1. (a) documentation of existing licensure, or application for licensure, as a home care services agency; or
      2. (b) documentation of existing certification or application for certification as a home health agency; or
      3. (c) documentation of approval or application for approval as a long-term home health care program;
   2. (ii) a copy of a proposed contract with a social services district in accordance with the requirements of section 494.4(h) of this Title;
   3. (iii) if the applicant is not a long-term home health care program or certified home health agency, a copy of a proposed contract with a long-term home health care program or certified home health agency for the provision of services;

   4. (iv) a detailed description of the proposed program including:

      1. (a) the proposed number of residents to be served by the program;
      2. (b) the location of the program;
      3. (c) the target population to be served by the program;
      4. (d) the budget for the program;
      5. (e) the staffing plans for the program; and
      6. (f) the operating standards and services to be provided by the program; and
   5. (v) the anticipated date of operation for the program, or the anticipated number of days from issuance of department approval to program operation.

6. (6) In addition to the standards contained in other subdivisions of this section, applications to operate an assisted living program will be evaluated on the following criteria:

   1. (i) the appropriateness of the proposed target population;
   2. (ii) the extent to which the program will admit and retain individuals whose care is paid for at public expense;
   3. (iii) the relation of the proposed program to the target population;
   4. (iv) the proposed number of residents;
   5. (v) the geographic location of the proposed program;
   6. (vi) the geographic distribution of existing and proposed programs within a health systems agency region;
   7. (vii) the public need for the assisted living program and the particular type of adult care facility and the particular type of home care program that the applicant intends to establish;
   8. (viii) the extent to which the proposed program will increase the supply of existing adult home or enriched housing beds;
   9. (ix) the character, competence and standing in the community of the applicant;
   10. (x) the financial responsibility of the applicant;
   11. (xi) the financial feasibility of the program;
   12. (xii) the anticipated construction and operating costs;
   13. (xiii) the anticipated date of operation of the program;
   14. (xiv) a description of existing contracts, referral, or other service relationships with the social services districts;
   15. (xv) a description of existing contracts, referral, or other service relationships with other providers or services in the community to serve the residents of the program; and
   16. (xvi) the buildings, equipment, staff, standards of care and records of the adult care facility to be employed in the program must comply with applicable Federal, State and local laws, rules and regulations.

7. (7) Applications will be rated in accordance with the criteria in paragraph (6) of this subdivision and other requirements of this Part, with first consideration given to applications which:

   1. (i) commit to the admission and retention of individuals eligible for or in receipt of supplemental security income, home relief or medical assistance;
   2. (ii) will increase the supply of existing adult home or enriched housing beds; and
   3. (iii) demonstrate the ability to commence service provision most quickly.

8. (8) An application for an assisted living program will not be approved unless the commissioner has determined:

   1. (i) that there is a public need for the assisted living program and that the commissioner has received written notice of approval of public need for the assisted living program from the Commissioner of the Department of Health;

   2. (ii) that the Commissioner of the Department of Health has provided written notice of the Department of Health's approval of:

      1. (a) the applicant as either a licensed home care service agency, certified home health agency or long-term home health care program; and
      2. (b) where applicable, the public health council; and
   3. (iii) that the assisted living program will be operated in compliance with applicable Federal, State and local laws, rules and regulations.
9. (9) The commissioner or commissioner's designee must notify the applicant in writing of whether the application to establish and operate an assisted living program has been approved or disapproved, including, in the case of disapproval, the reason for disapproval. The written approval of the commissioner or commissioner's designee constitutes authorization to operate an assisted living program.
10. (10) An applicant for approval to operate an assisted living program who fails, neglects or refuses to submit documentation or information requested by the department, within 30 days or such longer period as may be specified by the department, will be deemed to have abandoned or withdrawn the application, and will receive written notice of the same from the department.
11. (11) An applicant for approval to operate an assisted living program who fails to submit complete or sufficient information or documentation within 30 days or such longer period as may be specified by the department will receive written notification that the application has been disapproved.
12. (12) Notwithstanding the provisions of subdivisions (h)(1) and (i) of this section, the failure, neglect or refusal of an applicant to complete construction or renovation and commence operation of an assisted living program within 18 months of issuance of approval of the application by the department constitutes an abandonment of the application and any such approval is deemed cancelled, withdrawn and annulled, unless an extension has been granted pursuant to paragraph (13) of this subdivision. The department will provide written notice of any such cancellation, withdrawal or annulment to the applicant.

13. (13) An applicant may submit a written request for a 90-day extension(s) of the timetable specified in paragraph (12) of this subdivision. Extension(s) may be granted upon a determination by the department that:

    1. (i) the need for extension is caused by circumstances beyond the applicant's control; and
    2. (ii) the need for extension is not caused by the applicant's inability to secure financing.

(n) Assisted living program.