Section 900.3 - Application for certificate of authority

Section 900.3 Application for certificate of authority. (a) An application to the Life Care Community Council for its approval to operate a life care community shall be in writing on application forms provided by the department and subscribed by the chief executive officer duly authorized by the board of a corporate applicant, a general partner or proprietor of the proposed life care community, or, where an application is to be submitted by a governmental subdivision as the applicant, the president or chairman of the board of the proposed community or the chief executive officer if there is no board; and accompanied by a certified copy of a resolution of the board of a corporate applicant authorizing the undertaking which is the subject of the application, and the subscribing and submission thereof by an appropriate designated individual. In the event that an application is to be submitted by an entity which necessarily remains to be legally incorporated, it shall be subscribed and submitted by one of the proposed principal stockholders or directors. If a local governmental applicant submitting an application has not designated a president, chairman or chief executive officer for the proposed community, the application shall be subscribed by the chairman or president of the local legislature or board of supervisors having jurisdiction, or other appropriate executive officer. An original application and eleven copies thereof shall be prepared and submitted to the Commissioner.

(b) Applications to the council shall contain information and data with reference to:

(1) the need for the existence of the proposed community at the time and place and under the circumstances proposed;

(2) the character, experience, competence and standing in the community of the controlling persons, if any, of the applicant, managers, if any, the sole proprietor applicant, the general partners of a partnership applicant, the proposed directors and officers of a corporation, corporate general partner, parent corporation or management corporation, and governmental subdivisions. The application shall include copies of personal and disclosure information, as appropriate, as may be required by the council with regard to any such individual or organization; and

(3) the applicant's ability to organize, market, manage, promote and operate the community in a financially feasible and capable manner and its ability to meet its expected obligations.

(c) The following documents shall be filed as part of the application:

(1) a feasibility study defined as follows:

(i) the study shall be in the form of a financial forecast subject to an examination by an independent certified public accountant including a statement by the accountant that the examination was conducted in accordance with generally accepted accounting principles (GAAP);

(ii) the financial forecast shall include:

(a) prospective financial statements covering a period of five years beginning with the calendar year in which the application is made;

(b) a market analysis including the demographic characteristics of the population to be served as a basis for judging whether the proposed community is likely to achieve acceptable occupancy rates; and

(c) an opinion by a qualified consulting actuary as to the acturial assumptions used in developing the financial forecast; and

(iii) the examination of the financial forecast included in the application may be in draft form provided that the final examination be submitted to the department upon financing of the community;

(2) the rates and rating system, if any, consisting of a detailed formula or formulas to be applied by the operator in the calculation of future entrance fees and monthly care fees;

(3) where the applicant will be operating the life care community under an assumed name, a photocopy of the applicant's existing or executed proposed certificate of doing business;

(4) a copy of the proposed life care contract between the community and its residents;

(5) copies of any contracts for the provision of nursing home services, home health care services or adult care facility services to the community;

(6) copies of all applicable executed and proposed deeds, leases, and rental agreements or executed option contracts related to the community's real property interests;

(7) complete details of any agreements between the community and licensed insurers, including copies of the proposed contracts requiring the insurer to assume, wholly or in part, the cost of medical or health related service to be provided to the residents of the community;

(8) a copy of each of the basic organizational documents and agreements of the applicant and all participating entities including, as applicable: by-laws, partnership agreements, articles of incorporation, articles of association or other membership agreements, or their substantial equivalents; (9) where the applicant has a parent corporation or a controlling person, copies of any such entity's bylaws, certificate of incorporation and any existing or proposed amendments thereto, all agreements between the applicant and any such controlling person or parent corporation relating to the manner and mechanisms by which any such controlling person or parent corporation controls or will control the applicant and a detailed description of such control relationship;

(10) architectural program and sketches of the community including the following:

(i) site plans;

(ii) schematic architectural and engineering design drawings and single line sketches of each floor in an appropriate scale showing the relationship of various buildings to each other, room configurations, major exit corridors, exit stair locations, and circulation along with existing buildings if additions or alterations are part of the project;

(iii) outline specifications for the type of construction proposed including a description of energy sources, type and location of engineering systems proposed for heating, cooling, ventilation and electrical distribution, dietary systems, water supply and sewage; and

(iv) for an on-site nursing home component:

(a) a description of the functional and locational relationships among each related but discrete component; and

(b) in those cases where those systems and services specified in Section 711.3(g)(3), Chapter V, Title 10 (Health) of the Official Compilation of Codes, Rules and Regulations of the State of New York are located at the first or basement level or where any floor level is located below the 100-year flood crest level, a description of the site, including a topographic map, U.S. Geological Survey, published by the U.S. Department of Interior Geological Survey, 7 1/2 minute series, unless not published for such site, in which case 15 minute series shall be acceptable;

(11) construction timetable;

(12) information on the ownership of the property interests in the community including the following:

(i) the name and address and a description of the interest held, or proposed to be held, by each of the following persons:

(a) any person who, directly or indirectly, beneficially owns any interest in the land on which the community is located;

(b) any person who, directly or indirectly, beneficially owns any interest in the buildings in which the community is located;

(c) any person who, directly or indirectly, beneficially owns any interest in any mortgage, note, deed of trust or other obligations secured in whole or in part by the equipment used in the community, or by the land on which or the buildings in which the community is located;

(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 buildings in which the community is located; and

(ii) if any person named in response to paragraph (i) of this subdivision is a partnership, then the name and address of each general partner;

(iii) if any person named in response to paragraph (i) of this subdivision is a corporation, then the name and address of each controlling person, director and officer of such corporation;

(iv) if any corporation named in response to paragraph (i) 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 member of the board of directors of such corporation;

(v) such additional pertinent information and documents necessary for the council's consideration, as requested;

(13) a copy of the agreement, if any, executed or to be executed between the operator and a manager;

(14) an initial disclosure statement which shall include, but not be limited to:

(i) the following statement printed in bold twelve point type on the cover or on top of the first page: "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.";

(ii) the name and business address of the operator and a statement of whether the operator is an individual, partnership, corporation or other legal entity;

(iii) all of the information required by regulation to be in the life care contract unless a copy of the actual contract is attached and incorporated as part of the disclosure statement; (iv) a description of the community including the number of independent living units, nursing home beds, adult care facility beds, if any, as well as the location, size and anticipated completion date and a description of other social and health services provided by the community;

(v) a list of life care, health care and/or adult care operations owned or operated by any controlling person(s) of the applicant(s), each sole proprietor applicant, each general partner of a partnership applicant, each corporate applicant and each officer and member of the board of directors of a corporate applicant or corporate general partner, or by entities with which the members of the board are affiliated including the address and dates of ownership or operation of each such operation;

(vi) in the event that any life care, health care and/or adult care operation specified pursuant to subparagraph (v) above has been subjected to a limitation, withdrawal, disapproval or refusal to grant an operating certificate or other equivalent authority to operate because of failure to comply with standards governing the conduct and operation of the life care, health care and/or adult care operation, information describing the nature of the violation, the name and address of the agency or body enforcing the standard, the steps taken by the life care, health care and/or adult care operation to remedy the violation, and an indication of whether any authority to operate has since been restored or limitation removed;

(vii) a statement as to whether any controlling person of the applicant, any manager, any sole proprietor applicant, any general partner of a partnership applicant, any officer and member of the board of directors of a corporate applicant, corporate general partner, management corporation, parent corporation, or health-related subsidiary corporation:

(a) has been convicted of a crime or plead nolo contendre to a felony charge, or been held liable or enjoined in a civil action by final judgement 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 order or federal or state administrative order relating to business activity or health care as a result of an action by a public agency or department, including, without limitation, actions affecting a license to operate a life care, health care and/or adult care operation. This statement shall set forth the court or agency, date of conviction or judgement, the penalty imposed or damages assessed, and the date, nature and issuer of the order;

(viii) if any controlling person of the applicant, any manager, any sole proprietor applicant, any general partner of a partnership applicant, any officer and member of the board of directors of a corporate applicant, corporate general partner, management corporation, parent corporation or health-related subsidiary maintains a ten percent interest or greater in any professional service, firm, association, foundation, trust, partnership, corporation, or other entity or if such entity maintains a ten percent interest or greater in the applicant, and such entity will or may provide goods, leases, or services to the community, the value of which is five hundred dollars or more within any one year, the name and address of the entity shall be disclosed together with a description of the goods, leases or services and the probable or anticipated cost to the community;

(ix) if the community is to be operated by a manager:

(a) the name and address of other life care, health care and/or adult care operations, if any, managed by the manager;

(b) a summary of the agreement, including the fee, executed or to be executed between the operator and manager, with a full copy to be made available upon request;

(c) if the manager is incorporated or established and operated on a for-profit basis the name and address of all controlling persons, officers and members of the board of directors of the management corporation;

(d) the method by which the manager was chosen. If the manager was chosen due to a condition in a mortgage commitment, the name and address of the mortgagee imposing the condition;

(x) a statement indicating whether the applicant is or has been affiliated, or has or had a contractual arrangement with a religious, charitable or other non-profit organization and if so, the extent of such affiliation or contractual arrangement including the extent to which the non-profit organization will be responsible for the financial and contractual obligations of the applicant; (xi) if the applicant operates one or more life care communities within or outside of the state, a statement for each such community describing the changes in the entrance fees and the monthly care fees as well as any changes in the care and services provided under the life care contract during the past five years or less for communities which have been in operation for less than five years. This disclosure shall include tables indicating the frequency and average dollar amounts of the fee increases for each community during such time period;

(xii) if the applicant is a corporate subsidiary or affiliate of another corporation, disclosure of the parent or affiliate corporation including the name and address of the parent or affiliate, the primary activities of the parent or affiliate, the interest in the applicant held by the parent or affiliate and the extent to which the parent will be responsible for the financial and contractual obligations of the subsidiary;

(xiii) the most recent financial statement of the applicant prepared in accordance with generally accepted accounting principles (GAAP) applied on a consistent basis and certified by an independent certified public accountant, including a balance sheet as of the end of the applicant's last fiscal year and income statements for the past two fiscal years, or such shorter period of time as the operator has been in operation;

(xiv) if construction, lease, rental or purchase of the community has not been completed, a statement indicating the anticipated source and application of the funds to be used in such purchase, lease, rental or construction which shall include but not be limited to:

(a) an estimate of the cost of purchasing, leasing, renting, constructing and equipping the community, including at a minimum, related costs such as financing expenses, legal expenses, land costs, occupancy development costs, and all other similar costs which the operator will incur or become obligated for prior to the occupancy of the community; (b) a projection of the estimated operating expenses of the community, including a description of the assumptions used in calculating the expenses and separate allowances, if any, for the replacement of equipment and furnishings and any anticipated major structural repairs or additions;

(c) an estimate of any funds which are anticipated to be required to fund start-up losses and to assure full performance of all obligations of the operator pursuant to the life care contracts including, but not limited to the reserves required to be maintained pursuant to the applicable regulations of the New York State Department of Insurance;

(d) an estimate of the total entrance fees to be received upon completion of occupancy;

(e) a projection of estimated income from fees and charges other than entrance fees, a description of the individual rates to be charged, and the assumptions used in calculating the estimated occupancy rate of the community;

(f) the anticipated terms and costs of any mortgage loan or other long term financing of the community; and

(g) a statement of actual and anticipated assets pledged as collateral for any purpose; and

(15) such additional pertinent information or documents necessary for the council's consideration, as requested.
 

Effective Date: 
Wednesday, July 27, 1994
Doc Status: 
Complete