§ 2802. Approval of construction. The construction of a hospital,
whether public or private, incorporated or not incorporated, shall
require the prior approval of the commissioner.

1. An application for such construction shall be filed with the
department, together with such other forms and information as shall be
prescribed by, or acceptable to, the department. Thereafter the
department shall forward a copy of the application and accompanying
documents to the public health and health planning council and the
health systems agency, if any, having geographical jurisdiction of the
area where the hospital is located.

1-a. The following types of construction projects by a hospital
possessing a valid operating certificate shall not require prior
approval pursuant to this section, provided that a written notice has
been submitted to the department together with, where appropriate, a
written architect and/or engineering certification that the project
meets the applicable statutes, codes and regulations specified in the
certification statement and, where required by the department, the
hospital shall implement a plan to protect patient safety during
construction:

(a) correction of cited deficiencies, provided that the construction
is limited to the correction of the deficiencies and is authorized by a
plan of correction approved by the department;

(b) repair or maintenance, regardless of cost, including routine
purchases and the acquisition of minor equipment undertaken in the
course of a hospital's inventory control functions; provided that for
projects under this paragraph with a total cost of up to six million
dollars, no written notice shall be required;

(c) non-clinical infrastructure projects regardless of cost including,
but not limited to, replacement of heating, ventilating and air
conditioning systems, roofs, fire alarm and call bell systems, parking
lots and elevators;

(d) one for one equipment replacements regardless of cost, including
replacement of equipment with another piece of equipment used for
similar purposes but employing current technology; and

(e) other projects as specified in regulations adopted by the council
and approved by the commissioner.

1-b. The commissioner is authorized to waive any requirement for
pre-opening certifications and/or surveys for construction projects
approved in accordance with this section.

2. The commissioner shall not act upon an application for construction
of a hospital until the public health and health planning council and
the health systems agency have had a reasonable time to submit their
recommendations, and unless (a) the applicant has obtained all approvals
and consents required by law for its incorporation or establishment
(including the approval of the public health and health planning council
pursuant to the provisions of this article) provided, however, that the
commissioner may act upon an application for construction by an
applicant possessing a valid operating certificate when the application
qualifies for review without the recommendation of the council pursuant
to regulations adopted by the council and approved by the commissioner,
or as otherwise authorized by this section; and (b) the commissioner is
satisfied as to the public need for the construction, at the time and
place and under the circumstances proposed, provided however that, in
the case of an application by a hospital established or operated by an
organization defined in subdivision one of section four hundred
eighty-two-b of the social services law, the needs of the members of the
religious denomination concerned, for care or treatment in accordance
with their religious or ethical convictions, shall be deemed to be
public need.

2-a. The council shall afford the applicant an opportunity to present
information in person concerning an application to a committee
designated by the council.

2-b. Beginning on January first, nineteen hundred ninety-four, and
each year thereafter, a complete application received between January
first and June thirtieth of each year shall be reviewed by the
appropriate health systems agency and the department and presented to
the public health and health planning council for its consideration
prior to June thirtieth of the following year and a complete application
received between July first and December thirty-first of each year shall
be reviewed by the appropriate health systems agency and the department
and presented to the public health and health planning council for
consideration prior to December thirty-first of the following year.

2-c. An application for the relocation of long-term ventilator beds
from one residential health care facility to another residential health
care facility with common ownership shall be subject, as determined by
the commissioner, to either an administrative or limited review by the
department. Common ownership shall be found when the ownership or
controlling interest in the operator of each residential health care
facility is the same, provided the percentage of ownership interest of
each owner may vary between the two facilities but must meet the whole
in common ownership. For purposes of this subdivision, the commissioner,
when making a determination of public need, may consider access to
long-term ventilator beds in the affected portions of the health systems
region, and the quality of care provided at the facilities with common
ownership. At no time shall an application submitted pursuant to this
subdivision result in a change in the total combined number of long-term
ventilator and residential health care facility beds, including
residential health care facility beds converted from transferred
long-term ventilator beds, operated by the two facilities with common
ownership.

3. Subject to the provisions of paragraph (b) of subdivision two, the
commissioner in approving the construction of a hospital shall take into
consideration and be empowered to request information and advice as to
(a) the availability of facilities or services such as preadmission,
ambulatory or home care services which may serve as alternatives or
substitutes for the whole or any part of the proposed hospital
construction;

(b) the need for special equipment in view of existing utilization of
comparable equipment at the time and place and under the circumstances
proposed;

(c) the possible economies and improvements in service to be
anticipated from the operation of joint central services including, but
not limited to laboratory, research, radiology, pharmacy, laundry and
purchasing;

(d) the adequacy of financial resources and sources of future revenue;
and

(e) whether the facility is currently in substantial compliance with
all applicable codes, rules and regulations, provided, however, that the
commissioner shall not disapprove an application solely on the basis
that the facility is not currently in substantial compliance, if the
application is specifically:

(i) to correct life safety code or patient care deficiencies;

(ii) to correct deficiencies which are necessary to protect the life,
health, safety and welfare of facility patients, residents or staff;

(iii) for replacement of equipment that no longer meets the generally
accepted operational standards existing for such equipment at the time
it was acquired; and

(iv) for decertification of beds and services.

3-a. Review of applications from hospitals in epidemic areas and
hospitals serving state correctional facilities to renovate or provide
for capital improvement for the purpose of controlling the spread of
tuberculosis infection may be approved by the commissioner, who to the
extent practicable may, but shall not be required to, consider the
recommendations of the health systems agency and the public health and
health planning council for applications for which he grants approval.
In such cases the commissioner shall take further measures necessary to
expedite departmental reviews for such approval.

3-b. Review of applications from rural hospitals seeking approval in
the swing bed program, authorized pursuant to section twenty-eight
hundred three of this article, may be approved by the commissioner who,
to the extent practicable, may consider the recommendations of the
respective health systems agency. In such cases, the commissioner shall
take further measures necessary to expedite departmental reviews for
such approval.

3-c. An application shall state the proposed site or location of the
proposed construction. Where the applicant changes the site or location
after approval of the application, the commissioner may, subject to
regulations under this article, approve the change upon a finding that
the change is in the best interest of the service area. In making such
determination, the commissioner may seek a review of the proposed change
by the public health and health planning council and the health systems
agency having geographical jurisdiction.

4. No government agency shall construct any hospital without securing
the written approval of the commissioner in accordance with the
applicable requirements and procedures of the preceding subdivisions.

5. If the commissioner proposes to disapprove an application for
construction of a hospital, he shall afford the applicant an opportunity
to request a public hearing. The commissioner shall not take any action
contrary to the advice of the health systems agency until he affords an
opportunity to the agency to request a public hearing and, if so
requested, a public hearing shall be held.

6. The commissioner, on his own motion, may hold a public hearing on
an application for construction of a hospital.

7. (a) The commissioner shall charge to applicants for construction of
hospitals the following fees and charges for administrative services so
as to recover departmental costs in performing these functions. Each
applicant for construction of a hospital shall pay to the department an
application fee of two thousand dollars, provided, however, that
diagnostic and treatment centers designated by the commissioner as
safety net diagnostic and treatment centers, as defined in paragraph (c)
of subdivision sixteen of section twenty-eight hundred one-a of this
article, shall pay a fee of one thousand two hundred fifty dollars.

(b) At such time as the commissioner's written approval of the
construction is granted, each applicant shall pay the following
additional fee:

(i) for hospital, nursing home and diagnostic and treatment center
applications that require approval by the council, the additional fee
shall be fifty-five hundredths of one percent of the total capital value
of the application, provided however that applications for construction
of a safety net diagnostic and treatment center, as defined in paragraph
(c) of subdivision sixteen of section twenty-eight hundred one-a of this
article, shall be subject to a fee of forty-five hundredths of one
percent of the total capital value of the application; and

(ii) for hospital, nursing home and diagnostic and treatment center
applications that do not require approval by the council, the additional
fee shall be thirty hundredths of one percent of the total capital value
of the application, provided however that safety net diagnostic and
treatment center applications, as defined in paragraph (c) of
subdivision sixteen of section twenty-eight hundred one-a of this
article, shall be subject to a fee of twenty-five hundredths of one
percent of the total capital value of the application.

(c) The commissioner is authorized to establish reduced fees for
applications subject to limited review, as described in regulation, that
do not require review by the council.

(d) The fees and charges paid by an applicant pursuant to this
subdivision for any application for construction of a hospital approved
in accordance with this section shall be deemed allowable capital costs
in the determination of reimbursement rates established pursuant to this
article. The cost of such fees and charges shall not be subject to
reimbursement ceiling or other penalties used by the commissioner for
the purpose of establishing reimbursement rates pursuant to this
article. All fees pursuant to this section shall be payable to the
department of health for deposit into the special revenue funds - other,
miscellaneous special revenue fund - 339, certificate of need account.