(2) [Any party may submit objections to the hearing officer's report by filing a written response with the hearing officer and serving a copy of such response upon all parties within 20 days after service of the hearing officer's report. Replies to any such response may be filed and served in like manner within ten days after service. Unless the commissioner grants an extension of time, no response or reply submitted after the prescribed time will be considered.

3] The record of the hearing[, together with] and the hearing officer's report [and any responses or replies duly filed] shall be transmitted to the [commissioner] Commissioner for final determination and order.

1. Statutory Authority:

Section 7.07 of the Mental Hygiene Law charges the Office of Mental Health with the responsibility of seeing that mentally ill persons are provided with care and treatment, that such care, treatment, and rehabilitation is of high quality and effectiveness, and that the personal and civil rights of persons receiving care, treatment, and rehabilitation are adequately protected.

Section 7.09 of the Mental Hygiene Law grants the Commissioner of the Office of Mental Health the authority and responsibility to adopt regulations that are necessary and proper to implement matters under his or her jurisdiction.

Section 31.16 of the Mental Hygiene Law grants the Commissioner of the Office of Mental Health the authority to suspend, revoke or limit an operating certificate, or impose fines. Such section further requires the Commissioner to provide the holder of the operating certificate with a notice of such action and an opportunity to be heard prior to any determination, except in cases where the suspension or revocation must be imposed in accordance with statutory emergency suspension procedures. This section also empowers the Commissioner to establish regulations to govern the hearing procedure and the process of determination of the proceeding. Furthermore, in accordance with this Section, all orders or determinations are subject to review in accordance with Article 78 of the Civil Practice Law and Rules.

Section 31.17 of the Mental Hygiene Law establishes the process for formal hearings that are required to be afforded pursuant to Chapter 27 of the Consolidated Laws of the State of New York. Such Section permits the Commissioner of Mental Health to establish regulations governing the hearing procedure and the process of determination of the proceeding.

Article 3 of the State Administrative Procedure Act establishes procedures for the conduct of adjudicatory proceedings and requires agencies to adopt rules governing such proceedings.

2. Legislative Objectives:

As set forth in Section 7.01 of the Mental Hygiene Law, the state of New York and its local governments have a responsibility for the prevention and detection of mental illness and for the comprehensively planned care, treatment, and rehabilitation of its citizens who have mental illness. Section 7.07 of such law evinces the Legislature's intent to facilitate effective, quality care for persons with mental illness by charging the Commissioner of Mental Health with the responsibility for “seeing that mentally ill persons are provided with care and treatment, that such care, treatment and rehabilitation is of high quality and effectiveness, and that the personal and civil rights of persons receiving care, treatment and rehabilitation are adequately protected.”

Through passage of Mental Hygiene Law Article 31, the Legislature created the process through which providers of service would receive certification through the Office of Mental Health to engage in the provision of such services. In recognition of the fact that a provider of services would have a property right in an operating certificate, the Legislature further ensured the provision of appropriate due process in the event the Office initiated action to revoke, suspend, or limit such operating certificate Because the Commissioner of Mental Health is charged with the responsibility for the care and treatment of persons with mental illness, the Legislature empowered the Commissioner to adopt regulations governing the review procedures available through Mental Hygiene Law Article 31, in order to effect the appropriate balance between the compelling need to ensure the health, safety, and welfare of persons with mental illness and the due process protections afforded the provider of services by virtue of its property interest in an operating certificate.

3. Needs and Benefits:

Section 31.16 of the Mental Hygiene Law establishes requisite procedures associated with the suspension, revocation, or limitation of an operating certificate, as well as imposition of fines by the Commissioner of Mental Health. These actions are authorized upon a determination by the Office that the holder of the certificate has failed to comply with the terms of its operating certificate or with the provisions of any applicable statute, rule or regulation. In accordance with this section, a provider of services must be provided with notice and an opportunity to be heard prior to any such determination, except if no such notice or opportunity to be heard is necessary prior to an emergency suspension or limitation of an operating certificate in accordance with the provision of subdivision (b) of such Section.

When an opportunity to be heard is requested by the holder of an operating certificate, the statute requires that a hearing be scheduled by the Office of Mental Health. A copy of charges stating the substance of the alleged violations of the terms of the operating certificate or the alleged violation of any applicable statute, rule or regulation, together with the notice of the date, time and place of the hearing, must be served in person or mailed by registered or certified mail to the facility at least ten days before the date fixed for the hearing.

The statute gives a provider the right to file a written answer to the charges with the Office within 3 days prior to the hearing. In accordance with the statute, all parties are afforded the right of counsel, as well as an opportunity to require the production of witnesses and evidence in manner and form as prescribed by the New York State Civil Practice Law and Rules, to cross-examine witnesses, to examine evidence produced against them, and to have subpoenas issued on their behalf.

Section 31.16 of the Mental Hygiene Law further requires the Commissioner of Mental Health to issue a ruling within 10 days after the termination of the hearing or, if a hearing officer has been designated, within 10 days from the hearing officer's report. The ruling must be based upon a preponderance of the evidence and shall contain conclusions concerning the alleged violations of the terms of the operating certificate or the alleged violation of any applicable statute, rule or regulation. The statute explicitly states that all orders or determinations issued under Mental Hygiene Law Section 31.16 are subject to review as provided in Article 78 of the Civil Practice Law and Rules.

14 NYCRR Section 503.4 sets forth general hearing procedures which apply, inter alia, to the conduct of hearings held in response to Office action to suspend, revoke, or limit an operating certificate. This section includes all of the statutorily required procedures as set forth in Mental Hygiene Law Section 31.16.

Over time, it has become evident that some additional procedures have been added to Office regulations, though not statutorily required. As such, these procedures exceed the minimum due process protections the Legislature deemed essential via the passage of Mental Hygiene Law Section 31.16.

When value is added by these additional procedures, the Office has determined to voluntarily preserve these additional procedures. However, the Office has also determined that some of these additional procedures, in fact, do not add value to the process and could actually serve to harm persons whose personal and civil rights the Legislature has charged the Office as responsible for protecting. This is the case with respect to the proposed amendment to 14 NYCRR Section 503.4.

Subdivision (i) of 14 NYCRR Section 503.4 includes procedures applicable to the hearing officer's report. In accordance with the governing statute, (Mental Hygiene Law Section 31.16), after a hearing officer issues a report, the Commissioner of Mental Health must issue a ruling within 10 days from the hearing officer's report. The ruling must be based upon a preponderance of the evidence and shall contain conclusions concerning the alleged violations of the terms of the operating certificate or the alleged violation of any applicable statute, rule or regulation. The statute explicitly states that all orders or determinations issued under Mental Hygiene Law Section 31.16 are subject to review as provided in Article 78 of the Civil Practice Law and Rules.

Notably, 14 NYCRR Section 503.4(i) places an additional step in the process by providing the opportunity for any party to submit objections to the hearing officer's report. This opportunity is not provided in statute. Over time, the Office has discovered that this additional step does not only not add value to the process, it actually serves to detract from it. First, it serves as an incentive to both parties to not comprehensively present their case at the hearing, since they will be provided with an opportunity to submit additional evidence outside of the scope of the hearing, with no opportunity for either party to respond to this additional submission. Secondly, it serves to consume more time before a determination can be finally issued, which could extend the period of time during which a provider can operate in violation of agency regulations, to the detriment of the personal and civil rights of the persons it serves. Thus, since both parties have the opportunity to submit briefs to the hearing officer before he or she renders a decision, the need for comments regarding the decision is unnecessary, provides an unfair opportunity to provide additional evidence outside of the hearing process, and unduly lengthens the process for no additional benefit.

In its establishment of Mental Hygiene Law Section 31.16, the Legislature identified the due process it felt was legally essential to protect the property interests of providers with respect to operating certificates. As such, the opportunity to initiate an Article 78 action under the Civil Practice Law and Rules was determined to be sufficient due process with respect to parties who were not satisfied with a determination issued pursuant to Mental Hygiene Law Section 31.16.

Accordingly, the Office has determined that the additional procedural step established in 14 NYCRR Section 503.4 (i)(2) is not required by statute, is duplicative, encourages the opportunity to submit additional evidence outside of the hearing process to the detriment of either party, does not add value to the process, and delays the time during which regulatory violations can persist, to the possible detriment of the civil and personal rights of persons for whom the Office is legally responsible.

4. Costs:

(a) cost to regulated persons: This regulatory amendment will not result in any additional costs to regulated persons.

(b) cost to State and local government: This regulatory amendment should not result in any additional costs to State and local government. By removing an unnecessary step in the hearing officer process, it has the potential to reduce costs associated with this process.

5. Paperwork:

There are no new paperwork requirements associated with this amendment.

6. Local Government Mandates:

This regulatory amendment will not result in any additional imposition of duties or responsibilities upon county, city, town, village, school or fire districts.

7. Duplication:

There are no duplicate, overlapping or conflicting mandates which may affect this rule.

8. Alternative Approaches:

The only alternative to this regulatory amendment would be inaction. For all of the reasons cited in the Needs and Benefits section of this Statement, that alternative was necessarily rejected as unreasonable in light of the statutory responsibilities for which the Legislature has charged the Office of Mental Health.

9. Federal Standards:

The regulatory amendment does not exceed any minimum standards of the federal government for the same or similar subject areas.

10. Compliance Schedule:

The regulatory amendment will apply to all applicable administrative hearings commenced on or after the date of adoption of the amendment.

Because it is evident from the nature of the proposed rule that there will be no adverse economic impact on small businesses or local governments, a regulatory flexibility analysis is not submitted with this notice.

A Rural Area Flexibility Analysis is not submitted with this notice because the proposed rule will not impose any adverse economic impact on rural areas.

It is clear from the nature of this regulatory amendment, which simply eliminates a duplicative step in the hearing officer process in an effort to streamline and expedite the process, that there will be no adverse impact on jobs or employment opportunities in New York State.