New York Codes, Rules and Regulations
Title 14 - DEPARTMENT OF MENTAL HYGIENE
Chapter XIV - Office for People With Developmental Disabilities
Part 635 - General Quality Control and Administrative Requirements Applicable to Programs, services or Facilities Funded or Certified by the Office for People With Developmental Disabilities
Subpart 635-6 - Allowability of Capital Costs and Costs of Transactions with Related Parties
Section 635-6.2 - Determination of whether a transaction is between related parties (see glossary, Subpart 635-99 of this Part)
Universal Citation: 14 NY Comp Codes Rules and Regs § 635-6.2
Current through Register Vol. 47, No. 12, March 26, 2025
(a) Where a transaction is not presumed to be between related parties under subdivisions (b) or (d) of this section, OPWDD will determine whether the transaction is between related parties.
(1) Such determination shall be made on a
case-by-case basis.
(2) Such
determination shall be based on whether the facts and circumstances of the
transaction, the parties' situation and history, indicate that the party from
whom the provider or individual receiving services obtained the real property,
equipment, goods, services or property is a related party.
(3) If a transaction is between a provider
(see glossary, Subpart 635-99 of this Part) or individual receiving services
and a party not presumed to be a related party (under subdivision [b] or [d] of
this section, OPWDD nevertheless can determine that the transaction is between
related parties (using the criteria in paragraph [2] of this subdivision),
where the party transacting with the provider or individual receiving services
directly or indirectly obtained the real property, equipment, goods, services
or property in question from someone or an organization (see glossary, Subpart
635-99 of this Part) presumed to be related to the provider or individual
(under subdivision [b] or [c] of this section).
(b) The existence of any of the conditions in paragraphs (1) through (6) of this subdivision will create a presumption that the transaction is between a provider and a related party.
(1) The provider is a partnership and the
other party to the transaction is a partner of the provider.
(2) The provider is a corporation and the
other party to the transaction is an officer, director, trustee, principal
stockholder (see glossary, Subpart 635-99 of this Part) or controlling party
(see glossary, Subpart 635-99 of this Part) of the provider.
(3) The provider is a corporation and the
other party to the transaction is a corporation, where someone is an officer,
director, trustee, principal stockholder or controlling party of both
corporations.
(4) The provider is a
natural person and the other party to the transaction is either:
(i) a member of the provider's immediate
family (see glossary, Subpart 635-99 of this Part);
(ii) a partnership in which the provider is a
partner;
(iii) a co-partner (see
glossary, Subpart 635-99 of this Part) of the provider;
(iv) a corporation in which the provider is
an officer, director, trustee, principal stockholder or controlling
party;
(v) a corporation in which a
member of the provider's immediate family is an officer, director, trustee,
principal stockholder or controlling party;
(vi) a corporation in which any partnership
in which the provider is a partner is a principal stockholder;
(vii) a corporation in which a co-partner of
the provider is an officer, director, trustee, principal stockholder or
controlling party; or
(viii) a
corporation in which another corporation is a principal stockholder, where the
provider is an officer, director, trustee, principal stockholder or a
controlling party of such other corporation.
(5) The provider is an unincorporated
association and the other party to the transaction is either:
(i) someone who is a member of the
provider;
(ii) someone, a member of
whose immediate family is a member of the provider;
(iii) a partnership in which one partner is a
member of the provider;
(iv) a
corporation in which a member of the provider is an officer, director, trustee,
principal stockholder or controlling party;
(v) a corporation in which a member of the
provider has an immediate family member who is an officer, director, trustee,
principal stockholder or controlling party;
(vi) a corporation in which any partnership,
in which a member of the provider is a partner, is a principal
stockholder;
(vii) a corporation in
which a co-partner of a member of the provider is an officer, director,
trustee, principal stockholder or controlling party; or
(viii) a corporation in which another
corporation is a principal stockholder, where a member of the provider is an
officer, director, trustee, principal stockholder or a controlling party of
such other corporation.
(6) The other party to the transaction is a
special purpose organization (see glossary, Subpart 635-99 of this
Part).
(c) A provider may overcome a presumption that the transaction is between related parties by clearly demonstrating that:
(1) the other
party to the transaction in question is a bona fide separate
organization;
(2) a substantial
part of the other party's business activity of the type carried on with the
provider is transacted with other organizations or those not related to the
provider and the other party by common ownership or control and there is an
open, competitive market for the type of real property, equipment, goods,
services or property furnished by the other party;
(3) the real property, equipment, goods,
services or properties are those which commonly are obtained by organizations
such as the provider from other organizations and are not a basic element of
care ordinarily furnished directly to individuals receiving services from such
programs; and
(4) the charge to the
provider is comparable to the charge for such real property, equipment, goods,
services or property in the open market and no more than the charge made under
comparable circumstances to others by the other party to the transaction for
such real property, equipment, goods, services or property.
(d) The existence of any of the conditions in paragraphs (1) through (5) of this subdivision will create a presumption that the transaction is between an individual receiving services and a related party.
(1) The other party to
the transaction is a member of the individual's immediate family.
(2) The other party to the transaction is a
partnership in which the individual or a member of the individual's immediate
family is a partner.
(3) The other
party to the transaction is a corporation in which the individual or a member
of the individual's immediate family is an officer, director, trustee,
principal stockholder or controlling party.
(4) The other party to the transaction is a
corporation in which:
(i) any partnership, in
which the individual or a member of the individual's immediate family is a
partner, is a principal stockholder; or
(ii) another corporation is a principal
stockholder, where the individual or a member of the individual's immediate
family is an officer, director, trustee, principal stockholder or controlling
party of such other corporation.
(5) The other party to the transaction is an
unincorporated association which has as a member either:
(i) the individual;
(ii) a member of the individual's immediate
family;
(iii) a partnership in
which the individual or a member of the individual's immediate family is a
partner;
(iv) a corporation in
which the individual or a member of the individual's immediate family is an
officer, director, trustee, principal stockholder or controlling
party;
(v) a corporation in which
any partnership, in which the individual or a member of the individual's
immediate family is a partner, is a principal stockholder; or
(vi) a corporation in which another
corporation is a principal stockholder, where the individual or a member of the
individual's immediate family is an officer, director, trustee, principal
stockholder or a controlling party of such other corporation.
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