(a) If the Commissioners after discussion with the board of a community mental health and developmental disability agency determine that the local community services plan required by section 8908 of this chapter is inadequate to meet the needs of persons with a mental condition or psychiatric disability or with developmental disabilities or children and adolescents with a severe emotional disturbance in accordance with the provisions of 33 V.S.A. chapter 43 in the area served by a mental health and developmental disability agency or that an agency has, for reasons other than lack of resources, failed or refused to implement an otherwise adequate plan, the Commissioners shall take one or more of the following steps:

(b) Until May 1, 1998, no agency which has been designated as a community mental health agency may lose its designation without first being provided with notice and an opportunity for hearing in accordance with the provisions of 3 V.S.A. §§ 809-813. After May 1, 1998, no agency may lose its designation except in accordance with new rules adopted for that purpose under the provisions of this subsection. Notwithstanding any other provisions to the contrary in 3 V.S.A. chapter 25, the Commissioner shall, in consultation with the designated provider system and consumer groups, develop proposed rules setting forth the standards and procedures for designation, redesignation, and loss of designation, and provide for six months' notice of intent to revoke an agency's designation. The proposed rules shall also provide standards with measurable performance-based criteria and a streamlined appeals process. On or before December 31, 1997, the Commissioner shall file and hold public hearings on the proposed rules as provided in 3 V.S.A. §§ 838, 839, and 840 in accordance with 3 V.S.A. chapter 25. The Commissioner shall file the final proposed rules with the General Assembly on or before January 15, 1998. Unless disapproved by act of the General Assembly on or before April 1, 1998, the Commissioner may adopt the rules by filing with the Secretary of State, which rules shall take effect on May 1, 1998.

(c) The board of directors of a community mental health and developmental disability agency will be given a six-month notice of any intent on the part of the Commissioners to terminate its designated status. The Commissioners shall provide a written notice which outlines the performance based rationale associated with such intent. The board of directors shall have six months to review the Commissioners' stated concerns and implement a corrective action plan. The board of directors shall also be informed, in writing, of current standards and procedures regarding appeal processes. (Added 1979, No. 108 (Adj. Sess.), § 6; amended 1987, No. 264 (Adj. Sess.), § 13; 1997, No. 61, § 140a; 2005, No. 174 (Adj. Sess.), § 47; 2013, No. 96 (Adj. Sess.), § 115.)