Chapter 392 of the laws of 1973
NEW YORK STATE MEDICAL CARE FACILITIES
FINANCE AGENCY ACT
Section 1. Short title.
2. Declaration of policy and statement of purposes.
3. Definitions.
4. New York state medical care facilities finance agency.
5. Powers of the agency.
5-a. Federally-aided mortgage loans.
5-b. Equipment loans.
5-b. Health maintenance organization loans.
5-c. Terms and conditions regarding alternative indebtedness.
5-d. Financing non-profit housing and health facilities.
6. Bonds and notes of the agency.
7. Hospital and nursing home projects reserve funds and
appropriations.
7-a. Secured hospital projects reserve funds and
appropriations.
8. Health facilities reserve funds and appropriations.
9. Special provisions relating to the municipal health
facilities improvement program.
9-a. Special provisions relating to mental health services
facilities improvement bonds and notes.
10. Bonds and notes as legal investments.
11. Exemption from taxation of property and income.
12. Exemption from taxation of notes and bonds.
13. Agreement with the state.
14. State's right to require redemption of bonds.
15. Remedies of noteholders and bondholders.
16-a. Equal employment opportunity program.
16-b. Minority and women-owned business enterprise program.
17. Assistance by state officers, departments, boards and
commissions.
18. Annual report.
19. Bond reserve insurance fund.
20. Actions against agency.
21. Act not affected if in part unconstitutional.
22. Inconsistent provisions in other laws superseded.
Section 1. Short title. This act may be cited as the "New York state
medical care facilities finance agency act."
§ 2. Declaration of policy and statement of purposes. The protection
and promotion of the health of the inhabitants of the state are matters
of public concern. In furtherance of this purpose, it is the policy of
the state to encourage the prompt and efficient provision of health and
health-related services at a reasonable cost by the private and public
sectors in modern, well-equipped health facilities accessible to the
communities to be served.
The leglislature has heretofore found that a serious shortage of safe
and sanitary nursing home accommodations exists in many communities
throughout the state; that many hospitals and other health facilities
throughout the state are no longer adequate to meet the needs of modern
medicine; that such inadequate and outmoded facilities deny to the
people of the state the benefits of health care of the highest quality
and that their replacement and modernization is essential to protect and
prolong the lives of the state's population. The legislature has
heretofore found and declared that the accomplishment of these purposes
cannot be readily achieved by the ordinary unaided operation of private
enterprise and to this end has constituted and empowered the New York
state housing finance agency, a multi-purpose corporate governmental
agency of the state, to obtain funds through the issuance of its notes
and bonds to finance the construction, acquisition, reconstruction,
rehabilitation and improvement of a broad array of health facilities in
addition to issuing its notes and bonds to carry out other program
responsibilities which touch on the quality of life for the vast
majority of the state's residents, including the providing of housing
for persons of low income, higher educational facilities for the state
university of New York, mental health facilities, child care facilities
and facilities for the care of senior citizens.
The public purposes heretofore enumerated have not yet been fully
accomplished despite the significant investment of funds through the New
York state housing finance agency in the construction of hospitals,
nursing homes and health-related facilities.
In order to permit an acceleration in the implementation of these
programs in areas where the public need remains urgent, without
jeopardizing the orderly marketing by the New York state housing finance
agency of its notes and bonds for other program purposes, it is hereby
found and declared that a separate corporate governmental agency, to be
known as the "New York state medical care facilities finance agency,"
should be created as a single purpose agency to act in concert with the
New York state housing finance agency and to devote its entire energy
and resources to the provision of additional funds for the construction
of health and health-related facilities by nursing home companies
created pursuant to the provisions of article twenty-eight-A of the
public health law, by hospitals and non-profit medical corporations
constituting eligible borrowers pursuant to the provisions of article
twenty-eight-B of the public health law and by municipalities
constituting social services districts pursuant to the provisions of the
health and mental hygiene facilities improvement act. In this manner,
the broadest possible base of investment by the greatest number of the
general public may be had and the initiative and strength of our private
enterprise economy may most readily be harnessed for the benefit of the
people of the state.
Prompt provision of well-equipped, modern hospitals, schools and other
facilities related to the care, maintenance and treatment of mentally
ill and developmentally disabled persons is also needed in the state. In
order to encourage the investment of private capital in such hospitals,
schools and other mental health services facilities and to assure their
timely construction, acquisition, reconstruction, rehabilitation and
improvement, or the refinancing thereof, the New York state medical care
facilities finance agency should be empowered, through the issuance of
its bonds, notes or other obligations to the private investing public,
to obtain all or a portion of the funds necessary to finance the same
and to meet the needs of patients and staff at such facilities.
It is frequently appropriate to combine and coordinate the
development, rehabilitation and provision of housing with the
development, rehabilitation and provision of health and health related
facilities such as intermediate care, skilled nursing, aged treatment,
and hospice facilities for which there is also a need. In order to
encourage the investment of private capital in non-profit housing and
health facilities, and to assure the expeditious completion of such
facilities, the New York state medical care facilities finance agency
should be empowered, through the issuance of its bonds, notes or other
obligations to the private investing public, to obtain funds necessary
to finance loans, for the construction, acquisition, reconstruction,
rehabilitation or improvement of such facilities.
§ 3. Definitions. As used in this article, unless a different meaning
clearly appears from the context:
1. "Agency" shall mean the corporate governmental agency created by
section four of this act.
2. "Amortized value" means, when used with respect to securities
purchased at a premium above or a discount below par, the value as of
any given date obtained by dividing the total amount of the premium or
discount at which such securities were purchased by the number of days
remaining to maturity on such securities at the time of such purchase
and by multiplying the amount so calculated by the number of days having
passed since the date of such purchase; and (a) in the case of
securities purchased at a premium, by deducting the product thus
obtained from the purchase price, and (b) in the case of securities
purchased at a discount, by adding the product thus obtained to the
purchase price.
3. "Bonds" and "notes" shall mean bonds and notes, respectively,
issued by the agency pursuant to this act. (a) "Hospital and nursing home project bonds" and "hospital and
nursing home project notes" shall mean bonds and notes, respectively,
issued by the agency for the purpose of making loans to hospital
corporations and non-profit medical corporations constituting eligible
borrowers or nursing home companies.
(b) "Health facilities bonds" and "health facilities notes" shall mean
bonds and notes, respectively, issued by the agency for the purpose of
financing the construction, acquisition, reconstruction, rehabilitation
or improvement of health facilities for municipalities pursuant to this
act and the health and mental hygiene facilities improvement act.
(c) "Municipal hospital and municipal nursing home project bonds" and
"municipal hospital and municipal nursing home project notes" shall mean
bonds and notes, respectively, issued by the agency for the purpose of
making mortgage loans to municipal hospitals or municipal nursing homes.
* (d) "Special hospital project bonds" shall mean bonds issued
pursuant to section seven-a of this act for the purpose of making
mortgage loans to eligible secured hospital borrowers.
* NB Expired December 31, 2015
4. "Commissioner" shall mean the New York state commissioner of
health.
5. "Department" shall mean the New York state department of health.
6. "Eligible borrower" shall mean a non-profit hospital corporation
organized under the laws of this state, or a non-profit medical
corporation organized under and governed by article forty-four of the
public health law, which has entered into a regulatory agreement in
accordance with the provisions of section twenty-eight hundred
seventy-three of the public health law.
6-a. "Federally-aided mortgage loan" means a loan secured by a
mortgage lien on the real property of a project or on a leasehold on
such real property, provided that the term of such leasehold is not less
than twenty-five percent longer than the term of the mortgage, and the
personal property attached to or used in connection with the
construction, acquisition, reconstruction, refinancing, rehabilitation,
improvement, management or operation of the project, made by the agency
to a municipal hospital, municipal nursing home, not-for-profit hospital
corporation, not-for-profit corporation providing a residential health
care facility or not-for-profit medical corporation organized pursuant
to article 44 of the public health law, which loan is insured by the
federal government. This subdivision does not limit the agency from
consenting to the modification of any instrument executed in connection
with a federally-aided mortgage loan, provided that the modification
does not materially reduce the value of the security for the
federally-aided mortgage loan. A leasehold under this subdivision shall
conform to standards adopted by the agency, with the approval of the
division of the budget, that adequately protect the interests of the
agency, the state, and creditors.
* (6-b) "Eligible secured hospital borrower" shall mean a
not-for-profit hospital corporation organized under the laws of this
state, which has been designated by the commissioner of health and the
New York state public health council as a needed facility eligible to
receive distributions from the reimbursement pools established pursuant
to paragraph (c) of subdivision nine of section twenty-eight hundred
seven-a of the public health law, or any successor pool or pools
established to serve a substantially similar purpose to such pools.
* NB Expired December 31, 2015
7. "Facilities development corporation" shall mean the corporation
created pursuant to the facilities development corporation act.
8. "Health facility" shall mean a building, a unit within a building,
a laboratory, a classroom, a housing unit, a dining hall, an activities
center, a library, or any structure on or improvement to real property
of any kind or description, including fixtures and equipment which are
an integral part of any such building, unit, structure or improvement, a
walkway, a roadway or a parking lot, and improvements and connections,
for water, sewer, gas, electrical, telephone, heating, air conditioning
and other utility services, or a combination of any of the foregoing,
whether for patient care and treatment of staff, staff family or service
use, located at or related to or constituting a hospital, as defined in
section 2801 of the public health law.
9. "Health facilities improvement program" shall mean a program
undertaken by the agency and, if the agency elects, with the facilities
development corporation acting as its agent, for the purpose of
constructing, acquiring, reconstructing, rehabilitating or improving
health facilities or causing such facilities to be constructed,
acquired, reconstructed, rehabilitated or improved pursuant to the
facilities development improvement act, if applicable, and this act.
* 10. "Hospital project" shall mean a specific work or improvement or
the refinancing of existing indebtedness which constitutes a lien or
encumbrance upon the real property or assets of the eligible borrower or
eligible secured hospital borrower whether or not such refinancing is
related to the construction, acquisition or rehabilitation of a
specified work or improvement undertaken by a non-profit hospital
corporation or a non-profit medical corporation, constituting an
eligible borrower or eligible secured hospital borrower in accordance
with the provisions of article twenty-eight-B of the public health law.
The term "hospital project" as used in this subdivision shall also mean
a separate work or improvement owned and operated by an eligible
borrower to provide such services, functions, capabilities and
facilities as may be convenient or desirable for the operation of
hospital or other such facility.
* NB Expired December 31, 2015
10. "Hospital project" shall mean a specific work or improvement or
the refinancing of existing indebtedness which constitutes a lien or
encumbrance upon the real property or assets of the eligible borrower
whether or not such refinancing is related to the construction,
acquisition or rehabilitation of a specified work or improvement
undertaken by a non-profit hospital corporation or a non-profit medical
corporation, constituting an eligible borrower in accordance with the
provisions of article twenty-eight-B of the public health law.
* 11. "Hospital project cost" shall mean the sum total of all costs
incurred by a non-profit hospital corporation or a non-profit medical
corporation, constituting an eligible borrower or eligible secured
hospital borrower undertaking a project as approved by the commissioner
in accordance with the provisions of article twenty-eight-B of the
public health law. In the case of eligible secured hospital borrowers,
hospital project costs shall include all costs relating to the
refinancing of existing indebtedness attributable to unmet bad debt and
charity losses.
* NB Expired December 31, 2015
11. "Hospital project cost" shall mean the sum total of all costs
incurred by a non-profit hospital corporation or a non-profit medical
corporation, constituting an eligible borrower undertaking a project as
approved by the commissioner in accordance with the provisions of
article twenty-eight-B of the public health law.
* 12. "Mortgage loan" shall mean a loan made by the agency to an
eligible borrower or eligible secured hospital borrower in an amount not
to exceed the total hospital project costs and secured by a first
mortgage lien on the real property of which the hospital project
consists or on a leasehold on such real property, provided that the term
of such leasehold is not less than twenty-five percent longer than the
term of the mortgage, and the personal property attached to or used in
connection with the construction, acquisition, reconstruction,
rehabilitation, improvement or operation of the hospital project. Such
loan may be further secured by such a lien upon other real property
owned by or on a leasehold on real property of the eligible borrower or
eligible secured hospital borrower. Notwithstanding the foregoing
provisions of this subdivision or any other provisions of this act to
the contrary, any personal property may be excluded from the lien of the
mortgage provided (a) the commissioner of health finds that such
property is not essential for the rendition of required hospital
services as such term is defined in article twenty-eight of the public
health law, and (b) the agency consents to such exclusion.
The term "mortgage loan" shall also mean and include a loan made by
the agency to a limited-profit nursing home company in an amount not to
exceed ninety-five percentum of the nursing home project cost, or to a
non-profit nursing home company in an amount not to exceed the total
nursing home project cost, and secured by a first mortgage lien on the
real property of which the nursing home project consists or on a
leasehold on such real property provided that the term of such leasehold
is not less than twenty-five percent longer than the term of the
mortgage, and the personal property attached to or used in connection
with the construction, acquisition, reconstruction, rehabilitation,
improvement or operation of the nursing home project. Notwithstanding
the foregoing provisions of this subdivision or any other provision of
this article to the contrary, any personal property may be excluded from
the lien of the mortgage provided (a) the commissioner finds that such
property is not essential for the nursing home project as such term is
defined in article twenty-eight-A of the public health law, and (b) the
agency consents to such exclusion. A leasehold under this subdivision
shall conform to standards adopted by the agency, with the approval of
the division of the budget, that adequately protect the interests of the
agency, the state and creditors.
* NB Expired December 31, 2015
12. "Mortgage loan" shall mean a loan made by the agency to an
eligible borrower in an amount not to exceed the total hospital project
cost and secured by a first mortgage lien on the real property of which
the hospital project consists and the personal property attached to or
used in connection with the construction, acquisition, reconstruction,
rehabilitation, improvement or operation of the hospital project. Such
loan may be further secured by such a lien upon other real property
owned by the eligible borrower. Notwithstanding the foregoing provisions
of this subdivision or any other provisions of this act to the contrary,
any personal property may be excluded from the lien of the mortgage
provided (a) the commissioner of health finds that such property is not
essential for the rendition of required hospital services as such term
is defined in article twenty-eight of the public health law, and (b) the
agency consents to such exclusion.
The term "mortgage loan" shall also mean and include a loan made by
the agency to a limited-profit nursing home company in an amount not to
exceed ninety-five percentum of the nursing home project cost, or to a
non-profit nursing home company in an amount not to exceed the total
nursing home project cost, and secured by a first mortgage lien on the
real property of which the nursing home project consists and the
personal property attached to or used in connection with the
construction, acquisition, reconstruction, rehabilitation, improvement
or operation of the nursing home project. Notwithstanding the foregoing
provisions of this subdivision or any other provision of this article to
the contrary, any personal property may be excluded from the lien of the
mortgage provided (a) the commissioner finds that such property is not
essential for the nursing home project as such term is defined in
article twenty-eight-A of the public health law, and (b) the agency
consents to such exclusion.
13. "Nursing home company" shall mean a nursing home company as
defined in article twenty-eight-A of the public health law.
(a) A "limited-profit nursing home company" shall mean a company
incorporated pursuant to the provisions of article twenty-eight-A of the
public health law and business corporation law.
(b) A "non-profit nursing home company" shall mean a company
incorporated pursuant to the provisions of article twenty-eight-A of the
public health law and the not-for-profit corporation law.
14. "Nursing home project" shall mean a specific work or improvement
undertaken by a nursing home company in accordance with the provisions
of article twenty-eight-A of the public health law.
15. "Nursing home project cost" shall mean the sum total of all costs
incurred by a nursing home company undertaking a project as approved by
the commissioner in accordance with the provisions of article
twenty-eight-A of the public health law.
16. "Municipality" for the purposes of the health facilities
improvement program and federally-aided mortgage loans to municipal
hospitals and municipal nursing homes means a county, city or town
constituting a social services district as defined in sections two,
sixty-one, seventy-five and seventy-five-a of the social services law,
or any two or more of the foregoing which are acting jointly to provide
a health facility or health facilities, municipal hospitals or municipal
nursing homes.
17. "Bond reserve insurance fund" shall mean the fund created by
section nineteen of this act.
* 18. "Equipment loan" shall mean a loan made by the agency to a
non-profit hospital corporation, a county hospital, a municipal
hospital, a New York state department of health facility, a state
university of New York health care facility or a non-profit corporation
providing a residential health care facility, for the purpose of
financing or refinancing the acquisition through purchase or lease of
equipment, including construction and rehabilitation related to the
installation of such equipment, and shall also include intellectual
property or other intangible property, including information technology
and software, that is eligible for tax-exempt financing under the United
States internal revenue code.
The term "equipment loan" shall also mean the financing of equipment
acquisitions by the purchase, lease or sublease of equipment by the
agency and the lease or sublease of such equipment to a non-profit
hospital corporation, a county hospital, a municipal hospital, a
hospital under the jurisdiction of the state university of New York, or
a non-profit corporation providing a residential health care facility
for the purpose of providing for the acquisition of such equipment and
for the construction and rehabilitation related to the installation
thereof and shall also include intellectual property or other intangible
property, including information technology and software, that is
eligible for tax-exempt financing under the United States internal
revenue code.
* NB There are 3 sub 18's
* 18. "Municipal hospital" or "municipal nursing home" shall mean a
hospital or nursing home of, and located in, a municipality.
* There are 3 sub 18's
* 18. "Hmo investment loan" shall mean a loan made by the agency to a
lending institution for the purpose of financing a loan by the lending
institution to the owner of an Hmo project. Such investment loan shall
be evidenced by a note or other evidence of indebtedness constituting a
general obligation of the lending institution and shall be secured to
the satisfaction of the agency. Such investment loan shall not exceed
one hundred percent of the cost of development of the Hmo project
approved by the agency.
* There are 3 sub 18's
19. "Lending institution" shall mean any bank, trust company, national
bank, state or federal mutual savings bank, state or federal savings and
loan association, or state or federal credit union, insurance company,
pension fund or retirement system of any corporation or association, or
any other entity which is owned or controlled by any one or more of the
above, provided the same is supervised by or responsible to any agency
of the federal government, the state or any department thereof.
20. "Hmo project" shall mean a specific work or improvement, whether
or not to effectuate all or any part of a plan, and includes lands,
buildings, improvements, fixtures and personal property constructed,
acquired or reconstructed, refinanced, rehabilitated, improved, managed,
owned or operated by a non-profit corporation for the purpose of
conducting the activities of a health maintenance organization. "Hmo
project" shall also mean the refinancing of existing indebtedness which
constitutes a lien or other encumbrance upon the real property or assets
of the non-profit corporation conducting the activities of a health
maintenance organization, whether or not such refinancing is related to
the construction, acquisition or rehabilitation of a specified work or
improvement. "Hmo project" shall also mean the financing or refinancing
through purchase or lease of equipment, including construction and
rehabilitation related to the installation of such equipment, whether or
not the financing or refinancing of said equipment is related to the
construction, acquisition or rehabilitation of a specified work or im-
provement. An Hmo project may be undertaken by:
(a) A health maintenance organization holding a valid certificate of
authority issued pursuant to article forty-four of the public health
law;
(b) A health maintenance organization operating under the provisions
of article IX-C of the insurance law; and
(c) By a non-profit corporation which operates a facility which
possesses a valid operating certificate under article twenty-eight of
the public health law and which has entered into a contract with a
health maintenance organization operating under the provisions of
article forty-four of the public health law or article IX-C of the
insurance law to provide health care services to persons enrolled in the
health maintenance organization, provided the commissioner has
determined that the facility will be used principally as the medical
group facility component of a group model health maintenance
organization and the commissioner has approved the construction of the
facility pursuant to section twenty-eight hundred two of the public
health law.
21. "Non-profit housing and health facility" shall mean a specific
work or improvement, whether or not to effectuate all or any part of a
plan acquired, owned, constructed, rehabilitated, improved, managed or
operated by a non-profit company and consisting of five or more
residential units, and at the election of the agency such additional
health or health related facilities as the agency may approve; and
including the lands, buildings and improvements acquired, owned,
constructed, managed or operated to provide such units, and health or
health related facilities and such incidental and appurtenant
commercial, recreation, cultural, communal, dining, parking, day care or
residential child care, senior citizen and community facilities as may
be approved by the agency. As used in connection with the term
non-profit housing and health facility, the term residential unit shall
refer to units suitable for residential use or accommodations included
within the term housing as defined in subdivision nine of section twelve
of the private housing finance law, and the term non-profit company
shall mean a company incorporated pursuant to the provisions of the
not-for-profit corporation law for the purpose of providing housing for
staff members, employees, students or users of a hospital, health, or
health related facility and their immediate families or for the purpose
of providing a hospital, health, or health related facility.
23. "Loan" when made to either an eligible borrower or nursing home
company, shall mean either a mortgage loan or a project loan, each as
defined in this act.
24. "Project loan" shall mean a loan made by the agency to an eligible
borrower or nursing home company in an amount not to exceed the total
hospital project cost or total nursing home project cost, respectively.
Such loans shall be secured in a manner acceptable to the agency and
such security may consist of a mortgage on real property and
improvements or other security acceptable to the agency; provided
however, that a project loan shall not include any loan made by the
agency to an eligible borrower or nursing home company that constitutes
a mortgage loan as defined in this act. Project loans shall only be made
in accordance with guidelines adopted by the board of the dormitory
authority, as successor to the agency.
§ 4. New York state medical care facilities finance agency. There is
hereby created the New York state medical care facilities finance
agency. The agency shall be a corporate governmental agency constituting
a public benefit corporation. From and after the effective date of the
health care financing consolidation act, as provided in subdivision 1 of
section 1699-f of the public authorities law, the agency shall continue
its corporate existence in and through the dormitory authority, and the
dormitory authority shall succeed to the powers, duties and functions of
the agency.
§ 5. Powers of the agency. Except as otherwise limited by this act,
the agency shall have power:
1. To sue and be sued;
2. To have a seal and alter the same at pleasure;
3. To make and execute contracts and all other instruments necessary
or convenient for the exercise of its powers and functions under this
act;
4. To make and alter by-laws for its organization and internal
management;
5. To acquire, hold and dispose of personal property for its corporate
purposes;
6. To appoint officers, agents and employees, prescribe their duties
and qualifications and fix their compensation;
7. To borrow money and issue negotiable notes, bonds or other
obligations and to provide for the rights of the holders thereof;
8. To invest any funds held in reserve or sinking funds, or any monies
not required for immediate use or disbursement, at the discretion of the
agency, in obligations of the state or the United States government or
obligations the principal and interest of which are guaranteed by the
state or the United States government, or in any other obligations in
which the comptroller of the state of New York is authorized to invest
pursuant to section ninety-eight of the state finance law;
9. Subject to the approval of the commissioner of health pursuant to
the provisions of article twenty-eight-A of the public health law, to
make mortgage and project loans to nursing home companies and to
undertake commitments to make any such mortgage and project loans;
* 10. Subject to the approval of the commissioner of health pursuant
to the provisions of article twenty-eight-B of the public health law, to
make mortgage and project loans to non-profit hospital corporations and
non-profit medical corporations constituting eligible borrowers and
eligible secured hospital borrowers and to undertake commitments to make
any such mortgage and project loans;
* NB Expired December 31, 2015
10. Subject to the approval of the commissioner of health pursuant to
the provisions of article 28-B of the public health law, to make
mortgage loans and project loans to non-profit hospital corporations and
non-profit medical corporations constituting eligible borrowers and to
undertake commitments to make any such mortgage loans and project loans;
10-a. To make federally-aided mortgage loans pursuant to section
five-a of this act and, in connection with such federally-aided mortgage
loans, to exercise the powers and undertake the responsibilities as
required by any law, regulation or other requirement of the federal
government.
10-b. To make equipment loans pursuant to section five-b of this act
and, in connection with such equipment loans, to enter into agreements
with respect to the repayment of such loans.
10-c. Subject to any agreement with bondholders and noteholders as may
then exist, to permit eligible borrowers and nursing home companies to
incur, assume or guarantee indebtedness from a lender other than the
agency or from the agency under a separate bond resolution, as provided
for in agreements with bondholders and noteholders and section five-c of
this act.
11. Subject to the approval of the commissioner of health, to sell, at
public or private sale, any mortgage or other obligation securing a
mortgage loan made by the agency;
12. In connection with the making of mortgage or project loans and
commitments therefor to non-profit hospital corporations and non-profit
medical corporations constituting eligible borrowers or nursing home
companies, to make and collect from such corporations and companies such
fees and charges, including but not limited to reimbursement of all
costs of financing by the agency, service charges and insurance
premiums, as the agency shall determine to be reasonable;
12-a. In connection with the financing or refinancing of a mental
health services facility pursuant to lease, sublease, loan or other
financing agreements for the purpose of providing financing or
refinancing for or for the purpose of constructing, rehabilitating or
improving mental health services facilities, to make and collect such
fees and charges, including but not limited to reimbursement of all
costs of financing by the agency, service charges, insurance premiums,
letter of credit fees or the costs of any other financial mechanisms
which may be used to reduce the debt service that would be payable by
the agency on its mental health services facilities improvement bonds
and notes, as the agency shall determine to be reasonable.
13. In connection with any property on which it has made a mortgage
loan or a project loan, to foreclose on any such property secured by a
mortgage or commence any action to protect or enforce any right
conferred upon it by any law, mortgage, contract or other agreement, and
to bid for and purchase such property at any foreclosure or at any other
sale, or acquire or take possession of any such property; and in such
event the agency may complete, administer, pay the principal of and
interest on any obligations incurred in connection with such property,
dispose of, and otherwise deal with, such property, in such manner as
may be necessary or desirable to protect the interests of the agency
therein;
14. To lease or purchase one or more existing health facilities from a
municipality and cause such health facilities to be reconstructed,
rehabilitated or improved, or to lease or purchase real property from a
municipality and cause one or more health facilities to be constructed,
reconstructed, rehabilitated or improved thereon, or to lease or
purchase one or more existing health facilities from a municipality
which has already been constructed, reconstructed, rehabilitated or
improved provided, however, that no such health facility shall be
eligible for such lease or purchase unless it has been constructed,
reconstructed, rehabilitated or improved within eighteen months of the
date of the bond issue and the amount of the bond issue used to finance
such lease or purchase shall not exceed the total project cost to the
municipality of such construction, reconstruction, rehabilitation or
improvement. At the election of the agency, any construction,
reconstruction, rehabilitation or improvement pursuant to this
subdivision may be performed by the facilities development corporation,
acting as the agent of the agency;
15. To lease or purchase from any person, firm or corporation one or
more existing health facilities and cause such health facilities to be
reconstructed, rehabilitated or improved or to lease or purchase real
property from any person, firm or corporation and cause one or more
health facilities to be constructed, reconstructed, rehabilitated or
improved thereon, or to lease or purchase one or more existing health
facilities from a person, firm or corporation which has already been
constructed, reconstructed, rehabilitated or improved provided, however,
that no such health facility shall be eligible for such lease or
purchase unless it has been constructed, reconstructed, rehabilitated or
improved within eighteen months of the date of the bond issue and the
amount of the bond issue used to finance such lease or purchase shall
not exceed the total project cost to the municipality of such
construction, reconstruction, rehabilitation or improvement. At the
election of the agency, any construction, reconstruction, rehabilitation
or improvement pursuant to this subdivision may be performed by the
facilities development corporation, acting as the agent of the agency;
* 15-a. Notwithstanding the provisions of subdivision fifteen of this
section, to lease or purchase from any person, firm or corporation one
or more health facilities the construction, reconstruction,
rehabilitation or improvement of which has been financed, in whole or in
part, through loans furnished, secured or arranged by a local
development corporation incorporated and existing pursuant to section
1411 of the not-for-profit corporation law, provided, however, that such
local development corporation was in existence and engaged in promoting
the development of health facilities on January 1, 1999, and provided,
further, that the proceeds of the bond issue allocable to each such
health facility shall not exceed seven million five hundred thousand
dollars.
* NB Repealed June 30, 2027
16. To lease or sublease to a municipality health facilities which
have been constructed, acquired, reconstructed, rehabilitated or
improved by the agency pursuant to this act and the facilities
development improvement act, if applicable;
17. To exercise all or any combination of the powers set forth in
subdivisions fourteen, fifteen and sixteen of this section;
18. To procure insurance against any loss in connection with its
property and other assets (including mortgages and mortgage loans) in
such amounts, and from such insurers, as it deems desirable;
19. To accept any gifts or grants or loans of funds or property or
financial or other aid in any form from the federal government or any
agency or instrumentality thereof or from the state or from any other
source and to comply, subject to the provisions of this act, with the
terms and conditions thereof;
20. To engage the services of private consultants on a contract basis
for rendering professional and technical assistance and advice;
21. To enter into a contract with the New York state housing finance
agency to market and service any agency bonds and notes approved by the
agency and to contract with the New York state housing finance agency to
render such other services as the agency may request, including but not
limited to the use of the premises, personnel and personal property of
the New York state housing finance agency, and to provide for
reimbursement to the New York state housing finance agency from the
agency for any expenses necessarily incurred by the New York state
housing finance agency in carrying out the terms of any such contract.
Any such contract shall be subject to the separate approval of the
director of the budget;
22. Subject to the approval of the commissioner of health, to acquire
by purchase from the New York state housing finance agency any mortgage
or other obligation securing a loan made by the New York state housing
finance agency to a hospital corporation or to a nursing home company,
and to sell same at public or private sale;
23. To acquire by purchase from the New York state housing finance
agency its right, title and interest in real property, leaseholds and
subleaseholds relating to the municipal health facilities improvement
program;
24. To do any and all things necessary or convenient to carry out its
purposes and exercise the powers expressly given and granted in this
act.
§ 5-a. Federally-aided mortgage loans. In addition to the powers of
the agency to make mortgage loans pursuant to other provisions of this
act, the agency has the following powers:
1. The agency may make federally-aided mortgage loans to a municipal
hospital, municipal nursing home, non-profit hospital corporation,
non-profit corporation providing a residential health care facility or
non-profit medical corporation organized pursuant to article forty-four
of the public health law upon terms and conditions not inconsistent with
article twenty-eight of the public health law or article sixteen or
thirty-one of the mental hygiene law as the case may be and this
section. The proceeds of such loan are to be used substantially to
finance the construction, acquisition, reconstruction, refinancing,
rehabilitation, improvement, management or operation of the project.
2. A federally-aided mortgage loan made by the agency shall not exceed
an amount equal to the lesser of (i) the maximum mortgage loan
authorized or approved by the federal government or (ii) one hundred
percent of the cost of development of the project approved by the
agency.
3. With respect to a non-profit hospital corporation, non-profit
corporation providing a residential health care facility or non-profit
medical corporation, the agency shall not make a federally-aided
mortgage loan unless (a) the commissioner has approved the project,
recommended the project based on public need and the financial resources
available to it, and finds that the non-profit hospital corporation,
non-profit corporation providing a residential health care facility, or
non-profit medical corporation has complied with the provisions of
article twenty-eight of the public health law or article sixteen or
thirty-one of the mental hygiene law as the case may be, and that the
non-profit medical corporation also has complied with the provisions of
article forty-four of the public health law, and (b) the agency finds
that (i) the estimated revenues of the project will be sufficient to
cover all probable costs of operations and maintenance, all installments
of principal and interest on the indebtedness relating to the project,
taxes, and such other expenses, including the maintenance of reserves,
as may be projected or required by the agency or the federal government,
and (ii) with respect to a nursing home project, the project is to be
available for persons of low income as defined by paragraph two of
section twenty-eight hundred sixty of the public health law.
4. As used in this section or in connection with a federally-aided
mortgage loan, the term "project" means a specific work or improvement,
whether or not to effectuate all or any part of a plan, and includes
lands, buildings, improvements, fixtures and personal property
constructed, acquired, reconstructed, refinanced, rehabilitated,
improved, managed, owned or operated by a non-profit corporation
pursuant to this section, to provide hospital, residential health care,
residential facilities for developmentally disabled persons or mentally
disabled persons or for the care, treatment, training and education of
developmentally disabled persons or mentally disabled persons or
comprehensive health services facilities and such related incidental and
appurtenant facilities as the agency may approve. The term "project"
shall also mean a separate work or improvement, including lands,
buildings, fixtures and personal property related thereto, managed,
owned or operated by a non-profit corporation pursuant to this section
to provide such services, functions, capabilities and facilities as may
be convenient or desirable for the operation of a hospital, a
residential health care or comprehensive health services facility.
5. Notwithstanding any other provisions of law, general, special or
local, or any provision of any charter or ordinance, including local
finance law section twenty, a municipality is hereby authorized to
borrow for or give a mortgage on its municipal hospitals or nursing
homes for the purpose of constructing, reconstructing, rehabilitating or
improving one or more such hospitals or nursing homes pursuant to this
act in accordance with the terms of any agreement entered into pursuant
to this act.
6. As used in this section or in connection with federally-aided
mortgage loan regarding residential facilities for developmentally
disabled persons or mentally disabled persons or for the care,
treatment, training and education of developmentally disabled persons or
mentally disabled persons the term "commissioner" shall also mean the
commissioner of mental health or the commissioner of the office for
people with developmental disabilities.
7. (a) In connection with the making of federally-aided mortgage
loans, the commissioner of health shall charge to such non-profit
hospital corporation, non-profit corporation providing a residential
health care facility or non-profit medical corporation, for mortgage
closings on or after April first, nineteen hundred eighty-nine, a fee of
nine-tenths of one percent of the mortgage loan, payable on requisition
on or after the mortgage closing to the state department of health by
the mortgagor for deposit into the state general fund.
(b) In connection with the refinancing or refunding of federally-aided
mortgage loans or loans made pursuant to articles twenty-eight-A and
twenty-eight-B of the public health law, the commissioner of health
shall charge to such non-profit hospital corporation, non-profit
corporation providing a residential health care facility or non-profit
medical corporation, for mortgage closings on or after April first,
nineteen hundred eighty-nine, a fee of five-tenths of one percent of the
new mortgage loan, payable on requisition on or after the mortgage
closing to the state department of health by the mortgagor for deposit
into the state general fund.
(c) The fees and charges paid by a non-profit hospital corporation,
non-profit corporation providing a residential health care facility or
non-profit medical corporation pursuant to this subdivision shall be
deemed allowable capital costs in the determination of reimbursement
rates established pursuant to article twenty-eight of the public health
law. 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 article
twenty-eight of the public health law.
* § 5-b. Equipment loans. 1. The agency may make an equipment loan to
a non-profit hospital corporation, a county hospital, a municipal
hospital, a New York state department of health facility, a state
university of New York health care facility or a non-profit corporation
providing a residential health care facility, upon terms and conditions
not inconsistent with article twenty-eight of the public health law and
this section. The proceeds of such loan are to be used substantially to
finance the acquisition through purchase or lease of equipment including
construction and rehabilitation related to the installation of such
equipment or the acquisition of intellectual property or other
intangible property, including information technology and software, that
is eligible for tax-exempt financing under the United States internal
revenue code.
2. The agency shall not make an equipment loan unless the agency finds
that the non-profit hospital corporation, municipal hospital, county
hospital, New York state department of health facility, a state
university of New York health care facility or non-profit corporation
providing a residential health care facility, has complied with the
provisions of article twenty-eight of the public health law in
connection with the proposed equipment loan and that the commissioner
has approved the equipment acquisition or lease pursuant to section
twenty-eight hundred two of the public health law in any case where the
acquisition or lease is subject to the provisions of such section, or
has approved such acquisition or lease according to guidelines
prescribed by the commissioner in any other case.
3. The agency may make an equipment loan by the purchase, lease or
sublease of equipment by the agency and the lease or sublease of such
equipment to a non-profit hospital corporation, a county hospital, a
municipal hospital, a hospital under the jurisdiction of the state
university of New York health care facility, or a non-profit corporation
providing a residential health care facility for the purpose of
providing for the acquisition of such equipment and for the construction
and rehabilitation related to the installation thereof. Notwithstanding
the above, the agency shall not make an equipment loan pursuant to this
section unless or until the borrower or lessee, vendee, licensee or
other ultimate beneficiary of such equipment loan has obtained the
approval of the commissioner pursuant to section twenty-eight hundred
two of the public health law or such other guidelines prescribed by the
commissioner in any case where the acquisition or lease is or would
otherwise have been subject to such provisions, had the borrower,
lessee, vendee, licensee or ultimate beneficiary of such equipment loan
obtained financing from a source other than the agency.
* NB There are 2 § 5-b's
* § 5-b. Health maintenance organization loans. 1. The agency may make
Hmo investment loans to lending institutions for the purpose of
financing an Hmo project. In connection with the making of investment
loans and commitments therefor to lending institutions, the agency may
make and collect from such lending institutions such fees and charges
including, but not limited to, reimbursement of all costs of financing
by the agency and service charges, as the agency shall determine to be
reasonable.
2. In addition to the powers of the agency to make Hmo investment
loans pursuant to other provisions of this act, the agency may make
loans and undertake commitments to make loans to owners of Hmo projects,
which loans may be but are not limited to mortgage loans, mortgage loans
insured by the federal government or leasehold mortgage loans. Such
loans shall be of such terms and conditions, and shall be secured in
such manner as is satisfactory to the agency.
3. The agency shall not make a loan or Hmo investment loan pursuant to
this section unless (a) the commissioner has approved the Hmo project
pursuant to section twenty-eight hundred two of the public health law in
any case where the project is subject to the provisions of such section
or has approved the project according to guidelines prescribed by the
commissioner in any other case, and (b) the agency finds that the
estimated revenues of the Hmo project or the Hmo investment loan, as the
case may be, will be sufficient to cover all installments of principal
and interest on the indebtedness issued relating to the Hmo project, and
(c) the indebtedness issued relating to the Hmo project has received an
investment grade rating from a recognized rating agency, or the loan or
the Hmo investment loan made by the agency is fully secured as to
principal and interest by the general credit of a bank, national bank,
trust company, savings bank, savings and loan association, insurance
company, governmental agency of the United States of America, or a
combination thereof.
* NB There are two § 5-b's
§ 5-c. Terms and conditions regarding alternative indebtedness. The
agency may require such terms and conditions regarding indebtedness
incurred or assumed from a lender other than the agency or guaranteed by
an eligible borrower or nursing home company as it deems appropriate
including qualifications and approval of the lender, approval of the
purpose of the indebtedness, time or rate of amortization of principal,
and time or rate of payment of interest; provided, however, that the
interest of the lender created as a result of such indebtedness as to
priority of lien with respect to a mortgage loan may only be on a parity
with or subordinate to that of the agency in proportion to the amount of
the loan secured. Such a borrower may so incur, assume or guarantee
indebtedness from a lender other than the agency, or incur, assume or
guarantee indebtedness from the agency under a separate bond resolution
upon such terms and conditions provided for in the applicable agreement
with bondholders and noteholders and with the consent of the agency
where such lender is other than the agency. This section applies only
where the agency has issued its bonds to make a mortgage loan or a
project loan to a hospital to which the agency is authorized to make a
loan pursuant to this act and the bonds and notes are not secured
pursuant to paragraph (a) of subdivision one of section seven of this
act.
§ 5-d. Financing non-profit housing and health facilities. 1. Subject
to the provisions of any contract with noteholders and bondholders (a)
to make and contract for the making of loans for the acquisition,
refinancing, construction or rehabilitation of non-profit housing and
health facilities and (b) to make and to contract for the making of
loans to or to purchase loans from lending institutions for the purposes
of financing loans for such acquisition, construction or rehabilitation.
2. The powers granted by this section may be exercised only if: (a)
the commissioner has approved any health, or health related facilities
which are in addition to the residential unit and housing portion of the
facility, pursuant to section twenty-eight hundred two of the public
health law in any case where the facility is subject to the provisions
of such section or has approved the facility according to the guidelines
prescribed in any other case; and (b) (i) obligations of the agency have
been issued to fund the loan made or purchased by the agency and such
obligations have received an investment grade rating from a recognized
rating agency, or (ii) the loan made or purchased by the agency is fully
secured as to principal and interest by insurance or a commitment to
insure issued by the state of New York mortgage agency or by the general
credit of the bank, national bank, trust company, savings bank, savings
and loan association, insurance company, the college construction loan
insurance association, the student loan marketing association, or a
governmental agency of the United States.
§ 6. Bonds and notes of the agency. 1. (a) The agency shall have power
and is hereby authorized from time to time to issue its negotiable bonds
and notes in conformity with applicable provisions of the uniform
commercial code in such principal amount as, in the opinion of the
agency, shall be necessary to provide sufficient funds for achieving its
corporate purposes, including the making of mortgage loans, project
loans, or equipment loans, or loans to owners of Hmo projects or Hmo
investment loans and the construction, acquisition, reconstruction,
rehabilitation or improvement of health facilities, the payment of
interest on bonds and notes of the agency, establishment of reserves to
secure such bonds and notes, and all other expenditures of the agency
incident to and necessary or convenient to carry out its corporate
purposes and powers;
(b) The agency shall have power, from time to time, to issue renewal
notes, to issue bonds to pay notes and whenever it deem refunding
expedient, to refund any bonds by the issuance of new bonds, whether the
bonds to be refunded have or have not matured, and to issue bonds partly
to refund bonds then outstanding and partly for any other purpose. The
refunding bonds shall be sold and the proceeds applied to the purchase,
redemption or payment of the bonds to be refunded;
(c) Except as may otherwise be expressly provided by the agency, every
issue if its notes or bonds shall be general obligations of the agency
payable out of any revenues or monies of the agency, subject only to any
agreements with the holders of particular notes or bonds pledging any
particular receipts or revenues.
2. The notes and bonds shall be authorized by resolution of the
members, shall bear such date or dates, and shall mature at such time or
times, in the case of any such note, or any renewals thereof, issued for
achieving its corporate purposes other than the making of mortgage
loans, not exceeding five years, from the date of issue of such original
note, and in the case of any such note, or any renewals thereof, issued
for the purpose of making mortgage loans, not exceeding seven years,
from the date of issue of such original note, and in the case of any
such bond not exceeding fifty years from the date of issue, as such
resolution or resolutions may provide. The notes and bonds shall bear
interest at such rate or rates, be in such denominations, be in such
form, either coupon or registered, carry such registration privileges,
be executed in such manner, be payable in such medium of payment, at
such place or places and be subject to such terms of redemption as such
resolution or resolutions may provide. The notes and bonds of the agency
may be sold by the agency, at public or private sale, at such price or
prices as the agency shall determine. No notes or bonds of the agency
may be sold by the agency at private sale, however, unless such sale and
the terms thereof have been approved in writing by (a) the comptroller,
where such sale is not to the comptroller or, (b) the director of the
budget, where such sale is to the comptroller.
3. Any resolution or resolutions authorizing any notes or bonds or any
issue thereof may contain provisions, which shall be a part of the
contract with the holders thereof, as to:
(a) pledging all or any part of the fees and charges made or received
by the agency, and all or any part of the monies received in payment of
mortgage or project loans and interest thereon, and other monies
received or to be received, to secure the payment of the hospital and
nursing home project bonds or hospital nursing home project notes or of
any issue thereof, subject to such agreement with bondholders or
noteholders as may then exist;
(b) pledging all or any part of the assets of the agency, including
mortgages and obligations securing the same, to secure the payment of
the hospital and nursing home project bonds or hospital and nursing home
project notes, subject to such agreements with bondholders or
noteholders as may then exist, provided that no resolution or
resolutions of the agency authorizing hospital and nursing home project
bonds and hospital and nursing home project notes shall (i) pledge all
or any portion of the rentals paid to the agency with respect to health
facilities financed with the proceeds of health facilities bonds or
health facilities notes, or (ii) pledge any other assets, monies or
accounts pledged to the agency as security for the payment of rentals
with respect to health facilities financed with the proceeds of health
facilities bonds or health facilities notes;
(c) the use and disposition of the gross income from mortgages owned
by the agency and payment of principal of mortgages owned by the agency;
(d) pledging all or any part of the rentals paid to the agency with
respect to health facilities financed with the proceeds of health
facilities bonds or health facilities notes or any other assets, monies
or accounts pledged or assigned to the agency as security for the
payment of such rentals, all subject to any agreement with noteholders
or bondholders as may then exist and provided that no resolution or
resolutions authorizing health facilities bonds and health facilities
notes shall (i) pledge all or any part of the fees and charges made or
received by the agency pursuant to subdivision twelve of section five in
connection with the making of mortgage loans or commitments therefor, or
all or any part of the monies received in payment of such mortgage loans
and interest thereon, or (ii) pledge all or any part of the mortgages of
the agency or obligations securing the same, or (iii) provide as to the
use and disposition of the gross income from mortgages owned by the
agency or as to the payment of principal of mortgages owned by the
agency;
(e) the setting aside of reserves or sinking funds and the regulation
and disposition thereof;
(f) limitations on the purpose to which the proceeds of sale of notes
or bonds may be applied and pledging such proceeds to secure the payment
of the notes or bonds or of any issue thereof;
(g) limitations on the issuance of additional notes or bonds; the
terms upon which additional notes or bonds may be issued and secured;
the refunding of outstanding or other notes or bonds;
(h) the procedure, if any, by which the terms of any contract with
noteholders or bondholders may be amended or abrogated, the amount of
notes or bonds the holders of which must consent thereto, and the manner
in which such consent may be given;
(i) limitations on the amount of monies to be expended by the agency
for operating, administrative or other expenses of the agency;
(j) vesting in a trustee or trustees such property, rights, powers and
duties in trust as the agency may determine, which may include any or
all of the rights, powers and duties of the trustee appointed by the
bondholders pursuant to this act, and limiting or abrogating the right
of the bondholders to appoint a trustee under this act or limiting the
right, powers and duties of such trustee;
(k) any other matters, of like or different character, which in any
way affect the security or protection of the notes or bonds.
(l) pledging all or any part of the fees and charges made or received
by the agency, and all or any part of the monies received pursuant to a
lease, sublease, loan or other financing agreements entered into
pursuant to section nine-a of this act and interest thereon, and other
monies received or to be received, to secure the payment of mental
health services facilities improvement notes or bonds or of any issue
thereof, subject to such agreements with bondholders or noteholders as
may then exist;
(m) pledging all or any part of the assets of the agency, including
lease, sublease, loan or other financing agreements entered into
pursuant to section nine-a of this act, and obligations securing the
same, to secure the payment of mental health services improvement
facilities notes or bonds or of any issue of notes or bonds, subject to
such agreements with noteholders or bondholders as may then exist;
(n) the use and disposition of the gross income from lease, sublease,
loan or other financing agreements entered into pursuant to section
nine-a of this act and payment of principal of lease, sublease, loan or
other financing agreements entered into pursuant to section nine-a of
this act;
(o) pledging or depositing all or any part of the assets of the
agency, including moneys paid to the agency by the comptroller and the
commissioner of taxation and finance of the state of New York pursuant
to the provisions of section ninety-seven-f of the state finance law, to
pay or provide for the refunding of mental hygiene improvement bonds
issued pursuant to section forty-seven-b of the private housing finance
law.
4. It is the intention hereof that any pledge made by the agency shall
be valid and binding from the time when the pledge is made; that the
monies or property so pledged and thereafter received by the agency
shall immediately be subject to the lien of such pledge without any
physical delivery thereof or further act; and that the lien of any such
pledge shall be valid and binding as against all parties having claims
of any kind in tort, contract or otherwise against the agency,
irrespective of whether such parties have notice thereof. Neither the
resolution nor any other instrument by which a pledge is created need be
recorded.
5. Neither the members of the agency nor any person executing the
notes or bonds shall be liable personally on the notes or bonds or be
subject to any personal liability or accountability by reason of the
issuance thereof.
6. The agency, subject to such agreements with noteholders or
bondholders as may then exist, shall have power out of any funds
available therefor to purchase notes or bonds of the agency, which shall
thereupon be cancelled, at a price not exceeding (a) if the notes or
bonds are then redeemable, the redemption price then applicable plus
accrued interest to the next interest payment date thereon, or (b) if
the notes or bonds are not then redeemable, the redemption price
applicable on the first date after such purchase upon which the notes or
bonds become subject to redemption plus accrued interest to such date.
7. The state shall not be liable on notes or bonds of the agency and
such notes and bonds shall not be a debt of the state, and such notes
and bonds shall contain on the face thereof a statement to such effect.
§ 7. Hospital and nursing home projects reserve funds and
appropriations. 1. (a) For the purposes of the issuance by the agency of
hospital and nursing home project bonds, the term "hospital and nursing
home capital reserve fund requirement" shall mean, as of any particular
date of computation, an amount of money equal to the greatest of the
respective amounts, for the then current or any succeeding calendar
year, of annual debt service payments of the agency, such annual debt
service payments for any calendar year being an amount of money equal to
the aggregate of (i) all interest payable during such calendar year on
all hospital and nursing home project bonds of the agency then
outstanding on said date of computation, plus (ii) the principal amount
of all hospital and nursing home project bonds of the agency then
outstanding on said date of computation which mature during such
calendar year, plus (iii) the amount of all sinking fund payments
payable during such calendar year with respect to all hospital and
nursing home project bonds of the agency outstanding on said date of
computation; and the term "sinking fund payment" shall mean the amount
of money specified in the resolution authorizing term bonds as payable
into a sinking fund for the amortization of such term bonds. The agency
shall create and establish a special fund to be known as the hospital
and nursing home capital reserve fund and may pay into such reserve fund
(1) any monies appropriated and made available by the state for the
purposes of such fund, (2) any proceeds of sale of hospital and nursing
home project notes or hospital and nursing home project bonds, to the
extent provided in the resolution of the agency authorizing the issuance
thereof, and (3) any other monies which may be made available to the
agency for the purposes of such fund from any other source or sources.
The monies held in or credited to the hospital and nursing home capital
reserve fund established under this subdivision, except as hereinafter
provided, shall be used solely for the payment of the principal of
hospital and nursing home project bonds of the agency secured by such
reserve fund, as the same mature, sinking fund payments, the purchase of
such hospital and nursing home project bonds of the agency, the payment
of interest on such hospital and nursing home projects bonds of the
agency, or the payment of any redemption premium required to be paid
when such bonds are redeemed prior to maturity; provided, however, that
monies in such fund shall not be withdrawn therefrom at any time in such
amount as would reduce the amount of such fund to less than the hospital
and nursing home capital reserve fund requirement, except for the
purpose of paying principal and interest on the hospital and nursing
home project bonds of the agency secured by such reserve fund maturing
and becoming due and any sinking fund payments and for the payment of
which other monies of the agency are not available. Any income or
interest earned by, or increment to, the hospital and nursing home
capital reserve fund due to the investment thereof may be transferred to
any other fund or account of the agency to the extent it does not reduce
the amount of the hospital and nursing home capital reserve fund below
the hospital and nursing home capital reserve fund requirement.
(b) The agency shall not issue hospital and nursing home project bonds
and hospital and nursing home project notes in an aggregate principal
amount exceeding seventeen billion four hundred million dollars,
excluding hospital and nursing home project bonds and hospital and
nursing home project notes issued to refund outstanding hospital and
nursing home projects bonds and hospital and nursing home project notes;
provided, however, that upon any such refunding or repayment the total
aggregate principal amount of outstanding bonds, notes or other
obligations may be greater than seventeen billion four hundred million
dollars only if the present value of the aggregate debt service of the
refunding or repayment bonds, notes or other obligations to be issued
shall not exceed the present value of the aggregate debt service of the
bonds, notes or other obligations so to be refunded or repaid. For
purposes hereof, the present values of the aggregate debt service of the
refunding or repayment bonds, notes or other obligations and of the
aggregate debt service of the bonds, notes or other obligations so
refunded or repaid, shall be calculated by utilizing the effective
interest rate of the refunding or repayment bonds, notes or other
obligations, which shall be that rate arrived at by doubling the
semi-annual interest rate (compounded semi-annually) necessary to
discount the debt service payments on the refunding or repayment bonds,
notes or other obligations from the payment dates thereof to the date of
issue of the refunding or repayment bonds, notes or other obligations
and to the price bid including estimated accrued interest or proceeds
received by the agency including estimated accrued interest from the
sale thereof. The agency shall not issue hospital and nursing home
project bonds at any time secured by the hospital and nursing home
capital reserve fund if upon issuance, the amount in the hospital and
nursing home capital reserve fund will be less than the hospital and
nursing home capital reserve fund requirement, unless the agency, at the
time of issuance of such bonds, shall deposit in such reserve fund from
the proceeds of the bonds so to be issued, or otherwise, an amount which
together with the amount then in such reserve fund, will be not less
than the hospital and nursing home capital reserve fund requirement.
(c) To assure the continued operation and solvency of the agency for
the carrying out of the public purposes of this act, provision is made
in paragraph (a) of this subdivision for the accumulation in the
hospital and nursing home capital reserve fund of an amount equal to the
hospital and nursing home capital reserve fund requirement. In order
further to assure the maintenance of the hospital and nursing home
capital reserve fund, there shall be annually apportioned and paid to
the agency for deposit in the hospital and nursing home capital reserve
fund such sum, if any, as shall be certified by the chairman of the
agency to the governor and director of the budget as necessary to
restore such reserve fund to an amount equal to the hospital and nursing
home capital reserve fund requirement. The chairman of the agency shall
annually, on or before December first, make and deliver to the governor
and director of the budget his certificate stating the sums, if any,
required to restore the hospital and nursing home capital reserve fund
to the amount aforesaid and the sums so certified, if any, shall be
apportioned and paid to the agency during the then current state fiscal
year. The principal amount of bonds secured by the hospital and nursing
home capital reserve fund to which state funds are apportionable
pursuant to this paragraph shall be limited to the total amount of bonds
and notes outstanding on the effective date of this act, plus the total
amount of bonds and notes contracted after the effective date of this
act to finance projects in progress on the effective date of this act as
determined by the New York state public authorities control board
created pursuant to section fifty of the public authorities law whose
affirmative determination shall be conclusive as to all matters of law
and fact solely for the purposes of the limitations contained in this
paragraph, but in no event shall the total amount of bonds so secured by
such a capital reserve fund or funds exceed two hundred forty million
dollars, excluding bonds issued to refund such outstanding bonds until
the date of redemption of such outstanding bonds. As outstanding bonds
so secured are paid, the amount so secured shall be reduced accordingly
but the redemption of such outstanding bonds from the proceeds of
refunding bonds shall not reduce the amount so secured.
(d) In computing the hospital and nursing home capital reserve fund
for the purposes of this section, securities in which all or a portion
of such reserve fund shall be invested shall be valued at par if
purchased at par, or if purchased at other than par, at amortized value.
2. The agency shall create and establish one or more special funds
(herein referred to as hospital and nursing home general reserve funds)
and shall, to the extent provided in the applicable bond resolution of
the agency authorizing the issuance of hospital and nursing home project
bonds, pay into any such fund the fees and charges collected by the
agency pursuant to subdivision twelve of section five of this act and
any monies which the agency shall transfer from the hospital and nursing
home capital reserve fund pursuant to the provisions of paragraph (a) of
subdivision one of this section. Such monies and any other monies paid
into a hospital and nursing home general reserve fund may, in the
discretion of the agency, but subject to agreements with bondholders and
noteholders, be used by the agency (a) for the repayment of advances
from the state in accordance with the provisions of repayment agreements
between the agency and the director of the budget, (b) to reimburse the
department of health the reasonable costs of the services performed by
the commissioner of health and the department of health pursuant to
subdivision two of section seventeen of this act, (c) to pay all costs,
expenses and charges of financing, including fees and expenses of
trustees and paying agents, (d) for transfers to the hospital and
nursing home capital reserve fund, (e) for the payment of principal and
interest on hospital and nursing home project bonds and hospital and
nursing home project notes issued by the agency when the same shall
become due whether at maturity or on call for redemption and for the
payment of any redemption premium required to be paid where such
hospital and nursing home project bonds and hospital and nursing home
project notes are redeemed prior to their stated maturities and any
sinking fund payments, and to purchase hospital and nursing home project
bonds or hospital and nursing home project notes issued by the agency,
or (f) for such other corporate purposes of the agency as the agency in
its discretion shall determine and provide.
* § 7-a. Secured hospital projects reserve funds and appropriations.
1. Special hospital project bonds issued to finance the projects of
eligible secured hospital borrowers shall be secured by (i) a first
mortgage lien on such property as specified in accordance with
subdivision twelve of section three of this act, (ii) funds and accounts
established under the bond resolution, (iii) the secured hospital
special debt service reserve fund or funds, (iv) the secured hospital
capital reserve fund or funds, and (v) such service contract or
contracts entered into in accordance with the provisions of subdivision
four of this section.
2. (a) The agency shall establish a secured hospital special debt
service reserve fund or funds and pay into such fund or funds moneys
from the secured hospital fund up to an amount not to exceed an amount
necessary to ensure the repayment of principal and interest due on any
outstanding indebtedness on special hospital projects bonds. Funds
deposited in such special debt service reserve fund or funds shall be
used in the event that an eligible secured hospital borrower fails to
make the required debt service payments on special hospital projects
bonds, including, if necessary, payments due as a result of the failure
to make principal and interest payments associated with the refinancing
of indebtedness attributable to unmet bad debt and charity care losses.
(b) The agency shall establish a secured hospital fund for the
purposes of paragraph (a) of this subdivision and for the support of
eligible borrowers, and shall pay into such fund: (i) all funds required
to be paid in accordance with the provisions of article twenty-eight of
the public health law and regulations promulgated thereunder; (ii) any
mortgage insurance premium assessed in an amount fixed at the discretion
of the agency, upon the issuance of special hospital project bonds;
(iii) any income or interest earned on other reserve funds which the
agency elects to transfer to the secured hospital fund; and (iv) any
other moneys which may be made available to the agency for the purposes
of such fund from any other source or sources. Moneys paid into the
secured hospital fund shall, in the discretion of the agency, but
subject to agreements with bondholders, be used to fund the special debt
service reserve fund or funds at a level or levels which minimize the
need for use of the capital reserve fund or funds in the event of the
failure of an eligible secured hospital borrower to make the required
debt service payments on special hospital project bonds.
(c) Notwithstanding the provisions of paragraphs (a) and (b) of this
subdivision, the state hereby expressly reserves the right to modify or
repeal the provisions of article twenty-eight of the public health law.
3. The agency shall establish a secured hospital capital reserve fund
or funds which shall be funded at an amount or amounts equal to the
lesser of either: (i) the maximum amount of principal, sinking fund
payments and interest due in any succeeding year on outstanding special
hospital project bonds or (ii) the maximum amount to insure that such
bonds will not be considered arbitrage bonds under the Internal Revenue
Code of 1986, as amended. The capital reserve fund shall be funded by
the sale of special hospital project bonds or from such other funds as
may be legally available for such purpose, as provided for in the bond
resolution or resolutions authorizing the issuance of such bonds.
4. (a) Notwithstanding the provisions of any general or special law to
the contrary, and subject to the making of annual appropriations
therefor by the legislature, in order to provide adequate health care to
persons of low income who otherwise would be unable to secure the same
and to assist the agency in the undertaking and financing of mortgage
loans to eligible secured hospital borrowers as defined in subdivision
six-b of section three of this act and in consideration of the
undertaking thereof and the benefits to be derived therefrom by the
people of the state, the director of the budget is authorized in any
state fiscal year to enter into one or more service contracts, none of
which shall exceed thirty years in duration, with the agency, upon such
terms as the director of the budget and the agency agree, so as to
provide annually to the agency in the aggregate such sum, if any, as
necessary to meet the debt service payments due on outstanding special
hospital project bonds in any year if the funds provided for in this
section are inadequate.
(b) Any service contract entered into pursuant to paragraph (a) of
this subdivision shall provide (i) that the obligation of the director
of the budget or of the state to fund or to pay the amounts therein
provided for shall not constitute a debt of the state within the meaning
of any constitutional or statutory provision and shall be deemed
executory only to the extent of moneys available and that no liability
shall be incurred by the state beyond the moneys available for the
purpose, and that such obligation is subject to annual appropriation by
the legislature; and (ii) that the amounts paid to the agency pursuant
to any such contract may be used by it solely to pay or to assist in
financing costs of mortgage loans to eligible secured hospital borrowers
as defined in subdivision six-b of section three of this act.
5. The agency shall not issue special hospital project bonds in an
aggregate principal amount exceeding one billion nine hundred
seventy-four million two hundred fifty thousand dollars, excluding
special hospital project bonds issued to refund outstanding special
hospital project bonds issued for such purposes; provided, however, that
upon any such refunding or repayment the total aggregate principal
amount of outstanding bonds, notes or other obligations may be greater
than one billion nine hundred seventy-four million two hundred fifty
thousand dollars only if the present value of the aggregate debt service
of the refunding or repayment bonds, notes or other obligations to be
issued shall not exceed the present value of the aggregate debt service
of the bonds, notes or other obligations so to be refunded or repaid.
For purposes hereof, the present values of the aggregate debt service of
the refunding or repayment bonds, notes or other obligations and of the
aggregate debt service of the bonds, notes or other obligations so
refunded or repaid, shall be calculated by utilizing the effective
interest rate of the refunding or repayment bonds, notes or other
obligations, which shall be that rate arrived at by doubling the
semi-annual interest rate (compounded semi-annually) necessary to
discount the debt service payments on the refunding or repayment bonds,
notes or other obligations from the payment dates thereof to the date of
issue of the refunding or repayment bonds, notes or other obligations
and to the price bid including estimated accrued interest or proceeds
received by the agency including estimated accrued interest from the
sale thereof.
* NB Expired December 31, 2015
§ 8. Health facilities reserve funds and appropriations. 1. (a) For
the purposes of the issuance by the agency of health facilities bonds,
the term "health facilities reserve fund requirement" shall mean, as of
any particular date of computation, an amount of money equal to the
greatest of the respective amounts, for the then current or any
succeeding calendar year, of annual debt service payments of the agency,
such annual debt service payments for any calendar year being an amount
of money equal to the aggregate of (i) all interest payable during such
calendar year on all health facilities bonds of the agency then
outstanding on said date of computation, plus (ii) the prinicipal amount
of all health facilities bonds of the agency then outstanding on said
date of computation which mature during such calendar year, plus (iii)
the amount of all sinking fund payments payable during such calendar
year with respect to all health facilities bonds of the agency
outstanding on said date of computation; and the term "sinking fund
payment" shall mean the amount of money specified in the resolution
authorizing term bonds as payable into a sinking fund for the
amortization of such term bonds. The agency may create and establish one
or more additional reserve funds to be known as health facilities
reserve funds and may pay into such reserve funds (1) any monies
appropriated and made available by the state for the purposes of such
funds, (2) any proceeds of sale of health facilities notes or health
facilities bonds, to the extent provided in the resolution of the agency
authorizing the issuance thereof, and (3) any other monies which may be
made available to the agency for the purposes of such funds from any
other source or sources. The monies held in or credited to any health
facilitiss reserve fund established under this subdivision, except as
hereinafter provided, shall be used solely for the payment of the
prinicipal of health facilities bonds of the agency secured by such
reserve fund, as the same mature, sinking fund payments, the purchase of
such health facilities bonds of the agency, and the payment of any
redemption premium required to be paid when such bonds are redeemed
prior to maturity; provided, however, that monies in any such fund shall
not be withdrawn therefrom at any time in such amount as would reduce
the amount of such fund to less than the health facilities reserve fund
requirement, except for the purpose of paying principal and interest on
the health facilities bonds of the agency secured by such reserve fund
maturing and becoming due and any sinking fund payments and for the
payment of which other monies of the agency are not available. Any
income or interest earned by, or increment to, any such health
facilities reserve fund due to the investment thereof may be transferred
to any other fund or account of the agency to the extent it does not
reduce the amount of such health facilities reserve fund below the
health facilities reserve fund requirement.
(b) The agency shall not issue health facilities bonds and health
facilities notes, municipal hospital bonds, municipal hospital notes,
municipal nursing home bonds and municipal nursing home notes in an
aggregate principal amount exceeding two billion dollars, excluding
health facilities bonds and health facilities notes issued to refund
outstanding health facilities bonds or health facilities notes. The
agency shall not issue health facilities bonds at any time secured by a
health facilities reserve fund if upon issuance, the amount in the
health facilities reserve fund will be less than the health facilities
reserve fund requirement, unless the agency, at the time of issuance of
such bonds, shall deposit in such reserve fund from the proceeds of the
bonds so to be issued, or otherwise, an amount which together with the
amount then in such reserve fund, will be not less than the health
facilities reserve fund requirement.
(c) In computing any health facilities reserve fund for the purposes
of this section, securities in which all or a portion of such reserve
fund shall be invested shall be valued at par if purchased at par, or if
purchased at other than par, at amortized value.
2. (a) The agency shall create and establish one or more special
accounts (herein referred to as health facilities income account) and
shall pay into such accounts any monies which the agency shall receive
in payment of rentals due under one or more leases or subleases entered
into with a municipality pursuant to section five and any other monies
which the agency shall receive from a municipality as security for or in
payment of such rentals. Such monies and any other monies paid into such
health facilities income accounts, may, in the discretion of the agency,
but subject to agreements with the holders of health facilities bonds
and health facilities notes, be used by the agency (1) for the repayment
of advances, if any, from the state to the agency in connection with
health facilities, and any real property required therefor, in
accordance with the provisions of repayment agreements related thereto
which have been entered into with the director of the budget, (2) to pay
all costs, expenses and charges of financing the health facil-
applicable to such account or accounts including fees and expenses of
trustees and paying agents, (3) to pay the administrative and other
expenses of the agency allocable to the services performed by the agency
in the financing of the construction, acquisition, reconstruction,
rehabilitation or improvement of health facilities and matters relating
thereto, (4) for the payment of the principal of and interest on health
facilities bonds or health facilities notes isued by the agency when the
same shall become due whether at maturity or by call for redemption and
for the payment of any redemption premium required to be paid where such
bonds or notes are redeemed prior to their stated maturities, and any
sinking fund payments, and to purchase health facilities bonds or health
facilities notes isued by the agency, or (5) for such other corporate
purposes of the agency relating to the carrying out of its functions,
powers and duties with respect to the financing of the construction,
acquisition, reconstruction, rehabilitation or improvement of health
facilities as the agency in its discretion shall determine and provide.
(b) To assure the continued payment of rentals due under one or more
leases or subleases entered into with a municipality pursuant to section
five, the agency shall make and deliver to the appropriate chief fiscal
officer of the municipality a certificate setting forth the amount, if
any, due and not paid to the agency under such lease or sublease with
such municipality within five days of the due date. In the event of the
failure or inability of the municipality to pay over the stated amount
to the agency within ten days of receipt of such certificate, the agency
shall forthwith make and deliver to the comptroller of the state of New
York, the director of the budget of the state of New York and the
commissioner of health of the state of New York a further certificate
restating the amount due and not paid, and such amount shall be paid
over to the agency, upon the warrant of the comptroller on vouchers
certified as correct by the commissioner of health, out of the next
payment of state aid to such municipality pursuant to section 368-a of
the social services law or funds appropriated for the purpose of making
payment on behalf of such municipality pursuant to section 367-b of such
law. To the extent any such payments to the agency are made from state
aid payments pursuant to section 368-a of such law, the amount of such
payments shall be deducted from the corresponding apportionment of state
aid otherwise credited to such municipality, and the state shall not be
obligated to pay, nor shall such municipality be entitled to receive, by
virtue of such deduction, any additional or increased apportionment or
payment of state aid pursuant to section 368-a of the social services
law. To the extent any such payments to the agency are made from funds
appropriated for the purpose of making payments on behalf of such
municipality pursuant to section 367-b of such law, the amount of such
payments may be deducted from any other payments of state assistance to
such municipality under the social services law and the state shall not
be obligated to pay, nor shall the municipality be entitled to receive,
by virtue of such deduction, any additional or increased apportionment
or payment of such state assistance, provided, however, that nothing
contained in this sentence shall be construed to limit, impair, impede,
or otherwise adversely affect in any manner the rights or remedies of
the purchasers and holders and owners of any bonds or notes of the state
or any agency or instrumentality, public benefit corporation or
political subdivision thereof under which such purchasers and holders
and owners have any right of payment of such bonds or notes by recourse
to such state assistance monies.
§ 9. Special provisions relating to the municipal health facilities
improvement program. Notwithstanding any other provisions of law,
general, special or local, or any provision of any charter or ordinance:
1. A municipality is hereby authorized to execute and deliver to the
agency for such consideration as may be determined by the municipality,
the agency and the health and mental hygiene facilities improvement
corporation, but not to exceed the cost of acquisition thereof to the
municipality and the cost of improvements thereon, a lease for a term
not exceeding fifty years or a quit claim deed conveying to the agency
all right, title and interest of such municipality in and to real
property, for the purpose of constructing, reconstructing,
rehabilitating, or improving one or more health facilities pursuant to
this act and the health and mental hygiene facilities improvement act
for subsequent lease or sublease to such municipality, in accordance
with the terms of any agreement entered into pursuant to this act and
the health and mental hygiene facilities improvement act.
2. A municipality is hereby authorized to lease or sublease from the
agency the health facilities acquired, constructed, reconstructed,
rehabilitated or improved pursuant to this act and the facilities
development corporation act in accordance with the terms of any
agreement entered into pursuant to this act and the facilities
development corporation act. At such time as all rentals due or to
become due to the agency pursuant to the terms of any such lease or
sublease have been paid or such lease or sublease is terminated pursuant
to the provisions thereof, the jurisdiction of the agency over the real
property leased or conveyed pursuant to this section, together with the
improvements thereon shall cease and all interest real and personal in
such real property and improvements vested in the agency shall vest in
the municipality with right of re-entry thereon.
3. No real property interest therein shall be acquired by the agency
pursuant to this section unless title thereto shall have been approved
by the attorney general.
4. The attorney general shall pass upon the form and sufficiency and
manner of execution of any deed of conveyance and of any lease or
sublease to which the agency and a municipality are parties, and the
same shall not be effecteive unless approved by him.
5. In the event that the agency shall fail within five years from the
date of a lease or conveyance authorized pursuant to this section to
construct, reconstruct, rehabilitate or improve the health facilities
thereon for which the lease or conveyance was made, as provided for in
any agreement entered into pursuant to this act and the health and
mental hygiene facilities improvement act, or in the event that such
health facilities shall cease to be used for the purposes intended, then
and in either event but subject to the terms of any lease, sublease or
other agreement between the agency and the municipality, such real
property and any health facilities thereon shall revert to the
municipality with right of re-entry thereupon and such lease or deed
shall be made subject to such conditions; provided, however, that as a
condition precedent to the exercise of such right of re-entry the
municipality shall pay to the agency an amount equal to the purchase
price of such real property, the depreciated cost of any health
facilities constructed, reconstructed, rehabilitated or improved, and
all other costs of the agency incident to the acquisition of such real
property and the financing of construction, reconstruction,
rehabilitation or improvement relating to such facilities, all as
provided in the aforesaid lease, sublease or other agreement entered
into with such municipality.
6. In the event that the agency shall determine that any portions of
the real property leased or conveyed pursuant to this section are in
excess of the real property needed to construct, reconstruct,
rehabilitate or improve the facility or facilities thereon for which the
conveyance was made, as provided in any agreement entered into pursuant
to this act and the health and mental hygiene facilities improvement
act, the agency may terminate its lease with respect to such excess
portions of such real property or reconvey such excess portions to the
municipality, provided, however, that the municipality shall pay to the
agency an amount equal to the consideration, if any, paid by the agency
to such municipality allocable to such excess real property and such
other costs of the the agency as are incident to the acquisition of such
excess real property, all as may be approved by such municipality and
the agency. Any monies so paid to the agency shall be used and applied,
subject to the provisions of any contract with noteholders and
bondholders, for the sole purpose of paying costs and expenses of the
agency incident to the financing of the health facilities, to be
constructed, reconstructed, rehabilitated or improved on such other
portions of the real property as shall have been leased or conveyed to
the agency pursuant to this section.
7. The cost of construction, acquisition, reconstruction,
rehabilitation or improvement of health facilities undertaken by the
agency pursuant to this act and the health and mental hygiene facilities
improvement act may include the cost of acquisition of any real property
leased or conveyed to the agency in accordance with this section and the
cost of the original furnishings, equipment, machinery and apparatus
needed to furnish and equip such facilities upon the completion of the
work. The agency shall have power to acquire or lease and to hold real
property required for the construction, acquisition, reconstruction,
rehabilitation or improvement of the health facilities undertaken by the
agency pursuant to this act and the health and mental hygiene facilities
improvement act and to provide the original furnishings, equipment,
machinery and apparatus needed to furnish and equip such facilities upon
the completion of work and to issue its bonds and notes to provide
sufficient funds to pay the cost thereof.
8. A municipality is hereby authorized and empowered, in connection
with any lease, sublease or other agreement with the agency to which
such municipality is a party, and subject to such agreements with third
parties as may then exist, to:
(a) pledge or assign to the agency all or any portion of the revenues
and monies received or to be received by the municipality, which may be
available for the purpose of paying rentals for the use of the health
facilities constructed, acquired, reconstructed, rehabilitated or
improved under such agreement, so that the payment of such rentals may
be fully secured and protected;
(b) use and dispose of such revenues and monies, or any portions
thereof, for the purpose of defraying, in whole or in part (1) the cost
of acquiring any real property for the purpose of constructing,
acquiring, reconstructing, rehabilitating or improving facilities
thereon which may be constructed, acquired, reconstructed, rehabilitated
or improved by the agency pursuant to this act and the health and mental
hygiene facilities improvement act, (2) the cost of financing the
construction, acquisition, reconstruction, rehabilitation or improvement
of such facilities, and (3) the cost of acquiring the original
furnishings, equipment, machinery and apparatus needed to furnish and
equip such facilities upon the completion of the work;
(c) set aside rental reserves and to agree to the maintenance,
regulation and disposition thereof;
(d) agree to limitations on the purposes to which the proceeds of sale
of health facilities notes or health facilities bonds may be applied and
to the pledging of such proceeds to secure the payment of health
facilities notes or health facilities bonds or of any issue thereof;
(e) agree to limitations on the making of additional leases, subleases
or agreements with the agency or with others, and the terms upon which
such additional leases, subleases or agreements may be made;
(f) upon receipt of any notice of assignment by the agency of any such
lease, sublease or other agreement with the agency, or of any of its
rights under such lease, sublease or other agreement, recognize and give
effect to such assignment and to pay the assignee thereof rentals or
other payments then due or which may become due under any such lease,
sublease or other agreement which has been so assigned by the agency;
and
(g) agree to any other matters, of like or different character, which
in any way affect the security or protection of the rental payments
required to be made under the terms of such lease, sublease or other
agreement with the agency.
9. A municipality is hereby authorized and empowered, to enter into a
lease, sublease, license or other operating agreement with any other
person, firm or corporation to operate or to sublease, license or
otherwise arrange for the operation of, the health facilities acquired,
constructed, reconstructed, rehabilitated or improved pursuant to this
act.
§ 9-a. Special provisions relating to mental health services
facilities improvement bonds and notes. 1. Definitions. For the purposes
of this act:
a. "Mental health services facility" shall mean a building, a unit
within a building, a laboratory, a classroom, a housing unit, a dining
hall, an activities center, a library, real property of any kind or
description, or any structure on or improvement to real property of any
kind or description, including fixtures and equipment which may or may
not be an integral part of any such building, unit, structure or
improvement, a walkway, a roadway or a parking lot, and improvements and
connections for water, sewer, gas, electrical, telephone, heating, air
conditioning and other utility services, or a combination of any of the
foregoing, whether for patient care and treatment or staff, staff family
or service use, located at or related to any psychiatric center, any
developmental center, or any state psychiatric or research institute or
other facility now or hereafter established under the state department
of mental hygiene. A mental health services facility shall also mean and
include a residential care center for adults, a "community mental health
and developmental disabilities facility", and a state or voluntary
operated treatment facility for use in the conduct of an alcoholism or
substance abuse treatment program as defined in the mental hygiene law,
unless such residential care center for adults, community mental health
and developmental disabilities facility or alcoholism or substance abuse
facility is expressly excepted or the context clearly requires
otherwise. The definition contained in this subdivision shall not be
construed to exclude therefrom a facility, whether or not owned or
leased by a voluntary agency, to be made available under lease, or
sublease, from the facilities development corporation to a voluntary
agency at the request of the commissioners of the offices and directors
of the divisions of the department of mental hygiene having jurisdiction
thereof for use in providing services in a residential care center for
adults, community mental health and developmental disabilities services,
or for use in the conduct of an alcoholism or substance abuse treatment
program. For purposes of this section mental health services facility
shall also mean mental hygiene facility as defined in subdivision ten of
section three of the facilities development corporation act.
b. "Mental health services facilities improvement bonds" and "mental
health services facilities improvement notes" shall mean bonds and
notes, respectively, issued by the agency pursuant to subdivision two of
this section.
c. "Mental health services facilities improvement program" shall mean
a program undertaken by the agency and the facilities development
corporation for the purpose of financing, refinancing, designing,
constructing, acquiring, reconstructing, rehabilitating or improving
mental hygiene facilities and mental health services facilities or
causing such facilities to be financed, refinanced, designed,
constructed, acquired, reconstructed, rehabilitated or improved.
2. Additional powers of the agency. a. The agency shall have power to
enter into one or more lease, sublease, loan or other financing
agreements with the directors of the facilities development corporation,
or any successor agency, for the purpose of providing the financing or
refinancing for or for designing, constructing, acquiring,
reconstructing, rehabilitating and improving mental health services
facilities at new or existing mental health services facilities, or on
any real property or interest in real property owned by or conveyed from
said corporation, or any successor agency, or any voluntary agency, or
for the refinancing of any such facilities for which bonds have
previously been issued by the agency or by the state housing finance
agency and are outstanding and to cause by the providing of such
financing such facilities to be designed, constructed, acquired,
reconstructed, rehabilitated or improved or financed or refinanced by
the directors of the said corporation, or any successor agency, all in
accordance with one or more lease, sublease, loan or other financing
agreements entered into between the agency and the directors of the said
corporation pursuant to subdivision 4 of section 9 of the facilities
development corporation act.
b. The agency shall have power and is hereby authorized from time to
time to issue negotiable bonds and notes in conformity with applicable
provisions of the uniform commercial code in such principal amount as,
in the opinion of the agency, shall be necessary, after taking into
account other moneys which may be available for the purpose, to provide
sufficient funds to the facilities development corporation, or any
successor agency, for the financing or refinancing of or for the design,
construction, acquisition, reconstruction, rehabilitation or improvement
of mental health services facilities pursuant to paragraph a of this
subdivision, the payment of interest on mental health services
improvement bonds and mental health services improvement notes issued
for such purposes, the establishment of reserves to secure such bonds
and notes, the cost or premium of bond insurance or the costs of any
financial mechanisms which may be used to reduce the debt service that
would be payable by the agency on its mental health services facilities
improvement bonds and notes and all other expenditures of the agency
incident to and necessary or convenient to providing the facilities
development corporation, or any successor agency, with funds for the
financing or refinancing of or for any such design, construction,
acquisition, reconstruction, rehabilitation or improvement and for the
refunding of mental hygiene improvement bonds issued pursuant to section
47-b of the private housing finance law; provided, however, that the
agency shall not issue mental health services facilities improvement
bonds and mental health services facilities improvement notes in an
aggregate principal amount exceeding twelve billion four hundred
eighteen million three hundred thirty-seven thousand dollars
$12,418,337,000, excluding mental health services facilities improvement
bonds and mental health services facilities improvement notes issued to
refund outstanding mental health services facilities improvement bonds
and mental health services facilities improvement notes; provided,
however, that upon any such refunding or repayment of mental health
services facilities improvement bonds and/or mental health services
facilities improvement notes the total aggregate principal amount of
outstanding mental health services facilities improvement bonds and
mental health facilities improvement notes may be greater than twelve
billion four hundred eighteen million three hundred thirty-seven
thousand dollars $12,418,337,000, only if, except as hereinafter
provided with respect to mental health services facilities bonds and
mental health services facilities notes issued to refund mental hygiene
improvement bonds authorized to be issued pursuant to the provisions of
section 47-b of the private housing finance law, the present value of
the aggregate debt service of the refunding or repayment bonds to be
issued shall not exceed the present value of the aggregate debt service
of the bonds to be refunded or repaid. For purposes hereof, the present
values of the aggregate debt service of the refunding or repayment
bonds, notes or other obligations and of the aggregate debt service of
the bonds, notes or other obligations so refunded or repaid, shall be
calculated by utilizing the effective interest rate of the refunding or
repayment bonds, notes or other obligations, which shall be that rate
arrived at by doubling the semi-annual interest rate (compounded
semi-annually) necessary to discount the debt service payments on the
refunding or repayment bonds, notes or other obligations from the
payment dates thereof to the date of issue of the refunding or repayment
bonds, notes or other obligations and to the price bid including
estimated accrued interest or proceeds received by the authority
including estimated accrued interest from the sale thereof. Such bonds,
other than bonds issued to refund outstanding bonds, shall be scheduled
to mature over a term not to exceed the average useful life, as
certified by the facilities development corporation, of the projects for
which the bonds are issued, and in any case shall not exceed thirty
years and the maximum maturity of notes or any renewals thereof shall
not exceed five years from the date of the original issue of such notes.
Notwithstanding the provisions of this section, the agency shall have
the power and is hereby authorized to issue mental health services
facilities improvement bonds and/or mental health services facilities
improvement notes to refund outstanding mental hygiene improvement bonds
authorized to be issued pursuant to the provisions of section 47-b of
the private housing finance law and the amount of bonds issued or
outstanding for such purposes shall not be included for purposes of
determining the amount of bonds issued pursuant to this section. The
director of the budget shall allocate the aggregate principal authorized
to be issued by the agency among the office of mental health, office for
people with developmental disabilities, and the office of addiction
services and supports, in consultation with their respective
commissioners to finance bondable appropriations previously approved by
the legislature.
3. Application of other provisions of article. Except as provided in
this section, the other provisions of this act shall apply to mental
health services facilities improvement bonds and mental health services
facilities improvement notes issued by the agency pursuant to this
section, provided, however, that such bonds and notes, subject to any
agreements with the holders of particular bonds or notes pledging any
specified portions thereof, shall be secured by a pledge thereof of (a)
payments made to the agency with respect to mental health services
facilities financed or refinanced with the proceeds of such bonds and
notes, and (b) any other assets, moneys or accounts pledged or assigned
to the agency as security for such payments. However, no resolution or
resolutions authorizing mental health services facilities improvement
bonds or mental health services facilities improvement notes shall (A)
pledge all or any part of the fees and charges made or received by the
agency pursuant to paragraphs (a) through (d) of subdivision three of
section six of this act in connection with the making of mortgage loans
or commitments therefor, or all or any part of the moneys received in
payment of such mortgage loans and interest thereon, (B) pledge all or
any part of the mortgages of the agency or obligations securing the
same, (C) provide as to the use and disposition of the gross income from
mortgages owned by the agency or as to the payment of the principal of
mortgages owned by the agency, (D) pledge all or any part of the rentals
paid to the agency under leases, subleases or other agreements for
health facilities entered into by the agency in accordance with this
article, or (E) pledge or assign all or any part of any other assets,
moneys or accounts pledged or assigned to the agency as security for the
payment of rentals for such health facilities.
4. Mental health services facilities fund. The agency shall create and
establish one or more special funds (herein referred to as mental health
services facilities funds) and shall pay into any such fund any moneys
which the agency shall receive in payment in accordance with one or more
agreements entered into pursuant to subdivision 4 of section 9 of the
facilities development corporation act and any other moneys which the
agency shall receive from the facilities development corporation
pursuant to such agreements. Such moneys and any other moneys paid into
the mental health services facilities fund may, in the discretion of the
agency, but subject to agreements with the holders of mental health
services facilities improvement bonds and mental health services
facilities improvement notes, be used by the agency (a) for the
repayment of advances, if any, from the state to the agency in
connection with mental health services facilities, and any real property
or interest in real property required therefor, in accordance with the
provisions of repayment agreements related thereto which have been
entered into with the director of the budget, (b) to pay all costs,
expenses and charges of financing and refinancing mental health services
facilities including fees and expenses of trustees and paying agents and
credit enhancement fees, (c) to pay the administrative and other
expenses of the agency allocable to the services performed by the agency
in the financing or refinancing of or the design, construction,
acquisition, reconstruction, rehabilitation or improvement of mental
health services facilities and matters relating thereto, (d) for the
payment of the principal of and interest on mental health services
facilities improvement bonds or mental health services facilities
improvement notes issued by the agency when the same shall become due
whether at maturity or by call for redemption and for the payment of any
redemption premium required to be paid where such bonds or notes are
redeemed prior to their stated maturities, and to purchase mental health
services facilities improvement bonds or mental health services
facilities improvement notes issued by the agency, or (e) for such other
corporate purposes of the agency relating to the carrying out of its
functions, powers and duties with respect to the financing or
refinancing of the design, construction, acquisition, reconstruction,
rehabilitation or improvement of mental health services facilities as
the agency in its discretion shall determine and provide.
5. The agency may create and establish one or more special funds to be
known as mental health services facilities improvement capital reserve
funds and may pay into such reserve funds (a) any moneys appropriated
and made available by the state for the purposes of such funds, (b) any
proceeds of the sale of mental health services facilities improvement
notes or bonds, to the extent provided in the resolution of the agency
authorizing the issuance thereof, and (c) any other moneys which may be
made available to the agency for the purposes of such funds from any
other source or sources. The amount in each such capital reserve fund
shall be determined by resolution of the agency provided, however, that
such capital reserve fund shall not exceed the maximum amount of
payments becoming due in any succeeding calendar year.
The moneys held in or credited to the capital reserve funds
established under this subdivision except as hereinafter provided, shall
be used solely to the extent any payments as they become due pursuant to
one or more agreements referred to in subdivision two of this section
are not made or provided for by the facilities development corporation,
provided, however, that the moneys in such funds shall, subject to
agreement with the bondholders, not be withdrawn therefrom at any time
in such amount as would reduce the amount thereof to less than the
amount determined by resolution of the agency except for the purpose of
making such payments becoming due under the agreements with the
facilities development corporation and for which other moneys are not
available.
Any income or interest earned by, or increment to, any such mental
health services improvement facilities capital reserve fund due to the
investment thereof may be transferred to the mental health services
facilities fund to the extent it does not reduce the amount of such
mental health services capital reserve fund below the reserve
requirement determined by resolution of the agency.
6. Notwithstanding any other provision of law, general or special:
a. Any public corporation or officer responsible for the acquisition
of real property or any interest in real property or the planning,
supervision or administration of facilities thereon which may be
designed, constructed, acquired, reconstructed, rehabilitated or
improved by the agency pursuant to this act is hereby authorized for and
on behalf and in the name of the people of the state of New York, to
execute and deliver to the agency, for such consideration, if any, as
may be determined by such public corporation or officer and the agency,
but not to exceed the cost of acquisition thereof and the cost of
improvement thereon, a lease for a term not exceeding thirty years or a
quitclaim deed conveying to the agency the title to or any interest in
real property and to any real property or interest in real property of
the people of the state of New York acquired by such public corporation
or officer for such facilities, and in and to any of the improvements
thereon, for the purpose of designing, constructing, reconstructing,
rehabilitating or improving thereon one or more facilities pursuant to
this act for lease or sublease to any such public corporation or
officer, in accordance with the terms of an agreement entered into among
them in accordance with law. The agency is hereby authorized to accept
any such lease or conveyance from such public corporation or officer or
from any voluntary agency, to lease or sublease such real property, any
interest in real property, improvements and facilities to such public
corporation or officer, and to hold the same subject to the terms of any
such lease, conveyance, sublease or other agreement, and such public
corporation or officer is hereby authorized, with the approval of the
director of the budget, to lease or sublease any such real property,
interests in real property, or improvements of the facilities designed,
constructed, reconstructed, rehabilitated or improved thereon pursuant
to this act or other provisions of law, and to hold such real property,
any interests in real property, improvements and facilities subject to
the terms of any such lease, sublease or other agreement.
b. (i) In the event that the agency shall fail, within five years from
the date of a lease or conveyance authorized pursuant to subdivision 1
of this section, to construct, reconstruct, rehabilitate or improve the
facility or facilities thereon for which the conveyance was made, as
provided for in a lease, sublease, loan or other financing agreement
entered into with such public corporation or officer, or in the event
that such facility or facilities shall cease to be used for the purposes
intended, then and in either event but subject to the terms of any
lease, sublease, loan or other financing agreement undertaken by the
agency, such real property, interests in real property, and the
improvements and facilities thereon, shall revert to the people of the
state of New York with right of re-entry thereupon, and such lease or
deed shall be made subject to such conditions. Provided, however, that
as a condition precedent to the exercise of such right of re-entry the
agency shall be paid an amount equal to the purchase price of such real
property, any interest in real property, and improvements, the
depreciated cost of any facility or facilities constructed,
reconstructed, rehabilitated or improved thereon, and all other costs of
the agency incident to the acquisition of such real property, interest
in real property, and the financing of construction, reconstruction,
rehabilitation or improvement relating to such facility or facilities,
all as provided in the aforesaid lease, sublease, loan or other
financing agreement entered into with such public corporation or
officer. It is further provided that for the Corona Unit of the Bernard
M. Fineson developmental disabilities services office, the agency may be
paid an amount less than or equal to the purchase price of the real
property, any interest in real property, and improvements, the
depreciated cost of the facility constructed, reconstructed,
rehabilitated, demolished or improved thereon, and all other costs of
the agency incident to the acquisition of the real property, interest in
real property and the financing of construction, reconstruction,
rehabilitation, demolition or improvement relating to the facility, all
as provided in the aforesaid lease, sublease, loan or other financing
agreement entered into with such public corporation or officer.
(ii) In the event that the agency shall determine that any portions of
the real property or interest in real property leased or conveyed
pursuant to subdivision 1 of this section are in excess of the real
property or interest in real property needed to construct, reconstruct,
rehabilitate or improve the facility or facilities thereon for which the
conveyance was made, as provided in a lease, sublease, loan or other
financing agreement entered into with such public corporation or officer
or any voluntary agency, the agency may terminate its lease with respect
to such excess portions of such real property or interest in real
property or reconvey such excess portions to the people of the state of
New York or to such voluntary agency. Provided, however, that the state
of New York or such public corporation or officer or such voluntary
agency shall pay to the agency an amount equal to the consideration, if
any, paid by the agency to such public corporation or officer or such
voluntary agency allocable to such excess real property or interest in
real property and such other costs of the agency as are incident to the
acquisition of such excess real property or interest in real property,
all as may be approved by such public corporation or officer or such
voluntary agency and the agency. Any monies so paid to the agency shall
be used and applied, subject to the provision of any contract with
noteholders and bondholders, for the sole purpose of paying costs and
expenses of the agency incident to the financing of the facility or
facilities to be designed, constructed, reconstructed, rehabilitated or
improved on such other portions of the real property or interest in real
property as shall have been leased or conveyed to the agency pursuant to
subdivision 1 of this section. It is further provided that for the
Corona unit of the Bernard M. Fineson developmental disabilities
services office, the state of New York or such public corporation or
officer or such voluntary agency may but is not required to pay to the
agency an amount less than or equal to the consideration, if any, paid
by the agency to such public corporation or officer or such voluntary
agency allocable to such excess real property or interest in real
property and such other costs of the agency as are incident to the
acquisition of such excess real property or interest in real property,
all as may be approved by such public corporation or officer or such
voluntary agency and the agency. Any monies so paid to the agency shall
be used and applied, subject to the provision of any contract with
noteholders and bondholders, for the sole purpose of paying costs and
expenses of the agency incident to the financing of the Corona unit of
the Bernard M. Fineson developmental disabilities services office to be
designed, constructed, reconstructed, rehabilitated, demolished or
improved on such other portions of the real property or interest in real
property as shall have been leased or conveyed to the agency pursuant to
subdivision 1 of this section.
c. The attorney general shall pass upon the form, sufficiency and
manner of execution of any deed of conveyance and of any lease or
sublease of lands and of any loan or other financing agreement
authorized to be given under subdivision one of this section, excluding
any lease or sublease given by a voluntary agency to the agency, and the
same shall not be effective unless so approved by him.
d. The cost of design, construction, acquisition, reconstruction,
rehabilitation or improvement of facilities undertaken by the agency
pursuant to this act may include the cost of acquisition of any real
property, interest in real property and improvements leased or conveyed
to the agency in accordance with subdivision 1 of this section and the
cost of the original furnishings, equipment, machinery and apparatus
determined by the responsible public corporation or officer to be needed
to furnish and equip such facilities upon the completion of work. The
agency shall have power to acquire or lease and to hold real property,
any interest in real property and improvements required for the design,
construction, acquisition, reconstruction, rehabilitation or improvement
of facilities undertaken by the agency pursuant to this act and to
provide the original furnishings, equipment, machinery and apparatus
determined by the responsible public corporation or officer to be needed
to furnish and equip such facilities upon the completion of work and to
issue its bonds and notes to provide sufficient funds to pay or
refinance the cost thereof.
e. Any public corporation or officer referred to in paragraph a of
this subdivision is hereby authorized and empowered, in connection with
any lease, sublease, loan or other financing agreement with the agency
to which such public corporation or officer is a party, and subject to
such agreements with third parties as may then exist, to:
(i) pledge or assign to the agency all or any portion of the revenues
and monies received or to be received by such public corporation or
officer, which may be available for the purpose of making payments for
the use of the facilities constructed, acquired, reconstructed,
rehabilitated or improved or to be constructed, acquired, reconstructed,
rehabilitated or improved under such agreement, so that such payments
may be fully secured and protected; provided, however, that such pledge
or assignment shall not extend to appropriations or advances from the
state except appropriations or advances made specifically for the
purpose of paying all or any part of such payments;
(ii) use and dispose of such revenues and monies, or any portions
thereof, for the purpose of defraying, in whole or in part, (1) the cost
of acquiring any real property or interest in real property for the
purpose of constructing, acquiring, reconstructing, rehabilitating or
improving facilities thereon which may be constructed, acquired,
reconstructed, rehabilitated or improved by the agency pursuant to this
act, (2) the cost of financing the construction, acquisition,
reconstruction, rehabilitation or improvement of such facilities, and
(3) the cost of acquiring the original furnishings, equipment, machinery
and apparatus needed to furnish and equip such facilities upon the
completion of work;
(iii) set aside reserves and to agree to the maintenance, regulation
and disposition thereof;
(iv) agree to limitations on the purposes to which the proceeds of
sale of agency notes or bonds may be applied and to the pledging of such
proceeds to secure the payment of agency notes or bonds or of any issue
thereof;
(v) agree to limitations on the making of additional leases,
subleases, loans or other financing agreements with the agency or with
others, and the terms upon which such additional leases, subleases,
loans or other financing agreements may be made;
(vi) recognize and give effect to such assignment, upon receipt of any
notice of assignment by the agency of any such lease, sublease, loan or
other financing agreement with the agency, or of any of its rights under
such lease, sublease, loan or other financing agreement, and to pay the
assignee thereof payments then due or which may become due under any
such lease, sublease, loan or other financing agreement which has been
so assigned by the agency; and
(vii) agree to any other matters, of like or different character,
which in any way affect the security or protection of the payments
required to be made under the terms of such lease, sublease, loan or
other financing agreement with the agency.
f. (i) Any mental hygiene facility, as defined in this section, which
has been constructed, acquired, reconstructed, rehabilitated or
improved, in whole or in part, out of monies advanced or deemed to have
been advanced to the facilities development corporation, the state
department of mental hygiene or the office of general services, since
April 1, 1963 pursuant to appropriations or reappropriations as advances
from the capital projects fund, and the real property or any interest in
real property upon which such a facility is located, may be leased or
conveyed to the agency by the facilities development corporation or the
commissioner of mental hygiene in accordance with the provisions of
subdivisions 1 through 5 of this section, notwithstanding that the
construction, acquisition, reconstruction, rehabilitation or improvement
of such facility may have been completed by the facilities development
corporation, the state department of mental hygiene or the office of
general services.
(ii) Subject to such agreements with third parties as may then exist,
the facilities development corporation is hereby authorized and
empowered to enter into leases, subleases, loans and other financing
agreements with the agency with respect to any mental hygiene facility
described in subparagraph (i) of this paragraph, and the real property
or any interest in real property upon which such a facility is or may be
located, in accordance with the provisions of subdivision 4 of section 9
of the facilities development corporation act and the provisions of
subdivisions 1 through 5 of this section; and the agency is hereby
authorized and empowered to accept any lease or conveyance of any such
mental hygiene facility, and the real property or any interest in real
property upon which such a facility is or may be located, to acquire,
construct, reconstruct, rehabilitate or improve any such facility, and
to issue bonds and notes to provide sufficient funds therefor in
accordance with the provisions of this section.
7. a. The agency shall have the power to acquire by lease or deed from
the facilities development corporation any real property acquired by the
corporation pursuant to the provisions of subdivision six of section
nine of the facilities development corporation act (i) for the purpose
of constructing, reconstructing, rehabilitating or improving thereon one
or more community mental health and retardation facilities or (ii) for
the purpose of financing or refinancing the acquisition, construction,
reconstruction, rehabilitation or improvement thereon of one or more
community mental health and retardation facilities, pursuant to the
provisions of this act and the facilities development corporation act.
The agency is hereby authorized to lease or sublease such real property
and facilities thereon to the corporation for the purpose of making the
same available to a city or a county not wholly within a city, for use
and occupancy in accordance with the provisions of a lease, sublease or
other agreement between the corporation and such city or county.
b. In the event that the agency shall fail, within five years after
the date of a lease or conveyance of such real property from property
from such city or county to the corporation, to construct, reconstruct,
rehabilitate or improve the community mental health and retardation
facility or facility thereon for which such lease or conveyance was
made, as provided for in a lease, sublease or other financing agreement
entered into by such city or county and the corporation, then, subject
to the terms of any lease, sublease or other financing agreement
undertaken by the agency, such real property and any facilities thereon
shall revert to the corporation with right of re-entry thereupon, and
such lease or deed shall be made subject to such condition of reverter
and re-entry. Provided, however, that as a condition precedent to the
exercise of such right of re-entry the corporation shall pay to the
agency an amount equal to the sum of the purchase price of such real
property, the depreciated cost of any community mental health and
retardation facility or facilities constructed, reconstructed,
rehabilitated or improved thereon and all other costs of the agency
incident to the acquisition of such lands and the financing of
construction, reconstruction, rehabilitation or improvement relating to
such community mental health and retardation facility or facilities, all
as provided in the aforesaid lease, sublease or other financing
agreement entered into with the corporation. It is further provided that
for the Corona unit of the Bernard M. Fineson developmental disabilities
services office, the corporation may but is not required to pay to the
agency an amount less than or equal to the purchase price of the real
property, the depreciated cost of sum of the community mental health and
retardation facility constructed, reconstructed, rehabilitated,
demolished or improved thereon and all other costs of the agency
incident to the acquisition of such lands and the financing of
construction, reconstruction, rehabilitation, demolition or improvement
relating to such community mental health and retardation facility, all
as provided in the aforesaid lease, sublease or other financing
agreement entered into with the corporation.
c. No real property or interest therein shall be acquired by the
agency pursuant to this subdivision unless the title thereto shall be
approved by the attorney general.
d. The attorney general shall pass upon the form and sufficiency and
manner of execution of any deed of conveyance and of any lease or
sublease of real property authorized to be acquired by the agency
pursuant to this subdivision and the same shall not be effective unless
such deed, lease or sublease shall be so approved by him.
§ 10. Bonds and notes as legal investments. The bonds and notes of the
agency are hereby made securities in which all public officers and
bodies of this state and all municipalities and municipal subdivisions,
all insurance companies and associations, and other persons carrying on
an insurance business, all banks, bankers, trust companies, savings
banks and saving associations, including savings and loan associations,
building and loan associations, investment companies and other persons
carrying on a banking business, all administrators, guardians,
executors, trustees and other fiduciaries, and all other persons
whatsoever who are now or may hereafter be authorized to invest in bonds
or other obligations of the state, may properly and legally invest
funds, including capital, in their control and belonging to them.
§ 11. Exemption from taxation of property and income. The property of
the agency and its income and operations shall be exempt from taxation.
§ 12. Exemption from taxation of notes and bonds. It is hereby
determined that the creation of the agency is in all respects for the
benefit of the people of the state and for the improvement of their
health, safety, welfare, comfort and security, and that said purposes
are public purposes and that the agency will be performing an essential
governmental function in the exercise of the powers conferred upon it by
this act. The state covenants with the purchasers and all subsequent
holders and transferees of notes and bonds issued by the agency, in
consideration of the acceptance of and payment for the notes and bonds,
that the notes and bonds of the agency, issued pursuant to this act and
the income therefrom and all its fees, charges, gifts, grants, revenues,
receipts, and other monies received or to be received, pledged to pay or
secure the payment of such notes or bonds shall at all times be free
from taxation, except for estate and gift taxes and taxes on transfers.
§ 13. Agreement with the state. The state does hereby pledge to and
agree with the holders of any notes or bonds issued under this act, that
the state will not limit or alter the rights hereby vested in the agency
to fulfill the terms of any agreements made with the holders thereof, or
in any way impair the rights and remedies of such holders until such
notes or bonds, together with the interest thereon, with interest on any
unpaid installments of interest, and all costs and expenses in
connection with any action or proceeding by or on behalf of such
holders, are fully met and discharged. The agency is authorized to
include this pledge and agreement of the state in any agreement with the
holders of such notes or bonds.
§ 14. State's right to require redemption of bonds. Notwithstanding
and in addition to any provisions for the redemption of bonds which may
be contained in any contract with the holders of the bonds, the state
may, upon furnishing sufficient funds therefor, require the agency to
redeem, prior to maturity, as a whole, any issue of bonds on any
interest payment date not less than twenty years after the date of the
bonds of such issue at one hundred five per centum of their face value
and accrued interest or at such lower redemption price as may be
provided in the bonds in case of the redemption thereof as a whole on
the redemption date. Notice of such redemption shall be published in at
least two newspapers publishing and circulating respectively in the
cities of Albany and New York at least twice, the first publication to
be at least thirty days before the date of redemption.
§ 15. Remedies of noteholders and bondholders. 1. In the event that
the agency shall default in the payment of principal of or interest on
any issue of notes or bonds after the same shall become due, whether at
maturity or upon call for redemption, and such default shall continue
for a period of thirty days, or in the event that the agency shall fail
or refuse to comply with the provisions of this act, or shall default in
any agreement made with the holders of any issue of notes or bonds, the
holders of twenty-five per centum in aggregate principal amount of the
notes or bonds of such issue then outstanding, by instrument or
instruments filed in the office of the clerk of the county of Albany and
approved or acknowledged in the same manner as a deed to be recorded,
may appoint a trustee to represent the holders of such notes or bonds
for the purposes herein provided.
2. Such trustee may, and upon written request of the holders of
twenty-five per centum in principal amount of such notes or bonds then
outstanding shall, in his or its own name:
(a) by suit, action or proceeding in accordance with the civil
practice law and rules, enforce all rights of the noteholders or
bondholders, including the right to require the agency to collect fees
and charges and interest and amortization payments on mortgage and
project loans made by it adequate to carry out any agreement as to, or
pledge of, such fees and charges and interest and amortization payments
on such mortgages, project loans and other properties and to require the
agency to carry out any other agreements with the holders of such notes
or bonds and to perform its duties under this act;
(b) bring suit upon such notes or bonds;
(c) by action or suit, require the agency to account as if it were the
trustee of an express trust for the holders of such notes or bonds;
(d) by action or suit, enjoin any acts or things which may be unlawful
or in violation of the rights of the holders of such notes or bonds;
(e) declare all such notes or bonds due and payable, and if all
defaults shall be made good, then, with the consent of the holders of
twenty-five per centum of the principal amount of such notes or bonds
then outstanding, to annul such declaration and its consequences.
3. Such trustee shall in addition to the foregoing have and possess
all of the powers necessary or appropriate for the exercise of any
functions specifically set forth herein or incident to the general
representation of bondholders or noteholders in the enforcement and
protection of their rights.
4. The supreme court shall have jurisdiction of any suit, action or
proceeding by the trustee on behalf of such noteholders or bondholders.
The venue of any such suit, action or proceeding shall be laid in the
county of Albany.
5. Before declaring due and payable the principal of notes or bonds
issued in connection with any mortgage or other obligations securing a
mortgage loan made by the agency, the trustee shall first give thirty
days' notice in writing to the governor, to the agency, to the state
commissioner of health and to the attorney general of the state.
§ 16-a. Equal employment opportunity program. 1. All contracts for
design, construction, services and materials pursuant to this act of
whatever nature and all documents soliciting bids or proposals therefor
shall contain or make reference to the following provisions:
a. The contractor will not discriminate against employees or
applicants for employment because of race, creed, color, national
origin, sex, age, disability, or marital status, and will undertake or
continue existing programs of affirmative action to ensure that minority
group persons and women are afforded equal opportunity without
discrimination. Such programs shall include, but not be limited to,
recruitment, employment, job assignment, promotion, upgrading, demotion,
transfer, layoff, termination, rates of pay or other forms of
compensation, and selections for training or retraining, including
apprenticeship and on-the-job training.
b. At the request of the agency, the contractor shall request each
employment agency, labor union, or authorized representative of workers
with which it has a collective bargaining or other agreement or
understanding and which is involved in the performance of the contract
with the agency to furnish a written statement that such employment
agency, labor union or representative shall not discriminate because of
race, creed, color, national origin, sex, age, disability or marital
status and that such union or representative will cooperate in the
implementation of the contractor's obligations hereunder.
c. The contractor will state, in all solicitations or advertisements
for employees placed by or on behalf of the contractor in the
performance of the contract with the agency, that all qualified
applicants will be afforded equal employment opportunity without
discrimination because of race, creed, color, national origin, sex, age,
disability or marital status.
d. The contractor will include the provisions of paragraphs a through
c of this subdivision in every subcontract or purchase order in such a
manner that such provisions will be binding upon each subcontractor or
vendor as to its work in connection with the contract with the agency.
2. The agency shall establish procedures and guidelines to ensure that
contractors and subcontractors undertake programs of affirmative action
and equal employment opportunity as required by this section. Such
procedures may require after notice in a bid solicitation, the
submission of an affirmative action program prior to the award of any
contract, or at any time thereafter, and may require the submission of
compliance reports relating to the operation and implementation of any
affirmative action program adopted hereunder. The agency may take
appropriate action including contractual sanctions for non-compliance to
effectuate the provisions of this section and shall be responsible for
monitoring compliance with this act.
§ 16-b. Minority and women-owned business enterprise program. 1. a. In
the performance of projects pursuant to this act minority and
women-owned business enterprises shall be given the opportunity for
meaningful participation. The agency shall establish measures and
procedures to secure meaningful participation and identify those
contracts and items of work for which minority and women-owned business
enterprises may best bid to actively and affirmatively promote and
assist their participation in the projects, so as to facilitate the
award of a fair share of contracts to such enterprises; provided,
however, that nothing in this act shall be construed to limit the
ability of the agency to assure that qualified minority and women-owned
business enterprises may participate in the program. For purposes
hereof, minority business enterprise shall mean any business enterprise
which is at least fifty-one per centum owned by, or in the case of a
publicly owned business, at least fifty-one per centum of the stock of
which is owned by citizens or permanent resident noncitizens who are
Black, Hispanic, Asian or American Indian, Pacific Islander or Alaskan
natives and such ownership interest is real, substantial and continuing
and have the authority to independently control the day to day business
decisions of the entity for at least one year; and women-owned business
enterprise shall mean any business enterprise which is at least
fifty-one per centum owned by, or in the case of a publicly owned
business, at least fifty-one per centum of the stock of which is owned
by citizens or permanent resident noncitizens who are women, and such
ownership interest is real, substantial and continuing and have the
authority to independently control the day to day business decisions of
the entity for at least one year.
The provisions of this paragraph shall not be construed to limit the
ability of any minority or women-owned business enterprise to bid on any
contract.
b. In the implementation of this section, the agency shall consider
compliance by any contractor with the requirements of any federal,
state, or local law concerning minority and women-owned business
enterprises, which may effectuate the requirements of this section. If
the department or the office determines that by virtue of the imposition
of the requirements of any such law, in respect to contracts, the
provisions thereof duplicate or conflict with this act, the agency may
waive the applicability of this section to the extent of such
duplication or conflict.
c. Nothing in this section shall be deemed to require that overall
state and federal requirements for participation of minority and
women-owned business enterprises in programs authorized under this act
be applied without regard to local circumstances to all projects or in
all communities.
2. In order to implement the requirements and objectives of this
section, the agency shall establish procedures to monitor the
contractors' compliance with provisions hereof, provide assistance in
obtaining competing qualified minority and women-owned business
enterprises to perform contracts proposed to be awarded, and take other
appropriate measures to improve the access of minority and women-owned
business enterprises to these contracts.
§ 17. Assistance by state officers, departments, boards and
commissions. 1. The department of audit and control, department of law,
department of health, and all other state officers, departments, boards,
divisions and commissions may render such services to the agency within
their respective functions as may be requested by the agency.
2. The state commissioner of health and the state department of health
are hereby designated to act for and in behalf of the agency in
servicing the mortgage loans of the agency, and shall perform such
functions and services in connection with the making, servicing and
collection of such loans as shall be requested by the agency. The agency
shall pay to the department of health from any monies of the agency
available for such purpose, such amounts as are necessary to reimburse
the department of health for the reasonable cost of the services
performed by the commissioner of health and department of health
pursuant to this section.
§ 18. Annual report. The agency shall submit to the governor, the
chairman of the senate finance committee, the chairman of the assembly
ways and means committee, the comptroller and the director of the budget
within one hundred eighty days after the end of its fiscal year, a
complete and detailed report setting forth: (1) its operations and
accomplishments; (2) its receipts and expenditures during such fiscal
year in accordance with the categories or classifications established by
the agency for its operating and capital outlay purposes, including a
listing of all private consultants engaged by the agency on a contract
basis and a statement of the total amount paid to each such private
consultant; (3) its assets and liabilities at the end of its fiscal
year, including a schedule of its mortgage loans and commitments and the
status of reserve, special or other funds; and (4) a schedule of its
bonds and notes outstanding at the end of its fiscal year, together with
a statement of the amounts redeemed and incurred during such fiscal
year.
§ 19. Bond reserve insurance fund. The agency shall create and
establish a special fund, to be known as the bond reserve insurance fund
and shall pay into such fund all monies appropriated and made available
by the state for the purposes of such fund and any other monies which
may be made available to the agency for the purposes of such fund from
any other source or sources. All monies held in the bond reserve
insurance fund shall be used by the agency to meet the agency's
obligation to repay principal and interest on its outstanding bonds
solely to the extent that all other revenues of the agency available for
such purpose are not sufficient to meet such obligations of the agency.
Any income or interest earned by, or increment to the bond reserve
insurance fund may be used for authorized purposes including, but not
limited to, the addition of such income or interest earned, or increment
to the monies held in such fund for the purposes herein provided, or the
repayment of appropriation expenditures made to the credit of such fund.
§ 20. Actions against agency. Except in an action for wrongful death,
an action against the agency founded on tort shall not be commenced more
than one year and ninety days after the cause of action therefor shall
have accrued, nor unless a notice of claim shall have been served on the
agency within the time limited by, and in compliance with all the
requirements of section fifty-e of the general municipal law. An action
against the agency for wrongful death shall be commenced in accordance
with the notice of claim and time limitation provisions of title eleven
of article nine of the public authorities law.
§ 21. Act not affected if in part unconstitutional. If any section,
subdivision, paragraph, sentence, clause or provision of this act shall
be unconstitutional or be ineffective in whole or in part, to the extent
that it is not unconstitutional or ineffective, it shall be valid and
effective and no other section, subdivision, paragraph, sentence, clause
or provision shall on account thereof be deemed invalid or ineffective.
§ 22. Inconsistent provisions in other laws superseded. Insofar as the
provisions of this act are inconsistent with the provisions of any other
law, general, special or local, the provisions of this act shall be
controlling.