N.Y. MCF Law § 7-A — New York Code / Act MCF / Section 7-A
Secured hospital projects reserve funds and appropriations
Status: in_force

* § 7-a. Secured hospital projects reserve funds and appropriations.\n1.  Special hospital project bonds issued to finance the projects of\neligible secured hospital borrowers shall be secured by (i) a first\nmortgage lien on such property as specified in accordance with\nsubdivision twelve of section three of this act, (ii) funds and accounts\nestablished under the bond resolution, (iii) the secured hospital\nspecial debt service reserve fund or funds, (iv) the secured hospital\ncapital reserve fund or funds, and (v) such service contract or\ncontracts entered into in accordance with the provisions of subdivision\nfour of this section.\n  2. (a) The agency shall establish a secured hospital special debt\nservice reserve fund or funds and pay into such fund or funds moneys\nfrom the secured hospital fund up to an amount not to exceed an amount\nnecessary to ensure the repayment of principal and interest due on any\noutstanding indebtedness on special hospital projects bonds. Funds\ndeposited in such special debt service reserve fund or funds shall be\nused in the event that an eligible secured hospital borrower fails to\nmake the required debt service payments on special hospital projects\nbonds, including, if necessary, payments due as a result of the failure\nto make principal and interest payments associated with the refinancing\nof indebtedness attributable to unmet bad debt and charity care losses.\n  (b) The agency shall establish a secured hospital fund for the\npurposes of paragraph (a) of this subdivision and for the support of\neligible borrowers, and shall pay into such fund: (i) all funds required\nto be paid in accordance with the provisions of article twenty-eight of\nthe public health law and regulations promulgated thereunder; (ii) any\nmortgage insurance premium assessed in an amount fixed at the discretion\nof the agency, upon the issuance of special hospital project bonds;\n(iii) any income or interest earned on other reserve funds which the\nagency elects to transfer to the secured hospital fund; and (iv) any\nother moneys which may be made available to the agency for the purposes\nof such fund from any other source or sources. Moneys paid into the\nsecured hospital fund shall, in the discretion of the agency, but\nsubject to agreements with bondholders, be used to fund the special debt\nservice reserve fund or funds at a level or levels which minimize the\nneed for use of the capital reserve fund or funds in the event of the\nfailure of an eligible secured hospital borrower to make the required\ndebt service payments on special hospital project bonds.\n  (c) Notwithstanding the provisions of paragraphs (a) and (b) of this\nsubdivision, the state hereby expressly reserves the right to modify or\nrepeal the provisions of article twenty-eight of the public health law.\n  3. The agency shall establish a secured hospital capital reserve fund\nor funds which shall be funded at an amount or amounts equal to the\nlesser of either: (i) the maximum amount of principal, sinking fund\npayments and interest due in any succeeding year on outstanding special\nhospital project bonds or (ii) the maximum amount to insure that such\nbonds will not be considered arbitrage bonds under the Internal Revenue\nCode of 1986, as amended. The capital reserve fund shall be funded by\nthe sale of special hospital project bonds or from such other funds as\nmay be legally available for such purpose, as provided for in the bond\nresolution or resolutions authorizing the issuance of such bonds.\n  4. (a) Notwithstanding the provisions of any general or special law to\nthe contrary, and subject to the making of annual appropriations\ntherefor by the legislature, in order to provide adequate health care to\npersons of low income who otherwise would be unable to secure the same\nand to assist the agency in the undertaking and financing of mortgage\nloans to eligible secured hospital borrowers as defined in subdivision\nsix-b of section three of this act and in consideration of the\nundertaking thereof and the benefits to be derived therefrom by the\npeople of the state, the director of the budget is authorized in any\nstate fiscal year to enter into one or more service contracts, none of\nwhich shall exceed thirty years in duration, with the agency, upon such\nterms as the director of the budget and the agency agree, so as to\nprovide annually to the agency in the aggregate such sum, if any, as\nnecessary to meet the debt service payments due on outstanding special\nhospital project bonds in any year if the funds provided for in this\nsection are inadequate.\n  (b) Any service contract entered into pursuant to paragraph (a) of\nthis subdivision shall provide (i) that the obligation of the director\nof the budget or of the state to fund or to pay the amounts therein\nprovided for shall not constitute a debt of the state within the meaning\nof any constitutional or statutory provision and shall be deemed\nexecutory only to the extent of moneys available and that no liability\nshall be incurred by the state beyond the moneys available for the\npurpose, and that such obligation is subject to annual appropriation by\nthe legislature; and (ii) that the amounts paid to the agency pursuant\nto any such contract may be used by it solely to pay or to assist in\nfinancing costs of mortgage loans to eligible secured hospital borrowers\nas defined in subdivision six-b of section three of this act.\n  5. The agency shall not issue special hospital project bonds in an\naggregate principal amount exceeding one billion nine hundred\nseventy-four million two hundred fifty thousand dollars, excluding\nspecial hospital project bonds issued to refund outstanding special\nhospital project bonds issued for such purposes; provided, however, that\nupon any such refunding or repayment the total aggregate principal\namount of outstanding bonds, notes or other obligations may be greater\nthan one billion nine hundred seventy-four million two hundred fifty\nthousand dollars only if the present value of the aggregate debt service\nof the refunding or repayment bonds, notes or other obligations to be\nissued shall not exceed the present value of the aggregate debt service\nof the bonds, notes or other obligations so to be refunded or repaid.\nFor purposes hereof, the present values of the aggregate debt service of\nthe refunding or repayment bonds, notes or other obligations and of the\naggregate debt service of the bonds, notes or other obligations so\nrefunded or repaid, shall be calculated by utilizing the effective\ninterest rate of the refunding or repayment bonds, notes or other\nobligations, which shall be that rate arrived at by doubling the\nsemi-annual interest rate (compounded semi-annually) necessary to\ndiscount the debt service payments on the refunding or repayment bonds,\nnotes or other obligations from the payment dates thereof to the date of\nissue of the refunding or repayment bonds, notes or other obligations\nand to the price bid including estimated accrued interest or proceeds\nreceived by the agency including estimated accrued interest from the\nsale thereof.\n  * NB Expired December 31, 2015\n