2023 New York Laws › MCF - Medical Care Facilities Finance Agency 392/73

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    Inconsistent provisions in other laws superseded.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 eighteen billion two 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 eighteen billion two 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  residence,  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 and shall also include facilities
for: (i) comprehensive psychiatric emergency programs and/or psychiatric
inpatient programs or other similar programs, including but not  limited
to residential treatment facilities, under the auspice of municipalities
and  other  public  and  not-for-profit  agencies,  licensed pursuant to
article thirty-one of the mental hygiene law and/or article twenty-eight
of the public health law; and (ii)  licensed  or  unlicensed  permanent,
transitional,  or  emergency  housing for mentally ill persons under the
auspice of municipalities and other public and not-for-profit  agencies,
approved by the commissioner of the office of mental health, pursuant to
article forty-one of the mental hygiene law.
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  nine   hundred
twenty-one    million   seven   hundred   fifty-six   thousand   dollars
$12,921,756,000, 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 nine hundred twenty-one million seven hundred fifty-six thousand
dollars $12,921,756,000, 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  developmental  disabilities
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 developmental
disabilities 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 developmental
disabilities 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  developmental  disabilities  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

developmental  disabilities  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  the  sum  of  the  community  mental  health  and
developmental    disabilities   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 developmental  disabilities
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.