S T A T E O F N E W Y O R K
________________________________________________________________________
438
2015-2016 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 7, 2015
___________
Introduced by M. of A. GOTTFRIED -- read once and referred to the
Committee on Health
AN ACT to amend the public health law and the public authorities law, in
relation to credit enhancement for health reform projects
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The public health law is amended by adding a new section
2807-zz to read as follows:
S 2807-ZZ. CREDIT ENHANCEMENT PROGRAM FOR HEALTH REFORM PROJECTS. 1.
THE COMMISSIONER IS AUTHORIZED TO ESTABLISH A PROGRAM TO ASSIST IN
RESTRUCTURING HEALTH CARE DELIVERY SYSTEMS BY PROVIDING CREDIT ENHANCE-
MENT SOLELY TO HOSPITALS THAT LACK THE CREDIT RESOURCES NECESSARY TO
FINANCE HEALTH REFORM PROJECTS FROM CONVENTIONAL LENDERS. THE PROGRAM
SHALL APPLY TO REGIONS (INCLUDING PORTIONS OF A SINGLE COUNTY) DESIG-
NATED BY THE COMMISSIONER AS MEDICALLY UNDERSERVED, INCLUDING RURAL
REGIONS. A HOSPITAL SUBJECT TO ACTIVE PARENT CONTROL (AS DEFINED IN
REGULATIONS UNDER THIS ARTICLE) SHALL QUALIFY UNDER THIS SECTION EVEN IF
OTHER HOSPITALS IN THAT SAME HOLDING COMPANY STRUCTURE DO NOT QUALIFY
UNDER THIS SECTION. THE PROGRAM SHALL APPLY TO HOSPITALS OPERATING
PURSUANT TO THIS ARTICLE, BUT THE FINANCING MAY ALSO INCLUDE PROJECTS
UNDERTAKEN BY NON-HOSPITAL AFFILIATES OF THE APPLICANT HOSPITAL.
PROJECTS ELIGIBLE FOR CREDIT ENHANCEMENT INCLUDE RENOVATIONS AND REPUR-
POSING OF FACILITIES, MEDICAL HIGH TECHNOLOGY EQUIPMENT AND HEALTH
INFORMATION TECHNOLOGY, WORKING CAPITAL, CARE MANAGEMENT INFRASTRUCTURE,
AND "SOFT" COSTS NOT TYPICALLY ELIGIBLE FOR LOANS FROM COMMERCIAL LEND-
ERS. ALL PROJECTS UNDER THIS SECTION MUST MEET DEFINED REGIONAL NEEDS TO
ADVANCE THE STATE'S HEALTH REFORM AGENDA OF BETTER CARE, BETTER HEALTH
FOR POPULATIONS, LOWER COSTS, AND SYSTEM RIGHT-SIZING. PREFERENCE WILL
BE GIVEN TO APPLICANTS THAT INCLUDE COLLABORATIONS WITH OTHER HEALTH
CARE PROVIDERS IN THE REGION. AN APPLICANT HOSPITAL SHALL BE AFFILIATED,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02734-01-5
A. 438 2
THE EXTENT OF THE AFFILIATION TO BE DETERMINED BY THE COMMISSIONER, WITH
AT LEAST ONE ACADEMIC MEDICAL INSTITUTION APPROVED BY THE COMMISSIONER,
PROVIDED THAT THE COMMISSIONER MAY WAIVE THAT REQUIREMENT IN RURAL
REGIONS.
2. APPLICANTS MUST COMMIT THAT THE USES OF THE CREDIT-ENHANCED LOANS
UNDER THIS SECTION WILL PROMOTE AGREED UPON REGIONAL HEALTH REFORM
OBJECTIVES. APPLICANTS MUST SUBMIT A COMPREHENSIVE PROGRAM AND BUSINESS
PLAN AND SUCH PLAN MUST PROMOTE AGREED UPON REGIONAL HEALTH REFORM
OBJECTIVES. APPLICATION DOCUMENTS SHALL CONTAIN HEALTH REFORM COVENANTS
AND MILESTONE DATES AND STATISTICAL TARGETS TO BE ATTAINED BY THE
BORROWER. SUCH APPLICATION COVENANTS MAY INCLUDE, BUT ARE NOT LIMITED
TO, ACUTE CARE RIGHT-SIZING, EXPANSION OF PRIMARY CARE, EXPANSION AND
INTEGRATION OF MENTAL HEALTH OR OTHER SERVICE CAPACITY REQUIRED IN THE
REGION, AND IMPLEMENTATION OF CARE DELIVERY AND CARE COORDINATION MODELS
CONSISTENT WITH HEALTH REFORM GOALS. THE APPLICATION MUST ADDRESS HOW
THE APPLICANT WILL UNDERTAKE THE IMPROVEMENTS IN FORMAL OR INFORMAL
COOPERATION WITH OTHER HEALTH CARE PROVIDERS IN THE REGION. STEPS TO
AVOID DUPLICATION OF SERVICES AND HIGH COST MEDICAL RESOURCES IN THE
REGION SHALL BE A CONDITION OF APPROVAL. TO THE EXTENT REQUIRED TO
PROVIDE LEGAL PROTECTION FOR SUCH COOPERATIVE ENDEAVORS, THE COMMISSION-
ER SHALL EXERCISE ALL NECESSARY POWERS PURSUANT TO ARTICLE TWENTY-NINE-F
OF THIS CHAPTER AND ANY FEES ASSOCIATED WITH SUCH OVERSIGHT MAY BE
INCLUDED IN THE PROJECT FINANCING COSTS. HEALTH REFORM COVENANTS
CONTAINED IN THE APPLICATION SHALL BE MONITORED AND ENFORCED BY THE
COMMISSIONER, IN A MANNER DETERMINED BY THE COMMISSIONER, AND SHALL NOT
CONSTITUTE LOAN COVENANTS BETWEEN THE BORROWER AND THE LENDER.
3. THE CREDIT ENHANCEMENT PROGRAM SHALL BE ADMINISTERED BY THE DORMI-
TORY AUTHORITY. THE COMMISSIONER SHALL CHAIR THE CREDIT ENHANCEMENT
APPLICATION AND APPROVAL COMMITTEE. THE COMMISSIONER SHALL DESIGNATE
THREE OR MORE MEMBERS OF THE CREDIT ENHANCEMENT APPLICATION AND APPROVAL
COMMITTEE. THE CHIEF EXECUTIVE OFFICER OF THE DORMITORY AUTHORITY SHALL
ALSO SERVE AS A MEMBER OF THE COMMITTEE, AND SHALL DETERMINE ALL RULES
FOR REVIEWING AND APPROVING APPLICATIONS, AND ADMINISTERING APPROVED
CREDIT ENHANCEMENTS. NOTWITHSTANDING ANY OTHER LAW, NO PERSON SERVING
AS A MEMBER OF THE CREDIT ENHANCEMENT APPLICATION AND APPROVAL COMMITTEE
SHALL HAVE ANY PERSONAL LIABILITY, OR INCUR LIABILITY FOR HIS OR HER
EMPLOYER, BY VIRTUE OF THE PERSON'S REASONABLE AND GOOD FAITH ROLE OR
VOTE IN THE CREDIT ENHANCEMENT APPLICATION AND APPROVAL PROCESS.
4. THE PURPOSE OF THE CREDIT ENHANCEMENT PROGRAM SHALL BE TO PROVIDE
ADDITIONAL RESOURCES TO BORROWERS SUFFICIENT TO ATTRACT CONVENTIONAL
LENDERS TO INVEST IN HEALTH REFORM PROJECTS PURSUANT TO LOANS TO QUALI-
FYING HOSPITAL BORROWERS. THE CREDIT ENHANCEMENT MAY CONSIST OF THE
COMMISSIONER EXPENDING FUNDS, WITH THE APPROVAL OF THE DIRECTOR OF THE
BUDGET, THROUGH THE USE OF ONE OR MORE MEASURES INCLUDING, BUT NOT
LIMITED TO, MORTGAGE INSURANCE, LETTERS OF CREDIT, BOND INSURANCE, POST-
ING COLLATERAL OR OTHER FINANCIAL COMMITMENTS OF APPROPRIATED FUNDS. A
DEBT SERVICE RESERVE FUND MAY BE CREATED TO FACILITATE THE CREDIT
ENHANCEMENT.
5. (A) IN THE EVENT OF A DEFAULT BY A BORROWER TO A LENDER, THE AMOUNT
OF THE DEFAULTED PAYMENT SHALL BE PAID BY THE COMMISSIONER TO THE LEND-
ER. TO FINANCE THE COMMISSIONER'S REMITTANCE OF THOSE DEFAULTED
PAYMENTS, THE COMMISSIONER SHALL DRAW UPON FUNDS ALLOCATED FOR SUCH
POTENTIAL DEFAULTS, INCLUDING BUT NOT LIMITED TO FUNDS MADE AVAILABLE
FOR THAT PURPOSE PURSUANT TO THE STATE'S AUGUST SIXTH, TWO THOUSAND
TWELVE SECTION ELEVEN HUNDRED FIFTEEN PARTNERSHIP PLAN WAIVER APPLICA-
TION, ADDITIONAL FEDERAL FUNDS MADE AVAILABLE THROUGH IMPLEMENTATION OF
A. 438 3
THE FEDERAL AFFORDABLE CARE ACT (HEALTH REFORM), OR OTHER SOURCES. THE
COMMISSIONER SHALL INFORM POTENTIAL LENDERS OF THE SUM TOTAL AMOUNTS
APPROPRIATED SO THAT LENDERS CAN DETERMINE THE RATIO OF LOANS TO BE MADE
IN RELATION TO DEFAULT RESOURCES APPROPRIATED. THE COMMISSIONER AND THE
DIRECTOR OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK SHALL ENTER
INTO AN AGREEMENT, SUBJECT TO THE APPROVAL OF THE DIRECTOR OF THE BUDG-
ET, FOR THE PURPOSE OF ADMINISTERING THE CREDIT ENHANCEMENT FUNDS.
(B) ALL PAYMENT OF DEFAULTED AMOUNTS SHALL BE MADE SOLELY FROM THE
APPROPRIATED FUNDS PURSUANT TO PARAGRAPH (A) OF THIS SUBDIVISION.
NEITHER THE STATE OF NEW YORK, THE COMMISSIONER, THE DEPARTMENT, THE
DORMITORY AUTHORITY, NOR ANY OTHER INSTRUMENTALITY OF THE STATE OF NEW
YORK, SHALL BE LEGALLY RESPONSIBLE FOR PAYMENT OF THE DEFAULTED AMOUNTS,
OTHER THAN PURSUANT TO THE PROCESS AND FINANCIAL RESOURCES APPROPRIATED
AS DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION. NO ASSETS OR
RESOURCES OF THE STATE SHALL BE PLEDGED, OR CONSIDERED TO BE PLEDGED OR
OBLIGATED IN ANY FORM, TO PAYMENT OF THE DEFAULTS, OTHER THAN PURSUANT
TO THE PROCESS AND FINANCIAL RESOURCES DESCRIBED IN PARAGRAPH (A) OF
THIS SUBDIVISION.
S 2. Subdivision 1 of section 1680 of the public authorities law is
amended by adding a new undesignated paragraph to read as follows:
SUCH HOSPITALS AND AFFILIATES AS ARE APPROVED FOR CREDIT ENHANCEMENT
UNDER SECTION TWENTY-EIGHT HUNDRED SEVEN-ZZ OF THE PUBLIC HEALTH LAW.
S 3. This act shall take effect immediately.