1. The Laws of New York
  2. Unconsolidated Laws
  3. Medical Care Facilities Finance Agency 392/73


Section 7-C Secured hospital projects reserve funds and appropriations

Medical Care Facilities Finance Agency 392/73 (MCF)

1. Special hospital project bonds, as defined in paragraph (d-1) of subdivision three of section three of this act, issued to refinance the projects of eligible secured hospital borrowers, as defined in subdivision six-c of section three of this act, shall be secured by (a) a mortgage lien, (b) funds and accounts established under the bond resolution, (c) the secured hospital special debt service reserve fund or funds, (d) the secured hospital capital reserve fund or funds, and (e) 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, as defined in paragraph (d-1) of subdivision three of section three of this act.

  Funds deposited in such secured hospital special debt service reserve fund or funds shall be used in the event that an eligible secured hospital borrower, as defined in subdivision six-c of section three of this act, fails to make payments in an amount sufficient to pay the required debt service payments on special hospital project bonds, as defined in paragraph (d-1) of subdivision three of section three of this act.

  (b) The agency shall, for the purposes of paragraph (a) of this subdivision and for the support of eligible secured hospital borrowers, pay into the secured hospital fund currently established and maintained by the agency: (i) all funds required to be paid in accordance with the provisions of article twenty-eight of the public health law and regulations promulgated in such article; (ii) any mortgage insurance premium assessed in an amount fixed at the discretion of the agency, upon the issuance of special hospital project bonds, as defined in paragraph (d-1) of subdivision three of section three of this act; (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 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, as defined in subdivision six-c of section three of this act, to make the required debt service payments on special hospital project bonds, as defined in paragraph (d-1) of subdivision three of section three of this act.

  (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: (a) the maximum amount of principal, sinking fund payments and interest due in any succeeding year on outstanding special hospital project bonds, as defined in paragraph (d-1) of subdivision three of section three of this act, or (b) the maximum amount to ensure 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, as defined in paragraph (d-1) of subdivision three of section three of this act, 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 refinance mortgage loans to eligible secured hospital borrowers, as defined in subdivision six-c of section three of this act, the director of the budget is authorized in any state fiscal year to enter into one or more service contracts, which service contracts shall not exceed the term of the special hospital project bonds, issued for the benefit of the eligible secured hospital borrower, 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, as defined in paragraph (d-1) of subdivision three of section three of this act, 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 such 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-c of section three of this act.

  5. The agency shall not issue special hospital project bonds, as defined in paragraph (d-1) of subdivision three of section three of this act, except to refinance mortgage loans for eligible secured hospital borrowers as provided in section three of this act.

  * NB Repealed December 31, 2015