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


Section 9-A Special provisions relating to mental health services facilities improvement bonds and notes

Medical Care Facilities Finance Agency 392/73 (MCF)

Special provisions relating to mental health services facilities improvement bonds and notes. 1. Definitions. For the purposes of this act:

  a. "Mental health services facility" shall mean a building, a unit within a building, a laboratory, a classroom, a housing unit, a dining hall, an activities center, a library, real property of any kind or description, or any structure on or improvement to real property of any kind or description, including fixtures and equipment which may or may not be an integral part of any such building, unit, structure or improvement, a walkway, a roadway or a parking lot, and improvements and connections for water, sewer, gas, electrical, telephone, heating, air conditioning and other utility services, or a combination of any of the foregoing, whether for patient care and treatment or staff, staff family or service use, located at or related to any psychiatric center, any developmental center, or any state psychiatric or research institute or other facility now or hereafter established under the state department of mental hygiene. A mental health services facility shall also mean and include a residential care center for adults, a "community mental health and retardation 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 retardation 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 retardation services, or for use in the conduct of an alcoholism or substance abuse treatment program. For purposes of this section mental health services facility shall also mean mental hygiene facility as defined in subdivision ten of section three of the facilities development corporation act.

  b. "Mental health services facilities improvement bonds" and "mental health services facilities improvement notes" shall mean bonds and notes, respectively, issued by the agency pursuant to subdivision two of this section.

  c. "Mental health services facilities improvement program" shall mean a program undertaken by the agency and the facilities development corporation for the purpose of financing, refinancing, designing, constructing, acquiring, reconstructing, rehabilitating or improving mental hygiene facilities and mental health services facilities or causing such facilities to be financed, refinanced, designed, constructed, acquired, reconstructed, rehabilitated or improved.

  2. Additional powers of the agency. a. The agency shall have power to enter into one or more lease, sublease, loan or other financing agreements with the directors of the facilities development corporation, or any successor agency, for the purpose of providing the financing or refinancing for or for designing, constructing, acquiring, reconstructing, rehabilitating and improving mental health services facilities at new or existing mental health services facilities, or on any real property or interest in real property owned by or conveyed from said corporation, or any successor agency, or any voluntary agency, or for the refinancing of any such facilities for which bonds have previously been issued by the agency or by the state housing finance agency and are outstanding and to cause by the providing of such financing such facilities to be designed, constructed, acquired, reconstructed, rehabilitated or improved or financed or refinanced by the directors of the said corporation, or any successor agency, all in accordance with one or more lease, sublease, loan or other financing agreements entered into between the agency and the directors of the said corporation pursuant to subdivision 4 of section 9 of the facilities development corporation act.

  b. The agency shall have power and is hereby authorized from time to time to issue negotiable bonds and notes in conformity with applicable provisions of the uniform commercial code in such principal amount as, in the opinion of the agency, shall be necessary, after taking into account other moneys which may be available for the purpose, to provide sufficient funds to the facilities development corporation, or any successor agency, for the financing or refinancing of or for the design, construction, acquisition, reconstruction, rehabilitation or improvement of mental health services facilities pursuant to paragraph a of this subdivision, the payment of interest on mental health services improvement bonds and mental health services improvement notes issued for such purposes, the establishment of reserves to secure such bonds and notes, the cost or premium of bond insurance or the costs of any financial mechanisms which may be used to reduce the debt service that would be payable by the agency on its mental health services facilities improvement bonds and notes and all other expenditures of the agency incident to and necessary or convenient to providing the facilities development corporation, or any successor agency, with funds for the financing or refinancing of or for any such design, construction, acquisition, reconstruction, rehabilitation or improvement and for the refunding of mental hygiene improvement bonds issued pursuant to section 47-b of the private housing finance law; provided, however, that the agency shall not issue mental health services facilities improvement bonds and mental health services facilities improvement notes in an aggregate principal amount exceeding nine billion three hundred thirty-three million three hundred eight thousand dollars $9,333,308,000, 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 nine billion three hundred thirty-three million three hundred eight thousand dollars $9,333,308,000, 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 alcoholism and substance abuse services, in consultation with their respective commissioners to finance bondable appropriations previously approved by the legislature.

  3. Application of other provisions of article. Except as provided in this section, the other provisions of this act shall apply to mental health services facilities improvement bonds and mental health services facilities improvement notes issued by the agency pursuant to this section, provided, however, that such bonds and notes, subject to any agreements with the holders of particular bonds or notes pledging any specified portions thereof, shall be secured by a pledge thereof of (a) payments made to the agency with respect to mental health services facilities financed or refinanced with the proceeds of such bonds and notes, and (b) any other assets, moneys or accounts pledged or assigned to the agency as security for such payments. However, no resolution or resolutions authorizing mental health services facilities improvement bonds or mental health services facilities improvement notes shall (A) pledge all or any part of the fees and charges made or received by the agency pursuant to paragraphs (a) through (d) of subdivision three of section six of this act in connection with the making of mortgage loans or commitments therefor, or all or any part of the moneys received in payment of such mortgage loans and interest thereon, (B) pledge all or any part of the mortgages of the agency or obligations securing the same, (C) provide as to the use and disposition of the gross income from mortgages owned by the agency or as to the payment of the principal of mortgages owned by the agency, (D) pledge all or any part of the rentals paid to the agency under leases, subleases or other agreements for health facilities entered into by the agency in accordance with this article, or (E) pledge or assign all or any part of any other assets, moneys or accounts pledged or assigned to the agency as security for the payment of rentals for such health facilities.

  4. Mental health services facilities fund. The agency shall create and establish one or more special funds (herein referred to as mental health services facilities funds) and shall pay into any such fund any moneys which the agency shall receive in payment in accordance with one or more agreements entered into pursuant to subdivision 4 of section 9 of the facilities development corporation act and any other moneys which the agency shall receive from the facilities development corporation pursuant to such agreements. Such moneys and any other moneys paid into the mental health services facilities fund may, in the discretion of the agency, but subject to agreements with the holders of mental health services facilities improvement bonds and mental health services facilities improvement notes, be used by the agency (a) for the repayment of advances, if any, from the state to the agency in connection with mental health services facilities, and any real property or interest in real property required therefor, in accordance with the provisions of repayment agreements related thereto which have been entered into with the director of the budget, (b) to pay all costs, expenses and charges of financing and refinancing mental health services facilities including fees and expenses of trustees and paying agents and credit enhancement fees, (c) to pay the administrative and other expenses of the agency allocable to the services performed by the agency in the financing or refinancing of or the design, construction, acquisition, reconstruction, rehabilitation or improvement of mental health services facilities and matters relating thereto, (d) for the payment of the principal of and interest on mental health services facilities improvement bonds or mental health services facilities improvement notes issued by the agency when the same shall become due whether at maturity or by call for redemption and for the payment of any redemption premium required to be paid where such bonds or notes are redeemed prior to their stated maturities, and to purchase mental health services facilities improvement bonds or mental health services facilities improvement notes issued by the agency, or (e) for such other corporate purposes of the agency relating to the carrying out of its functions, powers and duties with respect to the financing or refinancing of the design, construction, acquisition, reconstruction, rehabilitation or improvement of mental health services facilities as the agency in its discretion shall determine and provide.

  5. The agency may create and establish one or more special funds to be known as mental health services facilities improvement capital reserve funds and may pay into such reserve funds (a) any moneys appropriated and made available by the state for the purposes of such funds, (b) any proceeds of the sale of mental health services facilities improvement notes or bonds, to the extent provided in the resolution of the agency authorizing the issuance thereof, and (c) any other moneys which may be made available to the agency for the purposes of such funds from any other source or sources. The amount in each such capital reserve fund shall be determined by resolution of the agency provided, however, that such capital reserve fund shall not exceed the maximum amount of payments becoming due in any succeeding calendar year.

  The moneys held in or credited to the capital reserve funds established under this subdivision except as hereinafter provided, shall be used solely to the extent any payments as they become due pursuant to one or more agreements referred to in subdivision two of this section are not made or provided for by the facilities development corporation, provided, however, that the moneys in such funds shall, subject to agreement with the bondholders, not be withdrawn therefrom at any time in such amount as would reduce the amount thereof to less than the amount determined by resolution of the agency except for the purpose of making such payments becoming due under the agreements with the facilities development corporation and for which other moneys are not available.

  Any income or interest earned by, or increment to, any such mental health services improvement facilities capital reserve fund due to the investment thereof may be transferred to the mental health services facilities fund to the extent it does not reduce the amount of such mental health services capital reserve fund below the reserve requirement determined by resolution of the agency.

  6. Notwithstanding any other provision of law, general or special:

  a. Any public corporation or officer responsible for the acquisition of real property or any interest in real property or the planning, supervision or administration of facilities thereon which may be designed, constructed, acquired, reconstructed, rehabilitated or improved by the agency pursuant to this act is hereby authorized for and on behalf and in the name of the people of the state of New York, to execute and deliver to the agency, for such consideration, if any, as may be determined by such public corporation or officer and the agency, but not to exceed the cost of acquisition thereof and the cost of improvement thereon, a lease for a term not exceeding thirty years or a quitclaim deed conveying to the agency the title to or any interest in real property and to any real property or interest in real property of the people of the state of New York acquired by such public corporation or officer for such facilities, and in and to any of the improvements thereon, for the purpose of designing, constructing, reconstructing, rehabilitating or improving thereon one or more facilities pursuant to this act for lease or sublease to any such public corporation or officer, in accordance with the terms of an agreement entered into among them in accordance with law. The agency is hereby authorized to accept any such lease or conveyance from such public corporation or officer or from any voluntary agency, to lease or sublease such real property, any interest in real property, improvements and facilities to such public corporation or officer, and to hold the same subject to the terms of any such lease, conveyance, sublease or other agreement, and such public corporation or officer is hereby authorized, with the approval of the director of the budget, to lease or sublease any such real property, interests in real property, or improvements of the facilities designed, constructed, reconstructed, rehabilitated or improved thereon pursuant to this act or other provisions of law, and to hold such real property, any interests in real property, improvements and facilities subject to the terms of any such lease, sublease or other agreement.

  b. (i) In the event that the agency shall fail, within five years from the date of a lease or conveyance authorized pursuant to subdivision 1 of this section, to construct, reconstruct, rehabilitate or improve the facility or facilities thereon for which the conveyance was made, as provided for in a lease, sublease, loan or other financing agreement entered into with such public corporation or officer, or in the event that such facility or facilities shall cease to be used for the purposes intended, then and in either event but subject to the terms of any lease, sublease, loan or other financing agreement undertaken by the agency, such real property, interests in real property, and the improvements and facilities thereon, shall revert to the people of the state of New York with right of re-entry thereupon, and such lease or deed shall be made subject to such conditions. Provided, however, that as a condition precedent to the exercise of such right of re-entry the agency shall be paid an amount equal to the purchase price of such real property, any interest in real property, and improvements, the depreciated cost of any facility or facilities constructed, reconstructed, rehabilitated or improved thereon, and all other costs of the agency incident to the acquisition of such real property, interest in real property, and the financing of construction, reconstruction, rehabilitation or improvement relating to such facility or facilities, all as provided in the aforesaid lease, sublease, loan or other financing agreement entered into with such public corporation or officer. It is further provided that for the Corona Unit of the Bernard M. Fineson developmental disabilities services office, the agency may be paid an amount less than or equal to the purchase price of the real property, any interest in real property, and improvements, the depreciated cost of the facility constructed, reconstructed, rehabilitated, demolished or improved thereon, and all other costs of the agency incident to the acquisition of the real property, interest in real property and the financing of construction, reconstruction, rehabilitation, demolition or improvement relating to the facility, all as provided in the aforesaid lease, sublease, loan or other financing agreement entered into with such public corporation or officer.

  (ii) In the event that the agency shall determine that any portions of the real property or interest in real property leased or conveyed pursuant to subdivision 1 of this section are in excess of the real property or interest in real property needed to construct, reconstruct, rehabilitate or improve the facility or facilities thereon for which the conveyance was made, as provided in a lease, sublease, loan or other financing agreement entered into with such public corporation or officer or any voluntary agency, the agency may terminate its lease with respect to such excess portions of such real property or interest in real property or reconvey such excess portions to the people of the state of New York or to such voluntary agency. Provided, however, that the state of New York or such public corporation or officer or such voluntary agency shall pay to the agency an amount equal to the consideration, if any, paid by the agency to such public corporation or officer or such voluntary agency allocable to such excess real property or interest in real property and such other costs of the agency as are incident to the acquisition of such excess real property or interest in real property, all as may be approved by such public corporation or officer or such voluntary agency and the agency. Any monies so paid to the agency shall be used and applied, subject to the provision of any contract with noteholders and bondholders, for the sole purpose of paying costs and expenses of the agency incident to the financing of the facility or facilities to be designed, constructed, reconstructed, rehabilitated or improved on such other portions of the real property or interest in real property as shall have been leased or conveyed to the agency pursuant to subdivision 1 of this section. It is further provided that for the Corona unit of the Bernard M. Fineson developmental disabilities services office, the state of New York or such public corporation or officer or such voluntary agency may but is not required to pay to the agency an amount less than or equal to the consideration, if any, paid by the agency to such public corporation or officer or such voluntary agency allocable to such excess real property or interest in real property and such other costs of the agency as are incident to the acquisition of such excess real property or interest in real property, all as may be approved by such public corporation or officer or such voluntary agency and the agency. Any monies so paid to the agency shall be used and applied, subject to the provision of any contract with noteholders and bondholders, for the sole purpose of paying costs and expenses of the agency incident to the financing of the Corona unit of the Bernard M. Fineson developmental disabilities services office to be designed, constructed, reconstructed, rehabilitated, demolished or improved on such other portions of the real property or interest in real property as shall have been leased or conveyed to the agency pursuant to subdivision 1 of this section.

  c. The attorney general shall pass upon the form, sufficiency and manner of execution of any deed of conveyance and of any lease or sublease of lands and of any loan or other financing agreement authorized to be given under subdivision one of this section, excluding any lease or sublease given by a voluntary agency to the agency, and the same shall not be effective unless so approved by him.

  d. The cost of design, construction, acquisition, reconstruction, rehabilitation or improvement of facilities undertaken by the agency pursuant to this act may include the cost of acquisition of any real property, interest in real property and improvements leased or conveyed to the agency in accordance with subdivision 1 of this section and the cost of the original furnishings, equipment, machinery and apparatus determined by the responsible public corporation or officer to be needed to furnish and equip such facilities upon the completion of work. The agency shall have power to acquire or lease and to hold real property, any interest in real property and improvements required for the design, construction, acquisition, reconstruction, rehabilitation or improvement of facilities undertaken by the agency pursuant to this act and to provide the original furnishings, equipment, machinery and apparatus determined by the responsible public corporation or officer to be needed to furnish and equip such facilities upon the completion of work and to issue its bonds and notes to provide sufficient funds to pay or refinance the cost thereof.

  e. Any public corporation or officer referred to in paragraph a of this subdivision is hereby authorized and empowered, in connection with any lease, sublease, loan or other financing agreement with the agency to which such public corporation or officer is a party, and subject to such agreements with third parties as may then exist, to:

  (i) pledge or assign to the agency all or any portion of the revenues and monies received or to be received by such public corporation or officer, which may be available for the purpose of making payments for the use of the facilities constructed, acquired, reconstructed, rehabilitated or improved or to be constructed, acquired, reconstructed, rehabilitated or improved under such agreement, so that such payments may be fully secured and protected; provided, however, that such pledge or assignment shall not extend to appropriations or advances from the state except appropriations or advances made specifically for the purpose of paying all or any part of such payments;

  (ii) use and dispose of such revenues and monies, or any portions thereof, for the purpose of defraying, in whole or in part, (1) the cost of acquiring any real property or interest in real property for the purpose of constructing, acquiring, reconstructing, rehabilitating or improving facilities thereon which may be constructed, acquired, reconstructed, rehabilitated or improved by the agency pursuant to this act, (2) the cost of financing the construction, acquisition, reconstruction, rehabilitation or improvement of such facilities, and (3) the cost of acquiring the original furnishings, equipment, machinery and apparatus needed to furnish and equip such facilities upon the completion of work;

  (iii) set aside reserves and to agree to the maintenance, regulation and disposition thereof;

  (iv) agree to limitations on the purposes to which the proceeds of sale of agency notes or bonds may be applied and to the pledging of such proceeds to secure the payment of agency notes or bonds or of any issue thereof;

  (v) agree to limitations on the making of additional leases, subleases, loans or other financing agreements with the agency or with others, and the terms upon which such additional leases, subleases, loans or other financing agreements may be made;

  (vi) recognize and give effect to such assignment, upon receipt of any notice of assignment by the agency of any such lease, sublease, loan or other financing agreement with the agency, or of any of its rights under such lease, sublease, loan or other financing agreement, and to pay the assignee thereof payments then due or which may become due under any such lease, sublease, loan or other financing agreement which has been so assigned by the agency; and

  (vii) agree to any other matters, of like or different character, which in any way affect the security or protection of the payments required to be made under the terms of such lease, sublease, loan or other financing agreement with the agency.

  f. (i) Any mental hygiene facility, as defined in this section, which has been constructed, acquired, reconstructed, rehabilitated or improved, in whole or in part, out of monies advanced or deemed to have been advanced to the facilities development corporation, the state department of mental hygiene or the office of general services, since April 1, 1963 pursuant to appropriations or reappropriations as advances from the capital projects fund, and the real property or any interest in real property upon which such a facility is located, may be leased or conveyed to the agency by the facilities development corporation or the commissioner of mental hygiene in accordance with the provisions of subdivisions 1 through 5 of this section, notwithstanding that the construction, acquisition, reconstruction, rehabilitation or improvement of such facility may have been completed by the facilities development corporation, the state department of mental hygiene or the office of general services.

  (ii) Subject to such agreements with third parties as may then exist, the facilities development corporation is hereby authorized and empowered to enter into leases, subleases, loans and other financing agreements with the agency with respect to any mental hygiene facility described in subparagraph (i) of this paragraph, and the real property or any interest in real property upon which such a facility is or may be located, in accordance with the provisions of subdivision 4 of section 9 of the facilities development corporation act and the provisions of subdivisions 1 through 5 of this section; and the agency is hereby authorized and empowered to accept any lease or conveyance of any such mental hygiene facility, and the real property or any interest in real property upon which such a facility is or may be located, to acquire, construct, reconstruct, rehabilitate or improve any such facility, and to issue bonds and notes to provide sufficient funds therefor in accordance with the provisions of this section.

  7. a. The agency shall have the power to acquire by lease or deed from the facilities development corporation any real property acquired by the corporation pursuant to the provisions of subdivision six of section nine of the facilities development corporation act (i) for the purpose of constructing, reconstructing, rehabilitating or improving thereon one or more community mental health and retardation facilities or (ii) for the purpose of financing or refinancing the acquisition, construction, reconstruction, rehabilitation or improvement thereon of one or more community mental health and retardation facilities, pursuant to the provisions of this act and the facilities development corporation act. The agency is hereby authorized to lease or sublease such real property and facilities thereon to the corporation for the purpose of making the same available to a city or a county not wholly within a city, for use and occupancy in accordance with the provisions of a lease, sublease or other agreement between the corporation and such city or county.

  b. In the event that the agency shall fail, within five years after the date of a lease or conveyance of such real property from property from such city or county to the corporation, to construct, reconstruct, rehabilitate or improve the community mental health and retardation facility or facility thereon for which such lease or conveyance was made, as provided for in a lease, sublease or other financing agreement entered into by such city or county and the corporation, then, subject to the terms of any lease, sublease or other financing agreement undertaken by the agency, such real property and any facilities thereon shall revert to the corporation with right of re-entry thereupon, and such lease or deed shall be made subject to such condition of reverter and re-entry. Provided, however, that as a condition precedent to the exercise of such right of re-entry the corporation shall pay to the agency an amount equal to the sum of the purchase price of such real property, the depreciated cost of any community mental health and retardation facility or facilities constructed, reconstructed, rehabilitated or improved thereon and all other costs of the agency incident to the acquisition of such lands and the financing of construction, reconstruction, rehabilitation or improvement relating to such community mental health and retardation facility or facilities, all as provided in the aforesaid lease, sublease or other financing agreement entered into with the corporation. It is further provided that for the Corona unit of the Bernard M. Fineson developmental disabilities services office, the corporation may but is not required to pay to the agency an amount less than or equal to the purchase price of the real property, the depreciated cost of sum of the community mental health and retardation facility constructed, reconstructed, rehabilitated, demolished or improved thereon and all other costs of the agency incident to the acquisition of such lands and the financing of construction, reconstruction, rehabilitation, demolition or improvement relating to such community mental health and retardation facility, all as provided in the aforesaid lease, sublease or other financing agreement entered into with the corporation.

  c. No real property or interest therein shall be acquired by the agency pursuant to this subdivision unless the title thereto shall be approved by the attorney general.

  d. The attorney general shall pass upon the form and sufficiency and manner of execution of any deed of conveyance and of any lease or sublease of real property authorized to be acquired by the agency pursuant to this subdivision and the same shall not be effective unless such deed, lease or sublease shall be so approved by him.