§ 2880. Hospital facilities development fund. 1. Establishment of
fund. a. There is hereby created and established in the department of
health a revolving fund to be known as the "hospital facilities
development fund".

b. There shall be paid into such hospital facilities development fund
(a) any monies appropriated and made available by the state for the
purposes of such fund, (b) notwithstanding the provisions of the state
finance law or any other provision of law, any monies which the
department of health shall receive in repayment of advances made from
the fund, and (c) any other monies which may be made available to the
department of health for the purposes of such fund from any other source
or sources.

c. Any monies held in such hospital facilities development fund not
required for immediate disbursement may be invested, at the discretion
of the commissioner, 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. Any income or
interest earned by, or increment to, such hospital facilities
development fund shall be added to the monies held in such fund for the
purpose herein provided.

2. Advances; conditions; prepayment. a. The commissioner is hereby
authorized to use the monies held in the hospital facilities development
fund to make non-interest bearing advances to eligible borrowers
providing or arranging for health services in connection with a prepaid
comprehensive health care plan. Such monies shall be paid out of such
fund, after audit by and upon the warrant of the comptroller, on
vouchers approved by the commissioner.

b. No such advances may be made unless the commissioner reasonably
anticipates that a New York state housing finance agency mortgage or a
New York state medical care facilities finance agency mortgage, as the
case may be, will be obtained for the hospital project and makes a
finding to such effect. Such finding shall be conclusive evidence of the
facts therein contained except upon proof of fraud or willful
misfeasance.

c. The proceeds of such advances shall be used only to defray the
development costs of such project. The "development costs" means the
costs approved by the commissioner as appropriate expenditures which may
be incurred prior to the initial advance of the proceeds of a New York
state housing finance agency mortgage or a New York state medical care
facilities finance agency mortgage, as the case may be including but not
limited to: (a) payments for options to purchase properties for the
proposed hospital project or for deposits on account of contracts to
purchase such properties; (b) legal and organizational expenses,
including payment of attorneys' fees, project manager, administrative
and clerical staff salaries, office rent and other incidental expenses;
(c) payment of fees and expenses for preliminary surveys, reports and
feasibility studies, advances for planning, engineering and
architectural work; and (d) such other expenses incurred by such
eligible borrower as the commissioner may deem appropriate to effectuate
the purposes of this article.

d. If such eligible borrower obtains a mortgage loan from the New York
state housing finance agency or the New York state medical care
facilities finance agency, each such advance shall be repaid in full by
such eligible borrower to the department of health concurrently with
receipt by the eligible borrower of the first proceeds of such loan.

e. If the commissioner in his discretion shall, at any time, determine
that a New York state housing finance agency mortgage loan or a New York
state medical care facilities finance agency mortgage loan may not be
obtained, or that any advance made pursuant to this section is in
jeopardy of not being repaid or that the proposed project for which such
advance was made is in jeopardy of not being constructed, then and in
any such event all advances made to such eligible borrower from the
hospital facilities development fund shall be deemed due and payable by
the eligible borrower upon the demand of the commissioner.

3. Examination by comptroller. The comptroller, or his legally
authorized representative, is hereby authorized and empowered to examine
the books and accounts of the department of health relating to the
hospital facilities development fund, and from time to time, until the
advances have been repaid to the hospital facilities development fund,
to examine the books and accounts of each eligible borrower receiving
such advances, including its receipts, disbursements, contracts, leases,
loans, and any other monies relating to its financial operation.