N.Y. Medical Care Facilities Finance Agency 392/73 § 7: Hospital and nursing home projects reserve funds and appropriations

§ 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 twenty-one billion eight 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 twenty-one billion eight 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.