N.Y. Medical Care Facilities Finance Agency 392/73 § 9-a: Special provisions relating to mental health services facilities improvement bonds and notes

§ 9-a. 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 residence, a

"community mental health and developmental disabilities 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 developmental disabilities 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

developmental disabilities 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 and shall also include facilities

for: (i) comprehensive psychiatric emergency programs and/or psychiatric

inpatient programs or other similar programs, including but not limited

to residential treatment facilities, under the auspice of municipalities

and other public and not-for-profit agencies, licensed pursuant to

article thirty-one of the mental hygiene law and/or article twenty-eight

of the public health law; and (ii) licensed or unlicensed permanent,

transitional, or emergency housing for mentally ill persons under the

auspice of municipalities and other public and not-for-profit agencies,

approved by the commissioner of the office of mental health, pursuant to

article forty-one of the mental hygiene law.

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 fourteen billion two hundred

ninety-nine million four hundred fifty-two thousand dollars

$14,299,452,000, excluding bonds issued after April first, two thousand

twenty-five to (i) fund one or more debt service reserve funds, (ii) pay

costs of issuance of such bonds, and (iii) refund or otherwise repay

such bonds or notes previously issued, provided that nothing herein

shall affect the exclusion of refunding debt issued prior to such date.

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

addiction services and supports, 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 developmental disabilities

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 developmental

disabilities 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 developmental

disabilities 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 developmental disabilities 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

developmental disabilities 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 the sum of the community mental health and

developmental disabilities 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 developmental disabilities

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.