N.Y. Private Housing Finance Law § 47-d: Health facilities bonds and notes

§ 47-d. Health facilities bonds and notes. 1. Definitions. For the

purposes of section forty-seven and this section:

a. "Municipality" means a county, city or town constituting a social

services district as defined in sections two, sixty-one, seventy-five

and seventy-five-a of the social services law, or any two or more of the

foregoing which are acting jointly to provide a health facility or

health facilities.

b. "Health facility" means a building, a unit within a building, a

laboratory, a classroom, a housing unit, a dining hall, an activities

center, a library, or any structure on or improvement to real property

of any kind or description, including fixtures and equipment which are

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 of staff, staff family or service

use, located at or related to or constituting a hospital of, and located

in, a municipality.

c. "Health facilities bonds" and "health facilities notes" shall mean

bonds and notes, respectively, issued by the agency pursuant to

subdivision two of this section.

d. "Health facilities improvement program" shall mean a program

undertaken by the agency and the health and mental hygiene facilities

improvement corporation for the purpose of constructing, acquiring,

reconstructing, rehabilitating or improving health facilities or causing

such facilities to be constructed, acquired, reconstructed,

rehabilitated or improved pursuant to the health and mental hygiene

facilities improvement act and this article.

2. Additional powers of the agency. In accordance with any agreement

entered into pursuant to this article and the health and mental hygiene

facilities improvement act: a. The agency shall have powers: (i) to

lease or purchase one or more existing health facilities from a

municipality and cause such facility or facilities to be reconstructed,

rehabilitated or improved by the health and mental hygiene facilities

improvement corporation, created by the health and mental hygiene

facilities improvement act, as its agent or, on any real property leased

or purchased from a municipality to cause one or more health facilities

to be constructed by the health and mental hygiene facilities

improvement corporation as its agent; (ii) to lease or purchase from any

person, firm or corporation real property for the purpose of causing

health facilities to be constructed, reconstructed, rehabilitated or

improved by the health and mental hygiene facilities improvement

corporation as its agent; (iii) to lease or sublease to a municipality

health facilities which have been constructed, acquired, reconstructed,

rehabilitated or improved by the agency pursuant to this article and the

health and mental hygiene facilities improvement act; and (iv) to do all

or any combination of the foregoing.

b. The agency shall have power and is hereby authorized from time to

time to issue negotiable bonds and notes in such principal amount as, in

the opinion of the agency, shall be necessary, after taking into account

other monies which may be available for the purpose, to provide

sufficient funds for the construction, acquisition, reconstruction,

rehabilitation or improvement of health facilities pursuant to this

subdivision two, the payment of interest on health facilities bonds and

health facilities notes issued for such purposes, the establishment of

reserves to secure such bonds and notes, and all other expenditures of

the agency incident to and necessary or convenient for any such

construction, acquisition, reconstruction, rehabilitation or

improvement, provided, however, that the agency shall not issue health

facilities bonds and health facilities notes in an aggregate principal

amount exceeding eight hundred million dollars, excluding health

facilities bonds and health facilities notes issued to refund

outstanding health facilities bonds or health facilities notes.

3. Application of other provisions of article. Except as stated in

section forty-seven, the other provisions of this article shall apply to

health facilities bonds and health facilities 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 to

the payment thereof of (i) rentals paid to the agency with respect to

health facilities financed with the proceeds of such bonds and notes,

and (ii) any other assets, monies or accounts pledged or assigned to the

agency as security for the payment of such rentals, and provided further

that no resolution or resolutions authorizing health facilities bonds

and health facilities notes shall (i) pledge all or any part of the fees

and charges made or received by the agency pursuant to subdivision

eleven of section forty-four in connection with the making of mortgage

loans or commitments therefor, or all or any part of the monies received

in payment of such mortgage loans and interest thereon, or (ii) pledge

all or any part of the mortgages of the agency or obligations securing

the same, or (iii) provide as to the use and disposition of the gross

income from mortgages owned by the agency or as to the payment of

principal of mortgages owned by the agency, or (iv) pledge all or any

part of the rentals paid to the agency under leases, subleases or other

agreements for state university facilities and mental hygiene facilities

entered into by the agency in accordance with this article, or (v)

pledge or assign all or any part of any other assets, monies or accounts

pledged or assigned to the agency as security for the payment of rentals

for such state university facilities and mental hygiene facilities.

4. Health facilities income accounts. a. The agency shall create and

establish one or more special accounts (herein referred to as health

facilities income accounts) and shall pay into such accounts any monies

which the agency shall receive in payment of rentals due under one or

more leases or subleases entered into pursuant to subdivision two of

this section and any other monies which the agency shall receive from a

municipality as security for or in payment of such rentals. Such monies

and any other monies paid into such health facilities income accounts,

may, in the discretion of the agency, but subject to agreements with the

holders of health facilities bonds and health facilities notes, be used

by the agency (1) for the repayment of advances, if any, from the state

to the agency in connection with health facilities, and any 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, (2) to pay all costs, expenses and charges

of financing the health facilities applicable to such account or

accounts including fees and expenses of trustees and paying agents, (3)

to pay the administrative and other expenses of the agency allocable to

the services performed by the agency in the financing of the

construction, acquisition, reconstruction, rehabilitation or improvement

of health facilities and matters relating thereto, (4) for the payment

of the principal of and interest on health facilities bonds or health

facilities 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 health

facilities bonds or health facilities notes issued by the agency, or (5)

for such other corporate purposes of the agency relating to the carrying

out of its functions, powers and duties with respect to the financing of

the construction, acquisition, reconstruction, rehabilitation or

improvement of health facilities as the agency in its discretion shall

determine and provide.

b. To assure the continued payment of rentals due under one or more

leases or subleases entered into pursuant to subdivision two of this

section, the agency shall annually, not later than November first in

each year, make and deliver to the appropriate chief fiscal officer of

the municipality a certificate setting forth the amount, if any, due and

not paid for the preceding fiscal year of the agency under such lease or

sublease with such municipality. In the event of the failure or

inability of the municipality to pay over the stated amount to the

agency on or before December first of the same year, the agency shall

forthwith make and deliver to the comptroller of the state of New York,

the director of the budget of the state of New York and the

commissioners of health and social services of the state of New York a

further certificate restating the amount due and not paid, and such

amount shall be paid over to the agency, upon the warrant of the

comptroller on vouchers certified as correct by the commissioner of

health and approved by the commissioner of social services, out of the

next payment of state aid to such municipality pursuant to section three

hundred sixty-eight-a of the social services law or funds appropriated

for the purpose of making payments on behalf of such municipality

pursuant to section three hundred sixty-seven-b of such law. To the

extent any such payments to the agency are made from state aid payments

pursuant to section three hundred sixty-eight-a of such law, the amount

of such payments shall be deducted from the corresponding apportionment

of state aid otherwise credited to such municipality, and the state

shall not be obligated to pay, nor shall such municipality be entitled

to receive, by virtue of such deduction, any additional or increased

apportionment or payment of state aid pursuant to section three hundred

sixty-eight-a of the social services law. To the extent any such

payments to the agency are made from funds appropriated for the purpose

of making payments on behalf of such municipality pursuant to section

three hundred sixty-seven-b of such law, the amount of such payments may

be deducted from any other payments of state assistance to such

municipality under the social services law and the state shall not be

obligated to pay, nor shall the municipality be entitled to receive, by

virtue of such deduction, any additional or increased apportionment or

payment of such state assistance, provided, however, that nothing

contained in this sentence shall be construed to limit, impair, impede,

or otherwise adversely affect in any manner the rights or remedies of

the purchasers and holders and owners of any bonds or notes of the state

or any agency or instrumentality, public benefit corporation or

political subdivision thereof under which such purchasers and holders

and owners have any right of payment of such bonds or notes by recourse

to such state assistance monies.

5. Special provisions. Notwithstanding any other provision of law,

general, special or local, or any provision of any charter or ordinance:

a. A municipality is hereby authorized to execute and deliver to the

agency for such consideration as may be determined by the municipality,

the agency and the health and mental hygiene facilities improvement

corporation, but not to exceed the cost of acquisition thereof to the

municipality and the cost of improvements thereon, a lease for a term

not exceeding fifty years or a quit claim deed conveying to the agency

all right, title and interest of such municipality in and to real

property, for the purpose of constructing, reconstructing,

rehabilitating, or improving one or more health facilities pursuant to

this article and the health and mental hygiene facilities improvement

act for subsequent lease or sublease to such municipality, in accordance

with the terms of any agreement entered into pursuant to this article

and the health and mental hygiene facilities improvement act.

b. A municipality is hereby authorized to lease or sublease from the

agency the health facilities constructed, reconstructed, rehabilitated

or improved pursuant to this article and the health and mental hygiene

facilities improvement act, in accordance with the terms of any

agreement entered into pursuant to this article and such act. At such

time as all rentals due or to become due to the agency pursuant to the

terms of any such lease or sublease have been paid or such lease or

sublease is terminated pursuant to the provisions thereof, the

jurisdiction of the agency over the real property leased or conveyed

pursuant to paragraph a of this subdivision, together with the

improvements thereon shall cease and all interest real and personal in

such real property and improvements vested in the agency shall vest in

the municipality with right of re-entry thereon, provided, however if

such real property were leased or conveyed to the agency by a

municipality which constituted a city social services district which

district was dissolved pursuant to the provisions of chapter

twenty-eight of the laws of nineteen hundred seventy-two, all interest

real and personal in such real property and improvements vested in the

agency shall vest in the municipality which formerly constituted the

city social services district with right of re-entry thereon.

c. No real property or interest therein shall be acquired by the

agency pursuant to this subdivision unless title thereto shall have been

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 to which the agency and a municipality are parties, and the

same shall not be effective unless approved by him.

e. In the event that the agency shall fail within five years from the

date of a lease or conveyance authorized pursuant to paragraph a of this

subdivision five to construct, reconstruct, rehabilitate or improve the

health facilities thereon for which the lease or conveyance was made, as

provided for in any agreement entered into pursuant to this article and

the health and mental hygiene facilities improvement act, or in the

event that such health facilities shall cease to be used for the

purposes intended, then and in either event but subject to the terms of

any lease, sublease or other agreement between the agency and the

municipality, such real property and any health facilities thereon,

shall revert to the municipality 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 municipality shall pay to the agency an amount equal to the

purchase price of such real property, the depreciated cost of any health

facilities constructed, reconstructed, rehabilitated or improved, and

all other costs of the agency incident to the acquisition of such real

property and the financing of construction, reconstruction,

rehabilitation or improvement relating to such facilities, all as

provided in the aforesaid lease, sublease or other agreement entered

into with such municipality.

f. In the event that the agency shall determine that any portions of

the real property leased or conveyed pursuant to paragraph a of this

subdivision five are in excess of the real property needed to construct,

reconstruct, rehabilitate or improve the facility or facilities thereon

for which the conveyance was made, as provided in any agreement entered

into pursuant to this article and the health and mental hygiene

facilities improvement act, the agency may terminate its lease with

respect to such excess portions of such real property or reconvey such

excess portions to the municipality, provided, however, that the

municipality shall pay to the agency an amount equal to the

consideration, if any, paid by the agency to such municipality allocable

to such excess real property and such other costs of the agency as are

incident to the acquisition of such excess real property, all as may be

approved by such municipality and the agency. Any monies so paid to the

agency shall be used and applied, subject to the provisions 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

health facilities to be constructed, reconstructed, rehabilitated or

improved on such other portions of the real property as shall have been

leased or conveyed to the agency pursuant to paragraph a of this

subdivision five.

g. The cost of construction, acquisition, reconstruction,

rehabilitation or improvement of health facilities undertaken by the

agency pursuant to this article and the health and mental hygiene

facilities improvement act may include the cost of acquisition of any

real property leased or conveyed to the agency in accordance with

paragraph a of this subdivision five and the cost of the original

furnishings, equipment, machinery and apparatus needed to furnish and

equip such facilities upon the completion of the work. The agency shall

have power to acquire or lease and to hold real property required for

the construction, acquisition, reconstruction, rehabilitation or

improvement of the health facilities undertaken by the agency pursuant

to this article and the health and mental hygiene facilities improvement

act and to provide the original furnishings, equipment, machinery and

apparatus 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 the cost thereof.

h. A municipality is hereby authorized and empowered, in connection

with any lease, sublease or other agreement with the agency to which

such municipality is a party, and subject to such agreements with third

parties as may then exist, to:

(1) pledge or assign to the agency all or any portion of the revenues

and monies received or to be received by the municipality, which may be

available for the purpose of paying rentals for the use of the health

facilities constructed, acquired, reconstructed, rehabilitated or

improved under such agreement, so that the payment of such rentals may

be fully secured and protected;

(2) use and dispose of such revenues and monies, or any portions

thereof, for the purpose of defraying, in whole or in part (a) the cost

of acquiring any 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 article and the health and

mental hygiene facilities improvement act, (b) the cost of financing the

construction, acquisition, reconstruction, rehabilitation or improvement

of such facilities, and (c) the cost of acquiring the original

furnishings, equipment, machinery and apparatus needed to furnish and

equip such facilities upon the completion of the work;

(3) set aside rental reserves and to agree to the maintenance,

regulation and disposition thereof;

(4) 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 issued

thereof;

(5) agree to limitations on the making of additional leases, subleases

or agreements with the agency or with others, and the terms upon which

such additional leases, subleases or agreements may be made;

(6) upon receipt of any notice of assignment by the agency of any such

lease, sublease or other agreement with the agency, or of any of its

rights under such lease, sublease or other agreement, recognize and give

effect to such assignment and to pay the assignee thereof rentals or

other payments then due or which may become due under any such lease,

sublease or other agreement which has been so assigned by the agency;

and

(7) agree to any other matters, of like or different character, which

in any way affect the security or protection of the rental payments

required to be made under the terms of such lease, sublease or other

agreement with the agency.