N.Y. Public Health Law § 2863: Payment out of earnings of limited-profit nursing home companies

§ 2863. Payment out of earnings of limited-profit nursing home

companies. There shall be paid annually out of the earnings of the

limited-profit nursing home company, after providing for all taxes,

assessments and expenses, a sum for interest on an amortization of the

mortgage indebtedness of all mortgages of the company, depreciation

charges and reserves if, when and to the extent deemed necessary by the

commissioner, plus a dividend of six per centum on outstanding shares

and interest not exceeding six per centum on the outstanding debentures

of the company; the obligation in respect to such payments shall be

cumulative, and any deficiency in interest, amortization, depreciation,

reserves, if any, and dividends in any year shall be paid either from

any cash surplus derived from earnings remaining in the treasury of such

company in excess of the amount necessary to provide such cumulative

annual sums or from the first available earnings in subsequent years.

If, at the end of any three year period, the gross receipts should

exceed the payments or charges necessary for the purposes of the project

or projects and are not needed for a sinking fund, reserves or other

purposes, the balance may be paid in further reduction of any

indebtedness to the extent and upon terms and conditions approved by the

commissioner. A sinking fund may be authorized by the commissioner to

purchase and retire debentures or shares of the company at a price

approved by the commissioner not exceeding par value thereof with

accrued or unpaid dividends or interest or, if it is not practical to

purchase such shares or debentures at a price so approved, the money in

such sinking fund may be added to the surplus of such company. Any

shares or debentures purchased out of such sinking fund shall be

cancelled and shall not be reissued.