§ 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 eighteen billion two 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 eighteen billion two 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.