§ 2818. Health care efficiency and affordability law of New Yorkers
(HEAL NY) capital grant program. 1. The commissioner and the director of
the dormitory authority of the state of New York shall enter into an
agreement, subject to the approval of the director of the budget, for
the purpose of administering the funds available to the health care
efficiency and affordability law for New Yorkers (HEAL NY) capital grant
program as authorized under section sixteen hundred eighty-j of the
public authorities law, in a manner that will encourage improvements in
the operation and efficiency of the health care delivery system within
the state. A copy of such agreement, and any amendments thereto, shall
be provided to the chair of the senate finance committee, the director
of the division of budget and the chair of the assembly ways and means
committee.

Such agreement shall include criteria, to be developed by the
commissioner and the director of the authority, to be considered in
their evaluation of applications and determination of awards, including,
but not limited to:

(a) determination of eligible applicants, provided that such eligible
applicants shall include entities representative of any part of the
health care delivery system;

(b) consideration of statewide geographic distribution of funds;

(c) minimum and maximum amounts of funding to be awarded under the
program;

(d) the relationship between the project proposed by an applicant and
identified community need; and

(e) the extent to which the applicant has access to alternative
financing.

Such agreement shall be provided to the chair of the senate finance
committee, the director of the division of budget and the chair of the
assembly ways and means committee no later than thirty days prior to the
scheduled approval of the first bond issuance for the program by the
public authorities control board. The authority shall also report
quarterly to such chairpersons on the awards made through the program,
including the name of the applicant, a description of the project and
the amount of the award.

The commissioner and the director of the authority shall award grants
to eligible applicants after due public notice of the availability of
funds and through a process which ensures to the maximum extent
practicable and where appropriate, competition among such applicants,
consistent with the following requirements: the commissioner and the
director of the authority shall publish the priorities and goals that
are to be achieved through grant funding, and regularly provide public
notice of the availability of funding. These priorities and goals shall
be consistent with objectives and determinations of the Commission on
Health Care facilities in the Twenty-First Century established pursuant
to a chapter of the laws of two thousand five, provided, however, that
nothing shall prohibit the commissioner and the director for the
authority from awarding grants prior to a final report by the
commission. For each project that will be recommended for approval, the
commissioner and the director of the authority shall report to the chair
of the senate finance committee, the director of the division of budget
and the chair of the assembly ways and means committee how the project
meets the priorities, goals and criteria established pursuant to this
section.

Contracts awarded to eligible applicants shall require that work
performed thereunder shall be deemed "public work" and subject to and
preformed in accordance with articles eight, nine and ten of the labor
law and the contractors performing such work shall also be deemed a
state agency for the purpose of article fifteen-A of the executive law
and subject to the provisions of such article.

2. Notwithstanding the provisions of subdivision one of this section,
the commissioner and the director of the dormitory authority may award,
in an amount not to exceed twenty-five percent of the health care system
improvement capital grant program allocation in any given fiscal year,
grants to eligible applicants without the process set forth in
subdivision one of this section. With respect to the process for the
awarding of such funds without the process set forth in subdivision one
of this section, the commissioner and the director of the dormitory
authority shall determine eligible awardees based solely on an
applicant's ability to meet the following criteria:

(i) Have a loss from operations for each of the three consecutive
preceding years as evidenced by audited financial statements; and

(ii) Have a negative fund balance or negative equity position in each
of the three preceding years as evidenced by audited financial
statements; and

(iii) Have a current ratio of less than 1:1 for each of three
consecutive preceding years; or

(iv) Be deemed to the satisfaction of the commissioner to be a
provider that fulfills an unmet health care need for the community as
determined by the department through consideration of the volume of
Medicaid and medically indigent patients served; the service volume and
mix, including but not limited to maternity, pediatrics, trauma,
behavioral and neurobehavioral, ventilator, and emergency room volume;
and, the significance of the institution in ensuring health care
services access as measured by market share within the region.

(c) Prior to an award being granted to an eligible applicant without a
competitive bid or request for proposal process, the commissioner and
the director of the dormitory authority shall notify the chair of the
senate finance committee, the chair of the assembly ways and means
committee and the director of the division of budget of the intent to
grant such an award. Such notice shall include information regarding how
the eligible applicant meets criteria established pursuant to this
section.

3. Notwithstanding subdivisions one and two of this section, sections
one hundred twelve and one hundred sixty-three of the state finance law,
or any other inconsistent provision of law, of the funds available for
expenditure pursuant to this section, thirty million dollars may be
allocated and distributed by the commissioner without a competitive bid
or request for proposal process for grants to residential health care
facilities for the purpose of restructuring such facilities to achieve a
reduction in certified inpatient bed capacity. Consideration relied upon
by the commissioner in determining the allocation and distribution of
these funds shall include, but not be limited to, the following: (a) the
existing and projected need for inpatient nursing home beds and
community based long-term care services in the area in which a facility
applying for such funds is located; (b) the quality of the care being
provided by the facility; (c) the ability of the facility to access, in
a timely manner, alternative sources of funding, including other sources
of government funding; and (d) whether additional funding would permit
the facility to achieve greater stability and efficiency in the delivery
of needed health care services.

4. Notwithstanding the provisions of subdivision one of this section,
the commissioner and the director of the dormitory authority may award,
in an amount not to exceed twenty-five million dollars of the health
care system improvement capital grant program allocated in any given
fiscal year, grants to eligible applicants without the process set forth
in subdivision one of this section to provide necessary restructuring
support to hospitals for transition to a new reimbursement methodology.

(a) With respect to the process for the awarding of such funds without
the process set forth in subdivision one of this section, the
commissioner and director of the dormitory authority shall determine
eligible awardees based solely on an applicant's ability to meet the
following criteria:

(i) have a loss of operations for each of the three consecutive
preceding years as evidence by audited financial statements; and

(ii) have a negative fund balance or negative equity position in each
of the three preceding years as evidence by audited financial
statements; and

(iii) have a current ratio of less than 1:1 for each of three
consecutive preceding days; or

(iv) be deemed to the satisfaction of the commissioner to be a
provider that fulfills an unmet health care need for the community as
determined by the department through consideration of the volume of
Medicaid and medically indigent patients served; the service volume and
mix, including but not limited to maternity, pediatrics, trauma,
behavior and neurobehavioral, ventilator, and emergency room volume;
and, the significance of the institution in ensuring health care
services access as measured by market share within the region; or

(v) be deemed to the satisfaction of the commissioner to have incurred
operating losses resulting from the implementation of reimbursement rate
reforms and other reductions enacted by a chapter of the laws of two
thousand nine, to provide for the continued financial viability of the
applicant.

(b) Prior to an award being granted to an eligible applicant without a
competitive bid or request for proposal process, the commissioner and
the director of the dormitory authority shall notify the chair of the
senate finance committee, the chair of the assembly ways and means
committee and the director of the budget of the intent to grant such an
award. Such notice shall include information regarding how the eligible
applicant meets criteria established pursuant to this section.

5. (a) Notwithstanding subdivision one, two or three of this section,
the commissioner, with the approval of the director of the budget, may
expend funds for the purpose of providing cost effective increased
access to the capital markets, including but not limited to through the
use of mortgage insurance, credit enhancement, letters of credit, bond
insurance or other arrangements, for capital projects that are
determined to meet one or more of the following objectives for hospitals
licensed under this article:

(i) securing financing for facilities in a manner that will improve
the operation and efficiency of the health care delivery system within
the state;

(ii) securing financing for facilities in a manner consistent with the
objectives and determinations of the Commission on Health Care
Facilities in the Twenty-First Century, established pursuant to chapter
sixty-three of the laws of two thousand five;

(iii) securing financing for facilities in a manner that will help
rightsize the state's acute care infrastructure, including reducing
inpatient capacity, downsizing, restructuring, and closing facilities;

(iv) securing financing for facilities in a manner that advances the
reform of the long-term care system, including through rightsizing and
providing community-based services;

(v) securing financing for facilities in a manner that improves the
primary and ambulatory care system including programs undertaken in
collaboration with a local development corporation incorporated pursuant
to sections four hundred one and one thousand four hundred eleven of the
not-for-profit corporation law to foster the development and expansion
of high quality, cost effective primary health care services and related
ambulatory care and ancillary services benefiting medically underserved
communities, principally in the state, to increase access of community
residents to such services, to improve the health status of such
residents and to lessen the burdens of government and act in the public
interest; and

(vi) such other objectives as the commissioner deems appropriate to
effectuate the intent of this subdivision.

(b) The commissioner may transfer funds to other state agencies or
public authorities, with the approval of the director of budget, to
effectuate the purposes of this subdivision.

6. Notwithstanding any contrary provision of this section, sections
one hundred twelve and one hundred sixty-three of the state finance law,
or any other contrary provision of law, subject to available
appropriations, funds available for expenditure pursuant to this section
may be distributed by the commissioner without a competitive bid or
request for proposal process for grants to general hospitals and
residential health care facilities for the purpose of facilitating
closures, mergers and restructuring of such facilities in order to
strengthen and protect continued access to essential health care
resources. Provided however, that to the extent practicable, the
commissioner shall award such grants equitably among health planning
regions of the state. Prior to an award being granted to an eligible
applicant without a competitive bid or request for proposal process, the
commissioner shall notify the chair of the senate finance committee, the
chair of the assembly ways and means committee and the director of the
division of budget of the intent to grant such an award. Such notice
shall include information regarding how the eligible applicant meets
criteria established pursuant to this section.

7. Notwithstanding subdivisions one and two of this section, sections
one hundred twelve and one hundred sixty-three of the state finance law,
or any other inconsistent provision of law, of the funds available for
expenditure pursuant to this section, the commissioner may allocate and
distribute, without a competitive bid or request for proposal process,
grants to accountable care organizations under article twenty-nine-E of
this chapter for the purpose of promoting their formation and improving
their operation. Consideration relied upon by the commissioner in
determining the allocation and distribution of these funds shall
include, but not be limited to, the need for and capacity of the
accountable care organization to accomplish the purposes of article
twenty-nine-E of this chapter in the area to be served.

8. On or before December first, two thousand fourteen, the department
shall issue a report to the governor, the temporary president of the
senate and the speaker of the assembly regarding grants made pursuant to
this section to support health information technology.