* § 7-a. Secured hospital projects reserve funds and appropriations.\n1. Special hospital project bonds issued to finance the projects of\neligible secured hospital borrowers shall be secured by (i) a first\nmortgage lien on such property as specified in accordance with\nsubdivision twelve of section three of this act, (ii) funds and accounts\nestablished under the bond resolution, (iii) the secured hospital\nspecial debt service reserve fund or funds, (iv) the secured hospital\ncapital reserve fund or funds, and (v) such service contract or\ncontracts entered into in accordance with the provisions of subdivision\nfour of this section.\n 2. (a) The agency shall establish a secured hospital special debt\nservice reserve fund or funds and pay into such fund or funds moneys\nfrom the secured hospital fund up to an amount not to exceed an amount\nnecessary to ensure the repayment of principal and interest due on any\noutstanding indebtedness on special hospital projects bonds. Funds\ndeposited in such special debt service reserve fund or funds shall be\nused in the event that an eligible secured hospital borrower fails to\nmake the required debt service payments on special hospital projects\nbonds, including, if necessary, payments due as a result of the failure\nto make principal and interest payments associated with the refinancing\nof indebtedness attributable to unmet bad debt and charity care losses.\n (b) The agency shall establish a secured hospital fund for the\npurposes of paragraph (a) of this subdivision and for the support of\neligible borrowers, and shall pay into such fund: (i) all funds required\nto be paid in accordance with the provisions of article twenty-eight of\nthe public health law and regulations promulgated thereunder; (ii) any\nmortgage insurance premium assessed in an amount fixed at the discretion\nof the agency, upon the issuance of special hospital project bonds;\n(iii) any income or interest earned on other reserve funds which the\nagency elects to transfer to the secured hospital fund; and (iv) any\nother moneys which may be made available to the agency for the purposes\nof such fund from any other source or sources. Moneys paid into the\nsecured hospital fund shall, in the discretion of the agency, but\nsubject to agreements with bondholders, be used to fund the special debt\nservice reserve fund or funds at a level or levels which minimize the\nneed for use of the capital reserve fund or funds in the event of the\nfailure of an eligible secured hospital borrower to make the required\ndebt service payments on special hospital project bonds.\n (c) Notwithstanding the provisions of paragraphs (a) and (b) of this\nsubdivision, the state hereby expressly reserves the right to modify or\nrepeal the provisions of article twenty-eight of the public health law.\n 3. The agency shall establish a secured hospital capital reserve fund\nor funds which shall be funded at an amount or amounts equal to the\nlesser of either: (i) the maximum amount of principal, sinking fund\npayments and interest due in any succeeding year on outstanding special\nhospital project bonds or (ii) the maximum amount to insure that such\nbonds will not be considered arbitrage bonds under the Internal Revenue\nCode of 1986, as amended. The capital reserve fund shall be funded by\nthe sale of special hospital project bonds or from such other funds as\nmay be legally available for such purpose, as provided for in the bond\nresolution or resolutions authorizing the issuance of such bonds.\n 4. (a) Notwithstanding the provisions of any general or special law to\nthe contrary, and subject to the making of annual appropriations\ntherefor by the legislature, in order to provide adequate health care to\npersons of low income who otherwise would be unable to secure the same\nand to assist the agency in the undertaking and financing of mortgage\nloans to eligible secured hospital borrowers as defined in subdivision\nsix-b of section three
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