* § 7-c. Secured hospital projects reserve funds and appropriations.\n1. Special hospital project bonds, as defined in paragraph (d-1) of\nsubdivision three of section three of this act, issued to refinance the\nprojects of eligible secured hospital borrowers, as defined in\nsubdivision six-c of section three of this act, shall be secured by (a)\na mortgage lien, (b) funds and accounts established under the bond\nresolution, (c) the secured hospital special debt service reserve fund\nor funds, (d) the secured hospital capital reserve fund or funds, and\n(e) such service contract or contracts entered into in accordance with\nthe provisions of subdivision four 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, as defined\nin paragraph (d-1) of subdivision three of section three of this act.\n Funds deposited in such secured hospital special debt service reserve\nfund or funds shall be used in the event that an eligible secured\nhospital borrower, as defined in subdivision six-c of section three of\nthis act, fails to make payments in an amount sufficient to pay the\nrequired debt service payments on special hospital project bonds, as\ndefined in paragraph (d-1) of subdivision three of section three of this\nact.\n (b) The agency shall, for the purposes of paragraph (a) of this\nsubdivision and for the support of eligible secured hospital borrowers,\npay into the secured hospital fund currently established and maintained\nby the agency: (i) all funds required to be paid in accordance with the\nprovisions of article twenty-eight of the public health law and\nregulations promulgated in such article; (ii) any mortgage insurance\npremium assessed in an amount fixed at the discretion of the agency,\nupon the issuance of special hospital project bonds, as defined in\nparagraph (d-1) of subdivision three of section three of this act; (iii)\nany income or interest earned on other reserve funds which the agency\nelects to transfer to the secured hospital fund; and (iv) any other\nmoneys which may be made available to the agency from any other source\nor sources. Moneys paid into the secured hospital fund shall, in the\ndiscretion of the agency, but subject to agreements with bondholders, be\nused to fund the special debt service reserve fund or funds at a level\nor levels which minimize the need for use of the capital reserve fund or\nfunds in the event of the failure of an eligible secured hospital\nborrower, as defined in subdivision six-c of section three of this act,\nto make the required debt service payments on special hospital project\nbonds, as defined in paragraph (d-1) of subdivision three of section\nthree of this act.\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: (a) the maximum amount of principal, sinking fund\npayments and interest due in any succeeding year on outstanding special\nhospital project bonds, as defined in paragraph (d-1) of subdivision\nthree of section three of this act, or (b) the maximum amount to ensure\nthat such bonds will not be considered arbitrage bonds under the\nInternal Revenue Code of 1986, as amended. The capital reserve fund\nshall be funded by the sale of special hospital project bonds, as\ndefined in paragraph (d-1) of subdivision three of section three of this\nact, or from such other funds as may be legally available for such\npurpose, as provided for in th
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