S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                          438
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                      (PREFILED)
                                    January 7, 2015
                                      ___________
       Introduced  by  M.  of  A.  GOTTFRIED  --  read once and referred to the
         Committee on Health
       AN ACT to amend the public health law and the public authorities law, in
         relation to credit enhancement for health reform projects
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  The  public health law is amended by adding a new section
    2  2807-zz to read as follows:
    3    S 2807-ZZ. CREDIT ENHANCEMENT PROGRAM FOR HEALTH REFORM  PROJECTS.  1.
    4  THE  COMMISSIONER  IS  AUTHORIZED  TO  ESTABLISH  A PROGRAM TO ASSIST IN
    5  RESTRUCTURING HEALTH CARE DELIVERY SYSTEMS BY PROVIDING CREDIT  ENHANCE-
    6  MENT  SOLELY  TO  HOSPITALS  THAT LACK THE CREDIT RESOURCES NECESSARY TO
    7  FINANCE HEALTH REFORM PROJECTS FROM CONVENTIONAL  LENDERS.  THE  PROGRAM
    8  SHALL  APPLY  TO  REGIONS (INCLUDING PORTIONS OF A SINGLE COUNTY) DESIG-
    9  NATED BY THE COMMISSIONER  AS  MEDICALLY  UNDERSERVED,  INCLUDING  RURAL
   10  REGIONS.  A  HOSPITAL  SUBJECT  TO  ACTIVE PARENT CONTROL (AS DEFINED IN
   11  REGULATIONS UNDER THIS ARTICLE) SHALL QUALIFY UNDER THIS SECTION EVEN IF
   12  OTHER HOSPITALS IN THAT SAME HOLDING COMPANY STRUCTURE  DO  NOT  QUALIFY
   13  UNDER  THIS  SECTION.  THE  PROGRAM  SHALL  APPLY TO HOSPITALS OPERATING
   14  PURSUANT TO THIS ARTICLE, BUT THE FINANCING MAY  ALSO  INCLUDE  PROJECTS
   15  UNDERTAKEN   BY  NON-HOSPITAL  AFFILIATES  OF  THE  APPLICANT  HOSPITAL.
   16  PROJECTS ELIGIBLE FOR CREDIT ENHANCEMENT INCLUDE RENOVATIONS AND  REPUR-
   17  POSING  OF  FACILITIES,  MEDICAL  HIGH  TECHNOLOGY  EQUIPMENT AND HEALTH
   18  INFORMATION TECHNOLOGY, WORKING CAPITAL, CARE MANAGEMENT INFRASTRUCTURE,
   19  AND "SOFT" COSTS NOT TYPICALLY ELIGIBLE FOR LOANS FROM COMMERCIAL  LEND-
   20  ERS. ALL PROJECTS UNDER THIS SECTION MUST MEET DEFINED REGIONAL NEEDS TO
   21  ADVANCE  THE  STATE'S HEALTH REFORM AGENDA OF BETTER CARE, BETTER HEALTH
   22  FOR POPULATIONS, LOWER COSTS, AND SYSTEM RIGHT-SIZING.  PREFERENCE  WILL
   23  BE  GIVEN  TO  APPLICANTS  THAT INCLUDE COLLABORATIONS WITH OTHER HEALTH
   24  CARE PROVIDERS IN THE REGION. AN APPLICANT HOSPITAL SHALL BE AFFILIATED,
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD02734-01-5
       A. 438                              2
    1  THE EXTENT OF THE AFFILIATION TO BE DETERMINED BY THE COMMISSIONER, WITH
    2  AT LEAST ONE ACADEMIC MEDICAL INSTITUTION APPROVED BY THE  COMMISSIONER,
    3  PROVIDED  THAT  THE  COMMISSIONER  MAY  WAIVE  THAT REQUIREMENT IN RURAL
    4  REGIONS.
    5    2.  APPLICANTS  MUST COMMIT THAT THE USES OF THE CREDIT-ENHANCED LOANS
    6  UNDER THIS SECTION WILL  PROMOTE  AGREED  UPON  REGIONAL  HEALTH  REFORM
    7  OBJECTIVES.  APPLICANTS MUST SUBMIT A COMPREHENSIVE PROGRAM AND BUSINESS
    8  PLAN AND SUCH PLAN MUST  PROMOTE  AGREED  UPON  REGIONAL  HEALTH  REFORM
    9  OBJECTIVES.  APPLICATION DOCUMENTS SHALL CONTAIN HEALTH REFORM COVENANTS
   10  AND MILESTONE DATES AND  STATISTICAL  TARGETS  TO  BE  ATTAINED  BY  THE
   11  BORROWER.  SUCH  APPLICATION  COVENANTS MAY INCLUDE, BUT ARE NOT LIMITED
   12  TO, ACUTE CARE RIGHT-SIZING, EXPANSION OF PRIMARY  CARE,  EXPANSION  AND
   13  INTEGRATION  OF  MENTAL HEALTH OR OTHER SERVICE CAPACITY REQUIRED IN THE
   14  REGION, AND IMPLEMENTATION OF CARE DELIVERY AND CARE COORDINATION MODELS
   15  CONSISTENT WITH HEALTH REFORM GOALS. THE APPLICATION  MUST  ADDRESS  HOW
   16  THE  APPLICANT  WILL  UNDERTAKE  THE  IMPROVEMENTS IN FORMAL OR INFORMAL
   17  COOPERATION WITH OTHER HEALTH CARE PROVIDERS IN  THE  REGION.  STEPS  TO
   18  AVOID  DUPLICATION  OF  SERVICES  AND HIGH COST MEDICAL RESOURCES IN THE
   19  REGION SHALL BE A CONDITION OF  APPROVAL.  TO  THE  EXTENT  REQUIRED  TO
   20  PROVIDE LEGAL PROTECTION FOR SUCH COOPERATIVE ENDEAVORS, THE COMMISSION-
   21  ER SHALL EXERCISE ALL NECESSARY POWERS PURSUANT TO ARTICLE TWENTY-NINE-F
   22  OF  THIS  CHAPTER  AND  ANY  FEES  ASSOCIATED WITH SUCH OVERSIGHT MAY BE
   23  INCLUDED  IN  THE  PROJECT  FINANCING  COSTS.  HEALTH  REFORM  COVENANTS
   24  CONTAINED  IN  THE  APPLICATION  SHALL  BE MONITORED AND ENFORCED BY THE
   25  COMMISSIONER, IN A MANNER DETERMINED BY THE COMMISSIONER, AND SHALL  NOT
   26  CONSTITUTE LOAN COVENANTS BETWEEN THE BORROWER AND THE LENDER.
   27    3.  THE CREDIT ENHANCEMENT PROGRAM SHALL BE ADMINISTERED BY THE DORMI-
   28  TORY AUTHORITY. THE COMMISSIONER  SHALL  CHAIR  THE  CREDIT  ENHANCEMENT
   29  APPLICATION  AND  APPROVAL  COMMITTEE.  THE COMMISSIONER SHALL DESIGNATE
   30  THREE OR MORE MEMBERS OF THE CREDIT ENHANCEMENT APPLICATION AND APPROVAL
   31  COMMITTEE. THE CHIEF EXECUTIVE OFFICER OF THE DORMITORY AUTHORITY  SHALL
   32  ALSO  SERVE  AS A MEMBER OF THE COMMITTEE, AND SHALL DETERMINE ALL RULES
   33  FOR REVIEWING AND APPROVING  APPLICATIONS,  AND  ADMINISTERING  APPROVED
   34  CREDIT  ENHANCEMENTS.   NOTWITHSTANDING ANY OTHER LAW, NO PERSON SERVING
   35  AS A MEMBER OF THE CREDIT ENHANCEMENT APPLICATION AND APPROVAL COMMITTEE
   36  SHALL HAVE ANY PERSONAL LIABILITY, OR INCUR LIABILITY  FOR  HIS  OR  HER
   37  EMPLOYER,  BY  VIRTUE  OF THE PERSON'S REASONABLE AND GOOD FAITH ROLE OR
   38  VOTE IN THE CREDIT ENHANCEMENT APPLICATION AND APPROVAL PROCESS.
   39    4. THE PURPOSE OF THE CREDIT ENHANCEMENT PROGRAM SHALL BE  TO  PROVIDE
   40  ADDITIONAL  RESOURCES  TO  BORROWERS  SUFFICIENT TO ATTRACT CONVENTIONAL
   41  LENDERS TO INVEST IN HEALTH REFORM PROJECTS PURSUANT TO LOANS TO  QUALI-
   42  FYING  HOSPITAL  BORROWERS.  THE  CREDIT  ENHANCEMENT MAY CONSIST OF THE
   43  COMMISSIONER EXPENDING FUNDS, WITH THE APPROVAL OF THE DIRECTOR  OF  THE
   44  BUDGET,  THROUGH  THE  USE  OF  ONE  OR MORE MEASURES INCLUDING, BUT NOT
   45  LIMITED TO, MORTGAGE INSURANCE, LETTERS OF CREDIT, BOND INSURANCE, POST-
   46  ING COLLATERAL OR OTHER FINANCIAL COMMITMENTS OF APPROPRIATED FUNDS.   A
   47  DEBT  SERVICE  RESERVE  FUND  MAY  BE  CREATED  TO FACILITATE THE CREDIT
   48  ENHANCEMENT.
   49    5. (A) IN THE EVENT OF A DEFAULT BY A BORROWER TO A LENDER, THE AMOUNT
   50  OF THE DEFAULTED PAYMENT SHALL BE PAID BY THE COMMISSIONER TO THE  LEND-
   51  ER.   TO  FINANCE  THE  COMMISSIONER'S  REMITTANCE  OF  THOSE  DEFAULTED
   52  PAYMENTS, THE COMMISSIONER SHALL DRAW  UPON  FUNDS  ALLOCATED  FOR  SUCH
   53  POTENTIAL  DEFAULTS,  INCLUDING  BUT NOT LIMITED TO FUNDS MADE AVAILABLE
   54  FOR THAT PURPOSE PURSUANT TO THE  STATE'S  AUGUST  SIXTH,  TWO  THOUSAND
   55  TWELVE  SECTION  ELEVEN HUNDRED FIFTEEN PARTNERSHIP PLAN WAIVER APPLICA-
   56  TION, ADDITIONAL FEDERAL FUNDS MADE AVAILABLE THROUGH IMPLEMENTATION  OF
       A. 438                              3
    1  THE  FEDERAL  AFFORDABLE CARE ACT (HEALTH REFORM), OR OTHER SOURCES. THE
    2  COMMISSIONER SHALL INFORM POTENTIAL LENDERS OF  THE  SUM  TOTAL  AMOUNTS
    3  APPROPRIATED SO THAT LENDERS CAN DETERMINE THE RATIO OF LOANS TO BE MADE
    4  IN  RELATION TO DEFAULT RESOURCES APPROPRIATED. THE COMMISSIONER AND THE
    5  DIRECTOR OF THE DORMITORY AUTHORITY OF THE STATE OF NEW YORK SHALL ENTER
    6  INTO AN AGREEMENT, SUBJECT TO THE APPROVAL OF THE DIRECTOR OF THE  BUDG-
    7  ET, FOR THE PURPOSE OF ADMINISTERING THE CREDIT ENHANCEMENT FUNDS.
    8    (B)  ALL  PAYMENT  OF  DEFAULTED AMOUNTS SHALL BE MADE SOLELY FROM THE
    9  APPROPRIATED FUNDS  PURSUANT  TO  PARAGRAPH  (A)  OF  THIS  SUBDIVISION.
   10  NEITHER  THE  STATE  OF  NEW YORK, THE COMMISSIONER, THE DEPARTMENT, THE
   11  DORMITORY AUTHORITY, NOR ANY OTHER INSTRUMENTALITY OF THE STATE  OF  NEW
   12  YORK, SHALL BE LEGALLY RESPONSIBLE FOR PAYMENT OF THE DEFAULTED AMOUNTS,
   13  OTHER  THAN PURSUANT TO THE PROCESS AND FINANCIAL RESOURCES APPROPRIATED
   14  AS DESCRIBED  IN  PARAGRAPH  (A)  OF  THIS  SUBDIVISION.  NO  ASSETS  OR
   15  RESOURCES  OF THE STATE SHALL BE PLEDGED, OR CONSIDERED TO BE PLEDGED OR
   16  OBLIGATED IN ANY FORM, TO PAYMENT OF THE DEFAULTS, OTHER  THAN  PURSUANT
   17  TO  THE  PROCESS  AND  FINANCIAL RESOURCES DESCRIBED IN PARAGRAPH (A) OF
   18  THIS SUBDIVISION.
   19    S 2. Subdivision 1 of section 1680 of the public  authorities  law  is
   20  amended by adding a new undesignated paragraph to read as follows:
   21    SUCH  HOSPITALS  AND AFFILIATES AS ARE APPROVED FOR CREDIT ENHANCEMENT
   22  UNDER SECTION TWENTY-EIGHT HUNDRED SEVEN-ZZ OF THE PUBLIC HEALTH LAW.
   23    S 3. This act shall take effect immediately.