2013 New York Consolidated Laws
PBH - Public Health
Article 46 - (4600 - 4624) CONTINUING CARE RETIREMENT COMMUNITIES
4604-A - Council approval required for industrial development agency financing in connection with continuing care retirement communities.

 
    §  4604-a. Council approval required for industrial development agency
  financing in connection with continuing care retirement communities.  1.
  No person  seeking  financing  in  connection  with  a  continuing  care
  retirement  community  through  an  industrial  development agency shall
  undertake such financing without the prior approval of the council. Upon
  approving a proposed financing pursuant to  this  section,  the  council
  shall issue a certificate of authorization to the applicant.
    2. Prior to approving such financing, the council shall find that:
    a.  The  operator  has  (i)  executed  contracts  for at least seventy
  percent of all living units and has on deposit at least ten  percent  of
  the  entrance  fees  or  purchase price for such units; or (ii) executed
  contracts for at least sixty percent of all  living  units  and  has  on
  deposit  at  least  twenty-five percent of the entrance fees or purchase
  price for such units.
    b. The operator has demonstrated capability to comply fully  with  the
  requirements   for  a  certificate  of  authority  and  has  obtained  a
  contingent  certificate  of  authority  pursuant  to  section  forty-six
  hundred  four  of  this  article and the operator has agreed to meet the
  requirements of article eighteen-A of the general municipal law.
    c. The applicant is a not-for-profit corporation as defined in section
  one hundred two of  the  not-for-profit  corporation  law  that  is  (i)
  eligible  for tax-exempt financing under this section and (ii) is exempt
  from taxation pursuant to section  501(c)(3)  of  the  federal  internal
  revenue  code,  and  either  has (i) an equity position in the community
  equivalent to no less than fifteen percent of the amount to be  financed
  in  the  aggregate;  or  (ii)  covenants (A) to meet a ratio of cash and
  investments  to  outstanding  debt  (reserve  ratio)  of  no  less  than
  twenty-five  percent  commencing  at  the end of the first quarter after
  twenty-four months from the receipt of a certificate  of  occupancy  for
  the  facility,  and  (B)  to  maintain  that  reserve  ratio,  as tested
  quarterly based upon the facility's  interim  financial  statements  and
  annually  based  upon audited financial statements, until debt reduction
  equal to twenty-five percent of total indebtedness is accomplished;  and
  (c)   to   reduce  total  debt  by  twenty-five  percent  of  the  total
  indebtedness at the time the certificate of occupancy is received by  no
  later than five years after the receipt of the certificate of occupancy.
    d.  The  operator  has  submitted  in  connection  with  the  proposed
  financing a financial feasibility study, including a financial  forecast
  and  market  study prepared by an independent firm nationally recognized
  for  continuing   care   retirement   community   feasibility   studies,
  demonstrating to the satisfaction of the council the financial soundness
  of the financing. In addition, the operator has submitted an analysis of
  economic  costs  and benefits, including job creation and retention, the
  estimated value of tax exemptions  provided,  the  project's  impact  on
  local   businesses   and   the  availability  and  comparative  cost  of
  alternative financing sources. Such analysis shall  be  prepared  by  an
  independent entity.
    e.  The  operator  will  establish  and  maintain  a fully funded debt
  service reserve  equal  to  the  sum  of  maximum  annual  debt  service
  (interest  plus  annual  scheduled  principal  payments,  not  including
  balloon maturities,  if  any)  on  bonds  authorized  thereby  having  a
  maturity  of  ten years or less, plus the maximum annual debt service on
  bonds authorized thereby having a maturity of greater  than  ten  years,
  provided, however, that in the case of tax-exempt bond issues, such debt
  service reserve shall not exceed the maximum amount permitted by federal
  tax law.
    f.  The  operator  will  provide  for  such remedies or limitations of
  remedies of bondholders as may be required by  or  consistent  with  the

  provisions  of this article and any regulations in existence at the time
  of the issuance promulgated thereunder.
    g.  Unless  all  residents  have life care contracts, the operator has
  adequately made the assurances required by subdivision  two  of  section
  forty-six hundred twenty-four of this article and has agreed to fund the
  liability  in the event that resident assets are insufficient to pay for
  nursing facility services for a one year period.
    3. In addition, an operator which is subject to the provisions of this
  section shall:
    a. provide the council or its designee with  notice  of  any  monetary
  default  or covenant default in connection with such financing and shall
  further notify the council or its designee of any  withdrawal  from  the
  debt service reserve fund established in connection with such financing;
    b.  respond  in  writing  to  the  operational  recommendations of the
  council or its designee with respect  to  protecting  the  interests  of
  continuing  care  retirement  community  residents  in  the event of any
  monetary default or covenant default provided  for  in  connection  with
  such financing;
    c.  provide  adequate  security for the repayment of the bonds issued,
  including the granting of liens on real and personal  property  and  the
  pledge  of  project  revenues;  the  maintenance of minimum debt service
  coverage and other financial ratios as shall be required in  regulations
  in existence at the time of issuance by the council; and restrictions on
  other debt and expenditures; and
    d.  undertake  to  maintain the financial feasibility of the facility,
  including the retention of an independent consultant  to  recommend  and
  help implement remedial action.
    4.   The  council  may  request,  and  shall  receive,  the  technical
  assistance of any state agency or state public authority  in  performing
  its functions under this article.