Section 2880. Hospital facilities development fund

1. Establishment of
  fund.  a. There is hereby created and established in the  department  of
  health  a  revolving  fund  to  be  known  as  the  "hospital facilities
  development fund".
    b. There shall be paid into such hospital facilities development  fund
  (a)  any  monies  appropriated  and  made available by the state for the
  purposes of such fund, (b) notwithstanding the provisions of  the  state
  finance  law  or  any  other  provision  of  law,  any  monies which the
  department of health shall receive in repayment of  advances  made  from
  the  fund,  and  (c) any other monies which may be made available to the
  department of health for the purposes of such fund from any other source
  or sources.
    c. Any monies held in such hospital facilities  development  fund  not
  required  for  immediate disbursement may be invested, at the discretion
  of the commissioner, in obligations of the state or  the  United  States
  government  or  obligations  the  principal  and  interest  of which are
  guaranteed by the state or the United States government. Any  income  or
  interest   earned   by,   or  increment  to,  such  hospital  facilities
  development fund shall be added to the monies held in such fund for  the
  purpose herein provided.
    2.  Advances;  conditions;  prepayment.  a. The commissioner is hereby
  authorized to use the monies held in the hospital facilities development
  fund  to  make  non-interest  bearing  advances  to  eligible  borrowers
  providing  or arranging for health services in connection with a prepaid
  comprehensive health care plan. Such monies shall be paid  out  of  such
  fund,  after  audit  by  and  upon  the  warrant  of the comptroller, on
  vouchers approved by the commissioner.
    b. No such advances may be made  unless  the  commissioner  reasonably
  anticipates  that  a New York state housing finance agency mortgage or a
  New York state medical care facilities finance agency mortgage,  as  the
  case  may  be,  will  be  obtained  for the hospital project and makes a
  finding to such effect. Such finding shall be conclusive evidence of the
  facts  therein  contained  except  upon  proof  of  fraud   or   willful
  misfeasance.
    c.  The  proceeds  of  such  advances shall be used only to defray the
  development costs of such project. The  "development  costs"  means  the
  costs approved by the commissioner as appropriate expenditures which may
  be  incurred  prior to the initial advance of the proceeds of a New York
  state housing finance agency mortgage or a New York state  medical  care
  facilities finance agency mortgage, as the case may be including but not
  limited  to:  (a)  payments  for  options to purchase properties for the
  proposed hospital project or for deposits on  account  of  contracts  to
  purchase   such  properties;  (b)  legal  and  organizational  expenses,
  including payment of attorneys' fees,  project  manager,  administrative
  and  clerical staff salaries, office rent and other incidental expenses;
  (c) payment of fees and expenses for preliminary  surveys,  reports  and
  feasibility    studies,   advances   for   planning,   engineering   and
  architectural work;  and  (d)  such  other  expenses  incurred  by  such
  eligible borrower as the commissioner may deem appropriate to effectuate
  the purposes of this article.
    d. If such eligible borrower obtains a mortgage loan from the New York
  state  housing  finance  agency  or  the  New  York  state  medical care
  facilities finance agency, each such advance shall be repaid in full  by
  such  eligible  borrower  to  the department of health concurrently with
  receipt by the eligible borrower of the first proceeds of such loan.
    e. If the commissioner in his discretion shall, at any time, determine
  that a New York state housing finance agency mortgage loan or a New York
  state medical care facilities finance agency mortgage loan  may  not  be

  obtained,  or  that  any  advance  made  pursuant  to this section is in
  jeopardy of not being repaid or that the proposed project for which such
  advance was made is in jeopardy of not being constructed,  then  and  in
  any  such  event  all  advances  made to such eligible borrower from the
  hospital facilities development fund shall be deemed due and payable  by
  the eligible borrower upon the demand of the commissioner.
    3.  Examination  by  comptroller.  The  comptroller,  or  his  legally
  authorized representative, is hereby authorized and empowered to examine
  the books and accounts of the  department  of  health  relating  to  the
  hospital  facilities  development fund, and from time to time, until the
  advances have been repaid to the hospital facilities  development  fund,
  to  examine  the  books and accounts of each eligible borrower receiving
  such advances, including its receipts, disbursements, contracts, leases,
  loans, and any other monies relating to its financial operation.