New York Laws
HHC - New York City health and hospitals corporation act 1016/69

(b) No subsidiary corporation shall have the power to engage in
collective bargaining or negotiate with any organization representing
any of its employees, or to enter into collective bargaining agreements
with any such organization. Each such subsidiary corporation shall
operate under personnel administration policies, practices, procedures
and programs, and terms and conditions of employment of the corporation,
including those agreed to in collective bargaining and determined by the
comptroller of the city pursuant to section two hundred twenty of the
labor law.
(c) Each such subsidiary corporation and any of its properties,
functions and activities shall have all of the privileges, immunities,
tax exemptions and other exemptions of the corporation and of the
corporation's properties, functions and activities except, however, no
such subsidiary corporation shall issue bonds and notes or form
subsidiary corporations. Each such subsidiary corporation shall be
subject to suit in accordance with the provisions of section twenty of
this act. Any state, city, commission, agency, officer, department,
division or person is authorized to cooperate with and enter into such
agreements with a subsidiary corporation subject to the provisions of
this act and to any agreement entered into pursuant thereto; provided,
however, that each such subsidiary corporation shall be subject to any
restrictions, approvals, and limitations to which the corporation may be
subject;
21. To do any and all things necessary, convenient or desirable to
carry out its corporate purposes, and for the exercise of the powers
given to it in this act.
§ 6. Relationship to the city; agreements concerning health
facilities. 1. (a) The city shall on or before the first day of July
nineteen hundred seventy enter into an agreement or agreements with the
corporation, pursuant to this section and section seven herein, whereby
the corporation shall operate the hospitals then being operated by the
city for the treatment of acute and chronic diseases, and for the fiscal
year of the city commencing on the first day of July nineteen hundred
seventy and thereafter the city shall include in its expense budget an
appropriation of tax levy for the services provided by the corporation
and pay the corporation an amount which shall not be less than one
hundred seventy-five million dollars; provided, however, that for the
fiscal year beginning July first, nineteen hundred seventy-two and
thereafter the amount shall be adjusted annually to take account of
increases in the cost of health care as reflected in increases in the
average rates of reimbursement set by the state pursuant to section
twenty-one hundred seven of the public health law for health and
hospital services in New York City, and changes in the volume of
services rendered by the corporation and required by the city for which
no reimbursement from third-party sources is available. The corporation
shall submit a program budget to the city, in time for inclusion in the
mayor's executive budget, detailing the anticipated expenditure of the
tax levy funds appropriated by the city for the coming fiscal year.
The provisions of subdivision three of paragraph a of section 135.00
of the local finance law shall not apply to a contract entered into
pursuant to this section.
1. (b) Within a reasonable time thereafter the city shall enter into a
similar agreement or agreements for the remaining personal health and
medical facilities then operated by the city.

2. (a) The corporation shall have the power to enter into contracts,
leases, sub-leases or other agreements permitting the city to purchase,
lease, sub-lease or otherwise acquire or use any health facility by or
under the jurisdiction of the corporation; and to permit the city to
construct or add health facilities or improvements upon or to such
health facility.
(b) The city shall be empowered to purchase, lease, sub-lease or
otherwise acquire or contract for the use of and use any health facility
held by or under the jurisdiction of the corporation, or to construct or
add health facilities or improvements upon or to such a health facility,
in accordance with the terms of any contract, lease, sub-lease or other
agreement entered into pursuant to the terms of this act.
3. Any contract, lease, sub-lease or other agreement between the city
and the corporation for the purchase, lease, sub-lease, use, operation
or construction and equipment of a health facility, as authorized by
this act, shall
(a) set forth any health facility to be constructed and equipped, used
or operated;
(b) provide that the corporation shall apply for and receive all
reimbursement allowances or other moneys available to the corporation
from any source for the provision of health and medical services for
which such reimbursement allowances or other moneys are available,
through or in the facilities of the corporation, and that such
reimbursement allowances or other moneys shall be collected and received
by the corporation directly from any such source, and used by the
corporation for the purposes herein recited;
(c) provide that whenever the city requires the corporation to provide
health and medical services to persons in the city, the city shall pay
the corporation for the cost of such services as are actually rendered,
such cost to be determined by agreement between the city and the
corporation; provided, however, that such payments shall only be made by
the city to the extent that no reimbursement allowances or other
payments are paid to the corporation from any other government or other
sources for the payment of such costs; and
(d) provide that the health and medical services provided by or
through any such health facility shall be available to the public upon
the terms and conditions set forth in such contract, lease, sub-lease or
other agreement.
4. (a) Any such contract, lease, sub-lease or other agreement between
the city and the corporation that requires the corporation to construct
and equip, or causes to be constructed or equipped, a health facility
shall provide that the city shall be required to pay the total estimated
cost of such construction and equipment to the corporation at such times
and in such amounts as determined and requested by the corporation, any
such payment to be made by the city upon the delivery to the comptroller
of the corporation of a certificate requesting such payment.
(b) For the purpose of this subdivision four, the cost of construction
and equipment shall include, but not be limited to, the cost of any
plans, specifications, drawings or designs prepared for the purposes of
the health facility concerned.
5. Any such contract, lease, sub-lease or other agreement between the
city and the corporation may contain provisions, in addition to any
required by the provisions of this act, as to:
(a) pledging or assigning any part of moneys and revenues, including
reimbursement allowances, derived by the city, or the corporation, to
secure payments required by such contract, lease, sub-lease or other
agreement;
(b) limitations on the purposes to which the proceeds of the sale of
the bonds and notes of the corporation may be applied and as to the
pledging of such proceeds to secure the payment of bonds and notes of
the corporation or of any issued thereby, subject to any agreement with
the holders of bonds or notes of the corporation;
(c) setting aside reserves and creating special funds and the
regulation and disposition thereof;
(d) procedures, if any, by which such contract, lease, sub-lease or
other agreement may be amended, the amount of bonds or notes or other
obligations the holders of which must consent thereto, and the manner in
which such consent may be given;
(e) defining the acts or omissions to act which shall constitute a
default in the obligations and duties of the city or corporation and
providing for the rights and remedies of the corporation and the holders
of its bonds, notes or other obligations in the event of such default;
(f) any other matters, of like or different character, which may be
deemed necessary or desirable by the corporation for the proper
effectuation of its corporate purposes or for the security or protection
of the holders of its bonds, notes, or other obligations.
6. The city shall not be required to make any payment to the
corporation, nor shall any charge, claim or liability exist or arise
against the city for any such payment, in excess of amounts appropriated
or otherwise authorized by the city therefor. Payments due or to become
due by the city pursuant to any contract, lease, sub-lease or other
agreement with the corporation shall not constitute outstanding
indebtedness of the city for the purposes of paragraph three of
subdivision (a) of section 135.00 of the local fianance law.
7. The corporation shall exercise its powers to provide and deliver
health and medical services to the public in accordance with policies
and plans of the administration with respect to the provision and
delivery of such services and the corporation shall have the power to
adopt and implement rules and regulations not inconsistent with such
policies and plans of the administration. For its part, the
administration shall assist and cooperate with the corporation with
respect to such matters.
§ 7. Conveyance of property by the city to the corporation;
acquisition of property by the city. 1. The city, acting by the board of
estimate thereof, may, by deed, lease or other instrument convey, lease
or otherwise dispose of any real or personal property or any interest
therein owned or held by the city, without public letting or auction, to
the corporation for its corporate purposes, for so long as it shall be
in existence notwithstanding the provisions of any law respecting the
inalienability of real property by the city, and such conveyance may
reserve to the city such rights as shall not restrict the corporation in
carrying out its corporate purposes.
2. The city may acquire, in the name of the city, by purchase or
condemnation in the manner provided by law for the acquisition of real
property by the city, real property in the city for the purposes of the
corporation or for the widening of existing roads, streets, avenues or
highways or for new roads, streets, avenues or highways connecting with
a health facility constructed or otherwise acquired by the corporation,
or partly for such purposes and partly for other city purposes. For said
purposes, the city may close roads, streets, avenues or highways as may
be necessary; provided, however, that no state highway or way shall be
closed without the consent of the state commissioner of transportation.
3. Subject to the approval of the board of estimate of the city,
contracts may be entered into between the corporation and the city
providing for the property to be acquired by the city and so conveyed,

the roads, streets, avenues, or highways to be closed by the city, and
the amounts, terms and conditions of payments, if any, to be made by the
corporation. Any such contract between the city and the corporation may
be pledged by the corporation to secure its bonds, notes or other
obligations and may not be modified thereafter except as provided by the
terms of the pledge.
4. If the corporation determines that the use and occupancy of any
real property is no longer required for its corporate purposes and
powers, then if such real property was acquired at the cost and expense
of the city, the corporation shall, subject to the provisions of section
five, paragraph six, have power to surrender its use and occupancy to
the city. The corporation shall, subject to the provisions of section
five, paragraph six, have power to sell, lease or otherwise dispose of
said real property at public or private sale or as part of a contract,
lease or other agreement entered into under the terms of this act and to
use the proceeds derived from the sale, lease or other disposition
thereof for its corporate purposes.
§ 7-a. Relationship with the New York state and the housing finance
agency health and mental hygiene facilities improvement corporation.
Notwithstanding any provision of this act to the contrary:
(a) The city shall not sell, assign, transfer or sublet to the
corporation any health facility, as defined in section three of the
health and mental hygiene facilities improvement act, located at or
related to or constituting a hospital, as defined in article
twenty-eight of the public health law, if such health facility is
subject to any lease, sublease or other agreement between the city and
the New York state housing finance agency, provided however, nothing
herein shall prohibit the licensing or other operating agreement for the
health facility so long as the city does not surrender possession
thereof and that the city continues to remain liable and obligated to
observe and perform each and every covenant, agreement, obligation and
undertaking required to be observed and performed by the city pursuant
to the provisions of any lease, sublease or other agreement between the
city and the New York state housing finance agency.
(b) The corporation is authorized to sell or lease to the agency any
real property for the purpose of causing health facilities to be
constructed, reconstructed, rehabilitated or improved by the health and
mental hygiene facilities improvement corporation and the New York state
housing finance agency pursuant to a lease, sublease or other agreement
between the city and the New York state housing finance agency as
provided in the health and mental hygiene facilities improvement act and
article three of the private housing finance law.
§ 8. Contracts. 1. Any contract let by the corporation for the
construction of a health facility shall be publicly let to the lowest
responsible bidder in the manner provided by, and in conformity with,
the provisions of article five-a of the general municipal law, except
that where the cost of such a contract does not exceed ten thousand
dollars such contract may be entered into without public letting;
provided, however, that if the corporation determines that in a special
case or cases it would not be in the public interest to comply with the
terms of this section and the board of estimate of the city, by
resolution, rule or regulation adopted by the vote of two-thirds of the
whole number of votes authorized to be cast by all of the members of the
board of estimate, concurs in such determination, then such a contract
may be entered into by the corporation without public letting as
authorized by the said resolution, rules or regulations. Notwithstanding
the provisions of this subdivision one, if the corporation determines
that circumstances exist whereby it would be detrimental to or

impracticable for the corporation to comply with the public letting
requirements of this section concerning a change order then such a
change order may be let by the corporation without public letting. For
the purposes of article five-a of the general municipal law, the
corporation shall be deemed to be a "political subdivision".
2. The corporation may make rules and regulations governing the
qualifications of bidders entering into such a contract where the cost
of such a contract exceeds twenty-five thousand dollars. The bidding may
be restricted to those who shall have qualified prior to the receipt of
bids according to standards fixed by the corporation; provided, however,
that notice or notices for the submission of qualifications shall be
published in the official publication of the city and in an appropriate
trade journal published in the city, or if no such trade journal exists,
in a newspaper with a general circulation in the city, at least once,
not less than ten days prior to the date fixed for the filing of
qualifications.
3. The corporation, in its discretion, may assign the separate
contracts awarded pursuant to section one hundred one of the general
municipal law to the general contractor for supervision. Each contract
for the construction of a health facility may include a provision that
the architect who designed the facility, or the architect or engineer
retained or employed specifically for the purpose of supervision, shall
supervise the work to be performed through to completion and shall see
to it that the materials furnished and the work performed are in
accordance with the drawings, plans, specifications and contracts
therefor.
4. All bids received for the letting of any contract pursuant to this
section shall be submitted to the corporation and shall be publicly
opened and read by the corporation. Nothing in this section shall be
construed to limit the power of the corporation to do any construction
by or through its own officers, agents or employees.
5. (a) In addition to any other bond or bonds that may be required by
law for the completion of a health facility, or in the absence of any
such requirement, the corporation shall require, prior to the approval
of any contract or agreement providing for the construction of a health
facility, that the general contractor furnish a bond guaranteeing prompt
payment of moneys due to all persons furnishing labor or materials to or
for the general contractor or to his subcontractors in the prosecution
of the entire work provided for in such agreement. A copy of such
payment bond shall be filed in the offices of the corporation and shall
be open to public inspection.
(b) Every person who has furnished labor or material, to or for the
general contractor or to a sub-contractor in the prosecution of the work
provided for in the contract or other agreement of the corporation with
the general contractor and who has not been paid in full therefor before
the expiration of a period of ninety days after the day on which the
last of the labor was performed or material was furnished by him for
which the claim is made, shall have the right to sue on such payment
bond in his own name for the amount, or the balance thereof, unpaid at
the time of commencement of the action; provided, however, that a person
having a direct contractual relationship with a sub-contractor of the
general contractor furnishing the payment bond but no contractual
relationship express or implied with such general contractor shall not
have a right of action upon the bond unless he shall have given written
notice to such general contractor within ninety days from the date on
which the last of the labor was performed or the last of the material
was furnished, for which his claim is made, stating with substantial
accuracy the amount claimed and the name of the party to whom the

material was furnished or for whom the labor was performed. The notice
shall be served by delivering the same personally to the general
contractor or by mailing the same by registered mail, postage pre-paid,
in an envelope addressed to the general contractor at any place where he
maintains an office or conducts his business or at his residence.
6. Any contracts for design, construction, services and materials
entered into by the corporation pursuant to this act shall be deemed
state contracts within the meaning of that term as set forth in article
fifteen-A of the executive law, and the corporation shall be deemed, for
the purposes of this act, a contracting agency as that term is used in
article fifteen-A of the executive law.
§ 9. Personnel administration; collective bargaining; pension and
retirement benefits; article fourteen civil service law; paragraph two
hundred twenty labor law; personnel review board. 1. The corporation
shall, upon ten days written notice appropriately posted in the health
facilities, promulgate rules and regulations consistent with civil
service law with respect to policies, practices, procedures relating to
position classifications, title structure, class specifications,
examinations, appointments, promotions, voluntary demotions, transfers,
re-instatements, procedures relating to abolition or reduction in
positions, for personnel employed by the corporation pursuant to section
five, subdivision twelve of this act, subject to the following
exception. The New York city health and hospitals corporation shall
employ peace officers appointed pursuant to this subdivision to perform
the patrol, investigation, and maintenance of the peace duties of
special officer, senior special officer and hospital security officer;
provided however that nothing in this subdivision shall prohibit
managerial, supervisory, or state licensed or certified professional
employees of the corporation from performing these duties where they are
incidental to their usual duties, or shall prohibit police officers
employed by the city of New York from performing these duties.
Until the corporation adopts by-laws, rules and regulations relating
to personnel administration the corporation shall administer its
personnel pursuant to the civil service law, the rules and regulations,
time and leave rules classification and compensation schedules, class
specifications and personnel orders of the New York city department of
personnel and civil service commission, and all other applicable
provisions of local or general laws relating to civil service personnel.
2. (a) Every employee who was an employee of the administration, or
any constituent agency or department thereof, shall be automatically
appointed and transferred to the corporation in the same or equivalent
classification and position he held at the time of such transfer and for
such purposes the corporation shall be deemed the successor to the city
as a public employer of such employee. All officers or employees
transferred to the corporation who had civil service status at the time
of such transfer shall retain such status for the purpose of transfer,
reassignment or promotion to any position in a city department or
agency.
(b) (i) It is hereby found that the continued, uninterrupted, adequate
and efficient administration of health and medical services is necessary
for the general welfare of the people of the city of New York. It is
further found that with respect to certain services provided for the
corporation by the voluntary hospitals and medical schools in the
municipal hospitals of the city of New York, such administration
properly requires that employees performing those services be employed
by the corporation. For the continued performance of those services
assumed by the corporation, the continued employment of personnel
possessing ability, skill, experience and knowledge is essential. A

requirement of competitive examination for the appointment of any such
employee to the corporation would seriously interrupt the continuous
provision of health and medical services and is thus impractical. It is
thereby declared to be in the public interest that because of their
knowledge, training, experience and efficiency, those employees of the
voluntary hospitals and medical schools be continued in the employment
of the corporation without competitive examination, and shall be
afforded permanent competitive status.
(ii) Notwithstanding any provision to the contrary contained in any
general, special or local law, those employees of the voluntary
hospitals and medical schools in the city of New York performing
services which are assumed by the corporation shall be transferred to
and continued in employment by the corporation in similar or
corresponding positions, which shall have been classified by the
corporation in accordance with the provisions of subdivision one of this
section. Such employees shall continue to hold their positions without
further examination and shall have all the rights and privileges of the
jurisdictional class to which such positions may be allocated; provided,
however, that after such transfer of functions and activities to the
corporation all new positions thereafter created and vacancies occurring
in positions already established shall be filled in accordance with the
provisions of subdivision one of this section.
3. The corporation shall recognize the certified employee
organizations and bargaining units of such employees, and the
corporation shall assume and be bound by all existing collective
bargaining agreements with such employee organizations. All existing
terms and conditions of employment of the corporation shall remain in
effect until modified or changed in accordance with the procedures
provided herein.
4. Any officer or employee of the corporation who heretofore acquired
or shall hereafter acquire such position status by transfer and who at
the time of such transfer was a member of the New York city employees'
retirement system shall, with respect to such retirement system,
continue to have the rights, privileges, obligations and status which
would have applied to him if he had continued to hold the office or
position which entitled him to such membership prior to such transfer.
Employment by the corporation shall constitute city-service for the
purposes of title B of chapter three of the administrative code of the
city.
5. The corporation, its officers and employees, shall be subject to
article fourteen of the civil service law and for all such purposes the
corporation shall be deemed "public employees", provided, however, that
chapter fifty-four of the New York City Charter and Administrative Code
and Executive Order No. 52 dated September 29, 1967, promulgated by the
mayor of the city of New York, shall apply in all respects to the
corporation, its officers and employees except that paragraph seven and
paragraph eight of said executive order shall not be applicable to the
corporation, its officers and employees. Except as otherwise provided in
collective bargaining agreements the corporation shall establish general
and special grievances procedures which shall provide for final and
binding arbitration of grievances as defined in chapter fifty-four of
the administrative code of the city of New York. All general and special
grievance procedures shall be reviewed by the personnel review board
established under the terms of this act.
6. Any employee of the corporation shall be authorized to institute a
proceeding against the corporation in accordance with the provisions of
article seventy-eight of the civil practice law and rules, and for the

purposes hereof the corporation shall be deemed an administrative body
or agency within the meaning of the said article seventy-eight.
7. Nothing herein contained shall supersede, impair or diminish the
rights of any officer or employee of the corporation under or pursuant
to section two hundred twenty of the labor law, and for the purposes
hereof the fiscal officer of the corporation shall be the comptroller of
the city of New York.
8. (a) For a period of five years after the creation of the
corporation, the corporation shall, in its by-laws, provide for the
creation of a personnel review board, consisting of three members who
shall be appointed for annual terms as follows: one member designated by
the corporation; one member designated by the municipal labor committee
established pursuant to section 1173-9.0 of the New York city
administrative code, and one member, who shall be the chairman,
designated by the other two members of the personnel review board. After
the aforesaid period of five years, all vacancies in the personnel
review board shall be filled by appointment by the mayor. The chairman
of the personnel review board shall receive a per diem fee of not less
than one hundred fifty dollars and the other two members shall each
receive a per diem fee of not less than one hundred twenty-five dollars,
when actually rendering services, in addition to actual and necessary
expenses incurred in the performance of their duties.
(b) Except for matters which are subject to collective bargaining
agreement, the personnel review board shall have the right to review, at
the instance of any aggrieved employee of the corporation or any
certified employee organization respresenting such employee, any by-law,
rule or regulation promulgated pursuant to subdivision one of this
section nine or any action of the corporation related thereto and upon
such review to direct the corporation to take or refrain from such
action as the personnel review board shall deem proper except, however,
nothing contained in this section nine shall abridge the right of the
corporation to exercise any managerial prerogatives which were reserved
by the city in section five-c of the aforesaid mayor executive order
number fifty-two.
The personnel review board shall, when requested by the board of
directors, conduct any special reviews, studies, investigations or
analyses of the administration of personnel in the corporation.
§ 10. Officers and employees not to be interested in transactions. It
shall be a misdemeanor for a director of the corporation or an officer,
agent, executive or other employee retained, employed or appointed by
the corporation to be in any manner or way interested, directly or
indirectly, as principal, surety or otherwise, in a contract, the
expense or consideration whereof is payable out of funds of the
corporation.
§ 11. Moneys of the corporation. 1. Any moneys of the corporation,
from whatever source derived, shall, except as otherwise provided in
this act, be deposited as soon as practicable in banks or trust
companies organized under the laws of the state or national banking
association doing business in the city designated by the board. The said
moneys of the corporation shall be paid out on checks signed by the
chairman of the board or by such other person or persons as the board
shall authorize. All deposits of such moneys shall, if required by the
board, be secured by obligations of the United States or of the state or
of the city of a market value equal at all times to the amount of the
deposits and all banks and trust companies are authorized to give such
security for such deposits.
2. Subject to the terms of any contract, lease or other agreement
undertaken by the corporation, any such moneys of the corporation not

required for immediate use may, at the discretion of the board, be
invested by the corporation in obligations of the United States, the
state or the city or in obligations the principal and interest of which
are guaranteed by the United States, the state or the city.
3. The comptroller, or his legally authorized representative, is
hereby authorized to and shall examine annually the accounts and books
of the corporation including its receipts, disbursements, contracts,
reserves, sinking funds, investments and any other matters relating to
its financial operation and standing.
§ 12. Issuance of bonds and notes by the corporation. 1. Subject to
the provisions of section thirteen, the corporation shall have the power
and is hereby authorized, from time to time, to issue negotiable bonds
and notes in such aggregate principal amounts as shall, in the opinion
of the corporation, be necessary together with such other moneys or
funds as may be available to the corporation, to provide funds
sufficient to enable the corporation to carry out its corporate
purposes, including site acquisition, construction, maintenance and
repair of health facilities, the payment of interest on and amortization
of, or payment of such bonds and notes, the establishment of reserves or
sinking funds to secure such bonds and notes, and all other expenditures
of the corporation incident to and necessary or desirable for the
carrying out of its corporate purposes and the exercise of its powers.
Except as may otherwise be expressly provided by the corporation, every
issue of its bonds and notes shall be general obligations of the
corporation payable out of any revenues or moneys of the corporation,
subject only to any agreements with the holders of particular bonds or
notes pledging any particular revenues or moneys. Whether or not the
bonds or notes are of such form and character as to be negotiable
instruments under the provisions of article eight of the uniform
commercial code, the bonds and notes shall be and are hereby made
negotiable instruments within the meaning of and for all the purposes of
article eight of the uniform commercial code, subject only to the
provisions of the bonds or notes for registration.
2. The corporation shall have the power and is hereby authorized, from
time to time, to issue renewal notes, and to refund any bonds by the
issuance of new bonds, whether the bonds to be refunded have or have not
matured, and to issue bonds to pay notes or partly to refund bonds then
outstanding and partly for any of its corporate purposes.
3. The said bonds and notes shall be authorized by resolution or
resolutions of the board, and shall be dated and shall mature as such
resolution or resolutions may provide, except that no note or any
renewal thereof shall mature more than five years after the date of
issue of the original note and no bond shall mature more than forty
years from the date of its issue. Bonds and notes shall bear interest at
such rate or rates, be in such denominations, be in such form, either
coupon or registered, carry such registration privileges, be executed in
such manner, be payable in such medium of payment, at such place or
places, and be subject to such terms of redemption as such resolution or
resolutions may provide. Bonds and notes may be sold by the corporation
at public or private sale at such price or prices as the corporation
shall determine; provided, however, that no such bonds or notes may be
sold at a private sale unless the sale and the terms thereof have been
approved by the comptroller in writing.
4. Any resolution or resolutions authorizing any bonds or notes may
contain provisions, which shall be a part of the contract or contracts
with the holders thereof, as to
(a) pledging all or any part of the moneys or revenues or other assets
of the corporation to secure the payment of such bonds or notes,

including, but not limited to, fees, rentals and charges for the use of
a health facility and the proceeds of any grant in aid of the
corporation received from any public or private source and contracts
authorized by section seven of this act;
(b) the setting aside of reserves or sinking funds and the regulation
or disposition thereof;
(c) limitations on the purposes to which the proceeds of the sale of
any issue of bonds or notes then or thereafter to be issued may be
applied and pledging such proceeds to secure the payment of the bonds or
notes or any issue thereof;
(d) limitations on the issuance of additional bonds or notes; the
terms upon which such additional bonds or notes may be issued and
secured; the refunding of outstanding or other bonds or notes;
(e) the procedures, if any, by which the terms of any contract with
the holders of bonds or notes may be extended or abrogated, the amount
of bonds or notes the holders of which must consent thereto and the
manner in which such consent may be given;
(f) the creation of special funds into which any moneys or revenues of
the corporation may be deposited;
(g) limitations on the amounts that the corporation may expend for
administrative or other expenses thereof;
(h) vesting in a trustee or trustees such properties, rights, powers
and duties in trust as the corporation may determine which may include
any or all of the rights, powers and duties of the trustees appointed by
the holders of the bonds or notes pursuant to section seventeen of this
act and limiting or abrogating the right of the holders of the bonds or
notes to appoint a trustee under such section or limiting the rights,
duties and powers of such trustee;
(i) defining the acts or omissions to act which shall constitute a
default in the obligations and duties of the corporation to the holders
of the bonds or notes and providing for the rights and remedies of the
holders of the bonds or notes in the event of such default, including as
a matter of right the appointment of a receiver; providing, however,
that such rights and remedies shall not be inconsistent with the general
laws of the state and the other provisions of this act;
(j) any other matters, of like or different character, which in any
way affect the security or protection of the holders of the bonds or
notes.
5. Any pledge of revenues, moneys or property made by the corporation
shall be valid and binding from the time when the pledge is made; the
revenues, moneys or property so pledged and thereafter received by the
corporation shall immediately be subject to the lien of such pledge
without any physical delivery thereof or further act, and the lien of
any such pledge shall be valid and binding as against all parties having
claims of any kind in tort, contract or otherwise against the
corporation irrespective of whether such parties have notice thereof.
Neither the resolution or resolutions nor any other instrument by which
a pledge is created need be recorded.
6. Neither the directors of the corporation nor any other person
executing such bonds or notes shall be subject to any personal liability
or accountability by reason of the issuance thereof.
7. The corporation, subject to such agreements with the holders of
bonds or notes as may then exist, shall have the powers out of any funds
available therefor to purchase any bonds or notes issued by it at a
price not exceeding the redemption price thereof which price shall be
(a) if the bonds or notes are then redeemable, the redemption price
then applicable plus accrued interest to the next interest payment date
thereon, or
(b) if the bonds or notes are not then redeemable, the redemption
price applicable on the first date after such purchase upon which the
bonds or notes become subject to redemption plus accrued interest to
such date. All bonds or notes so purchased shall be cancelled.
§ 13. Reserve fund. 1. The corporation shall create and establish a
special fund (herein referred to as the capital reserve fund), and shall
pay into such capital reserve fund
(a) any moneys appropriated and made available by the state or city
for the purpose of such capital reserve fund,
(b) any proceeds of sale of bonds or notes to the extent provided in
the resolution or resolutions of the corporation authorizing the
issuance thereof, and
(c) any other moneys which may be made available to the corporation
for the purpose of such capital reserve fund from any other source or
sources. All moneys held in the capital reserve fund, except as
hereinafter provided, shall be used solely for the payment of the
principal of bonds of the corporation, the payment of interest on such
bonds, or the payment of any redemption premium required to be paid when
such bonds are redeemed prior to maturity; provided, however, that
moneys in such capital reserve fund shall not be withdrawn therefrom at
any time in such amount as would reduce the amount of such fund to less
than the maximum amount of principal and interest maturing and becoming
due in any succeeding fiscal year of the corporation on all bonds of the
corporation then outstanding, except for the purpose of paying principal
of and interest on such bonds of the corporation maturing and becoming
due and for the payment of which other moneys of the corporation are not
available. Any income or interest earned by, or increment to, the
capital reserve fund due to the investment thereof may be transferred to
other funds or accounts to the extent it does not reduce the amount of
the capital reserve fund below the maximum amount of principal and
interest maturing and become due in any such succeeding fiscal year on
all bonds of the corporation then outstanding.
2. The corporation shall not issue bonds at any time if the maximum
amount of principal and interest maturing and becoming due in a
succeeding fiscal year of the corporation on such bonds then to be
issued and on all other bonds of the corporation then outstanding will
exceed the amount of the capital reserve fund at the time of issuance
unless the corporation, at the time of issuance of such bonds, shall
deposit in the capital reserve fund from the proceeds of the bonds so to
be issued, or otherwise, an amount which, together with the amount then
in such fund, will not be less than the maximum amount of principal and
interest maturing and becoming due in any such succeeding fiscal year on
such bonds then to be issued and on all other bonds of the corporation
then outstanding.
3. For the purposes of computing the amount of the capital reserve
fund, any securities in which any portion of such fund is invested shall
be valued at the par value thereof or at the cost thereof to the
corporation if such cost was less than said par value.
4. In order to assure the continued operation and solvency of the
corporation for the carrying out of its public purposes as provided in
this act, provision is made in subdivision one of this section for the
accumulation in the capital reserve fund of an amount equal to the
maximum amount of principal and interest maturing and becoming due in
any succeeding fiscal year of the corporation on all bonds of the
corporation then outstanding. In order further to assure such
maintenance of the capital reserve fund, the chairman of the corporation
shall annually request from the city to be paid over to the corporation,
for deposit in the capital reserve fund, such sum, if any, as shall be

certified by the chairman of the corporation to the mayor as necessary
to restore the capital reserve fund to an amount equal to the maximum
amount of principal and interest maturing and becoming due in any
succeeding fiscal year of the corporation on all of the bonds of the
corporation then outstanding; provided, however, that such sum shall
have been first appropriated by the city or shall otherwise have been
made lawfully available for such purpose. The chairman of the
corporation shall, on or before the fifteenth day of February in each
year, make and deliver to the mayor his certificate stating the amount,
if any, needed to restore the capital reserve fund to the amount
aforesaid and the amount so stated, if any, shall be paid to the
corporation by the city. Notwithstanding any of the provisions of this
act, in the event of the failure or inability of the city to pay over
the stated amount to the corporation on or before the first day of
August of the same year, the chairman of the corporation shall then
forthwith make and deliver to the comptroller and to the director of
management and budget a further certificate restating the amount so
required and such amount shall then be paid over to the corporation,
upon the warrant of the comptroller on vouchers certified as correct by
the director of management and budget, out of the general fund of the
city.
§ 14. Agreement of the state. The state of New York does pledge to and
agree with the holders of any and all bonds and notes of the corporation
that the state will not limit or alter the rights hereby vested in the
corporation to fulfill the terms of any agreements made with the said
holders, or in any way impair the rights and remedies of such holders
until the bonds and notes, together with the interest thereon, interest
on any unpaid installments of interest, and all costs and expenses in
connection with any action or proceeding by or on behalf of such
holders, are fully met and discharged. The corporation is authorized to
include this pledge and agreement of the state in any agreement with the
holders of such bonds or notes.
§ 15. State and city not liable on bonds and notes. The bonds, notes
or other obligations of the corporation shall not be a debt of either
the state of New York or of the city of New York, and neither the state
nor the city shall be liable thereon, nor shall they be payable out of
any funds other than those of the corporation.
§ 16. City's right to require redemption of bonds. Notwithstanding and
in addition to any provisions for the redemption of bonds which may be
contained in any contract with the holders of the bonds, the city may,
upon furnishing sufficient funds therefor, require the corporation to
redeem, prior to maturity, as a whole, any issue of bonds on any
interest payment date not less than twenty years after the date of the
bonds of such issue at one hundred five per centum of their face value
and accrued interest or at such lower redemption price as may be
provided in the bonds in case of the redemption thereof as a whole on
the redemption date. Notice of such redemption shall be published in at
least two newspapers published and circulating in the city of New York
at least twice, the first publication to be at least thirty days before
the date of redemption.
§ 17. Remedies of holders of bonds and notes. 1. In the event that the
corporation shall default in the payment of the principal of or interest
on any issue of bonds or notes after the same shall become due, whether
at maturity or upon call for redemption, and such default shall continue
for a period of thirty days, or in the event that the corporation shall
fail or refuse to comply with the provisions of this title, or shall
default in any agreement made with the holders of any issue of the bonds
or notes, the holders of twenty-five per centum in aggregate principal

amount of the bonds or notes of such issue then outstanding, by
instrument or instruments filed in the office of the city clerk of the
city and approved or acknowledged in the same manner as a deed to be
recorded, may appoint a trustee to represent the holders of such bonds
or notes for the purposes herein provided.
2. Such trustee may, and upon written request of the holders of
twenty-five per centum in principal amount of such bonds or notes then
outstanding shall, in his or its own name:
(a) by suit, action or special proceedings enforce all rights of the
holders of the bonds or notes, including the right to require the
corporation to carry out any agreements with such holders and to perform
its duties under this title;
(b) bring suit upon such bonds or notes;
(c) by action or suit, require the corporation to account as if it
were the trustee of an express trust for the holders of such bonds or
notes;
(d) by action or suit, enjoin any acts or things which may be unlawful
or in violation of the rights of the holders of such bonds or notes;
(e) declare all such bonds or notes due and payable, and if all
defaults shall be made good, then, with the consent of the holders of
twenty-five per centum of the principal amount of such bonds or notes
then outstanding, annul such declaration and its consequences.
3. The supreme court shall have jurisdiction of any suit, action or
proceedings by the trustee on behalf of such holders of bonds or notes.
The venue of any such suit, action or proceeding shall be laid in the
county of New York.
4. Before declaring the principal of bonds or notes due and payable,
the trustee shall first give thirty days' notice in writing to the
corporation.
5. Any such trustee, whether or not all bonds or notes have been
declared due and payable, shall be entitled as of right to the
appointment of a receiver who may enter and take possession of a health
facility or any part or parts thereof and maintain and repair the same
and collect and receive all fees, rentals and charges or other revenues
thereafter arising therefrom in the same manner as the corporation
itself might do and shall deposit all such moneys in a separate account
and apply the same in such manner as the court shall direct. In any
suit, action or proceeding by the trustee, the fees, including counsel
fees, and expenses of the trustee and of the receiver, if any, shall
constitute taxable disbursements and all costs and disbursements allowed
by the court shall be a first charge on any rentals, charges or other
revenues derived from a health facility.
6. Such trustee shall in addition to the foregoing have and possess
all the powers necessary or appropriate for the exercise of any function
specifically set forth herein or incident to the general representation
of the holders of such bonds or notes in the enforcement and protection
of their rights.
§ 18. Assistance to the corporation. The state or city shall be
empowered to make grants of money or property to the corporation for the
purpose of enabling it to carry out its corporate purposes and for the
exercise of its powers, including, but not limited to, deposits to the
capital reserve fund to assist the corporation in maintaining the said
capital reserve fund in the amounts required by section thirteen.
Nothing in this section shall be interpreted as implying that in the
absence thereof the state or city would not be empowered to make such
grants to the corporation.
§ 19. Exemption from taxation. 1. The moneys and property of the
corporation and any property under its jurisdiction, control or

supervision, and all of its activities and operations shall be exempt
from taxation.
2. The state of New York covenants with the purchasers of and with all
subsequent holders and transferees of bonds and notes issued by the
corporation pursuant to this act, in consideration of the acceptance of
and payment for the said bonds and notes, that the said bonds and notes
and the income therefrom, and all moneys, funds and revenue pledged to
pay or secure the payment of such bonds and notes shall at all time be
free from taxation, except for estate and gift taxes and taxes on
transfers.
§ 20. Actions by and against the corporation. 1. In every action
against the corporation for damages for injuries to real or personal
property, or for the destruction thereof, or for personal injuries or
death, the complaint shall contain an allegation that at least thirty
days have elapsed since the demand, claim or claims upon which such
action is founded were presented to a director or officer of the
corporation and that the corporation has neglected or refused to make an
adjustment or payment thereof for thirty days after such presentment, or
if the demand, claim or claims upon which such action is founded was
presented to a director or officer of the corporation by service upon
the secretary of state pursuant to section fifty-three of the general
municipal law, that at least forty days have elapsed since such service
was made, and that the corporation has neglected or refused to make an
adjustment or payment thereof for forty days after such presentment.
2. Except in an action for wrongful death, an action against the
corporation for damages for injuries to real or personal property, or
for the destruction thereof, or for personal injuries, alleged to have
been sustained, shall not be commenced more than one year and ninety
days after the cause of action thereof shall have accrued, nor unless a
notice of intention to commence such action and of the time when and the
place where the tort occurred and the injuries or damage, were
sustained, together with a verified statement showing in detail the
property alleged to have been damaged or destroyed and the value
thereof, or the personal injuries alleged to have been sustained and by
whom, shall have been filed with a director or officer of the
corporation within ninety days after such cause of action shall have
accrued. All the provisions of section fifty-e of the general municipal
law shall apply to such notice. The corporation may require any claimant
hereunder to be examined as provided in section fifty-h of the general
municipal law, and all the provisions of such section shall apply to
such examinations. An action against the corporation for wrongful death
shall be commenced in accordance with the notice of claim and time
limitation provisions of title eleven of article nine of the public
authorities law.
3. All actions against the corporation of whatever nature shall be
brought in the city of New York, in the county within the city in which
the cause of action arose, or if it arose outside of the city, in the
county of New York.
4. The corporation may require any person presenting for settlement an
account or claim for any cause against the corporation, except as to
examination on claims as set forth in subdivision two of this section,
to be sworn before an officer, counsel or an attorney of the
corporation, touching such account or claim, and when so sworn, to
answer orally as to any facts relative to the adjustment of such account
or claim. The corporation may settle or adjust all claims in favor of or
against the corporation, and all accounts in which the corporation is
concerned as debtor or creditor; but in adjusting and settling such

claims, it shall, as far as practicable, be governed by the rules of law
and principles of equity which prevail in courts of justice.
5. Except as hereinafter provided in this subdivision, the rate of
interest to be paid by the corporation upon any judgment or accrued
claim against the corporation shall not exceed three per centum per
annum. The rate of interest to be paid upon any judgment or accrued
claim against the corporation arising out of an action to recover
damages for wrongful death shall not exceed six per centum per annum.
6. The corporation shall be an "agency" for the purposes of section
fifty-k of the general municipal law and its officers and employees
shall be entitled to legal representation and indemnification pursuant
to the provisions of and subject to the conditions, procedures and
limitations contained in such section, except that any judgment or
settlement pursuant to this section shall be payable from the monies of
the corporation.
§ 21. Bonds and notes as legal investments. The bonds and notes of the
corporation are hereby made securities in which all public officers and
bodies of this state and all municipalities and municipal subdivisions,
all insurance companies and associations, and other persons carrying on
an insurance business, all banks, bankers, trust companies, savings
banks and savings associations, including savings and loan associations,
building and loan associations, investment companies and other persons
carrying on a banking business, all administrators, guardians,
executors, trustees and other fiduciaries, and all other persons
whatsoever who are now or may hereafter be authorized to invest in bonds
or in other obligations of the state, may properly and legally invest
funds, including capital, in their control or belonging to them.
§ 22. Annual and special reports. 1. Within one hundred twenty days
after the end of the fiscal year of the corporation, the directors
thereof shall submit to the mayor, the comptroller, the city council of
the city of New York and the state comptroller a complete and detailed
report setting forth:
(a) its operations and accomplishments during such fiscal year;
(b) its receipts and expenditures during such fiscal year in
accordance with categories or classifications established by the
corporation for its own operating and capital outlay purposes;
(c) its assets and liabilities at the end of such fiscal year
including a schedule of its bonds, notes or other obligations and the
status of reserves, depreciation, special, sinking or other funds;
(d) details of health facilities being planned or in the process of
being constructed or otherwise acquired and health facilities that have
been constructed or acquired;
(e) the performance of the corporation in completing construction by
designated completion dates and within cost estimates;
(f) the names, addresses and qualifications of architects, engineers
or other consultants retained by the corporation and a statement of any
amounts paid or to be paid to such persons for their services;
(g) the details of any leases or sales or other dispositions of health
facilities including the fees, rental and charges received or to be
received therefrom;
(h) such other information relating to the operations of the
corporation as shall be deemed pertinent by the directors, the mayor,
the comptroller, the city council of the city of New York or the state
comptroller.
2. The chairman of the corporation, on behalf of the directors
thereof, on or before December first of each year, shall prepare and
submit to the mayor, a complete and detailed special report setting
forth:
(a) an itemized budget of the expected receipts and expenditures of
the corporation during the next fiscal year; and
(b) information as to the issuance or payment, or provision therefor,
of bonds, notes and other obligations of the corporation during such
next fiscal year.
§ 23. Act not affected if in part unconstitutional or ineffective. If
any section, subdivision, paragraph, sentence, clause or provision of
this act shall be unconstitutional or ineffective, in whole or in part,
to the extent that it is not unconstitutional or ineffective it shall be
vaild and effective and no other section, subdivision, paragraph,
sentence, clause or provision shall on account thereof be deemed invalid
or ineffective.
§ 24. Inconsistent provisions of other laws superseded. Insofar as the
provisions of this act are inconsistent with the provisions of any other
law, general, special or local, the provisions of this act shall be
controlling, provided, however, that nothing therein shall be deemed to
prevent the city from constructing a health facility by the issuance of
bonds or notes or other obligations pursuant to the local finance law,
or from owning, holding, operating or using a health facility or from
providing health and medical services.
§ 25. Termination of the corporation. The corporation and its
corporate existence shall continue until terminated by law; provided,
however, that no such law shall take effect so long as the corporation
shall have bonds, notes or other obligations outstanding. Upon
termination of the existence of the corporation all of its rights,
property, assets and funds shall thereupon vest in and be possessed by
the city.

Structure New York Laws