§ 9001 Created; purpose.
There is hereby created a special fund of the State designated the "Health Facilities Subsidy Fund." The Fund is created to provide a source of financial assistance to health facilities corporations in connection with loans obtained with the assistance of the Delaware Health Facilities Authority for eligible projects.
§ 9002 Definitions.
As used in this chapter, the following terms shall have the following meanings:
(1) "Board" shall mean the State Board of Health and any successor to the board exercising the powers granted the Board by this chapter.
(2) "Eligible project" shall mean any health facility which has been approved by the Board pursuant to this chapter, or any refinancing of bonds or notes issued by the Delaware Health Facilities Authority for the benefit of a health facility.
(3) "Health facilities corporation" shall mean a nonprofit corporation organized and existing under the laws of the State for the purpose of owning and operating 1 or more health facilities.
(4) "Health facility" shall mean a facility, located in the State, owned and operated by a health facilities corporation, providing general medical, surgical and emergency treatment to the public.
(5) "Issuing officers" shall mean the Governor, the Secretary of State and the State Treasurer as defined in § 7401 of Title 29.
(6) "Subsidy contract" shall mean a contract by the State, approved by the issuing officers, providing a subsidy to a health facilities corporation.
§ 9003 Subsidy contract — Application.
A written application by a health facilities corporation for a subsidy contract shall be submitted to the Department. The Department or, in the discretion of the Department, the Health Facilities Planning Council, Inc., shall review the application and make a recommendation to the issuing officers to approve or disapprove a subsidy contract. No subsidy contract shall be approved by the issuing officers without the favorable recommendation of the Department.
§ 9004 Subsidy contract — Department determination of eligibility.
The Department shall consider each application for a subsidy contract. The Department shall either recommend or disapprove each such application and advise the issuing officers of its decision. No favorable recommendation shall be made by the Department unless the Department shall find and determine that:
(1) The applicant is a health facilities corporation;
(2) The health facilities corporation is in sound financial condition and is reasonably expected to remain in sound financial condition during the term of the subsidy contract;
(3) There exists a need for the health facility for which the subsidy contract is sought, taking into account the existing and planned health facilities in the State; and
(4) The health facilities corporation has a managerial, administrative and medical staff that has conformed, or, in the case of a health facilities corporation that has not commenced operation of a health facility, is reasonably expected to conform to standards of professional integrity and ability that may reasonably be required by the State.
The Department may obtain assistance from other State agencies, from the federal government and from private sources in making the foregoing determinations. The Department may also employ experts to assist it.
§ 9005 Subsidy contract — Authorization; conditions for payments.
(a) The issuing officers, upon receipt of a written favorable recommendation from the Department, shall determine the amount, terms, form and content of the subsidy contract. In making their determination, the issuing officers shall not approve a subsidy contract unless the reasonably expected cost of the eligible project, as determined by the Department, does not exceed the sum of $5,000,000; provided, however, that if the cost of such eligible project does exceed this amount, the issuing officers shall approve a subsidy contract for the first $5,000,000 of cost of the eligible project.
(b) The subsidy contract shall provide for payments on an annual basis in an amount not to exceed the difference between the yield on the loan obtained through the Delaware Health Facilities Authority and 25 basis points above the yield on the immediately preceding issue of state general obligation bonds. The issuing officers may, however, take into account in determining the yield, the amount of loan closing costs, if any, incurred by the health facilities corporation that could have been avoided if the loan were being made by the State. The determinations of yield by the issuing officers shall be conclusive.
§ 9006 Subsidy contract — Pledge of support; terms; records; release of mortgages securing outstanding loans.
A subsidy contract shall be entered into by the issuing officers on behalf of the State. The subsidy contract shall contain a pledge by the State to make payments, in the amount provided by the subsidy contract, from the Health Facilities Subsidy Fund, to the health facilities corporation from money on deposit in such Fund. No subsidy contract shall be entered into by the issuing officers unless they reasonably determine that the amounts from interest earned or profit realized in the Fund will be available to meet annual payments under the subsidy contract as they become due and payable. The issuing officers shall maintain records of all payments made and all payments owing under subsidy contracts. The issuing officers shall have the power to grant releases or satisfactions of mortgages granted to secure loans made from the Health Facility Construction Fund, provided that the Governor shall execute such release or satisfaction.
§ 9007 Repayment of outstanding loans.
Repayment of all outstanding loans made from the "Health Facility Construction Fund" (established pursuant to 59 Del. Laws, c. 455), or predecessor funds, shall continue to be made to the Board. The Board shall inform the issuing officers of all payments received and shall provide the issuing officers with other information required to carry out the purposes of this chapter. Repayments of interest on such loans shall be immediately transferred to the General Fund of the State. Principal payments of such loans shall be deposited in the Health Facilities Subsidy Fund until the principal in such Fund, to include the accrued earnings credited to principal as provided in § 9008 of this title, has reached the sum of $4,000,000. Thereafter, upon certification by the State Treasurer that the Fund has been capitalized pursuant to this section, future principal repayments of loans from the Health Facility Construction Fund shall be deposited in the State Treasurer's Bond Reversion Account.
16 Del. C. 1953, §§ 9005, 9011; 56 Del. Laws, c. 363; 57 Del. Laws, c. 655; 58 Del. Laws, c. 405; 58 Del. Laws, c. 503, § 2; 59 Del. Laws, c. 455, § 4; 64 Del. Laws, c. 463, § 1; 65 Del. Laws, c. 125, § 2.;
§ 9008 Management of Fund.
The Health Facilities Subsidy Fund shall be managed by the State Treasurer in conformance with policies promulgated by the Cash Management Policy Board (established pursuant to § 2716 of Title 29). Interest earned or profit realized from investment of money on deposit in the Health Facilities Subsidy Fund shall be retained in such Fund.
§ 9009 Eligibility for early repayment.
If any health facility which has incurred any obligation to the State through loans from the Health Facility Construction Fund chooses to accelerate the repayments of all or a portion of its indebtedness to the State, and chooses to finance its accelerated repayment through funds raised by debt issued through the Delaware Health Facilities Authority or any other debt instrument duly obligating the health facility, the State is hereby authorized to accept as satisfaction for that obligation an amount equal to all accrued interest, to the date of repayment, plus a principal amount equal to the future principal payments (or the portion thereof to be prepaid) on the Health Facility Construction Loan, discounted to their present value at the net interest cost of the new borrowing. In such case, the health facility shall not be eligible for a subsidy contract on that portion of its borrowing from the Health Facilities Authority or other creditor which is used to prepay its loan or loans from the Health Facility Construction Fund. Such payments of principal and interest shall be credited to the various funds and accounts of the State as specified in §§ 9007 and 9008 of this title.