Relates to the liability of the state university of New York upon exiting operations at the Long Island college hospital

1 Co-sponsor

• Patty Ritchie

Title of bill

An act in relation to the liability of the state university at New York upon exiting operations at the Long Island College Hospital

Purpose

To protect the State University of New York (SUNY) from the post-sale liabilities of the Long Island College Hospital.

Summary of provisions

Section 1. Would establish that SUNY would not be liable for any financial obligations in excess of the sale proceeds of the Long Island College Hospital. Any such liabilities would become liabilities of the State.

Section 2. Provides for an immediate effective date.

Justification

The State University of New York Downstate Medical Center acquired the Long Island College Hospital (LICH) in 2011 after approval by the Attorney General, Director of Budget and State Comptroller. Since its acquisition, LICH has lost as much as $13 million a month and accumulated liabilities approaching $500 million. In February 2014, a court order approved a process by which SUNY could sell LICH and exit operations on or after May 22, 2014. However, the sale proceeds will not cover the full value of the financial obligations for which SUNY is liable. If SUNY is to assume responsibility for all of LICH's liabilities, it may have to significantly reduce academic programs or increase tuition beyond the amount permitted under SUNY 2020. This bill seeks to prevent that occurrence and protect SUNY's various campuses and students - which had no involvement in the acquisition of LICH - from unnecessary harm by having the State assume a portion of LICH's liabilities.

Legislative history

2014 S.7263/A 9985.

Fiscal implications

It is anticipated that liabilities in excess of the sale proceeds could amount to $200-$250 million.

Effective date

Immediately.