Title: Section 87.31 - Project development

87.31 Project development.

(a) This section shall apply to the project development period from the inception of a project to the final financial occupancy date declared by the State Commissioner of Health.

(b) All proposed or pre-existing professional service contracts and consultant contracts shall require the written approval of the State Department of Health to be included in eligible project cost. All such contracts shall be in writing duly executed by the parties thereto.

(1) All architectural and engineering contracts shall be submitted to the State Department of Health for approval. The architect or engineer shall comply with the State Department of Health requirements including the provision of acceptable professional liability insurance, the assurance of continuity of professional services, satisfactory evidence of the ability to perform the architectural and engineering services required, and agreement to attend conferences and provide professional services as required by the State Department of Health.

(2) All attorney retainers shall be submitted to the State Department of Health for review and approval. The attorney shall comply with the State Department of Health requirements including the assurance of continuity of professional services and the agreement to attend conferences and provide professional services as required by the State Department of Health.

(3) All written consultant contracts relating to the development period shall be submitted to the State Department of Health for review and approval. The consultant shall comply with the State Department of Health requirements including the assurance of continuity of consultive services, satisfactory evidence of ability to perform the consultive services required, and agreement to attend conferences and provide consultive services as required by the State Department of Health.

(4) All professional service contracts and consultant contracts for the project shall set forth fee and payment provisions in an amount no greater than contained in the fee guidelines approved by the State Department of Health.

(c) An eligible borrower shall obtain current exempt organization certificates from the U.S. Internal Revenue Service as a hospital under section 501 (c)(3) of the Internal Revenue Code and statements of exemption from the State Department of Taxation and Finance.

(d) An eligible borrower shall provide acceptable topographical surveys of the project site certified by a licensed surveyor to the hospital, the hospital's title insurance company, the State Department of Health, and the State Housing Finance Agency or the State Medical Care Facilities Finance Agency in accordance with the requirements of the State Department of Health. An eligible borrower shall also provide title reports and continuations thereof covering the project site from an acceptable title insurance company, free and clear of exceptions objectionable to the State Department of Health and the State Housing Finance Agency or the State Medical Facilities Finance Agency, and certified copies of certificates of incorporation and such other corporate certificates of special acts of the legislature as required by the State Department of Health.

(e) An eligible borrower shall submit for approval a schedule of estimated development costs and capital requirements, a schedule of estimated annual expenses and income, supporting schedules of all estimated development costs and capital requirements and estimated annual expenses and income, a project cost analysis schedule and such other project statistics, space requirements and financial data as the State Department of Health may require.

(f) An eligible borrower shall conform with the bid requirements and procedures of the State Department of Health providing for competitive bidding by contractors and subcontractors and the provisions of "Supplementary Instructions to Bidders".

(g) Construction contracts shall include the standard form of agreement between owner and contractor as amended by the State Department of Health which includes the required "Modification to Standard Form of Agreement Between Owner and Contractor", the "Supplementary Conditions of the Contract for Construction" and such further terms, provisions and documents as may be required by the Department of Health.

(h) Payment and performance bonds acceptable to the State Department of Health shall be required to insure the faithful performance of the contract and payment for labor and the furnishing of materials for all contracts.

(i) The Department of Health may modify the requirements for hospital projects set forth in subdivisions (g) and (h) of this section for project construction completed prior to mortgage closing.