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2007 Laws of Maryland
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Ch.3
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REVISOR'S NOTE: This section is new language derived without substantive
change from the first sentence of former Art. 70B, § 11B(a).
In this section and in § 10-420(b)(1) of this subtitle, references to this
"part" are substituted for the former references to this "section" to reflect
the reorganization of provisions formerly contained in Art. 70B, § 11B. No
substantive change is intended.
Defined terms: "Facility" § 10-401
"Provider" § 10-401
10-420. OPERATING RESERVES — IN GENERAL.
(A) EXCLUSION OF INTEREST EXPENSES.
INTEREST EXPENSES MAY BE EXCLUDED FROM THE CALCULATION OF NET
OPERATING EXPENSES FOR A FISCAL YEAR, IF THE PROVIDER FUNDED A DEBT
SERVICE RESERVE OR OTHER INTEREST RESERVE UNDER REQUIREMENTS IMPOSED
BY A FINANCIAL INSTITUTION OR UNDER APPLICABLE FINANCING DOCUMENTS, TO
THE EXTENT THE RESERVE FUND INCLUDED AMOUNTS TO COVER INTEREST FOR
THAT FISCAL YEAR
(B) OPERATING RESERVES — AMOUNT AND FORM.
(1) EXCEPT AS OTHERWISE PROVIDED IN THIS PART, A PROVIDER SHALL
SET ASIDE FOR EACH FACILITY SUBJECT TO THIS SUBTITLE OPERATING RESERVES
EQUAL TO 15% OF THE FACILITY'S NET OPERATING EXPENSES FOR THE MOST
RECENT FISCAL YEAR FOR WHICH A CERTIFIED FINANCIAL STATEMENT IS
AVAILABLE.
(2) THE PROVIDER SHALL KEEP THE OPERATING RESERVES IN A
REASONABLY LIQUID FORM IN THE JUDGMENT OF THE PROVIDER
(C) OPERATING RESERVES — TIME PERIOD FOR MEETING RESERVE
REQUIREMENT.
(1) A PROVIDER SHALL MEET THE REQUIREMENTS OF SUBSECTION (B)
OF THIS SECTION WITHIN 10 FULL FISCAL YEARS AFTER THE DATE OF ITS INITIAL
CERTIFICATE OF REGISTRATION.
(2) A PROVIDER SHALL SET ASIDE AT LEAST 10% OF THE RESERVES
REQUIRED UNDER SUBSECTION (B) OF THIS SECTION AT THE END OF EACH FISCAL
YEAR AFTER THE DATE OF ITS INITIAL CERTIFICATE OF REGISTRATION, UP TO A
TOTAL OF 100% AT THE END OF THE 10TH FISCAL YEAR
(3) THE DEPARTMENT MAY ALLOW A PROVIDER TO MODIFY THE
MINIMUM RATE REQUIRED UNDER PARAGRAPH (2) OF THIS SUBSECTION OR EXTEND
THE TIME TO MEET THE REQUIREMENTS OF SUBSECTION (B) OF THIS SECTION IF
THE MODIFICATION IS NECESSARY TO MAINTAIN THE FINANCIAL VIABILITY OF THE
FACILITY.
REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 70B, § 11B(b), (g), and the second sentence of (a).
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