N.Y. Municipal Housing Authorities Law § 72: Bonds and security therefor

* § 72. Bonds and security therefor. 1. An authority may from time to

time issue bonds in such amounts and upon such terms as it may deem

advisable to carry out the provisions of this article. Bonds of an

authority shall be authorized by its resolution and may be issued singly

or in one or more series, and shall bear such date or dates, mature at

such time or times, bear interest at such rate or rates, not exceeding

six per centum per annum, be in such denomination or denominations,

interchangeable or otherwise, be in such form, either coupon or

registered, carry such registration privileges, be executed in such

manner, with or without authentication, be payable in such medium of

payment, at such place or places, and be subject to such terms of

redemption, with or without premium, as such resolution may provide. The

authority must obtain the approval as to the amount and terms of such

bonds, of the board of estimate and apportionment in cities where such

body exists, and in other cities, of the local legislative body thereof

as defined in the city home rule law, except that such approval shall

not be required for bonds issued in connection with a federal project.

Bonds issued for a non-federal project in a city of more than one

million inhabitants may include terms providing that the amount

necessary to pay the interest thereon until maturity shall be paid to

the authority by such city without reimbursement or liability of the

authority to such city therefor. For the purpose of meeting such

payments to the authority any such city shall be empowered to enact

local laws imposing and collecting an occupation tax in addition to any

and all other taxes which such city has the power to impose. Such tax

shall be imposed upon any individual, copartnership or corporation

occupying premises in any such city as an owner, tenant or

concessionaire for any gainful purpose. Such tax shall be in an amount

of not less than one dollar nor more than six dollars per year for each

separate premises so occupied, the rate of tax to depend upon the size

of such premises or upon such other reasonable standard as may be fixed

in such local law. Revenues resulting from the imposition of taxes

authorized by this act shall be paid into the treasury of any such city

and shall not be credited or deposited in the general fund of any such

city, but shall be deposited in a separate bank account or accounts and

shall be available and used solely and exclusively for the purposes

aforesaid. In no event and under no circumstances shall the payment of

interest on such bonds by such city be deemed to modify in any way the

provisions of section seventy-three of this act. The bonds for a federal

project or non-federal project may be sold by the authority at public or

private sale at such price or prices as the authority may determine.

The authority may issue its interim certificates, or other temporary

obligations, to the purchaser of bonds pending the authorization,

preparation, execution or delivery of definitive bonds. Such interim

certificates, or other temporary obligations, shall be in such form,

contain such terms, conditions and provisions, bear such date or dates,

and evidence such agreements relating to their discharge or payment or

the delivery of definitive bonds as the authority may by resolution

determine.

In case any of the members or officers of the authority whose

signatures appear on any bonds or coupons shall cease to be such members

or officers before the delivery of such bonds, such signatures, shall,

nevertheless, be valid and sufficient for all purposes, the same as if

they had remained in office until such delivery.

Any provisions of any law to the contrary notwithstanding, any bonds,

interim certificates, or other obligations issued pursuant to this act

shall be fully negotiable unless such bonds, interim certificates or

other obligations expressly provide otherwise.

2. Bonds may be issued for any purposes of the authority including the

payment or reimbursement to the municipality for property, services or

facilities furnished by it pursuant to agreement with the authority.

3. The authority shall have power out of any funds available therefor

to purchase any bonds issued by it at a price not more than the

principal amount thereof and the accrued interest. All bonds so

purchased shall be cancelled. This paragraph shall not apply to the

redemption of bonds.

4. No personal liability or accountability shall attach to any member

of the authority or any official of the municipality or to any person

executing said bonds by reason of the execution or issuance thereof.

5. The bonds of an authority are securities in which the city or state

may invest. Such bonds, when they are (1) secured by a first mortgage

lien not exceeding sixty-six and two-thirds per centum of the value of

the property covered thereby, or (2) issued in connection with a project

aided or financed in whole or in part by the federal government pursuant

to the provisions of an act of the congress providing for capital grants

for low cost housing, or for the making of loans and for the payment of

annual contributions for such purpose under a contract guaranteeing the

payment of such annual contributions by the federal government to the

authority for a fixed period of years, are hereby declared to be

securities in which all public officers and bodies of the state,

municipalities, municipal subdivisions, all insurance companies and

associations, all savings banks and savings institutions, including

savings and loan associations, all executors, administrators, guardians,

trustees, and all other fiduciaries in the state may legally invest

funds within their control.

6. In connection with the issuance of bonds or the incurring of any

obligation under a lease, and to secure the payment of such bonds or

obligations, an authority in addition to its other powers may: (a)

Pledge all or any part of its rents, fees, or revenues to which its

right then exists or may thereafter come into existence.

(b) Mortgage all or any part of its property, real or personal, then

owned or thereafter acquired.

(c) Covenant against mortgaging all or any part of its property, real

or personal, then owned or thereafter acquired, or against permitting or

suffering any lien thereon.

(d) Covenant with respect to limitations on its right to sell, lease,

or otherwise dispose of any project or any part thereof.

(e) Covenant against pledging all or any part of its rents, fees and

revenues, to which its right then exists or may thereafter come into

existence, or against permitting or suffering any lien thereon.

(f) Covenant as to the bonds to be issued and as to the issuance of

such bonds in escrow or otherwise, and as to the use and disposition of

the proceeds thereof.

(g) Covenant as to what other, or additional debts may be incurred by

it.

(h) Provide for the replacement of lost, destroyed or mutilated bonds.

(i) Covenant that the authority warrants the title to the premises.

(j) Covenant as to the rents and fees to be charged, the amount to be

raised each year or other period of time by rents, fees, and other

revenues, and as to the use and disposition to be made thereof.

(k) Covenant as to the use of any or all of its property, real or

personal.

(l) Create or authorize the creation of special funds segregating (a)

the proceeds of any loans or grant; (b) all of the rents, fees and

revenues of any project or projects; (c) any monies held for the payment

of the costs of operation and maintenance of projects, or as a reserve

for the meeting of contingencies in the operation and maintenance

thereof; (d) any monies held for the payment of the principal and

interest on its bonds or the sums due under its leases and/or as a

reserve for such payments; and (e) any monies held for any other

reserves or contingencies; and covenant as to the use and disposal of

the monies held in such funds.

(m) Redeem the bonds, and covenant for their redemption, and provide

the terms and conditions thereof.

(n) Covenant against extending the time for the payment of its bonds

or interest thereon.

(o) Prescribe the procedure, if any, by which the terms of any

contract with bond holders may be amended or abrogated, the amount of

bonds the holders of which must consent thereto, and the manner in which

such consent may be given.

(p) Covenant as to the maintenance of its property, the replacement

thereof, the insurance to be carried thereon, and the use and

disposition of insurance moneys.

(q) Vest in an obligee, in the event of a default by an authority, the

right to cure any such default and to advance any monies necessary for

such purpose, and covenant that the monies so advanced be an additional

obligation of such authority with such interest, security and priority

as may be provided in any trust indenture, mortgage, lease or contract.

(r) Covenant and prescribe as to the events of default and terms and

conditions upon which any or all of its bonds shall become or may be

declared due before maturity, and as to the terms and conditions upon

which such declaration and its consequences may be waived.

(s) Covenant as to the rights, liabilities, powers and duties arising

upon the breach by it of any covenant, condition, or obligation.

(t) Covenant to surrender possession of a project or projects or parts

thereof upon the happening of an event of default; and vest in an

obligee the right, upon such default, without judicial proceedings to

take possession and use, operate, manage and control such projects or

any part thereof, and to collect and receive rents, fees and revenues

arising therefrom in the same manner as such authority itself might do,

and to dispose of the monies collected in accordance with the agreement

of such obligee with the authority.

(u) Vest in a trustee or trustees the right to enforce any covenant to

secure, or pay the bonds, or otherwise relating to such bonds; provide

for the powers and duties of such trustee or trustees, limit the

liabilities thereof, and provide the terms and conditions upon which the

trustee or trustees, or the holders of bonds, or any proportion of them,

may enforce any such covenant.

(v) Vest in a government or in a trustee the right, upon any happening

of an event of default, to foreclose the mortgage securing any bonds

held by such government, through judicial proceedings or through the

exercise of a power of sale without judicial proceedings.

(w) Vest in a trustee or trustees or in other obligees the right, upon

the happening of an event of default, to foreclose any mortgage through

judicial proceedings.

(x) Vest in an obligee, including a government, the right to foreclose

any such mortgage as to all or such part or parts of the property

covered thereby as such obligee shall elect; the institution,

prosecution and conclusion of any such foreclosure proceedings or the

sale of any such parts of the mortgaged property shall not affect in any

manner or to any extent the lien of the mortgage on the parts of the

mortgaged property not included in such proceedings or not sold as

aforesaid.

(y) Make covenants other than, and in addition to, the covenants

herein expressly authorized, of like or different character; and execute

all instruments necessary or convenient in the exercise of the powers

herein granted, or in the performance of its covenants or duties, which

may contain such covenants and provisions, in addition to those above

specified, as the government or any purchaser of the bonds of an

authority may require.

(z) Make such covenants and do any and all such acts and things as may

be necessary or convenient or desirable in order to secure its bonds, or

in the absolute discretion of an authority tend to make the bonds more

marketable; notwithstanding that such covenants, acts or things may not

be enumerated herein.

7. In addition to powers conferred upon an authority by other

provisions of this act, an authority is empowered to borrow money or

accept grants from the federal government for or in aid of any project,

to take over any land acquired by the federal government or any housing

plan of the federal government, to take over, manage or lease any

housing undertaking of the federal government, and to these ends, to

enter into such contracts, mortgages, trust indentures, leases or other

agreements as the federal government may require, including agreements

that the federal government shall have the right to supervise and

approve the construction, maintenance and operation of any project. It

is the purpose and intent of this subdivision to authorize an authority

to do any and all things necessary or desirable to secure the financial

aid and co-operation of the federal government in the undertaking,

construction, maintenance, lease, operation or assistance of any project

by the authority, or in connection with any housing plan or undertaking

of the federal government.

* NB The text of Article 5 of the former State Housing Law (cited

herein as the "Municipal Housing Authorities Law"), as such article

existed immediately prior to its repeal pursuant to section 227 of

Chapter 808 of the Laws of 1939, is provided here for ease of reference

and historical purposes as such text continues to be applicable for the

New York City Housing Authority pursuant to the provisions of section

401 of the current Public Housing Law.