N.Y. Private Housing Finance Law § 654-c: Housing New York corporation

§ 654-c. Housing New York corporation. 1. Definitions. As used in this

section, unless a different meaning clearly appears from the context:

(a) "Housing New York program" shall mean the housing New York program

established pursuant to section four of the housing New York program

act.

(b) "City" shall mean the city of New York, its agencies and

instrumentalities (other than the housing New York corporation) and the

New York city housing development corporation.

(c) "Residential housing facilities" shall mean one or more works or

improvements containing one or more residential dwelling units,

including, but not limited to, single room occupancy units, and

including the real and personal property acquired, owned, constructed,

equipped, improved, enlarged, rehabilitated or renovated to provide such

accommodations and such incidental and appurtenant commercial, social,

recreational or communal facilities, to be located without the Battery

Park project area, as defined in the Battery Park city authority act,

and within the city.

(d) "Excess revenues" shall mean all revenues from the Battery Park

project area, as defined in the Battery Park city authority act, in

excess of those needed (i) to satisfy bond and note covenants (other

than as they relate to bonds and notes issued pursuant to this section

and section one thousand nine hundred seventy-four-c of the public

authorities law) including those covenants which require that the

Battery Park city authority maintain its revenues and reserve funds in

an amount necessary to permit it to discharge its debt service

obligations, (ii) to fulfill its legal and financial commitments, and

(iii) to pay its operating and maintenance expenses.

2. There is hereby established a public benefit corporation known as

the "housing New York corporation" as a subsidiary corporation of the

corporation solely for the purpose of borrowing money and granting such

moneys to the city for the purposes and in accordance with the

provisions of the housing New York program.

3. It is hereby found and declared that the legislature, pursuant to

the housing New York program act, has established a housing New York

program under which the city will cause the acquisition, construction,

equipping, improving, rehabilitation and renovation of dwelling

accommodations within the city of New York for persons and families for

whom the ordinary operations of private enterprise cannot supply such

accommodations; that such program is necessary in order to increase the

presently inadequate supply of dwelling accommodations in such city for

such persons and families; that such program shall require a substantial

commitment of funds from public sources; and that the need for such

moneys necessitates that the subsidiary corporation created by this

section be granted the powers and be made subject to the requirements of

this section. The legislature therefore finds that such subsidiary

corporation, subject to the terms and conditions specified herein,

should be given the power to borrow funds and grant such moneys to the

city of New York, and any agency or instrumentality thereof (other than

such subsidiary corporation) or the corporation for use by such entity

in the housing New York program; that the financing of residential

housing facilities in accordance with the housing New York program is a

public purpose for which moneys may be granted, and exemptions from

taxation on the income of bonds or notes of such subsidiary corporation

and on such subsidiary corporation's income and property granted, as

specified herein; and that the powers and duties of such subsidiary

corporation as recited in this section are necessary and proper for

achieving the ends herein recited. Therefore such subsidiary corporation

is hereby authorized and empowered:

(a) to borrow money by issuing bonds and notes for the purposes of (i)

granting such moneys to the city to finance the acquisition,

construction, equipping, improvement, enlargement, rehabilitation and

renovation of residential housing facilities for the purposes and in

accordance with the provisions of the housing New York program and (ii)

refunding any bonds or notes of such subsidiary corporation issued

pursuant to this section;

(b) to grant moneys to the city for the purpose of financing the

acquisition, construction, equipping, improvement, enlargement,

rehabilitation and renovation of residential housing facilities for the

purposes and in accordance with the provisions of the housing New York

program and to enter into any agreement specifying terms and conditions

with respect thereto;

(c) subject to the provisions of any contract with the holders of any

of its bonds or notes, to pledge any revenues or assets of such

subsidiary corporation, including, but not limited to, any excess

revenues of the Battery Park city authority as shall be payable to such

subsidiary corporation pursuant to an agreement between the Battery Park

city authority and such subsidiary corporation as such subsidiary

corporation shall deem necessary, to secure any bonds or notes issued or

any agreements entered into pursuant to this section; (d) to procure

insurance, letters of credit or other credit enhancements with respect

to its bonds or notes issued pursuant to this section and to pay the

premiums and fees therefor;

(e) to adopt, amend or rescind rules and regulations appropriate to

carry out its corporate purposes and to establish such requirements and

enter into such agreements to achieve the objectives of this section;

and

(f) to exercise any and all other powers authorized by this section

and not inconsistent with the provisions of this section.

4. In addition to the foregoing, such subsidiary corporation may:

(a) receive moneys from the corporation, the Battery Park city

authority, any other public benefit corporation, the federal government

or any other source for the purpose of paying its obligations issued

pursuant to this section in order to provide residential housing

facilities to low and moderate income persons for whom the ordinary

operation of private enterprise cannot supply safe, sanitary and

affordable housing accommodations,

(b) enter into agreements with the Battery Park city authority or any

other entity for the purpose of receiving moneys as described in

paragraph (a) of this subdivision, and

(c) transfer, lend, pledge or assign moneys to a trustee, fiduciary or

similar entity for the purpose of securing obligations as referenced in

paragraph (a) of this subdivision.

5. The membership of such subsidiary corporation shall consist of

seven members, five of whom shall be members of the corporation (other

than members thereof appointed by the governor) and two of whom shall be

appointed by the governor. Neither of the two members appointed by the

governor shall be members or officers of the Battery Park city authority

or any subsidiary corporation organized pursuant to section nineteen

hundred seventy-four-a of the public authorities law. The two members

first appointed by the governor shall serve for terms of two and four

years respectively from January first next succeeding the date of their

appointment. Their successors shall serve for terms of four years each.

The governor shall fill any vacancy which may occur by reason of death,

resignation or otherwise of a member appointed by the governor in a

manner consistent with the original appointment. A member appointed by

the governor (i) shall continue in office until such member's successor

has been appointed and qualified and (ii) may be removed by the governor

for cause, but not without an opportunity to be heard in person or by

counsel, in such member's defense, upon not less than ten days' notice.

The commissioner of the department of housing preservation and

development shall serve as chairperson of the subsidiary corporation.

The powers of the subsidiary corporation shall be vested in and

exercised by no less than four of the members thereof then in office.

The subsidiary corporation may delegate to one or more of its members,

or its officers, agents and employees, such duties and powers as it may

deem proper.

6. Notwithstanding any inconsistent provisions of this or any other

general, special or local law, no officer or employee of the city or the

state, or of any public corporation, as defined in the general

construction law, shall be deemed to have forfeited or shall forfeit

such person's office or employment by reason of such person's acceptance

of membership on or by virtue of such person's being an officer,

employee or agent of the subsidiary corporation. No officer or member of

the corporation shall receive any additional salary or other

compensation, either direct or indirect, other than reimbursement for

actual and necessary expenses incurred in the performance of such

person's duties, by reason of such person's serving as a member or

officer of such subsidiary corporation.

7. The corporation may transfer to such subsidiary corporation any

real, personal or mixed property in order to carry out the purposes of

this section.

8. The subsidiary corporation also shall have the power to:

(a) sue and be sued;

(b) have a seal and alter the same at pleasure;

(c) make and alter by-laws for its organization and internal

management and make rules and regulations governing the use of its

property and facilities;

(d) make and execute contracts and all other instruments necessary or

convenient for the exercise of its powers and functions under this

section;

(e) acquire, hold and dispose of real or personal property for its

corporate purposes;

(f) engage the services of private consultants on a contract basis for

rendering professional and technical assistance and advice;

(g) procure insurance against any loss in connection with its

activities, properties and assets in such amount and from such insurers

as it deems desirable;

(h) appoint officers, agents and employees, prescribe their duties and

qualifications and fix their compensation subject to the provisions of

the civil service law and the rules of the civil service commission of

the city;

(i) invest any funds, or other moneys under its custody and control in

the same manner as the corporation; and

(j) to do any and all things necessary or convenient to carry out its

purposes and exercise the powers expressly given and granted in this

section.

9. The subsidiary corporation and its corporate existence shall

continue until terminated by law; provided, however, that no such

termination shall take effect as long as obligations of the subsidiary

corporation remain outstanding, unless adequate provision has been made

for the payment thereof in the documents securing the same. Upon

termination of the existence of the subsidiary corporation all of its

rights and properties shall pass to and be vested in the city of New

York.

10. The city and the corporation shall have the power to transfer to

such subsidiary corporation, agents, employees and facilities of the

city or corporation to enable it to fulfill the purposes of this

section.

11. (a) Subject to the provisions of this section, the subsidiary

corporation shall have power and is hereby authorized to issue from time

to time its notes and bonds in such principal amount as the subsidiary

corporation shall determine to be necessary to provide sufficient funds

for achieving its corporate purposes, including the providing of moneys

to the city, the payment of interest on notes and bonds of the

subsidiary corporation, the establishment of reserves to secure such

notes and bonds, and the payment of all expenses of the subsidiary

corporation incident thereto.

(b) The subsidiary corporation shall have the power, from time to

time, to issue (i) notes to renew notes and (ii) bonds to pay notes,

including the interest thereon and, whenever it deems refunding

expedient, to refund any bonds by the issuance of new bonds, whether the

bonds to be refunded have or have not matured, and to issue bonds partly

to refund bonds then outstanding and partly for any of its corporate

purposes. The refunding bonds may be exchanged for the bonds to be

refunded or sold and the proceeds applied to the purchase, redemption or

payment of such bonds.

(c) Except as may otherwise be expressly provided by the subsidiary

corporation, every issue of its notes and bonds shall be general

obligations of the subsidiary corporation payable out of any revenues of

such corporation, subject only to any agreements with the holders of

particular notes or bonds pledging any particular revenues.

(d) The notes and bonds shall be authorized by resolution or

resolutions of the subsidiary corporation, shall bear such date or dates

and shall mature at such time or times as such resolution or resolutions

may provide, except that no note or any renewal thereof shall mature

more than nine years after the date of issue of the original note and no

bond shall mature more than fifty years from the date of its issue. No

refunding bonds shall mature later than fifty years from the date of

original issuance of the bonds being refunded. The bonds may be issued

as serial bonds payable in annual installments or as term bonds or as a

combination thereof. The notes and bonds shall bear interest at such

rate or rates, be in such denominations, be in such form, either coupon

or registered, carry such registration privileges, be executed in such

manner, be payable in such medium of payment, at such place or places,

and be subject to such terms of redemption as such resolution or

resolutions may provide. The notes and bonds may be sold by the

subsidiary corporation at public or private sale, at such price or

prices as the subsidiary corporation shall determine; provided, however,

that the subsidiary corporation shall consult with the comptroller of

the city of New York as to the timing of any sale; and provided further

that no notes or bonds of the subsidiary corporation may be sold at a

private sale unless such sale and the terms thereof have been approved

in writing by (a) such comptroller, where such sale is not to such

comptroller, or (b) the director of the budget of the city of New York,

where such sale is to such comptroller.

(e) Any resolution or resolutions authorizing any notes or bonds or

any issue thereof may contain provisions, which shall be a part of the

contract or contracts with the holders thereof, as to:

(i) pledging all or any part of the revenues to secure the payment of

the notes or bonds or of any issue thereof, subject to such agreements

with noteholders or bondholders as may then exist; (ii) pledging all or

any part of the assets of the subsidiary corporation to secure the

payment of the notes or bonds or of any issue of notes or bonds, subject

to such agreements with noteholders or bondholders as may then exist;

(iii) the setting aside of reserves or sinking funds and the

regulation and disposition thereof;

(iv) limitations on the purpose to which the proceeds of sale of notes

or bonds may be applied and pledging such proceeds to secure the payment

of the notes or bonds or of any issue thereof;

(v) limitations on the issuance of additional notes or bonds; the

terms upon which additional notes or bonds may be issued and secured;

and the refunding of outstanding or other notes or bonds;

(vi) the procedure, if any, by which the terms of any contract with

noteholders or bondholders may be amended or abrogated, the amount of

notes or bonds the holders of which must consent thereto, and the manner

in which such consent may be given;

(vii) limitations on the amount of moneys to be expended by the

subsidiary corporation for operating expenses of the subsidiary

corporation;

(viii) vesting in a trustee or trustees such property, rights, powers

and duties in trust as the subsidiary corporation may determine, which

may include any or all of the rights, powers and duties of the trustee

appointed by the bondholders pursuant to this section and limiting or

abrogating the right of the bondholders to appoint a trustee under this

section or limiting the rights, powers and duties of such trustee;

(ix) the acts or omissions to act which shall constitute a default in

the obligations and duties of the subsidiary corporation to the holders

of the notes or bonds and providing for the rights and remedies of the

holders of the notes or bonds in the event of such default, including

the right to appointment of a receiver; providing, however, that such

rights and remedies shall not be inconsistent with the general laws of

the state and the other provisions of this section; and

(x) any other matters, of like or different character, which in any

way affect the security or protection of the holders of the notes or

bonds.

(f) Any pledge made by the subsidiary corporation shall be valid and

binding from the time when the pledge is made; the revenues or property

so pledged and thereafter received by the subsidiary corporation shall

immediately be subject to the lien of such pledge without any physical

delivery thereof or further act, and the lien of any such pledge shall

be valid and binding as against all parties having claims of any kind in

tort, contract or otherwise against the subsidiary corporation,

irrespective of whether such parties have notice thereof. Neither the

resolution nor any other instrument by which a pledge is created need be

recorded.

(g) Neither the members of the subsidiary corporation nor any other

person executing such notes or bonds shall be subject to any personal

liability or accountability by reason of the issuance thereof.

(h) The subsidiary corporation, subject to such agreements with

noteholders or bondholders as may then exist, shall have power out of

any funds available therefor, to purchase notes or bonds of the

subsidiary corporation which shall thereupon be cancelled.

(i) In the discretion of the subsidiary corporation, the bonds may be

secured by a trust indenture by and between the subsidiary corporation

and a corporate trustee, which may be any trust company or bank having

the powers of a trust company in the state. Such trust indenture may

contain such provisions for protecting and enforcing the rights and

remedies of the bondholders as may be reasonable and proper and not in

violation of law, including covenants setting forth the duties of the

subsidiary corporation in relation to the exercise of its corporate

powers and the custody, safeguarding and application of all moneys. The

subsidiary corporation may provide by such trust indenture for the

payment of the proceeds of the bonds and the revenues to the trustee

under such trust indenture or other depository, and for the method of

disbursement thereof, with such safeguards and restrictions as it may

determine. If the bonds shall be secured by a trust indenture, the

bondholders shall have no authority to appoint a separate trustee to

represent them.

(j) Whether or not the notes and bonds are of such form and character

as to be negotiable instruments under the terms of the uniform

commercial code, the notes and bonds are hereby made negotiable

instruments within the meaning of and for all the purposes of the

uniform commercial code, subject only to the provisions of the notes and

bonds for registration.

12. No moneys may be borrowed by issuing bonds or notes to finance

residential housing facilities pursuant to this section unless such

subsidiary corporation has entered into an agreement or agreements with

the mayor on behalf of the city and with the Battery Park city

authority, which provide, in addition to any other terms and conditions,

that:

(a) such residential housing facilities are to provide dwelling

accommodations which are to be occupied by persons and families for whom

the ordinary operations of private enterprise cannot provide an adequate

supply of safe, sanitary and affordable housing accommodations;

(b) unless otherwise specifically provided by law, neither the state

nor the authority are to have any responsibility as to the financing of

such residential housing facilities and neither the state, the authority

nor the subsidiary corporation are to have any responsibility as to the

operation, maintenance, repair or use of such facilities;

(c) the city shall use the moneys granted to it pursuant to this

section to finance residential housing facilities in accordance with the

provisions of the housing New York program and shall comply with the

terms and conditions of the housing New York program act and this

section; and

(d) the timing, amount, maturity schedule and all other terms and

conditions of any issuance of bonds or notes by the subsidiary

corporation pursuant to this section, will provide for the Battery Park

city authority's requirements as to the development, management or

operation of the project and the effect of such terms and conditions on

the availability of excess revenues and the pledge or assignment

thereof.

13. Commencing on or before January thirty-first, nineteen hundred

eighty-seven, and on or before January thirty-first of each year

thereafter during which the city utilizes moneys which are provided to

it pursuant to this section, such subsidiary corporation shall, for the

prior and current calendar year, submit a report to the governor, the

temporary president of the senate, the speaker of the assembly, the

minority leader of the senate, the minority leader of the assembly, the

mayor and the comptroller, which shall include, but not be limited to,

the total principal amount of bonds and notes which have been and are

expected to be issued pursuant to this section and a copy of any

agreement and any amendments thereto among such subsidiary corporation,

the Battery Park city authority and the city pursuant to subdivision

twelve of this section. Such report may be a part of any other report

that such subsidiary corporation is required to make.

14. For the purposes of financing the acquisition, construction,

equipping, improvement, enlargement, rehabilitation and renovation of

residential housing facilities pursuant to this section, such subsidiary

corporation may borrow money by issuing bonds or notes in an aggregate

principal amount not exceeding four hundred million dollars plus a

principal amount of bonds or notes issued (i) to fund any related debt

service reserve fund, (ii) to provide capitalized interest, and (iii) to

provide fees and other charges and expenses, including underwriters'

discount, related to the issuance of such bonds or notes and the

maintenance of such reserves, all as determined by such subsidiary

corporation, excluding bonds or notes issued to refund outstanding bonds

or notes issued pursuant to this section. Any bonds or notes of such

subsidiary corporation shall not be or be deemed to be obligations of

the corporation or subject to or included in any authorization of or

limitation on indebtedness of the corporation.

In computing the total principal amount of bonds or notes that may at

any time be issued for any purpose under this section, the amount of the

outstanding bonds or notes that constitutes interest under the United

States Internal Revenue Code of nineteen hundred fifty-four, as amended

to the effective date of this section, shall be excluded.

15. The state does hereby pledge to and agree with the holders of any

bonds or notes issued under this section that the state will not limit

or alter the rights hereby vested in such subsidiary corporation or the

Battery Park city authority to fulfill the terms of any agreements made

with or for the benefit of the said holders thereof, or in any way

impair the rights and remedies of such holders until such bonds or

notes, together with the interest thereon, with interest on any unpaid

installments of interest, and all costs and expenses in connection with

any action or proceeding by or on behalf of such holders, are fully met

and discharged. Such subsidiary corporation is authorized to include

this pledge and agreement of the state in any agreement with the holders

of such bonds or notes.

16. The bonds or notes of such subsidiary corporation shall not be a

debt of either the state of New York, the city of New York, the Battery

Park city authority or the corporation, and neither the state, the city

of New York, such authority nor the corporation shall be liable thereon,

nor shall they be payable out of any funds other than those of such

subsidiary corporation; and such bonds or notes shall contain on the

face thereof a statement to such effect.

17. The subsidiary corporation established pursuant to this section

shall have all the privileges, immunities, tax exemptions and other

exemptions of the corporation to the extent the same are not

inconsistent with this section.