N.Y. Public Authorities Law § 1056: Bonds of the authority

§ 1056. Bonds of the authority. 1. The authority shall have the power

and is hereby authorized from time to time to issue its negotiable bonds

in conformity with applicable provisions of the uniform commercial code

for any of its corporate purposes, including incidental expenses in

connection therewith, and to secure the payment of the same by lien of

the pledge of the revenues. The authority shall have power from time to

time 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 may issue bonds partly to refund bonds then outstanding and

partly for any of its corporate purposes. Except as may be otherwise

expressly provided by the authority, every issue of bonds by the

authority shall be general obligations payable out of any moneys,

earnings or revenues of the authority, subject only to any agreements

with the holders of particular bonds pledging any particular moneys,

earnings or revenues.

2. The bonds shall be authorized by resolution of the authority and

shall bear such date or dates, mature at such time or times not

exceeding forty years from their respective dates, bear interest at such

rate or rates per annum payable at such times, be in such denominations,

be in such form either coupon or registered, carry such registration

privileges, be executed in such manner, be payable in lawful money of

the United States of America, at such place or places and be subject to

such terms of redemption, as such resolution or resolutions may provide.

Such bonds of the authority may be sold at public or private sale for

such price or prices as the authority shall determine provided, however,

that any private sale shall be subject to the approval of the state

comptroller. The foregoing provisions shall be applicable to bonds

issued by the authority notwithstanding the provisions of any other

general, special or local law to the contrary.

3. Any resolution or resolutions authorizing any bonds or any issue of

bonds may contain provisions, which shall be a part of the contract with

the holders of the bonds thereby authorized, as to

(a) pledging all or any part of the moneys, earnings, income and

revenues derived from all or any part of the properties of the authority

to secure the payment of the bonds or of any issue of the bonds subject

to such agreements with bondholders as may then exist;

(b) the rates, rentals, fees and other charges to be fixed and

collected and the amounts to be raised in each year thereby, and the use

and disposition of the earnings and other revenues;

(c) the setting aside of reserves and the creation of sinking funds

and the regulation and disposition thereof;

(d) limitations on the right of the authority to restrict and regulate

the use of the properties in connection with which such bonds are

issued;

(e) limitations in the purposes to which the proceeds of sale of any

issue of bonds may be applied and pledging such proceeds to secure the

payment of the bonds or any issue of the bonds;

(f) limitations on the issuance of additional bonds, the terms upon

which additional bonds may be issued and secured; the refunding of

outstanding or other bonds;

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

bondholders 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;

(h) the creation of special funds into which any earnings or revenues

of the authority may be deposited;

(i) the terms and provisions of any mortgage or trust deed or

indenture securing the bonds or under which bonds may be issued;

(j) vesting in a trustee or trustees such properties, rights, powers

and duties in trust as the authority may determine which may include any

or all of the rights, powers and duties of the trustee appointed by the

bondholders pursuant to section one thousand sixty-six hereof, and

limiting or abrogating the right of the bondholders to appoint a trustee

under such section or limiting the rights, duties and powers of such

trustee;

(k) limitations on the power of the authority to sell or otherwise

dispose of its properties;

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

affect the security or protection of the bonds;

(m) limitations on the amount of moneys derived from the properties to

be expended for operating, administrative or other expenses of the

authority;

(n) the protection and enforcement of the rights and remedies of the

bondholders;

(o) the obligations of the authority in relation to the construction,

maintenance, operation, repairs and insurance of the properties, the

safeguarding and application of all moneys and as to the requirements

for the supervision and approval of consulting engineers in connection

with construction, reconstruction and operation;

(p) the payment of the proceeds of bonds and revenues of the

properties to a trustee or other depositary, and for the method of

disbursement thereof with such safeguards and restrictions as the

authority may determine.

4. It is the intention of the legislature that any pledge of earnings,

revenues or other moneys made by the authority shall be valid and

binding from the time when the pledge is made; that the earnings,

revenues or other moneys so pledged and thereafter received by the

authority shall immediately be subject to the lien of such pledge

without any physical delivery thereof or further act, and that 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

authority irrespective of whether such parties have notice thereof.

Neither the resolution nor any other instrument by which a pledge is

created need be recorded.

5. Neither the members of the authority nor any person executing the

bonds shall be liable personally on the bonds or be subject to any

personal liability or accountability by reason of the issuance thereof.

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

to purchase bonds. The authority shall cancel such bonds, subject to and

in accordance with agreements with bondholders.

7. In the discretion of the authority, the bonds may be secured by a

trust indenture (instead of a resolution) by and between the authority

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

the powers of a trust company in the state of New York. Such trust

indenture may contain any of the provisions which a resolution

authorizing bonds may contain.

Notwithstanding any other provisions of this title, any resolution or

resolutions authorizing bonds or notes of the authority shall contain a

covenant by the authority that it will at all times maintain rates,

fees, rentals and other charges sufficient to pay, and that any

contracts entered into by the authority for the sale or distribution of

water shall contain rates, fees, rentals or other charges sufficient to

pay, the cost of operation and maintenance of the properties, the

principal of and interest on any obligations issued pursuant to such

resolution or resolutions as the same severally become due and payable,

and to maintain any reserves or other funds required by the terms of

such resolution or resolutions.