N.Y. Public Authorities Law § 1098: Bonds of the authority

§ 1098. 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 a lien or

pledge covering all or part of its contracts, earnings or revenues

except that no resolution or other action of the authority providing for

the issuance of bonds may be adopted or otherwise made effective without

the prior approval of the Monroe county legislature. The powers

conferred by this section on such Monroe county legislature shall be

exercised with due regard for the rights of the holders of bonds of the

authority at any time outstanding, and nothing in, or done pursuant to,

this section shall in any way limit, restrict or alter the obligation or

powers of the authority or any member, director, officer or

representative of the authority to carry out and perform in every detail

each and every covenant, agreement or contract at any time made or

entered into by or on behalf of the authority with respect to its bonds

or for the benefit, protection, or security of the holders thereof. 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

rates per annum not exceeding six per centum per annum payable at such

times within the limitations as to interest cost hereinafter provided,

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, at par or at a

price not exceeding one hundred five per centum of their face value, as

such resolution or resolutions may provide.

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

bonds shall be sold for a price not less than ninety-six per centum of

the par value thereof, plus accrued interest, provided always that the

interest cost to maturity of the monies realized from the sale of such

bonds shall not exceed six per centum per annum.

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 on the purposes to which and the manner in which the

proceeds of sale of any issue of bonds may be applied;

(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 trust deed or indenture securing

the bonds or under which bonds may be issued;

(j) defining the acts or omissions to act which shall constitute a

default in the obligations and duties of the authority to the

bondholders and providing the rights and remedies of the bondholders in

the event of such default, including as a matter of right the

appointment of a receiver, provided, however, that such rights and

remedies shall not be inconsistent with the general laws of this state;

(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.

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 (as distinguished from the power of redemption hereinabove

provided) any bonds issued by it at a price of not more than the

principal amount thereof and accrued interest, and all such bonds shall

be cancelled.

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

trust indenture 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 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 authority in

relation to the construction, maintenance, operation, repair and

insurance of the properties, and the custody, safeguarding and

application of all moneys, and may provide that the properties shall be

constructed and paid for under the supervision and approval of

consulting engineers. The authority may provide by such trust indenture

for the payment of the proceeds of the bonds and the revenues of the

properties 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. All expenses incurred

in carrying out such trust indenture may be treated as a part of the

cost of maintenance, operation and repairs of the properties. If the

bonds shall be secured by a trust indenture the bondholders shall have

no authority to appoint a separate trustee to represent them.

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 or 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 obligation 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.