N.Y. Public Authorities Law § 1196-f: Bonds and notes of an authority

§ 1196-f. Bonds and notes of an authority. 1. An authority shall have

the power and is hereby authorized from time to time to issue bonds, in

conformity with applicable provisions of the uniform commercial code, in

such principal amounts as it may determine to be necessary to pay the

cost of any water project or projects or for any other corporate

purposes, including incidental expenses in connection therewith. An

authority shall have power from time to time 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 other corporate purpose. Bonds issued by an authority may

be general obligations secured by the faith and credit of the authority

or may be special obligations payable solely out of particular revenues

or other moneys of the authority as may be designated in the proceedings

of the authority under which the bonds shall be authorized to be issued,

subject to any agreements with the holders of outstanding bonds pledging

particular revenues or moneys.

2. An authority is authorized to obtain from any department or agency

of the United States of America or nongovernmental insurer any insurance

or guaranty, to the extent now or hereafter available, as to, or for the

payment or repayment of interest or principal, or both, or any part

thereof, on any bonds or notes issued by the authority and to enter into

any agreement or contract with respect to any such insurance or

guaranty, except to the extent that the same would in any way impair or

interfere with the ability of the authority to perform and fulfill the

terms of any agreement made with the holders of the bonds or notes of an

authority.

3. Bonds shall be authorized by resolution of an authority, be in such

denominations and bear such date or dates, mature at such time or times,

except that bonds and any renewal thereof shall mature within forty

years of the date of their original issuance and notes and any renewal

thereof shall mature within five years of the date of their original

issuance. Such bonds shall be subject to such terms of redemption, bear

interest at such rate or rates payable at such times, be in such form,

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 and conditions as such resolution may provide.

Bonds may be sold at public sale or, upon the approval of the state

comptroller, at private sale for such price or prices as an authority

shall determine, provided that no issue of bonds may be sold at private

sale unless the terms of such sale shall have been approved by writing

by (a) the comptroller, where such sale is not to the comptroller, or

(b) the director of the division of the budget, where such sale is to

the comptroller.

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

bonds by an authority may contain provisions which may be part of the

contract with the holders of the bonds thereby authorized as to:

(a) pledging all or part of its revenues, together with any other

moneys, securities, contracts or property, to secure the payment of the

bonds, subject to such agreements with bondholders as may then exist;

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

and the regulation and disposition thereof;

(c) limitations on the purpose to which the proceeds from the sale of

bonds may be applied;

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

the use of any project or part thereof in connection with which bonds

are issued;

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

which additional bonds may be issued and the refunding of outstanding or

other bonds;

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

bondholders may be amended or abrogated, including the proportion of

bondholders which must consent thereto and the manner in which such

consent may be given;

(g) the creation of special funds into which any revenues or other

moneys may be deposited;

(h) the terms and provisions of any trust deed or indenture securing

the bonds under which the bonds may be issued;

(i) 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 eleven hundred ninety-six-g of this

title and limiting or abrogating the rights of the bondholders to

appoint a trustee under such section or limiting the rights, duties and

powers of such trustee;

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

default in the obligations and duties of the authority to the

bondholders and providing for 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 the state

and other provisions of this title;

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

dispose of any system or any part thereof or other property;

(l) limitations on the amount of revenues and other moneys to be

expended for operating, administrative or other expenses of the

authority;

(m) the payment of the proceeds of bonds, revenues and other moneys to

a trustee or other depository, and for the method of disbursement

thereof with such safeguards and restrictions as the authority may

determine; and

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

affect the security or protection of the bonds or the rights and

remedies of bondholders.

5. In addition to the powers herein conferred upon an authority to

secure its bonds, an authority shall have power in connection with the

issuance of bonds to enter into such agreements as the authority may

deem necessary, consistent or desirable concerning the use or

disposition of its revenues or other moneys or property, including the

mortgaging of any property and the entrusting, pledging or creation of

any other security interest in any such revenues, moneys or property and

the doing of any act, including refraining from doing any act, which an

authority would have the right to do in the absence of such agreements.

An authority shall have power to enter into amendments of any such

agreements within the powers granted to the authority by this title and

to perform such agreements. The provisions of any such agreements may be

made a part of the contract with the holders of bonds of the authority.

6. Any provision of the uniform commercial code to the contrary

notwithstanding, any pledge of or other security interest in revenues,

moneys, accounts, contract rights, general intangibles or other personal

property made or created by an authority shall be valid, binding and

perfected from the time when such pledge is made or other security

interest attaches without any physical delivery of the collateral or

further act, and the lien of any such pledge or other security interest

shall be valid, binding and perfected against all parties having claims

of any kind in tort, contract or otherwise against the authority

irrespective of whether or not such parties have notice thereof. No

instrument by which such a pledge or security interest is created nor

any financing statement need be recorded or filed.

7. Whether or not the bonds of an authority are of such form and

character as to be negotiable instruments under the terms of the uniform

commercial code, the 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 bonds for registration.

8. Neither the directors of an authority nor any person executing

bonds shall be liable personally thereon or be subject to any personal

liability or accountability solely by reason of the issuance thereof.

9. An authority, subject to such agreements with bondholders as then

may exist, shall have power out of any moneys available therefor to

purchase bonds of the authority, which shall thereupon be cancelled, at

a price not exceeding (i) if the bonds are then redeemable, the

redemption price then applicable, plus accrued interest to the next

interest payment date, (ii) if the bonds are not then redeemable, the

redemption price applicable on the first date after such purchase upon

which the bonds become subject to redemption plus accrued interest to

the next interest payment date.

10. An authority shall have power and is hereby authorized to issue

negotiable bond anticipation notes in conformity with applicable

provisions of the uniform commercial code and may renew the same from

time to time but the maximum maturity of any such note, including

renewals thereof, shall not exceed five years from the date of issue of

such original note. Such notes shall be paid from any moneys of the

authority available therefore and not otherwise pledged or from the

proceeds of sale of the bonds of the authority in anticipation of which

they were issued. The notes shall be issued in the same manner as the

bonds and such notes and the resolution or resolutions authorizing the

same may contain any provisions, conditions or limitations which the

bonds or a bond resolution of the authority may contain. Such notes may

be sold at public sale or, upon the approval of the state comptroller,

at private sale. Such notes shall be as fully negotiable as the bonds of

the authority.