N.Y. Public Authorities Law § 1207-b: Issuance of bonds and notes by the authority

§ 1207-b. Issuance of bonds and notes by the authority. 1.

Notwithstanding the provisions of sections twelve hundred through twelve

hundred twenty-one, inclusive, of this title or of any other provisions

of law to the contrary, but subject to the provisions of section twelve

hundred seven-j of this title, the authority shall have the power and is

hereby authorized to borrow money and to issue negotiable bonds and

notes therefor in conformity with applicable provisions of the uniform

commercial code in such principal amount as, in the opinion of the

authority, shall be necessary to provide funds sufficient to pay the

purchase price of no more than seven hundred twenty-four cars for the

rapid transit lines under the jurisdiction of the authority purchased

pursuant to section twelve hundred seven-a of this title, to pay

interest on the bonds and notes of the authority, to establish reserves

to secure such bonds and notes, and to pay all other expenditures of the

authority incident to or incurred in connection with the purchase of

such cars and the authorization, issuance and sale of said bonds and

notes. In no event shall there be outstanding at any one time more than

ninety-two million dollars ($92,000,000) in such bonds and notes.

1-a. The authority may also issue its bonds, notes or other

obligations in such principal amounts as shall be necessary to finance

the construction, purchase, lease or acquisition of, or an equity

interest in, an office building located or to be constructed in the

borough of Brooklyn in the city, provided that (i) all or a portion of

such building is intended to be occupied by the authority and that the

board shall, by resolution, have made findings that the sum of the

capitalized value of all payments due from the authority under such

bonds, notes or other obligations (not including any amounts

attributable to principal repayment) together with any rent payments for

the space in such building to be occupied by the authority and of all

payments required of the authority under any related agreement does not

exceed the capitalized value of those payments which would be made in a

conventional commercial lease transaction for comparable space with an

unrelated party and (ii) not more than an insubstantial portion of any

real property so financed with the proceeds of bonds, notes, or other

obligations is utilized by other than the New York city transit

authority or its designated subsidiary. The term "capitalized value" for

the purposes of this subdivision shall be computed in the manner set

forth in subdivision four of section twelve hundred seven-m of this

title. The metropolitan transportation authority is hereby additionally

authorized from time to time to issue bonds for the purposes of

refunding, redeeming or otherwise paying, including paying by purchase

or tender, bonds issued by the authority for such purposes and to secure

such bonds in the manner set forth in section twelve hundred sixty-nine

of this article.

2. The authority shall have the power from time to time to renew notes

or to issue renewal notes for such purpose, to issue bonds to pay notes,

and whenever it deems refunding expedient, to refund bonds by the

issuance of new bonds and to issue bonds partly to refund bonds and

notes then outstanding and partly for the purposes authorized by

subdivision one of this section. The refunding bonds may be exchanged

for bonds to be refunded, with such cash adjustments as may be agreed,

or may be sold and the proceeds applied to the purchase or payment of

the bonds to be refunded. In no event shall the maturity date of the

refunding bonds be a date beyond thirty-five years from the date the

first bond was issued.

3. Every issue of bonds and notes of the authority shall be special

obligations of the authority payable solely from the moneys and revenues

of the authority derived from the operation of the transit facilities

under its jurisdiction, subject to any agreement with the holders of

particular bonds or notes pledging any particular moneys or revenues.

4. The bonds and notes shall be authorized by resolution of the

authority and 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 five years after

the date of issue of the original note and no bond shall mature more

than thirty-five years from the date of issue. Bonds and notes 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 and to such other terms and conditions as such resolution or

resolutions may provide. The bonds and notes may be sold at public or

private sale for such price or prices as the authority shall determine.

Pending preparation of definitive bonds, the authority may issue interim

receipts which shall be exchanged for such bonds.

5. Any resolution or resolutions authorizing any bonds or notes or any

issue of bonds or notes may contain provisions, which shall be a part of

the contract with the holders of the bonds, or notes thereby authorized,

as to

(a) pledging all or any part of the revenues or other monies of the

authority to secure the payment of the bonds or notes or of any issue of

the bonds or notes, subject to such agreements with bondholders or

noteholders as may then exist;

(b) the rate or rates of fare to be charged and the amounts to be

raised in each year from revenues and the use and disposition of the

revenues;

(c) the setting aside of reserves or sinking funds, and the regulation

and disposition thereof;

(d) limitations on the rights of the authority with respect to the use

and disposition of the cars for which such bonds or notes are issued and

with respect to all other transit facilities of the authority;

(e) limitations on the purpose to which the proceeds of sale of any

issue of bonds or notes then or thereafter to be issued may be applied

and pledging such proceeds to secure the payment of the bonds or notes

or of any issue of the bonds or notes;

(f) limitations on the issuance of additional bonds and notes; the

terms upon which additional bonds and notes may be issued and secured,

and the funding or refunding of outstanding or other bonds and notes;

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

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

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

in which such consent may be given;

(h) vesting in a trustee or trustees such property, 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 or noteholders pursuant to section twelve hundred seven-h

hereof, and limiting or abrogating the right of the bondholders to

appoint a trustee under section twelve hundred seven-h hereof, or

limiting the rights, duties and powers of such trustee;

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

default in the duties of the authority to the holders of its bonds and

notes and providing the rights and remedies of such holders in the event

of default;

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

way affect the security or protection of the bonds and notes.

6. It is the intention hereof that any pledge of revenues or other

moneys made by the authority shall be valid and binding from the time

when the pledge is made; that the 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.

7. Neither the members of the board nor any person executing the bonds

or notes shall be liable personally on the bonds or notes or be subject

to any personal liability or accountability by reason of the issuance

thereof.

8. Subject to such agreements with bondholders or noteholders as may

then exist, the authority shall have power out of any funds available

therefor to purchase bonds or notes. The authority may hold, cancel or

resell such bonds and notes, subject to and in accordance with

agreements with bondholders and noteholders.