N.Y. Public Authorities Law § 1207-m: Transit projects

§ 1207-m. Transit projects. 1. The term "transit project" as used in

this section shall have the meaning given to such term from time to time

in section twelve hundred sixty-six-c of this article. The provisions of

this section shall be controlling and the authority and its subsidiaries

shall have the powers provided in this section notwithstanding any

contrary provision of this title or of local law or of any lease or

other agreement with the city.

2. (a) The authority is hereby authorized to request the metropolitan

transportation authority to undertake any transit project and the

authority and its designated subsidiaries are each hereby authorized (i)

to enter into agreements with the metropolitan transportation authority

concerning transit projects; (ii) to acquire in its own name by gift,

purchase or condemnation any real or personal property (or any interest

therein) which is needed or useful for or in connection with such

project, and to surrender the use, occupancy, control or possession of

or to transfer the same, or any other such real or personal property (or

any interest therein) which it owns, leases, operates or controls, to

the metropolitan transportation authority or its designee; (iii) to

accept a transfer, transfer back, lease or sublease of any such project

or part thereof upon its completion; and (iv) to make its agents,

employees and facilities available to the metropolitan transportation

authority in connection therewith.

(b) The authority and its subsidiary corporation is each hereby

authorized to sell or transfer, without regard as to how or from whom

acquired, all or part of its interest in any equipment which is deemed

to be a mass commuting vehicle under the United States internal revenue

code or the regulations thereunder, including, without limitation, any

of the same obtained as transit projects or obtained from or financed

with money received from the Triborough bridge and tunnel authority, for

such consideration and on such terms or conditions as it may deem

appropriate, and to obtain a lease from the transferee on such terms and

conditions and for such period as it may deem appropriate pursuant to

which it may operate, use, control or possess such mass commuting

vehicle in furtherance of the statutory purposes of the authority and

its subsidiaries, provided (i) such lease contains an option to the

authority or its subsidiary corporation to repurchase its interest at

the expiration of the scheduled lease term for nominal consideration,

and (ii) the aggregate of the regularly scheduled rental payments which

the authority or its subsidiary corporation is obligated to make

pursuant to such lease during each twelve month period of the lease term

shall not exceed the aggregate amount receivable, whether by principal

or interest, by the authority or its subsidiary corporation from its

transferee during each such twelve month period. Without limitation of

the foregoing, any lease entered into pursuant hereto may also contain

provisions requiring the authority or its subsidiary corporation to

indemnify the transferee for any loss resulting from the loss or

destruction of any mass commuting vehicle which is the subject of such

lease, or any loss arising out of any misrepresentation, act, or

omission of the authority or its subsidiary in connection with such

lease, and requiring the authority or its subsidiary corporation to

undertake to replace, repair or restore any such mass commuting vehicle,

but such obligations shall not be deemed regularly scheduled rental

payments for purposes of the preceding sentence. Rental payments and

other payments or costs incurred by the authority or its subsidiary

corporation in discharge of its obligations under any lease entered into

as hereinabove provided shall not be deemed capital costs for the

purposes of section twelve hundred three or twelve hundred three-a of

this title, and the considerations received by the authority or its

subsidiary corporation in connection with any transactions entered into

pursuant to the authorization of this paragraph may be expended free of

any restriction set forth in subparagraph (ii) of paragraph (b) of

subdivision one of section twelve hundred three or in paragraph (c) of

subdivision five of section twelve hundred three-a of this title.

(c) Neither the authority nor its subsidiary shall enter into any

transaction authorized by paragraph (b) of this subdivision unless the

following standards and procedures have been met:

(i) notice of intention to negotiate shall be published in at least

one newspaper of general circulation, and a copy thereof shall be mailed

to all parties who have requested notification from the authority or its

subsidiary to engage in transactions of this type. Such notice shall

describe the nature of the proposed transaction and the factors subject

to negotiation, which shall include, but not be limited to, the price to

be paid to the authority or its subsidiary;

(ii) the authority or its subsidiary shall negotiate with those

respondents whose response complies with the requirements set forth in

the notice;

(iii) the board of the authority or its subsidiary shall resolve on

the basis of particularized findings relevant to the factors negotiated

that such transaction will provide maximum available financial benefits,

consistent with other defined objectives and requirements.

(d) The authority and its subsidiary shall provide to the governor,

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

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

notice of each lease entered into pursuant to paragraph (b) of this

subdivision and supporting documentation of compliance by the authority

and its subsidiary with subparagraphs (i), (ii) and (iii) of paragraph

(c) of this subdivision.

(e) Paragraphs (c) and (d) of this subdivision shall be of no force

and effect with respect to any lease transaction entered into pursuant

to a commitment approved prior to January first, nineteen hundred

eighty-five by the board of the authority or its subsidiary or the board

of the metropolitan transportation authority.

3. The authority and its designated subsidiaries are hereby

authorized, in connection with any transit project, to pay or agree to

pay, in a manner and on terms and conditions satisfactory to the

metropolitan transportation authority, any portion of the costs to the

metropolitan transportation authority of such transit project and the

financing thereof which is not paid to the metropolitan transportation

authority from any federal, state or local aid or assistance or from any

other moneys made available or payable to the metropolitan

transportation authority by others for such project.

4. (a) Such agreements with the metropolitan transportation authority

may, without limitation, contain provisions obligating the authority or

its designated subsidiary to:

(i) issue its notes or bonds, or execute and deliver its lease,

sublease and other such contractual obligations, in payment for a

transfer, lease or sublease of a transit project to any of them,

provided, however, that in no event shall the aggregate principal amount

of all notes and bonds together with the capitalized value of all lease,

sublease and other such contractual obligations, exceed the sum of one

billion six hundred million dollars, excluding from such limitation (A)

the principal amount of any bonds or notes of the authority to the

extent the amount thereof is paid, is payable or has been agreed to be

paid by the federal government or any agency or instrumentality thereof

to the authority or to the holders of such bonds or notes, (B) the

principal amount of any bonds or notes of the authority issued to refund

or otherwise repay other obligations issued for such transit projects,

(C) the principal amount of any bonds or notes and the capitalized value

of any lease, sublease or other such contractual obligation, to the

extent such obligations are paid or agreed to be paid, subject to annual

appropriation, under service contracts issued by the state to the

metropolitan transportation authority for the benefit of the authority

or its subsidiaries pursuant to the provisions of section sixteen of the

transportation systems assistance and financing act of 1981, or under

any similar contract of the metropolitan transportation authority or the

authority with any other governmental entity for the benefit of the

authority or its subsidiaries, (D) the principal amount of any bonds or

notes of the authority issued to the metropolitan transportation

authority in connection with the funding of any debt service reserve

fund required by any resolution of the metropolitan transportation

authority pursuant to which special obligation bonds of that authority

to fund a transit project were issued, and (E) a principal amount of any

bonds or notes of the authority equal to the amount of any original

issue discount from the principal amount of the special obligation bonds

or notes issued by the metropolitan transportation authority in

connection with the financing of a transit project by that authority;

(ii) give security for the payment of such notes, bonds, lease,

sublease or other contractual obligations, including a pledge of all or

any part of its revenues or other moneys, which pledge may contain

covenants with respect to the charging and fixing of fares, fees and

rentals, the use and disposition of such fares, fees, rentals and other

charges, and the setting aside of reserves therefrom.

(b) Such agreements, and any notes, bonds, lease, sublease or other

contractual obligations issued or entered into by the authority or its

designated subsidiary pursuant thereto, may, without limitation, also

contain provisions as to:

(i) limitations with respect to the use and disposition of transit

projects and with respect to any other transit facilities;

(ii) limitations on the issuance of additional bonds, notes, lease,

sublease or other contractual obligations, the terms upon which they may

be secured and the funding or refunding thereof;

(iii) with respect to bonds or notes, vesting in a trustee or trustees

such property rights, powers and duties in trust as it may determine,

which rights, powers and duties may include, but shall not be limited

to, those set forth in section twelve hundred seven-h of this title;

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

default and providing rights and remedies in the event of default;

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

way affect the security or protection of the metropolitan transportation

authority or any lessor; and

(vi) consenting to the extending or assignment by the metropolitan

transportation authority or by any lessor to the holders of any of its

bonds, notes or lease obligations of all of the benefits and rights of

the metropolitan transportation authority or of such lessor provided by

any such agreement or other instrument.

(c) The term "revenues" as used in this subdivision shall include all

those moneys referred to in section twelve hundred of this article, as

well as all operating subsidies provided by any public benefit

corporation or by any governmental entity, federal, state or local.

(d) The term "capitalized value" as used in this subdivision shall

mean the present value of all future payments required under a lease,

sublease and other such contractual obligation discounted at a rate of

interest determined on the basis of the net interest cost of the last

metropolitan transportation authority's special obligation bonds issued

prior to the execution of any such lease, sublease or other contractual

obligation or, if no such bonds have been issued, on the basis of the

net interest cost of the last bonds issued by the Triborough bridge and

tunnel authority, issued in payment for the transfer, lease or sublease

of any such transit projects.

5. It is the intention hereof that, subject to such agreements with

bondholders or noteholders as may then exist, any pledge of revenues or

other moneys made by the authority or its subsidiaries 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 or its

subsidiaries 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 or its subsidiaries irrespective of whether such parties have

notice thereof. Neither the agreement nor any other instrument by which

a pledge is created need be recorded.

6. So long as the authority or any of its subsidiaries shall have any

outstanding and unpaid obligation in connection with a transit project,

the authority and such subsidiaries shall have the power at all times to

fix or adjust the rate or rates of fares, fees, rentals or other charges

to be charged for the use of their transit facilities as may, together

with all other lawfully available moneys, be necessary in their judgment

to produce sufficient revenues to pay such obligations as the same

become due, in addition to paying as the same shall become due expenses

of operation of the transit facilities and satisfying all other

obligations of the authority and such subsidiaries. No acts or

activities taken or proposed to be taken by the authority pursuant to

this subdivision shall be deemed to be "actions" for the purposes or

within the meaning of article eight of the environmental conservation

law.

7. (a) In connection with (i) the lease between the city and the

authority dated June first, nineteen hundred fifty-three, and (ii) the

lease between the city and the Manhattan and Bronx surface transit

operating authority dated March twentieth, nineteen hundred sixty-two

(such leases, as heretofore supplemented, amended or renewed, and the

tenancies originally created thereby, being referred to in this section

as "the existing leases"), the city, acting either by the mayor alone or

by resolution of the board of estimate, or by instruments authorized by

such resolution, and the authority are authorized to enter into

agreements for renewal or extension of the existing leases, or for new

leases, for such terms of years and upon such other terms and conditions

as the parties thereto shall agree and the metropolitan transportation

authority shall approve, provided that under the terms thereof, the

rights, privileges and obligations of the parties are not inconsistent

with the provisions of, or in derogation of the powers of the authority

all as provided in title nine of article five of this chapter, and

provided further that such agreements shall in no way impair the rights

or powers of the authority or the Manhattan and Bronx surface transit

operating authority to fulfill the terms of any contract made by either

of them with the holders of any of their then outstanding bonds or

notes, and such agreements shall provide that such leases may not be

terminated or permitted to expire or be amended in any way inconsistent

with the provisions of any agreement, bond, note, lease, sublease or

other contractual obligation given or made by either of them in

connection with a transit project. Neither the provisions of section one

hundred ninety-seven-c of the New York city charter, relating to a

uniform land use review procedure, nor the provisions of any other local

law of like or similar import shall apply to the renewal or extension of

the existing leases or to the making of new leases as herein provided.

(b) Notwithstanding the provisions of any other law, general, special

or local, or the provisions of the existing leases, if either of the

agreements authorized by paragraph (a) above is not entered into, but a

note, bond, lease, sublease or other contractual obligation for a

transit project has been issued or entered into, then (i) no party to an

existing lease may terminate the same, serve any notice of termination

pursuant thereto, exercise any option to terminate reserved therein or

permit the expiration thereof, (ii) the city shall not in any way limit

or disturb any right of the tenant to use, occupy, control and possess

any of the properties, facilities or revenues which are the subject of

such existing lease, and (iii) the city shall not seek to enforce such

existing lease in any way inconsistent with or contrary to the manner in

which such existing lease had been administered prior to the enactment

of this section or inconsistent with or contrary to the interests of the

metropolitan transportation authority or any lessor under any agreement,

notes, bonds, lease, sublease or other contractual obligations of the

authority or any of its subsidiaries issued or entered into in

connection with a transit project (and to the extent the provisions of

such leases conflict at any time or in any manner with the provisions of

any such note, bond, lease, sublease or other contractual obligation,

the provisions of such note, bond, lease, sublease or other contractual

obligation shall be controlling and conflicting provisions of the leases

with the city shall be disregarded), unless prior thereto the city has

satisfied all of such outstanding notes, bonds or other contractual

obligations and provided for the termination of all such agreements,

leases and subleases, all in accordance with their terms. If and to the

extent moneys are paid by the city to the authority or its subsidiaries

to satisfy their obligations to the metropolitan transportation

authority under such instruments, the authority and such subsidiaries

shall remit such moneys to the metropolitan transportation authority,

which shall, in turn, apply the same to the satisfaction and termination

of its own notes, bonds and leases issued or entered into in connection

with a transit project in accordance with their terms.

(c) Upon termination or expiration of a new lease or of a renewed or

extended existing lease as permitted in paragraph (a) of this

subdivision, or upon satisfaction of the requirements of paragraph (b)

of this subdivision, title to any real or personal property (or any

interest therein) constituting all or any part of a transit project then

vested in the authority or any of its subsidiaries or the metropolitan

transportation authority pursuant to the provisions of this chapter

shall be transferred without further consideration or payment to the

city.

8. The state of New York does hereby pledge to and agree with the

authority and its subsidiaries and the metropolitan transportation

authority and the holders of bonds or notes or lease, sublease or other

contractual obligations issued by any of them in connection with a

transit project or in connection with the transfer of the interest of

any of them in and the lease from the transferee of any property

furnished to it pursuant to chapter twelve of the laws of nineteen

hundred seventy-nine or section fifteen of chapter three hundred

fourteen of the laws of nineteen hundred eighty-one, or in connection

with any transaction entered into pursuant to the authorization of

paragraph (b) of subdivision two of this section, that the state will

not limit or alter the denial of authority under subdivision eleven of

this section, or the rights and powers vested in the authority and its

subsidiaries by this title to fulfill the terms of any agreement made by

any of them with the metropolitan transportation authority or with such

holders, or in any way impair their rights and remedies until such

agreements, bonds, notes, and obligations, together with the interest

thereon and all costs and expenses in connection with any action or

proceedings by or on behalf of the metropolitan transportation authority

or such holders, are fully met and discharged. The authority and its

subsidiaries are each authorized to include this pledge and the

agreement of the state in any agreement with the holders of such bonds

or notes or lease, sublease or other obligations and in any agreement

with the metropolitan transportation authority relating to a transit

project which may extend the same to the holders of its bonds, notes and

lease obligations.

9. The provisions of this section and of all agreements undertaken by

the authority or any of its subsidiaries in accordance therewith shall

in all respects be subject to the rights of the holders of any

outstanding bonds or notes of the authority and its subsidiaries.

10. In connection with the negotiation, award and implementation of

contracts of the authority relating to transit projects, the provisions

of paragraphs (a), (b), (c) and (d) of subdivision thirteen of section

twelve hundred sixty-six-c of this article shall apply to the authority

as if it were the "authority" referred to therein, and the officer

designated by the metropolitan transportation authority pursuant to

paragraph (e) of such subdivision shall perform the duties therein

described with respect to such contracts of the authority.

11. So long as the authority or any of its subsidiaries, or

metropolitan transportation authority, shall have outstanding any notes,

bonds, lease, sublease or other contractual obligations authorized by

this section or section twelve hundred sixty-six-c or twelve hundred

sixty-nine of this article, or which have been issued or incurred in

connection with the transfer of the interest of any of them in and the

lease from the transferee of any property furnished pursuant to chapter

twelve of the laws of nineteen hundred seventy-nine or section fifteen

of chapter three hundred fourteen of the laws of nineteen hundred

eighty-one, neither the authority nor any of its subsidiaries shall have

the authority to file a voluntary petition under chapter nine of the

federal bankruptcy code, or such corresponding chapter, chapters, or

sections as may, from time to time, be in effect, and neither any public

officer nor any organization, entity or other person shall authorize the

authority or any of its subsidiaries to be or become a debtor under said

chapter nine or said corresponding chapter, chapters or sections during

any such period.

12. A project financed by the authority's issuance of its bonds, notes

or other obligations, pursuant to subdivision one-a of section twelve

hundred seven-b of this title shall be deemed to constitute a transit

project for the purposes of this section and any notes, bonds, lease,

sublease or other contractual obligations with respect to such project

shall, for purposes of this section, be deemed to have been authorized

by this section; provided, however, that such project shall not be

deemed to constitute part of any capital program plan for the purposes

of section twelve hundred sixty-nine-b of this article nor shall the

principal amounts of any bonds or notes, nor the capitalized value of

any lease, sublease, or other contractual obligation of the authority,

issued or entered into by the authority pursuant to such subdivision

one-a, be included in any computation pursuant to subdivision four of

this section.