N.Y. Public Authorities Law § 1266-g: Excess loss fund

§ 1266-g. Excess loss fund. 1. Subject to the provisions of this

section, the authority is authorized to issue bonds and notes, in

accordance with section twelve hundred sixty-nine of this title, in such

principal amounts not in excess of the seventy-five million dollar

limitation established in subdivision four of this section as, in the

opinion of the authority, shall be necessary to provide sufficient funds

to meet the capital and reserve requirements of a trust, pooling

arrangement or other entity established for the purpose of providing

reimbursement and funding to the authority and its subsidiaries, the New

York city transit authority and its subsidiaries and Triborough bridge

and tunnel authority for excess or extraordinary losses for damages to

real or personal property or for the destruction thereof or for personal

injuries or death and for certain property damage losses which may be

incurred or sustained by any of them in connection with the use and

operation of their respective facilities and in the conduct of their

respective activities (the trust, pooling arrangement or other entity

established in order to provide such benefits to such participants being

referred to in this section as the "excess loss fund"). Prior to the

issuance of any bonds or notes, other than refunding bonds or notes,

authorized by this section, the authority shall make a finding that such

issue is expected to result, on a present value basis, in a lower

effective cost to the participating authorities than funding the

requirements of the excess loss fund solely through the payment of

premiums and assessments by such participating authorities.

2. In order to effectuate the purposes of the excess loss fund, the

authority shall, subject to the provisions of this section, have all the

powers provided elsewhere in this title and may:

(a) accept the notes, bonds and other contractual obligations of the

excess loss fund for funds provided to it by the authority;

(b) obtain security for the payment by the excess loss fund of its

notes, bonds and other contractual obligations issued to the authority,

including a pledge of all or any part of the assets and revenues of the

excess loss fund, including its receipts and rights to receive premiums,

assessments, reimbursements and other payments from the participants in

the excess loss fund, which pledge may contain covenants with respect to

the charging and fixing by actuarial estimates, where appropriate, of

premiums, assessments, reimbursements and other payments and the use and

disposition thereof; and

(c) enter into contracts with the excess loss fund and with the

participants therein, on such terms and conditions as the parties may

agree, with respect to the payment of premiums, assessments,

reimbursements and other payments to the excess loss fund and the nature

and extent of the benefits to be paid by the excess loss fund to such

participants.

3. The bonds and notes of the authority authorized by this section

shall not constitute general obligations of the authority, but shall be

special obligations of the authority payable as to principal, redemption

premium, if any, and interest solely from the security, sources of

payment and funds obtained from or on behalf of the excess loss fund,

all in the manner more particularly provided by the authority in the

resolution under which such bonds and notes shall be authorized to be

issued.

4. The aggregate principal amount of bonds and notes issued for the

purposes enumerated in subdivision one of this section shall not exceed

seventy-five million dollars, excluding: (a) bonds and notes issued to

fund costs of issuance and any reasonably required debt service reserve

fund for such bonds or notes; (b) an amount equal to any original issue

discount from the principal amount of any bonds or notes issued; and (c)

bonds and notes issued to refund or otherwise repay bonds or notes

theretofore issued for such purposes, provided, however, that upon any

such refunding or repayment the total aggregate principal amount of

outstanding bonds and notes (including for purpose of such calculation

the principal amount of the refunding bonds or notes then to be issued

and excluding the principal amount of the bonds or notes so to be

refunded or repaid and any amounts excluded under paragraph (a) or (b)

of this subdivision) may be greater than seventy-five million dollars,

only if the present value of the aggregate debt service of the refunding

or repayment bonds or notes to be issued shall not exceed the present

value of the aggregate debt service of the bonds or notes so to be

refunded or repaid. For purposes of paragraph (c) of this subdivision,

the present values of the aggregate debt service of the refunding or

repayment bonds or notes and of the aggregate debt service of the bonds

or notes so to be refunded or repaid, shall be calculated by utilizing

the effective interest rate of the refunding or repayment bonds or

notes, which shall be that rate arrived at by doubling the semi-annual

interest rate (compounded semi-annually) necessary to discount the debt

service payments on the refunding or repayment bonds or notes from the

payment dates thereof to the date of issue of the refunding or repayment

bonds or notes and to the price bid including estimated accrued interest

or proceeds received by the authority including estimated accrued

interest from the sale thereof.

5. The term "excess loss fund" as used in this section shall not

include any trust, pooling arrangements or other entity (a) which

provides or offers to provide reimbursement or funding for losses or

liabilities to any entity other than the authority and its subsidiaries,

the New York city transit authority and its subsidiaries and Triborough

bridge and tunnel authority, or (b) in which any entity other than the

authority and its subsidiaries, the New York city transit authority and

its subsidiaries and Triborough bridge and tunnel authority holds an

equity interest.