N.Y. Public Authorities Law § 1269: Notes, bonds and other obligations of the authority

§ 1269. Notes, bonds and other obligations of the authority. 1. (a)

The authority shall have power and is hereby authorized from time to

time to issue its bonds, notes and other obligations in such principal

amount as, in the opinion of the authority, shall be necessary,

convenient or desirable to effectuate any of its powers and purposes,

including to provide sufficient funds for achieving its purposes,

including the acquisition, establishment, construction, effectuation,

operation, maintenance, renovation, improvement, extension,

rehabilitation or repair of any transportation facility, the payment of

principal, redemption premium and interest on bonds, notes and other

obligations of the authority, establishment of reserves to secure such

bonds notes and other obligations, the provision of working capital and

all other expenditures of the authority and its subsidiary corporations,

and New York city transit authority and its subsidiary corporations

incident to and necessary or convenient to carry out their purposes and

powers. Such bonds, notes or other obligations may be issued for an

individual transportation facility or issued on a consolidated basis for

such groups or classes of facilities and projects as the authority in

its discretion deems appropriate and be payable from and secured

separately or on a consolidated basis by, among other things, all or any

portion of such revenues and other monies and assets of the authority

and its subsidiary corporations, and New York city transit authority and

its subsidiary corporations as the authority determines in accordance

with the provisions of section twelve hundred seventy-d of this title;

(b) The authority shall have power, from time to time, to issue

renewal notes, to issue bonds to refund, redeem or otherwise pay,

including by purchase or tender, notes of the authority and its

subsidiary corporations, and New York city transit authority and its

subsidiary corporations and whenever it deems refunding, redemption or

payment expedient, to refund, redeem or otherwise pay, including by

purchase or tender, any bonds of the authority and its subsidiary

corporations, New York city transit authority and its subsidiary

corporations and Triborough bridge and tunnel authority by the issuance

of new bonds, whether the bonds to be refunded, redeemed or otherwise

paid have or have not matured, and to issue bonds partly for such

purpose and partly for any other purpose and to otherwise refund,

redeem, acquire by purchase or tender, or in any other way repay any

outstanding notes, bonds or other obligations of the authority, any of

its subsidiary corporations, New York city transit authority, any of its

subsidiary corporations and Triborough bridge and tunnel authority;

(c) Every issue of its notes, bonds or other obligations shall be

general obligations or special obligations. Every issue of general

obligations of the authority shall be payable out of any revenues or

monies of the authority, subject only to any agreements with the holders

of particular notes or bonds pledging any particular receipts or

revenues. Every issue of special obligations shall be payable out of any

revenues, receipts, monies or other assets of the authority and its

subsidiary corporations, the New York city transit authority and its

subsidiary corporations and the Triborough bridge and tunnel authority

identified for such purposes in accordance with agreements with the

holders of particular notes, bonds or other obligations. The authority

may issue transportation revenue special obligation bonds, notes or

other obligations as provided in section twelve hundred seventy-d of

this title;

1-a. Pension obligation bonds. The authority may from time to time

issue its bonds and notes in such principal amounts as, in the opinion

of the authority, shall be necessary to finance the unfunded pension

fund liabilities of the authority, its affiliates and subsidiaries,

provided, however, that in no event shall the cumulative amounts of

bonds and notes issued pursuant to the authority of this subdivision

exceed one billion two hundred million dollars or sixty percent of such

unfunded pension fund liabilities, whichever is less, and provided,

further, that no bonds shall be issued under this subdivision for a term

longer than twenty years. The authority may not issue bonds or notes in

any twelve month period in a cumulative principal amount in excess of

forty percent of the total amount permitted to be issued under this

subdivision. Prior to the issuance of any bonds or notes, 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 authority than funding the

unfunded pension fund liability solely through the payment of annual

amounts to the pension fund, assuming that the principal component of

the unfunded liability will be amortized over the same number of years

as the term of the bonds or notes and that the interest payable thereon

is the actuarial rate of interest determined by the actuary for the

pension fund at the time of the issuance of such bonds or notes. The

aggregate principal amount of bonds and notes issued for such purposes

may be increased to fund costs of issuance and may reasonably required

debt service of other reserve funds. Bonds and notes may be issued to

refund or otherwise repay bonds or notes theretofore issued for such

purposes; provided, however, that upon any such refunding or repayment

(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 also

excluding any amounts used to pay costs of issuance and reasonably

required debt service or other reserve funds) 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 the preceding sentence, 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.

Debt service on the bonds or notes shall be structured so that the

economic benefits thereof shall be relatively uniform for each full year

throughout the term of the bonds or notes. Beginning with the date of

first issuance of bonds under this section, the authority and its

subsidiaries shall make annual payments into the pension fund in amounts

at least equal to the current pension contribution liability applicable

to such year. The net proceeds of the bonds or notes intended to be

invested in non-debt securities may be invested by the recipient pension

fund in a fiscally prudent manner in securities consistent with any

trust indentures and all applicable state and federal law over a

reasonable period of time not less than 30 days following the issuance

of the bonds or notes. The operating budget savings associated with the

issuance of pension obligation bonds during the period from April first,

two thousand five, through March thirty-first, two thousand ten,

pursuant to this subdivision shall be dedicated to reducing service

eliminations projected to occur within that period.

2. The notes, bonds and other obligations shall be authorized by

resolution approved by not less than a majority vote of the whole number

of members of the authority then in office, except that in the event of

a tie vote the chairman shall cast one additional vote. Such notes,

bonds and other obligations shall bear such date or dates, and shall

mature at such time or times, in the case of any such note or any

renewals thereof not exceeding five years from the date of issue of such

original note, and in the case of any such bond not exceeding fifty

years from the date of issue, as such resolution or resolutions may

provide. The notes, bonds and other obligations 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 as such resolution or

resolutions may provide. The notes, bonds and other obligations of the

authority may be sold by the authority, at public or private sale, at

such price or prices as the authority shall determine. No notes or bonds

of the authority may be sold by the authority at private sale, however,

unless such sale and the terms thereof have been approved in writing by

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

the director of the budget, where such sale is to the comptroller.

3. Any resolution or resolutions authorizing any notes, bonds or any

issue thereof, or any other obligations of the authority, may contain

provisions, which shall be a part of the contract with the holders

thereof, as to:

(a) pledging all or any part of the revenues of the authority or of

any of its subsidiary corporations or New York city transit authority or

any of its subsidiary corporations or Triborough bridge and tunnel

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

thereof, or any other obligations of the authority, subject to such

applicable agreements with bondholders, noteholders, or holders of other

obligations of the authority, the New York city transit authority and

its subsidiary corporations, and Triborough bridge and tunnel authority

as may then exist;

(b) pledging all or any part of the assets of the authority or of any

of its subsidiary corporations or New York city transit authority or any

of its subsidiary corporations or Triborough bridge and tunnel authority

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

bonds, or any other obligations of the authority, subject to such

agreements with noteholders, bondholders, or holders of other

obligations of the authority, the New York city transit authority and

its subsidiary corporations, and Triborough bridge and tunnel authority

as may then exist;

(c) the use and disposition of revenues, including fares, tolls,

rentals, rates, charges and other fees, made or received by the

authority, any of its subsidiary corporations, New York city transit

authority or any of its subsidiary corporations, or Triborough bridge

and tunnel authority;

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

and disposition thereof;

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

bonds or other obligations of the authority may be applied and pledging

such proceeds to secure the payment of the notes or bonds or of any

issue thereof or of other obligations;

(f) limitations on the issuance of additional notes, bonds or other

obligations of the authority; the terms upon which additional notes,

bonds or other obligations of the authority may be issued and secured;

the refunding of outstanding or other notes, bonds or other obligations

of the authority;

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

noteholders, bondholders, or holders of other obligations of the

authority, may be amended or abrogated, the amount of notes, bonds or

other obligations of the authority the holders of which must consent

thereto, and the manner in which such consent may be given;

(h) limitations on the amount of monies to be expended by the

authority or any of its subsidiary corporations or New York city transit

authority or any of its subsidiary corporations or Triborough bridge and

tunnel authority for operating, administrative or other expenses of the

authority or any of its subsidiary corporations or New York city transit

authority or any of its subsidiary corporations or Triborough bridge and

tunnel authority;

(i) 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, noteholders or holders of other obligations of the

authority pursuant to this title, and limiting or abrogating the right

of the bondholders, noteholders or holders of other obligations of the

authority to appoint a trustee under this article or limiting the

rights, powers and duties of such trustee;

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

way affect the security or protection of the notes, bonds or other

obligations of the authority.

4. In addition to the powers herein conferred upon the authority to

secure its notes, bonds and other obligations, the authority shall have

power in connection with the issuance of notes, bonds and other

obligations to enter into such agreements as the authority may deem

necessary, convenient or desirable concerning the use or disposition of

the monies or property of any of the authority, its subsidiary

corporations, New York city transit authority, or any of its subsidiary

corporations, or Triborough bridge and tunnel authority, including the

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

of any other security interest in any such monies or property and the

doing of any act (including refraining from doing any act) which the

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

The 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 the notes, bonds and

other obligations of the authority.

5. It is the intention hereof that any pledge, mortgage or security

instrument made by the authority shall be valid and binding from the

time when the pledge, mortgage or security instrument is made; that the

monies or property so pledged, mortgaged and entrusted and thereafter

received by the authority, or any of its subsidiary corporations shall

immediately be subject to the lien of such pledge, mortgage or security

instrument without any physical delivery thereof or further act; and

that the lien of any such pledge, mortgage or security instrument shall

be valid and binding as against all parties having claims of any kind in

tort, contract or otherwise against the authority, or any of its

subsidiary corporations, irrespective of whether such parties have

notice thereof. Neither the resolution nor any mortgage, security

instrument or other instrument by which a pledge, mortgage lien or other

security is created need be recorded or filed and neither the authority

nor, any of its subsidiary corporations shall be required to comply with

any of the provisions of the uniform commercial code.

6. Neither the members of the authority, the New York city transit

authority or the Triborough bridge and tunnel authority nor any person

executing the notes, bonds or other obligations shall be liable

personally on the notes, bonds or other obligations or be subject to any

personal liability or accountability by reason of the issuance thereof.

7. The authority, subject to such agreements with the holders of

notes, bonds or other obligations as may then exist, shall have power

out of any funds available therefor to purchase notes, bonds or other

obligations of the authority. The authority may hold, cancel or sell

such bonds, notes and other obligations, subject to and in accordance

with agreements with such holders.

8. Neither the state nor the city of New York shall be liable on

notes, bonds or other obligations of the authority and such notes, bonds

and other obligations shall not be a debt of the state or the city of

New York, and such notes, bonds and other obligations shall contain on

the face thereof, or in an equally prominent place, a statement to such

effect.

9. So long as the authority has outstanding any bonds, notes or other

obligations issued pursuant to this section or any bonds, notes or other

obligations issued or incurred pursuant to section twelve hundred

sixty-six-c of this title, none of the authority or any of its

subsidiary corporations, New York city transit authority or any of its

subsidiary corporations, or Triborough bridge and tunnel authority 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 subsidiary corporations, New York city transit

authority or any of its subsidiary corporations, or Triborough bridge

and tunnel authority to be or become a debtor under chapter nine or said

corresponding chapter, chapters or sections during any such period.

10. The term "monies" as used in this section shall include, but not

be limited to, all operating subsidies provided by (i) any public

benefit corporation, including without limitation transfers of operating

surplus by Triborough bridge and tunnel authority pursuant to section

twelve hundred nineteen-a of this article, or (ii) any governmental

entity, federal, state or local.

11. Any resolution or agreement authorizing the issuance of bonds,

notes or other obligations pursuant to this section may, in addition,

authorize and provide for the issuance of lease obligations of the

authority which may be issued for the purposes and on the terms and

conditions under which the bonds, notes and other obligations authorized

under this section may be issued, and may be secured in the same manner

as such bonds, notes and other obligations, and which resolution with

respect to such lease obligations, may contain such other provisions

applicable to bonds, notes and other obligations not inconsistent with

the provisions of this section, as the authority may determine.

12. The aggregate principal amount of bonds, notes or other

obligations issued after the first day of January, nineteen hundred

ninety-three by the authority, the Triborough bridge and tunnel

authority and the New York city transit authority to fund projects

contained in capital program plans approved pursuant to section twelve

hundred sixty-nine-b of this title for the period nineteen hundred

ninety-two through two thousand twenty-nine shall not exceed one hundred

fifteen billion five hundred million dollars. Such aggregate principal

amount of bonds, notes or other obligations or the expenditure thereof

shall not be subject to any limitation contained in any other provision

of law on the principal amount of bonds, notes or other obligations or

the expenditure thereof applicable to the authority, the Triborough

bridge and tunnel authority or the New York city transit authority. The

aggregate limitation established by this subdivision shall not include

(i) obligations issued to refund, redeem or otherwise repay, including

by purchase or tender, obligations theretofore issued either by the

issuer of such refunding obligations or by the authority, the New York

city transit authority or the Triborough bridge and tunnel authority,

(ii) obligations issued to fund any debt service or other reserve funds

for such obligations, (iii) obligations issued or incurred to fund the

costs of issuance, the payment of amounts required under bond and note

facilities, federal or other governmental loans, security or credit

arrangements or other agreements related thereto and the payment of

other financing, original issue premiums and related costs associated

with such obligations, (iv) an amount equal to any original issue

discount from the principal amount of such obligations or to fund

capitalized interest, (v) obligations incurred pursuant to section

twelve hundred seven-m of this article, (vi) obligations incurred to

fund the acquisition of certain buses for the New York city transit

authority as identified in a capital program plan approved pursuant to

chapter fifty-three of the laws of nineteen hundred ninety-two, (vii)

obligations incurred in connection with the leasing, selling or

transferring of equipment, and (viii) bond anticipation notes or other

obligations payable solely from the proceeds of other bonds, notes or

other obligations which would be included in the aggregate principal

amount specified in the first sentence of this subdivision, whether or

not additionally secured by revenues of the authority, or any of its

subsidiary corporations, New York city transit authority, or any of its

subsidiary corporations, or Triborough bridge and tunnel authority.