N.Y. Public Authorities Law § 1680-q*2: Self-insured bond financing

* § 1680-q. Self-insured bond financing. 1. As used in this section

the following terms shall have the following meanings:

(a) "Ancillary bond facility" means any interest rate exchange or

similar agreement or any bond insurance policy, letter of credit or

other credit enhancement facility, liquidity facility, guaranteed

investment or reinvestment agreement, or other similar agreement,

arrangement or contract.

(b) "Benefited party" means any person, firm or corporation that

enters into an ancillary bond facility with the authority according to

the provisions of this section.

(c) "Bonds" means any bonds, notes, certificates of participation and

other evidence of indebtedness issued by the authority pursuant to

subdivision five of this section.

(d) "Bond owners or owners of bonds" means any registered owners of

bonds.

(e) "Chair" means the chair of the workers' compensation board.

(f) "Code" means the United States Internal Revenue Code of 1986, as

amended.

(g) "Costs of issuance" means any item of expense directly or

indirectly payable or reimbursable by the authority and related to the

authorization, sale, or issuance of bonds, including, but not limited

to, underwriting fees and fees and expenses of professional consultants

and fiduciaries.

(h) "Debt service" means actual debt service, comprised of principal,

interest and associated costs, as defined in section fifty-c of the

workers' compensation law.

(i) "Director of the budget" or "director" means the director of the

budget of the state of New York.

(j) "Financing costs" means all costs of issuance, capitalized

interest, capitalized operating expenses of the authority and, pursuant

to the self-insured bond financing agreement, fees, cost of any

ancillary bond facility, and any other fees, discounts, expenses and

costs related to issuing, securing and marketing the bonds including,

without limitation, any net original issue discount.

(k) "Investment securities" shall have the same meaning as set forth

in section one thousand six hundred eighty-l of this title.

(l) "Interest rate exchange or similar agreement" means a written

contract entered into in connection with the issuance of bonds or with

such bonds outstanding with a counterparty to provide for an exchange or

swap of payments based upon fixed and/or variable interest rates, and

shall be for exchanges in currency of the United States of America only.

(m) "Net proceeds" means the amount of proceeds remaining following

each sale of bonds which are not required by the authority for purposes

of this section to pay or provide for debt service or financing costs,

as provided in the self-insured bond financing agreement.

(n) "Operating expenses" means the reasonable or necessary operating

expenses of the authority for purposes of this section, including,

without limitation, the costs of: retention of auditors, preparation of

accounting and other reports, maintenance of the ratings on the bonds,

any operating expense reserve fund, insurance premiums, ancillary bond

facilities, rebate payments, annual meetings or other required

activities of the authority, and professional consultants and

fiduciaries.

(o) "Outstanding", when used with respect to bonds, shall exclude

bonds that shall have been paid in full at maturity, or shall have

otherwise been refunded, redeemed, defeased or discharged, or that may

be deemed not outstanding pursuant to agreements with the holders

thereof.

(p) "Pledged assessments revenues", "pledged revenues" or "pledged

assessments" means receipts of the assessments imposed pursuant to

section one hundred fifty-one of the workers' compensation law and

pledged for the payment of debt service on the bonds or amounts due

pursuant to an ancillary bond facility, including the right to receive

same.

(q) "Self-insurer offset fund" shall mean the fund composed of

revenues, including those obtained by the bonds issued under this

section, which shall be used solely for the purposes described in

subdivision four of this section.

(r) "Self-insured employer" means individual and group self-insured

employers established in accordance with section fifty of the workers'

compensation law.

(s) "State" means the state of New York.

(t) "Self-insured bond financing agreement" or "financing agreement"

means an agreement authorized and created pursuant to subdivision four

of this section and section fifty-c of the workers' compensation law, as

same by its terms and bond proceedings, may be amended.

2. The authority is hereby authorized to issue bonds to reduce

assessments imposed on self-insured employers under section fifty of the

workers' compensation law as a result of the unfunded claims of

individual and group self-insurers. The authority may enter into one or

more self-insured bond financing agreements described in section fifty-c

of the workers' compensation law. All of the provisions of the public

authorities law relating to bonds and notes of the dormitory authority

which are not inconsistent with the provisions of this section shall

apply to obligations authorized by this section, including but not

limited to the power to establish adequate reserves therefor and to

issue renewal notes or refunding bonds thereof. The provisions of this

section shall apply solely to obligations authorized by this section.

3. It is found and declared that unfunded claims in either the

individual or group self-insurance trust program will, absent provision

for long-term financing, result in imposition of costs on all

self-insurers through assessments; that such unfunded claims and

assessments may have a detrimental impact on businesses and

not-for-profit corporations in New York state and on the provision of

services to New York residents; that without financing the board may be

required to impose higher assessments to pay such unfunded claims; that

financing will allow the workers' compensation board to purchase one or

more assumptions of workers' compensation liability policies that will

limit the long term losses from these unfunded claims; that the bonds

will provide a more efficient means of covering unfunded claims than the

current system of assessment on all self-insureds; that bonds issued by

the authority and secured by assessments levied, for the governmental

purpose of funding assumption of workers' compensation liability

policies, amortized over a substantial period would allow the state to

limit liabilities and the assessments needed to pay them, thereby

furthering the policy of the state to reduce the costs of workers'

compensation and to improve the business climate in the state and the

ability of not-for-profit corporations to perform essential services

while compensating injured workers; that all costs of the authority in

relation to this section shall be paid from assessments provided for in

the workers' compensation law; and that, therefore, the provisions of

this section are for the public benefit and good and the authorization

as provided in this section for the issuance of revenue obligations of

the authority is declared to be for a public purpose and the exercise of

an essential governmental function.

4. (a) The authority, the commissioner of taxation and finance and the

chair, in consultation with the director of the budget shall execute a

financing agreement prior to the issuance of any bonds. Such agreement

shall contain such terms and conditions as are necessary to carry out

and effectuate the purposes of this section, including covenants with

respect to the assessments and enforcement of the assessments, the

application and use of the proceeds of the sale of bonds to preserve the

tax exemption on the bonds, the interest on which is intended to be

exempt from taxation. The state shall not be authorized to make any

covenant, pledge, promise or agreement purporting to bind the state with

respect to pledged revenues, except as otherwise specifically authorized

by this section.

(b) The net proceeds of the bonds shall be deposited in accordance

with the self-insured bond financing agreement and this section. The

self-insured bond financing agreement shall provide for the application

of the net bond proceeds, and such bond proceeds shall be used, for any

of the following purposes: (i) to pay unmet compensation or benefits of

individual and group self-insured employers; (ii) to purchase one or

more assumption of workers' compensation liability policies to discharge

the liabilities incurred or to be incurred under subdivision three or

three-a of section fifty of the workers' compensation law; or (iii) to

pay financing costs of the bonds issued under this section. Not

inconsistent with this section, the authority may provide restrictions

on the use and investment of net proceeds of the bonds and other amounts

in the self-insured bond financing agreement or otherwise in a tax

regulatory agreement as necessary or desirable to assure that they are

exempt from taxation.

5. (a) (i) The authority shall have power and is hereby authorized to

issue its bonds at such times and in such aggregate principal amounts

not to exceed an amount to be determined by the chair as necessary to

fund the purposes of this section, but in no case exceeding nine hundred

million dollars exclusive of any bonds issued to refund bonds previously

issued pursuant to this chapter and any bonds issued to fund any reserve

funds cost of issuance or original issue premium. The bonds shall be

issued for the following corporate purposes: (A) to pay current unmet

compensation or benefits of individual and group self-insured employers;

(B) to purchase one or more assumptions of workers' compensation

liability policies to discharge the liabilities incurred or to be

incurred under subdivision three or three-a of section fifty of the

workers' compensation law; or (C) to pay financing costs of the bonds

issued under this section.

(ii) Each issuance of bonds shall be authorized by a resolution of the

authority, provided, however, that any such resolution may delegate to

an officer of the authority the power to issue such bonds from time to

time and to fix the details of any such issues of bonds by an

appropriate certificate of such authorized officer. Every issue of the

bonds of the authority for the self-insurer offset fund shall be special

revenue obligations payable from and secured by a pledge of revenues and

other assets, including those proceeds of such bonds deposited in a

reserve fund for the benefit of bondholders, earnings on such funds and

such other funds and assets as may become available, upon such terms and

conditions as specified by the authority in the resolution under which

the bonds are issued or in a related trust indenture.

(iii) The authority shall have the power and is hereby authorized from

time to time to issue bonds, in consultation with the chair, the

commissioner of taxation and finance and the director of the budget, to

refund any bonds issued under this section by the issuance of new bonds,

whether the bonds to be refunded have or have not matured, and to issue

bonds partly to refund bonds then outstanding and partly for any of its

other corporate purposes under this section. The refunding bonds may be

exchanged for the bonds to be refunded or sold and the proceeds applied

to the purchase, redemption or payment of such bonds.

(b) The bonds of the authority of each issue shall be dated, shall

bear interest (which, in the opinion of bond counsel to the authority,

may be includable in or excludable from the gross income of the owners

for federal income tax purposes) at such fixed or variable rates,

payable at or prior to maturity, and shall mature at such time or times,

as may be determined by the authority and may be made redeemable before

maturity, at the option of the authority, at such price or prices and

under such terms and conditions as may be fixed by the authority. The

principal and interest of such bonds may be made payable in any lawful

medium. The resolution or the certificate of the authorized officer

shall determine the form of the bonds, either registered or book-entry

form, and the manner of execution of the bonds and shall fix the

denomination or denominations of the bonds and the place or places of

payment of principal and interest thereof, which may be at any bank or

trust company within or outside the state. If any officer whose

signature or a facsimile thereof appears on any bonds shall cease to be

such officer before the delivery of such bonds, such signature or

facsimile shall nevertheless be valid and sufficient for all purposes

the same as if such officer had remained in office until such delivery.

The authority may also provide for temporary bonds and for the

replacement of any bond that shall become mutilated or shall be

destroyed or lost.

(c) The authority may sell such bonds, either at a public or private

sale and either on a competitive or negotiated basis, provided no such

bonds may be sold by the authority at private sale unless such sale and

the terms thereof have been approved in writing by the comptroller of

the state of New York. The proceeds of such bonds shall be disbursed for

the purposes for which such bonds were issued under such restrictions as

the financing agreement and the resolution authorizing the issuance of

such bonds or the related trust indenture may provide. Such bonds shall

be issued without any other approvals, filings, proceedings or the

happening of any other conditions other than any approvals, findings,

proceedings, or other conditions that are specified and expressly

required by this section; provided, however, that any issuance of bonds

under the authority of this section shall be considered a project for

the purposes of section fifty-one of this chapter and subject to

approval under such section.

(d) Any pledge made by the authority shall be valid and binding at the

time the pledge is made. The assets, property, revenues, reserves or

earnings so pledged shall immediately be subject to the lien of such

pledge without any physical delivery thereof or further act and the lien

of any such pledge shall be valid and binding as against all parties

having claims of any kind against the authority, irrespective of whether

such parties have notice thereof. Notwithstanding any other provision of

law to the contrary, neither the bond resolution nor any indenture or

other instrument, including the financing agreement, by which a pledge

is created or by which the authority's interest in pledged assets,

property, revenues, reserves or earnings thereon is assigned need be

filed, perfected or recorded in any public records in order to protect

the pledge thereof or perfect the lien thereof as against third parties,

except that a copy thereof shall be filed in the records of the

authority.

(e) Whether or not the bonds of the 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 for

all purposes, subject only to the provisions of the bonds for

registration.

(f) At the sole discretion of the authority, any bonds issued by the

authority and any ancillary bond facility made under the provisions of

this subdivision may be secured by a resolution or trust indenture by

and between the authority and the trust indenture trustee, which may be

any trust company or bank having the powers of a trust company, whether

located within or outside the state, provided it is carried out in

accordance with section sixty-nine-d of the state finance law. Such

trust indenture or resolution providing for the issuance of such bonds

may provide for the creation and maintenance of such reserves as the

authority shall determine to be proper and may include covenants setting

forth the duties of the authority in relation to the bonds, or the

financing agreement. Such trust indenture or resolution may contain

provisions: (i) respecting the custody, safe-guarding and application of

all moneys and securities; (ii) protecting and enforcing the rights and

remedies (pursuant to the trust indenture and the financing agreement)

of the owners of the bonds and any other benefited party as may be

reasonable and proper and not in violation of law; (iii) concerning the

rights, powers and duties of the trustee appointed by bondholders

pursuant to paragraph (g) of this subdivision; or (iv) limiting or

abrogating the right of the bondholders to appoint a trustee. It shall

be lawful for any bank or trust company which may act as depository of

the proceeds of bonds or of any other funds or obligations received on

behalf of the authority to furnish such indemnifying bonds or to pledge

such securities as may be required by the authority. Any such trust

indenture or resolution may contain such other provisions as the

authority may deem reasonable and proper for priorities and

subordination among the owners of the bonds and other beneficiaries. For

purposes of this section, a "resolution" of the authority shall include

any trust indenture authorized thereby.

(g) The authority may enter into, amend or terminate, as it determines

to be necessary or appropriate, any ancillary bond facility in

consultation with the chair and director of the budget (i) to facilitate

the issuance, sale, resale, purchase, repurchase or payment of bonds,

interest rate savings or market diversification or the making or

performance of interest rate exchange or similar agreements, including

without limitation bond insurance, letters of credit and liquidity

facilities, (ii) to attempt to manage or hedge risk or achieve a

desirable effective interest rate or cash flow, or (iii) to place the

obligations or investments of the authority, as represented by the bonds

or the investment of reserved bond proceeds or other pledged revenues or

other assets, in whole or in part, on the interest rate, cash flow or

other basis decided in consultation with the chair and director of the

budget, which facility may include without limitation contracts commonly

known as interest rate exchange or similar agreements, forward purchase

contracts or guaranteed investment contracts and futures or contracts

providing for payments based on levels of, or changes in, interest

rates. These contracts or arrangements may be entered into by the

authority in connection with, or incidental to, entering into, or

maintaining any agreement which secures bonds of the authority or

investment, or contract providing for investment of reserves or similar

facility guaranteeing an investment rate for a period of years not to

exceed the underlying term of the bonds. The determination by the

authority that an ancillary bond facility or the amendment or

termination thereof is necessary or appropriate as aforesaid shall be

conclusive. Any ancillary bond facility may contain such payment,

security, default, remedy, and termination provisions and payments and

other terms and conditions as determined by the authority, after giving

due consideration to the creditworthiness of the counterparty or other

obligated party, including any rating by any nationally recognized

rating agency, and any other criteria as may be appropriate.

(h) The authority, subject to such agreements with bondholders as may

then exist (including provisions which restrict the power of the

authority to purchase bonds), or with the providers of any applicable

ancillary bond facility, shall have the power out of any funds available

therefor to purchase bonds of the authority, which may or may not

thereupon be cancelled, at a price not substantially exceeding:

(i) if the bonds are then redeemable, the redemption price then

applicable, including any accrued interest; or

(ii) if the bonds are not then redeemable, the redemption price and

accrued interest applicable on the first date after such purchase upon

which the bonds become subject to redemption.

(i) Neither the members of the authority nor any other person

executing the bonds or an ancillary bond facility of the authority shall

be subject to any personal liability by reason of the issuance or

execution and delivery thereof.

(j) The maturities of the bonds shall not exceed thirty years from

their respective issuance.

6. Neither any bond issued pursuant to this section nor any ancillary

bond facility of the authority shall constitute a debt or moral

obligation of the state or a state supported obligation within the

meaning of any constitutional or statutory provision or a pledge of the

faith and credit of the state or of the taxing power of the state, and

the state shall not be liable to make any payments thereon nor shall any

bond or any ancillary bond facility be payable out of any funds or

assets other than pledged revenues and other assets of the authority and

other funds and assets of or available to the authority pledged

therefor, and the bonds and any ancillary bond facility of the authority

shall contain on the face thereof or other prominent place thereon a

statement to the foregoing effect.

7. (a) Subject to the provisions of subdivision five of this section

in the event that the authority shall default in the payment of

principal of, or interest on, or sinking fund payment on, any issue of

bonds after the same shall become due, whether at maturity or upon call

for redemption, or in the event that the authority or the state shall

fail to comply with any agreement made with the holders of any issue of

bonds, the holders of twenty-five percent in aggregate principal amount

of the bonds of such issue then outstanding, by instrument or

instruments filed in the office of the clerk of the county of Albany and

proved or acknowledged in the same manner as a deed to be recorded, may

appoint a trustee to represent the holders of such bonds for the

purposes herein provided.

(b) Such trustee, may, and upon written request of the holders of

twenty-five percent in principal amount of such bonds then outstanding

shall, in his or its own name:

(i) by suit, action or proceeding in accordance with the civil

practice law and rules, enforce all rights of the bondholders, including

the right to require the authority to carry out any agreement with such

holders and to perform its duties under this section;

(ii) bring suit upon such bonds;

(iii) by action or suit, require the authority to account as if it

were the trustee of an express trust for the holders of such bonds;

(iv) by action or suit, enjoin any acts or things which may be

unlawful or in violation of the rights of the holders of such bonds; and

(v) declare all such bonds due and payable, and if all defaults shall

be made good, then, with the consent of the holders of twenty-five

percent of the principal amount of such bonds then outstanding, annul

such declaration and its consequences, provided, however, that nothing

in this subdivision shall preclude the authority from agreeing that

consent of the provider of an ancillary bond facility is required for an

acceleration of related bonds in the event of a default other than a

failure to pay principal of or interest on the bonds when due.

(c) The supreme court shall have jurisdiction of any suit, action or

proceeding by the trustee on behalf of such bondholders. The venue of

any such suit, action or proceeding shall be laid in the county of

Albany.

(d) Before declaring the principal of bonds due and payable, the

trustee shall first give thirty days notice in writing to the authority.

8. All monies of the authority from whatever source derived shall be

paid to the treasurer of the authority and shall be deposited forthwith

in a bank or banks designated by the authority. The monies in such

accounts shall be paid out or withdrawn on the order of such person or

persons as the authority may authorize to make such requisitions. All

deposits of such monies shall either be secured by obligations of the

United States or of the state or of any municipality of a market value

equal at all times to the amount on deposit, or monies of the authority

may be deposited in money market funds rated in the highest short-term

or long-term rating category by at least one nationally recognized

rating agency. To the extent practicable, and consistent with the

requirements of the authority, all such monies shall be deposited in

interest bearing accounts. The authority shall have power,

notwithstanding the provisions of this section, to contract with the

holders of any bonds as to the custody, collection, security, investment

and payment of any monies of the authority or any monies held in trust

or otherwise for the payment of bonds or any way to secure bonds, and

carry out any such contract notwithstanding that such contract may be

inconsistent with the provisions of this section. Monies held in trust

or otherwise for the payment of bonds or in any way to secure bonds and

deposits of such moneys may be secured in the same manner as monies of

the authority and all banks and trust companies are authorized to give

such security for such deposits. Any monies of the authority not

required for immediate use or disbursement may, at the discretion of the

authority, be invested in accordance with law and such guidelines as are

approved by the authority.

9. (a) It is hereby determined that the carrying out by the authority

of its corporate purposes under this section are in all respects for the

benefit of the people of the state of New York and are public purposes.

Accordingly, the authority shall be regarded as performing an essential

governmental function in the exercise of the powers conferred upon it by

this section. The property of the authority, its income and its

operations shall be exempt from taxation, assessments, special

assessments and ad valorem levies. The authority shall not be required

to pay any fees, taxes, special ad valorem levies or assessments of any

kind, whether state or local, including, but not limited to, real

property taxes, franchise taxes, sales taxes or other taxes, upon or

with respect to any property owned by it or under its jurisdiction,

control or supervision, or upon the uses thereof, or upon or with

respect to its activities or operations in furtherance of the powers

conferred upon it by this section, or upon or with respect to any

assessments, rates, charges, fees, revenues or other income received by

the authority.

(b) Any bonds issued pursuant to this section, their transfer and the

income therefrom shall, at all times, be exempt from taxation except for

estate or gift taxes and taxes on transfers.

(c) The state hereby covenants with the purchasers and with all

subsequent holders and transferees of bonds issued by the authority

pursuant to this section, in consideration of the acceptance of and

payment for the bonds, that the bonds of the authority issued pursuant

to this section and the income therefrom and all assessments, revenues,

moneys, and other property received by the authority and pledged to pay

or to secure the payment of such bonds shall at all times be exempt from

taxation.

(d) In the case of any bonds of the authority, interest on which is

intended to be exempt from federal income tax, the authority shall

prescribe restrictions on the use of the proceeds thereof and related

matters only as are necessary or desirable to assure such exemption, and

the recipients of such proceeds shall be bound thereby to the extent

such restrictions shall be made applicable to them. Any such recipient,

including, but not limited to, the state, the state insurance fund, a

public benefit corporation, and a school district or municipality is

authorized to execute a tax regulatory agreement with the authority or

the state, as the case may be, and the execution of such an agreement

may be treated by the authority or the state as a condition to receiving

any such proceeds.

10. (a) The state, solely with respect to the resources of the

self-insurer offset fund and as set forth in the self-insured bond

financing agreement, covenants with the purchasers and all subsequent

owners and transferees of bonds issued by the authority pursuant to this

section in consideration of the acceptance of the payment of the bonds,

until the bonds, together with the interest thereon, with interest on

any unpaid installment of interest and all costs and expenses in

connection with any action or proceeding on behalf of the owners, are

fully met and discharged or unless expressly permitted or otherwise

authorized by the terms of each financing agreement and any contract

made or entered into by the authority with or for the benefit of such

owners:

(i) that in the event bonds of the authority are sold as federally

tax-exempt bonds, the state shall not take any action or fail to take

action that would result in the loss of such federal tax exemption on

said bonds;

(ii) that the state will cause the workers' compensation board to

impose, charge, raise, levy, collect and apply the pledged assessments

for the payment of debt service requirements in each year in which bonds

are outstanding; and

(iii) that the state, subsequent to the issuance of bonds under this

section:

(A) will not materially limit or alter the duties imposed on the

workers' compensation board, the authority, and other officers of the

state by the self-insured bond financing agreement and the bond

proceedings authorizing the issuance of bonds with respect to

application of pledged assessments for the payment of debt service

requirements;

(B) will not issue any bonds, notes or other evidences of

indebtedness, other than the bonds authorized by this section, having

any rights arising out of subparagraph two of paragraph c of subdivision

five of section fifty of the workers' compensation law or this section

or secured by any pledge of or other lien or charge on the revenues

pledged for the payment of debt service requirements; except for bonds

authorized under subdivision eight of section fifteen of the workers'

compensation law.

(C) will not create or cause to be created any lien or charge on the

pledged revenues, other than a lien or pledge created thereon pursuant

to said sections;

(D) will carry out and perform, or cause to be carried out and

performed, each and every promise, covenant, agreement or contract made

or entered into by the financing agreement, by the authority or on its

behalf with the bond owners of any bonds;

(E) will not in any way impair the rights, exemptions or remedies of

the bond owners; and

(F) will not limit, modify, rescind, repeal or otherwise alter the

rights or obligations of the appropriate officers of the state to

impose, maintain, charge or collect the assessments constituting the

pledged revenues as may be necessary to produce sufficient revenues to

fulfill the terms of the proceedings authorizing the issuance of the

bonds, including pledged revenue coverage requirements.

(b) Notwithstanding the provisions of paragraph (a) of this

subdivision:

(i) the remedies available to the authority and the bondholders for

any breach of the pledges and agreements of the state set forth in this

subdivision shall be limited to injunctive relief;

(ii) nothing in this subdivision shall prevent the authority from

issuing evidences of indebtedness:

(A) which are secured by a pledge or lien which is, and shall on the

face thereof, be expressly subordinate and junior in all respects to

every lien and pledge created by or pursuant to said sections; or

(B) which are secured by a pledge of or lien on moneys or funds

derived on or after the date every pledge or lien thereon created by or

pursuant to said sections shall be discharged and satisfied; and

(iii) nothing in this subdivision shall preclude the state from

exercising its power, through a change in law, to limit, modify,

rescind, repeal or otherwise alter the character of the pledged

assessments or revenues or to substitute like or different sources of

assessments, taxes, fees, charges or other receipts as pledged revenues

if and when adequate provision shall be made by law for the protection

of the holders of outstanding bonds pursuant to the proceedings under

which the bonds are issued, including changing or altering the method of

establishing the special assessments.

(c) The authority is authorized to include this covenant of the state,

as a contract of the state, in any agreement with the owner of any bonds

issued pursuant to this section and in any credit facility or

reimbursement agreement with respect to such bonds. Notwithstanding

these pledges and agreements by the state, the attorney general may in

his or her discretion enforce any and all provisions related to the

self-insured bond fund, without limitation.

(d) Prior to the date which is one year and one day after the

authority no longer has any bonds issued pursuant to this section

outstanding, the authority shall have no authority to file a voluntary

petition under chapter nine of the federal bankruptcy code or such

corresponding chapter or sections as may be in effect, and neither any

public officer nor any organization, entity or other person shall

authorize the authority to be or become a debtor under chapter nine or

any successor or corresponding chapter or sections during such period.

The state hereby covenants with the owners of the bonds of the authority

that the state will not limit or alter the denial of authority under

this subdivision during the period referred to in the preceding

sentence. The authority is authorized to include this covenant of the

state, as a contract of the state, in any agreement with the owner of

any bonds issued pursuant to this section.

(e) To the extent deemed appropriate by the authority any pledge and

agreement of the state with respect to the bonds as provided in this

section may be extended to, and included in, any ancillary bond facility

as a pledge and agreement of the state with the authority and the

benefited party.

11. The bonds of the authority are hereby made securities in which all

public officers and bodies of this state and all municipalities and

political subdivisions, all insurance companies and associations and

other persons carrying on an insurance business, all banks, bankers,

trust companies, savings banks and savings associations, including

savings and loan associations, building and loan associations,

investment companies and other persons carrying on a banking business,

all administrators, guardians, executors, trustees and other

fiduciaries, and all other persons whatsoever who are now or may

hereafter be authorized to invest in bonds or in other obligations of

the state, may properly and legally invest funds, including capital, in

their control or belonging to them. The bonds are also hereby made

securities which may be deposited with and may be received by all public

officers and bodies of the state and all municipalities, political

subdivisions and public corporations for any purpose for which the

deposit of bonds or other obligations of the state is now or may

hereafter be authorized.

12. (a) An action against the authority for death, personal injury or

property damage or founded on tort shall not be commenced more than one

year and ninety days after the cause of action thereof shall have

accrued nor unless a notice of claim shall have been served on a member

of the authority or officer or employee thereof designated by the

authority for such purpose, within the time limited by, and in

compliance with the requirements of section fifty-e of the general

municipal law.

(b) The venue of every action, suit or special proceeding brought

against the authority or concerning the validity of this section shall

be laid in the county of Albany.

(c) The bonds, and any obligation of the authority under any ancillary

bond facility, may contain a recital that they are issued or executed,

respectively, pursuant to this section, which recital shall be

conclusive evidence of the validity of the bonds and any such

obligation, respectively, and the regularity of the proceedings of the

authority relating thereto.

13. Any action or proceeding to which the authority or the people of

the state may be parties, in which any question arises as to the

validity of this section, shall be preferred over all other civil causes

of action or cases, except election causes of action or cases, in all

courts of the state and shall be heard and determined in preference to

all other civil business pending therein, except election causes,

irrespective of position on the calendar. The same preference shall be

granted upon application of the authority or its counsel in any action

or proceeding questioning the validity of this section in which the

authority may be allowed to intervene.

14. Notwithstanding any law to the contrary, no funds of the

self-insurer offset fund may be used for any purpose other than those

set forth in this section and section fifty-a of the workers'

compensation law.

* NB There are 2 § 1680-q's