N.Y. Public Authorities Law § 2406: Bonds and notes of the agency

§ 2406. Bonds and notes of the agency. (1) Subject to the approval of

the New York public authorities control board in accordance with the

provisions of chapter thirty-nine of the laws of nineteen hundred

seventy-six, as amended and subject to the provisions of section two

thousand four hundred seven of this title, the agency shall have the

power and is hereby authorized from time to time to issue its negotiable

bonds and notes in conformity with applicable provisions of the uniform

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

agency, shall be necessary to provide sufficient funds for achieving the

corporate purposes thereof, including the purchase of mortgages from

banks, the payment of interest on bonds and notes of the agency,

establishment of reserves to secure such bonds and notes, the transfer

of money to the state as described in subdivision twenty-seven of

section twenty-four hundred four of this chapter, and all other

expenditures of the agency incident to and necessary or convenient to

carry out its corporate purposes and powers, except the operating

expenses of the agency.

(2) Except as may otherwise be expressly provided by the agency, all

bonds and notes issued by the agency shall be general obligations of the

agency, secured by the full faith and credit of the agency and payable

out of any moneys, assets, or revenues of the agency, subject only to

any agreement with bondholders or noteholders pledging any particular

moneys, assets or revenues.

(3) Bonds and notes shall be authorized by a resolution or resolutions

of the agency adopted as provided by this title; provided, however, that

any such resolution authorizing the issuance of bonds or notes may

delegate to an officer of the agency the power to issue such bonds or

notes from time to time and to fix the details of any such issues of

bonds or notes by an appropriate certificate of such authorized officer.

(4) Such bonds or notes shall bear such date or dates, shall mature at

such time or times, shall bear interest at such rate or rates, shall be

of such denominations, shall be in such form, carry such registration

privileges, be executed in such manner, be payable in lawful money of

the United States of America at such place or places within or without

the state, be subject to such terms of redemption prior to maturity as

may be provided by such resolution or resolutions or such certificate

with respect to such bonds or notes, as the case may be; provided,

however, that the maximum maturity of bonds shall not exceed forty years

from the date thereof and the maximum maturity of notes or any renewals

thereof shall not exceed seven years from the date of the original issue

of such notes.

(5) Any bonds or notes of the agency may be sold at such price or

prices, at public or private sale, in such manner and from time to time

as may be determined by the agency, and the agency may pay all expenses,

premiums and commissions which it may deem necessary or advantageous in

connection with the issuance and sale thereof. No bonds or notes of the

agency may be sold at private sale, however, unless such sale and the

terms thereof have been approved in writing by (a) the comptroller if

such sale is not to the comptroller and the comptroller is not then

serving as a director of the agency, or (b) the state director of the

budget, if such sale is to the comptroller or the comptroller is then

serving as a director of the agency.

(6) The agency is authorized to provide for the issuance of its bonds

or notes (including bonds, notes or other obligations the interest on

which is includable under the United States Internal Revenue Code of

nineteen hundred eighty-six, as amended, or any subsequent corresponding

internal revenue law of the United States, in the gross income of the

holders of the bonds to the same extent and in the same manner that the

interest on bills, bonds, notes or other obligations of the United

States is includable in the gross income of the holders thereof under

said Internal Revenue Code or any such subsequent law) for the purpose

of refunding any bonds or notes of the agency then outstanding,

including the payment of any redemption premiums thereon and any

interest accrued or to accrue to the redemption date next succeeding the

date of delivery of such refunding bonds or notes. The proceeds of any

such bonds or notes issued for the purpose of so refunding outstanding

bonds or notes shall be forthwith applied to the purchase or retirement

of such outstanding bonds or notes or the redemption of such outstanding

bonds or notes on the redemption date next succeeding the date of

delivery of such refunding bonds or notes and may, pending such

application, be placed in escrow to be applied to such purchase or

retirement or redemption on such date. Any such escrowed proceeds,

pending such use, may be invested and reinvested in obligations of or

guaranteed by the state or the United States of America, or in

certificates of deposit or time deposits secured in such manner as the

agency shall determine, or in obligations of any agency of the state or

the United States of America which may from time to time be legally

purchased by savings banks within the state as an investment of funds

belonging to them or in their control, or in obligations of the Federal

National Mortgage Association, maturing at such time or times as shall

be appropriate to assure the prompt payment, as to principal, interest

and redemption premium, if any, on the outstanding bonds or notes to be

so refunded by purchase, retirement or redemption, as the case may be.

The interest, income and profits, if any, earned or realized on any such

investment may also be applied to the payment of the outstanding bonds

or notes to be so refunded by purchase, retirement or redemption, as the

case may be. After the terms of the escrow have been fully satisfied and

carried out, any balance of such proceeds and interest, if any, earned

or realized on the investments thereof may be returned to the agency for

use by it in any lawful manner. All such bonds or notes shall be issued

and secured and shall be subject to the provisions of this title in the

same manner and to the same extent as any other bonds or notes issued

pursuant to this title.

(7) Whether or not the bonds and notes are of such form and character

as to be negotiable instruments under the terms of the uniform

commercial code, the bonds and notes are hereby made negotiable

instruments within the meaning of and for all the purposes of the

uniform commercial code, subject only to the provisions of the bonds and

notes for registration.

(8) Subject only to the provisions of sections two thousand four

hundred seven and two thousand four hundred eight of this title, any

resolution or resolutions authorizing any bonds or notes of the agency

may contain provisions which may be a part of the contract with the

holders of such bonds or notes, as to: (a) pledging or creating a lien,

to the extent provided by such resolution or resolutions, on all or any

part of any monies or property of the agency or of any moneys held in

trust or otherwise by others for the payment of such bonds or notes; (b)

otherwise providing for the custody, collection, securing, investment

and payment of any moneys of the agency; (c) the setting aside of

reserves or sinking funds and the regulation or disposition thereof; (d)

limitations on the purpose to which the proceeds of sale of any issue of

such bonds or notes then or thereafter to be issued may be applied; (e)

limitations on the issuance of additional bonds or notes, the terms upon

which additional bonds or notes may be issued and secured, and upon the

refunding of outstanding or other bonds or notes; (f) the procedure, if

any, by which the terms of any contract with the holders of bonds or

notes 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; (g) the creation of special funds into which any

moneys of the agency may be deposited; (h) vesting in a trustee or

trustees such properties, rights, powers and duties in trust as the

agency may determine, which may include any or all of the rights, powers

and duties of the trustee appointed pursuant to section two thousand

four hundred nine of this title, and limiting or abrogating the right of

the holders of bonds or notes to appoint a trustee under such section 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

obligations and duties of the agency and providing for the rights and

remedies of the holders of bonds or notes in the event of such default,

providing, however, that such rights and remedies shall not be

inconsistent with the general laws of this state and other provisions of

this title; and (j) any other matters of like or different character,

which in any way affect the security and protection of the bonds or

notes and the rights of the holders thereof.

(9) Any resolution or resolutions or trust indenture or indentures

under which bonds or notes of the agency are authorized to be issued may

contain provisions for vesting in a trustee or trustees such properties,

rights, powers and duties in trust as the agency may determine which may

include any or all of the rights, powers and duties of the trustee

appointed by the holders of any issue of notes or bonds pursuant to

section two thousand four hundred nine of this title, in which event the

provisions of said section two thousand four hundred nine authorizing

the appointment of a trustee by such holders of bonds or notes shall not

apply.

(10) It is the intention of the legislature that any pledge of

mortgages, housing loans, property, earnings, revenues or other moneys

made by the agency shall be valid and binding from the time when the

pledge is made; that the mortgages, housing loans, property, earnings,

revenues or other moneys so pledged and thereafter received by the

agency or its agent, including a servicing bank 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 agency or its agent, including a

servicing bank irrespective of whether such parties have notice thereof.

Neither the resolution nor any other instrument by which a pledge is

created need be recorded.

(11) Neither the members of the agency nor any person executing the

bonds or other obligations shall be liable personally on the bonds or

other obligations or be subject to any personal liability or

accountability by reason of the issuance thereof.