N.Y. Public Authorities Law § 3037: Payments to or purchases of obligations of the city

* § 3037. Payments to or purchases of obligations of the city. In the

event that the mayor from time to time certifies to the corporation an

amount required by the city to enable it (a) to pay, at maturity, the

principal of and interest on any short-term obligations of the city, or

(b) to pay for any item which is permitted by law to be included in the

city's capital budget for the fiscal year for which such certification

is made, including payments to reimburse the general fund for moneys

advanced and expended for any such item, or (c) to make any payment in a

fiscal year to the extent the mayor certifies such payment will have the

effect of reducing from the then existing level the city's requirements

for an advance by the state, during such fiscal year or the succeeding

fiscal year, of state assistance moneys payable to the city, or (d) to

meet its seasonal borrowing requirements for the fiscal year in which

such certification is made, or (e) to pay operating expenses of the city

other than those included in subparagraph (b), (c) or (d) hereof, the

corporation may (i) pay to the city, or (ii) purchase from the city

obligations hereafter issued by the city in an amount equivalent to,

part or all of such certified amount. Moneys paid to the city pursuant

to clause (i) or (ii) of this section shall be held in trust for the

payment of short-term obligations or shall be used to make the payment

for which such moneys have been so certified. Any obligations issued by

the city and purchased by the corporation pursuant to this section in

consideration of the payments made to the city pursuant to subparagraph

(a) or (e) hereof shall mature on a date not later than fifteen years

from the original date of issue of such obligations. The corporation

shall not make any payment to the city, or purchase any obligations from

the city, pursuant to this section unless the city shall have agreed to

observe the conditions set forth in section three thousand thirty-eight

of this chapter, subject to such modifications as are permitted

thereunder. The outstanding amounts paid to the city for operating

expenses which are described in subparagraph (e) hereof pursuant to

clause (i) and clause (ii) of this section shall not exceed two billion

dollars, provided that not more than nine hundred million dollars shall

be obligations maturing in a fiscal year succeeding the fiscal year in

which issued (of which not less than seven hundred fifty million dollars

shall be applied for welfare or public education purposes, as to which

state assistance payments have been or will be advanced to the city) and

shall be evidenced by city obligations, and any balance shall be short

term obligations payable in the fiscal year in which issued.

The outstanding amounts paid to the city for a purpose set forth in

subparagraph (b) hereof, other than to pay for expense items permitted

to be included in the capital budget of the city pursuant to subdivision

five of section three thousand thirty-eight of this article, shall be

evidenced by city bonds. Nothing herein shall be construed to prevent

the corporation from acquiring from the city obligations issued by the

city pursuant to the local finance law which evidence amounts paid to

the city by the corporation for other purposes.

Nothing contained in this article shall be deemed to create an object

or purpose or to establish or extend a period for which a city bond may

be issued pursuant to the local finance law, or to create authority for

the city to issue a bond payable from a tax on real estate levied

outside the limit imposed by the state constitution on the amount to be

raised by tax on real estate for local purposes other than debt service,

or to modify, amend, repeal, or rescind any other provision of the local

finance law governing the issuance by the city of its bonds or the

payment of principal and interest thereon.

At all times after receipt of short-term obligations, other than bond

anticipation notes, of the city acquired pursuant to this section, the

corporation shall have the same rights and powers with respect to such

short-term obligations as the corporation shall have with respect to

short-term obligations, other than bond anticipation notes, of the city

received pursuant to subdivision one of section three thousand

thirty-five of this article. The corporation shall have the same rights

and powers with respect to bond anticipation notes and bonds so received

as the corporation shall have with respect to bond anticipation notes

received pursuant to subdivision one of section three thousand

thirty-five; provided that the corporation shall not deliver any bond

received pursuant to this section for cancellation unless the city pays

the principal amount and accrued interest thereon or pays accrued

interest and exchanges such bond for another bond of the city in equal

principal amounts in refunding thereof, and provided further that the

corporation may not sell or transfer to any person other than the city

any bond of the city acquired by it pursuant to this section unless the

mayor and the city comptroller have requested in writing that the

corporation sell or transfer such bond and, if such bond be sold or

transferred at private sale, unless the terms of such sale have been

approved by the city comptroller.

For purposes of this section, the term "seasonal borrowing

requirements" means amounts which are required by the city to enable it

to pay current operating expenses, provided such expenses are included

in an expense budget of the city balanced in accordance with the

provisions of section three thousand thirty-eight of this title and such

amounts are required solely because the city's revenues and

expenditures, even when in balance on an annual basis, are not received

and disbursed at equivalent rates throughout the year.

* NB The corporation shall continue for a term ending the later of

July 1, 2008 or one year after its liabilities have been fully paid and

discharged per § 3033 sub 1.