N.Y. Public Authorities Law § 3236: Bonds and notes of the corporation

§ 3236. Bonds and notes of the corporation. 1. (a) The corporation

shall have power and is hereby authorized from time to time to issue its

bonds and notes in such principal amount or amounts, subject to

subdivision eight of this section, as the corporation shall determine to

be necessary, to provide sufficient funds for achieving its corporate

purposes, including the making of payments pursuant to section three

thousand two hundred thirty-eight of this title, the payment of interest

on bonds and notes of the corporation, the establishment of reserves to

secure such bonds and notes, the payment of amounts required under bond

or note facilities or agreements relating thereto, and the payment of

all costs of issuance of its bonds and notes.

(b) The corporation shall have the power and is hereby authorized from

time to time to issue (i) notes to renew notes and (ii) bonds to pay

notes, including the interest thereon and, whenever it deems refunding

expedient, to refund any bonds 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. 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.

(c) Except as may otherwise be expressly provided by the corporation,

every issue of its bonds and notes shall be general obligations of the

corporation payable out of any revenues of the corporation, subject only

to any agreements with the holders of particular bonds or notes pledging

any particular revenues.

(d) (i) Bonds and notes shall be authorized by resolution of the

corporation, be in such denominations and bear such date or dates and

mature at such time or times, as such resolution may provide, provided

that bonds and notes and renewals or refundings thereof shall mature on

a date not later than December thirty-first, two thousand twenty-five

nor more than thirty years from the date of original issuance.

(ii) Bonds and notes shall be subject to such terms of redemption,

bear interest at such rate or rates, be payable at such times, be in

such form, either coupon, registered or book entry form, 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

and conditions as such resolution may provide.

(e) Such bonds shall be sold to the bidder offering the lowest

interest cost to the corporation, taking into consideration any premium

or discount and, in the case of refunding bonds, the bona fide initial

public offering price, not less than four nor more than fifteen days,

Sundays excepted, after a notice of such sale has been published at

least once in a definitive trade publication of the municipal bond

industry published on each business day in the state of New York which

is generally available to participants in the municipal bond industry,

which notice shall state the terms of the sale. The corporation may not

change the terms of the sale unless notice of such change is sent via a

definitive trade wire service of the municipal bond industry which, in

general, makes available information regarding activity and sales of

municipal bonds and is generally available to participants in the

municipal bond industry, at least one hour prior to the time of the sale

as set forth in the original notice of sale. In so changing the terms or

conditions of a sale the corporation may send notice by such wire

service that the sale will be delayed by up to thirty days, provided

that wire notice of the new sale date will be given at least one

business day prior to the new time when bids will be accepted. In such

event, no new notice of sale shall be required to be published.

Advertisements shall contain a provision to the effect that the

corporation, in its discretion, may reject any or all bids made in

pursuance of such advertisements, and in the event of such rejection,

the corporation is authorized to negotiate a private sale or readvertise

for bids in the form and manner above described as many times as, in its

judgment, may be necessary to effect a satisfactory sale.

Notwithstanding the foregoing provisions of this paragraph, whenever in

the judgment of the corporation the interests of the corporation will be

served thereby, the corporation may sell bonds at private sale. The

corporation shall promulgate regulations governing the terms and

conditions of any such private sales, which regulations shall include a

provision that it give notice to the governor, the temporary president

of the senate, and the speaker of the assembly of its intention to

conduct a private sale of obligations pursuant to this section not less

than five days prior to such sale or the execution of any binding

agreement to effect such sale.

(f) The corporation shall enter into an agreement with the comptroller

pursuant to which the comptroller shall be the exclusive agent of the

corporation for the sale of its bonds and notes.

2. Consistent with the provisions of this title, any resolution

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

the bonds or notes or of any issue thereof, subject to such agreements

with bondholders or noteholders as may then exist;

(b) pledging all or any part of the assets of the corporation to

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

notes, subject to such agreements with bondholders or noteholders as may

then exist;

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

and disposition thereof;

(d) limitations on the purposes to which the proceeds of sale of bonds

or notes may be applied and pledging such proceeds to secure the payment

of the bonds or notes or of any issue thereof;

(e) limitations on the issuance of additional bonds or notes; the

terms upon which additional bonds or notes may be issued and secured;

and the refunding of outstanding or other bonds or notes;

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

bondholders or noteholders 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) limitations on the amount of moneys to be expended by the

corporation for operating expenses of the corporation;

(h) vesting in a trustee, as described in subdivision six of this

section, such property, rights, powers and duties in trust as the

corporation may determine, which may include any or all of the rights,

powers and duties of the trustee appointed by the bondholders pursuant

to this title, and limiting or abrogating the right of the bondholders

to appoint a trustee under this title or limiting the rights, powers,

and duties of such trustee;

(i) the acts or omissions to act which shall constitute a default in

the obligations and duties of the corporation to the holders of the

bonds or notes and providing for the rights and remedies of the holders

of the bonds or notes in event of such default, including the right to

appointment of a receiver; providing, however, that such rights and

remedies shall not be inconsistent with the general laws of the state

and the other provisions of this title;

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

way affect the security or protection of the holders of the bonds or

notes; and

(k) the application of any of the foregoing provisions to any provider

of any applicable bond or note facility.

Notwithstanding the foregoing, the corporation shall not be authorized

to make any covenant, pledge, promise, or agreement purporting to bind

the state except as otherwise specifically authorized by this title.

3. Any pledge made by the corporation shall be valid and binding from

the time when the pledge is made. The revenues or property so pledged

and thereafter received by the corporation 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 in tort, contract or

otherwise against the corporation, irrespective of whether such parties

have notice thereof. Neither the resolution nor any other instrument by

which a pledge is created need be recorded or filed to protect such

pledge.

4. Neither the directors of the corporation nor any other person

executing the bonds or notes of the corporation shall be subject to any

personal liability or accountability by reason of the issuance thereof.

5. The corporation, subject to such agreements with bondholders or

noteholders as may then exist, or with the providers of any applicable

bond or note facility, shall have power out of any funds available

therefor to purchase bonds or notes of the corporation, which may or may

not thereupon be cancelled, at a price not substantially exceeding:

(a) if the bonds or notes are then redeemable, the redemption price

then applicable, including any accrued interest;

(b) if the bonds or notes are not then redeemable, the redemption

price and accrued interest applicable on the first date after such

purchase upon which the bonds or notes become subject to redemption.

6. In the discretion of the directors of the corporation, the bonds

and notes may be secured by a trust indenture by and between the

corporation and a corporate trustee, or a corporate trustee may be

appointed under the resolution as provided in subdivision two of this

section.

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 or any book-entry-only system.

8. (a) The corporation shall not issue any bonds or notes in an amount

in excess of four billion seven hundred million dollars, plus a

principal amount of bonds or notes:

(i) to fund any capital reserve fund in accordance with the capital

reserve fund requirement,

(ii) to provide capitalized interest for a period not to exceed six

months, and

(iii) to provide for the payment of fees and other charges and

expenses, including underwriters' discount, related to the issuance of

such bonds or notes, or related to the provision of any applicable bond

or note facilities.

(b) In computing for the purposes of this section, the aggregate

amount of indebtedness evidenced by bonds and notes of the corporation

issued pursuant to this title, there shall be excluded (i) the amount of

bonds or notes issued that would constitute interest under the Code as

amended to the effective date of this title, and (ii) the amount of such

indebtedness represented by such bonds or notes issued to refund or

otherwise repay bonds or notes, provided that the amount so excluded

under this subparagraph (ii) may exceed the principal amount of such

bonds or notes that were issued to refund or otherwise repay only if the

present value of the aggregate debt service on the refunding or

repayment bonds or notes shall not have at the time of their issuance

exceeded the present value of the aggregate debt service of the bonds or

notes they were issued to refund or repay, such present value in each

case being calculated by using 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 date thereof to the date of

issue of the refunding or repayment bonds or notes and to the price bid

therefor, or to the proceeds received by the corporation from the sale

thereof, in each case including estimated accrued interest.

9. Each issuance of bonds by the corporation under this title shall

provide for the retirement thereof so that debt service thereon,

calculated in accordance with reasonably assumed interest rates to the

extent not then determinable, shall be on a substantially level or

decreasing debt-service payment basis no later than one year from the

date of their issuance to the date of retirement of the latest bond

within such issue to retire. Each issuance of notes shall provide for

annual reductions of the aggregate outstanding principal in equal or

increasing amounts of such reduction. Notwithstanding the foregoing, if

the corporation shall issue refunding bonds, the debt service thereon

shall be structured on any basis that the corporation deems is in its

best interest, provided that debt service on all outstanding bonds,

notes and other financial obligations is not increased in any future

fiscal year after giving effect to such refunding.