N.Y. Public Authorities Law § 366: Guaranty by the state

§ 366. Guaranty by the state. 1. To the extent authorized by the

constitution at the time of the issuance of notes or bonds, the punctual

payment of the notes and bonds shall be, and the same hereby is, fully

and unconditionally guaranteed by the state, both as to principal and

interest, according to their terms; and such guaranty shall be expressed

upon the face thereof by the signature or facsimile signature of the

comptroller or a deputy comptroller. In the event that the authority

shall fail to pay when due, the principal of, or interest on, the notes

or bonds, the comptroller shall pay the holder thereof, and thereupon

the state shall be subrogated to the rights of the noteholders or

bondholders so paid.

2. The authority shall have power to issue notes and bonds without the

guaranty of the state and may issue such notes or bonds before and after

the issuance of notes or bonds so guaranteed.

3. When guaranteed notes or guaranteed bonds are outstanding, notes or

bonds secured by a pledge of receipts or revenues having priority over

such outstanding guaranteed notes or guaranteed bonds shall not be

issued, except with the consent of the comptroller, and unless the

authority shall by resolution first find and determine that,

notwithstanding such pledge, the authority will have adequate means to

meet its obligations to the holders of such outstanding guaranteed notes

or bonds.

4. When notes or bonds are outstanding secured by a pledge of receipts

or revenues, guaranteed notes or bonds either unsecured, or secured by a

pledge of receipts or revenues subordinate to the pledge securing such

outstanding notes or bonds, shall not be issued unless the authority

shall first find and determine by resolution that notwithstanding the

pledge securing such outstanding notes or bonds, the authority will have

adequate means to meet its obligations on the guaranteed notes or bonds

about to be issued.