N.Y. Public Authorities Law § 385: Additional powers of the authority to issue special dedicated highway and bridge trust fund bonds

§ 385. Additional powers of the authority to issue special dedicated

highway and bridge trust fund bonds. 1. (a) The authority is hereby

authorized, as an additional corporate purpose thereof: (i) to enter

into a dedicated highway and bridge trust fund cooperative agreement or

agreements with the commissioner of transportation for the financing by

the authority of disbursements made by the state or project sponsor for

any of the activities authorized pursuant to the provisions of section

eighty-nine-b of the state finance law in any case where the expense

thereof is paid in whole or in part by the state or project sponsor; and

(ii) to issue use permits or leases to the department of transportation,

or project sponsor, as the case may be, for projects financed by the

authority of disbursements made by the state or project sponsor in

accordance with the provisions of a dedicated highway and bridge trust

fund cooperative agreement or agreements, provided that such projects

are maintained and operated under the supervision of the department of

transportation without cost to the New York state thruway authority for

the full term of such agreement or agreements, and provided further that

such use permit or lease shall be granted by the authority on a toll

free basis. Provided, however, that at any time after April first,

nineteen hundred ninety-five, no dedicated highway and bridge trust fund

cooperative agreement with the commissioner of transportation pursuant

to this section, nor any supplement thereto, need provide any conveyance

of an interest in the property to the New York state thruway authority

in connection with any obligations incurred pursuant to this section;

and any such conveyance evidenced by a dedicated highway and bridge

trust fund cooperative agreement before such date shall, consistent with

the rights of holders of any such obligations incurred pursuant to this

section, revert to the people of the state of New York by appropriate

instrument or instruments, by quitclaim deed or otherwise, in

confirmation of such reversion and any related use permits shall be

voided.

(b) The authority is hereby authorized, as additional corporate

purposes thereof solely upon the request of the director of the budget:

(i) to issue special emergency highway and bridge trust fund bonds and

notes for a term not to exceed thirty years and to incur obligations

secured by the moneys appropriated from the dedicated highway and bridge

trust fund established in section eighty-nine-b of the state finance

law; (ii) to make available the proceeds in accordance with instructions

provided by the director of the budget from the sale of such special

emergency highway and bridge trust fund bonds, notes or other

obligations, net of all costs to the authority in connection therewith,

for the purposes of financing all or a portion of the costs of

activities for which moneys in the dedicated highway and bridge trust

fund established in section eighty-nine-b of the state finance law are

authorized to be utilized or for the financing of disbursements made by

the state for the activities authorized pursuant to section

eighty-nine-b of the state finance law; and (iii) to enter into

agreements with the commissioner of transportation pursuant to section

ten-e of the highway law with respect to financing for any activities

authorized pursuant to section eighty-nine-b of the state finance law,

or agreements with the commissioner of transportation pursuant to

sections ten-f and ten-g of the highway law in connection with

activities on state highways pursuant to these sections, and (iv) to

enter into service contracts, contracts, agreements, deeds and leases

with the director of the budget or the commissioner of transportation

and project sponsors and others to provide for the financing by the

authority of activities authorized pursuant to section eighty-nine-b of

the state finance law, and each of the director of the budget and the

commissioner of transportation are hereby authorized to enter into

service contracts, contracts, agreements, deeds and leases with the

authority, project sponsors or others to provide for such financing. The

authority shall not issue any bonds or notes in an amount in excess of

twenty-two billion three hundred nine million two hundred ninety-four

thousand dollars $22,309,294,000, plus a principal amount of bonds or

notes: (A) to fund capital reserve funds; (B) to provide capitalized

interest; and, (C) to fund other costs of issuance. In computing for the

purposes of this subdivision, the aggregate amount of indebtedness

evidenced by bonds and notes of the authority issued pursuant to this

section, as amended by a chapter of the laws of nineteen hundred

ninety-six, there shall be excluded the amount of bonds or notes issued

that would constitute interest under the United States Internal Revenue

Code of 1986, as amended, and the amount of indebtedness issued to

refund or otherwise repay bonds or notes.

(c) Such obligations shall be issued or incurred with the approval of

the director of the budget and shall be special obligations of the

authority secured by and payable solely out of amounts appropriated by

the legislature as authorized pursuant to section eighty-nine-b of the

state finance law without recourse against any other assets, revenues or

funds of or other payments due to the authority. Upon payments of such

appropriated amounts from the fund established pursuant to section

eighty-nine-b of the state finance law to the account of the authority,

such funds may be pledged by the authority to secure its bonds, notes

and other obligations authorized by paragraph (b) of this subdivision

and shall be held free and clear of any claim by any person arising out

of or in connection with articles twelve-A, thirteen-A and twenty-one of

the tax law. Without limiting the generality of the foregoing and

without limiting the rights and duties of the commissioner of taxation

and finance under articles twelve-A, thirteen-A and twenty-one of the

tax law, no taxpayer, or any other person, including the state, shall

have any right or claim against the authority or any of its bondholders

to any moneys appropriated and transferred from the dedicated highway

and bridge trust fund established by section eighty-nine-b of the state

finance law for or in respect of a refund, rebate, credit, reimbursement

or other repayment of taxes paid under such articles of the tax law.

(d) The notes, bonds or other obligations of the authority authorized

by this section shall not be a debt of the state and the state shall not

be liable thereon, nor shall they be payable out of any funds other than

those of the authority pledged therefor; and such bonds and notes shall

contain on the face thereof a statement to such effect. In addition, any

agreements entered into by the department of transportation pursuant to

sections ten-e, ten-f and ten-g of the highway law or any other entity

on behalf of the state to effect the implementation of any of the

activities financed in whole or in part with proceeds of the obligations

of the authority authorized in this section do not constitute or create

a debt of the state, nor a contractual obligation in excess of the

amounts appropriated therefor and the state has no continuing legal or

moral obligation to appropriate money for payments due under such

contracts.

(e) All of the provisions of this title relating to bonds and notes,

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, provided, however, that

the authority shall be authorized to issue variable rate bonds or notes

pursuant to this section only until June thirtieth, two thousand, after

which date no bonds or notes issued by the authority pursuant to this

section may have interest rates which vary, provided further that the

expiration of such authority shall not affect any such bonds or notes

issued prior to such date.

2. Not less than one hundred twenty days before the beginning of each

state fiscal year, the chairman of the authority shall certify to the

comptroller and to the director of the budget a schedule of anticipated

cash requirements for such fiscal year pursuant to any agreements

entered into by the authority with the commissioner of transportation

pursuant to sections ten-e, ten-f and ten-g of the highway law. The

amounts so certified shall constitute required dedicated highway and

bridge trust fund cooperative agreement payments due pursuant to such

agreements under sections ten-e, ten-f and ten-g of the highway law. The

total amount so certified for such fiscal year shall be equal to the

total amount of the debt service due or expected to be due during such

fiscal year on obligations of the authority incurred pursuant to

subdivision one of this section, including payments of interest and

principal (including sinking fund payments), together with:

(a) the amount, if any, due to any provider of any insurance policy,

letter of credit or other letter of enhancement or a related facility

with respect to such obligations, representing payments made by it as

provided in the applicable resolution or trust indenture as a result of

any previous failure of the state to make any payment provided for in

this section, including any related reasonable interest, fees or charges

so provided;

(b) the amount, if any, required to restore any applicable reserve

fund to the applicable reserve fund requirement to the extent any

deficiency therein has resulted directly or indirectly from failure by

the state to make any payment provided for in this section;

(c) the amount, if any, required to be rebated to the United States to

provide for continued exclusion from federal income taxation of interest

on obligations of the authority; and

(d) the expenses of the establishment and continued operating expenses

of the authority related to the financing of activities funded with the

proceeds of obligations authorized by subdivision one of this section,

including, but not limited to, trustees' fees, fees payable to providers

of credit facilities, fees for issuing and paying agents, remarketing

agents and dealers, legal counsel, financial or other advisors or

consultants, independent auditors, rating agencies, transfer or

information agents, the publication of advertisements and notices,

surety arrangements, and printers' fees or charges incurred by the

authority to comply with applicable federal and state securities and tax

laws; and any other costs of issuance in excess of the amount provided

therefor from the proceeds of the sale of such obligations, to the

extent that any of the foregoing amounts or expenses are not to be paid

from other resources available to the authority for such purpose.

3. The chairman of the authority may revise such certification at such

times as shall be determined by the chairman; provided, however, that

the chairman of the authority shall revise such certification not later

than thirty days after the issuance of any obligations authorized

pursuant to subdivision one of this section including refunding bonds,

and affecting the cash requirements of the authority with respect to the

obligations incurred pursuant to this section.

4. Such certification shall provide for payments on such dates as the

authority and the director of the budget deems appropriate to ensure

that sufficient funds will be available from the sources identified in

this section to enable it to meet its current obligations with respect

to those obligations incurred pursuant to this section as they become

due.

5. Upon receipt of such certification, or any revision thereof, the

comptroller shall pay such dedicated highway and bridge trust fund

cooperative agreement payments to the authority in accordance with such

certification, from the dedicated highway and bridge trust fund

established by section eighty-nine-b of the state finance law. Such

payments shall be made on or before the date specified in each

certificate or within thirty days after such receipt, whichever is

later, provided that all such amounts shall have been first appropriated

by the state.

6. The agreement of the state contained in this section shall be

deemed executory only to the extent of appropriations available for

payments under this section and no liability on account of any such

payment shall be incurred by the state beyond such appropriations. The

state, acting through the director of the budget, and the authority may

enter into, amend, modify, or rescind one or more agreements providing

for the specific manner, timing, and amount of payments to be made under

this section, but only in conformity with this section.

7. The authorization, sale and issuance of bonds, notes or other

obligations pursuant to this section shall not be deemed an action as

such term is defined in article eight of the environmental conservation

law for the purposes of such article. Such exemption shall be strictly

limited in its application to such financing activities of the authority

and does not exempt the department of transportation or any other entity

from compliance with such article.

8. The state of New York shall and hereby agrees to and does indemnify

and save harmless the New York state thruway authority from and against

any and all liability, loss, damage, interest, judgments and liens

growing out of, and any and all costs and expenses (including, but not

limited to, counsel fees and disbursements) arising out of or incurred

in connection with any and all claims, demands, suits, actions or

proceedings which may be made or brought against the New York state

thruway authority arising out of any determinations made or actions

taken or omitted to be taken or compliance with any obligations under or

pursuant to this section.

9. Nothing contained in this section shall be deemed to restrict the

right of the state to amend, repeal, modify or otherwise alter statutes

imposing or relating to any taxes or fees, including the taxes imposed

pursuant to section two hundred eighty-four, articles thirteen-A and

twenty-one of the tax law and fees imposed by section four hundred one

of the vehicle and traffic law. The authority shall not include within

any resolution, contract or agreement with holders of the bonds, notes

and other obligations issued under this title any provision which

provides that a default occurs as a result of the state exercising its

right to amend, repeal, modify or otherwise alter any such taxes and

fees.

10. Any resolution authorizing bonds, notes or other obligations shall

reserve the right of the state, upon amendment of the New York state

constitution allowing the issuance, or assumption, of bonds, notes or

other obligations secured by revenues, which may include the revenues

securing bonds, notes or other obligations of the authority, (i) to

assume, in whole or in part, such bonds, notes or other obligations of

the authority, (ii) to extinguish the existing lien of such resolution,

and (iii) to substitute security for the bonds, notes, or other

obligations of the authority, in each case only so long as such

assumption, extinguishment or substitution is done in accordance with

such resolution.