N.Y. Public Authorities Law § 906: Bonds of the authority

§ 906. Bonds of the authority. 1. The authority shall have the power

and is hereby authorized from time to time to issue bonds, notes or

other obligations to pay the cost of any project or for any other

purpose under this title, including the establishment of reserves to

secure the bonds, the payment of principal of, premium, if any, and

interest on the bonds and the payment of incidental expenses in

connection therewith. The aggregate principal amount of such bonds,

notes or other obligations shall not exceed ten million dollars

($10,000,000), excluding bonds, notes or other obligations issued to

refund or repay bonds, notes, or other obligations theretofore issued

for such purposes; provided, however, that upon any such refunding or

repayment the total aggregate principal amount of outstanding bonds,

notes or other obligations may be greater than ten million dollars

($10,000,000), only if the present value of the aggregate debt service

of the refunding or repayment of bonds, notes or other obligations to be

issued shall not exceed the present value of the aggregate debt service

of the bonds, notes or other obligations so to be refunded or repaid.

For purposes of this section, the present value of the aggregate debt

service of the refunding or repayment of bonds, notes or other

obligations and the aggregate debt service of the bonds, notes or other

obligations and of the aggregate debt service of the bonds, notes or

other obligations so to be refunded or repaid shall be calculated by

utilizing the effective interest rate of the refunding or repayment of

bonds, notes or other obligations, 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 of bonds, notes or other obligations from payment of dates

thereof to the date of issue of the refunding or repayment of bonds,

notes or other obligations and to the price bid including estimated

accrued interest from the sale thereof. The authority shall have the

power and is hereby authorized to enter into such agreements and perform

such acts as may be required under any applicable federal legislation to

secure a federal guarantee or other subsidy with respect to any bonds.

2. The authority shall have the power from time to time to renew bonds

or to issue renewal bonds for the purposes authorized under this title,

to issue bonds to pay bonds, and, whenever it deems refunding expedient,

to refund any bond by the issuance of new bonds, whether the bonds to be

refunded have or have not matured, and may issue bonds, partly to refund

bonds then outstanding and partly for any other purpose of the

authority. Bonds issued for refunding purposes shall be sold and the

proceeds applied to the purchase, redemption or payment of the bonds or

notes to be refunded.

3. Bonds issued by the authority may be general obligations secured by

the faith and credit of the authority or may be special obligations

payable solely out of particular revenues or other monies as may be

designated in the proceedings of the authority under which the bonds

shall be authorized to be issued, subject as to priority only to any

agreements with the holders of outstanding bonds pledging any particular

property, revenues or monies. The authority may also enter into loan

agreements, lines of credit and other security agreements and obtain for

or on its behalf letters of credit, insurance, guarantees or other

credit enhancements to the extent now or hereafter available, in each

case for securing its bonds or to provide direct payment of any costs

which the authority is authorized to pay.

4. (a) Bonds shall be authorized by resolution of the governing body

of the authority, 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 renewals thereof shall mature within thirty

years from the date of original issuance of any such bonds.

(b) Bonds 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 or registered, 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. Notwithstanding any other provision of law, the bonds of

the authority issued pursuant to this section shall be sold to the

bidder offering the lowest true interest cost, taking into consideration

any premium or discount not less than four nor more than fifteen days,

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

once in a newspaper of general circulation in the service area of the

authority, which shall state the terms of the sale. The terms of the

sale may not change unless notice of such change is published in such

newspaper at least one day prior to the date of the sale as set forth in

the original notice of sale. Advertisements shall contain a provision to

the effect that the authority, in its discretion, may reject any or all

bids made pursuant to such advertisements, and in the event of such

rejection, the authority is authorized to negotiate a private or public

sale or readvertise for bids in the form and manner above described as

many times as, in its judgment, may be necessary to effect satisfactory

sale.

(c) Notwithstanding the provisions of paragraph (b) of this

subdivision, whenever in the judgment of the authority the interests of

the authority will be served thereby, the governing body of the

authority, on the written recommendation of the chairperson may

authorize the sale of such bonds at private or public sale on a

negotiated basis or on either a competitive or negotiated basis. The

authority shall set guidelines governing the terms and conditions of any

such private or public sales. The private or public bond sale

guidelines set by the authority shall include, but not be limited to, a

requirement that where the interests of the authority will be served by

a private or public sale of bonds, the authority shall select

underwriters taking into account, among other things, qualifications of

underwriters as to experience, their ability to structure and sell

authority bond issues, anticipated costs to the authority, the prior

experience of the authority with the firm, if any, the capitalization of

such firms, participation of qualified minority and women-owned business

enterprise firms in such private or public sales of bonds of the

authority and the experience and ability of firms under consideration to

work with minority and women-owned business enterprises so as to promote

and assist participation by such enterprises.

(d) The authority shall have the power from time to time to amend such

private bond sale guidelines in accordance with the provisions of this

subdivision.

(e) In addition to the authority to sell notes at private sale

contained in this section.

(f) No private or public bond sale on a negotiated basis shall be

conducted by the authority without prior approval of the state

comptroller. The authority shall annually prepare and approve a bond

sale report which shall include the private or public bond sale

guidelines as specified in this subdivision, amendments to such

guidelines since the last private or public bond sale report, an

explanation of the bond sale guidelines and amendments, and the results

of any sale of bonds conducted during the fiscal year. Such bond sale

report may be a part of any other annual report that the authority is

required to make.

(g) The authority shall annually submit its bond sale report to the

state comptroller and copies thereof to the senate finance committee and

the assembly ways and means committee.

(h) The authority shall make available to the public copies of its

bond sale report upon reasonable request thereof.

(i) Nothing contained in this subdivision shall be deemed to alter,

affect the validity of, modify the terms of, or impair any contract or

agreement made or entered into in violation of, or without compliance

with, the provisions of this subdivision.

5. Any resolution or resolutions authorizing bonds or any issue of

bonds by the authority may contain provisions which may be a part of the

contract with the holders of the bonds thereby authorized as to:

(a) pledging all or part of the revenues, together with any other

monies or property of the authority to secure the payment of the bonds,

or any costs of issuance thereof, including but not limited to, any

contracts, earnings or proceeds of any grant to the authority received

from any private or public source subject to such agreements with

bondholders as may then exist;

(b) the setting aside of reserves and the creation of sinking the

funds and the regulation and disposition thereof;

(c) limitations on the purpose to which the proceeds from the sale of

bonds may be applied;

(d) the rates, rents, fees and other charges to be fixed and collected

by the authority and the amount to be raised in each year thereby and

the use and disposition of revenues;

(e) limitations on the right of the authority to restrict and regulate

the use of the project or part thereof in connection with which bonds

are issued;

(f) limitations on the issuance of additional bonds, the terms upon

which additional bonds may be issued and secured and the refunding of

outstanding or other bonds;

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

bondholders may be amended or abrogated, including the proportion of

bondholders which must consent thereto, and the manner in which such

consent may be given;

(h) the creation of special funds into which any revenues or monies

may be deposited;

(i) the terms and provisions of any trust, mortgage, deed or indenture

securing the bonds under which the bonds may be issued;

(j) vesting in a trustee or trustees such properties, rights, powers

and duties in trust as the authority may determine which may include any

or all of the rights, powers and duties of the trustees appointed by the

bondholders pursuant to this title or limiting the rights, duties and

powers of such trustee;

(k) defining the acts or omissions to act which may constitute a

default in the obligations and duties of the authority to the

bondholders and providing for the rights and remedies of the bondholders

in the event of such default, including as a matter of right appointment

of a receiver, provided, however, that such rights and remedies shall

not be inconsistent with the general laws of the state and other

provisions of this title;

(l) limitations on the power of the authority to sell or otherwise

dispose of any project or any part thereof or other property;

(m) limitations on the amount of revenues and other monies to be

expended or operating, administrative or other expenses of the

authority;

(n) the payment of the proceeds of bonds, revenues and other monies to

a trustee or other depository, and for the method of disbursement

thereof with such safeguards and restrictions as the authority may

determine; and

(o) any other matters of like or different character which in any way

affect the security or protection of the bonds or the rights and

remedies of the bondholders.

6. In addition to the powers conferred under this section upon the

authority to secure its bonds, the authority shall have the power in

connection with the issuance of bonds to adopt resolutions and enter

into such trust indentures, agreements or other instruments as the

authority may deem necessary, convenient or desirable concerning the use

or disposition of its revenues or other monies or property, including

the mortgaging of any property and the entrusting, pledging or creation

of any other security interest in any such revenues, monies or property

and the doing of any act, including refraining from doing any act which

the authority would have the right to do in the absence of such

resolutions, trust indentures, agreements or other instruments. The

authority shall have power to enter into amendments of any such

resolutions, trust indentures, agreements or other instruments within

the powers granted to the authority by this title and to perform such

resolutions, trust indentures, agreements or other instruments. The

provisions of any such resolutions, trust indentures, agreements or

other instruments may be made a part of the contract with the holders of

bonds of the authority.

7. Any provision of the uniform commercial code to the contrary

notwithstanding, any pledge of or other security interest in revenues,

monies, accounts, contract rights, general intangibles or other personal

property made or created by the authority shall be valid, binding and

perfected from the time when such pledge is made or other security

interest attaches without any physical delivery of the collateral or

further act, and the lien of any such pledge or other security interest

shall be valid, binding and perfected against all parties having claims

of any kind in tort, contract or otherwise against the authority

irrespective of whether or not such parties have notice thereof. No

instrument by which such a pledge or security interest is created nor

any financing statement need be recorded or filed.

8. Whether or not the bonds of the authority are of such form and

character as to be negotiable instruments under the terms of the uniform

commercial code, the bonds 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 for registration.

9. Neither the members of the governing body of the authority nor the

officers of the authority nor any person executing its bonds shall be

liable personally on its bonds or be subject to any personal liability

or accountability by reason of the issuance thereof.

10. Subject to such agreements with bondholders as may then exist, the

authority shall have power out of any funds available therefor to

purchase bonds of the authority, in lieu of redemption, at a price not

exceeding, if the bonds are then redeemable, the redemption price then

applicable plus accrued interest to the next interest payment date, or,

if the bonds are not then redeemable, the redemption price applicable on

the first date after such purchase upon which the bonds become subject

to redemption plus accrued interest to the next interest payment date.

Bonds so purchased shall thereupon be canceled.

11. The authority shall have power and is hereby authorized to issue

negotiable bond anticipation notes in conformity with applicable

provisions of the uniform commercial code and may renew the same from

time to time but the maximum maturity of any such note, including

renewals thereof, shall not exceed five years from the date of issue of

such original note.