N.Y. State Finance Law § 68-b: Issuance of bonds and notes

§ 68-b. Issuance of bonds and notes. 1. (a) Authorized issuers shall

have the power and are hereby authorized from time to time to issue

revenue bonds, in such principal amount or amounts, subject to

subdivision eight of this section and as the director of the budget

shall determine to be necessary, to provide sufficient funds for

authorized purposes, the establishment of reserves to secure such

revenue bonds, the payment of amounts required under revenue bonds or

agreements relating thereto, and the payment of all costs of issuance of

their revenue bonds.

(b) The authorized issuers shall have the power and are hereby

authorized from time to time to issue (i) revenue bonds to renew notes,

(ii) revenue bonds to pay notes, and (iii) whenever it deems refunding

expedient, to refund any bonds, notes, or other obligations issued for

an authorized purpose or purposes, by the issuance of new revenue bonds,

including bonds, notes, or other obligations that were issued prior to

the enactment of this article, whether the bonds, notes, or other

obligations to be refunded have or have not matured, and to issue

revenue bonds in part to refund bonds, notes, or other obligations then

outstanding and in part for any of its other authorized purposes. The

refunding revenue bonds may be exchanged for bonds, notes, or other

obligations to be refunded, or sold and the proceeds applied to the

purchase, redemption or payment of such bonds, notes, or other

obligations.

(c) Except as may otherwise be expressly provided by an authorized

issuer, every issue of revenue bonds of an authorized issuer pursuant to

this section shall be special obligations of the authorized issuer

payable solely out of any revenues paid over to such authorized issuer

from the revenue bond tax fund, established pursuant to section

ninety-two-z of this chapter.

(d) All of the provisions of the enabling acts of the authorized

issuers relating to bonds and notes, which are not inconsistent with the

provisions of this section, may, at the discretion of the authorized

issuer, apply to revenue bonds authorized by this section.

(e) The revenue bonds of the authorized issuers 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 authorized issuers pledged therefor; and such revenue bonds

shall contain on the face thereof a statement to such effect. In

addition, any agreements entered into by any entity pursuant to sections

sixty-eight-c and ninety-two-z of this chapter on behalf of the state to

effect the implementation of any of the activities financed in whole or

in part with proceeds of the revenue bonds of the authorized issuers

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 any such

agreement.

(f) (i) Revenue bonds shall be authorized by resolution of the

authorized issuers, be in such denominations, bear such date or dates

and mature at such time or times, as such resolution or other agreement

may provide.

(ii) Revenue 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, 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.

(g) Revenue bonds authorized hereunder shall be sold by authorized

issuers, at public or private sale, at such price or prices as the

authorized issuers may determine. Revenue bonds of the authorized

issuers shall not be sold by the authorized issuers at private sales

unless such sale and the terms thereof have been approved by the state

comptroller.

2. Consistent with the provisions of this article, and subject to the

approval of the director of the budget, any resolution or other

agreement authorizing revenue bonds 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 received by the

authorized issuers pursuant to section sixty-eight-c of this article to

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

subject to such agreements with holders of revenue bonds as may then

exist;

(b) pledging all or any part of the assets of the authorized issuers

to secure the payment of the revenue bonds or of any issue of revenue

bonds subject to such agreements with holders of revenue bonds 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

revenue bonds, may be applied and pledging such proceeds to secure the

payment of the revenue bonds or of any issue thereof;

(e) limitations on the issuance of additional revenue bonds the terms

upon which additional revenue bonds may be issued and secured and the

refunding of outstanding or other revenue bonds;

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

holders of revenue bonds may be amended or abrogated, the amount of

revenue bonds the holders of which must consent thereto and the manner

in which such consent may be given;

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

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

authorized issuers may determine, which may include any or all of the

rights, powers and duties of the trustee appointed by the holders of

revenue bonds of the respective authorized issuers pursuant to this

article, and limiting or abrogating the right of such revenue bond

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

powers, and duties of such trustee;

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

the obligations and duties of the authorized issuers to the holders of

the revenue bonds and providing for the rights and remedies of the

holders of the revenue bonds in event of such default, including the

right to appointment of a receiver; provided, however, that such rights

and remedies shall not be inconsistent with the other provisions of this

article;

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

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

bonds; and

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

of any applicable bond, note or other financial facility.

Notwithstanding the foregoing, the authorized issuers shall not be

authorized to make any covenant, pledge, promise, or agreement

purporting to bind the state except as otherwise specifically authorized

by this article.

3. Any pledge made by the respective authorized issuers shall be valid

and binding from the time when the pledge is made. The revenues or

property so pledged and thereafter received by the respective authorized

issuers 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 respective

authorized issuers, 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 or members of the authorized issuers nor any

other person executing the revenue bonds of the authorized issuers shall

be liable personally thereon or be subject to any personal liability or

accountability solely by reason of the issuance thereof.

5. The authorized issuers, subject to such agreements with holders of

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

bond or note or other financial or agreement facility, shall have power

out of any funds available therefor to purchase revenue bonds of the

authorized issuers, which may or may not thereupon be canceled, at a

price not exceeding:

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

then applicable, including any accrued interest; or

(b) if the revenue bonds are not then redeemable, the redemption price

and accrued interest applicable on the first date after such purchase

upon which the revenue bonds become subject to redemption; or

(c) whether or not the revenue bonds are then redeemable, at a

redemption price that provides present value savings to the state, as

certified in writing by an independent financial advisor.

No later than seven days after a redemption pursuant to paragraph (c)

of this subdivision, the director of the budget shall provide such

written certification to the chair of the senate finance committee and

the chair of the assembly ways and means committee.

6. In the discretion of the authorized issuers, the revenue bonds may

be secured by a trust indenture by and between the authorized issuers

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 revenue bonds are of such form and character as

to be negotiable instruments under the terms of the uniform commercial

code, the revenue 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 revenue bonds for registration or

any book-entry-only system.

8. Revenue bonds may only be issued for authorized purposes, as

defined in section sixty-eight-a of this article. Notwithstanding the

foregoing, the dormitory authority of the state of New York, the urban

development corporation and the New York state thruway authority may

issue revenue bonds for any authorized purpose of any other such

authorized issuer through March thirty-first, two thousand thirty. Any

such revenue bonds issued by the New York state thruway authority shall

be subject to the approval of the New York state public authorities

control board, pursuant to section fifty-one of the public authorities

law. The authorized issuers shall not issue any revenue bonds in an

amount in excess of statutory authorizations for such authorized

purposes. Authorizations for such authorized purposes shall be reduced

in an amount equal to the amount of revenue bonds issued for such

authorized purposes under this article. Such reduction shall not be made

in relation to revenue bonds issued to fund reserve funds, if any, and

costs of issuance, nor shall revenue bonds issued to refund bonds issued

under existing authorizations reduce the amount of such authorizations.

9. Except upon the 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 revenue

bonds of authorized issuers, and the affirmative assumption of such

bonds, notes or other obligations by the state, the revenue bonds of the

authorized issuers 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 authorized issuers

pledged therefor; and such revenue bonds shall contain on the face

thereof a statement to such effect. In addition, any agreements entered

into by any entity pursuant to sections sixty-eight-c and ninety-two-z

of this chapter 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 authorized issuers 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 any such agreement.

10. Nothing in this article shall affect the authority of each of the

authorized issuers to issue or incur indebtedness for any purposes

otherwise authorized by law and nothing in this article shall be deemed

to alter or affect the rights of outstanding bondholders or noteholders

of any authorized issuer.

11. The authorization, sale and issuance of revenue bonds 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 authorized issuers

hereunder and does not exempt any other entity from compliance with such

article.

12. The comptroller is hereby authorized to receive from the

authorized issuers any portion of bond proceeds paid to provide funds

for or reimburse the state for its costs associated with such authorized

purposes and to credit such amounts to the capital projects fund or any

other appropriate fund.