There is a newer version of the New York Consolidated Laws
2006 New York Code - NYS Project Finance Agency Act7/75
NYS Project Finance Agency Act7/75
Chapter 7 of the laws of 1975
NEW YORK STATE
PROJECT FINANCE AGENCY ACT
Section 1. Short title.
2. Declaration of policy and statement of purposes.
3. Definitions.
4. New York state project finance agency.
5. Powers of the agency.
6. Bonds and notes of the agency.
7. Reserve funds and appropriations.
8. Bonds and notes as legal investments.
9. Exemption from taxation of property and income.
10. Exemption from taxation of notes and bonds.
11. Agreement with the state.
12. State's right to require redemption of bonds.
13. Remedies of noteholders and bondholders.
14. Monies of the agency.
15. Supervision of projects.
16. Assistance by state officers, departments, boards and
commissions.
17. Annual report.
18. Maximum authorization.
19. Partial invalidity.
20. Inconsistent provisions in other laws superseded.
21. Certain special proceedings.
21-a.Actions against corporation.
22. Construction.
§ 1. Short title.
This act may be cited as the "New York state project finance
agency act."
§ 2. Declaration of policy and statement of purposes.
The legislature has heretofore created the New York state
urban development corporation to engage in the construction of
projects to fulfill essential public purposes which are
necessary for the health, safety and welfare of the people of
this state, as found by the legislature in section two of the
New York state urban development corporation act.
In order to assist in the completion of projects to which the
corporation is contractually obligated, to provide for the
orderly marketing of obligations to finance such completion, and
to provide for the orderly payment of debt service of the
corporation, it is hereby found and declared that a separate
corporate governmental agency, to be known as the "New York
state project finance agency," should be created as a single
purpose agency to provide long-term financing to the New York
state urban development corporation, by acquiring funds from
appropriations by the state and from sale of its notes and
bonds.
It is hereby declared that the aforementioned purposes are
public uses and public purposes for which public money may be
loaned and tax exemptions granted, and that the powers and
duties of the New York state project finance agency, as
hereinafter prescribed are necessary and proper for the purpose
of achieving the ends here recited.
§ 3. Definitions.
As used in this act, unless a different meaning clearly
appears from the context:
1. "Agency" shall mean the corporate governmental agency
created by section four of this act.
2. "Bonds" and "notes" shall mean bonds and notes,
respectively, issued by the agency pursuant to this act.
3. "Commissioner" shall mean the commissioner of housing and
community renewal of the state.
4. "Comptroller" shall mean the comptroller of the state.
5. "Corporation" shall mean the New York state urban
development corporation.
6. "Corporation first mortgage" shall mean a first mortgage on
a corporation project securing a loan by the corporation.
7. "Corporation project" shall mean a residential project as
defined in the New York state urban development corporation act.
8. "Eligible loan" shall mean a loan by the agency to the
corporation, approved by the commissioner as provided in this
act, evidenced by the issuance to the agency of notes of the
corporation (which for this purpose may be negotiable or
non-negotiable and may have any term not exceeding fifty years),
and secured by the pledge and assignment of a corporation first
mortgage and any contract or arrangement for the payment of
subsidy to the corporation on account of the corporation project
securing such mortgage, as well as by the pledge and assignment
of such other existing and future assets and revenues of the
corporation and the receipts to be derived therefrom as may be
determined by the commissioner to be required in order for the
agency to obtain borrowings to finance such eligible loan.
9. "Eligible purchase" shall mean the purchase by the agency
from the corporation of a corporation first mortgage and the
assignment to the agency of any contract or arrangement for the
payment of subsidy to the corporation on account of the
corporation project securing such mortgage.
§ 4. New York state project finance agency.
1. There is hereby created the New York state project finance
agency. The agency shall be a corporate governmental agency
constituting a public benefit corporation. Its membership shall
consist of the commissioner of taxation and finance, the
commissioner, the director of the budget, the chairman of the
New York state housing finance agency and three members to be
appointed by the governor with the advice and consent of the
senate. The members first appointed by the governor shall serve
for terms ending two, four and six years, respectively, from
January first next succeeding their appointment. Their
successors shall serve for terms of six years each. Members
shall continue in office until their successors have been
appointed and have qualified. In the event of a vacancy
occurring in the office of any member by death, resignation or
otherwise, the governor shall appoint a successor with the
advice and consent of the senate to serve for the balance of the
unexpired term. The provisions of section thirty-nine of the
public officers law shall apply to such members. The chairman of
the New York state housing finance agency shall serve as
chairman of the agency.
2. The powers of the agency shall be vested in and exercised
by a majority of the members then in office. The commissioner of
taxation and finance, the commissioner, and the director of the
budget each may appoint a person from their respective
department, office or division to represent such member,
respectively, at all meetings of the agency from which such
member may be absent. Any such representative so designated
shall have the power to attend and to vote at any meeting of the
agency from which the member so designating him as a
representative is absent with the same force and effect as if
the member designating him were present and voting. Such
designation shall be by written notice filed with the chairman
of the agency by each of the said members. The designation of
such persons shall continue until revoked at any time by written
notice to the chairman by the respective member making the
designation. Such designation shall not be deemed to limit the
power of the appointing member to attend and vote at any meeting
of the agency.
3. The members shall serve without salary or other
compensation, but each member shall be entitled to reimbursement
for actual and necessary expenses incurred in the performance of
his or her official duties.
4. Such members, except as otherwise provided by law, may
engage in private employment, or in a profession or business.
The members, officers and employees of the agency shall be
deemed to be state officers or employees for the purposes of
sections seventy-three and seventy-four of the public officers
law. Notwithstanding the provisions of the preceding sentence or
of any other law, any state instrumentality (including any state
agency, trust fund or public benefit corporation other than the
agency) may purchase from, sell to, borrow from, loan to,
contract with or otherwise deal with any corporation, trust,
association, partnership or other entity in which any member of
the agency has a financial interest, direct or indirect, and the
agency may engage in any such transaction with any other state
instrumentality with which any member of the agency is
affiliated as a state officer or employee, provided that prior
to such transaction such interest or affiliation is disclosed to
such other state instrumentality and is disclosed in the minutes
of the agency, and provided further that no member having such
an affiliation (except such an affiliation with the New York
state housing finance agency) shall participate in any decision
of the agency affecting such transaction.
5. The chief executive officer of the agency shall be the
executive director of the New York state housing finance agency.
6. Notwithstanding any inconsistent provisions of law,
general, special or local, no officer or employee of the state
or of any civil division thereof shall be deemed to have
forfeited or shall forfeit his office or employment by reason of
his acceptance of membership on the agency created by this
section; provided, however, that a member who holds such other
public office or employment shall receive no additional
compensation or allowance for services rendered pursuant to this
act, but shall be entitled to reimbursement for his actual and
necessary expenses incurred in the performance of such services.
7. The governor may remove any member appointed by him for
inefficiency, neglect of duty or misconduct in office after
giving him a copy of the charges against him and an opportunity
to be heard, in person or by counsel in his defense, upon not
less than ten days' notice. If any such member shall be removed,
the governor shall file in the office of the department of state
a complete statement of charges made against such member and his
findings thereon, together with a complete record of the
proceeding.
8. The agency and its corporate existence shall terminate on
the first date subsequent to the thirtieth day of April,
nineteen hundred seventy-seven, which is thirty days after
payment in full of all its bonds, notes or other obligations
(other than obligations for repayment of appropriations), and
may be sooner terminated by law, provided, however, that no such
law shall take effect so long as the agency shall have bonds,
notes or other obligations (other than obligations for repayment
of appropriations) outstanding, unless adequate provision has
been made for the payment thereof. Upon termination of the
existence of the agency, all its rights and properties shall
pass to and be vested in the corporation as transferee of the
agency's obligations for repayment of appropriations,
theretofore transferred by the state to the corporation pursuant
to a chapter of the laws of nineteen hundred seventy-five, and
any remaining obligations of the agency for such repayment shall
be cancelled.
9. A majority of the members of the agency then in office
shall constitute a quorum for the transaction of any business or
the exercise of any power or function of the agency. The agency
may delegate to one or more of its members, or its officers,
agents or employees, such powers and duties as it may deem
proper.
10. The state shall save harmless and indemnify directors,
officers and employees of the agency pursuant to section
seventeen of the public officers law against any claim, demand,
suit or judgment arising by reason of any act or omission to act
by such director, officer or employee occurring in the discharge
of his duties and within the scope of his service on behalf of
the agency. In the event of any claim, demand, suit or judgment
based on allegations that financial loss was sustained by any
person in connection with the acquisition, disposition or
holding of securities or other obligations of the agency (or
those of any other public corporation if such loss allegedly
resulted from its dealing with the agency), a director, officer
or employee of the agency shall be saved harmless and
indemnified, notwithstanding the limitations of subdivision one
of section seventeen of the public officers law, unless such
individual is found by a final judicial determination not to
have acted, in good faith, for a purpose which he reasonably
believed to be in the best interests of the agency or not to
have had reasonable cause to believe that his conduct was
lawful.
§ 5. Powers of the agency.
Except as otherwise limited by this act and subject to the
provisions of any contract with noteholders or bondholders, the
agency shall have power:
1. To sue and be sued;
2. To have a seal and alter the same at pleasure;
3. To make and execute contracts and all other instruments
necessary or convenient for the exercise of its powers and
functions under this act;
4. To make and alter by-laws for its organization and internal
management;
5. To acquire, hold and dispose of real or personal property
(whether tangible or intangible) for its corporate purposes;
6. To appoint officers, agents and employees, prescribe their
duties and qualifications and fix their compensation;
7. To borrow money and issue negotiable or non-negotiable
notes, bonds or other obligations and to provide for the rights
of the holders thereof, and as security for the payment of the
principal of and interest on any notes or bonds so issued and
any agreements made in connection therewith, to assign or pledge
any or all existing and future assets or revenues owned by or
assigned or pledged to the agency and the receipts to be derived
therefrom;
8. To accept appropriations made to it by the state and to
apply the proceeds of such appropriations, together with the
proceeds of borrowings by the agency and any other funds
available to it, for the purposes set forth in this act, and
from time to time to enter into a repayment agreement with the
state in respect of such appropriations on such terms and
conditions as the director of the budget determines are
appropriate for the repayment of any and all outstanding sums
then owed in such respect by the agency and each such agreement
shall supersede all prior such agreements, provided that such
repayment agreements shall require payments thereunder in any
fiscal year of the agency only to the extent that the agency's
revenues and receipts from operations (excluding borrowings,
proceeds of sales of assets and appropriations) during its
preceding fiscal year shall exceed the aggregate amount payable
by the agency during such preceding year for expenses (including
reasonable reserves for contingencies) and debt service (without
regard to any refunding of debt) plus the amount of any eligible
purchases and eligible loans made during either such year out of
any balance of such revenues and receipts from operations;
9. To invest any funds held in reserve or sinking funds, or
any funds not required for immediate use or disbursement, at the
discretion of the agency, in obligations of the state or federal
government, obligations the principal and interest of which are
guaranteed by the state or federal government, or obligations of
agencies of the federal government, or special time deposits in,
or certificates of deposit issued by, a bank or trust company
authorized to do business in this state and secured by a pledge
of obligations of the United States of America or obligations of
the state or obligations the principal and interest of which are
guaranteed by the state or federal government or obligations of
agencies of the federal government, provided that any such
investment is one which may from time to time be legally
purchased by savings banks of the state as investments of funds
belonging to them or in their control;
10. To make eligible purchases at such purchase price as the
commissioner shall approve (including a purchase price at a
premium over the par value of the corporation first mortgage to
be purchased) which shall be determined on the basis that such
purchase price is to be amortized over the remaining term of the
corporation first mortgage at the corporation's estimated
average cost of borrowing (as determined by the commissioner in
accordance with any accepted method) utilizing the annual
payments of principal and interest called for by such mortgage,
and otherwise on such terms and conditions, not inconsistent
with this act, as are satisfactory to the agency; provided that
no eligible purchase shall be made by the agency unless, except
as otherwise permitted by contract with bondholders or
noteholders, the commissioner finds that
(a) the mortgage purchased is (or in the case of a purchase
not involving the use of funds acquired through the issuance of
bonds or notes of the agency, can reasonably be anticipated to
become) a valid first mortgage lien on a corporation project
free and clear of all other liens and encumbrances which would
materially affect the value or usefulness of the property
secured thereby (or that arrangements satisfactory to the
commissioner for the discharge of such liens and encumbrances
have been made) and that such first mortgage has been executed
and recorded in accordance with the requirements of existing
laws; and
(b) the estimated net revenues of such corporation project,
after provision has been made to cover all probable costs of
operation and maintenance, of fixed charges and operating
reserves and depreciation reserves, if any, including any
subsidy payments attributable to such corporation project, shall
be sufficient to pay the estimated principal of and interest on
all bonds or notes of the agency issued or to be issued which
are allocated or re-allocated by the commissioner to the
financing of the purchase of such mortgage (after giving effect
to such estimated net revenues related to mortgages purchased or
acquired as security for eligible loans made with state
appropriations or other available funds which are concurrently
allocated or re-allocated to such financing) and any fees and
charges of the agency applicable to such eligible purchase.
Subject to the provisions of any contract of the agency or the
corporation with their respective noteholders or bondholders,
(i) the corporation shall have authority to make an additional
mortgage loan, pursuant to the private housing finance law and
the New York state urban development corporation act, for any
corporation project the corporation first mortgage on which has
been purchased by the agency, such loan to be made on an
additional mortgage junior and subordinate only to the mortgage
that was purchased by the agency but otherwise equivalent to a
corporation first mortgage, (ii) the agency shall have authority
to make an eligible purchase, pursuant to this act, of such
additional mortgage notwithstanding that it is not a corporation
first mortgage, at any time at or after the making of the first
advance on such additional mortgage by the corporation, with the
purchase price (including any applicable premium) to be payable
at such times and in such amounts as shall be agreed by the
agency and the corporation, and (iii) upon such a purchase by
the agency such additional mortgage may be consolidated with the
corporation first mortgage previously purchased by the agency;
11. To make eligible loans on such terms and conditions, not
inconsistent with this act, as are satisfactory to the agency;
provided that no eligible loan shall be made by the agency
unless, except as otherwise permitted by contract with
bondholders or noteholders, the commissioner finds that
(a) the mortgage securing the eligible loan is (or in the case
of a loan not involving the use of funds acquired through the
issuance of bonds or notes of the agency, can reasonably be
anticipated to become) a valid first mortgage lien on a
corporation project free and clear of all other liens and
encumbrances which would materially affect the value or
usefulness of the property secured thereby (or that arrangements
satisfactory to the commissioner for the discharge of such liens
and encumbrances have been made) and that such first mortgage
has been executed and recorded in accordance with the
requirements of existing laws; and
(b) the estimated net revenues of such corporation project,
after provision has been made to cover all probable costs of
operation and maintenance, of fixed charges and operating
reserves and depreciation reserves, if any, including any
subsidy payments attributable to such corporation project, shall
be sufficient to pay the estimated principal of and interest on
all bonds or notes of the agency issued or to be issued which
are allocated or re-allocated by the commissioner to the
financing of such eligible loan (after giving effect to such
estimated net revenues related to mortgages purchased or
acquired as security for eligible loans made with state
appropriations or other available funds which are concurrently
allocated or re-allocated to such financing) and any fees and
charges of the agency applicable to such eligible loan;
12. To use and apply all monies received by the agency on
account of the corporation first mortgages purchased by the
agency or on account of the corporation first mortgages and
other assets or revenues assigned or pledged to it as security
for eligible loans:
(a) In the case of such corporation first mortgages and other
assets or revenues assigned or pledged by the agency as security
for outstanding bonds of the agency, to meet payments of
principal and interest on such outstanding bonds and any fees
and charges of the agency related to the respective corporation
first mortgages, and any excess shall be applied in accordance
with paragraph (d) of this subdivision;
(b) In the case of such corporation first mortgages and other
assets or revenues assigned or pledged by the agency as security
for outstanding notes of the agency, to meet payments of
principal and interest on such outstanding notes (including the
redemption of any note payment certificates delivered pursuant
to subdivision three of section seven of this act) and any fees
and charges of the agency related to the respective corporation
first mortgages, and any excess shall be applied in accordance
with paragraph (d) of this subdivision;
(c) In the case of any such corporation first mortgages and
other assets or revenues assigned or pledged by the agency as
security for its guaranty of obligations of the corporation,
pursuant to subdivision twenty-one of this section, to be
applied in accordance with the provisions of such guaranty, and
any excess shall be applied in accordance with paragraph (d) of
this subdivision; and
(d) In the case of any such corporation first mortgages and
other assets or revenues not assigned or pledged by the agency
as security, and in the case of excess amounts to be applied in
accordance with this paragraph as provided above, first, to meet
payments of principal and interest on any outstanding bonds or
notes of the agency (including the redemption of any note
payment certificates delivered pursuant to subdivision three of
section seven of this act) and the fees and charges of the
agency, irrespective of the corporation project or projects from
which such monies are derived, and, second, any balance shall be
applied as follows: (i) in the case of any such monies received
on account of such corporation first mortgages and other assets
or revenues that had been assigned or pledged to the agency as
security for eligible loans, to pay over such balance to the
corporation in accordance with the terms and conditions of such
eligible loans; and (ii) in the case of any such monies received
on account of such corporation first mortgages that had been
purchased by the agency, to make further eligible purchases or
eligible loans to the extent deemed appropriate by the
commissioner, to pay any remaining balance to the corporation in
reduction of the agency's obligations for repayment of
appropriations theretofore transferred by the state to the
corporation pursuant to a chapter of the laws of nineteen
hundred seventy-five, and, in the event of payment in full by
the agency of such obligations, to apply any remaining balance
as the members of the agency, in their discretion, with the
approval of the commissioner, shall determine to be in the best
interests of the agency and the corporation and their respective
bondholders and noteholders.
13. To sell, at public or private sale, any obligations,
property or rights representing, embodying or securing an
eligible loan made by the agency or acquired in an eligible
purchase;
14. In connection with the making of eligible purchases,
eligible loans and commitments therefor, to make and collect
such fees and charges, including but not limited to
reimbursements of all costs of financing by the agency, service
charges and insurance premiums, as the agency shall determine to
be reasonable;
15. To consent to the modification, with respect to rate of
interest, time of payment of any installment of principal or
interest, security, or any other term, of any eligible loan,
eligible loan commitment, eligible purchase, eligible purchase
commitment, contract or agreement of any kind to which the
agency is a party;
16. To exercise exclusively all rights of the mortgagee under
any corporation first mortgage purchased by the agency or
assigned to secure any eligible loan, to foreclose on any
property subject to such mortgage or commence any action to
protect or enforce any right conferred upon it by any law,
mortgage, contract or other agreement, and to bid for and
purchase such property at any foreclosure or at any other sale,
or acquire or take possession of any such property; and in such
event the agency may complete, administer, pay the principal of
and interest on any obligations incurred in connection with such
property, dispose of, and otherwise deal with, such property, in
such manner as may be necessary or desirable to protect the
interests of the agency therein;
17. To procure insurance against any loss in connection with
its property and other assets (including mortgages and mortgage
loans) in such amounts, and from such insurers, as it deems
desirable;
18. To accept any gifts or grants or loans of funds or
property or financial or other aid in any form, including but
not limited to mortgage insurance, from the federal government
or any agency or instrumentality thereof or from the state or
from any other source and to comply, subject to the provisions
of this act, with the terms and conditions thereof;
19. To engage the services of private consultants on a
contract basis for rendering professional and technical
assistance and advice;
20. To enter into a contract with the New York state housing
finance agency to market and service any agency bonds and notes
approved by the agency and to contract with the New York state
housing finance agency to render such other services as the
agency may request, including but not limited to the use of the
premises, personnel and personal property of the New York state
housing finance agency, and to provide for reimbursement to the
New York state housing finance agency from the agency for any
expenses necessarily incurred by the New York state housing
finance agency in carrying out the terms of any such contract.
Any such contract shall be subject to the separate approval of
the director of the budget;
21. To guarantee obligations of the corporation and to assign
or pledge as security for any such guaranty any or all of the
obligations, property or rights representing, embodying or
securing an eligible loan made by the agency or acquired in an
eligible purchase;
22. To do any and all things necessary or convenient to carry
out its purposes and exercise the powers expressly given and
granted in this act.
§ 6. Bonds and notes of the agency.
1. (a) The agency shall have power and is hereby authorized
from time to time to issue its negotiable or non-negotiable
bonds and notes in such principal amount as, in the opinion of
the agency, shall be necessary to provide sufficient funds for
achieving its corporate purposes, including the making of
eligible purchases and eligible loans, the payment of interest
on bonds and notes of the agency, establishment of reserves to
secure such bonds and notes, and all other expenditures of the
agency incident to and necessary or convenient to carry out its
corporate purposes and powers;
(b) The agency shall have power, from time to time, to issue
renewal notes, to issue bonds to pay notes 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 other purpose. The refunding
bonds shall be sold and the proceeds applied to the purchase,
redemption or payment of the bonds to be refunded;
(c) Except as may otherwise be expressly provided by the
agency, every issue of its notes or bonds shall be general
obligations of the agency payable out of any revenues or monies
of the agency, subject only to any agreements with the holders
of particular notes or bonds pledging any particular receipts or
revenues or other property.
2. The notes and bonds shall be authorized by resolution of
the members, shall bear such date or dates, and shall mature at
such time or times, in the case of any such note, or any
renewals thereof, not exceeding ten years from the date of issue
of such original note, and in the case of any such bond not
exceeding fifty years from the date of issue, as such resolution
or resolutions may provide. The notes and bonds shall bear
interest at such rates, be in such denominations, 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 of redemption as such resolution or resolutions may
provide. The notes and bonds of the agency may be sold by the
agency, at public or private sale, at such price or prices as
the agency shall determine. No notes or bonds of the agency may
be sold by the agency at private sale, however, unless such sale
and the terms thereof have been approved in writing by (a) the
comptroller, where such sale is not to the comptroller, or (b)
the director of the budget, where such sale is to the
comptroller.
3. Any resolution or resolutions authorizing any notes or
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 fees and charges made or
received by the agency, and all or any part of the payments to
be received in respect of corporation first mortgages purchased
by the agency or in respect of eligible loans, and any amounts
realized on account of the corporation first mortgages and other
assets or revenues pledged or assigned as security for such
eligible loans, and other monies received or to be received, to
secure the payment of 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 or revenues of the
agency, including mortgages and other obligations, owned by or
pledged or assigned to the agency, to secure the payment of the
bonds or notes, subject to such agreements with bondholders or
noteholders as may then exist;
(c) the use and disposition of payments received on account of
mortgages and other obligations owned by or pledged or assigned
to the agency;
(d) the setting aside of reserves or sinking funds and the
regulation and disposition thereof;
(e) limitations on the purpose to which the proceeds of sale
of notes or bonds may be applied and pledging such proceeds to
secure the payment of the notes or bonds or of any issue
thereof;
(f) limitations on the issuance of additional notes or bonds;
the terms upon which additional notes or bonds may be issued and
secured; the refunding of outstanding or other notes or bonds;
(g) the procedure, if any, by which the terms of any contract
with noteholders or bondholders may be amended or abrogated, the
amount of notes or bonds the holders of which must consent
thereto, and the manner in which such consent may be given;
(h) limitations on the amount of monies to be expended by the
agency for operating, administrative or other expenses of the
agency;
(i) vesting in a trustee or trustees or an agent or agents,
for bondholders or noteholders, such property, rights, powers
and duties in trust or as security as the agency may determine,
which may, but not by way of limitation, include any or all of
the rights, powers and duties of the trustee which may be
appointed by bondholders or noteholders pursuant to section
thirteen of this act, and limiting or abrogating the
applicability of section thirteen of this act to the affected
bonds or notes, the holders thereof or any trustee or agent for
such holders;
(j) any other matters, of like or different character, which
in any way affect the security or protection of the notes and
bonds.
4. It is the intention hereof that any pledge or assignment
for security made by the agency shall be valid and binding from
the time when the same is made; that the monies or property so
pledged or assigned and then held or thereafter received by the
agency shall immediately be subject to the lien or security
interest of such pledge or assignment without any physical
delivery thereof or further act; and that the lien or security
interest of any such pledge or assignment shall be valid and
binding as against all parties having claims of any kind in
tort, contract or otherwise against the agency, irrespective of
whether such parties have notice thereof. Neither the resolution
nor any other instrument by which any such pledge or assignment
is created need be recorded, and no filing with respect to such
pledge or assignment need be made under the uniform commercial
code.
5. Neither the members of the agency nor any person executing
the notes or bonds shall be liable personally on the notes or
bonds or be subject to any personal liability or accountability
by reason of the issuance thereof.
6. The agency, subject to such agreements with noteholders and
bondholders as may then exist, shall have power out of any funds
available therefor to purchase notes or bonds of the agency,
which shall thereupon be cancelled, at a price not exceeding (a)
if the notes or bonds are then redeemable, the redemption price
then applicable plus accrued interest to the next interest
payment date thereon, or (b) if the notes or bonds are not then
redeemable, the redemption price applicable on the first date
after such purchase upon which the notes or bonds become subject
to redemption plus accrued interest to such date.
7. The state shall not be liable on notes or bonds of the
agency and such notes and bonds shall not be a debt of the
state, and such notes and bonds shall contain on the face
thereof a statement to such effect.
§ 7. Reserve funds and appropriations.
1. (a) For the purposes of the issuance by the agency of
bonds, the term "capital reserve fund requirement" shall mean,
as of any particular date of computation, with respect to each
capital reserve fund of the agency an amount of money equal to
the greatest of the respective amounts, for the then current or
any succeeding calendar year, of annual debt service payments of
the agency on the bonds secured by such capital reserve fund,
such annual debt service payments for any calendar year being an
amount of money equal to the aggregate of the following with
respect to all such bonds of the agency outstanding on said date
of computation; (i) all interest payable during such calendar
year, plus (ii) the principal amount which matures (net of any
sinking fund payments payable in prior years) during such
calendar year, plus (iii) the amount of all sinking fund
payments payable during such calendar year; and the term
"sinking fund payment" shall mean the amount of money specified
in the resolution authorizing term bonds as payable into a
sinking fund for the amortization of such term bonds. The agency
may create and establish one or more special funds to be known
as capital reserve funds and may pay into each such reserve fund
(1) any monies appropriated and made available by the state for
the purposes of such fund, (2) any proceeds of sale of notes or
bonds, to the extent provided in the resolution of the agency
authorizing the issuance thereof, and (3) any other monies which
may be made available to the agency for the purposes of such
fund from any other source or sources. The monies held in or
credited to any capital reserve fund established under this
subdivision, except as hereinafter provided, shall be used
solely for the payment of the principal of bonds of the agency
secured by such reserve fund, as the same mature, sinking fund
payments with respect to such bonds of the agency, the purchase
of such bonds of the agency, the payment of interest on such
bonds of the agency, or the payment of any redemption premium
required to be paid when such bonds are redeemed prior to
maturity; provided, however, that monies in any such fund shall
not be withdrawn therefrom at any time in such amount as would
reduce the amount of such fund to less than the capital reserve
fund requirement, except for the purpose of paying principal and
interest on the bonds of the agency secured by such reserve fund
maturing and becoming due or any sinking fund payments with
respect to such bonds and for the payment of which other monies
of the agency are not available. Any income or interest earned
by, or increment to, any capital reserve fund due to the
investment thereof may be transferred to any other fund or
account of the agency to the extent it does not reduce the
amount of such capital reserve fund below the capital reserve
fund requirement.
(b) The agency shall not issue bonds at any time if upon
issuance, the amount in the capital reserve fund securing such
bonds will be less than the capital reserve fund requirement
unless the agency, at the time of issuance of such bonds shall
deposit in such reserve fund from the proceeds of the bonds so
to be issued, or otherwise, an amount which together with the
amount then in such reserve fund, will be not less than the
capital reserve fund requirement.
(c) To assure the continued operation and solvency of the
agency for the carrying out of the public purposes of this act,
provision is made in paragraph (a) of this subdivision for the
accumulation in each capital reserve fund of an amount equal to
the capital reserve fund requirement. In order further to
assure the maintenance of each such capital reserve fund, there
shall be annually apportioned and paid to the agency for deposit
in each capital reserve fund such sum, if any, as shall be
certified by the chairman of the agency to the governor and
director of the budget as necessary to restore such reserve fund
to an amount equal to the capital reserve fund requirement. The
chairman of the agency shall annually, on or before December
first, make and deliver to the governor and director of the
budget his certificate stating the sum or sums, if any, required
to restore each such capital reserve fund to the amount
aforesaid and the sums so certified, if any, shall be
apportioned and paid to the agency during the then current state
fiscal year.
(d) In computing any capital reserve fund for the purposes of
this section, securities in which all or a portion of such
reserve fund shall be invested shall be valued at par if
purchased at par, or if purchased at other than par, at
amortized value. As used herein "amortized value" shall mean,
when used with respect to securities purchased at a premium
above or a discount below par, the value as of any given date
obtained by dividing the total amount of the premium or discount
at which such securities were purchased by the number of days
remaining to maturity on such securities at the time of such
purchase and by multiplying the amount so calculated by the
number of days having passed since the date of such purchase;
and (a) in the case of securities purchased at a premium, by
deducting the product thus obtained from the purchase price, and
(b) in the case of securities purchased at a discount, by adding
the product thus obtained to the purchase price.
2. The agency may create and establish one or more special
funds (herein each referred to as a general reserve fund) and
shall pay into each such fund, to the extent required by
agreements with holders of bonds or notes secured by such fund,
all fees and charges collected by the agency pursuant to
subdivision fourteen of section five of this act and any monies
which the agency shall transfer from the related capital reserve
fund pursuant to the provisions of paragraph (a) of subdivision
one of this section. Such monies and any other monies paid into
a general reserve fund may, in the discretion of the agency, but
subject to agreement with bondholders or noteholders, be used by
the agency (a) for the repayment of advances from the state in
accordance with the provisions of repayment agreements between
the agency and the director of the budget, (b) to reimburse the
division of housing and community renewal the reasonable costs
of the services performed by the commissioner and the division
pursuant to the provisions of this act, (c) to pay all costs,
expenses and charges of financing, including fees and expenses
of trustees and paying agents, (d) for transfers to the related
capital reserve fund, (e) for the payment of principal and
interest on bonds or notes issued by the agency and secured by
such general reserve fund when the same shall become due whether
at maturity or on call for redemption and for the payment of any
redemption premium required to be paid where such bonds or notes
are redeemed prior to their stated maturities and any sinking
fund payments, and to purchase such bonds or notes issued by the
agency, or (f) for such other corporate purposes of the agency
as the agency in its discretion shall determine and provide.
3. (a) This subdivision shall be applicable if the agency
shall issue notes (herein called "secured notes") secured by the
pledge and assignment of assets or revenues of the agency, with
provision under certain circumstances for amortization of the
principal amount of such notes over a period of years. Upon the
issuance of any secured notes, and if necessary upon the actual
commencement of amortization of principal, the agency shall
determine the amount which, notwithstanding the actual terms of
such notes for payment of interest and principal or for the
application thereto of receipts from the pledged assets or
revenues, would then be required to be provided as hypothetical
monthly level debt service payments in order to pay the stated
interest on and to amortize the maximum principal amount of the
secured notes over the longest period of years then allowed for
full amortization of principal under the terms of the secured
notes. The aggregate for all secured notes of the portion of
such hypothetical level debt service payments that would be
payable in any twelve consecutive months during such period of
amortization thereof, but in no event an amount greater than
twenty per cent of the maximum principal amount of the secured
notes, as of any particular date of computation, is herein
called the "note service requirement" of the agency.
(b) The agency shall create and establish a special fund to be
known as the "note service reserve fund," and upon the issuance
of any secured notes shall create and deposit therein note
payment certificates (herein called "note payment certificates")
in an aggregate principal amount equal to the note service
requirement as then computed. Any note payment certificates that
are in excess of the note service requirement upon a
recomputation of such requirement shall be withdrawn from such
fund and cancelled. Note payment certificates shall be
obligations of the agency, issuable and re-issuable in any
denominations, deliverable as further evidence of and security
for unpaid amounts of interest or principal on secured notes
which are not paid when due because the agency has insufficient
funds available to make such payments in cash, bearing interest
to the same extent as the unpaid amounts of interest or
principal on the secured notes in connection with which they are
delivered continue to accrue interest, and redeemable by the
agency upon payment in cash of the principal amount of the
redeemed note payment certificates plus any interest accrued
thereon from date of delivery to date of redemption. Any note
payment certificates so redeemed, or an equal principal amount
of certificates created in replacement thereof, shall be
redeposited in the note service reserve fund, to the extent
necessary to cause the principal amount deposited in such
reserve fund to equal the note service requirement, as then
computed, and any excess note payment certificates redeemed
shall be cancelled. The note service reserve fund may be
maintained with any trustee or agent for the holders of secured
notes and the note payment certificates may be deposited with
such trustee or agent to be held in trust prior to delivery
thereof as further security for the payment of principal of or
interest on the secured notes when due. Such trustee or agent
shall have no obligation to realize upon any pledged assets or
revenues either prior to delivering note payment certificates
upon the failure of the agency to pay interest or principal when
due or thereafter and prior to redemption of such certificates.
However, any realization upon any pledged assets or revenues and
any other payments made on account of the secured notes shall be
applied to the payments of principal of or interest on the
secured notes (including redemption of delivered note payment
certificates) in the order in which such payments originally
became due. The proceeds of each redemption of note payment
certificates shall be applied as payment of an equivalent amount
of overdue principal of or interest on the secured notes.
(c) In order to assure the availability of funds to maintain
the note service reserve fund at an amount equal to the note
service requirement of the agency, there shall be annually
apportioned and paid to the agency, for application exclusively
to the redemption of delivered note payment certificates, such
sum, if any, as shall be certified by the chairman of the agency
to the governor and director of the budget as estimated to be
necessary to redeem by the end of the then current state fiscal
year all note payment certificates theretofore delivered and not
redeemed by payment in full of the principal amount thereof and
any interest accrued thereon. The chairman of the agency shall
annually, on or before December first, make and deliver to the
governor and director of the budget his certificate stating the
sum, if any, estimated to be required to redeem all such note
payment certificates as aforesaid by the end of the then current
state fiscal year, and the sum so certified, if any, shall be
apportioned and paid to the agency during the then current state
fiscal year. Upon its receipt of such payment from the state,
the agency shall immediately apply such payment, to the extent
thereof, to the redemption of outstanding note payment
certificates.
§ 8. Bonds and notes as legal investments.
The bonds and notes of the agency are hereby made securities
in which all public officers and bodies of this state and all
municipalities and municipal subdivisions, all insurance
companies and associations, and other persons carrying on an
insurance business, all banks, bankers, trust companies, savings
banks and savings associations, including savings and loan
associations, building and loan associations, investment
companies and other persons carrying on a banking business, all
administrators, guardians, executors, trustees and other
fiduciaries, and all other persons whatsoever who are now or may
hereafter be authorized to invest in bonds or other obligations
of the state, may properly and legally invest funds, including
capital, in their control or belonging to them.
§ 9. Exemption from taxation of property and income.
The property of the agency and its income and operations shall
be exempt from taxation.
§ 10. Exemption from taxation of notes and bonds.
It is hereby determined that the creation of the agency is in
all respects for the benefit of the people of the state and for
the improvement of their health, safety, welfare, comfort and
security, and that said purposes are public purposes and that
the agency will be performing an essential governmental function
in the exercise of the powers conferred upon it by this act. The
state covenants with the purchasers and all subsequent holders
and transferees of notes and bonds issued by the agency, in
consideration of the acceptance of and payment for the notes and
bonds, that the notes and bonds of the agency, issued pursuant
to this act and the income therefrom and all its fees, charges,
gifts, grants, revenues, receipts, and other monies received or
to be received, pledged to pay or secure the payment of such
notes or bonds shall at all times be free from taxation, except
for estate and gift taxes and taxes on transfers.
§ 11. Agreement with the state.
The state does hereby pledge to and agree with the holders of
any notes or bonds issued under this act, that the state will
not limit or alter the rights hereby vested in the agency to
fulfill the terms of any agreements made with the holders
thereof, or in any way impair the rights and remedies of such
holders until such notes or bonds, together with the interest
thereon, with interest on any unpaid installments of interest,
and all costs and expenses in connection with any action or
proceeding by or on behalf of such holders, are fully met and
discharged. The agency is authorized to include this pledge and
agreement of the state in any agreement with the holders of such
notes or bonds.
§ 12. State's right to require redemption of bonds.
Notwithstanding and in addition to any provisions for the
redemption of bonds which may be contained in any contract with
the holders of the bonds, the state may, upon furnishing
sufficient funds therefor, require the agency to redeem, prior
to maturity, as a whole, any issue of bonds on any interest
payment date not less than twenty years after the date of the
bonds of such issue at one hundred five per centum of their face
value and accrued interest or at such lower redemption price as
may be provided in the bonds in case of the redemption thereof
as a whole on the redemption date. Notice of such redemption
shall be published at least twice in each of at least one
newspaper publishing and circulating in the county of Albany and
at least one newspaper publishing and circulating in the city of
New York, the first publication to be at least thirty days
before the date of redemption.
§ 13. Remedies of noteholders and bondholders.
1. In the event that the agency shall default in the payment
of principal of or interest on any issue of notes or bonds after
the same shall become due, whether at maturity or upon call for
redemption, and such default shall continue for a period of
thirty days, or in the event that the agency shall fail or
refuse to comply with the provisions of this act, or shall
default in any agreements made with the holders of any issue of
notes or bonds, the holders of twenty-five per centum in
aggregate principal amount of the notes or bonds of such issue
then outstanding, by instrument or instruments filed in the
office of the clerk of the county of Albany and proved or
acknowledged in the same manner as a deed to be recorded, may
appoint a trustee to represent the holders of such notes or
bonds for the purposes herein provided.
2. Such trustee may, and upon written request of the holders
of twenty-five per centum in principal amount of such notes or
bonds then outstanding shall, in his or its own name:
(a) by suit, action or proceeding in accordance with the civil
practice law and rules, enforce all rights of the noteholders or
bondholders, including the right to require the agency to
collect fees and charges and interest and amortization payments
on mortgages purchased and eligible loans made by it adequate to
carry out any agreement as to, or pledge of, such fees and
charges and interest and amortization payments on such mortgages
and loans and other properties and to require the agency to
carry out any other agreements with the holders of such notes or
bonds and to perform its duties under this act;
(b) bring suit upon such notes or bonds;
(c) by action or suit, require the agency to account as if it
were the trustee of an express trust for the holders of such
notes or bonds;
(d) by action or suit, enjoin any acts or things which may be
unlawful or in violation of the rights of the holders of such
notes or bonds;
(e) declare all such notes or bonds due and payable and if all
defaults shall be made good, then, with the consent of the
holders of twenty-five per centum of the principal amount of
such notes or bonds then outstanding, to annul such declaration
and its consequences.
3. Such trustee shall in addition to the foregoing have and
possess all of the powers necessary or appropriate for the
exercise of any functions specifically set forth herein or
incident to the general representation of bondholders or
noteholders in the enforcement and protection of their rights.
4. The supreme court shall have jurisdiction of any suit,
action or proceeding by the trustee on behalf of such
noteholders or bondholders. The venue of any such suit, action
or proceeding shall be laid in the county of Albany.
5. Before declaring due and payable the principal of notes or
bonds issued in connection with any mortgage purchased by the
agency or securing an eligible loan made by the agency, the
trustee shall first give thirty days' notice in writing to the
governor, to the agency, to the commissioner and to the attorney
general of the state.
§ 14. Monies of the agency.
1. All monies of the agency, except as otherwise authorized or
provided in this act, shall be paid to the commissioner of
taxation and finance as agent of the agency, who shall not
commingle such monies with any other monies. Such monies shall
be deposited in a separate bank account or accounts. The monies
in such accounts shall be paid out on checks signed by the
commissioner of taxation and finance on requisition of the
chairman of the agency or of such other officer or employee as
the agency shall authorize to make such requisition. All
deposits of such monies shall, if required by the commissioner
of taxation and finance or the agency, be secured by obligations
of the United States or of the state of a market value equal at
all times to the amount of the deposit and all banks and trust
companies are authorized to give such security for such
deposits.
2. Subject to agreements with noteholders and bondholders and
the approval of the comptroller, the agency shall prescribe a
system of accounts.
Notwithstanding the provisions of this section, the agency
shall have power, subject to the approval of the commissioner of
taxation and finance, to contract with the holders of any of its
notes or bonds as to the custody, collection, securing,
investment and payment of any monies of the agency, of any
monies held in trust or otherwise for the payment of notes or
bonds, and to carry out such contract. Monies held in trust or
otherwise for the payment of notes or bonds or in any way to
secure notes or bonds and deposits of such monies may be secured
in the same manner as monies of the agency, and all banks and
trust companies are authorized to give such security for such
deposits.
3. The comptroller, or his legally authorized representative,
is hereby authorized and empowerd from time to time to examine
the books and accounts of the agency including its receipts,
disbursements, contracts, reserve funds, sinking funds,
investments, and any other matters relating to its financial
standing. Such an examination shall be conducted by the
comptroller at least once in every five years; the comptroller
is authorized, however, to accept from the agency, in lieu of
such an examination, an external examination of its books and
accounts made at the request of the agency.
4. The agency shall submit to the governor, chairman of the
senate finance committee, chairman of the assembly ways and
means committee and the comptroller, within thirty days of the
receipt thereof by the agency, a copy of the report of every
external examination of the books and accounts of the agency
other than copies of the reports of such examination made by the
comptroller.
§ 15. Supervision of projects.
Notwithstanding any provision of law to the contrary, and upon
the issuance by the commissioner of a certificate of assumption
of supervision, any corporation project a mortgage on which has
been purchased by the agency or assigned as security for an
eligible loan shall be subject to the supervision and control of
the commissioner and the New York state division of housing and
community renewal, which shall have the same powers and
responsibilities with respect to such project as they would have
if such project were aided by a loan from the state or the New
York state housing finance agency under article two of the
private housing finance law and which shall assume the
additional powers and responsibilities with respect to such
project theretofore conferred on the corporation by law or
contract. The corporation and the commissioner shall take such
actions and execute such documents as may be necessary to
implement this section.
§ 16. Assistance by state officers, departments, boards and
commissions.
1. The department of audit and control, department of law,
division of housing and community renewal and all other state
officers, departments, boards, divisions and commissions may
render such services to the agency within their respective
functions as may be requested by the agency.
2. The commissioner and the division of housing and community
renewal are hereby designated to act for and in behalf of the
agency in servicing the corporation first mortgages purchased by
the agency or securing eligible loans of the agency, and shall
perform such additional functions and services in connection
with the making, servicing and collection of such eligible loans
as shall be requested by the agency. The agency shall pay to
the division of housing and community renewal from any monies of
the agency available for such purpose, such amounts as are
necessary to reimburse the division of housing and community
renewal for the reasonable cost of the services performed by the
commissioner and the division of housing and community renewal
pursuant to this section.
§ 17. Annual report.
The agency shall submit to the governor, the chairman of the
senate finance committee, the chairman of the assembly ways and
means committee, the comptroller and the director of the budget
within one hundred eighty days after the end of its fiscal year,
a complete and detailed report setting forth: (1) its
operations and accomplishments; (2) its receipts and
expenditures during such fiscal year in accordance with the
categories or classifications established by the agency,
including a listing of all private consultants engaged by the
agency on a contract basis and a statement of the total amount
paid to each such private consultant; (3) its assets and
liabilities at the end of its fiscal year, including a schedule
of its eligible purchases, eligible loans and commitments and
the status of reserve, special or other funds; and (4) a
schedule of its bonds and notes outstanding at the end of its
fiscal year, together with a statement of the amounts redeemed
and incurred during such fiscal year.
§ 18. Maximum authorization.
The agency shall not issue bonds and notes in an aggregate
principal amount exceeding three hundred five million dollars,
excluding bonds and notes issued to refund or otherwise repay
outstanding bonds and notes of the agency or of the corporation.
§ 19. Partial invalidity.
If any provision of this act, or the application thereof to
any person or circumstance, shall be adjudged by any court of
competent jurisdiction to be invalid or unenforceable, such
judgment shall not affect, impair or invalidate the remainder of
this act or the application of such provision to any other
person or circumstance, but shall be confined in its operation
to the provision, person and circumstance directly involved in
the controversy in which such judgment shall have been rendered.
§ 20. Inconsistent provisions in other laws superseded.
Insofar as the provisions of this act are inconsistent with
the provisions of any other law, general, special or local, the
provisions of this act shall be controlling.
§ 21. Certain special proceedings.
In the event that the agency or the corporation shall have
occasion at any time to seek declaratory relief in the courts
with respect to any matters relating to transactions
contemplated by this act, any request for such relief shall be
brought as a special proceeding and conducted in accordance with
article four of the civil practice law and rules. Any such
special proceeding shall be preferred over all other civil
causes except election causes in all courts of the state of New
York and shall be heard and determined in preference to all
other civil business pending therein except election causes,
irrespective of position on the calendar. In any such special
proceeding, the court hearing the matter shall have authority in
its discretion to award, as against the agency or the
corporation, the reasonable counsel fees and expenses of a party
or intervenor opposing such declaratory relief, based on the
court's determination as to the contribution made to the sound
and orderly resolution of the proceeding by the participation of
such party or intervenor therein, and the court hearing the
matter may in its discretion appoint counsel to represent a
class of persons having interests in opposition to such
declaratory relief being sought and may award reasonable counsel
fees and expenses as aforesaid on account of such
representation.
§ 21-a. Actions against corporation. Except in an action for
wrongful death, in any case founded upon tort a notice of claim
shall be required as a condition precedent to the commencement
of an action or special proceeding against the agency and the
provisions of section fifty-e of the general municipal law shall
govern the giving of such notice. No such action shall be
commenced more than one year and ninety days after the cause of
action therefor shall have accrued. An action for wrongful death
shall be commenced in accordance with the notice of claim and
time limitation provisions of title eleven of article nine of
the public authorities law.
§ 22. Construction.
This act, being necessary for the welfare of the state and its
inhabitants, shall be liberally construed so as to effectuate
its purposes.
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