§ 1207-B — Issuance of bonds and notes by the authority

§ 1207-b. Issuance of bonds and notes by the authority. 1.\nNotwithstanding the provisions of sections twelve hundred through twelve\nhundred twenty-one, inclusive, of this title or of any other provisions\nof law to the contrary, but subject to the provisions of section twelve\nhundred seven-j of this title, the authority shall have the power and is\nhereby authorized to borrow money and to issue negotiable bonds and\nnotes therefor in conformity with applicable provisions of the uniform\ncommercial code in such principal amount as, in the opinion of the\nauthority, shall be necessary to provide funds sufficient to pay the\npurchase price of no more than seven hundred twenty-four cars for the\nrapid transit lines under the jurisdiction of the authority purchased\npursuant to section twelve hundred seven-a of this title, to pay\ninterest on the bonds and notes of the authority, to establish reserves\nto secure such bonds and notes, and to pay all other expenditures of the\nauthority incident to or incurred in connection with the purchase of\nsuch cars and the authorization, issuance and sale of said bonds and\nnotes. In no event shall there be outstanding at any one time more than\nninety-two million dollars ($92,000,000) in such bonds and notes.\n 1-a. The authority may also issue its bonds, notes or other\nobligations in such principal amounts as shall be necessary to finance\nthe construction, purchase, lease or acquisition of, or an equity\ninterest in, an office building located or to be constructed in the\nborough of Brooklyn in the city, provided that (i) all or a portion of\nsuch building is intended to be occupied by the authority and that the\nboard shall, by resolution, have made findings that the sum of the\ncapitalized value of all payments due from the authority under such\nbonds, notes or other obligations (not including any amounts\nattributable to principal repayment) together with any rent payments for\nthe space in such building to be occupied by the authority and of all\npayments required of the authority under any related agreement does not\nexceed the capitalized value of those payments which would be made in a\nconventional commercial lease transaction for comparable space with an\nunrelated party and (ii) not more than an insubstantial portion of any\nreal property so financed with the proceeds of bonds, notes, or other\nobligations is utilized by other than the New York city transit\nauthority or its designated subsidiary. The term "capitalized value" for\nthe purposes of this subdivision shall be computed in the manner set\nforth in subdivision four of section twelve hundred seven-m of this\ntitle. The metropolitan transportation authority is hereby additionally\nauthorized from time to time to issue bonds for the purposes of\nrefunding, redeeming or otherwise paying, including paying by purchase\nor tender, bonds issued by the authority for such purposes and to secure\nsuch bonds in the manner set forth in section twelve hundred sixty-nine\nof this article.\n 2. The authority shall have the power from time to time to renew notes\nor to issue renewal notes for such purpose, to issue bonds to pay notes,\nand whenever it deems refunding expedient, to refund bonds by the\nissuance of new bonds and to issue bonds partly to refund bonds and\nnotes then outstanding and partly for the purposes authorized by\nsubdivision one of this section. The refunding bonds may be exchanged\nfor bonds to be refunded, with such cash adjustments as may be agreed,\nor may be sold and the proceeds applied to the purchase or payment of\nthe bonds to be refunded. In no event shall the maturity date of the\nrefunding bonds be a date beyond thirty-five years from the date the\nfirst bond was issued.\n 3. Every issue of bonds and notes of the authority shall be special\nobligations of the authority payable solely from the moneys and revenues\nof the authority derived from the operation of the transit facilities\nunder its jurisdiction, subject to any agreement with the holders of\nparticular bonds or notes pledging any particular moneys or revenues.\n 4. The bonds and notes shall be authorized by resolution of the\nauthority and shall bear such date or dates and shall mature at such\ntime or times as such resolution or resolutions may provide, except that\nno note or any renewal thereof shall mature more than five years after\nthe date of issue of the original note and no bond shall mature more\nthan thirty-five years from the date of issue. Bonds and notes shall\nbear interest at such rate or rates, be in such denominations, be in\nsuch form, either coupon or registered, carry such registration\nprivileges, be executed in such manner, be payable in such medium of\npayment, at such place or places, and be subject to such terms of\nredemption and to such other terms and conditions as such resolution or\nresolutions may provide. The bonds and notes may be sold at public or\nprivate sale for such price or prices as the authority shall determine.\nPending preparation of definitive bonds, the authority may issue interim\nreceipts which shall be exchanged for such bonds.\n 5. Any resolution or resolutions authorizing any bonds or notes or any\nissue of bonds or notes may contain provisions, which shall be a part of\nthe contract with the holders of the bonds, or notes thereby authorized,\nas to\n (a) pledging all or any part of the revenues or other monies of the\nauthority to secure the payment of the bonds or notes or of any issue of\nthe bonds or notes, subject to such agreements with bondholders or\nnoteholders as may then exist;\n (b) the rate or rates of fare to be charged and the amounts to be\nraised in each year from revenues and the use and disposition of the\nrevenues;\n (c) the setting aside of reserves or sinking funds, and the regulation\nand disposition thereof;\n (d) limitations on the rights of the authority with respect to the use\nand disposition of the cars for which such bonds or notes are issued and\nwith respect to all other transit facilities of the authority;\n (e) limitations on the purpose to which the proceeds of sale of any\nissue of bonds or notes then or thereafter to be issued may be applied\nand pledging such proceeds to secure the payment of the bonds or notes\nor of any issue of the bonds or notes;\n (f) limitations on the issuance of additional bonds and notes; the\nterms upon which additional bonds and notes may be issued and secured,\nand the funding or refunding of outstanding or other bonds and notes;\n (g) the procedure, if any, by which the terms of any contract with\nbondholders or noteholders may be amended or abrogated, the amount of\nbonds or notes the holders of which must consent thereto, and the manner\nin which such consent may be given;\n (h) vesting in a trustee or trustees such property, rights, powers and\nduties in trust as the authority may determine, which may include any or\nall of the rights, powers and duties of the trustee appointed by the\nbondholders or noteholders pursuant to section twelve hundred seven-h\nhereof, and limiting or abrogating the right of the bondholders to\nappoint a trustee under section twelve hundred seven-h hereof, or\nlimiting the rights, duties and powers of such trustee;\n (i) defining the acts or omissions to act which shall constitute a\ndefault in the duties of the authority to the holders of its bonds and\nnotes and providing the rights and remedies of such holders in the event\nof default;\n (j) any other matters, of like or different character, which in any\nway affect the security or protection of the bonds and notes.\n 6. It is the intention hereof that any pledge of revenues or other\nmoneys made by the authority shall be valid and binding from the time\nwhen the pledge is made; that the revenues or other moneys so pledged\nand thereafter received by the authority shall immediately be subject to\nthe lien of such pledge without any physical delivery thereof or further\nact, and that the lien of any such pledge shall be valid and binding as\nagainst all parties having claims of any kind in tort, contract or\notherwise against the authority irrespective of whether such parties\nhave notice thereof. Neither the resolution nor any other instrument by\nwhich a pledge is created need be recorded.\n 7. Neither the members of the board nor any person executing the bonds\nor notes shall be liable personally on the bonds or notes or be subject\nto any personal liability or accountability by reason of the issuance\nthereof.\n 8. Subject to such agreements with bondholders or noteholders as may\nthen exist, the authority shall have power out of any funds available\ntherefor to purchase bonds or notes. The authority may hold, cancel or\nresell such bonds and notes, subject to and in accordance with\nagreements with bondholders and noteholders.\n