§ 1207-M — Transit projects

§ 1207-m. Transit projects. 1. The term "transit project" as used in\nthis section shall have the meaning given to such term from time to time\nin section twelve hundred sixty-six-c of this article. The provisions of\nthis section shall be controlling and the authority and its subsidiaries\nshall have the powers provided in this section notwithstanding any\ncontrary provision of this title or of local law or of any lease or\nother agreement with the city.\n 2. (a) The authority is hereby authorized to request the metropolitan\ntransportation authority to undertake any transit project and the\nauthority and its designated subsidiaries are each hereby authorized (i)\nto enter into agreements with the metropolitan transportation authority\nconcerning transit projects; (ii) to acquire in its own name by gift,\npurchase or condemnation any real or personal property (or any interest\ntherein) which is needed or useful for or in connection with such\nproject, and to surrender the use, occupancy, control or possession of\nor to transfer the same, or any other such real or personal property (or\nany interest therein) which it owns, leases, operates or controls, to\nthe metropolitan transportation authority or its designee; (iii) to\naccept a transfer, transfer back, lease or sublease of any such project\nor part thereof upon its completion; and (iv) to make its agents,\nemployees and facilities available to the metropolitan transportation\nauthority in connection therewith.\n (b) The authority and its subsidiary corporation is each hereby\nauthorized to sell or transfer, without regard as to how or from whom\nacquired, all or part of its interest in any equipment which is deemed\nto be a mass commuting vehicle under the United States internal revenue\ncode or the regulations thereunder, including, without limitation, any\nof the same obtained as transit projects or obtained from or financed\nwith money received from the Triborough bridge and tunnel authority, for\nsuch consideration and on such terms or conditions as it may deem\nappropriate, and to obtain a lease from the transferee on such terms and\nconditions and for such period as it may deem appropriate pursuant to\nwhich it may operate, use, control or possess such mass commuting\nvehicle in furtherance of the statutory purposes of the authority and\nits subsidiaries, provided (i) such lease contains an option to the\nauthority or its subsidiary corporation to repurchase its interest at\nthe expiration of the scheduled lease term for nominal consideration,\nand (ii) the aggregate of the regularly scheduled rental payments which\nthe authority or its subsidiary corporation is obligated to make\npursuant to such lease during each twelve month period of the lease term\nshall not exceed the aggregate amount receivable, whether by principal\nor interest, by the authority or its subsidiary corporation from its\ntransferee during each such twelve month period. Without limitation of\nthe foregoing, any lease entered into pursuant hereto may also contain\nprovisions requiring the authority or its subsidiary corporation to\nindemnify the transferee for any loss resulting from the loss or\ndestruction of any mass commuting vehicle which is the subject of such\nlease, or any loss arising out of any misrepresentation, act, or\nomission of the authority or its subsidiary in connection with such\nlease, and requiring the authority or its subsidiary corporation to\nundertake to replace, repair or restore any such mass commuting vehicle,\nbut such obligations shall not be deemed regularly scheduled rental\npayments for purposes of the preceding sentence. Rental payments and\nother payments or costs incurred by the authority or its subsidiary\ncorporation in discharge of its obligations under any lease entered into\nas hereinabove provided shall not be deemed capital costs for the\npurposes of section twelve hundred three or twelve hundred three-a of\nthis title, and the considerations received by the authority or its\nsubsidiary corporation in connection with any transactions entered into\npursuant to the authorization of this paragraph may be expended free of\nany restriction set forth in subparagraph (ii) of paragraph (b) of\nsubdivision one of section twelve hundred three or in paragraph (c) of\nsubdivision five of section twelve hundred three-a of this title.\n (c) Neither the authority nor its subsidiary shall enter into any\ntransaction authorized by paragraph (b) of this subdivision unless the\nfollowing standards and procedures have been met:\n (i) notice of intention to negotiate shall be published in at least\none newspaper of general circulation, and a copy thereof shall be mailed\nto all parties who have requested notification from the authority or its\nsubsidiary to engage in transactions of this type. Such notice shall\ndescribe the nature of the proposed transaction and the factors subject\nto negotiation, which shall include, but not be limited to, the price to\nbe paid to the authority or its subsidiary;\n (ii) the authority or its subsidiary shall negotiate with those\nrespondents whose response complies with the requirements set forth in\nthe notice;\n (iii) the board of the authority or its subsidiary shall resolve on\nthe basis of particularized findings relevant to the factors negotiated\nthat such transaction will provide maximum available financial benefits,\nconsistent with other defined objectives and requirements.\n (d) The authority and its subsidiary shall provide to the governor,\nthe temporary president of the senate, the speaker of the assembly, the\nminority leader of the senate and the minority leader of the assembly,\nnotice of each lease entered into pursuant to paragraph (b) of this\nsubdivision and supporting documentation of compliance by the authority\nand its subsidiary with subparagraphs (i), (ii) and (iii) of paragraph\n(c) of this subdivision.\n (e) Paragraphs (c) and (d) of this subdivision shall be of no force\nand effect with respect to any lease transaction entered into pursuant\nto a commitment approved prior to January first, nineteen hundred\neighty-five by the board of the authority or its subsidiary or the board\nof the metropolitan transportation authority.\n 3. The authority and its designated subsidiaries are hereby\nauthorized, in connection with any transit project, to pay or agree to\npay, in a manner and on terms and conditions satisfactory to the\nmetropolitan transportation authority, any portion of the costs to the\nmetropolitan transportation authority of such transit project and the\nfinancing thereof which is not paid to the metropolitan transportation\nauthority from any federal, state or local aid or assistance or from any\nother moneys made available or payable to the metropolitan\ntransportation authority by others for such project.\n 4. (a) Such agreements with the metropolitan transportation authority\nmay, without limitation, contain provisions obligating the authority or\nits designated subsidiary to:\n (i) issue its notes or bonds, or execute and deliver its lease,\nsublease and other such contractual obligations, in payment for a\ntransfer, lease or sublease of a transit project to any of them,\nprovided, however, that in no event shall the aggregate principal amount\nof all notes and bonds together with the capitalized value of all lease,\nsublease and other such contractual obligations, exceed the sum of one\nbillion six hundred million dollars, excluding from such limitation (A)\nthe principal amount of any bonds or notes of the authority to the\nextent the amount thereof is paid, is payable or has been agreed to be\npaid by the federal government or any agency or instrumentality thereof\nto the authority or to the holders of such bonds or notes, (B) the\nprincipal amount of any bonds or notes of the authority issued to refund\nor otherwise repay other obligations issued for such transit projects,\n(C) the principal amount of any bonds or notes and the capitalized value\nof any lease, sublease or other such contractual obligation, to the\nextent such obligations are paid or agreed to be paid, subject to annual\nappropriation, under service contracts issued by the state to the\nmetropolitan transportation authority for the benefit of the authority\nor its subsidiaries pursuant to the provisions of section sixteen of the\ntransportation systems assistance and financing act of 1981, or under\nany similar contract of the metropolitan transportation authority or the\nauthority with any other governmental entity for the benefit of the\nauthority or its subsidiaries, (D) the principal amount of any bonds or\nnotes of the authority issued to the metropolitan transportation\nauthority in connection with the funding of any debt service reserve\nfund required by any resolution of the metropolitan transportation\nauthority pursuant to which special obligation bonds of that authority\nto fund a transit project were issued, and (E) a principal amount of any\nbonds or notes of the authority equal to the amount of any original\nissue discount from the principal amount of the special obligation bonds\nor notes issued by the metropolitan transportation authority in\nconnection with the financing of a transit project by that authority;\n (ii) give security for the payment of such notes, bonds, lease,\nsublease or other contractual obligations, including a pledge of all or\nany part of its revenues or other moneys, which pledge may contain\ncovenants with respect to the charging and fixing of fares, fees and\nrentals, the use and disposition of such fares, fees, rentals and other\ncharges, and the setting aside of reserves therefrom.\n (b) Such agreements, and any notes, bonds, lease, sublease or other\ncontractual obligations issued or entered into by the authority or its\ndesignated subsidiary pursuant thereto, may, without limitation, also\ncontain provisions as to:\n (i) limitations with respect to the use and disposition of transit\nprojects and with respect to any other transit facilities;\n (ii) limitations on the issuance of additional bonds, notes, lease,\nsublease or other contractual obligations, the terms upon which they may\nbe secured and the funding or refunding thereof;\n (iii) with respect to bonds or notes, vesting in a trustee or trustees\nsuch property rights, powers and duties in trust as it may determine,\nwhich rights, powers and duties may include, but shall not be limited\nto, those set forth in section twelve hundred seven-h of this title;\n (iv) defining the acts or omissions to act which shall constitute a\ndefault and providing rights and remedies in the event of default;\n (v) any other matters, of like or different character, which in any\nway affect the security or protection of the metropolitan transportation\nauthority or any lessor; and\n (vi) consenting to the extending or assignment by the metropolitan\ntransportation authority or by any lessor to the holders of any of its\nbonds, notes or lease obligations of all of the benefits and rights of\nthe metropolitan transportation authority or of such lessor provided by\nany such agreement or other instrument.\n (c) The term "revenues" as used in this subdivision shall include all\nthose moneys referred to in section twelve hundred of this article, as\nwell as all operating subsidies provided by any public benefit\ncorporation or by any governmental entity, federal, state or local.\n (d) The term "capitalized value" as used in this subdivision shall\nmean the present value of all future payments required under a lease,\nsublease and other such contractual obligation discounted at a rate of\ninterest determined on the basis of the net interest cost of the last\nmetropolitan transportation authority's special obligation bonds issued\nprior to the execution of any such lease, sublease or other contractual\nobligation or, if no such bonds have been issued, on the basis of the\nnet interest cost of the last bonds issued by the Triborough bridge and\ntunnel authority, issued in payment for the transfer, lease or sublease\nof any such transit projects.\n 5. It is the intention hereof that, subject to such agreements with\nbondholders or noteholders as may then exist, any pledge of revenues or\nother moneys made by the authority or its subsidiaries shall be valid\nand binding from the time when the pledge is made; that the revenues or\nother moneys so pledged and thereafter received by the authority or its\nsubsidiaries shall immediately be subject to the lien of such pledge\nwithout any physical delivery thereof or further act, and that the lien\nof any such pledge shall be valid and binding as against all parties\nhaving claims of any kind in tort, contract or otherwise against the\nauthority or its subsidiaries irrespective of whether such parties have\nnotice thereof. Neither the agreement nor any other instrument by which\na pledge is created need be recorded.\n 6. So long as the authority or any of its subsidiaries shall have any\noutstanding and unpaid obligation in connection with a transit project,\nthe authority and such subsidiaries shall have the power at all times to\nfix or adjust the rate or rates of fares, fees, rentals or other charges\nto be charged for the use of their transit facilities as may, together\nwith all other lawfully available moneys, be necessary in their judgment\nto produce sufficient revenues to pay such obligations as the same\nbecome due, in addition to paying as the same shall become due expenses\nof operation of the transit facilities and satisfying all other\nobligations of the authority and such subsidiaries. No acts or\nactivities taken or proposed to be taken by the authority pursuant to\nthis subdivision shall be deemed to be "actions" for the purposes or\nwithin the meaning of article eight of the environmental conservation\nlaw.\n 7. (a) In connection with (i) the lease between the city and the\nauthority dated June first, nineteen hundred fifty-three, and (ii) the\nlease between the city and the Manhattan and Bronx surface transit\noperating authority dated March twentieth, nineteen hundred sixty-two\n(such leases, as heretofore supplemented, amended or renewed, and the\ntenancies originally created thereby, being referred to in this section\nas "the existing leases"), the city, acting either by the mayor alone or\nby resolution of the board of estimate, or by instruments authorized by\nsuch resolution, and the authority are authorized to enter into\nagreements for renewal or extension of the existing leases, or for new\nleases, for such terms of years and upon such other terms and conditions\nas the parties thereto shall agree and the metropolitan transportation\nauthority shall approve, provided that under the terms thereof, the\nrights, privileges and obligations of the parties are not inconsistent\nwith the provisions of, or in derogation of the powers of the authority\nall as provided in title nine of article five of this chapter, and\nprovided further that such agreements shall in no way impair the rights\nor powers of the authority or the Manhattan and Bronx surface transit\noperating authority to fulfill the terms of any contract made by either\nof them with the holders of any of their then outstanding bonds or\nnotes, and such agreements shall provide that such leases may not be\nterminated or permitted to expire or be amended in any way inconsistent\nwith the provisions of any agreement, bond, note, lease, sublease or\nother contractual obligation given or made by either of them in\nconnection with a transit project. Neither the provisions of section one\nhundred ninety-seven-c of the New York city charter, relating to a\nuniform land use review procedure, nor the provisions of any other local\nlaw of like or similar import shall apply to the renewal or extension of\nthe existing leases or to the making of new leases as herein provided.\n (b) Notwithstanding the provisions of any other law, general, special\nor local, or the provisions of the existing leases, if either of the\nagreements authorized by paragraph (a) above is not entered into, but a\nnote, bond, lease, sublease or other contractual obligation for a\ntransit project has been issued or entered into, then (i) no party to an\nexisting lease may terminate the same, serve any notice of termination\npursuant thereto, exercise any option to terminate reserved therein or\npermit the expiration thereof, (ii) the city shall not in any way limit\nor disturb any right of the tenant to use, occupy, control and possess\nany of the properties, facilities or revenues which are the subject of\nsuch existing lease, and (iii) the city shall not seek to enforce such\nexisting lease in any way inconsistent with or contrary to the manner in\nwhich such existing lease had been administered prior to the enactment\nof this section or inconsistent with or contrary to the interests of the\nmetropolitan transportation authority or any lessor under any agreement,\nnotes, bonds, lease, sublease or other contractual obligations of the\nauthority or any of its subsidiaries issued or entered into in\nconnection with a transit project (and to the extent the provisions of\nsuch leases conflict at any time or in any manner with the provisions of\nany such note, bond, lease, sublease or other contractual obligation,\nthe provisions of such note, bond, lease, sublease or other contractual\nobligation shall be controlling and conflicting provisions of the leases\nwith the city shall be disregarded), unless prior thereto the city has\nsatisfied all of such outstanding notes, bonds or other contractual\nobligations and provided for the termination of all such agreements,\nleases and subleases, all in accordance with their terms. If and to the\nextent moneys are paid by the city to the authority or its subsidiaries\nto satisfy their obligations to the metropolitan transportation\nauthority under such instruments, the authority and such subsidiaries\nshall remit such moneys to the metropolitan transportation authority,\nwhich shall, in turn, apply the same to the satisfaction and termination\nof its own notes, bonds and leases issued or entered into in connection\nwith a transit project in accordance with their terms.\n (c) Upon termination or expiration of a new lease or of a renewed or\nextended existing lease as permitted in paragraph (a) of this\nsubdivision, or upon satisfaction of the requirements of paragraph (b)\nof this subdivision, title to any real or personal property (or any\ninterest therein) constituting all or any part of a transit project then\nvested in the authority or any of its subsidiaries or the metropolitan\ntransportation authority pursuant to the provisions of this chapter\nshall be transferred without further consideration or payment to the\ncity.\n 8. The state of New York does hereby pledge to and agree with the\nauthority and its subsidiaries and the metropolitan transportation\nauthority and the holders of bonds or notes or lease, sublease or other\ncontractual obligations issued by any of them in connection with a\ntransit project or in connection with the transfer of the interest of\nany of them in and the lease from the transferee of any property\nfurnished to it pursuant to chapter twelve of the laws of nineteen\nhundred seventy-nine or section fifteen of chapter three hundred\nfourteen of the laws of nineteen hundred eighty-one, or in connection\nwith any transaction entered into pursuant to the authorization of\nparagraph (b) of subdivision two of this section, that the state will\nnot limit or alter the denial of authority under subdivision eleven of\nthis section, or the rights and powers vested in the authority and its\nsubsidiaries by this title to fulfill the terms of any agreement made by\nany of them with the metropolitan transportation authority or with such\nholders, or in any way impair their rights and remedies until such\nagreements, bonds, notes, and obligations, together with the interest\nthereon and all costs and expenses in connection with any action or\nproceedings by or on behalf of the metropolitan transportation authority\nor such holders, are fully met and discharged. The authority and its\nsubsidiaries are each authorized to include this pledge and the\nagreement of the state in any agreement with the holders of such bonds\nor notes or lease, sublease or other obligations and in any agreement\nwith the metropolitan transportation authority relating to a transit\nproject which may extend the same to the holders of its bonds, notes and\nlease obligations.\n 9. The provisions of this section and of all agreements undertaken by\nthe authority or any of its subsidiaries in accordance therewith shall\nin all respects be subject to the rights of the holders of any\noutstanding bonds or notes of the authority and its subsidiaries.\n 10. In connection with the negotiation, award and implementation of\ncontracts of the authority relating to transit projects, the provisions\nof paragraphs (a), (b), (c) and (d) of subdivision thirteen of section\ntwelve hundred sixty-six-c of this article shall apply to the authority\nas if it were the "authority" referred to therein, and the officer\ndesignated by the metropolitan transportation authority pursuant to\nparagraph (e) of such subdivision shall perform the duties therein\ndescribed with respect to such contracts of the authority.\n 11. So long as the authority or any of its subsidiaries, or\nmetropolitan transportation authority, shall have outstanding any notes,\nbonds, lease, sublease or other contractual obligations authorized by\nthis section or section twelve hundred sixty-six-c or twelve hundred\nsixty-nine of this article, or which have been issued or incurred in\nconnection with the transfer of the interest of any of them in and the\nlease from the transferee of any property furnished pursuant to chapter\ntwelve of the laws of nineteen hundred seventy-nine or section fifteen\nof chapter three hundred fourteen of the laws of nineteen hundred\neighty-one, neither the authority nor any of its subsidiaries shall have\nthe authority to file a voluntary petition under chapter nine of the\nfederal bankruptcy code, or such corresponding chapter, chapters, or\nsections as may, from time to time, be in effect, and neither any public\nofficer nor any organization, entity or other person shall authorize the\nauthority or any of its subsidiaries to be or become a debtor under said\nchapter nine or said corresponding chapter, chapters or sections during\nany such period.\n 12. A project financed by the authority's issuance of its bonds, notes\nor other obligations, pursuant to subdivision one-a of section twelve\nhundred seven-b of this title shall be deemed to constitute a transit\nproject for the purposes of this section and any notes, bonds, lease,\nsublease or other contractual obligations with respect to such project\nshall, for purposes of this section, be deemed to have been authorized\nby this section; provided, however, that such project shall not be\ndeemed to constitute part of any capital program plan for the purposes\nof section twelve hundred sixty-nine-b of this article nor shall the\nprincipal amounts of any bonds or notes, nor the capitalized value of\nany lease, sublease, or other contractual obligation of the authority,\nissued or entered into by the authority pursuant to such subdivision\none-a, be included in any computation pursuant to subdivision four of\nthis section.\n