§ 3012 — Issuance of notes and bonds of a municipal assistance corporation

New York § 3012

• Jurisdiction: New York
• Law PBA: Public Authorities
• Title 2: General Provisions Relating to Municipal Assistance Corporations
• Art. 10: New York State Municipal Assistance Corporation Act

Text

§ 3012. Issuance of notes and bonds of a municipal assistance\ncorporation. 1. (a) A municipal assistance corporation shall have the\npower and is hereby authorized from time to time to issue its notes and\nbonds in conformity with applicable provisions of the uniform commercial\ncode, in such principal amounts as such corporation shall determine to\nbe necessary within the limits of authorized indebtedness prescribed in\nthe special law creating such corporation, to provide sufficient funds\nfor achieving its corporate purposes, including the making of payments\nto or purchase of obligations of, the municipality for which the\ncorporation was created, to make payments of interest on its notes and\nbonds, to establish reserves to secure such notes and bonds and to make\ndeposits into a fund or funds established pursuant to any agreement\nentered into by such corporation with the federal government or an\nagency or instumentality thereof in accordance with subparagraph\neighteen of section three thousand ten of this article.\n (b) A municipal assistance corporation shall have the power, from time\nto time, to issue (i) notes to renew notes and (ii) bonds to pay notes,\nincluding the interest thereon and, whenever it deems refunding\nexpedient, to refund any bonds by the issuance of new bonds, whether the\nbonds to be refunded have or have not matured, and to issue bonds partly\nto refund bonds then outstanding and partly for any of its other\ncorporate purposes. The refunding bonds may be exchanged for the bonds\nto be refunded or sold and the proceeds applied to the purchase,\nredemption or payment of such bonds.\n (c) Except as may otherwise be expressly provided by a municipal\nassistance corporation, every issue of its notes and bonds shall be\ngeneral obligations of the municipal assistance corporation payable out\nof any revenues of such corporation, subject only to any agreements with\nthe holders of particular notes or bonds pledging any particular\nrevenues.\n (d) Such notes and bonds shall be authorized by resolution of a\nmunicipal assistance corporation, shall bear such date and shall mature\nat such time or times as such resolution may provide. The bonds may be\nissued as serial bonds or as term bonds or as a combination thereof.\nThe notes and bonds shall bear interest at such rate or rates, be in\nsuch denominations and in such form, either coupon or registered, carry\nsuch registration privileges, be executed in such manner, be payable in\nsuch medium of payment, at such place or places and be subject to such\nterms of redemption as such resolution may provide.\n (e) The notes or bonds of the municipal assistance corporation may be\nexchanged for obligations of the municipality being assisted or may be\nsold at such price or prices, at public or private sale, in such manner\nand from time to time as may be determined by such corporation, and the\ncorporation may pay all expenses, premiums and commissions which it may\ndeem necessary or advantageous in connection with the issuance and sale\nthereof. Subsequent to July first, nineteen hundred seventy-five, no\nnotes or bonds of a municipal assistance corporation may be sold at\nprivate sale unless such sale and the terms thereof have been approved\nin writing by (a) the comptroller where such sale is not to the\ncomptroller, or (b) the director of the budget, where such sale is to\nthe comptroller.\n 2. Any resolution authorizing any notes or bonds or any issue thereof\nmay contain provisions, which shall be a part of the contract with the\nholders thereof, as to:\n (a) pledging all or any part of the revenues to secure the payment of\nthe notes or bonds or of any issue thereof, subject to such agreements\nwith noteholders or bondholders as may then exist;\n (b) pledging all or any part of the assets of the corporation to\nsecure the payment of the notes or bonds or of any issue of notes or\nbonds, subject to such agreements with noteholders or bondholders as may\nthen exist;\n (c) the setting aside of reserves or sinking funds and the regulation\nand disposition thereof;\n (d) limitations on the purposes to which the proceeds of sale of notes\nor bonds may be applied and pledging such proceeds to secure the payment\nof the notes or bonds of any issue thereof;\n (e) limitations on the issuance of additional notes or bonds; the\nterms upon which additional notes or bonds may be issued and secured;\nand the refunding of outstanding or other notes or bonds;\n (f) the procedure, if any, by which the terms of any contract with\nnoteholders or bondholders may be amended or abrogated, the amount of\nnotes or bonds the holders of which must consent thereto, and the manner\nin which such consent may be given;\n (g) vesting in a trustee or trustees such property, rights, powers and\nduties in trust as the corporation may determine, which may include any\nor all of the rights, powers and duties of the trustee appointed by the\nbondholders pursuant to this title, and limiting or abrogating the right\nof the bondholders to appoint a trustee under this title or limiting the\nrights, powers and duties of such trustee;\n (h) the acts or omissions to act which shall constitute a default in\nthe obligations and duties of the corporation to the holders of the\nnotes or bonds and providing for the rights and remedies of the holders\nof the notes or bonds in event of such default, including the right to\nappointment of a receiver; providing, however, that such rights and\nremedies shall not be inconsistent with the laws of the state and the\nother provisions of this article; and\n (i) any other matters of like or different character, which in any way\naffect the security or protection of the holders of the notes or bonds.\n 3. Any pledge made by a municipal assistance corporation shall be\nvalid and binding from the time when the pledge is made. The revenues or\nproperty so pledged and thereafter received by the municipal assistance\ncorporation shall immediately be subject to the lien of such pledge\nwithout any physical delivery thereof or further act, and the lien of\nany such pledge shall be valid and binding as against all parties having\nclaims of any kind in tort, contract or otherwise against the municipal\nassistance corporation, irrespective of whether such parties have notice\nthereof. Neither the resolution nor any other instrument by which a\npledge is created need be recorded or filed to protect such pledge\nexcept in the principal office of the municipal assistance corporation.\n 4. Neither the directors of a municipal assistance corporation nor any\nother person executing the notes or bonds of such corporation shall be\nsubject to any personal liability or accountability by reason of the\nissuance thereof.\n 5. A municipal assistance corporation subject to such agreements with\nnoteholders or bondholders as may then exist, shall have power out of\nany funds available therefor, to purchase notes or bonds of such\ncorporation, which shall thereupon be cancelled.\n 6. Anything in this article ten to the contrary notwithstanding, any\nagreement or agreements with the holders of notes or bonds issued by any\nmunicipal assistance corporation created by or pursuant to any title of\nthis article shall contain a clause stating in substance that any\nprovision in this article or in any such agreement or agreements which\nrelate to taxes imposed under article twelve or sections eleven hundred\nseven or eleven hundred eight of the tax law of the state or to the\nfunds created by sections ninety-two-b, ninety-two-d or ninety-two-e of\nthe state finance law shall be deemed executory only to the extent of\nthe moneys available to the state in such funds from time to time and no\nliability on account thereof shall be incurred by the state beyond the\nmoneys available in such funds.\n 7. In the discretion of the directors of a corporation the notes or\nbonds may be secured by a trust indenture by and between such\ncorporation and a trustee, which may be any trust company or bank having\nthe powers of a trust company in the state. Such trust indenture may\ncontain such provisions for protecting and enforcing the rights and\nremedies of the noteholders or bondholders as may be reasonable and\nproper and not in violation of law, including covenants setting forth\nthe duties of the corporation in relation to the exercise of its\ncorporate powers and the custody, may provide by such trust indenture\nfor the payment of the proceeds of the notes or bonds and the revenues\nto the trustee under such trust indenture or other depository, and for\nthe method of disbursement thereof, with such safeguards and\nrestrictions as it may determine. All expenses incurred in carrying out\nsuch trust indenture may be treated as a part of the operating expenses\nof the corporation. If the notes or bonds shall be secured by a trust\nindenture, the noteholders or bondholders shall have no authority to\nappoint a separate trustee to represent them.\n 8. Whether or not the notes and bonds are of such form and character\nas to be negotiable instruments under the terms of the uniform\ncommercial code, the notes and bonds are hereby made negotiable\ninstruments within the meaning of and for all the purposes of the\nuniform commercial code, subject only to the provisions of the notes and\nbonds for registration.\n