Short title.
This act may be cited as the "New York state project finance agency
act."
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.
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.
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.
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.
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.
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.
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.
Exemption from taxation of property and income.
The property of the agency and its income and operations shall be
exempt from taxation.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Construction.
This act, being necessary for the welfare of the state and its
inhabitants, shall be liberally construed so as to effectuate its
purposes.