N.Y. PBG Law § 637 — New York Code / Act PBG / Article 15 / Section 637
Borrowing by the trust and for its benefit; effects of certain defaults
Status: in_force

§ 637. Borrowing by the trust and for its benefit; effects of certain\ndefaults. 1. For the purposes of this section, the term "project" means\nthe acquisition, development, design, construction, reconstruction,\nimprovement, rehabilitation, repairing and operation of housing\nfacilities.\n  2. The trust shall have the power and is hereby authorized from time\nto time to issue bonds, notes or other obligations in conformity with\napplicable provisions of the uniform commercial code, in such principal\namounts as it may determine to be necessary to pay the cost of any\nproject and to fund reserves to secure such bonds, notes or other\nobligations, including costs of issuance and any administrative or\nincidental expenses in connection therewith, provided that the aggregate\nprincipal amount of such bonds, notes or other obligations shall not\nexceed ten billion dollars plus a principal amount of such bonds, notes\nor other obligations issued (a) to fund any related debt service reserve\nfund, (b) to provide capitalized interest, and (c) to provide fees and\nother charges and expenses, including underwriters' discount, related to\nthe issuance of such bonds, notes or other obligations and the\nmaintenance of such reserves. The trust shall have the power from time\nto time to refund any bonds, notes or other obligations of the trust by\nthe issuance of new bonds, notes or other obligations, and may issue\nbonds, notes or other obligations partly to refund bonds, notes or other\nobligations of the trust then outstanding and partly to pay the cost of\nany project. Bonds, notes or other obligations issued by the trust shall\nbe payable as may be designated in the resolution of the trust under\nwhich the bonds, notes or other obligations shall be authorized to be\nissued, subject to any agreements with the holders of outstanding bonds,\nnotes or other obligations pledging any particular revenues or moneys.\nNo bonds, notes or other obligations of the trust or any entity referred\nto in subdivision thirteen of section six hundred twenty-nine of this\narticle shall be issued or incurred without the prior written approval\nof the director of management and budget of the city of New York, and no\nsuch bonds, notes or other obligations shall be issued for the purpose\nof refinancing any bonds, notes or other obligations of NYCHA, provided\nthat the proceeds of up to six hundred million dollars of the bonds,\nnotes or other obligations of the trust or any entity referred to in\nsubdivision thirteen of section six hundred twenty-nine of this article\nmay be applied to the payment of outstanding debt incurred by NYCHA in\nconnection with one or more housing facilities, in furtherance of the\npurposes of this article, including, but not limited to, for the purpose\nof payment of outstanding energy performance contract debt.\n  3. The trust shall be authorized to obtain insurance, letters of\ncredit and other credit or liquidity facilities related to its bonds,\nnotes or other obligations.\n  4. The board may delegate to the chair or the president of the trust\nthe power to set the final terms of bonds, notes or other obligations.\n  5. Whenever the trust shall determine that the issuance of its bonds,\nnotes or other obligations is appropriate, the trust shall make a\ndetermination as to the arrangements necessary for the issuance and sale\nof such bonds, notes or other obligations, including the underwriting of\nsuch bonds, notes or other obligations through the public or private\nsale of such bonds, notes or other obligations, and such determination\nshall include compensation for services rendered as the trust deems\nappropriate. Such determination shall be set forth in a resolution of\nthe trust, which shall authorize issuance of such bonds, notes or other\nobligations. The bonds, notes or other obligations shall bear interest\nat such fixed or variable rates and shall be in such denominations, be\nin such form, either coupon or registered, be sold at such public or\nprivate sale, be executed in such manner, be denominated in United\nStates currency, be payable in such medium of payment, at such place and\nbe subject to such terms of redemption as the trust may provide in such\nresolution.\n  6. Any resolution or resolutions authorizing bonds, notes or other\nobligations or any issue of bonds, notes or other obligations may\ncontain provisions which may be a part of the contract with the holders\nof the bonds, notes or other obligations thereby authorized as to:\n  (a) pledging all or part of its revenues, including, but not limited\nto, project-based or tenant-based assistance pursuant to section eight\nof the United States housing act of nineteen hundred thirty-seven, as\namended, or any successor provision, and assistance provided to NYCHA\npursuant to section nine of the United States housing act of nineteen\nhundred thirty-seven, as amended, or any successor provision, together\nwith any other moneys, securities or contracts, to secure the payment of\nthe bonds, notes or other obligations, subject to such agreements as may\nthen exist;\n  (b) the setting aside of reserves and the creation of sinking funds\nand the regulation and disposition thereof;\n  (c) limitations on the purpose to which the proceeds from the sale of\nbonds, notes or other obligations may be applied;\n  (d) limitations on the issuance of additional bonds, notes or other\nobligations, the terms upon which additional bonds, notes or other\nobligations may be issued and secured and the refunding of bonds, notes\nor other obligations;\n  (e) the procedure, if any, by which the terms of any contract with\nholders of bonds, notes or other obligations may be amended or\nabrogated, including the proportion of holders of bonds, notes or other\nobligations which are needed to consent thereto and the manner in which\nsuch consent may be given;\n  (f) vesting in a bond trustee or trustees such properties, rights,\npowers and duties in trust as the trust may determine; and\n  (g) defining the acts or omissions to act that may constitute a\ndefault in the obligations and duties of the trust to the holders of\nbonds, notes or other obligations and providing for the rights and\nremedies of the holders of bonds, notes or other obligations in the\nevent of such default, including as a matter of right the appointment of\na receiver, provided, however, that such rights and remedies shall not\nbe inconsistent with the general laws of the state and other provisions\nof this article.\n  7. In addition to the powers herein conferred upon the trust to secure\nits bonds, notes or other obligations, the trust shall have power in\nconnection with the issuance of bonds, notes or other obligations to\nenter into such agreements for the benefit of the holders of bonds,\nnotes or other obligations as the trust may deem necessary, convenient\nor desirable concerning the use or disposition of its revenues or other\nmoneys, including the entrusting, pledging or creation of any other\nsecurity interest in any such revenues, moneys and the doing of any act,\nincluding refraining from doing any act, which the trust would have the\nright to do in the absence of such agreements. The trust shall have\npower to enter into amendments of any such agreements within the powers\ngranted to the trust by this article and to perform such agreements. The\nprovisions of any such agreements may be made a part of the contract\nwith the holders of bonds, notes or other obligations of the trust.\n  8. Notwithstanding any provision of the uniform commercial code to the\ncontrary, any pledge of or other security interest in revenues, moneys,\naccounts, contract rights, general intangible or other personal property\nmade or created by the trust shall be valid, binding and perfected from\nthe time when such pledge is made or other security interest attaches\nwithout any physical delivery of the collateral or further act, and the\nlien of any such pledge or other security interest shall be valid,\nbinding and perfected against all parties having claims of any kind in\ntort, contract or otherwise against the trust irrespective of whether or\nnot such parties have notice thereof. No instrument by which such a\npledge or security interest is created nor any financing statement need\nbe recorded or filed.\n  9. Whether or not the bonds, notes or other obligations of the trust\nare of such form and character as to be negotiable instruments under the\nterms of the uniform commercial code, the bonds, notes or other\nobligations are hereby made negotiable instruments within the meaning of\nand for all the purposes of the uniform commercial code, subject only to\nthe provisions of the bonds, notes or other obligations for\nregistration.\n  10. Neither the members of the board nor any person executing bonds\nshall be liable personally thereon or be subject to any personal\nliability or accountability solely by reason of the issuance thereof.\nThe bonds, notes or other obligations of the trust shall not be a debt\nof NYCHA, the city, or the state, and neither NYCHA, the city nor the\nstate shall be liable thereon, nor shall they be payable out of any\nfunds other than those of the trust, and such bonds, notes or other\nobligations shall contain on the face thereof a statement to such\neffect.\n  11. The trust, subject to such agreements with bondholders as then may\nexist, shall have power to purchase bonds, notes or other obligations of\nthe trust out of any moneys available therefor, which shall thereupon be\ncancelled.\n  12. Notwithstanding any provision of article twelve of the private\nhousing finance law, section twenty-nine hundred seventy-six of the\npublic authorities law or any other general, special or local law to the\ncontrary, (a) the purposes of the New York city housing development\ncorporation and its powers granted in article twelve of the private\nhousing finance law also shall include, subject to the provisions of any\ncontract with holders of its bonds, notes or other obligations, the\nmaking of loans to the trust and entities referred to in subdivision\nthirteen of section six hundred twenty-nine of this article, and (b)\nbonds, notes or other obligations of the New York city housing\ndevelopment corporation issued for, or to refund bonds, notes or other\nobligations issued for, such purpose or the purposes of paying costs of\nissuance thereof or funding reserves to secure such bonds, notes or\nother obligations (i) may be sold without any consultation or approval\notherwise required by subdivision two of section six hundred fifty-five\nof the private housing finance law, (ii) shall not be included in any\ncalculation of outstanding bonds, notes or other obligations for\npurposes of section six hundred fifty-six of the private housing finance\nlaw and shall not be secured by any capital reserve fund established\npursuant thereto, and (iii) shall not be included in any calculation of\nbonds, notes or other obligations issued by the New York city housing\ndevelopment corporation for purposes of section twenty-nine hundred\nseventy-six of the public authorities law.\n  13. In the event that any default on any bond, note or other\nobligation that is secured by an assignment of, mortgage on, pledge of\nor other encumbrance on any interest of the trust, or any entity\nreferred to in subdivision thirteen of section six hundred twenty-nine\nof this article, in any housing facilities, has occurred and is\ncontinuing beyond the applicable cure period, if any, provided to the\ntrust or such entity in the instrument granting such assignment,\nmortgage, pledge or other encumbrance, notwithstanding any provision in\nsuch instrument, any right of the beneficiary of such instrument to\nobtain such interest in such housing facilities as a remedy to any such\ndefault shall, for a period ending thirty days after the end of such\ncure period, be subject to:\n  (a) the right of the city of New York to remedy, or cause to be\nremedied, such default; and\n  (b) the right of the state of New York to remedy, or cause to be\nremedied, such default; provided, however, that nothing in this\nsubdivision shall be construed to impose any obligation on the city of\nNew York or on the state of New York to remedy, or cause to be remedied,\nsuch default.\n  14. Notwithstanding any default on any obligation referred to in\nsubdivision thirteen of this section, and any remedies exercised as a\nresult of such default, provisions relating to the restricted use of the\nhousing facilities for the provision and operation of housing for\nlow-income families and current residents shall at all times continue to\nbe in effect in perpetuity, and the housing facilities shall remain\nsubject to the provisions of subdivision four of section six hundred\nthirty of this article and section six hundred thirty-one of this\narticle. The trust shall not pledge the fee ownership of the housing\nfacilities as part of a financing arrangement.\n  15. At least quarterly, the trust shall provide financial reports to\nthe director of management and budget of the city of New York containing\nsuch information as the director of management and budget of the city of\nNew York may request.\n