N.Y. PBG Law § 76-A — New York Code / Act PBG / Article 4 / Section 76-A
Private financing
Status: in_force

§ 76-a. Private financing.  To facilitate the enlistment of private\ncapital through the sale by authorities or municipalities of their bonds\nand other obligations to persons, firms or corporations other than\ngovernments, in financing state projects, and to maintain the low-rent\ncharacter of such projects---\n  (a) Every contract entered into by the state with an authority and a\nmunicipality, or solely with a municipality, to make loans or periodic\nsubsidies or both (including contracts which amend or supersede\ncontracts previously made, provided that such amending or superseding\ncontracts do not relate to state projects with respect to which\ndefinitive housing bonds of the state have been sold pursuant to section\nsixty of the state finance law, and do not relate to state projects with\nrespect to which serial bonds of a municipality have been sold pursuant\nto sections ten and eleven of the local finance law) may provide that---\n  (1) upon the occurrence of a substantial default in respect to the\ncovenants or conditions to which the authority or municipality is\nsubject (as such substantial default shall be defined in such contract),\nthe authority or municipality shall be obligated at the option of the\ncommissioner, either to convey title to the state in any case where, in\nthe determination of the commissioner (which determination shall be\nfinal and conclusive), such conveyance of title to the state is\nnecessary to achieve the purposes of this chapter, or to deliver\npossession to the state of the project, as then constituted, to which\nsuch contract relates;\n  (2) the state shall be obligated to reconvey or to redeliver\npossession of the project, as constituted at the time of reconveyance or\nredelivery, to such authority or municipality upon such terms as shall\nbe prescribed in such contract and as soon as practicable: (i) after the\ncommissioner shall be satisfied that all defaults with respect to the\nproject have been cured, and that the project will, in order to fulfill\nthe purposes of this chapter, thereafter be operated in accordance with\nthe terms of such contract; or (ii) after the termination of the\nobligation to make periodic subsidies available unless there are any\nobligations or covenants of the authority or municipality which are then\nin default. Any prior conveyances and reconveyances, deliveries and\nredeliveries of possession shall not exhaust the right to require a\nconveyance or delivery of possession of the project to the state\npursuant to sub-paragraph (1) of subdivision (a), upon the subsequent\noccurrence of a substantial default.\n  (b) Whenever such contract to make loans or periodic subsidies or both\nshall include provisions which the commissioner, in said contract,\ndetermines are in accordance with the provisions authorized by\nsubdivision (a) hereof, and the periodic subsidies, pursuant to such\ncontract, have been pledged by the authority or the municipality as\nsecurity for the payment of the principal and interest on the\nobligations of the authority or municipality, the commissioner\n(notwithstanding any other provisions of this chapter) shall continue to\nmake periodic subsidies available for the project so long as any of such\nobligations remain outstanding. Acquisition of title to a project by the\nstate, or delivery of possession thereof to the state, as provided in\nsubdivision (a) hereof, shall not constitute an assumption of liability\nby the state of the bonds or notes of the authority or municipality for\nwhich the periodic subsidies or loans have been pledged. The\ncommissioner may covenant in such contract (in lieu of retaining the\nright to reduce or terminate periodic subsidies under section eighteen\nof this chapter and notwithstanding any other provisions of law) that in\nany event such periodic subsidies shall in each year be at least equal\nto an amount which, together with such income or other funds as are\nactually available from the project for the purpose at the time such\nperiodic subsidy is made, will suffice for the payment of all\ninstallments, falling due within the said year, of principal and\ninterest on the obligations for which the periodic subsidies provided\nfor in the contract shall have been pledged as security; provided that\nsuch periodic subsidies shall not exceed the amounts and shall not be\nmade for a period longer than the amounts and period specified in\nsection seventy-three of this chapter and provided further that such\nperiodic subsidies shall not exceed the amounts and shall not be made\nfor a period longer than the amounts and period specified in the\ncontract.\n  (c) Obligations of an authority or municipality which (1) are secured\neither (A) by a pledge of a state loan under an agreement between such\nauthority or municipality and the state, or (B) by a pledge of periodic\nsubsidies to be made by the state and (2) bear, or are accompanied by, a\ncertificate of the commissioner that such obligations are so secured,\nshall be incontestable in the hands of a bearer. The full faith of the\nstate is pledged to the payment of all loans and periodic subsidies\ncontracted for by the commissioner as security for such obligations.\n