N.Y. TSF Law § 6 — New York Code / Act TSF / Section 6
Bonds of the corporation
Status: in_force

§ 6. Bonds of the corporation. 1. (i) The corporation shall have power\nand is hereby authorized from time to time to issue its bonds in an\naggregate principal amount not exceeding four billion, two hundred\nmillion dollars ($4,200,000,000) plus the amount of any financing costs,\nto provide sufficient funds for achieving its corporate purpose,\nconsisting of the purchase of all or a portion of the state's share\npursuant to section four of this act and the payment or provision for\nfinancing costs. The foregoing limitation shall not apply to bonds\nissued to refund bonds. Provided, however, that no bonds may be issued\npursuant to the authority and power granted by this section, except an\nissue of bonds in an amount not to exceed seven hundred million dollars\n($700,000,000) plus the amount of any applicable financing costs, until\nthe state comptroller shall determine that legislative passage of the\nbudget has occurred for the current state fiscal year in accordance with\nthe provisions of subdivision 3 of section 5 of the legislative law.\nProvided, further, no bonds, other than refunding bonds, shall be issued\npursuant to such authority and power on or after July 1, 2004.\n  (ii) Each issuance of bonds shall be authorized by a resolution of the\ncorporation, adopted by a majority of the members of the board then in\noffice without further authorization or approval, provided, however,\nthat any such resolution authorizing the issuance of bonds may delegate\nto an officer of the corporation the power to issue such bonds from time\nto time and to fix the details of any such issues of bonds by an\nappropriate certificate of such authorized officer. Every issue of the\nbonds of the corporation shall be special revenue obligations payable\nfrom and secured by a pledge of pledged tobacco revenues and other\nassets, including those proceeds of such bonds deposited in a reserve\nfund for the benefit of bondholders, earnings on funds of the\ncorporation and such other funds and assets as may become available,\nupon such terms and conditions as approved by the state representative\nand as specified by the corporation in the resolution under which the\nbonds are issued or in a related trust indenture.\n  (iii) The corporation shall have the power and is hereby authorized\nfrom time to time to issue bonds, whenever it deems refunding expedient,\nto refund any bonds by the issuance of new bonds, whether the bonds to\nbe refunded have or have not matured, and to issue bonds partly to\nrefund bonds then outstanding and partly for any of its other corporate\npurposes. The refunding bonds may be exchanged for the bonds to be\nrefunded or sold and the proceeds applied to the purchase, redemption or\npayment of such bonds.\n  2. The bonds of the corporation of each issue shall be dated, shall\nbear interest (which, under the code, in the opinion of transaction\ncounsel to the corporation, may be includable in or excludable from the\ngross income of the owners for federal income tax purposes) at such\nfixed or variable rates, payable at or prior to maturity, and shall\nmature at such time or times, as may be determined by the corporation\nand may be made redeemable before maturity, at the option of the\ncorporation, at such price or prices and under such terms and conditions\nas may be fixed by the corporation. The principal and interest of such\nbonds may be made payable in any lawful medium. The resolution or the\ncertificate of the authorized officer shall determine the form of the\nbonds, either registered or book-entry form, and the manner of execution\nof the bonds and shall fix the denomination or denominations of the\nbonds and the place or places of payment of principal and interest\nthereof, which may be at any bank or trust company within or outside the\nstate. If any officer whose signature or a facsimile thereof appears on\nany bonds shall cease to be such officer before the delivery of such\nbonds, such signature or facsimile shall nevertheless be valid and\nsufficient for all purposes the same as if he had remained in office\nuntil such delivery. The corporation may also provide for temporary\nbonds and for the replacement of any bond that shall become mutilated or\nshall be destroyed or lost.\n  3. The corporation with the approval of the state representative may\nsell such bonds in such manner, either at a public or private sale and\neither on a competitive or negotiated basis. Provided, however, no such\nbonds may be sold by the corporation at private sale unless such sale\nand the terms thereof have been approved in writing by the comptroller.\nThe proceeds of such bonds shall be disbursed for the purposes for which\nsuch bonds were issued under such restrictions as the sale agreement and\nthe resolution authorizing the issuance of such bonds or the related\ntrust indenture may provide. Such bonds shall be issued upon approval of\nboth the state representative and the corporation and without any other\napprovals, filings, proceedings or the happening of any other conditions\nor things other than the approvals, findings, proceedings, conditions,\nand things that are specified and required by this act.\n  4. Any pledge made by the corporation shall be valid and binding at\nthe time the pledge is made. The assets, property, revenues, reserves or\nearnings so pledged shall immediately be subject to the lien of such\npledge without any physical delivery thereof or further act and 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\ncorporation, irrespective of whether such parties have notice thereof.\nNotwithstanding any other provision of law to the contrary, neither the\nbond resolution nor any indenture or other instrument by which a pledge\nis created or by which the corporation's interest in pledged assets,\nproperty, revenues, reserves or earnings thereon is assigned need be\nfiled, perfected or recorded in any public records in order to protect\nthe pledge thereof or perfect the lien thereof as against third parties,\nexcept that a copy thereof shall be filed in the records of the\ncorporation.\n  5. Whether or not the bonds of the corporation are of such form and\ncharacter as to be negotiable instruments under the terms of the uniform\ncommercial code, the bonds are hereby made negotiable instruments for\nall purposes, subject only to the provisions of the bonds for\nregistration.\n  6. At the sole discretion of the corporation, any bonds issued by the\ncorporation and any ancillary bond facility made under the provisions of\nthis act may be secured by a resolution or trust indenture by and\nbetween the corporation and the trust indenture trustee, which may be\nany trust company or bank having the powers of a trust company, whether\nlocated within or outside the state. Such trust indenture or resolution\nproviding for the issuance of such bonds may provide for the creation\nand maintenance of such reserves as the board shall determine to be\nproper and may include covenants setting forth the duties of the\ncorporation in relation to the bonds, the income of the corporation, the\nrelated sale agreement with respect to the sale of the state's share and\nthe pledged tobacco revenues and other assets. Such trust indenture or\nresolution may contain provisions respecting the custody, safeguarding\nand application of all moneys and securities, may contain such\nprovisions for protecting and enforcing the rights and remedies\n(pursuant thereto and to the sale agreement) of the owners of the bonds\nand any other benefitted party as may be reasonable and proper and not\nin violation of law and may include any or all of the rights, powers and\nduties of the trustee appointed by bondholders pursuant to section eight\nof this act and limiting or abrogating the right of the bondholders to\nappoint a trustee under such section. It shall be lawful for any bank or\ntrust company incorporated under the laws of the state which may act as\ndepository of the proceeds of bonds or of any other funds or obligations\nreceived on behalf of the corporation to furnish such indemnifying bonds\nor to pledge such securities as may be required by the corporation. Any\nsuch trust indenture or resolution may contain such other provisions as\nthe corporation may deem reasonable and proper for priorities and\nsubordination among the owners of the bonds and other beneficiaries. Any\nreference in this act to a resolution of the board shall include any\ntrust indenture authorized thereby.\n  7. The corporation may enter into, amend or terminate, as it\ndetermines to be necessary or appropriate, any ancillary bond facility\n(i) to facilitate the issuance, sale, resale, purchase, repurchase or\npayment of bonds, interest rate savings or market diversification or the\nmaking or performance of swap contracts, including without limitation\nbond insurance, letters of credit and liquidity facilities, or (ii) to\nattempt to manage or hedge risk or achieve a desirable effective\ninterest rate or cash flow. Such facility shall be made upon the terms\nand conditions established by the board, including without limitation\nprovisions as to security, default, termination, payment, remedy and\nconsent to service of process.\n  8. The corporation may enter into, amend or terminate, any ancillary\nbond facility that it determines to be necessary or appropriate to place\nthe obligations or investments of the corporation, as represented by the\nbonds or the investment of reserved bond proceeds or other pledged\ntobacco revenues or other assets, in whole or in part, on the interest\nrate, cash flow or other basis approved by the corporation, which\nfacility may include without limitation contracts commonly known as\ninterest rate swap agreements, forward purchase contracts or guaranteed\ninvestment contracts and futures or contracts providing for payments\nbased on levels of, or changes in, interest rates. These contracts or\narrangements may be entered into by the corporation in connection with,\nor incidental to, entering into, or maintaining any (i) agreement which\nsecures bonds of the corporation or (ii) investment, or contract\nproviding for investment of reserves or similar facility guaranteeing an\ninvestment rate for a period of years not to exceed the underlying term\nof the bonds. The determination by the corporation that an ancillary\nbond facility or the amendment or termination thereof is necessary or\nappropriate as aforesaid shall be conclusive. Any ancillary bond\nfacility may contain such payment, security, default, remedy,\ntermination provisions and payments and other terms and conditions as\ndetermined by the corporation, after giving due consideration to the\ncreditworthiness of the counterparty or other obligated party, including\nany rating by any nationally recognized rating agency, and any other\ncriteria as may be appropriate.\n  9. Bonds or any ancillary bond facility may contain a recital that\nthey are issued or executed, respectively, pursuant to this act, which\nrecital shall be conclusive evidence of their validity, respectively,\nand the regularity of the proceedings relating thereto.\n  10. The corporation, subject to such agreements with bondholders as\nmay then exist (including provisions which restrict the power of the\ncorporation to purchase bonds), or with the providers of any applicable\nancillary bond facility, shall have the power out of any funds available\ntherefor to purchase bonds of the corporation, which may or may not\nthereupon be cancelled, at a price not substantially exceeding:\n  (i) if the bonds are then redeemable, the redemption price then\napplicable, including any accrued interest; and\n  (ii) if the bonds are not then redeemable, the redemption price and\naccrued interest applicable on the first date after such purchase upon\nwhich the bonds become subject to redemption.\n  11. (i) Notwithstanding the provisions of any general or special law\nto the contrary, and subject to the making of annual appropriations\ntherefor by the state, in order to assist in the undertaking and\nfinancing by the corporation under this act, the state representative is\nauthorized to and shall enter into one or more contingency contracts\nwith the corporation upon such terms as the corporation and the state\nrepresentative shall agree, so as to provide annually to the corporation\nthe amount, if any, as necessary to meet the debt service requirements\non one or more series of bonds, including refunding bonds, in any year\nif the receipts from pledged tobacco revenues or from an ancillary bond\nfacility, if any, are inadequate and after application of all collateral\npledged therefor, including any debt service and debt service reserve\nfund. Any contingency contract shall terminate when there are no bonds\nbenefited by the contract outstanding in accordance with the trust\nindenture under which such bonds are issued. The contract may provide\nfor (A) the corporation to request annually, not later than sixty days\nprior to the commencement of the state's next succeeding fiscal year,\nfrom the state the amount, as shall be certified by an authorized\nofficer of the corporation to the director of the budget, to be provided\nby the state during its next succeeding fiscal year pursuant to each\ncontingency contract, and (B) for the director of the budget on behalf\nof the state to include, as a requested appropriation item, an amount\nequal to such certified amount. Each contingency contract shall include\ntext to the effect that the obligations of the state thereunder shall be\ndeemed executory only to the extent of the moneys available to the state\nand no liability on account of any such agreement shall be incurred by\nthe state beyond the moneys available and appropriated for the purpose\nthereof.\n  (ii) The state, through the state representative, is hereby authorized\nto enter into a contingency contract on the terms and conditions and\nsubject to the limitations of this section, it being hereby determined\nthat the additional net proceeds to be received as a result thereof by\nthe state are an important public purpose to be achieved. The obligation\nof the state to fund or to pay the amounts provided for in the\ncontingency contract, as in this section provided, shall constitute a\ncontingent contractual obligation and shall not constitute a debt or\nstate supported debt of the state within the meaning of any\nconstitutional or statutory provision and shall be deemed executory only\nto the extent of moneys available; no liability shall be incurred by the\nstate beyond the moneys available for such purpose and such obligation\nis subject to annual appropriation by the legislature. The amounts paid\nto the corporation pursuant to any such contract shall be used by it\nsolely to pay or provide for the payment of debt service on the bonds of\nthe corporation, including refunding bonds, if any.\n  12. Neither the members of the corporation nor any other person\nexecuting the bonds or an ancillary bond facility of the corporation\nshall be subject to any personal liability or accountability by reason\nof the issuance or execution and delivery thereof.\n