2023 New York Laws › PBA - Public Authorities › Article 8 - Miscellaneous Authorities › Title 4 - Dormitory Authority › 1680-L - The Special Disability Fund Financing.

§  1680-l.  The  special disability fund financing. 1. As used in this
section the following terms shall have the following meanings:
(a) "Ancillary bond facility" means  any  interest  rate  exchange  or
similar  agreement  or  any  bond  insurance policy, letter of credit or
other  credit  enhancement  facility,  liquidity  facility,   guaranteed
investment  or  reinvestment  agreement,  or  other  similar  agreement,
arrangement or contract.
(b) "Benefited party" means  any  person,  firm  or  corporation  that
enters  into  an ancillary bond facility with the authority according to
the provisions of this section.
(c) "Bonds" means any bonds, notes, certificates of participation  and
other  evidence  of  indebtedness  issued  by  the authority pursuant to
subdivision five of this section.
(d) "Bond owners or owners of bonds" means any  registered  owners  of
bonds.
(e) "Chair" means the chair of the workers' compensation board.
(f)  "Code"  means the United States Internal Revenue Code of 1986, as
amended.
(g) "Costs  of  issuance"  means  any  item  of  expense  directly  or
indirectly  payable  or reimbursable by the authority and related to the
authorization, sale, or issuance of bonds, including,  but  not  limited
to,  underwriting fees and fees and expenses of professional consultants
and fiduciaries.
(h) "Debt service" means actual debt service, comprised of  principal,
interest  and  associated  costs,  as  defined  in  subparagraph five of
paragraph (h) of subdivision eight of section fifteen  of  the  workers'
compensation law.
(i)  "Director  of the budget" or "director" means the director of the
budget of the state of New York.
(j) "Financing agreement" means any agreement authorized  pursuant  to
subdivision  four of this section between the chair and the commissioner
of taxation and finance, and the authority.
(k)  "Financing  costs"  means  all  costs  of  issuance,  capitalized
interest,  capitalized operating expenses of the authority and, pursuant
to the financing agreement, the initial capitalized  operating  expenses
of  the  waiver  agreement  management office and debt service reserves,
fees,  cost  of  any  ancillary  bond  facility,  and  any  other  fees,
discounts, expenses and costs related to issuing, securing and marketing
the   bonds  including,  without  limitation,  any  net  original  issue
discount.
(l) "Investment securities" means:  (i)  general  obligations  of,  or
obligations  guaranteed by, any state of the United States of America or
political subdivision thereof, or the District of Columbia or any agency
or instrumentality of any of them, receiving one of  the  three  highest
long-term unsecured debt rating categories available for such securities
of  at  least  one  independent  rating  agency, or (ii) certificates of
deposit,  savings  accounts,  time  deposits  or  other  obligations  or
accounts  of  banks  or  trust  companies  in the state, secured, if the
authority shall so require, in such  manner  as  the  authority  may  so
determine,  or  (iii) obligations in which the comptroller is authorized
to invest pursuant to either section ninety-eight or  ninety-eight-a  of
the  state  finance  law,  or (iv) investments which the commissioner of
taxation and finance is permitted to make with surplus or reserve moneys
of the special disability fund under subparagraph seven of paragraph (h)
of subdivision eight of section fifteen  of  the  workers'  compensation
law.
(m)  "Interest  rate  exchange  or  similar agreement" means a written
contract entered into in connection with the issuance of bonds  or  with

such bonds outstanding with a counterparty to provide for an exchange or
swap  of  payments  based upon fixed and/or variable interest rates, and
shall be for exchanges in currency of the United States of America only.
(n)  "Net  proceeds"  means the amount of proceeds remaining following
each sale of bonds which are not required by the authority for  purposes
of  this  section to pay or provide for debt service or financing costs,
as provided in the financing agreement.
(o) "Operating expenses" means the reasonable or  necessary  operating
expenses  of  the  authority  for  purposes  of this section, including,
without limitation, the costs of: retention of auditors, preparation  of
accounting  and  other reports, maintenance of the ratings on the bonds,
any operating expense reserve fund, insurance premiums,  ancillary  bond
facilities,   rebate   payments,   annual  meetings  or  other  required
activities  of  the  authority,   and   professional   consultants   and
fiduciaries.
(p)  "Outstanding",  when  used  with  respect to bonds, shall exclude
bonds that shall have been paid in  full  at  maturity,  or  shall  have
otherwise  been  refunded, redeemed, defeased or discharged, or that may
be deemed not  outstanding  pursuant  to  agreements  with  the  holders
thereof.
(q)  "Pledged  assessments  revenues",  "pledged revenues" or "pledged
assessments" means  receipts  of  special  disability  fund  assessments
imposed  pursuant  to  subparagraph four of paragraph (h) of subdivision
eight of section fifteen of the workers' compensation  law  and  pledged
for  the payment of debt service on the bonds or amounts due pursuant to
an ancillary bond facility, including the right to receive same.
(r) "State" means the state of New York.
(s) "Special disability fund financing agreement" means  an  agreement
authorized and created pursuant to subparagraph five of paragraph (h) of
subdivision  eight  of section fifteen of the workers' compensation law,
as same by its terms and bond proceedings, may be amended.
(t) "Waiver agreement" means waiver agreements entered  into  pursuant
to section thirty-two of the workers' compensation law.
(u)  "Waiver  agreement  management  office"  shall  mean  the  office
described in  paragraph  (e)  of  section  thirty-two  of  the  workers'
compensation law.
2.   The  authority  is  hereby  authorized  to  finance  the  special
disability fund established by paragraph (h)  of  subdivision  eight  of
section  fifteen  of the workers' compensation law and to enter into one
or more special disability fund financing agreements described  in  such
subdivision.  All  of  the provisions of the authority relating to bonds
and notes which are not inconsistent with the provisions of this section
shall apply to obligations authorized by this section, including but not
limited to the power to establish  adequate  reserves  therefor  and  to
issue  renewal  notes or refunding bonds thereof. The provisions of this
section shall apply solely to obligations authorized by this section and
shall  not  include  liabilities,  assets   or   revenues   other   than
liabilities,  assets  or revenues derived from the authority solely from
the special disability fund.
3. It is found and declared that the special disability fund no longer
serves the purposes for which it was  created,  adds  to  the  time  and
expense  of  proceedings  before  the workers' compensation board and to
employers' costs for workers' compensation insurance; that the  creation
and  operation  of  a waiver agreement management office of the workers'
compensation board, to manage, maintain and negotiate waiver  agreements
on  behalf  of  the  special  disability  fund  can  reduce  the special
disability  fund's  unfunded  liability;  that  the  reduction  of  such
liability  and  the closing of the fund to new claims will over the long

term  reduce  assessments  paid  to  the  fund  by  insurance  carriers,
self-insurers  and the state insurance fund, as well as the employers to
whom these costs are passed on; that in the absence of this section  the
annual cost of such assessments is expected to rise; that the settlement
of   claims  and  other  actions  undertaken  by  the  waiver  agreement
management office will  lower  the  administrative  costs  of  insurance
carriers,  self-insurers  and  the  state  insurance  fund; that revenue
obligations issued by the authority and secured by a special  assessment
annually  levied,  imposed and collected on and from insurance carriers,
self-insurers and the state insurance fund for the governmental  purpose
of  funding  waiver agreements amortized over a substantial period would
allow the state to settle and otherwise manage claims  as  a  means  for
reducing  the fund's liabilities and the assessments needed to pay them,
thereby furthering the policy of  the  state  to  reduce  the  costs  of
workers'  compensation  and to improve the business climate in the state
while compensating injured workers and honoring the obligations  of  the
special  disability fund; that all costs of the authority in relation to
this section shall be paid from assessments set forth in  paragraph  (h)
of  subdivision  eight  of  section fifteen of the workers' compensation
law; and that, therefore, the provisions of this  section  are  for  the
public  benefit  and  good  and  the  authorization  as provided in this
section of the issuance of  revenue  obligations  of  the  authority  is
declared  to  be  for  a public purpose and the exercise of an essential
governmental function.
4. (a) The authority, the commissioner of taxation and finance and the
chair,  in  consultation  with  the  special  disability  fund  advisory
committee  shall  execute a financing agreement prior to the issuance of
any bonds. Such agreement shall contain such terms and conditions as are
necessary to carry out and effectuate  the  purposes  of  this  section,
including  covenants  with  respect to the assessment and enforcement of
the assessments, the application and use of the proceeds of the sale  of
bonds  to preserve the tax-exemption on the bonds, the interest on which
is intended  to  be  exempt  from  taxation.  The  state  shall  not  be
authorized to make any covenant, pledge, promise or agreement purporting
to  bind the state with respect to pledged revenues, except as otherwise
specifically authorized by this section.
(b) The net proceeds of the bonds shall  be  deposited  in  accordance
with  the  financing agreement and this section. The financing agreement
shall provide for the application of the net  bond  proceeds,  and  such
bond  proceeds  shall  be  used,  for any of the following purposes: (i)
funding of waiver agreements, (ii) payment  of  financing  costs,  (iii)
funding  anticipated  liabilities  of  the special disability fund, (iv)
funding contract awards pursuant to subparagraph two of paragraph (h) of
section thirty-two of the workers' compensation law and (v)  such  other
purposes  as  are set forth in the financing agreement. Not inconsistent
with this section, the authority may provide restrictions on the use and
investment of net proceeds  of  the  bonds  and  other  amounts  in  the
financing  agreement  or  otherwise  in  a  tax  regulatory agreement as
necessary or desirable to assure that they are exempt from taxation.
5. (a) (i) The authority shall have power and is hereby authorized  to
issue  its  bonds at such times and in an aggregate principal amount not
to exceed an amount to be determined by the superintendent of  financial
services  as  necessary  to  address  all  or  a portion of the incurred
unfunded liabilities of the special disability  fund,  but  in  no  case
exceeding  twenty-five  percent of the unfunded liability of the special
disability fund as of a date no later  than  July  first,  two  thousand
seven,  as  certified  to  the authority by a qualified third party. The
bonds shall be issued for the following corporate purposes: (A)  funding

of  waiver  agreements,  (B)  payment  of  financing  costs, (C) funding
anticipated liabilities of the  special  disability  fund,  (D)  funding
contract  awards pursuant to paragraph two of subdivision (h) of section
thirty-two  of the workers' compensation law and (E) such other purposes
as are set forth in the financing agreement. The foregoing limitation on
outstanding aggregate principal shall not apply to prevent the  issuance
of bonds to refund bonds.
(ii) Each issuance of bonds shall be authorized by a resolution of the
authority,  provided,  however, that any such resolution authorizing the
issuance of bonds may delegate to an officer of the authority the  power
to issue such bonds from time to time and to fix the details of any such
issues  of  bonds  by  an  appropriate  certificate  of  such authorized
officer. Every issue of the bonds  of  the  authority  for  the  special
disability  fund  shall  be special revenue obligations payable from and
secured by a pledge  of  revenues  and  other  assets,  including  those
proceeds  of  such  bonds deposited in a reserve fund for the benefit of
bondholders, earnings on funds of the authority and such other funds and
assets as may become  available,  upon  such  terms  and  conditions  as
specified  by  the authority in the resolution under which the bonds are
issued or in a related trust indenture.
(iii) The authority shall have the power and is hereby authorized from
time to time to issue bonds, in consultation with the special disability
fund advisory committee to refund any bonds issued under this section 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 of its other corporate purposes under this section.
The refunding bonds may be exchanged for the bonds  to  be  refunded  or
sold  and the proceeds applied to the purchase, redemption or payment of
such bonds.
(b) The bonds of the authority of each issue  shall  be  dated,  shall
bear  interest  (which, in the opinion of bond counsel to the authority,
may be includable in or excludable from the gross income of  the  owners
for  federal  income  tax  purposes)  at  such  fixed or variable rates,
payable at or prior to maturity, and shall mature at such time or times,
as may be determined by the authority and may be made redeemable  before
maturity,  at  the  option of the authority, at such price or prices and
under such terms and conditions as may be fixed by  the  authority.  The
principal  and  interest of such bonds may be made payable in any lawful
medium. The resolution or the  certificate  of  the  authorized  officer
shall  determine  the form of the bonds, either registered or book-entry
form, and the manner of  execution  of  the  bonds  and  shall  fix  the
denomination  or  denominations  of the bonds and the place or places of
payment of principal and interest thereof, which may be at any  bank  or
trust  company  within  or  outside  the  state.  If  any  officer whose
signature or a facsimile thereof appears on any bonds shall cease to  be
such  officer  before  the  delivery  of  such  bonds, such signature or
facsimile shall nevertheless be valid and sufficient  for  all  purposes
the  same as if such officer had remained in office until such delivery.
The  authority  may  also  provide  for  temporary  bonds  and  for  the
replacement  of  any  bond  that  shall  become  mutilated  or  shall be
destroyed or lost.
(c) The authority may sell such bonds in  such  manner,  either  at  a
public  or private sale and either on a competitive or negotiated basis,
provided no such bonds may be sold by  the  authority  at  private  sale
unless  such sale and the terms thereof have been approved in writing by
the comptroller of the state of New York. The  proceeds  of  such  bonds
shall  be  disbursed  for  the purposes for which such bonds were issued
under such restrictions as the financing agreement  and  the  resolution

authorizing  the  issuance  of such bonds or the related trust indenture
may provide. Such bonds shall be issued upon approval of  the  authority
and  without  any other approvals, filings, proceedings or the happening
of  any  other  conditions or things other than the approvals, findings,
proceedings, conditions, and things that are specified and  required  by
this  section.  Provided,  however, that any issuance of bonds under the
authority of this section shall be considered a project for the purposes
of section fifty-one of this chapter, and subject to approval under such
section.
(d) Any pledge made by the authority shall be valid and binding at the
time the pledge is made. The assets,  property,  revenues,  reserves  or
earnings  so  pledged  shall  immediately be subject to the lien of such
pledge without any physical delivery thereof or further act and the lien
of any such pledge shall be valid and binding  as  against  all  parties
having claims of any kind against the authority, irrespective of whether
such parties have notice thereof. Notwithstanding any other provision of
law  to  the  contrary, neither the bond resolution nor any indenture or
other instrument, including the financing agreement, by which  a  pledge
is  created  or  by  which  the  authority's interest in pledged assets,
property, revenues, reserves or earnings thereon  is  assigned  need  be
filed,  perfected  or recorded in any public records in order to protect
the pledge thereof or perfect the lien thereof as against third parties,
except that a copy  thereof  shall  be  filed  in  the  records  of  the
authority.
(e)  Whether  or  not  the bonds of the authority are of such form and
character as to be negotiable instruments under the terms of the uniform
commercial code, the bonds are hereby made  negotiable  instruments  for
all   purposes,  subject  only  to  the  provisions  of  the  bonds  for
registration.
(f) At the sole discretion of the authority, any bonds issued  by  the
authority  and  any ancillary bond facility made under the provisions of
this subdivision may be secured by a resolution or  trust  indenture  by
and  between the authority and the trust indenture trustee, which may be
any trust company or bank having the powers of a trust company,  whether
located  within  or  outside  the  state,  provided it is carried out in
accordance with section sixty-nine-d of  the  state  finance  law.  Such
trust  indenture  or resolution providing for the issuance of such bonds
may provide for the creation and maintenance of  such  reserves  as  the
authority shall determine to be proper and may include covenants setting
forth  the  duties of the authority in relation to the bonds, the income
of the authority, or the financing agreement. Such  trust  indenture  or
resolution   may   contain   provisions:  (i)  respecting  the  custody,
safeguarding  and  application  of  all  moneys  and  securities;   (ii)
protecting  and enforcing the rights and remedies (pursuant to the trust
indenture and the financing agreement) of the owners of  the  bonds  and
any  other  benefited  party  as may be reasonable and proper and not in
violation of law; (iii) concerning the rights, powers and duties of  the
trustee  appointed  by  bondholders  pursuant  to  paragraph (g) of this
subdivision; or (iv) limiting or abrogating the right of the bondholders
to appoint a trustee. It shall be lawful for any bank or  trust  company
which  may  act  as  depository of the proceeds of bonds or of any other
funds or obligations received on behalf of the authority to furnish such
indemnifying bonds or to pledge such securities as may  be  required  by
the  authority.  Any such trust indenture or resolution may contain such
other provisions as the authority may deem  reasonable  and  proper  for
priorities  and  subordination  among  the owners of the bonds and other
beneficiaries. For purposes of  this  section,  a  "resolution"  of  the
authority shall include any trust indenture authorized thereby.
(g) The authority may enter into, amend or terminate, as it determines
to   be  necessary  or  appropriate,  any  ancillary  bond  facility  in
consultation with the special disability fund advisory committee (i)  to
facilitate  the  issuance, sale, resale, purchase, repurchase or payment
of  bonds, interest rate savings or market diversification or the making
or  performance  of  interest  rate  exchange  or  similar   agreements,
including  without  limitation  bond  insurance,  letters  of credit and
liquidity facilities, (ii) to attempt to manage or hedge risk or achieve
a desirable effective interest rate or cash flow, or (iii) to place  the
obligations or investments of the authority, as represented by the bonds
or the investment of reserved bond proceeds or other pledged revenues or
other  assets,  in  whole or in part, on the interest rate, cash flow or
other basis decided in consultation with  the  special  disability  fund
advisory  committee,  which  facility  may  include  without  limitation
contracts  commonly  known  as  interest  rate   exchange   or   similar
agreements,   forward   purchase   contracts  or  guaranteed  investment
contracts and futures or  contracts  providing  for  payments  based  on
levels   of,   or   changes  in,  interest  rates.  These  contracts  or
arrangements may be entered into by the authority in connection with, or
incidental to, entering into, or maintaining  any  (i)  agreement  which
secures bonds of the authority or (ii) investment, or contract providing
for   investment   of  reserves  or  similar  facility  guaranteeing  an
investment rate for a period of years not to exceed the underlying  term
of  the bonds. The determination by the authority that an ancillary bond
facility or  the  amendment  or  termination  thereof  is  necessary  or
appropriate  as  aforesaid  shall  be  conclusive.  Any  ancillary  bond
facility may  contain  such  payment,  security,  default,  remedy,  and
termination  provisions  and  payments and other terms and conditions as
determined by the authority,  after  giving  due  consideration  to  the
creditworthiness of the counterparty or other obligated party, including
any  rating  by  any  nationally recognized rating agency, and any other
criteria as may be appropriate.
(h) The authority, subject to such agreements with bondholders as  may
then  exist  (including  provisions  which  restrict  the  power  of the
authority to purchase bonds), or with the providers  of  any  applicable
ancillary bond facility, shall have the power out of any funds available
therefor  to  purchase  bonds  of  the  authority,  which may or may not
thereupon be cancelled, at a price not substantially exceeding:
(i) if the bonds  are  then  redeemable,  the  redemption  price  then
applicable, including any accrued interest; or
(ii)  if  the  bonds are not then redeemable, the redemption price and
accrued interest applicable on the first date after such  purchase  upon
which the bonds become subject to redemption.
(i)  Neither  the  members  of  the  authority  nor  any  other person
executing the bonds or an ancillary bond facility of the authority shall
be subject to any personal  liability  by  reason  of  the  issuance  or
execution and delivery thereof.
(j)  The  maturities  of  the bonds shall not exceed thirty years from
their respective issuance dates.
6. Neither any bond issued pursuant to this section nor any  ancillary
bond  facility  of  the  authority  shall  constitute  a  debt  or moral
obligation of the state or  a  state  supported  obligation  within  the
meaning  of any constitutional or statutory provision or a pledge of the
faith and credit of the state or of the taxing power of the  state,  and
the state shall not be liable to make any payments thereon nor shall any
bond  or  any  ancillary  bond  facility  be payable out of any funds or
assets other than pledged revenues and other assets of the authority and
other funds  and  assets  of  or  available  to  the  authority  pledged

therefor, and the bonds and any ancillary bond facility of the authority
shall  contain  on  the  face thereof or other prominent place thereon a
statement to the foregoing effect.
7.  (a)  Subject to the provisions of subdivision five of this section
in the event  that  the  authority  shall  default  in  the  payment  of
principal  of,  or interest on, or sinking fund payment on, any issue of
bonds after the same shall become due, whether at maturity or upon  call
for  redemption,  or  in the event that the authority or the state shall
fail to comply with any agreement made with the holders of any issue  of
bonds,  the holders of twenty-five percent in aggregate principal amount
of  the  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  bonds  for  the
purposes herein provided.
(b)  Such  trustee,  may,  and  upon written request of the holders of
twenty-five percent in principal amount of such bonds  then  outstanding
shall, in his or its own name:
(i)  by  suit,  action  or  proceeding  in  accordance  with the civil
practice law and rules, enforce all rights of the bondholders, including
the right to require the authority to carry out any agreement with  such
holders and to perform its duties under this section;
(ii) bring suit upon such bonds;
(iii)  by  action  or  suit, require the authority to account as if it
were the trustee of an express trust for the holders of such bonds;
(iv) by action or suit,  enjoin  any  acts  or  things  which  may  be
unlawful or in violation of the rights of the holders of such bonds; and
(v)  declare all such bonds due and payable, and if all defaults shall
be made good, then, with the  consent  of  the  holders  of  twenty-five
percent  of  the  principal amount of such bonds then outstanding, annul
such declaration and its consequences, provided, however,  that  nothing
in  this  subdivision  shall  preclude  the authority from agreeing that
consent of the provider of an ancillary bond facility is required for an
acceleration of related bonds in the event of a  default  other  than  a
failure to pay principal of or interest on the bonds when due.
(c)  The  supreme court shall have jurisdiction of any suit, action or
proceeding by the trustee on behalf of such bondholders.  The  venue  of
any  such  suit,  action  or  proceeding  shall be laid in the county of
Albany.
(d) Before declaring the principal  of  bonds  due  and  payable,  the
trustee shall first give thirty days notice in writing to the authority.
8.  All  monies of the authority from whatever source derived shall be
paid to the treasurer of the authority and shall be deposited  forthwith
in  a  bank  or  banks  designated  by the authority. The monies in such
accounts shall be paid out or withdrawn on the order of such  person  or
persons  as  the  authority may authorize to make such requisitions. All
deposits of such monies shall either be secured by  obligations  of  the
United  States  or of the state or of any municipality of a market value
equal at all times to the amount on deposit, or monies of the  authority
may  be  deposited in money market funds rated in the highest short-term
or long-term rating category  by  at  least  one  nationally  recognized
rating  agency.  To  the  extent  practicable,  and  consistent with the
requirements of the authority, all such monies  shall  be  deposited  in
interest   bearing   accounts.   The   authority   shall   have   power,
notwithstanding the provisions of this section,  to  contract  with  the
holders of any bonds as to the custody, collection, security, investment
and  payment  of any monies of the authority or any monies held in trust
or otherwise for the payment of bonds or any way to  secure  bonds,  and

carry  out  any  such contract notwithstanding that such contract may be
inconsistent with the provisions of this section. Monies held  in  trust
or  otherwise for the payment of bonds or in any way to secure bonds and
deposits  of  such moneys may be secured in the same manner as monies of
the authority and all banks and trust companies are authorized  to  give
such  security  for  such  deposits.  Any  monies  of  the authority not
required for immediate use or disbursement may, at the discretion of the
authority, be invested in accordance with law and such guidelines as are
approved by the authority.
9. (a) It is hereby determined that the carrying out by the  authority
of its corporate purposes under this section are in all respects for the
benefit  of the people of the state of New York and are public purposes.
Accordingly, the authority shall be regarded as performing an  essential
governmental function in the exercise of the powers conferred upon it by
this  section.  The  property  of  the  authority,  its  income  and its
operations  shall  be  exempt  from   taxation,   assessments,   special
assessments  and  ad valorem levies. The authority shall not be required
to pay any fees, taxes, special ad valorem levies or assessments of  any
kind,  whether  state  or  local,  including,  but  not limited to, real
property taxes, franchise taxes, sales taxes or  other  taxes,  upon  or
with  respect  to  any  property  owned by it or under its jurisdiction,
control or supervision, or upon  the  uses  thereof,  or  upon  or  with
respect  to  its  activities  or operations in furtherance of the powers
conferred upon it by this section,  or  upon  or  with  respect  to  any
assessments,  rates, charges, fees, revenues or other income received by
the authority.
(b) Any bonds issued pursuant to this section, their transfer and  the
income therefrom shall, at all times, be exempt from taxation except for
estate or gift taxes and taxes on transfers.
(c)  The  state  hereby  covenants  with  the  purchasers and with all
subsequent holders and transferees of  bonds  issued  by  the  authority
pursuant  to  this  section,  in  consideration of the acceptance of and
payment for the bonds, that the bonds of the authority  issued  pursuant
to  this section and the income therefrom and all assessments, revenues,
moneys, and other property received by the authority and pledged to  pay
or to secure the payment of such bonds shall at all times be exempt from
taxation.
(d)  In  the  case of any bonds of the authority, interest on which is
intended to be exempt from  federal  income  tax,  the  authority  shall
prescribe  restrictions  on  the use of the proceeds thereof and related
matters only as are necessary or desirable to assure such exemption, and
the recipients of such proceeds shall be bound  thereby  to  the  extent
such  restrictions shall be made applicable to them. Any such recipient,
including, but not limited to, the state, the state  insurance  fund,  a
public  benefit  corporation,  and  a school district or municipality is
authorized to execute a tax regulatory agreement with the  authority  or
the  state,  as  the case may be, and the execution of such an agreement
may be treated by the authority or the state as a condition to receiving
any such proceeds.
10. (a) The state, solely with respect to the resources of the special
disability fund  and  as  set  forth  in  the  special  disability  fund
financing  agreement,  covenants  with the purchasers and all subsequent
owners and transferees of bonds issued by the authority pursuant to this
section in consideration of the acceptance of the payment of the  bonds,
until  the  bonds,  together with the interest thereon, with interest on
any unpaid installment  of  interest  and  all  costs  and  expenses  in
connection  with  any  action or proceeding on behalf of the owners, are
fully met and discharged or  unless  expressly  permitted  or  otherwise

authorized  by  the  terms  of  each  special  disability fund financing
agreement and any contract made or entered into by the authority with or
for the benefit of such owners, (i) that  in  the  event  bonds  of  the
authority  are  sold  as federally tax-exempt bonds, the state shall not
take any action or fail to take action that would result in the loss  of
such federal tax exemption on said bonds, (ii) that the state will cause
the  workers' compensation board to impose, charge, raise, levy, collect
and apply the pledged assessments and other revenues, receipts, funds or
moneys pledged for the payment of debt service requirements in each year
in which bonds are outstanding, and (iii) further, that  the  state  (A)
will  not  materially  limit or alter the duties imposed on the workers'
compensation board, the authority and other officers of the state by the
special disability fund financing agreement  and  the  bond  proceedings
authorizing the issuance of bonds with respect to application of pledged
assessments or other revenues, receipts, funds or moneys pledged for the
payment  of  debt  service  requirements,  (B) will not issue any bonds,
notes or other evidences of indebtedness, other than the  bonds,  having
any  rights arising out of paragraph (h) of subdivision eight of section
fifteen of the workers' compensation law or this section or  secured  by
any  pledge  of or other lien or charge on the pledged revenues or other
receipts, funds or moneys  pledged  for  the  payment  of  debt  service
requirements,  (C)  will  not  create or cause to be created any lien or
charge on the pledged revenues, other than  a  lien  or  pledge  created
thereon  pursuant  to  said sections, (D) will carry out and perform, or
cause to be carried out and performed, each and every promise, covenant,
agreement or contract made or entered into  by  the  special  disability
fund  financing  agreement,  by  the authority or on its behalf with the
bond owners of any bonds, (E) will not in any  way  impair  the  rights,
exemptions  or  remedies  of  the  bond  owners, and (F) will not limit,
modify, rescind, repeal or otherwise alter the rights or obligations  of
the  appropriate  officers  of  the state to impose, maintain, charge or
collect the assessments and other revenues or receipts constituting  the
pledged  revenues  as may be necessary to produce sufficient revenues to
fulfill the terms of the proceedings authorizing  the  issuance  of  the
bonds,   including  pledged  revenue  coverage  requirements,  provided,
however, (i) the remedies available to the authority and the bondholders
for any breach of the pledges and agreements of the state set  forth  in
this  subclause  shall  be limited to injunctive relief, (ii) nothing in
this subdivision shall prevent the authority from issuing  evidences  of
indebtedness  (A)  which  are  secured by a pledge or lien which is, and
shall on the face thereof, be expressly subordinate and  junior  in  all
respects  to  every  lien  and  pledge  created  by  or pursuant to said
sections, or (B) which are secured by a pledge of or lien on  moneys  or
funds  derived on or after the date every pledge or lien thereon created
by or pursuant to said sections shall be discharged and  satisfied,  and
(iii)  nothing  in  this  subdivision  shall  preclude  the  state  from
exercising its power,  through  a  change  in  law,  to  limit,  modify,
rescind,  repeal  or  otherwise  alter  the  character  of  the  pledged
assessments or revenues or to substitute like or  different  sources  of
assessments,  taxes, fees, charges or other receipts as pledged revenues
if and when adequate provision shall be made by law for  the  protection
of  the  holders  of outstanding bonds pursuant to the proceedings under
which the bonds are issued, including changing or altering the method of
establishing the special assessments.
The authority is authorized to include this covenant of the state,  as
a  contract  of  the state, in any agreement with the owner of any bonds
issued  pursuant  to  this  section  and  in  any  credit  facility   or
reimbursement  agreement  with  respect  to  such bonds. Notwithstanding

these pledges and agreements by the state, the attorney general  may  in
his  or  her  discretion  enforce  any and all provisions related to the
special disability fund, without limitation.
(b)  Prior  to  the  date  which  is  one  year  and one day after the
authority no longer has  any  bonds  issued  pursuant  to  this  section
outstanding,  the  authority shall have no authority to file a voluntary
petition under chapter nine of  the  federal  bankruptcy  code  or  such
corresponding  chapter  or  sections  as  may,  from time to time, be in
effect, and neither any public officer nor any organization,  entity  or
other  person  shall  authorize  the  authority to be or become a debtor
under chapter nine or any successor or corresponding chapter or sections
during such period.  The state hereby covenants with the owners  of  the
bonds of the authority that the state will not limit or alter the denial
of authority under this subdivision during the period referred to in the
preceding sentence. The authority is authorized to include this covenant
of  the  state,  as  a  contract of the state, in any agreement with the
owner of any bonds issued pursuant to this section.
(c) To the extent deemed appropriate by the authority any  pledge  and
agreement  of  the  state  with respect to the bonds as provided in this
section may be extended to, and included in, any ancillary bond facility
as a pledge and agreement of  the  state  with  the  authority  and  the
benefited party.
11. The bonds of the authority are hereby made securities in which all
public  officers  and  bodies  of  this state and all municipalities and
political 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 in other obligations of
the state, may properly and legally invest funds, including capital,  in
their  control  or  belonging  to  them.  The bonds are also hereby made
securities which may be deposited with and may be received by all public
officers and bodies of  the  state  and  all  municipalities,  political
subdivisions  and  public  corporations  for  any  purpose for which the
deposit of bonds or other  obligations  of  the  state  is  now  or  may
hereafter be authorized.
12.  (a) An action against the authority for death, personal injury or
property damage or founded on tort shall not be commenced more than  one
year  and  ninety  days  after  the  cause  of action thereof shall have
accrued nor unless a notice of claim shall have been served on a  member
of  the  authority  or  officer  or  employee  thereof designated by the
authority  for  such  purpose,  within  the  time  limited  by,  and  in
compliance  with  the  requirements  of  section  fifty-e of the general
municipal law.
(b) The venue of every action,  suit  or  special  proceeding  brought
against  the  authority or concerning the validity of this section shall
be laid in the county of Albany.
(c) The bonds, and any obligation of the authority under any ancillary
bond facility, may contain a recital that they are issued  or  executed,
respectively,   pursuant   to  this  section,  which  recital  shall  be
conclusive  evidence  of  the  validity  of  the  bonds  and  any   such
obligation,  respectively,  and the regularity of the proceedings of the
authority relating thereto.
13. Any action or proceeding to which the authority or the  people  of
the  state  may  be  parties,  in  which  any  question arises as to the

validity of this section, shall be preferred over all other civil causes
of action or cases, except election causes of action or  cases,  in  all
courts  of  the state and shall be heard and determined in preference to
all  other  civil  business  pending  therein,  except  election causes,
irrespective of position on the calendar. The same preference  shall  be
granted  upon  application of the authority or its counsel in any action
or proceeding questioning the validity of  this  section  in  which  the
authority may be allowed to intervene.