New York Laws
Title 11 - Metropolitan Commuter Transportation Authority
1269 - Notes, Bonds and Other Obligations of the Authority.

(b) The authority shall have power, from time to time, to issue
renewal notes, to issue bonds to refund, redeem or otherwise pay,
including by purchase or tender, notes of the authority and its
subsidiary corporations, and New York city transit authority and its
subsidiary corporations and whenever it deems refunding, redemption or
payment expedient, to refund, redeem or otherwise pay, including by
purchase or tender, any bonds of the authority and its subsidiary
corporations, New York city transit authority and its subsidiary
corporations and Triborough bridge and tunnel authority by the issuance
of new bonds, whether the bonds to be refunded, redeemed or otherwise
paid have or have not matured, and to issue bonds partly for such
purpose and partly for any other purpose and to otherwise refund,
redeem, acquire by purchase or tender, or in any other way repay any
outstanding notes, bonds or other obligations of the authority, any of
its subsidiary corporations, New York city transit authority, any of its
subsidiary corporations and Triborough bridge and tunnel authority;
(c) Every issue of its notes, bonds or other obligations shall be
general obligations or special obligations. Every issue of general
obligations of the authority shall be payable out of any revenues or
monies of the authority, subject only to any agreements with the holders
of particular notes or bonds pledging any particular receipts or
revenues. Every issue of special obligations shall be payable out of any
revenues, receipts, monies or other assets of the authority and its
subsidiary corporations, the New York city transit authority and its
subsidiary corporations and the Triborough bridge and tunnel authority
identified for such purposes in accordance with agreements with the
holders of particular notes, bonds or other obligations. The authority
may issue transportation revenue special obligation bonds, notes or
other obligations as provided in section twelve hundred seventy-d of
this title;
1-a. Pension obligation bonds. The authority may from time to time
issue its bonds and notes in such principal amounts as, in the opinion
of the authority, shall be necessary to finance the unfunded pension
fund liabilities of the authority, its affiliates and subsidiaries,

provided, however, that in no event shall the cumulative amounts of
bonds and notes issued pursuant to the authority of this subdivision
exceed one billion two hundred million dollars or sixty percent of such
unfunded pension fund liabilities, whichever is less, and provided,
further, that no bonds shall be issued under this subdivision for a term
longer than twenty years. The authority may not issue bonds or notes in
any twelve month period in a cumulative principal amount in excess of
forty percent of the total amount permitted to be issued under this
subdivision. Prior to the issuance of any bonds or notes, the authority
shall make a finding that such issue is expected to result, on a present
value basis, in a lower effective cost to the authority than funding the
unfunded pension fund liability solely through the payment of annual
amounts to the pension fund, assuming that the principal component of
the unfunded liability will be amortized over the same number of years
as the term of the bonds or notes and that the interest payable thereon
is the actuarial rate of interest determined by the actuary for the
pension fund at the time of the issuance of such bonds or notes. The
aggregate principal amount of bonds and notes issued for such purposes
may be increased to fund costs of issuance and may reasonably required
debt service of other reserve funds. Bonds and notes may be issued to
refund or otherwise repay bonds or notes theretofore issued for such
purposes; provided, however, that upon any such refunding or repayment
(including for purpose of such calculation the principal amount of the
refunding bonds or notes then to be issued and excluding the principal
amount of the bonds or notes so to be refunded or repaid and also
excluding any amounts used to pay costs of issuance and reasonably
required debt service or other reserve funds) the present value of the
aggregate debt service of the refunding or repayment bonds or notes to
be issued shall not exceed the present value of the aggregate debt
service of the bonds or notes so to be refunded or repaid. For purposes
of the preceding sentence, the present values of the aggregate debt
service of the refunding or repayment bonds or notes and of the
aggregate debt service of the bonds or notes so to be refunded or repaid
shall be calculated by utilizing the effective interest rate of the
refunding or repayment bonds or notes, which shall be that rate arrived
at by doubling the semi-annual interest rate (compounded semi-annually)
necessary to discount the debt service payments on the refunding or
repayment bonds or notes from the payment dates thereof to the date of
issue of the refunding or repayment bonds or notes and to the price bid
including estimated accrued interest or proceeds received by the
authority including estimated accrued interest from the sale thereof.
Debt service on the bonds or notes shall be structured so that the
economic benefits thereof shall be relatively uniform for each full year
throughout the term of the bonds or notes. Beginning with the date of
first issuance of bonds under this section, the authority and its
subsidiaries shall make annual payments into the pension fund in amounts
at least equal to the current pension contribution liability applicable
to such year. The net proceeds of the bonds or notes intended to be
invested in non-debt securities may be invested by the recipient pension
fund in a fiscally prudent manner in securities consistent with any
trust indentures and all applicable state and federal law over a
reasonable period of time not less than 30 days following the issuance
of the bonds or notes. The operating budget savings associated with the
issuance of pension obligation bonds during the period from April first,
two thousand five, through March thirty-first, two thousand ten,
pursuant to this subdivision shall be dedicated to reducing service
eliminations projected to occur within that period.

2. The notes, bonds and other obligations shall be authorized by
resolution approved by not less than a majority vote of the whole number
of members of the authority then in office, except that in the event of
a tie vote the chairman shall cast one additional vote. Such notes,
bonds and other obligations 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 five 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, bonds and other obligations shall bear interest at
such rate or 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, bonds and other obligations of the
authority may be sold by the authority, at public or private sale, at
such price or prices as the authority shall determine. No notes or bonds
of the authority may be sold by the authority 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, bonds or any
issue thereof, or any other obligations of the authority, 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 revenues of the authority or of
any of its subsidiary corporations or New York city transit authority or
any of its subsidiary corporations or Triborough bridge and tunnel
authority to secure the payment of the notes or bonds or of any issue
thereof, or any other obligations of the authority, subject to such
applicable agreements with bondholders, noteholders, or holders of other
obligations of the authority, the New York city transit authority and
its subsidiary corporations, and Triborough bridge and tunnel authority
as may then exist;
(b) pledging all or any part of the assets of the authority or of any
of its subsidiary corporations or New York city transit authority or any
of its subsidiary corporations or Triborough bridge and tunnel authority
to secure the payment of the notes or bonds or of any issue of notes or
bonds, or any other obligations of the authority, subject to such
agreements with noteholders, bondholders, or holders of other
obligations of the authority, the New York city transit authority and
its subsidiary corporations, and Triborough bridge and tunnel authority
as may then exist;
(c) the use and disposition of revenues, including fares, tolls,
rentals, rates, charges and other fees, made or received by the
authority, any of its subsidiary corporations, New York city transit
authority or any of its subsidiary corporations, or Triborough bridge
and tunnel authority;
(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,
bonds or other obligations of the authority may be applied and pledging
such proceeds to secure the payment of the notes or bonds or of any
issue thereof or of other obligations;
(f) limitations on the issuance of additional notes, bonds or other
obligations of the authority; the terms upon which additional notes,
bonds or other obligations of the authority may be issued and secured;

the refunding of outstanding or other notes, bonds or other obligations
of the authority;
(g) the procedure, if any, by which the terms of any contract with
noteholders, bondholders, or holders of other obligations of the
authority, may be amended or abrogated, the amount of notes, bonds or
other obligations of the authority 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
authority or any of its subsidiary corporations or New York city transit
authority or any of its subsidiary corporations or Triborough bridge and
tunnel authority for operating, administrative or other expenses of the
authority or any of its subsidiary corporations or New York city transit
authority or any of its subsidiary corporations or Triborough bridge and
tunnel authority;
(i) vesting in a trustee or trustees such property, rights, powers and
duties in trust as the authority may determine, which may include any or
all of the rights, powers and duties of the trustee appointed by the
bondholders, noteholders or holders of other obligations of the
authority pursuant to this title, and limiting or abrogating the right
of the bondholders, noteholders or holders of other obligations of the
authority to appoint a trustee under this article or limiting the
rights, powers and duties of such trustee;
(j) any other matters, of like or different character, which in any
way affect the security or protection of the notes, bonds or other
obligations of the authority.
4. In addition to the powers herein conferred upon the authority to
secure its notes, bonds and other obligations, the authority shall have
power in connection with the issuance of notes, bonds and other
obligations to enter into such agreements as the authority may deem
necessary, convenient or desirable concerning the use or disposition of
the monies or property of any of the authority, its subsidiary
corporations, New York city transit authority, or any of its subsidiary
corporations, or Triborough bridge and tunnel authority, including the
mortgaging of any such property and the entrusting, pledging or creation
of any other security interest in any such monies or property and the
doing of any act (including refraining from doing any act) which the
authority would have the right to do in the absence of such agreements.
The authority shall have power to enter into amendments of any such
agreements within the powers granted to the authority by this title and
to perform such agreements. The provisions of any such agreements may be
made a part of the contract with the holders of the notes, bonds and
other obligations of the authority.
5. It is the intention hereof that any pledge, mortgage or security
instrument made by the authority shall be valid and binding from the
time when the pledge, mortgage or security instrument is made; that the
monies or property so pledged, mortgaged and entrusted and thereafter
received by the authority, or any of its subsidiary corporations shall
immediately be subject to the lien of such pledge, mortgage or security
instrument without any physical delivery thereof or further act; and
that the lien of any such pledge, mortgage or security instrument shall
be valid and binding as against all parties having claims of any kind in
tort, contract or otherwise against the authority, or any of its
subsidiary corporations, irrespective of whether such parties have
notice thereof. Neither the resolution nor any mortgage, security
instrument or other instrument by which a pledge, mortgage lien or other
security is created need be recorded or filed and neither the authority
nor, any of its subsidiary corporations shall be required to comply with
any of the provisions of the uniform commercial code.

6. Neither the members of the authority, the New York city transit
authority or the Triborough bridge and tunnel authority nor any person
executing the notes, bonds or other obligations shall be liable
personally on the notes, bonds or other obligations or be subject to any
personal liability or accountability by reason of the issuance thereof.
7. The authority, subject to such agreements with the holders of
notes, bonds or other obligations as may then exist, shall have power
out of any funds available therefor to purchase notes, bonds or other
obligations of the authority. The authority may hold, cancel or sell
such bonds, notes and other obligations, subject to and in accordance
with agreements with such holders.
8. Neither the state nor the city of New York shall be liable on
notes, bonds or other obligations of the authority and such notes, bonds
and other obligations shall not be a debt of the state or the city of
New York, and such notes, bonds and other obligations shall contain on
the face thereof, or in an equally prominent place, a statement to such
effect.
9. So long as the authority has outstanding any bonds, notes or other
obligations issued pursuant to this section or any bonds, notes or other
obligations issued or incurred pursuant to section twelve hundred
sixty-six-c of this title, none of the authority or any of its
subsidiary corporations, New York city transit authority or any of its
subsidiary corporations, or Triborough bridge and tunnel authority shall
have the authority to file a voluntary petition under chapter nine of
the federal bankruptcy code or such corresponding chapter, chapters 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 or any of its subsidiary corporations, New York city transit
authority or any of its subsidiary corporations, or Triborough bridge
and tunnel authority to be or become a debtor under chapter nine or said
corresponding chapter, chapters or sections during any such period.
10. The term "monies" as used in this section shall include, but not
be limited to, all operating subsidies provided by (i) any public
benefit corporation, including without limitation transfers of operating
surplus by Triborough bridge and tunnel authority pursuant to section
twelve hundred nineteen-a of this article, or (ii) any governmental
entity, federal, state or local.
11. Any resolution or agreement authorizing the issuance of bonds,
notes or other obligations pursuant to this section may, in addition,
authorize and provide for the issuance of lease obligations of the
authority which may be issued for the purposes and on the terms and
conditions under which the bonds, notes and other obligations authorized
under this section may be issued, and may be secured in the same manner
as such bonds, notes and other obligations, and which resolution with
respect to such lease obligations, may contain such other provisions
applicable to bonds, notes and other obligations not inconsistent with
the provisions of this section, as the authority may determine.
12. The aggregate principal amount of bonds, notes or other
obligations issued after the first day of January, nineteen hundred
ninety-three by the authority, the Triborough bridge and tunnel
authority and the New York city transit authority to fund projects
contained in capital program plans approved pursuant to section twelve
hundred sixty-nine-b of this title for the period nineteen hundred
ninety-two through two thousand twenty-four shall not exceed ninety
billion one hundred million dollars. Such aggregate principal amount of
bonds, notes or other obligations or the expenditure thereof shall not
be subject to any limitation contained in any other provision of law on
the principal amount of bonds, notes or other obligations or the

expenditure thereof applicable to the authority, the Triborough bridge
and tunnel authority or the New York city transit authority. The
aggregate limitation established by this subdivision shall not include
(i) obligations issued to refund, redeem or otherwise repay, including
by purchase or tender, obligations theretofore issued either by the
issuer of such refunding obligations or by the authority, the New York
city transit authority or the Triborough bridge and tunnel authority,
(ii) obligations issued to fund any debt service or other reserve funds
for such obligations, (iii) obligations issued or incurred to fund the
costs of issuance, the payment of amounts required under bond and note
facilities, federal or other governmental loans, security or credit
arrangements or other agreements related thereto and the payment of
other financing, original issue premiums and related costs associated
with such obligations, (iv) an amount equal to any original issue
discount from the principal amount of such obligations or to fund
capitalized interest, (v) obligations incurred pursuant to section
twelve hundred seven-m of this article, (vi) obligations incurred to
fund the acquisition of certain buses for the New York city transit
authority as identified in a capital program plan approved pursuant to
chapter fifty-three of the laws of nineteen hundred ninety-two, (vii)
obligations incurred in connection with the leasing, selling or
transferring of equipment, and (viii) bond anticipation notes or other
obligations payable solely from the proceeds of other bonds, notes or
other obligations which would be included in the aggregate principal
amount specified in the first sentence of this subdivision, whether or
not additionally secured by revenues of the authority, or any of its
subsidiary corporations, New York city transit authority, or any of its
subsidiary corporations, or Triborough bridge and tunnel authority.

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