Create Eastside Finance Corporation

Section 1. Article 10-D of the public authorities law is amended by adding a new title 1-A to read as follows:

TITLE 1-A

NEW YORK CITY EASTSIDE FINANCE CORPORATION ACT Section 3700. Short title.

3701. Definitions.

3702. New York city eastside finance corporation.

3703. Administration of the corporation.

3704. General powers of the corporation.

3705. Revenues of the corporation.

3706. Moneys of the corporation.

3707. Bonds of the corporation.

3708. City liable on bonds.

3709. Auditing and reporting requirements.

3710. Assistance to the corporation.

§ 3700. Short title. This title shall be known and may be cited as the "New York City eastside finance corporation act".

§ 3701. Definitions. For the purposes of this title, unless the context otherwise requires:

1. "Base year" means the two thousand seventeen calendar year.

2. "Bonds" means bonds, notes and other evidences of indebtedness, issued by the corporation.

3. "City" means the city of New York.

4. "Corporation" means the public benefit corporation created by this title.

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD07420-01-7

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5. "Costs" means costs providing for the construction, reconstruction, acquisition or installation of physical public betterments or improvements, or the costs of any preliminary studies, surveys, maps, plans, estimates and hearings, or incidental costs, including, but not limited to, legal fees, printing or engraving, publication of notices, taking of title, apportionment of costs, and interest during construction.

6. "Eastside district" means the territory in the borough of Manhattan bounded and described as follows: the district shall be bounded in the west by Fifth Avenue, in the north by East 125th Street, in the east by the FDR Drive, and in the south by East 42nd Street.

7. "MTA" means the metropolitan transportation authority created pursuant to title eleven of article five of this chapter.

8. "Revenues" means the tax revenues and all aid, rents, fees, charges, payments and the income and receipts paid or payable to the corporation or a director for the account of the corporation.

9. "State" means the state of New York.

§ 3702. New York city eastside finance corporation. 1. The city shall establish a local development corporation pursuant to section fourteen hundred eleven of the not-for-profit corporation law, to be called the "New York city eastside finance corporation". The corporation shall be a corporate governmental agency constituting a public benefit corporation and an instrumentality of the state.

2. The purpose of the corporation shall be to lessen the burdens of government for the state and city of New York; to act in the public interest through the financing of capital projects of the city and of the New York city transit authority, and of capital projects or elements related to the Second Avenue subway; and to provide for additional and maximum employment.

3. The corporation shall continue until six months after all its liabilities have been met or otherwise discharged. Upon the termination of the existence of the corporation, all of its rights and property shall pass to and be vested in the city.

§ 3703. Administration of the corporation. 1. The corporation shall be administered by seven directors, consisting of:

(a) the director of the division of budget of the state of New York;

(b) the director of management and budget of the city of New York;

(c) one appointee by the governor of the state of New York;

(d) one appointee by the speaker of the New York city council;

(e) two appointees by the mayor of the city of New York; and

(f) one appointee by the chief executive officer of the MTA.

2. The director of management and budget of the city of New York shall serve as chairperson of the corporation. The chairperson or his or her designee shall preside over all meetings of the directors and shall have such other duties as may be fixed by the directors.

3. Three directors shall constitute a quorum for the transaction of any business or the exercise of any power of the corporation. No action shall be taken by the corporation except pursuant to a favorable vote of at least three directors present at a meeting at which such action is taken. Any director may, by written instrument, filed with and approved as to form by the corporation, designate an alternate or alternates to perform, in the absence of such director, his or her duties under this title. The term "director" as used in this title shall include such alternates, except that no alternate may designate an alternate pursuant to this paragraph. The designation of such alternates shall be deemed temporary only and shall not affect the civil service or retirement rights of any persons so designated.

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4. The corporation shall appoint a treasurer and may appoint such other officers as it may require and prescribe their duties.

§ 3704. General powers of the corporation. In addition to any specific powers conferred to the corporation pursuant to this title, the corporation shall have all the powers set forth in paragraph (c) of section fourteen hundred eleven of the not-for-profit corporation law, subject only to agreements with bondholders.

§ 3705. Revenues of the corporation. 1. The revenues of the corporation shall be generated as follows: the amount equal to the difference of the amount of the real property tax received or collected by the city pursuant to title three of article nine of the real property tax law in the base year and the real property tax received or collected by the city in each succeeding calendar year on taxable real property located within the eastside district.

2. The city shall make an annual appropriation to the corporation of the amount described in subdivision one of this section.

3. (a) The revenues of the corporation may only be used for the payment of debt service, payments to reserve funds, if applicable, and for operating or administrative expenses of the corporation.

(b) If there are insufficient funds paid to the corporation in the first five years of the formation of the corporation to pay the debt service on its bonds, the city shall be responsible for and liable to pay the debt service of the corporation. The corporation shall enter into an agreement with the city to reimburse the city for any payments made on behalf of the corporation pursuant to this paragraph.

§ 3706. Moneys of the corporation. 1. Subject to the provisions of this title, the directors of the corporation shall receive, accept, invest, administer, expend and disburse for its corporate purposes all money of the corporation from whatever sources derived including: (a) the revenues described in section thirty-seven hundred five of this title; (b) the proceeds of bonds; and (c) any other appropriations, grants, payments or gifts to the corporation from any other source.

2. All moneys of the corporation from whatever source derived shall be paid to the treasurer of the corporation and shall be deposited forthwith in a bank or trust company in the state designated by the board of directors. The moneys in such accounts shall be paid out by check signed by the treasurer upon requisition by the board of directors or of such other person or persons as the board may authorize to make such requisitions. All deposits of corporation money shall be secured by obligations of the United States or of the state or of the city at a market value equal at all times to the amount of the deposit, and all banks and trust companies are authorized to give such security for such deposits.

3. The corporation shall have the power, notwithstanding the provisions of this section, to contract with the holders of any of its bonds as to the custody, collection, securing, investment and payment of any money of the corporation or any money held in trust or otherwise for the payment of bonds or in any way to secure bonds, and to carry out any such contract notwithstanding that such contract may be inconsistent with the other provisions of this title. Money held in trust or otherwise for the payment of bonds or in any way to secure bonds and deposits of such money may be secured in the same manner as money of the corporation, and all banks and trust companies are authorized to give such security for such deposits.

4. Subject to the provisions of any contract with bondholders: (a) the money of the corporation shall be paid to the corporation and shall not be commingled with any other money, and (b) all money received by the

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corporation which, together with other money of the corporation available for the operating expenses of the corporation, the payment of debt service and payments to reserve funds, exceeds the amount required for such purposes shall be transferred to the city.

§ 3707. Bonds of the corporation. 1. (a) The corporation shall have the power and is hereby authorized to issue bonds, in conformity with applicable provisions of the uniform commercial code, in such principal amounts as can be supported by the revenues of the corporation. The corporation shall have the power from time to time to refund any bonds of the corporation by the issuance of new bonds whether the bonds to be refunded have or have not matured, and may issue bonds partly to refund bonds of the corporation then outstanding. Bonds issued by the corporation shall be payable solely out of particular revenues or other moneys of the corporation as may be designated in the proceedings of the corporation under which the bonds shall be authorized to be issued, subject to any agreements entered into between the corporation and the city, and subject to any agreements with the holders of outstanding bonds pledging any particular revenues or moneys.

(b) The proceeds from any bonds issued by the corporation shall be distributed as follows: fifty percent of the proceeds to the city general fund to pay for capital projects contained in the city's most recent capital plan; twenty-five percent to the New York city transit authority to pay for costs of its facilities, supplies, material or equipment; and twenty-five percent to MTA to pay for costs associated with the completion of the Second Avenue subway line.

2. The corporation is authorized to obtain insurance, letters of credit and other credit or liquidity facilities related to bonds in accordance with paragraph a and paragraphs c through g of section 168.00 of the local finance law, as amended from time to time; provided, however, that the board of directors of the corporation shall make the determination as to "financially responsible parties" required under the local finance law.

3. The corporation: (a) shall amortize its serial and term bonds in accordance with sections 11.00, 21.00 and 57.00 of the local finance law and its bond anticipation notes in accordance with section 23.00 of the local finance law, as amended from time to time, (b) shall establish provisions relating to redemption of its bonds that conform with section 53.00 of the local finance law, as amended from time to time, (c) may issue bonds with variable rates of interest, and enter into agreements related thereto, subject to the limitations prescribed in paragraphs a and c of section 54.90 of the local finance law, other than the limitation therein on the total principal amount of such variable rate bonds, and (d) shall not issue refunding bonds without meeting the standards of subparagraph (a) or (b) of subdivision two of paragraph b of section 90.10 of the local finance law. In addition, except as provided in this title, bonds of the corporation shall be subject to all other provisions of the local finance law, as amended from time to time, applicable to bonds of the city of New York, except where application of such law to bonds of the corporation would be inappropriate.

4. The directors may delegate to the chairperson of the corporation the power to set the final terms of bonds.

5. Any resolution or resolutions authorizing bonds or any issue of bonds may contain provisions which may be a part of the contract with the holders of the bonds thereby authorized as to:

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(a) pledging all or part of its revenues, together with any other moneys, securities or contracts, to secure the payment of the bonds, subject to such agreements with bondholders as may then exist;

(b) the setting aside of reserves and the creation of sinking funds and the regulation and disposition thereof;

(c) limitations on the purpose to which the proceeds from the sale of bonds may be applied;

(d) limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured and the refunding of bonds;

(e) the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, including the proportion of bondholders which must consent thereto and the manner in which such consent may be given;