S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5604

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            February 24, 2011
                               ___________

Introduced  by  M.  of  A.  BRENNAN, ORTIZ, PHEFFER, ROSENTHAL, MILLMAN,
  STEVENSON -- Multi-Sponsored by -- M. of A. COLTON, GOTTFRIED, HOOPER,
  JACOBS, McENENY -- read once and referred to the Committee on Energy

AN ACT to amend the public authorities law, in relation to  cogeneration
  among companies organized pursuant to the private housing finance law

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 1005 of the public authorities law  is  amended  by
adding a new subdivision 10-b to read as follows:
  10-B.  A.  TO  COOPERATE WITH AND, WHERE THE TRUSTEES DEEM IT FEASIBLE
AND ADVISABLE, ENTER INTO CONTRACTS  WITH  ANY  MUTUAL  COMPANY,  MUTUAL
HOUSING COMPANY, OR MUTUAL REDEVELOPMENT COMPANY, AS DEFINED IN SUBDIVI-
SION  FOURTEEN-A  OF  SECTION TWO OF THE PRIVATE HOUSING FINANCE LAW, OR
ANY NON-PROFIT COMPANY ORGANIZED PURSUANT TO ARTICLE TWO OF THE  PRIVATE
HOUSING   FINANCE   LAW  AND  THE  NOT-FOR-PROFIT  CORPORATION  LAW,  TO
CONSTRUCT, IMPROVE, REHABILITATE, FINANCE, LEASE, OWN AND/OR  OPERATE  A
COGENERATION  FACILITY AS DEFINED IN SUBDIVISION TWO-A OF SECTION TWO OF
THE PUBLIC SERVICE LAW, EXCEPT THAT IN NO EVENT MAY  THE  AUTHORITY  OWN
TITLE  TO  MORE  THAN  FIFTY PERCENT OF SUCH A FACILITY, AND IN NO EVENT
SHALL THE AUTHORITY FINANCE MORE THAN NINETY-FIVE PERCENT OF  THE  TOTAL
COST  OF  THE  COGENERATION  FACILITY. THE AUTHORITY AND THE COMPANY MAY
FURTHER CONTRACT FOR THE DISPOSITION OF THE ELECTRIC AND THERMAL  OUTPUT
OF  SUCH  FACILITY.  THE AUTHORITY MAY LEND THE PROCEEDS OF ANY NOTES OR
BONDS ISSUED FOR THE PURPOSES OF THIS  SUBDIVISION,  IN  EXCESS  OF  ITS
OWNERSHIP  INTEREST  IN  THE COGENERATION FACILITY, TO SUCH COMPANY, AND
TAKE A SECURITY INTEREST IN ANY STRUCTURES AND EQUIPMENT, AND THE OUTPUT
THEREFROM, OF THE COGENERATION FACILITY. IN NO EVENT SHALL THE  LIEN  OF
SUCH  A  SECURITY  INTEREST  TAKE PRIORITY OVER THE LIEN OF ANY MORTGAGE
UPON THE REAL PROPERTY OF SUCH COMPANY.
  B. THE AUTHORITY IS FURTHER AUTHORIZED AND DIRECTED, WHERE  THE  TRUS-
TEES  DEEM  IT  FEASIBLE AND ADVISABLE AND CONSISTENT WITH THE EXEMPTION

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00979-01-1
              

A. 5604                             2

FROM TAXATION OF AUTHORITY BONDS PURSUANT TO SECTION ONE  HUNDRED  THREE
OF  THE INTERNAL REVENUE CODE, TO CONTRACT WITH ANY OTHER LIMITED PROFIT
HOUSING COMPANY ORGANIZED PURSUANT TO ARTICLE TWO OF THE PRIVATE HOUSING
FINANCE LAW, ANY LIMITED DIVIDEND HOUSING COMPANY  ORGANIZED PURSUANT TO
ARTICLE  FOUR  OF  THE  PRIVATE  HOUSING  FINANCE LAW, ANY REDEVELOPMENT
COMPANY ORGANIZED PURSUANT  TO  ARTICLE  FIVE  OF  THE  PRIVATE  HOUSING
FINANCE  LAW  AND  ANY  PROJECT ORGANIZED PURSUANT TO THE NEW YORK STATE
URBAN DEVELOPMENT CORPORATION ACT IN ORDER TO CONSTRUCT, IMPROVE,  REHA-
BILITATE,  FINANCE, LEASE, OWN AND/OR OPERATE A COGENERATION FACILITY AS
DEFINED IN SUBDIVISION TWO-A OF SECTION TWO OF THE PUBLIC  SERVICE  LAW,
EXCEPT  THAT  IN NO EVENT MAY THE AUTHORITY OWN TITLE TO MORE THAN FIFTY
PERCENT OF SUCH A FACILITY, AND IN NO EVENT SHALL THE AUTHORITY  FINANCE
MORE  THAN  NINETY-FIVE  PERCENT  OF  THE TOTAL COST OF THE COGENERATION
FACILITY. THE AUTHORITY AND THE COMPANY MAY  FURTHER  CONTRACT  FOR  THE
DISPOSITION  OF  THE  ELECTRIC AND THERMAL OUTPUT OF SUCH FACILITY.  THE
AUTHORITY MAY LEND THE PROCEEDS OF ANY NOTES OR  BONDS  ISSUED  FOR  THE
PURPOSES OF THIS SUBDIVISION, IN EXCESS OF ITS OWNERSHIP INTEREST IN THE
COGENERATION  FACILITY, TO SUCH COMPANY, AND TAKE A SECURITY INTEREST IN
ANY STRUCTURES AND EQUIPMENT, AND THE OUTPUT THEREFROM, OF THE COGENERA-
TION FACILITY. IN NO EVENT SHALL THE LIEN OF SUCH  A  SECURITY  INTEREST
TAKE  PRIORITY  OVER  THE LIEN OF ANY MORTGAGE UPON THE REAL PROPERTY OF
SUCH COMPANY.
  C. THE AUTHORITY MAY COOPERATE WITH AND, WHERE THE  TRUSTEES  DEEM  IT
FEASIBLE  AND  ADVISABLE,  ENTER  INTO CONTRACTS WITH THE NEW YORK STATE
HOUSING FINANCE AGENCY AND/OR THE  DIVISION  OF  HOUSING  AND  COMMUNITY
RENEWAL, WITH RESPECT TO STATE AIDED PROJECTS, AND THE SUPERVISING AGEN-
CY,  WITH RESPECT TO MUNICIPALLY AIDED PROJECTS, REGARDING THE PLANNING,
SITING, DEVELOPMENT, CONSTRUCTION,  OWNERSHIP,  LEASING,  FINANCING  AND
OPERATION OF ANY COGENERATION FACILITY BY ANY OF THE COMPANIES DESCRIBED
IN PARAGRAPHS A AND B OF THIS SUBDIVISION.
  D. THE AUTHORITY IS FURTHER AUTHORIZED AND, WHERE THE TRUSTEES DEEM IT
FEASIBLE  AND  ADVISABLE,  DIRECTED  TO  ENTER  INTO  CONTRACTS WITH ANY
PERSON, PARTNERSHIP, ASSOCIATION OR CORPORATION, TO CONSTRUCT, REHABILI-
TATE, FINANCE, LEASE, OWN AND/OR OPERATE A  COGENERATION  FACILITY,  FOR
THE  BENEFIT  OF  ANY  COMPANY  DESCRIBED  IN PARAGRAPHS A AND B OF THIS
SUBDIVISION, EXCEPT THAT IN NO CASE SHALL THE  AUTHORITY  OWN  TITLE  TO
MORE THAN FIFTY PERCENT OF SUCH FACILITY.
  E.  WHERE  THE AUTHORITY AND THE HOUSING COMPANY, OR THE AUTHORITY AND
ANY STATE AGENCY DESCRIBED IN PARAGRAPH C  OF  THIS  SUBDIVISION,  ENTER
INTO  CONTRACTUAL  ARRANGEMENTS  PURSUANT TO PARAGRAPHS A, B, C AND D OF
THIS SUBDIVISION, THE AUTHORITY MAY FURTHER CONTRACT TO PROVIDE STANDBY,
BREAKDOWN OR SUPPLEMENTAL POWER AND SELL AND/OR PURCHASE EXCESS ELECTRIC
ENERGY TO OR FROM  SUCH  COGENERATION  FACILITIES.  THE  AUTHORITY,  THE
COMPANY  OR  ANY  PERSON  MAY  FURTHER CONTRACT TO SELL EXCESS ENERGY OR
CAPACITY TO ANY LOCAL UTILITY.
  (1) THE  RATES  TO  BE  CHARGED  THE  COGENERATION  FACILITY  FOR  THE
PROVISION OF STANDBY, BREAKDOWN OR SUPPLEMENTARY SERVICE SHALL BE:
  (I) JUST AND REASONABLE AND IN THE PUBLIC INTEREST; AND
  (II) NON-DISCRIMINATORY TOWARD THE COGENERATION FACILITY.
  (2)  CHARGES  FOR  ANY  TRANSMISSION  AND/OR  INTERCONNECTION SERVICES
PROVIDED BY ANY LOCAL UTILITY SHALL BE APPROVED BY  THE  AUTHORITY,  AND
SHALL  NOT  EXCEED  THE  TRANSMISSION,  DISTRIBUTION AND INTERCONNECTION
CHARGES DETERMINED TO BE PROPER FOR SUCH LOCAL  UTILITY  BY  THE  PUBLIC
SERVICE  COMMISSION  PURSUANT TO APPLICABLE PROVISIONS OF TITLE SIXTEEN,
SECTION 824A-3 OF THE UNITED STATES CODE, SECTION TWO HUNDRED TEN OF THE
PUBLIC   UTILITY   REGULATORY   POLICIES   ACT   OF   NINETEEN   HUNDRED

A. 5604                             3

SEVENTY-EIGHT,  AS  IT  MAY  BE  AMENDED  FROM TIME TO TIME, AND SECTION
SIXTY-SIX-C OF THE PUBLIC SERVICE LAW.
  (3)  THE  RATES  TO  BE  CHARGED  BY THE COGENERATION FACILITY FOR THE
PURCHASE OF ELECTRIC ENERGY OR CAPACITY OR BOTH, SHALL BE:
  (I) JUST AND REASONABLE IN THE PUBLIC INTEREST; AND
  (II) NOT IN EXCESS OF THE INCREMENTAL COST TO  THE  AUTHORITY  OF  THE
ELECTRIC ENERGY WHICH, BUT FOR THE PURCHASE FROM THE COGENERATION FACIL-
ITY, THE AUTHORITY WOULD GENERATE OR PURCHASE FROM ANOTHER SOURCE; PLUS
  (III)  A  FAIR  AND  REASONABLE  CHARGE FOR ANY SERVICES PROVIDED BY A
LOCAL UTILITY, IN ACCORDANCE WITH SUBPARAGRAPH TWO OF THIS PARAGRAPH.
  (4) (I) WHERE ANY LOCAL UTILITY SHALL GIVE TO  THE  AUTHORITY  OR  THE
HOUSING  COMPANY  ACTUAL OR CONSTRUCTIVE NOTICE OF ITS REFUSAL TO INTER-
CONNECT WITH A COGENERATION  FACILITY,  THE  AUTHORITY  OR  THE  HOUSING
PROJECT  SHALL APPLY TO THE PUBLIC SERVICE COMMISSION FOR ORDERS REQUIR-
ING SUCH INTERCONNECTION PURSUANT TO SECTION SIXTY-SIX-C OF  THE  PUBLIC
SERVICE LAW.
  (II)  WHERE ANY LOCAL UTILITY SHALL GIVE TO THE AUTHORITY OR THE HOUS-
ING COMPANY ACTUAL OR CONSTRUCTIVE NOTICE OF ITS REFUSAL TO WHEEL  ELEC-
TRIC  ENERGY  BETWEEN  THE  AUTHORITY AND THE COGENERATION FACILITY, THE
AUTHORITY OR THE HOUSING COMPANY  SHALL  APPLY  TO  THE  PUBLIC  SERVICE
COMMISSION  OR  TO  THE  FEDERAL ENERGY REGULATORY COMMISSION FOR ORDERS
REQUIRING WHEELING PURSUANT TO SECTIONS TWO  HUNDRED  TWO,  TWO  HUNDRED
THREE AND TWO HUNDRED FOUR OF THE PUBLIC UTILITY REGULATORY POLICIES ACT
OF  NINETEEN  HUNDRED  SEVENTY-EIGHT, TITLE SIXTEEN, SECTIONS 824I, 824J
AND 824K OF THE UNITED STATES CODE, AS THEY MAY BE AMENDED FROM TIME  TO
TIME.
  F.  THE  AUTHORITY  AND  THE SUPERVISING AGENCY OF ANY HOUSING COMPANY
DESCRIBED IN PARAGRAPHS A AND  B  OF  THIS  SUBDIVISION  SHALL  ANNUALLY
DETERMINE THE DIFFERENCE IN COST TO THE HOUSING COMPANY OF THE ELECTRIC-
ITY  AND  THERMAL  ENERGY  PROVIDED BY THE COGENERATION FACILITY AND THE
PURCHASE OF AN EQUIVALENT AMOUNT OF ELECTRICITY AND THERMAL  ENERGY.  TO
THE  EXTENT  THAT  A COGENERATION FACILITY PROVIDES LOWER-COST ENERGY TO
THE HOUSING COMPANY, THE AUTHORITY  AND  THE  SUPERVISING  AGENCY  SHALL
REQUIRE  THAT  TWENTY-FIVE  PERCENT  OF ANY COST SAVINGS BE APPLIED TO A
REDUCTION IN EQUAL PROPORTIONS OF  THE  SUM  TOTAL  OF  ARREARS  OF  ANY
INDEBTEDNESS  SECURED  BY  A MORTGAGE LIEN UPON THE REAL PROPERTY OF THE
HOUSING COMPANY AND ARREARS OF REAL PROPERTY TAXES OF SUCH COMPANY.
  S 2. Paragraph (i) of subdivision 6 of  section  1010  of  the  public
authorities  law,  as  amended  by  chapter  552 of the laws of 1962, is
amended and seven new paragraphs (j), (k), (l), (m), (n),  (o)  and  (p)
are added to read as follows:
  (i)  defining  the  acts  or omissions to act which shall constitute a
default in the duties of the authority to holders of its obligations and
providing the rights and remedies of such holders  in  the  event  of  a
default[.];
  (J)  IN  CARRYING OUT THE PURPOSES OF SUBDIVISION TEN-B OF SECTION ONE
THOUSAND FIVE OF THIS TITLE, THE AUTHORITY SHALL CREATE A SEPARATE FUND,
TO BE KNOWN AS THE HOUSING COGENERATION FACILITIES CAPITAL RESERVE FUND,
AND SHALL PAY INTO SUCH FUND (1) ANY MONIES APPROPRIATED  BY  THE  STATE
FOR THE PURPOSES OF SUCH FUND, WHICH MONIES SHALL BE TREATED AS ADVANCES
TO  THE  AUTHORITY  SUBJECT  TO THE APPLICABLE PROVISIONS OF SECTION ONE
THOUSAND THIRTEEN OF THIS TITLE, (2) ANY PROCEEDS OF THE SALE  OF  NOTES
OR  BONDS  FOR THE PURPOSES OF SUBDIVISION TEN-B OF SECTION ONE THOUSAND
FIVE OF THIS TITLE, AND (3) ANY OTHER MONIES WHICH MAY BE MADE AVAILABLE
TO THE AUTHORITY FOR THE PURPOSE OF SUCH FUND. ALL MONIES  HELD  IN  THE
CAPITAL RESERVE FUND SHALL BE USED SOLELY FOR THE PAYMENT OF THE PRINCI-

A. 5604                             4

PAL  OF  BONDS OF THE AUTHORITY AS THE SAME MATURE, REQUIRED PAYMENTS TO
ANY SINKING FUND ESTABLISHED IN A RESOLUTION OF THE  AUTHORITY  FOR  THE
AMORTIZATION  OF  TERM BONDS, THE PURCHASE OR REDEMPTION OF BONDS OF THE
AUTHORITY  AND THE PAYMENT OF INTEREST ON SUCH BONDS OF THE AUTHORITY OR
THE PAYMENT OF ANY REDEMPTION PREMIUM REQUIRED  TO  BE  PAID  WHEN  SUCH
BONDS  ARE REDEEMED PRIOR TO MATURITY; PROVIDED, HOWEVER, THAT MONIES IN
SUCH FUNDS SHALL NOT BE WITHDRAWN THEREFROM AT ANY TIME IN  SUCH  AMOUNT
AS  WOULD REDUCE THE AMOUNT OF SUCH FUND TO LESS THAN THE MAXIMUM AMOUNT
OF PRINCIPAL AND INTEREST MATURING AND BECOMING  DUE  AND  SINKING  FUND
PAYMENTS  REQUIRED  TO  BE  MADE  IN ANY SUCCEEDING CALENDAR YEAR ON ALL
BONDS OF THE AUTHORITY THEN  OUTSTANDING.    IN  COMPUTING  THE  MAXIMUM
AMOUNT  OF  PRINCIPAL MATURING AT A SINGLE FUTURE DATE IN ANY SUCCEEDING
CALENDAR YEAR FOR THE PURPOSES OF THIS SUBDIVISION, THE PRINCIPAL AMOUNT
OF ANY SUCH TERM BONDS WHICH ARE  SUBJECT  TO  MANDATORY  REDEMPTION  BY
SINKING FUND PAYMENTS PRIOR TO SUCH FUTURE DATE SHALL NOT BE INCLUDED IN
SUCH COMPUTATION. ANY INCOME OR INTEREST EARNED BY, OR INCREMENT TO, THE
CAPITAL  RESERVE  FUND  CREATED  PURSUANT  TO  THIS PARAGRAPH DUE TO THE
INVESTMENT THEREOF MAY BE TRANSFERRED BY THE AUTHORITY  TO  THE  GENERAL
RESERVE FUND TO THE EXTENT IT DOES NOT REDUCE THE AMOUNT OF SUCH CAPITAL
RESERVE FUND BELOW THE MAXIMUM AMOUNT OF PRINCIPAL AND INTEREST MATURING
AND  BECOMING  DUE  AND SINKING FUND PAYMENTS REQUIRED TO BE MADE IN ANY
SUCCEEDING CALENDAR YEAR ON ALL SUCH BONDS OF THE AUTHORITY;
  (K) THE AUTHORITY SHALL NOT ISSUE BONDS SECURED BY THE HOUSING  COGEN-
ERATION  FACILITIES  CAPITAL  RESERVE  FUND  AT  ANY TIME IF THE MAXIMUM
AMOUNT OF PRINCIPAL AND INTEREST MATURING AND BECOMING DUE  AND  SINKING
FUND  PAYMENTS REQUIRED TO BE MADE IN A SUCCEEDING CALENDAR YEAR ON SUCH
BONDS THEN TO BE ISSUED AND ON ALL OTHER BONDS ISSUED FOR  THE  PURPOSES
DESCRIBED  IN  SUBDIVISION  TEN-B  OF  SECTION ONE THOUSAND FIVE OF THIS
TITLE WILL EXCEED THE AMOUNT OF THE CAPITAL RESERVE FUND AT THE TIME  OF
ISSUANCE  UNLESS  THE  AUTHORITY, AT THE TIME OF ISSUANCE OF SUCH BONDS,
SHALL DEPOSIT IN SUCH FUND FROM THE PROCEEDS  OF  THE  BONDS  SO  TO  BE
ISSUED,  OR OTHERWISE, AN AMOUNT WHICH, TOGETHER WITH THE AMOUNT THEN IN
SUCH FUND, WILL BE NOT LESS THAN THE MAXIMUM  AMOUNT  OF  PRINCIPAL  AND
INTEREST MATURING AND BECOMING DUE AND SINKING FUND PAYMENTS REQUIRED TO
BE  MADE IN ANY SUCCEEDING CALENDAR YEAR ON SUCH BONDS THEN TO BE ISSUED
AND ON ALL OTHER BONDS ISSUED FOR THE PURPOSES OF SUBDIVISION  TEN-B  OF
SECTION ONE THOUSAND FIVE OF THIS TITLE THEN OUTSTANDING;
  (L)  THE  AUTHORITY SHALL NOT ISSUE ANY NOTES OR BONDS PURSUANT TO ANY
OF THE PURPOSES OF THIS SECTION, UNLESS, IN THE  BEST  JUDGMENT  OF  THE
AUTHORITY, THE COST OF ANY COGENERATION FACILITY PROJECT SHALL BE RECOV-
ERED WITHIN TEN YEARS;
  (M) THE AUTHORITY SHALL NOT ISSUE BONDS AND NOTES SECURED BY THE HOUS-
ING COGENERATION FACILITIES CAPITAL RESERVE FUND IN AN AGGREGATE PRINCI-
PAL  AMOUNT  EXCEEDING  ONE HUNDRED MILLION DOLLARS, EXCLUDING BONDS AND
NOTES ISSUED TO REFUND OUTSTANDING BONDS AND NOTES;
  (N) THE AUTHORITY SHALL ANNUALLY, BUT NO LATER THAN DECEMBER FIRST  OF
EACH  YEAR, MAKE AND DELIVER TO THE GOVERNOR, THE DIRECTOR OF THE BUDGET
AND THE NEW YORK STATE PUBLIC AUTHORITIES CONTROL BOARD ITS  CERTIFICATE
OF  THE  PRINCIPAL  AMOUNT  OF BONDS AND NOTES ISSUED IN THE FISCAL YEAR
JUST ENDED AND THE TOTAL AGGREGATE PRINCIPAL AMOUNT OF BONDS  AND  NOTES
OUTSTANDING ISSUED FOR SUCH PURPOSES. THE GOVERNOR, IN CONSULTATION WITH
THE  AUTHORITY  AND THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL,
SHALL SET FORTH, IN THE BUDGET SUBMITTED ANNUALLY BY THE GOVERNOR TO THE
LEGISLATURE, A STATEMENT OF SUCH PROPOSED APPROPRIATIONS TO THE  HOUSING
COGENERATION  FACILITIES  RESERVE FUND AS MAY BE NECESSARY TO ASSURE THE

A. 5604                             5

CONTINUED SOLVENCY AND  OPERATIONS  OF  THE  AUTHORITY  FOR  THE  PUBLIC
PURPOSES OF SUCH FUND;
  (O)  ANY  BONDS  OR  NOTES OF THE AUTHORITY ISSUED FOR THE PURPOSES OF
SUBDIVISION TEN-B OF SECTION ONE THOUSAND FIVE OF THIS  TITLE  SHALL  BE
SUBJECT TO THE APPROVAL OF THE NEW YORK STATE PUBLIC AUTHORITIES CONTROL
BOARD;
  (P) THE AUTHORITY SHALL ESTABLISH A SPECIAL FUND, KNOWN AS THE GENERAL
RESERVE  FUND,  AND  SHALL  PAY  INTO  SUCH  FUND ALL FEES, CHARGES, AND
RENTALS COLLECTED BY THE AUTHORITY PURSUANT TO PARAGRAPHS A THROUGH E OF
SUBDIVISION TEN-B OF SECTION ONE  THOUSAND  FIVE  OF  THIS  TITLE.  SUCH
MONIES  AND  ANY OTHER MONIES PAID INTO THE GENERAL RESERVE FUND, MAY IN
THE DISCRETION OF THE AUTHORITY BUT SUBJECT TO AGREEMENTS WITH BONDHOLD-
ERS AND NOTEHOLDERS, BE USED BY THE AUTHORITY FOR (1) THE  REPAYMENT  OF
ADVANCES  BY  THE  STATE  IN ACCORDANCE WITH THE PROVISIONS OF REPAYMENT
AGREEMENTS BETWEEN THE AUTHORITY AND THE STATE DIRECTOR OF  THE  BUDGET,
(2) FUEL AND THE OPERATIONS AND MAINTENANCE EXPENSES OF THE COGENERATION
FACILITIES,  (3)  TO REIMBURSE THE AUTHORITY FOR THE REASONABLE COSTS OF
SERVICES PERFORMED BY THE AUTHORITY PURSUANT  TO  SUBDIVISION  TEN-B  OF
SECTION  ONE THOUSAND FIVE OF THIS TITLE, INCLUDING ALL COSTS OF FINANC-
ING, (4) FOR TRANSFERS TO THE HOUSING  COGENERATION  FACILITIES  CAPITAL
RESERVE  FUND,  (5)  FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON
BONDS OR NOTES ISSUED FOR THE PUBLIC PURPOSES OF THIS SECTION  WHEN  THE
SAME  SHALL  BECOME  DUE, WHETHER AT MATURITY OR ON CALL FOR REDEMPTION,
AND FOR THE PAYMENT OF REDEMPTION PREMIUM REQUIRED TO BE PAID WHERE SUCH
BONDS OR NOTES ARE REDEEMED PRIOR TO THEIR STATED MATURITIES, OR (6) FOR
SUCH OTHER CORPORATE  PURPOSES  OF  THE  AUTHORITY  AS  IT  MAY  IN  ITS
DISCRETION DETERMINE.
  S 3. Section 2428 of the public authorities law is amended by adding a
new subdivision 1-b to read as follows:
  1-B. THE AGENCY IS AUTHORIZED, SUBJECT TO THE PROVISIONS OF THIS ARTI-
CLE,  TO  MAKE COMMITMENTS TO INSURE, AND TO CONTRACT TO INSURE, HOUSING
COGENERATION FACILITIES LOANS FOR THE PURPOSES DESCRIBED IN  SUBDIVISION
TEN-B OF SECTION ONE THOUSAND FIVE OF THIS CHAPTER.
  S  4.  Subdivision 2 of section 2428 of the public authorities law, as
amended by chapter 354 of the laws  of  1984,  is  amended  to  read  as
follows:
   2.  The agency shall limit its insurance on a rehabilitation or pres-
ervation OR HOUSING COGENERATION FACILITIES loan to  an  amount  not  in
excess  of  fifty  per centum of the outstanding principal indebtedness,
provided, however, that the agency may insure an amount not in excess of
seventy-five per centum of the outstanding principal indebtedness  of  a
rehabilitation  loan  if it shall find, pursuant to rules or regulations
which it shall establish that the extent of rehabilitation is sufficient
to justify such additional insurance, provided  further,  however,  that
the  agency may insure an amount equal to the full outstanding principal
indebtedness when the loan has been made by a public benefit corporation
of the state of New York which public benefit corporation has issued  or
will issue bonds or notes, some or all of the proceeds of which bonds or
notes  were used or will be used to make such loan, or when the loan has
been made by a public employee pension fund.
   However, the sum of the percentage of any mortgage  loan  insured  by
the  agency  and the percentage of such loan insured or to be insured by
any other party shall not exceed one hundred per centum of the outstand-
ing principal indebtedness.
  S 5.  This act shall take effect immediately.