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Bonds and security therefor
Municipal Housing Authorities (MHA) CHAPTER ROOT, ARTICLE 5
* § 72. Bonds and security therefor. 1. An authority may from time to
time issue bonds in such amounts and upon such terms as it may deem
advisable to carry out the provisions of this article. Bonds of an
authority shall be authorized by its resolution an may be issued singly
or in one or more series, and shall bear such date or dates, mature at
such time or times, bear interest at such rate or rates, not exceeding
six per centum per annum, be in such denomination or denominations,
interchangeable or otherwise, be in such form, either coupon or
registered, carry such registration privileges, be executed in such
manner, with or without authentication, be payable in such medium of
payment, at such place or places, and be subject to such terms of
redemption, with or without premium, as such resolution may provide. The
authority must obtain the approval as to the amount and terms of such
bonds, of the board of estimate and apportionment in cities where such
body exists, and in other cities, of the local legislative body thereof
as defined in the city home rule law, except that such approval shall
not be required for bonds issued in connection with a federal project.
Bonds issued for a non-federal project in a city of more than one
million inhabitants may include terms providing that the amount
necessary to pay the interest thereon until maturity shall be paid to
the authority by such city without reimbursement or liability of the
authority to such city therefor. For the purpose of meeting such
payments to the authority any such city shall be empowered to enact
local laws imposing and collecting an occupation tax in addition to any
and all other taxes which such city has the power to impose. Such tax
shall be imposed upon any individual, copartnership or corporation
occupying premises in any such city as an owner, tenant or
concessionaire for any gainful purpose. Such tax shall be in an amount
of not less than one dollar nor more than six dollars per year for each
separate premises so occupied, the rate of tax to depend upon the size
of such premises or upon such other reasonable standard as may be fixed
in such local law. Revenues resulting from the imposition of taxes
authorized by this act shall be paid into the treasury of any such city
and shall not be credited or deposited in the general fund of any such
city, but shall be deposited in a separate bank account or accounts and
shall be available and used solely and exclusively for the purposes
aforesaid. In no event and under no circumstances shall the payment of
interest on such bonds by such city be deemed to modify in any way the
provisions of section seventy-three of this act. The bonds for a federal
project or non-federal project may be sold by the authority at public or
private sale at such price or prices as the authority may determine.

The authority may issue its interim certificates, or other temporary
obligations, to the purchaser of bonds pending the authorization,
preparation, execution or delivery of definitive bonds. Such interim
certificates, or other temporary obligations, shall be in such form,
contain such terms, conditions and provisions, bear such date or dates,
and evidence such agreements relating to their discharge or payment or
the delivery of definitive bonds as the authority may by resolution

2. Bonds may be issued for any purposes of the authority including the
payment or reimbursement to the municipality for property, services or
facilities furnished by it pursuant to agreement with the authority.

3. The authority shall have power out of any funds available therefor
to purchase any bonds issued by it at a price not more than the
principal amount thereof and the accrued interest. All bonds so
purchased shall be cancelled. This paragraph shall not apply to the
redemption of bonds.

4. No personal liability or accountability shall attach to any member
of the authority or any official of the municipality or to any person
executing said bonds by reason of the execution or issuance thereof.

5. The bonds of an authority are securities in which the city or state
may invest. Such bonds, when they are (1) secured by a first mortgage
lien not exceeding sixty-six and two-thirds per centum of the value of
the property covered thereby, or (2) issued in connection with a project
aided or financed in whole or in part by the federal government pursuant
to the provisions of an act of the congress providing for capital grants
for low cost housing, or for the making of loans and for the payment of
annual contributions for such purpose under a contract guaranteeing the
payment of such annual contributions by the federal government to the
authority for a fixed period of years, are hereby declared to be
securities in which all public officers and bodies of the state,
municipalities, municipal subdivisions, all insurance companies and
associations, all savings banks and savings institutions, including
savings and loan associations, all executors, administrators, guardians,
trustees, and all other fiduciaries in the state may legally invest
funds within their control.

6. In connection with the issuance of bonds or the incurring of any
obligation under a lease, and to secure the payment of such bonds or
obligations, an authority in addition to its other powers may: (a)
Pledge all or any part of its rents, fees, or revenues to which its
right then exists or may thereafter come into existence.

(b) Mortgage all or any part of its property, real or personal, then
owned or thereafter acquired.

(c) Covenant against mortgaging all or any part of its property, real
or personal, then owned or thereafter acquired, or against permitting or
suffering any lien thereon.

(d) Covenant with respect to limitations on its right to sell, lease,
or otherwise dispose of any project or any part thereof.

(e) Covenant against pledging all or any part of its rents, fees and
revenues, to which its right then exists or may thereafter come into
existence, or against permitting or suffering any lien thereon.

(f) Covenant as to the bonds to be issued and as to the issuance of
such bonds in escrow or otherwise, and as to the use and disposition of
the proceeds thereof.

(g) Covenant as to what other, or additional debts may be incurred by

(h) Provide for the replacement of lost, destroyed or mutilated bonds.

(i) Covenant that the authority warrants the title to the premises.

(j) Covenant as to the rents and fees to be charged, the amount to be
raised each year or other period of time by rents, fees, and other
revenues, and as to the use and disposition to be made thereof.

(k) Covenant as to the use of any or all of its property, real or

(l) Create or authorize the creation of special funds segregating (a)
the proceeds of any loans or grant; (b) all of the rents, fees and
revenues of any project or projects; (c) any monies held for the payment
of the costs of operation and maintenance of projects, or as a reserve
for the meeting of contingencies in the operation and maintenance
thereof; (d) any monies held for the payment of the principal and
interest on its bonds or the sums due under its leases and/or as a
reserve for such payments; and (e) any monies held for any other
reserves or contingencies; and covenant as to the use and disposal of
the monies held in such funds.

(m) Redeem the bonds, and covenant for their redemption, and provide
the terms and conditions thereof.

(n) Covenant against extending the time for the payment of its bonds
or interest thereon.

(o) Prescribe the procedure, if any, by which the terms of any
contract with bond holders may be amended or abrogated, the amount of
bonds the holders of which must consent thereto, and the manner in which
such consent may be given.

(p) Covenant as to the maintenance of its property, the replacement
thereof, the insurance to be carried thereon, and the use and
disposition of insurance moneys.

(q) Vest in an obligee, in the event of a default by an authority, the
right to cure any such default and to advance any monies necessary for
such purpose, and covenant that the monies so advanced be an additional
obligation of such authority with such interest, security and priority
as may be provided in any trust indenture, mortgage, lease or contract.

(r) Covenant and prescribe as to the events of default and terms and
conditions upon which any or all of its bonds shall become or may be
declared due before maturity, and as to the terms and conditions upon
which such declaration and its consequences may be waived.

(s) Covenant as to the rights, liabilities, powers and duties arising
upon the breach by it of any covenant, condition, or obligation.

(t) Covenant to surrender possession of a project or projects or parts
thereof upon the happening of an event of default; and vest in an
obligee the right, upon such default, without judicial proceedings to
take possession and use, operate, manage and control such projects or
any part thereof, and to collect and receive rents, fees and revenues
arising therefrom in the same manner as such authority itself might do,
and to dispose of the monies collected in accordance with the agreement
of such obligee with the authority.

(u) Vest in a trustee or trustees the right to enforce any covenant to
secure, or pay the bonds, or otherwise relating to such bonds; provide
for the powers and duties of such trustee or trustees, limit the
liabilities thereof, and provide the terms and conditions upon which the
trustee or trustees, or the holders of bonds, or any proportion of them,
may enforce any such covenant.

(v) Vest in a government or in a trustee the right, upon any happening
of an event of default, to foreclose the mortgage securing any bonds
held by such government, through judicial proceedings or through the
exercise of a power of sale without judicial proceedings.

(w) Vest in a trustee or trustees or in other obligees the right, upon
the happening of an event of default, to foreclose any mortgage through
judicial proceedings.

(x) Vest in an obligee, including a government, the right to foreclose
any such mortgage as to all or such part or parts of the property
covered thereby as such obligee shall elect; the institution,
prosecution and conclusion of any such foreclosure proceedings or the
sale of any such parts of the mortgaged property shall not affect in any
manner or to any extent the lien of the mortgage on the parts of the
mortgaged property not included in such proceedings or not sold as

(y) Make covenants other than, and in addition to, the covenants
herein expressly authorized, of like or different character; and execute
all instruments necessary or convenient in the exercise of the powers
herein granted, or in the performance of its covenants or duties, which
may contain such covenants and provisions, in addition to those above
specified, as the government or any purchaser of the bonds of an
authority may require.

(z) Make such covenants and do any and all such acts and things as may
be necessary or convenient or desirable in order to secure its bonds, or
in the absolute discretion of an authority tend to make the bonds more
marketable; notwithstanding that such covenants, acts or things may not
be enumerated herein.

7. In addition to powers conferred upon an authority by other
provisions of this act, an authority is empowered to borrow money or
accept grants from the federal government for or in aid of any project,
to take over any land acquired by the federal government or any housing
plan of the federal government, to take over, manage or lease any
housing undertaking of the federal government, and to these ends, to
enter into such contracts, mortgages, trust indentures, leases or other
agreements as the federal government may require, including agreements
that the federal government shall have the right to supervise and
approve the construction, maintenance and operation of any project. It
is the purpose and intent of this subdivision to authorize an authority
to do any and all things necessary or desirable to secure the financial
aid and co-operation of the federal government in the undertaking,
construction, maintenance, lease, operation or assistance of any project
by the authority, or in connection with any housing plan or undertaking
of the federal government.

* NB The text of Article 5 of the former State Housing Law (cited
herein as the "Municipal Housing Authorities Law"), as such article
existed immediately prior to its repeal pursuant to section 227 of
Chapter 808 of the Laws of 1939, is provided here for ease of reference
and historical purposes as such text continues to be applicable for the
New York City Housing Authority pursuant to the provisions of section
401 of the current Public Housing Law.