§ 1207-m. Transit projects. 1. The term "transit project" as used in
this section shall have the meaning given to such term from time to time
in section twelve hundred sixty-six-c of this article. The provisions of
this section shall be controlling and the authority and its subsidiaries
shall have the powers provided in this section notwithstanding any
contrary provision of this title or of local law or of any lease or
other agreement with the city.

2. (a) The authority is hereby authorized to request the metropolitan
transportation authority to undertake any transit project and the
authority and its designated subsidiaries are each hereby authorized (i)
to enter into agreements with the metropolitan transportation authority
concerning transit projects; (ii) to acquire in its own name by gift,
purchase or condemnation any real or personal property (or any interest
therein) which is needed or useful for or in connection with such
project, and to surrender the use, occupancy, control or possession of
or to transfer the same, or any other such real or personal property (or
any interest therein) which it owns, leases, operates or controls, to
the metropolitan transportation authority or its designee; (iii) to
accept a transfer, transfer back, lease or sublease of any such project
or part thereof upon its completion; and (iv) to make its agents,
employees and facilities available to the metropolitan transportation
authority in connection therewith.

(b) The authority and its subsidiary corporation is each hereby
authorized to sell or transfer, without regard as to how or from whom
acquired, all or part of its interest in any equipment which is deemed
to be a mass commuting vehicle under the United States internal revenue
code or the regulations thereunder, including, without limitation, any
of the same obtained as transit projects or obtained from or financed
with money received from the Triborough bridge and tunnel authority, for
such consideration and on such terms or conditions as it may deem
appropriate, and to obtain a lease from the transferee on such terms and
conditions and for such period as it may deem appropriate pursuant to
which it may operate, use, control or possess such mass commuting
vehicle in furtherance of the statutory purposes of the authority and
its subsidiaries, provided (i) such lease contains an option to the
authority or its subsidiary corporation to repurchase its interest at
the expiration of the scheduled lease term for nominal consideration,
and (ii) the aggregate of the regularly scheduled rental payments which
the authority or its subsidiary corporation is obligated to make
pursuant to such lease during each twelve month period of the lease term
shall not exceed the aggregate amount receivable, whether by principal
or interest, by the authority or its subsidiary corporation from its
transferee during each such twelve month period. Without limitation of
the foregoing, any lease entered into pursuant hereto may also contain
provisions requiring the authority or its subsidiary corporation to
indemnify the transferee for any loss resulting from the loss or
destruction of any mass commuting vehicle which is the subject of such
lease, or any loss arising out of any misrepresentation, act, or
omission of the authority or its subsidiary in connection with such
lease, and requiring the authority or its subsidiary corporation to
undertake to replace, repair or restore any such mass commuting vehicle,
but such obligations shall not be deemed regularly scheduled rental
payments for purposes of the preceding sentence. Rental payments and
other payments or costs incurred by the authority or its subsidiary
corporation in discharge of its obligations under any lease entered into
as hereinabove provided shall not be deemed capital costs for the
purposes of section twelve hundred three or twelve hundred three-a of
this title, and the considerations received by the authority or its
subsidiary corporation in connection with any transactions entered into
pursuant to the authorization of this paragraph may be expended free of
any restriction set forth in subparagraph (ii) of paragraph (b) of
subdivision one of section twelve hundred three or in paragraph (c) of
subdivision five of section twelve hundred three-a of this title.

(c) Neither the authority nor its subsidiary shall enter into any
transaction authorized by paragraph (b) of this subdivision unless the
following standards and procedures have been met:

(i) notice of intention to negotiate shall be published in at least
one newspaper of general circulation, and a copy thereof shall be mailed
to all parties who have requested notification from the authority or its
subsidiary to engage in transactions of this type. Such notice shall
describe the nature of the proposed transaction and the factors subject
to negotiation, which shall include, but not be limited to, the price to
be paid to the authority or its subsidiary;

(ii) the authority or its subsidiary shall negotiate with those
respondents whose response complies with the requirements set forth in
the notice;

(iii) the board of the authority or its subsidiary shall resolve on
the basis of particularized findings relevant to the factors negotiated
that such transaction will provide maximum available financial benefits,
consistent with other defined objectives and requirements.

(d) The authority and its subsidiary shall provide to the governor,
the temporary president of the senate, the speaker of the assembly, the
minority leader of the senate and the minority leader of the assembly,
notice of each lease entered into pursuant to paragraph (b) of this
subdivision and supporting documentation of compliance by the authority
and its subsidiary with subparagraphs (i), (ii) and (iii) of paragraph
(c) of this subdivision.

(e) Paragraphs (c) and (d) of this subdivision shall be of no force
and effect with respect to any lease transaction entered into pursuant
to a commitment approved prior to January first, nineteen hundred
eighty-five by the board of the authority or its subsidiary or the board
of the metropolitan transportation authority.

3. The authority and its designated subsidiaries are hereby
authorized, in connection with any transit project, to pay or agree to
pay, in a manner and on terms and conditions satisfactory to the
metropolitan transportation authority, any portion of the costs to the
metropolitan transportation authority of such transit project and the
financing thereof which is not paid to the metropolitan transportation
authority from any federal, state or local aid or assistance or from any
other moneys made available or payable to the metropolitan
transportation authority by others for such project.

4. (a) Such agreements with the metropolitan transportation authority
may, without limitation, contain provisions obligating the authority or
its designated subsidiary to:

(i) issue its notes or bonds, or execute and deliver its lease,
sublease and other such contractual obligations, in payment for a
transfer, lease or sublease of a transit project to any of them,
provided, however, that in no event shall the aggregate principal amount
of all notes and bonds together with the capitalized value of all lease,
sublease and other such contractual obligations, exceed the sum of one
billion six hundred million dollars, excluding from such limitation (A)
the principal amount of any bonds or notes of the authority to the
extent the amount thereof is paid, is payable or has been agreed to be
paid by the federal government or any agency or instrumentality thereof
to the authority or to the holders of such bonds or notes, (B) the
principal amount of any bonds or notes of the authority issued to refund
or otherwise repay other obligations issued for such transit projects,
(C) the principal amount of any bonds or notes and the capitalized value
of any lease, sublease or other such contractual obligation, to the
extent such obligations are paid or agreed to be paid, subject to annual
appropriation, under service contracts issued by the state to the
metropolitan transportation authority for the benefit of the authority
or its subsidiaries pursuant to the provisions of section sixteen of the
transportation systems assistance and financing act of 1981, or under
any similar contract of the metropolitan transportation authority or the
authority with any other governmental entity for the benefit of the
authority or its subsidiaries, (D) the principal amount of any bonds or
notes of the authority issued to the metropolitan transportation
authority in connection with the funding of any debt service reserve
fund required by any resolution of the metropolitan transportation
authority pursuant to which special obligation bonds of that authority
to fund a transit project were issued, and (E) a principal amount of any
bonds or notes of the authority equal to the amount of any original
issue discount from the principal amount of the special obligation bonds
or notes issued by the metropolitan transportation authority in
connection with the financing of a transit project by that authority;

(ii) give security for the payment of such notes, bonds, lease,
sublease or other contractual obligations, including a pledge of all or
any part of its revenues or other moneys, which pledge may contain
covenants with respect to the charging and fixing of fares, fees and
rentals, the use and disposition of such fares, fees, rentals and other
charges, and the setting aside of reserves therefrom.

(b) Such agreements, and any notes, bonds, lease, sublease or other
contractual obligations issued or entered into by the authority or its
designated subsidiary pursuant thereto, may, without limitation, also
contain provisions as to:

(i) limitations with respect to the use and disposition of transit
projects and with respect to any other transit facilities;

(ii) limitations on the issuance of additional bonds, notes, lease,
sublease or other contractual obligations, the terms upon which they may
be secured and the funding or refunding thereof;

(iii) with respect to bonds or notes, vesting in a trustee or trustees
such property rights, powers and duties in trust as it may determine,
which rights, powers and duties may include, but shall not be limited
to, those set forth in section twelve hundred seven-h of this title;

(iv) defining the acts or omissions to act which shall constitute a
default and providing rights and remedies in the event of default;

(v) any other matters, of like or different character, which in any
way affect the security or protection of the metropolitan transportation
authority or any lessor; and

(vi) consenting to the extending or assignment by the metropolitan
transportation authority or by any lessor to the holders of any of its
bonds, notes or lease obligations of all of the benefits and rights of
the metropolitan transportation authority or of such lessor provided by
any such agreement or other instrument.

(c) The term "revenues" as used in this subdivision shall include all
those moneys referred to in section twelve hundred of this article, as
well as all operating subsidies provided by any public benefit
corporation or by any governmental entity, federal, state or local.

(d) The term "capitalized value" as used in this subdivision shall
mean the present value of all future payments required under a lease,
sublease and other such contractual obligation discounted at a rate of
interest determined on the basis of the net interest cost of the last
metropolitan transportation authority's special obligation bonds issued
prior to the execution of any such lease, sublease or other contractual
obligation or, if no such bonds have been issued, on the basis of the
net interest cost of the last bonds issued by the Triborough bridge and
tunnel authority, issued in payment for the transfer, lease or sublease
of any such transit projects.

5. It is the intention hereof that, subject to such agreements with
bondholders or noteholders as may then exist, any pledge of revenues or
other moneys made by the authority or its subsidiaries shall be valid
and binding from the time when the pledge is made; that the revenues or
other moneys so pledged and thereafter received by the authority or its
subsidiaries shall immediately be subject to the lien of such pledge
without any physical delivery thereof or further act, and that the lien
of any such pledge shall be valid and binding as against all parties
having claims of any kind in tort, contract or otherwise against the
authority or its subsidiaries irrespective of whether such parties have
notice thereof. Neither the agreement nor any other instrument by which
a pledge is created need be recorded.

6. So long as the authority or any of its subsidiaries shall have any
outstanding and unpaid obligation in connection with a transit project,
the authority and such subsidiaries shall have the power at all times to
fix or adjust the rate or rates of fares, fees, rentals or other charges
to be charged for the use of their transit facilities as may, together
with all other lawfully available moneys, be necessary in their judgment
to produce sufficient revenues to pay such obligations as the same
become due, in addition to paying as the same shall become due expenses
of operation of the transit facilities and satisfying all other
obligations of the authority and such subsidiaries. No acts or
activities taken or proposed to be taken by the authority pursuant to
this subdivision shall be deemed to be "actions" for the purposes or
within the meaning of article eight of the environmental conservation
law.

7. (a) In connection with (i) the lease between the city and the
authority dated June first, nineteen hundred fifty-three, and (ii) the
lease between the city and the Manhattan and Bronx surface transit
operating authority dated March twentieth, nineteen hundred sixty-two
(such leases, as heretofore supplemented, amended or renewed, and the
tenancies originally created thereby, being referred to in this section
as "the existing leases"), the city, acting either by the mayor alone or
by resolution of the board of estimate, or by instruments authorized by
such resolution, and the authority are authorized to enter into
agreements for renewal or extension of the existing leases, or for new
leases, for such terms of years and upon such other terms and conditions
as the parties thereto shall agree and the metropolitan transportation
authority shall approve, provided that under the terms thereof, the
rights, privileges and obligations of the parties are not inconsistent
with the provisions of, or in derogation of the powers of the authority
all as provided in title nine of article five of this chapter, and
provided further that such agreements shall in no way impair the rights
or powers of the authority or the Manhattan and Bronx surface transit
operating authority to fulfill the terms of any contract made by either
of them with the holders of any of their then outstanding bonds or
notes, and such agreements shall provide that such leases may not be
terminated or permitted to expire or be amended in any way inconsistent
with the provisions of any agreement, bond, note, lease, sublease or
other contractual obligation given or made by either of them in
connection with a transit project. Neither the provisions of section one
hundred ninety-seven-c of the New York city charter, relating to a
uniform land use review procedure, nor the provisions of any other local
law of like or similar import shall apply to the renewal or extension of
the existing leases or to the making of new leases as herein provided.

(b) Notwithstanding the provisions of any other law, general, special
or local, or the provisions of the existing leases, if either of the
agreements authorized by paragraph (a) above is not entered into, but a
note, bond, lease, sublease or other contractual obligation for a
transit project has been issued or entered into, then (i) no party to an
existing lease may terminate the same, serve any notice of termination
pursuant thereto, exercise any option to terminate reserved therein or
permit the expiration thereof, (ii) the city shall not in any way limit
or disturb any right of the tenant to use, occupy, control and possess
any of the properties, facilities or revenues which are the subject of
such existing lease, and (iii) the city shall not seek to enforce such
existing lease in any way inconsistent with or contrary to the manner in
which such existing lease had been administered prior to the enactment
of this section or inconsistent with or contrary to the interests of the
metropolitan transportation authority or any lessor under any agreement,
notes, bonds, lease, sublease or other contractual obligations of the
authority or any of its subsidiaries issued or entered into in
connection with a transit project (and to the extent the provisions of
such leases conflict at any time or in any manner with the provisions of
any such note, bond, lease, sublease or other contractual obligation,
the provisions of such note, bond, lease, sublease or other contractual
obligation shall be controlling and conflicting provisions of the leases
with the city shall be disregarded), unless prior thereto the city has
satisfied all of such outstanding notes, bonds or other contractual
obligations and provided for the termination of all such agreements,
leases and subleases, all in accordance with their terms. If and to the
extent moneys are paid by the city to the authority or its subsidiaries
to satisfy their obligations to the metropolitan transportation
authority under such instruments, the authority and such subsidiaries
shall remit such moneys to the metropolitan transportation authority,
which shall, in turn, apply the same to the satisfaction and termination
of its own notes, bonds and leases issued or entered into in connection
with a transit project in accordance with their terms.

(c) Upon termination or expiration of a new lease or of a renewed or
extended existing lease as permitted in paragraph (a) of this
subdivision, or upon satisfaction of the requirements of paragraph (b)
of this subdivision, title to any real or personal property (or any
interest therein) constituting all or any part of a transit project then
vested in the authority or any of its subsidiaries or the metropolitan
transportation authority pursuant to the provisions of this chapter
shall be transferred without further consideration or payment to the
city.

8. The state of New York does hereby pledge to and agree with the
authority and its subsidiaries and the metropolitan transportation
authority and the holders of bonds or notes or lease, sublease or other
contractual obligations issued by any of them in connection with a
transit project or in connection with the transfer of the interest of
any of them in and the lease from the transferee of any property
furnished to it pursuant to chapter twelve of the laws of nineteen
hundred seventy-nine or section fifteen of chapter three hundred
fourteen of the laws of nineteen hundred eighty-one, or in connection
with any transaction entered into pursuant to the authorization of
paragraph (b) of subdivision two of this section, that the state will
not limit or alter the denial of authority under subdivision eleven of
this section, or the rights and powers vested in the authority and its
subsidiaries by this title to fulfill the terms of any agreement made by
any of them with the metropolitan transportation authority or with such
holders, or in any way impair their rights and remedies until such
agreements, bonds, notes, and obligations, together with the interest
thereon and all costs and expenses in connection with any action or
proceedings by or on behalf of the metropolitan transportation authority
or such holders, are fully met and discharged. The authority and its
subsidiaries are each authorized to include this pledge and the
agreement of the state in any agreement with the holders of such bonds
or notes or lease, sublease or other obligations and in any agreement
with the metropolitan transportation authority relating to a transit
project which may extend the same to the holders of its bonds, notes and
lease obligations.

9. The provisions of this section and of all agreements undertaken by
the authority or any of its subsidiaries in accordance therewith shall
in all respects be subject to the rights of the holders of any
outstanding bonds or notes of the authority and its subsidiaries.

10. In connection with the negotiation, award and implementation of
contracts of the authority relating to transit projects, the provisions
of paragraphs (a), (b), (c) and (d) of subdivision thirteen of section
twelve hundred sixty-six-c of this article shall apply to the authority
as if it were the "authority" referred to therein, and the officer
designated by the metropolitan transportation authority pursuant to
paragraph (e) of such subdivision shall perform the duties therein
described with respect to such contracts of the authority.

11. So long as the authority or any of its subsidiaries, or
metropolitan transportation authority, shall have outstanding any notes,
bonds, lease, sublease or other contractual obligations authorized by
this section or section twelve hundred sixty-six-c or twelve hundred
sixty-nine of this article, or which have been issued or incurred in
connection with the transfer of the interest of any of them in and the
lease from the transferee of any property furnished pursuant to chapter
twelve of the laws of nineteen hundred seventy-nine or section fifteen
of chapter three hundred fourteen of the laws of nineteen hundred
eighty-one, neither the authority nor any of its subsidiaries 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 subsidiaries to be or become a debtor under said
chapter nine or said corresponding chapter, chapters or sections during
any such period.

12. A project financed by the authority's issuance of its bonds, notes
or other obligations, pursuant to subdivision one-a of section twelve
hundred seven-b of this title shall be deemed to constitute a transit
project for the purposes of this section and any notes, bonds, lease,
sublease or other contractual obligations with respect to such project
shall, for purposes of this section, be deemed to have been authorized
by this section; provided, however, that such project shall not be
deemed to constitute part of any capital program plan for the purposes
of section twelve hundred sixty-nine-b of this article nor shall the
principal amounts of any bonds or notes, nor the capitalized value of
any lease, sublease, or other contractual obligation of the authority,
issued or entered into by the authority pursuant to such subdivision
one-a, be included in any computation pursuant to subdivision four of
this section.