Section 10-a - Covenants, authorizations to agree and remedies1. In the event that after the date on which the provisions of this act become operative, any notes or bonds are issued by the city prior to July 1, 2025, or any bonds are issued by a state financing agency, the state of New York hereby authorizes the city and authorizes and requires such state financing agency to include a pledge and agreement of the state of New York in any agreement made by the city or such state financing agency with holders or guarantors of such notes or bonds that the state will not take any action which will (a) substantially impair the authority of the board during a control period, as defined in subdivision twelve of section two of this act as in effect on the date such notes or bonds are issued (i) to approve, disapprove, or modify any financial plan or financial plan modification, including the revenue projections (or any item thereof) contained therein, subject to the standards set forth in paragraphs a, c, d, e and f of subdivision one of section eight of this act as in effect on the date such notes or bonds are issued and paragraph b of such subdivision as in effect from time to time, (ii) to disapprove a contract of the city or a covered organization if the performance of such contract would be inconsistent with the financial plan or to approve or disapprove proposed short-term or long-term borrowing of the city or a covered organization or any agreement or other arrangement referred to in subdivision four of section seven of this act, or (iii) to establish and adopt procedures with respect to the deposit in and disbursement from the board fund of city revenues; (b) substantially impair the authority of the board to review financial plans, financial plan modifications, contracts of the city or the covered organizations and proposed short-term or long-term borrowings of the city and the covered organizations; (c) substantially impair the independent maintenance of a separate fund for the payment of debt service on bonds and notes of the city; (d) alter the composition of the board so that the majority of the voting members of the board are not officials of the state of New York elected in a state-wide election or appointees of the governor; (e) terminate the existence of the board prior to the time to be determined in accordance with section thirteen of this act as in effect on the date such notes or bonds are issued; (f) substantially modify the requirement that the city's financial statements be audited by a nationally recognized independent certified public accounting firm or consortium of firms and that a report on such audit be furnished to the board; or (g) alter the definition of a control period set forth in subdivision twelve of section two of this act, as in effect on the date such notes or bonds are issued, or substantially alter the authority of the board, as set forth in said subdivision to reimpose or terminate a control period; provided, however, that the foregoing pledge and agreement shall be of no further force and effect if at any time (i) there is on deposit in a separate trust account with a bank, trust company or other fiduciary sufficient moneys or direct obligations of the United States or obligations guaranteed by the United States, the principal of and/or interest on which will provide moneys to pay punctually when due at maturity or prior to maturity by redemption, in accordance with their terms, all principal of and interest on all outstanding notes and bonds of the city or such state financing agency containing this pledge and agreement and irrevocable instructions from the city or such state financing agency to such bank, trust company or other fiduciary for such payment of such principal and interest with such moneys shall have been given, or (ii) such notes and bonds, together with interest thereon, have been paid in full at maturity or have otherwise been refunded, redeemed, defeased, or discharged; and provided further that the foregoing pledge and agreement shall be of full force and effect upon its inclusion in any agreement made by the city or state financing agency with holders or guarantors of such notes or bonds. Upon payment for such obligations issued pursuant to this act by the original and all subsequent holders inclusion of the foregoing covenant shall be deemed conclusive evidence of valuable consideration received by the state and city for such covenant and of reliance upon such pledge and agreement by any such holder. The state hereby grants any such benefited holder the right to sue the state in a court of competent jurisdiction and enforce this covenant and agreement and waives all rights of defense based on sovereign immunity in such an action or suit.
2.Every such bond or note which shall contain the pledge and agreement referred to in subdivision one above shall be callable for redemption commencing not later than the eleventh anniversary of its date of issuance and shall contain on its face a recital to such effect, together with the terms and conditions under which such obligation may be redeemed.3.The finance board of the city is hereby authorized to enter into agreements and to make covenants with any purchaser, holder or guarantor of obligations issued by the city or by a state financing agency to protect and safeguard the security and rights of a purchaser, holder or guarantor or to protect and safeguard the source of payment of such obligations or as deemed appropriate by the finance board which agreements or covenants may contain provisions providing for (a) (i) the compliance by the city with any of the provisions of this act or of the New York City Loan Guaranty Act of nineteen hundred seventy-eight, Public Law 95-339, or, (ii) in any agreements with the guarantor of such obligations but only in such agreements unless otherwise authorized by law, the compliance with any of the terms and conditions required by the secretary of the treasury pursuant to such act, (b) restrictions on the issuance by the city of its obligations, limitations on the inclusion of expense items in its capital budgets and financial records, reporting and disclosure requirements in addition to any such restrictions, limitations or requirements contained in this act, (c) compliance by the city with its financial plan as modified from time to time, (d) conditions that would give rise to an event of default on such obligations, and (e) remedies available to a purchaser, holder or guarantor of such obligations, other than acceleration or the required elimination or reduction of specific municipal expenditures, including the circumstances, if any, under which a trustee or trustees or a fiscal agent may be appointed or may act as a representative of holders of obligations issued by the city in connection with an issue or issues of obligations of the city and the rights, powers and duties which may be vested in such trustee, trustees or fiscal agent as such representative. The state of New York hereby pledges and agrees that it will take no action that would impair the power of the city to comply with or to perform any covenant or agreement made pursuant to this subdivision, or any right or remedy of a purchaser, holder or guarantor to enforce such covenant or agreement; and the city or a state financing agency is hereby authorized to include such pledge and agreement in any agreement made pursuant to this subdivision. Nothing contained in this subdivision shall preclude the state from authorizing the city to exercise, or the city from exercising, any power provided by law to seek application of laws then in effect under the bankruptcy provisions of the United States constitution or shall preclude the state from validly exercising its police powers. 4.Notwithstanding any other provision of law, the trustees of any retirement, pension or annuity fund or system of the state of New York or of the city of New York are hereby authorized to enter into commitments to purchase and to purchase notes, bonds or other obligations of the city of New York or of a state financing agency, the payment in whole or in part, of interest, principal, or both, is guaranteed by the secretary of the Treasury of the United States of America pursuant to the New York City Loan Guarantee Act of 1978, Public Law 95-339, as presently in effect or hereafter amended or to purchase other bonds or notes of such city or of a state financing agency prior to June thirtieth, nineteen hundred eighty-two, or in the case of the trustees of any retirement, pension or annuity fund or system of the city of New York, to enter into commitments to purchase such other bonds or notes of such city or of a state financing agency prior to June thirtieth, nineteen hundred eighty-two. Such commitments to purchase shall be binding upon and enforceable against successor trustees of such retirement, pension or annuity funds or systems of the state of New York or city of New York. 5.The secretary of the treasury shall have the right to initiate a proceeding in the supreme court of the state of New York in and for the county of New York or the court of claims of the state of New York to obtain a court order or other relief in connection with any agreements or other transactions entered into by the secretary relative to his guarantee of the principal, interest, or both of city indebtedness. 6.Notwithstanding any other provision of law to the contrary, the governor shall have the authority in connection with any agreement by the federal government or any agency or instrumentality thereof to guarantee the payment of the principal of or interest on bonds or notes issued by the city of New York or by a state financing agency, to enter into one or more agreements containing terms and conditions required by the secretary of the treasury pursuant to the New York City Loan Guarantee Act of 1978, Public Law 95-339, approved by the comptroller and approved as to form by the attorney general, with the federal government or any agency or instrumentality thereof with respect to such guarantee or any matters related thereto and to comply with such terms and conditions. 7.Nothing in this section contained shall preclude the state from authorizing the board or the city to exercise, or the board or city from exercising, any power provided by law to seek application of laws then in effect under the bankruptcy provisions of the United States constitution or to preclude the state from a further exercise of its powers under article eight, section twelve, of the state constitution.N.Y. NYS Financial Emergency Act for the City of NY Law § 10-a
Amended by New York Laws 2024, ch. 139,Sec. 7, eff. 6/28/2024.Amended by New York Laws 2023, ch. 152,Sec. 7, eff. 6/30/2023.Amended by New York Laws 2022, ch. 362,Sec. 7, eff. 6/30/2022.Amended by New York Laws 2021, ch. 189,Sec. 6, eff. 6/29/2021.Amended by New York Laws 2020, ch. 58,Sec. XXX-B-QQ-6, eff. 4/3/2020.Amended by New York Laws 2019, ch. 75,Sec. 7, eff. 7/3/2019.Amended by New York Laws 2016, ch. 78,Sec. 7, eff. 6/30/2016.Amended by New York Laws 2015, ch. 34,Sec. 7, eff. 6/30/2015.Amended by New York Laws 2014, ch. 66,Sec. 7, eff. 6/30/2014.Amended by New York Laws 2013, ch. 79,Sec. 7, eff. 6/30/2013.