§ 1156. Bonds of the authority. 1. The authority shall have the power
and is hereby authorized from time to time to issue its negotiable bonds
in conformity with applicable provisions of the uniform commercial code
for any of its corporate purposes, including incidental expenses in
connection therewith, and to secure the payment of the same by a lien or
pledge covering all or part of its contract, earnings or revenues. The
authority shall have power from time to time whenever it deems refunding
expedient, to refund any bonds 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 then outstanding and partly for any of its
corporate purposes. Except as may be otherwise expressly provided by the
authority, every issue of bonds by the authority shall be general
obligations payable out of any moneys, earnings or revenues of the
authority, subject only to any agreements with the holders of particular
bonds pledging any particular moneys, earnings or revenues.

2. The bonds shall be authorized by resolution of the authority and
shall bear such date or dates, mature at such time or times not
exceeding forty years from their respective dates, bear interest at such
rates per annum not exceeding six per centum per annum payable at such
times, be in such denominations, be in such form either coupon or
registered, carry such registration privileges, be executed in such
manner, be payable in lawful money of the United States of America, at
such place or places and be subject to such terms of redemption, as such
resolution or resolutions may provide.

Bonds of the authority shall be sold at public sale upon sealed bids
to the bidder who shall offer the lowest interest cost to the authority
to be determined by the authority. The notice of sale shall be published
at least once, not less than ten nor more than forty days before the
date of sale, in a financial newspaper published and circulated in the
city of New York and designated by the authority. The notice shall call
for the receipt of sealed bids and shall fix the date, time and place of
sale. Bonds may also be sold at private sale. Such bonds, whether
publicly or privately sold, shall be sold for a price not less than
ninety-six per centum of the par value thereof, plus accrued interest,
provided always that the interest cost to maturity of the moneys
realized from the sale of such bonds shall not exceed six per centum per
annum. The terms of private sale shall be approved by the comptroller,
or by the division of the budget when the sale is to the comptroller.

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

(a) pledging all or any part of the moneys, earnings, income and
revenues derived from all or any part of the properties of the authority
to secure the payment of the bonds or of any issue of the bonds subject
to such agreements with bondholders as may then exist;

(b) the rates, rentals, fees and other charges to be fixed and
collected and the amounts to be raised in each year thereby, and the use
and disposition of the earnings and other revenues;

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

(d) limitations on the right of the authority to restrict and regulate
the use of the properties in connection with which such bonds are
issued;

(e) limitations in the purposes to which and the manner in which the
proceeds of sale of any issue of bonds may be applied;

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

(g) the procedure, if any, by which the terms of any contract with
bondholders 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;

(h) the creation of special funds into which any earnings or revenues
of the authority may be deposited;

(i) the terms and provisions of any mortgage or trust deed or
indenture securing the bonds or under which bonds may be issued;

(j) vesting in a trustee or trustees such properties, rights, powers
and duties in trust as the authority may determine which may include any
or all of the rights, powers and duties of the trustee appointed by the
bondholders pursuant to section eleven hundred forty-three hereof, and
limiting or abrogating the right of the bondholders to appoint a trustee
under such section or limiting the rights, duties and powers of such
trustee;

(k) defining the acts or omissions to act which shall constitute a
default in the obligations and duties of the authority to the
bondholders and providing the rights and remedies of the bondholders in
the event of such default, including as a matter of right the
appointment of a receiver, provided, however, that such rights and
remedies shall not be inconsistent with the general laws of this state
and other provisions of this title;

(l) limitations on the power of the authority to sell or otherwise
dispose of its properties;

(m) any other matters, of like or different character which in any way
affect the security or protection of the bonds;

(n) limitations on the amount of moneys derived from the properties to
be expended for operating, administrative or other expenses of the
authority;

(o) the protection and enforcement of the rights and remedies of the
bondholders;

(p) the obligations of the authority in relation to the construction,
maintenance, operation, repairs and insurance of the properties, the
safeguarding and application of all moneys and as to the requirements
for the supervision and approval of consulting engineers in connection
with construction, reconstruction and operation;

(q) the payment of the proceeds of bonds and revenues of the
properties to a trustee or other depositary, and for the method of
disbursement thereof with such safeguards and restrictions as the
authority may determine.

4. It is the intention of the legislature that any pledge of earnings,
revenues or other moneys made by the authority shall be valid and
binding from the time when the pledge is made; that the earnings,
revenues or other moneys so pledged and thereafter received by the
authority 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 irrespective of whether such parties have notice thereof.
Neither the resolution nor any other instrument by which a pledge is
created need be recorded.

5. Neither the members of the authority nor any person executing the
bonds or other obligations shall be liable personally on the bonds or
other obligations or be subject to any personal liability or
accountability by reason of the issuance thereof.

6. The authority shall have power out of any funds available therefor
to purchase (as distinguished from the power of redemption hereinabove
provided) any bonds issued by it or which may be assumed by such
authority at a price of not more than the principal amount thereof and
accrued interest, and all such bonds shall be cancelled.

7. In the discretion of the authority, the bonds may be secured by a
trust indenture by and between the authority and a corporate trustee,
which may be any trust company or bank having the powers of a trust
company in the state of New York. Such trust indenture may contain such
provisions for protecting and enforcing the rights and remedies of the
bondholders as may be reasonable and proper and not in violation of law,
including covenants setting forth the duties of the authority in
relation to the construction, maintenance, operation, repair and
insurance of the properties, and the custody, safeguarding and
application of all moneys, and may provide that the properties shall be
constructed and paid for under the supervision and approval of
consulting engineers. The authority may provide by such trust indenture
for the payment of the proceeds of the bonds and the revenues of the
properties to the trustee under such trust indenture or other
depository, and for the method of disbursement thereof, with such
safeguards and restrictions as it may determine. All expenses incurred
in carrying out such trust indenture may be treated as a part of the
cost of maintenance, operation and repairs of the properties. If the
bonds shall be secured by a trust indenture the bondholders shall have
no authority to appoint a separate trustee to represent them.

Notwithstanding any other provisions of this title, any resolution or
resolutions authorizing bonds or notes of the authority shall contain a
covenant by the authority that it will at all times maintain rates,
fees, rentals and/or other charges sufficient to pay, and that any
contracts entered into by the authority for the sale or distribution of
water shall contain rates, fees, rentals or other charges sufficient to
pay, the cost of operation and maintenance of the properties, the
principal of and interest on any obligation issued pursuant to such
resolution or resolutions as the same severally become due and payable,
and to maintain any reserves or other funds required by the terms of
such resolution or resolutions.