§ 1203. Transfer of transit facilities by the city to the authority.
1. a. On or before June first, nineteen hundred fifty-three, the city
may, by resolution of the board of estimate or by instruments authorized
by any such resolution, enter into an agreement with the authority for
the transfer to the authority, for use in the execution of its corporate
purposes, of the transit facilities now owned or hereafter acquired or
constructed by the city and any other materials, supplies and property
incidental to or necessary for the operation thereof. Any such agreement
shall provide for transfer of such facilities by deed, lease, license or
other arrangement, provided the term thereof shall not be less than ten
years and authorize the authority to take jurisdiction, control,
possession and supervision of such transit facilities, materials,
supplies and property on or before June fifteenth, nineteen hundred
fifty-three.

b. (i) Such agreement shall provide that capital costs of a nature not
heretofore charged as operating expenses shall be paid by the city, or
at the option of the authority may be paid in the first instance by the
authority but in such event, the authority shall be entitled to recover
from the city the amount of such costs; provided, however, that the
total amount of such capital costs which the authority may incur without
the approval of the mayor in any city fiscal year shall not exceed five
million dollars and that no other such capital costs shall be incurred
by the authority without such approval. Where the city is required to
reimburse the authority for the amount of any capital costs pursuant to
such agreement, serial bonds or capital notes may be issued by the city,
pursuant to the local finance law, to finance any such reimbursement in
the same manner and to the same extent as if such costs were to be paid
directly by the city.

The authority shall submit annually to the city planning commission
and the mayor of the city on or before October fifteenth in each year an
estimate of all such capital costs for inclusion in the capital budget
of the city.

(ii) From and after March first, nineteen hundred sixty-eight, the
authority shall also have the right to incur capital costs of such
nature in its own name to the extent that capital funds are available to
it for expenditures of such nature pursuant to the provisions of section
twelve hundred nineteen-a of this chapter or of any other provision of
law, which capital costs shall not be payable by the city; provided,
however, that no project to be financed by the use of such capital funds
which is estimated by the authority to involve an expenditure in excess
of one million dollars shall be commenced unless the mayor and the board
of estimate shall each have been notified in writing by the authority of
the intent of the authority to undertake such project and of the nature
thereof. No such project shall be commenced if and to the extent that
either the mayor or a majority in voting power of the members of the
board of estimate shall find that it is incompatible with sound planning
for the development or redevelopment of the city, provided such finding,
together with the reasons therefor, is set forth in a writing delivered
to the authority within thirty days of the receipt by the mayor or the
board of estimate, as the case may be, of the notification of the
authority relating to such project. If any such project is not so
disapproved, it may nevertheless not be commenced unless and until the
city shall have been given an opportunity to include the same in the
capital budget of the city for the first fiscal year of the city
commencing not less than six months after receipt of such notification.
If and to the extent that such project is included in such capital
budget, the authority may not thereafter incur capital costs for the
same in its own name. If or to the extent such project is not included
in such capital budget, the authority may incur capital costs for the
same in its own name. The operation of sections twenty, twenty-one and
twenty-two of the rapid transit law shall be suspended with respect to
any project financed with the capital funds referred to in this
subparagraph.

c. Such agreement shall provide that the authority shall have the use
and possession of all property owned or leased by the city and used or
occupied by the board of transportation on March fifteenth, nineteen
hundred fifty-three in connection with or incidental to the operation of
such transit facilities.

d. No provision in such agreement shall purport to limit or restrict
or have the effect of limiting or restricting, the power granted the
authority to manage, control or direct the maintenance and operation of
such transit facilities or the fares or service thereof.

2. Such agreement shall provide for payment by the city of:

a. Capital costs for projects connected with such transit facilities
included in the capital budget of the city for periods prior to December
thirty-first, nineteen hundred fifty-three, except that the authority
shall not require payment of, and the city shall not pay, capital costs
of such projects without prior approval of the board of estimate.

b. Liabilities of the city or the board of transportation for:

(1) Pension or retirement contributions on behalf of persons who were
employed on transit facilities heretofore acquired by the city.

(2) Contributions to the New York City employees' retirement system on
behalf of officers or employees whose compensation has been paid out of
the operating revenues of the board of transportation of the city, which
contributions have or shall hereafter become due or payable for fiscal
years of the city ending on or before June thirtieth, nineteen hundred
fifty-three.

c. All other liabilities of the board of transportation on the date of
the conveyance.

d. Ten million dollars derived from any funds of the city (but not
from borrowed funds), or from the operating fund of the board of
transportation at the time of such transfer, for use by the authority as
initial working capital (1) in partial consideration of the acceptance
by the authority of the initial transfer, in which case the sum shall
not be repaid, or (2) as a loan, in which case such sum shall be repaid
in not less than five nor more than ten equal annual installments,
commencing July first, nineteen hundred fifty-four.

3. a. Such agreement may contain provisions relating to the use and
occupancy by the authority of real property (in addition to that
transferred pursuant to subdivision one of this section) now or
hereafter owned or leased by the city, on such terms as may be mutually
agreed upon by the city and the authority, and may provide for or
authorize surrenders to the city of property no longer required by the
authority.

b. The authority shall be entitled to utilize the officers, employees,
agents, facilities and services of the city on the same terms and
conditions as were applicable to or provided to the board of
transportation on March fifteenth, nineteen hundred fifty-three.

4. The city and the authority are hereby authorized and empowered to
make or enter into any contracts, agreements, deeds, leases, conveyances
or other instruments as may be necessary or appropriate to effectuate
the purposes of this title and they shall have complete power and
authority to do and to authorize the doing of all things, incidental,
desirable or necessary to implement the provisions of this section.

5. Upon the filing by the authority with the clerk of the city and the
secretary of state of a copy of the instruments or documents
effectuating the transfer, the authority shall take possession and
control of the transit facilities and other property transferred thereby
together with all contracts, books, maps, plans, papers and records of
or in the possession of the board of transportation of whatever
description, incidental to or necessary for the operation of the
facilities transferred by such agreement or the performance of the
duties of the authority as provided by this title.

6. When in the discretion of the authority there is available a supply
of electric power adequate for the efficient and proper operation of the
transit facilities either from a private utility or otherwise at rates
and under circumstances deemed by the authority to be reasonable, the
authority may make such provisions for the utilization of such electric
power as it may see fit and surrender to the city the power plants
presently leased by the authority from the city pursuant to the
provisions of this title. The foregoing provisions of this subdivision
shall be applicable only to actions of the authority undertaken prior to
February first, nineteen hundred and sixty.

7. Notwithstanding the aforesaid provisions of this section the city
may transfer to the authority title and ownership to the materials,
supplies and property incidental to or necessary for the operation of
the transit facilities which were heretofore leased to the authority,
and the authority and the city may enter into an agreement, modifying
the agreement of lease dated June first, nineteen hundred fifty-three,
as amended, renewed and supplemented, to provide for such transfer of
title and ownership and containing such further terms and conditions,
not inconsistent with law, as may be agreed upon between the parties.