§ 76-a. Private financing. To facilitate the enlistment of private
capital through the sale by authorities or municipalities of their bonds
and other obligations to persons, firms or corporations other than
governments, in financing state projects, and to maintain the low-rent
character of such projects---

(a) Every contract entered into by the state with an authority and a
municipality, or solely with a municipality, to make loans or periodic
subsidies or both (including contracts which amend or supersede
contracts previously made, provided that such amending or superseding
contracts do not relate to state projects with respect to which
definitive housing bonds of the state have been sold pursuant to section
sixty of the state finance law, and do not relate to state projects with
respect to which serial bonds of a municipality have been sold pursuant
to sections ten and eleven of the local finance law) may provide that---

(1) upon the occurrence of a substantial default in respect to the
covenants or conditions to which the authority or municipality is
subject (as such substantial default shall be defined in such contract),
the authority or municipality shall be obligated at the option of the
commissioner, either to convey title to the state in any case where, in
the determination of the commissioner (which determination shall be
final and conclusive), such conveyance of title to the state is
necessary to achieve the purposes of this chapter, or to deliver
possession to the state of the project, as then constituted, to which
such contract relates;

(2) the state shall be obligated to reconvey or to redeliver
possession of the project, as constituted at the time of reconveyance or
redelivery, to such authority or municipality upon such terms as shall
be prescribed in such contract and as soon as practicable: (i) after the
commissioner shall be satisfied that all defaults with respect to the
project have been cured, and that the project will, in order to fulfill
the purposes of this chapter, thereafter be operated in accordance with
the terms of such contract; or (ii) after the termination of the
obligation to make periodic subsidies available unless there are any
obligations or covenants of the authority or municipality which are then
in default. Any prior conveyances and reconveyances, deliveries and
redeliveries of possession shall not exhaust the right to require a
conveyance or delivery of possession of the project to the state
pursuant to sub-paragraph (1) of subdivision (a), upon the subsequent
occurrence of a substantial default.

(b) Whenever such contract to make loans or periodic subsidies or both
shall include provisions which the commissioner, in said contract,
determines are in accordance with the provisions authorized by
subdivision (a) hereof, and the periodic subsidies, pursuant to such
contract, have been pledged by the authority or the municipality as
security for the payment of the principal and interest on the
obligations of the authority or municipality, the commissioner
(notwithstanding any other provisions of this chapter) shall continue to
make periodic subsidies available for the project so long as any of such
obligations remain outstanding. Acquisition of title to a project by the
state, or delivery of possession thereof to the state, as provided in
subdivision (a) hereof, shall not constitute an assumption of liability
by the state of the bonds or notes of the authority or municipality for
which the periodic subsidies or loans have been pledged. The
commissioner may covenant in such contract (in lieu of retaining the
right to reduce or terminate periodic subsidies under section eighteen
of this chapter and notwithstanding any other provisions of law) that in
any event such periodic subsidies shall in each year be at least equal
to an amount which, together with such income or other funds as are
actually available from the project for the purpose at the time such
periodic subsidy is made, will suffice for the payment of all
installments, falling due within the said year, of principal and
interest on the obligations for which the periodic subsidies provided
for in the contract shall have been pledged as security; provided that
such periodic subsidies shall not exceed the amounts and shall not be
made for a period longer than the amounts and period specified in
section seventy-three of this chapter and provided further that such
periodic subsidies shall not exceed the amounts and shall not be made
for a period longer than the amounts and period specified in the
contract.

(c) Obligations of an authority or municipality which (1) are secured
either (A) by a pledge of a state loan under an agreement between such
authority or municipality and the state, or (B) by a pledge of periodic
subsidies to be made by the state and (2) bear, or are accompanied by, a
certificate of the commissioner that such obligations are so secured,
shall be incontestable in the hands of a bearer. The full faith of the
state is pledged to the payment of all loans and periodic subsidies
contracted for by the commissioner as security for such obligations.