§ 654-c. Housing New York corporation. 1. Definitions. As used in this
section, unless a different meaning clearly appears from the context:

(a) "Housing New York program" shall mean the housing New York program
established pursuant to section four of the housing New York program
act.

(b) "City" shall mean the city of New York, its agencies and
instrumentalities (other than the housing New York corporation) and the
New York city housing development corporation.

(c) "Residential housing facilities" shall mean one or more works or
improvements containing one or more residential dwelling units,
including, but not limited to, single room occupancy units, and
including the real and personal property acquired, owned, constructed,
equipped, improved, enlarged, rehabilitated or renovated to provide such
accommodations and such incidental and appurtenant commercial, social,
recreational or communal facilities, to be located without the Battery
Park project area, as defined in the Battery Park city authority act,
and within the city.

(d) "Excess revenues" shall mean all revenues from the Battery Park
project area, as defined in the Battery Park city authority act, in
excess of those needed (i) to satisfy bond and note covenants (other
than as they relate to bonds and notes issued pursuant to this section
and section one thousand nine hundred seventy-four-c of the public
authorities law) including those covenants which require that the
Battery Park city authority maintain its revenues and reserve funds in
an amount necessary to permit it to discharge its debt service
obligations, (ii) to fulfill its legal and financial commitments, and
(iii) to pay its operating and maintenance expenses.

2. There is hereby established a public benefit corporation known as
the "housing New York corporation" as a subsidiary corporation of the
corporation solely for the purpose of borrowing money and granting such
moneys to the city for the purposes and in accordance with the
provisions of the housing New York program.

3. It is hereby found and declared that the legislature, pursuant to
the housing New York program act, has established a housing New York
program under which the city will cause the acquisition, construction,
equipping, improving, rehabilitation and renovation of dwelling
accommodations within the city of New York for persons and families for
whom the ordinary operations of private enterprise cannot supply such
accommodations; that such program is necessary in order to increase the
presently inadequate supply of dwelling accommodations in such city for
such persons and families; that such program shall require a substantial
commitment of funds from public sources; and that the need for such
moneys necessitates that the subsidiary corporation created by this
section be granted the powers and be made subject to the requirements of
this section. The legislature therefore finds that such subsidiary
corporation, subject to the terms and conditions specified herein,
should be given the power to borrow funds and grant such moneys to the
city of New York, and any agency or instrumentality thereof (other than
such subsidiary corporation) or the corporation for use by such entity
in the housing New York program; that the financing of residential
housing facilities in accordance with the housing New York program is a
public purpose for which moneys may be granted, and exemptions from
taxation on the income of bonds or notes of such subsidiary corporation
and on such subsidiary corporation's income and property granted, as
specified herein; and that the powers and duties of such subsidiary
corporation as recited in this section are necessary and proper for
achieving the ends herein recited. Therefore such subsidiary corporation
is hereby authorized and empowered:

(a) to borrow money by issuing bonds and notes for the purposes of (i)
granting such moneys to the city to finance the acquisition,
construction, equipping, improvement, enlargement, rehabilitation and
renovation of residential housing facilities for the purposes and in
accordance with the provisions of the housing New York program and (ii)
refunding any bonds or notes of such subsidiary corporation issued
pursuant to this section;

(b) to grant moneys to the city for the purpose of financing the
acquisition, construction, equipping, improvement, enlargement,
rehabilitation and renovation of residential housing facilities for the
purposes and in accordance with the provisions of the housing New York
program and to enter into any agreement specifying terms and conditions
with respect thereto;

(c) subject to the provisions of any contract with the holders of any
of its bonds or notes, to pledge any revenues or assets of such
subsidiary corporation, including, but not limited to, any excess
revenues of the Battery Park city authority as shall be payable to such
subsidiary corporation pursuant to an agreement between the Battery Park
city authority and such subsidiary corporation as such subsidiary
corporation shall deem necessary, to secure any bonds or notes issued or
any agreements entered into pursuant to this section; (d) to procure
insurance, letters of credit or other credit enhancements with respect
to its bonds or notes issued pursuant to this section and to pay the
premiums and fees therefor;

(e) to adopt, amend or rescind rules and regulations appropriate to
carry out its corporate purposes and to establish such requirements and
enter into such agreements to achieve the objectives of this section;
and

(f) to exercise any and all other powers authorized by this section
and not inconsistent with the provisions of this section.

4. In addition to the foregoing, such subsidiary corporation may:

(a) receive moneys from the corporation, the Battery Park city
authority, any other public benefit corporation, the federal government
or any other source for the purpose of paying its obligations issued
pursuant to this section in order to provide residential housing
facilities to low and moderate income persons for whom the ordinary
operation of private enterprise cannot supply safe, sanitary and
affordable housing accommodations,

(b) enter into agreements with the Battery Park city authority or any
other entity for the purpose of receiving moneys as described in
paragraph (a) of this subdivision, and

(c) transfer, lend, pledge or assign moneys to a trustee, fiduciary or
similar entity for the purpose of securing obligations as referenced in
paragraph (a) of this subdivision.

5. The membership of such subsidiary corporation shall consist of
seven members, five of whom shall be members of the corporation (other
than members thereof appointed by the governor) and two of whom shall be
appointed by the governor. Neither of the two members appointed by the
governor shall be members or officers of the Battery Park city authority
or any subsidiary corporation organized pursuant to section nineteen
hundred seventy-four-a of the public authorities law. The two members
first appointed by the governor shall serve for terms of two and four
years respectively from January first next succeeding the date of their
appointment. Their successors shall serve for terms of four years each.
The governor shall fill any vacancy which may occur by reason of death,
resignation or otherwise of a member appointed by the governor in a
manner consistent with the original appointment. A member appointed by
the governor (i) shall continue in office until such member's successor
has been appointed and qualified and (ii) may be removed by the governor
for cause, but not without an opportunity to be heard in person or by
counsel, in such member's defense, upon not less than ten days' notice.
The commissioner of the department of housing preservation and
development shall serve as chairperson of the subsidiary corporation.
The powers of the subsidiary corporation shall be vested in and
exercised by no less than four of the members thereof then in office.
The subsidiary corporation may delegate to one or more of its members,
or its officers, agents and employees, such duties and powers as it may
deem proper.

6. Notwithstanding any inconsistent provisions of this or any other
general, special or local law, no officer or employee of the city or the
state, or of any public corporation, as defined in the general
construction law, shall be deemed to have forfeited or shall forfeit
such person's office or employment by reason of such person's acceptance
of membership on or by virtue of such person's being an officer,
employee or agent of the subsidiary corporation. No officer or member of
the corporation shall receive any additional salary or other
compensation, either direct or indirect, other than reimbursement for
actual and necessary expenses incurred in the performance of such
person's duties, by reason of such person's serving as a member or
officer of such subsidiary corporation.

7. The corporation may transfer to such subsidiary corporation any
real, personal or mixed property in order to carry out the purposes of
this section.

8. The subsidiary corporation also shall have the power to:

(a) sue and be sued;

(b) have a seal and alter the same at pleasure;

(c) make and alter by-laws for its organization and internal
management and make rules and regulations governing the use of its
property and facilities;

(d) make and execute contracts and all other instruments necessary or
convenient for the exercise of its powers and functions under this
section;

(e) acquire, hold and dispose of real or personal property for its
corporate purposes;

(f) engage the services of private consultants on a contract basis for
rendering professional and technical assistance and advice;

(g) procure insurance against any loss in connection with its
activities, properties and assets in such amount and from such insurers
as it deems desirable;

(h) appoint officers, agents and employees, prescribe their duties and
qualifications and fix their compensation subject to the provisions of
the civil service law and the rules of the civil service commission of
the city;

(i) invest any funds, or other moneys under its custody and control in
the same manner as the corporation; and

(j) to do any and all things necessary or convenient to carry out its
purposes and exercise the powers expressly given and granted in this
section.

9. The subsidiary corporation and its corporate existence shall
continue until terminated by law; provided, however, that no such
termination shall take effect as long as obligations of the subsidiary
corporation remain outstanding, unless adequate provision has been made
for the payment thereof in the documents securing the same. Upon
termination of the existence of the subsidiary corporation all of its
rights and properties shall pass to and be vested in the city of New
York.

10. The city and the corporation shall have the power to transfer to
such subsidiary corporation, agents, employees and facilities of the
city or corporation to enable it to fulfill the purposes of this
section.

11. (a) Subject to the provisions of this section, the subsidiary
corporation shall have power and is hereby authorized to issue from time
to time its notes and bonds in such principal amount as the subsidiary
corporation shall determine to be necessary to provide sufficient funds
for achieving its corporate purposes, including the providing of moneys
to the city, the payment of interest on notes and bonds of the
subsidiary corporation, the establishment of reserves to secure such
notes and bonds, and the payment of all expenses of the subsidiary
corporation incident thereto.

(b) The subsidiary corporation shall have the power, from time to
time, to issue (i) notes to renew notes and (ii) bonds to pay notes,
including the interest thereon and, 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 to issue bonds partly
to refund bonds then outstanding and partly for any of its corporate
purposes. The refunding bonds may be exchanged for the bonds to be
refunded or sold and the proceeds applied to the purchase, redemption or
payment of such bonds.

(c) Except as may otherwise be expressly provided by the subsidiary
corporation, every issue of its notes and bonds shall be general
obligations of the subsidiary corporation payable out of any revenues of
such corporation, subject only to any agreements with the holders of
particular notes or bonds pledging any particular revenues.

(d) The notes and bonds shall be authorized by resolution or
resolutions of the subsidiary corporation, shall bear such date or dates
and shall mature at such time or times as such resolution or resolutions
may provide, except that no note or any renewal thereof shall mature
more than nine years after the date of issue of the original note and no
bond shall mature more than fifty years from the date of its issue. No
refunding bonds shall mature later than fifty years from the date of
original issuance of the bonds being refunded. The bonds may be issued
as serial bonds payable in annual installments or as term bonds or as a
combination thereof. The notes and bonds shall bear interest at such
rate or rates, be in such denominations, be in such form, either coupon
or registered, carry such registration privileges, be executed in such
manner, be payable in such medium of payment, at such place or places,
and be subject to such terms of redemption as such resolution or
resolutions may provide. The notes and bonds may be sold by the
subsidiary corporation at public or private sale, at such price or
prices as the subsidiary corporation shall determine; provided, however,
that the subsidiary corporation shall consult with the comptroller of
the city of New York as to the timing of any sale; and provided further
that no notes or bonds of the subsidiary corporation may be sold at a
private sale unless such sale and the terms thereof have been approved
in writing by (a) such comptroller, where such sale is not to such
comptroller, or (b) the director of the budget of the city of New York,
where such sale is to such comptroller.

(e) Any resolution or resolutions authorizing any notes or bonds or
any issue thereof may contain provisions, which shall be a part of the
contract or contracts with the holders thereof, as to:

(i) pledging all or any part of the revenues to secure the payment of
the notes or bonds or of any issue thereof, subject to such agreements
with noteholders or bondholders as may then exist; (ii) pledging all or
any part of the assets of the subsidiary corporation to secure the
payment of the notes or bonds or of any issue of notes or bonds, subject
to such agreements with noteholders or bondholders as may then exist;

(iii) the setting aside of reserves or sinking funds and the
regulation and disposition thereof;

(iv) limitations on the purpose to which the proceeds of sale of notes
or bonds may be applied and pledging such proceeds to secure the payment
of the notes or bonds or of any issue thereof;

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

(vi) the procedure, if any, by which the terms of any contract with
noteholders or bondholders may be amended or abrogated, the amount of
notes or bonds the holders of which must consent thereto, and the manner
in which such consent may be given;

(vii) limitations on the amount of moneys to be expended by the
subsidiary corporation for operating expenses of the subsidiary
corporation;

(viii) vesting in a trustee or trustees such property, rights, powers
and duties in trust as the subsidiary corporation may determine, which
may include any or all of the rights, powers and duties of the trustee
appointed by the bondholders pursuant to this section and limiting or
abrogating the right of the bondholders to appoint a trustee under this
section or limiting the rights, powers and duties of such trustee;

(ix) the acts or omissions to act which shall constitute a default in
the obligations and duties of the subsidiary corporation to the holders
of the notes or bonds and providing for the rights and remedies of the
holders of the notes or bonds in the event of such default, including
the right to appointment of a receiver; providing, however, that such
rights and remedies shall not be inconsistent with the general laws of
the state and the other provisions of this section; and

(x) any other matters, of like or different character, which in any
way affect the security or protection of the holders of the notes or
bonds.

(f) Any pledge made by the subsidiary corporation shall be valid and
binding from the time when the pledge is made; the revenues or property
so pledged and thereafter received by the subsidiary corporation shall
immediately be subject to the lien of such pledge without any physical
delivery thereof or further act, and 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 subsidiary corporation,
irrespective of whether such parties have notice thereof. Neither the
resolution nor any other instrument by which a pledge is created need be
recorded.

(g) Neither the members of the subsidiary corporation nor any other
person executing such notes or bonds shall be subject to any personal
liability or accountability by reason of the issuance thereof.

(h) The subsidiary corporation, subject to such agreements with
noteholders or bondholders as may then exist, shall have power out of
any funds available therefor, to purchase notes or bonds of the
subsidiary corporation which shall thereupon be cancelled.

(i) In the discretion of the subsidiary corporation, the bonds may be
secured by a trust indenture by and between the subsidiary corporation
and a corporate trustee, which may be any trust company or bank having
the powers of a trust company in the state. 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
subsidiary corporation in relation to the exercise of its corporate
powers and the custody, safeguarding and application of all moneys. The
subsidiary corporation may provide by such trust indenture for the
payment of the proceeds of the bonds and the revenues 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. If the bonds shall be secured by a trust indenture, the
bondholders shall have no authority to appoint a separate trustee to
represent them.

(j) Whether or not the notes and bonds are of such form and character
as to be negotiable instruments under the terms of the uniform
commercial code, the notes and bonds are hereby made negotiable
instruments within the meaning of and for all the purposes of the
uniform commercial code, subject only to the provisions of the notes and
bonds for registration.

12. No moneys may be borrowed by issuing bonds or notes to finance
residential housing facilities pursuant to this section unless such
subsidiary corporation has entered into an agreement or agreements with
the mayor on behalf of the city and with the Battery Park city
authority, which provide, in addition to any other terms and conditions,
that:

(a) such residential housing facilities are to provide dwelling
accommodations which are to be occupied by persons and families for whom
the ordinary operations of private enterprise cannot provide an adequate
supply of safe, sanitary and affordable housing accommodations;

(b) unless otherwise specifically provided by law, neither the state
nor the authority are to have any responsibility as to the financing of
such residential housing facilities and neither the state, the authority
nor the subsidiary corporation are to have any responsibility as to the
operation, maintenance, repair or use of such facilities;

(c) the city shall use the moneys granted to it pursuant to this
section to finance residential housing facilities in accordance with the
provisions of the housing New York program and shall comply with the
terms and conditions of the housing New York program act and this
section; and

(d) the timing, amount, maturity schedule and all other terms and
conditions of any issuance of bonds or notes by the subsidiary
corporation pursuant to this section, will provide for the Battery Park
city authority's requirements as to the development, management or
operation of the project and the effect of such terms and conditions on
the availability of excess revenues and the pledge or assignment
thereof.

13. Commencing on or before January thirty-first, nineteen hundred
eighty-seven, and on or before January thirty-first of each year
thereafter during which the city utilizes moneys which are provided to
it pursuant to this section, such subsidiary corporation shall, for the
prior and current calendar year, submit a report to the governor, the
temporary president of the senate, the speaker of the assembly, the
minority leader of the senate, the minority leader of the assembly, the
mayor and the comptroller, which shall include, but not be limited to,
the total principal amount of bonds and notes which have been and are
expected to be issued pursuant to this section and a copy of any
agreement and any amendments thereto among such subsidiary corporation,
the Battery Park city authority and the city pursuant to subdivision
twelve of this section. Such report may be a part of any other report
that such subsidiary corporation is required to make.

14. For the purposes of financing the acquisition, construction,
equipping, improvement, enlargement, rehabilitation and renovation of
residential housing facilities pursuant to this section, such subsidiary
corporation may borrow money by issuing bonds or notes in an aggregate
principal amount not exceeding four hundred million dollars plus a
principal amount of bonds or notes issued (i) to fund any related debt
service reserve fund, (ii) to provide capitalized interest, and (iii) to
provide fees and other charges and expenses, including underwriters'
discount, related to the issuance of such bonds or notes and the
maintenance of such reserves, all as determined by such subsidiary
corporation, excluding bonds or notes issued to refund outstanding bonds
or notes issued pursuant to this section. Any bonds or notes of such
subsidiary corporation shall not be or be deemed to be obligations of
the corporation or subject to or included in any authorization of or
limitation on indebtedness of the corporation.

In computing the total principal amount of bonds or notes that may at
any time be issued for any purpose under this section, the amount of the
outstanding bonds or notes that constitutes interest under the United
States Internal Revenue Code of nineteen hundred fifty-four, as amended
to the effective date of this section, shall be excluded.

15. The state does hereby pledge to and agree with the holders of any
bonds or notes issued under this section that the state will not limit
or alter the rights hereby vested in such subsidiary corporation or the
Battery Park city authority to fulfill the terms of any agreements made
with or for the benefit of the said holders thereof, or in any way
impair the rights and remedies of such holders until such bonds or
notes, together with the interest thereon, with interest on any unpaid
installments of interest, and all costs and expenses in connection with
any action or proceeding by or on behalf of such holders, are fully met
and discharged. Such subsidiary corporation is authorized to include
this pledge and agreement of the state in any agreement with the holders
of such bonds or notes.

16. The bonds or notes of such subsidiary corporation shall not be a
debt of either the state of New York, the city of New York, the Battery
Park city authority or the corporation, and neither the state, the city
of New York, such authority nor the corporation shall be liable thereon,
nor shall they be payable out of any funds other than those of such
subsidiary corporation; and such bonds or notes shall contain on the
face thereof a statement to such effect.

17. The subsidiary corporation established pursuant to this section
shall have all the privileges, immunities, tax exemptions and other
exemptions of the corporation to the extent the same are not
inconsistent with this section.