Relates to the powers and duties of the dormitory authority of the state of New York relative to the establishment of subsidiaries for certain purposes.
STATE OF NEW YORK
________________________________________________________________________
14
Third Extraordinary Session
IN SENATE
December 3, 2010
___________
Introduced by COMMITTEE ON RULES -- (at request of the Governor) -- read
twice and ordered printed, and when printed to be committed to the
Committee on Rules
AN ACT to amend the public authorities law, in relation to the powers
and duties of the dormitory authority of the state of New York rela-
tive to the establishment of subsidiaries for certain purposes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 1678 of the public authorities law is amended by
2 adding a new subdivision 25 to read as follows:
3 25. (a) To form a subsidiary for the purpose of limiting the potential
4 liability of the authority when exercising the powers and duties
5 conferred upon the authority by article eight of this chapter in
6 connection with the exercise of remedies by the authority against North
7 General Hospital, an eligible secured borrower (as defined in chapter
8 five hundred ninety of the laws of two thousand two) located in the
9 borough of Manhattan, New York that has defaulted in its obligations
10 under its loan agreement or mortgage with the authority and for which an
11 event of default has been declared by the authority. Such subsidiary
12 created pursuant to this subdivision may exercise and perform one or
13 more of the purposes, powers, duties, functions, rights and responsibil-
14 ities of the authority other than the issuance of indebtedness, in
15 connection with real and personal property with respect to which the
16 authority holds or held a mortgage, security interest or other collat-
17 eral interest including: (i) bidding for, taking, holding, selling,
18 conveying, assigning or transferring title to such property; (ii) enter-
19 ing into leases, subleases, operating agreements, security agreements,
20 loan agreements or other encumbrances or arrangements with regard to
21 such property and acting in a manner consistent with the rights, obli-
22 gations or responsibilities of the owner of such property pursuant to
23 such agreements or encumbrances; (iii) assuming any indebtedness or
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD12326-03-0
S. 14 2
1 other liabilities secured by such property. Notwithstanding any other
2 provision of law to the contrary, but in all instances subject to the
3 provisions of any contract with bondholders, the transfer of title to
4 such subsidiary or any other actions taken by the authority or the
5 subsidiary to enforce the authority's rights under the mortgage, securi-
6 ty interest or other collateral interest or to protect, acquire, manage
7 or dispose of the property shall be deemed to be a corporate purpose of
8 the authority and shall not impair the validity of any bonds, notes or
9 other obligations of the authority to which the mortgage, security
10 interest or other collateral interest relates.
11 (b) Such subsidiary authorized by paragraph (a) of this subdivision
12 shall be established in the form of a public benefit corporation by
13 executing and filing with the secretary of state a certificate of incor-
14 poration which shall identify the authority as the entity organizing
15 such subsidiary and set forth the name of such subsidiary public benefit
16 corporation, its duration, the location of its principal office and its
17 corporate purposes as provided in this subdivision and which certificate
18 may be amended from time to time by the filing of amendments thereto
19 with the secretary of state. Such subsidiary shall be organized as a
20 public benefit corporation, shall be a body politic and corporate, and
21 shall have all the privileges, immunities, tax exemptions and other
22 exemptions of the authority. The members of such subsidiary shall be the
23 same as the members of the authority and the provisions of subdivision
24 two of section sixteen hundred ninety-one of this title shall in all
25 respects apply to such members when acting in such capacity.
26 (c) Nothing in this subdivision shall be construed to impose any
27 liabilities, obligations or responsibilities of such subsidiary upon
28 the authority and the authority shall have no liability or responsibil-
29 ity therefor unless the authority expressly agrees to assume the same.
30 (d) Such subsidiary created pursuant to this subdivision shall be
31 subject to any other provision of this chapter pertaining to subsid-
32 iaries of public authorities.
33 § 2. This act shall take effect immediately.
