Section 1680-L. The special disability fund financing

1. As used in this
  section the following terms shall have the following meanings:
    (a) "Ancillary bond facility" means  any  interest  rate  exchange  or
  similar  agreement  or  any  bond  insurance policy, letter of credit or
  other  credit  enhancement  facility,  liquidity  facility,   guaranteed
  investment  or  reinvestment  agreement,  or  other  similar  agreement,
  arrangement or contract.
    (b) "Benefited party" means  any  person,  firm  or  corporation  that
  enters  into  an ancillary bond facility with the authority according to
  the provisions of this section.
    (c) "Bonds" means any bonds, notes, certificates of participation  and
  other  evidence  of  indebtedness  issued  by  the authority pursuant to
  subdivision five of this section.
    (d) "Bond owners or owners of bonds" means any  registered  owners  of
  bonds.
    (e) "Chair" means the chair of the workers' compensation board.
    (f)  "Code"  means the United States Internal Revenue Code of 1986, as
  amended.
    (g) "Costs  of  issuance"  means  any  item  of  expense  directly  or
  indirectly  payable  or reimbursable by the authority and related to the
  authorization, sale, or issuance of bonds, including,  but  not  limited
  to,  underwriting fees and fees and expenses of professional consultants
  and fiduciaries.
    (h) "Debt service" means actual debt service, comprised of  principal,
  interest  and  associated  costs,  as  defined  in  subparagraph five of
  paragraph (h) of subdivision eight of section fifteen  of  the  workers'
  compensation law.
    (i)  "Director  of the budget" or "director" means the director of the
  budget of the state of New York.
    (j) "Financing agreement" means any agreement authorized  pursuant  to
  subdivision  four of this section between the chair and the commissioner
  of taxation and finance, and the authority.
    (k)  "Financing  costs"  means  all  costs  of  issuance,  capitalized
  interest,  capitalized operating expenses of the authority and, pursuant
  to the financing agreement, the initial capitalized  operating  expenses
  of  the  waiver  agreement  management office and debt service reserves,
  fees,  cost  of  any  ancillary  bond  facility,  and  any  other  fees,
  discounts, expenses and costs related to issuing, securing and marketing
  the   bonds  including,  without  limitation,  any  net  original  issue
  discount.
    (l) "Investment securities" means:  (i)  general  obligations  of,  or
  obligations  guaranteed by, any state of the United States of America or
  political subdivision thereof, or the District of Columbia or any agency
  or instrumentality of any of them, receiving one of  the  three  highest
  long-term unsecured debt rating categories available for such securities
  of  at  least  one  independent  rating  agency, or (ii) certificates of
  deposit,  savings  accounts,  time  deposits  or  other  obligations  or
  accounts  of  banks  or  trust  companies  in the state, secured, if the
  authority shall so require, in such  manner  as  the  authority  may  so
  determine,  or  (iii) obligations in which the comptroller is authorized
  to invest pursuant to either section ninety-eight or  ninety-eight-a  of
  the  state  finance  law,  or (iv) investments which the commissioner of
  taxation and finance is permitted to make with surplus or reserve moneys
  of the special disability fund under subparagraph seven of paragraph (h)
  of subdivision eight of section fifteen  of  the  workers'  compensation
  law.
    (m)  "Interest  rate  exchange  or  similar agreement" means a written
  contract entered into in connection with the issuance of bonds  or  with

  such bonds outstanding with a counterparty to provide for an exchange or
  swap  of  payments  based upon fixed and/or variable interest rates, and
  shall be for exchanges in currency of the United States of America only.
    (n)  "Net  proceeds"  means the amount of proceeds remaining following
  each sale of bonds which are not required by the authority for  purposes
  of  this  section to pay or provide for debt service or financing costs,
  as provided in the financing agreement.
    (o) "Operating expenses" means the reasonable or  necessary  operating
  expenses  of  the  authority  for  purposes  of this section, including,
  without limitation, the costs of: retention of auditors, preparation  of
  accounting  and  other reports, maintenance of the ratings on the bonds,
  any operating expense reserve fund, insurance premiums,  ancillary  bond
  facilities,   rebate   payments,   annual  meetings  or  other  required
  activities  of  the  authority,   and   professional   consultants   and
  fiduciaries.
    (p)  "Outstanding",  when  used  with  respect to bonds, shall exclude
  bonds that shall have been paid in  full  at  maturity,  or  shall  have
  otherwise  been  refunded, redeemed, defeased or discharged, or that may
  be deemed not  outstanding  pursuant  to  agreements  with  the  holders
  thereof.
    (q)  "Pledged  assessments  revenues",  "pledged revenues" or "pledged
  assessments" means  receipts  of  special  disability  fund  assessments
  imposed  pursuant  to  subparagraph four of paragraph (h) of subdivision
  eight of section fifteen of the workers' compensation  law  and  pledged
  for  the payment of debt service on the bonds or amounts due pursuant to
  an ancillary bond facility, including the right to receive same.
    (r) "State" means the state of New York.
    (s) "Special disability fund financing agreement" means  an  agreement
  authorized and created pursuant to subparagraph five of paragraph (h) of
  subdivision  eight  of section fifteen of the workers' compensation law,
  as same by its terms and bond proceedings, may be amended.
    (t) "Waiver agreement" means waiver agreements entered  into  pursuant
  to section thirty-two of the workers' compensation law.
    (u)  "Waiver  agreement  management  office"  shall  mean  the  office
  described in  paragraph  (e)  of  section  thirty-two  of  the  workers'
  compensation law.
    2.   The  authority  is  hereby  authorized  to  finance  the  special
  disability fund established by paragraph (h)  of  subdivision  eight  of
  section  fifteen  of the workers' compensation law and to enter into one
  or more special disability fund financing agreements described  in  such
  subdivision.  All  of  the provisions of the authority relating to bonds
  and notes which are not inconsistent with the provisions of this section
  shall apply to obligations authorized by this section, including but not
  limited to the power to establish  adequate  reserves  therefor  and  to
  issue  renewal  notes or refunding bonds thereof. The provisions of this
  section shall apply solely to obligations authorized by this section and
  shall  not  include  liabilities,  assets   or   revenues   other   than
  liabilities,  assets  or revenues derived from the authority solely from
  the special disability fund.
    3. It is found and declared that the special disability fund no longer
  serves the purposes for which it was  created,  adds  to  the  time  and
  expense  of  proceedings  before  the workers' compensation board and to
  employers' costs for workers' compensation insurance; that the  creation
  and  operation  of  a waiver agreement management office of the workers'
  compensation board, to manage, maintain and negotiate waiver  agreements
  on  behalf  of  the  special  disability  fund  can  reduce  the special
  disability  fund's  unfunded  liability;  that  the  reduction  of  such
  liability  and  the closing of the fund to new claims will over the long

  term  reduce  assessments  paid  to  the  fund  by  insurance  carriers,
  self-insurers  and the state insurance fund, as well as the employers to
  whom these costs are passed on; that in the absence of this section  the
  annual cost of such assessments is expected to rise; that the settlement
  of   claims  and  other  actions  undertaken  by  the  waiver  agreement
  management office will  lower  the  administrative  costs  of  insurance
  carriers,  self-insurers  and  the  state  insurance  fund; that revenue
  obligations issued by the authority and secured by a special  assessment
  annually  levied,  imposed and collected on and from insurance carriers,
  self-insurers and the state insurance fund for the governmental  purpose
  of  funding  waiver agreements amortized over a substantial period would
  allow the state to settle and otherwise manage claims  as  a  means  for
  reducing  the fund's liabilities and the assessments needed to pay them,
  thereby furthering the policy of  the  state  to  reduce  the  costs  of
  workers'  compensation  and to improve the business climate in the state
  while compensating injured workers and honoring the obligations  of  the
  special  disability fund; that all costs of the authority in relation to
  this section shall be paid from assessments set forth in  paragraph  (h)
  of  subdivision  eight  of  section fifteen of the workers' compensation
  law; and that, therefore, the provisions of this  section  are  for  the
  public  benefit  and  good  and  the  authorization  as provided in this
  section of the issuance of  revenue  obligations  of  the  authority  is
  declared  to  be  for  a public purpose and the exercise of an essential
  governmental function.
    4. (a) The authority, the commissioner of taxation and finance and the
  chair,  in  consultation  with  the  special  disability  fund  advisory
  committee  shall  execute a financing agreement prior to the issuance of
  any bonds. Such agreement shall contain such terms and conditions as are
  necessary to carry out and effectuate  the  purposes  of  this  section,
  including  covenants  with  respect to the assessment and enforcement of
  the assessments, the application and use of the proceeds of the sale  of
  bonds  to preserve the tax-exemption on the bonds, the interest on which
  is intended  to  be  exempt  from  taxation.  The  state  shall  not  be
  authorized to make any covenant, pledge, promise or agreement purporting
  to  bind the state with respect to pledged revenues, except as otherwise
  specifically authorized by this section.
    (b) The net proceeds of the bonds shall  be  deposited  in  accordance
  with  the  financing agreement and this section. The financing agreement
  shall provide for the application of the net  bond  proceeds,  and  such
  bond  proceeds  shall  be  used,  for any of the following purposes: (i)
  funding of waiver agreements, (ii) payment  of  financing  costs,  (iii)
  funding  anticipated  liabilities  of  the special disability fund, (iv)
  funding contract awards pursuant to subparagraph two of paragraph (h) of
  section thirty-two of the workers' compensation law and (v)  such  other
  purposes  as  are set forth in the financing agreement. Not inconsistent
  with this section, the authority may provide restrictions on the use and
  investment of net proceeds  of  the  bonds  and  other  amounts  in  the
  financing  agreement  or  otherwise  in  a  tax  regulatory agreement as
  necessary or desirable to assure that they are exempt from taxation.
    5. (a) (i) The authority shall have power and is hereby authorized  to
  issue  its  bonds at such times and in an aggregate principal amount not
  to exceed an amount to be determined by the superintendent of  insurance
  as  necessary  to  address  all  or  a  portion of the incurred unfunded
  liabilities of the special disability fund, but  in  no  case  exceeding
  twenty-five  percent of the unfunded liability of the special disability
  fund as of a date no later than  July  first,  two  thousand  seven,  as
  certified  to  the authority by a qualified third party. The bonds shall
  be issued for the following corporate purposes: (A)  funding  of  waiver

  agreements,  (B)  payment  of  financing  costs, (C) funding anticipated
  liabilities of the special disability fund, (D) funding contract  awards
  pursuant  to  paragraph  two of subdivision (h) of section thirty-two of
  the  workers'  compensation  law  and (E) such other purposes as are set
  forth  in  the  financing  agreement.  The   foregoing   limitation   on
  outstanding  aggregate principal shall not apply to prevent the issuance
  of bonds to refund bonds.
    (ii) Each issuance of bonds shall be authorized by a resolution of the
  authority, provided, however, that any such resolution  authorizing  the
  issuance  of bonds may delegate to an officer of the authority the power
  to issue such bonds from time to time and to fix the details of any such
  issues of  bonds  by  an  appropriate  certificate  of  such  authorized
  officer.  Every  issue  of  the  bonds  of the authority for the special
  disability fund shall be special revenue obligations  payable  from  and
  secured  by  a  pledge  of  revenues  and  other assets, including those
  proceeds of such bonds deposited in a reserve fund for  the  benefit  of
  bondholders, earnings on funds of the authority and such other funds and
  assets  as  may  become  available,  upon  such  terms and conditions as
  specified by the authority in the resolution under which the  bonds  are
  issued or in a related trust indenture.
    (iii) The authority shall have the power and is hereby authorized from
  time to time to issue bonds, in consultation with the special disability
  fund advisory committee to refund any bonds issued under this section 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 other corporate purposes under  this  section.
  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.
    (b)  The  bonds  of  the authority of each issue shall be dated, shall
  bear interest (which, in the opinion of bond counsel to  the  authority,
  may  be  includable in or excludable from the gross income of the owners
  for federal income tax  purposes)  at  such  fixed  or  variable  rates,
  payable at or prior to maturity, and shall mature at such time or times,
  as  may be determined by the authority and may be made redeemable before
  maturity, at the option of the authority, at such price  or  prices  and
  under  such  terms  and conditions as may be fixed by the authority. The
  principal and interest of such bonds may be made payable in  any  lawful
  medium.  The  resolution  or  the  certificate of the authorized officer
  shall determine the form of the bonds, either registered  or  book-entry
  form,  and  the  manner  of  execution  of  the  bonds and shall fix the
  denomination or denominations of the bonds and the place  or  places  of
  payment  of  principal and interest thereof, which may be at any bank or
  trust company  within  or  outside  the  state.  If  any  officer  whose
  signature  or a facsimile thereof appears on any bonds shall cease to be
  such officer before the  delivery  of  such  bonds,  such  signature  or
  facsimile  shall  nevertheless  be valid and sufficient for all purposes
  the same as if such officer had remained in office until such  delivery.
  The  authority  may  also  provide  for  temporary  bonds  and  for  the
  replacement of  any  bond  that  shall  become  mutilated  or  shall  be
  destroyed or lost.
    (c)  The  authority  may  sell  such bonds in such manner, either at a
  public or private sale and either on a competitive or negotiated  basis,
  provided  no  such  bonds  may  be sold by the authority at private sale
  unless such sale and the terms thereof have been approved in writing  by
  the  comptroller  of  the  state of New York. The proceeds of such bonds
  shall be disbursed for the purposes for which  such  bonds  were  issued
  under  such  restrictions  as the financing agreement and the resolution

  authorizing the issuance of such bonds or the  related  trust  indenture
  may  provide.  Such bonds shall be issued upon approval of the authority
  and without any other approvals, filings, proceedings or  the  happening
  of  any  other  conditions or things other than the approvals, findings,
  proceedings, conditions, and things that are specified and  required  by
  this  section.  Provided,  however, that any issuance of bonds under the
  authority of this section shall be considered a project for the purposes
  of section fifty-one of this chapter, and subject to approval under such
  section.
    (d) Any pledge made by the authority shall be valid and binding at the
  time the pledge is made. The assets,  property,  revenues,  reserves  or
  earnings  so  pledged  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 against the authority, irrespective of whether
  such parties have notice thereof. Notwithstanding any other provision of
  law  to  the  contrary, neither the bond resolution nor any indenture or
  other instrument, including the financing agreement, by which  a  pledge
  is  created  or  by  which  the  authority's interest in pledged assets,
  property, revenues, reserves or earnings thereon  is  assigned  need  be
  filed,  perfected  or recorded in any public records in order to protect
  the pledge thereof or perfect the lien thereof as against third parties,
  except that a copy  thereof  shall  be  filed  in  the  records  of  the
  authority.
    (e)  Whether  or  not  the bonds of the authority are of such form and
  character as to be negotiable instruments under the terms of the uniform
  commercial code, the bonds are hereby made  negotiable  instruments  for
  all   purposes,  subject  only  to  the  provisions  of  the  bonds  for
  registration.
    (f) At the sole discretion of the authority, any bonds issued  by  the
  authority  and  any ancillary bond facility made under the provisions of
  this subdivision may be secured by a resolution or  trust  indenture  by
  and  between the authority and the trust indenture trustee, which may be
  any trust company or bank having the powers of a trust company,  whether
  located  within  or  outside  the  state,  provided it is carried out in
  accordance with section sixty-nine-d of  the  state  finance  law.  Such
  trust  indenture  or resolution providing for the issuance of such bonds
  may provide for the creation and maintenance of  such  reserves  as  the
  authority shall determine to be proper and may include covenants setting
  forth  the  duties of the authority in relation to the bonds, the income
  of the authority, or the financing agreement. Such  trust  indenture  or
  resolution   may   contain   provisions:  (i)  respecting  the  custody,
  safeguarding  and  application  of  all  moneys  and  securities;   (ii)
  protecting  and enforcing the rights and remedies (pursuant to the trust
  indenture and the financing agreement) of the owners of  the  bonds  and
  any  other  benefited  party  as may be reasonable and proper and not in
  violation of law; (iii) concerning the rights, powers and duties of  the
  trustee  appointed  by  bondholders  pursuant  to  paragraph (g) of this
  subdivision; or (iv) limiting or abrogating the right of the bondholders
  to appoint a trustee. It shall be lawful for any bank or  trust  company
  which  may  act  as  depository of the proceeds of bonds or of any other
  funds or obligations received on behalf of the authority to furnish such
  indemnifying bonds or to pledge such securities as may  be  required  by
  the  authority.  Any such trust indenture or resolution may contain such
  other provisions as the authority may deem  reasonable  and  proper  for
  priorities  and  subordination  among  the owners of the bonds and other
  beneficiaries. For purposes of  this  section,  a  "resolution"  of  the
  authority shall include any trust indenture authorized thereby.

    (g) The authority may enter into, amend or terminate, as it determines
  to   be  necessary  or  appropriate,  any  ancillary  bond  facility  in
  consultation with the special disability fund advisory committee (i)  to
  facilitate  the  issuance, sale, resale, purchase, repurchase or payment
  of  bonds, interest rate savings or market diversification or the making
  or  performance  of  interest  rate  exchange  or  similar   agreements,
  including  without  limitation  bond  insurance,  letters  of credit and
  liquidity facilities, (ii) to attempt to manage or hedge risk or achieve
  a desirable effective interest rate or cash flow, or (iii) to place  the
  obligations or investments of the authority, as represented by the bonds
  or the investment of reserved bond proceeds or other pledged revenues or
  other  assets,  in  whole or in part, on the interest rate, cash flow or
  other basis decided in consultation with  the  special  disability  fund
  advisory  committee,  which  facility  may  include  without  limitation
  contracts  commonly  known  as  interest  rate   exchange   or   similar
  agreements,   forward   purchase   contracts  or  guaranteed  investment
  contracts and futures or  contracts  providing  for  payments  based  on
  levels   of,   or   changes  in,  interest  rates.  These  contracts  or
  arrangements may be entered into by the authority in connection with, or
  incidental to, entering into, or maintaining  any  (i)  agreement  which
  secures bonds of the authority or (ii) investment, or contract providing
  for   investment   of  reserves  or  similar  facility  guaranteeing  an
  investment rate for a period of years not to exceed the underlying  term
  of  the bonds. The determination by the authority that an ancillary bond
  facility or  the  amendment  or  termination  thereof  is  necessary  or
  appropriate  as  aforesaid  shall  be  conclusive.  Any  ancillary  bond
  facility may  contain  such  payment,  security,  default,  remedy,  and
  termination  provisions  and  payments and other terms and conditions as
  determined by the authority,  after  giving  due  consideration  to  the
  creditworthiness of the counterparty or other obligated party, including
  any  rating  by  any  nationally recognized rating agency, and any other
  criteria as may be appropriate.
    (h) The authority, subject to such agreements with bondholders as  may
  then  exist  (including  provisions  which  restrict  the  power  of the
  authority to purchase bonds), or with the providers  of  any  applicable
  ancillary bond facility, shall have the power out of any funds available
  therefor  to  purchase  bonds  of  the  authority,  which may or may not
  thereupon be cancelled, at a price not substantially exceeding:
    (i) if the bonds  are  then  redeemable,  the  redemption  price  then
  applicable, including any accrued interest; or
    (ii)  if  the  bonds are not then redeemable, the redemption price and
  accrued interest applicable on the first date after such  purchase  upon
  which the bonds become subject to redemption.
    (i)  Neither  the  members  of  the  authority  nor  any  other person
  executing the bonds or an ancillary bond facility of the authority shall
  be subject to any personal  liability  by  reason  of  the  issuance  or
  execution and delivery thereof.
    (j)  The  maturities  of  the bonds shall not exceed thirty years from
  their respective issuance dates.
    6. Neither any bond issued pursuant to this section nor any  ancillary
  bond  facility  of  the  authority  shall  constitute  a  debt  or moral
  obligation of the state or  a  state  supported  obligation  within  the
  meaning  of any constitutional or statutory provision or a pledge of the
  faith and credit of the state or of the taxing power of the  state,  and
  the state shall not be liable to make any payments thereon nor shall any
  bond  or  any  ancillary  bond  facility  be payable out of any funds or
  assets other than pledged revenues and other assets of the authority and
  other funds  and  assets  of  or  available  to  the  authority  pledged

  therefor, and the bonds and any ancillary bond facility of the authority
  shall  contain  on  the  face thereof or other prominent place thereon a
  statement to the foregoing effect.
    7.  (a)  Subject to the provisions of subdivision five of this section
  in the event  that  the  authority  shall  default  in  the  payment  of
  principal  of,  or interest on, or sinking fund payment on, any issue of
  bonds after the same shall become due, whether at maturity or upon  call
  for  redemption,  or  in the event that the authority or the state shall
  fail to comply with any agreement made with the holders of any issue  of
  bonds,  the holders of twenty-five percent in aggregate principal amount
  of  the  bonds  of  such  issue  then  outstanding,  by  instrument   or
  instruments filed in the office of the clerk of the county of Albany and
  proved  or acknowledged in the same manner as a deed to be recorded, may
  appoint a trustee to  represent  the  holders  of  such  bonds  for  the
  purposes herein provided.
    (b)  Such  trustee,  may,  and  upon written request of the holders of
  twenty-five percent in principal amount of such bonds  then  outstanding
  shall, in his or its own name:
    (i)  by  suit,  action  or  proceeding  in  accordance  with the civil
  practice law and rules, enforce all rights of the bondholders, including
  the right to require the authority to carry out any agreement with  such
  holders and to perform its duties under this section;
    (ii) bring suit upon such bonds;
    (iii)  by  action  or  suit, require the authority to account as if it
  were the trustee of an express trust for the holders of such bonds;
    (iv) by action or suit,  enjoin  any  acts  or  things  which  may  be
  unlawful or in violation of the rights of the holders of such bonds; and
    (v)  declare all such bonds due and payable, and if all defaults shall
  be made good, then, with the  consent  of  the  holders  of  twenty-five
  percent  of  the  principal amount of such bonds then outstanding, annul
  such declaration and its consequences, provided, however,  that  nothing
  in  this  subdivision  shall  preclude  the authority from agreeing that
  consent of the provider of an ancillary bond facility is required for an
  acceleration of related bonds in the event of a  default  other  than  a
  failure to pay principal of or interest on the bonds when due.
    (c)  The  supreme court shall have jurisdiction of any suit, action or
  proceeding by the trustee on behalf of such bondholders.  The  venue  of
  any  such  suit,  action  or  proceeding  shall be laid in the county of
  Albany.
    (d) Before declaring the principal  of  bonds  due  and  payable,  the
  trustee shall first give thirty days notice in writing to the authority.
    8.  All  monies of the authority from whatever source derived shall be
  paid to the treasurer of the authority and shall be deposited  forthwith
  in  a  bank  or  banks  designated  by the authority. The monies in such
  accounts shall be paid out or withdrawn on the order of such  person  or
  persons  as  the  authority may authorize to make such requisitions. All
  deposits of such monies shall either be secured by  obligations  of  the
  United  States  or of the state or of any municipality of a market value
  equal at all times to the amount on deposit, or monies of the  authority
  may  be  deposited in money market funds rated in the highest short-term
  or long-term rating category  by  at  least  one  nationally  recognized
  rating  agency.  To  the  extent  practicable,  and  consistent with the
  requirements of the authority, all such monies  shall  be  deposited  in
  interest   bearing   accounts.   The   authority   shall   have   power,
  notwithstanding the provisions of this section,  to  contract  with  the
  holders of any bonds as to the custody, collection, security, investment
  and  payment  of any monies of the authority or any monies held in trust
  or otherwise for the payment of bonds or any way to  secure  bonds,  and

  carry  out  any  such contract notwithstanding that such contract may be
  inconsistent with the provisions of this section. Monies held  in  trust
  or  otherwise for the payment of bonds or in any way to secure bonds and
  deposits  of  such moneys may be secured in the same manner as monies of
  the authority and all banks and trust companies are authorized  to  give
  such  security  for  such  deposits.  Any  monies  of  the authority not
  required for immediate use or disbursement may, at the discretion of the
  authority, be invested in accordance with law and such guidelines as are
  approved by the authority.
    9. (a) It is hereby determined that the carrying out by the  authority
  of its corporate purposes under this section are in all respects for the
  benefit  of the people of the state of New York and are public purposes.
  Accordingly, the authority shall be regarded as performing an  essential
  governmental function in the exercise of the powers conferred upon it by
  this  section.  The  property  of  the  authority,  its  income  and its
  operations  shall  be  exempt  from   taxation,   assessments,   special
  assessments  and  ad valorem levies. The authority shall not be required
  to pay any fees, taxes, special ad valorem levies or assessments of  any
  kind,  whether  state  or  local,  including,  but  not limited to, real
  property taxes, franchise taxes, sales taxes or  other  taxes,  upon  or
  with  respect  to  any  property  owned by it or under its jurisdiction,
  control or supervision, or upon  the  uses  thereof,  or  upon  or  with
  respect  to  its  activities  or operations in furtherance of the powers
  conferred upon it by this section,  or  upon  or  with  respect  to  any
  assessments,  rates, charges, fees, revenues or other income received by
  the authority.
    (b) Any bonds issued pursuant to this section, their transfer and  the
  income therefrom shall, at all times, be exempt from taxation except for
  estate or gift taxes and taxes on transfers.
    (c)  The  state  hereby  covenants  with  the  purchasers and with all
  subsequent holders and transferees of  bonds  issued  by  the  authority
  pursuant  to  this  section,  in  consideration of the acceptance of and
  payment for the bonds, that the bonds of the authority  issued  pursuant
  to  this section and the income therefrom and all assessments, revenues,
  moneys, and other property received by the authority and pledged to  pay
  or to secure the payment of such bonds shall at all times be exempt from
  taxation.
    (d)  In  the  case of any bonds of the authority, interest on which is
  intended to be exempt from  federal  income  tax,  the  authority  shall
  prescribe  restrictions  on  the use of the proceeds thereof and related
  matters only as are necessary or desirable to assure such exemption, and
  the recipients of such proceeds shall be bound  thereby  to  the  extent
  such  restrictions shall be made applicable to them. Any such recipient,
  including, but not limited to, the state, the state  insurance  fund,  a
  public  benefit  corporation,  and  a school district or municipality is
  authorized to execute a tax regulatory agreement with the  authority  or
  the  state,  as  the case may be, and the execution of such an agreement
  may be treated by the authority or the state as a condition to receiving
  any such proceeds.
    10. (a) The state, solely with respect to the resources of the special
  disability fund  and  as  set  forth  in  the  special  disability  fund
  financing  agreement,  covenants  with the purchasers and all subsequent
  owners and transferees of bonds issued by the authority pursuant to this
  section in consideration of the acceptance of the payment of the  bonds,
  until  the  bonds,  together with the interest thereon, with interest on
  any unpaid installment  of  interest  and  all  costs  and  expenses  in
  connection  with  any  action or proceeding on behalf of the owners, are
  fully met and discharged or  unless  expressly  permitted  or  otherwise

  authorized  by  the  terms  of  each  special  disability fund financing
  agreement and any contract made or entered into by the authority with or
  for the benefit of such owners, (i) that  in  the  event  bonds  of  the
  authority  are  sold  as federally tax-exempt bonds, the state shall not
  take any action or fail to take action that would result in the loss  of
  such federal tax exemption on said bonds, (ii) that the state will cause
  the  workers' compensation board to impose, charge, raise, levy, collect
  and apply the pledged assessments and other revenues, receipts, funds or
  moneys pledged for the payment of debt service requirements in each year
  in which bonds are outstanding, and (iii) further, that  the  state  (A)
  will  not  materially  limit or alter the duties imposed on the workers'
  compensation board, the authority and other officers of the state by the
  special disability fund financing agreement  and  the  bond  proceedings
  authorizing the issuance of bonds with respect to application of pledged
  assessments or other revenues, receipts, funds or moneys pledged for the
  payment  of  debt  service  requirements,  (B) will not issue any bonds,
  notes or other evidences of indebtedness, other than the  bonds,  having
  any  rights arising out of paragraph (h) of subdivision eight of section
  fifteen of the workers' compensation law or this section or  secured  by
  any  pledge  of or other lien or charge on the pledged revenues or other
  receipts, funds or moneys  pledged  for  the  payment  of  debt  service
  requirements,  (C)  will  not  create or cause to be created any lien or
  charge on the pledged revenues, other than  a  lien  or  pledge  created
  thereon  pursuant  to  said sections, (D) will carry out and perform, or
  cause to be carried out and performed, each and every promise, covenant,
  agreement or contract made or entered into  by  the  special  disability
  fund  financing  agreement,  by  the authority or on its behalf with the
  bond owners of any bonds, (E) will not in any  way  impair  the  rights,
  exemptions  or  remedies  of  the  bond  owners, and (F) will not limit,
  modify, rescind, repeal or otherwise alter the rights or obligations  of
  the  appropriate  officers  of  the state to impose, maintain, charge or
  collect the assessments and other revenues or receipts constituting  the
  pledged  revenues  as may be necessary to produce sufficient revenues to
  fulfill the terms of the proceedings authorizing  the  issuance  of  the
  bonds,   including  pledged  revenue  coverage  requirements,  provided,
  however, (i) the remedies available to the authority and the bondholders
  for any breach of the pledges and agreements of the state set  forth  in
  this  subclause  shall  be limited to injunctive relief, (ii) nothing in
  this subdivision shall prevent the authority from issuing  evidences  of
  indebtedness  (A)  which  are  secured by a pledge or lien which is, and
  shall on the face thereof, be expressly subordinate and  junior  in  all
  respects  to  every  lien  and  pledge  created  by  or pursuant to said
  sections, or (B) which are secured by a pledge of or lien on  moneys  or
  funds  derived on or after the date every pledge or lien thereon created
  by or pursuant to said sections shall be discharged and  satisfied,  and
  (iii)  nothing  in  this  subdivision  shall  preclude  the  state  from
  exercising its power,  through  a  change  in  law,  to  limit,  modify,
  rescind,  repeal  or  otherwise  alter  the  character  of  the  pledged
  assessments or revenues or to substitute like or  different  sources  of
  assessments,  taxes, fees, charges or other receipts as pledged revenues
  if and when adequate provision shall be made by law for  the  protection
  of  the  holders  of outstanding bonds pursuant to the proceedings under
  which the bonds are issued, including changing or altering the method of
  establishing the special assessments.
    The authority is authorized to include this covenant of the state,  as
  a  contract  of  the state, in any agreement with the owner of any bonds
  issued  pursuant  to  this  section  and  in  any  credit  facility   or
  reimbursement  agreement  with  respect  to  such bonds. Notwithstanding

  these pledges and agreements by the state, the attorney general  may  in
  his  or  her  discretion  enforce  any and all provisions related to the
  special disability fund, without limitation.
    (b)  Prior  to  the  date  which  is  one  year  and one day after the
  authority no longer has  any  bonds  issued  pursuant  to  this  section
  outstanding,  the  authority shall have no authority to file a voluntary
  petition under chapter nine of  the  federal  bankruptcy  code  or  such
  corresponding  chapter  or  sections  as  may,  from time to time, be in
  effect, and neither any public officer nor any organization,  entity  or
  other  person  shall  authorize  the  authority to be or become a debtor
  under chapter nine or any successor or corresponding chapter or sections
  during such period.  The state hereby covenants with the owners  of  the
  bonds of the authority that the state will not limit or alter the denial
  of authority under this subdivision during the period referred to in the
  preceding sentence. The authority is authorized to include this covenant
  of  the  state,  as  a  contract of the state, in any agreement with the
  owner of any bonds issued pursuant to this section.
    (c) To the extent deemed appropriate by the authority any  pledge  and
  agreement  of  the  state  with respect to the bonds as provided in this
  section may be extended to, and included in, any ancillary bond facility
  as a pledge and agreement of  the  state  with  the  authority  and  the
  benefited party.
    11. The bonds of the authority are hereby made securities in which all
  public  officers  and  bodies  of  this state and all municipalities and
  political subdivisions, all insurance  companies  and  associations  and
  other  persons  carrying  on  an insurance business, all banks, bankers,
  trust companies,  savings  banks  and  savings  associations,  including
  savings   and   loan   associations,  building  and  loan  associations,
  investment companies and other persons carrying on a  banking  business,
  all   administrators,   guardians,   executors,   trustees   and   other
  fiduciaries, and all  other  persons  whatsoever  who  are  now  or  may
  hereafter  be  authorized  to invest in bonds or in other obligations of
  the state, may properly and legally invest funds, including capital,  in
  their  control  or  belonging  to  them.  The bonds are also hereby made
  securities which may be deposited with and may be received by all public
  officers and bodies of  the  state  and  all  municipalities,  political
  subdivisions  and  public  corporations  for  any  purpose for which the
  deposit of bonds or other  obligations  of  the  state  is  now  or  may
  hereafter be authorized.
    12.  (a) An action against the authority for death, personal injury or
  property damage or founded on tort shall not be commenced more than  one
  year  and  ninety  days  after  the  cause  of action thereof shall have
  accrued nor unless a notice of claim shall have been served on a  member
  of  the  authority  or  officer  or  employee  thereof designated by the
  authority  for  such  purpose,  within  the  time  limited  by,  and  in
  compliance  with  the  requirements  of  section  fifty-e of the general
  municipal law.
    (b) The venue of every action,  suit  or  special  proceeding  brought
  against  the  authority or concerning the validity of this section shall
  be laid in the county of Albany.
    (c) The bonds, and any obligation of the authority under any ancillary
  bond facility, may contain a recital that they are issued  or  executed,
  respectively,   pursuant   to  this  section,  which  recital  shall  be
  conclusive  evidence  of  the  validity  of  the  bonds  and  any   such
  obligation,  respectively,  and the regularity of the proceedings of the
  authority relating thereto.
    13. Any action or proceeding to which the authority or the  people  of
  the  state  may  be  parties,  in  which  any  question arises as to the

  validity of this section, shall be preferred over all other civil causes
  of action or cases, except election causes of action or  cases,  in  all
  courts  of  the state and shall be heard and determined in preference to
  all  other  civil  business  pending  therein,  except  election causes,
  irrespective of position on the calendar. The same preference  shall  be
  granted  upon  application of the authority or its counsel in any action
  or proceeding questioning the validity of  this  section  in  which  the
  authority may be allowed to intervene.