Section 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.