July (pdf) - New York Power Authority

3. The 2011 Bonds have been duly and validly authorized and issued in accordance with law and in
accordance with the Resolution, and are valid, binding, direct and general obligations of the Authority,
enforceable in accordance with their terms and the terms of the Resolution and entitled to the benefits of
the Act, payable solely from the Trust Estate as and to the extent provided in the Resolution. The Authority
has good right and lawful authority under the Act to effectuate the purposes for which the proceeds of such
Bonds will be utilized, subject to obtaining such licenses, orders or other authorizations, if any, as, at the
date hereof, may be required to be obtained from any agency or regulatory body having lawful jurisdiction in
order to effectuate such purposes. The Authority has no taxing power, the Bonds are not debts of the State
or of any political subdivision of the State, other than the Authority, and the Bonds will not constitute a
pledge of the faith and credit of the State or of any political subdivision thereof, other than the Authority.
4. Under existing statutes, interest on the 2011 Bonds is exempt from personal income taxes
imposed by the State or any political subdivision thereof (including The City of New York) and the 2011
Bonds are exempt from all taxation directly imposed thereon by or under the authority of the State, except
estate or gift taxes and taxes on transfers.
5. Under existing statutes and court decisions and assuming continuing compliance with certain tax
covenants described herein, (i) interest on the 2011 A Bonds is excluded from gross income for Federal
income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the
‘‘Code’’), and (ii) interest on the 2011 A Bonds is not treated as a preference item in calculating the
alternative minimum tax imposed on individuals and corporations under the Code; such interest, however,
is included in the adjusted current earnings of certain corporations for purposes of calculating the alternative
minimum tax imposed on such corporations. In rendering the opinions in this paragraph 5, we have relied on
certain representations, certifications of fact, and statements of reasonable expectations made by the Authority
in connection with the 2011 Bonds, and we have assumed compliance by the Authority with certain ongoing
covenants to comply with applicable requirements of the Code to assure the exclusion of interest on the 2011
A Bonds from gross income under Section 103 of the Code.
6. The original issue discount on the 2011 A Bonds, if any, that has accrued and is properly allocable
to the owners thereof under Section 1288 of the Code is excludable from gross income for Federal income
tax purposes to the same extent as other interest on the 2011 A Bonds.
7. Interest on the 2011 B Bonds is wholly includable in the gross income of the owners thereof for
Federal income tax purposes.
The opinions expressed in paragraphs 1, 2 and 3 above are subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws heretofore or hereafter enacted affecting creditors’
rights, and are subject to the application of principles of equity relating to or affecting the enforcement of
contractual obligations, whether such enforcement is considered in a proceeding in equity or at law.
Except as expressly stated herein, we express no opinion regarding any other Federal or state tax
consequences with respect to the 2011 Bonds. We express no opinion on the effect of any action hereafter
taken or not taken in reliance upon an opinion of other counsel on the exclusion from gross income for
Federal income tax purposes of interest on the 2011 Bonds, or under state and local tax law.
In rendering the foregoing opinions we have made a review of such legal proceedings as we have
deemed necessary to approve the legality and validity of the 2011 Bonds. In rendering the foregoing
opinions we have not been requested to examine any document or financial or other information
concerning the Authority, other than the record of proceedings referred to above, and we express no opinion
as to the accuracy, adequacy or sufficiency of any financial or other information which has been or will be
supplied to purchasers of the 2011 Bonds.
App. A-2