KRS 164A.160: Reserve or replacement funds.

The corporation shall be authorized and empowered in connection with the issuance of its

bonds and notes for student loan purposes pursuant to this chapter to establish in respect

of such bonds and notes such reserve funds or replacement funds as may be re quired in

the sound discretion of the board of directors of the corporation to enable the corporation

to effectuate its proper public purposes. In the event any such reserve fund or replacement

fund created by the corporation in connection with any such bo nds or notes issued

pursuant to a general bond resolution adopted prior to January 1, 2003, should, in

violation of any contract made by the corporation with any bondholder or noteholder, be

monetarily deficient in any respect as of any date of accounting so stipulated by the

corporation, the corporation shall immediately make formal request in writing to the

secretary of the Finance and Administration Cabinet, and to the Governor of Kentucky

that sums adequate to restore such reserve fund or replacement fu nd to its contractually

required level and to pay any overdue principal and interest on any outstanding bonds and

notes of the corporation be included in the next succeeding executive budget, and that

such budget request with recommendation for approval by the General Assembly of an

appropriated legislative appropriation by the General Assembly to the corporation for the

use and benefit of such reserve fund or replacement fund be submitted to such session of

the General Assembly. In the event the next sched uled even -numbered-year regular

session of the General Assembly of Kentucky shall occur more than six (6) months after

any such request by the corporation, the corporation shall request that sums adequate to

restore such reserve fund or replacement fund to such contractually required level and to

pay any overdue principal and interest on any outstanding bonds and notes of the

corporation be made available from the Governor's contingency fund, and if such funds

are so made available the budget request herein above described in this section shall be

correspondingly reduced.