KRS 198A.165: Authorization for establishing reserve and replacement funds.

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

bonds and notes for housing purposes pursuant to this chapter to establish in respect of

such bonds and notes such reserve funds or replacement funds as may be require d 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 bond is sue or note issue

should, in violation of any contract made by the corporation with any bondholder or note

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

the corporation, the corporation shall immediately make f ormal 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 fund 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 to the

corporation for the use and benefit of such r eserve fund or replacement fund. In the event

the next scheduled 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 hereinabove described in this section shall be correspondingly reduced.