N.Y. Public Authorities Law § 1299-ll: Reserve funds and appropriations

§ 1299-ll. Reserve funds and appropriations. 1. The authority may

create and establish one or more reserve funds to be known as debt

service reserve funds and may pay into such debt service reserve funds

(a) any monies appropriated and made available by the state for the

purposes of such funds, (b) any proceeds of sale of notes or bonds to

the extent provided in the resolution of the authority authorizing the

issuance thereof, and (c) any other monies which may be made available

to the authority for the purpose of such funds from any other source or

sources. The monies held in or credited to any debt service reserve fund

established under this section, except as hereinafter provided, shall be

used solely for the payment of the principal of bonds of the authority

secured by such debt service reserve fund as the same mature, the

purchase of such bonds of the authority, the payment of interest on such

bonds of the authority or the payment of any redemption premium required

to be paid when such bonds are redeemed prior to maturity; provided,

however, that the authority shall have power to provide that monies in

any such fund shall not be withdrawn therefrom at any time in such

amount as would reduce the amount of such fund to less than the maximum

amount of principal and interest maturing and becoming due in any

succeeding calendar year or years not exceeding two such years on the

bonds of the authority then outstanding and secured by such debt service

reserve fund, except for the purpose of paying principal of and interest

on such bonds of the authority secured by such debt service reserve fund

maturing and becoming due and for the payment of which other monies of

the authority are not available. Any income or interest earned by, or

increment to, any such debt service reserve fund due to the investment

thereof may be transferred by the authority to any other fund or account

of the authority and the authority shall have power to provide that any

such transfer shall not reduce the amount of such debt service reserve

fund below the maximum amount of principal and interest maturing and

becoming due in any succeeding calendar year or years not exceeding two

such years on all bonds of the authority then outstanding and secured by

such debt service reserve fund.

2. The authority shall have power to provide that it shall not issue

bonds at any time if the maximum amount of principal and interest

maturing and becoming due in any succeeding calendar year or years not

exceeding two such years on the bonds outstanding and then to be issued

and secured by a debt service reserve fund will exceed the amount of

such debt service reserve fund at the time of issuance, unless the

authority, at the time of the issuance of such bonds, shall deposit in

such debt service reserve fund from the proceeds of the bonds so to be

issued, or otherwise, an amount which, together with the amount then in

such debt service reserve fund, will be not less than the maximum amount

of principal and interest maturing and becoming due in any such

succeeding calendar year or years not exceeding two such years on the

bonds then to be issued and on all other bonds of the authority then

outstanding and secured by such debt service reserve fund.

3. In computing the amount of any debt service reserve fund for the

purposes of this section, securities in which all or a portion of such

fund shall be invested shall be valued at par, or if purchased at less

than par, at their cost to the authority.