N.Y. Public Authorities Law § 1815: Special purpose funds

§ 1815. Special purpose funds. 1. The following shall constitute

special purpose funds of the authority and shall, except as provided in

paragraph (g) of subdivision two of this section, be kept separate and

apart from all other funds of the authority: (a) the proceeds of sale of

special purpose bonds and notes, (b) any moneys made available by the

state for the purposes of this subtitle only, (c) any moneys made

available to the authority for the purposes of this subtitle only from

any other source or sources, including, without limitation, any federal

agency, (d) any moneys received by the authority as payments on account

of loans and loan guarantees made by the authority pursuant to this

subtitle and any moneys now on hand or hereafter received by the

authority as payments on account of mortgage loans heretofore made by

the authority pursuant to subtitle three, (e) any fees, charges or other

moneys received by the authority in respect of projects assisted by the

authority pursuant to this subtitle or on account of applications

therefor, (f) any income or interest earned by, or increment to, any

special purpose funds due to the investment thereof, and (g) the

proceeds of the sale of general purpose bonds or notes heretofore

issued; provided, however, amounts received by the authority in respect

of loan guarantees, issued or to be issued, shall be kept separate and

apart from all other funds of the authority in a special purpose loan

guarantee insurance fund as provided in subdivision three of this

section.

2. Subject to the terms of any agreement with special purpose

bondholders and noteholders, special purpose funds may be used by the

authority only (a) to make mortgage loans to local development

corporations for costs of projects and loans for machinery and equipment

as provided in section eighteen hundred fourteen hereof to improve

employment opportunities in any area of the state, (b) to pay the

expenses of the authority referred to in clause (i) of subdivision one

of section eighteen hundred twenty-eight of this title, (c) to repay

advances from the state for use as special purpose funds in accordance

with any provision of law or repayment agreement between the authority

and the director of the budget, (d) to pay the principal and redemption

price of or interest on special purpose bonds or notes, (e) to purchase

special purpose bonds or notes, (f) to pay the principal and redemption

price of or interest on any general purpose bonds or notes heretofore

issued, (g) to make deposits in the special purpose loan guarantee

insurance fund created by paragraph a of subdivision three of this

section, or (h) in connection with projects financed with special

purpose funds to exercise any of the powers conferred in this title.

3. Special purpose loan guarantee insurance fund.

a. There is hereby created a special purpose loan guarantee insurance

fund for special purpose funds in respect of loan guarantees which shall

be kept separate and apart from all other funds of the authority.

b. The authority is hereby directed and authorized to charge the

following expenses against the special purpose loan guarantee insurance

fund:

(i) any expenses which are clearly attributable, in the opinion of the

authority, to the exercise of any of the authority's powers in respect

of loan guarantees issued or reasonably expected to be issued;

(ii) any payments and all expenses attendant thereto which are

required to be paid by the authority because of a default in the payment

or in the other terms of a loan guaranteed by the authority;

(iii) all expenses and payments for the protection of the authority's

interests in connection with defaulted or delinquent loans guaranteed by

the authority, or in property possessed in consequences thereof;

(iv) all amounts required in the opinion of the authority to be set

aside to provide a reasonable reserve for losses expected to be incurred

by the authority as a result of defaults or expected defaults in the

terms and payment of loans guaranteed by the authority;

(v) all amounts required to repay advances from the state for use as

special purpose funds in respect of loan guarantees in accordance with

any provision of law or repayment agreement between the authority and

the director of the budget;

(vi) all amounts required to pay the principal and redemption price of

or interest on special purpose bonds and notes specially issued for the

purpose of providing funds to the special purpose loan guarantee

insurance fund; and

(vii) all amounts required to purchase special purpose bonds or notes

issued for the purpose of providing funds to the special purpose loan

guarantee insurance fund.

c. The following shall constitute special purpose funds in respect of

a loan guarantee:

(i) the proceeds of the issuance and sale of special purpose bonds and

notes issued for the purpose of providing funds to the special purpose

loan guarantee insurance fund;

(ii) any moneys made available by the state for the purposes of

providing funds to the special purpose loan guarantee insurance fund and

any other moneys made available for the purpose of providing funds to

the special purpose loan guarantee insurance fund from any other source

or sources, including, without limitation, any federal agency;

(iii) any moneys received in respect of loan guarantees including

amounts received as loan guarantee insurance premiums or fees, or assets

or property of any kind or nature received by the authority as a result

of a default or delinquency with respect to loans guaranteed by the

authority including the proceeds from the sale, disposal, lease or

rental of real or personal property which the authority may receive in

respect of a loan guarantee;

(iv) any moneys deposited in the special purpose loan guarantee

insurance fund pursuant to paragraph (g) of subdivision two of this

section.