N.Y. Public Authorities Law § 1860-a: Reserve funds and appropriations

§ 1860-a. 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 reserve funds (a) any moneys

appropriated and made available by the state for the purposes of such

funds, (b) any proceeds of sale of bonds and notes to the extent

provided in the resolution of the authority authorizing the issuance

thereof, (c) any moneys directed to be transferred by the authority to

such funds, and (d) any other moneys which may be made available to the

authority for the purposes of such funds from any other source or

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

established under this subdivision, except as hereinafter provided,

shall be used solely for the payment of the principal of bonds of the

authority secured by such reserve fund, as the same mature, required

payments to any sinking fund established for the amortization of such

bonds (hereinafter referred to as "sinking fund payments"), the purchase

or redemption 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provided, however, that moneys in any such fund shall not be withdrawn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 on the bonds of the

authority then outstanding and secured by such reserve fund, except for

the purpose of paying principal and interest on the bonds of the

authority secured by such reserve fund maturing and becoming due and

sinking fund payments for the payment of which other moneys 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 to any other fund or account of the authority

to the extent it does 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 on all bonds of the

authority then outstanding and secured by such reserve fund. 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 reserve

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

par, at their cost to the authority.

2. The authority shall not issue bonds at any time if the maximum

amount of principal and interest maturing and becoming due in a

succeeding calendar year on the bonds outstanding and then to be issued

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

such reserve fund at the time of issuance, unless the authority, at the

time of issuance of such bonds, shall deposit in such reserve fund from

the proceeds of the bonds so to be issued, or otherwise, an amount which

together with the amount then in such reserve fund, will be not less

than the maximum amount of principal and interest maturing and becoming

due in any succeeding calendar year on the bonds then to be issued and

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

reserve fund.

3. To assure the continued operation and solvency of the authority for

the carrying out of the public purposes of this act provision is made in

subdivision one of this section for the accumulation in each debt

service reserve fund of an amount equal to the maximum amount of

principal and interest maturing and becoming due in any succeeding

calendar year on all bonds of the authority then outstanding and secured

by such reserve fund. In order further to assure the maintenance of such

debt service reserve funds, there shall be annually apportioned and paid

to the authority for deposit in each debt service reserve fund such sum,

if any, as shall be certified by the chairman of the authority to the

governor and state director of the budget as necessary to restore such

reserve fund to an amount equal to the maximum amount of principal and

interest maturing and becoming due in any succeeding calendar year on

the bonds of the authority then outstanding and secured by such reserve

fund. The chairman of the authority shall annually, on or before

December first, make and deliver to the governor and state director of

the budget his certificate stating the sum, if any, required to restore

each such debt service reserve fund to the amount aforesaid, and the sum

or sums so certified, if any, shall be apportioned and paid to the

authority during the then current state fiscal year. The principal

amount of bonds secured by a debt service reserve fund or funds to which

state funds are apportionable pursuant to this subdivision shall be

limited to the total amount of bonds and notes outstanding on the

effective date of this act, plus the total amount of bonds and notes

contracted after the effective date of this act to finance projects in

progress on the effective date of this act as determined by the New York

state public authorities control board created pursuant to section fifty

of this chapter whose affirmative determination shall be conclusive as

to all matters of law and fact solely for the purposes of the

limitations contained in this subdivision, but in no event shall the

total amount of bonds so secured by such a debt service reserve fund or

funds exceed nine million six hundred sixty thousand dollars, excluding

bonds issued to refund such outstanding bonds until the date of

redemption of such outstanding bonds. As outstanding bonds so secured

are paid, the amount so secured shall be reduced accordingly but the

redemption of such outstanding bonds from the proceeds of refunding

bonds shall not reduce the amount so secured.

4. All amounts paid over to the authority by the state pursuant to the

provisions of this section shall constitute and be accounted for as

advances by the state to the authority and, subject only to the rights

of the holders of any bonds or notes of the authority theretofore or

thereafter issued, shall be repaid to the state from all available

operating revenues of the authority in excess of debt service reserve

fund requirements and operating expenses.

5. As used in this section, (a) the term "operating expenses" shall

mean ordinary expenditures for operation and administration of the

authority, including maintenance, repair and replacement of authority

property; and (b) the term "available operating revenues" shall mean all

amounts received on account of rentals and fees charged by the

authority, if any, and income or interest earned or added to funds of

the authority due to the investment thereof, and not required under the

terms or provisions of any covenant or agreement with holders of any

bonds or notes of the authority to be applied to any purposes other than

payment of operating expenses of the authority.