N.Y. Public Authorities Law § 1977-b: Reserve funds and appropriations

§ 1977-b. Reserve funds and appropriations. 1. In addition to setting

aside of such other reserves or sinking funds as it shall deem advisable

and necessary, and the regulation and disposition thereof, the authority

shall create and establish a special fund to be known as and hereinafter

called the "Battery Park project area capital reserve fund" and shall

pay into such fund (a) any moneys appropriated and made available by the

state only for the purposes of such fund, (b) any proceeds of sale of

any bonds issued to finance the Battery Park project area to the extent

provided in the resolution of the authority authorizing the issuance

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

such fund, and (d) any other moneys made available to the authority only

for the purposes of such fund from any other source or sources. The

moneys held in or credited to such capital reserve fund, except as

hereinafter provided, shall be used solely for the payment of the

principal of such bonds or of the sinking fund payments hereinafter

mentioned with respect to such bonds, the purchase or redemption of such

bonds, the payment of interest on such bonds, or the payment of any

redemption premium required to be paid when any of such bonds are

redeemed prior to maturity; provided, however, that moneys in 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shall not be withdrawn therefrom at any time in such amount as would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 amount of the Battery

Park project area capital reserve fund requirement hereinbelow referred

to, except for the purpose of making with respect to such bonds payment,

when due, of principal, interest and the sinking fund payments

hereinafter mentioned for the payment of which other moneys of the

authority are not available. Moneys in such capital reserve fund not

required for immediate use or disbursement may be invested in

obligations of the state or the United States of America or obligations

the principal and interest of which are guaranteed by the state or the

United States of America or obligations of agencies of the United States

of America which may from time to time be legally purchased by savings

banks of the state as investment of funds belonging to them or in their

control. In computing the amount of such capital reserve fund for the

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

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 any of such bonds at any time secured

by such capital reserve fund if the amount in such capital reserve fund

at the time of issuance does not equal or exceed the amount of said

capital reserve fund requirement unless the authority at the time of

issuance of such bonds shall deposit in such fund from the proceeds of

such bonds or other sources an amount which together with the amount

then in such fund will not be less than the amount of said capital

reserve fund requirement.

3. In order to assure the continued operation and solvency of the

authority for the fulfillment of its corporate purposes with respect to

the Battery Park project area, the chairman of the authority shall

annually, on or before December first, make and deliver to the governor

and director of the budget his certificate stating the sum, if any,

required to restore such capital reserve fund to the amount as of the

particular date of computation equal to the greatest (herein sometimes

called the "Battery Park project area capital reserve fund requirement")

of the respective amounts for the then current or any future fiscal year

of the authority, of annual debt service with respect to such bonds,

such annual debt service for any fiscal year being the amount of money

equal to the aggregate of (a) all interest payable during such fiscal

year on all such bonds outstanding on said date of computation, plus (b)

the principal amount of all such bonds outstanding on said date of

computation which mature during such fiscal year, plus (c) all amounts

specified in any resolution of the authority authorizing any of such

bonds as payable during such fiscal year as a sinking fund payment with

respect to any of such bonds which mature after such fiscal year, all

calculated on the assumption that bonds will after said date of

computation cease to be outstanding by reason, but only by reason, of

the payment of bonds when due and the payment when due and application

in accordance with the resolution authorizing those bonds of all of such

sinking fund payments payable at or after said date of computation; and

there shall be annually apportioned and paid to the authority for

deposit in such capital reserve fund the sums so certified by the

chairman of the authority. All sums so apportioned and paid shall be

deposited by the authority in such capital reserve fund. The principal

amount of bonds secured by such capital reserve fund 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 capital reserve fund or funds exceed two

hundred million 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 the capital reserve

fund requirement and operating expenses.

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

fiscal year shall mean ordinary expenditures for operation and

administration of the authority; and (b) the term "available operating

revenues" for the fiscal year 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 convenant

or agreement with holders of any bonds or notes of the authority to be

applied to any purposes other than payment of expenses of the authority.

6. This section is applicable only to the Battery Park project area

capital reserve fund.