N.Y. Public Authorities Law § 1977-c: Reserve funds and appropriations for loans, advances and mortgage financing to housing companies

§ 1977-c. Reserve funds and appropriations for loans, advances and

mortgage financing to housing companies.

1. Definitions.

(a) "Revenues". All amounts received on account of fees and other

charges imposed by the authority for loans, advances and mortgage loans,

if any, and all or any part of the moneys received in payment of loans,

advances and mortgage loans and interest thereon, including prepayments.

(b) "Housing loan capital reserve fund requirement". The amount of

money, as of any particular date of computation and with reference to

outstanding bonds issued by the authority for the purposes of financing

loans, advances and mortgage loans to housing companies, equal to the

greatest 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.

For purposes of the housing loan capital reserve fund requirement,

"annual debt service" shall mean an amount of money equal to the

aggregate of:

(i) All interest payable during such fiscal year on all such bonds

outstanding on said date of computation; plus,

(ii) The principal amount of all such bonds outstanding on said date

of computation which mature during such fiscal year; plus,

(iii) 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, such sinking fund payments to be 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.

(c) "Operating expenses". All ordinary expenditures for operation and

administration of the authority in connection with its loans, advances

and mortgage loans to housing companies.

(d) "Amortized value". When used with respect to securities purchased

at a premium above or a discount below par, the value as of any given

date obtained by dividing the total amount of the premium or discount at

which such securities were purchased by the number of days remaining to

maturity on such securities at the time of such purchase and by

multiplying the amount so calculated by the number of days having passed

since the date of such purchase; and (a) in the case of securities

purchased at a premium, by deducting the product thus obtained from the

purchase price, and (b) in the case of securities purchased at a

discount, by adding the product thus obtained to the purchase price.

2. Reserve funds. (a) In addition to the setting aside of such other

reserves or sinking funds as it shall deem advisable and necessary, and

the regulation and disposition thereof, the authority may create and

establish one or more capital reserve funds for bonds issued by the

authority for the purposes of financing loans, advances and mortgage

loans to housing companies.

(b) The authority shall pay into each such fund: (i) any monies

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

such fund; (ii) any proceeds of the sale of any bonds issued to the

extent provided in the resolution of the authority authorizing the

issuance of such bonds; (iii) any moneys directed to be transferred by

the authority to such fund; and (iv) any other moneys made available to

the authority only for the purposes of such fund from any other source

or sources.

(c) The moneys held in or credited to each such capital reserve fund,

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

the principal of bonds issued to finance loans, advances and mortgage

loans to housing companies or of the sinking fund payments 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 capital reserve 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 housing loan capital

reserve fund requirement therefor, except for the purpose of making with

respect to such bonds payment, when due, of principal, interest and the

sinking fund payments for the payment of which other moneys of the

authority are not available. All income or interest earned by, or

increment to, each such capital reserve fund due to the investment

thereof may be transferred by the authority to other funds or accounts

of the authority to the extent it does not reduce the amount of such

capital reserve fund below the housing loan capital reserve fund

requirement therefor.

(d) Moneys in such a 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 of and interest on

which are guaranteed by the state or the United States of America or

obligations of agencies of the United States of America or obligations

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 a 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 if purchased at par or, if purchased at other

than par, at their amortized value.

(e) The authority shall not issue any bonds at any time secured by

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

which will secure such bonds at the time of issuance does not equal or

exceed the amount of the housing loan capital reserve fund requirement

for such fund 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 the housing loan capital reserve fund

requirement for such fund.

3. Preservation of solvency. (a) In order to assure the continued

operation and solvency of the authority for the fulfillment of its

corporate purposes, 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

each capital reserve fund to the housing loan capital reserve fund

requirement therefor. There shall be annually apportioned and paid to

the authority for deposit in each such capital reserve fund the sum so

certified by the chairman of the authority as required to restore such

capital reserve fund to the housing loan capital reserve fund

requirement therefor. All sums so apportioned and paid shall be

deposited by the authority in the respective capital reserve funds. The

principal amount of bonds secured by a capital reserve fund or funds to

which state funds are apportionable pursuant to this paragraph 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 paragraph, but in no event shall the total

amount of bonds so secured by such a capital reserve fund or funds

exceed eighty-five 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.

(b) 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

revenues of the authority in excess of housing loan capital reserve fund

requirements and operating expenses.

4. Applicability. This section is applicable solely to capital reserve

funds for bonds issued to finance housing loans, advances and mortgage

loans and is not applicable to the Battery Park project area capital

reserve fund.