N.Y. Public Authorities Law § 2439: Reserve funds and appropriations

§ 2439. Reserve funds and appropriations. The agency shall create and

establish one or more special funds to be known as debt service reserve

funds and shall 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 or notes, to the extent provided in the

resolution of the agency authorizing the issuance thereof and (c) any

other moneys which may be available to the agency for the purposes of

such funds from any other source or sources. The moneys held in or

credited to the debt service reserve fund established under this

subdivision, except as hereinafter provided, shall be used solely for

the payment of the principal of the bonds of the agency secured by such

reserve fund, as the same mature, sinking fund payments, the purchase of

such bonds of the agency, the payment of interest on such bonds of the

agency, 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moneys in any such fund shall not be withdrawn therefrom at any time in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

debt service reserve fund requirement, except for the purpose of paying

principal and interest on the bonds of the agency secured by such

reserve fund maturing and becoming due and any sinking fund payments and

for the payment of which other moneys of the agency are not available.

Moneys in any debt service reserve fund not required for immediate use

or disbursement, at the discretion of the agency may be invested in any

investments approved or authorized in accordance with the provisions of

section ninety-eight of the state finance law. 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 are invested shall be

valued at par if purchased at par, or if purchased at other than par, at

amortized value. The agency shall not issue bonds at any time if upon

issuance, the amount in the debt service reserve fund securing such

bonds will be less than the debt service reserve fund requirement,

unless the agency, 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 debt service reserve fund

requirement.

Any excess in any debt service reserve fund at the close of any fiscal

year of the agency over the debt service reserve fund requirement may be

transferred to any other fund or account of the agency as the agency may

determine.