N.Y. Urban Development Corporation Act 174/68 § 20: Reserve funds and appropriations

§ 20. Reserve funds and appropriations. (1) The corporation 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 corporation authorizing the issuance

thereof, and (c) any other moneys which may be made available to the

corporation 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

corporation secured by such reserve fund, as the same mature, the

purchase of such bonds of the corporation, the payment of interest on

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provided, however, that moneys in any such fund shall not be withdrawn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

corporation then outstanding and secured by such reserve fund, except

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

corporation secured by such reserve fund maturing and becoming due and

for the payment of which other moneys of the corporation 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 corporation 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 corporation then

outstanding and secured by such reserve fund.

(2) The corporation 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 corporation, 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 corporation then outstanding and

secured by such reserve fund.

(3) To assure the continued operation and solvency of the corporation

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 corporation 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 corporation for deposit in each debt service reserve

fund such sum, if any, as shall be certified by the chairman of the

corporation 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 corporation then

outstanding and secured by such reserve fund. The chairman of the

corporation 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 corporation during the then

current state fiscal year.

(4) In computing any debt service reserve fund for the purposes of

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

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

par, at their cost to the corporation.

(5) With respect to any project, the corporation may create and

establish a special fund to be known as the project reserve fund and

deposit therein (a) any moneys appropriated and made available by the

state for the purposes of such fund, (b) such amount as may be

determined by the corporation in connection with any lease by the

corporation to others to be charged to such lessee for deposit in such

fund, and (c) any other moneys which may be made available to the

corporation for the purpose of such fund from any other source or

sources. All moneys held in or credited to any project reserve fund

shall be first used for the payment of the principal of and interest on

the bonds or notes of the corporation issued for the project secured by

such project reserve fund in the event that other moneys of the

corporation, other than moneys held in the debt service reserve fund,

are not available for such purpose. Upon the retirement of the bonds or

notes of the corporation issued for the project secured by such project

reserve fund, moneys so held in such fund may be used by the corporation

for any lawful purpose.