2023 New York Laws › PBA - Public Authorities › Article 8 - Miscellaneous Authorities › Title 17 - State of New York Mortgage Agency Act › Part 1 › 2408 - Reserve Funds and Appropriations.

§  2408.  Reserve  funds and appropriations. (1) The agency may create
and establish one or more reserve funds to  be  known  as  debt  service
reserve  funds  and  pay  into  any  such  reserve  fund  (a) any moneys
appropriated by the state  for  the  purposes  of  such  fund,  (b)  any
proceeds  of  sale  of  bonds  and  notes  to the extent provided in the
resolution of the agency  authorizing  the  issuance  thereof,  (c)  any
moneys  directed  to  be  transferred by the agency to such debt service
reserve fund, and (d) any other moneys made available to the agency  for
the  purposes  of such fund 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 agency secured by  such
debt  service 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 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moneys in such fund shall not be withdrawn therefrom at any time in such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 the principal and interest maturing and becoming  due  in  any
succeeding state fiscal year on the bonds of the agency then outstanding
and  secured  by such reserve fund, except for the purpose of paying the
principal of and interest on such bonds of the agency  secured  by  such
reserve fund maturing and becoming due and sinking fund payments for the
payment  of  which  other  moneys  of  the agency 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 agency 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 state
fiscal  year  on all bonds of the agency then outstanding and secured by
such reserve fund. Moneys in any debt service 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 in obligations of any agency  of  the  state  or  the  United
States  of  America  which may from time to time be legally purchased by
savings banks within the state as an investment of  funds  belonging  to
them  or  in  their control. 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 agency.  If  the
agency shall create and establish one or more debt service reserve funds
as  herein provided, the agency shall not issue bonds at any time if the
maximum amount of principal and interest maturing and becoming due in  a
succeeding  state  fiscal  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 agency, at  the
time  of issuance of such bonds, shall deposit in such reserve fund from
the proceeds of the bonds to be issued, or  otherwise  an  amount  which
together  with  the  amount  then in such reserve fund, will be not less
than the amount of principal and interest maturing and becoming  due  in
any  succeeding  state fiscal year on the bonds then to be issued and on
all other bonds of the agency  then  outstanding  and  secured  by  such
reserve fund.
(2)  To  assure the continued operation and solvency of the agency 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 state
fiscal  year  on all bonds of the agency then outstanding and secured by
such reserve fund. In order to further assure  the  continued  operation
and  solvency  of  the  agency  for  the  fulfillment  of  its corporate
purposes, there shall be annually apportioned and paid to the agency for
deposit in each debt service reserve fund such sum, if any, as shall  be
certified  by the chairman of the agency to the governor and director of
the budget, as necessary to restore any such debt service  reserve  fund
to  an  amount  equal  to  the  maximum amount of principal and interest
maturing and becoming due in any succeeding state  fiscal  year  on  the
bonds  of  the agency then outstanding and secured by such reserve fund;
in which case such sum so apportioned and paid shall be deposited by the
agency in such debt service reserve fund. 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  three  hundred
eighty-seven  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.
(3) The agency may create and establish such other reserve funds as it
shall deem advisable and necessary.
(4) All amounts paid over to the agency by the state pursuant  to  the
provisions  of  this  section  shall  constitute and be accounted for as
advances by the state to the agency and, subject only to the  rights  of
the  holders  of  any  bonds  or  notes  of  the  agency  theretofore or
thereafter issued, shall be repaid  to  the  state  from  all  available
operating  revenues  of the agency in excess of amounts required for the
debt service reserve funds and operating expenses.
(5) The chairman of the agency shall make and deliver to the  governor
and director of the budget on or before December first, nineteen hundred
seventy  and  on  or  before  December  first in each year thereafter, a
certificate stating the amount estimated to be required for  payment  of
or  provision  for  expenses  of  the  agency for the next ensuing state
fiscal year. The amount so stated for any such ensuing state fiscal year
shall be the sum of the amounts, if any, estimated for such fiscal year,
by which anticipated operating expenses will exceed available  operating
revenues  that  the agency anticipates with reasonable certainty it will
receive during such fiscal year. To assure the continued  operation  and
solvency  of  the  agency for the fulfillment of its corporate purposes,
there shall be apportioned and paid to the agency  after  audit  by  and
upon the warrant of the comptroller on vouchers certified or approved by
the  officer  or  officers  authorized  by the agency, not more than the
amount so stated for expenses of the agency for such fiscal year.
(6) As used in this section, (a) the term "operating expenses" for the
fiscal  year  shall  mean  ordinary  expenditures  for   operation   and

administration  of  the  agency;  and  (b) the term "available operating
revenues" for the fiscal year shall mean all amounts received on account
of mortgages acquired by the agency, fees charged by the agency, if any,
and income or interest earned or added to funds of the agency 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
agency  to  be applied to any purposes other than payment of expenses of
the agency.