16.27 - RESERVE FUNDS AND APPROPRIATIONS.

        16.27  RESERVE FUNDS AND APPROPRIATIONS.
         1.  The authority may create and establish one or more special
      funds, to be known as "bond reserve funds", and shall pay into
      each bond reserve fund any moneys appropriated and made available by
      the state for the purpose of the fund, any proceeds of sale of notes
      or bonds to the extent provided in the resolutions of the authority
      authorizing their issuance, and any other moneys which may be
      available to the authority for the purpose of the fund from any other
      sources. All moneys held in a bond reserve fund, except as otherwise
      provided in this chapter, shall be used as required solely for the
      payment of the principal of bonds secured in whole or in part by the
      fund or of the sinking fund payments with respect to the bonds, the
      purchase or redemption of the bonds, the payment of interest on the
      bonds or the payments of any redemption premium required to be paid
      when the bonds are redeemed prior to maturity.
         2.  Moneys in a bond reserve fund shall not be withdrawn from it
      at any time in an amount that will reduce the amount of the fund to
      less than the bond reserve fund requirement established for the fund,
      as provided in this section, except for the purpose of making, with
      respect to bonds secured in whole or in part by the fund, payment
      when due of principal, interest, redemption premiums and the sinking
      fund payments with respect to the bonds for the payment of which
      other moneys of the authority are not available.  Any income or
      interest earned by, or incremental to, a bond reserve fund due to the
      investment of it may be transferred by the authority to other funds
      or accounts of the authority to the extent the transfer does not
      reduce the amount of that bond reserve fund below the bond reserve
      fund requirement for it.
         3.  The authority shall not at any time issue bonds, secured in
      whole or in part by a bond reserve fund if, upon the issuance of the
      bonds, the amount in the bond reserve fund will be less than the bond
      reserve fund requirement for the fund, unless the authority at the
      time of issuance of the bonds deposits in the fund from the proceeds
      of the bonds issued or from other sources an amount which, together
      with the amount then in the fund will not be less than the bond
      reserve fund requirement for the fund. For the purposes of this
      section, the term "bond reserve fund requirement" means, as of
      any particular date of computation, an amount of money, as provided
      in the resolutions of the authority authorizing the bonds with
      respect to which the fund is established, equal to not more than ten
      percent of the outstanding principal amount of bonds of the authority
      secured in whole or in part by the fund.
         4.  To assure the continued operation and solvency of the
      authority for the carrying out of its corporate purposes, provision
      is made in subsection 1 for the accumulation in each bond reserve
      fund of an amount equal to the bond reserve fund requirement for the
      fund. In order further to assure maintenance of the bond reserve
      funds, the chairperson of the authority shall, on or before July 1 of
      each calendar year, make and deliver to the governor the
      chairperson's certificate stating the sum, if any, required to
      restore each bond reserve fund to the bond reserve fund requirement
      for that fund. Within thirty days after the beginning of the session
      of the general assembly next following the delivery of the
      certificate, the governor may submit to both houses printed copies of
      a budget including the sum, if any, required to restore each bond
      reserve fund to the bond reserve fund requirement for that fund. Any
      sums appropriated by the general assembly and paid to the authority
      pursuant to this section shall be deposited by the authority in the
      applicable bond reserve fund.
         5.  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 to the
      rights of the holders of any bonds or notes of the authority
      theretofore or thereafter issued, shall be repaid to the state
      without interest from all available operating revenues of the
      authority in excess of amounts required for the payment of bonds,
      notes or obligations of the authority, the bond reserve fund and
      operating expenses.
         6.  The authority shall cause to be delivered to the legislative
      fiscal committee within ninety days of the close of its fiscal year
      its annual report certified by an independent certified public
      accountant (who may be the accountant or a member of the firm of
      accountants who regularly audits the books and accounts of the
      authority) selected by the authority.  In the event that the
      principal amount of any bonds or notes deposited in a bond reserve
      fund is withdrawn for payment of principal or interest thereby
      reducing the amount of that fund to less than the bond reserve fund
      requirement, the authority shall immediately notify the general
      assembly of this event and shall thereafter take steps to restore
      such bond reserve to the bond reserve fund requirement for that fund
      from any amounts available, other than principal of a bond issue,
      which are not pledged to the payment of other bonds or notes.  
         Section History: Early Form
         [C77, 79, 81, § 220.27] 
         Section History: Recent Form
         C93, § 16.27
         Referred to in § 16.1