175.18 - RESERVE FUNDS AND APPROPRIATIONS.
175.18 RESERVE FUNDS AND APPROPRIATIONS.
1. The authority may create and establish one or more special
funds, each to be known as a "bond reserve fund" 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 are available
to the authority for the purpose of the fund from any other sources.
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 Moneys in a bond reserve fund shall not be withdrawn from it
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 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 secured 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 a certificate
stating the sum, if any, required to restore each bond reserve fund
to its bond reserve fund requirement. 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 any sum required to restore each
bond reserve fund to its bond reserve fund requirement. 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. 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, 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 take steps to restore the fund to its bond reserve
fund requirement 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
[C81, § 175.18]