§ 23-19-17 - Capital reserve funds and appropriations.
SECTION 23-19-17
§ 23-19-17 Capital reserve funds andappropriations. – (a) The corporation may create and establish one or more special funds(referred to as "capital reserve funds") and shall pay into each capitalreserve fund:
(1) Any money appropriated and made available by the statefor the purpose of the fund;
(2) Any proceeds of the sale of notes or bonds to the extentprovided in the resolution or resolutions of the corporation authorizing theissuance of notes or bonds; and
(3) Any other money which may be made available to thecorporation for the purpose of the fund from any other source or sources.
(b) All money held in any capital reserve fund, except ashereinafter provided, shall be used, as required, solely for the payment of theprincipal of bonds secured in whole or in part by the fund or of the sinkingfund payments hereinafter mentioned with respect to the bonds, the purchase orredemption of the bonds, the payment of interest on the bonds or the payment ofany redemption premium required to be paid when the bonds are redeemed prior tomaturity; provided, however, that money in the fund shall not be withdrawn atany time in an amount that would reduce the amount of the fund to less than theminimum capital reserve requirement established for the fund as hereinafterprovided except for the purpose of making, with respect to bonds secured inwhole or in part by the fund, payment when due, of principal, interest,redemption premiums, and the sinking fund payments hereinafter mentioned forthe payment of which other moneys of the corporation are not available. Anyincome or interest earned by, or incremental to, any capital reserve fund dueto the investment thereof, may be transferred by the corporation to other fundsor accounts of the corporation to the extent it does not reduce the amount ofthe capital reserve fund below the minimum capital reserve fund requirement forthe fund.
(c) The corporation shall not at any time issue bonds securedin whole or in part by a capital reserve fund, if, upon the issuance of thebonds, the amount in the capital reserve fund will be less than the minimumcapital reserve fund requirement for the fund, unless the corporation, at thetime of the issuance of the bonds, shall deposit in the fund from the proceedsof the bonds to be issued, or from other sources, an amount which, togetherwith the amount then in the fund, will not be less than the minimum capitalreserve fund requirement for the fund.
(2) For the purposes of this section, "minimum capitalreserve fund requirement" means an amount of money, as provided in theresolution or resolutions of the corporation authorizing the bonds or noteswith respect to which the fund is established, equal to not more than thegreatest of the respective amounts, for the current or any future fiscal yearof the corporation, of annual debt service on the bonds of the corporationsecured in whole or in part by the fund, the annual debt service for any fiscalyear being the amount of money equal to the aggregate of:
(i) All interest payable during the fiscal year on all bondssecured in whole or in part by the fund outstanding on the date of computation;plus
(ii) The principal amount of all the bonds outstanding on thedate of computation which mature during the fiscal year; plus
(iii) All amounts specified in any resolution of theauthority authorizing any of the bonds as payable during the fiscal year as asinking fund payment with respect to any of the bonds which mature after thefiscal year, all calculated on the assumption that the bonds will after thedate of computation cease to be outstanding by reason, but only by reason, ofthe payment of bonds when due and application in accordance with the resolutionauthorizing those bonds of all the sinking fund payments payable at or afterthe date of computation.
(d) In computing the amount of the capital reserve funds forthe purpose of this section, securities in which all or a portion of the fundsshall be invested shall be valued as provided in the proceedings under whichthe bonds are authorized, but in no event shall be valued at a value greaterthan par.
(e) To assure the continued operation and solvency of thecorporation for the carrying out of its corporate purposes, provision is madein subsection (a) for the accumulation in each capital reserve fund of anamount equal to the minimum capital reserve fund requirements for the fund. Tofurther assure the maintenance of the capital reserve funds, the chairperson ofthe corporation shall annually, on or before December 1st, make and deliver tothe governor his or her certificate stating the sum, if any, required torestore each capital reserve fund to the minimum capital reserve fundrequirement for the fund. During each January session of the general assembly,the governor shall submit to the general assembly printed copies of a budgetincluding the sum, if any, required to restore each capital reserve fund to theminimum capital reserve fund requirement for the fund. All sums appropriated bythe general assembly, if any, and paid to the corporation shall be deposited bythe corporation in the applicable capital reserve fund.
(f) All amounts paid over to the corporation by the statepursuant to the provisions of this section shall constitute and be accountedfor as advances by the state to the corporation and, subject to the rights ofthe holders of any bonds or notes of the corporation previously or thereafterissued, shall be repaid to the state without interest from all availableoperating revenues of the corporation in excess of amounts required for thepayment of bonds, notes, or other obligations of the corporation, the capitalreserve funds and operating expenses.
(g) The corporation shall create and establish any otherfunds that may be necessary or desirable for its corporate purposes.
(h) The corporation may by resolution permit the issuance ofbonds and notes to carry out the purposes of this chapter without establishinga capital reserve fund pursuant to this section and without complying with thelimitations set forth in this section. Bonds and notes issued pursuant to thissubsection may be secured by any other funds or methods that the corporationmay in its discretion determine by resolution.