§ 42-55-14 - Reserve funds and appropriations.
SECTION 42-55-14
§ 42-55-14 Reserve funds andappropriations. – (a) The corporation may create and establish one or more special funds("capital reserve funds"), and shall pay into each capital reserve fund (1) anymoneys appropriated and made available by the state for the purpose of thefund, (2) any proceeds of sale of notes or bonds to the extent provided in theresolution or resolutions of the corporation authorizing the issuance thereof,and (3) any other moneys which may be made available to the corporation for thepurpose of the fund from any other source or sources. All moneys held in anycapital reserve fund, except as provided in this section, shall be used, asrequired, solely from the payment of the principal of bonds secured in whole orin part by the fund or of the sinking fund payments hereinafter mentioned withrespect to the bonds, the purchase or redemption of the bonds, the payment ofinterest on the bonds or the payment of any redemption premium required to bepaid when the bonds are redeemed prior to maturity; provided, however, thatmoneys in the fund shall not be withdrawn at any time in an amount that wouldreduce the amount of the fund to less than the minimum capital reserverequirement established for the fund except for the purpose of making withrespect to bonds secured in whole or in part by the fund payment when due, ofprincipal, interest, redemption premiums, and the sinking fund payments for thepayment of which other moneys of the corporation are not available. Any incomeor interest earned by, or incremental to, any capital reserve fund due to theinvestment thereof may be transferred by the corporation to other funds oraccounts of the corporation to the extent it does not reduce the amount of thecapital reserve fund below the minimum capital reserve fund requirement forthat fund.
(b) The corporation shall not at any time issue bonds securedin whole or in part by a capital reserve fund, if upon the issuance of bonds,the amount in the capital reserve fund will be less than the minimum capitalreserve fund requirement for that fund, unless the corporation, at the time ofissuance of those bonds, shall deposit in the fund from the proceeds of thebonds so to be issued, or from other sources, an amount which, together withthe amount then in the fund, will not be less than the minimum capital reservefund requirement for the fund; provided, however, that the corporation byresolution may permit the issuance of bonds to provide loans to mortgagelenders pursuant to § 42-55-10(e) without complying with the foregoinglimitation. For the purposes of this section, the term "minimum capital reservefund requirement" shall mean, except to the extent the corporation byresolution may modify that term with respect to bonds issued to finance loansto mortgage lenders pursuant to § 42-55-10(e), as of any particular dateof computation, an amount of money, as provided in the resolution orresolutions of the corporation authorizing the bonds or notes with respect towhich that fund is established, equal to not more than the greatest of therespective amounts, for the current or any future fiscal year of thecorporation, of annual debt service on the bonds of the corporation secured inwhole or in part by that fund, the annual debt service for any fiscal yearbeing the amount of money equal to the aggregate of:
(1) 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
(2) The principal amount of all of those bonds outstanding onthe date of computation which mature during that fiscal year; plus
(3) All amounts specified in any resolution of the authorityauthorizing any of the bonds as payable during the fiscal year as a sinkingfund payment with respect to any of the bonds which mature after the fiscalyear, all calculated on the assumption that those bonds will, after the date ofcomputation, cease to be outstanding by reason, but only by reason, of thepayment of bonds when due and application in accordance with the resolutionauthorizing those bonds of all of those sinking fund payments payable at orafter the date of computation.
(c) In computing the amount of the capital reserve funds forthe purpose of this section, securities in which all or a portion of thosefunds shall be invested shall be valued at par or, if purchased at less thanpar, at their cost to the corporation.
(d) To assure the continued operation and solvency of thecorporation for carrying out of its corporate purposes, provision is made insubsection (a) for the accumulation in each capital reserve fund of an amountequal to the minimum capital reserve fund requirements for the fund; provided,however, the foregoing computation shall not apply to bonds issued to fundloans to mortgage lenders pursuant to § 42-55-10(e). In order further toassure the maintenance of the capital reserve funds, the chairperson of thecorporation shall annually, on or before December 1, make and deliver to thegovernor his or her certificate stating the sum, if any, required to restoreeach capital reserve fund to the minimum capital reserve fund requirement forthe fund. During each January session of the general assembly, the governorshall submit to the general assembly printed copies of a budget including thesum, if any, required to restore each capital reserve fund to the minimumcapital reserve fund requirement for the fund. All sums appropriated by thegeneral assembly, if any, and paid to the corporation shall be deposited by thecorporation in the applicable capital reserve fund.
(e) 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, shall be repaid to thestate without interest from all available operating revenues of the corporationin excess of amounts required for the payment of bonds, notes, or otherobligations of the corporation, the capital reserve funds, and operatingexpenses.
(f) The corporation shall create and establish any other fundor funds that may be necessary or desirable for its corporate purposes.