9-4-914 - Capital reserve funds -- Capital reserve fund requirement -- Establishment of other funds.
9-4-914. Capital reserve funds -- Capital reserve fund requirement --Establishment of other funds.
(1) (a) (i) The corporation may create and establish one or more reserve funds, hereinreferred to as "capital reserve funds," from:
(A) any proceeds of sale of notes or bonds, to the extent provided in the resolution orresolutions of the corporation authorizing the issuance thereof;
(B) any monies appropriated and made available by the state for the purpose of the funds;
(C) any monies directed by the corporation to be transferred to the funds; and
(D) any other monies which may be made available to the corporation for the purpose ofthe funds from any other source or sources.
(ii) All monies held in any capital reserve fund shall be used, as required, solely for thepayment of the principal of bonds or of the sinking fund payments with respect to the bonds, thepurchase or redemption of bonds, the payment of interest on bonds, or the payment of anyredemption premium required to be paid when the bonds are redeemed prior to maturity.
(b) (i) Monies in any capital reserve fund may not be withdrawn from the fund at anytime in an amount as would reduce the level of monies in the fund to less than the capital reservefund requirement, except for the purpose of paying principal and redemption price of and intereston bonds and the sinking fund payments, as the payments become due and for the payment ofwhich other monies of the corporation are not available.
(ii) Any income or interest earned by the investment of monies held in any fund may betransferred by the corporation to other funds or accounts of the corporation to the extent that thetransfer does not reduce the amount of the fund to below the capital reserve fund requirement.
(c) The corporation may provide by resolution or resolutions that it may not issue bondsunder a resolution or resolutions at any time if upon issuance the amount in the capital reservefund which will secure the bonds shall be less than the capital reserve fund requirement, unlessthe corporation at the time of issuance of the bonds shall deposit in the fund from the proceeds ofthe bonds to be so issued, or other sources, an amount which, together with the amount then inthe fund, may not be less than the capital reserve fund requirement.
(d) In computing the amount of the capital reserve funds for the purpose of this part,securities in which all or a portion of the funds shall be invested shall be valued at par, cost, or byother method of valuation as the corporation may provide by resolution.
(e) (i) "Capital reserve fund requirement" means, as of any particular date ofcomputation, and with respect to any particular issue of bonds, an amount as the corporation mayprovide, or may have previously provided, by resolution, which amount may be in the form of asum certain or a formula.
(ii) In establishing reserves and setting capital reserve fund requirements, the corporationshall consider the following:
(A) the qualifications for obtaining an investment grade rating from one or morenationally recognized bond rating agencies;
(B) the economic feasibility and marketability of the bonds being issued, taking intoaccount all security for the bonds, including the capital reserve fund; and
(C) applicable requirements pertaining to reserve funds under federal and state incometax laws and regulations.
(f) (i) To assure the continued operation and solvency of the corporation for carrying outof its corporate purposes, provision is made in Subsection (1)(b) for the accumulation in the
capital reserve funds of an amount equal to the maximum capital reserve fund requirement.
(ii) The president of the corporation shall annually, on or before December first, certifyto the governor and to the director of finance the amount, if any, required to restore the capitalreserve funds to the capital reserve fund requirement.
(iii) The governor may request from the Legislature an appropriation of the certifiedamount to restore the capital reserve funds to the capital reserve fund requirement.
(g) Amounts appropriated, if any, shall be repaid to the General Fund of the state, fromany monies in excess of the amounts which the corporation determines will keep itself-supporting.
(2) The corporation may create and establish any other funds as may be necessary ordesirable for its corporate purposes.
Amended by Chapter 378, 2010 General Session