§ 2408. Reserve funds and appropriations. (1) The agency may create
and establish one or more reserve funds to be known as debt service
reserve funds and pay into any such reserve fund (a) any moneys
appropriated by the state for the purposes of such fund, (b) any
proceeds of sale of bonds and notes to the extent provided in the
resolution of the agency authorizing the issuance thereof, (c) any
moneys directed to be transferred by the agency to such debt service
reserve fund, and (d) any other moneys made available to the agency for
the purposes of such fund from any other source or sources. The moneys
held in or credited to any debt service reserve fund established under
this subdivision, except as hereinafter provided, shall be used solely
for the payment of the principal of bonds of the agency secured by such
debt service reserve fund, as the same mature, required payments to any
sinking fund established for the amortization of such bonds (hereinafter
referred to as "sinking fund payments"), the purchase or redemption of
such bonds of the agency, the payment of interest on such bonds of the
agency or the payment of any redemption premium required to be paid when
such bonds are redeemed prior to maturity, provided, however, that
moneys in such fund shall not be withdrawn therefrom at any time in such
amount as would reduce the amount of such fund to less than the maximum
amount of the principal and interest maturing and becoming due in any
succeeding state fiscal year on the bonds of the agency then outstanding
and secured by such reserve fund, except for the purpose of paying the
principal of and interest on such bonds of the agency secured by such
reserve fund maturing and becoming due and sinking fund payments for the
payment of which other moneys of the agency are not available. Any
income or interest earned by, or increment to, any such debt service
reserve fund due to the investment thereof may be transferred to any
other fund or account of the agency to the extent it does not reduce the
amount of such debt service reserve fund below the maximum amount of
principal and interest maturing and becoming due in any succeeding state
fiscal year on all bonds of the agency then outstanding and secured by
such reserve fund. Moneys in any debt service reserve fund not required
for immediate use or disbursement may be invested in obligations of the
state or the United States of America or obligations the principal and
interest of which are guaranteed by the state or the United States of
America or in obligations of any agency of the state or the United
States of America which may from time to time be legally purchased by
savings banks within the state as an investment of funds belonging to
them or in their control. In computing the amount of any debt service
reserve fund for the purposes of this section, securities in which all
or a portion of such reserve fund are invested shall be valued at par
or, if purchased at less than par, at their cost to the agency. If the
agency shall create and establish one or more debt service reserve funds
as herein provided, the agency shall not issue bonds at any time if the
maximum amount of principal and interest maturing and becoming due in a
succeeding state fiscal year on the bonds outstanding and then to be
issued and secured by a debt service reserve fund will exceed the amount
of such reserve fund at the time of issuance, unless the agency, at the
time of issuance of such bonds, shall deposit in such reserve fund from
the proceeds of the bonds to be issued, or otherwise an amount which
together with the amount then in such reserve fund, will be not less
than the amount of principal and interest maturing and becoming due in
any succeeding state fiscal year on the bonds then to be issued and on
all other bonds of the agency then outstanding and secured by such
reserve fund.

(2) To assure the continued operation and solvency of the agency for
the carrying out of the public purposes of this act, provision is made
in subdivision one of this section for the accumulation in each debt
service reserve fund of an amount equal to the maximum amount of
principal and interest maturing and becoming due in any succeeding state
fiscal year on all bonds of the agency then outstanding and secured by
such reserve fund. In order to further assure the continued operation
and solvency of the agency for the fulfillment of its corporate
purposes, there shall be annually apportioned and paid to the agency for
deposit in each debt service reserve fund such sum, if any, as shall be
certified by the chairman of the agency to the governor and director of
the budget, as necessary to restore any such debt service reserve fund
to an amount equal to the maximum amount of principal and interest
maturing and becoming due in any succeeding state fiscal year on the
bonds of the agency then outstanding and secured by such reserve fund;
in which case such sum so apportioned and paid shall be deposited by the
agency in such debt service reserve fund. The principal amount of bonds
secured by a debt service reserve fund or funds to which state funds are
apportionable pursuant to this subdivision shall be limited to the total
amount of bonds and notes outstanding on the effective date of this act,
plus the total amount of bonds and notes contracted after the effective
date of this act to finance projects in progress on the effective date
of this act as determined by the New York state public authorities
control board created pursuant to section fifty of this chapter whose
affirmative determination shall be conclusive as to all matters of law
and fact solely for the purposes of the limitations contained in this
subdivision, but in no event shall the total amount of bonds so secured
by such a debt service reserve fund or funds exceed three hundred
eighty-seven million dollars, excluding bonds issued to refund such
outstanding bonds until the date of redemption of such outstanding
bonds. As outstanding bonds so secured are paid, the amount so secured
shall be reduced accordingly but the redemption of such outstanding
bonds from the proceeds of refunding bonds shall not reduce the amount
so secured.

(3) The agency may create and establish such other reserve funds as it
shall deem advisable and necessary.

(4) All amounts paid over to the agency by the state pursuant to the
provisions of this section shall constitute and be accounted for as
advances by the state to the agency and, subject only to the rights of
the holders of any bonds or notes of the agency theretofore or
thereafter issued, shall be repaid to the state from all available
operating revenues of the agency in excess of amounts required for the
debt service reserve funds and operating expenses.

(5) The chairman of the agency shall make and deliver to the governor
and director of the budget on or before December first, nineteen hundred
seventy and on or before December first in each year thereafter, a
certificate stating the amount estimated to be required for payment of
or provision for expenses of the agency for the next ensuing state
fiscal year. The amount so stated for any such ensuing state fiscal year
shall be the sum of the amounts, if any, estimated for such fiscal year,
by which anticipated operating expenses will exceed available operating
revenues that the agency anticipates with reasonable certainty it will
receive during such fiscal year. To assure the continued operation and
solvency of the agency for the fulfillment of its corporate purposes,
there shall be apportioned and paid to the agency after audit by and
upon the warrant of the comptroller on vouchers certified or approved by
the officer or officers authorized by the agency, not more than the
amount so stated for expenses of the agency for such fiscal year.

(6) As used in this section, (a) the term "operating expenses" for the
fiscal year shall mean ordinary expenditures for operation and
administration of the agency; and (b) the term "available operating
revenues" for the fiscal year shall mean all amounts received on account
of mortgages acquired by the agency, fees charged by the agency, if any,
and income or interest earned or added to funds of the agency due to the
investment thereof, and not required under the terms or provisions of
any covenant or agreement with holders of any bonds or notes of the
agency to be applied to any purposes other than payment of expenses of
the agency.