1. The Laws of New York
  2. Unconsolidated Laws
  3. Urban Development Corporation Act 174/68


Section 20 Reserve funds and appropriations

Urban Development Corporation Act 174/68 (UDA)

(1) The corporation may create and establish one or more reserve funds to be known as debt service reserve funds and may pay into such reserve funds (a) any moneys appropriated and made available by the state for the purposes of such funds, (b) any proceeds of sale of bonds and notes to the extent provided in the resolution of the corporation authorizing the issuance thereof, and (c) any other moneys which may be made available to the corporation for the purposes of such funds 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 corporation secured by such reserve fund, as the same mature, the purchase of such bonds of the corporation, the payment of interest on such bonds of the corporation or the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity; provided, however, that moneys in any such fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount of such fund to less than the maximum amount of principal and interest maturing and becoming due in any succeeding calendar year on the bonds of the corporation then outstanding and secured by such reserve fund, except for the purpose of paying principal and interest on the bonds of the corporation secured by such reserve fund maturing and becoming due and for the payment of which other moneys of the corporation 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 corporation 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 calendar year on all bonds of the corporation then outstanding and secured by such reserve fund.

  (2) The corporation shall not issue bonds at any time if the maximum amount of principal and interest maturing and becoming due in a succeeding calendar 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 corporation, at the time of issuance of such bonds, shall deposit in such reserve fund from the proceeds of the bonds so to be issued, or otherwise, an amount which together with the amount then in such reserve fund, will be not less than the maximum amount of principal and interest maturing and becoming due in any succeeding calendar year on the bonds then to be issued and on all other bonds of the corporation then outstanding and secured by such reserve fund.

  (3) To assure the continued operation and solvency of the corporation 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 calendar year on all bonds of the corporation then outstanding and secured by such reserve fund. In order further to assure the maintenance of such debt service reserve funds, there shall be annually apportioned and paid to the corporation for deposit in each debt service reserve fund such sum, if any, as shall be certified by the chairman of the corporation to the governor and state director of the budget as necessary to restore such reserve fund to an amount equal to the maximum amount of principal and interest maturing and becoming due in any succeeding calendar year on the bonds of the corporation then outstanding and secured by such reserve fund. The chairman of the corporation shall annually, on or before December first, make and deliver to the governor and state director of the budget his certificate stating the sum, if any, required to restore each such debt service reserve fund to the amount aforesaid, and the sum or sums so certified, if any, shall be apportioned and paid to the corporation during the then current state fiscal year.

  (4) In computing any debt service reserve fund for the purposes of this section, securities in which all or a portion of such reserve fund shall be invested shall be valued at par, or if purchased at less than par, at their cost to the corporation.

  (5) With respect to any project, the corporation may create and establish a special fund to be known as the project reserve fund and deposit therein (a) any moneys appropriated and made available by the state for the purposes of such fund, (b) such amount as may be determined by the corporation in connection with any lease by the corporation to others to be charged to such lessee for deposit in such fund, and (c) any other moneys which may be made available to the corporation for the purpose of such fund from any other source or sources. All moneys held in or credited to any project reserve fund shall be first used for the payment of the principal of and interest on the bonds or notes of the corporation issued for the project secured by such project reserve fund in the event that other moneys of the corporation, other than moneys held in the debt service reserve fund, are not available for such purpose. Upon the retirement of the bonds or notes of the corporation issued for the project secured by such project reserve fund, moneys so held in such fund may be used by the corporation for any lawful purpose.