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This entry was published on 2014-09-22
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SECTION 20
Reserve funds and appropriations
Urban Development Corporation Act 174/68 (UDA) CHAPTER INTRO
§ 20. Reserve funds and appropriations. (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provided, however, that moneys in any such fund shall not be withdrawn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.