§ 462. Reserve funds, appropriations and other funds and accounts. 1.
(a) The fund shall create and establish a special fund (herein referred
to as capital reserve fund), and, to secure bonds of the fund issued
prior to the twenty-fourth day of July, nineteen hundred seventy-six,
shall pay into such capital reserve fund (1) any monies appropriated and
made available by the state or the city of New York for the purposes of
such fund, (2) any proceeds of sale of notes or bonds to the extent
provided in the resolution of the fund authorizing the issuance thereof,
and (3) any other monies which may be made available to the fund for the
purpose of such capital reserve fund from any other source or sources.
All moneys held in the capital reserve fund, established for bonds of
the fund secured by such capital reserve fund except as hereinafter
provided, shall be used solely for the payment of the principal of such
bonds as the same mature, required payments to any sinking fund
established for the amortization of such term bonds (hereinafter
referred to as "sinking fund payments"), the purchase or redemption of
such bonds, the payment of interest on such bonds 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 capital
reserve fund shall not be withdrawn therefrom at any time in such amount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 and sinking fund
payments required to be made in any succeeding fiscal year on all bonds
of the fund secured by the capital reserve fund then outstanding, except
for the purpose of paying principal, interest and sinking fund payments
becoming due on such bonds of the fund maturing and becoming due and for
the payment of which other monies of the fund are not available. For the
purposes of this subdivision, in computing the maximum amount of
principal maturing in any succeeding calendar year, the principal amount
of any term bonds which are to be amortized by sinking fund payments
shall not be included in the computation. Any income or interest earned
by, or increment to, the capital reserve fund due to the investment
thereof may be transferred to other funds or accounts to the extent it
does not reduce the amount of the capital reserve fund below the maximum
amount of principal and interest maturing and becoming due and sinking
fund payments required to be made in any succeeding calendar year on all
bonds of the fund then outstanding secured by the capital reserve fund.

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

(c) To assure the continued operation and solvency of the capital
reserve fund for the carrying out of the public purposes of this
article, provision is made in paragraph (a) of this subdivision for the
accumulation in the capital reserve fund of an amount equal to the
maximum amount of principal and interest maturing and becoming due and
sinking fund payments required to be made in any succeeding fiscal year
on all bonds of the fund then outstanding secured by the capital reserve
fund. In order further to assure such maintenance of the capital reserve
fund, the board of education shall annually request from the city of New
York and pay over to the fund, for deposit in the capital reserve fund,
such sum, if any, as shall be certified by the chairman of the fund to
the board, the mayor and the director of management and budget of the
city of New York as necessary to restore the capital reserve fund to an
amount equal to the maximum amount of principal and interest maturing
and becoming due and sinking fund payments required to be made in the
next succeeding fiscal year on the bonds of the fund then outstanding
secured by the capital reserve fund; provided, however, that such sum
shall have been first appropriated by the city to the board or shall
otherwise have been made lawfully available to the board for such
purpose. The chairman of the fund shall annually, not later than the
fifteenth day of February in each year, make and deliver to the board,
the mayor and the director of management and budget his certificate
stating the amount, if any, required to restore the capital reserve fund
to the amount aforesaid and the amount so stated, if any, shall be paid
to the fund by the board during the then current fiscal year of the
fund. In the event of the failure or inability of the board to pay over
the stated amount to the fund on or before August first of the same
year, the chairman of the fund shall forthwith make and deliver to the
comptroller of the state of New York a further certificate restating the
amount so required and, after the comptroller of the state of New York
shall have given written notice to the commissioner of education, the
mayor and director of management and budget, such amount shall be paid
over to the fund by the comptroller of the state of New York out of the
next payment of state aid apportioned to the city of New York on behalf
of the city school district of the city of New York for the support of
common schools or such other aid or assistance payable in support of
common schools as shall supersede or supplement such state aid for the
support of common schools, including federal moneys apportioned by the
state to the city of New York on behalf of the city school district for
the support of common schools. Any amount so paid over to the fund shall
be deducted from the corresponding apportionment of state education aid
or other aid or assistance for education otherwise credited to the board
of education for its purposes and shall not obligate the state to make
or entitle the city or the board of education to receive any additional
or increased apportionment or payment of state aid for school purposes.

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

2. The fund may create and establish with the comptroller or with a
trustee one or more additional funds or accounts and, subject to
agreements with bondholders and noteholders, may pay into such funds or
accounts (i) fees and charges collected by the fund, (ii) monies which
shall be transferred from the capital reserve fund pursuant to the
provisions of paragraph (a) of subdivision one of this section, and
(iii) any other monies which may be made available to the fund from any
other source or sources. The monies held in or credited to any such
reserve fund or account may, in the discretion of the fund but subject
to agreements with bondholders and noteholders, be used by the fund (a)
for the repayment of advances from the city of New York, (b) to
reimburse the board of education of the city of New York the reasonable
costs of services performed by the board for the fund pursuant to
section four hundred fifty-five of this article, (c) to pay all costs,
expenses and charges of financing, including fees and expenses of
trustees and paying agents, (d) for transfers to the capital reserve
fund, (e) for the payment of principal of and interest on bonds or notes
issued by the fund when the same shall become due, whether at maturity
or on call for redemption, and for the payment of any redemption premium
required to be paid where such bonds or notes are redeemed prior to
their stated maturities, and to purchase bonds or notes issued by the
fund, (f) for such other corporate purposes as the fund in its
discretion shall determine and provide, or (g) for payment to the board
of education for school purposes.

3. (a) The fund may create and establish one or more special funds
(herein referred to as debt service reserve funds), and, to secure bonds
of the fund issued on or after the twenty-fourth day of July, nineteen
hundred seventy-six, shall pay into each such debt service reserve fund
(1) any monies appropriated and made available by the state or city of
New York for the purposes of such fund, (2) any proceeds of sale of
notes or bonds to the extent provided in the resolution of the fund
authorizing the issuance thereof, and (3) any other monies which may be
made available to the fund for the purposes of any such debt service
reserve fund from any other source or sources. All moneys held in a debt
service reserve fund, except as hereinafter provided, shall be used
solely for the payment of the principal of bonds of the fund as the same
mature, required payments to any sinking fund established for the
amortization of term bonds (hereinafter referred to as "sinking fund
payments"), so secured, the purchase or redemption of bonds of the fund
so secured, the payment of interest on such bonds of the fund so secured
or the payment of any redemption premium required to be paid when such
bonds secured by a debt service reserve fund are redeemed prior to
maturity; provided, however, that moneys in a debt service reserve fund
shall not be withdrawn therefrom at any time in such amount as would
reduce the amount of such fund to less than the debt service reserve
fund requirement established pursuant to the agreement with the holders
of the bonds of the fund secured by such debt service reserve fund,
except for the purpose of paying principal of, interest and sinking fund
payments becoming due on such bonds of the fund maturing and becoming
due and for the payment of which other monies of the fund are not
available. Any income or interest earned by, or increment to, a debt
service reserve fund due to the investment thereof may be transferred to
other funds or accounts to the extent it does not reduce the amount of a
debt service reserve fund below the debt service reserve fund
requirement.

(b) The fund shall not issue bonds secured by a debt service reserve
fund at any time if the amount in such debt service reserve fund is less
than the debt service reserve fund requirement at the time of issuance
unless the fund, at the time of issuance of such bonds, shall deposit in
the debt service reserve fund from the proceeds of the bonds so to be
issued, or otherwise, an amount which, together with the amount then in
such fund, will be not less than the debt service reserve fund
requirement established by the agreement with the holders of the bonds
of the fund secured thereby.

(c) To assure the continued operation and solvency of the fund for the
carrying out of the public purposes of this article, provision is made
in paragraph (a) of this subdivision for the accumulation in a debt
service reserve fund of an amount equal to the debt service reserve fund
requirement on all bonds of the fund then outstanding secured by a debt
service or debt service reserve fund. In order further to assure such
maintenance of a debt service reserve fund, the board of education shall
annually request from the city of New York and pay over to the fund
after making the payment required by paragraph (c) of subdivision one of
this section for deposit in a debt service reserve fund, such sum, if
any, as shall be certified by the chairman of the fund to the board, the
mayor and the director of the budget of the city of New York as
necessary to restore such debt service reserve fund to an amount equal
to the debt service reserve fund requirement for the bonds of the fund
secured by such debt service reserve fund; provided, however, that such
sum shall have been first appropriated by the city to the board or shall
otherwise have been made lawfully available to the board for such
purpose. The chairman of the fund shall annually, not later than the
fifteenth day of February in each year, make and deliver to the board,
the mayor and the director of the budget his certificate stating the
amount, if any, required to restore a debt service reserve fund to the
amount aforesaid and the amount so stated after making the payment
required by paragraph (c) of subdivision one of this section if any,
shall be paid to the fund by the board during the then current fiscal
year of the fund. In the event of the failure or inability of the board
to pay over the stated amount to the fund on or before August first of
the same year, the chairman of the fund shall forthwith make and deliver
to the comptroller of the state of New York a further certificate
restating the amount so required and, after the comptroller of the state
of New York shall have given written notice to the commissioner, the
mayor and director of the budget, such amount after making the payment
required by paragraph (c) of subdivision one of this section shall be
paid over to the fund by the comptroller of the state of New York out of
the next payment of state aid apportioned to the city of New York on
behalf of the city school district of the city of New York for the
support of common schools or such other aid or assistance payable in
support of common schools as shall supersede or supplement such state
aid for the support of common schools, including federal moneys
apportioned by the state to the city of New York on behalf of the city
school district for the support of common schools. Any amount so paid
over to the fund under paragraph (c) of subdivision one of this section
shall be deducted from the corresponding apportionment of state
education aid or other aid or assistance for education otherwise
credited to the board of education for its purposes and shall not
obligate the state to make or entitle the city or the board of education
to receive any additional or increased apportionment or payment of state
aid for school purposes.

(d) 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
fund shall be invested shall be valued at par, or if purchased at less
than par, at their cost to the fund.

(e) The maximum debt service reserve fund requirement for any debt
service reserve fund created pursuant to this subdivision shall not
exceed the amount of principal and interest maturing and becoming due
and sinking fund payments required to be made in any year on all bonds
of the fund secured by such debt service reserve fund. For purposes of
this subdivision, in computing the maximum amount of principal maturing
in any year, the principal amount of any term bonds which are to be
amortized by sinking fund payments shall not be included in the
computation.

4. In addition to the funds permitted to be established pursuant to
subdivision two hereof, the fund may create and establish with the
comptroller or with a trustee one or more additional funds or accounts
and, subject to agreements with bondholders and noteholders, may pay
into such funds or accounts (i) fees and charges collected by the fund,
(ii) monies which shall be transferred from a debt service or reserve
fund pursuant to the provisions of paragraph (a) of subdivision one of
this section, and (iii) any other monies which may be made available to
the fund from any other source or sources. The monies held in or
credited to any such fund may, in the discretion of the fund but subject
to agreements with bondholders and noteholders, be used by the fund (a)
for the repayment of advances from the city of New York, (b) to
reimburse the board of education of the city of New York the reasonable
costs of services performed by the board for the fund pursuant to
section four hundred fifty-five of this article, (c) to pay all costs,
expenses and charges of financing, including fees and expenses of
trustees and paying agents, (d) for transfers to a debt service or a
debt service reserve fund, (e) for the payment of principal, interest
and sinking fund payments for any bonds or notes issued by the fund when
the same shall become due, whether at maturity or on call for
redemption, and for the payment of any redemption premium required to be
paid where such bonds or notes are redeemed prior to their stated
maturities, and to purchase bonds or notes issued by the fund, (f) for
such other corporate purposes as the fund in its discretion shall
determine and provide, or (g) for payment to the board of education for
school purposes.