§ 1291. 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 debt service reserve funds
(a) any monies appropriated and made available by the state for the
purposes of such funds, (b) any proceeds of sale of notes or bonds, to
the extent provided in the resolution of the corporation authorizing the
issuance thereof, and (c) any other monies which may be made available
to the corporation for the purpose of such funds from any other source
or sources. The monies held in or credited to any debt service reserve
fund established under this section, except as hereinafter provided,
shall be used solely for the payment of the principal of bonds of the
corporation secured by such debt service reserve fund as the same mature
or as payments required by the terms of any contracts therefor as
sinking fund payments become due, 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 the
corporation shall have power to provide that monies 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shall not be withdrawn therefrom at any time in such amount as would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 any
sinking fund payments becoming due and principal and interest maturing
and becoming due in any succeeding calendar year on the bonds of the
corporation then outstanding and secured by such debt service reserve
fund, except for the purpose of paying any sinking fund payments
becoming due and principal of and interest on such bonds of the
corporation secured by such debt service reserve fund maturing and
becoming due and for the payment of which other monies 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 by the corporation to any other fund or
account of the corporation and the corporation shall have power to
provide that any such transfer shall not reduce the amount of such debt
service reserve fund below the maximum amount of any sinking fund
payments becoming due and principal and interest maturing and becoming
due in any succeeding calendar year on all bonds of the corporation then
outstanding and secured by such debt service reserve fund.

2. The corporation shall not issue bonds at any time if the maximum
amount of any sinking fund payments becoming due and principal and
interest maturing and becoming due in any 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 debt service reserve
fund at the time of issuance, unless the corporation, at the time of the
issuance of such bonds, shall deposit in such 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 debt service reserve fund,
will be not less than the maximum amount of any sinking fund payments
becoming due and 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 debt
service reserve fund.

3. To assure the continued operation and solvency of the corporation
for the carrying out of the public purposes of this title, 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
any sinking fund payments becoming due and principal and interest
maturing and becoming due in any succeeding calendar year as determined
by the corporation on all bonds of the corporation then outstanding and
secured by such debt service reserve fund. In order further to assure
the maintenance of such debt service reserve funds in the respective
amounts provided therefor by the corporation in the issuance of its
bonds secured thereby, there shall be annually apportioned and paid to
the corporation for deposit in each such debt service reserve fund such
amount, if any, as shall be certified by the chief executive officer of
the corporation to the governor and director of the budget as necessary
to restore such debt service reserve fund to an amount equal to the
maximum amount provided therefor by the corporation as aforesaid. The
chief executive officer of the corporation shall annually, on or before
December first, make and deliver to the governor and director of the
budget his certificate stating the amount, if any, required to restore
each debt service reserve fund to the amount aforesaid and the amount or
amounts so certified, if any, shall be apportioned and paid to the
corporation during the then current state fiscal year. 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 forty million five hundred thirteen thousand 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.

4. For the purposes of this section, "maximum amount of any sinking
fund payments becoming due and principal and interest maturing and
becoming due in any succeeding year" means, as of the date of
computation, the largest amount of money required in any succeeding year
for the payment of interest on and maturing principal of outstanding
bonds and payments required by the terms of any contracts to be made to
any sinking fund established for the payment or redemption of such
bonds, provided that the principal amount of any bonds required to be
made to any such sinking fund during any year shall, for the purposes of
this definition, be considered as maturing in the year during which such
payment is required and not in the year in which the stated maturity of
such bonds occurs. 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 corporation.