§ 1299-j. Reserve funds and appropriations. 1. The authority 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 authority authorizing the
issuance thereof, and (c) any other monies which may be made available
to the authority 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 authority
secured by such debt service reserve fund as the same mature, the
purchase of such bonds of the authority, the payment of interest on such
bonds of the authority or the payment of any redemption premium required
to be paid when such bonds are redeemed prior to maturity; provided,
however, that the authority 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any such fund shall not be withdrawn therefrom at any time in such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 principal and interest maturing and becoming due in any
succeeding calendar year or years not exceeding two such years on the
bonds of the authority then outstanding and secured by such debt service
reserve fund, except for the purpose of paying principal of and interest
on such bonds of the authority secured by such debt service reserve fund
maturing and becoming due and for the payment of which other monies of
the authority 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 authority to any other fund or account
of the authority and the authority 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 principal and interest maturing and
becoming due in any succeeding calendar year or years not exceeding two
such years on all bonds of the authority then outstanding and secured by
such debt service reserve fund.

2. The authority shall have power to provide that it shall not issue
bonds at any time if the maximum amount of principal and interest
maturing and becoming due in any succeeding calendar year or years not
exceeding two such years 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
authority, 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 principal and interest maturing and becoming due in any such
succeeding calendar year or years not exceeding two such years on the
bonds then to be issued and on all other bonds of the authority then
outstanding and secured by such debt service reserve fund.

3. 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 authority.