§ 1815. Special purpose funds. 1. The following shall constitute
special purpose funds of the authority and shall, except as provided in
paragraph (g) of subdivision two of this section, be kept separate and
apart from all other funds of the authority: (a) the proceeds of sale of
special purpose bonds and notes, (b) any moneys made available by the
state for the purposes of this subtitle only, (c) any moneys made
available to the authority for the purposes of this subtitle only from
any other source or sources, including, without limitation, any federal
agency, (d) any moneys received by the authority as payments on account
of loans and loan guarantees made by the authority pursuant to this
subtitle and any moneys now on hand or hereafter received by the
authority as payments on account of mortgage loans heretofore made by
the authority pursuant to subtitle three, (e) any fees, charges or other
moneys received by the authority in respect of projects assisted by the
authority pursuant to this subtitle or on account of applications
therefor, (f) any income or interest earned by, or increment to, any
special purpose funds due to the investment thereof, and (g) the
proceeds of the sale of general purpose bonds or notes heretofore
issued; provided, however, amounts received by the authority in respect
of loan guarantees, issued or to be issued, shall be kept separate and
apart from all other funds of the authority in a special purpose loan
guarantee insurance fund as provided in subdivision three of this
section.

2. Subject to the terms of any agreement with special purpose
bondholders and noteholders, special purpose funds may be used by the
authority only (a) to make mortgage loans to local development
corporations for costs of projects and loans for machinery and equipment
as provided in section eighteen hundred fourteen hereof to improve
employment opportunities in any area of the state, (b) to pay the
expenses of the authority referred to in clause (i) of subdivision one
of section eighteen hundred twenty-eight of this title, (c) to repay
advances from the state for use as special purpose funds in accordance
with any provision of law or repayment agreement between the authority
and the director of the budget, (d) to pay the principal and redemption
price of or interest on special purpose bonds or notes, (e) to purchase
special purpose bonds or notes, (f) to pay the principal and redemption
price of or interest on any general purpose bonds or notes heretofore
issued, (g) to make deposits in the special purpose loan guarantee
insurance fund created by paragraph a of subdivision three of this
section, or (h) in connection with projects financed with special
purpose funds to exercise any of the powers conferred in this title.

3. Special purpose loan guarantee insurance fund.

a. There is hereby created a special purpose loan guarantee insurance
fund for special purpose funds in respect of loan guarantees which shall
be kept separate and apart from all other funds of the authority.

b. The authority is hereby directed and authorized to charge the
following expenses against the special purpose loan guarantee insurance
fund:

(i) any expenses which are clearly attributable, in the opinion of the
authority, to the exercise of any of the authority's powers in respect
of loan guarantees issued or reasonably expected to be issued;

(ii) any payments and all expenses attendant thereto which are
required to be paid by the authority because of a default in the payment
or in the other terms of a loan guaranteed by the authority;

(iii) all expenses and payments for the protection of the authority's
interests in connection with defaulted or delinquent loans guaranteed by
the authority, or in property possessed in consequences thereof;

(iv) all amounts required in the opinion of the authority to be set
aside to provide a reasonable reserve for losses expected to be incurred
by the authority as a result of defaults or expected defaults in the
terms and payment of loans guaranteed by the authority;

(v) all amounts required to repay advances from the state for use as
special purpose funds in respect of loan guarantees in accordance with
any provision of law or repayment agreement between the authority and
the director of the budget;

(vi) all amounts required to pay the principal and redemption price of
or interest on special purpose bonds and notes specially issued for the
purpose of providing funds to the special purpose loan guarantee
insurance fund; and

(vii) all amounts required to purchase special purpose bonds or notes
issued for the purpose of providing funds to the special purpose loan
guarantee insurance fund.

c. The following shall constitute special purpose funds in respect of
a loan guarantee:

(i) the proceeds of the issuance and sale of special purpose bonds and
notes issued for the purpose of providing funds to the special purpose
loan guarantee insurance fund;

(ii) any moneys made available by the state for the purposes of
providing funds to the special purpose loan guarantee insurance fund and
any other moneys made available for the purpose of providing funds to
the special purpose loan guarantee insurance fund from any other source
or sources, including, without limitation, any federal agency;

(iii) any moneys received in respect of loan guarantees including
amounts received as loan guarantee insurance premiums or fees, or assets
or property of any kind or nature received by the authority as a result
of a default or delinquency with respect to loans guaranteed by the
authority including the proceeds from the sale, disposal, lease or
rental of real or personal property which the authority may receive in
respect of a loan guarantee;

(iv) any moneys deposited in the special purpose loan guarantee
insurance fund pursuant to paragraph (g) of subdivision two of this
section.