§ 1860-a. 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 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 authority authorizing the issuance
thereof, (c) any moneys directed to be transferred by the authority to
such funds, and (d) any other moneys which may be made available to the
authority 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
authority secured by such reserve fund, as the same mature, required
payments to any sinking fund established for the amortization of such
bonds (hereinafter referred to as "sinking fund payments"), the purchase
or redemption 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provided, however, that moneys in any such fund shall not be withdrawn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
authority then outstanding and secured by such reserve fund, except for
the purpose of paying principal and interest on the bonds of the
authority secured by such reserve fund maturing and becoming due and
sinking fund payments for the payment of which other moneys 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 to any other fund or account of the authority
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
authority then outstanding and secured by such reserve fund. 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 reserve
fund are invested shall be valued at par or, if purchased at less than
par, at their cost to the authority.

2. The authority 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 authority, 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 authority then outstanding and secured by such
reserve fund.

3. To assure the continued operation and solvency of the authority 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 authority 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 authority for deposit in each debt service reserve fund such sum,
if any, as shall be certified by the chairman of the authority 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 authority then outstanding and secured by such reserve
fund. The chairman of the authority 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
authority 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 nine million six hundred sixty 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. All amounts paid over to the authority by the state pursuant to the
provisions of this section shall constitute and be accounted for as
advances by the state to the authority and, subject only to the rights
of the holders of any bonds or notes of the authority theretofore or
thereafter issued, shall be repaid to the state from all available
operating revenues of the authority in excess of debt service reserve
fund requirements and operating expenses.

5. As used in this section, (a) the term "operating expenses" shall
mean ordinary expenditures for operation and administration of the
authority, including maintenance, repair and replacement of authority
property; and (b) the term "available operating revenues" shall mean all
amounts received on account of rentals and fees charged by the
authority, if any, and income or interest earned or added to funds of
the authority due to the investment thereof, and not required under the
terms or provisions of any covenant or agreement with holders of any
bonds or notes of the authority to be applied to any purposes other than
payment of operating expenses of the authority.