175.18 - RESERVE FUNDS AND APPROPRIATIONS.

        175.18  RESERVE FUNDS AND APPROPRIATIONS.
         1.  The authority may create and establish one or more special
      funds, each to be known as a "bond reserve fund" and shall pay into
      each bond reserve fund any moneys appropriated and made available by
      the state for the purpose of the fund, any proceeds of sale of notes
      or bonds to the extent provided in the resolutions of the authority
      authorizing their issuance and any other moneys which are available
      to the authority for the purpose of the fund from any other sources.
      Moneys held in a bond reserve fund, except as otherwise provided in
      this chapter, shall be used as required solely for the payment of the
      principal of bonds secured in whole or in part by the fund or of the
      sinking fund payments with respect to the bonds, the purchase or
      redemption of the bonds, the payment of interest on the bonds or the
      payments of any redemption premium required to be paid when the bonds
      are redeemed prior to maturity.
         2.  Moneys in a bond reserve fund shall not be withdrawn from it
      in an amount that will reduce the amount of the fund to less than the
      bond reserve fund requirement established for the fund, as provided
      in this section, except for the purpose of making payment when due of
      principal, interest, redemption premiums and the sinking fund
      payments with respect to the bonds for the payment of which other
      moneys of the authority are not available.  Any income or interest
      earned by, or incremental to, a bond reserve fund due to the
      investment of it may be transferred by the authority to other funds
      or accounts of the authority to the extent the transfer does not
      reduce the amount of that bond reserve fund below the bond reserve
      fund requirement for it.
         3.  The authority shall not at any time issue bonds, secured in
      whole or in part by a bond reserve fund if, upon the issuance of the
      bonds, the amount in the bond reserve fund will be less than the bond
      reserve fund requirement for the fund, unless the authority at the
      time of issuance of the bonds deposits in the fund from the proceeds
      of the bonds issued or from other sources an amount which, together
      with the amount then in the fund will not be less than the bond
      reserve fund requirement for the fund.  For the purposes of this
      section, the term "bond reserve fund requirement" means, as of
      any particular date of computation, an amount of money, as provided
      in the resolutions of the authority authorizing the bonds with
      respect to which the fund is established, equal to not more than ten
      percent of the outstanding principal amount of bonds secured by the
      fund.
         4.  To assure the continued operation and solvency of the
      authority for the carrying out of its corporate purposes, provision
      is made in subsection 1 for the accumulation in each bond reserve
      fund of an amount equal to the bond reserve fund requirement for the
      fund.  In order further to assure maintenance of the bond reserve
      funds, the chairperson of the authority shall, on or before July 1 of
      each calendar year, make and deliver to the governor a certificate
      stating the sum, if any, required to restore each bond reserve fund
      to its bond reserve fund requirement.  Within thirty days after the
      beginning of the session of the general assembly next following the
      delivery of the certificate, the governor may submit to both houses
      printed copies of a budget including any sum required to restore each
      bond reserve fund to its bond reserve fund requirement.  Sums
      appropriated by the general assembly and paid to the authority
      pursuant to this section shall be deposited by the authority in the
      applicable bond reserve fund.
         5.  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 to the rights
      of the holders of any bonds or notes of the authority, shall be
      repaid to the state without interest from all available operating
      revenues of the authority in excess of amounts required for the
      payment of bonds, notes or obligations of the authority, the bond
      reserve fund and operating expenses.
         6.  The authority shall cause to be delivered to the legislative
      fiscal committee within ninety days of the close of its fiscal year
      its annual report certified by an independent certified public
      accountant, who may be the accountant or a member of the firm of
      accountants who regularly audits the books and accounts of the
      authority selected by the authority.  In the event that the principal
      amount of any bonds or notes deposited in a bond reserve fund is
      withdrawn for payment of principal or interest thereby reducing the
      amount of that fund to less than the bond reserve fund requirement,
      the authority shall immediately notify the general assembly of this
      event and shall take steps to restore the fund to its bond reserve
      fund requirement from any amounts available, other than principal of
      a bond issue, which are not pledged to the payment of other bonds or
      notes.  
         Section History: Early Form
         [C81, § 175.18]