Section 168.00. Agreements for credit enhancement

a. The finance board of
  any municipality, school district  or  district  corporation  (herein  a
  "public  body")  is  hereby  authorized and empowered to enter into such
  agreements as it deems reasonable and appropriate, with  any  department
  or  agency  of  the  United  States  of America, the state, or any other
  financially responsible party, to facilitate the issuance, sale,  resale
  and  payment of bonds, notes, or other evidences of indebtedness of such
  public body, including, but not limited to letters of credit,  lines  of
  credit,  revolving  credit, bond insurance or other credit enhancements.
  Such agreements may provide for (i) the advance or advances of funds  on
  behalf  of  such  public  body  to pay the interest on and principal and
  premium of bonds, notes or  other  evidences  of  indebtedness  of  such
  public  body  on  their  date or dates of maturity or redemption or when
  interest is otherwise due, and (ii) the reimbursement of such advance or
  advances by such public body.
    b. Such agreements may be executed on or before the date  of  issuance
  of  the obligations to be paid pursuant thereto, provided, however, that
  any reimbursement obligation of  such  public  body  arising  from  such
  agreements  shall be deemed indebtedness of such public body (i) only as
  of the date that the corresponding advance is made pursuant to paragraph
  a of this section, and (ii) only in  the  amount  of  the  advance  made
  pursuant to such paragraph. Such agreements may include a pledge by such
  public  body of its faith and credit for the payment of principal of and
  interest on any indebtedness deemed to be contracted  as  set  forth  in
  this  paragraph, and may provide that any such indebtedness arising from
  a reimbursement obligation contracted pursuant to this section shall  be
  paid  in  accordance with the terms of such agreement. Such indebtedness
  shall be excluded in ascertaining the  power  of  such  public  body  to
  contract  indebtedness  pursuant  to  title eight and title nine of this
  article. Such agreements shall also include such terms and conditions as
  the finance board shall deem appropriate, including provisions  for  the
  payment  of  reasonable  fees and expenses by such public body in return
  for a commitment to advance funds pursuant to such agreement. Such  fees
  and  expenses  shall be deemed part of the cost of the object or purpose
  in connection with which they are incurred.
    c. Prior to procurement of any credit or liquidity enhancements,  such
  public body shall, to the extent practicable:
    (1)  consider  the  ability  of  the  credit  or liquidity enhancement
  provider to make required payments as and when due under  the  terms  of
  the appropriate governing instruments;
    (2)  consider  the  business  reputation  of  the  credit or liquidity
  enhancement provider;
    (3) consider the maximum term of the credit or  liquidity  enhancement
  relative  to the maturity of the bonds, notes or other obligations being
  credit or liquidity enhanced;
    (4) provide for the right of substitution for the credit or  liquidity
  enhancement provider in all agreements, including a provision permitting
  such substitution when the rating of the credit or liquidity enhancement
  provider  falls  below  the  probable credit rating of the issue without
  considering the credit or liquidity enhancer; and
    (5) consider the cost of the credit or liquidity enhancement  relative
  to  the  savings  or  other  benefit  likely  to be achieved through the
  utilization of the credit or liquidity enhancement.
    d.  Where  the  credit  or  liquidity  enhancement  procured   is   an
  irrevocable  letter  of  credit  or  an  acquisition  arrangement with a
  banking organization, such instrument shall be:
    (1) issued or confirmed by  a  bank  holding  company  or  its  direct
  subsidiaries, a federally chartered bank or its subsidiaries, or a state

  chartered  bank  or  its  subsidiaries,  licensed  or  authorized  to do
  business in this state or
    (2)  issued  or  confirmed by an agency or branch of a foreign banking
  institution licensed to do business in this state with  total  worldwide
  assets in excess of five billion dollars.
    e. Any such issuing banking organization referred to in paragraph d of
  this  section  shall meet the regulatory guidelines for capital adequacy
  as promulgated by the appropriate federal banking agency as  defined  in
  the Federal Deposit Insurance Act, 12 U.S.C. 1813(q).
    f.  (1) Where the credit or liquidity enhancement procured is provided
  by an insurance  company,  such  insurer  shall  be  licensed  to  write
  financial guarantee insurance in this state.
    (2)  Where  the credit or liquidity enhancement procured is from other
  than an entity described in paragraph d of this section  or  subdivision
  one  of  this paragraph, the provider shall be a financially responsible
  party, incorporated or authorized to  do  business  in  this  state  and
  having total assets in excess of ten billion dollars.
    g.  The failure of a public body to comply with paragraphs c through f
  of this section shall not invalidate or impair any credit  or  liquidity
  enhancement contract or instrument.
    h.  The finance board may, by resolution, delegate its authority under
  this section to the chief fiscal officer of such public  body  in  which
  event  the  chief  fiscal  officer  shall  exercise such power until the
  finance board, by resolution, shall elect to reassume the same.