Section 1336. 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
  moneys 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 moneys which may be made available to the
  authority for the purpose  of  such  funds  from  any  other  source  or
  sources. The moneys 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  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  any  such  fund  shall  not  be  withdrawn therefrom at any time in such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 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 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 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 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.