Section 1291. Reserve funds and appropriations

1. The corporation 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 monies 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 corporation authorizing the
  issuance thereof, and (c) any other monies which may be  made  available
  to  the  corporation for the purpose of such funds from any other source
  or sources. The monies 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
  corporation secured by such debt service reserve fund as the same mature
  or  as  payments  required  by  the  terms  of any contracts therefor as
  sinking fund payments become due, the purchase  of  such  bonds  of  the
  corporation, the payment of interest on such bonds of the corporation or
  the  payment  of  any  redemption  premium required to be paid when such
  bonds are  redeemed  prior  to  maturity;  provided  however,  that  the
  corporation  shall  have  power  to provide that monies 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  shall not be withdrawn therefrom at any time in  such  amount  as  would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 any
  sinking fund payments becoming due and principal and  interest  maturing
  and  becoming  due  in  any succeeding calendar year on the bonds of the
  corporation then outstanding and secured by such  debt  service  reserve
  fund,  except  for  the  purpose  of  paying  any  sinking fund payments
  becoming due and  principal  of  and  interest  on  such  bonds  of  the
  corporation  secured  by  such  debt  service  reserve fund maturing and
  becoming  due  and  for  the  payment  of  which  other  monies  of  the
  corporation  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  corporation to any other fund or
  account of the corporation and  the  corporation  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  any  sinking  fund
  payments  becoming  due and principal and interest maturing and becoming
  due in any succeeding calendar year on all bonds of the corporation then
  outstanding and secured by such debt service reserve fund.
    2. The corporation shall not issue bonds at any time  if  the  maximum
  amount  of  any  sinking  fund  payments  becoming due and principal and
  interest maturing and becoming due in any 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 debt service reserve
  fund at the time of issuance, unless the corporation, at the time of the
  issuance of such bonds, shall deposit in such debt service reserve  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 any sinking fund payments
  becoming due and 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 corporation then  outstanding  and  secured  by  such  debt
  service reserve fund.
    3.  To  assure the continued operation and solvency of the corporation
  for the carrying out of the public purposes of this title, 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
  any  sinking  fund  payments  becoming  due  and  principal and interest
  maturing and becoming due in any succeeding calendar year as  determined
  by  the corporation on all bonds of the corporation then outstanding and
  secured by such debt service reserve fund. In order  further  to  assure

  the  maintenance  of  such  debt service reserve funds in the respective
  amounts provided therefor by the corporation  in  the  issuance  of  its
  bonds  secured  thereby, there shall be annually apportioned and paid to
  the  corporation for deposit in each such debt service reserve fund such
  amount, if any, as shall be certified by the chief executive officer  of
  the  corporation to the governor and director of the budget as necessary
  to restore such debt service reserve fund to  an  amount  equal  to  the
  maximum  amount  provided  therefor by the corporation as aforesaid. The
  chief executive officer of the corporation shall annually, on or  before
  December  first,  make  and  deliver to the governor and director of the
  budget his certificate stating the amount, if any, required  to  restore
  each debt service reserve fund to the amount aforesaid and the amount or
  amounts  so  certified,  if  any,  shall  be apportioned and paid to the
  corporation 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  forty  million  five  hundred  thirteen 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.  For  the  purposes of this section, "maximum amount of any sinking
  fund payments becoming due  and  principal  and  interest  maturing  and
  becoming  due  in  any  succeeding  year"  means,  as  of  the  date  of
  computation, the largest amount of money required in any succeeding year
  for the payment of interest on and  maturing  principal  of  outstanding
  bonds  and payments required by the terms of any contracts to be made to
  any sinking fund established for  the  payment  or  redemption  of  such
  bonds,  provided  that  the principal amount of any bonds required to be
  made to any such sinking fund during any year shall, for the purposes of
  this definition, be considered as maturing in the year during which such
  payment is required and not in the year in which the stated maturity  of
  such  bonds  occurs. 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 corporation.