Section 2408. Reserve funds and appropriations

(1) The agency may create
  and establish one or more reserve funds to  be  known  as  debt  service
  reserve  funds  and  pay  into  any  such  reserve  fund  (a) any moneys
  appropriated by the state  for  the  purposes  of  such  fund,  (b)  any
  proceeds  of  sale  of  bonds  and  notes  to the extent provided in the
  resolution of the agency  authorizing  the  issuance  thereof,  (c)  any
  moneys  directed  to  be  transferred by the agency to such debt service
  reserve fund, and (d) any other moneys made available to the agency  for
  the  purposes  of such fund 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 agency secured by  such
  debt  service 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 agency, the payment of interest on such bonds of the
  agency or the payment of any redemption premium required to be paid when
  such bonds are redeemed  prior  to  maturity,  provided,  however,  that
  moneys in such fund shall not be withdrawn therefrom at any time in such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 the principal and interest maturing and becoming  due  in  any
  succeeding state fiscal year on the bonds of the agency then outstanding
  and  secured  by such reserve fund, except for the purpose of paying the
  principal of and interest on such bonds of the agency  secured  by  such
  reserve fund maturing and becoming due and sinking fund payments for the
  payment  of  which  other  moneys  of  the agency 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 agency 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 state
  fiscal  year  on all bonds of the agency then outstanding and secured by
  such reserve fund. Moneys in any debt service reserve fund not  required
  for  immediate use or disbursement may be invested in obligations of the
  state or the United States of America or obligations the  principal  and
  interest  of  which  are guaranteed by the state or the United States of
  America or in obligations of any agency  of  the  state  or  the  United
  States  of  America  which may from time to time be legally purchased by
  savings banks within the state as an investment of  funds  belonging  to
  them  or  in  their control. 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 agency.  If  the
  agency shall create and establish one or more debt service reserve funds
  as  herein provided, the agency shall not issue bonds at any time if the
  maximum amount of principal and interest maturing and becoming due in  a
  succeeding  state  fiscal  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 agency, at  the
  time  of issuance of such bonds, shall deposit in such reserve fund from
  the proceeds of the bonds to be issued, or  otherwise  an  amount  which
  together  with  the  amount  then in such reserve fund, will be not less
  than the amount of principal and interest maturing and becoming  due  in
  any  succeeding  state fiscal year on the bonds then to be issued and on
  all other bonds of the agency  then  outstanding  and  secured  by  such
  reserve fund.
    (2)  To  assure the continued operation and solvency of the agency 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 state
  fiscal  year  on all bonds of the agency then outstanding and secured by
  such reserve fund. In order to further assure  the  continued  operation
  and  solvency  of  the  agency  for  the  fulfillment  of  its corporate
  purposes, there shall be annually apportioned and paid to the agency for
  deposit in each debt service reserve fund such sum, if any, as shall  be
  certified  by the chairman of the agency to the governor and director of
  the budget, as necessary to restore any such debt service  reserve  fund
  to  an  amount  equal  to  the  maximum amount of principal and interest
  maturing and becoming due in any succeeding state  fiscal  year  on  the
  bonds  of  the agency then outstanding and secured by such reserve fund;
  in which case such sum so apportioned and paid shall be deposited by the
  agency in such debt service reserve fund. 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  three  hundred
  eighty-seven  million  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.
    (3) The agency may create and establish such other reserve funds as it
  shall deem advisable and necessary.
    (4) All amounts paid over to the agency by the state pursuant  to  the
  provisions  of  this  section  shall  constitute and be accounted for as
  advances by the state to the agency and, subject only to the  rights  of
  the  holders  of  any  bonds  or  notes  of  the  agency  theretofore or
  thereafter issued, shall be repaid  to  the  state  from  all  available
  operating  revenues  of the agency in excess of amounts required for the
  debt service reserve funds and operating expenses.
    (5) The chairman of the agency shall make and deliver to the  governor
  and director of the budget on or before December first, nineteen hundred
  seventy  and  on  or  before  December  first in each year thereafter, a
  certificate stating the amount estimated to be required for  payment  of
  or  provision  for  expenses  of  the  agency for the next ensuing state
  fiscal year. The amount so stated for any such ensuing state fiscal year
  shall be the sum of the amounts, if any, estimated for such fiscal year,
  by which anticipated operating expenses will exceed available  operating
  revenues  that  the agency anticipates with reasonable certainty it will
  receive during such fiscal year. To assure the continued  operation  and
  solvency  of  the  agency for the fulfillment of its corporate purposes,
  there shall be apportioned and paid to the agency  after  audit  by  and
  upon the warrant of the comptroller on vouchers certified or approved by
  the  officer  or  officers  authorized  by the agency, not more than the
  amount so stated for expenses of the agency for such fiscal year.
    (6) As used in this section, (a) the term "operating expenses" for the
  fiscal  year  shall  mean  ordinary  expenditures  for   operation   and

  administration  of  the  agency;  and  (b) the term "available operating
  revenues" for the fiscal year shall mean all amounts received on account
  of mortgages acquired by the agency, fees charged by the agency, if any,
  and income or interest earned or added to funds of the agency 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
  agency  to  be applied to any purposes other than payment of expenses of
  the agency.