TITLE 42

State Affairs and Government

CHAPTER 42-55

Rhode Island Housing and Mortgage Finance Corporation

SECTION 42-55-14



   § 42-55-14  Reserve funds and

appropriations. –

(a) The corporation may create and establish one or more special funds

("capital reserve funds"), and shall pay into each capital reserve fund (1) any

moneys appropriated and made available by the state for the purpose of the

fund, (2) any proceeds of sale of notes or bonds to the extent provided in the

resolution or resolutions of the corporation authorizing the issuance thereof,

and (3) any other moneys which may be made available to the corporation for the

purpose of the fund from any other source or sources. All moneys held in any

capital reserve fund, except as provided in this section, shall be used, as

required, solely from the payment of the principal of bonds secured in whole or

in part by the fund or of the sinking fund payments hereinafter mentioned with

respect to the bonds, the purchase or redemption of the bonds, the payment of

interest on the bonds or the payment of any redemption premium required to be

paid when the bonds are redeemed prior to maturity; provided, however, that

moneys in the fund shall not be withdrawn at any time in an amount that would

reduce the amount of the fund to less than the minimum capital reserve

requirement established for the fund except for the purpose of making with

respect to bonds secured in whole or in part by the fund payment when due, of

principal, interest, redemption premiums, and the sinking fund payments for the

payment of which other moneys of the corporation are not available. Any income

or interest earned by, or incremental to, any capital reserve fund due to the

investment thereof may be transferred by the corporation to other funds or

accounts of the corporation to the extent it does not reduce the amount of the

capital reserve fund below the minimum capital reserve fund requirement for

that fund.



   (b) The corporation shall not at any time issue bonds secured

in whole or in part by a capital reserve fund, if upon the issuance of bonds,

the amount in the capital reserve fund will be less than the minimum capital

reserve fund requirement for that fund, unless the corporation, at the time of

issuance of those bonds, shall deposit in the fund from the proceeds of the

bonds so to be issued, or from other sources, an amount which, together with

the amount then in the fund, will not be less than the minimum capital reserve

fund requirement for the fund; provided, however, that the corporation by

resolution may permit the issuance of bonds to provide loans to mortgage

lenders pursuant to § 42-55-10(e) without complying with the foregoing

limitation. For the purposes of this section, the term "minimum capital reserve

fund requirement" shall mean, except to the extent the corporation by

resolution may modify that term with respect to bonds issued to finance loans

to mortgage lenders pursuant to § 42-55-10(e), as of any particular date

of computation, an amount of money, as provided in the resolution or

resolutions of the corporation authorizing the bonds or notes with respect to

which that fund is established, equal to not more than the greatest of the

respective amounts, for the current or any future fiscal year of the

corporation, of annual debt service on the bonds of the corporation secured in

whole or in part by that fund, the annual debt service for any fiscal year

being the amount of money equal to the aggregate of:



   (1) All interest payable during the fiscal year on all bonds

secured in whole or in part by the fund outstanding on the date of computation;

plus



   (2) The principal amount of all of those bonds outstanding on

the date of computation which mature during that fiscal year; plus



   (3) All amounts specified in any resolution of the authority

authorizing any of the bonds as payable during the fiscal year as a sinking

fund payment with respect to any of the bonds which mature after the fiscal

year, all calculated on the assumption that those bonds will, after the date of

computation, cease to be outstanding by reason, but only by reason, of the

payment of bonds when due and application in accordance with the resolution

authorizing those bonds of all of those sinking fund payments payable at or

after the date of computation.



   (c) In computing the amount of the capital reserve funds for

the purpose of this section, securities in which all or a portion of those

funds shall be invested shall be valued at par or, if purchased at less than

par, at their cost to the corporation.



   (d) To assure the continued operation and solvency of the

corporation for carrying out of its corporate purposes, provision is made in

subsection (a) for the accumulation in each capital reserve fund of an amount

equal to the minimum capital reserve fund requirements for the fund; provided,

however, the foregoing computation shall not apply to bonds issued to fund

loans to mortgage lenders pursuant to § 42-55-10(e). In order further to

assure the maintenance of the capital reserve funds, the chairperson of the

corporation shall annually, on or before December 1, make and deliver to the

governor his or her certificate stating the sum, if any, required to restore

each capital reserve fund to the minimum capital reserve fund requirement for

the fund. During each January session of the general assembly, the governor

shall submit to the general assembly printed copies of a budget including the

sum, if any, required to restore each capital reserve fund to the minimum

capital reserve fund requirement for the fund. All sums appropriated by the

general assembly, if any, and paid to the corporation shall be deposited by the

corporation in the applicable capital reserve fund.



   (e) All amounts paid over to the corporation by the state

pursuant to the provisions of this section shall constitute and be accounted

for as advances by the state to the corporation and, subject to the rights of

the holders of any bonds or notes of the corporation, shall be repaid to the

state without interest from all available operating revenues of the corporation

in excess of amounts required for the payment of bonds, notes, or other

obligations of the corporation, the capital reserve funds, and operating

expenses.



   (f) The corporation shall create and establish any other fund

or funds that may be necessary or desirable for its corporate purposes.



History of Section.

(P.L. 1973, ch. 262, § 1.)