2006 Utah Code - 9-4-914 — Capital reserve funds -- Capital reserve fund requirement -- Establishment of other funds.

     9-4-914.   Capital reserve funds -- Capital reserve fund requirement -- Establishment of other funds.
     (1) (a) (i) The corporation may create and establish one or more reserve funds, herein referred to as "capital reserve funds", from:
     (A) any proceeds of sale of notes or bonds, to the extent provided in the resolution or resolutions of the corporation authorizing the issuance thereof;
     (B) any monies appropriated and made available by the state for the purpose of the funds;
     (C) any monies directed by the corporation to be transferred to the funds; and
     (D) any other monies which may be made available to the corporation for the purpose of the funds from any other source or sources.
     (ii) All monies held in any capital reserve fund shall be used, as required, solely for the payment of the principal of bonds or of the sinking fund payments with respect to the bonds, the purchase or redemption of bonds, the payment of interest on bonds, or the payment of any redemption premium required to be paid when the bonds are redeemed prior to maturity.
     (b) (i) Monies in any capital reserve fund may not be withdrawn from the fund at any time in an amount as would reduce the level of monies in the fund to less than the capital reserve fund requirement, except for the purpose of paying principal and redemption price of and interest on bonds and the sinking fund payments, as the payments become due and for the payment of which other monies of the corporation are not available.
     (ii) Any income or interest earned by the investment of monies held in any fund may be transferred by the corporation to other funds or accounts of the corporation to the extent that the transfer does not reduce the amount of the fund to below the capital reserve fund requirement.
     (c) The corporation may provide by resolution or resolutions that it may not issue bonds under a resolution or resolutions at any time if upon issuance the amount in the capital reserve fund which will secure the bonds shall be less than the capital reserve fund requirement, unless the corporation at the time of issuance of the bonds shall deposit in the fund from the proceeds of the bonds to be so issued, or other sources, an amount which, together with the amount then in the fund, shall not be less than the capital reserve fund requirement.
     (d) In computing the amount of the capital reserve funds for the purpose of this part, securities in which all or a portion of the funds shall be invested shall be valued at par, cost, or by other method of valuation as the corporation may provide by resolution.
     (e) (i) "Capital reserve fund requirement" means, as of any particular date of computation, and with respect to any particular issue of bonds, an amount as the corporation may provide, or may have previously provided, by resolution, which amount may be in the form of a sum certain or a formula.
     (ii) In establishing reserves and setting capital reserve fund requirements, the corporation shall consider the following:
     (A) the qualifications for obtaining an investment grade rating from one or more nationally recognized bond rating agencies;
     (B) the economic feasibility and marketability of the bonds being issued, taking into account all security for the bonds, including the capital reserve fund; and
     (C) applicable requirements pertaining to reserve funds under federal and state income tax laws and regulations.
     (f) (i) To assure the continued operation and solvency of the corporation for carrying out of its corporate purposes, provision is made in Subsection (1)(b) for the accumulation in the

capital reserve funds of an amount equal to the maximum capital reserve fund requirement.
     (ii) The president of the corporation shall annually, on or before December first, certify to the governor and to the director of finance the amount, if any, required to restore the capital reserve funds to the capital reserve fund requirement.
     (iii) The governor may request from the Legislature an appropriation of the certified amount to restore the capital reserve funds to the capital reserve fund requirement.
     (g) Amounts appropriated, if any, shall be repaid to the General Fund of the state, from any monies in excess of the amounts which the corporation determines will keep it self-supporting.
     (2) The corporation may create and establish any other funds as may be necessary or desirable for its corporate purposes.

Amended by Chapter 319, 2001 General Session