N.D. Cent. Code § 6-09.4-10

6-09.4-10. Reserve fund

1. The public finance authority shall establish and maintain a reserve fund in which there

must be deposited all moneys appropriated by the state for the purpose of the fund, all

proceeds of bonds required to be deposited therein by terms of any contract between

the public finance authority and its bondholders or any resolution of the public finance

authority with respect to the proceeds of bonds, any other moneys or funds of the

public finance authority which it determines to deposit therein, any contractual right to

the receipt of moneys by the public finance authority for the purpose of the fund,

including a letter of credit or similar instrument, and any other moneys made available

to the public finance authority only for the purposes of the fund from any other source

or sources. Moneys in the reserve fund must be held and applied solely to the

payment of the interest on and the principal of bonds and sinking fund payments as

the same become due and payable and for the retirement of bonds, including payment

of any redemption premium required to be paid when any bonds are redeemed or

retired prior to maturity. Moneys in the reserve fund may not be withdrawn therefrom if

the withdrawal would reduce the amount in the reserve fund to an amount less than

the required debt service reserve, except for payment of interest then due and payable

on bonds and the principal of bonds then maturing and payable and sinking fund

payments and for the retirement of bonds in accordance with the terms of any contract

between the public finance authority and its bondholders and for the payments on

account of which interest or principal or sinking fund payments or retirement of bonds,

other moneys of the public finance authority are not then available in accordance with

the terms of the contract. The required debt service reserve must be an aggregate

amount equal to at least the largest amount of money required by the terms of all

contracts between the public finance authority and its bondholders to be raised in the

then current or any succeeding calendar year for the payment of interest on and

maturing principal of outstanding bonds, and sinking fund payments required by the

terms of any contracts to sinking funds established for the payment or redemption of

the bonds.

2. If the establishment of the reserve fund for an issue or the maintenance of an existing

reserve fund at a required level under this section would necessitate the investment of

all or any portion of a new reserve fund or all or any portion of an existing reserve fund

at a restricted yield, because to not restrict the yield may cause the bonds to be

taxable under the Internal Revenue Code, then at the discretion of the public finance

authority no reserve fund need be established prior to the issuance of bonds or the

reserve fund need not be funded to the levels required by other subsections of this

section or an existing reserve fund may be reduced.

3. No bonds may be issued by the public finance authority unless there is in the reserve

fund the required debt service reserve for all bonds then issued and outstanding and

the bonds to be issued. Nothing in this chapter prevents or precludes the public

finance authority from satisfying the foregoing requirement by depositing so much of

the proceeds of the bonds to be issued, upon their issuance, as is needed to achieve

the required debt service reserve. The public finance authority may at any time issue

its bonds or notes for the purpose of providing any amount necessary to increase the

amount in the reserve fund to the required debt service reserve, or to meet such

higher or additional reserve as may be fixed by the public finance authority with

respect to such fund.

4. In order to assure the maintenance of the required debt service reserve, there shall be

appropriated by the legislative assembly and paid to the public finance authority for
amount necessary to increase the

amount in the reserve fund to the required debt service reserve, or to meet such

higher or additional reserve as may be fixed by the public finance authority with

respect to such fund.

4. In order to assure the maintenance of the required debt service reserve, there shall be

appropriated by the legislative assembly and paid to the public finance authority for

deposit in the reserve fund, such sum, if any, as shall be certified by the industrial

commission as necessary to restore the reserve fund to an amount equal to the

required debt service reserve. However, the commission may approve a resolution for

the issuance of bonds, as provided by section 6-09.4-06, which states in substance

that this subsection is not applicable to the required debt service reserve for bonds

issued under that resolution.

5. If the maturity of a series of bonds of the public finance authority is three years or less

from the date of issuance of the bonds, the public finance authority may determine that

no reserve fund need be established for that respective series of bonds. If such a

determination is made, holders of that respective series of bonds may have no interest

in or claim on existing reserve funds established for the security of the holders of

previously issued public finance authority bonds, and may have no interest in or claim

on reserve funds established for the holders of subsequent issues of bonds of the

public finance authority.

6. The industrial commission may determine this section is inapplicable in whole or in

part for bonds issued under:

a. Section 6-09.4-06;

b. Section 6-09.4-24; or

c. The public finance authority's state revolving fund program.