Okla. Stat. tit. 74, § 74-5063.4

Rules and regulations for administration.

A. The Fund shall be employed by the Oklahoma Development

Finance Authority solely to secure the payment of principal,

interest and premium, if any, on the revenue bonds and other

Oklahoma Statutes - Title 74. State Government Page 1139

financial obligations issued by the Authority pursuant to the

Oklahoma Development Finance Authority Act, for the specific purpose

of enhancing and supporting the credit of such revenue bonds and

other financial obligations. Such other financial obligations may

include guarantees, loans, letters of credit or other similar

obligations issued by the Authority pursuant to the Oklahoma

Development Finance Authority Act, and may include commitments by

the Authority for the Fund to secure loans made by private financial

institutions. Except for the financial obligation provided in

Section 5 of this act and Section 5063.4i of this title, each such

other financial obligation must be secured by a first lien security

interest on real estate, equipment or inventory, and, except as

provided in Section 5 of this act and Sections 5063.4i and 5063.4b

of this title, the amount of the commitment by the Fund shall not

exceed twenty-five percent (25%) of the value of the collateral

securing each such financial transaction. No portion of the monies

or other assets deposited to the Fund shall be expended or otherwise

used by the Authority in meeting its day-to-day operating expenses,

in paying the cost of issuance of the Authority's revenue bonds or

other financial obligations, or in supporting any other activity of

the Authority not directly related to the Credit Enhancement Reserve

Fund or to enhancing the credit of the Authority's revenue bonds and

other financial obligations.

B. The Authority shall administer the Fund prudently and

according to good insurance practice. Such administration will

minimize the loss experience of the Fund, assure the future

viability of the Fund, and assure the continuing availability of the

proceeds of general obligation bonds issued pursuant to Section

5063.11 of this title as a credit enhancement vehicle for bond

issues in this state on an ongoing basis. Accordingly, the granting

of credit enhancement by the Fund shall be based on principles of

insurability generally applied in the credit enhancement/insurance

industry. The Authority is authorized and directed to adopt initial

rules and regulations governing the credit enhancement activities

and administration of the Fund, including rules and regulations

dealing with the subjects of project feasibility, credit evaluation,

collateral evaluation, reinsurance, maximum risk retention by the

Fund, avoidance of adverse risk selection, and all other factors

deemed relevant by the Authority to the decision whether the Fund

should provide credit enhancement to a particular issue of debt, to

what extent, on what terms, and for what premium rate.

C. The initial rules and regulations for administration of the

Fund promulgated by the Authority pursuant to subsection B of this

section shall be subject to the approval of the Legislature in

accordance with the requirements of the Oklahoma Administrative

Procedures Act.

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D. No general obligation bonds may be issued pursuant to

Section 5063.11 of this title except upon the approval by a vote of

the people of the State of Oklahoma authorizing the Oklahoma

Development Finance Authority to issue general obligation bonds for

the purposes set forth in this act and unless and until initial

rules and regulations governing administration of the Fund have been

adopted by the Authority. The Authority by resolution or other

appropriate action of the Authority shall determine each issue of

bonds or portions thereof with respect to which the benefits of the

act shall inure.

E. The Authority is authorized to amend the initial rules and
et forth in this act and unless and until initial

rules and regulations governing administration of the Fund have been

adopted by the Authority. The Authority by resolution or other

appropriate action of the Authority shall determine each issue of

bonds or portions thereof with respect to which the benefits of the

act shall inure.

E. The Authority is authorized to amend the initial rules and

regulations governing administration of the Fund, either by addition

of new rules and regulations, or a change or repeal of existing

rules and regulations; provided, that such amendment, whether by

addition, change or repeal, shall be subject to the approval of the

Legislature in accordance with the requirements of the Oklahoma

Administrative Procedures Act.

F. Except as provided in subparagraph b of paragraph 4 of

subsection A of Section 695.8 of Title 62 of the Oklahoma Statutes,

credit enhancement by the Fund for any bonds or other financial

obligations issued by the Authority pursuant to law shall also

require approval of the Executive Bond Oversight Commission and the

Legislative Bond Oversight Commission as provided by law.