Pennsylvania Statutes Title 53 P.S. Municipal and Quasi-Municipal Corporations § 12720.313. Debt service reserve fund

(a) Authorization.--The authority may establish one or more debt service reserve funds into which it shall deposit:

All moneys held in any debt service reserve fund, except as provided hereafter, shall be used when required solely for the payment of the principal of bonds secured in whole or in part by such fund or of the sinking fund payments, if any, with respect to such bonds, the purchase or redemption of such bonds, the payment of interest on such bonds or the payment of any redemption premium required to be paid when such bonds and notes are redeemed prior to maturity. Any debt service reserve fund established pursuant to this section shall be a trust fund held for the benefit and security of the obligees of the authority whose bonds are secured by such fund. Moneys in a debt service reserve fund shall not be withdrawn from the fund at any time in an amount that would reduce the amount of the fund to less than the minimum reserve fund requirement established for such fund in the resolution of the authority creating such fund, except for withdrawals for the purpose of making payments when due of principal, interest, redemption premiums and sinking fund payments, if any, with respect to such bonds for the payment of which other moneys of the authority are not available. Any income or interest earned by, or increments to, any debt service reserve fund due to the investment thereof may be transferred by the authority to other funds or accounts of the authority to the extent such transfer does not reduce the amount of the debt service reserve fund below the minimum reserve fund requirement established for such fund. Funds transferred to other accounts in accordance with the preceding requirements may be used for whatever purposes the authority deems appropriate so long as such purposes are consistent with this act and the contracts of the authority with obligees of the authority and with assisted cities.

(b) Bond limitation.--The authority shall not at any time issue bonds secured in whole or in part by a debt service reserve fund if issuance of such bonds would cause the amount in the debt reserve fund to fall below the minimum reserve requirement for such fund, unless the authority at the time of issuance of such bonds shall deposit in the fund an amount, from the proceeds of the bonds to be issued or from other sources, which when added to the amount already in such fund will cause the total amount on deposit in such fund to equal or exceed the minimum reserve fund requirement. For the purposes of this section, the term “minimum reserve fund requirement” shall mean that amount defined as the minimum reserve fund requirement in the resolution or resolutions of the authority authorizing the bonds.