New Jersey § 18a:71a-25

§ 18a:71a-25.

a. The authority shall establish and maintain a special fund called the “New Jersey

Higher Education Student Assistance Capital Reserve Fund” in which there shall be

deposited: (1) all moneys appropriated by the State for the purpose of the fund;

(2) all proceeds of bonds required to be deposited therein by terms of any contract

between the authority and its bondholders or any resolution of the authority with

respect to the proceeds or bonds; and (3) any other moneys or funds of the authority

which it determines to deposit therein. Moneys in the capital reserve fund shall be held and applied solely to the payment

of the interest on and principal of bonds of the authority as the same shall become

due and payable and for the retirement of bonds, and shall not be withdrawn therefrom

if the withdrawal would reduce the amount in the capital reserve fund to an amount

equal to less than the maximum debt service reserve, except for payment of interest

then due and payable on bonds and the principal of bonds then maturing and payable

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

the authority and its bondholders and for the payments on account of which interest

or principal or retirement of bonds other moneys of the authority are not then available

in accordance with the terms of the contract. As used in this section, “ maximum debt service reserve ” means, as of any date of computation, the lesser of: the largest amount of money

required by the terms of all contracts between the authority and its bondholders to

be raised in any succeeding calendar year for the payment of interest on and maturing

principal of outstanding bonds and payments required by the terms of the contracts

to sinking funds established for the payment or redemption of the bonds, all calculated

on the assumption that bonds will cease to be outstanding after the date of the computation

by reason of the payment of bonds at their respective maturities and the payments

of the required moneys to sinking funds and the application thereof in accordance

with the terms of the contracts to the retirement of bonds; or the amount of money

required by the terms of all contracts between the authority and its bondholders to

be maintained in the fund. b. Moneys in the fund at any time in excess of the maximum debt service reserve, whether

by reason of investment or otherwise, may be withdrawn at any time by the authority

and transferred to any other fund or account of the authority. c. Moneys at any time in the fund may be invested in any direct obligations of, or

obligations as to which the principal and interest thereof is guaranteed by, the United

States of America or such other obligations as the authority may approve. d. For purposes of valuation, investments in the capital reserve fund shall be valued

at the lowest of the par value, cost to the authority or market value of the investments. Valuation on any particular date shall include the amount of interest then earned

or accrued to the date on any moneys or investments in the reserve fund. e. Notwithstanding any other provisions contained in this act, no bonds shall be issued

by the authority unless there is in the capital reserve fund the maximum debt service

reserve for all bonds then issued and outstanding and the bonds about to be issued;

provided that nothing herein shall prevent or preclude the authority from satisfying

the foregoing requirement by depositing so much of the proceeds of the bonds about

to be issued, upon their issuance, as is needed to achieve the maximum debt service

reserve. The authority may at any time issue its bonds, notes or other obligations for the

purpose of providing any amount necessary to increase the amount in the capital reserve

fund to the maximum debt service reserve, or to meet such higher or additional reserve

as may be fixed by the authority with respect to the fund. f. In order to assure the maintenance of the maximum debt service reserve in the capital

reserve fund, there shall be appropriated annually and paid to the authority for deposit

in the fund, such sum, if any, as shall be certified by the chairperson of the Board

of Higher Education Student Assistance Authority to the Governor as necessary to restore

the fund to an amount equal to the maximum debt service reserve. The chairperson shall annually, on or before December 1, make and deliver to the

Governor a certificate stating the sums, if any, required to restore the fund to the

amount equal to the maximum debt service reserve, and the sum or sums so certified

shall be appropriated and paid to the authority during the then current State fiscal

year. g. The capital reserve fund shall be kept separate from any other reserve fund established

by the authority and shall not be subject to the provisions of N.J.S.18A:71A-24 .