13-23-401 - Assets fund. - Tennessee Statutes

13-23-401. Assets fund.

(a)  There is hereby created and established a segregated fund on the books of the agency to be known as the “assets fund.” This assets fund will consist of all funds of the agency which are not necessary to support the bond and note obligations of the agency and which can be withdrawn from the specific funds of the various bond resolutions of the agency, as provided under the requirements of the resolutions, and investment income from such funds. Such assets fund shall remain a general asset of the agency. From time to time, but at least annually, the assets fund will be evaluated by the bond finance committee of the agency with regard to liquidity, tax law requirements, and additional security for the agency's obligations. After such evaluation, all available investment income and appropriate principal can be transferred to the housing program fund and the housing program reserve fund created elsewhere in this part. Funds in the assets fund shall be used only for the following purposes:

     (1)  To invest in all legal investments allowed under state law and the bond resolution to satisfy the agency's obligations of bond and noteholders;

     (2)  To support the existing rental rehabilitation program which is supported by federal funds administered by the agency;

     (3)  For construction loans for housing as otherwise authorized in this part; provided, that such loans pay interest at a rate comparable to earnings on other permitted investments; and

     (4)  As a reserve to support the bond and loan programs of the Tennessee industrial finance corporation, created pursuant to title 4, chapter 17, part 4.

(b)  It is the legislative intent that these funds not be depleted through any program of grants or subsidies. Furthermore, these funds shall not be commingled with the proceeds of any bond issue of the agency which are required to be held by the trustee.

(c)  The board of directors of the agency may withdraw such funds from the assets fund as it deems necessary.

(d)  Notwithstanding the provisions of this section to the contrary, at year end of the fiscal year ending June 30, 1998, an amount not to exceed sixty-five million dollars ($65,000,000) of the unexpended balance of the funds in the assets fund may, at the discretion of the commissioner of finance and administration, be transferred to the state general fund. It is hereby declared to be the legislative intent that the transfer authorized herein shall be mitigated to the fullest extent possible pursuant to the applicable provisions contained in the general appropriations act for the year ending June 30, 1998.

(e)  Beginning in the fiscal year beginning July 1, 1998, funds received by the agency pursuant to former § 13-23-402(a)(2) and (3) in excess of ten million dollars ($10,000,000) each fiscal year shall be transferred to the assets fund until the assets fund has a fiscal year end balance of fifty million dollars ($50,000,000). Thereafter, no such funds shall be transferred to the assets fund but shall be applied in accordance with § 13-23-403.

[Acts 1988, ch. 900, § 10; 1997, ch. 537, § 1; 1998, ch. 724, § 1.]