(a) The corporation may establish and maintain a special fund called the Alaska Tax Credit Certificate Bond Corporation reserve fund. The reserve fund consists of

(1) money appropriated to the reserve fund by the legislature for the purpose of the reserve fund in accordance with the provisions of (g) of this section;

(2) proceeds of bonds required to be deposited in the fund by terms of a

(A) contract between the corporation and its bondholders; or

(B) resolution of the corporation with respect to the proceeds of bonds;

(3) other money appropriated by the legislature to the reserve fund; and

(4) other money of the corporation that it decides to deposit in the reserve fund.

(b) Money in the reserve fund shall be held and applied solely to the payment of the interest on and principal of bonds of the corporation as the interest and principal become due and payable to the retirement of bonds, or for disbursement to the commissioner of revenue for purchases or payments under AS 43.55.028. Money may not be withdrawn if a withdrawal would reduce the amount in the reserve fund to an amount less than the required debt service reserve except for payment of interest then due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 for the retirement of bonds in accordance with the terms of a contract between the corporation and its bondholders and for which payments of other money of the corporation is not then available.

(c) Money in the reserve fund in excess of the required debt service reserve, whether because of investment or otherwise, may be withdrawn at any time by the corporation for disbursement by the commissioner of revenue for purchases or payments under AS 43.55.028 or transferred to another fund or account of the corporation.

(d) Money in the reserve fund may be invested in the same manner and on the same conditions as permitted for investment of funds belonging to the state or held in the treasury under AS 37.10.070; however, the corporation may agree with the bondholders to further limit those investments.

(e) For purposes of valuation, investments in the reserve fund shall be valued at par or, if purchased at less than par, at cost unless otherwise provided by resolution of the corporation. Valuation on a particular date shall include the amount of interest then earned or accrued to that date on the money or investments in the reserve fund.

(f) Notwithstanding any other provision of this chapter, the corporation may not issue bonds unless there is in the reserve fund the required debt service reserve for all bonds then issued and outstanding and for the bonds to be issued; however, the corporation may satisfy this requirement by depositing as much of the proceeds of the bonds to be issued, on their issuance, as is needed to meet the required debt service reserve or by funding the reserve fund with cash, a surety bond, letter of credit, or other instrument in the amount necessary to meet the required debt service reserve. The corporation may, at any time, issue its bonds or notes for the purpose of increasing the amount in the reserve fund to the required debt service reserve, or to meet whatever higher or additional reserve that may be fixed by the corporation with respect to the fund.

(g) To ensure the maintenance of the required debt service reserve in the reserve fund, the legislature may appropriate annually to the corporation for deposit in the fund the sum, certified by the chair of the corporation to the governor and to the legislature, that is necessary to restore the fund to an amount equal to the required debt service reserve. The chair annually, before January 30, shall make and deliver to the governor and to the legislature a certificate stating the sum required to restore the fund to that amount, and the certified sum may be appropriated and paid to the corporation during the then current state fiscal year. Nothing in this subsection creates a debt or liability of the state.

(h) All references to the reserve fund in this section include special accounts within the reserve fund that may be created by the corporation to secure the payment of particular bonds.

(i) The commissioner of revenue may, subject to appropriation, lend surplus money in the general fund to the corporation for deposit to any account in the reserve fund in an amount equal to the required debt service reserve. The loans shall be made on the terms and conditions that may be agreed on by the commissioner of revenue and the corporation, including, without limitation, terms and conditions providing that the loans need not be repaid until the obligations of the corporation secured and to be secured by the account in the reserve fund are no longer outstanding.

(j) In this section, “required debt service reserve” means, on the date of computation, the amount required to be on deposit in the reserve fund as provided by resolution of the corporation.