(a) The comptroller of the treasury shall file a certificate with the authority setting forth with respect to each local government unit that will receive a program loan:

(1) The name of such local government unit;

(2) The amount of such program loan;

(3) That the loan program agreement pursuant to which the program loan to be made is entered into pursuant to, and in accordance with, title 68, chapter 221, part 2 or part 5, title 68, chapter 211, part 4 [repealed], or part 4 of this chapter as the case may be;

(4) The total, at the time of approval of the program loan with respect to which such certificate relates, of all program loans under the state loan programs made to the local government unit, whether financed from the proceeds of bonds or notes issued pursuant to § 4-31-107 or from the proceeds of general obligation bonds or bond anticipation notes of the state;

(5) The total amount, at the time of approval of the program loan with respect to which such certificate relates, of payments to the state required to be made in each fiscal year of the state under loan program agreements, excluding payments that will be required on account of the program loan with respect to which such certificate relates, or under contracts providing for program loans from the proceeds of general obligation bonds or bond anticipation notes;

(6) The amount of state-shared taxes received in the prior fiscal year of the state as shown by the latest completed audit for the state's fiscal year preceding the time of approval of the program loan with respect to which such certificate relates;

(7) The amount, at the time of approval of the program loan with respect to which such certificate relates, of indebtedness, other than under loan program agreements, having a prior lien on state-shared taxes as certified by the local government unit; and

(8) The total amount, at the time of approval of the program loan with respect to which such certificate relates, of payments to the state required to be made in each fiscal year of the state under loan program agreements, including payments that will be required on account of the program loan with respect to which such certificate relates, and under contracts providing for program loans from the proceeds of general obligation bonds and bond anticipation notes.

(b) In the preparation of the certificate required by subsection (a), the comptroller of the treasury, in determining the amount of payments to the state required to be made in each fiscal year of the state under loan program agreements, including the loan program agreement with respect to which such certificate relates, and under contracts providing for program loans from the proceeds of general obligation bonds or bond anticipation notes, shall:

(1) With respect to program loans that have been funded from the proceeds of bonds of the authority or the proceeds of general obligation bonds of the state, utilize the actual debt service requirements under such loan program agreements or contracts; and

(2) With respect to program loans for which no funding has yet been provided or for which interim financing from the proceeds of notes or from other available moneys is being provided, utilize the debt service requirements under such loan program agreements determined by the state funding board at the time of approval of such loan program agreement as if the bonds to be issued to fund such program loans will bear interest at such rate per annum and mature in such manner as the state funding board shall establish at the time of such approval.

(c) Each certificate may relate to one (1) or more local government units, program loans, or both, and be prepared in such form and manner as the comptroller of the treasury deems advisable.

(d)

(1) No proceeds of bonds or notes shall be applied by the authority to provide moneys to make a program loan to any local government unit unless the certificate of the comptroller of the treasury prepared pursuant to subsection (a) shows that the ratio of unobligated state-shared taxes to the maximum annual amount of program loan payments complies with the statutes governing the state loan programs.

(2) For purposes of this subsection (d) and subsection (i):

(A) “Maximum annual amount of program loan payments” means the total amount of payments to the state by such local government unit required to be made in any fiscal year of the state under loan program agreements determined as provided in this section, including payments that will be required on account of the program loan with respect to which such certificate relates, and under contracts, other than loan program agreements, providing for program loans from the proceeds of general obligation bonds and bond anticipation notes; and

(B) “Unobligated state-shared taxes” means the total amount of state-shared taxes shown in the certificate that such local government unit received in the prior fiscal year of the state as shown by the latest completed audit for the state's fiscal year, after deducting the amount of such state-shared taxes applied to other indebtedness of such local government unit in such fiscal year.

(e) Prior to the issuance of bonds pursuant to § 4-31-107, the comptroller of the treasury shall file with the authority a certificate:

(1) Setting forth the total amount of bonds to be issued, stating separately:

(A) The amount from proceeds of the proposed bonds allocable to program loans, whether to finance a program loan or to retire notes theretofore issued to finance a program loan;

(B) The estimated amount, if any, in order to provide for the payment of interest on such bonds for a stated period after issuance;

(C) The estimated amount, if any, required to establish reserves;

(D) The estimated amount, if any, required to provide for the payment of costs incident to the issuance of such bonds; and

(2) Certifying, with respect to each local government unit to which a program loan is to be made or refinanced from the proceeds of such bonds, that a loan program agreement is in effect, that the certificate required pursuant to subsection (a) with respect to each such program loan has been filed with the authority, and that the aggregate of the payments to be made to the state by all local government units under all loan program agreements will be sufficient, together with other funds available for such purpose, to pay the principal of, and interest and premium, if any, on all bonds issued to finance program loans and to fulfill any and all other obligations of the authority.

(f) Prior to the issuance of notes pursuant to § 4-31-107, the comptroller of the treasury shall file with the authority a certificate:

(1) Setting forth the total amount of notes to be issued, stating separately:

(A) The amount from the proceeds of the proposed notes allocable to program loans, whether to finance a program loan or to retire other notes theretofore issued to finance a program loan;

(B) The estimated amount, if any, in order to provide for the payment of interest on such notes for a stated period after issuance;

(C) The estimated amount, if any, required to establish reserves;

(D) The estimated amount, if any, required to provide for the payment of costs incident to the issuance of such notes; and

(2) Certifying, with respect to local government units to which program loans are to be made from at least seventy-five percent (75%) of the proceeds of such notes available for program loans, that the loan program agreements are in effect and that the issuance of such notes will not affect the ability of the authority to pay the principal of, interest and premium, if any, on any bonds of the authority issued to finance program loans and to fulfill any and all other obligations of the authority.

(g) Pending application of the proceeds of bonds or notes to provide program loans as provided herein, such proceeds shall be held in trust for the benefit of the holders of such bonds or notes, as the case may be.

(h) The authority is hereby authorized to establish in the state treasury a separate special trust fund of the authority for each separate issue of bonds or notes that is similarly secured, to be known as the “state loan programs fund” and to bear such additional designation as the authority deems appropriate to properly identify each fund. The state hereby covenants and agrees that from and after the issuance of any bonds or notes under and pursuant to § 4-31-107 then, notwithstanding any other law, and particularly title 68, chapter 221, parts 2 and 5, and title 68, chapter 211, part 4 [repealed], moneys derived by the state from payments made by local government units pursuant to loan program agreements with such local government units and moneys withheld from state-shared taxes apportioned to such local government units as permitted under the terms of the state loan programs that are pledged to the payment of such bonds or notes shall be paid into the particular state loan programs fund established for the issuance of bonds or notes to which such moneys are pledged, and such moneys shall be accounted for separately from all other moneys in the state treasury and shall be applied by the authority solely for the purpose of paying principal of and interest and premium, if any, on such issue of bonds and notes issued pursuant to § 4-31-107, refunding moneys due to participating local government units where appropriate, and paying all other costs incidental to the administration of the authority in connection with the state loan programs and the issuance of such issue of bonds and notes.

(i)

(1) There is hereby established a separate special trust fund of the state to be known as the “local development authority statutory reserve fund.”

(2) There shall be deposited in such statutory reserve fund all moneys from whatever source, including appropriations pursuant to law, received by the authority for such purpose.

(3) The statutory reserve fund shall be established and maintained in an amount equal to the statutory reserve fund requirement.

(4) For purposes of this subsection (i):

(A) “Program loan certificate” means the certificate of the comptroller of the treasury prepared pursuant to subsection (a);

(B) “Statutory reserve fund requirement” means the total amount obtained by adding the amount for each program loan arrived at by subtracting the total unobligated state-shared taxes shown on the program loan certificate relating to such program loan from the maximum annual amount of payments shown on the program loan certificate relating to such program loan.

(5) At the end of each calendar year, the authority shall certify to the governor the amount of the deficiency, if any, on deposit in the statutory reserve fund, valuing investments in such fund at face value, and there shall be included in the governor's recommended budget next submitted to the general assembly a line item appropriation in the amount equal to the deficiency in the amount required to be on deposit in the statutory reserve fund, which amount, if appropriated, shall be apportioned and paid to the authority for deposit in the statutory reserve fund.

(6) Moneys on deposit in the statutory reserve fund shall be invested and reinvested from time to time by the authority in securities and obligations deemed appropriate by the authority, including securities or obligations, the interest on which is exempt from federal income taxes. Any earnings from such investment and reinvestment shall accrue to the benefit of the statutory reserve fund; provided, that at the end of each fiscal year, any amount in such fund in excess of two hundred percent (200%) of the amount required hereby to be maintained in such fund shall revert to the general fund in accordance with the applicable provisions of the general appropriations bill.

(7) The moneys held in the statutory reserve fund shall be a trust fund for the benefit of the holders of the bonds and notes of the authority issued pursuant to § 4-31-107, and shall be paid to the authority, upon request of the authority, whenever any local government unit shall fail to make a payment required under a program loan agreement and there are insufficient state-shared taxes available to the authority to be withheld as permitted under the state loan programs to permit the payment of principal of or interest on bonds or notes of the authority issued pursuant to § 4-31-107 in accordance with the terms of such bonds or notes.