9-7-110. Community development authority; revenue bonds; debt service reserve funds; use of monies therein.

(a) Prior to the delivery of each bond issue, the authority may create one (1) or more debt service reserve funds and, at the time the authority determines, shall pay into the funds an amount, as determined by the authority, from:

(i) Proceeds of sale of bonds to the extent provided in the resolution of the authority authorizing the issuance; and

(ii) Other monies which may be received or made available to the authority for the purposes of funds from any other source.

(b) Unless otherwise provided, the monies held in or credited to any debt service reserve fund established under this section shall be used solely for the payment of the principal of bonds of the authority secured by the reserve fund, as the bonds mature or are redeemed prior to maturity, the purchase of such bonds of the authority, the payment of interest on such bonds of the authority or the payment of any redemption premium required to be paid when the bonds are redeemed prior to maturity. The interest earned on the amount deposited in any reserve fund may be used for the purpose of defraying the cost of the authority's operations. Money in any debt service reserve fund shall not be withdrawn if it would reduce the amount of the fund to less than the amount which is pledged in the proceedings authorizing the issuance of the bonds secured by the debt service reserve fund, except for the purpose of paying principal and interest on bonds maturing and becoming due, and for the payment of which other monies of the authority are not available.