CHAPTER 5. RESERVE FUND

IC 5-1.5-5
     Chapter 5. Reserve Fund

IC 5-1.5-5-1
Establishment; application of funds; required debt service reserve; excess money
    
Sec. 1. (a) The board may establish and maintain a reserve fund for each issue of bonds or notes in which there shall be deposited or transferred:
        (1) all money appropriated by the general assembly for the purpose of the fund in accordance with section 4(a) of this chapter;
        (2) all proceeds of bonds or notes required to be deposited in the fund by terms of a contract between the bank and its holders or a resolution of the bank with respect to the proceeds of bonds or notes;
        (3) all other money appropriated by the general assembly to a reserve fund; and
        (4) any other money or funds of the bank that it decides to deposit in the fund.
    (b) Subject to section 4(b) of this chapter, money in any reserve fund shall be held and applied solely to the payment of the interest on and principal of bonds or notes of the bank as the interest and principal become due and payable and for the retirement of bonds or notes. The money may not be withdrawn if a withdrawal would reduce the amount in the reserve fund to an amount less than the required debt service reserve, except for payment of interest then due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 or notes and the principal of bonds or notes then maturing and payable, whether by reason of maturity or mandatory redemption, for which payments other money of the bank is not then available. As used in this chapter, "required debt service reserve" means, as of the date of computation, the amount required to be on deposit in the reserve fund as provided by resolution or trust agreement of the bank.
    (c) Money in any reserve fund in excess of the required debt service reserve, whether by reason of investment or otherwise, may be withdrawn at any time by the bank and transferred to another fund or account of the bank, subject to the provisions of any agreement with the holders of any bonds or notes.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.18; P.L.46-1987, SEC.13.

IC 5-1.5-5-2
Investment of funds
    
Sec. 2. Money in any reserve fund may be invested in the manner provided in IC 5-1.5-3-3.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.19.

IC 5-1.5-5-3
Valuation of investments      Sec. 3. 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 or trust agreement of the bank. 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.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.20.

IC 5-1.5-5-4
Required debt service reserve; resolution concerning appropriations; excess funds; budget committee review
    
Sec. 4. (a) Except as provided in subsection (c), and in order to assure the maintenance of the required debt service reserve in any reserve fund, a resolution authorizing the bank to issue bonds or notes may include a provision stating that:
        (1) the general assembly may annually appropriate to the bank for deposit in one (1) or more of the funds the sum, certified by the chairman of the board to the general assembly, that is necessary to restore one (1) or more of the funds to an amount equal to the required debt service reserve; and
        (2) the chairman annually, before December 1, shall make and deliver to the general assembly a certificate stating the sum required to restore the funds to that amount.
Nothing in this subsection creates a debt or liability of the state to make any appropriation.
    (b) All amounts received on account of money appropriated by the state to any reserve fund shall be held and applied in accordance with section 1(b) of this chapter. However, at the end of each fiscal year, if the amount in any reserve fund exceeds the required debt service reserve, any amount representing earnings or income received on account of any money appropriated to the reserve fund that exceeds the expenses of the bank for that fiscal year may be transferred to the general fund of the state.
    (c) Notwithstanding any other law, and except as provided by subsection (d), after June 30, 2005, the:
        (1) issuance by the bank of any indebtedness that incorporates the provisions set forth in subsection (a) or otherwise establishes a procedure for the bank or a person acting on behalf of the bank to certify to the general assembly the amount needed to restore a reserve fund or another fund to required levels; or
        (2) execution by the bank of any other agreement that creates a moral obligation of the state to pay all or part of any indebtedness issued by the bank;
is subject to review by the budget committee and approval by the budget director.
    (d) If the budget committee does not conduct a review of a proposed transaction under subsection (c) within twenty-one (21) days after a request by the bank, the review is considered to have been conducted. If the budget director does not approve or

disapprove a proposed transaction under subsection (c) within twenty-one (21) days after a request by the bank, the transaction is considered to have been approved.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.21; P.L.235-2005, SEC.77.

IC 5-1.5-5-5
Combining reserve funds
    
Sec. 5. Subject to the provisions of any agreement with its holders, the bank may combine a reserve fund established for an issue of bonds or notes into one (1) or more reserve funds.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.22.

IC 5-1.5-5-6
Certain qualified entities; debt service reserve appropriations not available
    
Sec. 6. The provisions of section 4(a) of this chapter are not available to any bonds or notes issued by the bank to purchase securities of, or fund loans to, any qualified entity described in IC 5-1.5-1-8(5) or IC 5-1.5-1-8(6).
As added by P.L.37-1991, SEC.4.