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 fundfor each issue of bonds or notes in which there shall be deposited ortransferred:
(1) all money appropriated by the general assembly for thepurpose of the fund in accordance with section 4(a) of thischapter;
(2) all proceeds of bonds or notes required to be deposited inthe fund by terms of a contract between the bank and its holdersor a resolution of the bank with respect to the proceeds of bondsor notes;
(3) all other money appropriated by the general assembly to areserve fund; and
(4) any other money or funds of the bank that it decides todeposit in the fund.
(b) Subject to section 4(b) of this chapter, money in any reservefund shall be held and applied solely to the payment of the intereston and principal of bonds or notes of the bank as the interest andprincipal become due and payable and for the retirement of bonds ornotes. The money may not be withdrawn if a withdrawal wouldreduce the amount in the reserve fund to an amount less than therequired debt service reserve, except for payment of interest then dueand payable on bonds or notes and the principal of bonds or notesthen maturing and payable, whether by reason of maturity ormandatory redemption, for which payments other money of the bankis not then available. As used in this chapter, "required debt servicereserve" means, as of the date of computation, the amount requiredto be on deposit in the reserve fund as provided by resolution or trustagreement of the bank.
(c) Money in any reserve fund in excess of the required debtservice reserve, whether by reason of investment or otherwise, maybe withdrawn at any time by the bank and transferred to another fundor account of the bank, subject to the provisions of any agreementwith the holders of any bonds or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 mannerprovided 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 fundshall be valued at par, or if purchased at less than par, at cost unlessotherwise provided by resolution or trust agreement of the bank.Valuation on a particular date shall include the amount of interestthen earned or accrued to that date on the money or investments inthe 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 concerningappropriations; excess funds; budget committee review
Sec. 4. (a) Except as provided in subsection (c), and in order toassure the maintenance of the required debt service reserve in anyreserve fund, a resolution authorizing the bank to issue bonds ornotes may include a provision stating that:
(1) the general assembly may annually appropriate to the bankfor deposit in one (1) or more of the funds the sum, certified bythe chairman of the board to the general assembly, that isnecessary to restore one (1) or more of the funds to an amountequal to the required debt service reserve; and
(2) the chairman annually, before December 1, shall make anddeliver to the general assembly a certificate stating the sumrequired to restore the funds to that amount.
Nothing in this subsection creates a debt or liability of the state tomake any appropriation.
(b) All amounts received on account of money appropriated by thestate to any reserve fund shall be held and applied in accordance withsection 1(b) of this chapter. However, at the end of each fiscal year,if the amount in any reserve fund exceeds the required debt servicereserve, any amount representing earnings or income received onaccount of any money appropriated to the reserve fund that exceedsthe expenses of the bank for that fiscal year may be transferred to thegeneral fund of the state.
(c) Notwithstanding any other law, and except as provided bysubsection (d), after June 30, 2005, the:
(1) issuance by the bank of any indebtedness that incorporatesthe provisions set forth in subsection (a) or otherwiseestablishes a procedure for the bank or a person acting on behalfof the bank to certify to the general assembly the amountneeded to restore a reserve fund or another fund to requiredlevels; or
(2) execution by the bank of any other agreement that creates amoral obligation of the state to pay all or part of anyindebtedness issued by the bank;
is subject to review by the budget committee and approval by thebudget director.
(d) If the budget committee does not conduct a review of aproposed transaction under subsection (c) within twenty-one (21)days after a request by the bank, the review is considered to havebeen conducted. If the budget director does not approve or
disapprove a proposed transaction under subsection (c) withintwenty-one (21) days after a request by the bank, the transaction isconsidered 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 itsholders, the bank may combine a reserve fund established for anissue 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 notavailable
Sec. 6. The provisions of section 4(a) of this chapter are notavailable to any bonds or notes issued by the bank to purchasesecurities of, or fund loans to, any qualified entity described inIC 5-1.5-1-8(5) or IC 5-1.5-1-8(6).
As added by P.L.37-1991, SEC.4.