CHAPTER 6.5. CAPITAL FUNDS
IC 5-1.5-6.5
Chapter 6.5. Capital Funds
IC 5-1.5-6.5-1
Capital principal fund and capital interest fund; programs forqualified entities
Sec. 1. (a) The bank shall establish and maintain:
(1) a capital principal fund, to be funded from appropriationsmade to the fund by the general assembly and any other moneythat the bank transfers to the fund; and
(2) a capital interest fund, to be funded from investmentearnings on the capital principal fund.
(b) The bank may use the funds only for programs for qualifiedentities issuing securities for any of the following purposes:
(1) Sewage works.
(2) Waterworks.
(3) Parking facilities.
(4) Redevelopment projects financed with allocated propertytax proceeds under IC 36-7-14-39 or IC 36-7-15.1-26.
As added by P.L.38-1988, SEC.5.
IC 5-1.5-6.5-2
Investments; credit of earnings
Sec. 2. Money in the funds may be invested in the mannerprovided in IC 5-1.5-3-3. However, all earnings on the funds shall becredited to the capital interest fund.
As added by P.L.38-1988, SEC.5.
IC 5-1.5-6.5-3
Capital principal fund; debt service; agreement; recovery
Sec. 3. (a) The capital principal fund may be used only toguarantee payment of debt service on:
(1) securities issued by a qualified entity for a purpose specifiedin section 1(b) of this chapter; or
(2) bonds or notes issued to purchase securities issued for apurpose specified in section 1(b) of this chapter.
(b) The bank and the qualified entity must enter into an agreementbefore a guarantee under subsection (a)(1) is effective. Thisagreement may contain any provisions the bank considersappropriate and may specify which funds held by a state agency aresubject to recovery under subsection (c).
(c) If debt service on securities of a qualified entity is paid by thebank to a qualified entity or owners of its securities under aguarantee under subsection (a)(1), the amount paid from the capitalprincipal fund may be recovered from funds held by a state agencyor department that are payable to the qualified entity as set forth insubsection (b).
As added by P.L.38-1988, SEC.5.
IC 5-1.5-6.5-4
Required debt service reserves; budget committee review
Sec. 4. (a) Except as provided in subsection (d), whenever areserve fund for an issue of bonds or notes issued to purchasesecurities specified in section 1(b) of this chapter does not containthe required debt service reserve (as defined in IC 5-1.5-5-1(b)), thechairman of the board shall immediately:
(1) transfer to the reserve fund the amount needed to restore therequired debt service reserve first from the capital interest fundand, to the extent necessary, from the capital principal fund; and
(2) certify the amounts transferred to the general assembly.
(b) The general assembly may appropriate to the bank for depositin the capital principal fund the amount transferred from the fund torestore required debt service reserves. Nothing in this subsectioncreates a debt or a liability of the state to make any appropriation.
(c) Appropriations made to the capital principal fund do not revertto the state general fund at the end of any fiscal year.
(d) Notwithstanding any other law, and except as provided bysubsection (e), 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.
(e) If the budget committee does not conduct a review of aproposed transaction under subsection (d) 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 ordisapprove a proposed transaction under subsection (d) withintwenty-one (21) days after a request by the bank, the transaction isconsidered to have been approved.
As added by P.L.38-1988, SEC.5. Amended by P.L.235-2005,SEC.78.
IC 5-1.5-6.5-5
Capital interest fund; purposes for use
Sec. 5. With respect to the programs specified in section 1(b) ofthis chapter, the capital interest fund may be used for the followingpurposes in addition to the purpose specified in section 4 of thischapter:
(1) To guarantee payment of debt service on bonds or notes.
(2) To pay premiums for bond insurance or debt service reserveinsurance for bonds or notes.
(3) To pay credit enhancement, liquidity support, remarketing,
or conversion fees for bonds or notes.
(4) To pay other costs of issuance of a bank transaction.
As added by P.L.38-1988, SEC.5.