§ 5-20-1-16 — Capital reserve fund

Indiana § 5-20-1-16

• Jurisdiction: Indiana
• Title 5: STATE AND LOCAL ADMINISTRATION
• Art. 20: HOUSING
• Ch. 1: Indiana Housing and Community Development Authority

Text

(a) The authority may create and establish one
(1) or more special funds, referred to in this section as capital reserve
funds, to secure the notes and bonds. The authority shall pay into each
such capital reserve fund:
(1) any moneys appropriated and made available by the state for
the purposes of such fund;
(2) any proceeds of sale of notes or bonds, to the extent provided
in the resolution of the authority authorizing the issuance thereof;
and
(3) any other moneys which may be made available to the
authority for the purpose of such fund from any other source or
sources.
(b) All moneys held in any capital reserve fund, except as otherwise
specifically provided, shall be used, as required, solely:
(1) for the payment of the principal of bonds of the authority
secured in whole or in part by such fund;
(2) for payment of the sinking fund payments mentioned in this
section with respect to such bonds;
(3) for the purchase or redemption of such bonds;
(4) for the payment of interest on such bonds; or
(5) for the payment of any redemption premium required to be
paid when such bonds are redeemed prior to maturity.
However, if moneys in such fund at any time are less than the capital
reserve fund requirement established for such fund as provided in this
section, the authority shall not use such moneys for any optional
purchase or optional redemption of such bonds. Any income or interest
earned by, or increment to, any capital reserve fund due to the
investment thereof may be transferred by the authority to other funds
or accounts of the authority to the extent such transfer does not reduce
the amount of such capital reserve fund below the capital reserve fund
requirement for such fund.
(c) The authority shall not at any time issue bonds secured in whole
or in part by a capital reserve fund, if, upon the issuance of such bonds,
the amount in such capital reserve fund will be less than the capital
reserve fund requirement of such fund, unless the authority, at the time
of issuance of such bonds, deposits in such fund from the proceeds of
the bonds to be issued, or from other sources, an amount which,
together with the amount then in such fund, will not be less than the
capital reserve fund requirement for such fund. For purposes of this
section, "capital reserve fund requirement" means, as of any particular
date of computation, an amount of money, as provided in the
resolutions of the authority authorizing the bonds with respect to which
such fund is established, which amount shall not exceed the average of
the annual debt service on the bonds of the authority for that calendar
year and succeeding calendar years secured in whole or in part by such
fund. The annual debt service for any calendar year is the amount of
money equal to the aggregate of (1) all interest payable during such
calendar year on all bonds secured in whole or in part by such fund
outstanding on the date of computation, plus (2) the principal amount
of all such bonds outstanding on said date of computation which
mature during such calendar year, plus (3) all amounts specified as
payable during such calendar year as a sinking fund payment with
respect to any of such bonds which mature after such calendar year.
This calculation shall embody the assumption that such bonds will,
after such date of computation, cease to be outstanding by reason, but
only by reason, of:
(1) the payment of bonds when due; and
(2) the payment when due of all such sinking fund payments
payable at or after such date of computation.
However, in computing the annual debt service for any calendar year,
bonds deemed to have been paid in accordance with the defeasance
provisions of the resolution of the authority authorizing the issuance
thereof shall not be included in bonds outstanding on such date of
computation.
(d) To assure the continued operation and solvency of the authority
for the carrying out of the public purposes of this chapter, the authority
shall accumulate in each capital reserve fund an amount equal to the
capital reserve fund requirement for such fund.
(e) In computing the amount of any capital reserve fund for the
purposes of this section, securities in which all or a portion of such
capital reserve fund is invested shall be valued at par, or if purchased
at less than par, at their cost to the authority.
(f) Notwithstanding subsections (a) through (e), the authority,
subject to such agreements with noteholders or bondholders as may
then exist, may elect not to secure any particular issue of its bonds with
a capital reserve fund. Such election shall be made in the resolution
authorizing such issue. In this event, subsections (b) and (c) shall not
apply to the bonds of such issue in that they shall not be entitled to
payment out of, or be eligible for purchase by, any such fund, nor shall
they be taken into account in computing or applying any capital reserve
fund requirement.
As added by Acts 1978, P.L.28, SEC.1. Amended by
P.L.42-2011, SEC.4; P.L.136-2018, SEC.37.