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 to guarantee payment of debt service on:

(1) securities issued by a qualified entity for a purpose specified in section 1(b) of this chapter; or

(2) bonds or notes issued to purchase securities issued for a purpose specified in section 1(b) of this chapter.

(b) The bank and the qualified entity must enter into an agreement before a guarantee under subsection (a)(1) is effective. This agreement may contain any provisions the bank considers appropriate and may specify which funds held by a state agency are subject to recovery under subsection (c).

(c) If debt service on securities of a qualified entity is paid by the bank to a qualified entity or owners of its securities under a guarantee under subsection (a)(1), the amount paid from the capital principal fund may be recovered from funds held by a state agency or department that are payable to the qualified entity as set forth in subsection (b).