Sec. 11. (a) In addition to the authority given the board for depositories in section 7 of this chapter, the board may lend, from that part of the insurance fund reserved for economic development, to any commuter transportation district that is established under IC 8-5-15 an amount not to exceed two million six hundred thousand dollars ($2,600,000).

     (b) The board of trustees of a district that receives a loan under this section shall do the following:

(1) Use the loan proceeds only for paying or reimbursing the following costs and expenses of the district:

(A) Property and casualty insurance premiums.

(B) Trackage lease payments.

(C) Traction power expenses.

(D) Conducting a study of commuter transportation within the district under P.L.48-1986.

(E) Any expenses incurred by the district in the ordinary course of providing commuter rail service.

(2) Develop a financial plan for commuter rail service within the district for each year during the loan period. The financial plan must contain the elements prescribed in, and be subject to review and approval under, subsection (c).

(3) Repay the loan in eight (8) annual installments on dates determined by the board for depositories, subject to the following conditions:

(A) The first payment must be made on July 1, 1988.

(B) Each annual payment must equal one-eighth (1/8) of the principal of the loan plus interest at a rate determined by the board for depositories. The rate of interest must not be:

(i) lower than the lowest interest rate set by the state board of finance for a loan under IC 4-4-8-8 (transferred to IC 5-28-9-15) before April 1, 1986; or

(ii) greater than the average yield on investments made by the board in January, February, and March of 1986.

(4) As required by subsection (d), report annually to the board for depositories on compliance with the financial plan developed under subsection (c).

(5) Notwithstanding subdivision (3), pledge to repay the balance of the loan plus interest at a time and in a manner specified by the board for depositories whenever the board for depositories determines that one (1) of the following has occurred:

(A) The board of trustees of the district has failed to develop a financial plan that substantially complies with subsection (c).

(B) There has not been substantial compliance with a financial plan.

(C) The board of trustees of the district has failed to make a payment on the date established under subdivision (3).

If repayment is required under this subdivision, the treasurer of state shall transfer the amount necessary to the insurance fund from the allocation to the district from the state general fund for the remainder of the state fiscal year in which the repayment is required. If the amount transferred from the allocation is insufficient, the balance shall be transferred from the commuter rail service fund until the repayment is complete.

     (c) Before December 1 of each year, the board of trustees of a district receiving a loan under this section shall submit to the board for depositories, the Indiana department of transportation, and the budget committee a financial plan for the following calendar year. The plan must provide for an annual operating budget under which expenses do not exceed revenues from all sources. The financial plan may identify supplemental revenue sources from within the district that will be dedicated during the year to commuter rail service in the district. Within sixty (60) days after the plan is submitted, the board for depositories shall determine if the financial plan complies with this subsection. In making its determination, the board for depositories shall consider the recommendations of the budget committee, which shall base its recommendations on the department of transportation’s evaluation of the financial plan.

     (d) Before April 1 of the second calendar year after a loan under this section is made and before April 1 of each year thereafter, the board of trustees of a district receiving a loan shall submit to the board for depositories, the Indiana department of transportation, and the budget committee a report covering the preceding calendar year. The report must summarize the district’s compliance with the financial plan submitted under subsection (c) and must contain other information as the board for depositories may require. Before July 1 of that year, the board for depositories shall determine if the district has substantially complied with the financial plan. In making its determination, the board for depositories shall consider the recommendations of the budget committee, which shall base its recommendations on the Indiana department of transportation’s evaluation of the report.

     (e) After January 1, 1988, the board for depositories and the board of trustees of a district receiving a loan under this section may agree to an early repayment of the loan. If an early repayment is agreed to, the board for depositories may guarantee a loan obtained by the board of trustees under conditions established by the board for depositories. These conditions may include the requirement that the district pledge to repay from its allocations from the state general fund and the commuter rail fund service any loss sustained by the insurance fund as a result of the guarantee.

As added by P.L.19-1987, SEC.14. Amended by P.L.18-1990, SEC.10; P.L.18-1996, SEC.26; P.L.4-2005, SEC.27; P.L.201-2023, SEC.83.