1. (a) A county council may adopt a resolution to:

   1. (1) elect to surrender the custody of the fund or any part of the fund; and

   2. (2) order the board of county commissioners, the county auditor, and the county treasurer to take all steps necessary to surrender the custody of the fund or part of the fund that is to be surrendered.

      If the county council adopts a resolution under this section, the amount of money designated by the resolution distributed to and held in trust by the county is to be transferred to the treasurer of state over a period not to exceed twenty (20) years. A county council may elect whether the county shall surrender all or any part of the fund. If the county retains custody of any money in the fund, the county shall loan the money as otherwise provided by law.

2. (b) Within ten (10) days after the passage of the resolution by a county council of a county electing to surrender the custody of the fund or part of the fund, the county auditor shall prepare and file with the board of commissioners of the county a report showing the following:

   1. (1) The total amount of the fund that has been entrusted to and is held in trust by the county.
   2. (2) The total amount of the fund that is loaned as provided by law.
   3. (3) The total amount of the fund, if any, loaned to the county and which loans are unpaid.
   4. (4) The total amount of the fund held in cash in the possession and custody of the county and that is not loaned.
   5. (5) A separate schedule of past due loans. The schedule must show the unpaid balance of principal and the amount of delinquent interest due and unpaid on each delinquent loan.

3. (c) The board of county commissioners shall examine the reports, and, if found correct, the board of county commissioners shall order:

   1. (1) that the report be entered on its records; and

   2. (2) the county auditor to draw the county auditor's warrant, payable to the treasurer of state, for the amount of the fund that is not loaned and is held in cash in the custody and possession of the county as shown by the report.

      The county auditor shall forward the warrants to the state comptroller together with a certified copy of the report. The county auditor shall also forward with the payment a certified copy of the resolution of the county council electing to surrender the custody of the fund or any part of the fund.

4. (d) After passage by the county council of a resolution electing to surrender the custody of the fund or any part of the fund, no part of the fund up to the amount designated in the resolution that is not surrendered to the treasurer of state and is in the custody of the county may be loaned by the county or by any official of the county. Except as provided in this subsection, all outstanding loans of the fund not part of the amount retained by the county at the time of the passage of the resolution shall be collected when due. Any loan that comes due and payable after the passage of the resolution may be renewed for one (1) additional five (5) year period, on the application of the person owing the loan as provided by law. However, a loan that is more than one (1) year delinquent in payment of principal or interest at the time of the passage of the resolution of the county council may not be renewed.

5. (e) The maximum time to surrender money that the county designates in the resolution is for a period not to exceed twenty (20) years. On:

   1. (1) May 1 or November 1 immediately after the passage of the resolution electing to surrender the fund or any part of the fund; and

   2. (2) each May 1 and November 1 thereafter;

      all the money collected and on hand up to the amount designated in the resolution that belongs to the fund that is to be surrendered shall be paid to the treasurer of state. If at the time for a semiannual payment the amount collected and paid to the treasurer of state when added to the amounts previously paid to the treasurer of state is less than the result determined by multiplying two and one-half percent (2.5%) of the amount in the resolution by the number of semiannual payments that have occurred after the passage of the resolution, the county auditor shall draw the county auditor's warrant on the general fund of the county for an amount sufficient to pay to the treasurer of state the difference between the amount paid and the amount equal to the result of multiplying two and one-half percent (2.5%) of the amount designated in the resolution by the number of semiannual payments that have occurred after the passage of the resolution.

6. (f) The board of county commissioners shall, in its annual budget estimate, include an estimate of the amount necessary to make the payments from the county general fund as required by this section, and the county council shall appropriate the amount of the estimate.
7. (g) A county is subrogated to all the rights and remedies of the state with respect to loans made from a fund held in trust by the county to the extent of any and all payments made from the county general fund under this chapter.
8. (h) If a county elects to transfer custody of the fund or any part of the fund to the treasurer of state, the treasurer of state shall ensure that the principal of the fund belonging to any congressional township or a part of a congressional township shall never be diminished in amount.

9. (i) If a county elects to transfer custody of the fund or any part of the fund to the treasurer of state, the treasurer of state shall take steps to ensure that the income of the fund belonging to any congressional township or a part of a congressional township may not be:

   1. (1) diminished by an apportionment; or
   2. (2) diverted or distributed to another township.

As added by P.L.39-2008, SEC.2. Amended by P.L.9-2024, SEC.401.