diff --git a/gcc/fortran/ChangeLog b/gcc/fortran/ChangeLog
index f9ae961007a416aa37c40a86dc8f3d7763fe4195..a0755f88124e07212bafd953b3ed4701b91ed688 100644
--- a/gcc/fortran/ChangeLog
+++ b/gcc/fortran/ChangeLog
@@ -1,3 +1,9 @@
+2008-05-01  Bud Davis  <bdavis9659@sbcglobal.net>
+
+	PR35940/Fortran
+	* simplify.c (gfc_simplify_index): Check for direction argument 
+	being a constant.
+
 2008-05-01  Janus Weil  <jaydub66@gmail.com>
 
 	* gfortran.h (struct gfc_symbol): Moving "interface" member to
diff --git a/gcc/fortran/simplify.c b/gcc/fortran/simplify.c
index 62c1cd45aec94a227c287f25e7b4be7e6630b6b7..cde4770a1ecc2e6d0a94f007b68aad7b1f871b76 100644
--- a/gcc/fortran/simplify.c
+++ b/gcc/fortran/simplify.c
@@ -1570,7 +1570,8 @@ gfc_simplify_index (gfc_expr *x, gfc_expr *y, gfc_expr *b, gfc_expr *kind)
   int back, len, lensub;
   int i, j, k, count, index = 0, start;
 
-  if (x->expr_type != EXPR_CONSTANT || y->expr_type != EXPR_CONSTANT)
+  if (x->expr_type != EXPR_CONSTANT || y->expr_type != EXPR_CONSTANT 
+      || ( b != NULL && b->expr_type !=  EXPR_CONSTANT))
     return NULL;
 
   if (b != NULL && b->value.logical != 0)
diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index c4ef1364b47f49c2c4e1b73f66648baadfdbf320..82d3a4da6cca4dd6faed01582aad323445d2c12f 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,8 @@
+2008-05-01  Bud Davis  <bdavis9659@sbcglobal.net>
+
+	PR fortran/PR35940	
+	* gfortran.dg/index.f90: New test.
+
 2008-05-01  Simon Baldwin <simonb@google.com>
 
 	* testsuite/gcc.dg/Warray-bounds.c: Updated for frontend warnings,
diff --git a/gcc/testsuite/gfortran.dg/index.f90 b/gcc/testsuite/gfortran.dg/index.f90
new file mode 100644
index 0000000000000000000000000000000000000000..58cd25c701ee56c732be24589b6c0495456352c6
--- /dev/null
+++ b/gcc/testsuite/gfortran.dg/index.f90
@@ -0,0 +1,22 @@
+! { dg-do run }
+! pr35940
+      program FA1031
+      implicit none
+      integer I
+      INTEGER IDA1(10)
+      LOGICAL GDA1(10)
+      INTEGER RSLT(10)
+      DATA RSLT /4,1,4,1,4,1,4,1,4,1/
+      IDA1   = 0
+      gda1 = (/ (i/2*2 .ne. I, i=1,10) /)
+
+      IDA1 = INDEX ( 'DEFDEF' , 'DEF', GDA1 )    !fails
+      do I = 1, 10
+         if (IDA1(i).NE.RSLT(i)) call abort
+      end do
+      IDA1 = INDEX ( (/ ('DEFDEF',i=1,10) /) , 'DEF', GDA1 )    !works
+      do I = 1, 10
+         if (IDA1(i).NE.RSLT(i)) call abort
+      end do
+
+      END