CHAPTER 12. BOARD FOR DEPOSITORIES
IC 5-13-12
Chapter 12. Board for Depositories
IC 5-13-12-1
Creation; purpose; public deposit insurance fund; tax exemption
Sec. 1. (a) There is created an independent body politic and
corporate, constituting an instrumentality of the state for the public
purposes set out in this chapter, to be known as the board for
depositories. The board is separate from the state in its corporate and
sovereign capacity. The purpose of the board is to insure the
safekeeping and prompt payment of all public funds deposited in any
depository, to the extent they are not covered by insurance of any
federal deposit insurance agency, by maintaining and operating in its
own name the public deposit insurance fund under this chapter.
(b) Every depository that has public funds shall pay into the
public deposit insurance fund the assessments provided in this
chapter and comply with all lawful requirements of the board for
depositories. The public deposit insurance fund shall be maintained
by the assessments payable by the depositories and by the collection
of all claims created under IC 5-13-13 and by the receipt of all
interest and other earnings of the insurance fund from any source.
(c) All property in the public deposit insurance fund, the interest
or income derived from it or through its use, and all property
otherwise held by the board for depositories under this chapter is
exempt from all taxes imposed by the state or any political
subdivision.
As added by P.L.19-1987, SEC.14.
IC 5-13-12-2
Membership; term; officers; quorum; conduct of meetings; notice;
proceedings; executive sessions; records
Sec. 2. (a) The board for depositories consists of the governor, the
treasurer of state, the auditor of state, the chairperson of the
department of financial institutions, the chief examiner of the state
board of accounts, and four (4) appointed members. For
appointments after June 30, 2010, one (1) member shall be appointed
by the speaker of the house of representatives, one (1) member shall
be appointed by the president pro tempore of the senate, and two (2)
members shall be appointed by the governor. All appointed members
must be residents of Indiana. The speaker of the house of
representatives shall make the appointment to fill the first vacancy
on the board, and the president pro tempore of the senate shall make
the appointment to fill the second vacancy on the board that occurs
after June 30, 2010. In making the governor's two (2) appointments,
the governor shall assure that no more than two (2) of the four (4)
appointees identify with the same political party. For appointments
after June 30, 2010, all four (4) appointed members must be a chief
executive officer or a chief financial officer of a depository at the
time of the appointment if the depository is domiciled in Indiana. If
the depository is not domiciled in Indiana, the appointee must be the
most senior corporate officer of the depository with management or
operational responsibility, or both, or the person designated to
manage public funds for the depository that is located in Indiana. In
making the governor's appointments, the governor shall provide for
geographic representation of all regions of Indiana, including both
urban and rural communities. In addition, the appointees must, at the
time of the appointment, be employed by the following depositories:
(1) One (1) member appointed by the governor who must be the
chief executive officer or the chief financial officer of a
depository that is a state chartered credit union.
(2) One (1) member appointed by the governor who must be
employed by a depository that:
(A) is not a state chartered credit union; and
(B) has total deposits of less than two hundred fifty
million dollars ($250,000,000).
(3) The member appointed by the president pro tempore of the
senate must be employed by a depository that:
(A) is not a state chartered credit union; and
(B) has total deposits of at least two hundred fifty million
dollars ($250,000,000) but less than one billion dollars
($1,000,000,000).
(4) The member appointed by the speaker of the house of
representatives must be employed by a depository that:
(A) is not a state chartered credit union; and
(B) has total deposits of at least one billion dollars
($1,000,000,000).
Total deposits shall be determined using the depository's reported
deposits based on the information contained in the most recent June
30th FDIC Summary of Deposits, Market Share Selection for
Indiana. The term of an appointed member is four (4) years from the
effective date of the member's appointment. Each appointed member
holds office for the term of this appointment and serves after the
expiration of that appointment until the member's successor is
appointed and qualified. An appointed member may be reappointed
if the individual satisfies the requirements of this subsection at the
time of the reappointment. Any appointed member may be removed
from office by, and at the pleasure of, the appointing authority.
(b) The officers of the board consist of a chairman, a
secretary-investment manager, a vice chairman, and other officers the
board determines to be necessary. The governor shall name a
member of the board to serve as its chairman. The treasurer of state
shall serve as the secretary-investment manager of the board. The
board, by majority vote, shall elect the other officers. Officers,
except the secretary-investment manager, shall be named or elected
for one (1) year terms in January of each year. The members and
officers of the board are not entitled to any compensation for their
services but are entitled to reimbursement for actual and necessary
expenses on the same basis as state employees.
(c) Five (5) members of the board constitute a quorum for the
transaction of business, and all actions of the board must be approved
by at least a simple majority of those members voting on each
individual business issue. The board may adopt, amend, or repeal
bylaws and rules for the conduct of its meetings and the number and
times of its meetings. The board shall hold a regular meeting at least
once each calendar quarter and may hold other regular and special
meetings as prescribed in its rules. All meetings of the board are
open to the public under IC 5-14-1.5. However, the board shall
discuss the following in executive session:
(1) The financial strength of a particular financial institution.
(2) The collateral requirements of a particular financial
institution.
(3) Any other matters concerning a particular financial
institution.
All records of the board are subject to public inspection under
IC 5-14-3. However, records regarding matters that are discussed in
executive session are confidential.
(d) Two (2) days notice of the time and place of all meetings to
determine and fix the assessment rate to be paid by depositories on
account of insurance on public funds or the establishment or
redetermination of the reserve for losses of the insurance fund shall
be given by one (1) publication in a newspaper of general circulation
printed and published in the city of Indianapolis. The time, place,
notice, and waiver requirements for the members of the board for all
meetings shall be determined by its rules. The secretary-investment
manager of the board shall enter its proceedings at length in a record
provided for that purpose, and the records of the proceedings shall be
approved and signed respectively by the chairman or vice chairman
and attested by the secretary-investment manager.
As added by P.L.19-1987, SEC.14. Amended by P.L.115-2010,
SEC.13.
IC 5-13-12-2.5
Member participating in board meeting by alternate means of
communication
Sec. 2.5. (a) This section applies to a meeting of the board for
depositories at which at least five (5) members of the board are
physically present at the place where the meeting is conducted.
(b) A member of the board may participate in a meeting of the
board by using a means of communication that permits:
(1) all other members participating in the meeting; and
(2) all members of the public physically present at the place
where the meeting is conducted;
to simultaneously communicate with each other during the meeting.
(c) A member who participates in a meeting under subsection (b)
is considered to be present at the meeting.
(d) A member who participates in a meeting under subsection (b)
may act as a voting member on official action only if that official
action is voted upon by at least five (5) members of the board
physically present at the place where the meeting is conducted.
(e) The memoranda of the meeting prepared under IC 5-14-1.5-4
must also state the name of each member who:
(1) was physically present at the place where the meeting was
conducted;
(2) participated in the meeting by using a means of
communication described in subsection (b); and
(3) was absent.
(f) A member who participates in a meeting under subsection (b)
may not cast the deciding vote on any official action.
As added by P.L.141-2000, SEC.1.
IC 5-13-12-3
Function, powers, and purpose
Sec. 3. (a) The board for depositories exercises essential public
functions, and has a perpetual existence. The board has all powers
necessary, convenient, or appropriate to carry out and effectuate its
public and corporate purposes, including but not limited to the
powers to do the following:
(1) Adopt, amend, and repeal bylaws and rules consistent with
this chapter to regulate its affairs and to effect the powers and
purposes of the board, all without the necessity of adopting a
rule under IC 4-22-2.
(2) Adopt its budget on a calendar year or fiscal year as it shall
determine.
(3) Sue and be sued in its own name.
(4) Have an official seal and alter it at will.
(5) Maintain an office or offices at a place or places within
Indiana as it may designate.
(6) Make and execute contracts and all other instruments with
either public or private entities.
(7) Communicate with the employees of the Indiana finance
authority to the extent reasonably desirable in working on a
guarantee of an industrial development obligation or credit
enhancement obligation.
(8) Deposit all uninvested funds of the public deposit insurance
fund in a separate account or accounts in financial institutions
that are designated as depositories to receive state funds under
IC 5-13-9.5. The money in these accounts shall be paid out on
checks signed by the chairman or other officers or employees of
the board as it shall authorize.
(9) Take any other act necessary or convenient for the
performance of its duties and the exercise of its powers and
functions under this chapter.
(b) In enforcing any obligation of the borrower or any other
person under the documents evidencing a guarantee, the board may
renegotiate the guarantee, modify the rate of interest, term of the
industrial development obligation or credit enhancement obligation,
payment of any installment of principal or interest, or any other term
of any documents, settle any obligation on the security or receipt of
property or the other terms as in its discretion it deems advantageous
to the public deposit insurance fund, and take any other action
necessary or convenient to such enforcement.
(c) The records of the board for depositories relating to
negotiations between it and prospects for industrial development
obligation or credit enhancement obligation guarantees are excepted
from the provisions of IC 5-14-3-3.
As added by P.L.19-1987, SEC.14. Amended by P.L.11-1990,
SEC.106; P.L.18-1996, SEC.24; P.L.235-2005, SEC.80.
IC 5-13-12-3.1
Code of ethics
Sec. 3.1. (a) The board for depositories shall:
(1) adopt:
(A) rules under IC 4-22-2; or
(B) a policy;
establishing a code of ethics for its employees; or
(2) decide it wishes to be under the jurisdiction and rules
adopted by the state ethics commission.
(b) A code of ethics adopted by rule or policy under this section
must be consistent with state law and approved by the governor.
As added by P.L.5-1996, SEC.6.
IC 5-13-12-4 Version a
Secretary-investment manager; powers and duties; pension
distribution fund
Note: This version of section effective until 1-1-2011. See also
following version of this section, effective 1-1-2011.
Sec. 4. (a) The secretary-investment manager shall administer,
manage, and direct the affairs and activities of the board under the
policies and under the control and direction of the board. In carrying
out these duties, the secretary-investment manager has the power to
do the following:
(1) Approve all accounts for salaries and allowable expenses of
the board, including, but not limited to:
(A) the employment of general or special attorneys,
consultants, and employees and agents as may be necessary
to assist the secretary-investment manager in carrying out
the duties of that office and to assist the board in its
consideration of applications for a guarantee of an industrial
development obligation or credit enhancement obligation
guarantee; and
(B) the setting of compensation of persons employed under
clause (A).
(2) Approve all expenses incidental to the operation of the
public deposit insurance fund.
(3) Perform other duties and functions that may be delegated to
the secretary-investment manager by the board or that are
necessary to carry out the duties of the secretary-investment
manager under this chapter.
(b) The secretary-investment manager shall keep a record of the
proceedings of the board, and shall maintain and be custodian of all
books, documents, and papers filed with the board, and its official
seal. The secretary-investment manager may make copies of all
minutes and other records and documents of the board, and may give
certificates under seal of the board to the effect that the copies are
true copies. All persons dealing with the board may rely upon the
certificates.
(c) Each year, beginning in 2001 and ending in 2021, after the
treasurer of state prepares the annual report required by
IC 4-8.1-2-14, the secretary-investment manager shall determine:
(1) the amount of interest earned by the public deposit
insurance fund during the state fiscal year ending on the
preceding June 30, after deducting:
(A) all expenses and other costs of the board for depositories
that were not paid from other sources during that state fiscal
year; and
(B) all expenses and other costs associated with the Indiana
education savings authority that were not paid from other
sources during that state fiscal year; and
(2) the amount of interest earned during the state fiscal year
ending on the preceding June 30 by the pension distribution
fund established by subsection (g).
(d) On or before November 1 of each year, beginning in 2001 and
ending in 2021, the public employees' retirement fund shall provide
a report to the secretary-investment manager concerning the
individual and aggregate payments made by all units of local
government (as defined in IC 5-10.3-11-3) during the preceding
calendar year for benefits under the police and firefighter pension
funds established by IC 36-8-6, IC 36-8-7, and IC 36-8-7.5.
(e) On or before the last business day of November of each year,
beginning in 2001 and ending in 2021, the secretary-investment
manager shall compute the amount of earned interest to be
distributed under this section to each unit of local government (as
defined in IC 5-10.3-11-3) in accordance with subsection (h)
according to the following formula:
STEP ONE: Add the amount determined under subsection
(c)(1) to the amount determined under subsection (c)(2).
STEP TWO: Divide the STEP ONE sum by the aggregate
amount of payments made by all units of local government
during the preceding calendar year for benefits under the police
and firefighter pension funds established by IC 36-8-6,
IC 36-8-7, and IC 36-8-7.5, as reported under subsection (d).
STEP THREE: Multiply the STEP TWO quotient by the
amount of payments made by each unit of local government
during the preceding calendar year for benefits under the police
and firefighter pension funds established by IC 36-8-6,
IC 36-8-7, and IC 36-8-7.5, as reported under subsection (d).
(f) Subject to subsection (j), on or before the last business day of
December of each year, beginning in 2001 and ending in 2021, the
secretary-investment manager shall provide to the auditor of state:
(1) a report setting forth the amounts to be distributed to units
of local government, as determined under subsection (e); and
(2) a check payable from the public deposit insurance fund to
the pension distribution fund established by subsection (g) in an
amount equal to the amount determined under subsection (c)(1).
(g) The pension distribution fund is established. The pension
distribution fund shall be administered by the treasurer of state. The
treasurer of state shall invest money in the pension distribution fund
not currently needed to meet the obligations of the pension
distribution fund in the same manner as other public money may be
invested. Interest that accrues from these investments shall be
deposited in the pension distribution fund. Money in the pension
distribution fund at the end of a state fiscal year does not revert to the
state general fund.
(h) Subject to subsection (j), on June 30 and October 1 of each
year, beginning in 2002 and ending in 2022, the auditor of state shall
distribute in two (2) equal installments from the pension distribution
fund to the fiscal officer of each unit of local government identified
under subsection (d) the amount computed for that unit under
subsection (e) in November of the preceding year.
(i) Each unit of local government shall deposit distributions
received under subsection (h) in the pension fund or funds identified
by the secretary-investment manager and shall use those distributions
to pay a portion of the obligations with respect to the pension fund
or funds.
(j) Before providing a check to the auditor of state under
subsection (f)(2) in December of any year, the secretary-investment
manager shall determine:
(1) the total amount of payments made from the public deposit
insurance fund under IC 5-13-13-3 after June 30, 2001;
(2) the total amount of payments received by the board for
depositories and deposited in the public deposit insurance fund
under IC 5-13-13-3 after June 30, 2001; and
(3) the total amount of interest earned by the public deposit
insurance fund after the first of the payments described in
subdivision (1).
If the total amount of payments determined under subdivision (1) less
the total amount of payments determined under subdivision (2)
(referred to in this subsection as the "net draw on the fund") exceeds
ten million dollars ($10,000,000) and also exceeds the total amount
of interest determined under subdivision (3), the
secretary-investment manager may not provide a check to the auditor
of state under subsection (f)(2) and a distribution may not be made
from the pension distribution fund under subsection (h) in the
following calendar year until the total amount of interest earned by
the public deposit insurance fund equals the net draw on the fund. A
check may not be provided under subsection (f)(2) and a distribution
may not be made under subsection (f) in any subsequent calendar
year if a study conducted by the board under section 7(b) of this
chapter demonstrates that payment of the distribution would reduce
the balance of the public deposit insurance fund to a level
insufficient to ensure the safekeeping and prompt payment of public
funds to the extent they are not covered by insurance of any federal
deposit insurance agency.
As added by P.L.19-1987, SEC.14. Amended by P.L.281-2001,
SEC.1; P.L.146-2008, SEC.39.
IC 5-13-12-4 Version b
Secretary-investment manager; powers and duties; pension
distribution fund
Note: This version of section effective 1-1-2011. See also
preceding version of this section, effective until 1-1-2011.
Sec. 4. (a) The secretary-investment manager shall administer,
manage, and direct the affairs and activities of the board under the
policies and under the control and direction of the board. In carrying
out these duties, the secretary-investment manager has the power to
do the following:
(1) Approve all accounts for salaries and allowable expenses of
the board, including, but not limited to:
(A) the employment of general or special attorneys,
consultants, and employees and agents as may be necessary
to assist the secretary-investment manager in carrying out
the duties of that office and to assist the board in its
consideration of applications for a guarantee of an industrial
development obligation or credit enhancement obligation
guarantee; and
(B) the setting of compensation of persons employed under
clause (A).
(2) Approve all expenses incidental to the operation of the
public deposit insurance fund.
(3) Perform other duties and functions that may be delegated to
the secretary-investment manager by the board or that are
necessary to carry out the duties of the secretary-investment
manager under this chapter.
(b) The secretary-investment manager shall keep a record of the
proceedings of the board, and shall maintain and be custodian of all
books, documents, and papers filed with the board, and its official
seal. The secretary-investment manager may make copies of all
minutes and other records and documents of the board, and may give
certificates under seal of the board to the effect that the copies are
true copies. All persons dealing with the board may rely upon the
certificates.
(c) Each year, beginning in 2001 and ending in 2021, after the
treasurer of state prepares the annual report required by
IC 4-8.1-2-14, the secretary-investment manager shall determine:
(1) the amount of interest earned by the public deposit
insurance fund during the state fiscal year ending on the
preceding June 30, after deducting:
(A) all expenses and other costs of the board for depositories
that were not paid from other sources during that state fiscal
year; and
(B) all expenses and other costs associated with the Indiana
education savings authority that were not paid from other
sources during that state fiscal year; and
(2) the amount of interest earned during the state fiscal year
ending on the preceding June 30 by the pension distribution
fund established by subsection (e).
(d) Subject to subsection (g), on or before the last business day of
December of each year, beginning in 2001 and ending in 2021, the
secretary-investment manager shall provide to the auditor of state a
check payable from the public deposit insurance fund to the pension
distribution fund established by subsection (e) in an amount equal to
the amount determined under subsection (c)(1).
(e) The pension distribution fund is established. The pension
distribution fund shall be administered by the treasurer of state. The
treasurer of state shall invest money in the pension distribution fund
not currently needed to meet the obligations of the pension
distribution fund in the same manner as other public money may be
invested. Interest that accrues from these investments shall be
deposited in the pension distribution fund. Money in the pension
distribution fund at the end of a state fiscal year does not revert to the
state general fund.
(f) Subject to subsection (g), before June 30 and after June 30 and
before October 1 of each year, beginning in 2002 and ending in 2022,
the auditor of state shall distribute in two (2) equal installments from
the pension distribution fund to the public employees' retirement
fund for deposit in the pension relief fund, established by
IC 5-10.3-11-1, the following:
(1) The amount determined under subsection (c)(2).
(2) The amount deposited in the pension distribution fund in
December of the preceding year under subsection (d).
The installments shall be used for distributions to units of local
government under IC 5-10.3-11-4.7.
(g) Before providing a check to the auditor of state under
subsection (d) in December of any year, the secretary-investment
manager shall determine:
(1) the total amount of payments made from the public deposit
insurance fund under IC 5-13-13-3 after June 30, 2001;
(2) the total amount of payments received by the board for
depositories and deposited in the public deposit insurance fund
under IC 5-13-13-3 after June 30, 2001; and
(3) the total amount of interest earned by the public deposit
insurance fund after the first of the payments described in
subdivision (1).
If the total amount of payments determined under subdivision (1) less
the total amount of payments determined under subdivision (2)
(referred to in this subsection as the "net draw on the fund") exceeds
ten million dollars ($10,000,000) and also exceeds the total amount
of interest determined under subdivision (3), the
secretary-investment manager may not provide a check to the auditor
of state under subsection (d) and a distribution may not be made
from the pension distribution fund under subsection (f) in the
following calendar year until the total amount of interest earned by
the public deposit insurance fund equals the net draw on the fund. A
check may not be provided under subsection (d) and a distribution
may not be made under subsection (d) in any subsequent calendar
year if a study conducted by the board under section 7(b) of this
chapter demonstrates that payment of the distribution would reduce
the balance of the public deposit insurance fund to a level
insufficient to ensure the safekeeping and prompt payment of public
funds to the extent they are not covered by insurance of any federal
deposit insurance agency.
As added by P.L.19-1987, SEC.14. Amended by P.L.281-2001,
SEC.1; P.L.146-2008, SEC.39; P.L.115-2010, SEC.14.
IC 5-13-12-5
Assessment rate; determination and fixing; assessment base;
waiver or elimination of assessment rate
Sec. 5. (a) Subject to the limitations prescribed in this chapter, the
board for depositories may fix the assessment rate to provide assets
in the fund sufficient to equal the reserve for losses of the fund for
the insurance of public funds on deposit in depositories. Effective on
July 1, and January 1, of each year, and from time to time as the
board determines necessary, the board shall determine and fix the
fair and reasonable assessment rate for each classification of deposit,
if any, to be used by depositories in determining the assessments.
This determination shall be made by the board before or as soon as
practicable after the applicable July 1, January 1, or other date
established by the board. In fixing the rate, if any, the board shall
consider the amount of public funds currently on deposit, the
liabilities of the insurance fund, contingent and accrued, and the
determination of the board on the amount of the reserve for losses of
the insurance fund as set out in section 7(b) of this chapter. For any
period, the maximum assessment rate that may be fixed by the board
is two percent (2%). The board may lower or waive the assessment
on any or all classifications of deposit if in its discretion it
determines that a lower rate or waiver will not prevent the fund from
attaining sufficient assets to equal the reserve for losses. Subject to
the board's power to implement an assessment at any time by action
by the board, if no action has been taken by the board for
depositories fixing the assessment rate, if any, on public funds, the
assessment rate is the same rate, if any. Whenever as of July 1, or
January 1, or another date established by the board, the value of the
assets in the fund equals or exceeds the reserve for losses, the board
shall eliminate the assessment requirement for each classification of
deposit.
(b) During any period when an assessment rate is in effect, the
assessment base for each depository of public funds shall be
determined monthly. The assessment base must be equal to the sum
total of all the minimum balances of each classification of public
funds on deposit in each and all accounts during the month, the
minimum balance of each account being taken respectively as of the
date on which it occurs. For purposes of this section, deposits that
are federally insured are not considered public funds deposits in a
depository. On or before the second day of each month in which an
assessment rate is in effect, each depository shall compute the
amount of the assessment due from it to the insurance fund on
account of public funds on deposit with it during the preceding
month. The amount of the monthly assessment, if any, is the product
obtained by multiplying one-twelfth (1/12) times the assessment base
for the month for which the assessment is being computed.
(c) During the time the assessment rate on public funds has been
waived or eliminated by the board for depositories, the respective
depositories are not obligated to pay any assessment but shall
continue to prepare and file the reports that would otherwise be
required to be prepared and filed under this chapter.
As added by P.L.19-1987, SEC.14. Amended by P.L.115-2010,
SEC.15.
IC 5-13-12-6
Depositories; duty to file monthly report and pay assessment to
insurance fund; failure to pay; forms
Sec. 6. (a) On or before the fifth day of each month, every
depository that had public funds on deposit with it during the
preceding month shall:
(1) file with the board for depositories a certified report under
oath showing for the preceding month the amount of the
assessment base and the amount of the monthly assessment due
the insurance fund, as determined under section 5 of this
chapter; and
(2) pay the insurance fund the amount of the monthly
assessment it is required to certify. The board for depositories
may waive all or part of the reporting requirement under this
section during any period when the board does not levy an
assessment.
(b) If any depository fails to pay the insurance fund on or before
the fifth day of each one (1) month period the full assessment due
from it for the preceding one (1) month period on account of public
funds deposited with it, the depository is liable for double the
assessment. This amount may be recovered in any court of competent
jurisdiction in a civil action by the state on the relation of the board
for depositories.
(c) The state board of accounts, with the approval of the attorney
general, shall prepare and prescribe the forms of reports required by
this section.
As added by P.L.19-1987, SEC.14.
IC 5-13-12-7
Insurance fund; management and operation; establishment of
reserve; determination of profit distribution; investment;
limitations; immunity of members
Sec. 7. (a) The board for depositories shall manage and operate
the insurance fund. All expenses incident to the administration of the
fund shall be paid out of the money accumulated in it subject to the
direction of the board for depositories.
(b) Effective January 1 and July 1 in each year, the board shall
before those dates redetermine the amount of the reserve to be
maintained by the insurance fund. The establishment or any change
in the reserve for losses shall be determined by the board based on
information the board considers, including but not limited to capital
adequacy, liquidity, and asset quality, and a study to be made or
updated by actuaries, economists, or other consultants based on the
history of losses, earnings on the funds, conditions of the
depositories, economic conditions affecting particular depositories
or depositories in general, and any other factors that the board
considers relevant in making its determination. The reserve
determined by the board must be sufficient to ensure the safekeeping
and prompt payment of public funds to the extent they are not
covered by insurance of any federal deposit insurance agency.
(c) At the end of each biennial period during which depositories
have had public funds on deposit under this chapter and paid the
assessments levied by the board, the board shall compute its receipts
from assessments and all other sources and its expenses and losses
and determine the profit derived from the operation of the fund for
the period. Until the amount of the reserve for losses has been
accumulated, all assessments levied for a biennial period shall be
retained by the fund. The amount of the assessments, if any, levied
by the board shall, to the extent the fund exceeds the reserve for
losses at the end of a biennial period commencing July 1 of each
odd-numbered year, be distributed to the depositories that had public
funds on deposit during the biennial period in which the assessments
were paid. The distribution shall be made to the respective
depositories in the proportion that the total assessments paid by each
depository during that period bears to the total assessments then paid
by all depositories. A distribution to which any closed depository
would otherwise be entitled shall be set off against any claim that the
insurance fund may have against the closed depository.
(d) The board may invest, reinvest, and exchange investments of
the insurance fund in excess of the cash working balance in any of
the following:
(1) In bonds, notes, certificates, and other valid obligations of
the United States, either directly or, subject to the limitations in
subsection (e), in the form of securities of or other interests in
an open-end no-load management-type investment company or
investment trust registered under the provisions of the
Investment Company Act of 1940, as amended (15 U.S.C. 80a
et seq.).
(2) In bonds, notes, debentures, and other securities issued by
a federal agency or a federal instrumentality and fully
guaranteed by the United States either directly or, subject to the
limitations in subsection (e), in the form of securities of or other
interests in an open-end no-load management-type investment
company or investment trust registered under the provisions of
the Investment Company Act of 1940, as amended (15 U.S.C.
80a et seq.).
(3) In bonds, notes, certificates, and other valid obligations of
a state or of an Indiana political subdivision that are issued
under law, the issuers of which, for five (5) years before the
date of the investment, have promptly paid the principal and
interest on their bonds and other legal obligations.
(4) In bonds or other obligations of the Indiana finance
authority issued under IC 4-13.5.
(5) In investments permitted the state under IC 5-13-10.5.
(6) In guarantees of industrial development obligations or credit
enhancement obligations, or both, for the purposes of retaining
and increasing employment in enterprises in Indiana, subject to
the limitations and conditions set out in this subdivision,
subsection (e), and section 8 of this chapter. An individual
guarantee of the board under this subdivision must not exceed
eight million dollars ($8,000,000).
(7) In guarantees of bonds or notes issued under IC 5-1.5-4-1,
subject to the limitations and conditions set out in subsection
(e) and section 8 of this chapter.
(8) In bonds, notes, or other valid obligations of the Indiana
finance authority that have been issued in conjunction with the
authority's acquisition, development, or improvement of
property or other interests for an industrial development project
(as defined in IC 4-4-10.9-11) that the authority has undertaken
for the purposes of retaining or increasing employment in
existing or new enterprises in Indiana, subject to the limitations
in subsection (e).
(9) In notes or other debt obligations of counties, cities, and
towns that have been issued under IC 6-1.1-39 for borrowings
from the industrial development fund under IC 5-28-9 for
purposes of retaining or increasing employment in existing or
new enterprises in Indiana, subject to the limitations in
subsection (e).
(10) In bonds or other obligations of the Indiana housing and
community development authority.
(e) The investment authority of the board under subsection (d) is
subject to the following limitations:
(1) For investments under subsection (d)(1) and (d)(2), the
portfolio of an open-end no-load management-type investment
company or investment trust must be limited to:
(A) direct obligations of the United States and obligations of
a federal agency or a federal instrumentality that are fully
guaranteed by the United States; and
(B) repurchase agreements fully collateralized by obligations
described in clause (A), of which the company or trust takes
delivery either directly or through an authorized custodian.
(2) Total outstanding investments in guarantees of industrial
development obligations and credit enhancement obligations
under subsection (d)(6) must not exceed the greater of:
(A) ten percent (10%) of the available balance of the
insurance fund; or
(B) fourteen million dollars ($14,000,000).
(3) Total outstanding investments in guarantees of bond bank
obligations under subsection (d)(7) must not exceed the greater
of:
(A) twenty percent (20%) of the available balance of the
insurance fund; or
(B) twenty-four million dollars ($24,000,000).
(4) Total outstanding investments in bonds, notes, or other
obligations of the Indiana finance authority under subsection
(d)(8) may not exceed the greater of:
(A) fifteen percent (15%) of the available balance of the
insurance fund; or
(B) twenty million dollars ($20,000,000).
However, after June 30, 1988, the board may not make any
additional investment in bonds, notes, or other obligations of
the Indiana finance authority issued under IC 4-4-11, and the
board may invest an amount equal to the remainder, if any, of:
(i) fifteen percent (15%) of the available balance of the
insurance fund; minus
(ii) the board's total outstanding investments in bonds,
notes, or other obligations of the Indiana finance authority
issued under IC 4-4-11;
in guarantees of industrial development obligations or credit
enhancement obligations, or both, as authorized by subsection
(d)(6). In such a case, the outstanding investments, as
authorized by subsection (d)(6) and (d)(8), may not exceed in
total the greater of twenty-five percent (25%) of the available
balance of the insurance fund or thirty-four million dollars
($34,000,000).
(5) Total outstanding investments in notes or other debt
obligations of counties, cities, and towns under subsection
(d)(9) may not exceed the greater of:
(A) ten percent (10%) of the available balance of the
insurance fund; or
(B) twelve million dollars ($12,000,000).
(f) For purposes of subsection (e), the available balance of the
insurance fund does not include the outstanding principal amount of
any fund investment in a corporate note or obligation or the part of
the fund that has been established as a reserve for losses.
(g) Except as provided in section 4 of this chapter, all interest and
other income earned on investments of the insurance fund and all
amounts collected by the board accrue to the fund.
(h) Members of the board and any officers or employees of the
board are not subject to personal liability or accountability by reason
of any investment in any of the obligations listed in subsection (d).
(i) The board shall, when directed by the state board of finance
constituted by IC 4-9.1-1-1, purchase the loan made by the state
board of finance under IC 4-10-18-10(i). The loan shall be purchased
by the board at a purchase price equal to the total of:
(1) the principal amount of the loan;
(2) the deferred interest payable on the loan; and
(3) accrued interest to the date of purchase by the board.
Members of the board and any officers or employees of the board are
not subject to personal liability or accountability by reason of the
purchase of the loan under this subsection.
As added by P.L.19-1987, SEC.14. Amended by P.L.67-1989, SEC.2;
P.L.69-1989, SEC.1; P.L.11-1990, SEC.107; P.L.1-1992, SEC.10;
P.L.28-1993, SEC.6; P.L.18-1996, SEC.25; P.L.281-2001, SEC.2;
P.L.4-2005, SEC.26; P.L.235-2005, SEC.81; P.L.1-2006, SEC.100;
P.L.115-2010, SEC.16.
IC 5-13-12-8
Industrial development obligation or credit enhancement
obligation guarantees; limitations; conditions; claims, losses, or
debts
Sec. 8. (a) The board for depositories, in making the industrial
development obligation or credit enhancement obligation guarantees
authorized under section 7(d)(6) of this chapter, shall comply with
the following limitations:
(1) A guarantee shall be made only of industrial development
obligations or credit enhancement obligations for the purpose
of retaining, retaining and expanding, or bringing significant
employment into Indiana, as determined by the board under
subdivision (3)(A).
(2) Each industrial development obligation or credit
enhancement obligation must be guaranteed not only by the
board but also by the Indiana economic development
corporation created by IC 5-28-3-1. Each guarantee must
provide that in the event of a valid claim of loss by the lender,
the lessor, or the issuer of the credit enhancement arising under
the industrial development obligation or credit enhancement
documents, the amount of the loss, up to two million dollars
($2,000,000), shall first be paid by the industrial development
project guaranty fund created by IC 5-28-30-9, and only the
remainder of the loss, if any, shall to the extent guaranteed be
paid by the public deposit insurance fund. Neither fund is
responsible for the amount due from the other under its
guarantee.
(3) The guarantee of the industrial development obligation or
credit enhancement obligation by the board for depositories
must be recommended by the Indiana economic development
corporation. Subject to that recommendation, the board for
depositories may make the guarantee if it determines:
(A) that the guarantee creates a reasonable probability that
loss in Indiana employment that would occur will be
significantly reduced or that Indiana's employment will be
significantly expanded;
(B) that the consequent reduction in employment loss or the
expansion in employment will enhance the economic
stability of the community or communities in the state where
the borrower or lessee conducts its business;
(C) that there is reasonable probability that the industrial
development obligation will be repaid or satisfied or that the
credit enhancement will be satisfied; and
(D) that the industrial development obligation or credit
enhancement obligation and guarantee are protected against
loss and the borrower or lessee has agreed to pay the
insurance fund a guarantee premium annually as provided in
subdivision (6).
(4) Protection against loss on the industrial development
obligation or credit enhancement obligation guaranteed will be
provided:
(A) in loan transactions by:
(i) a valid security agreement;
(ii) mortgage;
(iii) combination of (i) and (ii); or
(iv) other document; and
(B) in lease transactions by the guaranteed party's rights as
owner of the leased property.
(5) The term of the guarantee must not exceed twenty (20)
years. The amount of the guarantee provided by the board,
together with the corresponding guarantee to be provided by the
industrial development project guaranty fund under subdivision
(2), must not exceed:
(A) the lesser of:
(i) ninety percent (90%) of the unpaid balance of the
obligation; or
(ii) ninety percent (90%) of the appraised fair market value
of the real estate;
if the obligation is backed by real estate;
(B) the lesser of:
(i) seventy-five percent (75%) of the unpaid balance of the
obligation; or
(ii) seventy-five percent (75%) of the appraised fair market
value of the equipment;
if the obligation is backed by equipment; or
(C) a weighted average of the figures derived under clauses
(A)(ii) and (B)(ii) if the obligation is backed by real estate
and equipment.
(6) The guarantee premium to be received by the public deposit
insurance fund for the guarantee must be at an annual
percentage rate on the outstanding principal amount of the
industrial development obligation or the credit enhancement
obligation of not less, in the discretion of the board, than the
market rate for guarantees, mortgage insurance rates, or letters
of credit used for similar purposes at the time the guarantee is
made. However, the annual percentage rate must not exceed two
percent (2%) of the outstanding principal obligation.
(b) The following conditions apply to the making of bond bank
obligation guarantees under section 7(d)(7) of this chapter:
(1) Each bond bank obligation guaranteed must be secured by
a pledge of securities of a qualified entity (as defined in
IC 5-1.5-1-8) under an indenture of trust requiring an adequate
debt reserve fund.
(2) The board for depositories shall fix the one (1) time or
annual charge to be paid by the bond bank for each guarantee in
an amount considered by the board to be appropriate and
consistent with the market rate for that guarantee, taking into
consideration the terms of the indenture applicable to the bond
bank obligation.
(3) The board for depositories may agree to other terms for each
guarantee that the secretary-investment manager certifies as
being commercially reasonable and that the board, in its
judgment, determines to be proper.
(c) Any claim, loss, or debt arising out of any guarantee
authorized by section 7(d)(6) or 7(d)(7) of this chapter is the
obligation of the board for depositories payable out of the public
deposit insurance fund only and does not constitute a debt, liability,
or obligation of the state or a pledge of the faith and credit of the
state. The document evidencing any guarantee must have on its face
the words, "The obligations created by this guarantee (or other
document as appropriate) do not constitute a debt, liability, or
obligation of the state or a pledge of the faith and credit of the state
but are obligations of the board for public depositories and are
payable solely out of the public deposit insurance fund, and neither
the faith and credit nor the taxing power of the state is pledged to the
payment of any obligation hereunder.".
(d) Any claim of loss by a lender or lessor under a guarantee
authorized by section 7(d)(6) or 7(d)(7) of this chapter, at the time it
is made in writing to the board, has priority against the fund on all
claims made after that time.
As added by P.L.19-1987, SEC.14. Amended by P.L.11-1990,
SEC.108; P.L.235-2005, SEC.82; P.L.162-2007, SEC.20.
IC 5-13-12-8.5
Repealed
(Repealed by P.L.2-2005, SEC.131.)
IC 5-13-12-9
Investment in instruments of indebtedness of credit corporation
issued certificate of election by secretary of state
Sec. 9. In addition to the investments authorized in section 7(d) of
this chapter, the board may invest, reinvest, and exchange
investments of the insurance fund in excess of the cash working
balance in instruments of indebtedness of a credit corporation to
which the secretary of state has issued a certificate of election under
IC 23-6-4-8.
As added by P.L.19-1987, SEC.14.
IC 5-13-12-10
Subordination of valid security agreement, mortgage,
combinations thereof, or other appropriate document securing
direct obligations
Sec. 10. With regard to direct obligations of the Indiana finance
authority that have been issued in conjunction with an industrial
development project undertaken by the authority, including those
obligations that are guaranteed by the board under this chapter or
purchased by the board under section 7(d)(8) of this chapter, the
board may upon the request of the authority permit a subordination
of any valid security agreement, mortgage, combinations thereof, or
other appropriate document securing the direct obligations, if the
board in its discretion determines that the subordination is reasonably
necessary to accomplish the objectives of the industrial development
project.
As added by P.L.19-1987, SEC.14. Amended by P.L.11-1990,
SEC.109; P.L.235-2005, SEC.83.
IC 5-13-12-11
Loans to commuter transportation district
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 public mass
transportation 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 public mass
transportation 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.
IC 5-13-12-12
Board reports; presentment to budget committee
Sec. 12. (a) In June and December each year, the board shal