January 29, 2010
HOUSE BILL No. 1336
_____
DIGEST OF HB 1336
(Updated January 27, 2010 5:56 pm - DI 101)
Citations Affected: IC 5-10.2; IC 5-13; IC 28-1; IC 34-30.
Synopsis: State investment in aggressive lenders. Defines an
"aggressive lender" as a financial institution that engages in a practice
of making consumer loans in Indiana at rates of interest that exceed the
maximum finance charge allowed for supervised loans under the
Uniform Consumer Credit Code. Exempts from the definition of
aggressive lending: (1) small loans by pay-day lenders; (2) credit cards
that are offered, but not issued, by a financial institution; and (3) credit
cards issued to a person that is not a resident of Indiana; regardless of
whether the finance charge would otherwise make it an aggressive
loan. Requires the department of financial institutions to determine
whether a financial institution is an aggressive lender. Provides that a
financial institution determined to be an aggressive lender is ineligible
to serve as a depository for public funds. Provides that the public
employees' retirement fund (PERF) and the teachers' retirement fund
(TRF) must divest themselves of direct holdings in financial
institutions determined to be aggressive lenders.Prohibits a financial
institution from imposing a service charge on a political subdivision or
the state for the purchase of a United States Treasury Note. Permits
local government investment officers to invest in municipal securities
issued by an Indiana local governmental entity, a quasi-governmental
entity related to the state, or a unit of government, municipal
corporation, or special taxing district in Indiana so long as the issuer
has not defaulted on an obligation within the 20 years preceding the
date of the purchase. Replaces the requirement that money be invested
in transaction accounts and certificates of deposit with the depository
(Continued next page)
Effective: Upon passage; July 1, 2010.
Bardon, Grubb
January 13, 2010, read first time and referred to Committee on Financial Institutions.
January 28, 2010, amended, reported _ Do Pass.
Digest Continued
quoting the highest interest rate with the authority to invest in a
depository offering any one of the top three interest rates so long as the
reason for choosing the alternate depository is noted in the
memorandum of quotes. Provides that a unit may not invest more than
50% of the unit's total public funds that are invested at any point in
time in nonfederally insured deposit accounts. Adds federally chartered
credit unions as a type of financial institution that may become a
depository for public funds. Limits the maximum deposit of state and
local public funds a federally chartered credit union may have at any
time to 20% of the total shares of the federally chartered credit union.
Requires the board for public depositories to meet at least once each
calendar quarter. Provides for geographical representation on the board
for public depositories. Requires the four governor appointments to
include a chief executive officer or a chief financial officer of a
depository and that each appointment represent a different segment of
the financial institutions industry based on total assets. Specifies that
the terms of the appointed member is four years and that a member's
term does not extend beyond the appointed term. Permits the governor
to reappoint a member if the individual meets the requirements at the
time of reappointment. Provides that a simple majority of the board
members voting is required to approve an action by the board instead
of a unanimous vote. Changes the notice requirement for meeting
notices from ten days to two days. Allows the board to fix the
assessment rate at the times the board determines are necessary instead
of twice each year. Provides that the board for depositories may
consider capital adequacy, liquidity, and asset quality in addition to any
study by actuaries in establishing any change in the reserve for losses.
Increases the amount of anticipatory warrants the board may issue to
pay immediate claims when the assets in the public deposit insurance
fund are not sufficient to pay claims from $1,500,000 to $300,000,000.
Permits the board to accept as collateral bonds or other obligations that
the board could not invest in if the board determines the obligations are
acceptable collateral. Permits the board to determine whether a
depository may withdraw collateral when the amount of public funds
on deposit is at least 10% less than the market value of securities
pledged as collateral. Allows the board to determine the amount and
type of substituted securities a depository may provide to insure the
insurance fund's solvency. Provides that the market value of the
substituted securities as of the date of delivery may be less than, but not
exceed, the amount determined by the board. Provides that a joint
investment fund may be invested or reinvested only in investments that
are permitted for political subdivisions. Limits the maximum deposit
of state and local public funds a public depository may have at any time
to 100% of the balance in the public deposit insurance fund unless the
depository securitizes the excess amount of the deposit with assets of
the depository. Eliminates a report by the public employees' retirement
fund to the board for depositories' secretary-investment manager and
an interest calculation concerning the coverage of local police and
firefighter pension funds.
January 29, 2010
Second Regular Session 116th General Assembly (2010)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in
this style type, and deletions will appear in
this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in
this style type. Also, the
word
NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in
this style type or
this style type reconciles conflicts
between statutes enacted by the 2009 Regular and Special Sessions of the General Assembly.
HOUSE BILL No. 1336
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 5-10.2-11; (10)HB1336.1.1. -->
SECTION 1. IC 5-10.2-11 IS ADDED TO THE INDIANA CODE
AS A
NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]:
Chapter 11. Divestment From Aggressive Lenders
Sec. 1. As used in this chapter, "aggressive lender" has the
meaning set forth in IC 28-1-2-40(b).
Sec. 2. As used in this chapter, "board" refers to the following:
(1) The board of trustees of the Indiana state teachers'
retirement fund.
(2) The board of trustees of the public employees' retirement
fund.
Sec. 3. As used in this chapter, "cost of divestment" means the
sum of the following:
(1) The costs associated with the sale, redemption, divestment,
or withdrawal of an investment.
(2) The costs associated with the acquisition and maintenance
of a replacement investment.
(3) A cost not described in subdivision (1) or (2) that is
incurred by the fund in connection with a divestment
transaction.
Sec. 4. (a) As used in this chapter, "direct holdings" means all
securities of a company held directly by a fund or in an account in
which the fund owns all shares or interests.
(b) The term does not include securities of a company that are:
(1) held in an account or a fund; and
(2) managed by one (1) or more persons:
(A) who are not employed by the fund; and
(B) in which the fund owns shares or interests together
with other investors not subject to this chapter.
Sec. 5. As used in this chapter, "fund" refers to the following:
(1) The Indiana state teachers' retirement fund.
(2) The public employees' retirement fund.
Sec. 6. Each calendar quarter, after the department of financial
institutions publishes its quarterly update of the aggressive lender
list in the Indiana Register under IC 28-1-2-40(f), the board shall
immediately identify the companies on the aggressive lender list in
which the fund administered by the board has direct holdings.
Sec. 7. (a) If a lender appears on the aggressive lender list under
IC 28-1-2-40(f) for a continuous period of one hundred eighty (180)
days, and continues to remain on the aggressive lender list for the
time periods specified in subdivisions (1) through (3), the fund shall
sell, redeem, divest, or withdraw all publicly traded securities of
the lender that are held as direct holdings by the fund, as follows:
(1) At least fifty percent (50%) of the securities shall be
removed from the fund's assets under management within
three (3) years after the lender's appearance on the aggressive
lender list.
(2) At least seventy-five percent (75%) of the securities shall
be removed from the fund's assets under management within
four (4) years after the lender's appearance on the aggressive
lender list.
(3) One hundred percent (100%) of the securities shall be
removed from the fund's assets under management within five
(5) years after the lender's appearance on the aggressive
lender list.
(b) A board is not required to divest the board's direct holdings
in an aggressive lender under subsection (a) if the estimated cost of
divestment is greater than ten percent (10%) of the total value of
the board's direct holdings in the aggressive lender. The board
shall include any direct holdings in an aggressive lender that are
exempted from divestment under this subsection in the board's
report submitted to the legislative council under section 9 of this
chapter.
Sec. 8. A fund shall not acquire securities of lenders on the
aggressive lender list.
Sec. 9. (a) On or before November 1, 2011, and as directed by
the legislative council, each board shall submit a report in an
electronic format under IC 5-14-6 to the legislative council.
Notwithstanding IC 5-14-6-4(b)(2), the submission of a report
under this subsection to the executive director of the legislative
services agency fulfills the board's requirement to send a copy of
the report to each member of the general assembly using the
member's senate or house of representatives electronic mail
address.
(b) A report submitted by the board of a fund under this section
must include at least the following information, as of the date of the
report:
(1) All investments sold, redeemed, divested, or withdrawn by
the fund in compliance with section 7(a) of this chapter.
(2) All direct holdings in an aggressive lender that are
exempted from divestment under section 7(b) of this chapter.
(3) A copy of the most recently published aggressive lender
list under IC 28-1-2-40(f).
Sec. 10. With respect to actions taken in compliance with this
chapter, a fund is exempt from any conflicting statutory or
common law obligations, including any obligations with respect to
choice of asset managers, investment funds, or investments for
fund securities portfolios.
Sec. 11. (a) Both:
(1) the state and its officers, agents, and employees; and
(2) each fund and its board members, executive director,
officers, agents, and employees;
are immune from civil liability for any act or omission related to
the removal of an asset from the fund under this chapter.
(b) In addition to the immunity provided under subsection (a),
both:
(1) the officers, agents, and employees of the state; and
(2) the board members, executive director, officers, agents,
and employees of a fund;
are entitled to indemnification from the fund for all losses, costs,
and expenses, including reasonable attorney's fees, associated with
defending against any claim or suit relating to an act authorized
under this chapter.
SOURCE: IC 5-13-4-10; (10)HB1336.1.2. -->
SECTION 2. IC 5-13-4-10 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 10. "Financial
institution" means any of the following:
(1) A bank, trust company, or mutual savings bank that:
(A) was incorporated under the law of Indiana or any other
state; and
(B) has its principal office or a branch in Indiana.
(2) A national banking association with its principal office or a
branch in Indiana.
(3) A savings association operating as a deposit association
incorporated under Indiana law.
(4) A federally chartered savings association with its principal
office or a branch in Indiana.
(5) A federally chartered savings bank with its principal office or
a branch in Indiana.
(6) A state chartered credit union in Indiana that is federally
insured or privately insured and that has assets of three million
dollars ($3,000,000) or more.
(7) A federally chartered credit union that has assets of three
million dollars ($3,000,000) or more and with its principal
office or a branch in Indiana.
SOURCE: IC 5-13-8-9; (10)HB1336.1.3. -->
SECTION 3. IC 5-13-8-9 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2010]: Sec. 9. (a) All public funds of all
political subdivisions shall be deposited in the designated depositories
located in the respective territorial limits of the political subdivisions,
except as provided in this section.
(b) Each board of finance of a political subdivision:
(1) that is not a city, town, or school corporation; and
(2) whose jurisdiction crosses one (1) or more county lines;
may limit its boundaries for the purpose of this section to that portion
of the political subdivision within the county where its principal office
is located.
(c) If there is no principal office or branch of a financial institution
located in the county or political subdivision, or if no financial
institution with a principal office or branch in the county or political
subdivision will accept public funds under this chapter, the board of
finance of the county and the boards of finance of the political
subdivisions in the county shall designate one (1) or more financial
institutions with a principal office or branch outside of the county or
political subdivision, and in the state, as a depository or depositories.
(d) The board of trustees for a hospital organized or operated under
IC 16-22-1 through IC 16-22-5 or IC 16-23-1 may invest any money in
the hospital fund anywhere in the state with any financial institution
designated by the state board of finance as depositories for state
deposits.
(e) If only one (1) financial institution that has a branch or principal
office in a county or political subdivision is willing to accept public
funds, the board of finance for the county or political subdivision may:
(1) treat the financial institution that is located within the county
or political subdivision as if the financial institution were not
located within the county or political subdivision; and
(2) designate one (1) or more financial institutions to receive
public funds under the requirements of subsection (c).
(f) The investing officer shall maintain the deposits as follows:
(1) In one (1) or more depositories designated for the political
subdivision, if the sum of the monthly average balances of all the
transaction accounts for the political subdivision does not exceed
one hundred thousand dollars ($100,000).
(2) In each depository designated for the political subdivision, if
subdivision (1) does not apply and fewer than three (3) financial
institutions are designated by the local board of finance as a
depository.
(3) In at least two (2) depositories designated for the political
subdivision, if subdivision (1) does not apply and at least three (3)
financial institutions are designated by the local board of finance
as a depository.
(g) This subsection applies to a depository that is a federally
chartered credit union. An investing officer may not make a
deposit and the federally chartered credit union may not accept a
deposit of public funds if the deposit would cause the federally
chartered credit union to have total deposit accounts and
investments of public funds that exceed twenty percent (20%) of
the total shares of the federally chartered credit union as of the end
of the preceding calendar quarter. However, a deposit that
complies with this subsection when the deposit is made remains
legal even if a subsequent decrease in the value of the total shares
of the federally chartered credit union causes the percentage of
investments and deposit accounts of public funds to exceed twenty
percent (20%) of the total shares of the federally chartered credit
union.
SOURCE: IC 5-13-9-4; (10)HB1336.1.4. -->
SECTION 4. IC 5-13-9-4 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 4. (a) Each officer designated
in section 1 of this chapter may deposit, invest, or reinvest any funds
that are held by the officer and available for investment in transaction
accounts issued or offered by a designated depository of a political
subdivision for the rates and terms agreed upon periodically by the
officer making the investment and the designated depository.
(b) The investing officer making a deposit in a certificate of deposit
shall obtain quotes of the specific rates of interest for the term of that
certificate of deposit that each designated depository will pay on the
certificate of deposit. Quotes may be solicited and taken by telephone.
A memorandum of all quotes solicited and taken shall be retained by
the investing officer as a public record of the political subdivision
under IC 5-14-3. A deposit made under this subsection shall be If the
deposit is not placed in the designated depository quoting the highest
rate of interest, If more than one (1) depository submits a quote of the
highest interest rate quoted for the investment, the deposit may be
placed in any or all of the designated depositories quoting the highest
rate in the amount or amounts determined by the investing officer, in
the investing officer's discretion. the investing officer shall:
(1) place the deposit in the depository quoting the second or
third highest rate of interest; and
(2) note the reason for placing the deposit on the
memorandum of quotes.
(c) If all of the designated depositories of a political subdivision
decline to issue or receive any deposit account, or to issue or receive
the deposit account at a rate of interest equal to the highest rate being
offered other investors, investments may be made in the deposit
accounts of any financial institution designated for state deposits as a
depository by the state board of finance under IC 5-13-9.5.
SOURCE: IC 5-13-9-5; (10)HB1336.1.5. -->
SECTION 5. IC 5-13-9-5 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 5. (a) The board of county
commissioners of each county, and the fiscal body of each political
subdivision other than a county, may by ordinance or resolution
authorize the investing officer of each, respectively, to invest in
certificates of deposit of depositories that have not been designated by
the local board of finance of either but have been designated by the
state board of finance as a depository for state deposits under
IC 5-13-9.5. An ordinance or a resolution adopted under this subsection
must provide that the authority granted in the ordinance or resolution
expires on a date that is not later than two (2) years after the date the
ordinance or resolution is adopted.
(b) With respect to any money to be invested in a deposit account
under subsection (a), the investing officer shall solicit quotes for the
certificates of deposit from at least three (3) depositories. If only one
(1) depository has been designated for the political subdivision by its
local board of finance, a quote must be solicited from that depository.
If two (2) or more depositories have been designated for the political
subdivision by its local board of finance, at least two (2) quotes must
be solicited from the depositories thus designated. The quotes may be
solicited and taken by telephone. A memorandum of all quotes solicited
and taken shall be retained by the investing officer as a public record
of the political subdivision under IC 5-14-3.
(c) Investments in any certificates of deposit to which this section
applies shall be placed in the depository quoting the highest rate of
interest under subsection (b), as determined after deducting any fee
charged by the depository. If two (2) or more depositories submit the
same highest quote, the investment shall be placed as follows:
(1) If only one (1) of the highest quoters is a depository
designated for the political subdivision by its local board of
finance, the investment shall be placed in that depository.
(2) If more than one (1) of the highest quoters are depositories
designated for the political subdivision by its local board of
finance, the investment shall be placed by the investing officer in
any or all of these depositories in the amount or amounts
determined by the investing officer, in the investing officer's
discretion.
(3) If none of the highest quoters is a depository designated for
the political subdivision by its local board of finance, the
investment shall be placed by the investing officer in one (1) of
the depositories submitting the highest quote.
(c) If a deposit is not placed in the designated depository quoting
the highest rate of interest, the investing officer shall follow the
procedures and priority for placing deposits that are set forth in
section 4 of this chapter and note the reason for placing the deposit
on the memorandum of quotes.
SOURCE: IC 5-13-9-8; (10)HB1336.1.6. -->
SECTION 6. IC 5-13-9-8 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2010]: Sec. 8. Any investing officer of a
political subdivision that makes a deposit in any deposit or other
account may be required to pay a service charge to the depository in
which the funds are deposited, if the depository requires all customers
to pay the charge for providing that service. However, the service
charge imposed must be considered in the computation of the interest
rate for determining which depositories are entitled to investments as
prescribed by sections 4 and 5 of this chapter. If the total service charge
cannot be computed before the investment, the investing officer shall
estimate the service charge and adjust the interest rate based on this
estimate. The service charge may be paid by direct charge to the
deposit or other account or in any other manner mutually agreed upon
by the investing officer and the depository. A service charge may not
be imposed on a political subdivision for the purchase of a United
States Treasury Note.
SOURCE: IC 5-13-9-9; (10)HB1336.1.7. -->
SECTION 7. IC 5-13-9-9 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 9. An officer designated in
section 1 of this chapter may not do the following:
(1) Purchase securities on margin.
(2) Open a securities margin account for the investment of public
funds.
(3) Invest more than fifty percent (50%) of the unit of
government's total public funds that are invested at any point
in time in nonfederally insured deposit accounts under this
chapter.
SOURCE: IC 5-13-9-10; (10)HB1336.1.8. -->
SECTION 8. IC 5-13-9-10, AS AMENDED BY P.L.3-2008,
SECTION 27, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: Sec. 10. (a) The investing officers of two (2) or more
political subdivisions located within a county may establish a joint
investment fund by entering into a written master agreement that
defines the rights and obligations of the participating political
subdivisions.
(b) An investing officer of a political subdivision that enters into a
written master agreement under subsection (a) may pay funds that are
held by the investing officer and that are available for investment into
the joint investment fund.
(c) The fund shall be administered by a board, which must be
comprised of the investing officer of each of the participating political
subdivisions and which must be an instrumentality of the participating
political subdivisions. Each officer of a political subdivision located
within the county who is designated in section 1 of this chapter may
pay funds that are held by the officer and available for investment into
a joint fund known as a joint investment fund. The fund is administered
by a board comprised of the investing officer of each of the
participating political subdivisions and is an instrumentality of the
participating political subdivisions.
(d) A joint investment fund must be invested and reinvested as a
separate and individual fund.
A joint investment fund may be
invested or reinvested only in investments that are permitted for
political subdivisions by this chapter.
(e) A written master agreement under subsection (a) must provide
the following:
(1) A political subdivision may participate in a joint investment
fund only with the written authorization of its local board of
finance.
(2) A political subdivision may participate in a joint investment
fund only if its legislative body approves the written master
agreement.
(3) The board of a joint investment fund shall establish written
policies for the investment and reinvestment of joint investment
funds in the manner provided by IC 30-4-3-3.
(4) A fund shall be invested and reinvested as prescribed in
subdivision (3).
(5) A custodian bank or trust company located in Indiana must:
(A) be selected and contracted by the board of a joint
investment fund to hold the securities and other investments
of the joint investment fund;
(B) collect the income and other receipts from the securities
and other investments; and
(C) provide any other services appropriate and customary for
a custodian;
subject to the direction of the board of a joint investment fund.
(6) The board of a joint investment fund may select and contract
with a fund administrator to provide investment advice to the
board and any other services determined by the board to be
appropriate and necessary for the efficient administration and
accounting of the joint investment fund. The fund administrator
shall agree to recommend only securities and other investments
as prescribed in the written policies established by the board in
rendering investment advice to the board and shall agree to be
responsible, accountable, and liable for any breach of this
provision. The fund administrator must have experience in the
investment of public funds for governmental entities and must be
either of the following:
(A) A financial institution located in Indiana.
(B) Registered as an investment adviser with the United States
Securities and Exchange Commission under the Investment
Advisers Act of 1940, as amended (15 U.S.C. 80a-9 et seq.),
with public funds under management in the amount of at least
one hundred million dollars ($100,000,000).
(7) A joint investment fund must be audited at least annually by
an independent auditing firm, with a copy of the audit provided to
each participating political subdivision.
(8) The administrative expenses of a joint investment fund,
including fees for the fund administrator, custodian, auditor, and
other professional services, must be paid from the fund's interest
earnings.
(9) The interest earnings that exceed the administrative expenses
of a joint investment fund must be credited to each political
subdivision participating in the joint investment fund in a manner
that equitably reflects the differing amounts and terms of the
political subdivision's investment in the joint investment fund.
(10) Each participating political subdivision shall receive reports,
including a daily transaction confirmation reflecting any activity
in the political subdivision's account and monthly reports
reflecting its investment activity in the joint investment fund and
the performance and composition of the joint investment fund
itself.
(11) The board of a joint investment fund shall meet at least
annually to review the operation and performance of the joint
investment fund, the custodian, the fund administrator, the
auditor, and any other professional retained by the board.
(12) The board of a joint investment fund shall provide for any
other policies that are necessary for the efficient administration
and accounting of the joint investment fund and are consistent
with the law governing the investment, management, deposit, and
safekeeping of public funds of political subdivisions.
SOURCE: IC 5-13-9.5-1; (10)HB1336.1.9. -->
SECTION 9. IC 5-13-9.5-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 1. (a) A financial
institution may at any time file an application to become a depository
and receive public funds of the state on deposit. Except as provided in
IC 5-13-8-1 and IC 5-13-8-7, designation of a depository to receive
public funds of the state qualifies a depository to receive public funds
of a political subdivision. Applications for the state board of finance
must be filed with the treasurer of state. The treasurer shall submit each
application to the board.
(b) An application must:
(1) be made in writing on forms prescribed under section 8 of this
chapter;
(2) contain terms and conditions as required and authorized by
this chapter; and
(3) offer to:
(A) receive public funds of the state on deposit; and
(B) provide the security required by IC 5-13-13-7 for the
safekeeping and prompt payment of the deposited funds.
(c) A financial institution is ineligible to become a depository and
receive public funds of the state if the institution fails to maintain a
capital ratio in excess of the minimum required by the governmental
supervisory body of the institution. If the financial institution is already
a depository, the institution may continue to hold the public funds until
maturity to avoid the imposition of a penalty upon the depositor,
although the financial institution may not accept the public funds for
reinvestment and may not accept additional public funds. A
determination of the ratio described in this subsection must be based
on the institution's most recent periodic statement of condition filed
with the institution's governmental supervisory body under the
regulatory accounting principles as prescribed by the supervisory body.
(d) A financial institution is ineligible to become a depository
and receive public funds of the state during any period in which the
institution is determined to be an aggressive lender by the
department of financial institutions under IC 28-1-2-40. If the
financial institution is already a depository, the institution may
continue to hold the public funds until maturity to avoid the
imposition of a penalty upon the depositor, although the financial
institution may not accept the public funds for reinvestment and
may not accept additional public funds.
(d) (e) A financial institution shall furnish to the board a certificate
executed by an officer of the institution signifying that the institution:
satisfies:
(1) satisfies the requirements of subsection (c); and
(2) is not an aggressive lender as determined by the
department of financial institutions under IC 28-1-2-40; and
(2) (3) satisfies the requirement in section 6(b) of this chapter that
the sum of:
(A) the total principal amount of the depository's outstanding
loans to Indiana residents; plus
(B) the total value of the depository's investments in Indiana
residents;
is at least equal to the total amount of public funds of the state and
political subdivisions of the state that are on deposit in the
depository.
The board may rely on a certificate furnished under this subsection in
determining whether to deposit public funds or reinvest public funds
in the institution.
SOURCE: IC 5-13-9.5-6; (10)HB1336.1.10. -->
SECTION 10. IC 5-13-9.5-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 6. (a) The board for
depositories regarding depositories of public funds of the state may
revoke the commission of any depository at any time for any cause
considered sufficient by the board for depositories.
(b) The causes for which the board for depositories may revoke the
commission of a depository under subsection (a) include:
(1) the failure of the depository to conduct lending activities in
Indiana to such an extent that, at the end of each quarter, pursuant
to the depository's certification, the sum of:
(1) (A) the total principal amount of the depository's
outstanding loans to Indiana residents (as defined in
IC 5-13-8-7); plus
(2) (B) the total value of the depository's investments in
Indiana residents (as defined in IC 5-13-8-7);
is at least equal to the total amount of public funds of the state and
political subdivisions of the state that are on deposit in the
depository; or
(2) the determination by the department of financial
institutions under IC 28-1-2-40 that the depository is an
aggressive lender.
(c) Upon revocation, the depository shall immediately render an
accounting and make settlement for all public funds deposited with the
depository.
SOURCE: IC 5-13-10-3; (10)HB1336.1.11. -->
SECTION 11. IC 5-13-10-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 3.
(a) The treasurer of
state may not deposit aggregate funds in deposit accounts in any one
(1) designated depository in an amount aggregating at any one (1) time
more than:
(1) the lesser of the following:
(A) fifty percent (50%) of the combined capital, surplus, and
undivided profits of that depository, as determined by its last
published statement of condition filed with the treasurer of
state;
or
(B) the amount that would cause the total investments and
deposit accounts of public funds in the designated
depository to exceed one hundred percent (100%) of the
balance in the public deposit insurance fund as of the end
of the preceding calendar quarter, unless the depository
securitizes the excess amount of the deposit with assets of
the depository; or
(2) in the case of a federally chartered credit union, twenty
percent (20%) of the total shares of the federally chartered
credit union.
(b) A deposit that is not prohibited by subsection (a)(1)(B) when
the deposit is made in a depository remains legal even if a
subsequent decrease in the balance in the public deposit insurance
fund causes the investments and deposit accounts of public funds
in the depository to exceed one hundred percent (100%) of the
balance in the public deposit insurance fund.
(c) Each depository shall file with the treasurer of state each
periodic statement of condition required to be filed by it with its
governmental supervisory body. If the state board for depositories finds
that excess cash of the state is substantially more than that which had
been anticipated, it may increase that maximum percentage in any
depository, and the treasurer of the state may invest the additional
funds in deposit accounts distributed among the depositories
substantially in proportion to their respective capital, surplus, and
undivided profits.
SOURCE: IC 5-13-10.5-17; (10)HB1336.1.12. -->
SECTION 12. IC 5-13-10.5-17 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 17. Any public officer
of the state that makes a deposit in any deposit or other account may be
required to pay a service charge to the depository in which the funds
are deposited, if the depository requires all customers to pay the charge
for providing that service. If the total service charge cannot be
computed before the investment, the investing officer of the state shall
estimate the service charge and adjust the interest rate based on this
estimate. The service charge may be paid by direct charge to the
deposit or other account or in any other manner mutually agreed upon
by the investing officer and the depository. A service charge may not
be imposed on the state for the purchase of a United States
Treasury Note.
SOURCE: IC 5-13-12-2; (10)HB1336.1.13. -->
SECTION 13. IC 5-13-12-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 2. (a) The board for
depositories consists of the governor, the treasurer of state, the auditor
of state, the chairman of the commission for financial institutions, the
chief examiner of the state board of accounts, and four (4) members
appointed by the governor all of whom must be residents of Indiana
and have had substantial expertise in commercial
bank management
and lending with depositories. No more than two (2) of the four (4)
appointees may identify with the same political party.
For
appointments after June 30, 2010, all four (4) appointees must be
a chief executive officer or a chief financial officer of a depository
at the time of the appointment. In making these 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) must be employed by a depository that has total
assets of less than five hundred million dollars ($500,000,000).
(2) One (1) must be employed by a depository that has total
assets of less than one billion dollars ($1,000,000,000).
(3) One (1) must be employed by a depository that has total
assets of at least one billion dollars ($1,000,000,000) but less
than five billion dollars ($5,000,000,000).
(4) One (1) must be employed by a depository that has total
assets of at least five billion dollars ($5,000,000,000).
Total assets shall be determined using the depository's most recent
statement of condition. The terms of the appointed members extend
for are four (4) year periods. 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 governor.
(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 five (5) 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, and 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. All records of the board are subject to
public inspection under IC 5-14-3.
(d) Ten (10) 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.
SOURCE: IC 5-13-12-4; (10)HB1336.1.14. -->
SECTION 14. IC 5-13-12-4, AS AMENDED BY P.L.146-2008,
SECTION 39, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2010]: 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). (e).
(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) (d) Subject to subsection (j), (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
(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) (e) in an
amount equal to the amount determined under subsection
(c)(1).
(c).
(g) (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.
(h) (f) Subject to subsection
(j), (g), 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.
public employees' retirement fund for the benefit of the police and
firefighter pension funds established by IC 36-8-6, IC 36-8-7, and
IC 36-8-7.5 the amount deposited in the pension relief fund in
December of the preceding year under subsection (d).
(j) (g) Before providing a check to the auditor of state under
subsection
(f)(2) (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 (f)(2) (d) and a distribution may not be made from the
pension distribution fund under subsection (h) (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 (f)(2) (d) and a distribution may not
be made under subsection (f) (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.
SOURCE: IC 5-13-12-5; (10)HB1336.1.15. -->
SECTION 15. IC 5-13-12-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: 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 payable during the succeeding six (6)
month period. This determination shall be made by the board before or
as soon as practicable after the applicable July 1,
or 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 six
(6) month 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, at the beginning of any six (6) month period, no
action has been taken by the board for depositories fixing the
assessment rate, if any, on public funds for the succeeding six (6)
month period, the assessment rate is the same rate, if any, in effect
during the preceding six (6) month period. Whenever as of July 1, or
January 1, the value of the assets in the fund equals or exceeds the
reserve for losses, the board shall eliminate the assessment requirement
for the succeeding six (6) month period 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. 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.
SOURCE: IC 5-13-12-7; (10)HB1336.1.16. -->
SECTION 16. IC 5-13-12-7, AS AMENDED BY P.L.1-2006,
SECTION 100, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: 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.
SOURCE: IC 5-13-13-4; (10)HB1336.1.17. -->
SECTION 17. IC 5-13-13-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 4. (a) Whenever
the assets in the insurance fund are not sufficient to pay the claims of
any kind that have been finally determined and have become payable,
the board for depositories shall issue anticipatory warrants for the
purpose of raising money for the immediate payment of the claims. The
warrants outstanding and unpaid must not at any time exceed the sum
of one million five hundred thousand dollars ($1,500,000). three
hundred million dollars ($300,000,000). Interest may be paid upon
the warrants from the date the rate was established by the board for
depositories. Interest is payable at the end of each year or for a shorter
period as the warrants remain unpaid.
(b) The warrants are the obligation of the board for depositories
payable out of the public deposit insurance fund only and do not
constitute a debt, liability, or obligation of the state or a pledge of the
faith and credit of the state. Each warrant must have printed on its face
the words, "This warrant is an obligation of the board for depositories
payable solely out of the public deposits insurance fund, and neither the
faith and credit nor the taxing power of the state is pledged to the
payment of the principal, the interest, or any other amount owed on the
warrants.".
(c) Subject to the limitations in subsections (a) through (b), the
warrants shall be issued in the individual and gross amounts and in the
form and at the rate of interest approved by the board for depositories.
SOURCE: IC 5-13-13-7; (10)HB1336.1.18. -->
SECTION 18. IC 5-13-13-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 7. (a) At any time
when the board for depositories determines that the assets of the
insurance fund are insufficient to pay its liabilities, accrued or
contingent, or determines that the assessments due or to become due
will not be sufficient to maintain the insurance fund in a solvent
condition and insure the safekeeping and prompt payment of public
funds, the board may enter an order requiring
any or all then
constituted depositories to substitute other security in the amount and
type, as determined by the board from time to time, to secure the
safekeeping and prompt payment of public funds.
(b) The board may require any or all then constituted depositories
to deliver and pledge to the proper local board of finance or to the state
board of finance, under the conditions for joint control of the collateral
by the depositories as may be approved by the board for depositories,
bonds or other obligations of like character as those in which that the
board is authorized to invest the excess funds of the insurance fund
under IC 5-13-12-7(d). determines are acceptable collateral. The
market value of these securities, at the time of delivery, must equal be
an amount determined by the board, which may not exceed the
amount of public funds then on deposit with the respective
depositories. The board may require depositories to pledge acceptable
securities to such an extent that the market value of the pledge will at
all times be substantially equal to the amount of public funds on
deposit in the respective depositories.
(c) Whenever an order is in force and the amount of public funds on
deposit is at least ten percent (10%) less than the market value of
securities pledged to secure the payment, as required by the board,
the depository may withdraw the excess amount of pledged collateral.
(d) Any order of the board for depositories applies equally to all
depositories and becomes effective within the time fixed by the board.
However, the time of effectiveness must not be earlier than thirty (30)
days from the date of entry of the order by the board. The order
continues in force until rescinded by the board. Upon the entry of any
order by the board for depositories, all then constituted depositories
affected by the order shall comply with the order. Upon compliance,
and full payment of all its liabilities by the insurance fund, depositories
are not required to pay any further assessments for insurance under this
chapter until the order requiring collateral has been revoked or
rescinded and the collateral returned to the respective depositories.
SOURCE: IC 28-1-2-40; (10)HB1336.1.19. -->
SECTION 19. IC 28-1-2-40 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2010]:
Sec. 40. (a) The definitions in IC 24-4.5-3-103 apply
throughout this section.
(b) As used in this chapter, "aggressive lender" means a lender
determined by the department under this section to be engaged in
the practice of aggressive lending.
(c) As used in this section, "aggressive lending" means making
consumer loans in Indiana that provide for a loan finance charge
that exceeds the limits on loan finance charges for supervised loans
specified in IC 24-4.5-3-508, as adjusted in accordance with
IC 24-4.5-1-106. The term does not include:
(1) small loans as defined in IC 24-4.5-7-104; or
(2) the:
(A) offering of a credit card by a financial institution to the
financial institution's customers if the financial institution
is not the card issuer (as defined in 15 U.S.C. 1602(n)),
other than as an agent of the card issuer; or
(B) issuing of a credit card to a person that is not a resident
of Indiana;
regardless of whether the finance charge that applies to the
credit card offered or issued exceeds the limits on loan finance
charges for supervised loans specified in IC 24-4.5-3-508, as
adjusted in accordance with IC 24-4.5-1-106.
(d) If the department receives credible evidence from any source
that a lender is engaged in the practice of aggressive lending, the
department shall send a notice of the evidence by certified mail to
the lender's agent for service of process. The notice must:
(1) set forth the definition of an aggressive lender;
(2) describe the department's evidence that the lender meets
the definition of an aggressive lender;
(3) describe the consequences under IC 5-10.2-11 and
IC 5-13-9.5 of a finding that the lender is an aggressive
lender; and
(4) invite a reply that affirms or denies whether the lender is
engaged in the practice of aggressive lending.
If a lender disputes its designation as an aggressive lender under
this section, the lender may, within twenty (20) days of the date of
the notice, request a hearing on the determination. If a hearing is
requested, the department shall schedule the hearing not earlier
than twenty (20) days after the date of the request. If no hearing is
requested, the department's determination that the lender is an
aggressive lender is final.
(e) Except as otherwise provided in this section, any hearing
requested by a lender under subsection (d) and the determination
by the department are subject to IC 4-21.5-3. Judicial review of the
department's final determination may be had in accordance with
IC 4-21.5-5.
(f) Subject to subsections (g) and (h), at the beginning of each
calendar quarter, the department shall publish in the Indiana
Register:
(1) a list of those lenders determined by the department to be
aggressive lenders during the preceding calendar quarter;
and
(2) a cumulative list of lenders determined by the department
to be aggressive lenders.
(g) The department shall not place a lender that has made a
timely petition for judicial review under IC 4-21.5-5 of the
department's determination on the lists described in subsection (f)
until a final judgment affirming the department's determination is
made.
(h) A lender that has been determined by the department to be
an aggressive lender under this section may petition the
department for a hearing to demonstrate that the lender is no
longer engaged in the practice of aggressive lending. The hearing
and the determination by the department are subject to
IC 4-21.5-3. Judicial review of the department's final
determination may be had in accordance with IC 4-21.5-5. Upon
final determination by the department, or a final judgment in the
case of pending judicial review, that the lender is no longer an
aggressive lender, the department shall remove the lender's name
from the list required to be published under subsection (f)(2).
SOURCE: IC 34-30-2-11.6; (10)HB1336.1.20. -->
SECTION 20. IC 34-30-2-11.6 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2010]: Sec. 11.6. IC 5-10.2-11-11 (Concerning
the state and certain public pension funds for divestment of funds
authorized by law).
SOURCE: ; (10)HB1336.1.21. -->
SECTION 21.
An emergency is declared for this act.