Citations Affected: IC 5-13-12; IC 5-20.
Synopsis: Funding for foreclosure counseling. Provides for an
assessment on financial institutions designated as a depository of
public funds for purposes of providing sufficient money to provide
foreclosure prevention counseling and assistance programs.
Effective: Upon passage.
January 16, 2009, read first time and referred to Committee on Financial Institutions.
A BILL FOR AN ACT to amend the Indiana Code concerning
financial institutions.
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) members. 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 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) 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.
month period. This determination shall be made by the board before or
as soon as practicable after the applicable July 1, or January 1.
(b) This subsection applies to the part of the rate set for
purposes of subsection (a)(1). 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. 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) (c) 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) (d) 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.
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 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 under section 5(a)(1) of this
chapter for a biennial period shall be retained by the fund. The amount
of the assessments, if any, levied by the board under section 5(a)(1) of
this chapter 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 under section 5(a)(1) of
this chapter 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.