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HOUSE BILL No. 1067

Citations Affected: IC 36-9.

Synopsis: Federal fund exchange program. Establishes the federal fund exchange program (program) to allow a county, municipality, or metropolitan planning organization that receives funds from the federal surface transportation program to exchange the federal funds for an agreed upon amount of state funds. Provides that the Indiana department of transportation shall administer the program.

Effective: July 1, 2013.

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Cherry , Saunders , Frye R , Stemler
(SENATE SPONSORS _ WYSS, YOUNG R, CRIDER, BECKER)

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    January 7, 2013, read first time and referred to Committee on Roads and Transportation.
    February 14, 2013, amended, reported _ Do Pass.
    February 18, 2013, read second time, ordered engrossed.
    February 19, 2013, engrossed. Read third time, passed. Yeas 93, nays 0.

    February 25, 2013, read first time and referred to Committee on Homeland Security, Transportation and Veterans Affairs.
    March 7, 2013, amended, reported favorably _ Do Pass; reassigned to Committee on Appropriations.

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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 2012 Regular Session of the General Assembly.

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    A BILL FOR AN ACT to amend the Indiana Code concerning local government.

SOURCE: IC 36-9-42; (13)EH1067.1.1. -->     SECTION 1. IC 36-9-42 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2013]:
    Chapter 42. Federal Fund Exchange Program
    Sec. 1. As used in this chapter, "department" refers to the Indiana department of transportation established by IC 8-23-2-1.
    Sec. 2. As used in this chapter, "eligible entity" means a county, municipality, or metropolitan planning organization that receives, directly or indirectly, federal funds.
    Sec. 3. As used in this chapter, "federal funds" means funds received by an eligible entity through the federal surface transportation program.
    Sec. 4. As used in this chapter, "program" refers to the federal fund exchange program established by section 5 of this chapter.
    Sec. 5. The federal fund exchange program is established to provide eligible entities with greater flexibility in funding transportation projects. The department shall administer the

program.
    Sec. 6. Not later than March 1 of each year, the department shall determine the amount of state funds available for the program. In making the determination, the department shall consider the following:
        (1) Whether adequate state funds are available to fund the program without putting at risk other transportation activities or projects needing state funds.
        (2) Whether the department can readily and effectively use federal funds received through the program.
    Sec. 7. An eligible entity is eligible to participate in the program upon entering into an exchange agreement with the department. The department shall consider the following before entering into an exchange agreement with an eligible entity:
        (1) The amount of federal funds the eligible entity wants to exchange.
        (2) A brief description of each project the eligible entity wants to fund, including the estimated cost of the project.
        (3) The benefit to a project described in subdivision (2) from the removal of federal funding, due to the project's size, type, location, or other features.
        (4) The approximate relative equity among districts of the department in receiving state funds through the program.
        (5) The availability of state funds.
An eligible entity may enter into an exchange agreement with respect to a project at any time during the project development process.
    Sec. 8. An exchange agreement must provide the following:
        (1) The eligible entity may exchange only federal funds for state funds.
        (2) The eligible entity may use state funds only for a purpose approved by the department.
        (3) If the eligible entity uses state funds to replace local funds in order to use the local funds for purposes unrelated to transportation, the eligible entity:
            (A) must repay the state funds to the department; and
            (B) may not participate in the program during the succeeding fiscal year.
        (4) An exchange rate of not less than seventy-five cents ($0.75) of state funds for each one dollar ($1) of federal funds.
        (5) The eligible entity agrees to provide local matching funds equal to not less than ten percent (10%) of the estimated

project cost.
        (6) The department will disburse the state funds to the eligible entity on a reimbursement basis.
    Sec. 9. Not later than November 1 of each year, the department shall submit a report on the program to the general assembly in an electronic format under IC 5-14-6. A report submitted under this section must include:
        (1) a summary of the exchange agreements entered into during the fiscal year; and
        (2) a status report on the implementation of projects funded through the program.
    Sec. 10. An eligible entity that participates in the program shall comply with applicable public purchasing laws and competitive bidding requirements with respect to projects funded through the program.
    Sec. 11. The department may adopt rules under IC 4-22-2 to implement this chapter.