MADAM PRESIDENT:
The Senate Committee on Tax and Fiscal Policy, to which was referred Senate Bill No. 238,
has had the same under consideration and begs leave to report the same back to the Senate
with the recommendation that said bill be AMENDED as follows:
Replace the effective dates in SECTIONS 2 through 7 with
"[EFFECTIVE JULY 1, 2010]".
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) An investing officer may not make a deposit of public funds,
and the depository may not accept a deposit of public funds, if the
deposit would cause the depository to have total deposit accounts
and investments of public funds exceeding 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. A deposit that is not prohibited by this subsection when
the deposit is made 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.".
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.
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:
(1) fails to maintain a capital ratio in excess of the minimum
required by the governmental supervisory body of the institution;
or
(2) issues a credit card as a card issuer, as defined in 15 U.S.C.
1602(n), and the interest rate on the credit card issued exceeds
twenty-one percent (21%). This subdivision does not apply to
an institution that serves only as an agent of such a credit
card issuer.
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 shall furnish to the board a certificate
executed by an officer of the institution signifying that the institution
satisfies:
(1) the requirements of subsection (c); and
(2) 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;
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.
(b) A deposit that is not prohibited by subsection (a)(2) 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.".
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 distribution 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.".
board,".
Renumber all SECTIONS consecutively.
(Reference is to SB 238 as introduced.)
and when so amended that said bill do pass.
Committee Vote: Yeas 11, Nays 0.
Hershman