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Senate Bill 0238

Senate Bill 0238

ARCHIVE (2010)

Latest Information

DIGEST OF SB238 (Updated February 2, 2010 3:06 pm - DI 84)

Public depositories. Removes the discretion of a school corporation to determine if a board of finance meeting is needed on an annual basis. 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. Permits counties and political subdivisions to invest public funds in certificates of deposit under certain conditions. Eliminates the power of the conservancy district in Lawrenceburg and Danville (Hendricks County) to invest in equity securities. Provides that in the case of the host community agreement future fund in Danville, the municipal securities in which the fund may invest may not have a maturity of more than five years. (Current law specifies that there is no maximum maturity for these investments.) Replaces the requirement that money be invested in transaction accounts and certificates of deposit with the depository 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 for geographical representation on the board for public depositories. Requires the four governor appointments to be a chief executive office or a chief financial officer of a depository and that each appointment represent a different segment of the financial institutions industry based on total deposits. Provides that if the depository is not an Indiana bank, the appointee must be the most senior corporate officer of the depository with management or operational responsibility, or both, or the person designated to manage public funds for the bank's depository that is located in Indiana. 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. Requires the assessment be effective on the first day of a month and with 90 days' notice. Exempts certain certificates of deposit issued by a federally insured bank or savings and loan association from the assessment calculation. 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 funds solvency consistent with the depository's pro rata share of total deposit accounts of public funds based on an average of the depository's total public deposits. 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 pledges acceptable collateral as security for the excess amount of the deposit. Provides that a financial institution may not have public funds on deposit if it issues a credit card with an interest rate in excess of 21% per year. Provides that penalty rates, interest on cash advances, and annual fees may not be considered in calculating the 21% per year interest rate. Provides that the disqualification does not apply to an institution that serves only as an agent of such a credit card issuer. 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.
    Current Status:
    In Committee - 2nd House
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