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Senate Bill 0388


Senate Bill 0388

ARCHIVE (2011)

Latest Information

 

DIGEST OF SB 388 (Updated April 29, 2011 8:12 pm - DI 58)


Swap agreements. Defines "issuing body", for purposes of restrictions on swap agreements, to include the state of Indiana and its agencies, commissions, and authorities, the Indiana bond bank, a political subdivision, county, school corporation, hospital association, municipal corporation, or special taxing district, a local public improvement bond bank, and any entity that issues bonds payable by any of these entities. Provides that swap agreements are covered by the restrictions only if any part of the payments owed by an issuing body is payable from tax revenues or special assessments. Provides that the law places restrictions on the use of swap agreements and does not authorize entering into swap agreements for any entity not already authorized under another law. Provides that a swap agreement may be used only in connection with the financing activities of an issuing body and may not be used as an investment by an issuing body. Provides that a swap agreement may be entered into only under the following conditions: (1) The swap agreement would not cause the aggregate outstanding notional amounts of all of the issuing body's outstanding swap agreements on obligations payable from tax revenues to exceed 20% of the sum of all aggregate outstanding obligations of the issuing body payable from tax revenues plus obligations payable from tax revenues not yet issued but for which one or more swap agreements have been entered into by the issuing body. Provides that the Indiana finance authority may provide an exemption from the threshold for a local issuing body, and that the budget committee must review a proposed swap agreement that would cause a state issuer to exceed the threshold. (2) The issuing body (if other than the Indiana finance authority) has adopted a comprehensive swap agreement policy at a public meeting that is not less restrictive than the swap agreement policy governing the adoption of swap agreements that is in place for the Indiana finance authority. (3) The swap agreement is approved by the issuing body at a public meeting and the resolution includes a thorough analysis of the risk the issuing body is assuming by entering into the swap agreement. Requires reports by the issuing body to its governing board regarding swap agreements.
    Current Status:
     Law Enacted
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