Indiana § 23-17-25-1 - Duties and prohibitions

§ 23-17-25-1. Duties and prohibitions

Sec. 1. Except where otherwise determined by a court of competent jurisdiction, a corporation that is a private foundation (as defined in Section 509(a) of the Internal Revenue Code of 1986, as amended) shall do the following:

(1) Distribute amounts for each taxable year at a time and in a manner as to not subject the corporation to tax under Section 4942 of the Internal Revenue Code of 1986.

(2) Not engage in an act of self-dealing (as defined in Section 4941(d) of the Internal Revenue Code of 1986).

(3) Not retain excess business holdings (as defined in Section 4943(c) of the Internal Revenue Code of 1986).

(4) Not make investments in a manner as to subject the corporation to taxes on investments that jeopardize charitable purposes (as defined in Section 4944 of the Internal Revenue Code of 1986).

(5) Not make taxable expenditures (as defined in Section 4945(d) of the Internal Revenue Code of 1986).

As added by P.L.179-1991, SEC.1.

IC 23-17-25.5Chapter 25.5. Restrictions on the Regulation of Charitable Organizations

23-17-25.5-1"Charitable organization" 23-17-25.5-2"State agency" 23-17-25.5-3Restriction on reporting requirements; exceptions

IC 23-17-25.5-1"Charitable organization" Sec. 1. As used in this chapter, "charitable organization" means any organization described in Section 501 of the Internal Revenue Code.

As added by P.L.40-2023, SEC.1.

IC 23-17-25.5-2"State agency" Sec. 2. As used in this chapter, "state agency" has the meaning set forth in IC 4-1-13-1.

As added by P.L.40-2023, SEC.1.

IC 23-17-25.5-3Restriction on reporting requirements; exceptions Sec. 3. (a) Except as otherwise specifically required or authorized by federal law, and except as provided in subsection (b), a:

(1) state agency; or

(2) state official;

may not impose on a charitable organization any filing or reporting requirements that are more stringent or burdensome than those imposed by, or authorized under, state or federal law.

(b) The limitation set forth in subsection (a) does not apply:

(1) to requirements imposed in connection with:

(A) state grants or contracts; or

(B) fraud investigations; or

(2) in connection with an enforcement action against a specific charitable organization.

As added by P.L.40-2023, SEC.1.

IC 23-17-25.7Chapter 25.7. Charitable Organization Beneficiary Bequest Protections

23-17-25.7-1Definitions 23-17-25.7-2Charitable organization beneficiary protections 23-17-25.7-3Compliance; reasonable justification for noncompliance; damages for failure to comply or provide a reasonable justification for noncompliance 23-17-25.7-4Charitable organization's right of action; complaint with applicable primary regulator; civil penalty

IC 23-17-25.7-1Definitions Sec. 1. The following definitions apply throughout this chapter:

(1) "Charitable organization" means any entity that is:

(A) recognized as tax exempt under Section 501(c)(3) of the Internal Revenue Code; and

(B) organized under IC 23-17-3.

(2) "Deceased" means a person who has:

(A) died; and

(B) designated a charitable organization as the beneficiary of an individual retirement account, retirement account, brokerage transfer on death account, annuity, or life insurance policy.

(3) "Financial institution" means any:

(A) bank;

(B) trust company;

(C) corporate fiduciary;

(D) savings association;

(E) credit union;

(F) savings bank;

(G) bank of discount and deposit;

(H) industrial loan and investment company; or

(I) investment company;

organized or reorganized under Indiana law, the law of another state (as defined in IC 28-2-17-19), or United States law.

As added by P.L.220-2025, SEC.2.

IC 23-17-25.7-2Charitable organization beneficiary protections Sec. 2. If a charitable organization is designated as the beneficiary of an individual retirement account, retirement account, brokerage transfer on death account, annuity, or life insurance policy, a financial institution or insurance company in control of the funds shall do the following:

(1) Transfer the funds directly to the charitable organization upon receipt of an affidavit submitted by the charitable organization that contains the following information:

(A) A statement by the charitable organization confirming that it is tax exempt under Section 501(c)(3) of the Internal Revenue Code.

(B) A copy of a corporate resolution authorizing the acceptance of the transferred funds.

(C) An Internal Revenue Service Form W-9 for identification.

(D) A copy of:

(i) the deceased's death certificate; or

(ii) other documentation that is authorized by the financial institution or insurance company to prove that the deceased has died.

(2) Shall not require:

(A) personal information, including the Social Security number, home address, and date of birth, of any employee, officer, or agent of the charitable organization; or

(B) the charitable organization to open an account or otherwise become a customer of the financial institution or insurance company;

as a condition of transferring the funds.

(3) If the financial institution or insurance company notifies the charitable organization of the fact that the charitable organization has been designated as the beneficiary of the deceased's individual retirement account, retirement account, brokerage transfer on death account, annuity, or life insurance policy, the financial institution or insurance company must provide the name of the deceased to the charitable organization.

As added by P.L.220-2025, SEC.2.

IC 23-17-25.7-3Compliance; reasonable justification for noncompliance; damages for failure to comply or provide a reasonable justification for noncompliance Sec. 3. (a) A financial institution or insurance company that receives the affidavit described in section 2(1) of this chapter shall:

(1) comply with the requirements of section 2 of this chapter; or

(2) provide to the charitable organization that submitted the affidavit described in section 2(1) of this chapter a reasonable justification for not complying with the requirements of section 2 of this chapter;

not later than sixty (60) days after receiving the affidavit.

(b) It is a reasonable justification for not complying with the requirements of section 2 of this chapter if compliance would cause a financial institution to violate:

(1) 12 U.S.C. 1829b, 12 U.S.C. 1951-1960, 31 U.S.C. 5311-5314, 31 U.S.C. 5316-5336, 31 CFR 1000-1099, or any other federal law or regulation;

(2) the rules of a self-regulatory organization registered under the federal Securities Exchange Act of 1934 (15 U.S.C. 78); or

(3) the laws of this state.

(c) If compliance with the requirements of section 2 of this chapter would cause a violation of a federal law described in subsection (b), the financial institution shall include in its reasonable justification a request to the charitable organization to provide the information required to comply with the federal law described in subsection (b).

(d) If a financial institution or insurance company fails to comply or provide a reasonable justification for not complying with the requirements of section 2 of this chapter not later than sixty (60) days after receiving the affidavit described in section 2(1) of this chapter, a court may:

(1) award the charitable organization damages sustained due to the delay in receiving the funds under section 2 of this chapter;

(2) award the charitable organization court costs, including attorney's fees; and

(3) impose a civil penalty on the financial institution or insurance company in an amount not less than five hundred dollars ($500) and not more than ten thousand dollars ($10,000) per incident.

As added by P.L.220-2025, SEC.2.

IC 23-17-25.7-4Charitable organization's right of action; complaint with applicable primary regulator; civil penalty Sec. 4. A charitable organization may bring an action in court under section 3(d) of this chapter or file a complaint with the applicable primary regulator with jurisdiction over a financial institution or an insurance company if the charitable organization believes that a financial institution or insurance company is not complying with this chapter. If a charitable organization files a complaint, the applicable primary regulator shall investigate the complaint. The applicable primary regulator may impose a civil penalty on the financial institution or insurance company in an amount not less than five hundred dollars ($500) and not more than ten thousand dollars ($10,000) per incident.

As added by P.L.220-2025, SEC.2.

IC 23-17-26Chapter 26. RepealedRepealed by P.L.118-2017, SEC.93.

IC 23-17-27Chapter 27. Records and Reports

23-17-27-1Required records 23-17-27-2Member's right to inspect and copy records 23-17-27-3Inspection by member's agent or attorney; copies; costs; list of members 23-17-27-4Court order for inspection and copying; payment of costs by corporation; restrictions on use of records 23-17-27-5Membership list; use 23-17-27-6Annual financial statements; furnishing to members 23-17-27-7Indemnification or advance of expenses to director; report to members 23-17-27-8Repealed